The bill before us also provides a 5-percent incentive for the Labor Department to encourage these voluntary consortia so that we get a wider area involved in planning and operating manpower programs. At the same time, there is nothing in the law that mandates that any given prime sponsor must join with anyone else.

Mr. QUIE. Do I understand what you say, that the legislation would prevent, however, a State legislature from mandating that? Mr. KOLBERG. That is my judgment, but not being a lawyer, I would not want to say finally. It would seem to me the Federal law would be preeminent here.

Mr. HEWITT. The State presumably has control of how it draws its county boundaries and with some due process, city boundaries. They could take one city out of the metropolitan area if they chose to do that. If there were only one city the Federal law would only relate to one city.

Mr. QUIE. That is always a possibility but we know that is not going to happen. The individuals in the State government would not be there long if they would draw all the county and city boundaries in the State.

However, two areas of the country-Indianapolis and MinneapolisSt. Paul metropolitan area have moved forward the metropolitan government more than any other community, I think, in the United States.

I think of them as being denied an opportunity to bring some better coordination with this consortium unless everything was entered into on an amicable basis among all the eligible subdivisions in this area. Mr. KOLBERG. I think the word, "denied," is incorrect in this instance. If, in fact, the Minneapolis-St. Paul areas are joined together in a strong intergovernmental way, then certainly they may well decide that is the best way to run manpower programs as well as a number of other programs.

Mr. QUIE. There is nothing to prevent them. What your testimony says, it would deny the State legislature in imposing it on them. Mr. KOLBERG. I think it would, yes.

Mr. QUIE. Let me ask you, about vocational education. You have indicated that you are opposed to the 5 percent set-a-side for the State Board of Vocational Education. In answer to Mr. Steiger, you also opposed the set-aside for the prime sponsor in this categorical way of 5 percent, encouraging them to use the present vocational education. So instead-if I am stating your position correctly-you want to leave this up to a relationship between the prime sponsors and vocational education as it exists in the State. Would that be correct?

Mr. KOLBERG. Again, I do not see that this particular provision is necessary in the bill. We would prefer that it not be there. If, at the same time, the committee feels there needs to be some way of bringing the prime sponsors and the vocational educators closer together, then I think an incentive grant approach should worked out. That money would go directly to the prime sponsor only if they worked out relationships with the vocational educational entities in their communities. I think that kind of a program is consistent with the rest of the bill.

Mr. QUIE. What is your experience now with institutional programs and vocational education? Is there a tendency to establish them sepa

rately, because in MDTA, we prevent that from happening. You have to go through vocational education in MDTA, but in the Econoime Opportunity Act, we did not, as I recall. Is there any experience you could point to that would give us an indication of what would happen if all the strings were removed from MDTA and the institutional type training program?

Mr. KOLBERG. As I said earlier this morning, Mr. Quie, our recent experience with the planning cycle that was completed this year leads us to believe that local planning bodies fully understood the importance of institutional training and in fact, the plans we are operating under for 1974 increase the amount of money available for institutional training. Now, I should have made clear earlier-let me make clear now that we have accepted the plans as developed by local prime sponsors as the operational plans for this fiscal year. If they call for more institutional training, as they do, we are going along with that. To me, that indicates that the local people are well aware of the importance of vocational education, and the importance of the institutions that have been created to provide this type of training. Mr. QUIE. As they call for more institutional type training, have they always gone through vocational education or are there instances of where they develop their own institutional type training?

Mr. KOLBERG. I think the law is a bit flexible on that. I think, in the first instance, they must use established vocational education institutions, but there is authority under the current law for individual referral, as we will call it. So individuals may be referred to private training institutions, or essentially private training institutions, and that has been used extensively in some parts of the country. But, you are correct in stating that the law provides specifically that vocational educational facilities are to be used in the first instance. I think they have been.

Mr. QUIE. I am just concerned that we wouldn't be unleashing a dual operation here where vocational and technical schools or even private vocational schools existing in close proximity are not utilized, but rather, the prime sponsor builds his own. Again, going back to what I earlier talked about, in a number of places in the country there is more than one political subdivision of 100,000 or more within a labor market area. Now, there may be a good vocational program, or institutional program operating in a neighboring political subdivision, but because of the jealous situation that seems to grow so often between political subdivisions, they may then run a duplicative institutional program. What we were really trying to reach out for here was a way to prevent that from happening. We think that is a waste of money, duplicating programs.

Mr. KOLBERG. We share your concern, Mr. Quie. I think the committee has tried to get at that to some degree in section 103 (3) (A) and (B), where it talks about the utilization of the State employment service, State vocational education and vocational rehabilitation agencies, area skill centers, and other existing institutions already on the scene that ought to be utilized to the greatest degree possible in working out the manpower programs. I share your concern-but much broader than vocational education. I think it is crucial that the public employment service play an important part in what the prime sponsor does. Otherwise, I think, we are going to have com

peting, overlapping, and duplicating work done at the local level. We want to be careful about that. So, my concern does not just extend to vocational education. It is a much broader concern that I think we all ought to have-that in building this new system, the prime sponsor needs to utilize what is already there and has proved itself.

Mr. QUIE. I agree with you there. One other question, and then I will yield. You mentioned the problem of allowances, stipends for trainees, and you want to have more flexibility than exists in this legislation. Do you have any studies available of how manpower training programs are utilized, with or without stipends and with lower stipends as compared to mandated levels of a certain amount? Mr. KOLBERG. We have not done any experiments under MDTA, because as you know, the allowance levels are specified. We could point to OIC's as an example of where an entire national program of some 98 OIC's across the United States has been operating successfully without any provision for allowances.

Mr. QUIE. That is what I had in mind. I wondered if there was any study comparing those who were trained under an MDTA program where there was a stipend and, say, an OIC program where there was no stipend. OIC is the only one that comes to my mind. But the ones that I visited-and I visited Philadelphia first, it seems to me they made some tremendous gains without the stipends-the kind of pride in the individual staying with the job, with the training program and then the job afterward.

Mr. KOLBERG. I agree, that is why we suggested that the prime sponsor ought to be allowed to decide on his own when, in what way, and to what degree, allowances are paid.

Mr. QUIE. Thank you Mr. Secretary.

Mr. DANIELS. Mr. Secretary, you have indicated that you want some leadtime under title I, to consider the approval of the eligible applicants. As you know, and as I know, the State will take over those areas in its particular jurisdiction which are not covered by local prime sponsors. I was wondering if you propose to give a certain amount of leadtime to consider the applications of local prime sponsors so that they might not be foreclosed by reason of the fact that the State, some States will be very ambitious and file applications immediately, and might foreclose the consideration of possible eligible prime sponsors. Mr. KOLBERG. You are talking about sponsors of programs within the so-called balance of State areas, that the State would be responsible for?

Mr. DANIELS. Right.

Mr. KOLBERG. I suppose that a situation like that could develop.

Mr. DANIELS. I visualize that where a State is on the ball; it may come in immediately and file an application; that might foreclose consideration of eligible prime sponsors who have not yet filed. I would like you to give some thought to the proposition. Whatever your views, the committee would be interested. Otherwise, I think we might have to provide a leadtime, a period of time for local prime sponsors to come in with their applications.

Mr. KOLBERG. We will be glad to do that.

Mr. DANIELS. Mr. Gaydos says he has an observation.

Mr. GAYDOS. I was happy to hear you take the position you did in responding to Mr. Quie's suggestion, that difficulty may arise involving

political subdivisions. I am sure, you are familiar with Allegheny County, a portion of which I represent. It has 127 individual political subdivisions, including second class cities, school districts, townships and boroughs. No problems arose. It has worked. We have had no difficulty. There are all types of conjecture about what could occur; that the State government could do such and such, and change municipal boundaries for a particular reason. But I agree with you on all fours; if there was ever a complicated political subdivision that exists, one interdependent and yet dependent on each other, it is our county. It is a peculiar type of governmental unit. It is all banded together in such a congested area. But the programs to date have worked in our areas. I think I can speak with authenticity. I don't see a particular problem as far as that aspect is concerned.

I want to thank you for your forthright responses to the committee, and usually, without the aid of counsel. We don't have too many secretaries that can do that.

Mr. KOLBERG. Thank you, Mr. Gaydos.

Mr. DANIELS. Thank you, Mr. Secretary.

Our next witnesses are representatives of the National Governor's Conference, Mr. Martin Peterson, executive assistant to Governor Cecil D. Andrus, and Mr. William Bechtel, representing Governor Patrick J. Lucey of the State of Wisconsin.

STATEMENTS OF MARTIN PETERSON, EXECUTIVE ASSISTANT TO GOV. CECIL D. ANDRUS, VICE CHAIRMAN OF THE HUMAN RESOURCES COMMITTEE OF THE NGC, AND WILLIAM BECHTEL, REPRESENTING GOV. PATRICK J. LUCEY, GOVERNOR OF WISCONSIN

Mr. PETERSON. Thank you, Mr. Chairman, members of the subcommittee.

I am Martin Peterson, executive director of the Idaho State Human Resource Development Council and assistant to the Governor of Idaho, and I am here to testify on behalf of Gov. Cecil D. Andrus of Idaho, vice-chairman of the National Governors' Conference Human Resources Committee, who deeply regrets his inability to be here in person.

Mr. DANIELS. I notice you have a lengthy statement and so does Mr. Bechtel. Perhaps you might want to file the statement which will be incorporated in the record and summarize so that we will have an opportunity to question each of you. We also have four other witnesses who are scheduled to testify here today, and the Chair is desirous of listening to all witnesses today.

[The statements referred to follow:]

STATEMENT OF MARTIN L. PETERSON, EXECUTIVE DIRECTOR, IDAHO STATE HUMAN RESOURCES DEVELOPMENT COUNCIL

Mr. Chairman, members of the Subcommittee, I am Martin Peterson, Executive Director of the Idaho State Human Resource Development Council, and I am here to testify on behalf of Governor Cecil D. Andrus of Idaho, Vice Chairman of the National Governors' Conference Human Resources Committee, who deeply regrets his inability to be here in person.

Next to me is Mr. William Bechtel, Executive Director of the Wisconsin State Manpower Planning Council, who is here to testify on behalf of Governor Patrick

Lucey of Wisconsin, a member of the Executive Committee of the National Governors' Conference.

Together, we are here to testify on behalf of the National Governors' Conference. As you already know, Mr. Chairman, a large number of Governors would have joined us in person here this morning had it not been for inflexible commitments and your understandably short notice in scheduling this hearing. Echoing the many Governors who have already communicated their congratulations to you and to the other members of this Committee directly, we, too, Mr. Chairman, would like to compliment the Committee for its patient and hard work that has brought about a bipartisan comprehensive manpower bill. This indeed has been a large step toward the enactment of legislation which many, including Governors, have awaited for several years.

We acknowledge, Mr. Chairman, that the interest and concern of Governors in this area of public policy has perhaps not been fully expressed before this Committee in previous years. We are aware of the probability that you and other members of this Committee may be without a clear, up-to-date understanding of the extent to which Governors have elevated manpower activities within their states to a high level of priority; the degree to which they are making manpower a keystone component of state human resource, economic development strategies, planning mechanism and programs; and the very substantial attention they have given to the complex manpower public policy issues with which you have wrestled.

It is important that this Committee not proceed today, as you may have understandably proceeded in the past, on the assumption that Governors are not interested or involved in manpower. They are- and they intend to make their interest felt on a constructive basis.

While I am sure that you have already perceived some of the manpower activity in the nation's Statehouses-much of it stimulated by the initiatives and intents of this Committee's previous legislative proposals which, although failing enactment, were administratively pursued by the Department of Labor-we feel that our joint responsibility is to provide you with a current, general picture of the "Governor and manpower" and with specific gubernatorial reaction to H.R. 11010 and H.R. 11011.

Accordingly, Mr. Chairman, we have divided our testimony long these lines: I hope to provide you with a broad sketch of the vigorous role Governors are currently playing in manpower developments within and among States-and with the revitalization of manpower planning at the State level in the past two years and with a brief summary of Governors' efforts to make a positive contribution to the development of national manpower policy, especially in the difficult area of state-local government relations; and,

Mr. Bechtel will provide you with the constructive comments offered by the nation's Governors to strengthen H.R. 11010 and H.R. 11011.

We have made an effort to be brief, Mr. Chairman, for we realize the Committee has additional testimony to hear.

The best way to move into a discussion of the role Governors have now assumed in manpower activities is to point out that state government today bears little, if any, resemblance to state government of a decade ago. The Office of Governor now concerns itself with an enormously enlarged range of issues and problems, for state boundaries do not shut off the issues or problems of our changing national society.

And the new breed of Governors which has emerged in recent years is prepared and determined to meet the challenges of these new responsibilities. They have, in the great majority of our states, reorganized state government in order to improve their ability to administer and to establish and pursue priorities, substantially improved the capability to plan and deliver public services, and established area planning districts and commissions to assure participation of, and responsiveness to, local governments.

These trends have had a substantial impact on the current location of manpower in the spectrum of a Governor's concerns. Here are six tangible examples, Mr. Chairman:

It is not news that all Governors have full-time staff in manpower planning. But it is news that, particularly in the last three years, 40 Governors have elevated the organizational location of this planning capability in order to become more directly active in the planning and resource allocation decisions connected with manpower and manpower-related programs. Today, manpower planning staffs are directly located in the Governors' executive offices in 28 states, and have been integrated in new human resource departments or state planning