even though wastes, due to particular nature of the industrial sewage, are not compatible.

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Elimination of two operating crews, costly land acquisition, duplication of some capital facilities such as operations centers, etc., all could substantially reduce treatment costs. And industrial treatment facilities constructed by a unit of government would be free of tax obligations.

S. 2947 authorizes appropriations of $25 million annually through fiscal year 1971 and increases demonstration grants to 75 percent in order to encourage participation by local agencies. The committee found that participating public agencies could not readily match the 50-percent demonstration grants under existing law.

PROGRAM GRANTS

Federal program grants to States and interstate agencies have been effective in stimulating and assisting in State and local efforts to investigate water pollution problems and to develop procedures for corrective measures. However, there is a tendency on the part of certain States to reduce their annual expenditures to the point where there are insufficient funds to match Federal contributions. Realistic incentives must be provided to improve State water pollution control programs and to halt the tendency to allow such programs to be weakened.

S. 2947 therefore provides that the Federal grants program be increased from $5 million annually to $10 million annually. In addition, it is recommended that no State be allocated funds from the $5 million increase unless its expenditures are increased above those expended for fiscal year 1966, to match the additional Federal grant.

The Federal Water Pollution Control Act affords clear recognition of the primary rights and responsibilities of the States in preventing and controlling water pollution. Moreover, the States have been encouraged to assume and effectively discharge their appropriate role in the national effort to protect and conserve water quality.

The Federal Government provides financial assistance to State and interstate agencies to assist them in meeting the costs of establishing and maintaining adequate measures for the prevention and control of water pollution. The objective of this program is to provide a realistic incentive for State governments to provide their agencies with necessary financial resources commensurate with their responsibilities. Federal funds in the amount of $5 million annually are currently authorized to be made available for this purpose. This authority, unless renewed by the Congress, expires on June 30, 1968.

It is necessary then to extend the Federal grant authority, to prevent the reduction of State funds, and to require that the State and interstate agencies match the additional increased grant amount with funds representing an accompanying increase over the level of their current expenditures.

The need for increased State expenditures remains, heightened by the new provisions of the Water Quality Act of 1965 and the programs authorized in S. 2947. State programs must be strengthened in order to carry out their responsibilities in the intensified construction grants program, to increase the number of qualified, well-trained personnel, to establish water quality standards consistent with the purposes of the act, to participate in the development of comprehensive plans for water pollution control, and to enforce the abatement of existing pollution and violations of water quality standards.

WASTE TREATMENT GRANTS AND $6 BILLION AUTHORIZATION

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Municipal wastes, discharged untreated or inadequately treated, comprise one of the two major sources of the pollution that threaten the Nation's important water resource. The value of the incentive program of Federal grants to assist municipalities in the construction of required treatment works has been effectively demonstrated. However, the statutory authority for supporting funds for this program expires on June 30, 1967, unless extended by Congress.

The present backlog of need should be eliminated in all communities with the installation of secondary treatment works and predictable future needs should be met. Yet the mounting costs of these projects impose a difficult burden on communities.

S. 2947 removes the dollar ceiling on grants in the present law and provides for a Federal grant of 30 percent of the total project costs. This greater Federal share emphasizes the total inadequacy of current levels of authorization. Therefore there is authorized to be appropriated, in order to carry out this program, a total of $6 billion through fiscal year 1972.

In enacting the Federal Water Pollution Control Act of 1956, Congress declared its policy to provide financial aid to municipalities in connection with the prevention and control of water pollution. Implementation of this policy has been principally in the form of grants to assist municipalities in the construction of necessary treatment works. A huge backlog of treatment facility needs was created during the long period of disregard and neglect that preceded Federal legislation in this field. The staggering financial burden attendant. upon the backlog was clearly beyond the fiscal capability of the

Nation's cities and towns. To an appreciable extent, it remains so today.

The committee inquired at length into all aspects of the construction grants program during the conduct of its hearings. Testimony, statements, and data were received from Governors, mayors, and officials responsible for the treatment and disposal of sewage wastes, from representatives of State and municipal organizations, from industry, conservation organizations, and other interested citizen groups, and from administration officials responsible for the effective operation of the grants program. Careful and thorough consideration. has been given to their views.

Statistics, updated to June 30, 1965, are indicative of the accomplishments of the construction grants program since its inception early in 1957. A total of 6,200 projects with a combined eligible cost of approximately $2.6 billion have received Federal financial assistance in the amount of $658 million, of which $108 million was provided under the Accelerated Public Works Act. This level of activity, although truly commendable, has been sufficient only to keep pace with the needs created by steady population growth and increased urbanization, and to replace facilities which age, technical advancement, or population relocation rendered obsolescent.

The backlog of unmet needs remains to aggravate the problem of providing for the continuing population and urban growths and obsolescence factors. The size of the backlog, while not fully defined, is formidable. In this regard, the committee is particularly disturbed by the failure of the State water pollution control agencies to develop and furnish complete information on construction requirements.

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Their response to the 1965 annual survey of waste treatment needs conducted by the Conference of State Sanitary Engineers estimated the backlog at 5,277 projects costing $1.8 billion. The actual backlog is conceded to be much in excess of this "known" backlog. Needs of one State alone, as presented to the committee, approach this figure. Dr. Hollis Ingraham, testifying for Governor Rockefeller of New York, stated "that barrier is the staggering expense of overcoming the huge backlog of needed sewage treatment works-$1.7 billion in New York alone."

Interceptor sewers to serve new areas, the needs of communities in some States which are required to be identified by official action, and adequately reflected needs of major metropolitan areas are not included in this total. The breakdown of the 1965 annual survey lists only 52 projects needed to serve populations in excess of 100,000 with an associated construction cost total estimated at $378 million.

At the committee's request, data in regard to the needs of the Nation's 100 largest cities (all with populations in excess of 100,000) was compiled. The reported present needs of 80 of these cities are for 367 projects estimated to cost $1.3 billion. It is apparent that the annual survey backlog falls short by at least $1 billion in accurately reflecting the needs of the larger municipalities. To this must be added deficiencies in estimates for the smaller communities.

Appropriate upgrading of treatment requirements to conform with water quality standards will further add to the cost of eliminating the backlog. Thirty percent of the 5,277 projects included in the annual survey backlog are currently deemed to require only primary treatment. If secondary treatment is considered necessary for these projects, an increase of $800 million would accrue to the States' $1.8 billion backlog estimate. In its November 1965 report, "Restoring the Quality of Our Environment," the Environmental Pollution Panel of the President's Science Advisory Committee stated:

Estimates of required expenditures to provide secondary treatment of wastes for 80 percent of our population by 1975 are on the order of $20 billion, of which Federal funds will be a substantial part.

The primary incentive aspect of the Federal construction grants, while remarkably successful, has not been realized in one very important area. The Nation's larger municipalities with their commensurately larger and ever-growing needs have not found the Federal grants an adequate stimulus.

The dollar ceiling limitations imposed on the grant amount have effectively lowered the Federal share for their projects well below the 30-percent assistance provided to the smaller communities. In many cases, the grant offered to assist the larger project is in the range of 10 to 15 percent of its total cost. Cities such as Chicago, Ill., Nashville, Tenn., Detroit, Mich., and St. Louis, Mo., whose treatment needs entail expenditures of $67 to $196.5 million, are understandably less than encouraged by a grant in the amount of $1.2 million as presently authorized.

In his statement supporting an expanded Federal commitment, Mayor Ralph Locher, of Cleveland, Ohio, testified:

If there is no Federal help available, $900 million, which should be approximately Cleveland's share for eliminating

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pollution, is equivalent to nearly 15 years of our general fund budget of $62 million. Think of it. For the next 15 years we would have to devote as much to water pollution as we now

spend for all city operations other than utilities. There is only one word to describe that-"impossible."

The committee finds that the needs of the larger municipalities comprise an appreciable, if not indeed a major, component of the total municipal wastes problem.

REIMBURSEMENT

Pressures on the Federal dollar make impossible immediate appropriation of all funds necessary for sewage treatment plant construction. Some States are prepared to go ahead on their own more rapidly than the availability of Federal funds.

Senator Jacob Javits of New York pointed out that his State was prepared to go ahead with its own funds if reimbursement of the Federal share could be provided.

The committee concurs with the senior Senator from New York and commends his State for its positive action in proceeding to solve its pollution problem. S. 2947 contains a prefinancing provision which will allow those States to be reimbursed for approved projects from the Federal share as it becomes available in the regular allocation process.

The committee, however, strongly suggests that the existence of the prefinancing provision does not, of itself, mean that the Federal share of a project's cost will be provided. Those States wishing to take advantage of this provision must remember that in anticipating allocations for approved projects they are assuming a certain risk. But that risk and the Federal policy making it possible should accelerate construction and reduce costs.

METROPOLITAN AREA PLANNING INCENTIVE

Metropolitan areas are the major source of sewage. If an adequate level of waste treatment is to be attained without bankrupting our cities, joint planning and, where feasible, joint construction of treatment works is essential. The committee has provided that such metropolitan area planning shall be encouraged through provision of an additional 10 percent of project costs under the basic program. This is an increase of 7 percent over the amount authorized under the Water Quality Act.

It is expected that metropolitan areas in river basins designated under title I will, as part of the plan, be encouraged to construct joint facilities. Therefore, the additional 10 percent provided under section 8 does not apply to 50-percent grants made under the clean rivers program.