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Comparison between the numbers of children claimed by a school district under P.L. 815 and P.L. 874 in a given fiscal year is no longer an easy task to perform.

Computations of Entitlements:

The basic law provides that a maximum allowance may be computed for applications eligible under Section 5 on the basis of the number of Federally connected children eligible for payment, times the approved State per pupil cost of constructing minimum school facilities in the second year preceding the end of the increase period covered by the application, times 95 percent for children. eligible and counted under Section 5(a)(1) and 50 percent for children eligible and counted under Section 5(a)(2).

Each year data from which to compute a per pupil cost of constructing minimum school facilities are obtained from the States. These data along with other construction indices are used to compute the per pupil cost for each State where local districts apply for aid. Cost estimates are submitted to the respective Chief State School Officers for concurrence.

Next, I would like to briefly discuss the funding priorities established by the statute. Section 2 provides that each fiscal year the Commissioner shall determine the portion of the funds appropriated which are necessary for carrying out the provisions of Section 9 and 10. The remainder of such appropriated funds shall be available for paying to local education agencies the Federal share of the cost of projects for the construction of school facilities for which applications have been approved under Section 5. In 1970 the Act was amended to provide that applications under Sections 14(a) and (b) (aid for children residing on Indian lands) would have funding status equal to those under Sections 9 and 10. The disaster provisions of Section 16 provide for the use of funds pending the additional appropriation each fiscal year of such amounts as may be necessary to carry out the provisions of that Section. It has been determined administratively that funds necessary for Section 16 would be taken off the top of the regular P.L. 815 appropriation. Beginning in 1971, appropriation language altered priorities contained in the basic Act in order to redirect assistance to local school districts providing free public education for children residing on Federal properties-primarily military and Indian properties. Since then, appropriation language has directed the expenditure of funds in a specific manner. For example, P.L. 94-94 specified up to $5,000,000 be allocated for repairs for facilities constructed under Section 10. It also directed expenditures of the amounts necessary to meet the costs of providing increased school facilities in communities located near the Trident Support Site, Bangor, Washington, without regard to any provision of the law. None of the remainder was to be available to pay for any other section of the Act until full payments were made to cover the eligible costs under Section 5 and Sections 14(a) and 14(b).

Let me now move to a discussion of the methods we use in determining the funding priority for the applications received. In addition to the priorities established in accordance with the sections of the statute, each project application competes with others for assistance under a given section of the Act. The priority system of

approval of projects is established under Section 3. An order of priority has been established by regulation and is followed in approving applications in the event that funds appropriated are insufficient to fund all eligible projects. The priority index is based on relative urgency of need.

The method of determining relative urgency of need is specified in the regulations. The relative urgency of need of eligible applications is based on two factors: (1) the percentage that the number of Federally connected children eligible for payment bears to the total membership; and (2) the percentage that the number of unhoused children in the school district (children without minimum school facilities) bears to the total membership. The priority index is determined by adding these two percentages, but in no case may the priority index be greater than twice the Federally connected percentage, and no priority index can be established if the percentage of unhoused children is zero. However, the regulations provide for the establishment of subpriority indices in the event that the basic priority is determined to be zero.

A priority list of eligible projects is arranged in descending order from the highest to the lowest priority rating. Funds are reserved starting with the project with the highest priority and continuing down the list as far as available funds will permit. Projects which are too far down on the list to be reached with available funds become eligible for consideration if and when additional funds are made available.

Beginning with FY 1967, appropriations for P.L. 815 have been insufficient to meet the demand for school construction assistance. As a result there is presently a backlog of eligible, unfunded applications under Sections 5, 10, and 14. This backlog has been estimated to total $845 million:

In Section 5 there is a backlog of $115 million; in Section 10, $230 million; and in Section 14, $500 million; a total of $845 million.

However, a portion of the above total may be subject to question. A number of the Section 5 applications previously determined eligible may no longer meet the test of need when reexamined in light of current Federal impact. Thus, they may fall from the priority listing and would be subtracted from the estimated need for funds. By the same token older applications remaining eligible would not provide minimum school facilities at today's market prices-considering the per pupil cost of construction we must use. A few of the applications for assistance under Section 14 may be removed from the backlog by virtue of funds made available under P.L. 93-638 (the Indian Self-Determination and Education Assistance Act).

With respect to requests for facilities under Section 10, former Commissioner Bell authorized an in-depth study of school facilities located on government installations, including a study of the need for new construction, plus the repairing or remodeling of existing facilities. That action followed a statement by former Secretary Weinberger that the study would give the Department a sound basis for any decisions relative to a policy change in the facilities program.

Section 10, as I indicated earlier, provides that the Commissioner of Education shall make arrangements for constructing or otherwise providing the minimum school facilities necessary for the education of children residing on Federal property when certain conditions exist. The Federal property involved is generally a military installation, although there are a few exceptions.

The Department of Defense contends that many existing Section 10 school facilities are inadequate and that this condition is impacting adversely on the morale of uniformed service members. With minor exceptions, the funding level for Section 10 has remained at approximately $1 million annually since Fiscal Year 1971.

An interim report prepared by the Division summarizes the results of on-site examinations of 139 school facilities previously constructed under Section 10. The schools are located on 56 different government installations in 22 States and the Commonwealth of Puerto Rico. The on-site examinations consisted of engineering, architectural examinations, and analysis of education program needs in relation to school facilities.

On the basis of actual cost estimates for 14 of the 81 projects, staff projections indicate that $230 million would be required to fund construction projects under Section 10 if the statutory preconditions were satisfied for all of the potential projects considered.

The report is necessarily only the first phase of the on-going study. As a next step, the Office of General Counsel has been requested to examine the legal basis for the funding of these construction projects. This analysis is expected to be completed by the end of August. In addition, we are considering the development of suitability criteria which may ultimately be used in evaluating certain potential Section 10 projects on a case-by-case basis.

Mr. Chairman this concludes my prepared statement. My colleagues and I will now be delighted to try to answer your questions. Chairman PERKINS. Thank you very much for your prepared statement.

We will call on Mr. Grant Pinney, Assistant Superintendent of Sierra Sands Unified School District, Ridgecrest, California.


Chairman PERKINS. Without objection your prepared statement will be made a part of the record and if you want to summarize it

you may.

Mr. PINNEY. I just want to say before I begin, 13 years ago I also testified before your Subcommittee when you were Chairman. I have been in the China Lake area since that time.

Chairman PERKINS. I recall, it was either '64 or '65.

Mr. PINNEY. I certainly appreciate this opportunity to testify before this distinguished committee. For 23 years, I have been in the China Lake, California, area. I mention this because most of you will remember the China Lake School District who will not recognize the name of the new district.

In this School District of more than 2,500 square miles, the primary employer is the Naval Weapons Center, while the School

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District employs the second greatest number of employees in the


The District is located in three counties and is separated from the County seat of Bakersfield by 120 miles and the Sierra Mountain Range. Since our primary employer is the Naval Weapons Center and since a huge Federal post office services the entire area, practically all of our assessed value is from residence.

This, of course, places the burden of building schools on a minority of property owners. The School District's taxable assessed value is primarily of the residence type. The total assessed value of our School District is $46 million, while the assessed value of the federally owned property is more than $500 million.

The past two tax elections have failed-the last one by a vote of 6 to 1. The reason for the failure is not because the people oppose building schools but because their tax rate is presently one of the highest in the State (more than $7 per $100 of assessed value.) Seventy-eight percent of our children are P.L. 874 (Impact Aid children) yet the parents of the other 22 percent are expected to build the buildings. We have 5 approved applications on file in the Office of Education now waiting for money to be appropriated under P.L. 815. These applications are dated 1970, 1972, 1974 and 2 in 1975. We have a high priority number on the Section 5 list of P.L. 815 but each year only a token amount of money is appropriated for Section 5 schools. Last year only $8 million was allocated for Section 5 schools and $700,000 was set aside for major disasters under Section 16.

Our School District must vacate 36 classrooms by July 1, 1977, because the buildings are deemed to be earthquake unsafe and the School District has an earthquake fault running through it. We are now at a very desperate point as are many other Section 5 applicants throughout the nation. I would like to quote some statistics taken from the files of the Office of Education on April 8, 1977. The following number of Section 5 applications are on file awaiting funds:

In 1967, 40 applications; in 1968, 54 applications; in 1969, 93 appplications; in 1970, 63 applications, 1971, 39 applications; 1972, 32 applications; 1973, 32 applications; 1974, 4 applications; 1975, 10 applications; 1976, 2 applications; and in 1977, 3 applications. The total amount needed to fund just these listed Section 5 applications is $115,258,346.

Our problem has been, in the past, that very high priority projects come in each year and are funded ahead of those on the list or major disasters occur taking priority on all of the P.L. 815 money.

For this current year $25 million dollars was appropriated for the entire P.L. 815 program. It was distributed as follows:

$6 million for Section 10.

$8 million for Section 5.

$11 million for Section 14.

This leaves Section 16 the major disaster area with no funds. This year the Office of Education was forced to hold out $1.4 million from Sections 5 and 14 to provide help for major disasters such as Guam.

A few years back when the earthquake hit Los Angeles, it cost $11 million to rebuild the Los Angeles High School alone, while the Federal Government had only appropriated $10 million total that year for all sections of P.L. 815.

On April 4, 1977, the States of Kentucky, West Virginia and Virginia suffered major disasters and must be assisted in fiscal '78 through Section 16, the disaster section of P.L. 815.

The major disaster money under Section 16 comes off the top of the P.L. 815 appropriations and is for very necessary and deserving projects, but this year's recommended meager appropriation from the House Appropriation Committee of $30 million will again let the old applications for Sections 10, 14 and 5 stagnate.

We need a method of funding these disasters other than taking the money from regular 815 funds. If it is taken from 815 funds a method of replacement should be set up.

Nothing would spur the economy more than to proceed with all of the 815 construction. The benefits to humanity would be great and the long-term benefits would be unsurpassed. P.L. 815 must be renewed.

I understand that if all sections of P.L. 815 were added together more than $700 million would be needed to fund the backlog of projects.

I come to this Committee with these thoughts: Laws are made to educate all children; property tax is determined to be the source of funding; tax elections are going "down the drain"; P.L. 815 is not funded enough to make a dent in the backlog. How do we school people house the children? Would it be possible to write into the legislation a permanent $100 million per year until this backlog is cleaned up?

Another change needed is the 6 percent increase limitation in the 815 law. For example, if a school district of 8000 students has an increase of 400 elementary students, they do not qualify for funds because they do not need the 6 percent requirement, which would be 480 students. Yet they need another elementary school to house these students. Under 874 you are paid each year for each student. Under 815 you are paid only one time for construction, so my feeling is that payment should come as numbers of students increase. We need a method other than taking it from the 815 funds. If it is taken from the 815 funds there should be some method of reimbursement.

I would also like to enter this statement because of our problems under Hold Harmless provisions.

[The statement was read by Mr. Pinney.]

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