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COMMITTEE ON SMALL BUSINESS
JOE L. EVINS, Tennessee, Chairman TOM STEED, Oklahoma
SILVIO O. CONTE, Massachusetts JOHN D. DINGELL, Michigan
J. WILLIAM STANTON, Ohio NEAL SMITH, Iowa
JOSEPH M. McDADE, Pennsylvania JAMES C. CORMAN, California
JOHN Y. McCOLLISTER, Nebraska JOSEPH P. ADDABBO, New York
WM. S. BROOMFIELD, Michigan WILLIAM L. HUNGATE, Missouri
TIM LEE CARTER, Kentucky FERNAND J. ST GERMAIN, Rhode Island HAMILTON FISH, JR., New York CHARLES J. CARNEY, Ohio
M. CALDWELL BUTLER, Virginia BOB BERGLAND, Minnesota
WILLIAM S. COHEN, Maine HENRY B. GONZALEZ, Texas
MILLICENT FENWICK, New Jersey JAMES M. HANLEY, New York
THOMAS N. KINDNESS, Ohio GUS YATRON, Pennsylvania
WILLIAM F. GOODLING, Pennsylvania
HENRY A. ROBINSON, General Counsel
Lois LIBERTY, Printing Editor
MYRTLE RUTH FOUTCH, Clerk
SUBCOMMITTEE ON SBA AND SBIC LEGISLATION
NEAL SMITH, Iowa, Chairman BOB BERGLAND, Minnesota
J. WILLIAM STANTON, Ohio HENI B. GONZALEZ, Texas
MILLICENT FENWICK, New Jersey JAMES C. CORMAN, California
WILLIAM F. GOODLING, Pennsylvania JAMES M. HANLEY, New York GUS YATRON, Pennsylvania JOHN BRECKINRIDGE, Kentucky WILLIAM L. HUNGATE, Missouri
THOMAS G. POWERS, Subcommittee Counsel
Gelfand, Norman, chairperson, Illinois Industrial Pollution Control
Kleppe, Hon. Thomas S., Administrator, Small Business Administra-
Love, Tom, president, Musket Oil Co., and president, National Oil
Jobbers Council, accompanied by Robert Bassman, counsel -
Trust & Savings Association, San Francisco, Calif., accompanied by
Robert H. Aldrich, L. F. Rothschild & Co., New York, NY -
Authority, State of New Jersey ---
Unruh, Hon. Jesse, treasurer, State of California-
Burton, Hon. John L., a Representative in Congress from the State of
California: Prepared statement.--
of California: Prepared statement-
Pollution-control revenue bonds and the tax-exempt bond market,
prepared by Merrill Ring, vice president, Bank of America -
Correspondence and material submitted for the record_Continued
Fenwick, Hon. Millicent, a Representative in Congress from the State
of New Jersey: May 28, 1975, letter from Robert S. Powell, Jr.,
executive director, New Jersey Economic Development Authority -
Financing Authority: Prepared statement with attachments---
Love, Tom, president, Musket Oil Co., and president, National Oil
Jobbers Council: Appendixes A and B accompanying testimony --
Trust & Savings Association, San Francisco, Calif.: Various charts
of Texas: Prepared statement-
Authority, State of New Jersey: Table— New Jersey manufacturing
firms by employment-size class, 1973 and other attachments...
New Jersey: Prepared statement-
Iowa, and chairman of the Subcommittee on Small Business Admin-
SBA ASSISTANCE FOR AGRICULTURAL CONCERNS
AND TO MEET POLLUTION STANDARDS
TUESDAY, MAY 20, 1975
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON SMALL BUSINESS
COMPANY LEGISLATION OF THE
Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 2359, Rayburn House Office Building, Hon. Neal Smith (chairman of the subcommittee) presiding.
OPENING STATEMENT OF CHAIRMAN SMITH
Mr. SMITH. The subcommittee will come to order.
This morning's hearing represents the beginning of an extensive study and investigation of small business problems which are being conducted for the first time by a small business subcommittee with jurisdiction to consider and report legislation. As part of this broad overview of small business problems, we will be looking at the effectiveness of small business legislation, primarily that contained in the Small Business Act.
The first bill to be considered and reported by this subcommittee, and subsequently by the full Small Business Committee, was one to authorize the granting of relief to small businesses involved in fixedprice contracts with the Federal Government, who suffered substantial economic loss due to inflation.
This legislation was unanimously reported by the subcommittee and subsequently accepted by the entire House of Representatives which, on April 22, 1975, passed H.R. 5541 by a vote of 402 to 0.
Other legislation pending before the subcommittee which we intend to examine and consider during the next several months concerns small business loans to comply with pollution control standards, loans to agribusiness, and protection against manipulation in livestock marketing.
Also, we will be examining SBA programs and restrictions such as loan ceilings and limitations, disaster loans, displaced business loans, the effectiveness of SBA certification of competency of small business contractors, the effectiveness of SBA assistance reaching the "mom and pop” operations, and a host of others.
I am hopeful that we can, and will, consider these matters as completely and effectively as the emergency relief bill passed by the House, and that we can achieve the same legislative results.
This morning's hearings are primarily concerned with problems of small businesses which are required to make substantial investments in equipment to meet water and air pollution standards mandated by Federal, State, and local governments. These standards must be met by a vast array of businesses ranging from farmers and ranchers to heavy industry.
The Small Business Act, as implemented by SBA regulations, provides specific assistance under two programs. Section 7(b)(5) authorizes loans to meet requirements imposed by State or Federal laws such as the Clean Air Act. Section 7(g) authorizes loans to meet water pollution control requirements mandated by the Federal Water Pollution Control Act.
It has been estimated that the cost to small business of meeting these pollution requirements will be in the range of $7 to $10 billion over the next 10 years. It has also been estimated that big business will need some $20 billion to meet these requirements, and thus, it is highly unlikely that the private sector will, under the existing circumstances, choose to also provide the capital needed by small business.
We have received information that the SBA, under current SBA programs, is not supplying the needed capital. These specific loans for water and air pollution equipment could be funded by SBA as a part of the nonphysical disaster loan program which also encompasses other loan programs such as product disaster loans, strategic arms limitation loans, and energy loans. The minor role to date of these pollution loans is shown by the fact that during fiscal year 1975, SBA programed only $110 million to cover the entire nonphysical disaster loan program, and to date, this fiscal year, has made only 12 loans for water pollution equipment totaling $5.4 million.
This morning we are pleased to receive testimony about the needs of small business, and the effectiveness of existing programs in this area, and on proposals as to how the Federal Government may provide needed assistance in order to permit these concerns to comply with the required pollution standards.
Our first witness will be Hon. John J. McFall. Mr. McFall is very familiar with problems facing small business in meeting pollution requirements, and has introduced legislation to provide additional Federal assistance.
We are very, very happy to have Mr. McFall here. He has long been interested in small business problems.
Before calling upon Mr. McFall, we will call upon the ranking minority member, Mr. Conte.
OPENING STATEMENT OF HON. SILVIO O. CONTE
Mr. CONTE. I want to commend you, Mr. Chairman, for calling these hearings. I am pleased to be able to participate in the hearings. As a longtime advocate of both the small business community and a cleaner environment, I wholeheartedly endorse and support the efforts of this subcommittee to find a way to help our hard-pressed small firms to carry their share of the burden of cleaning up the air and water.
The Congress mandated that the cleanup take place as rapidly as possible. Unfortunately, the combination of inflation and recession has made the cost of a cleanup much greater and much more difficult to bear than was originally anticipated.