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PART B-ADDITIONAL STATEMENTS

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The National Association of Marble Producers is an association of American marble producers (quarriers) of approximately 95 percent of the natural quarried domestic marble and travertine production.

The Marble Institute of America is the American marble industry's national trade association of companies engaged in producing (including almost all the members of the National Association of Marble Producers), importing, wholesaling, manufacturing and contracting for approximately 85 percent of domestic marble sales.

Marble production in the United States is a declining industry at a time when production of most other non-precious minerals is growing at a pace comparable to that of the growth of the Gross National Product. This decline is due partly to unlimited importation of foreign fabricated marble and partly to the increased use of simulated marble and other manufactured competitive materials.

Unlike the gigantic oil and gas industry, the marble producing industry enjoys no protection from foreign competition. There is no quota for imported fabricated marble, such as the oil and gas industry has, and which enables that industry to keep prices artificially high. The tariff on imported fabricated marble was only 21 percent ad val and lowered further by the GATT agreement at 10 percent per year to * Submitted by Jon A. Hagerich, Executive director, Marble Institute of America.

10.5 percent by December 30, 1973. This rate is so low that it plays no effective part in protecting the marble producing industry in the United States from foreign imports.

For example, Italian marble can be quarried, fabricated, and shipped to the United States for about 40 percent of the cost of U. S. produced marble of a comparable quality shipped to the same building site.

The total United States sales of marble in 1966 increased to 48 percent above 1956, while the sales of domestically fabricated marble decreased 2 percent. During the same period, the United States sales of imported fabricated marble increased by 534 percent. This staggering gain in sales of imported fabricated marble was made possible by the 40 percent cost differential and the lowering of tariffs.

The presently authorized depletion rate for marble is 15 percent. In 1968, this amounted to approximately $1,900,000. The Tax Reform Act of 1969, as passed by the House, would cut this rate to 11 percent, a reduction of more than 26 percent, about the same as that of the multi-billion-dollar quota-protected oil and gas industry.

The additional tax revenue from marble production represented by the proposed change would amount only to approximately $530,000., assuming continuation of production at the 1968 rate, a doubtful assumption. Contrasted with this drop-in-the-bucket benefit to the Treasury, the amount represents a crucial decrease in the after-taxrevenue of the domestic marble producers. There is a desperate need on the part of the American marble industry to find new deposits of sound quality marble more easily quarried, to devise and perfect new

means of more efficient quarrying of known deposits in order to cope to some extent with unchecked foreign competition. Such exploration, research and development is costly, but promise to keep alive an old, honored and specialized industry, which makes an aesthetic and quality contribution to building construction at a time when the need for such a contribution is evident to every

eye.

The National Association of Marble Producers and the Marble Institute of America oppose the proposed reduction in the existing 15 percent depletion rate for marble. The action of the Ways and Means Committee was not based on study of the marble industry, or of the mining industry generally. The action appears rather to have been based on conclusions reached from examination of the special circumstances of the oil and gas industry, rich in itself and highly favored by tax laws even with reduction in the depletion

allowance.

The effect of the Ways and Means Committee action would be to

make the poor poorer. It is submitted that if the policy reflected by the Tax Reform Act of 1969, indeed is the tentative policy of the Congress, the proposed change should be the subject of a thoroughgoing study of its effect, rather than by a decision reached without consideration of the effect on the subject industry.

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