Mr. ROBERTS. Mr. Chairman, I have 2 statements here, 1 prepared by Mr. Rose, which is a percentage summary, I would say, of entitlements received by the State or reserved, arranged from the highest through the lowest, that I would like to incorporate in the record.

Also, a statement which I believe is from the United States Office of Education, which shows the Alabama situation by school districts with reference to total entitlements, funds reserved, funds needed for remaining projects and entitlements not covered by projects.

Since it contains pretty well all the cities and counties in my district, I would like very much to incorporate it for the record, too, if I may. Mr. PERKINS. Without objection, the statements will be inserted in the record.

(The material referred to is as follows:)

The following data was taken from the summary prepared by the United States Office of Education, as of July 1, 1953. The States are rearranged according to percentage of entitlement each State has received or has reserved under Public Law 815. The States are arranged in the order from the highest percentage to the lowest percentage:

List of school districts in Alabama showing (1) total entitlements, (2) total funds reserved, (3) additional funds needed for projects on file, and (4) entitlements for which projects were not filed, as of July 1, 1953

Mr. ROBERTS. For the record, Mr. Chairman, I apologize for my lack of knowledge in this school matter, but I am mighty glad that Mr. Rose was here today.

Mr. WIER. You will know the problem after we give you a display of top leadership.

Mr. PERKINS We are mighty glad to have you with us this morning, Mr. Roberts. I can assure you that you have been helpful.

You have appeared before us several times and you have always been helpful to the committee.

Mr. ROBERTS. Thank you, Mr. Chairman.

Mr. RHODES. Mr. Chairman, I think Mr. Seely-Brown would like to submit a statement. Might I ask unanimous consent that his statement may be incorporated when it is submitted. (See p. 190.)

Mr. PERKINS. Without objection from any of the members we will let all members of the committee or Members of Congress submit statements within the next week and let the record remain open if it is satisfactory with the members of the subcommittee.

The committee will recess until 2 o'clock.

(Thereupon, at 11 a. m., the subcommittee was recessed, to reconvene at 2 p. m., same day.)

AFTERNOON SESSION

Mr. PERKINS. The committee will come to order.

Mr. HUSSEY. Mr. Chairman, I have here, dated April 13, 1956, a report from the Department of Health, Education, and Welfare on your bill, H. R. 10227. I would like to submit that for the record.

Mr. PERKINS. Without objection, it will be inserted in the record at this point.

(The report referred to is as follows:)

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

Hon. GRAHAM A. BARDEN,

Chairman, House Committee on Education and Labor,

House of Representatives.

April 13, 1956.

DEAR MR. CHAIRMAN: We would like to submit the following comments on H. R. 10227, a bill "To extend for 2 years the program of financial assistance in the construction of school facilities and for local educational agencies in areas affected by Federal activities under the provisions of Public Laws 815 and 874, 81st Congress, and to make certain other changes in such provisions."

This bill would extend for 2 years Public Law 815 as amended (i. e., until June 30, 1958) and Public Law 874 as amended (i. e., until June 30, 1959) by changing the necessary wording and dates in the acts to accomplish this purpose. The bill would also make a number of substantive amendments to the present acts.

This Department believes that it is desirable ultimately to recognize through appropriate legislation a continuing Federal responsibility for assistance in situations like those now provided for under the school assistance acts (Public Law $15 and Public Law 874), thereby avoiding the temporary extensions of the past and providing a solid basis for planning school budgets in federally affected school districts, as well as for federally operated schools. It is believed also that the size of these programs warrants a thorough-going review in the light of continuing Federal responsibility in the federally affected areas. The acts have been in operation for 6 years and it is felt that there has been sufficient experience gained in that length of time to assess these two acts and make appropriate recommendations.

Accordingly, the Commissioner of Education has appointed a group of consultants to review and evaluate these programs and to make such recommendations as would fairly and equitably discharge the Federal Government's responsibility in federally impacted areas. It is expected that the group's study and evaluation, already underway, will be completed in time for legislative recommendations to be submitted to the next session of Congress. Until that time the Department would recommend against enactment of permanent legislation, or individual piecemeal amendments along the lines of the subject bill and would favor instead a temporary 2-year extension of Public Law 815, as amended, in its present form. The Department would also recommend that Public Law 874 not be extended at this time and, in any event, not for more than 1 additional year (to June 30, 1958).

Notwithstanding these recommendations, we are presenting in the attachment our comments on the more important changes which the subject bill would propose to make in Public Law 815 and Public Law 874 for the use of the committee.

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee.

Sincerely yours,

HEROLD C. HUNT, Acting Secretary.

COMMENTS ON PARTICULAR PROVISIONS OF H. R. 10227

A. AMENDMENTS TO PUBLIC LAW 815, AS AMENDED

1. Counting children of uniformed personnel

Section 104 of the subject bill would broaden subsection 305 (a) (1) and (2) of Public Law 815, as amended, to include the children of parents on active duty in the "uniformed services," as defined in section 102 of the Career Compensation Act of 1949, in determining eligibility of school districts for construction aid for children residing on or residng with a parent employed on tax-exempt Federal property. This section would also provide for certain increases in the percentage of Federal participation in the cost of constructing minimum school facilities.

Section 202 of Public Law 815 as originally enacted counted as federally connected those children who lived on Federal property or who lived with a parent employed on Federal property located in the same State in which the children attended school. There was a substantial number of children attending school in some districts whose parents were employed on nontaxable Federal property

located across the State line in another State. These children could not be counted for benefits under the act. Similarly, a child of a member of the uniformed services living in public quarters on a military installation could be counted under section 202 (a) of Public Law 815 so long as the parent was stationed on the base. However, if the parent were ordered overseas, the child, although still residing on the base and still in school, was counted only under section 202 (b).

Public Law 246, approved August 8, 1953, amended the original act by including under section 305 (a) (1) those children residing on Federal property whose parents were employed on nontaxable Federal property located in another State but within reasonable commuting distance of the residence of the child. Public Law 246 also made a similar provision in section 305 (a) (2) for counting children of parents employed on Federal property in those few school districts where there was an obvious hardship because communities served as a place of residence (bedroom communities) for substantial numbers of workers on large Federal installations located across a State line.

Section 104 of H. R. 10227 is directed to the similar situation where a member of the uniformed services moves his family to a military base where he is stationed temporarily and lives in a taxable home off base in the school district. Once the parent is transferred overseas or to a distant base, the child may not, under the existing law, be counted for entitlement in the school district in which he attends school because the serviceman is no longer employed on Federal property within reasonable commuting distance. The subject bill would provide that any such schoolchild may be counted under Public Law 815 so long as he has a parent who is a member of the "uniformed services."

Comments: This amendment would clearly represent a step in the direction of making Federal payments available for the education of the children of all members of the uniformed services without regard to whether they or their families live on tax-exempt federally owned property in or near the school district, and thus would represent a sharp departure from the basic justification for Federal payments, i. e., the tax exemption on federally owned property. comments on the proposed increase in percentage of Federal participation which this section of the bill would provide, see page 7.)

(For

2. Elimination of responsibility for Presidential finding of critical defense area Section 104 of H. R. 10227 amends subsection (a) of section 305 of Public Law 815, as amended, by omitting the existing requirement in paragraph 3 of such subsection which requires a Presidential finding that the applicant school district is partly or wholly situated within a particular area. Subsection 305 (a) (3) of the current act provides for counting increases in school membership during the specified 2-year increase period of those children who come into the school district as a direct result of Federal activities carried on either directly or through a contractor. This section takes cognizance primarily of those situations where there has been an increase in the employment at private plants because of Federal contracts, as contrasted with the other two categories of federally connected children recognized under the act, namely, increases in school membership of children residing on Federal property or residing with a parent employed on Federal property, or both.

Public Law 246, approved August 8, 1953, amended the original act by providing that children in this third category (i. e., children living in taxable homes with parents employed in taxable industries having Federal contracts), could not be counted for eligibility under the act unless the school district was wholly or partly situated within an area with respect to which the President made a finding (A) that a new defense plant or installation had been or is to be provided therein, or an existing defense plant or installation therein has been or is to be reactivated or its operation substantially expanded; (B) that substantial immigration of defense workers or military personnel is required to carry out activities at such defense plant or installation; (C) after consultation with the Commissioner, that the minimum school facilities required for the free public education of the children of such defense workers or military personnel are not available.

The President delegated the responsibility for making this finding to the Secretary of the Department of Health, Education, and Welfare, with a provision that the findings and recommendations with respect to clause (A) above be made to the Secretary of Health, Education, and Welfare by the Director of the Office of Defense Mobilization and that the findings and recommendations with respect to clause (B) above be made by the Secretary of Labor.

Comments: In the case of this type of payments, the Federal responsibility does not rest on the immunity of federally owned property from State and local taxation because the child counted for payment-in-lieu purposes may have no connection with federally owned property either by residence or by the employment of his parents. If there is a Federal responsibility, it must be based on the grounds that through its contracting in the area the Federal Government has caused a sudden and substantial impact of children which the local community cannot immediately adjust itself to through its property tax system. However, in all these instances the local community will in a year or two be able to realize property taxes and other revenues on the homes and places of employment of the children counted. It is highly questionable whether there exists a Federal responsibility to aid in the construction of a permanent school building which will be useful from 30 to 40 years during most of which the community can realize tax revenues on the homes and places of employment involved.

Because of this difficulty of justifying any long-range payment in this kind of situation, the present law limits the payments to instances where the Federal payment would be clearly in support of the national defense effort; i. e., to communities in critical defense areas. The proposed amendment would remove this limitation, and thus remove this basis for justifying the Federal payment without supplying any new basis on which the Federal payment could be justified.

We believe that the whole problem as to the nature and extent of the Federal responsibility in these situations deserves careful exploration if the present justification based on the importance of the school building to the furtherance of the national defense effort appears no longer relevant or feasible.

3. Non-Federal increase reduction factor

Section 106 of the subject bill would amend subsection 305 (d) of the current act, which requires a non-Federal growth of 10 percent in the 2-year increase period before a district may count any federally connected children toward eligibility, and would substitute a non-Federal growth requirement of 6 percent.

Public Law 815, from its original passage to the present time has included language to assure that only increases in school enrollment due to Federal activities be counted for eligibility and entitlement purposes. This provision liimted school districts in counting federally connected children for school construction aid to those who represented an increased load in the school district because of Federal activity and were without available school facilities.

Under the original act there was no absorption requirement, but school districts could not count more federally connected children than the total increase in average daily attendance from 1939, which was the beginning of the period covered by Public Law 815. When the original act was amended by Public Law 246, it was specified that a school district must show a 10 percent growth in the membership of non-Federal children in any 2-year increase period before counting any federally connected children for eligibility purposes. This requirement was in the nature of a reduction factor and was placed in the act because it was believed that most other rapidly growing school districts in the Nation at that time could expect to receive a normal increase in school membership of about 5 percent a year or 10 percent for each 2-year period covered by each increase period specified in Public Law 815. It was felt that federally connected districts should absorb without Federal payment as much non-Federal growth in school membership as the normal membership increases experienced on a nationwide basis.

Comments: For the past 10 years the average annual increase in school membership, although varying slightly from year to year, has been approximately 4 percent, only slightly below the 5 percent increase factor which was incorporated in the amendment enacted by Public Law 246.

This requirement is but one of several elements in the formulas for determining eligibility for and the amount of payments under the act and should not be changed without careful reexamination of all the elements of the formulas. Consideration as to whether a change in the percentage increase factor is warranted and whether the one here proposed is fair and equitable is properly a matter that should be reviewed by the advisory committee.

4. Effect of sale of certain public housing

Section 107 of H. R. 10227 would amend section 305 of Public Law 815, as amended, by inserting at the end thereof the following new subsection: "(f)