(4) sell or exchange at public or private sale, or lease, real or personal property, and sell or exchange any securities or obligations, upon such terms as he may fix;

(5) subject to the specific limitations in this title, consent to the modification, with respect to the rate of interest, time of payment of any installment of principal or interest, security, or any other term of any contract or agreement to which he is a party or which has been transferred to him pursuant to this section; and

(6) include in any contract or instrument made pursuant to this title such other covenants, conditions, or provisions (including provisions designed to assure against use of the facility, constructed with the aid of a loan under this title, for purposes described in section 401(a)(2)) as he may deem necessary to assure that the purposes of this title will be achieved.

TITLE IV-GENERAL PROVISIONS

DEFINITIONS

SEC. 401. As used in this Act

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(c) (1) The term "development cost", with respect to an academic facility, means the amount found by the Commissioner to be the cost, to the applicant for a grant or loan under this Act, of the construction involved and the cost of necessary acquisition of the land on which the facility is located and of necessary site improvements to permit its use for such facility, but excluding any cost incurred before, or under a contract entered into before, the enactment of this Act. There shall further be excluded from the development cost

[(1)] (A) in determining the amount of any grant under title I or II of this Act, an amount equal to the sum of [(A)] (i) any Federal grant which the institution has obtained, or is assured of obtaining, under any law other than this Act, with respect to the construction that is to be financed with the aid of a grant under title I or II of this Act, and [(B)] (ii) the amount of any non-Federal funds required to be expended as a condition of such other Federal grants; and

[(2)] (B) in determining the amount of any loan under title III of this Act, an amount equal to the amont of any Federal financial assistance which the institution has obtained, or is assured of obtaining, under any law other than this Act, with respect to the construction that is to be financed with the aid of a loan under title III of this Act.

(2) In determining the development cost with respect to an academic facility, the Commissioner may include expenditures for works of art for the facility of not to exceed 1 per centum of the total cost (including such expenditures) to the applicant of construction of, and land acquisition and site improvements for, such facility.

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66-396 0-66- +

HIGHER EDUCATION ACT OF 1965

TITLE III-STRENGTHENING DEVELOPING
INSTITUTIONS

STATEMENT OF PURPOSE AND APPROPRIATIONS AUTHORIZED

SEC. 301. (a) * **

(b)(1) There is authorized to be appropriated the sum of $55,000,000 for the fiscal year ending June 30, 1966, and the sum of $30,000,000 for the fiscal year ending June 30, 1967, to carry out the provisions of

this title.

OPENING STATEMENT OF CHAIRMAN

Senator MORSE. Mr. Commissioner, we welcome you and your colleagues: Dr. Samuel Halperin, the Deputy Assistant Secretary for Legislation of the Department of Health, Education, and Welfare; Dr. Peter Muirhead, Associate Commissioner of Education for Higher Education, and Dr. Albert Alford, Assistant Commissioner of Education for Legislation, to the witness table.

As you know, Mr. Commissioner, following your testimony here today, the subcommittee will hear from representatives of higher education and public interest groups on July 13 and 14. From this testimony questions may very well develop. I shall, therefore, as is my practice, once again enroll you and your colleagues in our seminar which is designed to develop the factual basis upon which the subcommittee decision should be based. I know I can count on you for such position papers bearing on the requests as may issue from either the majority or minority side. All such papers and related data will be incorporated in our hearings record at appropriate places.

If I may have the attention of counsel for a moment, I want to make very clear to counsel of the subcommittee that these hearings will be held only for 3 days to meet our requirements for public hearings, and I instruct counsel to see to it that the witnesses following the witnesses from whom we will hear this morning are limited in time-a restriction which will be strictly enforced-in the presentation of any oral statement, with the understanding that they may file whatever written supplemental statements they wish in support of their positions.

So far as this chairman is concerned, we have reached that point in the calendar in this session of Congress, when I must do everything I can to complete the hearing record on the higher education legislation within the 3 days that have been set aside for this purpose, so we can have ample time for an executive discussion of the record made here. We have already a large body of material on higher education problems before the subcommittee. I see no reason or justification for a longer hearing than the chairman has prescribed. The witnesses must be notified of this, and of the fact that they have permission to flle supplemental statements.

Furthermore, counsel should make clear to all witnesses appearing before the subcommittee, that when we come to the executive markup of the bill, we may call upon any witnesses who have submitted a supplemental statement to supply further information, if we feel their testimony in the record shows that such additional information is needed. As to the administration witnesses we shall expect that they will give us their cooperation as they have in the past, in making representatives of the Department available to us during the markup period, to answer questions that may be raised by the subcommittee in executive session.

I am now going to call on our first witness, Senator Church, for his statement. I am delighted to have the Senator from Idaho with us this morning. The record should show that he has never failed to give to this subcommittee his cooperation in helping us to present these educational bills to the Senate, reserving, as he should at all times, his duty to respectfully dissent from any recommendations that we make which do not agree with his views. He has been very helpful to the subcommittee, and I want the record to show that on behalf

of the subcommittee I thank him. We are delighted to have you testify this morning, Senator Church. You may proceed in your

own way.

STATEMENT OF SENATOR FRANK CHURCH, A U.S. SENATOR FROM THE STATE OF IDAHO

Senator CHURCH. Mr. Chairman, first of all I want to thank you for your courtesy permitting me to testify at this time. I am tempted to extemporize my statement, but as I have gone through the prepared statement, I notice that I have many figures and I think perhaps that I would be saving more of the subcommittee's time if I read it, and with your permission I will proceed on that basis.

Senator MORSE. You have it.

Senator CHURCH. When the first session of this Congress approved the Higher Education Act of 1965, it was with the intention of providing needed financial aid to accelerate and improve college education throughout the country. Title II of that act was designed to give incentive funds to further expand college library facilities that they might keep pace with expanding curriculum developments.

TITLE II: MAINTENANCE OF EFFORT; HIGHER EDUCATION ACT OF 1965

I feel certain that the relatively small base support figure approved under title II was intended to be of the greatest benefit to our smaller colleges and universities. But because of an unanticipated local fiscal situation, the careful language of one section of title II now serves to thwart the intent of Congress. That section, setting further "maintenance of effort" requirements, is depriving a worthy institution of the basic assistance grant.

UNFAIR PENALIZATION

While the situation specifically penalizes Idaho State University, I have been told that other schools were similarly affected but did not bring the matter to legislative attention.

In essence, because of the language of the "maintenance of effort" provisions in title II, Idaho State University will lose its eligibility for the basic assistance grants, not because it failed to do enough for its library facilities, but rather, because it did too much.

Section 202 provides a basic assistance grant not to exceed $5,000 but limits such grants to schools that will spend as much as the annual average amount they spent for library improvements in the 2 years prior to June 30, 1965, and also not less than the amount of the grant.

INTENT REASONABLE-LANGUAGE FAULTY

The intent of that language is quite evident and, I feel, quite reasonable. The institutions should be as much concerned in making the effort to improve their library facilities as is the Federal Government.

THE ONE-TIME EFFORT

Unfortunately, in the case of Idaho State University, the school and the State legislature were too much concerned.

In the 1961, 1962, and 1963 fiscal years, Idaho State University expended an average $42,000 annually on library inventories, using the funds allocated by Idaho's biennial legislature which had met in 1959 and 1961.

When the 37th session of the Idaho State Legislature convened in January of 1963, a new spirit of progress was evident. The problems of State aid to education had become acute and a determined legislature moved to meet financial shortcomings that had plagued Idaho's institutions for many years.

One of the results of that determination was a one-time funding to sharply upgrade Idaho State University library inventories. After an average annual expenditure of $42,000 for the 3 preceding fiscal years, ISU was authorized to nearly double that amount in fiscal 1964, spending $86,055 on its library.

Having made this drastic effort, the legislature and university had no intention of falling back upon the small sums spent prior to 1964. But Idaho is not a wealthy State and every educational dollar is precious. Accordingly, the legislature authorized $64,297 for fiscal 1965-an amount still $20,000 more than had been spent prior to the one-time upgrading effort. The 1966 fiscal budget authorized $68,547 or $24,000 more than the previous average. Quite obviously, Idaho State University is making an outstanding "maintenance of effort” within the context of section 202 of title II.

But the practical effort of the surge expenditure in fiscal 1964 was to have established an average annual expenditure during the 2-year base period required by section 202 of $75,076. Then, in 1965, although still budgeting 50 percent more than in the 3 years prior to the base period, the ISU budget allowance went to $64,055 or $10,000 less than in the prescribed base period-and thus, not meeting the requirement of an annual "maintenance of effort" equal to the $5,000 of the basic assistance grant.

Clearly, Mr. Chairman, the school had proven its intention of library improvement far beyond any implied requirement of the legislation. But because of one atypical budget year which fell in the period prescribed in section 202, Idaho State University not only could not qualify in 1966 for the basic assistance grant, but would continue to be disqualified in future years unless they received and spent continuously high amounts far in excess of the ability of the State and the university.

INTENT OF CONGRESS

I do not think, Mr. Chairman, that it was ever the intent of Congress to deprive or penalize a small school for making an unexpected and outstanding improvement of its library facilities. Certainly, at the time that the Idaho State Legislature appropriated the "one-shot" boost to the ISU library in February of 1963, there was no knowledge that a year later Congress would create title II of the Higher Education Act. Nor do I think, Mr. Chairman, that the dedicated people who drafted title II realized that such a situation would occur.

AMENDMENT TEXT

It is to solve the dilemma that ISU and other schools in similar situations have found themselves because of section 202 but without