so much money, and we have to obligate the money on June 30 on the basis of the requests. We have an actual document on file against which we obligate the money. And we would obligate all of it. I think it might raise a question to use money obligated for these payments for other purposes.

Senator RANDOLPH. I think a memorandum on this would be helpful.

Mr. KEPPEL. Glad to enter one.

Senator RANDOLPH. Thank you, Mr. Commissioner. Thank you, Mr. Lillywhite.

Senator Prouty?

Senator PROUTY. Mr. Keppel, in your testimony you say

it should also be pointed out that while there are usually one or two

Mr. KEPPEL. I am sorry, sir. I was wrong and changed it to "a dozen or more.

Senator PROUTY (continuing):

a dozen or more major disasters occurring each year, the number which would require expenditure of Federal assistance is never large and consequently the cost of this program each year can be expected to be small.

Has any estimate been made as to what it would cost to take care of the situation in the Midwest flood areas and perhaps Seattle and Oregon?

Mr. KEPPEL. I believe that the chairman entered into the record earlier an estimate with regard to the Seattle situation of the order of magnitude of $7 million. With regard to the Midwest disaster area, Senator Prouty, I am afraid I have no estimate, and Mr. Lillywhite has not.

Mr. LILLYWHITE. It is still going on.

Mr. KEPPEL. Yes.

Senator PROUTY. Let me ask, also, has S. 289 been considered by the Bureau of the Budget? Have they expressed an opinion?

Mr. KEPPEL. Yes, sir; and the recommendation that I venture to make this morning with regard to a 2-year as against a 5-year or a permanent authority is something that we have explicitly discussed with the Bureau; yes, sir.

I understand, further, Senator Prouty

Senator RANDOLPH. The Bureau of the Budget report has been made a part of the record.

Mr. KEPPEL. I understand they were submitting a separate report. Senator PROUTY. The program as envisioned in S. 289, I think, is over a period of 5 years, is it not?

Mr. KEPPEL. I believe it is permanent legislation as the bill is now, as I read it, sir. I believe it was permanent authority. The proposed

Senator PROUTY. I believe you are right in that respect. I wondered what effect making this a 2-year program would have over that? We have expenditures which are authorized, and laws and regulations approved which would be available to a stricken community over a period of 5 years, is that correct, to one community?

Mr. KEPPEL. Í am not quite sure that I follow, sir. I am sorry. Senator PROUTY. Let me see if I can clarify.

Mr. LILLYWHITE. The payment is authorized for a 5-year period with the amount reduced each year. Under the Bureau of the Budget

letter the program is restricted to 2 years. The question is, what effect will that restriction have?

Mr. KEPPEL. I am sorry, sir. Perhaps Mr. Lillywhite could speak to that one, sir. I think the reason for suggesting the 2 years is because the executive branch is now engaged in a major study-to which I think my followers on the witness stand this morning can speak about the overall handling of the disaster situation in all aspects of the Government, and we recommend that this be taken into consideration once this full study is completed.

Senator PROUTY. So I can get this clear in my own mind

Mr. LILLYWHITF. I was going to add one other thing, Senator, if I may, please, sir. We said in the testimony that the Commissioner just gave that there are probably few disasters that are of such magnitude that you would need to pay money for operating expenses over the entire 5-year period. If we could get them started the first year and help them out the next year, that would seem to us to take care of most of the disasters that occur.

Senator PROUTY. Well, in other words, under the 2-year program the Commissioner would be authorized to spend 100 percent the first year and 75 percent the next.

Mr. KEPPEL. My understanding, sir, is that it would be 100 percent or perhaps 100 percent of what is estimated to be needed for both years. Senator PROUTY. For both years?

Now, Public Law 815 runs through June 30, 1966, and Public Law 874 runs through June 30, 1968.

The congressionally authorized study on impacted aid now being affected in Stanford is due June 30 of this year.

My question is in three parts. Is this disaster aid proposal in S. 289 which amends Public Law 815 and Public Law 874 included in the study now being conducted at Stanford?

Mr. LILLYWHITE. I am sorry. I did not hear all of the question. Did you ask if the disaster provisions are being included in the study? Was that your question, sir?

Senator PROUTY. Yes.

Mr. LILLYWHITE. I think that perhaps the specific question of disaster authority being added to these laws is not being studied by the group.

I would point out that there is the authority to make payments for certain categories of children in both Public Law 874 and Public Law 815 which is now permanent. The authority to make payments for other categories of children expires periodically and so there would be some part of each law in effect on a permanent basis.

Senator PROUTY. Since both Public Law 815 and Public Law 874 are scheduled to expire soon and they could be radically altered or discontinued, why base school disaster aid on these two laws? That could be handled through some other course other than tying it in with these two laws.

Mr. LILLYWHITE. As I said, the authority to make payments to school districts that educate children living on Federal property is permanent in each law, both Public Law 815 and Public Law 974. It is the authority to make payments for children whose parents are employed on a nontaxable Federal property that is temporary and expires periodically.

Of course, as you said, that could be altered by the Congress after the report is made.

There seems to have been rather general agreement that the burden imposed by children who both live on Federal property and the parents also work on Federal property constitutes a burden and it may not be that that would be changed at all.

Senator PROUTY. That is all the questions I had along that line.

Mr. KEPPEL. May I add to that, Senator Prouty, like Senator Morse we at least do not feel wedded to a particular way of accomplishing this.

Public Law 815 and Public Law 874 seem to provide a fairly natural vehicle, but I do not feel we are bound at all to the particular legislative methods.

AMOUNT OF AID LIMITATION

Senator PROUTY. Now, I would like to refer to section 16(a) (4) which is on page 3 of the bill, lines 14 to 17. This indicates that the disaster payment may not exceed cost of construction incident to the restoration or replacement of the school facilities destroyed or damaged as a result of the disaster.

My question to you is this: Is any money limit contemplated as to the cost of replacement compared to the original cost of the structure? In other words, suppose a rather rundown building had a value of, say, $500,000. Would this be replaced or could it be replaced with a building costing $1 million?

Mr. LILLY WHITE. Well, I do not know precisely what kind of ground rules would be set up in this case. If the building were destroyed to the point where it would need to be replaced, of course, we would take into account the insurance that is available and most school districts carry insurance on their buildings. Other funds that they have available from State and local sources would also be considered. I think what would need to be done is to rebuild the school capacity that was destroyed. It is the capacity needed to house the schoolchildren that were displaced by the disaster that is needed.

I would not be able to say what the costs would be but you have to put these kids back in school. This is what is needed.

Senator PROUTY. That certainly seems to be a logical conclusion. Senator RANDOLPH. I think at that point we might say that even to replace here would still be below the standard. Is that not true, as we envision it in Public Law 815 or the minimum capacity rather; is this correct?

Mr. LILLYWHITE. Minimum school facilities; that is correct. Senator RANDOLPH. That is right. Minimum, not below, but it would reach that point that you would call minimum.

Mr. LILLYWHITE. That is correct.

Senator RANDOLPH. Is that correct?

Mr. LILLYWHITE. I would certainly think so. It is part of the Public Law 815 concept, yes.

Senator PROUTY. Last Thursday I believe Senator Bayh and others. introduced S. 1861 which is known as the Disaster Relief Act of 1965. Why should this proposal S. 289 be considered separately here instead of as part of the disaster relief package?

Mr. KEPPEL. Senator Prouty, once again I believe our position would be very close to that of Senator Morse in the comments which

were introduced at the very opening of this hearing. The Senator spoke to that in the last paragraph at page 2 of his comments with regard to the interrelation between S. 289 and S. 1861, and the views the Senator expressed are those of the administration.

Senator PROUTY (presiding pro tempore). Perhaps this question has been asked and answered, but I will ask it again for sake of clarification. What does the Federal aid in a disaster-struck school receive as part of other programs?

Mr. KEPPEL. May I ask Mr. Lillywhite, sir?

Mr. LILLYWHITE. I am sorry, sir; would you repeat the question, sir?

Senator PROUTY. What present Federal aid to disaster-struck schools receive as part of the programs?

Mr. LILLYWHITE. They do not receive any under Public Laws 815 or 874 under the present eligibility requirements unless the disaster damage occurs to a federally aided school building under construction. Then there is specific authority, if a building under construction is destroyed by natural disaster or an act of God, we can provide enough additional money under section 8 of the act to rebuild it.

Now, of course, we can, if the district has not filed its application for operating expenses, we can help them get it in a hurry and make the payment immediately so they will have something to go on. We can rush up the payment. Other than that there is no authority. For the few buildings on Federal property, where we do have a few school buildings built on Federal property, of course, if they are destroyed we can go ahead and rebuild those, but you cannot give a grant to a school district to do it.

Senator PROUTY. Suppose there is a relatively small community with one major industry and this industry is destroyed by fire, for instance, and the community decides not to rebuild. What happens in a case like that?

Mr. LILLYWHITE. The school building is destroyed by fire?

Senator PROUTY. No. The main industry in the community which furnishes employment to most of the people in the community.

PRESIDENTIAL ACTION REQUIRED

Of

Mr. LILLYWHITE. Well, I am not sure what would happen. course, under this authority the Office of Education would not act unless and until the Governor of the State had requested or made representation to the President and requested that a disaster area be declared and the President had found it to be of sufficient severity to declare a disaster and the emergency assistance was needed. We would not operate until this occurred.

Mr. KEPPEL. May I comment a bit further, Senator Prouty? I take it that the thrust of your question is toward the situation in which, in effect, the natural local tax base is quite literally washed away or otherwise affected, and I take it this is the reason for the inclusion in S. 289 of operating funds to handle the situation for the year in which it takes place plus the second year. We are suggesting only 2 years for reasons I gave earlier. But I would have thought, sir, your question goes to the heart of the reason why some of the operating funds are included in S. 289.

Senator PROUTY. We are very happy to have had you with us, Commissioner Keppel, and to have listened to your statement with a great deal of interest. Thank you, Doctor.

Mr. KEPPEL. Thank you very much, Senator.

(Subsequently the following material was supplied for the record by the Department of Health, Education, and Welfare:)

STATEMENT REGARDING THE TERM "MINIMUM SCHOOL FACILITIES" AS USED IN PUBLIC LAW 815

Public Law 815 was enacted September 23, 1950, to provide Federal assistance for the construction of school facilities in areas in which Federal activities have been or are being conducted.

Section 210(10) of the original act (now sec. 15(9)) defined school facilities as follows:

"The term 'school facilities' includes classrooms and related facilities; and initial equipment, machinery, and utilities necessary or appropriate for school purposes. Such term does not include athletic stadiums, or structures or facilities intended primarily for athletic exhibitions, contests, or games or other events for which admission is to be charged to the general public. Except as used in sections 203 and 204, such term does not include interests in land and off-site improvements." Under the terms of this original act quoted above, eligible school districts could use the Federal grants to construct any type of school facility desired except those expressly prohibited by the second sentence of section 210(10).

In 1953 there were major changes made in some provisions of Public Law 815 by the passage of Public Law 246, 83d Congress. The changes made at this time included the concept of "minimum school facilities." The act, as amended by Public Law 246, provided that the Federal payment to an eligible school district in no event could exceed the cost of constructing "minimum" school facilities in the district. The following provision was added to section 210(11) (now sec. 15(10)):

"Whether or not school facilities are minimum school facilities shall be determined by he Commissioner, after consultation with the State and local educational agencies, in accordance with regulations prescribed by him."

The amended act did not define minimum school facilities but congressional intent with respect to the meaning of the term is to be found on page 9 of House Report 702, dated July 3, 1953, which explained the amendments to Public Law 815 made by Public Law 246. This report reads as follows:

"The term 'minimum' school facilities used in the bill (H. R. 6049, 83d Cong., 1st sess.) does not mean that the test to be applied will be one based on the use of inferior materials or on the provision of inadequate space for the basic school needs of the children. *** the term 'minimum' school facilities merely insures against Federal participation in expenditures beyond those needed to conduct an adequate school program and, hence, spreads Federal funds as far as possible to meet adequately the basic needs. Under this concept, the Federal payment to the school districts will be based on the cost of the type of facility which the average school district has in recent years been building out of its own funds."

The regulations issued by the Commissioner define "minimum" school facilities (par. 114.1(i)) as follows:

""Minimum school facilities' means those instructional and auxiliary rooms (and initial equipment) exclusive of single purpose auditoriums, single purpose gymnasiums, and any built-in spectator space necessary to operate a program of free public education for the school members of the applicant at normal capacity in accordance with the laws and customs of the State.'

Under the concept of minimum school facilities, Federal funds may be approved to construct school facilities of the size and type which school districts have been providing in recent years with their own funds.

Since the Federal law does not specifically define minimum school facilities, the Office follows the guidelines given in the committee report. Circumstances vary by States. Some States allocate substantial amounts of State funds to local school districts for construction of school facilities, and have definite standards in terms of area per pupil and the type of construction that must be followed. In these States, it is not too difficult to determine what common practice is.

Other States allocate little or no State funds for local school construction. Most of these States have recommended standards for school construction but they may or may not have the authority to enforce them. In these States school