HOUSING ACT OF 1954 Air Pollution Prevention Amendment TUESDAY, APRIL 13, 1954 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to recess, in room 301, Senate Office Building, at 10:15 a. m., Senator Homer E. Capehart (chairman) presiding. Present: Senators Capehart, Bennett, and Frear. Also present: Representative Hiestand. The CHAIRMAN. The committee will please come to order. I might say that these hearings are being held pursuant to an amendment Senator Kuchel and I introduced with respect to the elimination of smoke and prevention of air pollution, as part of the housing bill which we are considering at the moment. We introduced the amendment and we are holding 3 days of hearings on it for the purpose of focusing the attention of the American people on the billions and billions of dollars of waste and loss each year that we suffer as a result of smoke. Also, we feel this ought to be part of the housing bill, particularly the slum-clearance section of the housing bill and the public-housing section of the housing bill, because it is rather hard to eliminate slums and blighted areas without eliminating the smoke and other contaminants which contribute to the creation of slums. It doesn't do much good to build a new home, or a series of homes in a suburb, and then have some factory or a section of the town throwing smoke down upon them, so that in a matter of 6 months you can't tell whether the houses were originally red, white, or blue. What we want to do, if we can, is to find some way to eliminate smoke and other contaminants that pollute air. We recognize, of course, that many aspects of the problem are local. We can't do much with it here in Washington, unless the cities are enthusiastic about it and pass the necessary ordinances and make the requisite effort themselves. But we feel that there are some areas in which the Federal Government properly can assist. Smoke is an interstate problem. Smoke doesn't pay much attention to State lines. Where cities are close together, the smoke will carry from one city to the other. So it is a matter that the Federal Government has an interest in, just as it has in flood control for example. But it is primarily a local problem. We recognize that. We are by this amendment attempting to encourage the mayors and city councils of all cities in the United States to do something about this acute problem. We hope some good will come of our hearings. We would like to do something to encourage people and city officials to take whatever steps are necessary to eliminate smoke and air pollution. I will insert at this point in the record the statement I made on the introduction of the amendment on the floor, the amendment itself, and a summary of provisions of the amendment. (The documents referred to follow :) Mr. President, for myself, and Mr. Kuchel, I introduce an amendment which I intend to offer to S. 2938, the Housing Act of 1954, now pending before the Senate Banking and Currency Committee. The purpose of this amendment is twofold: To encourage and assist individuals, industries, and communities to solve their air pollution problem in order to conserve home values, improve health, and preserve the essentials for good environments needed for community living. Essentially, by the very nature of the problem, the air pollution nuisance is interstate in character. Its control, however, is a local problem. By that I mean any program to be effective must originate at the local level and have the full and united support of all segments of the local community. Certain aspects, however, transcend city and State lines. In fact, polluted air knows no respect for corporate limits or State lines. Consequently, it appears that there is a very proper role for the Federal Government to play in any anti-air-pollution campaign. The provisions in the amendment are threefold: 1. Rapid tax amortization of air pollution control facilities constructed by industry to provide tax relief to build control facilities when they are built in conformance with State and/or local law. As written, the tax writeoff is authorized over a period of 5 years. This provision, it is believed, will encourage industry to install air pollution abatement equipment and assist those communities with active programs. Such equipment is frequently very costly and for the most part industry recovers nothing in the way of lower costs of operation. 2. A loan program by HHFA in cooperation with private lending institutions is provided for business enterprises which install air-pollution equipment when financial assistance is not otherwise available on reasonable terms. For the homeowner, FHA loan insurance may be used for purposes of home conversion and improvements which will aid smoke abatement and air-pollution prevention. 3. A program of technical research and study concerned with (a) the cause of air pollution, (b) devices and methods for the prevention or elimination of air pollution, and (c) guidance and assistance to local communities in smoke abatement and air-pollution prevention and control. With the incentive provided by the proposed bill, it is hoped that cities and States will thereby be encouraged to enact legislation contemplated to reduce air pollution immediately and ultimately to eliminate air pollution. Insofar as I am aware, this bill provides the first opportunity for congressional consideration of air pollution on a comprehensive basis, including all of its component parts. It provides a forum whereby the entire problem may be explored. Certain phases of the solution may involve an overlapping of committee jurisdiction. Even so, it is thought wise to include in the amendment all aspects of the problem in order that testimony may be directed to every facet at one and the same time. It would be unwise for 2 or 3 committees of the Senate to consider separately 1 or more aspects of the problem, because any solution of this highly complex problem can be achieved only by viewing all factors as a part of the whole. Jurisdictional matters lend themselves to solution and can be ironed out readily in the event favorable consideration is extended by the Senate Banking and Currency Committee to the suggested role of the Federal Government. The Housing Act of 1954, S. 2938, contains provisions to encourage and assist local communities in slum clearance. It is well and good to eliminate slums. It is shortsighted, however, to permit air pollution to continue because, unless abated, we can expect the newly constructed homes of today to become the slums of tomorrow-as surely as blight follows decay. An educated guess places the polluted-air costs to the people of the United States at about $5 billion a year. The extent of the damage to merchandise, buildings, homes, and home foliage alone is said to be nearly $1 billion a year. 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.] 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 |