Chief among them was a construction permit required by the Bay Area Air Pollution Control District (BAAPCD).

Until the BAAPCD approved this permit, federal government regulations forbade the issuance of any of five permits from the Army Corps of Engineers, or the U.S. Coast Guard, even if the federal EIS had been approved.

The trouble was, Dow could not get approval from the BAAPCD.

Dow applied for a BAAPCD permit on May 3, 1976. On Aug. 11, the permit was denied. Dow appealed the decision on Aug. 20 and the appeal was pending when Dow abandoned its plans.

During this same period, Dow was embroiled with the state and the Sierra Club over the adequacy of Solano County's environmental impact report and the Corps of Engineers' environmental impact statement.

Not only had the EIR been challenged in court by environmentalists, Dep. Atty. Gen. Larry King held that five state agencies were required to supplement it if they found it inadequate.

In addition, Gov. Brown's secretary of the state Resources Agency, Claire Dedrick, in following required procedure to comment on the Army's preliminary EIS, found it inadequate.

So, too, did the federal Environmental Protection Agency.

With the Solano County EIR deemed inadequate, nine key permits from five state agencies hung in the balance.

Pressure was building. Dow executives not directly connected with the company's Western division were showing increased resistance to permit the project to go ahead. Sources said they had projects of their own in mind on which they thought Dow could better invest the money.

In addition, political pressure was mounting as politicians and labor union officials called for action to save the project and provide jobs.

Bill Press, Gov. Brown's director of the state Office of Planning and Research, arranged for Dow officials to meet with Brown in November.

At this meeting, Dow agreed to a consolidated hearing of all five state agencies from which permits were required.

Press assured Dow during this meeting that Dow would have an answer one way or the other on its nine key state permits within one month of the hearing. A consolidated hearing was held a month later on Dec. 8-9.

But Press' promise went sour. In an unexpected move, Dep. Atty. Gen. King only days before the hearing threw a curve.

King said state agencies could not issue permits so long as the Solano County EIR was found to be deficient.

Dow went into the Dec. 8-9 hearing with the answers to 172 written questions. When the hearing ended, Dow was asked to prepare answers for 50 other questions.

A month later, Dow withdrew its project. And, suspicions of environmentalists to the contrary, Jones, Dow's head of government and community relations insisted Dow's decision is final and "dead serious."

He said the $500 million has already been reallocated by Dow for projects in the midwest and Canada.

Dow said it believes its plant would have more than met environmental standards.

The lawsuit filed by the Sierra Club against the Solano County EIR, Dow said, was without merit.

R. E. Perry, Dow's project coordinator, said last October during testimony before a state Senate committee, "In my opinion, these actions are typical of the delaying tactics employed so often to defeat a project, not on its merits, but by exasperation."

Jones said the attorney general's opinions amounted to changing the rules in the middle of the game.

In the wake of Dow's decision, there is much smoke and not a little finger pointing.

In spite of the opinions of his own office, Atty. Gen. Evelle J. Younger issued a statement in which he lamented Dow's decision and directed his staff to find ways to reform the permit process.

In spite of red tape at the state level, Press of the state Office of Planning and Research blamed the failure of the Bay Area Air Pollution Control District to issue a permit, and federal problems, for Dow's decision.

"I think the state did everything it could to make a prompt and fair decision and an informed decision," Press said.

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He issued a list of dozens of actions the state had taken to accelerate the permit process.

Lawmaker after lawmaker has issued statements calling for reforms in the permit process.

Gov. Brown is himself alarmed. Last week, he flew to New York to meet with leading business executives to convince them of the error of a report issued by an industrial plant siting consulting firm in early 1975 which rated California with the next to worst business climate among the 48 contiguous states.

Brown told the Times, "That report is so riddled with errors and inaccuracies that if the person who wrote it worked for me I would fire him."

Still, Brown's role in the Dow affair has been the subject of criticism from both Dow executives and state legislators.

Jones allows that Brown, "didn't invent this (environmental) thing. It has grown up over the years. The governor inherited it."

While lauding Brown's efforts during the last couple of months, Jones said, Dow's decision might have been different ". . . if we could have ever gotten a commitment from the governor, privately or publicly, that the state was going to try to help make this project happen and we . . . didn't have to fight this battle all by ourselves."

For his part, Brown scolded Dow for pulling out when it would have had a decision on state permits within another 70 days.

In Jones' view, as well as the view of the governor's office and legislators, California must overhaul its environmental approved process without compromising the environment.

In the meantime, the state's "good faith," in the mind of one source close to the Dow project and long familiar with Sacramento polities, is "irrelevant if it's going to take so long when a company can build elsewhere where problems don't exist."

To that end, Press has prepared a number of recommendations to accelerate the permit process.

"The permit process," Press said, "is in desperate need of improvement."

Mr. Chairman and members of the Subcommittee on Environmental

Pollution:

My name is Albert A. Walsh and I am President of the National Realty Committee, Inc. (NRC). NRC is a business league of several hundred of the nation's largest firms involved, directly or indirectly, in the real estate industry throughout the United States, including real estate owners, investors, developers, and related organizations

and institutions.

I welcome the opportunity to address this Subcommittee regarding amendments to the Clean Air Act although I am sure that I share with the majority of its members the sentiment that it would have been preferable to have completed action on this legislation during the last session of the Congress.

Because there has been no intervening final legislative action, the concerns of NRC are much the same as they were when I addressed this Subcommittee nearly two years ago. However, there has been considerable progress in clarifying the legislative issues in both the House and the Senate, particularly with regard to those issues of concern to the real estate industry. Therefore, I will address myself to the legislative proposals which are currently before this Subcommittee and merely refer you to my testimony of April 24, 1975 for an explanation of the specific

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areas of concern which have given rise to NRC's continuing interest in the Clean Air Act Amendments. For your convenience, I have submitted a copy of that earlier testimony as an Appendix to the five copies of my current testimony which were submitted on

February 9.

As further background, I would like to point out that NRC strongly supported the Clean Air Act Amendments of 1976 reported by the House Interstate and Foreign Commerce Committee and passed by the House. NRC also supported the version of the Amendments as reported by the Conference Committee on September 30, 1976.

This Subcommittee currently has at least three legislative proposals before it: S-251, S-252 and S-253. The first order of business is to determine which of these proposals, if any, will be the starting point for Subcommittee markup later in the session. The three proposals offer two basic approaches.

S-251 deals only

with motor vehicle emissions standards and an extension of the

authorization for appropriations under the Act. S-252 and S-253 are comprehensive bills representing the culmination of the work during the last session of the Senate and the Conference Committee,

respectively.