districts virtually all the whites left to build their separate sanctuaries. Often they invoked the rhetoric of religion to support their prejudice. In at least 40 communities it was the churches that facilitated the opening of the segregated facilities by providing buildings and lending their name for use in attracting teachers, students and funds. Recently the Citizens Council deeded their whole system to a Baptist Church so that they could appear religious. They continue to use this ruse to gain the tax subsidies that government grants to religious organizations. In many of our communities it is the local public officials that led and continue to lead the segregated academy movement. In my job of monitoring school policies across the State, I have often talked with local educational officials who control the policies of the public schools, but whose children attend the all-white segregated academies. I personally know of superintendents who seldom, if ever, darken the doors of the public schools for which they are responsible but regularly attend the events at the segregated academies, I have watched as some local officials lowered the taxes for the public schools (including the taxes on their own homes) at the time they were voluntarily taking on the financial burden of building a separate school system for their own white children. A tax deduction is tantamount to public approval for their acts which are calculated to maintain a society separated by race. The Internal Revenue Service must have a policy that prevents this, that puts the government at least nominally on the right side. The IRS Notice issued on February 9, 1979, waters down the September, 1978, proposed revenue procedure. It opens loopholes for those who wish to travel under some religious name to avoid compliance with the law. In 3.03 (b) there is the exemption for "commonly supervised schools." While this appears to be inserted to calm the fears of Roman Catholic educators, it opens the door to abuse. Segregated schools need only form an umbrella to become commonly supervised and buy off some existing Black private school to gain exemption. The language is too loose. In 3.03 (c) items 8 through 14 set forth criteria for demonstrating the linkage with the racial desegregation process. These are good. However, item 6 provides a loophole for churches which have historically sponsored schools. Although a school may clearly be linked to the desegregation process according to the criteria in 8 through 14, that same school could become exempt by showing that it had an historic concern for providing education to children. Can all Baptists point to Roger Williams' exhortations of the 18th Century and gain exemption by pleading that it took them until the first year of desegregation to find the money to build a school? The regulations must provide a means of measuring cause and effect. If the cause and effect are racially linked, then their tax exempt status must be disallowed no matter what rhetoric the school issues. I would like to suggest one additional small change in the revenue procedure, in 3.03 (a), to clarify the time period covered. The time should end "three years after substantial implementation of a final desegregation plan." The word "such" now in the language is too vague and subject to argument. The word "final" is much clearer and legally precise. Some individuals have lobbied against your proposed regulations, claiming that they will hurt many fine educational and religious schools. From my experience, I find that incredible. The latest count of private schools in Mississippi is 194 with approximately 60,000 students. Just under half the schools are reputable and non-discriminatory and would be untouched by any of the proposed rules. These include schools for the handicapped, traditional parochial schools and the historic schools for minorities and deprived children. The 105 schools established since desegregation and the few that greatly expanded deserve the closest scrutiny. Last September's proposed revenue procedures were weak. They do not seek out deeply rooted and long-standing racial elitism. They merely target those whose racial policy is obvious to all who live in their communities. The proposed revenue procedures were the bare minimum of common sense. In Mississippi they would only affect those schools that were blatantly created or used to reduce the white student population and the white community commitment to the public schools. I would like to quote from an article by Father Elvin Sunds, Director of Catholic Charities for the Jackson diocese, published recently in the diocesan paper for both the Biloxi and Jackson dioceses. [Copy attached.] "The effect on Catholic schools in Mississippi should be negligible if the schools has been following diocesan regulations on its student enrollment and faculty hiring practices. If a Catholic school has been following diocesan policy, the IRS ruling should have no effect on them *** And wouldn't it be a strange irony if IRS ended up enforcing diocesan school policy." The effect on those who profess to treat all Americans equally will be negligible. The Children's Defense Fund urges Congress to support the issuance of the guidelines as set forth in September, 1978, and to enforce these regulations strongly by applying appropriate sanctions against those who have extended the life of segregation for themselves, their children and their communities. A MATTER OF JUSTICE-IRS TACKLES "A GROWING PROBLEM" Has the Internal Revenue Service (IRS) decided to tackle one of the more recent Mississippi institutions? It looks like it has decided to do something about a growing problem in our state. Civil Rights legislation and Supreme Court decisions on school desegregation abounded in the last 15 years. The message of such legislation and decisions was clear: "Separate is not equal." The separate school systems for blacks and whites provided an inferior and unequal education for black citizens. Some communities went about the task of completely integrating their school systems-much to their credit. Other communities responded by establishing white segregated academies. We saw a rash of new schools opening in many locations throughout the state. It has happened in small rural communities and even in our capital city. Jackson alone can still "boast" of eight to 10 such academies. It is even more ironical that some of these academies, established for the purpose of avoiding integration, have chosen to call themselves Christian academies, and some have even come under the sponsorship of various churches. Many communities have fully integrated their public school systems and are now providing a quality education for all children-black and white. In many other communities across our state the pressure to send white children to the segregated academies is so great that there is less than one or two percent of the white children in public schools. All are in the academies. In many cases, fathers are found to hold down two jobs while the mother works as well in order to bear the financial burden of sending their children to the segregated academies. Such practices are tremendously destructive of the family life of that family. In many instances the quality of education in the segregated academies is inferior to that in the public school. In all cases, though, the quality of education in the public schools has suffered. Apparently the IRS has decided to try to do something about these academies. A recently proposed IRS regulation would take a much closer look at the taxexempt status of private schools with little or no minority enrollment, especially those schools established after recent desegregation rulings and legislation. According to the proposed regulations all private schools, including religiously sponsored schools, would be subject to review to determine if they are racially discriminatory. Those schools will be looked at very closely which were established or expanded by more than 10 percent while public schools in their communities were desegregating. Additionally, schools with less than a minority enrolling of 20 percent of the percentage of minority population in the school district in which the private school is located would be automatically suspected of discriminatory enrollment practices, unless they could demonstrate that they were non-discriminatory. For example, if a school district had a minority population of 25 percent, a private school with a minority enrollment of less than 20 percent of that percentage (less than five percent), would be suspected of being racially discriminatory in its enrollment. Such a school suspected of being discriminatory because of the lack of sufficient minority enrollment, would lose its tax exempt status with IRS, unless it could demonstrate that it is actively seeking minority enrollment and minority staff. A school judged to be discriminatory could be given a grace period of up to two years to eliminate any unacceptable practices. Understandably, IRS has received several letters about the proposed regulations. According to an agency staff member, nearly 100,000 letters have been received by IRS, most opposing the regulation. Several organizations and individuals are concerned about how these regulations will affect their schools. Among those who are very concerned is the United States Catholic Conference. We might ask ourselves-what effect such regula tions would have on both Catholic schools and on the private academies in Mississippi. The effect on Catholic schools in Mississippi should be negligible if the school has been following diocesan regulations on its student enrollment and faculty hiring practices. Diocesan regulations for the Biloxi and Jackson dioceses clearly prohibit social discrimination and actively encourage minority enrollment. If a Catholic school has been following diocesan policy, the IRS ruling should have no effect on them. If, however, a Catholic school has not followed diocesan policy, it may find itself in hot water with IRS (not to mention with the diocese). And wouldn't it be a strange irony if IRS ended up enforcing diocesan school policies? The effect such a ruling will have on private segregated academies in Mississippi is now difficult to determine. Sorry to say, I don't think we will see any mass closing of academies should the ruling be adopted, but it will make it a little more difficult to stay open should they lose thier tax exempt status. While the effect on the number of private segregated academies in the state will not be profound, perhaps it will give a little much needed incentive to a few more whites to return to the public schools and begin the task of building a quality educational system for all of our children, both white and black. For this reason, these IRS rulings should be supported. Mr. GIBBONS. Thank you. We will have questions for you as soon as we hear from the other witness. STATEMENT OF ROBERT L. LAMBORN, EXECUTIVE DIRECTOR, COUNCIL FOR AMERICAN PRIVATE EDUCATION Mr. LAMBORN. I am Robert Lamborn. With me is John Rhinelander, CAPE's general counsel. The Council for American Private Education (CAPE) is a coalition of 15 national organizations serving approximately 15,000 schools (K-12), enrolling approximately 4.2 million children or approximately 90 percent of those attending private schools. CAPE and its member organizations are nonprofit. They and their member schools actively support a policy of nondiscrimination on grounds of race, color, and national origin. I will be happy to provide a list of the membership. They include three groups serving Lutheran Schools, two serving Hebrew and two serving Catholic, the National Association of Independent Schools, Friends Council on Education, National Association of Episcopal Schools, National Association of Private Schools for Exceptional Children, Association of Military Colleges and Schools of the United States, American Montessori Society, Seventh-day Adventists and the Christian Schools International which is a group of Calvinist Schools, Dutch Reformed, basically. This is one of four national organizations of Christian schools, of which the following are not CAPE members: The American Association of Christian Schools, the Association of Christian Schools International and the National Association of Christian Schools. We wish to underscore at the very outset of our testimony that CAPE endorses the civil rights purposes of the proposed revenue procedure and that the vast majority of private schools are conducted in a racially nondiscriminatory manner. One evidence of the degree of CAPE's commitment to this purpose is that at both the appeals and Supreme Court levels, we entered amicus briefs in support of the black parents in Runyon v. McCrary, a suit which was found in favor of the parents and against the schools involved. We believe that, as a body, private schools should be judged by their positive record on civil rights matters, not by the performance of the relatively quite small proportion of the private schools which may in fact operate in a racially discriminatory way. We believe, also, that in drafting revenue procedures relating to tax-exempt private schools, great care should be taken to focus on schools which are in fact discriminatory and to protect those which are in fact nondiscriminatory in their practices. I have long been active in the education of economically disadvantaged children and in leadership positions in affirmative civil rights actions including: First, as headmaster-heading for 2 years an institution founded to educate the disadvantaged and establishing and implementing racially nondiscriminatory admissions policies and practices; second, as director of the National Association of Independent Schools-NAIS-establishing and implementing racially nondiscriminatory admissions policies for NAIS and its members schools; third, as president of Johns Hopkins University Chapter of Phi Delta Kappa-national honorary education fraternity-establishing and implementing racially nondiscriminatory membership policy for chapter; and fourth, as executive director of CAPE-supervising the preparation and presentation of amicus briefs in support of black parents in case of Gonzales and McCrary v. Fairfax-Brewster School, Inc. We welcome the invitation to comment on the proposed revenue procedure on tax-exempt schools issued February 9, 1979. We consider the matter to be of major importance to the future of America's private schools and to American education. It has been impossible in the time available to prepare and clear this statement with our member organizations, which are located at widely separate points across the country. This statement represents, therefore, the judgment of the CAPE staff and general counsel, as personal adviser to me, without the benefit of wider review by the CAPE constituency. Fortunately for the subcommittee's purposes, several of CAPE's member organizations have received invitations to testify and have done so and most of its member organizations which have not testified may submit statements to this subcommittee for the record. Most will submit written responses to the Internal Revenue Service during the public comment period. CAPE appreciates the careful attention which IRS Commissioner Kurtz and his associates have given to the concerns which have been expressed by private school representatives with regard to the proposed procedure of August 22, 1978. The proposed procedure of February 9, 1979, clearly reflects the serious efforts IRS has made to be responsive to those concerns. There remain, we believe, several matters of principle which should be addressed, as well as a number of points which should be clarified during the comment period. In this oral testimony, I will comment briefly on the more important aspects of these matters. SECTIONS 201 AND 202 In reaffirming the application of racial nondiscrimination to religious schools-2.01-the IRS should at the same time reaffirm that a religious school may select its students from membership in the reli gious denomination if the latter is nondiscriminatory and that this preference or priority does not constitute racial discrimination. The proposed revenue procedure does not affirmatively state this principle which is fundamental to the application of the racial nondiscrimination policy to religious schools. This will be our only comment on the fundamental church-State issues which others will address as they feel it appropriate. SECTION 3.03 (b) While we appreciate the IRS objective in establishing the 20percent safe harbor test, we believe that the test can be easily misconstrued as meaning that a school not meeting this standard has an insignificant minority enrollment, that the test is not based on legislative or Federal Court decisions, that the test is not now controlling or necessary in the light of section 3.03 (c), and that it should therefore be deleted. We strongly support the new provisions for dealing with schools. in systems. They serve to recognize the fact that while individual private schools in a system will understandably vary in the racial mix of their students, they should be judged as members of a system which has a common commitment to the active support of a policy of racial nondiscrimination. It would be helpful, however, to clarify the nature of a "system' in this context, since the systemic nature of private schools varies considerably from one category of schools to another. Some schools are integral parts of extensive systems. Some, although independently owned and managed, are closely joined in a clearly stated common purpose. Together they may be considered as a "system of schools" rather than a "school system." gen Others are completely independent organizations loosely associated for a sharing of resources in support of their mutual purposes. Schools in such associations may operate under an established eral policy in support of racial nondiscrimination as does the National Association of Independent Schools, and thus broadly interpreted may be seen as a system. At the same time, it should be made clear that this provision should in no way place a well-intentioned single school in greater jeopardy than schools in sytems however defined. SECTION 3.03 (C) We do not believe that ordinarily the formation or substantial expansion of a private school at the time of a public school desegregation in the community should be assumed "to be related in fact to public school desegregation." This is a point of major disagreement with the proposal. We believe, to the contrary, that the relationship in fact should be based upon objective evidence, taking into account all the facts and circumstances related to the school's formation or expansion. The presumption of fact is in our mind, clearly untenable. It reflects a pervasive bias against the private schools-a tendency to assume the worst of them and to place the burden of proof upon them-which was evident throughout the August 22 procedure. This |