AUTHORITY TO MAKE LOANS

SEC. 3. (a) The Commissioner may, after consultation with the Council, make a loan to an educational institution for

(1) the construction of new structures suitable for use as classrooms, laboratories, libraries, and related facilities (including initial equipment, machinery, and utilities) necessary or appropriate for the instruction of students or the administration of the institution; and

(2) the rehabilitation, alteration, conversion, or improvement of existing structures for the uses described above if such structures are otherwise inadequate for such uses.

(b) No institution shall be eligible for a loan under this section in respect of any structure for which a grant has been approved under section 6 of this Act.

(c) No loan under this section shall be made unless

(1) the educational institution shows that it is unable to secure the necessary funds from other sources upon terms and conditions equally as favorable as the terms and conditions applicable to loans hereunder; and

(2) the Commissioner finds that the construction, rehabilitation, alteration, conversion, or improvement involved will be undertaken in an economical manner, and that it will not be of elaborate or extravagant design or materials;

(d) A loan under this section

(1) may be in an amount not exceeding the cost of constructing, rehabilitating, altering, converting, or improving the structures involved (including related facilities), and the cost of acquiring any land necessary thereto, as determined by the Commissioner;

(2) shall be secured in such manner and be repaid within such period, not exceeding fifty years, as may be determined by the Commissioner; and (3) shall bear interest at a rate determined by the Commissioner which shall be not more than the higher of (A) 24 per centum per annum, or (B) the total on one-quarter of 1 per centum per annum added to the rate of interest paid by the Commissioner on funds obtained from the Secretary of the Treasury as provided in section 4 of this Act.

LOAN FUNDS

SEC. 4. (a) To obtain funds for loans under this Act, the Commissioner may issue and have outstanding at any one time notes and obligations for purchase by the Secretary of the Treasury in an amount not to exceed $750,000,000.

(b) Notes or other obligations issued by the Commissioner under this section shall be in such forms and denominations, have such maturities, and be subject to such terms and conditions as may be prescribed by the Commissioner, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury which shall be not more than the higher of—

(1) 22 per centum per annum; or

(2) the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the issuance by the Commissioner and adjusted to the nearest one-eighth of 1 per centum. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Commissioner issued under this section and for such purpose is authorized to use as a public-debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and other obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public-debt transactions of the United States.

(c) There are hereby authorized to be appropriated to the Commissioner such sums as may be necessary, together with loan principal and interest payments made by educational institutions assisted hereunder, for payments on notes or other obligations issued by the Commissioner under this section.

AUTHORIZATION OF APPROPRIATIONS

SEC. 5. There is hereby authorized to be appropriated for the fiscal year ending June 30, 1962, and for each of the four succeeding fiscal years, such sums as may be necessary for making grants-in-aid to educational institutions for the purposes described in section 3(a) (1) and (2) of this Act; and any sums appropriated pursuant to this section shall remain available until expended.

AUTHORITY TO MAKE GRANTS

SEC. 6. (a) The Commissioner may, after consultation with the Council, make a grant to an educational institution for any of the purposes described in section 3(a) (1) and (2) of this Act, provided that no institution shall be eligible for a grant under this section in respect of any structure for which a loan has been approved under section 3 of this Act.

(b) A grant under this section may be made only if the application therefor is recommended by the Council and is approved by the Commissioner upon his determination that

(1) the application contains or is supported by reasonable assurances that (A) for not less than ten years after completion of construction the facility will be used for the educational purposes for which it is to be constructed, (B) subject to subsection (c), sufficient funds will be available from sources other than the grant to meet the balance of the cost of constructing the facility, and (C), sufficient funds will be available, when construction is completed, for effective use of the facility for the educational purposes for which it is to be constructed; and

(2) the proposed construction will expand the applicant's teaching capacity, or is necessary to improve or maintain the quality of the applicant's educational program.

(3) the proposed construction represents an increase in the borrower's current rate of capital outlay.

(c) Within such aggregate monetary limit as the Commissioner may prescribe, after consultation with the Council, applications which (solely by reason of the inability of the applicants to give the assurance required by clause (B) of subsection (b)(1)) fail to meet the requirements for approval set forth in subsection (b) may be approved under condition that the applicants give the assurance required by such clause (B) within a reasonable time and upon such other reasonable terms and conditions as he may determine after consultation with the Council.

AMOUNT OF GRANT; PAYMENTS

SEC. 7. (a) The amount of any grant made under this section shall be that recommended by the Council or such lesser amount as the Commissioner may determine to be appropriate; except that in no event may such amount exceed 50 per centum of the necessary cost of constructing the approved facility, as determined by him.

(b) Upon approval of any application for a grant under this title, the Commissioner shall reserve, from any appropriation available therefor, the amount of such grant as determined under subsection (a), and shall pay such amount, in advance by way of reimbursement, and in such installments consistent with construction progress, as he may determine. Such payments shall be made through the disbursement facilities of the Department of the Treasury. The Commissioner's reservation of any amount under this section may be amended by him, either upon approval of an amendment of the application or upon revision of the estimated cost of construction of the facility.

(c) In determining the amount of any grant under this title, there shall be excluded from the cost of construction an amount equal to the sum of (1) the amount of any other Federal grant which the applicant had obtained, or is assured of obtaining, with respect to the construction which is to be financed in part by grants authorized under this title, and (2) the amount of any nonFederal funds required to be expanded as a condition of such other Federal grant.

RECAPTURE OF PAYMENTS

SEC. 8. If, within ten years after completion of any construction for which funds have been paid under this title

(a) the applicant or other owner of the facility shall cease to be a public or nonprofit institution, or

(b) the facility shall cease to be used for the educational purposes for which it was constructed, unless the Commissioner determines, in accordance with regulations, that there is good cause for releasing the applicant or other owner from the obligation to do so,

the United States shall be entitled to recover from the applicant or other owner of the facility the amount bearing the same ratio to the then value (as determined by agreement of the parties or by action brought in the United States district court for the district in which such facility is situated) of the facility, as the amount of the Federal participation bore to the cost of construction of such facility.

GENERAL PROVISIONS

SEC. 9. Any educational institution which, prior to the date of enactment of this Act, has contracted for the construction, rehabilitation, alteration, conversion or improvement of any structures for the uses described in section 3 may, in connection therewith, receive loans or grants, at its option, under this Act, but no such loans shall be made in connection with the construction, rehabilitation, alteration, conversion or improvement of any such structure if the work thereon was commenced prior to the effective date of the appropriate section of this Act, or was completed prior to the filing of the necessary application under this Act.

SEC. 10. (a) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act, the Commissioner, notwithstanding the provisions of any other law, shall

(1) prepare annually and submit a budget program as provided for wholly owned Government corporations by the Government Corporation Control Act, as amended; and

(2) maintain an integral set of accounts which shall be audited annually by the General Accounting Office in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, as amended, and no other audit shall be required: Provided, That such financial transactions of the Commissioner as the making of loans and vouchers approved by the Commissioner in connection with such financial transactions shall be final and conclusive upon all officers of the Government.

(b) Funds made available to the Commissioner pursuant to the provisions of this Act shall be deposited in a checking account or accounts with the Treasurer of the United States. Receipts and assets obtained or held by the Commissioner in connection with the performance of his functions under this Act, and all funds available for carrying out the functions of the Commissioner under this Act (including appropriations therefor, which are hereby authorized) shall be available, in such amounts as may from year to year be authorized by the Congress, for the administrative expenses of the Commissioner in connection with the performance of such functions.

(c) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act, the Commissioner, notwithstanding the provisions of any other law, may

(1) prescribe such rules and regulations as may be necessary to carry out the purposes of this Act;

(2) sue and be sued ;

(3) foreclose on any property or commence any action to protect or enforce any right conferred upon him by any law, contract, or other agreement, and bid for and purchase at any foreclosure or any other sale any property in connection with which he has made a loan pursuant to this Act. In the event of any such acquisition, the Commissioner may, notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property: Provided, That any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;

(4) enter into agreements to pay annual sums in lieu of taxes to any State or local taxing authority with respect to any real property so acquired or owned;

(5) 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;

(6) obtain insurance against loss in connection with property and other assets held;

(7) subject to the specific limitations in this Act, consent to the modifications, 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 title; and

(8) include in any contract or instrument made pursuant to this Act such other covenants, conditions, or provisions as he may deem necessary to assure that the purposes of this Act will be achieved.

(d) Section 3709 of the Revised Statutes shall not apply to any contract for services or supplies on account of any property acquired pursuant to this Act if the amount of such contract does not exceed $1,000.

SEC. 11. The Commissioner shall take such action as may be necessary to insure that all laborers and mechanics employed by contractors or subcontractors on any project assisted under this Act

(1) shall be paid wages at rates not less than those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor in accordance with the Act of March 3, 1931 (Davis-Bacon Act), as amended; and

(2) shall be employed not more than forty hours in any one week unless the employee receives wages for his employment in excess of the hours specified above at a rate not less than one and one-half times the regular rate at which he is employed; but the Commissioner may waive the application of this subsection in cases or classes of cases where laborers or mechanics, not otherwise employed at any time in the construction of such project voluntarily donate their services without full compensation for the purpose of lowering the costs of construction and the Commissioner determines that any amounts saved thereby are fully credited to the educational institution undertaking the construction.

APPORTION MENT

SEC. 12. Not more than 121⁄2 per centum of the funds provided for in this Act in the form of loans, and not more than 12% per centum of the funds provided for in the form of grants, shall be made available to educational institutions within any one State.

NONINTERFERENCE WITH ADMINISTRATION OF INSTITUTIONS

SEC. 13. Except as otherwise specifically provided in this Act, nothing contained in this Act shall be construed as authorizing any department, agency, officer or employee of the United States to exercise any direction, supervision or control over, or impose any requirement or condition with respect to, the program, personnel or administration of, any educational institution.

DEFINITIONS

SEC. 14. For purposes of this Act

(a) The term "Secretary" means the Secretary of Health, Education, and Welfare.

(b) The term "Commissioner" means the (United States) Commissioner of Education.

(c) The term "State" includes Puerto Rico, Guam, the Virgin Islands, and the District of Columbia.

(d) The term "educational institution" means

(1) any educational institution offering at least two years of college-grade courses, including any public educational institution, or any private educational institution no part of the net earnings of which inures to the benefit of any private shareholder or individual; and

(2) any agency, public authority, or other instrumentality of any State established for the purpose of providing or financing housing or other educational facilities for students or faculty of any public educational institution included in clause (c) of this definition.

[S. 635, 87th Cong., 1st sess.]

A BILL To establish a program of scholarship aid to students in higher education Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SHORT TITLE

SECTION 1. This Act may be cited as the "Student Aid Act of 1961".

FEDERAL CONTROL OF EDUCATION PROHIBITED

SEC. 2. Nothing contained in this Act shall be construed to authorize any department, agency, officer, or employee of the United States to exercise any direction, supervision or control over the curriculum or program of instruction of any educational institution or, except as provided in sections 14 and 16, over its administration or personnel.

ADMINISTRATION

SEC. 3. (a) This Act shall be administered by the Commissioner of Education, under the supervision and direction of the Secretary of Health, Education, and Welfare. The Commissioner shall, with the approval of the Secretary, make all regulations specifically authorized to be made under this Act and such other regulations, not inconsistent with this Act, as may be necessary to carry out its purposes. The Commissioner is authorized to delegate to any officer or employee of the Office of Education any of his powers and duties under this Act, except the making of regulations.

(b) In administering the provisions of this Act, the Commissioner is authorized to utilize the services and facilities of any agency of the Federal Government and, without regard to section 3709 of the Revised Statutes, of any other public or nonprofit agency or institution, in accordance with agreements between the Secretary and the head thereof. Payment for such services and facilities shall be made in advance or by way of reimbursement, as may be agreed upon by the Secretary and the head of the agency or institution.

(c) The Commissioner shall, with the advice and assistance of the National Council, make or cause to have made studies, investigations, and reports of the effectiveness of the student aid program established by this Act, and prescribe objective tests and other measures of ability for the selection of individuals to be awarded certificates of scholarship.

(d) At the beginning of each regular session of the Congress, the Commissioner shall make through the Secretary a full report to Congress of the administration of this Act, including his recommendations for needed revisions.

(e) The Secretary shall advise and consult with the heads of executive departments or independent establishments of the Federal Government responsible for the administration of scholarship, fellowship, student-loan, or facilities assistance programs, with a view to the full coordination of all specialized scholarship, fellowship, student-loan, and facilities assistance programs administered by or under all departments and establishments of the Federal Government with the general programs established by this Act.

(f) When deemed necessary by the Commissioner for the effective administration of this Act, experts or consultants may be employed as provided in section 15 of the Administrative Expenses Act of 1946 (5 U.S.C., sec. 55a).

NATIONAL COUNCIL ON STUDENT AID

SEC. 4. (a) There is hereby established a National Council on Student Aid, consisting of the Commissioner, as Chairman, and twelve members appointed without regard to the civil service laws by the Commissioner with the approval of the Secretary. The twelve appointed members shall be so selected that the Council will be broadly representative of the individual, organizational, and professional interests in education, and of the public. Each appointed member of the Council shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the remainder of such term, and except that, of the members first appointed, three shall hold office for a term of three years, three shall hold office for a term of two years, and three shall hold office for a term of one year, as designated by the Commissioner at the time of appointment. None of such twelve members shall be