5 13 1 shall apply to livestock owned by such meatpacker or such 2 persons or subject to their control directly or indirectly by 3 contract, purchase order, option, or other arrangement. 4 (b) It shall be unlawful for any meatpacker or meat 5 marketer engaged in commerce to offer for sale to or to pur6 chase from a meatpacker or meat marketer, whether by 7 contract, business order, or by any other transaction, during 8 any calendar week more than one hundred head of live 9 cattle or calves, three hundred head of live swine, or three 10 hundred head of live sheep or lambs which were owned 11 prior to the date of sale for a period in excess of twenty 12 days by such meatpacker or meat marketer or by any person who owns or controls more than 5 per centum of 14 the voting power or control of such meatpacker or meat 15 marketer or by any subsidiary or affiliate in which such 16 meatpacker, meat retailer or other person owns or controls a 17 total of more than 5 per centum of the voting power or con18 trol thereof. The prohibition in this subsection shall apply to 19 livestock owned by such meatpacker or meat marketer or 20 such persons or subject to their control directly or indirectly 21 by contract, purchase order, option or other arrangement; 22 but it shall not be deemed to prohibit any such meatpacker, 23 meat marketer, or other person from making, executing or 24 fulfilling a contract of sale of any commodity for future de25 livery on a board of trade which has been designated as a 6 1 contract market by the Commodity Futures Trading Com 2 mission. 3 (c) It shall be unlawful for any meatpacker or meat 4 marketer engaged in commerce to contract for the forward 5 delivery of livestock if such contract authorizes, directly 6 or indirectly, such meatpacker or meat marketer to select 7 the date for the delivery of such livestock unless such date 8 is within a period of twenty consecutive calendar days. 9 13 SEC. 5. (a) Any person knowingly violating any pro10 vision of section 4 of this Act shall be fined not more than 11 $50,000, or more than $100 per head of cattle or calves and 12 $25 per head of swine, lambs or sheep slaughtered, offered for sale or purchased, or contracted for forward delivery 14 in excess of the maximum number permitted by such sec15 tion, whichever amount is greater. A violation by a corpora16 tion shall also be deemed to be a violation by the individual 17 directors, officers, receivers, trustees, or agents of such 18 corporation who authorized, ordered or performed any of 19 the conduct constituting the violation in whole or in part. (b) A violation of this Act which occurs in more than one week shall be considered a separate violation for each 20 21 22 calendar week during which a violation occurs. 23 SEC. 6. For the purposes of the Act entitled "An Act 24 to supplement existing laws against unlawful restraints and 25 monopolies, and for other purposes", approved October 15, 7 1 1914 (38 Stat. 730), and the Federal Trade Commission 2 Act, this Act shall be considered to be an antitrust law. 3 SEC. 7. If any provision of this Act or the application 4 thereof to any person or circumstance is held invalid, the 5 validity of the remainder of this Act and the application of 6 such provision to other persons or circumstances shall not 7 be affected thereby. 8 SEC. 8. The effective date of this Act shall be July 1, 9 1976. APPENDIX F-LETTER FROM ROBERT G. RYAN, DIRECTOR, OFFICE OF LEGISLATION, ENVIRONMENTAL PROTECTION AGENCY, REGARDING IMPACT ENVIRONMENTAL LEGISLATION ON SELECTED SMALL BUSINESSES OF U.S. ENVIRONMENTAL PROTECTION AGENCY, Mr. THOMAS G. POWERS, DEAR MR. POWERS: During Mr. James L. Agee's testimony before the House Committee on Small Business on July 15, 1975, a number of questions were raised. Central to these were requests for legislative recommendations for alleviating the impact of pollution standards on small business. In addition, questions were posed about the magnitude of pollution control expenditures required for small firms. Before concentrating on the particular problems of small business, it is worth taking a look at the overall economic effects of pollution controls. A recent study completed by Chase Econometrics indicates that environmental controls will have a mild effect on te overall economy. The Consumer Price Index should show an aggregate increase of about 0.3 percent due to pollution control expenditures through the end of 1982. Further, the study indicates a very small net change in either GNP or unemployment. Chase forecasts that unemployment would be reduced to pollution controls by up to 0.4 percent in 1975, but that it would be increased by 0.4 percent in 1979. In general, employment and business activity are increased in the early years by requirements to invest in pollution control, but they are somewhat reduced after pollution control expenditures have been made. From this determination that environmental efforts will have limited and mixed effects on the overall economy, the particular impacts and costs for small business can be brought into proper focus. The balance of this response will review the current programs for alleviating the adverse impacts of pollution control requirements on small business and conclude with EPA's comments on assistance programs. IMPACT OF POLLUTION CONTROLS ON SMALL BUSINESS Most of the impacts of the Federal pollution control program have tended to be concentrated in the capital intensive industries characterized by large firms such as electric utilities, petroleum, and steel. Fortunately a large portion of small business activity is in sectors which do not have the bulk of the nation's pollution control problem. However, in those areas where small businesses do have significant pollution control expenditures, they generally cannot take advantage of the economies of scale for pollution control costs experienced by larger firms. Furthermore, they are also often at a considerable disadvantage in financing pollution control facilities. However, if financing terms allow repayment over a sufficiently long period, annual payments can be reduced to manageable levels for most small firms. To give some indication of the magnitude of the financial requirement, we have assembled cost of compliance figures for selected industries which have: a structure characterized by small firms; a significant pollution control problem; and regulations which have already been promulgated (or proposed) and for which we have cost of compliance estimates. The table following this page lists the estimated costs for bringing certain industrial categories characterized by small businesses into compliance with water and air pollution control laws. In geneal, a category was considered to consist of small businesses when 40 percent of the workers within the industry were employed by firms with less than 250 employees. In most cases this definition also meant that at least 90 percent of the firms in the category were small (had less than 250 employees). The figures overstate the costs for small businesses in two ways: By using the total cost for a category when some of the category is comprised of large firms. By using cost estimates for installing levels of controls which in some cases were in place several years ago. These figures understate the costs for small business in two ways: By excluding categories which have some small business firms but which are dominated by larger firms. By excluding categories for which EPA does not yet have regulations or cost estimates. However, this compilation of existing cost estimates probably indicates the rough magnitude sufficiently to evaluate small business financing requirements. EXISTING MEASURES FOR ALLEVIATING ADVERSE ECONOMIC IMPACTS Throughout the development of environmental regulations EPA considers potential economic impacts. In those industries where an excessive impact on small business has been ascertained, one alternative utilized by EPA has been to develop separate standards applicable to small producers. The following is a list of six industries where Effluent Guidelines have been modified specifically for small producers: Dairies. Electroplating. Leather Goods. Meat Processing and Rendering. After the regulations are developed and in force there are several assistance programs to further lessen impacts. The EPA construction grant program provides some indirect financial assistance to firms that connect to municipal wastewater treatment facilities. Firms discharging into municipal systems pay annual charges which cover only operating maintenance, and capital recovery payments; they do not cover interest charges for the capital construction costs. Hence, firms which discharge into municipal systems do not need to use external sources of capital, and the firms can benefit from the economies of large scale treatment which are experienced by municipal systems. There are also currently a number of Federal, State, and local tax regulations that enable firms to reduce their tax payments in conjunction with the installation and operation of pollution control equipment. Subsidies available under Federal tax regulations are as follows: Pollution Control Revenue Bonds.-presently enable large creditworthy companies to save up to two percentage points on interest rates for financing pollution control expenditures. Accelerated Depreciation.-provisions of IRS No. 169 allow investors to depreciate in 5 years the first 15 years of depreciable life of pollution control equipment. Investment Tax Credit.-permits deducting 10 percent of the value of the investment from the firm's taxes during the first year of installation. Firms may elect to use either the accelerated depreciation or the investment credit but not both. In addition, several States permit three types of tax relief which afford some subsidy for pollution control costs: property tax exemptions, sales and usage tax exemptions, and franchise and income tax credits or deductions. The 1972 amendments to the Federal Water Pollution Control Act enable SBA to make loans for water pollution control projects under the non-physical Disaster Loan Program. Also under the non-physical Disaster Loan Program, loans can provide long term funds to small firms at very reasonable rates. ADEQUACY OF PRESENT PROGRAMS These existing programs have the potential with some improvements of a dequately reducing the adverse effects of pollution controls. One area of improvement that could be examined would be increasing the scope of their coverage. Through HR 5675 the Committee would attempt to include dairies within the SBA loan program. A complete list of the areas excluded from SBA loan programs by law can be found in the Federal Register, July 17, 1973, page 19021, paragraph 120.2 (copy provided). EPA feels the existing SBA non-physical Disaster Loan Program is particularly worthy of careful attention. The loans available under it can resolve the difficulties with small business access to pollution control financing. This loan program is a particularly effective use of government funds because it does not provide funds to firms which can obtain financing at reasonable terms from private sources. Furthermore, it does not provide funds for firms which do not have sufficient viability to warrant government assistance. |