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AGENDA MEETING OF THE MCA BOARD OF DIRECTORS 3:30 p.m. , Tuesday, April 8, 1975 The Madison, Washing.tpn, D. C. I. Opening Remarks and Introduction of Guests II. Minutes of Meeting of March 11, 1975, Including Financial Statement for Nine Months Ended February 28, 1975 III. Business Items (a) Budget and Financing for Fiscal 1975-76 Preliminary Report (b) Appointment of Committee Members IV. Report of Director of Government Relations V. Reports of Committees (a) Plastics Committee Henry (Hank) Avery, Chairman (b) Safety and Fire Protection Committee J. J. (Jim) Walker, Chairman (c) Transportation and Distribution Committee G. A. (George) Coffenberg, Chairman VI. Report of the President (Attachment) Next Meeting o the Board of Directors - 10:30 a.m. , Tuesday, May 13, 1975, Union Club, Park Avenue and 69th Street, New York, N. Y. CMA 070816 1509 MINUTES of the two hundred thirty-ninth meeting of the Board of Directors of the Manufacturing Chemists' Association, Inc. , held at The Madison, Washington, D. C. , Tuesday, April 8, 1975, at"3;30p.m. Directors: Edward R. Kane, Chairman Jack B. St. Clair, Vice Chairman James G. Affleck James H. Gardner Warren M. Anderson James M. Gill Earle B. Barnes John R. Hall Frederick L. Bissinger Harry T. Marks Harry W. Buchanan Harry D. McNeeley E. E. Chipman H. Barclay Morley Thomas C. Dabovich Robert M. Morris William J) Driver Joseph A. Neubauer J. Morris Evans Robert T. Powers Thomas S. Farmer Albert J. Royce, Jr. Alternates: Clifford M. Andrews (for Harry T. Marks) David H. Bardford, Jr. (for Frederick L. Bissinger) Werner C. Brown (for Harvey J. Taufen) Charles R. Carson (for John F. Welch, Jr. ) Robert C. Hyndman (for Thomas C. Dabovich) Harold S. Mickley (for H. Barclay Morley) W. C. Roher (for Z. D. Bonner) Albert J. Royce, III (for Albert J. Royce, Jr, ) George W. Russell (for James G. Affleck) E. A. Von Doersten (for John R. Hall) Outside Counsel: Lloyd N. Cutler John H. Pickering Staff Counsel: Bruce M. Barackman Secretary- Treasurer: George E. Best By Invitation: *. Henry Avery, USS Chemicals Division of United States Steel Corporation Marjorie V. Campbell, MCA Albert C. Clark, MCA George A. Coffenberg, Stauffer Chemical Company B. D. Forrow, Allied Chemical Corporation D. J. MacLennen, USS Chemicals Division of United States Steel Corporation V. H. Peterson, MCA John E. Slavick, MCA W. M. Stover, MCA J. J. Walker, Union Carbide Corporation Samuel L. Watts, MCA John C. Zercher, MCA CMA 070817 'V 1510 Chairman Kane opened the meeting by calling for self-introduction 0f those present in turn. L MINUTES OF MARCH 11, 1975, MEETING Minutes of the March 11, 1975, Board meeting, as distributed, including the financial statement for nine months ended February 28, 1975, were duly approved. II. REPORT OF THE SECRETARY-TREASURER Exhibit A. III. BUSINESS ITEMS (a) Preliminary Report on Budget and Financing for Fiscal Year 1975-76 As chairman of the Executive Committee, Mr. McNeeley re ported as follows: At their joint meeting earlier today, the Executive and Finance Committees examined the budget and financing for fiscal year 1975-76 as proposed by Association management, and recom mend adoption. The amounts involved are essentially unchanged from those previewed last month, as briefly described in the Summary of the March 11th Executive Committee meeting dis tributed to Directors with the Board minutes of the same date. Full particulars will be mailed to all Directors for their study in advance of the May 13th Board meeting when this matter will be presented for decision. The proposed budget provides for expenditures approximating $2. 79 million, consisting of $2. 43 million for operations and $0. 36 million for projects. This compares with the current year budget of $2.42 million, corresponding to an increase of 15%. The oJy extraordinary increase is to provide for the broadened scope of legal services by outside counsel, as approved by the Board in January. Next year's revenue is estimated at $3. 0 million, consisting of $2. 65 million from membership fees, $0. 18 million investment income, and the balance from meetings, sale of publications, and overhead reimbursement from subscribed projects. While the last-named will appear in our financial statements as income, in fact it will merely offset corresponding staff expense' included in th budget. While continuation of the existing membership fee scale will V * CMA 070818 1511 involve no change in fees for about one-third of our member companies, we are conscious that 1974's inflationary circum stances will effect substantial fee increases for some. We count on their good will and understanding in accepting this ''up11 phase of cyclical change, because the budget is not being increased accordingly and, even with no leeway for unanticipa ted additional needs, the prospective excess of income over expense will barely sustain the six months' level of reserves it is deemed important to maintain. As the current fiscal year began, drawing on the reserves to the extent of about $140, 000 was in prospect. It is presently expected that no more than $115, 000 will be needed, thanks to investment income being higher than originally estimated. The proposed Plastics Financial Package for 1975-76, separately funded by 56 MCA member companies participating in the Plastics Group, calls for the same budget level as in the current year, namely, $72, 000, of which $60, 000 will be derived from fees and the balance from accumulated surplus. (b) Study of the Economic Impact of Toxic Substances Legis lation Mr. Driver reviewed the circumstances (detailed in Exhibit B) leading up to the Executive Committee's action earlier today recommending subject study, it being understood that it is to be kept under close surveillance by a group of designated MCA representatives to insure that it will follow a productive course expeditiously and will include an estimate of cost and timing of availability in reference to training professional personnel and establishing laboratory facilities needed, and also include an appraisal of the impact on small companies. ON MOTION, duly made and seconded, it was VOTED: That the indicated study of the economic impact of pending toxic sub stances control legislation be approved, funding of $95, 000 to derive from an amendment of the Association's budget for the current fiscal year. In so doing, it was realized this expenditure would alter the financial picture presented in minute 111(a) above. (c) Appointment of Committee Members were approved as listed in Exhibit C. A Appointments CMA 070819 T 1512 (d) Toxic Substance3 Control Legislation (S. 776) Upon invitation by Chairman Kane, Mr. Cutler commented on the vital importance of this legislation to the chemical industry and of the participation of Outside Counsel in MCA conferences with the Senate staff. He indicated particular efforts to narrow the definition of toxic substances (e.g. to exclude research chemicals), remedy inequitable procedures (including those concerning rule making), and modify quota provisions. He stated the outcome is difficult to estimate, and foresaw need arising for "instant" access to company executives who can react to alternatives which may be presented. Mr. Pickering spoke of probable timing of Senate and House consideration, and emphasized the importance of early access to any statements submitted by member companies. Mr. Forrow referred to discussion of this matter by the Legal Advisory Committee earlier today and of the aim to sharpen the issues involved to enhance understanding and preparedness on the part of their executive colleagues. (e) Environmental Control Expenditures - Survey of Member Companies Chairman Kane urged attention be given to returning the survey reports as soon as possible, commenting that they have so far been received from only about one-third of the membership. He stressed the heightened significance that attaches to full coverage. (f) 103rd Annual Meeting Mr, Barackman reviewed the schedule of Director-related events in prospect for the upcoming Annual Meet ing, planned to be the same as last year. (Full details will be mailed to Directors well in advance. ) IV. REPORT OF DIRECTOR OF GOVERNMENT RELATIONS Mr. Stover's prepared report is attached as Exhibit D. He referred particularly to a tabulation, "Status of Legislation of Interest to MCA, " and a listing of members of Congress showing those expected at the Association's reception for Washington officials this evening, copies of both having been distributed to those present. [Record of attendance at the re ception is attached as Exhibit E. ] V. REPORTS OF COMMITTEES Reports were presented by the following: Mr. Henry Avery, Chairman Plastics Committee Exhibit F Mr. J. J. Walker, Chairman Safety and Fire Protection Committee Exhibit G CMA 070820 1513 Mr. G. A. Coffenberg, Chairmrr an Exhibit H Transportation and Distribution Committee VI. REPORT OF THE PRESIDENT Mr. Driver amplified the energy conservation item in his Staff Report (Exhibit I) by remarking on FEA's embarking on a "companyspecific" phase of its voluntary program through direct contact with all MCA member companies (and companies in other selected industries as well), requesting that each company report a conservation goal - in excess of the industry average goal - and furnish quarterly reports. He mentioned having written to MCA Executive Contacts to alert them. Mr. Driver also spoke of the deliberations of MCA's intercommittee group on chemical hazard evaluation (previously referred to as chemical toxicology information) in which reasons for publishing data rather than storing it in a data bank and for financial and organizational separation of the Chemical Industry Institute of Toxicology from MCA, yet with close pro fessional liaison, were further developed. He described the activities of the National Commission of Water Quality in its evaluation of the Federal Water Pollution Control Act, and chemical industry participation in the Commission's meetings at points around the country as well as in cooperation with the Commission's staff in reviewing reports prepared by contractors on various chemical industry cate gories and river basin studies. Certified correct; Edward R. Kane Chairman of the Board C-i-1 <_ George E. Best Secretary-Treasurer CMA 070821 REPORT OF THE SECRETARY-TREASURER April 8, 1975 Dollar amounts rounded from tabular details ($000) EXHIBIT A INCOME & EXPENSE June 1, 1974 - Mar, 31, 1975 - 10 Months (83%) Income Membership Fees Other $2,020 320 Expense - Operations " Projects $1,563 259 $2,340 $1,822 Percent of Budget 101.8157, 108.4757, 102.6777, 76.2817, 69.6247, 75.2587, ASSETS (As of March 31, 1975) Cash Investment Miscellaneous $ 109 3,271 2 $3,382 CMA 070822 CMA 070823 mmmsmmmmamm* SlAltMtNl OK HNANUA1. POSITION March 31, 1975 BALANCE SHEET Assets Cash National Savings & Trust - Commercial Account National Savings & Trust - Payroll Account Imprest Funds / $ 100,692 6,000 2,600 $ 109,492 Bank Certificates of Deposit Bank Repurchase Agreements U. S. Government Securities 1). S. Government Agency Securities Corporate Securities $ 400,000 200,000 712,677 i ,152,406 805,300 3,270,583 Deposits U. S. Government Printing Office American Airlines Account Receivable Travel Advances $ 200 425 625 1,786 $3,382,486 Liabilities D. C. Use Tax Liabilities & Fund Balances Reserve Deferred Compensation Fund Balances Restricted (Schedule I (e)) Unrestricted - From Previous Fiscal Years - Current Fiscal Year $1,311,801 518.077 $1,461,542 1.829.878 $ 94 90,972 3,291,420 $3,382,486 INCOME t EXPENSE INCOME Membership Dues & Entrance Fees Income from Investments Publication Sales *{l)Meeting & Special Funds (Schedule I (d)) Overhead Reimbursement - Subscribed Projects Miscellaneous Total Income EXPENSE Management Technical - General Technical - Chemtrec Public Relations Government Relations Information Service Office Administration Total Expense *(2) Income less Expense FOOTNOTES: *(d Net Income on Completed Projects *<2) Total General Program Expense Fiscal Year 1974-75 Budget Program Expense (above) Expenditures from Project Funds carried over from previous Fiscal Year (Schedule I (c)) $2,020,585 161,024 80,787 6426 8,607 4,448 $2,340,277 $ 334,294 558,663 138,559 368,514 193,746 56,230 152,194 $1,822,200 $ 518,077 $1,822,200 9.165 $1,831,365 CMA 070823 mmmm ilAIEMtNl' Ot- FINANCIAL POSITION March 31, 1973 BALA NCE SHEET Assets Cash National Savings A Trust - Conmercial Account National Savings 6 Trust - Payroll Account Imprest Funds V $ 100,692 6,000 2.800 Investments Bank Certificates of Deposit Bank Repurchase Agreements U. S. Government Securities U. S. Government Agency Securities Corporate Securities $ 400,000 200,000 712,877 1,152,406 805,300 $ 109,492 3,270,583 Deposits U. S. Government Printing Office American Airlines Account Receivable Travel Advances $ 200 425 625 1,786 $3,382,486 Liabilities D. C. Use Tax Liabilities & Fund Balances Reserve Deferred Compensation Fund Balances Restricted (Schedule I (e>) Unrestricted - From Previous Fiscal Yeara - Current Fiscal Year $1,311,801 518.077 $1,461,542 1.829.878 $ 94 90,972 3,291.420 $3,382,486 INCOME 6. EXPENSE INCOME Membership Dues & Entrance Fees Income from Investments Publication Sales *(l)Meeting A Special Funds (Schedule I (d)) Overhead Reimbursement - Subscribed Projects Klscellaneoua Total Income EXPENSE Management Technical - General Technical - Cheatrec Public Relations Government Relations Information Service Office Administration Total Expense *(2) Income less Expense FOOTNOTES: *(1) Net Income on Completed Projects *(2) Total General Program Expense Fiscal Year 1974-75 Budget Program Expense (above) Expenditures from Project Funds carried over from previous Fiscal Year (Schedule I (c)) $2,020,585 161,024 80,787 64,826 8,607 4,448 $2,340,277 $ 334,294 558,663 138,559 388,514 193,746 56,230 152,194 $1,822,200 $ 518,077 $1,822,200 9,165 $1,831,365 SCHEDULE I RESTRICTED FUNDS & MEETING ADVANCES l* Carry-Over of Budgeted Funds GR-1 Economic Study * Hon-Budgeted Funds & Meetings Meetings, Workshops & Symposia Tank Car Mileage Compensation TEC Audio/Visual Aids CPC Audio/Visual Aids Vinyl Chloride Research - Inhalation Vinyl Chloride Research - Epidemiological Vinyl Chloride Research - Dow Studies Vinyldene Chloride Monomer - Research Styrene Monomer - Research Ethylene Dichloride - Research Phosgene Safety Research Fluorocarbons Research Phthalate Esters Research Loss Data Bank Project Patents Monitor Chemical Industry Trade Advisor Total - Non-Budgeted Funds & Meetings Balance June 1, 1974 (a) $ 13,584 $ 63,974 24,348 126,564 11,361 22,142 17,890 10,922 $ 277,201 CMA 070824 Plastics Group Financial Package $ 92,318 Total $ 383,103 Receipts (b) Current Fiscal Year Expenditures (c) Transfers To Income (<*) VLc\i IV, March 31. 1975 <e) $ $ 178,143 - 85 324 11,048 12,708 134,394 447,187 256,754 16,044 43,600 438,026 16,000 3,000 18,071 $1,575,384 $ 9,165 $ 131,045 - 3,216 342 60,975 6,350 70,000 - 2,880 111,758 11 11,438 2,292 15,239 $ 415,546 $ $ 64,826 - 245 - 385 746 525 350 6,356 $ 73,433 $ 4,419 $ 46,246 24,348 (3,131) (18) 76,392 17,719 64,009 446,441 256,229 16,044 62,512 337,802 10,911 4,562 708 2,832 $1,363,606 $ 59,170 $ 57,971 $ $ 93,517 $1,634,554 $ 482,682 $ 73,433 $1,461,542 SCtlPDl/LF IT BUDGET PROGRAM EXPENSE n, \.vn EmKployees {v, AA. uctt.uhaorl ized, MANAGEMENT EXPENSE u BUDGET EXPENSE 22 10 TECHNICAL CHEMTREC BUDGET EXPENSE 7 BUDGET 19 7 PUBLIC RELATIONS EXPENSE 12 BUDGET 12 GOV'T RELATIONS EXPENSE 6 BUDGET 9 INFO SERVICE EXPENSE 3 BUDGET 3 OFFICE EXPENSE u ADMIN BUDGET 11 TOTAL TO DATE 10 MONTHS EXPENSE BUDCE1 74 71 OPERATING EXPENSE Salaries & Related Expense 2)Retirement Plan A Group Ins, Hasp. Ins, 6 Health Plan Legal Fees * Expense Consul tantsMnvestment Serv, $219,911 7,235 1,960 55,742 - $214,667 50,680 2,177 22,093 2,063 $307,016 $298,958 7,983 57,200 3,716 5,063 2,667 5,000 a- Audi t Rent 6 Premises Expense faxes 6. Insurance Supplies .S Gen. Office Exp. Furniture e* Equipment 2,000 11,923 7,231 5,494 2,005 2,083 11,315 7,638 5,417 833 _ 21,740 13,384 14,952 2,467 _ 20,743 14,081 14,000 1,250 9 91,754 9 91,033 1,746 12,198 533 541 -- -" _ 6,168 20,641 2,111 559 _ 5,592 21,017 2,667 1,208 $169,734 $168,691 2,744 19,052 2,124 3,242 -- -- 14,847 8,356 6,784 361 _ 13,808 8,762 7,875 208 $121,603 $126,409 2,495 17,541 1,136 2,162 16,821 15,000 - _ 10,040 5,717 4,734 1,479 _ 9,529 6,523 5,833 1,583 $ 42,054 $ 42,867 2,245 15,798 541 898 -- -- _ 4,888 2,181 534 240 _ 4,631 2,378 625 83 $105,731 2,104 2,030 - " $110,550 4,414 2,468 - - - 19,801 6,960 9,009 1,360 _ 15,502 9,157 5,833 167 $1,057,803 $1,053,175 26,552 177,083 11,940 16,551 75,230 42,083 - 2,083 2,000 89,407 64,470 43,618 8,471 2,083 81,120 69,556 42,250 5,332 Printing To 3 L'piione & Telegraph Postage lravel a Entertainment Meeting Expense Periodicals, Books, etc. Organizational Memberships Contingency 2,964 4,351 2,173 4,335 4,388 396 1,445 841 2,167 4,067 2,500 5,833 9,000 375 2,208 4,167 746 10,322 18,268 16,326 294 1,368 1,928 - 833 10,458 18,750 21,667 750 1,333 2,168 - 13,639 437 628 - 284 59 - _ 15,928 833 2,292 * 292 83 - 3,737 6,702 30,476 16,773 42 1,536 713 - 3,125 7,450 32,500 20,833 292 1,292 833 - 576 4,915 5,079 9,094 2,791 5,443 1,823 * 583 5,683 6,250 8,333 2,917 7,083 2,771 _ 1,219 450 464 - 1,371 43 - _ 1,180 708 917 - 1,167 38 - 1,365 4,611 (926) 14 - 60 75 - 1,000 4,100 1,333 167 - 83 67 - 9,388 45,759 55,957 47,634 7,515 10,458 6,086 841 7, 708 48,866 62,874 60,042 12,959 11,625 8,168 4,167 Operating Expense Totals $334,294 $349,493 6423,177 $472,254 $138,559 $153,684 $264,929 $287,963 $193,746 $218,200 $ 56,230 $ 71,290 $152,194 $154,841 $1,563,129 $1,707,725 PROJECTS Technical Air Quality ' (UFood. Drug f* Cosmetic Chemicals Water Resources Mut Li-Commit tee/Transportation 'lulti-Commit tee/Publications i2> i rade Advisor 9 1,250 9 4,167 2,000 1,667 41,350 38,333 814 2,250 40,072 60,000 50,000 58,333 I $ 1,250 $ 2,000 41,350 814 40,072 50,000 4,167 1,667 38,333 2,250 60,000 58,333 Public Relations Community Relations Consumer Information - Environmental Quality Internal Publications Media Relations * Academic - Industry Study College 4. Hi School Teacher Awards Education Exhibits Education Publications $ 12,057 $ 16,042 11,081 20,833 24,408 30,250 36,327 34,167 10,489 14,750 65 625 1,332 11,917 2,322 3,333 25,504 12,500 12,057 11,081 24,408 36,327 10,489 65 1,332 2,322 25,504 16,042 20,833 30,250 34,167 14,750 625 U ,917 3,333 12,500 Information Service Chemical Statistics Series Project Totals 6 9 $135,486 $164,750 9 9 9123,585 $144,417 $ $ $ - $ 958 $ - $ 958 $ $ 958 $ 259,071 $ 310,125 COMBINED TOTAL $334,294 9349,493 $558,663 $637,004 $138,559 $153,684 $388,514 $432,380 $193,746 $218,200 $ 56,230 $ 72,248 $152,194 $154,841 $1,822,200 $2,017,850 -fly Budget Increase approved by Board of Directors'`October 8, 1974, for support of the NAS Symposium on Specifications for Food Ingredients $2,000 -f2) Transfer of Budget Funds approved by Board of Directors November 25, 1974, from "Projects - Trade Advisor" to "Operating Expense - Retirement Plan" $60,000 CMA 070825 I EXHIBIT B Proposal for a Study of the Economic Impact of Toxic Substances Legislation In presenting the industry's views, MCA and others have repeatedly emphasized the adverse economic impact of proposed toxic substances legislation, even if modified to include proposals for greater selectivity and effectiveness in decreasing risk to health and environment. Although in past sessions of Congress individual companies have submitted cost data, no estimate of the total impact on the entire chemical industry has been introduced in the record. Recently the Environmental Protection Agency (EPA) in its report to the Senate estimated the total cost for the entire chemical industry, limited to added testing costs, at $45 million per year. This figure, subject to considerable question, will stand unless the industry provides a more realistic estimate. The EPA cost does not include the ripple effect as these costs are passed downstream to the full spectrum of products in domestic and export economies. Nor does the EPA figure include fthe fewer but probable greater costs resulting from regulating production or prohibition of manufacture. Within MCA membership very few companies have made detailed estimates of the total economic impact. Estimates vary substantially, in part because there does not seem to be a uniform consideration of all the costs which may be incurred to comply with regulations for implementing the Act. For these reasons MCA's Toxic Substances Control Group believes that it is important that the industry's cost, developed on a uniform basis, be introduced in the record. Therefore it is proposed that MCA engage an economic consultant to develop the necessary data at a cost of $95,000, Although it would be desirable to include an estimate in the Senate record, our ability to do so in time appears questionable. It is believed imperative, however, that we be prepared to submit cost data for the record in the House hearings expected to begin in early June. A Approval is recommended. MCA EC - 4/8/75 BC - 4/8/75 CMA 070826 - APPOINTMENT OF COMMITTEE MEMBERS EXHIBIT C (a) Engineering Advisory Committee H. B. Addoms, Hooker Chemicals & Plastics Corp. -- As Vice Chairman J. E. Turner, Dow Chemical U. S. A. (b) Food, Drug, and Cosmetic Chemicals Company James J, Bonin, Shell Chemical Company, A Division of Shell Oil Company Judith A. Tins, Celanese Corporation J. Coleman Weber, Monsanto Company (c) Government Relations Committee Harry D. Williams, Ashland Oil, Inc. (d) Occupational Health Committee Emil E. Christofano, Hercules Incorporated -- As Chairman* Charles F. Reinhardt, M. D., E. I. du Pont de Nemours & Company -As Vibe Chairman* (e) Plastics Committee J., H. DeNike, Shell Chemical Company, A Division of Shell Oil Company* J. J. Gallery, Hooker Chemicals & Plastics Corp.* M. J. Rhoad, The Goodyear Tire & Rubber Company, Chemical Division* Thomas A. Sparta, The Dow Chemical Company* Samuel J. Talucci, Rohm and Haas Company* (f) Public Relations Committee Weldon Miller, Gulf Oil Company-U.S. (g) Water Resources Committee R. S. Dugas, UNIROYAL, Inc. J. L. Hamilton, II, USS Chemicals Division of United States Steel Corporation J. C. Schwegmann, Kaiser Aluminum and Chemical Corporation Russell S. Snell, CPC International Inc. * Effective June 1, 1975. MCA-4/8/75 CMA 070827 EXHIBIT D REPORT BY THE DIRECTOR OF GOVERNMENT RELATIONS WILLIAM M. STOVER APRIL 8, 1975 NATIONAL ENERGY PROGRAM IN THE SPOTLIGHT The Congress returned from Easter recess April 7 to meet the challenge of enacting an energy package by early May. This may prove an insurmountable task considering the many helping hands involved in the issue. More than 500 bills covering various aspects of the energy crisis have been introduced in the Congress thus far. Because a number of committee jurisdictions are involved, the Presi dent's recommended energy package was split into parts for referral to the appropriate committees. The major problems, however, have arisen because of differing philosophies and approaches to the task of framing a comprehensive energy program for the Nation. The freshmen Democrats, primarily liberals, oppose increased gasoline taxes, but favor a stiff tax on "gas-guzzling" autos. They support fixed quotas on oil imports, allocation and rationing, roll-backs, and continued government controls. The Democratic Leadership favors a somewhat more moderate course, advocating a fuel-conscious auto market created by taxing horsepower through an excise tax. They advocate a five-cent in crease in the gasoline tax to finance a trust fund for domestic energy exploration and development of alternative fuel resources or sources. They are indecisive on controls, but favor establish ment of a new agency to deal with import quotas, allocation and rationing. The Administration wants to control fuel consumption through market price mechanisms, rather than through quotas, allocation and rationing. President Ford has called for import taxes on petro leum and petngleum products, excise taxes on domestic production, deregulation of oil and gas, the creation of a price floor to en courage domestic production, and some form of a windfall profits tax, assuming oil and gas will be deregulated. V - TCMMAA n077D0R892R8 2 Representative A1 Ullman, Chairman of the House Ways and Means has introduced H.R. 5005 to promote the conservation and conversion* of energy. His bill contains a series of recommendations by the seven task forces of the Ways and Means Committee, and a number which came from testimony taken from energy experts in recent hear ings. The Ways and Means Committee will have a major role in creating an energy bill because many of the energy proposals in volve forms of taxation. H.R. 5005 is the working model for Committee markup sessions. We understand Mr. Ullman hopes to have a bill out of committee by early May. However, delays and controversy may occur due to the enlarged liberal makeup of the Committee membership. Ullman and the Administration have been working closely in an effort to produce a bill the President can live with, and at the same time can be passed by the current Congress. Last week he was quoted as favoring "some kind of price-economic-scarcity trigger" for a gaso line tax "so we can get past the hurdles and roadblocks that are being thrown at us". Some 101 House members had petitioned the chairman to drop the gas tax idea, but he maintains that the only other alternative would be rationing, which has little support. i Manor provisions of H.R. 5005 follow: . - seven-cent gasoline tax beginning next January 1; - tax refund of $33.60 -- equal to seven cents for each of the first nine gallons of gasoline per week. The tax will go to 15 cents a gallon by 1977. Increases of seven or eight cents a year will be levied through April 1, 1981; - exemptions from the tax include farm use, commercial aviation, local transit systems, diesel fuel consumed in commercial transport; - 1977 car models getting less than 21 mpg to be taxed in the first year from $200 on cars getting less than 14 mpg down to $40 for those rated below 21 mpg. Rates gradually increase until 1981 when the tax varies from $1,000 on new cars getting less than 16 mpg down to $40 for cars getting less than 25 mpg; - authorizes quotas on petroleum imports; - ^Limits tariff on petroleum imports to $1.20 a barrel; CMA 070829 3 - allows the President to create an import licensing system for determining entitlements to imported petroleum through the use of sealed-bid public auctions; - creates a strategic petroleum reserve; - levies a graduated windfall profits tax on domestic oil and natural gas based on the assumption of gradual deregula tion of oil and gas prices; - establishes a ten-year energy trust fund for the development of new energy technology, new energy resources and local and regional transportation projects; - limits foreign tax credits allowed on foreign oil and gas extraction to 10 percent over U. S. tax rate; - starting in 1977, levies excise tax of 11 cents a barrel on industrial petroleum use, increasing by 11 cents a year until 1982. Industrial gas use tax beginning in 1977 at three cents per 1,000 cubic feet -- increasing to 12 cents in 1980, OTHER ENERGY ACTIONS During the Easter recess the House Interstate and Foreign Com merce Subcommittee on Energy, under the chairmanship of Rep, Dingell, is drafting a bill covering policy parameters of the energy package. Reportedly, Dingell and Ullman are coordinating their efforts and hope to combine their bills in one package before the legislation comes to the House floor. The Senate Finance Committee will await House action on H.R. 5005, but other Senate committees have acted on energy-related bills. The controversial issue of natural gas deregulation is now under consideration in the Senate Commerce Committee as it prepares for markup on S. 692, the Natural Gas Production and Conservation Act of 1975, I However, this bill would not only continue regulation of inter state naturai gas, but would extend regulation to gas in intrastate commerce. It would set a single nationwide lease price for intrastate and interstate "new" gas supplies ranging from 40 to 75 cents per mcf. i CMA 070830 4 The producers of natural gas have attempted to convince mem bers of the Senate Commerce Committee that deregulation is necessary in order to encourage exploration and production of natural gas. Despite the arguments submitted by the natural gas producers, it appears that the majority of the Senate Commerce Committee members favor regulation and are likely to report out a bill in the near future which will increase Federal regulation of the natural gas industry. The producers of natural gas have appealed to natural gas consumers to lend their support for deregulation of new natural gas at the wellhead. Standby Energy Controls, S. 622, extends the Emergency petroleum Allocation Act of 1973 through June 30, 1976 (present law expires August 31, 1975); prohibits any increase in price of "old" oil with out Congressional okay; establishes energy conservation goals and programs to be administered by State governments; directs the FEA Administrator to set Federal standards and programs for energy con servation; and gives the President various standby authorities. S. 622 was reported by the Senate Interior and Insular Affairs Com mittee on March 5. Floor debate was set aside for consideration of H.R. 2166, the Emergency Tax Reduction Bill, but will resume when the Senate convenes following the Easter recess. Oil Price Review, S. 621, basically freezes the price of oil for 90 days. S. 621 was reported by the Senate Interior and Insular Affairs Committee on March 7, and will no doubt be taken up on the Senate floor after the Easter recess. A House bill, H.R. 4035, pro viding for Congressional oil price review was reported by the House Interstate and Foreign Commerce Committee on March 14. The Rules Committee granted a rule for floor consideration on March 20. A National Energy Production Board, advocated in S. 740, would be responsible for exploration and development of domestic energy resources. The Senate Interior and Insular Affairs Committee has scheduled hearings on S. 740 for April 14-15. MULTINATIONALS AND THE TAX REDUCTION ACT The newly-passed Tax Reduction Act of 1975 contains certain provisions affecting the taxation of foreign source income of U. S. companies. The major impact of these provisions *is on the petroleum industry. The effect on most chemical companies is relatively limited CMA 07083j The present tax deferral treatment of the income of foreign subsidiaries of U. S. companies is retained except for so-called tax haven income (such as holding-company earnings and income earned in one foreign country where the title is passed in another), which will be taxed currently. Tax haven income which is rein vested in less-developed countries will also be taxed currently. The new law also contains a provision which would deny Domestic international Sales Corporation (DISC) benefits to income from the export of natural resources (products for which a depletion allowance is provided). Insofar as the petroleum industry is concerned, the Tax Reduction Act reduced the "excess" tax credit -- the difference between the 48% U. S. tax rate and a larger foreign tax -- and denied any foreign tax credit with respect to oil in which a company does not have an economic interest -- that is, where the oil is owned by a foreign government. The new law also takes away the oil companies' option of figuring the tax credit on a country-by-country basis. The impact of these provisions is substantially less than it would have been had the provisions of the Senate version of the Tax Reduction Act been adopted. It is significant to note, however, that the House-Senate conferees on the tax bill agreed that the taxation of foreign source income should be further reviewed in the near future by both the Ways and Means Committee and the Senate Finance Committee with an eye toward further reform and revenue gains from foreign income. CMA 070832 EXHIBIT E GUEST LIST for the PRESIDENT'S ANNUAL RECEPTION AND BUFFET TO MEET THE OFFICERS AND DIRECTORS of the MANUFACTURING CHEMISTS ASSOCIATION TUESDAY, APRIL 8, 1975 THE MADISON HOTEL WASHINGTON, D. C. CMA 070833 rrNlTED STATES SENATE jion. gon. yon. yon. yon. yon. yon. yon. Joseph R. Biden, Jr. (Del.) Howard w. cannon (Nev.) Clifford P. Case (N.J.) Jake Garn (Utah) Russell B. Long and Mrs. Long (La. ) Frank E. Moss (Utah) William v. Roth, Jr. (Del.) Harrison A. Williams, Jr. (N.J.) n. S. HOUSE OF REPRESENTATIVES yon. Glenn M. Anderson and Mrs. Anderson (Calif.) yon. Bill Archer (Tex.) yon. Lindy Boggs (La.) yon. John B. Breaux (La.) yon. James Broyhill (N.C.) yon. Charles J, Carney (Ohio) Hon. Tim Lee carter and Mrs. Carter (Ky.) yon. Del Clawson (calif.) yon. Lawrence Coughlin (Pa.) Hon. James Delaney (N.Y.) Hon. Butler Derrick (S.C.) Hon. Samuel L. Devine (Ohio) Hon. Robert Duncan (Oreg.) Hon. Pierre s. (Pete) du Pont (Del.) Hon. Millicent Fenwick (N.J.) Hon. Daniel J. Flood (Pa.) Hon. L. H. Fountain (N.C.) Hon. Don Fuqua (Fla.) Hon. Benjamin A. Gilman (N.Y.) Hon. Willis D. Gradison, Jr. (Ohio) Hon. Gilbert Gude (Md.) Hon. Tim L. Hall and Mrs. Hall (111.) Hon. John Paul Hammerschmidt and Mrs. Hammerschmidt Hon. Henry Helstoski (N.J.) Hon. Allan Howe and Mrs. Howe (Utah) Hon. Carroll Hubbard, jr. and Mrs. Hubbard (Ky.) Hon. William J. Hughes (N.J.) Hon. Henry J. Hyde (14.1.) Hon. Harold T. Johnson and Mrs. Johnson (Calif.) Hon. James R. Jones (Okla.) Hon. John J. LaFalce (N.Y.) Hon. William Lehman (Fla.) Hon. Elliott H. Levitas (Ga.) Hon. Gunn McKay (Utah) Hon. Ray J. Madden (Ind.) Hon. James R. Mann (S.C.) Hon. James G. Martin (N.C.) Hon. Dawson Mathis (Ga.) Hon. Helen S. Meyner (N.J.) Hon. Norman Y. Mmeta and Mrs. Mineta (calif.) Hon. Joseph G. Minish (N.J.) Hon. Gary A. Myers (Pa.) Hon. John T. Myers (Ind.) (Ark.) CMAOT0834 1! 2 Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. Hon. George M. O'Brien and Mrs. O'Brien (111.) Peter A. Peyser (N.Y.) W. R. poage (Tex.) James Quillen (Tenn.) Tom Railsback (111.) William j. Randall (Mo.) Matthew j. Rinaldo (N.J.) Theodore m. Risenhoover (Okla.) Ray Roberts (Tex.) Benjamin S. Rosenthal (N.Y.) Richard T. Schulze (pa.) Robert G. Stephens, Jr. and Mrs. Stephens Leonor K. Sullivan (Mo.) Steven D. Symms (Idaho) Lionel Van Deerlin (Calif.) Charles A. Vanik and Mrs. Vanik (Ohio) Gus Yatron (Pa.) Clement J. zablocki (Wis.) (Ga.) CONGRESSIONAL STAFF MEMBERS Mr. Donnald K. Anderson Floor Manager, Office of the Doorkeeper, U.S. House of Representatives Mr. John Barry Administrative Assistant to Rep. Fish (N.Y.) Mr. Dave Blankenship Office of Rep. Risenhoover (Okla.) Mr. John Breitenberg Legislative Assistant to Rep. Gilman (N.Y.) Mr. Michael Brownlee Professional Staff Member, Senate committee on Commerce Ms. Mr. Mr. Mr. Mr. Loren carlson Administrative Assistant to Rep. pressler (s.Dak.) John Cevette Legislative Assistant to Sen. Cannon (Nev.) Michael Clark Executive Assistant to Rep. Flood (Pa.) Curt Clinkscales Office of Rep. Mann (S.C.) William Cochrane Staff Director, Senate Committee on Rules and Administration Mr. Charles Conklin Staff Director and chief Clerk, House Committee on Interior and Mr. Mr. Insular Affairs William Crosby Minority Counsel, House committee on Rules Philip Cummings and Mrs. Cummings Counsel, Senate Committee on Public Works Mr. Olson Daten Administrative Assistant to Sen. Haskell (Colo.) Mr. Fred Davis Staff Assistant to Sen. Bellmon (Okla.) Ms. Mary Edwards Legislative secretary to Rep. Kemp (N.Y.) Ms. Yvonne Eider personal Secretary to Sen. Burdick (N.Dak.) CMA 070835 3 r. Clifton w. Enfield and Mrs. Enfield Minority Counsel, House Committee on public Works Mr. Orman 3. Fink Minority staff Director, House Committee on Banking and currency Mr. Thomas Fleming Office of Rep., Carney (Ohio) Mr, Richard Frisch Special Assistant to Rep. Solarz (N.Y.) Mr. Joseph Gemmell Special Assistant to Rep. Yatron (Pa.) Mr. jay Gerken Legislative Aid to Rep, Hughes (N.J.) Mr. Richard Grundy professional Staff Member, Senate committee on interior and Insular Affairs Mr. Bailey Guard Minority Staff Director, Senate committee on Public Works Mr. Edward Hamberger Special Assistant to Sen. Scott (Pa.) Mr. Kenneth R. Harding Sergeant at Arms, U. S. House of Representatives Mr. Roger Harrison Special Assistant to sen. Biden (Del.) Mr. Dayle Henmgton Administrative Assistant to Rep. Poage (Tex.) Mr. William Hildenbrand Minority Secretary, United states Senate Ms . jeanna Houser iress Aid to Rep, Hubbard (Ky.) Mr. Pete Hughes Legislative Assistant to Sen. Byrd (Va.) Mr. Dean Kalivas Administrative Assistant to Rep, Hicks (Wash.) Mr, j. Stanley Kimmit Majority Secretary, united states Senate Mr, Carroll Leggett Executive Assistant to sen. Morgan (N.C.) Mr. Jeffrey Llebowitz Office of Rep. solarz (N.Y.) Mr. P. A. Mack Administrative Assistant to Sen. Bayh (ind.) Mr. Russell Mack, Legislative Staff Assistant to sen. Schweiker (Pa.) Ms. Avd Magee Office of Rep. Hubbard (Ky.) Mr. Andy Manatos Office of Sen. Eagleton (Mo.) Mr. Phillip Marmovich Staff Assistant, Office of the Majority Secretary, U.S. Senate Ms. sally Martin Office of Rep. Risenhoover (Okla.) Mr. Charles MeLiody Ass istarit ^Majority Floor Manager, U. S. House of Representatives Mr. M. Barry Meyer Chief counsel and Chief Clerk, Senate Committee on Public works Mr. John Guy Miller Minority Staff Director, Senate Special committee on Aging CMA 070836 -4- Mr. Rudy Murillo Administrative Assistant to Rep. van Deerlin (calif.) Ms. Irene Peterson Administrative Assistant to Rep. Sullivan (Mo.) Mr. Henry poole Legislative Assistant to Sen. Morgan (N.C.) Mr. Richard Ray Administrative Assistant to Sen. Nunn (Ga.) Mr. Francis Rooney Staff Member to Sen. Bellmon (Okla.) Ms. Stella Sargent and Mr. Sargent Personal Secretary to Sen, Randolph (W.Va.) Mr. Leonard saari and Mrs. Saari Administrative Assistant to Rep. Meeds (Wash.) Mr. Peter M. Stockett Chief counsel and staff Director, senate committee on the judic iary Ms. Marilyn Storm personal Secretary to Rep. Risenhoover (Okla.) Ms. Ella Stout i Staff Assistant to Rep. Andrews (N.C.) Ms. Liz Strannigan Personal Secretary to Sen. McGee (Wyo.) Mr. Wayne Thevenot Administrative Assistant to Sen. Long (La.) Ms. Janice Trabor Office of Rep. Fish (N.Y.) Mr. Hebert Wadsworth Administrative Assistant to Rep, Fuqua (Fla.) Ms. Christine Warnke Office of Sen. cannon (Nev.) Mr. jack White Administrative Assistant to Sen. Scott (va.) Mr. W. E. Williamson Clerk, House Committee on Interstate and Foreign Commerce Mr. Bruce Wood Legislative Assistant to Rep. Gude (Md.) j Mr. John Yago professional staff Member, Senate Committee on Public Works Mr. Murray Zweben Chief parliamentarian, United States Senate EXECUTIVE BRANCH - U. S. GOVERNMENT Mr. Forest E. Abbuhl Director, Office of International Trade policy U.S. Department of Commerce Hon. Italo H. Ablondi Commissioner, U.S. International Trade Commission Mr. James L. Agee Assistant Administrator for Water and Hazardous Materials Environmental Protection Agency Hon. L. J. Andolsek Commissioner U.S. Civil Service commission * Hon. Catherine Bedell and Mr. Bedell Chairwoman, u.S. International Trade commission Mr. Daniel P. Boyd Director, Office of standards U.S. Department of Labor CMA 070837 5 ] ms. Patricia Cahn , Director of Public Affairs Environmental Protection Agency Hon. Charles Clapp Commissioner, Interstate Commerce Commission Gen. F. J. Clarke Executive Director, National Commission on water Quality Ms . J. Cooper Office of Air standards, Environmental Protection Agency Mr. Richard L. Cowles Acting Director, industrial Program Support Office Federal Energy Administration Hon. C. Marshall Dann Commissioner of Patents, The patent Office U.S. Department of commerce Hon. Benjamin o. Davis, jr. and Mrs. Davis Assistant Secretary for Safety and consumer Affairs U.S. Department of Transportation Hon. Lewis A. Engman Chairman, Federal Trade commission Mr. Lawrence A. Fox Deputy Assistant Secretary for International Economic Policy and Research, U.S. Department of commerce Dr. Sidney R. Galler Deputy Assistant Secretary for Environmental Affairs U.S. Department of Commerce Hon. Allen H. Garland Chairman Trade Staff committee Office of the Special Representative for Trade Negotiations Mr. John Gunn Acting Director for Science and Technology U.S. Department of justice Ms . Jody Hamberger The white House Mr. Charles W. Hostler Deputy Assistant Secretary, Bureau of international commerce U.S. Department of Commerce Mr. Dwight A. Ink Deputy Administrator, General Services Administration Dr. Amison jonnard Chief Chemicals Division, U.S. International Trade Commission Mr. William B, Kelly, Jr. Assistant Special Representative Office of the Special Representative for Trade Negotiations Hon. Virginia H. Knauer Special Assistant to the President for Consumer Affairs Hon. Lawrence M. Kushner Commissioner, Consumer product and safety Commission Mr. Bryan LaPlante Deputy Director, Office of Legislation Environmental Protection Agency Ms . jane Lewis Ass is tant^Director, office of Environmental Affairs U.S. Department of Commerce Mr. Kenneth R. Mason Secretary, U.S. International Trade Commission CMA 070838 Mr. James M. Owens Director, Materials Division, u.S. Department of Commerce Mr. Harry Pfann Manager, Chemicals and Rubber Program, Bureau of Domestic Commerce U.S. Department of Commerce Hon. R. David Pittle Commissioner, Consumer Product and Safety Commission Mr. Morton Pomeranz Executive Secretary, Trade Executive Committee Office of the Special Representative for Trade Negotiations Mr. Daniel Radcliff Assistant and Counsel to the Commissioner Interstate Commerce Commission Dr. Howard R. Roberts Acting Director, Bureau of Foods, Food and Drug Administration U.S. Department of Health, Education and welfare Mr. John Roose Associate Assistant Administrator of Industrial Programs Federal Energy Administration Mr. Glenn Schweitzer Director, office of Toxic Substances, Environmental protection Agency Hon. L. William Seidman Assistant to the President for Economic Affairs Mr. Samuel sherwin Deputy Assistant Secretary for Domestic Commerce U.S. Department of Commerce Rear Adm. Abe Siemens Chief, office of Research and Development U.S. Department of Transportation Hon. Richard Simpson Chairman, consumer Product and Safety commission Dr. Bernard j. Steigerwald Deputy Assistant Administrator for Air Quality and Standards Environmental Protection Agency Mr. Grover c. Wrenn Chief, Division of Health Standards, Occupational Safety and Health U.S. Department of Labor Ms. Rose Wright Assistant to the Special Assistant to the President for Consumer Affairs OTHER GUESTS Mr. Mr. Mr. Mr. Mr. Mr. Mr. George Arnold Guest of Rep. Quillen (Tenn.) F. H. Carman Retired MCA Technical Director J. R. Carnes Retired MCA Vice President and Secretary-Treasurer Lloyd Cutler Wilmer, Cutler and Pickering G. Depayre The_Embassy of France A. R. A. Ghenson and Mrs. Ghenson Economic Counselor, The Embassy of Canada Boyden Gray Wilmer, Cutler and Pickering CMA 070839 7 wr> Daniel Mayers Wilmer, Cutler and Pickering Mr, Richard Peet Retired Associate Minority counsel. House Committee on Public Works John H. Pickering Wilmer, Cutler and Pickering (jr. Richard Royce | consultant j yit. Alan Smith Scientific counselor, The Embassy of Great Britain * Mr. Charles Snead Retired vice president, Eastman chemical Products, Inc. INDUSTRY Dr. James Affleck American cyanamid Company Mr. Webb Alspaugh Standard Oil of Ohio Mr. Clifford M. Andrews Ferro Corporation Mr. Warren M. Anderson Union Carbide Corporation Mr. Henry Avery U.S. Steel Corporation Dr. Earle B. Barnes Dow Chemical U. S. A. Dr. Davis Batson Ethyl Corporation Mr. Everett H. Bellows Olin corporation Mr. Frederick L. Bissinger Allied chemical Corporation Mr. David H. Bradford, jr. Allied chemical corporation Dr, J. J. Breiter Hercules incorporated Mr. parke c. Brinkley National Agricultural Chemicals Association Mr. Werner c. Brown Hercules incorporated Mr. Stanley Browne E. I. du Pont de Nemours and company Mr. R. D. Buehler The B. F. Goodrich company Mr. James Burridge FMC Corporation Mr. Charles Y. Cain Hooker Chemical Corporation Mr. E. E. Chipman Productol chemical Company Mr. John c. Clay National Starch and Chemical Corporation Mr, James M. Cloney GAF Corporation Mr. william Canavan Olin Corporation Mr. Harry Buchanan Virginia chemicals inc. CA/W 070840 8 James T. Conner Mobay Chemical corporation G. A. Coffenberg Stauffer Chemical Company Francis cook Stauffer Chemical Company Jeffrey Converse N L Industries C. Preston Cunningham Monsanto Company Thomas C. Dabovich Morton chemical Company, A Division of Morton-Norwich Products, David Dawson E. I. du Pont de Nemours and Company Wells Denyes Eastman Chemical products, Inc. F. Raymond Downs The Procter and Gamble Company Douglas Dunn Northern Natural Gas Company John T. Estes Allied Chemical corporation Albert A. Eustis W. R. Grace and Company J. Morris Evans Philadelphia Quartz company Thomas S. Farmer Borg-Warner Chemicals, Borg-Warner corporation James Finley Crown zellerbach Corporation F. D, Flanagan W. R. Grace and Company George w. Flanagan The B. F. Goodrich Chemical Company Brian D. Forrow Allied chemical corporation Myron Foveaux Monsanto Company James h. Gardner Armak company, A Part of Akzona Incorporated Alfred Gedulidig GAF corporation James M. Gill Ethyl Corporation Robert D. Goodall W. R. Grace and Company D. A. Goodall American Cyanamid company Melvin p. Gordon Gordon Chemical company, Inc. Lori Gribben Rohm and Haas Company Samuel Gusman Rohm and Haas company John Hall Ashland Chemical Company, Division of Ashland Oil, Inc. jnCi CMA 070841 B 9 J. H. Hanes Dow chemical u.S.A. John w. Hanley Monsanto Company Carroll w. Hayes Celanese Corporation Dr. Richard E. Hekert E. I. du pont de Nemours and Company Mr. John Henske Olin Corporation Mr. William J, Hull Ashland Oil, Inc. Mr. K. R. Hundley Weyerhaeuser Company Mr. Richard M. Hunt N L Industries Mr. E. HamiLton Hurst Nalco Chemical Corporation Mr. Edd H. Hyde Reynolds Metals Company Mr. Robert c. Hyndman Morton chemical Company, A Division of Morton-Norwich Products, Mr. Jesse Johnson Shell Chemical company Dr. Edward R, Kane E. I. du Pont de Nemours and Company Mr. Robert F. Kelly E. I. du Pont de Nemours and Company Mr . J. J. Kenney, Jr. Union Carbide Corporation Mr. John Klocko E. I. du Pont de Nemours and company Mr. Wilbur c. Lowrey Shell Chemical company Mr. Frank Lyon, jr. Union Carbide Corporation Mr. Iver c. Macdougall Stauffer Chemical Company Mr. Duncan j. MacLennan USS Chemicals Division of U. S. Steel Corporation Mr. Charles Maddock Hercules Incorporated Mr. J. W. Malloy Eastman Chemical Products, Inc. Mr. Robert H. Malott FMC Corporation Mr. Michael Manatos The Procter and Gamble Manufacturing Company Mr. Ralph Manning Allied Chemical Corporation Mr. Charles r. Marck Dow Chemical U.S.A. Mr. Harry r. Mar^s Ferro Corporation Mr. Harry D. McNeeley Tennessee Eastman Company, Division of Eastman Kodak Company Inc. CMA 070842 10 Mr. Harold S. Mickley Stauffer Chemical Company Mr. Harris C. Miller Hooker Chemical Corporation Mr, Robert H, Miller Tenneco, Inc. Mr. Neil R. Mitchell Velsicol Chemical Corporation Mr. E. J. Mooney Nalco Chemical Company Mr. Douglas M. More Airco, Inc. Dr, H. Barclay Morley Stauffer Chemical Company Mr. Robert M, Morris Velsicol Chemical Corporation Mr. Roger Morse Standard Oil of California Mr. John W. Morton Cities Service Company Mr. William C. Murphy Eli Lilly and Company Mr. Joseph A. Neubauer PPG Industries, Inc. Mr. James O'Brien and son (Coley O'Brien) Pharmaceutical Manufacturers Association Ms. Rita O'Glee PPG Industries Mr. Russell J. Parsons Borg-Warner corporation Mr. Eugene Perrin Dow chemical Company Mr. Sam Pickard Monsanto company Mr. E. R. Pleasants E. I. du Pont de Nemours and Company Mr. Robert polack Reilly Tar and Chemical Corporation Mr. Robert T. powers Nalco Chemical Company Ms. Rebecca Reid Ethyl Corporation Mr. p. C. Reilly Reilly Tar and chemical corporation Mr. William C. Rountree Standard Oil of Ohio Mr. Albert J. Royce, Jr. Royce Chemical company Mr. Albert J. Royce, III Royce Chemical Company Mr. George W. Russell American Cyanamid company Mr. Robert L. Shafer Pfizer, Inc. Mr. L. G. Shapiro Engelhard Minerals and Chemicals corporation CMA 070843 i t 11 , Mt* Carstens Slack Phillips petroleum Company Mr- Donald Smiley Exxon Corporation Arthur J. Smith Shell Chemical Company Mr. G, Montgomery Spindler Uniroyal Mr* jack B. St. Clair Shell Chemical Company, A Division of shell Oil Company Mr* Robert Steele Stauffer Chemical Company Mr- Walter Thomas FMC Corporation Mr. William H, Thomas Universal Oil Products company Mr. H. S. Van Scoyoc E, I. du pont de Nemours and Company Mr. E. A. Von Doersten Ashland Chemical Company, Division of Ashland Oil, Inc. Mr. J. j. walker Union Carbide Corporation Mr. Donald p. Walsh Shell Oil Company Mr. Charles E. Welch E. I. du pont de Nemours and Company Gen . A. C. Welling BASF Wyandotte Corporation Mr. Clyde A. Wheeler, Jr. Sun Oil Company Mr. Edwin M. Wheeler The Fertilizer Institute Mr. John A. Wilson Diamond shamrock Corporation Mr. William G. Whyte U. S. Steel Corporation Mr. Harry D. Williams Ashland Oil, Inc. Mr. Richard Williams Olin corporation Mr. Jack W. Woolley PPG Industries, Inc. Mr. James I. Wyer American Cyanamid company Mr. Robert E. Yancey Ashland Oil, Inc. MCA STAFF Mr. Mr. Mr. Mr. William j. Driver President George E. Best Vice president; Secretary-Treasurer Bruce Barackman Assistant Secretary-Treasurer and Staff Richard F. Blewitt Manager, press Relations Counsel CMA 070844 12 Mr. Howard Brown Assistant Technical Director; Water Resources Mr. william H. Butterbaugh Assistant Technical Director; Chemical Packaging and Transportation Equipment Ms. Marjorie V. Campbell Director, information service Mr. Albert C. Clark Vice president and Technical Director Mr. Albert A. Fox, jr. Legislative Representative Mr. Milton Freifeld Assistant Technical Director; Occupational Health Ms . Terri Gratson Secretary, Government Relations Department Ms. Mercy Hidalgo-Gato Secretary, public Relations Department Ms. Sharon Higgins Staff Assistant, public Relations Department Mr. Morgan M. Hoover Assistant Technical Director; Engineering Advisory, and Food, Drug, and Cosmetic Chemicals Mr. George Ingle Assistant Technical Director; Solid Wastes Management Ms. Ellen Jerome Secretary, Government Relations Department Dr. Kenneth D. Johnson Assistant Technical Director; Air Quality Mr. Edward j. Klecka Office Manager Ms. Beth Newton Secretary, Government Relations Department Mr. victor H. Peterson Vice president and Director of public Relations and Education Ms. Gaby Richmond Secretary, Office of the President Mr. Hugh M. Robinson Legislative Counsel; Patent and Trademark; Tax Matters; Technical Information Retrieval i Dr. Joseph T. Seawell Assistant: Technical Director; Labels and precautionary information Mr. John E. Slavick Manager; Community Relations and special publications Ms. Sharon Smith Staff Assistant, public Relations Department Ms. Kim Stone Secretary, public Relations Department Mr. william M. Stover Vice president and Director of Government Relations Ms. Dorothy Tilley Secretary, Government Relations Department Mr. John G. Tritsch Assistant Technical Director; insurance, international Trade, and Nuclear Mr. jams- p. Turner Manager, Environmental Quality Information Dr. Robert E. Varnerin Manager, Education CMA 070845 13 MS. Ms. Mr. Mr. Anne Waggoner Legislative Editor Peggy Walton Manager, Consumer Information Samuel l. Watts Assistant Technical Director; Transportation and Distribution John c. zercher Manager, Chemical Transportation Emergency Center CMA 070846 EXHIBIT F REPORT TO THE BOARD OF DIRECTORS MANUFACTURING CHEMISTS ASSOCIATION HENRY AVERY, CHAIRMAN PLASTICS COMMITTEE APRIL 8, 1975 The principal function of the Plastics Committee is to develop and provide surveillance over the programs supported by the Plastics Group consisting of 56 MCA member companies, and representing most of the polymer production in the United States. The Plastics Committee is composed of 15 members who serve 2 year terms. The Programs we support are selected for their major importance to the industry and for their general concern to all the member companies. Our budget is $72,000 in the current fiscal year, and almost all of these expenditures are in the preparation of background reports and literature surveys that bear on the major problems of our industry. The Plastics Industry even more so than the Chemical Industry is faced with more problems than I can discuss in my brief report today. Some of the public issues are: 1. Feedstocks Availability & cost 2. Combustibility 3. Environmental Impact 4. Worker Health & Safety 5. Product Performance The following reports have been published by the MCA Plastics Committee m the past 3-1/2 years: SOLID WASTE MANAGEMENT OF PLASTICS PLASTICS SOLID WASTE DISPOSAL BY INCINERATION, OR LANDFILL PRACTICAL ASPECTS OF PLASTICS WASTE DISPOSAL BY INCINERATION, LANDFILL AND REUSE/RECYCLE PLASTICS WASTE MANAGEMENT THE ROLE OF PLASTICS IN RESOURCE RECOVERY PLASTICS, RESOURCE AND ENVIRONMENTAL PROFILE ANALYSIS CMA 070847 2 THE PLASTICS INDUSTRY IN THE YEAR 2000 Ready for publication is a new report on the "Flammability Testing of Polymers". We are currently evaluating new projects such as "Lacrimation and Combustion Products" and a follow-on of the Flammability Testing Project, We have held up deciding on the latter until the FTC-Industry Research Council decides on their projects. Since the 56 member companies are also major contributors to the $3.2 million budget of the Society of the Plastics Industry (SPI) we discuss with them the Research Projects common to both SPI and MCA. Also since SPI is the plastics industry's major spokesman in handling of problems with the Government and Public we have found that providing a source of basic data and background information gives SPI support in achieving our mutual objectives. All of us in the Plastics Industry ask questions like: a. Can plastics be proven to be safe for use in construction and furnishings applications in the building environment or will regulations preclude plastics from the otherwise major role they can play m this area? b. Will environmentalists continue to attack plastics in packaging and in solid waste just because it is the "new boy on the block" or can we prove that plastics are indeed environ mentally desirable from the standpoint of material and energy consumption as well as post-use disposal? c. Will the increasing cost of energy and raw materials reduce plastics ability to compete with alternate materials in existing and future product developments, thereby slowing down the growth of the industry? d. What is the feasibility of replacing petro chemical feedstocks for plastics with feed stocks derived from coal? e. Will the plastics industry be able to -- successfully defend itself on the vinyl chloride monomer type problems of monomers CMA 070848 3 and polymers toxicity? Obviously there are no pat or easy answers to these questions. But in some way we must emphasize the key role of plastics in our society. We must in many ways communicate to the public that plastics is a major, vital industry and must receive equita ble consideration in regulation taxation and feedstock considerations. In my estimation the ball game in plastics is changing. There are public issues at every stage of the life of a plastic product. "Product Stewardship" is the name of the Game and all of us will be in the act. (Mr. Avery used illustrative slides during his presentation.) CMA 070849 REPORT TO THE BOARD OF DIRECTORS MANUFACTURING CHEMISTS ASSOCIATION Jo J. WALKER, CHAIRMAN SAFETY AND FIRE PROTECTION COMMITTEE APRIL 8, 1975 EXHIBIT G The personnel accident frequency and severity rates for 1974 are about the same as last year. Whereas there is some improvement in the severity rate, 415 down to 334, there is a small increase in the frequency raie, 3-73 up to 3.88 which is actually a ten-year high It is interesting to note that if the data from four of the l-arger chemical companies are net included, the average MCA frequency rate jumps to six. Whereas the 1974 rates are considered good when com pared with many other industries, acceptable safety performance has not been established by a large segment of member companies. Thirty member companies 31 percent of the total membership, report disabling injury frequency in excess of 10.00 which is quite high This is one of our major concerns,. We also have some other specific concerns that we want to share with you m the hope that you will be able to help us. We are concerned with increased fire and explosion hazards introduced by the use of much larger-sized, chemical processing storage and transportation equipment when compared to that used in past years. Most of our fire protection stan dards, guidelines, and design criteria are based largely upon experience. Most such experience has been actuarily recorded by insurance interests and by ourselves and j.s, by-and-large, based upon the use of small or modest-sized equipment when compared to that used today. A few years ago an 8 ft dia. x 125 ft. high distilla tion column was considered large. Today we have columns 250 ft. high and some with diameters of 22 feet. We are using pres sure storage tanks, containing liquified hydrocarbons, that are 25 ft diameter by over 300 ft long. With the history m the last two or three years, of catastrophic unconfmed gas cloud explosions due to accidental CMA 070850 releases, the increased potential from larger sized equipment worries us. The potential from run-away reactions in much larger vessels with or without vessel failure is a similar concern. The size of atmospheric storage tanks has increased in the past several years to the point where 10MM gallon tanks are rather common. We now have some which have capacities of over 15MM gallons. These tanks have diameters of 200 to 300 feet. It is virtually impossible to extinguish a fire in a tank of this size. In general, the flame height of a burn ing pool of liquid will be from two to five times the diameter of the pool. A 250 ft. diameter tank containing burning naptha will have flames that reach over 750 ft. high. Such a fire will burn for as long as a week or more depending upon how full the tank is when the fire starts. If a strong wind is blowing, the exposure on the downwind side can be such as to make manual fire fighting or protection efforts impossiblethus, resulting in involvement or destruction of additional properties. If such a tank or connecting piping leaks to the point of flooding the enclosed diked area, the flame height can reach over 1200 feet high. A fire of this kind and size has not been experienced to date and would undoubtedly have world-wide news coverage. Another related problem is the increased size of tank cars and trucks. Years ago when the largest tank cars had about 10M ga-l-lons capacity, one could literally roll down a hillside without rupturing or being punctured. Today, the large size and weight of tank cars, together with the increased weight of other railroad cars and possibly poorer roadbed main tenance, poses a real threat to the public. The use of large uninsulated, high-pressure tank cars is perhaps the most serious concern. Most of us are agreed that tank car size should be limited to some reduced size. There is disagree ment, however, on the actual size limit that should be per mitted. We are aware of the AAR sponsored program which is aimed at improving tank car safety. The program is well or ganized and some very worthwhile results are expected. How ever, this program does not take into consideration nor is it directed toward establishing an optimum size of tank car for safety under existing parameters of roadbed design, track weight, curve radius, tunnel size, etc CMA 070851 3 The area of greatest concern is that of assuming a significantly more aggressive posture in generating a committee position which will represent MCA on proposed changes or new standards and regulations impacting safety or fire protection. We want to be able to expeditiously carry such a position to the appropriate standards or regulations-forming bodies. We do not know all of the answers to these problems but the problems must be solved. Some research and development projects will undoubtedly be needed and hopefully a few of these can be handled through the MCA organization. To add to our dilemma we are losing the last of the "old guard" from our committee this year - talented and capable men who have been on the committee more than 20 years, includ ing our secretary. Thus, we urge.you to continue to send us qualified men of high ability authorized to participate and work. Because of the concerns mentioned above, and others, we appointed a task group to study committee organization and review our activities in an effort to make our committee more effective. One specific area to be developed is a mechanism by which the committee could assist member companies having more limited safety operations, toward improving their safety record. Recommendations, when developed, will be processed through nor mal Association channels for implementation. CMA 070852 EXHIBIT H REPORT TO THE BOARD OF DIRECTORS MANUFACTURING CHEMISTS ASSOCIATION GEORGE A. COFFENBERG, CHAIRMAN TRANSPORTATION AND DISTRIBUTION COMMITTEE APRIL 8, 1975 From the reports of past chairmen of the Transportation and Distribution Committee, I know you are familiar with the scope of our committee's activities I have prepared a more comprehensive written report of our activities that will be appended to my remarks. I will limit my oral report to two recent legisla tive acts that will significantly affect your operations and distribution costs in the future, and then comment on what we can expect in working with the car riers and others as a result of this legislation. The 1972 amendments to P.L, 92-500, the Federal Water Pollution Control Act, while not news to any of us in the chemical industry, will have a serious impact on the transportation of hazardous materials. Much of industry's con cern with the 1972 amendments has surrounded the criteria for toxic pollutants and effluent guidelines for plant discharges. Section 311 of the amendments is concerned with the liabilities for discharge of nonremovable hazardous ma terials and has its greatest impact in the transportation sector. From October 18, 1972 through October 18, 1974, the maximum fine in the event of a spill of a nonremovable hazardous material could not exceed $50,000, except where willful negligence or willful misconduct could be proved. In the event of willfulness, the statute is without limit as to the level of the fine. During this two-year period, the Administrator of the EPA was directed to identify hazardous materials which were nonremovable, to identify what consticuted a hazardous quantity and establish a penalty system in which the fines are not less than $100 nor more than $1,000 per unit, with a maximum of $5,000,000 where the discharge was from a vessel. Using consultants, EPA has identified an initial list of nonremovable hazardous substances. The consul tants have offered several alternatives for quantifying hazardous quantities and setting rates of penalty based on toxicity, degradability and dispersal characteristics. Using the developed guidelines, EPA is presently engaged in drafting regulations to implement the statute. The insurance industry through its entity--the Water Quality Insurance Syndicate (WQIS)--confronted with punitive penalties of up to $5,000,000 has flatly stated that fines in excess of $50,000 will not be insured. WQIS be lieves that by insuring the first $50,000, it has made a major concession in that Insurance has been provided for the commitment of an unlawful act. The T & D Committee, working against the deadline for publication of the punitive penalties, joined with MCA's Water Resources Committee in con tacting members of EPA's hazardous and toxic substances branch. The purpose of such contact was to inform the EPA of the disastrous impact that publica tion of punitive penalties would have on the transportation of hazardous materials by water. The regulatory personnel have shown a genuine concern for the predicted disruptions in water commerce. Our committee is also pre paring for~MCA testimony before Congress to support legislative reform in the 1972 amendments. CMA 070853 -2 In addition to our activities with the Water Resources Committee, an inter industry committee comprised of the American Waterways Operators, MCA, the fer tilizer industry, the marine insurance community, railroads, and tank truck operators is working for both reasonable implementation of section 311 by the EPA, and by legislative amendment. The single objective of both MCA and the inter-industry committee is a return to the penalty provisions in effect from October 1972 to October 1974. When a bill is finally introduced to modify section 311, we will need the full support of the chemical industry's legis lative contacts to work for passage of the much needed amendment. Before leaving P.L. 92-500, there is another important paragraph in section 311. Rail cars and highway vehicles are considered on-shore facilities and the paragraph to which I have reference imposes severe cleanup costs to a maximum of $8,000,000 in the event of a spill from on-shore facilities. The impact of this paragraph has only begun to receive the attention of the railroads and the high way carriers. The second new law is the Transportation Safety Act of 1974 signed by the President on January 4, 1975. Tide I deals with hazardous materials. This act grants broad new discretionary powers to the Secretary of Trans portation. In addition to the definitions of hazardous materials with which we are all acquainted such as flammables, poisons, corrosives, etc., the law gives the Secretary discretionary power to declare any product a hazardous material which in his judgment presents an unreasonable risk to the health or safety of persons or property. Both the discretionary authority and health responsibil ity are new, opening up virgin areas for the regulation of hazardous materials transportation. The health provision sets up a potential for duplication and a possible conflict with OSHA's regulations. Recently, the Council on Environmental Quality located within the Execu tive Office of the President urged the DOT to incorporate in their transporta tion regulations, the regulation of carcinogens, mutagens and teratogens. If there was any doubt as to whether the Secretary had the authority to regulate these hazards, this doubt has been removed. The new law has also given the Secretary the authority to assess civil penalties for rail and highway violations of the regulations. Formerly civil penalties were only provided in the air and water statutes. The Secretary can also establish criteria for the handling of hazardous materials including the number of persons to be involved and their minimum level of training. Again, an interface and possible conflict with OSHA. The chemical industry can an ticipate a vigorous implementation of these provisions. The last major provision of this law that I will mention is the limita tion on the authority of the Office of Hazardous Materials of DOT to grant exemptions to the regulations-- commonly referred to as special permits. The law sets forth the criteria and procedure that must be followed in granting an exception. The new requirements can only inhibit the granting and extend the processing time beyond that experienced in the past. CMA 070854 3 The special permit has been of major importance to the chemical industry in meeting unforeseen critical situations. There is a high probability that every company represented in this room is presently shipping under one or more special permits or has at some time made use of special permits to test a changed container design or to cover an emergency situation. Although the chemical industry can expect increased regulation as a result of this new law, much more onerous provisions were under consideration when this law was framed. A significant number of the provisions opposed by MCA were eliminated and acceptable revisions made to others. Our committee will continue to work for responsible regulation by participating, within the MCA framework, in the Department of Transportation's rule makings in the future. In light of these two legislative acts, what can we expect the impact to be in the distribution of our products. The inland waterway operators who operate the towboats in the United States have stated publicly to the EPA and to the Congress that unless the punitive penalties of section 311 are moderated they will refuse to handle barges of nonremovable hazardous materials. Should this happen, a serious crisis will confront chemical shippers who use water transportation. As pre viously mentioned, our committee is working vigorously so this situation does not develop. The fallout from section 311 on the rail and highway carriers appears only now to be coming to the surface. As a result of a few recent spills, the railroads have become quite concerned as to their cleanup liability costs. This concern is shared by the highway industry. Already there are rumblings that the railroads are commencing a risk management study for the purpose of shifting or being compensated for their liability exposure when handling hazardous materials. Although no proposal has yet appeared on the public docket, we understand the railroads are considering various approaches such as a transportation surcharge for hazardous materials and the possibility of requiring shippers to become co-insurers with the railroads. In the past, highway carriers when confronted with unacceptable risks have generally attempt ed, through various devices, to avoid the transportation of the product al together . The T & D Committee is alert to the changing conditions in the trans portation environment. We will continue to work with the government and the carriers for sound regulations and transportation services at reasonable costs. CMA 070855 SUPPLEMENT TO ORAL REPORT OF GEORGE A, COFFENBERG, CHAIRMAN TRANSPORTATION AND DISTRIBUTION COMMITTEE APRIL 8j 1975 The committee has an official roster of thirty-six member companies and is organized around eight standing subcommittees with the following areas of responsibility--hazardous materials, highway carriers, legislation, marine, physical distribution, rail carriers, transportation environmental regulations and Steering Subcommittee. The Steering Subcommittee is comprised of the sub committee chairmen and the officers of the committee. Important ongoing matters with which the T & D Committee is involved: I. Hazardous Materials Regulations. The Department of Transportation (DOT) Hazardous Materials Regulations Board (HMRB) Docket 112; Notice 73-9 pro poses a major reorganization of the hazardous materials regulations re ducing the three federal .'odes governing land, water and air to a single code. Concurrently, the HMRB proposed significant changes in the exist ing regulations. MCA filed a detailed response in this rule making pro ceeding and will continue to participate in it to its conclusion. HMRB Docket 103; Notice 73-10 is a rule making proceeding involving a new placarding and hazard information system. The docket covers a uniform system of placarding rail and highway vehicles. The new placards in ad dition to identifying the primary hazard of the product--flammable, cor rosive, etc --incorporates a t.wo-digit numerical code. in the event of an in-transit spill, leak or fire, the two-digit code is a key to the "do's and don't's" taking into consideration the primary and secondary hazards. The placarding and emergency response system called the "HI system" was adopted by the DOT from the Transportation Hazards Infor mation system (TUI) developed by MCA and submitted to the HMRB in Decem ber 1968. MCA has supported, with modification, adoption of the HI system. The Hi system is compatible with CHEMTREC and would avoid confusion and help assure the proper response in an emergency situation. Although for different reasons, the Association of American Railroads (AAR) and the American Trucking Association (ATA) have both responded negatively to the new placarding HI system. We are working with the AAR and ATA for the purpose of resolving the ob jections these carrier assoc rations have to the proposed system, HMRB Docket 112, Notice 73-9 "Hazardous Materials Aboard Aircraft." The Air Line Pilots' Association (ALPA) issued an embargo effective Feb ruary L on the movement of hazardous materials via passenger aircraft and placed restrictions on the movement via cargo-only aircraft. The HMRB CMA 070856 2 proceeding, in which MCA has participated, has as its purpose the develop ment of improved regulations including those for packaging to better con trol the safe transportation of hazardous material by aircraft. MCA has made specific suggestions as to how the regulations can be improved. The docket is still pending. II, Legislation. Orally at hearings and in written statements, MCA views on past major transportation legislation were submitted to Congress on earlier proposed surface transportation acts of 1973 and 1974. Neither of these bills became law. In anticipation of the introduction of similar legis lation in the new Congress, the Legislative Subcommittee has been calling on the responsible committee staffs in the House and the Senate. In ad dition, because much of the legislation originates with DOT, a conference has been held with the Assistant Secretary for Legislation and Policy to discuss the type of legislation MCA would like to have introduced. Similar meetings were held with the chairman and other commissioners of the Interstate Commerce Commission(ICC). The objective of these meetings was to make MCA's position available to the people responsible for draft ing legislation prior to the markup of a bill. III. Marine. The major item currently under active pursuit by this subcom mittee is the development of regulations with EPA in the administration of section 311 of P.L. 92-500, the Federal Water Pollution Control Act; also legislative amendment of this Act. Detailed actions of the sub committee were reported on in the oral presentation. IV. Highway Carriers. A major concern at this time is ICC Docket 32155, es tablishment of a uniform system of accounts for costs incurred in clean ing of tank trailers. EPA regulations on pollutant discharges has pre sented major problems to the liquid bulk highway carriers in cleaning of tank trailers and disposal of waste waters. Costs are significant and thus, the object of the proceeding is to establish a method of account ability. MCA is participating to assure a proper account presentation and inclusion of only those costs associated with the cleaning. V. Physical Distribution. This subcommittee is concerned with matters that fall in the category of research and development as contrasted to the other subcommittees who are dealing with matters active in the trans portation and distribution environment. The Physical Distribution Sub committee, at the May meeting of the T & D Committee, will present a special'seminar concerned with the interface of automated order entry and invoicing systems with computerized freight rate and route systems. VI. Rail Carriers. The subcommittee is presently engaged in matters involv ing private rail car compensation by the railroads, resisting railroad proposals that would limit the freedom of movemenc of empty privately leased or owned rail cars and opposing exhorbitant increases in rail charges in relation to the cost of furnishing the service. A special task group has been directed to identify MCA's objectives for a pri vately owned viable rail network. The task group is to recommend what actions should be taken or what posture MCA should assume in any future general advancement of the railroad's price levels in order to obtain those objectives. CMA 070857 3 VII. Transportation Environmental Regulations. The state of Illinois through its Pollution Control Board published proposed toxic substances regula tions, Docket R-74-7, which in addition to affecting plant and warehouse locations had a serious impact on transportation within and through the state. MCA participated in the hearings and the proposal is presently in abeyance. With the enactment of the Transportation Safety Act of 1974, the interstate hazardous materials regulations will preempt the state regulations, in that area. CMA 070858 EXHIBIT I t STAFF REPORT by William J. Driver April 8, 1975 The pace of congressional oregarations for oassage of toxic substances legislation is quickening, and it now aooears that a House bill will be introduced soon. Our meetings with the staff of the Senate Commerce Committee indicate that they are considering new language that would be even more burdensome and less effective than that in critical parts of S.776. During our talks with them, the committee staff showed no signs of accepting our points of view. On March 20, I sent members of the Executive Committee an analysis of the priority issues in toxic substances legislation, specifically S.776. A brief summary follows: The relationship of this act to other federal laws dealing with health and environment. Unless coordinated most carefully, inescapable and costly confusion will result from different rules, creating excessive burdens for both the industry and the EPA administrator, without providing the desired benefit to the public at large. <* Limiting the extent of premarket screening to high risk chemical substances. Clearly, there must be a basis for selection and for selectively testing those substances which justify such evaluation, as opposed to the greater number of substances of less concern. Aside from the costs of testing and reporting results, the obstacles to innovation, the administrative burden to the industry and to EPA itself, effectiveness in increasing protection to human life and to the environment demands a selective aooroach. Confidentiality in testing, reporting and rule-making. Failure to provide adequate controls will inhibit innovation and unnecessarily complicate compliance. There_are other issues, generally less broad than the above, that add further objectionable economic imoact without providing increased protection to health and environment and a cluster of issues that bear directly or indirectly on the above, but which are of lower oriority. J *** CMA 070859 2 On March 19, the Senate confirmed Frederick B. Dent as the i Special Representative for Trade Negotiations with the rank of Ambassador Extraordinary and Plenipotentiary, billing this vacancy ends a condition of increasing embarassment for the United States during preparations for the Tokyo Round of trade negotiations. The two deputy representative costs remain open. The Office of the Special Trade Representative is exoected to announce shortly the hearings schedule of the Trade Infor mation Committee. The hearings are planned to begin in early May. The committee is the inter-agency unit orovided for in the Trade Reform Act of 1974. The hearings, like those of the U. S. International Trade Commission (formerly the Tariff Commission), will consider the anticipated trade negotiations authorized by the trade act, including the Tokyo Round. Contracts have been signed for two research programs proposed and supported by companies particioating in MCAadministered special projects on fluorocarbons. A Washington State University study provides for the collection of strato spheric air samples and the measurement of the kinds and amounts of stable chlorine-bearing species found in the stratosphere. A University of Michigan study will develoo analytical techniques for measuring the chlorine oxide radical, a key soecies in the chlorine-ozone chain reaction, in its original or natural position in the atmosphere. *** We have submitted comments and suggested revisions to the Food and Drug Administration's Droposed nublic information regulations under the Freedom of Information Act. I noted in a covering letter that the regulations provide for extensive release of information submitted by manufacturers, and that this information often represents a significant asset of the manufacturer. Our comments, therefore, orooose amendments that are believed necessary "in order adequately to safeguard such data and information against improper or inadvertent disclosure." *** In a trial run of MCA's energy conservation reporting plan, the 26 participating member companies reported a 7.96 percent reduction in energy consumption for 1974, using 1972 as a base year. The amount of reduction was reached after making an adjustment for the increased energy consumption required by environmental and OSHA regulations. Without CMA 070860 I 3 this adjustment, consumption was reduced 7.54 percent. In a letter transmitting the figures to Trank G. Zarb, administrator of the FEA, I wrote: "Their (the reporting companies) aggregate energy con sumption is about 60 percent of the total energy requirements of the chemical industry. These same companies represent 60 percent of the U.S. chemical industry sales, based upon the latest available published reports for 1973. "Some of the qualifying comments submitted are herewith summarized: "1. Although 26 companies reported, some companies were only able to develop partial data. It is estimated that some thing like 90 to 95 percent of the companies' total energy consumption was reported. "2. Some companies commented that shortages of raw materials early in 1974 and the downturn in the economy towards the end of the year affected their energy-conservation results adversely. "3. There were minor variances in the application of our system. These will be corrected in the September 1975 report. "4. The added energy requirements to meet OSHA and EPA requirements were not estimated by some of the companies in this trial run. "5. Our companies indicate that their processes are most energy-efficient when operated at 85 to 95 percent of nameplate capacity. When operated at more or less than ootimum rates, the processes become less energy-efficient. The current recession will therefore make it increasingly difficult to maintain high energy-conservation performance. "We appreciate the continuing cooperation of FEA in this important undertaking. Our goal for reporting September 1 is to include data from as many MCA member companies as possible, and to continue then and thereafter not only to improve the quality of our data but also the effectiveness of the total voluntary energy conservation effort of the chemical industry." A similar letter will be sent to Rogers C. B. Morton when he is confirmed as Secretary of Commerce. The FEA is planning to contact the presidents of all MCA companies not previously contacted in connection with energy conservation program. the L CMA 070861 E 4 There are a few personnel notes with which to close this month's report. F. Gordon Stephenson has retired after 19 years with us, and Miss Marjorie Campbell has celebrated her 25th anniversary as an MCA staffer. Joseph T. Seawell has joined the MCA staff. He will serve as secretary of the Labels and Precautionary Information Committee and will also coordinate the phosgene research program. *** CMA 070862