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The report is based on the number of Federal children claimed in connection with eligible Federal properties in Fiscal Year 1975 applications filed for January 31, 1975 cut off date. The number of children in membership are claimed, therefore, it is necessary for payment purposes to estimate the number that will be in average daily attendance (until the actual total number in average daily attendance is reported by the school district following the close of the school year).

Some school districts encompass more than one county but present data include only the mailing address. Thus, for the present, only one county has been identified for such a school district. In these cases some children who should be categorized as "in the same county as the school district” will have been placed in the category "out of county".

LOW-RENT HOUSING PUPIL DATA

These data represent an accumulation of the highest figure reported for an individual school district in its P.L. 874 application, in the special survey conducted by the Impact Areas School Group, or in some instances, data furnished by the Library of Congress. (The majority of the data was obtained from the P.L. 874 applications filed in Fiscal Year 1975.)

Of the larger cities only school districts serving eight cities are not reflected in the total of 688,966 pupils in ADA associated with low-rent housing. These cities include Phoenix, Seattle, Tacoma, Spokane, Portland, Indianapolis, Cleveland and Albuquerque. Certainly, when data for these cities are provided the ADA figures will rise. However, it is questioned whether 200,000 or more ADA will be added to the current estimated number. Pupils in eight cities will not provide that increase. It is doubtful that many school districts, generally located in the Southern regions of the nation, which are not how applicants under P.L. 874 will have sufficient low-rent housing pupils in ADA to meet the minimum number of 400 or 3 percent to qualify for assistance.

In previous years we have separated an “A” public housing child into two "B" portions in order to fund the “B” portion that is unrelated to public housing, the language of the new amendments establishing varying rates of payments for subcategories of "A” and “B” children appears to prohibit such separate "B" portions in 1976. In this special report, any child in either an “A” or “B” subcategory that is associated with public housing has not been funded in Payment Tier 2.

SPECIAL EDUCATION PUPIL DATA Of the data contained in this report, these are the most susceptible to question. No similar information is contained in P.L. 874 applications submitted for Fiscal Year 1975. No information is available from sources other than the Impacted Areas School Group survey. From the approximately 1500 forms submitted by the latter group, school districts reported 5788 Special Education ADA in approved special education programs.

If children of parents in the Uniformed Services requiring special education represent 2 to 2.5 percent (our previous estimates) of the total of such children then the above data reflect between 40 or 30 percent of the estimated ADA in this category.

The number of special education pupils claimed separately in categories "A" and “B” Uniformed Services represent identical percentages % of 1 percent) of the total ADA in each category.

Our present interpretation of the new amendments relative to special education is that such additional sums are provided for handicapped children of parents in the Uniformed Services only, and not also for handicapped Indian children. Thus, data were sought for only the handicapped children with parents in the Uniformed Services.

SECTION 3(e) No estimates were made for section 3(e) in either 1975 or 1976. Many school districts would not yet have applied for 1975 and since the same number of children were used for both 1975 and 1976, the data would not show any decrease in 1976. Initial data indicate continuing decreases in Federal attendance; a number of school districts could be expected to apply under Section 3(e) in 1975. A number may also be expected to apply in 1976; however, benefits under the "new" 3(e) effective in 1976 are substantially less than the benefits provided through 1975. This would not hold true for districts heavily impacted with public housing children who might qualify under 3(e) in 1976—their entitlement in 1976 would be 90 percent of 1975 entitlement even though they were not actually paid in 1975.

ELIGIBILITY

Every year a number of applicants do not meet the 3 percent (or 400) eligibility requirement. They are eligible for entitlement if they met the three percent requirement in the previous year or they are eligible for half their entitlement if they met the three percent requirement in the second preceding year. The 1975 data base was established by the receipt of applications for this year. If such applicants: (1) were entitled to only half their entitlement in 1974, (2) were older applicants but not estimated to receive entitlement in 1974, or (3) were new applicants, a test was made to check their meeting the three percent (or 400) requirement. If the school district met this test their data were entered into the 1975 data base. If they did not meet the test only the name of the school district was maintained in the file to indicate the receipt of an application. Thus, in the report which indicates estimates for several years, some districts will show data for 1974 only and some will show data for 1975 and 1976 but not for 1974. Some will not show data at all. The eligible or ineligible status of all 1975 applicants will be firmly established by an individual review of an applicant's initial and final data.

SECTION 6 It should be noted that Section 6 requires a separate appropriation or a specified amount within a general appropriation. It is not included within Payment Tiers 1 and 2. The amount for Section 6 ($46,000,000) must be added to the total reported for Payment Tiers 1 and 2.

HOLD-HARMLESS PROVISIONS

Separate total amounts for each of the four hold-harmless provisions have been estimated on the basis of full funding Payment Tiers 1 and 2. In addition, we have emphasized that if all four hold-harmless provisions are intended to be funded, only the highest of the four should be paid to an applicant. Therefore, the report shows a total of Payment Tiers 1 and 2 and the highest hold harmless amount.

“C” PROVISIONS The computation for the hold-hạrmless provision relative to out-of-county and out-of-State "B" children in the special report includes the new B(1) status of the formerly eligible, but now ineligible, "A" child in the total number of B's. However, the “B” loss of the former “A” child has not been included because we do not believe that the provision intends to hold-harmless any "A" loss either partial or full. This results in a larger number of "B losses" necessary to meet the 10 percent (of total B's) to qualify for the provision and therefore seems to be unfair. (The estimate for this provision is high because the computation was based on total 1975 payment rather than 1975 "B" payment only. Time did not permit correction of this error. It is in the process of being recalculated.

"B" PROVISIONS

The only method we could quickly devise to estimate the hold-harmless provision relative to "base closings” in the time permitted for the special report resulted in identifying all potential applicants and a much higher amount of this provision (after funding Payment Tiers 1 and 2) than we know is necessary. The total decreased in Federal attendance for those school districts claiming properties announced April 17, 1973 and March 5, 1975 as decreasing in Federal activity or closing were used to compute estimates. These estimates are being refined to exclude decreases other than those relating directly to the specific Federal activity announced for decrease and/or closing.

"D" PROVISION

The estimate for the hold-harmless provision relative to public housing is in error to the extent that it includes amounts for Section 2. This will be corrected.

WILLIAM L. STORMER.

Chairman PERKINS. Mr. Commissioner, it is my understanding from your testimony that the Office of Education has not itself conducted any special surveys concerning all these new amendments that were ruled into the impacted law last year to analyze the effects they will have on the various school districts due to the loss of funds.

Now it seems that you are instead relying on incomplete data in your own files, and on an admittedly incomplete survey by the impact school group to make your estimates. If that is correct, why haven't you conducted any special comprehensive surveys? It was our clear intent to delay all of these amendments for 1 year in order to give the Commissioner of Education time to analyze their effects.

It also seems that you did nothing about these amendments until February 27 when we conducted a hearing, and then you produced incomplete estimates on April 5, a mere 85 days before the amendments were to go into effect. Don't you think that you were a little lax and didn't take your responsibilities seriously enough, maybe because of the lack of time, since these amendments are so far reaching and that you need more time now before these amendments should be put into effect, Mr. Commissioner? Answer those questions.

Dr. BELL. Yes, Mr. Chairman. First of all, I would indicate that the estimates that we have we think are reasonably accurate but not entirely precise, but as I indicated

Chairman PERKINS. Those estimates are based on surveys made by impacted areas throughout the country.

Dr. BELL. That is true. But the point that I made in my testimony is that we will have hard data when the applications are submitted and they will be submitted far enough in advance since these amendments not take effect until fiscal year 1976.

Chairman PERKINS. There is no way that you can get hard data until next year? Am I correct about that?

Dr. BELL. That is true but we are not allocating the money until next year. When we get down to the final allocations, Mr. Chairman,

. we will have the hard data and we will be able to make these allocations.

Chairman PERKINS. Don't you think that we should delay the amendments a year in order to get this hard data and in order that we would know really what we are doing?

Dr. BELL.Well, the point that I made in my testimony is that the two areas where we have the least accurate data are the areas that you are going to continue, that you are not going to delay for a year; namely, the public housing and the handicapped. Now these are the areas which we are struggling with for data and these are the areas that your present bill proposes to leave in effect. So those that are the most troublesome for us are the ones that your present bill leaves in effect at the present time, Mr. Chairman.

Chairman PERKINS. Mr. Commissioner, if I understand you correctly, you state that the problem with H.R. 5181 is that although it delays most amendments to impact aid it would retain the two amendments causing the Office of Education the most problems—the provision giving

additional payments for handicapped children of military parents and the provision giving payments to school districts for low rent public housing children. I would like to point out two facts from your own testimony which I feel disputes that assertion. First, you admit in your testimony that the handicapped item is of such magnitude that any variation in these counts which you have been using will not have any appreciable effect on the school districts involved. Therefore, if the handicap provision presents no problem in terms of implementing the amendments on July 1, it should present no problem in accepting H.R. 5181 since the handicapped amendment is identical in both. Am I correct in that statement?

Dr. BELL. Well, I would concede, Mr. Chairman, that the provision for handicapped children is going to require a relatively small amount of money.

Chairman PERKINS. I don't think we are far apart there and I think that

Dr. BELL. On the housing it is a different matter.

Chairman PERKINS. Let's take the public housing provision where yon admit you are presently using incomplete data in making your estimates since school districts serving eight large cities, including Cleveland and Indianapolis, have not submitted any public housing data and since many other school districts have probably underestimated their count of such children. There is a major difference, however, in using this incomplete data as between H.R. 5181 and the amendment scheduled to go into effect on July 1.

Under H.R. 5181, $63 million must be paid off the top of any appropriation for impact to school districts for public housing students. Additional payments for public housing students can be made on only half, all other A and B children have been paid in full.

On the other hand, under the amendments you support any school district reporting any public housing students in fiscal year 1976 must be paid for 25 percent of those students' entitlements under the first tier. So any miscalculation or underestimate of the number of public housing children can have serious repercussions.

Don't you think that would be most inequitable, Mr. Commissioner, if you undertook to go ahead and implement this public housing provision without any satisfactory data at all ?

Dr. BELL. I would like to ask Mr. Stormer to respond to this.

Mr. STORMER. Mr. Chairman, our estimates are based on data which we collected from the fiscal year 1975 applications. I believe this is the first time we have been able to project on current data and with respect to the low rent housing category pupils, our data currently show 700,000 pupils in this area. We believe this is a reasonable estimate.

We have highlighted the fact that we have scanned and identified that there are roughly eight larger cities and school districts which service them which have not supplied the data for those types of youngsters. Following review of applications and survey data that came in following the automatic data processing runs, we picked up the data from Cleveland and from some other cities and we have picked up only an additional 20,000 pupils. We do have a theory that we are going to be somewhere in that neighborhood of 700,000 to 900,000 pupils.

Chairman PERKINS. You are still doing an awful lot of speculating, don't you think?

Mr. STORMER. I think we have mentioned that there are a number of low rent housing units located in school districts and those school districts are the type that will

Chairman PERKINS. My question is, you are speculating in that connection.

Dr. BELL. I think “estimating” is a more accurate term than “speculating.” Mr. STORMER. Just as an illustration, for example

Chairman PERKINS. I asked the question if it was not speculation and the Commissioner states that he thinks "estimating” is a more accurate term. Whether it is speculating or estimating, you have no hard data, do you?

Mr. STORMER. Yes, sir, I think we do have hard data in the 700,000 count we have at the present time. I believe, as an example, the New York City count of housing

Chairman PERKINS. Let me ask you another question. A week ago the Commissioner sent the Congress regulations for some of the minor 1975 amendments to the impact aid laws. It is my understanding though that these regulations do not include the most important amendment, the one dealing with equalization. Furthermore, you have not sent Congress any regulations at all for the fiscal 1976 amendments, the major amendments revising the entire impact program.

How can you expect to implement those amendments beginning July 1 when you have not written regulations for them and when in fact, you have not even completed writing regulations for amendments which went into effect last July 1 ? Am I correct?

Dr. BELL. Yes, you are correct, Mr. Chairman, but we would point out that we have moved first on the regulations that affect fiscal year 1975. I would indicate that we think with the considerable degree of success we have had in implementing this year's impact aid law with those regulations just coming into effect, that we will be in much better shape next year. We think that our regulations will be in place almost as soon as the appropriation is completed. In fact, if appropriations come from Congress about the same time as they did last year, we will be in place far ahead of that time. So we don't see any problem at all with our fiscal 1976 regulations.

Chairman PERKINS. Mr. Quie, you ask any questions you want.
Mr. LEHMAN (presiding). Mr. Quie.
Mr. Quis. Thank you, Mr. Chairman.

Mr. Commissioner, I recognize that you never asked the questions before on public housing because you never had to. We had a law, but we didn't put any money into it. While some might think you should ask the questions anyway, I know you are not spending the money if you

don't have to do it. To me this is similar to the problem we had when we started out with title I of the Elementary and Secondary Education Act. The Federal Government did not know who was educationally disadvantaged, but they had some information on who was poor. The local school district didn't know who was poor, but they knew who was educationally disadvantaged.

Although you don't now know where all the public housing individuals are, at least this information is quickly available to a local school district, is it not?

Dr. BELL. Yes, and we think we will retrieve it in ample time to administer and notwithstanding the fact that we don't have it now.

Mr. QUIE. When did you make the checks available for school aid?

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