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Mr. STORMER. The first checks were made to approximately 30 districts which are extremely heavily impacted during the period of August and September. The bulk of the payments are made after the applications' deadline of January 31.

Mr. QUIE. I notice those 30 school districts are very unlikely to have any public housing or any significant

Mr. STORMER. Basically they are impacted districts.

Dr. BELL. The point we should make for the record, Mr. Quie, and I know you know it but I want to say it for the record, we have paid initially and have for years on estimates and then we pay our final payment after we get actual data. I think that is most important to consider in this discussion so no one will have the impression that payments that go out in the early part of the year are final payments. So there is no way to reconcile our books and to make the payments quite as precisely as the entitlements say that they should be made until after we have actual data.

Mr. QUIE. But the end of June to January, for those 30 school districts, you make the payment because of the extreme hardship of the impact due to the Federal Establishment rather than public housing?

Dr. BELL. That is correct.

Mr. QUIE. So for anybody who then would have any amount or any significant degree of public housing, when would the first payments be to those school districts? Would that be after January 30?

Mr. STORMER. It would be after January 30 and usually it would be approximately the 1st of March. That is when the flow would begin. Mr. QUIE. So we are at least 10 months from that time.

Mr. STORMER. That is correct.

Mr. QUIE. Now when are the final payments made, when all the information is in?

Mr. STORMER. The final applications are received in September and final payments are made in September after the conclusion of the fiscal year. For example, in fiscal year 1976 the final applications would be in September of 1977 and you are really in another fiscal year. Mr. QUIE. In other words, the first payments begin after the 1st of March?

Mr. STORMER. Right.

Mr. QUIE. And the final payments would

Mr. STORMER. Would begin.

Mr. QUIE. In fiscal 1977?

Mr. STORMER. Fiscal 1977.

Mr. QUIE. These are the final payments in the 1976 fiscal year?
Mr. STORMER. That is correct.

Mr. QUIE. So that means for the final payments we have at least a year and a half?

Mr. STORMER. That is right.

Mr. QUIE. So with 10 months before the beginning payments are made and a year and a half before the final payments are made, there should not be any reason why not only the local school districts have that information but also the U.S. Office of Education.

Dr. BELL. That is right, sir.

If I could, I didn't respond accurately or fully to one of Mr. Perkins' questions about the regulations on equalization. These regulations are

now completed and have been signed in my office. They are tentative proposed rulemaking so the committee will have ample opportunity to comment and give us advice on them. The regulations are now pending the Secretary's signature and we anticipate that will happen this week or early next week, Mr. Chairman. So the equalization regulations are, we think, in good shape.

Mr. QUIE. I just wanted to ask those questions to make certain that the members would have in perspective what we are talking about rather than looking at the necessity of having all that decided by June 30 of this year. There would be a good argument for a delay if all that had to be known and payments made by June 30.

Dr. BELL. That is right, Mr. Quie.

Mr. QUIE. By that time I think we will have had ample opportunity. I think those are good first step amendments that we have made to the impact aid law last year.

Thank you, Mr. Chairman.

Mr. LEHMAN. Thank you, Mr. Quie.

Mr. Hall.

Mr. HALL. I have no questions.

Mr. LEHMAN. The gentleman from South Dakota, Mr. Pressler. Mr. PRESSLER. If there is a heavily impacted area, can you make advanced payments for schools to start up their operations without this sort of additional data? I mean do you do that very often?

Dr. BELL. Yes. This is a common practice every year but we reconcile by our final date the amendments of the year. This is common among all of the States in allocating their funds. You make payments on tentative data and some of them are estimates.

Mr. PRESSLER. Then you reconcile your final payments down to the final dollars based on other data that you have in the year?

Dr. BELL. That must be reconciled.

Mr. PRESSLER. What if you find you overpaid somebody?

Dr. BELL. Based upon the experience of this program, and we have had considerable experience, that does not happen. We hold back enough to allow enough slack for that not to happen. If it did happen, of course we would ask for a repayment. If the school system refused to do it, we could reconcile it the following year. There are plenty of other Federal funds besides impact aid that we could reconcile it against so that the Government would not be unjustifiably paying a district in the unlikely event that that happened.

Mr. PRESSLER. No further questions. Thank you very much.

Chairman PERKINS. Mr. Commissioner, you still feel that these regulations in view of the time element, and in view of the fact there is no hard data available, should not be delayed for another year?

Dr. BELL. Well, Mr. Chairman, I think a year's delay is just going to postpone getting into it. We have deliberated on this to a considerable extent. This is our view. We feel that we can implement the law. As I tried to point out here in responding to Mr. Quie's questions, we are confident of our capacity to get the data by then. I would say to the chairman that I think we could have started earlier on this but I would point out that we have had the entire new act to implement.

Chairman PERKINS. I know we get busy and have a tendency to procrastinate but if we would have started even 6 months earlier I feel that we could have come up with some definite information for the various

impacted districts and would have known what was happening and whether they would gain funds or lose funds, but to come at this late hour without the proper studies being made and say we are going to implement all these amendments, I feel that we are legislating too much in the dark. Mr. Commissioner, do you agree with that?

Dr. BELL. Well, I was not here until just before the law was passed. so I was not involved in the extensive hearings and deliberations that went on concerning this act before it was passed.

Chairman PERKINS. From an ordinary viewpoint and from a good administrative viewpoint and from your training and experience as an administrator, don't you feel that we are implementing many of these amendments when we really do not know the true effects? Am I correct in that statement?

Dr. BELL. Well, I feel that following the information that we have processed in our computers I have a higher level of confidence in our ability than I did before.

One of the things that the administration feels strongly about is that there are some elements of reform in this law that move not in enormous steps but a couple tiny steps in the direction that the administration would like to go, so we are reluctant to give up that opportunity. We feel that our data are accurate enough especially when we reconcile

for the

Chairman PERKINS. I yield to the distinguished gentleman from Minnesota.

Mr. QUIE. My question, Mr. Commissioner

Chairman PERKINS. If you will let me say this, I have several 4-H youngsters, ladies and gentlemen, from the great State of Kentucky and I am going to take them back here in this side room and chat with


Mr. QUIE. Could you wait just a moment because I am asking this question for your benefit.

I want to ask the Commissioner if we should adopt the Chairman's bill. Would that in any way reduce the administrative problems that you have?

Dr. BELL. It is our judgment that it would not do it appreciably. It may to a small extent but we don't think it would make a great appreciable reduction.

Mr. QUIE. You still have the "hold harmless" provisions?

Dr. BELL. Yes, sir.

Mr. QUIE. And you still have the public housing?

Dr. BELL. That is right. I would point out based upon other programs that we administer, and impact aid has been there a long time, that I feel better about the data base here than I do, for example, about title I in getting those "hold harmless" provisions put into place at the present time. Some of the new provisions in the handicapped part are also troublesome, so this is not the only challenge we have and we think maybe it is less difficult than some of the others.

Mr. QUIE. Thank you.

Mr. LEHMAN [presiding]. Mr. Pressler, I think you were on deck. Mr. PRESSLER. No questions.

Mr. LEHMAN. Mr. Quie, do you have any additional questions? Mr. QUIE. No, that is all.

Mr. LEHMAN. Mr. Hall.

Mr. HALL. No questions. Thank you.

Mr. LEHMAN. I just want to thank the Commissioner and his staff for being here. I certainly learned a lot this morning and learned more than I wanted to.

Dr. BELL. Thank you.

Mr. QUIE. Mr. Commissioner, do you have any tally on how many congressional districts gain and how many congressional districts lose if we went to the chairman's bill; and, second, how many States gain and how many States lose?

Dr. BELL. Do you have, Bill?

Mr. STORMER. At this point, no.

Mr. QUIE. We have this big book here, and I thought maybe you counted them.

Dr. BELL. We brought you 3,000 pages of data but we don't have

that one item.

Mr. STORMER. It is in there.

Dr. BELL. Mr. Stormer says it is in there but we don't have it on the bottom line.

Mr. LEHMAN. The subcommittee stands adjourned.

[Whereupon, at 10:35 a.m., the subcommittee adjourned.]

[Information submitted for inclusion in the record follows:]



Washington, D.C., May 13, 1975.

Chairman, House Education and Labor Committee,
Rayburn Building, Washington, D.C.

DEAR CHAIRMAN PERKINS: I have been advised that H.R. 5181 introduced by you is presently under study by the Elementary, Secondary, and Vocational Education Sub-Committee of House Education and Labor Committee. Being from North Carolina, I wanted to take this opportunity to stress the importance of this legislation because of the large amount of military and federal property in our state.

Many local governments in North Carolina have depended a great deal on impact aid in financing education, with this being more the case in the areas which are near large military bases. For example, my home county of Harnett is located near Fort Bragg and Pope Air Force Base, so we receive a substantial amount of money from impact aid. A partial loss of these funds would ultimately mean either reduction of school programs or additional revenue would have to be made up through higher taxes. I think you will agree neither of these are desirable.

The current recession has already placed economic hardship on the American people and local governments. North Carolina risks losing millions of dollars for education when alternatives available for maintaining and upgrading our public school programs are very limited. Accordingly, I strongly urge you to persuade the other committee members to give favorable consideration to H.R. 5181 so that Congress can better evaluate the appropriations for impact aid and its importance to local governments.

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