STATEMENT OF NATIONAL INDUSTRIAL SAND ASSOCIATION* On Section 501 (a) of H.R. 13270 Filed with the Senate Finance Committee on September 26, 1969 * (1) The National Industrial Sand Association is an industry association representing approximately 85 percent of the production of industrial sands in the United States. Industrial sand is a general term for quartzite and also quartz sand and pebbles used or sold for purposes dependent upon their silica content or their chemical or refractory properties. It should not be confused with construction sand used as a concrete aggregate. (2) Industrial sand is presently authorized percentage depletion at 15 percent; under the House bill, the allowable rate would be cut to 11 percent. (3) The National Industrial Sand Association opposes the proposed rate reduction and wishes to draw the following points to the attention of the Senate Finance Committee: (a) The proposed rate reduction is not tax reform but is a retreat from the long-standing and successful National policy to encourage the development of mineral resources. * Submitted by Earle T. Andrews, Member of the Taxation Committe». 33-758 O 69 No. 14 - 10 (b) This change in National policy was not based upon any study of either the industrial sand in dustry or the mining industries generally. (c) Industrial sand is a small industry, the total production in 1967 amounted to about 25,000,000 tons valued at $86,000,000. It is clear that the proposed rate reduction will not greatly increase National revenues but will be a substantial cutback for individual producers. (d) The proposed rate reduction would be a serious dislocation to the economics of the industrial sand industry. Adequate supplies of industrial sand are not easily located, developed, or processed into marketable levels of purity: and lower percentage depletion allowances will adversely affect the capital values of industrial sand producers which are needed to provide an adequate supply of this important mineral. Statement of the National Industrial Sand Association Regarding Section 501 (a) of H.R. 13270 Filed with the Senate Finance Committee on September 26, 1969 I am Earle T. Andrews, a member of the Taxation Committee of the National Industrial Sand Association of Silver Spring, Maryland, and am submitting this statement on behalf of all members of the Association. We appreciate this I am also Chairman of the Board, Pennsylvania Glass Sand The National Industrial Sand Association is an industry association representing approximately 85 percent of the production of industrial sands in the United States. Industrial sand is a general term for quartzite and also quartz sand and pebbles used or sold for purposes dependent upon their silica content or their chemical or refractory properties. Industrial sand is a primary raw material used in the manufacture of glass, chemicals, electrical porcelains and other silica based products and as metallurgical sand required in the manufacture of ferrous and nonferrous metal products. These constitute the primary markets although there are over 100 industrial and technical commercial uses requiring the unique chemical and physical properties of industrial sand. Construction sand used as a concrete aggregate and for other general building purposes and industrial sand are dissimilar in origin, in methods of processing and are mutually exclusive in use. Industrial sand is presently authorized per*/ centage depletion at 15 percent: under the House bill, the allowable rate would be cut to 11 percent. The Ways and Means Committee reported that it believes (1) "that even if percentage depletion rates are viewed as a needed stimulant at the present time they are higher than is needed to achieve the desired beneficial effect on reserves;" and (2) "that there is need to strike a better balance than now exists between the objective of encouraging the discovery of new reserves and the level and revenue cost of percentage depletion allowances." The National Industrial Sand Association opposes the proposed reduction in the existing 15 percent depletion There is no rate specified for industrial sand as such. Quartzite, however, is specifically entitled to depletion at the 15 percent rate. The legislative history of the 1954 Code also states clearly that the 15 percent rate is intended for quartz sand and quartz pebbles when used or sold for purposes dependent upon their silica content or their chemical or refractory properties. rate. The conclusions of the Ways and Means Committee were not based upon any study of either the industrial sand industry or the mining industries generally. Indeed, it is doubtful that the Committee even considered the impact of the proposed rate reductions on any minerals other than oil and gas. The United States has long had a National policy carefully designed to assure an adequate supply of mineral raw materials to meet the requirements of an expanding economy and the needs of security, and to bring about an orderly and wise use of this country's natural mineral resources. Mineral resources are wasting assets, and percentage depletion recognizes this fundamental reality presently available mineral deposits are gradually being exhausted by the extractive industries and additional reserves must be found and obtained. - Percentage depletion and the National minerals policy generally have fostered the development of this country's natural mineral resources which in turn is tied directly to the United States' amazing economic growth. Dr. Walter R. Hibbard, Jr., Director of the Bureau of Mines, stated, at hearings on mineral shortages before the Subcommittee on Minerals, Materials and Fuels of the Senate Interior Committee on March 21, 1968, that: |