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provements made by the State of Arkansas during its occupancy shall vest in the United States without payment of compensation therefor.

SEC. 4. The conveyance of the property authorized by this Act shall be upon the further provision that whenever the Congress of the United States declares a state of war or other national emergency, or the President declares a state of emergency, and upon the determination by the Secretary of Defense that the property conveyed under this Act is useful or necessary for military, air, or naval purposes, or in the interest of national defense, the United States shall have the right, without obligation, to make payment of any kind, to reenter upon the property and use the same or any part thereof, including any and all improvements made thereon by the State of Arkansas, for a period not to exceed the duration of such state of war or national emergency plus six months. Upon the termination of such use, the property shall revert to the State of Arkansas, together with any or all improvements thereon and appurtenances appertaining thereto.

SEC. 5. The Secretary of the Army is further authorized to transfer to the State of Arkansas, without consideration, such equipment and personal property located at the Army and Navy General Hospital as he determines is required for the purposes stated in section 3 of this Act.

SEC. 6. In executing the deed of conveyance authorized by this Act, the Secretary of the Army shall include specific provisions covering the reservations and conditions contained in sections 2, 3, and 4 of this Act and shall include such other reservations and conditions as he shall determine to be in the public interest. The Secretary of Health, Education, and Welfare shall determine and enforce compliance with the terms, conditions, reservations and restrictions contained in the instrument of conveyance and such determination shall be final. SEC. 7. In the event the State of Arkansas does not accept the conveyance authorized by this Act on or before June 30, 1960, the Secretary of the Army will thereafter report to the Administrator of the General Services Administration as excess property pursuant to the provisions of the Federal Property and Administrative Services Act of 1949 (63 Stat. 377), as amended, all the lands and improvements thereon comprising the Army and Navy General Hospital, Hot Springs National Park, Arkansas, and said lands and improvements thereon shall cease to be a part of the Hot Springs National Park, Arkansas.

SEC. 8. Notwithstanding any other provision of this Act the Secretary of the Interior shall have the election to restore any or all of the lands and improvements thereon comprising the Army and Navy General Hospital to the Hot Springs National Park in the event (a) the State of Arkansas does not accept the conveyance authorized by this Act on or before June 30, 1960, or (b) title thereto reverts to the United States following the conveyance to the State of Arkansas.

SENATE COMMITTEE ON GOVERNMENT OPERATIONS,

May 7, 1959. Staff Memorandum No. 86-1-22 Subject: S. 1616 (McClellan), to direct the Secretary of the Army to convey the Army and Navy General Hospital, Hot Springs National Park, Ark., to the State of Arkansas.

PURPOSE

This bill authorizes and directs the Secretary of the Army to convey all right, title and interest of the United States in and to the Army-Navy General Hospital, Hot Springs National Park, Ark., to the State of Arkansas without consideration or transfer of funds. The bill provides for the conveyance of approximately 25 acres of land together with all of the improvements located thereon which are presently maintained as the Army-Navy Hospital, to the State, on condition that such property be used as a vocational rehabilitation center, or for other public health or educational purposes.

The bill further provides that

(a) All mineral rights in the land to be transferred shall be reserved to the United States.

(b) Should the property so conveyed cease to be used for such purpose, title thereto shall revert to the United States.

(c) In the event of war, or national emergency, and if the Secretary of Defense decides that the property is useful or needed for miltary purposes,

the United States reserves the right to use such property for the duration of such conflict.

(d) The equipment and personal property located at the hospital be transferred to the State.

(e) Should the State of Arkansas fail to accept conveyance of the property on or before June 30, 1960, the Secretary of the Army will report to the Administrator of General Services that the property is excess to his needs.

BACKGROUND

The Army-Navy Hospital proposed to be transferred under this bill was established by an act of Congress approved in June 1882. In 1929 the hospital was improved and the capacity enlarged to 500 beds. During World War II the patient load increased to as high as 1,777 persons. Shortly after the end of the war, however, the patient load decreased substantially, and about 4 years ago the Department of the Army announced its intention to close the hospital. This action was postponed pursuant to action taken by the Senate Appropriations Committee when it placed a provision in the annual appropriation act, requiring the Department of the Army to continue operating the hospital for the military and naval forces in the area. It has been common knowledge (in Hot Springs) that the Army intends to close the hospital and for this reason more than 25 departments and agencies of the Federal Government have surveyed or studied the physical layout of the hospital and supporting facilities to determine what use could be made of it, in the event it is declared surplus. After nearly 4 years of study no department or agency of the Government has been able to justify or recommend a use for the property which would be economical to operate, or to utilize the facilities without making extensive repairs or alterations.

Consideration was given to a proposal that the property be subdivided into small parcels and either sold or conveyed to other agencies of the Government. This suggestion was rejected as impracticable because the utility services, such as the power lines, water mains, sewage and steam pipes could not be separated and maintained without extensive engineering and costly construction.

It is believed therefore that the highest and best use of the property with the least possible expense could be attained by transferring the entire facility to the State of Arkansas for use as a regional vocational education center, where medical, vocational, social adjustment services, and related training, could be rendered to disabled civilians in the southwest area of the United States. To assure that the best possible use may be obtained of the facility, a committee of outstanding educators and rehabilitation officials was selected to make a survey and to submit a report on the feasibility of using the Army-Navy General Hospital for an area rehabilitation center. The committee was headed by Dr. Frank Krusen of the Mayo Clinic who was assisted by nine other nationally and regionally known experts in the field of rehabilitation.

On December 5, 1958, the committee filed its report and recommended in part as follows:

(1) Facilities for providing comprehensive services to the disabled are inadequate in all sections of the Nation.

(2) Small centers and facilities are needed in most States and these are being established in many places. It is professionally and economically unsound, however, to attempt the establishment of a comprehensive center in each State.

(3) There is urgent need to establish a few regional centers which are large enough to meet all the needs of the disabled in the area of medical, psychological, social and vocational evaluation and services. The establishment of one such center, with Federal-State participation, would serve as a pilot project.

(4) The physical plant and equipment of the Army-Navy Hospital in Hot Springs are well suited for use as a comprehensive rehabilitation center. Conversion can be made at a very low cost. If the facility is declared surplus, a facility would thereby be available which would require millions of dollars to construct at present prices. Every effort should be made to utilize the facility to the best advantage.

(5) The Arkansas Vocational Rehabilitation Service administer and operate the center, accepting disabled clients on a nationwide basis.

AUTHORITY TO ACCEPT AND OPERATE THE CENTER

The General Assembly of the State of Arkansas recently enacted legislation (Senate bill No. 60) approved on February 13, 1959, which would permit the State to obtain title to the property, real, personal or mixed, for the purpose of establishing and operating a rehabilitation center. This legislation amended the State Rehabilitation Act of 1955, thereby providing the necessary legal authority to accept, maintain and operate the facility as a regional rehabilitation activity. The State of Arkansas recently appropriated $200,000 of additional State funds. to match Federal funds for the establishment and operation of the proposed center.

The Vocational Rehabilitation Amendments of 1954, Public Law 565, 83d Congress, approved August 3, 1954, specifically authorizes the Secretary of Health, Education, and Welfare to establish special facilities and services, which in his judgment hold promise of making a substantial contribution to the solution of vocational rehabilitation programs common to all or several States, as indicated in section 4(a) thereof:

"SEC. 4. (a) From the sums available therefor for any fiscal year, the Secretary shall make grants to States and public and other nonprofit organizations and agencies (1) for paying part of the cost of projects for research, demonstrations, training, and traineeships, and projects for the establishment of special facilities and services, which, in the judgment of the Secretary, hold promise of making a substantial contribution to the solution of vocational rehabilitation problems common to all or several States, [Italic supplied.]

BUDGETARY REQUIREMENTS

A review of the President's budget, submitted to Congress in January 1959, reveals that no provision was made for financing the operation of this activity as a Vocational Rehabilitation Center in fiscal year 1960. Examination of the hearings held by the House Comimttee on Appropriations shows that the committee explored the feasibility of transferring this activity to the State of Arkansas and elicited the advice and counsel of Miss Mary E. Switzer, Director of the Federal Office of Vocational Rehabilitation, with a view of determining not only the feasibility of transferring this activity but also the extent to which financial assistance would be required by the Federal Government. Miss Switzer testified that the facility proposed by S. 1616 may be established as a regional rehabilitation center, pursuant to the authority contained in section 4(a) of Public Law 656, approved August 3, 1954.1

Miss Switzer further testified that no provision was made by the Department of Health, Education, and Welfare budget for financing a regional rehabilitation center as visualized by the State officials. This of course is in compliance with a time-honored rule of the Bureau of the Budget, which does not permit any of the departments and agencies to include any proopsals in their budget for financing an activity unless the enabling legislation has been approved, or the proposal had been included in the program of the President. This proposal was not formualted soon enough for inclusion therein, and, as a result, it does not meet this criteria at the present time.

The record indicates that the plant facilities and physical layout of this hospital are in good condition, and that the highest and best use of the property would be attained by transferring it to the State, as proposed by S. 1616. The neighboring States are prepared to use the center and have indicated that they will send some of their disabled people to Hot Springs for training or treatment. They have strongly recommended that the center be established so that the proposed services would be available in the area.

The Director of the Office of Vocational Rehabilitation testified before the committee that the cost of a comprehensive rehabilitation center at Hot Springs would be about $1 million a year. She further testified that ultimately the major support of the center may be obtained from fees from services which are paid by the States agencies and other organizations utilizing the center. Miss Switzer testified that

"In our discussion with representatives from the State of Arkansas about the possible development of a regional center, the question of the continued support of the center has been explored. There is no question but that these representa

1 See p. 514 of hearing on Department of Labor; and Health, Education, and Welfare appropriations for 1960.

tives visualize that ultimately the center will be able to obtain its major support from the fees for services which are paid by the State agencies and other organizations utilizing the available services. However, it has not been possible to develop a specific financial program which would indicate the timing when such a take-over of responsibilities could be assumed by the operators of the center. "We do not believe, of course, that the act contemplated continued support of the operation of a regional rehabilitation center over an indefinite period. I am sure that before such a project could even be recommended for approval by our National Advisory Council, a much mcre definitive financial plan and a much clearer idea of the duration of the support would be needed."

AGENCY COMMENTS

Recommendations and comments have been requested from the Bureau of the Budget, General Accounting Office, Department of the Army, Department of the Interior, and the General Services Administration.

Excerpts from the reports received from these agencies follow:

General Accounting Office

"We have no knowledge as to how the land was acquired for use as a hospital, that is, whether it was part of the public domain at the time the hospital was located thereon or whether it was acquired otherwise. Statutory authority for disposition of property other than the public domain is contained generally in 40 U.S.C. 484, et seq., and 50 U.S.C. App. 1621 to 1641, and is vested in the Administrator of General Services whereas authority for the sale of lands in the public domain is contained in 43 U.S.C. 671, et seq., and is vested in the Secretary of the Interior.

"Other than the foregoing we have no comments to offer with respect to the provisions of S. 1616."

Bureau of the Budget

"For several years the Department of the Army has had no requirement for this facility as a hospital and there is no future foreseeable need for it for this purpose. In addition, surveys by the Department of Defense and the General Services Administration indicate that there is no requirement by other Federal agencies either as a hospital or for other purposes. The Department of the Army has continued to operate it as a hospital only because of the requirement in the annual Department of Defense Appropriation Acts for its continued operation.

"We understand that the land on which the hospital is located is controlled by the National Park Service and has never been withdrawn from the public domain. For this reason, the hospital could not be disposed of under the Federal Property Act either by sale or by transfer to non-Federal agencies for health or educational purposes.

"Since this property cannot be disposed of under the Federal Property and Administrative Service Act, this office would have no objection to enactment of S. 1616 if amended to provide that

"1. The residence of the superintendent of the park, other personnel quarters and approximately 32 acres of land on which these facilities are located shall be retained by the Department of the Interior as recommended by the Secretary of the Interior.

"2. The restrictions on the use of the property by the State of Arkansas as set forth in section 3 of the bill shall be for a period of 20 years only.

"3. In the event of failure by the State of Arkansas to comply with any of the reservations or conditions contained in the deed of conveyance, the Secretary of the Army shall upon the recommendation of the Secretary of Health, Education, and Welfare effect a reverter of title to the property to the United States." General Services Administration

"The Army and Navy Hospital at Hot Springs National Park, Ark., was established by the Department of the Army in 1882 on 24.24 acres of land on a site selected by agreement of the Secretary of War and the Secretary of the Interior in Hot Springs Reservation. Pursuant to section 3 of the act of June 16, 1880 (21 Stat. 289), this and other areas in the locality were 'forever reserved from sale and dedicated to public use as parks.'

"General Services Administration is opposed in principle to the enactment of legislation which would preclude the opportunity for continued Federal utiliza

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tion of property which is excess to the requirements of a Federal agency. We are informed, however, by the Department of the Army that no other Federal medical agency desires to use this facility.

"General Services Administration is also opposed to the enactment of special legislation if its objectives can be accomplished within the framework of existing law. Pursuant to section 203 (k) (1) of the Federal Property and Administrative Services Act of 1949 (63 Stat. 385), as amended, the Administrator of General Services may, in his discretion, assign to the Secretary of Health, Education, and Welfare, surplus real property, including buildings, fixtures, and equipment situated thereon, recommended by the Secretary as being needed for public health purposes, including research. The act authorizes the Secretary to transfer such property to States and their political subdivisions and instrumentalities and to tax-supported medical institutions and to hospitals or other similar institutions not operated for profit which have been held exempt from taxation under section 101 (6) of the Internal Revenue Code. However, inasmuch as section 3(d) of the cited act excludes from the application of the act lands dedicated for national park purposes, and because the act of June 16, 1880, specifically reserves these lands from sale and dedicates them to public park purposes, the objectives of S. 1616 cannot be accomplished within the framework of the existing law.

"For these reasons, and inasmuch as the purpose for which this property will be conveyed is in accordance with the objectives of the Federal Property and Administrative Services Act of 1949, as amended, General Services Administration favors the enactment of this measure."

Department of Health, Education, and Welfare

The Department of Health, Education, and Welfare reported that the bill as drafted "does not comport with the policies and the terms and conditions applicable to conveyances by this Department of surplus property for health and educational purposes authorized by section 203 (k) of the Federal Property and Administrative Services Act of 1949." Normally the Department imposes restrictions on the use of property conveyed for periods of 10 to 20 years, whereas this bill would impose restrictions on the use thereof indefinitely. The other changes suggested by DHEW and recommendations for consideration of the committee are as follows:

"Section 6 of the draft bill, as indicated above, makes the Secretary of Health, Education, and Welfare responsible for compliance enforcement. The difficulties posed by this provision are twofold:

"(1) In the first place, unlike disposals under the above-mentioned provision of the Federal Property and Administrative Services Act, this conveyance is not to be preceded, as we understand it, by the formulation and submission by the State of Arkansas of a specific plan or program of operation delineating the purposes for which the property would be used and specifying in detail the manner in which the facilities would be operated. Consequently, this Department would be ill-equipped to undertake compliance enforcement in the absence of a previously agreed-upon plan or program of operation.

"(2) Secondly, in the event of a determination of noncompliance, the legislation does not make it clear whether the Secretary of the Army or the Secretary of Health, Education, and Welfare shall effect the reverter of title. This is significant in respect to which of the Departments will have the responsibility for protection and maintenance of the property should such reversion occur. Accordingly, in view of the fact that this Department does not have responsiblity for such protection and maintenance even with respect to properties originally conveyed by this Department under the Federal Property and Administrative Services Act, which are reverted for noncompliance-a responsibility which is discharged by the General Services Administration-we would strongly urge that the second sentence in section 6 be deleted in lieu thereof the following inserted:

"Upon the recommendation by the Secretary of Health, Education, and Welfare with respect to the failure of the State of Arkansas to comply with any of the reservations and conditions contained in such deed of conveyance, the Secre tary of the Army shall effect a reverter of title to the property to the United States.'

"Subject to amendment of the draft bill to take account of the foregoing comments, this Department would, therefore, interpose no objection to the enactment of the legislation."