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 KERT SLEIG 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 (D) 71 93 Conte, Hon. Silvio 0., a Representative in Congress from the State Smith, Hon. Neal, a Representative in Congress from the State of Iowa, and chairman of the Subcommittee on Small Business Admin- istration and Small Business Investment Company Legislation --- Adams, John B., director, Environmental and Consumer Affairs, National Milk Producers Federation, accompanied by Lynn E. Stalbaum, legislative representative- Agee, James L., Assistant Administrator for Water and Hazardous Materials, Environmental Protection Agency; accompanied by Paul A. Brands, Deputy Assistant Administrator for planning and Aldrich, Robert Hart, L. F. Rothschild & Co., accompanied by Neil A. Eisner Burton, Hon. John L., a Representative in Congress from the State Gelfand, Norman, chairperson, Illinois Industrial Pollution Control Kleppe, Hon. Thomas S., Administrator, Small Business Administra- tion, accompanied by Greg Austin, general counsel. Love, Tom, president, Musket Oil Co., and president, National Oil Jobbers Council, accompanied by Robert Bassman, counsel - of California.- 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- Correspondence and material submitted for the record- Agee, James L., Assistant Administrator for Water and Hazardous materials, Environmental Protection Agency: Correspondence concerning pollution control loans. Excerpts from the economic impact of the Federal environmental Aldrich, Robert Hart, L.F. Rothschild & Co.: Prepared statement.-- Bardin, Commissioner David J., New Jersey Department of Envi- ronmental Protection: Prepared statement.. Brands, Paul A., deputy assistant administrator for planning and evaluation: Macroeconomic impacts of Federal pollution control 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 - 3 9 311 55 100 76 522 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--- Kleppe, Hon. Thomas S., Administrator, Small Business Administra- 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- and John Knox, member, California State Assembly, to Congress- Unruh, Hon. Jesse, treasurer, State of California: Pollution control Appendix A—Internal Revenue Code, 26 U.S.C. § 103- Appendix B-Miscellaneous legislation to establish a pollution control financing program for small business- Appendix C-Miscellaneous legislation to expand the definition of small business concern to include agribusinesses. Appendix D-Miscellaneous legislation to clarify the eligibility of dairy farmers for water pollution control loans-- Appendix E-Legislation to clarify the eligibility of certain small busi- nesses for SBA loans (and for other purposes) Appendix F—Letter from Robert G. Ryan, director, Office of Legisla- tion, Environmental Protection Agency, regarding impact of environ- 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. |
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