(c) Section 15(16) is amended by striking out "two" and inserting "four" in lieu thereof.

(d) Section 5(f) of such Act is amended to read as follows:

"(f) In determining under this section the total of the payments which may be made to a local educational agency on the basis of any application, to total number of children counted for purposes of paragraph (1), (2), or (3), as the case may be, of subsection (a) may not exceed

"(1) the number of children whose membership at the close of the increase period for the application is compared with membership in the base period for purposes of that paragraph, minus

"(2) the number of such children whose membership at the close of the increase period was compared with membership in the base year for purposes of such paragraph under the last previous application, if any, of the agency on the basis of which any payment has been or may be made to that agency."

REDUCTION IN THE NON-FEDERAL GROWTH REQUIREMENT

SEC. 222. Section 5(d) of such Act is amended by striking out "107 per centum" and by inserting in lieu thereof "106 per centum".

EXTENDING THE TIME FOR DETERMINING THE NUMBER OF UNHOUSED CHILDREN BY AUTHORIZING THE COMMISSIONER TO MAKE THE ESTIMATE FOR A PERIOD EXTENDING ONE YEAR BEYOND THE INCREASE PERIOD

SEC. 223. Section 4 of such Act is amended by inserting "the year following" immediately before the phrase "the increase period".

EXCLUSION OF PROPERTY WHICH IS SUBJECT TO LOCAL TAXATION

SEC. 224. Section 15(1) of such Act, relating to the definition of "Federal property", is amended by striking out the following sentence: "Such term includes real property which is owned by the United States and leased therefrom and the improvements thereon, even though the lessee's interest, or any improvement on such property, is subject to taxation by a State or a political subdivision of a State or by the District of Columbia."

MAKING THE PROVISIONS RELATING TO INDIANS LIVING ON RESERVATIONS PERMANENT

SEC. 225. (a) The first sentence of section 14(b) of such Act is amended by striking out "ending prior to July 1, 1966," and ", not to exceed $60,000,000 in the aggregate,'

(b) The third sentence of section 14(b) is amended by striking out except that after June 30, 1966, no agreement may be made to extend assistance under this section".

PROVIDING THAT CHILDREN RESIDING ON FEDERAL PROPERTY WHO HAVE A PARENT IN THE UNIFORMED SERVICES WILL BE CONSIDERED AS FEDERALLY CONNECTED

SEC. 226. Section 5(a) (1) of such Act is amended by inserting "(A)" immediately before the phrase "with a parent employed on Federal property" and by inserting immediately before the comma preceding the phrase "multiplied by 95 per centum" the following: ", or (B) who had a parent who was on active duty in the uniformed services (as defined in section 102 of the Career Compensation Act of 1949)".

PROVIDING FOR TRANSFER OF TITLE TO FACILITIES TO THE LOCAL EDUCATIONAL AGENCY WHERE IT IS IN THE FEDERAL INTEREST TO DO SO

SEC. 227. Section 10 of such Act is amended by inserting "(a)" immediately before the first word thereof, and by adding the following new subsection: "(b) When the Commissioner determines it is in the interest of the Federal Government to do so, he may transfer to the appropriate local educational agency all the right, title, and interest of the United States in and to any facilities provided under this section (or sections 204 or 310 of this Act as in effect January 1, 1958). Any such transfer shall be without charge, but may be made on such other terms and conditions, and at such time as the Conmissioner deems appropriate to carry out the purposes of this Act."

62-706-66-pt. 1—2

REPEAL OF EXCLUSION OF PROPERTY USED FOR PROVISION OF LOCAL BENEFITS

SEC. 228. The last sentence of section 15(1) of such Act is amended by

(1) striking out "(A) any real property used by the United States primarily for the provision of services or benefits to the local area in which such property is situated,"; and

(2) redesignating clauses (B), (C), and (D) as clauses (A), (B), and (C), respectively.

ELIMINATING ELIGIBILITY OF FEDERALLY CONNECTED CHILDREN IN THIRTEENTH AND FOURTEENTH GRADES

SEC. 229. Section 15(4) of such Act, relating to the definition of "free public education," is amended by inserting ', except that such term does not include any education provided beyond grade 12" immediately before the period at the end of the sentence.

INCLUDING AMERICAN SAMOA IN DEFINITION OF "STATE"

SEC. 230. Section 15(13) of such Act, relating to the definition of "State," is amended by inserting "American Samoa," immediately before "the Virgin Islands".

PART C-EFFECTIVE DATE

SEC. 241. The amendments made by this title shall be effective for fiscal years beginning after June 30, 1966, except that if the amendment made by section 213 would have reduced the payments under such Act to a local educational agency for the fiscal year ending June 30, 1966 (if it had been in effect for that year), the amendment shall not apply to that local educational agency for fiscal years ending prior to July 1, 1968.

SUMMARY OF "ELEMENTARY AND SECONDARY EDUCATION AMENDMENTS OF 1966"

TITLE I-AMENDMENTS TO THE ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965

PART A-FINANCIAL ASSISTANCE TO EDUCATIONAL AGENCIES FOR THE EDUCATION OF CHILDREN OF LOW-INCOME FAMILIES (TITLE I OF PUBLIC LAW 89-10)

Section 101. States that the program will last until June 30, 1970 (rather than June 30, 1968).

Section 102. Increases the amount which may be set aside for the outlying areas from 2 to 3 percent of appropriations, and authorizes payments out of this amount to the Department of the Interior to meet the special educational needs of educationally deprived Indian children in Bureau of Indian Affairs schools.

Section 103. Authorizes grants to States to assist them in carrying out, either directly or through local educational agencies, approved programs for the education of migratory children of migratory agricultural workers. Under limited circumstances, grants for this purpose could also be made to other public and nonprofit private agencies.

Section 104. Subsection (a) changes the eligibility requirement by permitting children from families receiving more than the low-income factor in AFDC payments to be counted for this purpose, and by reducing the eligibility requirement for local educational agencies and counties to a total of 10 low-income and AFDC children. Subsection (b) amends the definition of average per pupil expenditure in a State to make it clear that all expenditures (and not simply local expenditures) in the State for free public elementary and secondary education should be included in the computation.

Section 105. Retains the existing formula for fiscal year 1967, but raises the low-income factor used in the formula to $3,000 for fiscal years 1968-70.

Section 106. Requires use of the most recent satisfactory AFDC data (rather than that for the period used for the count of children from low-income families) for fiscal years_1968-70.

Section 107. Repeals provision for special incentive grants.

Section 108. Provides that the first $85 per month a person earns as an employee of any program assisted under this title will not be considered in determining need under the program of aid to families with dependent children.

Section 109. Strengthens the existing requirement that programs be of adequate size, scope, and quality by adding a requirement that a program must involve an expenditure of not less than $5,000.

Section 110. Changes the measure for payments for State administrative expenses from 1 percent of actual payments to local educational agencies to 1 percent of the maximum amounts (after any ratable reduction under section 208) for which they are eligible.

Section 111. For measuring maintenance of effort for any fiscal year, establishes as a base year the preceding fiscal year rather than fiscal year 1964.

Section 112. Makes permanent the provision requiring ratable reductions in maximum grants if appropriations are not sufficient to pay all school districts in full. In addition, it adds a provision authorizing the Commissioner to establish cutoff dates for the approval of applications so that unreserved funds can be made available to other school districts to offset ratable reductions. The unreserved funds of a school district would be made available first to school districts in the same State and then to those outside the State.

Section 113. Broadens the definition of "local educational agency" so as to make it conform (except for the addition of the present provision for Statesupported schools for handicapped children) to the definition used for other titles of Public Law 89-10, and clarifies the definition of "current expenditures".

PART B-SCHOOL LIBRARY RESOURCES, TEXTBOOKS, AND OTHER INSTRUCTIONAL

MATERIALS

Section 121. Adds an authorization for title II of Public Law 89-10 of $105 million for fiscal year 1967, and of such sums as may be necessary for fiscal years 1968-70.

Section 122. Increases the amount which may be set aside for the outlying areas from 2 to 3 percent of appropriations, and authorizes payments out of this amount to the Department of the Interior for books for Indian children in Bureau of Indian Affairs schools.

Section 123. Assures each State at least $30,000 per year for administrative expenses.

PART C SUPPLEMENTARY EDUCATIONAL CENTERS AND SERVICES Section 131. Adds an authorization for title III of Public Law 89-10 of $150 million for fiscal year 1967, and of such sums as may be necessary for fiscal years 1968-70.

Section 132. Increases the amount which may be set aside for outlying areas from 2 to 3 percent of appropriations, and authorizes payments out of this amount to the Department of the Interior for supplementary services and centers for Indian children in Bureau of Indian Affairs schools.

PART D-COOPERATIVE RESEARCH ACT AMENDMENTS

Section 141. Amends section 2(b) of the Cooperative Research Act (training in research in education) to authorize contracts with public and private (including profitmaking) organizations.

Section 142. Deletes from section 4(b) of the Cooperative Research Act (regional research facilities) the authority to operate regional research facilities. Section 2 of the act contains substantially equivalent authority, and the intent is to reserve the $100 million authorized for regional research facilities for construction alone. Section 143. Amends the definition of "construction" so as to authorize the acquisition of existing buildings.

PART E-GRANTS TO STRENGTHEN STATE DEPARTMENTS OF EDUCATION Section 151. Adds an authorization for title V of Public Law 89-10 of $22 million for fiscal year 1967, and of such sums as may be necessary for fiscal years 1968–70. Section 152. Makes a technical amendment in the statutory authority for interchange of personnel with State.

PART F-EFFECTIVE DATE

Section 161. Provides that the preceding amendments shall be effective for fiscal years beginning after June 30, 1966.

TITLE II-FEDERALLY AFFECTED AREAS

PART A-AMENDMENTS TO TITLES I AND III OF PUBLIC LAW 874

Subpart 1-Major amendments

Section 201(a). This amendment would require each local educational agency to 'absorb" a Federal burden equal to 3 percent of total attendance in the case of A category children, and 6 percent in the case of B category children. Payments would be made only for the number of children above the absorption level in each category. If a local educational agency has less than the minimum percentage of A category children, it may count those children in the B category.

Under the present provisions of the law a school district must have 3 percent of its children federally connected and have a minimum of 10 such children in order to be eligible for assistance. A and B category children are added together to meet the 3-percent eligibility requirement even though B category children count only half as much for payment purposes as do A category children. A district which has just over the 3-percent requirement gets paid for all of its federally connected children. A district that has just under 3 percent does not receive any Federal payment.

Section 201(b). This amendment would require the Commissioner to place each local educational agency in a group composed of generally comparable districts in the State. The local contribution rate of each agency within a group would be the average per pupil expenditure of the entire group. At present, a local agency is able to select the districts to which it considers itself to be generally comparable, and this often results in overpayment.

In order to limit compensation to the burden actually imposed by Federal activities, this amendment also would eliminate the local educational agency's option to use one-half the national average per pupil expenditure or one-half the State average per pupil expenditure in lieu of using the per pupil expenditure of the group to which that agency belongs.

Section 202. This amendment would provide that any property which is leased from (or used under some similar arrangement with) the Federal Government no longer would be considered "Federal property" for purposes of the act. Since the States have the power to tax this type of property, they have a source of revenue which makes it unnecessary for the Federal Government to pay the cost of educating children "connected" with the property. This provision would apply whether or not the State actually taxes this sort of property.

Subpart 2-Minor and technical amendments

Section 211(a). This amendment would provide that any child who has a parent on active duty in one of the uniformed services could be counted in the B category for the purpose of computing the entitlement of the child's school district. It is intended to eliminate certain inequities which now exist in the law. While the proposed amendment would increase slightly the number of children who would be counted for payment, it is believed that 98 percent of all members of the armed services now are covered, and the amendment would simplify administration considerably.

Section 211(b). This amendment would provide that taxes and other Federal payments made with respect to Federal property would be deducted from the gross entitlement of the local educational agency on the same basis (i.e., only payments made with respect to Federal property which has children "connected" with it for purposes of the act would be deducted). Present law provides that Federal payments other than taxes (e.g., payments made from U.S. forestry reserve funds) shall be deducted only to the extent of the Federal entitlement claimed because of that property, but all taxes are deducted without reference to the amount of entitlement attributed to the particular property on which the taxes are paid.

This amendment would also eliminate the provision which allows certain States to avoid this deduction by not making tax receipts available for current expenses. The $1,000 minimum is necessary because excessive administrative costs are required to determine deductions of smaller amounts.

Section 212. This amendment would permit funds appropriated for one fiscal year to remain available through the following year for the purpose of meeting the curent year's obligations. The entitlement of an eligible school district cannot be determined until the year is over and the final report of attendance of federally connected children is made to the central office and the record checked by a field representative. However, the office is required to obligate as of June 30 each year an actual amount for each of the 4,200 applications submitted each year.

This effort requires 2 or 3 weeks and in fact is based on estimated data. By the end of the following fiscal year final reports have been received from the districts and final entitlements have been determined for most eligible districts. This amendment would neither increase nor decrease entitlements nor result in an additional requirement for cash reserves, but it would eliminate considerable paperwork. Section 213. This amendment would provide that if no tax revenues of a State or of any political subdivision of the State may be spent for educating children who reside on Federal property within the State, or if no tax revenues of a State are allocated for educating these children, then the property on which the children reside may not be considered Federal property for purpose of making payments under sections 3 and 4 of Public Law 874. If none of these situations exist, but a local educational agency still refuses to educate children who reside on Federal property within the school district of the agency, there would be deducted from the payments to that agency for category B children an amount equal to the additional expense to the United States of educating the category A children on base. There are approximately 55 places in the United States where State law requires or permits school districts to refuse to educate children living on Federal property. This usually occurs because the State considers the property to be held under exclusive Federal jurisdiction. In a few States this is true in spite of the fact that the local communities may levy certain taxes on the military families living on the Federal property. In those situations where a school district does not or cannot provide free public education for children living on Federal property, the Commissioner is required either to build or otherwise arrange for the necessary school facilities and to pay the full cost of the educational programs for the children living on Federal property.

Section 214(a). This amendment would provide that any Federal property which the United States conveys to some other party could still be considered as Federal property for purposes of this act for a period of 1 year after title to the property is transferred. Under the present provisions of Public Law 874 housing projects sold or transferred may be counted as Federal property for 1 year after the end of the year in which the sale or transfer took place. This provision was put in the law because it requires at least a year after a property is sold by the Federal Government to private individuals to get the property on the tax rolls and collect revenues from it for school purposes. This should apply to nonhousing Federal property as well, because the same justification applies to both types. Section 214(b). This amendment would provide that federally owned property used to provide benefits to the local community would be considered as Federal property for purposes of the act. At present, this class of federally owned property is not included in the act's definition of "Federal property" because it benefits rather than burdens the local community. However, it is desirable to include this property in the definition in order to eliminate the administrative difficulties involved in excluding it.

Section 214(c). This amendment would provide that, for purposes of the act, the term "free public education" would not include any education provided beyond grade 12. While the act presently permits secondary education to include children in the 13th and 14th grades, education at that level is generally different from elementary and secondary education. This provision of the present law operates unevenly, since children in the 13th and 14th grades are eligible to be counted only in two or three States. Title I of Public Law 89-10 prohibits the counting of children in grades 13 and 14, and the same rule should apply to Public Law 874.

Section 214(d). This amendment would give the Commissioner authority to prescribe a uniform system of counting children to determine average daily attendance of federally connected children, thereby increasing administrative efficiency. At present, each State is free to decide how, when, and how frequently it will count its federally connected children. This causes unnecessary complications.

PART B-AMENDMENTS TO PUBLIC LAW 815

Section 221. This amendment would change the eligibility requirement. A local educational agency would be eligible to receive an entitlement if it has a 6percent increase in federally connected children over a 4-year period rather than a 5-percent increase over a 2-year period, as the present law requires. Many local educational agencies receive insufficient payment for the burden imposed on school facilities by Federal activities because the erratic growth of school membership does not fit the pattern established by the act.