Of even greater significance is the impact upon the health of the country from breathing polluted air. Each day, each person draws in his or her body about 3,800 gallons of air, unaware of the damage polluted air can cause breath and life.

The air one breathes may subject a person or his family to serious allergies, and eye, skin, lung, and throat ailments. Polluted air is feared by some experts to be one of the causes of the recent sharp increase in lung cancer.

Since first declaring my intention a few weeks ago to sponsor an air pollution amendment, I have received many telephone calls, telegrams, and letters from citizens and city officials in every part of the country. Each and every one contacting me enthusiastically favors an amendment of the type which I now introduce.

I hope that everyone will study this amendment and will read these brief remarks. If such be done, I believe everyone will enthusiastically support the objectives of the amendment.

Hearings on the amendment have been scheduled for April 13, 14, and 15, 1954, in room 301, Senate Office Building, Washington, D. C.

[S. 2938, 83d Cong., 2d sess.]
AMENDMENT

Intended to be proposed by Mr. Capehart (for himself and Mr. Kuchel) to the bill (S. 2938) to aid in the provision and improvement of housing, the elimination and prevention of slums, and the conservation and development of urban communities, viz:

On page 104, line 14, strike "Title VIII”, insert in lieu thereof "Title IX," renumber sections 801 through 805 so that they become sections 901 through 905, inclusive, and insert the following new title VIII following title VII:

“TITLE VIII-SMOKE ELIMINATION AND AIR POLLUTION PREVENTION "SEC. 801. The Congress hereby declares that smoke elimination and air pollution prevention are important factors in the prevention and rehabilitation of slums and blighted areas and in the conservation of the health and property of the people of the United States. It is the objective of this title to assist in smoke elimination and air pollution prevention by providing for research, loans, and special tax benefits.

"SEC. 802. (a) The Secretary of Health, Education, and Welfare (hereinafter sometimes referred to in this title as the Secretary) shall undertake and conduct a program of technical research and studies concerned with (a) causes of air pollution and excessive smoke, (b) devices, structures, machinery, equipment, and methods (including methods of selecting and using fuels) for the prevention or elimination of excessive smoke and air pollution or the collection of atmospheric contaminants, and (c) guidance and assistance to local communities in smoke abatement and air pollution prevention and control.

"(b) Contracts may be made by the Secretary for technical research and studies authorized by this section for work to continue not more than 4 years from the date of any such contract. Any unexpended balances of appropriations properly obligated by such contracting may remain upon the books of the Treasury for not more than 5 fiscal years before being carried to the surplus fund and covered into the Treasury. All contracts made by the Secretary for technical research and studies authorized by this or any other act shall contain requirements making the results of such research or studies available to the public through dedication, assignment to the Government, or such other means as the Secretary shall determine. The Secretary shall disseminate, and without regard to the provisions of 39 U. S. C. 321n, the results of such research and studies in such form as may be most useful to industry and to the general public.

"(c) In carrying out research and studies under this title, the Secretary shall utilize, to the fullest extent feasible, the available facilities of existing bureaus and offices within the Department of Health, Education, and Welfare, other departments, independent establishments, and agencies of the Federal Government, and shall consult with, and make recemmendations to, such other departments, independent establishments, and agenciess with respect to such action as may be necessary and desirable to overcome existing gaps and definciencies in available data with respect to excessive smoke and air pollution cause, prevention, and control or in the facilities available for the collection of such data.

For the purposes of this title, the Secretary is further authorized to undertake research and studies cooperatively with agencies of State or local governments, and educational institutions, and other nonprofit organizations, and may, in addition to and not in derogation of any powers and authorities conferred under any other act

"(1) with the consent of the agency or organization concerned, accept and utilize equipment, facilities, or the services of employees of any State or local public agency or instrumentality, educational institution, or nonprofit agency or organization and, in connection with the utilization of such services, may make payments for transportation while away from their homes or regular places of business and per diem in lieu of subsistence en route and at place of such service, in accordance with the provisions of title 5, United States Code, section 73b-2;

"(2) utilize, contract with, and act through, without regard to section 3709, of the Revised Statutes, any Federal, State, or local public agency or instrumentality, educational institution, or nonprofit agency or organization with its consent, and any funds available to the Secretary for carrying out his functions, powers, and duties under this section shall be availble to reimburse or pay any such agency, instrumentality, institution, or organization; and, whenever necessary in the judgment of the Secretary, he may make advance, progress, or other payments with respect to such contracts without regard to the provisions of section 3648 of the Revised Statutes; and "(3) make expenditures for all necessary expenses, including preparation, mounting, shipping, and installation of exhibits; purchase and exchange of technical apparatus; and such other expenses as may, from time to time, be found necessary in carrying out the Secretary's functions, powers, and duties under this title.

"(d) There is hereby authorized to be appropriated to carry out the purposes of this section, such sums, not in excess of $5,000,000, as may be necessary therefor.

"SEC. 803. (a) The Housing and Home Finance Administrator (hereinafter sometimes referred to in this title as the Administrator) within the limits hereinafter provided, is authorized to purchase the obligations of, and to make loans to, any business enterprise to aid in financing the purchase, installation, construction, reconstruction or remodeling of any device, structure, machinery, or equipment used or to be used in connection with the enterprise's business activities where the purchase, installation, construction, reconstruction, or remodeling would (1) substantially reduce the amount of smoke or air pollution or contamination in the community in which the device, structure, machinery, or equipment is located or to be located, or (2) in conjunction with other proposed action in the community, substantially reduce the amount of such smoke, pollution, or contamination.

"(b) No financial assistance shall be extended pursuant to this section unless the financial assistance applied for is not otherwise available on reasonable terms. All securities and obligations purchased and all loans made shall be of such sound value or so secured as reasonably to assure retirement or repayment and such loans shall be made in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participation, or otherwise.

"(c) Loans made pursuant to this section may be made subject to the condition that, if at any time or times or for any period or periods during the life of the loan contract the business enterprise can obtain loan funds from sources other than the Federal Government at interest rates as low as or lower than provided in the loan contract, it may do so with the consent of the Administrator at such times and for such periods without waiving or surrendering any rights to loan funds under the contract for the remainder of the life of such contract, and, in any such case, the Administrator is authorized to consent to a pledge by the business enterprise of the loan contract, and any or all of its rights thereunder, as security for the repayment of the loan funds so obtained from other sources.

"(d) The loans shall be repaid within such period, not exceeding twenty years, as may be determined by the Administrator, and shall bear interest at a rate determined by the Administrator which shall be not less than 1 per centum plus the base annual rate which the Secretary of the Treasury shall specify as applicable to the six-month period (beginning with the six-month period ending July 31, 1954) during which the contract for the loans is made: Provided, That such base

annual rate for each six-month period shall be determined by the Secretary of the Treasury by estimating the average yield to maturity, on the basis of daily closing market bid quotations or prices during the month of May or the month of November, as the case may be, next preceding such six-month period, on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month of May or November, and by adjusting such estimated average annual yield to the nearest one-eighth of one per centum.

(e) The total amount of investments, loans, purchases, and commitments made pursuant to this section shall not exceed $50,000,000 outstanding at any one time.

"(f) There are hereby authorized to be appropriated such sums as may be necessary to carry out the purposes of this section. Funds made available to the Administrator pursuant to the provisions of this section shall be deposited in a checking account or accounts with the Treasurer of the United States. Receipts and assets obtained or held by the Administrator in connection with the performance of his functions under this section, and all funds available for carrying out the functions of the Administrator under this section, shall be available for any of the purposes of this section, including administrative expenses of the Administrator in connection with the performance of such functions.

"(g) Not more than 10 per centum of the funds provided for in this section in the form of loans shall be made available within any one State.

"(h) In the performance of, and with respect to, the functions, powers, and duties vested in him by this section the Administrator shall (in addition to any authority otherwise vested in him) have the functions, powers, and duties set forth in section 402 (c), except subsection (2), of the Housing Act of 1950.

"SEC. 804. (a) The Internal Revenue Code is amended by inserting after section 124B thereof a new section as follows:

"SEC. 124C. AMORTIZATION DEDUCTION FOR CERTAIN TREATMENT WORKS

"(a) GENERAL RULE.-Every person, at his election, shall be entitled to a deduction with respect to the amortization, based on a period of sixty months, of the adjusted basis (for determining gain) of any device, structure, machinery, or equipment for the collection at the source or the prevention or elimination of atmospheric pollutants and contaminants with respect to which device, structure, machinery, or equipment a certificate is made by the Secretary of Health, Education, and Welfare under subsection (d). Such amortization deduction shall be an amount, with respect to each month of such period within the taxable year, equal to the adjusted basis of the device, structure, machinery, or equipment at the end of such month divided by the number of months (including the month for which the deduction is computed) remaining in the period. Such adjusted basis at the end of the month shall be computed without regard to the amortization deduction for such month. The amortization deduction provided by this section with respect to any month shall, except to the extent provided in subsecion (e) of this section, be in lieu of the deduction with respect to such device, structure, machinery, or equipment provided in section 23 (1), relating to exhaustion, wear and tear, and obsolescence. The sixty-month period shall begin, at the election of the taxpayer, with the month following the month in which the device, structure, machinery, or equipment is completed or acquired (or, in the case of reconstruction or remodeling, its reconstruction or remodeling is completed), or with the succeeding taxable year.

"(b) ELECTION OF AMORTIZATION.-The election of the taxpayer to take the amortization deduction and to begin the sixty-month period at one of the times specified in subsection (a) shall be made in an appropriate statement in the taxpayer's return for the taxable year in which the device, structure, machinery, or equipment (or its reconstruction or remodeling) was completed, or in which the certification required by subsection (d) was made, whichever is later. "(c) TERMINATION OF AMORTIZATION DEDUCTION.-A taxpayer which has elected under subsection (b) to take the amortization deduction provided in subsection (a) may, at any time after making such election, discontinue the amortization deductions with respect to the remainder of the amortization period, such discontinuance to begin as of the beginning of any month specified by the taxpayer in a notice in writing filed with the Secretary of the Treasury before the beginning of such month. The deduction provided under section

23 (1) shall be allowed, beginning with the first month as to which the amortization deduction is not applicable, and the taxpayer shall not be entitled to any further amortization deductions with respect to such device, structure, machinery, or equipment.

"(d) DETERMINATION OF ADJusted Basis OF DEVICES, ETC.-In determining for the purposes of this section the adjusted basis of a device, structure, machinery, or equipment

"(1) There shall be included only so much of the amount of the adjusted basis of such device, structure, machinery, or equipment (computed without regard to this section) as is properly attributable to construction, reconstruction, remodeling, or installation work with respect to, or the acquisition of such device, structure, machinery, or equipment on or after the date of enactment of this section and as is certified by the Secretary of Health, Education, and Welfare as being in aid of the collection at the source or the prevention or elimination of atmospheric pollutants and contaminants. "(2) After completion or acquisition of any device, structure, machinery. or equipment, or the completion of its reconstruction or remodeling, with respect to which a certificate under paragraph (1) has been made, any expenditure (attributable to such device, structure, machinery, or equipment and to the period after such completion or acquisition) which does not represent construction, reconstruction, remodeling, installation, or acquisition included in such certificate, but with respect to which a separate certificate is made under paragraph (1), shall not be applied in adjustment of the basis of such device, structure, machinery, or equipment but a separate basis shall be computed therefor pursuant to paragraph (1) as if it were a new and separate device, structure, machinery, or equipment. “(e) DEPRECIATION DEDUCTION.-If the adjusted basis of the device, structure, machinery, or equipment (computed without regard to this section) is in excess of the adjusted basis computed under subsection (d), the deduction provided by section 23 (1) shall, despite the provisions of subsection (a) of this section, be allowed with respect to such device, structure, machinery, or equipment as if its adjusted basis for the purpose of such deduction were an amount equal to the amount of such excess.

66 6

(f) LIFE TENANT AND REMAINDERMAN.-In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowable to the life tenant.

"(g) CROSS REFERENCE.-For special rule with respect to gain derived from the sale or exchange of property the adjusted basis of which is determined with regard to this section, see section 117 (g) (3).'

"(b) (1) Section 23 (t) of the Internal Revenue Code (relating to deductions from gross income) is amended by striking out and 124B' and inserting in lieu thereof '124B, and 124C.'

"(2) Section 117 (g) (3) of the Internal Revenue Code (relating to gains and losses from short sales, etc.) is amended by striking out 'section 124A (relating to amortization deduction)' and inserting in lieu thereof 'section 124A (relating to deduction for amortization of emergency facilities), section 124B (relating to deduction for amortization of grain storage facilities), and section 124C (relating to deduction for amortization of certain air pollution prevention facilities).'

"(3) Section 190 of the Internal Revenue Code (relating to allowance of amortization deduction in case of partnerships) is amended by striking out 'or grain storage facilities' and inserting in lieu thereof ‘, grain storage facilities, or air pollution prevention facilities.'

"(c) The amendments to the Internal Revenue Code made by ths section shall be applicable with respect to taxable years ending on and after the date of enactment of this section.

"SEC. 805. The authority of the Federal Housing Commissioner under the National Housing Act, as amended, shall be used to the fullest extent possible to encourage and assist home conversion and improvement loans which will aid smoke abatement and air pollution prevention.

"SEC. 806. For purposes of this title the word 'State' shall include all Territories of the United States, the Commonwealth of Puerto Rico, and the District of Columbia."

SUMMARY OF PROPOSED AMENDMENTS TO S. 2938, SMOKE ELIMINATION AND AIR POLLUTION PREVENTION

This proposed amendment would insert a new title VIII in S. 2938, the Housing Act of 1954, which would authorize Federal aid to smoke elimination and air pollution prevention and elimination through research, Federal loans, and special tax benefits.

The Secretary of Health, Education, and Welfare would administer the research program and certify eligibility for tax benefits provided by this title. The Housing and Home Finance Administrator would administer the loan program under the title.

Section 801 would declare that smoke elimination and air pollution prevention are important factors in the prevention and rehabilitation of slums and blighted areas and in the conservation of the health and property of the people of the United States.

RESEARCH

Section 802 would direct the Secretary of Health, Education, and Welfare to undertake and conduct a program of technical research and studies concerned with (a) the causes of air pollution and excessive smoke, (b) devices, structures, machinery, equipment, and methods (including methods of selecting and using fuels) for the prevention or elimination of excessive smoke and air pollution, and (c) guidance and assistance to local communities in smoke abatement and air pollution prevention and control. Up to $5 million would be authorized to be appropriated to carry out the research program.

The Secretary of Health, Education, and Welfare would be authorized to make contracts with any Federal, State, or local public agency or instrumentality, educational institution, or nonprofit agency or organization for the research and studies authorized by this section. Other general provisions necessary for the conduct of the research program would also be enacted by this section and the Secretary would be directed to disseminate the results of the research and studies in such form as may be most useful to industry and to the general public.

LOANS

Section 803 of the bill would provide for a program of Federal loans by the Housing and Home Finance Administrator in cooperation with private lending institutions to business enterprises to aid them in financing the purchase, installation, construction, reconstruction or remodeling of any smoke abatement or air pollution prevention device, structure, machinery,or equipment used or to be used in connection with the business activities of the borrower.

A loan would not be made by the Housing and Home Finance Administrator unless he determines that the purpose for which the loan is to be used would (1) substantially reduce the amount of smoke or air pollution or contamination in the community in which the device, structure, machinery, or equipment is located or to be located or (2) in conjunction with other proposed action in the community, substantially reduce the amount of such smoke pollution or contamination.

Also, the loan would not be made unless the borrower is unable to obtain such a loan from private sources on reasonable terms. Further, the section would provide that loans made may be made subject to the condition that, if at any time the business enterprise can obtain roads from other sources at interest rates as low as or lower than provided in the loan contract, it can do so with the consent of the Housing and Home Finance Administrator without waiving any rights to loan funds under the contract for the remainder of the life of the contract, and the borrower may pledge the loan contract as security for the repayment of the loan obtained from other sources. When used, this is in the nature of an insurance operation. It makes unnecessary the actual use of Federal funds. It has been used successfully in slum-clearance programs.

The loans shall be made in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participations, or otherwise. The loans made would be reasonably secured, and would be repaid within such period, not exceeding 20 years, as the Housing and Home Finance Administrator may determine. They would bear interest at a rate of not less than 1 percent plus the base annual rate specified by the Secretary of the Treasury as applicable to the 6-month period during which the contract for the loans is made.