Chairman OWENS. Thank you.

Mr. Donald Payne has submitted an opening statement for the record. Without objection, it will be entered into the record.

[The prepared statement of Hon. Donald M. Payne follows:]

STATEMENT OF HON. DONALD M. PAYNE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. Chairman, let me commend you for calling this oversight hearing on the Randolph-Sheppard Act, which will address concerns raised regarding alleged violations of the act which gives blind vendors first priority for the operation of vending facilities on Federal property.

This act was established in 1936 to provide employment opportunities for the blind. Over the last 50 years, more than 22,000 people have participated in and have benefitted from the program. Today, we must insure the viability of this program by making sure all of the agencies involved in the program continue to insure employment opportunities for the blind.

Finally, I would like to welcome all the witnesses and I look forward to hearing their testimony.

Chairman OWENS. Our first panel consists of the following individuals: Mr. Robert R. Humphreys, Attorney, Affiliated Leadership League of and for the Blind of America; Mr. Durward McDaniel, Counsel, Randolph-Sheppard Vendors of America; and George Abbott, Vendor, Bethesda National Medical Center, Bethesda, Maryland.

Welcome, gentlemen. We will begin with Mr. Humphreys.

STATEMENTS OF ROBERT R. HUMPHREYS, ATTORNEY, AFFILIATED LEADERSHIP LEAGUE OF AND FOR THE BLIND OF AMERICA; DURWARD MCDANIEL, COUNSEL, RANDOLPH-SHEPPARD VENDORS OF AMERICA; AND GEORGE ABBOTT, VENDOR, BETHESDA NATIONAL MEDICAL CENTER, BETHESDA, MARYLAND

Mr. HUMPHREYS. Thank you, Mr. Chairman, very much.

It is an honor and a distinct privilege for me to appear before you today, and I look with great anticipation on what the other witnesses will say before you, because, as you have already indicated, it's been 12 years since there's been an oversight hearing on this Act, and a great deal has transpired in the meanwhile.

It is an important program, a program that provides employment to several thousand blind people, as well as several hundred people with other physical and visual impairments.

I am an attorney, Mr. Chairman, in private practice, by way of introduction, and from 1977 to 1980, I was Commissioner of the Rehabilitation Services Administration, which, as you know, has oversight jurisdiction and management authority over the RandolphSheppard program at the national level in the Executive Branch. From 1971 to 1977, I was Special Counsel to the Senate Labor and Human Resources Committee, in which capacity I was the Senate's chief draftsman for the Rehabilitation Act of 1973, including Title III, which, as you know, was a precursor to the Americans with Disabilities Act, and also the Randolph-Sheppard Act amendments of that year.

Since 1980, I have been directly involved in a considerable number of Randolph-Sheppard arbitrations as a panel member, as

an expert, and as a consultant. I have also been lead counsel in litigation relating to that Act in a number of cases, as I am currently. The blind vendors of this Nation collectively, Mr. Chairman, have suffered considerably since the Congress took a comprehensive look at this program. I urge you most strongly to assert this committee's leadership and direction for the blind vendor program to correct the many misinterpretations of the law that have risen since the 1974 amendments and to convey to those Federal property managing agencies and the judiciary the proper legislative intent and the spirit of the Act.

The program has grown very little since the 1974 amendments have been enacted, and there are many reasons for that. Mr. Ballenger suggested the possibility of opening the Act up for other disabilities, unfortunately because of the fact that the Act has not enabled nearly as many blind vendors to participate in this program as was anticipated. In fact, it's been stagnated since 1974 for a variety of reasons. The only effect of opening the Act up would be to put blind vendors out of a job.

There has never been an appropriation for this program. It is completely self-supporting. The number of staff at the Federal level to oversee and manage this program has also stagnated and is not in conformity with Section 208 of Public Law 93-516, which established the 1974 amendments.

The requirement was that ten additional staff persons be added to manage the Randolph-Sheppard program. Some additions were made; but over the years, the attrition rate has been bad, and as a result, there is very little in the way of staff capability to manage the program at the national level.

Many State licensing agencies are not aggressive in identifying vending opportunities. They will not, for one reason or another, protect the interests of their blind vendor.

There is resistance on the part of a number of Federal managing agencies to install blind vendors on Federal property. This is and remains a mystery to me why there is so much resistance on the part of the Federal property managing agencies; and we will get into, I would hope, some of the reasons for that today.

Before I respond to your question, Mr. Chairman, for current examples of the violations of the Act, I believe it would be useful to review for the committee some of the major provisions of the law as it was amended in 1974.

Congress was determined at that time, once and for all, to set forth strongly and clearly its intention that blind vending facilities are preeminent on Federal property. The Act provided a priority, as you mentioned, a prior right as it says in the Randolph-Sheppard legislative history, not merely a preference for blind licenses for the operation of vending facilities on any Federal property.

Wherever feasible, one or more blind vending facilities are to be established on all Federal property. It is all-inclusive. Any limitations on the placement or operation of a blind vending facility by a Federal department agency or instrumentality is required to be justified in writing to the Secretary of Education.

The Secretary of Education determines, not the Federal property manager, who and where there will be any limitation imposed by that Federal property manager. Every new building owned or

leased by the Federal Government, every new alteration or renovation that takes place must include a safer site for a blind vending facility.

All income from vending machines, on Federal property, which are in direct competition with the blind vendor must be turned over to the affected vendor and the State agency. Fifty percent of vending machine income, in general, where there is not direct competition, must go to the State agency. That has not been done in all

cases.

Mandatory arbitration was established for aggrieved vendors against State licensing agencies and for the agencies against Federal property managers. Arbitration panels have broad authority to provide remedies. There are no statutory limits on the power of arbitration panels to fashion appropriate remedies. State committees of blind vendors are required to be established. They are very important in this process.

A lot of Federal agencies, and even some State licensing agencies, have been unwilling or unable to accept these changes in their intended magnitude, and this has caused excruciating problems for the vendors.

In many cases, the vendors have been unable to fight for their rights because they lack the resources to do so. Often they have had to rely on the State agency to do battles for them since vendors may not, under the Act, bring arbitration complaints against Federal property managers.

The courts, mainly Federal district courts, have not applied the provisions of the Act uniformly, nor have they agreed on the scope of remedies authorized by the Act.

Some courts have been unwilling to accept the plainly expressed intent of the Act which generally requires any doubt to be resolved in favor of blind vendors which the Act intended exclusively to benefit.

Other courts have not been willing to acknowledge the broad remedial authority of the arbitration panels, and hence, on review, to award damages and costs, including attorneys' fees to the prevailing party.

All this has had a dampening effect on the vigor with which aggrieved vendors seek to right the wrongs which have been visited upon them. Only the most determined, stubborn, and resolute of vendors are willing to take the risk. Hence, in many cases, their grievances and many violations of the Act go unheard and unremedied.

I want to bring now to the committee's attention briefly, because I know that you have many witnesses and very little time, Mr. Chairman, some recent or pending examples of failures to abide by the spirit or letter of the law.

In the District of Columbia, the blind vendors brought a class action suit against the city after the State licensing agency set aside funds from their net proceeds to pay an illegal nominee agency which provided no appreciable services to the vendors.

The vendors won, the district court awarded compensatory damages as restitution, attorneys' fees and costs, and interest, all totaling about $850,000 at this point.

The city has appealed the judgment, refusing to concede liability. Meanwhile, 11 of the blind vendors who were part of the original class have died; 14 others have retired. It has been that long.

The District's main contention is that the Randolph-Sheppard Act does not provide damages or attorneys' fees; there we have a continuing impasse with the vendors again being on the short end of the stick.

In another local case the General Services Administration awarded a contract for operation of a renovated cafeteria to a major professional food service company and at the same time evicted a 71-year-old blind vendor who had operated the cafeteria for 5 years and who had been a Randolph-Sheppard Act vendor for more than 40 years.

GSA maintains the cafeteria is new and that the State licensing agency, the District of Columbia Government, submitted a proposal that was not in the competitive range.

Although Federal regulations required GSA to consult the Secretary of Education on the blind vendor priority in such cases, GSA did not do so.

In another national case, a unanimous arbitration panel recently held the Defense Department committed per se violations of the Act when they solicited national fast food hamburger companies to provide outlets on military and naval installations throughout the country. It is known as the McDonald's-Burger King case. In both this and the GSA case, the Department of Education failed to assert its prerogatives to protect and nourish the Randolph-Sheppard program.

In Georgia, the U.S. Court of Appeals, in a split decision, found that the State licensing agency cannot be compelled by a blind vendor to bring an arbitration complaint against a violating Federal agency, even though the agency closed the vendor's facility and left her out of work.

In Arkansas an arbitration panel confirmed a vendor's right to the facility he sought and also said he had a right to ask a panel to consider additional compensatory relief, attorneys' fees, and costs.

The RSA commissioner at that time refused to reconvene the panel, and the vendor appealed to the district court. That court determined that the arbitration panel has an authority to award compensatory relief and attorneys' fees.

The Court of Appeals, in a confused mixture of opinions, generally affirmed the district court's decision, modified to the extent that it found panels could award prospective but not retroactive damages. This holding was affected by the court's uncertainty as to whether Congress had waived or abrogated the 11th Amendment under the Randolph-Sheppard Act.

And I would urge this committee, among other things, to consider whether or not the 11th Amendment is properly waived or abrogated under the Act. The panel has met since that decision, has awarded attorneys' fees, and the case is back in district court. This has been going on since, I believe, 1982 or so. Again, a vendor without recourse.

In Minnesota, State licensing agency brought an arbitration complaint against the Department of Veterans Affairs. The arbitration panel, unfortunately, found a violation of the Act, but allowed the

Federal Department to continue charging the vendor a 17 percent commission to operate the blind vending facility. Essentially they required him to buy the priority under the Act.

The Department of Veterans Affairs also has asserted as its official policy that its canteen service is exempt from the RandolphSheppard Act. It is not. Vending machine income from canteen services are exempt but not the canteen services themselves.

The problems abound, Mr. Chairman, and I again believe that is most timely for this committee to review those problems and to do something about them, at least in terms of public expression of what the congressional intent is with respect to this Act.

We are not advocating any changes to the law because we think the law is appropriate, it is right, it is fine. It is merely the interpretation that has gone bad.

Mr. Chairman, again thank you. Blind vendors of the Nation are grateful for your interest, and we appreciate your efforts to correct these misinterpretations and misconceptions of the law.

[The prepared statement of Robert R. Humphreys follows:]

PREPARED STATEMENT OF ROBERT R. HUMPHREYS, J.D.

Mr. Chairman and members of the subcommittee, my name is Robert Humphreys. I am honored that you have asked me to present testimony on this important program which provides substantial employment to thousands of blind vendors, as well as to hundreds of other people with physical and visual disabilities.

By way of introduction, I am an attorney in private practice. I also represent a number of disability and health related groups before the Congress, and I am president of The Humphreys Group, an organization formed to advise association management and their members on compliance with the Americans with Disabilities Act. From 1977 to 1980 I was Commissioner of the Rehabilitation Services Administration which, as you know, has national administration and management authority over the Randolph-Sheppard program. From 1971 to 1977 I was Special Counsel to the Senate Committee on Labor and Human Resources. In that capacity I was chief Senate drafter for the Rehabilitation Act of 1973. I was solely responsible for the development of the Randolph-Sheppard Act Amendments of 1974, including its legislative history.

Since 1980, I have been directly involved in a considerable number of RandolphSheppard arbitrations as a panel member, as counsel for amicus groups, and as an expert witness and consultant. I have also acted as lead counsel, at both the trial and appellate level, in a significant number of cases that have advanced beyond arbitration to judicial review.

Mr. Chairman, you and your staff, and in particular Dr. Theda Zawaiza and Staff Director Maria Cuprill, are to be highly commended for your decision to hold these oversight hearings. More than 11 years have passed since the last oversight hearing of substance. It has been nearly 17 years since the last amendments to the act became law. To my knowledge, this body has never held an oversight or legislative hearing on Randolph-Sheppard, at least since 1954.

You have directed me, in your letter of invitation to testify, to focus my testimony on the origins, purpose, and evolution of the act. In addition, you ask me to address any "present day infractions to the letter or spirit of the law" of which I am aware. The blind vendors of this Nation collectively have suffered considerably since the Congress last took a comprehensive look at the program. On behalf of the many blind vendors I know, and if they will allow me the liberty, the many more vendors I don't know, I urge you most strongly to assert this committee's leadership and direction for the blind vendor program, to correct the many misinterpretations of the law that have arisen since the 1974 amendments, and to convey to those Federal property managing agencies and the judiciary, the proper legislative intent and the spirit of the act.

In 1974 it was the expectation of the Congress, expressed in the findings accompanying the substantive amendatory law, that the number of blind vending facilities should double within 5 years. As we all know, that expectation was outrageously optimistic: not only did the program remain stagnant for the next 5 years, very little growth took place over the ensuing 15 years. There are many reasons for the