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Senator PELL. I now call upon our first witness, Elliot L. Richardson.

STATEMENT OF HON. ELLIOT L. RICHARDSON, SECRETARY OF

HEALTH, EDUCATION, AND WELFARE, ACCOMPANIED BY STEPHEN KURZMAN, ASSISTANT SECRETARY FOR LEGISLATION; CHRISTOPHER CROSS, DEPUTY ASSISTANT SECRETARY FOR LEGISLATION (EDUCATION); AND PROFESSIONAL STAFF MEMBERS; AND STATEMENT OF HON. SIDNEY P. MARLAND, JR., U.S. COMMISSIONER OF EDUCATION

Secretary RICHARDSON. Thank you.

Commissioner Marland and myself and our aides are pleased to be here today to testify on this bill. I am accompanied by Commissioner Sidney P. Marland, Jr.; Mr. Stephen Kurzman, Assistant Secretary for Legislation, and Mr. Christopher Cross, Deputy Assistant Secretary for Legislation (Education).

I would like, with the permission of the committee, Mr. Chairman, to ask to have inserted at this point in the record preceding my prepared statement the introductory remarks of the late ranking RepubIican on the subcommittee, Senator Winston Prouty, on the introduction of S. 1669, including the President's message on the bill, the bill itself, and a section-by-section analysis of the bill with a fact sheet.

Senator PELL. And with a sense of great honor and respect to our colleague, too.

Secretary RICHARDSON. It is a feeling we fully share. We certainly greatly miss his participation in these deliberations.

Senator PELL. Without objection, it is so ordered. (The information referred to follows:)

[From the Congressional Record-Senate, Apr, 29, 1971)

INTRODUCTORY REMARKS OF HON. WINSTON L. PROUTY, A U.S. SENATOR FROM THE

STATE OF VERMONT

EDUCATION REVENUE SHARING ACT OF 1971

Mr. PROUTY. Mr. President, on behalf of myself and Senators BAKER of Tennessee, BENNETT of Utah, BROCK of Tennessee, BUCKLEY of New York, DOMINICK of Colorado, Fong of Hawaii, GRIFFIN of Michigan, PERCY of Illinois, SCHWEIKER of Pennsylvania, Scott of Pennsylvania, TAFT of Ohio, and Tower of Texas, I am introducing today, for the President, the President's proposed Education Revenue Sharing Act. I ask unanimous consent that a copy of the bill, a sectionby-section analysis of the bill, and a summary of the bill be printed in the RECORD at the conclusion of my remarks.

The PRESIDENT pro tempore. Without objection, it is so ordered.

Mr. PROUTY. As the ranking Republican on the Education Subcommittee of the Committee on Labor and Public Welfare, I am particularly concerned that the well-intentioned efforts of Congress in recent years have resulted in a maze of elementary and secondary education programs, which while noble in their intent are cumbersome in their implementation.

In his April 6 message on education revenue sharing, President Nixon depicted the problem by pointing out that "Under the present piecemeal system of Federal aid, education grants are available to local schools under 38 separate authorizations for 'instruction, 37 separate authorizations for low-income students, and 22 separate authorizations for reading instruction."

I am sure each Senator has on many occasions sought to guide his constituent school districts through this maze.

Some school districts have felt compelled to hire experts in grantsmanship, full-time Federal aid coordinators.

Is is clear that the burdens placed on State and local educational agencies, which wish to implement these various education programs, is often intolerable.

Guidelines, regulations, matching fund requirements ensnarl the educator in time-consuming trivia which is counterproductive to the educator's primary role-education.

For the small school districts in my State of Vermont inflexible guidelines and regulations often preclude Federal assistance, which Congress clearly intended to be available to all districts.

Clearly, remedial action is necessary to make Federal aid to education more responsive and less cumbersome.

If we review the history of our education programs, we see that, as each problem area was discerned and defined, we responded with a separate education program responsive to the particular problem. We in Congress moved rapidly in the 1960's to respond to a multitude of education problems. At the outset, categorical programs were necessary to precisely target Federal aid.

However, now that Federal support for elementary and secondary education is well established, it is time to move from categorization to consolidation in such a way that the goals of educational quality and opportunity are met.

Mr. President, this bill responds to the need for consolidation and streamlining of our Federal educational programs in a responsive way.

It is a good, but not perfect, bill and I must, in all candor, say that I find several problems in the measure as it is now drafted.

But I do recommend the bill to Senators as excellent in its basic concept and direction.

The Education Revenue Sharing Act would make funds available to States and local educational agencies in five areas of our longstanding concern—education of the disadvantaged, education of the handicapped, vocational education, education of federally connected children, and supporting materials and services. Funds would flow to States and localities on the basis of an automatic formula. The bill authorizes advanced funding so that local officials would know in advance the amount they could expect to receive and, thereby, plan ahead.

Funds derived from the presence in a school district of children whose parents live on Federal property and children from low-income families would be passed through by the State directly to the school district. Other Federal funds would be distributed among local educational agencies by the State administering agency, on the basis of their relative needs for assistance in the areas of education of the handicapped, vocational education, and supporting materials and services. The State administering agency would be given the flexibility to transfer up to 30 percent of the funds from any one category to any other category, with the exception of those funds passed through to local educational agencies. This could mean, for example, that additional funds could be made available for education of the handicapped if the State felt that this was of high priority.

The State's plan for distribution of Federal funds would be developed in consultation with a State advisory council appointed by the Governor, broadly representative of public and private educational interests and members of the public. In addition, the State's plan would be published and interested persons would be given an opportunity for comment. However, no Federal approval of the plan would be required. This is a major change from present law. It means that a State will be able to plan for its own needs, rather than trying to adapt to some preset Federal format.

As the President noted in his message: "Non-public schools bear a significant share of the cost and effort of providing education for our children today. Federal aid to education should take this fully into account."

Education revenue sharing expands the opportunities available to children in nonpublic schools by requiring that they be allowed to participate on an equitable basis in public school programs of education for the disadvantaged, education of the handicapped, vocational education, and supporting materials and services. The act provides that, in cases where State law prohibits such participation, the Secretary of Health, Education, and Welfare shall provide similar services to nonpublic schoolchildren and shall pay the costs out of the State's allotment.

Education revenue sharing would offer State and local education officials far greater flexibility in making program decisions responsive to the needs of their students. Funds could be allotted among areas of use and among local educational agencies according to their specific needs, rather than according to some rigid Federal mandate. As the President said:

“I believe we must recognize that the Federal Government cannot substitute its good intentions for the local understanding of local problems, for local energy in attacking these problems, and for local initiatives in improving the quality of education in America. We must also recognize that state and local authorities need Federal resources if they are to meet their obligations and if they are to use the peculiar advantages of state and local knowledge, responsibility and authority to their fullest potential. Education Revenue Sharing accommodates the federal role in national education to both these realities, and it lays the foundation for a new and more productive Federal-State relationship in this area of vital national concern ..."

I agree with the President's observation and I am hopeful Congress will respond by following a course of consolidation for existing educational programs as we embark on a new era of experimentation through the proposed National Institute of Education.

We have much to learn about how we teach and it is clear that the Federal Government must serve as a catalyst for educational innovation and experimentation. We must continue to develop categorical programs for new areas of concern and commitment.

As I look ahead at the course of Federal aid to education, I envision alternate eras of categorization and consolidation,

As we move ahead in categorical programs of educational innovation and experimenation, I foresee times when we shall need to consolidate educational concepts thus developed in revenue sharing programs.

The lessons once learned must be applied through flexible mechanisms which respond best to the needs of our elementary and secondary school pupils.

We have learned much in recent years and the lessons of bureaucratic ensnarlments in education programs should not be lost on Congress. We should know that it is a time to move toward consolidation of proven educational programs. Toward this end, I recommend the Education Revenue Sharing Act as a conceptually excellent proposal that is worthy of our careful study.

It is not a perfect bill as now drafted but we should promptly begin to explore its concepts and seek to perfect it.

I hope that Senators will look at the problems in this bill as challenges to be met not as insurmountable obstacles to further consideration.

With this hope, I commend to Senators the Education Revenue Sharing Act.

SECTION-BY-SECTION ANALYSIS: EDUCATION REVENUE SHARING ACT OF 1971

SECTION 2. FINDINGS AND PURPOSE

Subsection (a) of section 2 states that the Congress has found current Federal education assistance programs too narrow in scope to meet the Federal government's responsibility to help States meet the costs of education in areas of special national concern.

Subsection (b) of section 2 sets forth the purpose of the bill, which is to replace certain existing Federal education assistance programs with a system of revenue sharing, thereby encouraging innovation in education, providing help to educationally disadvantaged and handicapped children, strengthening vocational and career education, and assuring that children of parents living or working on Federal property receive educational opportunities equal to those given other children.

SECTION 3. AUTHORIZATION OF APPROPRIATIONS AND PLANNING PAYMENTS

Subsection (a) of section 3 authorizes necessary appropriations to fund the revenue sharing program, effective for the fiscal year ending June 30, 1973.

Subsection (b) of section 3 authorizes appropriations to enable the Secretary of HEW to make payments to States during the period January 1, 1972, to June 30, 1972, which will assist the States in planning for transition from the existing system of categorical educational grants to the revenue sharing system provided for in the Act.

SECTION 4. ALLOTMENT AND USE OF SHARED REVENUES

Section 4 prescribes the amounts of revenue to be shared with each State and how such revenue is to be used.

Subsection (a) of section 4 directs the Secretary of HEW to allot to each State, from funds appropriated under section 3(a), 60% of the average per pupil edu

cational expenditure in the U.S. multiplied by the average daily attendance of children in public elementary or secondary schools of such State who resided on Federal property. Such amount may be used for any educational purpose.

Subsection (b) of section 4 sets forth a formula for computing a State's pro rata share of the remaining sums appropriated under section 3(a). A State's formula is derived by adding together the products of three separate multiplications:

(1) 1.0 times the number of school-age children from low-income families in the State;

(2) .6 times the number of children in average daily attendance in the State's public schools who do not live on Federal property but who have a parent who works on Federal property or is on active duty in the uniformed services;

(3).1 times the number of school-age children in the State.

Subsection (C) of section 4 prescribes how the States may spend shares computed in accordance with subsection (b). That portion derived from the (b) (1) calculation may be used only for meeting the special educational needs of disadvantaged children who reside in areas with high concentrations of low-income families, or who are migratory children of migratory farm workers, or who are neglected or delinquent children being educated directly by the State. That portion derived from the (b) (2) calculation may be used for any educational purpose. That portion derived from the (b) (3) calculation may be used for three purposes : one-sixth for handicapped children, one-third for vocational activities, one-half for materials and services. Section 6, however, permits 30% (or more, under some circumstances) of (b) (3) money to be used for any purpose described in subsection (c) of section 4.

Subsection (d) of section 4 authorizes use of shared revenue for construction of education-oriented facilities.

Subsection (e) of section 4 permits the Secretary to reallot to other States, on a pro rata basis, funds declined by a State or funds not shared with a State by reason of the State's ineligibility to receive them. Such reallotment is at the discretion of the Secretary. Any amount so realloted shall be deemed part of a State's allotment derived from the same provision of subsection (b) which gave rise to the funds in question.

Subsection (f) of section 4 authorizes the Secretary to time the disbursement of allotted funds to the States as he sees fit, bearing in mind the desirability of minimizing delays in the use of disbursed money.

Subsection (9) of section 4 states that the Secretary shall determine average daily attendance, average per pupil expenditure, and numbers of children, using the latest data. Such determinations are final.

SECTION 5. DISTRIBUTION OF SHARED REVENUES WITHIN EACH STATE

Subsection (a) of section 5 directs that funds received by the States under section 4(a) be "passed through” to local educational authorities in accordance with the number of children in average daily attendance who resided on Federal property in the school district of such authority.

Subsection (b) of section 5 directs that funds received by the States under section 4(b) (1) be "passed through” to local educational authorities in accordance with the number of children in the district of such authority who are in low-income families. The State may, however, retain any part of such funds which are needed by the State to discharge its duty of directly educating neglected or delinquent children. Moreover, no funds are to be "passed through” to local authorities unless the amount involved is at least $10,000, and all schools in the district provide comparable educational services. If a given district is ineligible to receive funds under this subsection, the State may reallot such funds to other districts. If no district in a State is eligible to receive funds under this subsection, such funds may be reallotted, on a pro rata basis, to other States.

Subsection (c) of Section 5 provides that the remainder of a State's allotment may, in accordance with sections 4 and 6 and the plan developed pursuant to section 8(b), be used by the State agency designated under section 8(a), or given to local educational authorities in accordance with their needs. However, not more than 30% of funds derived from application of the calculation in section 4(b)(2), relating to children with a parent employed on Federal property or in the uniformed services, may be paid to a district not having any such children in average daily attendance. Moreover, when determining needs of local agencies to which funds are given under this subsection, funds paid

to such agencies under subsection (b) of section 5, relating to the educationally disadvantaged, are not to be taken into account.

SECTION 6. TRANSFERS AMONG PURPOSES

Section 6 allows States to use 30% of funds derived from the calculation of 4(b) (3) to be used for any of the purposes described in section 4(c). The 30% limitation may be exceeded upon a demonstration satisfactory to the Secretary that such action will more effectively achieve the purposes of the Act.

SECTION 7. PARTICIPATION OF NONPUBLIC SCHOOL CHILDREN

Subsection (a) of section y directs the State agency designated pursuant to section 8(a) to give children enrolled in nonprofit private schools an opportunity to participate in activities for which funds are made available under paragraph (1), or clause (A), (B), or (C) of paragraph (3), of section 4(c), and to provide that title to and control of funds received under the Act will remain in one or more public agencies.

Subsection (b) of section a provides that, if the Secretary determines that a State is unable to comply with subsection (a) of section 7 by reason of State law, he must himself arrange, by contract or otherwise, for private school children to participate as contemplated in subsection (a), and pay for such participation out of funds allotted to the State for such purposes.

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SECTION 8. STATE ADMINISTRATION

Section 8 provides for the designation of a State agency which will be the single agency administering the revenue sharing program established by the Act (unless the single agency requirement is waived pursuant to 42 U.S.C. 4214). The designated agency is required to develop annually in consultation with the advisory council appointed under section 9 a plan for the distribution of funds received by it under the Act. Interested persons are to be given time to comment on the plan before its adoption.

SECTION 6. STATE ADVISORY COUNCIL

Section 9 directs the chief executive officer of each State participating in the program under the Act to appoint an advisory council which shall be broadly representative of the State and the public. The section indicates certain areas of experience and competence which shall be represented on the council. The council is to assist the State agency designated pursuant to section 8(a) in the preparation of the plan, to advise it on general policy matters to evaluate activities assisted under the Act, to advise State or local officials on various matters pertaining to the program, and to prepare and submit to the Secretary, at least annually, a report of its activities, recommendations, and evaluations.

SECTION 10. TREATMENT OF FEDERALLY-CONNECTED CHILDREN

Section 10 provides that the State agency designated pursuant to section 8(a) will require that children attending school within the State who reside with a parent on Federal property, who reside with a parent employed on Federal property or who have a parent who is a member of the uniformed services, will receive a public elementary or secondary education on a basis comparable to that provided to other children in the State.

SECTION 11. SPECIAL PAYMENTS BY THE SECRETARY

Section 11 allows the Secretary to reverse up to 10% of the funds appropriated under section 3(a) to make payments to States to assist them in carrying out activities described in section 4 which are designed to further national policy objectives in the field of education.

SECTION 12. RECOVERY OF FUNDS

Subsection (a) of section 12 authorizes the Secretary, if he determines that a State has failed to comply with the provisions of the Act, to refer the matter to the Attorney General for appropriate civil action, or, after notice and opportunity for hearing, to notify the State that if corrective action is not taken within sixty days, revenues shared with it will be reduced in the same or suc

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