nology, quality control, and business education. To prepare employable workers ready to take jobs immediately upon completing training and capable of handling the advanced processes and equipment currently in use in industry, we just have to train them on the equipment that is actually being used and not on 10-year-old or obsolescent stuff. And most of that equipment is beyond our means to buy or to lease.

Just to give you one glimpse of this problem for the State of Missouri, we have ascertained that the State's 20 community colleges would need $7,500,000 annually to make the necessary capital purchases and $2,500,000 to lease instructional equipment. Our current annual budgets provide only $2 million for purchasing and $400,000 a year for leasing. Part of this shortfall could be covered through the tax incentives provided in Senate bill 108. While I know that the time is very short, I do feel that it is necessary to stress the difficulty we have in hiring and keeping key faculty members in technical areas. It is a very simple fact that we cannot afford to match the salaries that they can receive in private industry. As a result, we either cannot get them or we lose them within the first 2 years of employment. Any incentives that would allow us to use people from business and industry that are on loan would be very helpful, as well as incentives to keep our current faculty up to date in their fields. That is a very important part of the problem we face today. If they are not familiar with current equipment, and are not familiar with current practices by actually working in that field, they rapidly are teaching the wrong things to the right kind of people, unfortunately. So we appreciate Senate bill 108 and its intent, and encourage its passage.

Senator GRASSLEY. Thank you. I have questions of each of you, and although they are directed at specific members of the panel, Í would appreciate it very much if any of you feel you would like to contribute to please answer even if the questions are directed toward someone else. I want to ask you, Mr. Conkling, do you see a future benefit to your company from the staff development provisions in my bill? Particularly, will the hiring of instructors give you more input into curriculum taught in training programs able you to identify and recruit promising students. Are there any other benefits I failed to mention?

Mr. CONKLING. Absolutely. We think that is one of the most attractive features of this program. Oftentimes this legislation is discussed just in terms of equipment. As manufacturers of scientific equipment, we believe getting equipment into schools is fundamental. As was just mentioned by the previous witness, you cannot employ people from schools who have been trained on old equipment no longer in use in your assembly area.

But even more important is making sure that classes taught are up to date. That's the best way to get good students-the best students if possible—who have the most upward mobility and the best chance to make productivity gains.

A lot of our companies are profit-share companies, so welltrained students help themselves by making the enterprises themselves more productive. We think that is one of the most attractive features of your legislation.

Senator GRASSLEY. Dr. Greenfield, from the standpoint of your community college district, do you find that you are unable to offer programs utilizing new current technologies because of the lack of money to initiate such courses? We are talking basically about new programs. In your testimony you talked more about what you are doing right now.

Dr. GREENFIELD. Well, it is not only shying away from some of the new program areas, but it is updating some of our engineering technology programs. The cost of numeric control machines and the computerized equipment in the science and engineering areas, as well as in the allied health areas, makes it very difficult for us to keep our present programs up to date as well as to consider offering laser optics or other new programs. It is a serious problem.

Senator GRASSLEY. Do you feel, Dr. Greenfield, that the tax incentives in my bill are sufficient to encourage additional equipment donations and the lending of faculty from industries that you have worked with in the past?

Dr. GREENFIELD. We have a good deal of that already happening without the tax incentives. What we would like to see-and I think it will happen through this bill-is that many of the companies that are "on the edge," which we have been talking to for a decade or more about the need for closer linkages, will be encouraged to donate more state-of-the-art equipment instead of equipment that they are phasing out. I mean that is what we experience over the years. We got the equipment that they are beginning to shy away from as they replace it. And I think this incentive will give them enough cause to give us state-of-the-art equipment instead of the slightly older equipment.

Senator GRASSLEY. From the standpoint of the private sector, do you agree with that, Mr. Conkling?

Mr. CONKLING. I think Dr. Greenfield is correct. Currently, my company is already in the education business.

Community colleges in Oregon, according to a survey by the Department of Education, face a $5 million shortage of equipment and a shortfall of $16 million to come up to industry standards. Because of the advanced areas in which we need technicians, we were forced to literally create programs ourselves with our own equipment. We are willing to do that, but we feel we are better at making oscilloscopes and other electronics equipment instead of being in the education business. We have worked very closely with our community colleges to shift our classes to them. One helpful element in that equation is to give companies have an additional marginal benefit.

And it is a marginal benefit, but still enough of a benefit to tip the scales in favor of providing state-of-the-art equipment, that latest equipment you just made, not the equipment that is being phased out.

One other additional factor is contained in my prepared testimony and pertains to a very small company. We have talked mostly today about large companies, but Siltec Corp., in Salem, Oreg., is coordinating with Chemeketa Community College very profitably. The company is a startup company, but is already contributing one of its people to program instruction at Chemeketa Community College-and has donated $500,000 worth of new equipment.

You will find startup companies even more inclined to provide state-of-the-art equipment to schools.

Senator GRASSLEY. Mr. Newton, we recently had an Iowa Vocational Education Association survey that revealed equipment needs were the single most important factor to be addressed in improving vocational training programs. How does the present situation at your institution fit in with that survey? Are you typical or worse or even maybe better off than most town institutions?

Mr. NEWTON. Well, Senator, I am not exactly certain that I would agree entirely that equipment needs overcome the people needs. I think an illustration of our own agriculture department-I need to demonstrate my position on this-our own instructors who have been around, many of them since legislation which you are involved in created the community colleges, because of funding and other reasons, have not adapted to the computer skills that we now find being used on modern day farms. It seems to me like we need to give the computer lands-the Radio Shacks, other private companies-the incentive to come in and either train, or our people, or come in and teach those courses so that our future farmers can be exposed to those skills and not be sent out into their field of endeavor with half an education.

I am not so certain that I would agree that equipment, I think they are equally as important. As you well know, most of our colleges, being 15 and 16 years old, a number of those vocational instructors have been out of the field for that length of time. We have not had the resources to put them back in those skills. Your bill would give the companies the incentive to both invite them into their employment as well as send their employees to train our students. So I guess I am not willing to say that the shortage of equipment outweighs the human needs. However, you can easily see that in reference to the agriculture program that I referred to, the computer is absolutely as essential to that class as the training instructor. So on balance, I would say they are equally as important.

Senator GRASSLEY. I am not sure that I want to disect my bill to quite this extent. From the standpoint of certain incentives for the donation of equipment versus the incentive for the exchange of personnel back and forth, do you think one part of the bill is going to accomplish our goal better than another part of the bill, or do you think they will both be about equally effective?

Mr. NEWTON. Well, not being aware of the politics of the matter, Senator, you know, the equipment things are absolutely essential because of the high cost. It is an easy little thing to manage. If a company would choose to contribute to us, they handle the paperwork. We issue a receipt, as I understand it. That is virtually the mechanics of the matter. So that part of it would be the simplest part to administer and to accept. The other part would be a little more difficult in the credit and so on. So obviously as a leader in the community college field, we are going to accept what part of the bill that you manage to pass. But we would prefer to have it all.

Senator GRASSLEY. All right.

Dr. GREENFIELD. I would concur in that we simply cannot afford to get the equipment through purchase, as much as we need it.

Just one significant piece of equipment could take up more than half, for example, of our annual capital equipment allocation. Since we do not receive state aid for capital equipment in our State, it is all local money that has to provide for it. I think though of the two personnel related aspects of your bill, the more important one would be encouraging the loan of employed people to teach in our institutions rather than the secondary one of encouraging companies to receive our staff in off times. We have other ways of accomplishing that. For example, through sabbatical leaves for purposes of return to industry, where we provide part of the salary, so that the company is encouraged to employ the person for longer periods of time than a couple of months, for 6 months or for a year. And that can be more effective. So I would put them in that order of priority.

Senator GRASSLEY. I assume in your position as chancellor that you would see this bill as a new tool to communicate with private industry to get help that you don't have now, or are you communicating with these people anyway?

Dr. GREENFIELD. We are communicating right now. I think that what this does is give an additional incentive for more cooperation than exists even at the present time. But we have been working at it through advisory committees for each of our technical training programs, and the like, in developing this dialog with important people in the labor movement as well as in the management of the companies too, for various purposes, but primarily to be able to keep our present instructional programs and curriculums as up to date as we can make them. But the liabilities of our inadequate equipment and what I feel is our staff becoming more obsolescent as time goes on, without the additional people coming in and the turnover we would like to see, is a significant problem.

Senator GRASSLEY. Let's suppose you already have good relationships with local businesses, do you are already out there, you really think a piece of legislation like this would facilitate that sort of communication and cooperation?

Dr. GREENFIELD. Yes, it certainly will.

Senator GRASSLEY. Even considering the strong relationships with business in your community college area?

Dr. GREENFIELD. Yes.

Senator GRASSLEY. Wayne?

Mr. NEWTON. Senator Grassley, I would just like to confirm that feeling. As you know, in our own State of Iowa when the community college bill was written, we were probably at a point in time when we provided people with high school diplomas and industry accepted them and said they could do whatever the standards of the K-12 system mandated, and they virtually took it upon themselves to train those people in whatever manner of work that they chose for them until today when industry has learned to expect from us a job entry level skill. I think that with the high cost of equipment and training we have got to come back and bring the pendulum back to the middle to some degree, and we are doing that on a voluntary basis. But this piece of legislation gives us a new carrot or a new tool in our arsenal to go out and attract those folks to come and cooperate with us. And we don't do it in the way of having a handout to do it. It is done in such a way that they

have an incentive by virtue of the tax credit. And I think it is an interesting concept, and it will very much put new people on our doorstep, folks that we would not have expected to ask us to do things cooperatively with before.

Senator GRASSLEY. One last question relative to the private sector. Do you think that the business community will find personnel transfers too disruptive of their workforce and their accounting procedures?

Mr. CONKLING. No, absolutely not. It would be far less disruptive than having to set up our own educational institution. And, if I could also comment on the previous question in light of this response, I believe your bill is an extremely effective one, but still a modest measure. You should not feel obligated to choose between one element or the other, because we are doing too little as it is to invest in our own people and our own educational institutions which translates into job opportunities and industrial competitiveness. I think both representatives from community colleges have indicated that cooperation is producing results today. The question is, both from their vantage point and from our vantage point, that we are not cooperating fast enough. Other people in the world are making strides faster than we are. And your bill must be seen as only a healthy beginning, not the end of what we must do to catch up with competition in the world which, whether we like it or not, is not just coming from Japan, but also from countries such as Brazil and others that we traditionally have not regarded as competitors.

Senator GRASSLEY. I want to thank all of you very much. This is the end of my questions. Because other members could not be here, you might receive some questions in writing and the subcommittee would appreciate your response; second, the record stays open, I think, for 7 days. If there is anything you want to add to your testimony, or if there is anyone who wasn't invited to testify who would like to contribute testimony, it is received as a matter of procedure. Thank you all very much. The meeting will stand adjourned until 2 o'clock this afternoon.

[Whereupon, at 12:24 p.m., the hearing was recessed, to reconvene at 2 p.m. this same date.]

Mr. ARMSTRONG. In Colorado Springs, Colo., there exists today a unique private sector partnership that channels the profits from free enterprise into meeting individual and community needs that would otherwise remain unfilled.

For the past 42 years, the after-tax profits earned by the historic Broadmoor Hotel in Colorado Springs have been channeled through its owner, the El Pomar Foundation, to help fund civic and charitable groups throughout the state. With the Broadmoor as its cornerstone, more than $65 million has been contributed by the El Pomar Foundation to help meet the needs of the penrose Hospital for Cancer Research, Colorado College, the University of Denver, the Chicano Education Project and more than 300 other such groups.

But this creative and productive partnership is threatened by requirements proposed by current tax law. The bottom line is this: Unless current law is amended, the El Pomar Foundation will be forced to lose majority ownership of the Broadmoor, and the Broad