would set the overall maximum interest rate ceiling charged on the loans by the National Environmental Bank to State and local governments at 3% rather than 5%. This interest reduction will allow mayors and governors throughout the Nation to at last make some real inroads into this environmental financing gap. Our Nation's awareness of environmental problems has been growing rapidly in recent years. But our costs have also been growing rapidly while the ability of States and cities to financially meet these needs has gone down. The cost of cleaning up our environment has been placed at $71 billion. State and local taxes have increased 262 percent over the last twenty years, and yet State and local debts have increased more than 454 percent. And yet in spite of this high cost and inability to finance, citizens across the Nation are crying out for clean air and clean water. I believe these facts make a new program of Federal assistance to State and local governments imperative. Mr. Chairman, I believe the environmental financing act before your committee is the kind of program that the enviromental problems of our country require. I urge the committee's favorable consideration of this proposal. The CHAIRMAN. The committee will stand in recess until 10 o'clock tomorrow morning at which time these hearings will be concluded. (Whereupon, at 11:45 a.m., the hearings were adjourned, to reconvene at 10 a.m., Thursday, May 18, 1972.) FEDERAL FINANCING AUTHORITY THURSDAY, MAY 18, 1972 U.S. SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS, Washington, D.C. The committee met at 10:05 a.m., pursuant to call, in room 5302, New Senate Office Building, Senator John Sparkman, chairman of the committee, presiding. Present: Senators Sparkman and Proxmire. The CHAIRMAN. Let the committee come to order, please. I think we should get started because we have got a very heavy schedule. Senator Magnuson is our first witness this morning. This, of course, is a continuation of the hearings that we have been holding on S. 1015, S. 1699, S. 3001, and S. 3215. S. 1015 proposes to establish an environmental financing authority to assist in the financing of waste treatment facilities, S. 1699 seeks to establish a national environmental bank, S. 3001 seeks to establish a Federal financing bank, and S. 3215 seeks to expand the market for municipal securities. We are holding hearings on all of these bills, because there is a relationship between them. Senator Magnuson, of course, as everyone knows, is chairman of the Commerce Committee. We welcome you here this morning. Senator PROXMIRE. Mr. Chairman, I have a very brief 90 second statement. I want to thank the chairman for calling these timely hearings on municipal financing and other bills pending before the committee. Also I want to apologize to the previous witnesses for not being able to attend the hearings on Monday and Wednesday. Unfortunately, I was required to chair hearings in my Appropriations Subcommittee on Foreign Operations. I am encouraged by the emerging consensus behind my proposal to provide municipalities with an alternative to the present tax-exempt market. In my view, this legislation is quite similar to the administration's revenue sharing bill. We are seeking to design a comprehensive supplement to the growing hodgepodge of separate Federal assistance programs. We need an alternative which will minimize Federal control and leave the determination of priorities to State and local governments. I am hopeful that these hearings can lead to a constructive action in the current session of Congress. Thank you, Mr. Chairman. STATEMENT OF WARREN G. MAGNUSON, U.S. SENATOR FROM THE STATE OF WASHINGTON Senator MAGNUSON. Mr. Chairman, I have just come from a morning breakfast with several county officials meeting with Senator Long and others on the prospects of the revenue sharing bill. And, as the Senator from Wisconsin mentioned, revenue sharing goes almost hand in hand with environmental financing legislation. It also is designed to help States and local governments meet their environmental obligations. Although the committee is considering four separate bills, I am addressing myself to S. 1699, which has the bipartisan cosponsorship of 29 of our colleagues in the Senate. This bill, the National Environmental Financing Act, is designed to help bridge the gap between growing environmental needs and a growing inability of States and cities to finance solutions to these problems. One major reason why local government agencies cannot attack environmental problems is the high cost of borrowing funds to finance needed projects. And, Mr. Chairman, that is the specific problem which my proposal attacks. This legislation is not just a Federal giveaway program. Instead, this measure would make low-interest loans available to help State and local governments pay their en vironmental bills. Mr. Chairman, when I first introduced the National Environmental Financing Act in the 91st Congress, it was intended to be a working paper. When I reintroduced the updated draft of this legislation on April 29 of last year, it was again meant to provide the groundwork · for dealing with a problem area. Since that time, support and encouragement have been widespread. Scores of private citizens, businessmen, government officials, and members of the academic community, the media, have responded favorably to the bill. For example: The Air Pollution Control Association, one of the oldest and most active groups in the fight for clean air, wrote-and I quote "The Environmental Financing Act could play a significant role in the battle against air pollution." The Sport Fishing Institute, one of the most potent forces for clean water, has announced its formal endorsement of the bill. And the Sierra Club, the Federation of American Scientists, and Citizens for Clean Air have also gone on record as supporting the bill. Mr. Chairman, if I may, I would like to have these letters of endorsement placed in the hearing record at this point. The CHAIRMAN. Without objection, that will be done. (The letters follow:) Hon. WARREN G. MAGNUSON, Washington, D.C. AIR POLLUTION CONTROL ASSOCIATION, MY DEAR SENATOR MAGNUSON: Thank you for your letters dated October 28, 1970 and October 29, 1970, in which you request the reaction of the Air Pollution Control Association to your Environmental Financing Act. As an organization with a general interest in improving the environment, we would certainly support the purposes and intent of your proposed legislation. I think the main thrust of your suggestion would be to assist in construction of waste treatment plants, water purification and solid waste disposal programs which usually require capital outlay by government entities. On the other hand, the planning, training, and ongoing enforcement of air pollution standards is directly contingent on the ability of state and local governments to finance the nonfederal share of existing grant programs. Since these governments are faced with earmarked funds and uncontrollable demands on strained tax bases, the Association believes that your Environmental Financing Act could play a significant role in the battle against air pollution. Therefore on behalf of the Air Pollution Control Association, I am pleased to endorse and support the principles of your Environmental Financing Act. Sincerely yours, D. A. JENSEN, President, Air Pollution Control Association. SPORT FISHING INSTITUTE, Washington, D.C., November 3, 1970. Senator WARREN G. MAGNUSON, DEAR SENATOR MAGNUSON: Thank you for your letter of October 28, about your new proposal for the Environmental Financing Act of 1970. I appreciate your thoughtfulness in forwarding by supplementary note a copy of the text (S. 4465) of the proposed Act and your accompanying introductory remarks. I believe, Senator, that your proposal is a constructive one, reflective of the kind of imaginative new thinking that will be required if the promise of the new environmental thrust is to become implemented in a significant manner. This is a problem that has greatly disturbed the conservation community as well as many farsighted civic leaders and legislators like yourself. I cannot at this moment commit the Institute to support of S. 4465 because of a pending meeting of the SFI Directors. However, this kind of special funding approach will be the subject of some discussion and I anticipate adoption of a generalized policy under which such support can be forthcoming. I shall be pleased to communicate with you further on this matter following any action in this regard on the part of the Institute's Board of Directors. Sincerely yours, RICHARD H. STROUD, Executive Vice President. SPORT FISHING INSTITUTE, Washington, D.C., November 17, 1970. Senator WARREN MAGNUSON, Washington, D.C. DEAR SENATOR MAGNUSON: I am writing to you further pursuant to my letter of November 3, in response to your letter of October 28 with respect to our views on your bill S. 4465, to establish a National Environmental Bank and Trust Fund. I can now assure you that the principle of your proposal has the support of the Sport Fishing Institute, although it is our view that capitalization ought to be at a level several times the amount you are proposing. Enclosed are copies of two Resolutions of this Institute's Board of Directors that bear on this issue. The first of these, adopted in May 1969, proposes establishment of a CLEAN WATER TRUST FUND having annual revenues of at least one billion dollars for the particular environmental facet of clean water, alone. The second of these, adopted in November 1970, advocates creation of special imaginative new financing devices to provide needed environmental defense funds-by implication, thereby supporting your proposal (S. 4465) in principle. Sincerely yours, RICHARD H. STROUD, Executive Vice President. 78-443 O 72 12 SIERRA CLUB, Senator WARREN G. MAGNUSON, U.S. Senate, Old Senate Office Building, San Francisco, December 14, 1970. DEAR SENATOR MAGNUSON: At its most recent meeting, the Sierra Club Board of Directors adopted the enclosed resolutions. I thought that you would be particularly interested in the items indicated. Sincerely yours, MICHAEL MCCLOSKEY, Executive Director. RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS OF THE SIERRA CLUB, DECEMBER 5-6, 1970 Environmental Protection Act (Hart-McGovern Bill).-The Sierra Club supports the passage of legislation that would clearly establish citizens' rights to sue polluters to maintain a clean environment, similar to S. 3575 (the Hart-McGovern bill) introduced in the 91st Congress. Citizens' rights to sue should be based on a theory that their rights to a clean environment rise out of a public trust. Public Access to National Environmental Policy Act Reports.-The Sierra Club calls upon the President and his Administration to comply with the National Environmental Policy Act and recommends that environmental impact studies made under Section 102 (2) (C) be released and made available to the public upon receipt by the Council on Environmental Quality in order to carry out the spirit of the law. Environmental Financing Act.-The Sierra Club supports legislation that would establish an environmental trust fund, an environmental bank, and an environmental savings bond program, with the qualification that such a program would be strictly supplemental to full funding under the various federal environmental programs and would not be used as a substitute for adequate appropriations. Environmental Data Bill.-The Sierra Club supports passage of legislation that would create a National Environmental Data System. Federal Highway Trust Fund Extension.-The Sierra Club urges that the Federal Highway Trust Fund be terminated. Mineral King Campaign (California).—The Sierra Club reaffirms its resolution to save Mineral King and to enlarge Sequoia National Park by the addition of Mineral King, the Kern Plateau, and other contiguous areas of park quality. Golden Gate National Recreation Area (California).—The Sierra Club supports the concept of a Golden Gate National Recreation Area, preserving the Headlands of the Golden Gate and coastal open space of the San Francisco Bay Region, encompassing those parts of the military forts (Funston, Miley, Mason, Presidio, Barry, Baker, Cronkhite) which have for their highest and best use the provision of public recreation, and those parcels of state, city, and private land which would enlarge these federal lands to more than 10,000 acres to create an outstanding National Recreation Area. Mt. Whitney-John Muir Wilderness (California).—The Sierra Club opposes the revision of the boundaries of the John Muir Wilderness to exclude certain approach areas, particularly the trail to Mt. Whitney. California State Parklands (California).-The Sierra Club opposes intensive development by the California State Department of Parks and Recreation in those areas under their jurisdiction of high natural or archeological value. Yosemite Wilderness Plan (California).-The Sierra Club supports in principle the proposal for a Yosemite National Park Wilderness prepared by its Tehipite Chapter. FEDERATION OF AMERICAN SCIENTISTS, Hon. WARREN G. MAGNUSON, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: Thank you for sending me a copy of S. 4465, the National Environmental Financing Act of 1970, with your covering letter of October 28, asking for comments or suggestions. |