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sales tax. Both taxes are, I think, admittedly regressive. There are some allegations that with the various loopholes the Federal tax itself also in some respects is regressive. We are really taking from everybody to give to those communities which have the local resources to provide the matching funds and that frequently means the wealthier communities.

I wouldn't want to conclude this testimony this morning without relating all of this to the housing problem, and on page 4 of my prepared statement there are two paragraphs which I would like to read.

The prohibition on new connections is a relatively new program; but we can see serious implications if other trends continue. We will have to expect that wealthier suburbs, where land costs are high and building codes encourage expensive homes, will come to be the only ones open to new construction. The implications are serious for those large numbers of our citizens who cannot afford to buy into these communities.

In short, this problem can become statute for the exclusionary zoning practices which some communities already use to keep out all but the wealthy.

Nor do we want to let the absence of adequate sewage collection and treatment facilities become a new excuse for some municipalities to keep out denser development or multifamily uses. Pennsylvania has established its policy of ultimately requiring adequate sewage treatment facilities in every community, and of giving substantial help, backed with legal enforcement.

We approve this proposed legislation very enthusiastically.

It is a very depressing experience, as I am sure some of you gentlemen or perhaps all of you know, to be talking to people out in the rural areas that are unemployed and see these terrible needs and just wonder why the needs can't be matched with the unemployment situation and something effectively done to deal with it, and I think that H.R. 13853 would be a tremendously important device to get people employed and to get some of these extraordinarily unhealthful and really life-threatening situations abated in rural Pennsylvania.

That is all I have to say at this time, Mr. Chairman.
The CHAIRMAN. Thank you very much, sir.
Mr. Wilcox. Could I say one other thing?
We have a film that was made-
The CHAIRMAN. That has been called to my attention.
It was made in the field, was it?
It was made in Pennsylvania?
Mr. Wilcox. Yes, sir.
The CHAIRMAN. In connection with your studies?
Mr. Wilcox. Yes.

The CHAIRMAN. And you want to show that during the noon hour, if it is permissible?

Mr. Wilcox. If it is, sir.

The CHAIRMAN. I do not know about how much audience you would have. As far as I am concerned, and unless some member objects, and I am sure they will not, it will be all right for you to use the room for this purpose during the time we are in recess.

Mr. Wilcox. Could I make one comment about the film? It is not the usual sort of educational or training film. There are a number of people who were witnesses at State hearings who were filmed as they could tell you.

testified, and I think that in a brief 20 minutes you would not be hearing so-called experts and policymakers, and so forth, but the people who are real victims of this situation. I think, in many ways, they will tell the story much more eloquently than I, for example,

The CHAIRMAN. I would be very glad to see it myself, and I believe the others would also be glad to see it. Twenty minutes shouldn't be too long. We will probably have 2 hours for lunch, depending upon the wishes of the committee.

Next is Mr. Harry J. Peyton, Jr., on behalf of the National Utility Contractors Association.

Mr. Peyton, we are delighted to have you, sir, and you may proceed.

If you have anybody accompanying you, you may identify them for the record.

STATEMENT OF HARRY J. PEYTON, JR., PRESIDENT, NATIONAL

UTILITY CONTRACTORS ASSOCIATION; ACCOMPANIED BY JOSEPH
M. STONE, GENERAL COUNSEL
Mr. PEYTON. Mr. Chairman and members of the committee.

My name is Harry J. Peyton of Baltimore, and I am appearing here today as president of the National Utility Contractors Association, a trade association composed of utility contractors engaged in such work as the construction of utility lines including metallic and nonmetallic pipe for storm and sanitary sewers and drainage, water lines, cables, ducts, conduits, and projects relating to drainage, sanitation, sewage disposal, irrigation, flood control, water supply, and similar underground construction work.

As utility contractors we are extremely interested in H.R. 13853 which provides needed funds to meet basic community sewer and water facilities, and I am therefore most appreciative of this opportunity to present the utility contractors' views. Obviously, as a group, we stand to benefit materially from the enactment of this bill, but we sincerely believe that we also speak as concerned citizens and that the overail picture is so crystal clear rearding the need for the expenditure of these funds that it would be eminently unfair to dismiss the uitlitycontractor viewpoint as self-serving.

Let me say at the outset that I have read Congressman Patman's statement appearing in the March 17, 1972, Congressional Record accompanying the introduction of this bill, and I am thoroughly in agreement with his views as to the need for expanded sewer and water facilities, the lack of meaningful expenditure of appropriated funds and the impact which passage of the Emergency Community Facilities and Public Investment Act of 1972 would have.

Parenthetically, it may be of some interest to note that at the recent annual convention of this association held from May 10 to May 14, 1972, the membership passed a resolution--a copy of which is attached to this statement-voicing the vigorous opposition to the administration's failure or refusal to expend all funds appropriated by the Congress.

In the past decade the surge in suburban growth has created a tremendous demand for water and sewer facilities and, indeed, public interest in such facilities has been quickened by an awareness of the ecology problems which must be met. Because of the demands of the association's convention and the limited time afforded us for preparing for this hearing, we have not been able to prepare an extensive statistical listing of the demand" or "need," on a nationwide basis, for water and sewer construction projects. Indeed, we are not even sure whether or how much of that kind of data is available, particularly since an evaluation of the need of water and sewer facilities must be made in terms of relatively small political units with respect to the watersheds serving them. Such surveys are expensive, involving, as they must, a projection of population growth and an evaluation of where such growth will occur within the political unit. That there are such studies, of course, is clear. For example, I am aware of one made several years ago for Montgomery County in Maryland, and it is my understanding that Fairfax County in Virginia is about to embark on another. I might note in passing the problem in Montgomery County where, as you know, inadequate sewage treatment facilities has necessitated a ban on further sewerlines and consequent inability to build houses, which, of course, means a loss of employment.

Within the time and means available to us, however, we have quickly gathered some information from our members across the country which we think should be of interest to this committee concerning the real need for a substantial increase of the Nation's water and sewer facilities. We have received from our New Jersey chapter a report, dated February 3, 1969, made by the New Jersey State Department of Health, Division of Clean Air and Water, entitled "Anticipated Capital Needs for Sewage Facilities in New Jersey.” Attached to this statement are excerpts from that report. In brief, however, it shows that:

The four year authorization contained in the Federal funding statute would in accordance with the statutory formula, provide New Jersey a total of about $109 million in aid or 12 percent of the cost described below. However, if the funds appropriated continue for the next two years at the level of the last two years, Federal aid will amount to less than three percent of the total needs described below.

To date Federal and State funds that have actually been appropriated have been in such small amounts as to have no measurable impact on the pollution control program.

** * The total estimated cost of all facilities now needed is $906 million.

The $906 million total is the estimated cost of treatment plants, trunk lines and outfalls now needed in New Jersey and which are eligible under for Federal and State construction grants. The total does not include the cost of upgrading the treatment plant and conveyance systems of the Passaic Valley Sewage Commissioners. It is our guess that the cost of bringing these facilities into conformity with State law and Department requirements is in excess of $100 million.

As noted above the $906 million is the assessment of the cost of eligible facilities. It will be necessary to accompany the construction of these eligible facilities with the construction of an estimated $225 million of sewage collection systems which are not eligible for Federal and State aid. (There is some eligibility for limited Federal aid for such collection systems from the Federal Department of Housing and Urban Development and other Federal agencies. There is no eligibility for aid from the principal funding agency: The Federal Water Pollution Contro] Administration, Department of the Interior).

In our judgment it is wholly unrealistic to expect local government with the little Federal aid now available to bear the enormous cost of constructing facilities now needed.

To do so would place an unconscionable additional burden upon the property owner in the form of additional property taxes or use charges.

The report goes on to state that the estimates are based on 1968 dollars and no attempt was made to adjust the cost for normal inflation. Obviously, since the date of the report the cost has considerably increased. Thus, it can reasonably be stated that the cost of needed water and sewer facilities in the State of New Jersey alone, at this time, must necessarily exceed $1 billion. Indeed, Charles M. Pike, director of water resources of New Jersey recently stated at the New Jersey Water Pollution Control Association that “New Jersey's rivers will remain polluted until the Federal and State governments jointly spend $2 billion this decade to build water treatment plants throughout the State.”

Our Indiana chapter reports that for the year 1971-72 the State of Indiana had determined that there were 146 priorities under its public law 660 for which construction funds should be allocated. However, the shortage of funds was such that the State developed a “short list” of some 61 priorities for which final plans were developed. However, only nine job awards were made. For the remaining 52 construction projects the State needs, but apparently does not have, $45 million. It is the estimate of the chapter that these 52 projects involve approximately 192 million man-hours of employment. It may be of some interest to note that the chapter also reports that during the previous year while the Federal Government awarded $41 million in grants the State could only come up with $3.6 million in necessary funds.

In conversations with our chapter presidents from the cities of Rochester and Syracuse, N.Y., both report a construction depression of between 50 percent to 60 percent below 1970–71 due to lack of funding for desperately needed water and sewer facilities. Apparently, this same situation exists in the eight States to which Mr. A. J. Shuttle, Jr., refers in this letter attached hereto. Attached a copy of a letter from Duane Olin, president of our chapter in Syracuse, N.Y.

The situation is no different in the Pittsburgh area. There, too, a desperate need for water and sewer lines exists at a time where those capable of installing them are only working half time. A more detailed report from that area is attached.

In my own State, the State of Maryland, the lack of funds is creating far-reaching havoc. One of our large State parks located on the Gunpowder River is in danger of being closed to the public due to the fact that sewage is polluting the waters of the river that is the raison d'etre for the park.

Also, in Baltimore City, the Jones Falls Valley, a well-known industrial area, has had its further development stymied due to the lack of funding of sewer treatment facilities. In the neighboring Baltimore County, just as in Montgomery County, building permits have been restricted until adequate sewer and water lines can be provided. Even the new city of Columbia is experiencing difficulties in this area, as, for example, the inadequacy of the Savage treatment plant to accept further waste. These difficulties preclude expansion as planned, thus limiting Columbia's economic development.

I should like to comment briefly on a recent statement made by Environmental Protection Agency Administrator William B. Ruckelshause to the effect that the construction industry cannot handle the volume of work expected from passage of the House version of the water pollution bill. In our recent convention, a resolution was passed by the membership voicing vigorous opposition to such testimony, and a copy of that resolution is appended to this statement. In support of our membership's view that ample manpower and equipment exists to handle whatever volume of work results from passage of legislation expanding construction for water and sewer facilities, I am here submitting a copy of a letter received this past week from A. J. Shuttle, Jr., who will be suceeding me as president of this association on June 1.

Briefly, it notes that on April 20, 1972, the Lancaster (Pennsylvania) Area Sewer Authority took bids on $16.5 million worth of proposed sanitary pipeline facilities from 28 construction firms located in eight States, a fact, along with other facts, on which he based his conclusion that there is a scarcity of work in many areas and that, accordingly, the utility industry is well able to handle a large volume of work awaiting Federal funding;

There is a provision in the bill, namely, section 709(b), which states that grants should be made "subject to such terms and conditions as the Secretary may prescribe." It should be noted that there are several plumbing codes sponsored by private organizations which, by way of a definition of “plumbing”include the installation of water and sewer facilities outside of a building as work which local authorities may require be performed by licensed plumbers. This kind of work has been performed all over the country by utility contractors utilizing laborers, and I would like to see some direction given the Secretary which would preclude him from making a plumbing code with a restrictive definition of "plumbing” and related terms applicable to the outside work contemplated by this bill. Such a provision would insure employment of minority group workers as well as the full utilization of appropriated funds.

That passage of this bill should have a significant impact on employment is evident from the fact that normal labor costs, at least in Maryland, on projects of the kind contemplated run from about 20 percent on plants to approximately 45 percent for pipelines. I understand these labor cost figures may run higher in other areas. And, of course, indirect employment resulting from the increased need for equipment and supplies must necessarily be very substantial.

Again, I wish to thank the committee for this opportunity to appear and be heard on behalf of a group which proudly proclaims, "We Really Dig America."

Thank you.

(The attachments referred to in the statement of Mr. Peyton follow :)

(The resolutions referred to in Mr. Peyton's statement passed by the membership of the National Utility Contractors Association Annual Convention, May 10-14, 1972 follow:)

RESOLUTION No. 3 WHEREAS, for a year or more there has been a problem of having appropriated funds not being fully expended, and

WHEREAS, such holding back of funds has tended to preclude full employment, and

WHEREAS, the lack of funds has resulted in a partial utilization only of existing plant facilities, and

WHEREAS, such failure to expend appropriate funds has resulted in a slowdown of the anti-pollution campaign, and

WHEREAS, the legislative will and intent is thwarted by executive refusal to expend appropriated funds,

Now, THEREFORE, BE IT RESOLVED that this convention go on record as voicing its vigorous opposition to the administration's failure or refusal to expend all funds appropriated by the Congress and to urge that such failure or refusal in the future be challenged by whatever means are deemed appropriate by this Association's Board of Directors.

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