used in the everyday instruction of the students. Ordinarily, when these disasters occur, school district budgets have already been established for the year, and seldom are emergency funds available that can be used to put these facilities back into operation without extensive delays. The Office of Emergency Planning now has authority not only to coordinate efforts of the various Federal agencies to repair damage caused by natural disasters but also to use emergency funds to assist local educational agencies in repair and cleanup operations and to provide temporary school facilities where the permanent facilities are destroyed. The Office of Emergency Planning first determines what can be done under the existing authority of the various Federal agencies to assist in the repair of damage to public facilities. The Bureau of Public Roads, for example, has emergency authority to repair public roads that are damaged by floods and earthquakes. The Office of Education does not have any authority of its own to go in and provide emergency disaster help to schools. As the subcommittee well knows, under the authority of Public Laws 815 and 874 the Office of Education administers a program of Federal assistance for current operating expenses and for construction of school facilities in federally impacted areas. In carrying out the functions of these two acts our Office has a staff of 66 people in 9 field offices who visit the federally impacted areas school districts and work with local educational agencies in determining the capacity of their existing school facilities, the need for additional facilities, and the number of federally connected children in their districts each year. In performing these functions members of our staff work in cooperation with State departments of education. The pattern of administration of the disaster program as proposed in S. 289 would closely follow the pattern already in effect for the "impacted areas" program. Thus, this legislation would not add materially to the administrative costs, and staff members already in the Department's regional offices could be on the scene in the disaster areas with a minimum of delay. Field representatives of the Office of Education now working in the impacted areas program frequently become directly involved in the disaster assistance program upon request of the Office of Emergency Planning. On these occasions they may go to a disaster area, review the damage to public school facilities, give estimates of the cost of temporary or permanent repairs, and make recommendations regarding the type and kinds of teaching supplies and materials that are necessary to resume the educational program as quickly as possible. In fact, field representatives from this program are now giving this type of assistance to other Federal agencies in areas that have suffered major disasters during the current school year. The provisions of S. 289 contain safeguards to make sure that the State and local communities affected by disasters will bear their full share of the burden, while at the same time assuring that the education of children in the areas struck by disasters will not suffer because of unexpected and severe strains on local government finances. Assistance may not be granted to any area unless the Governor of the State has requested the President to declare the area a disaster area, and the President has made a finding that the area should be declared a major disaster area and that emergency assistance should be provided. The bill contains the further requirement that the educational program be at the same level as was provided in the school district in the year prior to the disaster. In addition, the amount of Federal assistance granted would be the difference between all funds reasonably available to the school district from local and State funds, proceeds from insurance, and other resources, and the cost of repairing and replacing existing school facilities and conducting a normal education program. Gentlemen, a moment ago, I pointed out that S. 289 would authorize temporary assistance to get the educational program back in operation, up to a maximum of 5 years, and that the amounts granted for the last 3 years of the 5-year period could be 75, 50, and 25 percent, respectively, of the amounts granted to local educational agencies the first year in which the disaster occurred. It is our opinion that this authority to grant funds over the whole 5-year period would be needed only in rare instances, where the disaster is of such magnitude and severity that it seriously affects the ability of the local educational agency to provide adequate operating revenues for a period of years. Generally, emergency assistance to get the schools in operation, and perhaps for 1 additional year, should be sufficient to meet most of the major problems. S. 289 authorizes the appropriation of such sums as may be necessary for the disaster program authorized by the provisions of the legislation. It is not possible to estimate with any degree of accuracy the amount that would be needed in any year or for any specific disaster because it is obviously unpredictable where disasters will occur, how many school facilities will be affected, the extent of the damage to these facilities or the resulting cost. Since the bill authorizes the use of funds appropriated for the other provisions of Public Laws 815 and 874 for the purpose of immediately repairing damage, the subsequent request for supplemental appropriations would be based on reasonably complete information of the amounts required for any specific disaster. It should also be pointed out that while there are usually 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. It has been Federal policy for the past 15 years since the enactment of the Federal Disaster Relief Act in 1950-to provide emergency assistance in case of severe disasters; and it is apparent that in a number of cases there would have been serious interruptions in local school operations if this emergency assistance had not been available. I have previously pointed to the involvement of our field staff in assisting local schools both to construct and operate schools in "impacted areas." However, schools are not the only community facilities ravaged by natural disasters; hospitals, water and sewage facilities, and roads can be the casualties of flood and earthquakes and storm. The executive branch is now reviewing the Federal Disaster Relief Act of 1950 and the outcome of such a study may well be an improved overall approach to the problems created for communities in disaster areas. Accordingly, the Department of Health, Education, and Welfare recommends that the authority contained in this legislation be limited to a period of 2 years. Pending the outcome of the comprehensive review, we feel that it would be appropriate for the Office of Education to have direct standby authority to provide assistance for educational facilities and programs in major disaster areas and we feel that the "impacted areas" program under Public Laws 815 and 874 is an appropriate vehicle for this assistance. I commend the subcommittee again for its continuing strong leadership in the strengthening of American education at all levels and assure you of the administration's wish to assist the subcommittee in every way in this mutual responsibility. PREPARED STatement of FRANKLIN B. Dryden, DepUTY DIRECTOR, OFFICE OF EMERGENCY PLANNING Mr. Chairman and members of the subcommittee, it is a pleasure to appear before you this morning to testify in relation to S. 289, a bill to amend Public Laws 815 and 874, 81st Congress, to provide financial assistance in the construction and operation of public elementary and secondary schools in areas affected by a major disaster. Section 1 of S. 289 provides that, in areas affected by a major disaster as declared by the President under Public Law 81-875, the Commissioner of Education may make funds available for the reconstruction of public elementary and secondary schools provided that certain criteria are met. One of the criteria in question is the availability of other Federal funds to reconstruct schools damaged in such major disasters. Public Law 81-875, which the Office of Emergency Planning administers for the President, provides Federal funds to make emergency repairs and replacement of essential public facilities in areas affected by disasters which the President has declared to be "major disasters." Schools are considered to be essential public facilities within the meaning of the act and, therefore, in all such cases Federal funds for the repair or replacement of damaged or destroyed schools are made available on a grant basis. Under our regulations, the school facilities are made safe and usable. Public Law 81-875, the Federal Disaster Act, is of course an emergency program and the regulations to implement that act provide for expeditious repair and replacement. In order to facilitate these objectives the regulations provide for an advance of funds to a project applicant as soon as the project has been approved by the Office of Emergency Planning. Our regulations provide for advances up to 75 percent. I know of no instances, Mr. Chairman, where this program has been unable to meet the community needs for damaged or destroyed schools. With regard to the amendment to Public Law 874 dealing with the maintenance and operation of schools in areas affected by major disasters, we would defer generally to the Department of Health, Education, and Welfare since the programs for which we are responsible do not cover the kind of assistance that would be provided by new section 10(a). However, I would like to point out that the type of assistance offered by the proposed new section 10(b) is now generally accomplished under Public Law 81-875. Therefore, my previous remarks with respect to section 1 of S. 289 apply also to the proposed new section 10(b). These remarks are submitted for the subcommittee's consideration. If the subcommittee intends to have S. 289 go beyond the kind of assistance presently available under Public Law 81-875, the Office of Emergency Planning would have no objection to its enactment. Hon. WAYNE MORSE, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Chairman, Subcommittee on Education, U. S. SENATE, July 29, 1965. DEAR WAYNE: I am writing to call your attention to a very critical situation involving Public Law 874 entitlements of the Box Elder County School District, and to request subcommittee attention to it when you consider legislation in which it would be appropriate. I understand that the subcommittee has completed consideration of S. 289, which amends Public Laws 815 and 874, and will consider it soon in the full committee. I would hope that an amendment to relieve the Box Elder County situation could be incorporated in that bill. Briefly, what has happened is this. The school district has been asked to pay back some $228,819.29 of Public Law 874 funds allocated to it by the U.S. Office of Education, and spent in good faith. As a result of a State law declared valid by the courts, the district received privilege taxes paid by the Thiokol Chemical Corp., covering the same period. But it is impossible for the district to pay back Public Law 874 funds and still carry its present educational load. To understand the situation fully, it is necessary to repeat some history. From the inception of Public Law 874, the Box Elder School District has been eligible for assistance, primarily through pupils whose parents are employed at Hill Air Force Base and Utah Defense Depot in nearby Ogden, or because of the Intermountain Indian School which is located in Brigham City. During the 1959-60 school year, the Wasatch division of the Thiokol Chemical Corp., which had received a number of Air Force missile production contracts, was declared federally connected to the extent that the school district could count pupils whose parents were employed at Thiokol on a commingled basis. The commingle percentage rose to almost 17 percent by 1963. The school district had a difficult time providing for its rapidly expanding school population, but by using temporary buildings, building new ones, going into double sessions in some schools, and hiring extra teachers, they were able to meet the demands put on them by the extra pupils. In 1964, however, work rapidly declined at Thiokol. As people moved away from Brigham City, the school district found itself with too many employees, with empty classrooms not paid for, and with other numerous problems. Moreover, the city of Brigham had bonded for water and sewer improvement so local taxes were up. It was during this difficult readjustment period that the district received the shattering news from the U.S. Office of Education that over a period of several years there had been a Public Law 874 overpayment amounting to $228,819.29 from Thiokol privilege taxes, and that this sum would have to be repaid. It would work a great hardship on the Box Elder County School District to pay back over $200,000 which has already been spent. Even if the money is returned on an installment basis by withholding current entitlements, as proposed by the Office of Education, it will cause serious problems. For one thing, the effect of an installment payback will cost the district some $80,000 because of State-sharing arrangements. But of even greater concern is what it will do to the ability of the district to handle its expenses in the coming years. For example, for the school year 1965-66, the Office of Education proposes to cut the Box Elder County payment from $200,000 to only $64,000. This would mean that the district would not have enough money to pay its 400 teachers and other professional employees the salaries authorized by the 1965 session of the Utah State Legislature. As soon as the teachers became cognizant of this situation they voted to postpone signing contract agreements until the middle of August. So, at the present, the district has no teacher contracts for next year. Other equally unsolvable problems loom on the horizon if some solution cannot be found. Obviously a school district cannot take such a large cut in its resources without many repercussions. Box Elder County school officials say that adjustment would not be as difficult if the school were losing a proportionate number of federally connected pupils. But because of the 10-percent comingle percentage factor, only about 1 out of 10 of their pupils have had parents working at Thiokol Chemical Corp. The bulk of their entitlements comes from other installations whose employment is fairly stable. Therefore, federally connected pupils have not decreased in proportion to the decrease in Public Law 874 funds. I understand that similar circumstances have arisen in other school districts throughout the country, and it seems to me that legislative action should be taken to clear them up. In my opinion, therefore, Public Law 874 should be amended to remove any provision which could require repayment of funds already paid to a school district because it later received privilege taxes paid by a private corporation. I am attaching a possible amendment to S. 289 for subcommittee consideration. I will appreciate anything you can do on this. Sincerely, AMENDMENT TO S. 289 FRANK E. Moss. Viz: At the proper place in the bill insert the following subsection: () (1) Section 3(e) of the Act of September 30, 1950, as amended (20 U.S.C. 238(e)), is amended to read as follows: "DEDUCTION OF CERTAIN FEDERAL CONTRIBUTIONS "(e) In determining the total amount which a local educational agency is entitled to receive under this section (other than subsection (c) (4) of this section) for a fiscal year, the Commissioner shall deduct such amount as he determines to be the value of transportation and of custodial and other maintenance services furnished such agency by the Federal Government during such year.' (2) The amendment made by this subsection shall be effective as of December 31, 1961. COMMENTS RECEIVED RELATIVE TO PROBLEM RAISED BY SENATOR MOSS DEDUCTION FROM GROSS ENTITLEMENTS UNDER PUBLIC LAW 874 OF FEDERAL PAYMENTS AND TAXES PAID WITH RESPECT TO FEDERAL PROPERTY Public Law 874 requires that the Commissioner shall deduct from the gross entitlement computed for a school district for any year the taxes and "other Federal payments" received by that school district on account of Federal property and actually available for current operating expenses of schools. This provision generally is considered to be just an equitable, however, it has a number of ramifications some of which are inequitable and all of which are extremely difficult to administer. If a school district receives "other Federal payments" on account of Federal property the deduction from gross entitlements is limited to the amount of entitlement computed for the school district with respect to the Federal property from which the shared-revenue payments were received. If a school district receives taxes from improvements or leaseholds interest on Federal property all such taxes must be deducted from gross entitlements regardless of the amount of entitlement computed for that district with respect to the Federal property which gave rise to the taxes. In other words, taxpayments and shared-revenue payments, both made with repsect to Fdeeral property, are treated differently in making the deduction. This requirement is found in subsection 3(e) of Public Law 874 which is as follows: "In determining the total amount which a local educational agency is entitled to receive under this section (other than subsection (c) (4) thereof) for a fiscal year, the Commissioner shall deduct (1) such amount as he determines such agency derived from other Federal payments (as defined in section 2(b)(1)) and actually had available in such year for current expenditures (but only to the extent such payments are not deducted under the last sentence of section 2(a); and, in the case of Federal payments representing an allotment to the local educational agency from United States Forestry Reserve funds, Taylor Grazing Act funds, United States Mineral Lease Royalty funds, Migratory Bird Conservation Act funds, or similar funds, only to the extent that children who reside on or with a parent employed on the property with respect to which such funds are paid are included in determining the amount to which such agency is entitled under this section), and (2) such amount as he determines to be the value of transportation and of custodial and other maintenance services furnished such agency by the Federal Government during such year.” The task of determining the amount of taxes or shared revenue paid with respect to Federal property actually available for current operating expenses of schools is extremely difficult and complicated, is time consuming, and is expensive. Taxes are paid on improvements constructed on Federal property such as national forests, etc. Taxes are levied on oil produced from land underlying Federal property. Sometimes taxes are levied on these Federal properties by local school districts and counties and are then allocated to local school districts on some equalization basis. Some of these districts are and some are not applicants under Public Law 874. Some of the shared-revenue payments and taxpayments received by school districts are as little as $10 a year or as much as several hundred thousand dollars a year. There appears to be no justification for deducting on one basis for sharedrevenue payments and on an entirely different basis for taxpayments. The basis on which shared-revenue payments are deducted appears to be fair, reasonable, and consistent with the purpose and intent of Public Law 874. Hon. WAYNE MORSE, Chairman, Subcommittee on Education, U.S. Senate, Washington, D.C. AGUDATH ISRAEL OF AMERICA, DEAR SENATOR MORSE: Our organization, which has been concerned with educational problems for over four decades, wants to enter into the record specific observations regarding S. 289, which you are sponsoring, and which amends Public Law 815 and 874. We appreciate the concern that S. 289 expresses for the educational continuity of schoolchildren when natural disaster strikes their schools. However, we are deeply convinced that the assistance of the Federal Government to disaster areas for educational purposes should include all schools, public and religiously oriented. The consensus of the American public, as expressed in the recently enacted elementary and secondary education aid law, indicates a new awareness that the needs of children attending religiously oriented schools cannot be ignored. In this same spirit, any legislation which tackles the problems of schoolchildren whose schools have been rendered unusable by disaster, should benefit equally all the schoolchildren, without discrimination as to the type of school involved. The types of benefits that could be immediately rendered to the religiously oriented schools struck by disaster are already outlined in the above-mentioned Morse-Perkins Act. Furthermore, since these situations are of an emergency nature beyond the control of any human being, the benefits under such circumstances could be extended to the reconstruction or repair of the private school buildings, in the full spirit of the Government's desire to help disaster-stricken areas quickly resume normal life. We are relating to unusual circumstances which cannot be measured in usual terms. At such times of stress, our primary concern must be to enable all schoolchildren to return to their studies with the greatest possible haste, for the weal of our entire Nation. With all good wishes to you and your colleagues, Sincerely, Rabbi MORRIS SHERER, |