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[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

  HELPING SMALL DRY CLEANERS ADOPT SAFER TECHNOLOGIES: WITHOUT LOSING 
                               YOUR SHIRT

=======================================================================

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON TAX, FINANCE, AND EXPORTS

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                     WASHINGTON, DC, JULY 20, 2000

                               __________

                           Serial No. 106-69

                               __________

         Printed for the use of the Committee on Small Business

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
67-353                     WASHINGTON : 2000

                      COMMITTEE ON SMALL BUSINESS

JAMES M. TALENT, Missouri, Chairman  NYDIA M. VELAZQUEZ, New York
LARRY COMBEST, Texas                 JUANITIA MILLENDER-McDONALD, 
JOEL HEFLEY, Colorado                    California
DONALD A. MANZULLO, Illinois         DANNY K. DAVIS, Illinois
ROSCOE G. BARTLETT, Maryland         CAROLYN McCARTHY, New York
FRANK A. LoBIONDO, New Jersey        BILL PASCRELL, New Jersey
SUE W. KELLY, New York               RUBEN HINOJOSA, Texas
STEVEN J. CHABOT, Ohio               DONNA M. CHRISTIAN-CHRISTENSEN, 
PHIL ENGLISH, Pennsylvania               Virgin Islands
DAVID M. McINTOSH, Indiana           ROBERT A. BRADY, Pennsylvania
RICK HILL, Montana                   TOM UDALL, New Mexico
JOSEPH R. PITTS, Pennsylvania        DENNIS MOORE, Kansas
MICHAEL P. FORBES, New York          STEPHANIE TUBBS JONES, Ohio
JOHN E. SWEENEY, New York            CHARLES A. GONZALEZ, Texas
PATRICK J. TOOMEY, Pennsylvania      DAVID D. PHELPS, Illinois
JIM DeMINT, South Carolina           GRACE F. NAPOLITANO, California
EDWARD PEASE, Indiana                BRIAN BAIRD, Washington
JOHN THUNE, South Dakota             MARK UDALL, Colorado
MARY BONO, California                HELLEY BERKLEY, Nevada
                     Harry Katrichis, Chief Counsel
                  Michael Day, Minority Staff Director
                                 ------                                

               Subcommittee on Tax, Finance, and Exports

                 DONALD A. MANZULLO, Illinois, Chairman
STEVEN J. CHABOT, Ohio               CAROLYN McCARTHY, New York
PHIL ENGLISH, Pennsylvania           RUBEN HINOJOSA, Texas
PATRICK J. TOOMEY, Pennsylvania      CHARLES A. GONZALEZ, Texas
                                     GRACE F. NAPOLITANO, California
           Philip Eskeland, Senior Professional Staff Member

                            C O N T E N T S

                                                                   Page
Hearing held on July 20, 2000....................................     1

                               WITNESSES

Camp, Dave, Member, U.S. House of Representatives................     2
Price, David, Member, U.S. House of Representatives..............     3
Ustanik, Tom, Owner, Lansing Cleaners............................     8
Shaw, Gordon, Former Owner, Fairlane Cleaners....................     9
Fisher, William, Chief Executive Officer, International Fabricare 
  Institute......................................................    10
DeSimone, Joseph, Professor of Chemistry, University of North 
  Carolina-Chapel Hill...........................................    13
Cole, Henry, President, Henry S. Cole & Associates, Inc..........    14

                                APPENDIX

Opening statements:
    Manzullo, Hon. Donald A......................................    30
    McCarthy, Hon. Carolyn.......................................    31
Prepared statements:
    Camp, Dave...................................................    32
    Price, David.................................................    34
    Ustanik, Tom.................................................    36
    Shaw, Gordon.................................................    41
    Fisher, William..............................................    45
    DeSimone, Joseph.............................................    51
    Cole, Henry..................................................    57
Additional Information:
    Written testimony of Rep. Carolyn Maloney....................    71
    Written testimony of Ted Williams, Sr........................    73
    Written testimony of Ann Hargrove, President, Ann Hargrove 
      and Associates.............................................    79
    Written testimony of Carl Rohman, Owner, Hangers Cleaners....    81
    Written testimony of Sam Brickle.............................    86
    Letter to Chairman Manzullo from Bank of America.............    91
    Letter to Chairman Manzullo from Global Technologies.........    93
    Letter to Chairman Manzullo from Clean Water Action..........    96
    Letter to Representative Camp from the Joint Committee on 
      Taxation...................................................    97
    Letter to Chairman Manzullo from Three Rivers Constitution...    98

 
   HEARING ON HELPING DRY CLEANERS ADOPT SAFER TECHNOLOGIES: WITHOUT 
                           LOSING YOUR SHIRT!

                              ----------                              

                        THURSDAY, JULY 20, 2000

                  House of Representatives,
          Subcommittee on Tax, Finance and Exports,
                               Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:05 a.m. in 
room 2360, Rayburn House Office Building, Hon. Donald A. 
Manzullo, (chairman of the Subcommittee) presiding.
    Chairman Manzullo. I am pleased to call this hearing to 
highlight what we should be doing more of in Congress--adopting 
incentive based approaches to resolving complex environmental 
problems, as opposed to heavy-handed, one-size-fits all 
government imposed regulatory mandates on small businesses.
    There are more than 30,000 dry cleaners across the country. 
Most employ only a handful of workers. They are truly small 
businesses. These small dry cleaners face immense financial 
pressures on numerous fronts, including casual work days that 
have resulted in less business for dry cleaners, aggressive 
price competition and lingering superfund liabilities at the 
work site. We should do everything in our power to make sure 
that we do not add to their problems.
    The Environmental Dry Cleaning Tax Credit Act is a 
bipartisan, creative alternative that deserves serious 
consideration by every Member of Congress. The benefits 
associated with this bill clearly outweigh the long-term 
environmental costs of clean up if we do nothing.
    Just a few days ago, the North Carolina legislature passed 
a similar bill to H.R. 1303. It will be interesting to see the 
impact of this initiative on the state level. I look forward to 
hearing the testimony of the witnesses and particularly welcome 
those who have traveled a great distance to be with us this 
morning.
    I now yield for an opening statement from my good friend 
from New York, the Ranking Minority Member, Mrs. McCarthy.
    Mrs. McCarthy. I thank you, Mr. Chairman, and I apologize 
for being late. I will actually just enter my opening statement 
into the record to save time.
    Chairman Manzullo. I appreciate that very much. Without 
objection.
    Do either of you have a pressing obligation right after 
this? Dave, do you have a mark up that you are in the middle 
of?
    Mr. Price. I do, but it is right across the hall.
    Chairman Manzullo. All right. Who wants to go first?
    Mr. Camp. You can go ahead. I do not have a mark up.
    Mr. Price. Go ahead. I will gladly defer to my colleague.
    Chairman Manzullo. Okay.
    Mr. Price. There is no rush over here.
    Chairman Manzullo. Congressman Camp? We are going to have 
the five minute rule that applies to everybody, including those 
who wear pins.

   STATEMENT OF THE HONORABLE DAVE CAMP, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Camp. Well, thank you very much, Mr. Chairman. I will 
try to keep my remarks under five minutes.
    Congresswoman McCarthy, thank you very much for allowing me 
the chance to testify before this distinguished Subcommittee. I 
appreciate the opportunity, and I commend the leadership of 
Chairman Manzullo for calling this hearing.
    Our local dry cleaner is probably one of the most common 
services that we all use, and it is such a part of our lives 
that we do not even give a second thought to how our clothes 
are cleaned in many cases. For most of us, our clothes are 
cleaned right now using a 1960s era technology, specifically by 
a chemical known as perc.
    Today's perc dry cleaners certainly look a lot different 
than they did when the technology was first introduced. 
Emissions are less, and the cleaning machinery is considerably 
more efficient, as we will hear from other folks today at this 
hearing.
    I believe we need to take the next step away from 
incremental changes in existing technologies to new 
technologies and cleaner technologies. Two of these are wet 
cleaning and carbon dioxide cleaning, and they are the subject 
of today's hearing. I think they hold a potential for enormous 
gains in the control of emissions into the environment. That is 
why last year I introduced H.R. 1303 with bipartisan support 
from my good friend and colleague, David Price. We are original 
co-sponsors of the bill.
    This legislation provides a tax credit for a portion of the 
cost of a new dry cleaning machine using environmentally 
friendly technology and cleaning methods. It does not 
discriminate in favor of or against any specific technology. It 
simply provides a tax credit on an even playing field for any 
dry cleaning method that does not use the perc chemical or a 
petroleum derived compound.
    The wet cleaning technology and the carbon dioxide 
technology can clean a person's clothes effectively, but today 
these alternatives are still at the stage where they are not 
yet economically competitive with traditional dry cleaning 
methods.
    Existing dry cleaners right now may want to make a shift to 
new technology for a variety of reasons. They may be frustrated 
with Clean Air Act requirements instead of worrying about 
cleaning clothes, and they may be hearing from customers who 
are worried about some of the studies that have been pointing 
toward risks in the environment or to health, associated with 
traditional dry cleaning methods and many cannot afford it.
    Right now, because this brand new technology does cost 
more--the average carbon dioxide machine may cost as much as 
$150,000, more than twice the cost of a traditional machine--
there are only a small number of machines currently operating, 
and the big reason for that is the cost of this equipment.
    The best way to bring down the cost is to encourage the 
purchase and manufacture of more machines. A tax credit to 
offset a portion of this cost will make the difference for at 
least some dry cleaners who are interested in using a cleaner 
and different technology.
    The intention of my bill is to allow cleaner dry cleaning 
technology to get off the ground and start making an impact. 
That is what my bill does. It provides a 20 percent tax credit 
to the purchaser of a dry cleaning machine using 
environmentally friendly methods. As I mentioned earlier, the 
bill does not discriminate for or against any particular 
cleaning method.
    Mr. Chairman, we all agree that we have a commitment to 
ensuring the cleanest possible environment for our families and 
our children, and there are two ways that the government can do 
that. First, we can impose mandates. Second, the government can 
contribute to a cleaner environment by encouraging the 
development and use of newer technologies.
    We already see that in the Tax Code with tax credits for 
the use of electric vehicles, for example, and for wind energy, 
just to name a few. H.R. 1303 is designed to be an incentive 
for the purchase of better technology that might not otherwise 
occur.
    In closing, I want to thank again the Chairman and the 
Committee for calling this hearing and for calling attention to 
this important issue.
    Thank you.
    [Mr. Camp's statement may be found in appendix]
    Chairman Manzullo. I appreciate that.
    Congressman Price.

STATEMENT OF THE HONORABLE DAVID E. PRICE, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Price. Thank you, Mr. Chairman, Mrs. McCarthy, other 
Members of the Subcommittee. I appreciate the invitation to 
appear here today to express my support for H.R. 1303, the 
Camp-Price Environmental Dry Cleaning Tax Credit Act.
    Dave Camp and I have worked closely together in drafting 
this legislation. It was introduced on March 25 of last year 
and now has 29 bipartisan co-sponsors. This legislation will 
provide an incentive for dry cleaners to make the transition to 
environmentally friendly dry cleaning technologies by providing 
a 20 percent tax credit for the purchase of technologies that 
substantially reduce risk to public health and the environment. 
Currently these would include liquid carbon dioxide 
technologies and wet cleaning technologies, which rely on water 
based solvents.
    I should mention here that we became aware during the final 
stages of drafting the bill that references to ``dry cleaning'' 
might be interpreted to exclude so-called wet cleaning 
technologies, which was not our intent and is not our intent. 
We were advised at the time by legislative counsel that a 
clarification of this issue would be appropriate in report 
language accompanying this bill or any legislative vehicle 
containing this bill.
    I first became interested in the idea of a tax credit for 
dry cleaners after hearing about the work of Joe DeSimone, a 
professor of chemistry at UNC-Chapel Hill and a professor of 
chemical engineering at North Carolina State University. Joe is 
here in the audience today and has worked tirelessly on this 
technology. He is also the director of the NSF Science and 
Technology Center, and he is co-founder of Micell Technologies 
located in Research Triangle Park in North Carolina.
    The genius of Research Triangle Park, Mr. Chairman, as you 
may know, has been to attract the most dynamic high tech 
companies to an area with a high quality of living and in the 
midst of three major research universities, North Carolina 
State, UNC-Chapel Hill and Duke University. RTP, as we call it, 
has been the source of countless innovations over the year, and 
the liquid CO2 dry cleaning technology developed by 
Dr. DeSimone, who will be testifying later this morning, is a 
good example of RTP at its best.
    Dr. DeSimone's story also illustrates how the federal 
government can play a constructive role in the development of 
technologies which benefit society. In 1995, Dr. DeSimone and 
fellow scientists Timothy Romack and James McClain invented an 
environmentally friendly alternative to traditional dry 
cleaning and metal cleaning methods; that is, the use of carbon 
dioxide for professional garment care, metal degreasing and 
textile processing. This process eliminates the need for 
conventional dry cleaning solvents such as perchloroethylene or 
perc, and it frees dry cleaners from the regulatory burdens 
associated with such solvents.
    Funding from both the NSF and EPA's Green Chemistry Program 
supported the basic research that led to Dr. DeSimone's 
development of cleaning detergents that dissolve in liquid 
CO2. This new technology is both environmentally 
friendly and safer for consumers and workers in the dry 
cleaning industry.
    I think there is a role for the federal government in 
encouraging the use of technologies like this. I am not talking 
about choosing winners and losers. The federal government 
should not be in that business. It should not be favoring one 
technology over another. But we can play a constructive role in 
accelerating the transition to technologies that meet our 
criteria for greater energy efficiency or for the greater 
protection of public health and the environment.
    If we really want the private sector to move towards 
greener and healthier technologies and, as Representative Camp 
just said, if we do not want simply to rely on new regulation 
to do this, the simplest and most effective method is through 
targeted tax incentives.
    President Clinton and others have proposed this type of 
approach for equipment that helps reduce energy consumption, 
and I think we need to be looking at it and considering the 
same approach in other areas of protecting human health and the 
environment.
    The North Carolina General Assembly enacted a similar 20 
percent tax credit for environmentally friendly dry cleaning 
technologies on July 12, just a week ago. I hope this 
Subcommittee will agree with North Carolina that investing in 
these new dry cleaning technologies through tax credits is 
worthwhile.
    In our lifetimes, the pace of technological progress and 
change has been astounding. From health care, to manufacturing, 
to communications, technology has changed in some way almost 
everything about the way we live and has vastly improved the 
efficiency and the scope of what we as a society can 
accomplish.
    We are just beginning to see the possibilities of what 
technology can accomplish for the environment and for 
environmental protection.
    Environmental technology promises to mend the rift that has 
too often arisen between environmental protection and economic 
development. It will make reducing pollution easier and cheaper 
and will itself become an engine for growth in our economy.
    H.R. 1303 would take a small, but important, step in the 
direction of encouraging the use of forward thinking technology 
in the dry cleaning industry. I urge you to consider it 
favorably, and I thank you for the opportunity to testify this 
morning.
    [Mr. Price's statement may be found in appendix]
    Chairman Manzullo. Thank you, Congressman Price.
    We are going to do something a little bit out of order 
here. Before we proceed with questions of the two Members, 
Congressman Weller has a constituent who will be appearing on 
the second panel. He has to run off to a Ways and Means mark 
up.
    Jerry, if you would like to introduce your constituent, 
then we will bring him up here at the appropriate time.
    Mr. Weller. Mr. Chairman, Mrs. McCarthy, I thank you for 
the courtesy. Today is a great day. We are going to pass 
legislation today wiping out the marriage tax penalty for 
25,000,000 married working couples, so I know Representative 
Camp and I will be on the Floor working on that before the 
Committee.
    I am sorry. Mrs. McCarthy?
    Mrs. McCarthy. Well, I was just wondering. Being that we 
are letting you go first, can I get some of my projects 
through? [Laughter]
    Mr. Weller. Thank you for the courtesy of allowing me to 
introduce a constituent of mine who is going to be testifying 
before your Subcommittee today and for accommodating me so I 
can move and get to the Floor.
    Mr. Chairman, Mrs. McCarthy, it is my privilege today to 
introduce a constituent who is going to be testifying on the 
second panel, Tom Ustanik, of Lansing, Illinois, a south 
suburban community just south of Chicago on the state line, who 
is going to testify here today on H.R. 1303, the Dry Cleaning 
Environmental Tax Credit Act.
    Mr. Ustanik and his family have owned and operated Lansing 
Cleaners in my district since 1946. They have five locations, 
two in Illinois, two in northwest Indiana and a main plant in 
Lansing, Illinois, which does both retail cleaning, as well as 
fire restoration work.
    The Ustaniks have made great efforts to make their 
businesses as environmentally friendly as possible. These 
efforts include transitioning over to cleaner and safer 
cleaning technologies such as wet cleaning and liquid carbon 
dioxide machines. As you may imagine, these newer and cleaner 
technologies often come at a higher cost, which leaves us as a 
society to decide which is more important, a cleaner 
environment or lower cost equipment.
    We would argue that in the long run everyone benefits by 
encouraging business owners such as the Ustaniks to incorporate 
cleaner and safer technologies into their businesses. That is 
why I support H.R. 1303, which provides a tax credit to 
businesses that take advantage of these technologies.
    I look forward to hearing about Mr. Ustanik's testimony 
before your Subcommittee about these new technologies, as well 
as they help our environment and improve his business. Mr. 
Chairman and Mrs. McCarthy, thank you for the courtesy of 
allowing me to slip in to introduce my constituent and also 
voice my support for H.R. 1303. Thank you, Mr. Chairman.
    Chairman Manzullo. Thank you, Congressman Weller.
    Mrs. McCarthy, do you have a couple of questions you want 
to ask?
    Mrs. McCarthy. I do, and I thank you.
    I think it is important, Congressman Price, that you go 
over again, because I think this is where the confusion comes 
in. Your position has been that the tax credit does not 
discriminate against or does not favor any one dry cleaning 
process, and I think it is important that you explain that 
again.
    The bill specifically states qualified dry cleaning 
property means equipment designed primarily to dry clean 
clothing and other fabric. It is my understanding that wet 
cleaning is not considered dry cleaning. Do you have any plans 
to make any changes to the bill by adding language including 
the wet cleaning process?
    Just on a follow up, the majority of our small businesses 
that operate dry cleaners are family owned, and my concern is 
even with the 20 percent tax credit would our real small 
businesses, you know, the mom and pop, two people running the 
business very long hours, would they be able to afford the new 
equipment? Is it going to be enough for them?
    Mr. Price. That latter question is one that the 
Subcommittee may well want to examine. We thought the 20 
percent credit was about right. As I said, in the case of North 
Carolina, it can be combined with local or state tax credits. 
But exactly what kind of tax credit would be appropriate is an 
open question.
    I think these technologies will increasingly become 
commercially viable. That is our hope. I know in the case of 
the CO2 technology the costs have already come down 
some and have brought this within reach for some 
entrepreneurial dry cleaning owners. But we certainly do need a 
tax credit now to make this viable for the majority of 
operators. I would invite the Committee's attention to whether 
the 20 percent level is in fact the optimal level.
    Your assumption, Ms. McCarthy, is exactly right about the 
so-called wet cleaning technologies. Our intention is that 
those wet cleaning technologies which rely on water based 
solvents would be included. The point here is not to favor any 
one technology, but to favor environmentally friendly 
technologies in general.
    If it is deemed necessary to add language to the bill or 
certainly to add report language accompanying the bill, I think 
that would be appropriate, and again that is the Subcommittee's 
judgement whether that is necessary to clarify our intent.
    Mr. Camp. Could I just comment as well, please? Yes, our 
intent is to include the wet dry cleaning technology, and the 
language of the bill defines what is a hazardous solvent and 
then says all other technologies are in, so if we need further 
clarification I would certainly agree with Congressman Price 
that we would be willing to do that because our intent was in 
drafting the bill to also include that technology.
    Also, the machines are not as affordable as we would like 
them to be now, and that is why we need the tax credit. We 
believe that as this tax credit, first of all, offsets 20 
percent of the cost that is a help, but as more machines are 
built economies of scale and Economics 101 will kick in, and 
hopefully the cost of those machines will come down, but right 
now this is new technology, and it is more expensive, but if 
the machines were affordable we would not be before you with 
this legislation.
    Mrs. McCarthy. Well, I applaud your efforts because 
certainly even in my own local district when a new dry cleaner 
is trying to come into the area we are seeing a lot of 
resistance, you know, from the neighborhood mainly because the 
reports that have been going out as far as the emissions and 
everything else, so I applaud what you are trying to do, and I 
think it is a great first step.
    Mr. Price. Thank you.
    Mr. Camp. Thank you.
    Chairman Manzullo. Are both of you gentlemen going to be 
able to join us on the panel up here?
    Mr. Camp. I will be able to.
    Chairman Manzullo. How about you, Congressman Price?
    Mr. Price. I have a competing mark up next door, so I will 
do the best I can.
    Chairman Manzullo. I do not have any questions.
    Congressman Camp, you will be able to respond and ask 
questions. Any question I would have asked you can be handled 
otherwise.
    Okay. There being no more questions, you are both excused. 
I appreciate your coming.
    Mr. Camp. Thank you.
    Mr. Price. Thank you, Mr. Chairman.
    Chairman Manzullo. Mr. Camp, if you want to have a seat up 
here?
    Thank you, Congressman Price.
    If we could have our second panel come up to the table, 
please? Okay. We welcome our second panel. The order of 
witnesses will be Tom Ustanik, who is the owner of Lansing 
Cleaners in Lansing, Illinois. The next witness will be Gordon 
Shaw, a former owner of Fairlane Cleaners in LaJolla, 
California; Bill Fisher, who is the CEO of the International 
Fabricare Institute out of Silver Spring, Maryland, which is 
the industry association.
    Joseph DeSimone, Ph.D., professor of chemistry at UNC at 
Chapel Hill. Wait a second. It is Simone. That is an Italian 
name. You have to pronounce the E at the end. We have 
Norwegians trying to tell Italians how to pronounce Italian 
names. Can you imagine that? He is the chairman and co-founder 
of Micell Technologies out of Raleigh, North Carolina; and 
Henry ``Hank'' Cole, president of Henry S. Cole & Associates, 
Upper Marlboro, Maryland, former science director of Clean 
Water Action.
    We are going to hold everybody to the five minute rule. 
When you see the yellow light come on on the box that means you 
have 30 seconds. When the red light comes on the gavel comes 
down.
    Our first witness, Mr. Ustanik?

           STATEMENT OF TOM USTANIK, LANSING CLEANERS

    Mr. Ustanik. Thank you, Mr. Chairman and Members of the 
Subcommittee. I appreciate the opportunity to be able to talk 
in benefit of this bill that holds the future of our industry.
    Chairman Manzullo. Could you bring the mike closer to your 
mouth?
    Mr. Ustanik. Sure.
    Chairman Manzullo. Thank you.
    Mr. Ustanik. Do you want me to start over or just go from 
here?
    Chairman Manzullo. No. Go ahead.
    Mr. Ustanik. Okay. This bill will help us facilitate 
bringing about dry cleaning technologies that are both safe and 
sustainable. Wet cleaning is a water based cleaning system that 
uses biodegradable detergents to clean clothing that normally 
is not able to be cleaned in water. CO2 is a 
cleaning system, no matter whose you use, that uses 
CO2, the same that you would drink in your soda pop 
or exhale in normal breath.
    These are both sustainable technologies. Water is usually 
recyclable, and CO2, the kind that we use in our 
machinery, is recaptured from other industrial processes. This 
eliminate potentials of greenhouse gaseous emissions because we 
use them instead of conventional solvents during their 
production producing greenhouse gases by using energy in their 
production.
    This bill will also facilitate getting access to these 
processes much sooner through our industry. We were one of the 
first to be able to use liquid CO2. We have the 
capability of doing that. We still use dry cleaning machines 
that use perchloroethylene. They are fourth generation 
machines, and eventually they will fail. All machinery does, 
but a washer or dry cleaning machine using CO2 will 
not have much more of an additional impact into the environment 
upon a failure, while my perc machines always can.
    This will also help us in moving this along into a more 
sustainable, cleaner and safer technology without driving us 
into the ground with regulations that we have quite a bit of. 
With four machines that use perc, I have a considerable amount 
of paperwork in order to justify their operations and a 
considerable amount of inspection. These become more ominous to 
a smaller company that is only two or three employees.
    This bill will help us move forward in that direction. This 
will allow us to have machinery that is safe and sustainable. 
This bill will also allow us to get there sooner by having 
additional machines put out, which will drive down the cost, 
just as when the personal computers came out they were quite 
expensive. Now you can get one for $99 that is ten times more 
powerful.
    This will also show the cleaners that government is willing 
to work with us to help us go along without driving us into 
oblivion. We do not have the capability as a large company like 
Dow or General Motors to survive against environmental 
onslaught. It is just us.
    I appreciate the time that you have given us in 
consideration of this bill and hope that you will pass it. 
Thank you.
    [Mr. Ustanik 's statement may be found in appendix]
    Chairman Manzullo. Thank you, Mr. Ustanik.
    Mr. Shaw.

          STATEMENT OF GORDON SHAW, FAIRLANE CLEANERS

    Mr. Shaw. Thank you, Chairman Manzullo and Subcommittee 
Members. I really appreciate the opportunity to come here today 
and give my testimony in support of H.R. 1303.
    The reason I have come from San Diego is mainly there are 
three points that I feel are very important. First of all, our 
dry cleaning industry provides an essential service to everyone 
in the country, while providing paychecks to hundreds of 
thousands of Americans.
    Secondly, we in the industry want to be the best neighbors 
that we can and also to be the best employers that we can. This 
bill can help revolutionize the industry in a positive way for 
the owners, the employees and for our communities.
    I have been in the dry cleaning industry for 22 years in 
the San Diego area, and over those 22 years not only have I 
paid attention to my business, but I have gotten an acute 
understanding of the industry and a great interest in the 
industry. Through that interest, I have served as a director 
and president of the San Diego Dry Cleaners Association, a 
director and vice-president of the California Cleaners 
Association. I have also been a member of a compliance 
improvement team with the San Diego Air Pollution Control 
District.
    Although I no longer hold those positions, my interest in 
the industry remains just as strong. I have had eight different 
locations, five dry cleaning plants, all of them 
perchloroethylene plants, and I have always gone to all the 
trade shows and stayed up to date with the newest technology, 
one of which is the CO2 technology, among other 
alternative solvents.
    These technologies give me a great deal of interest because 
I see that the way that the industry's future is. Living near 
the ocean, I have a lot of respect for the environment, the 
ocean, and anything I can do in my industry to improve the way 
we do things for our environment is of great interest to me.
    H.R. 1303 is a great way to start. It offers something that 
we in the industry can do positively for the environment, but 
it needs to be encouraged, and it needs to be a lot more 
affordable.
    Right now in California, well over 90 percent of all the 
dry cleaning is done in perchloroethylene. EPA has determined 
that perc is a hazardous material. Liquid carbon dioxide is a 
better solvent. It creates less wear and tear on clothing. It 
is safer on many of the delicate garments, but the machines are 
very expensive, as we have already heard. They can be two to 
three times as expensive to purchase. They cost more to 
install. They require more extensive tenant improvements to 
install, and they are more expensive to operate.
    With the tax credit, this will help to stimulate dry 
cleaners like myself to take a chance and do something that is 
positive for the industry. States have already come up with an 
incentive. North Carolina and Nebraska have incentives to 
encourage dry cleaners to shift to a more environmentally 
friendly solvent. They are effective, but a national tax credit 
would be much more effective.
    In summation, dry cleaning is everywhere. It is essential 
to everyone. H.R. 1303 protects the environment and all the 
proud, hard working people that work in our industry, and I 
want to be part of positively revolutionizing our industry. Our 
employees and our neighbors deserve the best that we can offer.
    Thank you very much, and I really urge your support of H.R. 
1303.
    [Mr. Shaw's statement may be found in appendix]
    Chairman Manzullo. Before we get to our next witness, could 
somebody very briefly explain dry cleaning with perc, wet 
cleaning without perc and the method we are talking about here? 
You have three different methods.
    Mr. Ustanik. Right.
    Chairman Manzullo. Just very quickly. We need to lay this 
predicate before we go on. Go ahead, Tom.
    Mr. Ustanik. Wet cleaning is typically a very modified, 
high performance washing machine that uses specific detergents 
with regular water in order to clean clothes like the garments 
you are wearing without causing shrinkage, which is normally 
why you would put it in a dry cleaning situation or dye bleed. 
Other than that, it would clean effectively.
    Perchloroethylene is another dry cleaning solvent. It is 
done in enclosed machinery to clean a garment again in this 
respect with no water using detergents to lift stains off your 
garments.
    CO2 would be another ``dry'' solvent--it does 
not have water in it--to clean the garments again in a very 
specific pressurized vessel in order to have a liquid to clean 
your clothing and detergents specific to it.
    Petroleum would be similar as being a non-water solvent and 
also be silicone based.
    Chairman Manzullo. But you cannot clean all clothing in the 
wet cleaning? Is that correct?
    Mr. Ustanik. I was involved as an evaluator for a project 
with design of environment for EPA called the Greener Cleaner, 
and there it was tried to determine how much you absolutely, 
positively could clean in water based.
    Yes, you cannot clean 100 percent, but you also cannot 
clean 100 percent in perc. There are items that you cannot do, 
you cannot do in CO2 and pretty much in any other 
solvent. They do not quite do all of them, but combinations, 
this case wet cleaning and CO2, you can do or 
combinations of any other others if so chosen.
    Chairman Manzullo. Okay. Appreciate that.
    Mr. Fisher.

  STATEMENT OF BILL FISHER, INTERNATIONAL FABRICARE INSTITUTE

    Mr. Fisher. Thank you. To help out on the definition of wet 
cleaning and laundering--as we are the association of dry 
cleaners, which includes CO2, wet cleaners and 
launderers--laundering is what we do to your shirts and 
underwear. Wet cleaning is when we take water and put it in a 
very specialized machine that can be controlled very, very 
closely. Dry cleaning is machine which can be controlled very 
closely.
    Thank you. I am Bill Fisher, chief executive officer of the 
International Fabricare Institute. We are the national and 
international trade association of professional neighborhood 
dry cleaners, launderers and wet cleaners. My comments today 
are on behalf of our members whose stores represent better than 
one-half of the nation's 30,000 mom and pop dry cleaners.
    Today, many of those dry cleaners are either facing or 
going through significant financial hardship. This has been 
brought about by fewer clothes being professionally cleaned as 
a result of casual dress and by an increasing entrance into the 
industry by new investors.
    Before I go any further, let me note on the wet cleaning 
side that wet cleaning technology in fact typically costs about 
$35,000 and that about 40 percent of the existing plants in the 
industry today already do some wet cleaning. In fact, with a 
good wet cleaning machine and dryer, one can do up to about 45 
percent of the garments that would otherwise be professionally 
dry cleaned.
    With an additional $18,000 to $20,000 investment; in other 
words about $50,000 total, one has a complete wet cleaning 
system with tensioning finishing equipment. That is what we 
call it. It is a press where you can stretch the garments while 
you press them, and that is because wet cleaning does shrink 
garments a little bit.
    Right now, unfortunately, as we read the bill as structured 
we felt it was more likely to damage than to help existing 
small business dry cleaners and to further exacerbate their 
financial problems.
    I want to make it clear that we actively support 
environmentally responsible operation of existing dry cleaning 
systems. We actively promote the development and investigation 
of alternative systems. IFI founded the professional wet 
cleaning partnership with Greenpeace and several labor unions. 
We were specifically and directly responsible for the 
introduction of Greenpeace and other environmental groups to 
carbon dioxide cleaning.
    CO2 dry cleaning, by the way, was invented by 
Hughes Aircraft and another company called Global Technology. 
Dr. DeSimone is to be credited for being the first person that 
was able to commercialize it so that in fact dry cleaners have 
been able to begin to use it.
    We tested and recommended to the industry the type of dry 
cleaning equipment chosen by U.S. EPA as the NESHAP standard 
for perc, and we have continually let our members know what 
questions need to be asked, and the answers they have to get in 
order to consider new technology.
    Again, I want to make it clear that we support wet cleaning 
and we support carbon dioxide dry cleaning. We are interested 
in another possible new technology that may fall under this 
bill, dry cleaning in silicone liquid of all things, but in 
representing the dry cleaning industry we would like to make 
sure that this bill in fact is going to do what we believe you 
all intended for it to do.
    I am not going to go into detail with my first set of 
comments that arguably it does not apply to wet cleaning 
technology or the comments that were made about report language 
and/or simple language changes within the bill. That will be 
taken care of, but arguably the bill did not cover wet 
cleaning. We are glad to see that it will because it should.
    On the credit for dry cleaning equipment using reduced 
amounts of hazardous substances, the dry cleaning industry has, 
yes, used a substance that is considered hazardous, perc, for 
many years. We have also worked closely with EPA to reduce our 
consumption, and in fact the average plant today that has put 
in new equipment has a tenfold decrease from that of even ten 
years ago.
    We do believe that the Committee should look at an 
extension of this to dry cleaners who have put in equipment 
that meet the requirements of EPA's NESHAP. We were one of the 
first National Emission Standard groups under the Clean Air Act 
amendments of 1990.
    Dry cleaners in the past four or five years have put in 
some very high technology equipment, and if the Committee would 
like to see them be able to afford to switch to new technology 
they have to pay off what they have. They have done the right 
thing in meeting EPA's regulations.
    The current language states that there is an exception for 
any liquid containing ten percent petroleum solvents, and that 
surprised us. While we do suggest that a solvent such as 
petroleum, if they meet EPA standards, be considered for 
inclusion of the tax credit here, we think the Committee needs 
to be careful about allowing blends that may escape any 
regulations, but again that is something the Committee can look 
at in more detail. Additionally, global stratospheric issues 
are of a concern to us.
    Chairman Manzullo. We are at five minutes. Could you 
summarize in 30 seconds?
    Mr. Fisher. Yes, sir. I will.
    We applaud the Committee for their action. We would like to 
see some of our comments certainly looked at so that there 
could be expansion of the bill to really afford a credit to 
small business dry cleaners, those that we represent.
    As of tomorrow, I have been in this industry for 35 years, 
and there are a lot of wonderful mom and pop people out there. 
I literally talk one on one with thousands of them a year. I 
would like to see our industry be given the chance under this 
bill to move forward to better technologies.
    Thank you.
    [Mr. Fisher's statement may be found in appendix]
    Chairman Manzullo. Thank you, Mr. Fisher.
    Dr. DeSimone.
    Dr. DeSimone. Okay.
    Chairman Manzullo. How do you like it pronounced?
    Dr. DeSimone. My family uses DeSimone, but my cousins use 
DeSimone, but others have used DeSimone.
    Chairman Manzullo. I guess the Norwegian was right on the 
pronunciation.
    I look forward to your testimony.

   STATEMENT OF JOSEPH DESIMONE, PROFESSOR OF CHEMISTRY, UNC 
   CHAPEL HILL, CHAIRMAN AND CO-FOUNDER, MICELL TECHNOLOGIES

    Dr. DeSimone. Thank you. Mr. Chairman and distinguished 
Members of the Subcommittee, thank you for inviting me to 
testify.
    My name is Joseph DeSimone, and I am an academician who has 
dedicated his career to establishing the utility of carbon 
dioxide to replace organic solvents in a wide range of 
processes. I do this through a joint professorship at the 
University of North Carolina at Chapel Hill in chemistry, as 
well as the chemical engineering department at NC State.
    Recently I was appointed by the National Research Council 
onto their Board of Chemical Science and Technology, and my 
students and I have received numerous awards, including the 
Presidential Faculty Fellowship Award, the National Science 
Foundation Young Investigator Award and the Presidential Green 
Chemistry Challenge Award. Most relevant to today's issue, 
however, is I am director of the National Science Foundation's 
Science and Technology Center for Environmentally Responsible 
Solvents and Processes.
    This NSF funded multi-disciplinary, multi-institutional 
center comprised of scientists and engineers from Chapel Hill, 
NC State, North Carolina A&T, as well as the University of 
Texas at Austin, is focused on the use of CO2 to 
replace solvents. We use CO2 research to develop and 
share scientific knowledge profitably among students, among 
scientists, among industry and society for a cleaner 
environment.
    The need for our activity is clear. There is some 
30,000,000,000 pounds of organic solvents that are manufactured 
every year. These solvents get used in everything from cleaning 
hard disk drives to painting cars to dry cleaning clothes. Much 
of the solvent inevitably ends up in our environment, in our 
land, our air and our drinking water.
    I would like to share with you today three thoughts. For 
the first time in history, there is now an environmentally 
responsible alternative available to dry cleaners that 
eliminates their dependency on organic solvents, and that 
choice is carbon dioxide and water.
    Second point. Other industries beyond dry cleaning are 
greatly expanding their utility of CO2 to replace 
their dependency on organic solvents. Dry cleaners are not 
alone.
    Third, government needs to treat small businesses 
differently than the way it treats large, multi-national 
companies in regards to pollution prevention.
    Let me elaborate on these points. We developed a process 
that uses CO2 to clean clothes in. Our focus was the 
development of detergents for CO2. It is the same 
CO2 that is used to carbonate soda in gas form at 
restaurants all over the country. It is a natural substance, 
and it is readily available.
    Carbon dioxide is finding promise as a solvent replacement 
in lots of industry. Many of you heard about decaffeinated 
coffee or naturally decaffeinated coffee. That is a process 
that uses carbon dioxide instead of methylene chloride to 
decaffeinate 250,000,000 pounds per year of coffee beans.
    Dupont has recently announced they are licensing a 
technology from our labs to make Teflon in CO2. They 
are investing $275,000,000 to build a world scale Teflon plant 
that makes Teflon in CO2.
    An offshoot of our university research was the development 
of these detergents for CO2. We recognize, as Mr. 
Fisher mentioned, that other people have invented 
CO2 machines and that detergents are going to allow 
CO2 to be more useful in cleaning. CO2 by 
itself is not effective, just like water by itself is not 
effective.
    Unlike the plastics or paint industry, when we went to 
transfer this technology to the marketplace there are no 
Duponts or IBMs of the dry cleaning industry. There is actually 
very little R&D that gets done on behalf of small businesses, 
and so at this challenge and believing in the impact that we 
would have on society, we decided to form our own small company 
to bring this technology into the marketplace.
    However, it became quite clear to us early on that the 
equipment costs were going to be expensive for our technology. 
These machines are made out of stainless steel. They are a very 
different engineering type of machine than one would use with 
traditional solvents.
    Despite the fact that there are at least four different 
companies now trying to roll out liquid CO2 dry 
cleaning machines, we are all faced with the fact that the 
equipment is more expensive, so despite all the selling about 
the positive attributes of CO2, it being a room 
temperature process, no heat setting of stains, less lint 
generated, better color fastness on many different fabric types 
and no environment contamination issues, small businesses must 
focus on what is the cost as opposed to what is the return on 
investment. This is a challenge for small businesses.
    So we are here today advocating a positive, proactive 
approach that allows small businesses to invest in pollution 
prevention technologies. What it really boils down to is we 
need to treat small businesses different than we do large 
companies. It is okay to shake a stick at a large company to 
invest in pollution prevention technologies, but if we do that 
to small businesses they will inevitably go out of business.
    We see it already with the underground storage tanks in gas 
filling stations across this country where they were 
regulatorily put out of business as opposed to given incentives 
to invest in new tank systems. If we do not do something for 
dry cleaning, we are going to have on our hands a similar 
situation in the dry cleaning industry, and we think that would 
be a shame.
    Thank you for your support for this incentive, and I would 
be happy to answer any questions later on. Thank you.
    [Dr. DeSimone's statement may be found in appendix]
    Chairman Manzullo. I appreciate your testimony.
    Our next witness is Dr. Henry Cole. Dr. Cole.

    STATEMENT OF HENRY S. COLE, PRESIDENT, HENRY S. COLE & 
                           ASSOCIATES

    Dr. Cole. Thank you, Chairman Manzullo and other 
distinguished Members of the Subcommittee, for this excellent 
hearing and for the opportunity to testify.
    My name is Henry Cole. I am president of Henry Cole & 
Associates, a consulting firm that promotes environmentally 
safe communities, technologies and businesses. I am the former 
science director of Clean Water Action and appear today 
representing Clean Water Action and its 700,000 members across 
the U.S.
    I want to make three main points. First, environmental, 
public health and consumer advocates have embraced safe and 
sustainable cleaning technologies, and by that we mean wet 
cleaning and liquid CO2.
    Secondly, these technologies offer safe and healthful 
alternatives to toxic chemicals like perchloroethylene 
currently in widespread use.
    Third, H.R. 1303 is the right approach. It will empower dry 
cleaners to speed up the----
    Chairman Manzullo. Dr. Cole, excuse me a second.
    Dr. Cole. Yes?
    Chairman Manzullo. We have a vote coming up now. I am 
predisposed at this point to cease your testimony, then when we 
come back to start all over with it.
    Are you going to come back, Mr. Camp?
    Mr. Camp. Yes.
    Chairman Manzullo. All right. Why do you not go ahead?
    Dr. Cole. Okay.
    Chairman Manzullo. We still have about another five 
minutes, but if we need time after that I am going to give it 
to you.
    I have stopped the clock. Go ahead. The clock is not 
running, but when the bell goes off the second time please 
stop. Go ahead.
    Dr. Cole. The third point was that H.R. 1303 will empower 
dry cleaners to speed up their transition to safe and healthful 
technologies. This is the right approach for this particular 
industry.
    Let me elaborate. Perchloroethylene is a highly toxic 
chemical and one to which hundreds of thousands and dry 
cleaning workers and members of the public are routinely 
exposed. This chemical poses a range of significant risks and 
hazards associated not only with its use, but with its 
production, its release and its ultimate disposal.
    We acknowledge the progress that dry cleaners have made, 
but it does not eliminate the fact that this is a toxic 
chemical that should be phased out. It is a highly volatile 
liquid that readily evaporates into air and is not only 
difficult to contain, but very burdensome to regulate.
    We know that it affects the nervous system. High exposures 
can cause dizziness, headaches, confusion, nausea, impaired 
ability to walk and speak and unconsciousness. Such conditions 
can occur with accidental releases or spills from machines or 
containers. My written testimony includes an example of a 
recent incident in Florida in which the owner of a dry cleaner 
was overcome and immobilized by perchloroethylene fumes.
    There are also risks associated with long-term exposure to 
lower levels of perchloroethylene. The International Agency for 
Research on Cancer in 1995 upgraded perchloroethylene from a 
possible to a probable human carcinogen. EPA reports that 
perchloroethylene may cause dysfunction of liver and kidneys 
and also cause birth defects.
    A 1998 EPA report presents evidence showing that 
significant concentrations of perchloroethylene occur in the 
following situations; in dry cleaning establishments, including 
some with advanced dry to dry machines, in apartments located 
over dry cleaners, in stores next to dry cleaners such as in 
strip malls. Levels measured as reported by EPA in those 
locations generally exceeded New York state's community health 
guideline of .1 milligram per cubic meter. Frequently the 
values were higher than the one milligram per cubic meter, 
which is New York's recommended corrective action level.
    There is another serious problem. Thousands of dry cleaners 
have released perchloroethylene to soil and groundwater. Once 
in the groundwater, this chemical presents a very nasty clean 
up job--one that is very expensive and very difficult to clean 
up.
    I know about this problem firsthand. One of my clients owns 
and operates about a dozen shopping centers in New England, and 
at about seven of those shopping centers dry cleaners release a 
significant amount of perchloroethylene into the ground. In 
each case, that required a response under state law.
    Two of those cases were terribly unfortunate because not 
only were the releases large, but they occurred in drinking 
water aquifers located upgradient of municipal well fields. Let 
me tell you that those clean ups will take many years to 
complete and will each cost more then $1,000,000.
    Now, as a result, this particular company now prohibits the 
use of perchloroethylene on its premises. It also, because of 
its flammability, prohibits hydrocarbon cleaning as well.
    Chairman Manzullo. Dr. Cole, we have to go vote. We will 
come back, and I will give you an additional couple minutes 
once we get back.
    [Recess.]
    Chairman Manzullo. Okay. We will reconvene our hearing.
    Dr. Cole, had you completed your remarks, or do you want a 
couple of extra minutes?
    Dr. Cole. One minute should do, Mr. Chairman.
    Chairman Manzullo. Sure. Fine. Go right ahead.
    Dr. Cole. At the break, I was making the point that these 
clean ups, the shopping center clean ups from the 
perchloroethylene releases, the two worst ones, each of those, 
the total clean up cost will exceed $1,000,000.
    The point is that when we talk about the expense of 
perchloroethylene we need to fully look at all of the costs, 
including these environmental costs and health costs. We find 
that the costs of perchloroethylene are not so cheap.
    Now, as I said, as a result this particular landlord now 
prohibits the use of perchloroethylene on the premise. It will 
not allow a switch to flammable hydrocarbons either. Its 
preference is that these cleaners go to liquid CO2 
and to wet cleaning. Clearly H.R. 1303 would help dry cleaners 
in situations like this move to safe, preventive and 
sustainable technologies, wet cleaning and CO2.
    Let me repeat my three points. Environmentalists and others 
concerned about our health embrace safe and sustainable 
cleaning technologies, wet cleaning and liquid CO2. 
These technologies offer safe and healthful alternatives to 
toxic chemicals like perchloroethylene currently being used. 
Finally, this bill will empower dry cleaners to make the 
transition to these safe and healthful technologies.
    In conclusion, on behalf of Clean Water Action and its 
700,000 members, we urge Congress to enact this very good piece 
of legislation, and thank you for your efforts, Mr. Chairman, 
and the other sponsors of the bill.
    [Dr. Cole's statement may be found in appendix]
    Chairman Manzullo. Thank you for your patience, Dr. Cole.
    Mr. Camp, I would like to have you go first and make sure 
that I would like to see a dialogue with you and Mr. Fisher 
about the drafting of this bill.
    Mr. Camp. Yes. Thank you very much, Mr. Chairman.
    Before I do that, just one quick question for either Mr. 
Ustanik or Mr. Shaw.
    What kind of impacts would a tax credit have on your bottom 
line like this, and how would it affect your business 
decisions, just quickly?
    Mr. Ustanik. Do you want to answer first?
    Mr. Camp. Mr. Shaw? Go ahead. Either one.
    Mr. Shaw. It would encourage me to move forward with 
something new. Something new is always more expensive, but it 
would be another little vote of confidence. It would not have a 
real significant impact on the bottom line, but it would, you 
know, encourage people to take that step.
    Mr. Ustanik. For us it would mean cutting our time table 
from four years to two years before purchase of an additional 
machine and then, of course, consequently speed up additional 
purchase. For our operation it will take three machines in 
order to fully convert to CO2 and liquid wet 
cleaning technology.
    Mr. Camp. Thank you.
    Mr. Fisher, in preparing for this hearing I saw your 
written testimony, and in that you mention that there has been 
a 70 percent decline in perc use in the last decade.
    Mr. Fisher. Yes, sir. That is correct.
    Mr. Camp. Is that correct? So clearly dry cleaners are 
searching to find a way to minimize their use of perc, and it 
is our understanding that the bill applies to all technologies, 
given our definition of what hazardous material is.
    I would be happy to work with you to try to make sure that 
we address that because I think if wet cleaning--if there is 
any question, we want to make sure that that is answered. I 
know that Congressman Price feels the same way.
    There are some other technologies out there, silicone, as 
you mentioned in your testimony, and others, at least two other 
ones. Is it your understanding that those would be included 
under the bill as written?
    Mr. Fisher. Yes, sir. The silicone based technology being 
commercially sold, just beginning to be sold and placed under 
the name of Green Earth. Yes. Our reading is that Green Earth 
would probably be covered under this.
    I will have to admit that the final language in the bill 
where it says if there are any hazards or regulations, that may 
be language that you would want to look at so not to exclude 
anything that in fact is safe. I am not trying to say make this 
overly expansive, but some wordsmithing may be needed at that 
point.
    Yes, I believe the silicone would be. Water based wet 
cleaning would be simply by saying dry cleaning or wet cleaning 
equipment, and you have solved the problem.
    Mr. Camp. Citrus Max, if there is any other technology out 
there, it is my understanding that that would be included as 
well.
    Mr. Fisher. It may well be. There is another technology 
called Rynex. That is a glycol ether. It probably would not be, 
but a full evaluation of the toxic properties and safety has 
not been made on that either so until those questions are 
answered I do not think one would want to leap in that 
direction.
    Mr. Camp. All right. Thank you.
    Dr. DeSimone, again I want to thank you for all of your 
work in developing this technology and helping bring it to 
market and all of your efforts there. I just wondered if there 
were any additional comments you wanted to make after having 
heard all the comments this morning?
    Dr. DeSimone. Yes. You know, the issue of going forward in 
pollution prevention versus what is typically referred to as 
command and control and the end of pipe issues is an 
interesting one.
    Pollution prevention is the highest level of safety for our 
citizenry and our environment where you just simply eliminate 
the solvents that are used in that particular case. We 
certainly applaud the dry cleaning industry and all the 
manufacturers of equipment for making the equipment more 
effective, less emitting than historically.
    But, when one looks at command and control and regulations 
related to emissions that continues to encourage continued use 
as opposed to preventing its use because there are a lot of 
issues related to not only at the dry cleaner level, but 
getting the solvents to them.
    Many dry cleaners are in fact good stewards of the 
environment. They are practicing the issues associated with 
proper handling of the solvents, but often the stewardship 
recommendations that were given to them early on were not 
adequate, and it has been a challenge to achieve really a 
significant change, and that is where pollution prevention 
really differs from end of pipe controlled regulations.
    Mr. Camp. All right. I see the red light is on. Thank you, 
Mr. Chairman.
    Chairman Manzullo. Well, we probably will have time for 
another round if you want to stick around.
    Mr. Camp. Okay.
    Chairman Manzullo. Mrs. McCarthy.
    Mrs. McCarthy. Thank you, Mr. Chairman.
    I am going to go back to one of my original questions. When 
we say it is $150,000, is that for the machine, or is that for 
the whole set up? Is that for everything included, or are we 
talking about even more money going into this?
    Dr. DeSimone. For the machines sold by Micell Technologies, 
that is the cost of the machine. There is typically a chiller, 
an auxiliary chiller that is needed for it is just like one 
needs to have steam or electricity and those sorts of things, 
but the machine sells for $150,000.
    I have seen prices from our competitors in the market, and 
I have seen numbers that range from $80,000 to $140,000, so 
there are different price ranges.
    Mrs. McCarthy. Does anybody have an estimate with the cost 
of the machine and the set up for what it would actually do for 
a small dry cleaner to really change their whole operation?
    Mr. Fisher. Yes. Could I offer a comment on that? Yes. One 
could put in a basic CO2 machine such as the Micell 
and have it up and running with the existing finishing 
equipment, the pressing equipment that you have, for probably 
in the $150,000 to $170,000 range if you could purchase a 
Micell machine. You cannot.
    Micell has a franchise. In fact, if the Committee is 
interested they have a great 27-page frequently asked question 
list on their website as to the requirements of the franchise. 
One must purchase a franchise, pay a franchise fee, pay a fee 
on gross profits, and one is required to put in a very 
substantial, beautiful, and they are beautiful, dry cleaning 
plant.
    Then the total cost with the equipment is in the $500,000 
to possibly $800,000 range, and that is the only commercially 
available CO2 right now, and that is one of our 
concerns. That is why we want to make sure that this is 
available.
    Now, there are other CO2 machines out there that 
may be commercially available in the future, but for the past 
two years only the franchise option is there.
    Mrs. McCarthy. So basically are you saying like my little 
dry cleaner in Mineola, it is a husband and wife. Even if we 
here on the Small Business Committee try to certainly make sure 
there were loans through 7(A)s or 504s, 7Ms, it still would be 
out of their reach then?
    Mr. Fisher. It is unlikely that your small dry cleaner can 
afford the $500,000 to $800,000 investment to become a Micell 
operator.
    Mrs. McCarthy. And I am not saying that we should not go 
ahead with this, but obviously I am concerned with, you know, 
we here are small business. That is obviously what we are here 
for, and we care about them very much.
    I think, you know, we are on the right track with this, and 
I am not against this, but again what I am saying is it is the 
mom and dad and the husband and wife that I am concerned with 
because they are not going to have the capital for this, so 
somehow we here on the Small Business are going to have to work 
with them also.
    Dr. DeSimone. Yes. I would just comment that there are 
several different manufacturers out there with machines, and 
Mr. Fisher is right that we certainly were the first to market. 
We have cleaned almost 1,000,000 pounds of clothes now in our 
affiliated system, but certainly you can purchase machines from 
several different manufacturers.
    I know Tom has seen equipment on the floor at different 
trade shows. I just read a press release that one of our 
competitors just put a machine on a Carnival cruise ship, and 
those prices that I have seen advertised were certainly less 
than $150,000.
    Our particular business strategy was to combine the 
technology with a franchise system to allow dry cleaners to 
have the marketing materials and related to augment the 
technology, but that is just the way our company chose to roll 
it out. There are three or four different choices out there.
    Mrs. McCarthy. Like I said, I am not against this bill, and 
I am not. My concern again is for everybody to be involved in 
it. Obviously the more we can do the better off we all are 
because of the environmental issues, certainly the clean up 
issues.
    I had asked off on the side what would this tax credit 
cost, and we are talking about $50,000,000.
    Chairman Manzullo. $50,000,000.
    Mrs. McCarthy. $50,000,000 over ten years, which if you 
really add up the clean up costs just in a few areas we could 
probably justify it, so hopefully we will work together to 
extend this, but again I am concerned with the owners of, you 
know, like I said, the husband and wife. I mean, they put in so 
many hours. I mean, they are open at 7:00 in the morning. They 
close at 7:00 at night, and they are cleaning after hours.
    Again, I am not discriminating against the larger 
commercial either. You know, we have to start somewhere, but I 
think this has to include everybody.
    Mr. Camp. Would the gentlelady be kind enough to yield?
    Mrs. McCarthy. Absolutely.
    Mr. Camp. I did write the Joint Committee on Taxation, and 
the five-year number is $146,000,000. The ten year number is 
$533,000,000 in terms of cost, so it is a little bit more than 
what we had initially heard, but I just wanted to put that in 
the record.
    Mrs. McCarthy. Everything is in this place.
    Mr. Camp. Yes. People are into numbers here.
    The other thing, I just wanted to underscore the point that 
there is more than one company in this field. This legislation 
is written for any technology, any company. Some companies may 
choose to franchise. Some may not. I just wanted to make it 
clear that there are more. There are competitors in this field, 
and I think this would help develop that.
    Some have raised the point about the people who have helped 
reduce their use of perc are not getting anything out of this. 
I worked very hard on the electric vehicle credit in the Ways 
and Means Committee, and we did not give credit to the existing 
technology, so for more efficient gasoline engines we have not 
adopted tax credits, in that way, but for new technology, for 
trying to bring new technology to the market, there has been a 
precedent for doing that.
    That is why Congressman Price and I wrote this bill to 
address the new technology issue because the other is ongoing 
and is occurring.
    Thank you.
    Mrs. McCarthy. And I thank you. Again, I am going to 
support this and certainly hopefully will continue to work with 
all of you.
    I think Small Business, certainly this Committee, can again 
watch out for those truly small businesses and work with them 
through our Committee to make sure that they have the 
opportunity to buy the different equipment also to the best--it 
is just that, you know, when you start talking about $200,000 
even, you know, for redoing the store and everything else like 
that, that would be way out of line with almost any of my small 
businesses.
    Mr. Shaw. Mrs. McCarthy?
    Mrs. McCarthy. Thank you, Mr. Chairman.
    Mr. Shaw. Right here.
    Chairman Manzullo. Go ahead. Sorry.
    Mr. Shaw. Am I allowed to respond on that point about small 
business and mom and pop because I am a mom and pop without the 
mom. I am just me. My daughter has helped me a little bit, and, 
you know, I have built my business up over 20 some years.
    I can do this, and there is no reason why any other dry 
cleaners cannot work their way up and aspire to being the best 
they can. Many of the dry cleaners will not be able to do this, 
just as they cannot put new tile in their store, just as they 
cannot pay good wages, because they are not very good 
operators, but this is not--you know, the technology itself is 
not off limits to mom and pop or small organizations because I 
am going to do it.
    Mrs. McCarthy. Well, I think that comes back to our 
Committee then to make sure that those small businesses that 
are running, that we make them better business people, and that 
is part of our job here, too, to give them the information on 
how to have a stronger economy in their business and make a 
good living.
    Thank you.
    Chairman Manzullo. I am going to follow up on that. This is 
the Small Business Committee, and this is a reference in regard 
to the thousands of cleaning establishments throughout the 
country.
    Mr. Fisher, maybe you can help me with this. The typical 
dry cleaning establishment is one facility.
    Mr. Fisher. Yes, sir.
    Chairman Manzullo. Is that correct?
    Mr. Fisher. That is correct.
    Chairman Manzullo. What is the average number of employees? 
A husband, wife and maybe one or two other employees?
    Mr. Fisher. Typically about six, the equivalent of about 
six full-time employees, five to six full-time, including 
husband and wife.
    Chairman Manzullo. One of our concerns, and the reason why 
I asked for this hearing, is the fact that we are seeing 
communities throughout the nation following the lead of the 
owner of that shopping center. They are not allowing dry 
cleaning establishments to come in if they use perc period.
    I think it is just a matter of time before perc is banned. 
If the EPA does not outlaw it either states will outlaw it or 
communities will outlaw it or people who build shopping centers 
will. The writing is on the wall for the demise of perc, and I 
think we have to recognize that.
    We are not here to discriminate against the small stores 
that can do it, but let me explore something with you. You 
probably know personally tons of operators across the country. 
What kind of debt are they carrying, those with the perc 
machines? Can you give us a scenario?
    Mr. Fisher. Yes. If a perc dry cleaning plant has done 
anything in the past six to eight years, they have put in the 
top-of-the-line equipment, and that would be equipment to meet 
the new emission standards from EPA under the Clean Air Act; 
very, very tight and very good equipment, but that type of 
equipment would typically price out between $50,000 and $80,000 
a machine depending on whether you get a Chevy or a Cadillac or 
a Mercedes.
    Chairman Manzullo. With an anticipated life of?
    Mr. Fisher. On that, typically we are going to be looking 
at eight to 12 to 14 years.
    Chairman Manzullo. Okay.
    Mr. Fisher. Usually they will not have paid off the debt on 
that before the lifespan is finished.
    Chairman Manzullo. Do you have any figures through your 
association to indicate the number of stores that are carrying 
debt on existing fifth generation perc machines?
    Mr. Fisher. We do not, but we are doing some survey work 
right now in conjunction with U.S. EPA that would provide those 
numbers.
    Chairman Manzullo. We are very much interested in that 
because you cannot look at new technologies without also taking 
into consideration the fact that the fifth generation perc 
machine is new technology----
    Mr. Fisher. Yes, sir. Could I offer----
    Chairman Manzullo [continuing]. That has not been paid off 
yet.
    Mr. Fisher. I am sorry. Could I offer a comment on what 
your bill will do, because we do think it is positive.
    For example, Mrs. McCarthy was talking about a very small 
dry cleaner. With this type of tax credit, her dry cleaner 
could in fact look at a wet cleaning technology. The equipment 
dryer there is about $35,000. That will let you do up to about 
40 percent of the garments that come in in wet cleaning.
    If somebody already has wet cleaning, and wet cleaning 
really began its resurgence in our industry about four years 
ago. That is one of the reasons we suggest that you look at 
1996 instead of 1999. If you have wet cleaning equipment you 
put in three years ago, two years ago, you would not get a 
credit, but if you did get a credit you could afford the 
tensioning finishing equipment which would let you do 80 or 90 
percent of the garments that otherwise would be dry cleaned if 
you wish.
    These people that have put in new perc equipment, the very 
best, very tightest that is out there, those people, because of 
their debt service, are in a position where they cannot 
financially afford to look at new technology such as 
CO2, and that is one of the reasons that we 
recommended something we would hope you would take a look at, 
which would be----
    Chairman Manzullo. I think that Mr. Camp----
    Mr. Fisher. Yes.
    Chairman Manzullo [continuing]. Recognized the fact that 
that is an issue, and the purpose of this subcommittee is to 
help all small business people.
    Mr. Fisher. Precisely. If one did look at that then perc 
dry cleaners in fact would have the opportunity to look at 
other technologies.
    Chairman Manzullo. Now, I have been learning a lot about 
dry cleaning lately. I guess you just take dry cleaning for 
granted. Somebody mentioned silicone.
    Dr. DeSimone. Yes, sir. I did.
    Chairman Manzullo. What is that? What kind of technology?
    Mr. Fisher. A working partnership between General Electric, 
who really are the leader in silicone fluids, and some dry 
cleaners from California resulted in the development and now 
testing in about 30 or 40 installations in the U.S. of a 
silicone based dry cleaning fluid.
    It is not as good of a dry cleaning solvent. We recognize 
that, but that is a tradeoff against the safety issue. It looks 
like toxicologically that there are no problems with that, and 
there is some final testing, I understand, that General 
Electric is finishing up for U.S. EPA and so forth to make 
certain of that.
    Chairman Manzullo. Did you want to add to that, Dr. 
DeSimone, about the silicone base?
    Dr. DeSimone. It is a chemical solvent. Certainly it has 
been around for a long time. It is being introduced into the 
dry cleaning industry. It certainly is more preferable than 
perc.
    It is a flammable solvent like petroleum solvents, and it 
has to be run in special machines associated with its 
flammability, but certainly it is better than perc in the 
context of toxicity based on what I have read, but it is still 
a chemical solvent, whereas in the context of CO2 
and water it is really a pollution prevention.
    Chairman Manzullo. That is just gas introduced into water?
    Dr. DeSimone. Yes. We are just exhaling it as we sit here. 
Yes.
    Chairman Manzullo. Okay. Mr. Price.
    Mr. Fisher. Could I make a clarification?
    Chairman Manzullo. Sure. Go ahead.
    Mr. Fisher. You have the words flammable and so forth. 
Flammable means something like lighter fluid that has a very 
low flash point. Actually, the solvent is combustible, which 
means it burns like a cardboard box, so that gives you an idea.
    I do not know of any commercial places in the United States 
that have prohibited that solvent, so fire codes have not been 
an issue for it.
    Chairman Manzullo. Thank you.
    Mr. Price. Thank you, Mr. Chairman. I am sorry to have to 
run back and forth with this mark up across the hall, but I 
appreciate the chance to ask a few more questions about cost 
and feasibility. I understand this has been explored to some 
extent.
    Dr. DeSimone, if you could respond to this, and any others 
who want to to chime in? When we talk about the up front costs 
of these CO2 machines versus conventional machines, 
I understand there is a considerable disparity. And, of course, 
we hope the tax credit would ease that.
    Are there other considerations, though, when a dry cleaning 
owner is thinking about this, considering the feasibility of 
this? Are there longer term savings that might factor in?
    How does the equipment compare in durability, for example, 
with conventional equipment?
    Are there liability and insurance considerations? Are there 
other factors that go in or should go into the calculation of 
costs, long-term as well as short-term?
    Dr. DeSimone. That is very interesting. When we are out, 
when our team is out there marketing and selling our 
technology, you know, there is often the very question of what 
does it cost? It is hard to sell through something that is two 
or three times what they are used to spending.
    You have to turn the argument around into what is the 
return on investment, as opposed to what is the cost, and 
exactly those issues you talk about. I mean, our machines use 
beverage grade carbon dioxide. It is the same CO2 
that is being delivered to every McDonalds and every Burger 
King. One of our dry cleaners goes through about as much 
CO2 a year that a Burger King goes through in about 
the same order of magnitude.
    There is just no contamination issues associated with that 
and so, you know, to play that back, to pay back the cost of, 
you know, no site contamination, the ability to get into sites 
that most dry cleaners would be prohibited to get into because 
of chemical solvents, we can get access to them, but it really 
gets back into the investment in their employees.
    I mean, probably the best part of this job that I have 
enjoyed is getting some of the most passionate testimonials 
from dry cleaning operators that have been running equipment 
for 15, 20 years, and they come up to you, and they talk about 
how we have changed their lives, how when they operate the 
equipment they are not getting the huff of solvent that they 
get in a traditional machine. It is much better operators.
    In fact, our cleaner in Wilmington, he bought our first 
machine, and his operators--he had two other perc machines or 
six other perc machines, put our CO2 machine in 
there. His operators would not go back to the other equipment 
and so he had sort of an internal turmoil of operators 
preferring to work on equipment.
    It is much better. I mean, you can just smell the 
difference when you go in our facilities. It is really a high 
quality work environment for the first time, so if you turn 
that into an investment in the employees it is also an 
investment in the consumer.
    It is hard to calculate all these, you know, returns on 
investment associated with these issues, but it makes a 
difference in a business that can appreciate in value, as 
opposed to being a liability after years, and that is the big 
difference that we offer.
    Mr. Price. So this tax credit would be available in a 
context where there are substantial other incentives and other 
payoffs, but hopefully this would clinch the deal so to speak 
in terms of operators?
    Dr. DeSimone. That is right. This is a cash flow business, 
and up front capital costs is challenging.
    Mr. Price. Do any of the other witnesses want to chime in 
on this issue of cost and feasibility?
    Mr. Ustanik. We have been running one of the machines for a 
little over a year. I did the installation, and I do all the 
service work, so my thing is looking at the equipment.
    It is a pressure vessel. Most of the components on it are 
listed, which means they are good for 15 years. We are used to 
on the dry cleaning machines ten to 12 is probably pushing it, 
and even at that point after 12 years it is getting tired.
    This machine already has components on it that are rated to 
withstand a minimum of 15 years.
    It is made out of a high grade stainless steel, 
considerably different than our machinery. In fact, I had a 
friend of ours who works for Nabisco who is a mechanic came 
down. He said for a change you actually got a real toy, not the 
stuff that we are used to that is generally sometimes pretty 
flimsy.
    As for cost of other machinery, the wet cleaning is 
available for any operator and is much less expensive. All 
these machines have much longer longevity than our perc 
machines will ever have, and even for the newer solvents like 
DF, which is a Class III-A solvent, those machines have a lot 
more maintenance concerns to them because they have a lot more 
safety concerns to them. There is a lot more that goes into 
them than these machines.
    These machines pretty much self-diagnose and control 
themselves. If they fail, they take care of it and shut it down 
whereas under these others the operator has to do all the work, 
so there is a lot more intensive maintenance in those than 
these would ever be.
    Mr. Price. So the new techniques carry some advantages in 
terms of----
    Mr. Ustanik. Right.
    Mr. Price [continuing]. Maintenance costs and durability of 
the equipment?
    Mr. Ustanik. And that is part of, you know, long-term 
ownership compared to the others.
    Mr. Price. All right. Thank you, Mr. Chairman. I appreciate 
the chance to sit in.
    Chairman Manzullo. Mr. Camp, did you have some more 
questions?
    Mr. Camp. Not at this time, Mr. Chairman. Thank you.
    Chairman Manzullo. I wanted to ask a question about perc 
itself. I am also concerned about silicone, which is viewed as 
safe now, but that is what people have said about MTBEs several 
years ago.
    I am not here to wave a red flag, but I can see traps 
happening to small businesses where they will comply today with 
an EPA environment, and then two years from now the EPA will, 
based upon some bona fide research, find out that they made a 
horrible mistake two years earlier and catch the small business 
in the trap.
    Dr. Cole.
    Dr. Cole. Mr. Chairman, I have to admit I do not know much 
about the new silicone technology, but it is a chemical. It is 
flammable. Like you say, we are concerned about the tests which 
really need to be done to look at something like that.
    But, what we do know is that water and CO2 are 
part of our everyday lives. They are essential ingredients to 
the ecosystems of this planet and to all of us. Nature, over 
the course of 4,000,000,000 years, has done the testing, and we 
do not have to worry. The real sustainable and preventive 
method is to use these natural substances which we know will 
not be hazardous or toxic.
    Chairman Manzullo. Mr. Fisher?
    Mr. Fisher. Yes. That is something in the association we 
are very, very concerned about, and I share exactly your 
concerns. In 1977 when we started work with EPA's Air Office on 
air regulations, they asked us if we would as an association 
move everybody to Freon 113, F-113, because it was not toxic, 
and it was good for the environment and so forth.
    We said yes, but Rowen and Molena have just come out with 
this information. Would you tell us that you are not going to 
ban and regulate it? They could not. We said well, until we 
know that is true we cannot tell the industry go that 
direction. Of course, we know what happened with fluorocarbons 
and the Montreal protocol.
    I with silicones share the same thing. Until we know and 
the companies involved know themselves that there are just as 
many assurances as possible, there are no problems, we would 
not be going out to the industry and saying great. Hey, switch 
to this.
    With carbon dioxide, I do not know whether anybody has done 
calculations to say if the entire industry went to carbon 
dioxide, and Micell's information is about 4,000 pounds of 
CO2 released per month from a carbon dioxide 
machine. That is from their website. I do not know if 30,000 
dry cleaners at 4,000 pounds a month is something that EPA 
would be concerned about, but I would like to get an answer 
from EPA.
    Chairman Manzullo. That sounds like a giant belch.
    Dr. DeSimone, do you have an answer to that?
    Mr. Fisher. I suspect there is not a problem, but I would 
like to know on behalf of our members, and so I think the point 
is well taken. We need to know about any of these possible 
alternatives before we move in that direction.
    Dr. DeSimone. I share Mr. Fisher's concerns for the 
industry and sort of the evolution of technologies over the 
years and how challenging it has been after being encouraged to 
go in one direction and going in the other direction.
    CO2 in water sort of eliminates that issue. It 
is very interesting that the CO2 that is distributed 
all through the country that goes to fast food restaurants, all 
that carbon dioxide is generated from other processes. There is 
a huge out stream of carbon dioxide from a wide range of 
commercial processes. When companies make fertilizer, when they 
make ethanol, when they make hydrogen, CO2 is a 
byproduct from all those processes.
    So when companies sell CO2 to fast food 
restaurants they capture a byproduct waste stream and capture 
that and then sell it into carbonation of soda or sell it to 
dry cleaners. Nobody is out there burning carbon to sell you 
carbon dioxide. In fact, it is estimated that far less than one 
percent of the CO2 that we generate as a country is 
ever captured for reuse.
    Every gallon of gas that you burn in your car you generate 
20 pounds of carbon dioxide. It is everywhere. That is why it 
is so cheap, and that is why it is so easy to tap into, so that 
is a pollution prevention issue related to the greenhouse gas 
issue.
    More importantly, the properties of CO2 allow 
one to do distillation and separations with much less energy 
required than it does to distill water. If you look at how much 
energy is required to distill a gallon of water as opposed to 
distilling a gallon of liquid CO2, it takes far more 
energy to do that for water than does CO2.
    When you talk about energy efficiency, you relate that back 
to the burning of fossil fuels, and you actually generate less 
new CO2 using CO2 based processes than 
you do with conventional solvents or with water, so it is not 
only a pollution prevention alternative. It is an energy 
efficient approach.
    Now, our first generation dry cleaning machines do not 
capture all the energy efficiency that we can. We see 
technically we should get about a 40 percent more efficient 
machine, energy efficient, than a perc machine. Right now we 
are running on par because we are running a little 
inefficiently, but we think we can capture a machine or 
generate and design a new machine that will be able to capture 
that energy efficiency as well.
    Chairman Manzullo. Mrs. McCarthy.
    Mrs. McCarthy. Being that this is a taxation committee, 
Congressman Camp, one of the things that I was just talking to 
the Congressman, our colleague, is North Carolina apparently is 
going to give a 20 percent tax credit, and if we give a 20 
percent tax credit that is actually 40 percent.
    Mr. Camp. No. That is under the state tax.
    Mrs. McCarthy. Under state tax.
    Is there any way that we could encourage the states, 
because obviously to me it is an environmental issue which most 
of our states are concerned about. I know we do not like to put 
mandates down on the states. I do not think we should, but is 
there any way of working it out that certainly go through with 
the federal, but also try to encourage our states to give state 
credits also?
    This way it would certainly in my opinion bring more people 
up faster, even if it was a time cap, five years or so, you 
know.
    Mr. Camp. I know a couple of states are looking at also 
enacting a state tax credit for environmentally friendly dry 
cleaning. I do not know offhand what we could do at the federal 
level to encourage the state legislatures to act from a tax 
standpoint, but it is certainly worth exploring.
    I would like to do that because that would then make it 
both on state and federal tax returns they would be able to get 
a benefit, and I think it would make it more feasible. I have 
been in contact with some folks about it, and I think it would 
be a very good idea.
    Mrs. McCarthy. You know, even if we on the federal level 
were able to give monies to the states, and I do not know, but 
to me even if it was a time cap of five to ten years or 
whatever it would certainly help everybody along the line, you 
know, and then you could rescind it because everybody would 
have the new equipment, and the regular maintenance would be 
there. It always sounds easy until we get involved in it.
    Chairman Manzullo. Could you yield?
    Mrs. McCarthy. Certainly, Mr. Chairman.
    Chairman Manzullo. On that topic, you know, we have these 
504 loans. These are long-term loans through the SBA. What is 
going on here is a pincer movement because it is a matter of 
time before perc is banned. For a lot of dry cleaners, it has 
already happened where perc simply cannot be used. One of the 
things I would also like to take a look at is using the 504 
loan program to help dry cleaners.
    Take your choice. Do we subsidize a 504 loan with cheap 
interest so a small business can afford to buy this new 
machine, or do we use that money to clean up the mess because 
perc machines are still out there?
    Do you have an opinion on that?
    Mr. Fisher. Yes, sir, I do. In fact, we as an association 
brought to Congress five years ago a proposal for a bill for 
legislation that would have imposed a tax on dry cleaners to 
set up a national clean up fund because of the superfund 
controversies, and we all know how involved it gets. That was 
something that was not feasible.
    We have in fact worked with 12 of our state dry cleaning 
associations, and in fact there are now 12 state dry cleaning 
funds where the legislation was proposed by our industry to 
those states where the taxes are solely on our industry. In 
fact, generally there is a tax on the perc itself, which leads 
to a double incentive to use it. We use those funds to clean 
up.
    The bottom line with those clean up funds is it removes the 
liability from the shopping center owners for the clean up and 
says the fund will clean up that, and the state will administer 
the fund.
    So there is a separate trail going along on that, and 
anything that helps dry cleaners will help that side as well.
    Mr. Camp. Mr. Chairman?
    Would the gentlelady yield?
    Mrs. McCarthy. I love these open discussions. No, I do. 
Certainly I yield.
    Mr. Camp. Well, I think particularly we have had a lot of 
discussion about the cost of this new technology, and we really 
need to look at the comprehensive costs of comparing existing 
technology perc with the new technology.
    I believe all of these costs, the costs of additional tax 
payments and clean up, ought to be included when you are doing 
a comparison because the $150,000 may not look as steep when 
you look at the long term, $150,000 per machine and 
$533,000,000 over ten years that the tax credit may cost. I 
think we need to look at that very carefully and get a 
comparison.
    I do not believe there has been any in-depth study. Do any 
of the panelists know of those cost comparisons, cost benefit 
analyses? Has that been done?
    Mr. Fisher. Not that I am aware of, but I share your 
sentiment, and we certainly realize both in approaching 
Congress and at the state level that the dry cleaning clean up 
bills would encourage people to look at all technologies, and 
that is definitely one of the things we knew would happen.
    Chairman Manzullo. Thank you. Thank you very much.
    Would you yield?
    Mrs. McCarthy. Certainly. Always to the Chairman.
    Chairman Manzullo. Well, let me ask a question. The more 
machines that are built lowers the cost of production. Can 
somebody elaborate on that quantitatively? Can you do that, Dr. 
DeSimone?
    Dr. DeSimone. When dealing with carbon dioxide, it is very 
different than dealing with perc or different than dealing with 
petroleum. Certainly, you know, the petroleum machines and 
silicone based solvents have, you know, fire suppression issues 
and oxygen sensors. They are a different level of machine than 
a perc machine.
    But a CO2 machine, because of its pressurized 
system, is made out of stainless steel, and it is a different 
device than a sheet metal based perc machine, for example. 
Therefore, you can just weigh it and just weigh the amount of 
steel required to do it, compare it and that is your baseline.
    No matter how you manufacture it, it is always going to be 
more expensive just based on the sheer weight of the equipment. 
Certainly economics of scale will be able to drive a lot of 
that out, but there is a floor there that is inherently higher 
than the floor associated with the perc machine.
    Chairman Manzullo. Well, we appreciate you all coming.
    Mr. Fisher, I especially appreciate your openness on your 
concerns about the bill, I encourage the authors of the bill to 
work with you.
    There are a lot of things that can be done. Not only is 
there the issue of the tax credit. Congress increased expensing 
from $19,000 to $30,000 so that you can now use to expense as 
opposed to writing off. There may be some other things that can 
be done with the 504 loans. There may also be some type of 
accelerated depreciation for environmentally friendly machines.
    You have all been excellent witnesses adding unique 
dimensions to everything we discussed. I think everyone concurs 
that we must deal with the environment and we still must clean 
our clothes. We have to take a look at all new technologies and 
Congress should do whatever by way of the Tax Code to encourage 
the affordability of these new technologies. This has been the 
purpose of this hearing.
    This hearing is adjourned. Thank you.
    [Whereupon, at 11:57 a.m. the Subcommittee was adjourned.]

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
```