Document MobKNqmDQggbEbQ4MgRRQznOz

AGENDA MEETING OF THE MCA BOARD OF DIRECTORS 2 p. m. , Tuesday, September 12, 1978 The Madison (Mount Vernon Room), Washington, D. C. I. Minutes of Meetings of June 7 and 8, 1978 II. Business Items: (a) Report of Nominating Committee (b) Program Committee Report 28th Semiannual Meeting, November 21, 1978 III. Report of Director of Government Relations IV. Information Items by Directors V. Report of President Next Meeting of the Board of Directors * 3 p. m. , Monday, November 20, 1978, Pinnacle Club (Rooms A, B and C), Mobil Building, 150 E. 42nd St., New York City CMA 037575 2054 MINUTES of the two hundred sixty-ninth meeting of the Board of Directors of the Manufacturing Chemists' Association, Inc., held at The Madison, Washington, D. C. , September 12, 1978, at 2 p. m. Directors Edward Donley, Chairman Tom K. Smith, Jr. , Vic Chairman J. Earl Burrell M. Blouke Carus Seymour S. Preston, III Peter J. Fass Robert A. Roland John T. Files Jack B. St. Clair Richard J. Hughes William G. Simeral Emerson Kampen Charles W. Smith William C. Krumrei Otto Sturzenegger Duncan J. MacLennan Raymond C. Tower George F. Polzer H. Kent Vanderhoef General Counsel: Acting Secretary- Treasurer: Edmund B. Frost Bruce M. Barackman By Invitation: Roger P. Batchelor, Jr. , Diamond Shamrock Corporation E. W. Callahan, Allied Chemical Corporation A. C. Clark, MCA John S. Coey, Hooker Chemical Corporation Stephen L>. Goldstein, Olin Corporation Carl A. Gosline, MCA Edward J. Klecka, MCA Victor H. Peterson, MCA Paul M. Pitts, ARCO/Chemical Company John E. Slavick, MCA William M. Stover, MCA I. MINUTES OF JUNE 7 AND 8, 1978. MEETINGS Minutes of the June 7 and 8, 1978, Board meetings, as distributed, including the financial statement for twelve months ended May 31, 1978, were approved. CMA 037576 2055 II. REPORT OF THE SECRETARY-TREASURER Exhibit A III. BUSINESS ITEMS (a) Report of Nominating Committee Reporting as the chair man of the Nominating Committee on which Messrs. Henske and Tom Smith also served, Mr. Donley presented the slate listed in Exhibit B. Noting that according to intelligence recently received, Mr. Hale was no longer affiliated with Engelhard Minerals & Chemicals Corporation, his name is withdrawn. The vacancy created will receive further consideration. The slate, with the deletion of Mr. Hale, was approved. (b) Report of Membership Committee As chairman, Mr. Polzer reported the committee's having examined the qualifications of the company named below and recommended its election. ON MOTION, duly made and seconded, it was VOTED: That Lignin Chemicals Department, American Can Company, be elected to mem bership in the Association. (c) Report of Program Committee Mr. Barackman, in the absence of Mr. Mitchell, the committee chairman, read his letter. Exhibit C, concerning the 28th Semiannual Meeting, November 21, 1978. IV. BUDGET CONSIDERATIONS Mr. Roland spoke of the increasingly active role MCA is assuming in responding to the significant issues affecting the chemical industry. This is resulting in escalating involvement'of the staff, the committees, the Board, and member companies. Already, as a result of the recent reorganization, and following approval of the budget for fiscal 1978-79, committee requests for n w money aggregating $1, 500, 000 have been submitted to the Executive Committee. This was seen by the committees as necessary if MCA were to represent effectively the interests of the industry. In August, $295,000 was added, and in September another $91, 000. Obviously, a new look at our operations and projected needs is re quired. The Executive Committee this morning reviewed the financial projections in Exhibit D and requested the Finance Committee, working with staff, to present recommendations following a complete analysis of MCA's fiscal future this year and next with a proj ction out to four years beyond. cWA 037677 2056 Because of anticipated swelling cash flow, a CPA will be added to staff to manage fiscal affairs. In the ensuing discussion some sentiment was expressed for financing a fiscal 1978-79 deficit out of reserves, with a dues increase next fiscal year sufficient to replenish the reserve and cover expected expanded activities. Consensus was to use surplus now and replenish out of future dues increase. Mr. Burrell, Finance Committee Chairman, invited comments for the consideration of the committee in undertaking the assignment. V. WASTE DISPOSAL Giving many examples of specific areas of concern and the piecemeal fashion in which Congress is proposing legislative solutions, Mr. Stover identified waste disposal as a most critical issue facing the chemical indus try -- and one concerning which a mainstream industry posture is needed. To properly address this complex matter the Executive Committee earlier today approved the appointment of a Special Committee on Chemical Incidents as set forth in Exhibit E. Mr. Callahan, Chairman of the Environmental Management Committee (EMC), presented the following committee recommendations: each company should address its own circumstances without any MCA direct or indirect in volvement; RCRA Task Group should develop and present additional suggested practices for long-term management of inactive solid waste disposal sites; MCA should organize a P/R program publicizing what the industry is doing and has done, while emphasizing the broad complex nature of the problem; and the EMC should set forth its goals and objectives as the basis for a major effort to raise the level of perception of the complexities of the problem for EPA policy makers, pertinent congressional staffs, and thought leaders. He said the EMC will be happy to work with the Special Committee on Chemical Incidents in furthering its objectives. To add perspective to the problem, Mr. Coey, Hooker Chemical Corporation, narrated in detail the Love Canal case history. As additional background, a Transcript of Interview, by Kenneth Bell of NBC-TV with Mr. Roland, on chemical waste disposal, September 6, 1978, was distributed to those present. ON MOTION, duly made and seconded, it was VOTED: That the Chairman of the Executive Committee proceed to implement the approved recommendations of the Government R lations Committee, attached as Exhibit E. CMA 037578 1 2057 VI. RMLEGED MATERIAL REDACTED VII. REPORT OF DIRECTOR OF GOVERNMENT RELATIONS Mr. Stover's report is attached as Exhibit G. A tabulation of the status of legislation of interest to MCA as of September 8 was distributed to those present. VIII. INFORMATION ITEMS BY DIRECTORS Mr. Fass, referring to the numerous trade associations supported by many of the same companies who are members of MCA, questioned whether there was duplication of effort and waste. Mr. Roland acknowledged this possibility, assuring that it can be minimized if not eliminated by in creased communication which is continually emphasized with staff. He spoke of the expanding role of MCA, mentioning past and recent examples where MCA has assumed leadership in coordinating action with other associations in areas of common interest and promised this will increase with Executive Committee and Board working with staff to become steadily more involved in coordinating Association activities of mutual interest. DC. REPORT OF THE PRESIDENT Mr. Roland announced with regret that Mr. Best suffered a heart attack two weeks ago, but reportedly is coming along fine. For those who may wish to send a note or card, he is presently at home (4416 Wickford Road, Baltimore, Maryland 21210). f f E { f f Ii CMA 037579 2057 VI. LABELING OF CHEMICALS -- SIGNIFICANT CHRONIC EFFECTS Mr. Frost reported on developments affecting the content of labels in the Chemical Safety Data Sheets published by MCA. Heretofore, with one exception, only acute effects have been identified in the labels of MCA data sheets even though chronic effects are described in the texts of many of them. OSHA's proposed labeling standard, the Arcell case where MCA was a defendant for failing to call for chronic warnings in an earlier LAPI manual, and the preparation for publication of revised Chemical Safety Data Sheets all have focused attention on the need for inclusion of chronic effects in labels as set forth in Exhibit F attached, acted upon favorably by the Executive Committee earlier today. VII. REPORT OF DIRECTOR OF GOVERNMENT RELATIONS Mr. Stover's report is attached as Exhibit G. A tabulation of the status of legislation of interest to MCA as of September 3 was distributed to those present. VIII. INFORMATION ITEMS BY DIRECTORS Mr. Fass, referring to the numerous trade associations supported by many of the same companies who are members of MCA, questioned whether there was duplication of effort and waste. Mr. Roland acknowledged this possibility, assuring that it can be minimized if not eliminated by in creased communication which is continually emphasized with staff. He spoke of the expanding role of MCA, mentioning past and recent examples where MCA has assumed leadership in coordinating action with other associations in areas of common interest and promised this will increase with Executive Committee and Board working with staff to become steadily more involved in coordinating Association activities of mutual interest. IX. REPORT OF THE PRESIDENT Mr. Roland announced with regret that Mr. Best suffered a heart attack two weeks ago, but reportedly is coming along fine. For those who may wish to send a note or card, he is presently at home (4416 Wickford Road, Baltimore, Maryland 21210). Mr. Barackman has been appointed Acting Secretary-Treasurer. Mr. Roland's staff report is attached as Exhibit H. Acting S cretary-Treasurer CMA 037679 EXHIBIT A REPORT OF THE SECRETARY-TREASURER September 12, 1978 Dollar amounts rounded from tabular details ($000) INCOME & EXPENSE June 1, 1978 - August 31. 1978 - 3 Months (25%) Income - Membership Fees - Other $3,591 218 $3,809 Expense - Operations - Projects $1,301 44 $1,345 Percent of Budget 99.37. 24.07. 84.27. 28.9% 6.97. 26.27. ASSETS (As of August 31, 1978) Cash Investments Miscellaneous $ 56 9,318 6 $9,380 I CMA 037680 f os> o oj g MANUFACTURING CHEMISTS ASSOCIATION SJMJUIM Ol HWMIll IINHUX August 31, 1976 BALANCE SHEET Assets Cash National Savings 6 Trust - Commercial Account National Savings 6 Trust - payroll Account Imprest Funds Investments Bank Certificates of Deposit Bank Repurchase Agreements U. S, Government Securities U. S. Coverrasent Agency Securities Corporate Securities Deposits 6 Advances U. S. Government Printing Office American Airlines Postage Meter Travel Advances $ 49,035 6,000 800 5 55,835 $2 ,450,000 430,000 1,836,461 2,169,526 2,4 L2.250 9,318,257 $ 500 425 1,684 2.848 5.657 $9,379,749 Liabilities 6 Fund Balances Liabilities D. C. Sales and Use Tax Hospitalization Insurance $ 182 __________ 6_L $ 243 Reserve Deferred Condensation 145,750 Fund balances Restricted (Schedule I (e)> Unrestricted - Froai Previous Fiscal Years - Current rises 1 Year $2,223,465 2,463,644 $4,546,447 4.687.309 9,233,756 $9,379,749 INCOME 6 EXPENSE INCOME Memberships Dues 6Entrance Fees Income from Investments Publications Sales *(LJMeeting & Special Funds (Schedule l (d)> Overhead Reimbursement Subscribed Projects (Schedule I <d)) Miscellaneous TotalIncome $3,591,284 145,466 26,687 $ 43,773 43,773 _______ L ,544 $3,808,754 EXPENSE (Schedule tl) Management Technical - CeneraL Technical - Chemtrec Public Relations Government Relations Staff Services Total Expense *(2) Income less Expense $ 442,934 384,323 78,089 205,356 120,507 113,701 $1,344,910 $2,463,844 FOOTNOTES: *(l) Net Income on Completed Projects *(2) Total General Program Expense Fiscal Year 1977-78 Budget Program Expense (above) Expenditures from Project Funds carried over from previous Fiscal Year (Schedule I (c)> $1,344,910 2400 $1 ,345.310 CMA 037682 SCHEDULE I RESTRICTED FUNDS 6 MEETINC ADVANCES Carry-Over of Budgeted Funds OH - J AIHC/OSHA Hearing Hon1 tor S - 1 Document Center/OSHA Cancer U -20 EPA Toxic Pollutants Criteria Total Carry-Over Hon-Budgeted Funds 6 Meetings Meetings Workshops fc Symposia Tank Csr Mileage Compensation MCA/AAR Rail Systems Safety Vinyl Chloride Research Phosgene Safety Research Fluorocarbons Research Phthalate Esters Research Loss Pats Bank (Insa) Acrylonitrile Monomer Research Trichloroethylene Research Chlorobenzenes Research Allyl Chloride Research Epichlorohydrin Research Vinylldene Chloride Monomer Styrene Monomer Ethylene Dlchloride Research Benesene Study Epoxy Reatna Research Titanium Dioxide Research Butylated Hydroxytoluene Research Chemical Industry Trade Advisor Document Center/OSHA Cancer Policy Total - Hon-Budgeted Funds Plastics Croup Financial Package TOTAL U> $ L0 *000 1,500 36,640 $ 48,140 $ 138,036 41,071 A ,370 375,379 20,986 l ,832,363 39,737 3,264 96,725 100,860 179,871 131,270 221,102 180,627 90,919 193,36V 302,929 5,267 44,046 24,945 876 295 ,048,299 $ 120,616 $4 ,217,055 Reccipts o>) $ - $ $ 27,801 - 82,004 - 42,000 325,367 433,647 26,433 7,000 400 $ 944,652 5 9 944,652 Expenditures (c) 5 400 - 5 400 5 70,778 7,721 - 17,941 6 336,594 - 90 15,734 6,014 (96) * 42 27 87,028 - 8,462 15,343 4,684 669 9 571,087 $ 9 571,487 Trans fers To Income <d) - $ August 31, 1978 Balance August 31, 1976 <e) 5 10,000 1,100 36 ,640 S 47,740 $ - 3,440 2,626 11,786 1,427 800 9,333 813 373 34? 2,747 4,213 1,920 80 27 3,841 9 43,773 s- 5 43,773 9 95,059 33,350 86,374 353,998 60,354 1,829,350 38,310 3,174 80, L9 l 85,513 179,104 131,270 654,376 206,713 88, no 189,121 2 13,981 5,187 35,557 5,761 3, L92 2b 94,378,091 $ 120,616 $4 ,546 ,447 r bup^^V tx rt.N.sfc ErapLoyecs OPERATING EXPENSE Salaries & Related Exjicnse Retirement PJan A Croup Ins. Hosp. Ins. A Health Plan ALega1 Fees A Expense ^Consultants A Investment Sirv. Aud it Rent A Premises Expense Taxes A Insurance Supplies A Cen. Office Exp. Furniture A Equipment Print mg Telephone A Telegraph Postage Travel A Entertainment Meeting Expense Periodicals, Books, etc. Organizational Memberships Cuntingency Operating Expense Totals MANAGEMENT EXPENSE lb BUDGET TECIINI CAL GENERAL CHEMTKEC EXPENSE BUDGET EXPENSE BUDGET 26 7 PUBLIC RELATIONS EXPENSE 12 BUDGET GOV'T HEIAT10NS EXPENSE 12 BUUCET STAFF SERVICES EXPENSE 14 BUDGET TOTAL TO DATE 3 MONTHS EXPENSE 8UDGET 87 91 $152,358 $ 136,875 $158,014 $ 159,325 $ 37.2 18 $ 40,976 $ 66,334 $ 68,425 $ 60,791 <i 67,175 $ 54,54 ) $ 56,175 $ 529,278 $ 528,950 61,835 2 1,175 96,996 28,400 25,692 6 ,500 48,869 11,500 28,795 11,625 37,281 8,925 299,470 90,125 1 .756 2,775 4,279 5,000 335 500 l ,797 2,350 i ,417 2,125 2,045 2,425 11,629 15,175 IV l,5 17 9 5,000 74,112 92,500 -- - - 5,844 7,500 - - 271.673 195,000 - 2.000 2,5(7 15,250 -' -- -- - - 2,537 17.250 4,552 6,338 5,870 5,199 - 1,175 6,225 6,638 3,625 1,500 . 9,957 8,211 8,782 9,650 59,425 8,500 1,875 1,924 2 ,450 680 _ L ,925 40 ,475 7 SO 1,125 _ 5, 194 4,055 3,952 - 5, 325 4,375 3,675 63 _ 4,350 3,429 3,990 - _ 4,275 4,137 3,750 500 _ 8,997 4 ,698 1,797 1,34 7 . 8,750 4 ,600 1,875 162 4,552 36 ,960 28,713 24 ,600 I .347 1,375 36,150 119 ,650 22,375 5,225 1,644 4,641 2,318 3,067 966 1 . J 75 2,445 1,700 4,750 3,000 910 4,109 7,611 4,260 94 750 5,575 8,750 8,250 450 70 6,786 2 32 2,141 * 1.125 6,725 375 1,000 50 3,466 l ,903 18,701 8,720 - l ,375 2,292 13,750 7,250 25 421 1,707 3,043 3,118 30 250 2,3 L8 3,000 5,750 L ,000 209 l ,467 435 300 - 4 50 1,745 550 250 - 6,720 20,613 32,360 21,606 1 ,090 5,325 21,100 26,125 27,250 4,525 690 2,250 121 875 40 1,250 499 1,125 - 600 700 34 L 150 - 25 -' 198 450 222 100 *- 3,492 80 - 2 ,000 275 - 482 100 * 450 50 - 5,702 1,650 40 5,900 2,225 1,250 $442,934 $296,833 $381.698 $405,000 $ 78,089 $101,700 $ 163 ,611 $121,355 $120,507 $ 115,680 $113,701 $ 86,407 $i ,300,540 $ 1 ,126,975 PROJECTS Technicsl viCttcaiicat Regulations Safety and Fire Protection Water Resources Multi-Cnanl t tee/Transportaiion Hu Iti-Committee/Pub]icat ions : Safet y Other I'ub lie Relnt inns Community Relatione Consumer Information Environmental Quality Internal Publications Media Relations Teacher Awards Education Exhibits Education Publications Government Relations Trade Advisor Project Totals s $ $ - $ 62,500 2,125 10,750 l ,050 2,625 29,000 2,750 $ 2,625 $108,175 $ -$ $ 4,247 $ 7,900 14,886 14 ,325 9,815 9,725 - 3,750 1,244 2,125 2,698 4,126 202 1,250 8,653 4,625 5 - $ 62,500 - 2,125 - 10,750 _ 1,050 2 ,625 - 29,000 2,750 4 ,24 7 14 ,886 9,615 _ l ,244 2 ,696 202 8,653 7,900 14,325 9,725 3,750 2,125 4,125 1,250 4,625 s - $ 2,500 - $ 2,500 $ 41.745 $ 47,825 $ - s: 2,500 s - $ - S 44,370 $ 158,500 COMBINED TOTAL $442,934 $296,833 $384,32] $513,175 s 78,089 $101,700 $205,356 $169,180 $120,607 $118,IKO $113,701 $ 86,407 SI,h344 ,910 $1 ,285 ,475 CMA 037683 *Budget Amendment - by Executive Committee August 8, 1976, provides $120,000 lor Legal fees to intervene in Discr i minatory Rail Rate proceedings $50,000 for l.eg^l Jees to provide .an *'issues and action1* study on ETA regulations under the Cleon Air Act; an additional $100,000 for expansion of the TSCA Economic Impact Study, and $25,000 for Consultant Fees. Nominating Committee Report September 12, 1978 Exhibit B Term ending May 31, 1979 Robert W. Gerwig '-i w 1 BXU William B. Jackson John P. Sachs Alfred C. Stepan, Jr. Richard F. Tucker Hugh B. Vanderbilt Term ending May 31, 1980 William R. Barrett, Sr. John G. Brookhuis H. Barclay Morley Term ending May 31, 1981 Charles F. Fogarty James A. McGowan Harriette F. Witmer Continental Oil Company Engelhard Minerals Si Chemicals Corporation Koppers Company, Inc. Great Lakes Carbon Corporation Stepan Chemical Company Mobil Chemical Company, A Division of Mobil Oil Corporation R. T. Vanderbilt Company, Inc, Inmont Corporation American Hoechst Corporation Stauffer Chemical Company Texasgulf Inc. Aluminum Company of America Deepwater Chemical Co., Ltd. MCA EC-9/12/78 BD-9/12/78 CMA 037684 & ELANESE TO: MCA BOARD OF DIRECTORS fulU.M...JA...!..f..\..vC.^.r.vfErx.' ih'ii1riVb'i<-tl(i)C,. E ITvn nr-'rr .; * I)!-. September * 7 /. 119 7 8 Subject: NOVEMBER SEMI-ANNUAL MEETING Mr. Heckert of Du Pont has agreed to chair the morning session on the subject "The Innovation Gap". He is presently in the process of arranging for three speakers as follows; Mr. Philip Handler Mr. Frank Press Mr. Lou Branscombe or Mr. Ed David National Academy of Sciences White House IBM Exxon Mr. Barry Bosworth of the Council on Wage and Price Stability has informally accepted our invitation as the luncheon speaker. We expect his official acceptance prior to the Board Meeting. Mr. Hanley of Monsanto has agreed to chair the afternoon session on the subject "Operating in a Zero Risk Environment" and has completed arrangements for the following three speakers in addition to himself: Dr. Leon Goldberg Congressman James G. Martin Mr. Sheldon Samuels Chemical Industry Institute of Technology North Carolina Director; Health, Safety & Environment - Industrial union Department - AFL-CIO. / if Robert L. Mitchell Chairman MCA Program Committee RLM:pb MCA BD - 9/12/78 CELANESC CORPORATION . 1211 AVENUE OF THE AMERICAS. NEW YORK, N.V. 10036 TELEPHONE: 212--766-7640 CMA 037585 MCA Budget -- Fiscal Year 1978-79 As of 8/21/78 Distribution by Subject Areas Committee Activities I Chemical Regulations $ 663, 000 Distribution 545,000 Energy- 223,000 Engineering 68,000 Environment 575,000 Insurance 27, 000 Occupational 473,000 Publications 659,000 Government Relations, unclassified 133,000 Patent 19,000 Tax 109,000 P Other Activities Chemtrec Subscribed projects Public relations, unclassified Education Consumer information Community relations Trade "Product liability" Total 397,000 448,000 134,000 195,000 248,000 80,000 119,000 30,000 $5,145, 000 oo o Exhibit D 12.9% 10. 6 4. 3 1.- 3 11. 2 0. 5 9.2 12.8 2.6 0.4 2. 1 7. 7 8. 7 2. 6 3. 8 4.8 1.6 2. 3 0.6 Dollar amounts rounded to nearest $1,000 MCA EC - 9/12/78 BD - 9/12/78 CMA 037586 MCA Budget and Financing Financial Projections September 1, 1978 Fiscal Year 1978-79 Income Original estimate Prospective increment Expense Original budget: Operations - original - added 8/8 Projects - original - added 8/8 $4, 525, 000 225, 000 $4,750, 000 4,315,000 195, 000 535,000 100, 000 If further additions Ultimate budget Income over (under) expense To offset deficit by additional collection would require indicated percentage of current year membership fees ($3,615,000) If no additional collection, effect on reserves Reserves 5/31/78 $2.22 million Reserves 5/31/79 Percentage of current year operations budget ($4,510,000) 49.2% $4, 510, 000 635,000 $5,145,000 0- $5,145,000 $ (395,000) 10.9% $1.82 million 40. 3% $5,145,000 500,000 $5,645, 000 $ (895,000) 24. 8% $1. 32 million 29.3% CMA 037587 CMA 037688 Fiscal Year 1979-80 Income With 10% increase in membership fees* With 20% " " " * *In addition to assumed 10% gain over 1978-79 to $3,975,000 from increases in chemical sales Expense Operations** Projects **15% above 1978-79 original budget Income over (under) expense $5,300,000 $5,000, 000 600,000 $5,600, 000 $5,000,000 1,100,000 $6,100, 000 $ (300,000) $ (800,000) Effect on reserves (a) If reserves level 5/31/79 - $1.82 millionReserves 5/31/80 % of operations budget ($5, 000, 000) (b) If reserves level 5/31/79 - $1.32 million % of operations budget ($5, 000, 000) $1. 52 million 30.4% $1.02 million 20. 4% $1.02 million 20. 4% $0. 52 million 10. 4% Additional surcharge on membership fees to recover 1979-80 remaining deficit 7. 5% 20. 1% $5, 700,000 -2- $5, 600,000 $6,100, 000 $ 100,000 $ (400,000) $1.92 million 38. 4% $1.42 million 28. 4% $1.42 million 28. 4% $0.92 million 18.4% 10. 1 % MCA EC - 9/12/78 BD - 9/12/78 Exhibit E September 11, 1978 Government Relations Committee Recommendation to Create a Special Committee on Chemical Incidents Several committees of the Congress and agencies of the Federal government are actively addressing themselves to public policy with regard to transportation accidents involving chemicals; liability for environmental damage resulting from chemical spills or discharges; governmental indemnification of persons injured physically or economically by exposure to chemicals; funding of repairs of massive environmental or economic damage beyond the resources of those liable; - products liability, including tort law reform and insurance implications. The chemical industry has a major stake in the ultimate public definition of and solution to these problems, both in terms of our pmage as good corporate citizens and in terms of potential adverse financial impact. Since these problems are currently being addressed in piece meal and uncoordinated fashion by essentially unrelated elements of the Congress, government and the private sector, there is serious doubt that the end results will be compatible, equitable or truly responsive. The Government Relations Committee believes that the chemical industry, through MCA, should respond vigorously to; a. more clearly define these problems and their inter relationships ; b. determine more precisely how the interests of the industry are likely to be affected; c. arrive at industry positions; d. plan and execute a program designed to protect our best interests. Since the magnitude and complexity of this task appears to exceed the scope of any of the ten MCA standing committees, the Government Relations Committee unanimously recommends that the MCA Executive Committee consider the appointment of a special committee, head d by a ranking industry executive, to study the issue, recommend m course of action and pursue its implementation. It is recommended that the special committee function for a two-year period. MCA EC - 9/12/78 BD - 9/12/78 CMA 037589 Y Exhibit ~ Inclusion of Significant Chronic Effects on Labels Approximately one-third of the chemicals described in the hundred MCA Chemical Safety Data Sheets are known to exhibit chronic effects which are described in the texts of these data sheets. With one exception (SD-3Z Beta Naphfhylamine; now withdrawn from publication) the recommended labels of MCA data sheets, however, have not identified any of these known chronic effects. The Occu pational Safety and Health Committee has established a task group to: (1) develop criteria for identifying which chronic effects merit mention on data sheet labels, and (2) develop guidelines for specific wording to describe these effects. In establishing the task group, the OSH Committee itself distinguished between significant chronic effects, which should be identified on a label, and lesser effects, which need not be so identi fied. The OSH Committee stated that life-threatening chronic effects are significant and directed the task group to evaluate other criteria, if any could be found, for other significant chronic effects. The task group found that it favors the addition of disabling chronic effects to the significant category and is now proceeding to develop guidelines for wording to be used on labels while it also develops practical definitions of the two significant effects. The task group anticipates that its work will be completed within a few months. Following that, the OSH Committee will act on the recommendations of the task group. Before these guidelines concerning label wording are to be available, however, data sheets on a few substances with known chronic effects are now or soon will be ready for publication. Un resolved objections to the identification of significant chronic effects in the labels has led to suspending publication of data sheets 5D-43, Acetaldehyde, and SD-44, Chromic Acid. A third, SD-102, Chlorosilanes, shortly will be held in similar abeyance. Other data sheets, such as SD-18, Ethylene Dichloride, and SD-57, Methylamines, are now in the editorial process and may be delayed similarly. MCA policy in this area was established, although not imple mented, in 1970, in the 7th edition of the LAPI Manual, "Guide to Precautionary labeling of Hazardous Chemicals." That publication stated that an identification of known chronic effects should be included in labels. This policy was confirmed with greater emphasis in the 1976 MCA-sponsored national voluntary standard of the American National Standards Institute (ANSI), Z-129.1 "Precautionary Labeling of Hazardous Industrial Chemicals." CMA 037590 7. -Tiif?r"?' ''arrw*ai nrum**** This would apply to alL MCA Chemical Safety Data Sheet* for chemical* with significant chronic effects reprinted or revised henceforth. Implementation is recommended as follows, subject to any further definition of policy by the Executive Committee: (1) That when approved by the Occupational Safety and Health Committee (OSHC), criteria for the identifi cation of significant chronic effects be incorporated into the preparation of data sheets and that guidelines for the use of standard phrases be used in drafting statements that describe those significant chronic effects on labels. (2) That for all data sheets published in the interim, statements identifying undisputed chronic effects that are life-threatening or disabling be incorpo rated in the labels. (However, in staff discussion it has been suggested and agreed that no further data sheets and labels therein be published until the OSHC criteria for chronic effects labeling is approved by the Executive Committee.) (3) That member companies be advised of the above two actions as an application of established policy. 1 MCA EC - 9/12/78 BD - 9/12/78 CMA 937591 Exhibit G REPORT BY THE DIRECTOR OF GOVERNMENT RELATIONS WILLIAM M. STOVER SEPTEMBER 12, 1978 CONGRESS ACTIVE AS ADJOURNMENT. ELECTIONS APPROACH House Speaker Tip O'Neill and Senate Majority Leader Bob Byrd, confronted by the fast-approaching Congressional adjournment in mid-October, are pushing their colleagues relentlessly in an effort to complete the substantial backlog of legislation which remains. With White House attention focused on the current Summit Conference, and with major controversies over natural gas pricing and tax cuts yet to be resolved, it remains unclear just how many of the numerous pending bills can be completed before the Congress turns to re-election efforts. Senator Byrd has announced that the Senate will be giving priority to energy, defense appropriations, foreign aid and welfare, a tax cut, hospital cost containment, and authorizations for governmental programs expiring this year. He has implied that controversial items or those likely to pose filibuster threats will be set aside. NATURAL GAS DEREGULATION HANGING IN THE BALANCE The Senate is actively engaged in a heated debate over the con ference report on the natural gas portion of the National Energy Plan. Threats of filibusters, coupled with the fact that about twenty Senators are undecided, make it impossible to predict the ultimate outcome. A coalition of Senators is pushing to recommit the bill to the conference committee, with instructions to scrap all provisions except the President's authority to allocate gas in emergencies and those allowing intra-state gas to flow in the inter-state market with out "dedication." The recommital proposal would also instruct the confer es to release the remaining non-controversial energy bills dealing with electric utility rate reform and energy conservation. Although no serious attention is likely to be devoted to the energy tax area in the remaining weeks , these proposals would be subject to revival should the Congress return for a post-election Session. Such a session is not seen as a likelihood at present. CMA 037592 TAXATION: THE REVENUE ACT OF 1978 On August 10, 1978, the House passed H.R, 13511, the Revenue Act of 1978. Principal provisions of this bill include a reduction in individual income tax rates, a reduction in corporate income tax rates from 48% to 46%, a permanent extension of the 10% investment tax credit and a reduction in capital gains taxes. The Senate Finance Committee has just completed seven days of hearings on this measure during which MCA Chairman Donley testified on behalf of the Association. He appeared on a panel with spokes men from the Iron and Steel Institute, the American Paper Institute and the American Textile Manufacturers Institute. In brief, Mr. Donley's testimony supported legislation designed to increase capital investment, such as reductions in individual and corporate tax rates, a reduction in the capital gains tax, and making the 107, investment taj credit permanent. A greater reduction in corporate tax rate than that contained in the House-passed measure was recommended. The Finance Committee began markup of the tax bill September 7, and plans to finish its work by the end of next week. The bill will come up for Senate floor debate sometime after the natural gas question is completed. A House-Senate conference^ must follow Senate approval. SUPERFUND: OIL/CHEMICAL SPILLS LIABILITY On August 17 the Senate Environment and Public Works Committee reported S. 2083, the Oil Pollution Liability and Compensation Act of 1978. The bill immediately creates two identical compensation funds, one for oil and the other for hazardous chemicals. Under this proposal, spillers of hazardous chemicals would be liable not only for mitigation and cleanup costs, but also for third party damages, up to the $50,000,000 limit set by the 1977 amendments to the Clean Water Act. MCA is vigorously opposing the inclusion of chemicals spills coverage in this legislation. Unlike the fund provision for oil, which has been under Congressional consideration for four years and is generally acceptable to all parties, coverage of hazardous sub stances has received inadequate consideration in the Senate and no attention in the House. The chemical fund builds directly on Section 311 of the Clean Water Act. However, successful legal action by MCA has nullified EPA's unreasonable regulations for implementation of Section 311; therefore, the chemical fund cannot operate until the litigation is resolved. CMA 037593 3 Attempts to delete provisions for a chemical fund, and requests and offers of support for an intensive Administration study of this complex area have thus far availed little. We are therefore lead ing an active effort, supported by the oil, rail, trucking and barge industries, to block Senate consideration of S. 2083. TOXIC SUBSTANCES AMENDMENTS STILL PENDING Final House consideration of H.R. 12441, Amendments to the Toxic Substances Control Act, is expected before the end of the Session, but the House Rules Committee has not yet released the bill for floor action. The bill provides for a simple one-year increase in authorizations for EPA's Office of Toxic Substances. However, we expect an attempt will be made to amend H.R. 12441 on the House floor by Congressmen Ruppe and Ford, both of Michigan. Their proposal would add an additional $50 million annual authorization to provide financial assistance to victims of chemical poisonings - an "indemnification" proposal. Similar language passed the Senate last October as a section of S. 1531 which, as in H.R. 12441, contains new authorization levels for EPA and which additionally grants new broad rulemaking powers to the Administrator. MCA is opposed to any substantive amendments to TSCA at this early stage of implementation. SENATE SUBCOMMITTEE PLANS OSHA OVERSIGHT HEARINGS The Subcommittee on Labor of the Senate Human Resources Com mittee has scheduled oversight hearings on the Occupational Safety and Health Act for October 3, 4, and 5. The hearings will address a broad overview of the entire OSHA program, including enforcement, paperwork burden, quality and quantity of standards, penalties, improved or less burdensome methods of enforcement, and other questions. The only areas specifically excluded from consideration are standards already in the process of development. The MCA Occupational Safety and Health Committee is preparing testimony for the Association. CMA 037594 ILLINOIS BRICK BILL STILL ALIVE There Is still some chance that a bill to overturn the "Illinois Brick" Supreme Court decision could be approved in the closing weeks of this Congress, At stake is the high court's ruling that only the direct or first purchaser from an alleged antitrust violator has the right to sue. The bills S. 1874 and H.R. 11942 would broaden these ground rules so as to permit any party in the distribution chain to sue any other party up or down that chain. The House bill is pending before the Rules Committee and may come up the week of September 18. The Senate bill is ready for floor consideration and could be brought up immediately following the natural gas debate. MCA member companies have been alerted to join the broad-based business community effort to block these bills, being led by the Business Roundtable. CMA 037595 STAFF REPORT by Robert A. Roland September 12, 1978 Exhibit H On August 10 the House passed H.R, 13511, the Revenue Act of 1978, and on August 17 the Senate Finance Committee began hearings on this legislation. On August 21, Edward Donley testified before the Senate Finance Committee on behalf of the Association. He stressed the need of the U.S. chemical industry to replace capital facili ties which were designed in an era of low energy cost with facilities which would provide maximum competitive performance in the high energy cost era. He stated that a substantial reduction in tax rates would foster accumulation of the capital required by the U.S. chemical industry for this purpose. While the corporate rate reduction provided for in the House-passed bill was considered to be a constructive step, Mr. Donley said that he considered it to be too small to create the incentive needed to provide the massive capital accumula tion which our country requires. Mr. Donley indicated that the Association supported the investment tax credit provisions of the House bill, but be lieved that the investment credit should be extended to cover new industrial structures. He also suggested that the full credit be available for those pollution control investments which are financed by industrial revenue bonds. He also supported reduction of the capital gains tax rate to encourage the creation of new innovative companies, but cautioned that lower capital gains taxes should not be offset by a reduction in other capital formation incentives. He said that MCA was pleased that the House-passed bill did not encroach upon the present principles applicable to for- ign operations of the chemical industry. The Senate Finance Committee began markup of the measure on September 7. Senate floor action on this legislation should occur the latter part of September, leaving no more than a week for a House-Senate conference and final passage of a tax bill before the planned early October congressional adjournment. **** CMA 037596 2 MCA opposes subjecting "tax expenditures" to a review and reauthorization-or-termination process. A proposed Senat "Sunset Bill" would require certain government programs to undergo such review every five years, in a written response to a question from Sen. Russell B. Long, chairman of the Senate Finance Committee, MCA President Robert A. Roland said the very premise supporting the concept of "tax expenditures" is questionable. It assumes "that a certain portion (and perhaps even all) of a taxpayer's income belongs to the government." Another conceptual problem is that the proposed Sunset Bill does not provide for a "sunset" review of the basic high income tax rate structure, although many "tax expendi tures" represent compensation for high income taxes. Mr. Roland also pointed out that such "tax expenditures" as the investment credit accelerated depreciation, ADR and long-term capital gains rates can be at least partly justified on the basis that they are necessary to offset the preferences the government enjoys under the income tax system. In the case of the depreciation deduction, for instance, inflation enables the government to tax more than the taxpayer's actual economic income. Sunset review also would duplicate normal reviews made by the Treasury and Congress during consideration of revenue acts, Mr. Roland said. They would also greatly disrupt the economy and undermine the efficiency with which many provisions, such as the investment credit and depreciation provision, operat . "Investment decisions cannot be made in such a climate of uncertainty," he stated. Mr. Roland concluded by noting that the sunset review procedure is an experimental concept. "It seems reckless to throw all 'tax expenditures' into the Sunset Bill at this time without clear evidence the process will work." **** MCA has urged Congress to take a practical approach to the question of fringe benefits for employees. In a letter to Congressman J. J. Pickle (D-Texas), chairman of the Task Force on Employee Fringe Benefits of the Committee on Ways and Means, Mr. Roland said any new legislation should con sider the public's general understanding of what is taxable income, MCA considers a 1975 Treasury Department discussion draft of the question as a good base for new legislation, since it provides a realistic, practical approach. The valuation techniques of the draft should be modified, however, MCA believes. **** CMA 037597 - 3- MCA continues to respond to EPA's Office of Toxic Sub stances' draft documents on testing guidelines, notification forms and rules proposed for Section 5 on Premanufacturing Notification for new chemical substances. Critical issues involved are (1) maintaining the chemi cal industry's flexibility to report whatever information the manufacturer has to support his contention that "no un reasonable risk" will occur on commercializing the new substance; (2) sustaining this position by establishing EPA guidelines which avoid "checklists" of specific tests and combinations of tests for each substance; (3) protecting trade secrets related to such new substances. **** A proposal by several members of Congress from Michigan that authorizes $50 million annually to assist victims of chemical poisonings could be considered on the floor of the House before the end of this session. A similar provision passed the Senate last October as a section of a bill that also gives more money to EPA's Office of Toxic Substances and that grants new broad rulemaking powers to the administrator. MCA is opposed to substantive amendments to the Toxic Substances Control Act and prefers the approach taken by the Subcommittee on Consumer Protection and Finance of the House Commerce Committee. Its bill provides for only a one-year increase in authorizations for EPA and defers consideration of the indemnification fund and rulemaking. House floor action is expected this month and final passage is anticipated. The Michigan lawmakers will attempt to attach their bill to H.R. 12441 as an amendment at that time. * * ** The Senate Environment and Public Works Committee com pleted work August 17 on the Oil Pollution Liability and Compensation Act of 1978. in addition to the formation of an oil spill fund, the bill would immediately create a new framework of liability for splllers of hazardous substances. After an 18-month study, a revolving fund based on a fee levied on chemical products also would be created. The fund would pay uncompensated damage claims. MCA opposes this legislation for the following reasons; o The liability provisions and revolving fund framework were designed to address the problem of oil spills. They are not readily transferable or appropriate for $he more complex area of hazardous substances. CMA 037598 o Payments from the hazardous chemical fund would result from a violation of Section 311 of the Clean Water Act. (The present regulations implementing Section 311 have been over turned by a federal court.) o The hearing record in the Senate on the hazardous substances portion of the bill is totally inadequate. o The House bill establishing a liability fund for oil does not address the hazardous substance question, and no hearings on a chemical fund have been held. The House conferees thus will be unprepared to deal with this complex problem. MCA has committed itself to supporting an interagency study group with members appointed by the President that would investigate all aspects of liability and compensation for spills of hazardous substances. Such a foundation is necessary for enactment of reasonable and effective legislation. ** ** MCA has challenged EPA's regulations on the prevention of significant deterioration (PSD) of air quality. In petitions for review filed August 17 in the U.S. Court of Appeals for the D.C. Circuit, MCA raises questions about the effective date of the regulations and about definitions of key terms. MCA believes that if EPA had followed the legislative intent in promulgating its implementing regulations, a signi ficant number of sources would not have to apply for a PSD permit and be subject to stringent requirements imposed by the regulations. The petition concerning the effective date has been consolidated with other petitioners. It states that EPA exceeded its statutory authority and/or acted arbitrarily and capriciously by making the regulations effective March 1, 1978. MCA's position is that the statute says the regulations are not to become effective until a state submits a plan implementing the PSD requirements. The court expedited review of this petition. MCA also takes issue with EPA's definition of several key terms, e.g,, source, modification, potential emissions. MCA claims the definitions are arbitrary and capricious and that EPA has exceeded its statutory authority. **** CMA 037599 -5- MCA has asked member companies to follow the develop ment of the State Implementation Plans that are required by the Clean Air Act, The plans will spell out the requirements for the prevention of significant deterioration of clean air areas and set timetables for achieving clean air in non-attainment areas. All states are developing plans, which must be submitted to EPA by January 1, 1979. If EPA fails to approve the plans by July 1, 1979, a state could be subject to severe sanctions. In cooperation with other trade associations, MCA is monitoring the development of the state implementation plans through the Environmental Management Committee. **** The Joint Task Force on Tank Car Compensation has recommended that the average compensation paid to tank car owners by the railroads be increased by about 48 percent in the first year of a proposed agreement. Compensation would be adjusted annually thereafter. The task force is composed of interested parties and was formed under the provisions of a proceeding of the Interstate Commerce Commission in Septem ber 1976. Representatives of MCA companies that funded the tank car compensation program agreed to the task force recommendations on August 11. Upon approval by the other parties to the proceeding, a request will be submitted to the ICC for approval of the findings and recommendations of the task force. The ICC probably will approve the recommendations, thus paving the way for making the new mileage compensation rates effective not later than the second quarter of 1979. **** Rising costs have forced MCA to raise its charges for administering subscribed projects. In a letter sent to the management contacts of partici pating companies, Albert C. Clark, MCA's vice president and technical director, said: ''Since October 1, 1974, in administering research pro jects of special interest to a limited number of companies and funded by them, MCA has required staff overhead reim bursement. During the recent annual audit of our financial records, MCA's increased costs to administer subscribed pro jects were called to our attention. Therefore, effective August 1, 1978, reimbursement to MCA will be increased from $400 to $450 per professional man-day. CMA 037600 4 -6 ''The overhead reimbursement amount from each project is keyed to the time devoted by the professional assigned as manager, thereby covering a proportionate share of normal supporting costs--secretarial, mail-room, telephone, rent, etc., as well as managerial supervision, "In addition to overhead reimbursement, the actual costs of associated staff travel and other outside extraordinary expenses are charged directly against the project as incurred." * ** * A research program studying the effects of phosgene on the lungs has been extended for one year. Administered by MCA, the research was begun in 1973 by Dr. Michael Frosolono and is being continued by him at the Albert Einstein College of Medicine. The program will cost $60,669, shared among the 14 supporting companies. **** Our last staff report indicated that Ambassador Robert Strauss was expected to announce on July 15 successful com pletion of the Multilateral Trade Negotiations. It had be n hoped that the agreement would be a cornerstone in the Bonn, Germany economic summit meeting. However, the trade agree ments declaration of July 13 was meager and disappointing. The expected "conclusion" became a status report on the framework of a complex agreement yet to be reached. The new deadline for completion of the negotiations is December 15, 1978. There has been no agreement, or even discussion, on chemical tariff cuts or on the American Selling Price. Som progress was made on nontariff-type agreements that are of minor interest to the chemical industry. It now appears that tariff cutting will be the last agreement to be reached in Geneva. The United States has not changed its original offer to cut almost all chemical tariffs by over 50 percent. The industry will continue to insist that a number of chemicals be withdrawn from the U.S. offer and thus be excepted from tariff cuts. **** H. Christopher Nolde, former chief counsel of the Hous Select Committee on Crime, has been named MCA's legislative representative for safety and health. Prior to joining MCA, Mr. Nolde was director of govern ment relations for the National Soft Drink Association. He also has served as an attorn y for th Federal Trad Commission. * *** CMA 037601