Senator GRUENING. Will you stay a little while in case we need you? Mr. GARVEY. Yes, sir. Senator GRUENING. Mr. Chester B. Lund, Director, Office of Field Administration, Department of Health, Education, and Welfare. Who is with you, Mr. Lund? Mr. LUND. I have Mr. Gray, director of our surplus property utilization program from the Department and Mr. Hiller of the General Counsel's Office. If it is your pleasure, Mr. Chairman, I do have a brief statement here that I would like to have introduced into the record and I would attempt to summarize a portion of it here and read a small portion of it. Senator GRUENING. Do you have copies of it for us? Mr. LUND. Yes, sir. Senator GRUENING. That is a very modest statement in length. I would be very happy to have you read it. STATEMENT OF CHESTER B. LUND, DIRECTOR, OFFICE OF FIELD ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE; ACCOMPANIED BY WENDELL GRAY, CHIEF, SURPLUS PROPERTY UTILIZATION DIVISION, HEW; AND MANUEL HILLER, OFFICE OF GENERAL COUNSEL, HEW Mr. LUND. This opportunity to present the views of the Department of Health, Education, and Welfare on the seven bills under consideration by the subcommittee is very much appreciated. Senate bills 2725 and 2732 would authorize the donation of foreign excess property for health and educational purposes in other countries. Because of the demonstrated benefits of the donation program to health and educational institutions in the United States, we are sympathetic to the purposes of these proposals. Since the Department is not responsible for programs of this type outside the United States and its possessions, however, we defer to the views of the responsible agencies with respect to the policy issues involved. In our comments on these bills which we now have under preparation and in clearance we have suggested some technical provisions which are based upon our experience in administering the domestic program. Senate bill 3154 relates to the importation of foreign excess into the United States. This is a matter outside the purview of the Department, and our comments were not solicited. Senate bill 3489 would restrict the donation program administered by the Department of Defense to educational institutions conducting military training programs which are approved by the Secretary of the Army, Navy, or Air Force. Other organizations previously having been designated as "educational activities of special interest to the Secretary of Defense" would be transferred to the jurisdiction of the Secretary of Health, Education, and Welfare, and would be served in the same manner as, and on a basis of equity with, health, education, and civil defense donees. The Department of Defense would also continue to administer the program of donations to the Civil Air Patrol. The Department would not object to the enactment of this bill, and it would be feasible for the groups transferred to be served through the program which we administer. The Department does wish to recommend the following technical amendment: Insert, after the comma on page 3, line 2, of the bill, the words "under a designation effective on the day," so that clause (C) would read: (C) Any other tax-supported or nonprofit activity which, under a designation effective on the day before the date of enactment of this clause, was eligible to receive property under paragraph (2) but which is not eligible to receive property under that paragraph after that date. The period on page 3, line 6, should follow the quotation marks. The reason for this recommendation is to make clear that an organization, in order to be transferred from the priority program to our program, must have been actually a designated activity-under a donation agreement on the day before enactment of the bill. Otherwise, in addition to the four national organizations mentioned in the Defense Department's submission of the proposal to Congress, other youth organizations might assume that by analogy they were, as a matter of law, "eligible" under paragraph (2) prior to the enactment of the bill and are therefore eligible under paragraph (3) upon enactment of the bill. Senate bill 3493 is a proposal submitted by our Department and its purpose is to facilitate the operation of the surplus property donation program. This amendment would make it clear that a State surplus property agency may be authorized, under the terms of a cooperative agreement, to use donable surplus personal property for its own administrative needs in carrying out the program of distributing surplus property to eligible donees. The proposed bill would also permit the transfer of legal title to vehicles or other special types of property thus made available to the State agency, upon a determination of the Administrator of General Services that such action is necessary to, or would facilitate, the effective use of the property. The use of donable property by the State agency in lieu of property that would otherwise have to be purchased, acts to reduce the charges assessed against donee institutions in order to cover the costs of care and handling. The vesting of title to vehicles in the State agency, enables the agency to comply with State motor vehicle registration laws, and avoids the possibility of any tort claim against the United States arising from the use of such vehicles. This proposal has the concurrence of the General Services Administration and has been cleared by the Bureau of the Budget. Two additional bills before the subcommittee propose to extend eligibility for donations of surplus property to new groups: S. 2605 provides for donations to certain youth organizations, and S. 3288 provides for donations to State fisheries agencies. The Department is submitting reports on both of these bills. Except for the Department's support of S. 155, which the Senate approved in the last session, the Department has been opposed to establishing new groups of eligibles on the following grounds: 1. The amounts of usable surplus property becoming available are not now sufficient to meet the needs of the presently eligible groups. 2. No sound purpose would thus be served by creating additional competition for the available supply of property, and thereby also greatly complicating administration of the program. 3. Because of the worthy purposes served by all groups seeking eligibility, it would be most difficult to open the program to any new group without admitting many others. Thank you. Senator GRUENING. Thank you very much. I think that covers it pretty well. Our next witness is Mr. Walter G. Rhoten, past president, National Association of State Agencies for Surplus Property. Mr. Rhoten, you have a very lengthy statement here. Could you summarize it? Mr. RHOTEN. I think so, Senator. STATEMENT OF WALTER G. RHOTEN, PAST PRESIDENT, NATIONAL ASSOCIATION OF STATE AGENCIES FOR SURPLUS PROPERTY, COLUMBUS, OHIO Mr. RHOTEN. My name is Walter G. Rhoten. I am here to testify on behalf of the National Association of State Agencies for Surplus Property which is comprised of the 50 States, the District of Columbia, Puerto Rico, and the Virgin Islands. This association came into being on the 6th of October 1947. President Barry of our association has requested that I represent him and the association. He was unable to be here due to conditions beyond his control. President Barry testified before this special subcommittee of the Committee on Government Operations, U.S. Senate, 86th Congress, 1st session, on July 29 and 30, and August 10, 1959. His statement will be found on pages 102 through 104 of those hearings. Our association understands that these hearings are on seven Senate bills, some of which, if they become law, would further amend section 203 (j) of the Federal Property and Administrative Services Act of 1949, as amended. If you will permit me to skip part of the prepared statement, Senator, I will cover it as rapidly as possible. The association interposes no objection to Senate bill 2725. The association interposes no objection to Senate bill 2732. In that light I might say, if you care to have it entered into the record, recently I received a letter from the American Academy for Girls at Nicosia, Cyprus, concerning the interest of this academy in surplus property. This letter is dated the 15th of April 1960, and attached to this letter is the reply of the State department of education, Ohio State Agency for Property Utilization. Senator GRUENING. They will be placed in the record at this point.. (The communications referred to follow :) AMERICAN ACADEMY FOR GIRLS, Nicosia, Cyprus, April 15, 1960. DEAR SIRS: I read on page 128 of the February 22, 1960, issue of U.S. News & World Report that a quantity of surplus Government equipment is to be given away to schools and colleges. This includes laboratory equipment and other supplies needed for schools. I am the math and science teacher in the above named academy. This is a school of about 200 girl students from classes 6 through 12 (like through high school in the States). I have my masters in education from the Ohio State University and taught 3. years in Ohio before entering the Army in 1942. My mother's home is in Utica,. Ohio. I was wondering and hoping if our school here might in any way qualify for some of this surplus equipment. This school has been in existence since the early 1920's-the English language being the main language of instruction. Any further information or help you may be able to give us will be greatly appreciated. Sincerely yours, W. KENNETH SANDERSON. STATE DEPARTMENT OF EDUCATION, Mr. W. K. SANDERSON, American Academy for Girls, Nicosia, Cyprus. DEAR MR. SANDERSON: This acknowledges your communication of April 15, 1960, concerning the interest of the American Academy for Girls, Nicosia,. Cyprus, in acquiring Federal surplus personal property for use in science classes. The Ohio State Department of Education, State agency for property utilization, distributes vast quantities of Federal surplus personal property to Ohio public and nonprofit private school systems, schools, colleges, and universities. This program was provided for by an act of Congress passed on June 30, 1949, and is frequently referred to as Public Law 152. Subsequently, the Ohio General Assembly passed an act (copy enclosed) which supports and strengthens the Federal act, and which gives the program legal status. We are sorry to advise you that we cannot make property available, nor can the other 49 States, for redistribution to American educational institutions that are located overseas, even though such an institution might be a constituent arm of the parent authority. This is true even though the parent authority might be located in the United States. You may be interested to know that in the current 2d session of the 86th Congress that there are five bills now pending before the House Committee on Government Operations, Special Donable Property Subcommittee, Hon. John W. McCormack, chairman, which would provide for the donation of foreign excess property to educational and health institutions located in foreign countries. Although I have not seen any of these bills, I presume that they provide for the donation of foreign excess property to foreign schools located on foreign soil, as well as American schools located on foreign soil. The five bills to which I refer are all House measures. These bills are H.R. 8182 (Mr. Monagan), H.R. 8202 (Mr. Barry), H.R. 8209 (Mr. McCormack), H.R. 8398 (Mr. Monagan), and H.R. 8422 (Mr. Barry). To the best of my knowledge no companion measures have been introduced in the Senate Committee on Government Operations. If the administrative officials of the American Academy for Girls are interested in copies of these bills, or concerned about attempting to convince Congress that such a law should be passed, they should correspond with 1. House Committee on Government Operations, Hon. John W. McCormack, Chairman, Special Donable Property Subcommittee, Capitol Building, Room F-22, Washington, D.C. 2. Senate Committee on Government Operations, Hon. John L. McClellan, Chairman, Senate Office Building, Washington, D.C. You may be interested in knowing that the members of the House Special Donable Property Subcommittee, Messrs. McCormack, Monagan, and Barry, are the same men who introduced the five numbered bills previously referenced. We are most happy to make this information available to you. Not only would the State of Ohio, Department of Education, be glad to see overseas schools receive Federal surplus personal property, but I am sure all of the other 49 States that operate a program similar to Ohio's would be happy to see property made available to educational institutions in foreign countries. Most sincerely yours, WALTER G. RHOTEN, Chief. Mr. RHOTEN. It may be of interest to the committee in this respectand in referring to this particular letter I am not speaking for the 57809-60-8 association, but rather for the State of Ohio-in the last paragraph of this letter I did make this statement: Not only would the State of Ohio, Department of Education, be glad to see overseas schools receive Federal surplus personal property, but I am sure all of the other 49 States that operate a program similar to Ohio's would be happy to see property made available to educational institutions in foreign countries. The association has no direct or indirect interest in Senate bill 3154. The association is opposed to Senate bill 2605. The association is opposed to Senate bill 3288. The association believes that section 203 (j) (2) of the Federal Property and Administrative Services Act of 1949, as amended, should be repealed and in this respect Senate bill 3489 would amend section 203 (j) (2) and (3), which provides that the Department of Defense may allocate surplus property under its control for transfer under Public Law 152, approved June 30, 1949, only to educational institutions conducting approved military training programs. Without going through all of the points in the association's statement, Senator, the association has endeavored by some nine factual points to summarize, for the benefit of the committee, why we think this section should be repealed. Senator GRUENING. Well your interest is, of course, getting more surplus property for the State, isn't that it? Mr. RHOTEN. The interest of the association, Senator, is in carrying out the intent of Congress. The hearings on H.R. 7227, Public Law 655, 84th Congress, and the legislative history of that act contains language that indicates it was the clear intent of Congress to require that the distribution of surplus property for health, education, and civil defense be made by a single State agency, and this bill would, of course, prohibit that intent from being carried out. If I may refer to Senate Report 2267 and quote therefrom, this report on H.R. 7227 reads as follows: The bill requires the utilization of a single State agency, in each State, for distributing surplus personal property for health, education, and civil defense purposes to eligible donees within the State, instead of permitting direct donations by the Federal Government. So in answer to your question, Senator, I would say that it is the purpose of this association to carry out the intent of Congress. The reason we believe that this section should be repealed, instead of reporting favorably Senate bill 3489, is that if it is the intent of Congress to add more eligibles or donees, that those added be specifically spelled out by name in section 203 (j) (3) of the act. In this respect we think that all property that is distributed to health, education, and civil defense and other organizations should be distributed through and handled by the single State agency that exists in each of the 50 States and the territories and possessions. Mr. SHRIVER. Mr. Rhoten, in other words it is the recommendation of your association that section 203 (j) (2) be repealed? Mr. RHOTEN. Yes. If it is the intent of Congress to make surplus property available for transfer to other eligibles, and by that I mean eligibles other than health, education, and civil defense, that those eligibles be spelled out by name in section 203 (j) (3) so that the entire program would be handled by the 50 States and the territories, and that the entire program be operated by the States with the aid, assist |