JUSTIFICATION PURPOSE OF THE PROPOSED LANGUAGE The language is required to provide authority for the National Science Foundation to utilize unexpended balances of the existing revolving fund in order to complete the liquidation of the Government's research program in synthetic rubber in fiscal year 1957. The President's budget (p. 216) for fiscal year 1957 stated, with regard to the Government's synthetic rubber research program, that during fiscal year 1957 the National Science Foundation would support a limited program of high polymer research in universities. In addition, it was understood that the Foundation would be required to bear the cost of placing the Akron Laboratories in standby condition pending disposal. At that time, the Bureau of the Budget agreed that the unobligated balances from this program would be available to the National Science Foundation for these purposes during fiscal year 1957, as indicated by the schedules in the President's budget. The unexpended balance was accumulated through the renegotiation of research contracts and from income derived from research performed by the Akron Laboratories for private industry. The unexpended balance is estimated to be $556,000. Recent conversations with representatives of the General Accounting Office, however, have indicated that it is their view that the unobligated funds remaining after fiscal year 1956, from the synthetic rubber research program, cannot legally be used during 1957 without specific authorization from the Congress. The reasoning of the General Accounting Office representatives is based primarily upon section 9 (a) (7) of the Rubber Producing Facilities Disposal Act of 1953 (Public Law 205, 83d Cong., 1st sess.). Section 9 (a) (7) states that not later than 30 days after termination of the negotiating period provided in the act, and in no event later than January 31, 1955, the Rubber Disposal Commission shall prepare and submit to the Congress a report setting forth "a program for the continuance, to the extent it deems necessary, during the fiscal year following the fiscal year in which the transfer period terminates, of the research program on synthetic rubber and its component materials then being carried on by the operating agency;". [Emphasis added.] The transfer period ended April 29, 1955. In the opinion of the General Accounting Office representatives, section 9 (a) (7) limits continuation of the program to fiscal year 1956, and no authority exists for utilizing the funds remaining from this program without additional legislative authority. BRIEF HISTORY OF THE GOVERNMENT'S SYNTHETIC RUBBER RESEARCH PROGRAM 1. Section 9 (a) (7) of the Rubber Producing Facilities Disposal Act of 1953 required the Disposal Commission to include in its report to the Congress on plant disposal, recommendations as to the extent to which the Government's research program on synthetic rubber and its component materials should be continued. 2. The report of the Disposal Commission, dated January 1955, recommended that certain parts of the research and development program being carried on by the Federal Facilities Corporation be discontinued but that two parts— namely, research contracts with universities and institutes and the Government laboratories at Akron, Ohio-be transferred to the National Science Foundation for continued operation for a trial period running through fiscal year 1956, during which time the National Science Foundation would evaluate the future role of the Federal Government with respect to the support of research in synthetic rubber and the disposition of the Government laboratories at Akron. 3. In accordance with the recommendations of the Disposal Commission, responsibility for the two activities mentioned above were transferred to the National Science Foundation on July 1, 1955. Further, pursuant to the recommendations of the Disposal Commission, funds required for the operation of the remaining parts of the program were transferred to the Foundation, such funds being derived from the proceeds of plant disposal. The amount transferred to the Foundation was $2,227,000. 4. The Foundation established a Special Commission for Rubber Research and charged it with responsibility for recommending as to the future role of the Federal Government in supporting research in synthetic rubber and for recommending as to the disposition of the Government laboratories at Akron. The Special Commission rendered its report in December 1955. The report was approved by the National Science Board and transmitted to the Executive Office of the President. The recommendations of the Special Commission were subsequently approved within the executive branch and by the President in his message to the Congress on rubber requirements, resources, and research, dated April 30, 1956. The report of the Foundation's Special Commission is contained in its entirety in appendix B to the President's message (reprinted as H. Doc. 391, 84th Cong.). The essence of the Commission's recommendations were: (a) The national interest no longer requires that the Government support research directed specifically toward synthetic rubber. (b) The Government should continue to support basic research in the general field of high polymers (of which rubber is only an example). (c) In order to salvage the human and scientific skills developed under the former research program, special funds should be available to the National Science Foundation for fiscal year 1957 during which the Foundation would liquidate the old program and integrate high polymer research into the regular research support programs of the Foundation. (d) The national interest no longer requires Government ownership and operation of the laboratories at Akron and that such laboratories should be offered for sale. 5. In accordance with the recommendations of its Special Commission, as approved by the President, the Foundation has taken steps to liquidate the rubber-research program. It has approved "transitional grants" to certain of the university scientists engaged in the earlier program and has submitted legislation to the Congress for the disposal of the Government laboratories at Akron (S. 3832; H. R. 11013). EXPLANATION OF THE UNEXPENDED BALANCE The unexpended balance was accumulated in two ways: 1. By reducing the amount of research contracts with universities and institutes for fiscal year 1956. 2. By authorizing the Government laboratories to perform contract research for private industry, thereby providing income and reducing the cost of operation of the laboratories in 1956 so far as the Government was concerned. The laboratories were permitted to perform such contract work during the evaluation period in order to thoroughly explore all possibilities for their disposition as well as to form conclusions as to the possibility of outright sale. The following table shows the source of the available balance: Fiscal year 1956 (estimated) Funds transferred (out of plant-disposal proceeds) from Federal Total NSF program for fiscal year 1956: Contracts with universities, institutions, etc. : Reduction from renegotiations----. Net contracts Contract with Government laboratories__ Executive direction__. Total Balance available for fiscal year 1957---- USE OF THE AVAILABLE BALANCE IN 1957 $2,227,000 234, 000 2, 461, 000 1,036, 000 144,000 892,000 950,000 63,000 1,905, 000 556, 000 The available balance will be used for completing liquidation of the synthetic rubber research program as follows: 1. To defray the expenses of the General Services Administration in connection with placing the Akron laboratories in standby condition and offering them for sale. 78089-56 -10 2. To provide "transitional grants" to university and institute research scientists formerly engaged in the Government synthetic rubber research program. No funds are required for personal services in connection with the synthetic rubber research program in 1957. The 11 positions transferred to the Foundation for purposes of administering the program will all have been abolished by June 30, 1956. The following table shows the use of the available balance in fiscal year 1957: Fiscal year 1957 estimated costs for completing the liquidation of program Reimbursement to General Services Administration for protection and maintenance costs for Government laboratories pending disposal assuming congressional approval of S. 3832 or H. R. 11013) – Transitional grants to university and institute research scientists formerly engaged in synthetic rubber research___ Total 1 $60,000 1 496, 000 556, 000 It will 1 Funds for this purpose were arbitrarily held to the estimated available balance. be necessary to make additional grants for research in high polymers from regular NSF funds in the amounts of approximately $131,000. STATEMENT OF DR. C. E. SUNDERLIN, DEPUTY DIRECTOR, NATIONAL SCIENCE FOUNDATION Mr. Chairman and members of the subcommittee, the item before you for the National Science Foundation concerns the provision of language which will permit the Foundation to use funds, which were unexpended at the end of fiscal year 1956, for purposes of terminating operations of the Government laboratories at Akron, Ohio, and for concluding the Government's program of research in synthetic rubber. I would like to explain briefly the source of these funds and how the Foundation became responsible for the Government's research program in synthetic rubber. The Rubber Producing Facilities Disposal Act of 1953 established a Rubber Producing Facilities Disposal Commission and assigned it the responsibility for recommending the disposition of the Government's vast synthetic rubber producing and research programs. The report of this Commission, dated January 1955, on page 44, recommended in part that the Government's program of synthetic rubber research, including the operation of the Government laboratories, be transferred to the National Science Foundation for continued operation for a trial period running at least through fiscal year 1956, utilizing funds available from the proceeds of plant disposal. During this period, the Foundation was to evaluate the role of the Government in synthetic rubber research and to make recommendations relative to the ultimate disposal of the Government laboratories at Akron. The Government's program of research in synthetic rubber consisted of contracts with 11 universities or other research organizations and the operation of the Government laboratories. On July 1, 1955, the Federal Facilities Corporation transferred the responsibility for these activities to the Foundation together with $2,227,000 for their continued operation during the period of evaluation. The funds transferred were not appropriated funds but were derived from the proceeds of disposal of Government-owned rubber-producing plants. The Foundation established a Special Commission for Rubber Research to study the program and advise on its future. The Commission reported in December 1955 and recommended that (1) the Government laboratories be offered for sale after June 30, 1956, and (2) that the Government-sponsored rubberresearch projects should be regarded as terminated at the end of June 1956. Legislation authorizing the sale of the Akron laboratories is now before the Congress and the Foundation has taken the necessary steps to terminate the Government's program of research in synthetic rubber. The termination of these activities will, of course, require an outlay of funds in 1957. At the time of submission of the President's budget for fiscal year 1957, it was the understanding of the Foundation that the unexpended balance of funds previously transferred from the Federal Facilities Corporation would be available for liquidation expenses during fiscal year 1957. This understanding was based on the wording contained in the Disposal Commission's report to the effect that the so-called trial period should run at least through fiscal year 1956. Recently, however, the Foundation has learned that such funds are not available without congressional approval, as a result of language contained in section 9 (a) (7) of the Rubber Producing Facilities Act of 1953. We are therefore requesting the Congress to authorize the Foundation to use the unexpended balance of the funds transferred from the Federal Facilities Corporation for the purpose of concluding the Federal Government's operations in research in synthetic rubber. GENERAL STATEMENT Chairman HAYDEN. Do you have a statement, Mr. Sunderlin? Mr. SUNDERLIN. Yes; I have a brief statement, sir. Chairman HAYDEN. Proceed. Mr. SUNDERLIN. First, I should like to say, Mr. Chairman, that Dr. Waterman is extremely sorry not to be able to be here today. He is out of town. USE OF UNEXPENDED BALANCES The item before you for the National Science Foundation concerns the provision of language which will permit the Foundation to use funds, which were unexpended at the end of fiscal year 1956, for purposes of terminating operations of the Government laboratories. at Akron, Ohio, and for concluding the Government's program of research in synthetic rubber. I would like to explain briefly the source of these funds and how the Foundation became responsible for the Government's research program in synthetic rubber. The Rubber Producing Facilities Disposal Act of 1953 established a Rubber Producing Facilities Disposal Commission and assigned it the responsibility for recommending the disposition of the Government's vast synthetic rubber producing and research programs. The report of this Commission, dated January 1955, on page 44, recommended in part that the Government's program of synthetic rubber research, including the operation of the Government laboratories, be transferred to the National Science Foundation for continued operation for a trial period running at least through fiscal year 1956, utilizing funds available from the proceeds of plant disposal. During this period, the Foundation was to evaluate the role of the Government in synthetic rubber research and to make recommendations relative to the ultimate disposal of the Government laboratories at Akron. The Government's program of research in synthetic rubber consisted of contracts with 11 universities or other research organizations and the operation of the Government laboratories. On July 1, 1955, the Federal Facilities Corporation transferred the responsibility for these activities to the Foundation together with $2,227,000 for their continued operation during the period of evaluation. The funds transferred were not appropriated funds but were derived from the proceeds of disposal of Government-owned producing plants. The Foundation established a Special Commission for Rubber Research to study the program and advise on its future. The Commission reported in December 1955 and recommended that: (1) the Government laboratories be offered for sale after June 30, 1956; and (a) that the Government-sponsored rubber research projects should be regarded as terminated at the end of June 1956. I might add that the recommendations were approved by the President and presented in his message dealing with rubber research requirements dated April 30, 1956. SALE OF AKRON LABORATORIES Legislation authorizing the sale of the Akron laboratories is now before the Congress and the Foundation has taken the necessary steps to terminate the Government's program of research in synthetic rubber. The termination of these activities will, of course, require an outlay of funds in 1957. At the time of submission of the President's budget for fiscal year 1957, it was the understanding of the Foundation that the unexpended balance of funds previously transferred from the Federal Facilities Corporation would be available for liquidation expenses during fiscal year 1957. This understanding was based on the wording contained in the Disposal Commission's report to the effect that the so-called trial period should run at least through fiscal year 1956. Recently, however, the Foundation has learned that such funds are not available without congressional approval, as a result of language contained in section 9 (a) (7) of the Rubber Producing Facilities Act of 1953. We are therefore requesting the Congress to authorize the Foundation to use the unexpended balance of the funds transferred from the Federal Facilities Corporation for the purpose of concluding the Federal Government's operations in research in synthetic rubber. Chairman HAYDEN. When will all of these operations be concluded under your plan? Mr. SUNDERLIN. During fiscal year 1957. Chairman HAYDEN. Do you not think it will take the whole year? Mr. SUNDERLIN. What we plan to do, Mr. Chairman, is to use the unexpended balance which amounts to about $556,000 in what might be called transitional grants to most of the previous contractors on synthetic rubber research. Chairman HAYDEN. Then, when you have used up your money and disposed of everything, that wipes the slate clean? it? Mr. SUNDERLIN. That is right. Chairman HAYDEN. Will it take all of the half million dollars to do Mr. SUNDERLIN. Yes; it will take approximately $60,000 to be transferred to the General Services Administration so that they can put the Government laboratory plan at Akron in standby condition for disposal. The remaining sum of just under $500,000 would all go for support of the research at the universities where this transition is taking place. Senator ELLENDER. Did you have to make any expenditures for any kind of laboratory equipment for research, or did the universities furnish that? Mr. SUNDERLIN. Some of the funds will be used for necessary additional equipment. Senator ELLENDER. But you were under contract with the universities to carry this through 1956? Mr. SUNDERLIN. That is right. |