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.

"(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.

The base annual rate would be determined by the Secretary of the Treasury by estimating the average market yields during the month of May or November next preceding the 6-month period on Federal marketable bonds having a remaining maturity of 15 or more years. The present base annual rate is 2% percent, which would, therefore, provide for an interest rate at this time on the loans authorized by this section of 3% percent or such higher rate as the Housing and Home Finance Administrator could establish in his discretion.

The total amount of loans made by the Housing and Home Finance Administrator pursuant to this section would not be permitted to exceed $50 million outstanding at any one time. Funds would be authorized to be appropriated to carry out the loan program and the loan funds would revolve.

To assure national distribution of the loans the section would provide that not more than 10 percent of the funds provided shall be expended in any one State.

SPECIAL TAX BENEFITS

Section 804 would amend the Internal Revenue Code to permit for tax purposes the rapid amortization (over a period of 5 years) of devices, structures, machinery, or equipment for the prevention or elimination of air pollution. This special tax benefit would be available, however, only to the extent that the property which would be amortized at this accelerated rate was constructed, remodeled, installed, or acquired on or after the date of enactment of this section and to the extent that the Secretary of Health, Education, and Welfare certifies that it is in aid of the prevention or elimination of air pollution.

FHA LOAN INSURANCE

Section 805 would provide that the authority of the Federal Housing Commissioner shall be used to the fullest extent possible to encourage and assist home conversion and improvement loans which would aid smoke abatement and air pollution prevention.

DEFINITION OF "STATE"

In order to make the provisions of the title applicable to all the States, Territories of the United States, the Commonwealth of Puerto Rico, and the District of Columbia, the word "State" as used in the title would be defined to include all of the jurisdictions named.

ADMINISTRATIVE PROVISIONS

Provisions necessary to the administration of the title would be also enacted by this title.

The CHAIRMAN. I have a copy of an ordinance to control and regulate air pollution; adopted by the Council of the City of Philadelphia. That city is operating under this ordinance. It seems very complete and might well serve as a model for ordinances for other cities.

Without objection, it will be inserted in the record at this point. (The ordinance referred to follows:)

(Bill No. 366-1953.)

AN ORDINANCE

To control and regulate air pollution in the City of Philadelphia, defining the powers and duties of the Department of Public Health, the Department of Licenses and Inspections and of the Air Pollution Control Board; prescribing fees for permits; providing for administration and enforcement and fixing penalties; and repealing the ordinance approved June 25, 1948, and cited as "The Air Pollution Control Ordinance of 1948"

The Council of the City of Philadelphia hereby ordains:

SECTION 1. Legislative Findings.

The Council of the City of Philadelphia finds that the pollution of the air is detrimental and harmful to the health, comfort, living conditions, welfare and safety of the inhabitants of the City of Philadelphia and injurious to their property, and it is necessary to provide for the greater control and more effective regulation of air pollution and air pollution nuisances caused by the emission or escape of dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof.

SECTION 2. Definitions.

(a) "Person.”—An individual, partnership, corporation, or association including those acting in a fiduciary or representative capacity whether appointed by a court or otherwise and including any governmental unit, agency, officer or employee as to whom the City of Philadelphia has the power to legislate. Whenever used in any clause prescribing or imposing a penalty the term "Person" as applied to partnerships or associations shall include the partners or members thereof and if applied to corporations, the officers thereof. The singular shall include the plural and the masculine shall include feminine and neuter.

(b) (1) "Dust."-Solid particles projected into the air and capable of temporary suspension in air or gas.

(2) "Fume."-Solid particles commonly formed by the condensation of vapors from normally solid materials.

(3) "Gas."-Normally formless fluids which tend to occupy space or enclosure completely and uniformly at ordinary temperatures and pressures.

(4) "Mist."-Very small airborne droplets of materials that are ordinarily liquid at normal atmospheric temperatures and pressures. Mist shall include fog.

(5) "Odor."-Smells or aromas or stinks, which are commonly recognized as offensive or objectionable, or which are very unpleasant to persons possessing normal olfactory senses, or which tend to lessen human food and water intake, interefere with sleep, upset normal appetite, produce irritation of the upper respiratory tract, or create symptoms of nausea, or which by their inherent chemical or physical nature, or method of processing are detrimental or dangerous to health, or which are of a quantity or character that violates any of the provisions of this ordinance or any of the regulations promulgated pursuant thereto. Odors and smells are used herein interchangeably.

(6) "Smoke."-The extremely small solid particles produced by incomplete combustion of organic substances and includes but is not limited to particles, flyash, cinders, tarry matter, unburned gases, soot or carbon, and gaseous combustion products.

(7) "Vapor."-The gaseous phase of substances that are either liquid or solid in their commonly known state, and may be changed to the solid or liquid form by increasing the pressure, decreasing the temperature, or applying both simultaneously.

(c) (1) "Air Pollution."-The emission or escape of dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof, in a quantity and of a character which constitutes a direct health hazard or detriment, or the contamination of the air in any manner detrimental or harmful to the health, comfort, living conditions, welfare and safety of the inhabitants of the City of Philadelphia. (2) "Air-Pollution Nuisance."-The emission or discharge into the open air of dust, fume, gas, mist, odor, smoke or vapor, or any combination thereof, of a character and in a quantity which as to any group of persons interferes with their health, repose or safety or causes severe annoyance or discomfort, or tends to lessen normal food and water intake, or produces irritation of the upper respiratory tract, or produces symptoms of nausea, or is offensive or objectionable, or both, to normal persons because of inherent chemical and physical properties, or causes or is likely to cause injury or damage to real or personal property of any kind, or which interferes with normal conduct of business, or is detrimental or harmful to the health, comfort, living conditions, welfare and safety of the inhabitants of the City of Philadelphia.

(d) "Minor Repairs."-Repair or alteration of any part of any existing installation, equipment or device which does not materially alter the quantity or character of discharge into the open air of dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof.

(e) "Installation, Equipment, or Devices."-Any assembly of elements or components the operation of which does or may directly or indirectly cause air pollution or an air-pollution nuisance

(f) "Household Appliances."-Any electric or gas operated unit commonly used in a home or other dwelling other than incinerators, heating systems, or hot water heating systems.

(g) “Fuel Burning Equipment."-Any device, machine, mechanism, or structure used in the process of burning fuel or combustible material.

(h) "Charter."-The Philadelphia Home Rule Charter.

SECTION 3. "Unlawful Conduct."-It shall be unlawful for any person: (a) To cause, emit or allow the emission or escape into the open air from any structure, machine, facility, plant, premises or ground, including parking lots, of dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof, of a

quantity or character which constitutes or which in conjunction with other persons creates air pollution or an air pollution nuisance, or violates any of the regulations which may be prescribed by the Air Pollution Control Board.

(b) To construct, reconstruct, convert, operate, add to or alter any installation, equipment or device, or the appurtenances thereto, which by its operation or maintenance will emit or cause or allow the emission or escape into the open air of dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof, without a permit as required by Section 4 hereof secured from the Department of Licenses and Inspection, and without eliminating air pollution or an air pollution nuisance.

(c) To burn garbage, refuse, waste material, cars, vehicles, or parts thereof, or any other material in an open fire except at such places and under such safeguards as to the creation or emission of air pollution or an air pollution nuisance as may be prescribed by the Air Pollution Control Board. SECTION 4. "Installation Permits."

(a) Any person desiring to construct, reconstruct, convert, add to or alter or replace, except for minor repairs, any installation, equipment or device, or appurtenances thereto, that produces, controls or causes or may cause air pollution or an air pollution nuisance, shall secure a permit therefor from the Department of Licenses and Inspections and shall pay a fee therefor in accordance with the established schedule of fees set forth in Section 8 of this ordinance.

(b) Any person applying for such permit shall submit to the Department of Licenses and Inspections plans and specifications of the work to be done insofar as air pollution or an air pollution nuisance may be concerned and such other information as may be required by the Department of Licenses and Inspections. (c) A separate permit shall be obtained for each complete unit of boiler or fuel burning equipment. In the case of a heating boiler, warm air furnace or water heater with integral burner, oil burner or stoker, only one permit shall be obtained from the combined unit.

(d) If any installation is not started within one year of the date of issuance of a permit therefor, the permit shall be null and void, and any fee paid shall be forfeited.

(e) Issuance of a permit shall not exempt any person from prosecution for violation of this ordinance or the regulations issued under it, if the actual operation of the installation, equipment or device for which the permit was issued creates or results in air pollution or an air pollution nuisance.

(f) The provision of this permit section shall not apply to the construction, reconstruction, conversion, alteration, replacement or installation of any household appliance.

(g) The provisions of this permit section shall not apply to the construction, reconstruction, conversion, alteration, replacement or installation of motor vehicles or other equipment used on highways.

(h) The provisions of this permit section shall not apply to any building or structure used exclusively for dwelling purposes and containing less than three dwelling units.

SECTION 5. "Powers and Duties of the Department of Public Health."

The Department of Public Health shall have the following power and duties: (a) To investigate complaints, make observations of smoke and other air polluting conditions and air pollution nuisances and require the necessary and proper steps to minimize the effect, hazard or nuisance therefrom.

(b) To examine applications, plans and specifications for the construction, reconstruction, conversion, addition or alteration of any installation, equipment or device and any equipment pertaining thereto, that might or could produce air pollution or an air pollution nuisance, and to inspect installations and equipment for which a permit has been issued to see that installation is made in accordance with the permit, unless such functions are assigned by the Administrative Board of the City of Philadelphia to the Department of Licenses and Inspections of the City of Philadelphia in which case, the function shall be exercised by that Department.

(c) To inspect from time to time any installation, equipment, devices and appurtenances thereto that may, can or does cause air pollution or an air pollution nuisance, unless such functions are assigned by the Administrative Board of the City of Philadelphia to the Department of Licenses and Inspections of the City of Philadelphia in which case the function shall be exercised by that Department.

(d) To recommend promptly to the Department of Licenses and Inspections the approval, modification or disapproval of an application for a permit.

(e) To prescribe the requirements for any permit that may be required under this ordinance and its regulations.