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) , - 2 - 5, The 6 7/8%, for prospective Federal-State investment, was fixed without public hearing. Promulgating that rate upset a procedure which the Council had established in December of 1968. The 1968 procedure provided for flexible interest rates equal to average yields of long-term Federal obligations. Currently that would be around 5 5/8%--also higher than the current costs of municipal borrowing for Clean Water plant! Recent action by House: 6. In October of this year, the House of Representatives rejected 6 7/8% for the time being; it did this by passing H.Ro 10203 which requires that the 1968 flexible system remain in effect "until otherwise provided by a statute enacted after the date of enactment of this Act" [Section 80 thereof]. Thus the House would keep the flexible system of '68 until Congress could study the rationale for the newest WRC gimmick--one on which hearings have never been held! Later action by Senate Committee: 7. On December 11, the Senate Committee on Public Works reported* a different bill. It would accept the WRC rate of 6 7/8 cited in Paragraph 4 preceding, for future projects! '" [The Committee would retain the 1968 WRC procedure (Paragraph 5) for presently authorized projects only, including those in S. 2798.] Congressional decision to be made: 8. presumably, the Senate will pass S. 2798. Committee conferences in late January will choose between the rate of 6 7/8% and the lower rate of the 1968 procedures--both of which, as noted ,before, are higher than rates for Clean Water bonds! TASKS: Our tasks are: (1) to determine which is better for governmental goals, the 1968 procedures or the new 6 7/8%; *Senate Report 93-615; Page 3, and Senate Bill 2798, Section 650 Documents are just now becoming available.