PAGENO="0001" DEPOSITORY 9th ~ } CO1VE1VIITTEE PRINT REPORT ON THE ACTIVITIES OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES HOUSE OF REPRESENTATIVES 96TH CONGRESS, 1ST SESSION RUTGERS LAW SCHOOL LIBRAH~ CAMDEN, ft J. 08102 GOVERNMENT DOCUMENT Serial No. 96-B Printed for the use of the Committee on Merchant Marine and Fisheries U.S. GOVERNMENT PRINTING OFFICE ö6-410 WASHINGTON: 1979 ~`1. /151 PAGENO="0002" COMMITTEE ON MERCHANT MARINE AND FISHERIES THOMAS L. ASHLEY, Ohio JOHN D. DINGELL, Michigan WALTER B. JONES, North Carolina MARIO BIAGGI, New York GLENN M. ANDERSON, California E (KIKA) DR LA GARZA, Texas JOHN B. BREAUX, Louisiana GERRY B. STUDDS, Massachusetts iMVID R. BOWEN, Mississippi CARROLL HUBBARD, Jn~, Kentucky DON BONKER, Washington LES AuCOIN, Oregon NORMAN B. D'AMOURS, New Hampshire JAMES L. OBJflRSTAR, Minnesota WILLIAM J. HUGHES, New Jersey BARBARA A. MIKULSKI, Maryland DAVID B. BONIOR, Michigan DANIEL K. AKAKA, Hawaii MICHAEL OZZIE MYERS, Pennsylvania JOE WYATT, Texas MIKE LOWRY, Washington EARL HUTTO, Florida EDWARD J. STACK, Florida BRIAN DONNELLY, Massachusetts PAUL N. McCLOSKEY, Ja., California GENE SNYDER, Kentucky EDWIN B. FORSYTHE, New Jersey DAVID C. TREEN, Louisiana JOEL PRITCHARD, Washington DON YOUNG, Alaska ROBERT E. BAUMAN, Maryland NORMAN F. LENT, New York DAVID F. EMERY, Maine ROBERT K. DORNAN, California THOMAS B. EVANS, JR., Delaware PAUL S. TRIBLE, JR., Virginia ROBERT W. DAVIS, Michigan WILLIAM CARNEY, New York MELVIN H. EVANS, Virgin Islands JOHN M. MURPHY, New York, Chairiaaa CARL L. PERIAN, Chief of staff LAwRENCE J. O'BRIEN, Jr., Chief Counsel FRANCES STILL, Chief Clerk JACK E. SANDS, Minority Counsel (ii) PAGENO="0003" CONTENTS Introduction, jurisdiction generally, committee assignments at commence- Page ment of 96th Congress 1 Boards of Visitors 5 Status of bills referred, as of Dec. 31, 1977, table 11 Legislative activity of- Full Committee- Legislative action taken and description of bills reported 12 Nonlegislative activities 20 Subcommittees- Coast Guard and Navigation- Jurisdiction - 4 Legislative action taken and description of bills reported~_ 123 Members assigned to 3 Nonlegislative activities 147 Fisheries and Wildlife Conservation and the Environment- Jurisdiction 3 Legislative action taken and description of bills reported~_ 65 Members assigned to 3 Nonlegislative activities 92 Merchant Marine- Jurisdiction 3 Legislative action taken and description of bills reported__... 39 Members assigned to 3 Nonlegislative activities 61 Maritime Education and Training- Jurisdiction Legislative action taken and description of bills reported_. 248 Members assigned to - Nonlegislative activities 253 Oceanography- Jurisdiction 4 Legislative action taken and description of bills reported_. 158 Members assigned to 4 Nonlegislative activities 171 Panama Canal- Jurisdiction 4 Legislative action taken and description o fbills reported_~. 182 Members assigned to 4 Nonlegislative activities 241 Ad Hoe Select Subcommittee on Maritime Education and Training- Legislative action taken and description of bills reported 248 Nonlegislative activities 253 Select Committee on the Outer Continental Shelf 12 Congressional Port Caucus 257 Appendix A, status of bills referred 263 Appendix B, documents published in 95th Congress, 1st Session 268 Appendix C, Committee Activities 96th Congress 270 (III) PAGENO="0004" PAGENO="0005" ACTIVITIES OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, 96TH CONGRESS, FIRST SESSION ______ REPORT The following summary is compiled on the activities of the Com- mittee on Merchant Marine and Fisheries for the 96th Congress, 1st session. The Rules of the House of Representatives have vested in the Com- mittee the legislative jurisdiction over the following subjects: 1. Merchant marine generally. 2. Oceanography and Marine Affairs, including coastal zone management. 3. Coast Guard, including lifesaving service, lighthouses, lightships and ocean derelicts. 4. Fisheries and wildlife, including research, restoration, refuges, and conservation. 5. Measures relating to the regulation of common carriers by water (except matters subject to the jurisdiction of the Interstate Com- merce Commission) and to the inspection of merchant marine vessels lights and signals, lifesaving equipment and fire protection on such vessels. 6. Merchant marine officers and seamen. 7. Navigation and the laws relating thereto, including pilotage. 8. Panama Canal and the maintenance and operation of the Pan- ama Canal, including the administration, sanitation, and government of the Canal Zone; and interoceanic canals generally. 9. Registering and licensing of vessels and small boats. 10. Rules and international arrangements to prevent collisons at sea. ii. United States Coast Guard and Merchant Marine Academies, and State Maritime Academies. 12. International fishing agreements. (1) PAGENO="0006" 2 At the commencement of the 96th Congress, the Committee was composed of the following members: JOHN M. MURPHY, New York, Chairman THOMAS L. ASHLEY, Ohio PAUL N. McCLOSKEY, JR., California JOHN D. DINGELL, Michigan CENE SNYDER, Kentucky WALTER B. JONES, North Carolina EDWIN B. FORSYTHE, New Jersey MARIO BIAGGI, New York DAVID C. PREEN, Louisiana GLENN M. ANDERSON, California JOEL PRITCHARD, Washington E (KIKA) DR LA GARZA, Texas DON YOUNG, Alaska JOHN B. BREAUX, Louisiana ROBERT B. BAUMAN, Maryland GERRY B. STUDDS, Massachusetts NORMAN F. LENT, New York DAVID R. BOWEN, Mississippi DAVID F. EMERY, Maine CARROLL HUBBARD, JR., Kenutcky ROBERT K. IDORNAN, California DON BONKER, Washington THOMAS B. EVANS, Jn., Delaware LBS AUCOIN, Oregon PAUL S. TRIBLE, Jn., Virginia ~ ORMAN E. D'AMOURS, New Hampshire ROBERT W. DAVIS, Michigan JAMES L. OBERSTAR, Minnesota WILLIAM CARNEY, New York WILLIAM J. HUGHES, New Jersey MELVIN H. EVANS, Virgin I~1ands BARBARA A. MIKULSKI, Maryland DAVID B. BONIOR, Michigan DANIEL K. AKAKA, Hawaii MICHAEL OZZIE MYERS, Pennsylvania JOE WYATT, Texas MIKE LOWRY, Washington EARL HUTTO, Florida EDWARD J. STACK; Florida BRIAN DONNELLY, Massachusetts Mr. Carl L. Perian continues to serve as Chief of Staff. Mr. Law- rence J. O'Brien, Jr., was appointed Chief Counsel on May 15, 1979. Miss Frances Still continues as Chief Clerk along with Mrs. Julia Perian, Administrator; Mr. Ned P. Everett, counsel; Ernest J. Corrado, counsel; Mr. Leonard L. Sutter, counsel; Mr. Peter N. Ky- ros, counsel; Dr. Thomas R. Kitsos, legislative analyst; Dr. Martin D. Howell, professional staff; Mr. Sidney A. Wallace, Counsel; Mr. Donald A. Watt, editor;~ and Mr. Bernard W. Winfield, clerk. Mr. Gerald Seifert, economist, joined the Subcommittee on Mer- chant Marine; Mr. Ricardo A. Ratti, heads of the Coast Guard Subcommittee; Mr. Terrance W. Modglin heads the Panama Canal Subcommittee; Mr. G. Wayne Smith heads the Fisheries and Wild- life Conservation Subcommittee; Mr. Richard D. Norling heads the Oceanography Subcommittee; and Mr. Daniel Panshin heads the Ad Hoc Select Subcommittee on Maritime Education and Training. * Mr. Jack E. Sands is Chief Minority Counsel and Mr. Ronald K. Losch serves as Deputy Minority Counsel, along with Mr. Robert T. Devoy, Jr. Also serving the Minority Professional Staff are Mr. John H. Bruce, Ms. Barbara A. Wyman, Mrs. Donna J. Williams, Mr. Charles E. Fager, and Mr. Stanley E. Senner, Minority Subcommittee Staff Members are Mr. Stephen Little, Mr. George Mannma, Mr. Kai David Midboe, Mr. Curtis L. Marshall, and Mr. Luis Luna. LEGIsLATIvE SUBCOMMITTEES The majority of legislative matters coming before the committee is referred to standing subcommittees. The membership of these sub- committees follows: PAGENO="0007" a SUBCOMMITTEE ON MERCHANT MARINE JOHN M. MURPHY, THOMAS L. ASHLEY, Ohio GLENN M. ANDERSON, California BARBARA A. MIKULSKI, Maryland MICHAEL OZZIE MYERS, Pennsylvania BRIAN DONNELLY, Massachusetts JOHN D. DINGELL, Michigan MARIO BIAGGI, New York DAVID R. BOWEN, Mississippi CARROLL HUBBARD, Jr., Kentucky WALTER B. JONES, North Carolina JOE WYATT, Texas New York, Chairma~n GENE SNYDER, Kentucky DAVID C. TREEN, Louisiana ROBERT K. DORNAN, California PAUL S. TRIBLE, Jr., Virginia ROBERT W. DAVIS, Michigan MELVIN H. EVANS, Virgin Islands PAUL N. McCLOSKEY, Jr., California, (Ex Officio) Louisiana, Chairman JOHN D. DINGELL, Michigan EDWIN B. FORSYTHE, New Jersey DAVID R. BOWEN, Mississippi JOEL PRITCHARD, Washington DON BONKER, Washington DON YOUNG, Alaska JAMES L. OBERSTAR, Minnesota ROBERT E. BAUMAN, Maryland WILLIAM J. .HUGHES, New Jersey DAVID F. EMERY, Maine DAVID E. BONIOR, Michigan THOMAS B. EVANS, Jr., Delaware MIKE LOWRY, Washington PAUL S. TRIBLE, Jr., Virginia EARL HUTTO, Florida ROBERT W. DAVIS, Michigan GLENN M. ANDERSON, California WILLIAM CARNEY, New York B (KIKA) DR LA GARZA, Texas MELVIN H. EVANS, Virgin Islands GERRY E. STUDDS, Massachusetts PAUL N. McCLOSKEY, Jr., LBS AuCOIN, Oregon California (Ex Officio) NORMAN E. D'AMOURS, New Hampshire DANIEL K. AKAKA, Hawaii JOE WYATT, Texas EDWARD J. STACK, Florida BRIAN DONNELLY, Massachusetts JOHN M. MURPHY, New York (Ex Officio) Jurisdiction: Fisheries and Wildlife, including research, restora- tion, refuges and conservation, international fisheries, the National Environmental Policy Act, and environment in general. SUBCOMMITTEE ON COAST GUARD AND NAVIGATION MARIO BIAGGI, New York, Chairman WALTER B. JONES, North Carolina DAVID C. TREEN, Louisiana B (KIKA) DR LA GARZA, Texas GENE SNYDER, Kentucky EDWARD J. STACK, Florida DON YOUNG, Alaska DON BONKER, Washington NORMAN F. LENT, New York JAMES L. OBERSTAR, Minnesota THOMAS B. EVANS, Jr., Delaware BARBARA A. MIKULSKI, Maryland MELVIN H. EVANS, Virgin Islands MICHAEL OZZIE MYERS, Pennsylvania PAUL N. McCLO~KEY, Jr., JOHN B. BREAUX, Louisiana California (Ex Officio) GERRY E. STUDDS, Massachusetts WILLIAM J. HUGHES, New Jersey JOHN M. MURPHY, New York (Ex Officio) Jurisdiction: (a) Merchant marine generally (b) merchant marine officers and seamen, (c) measures relating to the regulation of com- mon carriers by water (&xcept matters subject to the jurisdiction of the Interstate Commerce Commission), and (d) Maritime Education and Training. SUBCOMMITTEE ON FISHERIES AND WILDLIFE CONSERVATION AND THE ENVIRONMENT JOHN B. BREAUX, PAGENO="0008" 4'. Jurisdiction: (a) The Coast Guard, including life-saving service, hghthouses, lightships, ocean derelicts, communications, radar, and other aids to navigation; (b) registration and licensing of vessels, including small boats; (c) navigation and the laws relating thereto, including pilotage; (d) regulatio~i of recreational boats and *their operation; (e) inspection of merchant vessels, lights and signals, life- saving equipment, and fire protection on such vessels; (f) rules and international arrangements to prevent collisions at sea; (g) enforce- ment of laws and treaties and marine pollution control and abatement; (h) regulation of the transportation and storage of liquefied natural gas and other volatile gases; (i) the Coast Guard Academy. SUBCOMMITTEE ON PANAMA CANAL CARROLL HUBBARD, Kentucky, Clui%rma's DAVID R. BOWEN, Mississippi ROBERT E. BATIMAN, Maryland DAVID ID. BONIOR, Michigan DAVID C. PREEN, Louisiana JOHN D. DINGELL, Michigan ROBERT K. DORNAN, California WALTER B. JONES, North Carolina WILLIAM CARNEY, New York MARIO BIAGGI, New York PAUL N. MCCLOSKEY, Ju., California GLENN M. ANDERSON, California (Ex Officio) MIKE LOWRY, Washington JOHN M. MURPHY, New York (IDx Officio) Jurisdiction: (a) The Panama Canal and the maintenance and operation of the Panama Canal, including the administration, sani- tation, and government of the Canal Zone, and (b) interoceanic canals generally. SUBCOMMITTEE ON OCEANOGRAPHY GERRY E. STUDDS, Massachusetts, Chairman LES AUCOIN, Oregon JOEL PRITCHARD, Washington NORMAN B. D'AMOURS, New Hamp- EDWIN B. FORSYTHE, New Jersey shire NORMAN F. LENT, New York DANIEL K. AKAKA, Hawaii DAVID F. EMERY, Maine JOE WYATT, Texas ROBERT K. DORNAN, California JOHN B. BREAUX, Louisiana WILLIAM CARNEY, New York WILLIAM J. HUGHES, New Jersey PAtJL N. McOLOSKEY, Jn., California DAVID ID. BONIOR, Michigan (Ex Officio) MIKE LOWRY, Washington EARL HUTTO, Florida BARBARA A. MIKULSKI, Maryland EDWARD J. STACK, Florida JOHN M. MURPHY, New York (Ex Officio) Jurisdiction: (a) Marine science generally; (b) oceanographic re- search, including vehicles, platform, and structures; (c) ocean engi- neering, including materials, technology,, and systems; (d) ocean environmental protection, (e) ocean resources development and conser- vation; (.1') coastal zone management; (g) marine and estuarine sanc- tuaries; (h) National Oceanic and Atmospheric Administration; (i) U.N. Conference on the Law of the Sea; and (5) Sea Grant pro~ grams and marine extension services. PAGENO="0009" 5 AD Hoc SELECT SUBCO~LMITTEE ON MARITIME EDUCATION AND TRAINING LES AuCOIN, Oregon, UhairmGn DON BONKER, Washington DON YOUNG, Alaska NORMAN E. D'ARMOURS, New DAVID F. EMERY, Maine Hampshire ROBERT W. DAVIS, Michigan DAVID E. BONIOR, Michigan PAUL N. MeCLOSKEY, J~, California DANIEL K. AKAKA, Hawaii (Ex Officio) JOHN B. BREAUX, Louisiana JOHN M. MURPHY, New York (Ex Officio) Jurisdiction: Training of merchant marine officers. BOARD OF VISITORS Pursuant to Public Law 301 of the 78th Congress, a Board of Visitors to the U.S. Merchant Marine Academy is to be appointed in January of each year; and pursuant to section 194 of title 14 of the United States Code, a Board of Visitors to the U.S. Coast Guard Academy is to be appointed in January of each year. Each Board shall consist of two Senators and three Members of the House of Representatives, appointed by the chairmen of the committees of the Senate and House of Representatives, respectively, having cogni- zance of legislation pertaining to each Academy, the chairman of said committees being ex officio members of each Board, and of one Senator and two Members of the House of Representatives appointed by the President of the Senate and the Speaker of the House of Rep- resentatives, respectively. It is provided that each Board shall visit its respective Academy annually on a date to be fixed by the Secre- tary of Commerce and the Secretary of Transportation, respectively. The membership of the Board of Visitors to the U.S. Merchant Marine Academy and the U.S. Coast Guard Academy are as follows: TO THE COAST GUARD ACADEMY TO THE MERCHANT MARINE 1979 ACADEMY 1979 CHRISTOPHER J. DODD, Connecticut LESTER L. WOLFE, New York STEWART B. McKINNEY, Connecticut JOHN W. WYDLER, New York JOHN M. MURPHY, New York JOHN M. MURPHY, New York (Ex Officio) (Ex Officio) MARIO BIAGGI, New York MARIO BIAGGI, New York E (KIKA) DR LA GARZA, Texas LES AuCOIN, Oregon GENE `SNYDER, Kentucky PAUL N. M~CLOSKEY, Jn., California HOWARD W. CANNON, Nevada HOWARD M. CANNON, Nevada (Ex Officio) (Ex Officio) JOHN A. DURKIN, New Hampshire DANIEL PATRICK MOYNIHAN, New WARREN G. MAGNUSON, Washington York JOHN C. DANFORTH, Missouri DANIEL K. INOUYE, Hawaii LARRY PRESSLER, South Dakota U.S. COAST GUARD ACADEMY A meeting of the Congressional Board of Visitors was held at the U.S. `Coast Guard Academy, New London, Connecticut, on April 27, 1979. The Board convened with Congressman Mario Biaggi of New York and Congressman Christopher J. Dodd of Connecticut in at- tendance. Also present were the Superintendent of the Academy, members of his staff, Academy faculty, cadets, and representatives of the Commandant. PAGENO="0010" 6 The Board received a comprehensive briefing on the Academy and its programs from the staff and faculty. Of special interest was infor- mation on the progress of integration of women into the corps. Responding to ,a request at the 1978 meeting for information on disciplinary actions, the staff gave a detailed presentation on all honor offenses that were handled during the previous year. The process for handling these offenses was described, including the rights of cadets at each stage of the process. Then there was: a description of each indi- vidual case with an explanation of the final action taken and the rea- sons for it. This was followed by a general discussion of these offenses and the policy and procedures of the Academy in handling them. The Board was impressed with the relatively small number of offenses in- volved and the care with which they were handled. The Board was also given a briefing on an interesting extracurricu- lar summer program that a group of cadets are involved in. This is a project to locate the wreck of the Coast Guard cutter BEAR using the latest scientific methods. The project should give cadets excellent hands-on experience in precision navigation and in the use of advanced electronic and sonar equipment. U.S. MERCHANT MARINE ACADEMY In accordance with Public Law 301, 78th Congress, the annual meeting of the Congressional Board of Visitors of the United States Merchant Marine Academy was convened by the Superintendent, Rear Admiral Arthur B. Engel, USCG (Ret.) at 10:18 A.M. on Friday, May 11, 1979 in the Elliot See Conference Room, Wiley Hall, United States Merchant Marine Academy, Kings Point, New York. Members of the Board in attendance were: Congressman John W. Wydler, Chairman. Congressman Lester L. Wolff. Also present: Dr. Martin D. Howell-~Representing Congressman John M. Murphy, Chairman, Merchant Marine and Fisheries Committee. Mr. Arthur Friedberg-Director, Office of Maritime Labor and Training, Maritime Administration. Rear Adm. A. B. Engel, USCG (Ret.)-Superintendent. H. F. Casey-Assistant Superintendent for Planning and Administration. Captain P. L. Krinsky, USMS-Academic Dean. Captain R. T. Madden, USMS-~-Commandant of Midshipmen. Captain C. M. Renick, USMS-Director, Office of External Affairs. `Captain G. P. Francis, USMS-Head, Department of Engi- neering. Captain A. E. Fiore, USMS-Head, Department of Nautical Science. Captain W. T. Lai, USMS-Head, Department of Physical Education and Athletics. Captain L. Jarett, USMS-Head, Department of Law and Economics. Captain L. Ferrari, USMS-Ilead, Department of Mathemat- ics and Science. PAGENO="0011" 7 Captain J. Arnet, 1IJSM'S-Associate Dean. `Captain R. M. Marshall, TJSN-Head, Department of Naval Science. Lieutenant Commander .J. M. Perry, USN-Assistant Head, Department of Naval Science. J. H. Lewis-Head, Department of Administrative Services and Procurement. M. P. O'Connor-Head, Department of Budget and Accounts.. The Superintendent, Rear Admiral A. B. Engel, TJSCG (Ret.) welcomed the Board and introduced Congressman Lester Wolff, Con- gressman John Wydler and Dr. Martin Howell, a member of the staff of the Merchant Marine and Fisheries Committee. Congressman Wydler was nominated and elected Chairman of this Congressional Board Meeting. Congressman Wydler expressed his pride and pleasure in being associated with the United States Mer- chant Marine Academy. He stated that the position of the Academy is being enhanced each year as evidenced by the fact that he is receiv- ing an increasing number of applicants for nomination to the Acad- emy. He commented that this enhancement inures to the credit of all concerned. Congressman Wolff concurred with Congressman Wydler's observation regarding the status of the Academy. The Chairman requested that the presentations by the Academy staff members of the subject matters set forth in the Agenda be made. The `Superintendent addressed the subject of the Recommenda- tions of the Select Ad Hoc Committee on Maritime Education and Training and the status of actions being taken in response to these recommendations. Admiral Engel noted that the Committee had commented in its Report that more emphasis was being placed by the Academy on preparation for shoreside jobs than was originally in- tended by Congress. He stressed that he and all of his staff fully sup- port the Academy's primary mission of training highly qualified licensed merchant marine officers, and the principal efforts are directed to meet that objective. He further emphasized that the overall mission of the Academy has been recognized as encompassing the development of young men and women to become leaders in the maritime industry as well as merchant marine officers. He advised the Board that the balance in the Academy curriculum is considered appropriate to meet the mission and no major change is contemplated. Congressman Wolff raised the question of the type of obligation that Academy graduates had to fulfill. He was advised that presently it is a moral obligation, but that recent legislatior~ had been introduced by Congressman Mur- phy to impose a legal obligation for graduates of the U.S. Merchant Marine Academy and the State Maritime Academies. It was also anticipated that the Administration would propose similar legislation as it had in the last Congress. The Chairman stated that he would be willing to join in sponsoring such legislation to provide bipartisan support. The Superintendent noted that the second Recommendation of the Subcommittee related to the practice of permitting representatives from shoreside industries to use Academy facilities to recruit gradu- ates for jobs that do not comply with their primary postgraduate ob- ligations. He stated that the Academy is opposed to the absolute PAGENO="0012" 8 exclusion of representatives from shores'ide companies at Academy ca- reer seminars, since such action would deprive Midshipmen of learn- ing of opportunities, particularly future opportunities, for shoreside employment. Since one of the Academy's functions is to provide future leaders in the maritime industry, it is important to apprise the grad- uating class of broad industry opportunities. Congressman Wolff took issue with this Recommendation of the Subcommittee, stating that there was a need for well trained people in the industry to rebuild the American Merchant Marine and to restore the United States to a lead- ership position in world shipping. The Superintendent commented that it would be desirable that the mission of the Academy be formally expanded to include the training of future leaders of the maritime industry. The Superintendent advised the Board that the Academy agreed with the third Recommendation of the Subcommittee, namely, that the Academy's selection criteria be changed to eliminate any preference to applicants who were relatives of Alumni. In response to a question by Congressman Wolff, the Superintendent advised that no veterans' preference is given per se, but that military service might be taken into consideration in evaluating a candidate's adaptability. Admiral Engel explained that the Subcommittee found that the other factors currently being used in the Academy's admission process were appropriate and r~commended that the law be amended to specifi- cally permit their use. He stated that this legislation is presently in process by the Subcommittee. The Superintendent addressed the fifth Recommendation of the Subcommittee to the effect that the question of foreign students from countries other than those specifically authorized by law should be settled and recommended the adoption of provisions similar to those which apply to the admission of foreign students to other Federal Academies. He stated that many requests are received from foreign governments for training of their students at the Academy and he would welcome a small contingent of foreign students if legislation permitted their admission. The Chairman asked about the funding ar- rangements that would apply to foreign students. He was advised that in the past the funding for foreign students who had been authorized to attend the Academy for short training programs was provided by the State Department or the foreign government. An example was cited of a 2-year training program for students from Libya which was funded by an oil company through the State Department. Congress- man Wolff suggested that the training of students from Asian coun- tries he looked into since the volume of U.S. trade with these countries was growing significantly. The Superintendent advised that with respect to the Subcommit- tee's recommendation that the criteria for the Special List appoint- ments be included in the recodification of merchant marine officer training laws action has been taken to make a thorough review of this subject in the light of the Bakke decision and the incorporation of guidelines into the recodification of the training laws was in proc- ess. In response to a question from Congressman Wolff, it was stated that absolutely no quotas have been established. It was also noted that most of the minority candidates are admitted under the corn- PAGENO="0013" 9 petitive system rather than by the Special List. Congressman Wolff concurred with this process and expressed his opinion that increases in minority candidates should be accomplished by more extensive recruiting efforts rather than by reducing the entrance requirements. The Superintendent informed the Board that action had bee~n taken to eliminate the potential unfair advantage of using multi- state or out-of-state nominations in the admission process as proposed by the Subcommittee. The final recommendation of the Subcommittee was a change in the law to allow the Chairmen of the appropriate Congressional Commit- tees to provide staff assistance for the members of the Congressional Board of Visitors. The Superintendent advised that there was no ob- jection to this recommendation, but that it would require implementa- tion by the Legislative Branch. Dr. Howell advised that this matter is being handled by the Select Ad Hoc Subcommittee. Captain Emmanuel Jenkins, Director of Admissions, was then in- troduced to make a presentation on the status of admissions for the Class of 1983. Captain Jenkins advised the Board that both thequan- tity and quality of candidates was higher this year than in the past. He displayed charts that showed comparative statistics of this year's admission process and equivalent data for the previous two years. Dr. Howell questioned the adequacy of funds for recruiting pur- poses and indicated that it was his understanding that other Federal Academies have as much as $500,000 in an annual recruiting budget. Captain Jenkins advised that the Academy had only $51,000 for re- cruiting expenditures, including publications, but that some additional funds were being provided this year. Congressman Wydler com- mented that the amount mentioned as committed to recruiting efforts by the other Federal Academies was inordinately high and in his opinion unnecessary. He noted that the statistics regarding candi- date applications indicated that recruitment activities appeared adequate. Congressman Wolff suggested the possibility of producing a film in which members of Congress would make presentations di- rected to recruiting candidates for the Academy. He thought this approach would be effective and could be accomplished at a rea- sonable cost. The Superintendent agreed that this proposal would be considered. The Chairman suggested that the Academy Catalogue should con- tain more pictures emphasizing the beauty of the campus and the magnificence of the buildings and grounds. Captain Jenkins advised that the Bufletin was the primary vehicle for displaying the attrac- tiveness of the Academy grounds and facilities since this publication is more widely distributed than the Catalogue. Captain Charles M. Renick, Director, Office of External Affairs, was next introduced to give a presentation on the Employment Op- portunities on the Great Lakes. Captain Renick noted that the. Aca- demy is aware of the shortage of merchant marine officers for the Great Lakes trade and is making a concerted effort to encourage more Kings Pointers to sail on the Lakes. He observed that there are over 140 Midshipmen presently at the Academy from states bordering the Great Lakes and these are the most likely candidates to man Great Lakes vessels. Captain Renick advised the Board that there are at PAGENO="0014" 10 present 41 Academy graduates in the Great Lakes shipping industry~ He observed that the primary factor that deterred more interest in career employment on the Lakes was the lack of sufficient berths for Midshipmen to serve as Cadets on Great Lakes ships during their sea-year training. Only about 7 Midshipmen per year are accommo- dated as Cadets on lakers so that the exposure to under-graduates is minimal. Mr. Howard F. Casey, Assistant Superintendent for Planning and Administration was introduced and made a presentation on the Re- programming of Modernization Funds between Fiscal Years 1979 and 1980, and an overview of the Fiscal Year 1980 Budget. Mr. Casey ex- plained that a delay in the contract award for the new addition to Fulton Hall had occasioned a need to defer the obligation of funds to renovate the exising Fulton Hall academic building from Fiscal Year 1979 to Fiscal Year 1980. These funds in the amount of $2,337,000 plus a savings of $120,000 in the project to renew all barracks win- dows were reprogrammed to supplement the funding for the Fulton Hall addition ($350,000) and the Crowninshield Pier renovation ($37,000); to accelerate the first phase of the program of bringing the barracks buildings into compliance with Fire Code and Life Safet~ ~Code requirements ($1,060,000) and renewing the plumbing and electrical utilities in the barracks buildings ($386,000); and to ad- vance the date of contracting for the renovation of Wiley Hall ($624,000). Mr. Casey advised the Board that the Academy Budget for Fiscal Year 1980 that was recommended to Congress was $17,132,000 which is $1,773,000 higher than the Fiscal Year 1979 Budget. The increases consist of $823,000 of adjustments to the Fiscal Year 1979 Base to provide for essentially uncontrollable cost escalation and $950,000 in program increases. Captain Paul L. Krinsky, the Academic Dean, was next introduced to make a presentation on the Marine Diesel Modernization Program. `Captain Krinsky advised the Board that the marine diesel training program was instituted in May, 1978 and is given to both Midshipmen as an elective in the academic curriculum and to outside participants as a continuing education program. The Diesel Engineering course was established to fill a major need in the United States for the train- ing of Americans in the operation and maintenance of slow speed and medium speed diesel engines. Captain Krinsky advised the Board that the Thst phase of the diesel modernization program will be completed this fall. He stated that he considered this installation the most ad- vanced in the world. The Chairman asked about the niuclear training program at the Academy. The Dean advised that a program is offered, but is cur- rently not one of major interest. It came into existence with the intro- duction of the Nuclear Ship (NS) SAVANNAH and received some heightened interest a few years ago when the possibility existed of applying nuclear propulsion to merchant ships. The program can be reinstituted if a need, and interest occur. The Chairman also asked about training for the operation of off- shore drilling rigs. Captain Krinsky replied that the Academy pro- vided this type of training and that it is availed of more in times when seagoing jobs are at a premium than at the present time. PAGENO="0015" 11 Congressman Wolff congratulated the Superintendent and all con- cerned for the excellence of the Diesel Engineering Training Program. Congressman Wolff suggested that training should be provided in drug traffic by commercial vessels. He stated that this type of training could have a beneficial impact on the narcotics problem. The Coast Guard have been very effective in curtailing traffic in drugs by their training programs. He suggested that the Drug Enforcement Admin- istration (DEA) and the Bureau of Customs could provide personnel to assist in conducting this training. The Superintendent expressed an interest in adopting this suggestion. The final presentation was made by Captain Robert M. Marshall, USN, Head of the Department of Naval Science, on the subject of the Merchant Marine Reserve, U. S. Naval Reserve Program. Captain Marshall explained that the new Merchant Marine Re- serve, United States Naval Reserve Program was open for graduates of the U. S. Merchant Marine Academy and State Maritime Schools, licensed officers currently sailing and instructors of maritime train- ing institutions. He stated that this program was presently optional but would become mandatory commencing with the Class graduating from the Academy in 1984. Captain Marshall noted that this program is another effort to improve relations between the Navy and the Mer- chant Marine. Congressman Wydler and Congressman Wolff both commented that the new Reserve Program was a good development. The Chairman and Congressman Wolff thanked all of the partici- pants in the meeting. The Chairman adjourned the meeting at 12:07 P.M. LEGISLATIVE AcTIvITY OF THE C0MMrFnIE The accompanying table summarizes statistically the work of the committee and its subcommittees during the 96th Congress, first ses- sion. One hundred ninety-four bills have been referred to the commit- tee of which 60 have had action taken. Thirty-five have been reported to the House with recommendation that they be passed. Of these, 12 have become public laws. The committee has held 141 days of hearings and sat in 38 days of markup sessions. STATUS OF BILLS REFERRED, 96TH CONGRESS, 1ST SESSION Subcommittees ________ Fisheries Education Full Merchant and Coast Oceanog. Panama and Total 1 committee Marine Wildlife Guard raphy Canal Training Bills referred: House bills House joint resolutions_ House concurrent resolu- tions House resolutions Senate bills Total referred = Bills reported: Public laws Private laws 173 3 5 4 9 3 0 1 0 2 39 86 29 15 13 5 0 3 0 0 0 0 0 1 1 0 2 0 0 1 0 0 3 0 4 1 0 1 1 0 16 19 5 194 6 43 92 30 ~ 2 4 1 1 2 0 0 0 0 0 0 0 5 11 8 4 2 0 12 0 2 0 2 Reported to House Open hearings (days) Bills considered Markup sessions (days) 35 141 60 38 11 6 15 36 39 18 15 14 2 13 21 14 8 9 1 1 9 6 5 4 0 I Columns may not total due to dual referrals, meetings, and reporting. PAGENO="0016" 12 Assistamce to 0 C'S C'omnv~ttee It should be noted that a considerable block of staff a.i~d certain Committee Member's time was taken up with the consideration of the Outer Continental Shelf Lands Act Amendments legislation, which ultimately became Public Law 95-372 on September 18, 1978. The legislative vehicles, ILR. 1614 and S. 9, were developed through the Ad Hoc Select Committee on the Outer Continental Shelf. This committee was t;he first of its kind ever instituted by the Congress, and was created to eiiminat.e cross-jurisdictional problems among the many standing committees which woul ci be involved in the legislation. Staff and Members were drawn from the major committees. of jurisdiction, including the Merchant Marine and Fisheries Committee, the. !Judiici- ary Committee and the Committee on the Interior. Congiessman John M. Murphy was selected by the Speaker of the House to chair the Ad Hoc Select Committee. Staff members of the Merchaiit Marine and Fisheries Committee selected to serve on the OCS Committee include Mr. Carl Perian, Mr. Lawrence O'Brien, Mr. Stephen Cunningham, Mr. Greg Lambert., Mrs. Julia Perian, Dr. Thomas Icitsos, Kathleen Bomier, llohe~t. Shea. and DOT)aid Watt. While the. OCS Committee. has its own professional staff, they in turn draw heavily on the expertise of t.lw p(~1'mane.nt staffs of the three pareiit committees in their respective jurisdictions, so that le.ga.l and eoiicep.t.usi coniiict.s were. avoided or resolved in the developmental J)rocess of the legislation. `~~e, stat.ist~cal table of the. Committee on Merchant Mlarine and Fisheries activities for the. 96th Congress follows: SUMMARY OF COMMTTTEE ACTIVITIES BY STJBCOM- MITTEE AND STJBJE~T MATTER FULL COMMITTEE Total hills re~'erred (not re-referred to subcommittees) 6 Bills reported, passed, and now law 2 Hearings held ((lays) 11 Markup sessions (clays) 15 LEGISLATIVE ACTIVITIES ITT.R. 4685, Elephant Protection Act of 1979 The African elephant., a species which is over 300,000 years old, once ranged throughout. all of Africa-from the Mediterranean Se.a to the Cape of Good Hope. Today, the range of time Africa.n elephant is liin- ~t.ed to those. nations lying south of the Sahara. Desert. The elephant has become extinct in five nations and in all but five others time l)oPu- latmon is small and vulnerable. Many scientists fear that if present trends contimie, the African elephant will become extinct in even larger portions of its remaining range. The most significant immediate threat to the African elephant is the unregulated and imcont.rohlecl international ivory trade. Although the United States cannot enact statutes which would transcend national sovereign boundaries, it can act to regulate constructively the flow of elephant ivory into this nation. PAGENO="0017" 13 As President Moi of Kenya stated on September 20, 1979: so long as no effective steps are taken to control or sub- due lucrative markets for many wildlife products-in the Middle East and Far East, in Eui~ope and America-then there can be no valid criticism of African nations for failing to conserve this natural treasure. Popu'ation Status and Trends A precise calculation of the status of the African elephant is im- possible to determine. As a general rule, relatively little research has been conducted on Africa's elephant populations. Very few African nations have devoted significant resources to the development of ac- curate population information. Recently, a continent-wide evaluation of the status of the African elephant was completed by the Interna- tional Union for Conservation of Nature and Natural Resources. Most of what we know about the current status of the African elephant is a result of this study and the work of Dr. lain Douglas-Hamilton who participated in this study. The only effective way to count elephants over large areas is by aerial census. Based on these samples it is estimated that 1.3 million. elephants can be found in continental Africa. The elephants occupy a range of over 7 million square kilometers in 35 countries. In East Africa, the population trends are clearest because of the extensive census and survey work which has been done in that area. The evidence developed in these surveys is of great concern to the world environmental community. Dr. Douglas-Hamilton has esti- mated, for example, that between 1970 and 1977 Kenya lost more than one-half of its resident population of elephants. Recent surveys sug- gest that between 1977 and 1978 Kenya's elephant population declined by an additional 25 percent. In Uganda a catastrophic decline of ele- phants occurred when Ugandan soldiers entered the nation's parks and slaughtered elephants for their ivory. Elsewhere in East Africa the elephant population is in decline although the rate of decrease is not as severe according to Dr. Douglas-Hamilton. In Southern Africa, it appears that concerted conservation and law enforcement efforts by South Africa, Zimbabwe-Rhodesia and Bots- wana have arrested the decline of elephants. Elephants in these countries, however, amount to only four percent of the continental population. In West Africa, which accounts for only one percent of the total elephant population, there have been verylimited surveys conducted and present population trends cannot be deduced. Data on elephant populations in Central Africa is likewise restricted by the lack of complete surveys. However, preliminary data and ivory trade ~t~tistic~ strongly suggest that the elephant population in this region ha~ suffered a substantial and dramatic decline. Historically, Africa contained eiephant herds numbering over 10 million. `J~hese herds spread over 90 percent of the continent. Even after the great elephant slaughter of the late 1800's, over three million elephants remained. Today, only about 1.3 million elephants remain in an area covering no more than 10 percent of the continent. Th~ most current population estimates are as follows: 56-410-80-2 PAGENO="0018" 14 TABLE 1.-PRELIMINARY ESTIMATES OF ELEPHANT POPULATIONS,1 1976-79 Percent Elephant Elephant elephant range range as range (square percent of protected Country kilometers) Elephants country status In parks and reserves Angola 350,800 12,400 29 40 Benin 14, 200 900 14 55 Botswana 146, 400 20, 000 33 11 Cameroon 261, 500 16, 200 55 10 Central Africa Republic 360, 800 71, 000 58 2 Chad 411,500 15,000 32 28 Congo 170,400 10,800 50 1 Equatorial Guinea 26, 000 1, 300 99 (3) Ethiopia 81,200 900 7 9 Gabon 267,000 13,400 99 22 Ghana 16,700 3,500 7 49 Ivory Coast 67, 600 4, 000 21 25 Kenya 300,200 65,000 52 6 Liberia 21,400 900 19 (3) Malawi 10,400 4,500 11 100 Mali 65,600 1,000 5 48 Mauritania 14,500 150 1 (3) IViozambique 304, 200 54, 800 39 (2) Namibia 186,300 2,700 23 12 Niger 11,300 1,500 1 20 Nigeria 17,900 2,300 2 (2) Rwanda 1,900 150 7 16 Senegal 18,000 450 9 50 Sierra Leone 50, 000 400 70 (3) Somalia 140, 400 24, 300 22 (3) South Africa 22, 300 7, 800 2 93 Sudan 853,500 134,000 34 9 Tanzania 822,200 316,300 87 17 Togo 2, 000 80 4 (3) Uganda (2) (2) (2) (2) Upper Volta 14,200 1,700 5 60 Zaire 1 820,900 371,700 78 (2) Zambia 301,800 150,000 40 (2) Zimbabwe 119,500 30,000 31 23 (~) 600 6, 400 (2) (2) (2) 150 (3) 200 (2) (2) 800 30 600 (3) 4 500 500 (3) (2) 1,000 700 1,200 75 200 (3) (3) 7, 700 13,000 63,600 (3) (2) (2) (2) (2) 20,400 Total elephant range (square kilometers) Total number of elephants 7, 272, 600 1, 339, 180 iDr. I. Douglas-Hamilton, Final Report to the Department of the Interior on the African Elephant Ivory Trade, August 2 Unknown, 3 None. Tue Internatio%al Ivory Trade The ivory trade is one of man's oldest, reaching back at least to the stone age. It has continued unabated since that time and today is probably larger than at any time in the past and constitutes the most immediate threat to the survival of the elephant. Today, the ivory trade runs into hundreds of millions of dollars annually. Mr. Ian Parker, who conducted a study on the elephant ivory trade on contract with the Department of the Interior and Dr. Douglas-Ham- ilton, estimated that last year the value of international raw ivory imports was at least $82 million. The trade in worked ivory is even more substantial. Mr. Parker estimated that in 1978, for example, the international trade in worked ivory amounted to $140 million. In addition to this recorded trade, there may be a substantial il- legal trade. Preliminary investigations by the Justice Department have revealed a large illegal wildlife trade running into the tens of millions of dollars. In fact, Justice Department attorneys have argued PAGENO="0019" 15 ~that the profits in illegal wildlife are equivalent to profits in the drug -trade. For a $1,000 investment, a wildlife smuggler can make ten times that amount. Historically, the United States has not been the most important market for elephant products. However, the United States remains :a major market, particularly for worked ivory. The following table shows the U.S. imports of raw and worked ivory for the years 1974- 1978. TABLE IL-U.S. IMPORTS OF RAW AND WORKED IVORY' Year Raw in pounds Raw in dollars Worked in dollars Total in dollars 1974 1975 1976 1977 1978 - 5,176 20,766 77, 238 33,824 19, 873 $59,000 143,000 853, 000 440,000 256, 316 $1,911,000 2,452,000 3, 257, 000 4,442,000 7, 126, 308 $1,970,000 2,595,000 4, 110, 000 4,882,000 7, 382, 624 `This data was provided to the committee by the Department of Commerce. Students of the ivory trade contend that these official figures underestimate the level of ivory imports entering the United States. The international trade in ivory products is extremely difficult to control-a difficulty that poachers are quick to exploit. Even~ Bots- wa~na, one of the few African nations currently allowed to export ivory to the U.S., and a country which is considered to have one of the best elephant conservation programs in Africa, is experiencing significant difficulties. P. T. Williamson, the Acting Director of Wild- life, National Park and Tourism, states "We have no data on the desti- nation of elephant products leaving Botswana or on the quantity of material exported to the U.S. . . . we have no hard data on the num- bers of elephants poached in Botswana and it is thus difficult to say how effective anti-poaching measures are." Solomon Ole Saibull, Tan- :zania's Minister for Natural Resources and Tourism, states that "Un- less trade in endangered species is stopped, whole populations will disappear from the face of the earth. The 1970's have brought despair -to wildlife conservation throughout Central and Eastern Africa. The rising prices of ivory . . . increased profits to unprecedented 1ev- ~els . . . . The bulk of poached products are smuggled out of the country and sold on international markets beyond our control." The Committee believes that most foreign wildlife officials are making a good faith effort to enforce their laws, many of which pro- vide excellent legal mechanisms to control wildlife trade. If left unregulated, this wildlife trade could destroy wildlife populations. The real problem is the nature of the product, particularly the in- herent difficulties of proving that a worked ivory product comes from an ivory tusk taken from a given country, and the lack of funds avail- able to foreign officials to enforce their wildlife laws. The poaching of elephants is, because of these facts, an extremely serious problem. In fact, according to Dr. Douglas-Hamilton, only Southern Tanzania has escaped heavy poaching, and, as the poachers search for new supplies of ivory, it is likely that Tanzanian elephant `populations will also be threatened by poachers. These poachers use all array of modern weaponry to take their illegal harvest. Conserva- tticnists throughout the world have received reports of poachers firing PAGENO="0020" 16 rockets at elephants from helicopters There are other reports of poach- ers poisoning waterholes, indiscriminately killing wildlife of all types and, because of their tremendous size, causing a slow and often pain- ful death for elephants lihe impact of the trade in ivory has been severe In the past, ele phant popu'ations have been exterminated by ivory hunters alone.. This was particularly true in North Africa in the early Middle Ages, in South Africa during the 18th and 19th centuries, in West Africa in the late 19th and early 20th Centuries, and in Northern Somalia during the mid 1950's The elephants in these regions were all fairly accessible and the profits to be derived from the ivory trade were~ significant. To prevent the errors of the past from becoming the~ realities of tomorrow, FLR. 4685 establishes a mechanism for con- trolling the illegal trade in elephant products It should be noted, however, that between 2,000 and 3,000 U S artisans practicing the art of scrimshaw, the carving on whalebone and ivory, depend on the importation of raw ivory into the United States in order to practice their art and maintain their livelihood The art of scrimshaw was originated during the nation's early years by New England whalers These men etched designs in, and carved figures from, whalebone as a means of passing time during the long months spent away from home on whaling expeditions As the nation giew and expanded westward, the popularity of scrimshaw grew as well, and today the art is practiced throughout the country in New England and in areas such as the Pacific Northwest, the Southwest, Alaska and Hawaii The restriction on the availability of wh'tlebone- caused by the endangered status of the great whales, increased the scrimshanders' dependence on other materials such as ivory Without this material, it is unlikely that the art of scrimshaw will survive For over 100 years, substantial research has been devoted to finding substitutes for whalebone and ivory Polyester resins, epoxies, micartas and other materials with plastic quaht]es have been developed Al though these items are astonishingly close to ivory, they have all failed commercially. The problem is that man-made substitutes can be stamped, molded, or reproduced, and thus any artwork can easily be debased by cheap reproductions Unless some provision is made for the protection of these artisans, it is clear that, in time, scrimshaw will become a lost art It is for this reason that H B 4685, although generally restricting ivory imports into the United States, allows a limited importation of unworked ivory for the use of scrimshaw artisans Briefly explained, H B 4685, as ordered reported by the Committee, would impose a six month moratorium on the importing into `md ex porting from the United States of any elephant or elephant product However, during that period, the legislation would exempt from the prohibition 10,000 pounds of unworked ivory In addition, during the first 90 days of the period, the bill would exempt worked ivory pur chased abroad by tourists and not intended for resale After the initial six month period, imports and exports of elephants and elephant prod ucts would be allowed but only if a permit was obtained from the Secretary of the Interior The Secretary would be required to issue an import permit if, after consultation with the Secretary of State PAGENO="0021" 17 rand with the appropriate authorities of the nation concerned, he finds that a management program has been developed and implemented by the nation from which such elephant originates that would adequately provide for elephant conservation. Exempted from the coverage of the legislation would be imports and exports for zoological, educational, scientific, or exhibitional pur- poses; keyboard ivory which is a part of a musical instrument; and Wafter the six-month moratorium elephant trophies taken by a sports hunter provided they were taken and transported in compliance with the laws of the nation which the elephant trophies concerned origi- nated. Violators of the Act would be subject to a civil penalty of $10,000 and a criminal penalty of $20,000 or one year imprisonment or both. ~To assist in carrying out the legislation, there would be aut horized to be appropriated over the four-year life of the program $9 million to the Secretary of the Interior and $17 million to the Secretary of State. ILR. 4685 was introduced on June 28, 1979, by Congressman Mur- phy of New York and was cosponsored by Congressmen Breaux, Pritchard, Emery and Beilenson. Subsequently, Congressmen For- sythe, Anderson of California, AuCoin, Carr, Lowry, McCloskey, Thompson, and Lloyd added their names as cosponsors of the legisla- tion. Testimony concerning the bill was received from the following: Congressman Beilenson; Congressman Hamilton; the Ambassador of Botswana; representatives from the Embassies of the Republic of South Africa and the Ivory Coast; representatives from the De- partments of State, Justice, and Interior; representatives of the en- vironmental community, ivory importers, and the scrimshaw industry; the Safari Club; Dr. lain Douglas-Hamilton, author and recognized authority on the African elephant; and Mr. Ian S. C. Parker, also an author and recognized authority on the African elephant. Testimony at the hearings ranged from those who expressed strong support for the legislation to the worked ivory dealers who expressed opposition to the bill. Witnesses from the Executive Branch recom- mended that the Committee defer action on the bill pending their review of a study of the African elephant which was carried out by Dr. Douglas-Hamilton and Mr. Parker. However, the Committee notes that the report endorses the concept of the bill and that the materials contained therein have been available for evaluation since early July. Members of the environmental and conservation community strongly emphasized that immediate steps had to be taken to protect the ele- phant populations from decimation. After giving thorough consideration to the testimony presented at the hearings and to the Departmental reports, the Full Committee, ~by unanimous voice vote, ordered H.R. 4685 reported with amend- ments on October 31, 1979. The amendments were accomplished by amending the title to the bill and by striking out all after the enacting ~clause and inserting new language. On November 8, 1979, the Full Committee again considered the bill but only for purposes of clarify- ing the intent of an amendment previously adopted by the Committee. House Report No. 96-661, Part 1, was filed on November 27, 1979, and sequential referral was given to the House Ways and Means and For- PAGENO="0022" 18 eigri Affairs Committees. These two Committees were given until De-- cember 12, 1979, to report any differences. The Committee on Foreign Affairs, in. a letter dated December 7th,.. reported to the Speaker of the House that it had no objection to~ consideration of this bill by the House as a whole. The Committee on Ways and Means made three minor amendments of a technical nature which were accepted by the Merchant Marine and Fisheries Commit- tee. A letter was sent to the Speaker of the I-louse on December 14,. 1979, requesting that the Speaker schedule it requesting a rule be~ granted suspending the rules and it is tentatively scheduled to be taken up on December 18, 1979. - Fact Finding Trip to Ivory Exporting Nations To Investigate the Impact of Hi?. 4685 Subsequent to the hearings on H.R. 4685, the Elephant Protectiom Act of 1979, on July 25 and 26, 1979, Martin D. I-lowefl visited Great Britain, Belgium, Federal Republic of Germany, Republic of South Africa, Botswana, Kenya, Hong Kong, and Japan during the perIod" August 9-30, 1979. Great Britain.-There was great concern over the effect the mora- torium would have on the importation of Bosendorfer pianos. Fleer- berger-Brooks in Nottingham purchases the ivory and furnishes it to' the Bosendorfer factory in Vienna, Austria. Both are wholly owned' subsidiaries of Kimball pianos whose headquarters is in Jasper, Indi- ana. Congressman Hamilton (D-Ind.) is expected to offer an amend- ment, through one of the Committee Members or on the floor which would exempt Bosendorfer pianos from the moratorium. F. Friedlein & Co. Ltd. furnishes ivory tusks to Heerberger-Brooks. Heerberger- Brooks in cutting the ivory veneer for piano keys has trapezoidar "waste" since the keys must be taken at a 90 degree. angle to the tusk. This "waste" is then resold to F. Friedlein who sells it to carvers in Germany. F. Friedlein & Co. Ltd. was established around the turn of the century and is extremely anxious to cooperate in any way with U.S. regulations governing the import of ivory. British importation laws governing the ivory trade are quite strict and records are well' kept. Great Britain is a member of CITES. A ntwerp, Belqium.-The ivory traders for the most part are old' and established and are sincerely interested in protecting the elephant or else with its extinction they would go out of business. While gener- ally opposed to any moratorium, the traders in Belgium believe that they could dispose of their ivory into other markets without seriously' impairing their finances. Of course they welcome entree into the U.S. market and look forward to continuing their sales to countries export- ing to the U.S. Many other countries use Belgium as a storage point for ivory in transit since Belgium charges only for space occupied by' the ivory and does not impose an ad valorem tax as do many European countries. Belgium is not a member of CITES, therefore, records, while good. do not reflect concern for point of origin or destination. FederaZ Re~uhlic of Germany's (FRG) ivory center is located at Erbach. FRG's importation laws are quite strict. Frequently FRG' customs will send xeroxed copies of export licenses back to the eoun. try of origin to determine the authenticity of the export document.. PAGENO="0023" 19 Importation into the FRG must come through three ports of entry: Frankfurt, Erbach and Bremen. FRG is a member of CITES and exports little ivory to the U.S. Republic of South Africa is a member of CITES and strictly con- trols its elephant population which is located in the Kruger National Park to 7,500 animals. A program of culling is carried out each year and the ivory collected thereby are sold at public auction. The illegal trade in ivory crossing the border from Angola into Namibia is undergoing increasing surveillance and stafFdel was given assurances that it will soon be severely curtailed. Botswana.-Staffdel was cordially welcomed by Botswaman offi- cials and by the officers of the Botswana Game Industries. Botswana is most concerned with the impact which the proposed moratorium will have upon Botswana because 100% of the market for the export of elephant leather is to the U.S. Botswana has an elephant popula- tion of some 34,000 animals. The population is young and expanding. Anti-poaching measures and law enforcement are among the best for African countries. Kenya has banned the export of all wildlife products for the past two years with the exception of that which can be exported by the Government. Staffdel received every indication that the new Attorney General, Mr. Njonjo, was effectively controlling illicit trade in ivory. While Staffdel was in Kenya 650 kilograms of ivory which were being illegally shipped without export documents to Frankfurt, Germany, were seized by the local authorities. Hong Kong.-While in Hong Kong Staffdel met with members of the Hong Kong and Kowloon Ivory Manufacturers Association, Ltd. These members were most concerned with the moratorium and its im- pact upon some 3,000 workers in the Hong Kong community. Staffdei was most impressed with Great Britain's control of ivory imports into Hong Kong and also with the local Hong Kong Government's records concerning imports and exports of worked ivory. Hong Kong's records and those of is merchants were among the best which Staffdel ob- served during his investigation. Japan, which imports some 400 tons of ivory annually, uses 98 per- cent of this import domestically. While there Staffdel learned that Japan proposes to enter into CITES next spring. The ivory exporters are concerned with the impact which H.R. 4685, if enacted into law, will have on its exports which are primarily to Hawaii. In summary, most localities visited were deeply concerned with the problem of illegal poaching and illegal export of ivory. Authorities in virtually every place visited expressed their appreciation for the U.S. efforts to conserve the African elephant populations. Not every locality believed a moratorium was necessary. Each was concerned with the economic impact which such a moratorium would have upon their ex~ port business but most seemed reconciled: 1. To the fact that a moratorium would be imposed by the U.S., 2. That such a moratorium would in the long run be bene~Ucial to the elephant populations and to their export business, 3. That while other market~s are available for crude and worked ivory, most governments and exporters would prefer to work with the U.S. to effect the preservation of the African elephant popula- tions. PAGENO="0024" 20 OVERSIGHT ACTIVITIES Health of American seamen as provided by the U.S. Public Health Service hospitals and clinics The House Committee on Merchant Marine and Fisheries is charged ~with oversight responsibility for the health of American Seamen and those institutions mandated to provide that health care, the United States Public Health Service Hospitals and Clinics (USPHS). In carx7mg out its responsibilities, the Committee has maintained a con- tinuing review of the USPHS and the needs of its primary benefici- ~aries and conducted oversight hearings on June 18, and June 19, 1979. Funding the USPHS, the role of the Department of Health, Educa- tion and Welfare (HEW') directive to involve local Health Systems Agencies (HSA) in the planning mechanisms of the USPHS and the implementation of the 1978 Ad Hoc Advisory Committee's Report to `the Secretary of HEW on the Public Health Service Hospitals and Clinics established the focus of the June 18 hearings. Dr. George I. Lythcott, Assistant Surgeon General, Administrator ~of the Health Services Administration, HEW, accompanied by Dr. James Erickson, Director of the Bureau of Medical Services, HEW `and Richard Ashbaugh, Deputy Director, Division of Hospitals and Clinics, HEW, led off the testimony. Dr. Lythcott stated HEW's in- tent not to close the USPHS system but rather redefine the role of the Public Health Service. This redefinition will not occur until a cost- comparison study has been performed. The results of this study were due in August of 1979. It is also the intent of HEW to run the USPHS as a first class medical institution. The Honorable Barbara Mikulski and Honorable Baitasar Corrada `presented testimony of their experiences dealing with the USPHS in ~the districts they represent. Dr. Cecil Sheps, Professor of Social Medicine at the University of North Carolini~ and a Member of the 1978 Ad Hoc Advisory Committee on the USPHS informed the Coin- mittee of the process used by the Ad Hoc Committee in formulating its recommendations to the Secretary. Dr. Sheps acknowledged that in ~some instances, the primary beneficiary, the seaman, was not the primary focus for the decisions made by the Ad Hoc Committee. The final witness, Mr. Charles Mollard, Vice President of Seafarers International Union of North America, AFL-CIO, stressed the serious lac.k of medical care aboard ship which jeopardizes the seaman's life. On June 19, the Committee continued hearings in order to clarify whether seagoing citizens of the United States are unique, and whether ~they require special medical needs. The hearing also sought to deter- mine how modern day medical and communications technology has `advanced the care of our seamen. Dr. James H. Erickson, Assistant Surgeon General, Director of the `Bureau of Medical Services, HEW. accompanied by Dr. Ernest Harda- way, Chief, Policy Division, Dr. Truman L. McCasiand, Director of Program Develonment and Richard Ashbaugh, Deputy Director of hospitals and Clinics. HEW related the progress made by the new program, Seafarer's Health Improvement Program (SHIP) in pro- `fiuin~ American Seamen in areas of physical qualifications, access to medical care, MEDICO/SAR/Care at Sea and safety aboard ship. `Ship to Shore Communications was the subject of the Coast Guard's PAGENO="0025" 21 testimony by Rear Admiral Henry H. Bell, Chief of the Office of Mer- chant Marine Safety, accompanied by Commander Robert Parrow. Dr. William B. Walsh, President and Medical Director of Project Hope explained the difficulties and the success of providing medical care aboard ship by telecommunication's satellite. Mr. Edward J. Martin, Division Manager-Inmarset, COMSAT,~ brought the Committee up to date on present telecommunication's sat- chute systems in existence both domestically and internationally. Mr. Marvin Pitkin, Assistant Administrator of Commercial Development, Maritime Administration, Department of Commerce continued the dis- cussion of telecommunication satellite systems by stressing the eco- nomic prohibitions against installation of such equipment on U.S. Flag Vessels. Mr. Burt E. Lanpher, Staff Officers Association of America, accom- panied by Mr. Regenis and Mr. Condiotti; Mr. Ed Kelly, Marine Engineers Beneficial Association; Mr. Earl Clarke., Co-Director, Labor-Management, Maritime Committee, AFL-CIO and Captain Robert Lowen, President of Masters, Mates and Pilots International profiled the present risk sustained by seamen a~board ship in areas of medical as well as environmental and psychological care. These wit- nesses also supported the fact that further primary, priority care must be made available to seamen by the USPHS when seamen have so little time in port to receive medical treatment. The final witness at these in-depth hearings, Dr. Garreth Green, Chairman, Department of Environmental Health Sciences at Johns Hopkins University spoke on the proposed link between Johns Hop- kins and the Baltimore PHS Hospital concerning an environmental, sociological and occupational study of seamen. The Hospital will serve as an inplace laboratory for this study. Another outcome of these hearings was the June 28 field investi- gation in San Francisco, California, by the Committee on allegations of nonanthorized involvement of the HSA in the planning processes of the San Francisco Public Health Service Hospital. Present law stipulates that federally operated hospitals such as the Public Health are exempt from the jurisdiction and scrutiny of Health System's Agencies. Following the San Francisco investigation, the Committee reviewed the working relationship of the Seattle Public Health Service Hospitar with the Puget Sound HSA. The Committee also undertook a study of the San Diego PHS Clinic as a pilot for the oversight process in an area (clinic) that historically has been overshadowed by concern for the pressing problems of the Hospitals. The Committee acknowledged the completion and distribution ~f the recently revised edition of "The Shin's Medicine Chest and Medicar Care at Sea" by the Public Health Service. The long awaited en- cyclopedic work will provide the basis for measuring many of the~ changes which the Public Health Service seeks to make in relation to~ the health and well-being of that body of Americans known as the fourth arm of our National Defense. Tipelate on the Inter-A irterican Tropica7 Twna Commhsion Members of the Inter-American Tropical Tuna Commission~ (IATTC') which was formed in 1949 were: Canada, Costa Riea,~ France, Japan, Mexico, Nicaragua, Panama, and the United States; In PAGENO="0026" 22 late 1977, both Mexico and Costa Rica announced their intention to denounce the IATTC Convention. Mexico ceased to be a member in November, 1978, and Costa Rica in April, 1979. The United States had virtually continuous negotiations going on with both countries in an attempt to preserve the Convention. However, these attempts proved unsuccessful. The principal items of contention were first, the annual allocations to ~iach country for tuna to be taken in the Commission's Yellowfin Regu- latory Area (CYRA) and second, the last free trip into the CYRA by American-flag vessels. A full meeting of the plenipotentiaries of the IATTC was held in Mexico on January 15-19, 1979. At this conference good progress was made on all items of a draft Convention for a new regime except for the sections on allocations and the last free trip. The U.S. representatives `consistently held to their opinion that allocations for each country must be based on the historical annual catch in the CYRA by that member's flag vessels. Mexico and Costa Rica hewed to the line that allocations to Latin American Coastal States (LACS) should be based upon the tons which w~re taken by ships of all nations in coastal waters of LACS making up the CYRA. Hence while Mexican-flag ships took only 20,000 tons of tuna in 1978, they demanded an allocation of 36,000 tons and similarly while Costa Rican-flag ships took only a little over 5.000 tons they demanded an allocation of 21,000 tons. It soon became obvious that the allocation problem would not be solved. Similarly, little progress was made on resolution of the last free trip. Late on the night of January 17th, Ambassador Negroponte in- formed members of the U.S. delegation that the seizure by Costa Rica of American vessels was imminent. At 2:00 a.m. on January 18th, the Sea 1~'ox and the 7Jnc7e Louie were seized while drifting about 150 miles off the Costa Rican coast. This hostile action by the Government of Costa Rica effectively ended the meeting. Subsequent meetings were held by the representatives of Costa Rica, Mexico and the United States on March 7th and 8th in Washington, D.C., and again on May 3rd and 4th in Mexico City. Some progress was made and Mexico and Costa Rica presented to the United States a joint new package proposal based on a 200,000-ton average annual catch of yellowfin for 5 years. The United States followed with a counterproposal on the basis of 200,000 tons, which may be adjusted annually during a 5-year term on the basis of scientific opinion. The allocation of this 200,000 tons differed as shown by the following comparison. (A column is added to show IATTC 1978 catch figures and was not a part of proposals submitted.) Country Mexico/Costa Rica proposal United States proposal IATTC 19 78 cathc Columh~a Costa Rica Ecuador Fl Salvador Guatemala Mexico Nicaragua Panama Peru France * Total 7 465 20, 565 21,545 4, 250 8, 565 35 570 1, 450 9,200 7 390 0 6,000 20, 000 18, 000 3, 000 3, 000 35, 000 2, 000 6,000 6,000 6, 000 (1) 5, 177 7,614 0 0 19, 926 2, 885 11,658 2,679 0 114, 000 105, 000 49, 939 1 See Nicaragua. PAGENO="0027" 23 Neither side would budge; however, the three countries did agree to continue their attempts to resolve their differences. The last meeting was held in San Diego, California, on October 80th ~tnd 31st. Here again attempts `at resolution we're unsuccessful; how- ever, the positions on the last free trip and the allocations were sub. `stanti'ally narrowed. At the San Diego meeting, the U.S. acquiesced ~to the request of Mexico and Costa Rica for 35,000 and 20,000 tons annually respectively, based on the overall catch quota of 200,00.Q~ tons within the CYRA. A new stumbling block which surfaced was that Mexico and Costa Rica ~do not want ththr allocations to fluctuate in proportion to the fluctuation of the overall quota. This overall ~quota, of course, depends upon the conservation recommendations of the IATTC scientific staff. As for the last free trip, the United States and Mexico are still in disagreement. The United States wishes to continue in accordance with the existing IATTC practice that allows all U.S. vessels to complete a last trip for yellowfin tuna in the CYRA after the an- nouncement of the season's closure. Mexico contends that if a ship is at sea during the closure announcement, it may finish that trip; however, if a ship is in port and manages to put to sea be~fore the closure date, it must finish that last trip within 60 days. The State Department plans to hold meetings with both Mexico and Costa Rica to resolve these two final issues before the end of CY 1979. The Mexican delegation has made clear that at the first of the year it would be compelled to begin enforcing its 200-mile fishing ~jurisdiction against U.S. tunaboats unless a new agreement can be reached. During CY 1979 Costa Rica seized a total of four boats and did `not release these boats until a total of almost $444,982 in fines had been paid. Similarly, Peru seized one boat in February and eight in November. `These boats were all released after payment of fines total- 1mg approximately $300,290. Import restrictions on tuna from both `Costa Rica and Peru were issued and imposed. In addition to the aforementioned meetings, the 37th meeting of the TATTC was held on October23 and 24, 1979, in Panama City, Panama. Here discussions were held on the followin~r `agenda items: Current Research; The Tuna/Porpoise Program; The 1979 Fishing Year; The Condition of the Yellowfin Stock for FY 1980; and The Recom- `mended Research Program and Budget for FY 1981-~82. Due to the pending negotiations mentioned above, no decisions `were made on any of the agenda items. The United States' position is, however, that it will continue to supnort the IATTC with or with- out the'membership of Mexico or Costa Rica. South Paci~c Forum Fisheries Aqe~nci,' The member states of the South Pacific Forum are: Australia, Cook Islands, Fiii, Gilbert Island. Nauru. New Zealand. Niue, Papua New `Guinea, Solomon Islands. Tonga, Tuvalu, and Western Samoa. The Forum states established the South Pacific Forum Fisheries Agency in 1979 and this agency held its first meeting October 24-27, 1979, ~t lion- iara, Solomon Islands. The recommendation was made that the agency ~had `been "eatahlished for the purposes of: PAGENO="0028" 24 ( a) Promoting intra regional coordination and cooperation in respect of fisheries management ( b) Securing the ma~umum benefits from the living marine re sources for their peoples of the region, in particular the devel oping countries. (c) Promoting cooperation in respect of relations with distant water fishing countries The members of the new South Pacific Forum Fisheries Agency excluded the United States from its membership and recommended. that all member governments should urge the United States to remove any threat of embargoes and sanctions `is currently contained in the Fishermen's Protective Act and the Fishery Conservation and Man agement Act so that member countries, especially the developing island countries of the region, might develop tuna resources without anxiety While some mention has been made of an additional organization which would include the United States, the United Kingdom, anct. France, there has been no definitive progress since the June, 1978 meet ing in Suva, the Fiji Islands Elowout o/' the Mexican Oil Well IXTOC I and Resulting Oil Pollu- tion of the Texas Coast and the Gulf of Mexico The Committee on Merchant Marine `trid Fisheries held field hear ings in September 1979 on the blowout of the Mexican oil well IXTOC I and the resulting oil pollution of the Texas coast and the Gulf of Mexico The Mexican oil well IXTOC I, located in the Bahia de Campeche about 40 miles from the Mexican coast, blew out on June 3, 1979. From that date, the well discharged great quantities of crude oil into the Gulf of Mexico. Estimates of amounts vary. Early reports were that 10,000 to 30,000 barrels per day escaped from the well. Other reports, based on observations and calculations on scene, indicated that the' volume discharged could be much greater, as much as 50,000 barrels~ per day All estimates `iside, IXTOC I is undeniably the largest oil snill in history-a man made disaster of momentous pioportions Its dimensions and its repercussions may take years to assess fully Wind and current spread the IXTOC oil over a huge expanse of the Gulf of Mexico Mexican beaches and fishing grounds were severely impacted and, from early August, the oil gravely affected the w'iters and coastline of the United States from Brown~tville to M'itagorda Island. The ultimate impact of the oil pollution on Texas, upon other' states littoral to the Gulf of Mexico, and on the resources of the Gulf' itself, can only be speculative at the time of this report It is sure, however, that the impact is and will continue to be severe Seasonal changes in wind and current patterns beginning in Octo- ber reduced the immediate threat to the U S Gulf coast and con tiguous offshore areas But this relief is expected to be temnor'irv If th~ source of oil is not shut doi~rn, a new onslaught of IXTOC oil may he expected in the Spring of 1980, impelled by northward forces of wind and sea. A delegation from the Committee on Merchant Marine and Fisher ies l~d by Mr de la Garza and Mr Wyatt, visited Texas in July 1979, overfiying the well site and polluted ocean areas and auditing the ac- PAGENO="0029" 25 *tivities of the federal agencies preparing to respond to the emergency as the pollution approached the Texas coast. In light of the accounts of this visit and of reports on the evolving situation from federal and Texas authorities, the Chairman of the Committee on Merchant Marine and Fisheries, John M. Murphy, decided to hold field hearings in Corpus Christi, Texas. The Committee, jointly with the Water Resources Subcommittee of the Committee on Public Works and Transportation, held two days of hearings in Corpus Christi on September 8 and 9, 1979. The unique nature of the massive oil spill was deemed to require a detailed hearing if groundwork were to be laid for Congressional action to protect both the immediate interests of the residents of impacted coastal areas as well as the national interest. And certainly. the IXTOC I incident pro- vided a backdrop against which pending legislation, such as H.R. 85 (to provide a comprehensive system of liability and compensation for oil-spill damage and removal costs), should be considered. Simi- larly, although the source of pollution is located on the. outer conti- nental shelf of another country, provisions of existing law, such as Title III of the Outer Continental Shelf Lands Act Amendments of 1978, should be assessed in light of the IXTOC I disaster. The circumstances surrounding the IXTOC I oil spill gave rise to a wide spectrum of subjects encompassed by the oversight jurisdiction of the Committee on Merchant Marine and Fisheries. The budgets and operations of two key federal agencies, the Coast Guard and the National Oceanic and Atmospheric Administration, fall within Com- mittee jurisdiction. The performance and effectiveness of these two agencies in responding to the spill are matters of keen interest. The National Oil and Hazardous Substances Pollution Contingency Plan, which governs interagency response activities, is published under the auspices of the Council of Environmental Quality in the Office of the President. The Council was created by legislation that originated in this Committee and its activities are subject to the Committee's au- thorization power. Oceanography and marine affairs, fisheries and wildlife conservation-federal activities in all these areas fall within the Committee's jurisdiction. As illustrated by the foregoing paragraphs, the hearings on IXTOC I served multiple legislative and oversight purposes. Co-chairmen for the hearings were Mr. John Breaux for Merchant Marine and Fisheries and Mr. Ray Roberts for Public Works and Transportation. Other Members present were Messrs. de Ia Garza, McCloskey, Studds, and Wyatt (Merchant Marine and Fisheries); Livingstone (Public Works and Transportation); and Gonzalez (Committee on Small Business). All Members present made brief opening statements and, in addition, Chairman Breaux submitted for the record the statement of Mr. Murphy, Chairman, Committee on Merchant Marine and Fisheries. Mr. de la Garza submitted for the record a statement by Senator Bentsen. The various statements cx- pressed the great interest of the Members in learning about the events leading to the pollution of the Texas coast, the effectiveness of res- ponse efforts, the damage suffered by U.S. citizens, and other in- formation surrounding the incident that might lead to legislative ini- tiatives. Several Members commented that, had H.R. 85 or its pred- PAGENO="0030" 26 ecessor bill H.R. 6803 been enacted into law, U.S. citizens suffering damage would be able to assert claims against the federal compensa- tion fund that the legislation would have established. Attorney General Mark White of the State of Texas was the first witness. Mr. White cited the economic losses being suffered by the tourist and fishing industries and noted the possibll1ty of major,. long-term ecological damage to bays and estuaries, which serve as breeding grounds for fish and wildlife. He stated two major concerns first, the need to fin'd a way to minimize `the damage that Texas su~- fers as a result of the spill, and second, the view that innocent vic- tims of the largest oil spill in history should not be forced to beai the brunt of the effects. He stated that he was exploring sources ot assistance and compensation and taking steps to assure that those' are obtained. Mr. White lauded the Federal Government response efforts and went on to identify five specific steps the Federal Government should undertake: (1) full and complete funding of U.S. Coast Guard dam- age control efforts, (2) full utilization of spill control equipment avail- able elsewhere in the Nation to prevent and not simply minimize oil intrusion into ecologically sensitive bays and estuaries, (3) an adequate level of funding for the IXTOC I damage assessment pro- gram of the National Oceanic and Atmospheric Administration, (4) working with private industry to obtain assistance in damage cofl- trol and to assure that the benefit of best available technology is ap- plied, and (5) providing immediate and effective assistance through low interest, long-term Federal loans. Mr. White `described the power and authority of the Attorney Gen- eral under the laws of Texas and said that he would be taking appro- priate action to obtain compensation from responsible parties. In this regard, he recognized the responsibility of the President and the Secretary of State for foreign affairs and indicated that any action he might initiate would take into account diplomatic efforts to obtain' compensation. He `cited the Foreign Sovereign Immunities Act (28 USC 1602- 1611) as allowing a lawsuit to be filed where an act occurs outside the territory of the United States in connection with a commercial ac- tivity of a foreign state and that act has a direct effect in the United States. In such a case, the foreign state is not immune from the juris- diction of the courts of the United States or the state in which the di- rect effect occurs. Mr. White hoped that diplomatic efforts would be successful and that no such lawsuit would ever be necessary. Mr. Stephen C. Mahood, Vice President and General Counsel of SEDCO, Inc., and Mr. Spencer L. Taylor, President of SEDCO Drill- ing Division, testified on behalf of SEDCO, Inc. Mr. Mahood stated that SEDCO, Inc., with headquarters in Dallas, engages in contract drilling as its primary business. The company owns 25 offshore drilling vessels, most of which are semi-submersibles. SEDCO owned the semi-submersible drilling vessel SEDCO 135, which was utilized, in drilling the IXTOC I oil well. Mr. Mahood described SEDCO's contractual relationship with PERMARGO, a Mexican drilling company that was engaged to drill the well by PEMEX, the national oil company of Mexico. SEP00 PAGENO="0031" 27 provided SEP00 135 to PERMARGO under bareboat charter under which the charterer had entire possession and control of operationa and handling of the vessel and provided its own crew and supplies. Under separate contract SEP00 agreed to supply certain equipment under this arrangement and to provide a number of personnel expe- rienced in the operation of semisubmersible vessels, a type new to PER- MARGO. These personnel were responsible for assuring proper main- tenance of SEDCO equipment and for furnishing advice to PER- MARGO as required. The vessel began drilling in the Campeche area in August, 1977, and moved to the IXTOC I location in November, 1978. Messrs. Mahood and Taylor provided an account of the drilling activities that culminated in the blowout. The witnesses emphasized that drilling operations were controlled by PEMEX and PER- MARGO. SEP00 did not have access to the decision-making process. or to the geological data upon which decisions were based. SEDCO personnel did offer advice as the situation evolved, but this advice was not accepted by the Mexican officials in charge. PEMEX and PER- MARGO officials made decisions on the basis of their past experience with similar drilling in the same area and on the basis of information not available to SEP00 personnel. The witnesses described the sequence of events, including the blow- out and resultant fire, in technical detail. It seemed clear from the testimony that a number of mistakes in judgment had been made and the blowout occurred due to human error, rather than equipment failure. SECO 135 was severely damaged by the blowout and fire. Almost all drilling equipment on the unit was destroyed. The vessel was adjudged to be damaged beyond repair. Costs of salvage and scrapping were weighed against the dangers of the unit sinking and obstructing a channel while enroute to a salvage port. Finally, with the concur- rence of SEDOO's underwriters and the permission of Mexican au- thorities, SEP00 135 was towed to deep water (over 200 miles from land) and sunk. Most remaining witnesses at the hearing were grouped into panels to facilitate taking statements from the large number of witnesses in- volved and to focus discussion into general areas of experience and expertise. The first panel comprised representatives of Federal agencies engaged in responding to the oil pollution pursuant to the National Contingency Plan. Panel members were Rear Admiral Paul Yost, USCG, Commander, 8th Coast Guard District; NOAA Deputy Administrator James Walsh; Captain Roger Madsen, USCG, Chair- man of the Regional Response Team; Captain Theottis Wood, Fed- eral On-Scene Coordinator; Mr. John Robinson, NOAA, Scientific Support Coordinator; Mr. Kenneth Biglane, EPA, Chairman of the National Response Team; Captain Charles Corbett, IJSCG, Vice Chairman of the National Response Team; and Mr. Jack P. Woosten- hulme, Assistant Regional Director (Environment), U.S. Fish and Wildlife Service, Southwest Region. The main points brought out by the panel's testimony are a~ follows: Soon after the blowout, the U.S. Ambassador to Mexico offered U.S. assistance and these offers were reiterated later through diplomatic PAGENO="0032" 28 ~channels by representatives of the National Response Team. Initially, Mexico preferred to engage private companies and experts from sev- ~ral countries to assist them in dealing wtih the pollution. Later, Mexico accepted assistance from the U.S. Government in the form of technical experts to assess the situation on-scene and Coast Guard per- sonnel (National Strike Force) to engage in cleanup operations at the well site. The National Response Team convened on June 19, chaired by Captain Corbett, to assess the IXTOC I situation. Subsequently, the Coast Guard Captain of the Port, Corpus Christi, as predesignated Federal On-Scene Coordinator (OSC), began preparations to mount protective measures and clean up efforts, should the oil reach the United States. On July 9, the local contingency plan was activated, the IXTOC I oil being considered a potential threat to the U.S. A Scientific Support Coordinator (SSC) (Mr. Robinson) was brought on board, as well as a Response Coordinator from the Gulf Strike Team. The SSC initiated a coastal vulnerability study on the Texas coast, initially from the Rio Grande to Port Aransas and subsequently north to the Louisiana border. The Regional Response Team (RRT) convened on July 13 with representatives from Gulf states. Texas representatives emphasized the importance of protecting bays, estuaries, and beaches, and indi- cated the intention to work full time with the OSC in implementing contingency planning. On July 13~ Coast Guard aircraft began regular surveillance, flights over the southwestern Gulf of Mexico and Bay of Campeche. NOAA and U.S. Navy aircraft participated in this surveillance program. Sporadic flights by State of Texas and NOAA aircraft had been con- ducted prior to this time. On July 26, the RRT agreed on protection priorities, based on the vulnerability studies, The highest priority was to keep oil from en- tering bays and estuaries of the Texas coast, using the barrier islands as a natural boom. Beaches would be cleaned as often as necessary to minimize economic losses to commercial operations, e.g., hotels; pub- }ic beaches would also be cleaned. Decisions on whether to clean remote beaches would be deferred until oil stopped coming ashore. The de- cisions then would be to clean the beaches or to allow the oil to bio- degrade, depending upon an assessment of advantages and disad- vantages of each course of action. Oil began coming ashore about August ~. Open water containment systems were not effective on the highly viscous weathered oil. Bar- riers and skimmers were largely effective in keeping oil from entering bays and estuaries. While use of dispersants was deemed to have some effect close to the well site, dispersants were not considered effective for use on weathered oil approaching the Texas coast. South Padre Island was most heavily impacted by the pollution, The oil ultimately reached the U.S. coastline as far north as Matagorda Island. ` Federal response forces will remain active until the threat of oil pollution to the Texas coast abates. Surveillance of'the well site and the oil in the southern Gulf will be continued indefinitely. PAGENO="0033" 2.9 Coordination among federal and state agencies was excellent throughout. The response organization could not have been effective without the field participation of the State of Texas. Amounts expended for response operations from the contingency fund, established by Section 311 (k) of the Federal Water Pollution Control Act, were estimated to be $75,000 to $85,000 per day. At the time of the hearing, $6 million had been authorized to be spent on IXTOC I response, with more funds available if needed. In addi- tion, NOAA testified that in excess of $250,000 of agency funds (made available through reprogramming~) had been expended on initial damage assessment. Cooperation from Mexico has been excellent at the operational level. Difficulties have been encountered in obtaining prompt responses to offers of assistance and requests for informatio~i on the situation at the well site, all of which have been transmitted through diplomatic channels. Overtures had been made to the Mexican Government before the blowout concerning establishing a joint contingency plan for oil pollution similar to that in force with Canada. Negotiations along these lines will continue. Prospects for shutting down the IXTOC I well are uncertain. If the well is not shutdown by February, seasonal changes in wind and current patterns are virtually certain to bring IXTOC I oil again to Texas. The U.S. response to the IXTOC I oil spill was facilitated by two maj or factors: (1) time between blowout and impact on Texas to stockpile and marshal forces . and (2) the natural boom provided by the barrier islands. One or both of these factors might not apply were a comparable blowout to occur on the U.S. outer continental shelf, The IXTOC I oil spill should be the subject of a comprehensive, long-term damage assessment effort. A plan for such an effort is under preparation in the Executive Branch. A number of agencies will be involved with NOAA as lead agency. Funds beyond those appropri- ated for normal agency operations will be required. On the State of. Texas Response panel were Torn Hefferman of the Texas Parks and Wildlife Department, Dick Whittington of the Texas Department of Water Resources, and Frank Cox of the Gov- ernor's Division of Disaster Emergency Services. Also on this panel were J. P. Luby, the County Commissioner for precinct No. 4 in Nueces County and Bob Armstrong, Commissioner of* the General Land Office, a statewide elected official. Following is a summary o~ testimony by the panel: With 16,000 wells drilled offshore in the United States, only 8 spills of more than 100 barrels have occurred. Emphasized was the need to be wary of Mexico's aggressive drilling program and to pro- vide adequate funding for the Coast Guard to respond to this and future spills. The need exists to respond to this and to provide adequate funding for the Coast Guard to respond at the well site. Congress should pass Superfund legislation and this fund should be "tapped" to provide relief for economic losses from this spill. Approximately $22 million should be authorized to effect immediate cleanup of all 56-410-80-3 PAGENO="0034" 30 oiled beaches. (A NOAA report at that time stated that 3100 metric tons of oil remained on the beaches.) The State's recommended priorities were outlined; the on-scene coordinator followed this strategy, which minimized the harmful im- pacts. While the response effort and the cooperation that existed were commendable, there were more vulnerable enivronments slightly north of the northernmost impact to date. Continuing need exists to protect the estuarine habitats. The flow of oil has not yet been halted and large amounts of oil remain in the Gulf of Mexico. Four things re- main to be accomplished: (1) the continued protection of the environ- ment until the well is shut in and the Gulf is free of oil; (2) an assess- ment of the damages, both environmental and economic; (3) mitiga- tion and restoration of environmental damage, if necessary; and (4) relief to businesses that have suffered damages from the spill. The representative of the Texas Parks and Wildlife Department outlined its research and monitoring of population trends by species and relative fishing pressures over time. This information would al- low .indirectly quantifying probable effects of the oil spill. Toxicity tests showed that the oil was toxic to redfish larvae and the impact would depend on the amount of spawning area affected. The potential is very high for a significant reduction in numbers of red drum fry that could escape the oil in the Gulf of Mexico and in the passes through which they must be carried by moving tides to gain access to the nursery areas in the bays. Examples were offered of the success in hatching red drum for stocking in Texas. The maximum produc- tion would be 2.4 million fingerlings. `Since stocking of 40 to 60 mil- lion fingerlings would be required to replace the loss of a year's natural spawn, funding should be provided to enlarge the hatchery to allow production of 25-30 million fingerlings. This would cost $6 million and would mitigate both environmental and economic damage, since the tourist, commercial fishing, and restaurant industries require such resources to maintain their ecoiiQmic status. The State was not satisfied with the relief available to people who have suffered. The Governor had asked for a waiver of Small Busi- ness Administration regulations to get an "openended" economic dis- aster declaration and objected to the $100,000 limit set by SBA. People expect certain hazards-~torna&s, hurricanes, floods-but were not prepared to meet the effects of an oil spill. They should not have to suffer because of a spill in foreign or international waters. State Senators A. R. "Babe" Schwartz, Raul Longoria, Carlos Truan, and Bill Patman and State Representative Hugo Berlanga testified as one panel with most of the testimony delivered by Senator Schwartz, who is Chairman of the Texas Senate Natural Resources Committee and the Texas Coastal and Marine Council. `Senator Schwartz called the committee's attention to a disaster in Texas City in 1941 for which Congress passed compensatory legis- lation. He suggested that the worst oil spill in the history `of the world-in view of the potential of environmental damages-is worthy of similar legislation. He further suggested that the monies expended be replaced from "superfund" when the legislation is passed. He sug- gested that Mexico should bear the ultimate responsibility, especially since Pemex sells oil in Texas at OPEC prices. PAGENO="0035" 31' Senator Schwartz continued by referring to a report by Dr. Roy Hann of Texas A & M University that concluded that more could have been done in terms of `cleanup. He asserted that the oil did not reach Texas for 70 days and the response effort should have been bet- ter prepared. He particularly emphasized Dr. Hanu's criticism of the decision to leave approximately 3700 tons of oil on the beach. Sen- ator Schwartz expressed a fear that a "leave the oil on the beach philosophy" would become the accepted level of performance for coastal oil spill response and stated that the oil would return to the Gulf. This. could lead to long-term mi'croch~mical damage, he claimed. Senator Schwartz urged passage of a superfund bill to deal with future spills and stated his emphatic support of such legislation, Senator Truman emphasized the economic effects and stated that much of the economy is dependent on the environment. He felt that the extent of future losses had not been determined. He also criticized the Coast Guard for not expending the money necessary to provide the maximum amount of protection and cited the need to maintain the environment and determine injuries. He suggested that the fed- eral government accept the financial responsibility for claims and bring action against those making a profit out of the oil that has caused this problem. When questioned regarding the 1947 Texas City disaster, Senator Schwartz stated that claims were paid. from appropriated funds and that the federal government assumed responsibility for `the disaster since a national purpose was involved. The first panel `on economic effects consisted of the Honorable Glen McGehee, Mayor of South Padre Island (who appeared on behalf of himself and the Mayor of Port Isabel, the Honorable Quirino Mar- tinez) and Captain Richard Derni.is, charter boat captain, who ap- peared on behalf of citizens of Port Isabel and South Padre Island. Mayor MeGehee stated that the first' impact was .the result of ad- verse publicity, `and it did not take long for the effects of the oil to be felt. Examples quoted by the Mayor were: (1) the Hilton Sea Jsland- $118,500 in cancellations in August; (2) survey of Port Isabel/South Padre Island Chamber of Commerce-August, 1978 compared to Au- gust, 1979 showed that almost 2/3 of the businesses experienced moie than a 50 percent reduction; and (3) Port Isabel Merchants Associa- tjon-over % pf~66 businesses reported over a 50' percent drop ~11 biisi- ness. Numerous `other examples' of the number of people employed and losses were presented. The Mayor also emphasized the need to monitor the spill effects on fish and shrimp. He requested that federal and state governments initiate positive programs to attract the tourist trade back to the Gulf Coast. He stated that the residents enjoyed a good relationship with Mexico and felt "they would do the right thing if approached properly." Of particular, importance was the feeling that the spill should not be used in negotiating with Mexico to secure better prices for oil and gas benefitting the whole country and victimizing these injured citizens. Captain Dennis presented figures that showed projected sales at his marina down 54 percent in August. His charter business showed PAGENO="0036" 32 similar losses. Also offered were examples of olrer 50 percent decreases in room rentals for a motor lodge and various other reductions in business income. Captain Dennis expressed appreciation for the prompt action taken by the Small Business Administration, but said that loans are not a solution. He omphasized that natural disasters are expected, but this spill left the community helpless. He requested economic help and help in mitigating potential environmental damage. He criticized the de- vices used to' protect the crucial `passes since they are not designed to capture oil suspended beneath the surface. The second panel on economic effects included H. A. "Dusty" Rhodes of the Executive Director of the Gulf Coast Conservation Association; Dana Bennett, City Manager, Port Aransas; Witcomb 0. Jones, Di- rector of `Administrative Services, City of Brownsville; the Honorable Dennis Dreyer, Mayor of Port Aransas; and Jim Atwill representing Port Aransas businessmen. Mr. Atwill stated that a survey of the small motel/hotels in Port Aransas (w'hich are usually 100 percent occupied) showed a 30-40 per- cent decrease in occupancy the second week of August, 50-60 percent decrease the third week,' a 90 percent decrease the last week, and a ~T0-80 percent decrease over the Labor Day holiday. Condominiums showed decreases of 20-28 percent, 30-40 percent, and 80-90 percent respectively. Retail businessmen have reported a 50 percent drop and restaurants a 50-60 percent drop. He also gave examples of declines in charter boat and party `boat business. Mr. Bennett said that normal projections for the growth of city revenues would support a 15-20 percent growth in sales tax, hotel/ motel tax, court costs, related fines, and building and inspection fees. He said that their `present revenue estimates do not effect a normal growth trend. He recommended (1) small businesses be fully reimbursed for losses; (2) cities be given priority consideration for funds in CEIP; (3) EDA, priority; (4) raising SBA loan limits over $100,000; and (5) the establishment of a permanent funding source to compensate local governments, businessmen, and citizens in the' future. Mr. Jones stated that there c~uld be an economic "ripple" effect on inland communities and stressed the need to improve cleanup technology. Mr. Rhodes did not point to any specific damage but expressed a concern over `the probability of long-term environmental damage. He reiterated the Texas Parks and Wildlife Department's recommencia- tion for additional funding for a saltvvater fish hatchery for red'fish to mitigate losses. The ports were represented on a panel by Harry Plomarity, Port DirectOr, POrt ~of Corpus Christi; COlonel E. K. Young, U.S. Army (Retired), Port Director, Port `of Mansfield; Robert T. St.' John, Chairman, Willacy County Navigation District; and Bill Sky-Eagle, General Manager, Corpus' Christi Oil Spill Control Association. Mr. Polmarity said that the response had not hampered port activi- ties, but cautioned that totally closing Arkansas Pass in the event of a major concentration of oil could affect refineries and grain exporters in the area. Colonel Young stated that Port Mansfield ha'd a unique problem. Mansfield Cut was completely closed by oil booms, and shrimpers~ PAGENO="0037" 33 fishermen, and crew boats servicing offshore drilling rigs had to-go' elsewhere. That effectively shut down the port for about two week$. Since the Navigation District owns some 2,000 acres and, the com- mercial businesses and residences are on the property~ there have been some problems in obtaining Small Business Administration assistance since title to the property cannot be obtained. The Port had also re- ceived virtually no income since August 6 due to businessmen relocat- ing and the shutting down of a seafood processing plant that normally processes 2 milliOn pounds of shrimp per year. The Navigation District operates the utility district and the loss of revenues has affected their service. Also., businesses cannot pay for their leases or utilities since their revenues have dropped severely. The seafood plant was funded by EDA. The water distribution sys- tem and sewer system were' funded through FHA. Colonel Young contended that the United States should protect its interest in the community. Mr. `Sky-Eagle had been involved in cleanup activities' since the be- ginning of the response. He generally described the occurrences in the area and the impact on businesses. He further stated that the economic impact is substantial and will continue at least until the threat of the impacted beaches is diminished considerably. He further stated that with the exception of gulf shrimpers there has been little impact on fishing. Gulf shrimpers `have had to drag primarily during daylight hours to avoid bringing up oil in their nets. Ralph Rayburn, Executive Director of the Texas Shrimp Associa- tion; Pat Pace, Member of the Board of the Texas Seafood Di~tribu- tors Association; a'nd J. C.' Harlan, President~ Texas Seafood Pro- ducers Association, were on a panel representing commercial fishing interests. Mr. Rayburn stated that his organization had been particularly con- cerned about consumer confidence in seafood products and had initi- ated programs such as avoiding areas where there are oil accumula- tions and throwing back catches that appear to have had contact with oil. He said that the State Health Department and Food and Drug Administration had helped in this. There had been no shrimp contami- nated o,r tainted due to the Campeche oil spill. Mr. Rayburn expressed concern over oil in the water column which might be toxic in some degree to shrimp larvae. He emphasized the need for monitoring the situation. He stated that the spill has reduced the area available for shrimping but could not be termed a major economic loss at this time. He re-emphasized his concern for the larvae and the nursery areas. Mr. Pace presented the strong concern of bay fishermen. since many finfish and shrimp spawn in the Gulf. He asked if funds would be available to monitor the industry in the coming two to five years of uncertainty. Mr. Harlan expressed a concern over oil in the form of tarballs entering Arkansas Pass and said' he had seen some "pop up" in the bay where he had not seen any before. He stated that he had never seen tarbalis in the bays over the last 17 years, but he `had seen some recently. He also mentioned that shrimp larvae spawn in the Gulf and stated his concern over the effects on the larvae. PAGENO="0038" Mr. Pace also stated that in the past he had never seen tarballs in the back bays and stated that better technology was needed to protect the passes. Both Mr. Pace and Mr. Harlan were concerned that certain species ~of fish were not present in the quantities that had been noted in the past. The panel on Environmental Effects consisted of Dr. Hans Suter, a member of both the Audubon Society and Sierra Club; Steve Frish- man of the Citizens for Estaurine Planning; Dr. Pat Parker of the University of Texas Marine Science Institute; Dr. Henry Hildebrand, marine biologist; and Mrs. Sharron Stewart, Member, National Ad-. visory Committee on Oceans and Atmospheric and a Commissioner of the Texas Deepwater Port Authority. Much of this testimony focused on environmental problems and the need for damage assessment. Of particular concern was the lack of knowledge concerning the disposition of oil in the water column and the existence of polynuclear aromatic components in the oil which is now in the Gulf. Questions were also raised concerning specific methods of response and their relative value. Mr. Frisliman testified that he could point out the existence of oil that had escaped the `booms, entered the passes, and remained in the bays. The potential effects on various birds and endangered species were also highlighted. Mr. Morris D. Busby testified on behalf of the Department of State. Mr. Busby is Director, Office of Oceans and Polar Affairs, Bureau of Oceans and International Environmental and Scientific Affairs, De- partment of State. Mr. Busby stated that the Department of State is represented on the National Respohse Team and, because of the peculiar circum- stances of the IXTOC I spill, had been quite active in TOam delibera- tions and activities. In particular, he noted three actions undertaken by the Department. First, a continuing dialogue with the Government of Mexico was car- ried on to maintain a generally cooperative relationship and devel op lines of communication and cooperative mechanisms nece~sary to deal with a spill of this magnitude. He stated that communications are good, common interest is perceived on both sides, and expeditious ac~ tion has been taken in almost all cases affecting operational matters. Second, the U.S. has' proposed moving ahead to conclude a joint contingency plan with Mexi~o, taking the IXTOC I'experience into ac- count. Discussions began on this matter in 1977 and, before the blow- out, the `U.S. presented a draft plaii and the two governments had ~ireliminary discussions. He expressed the hope that full discnssions could be conducted in the near future, leading t'o conclusion of a plan. Third, the Department is concerned with the issue of compensation, both for cleanup and containment `operations and for' damages oc- curring to public and private property. The Department proposed to Mexico that discus~ions begin" on that question. The representation waA not very well received in Mexico City. While this was disappoint- ing, the Department is,hopeftd,that discussions on this issue ean~ begin in the near future. PAGENO="0039" Mr. Busby elaborated on the good working relationship with Mex- ico on operational matters; e.g., getting U.S. experts to the well site, authorizing the Strike Team to help in cleanup operations at the well, and arranging overflight and landing rights for U.S. surveillance air- craft. He emphasized that this is quite separate from any discussions on the question of compensation. Mr. Busby, supported by Captain Corbett, expressed the concern that insistent inquiries about Mexican operations at the well site, such as drilling relief wells and attempting to cap the blowout, might re- sult in our Strike Team being asked to leave. He did say that efforts would be made through diplomatic channels to obtain more informa- tion than is now available. He stated, in response to a question, that he would prefer not to disclose at what level discussions with Mexico are being pursued or the precise subjects of discussions. He added that, on a daily basis, a va- riety of subjects are under discussion on a variety of levels. With respect to additional U.S. response forces being located at the well, Mr. Busby emphasized that the well, being on the Mexican con- tinental shelf, is clearly within Mexican jurisdiction. He said that Mexico has its own priorities there, probably related chiefly to shuttin down the well, and that cleanup operations near the well site coul interfere with those priorities. He added that the Mexicans believe that they have obtained at the well site the best technical advice avail- able, some' of it from American firms regarding shutting the well down. To understand the Mexican perspective, the situation should be regarded as though the roles of the U.S. and Mexico were reversed. The final witnesses were Professor Jordan Paust of the University of 1-Touston and Professor Gunther Handl of the University of Texas. Both are professors of law, specializing in various aspects of inter- national law. In their statements, Professor Handl concentrated on the international legal conseqeunces of the oil spill, while Professor Páust focused on the issue of jurisdiction and the right to bring suit. Both filed' statements for the record, which provide' the legal analyses in some detail, with citations to applicable law. The conclusions of the witnesses as to the law pertaining to IXTOC I may be summarized as follows :. States have the responsibility to insure that activities within their jurisdiction or control do not cause damage to the environment of other states or areas beyond the limits of national.jurisdietion. The Mexican government has subscribed to this principle through public statements of Mexican officials. Some case law exists on this point, notably the Trail Sme7ter case, which involved arbitration between Canada and the United States over air pollution originating in Canada and affecting the United States. Proof of negligence would be required to show that the duty not to cause extraterritorial damage `had been violated. A finding of liability based on negligence would logically entail renaration of damage costs. . . .. The trends, in customary international law are in the direction of accepting strict liability for damage caused as a .result of offshore exploration or production actiivitães. PAGENO="0040" 36 If injury is suffered by the U S Government and by its private citizens, and if the Government interests are preponderant, the United States in bringing an action under international law can at the same time argue the claims of its private citizens The United States and U S Courts have iurisdiction under iele- v'tnt international and domestic laws to press or entertain ci `urns against PEMEX or Mexico, Because, in the circumstances, the `icts or omissions are commercial and private in nature, PEMEX or Mexico could not obtain sovereign immunity or "act of state" deroga- tions from lurisdiction The burden of proof with regard to claims of sovereign immunity or for application of the act of state doctrine is upon the state or state entity making such claims Subsequent to the loint hearings in Corpus Christi, legislation was mtroduced in the House of Representatives pertaining to damage suffered as a result of the IXTOC I incident In this regard, see the discussion of H R 5577 in the section of this report devoted to ac tivities of the Subcommittee on Coast Guard and Navigation Oversight on Competztvve Shappvang and Great Lakes S1~ippang Prob- ?ems On May 1 and 2, 1979, the Committee was represented at the U S Maritime Administration sponsored review of the Competitive Ship ping Research and Development Program attended by carriers repre sentatives at the National Bin e'iu of Standards facilities in Gaithers- burg, Maryland Panel presentations of continuing studies, listed below, were fol- lowed by workshops The Maritime Administration identified its current effort as one seeking to identify causes rather than addressing the mere symptoms of problems and in this effort was seeking public participation earlier in the development process than has been its p'ist practice Additionally, this Competitive Shipping Program has heretofore concentrated on internal business mechanisms Its focus has shifted to external industry wide factors Hopefully, this total effort will ef feet changes in industry procedures and in government policies to improve the U S flag competitive position Public or industry partici pation wac assured throug~h addition'il workshops and the Industry Advisory Councils established to assist the various study contractors Panel presentations consisted of Shipping Operations Information Systems; International Data Communications Systems; Transportation Data Interchange Systems; Shipboard Management Information Systems, Ship Data Communications Systems, National Fleet Productivity Analysis, American Flag Competitive Assessment, Maritime Corporate Financial Performance, and Government Regulatory Cost Impact. * * * * * * * On May 16, 1979, the Committee was represented at a meeting of the Great Lakes Basin Commisbion at Milwaukee, Wisconsin, for the presentation and discussion of that Commission's economic review of PAGENO="0041" 37 the Navigation Season Extension Program authorizeu oy Congress for the Great Lakes through September 1979. The Commission report, prepared for the Governor of Michigan, inquired into and reviewed projections for: National Economic Devel- opment Benefits and Costs; States Cost Sharing; States Benefits and Costs; and Alternatives to Winter Navigation. It concluded that even with the Sault Ste. Marie lock replacement alternative, winter naviga- tion could still be economically feasible-and that it might be cost efficient to implement the winter navigation program before the lock re- placement but equivocated to say that there may be alternatives for resolving the capacity constraints that are more economically desir- able than winter navigation. The Commission Economic Summary advised that: The present benefit cost ratio has been estimated by the Pentagon at 2.75 to 1. This means for every federal dollar invested, $2.75 in benefits would be expected. An 8 to 1 benefit costratio was estimated in 1970, when Congress first authorized winter navigation. Benefits.-According to the U.S. Army Corps of Engineers bene- fits include reduced transportation rates for cargo through more effi- cient use of ships, stockpiling cost savings, and increased and stable employment in the shipping industry. According to an economic review conducted by the Great Lakes Ba;sin Commission, these bene- fits are overstated, and depend on variables not yet fully considered. Costs.-The actual. cost of winter navigation remains uncertain be- cause the environmental costs are not known. Known costs include construction, operation, and maintenance of winter navigatipn facili- ties, increased ship maintenance, labor, and insurance costs. Under President Carter's proposed water policy, the Great Lakes states will have to pay 5 percent of these costs. According to the economic review conducted by the Great Lakes Basin Commission, each Great Lakes state would have to pay $3.2 million dollars. As to Environmental matters that- To this date a detailed comprehensive evaluation of winter navi- gation's environmental impacts has not been conducted. The Great Lakes Basin Commission coordinated a series of environmental studies during the Winter 1979 Demonstration Program on the St. Marys River. The studies looked at the effects of winter navigation on water- fowl and raptors, and the physical, ecological, and biological effects of ship-included waves in an ice environment. Fieldwork has been completed and final reports will be received by the Corps by August 1, 1979. As to Engineering matters that- Ships are à~ble to traverse the Upper Great Lakes in winter with the help of Coast Guard icebreakers, bubblers, ice booms and steam devices. As to Conclusions that- Additional factors will have to be considered before a final conclu- sion can be reached in that both costs and benefits have been under~ stated and overstated, there was uncertainty as*th the degree and man- ner that states would be expected to share in development costs under pending Administration proposals, alternatives to season extension were not fully integrated/considered, needed local and state invest- ments in port facilities were not developed. PAGENO="0042" 38 A report with respect to the above matters was made to all Great Lakes Members of this Committee. * ~* * * * * * During the period March 5-7, 1979, a Committee representative was an active participant in an Anticipatory Planning Workshop of the tT.S.-Canada International Joint Commission's Science Advisory Board convened in Windsor, Ontario. The Workshop objective was to identify major current and emerging problems, to identify the impact of one activity on others, and so to enhance the ability of the IJC to advise the governments of the United States and Canada with respect to management issues affecting the Great Lakes. The Transportation Panel identified for discussion and position development the following major problem areas: Length of Navigation Period; Port Planning; Rate and Regulatory Policies; Channels and Locks; Institutional and Jurisdictional Problems; Intermodality; Lake Hydrology and Hydraulics; Public Involvement; Environmental Impacts; Transportation Futures; Transportation and Economic Growth and Development, Intersystem Relations; and Transportation and Recreation. Though interacting initially on all these issues, the Committee participant worked on position papers covering Rate and Regulatory Policies and Institutional and Jurisdictional Problems and addressing user pay or cost sharing policies, operational services and their stand- ardization, interstate shipping constraints, shipping conferences and shipper council growth, shipping rate filing, pilotage impositions, and Seaway Internationalization. This workshop was in large part an experimental process to deter- mine if it would be a useful tool to the LJC in its efforts not only to solve old problems but, more importantly, to address foreseeable impediments and future issues in a non-adversary forum. In the course of discussions it was noted that with other legislative issues, Canada is considering a National Port Act that would seek to rationalize port policies and a National Transportation Act that would focus on national, regional, social and economic conditions (including user pay concepts). It was further noted that the capacity of the St. Lawrence Seaway will be reached by 1986 and that estimated expenditures of some $100 million might extend that capacity to the year 2000-recovered by Seaway tolls. In this regard, one panelist advised that Canada does not necessarily promote the most econom- ically efficient form of transportation because it must also recognize social and other business needs; in other words, each segment must operate economically but need not be justified on a benefit/cost basis. An apparent anomaly was noted with respect to U.S. ocean carriers PAGENO="0043" who receive operating subsidies in that toUs or charges that ftFO payable to the government will increase operating costs and subsidy payments from the government. For the Seaway system it was foreseen that eventually locks of some 1500' length and 140' width should he considered to ~c~ommodate ships of 1200' x 130'. Though locks would have 35' of water "over the sills", channel drafts of 27' would not be increased much because of the unacceptable costs of dredging-aside from environ~mental issues. All material developed was deposited, with the IJO Secretariat at Windsor, Ontario, for assembly and correlation. SUBO0MMrrrEEI ON MIniCHANT MARINB Bills reported, passed, and now law 2 Bills reported Bills considered 13 Hearings held (days) Markup sessions (days) 1 LEoIsLATIvl~ AcTIvITn3ls H.R. 2426 (8.1019)-Maritime Authorization, Fiscal Year 1980 runros1~ To authorize $438~540,000 for certain United States* maritime program's in the following manner: $101 million in construction- differential subsidies (CDS) for fiscal year 1980. This, together with a cary over wil provide a CDS program level of about $124 million. These funds will be used to assist in the construction of one LASH (Lighter Aboard `Ship) vessel for the Waterman Steamship COmpany, and t'hree di~y bulk vessels. The LASH vessel is a replacement obliga- tion under and ODS (operating-differential subsidy) contract. Phe three dry bulk vessels are to be constructed under an initiative pres- ently before the Congress. Operating-differential subsidy (ODS) of $256,208,000 which, when augmented by $50,506,000 brought forward from 1979, a program level of $306,714,000 which is allocated as follows: $243,071,000 for the subsidized operation of 147.4 ship years of liner vessels, including four passenger/cargo vessels; $28,383,000 for 19.2 ship years of bulk ves- sels; and $35,260,000 for the payment of prior year obligations. Further authorization were made for the following: $16,360,000 for research and development; $25,874,000 for maritime education and training expenses, including $17,132,000 for the Merchant Marine Academy at Kings Point, New York and $6,785,000 for State maritime schools; $1,957,000 for supplementary training courses; $6,377,000 for National Defense Reserve Fleet; $35,598,000 for development and use of waterborne transportation systems; and $29,221,000 for general administration of the Maritime Administration, Department of Commerce~ PAGENO="0044" 40~ SUBCOMMITTEE IIEARr&GS Hearings were held on March 1, 7, and 15, 1979, and testimony was received from: Honprable R. James Woolsey, Under Secretary of the Navy; Honorable Robert J. Blackwell, Assistant Secretary of Com- merce for Maritime Affairs; and representatives from the Seafarers International Union; National Marine Engineers' Beneficial Asso- ciation; Masters, Mates and Pilots International; National Maritime Union; Moore-McCormack Resources, Inc.; Lykes Brothers Steam- ship Co., Inc.; Delta Steamship Lines, Inc.; Council of American Flag Ship Operators; Moore-McCormack Lines; American President Lines, Ltd.; Farrell Lines, Inc., and Waterman Steamship Corp.; Shipbuilders Council of America; Transportation Institute; Joint Maritime Congress; and the American Maritime Association. SUBCOMMITTEE MARKVP On April 4, 1979~ the Subcommittee held markup on H.E. 2462. Eight amendments were ~ffered, and the Subcommittee accepted the following four amendments: (a) that no funds may be paid to sub- sidize the construction of any vessel which will not be offered for enrollment in a Sealift Readhiess Program approved by the Secre- tary of Defense; (b) that in paying construction subsidy, the rate otherwise applicable may be reduced by 5 percent unless the Secre- tary of Commerce, in his discretion, determines that the vessel to be constructed is part of an existing or future vessel series; (e) that ~no funds may be paid for the operation of a vessel which is not offered for participation in a Sealift Readiness Program, and (d) authorize $~3.5 million to repair and equip a suitable replacement for the T/S Bay State which has been declared unusuable as a train- :ing vessel. A Comthittee amendment was accepted to place a ceiling of $1.5 bil- lion on the aggregate amount of new loan guarantees authorized pursuant tothe Title XI guarantee program. flTLL CO tMITTEE MA1tI~1JP Honorable Gene Snyder offered an amendment to allow an operator, under a five year experiment, to suspend his subsidy contract under certain conditions for a minimum of 6 months. The amendment was not voted on at the markup, and additional hearings were ordered for Mr. Snyder's amendment. On May 15, 1979, the Committee ordered H.R. 2462, as amended, reported to the House. Additional hearings were held on amendments to H.R. 2462 subsequent to the bill being reported. On May 24, 1979,. the Subcommittee on Merchant Marine held a day of hearings and received testimony from the Maritime Admm- istration, the Shipbuilders Council of America, Sea-Land Service, Inc., American Maritime Association, Joint Maritime Congress and Matson Navio'ation Company. Generally~ the witnesses and members expressed th~' view that the American flag merchant marine would benefit from the greater flexibility offered~ by Mr. Snyder's amend- ment. However, concern was expressed that subsidized vessels would PAGENO="0045" 41 ~mfa1rly compete with unsubsidized domestic fleet vessels, and amend- ments were suggested to ameliorate the perceived imbalance. An ad- ditional amendment was also considered which would allow certain TLS.-flag operators of foreign built ships to transship containers in the coastwise trade which are in foreign commerce and which are the property of the carrier. The House considered H.R. 2462 on July 27, 1979, and accepted an amendment by Mr. McCloskey which would require that no funds be authorized to construct a vessel which will have a subsidized manning level greater than 50 percent above the minimum deter- mined by the Coast Guard. Mr. Snyder offered the amendment to allow certain subsidized op- erators to temporarily go off subsidy. Mr. Murphy offered an amend- ment to the Snyder amendment to require a proportional payback of the construction subsidy for the time during which one of these ships would be engaged in any preference trade from which a sub- sidized vessel would otherwise be excluded by law or contract. The amendment, as amended, was agreed to. Mr. Snyder offered a further amendment permitting any vessel documented under the laws of the United States which is built foreign, and carrying cargoes in foreign commerce to transship such foreign cargoes in containers between coastwise points where the purpose is to transfer those containers to other vessels owned by the same operator. This provision was amended so that it would exclude movements be- tween points in the contiguous United States and points in Hawaii, Alaska, Puerto Rico, and United States territories and possessions. The amendment was agreed to. Mr. McCloskey offered an amendment that no funds authorized for OIDS be paid for any item of wage costs that is paid to any organiza- tion which engages in lobbying activities. The amendment was agreed to. Mr. Emery offered an amendment to provide $1,998,000 to State `marine schools for the purpose of purchasing fuel for training vessels, The amendment was agreed to. H.R. 2462, as amended, passed the House on July 27, 1979. Subse. quently passage was vacated and S. 640, a similar Senate passed bill, was passed in lieu after being amended to contain the language of the TTniis~ bill as passed. HOUSE-sENATE CONFERENCE The differences between the Senate bill and the House bill were resoiv~'d in conference on October 12,1979. 1. The Senate agreed to the House amendment providing a vessel built with CDS must be offered for enrollment in a ,Sea,lift Readiness Program. 2. The Senate agreed with House amendment providing that the CDS rate may be reduced by 5 percent if, the vessel is determined by the S~cretary of Commerce not to be part of a series construction. 3. The TTorise agreed to the Senate objection to the amendment pro- liihiting CDS for any vessel which will have a subsidized manning level 50 percent above the minimum determined by the Coast Guard. PAGENO="0046" 42 4. The Senate agreed with the House that a vessel receiving ODS must be offered for enrollment in a Sealift Readiness Program. 5. The Senate agreed with the House in permitting the operator of a vessel receiving ODS to suspend his contract from 1 to 5 years. 6. The House agreed with the Senate objection and receded from its amendment that no funds may be paid to the Transportation Institute and other organizations engaging in lobbying activities. 7. The Senate agreed with the House to $3.5 million for the T/S BAY STATE. 8. The Senate agreed with the House to add $1,198,000 for the pur- chase of fuel oil for state maritime academy training ships. 9. The House agreed with the Senate not to place a $1.5 billion ceiling for Title Xl loans. 10. The House agreed with the Senate to amend section 30 of th~ Merchant Marine Act of 1920 allowing States, the District of Colum- bia, Puerto Rico, and the territories and possessions of the United States to be mortgagees of preferred ship mortgages under the Ship Mortgage Act. 11. The Senate agreed with the House not to add shoreside fishing facilities as an eligible category for the Capital Construction Fund and Title XI. 12. The Sennte agreed to the House amendment permitting foreign built, U.S. documented vessels to carry foreign origin and foreign destination cargo between coastwise ports in the continental United States, with the provision that the time period would be shortened 6 months from October 1, 1984, to April 1, 1984, and that the follow- ing proviso would be added to the amendment: "shall apply only to vessels which that same operator owned, chartered or contracted for the construction of prior to the date of enactment of this proviso." ADOPTION OF THE CONFERENCE REPORT On November 2, 1979, the Conference Report on S. 640 was agreed to by the House. The Senate agreed to the Conference Report on November 5, 1979. S. 640 became Public Law 96-112 on November 16, 1979. H.R. 3055 (S. 199)-Shipping Act Amendments of 1979 Illegal rebating or secret kickbacks offered to attract more cargo in the U.S. liner trades threatens the stability and unimpeded flow of our ocean commerce. Current laws do not provide the Federal Mari- time Commission the necessary power to enforce prohibitions against rebating. The bill would amend the Shipping Act, 1916 in several particulars. The bill contains, provisions that would authorize suspension of the tariffs of ocean carriers that are found to have engaged in rebating or that fail to comply with FMC investigative demands regarding possible rebating. Section 3 of the bill would permit the EMC to suspend for up to twelve months the tariff of any carrier found to have engaged in rebating, in addition to subjecting such carrier to an increased civil penalty of $25,000 for each shipi-nent on which a rebate was paid. Section 4 of H.R. 3055 requires a ce~rtiflcation by PAGENO="0047" 43 vessel operating common carriers and permits the Commission to require a certification by other persons subject to the Shipping Act, 1916 that the carrier or other person is implementing a corporate policy against rebating and will cooperate with the Commission in any rebating investigation. In addition, Section 5 of the bill would authorize the FMC to suspend indefinitely the tariffs of carriers that fail to comply with its demands to produce documents, answer in- terrogatories, or provide other types of information. In either of these circumstances, the President would be statutorily empowered to overturn the FMC's determination if he finds that such action is required for reasons of the national defense or the foreign, policy of the United States. Similar legislation, H.R. 9518, was introduced in the 95th Congress, and passed the House on March 22, 1978, by a vote of 390-1. On October 6, 1978, the legislation unanimously passed the Senate. The bill, on November 4, 1978, was returned with a veto message. The President's message assigned two reasons as the basis for reject- ing H.R. 9518. First, his direction to the Inter-Agency Maritime Policy Task Force that it ". . . would provide by an early date, a set of rec- ommendations that will address both the substance or our rebating laws as well as procedures for enforcement . . ." It was originally intended and scheduled that the Administration's Maritime Policy Task Force was to complete its work and report to the President by approximately October 1, 1978. This deadline passed and the task force had not yet submitted to the President its recom- mendations addressing the "substance of our rebating laws, as well as procedures for enforcement" which the President had said on November 4, would be "forthcoming at an early date". The second rea- son reflected the President's reliance on shipping negotiations led by the State Department and held between the United States and the Con- sultative Shipping Group (CSG) of European maritime countries and Japan during November 1978. The President expressed hope that those discussions would establish a cooperative shipping regime which would make unnecessary the remedies provided by H.R. 9518. The US-CSG talks were completed in November of 1978, but there had been no release of documents by CSG countries which are so essen- tial to effective enforcement of our prohibitions against illegal rebat- ing. The Inter-Age~ncy Maritime Policy Task Force had not addressed the substance or the enforcement procedures of our rebating laws. Consequently, the Federal Maritime Commission, as the major agency responsible for anti-rebating enforcement, must perforce discriminate against U.S. shipping operators since it is only against them that they can `effectively insist on production of documents. The Senate took up similar legislation and passed S. 199, a bill to amend the Shipping Act, 1916, to strengthen the provisions prohibit- ing rebating practices in the United States foreign trades on May 23, 1979. The Subcommittee on Merchant Marine held one day of hearings on May 16, 1979. This hearing supplemented the 7 days of hearings the Committee held in the 95th Congress. The Subcommittee received comprehensive testimony from the Federal Maritime Commission, PAGENO="0048" 44 Maritime Administration (Department of Commerce) , Department of Justice, Department of Transportation, Sea-Land Service, Inc., Na- tional Maritime Council and the Joint Maritime Congress The Na- tional Industrial Traffic League and the Council of European and Japanese National Shipowners' Association submitted written corn ments on the bill All of the witnesses generally conceded that disparity persists in the enforcement of present antirebating laws against U S as opposed to foreign flag carriers On May 31, 1979, the Committee met in markup session, discharged the Subcommittee and unanimously reported H R 3055 to the House with technical amendments. The House passed H.R. 3055 under Sus- pension of the Rules on June 4, 1979. Subsequently, this passage was vacated and 5. 199, a similar Senate-passed bill, was passed in lieu after being amended to contain the language of the House bill as passed. 5 199 became Public Law 96-25 on June 19, 1979 H R 4789-Omn~abus Maratame Ball H R 4769, introduced on July 12, 1979, is the most broad based and comprehensive review of United States maritime policy ever under- taken by the Congress It establishes ~ new U S maritime policy, completely rewrites the basic statute regulating U S shipping, makes substantial changes to the maritime subsidy programs administered. by the Department of Commerce; completely restructures tax policy affecting the treatment of U S owned shipping, whether under U S or foreign flags, and restructures maritime policymaking functions within the executive branch During the First Session of the 96th Congress, the Merchant Ma rine Subcommittee held 23 days of hearings, including a day of field hearings in both New York and Baltimore, and heard from 73 witnesses TITLES I AND II Title I Findings and Purposes This Title marks a shift in direc- tion for U.S. maritime policy, from a primary focus on the merchant marine as a military auxiliary to an emphasis on its contribution to the efficiency and gi owth of U S foreign trade as its main role in n'a tional security, as well as the basis for its national defense role This Title also expresses the intention of Congress to minimize direct Gov- ernment regulation of the ocean shipping industry, and to centralize maritime policymaking in the Executive Branch There was only occasional mention of Title I in the testimony on the bill Most of these references were highly supportive, as for instance, " Title I goes to the heart of the needs of the country which our entire maritime industry must serve" Other testimony noted some confusion and contradictory language between Title I and related sections elsewhere in the bill, and urged that these be harmonized Title II Regulation of International Ocean Shipping A Summary The feder'il maritime regulatory scheme has been viewed as being unnecessarily elaborate and in conflict with the way ocean transport is regulated internationally. The result is undue inhibition of the in- PAGENO="0049" 45 dustry's competitive ability. Currently, the FMC must approve prac- tically all changes in service proposed by liner operators or shipping conferences serving TJ.S. trades, on a case-by-case basis. Instead, H.R. 4769 would allow otherwise anticompetitive agree- ments to go into effect 30 days after filing subject to the suspension power granted the FMC and immunizes the agreements and conduct arising from these agreements from the operation of the antitrust laws. Dispute resolution is, wherever possible, left to commercial, problem- solving mechanisms. H.R. 4769 also proposes to reshape the existing regulatory regime m other fundamental ways: conferences serving U.S. trades would be permitted to restrict membership (although national shipping lines must be provided "reasonable and equal terms and conditions for ad- mission and re-admission") and undertake various concerted activi- ties to rationalize service. The bill, recognizing the need to balance the strengthened confer- ences, provides for shippers' councils. Such councils are common in many foreign countries, where they meet with conferences on behalf of their members to consult on rate levels and terms of service, handle complaints and work to resolve disputes. The relationship of coun- cils and conferences is in many ways like that of labor and manage- ment bargaining in the U.S. Such shippers' councils, now illegal un- der U.S. antitrust law, are granted immunity by section 203 of the bill. The FMC's more limited role in this new environment is spelled out in sections 207 through 209. The Commission would be provided access to all the minutes and records of council and conference proceedings, and can disapprove any agreement which i.s reached through proce- (lures contrary to those specified in the law. However, the timetable for Commission challenges of such agreements is substantially speeded up; and the burden of proof is placed on those who protest proposed agreements. Section 209 also directs the Commission to prescribe a new system of uniform commodity descriptions and classifications for use in filing rates. Section 210 of the bill incorporates the text of the Controlled Car- rier bill, which was already passed by Congress in 1978. It is designed to provide the FMC with regulatory tools for assuring that U.S. shipping lines are not victimized by carriers controlled by foreign government and not operating according to traditional commercial principles. Section 211 sets a bonding requirement for ocean freight forward- ing companies. Section 212 lists a series of prohibited acts by shippers or carriers, which is primarily aimed at eliminating unauthorized rebating, un- fair competition, retaliation or discrimination. Procedures for issu- ance of subpoenas, discovery of records, obtaining of reparations and assessment of penalties are listed in sections 213, 214, and 215. The final two sections, 216 and 217, authorize the FMO to issue ap- propriate regulations and repeal the provisions of the 1916 Shipping Act which are in conflict with the bill. B. Hearings The proposals in Title II were extensively discussed in the hearings on the bill. 56-4i0-80----4 PAGENO="0050" 46 The President, in his July 20, 1979, letter to Chairman Murphy, en- dorsed creation of shippers~ councils, proposed a shortening of time tables for FMC action and urged specification of "a broad group of conference agreements with the least anti-competitive impact that are presumptively approvable by the FMC." The President opposed the idea of closed conferences or practices which permitted deferred re- bates. Testimony from the executive agencies revealed a range of differing perspectives. The Administration, through the Maritime Administra- tor, voiced general approval of the `thrust of the bill: "While there have been occasional disagreements in the past among some members of the legislative and executive branches on issues concerning maritime policy, I know we can all agree on two matters of general principle: "First, the need to streamline and simplify mechanisms for govern- mental regulation of the liner industry; and second, the need to foster a regulatory environment in which United States flag liner operators are not placed at a disadvantage vis-a-vis their foreign competitors." The Federal Maritime Commission spokesman expressed consider- able. reservations about the bill's proposed limitations on Commission authority, and presented the Committee with an alternate draft bill which retained and, in several instances, strengthened the Commission's regulatory authority. The Justice Department questioned the expanded antitrust exemp- tion the bill would extend to conferences, and was similarly dubious about the restrictions on the Federal Maritime Commission's regula- tory powers. The Department did, however, accept the idea of shippers' councils, but urged that "the activities of such associations should be closely monitored to ensure that they do not adversely affect the public interest." The bill's provisions for conferences and shippers' councils drew a. mixed response from witnesses representing shippers' associations. One witness, from the Natibnal Export Traffic League., fully sup- ported b'oth concepts. Most other shippers endorsed shippers' councils but opposed strengthened conferences, believing them to be anti- competitive. The National Industrial Traffic League opposed both councils and closed conferences. The League urged the Committee to consider instead an alternative approach, based on provisions of the Interstate. `Commerce Act for extension of antitrust exemption to "other persons." Witnesses for shipping compani~s strongly backed clearer antitrust immunity. Their view was that the Federal Maritime Commission have exclu- sive jurisdiction over ~hipping regulatory `matters. and that removal of liner matters from the scope and reach of antitrust laws must be total. It was urged by Sea-Land Service, Inc., that the Committee incor- porate in H.R. 4769 the provisions of H.R. 2104, which would make conference membership mandatory for all carriers serving all U.S. liner trades. The National Maritime Council's testimony endorsed strengthened conferences, but urged the Committee to stress the use of bilateral trad- ing agreements between the United States and our trading partners as an additional barrier to overtonnaging. The Joint Maritime. Congress advanced a similar view. On the other hand. the Council of European PAGENO="0051" 47 and Japanese National Shipping Association strongly opposed both bilateral agreements and related programs of cargo reservation. In- stead, CENSA urged that conferences be allowed to operate with the greatest freedom possible, and that the anti-rebating provisions of U.S. law be eliminated. CENSA's witness declared that "it is a~ matter of grave concern that the United States continues to be at loggerheads with its Atlantic Community allies and Japan in the vital area of ocean transportation. This security aspect must weigh heavily on all of us." Representatives of the American Association of Port Authorities were strongly opposed to closed conferences which would be permitted to pool and allocate cargo and sailing schedules and to negotiate inter- modal rates, fearing that such decisions would lead to the neglect and demise of smaller ports. The Ne.~ York Chamber of Commerce and Industry, opposed bilat- erals and closed conferences, but supported shippers' councils and negotiation of intermodal rates. The one witness on the bill from academia was John G. B. Hutchins, Professor Emeritus from the Cornell University Graduate School of Business, who argued that closed conferences and bilateralism would raise costs of transportation and thus inhibit the growth o~f commerce which is one of the bill's stated objectives. The bill's section 211, which included a provision for requiring freight forwarders to be bonded was opposed by the witness from the National Custonis Brokers and Forwarders Association of America, Inc., who contended that the provision would force many freight for- warders out of business. The International Association of Non-Vessel Operating Common Carriers (NVOCC) supported the bonding requirement, and urged that it be extended to include the NVOCC. They also requested that non-vessel operators be clearly authorized to issue bills of lading in. their own name and be licensed by the Federal Maritime Commission. TITLE III A. Background Title III of H.R. 4769 `amends certain sections of the Merchant Marine Act of 1936. Generally, the Merchant Marine Act of 1936 is a promotional act aimed at encouraging the development of the United States merchant marine industry through the use of governmental sub-. sidy programs. Title III of the bill is designed to' make the subsidies more effeotiv~ and ultimately decrease the industry's dependence on Government `aid. Description of titZe III Section 301 of the bill amends sections 101 and 102 of the 1936 Act regarding Declaration of Policy. Under section 301 of the bill, the policy of the United States is to' have a competitive and efficient mer- chant marine capable of carrying its domestic commerce and a fair share of its foreign commerce in order to meet national security and trade objectives and also to have a competitive and efficient shipbuild- mg capacity in order to satisfy the needs of national security. To achieve its objectives, section 301 provides that the Secretary of Commerce shall utilize his authority under the Act `and shall also nego- tiate, as necessary, appropriate commercial agreements with foreign PAGENO="0052" 48 nations to insure that within five years after enactment of this section, and annually thereafter, U.S. vessel's will be `carrying a fair share (not less than forty percent) of the foreign commerce of the United States. The Secretary ~hal1 utilize his authority under the Act with the objec- tive of reducing operating differential subsidy (ODS) payments as the United States' carriage of foreign trade is increased, and he shall also determine jointly with the Secretary of Defense the number and location of shipyards neicessary for national security and utilize his authority under the Act to insure that such shipyard capacity is maintained. Section 302 of this bill amends certain sections in Title V of the Merchant Marine Act of 1936 regarding construction differential sub- sidy (CDS) payments. The CDS program is designed to cover the dif- ference between shipbuilding costs in U.S. shipyards and the' lower-cost foreign yards. However, this parity concept has failed to place U.S. shipyards on a competitive basis in the world. Section 302 of the bill increases the number of trades in which CDS- built vessels may be used and predicates the future expenditures of' CDS funds to increased levels of productivity and efficiency on the part of the shipyards. Specifically, this would include allowing CDS vessels to engage in foreign-to-foreign commerce and to a greater degree in the domestic commerce. In regard to CDS contracts, the vessel would be required to meet standards established by the Secretary of the Navy and priority would be given to those applications that would reduce CDS, that propose the construction of high transport vessels and that meet the efficiency standards promulgated by the Secertary of Commerce. In addition, no CDS would be paid if the vessel did not meet Sealift Readiness Pro- gram standards or if the shipyard rules and practices inhibit the efficient use of its resources. Section 302 also provides that CDS shall be reduced by 15 percent unless the proposed vessel is part of an existing series and meets the Secretary's efficiency standards. Shipyard competition is also encour- aged by allowing CDS vesseJs to be flagged foreign, by loosening re- strictions on the requirement to buy U.S. component parts and by pro- viding for direct payments to shipyards for the purpose of capital improvements. Section 302 would also allow aliens to purchase obsolete vessels and would allow obsolete vessels to be used for commercial purposes. Finally, section 302 permanently extends the Secretary's authority to authorize negotiated CDS contracts. Section 303 of this bill addresses the operating differential subsidy (ODS) program which is intended to cover the difference between U.S. `operating costs and foreign costs. Under current law, U.S. opera- tors who receive subsidy must agree to maintain a specified minimum of service on routes the `Government designates as "essential" to U.S. trade or security. Section 303 `attempts to increase the flexibility and competitiveness `of the subsidized fleet by removing the requirement that ODS vessels must serve specified trade routes, by allowing ODS vessels to partici- pate in foreign-to-foreign movements, by allowing foreign-built but U.S. registered vessel's to qualify for OT)S, by allowing ODS vessels PAGENO="0053" 49 tO participate to a greater degree in the domestic trades, and by pro- viding the opportunity for ODS operators to temporarily suspend their ODS contracts in an effort to become less dependent on govern- ment assistance. In order to qualify for ODS, a vessel must be offered for enrollment in the Sealift Readiness Program. Section 303 also eliminates the requirement for a hearing to deter- mine whether ODS is necessary to meet foreign-flag competition and eliminates the requirement of a hearing to determine whether existing U.S. service on a particular route is inadequate prior to granting an additional ODS contract. Also provided for is a special subsidy if a trade is being inadequately served. Section 303 also allows vessels constructed with capital construction funds to be used in foreign-to-foreign operations and in the domestic trades. In addition, the section allows capital construction funds to be `used to purchase existing foreign-built vessels. The Secretary of Com- merce is required to undertake a study to determine the cost and benefits of terminating or reducing the ODS program. Section 304 of this bill deletes the prohibition against any operator that receives ODS from owning or having any interest in a foreign- flag vessel. This section also requires that ODS funds shall only be used to support U.S.-flag vessels. Section 305 permanently extends the Secretary of Commerce's au- thority over the War Risk Program and section 306 provides that ODS contracts in effects at the time of enactment of this Title will not be affected by the amendments to the 1936 Act unlessthe contractor chooses to come within the terms of the amendments. C. Heciring$ The Maritime Administration testified that if the 40 percent car- riage which appears in section 301 of the bill was intended to be a statutory mandate for the Secretary of Commerce to achieve within five years, then the Department was opposed to such a provision. How- ever, the Maritime Administration indicated that the Administration was not opposed to the 40 percent provision if it was only intended to serve as a goal. Additionally, the Maritime Administration stated that it appeared doubtful, particularly in the bulk trades, whether the 40 percent goal could be obtained within five years. Although the Maritime Administration supported some provisions in the bill and the concept of other provisions, they stated that overall, enactment of the bill would spell an end to U.S. shipyard orders for foreign trade ships and thus lead to a serious erosion of the U.S. ship- building mobilization base. In particular, the Maritime Administra- tion opposed provisions that would impose a subsidy penalty for nonseries production and permit the Navy to establish mandatory standards for CDS vessel construction, and termed as unrealistic, the mandate to the Secretary of Commerce to utilize Titles V and VII of the 1936 Act to maintain the U.S. shipyard capacity. The Maritime Ad- ministration also opposed provisions in section 303 that would allow foreign-built vessels to receive ODS, eliminate the essential trade route concept, permit the purchase of obsolete vessels by aliens, elimina4e hearings to determine if existing U.S. service on a route is inadequate prior to granting an ODS contract, and permit the use of capital con- ~struction funds to purchase existing foreign-built vessels. PAGENO="0054" 50 Representatives from the Departments of State, Treasury and~- Transportation also testified on behalf of the Administration and all three witnesses reiterated President Carter's maritime message of July 20, 1979, in which the President stated that the worldwide move- ment toward bilateral agreements was neither wise nor necessary and. that the U.S. should refrain from pursuing such agreements unless it becomes necessary to protect the competitive rights of U.S. carriers. Testimony from the Department of the Navy indicated that a range of 15 to 19 viable private shipyards should be maintained to insure that national security and mobilization contingencies can be met. The National Maritime Council (NMC) presented testimony in support of the goal of 40 percent as set forth in section 301, but stated that the bill failed to establish a clear and effective mechanism for achieving the goal. The NMC offered amendments that would further encourage the use of bilateral agreements. In contrast to the CDS and ODS sections of the bill, the NMC's representatives testified that they supported the parity concept as the only viable way to sustain the ship operating and shipbuilding industries at a level capable of meet- ing the needs of national security. The NMC proposed the elimination of the 50 percent ceiling on CDS and a broadening of the elements of operating costs which the Government considers in computing ODS. The NMC also opposed provisions in section 303 which eliminate the essential trade route concept, allow ODS for foreign-built vessels, al- low the use of capital construction funds to purchase existing foreign- built vessels and eliminate hearings to determine if existing U.S. service on a route is inadequate prior to granting an ODS contract. Strong opposition to Title III was also voiced by the Shipbuilders Council of America and various shipyard representatives. They stated that the welfare of shipbuilding in the United States was vitally im- portant to our national security and to our national economy. The concern was expressed that Title III would eliminate over half of the existing shipyard capacity and that the remaining years would be inadequate for wartime mobilization. Sea-Land, a major IJ.S.-flag unsubsidized carrier, testified in sup- port of the goal of 40 percent and suggested that certain language be added to the bill which would specify standards that the Secretary of Commerce would follow when negotiating bil~teral agreements. Sea- Land also suggested inclusion of a new provision which would require preference of U.S.-flag carriage for certain Government-impelled cargo. Sea-Land supported provisions in section 302 which provided for payment of funds to shipyards for capital improvements, foreign- flagging of CDS vessels, subsidized construction for international commerce, relaxation of requirements for CDS vessels to be built with U.S. component parts and requiring all CDS vessels to be enrolled in the Sealift Readiness Program. Sea-Land also suggested that the See- retary of Defense should not be allowed to set mandatory standards for CDS vessels ~s provided under section 302 and that the 50 percent. ceiling on CDS should be eliminated. In regard to section 303, Sea-Land stated that there is a basic need for Governmental assistance to overcome crew cost differential. Sea- PAGENO="0055" 51. Land supported the elimination of the essential trade route concept, allowing ODS for international trade and ODS for foreign-built vessels. The American Institute of Merchant Shipping (AIMS) testified in favor of making ODS and CDS available for international trades, allowing subsidized operators to also own foreign-flag vessels and relaxing requirements that CDS vessels be built with U.S. component parts. AIMS also supported the permanent extension of the Secre- tary's authority to administer the War Risk Program and suggested that the program be expanded to include all TJ,S.-owned vessels re- gardless of flag or size. AIMS opposed the provisions alJowing CDS vessels to be registered in a foreign country, permitting foreign-built vessels to receive ODS and allowing the Secretary of Defense to set mandatory standards for CDS vessels. The American Maritime Association and Matson Navigation Com- pany voiced opposition to the provision in section 302 that would allow vessels built with CDS to freely enter the domestic trades, while the Western Great Lakes Ports Association favored such a provision. The American Petroleum Institute (API) termed the goal of ob- taining 40 percent U.S.-flag participation in all trades within five' years as arbitrary and ill-conceived. The API representative further stated that the use of bilateral agreements in the bulk trades would be' inefficient and inflationary. Colt Industries, Inc. presented testimony in opposition to the pro- vision in section 302 that would relax the requirement that CDS ves- sels be built with U.S. component parts. The Colt representative argued that such a provision would greatly inhibit the development in the United States of the diesel engine. In addition to testimony that related directly to H.R. 4769, a day of hearings was also held concerning related bills and proposals that could either be passed as separate legislation or as part of H.R. 4769. The Honorable Lindy Boggs and the Honorable Paul Trible testi- fied before the Subcommittee concerning their proposed legislation (H.R. 5113 and H.R. 5145) which would encourage the use of hi- leteral agreements in the bulk trades, substitute a single per diem subsidy program that incorporates both CDS and ODS elements and autho~i~es the use of CDS and Title XI loan guarantees for construction of bulk carriers in U.S. shipyards for our trading partners. The Maritime Administratiqn also testified concerning the Admin- istration's proposal (H.R. 4945) which would permit ODS-built bulk vessels to be sold foreign after ten years under the U.iS. flag, permit repairs in either foreign or U.S. shipyards with subsidy, permit sub- sidized U.S. operators to also own foreign-flag vessels and permit subsidized vessels to engage in international trade without losing subsidy. Captain Leo Berger, a bulk operator, also testified in favor of a single per diem subsidy system for bulk vessels, prohibiting obsolete vessels from participating in the domestic, Soviet grain or cargo pref- erence trades. He also suggested a limited cargo preference for new bulk vessels until their initial capital costs had been amortized~ PAGENO="0056" 52 TITLE iv: TAX PROVISIONS A. Si~rnmary The elements of Title IV may be divided into two specific cate~ gories. The first sections address the problem of taxation of earnings from the operation of foreign-flag ocean vessels. The later sections are intended as incentives for investment in U.S.-fiag shipping. The sections on the taxation of foreign source earnings were taken from the recommendations of a `Ways and Means Committee Task Force on Taxation of Foreign Source Income. This Task Force was established to address specifically some unresolved issues remaining after the Committee completed the Tax Reform Act of 1976. One of the study areas of the Task Force was the tax treatment of foreign shipping income. The Omnibus Bill reflects the goals of the Ways and Means Task Force to remove the incentives for IT.S. investment in foreign-flag (so-called "flag-of-convenience") shipping. The principal mechamsm directed toward that goal is the removal of the major incentive for foreign investment, namely. the. deferral of taxation accorded for reinvestment of the profits from foreign shipping in "qualified ship- ping assets." The Omnibus Bill pioposes to simply accord foreign shipping income the same treatment. given all other so-call "tax haven" foreign source. operations afte.r the Tax Reduction Act of 197~, where- by profits earned abroad are considered distributed to the U.S. share- holders and taxed as income whether they have bee.n distributed or not.. There is no reason to treat. shipping profits differently from other U.S.-owned operations in tax haven countries. The second major change advanced in t.he proposed legislation is to restructure the. provision of the Tax Code which offers the reciprocal- exemption, which would permit the continuation of an exemption only in those cases where there is a tax t.reaty with the country of the vessel or where there is a definite relationship between the vessel and the flag state.. Such. relationship can take the form of ownership by nationals of the flag state. or an active participation in the commerce of t.he flag state. This would remove the. tax exemption for "flag-of-convenience" vessel operation under the flag of Liberia, Panama, etc., where the vessel owners are U.S. citizens and the vessels have never visited the country whose flag they fly. There are several other sections which will alter the ta.x structure for U.S. companies. The bill makes technical changes to more accu- rately reflect the earnings in U.S. foreign commerce. by subjecting a larger percentage of the voyage, and thus a larger percent.age of the earnings of a voyage. t.o taxation. The later sec.tions of Title IV are intended to induce investment in I ~`.S.-flag shipping and to place om:~ operators in a tax environment which more closely approximates the other developed countries with significant maritime interests. The inducements should also serve the purpose of equalizing any tax disadvantages which would accrue to a `U.S. owner of foreign-flag vessels who seeks to reflag those vessels after the. termination of the tax deferral which will also be accom- plisheci by this Title. PAGENO="0057" 53 The incentives offered include immediate alk~wance of expenditures for constrñction costs and allowance of the full investment tax credit for ship construction. An additional tax provision, contained in Title III would extend the Capital Construction Fund (whereby vessel own- ers can make tax deferred contibutions of earnings to a fund to be used for new construction), to domestic operators to serve as an incen- tive for modernization of our domestic fleet as well as provide more construction orders for U.S. shipyards. B. Hearings While there have been several Government witnesses who have briefly commented upon the tax provisions of the proposal, there have been two Government witnesses who directed their entire focus on these measures. Counsel from the Joint Committee on Internal Reve- iiuo Taxation and the Assistant Secretary of the Treasury for Tax Leg- islation have both testified in general support of the measures. Counsel from the Joint Committee on Internal Revenue Taxation offered a lengthy, technical appraisal of the Title with explanatory comments upon the effect of each of the sections. The Treasury witness was the principal spokesman for the Administration, and while generally sup- portive of the Title, he offered the Subcommittee several alternative approaches to accomplish the goals of the framers of the proposal. For example, the Administration spokesman supported the termination of the tax deferral for reinvestment of foreign shipping profits in foreign shipping assets and the termination of the exemption from taxation which has been accorded to U.S.-owned, "flag-of-convenience" operators. The Administration ~was not supportive of the measures designed to spur investment in U.S. construction through the mecha- nisms of accelerated depreciation for vessels, immediate deduction of expenses of vessel construction and the extehsion of the Capital Con- struction Fund to domestic operators. The principal reason for the Administration's posture on these mat- ters was the belief that U.S. shipping is a highly tax advantageous industry and that the rather bleak financial condition of the industry cannot be attributed to the U.S. tax policy nor do they believe that a more advantageous tax structure would significantly alter the finan- cial condition of the industry. Comments on Title IV from the private sector were received pri- marily from groups who represent oil tanker operators, both foreign- flag operators and U.S. operators. These groups were uniformly opposed to the changes in the tax code which would result from the adoption of this Title, and couched their opposition on the belief that the results of the tax changes would be of more harm than benefit to U.S. shipping interests and could result in detrimental retaliation by foreign governments. Furthermore, the witnesses from the American Institute of Merchant Shipping (representing an association of 28 companies which own, operate, and charter 190 American-flag bulk vessels), the Amarican Petroleum Institute (whose member companies operate 180 TLS.-flag tankers and 645 foreign-flag tankers), the Fed~ eration of American Controlled Shipping (representing U.S.-owned companies which own vessels registered under the flags of Liberia and PAGENO="0058" 54 Panama), and the American Maritime Association (composed of U.S.- flag tanker operators in both domestic and foreign commerce) ex- pressed the view that the present tax structure was not a compelling factor in the decision to operate under U.S. or foreign flag, but other elements of cost were much more decisive. They testified that if tax matters were the primary consideration, all U.S.-owned vessels would fly the U.S. flag. Due to the largely secondary nature of the tax con- :siderations, in their view, the proposed changes would be to the long- range detriment of U.S.-controlled shipping because U.S.. owners of foreign-flag vessels would dispose of their shipping assets rather than reflag them. The testimony from Professor Hutchins of the Cornell University Graduate School of Business and Public Administration, the only non-governmental witness who was not affihiátéd with tanker operators, was of a similar vein. His view was that punitive tax measures im- posed upon U.S. owners of "flag-of-convenience" vessels would result in forcing U.S. owners out of the market in favor of non-American, controlled Liberian and Panamanian shipping, secured under charter arrangements, with the end result of a reduction in U.S.-controlled tonnage. TITLE V~ GOVERNMENT REORGANIZATION A. Sumin1ary This Title reflects the belief that the intent of revising the regulatory ~aiid promotional programs of the U.S. cannot succeed unless the mari- time policy function is centralized in one office with a clear delegation of the authority to make the maritime policy of the U.S. and oversee its implementation. To this end, the bill calls upon the President to submit to the Congress a Reorganization Plan which would create a new Deputy to the Special Trade Representative who would serve as the U.S. Government's maritime policy spokesman. This new Deputy would receive the authority to make policy for both the regulatory and prOmotional programs, with the Federal Maritime Commission and the Maritime Administration in the Department of Commerce, re- spectively, to implement this policy. As a result of the Reorganization Plan, the Deputy Trade Repre- sentative for Maritime Affairs would coordinate the regulatory and promotional programs to insure that they were in harmony, and would have specific review authority over actions of the Federal Maritime Commission to insure that our regulatory mechanism was not inhib- iting U.S.-flag operators from the freedom and flexibility which they need to effectively compete in the international arena. Hearings The Administration has testified through the Department of Corn- merce and the Special Trade Representative in opposition to the Re- organization proposal, and its opposition has been echoed by the Federal Maritime Commission. In a July 20, 1979, letter to Chairman Murphy, reporting on the re- suits of his Interagency Task Force on Maritime Policies, the Presi- dent designated the Assistant Secretary for Maritime Affairs of the Department of Commerce as the Administration's chief spokes~nan in PAGENO="0059" 55 maritime affairs, while in the same letter, he urged the reestablish- ment of "the primacy of the Federal Maritime Commission in regu- lating ocean shipping." In later portions of that letter, the President qualified his designation of the Maritime Administrator as chief spokesman with the following: This [designation] will not, of course prevent other De- partments from performing their particular responsibilities or from testifying before the Congress in their areas of spe- cial expertise as they may relate to maritime matters. In other words, even as he designated the Maritime Administrator, he added a qualification designed to confuse the central issue of who will formulate, implement and articulate the policy of the U.S. Gov- ernment in maritime matters. Based upon the President's declaration, the Department of Com- merce, through the testimony of both the Assistant Secretary for Maritime Affairs and the Acting Secretary of Commerce, opposed the creation of the Deputy Special Trade Representative for Maritime Policy and the designation as policy formulator and spokesman for iiiaritime matters. Likewise, the Special Trade Representative, testi- fying through the Assistant STR voiced surprisingly vigorous oppo- sition to the proposal for a Reorganization Plan. The principal basis for the opposition from the Trade Repesentative was the feeling that the office lacked both the expertise and the manpower to discharge the responsibilities envisioned in the legislation. In addition, it was felt that the manning which would be required to effectively discharge this new mandate would overload the Office and it would become primarily a shipping agency rather than a trade agency. The witnesses from the Department of Commerce followed some- what the same course and voiced the concern that placing both the general trade promotion and maritime program in the same office would "adversely affect our ability to carry out either of them efficiently.". The Federal Maritime Commission also joined in the opposition to the bill because it would diminish its jurisdiction and involve the removal of its regulatory policy functions. The premise of the opposi- tion from the Commission may be summarized with one key sentence from the Chairman's testimony~: If the Congress passes legislation delineating clear and pre- cise standards for the consideration of section 15 agreements, U.S. regulatory policies will no longer be subject to diverse interpretations from U.S. Government agencies and will no~ longer create confusion or invite exploitation from commer- cial parties and foreign trading partners. The Chairman sought to underscore the "quasi-judicial" nature of regulatory proceedings conducted by the FMC and his belief that the combination of regulatory and promotional policymaking in one office as envisioned in this Title would preclude the effective discharge of the duties of the Commission, and render the regulatory aspects of the U.S. maritime policy susceptible to charges of undue influence and bias.' PAGENO="0060" The second basis for the Commission's opposition was that the re-~ location of all maritime functions within the executive branch wouldl subject these functions to the "divergent and competing parochial interests of the various executive departments", and further, this Title of the Omnibus Bill "would seriously jeopardize the continuation of a productive working relationship between the Congress and the government agency responsible for implementing the legislative branch's regulatory policies." Testimony from the private sector was divided. The National In- dustrial Traffic League (an association of shippers, Chambers of Coin- merce, and other entities concerned with freight rates and transporta- tion services), adopted a position similar to the basic posture of the FMC, that revision of the Shipping Act to clearly establish antitrust immunity authority for the FMC and a clear "public interest" stand- ard for the approvability of section 15 Agreements would achieve a national maritime policy, which would insure the maritime program of the United States, would complement and support U.S. trade objectives. The League believes that such modifications of the Ship- ping Act would negate the necessity or desirability of placing marl- time policymaking and regulation under the Special Trade Bepresentative. Elsewhere in the private sector there was some support for the reorganization proposal. The New York Chamber of Commerce and Industry, while withholding full support for the proposal in its present form, did endorse the concept of merging maritime policy into trade policy. Likewise, the leading independent (non-conference) operator on the North Atlantic, Trans Freight Lines, did "heartily support Title V" because of the "need for a final authority within the central government." Hearings are scheduled for completion in January 1980, and the Committee will commence markup immediately thereafter. H.R. 54792 (S. 1281)-P a~senger S/up Revitalization On July 23, 1979, the Subcommittee on Merchant Marine held hearings on predecessor bills H.R. 4416, I-LR. 4814 and H.R. 4886. These bills dealt respectively with the SS United States, the SS Oceanic Independence and the SS Santa Rosa. While individual bills dealing with the SS Mariposa and the SS Monterey were not intro- duced, the hearings discussed the revitalization of the cruise industry as affected by all five of the vessels covered in H.R. 5472. This legisla- tion is required to clarify their status as vessels capable of operating in ~the coastwise trades. The Administration, construing judicial dc- cisions, has held that vessels built with subsidy cannot operate in the domestic commerce of the United States under the conditions which the five passenger vessels presented to the Committee. In light of the fact that there is virtually no American passenger cruise in~ dustry, the Subcommittee decided that in these particular cases the restrictions should be waived. The Subcommittee received testimony from the Maritime Adminis- tration, U.S. Coast Guard, the Harbor Festival Foundation, Inc., the Transportation Institute, the Seafarers International Union of North America-AFL-CIO, District 2-Marine Engineers' Beneficial As- PAGENO="0061" 57 sociation-Associated Maritime Officers, the National Maritime. Union, the AFL-CIO Maritime Committee, the International Or- ganization of Masters, Mates and Pilots, the Joint Maritime Con. gress, American-Hawaiian Cruising Line, Inc., United States Cruises, Inc., and the Vintero Corporation. On October 18, 1979, the Subcommittee was discharged by the Full Committee, which proceeded to mark up the bill with one substan- tive amendment, to limit cargo to passengers, their accompanying baggage, and to incidental cargo which was further defined as 1,000 measurement tons of cargo, of 40 cubic feet each, per annum in any coastwise trade. H.R. 5472 was then unanimously reported to the House. H.R. 5472 passed the House under Suspension of Rules on Octo-. ber 30, 1979, and its language was substituted for S. 1281. S. 1281 (H.R. 5472) became Public Law 96-111 on November 15, 1979. L1.R. 1715 The Shipping Act, 1916 as amended, was enacted to insure that American foreign commerce would proceed in an orderly and non~dis- ~criminatory manner without undue advantage of carriers, shippers, consignors or consignees. Under existing law, the Federal Maritime Commission (FMC) has no jurisdiction over complaints filed by carriers or other persons against shippers for alleged violations of the Shipping Act of 1916, even though the FMC does have jurisdiction in the reverse situation where complaints are flied by shippers against carriers. The result of this statutory scheme is that complaints against ship- pers are not filed with the FMC but instead with local, state or fed-, eral jurisdictibn having jurisdiction over the shipper. This results in currently pending cases against shippers being spread throughout th~ United States rather than bcfo~e one single government agency, with the expertise necessary to develop a uniform administration of the nation's ~hipfdng laws. - Section 1 of H.R. 1715 amends section 22 of the 1916 Shipping Act so as to give the FMC jurisdiction over complaints filed against ship- pers, consignors and consignees. Tn addition, the present law does not provide the same strict ha-. bility for shippers in the event that they receive rebates or kickbacks from a carrier. Section 2 of H.R. 1715 amends section 18(b) of the 1916 Shipping Act so as to make it unlawful for a shipper, consignor or consignee or one of their officers, employes or agents to receive or demand or ob- tain or attempt to obtain transportation by water at less than the rates and charges specified in the tariff regardless of whether such receipt is knowing or willful. One day of hearings was held on October 30, 1979. Testimony was heard from the Federal Maritime Commission and the Adherence GroupS Inc. No further action was taken on the bill. H.R. 5784 H.R. 5784 was introduced on November 1, 1979, to extend the pro- visions of Title XII of the Merchant Marine Act, 1936, relating to PAGENO="0062" 58 war risk insurance. The purpose of this bill is to provide a perma- nent basis for authority to issue war risk insurance under Title XII of the Merchant Marine Act, 1936. Title XII of this Act was enacted with the outbreak of the Korean War in 1950. It was temporary leois- lation that initially expired in 1955 and has been extended until ~p- tember 30, 1979. The purpose of war risk insurance is to maintain the flow of the United States waterborne commerce, including the maintenance of essential transportation services. On December 3, 1979, one day of hearings was held on H.R. 5784 and testimony was received from the Martime Administration, Council of American Flag Ship Operators (CASO), American Institute of Merchant Shipping (AIMS), and the Federation of American Controlled Shipping (FACS). All the witnesses affirmed the necessity for permanent au- thority, referring to the need to provide war risk insurance covering ships, cargoes, the lives and personal effects of the crew and other liabilities resulting from ownership and operation of vessels when commercial insurance cannot be obtained on reasonable terms and conditions. This may occur because commercial underwriters dras- tically increase war risk insurance rates because conditions at certain ports may be hazardous to the safety of the vessels. No further `action was taken on this bill. H.R. 5913 On November 15, 1979, H.R. 5913 was introduced to make perma- nent the authority of the Secretary of Commerce to accept negotiated bids for ships to be constructed with the aid of construction-differeji- tial subsidy. The purpose of the bill is to make permanent the gov- ernment's authority to accept negotiated contracts. The result of such enactment would be ,consistency in the way ship construction con- tracts are negotiated in the United States and worldwide. On Décem- ber 3, 1979, one day of hearings was held with testinmny~from the Maritime Administration, American Institute of Merchant Ship- ping (AIMS~, Council of American Flag Ship Onerators (CASO', Federation of American Controlled Shipping (FACS) and Bath Iron Works Corporation. All the witnesses testified in support of the bill. A major reason for this support is based on the fact that nego- tiated contracting has encouraged shipyards to develop ship designs that meet requirements with cost effective design solutiop~. Another reason centered on the premise that the process of negotiation 1ead~ to ,a better understanding of ship operation and ship construction requirements. No further action was taken on the bill. Hi?. 3094-Sale of Obsolete Vessels H.R. 3094 authorizes `the Secretary of Commerce to sell, within two years of its enactment, five obsolete C-2 reefer vessels (AF-28 Hyacles, AF-49 Zelima, AF-52 Arcturus, AF-54 Pictor, and AF-Gi Procyon)"to the Inter-Ocean Management Co., a California corpora- tion, to operate in the fisheries of the United States. The vessels which are now in the National Defense Reserve Fleet are approximately 459 feet in length, 63 feet in width, powered by steam turbine engines, 6,000 horsepower, of steel construction with maximum storage and freezing capacity, ranging in deadweight tonnage from 6,900 to 10,000. The PAGENO="0063" 59 vessels were commissioned in the early 1940's, served in three wars, and were found unfit for further service by the Navy's Board of Inspection and Survey, and were stricken from the Naval Vessel Register in 1976. They have all been authorized by the Secretary of the Navy for disposal and are located on the James River, Virginia, and in San Francisco, California. Section 203 of the Federal Property and Administrative Services Act (40 USC 484) vests in the Secretary of Commerce exclusive authority to dispose of Government-owned merchant-type surplus ships over 1,500 tons. Section 510 of the Merchant Marine Act, 1936, as amended, prohibits the commercial operation of obsolete vessels more than 25 years old which have been acquired by the Secretary of Commerce. Fishing operations are deemed "commercial" and there- fore these vessels, under current law, cannot be sold for such use. The bill provides that the sale price shall be the vessels' appraised value for operation or their scrap value in the domestic market, which- ever value is greater, as of the date of the sale. The bill also requires that (1) any conversion work shall be performed in the United States (2) the vessels shall be documented as fishing vessels and operated under the laws of the United States; (3) the vessels shall be operated in conformity with all international fishery conventions ~to which the United States is a signatory; and (4) when the vessels are scrapped, they shall be scrapped in the domestic market. The Secretary is empowered to sell the vessels subject to such con- ditions he deems are appropriate in the national interest. It was the Committee's understanding that the prospective purchasers have agreed that the vessels will not be used: (1) in areas under considera- tion for designation as critical habitat for endangered species; or (2) for fishing for yellowfin tuna in the area regulated by the Inter- American Tropical Tuna Commission. The Committee e~p cts these and .othe ~ to be written into' th~ ~àntr~ct of sale. The' vessels'.are~'for a variety of uses or a combination of uses, such as factory/trawlers, a single unit processing vessel, trawlers, and/or various type support or mothership vessels. The prospective purchaser expects to pay approximately $7,800.000 for the conversion of these five vessels. The species to be harvested include pollock, ocean perch, black cod, all species of sole, rockfish, and shrimp. The company expects to employ approximately 125 people for operation, fishing, and processing. It is anticipated that this project will add immediate employment for ship operation and shir conver- sion personnel as well as U.S. cannery workers, seamen, and fishermen. The conversion work is planned for `shipyards on both the East and West Coasts. H.R. 3094 was introduced by Mr. Murphy of New York on March i9~ 1979, and referred to' the Subcommittee on Merchant Marine on March 27, 1979. A similar bill (H.~.. 3315) was introduced by "Mr. Anderson of'.California' on March 2S~ 19'r9. and referred to the Sub~. committee on Merchant Marineon April 4, 1979. `The. Subcommittee on Merchant `Marine held one' day of hearings on H.R. 3094 on June 18. 1979. Several members of the subcommittee referred £~ the inflexibility of current ship disposal laws and ex- pressed a desire to consider legislation to `provide general statutory authority to sell obsolete vessels for commercial use. Some concern was PAGENO="0064" 60 expressed that the Maritime Administration has not suggested appro- priate legislation to accomplish this end through a competitive bidding process. The Maritime Administration has the responsibility for dis- posing of these vessels and the obligation, under section 212(g) of the Merchant Marine Act, 1936, to recommend to Congress appropriate changes to the acts which it administers. The Subcommittee was discharged and the Full Committee met `in open markup session immediately thereafter and unanimously ap- proved and ordered H.R. 3094 reported to the House with an amend- ment. The amendment would replace the requirement that "if the ves- sels are scrapped within five years after the date of sale, they shall be scrapped in the domestic market" to be that "when the vessels are scrapped, they shall be scrapped in the domestic market". On August 2, 1919, H.R. 3094 was passed by the House on the Pri- vate Calendar and was referred to the Senate Commerce, Science, and Transportation Committee on August 3, 1979. HI?. 4088 KR. 4088, as introduced on May 14, 1979, would authorize the Sec- retary of Commerce to sell two obsolete vessels to Coast Line Company for use in the coastwise trade in the East Coast as cellular container ships. The two vessels, the CJ-M-AVI Private George Peters, and CI-M-AVI Resolute are obsolete, surplus World War II freighters. This legislation `is necessary because under section 203 of the Federal Property and Administrative Services Act surplus vessels may only be disposed of in accordance with the provisions of the Merchant Marine Act, 1936, as amended, which prohibits the commercial operation of ob- solete or other vessels acquired by the Secretary of Commerce. On No- vember 29, 1979, the Subcommittee held one day of hearings and testi- mony was received from the Maritime Administration and the Coast Line Company. The Maritime Administration supported H.R. 4088 because it i~ould serve to resurrect ~a segment of the u.S. Merchant Marine that has become dormantover the years due to the competitive impact of the trucking and rail industries. Agency support was con- tingent upon the inclusion in the bill of a provision for advertisement. No further action was taken on the bill. Hi?. 3748-Maritime Tort Action Liimitatio~i In admiralty or maritime cases, all matters of delay are left to the discretion of the district court, `with the result that there can be as many different time limitations a~ there are jurisdictions. The lack of predietability and its adverse impact on the `flow of'cOrn- merce are sought to be overcome by H.R. 3748, introduced on April 25, 1979, which provides for a uniform national three year statute of limi- tations in actions to recover damages for personal injury or death, aris- ing out of a maritime tort. One day of hearings was held Decembe,r 3, 1979, at which testimony was received from the Maritime Law Association of the United States and, the International Association of Drilling Contractors. The wit~~ nesses `affirmed the current,' chaotic state of maritime tort practice in the Federal District Courts, and called for the uniformity ~hich H.R 3748 would provide. ` No further action was taken on the bill. PAGENO="0065" 61 H. Con. Res. 3-Our Merchant Marine March On February 6, 1979, the Committee on Merchant Marine and Fisheries heard, marked up' and reported to the House a resolution to declare "Our Merchant Marine March" the officiaJ march of the American merchant marine. The Committee found that the Merchant Marine, long recognized as the fourth arm of defense was the only such branch without a march for official events. The Resolution passed the House on February 22, 1979, and after consideration was passed by the Senate on April 10, 1979. OVERSIGHT Aanvrnis Federal Maritime Conwiission Oversight The Subcommittee, in continuing the discharge of its oversight responsibility over the Federal Maritime Commission, held `a hearing on March 6, 1979, to focus on the "circumstance that the Federal Mari- time Commission has been impaired in its ability to administer our Maritime regulatory policy because of unnecessary or unseemly inter- vention by agencies of our own government." Testimony was received from the Federal Maritime Commission and the Department of State. The Department of Justice, while not submitting a prepared state- ment, did have a leading antitrust spokesman from the Department appear to respon.d to inquiries from the Subcommittee Members. The hearing was conducted against the backdrop of pending litiga- tion on matters arising from the same subject matter, and therefore the Chairman and Members were cautious to avoid any prejudice to the court proceedings. The focal point of the hearings was the general investigative authority of the Federal Maritime Commission, and the recent attempts of the FMC to obtain records during its investigation of the shipping practices of the Baltic Steamship Company, a state- contro]i~d carrier of the Soviet merchant marine. The coficern of t'he Subcommittee was of `a two-fold nature. The first aspect of the problem was the ongoing difficulty in obtaining documents in the course of an investigatioici of a foreign-flag carrier. This problem is caused by the invocation of so-called "blocking stat- utes" by foreign carriers to prevent access by U.S. Government inves- tigators. The second matter of concern to the Subcommittee was the fact that the Department of Justiee had filed a brief in opposition to the action of the Federal Maritime Commi~sion in seeking to enforce a secti~ 21 (Shippmg Act, 1916) order against Baltic Steamship for the production o~1! documents pursuant to a subpoena issued by the Commission. The Department of State had contributed to the brief filed by the Department of Justice and the result was that two agencies of the U.S. Government were aligned with a Soviet carrier arguing in the U.S. Court of Appeals against the `action taken by yet another agencyof the United States. The hearing consisted of a procedural review of the action in the Court of Appeals, and a discussion with each of the witnesses both as to their general understanding and method of cooperation and specifi- cally to the reasons which gave rise to this most unusual alignment of the parties to this litigation. 56-410--SO-_5 PAGENO="0066" 62 In the course of the dialogue with the witnesses, the Subcommittee also reviewed the ongoing investigation into ocean freight rebating which had been underway for the past several years. There was lengthy discussion on the types of investigation which have been conducted into the rebating practices of foreign-flag carriers as compared to the investigations into the settlements of rebating cases involving U.S.- flag carriers and shippers. Major emphasis was placed upon the recent- ly concluded meeting in London between representatives of U.S. agencies and their counterparts in Western Europe and Japan in what is known as the Consultative Shipping Group (CSG). Upon completion of that meeting, the participants had issued a set of "Agreed Accords," wherein the OSG governments agreed that where the FMC was investigating rebating and other malpractices of a CSG country carrier, and was unsuccessful in obtaining documents voluntarily, the CSG country concerned would undertake to seek the cooperation and encourage the carrier to provide the necessary evi- dence to allow a settlement to be reached. A disparity of opinion between the FMC and the State Department witnesses as to the real import of the Accords was immediately evident, with the FMC dismissing them as diplomatic puffery. The Department of State, noting that the Accords had be promulgated only three and a half months, was of the view that they did represent a very positive sign of cooperation in one of the thorniest areas of international re- lations. Both witnesses utilized the same examples to underscore their position. The FMC cited the settlement of rebating cases with the Japanese Lines and Zim Israel Line as having been achieved on a gov- ernment-to-government basis, and both prior to the CSG talks. The Chairman also stated that the diplomatic initiative in London has pro- duced no new documents. On the other hand, the State Depart~nent wit- ness cited the CSG Accords, recognizing that the settlement with the Japanese occurred before the signing of the Accords, as a demonstra- tion of "how the methodology set forth in the agreed record, ~an yield concrete results." lie further added that subsequent to the CSG Ac- cord, they had been contacted by the FMC and their assistance solicited in five eases of alleged rebating by foreign-flag carrjers. Within one month, two of the cases had been settled, after the intervention of the flae~-state governments at the request of the Department of State. The Subcomn~ittee Members, while encouraging any efforts which might be undertaken to resolve the question of access to foreign car- riers' business records, sought to underscore to the representatives of the several agencies present that the problems which gave rise to the ciirr~nt scenario, wherein various departments and agencies of the U.S. Government appear before the courts on opposing sides of the question to access to do.cñments, must be resolved and every effOrt t~ avoid the recurrence of this rather unseemly situation be made. United Nations Conference on Trade and DeveZopment Oversight Oni\ pril 26~ 1979, the Subcommittee on Merchant Marine held an oversight hearin~ on the United Nations Lonference on Trade and l)ovolopment's Code of Conduct for Liner Conferences (UNCTAD Code). The Code~ formulated in Geneva in 1974 in multilateral nego- tiations under UN auspices, proposes a systeth for regulation of liner PAGENO="0067" 63 conferences which includes: closed conferences with rationalization and pooling; shippers' councils; and cargo sharing. Although the Code was opened for ratification in 1974, it provided that it would not enter into force until six months after it is ratified by at least 24: states, representing at least 2 percent of the world's liner tonnage. Although 34 states have adopted the Code, these countries represent only six percent of the world's liner tonnage-far short of the requisite 25 percent. However, recently the European Community (EC) has recommended to its members that they adopt a modified version of the Code. If the members of the EU take this action, the tonnage requirement will be met and the Code will enter into force. The Code will establish a regime for Liner Conferences operating between signatory countries. However, because the EU has recom- mended that its members adopt the Code with several reservations, two differing regimes will result. Under the first-generally for trade between developing countries-cargo will be shared in accordance with a specific formula. One popular formula reserves 40 percent of the trade for each trading partner, leaving the remaining 20 percent for cross traders. The second regime-involving the EU countries-does not reserve cargo moving in the inter-EU trades and does not reserve any portion of the non-developing country trading partner share in the EU-developing country trades. Thus, in the latter trades the de- veloping country trading partner would have a reserved 40 percent share with the remaining 60 percent available to all OECD lines and all other lines whose nations afford reciprocity to OECD lines. The establishment of the basic closed conference system will have a profound impact on the world's trades and merchant fleets, particular- ly the U.S. fleet and our foreign trade. The cargO sharing arrange- ments, intended to promote the fleets of developing countries, will likely have that result-further exacerbating the problem of excess ship capacity throughout the world. The closed conferences will also add to excess tonnage because utilization will be increased through rationalization. Assuming the U.S. maintains its current conference regulatory regime, the overtonnaging likely to result from the Code's implemen- tation will affect the U.S. in three ways. First, excess liner tonnage will be dumped. into the "open" U.S. trades. While increased competi- tion may be of a short-term benefit to U.S. shippers, it will further in- crease competitive pressures on the U.S.-flag fleet to the detriment of our efforts to promote it. Thus, if we want to maintain a U.S.-flag fleet sufficient to prevent foreign interests from controlling our freight rates, and consequently our foreign commerce, to the long-term detriment of our shippers and tride, we will have to increase our promotional pro- grams. Second, closed conferences and cargo ~haring will reduce U.S.- flag vessels' opportunities to operate as cross traders-a significant profit center for the few successful U.S.-fl~,g liner Operators. And finally, U.S. international relations will be further hurt by our in- sistence on a liner conference regulatory policy inconsistent with the laws of our trading partners. Specifically, enforcement of antitrust and snti-rebating laws will continue to cause friCtion with our allies and further delay the time when we will have a free flow of trade between our countries on a~commercial basis. PAGENO="0068" 64 In order to comprehensively review the provisions o~ the Code; evaThate the effects the Code have on U.S. trades and our fleet; and consider alternatives to lessen adverse effects on the U.S. trade and fleet the Subcommittee heard testimony from 14 public and private wit- nesses. These witnesses represented the maritime bar, four executive branch departments, the Federal Maritime Commission, shippers, maritime interest groups, and a major of U.S. liner operator. The testimony of the Maritime Law Association detailed the evolu- tion of the Code. it.s provisions, and relationship to U.S. law. It re- vealleci that the "Group of 77", a caucus of developing countries. was primarily responsible for the details of the Code. These countries believed t.hat market sharing arrangements would allow them to de- velop their fleets and control conference rates. The procedures em- ployed during the negotiations, the unified position of the Group of 77, and a lack of leadership among the developed countries. resulted in a Code which was not consistent with the U.S. position. The testimony conchideci that., now, with the entry into force of the Code a likely possibility, IT.S. law should be carefully re-examined to determine if its conflicts with the Code will adversely affect our maritime and trade goals. Administration witnesses reaffirmed U.S. opposition to the Code and indicated that no change in position is contemplated. In fact, the witnesses indicated t.hat the Code was not a subject of discussion in the Administration's maritime policy review. As a result, Ad- ministration witnesses stated that no contingency plans were being developed to minimize conflicts of laws in the event the Code was adopted by our trading partners. Although the Administration was imiformiv opposed to the Code, t.he witnesses admitted that the various agencies involved in U.S. maritime policy continued to have opposing philosophies and conflicts which sometimes prevented them from carry~ ing oitt their statutory responsibilities. Furthermore, it was admitted that' the conflicts between agencies and the conflicts of law between the TT.S. and our trading partners adversely affected our international relations. This problem wa.s esp~cial1v disconcerting in light of the Maritime Adminisjration's assessment that it is likely that the Code will come hito force and that the TT.S. should direct its energy to "adjusting our shinning policy to a shipping world in which the Code is a fact of life." Testimony from witnesses representing the National Maritime Council and the Joint Maritime Congress continued in this vein. Generally, both groups do not support the Code in its present form but believe the Code will establish a new international conference structure and the U.S. should seek to either develop reservations to the Code to make it acceptable or attempt to harmonize our laws with the regime which is being established. These witnesses favored the cargo sharing provisions of the Code and suggested that. bilateralism was a way of bringing our laws into conformity with those implement- in~ the Code. Testimony from Sea-Land Service, a major U.S. carrier, severely criticized the Code. Sea-Land Service indicated strong opposition In the Code on the grounds that it contained provisions which would PAGENO="0069" 65 eliminate effective competition, reduce cross trading opportunities, create new opportunities for controlled carriers, impose government regulations on commercial operations, and result in overtonnaging in the U.S. trades. The witness also severely criticized the Administration for failing to keep industry informed of developments with respect to the Code, and failure to assist U.S. carriers to gain access to closed conferences. Testimony from a representative of U.S. shippers continued criti- cism of the U.S. government's failure to play an active role in the formulation of the Code and the current Administration's failure to develop a maritime policy for national defense and foreign trade. The testimony also illustrated the shippers strong opposition to the Code. It was recommended that the Administration, and Congress, move forward with a new maritime policy which would consider the regime being established by the Code, but which would "uncompli- cate" the Code and remove some of its anti-competitive features. In conclusion, all witnesses believed the Code would be a fact of life in the next few years. All witnesses agreed that the U.S. would be affected by its coming into force. To mitigate any adverse effects, all witnesses agreed that U.S. law would have to be modified to be compatible with the new regimes being established. However, the Ad- ministration witnesses were not willing to develop a new policy which would be compatible with the Code. Thus, it appears that Congress, working with the industry, will have to take the initiative and ensure that our national defense and international trade objectives are not prejudiced by the entry into force of the UNCTAD Code. FIsHERIEs AND WILDLIEE CONSERVATION AND THE ENVIRONMENT Bills reported, passed, and now law 4 Bills reported :ti Bills considered 21 Hearings held (days) 39 Markup sessions (days) 9 LEGISLATIVE AcTIvITIEs Hi?. 20-To Pro'vide for the Derelopm1ent of AquaeuZtv~re in the United States and for Other Purposes Aquacuiture, the cultivation of aquatie plants and animals, in ma- rine, brackish, and fresh water, is relatively new to the Western World. Some authorities believe that simplistic aquaculture practices date back as far as 2000 B.C. The first efforts in American aQuaculture involved the collection and transfer of fertilized eggs, and juvenile and adult fish into de- pleted waters in order to renew breeding stocks. In 1885, the first commercial hatchery in the United States was built at Woods Hole, Massachusetts. Japan, the most advanced country in aquaculture, produces approxi- mately 10 percent of its fisheries needs by aquaculture; the compara- ble U.S. figure iC approximately 3 percent. On an annual basis, U.S. aquaculture production amounts to 48 million pounds of catfish, 2.6 million pounds of clam meats, 10 million PAGENO="0070" 66 pounds of crawfish, 17,000 pounds of fresh water prawns, 20 million pounds of oyster meat, 1 million pounds of pen cultured salmon, 60 million pounds of hatchery released salmon, 800,000 pounds of shrimp, and 30 million pounds of trout. In 1977, the U.S. imported 4,514 billion pounds of edible commer- cial fishery products (60.9 percent of the total U.S. supply) and 867 billion pounds of industrIal fishery products (27.4 percent of the total U.S. supply). The world per capita annual consumption of seafood is about 24 pounds, ranging from less than one pound in Afghanistan to over 79 pounds in Japan and Iceland. The U.S. per capita annual con- sumption is approximately 13 pounds and is expected to increase to 15.2 pounds by the year 2000. This indicates that a good market po- tential exists for aquaculture production in the United States, particu- larly since the U.S. currently imports more than 60 percent of its fisheries needs for human consumption. Within the Federal Government there is inadequate coordination among the several agencies conducting aquaculture programs. There is also a lack of leadership in that there is an absence of definitive goals and no clear cut division of responsibilities. Eleven Federal agencies have been identified as having direct involvement with aqua- culture, and some ten other agencies have programs that are indirectly related. The principal Federal aquaculture involvements are in the Departments of Commerce, Interior and Agriculture, and in the Envi- ronmental Protection Agency. Other factors limiting the development of aquacuiture in the United States are: (1) inadequate technical and economic information on species having potential; (2) inadequate funds for research; (3) in- adequate marketing programs; (4) excessively restrictive laws and standards regarding water discharges; (5) inadequate trained per- sonnel; (6~) inadequate disaster and insurance coverage; (7) inade- quate loan assistance programs; and (8) unclear property rights over several species having potential for artificial culture. Legislation to provide for the development of aquaculture had its inception in the 94th Congress when Mr. Chappell and 27 other Members of the House introduced H.R. 370 and identical bills. The bills would have required the Secretary of Commerce to establish national objectives for aquaculture development in the United States and to coordinate all levels of aquaculture activity in the United States to ensure that such activities were consistent with the estab- lished national objectives. Eight days of joint Subcommittee hearings were held on this legislation by the Subcommittee on Oceanography and the. Subcommittee on Fisheries and Wildlife Conservation and the Environment. Subsequent to the conclusion of the hearings on H.R. 370, the staff of the Subcommittees consulted with representatives of the Depart- ments of the Interior and Commerce with a view toward drafting a bill that would incorporate the insights gained from the hearings and from other information available. The draft was subsequently introduced in the form of 11.11. 14695. No further action was taken on this bill during the 94th Congress. PAGENO="0071" 67. Early in the 95th Congress, H.R. 1833, a bill identical to H.R. 14695 w~s introduced. The Departments of Commerce, Interior and Agri- culture in their testimony On H.R. 1833 supported the intent of the legislation. However~ each Department took the position that the bill was. unnecessary. The reports submitted by the Departments of the Interior and Agriculture reflected this view. The overwhelming majority of the testimony presented at the hearings, however, was in strong support of the legislation. Those few witnesses who opposed or expressed concern over the legislation were fearful that Federal assistance promoting the development of aqua- culture might reSult in unfair competition to those persons already involved in aquaculture or commercial fishing operations. Seven days of joint Subcommittee hearings were held on the legislation during 1977. On September 15, 1977, the Subcommittees ordered reported to the Full Committee H.R. 1833, with amendments, and a clean bill was ordered to be introduced, H.R. 9370. On September 29, 1977, the Full Committee ordered H.R. 9370 reported to the House with an amend- ment, which substituted new language. On February 15, 1978,.H.R. 9370 passed the House under Suspension of the Rules. The bill passed the Senate, with amendments, on Septem- ber 12. 1978. In lieu of a Conference, the staffs of the House and Senate Committees concerned worked out compromise language which the House and Senate agreed to on October 2, 1978, when H.R. 9370, as amended with the compromise language, passed both the House and Senate. The bill, as it was sent to the President, would have created a Na- tional Aquaculture Council composed of the Secretaries of Commerce, Agriculture and the Interior, the Secretaries primarily involved with aquaculture. Chairmanship of the Council would . rotate among the Secretaries at two-year intervals. The Council would have been re- ouired to conduct an assessment and draw up a national aquaculture development plan within 18 months and to identify aquatic species which would be cultivated on a commercially viable basis. The appro- priate Secretary, or any combination of them, would then be required to prepare programs for the relevant research and development of the species. An aquaculture information center would have been established to serve as a national clearinghouse for related information. An Inter- agency Coordinating Committee, under the rotating chairmanship of the council members, was to be established to insure coordination and continuing exchange of information among all Government agencies whose actions affect aquaculture. The bill also authorized the Secre- taries to make research grants to or to contract witl~ any entity to help carry out their responsibilities under the Act. No funds would have been authorized to be appropriated for fiscal year 1979, but the bill would have provided a total of $66 million to carry out the above provisions over three years, beginning with fiscal year 1980. In addition, the Secretaries of Commerce and Agriculture were au- thorized to guarantee loans totaling up to $300 million and to establish PAGENO="0072" 68 an insurance program to cover stock, property and liability risks when insurance was not available at reasonable rates in the private market. No insurance could be issued after the three-year period ending September 30, 1982, and the total face value of such insurance could not exceed $250 million. On October 18, 1978, the President pocket-vetoed the bill. In his veto message, the President pointed out that while the underlying purpose of the bill was sound, he was concerned that the programs established by the bill were premature and that the need for such pro- grams should be more carefully assessed. In particular, he said that he was concerned about offering major new Government subsidies such as the loan guarantee and insurance programs called for by the bill, unless and until a clear need for such programs had been estab- lished. The President also questioned the need for new legislation since many Federal agencies are presently involved in aquaculture development efforts. On January 15, 1979, Mr. Murphy of New York and 25 other Members introduced H.R. 20. The bill closely parallels the bill vetoed by the President hut changes were made in it to meet some of the con- cerns expressed by the President and by other interested persons. Where differences exist, the provision of the vetoed bill appears in parenthesis in the following synopsis. Briefly explained, the bill will require the Secretary of Commerce, in consultation with the Secretaries of Agriculture and the Interior (a National Council composed of three Secretaries), to prepare a national aquaculture development plan within 18 months and to ]dentify aquatic species which can be cultivated on a commercially viable basis. The appropriate Secretary, or any combination of them, would then be required to prepare research and development pro- grams for these priority species. All aquatic species of fish will be covered by the legislation, includ- ing salmon, but private ocean ranching of Pacific salmon for profit would be excluded from its coverage in those States where such ranch- ing is prohibited by law. An actuaculture information center, to be established by the Secre- tarv of Commerce (National Council'), would serve as a national clear- inghouse for aquaculture information. An interagency committee, under the leadership of the Secretary of Commerce (Chairman of the Council), will be established to insure coordination and a continuing exchange of information among all Government agencies whose ac- tions affect aquaculture. To implement the development program, the three Secretaries are authorized to make research grants or contracts. There are authorized to be appropriated $65 million ($66 million') over a three-year period to carry out these provisions of the bill. in di. the Secretary of Commerce is authorized to guarantee loans totaling up to $200 million ($300 million') and to establish an insurance program to cover stock, property and liability risk when such insurance is not avail- able at reasonable rates in the private market. The total face value of such insurance could not exceed $150 million ($250 million) and PAGENO="0073" 69 no insurance could be issued after the three-year period ending September 30, 1982. Joint Subcommittee bearings were held on the legislation on April 5, 1979. On April 27, 1979~ the Subcommittees jointly ordered H.R. 20 reported without ainen~ment to the Fuli Committee. On May 3, 1977, the Full Committee unanimously ordered the bill reported to the House with amendn~ients. Other than making a technical change, the bill was amended to include in the definition of "person" a citizen of the Northern Mariana Islands or of the Trust Territory of the Pacific Islands. The Committee report on H.R. 20 was filed on May 15, 1979, and the bill was sequentially referred to the Committee on Agriculture for a period of 60 days. The bill was reported to the House with amend- ments by the Committee on Agriculture on July 16, 1979. No further action was taken on the bill during the first session of the Congress. F1.R. 39, H.R. 2219, and H.R. 2199 and Sii,niila~s Bills-To Designate Certain Lands in the &ate of Alaska as Unite of the National Park, National Wildlife Refuge, Wild a'nd Scenic Rtvers and National Wilderness Precervation Syste'ims, and for Other purposes One of the most important conservation issues to face the 96th Congress concerned the designation of millions of acres of Federal public lands in Alaska as National Parks, National Wildlife Refuges, National Forests and Wild and Scenic Rivers under section 17 of the Alaska Native Claims Settlement Act (ANCSA), Public Law 93-203. Various proposals were made to Congress for the disposition of these lands including fl.R. 39, H.E. 2219 and H.R. 2199 as well as proposals from the State of Alaska, the Federal-State Land Use Planning Com~ mission for Alaska and the Administration. Alaska lands Zackgrovfivi-95th Congress The Alaska National Interest Lands, commonly called the (d) (2) lands, issue represents the last stage of a 20 year effort to resolve the status of the 375 million acres under federal stewardship in the State of Alaska. The 1958 Statehood Act granted the State of Alaska the right to select 104 million acres for State ownership. In 1971, the Alaska Native Claims Settlement Act resolved outstanding Native claims to many areas of the State by setting aside 44 million acres for selections by Native village and regional corporations. Additionally, these corjporations will receive some $962 million. In addition to resolving the Native claims to the State, the Native Claims Settlement Act provided a study of other lands to be proposed as additions to the National Park, Wildlife Refuge, Forests, and Wild and Scenic River Systems. Section 17(d) (2) of the Act authorized the Secretary of the Interior to withdraw up to 80 million acres of land to be studied for possible addition to the four systems. Under that section, Congress had until December 1978 to act on the Secretar- ial withdrawal. In May, 1978 the House passed H.R. 39, the Alaska National Inter- ~st Lands Conservation Act. This bill proposed the designation of PAGENO="0074" 70 122.3 million acres of new parks, refuges, forests, and wild and scenic rivers. The bill also designated 65.5 million acres of wilderness within new and existing conservation units. The Senate Energy and Natural Resources Committee reported its version of the Alaska bill in Oc- tober, 1978, but the Senate failed to complete consideration of the legislation prior to adjournment. Following the failure of the legislation in the 95th Congress, the Administration initiated several actions to set aside much of the land at issue. On November 16, 1978, the Secretary of the Interior with- drew for three years all Federal lands in Alaska which had been pro- posed for designation as new parks, refuges, forests or wild and scenic rivers. This action precludes any State selection or development of these areas during the three year period of the withdrawal. On December 1, 1978, the President, using authorities in the Anti- quities Act, established 17 new national monuments in Alaska, com- prising 56 million acres. The President's National Monuments Procla- mations overlay, in part, the earlier Secretarial withdrawal. The new national monuments include two areas that were proposed as wildlife refuges in the House-passedlegislation, as well as all 13 areas proposed for national park status by H.R. 39. The President's declaration will be permanent unless it is modified by Congress. The President did not designate fifteen areas proposed for wildlife refuge status in the House-passed bill. The Presidential designations also failed to address many of the .other issues involved in the (d) (2) debate including Federal-State cooperation, subsistence, wilderness, transportation, and mineral development. The Alaska National Lands Conservation Act is the most sweeping environmental measure ever considered by the Congress. The designa- tions made in this bill dwarf previous environmental actions such as the creation of the National Forest System and the designation of Yosemite and Yellowstone National Parks. This one bill will double the size of the National Park System and nearly quadruple the size of the National Wildlife Refuge System and the National Wilderness Preservation System. The (d) (2) issue is much more than an environ- mental ouestion, however. The decisions made in this bill will affect the availability of wildlife, recreational, and mineral resources of the State for decades to come. It will have significant impacts on the `State of Alaska's and this Nation's future economic potential. Alaska lands baekground-96th Congress At the beginning of the 9th Congress, H.R. 39 was introduced by Mr. Udall on January 15, 1979. This bill was jointly referred to the Committee on Merchant Marine. and Fisheries `and the Committee on Interior and Insular Affairs without instructions other than the notification that the bill was referred to each committee for a period ending not `later than March 19, 1979. H.R. 39, as introduced, repre- sented a different proposal from that which passed the House or was introduced in the 95th Congress. On February 15, 1979, two additional bills were introduced. Mr. Murphy of New York and Mr. Breaux introduced JLR. 2219. This bill reflected the House adopted version of H.R. 39 in the 95th. Congress. PAGENO="0075" 71 Mr. Huckaby introduced H.R. 2199 on this same day which reflected the so-called House-Senate-Administration compromise of the 95th Congress. Both bills were referred jointly `without instruction to the Committee on Merchant Marine and Fisheries and the Committee on interior and Insular Affairs. No time limit was placed on either ot these bills. The Interior and Insular Affairs Committee conducted four days of hearings on H.R. 39 in February. After conducting two days of markup on H.R. 39, the Committee reported, by a vote of 2~~T20, a. substitute to the text of H.R. 39. The substitute text, offered by Mr. Huckaby, was identical to H.R. 2199 as introduced. The Subcommittee on Fisheries and Wildlife Conservation and the Environment of the Committee on Merchant Marin~ and Fisheries held five days of hearings in Washington, D.C. and a 13-hour hearing in Fairbanks, Alaska. Because of the fact that nine new Members were appointed to the Committee and because a new Subcommittee Chair~ man was elected during the 96th Congress, the Speaker was requested to extend the March 19th deadline to allow the Subcommittee adequate time to `responsibly consider the pendiitg legislation and to permit a visit and a hearing in the State of Alaska. The Speaker extended the reporting deadline for both Committees until April 23, 1979. During the course of the hearings, 126 witnesses appeared before the Subcommittee. Members and staff of the Subcommittee traveled to Alaska during the period March 8th to March 12th, during which time visits were made to Fairbanks, Prudhoe Bay, Anchorage, Cordova, and Valdez. In addition to site visits, overflights were conducted of the Yukon Flats, Arctic National Wildlife Range, National Petroleum Reserve (Alaska), Copper River Delta, and the Kenai Moose Range. On March 28th, the Subcommittee proceeded to markup H.R. 2219. An amendment, in the nature of a substitute, wa's offered by Mr. Dingell and a discussion of the substitute with a comparison between it and other pending Alaska lands legislation was conducted. Subcommittee markup continued on March 29th and amendments were offered to the amendment in the nature of a substitute. The Sub- committee favorably adopted the substitute and ordered it reported to the Full Committee as an amendment in the nature of a substitute to the bill, H.R. B9. The Full Committee considered the Subcommittee bill on April 9th. Various amendments were considered and adopted to H.R. 39, as amended by the Subcommittee. The Subcommittee bill, as amended by the Full Committee, was adopted by voice vote with a quorum present. The Committee reported H.R. 39 to the House as amended on April 23, 1979' (H. Rpt. 96-97, Part II). H.R. 39, as reported by the Committee, would be the most sweeping single land and wildlife, conservation measure ever passed by the Con- gress. This one bill would double, the size of the existing National Park System and nearly quadruple the size of the National Wildlife Refuge System and the National Wilderness Preservation System. The following is a summary of the major provisions of the Committee bill. ` PAGENO="0076" 1. Acreage sum~nui.ry.- Parks and preserves Wildlife refuges Forests Conservation areas (BLM) Special management areas (forest) Recreation area (forest) - Total 2. lVilderness acreage.- Parks and preser'~~ 1Vi1~1Hf~ -- -- -- Millions of acres 32~ 38 87. 79 2.45 1.99 2.32 1.21 128.14 21. 02 29. 69 Forests 2.93 Total 53.64 3. Total conservation system acreage.-The Committee bill would establish 128 million acres of new parks, refuges, forests, recreation areas and conservation areas in Alaska. This represents 6 million acres more than were established in the House-passed bill of the 95th Con- gress, and 28 million acres more than were included in the bill reported by the Interior Committee. 4. Wildlife refuge acreage.-The Committee bill would establish 88 million acres of new national wildlife refuges in Alaska. Thus com- pares to 50 million acres included in the bill reported by the Interior Committee. 5. Wilderness.-The Committee bill would establish 58.6 million acres of wilderness within refuges, parks and forests. 6. Arctic National Wildlife Ref uge.-The Committee bill would establish 11.5 million acres of wilderness within the proposed Arctic National Wildlife Refuge. It did not designate wilderness within the coastal plain of the existing Arctic Range which has been identified as the highest potential onshore oil and gas a!rea in the State. Instead, the bill established a seven-year resource assessment and exploration program in the coastal plain subject to strict environmental standards set by the Department of the Interior. 7. TVild and scenie rivers.-The Committee bill would designate 25 river or river segments as components of the Wild and Scenic River system, and 14 rivers as potential additions to the System. 8. Oil and gas.-The Committee bill would permit oil and gas leasing in non-wilderness wildlife refuges if the Secretary determines that it is compatible with the refuge. 9. Flardrocl mining.-The Committee bill withdrew approximately 50 percent of the lands rated favorable for hard mineral development. It permitted hardrock mining in wildlife refuges subject to a deter- mination by the Secretary that the mining activity can be carried out in a compatible manner. 10. Subsistence management and use.-The Committee bill au- thorized the `State to manage the takino' of fish and wildlife for sub- sistence uses under Federal standards. ~he bill established a statutory preference for subsistenc~ resource uses over other uses including sport hunting and fishing. 11. Tra~wportation.-The bill resolved the procedural morass of existing law and established a coordinated transportation planning 72. PAGENO="0077" 73 und approval process within the State. It insured continued, non- destructive, access into and within the various conservation units. 12. State $elections.-The bill recognized the State of Alaska's legitimate rights guaranteed it by thd 1958 Statehood Act. The bill included a titTle providing for the expedited transfer of lands selected by the State. The House considered H.R. 39 as reported by the Committees on Merchant Marine and Fisheries and Interior and Insular Affairs on May 4, 15, and 16, 1979. By a vote of 268 ayes to 157 noes the House adopted a substitute amendment to H.R. 39 as reported by the Com- mittee. The following is a discussion of the major provisions of the House-passed bill: 7. Acreage snm~mary.- ~l(l:Co~ Parks and preserves 44.0 Wildlife refuges 79. 0 Forests 2.5 Total 125. 5 2. Wilderne&s acreage.- Parks and preserves 84. 1 Wildlife refuges 27. 5 Forests 5.. 9 Total 67.5 3. Arctic National Wildlife Ref uge.-The House-passed bill estab- lished a 13.4 million acre wilderness in the Arctic National Wild- life Refuge, including the coastal plain which is believed to be the highest potential onshore oil and gas area in the State. The Commit- tee bill established an 11.5 million acre wilderness in the Range, and had established a special study area in the coastal plain. 4. SouAea&t Wilderness.-The House-passed bill establishes 5.9 million acres of wilderness in Southeast Alaska. The Committee bill established 2.9 million acres of wilderness. 5. Hardroclc Qrtining.-The House-passed bill blOcks the develop- ment pf 4 of 9 major mineral discoveries in the State. The bill reported by the Committee permitted all nine to proceed under stringent environmental regulation. ~. Sport hunting.-The House-passed bill closes several of the major spor~ hunting areas in the State by the designation of national parks. The bill reported by the Committee placed these areas into ~iidlife refuges, tb~r~by allowing hunting. 7. State lands.-The House-passed bill includes approximately 4 million, acres of State inholding within conservation units. It denies the State appro*imateiy 12 million acres of State selections identified in November, 197~. The Committee bill conflicted with approximately 63 million acres of State selections and bill virtually excluded all existing State lands from the conservation units. ~ Zransportation.-The House-passed bill, unlike the bill reported by the Committee~ did not include a provision resolving the pro- cedurai morass of existing transportation law. The House-passed bill ah~o fai1~d to establish a coordinated transportation planning process in the State~ , , PAGENO="0078" 74 9. Bristol Bay planning region.-The House-passed bill, unlike the Committee bill, failed to establish a joint Federal-State land use planning process in the Bristol Bay-Alaska Peninsula Region. The Senate Energy and Natural Resources Committee reported their version of H.R. 39 on November 14, 1979. No further action on the legislation has been taken. 11.1?. 1798-Fishery Conser'vation and Management Act Ant horisation The Fishery Conservation and Management Act of 1976 (FCMA) was enacted in order to establish a comprehensive management pro- gram for the fishery resources found within 200 miles of U.S. coasts. By providing an effective conservation and management program, the legislation also established the economic framework within which the U.S. fishing industry could be developed. The 1976 Act authorized appropriations of $25 million in FY 1977 and $30 million in each of the fiscal years 1978 and 1979. On February 1, 1979 a bill to authorize appropriations to carry out the FCMA was introduced by Mr. Murphy of New York and thirteen co-sponsors. This bill, H.R. 1798, established an authorization of $30 million for each of fiscal years 1980,1981, and 1982. A hearing was conducted on H.R. 1798 on March 7, 1979. All witnesses testifying at the hearing supported extending the authoriza- tion. The witnesses were: Terry Leitzell, Assistant Administrator for Fisheries, National Oceanic and Atmospheric Administration, De- partment of Commerce; Richard Sharood, Counsel, National Federa- tion of Fishermen (accompanied by Jake Dykstra, Point Judith Fishermen's Association); Jim Branson, Executive Director, North Pacific Fishery Management Council; and John Bryson, Executive Director, Mid-Atlantic Fishery Management Council. Mr. Leitzell recommended that the Act be extended for a period of three years with a funding level of $27,106,000 for FY 1980, and such sums as may be necessary for fiscal years 1981 and 1982. Execu- tive Communication Number 1108 dated March 28, 1979, paralleled Mr. Leitzell's testimony. After giving careful consideration to the testimony presented at the hearings, the St~bcommittee, on April 27, 1979, ordered H.R. 1798 reported to the Full Committee with an amendment. On May 3, 1979 the Full Committee, by unanimous voice vote, ordered the bill reported to the House, as amended by the Subcommittee, with addi- tional amendments. The Subcommittee amendment, adopted by the Full Committee, would increase from $30 million to $33 million the amount authorized to be appropriated for FY 1980, from $30 million to $40 million for FY 1981, and from $30 million to $47 million for FY 1982. The amendment adopted by the Full Committee would increase the vot- ing members of the Pacific Fishery Management Council from 13 to 15 and would make a technical change to the title of the legislation. The Committee has noted in prior years that the responsibilities of the councils with respect to preparation of Fishery Management Plans are enormous. The Committee has been very concerned that the Secretary has not made available to the councils adequate funds. While the councils have requested $11.8 million for FY 1980, the National PAGENO="0079" 75 Marine Fisheries Service (NMFS) estimated that the councils will actually spend $7.6 million, and the President's budget contains only $6.1 million for this purpose. Therefore, to make up the difference between the NMFS's estimate and the President's budget, the Com- mittee provided an additional $1.5 million for FY 1980. In addition, the hearings indicated that there is often a lack of adequate biological data and fisheries statistics upon which to base fishery management plans. As long as this situation continues, it will be extremely difficult to prepare management plans which comply with the intent of the Act. The President's budget reduced the amount currently available for fishery research under the PUMA by $500,000 for FY 1980. The Administration's FY 1980 budget also denied the request by NMFS for an additional $3.7 million for fishery research. Therefore, in addition to the $1.5 million for the operation of fishery management councils, the Committee restored the $500,000 deleted from the current program and added the $3.7 million requested by NMFS for a total authorization of $83 million for FY 1980. In addition to extending the authorization for the PUMA, H.R. 1798 increases from 13 to 15 the voting members of the Pacific Fishery Management Council. Considering the numerous and varied fisheries that fall within the council's jurisdiction, the Committee adopted an amendment offered by Mr. AuCoin so that the diverse fishing interests of the Pacific region could be adequately represented. While other substantive changes were considered in Subcommittee and Full Committee mark-up, the Committee Members agreed to limit the changes to the FCMA until after it had an opportunity to conduct an oversight hearing on the Act later in the session. There- fore, the bill, as amended by the Committee, was presented before the Full House under Suspension of the Rules on June 25, 1979. H.R. 1798, as amended by the Committee, was passed. On April 30, 1979 the Senate considered and passed S. 917, a bill which authorized appropriations to carry out the PUMA as well as to amend the Act in several other ways. The Senate bill authorized appropriations in the amount of $30 million for FY 1980~ $40 million for FY 1981, and ~47 million for FY 1982. Section 2 of the Senate bill stated that all vessels engaged in fisheries harvested by U.S. fishermeii are to be U.S.-built vessels if they are to be treated as a vessel of the United States for purposes of the PUMA. In addition, Section 3 of the Senate bill amended the FCMA to provide that any foreign Nation which is certified by the Secretary of Commerce as being in violation or undermining the effectiveness of any international whaling or fishery agreement will be denied access to the U.S. 200-mile fishery zone for as long as such conditions exist. A separate oversight hearing was conducted by the Subcommittee to address the specific changes in law proposed by the Senate bill, S. 917. This oversight hearing is covered in a separate section of this report. Subseouently. in `order to resolve the differences between the Senate and the House bills. Members of the House and Senate and their staffs conferred and arrived at compromise language. PAGENO="0080" 76 The basic content of the compromise retained the I-louse version of the authorization language at $33 million for FY 1980, $40 mil- lion for FY 1981, and $47 million fo,r FY 1982. The compromise language retained the Senate provision that would prohibit foreign- built fishing vessels flying the U.S. flag from fishing within the 200-mile fishery conservation zone of the United States, and retained, but rewrote, the Senate amendment that would deny fishing permits to nations whose natioimals are certified by the Secretary of Com- merce as being in violation of an international whaling or fisheries agreement. The revised version of this Senate provision would restrict the certi- fication made by the Secretary of Commerce for purposes of the FCMA to those nationals from foreign coi.mtries who are conducting fishing operations or engaging in trade or taking under circumstances which diminish the effectiveness of the International Convention for the Reg- ulation of Whaling (TWC). The original Senate amendment would have applied to any international fisheries conservation program to which the United States was a signatory. The compromise language would apply only to whales. Secondly, with respect to any nation which the Secretary of Com- merce has certified as being in violation of the IWTC, the Secretary of State is required t.o immediately reduce the unharvesteci portion of any allocation to such nation by not less than 50 per cent. Therefore, this provision would penalize such foreigii nation immediately, rather than having to wait until the next allocation period comes up. If no action is taken by such foreign nation to change. the circumstances under which it was certified before the e.nd of the allocation period or the end of one year, whichever comes first, then the Secretary of State would he re- quired to reallocate the remaining unharvested portion of such alloca- tion among other foreign nations. Thirdly, the Fishermen's Protective Act would be amended to make it clear that the Secretary of Commerce or the Secretary of the Inte- rior, as the case may he, would be recuiired to closely monitor the activi- ties of foreign nations that may effect any international fishery con- servation program; to promptly investigate any activity which its agency has uncovered or which has been brought to the attention of such agency which may be cause for certification; and to promptly conclude ~ncl reach a decision with respect to any investigation commenced. Finally, the Senate offered an amendment which was accepted by the I-louse that would authorize the vessel, WIDOW MAKER., to he docmnent.ecl as a. vessel of the United States for the purpose of e.ngag- in~ in a coast,wise trade in fl~heri.es of the United States. This was a special ease situation in which the vessel was built in Norway and hail mc't all U.S. and navigation reqmrements. This compromise language was offered as an amendment to the Tio~i~e bill by the Senate on August 1, 1979, accepted by the House oi.i August 2, 1979. and the President signed it into Public Law 9~-~1 on August 15, 1979. ]TJJ?. ~O43-To Amend the Water Bank Act The Water Bank Act (Public Law 91-559) directs the Secretary of Agriculture to carry out a continuous program to prevent the serious PAGENO="0081" 77 loss of, and to preserve, restore and improve, wetlands which are im~ portant migratory waterfowl nesting and breeding areas. To carry out. the Act, the Secretary is authorized to enter into agreements with, and make payments to, owners and operators of farms, ranches, or other lands containing such wetlands. Each agreement is entered into for a period of 10 years and may be renewed for additional 10-year periods. The owner or operator receives an annual payment for the period of the agreement at such rate as the Secretary determines to be fair and reasonable as well as a part of the costs of establishing and maintain~ ing those conservation and development practices on the affected areas as the Secretary determines to be appropriate. The annual payments are constant during the 10-year period and are set at the time of the initial agreement. They are established as the rate at which the land owner could rent the land if it were not in the program. During periods of rapid inflation and rising land and crop prices, many land owners have found it more profitable to put their land to use in other than Water Bank agreements and, consequently, the termination rate appears to be increasing in those states where land values and rental rates are increasing. The General Accounting Office estimates that 38 percent of the agreements will be terminated before the end of the 10-year period. In addition, President Carter's 1977 environmental message to Congress expressed concern for the rapid loss of our nation's remaining wetlands. The Department of the Inte- rior estimates that we are losing some 300,000 acres each year, mostly through conversion to agricultural production. The greatest losses are presently occurring in the lower Mississippi River region where there is a loss of 30,000 to 65,000 acres of wetlands annually. These bottom- land hardwood swamps are among the most important breeding areas for wood ducks and major wintering areas for many species of waterfowl. The term wetlands, as defined in the Act, includes types 1 through 5 wetlands as described in the Department of the Interior's "Circular 39, Wetlands of the United States". These are inland fresh water areas which are seasonally flooded and permanent fresh water marshes. Because the bottomland hardwood swamps in the lower Mississippi River region contain types 6 and 7 wetlands (inland fresh shrub and wooded swamps), much of the area is ineligible for the Water Bank Program. JI.R. 2043 was introduced on February 8, 1979, by Mr. Oberstar to provide for an adjustment in the payment rates. The Subcommittee held hearings on the legislation on April 23, 1979, and after giving careful consideration to the testimony presented, considered the bill during a markup session on April 30, 1979. The Subcommittee adopted several amendments to the bill as introduced. The amendments would make three major changes in the Water Bank Act. First, the areas eligible for ~inciusion in the Water Bank Program would be expanded to include types .6 and 7 wetlands (shrub and wooded swamps) and such other wetland types as the Secretary decides are appropriate. This will allow the Secretary the discretion to select additional wet- land areas which are threatened by drainage and clearing. Second, the Secretary is directed to adjust the payment rates five years after the date of the initial agreement or any renewal agreen~ent to reflect rising land and crop prices. The purpose of this amendment is to 56-410-80-6 PAGENO="0082" 78 provide an incentive for landowners to keep their land in the program ~ind to cut back on the termination rate. Third, the annual ceiling on ~tuthorizations to carry out the Water Bank Program was increased from $10 million annually to $30 million annually in order to allow for program expansion, accommodate the backlog of landowner re- quests, and cover the additional acreage and adjusted payments re- suiting from the amendments. H.R. 2043, as amended, was favorably reported to the Full Com- mittee by voice vote on April 30. On May 2, 1979, the Full Committee considered the bill as amended by the Subcommittee and favorably reported the legislation without further amendment by voice vote. The legislation was passed under Suspension of the Rules by the I-louse on July 9, 1979, and is presently pending before the Senate Committee Dfl Agriculture, Nutrition and Forestry. 11.1?. ~2218-Authori~ing appropriations for the Endangered Species Act Congressional concern about rapidly deteriorating fish, wildlife and -plant habitat, the indiscriminate utilization of plants and animals and the increasing number of species threatened with extinction resulted in a series of legislative actions culminating in the enactment of the Endangered Species Act of 1973. The Act repealed the Endangered Species Conservation Act of 1969, broadened Federal responsibilities to list species and strengthened Federal programs for assuring the survival of species. The primary purpose of the Endangered Species Act of 1973 is to prevent the endangerment and extinction of animal and plant species as a result of man's influence on the ecosystem and to return these spe- eies to the point where they are viable components of their environ- ment. The Department of the Interior estimates that in the United States 20 species become extinct each decade and an even greater num- ber enter the endangered category. If this rate were applied world- wide, then an esti~m~ted 300 species become extinct each decade. The endangered species program is implemented through three processes. First, the listing of species as either endangered or threatened depend- ing upon the degree of threat to their survival. Second, the Act re- ~uires that all Federal agencies consult with the Department of the Interior or the Department of Commerce (depending upon whether the species is a terrestrial or a marine species) on the effect of any action prtposed to be taken by the agency which is likely to affect an endangered or threatened species or such species' critical habitat. The Act further requires that Federal agencies insure that their actions will not adversely affect listed species or their critical habitat. Third, the Act provides for the establishment of recovery plans for listed species to insure that these species will not become extinct, but will return to a viable role in the ecosystem. H.R. 2218, which extended the authorization for the Act for three years, was introduced on February 15, 1979. by Mr. Murphy of New York and 11 cosponsors. As introduced, the legislation authorized the Department of the Interior to expend $25 million in each of Fiscal Years 1980, 1981, and 1982 to carry out its responsibilities under the Act. The Department of Commerce was authorized $3 million in each of Fiscal Y~ars 1980, 1981, and 1982. To assist the Endangered Species PAGENO="0083" 79 Committee and the review boards in carrying out their functions re~ lating to the granting of exemptions for Federal projects from the provisions of the Endangered Species Act, H.R. 2218 authorized $600,- 000 for each of the Fiscal Years 1980, 1981 and 1982. Hearings were held on this legislation by the Subcommittee on April 6, 1979. On April ~7 the Subcommittee ordered H.R. 2218 reported with an amendment. The amendment would extend the provisions of section 10(f) of the Act for an additional three years. Under section 10(f), persons own- ing any whale parts or products lawfully held within the United States on December 28, 1973, in the course of a commercial activity were authorized to apply for a three-year exemption. As reported, H.R. ~2218 would extend this three-year exemption for an additional three years. It was felt that the additional three-year extension would allow sufficient time for scrimshaw artisans to complete work on pre-Aet scrimshaw products and dispose of such products. On May 3, 1979, `the Full Committee ordered H.R. 2218 reported as approved by the Subcommittee. H.R. 2218 was considered by the House on October 24, 1979. During `the consideration of this measure, several amendments were adopted. These amendments, offered by Members of the Committee, incor- ~porated a number of suggestions and recommendations which were received by the Subcommittee during its oversight hearings on the Act which were held subsequent to completion of the Committee's ~action on H.R. 2218. The substance of the oversight hearings is de- scrIbed in another section of this report. The amendments aecom- plish several purposes. The amendments: (1) clarify that Federal agencies need not "insure" that their actions would not adversely affect endangered and threatened species and their critical habitats. Since it is unrealistic to require any agency to give a 100 percent guarantee, the amendment changed the Act to require that Federal agencies only' insure their actions are "not likely to" adversely affect the species and their habitats; (2) clarify that if the Endairg~ed Species Committee approves an exemption under the Act it is to be a project exemption and not a species exemption: (3) authorize permit and license applicants to conduct' bio- logical assessments under the Act, thns allowing them to apply for exemptions under the Act; (4) require Federal agencies to confer on species which are proposed for listing; (5) require the Secretary to establish regulations to insure that species facing the highest degree of threat receive priority review for listing and for the development of recovery plans; (6) designate the Secretary of the Interior as the Scientific Authority and the Management Authority for purposes of imple- menting the Convention on International Trade in Endangered Species of wild fauna and flora; and (7) authorize $1.5 million for Fiscal Year 1980, $1.75 million for Fiscal Year 1981, and $1.85 million for Fiscal Year 1982 for the Department of Agriculture to carry out its responsibilities under the Act. PAGENO="0084" 80 In addition, the amendments made several minor and technical changes to the Act. The. Senate. on June 13, 1979, approved S. 1143 extending the authorization for the Endangered Species Act for three additional years. A conference. to resolve the differences between the two incas- ures was hold on December 4, 1979. The bill agreed to by the conferees essentially adopted the I-louse amendments to the Act and established an authorization level of $600,000 for each of Fiscal Years 1980, 1981 and 1982 for the Endangered Species Committees; $23 million for Fiscal Year 1980, $25 million for Fiscal Year 1981, and $27 million for Fiscal Year 1982 for the Department of the. Interior; and $2M million for Fiscal Year 1980, $3 million for Fiscal Year 1981, and $3.5 million for Fiscal Year 198~ for the Department of Commerce. The. Conference i~eport was approved by the Senate and by the. house on December 19, 1979. S. 1143 was signed into public law by th& President on December 28, 1979. (P.L. 96-159). H.R. 2975-EstabiiRhinq the Chanfnel Is7ands 11 arir~e National ParZ~ in the State of Calif o-rnia The Channel Islands, a group of 8 islands off the coast of southern California in the Santa Barbara, Los Angeles, San Diego area, sit astride a major biogeograpliic.a] break. The break, along which species of different habitats intermingle, is due to the convergence of warm and cold water currents. The result of these two current patterns is that the Channel Islands have a great diversity of flora and fauna which are characteristic, of both the northern a-neT southern climes. In part because of this unique situation, the Channel Islands I)Os- sess the largest and most diverse temperate wate.r pinniped community in the world. Major populations of the northern elephant seal, the. California sea lion, and the harbor seal breed and P111 each year on the rocks and beaches of the Channel Islands. In addition, the. north- ern fur seal and the stellar sea lion have the southern-most. extension of their breeding range in these Islands. The endangered Guadalupe~ fur seal is also found on the Islands. Although these mammals were once abundant in California, habitat destruction and conflict with human activity have significantly reduced suit-able habitat. Today, the Channel Islands provide what may be the final refuge for many of these species. For these reasons, the Channel Islands assume critical importance as a natural area requiring management.. H.R.. 2975, as introduced, was referred to the Committee on In- tenor and Insular Affairs. The legislation established the Channel' Islands Marine. National Park, to be administered by the National Park Service. The legislation designated five of the Islands as 1a1't of the National Park. The remaining three Islands are owned by the Navy and are set -aside for defense purposes. Since one. of the prh~cipal reasons for protecting the area is to conserve the significant marme mammal populations fouridl there, and since the Committee on Mer- chant Marine and Fisheries ha-s jurisdiction over the conservation- and management of marine mammals, H.R. 2975 was sequentially referred to the Committee on Merchant Marine and Fisheries after it was reported by the Committee on Interior and Insular Affairs on- Ma~y.l5, 1979. PAGENO="0085" 81 The Subcommittee conducted one day of hearings on KR~ 2975 on June 5, 1979. The legislation was reported to the Rouse by the Com- m~ttee ~on June 15, 1979. H.R. 2975, as Deported by the Committee on Merchant Marine and Fisheries, differed from the bill as reported by the Committee on Interior and Insular Affairs in two significant respects. First, the Secretary of Commerce was given primary management responsibility for the marine mammal populations on the Channel Islands. The Committeefelt that this~responsibility should not `be vested in the Secretary of the Interior since it is the Secretary of Commerce who has been given the responsibility, pursuant to the Marine Mammal Protection Act of 1972, for the conservation and management of these marine mammal populations. Second,. the sea- ward boundary of the marine park was reduced from one mile to one- quarter of one mile. The primary reason for the one-mile seaward boundary established by the Interior Committee was for the pro- tection of significant marine mammal resources. Since this responsi- bility would be retained by the Department of Commerce, the Mer- chant Marine and Fisheries Committee felt that it was unnecessary to enlarge the Park's boundary beyond the area needed for the en~ Iforoement of Park regulations. H.R. 2975 is now pending before the House. It should be noted, however, that language identical to that contained in H.R. 2975, as reported by the Interior Committee, was added to H.R. 3757 which passed the House on May 7, 1979, under Suspension of the Rules. H.R. 3757 is pending before the Senate. H.R. 3107 and H.R. 602~?-To Establish t1~e Tensas River National Wildlife Refuge On December 7, 1979, the Subcommittee conducted hearings on H.R. 3107 and H.R. 6022. These bills would establish a Tensas Na- tional Wildlife Refuge in the State of Louisiana. The proposed Tensas National Wildlife Refuge woud be located in northeastern Louisiana in Madison and Franklin and Tensas Par~ ishes. This area, which is part of the lower Mississippi flood plain, once contained over 25 million acres of bottomland hardwoods, but has been almost totally converted to agriculture production. Today, there are less than 1.6 million acres of bottomland hardwood remain- ing in the Mississippi River Flood Plain. Throughout the United States, bottomland hardwood habitats are being cleared at a rate ap- proaching 300,000 acres per year. The Department of the Interior estimates that 24 percent of the Nation's population of mallards winter in the bottomland in the Mississippi Delta. The Chicago Mills Tract, which is the focal point of the proposed refuge, is the largest contiguous block of the remaining bottomland' hardwoods in the lower Mississippi flood plain. The owner of the area, the Chicago Mill and Lumber Company, is willing to sell their existing holdings to the Federal Government to preserve this unique area for approximately $50 million. The proposed national wildlife refuge is adjacent to several water projects in planning or under construction by the U.S. Corps of Engineers. The Corps of Engineers is evaluating the possibility of acquiring a portion of the Chicago Mill Tract as mitigation land for PAGENO="0086" 82 several of the proposed projects. The company has indicated, however~ that in the absence of an adequate agreement with the Federal Gov- ernment they intend to clear the area for soybean production. The proposed wildlife refuge lies in an area that has suffered exten- sive habitat losses in recent years. The Fish and Wildlife Service has recommended that the Corps ~f Engineers acquire 610,740 acres of land as mitigation for the loss of 2 million acres of forested wetlands in 39 projects. Of the 610,740 acres of recommended mitigation, oniy 36,683 have been purchased at this time. The Subcommittee received testimony from the Fish and Wildlife' Service, the Corps of Engineers, the Nature Conservancy,. The Mayor of the City of Tallulah, Louisiana, and the President of the Madison Parish Police Jury. No further action was taken on the legislation during the first session. H.R. 3292-The Fish and Wildlife Conservation Act of 1979 The vast majority of the vertebrate species of fish and wildlife'~ (birds, mammals, fish, reptiles and amphibians) in the United States are not harvested for sport, food or fur. These so-called "n'ongame"~ species receive little direct benefit from state and Federal wildlife management programs although they are enjoyed by numerous bird watchers, students, photographers, and nature lovers. Despite the fact that 83 percent of the fish and wildlife found in the continental United States ~re nongarne species, less than 12 per- cent of all Federal and state wildlife management funds are expended' for the direct benefit of nongame species. The effect of this relative~ inattention to the conservation needs of nongame fish and wildlife is reflected in the fact that 86 percent of the vertebrate species currently listed as endangered were considered nongame fish and wildlife at the time of their listing. If nongame species of fish and wildlife continue to be given low priority attention in the conservation and management of this nation's~ natural resources, experts fear that an additional 450 nongame species could be listed as endangered by 1990, 120 within the next five years. Although information on population densities and trends, habitat needs, and even basic life histories for many nongame species are~ largely unavailable, it does appear that the populations of many of these species are declining. The general decline of nongame species is' due, for the most part~ to the deterioration and loss of habitat. Changes in habitat impact on all wildlife populations, but are particularly im- portant for nongame species since there is no specific program for their conservation. The loss of wetlands, open space and other en- vironmentally critical areas is `occurring at an alarming rate. Chan- nelization, changes to more intensive agricultural practices and water' pollution continue to diminish the quality of wildlife.habitat. In fact, the' President's Council on Environmental Quality has estimated that approximately 1.25 million acres-an area the size of Delawar&-are~ converted each year to intensive uses. On March 98, 1979, Mr. Forsythe and 30 other Members introduced' H.R. 3292. The bill was introduced to promote state efforts to benefit iiongarne species. As introduced, the legislation would have provided matching funds to the states to develop and implement comprehensive conservation plans for nongame species. PAGENO="0087" S3 A strong public interest in nongame fish and wildlife was evident during the Subcommittee hearings which were held on April 24-25, 1979. At these hearings, representatives of the Fish and Game Depart- ments of California, Colorado, Missouri, Michigan and New Jersey testified in support of increased emphasis on nongame programs. Numerous conservation and wildlife management organizations also supported strengthening state nongame efforts as did several regional and local public agencies. After considering the testimony, the Subcommittee determined that the most pressing need confronting the states is the need for planning funds. it will require several years before the states are able to com- plete comprehensive plans. Therefore, when the Subcommittee con- sidered the legislation on April 30, 1979, it deleted those provisions dealing with plan implementation. As reported by the Subcommittee, ER. 3292 would provide a total of $19 million over three fiscal years to assist the states in the development of comprehensive fish and wild- life conservation plans. The states would use the funds to inventory and assess resident species of nongame fish and wildlife and to deter- mine the conservation needs of these species. The Full Committee reported H.R. 3292, as reported by the Subcommittee, on May 3, 1979, and the House approved the legislation on July 9, 1979. The bill is now pending before the Senate. H.R. ~O35 (S. 838)-A nadromous Fish Conservation Act The Anadromous Fish Conservation Act of 1965 was enacted for the purpose of conserving, developing, and enhancing the anadromous fishery resources of the nation and the fish in the Great Lakes that ascend streams to spawn. The Act authorizes the Se~retaries of the Interior or Commerce to enter into cooperative agreements with any State containing anadromous fish, any of the Great Lakes States that contain fish that ascend streams to spawn, and any non-Federal inter- ests concerned with the conservation of fish. The agreements describe the actions to be taken by the Secretary and the cooperating parties; the estimated costs of such actions the benefits that are expected to be derived; the share of such costs to be borne by the Federal Government and by the cooperating parties, except that the Federal share may not exceed 50 percent of the cost of an agreement with a single State, and 662/s percent of the cost of a joint agreement with two or more States; and `any other conditions the Secretary deems desirable. In 1978, pursuant to Public Law 95-464, the Act was amended to extend its coverage to include fish in Lake Champlain that ascend streams to spawn. Activities authorized to be carried out pursuant to any agreement include biological or engineering research, stream clearance, the con- struction and maintenance of fish hatcheries, development and man- agement of any body of water included under the Act, and the acquisition of lands and the management of such lands. Among the specie's covered by the Act are salmon, steelhead trout, walleye, shad, sturgeon, and striped bass. Of the 31 States eligible to participate under the Act, 27 States have entered into agreements with the Secretaries. Since the enactment of the Act in 1965, accomplish- ments have been impressive. The $60 million which has been appro- priated has produced economic benefits for the participating States of PAGENO="0088" 84 approximately $560 million in the recreational fisheries and $34.5 million in the commercial fisheries. The Act authorized to be appropriated $20 million per year, in each of fiscal years 1974-79. H.R. 2035 which was introduced on February 8, 1979, by Mr. Murphy and 18 other Members of the Corn- inittee, would authorize $20 million to be appropriated for each of fiscal years 1980, 1981 and 1982. Hearings were held on the legislation by the Subcommittee on February' 28, 1979. All witnesses testifying at the hearings were in strong support of extending the funding authorization and some sug- `gested amendments to the bill concerning Federal funding of the operation and maintenance costs of facilities constructed under multi- State projects and the vesting, with the state, of title to lands acquired pursuant to a project. After givin'g careful consideration to the evidence presented at the hearings,, the Subcommittee on April 27, 1979, ordered H.R. 2035 reported to. the full Committee with amendments. As ordered reported by the Subcommittee, the bill would authorize to be' appropriated $11 million for fiscal year 1980, $13 million for fiscal year 1981, and $15 million for fiscal year 1982. It would' permit the use of Federal funds for `the. operation and' maintenance of facilities constructed under common basin multi-State agreements and require that title to lands acquired pursuant to a project be transferred to the State in which such lands are located, or in the case of the non-Federal party, to such a party. On May 3, 1979, the full Committee ordered the bill reported to the House, as amended by the Subcommittee, with an additional amendment that provided for a study of striped bass. The purpose of the study was to determine the reasons for the sudden decline of the striped bass populations in many areas, thus enabling the states and the Federal Government to take appropriate action to reverse this dsturbrng.trend, Funding for the study was authorized at $1 million for fiscal year 1980, $1,750,000 for fiscal year 1981, and. $2,000,000 ±or fiscal year 1982. H.R. 2035 passed the House under Suspension of the Rules on June 25, 1979. `S. 838, a similar bill, passed the Senate on June 18, 1979. As it passed the Senate,, S. 838 would do four things. First, it would extend the funding authorization of the Act for an additional four years at a level of funding of $10 million, $11 million, $12 mil- lion, and $13 million for fiscal years 1980, 1981, 1982, and 1983, re- `spectively. Second, it would authorize to be appropriated over a four year period $6,750,000 to study the' stri.ped bass on the Atlantic coast. Third, it would increase the amount of funds that could be received by any State from $1 million (present law) to $1 million or 20 per- cent of the funds appropriated in any one year, whichever is greater. Fourth, it included the same provisions as did the House bill with respect to the title to lands acquired pursuant to a project and the `use of Federal funds for the operation and maintenance of facilities `constructed under multi-State projects. After passing ELR. 2035 on June 25, 1979, the House passed S. 838 by striking out all after the enacting clause and substituting the language of H.R. 2035. PAGENO="0089" 85 With a view toward avoiding a conference on the bill, the Members~ and staffs of the Committee on Merchant Marine and Fisheries an~ the Senate Committees on Environment and Public Works and on~ Commerce, Science, and Transportation worked out compromise lan- guage to which both the House and Senate committees agreed. The net effect of the Senate amendment to S. 838, which reflected the compromise language, was as follows: It deleted the prohibition in present law on the use of Federal funds to operate and maintain: multi-State common basin facilities constructed under the Act and it allowed the operation and maintenance costs of such facilities to be' cost-shared on the same basis as the cost of other aspects of multi- State projects, that is, two-thirds Federal and one-third State; it de- leted the requirement of present law that title to lands acquired under the Act be vested in the United States and provided instead that title to such lands be vested in the States or any other non-Federal party involved; it extended the Act for 3 years at $11 million, $13 million and $15 million for fiscal years 1980, 1981, and 1982, respectively; it increased the maximum amount of Federal funds any State could re- ceive in any year under the Act from $1 million to $1.25 million; and it provided for a 3-year striped bass study at a total cost of $4,750,000.. S. 838, as amended, passed the Senate oi November 1, and the House on November 2, 1979. On November 16, 1979, it became Public Law 96-118. FI.R. 4360-To promote the development of an American fishing in- dustry in certain underutilised $peci.48 On September 11 and 24, 1979, the Subcommittee held hearings on' H.R. 4360, a bill to promote the development of an American fishing industry in certain underutilized species. The measure was initially sponsored by Mr. Zeferetti and fifteen other Members. The bill would allow foreign vessels to operate for limited periods of time in the U.S. zone with two privileges: the right to land fish in U.S. ports (thus' amending the Nicholson Act) and preferential treatment in the allo- cation of the total allowable level of foreign fishing, (TALFF) (thus amending the Fishery Conservation and Management Act of 1976). Fifty percent of the TALFF could be allotted to this program. It would be required that U.S. crewmen be trained aboard foreign vessels participating in the program and that the foreign companies involved build replacement vessels in the U.S. Testimony was received in favor of the bill from: Mr. Zeferetti; Mr. Corrada; Donald Allen, Puerto Rican Economic Development Association; Charles Mollard, Seafarers International Union of North' America, AFL-CIO; Jean Ingrao, Maritime Trades Department, AFL-CIO; Gloria Catanes Rudman, International Longshormen's Association, AFL-CIO; Mich~el Orlando, Atlantic Fisherman's Un- ion, Gloucester, Massachusetts; Page Groton, International Brother- hood of Boilermakers, Iron Shipbuilders, Blacksmiths~ Forgers, and Helpers; George C. Gellert, 13orinquin Fisheries, Ltd., New York, New York; Raymond F. Gerson, Fisheries Development Corporation, New York, New York; Merle Adilum, Port Commissioner, Port of Seattle; and Robert Vahey, Transportation institute. Opponents in- cluded: Terry Leitzell, National Marine Fisheries Service; Charles PAGENO="0090" 86 Carey, National Food Processors; Robert Alverson, Fishing Vessel Owner~s Association, Seattle, Washington; Lucy Sloan, National Fed- eration of Fishermen; Frank Stewart and Daniel Webster, Stewart Fisheries; Earl Conrad, Zapata Protein, Houston, `Texas; Kenny Daniels, Daniels Enterprises, Inc., North Carolina; and Gustave Fritschie, National Fisheries Institute (accompanied by Robert F. Morgan, Pacific Seafood Processors Association). Others testifying were: Earl B. Combs, Earl B. Combs, Inc. (accompanied by J~ff~ey `Toboiski) ; and William Utz, National Shrimp Congress (accompanied ~by Ed Wolfe). Proponents of the bill testified that fisheries development in the United States is inhibited `largely by a lack of advanced fisheries technology and a labor pooi skilled in fishing and processing under- utilized species, such as squid, pollock and hake. The bill was supported `on the argument that it would reduce the effect of these inhibitors and contribute to national employment and trade balance. Particular po- `tential benefits for Puerto Rico were noted. The Administrafion testified that the bill is not needed, because crew training and technology are available commercially, without Federal intervention such as that contemplated by H.R. 4360. The Administra- `tion also expressed the belief that the bill could, in fact, have a negative impact on fisheries development by opening the door to greater utiliza- tion of foreign vessels within the U.S. 200-mile zone for foreign `markets and could reduce the incentive for any development of new `fisheries by the U.S. industry. Industry opponents of the bill generally agreed with the Administra- tion ~position. These witnesses noted that U.S. fishermen were already moving into underutilized fishery development, without programs such as that contemplated by H.R. 4360. Other factors were said to be in- hibiting more vigorous underutilized fisheries activities by U.S. fisher- men and the bill failed to provide the kind of assistance that is really needed. Other testimony pointed to the general benefits to be derived from full utilization by U.S. fishermen and fish processors of the' fish in the U.S. zone. In particular, it was noted that 43,000 new jobs could be generated and the U.S. international trade deficit could be reduced by `almost $2 billion. Finally, one witness pointed to the need to assure that a substantial portion of the TALFF remains available for use as a bargaining chip `to obtain U.S. access to foreign fisheries. No further action was taken on H.R. 4360 following the two days of hearings. FLR. 4084-To Authorize Mitigation for the Suismi Marsh On May 14, 1979, Mr. Fazio and 20 other members introduced H.R. 4084 which would require the Secretary of the Interior to enter into a cooperative agreement with the State of California to mitigate the adverse impacts of the Bureau of Reclamation Central Valley Project `on the Suisun `Marsh in California. The cooperative agreement would reimburse the State of California for half of the cost of mitigation facilities now under construction by the State of California. These mitigation facilities estimated to cost $5 million are intended to lessen PAGENO="0091" 87 the impact reduced fresh water flows and increased salinity levels in th~ Marsh that had been caused by State and Federal water diversion. Suisun Marsh is the largest contiguous marsh in California and the largest remaining wetland in the San Francisco Bay area. It in- eludes more than 10 percent of the Central Valley's remaining wet- lands. Brackish water in the Marsh is affected both by the fresh water drainage of the Central Valley and the tide of salt water of San Francisco Bay. Although the abundance and diversity of the wetland vegetation in the marsh supports more than 250 species of fish and wildlife, its major importance is its value to migratory birds. California is the wintering ground for 60 percent of the waterfowl populations of the Pacific Flyway. Suisun Marsh winters a substantial portion of these birds. Noimal wintering population in the Marsh is in the order of several hundred thousand birds with peaks of over one million reached at certain times. The major threat to the Marsh is increased ocean salt water intru- sion into the bays and sloughs surrounding the marsh due to increased water use in the Central Valley. Ocean salt water intrudes into the marsh when the fresh water outflow falls below the level needed to prevent the tides from carrying the salt water upstream from the upper San Francisco Bay. The problem of salt water intrusion into the Marsh became especially acute during the recent California drought. Despite the fact that the problems of the Suisun Marsh are caused equally by State and Federal water diversions, the State of California has on its own proceeded to mitigate the adverse impact of the water diversions. The State is currently constructing mitigation facilities to prevent the salinity levels within the Marsh from reaching damaging levels. H.R. 4084 recognizes the Federal responsibility for a portion of the problem, and would authorize the Secretary of the Interior to reimburse the State for half of the cost of the facilities. The Subcommittee held hearings on September 27. 1979, and re- ceived testimony from the Bureau of Reclamation, the Fish and Wild- life Service, the California Department of Fish and Game, and the California Waterfowl Association. The Subcommittee ordered the bill reported to the Full Committee with amendments on November 7, 1979. The Full Committee ordered the bill, as amended, reported to the House on November 8, 1979. The legislation passed the Housa under suspension of the rules on December 10, 1979. H.R. 5604-The Lacey Act Amendment~ of 1979 On October 17, 1979, the Subcommittee conducted a hearing on H.R. 5604, a proposal drafted by the Carter Administration to revise the Lacey and Black Bass Acts, which was introduced by Chairman Murphy and three other members on October 16. The Lacey and Black Bass Acts currently restrict the importation and interstate transportation and sale of illegally taken fish and wild- life species. These two statutes serve as the major Federal effort to assist States and foreign nations in the enforcement of their wildlife statutes. The theory of these statutes is simple. The Federal Govern- ~ment should attempt, where it can, to prohibit interstate transporta- PAGENO="0092" 88 tión of fish and wildlife products where the products are taken, pos- sessed, transported or sold in violation of a state or foreign law. These statutes are consistent with the traditional Federal-State rela- tionships in the area of wildlife management. Under our system, thefl individual States have the major responsibility for the conservation of fish and wildlife resources. The States, however, cannot do the job~ by themselves. The Federal Government has the responsibility to- assist the States' conservation efforts by prohibiting interstate corn- merce of wildlife products taken in violation of state law. The Lacey and Black Bass Acts might be considered the cornerstone of all wildlife laws since they control trade in thousands of species protected by State and Federallaws. As written, however, these Acts contain sevei~al enforcement problems. The following enforcement problems were identified in the President's environmental message: (1) The Acts include a culpability standard more stringent than the one found in almost all other Federal laws, including' environmental laws; (2) They are limited in scope; (3) The Black Bass Act's fish regulations are weaker than, and inconsistent with, the Lacey Act's wildlife regulations: (4) Unlike other wildlife laws, these Acts do not include strict liability forfeiture porvisions; and (5) They do not include a felony penalty scheme. The Subcommittee received testimony on H.IR. 5604 from depart- mental witnesses, the Pet Industry Joint Advisory Council, environ- mental groups, and other interested individuals. No further action- was taken on the legislation. FL!?. 5679-Tinicum NationaZ Environmental Center Authorization. Tinicum Marsh is located in Delaware County, Pennsylvania, and is adjacent to the City of Philadelphia. It is the last remaining fresh water tidal wetland on the Delaware River. At one time the Marsh covered several thousand acres which were utilized as feeding and nesting habitat for waterfowl and other wildlife. However, due to urban expansion in Philadelphia, the Marsh was converted for in- dustry. homesites, roads and waste disposal. By 1960, only 900 acres re- mained, of which about 200 acres resembled their natural state. A controversy arose in early. 1969 over whether to construct a high- way and dump fill project or to preserve the last of the remaining~ marsh ecosystem. The Department of the Interior refused to grant a highway right-of-way through those lands which had been donated or transferred to them, and litigation halted expansion of the dump. Con- gress finally assured preservation of the Tinicurn Marsh in 1912 through enactment of Public Law 92-326 which directed the Secretary of the Interior to create a refuge and environmental center in the' southwest corner of Philadelphia to be known as the Tinicurn National Environmental Center. H.R. 5679 was introduced `by Chairman Murphy and four other members on October 23, 1979, to provide additional authorization for Tinicum. The Fish and Wildlife Service plans to acquire a total of about 1,100 acres for the `Center. The Service had previously estimated PAGENO="0093" 89 that $6.6 million would be required to complete acquisition of these lands, but due to escalating land values and the addition of buffer lands to the concept plan, they have revised that figure to $11 million. Consequently they are seeking an additional $4.4 million authoriza- tion in order to complete acquisition. In addition, the Service has re- quested a $4 million authorization for th~ construction of environ- mental education facilities and "such sums as may be necessary" for carrying out other development projects at the Center. The Subcommittee held hearings on J-I.R. 5679 on October 25, 1979. `Testimony presented by a representative of the Fish and Wildlife Service indicated that the high land prices and rehabilitation costs are among the most serious disadvantages of the urban refuge. They do not know the extent of rehabilitation work that will be necessary to stabilize the Folcroft landfill-a 40-foot high former industrial dump that is leaching pollutants into Darby Creek. The spokesman for the Service stated that until the area is acquired and they actually begin work, they will not be able to calculate total costs. lIe also mdi- ~cated that major revisions have been made in the draft Master Plan and they expect to have a final version by January 1980. Because the Service was unable to provide estimates as to what the development costs would be, the Subcommittee requested and is await- ing further information and cost estimates before taking further ac- tion on H.R. 5679. Hi?. 4889-Great Diaimal Swamp Natio'mal Wildlife Refvge Autliori- zatioii The Great Dismal Swamp, 60 percent of which lies in Virginia and 40 percent in North Carolina, comprises approximately 385,000 acres. In 1972 Congress enacted Public Law 92-478 whiëh authorized a `study to determine the feasibility of preserving it as a public trust. Concurrent with cQnsideration of the legislation, the Union Camp Company turned over its interest in 49,O97~ acres of the Swamp~to the Nature Conservancy who subsequently deeded the laud ~ th~ ~Depart- ment of the Interior in 1973 to be managed as a national wildlife refuge. This donation represented about 20 per~ent of the Swamp's total remaining acreage. The Great Dismal Swamp National Wildlife Refuge was estab- lished under Public Law 93-402 in 1974. Under the Act the refuge was to consist of the 49,000-acre donation and sueh additional lands and waters that the Secretary of the Interior might acqnire within its `boundaries. The Fish and Wildlife Service plans to acquire a total of approximately 113,000 acres in the Swamp. At the Administration's request, H.R. 48&9 was introduced by Chair~ `man Murphy and four other Committee Members on July 20, 1979. lit would extend the present authorization of $2L1 million for an addi~ tional three years. Although only about $11 million has been appropri- ated to date, the present authorization for the refuge expires at the end of Fiscal Year 1980. H.R. 4889 would simply extend th~ authorization ~through September 30,1983. Hearings were held on H.R. 4889 by the Subcommittee on October 25, 1979. After giving consideration to the testimony presented by the PAGENO="0094" 90 Department of the Interior, the Subcommittee considered the bill in markup session and unanimously ordered it reported to the Full Com- mittee on November 7, without amendment. H.R. 4889 was unanimously ordered reported by the Full Committee on November 8, 1979, without amendment by voice vote. It passed the House under Suspension of the Rules, by voice vote, on December 10, 1979. H.R. 4887-San Franthco Bay National Wildlife Refuge Ant 1ioi~a- tion In the 20 years between 1947 and 1967, the marsh habitat in the San Francisco Bay was reduced by at least two-thirds due to dredging and filling. Prior to these activities, the total area of the Bay was nearly 700 square miles. Today, however, only about 435 square miles remain. Public Law 92-330 was enacted in 1972 which directed the Secretary of the Interior to establish a national wildlife refuge in the south San Francisco Bay. The refuge will comprise approximately 23,000 acres when land acquisitions are completed but the appropriations for this purpose have nearly reached the ceiling. Of the $9 million presently authorized for land acquisition in the refuge, $8 million has been appropriated and $7.79 million has been obligated. To date, about 16,300 acres have been acquired. Much of the remaining acreage to be acquired consists of tideland or former tideland tracts. Acquisition of these areas has been delayed be- cause of outstanding State interests in some of the land. The Depart- ment of Justice regulations prevent the government from acquiring these lands with the possible State claim remaining. At the same times the State Constitution prevents the State of California from selling its interest:to* the Federal Governp~nt. Development of the refuge is pro- ceeding, but cannot be completed until the acquisition problems are resolved. At the request of the Administration, H.R. 4887 was introduced by Chairman `Murphy and four other Committee Members on July 20, 1979. It would increase the original land acquisition authorization from `$9 million to $13.2 million, an increase of $4.2 million, to be available until September 30, 1983. The bill also provides that the funds presently authorized for the development of~ the refuge ($1L~ million') ,wili;remain available until expended. The Subcommittee `held hearings on }T.R. 4887 on October 25, 1979. During the hearings the Fish and Wildlife Service pointed out the land acquisition delays due to the State's public trust interest in tide- lands. Congressman Don Edwards testified in support of an amend- ment to the bill which would authorize the Fish and Wildlife Service to acquire the land subject to the interest of the State. After giving careful consideration to the testimony presented, the Subcommittee adopted amendments durin~r the markup session on November 7, 1979~ which redraft ccl the bill to comply with the Budget Act and to authorize the acquisition of tideland and' former tideland areas sub- ject to the State's public trust easement. The bilL as an~ended, was re- ported to the Full Committee by voice vote. On Noyember 8, 1979, the Full Committee considered H.R.. 4887 as amended by the Subcommit- tee and unanimously ordered it reported without further amendment by voice vote. On December 19, 1979, H.R. 4887 passed the House, by voice vote, under suspension of the rules. PAGENO="0095" 91 H.R. 2519-A uthori~tion of Appropria~tiOns for the Mariiie Protec.- tion, Research and Sanctuaries Act of 1972 On March 5, 1979, the Subcommittees on Fisheries and Wildlife Conservation and the Environment and on Oceanography held joint hearings on H.R. 2519, a bill to authorize appropriations to carry out the Marine Protection, Research and Sanctuaries Act of 1972. A joint mark-up was held on March 19, 1979 and Full Committee mark-up took place on April 10, 1979. For a full report, see the Oceanography Subcommittee section. H.!?. 4018-Harris Neck Nationai Wildlife Refuge H.R. 4018 was introduced by Mr. Ginn and Mr. Fauntroy on May 9, 1979. Essentially, the bill would convey lands of the existing Harris Neck National Wildlife Refuge in McIntosh County, Georgia, to the original owners, or the heirs of the owners, who held such lands prior to their condemnation by the United States in 1943. Persons who originally owned the Refuge land prior to the condemnation action by the Federal Government could obtain such lands by paying the Government the same amount that was paid to them in 1943. Land not claimed by the original owners or their heirs would be sold to the highest bidders. A hearing was conducted on the bill on December 7, 1979. Witnesses included the sponsors of the legislation, representatives of the In- terior Department, representatives of the original land holders, Georgia County officials, conservation organizations, and minority interest groups. The Harris Neck National Wildlife Refuge is composed of 2,687 acres between Savannah and Brunswick, Georgia. It was established as a refuge in 1962, although the Government, by condemnation action, took over these lands in 1943 and operated it as an Army airfield dur- ing World War II. After the Army used this area as an airfield during the War, the land was conveyed to McIntosh County, Georgia, with the understanding that it would be operated as an airport. When the County failed to comply with their agreement with the Government, the land was offered to interested Federal Agencies, and the Fish and Wildlife Service was granted approval to operate it as a National Wildlife Refuge. Since 1962, when the refuge was established, the Fish and Wildlife Service has utilized this acreage as a waterfowl breeding and resting area and has enhanced the wildlife values on the refuge through farm- ing and water manipulation techniques. Substantial increases in wild- life populations have occurred through the use of wildlife manage- ment techniques. The controversies causing the consideration of this legislation center around the manner by which the Federal Government condemned the land in 1943. The original landowners and their representatives con- tend that they were assured by Government representatives that they would be able to purchase their lands back after the Army completed its, use of the area. The Federal Government does not agree that `these assurances were made and the landowners have sought relief through litigation and legisiation. Some landowners also contend that there was discrimination by the Government between various landowners PAGENO="0096" 92 ~t the time of the original condemnation action. Since litigation was pending in the U.S. District Court, no further action was taken by the ~Subcommittee on the legislation during the first session. JLR. 5577-The IXTOC I Oil Pollution Compensation Act of 1979 H.R. 5577 was introduced by Congressman Wyatt and other cospon- ~ors on October 12, 1979. The major purpose of the bill would be to provide compensation for economic losses resulting from oil pollution caused by the blowout of the IXTOC I well in the Bay of Campeche, Mexico. In addition to providing compensatio~i for losses resulting from such blowout,, the bill would make a grant in the amount of $6 million to the State of Texas for the construction and operation of a salt water fish hatchery. The bill was referred jointly to the Subcommittee on Coast Guard and Navigation and the Subcommittee on Fisheries and Wildlife Con- servation and the Environment. The report on this hearing can be found in the Coast Guard section of this Activities Report. LEGISLATIVE OVERSIGHT Klamath River Salmon Fishery Controversy Oversight On May 21, 1979 in Washington, D.C., and on May 26 in Eureka, California the Subcommittee held hearings on the Kiamath River fishing controversy. Testimony was received in Washington from the `Bureau of Indian Affairs, Department of Commerce and the U.S. `Forest Service; and in Eureka from various Indian groups, sports fishermen, resort owners, commercial fishermen, and `other interested groups. Salmon runs on California's Kiamath River have been severely depressed for a number of years. There has been general agreement on the need for stringent conservation measures to restore the stoci~s. However, there has been considerable disagreement, sometimes violent, concerning the management methods that can and ought to be em~ ployed. There is ~ for the scarce resource between two Indian tribes, and between Indians and non-Indians. The legal rights and claims among the interested parties, private, State, Federal and Indian, are in dispute. Klamath River salmon have historically provided substantial ~atches to ocean and river fishermen. Because of drought or commer- ci~l overfishing, or perhaps both, the runs have declined from 400,000 fi~h in'~the early part ~of this century, to only 150,000 to 160,000 in recent years. The management situation is complicated by complex and disputed jurisdictions. The ocean fishery beyond the three-mile territorial sea to 200 miles is managed by the Pacific Fishery Manage- ment Council and the Commerce Department pursuant to the Fishery Conservation and Management Act of 1976. The ocean fishery within three miles and the river fishery are subject to State management authority~ except that the Interior Department and. Inclia~ns claim that Indian fishing on the river within the boundaries of the Hoopa Res- ~rvati'on is not subject to State regulation. The position of Interior and the Indians has been judicially challenged by the State. Interior has promulgated regulations, explained below, to regulate Indian fish- ing on the ~sew~t1o~, The State regulations have been applied to PAGENO="0097" 98 non-Indians. The Pacific FisheryManagement Conndiliias~ prdpo~1 a plan for ocean salmon fishing beyond three miles. The effect of the State `river regulations is to limit substantially non-Indian sport fishing and prohibit non-Indian commercial fishing. The Interior regulations limit the Indian take to subsistence and ceremonial purposes, place a moratorium on comme;rëial fishing, and establish other cOnservation measures. Sports fishermen, and Klamath communities depender~t on them, blame Indian commercial fishing for the state of the stocks and in- sist on a greater share of the resource. The Indians blame the drought `and non-enforcement of State regulations applicable to non-Indians. Interior maintains that restoration of the runs is hindered by failure of the Pacific Council to place sufficiently stringent restrictions on outside fishing and that particularly harsh measures for the inside fishery are necessary to protect the stocks. The Council, naturally, disagrees. Moreover, Interior sees the need for increased enforcement against non-Indian violations. However, it is clear' to everyone `that land and water use problems have contributed to the problOm and that enhancement is needed. The effective management of the resource within the reservation has been impeded by the inability of the two major tribes to resolve a long~ standing dispute over ownership of the assets of the reservation. The inability of the tribes to develop a self-governing body ha's nec~ssitated unilateral conservation actions by the Department of the Interior. These actions have diminished but have not eliminated a' dangerous level of overfishing on the river. The 1979 salmon season saw much tension, if not violence, large amounts of illegal commercial fishing, ,and smaller salmon runs than expected. , The Subcommittee is presently working on legislative and admin- istrative solutions to the controversy which will both protect the salmon stocks and enjoy general support by all user-groups. U.S. Whaling Policy and the International Whaling Commigsion (IWO) On June 4, 1979, the Subcommittee held oversight hearings on whaling policy and on the International Whaling Commission. U.S. POLICY There exist expressions of U.S. policy on whales and marine mam- mals, including the following: (1) the International Convention for the Regulation of * Whaling; (2) the Marine Mammal Protection Act; (3) Public Law 95-136, (making it unlawful for any person, vessel, or other conveyance to take any species of ~hal~ `incident to commercial whaling in waters subject to the jurisdiction of the United States); (4) the Endange~red Species Act'; and (5) H. Con. Res. 143 (passed by the House and Senate `before the July, 1979 IWC meeting, and after the Subcommittee hear- ings, calling for a worldwide moratorium on commercial whaling). These hearing~ focused mainly on t~he International Conyentlon `and the International Whaling Commission. 56-41O-8O~-----7 PAGENO="0098" 94 The Internatio~naZ WhaZing Co1n~'mi$sion HISTORICAL BACKGROUND The International Whaling Commission (IWC) was established in accordance with the 1946 International Convention For The Regu-. lation of Whaling. The main duty of the IWC is to keep under review and revise the measures prescribed in the IWC Schedule to the Con-. vention governing the conduct of whaling. These measures at the present provide for the complete protection of certain species of whales; set the maximum catches of whales which may be taken in any one season; prescribe open and closed seasons in areas for whaling; fix size limits below which cert1ain species of whales may not be killed~ prohibit the capture of suckling calves, lactating females and females accompanied by calves; provide for the compilation of catch reports and other, statistical and biological records; and provide for the appointment of observers on factory ships and land stations. There are currently 23 member nations of the IWC, four of which joined just prior to this year's meeting. Several non-member nations, including Portugal and Somalia, also engage in whaling, often in contravention of the IWC schedule. The IWC meets once a year in June. or July. The IWC's Scien- tific Committee, composed entirely of scientists, meets the two weeks immediately before the main Commission meeting. The Scientific Committee provides data and recommendations to the Commission which form the basis for the annual whaling quotas. All quotas are contained in the schedule to the Convention which can only be amended by a three-quarter majority of the Commissioners.' voting. The management program of the IWO was significantly reformed in 1975 with the adoption of the "New Management Procedure". Under this management scheme, all whale populations are classified into one of three categories-protected, sustained management, and ini- tial management-depending on the size of each population. Popula- tions classified as protected are not subject to any whaling. Sustained management populations are subject to harvesting to maintain them at or near maximum sustainable yields. Initial management stocks are subject to harvesting.which reduces them to.their estimated maxi- mum sustained yields levels. THE 31ST ANNUAL CONFERENCE This year's IWC meeting was held in London on July 9-13. Con- gressman Paul N. McCloskey, Jr., of the Committee and a staff mem- ber attended a~ delegates. The two major issues concerning U.S. policy were as follows: Moi~atorium.-The U.S. proposed a worldwide commercial whaling moratorium for ten years or until the following conditions are met: 1. The New Management Procedure is strengthened to insure an ecological rather than a species-specific approach to whale conservation; 2. Population levels referred to within the New Management Procedure can be determined with accuracy and confidence suffi- cient to avoid subjecting whale stocks to unacceptable risks; PAGENO="0099" 95 3. Whaling technology and equipment are no longer transferred from IWO members to non-members; 4. Member countries no longer import whale products from non-members; 5. Contracting governments fund the IWO at a sufficient level. Although the IWO did not adopt the complete moratorium, it did adopt a pelagic moratorium which precludes the high-seas capture of whales. The IWO also established a whale sanctuary in the Indian Ocean. Aboriginal Wltaling.-The harvest of bowhead whales by Alaskan eskimos has been a major issue within the IWO for the last several years. In 1977, the IWO voted unanimously, the U.S. abstaining, to remove the aboriginal exemption in the IWO schedule which allowed a subsistence harvest for bowhead whales. Although the bowheacl. whale had been protected from commercial exploitation for forty years, the Scientific Committee estimated the Alaskan bowhead pop~ ulation to be as small as 6-10 percent of its initial population. Alaska, eskimos were estimated to be taking whales at rates far in excess of what the ppoulation would tolerate. The United States was put in the embarassing position in 1977 and 1978, of appearing to be very con- cerned about all whaling except its own. At a special meeting of the IW,O in December, 1977, the United States sought `and obtained a limited resumption of the bowhead whale harvest. The IWO approved whale harvests for 1978 of 12 whales landed or 18 struck, whichever occursfirst. In 1978, the United States conducted a major research program on bowhead whales and reported a revised population estimate of 2.264 animals to the IWO. The IWC set a limit of 18 bowhead whales landed or 27 struck for 1979. This year the United States sought a bowhead harvest of 20 whales landed or 27 struck, and the IWO set the limit at 17 landed or 27 struck. Although the new population estimate for bowhead whales is con- siderably above that original estimate by the Scientific Committee, it is clear that the population is considerably depressed and would be completely protected under the regular operation of the New Man- .agement Procedure. * Many individuals expressed concerns that our effort to obtain an in- crease in the bowhead quota adversely affects our effort to restrict com- mercial harvesting of whales. * MAJOR ACCOMPLISHMENTS OP THE 31ST ANNUAL MEETING OP THE IWO 1. An indefinite moratorium was imposed on use of factory ships t~ harvest whales, excluding the minke whale. This should effectively limit whaling to offshore coastal operations by the countries involved. 2. A whale sanctuary was created in the Indian Ocean, with a 10-year moratorium imposed 9n taking of all whales therein. 3. All stocks of whale species are now regulated by IWO. 4. This year's total quota for commercial whaling was reduced to Th,656 from last year's total of 19,526, or by 20 percent. The total ton- nage caught will be at least 50 percent less due to the relatively small sizèôf'the m~nke. PAGENO="0100" 5 There was a substantial decrease in the sperm whale quota, from 9,360 last year to 2,203 this year, a reduction of 77 percent Last year, sperm whales made up about 50 percent of the total whale quota , this year they are only 14 percent of the total quota. 6 The 31 percent increase in the mrnke whale quota, from 9,173 last year to 12,000 this year, causes minke whales to make up fl percent of the total whale quota, as compared with last year's 50 percent Minke whale stocks were considered to be in healthy condition by the Scien- tific Committee Currently, their population seems to be increasing and its control may help in the recovery of the blue whale and other larger species approaching extinction since they consume the same food 7 The IWC budget was more than doubled, to 300,000 pounds sterl- ing, about $625,000 8 The IWC supported a TI S resolution that all member nations cease importmg whale products from non member nations and cease export of vessels and equipment to non member nations The chief purchaser of non IWO whale meat, Japan, adopted a new law prohib- iting such purchases effective July 5, 1979 9 The International Observer Scheme was expanded to provide non whaling nations the opportunity to observe whaling operations, and to include more Japanese and Eskimo whaling operations 10 Recommendations for improvements in whaling technology to reduce the cruelty of the whale hunt were adopted by the Commission without change. Fishery Conservation and Managenient Act of 1976 The Subcommittee conducted six days of hearmgs on the Fishery Conservation and Management Act of 1976 (FCMA) in order to corn prehensively evaluate, for the first time since enactment of the legisla- tion, whether or not the Act was being carried out in accordance with Congressional intent and to identify any problems which may need to be corrected The hearmgs were organized in a manner to address categorical issues and subissues relating to the FCMA The opening day of hearings was held on June 25 when testimony was presented by the Administration and others relating to general pioblems associated with implementation of the Act Mr James Walsh, Deputy Administrator of National Oceanic and Atmospheric Admrn istration (NOAA) presented an overview of `the progress' made in im- plementing the FCMA. He indicated that generally the implementation of the Act was going well but that delays were ~experienced because of the fact' that nearly every fishery:' management plan and nearly every decision under such plans was a precedent He felt that the immediate impact of the Act was reducing foreign fishing within the 111 S 200 mile zone and, as additional fishery management plans are formulated and implemented, further reductions of foreign fishing will occur Mr Walsh identified various problems that NOAA was experiencing implementing the FCMA and made various sugges- tions and comments how this could and. would be improved in the future He further indicated that those problems which would need to be corrected legislatively would be compiled into a package of recom- mended amendments and would be submitted to the Subcommittee at PAGENO="0101" 97, a later time. The Administration provided a ~representative for eacb. of the oversight hearings conducted by the Subcommittee and pro- vided specific responses to the categorical issues addressed. In addition to the Administration, other witnesses testified con- cerning specific problems they found with the FCMA. Most of, these witnesses represented national fisheries organizations and fish process- ing organizations. Generally, most of the criticism centered upon the' actual role of the regional councils in the policy formulation process. Also, specific problems were raised concerning regulations promulu. gated by the National Marine Fisheries Service. In most cases, the witnesses questioned whether some of such regulations were consistent~ with the intent of Congress in enacting the FCMA. The morning session of the second day of hearings held on June 25~ 1979 was devoted to addressing specific. amendments to the FCMAP which had been adopted by the Senate to the FCMA authorization bill. Since the Committee chose not to address the substantive changes to the FCMA in the authorization bill required to be reported out of Committee earlier in the year, the purpose of this oversight hearing was to allow Committee Members to focus their attention on the Senate proposals pending before the House. It should be noted that these spe- cific amendments are discussed in some detail in the FCMA authoriza- tion section of this report, including final action taken by the House and the Senate with respect to such amendments. The afternoon session of the June 26 hearing was devoted to pending bills before the Subcommittee which would have the effect of including' tuna within the management authority of the United States. As the FCMA. is presently written, "migratory species" are not included within the management authority of the Act. The Act further states: that migratory species are defined to be tuna. Several bills are pending before the Subcommittee which would include tuna within the fisheries~ jurisdiction of the United States. Representatives from the State Department and NOAA testified in~ opposition to the inclusion of tuna. Also, representatives from the fish- ing industry testified in opposition to the inclusion of tuna within the zone. Essentially, this opposition was based on the fact that tuna being a highly migratory species required management by international agreement since the extent of their migratory range makes it difficult'. if not impossible to manage tuna on a nation-by-nation basis. Other witnesses from the fishing community, notably the sport fishing corn, munity, and from some of the regional fishery councils' testified in sup- port of including tuna within the management authority of the United. States. The third and fourth day of hearings were held on July 10 and 19, 1979, during which time the Subcommittee attempted to focus on prob- lems and questions relating to the organization and policies of the re- gional fishery management councils. The 200-mile Act established eight ofthese councils in i~arious parts of the country. The primary functions of these councils are to develop fishery management plans for selected species of fish' in geographical areas over which each council has authority.' ` In addition to the Administration, the Subcommittee heard from a representative of each of `the regional fishery management councIls, PAGENO="0102" 98 representatives of major fishery organizations and the General Ac- counting Office. A specific list of questions was submitted to each of the regional councils concerning their organization and operation. Most of the coun- cils responded to the questions posed in the letter as well as to other issues of concern to them. There were many suggestions, criticisms and legislative recommendations which will be included in the contents of a comprehensive oversight report. This oversight report will be finalized by the Committee after the conclusion of the oversight hearing. It is presently anticipated that regional hearings will be held during the second session of this Congress. The General Accounting Office and representatives of fishing organi- zations also had a number of specific recommendations and criticisms with respect to the operation, organization and policy formulation process of the regional councils. The main theme surrounding most of the hearings concerned the actual status of the councils and their rela- tionship to the Federal Government. Once this status is clarified to both the federal agency and to the regional councils, it would appear that it will be easier to address some of the more detailed questions of operations and policy formulation. On October 11, 1979 the Subcommittee again invited representatives from the regional management councils and others to address the issues surrounding the preparation of fishery management plans. It was the Committe&s intent to find out how such plans are being pre- pared, what defects exist in them, and how the plans and formulation procedure could be improved in the future. In addition to representa- tives from the fishery management councils, other witnesses included several from the fishing industry as well as from the environmental community. Most of the testimony was directed at more detailed prob- lems of the availability of collection and analysis of biological data which is the base upon which most responsible fishery management plans are formulated. In addition, funding requirements were ad- dressed in some detail. Again, while many specific questions and com- ments were presented, the basic theme of this hearing centered around the status and autonomy of the councils and the councils', i~elationsi'up to the National Marine Fisheries Service. The sixth and final scheduled oversight hearing held in Washington, D.C. was conducted on October 12. Thishearing was intended to serve as a wrap-up hearing in order to allow witnesses to address questions which had not been previously addressed in the categorical issue. ses- sions. Congressman Leon Panetta and several others presented a pro- posal to add an additional regional fishery management council for the State of California. In addition to this proposal, the General Account- ing Office, the Coast Guard and the National Marine Fisheries Serv- ice were invited to testify on the way in which enforcement activities within the U.S. 200-mile zone have been carried out. The GAO made a number of specific criticisms and recommencla- tions concerning the nature of the regulations, the lack of enforcement goals and strategies, the lack of adequate coordination between federal agencies, and the failure of the agency to impose appropriate penalties on violators. The Coast Guard and NMFS responded, in part, to these criticisms and indicated that, in some cases, corrective action had. al- ready bean taken `and, in Mhers, correcti~~e action `~aspiàtned. PAGENO="0103" 99 Other representatives from the fishing community questioned the Federal Government's intention to use fishermen~s log books for data collection and this issue was addressed at some length. At the conclusion of this sixth hearing, the Chairman indicated his~ desire to conduct field hearings during the second session of Congress so that Committee Members could hear from some of those persons who did not have an opportunity to travel to Washington. It was further decided that at the conclusion of the several field hearings, the Committee would formulate a comprehensive oversight report addressing the major issues raised in the hearings and make recom- mendations and, if necessary, propose legislation to attempt to correct deficiencies in the Act. United State8-Canada T~'a.it Coa.st Fi8hery Agreenient and Bou'iidary Treaty INTRODUCTION On June 22, 1979, the Subcommittee held hearings on the U.S.- Canada East Coast Fisheries Agreement and Boundary Treaty. The bilateral agreements, which were signed by the two governments on March 29, 1979, are directed toward the conservation and management of valuable East Coast fisheries stocks of mutual concern to the two countries and toward binding third-party arbitration of the boundary dispute in the Georges Bank-Gulf of Maine area. Both bilaterals require Senate ratification and, because the fisheries and boundary issues are linked by the agreements, neither accord may enter into force unless both are approved by each government. The Subcommittee hearing, held in advance of Senate advice and consent on the bilaterals, reflected a considered decision on the part of the Members. The Subcommittee is particularly conscious of the sig- nificance, and limitations, of the role of the House of Representatives with respect to the establishment and implementation of international obligations of the United States. However, the Subcommittee is also very mindful of the importance of its responsibility to protect and pro- mote the fisheries interests of the United States. Advice and consent permitting ratification which binds the United States under inter- national agreements is exclusively the prerogative of the Senate, but implementation through domestic legislation is the joint responsibility of both bodies. It was, and continues to be, the view of the Subcom- mittee that with respect to international agreements affecting United States fisheries, the Members should have the opportunity to make informed policy decisions and to communicate their views to the Sen- ate before the constitutional process of advice and consent and ratifica- tion is completed. * The Subcommittee hearing of June 22, 1979 produced valuable insights into the effects of entry into force of the fisheries agreement and boundary treaty. Moreover, considerable information was pro- duced concerning the possible consequences of perpetuating the status quo. Administration witnesses strongly supported the agreements (1) as being necessary for the effective conservation of transboundary stocks and the settlement of the boundary dispute, and (2) as being equitable, in economic terms, to U.S. fishermen and fish processors. The ~&dministration did not argue that the agreements are all that the PAGENO="0104" 100 Unit~d States would like to have, but only that they reflect. the best. compromise that could be achieved by the negotiators. The clear major.~ ity of witnesses representing affected industry interests disputed the grounds upon which the Administration relied to justify the agree- ments. Those witnesses strongly opposed the agreements. Other industry witnesses insisted upon substantial amendments to the agreements for institutional and economic reasons. No public witness unequivocally supported the agreements as presently written. BACKGROUND In 1976, the United States and Canada enacted legislation to extend their fisheries jurisdictions to 200 nautical miles. This imposed exclu- sive fishery management authority by, each country on the maritime area off its coast, ended the relatively unrestricted fishing of the two countries beyond 12 miles and meant that reciprocal fishing privileges within 200-miles would have to be established by international agree- ment. In addition, on the East Coast, the `effect of the legislation was to expand the scope of the Georges Bank-Gulf of Maine boundary dis-" pute to include finfish. Until that point, the dispute had been limited: to the jurisdiction over the continental shelf resources, including' sedentary species. The involvement of additional valuable fisheries in the dispute provided impetus for a boundary settlement. Absent for- mal bilateral agreement or informal bilateral coordination,~fisheries. stocks in the disputed area and transboundary stocks could be con- served and managed only by unilateral measures applied `by each country. In the disputed area~, under a system of voluntary restraint, each country exercised enforcement authority only with respect `to its own fishermen. An interim agreement on East Coast fisheries was concluded when it became apparent that a' permanent agreement on all issues would~ require extensive negotiations. Reciprocal access to the fisheries of each country was permitted, with the fishing effort' limited to historic levels. The agreement expired on December 31, 1977, and reciprocal fishing' privileges terminated. A renegotiated interim accord for 1978 failed' to receive'final approval by the governments and reciprocal fishing off' the East Coast has not been renewed. THE FISHERIES AGREEMENT" The fisheries agreement provide's: . ` ` ` Reciprocal access to the fisheries zones; ` `,``Entitlements to shares of the fish harvests'; and ` Fisheries management procedures. A. Access Access to the identified fisheries of mutual interest is reciprocal' and permanent, with two exceptions. U.S. accesS to the Canadian zone: (Divisions 4R, 4S, .4T, 4V, 4W, 4X and 3Q or 3P)1 for redfish and, Canadian access to the U.S. zone and dispute~ area (Subarea 6 ançl Division ~Z) for squid are limited to ten years and the parties may agree upon reciprocal access to lobster after the boundary is delimited, `1 See' map, Attachm~iit 1. These' divisions are entirely or partially within the Canadian. zone. PAGENO="0105" *101 B. Entitlements Entitlements are established for all stocks which are subject-to the fisheries agreement. Adjusments to entitlements (except for rèdfish ~md squid) may be made in accordance with the procedures outlined below. Entitlements for what might be regarded as the four most signifi~ cant fisheries are as follows: Scallops: Subdivision 5Ze, located primarily in the disputed area and the exclusive U.S. fisheries zone-26.65 percent United States; 73.35 percent Canada. Herring: Division 4W, 4X and part of 5Y, located primarily in the exclusive Canadian fisheries zone-0 percent United States; 100 percent Canada. Part of Division 5Y, located primarily in the exclusive U.S. fisheries zone-100 percent United States; 0 percent Canada. Subarea 6 and Division 5Z, located primarily in the dis~ puted area and the exclusive U.S. fisheries zone (after the sixth year) -66.67 percent United States; 33.33 percent Canada. Cod: Division 4W and Subdivision 4Vs, located in the exclu-. sive Canadian fisheries zone-1.4 percent United States; 98~6 percent Canada. Part of Division 4X, located primarily in the exclusive Canadian fisheries zone-7.5 perceiit. United States; 92.5 per- cent Canada. Division 5Y, located primarily in the exclusive U~S. fish~ eries zone-98.4 percent United States; 1.6 percent Canada. Division 5Z, located primarily in the disputed area itnd the exclusive U.S. fisheries zone-83 percent United States; 17 percent Canada. Haddock: Divisions 4V and 4W, located in the exclusive Canadian fisheries zone-tO percent United States; 90 percent Canada. Division 4X, located primarily in the exclusive Canadian fisheries zone-tO percent United States; 90 percent Canada. Subarea 5, located primarily in the exclusive U.S. fisheries - zone and the disputed area-79 percent United Stat~s; 21 percent Canada. The other entitlements are as follows: Mackerel: Subareas 3, 4, 5 and 6-60 percent United States; 40 percent Canada. Pollock: Divisions 4VWX and Subarea. -25.6 percent United States; 74.4 percent Canada. Cusk: Subdivision 5Ze-34 percent United States; 66 percei~t * * Canada. Silver Hake: Subdivision 5Ze-90 percent United Stat~s; 10 percent Canada~ Red Hake : Subdivi~ion 5Ze-90 percent Uni~ed States; 10 percent Canada. - PAGENO="0106" 102 White Hake: Divisions 4VWX-6 percent United States; 94 percent Canada. Subarea 5-94 percent United States; 6 percent Canada. Argentine : Divisions 4VWX and Subarea 5-25 percent United States-75 percent Canada. Redfish: Divisions 4VWX-35 percent United States; 65 per- cent Canada. Subarea 5-99 percent United States; 1 percent Canada. Loligo Squid: Division 5Z and Subarea 6-91 percent United States; 9 percent Canada. Yellowtail Flounder: Subareas 5 and 6-99 percent United States; 1 percent Canada. Other groundfish: Subareas 3 and 4-1 percent United States; 99 percent Canada. Subareas 5 and 6-99 percent United States; 1 percent Canada. There are no entitlements set for lobster, nor for illex squid. In both cases, each party may not fish in the zone of the other party. In the disputed area, lobster may be fished by each country only at his- toric levels, unless the Commission, described below, decides otherwise. Illex squid may not be fished by either party in the disputed area, except by mutual agreement. Entitlements may be reviewed at the request of either party at the end of each 10-year period following entry into force of the bilaterals. The. entitlements are to be renegotiated directly by the parties and, if they fail to reach an agreement, an Arbitrator makes the decision on the basis of the location of the stock in relation to the delimited bound- ary, moderated where appropriate by social and economic `impacts on coastal communities and by significant changes in market value, abun- dance and availability of the stock. At any one time, the negotiators or the Arbitrator may reduce any entitlement of 50% or more for a stock by a maximum of 10% and `reduce any entitlement of less than 50% by a maximum of' 5%. Ultimately, any entitlement may not be reduced by more than one-third of its original level. C. Management The fisheries agreement establishes a distinct management scheme for each of three categories of fish: Joint management for "Category A" stocks; Management primarily by one party for "Category B" stocks, subject to governing principles set out in the agreement; and Separate management by each party for "Category C" stocks, subject to several of the governing principles. An East Coast Fisheries Commission is established, with seven of- ficials from each country. On the U.S. side, it is expected that there will be two officials from the Mid-Atlantic Council, three from the New England Council, and two from the Federal Government. The following are the purposes of the Commission: To establish the fishing year and management measures for Category A stocks; To review and approve or modify the fishing year and man- agement measures submitted by the party with primary manage- ment authority for the Category B stock concerned; PAGENO="0107" 103 UNITED STATES Atlantic Herring-Divisions 5Y and 5Z and Subarea 6. Scallops-Subdivision 5Ze (west of 68° 30'). Cod-Division 5Z. Haddock-Subarea 5. Silver Hake-Subdivision 5Ze. Red Hake-Subdivision 5Ze. White Hake-Subarea 5. Illex Squid-Subareas 5 and 6. CANADA Atlantic Herring-Divisions 4X and certain parts of Division 5Y. Scallops-Subdivision SZe (east of 68° 30'). Atlantic Argentine-Divisions 4V, 4W and 4X and Subarea 5. White Hake-Divisions 4V, 4W and 4X. Illex Squid-Subareas 3 and 4. Annex C stocks are the following: Cod-Divisions 4W and 4X and Subdivision 4Vs. Haddock-Divisions 4V, 4W and 4X. Redfish-Divisions 4V, 4W, 4X, 4R, 4S, 4T, 30 and 3P. Other Groundfish-SubareaS 3 and 4. Northern Lobster-in areas under Canadian jurisdiction after boundary settlement. The following governing principles shall apply to the Category A. and B stocks: Management measures shall be designed to achieve the opti- mum yield from each stock taking into account stock interrela- tionships and all other relevant ecological factors, and the nature and extent of the ecom~rnic arid sociaa interests of each party. Except as otherwise agreed by the parties, the measures shall be designed to bring about an exploitation rate that will maintain the productivity of fishery resources over the long term. In par- ticular, the measures shall be designed to prevent overfishing of * fishery resoUrces, to allow rebuilding of depleted stocks, and to avoid irreversible or long term adverse effects on fishery resources and the marine environment; Management measures shall be based upon the best scientific information available; Management measur~es shall take into account demonstrated * degrees of stock and species interrelationships, so that. the pro- ductive potential of related stocks or species is not s&iousiy threatened; To provide a forum for consultation with respect to Category C stocks. Annex A stocks are as follows: Atlantic mackerel in Subareas 3, 4, 5 and 6; pollock in divisions 4V, 4W and 4X and in Subarea 5; cusk in subdivision 5Ze; Northern Lobster in the boundary region. The primary managem~nt authority for Annex B stocks is as follows: UNITED STATES CANADA Cod-Subarea 5Y. Redfish-Subarea 5. Other Groundfish-Subarea 5. Northern Lobster-in areas under U.S. jurisdiction after boundary settlement. Loligo Squid-Division SZ and Subarea 6 PAGENO="0108" 104 Management measures ~hail take into account the need for effi- ciency in administration and enforcement, including the mini- mization of cost, the avoidance of unnecessary duplication, the need for maintaining the confidence of each party in the adinin- istration and enforcement actions of the other, and, to the extent consistent with the other principles, the need to avoid disruptive changes in patterns of exploitation; Management measures shall provide to the nationals and ves- sels of each party the opportunity to harvest its entitlement and to this end shall take into account any differences in fishing meth- ods, patterns and procedures; Management measures shall ensure access by the nationals and vessels of each party to the maritime area in which the other exer- cises exclusive fisheries jurisdiction for the purpose of harvesting entitlements where such access is provided for; and Management measures shall not discriminate in form or in effect between the nationals and vessels of the countries. Management procedures are highly complex. With some exceptions, they are as follows: For Category A joint management: The Commission initiates management decisions which are final, if not obje~ted to by either party; If the Commission cannot agree, the governments themselves attempt to reach an agreement; The Commission is reconvened, if direct government-to-govern- ment negotiations fail; In the event that either party objects to any Commission man- agement decision or the reconvened Commission fails to agree, the matter is `submitted to the Co-chairmen, jointly `selected by th~ parties; Either party may refer the matter to the Arbitrator, also jointly selected, for decision when the Co-chairmen do not agree; Management decisions from the past year (if any) remain in effect until new decisions are reached. For Category B stocks: The designated "party of primary interest" for each stock pro- poses management measures to the Commission; If the Commission agrees with the proposal or modifies it, one or both of the governments may object, or may contend that the proposal or modification is clearly `inconsistent with the govern- ing principles, and take the matter to the Co-chairmen; if the Commission fails' to agree, the matter also goes to the Co-chairmen; The decision of the Co-chairmen is to be based on whether the management proposal is "clearly inconsistent" with the govern- ing principles; If the Co-chairmen do not agree, the matter is decided by the `Arbitrator; ` ` The proposal of the party of primary interest or a' modifica- tion agreed to `by the Commission, if objected to, goes intO effect, `pei~dinga final decision. ` , ` ` ` ` ` ` PAGENO="0109" 105 For Category C stocks: The party designated has exclusive management power over the stocks; The party not designated may, however, be grar~ted limited access and an entitlement to these stocks as set out in the agree~ metit. Emergency procedures are the following: Category A stocks-the Co-chairmen may temporarily amend mahagement measures in an emergency, subject to review by the Commission and the Arbitrator; Category B stocks-the party of primary interest can per- manently amend management measures, subject to immediate re- view by the Commission and the Arbitrator. The Arbitrator is appointed jointly by the parties for a 5-year renewable term. If the parties cannot agree, the President of the In- `ternational Court of Justice (I.C.J.) will be asked to appoint an arbi- trator who is a national of neither the U.S. nor Canada. Either party may remove the Arbitrator by withdrawing it~ consent. Until a suc- cessor is appointed, the existing Arbitrator is empowered to decide all issues submitted to him. Within its undisputed fisheries zone, each party is required to en- force management measures. Each party is also required to enforce management measures against its own flag vessels. Pending delimita- tion of the boundary, enforcement in the disputed area is exclusively by the flag State. The fisheries agreement may be amended at any time upon agree- ment of the parties. If either party believes "any time limit or other administrative procedure" is "unsatisfactory", it may request renego- tiation of that provision after 5 years of entry into force. If the par- ties cannot agree within 6 months, the Arbitrator is empowered to decide the matter, although there is no treaty standard guiding his decision. BOUNDARY TREATT AND RELATED AGREEMENTS The treaty relating to the delimitation of the international mari- time boundary in the Gulf of Maine-Georges Bank area would, upon entry into force, legally commit the United States and Canada to submit the boundary dispute to binding third party arbitration. This treaty is complemented by a "Special Agreement" that provides for submission of the dispute to a Chamber of the I.C.J. and an "Agree- ment" that would submit the matter to a court of arbitration, at the instance of either the U.S. or Canada, in the event that the I.C.J. Chamber was not constituted within six months of entry into force of the treaty. The dispute is to be settled "in accordance with the principles and rules of international law." The two governments have differing inter- pretations of the applicable principles of international ~aw and diver- gent views as to the a~pplication of those principles to the facts of the situation. The arbitration decision would be not only binding, but also permanent. As noted above, it would~ influence the fisheries e~i- titlementsof the two countries. PAGENO="0110" 106 ISSUES RAISED BY BILATERALS A. Should the settlement of the fisheries and boundary issues be linked, as provided by the bilaterals? Certain industry testimony before the Subcommittee indicated that the fisheries and boundary issues should be settled separately. It was stated that fisheries questions should be resolved following settlement of the boundary dispute. Opponents of the bilaterals pointed out that the U.S. maritime claim might prevail, so that all of Georges Bank would come under undisputed U.S. jurisdiction, `but if the agreements enter into force, Canadian' fisherman would nonetheless retain sub- stantial and permanent entitlements to the fisheries of the Bank. The most dramatic example cited is scallops. If the U.S. wins the boundary arbitration and assumes fishery jurisdiction over all of the Georges Bank, Canada would still be entitled to 73.35% of the scallops of the area in the first 10 years after entry into force of the bilaterals, and could never be reduced to below approximately 50%. The Administration answers that Canada insisted upon the link between the boundary settlement and the fisheries entitlements, in order to be protected against a delimitation decision favorable to the United States. Legally, Canada `could not be forced to negotiate a boundary settlement, nor to submit the dispute to a binding international decision- making process. According to the Administration, the only way to achieve either the fisheries agreement or the boundary settlement was to accept the linkage of the two. The Administration also argued, for reasons noted `below, that the interests of the U.S. were better served by having an agreement than `by have no agreement. B. Should a permanent fisheries regime involving entitlements and co-management be established? Opposition to the bilaterals stems in large part from the permanence of (1) Canadian access to the U.S. zone, (2) the entitlements to U.S. fishery resources and (3) the Canadian management responsibilities over fish stocks found in the U.S. zone. Opponents note that U.S. fi~hermen could `be expected to displace Canadian fishermen in the U.S. zone entirely, absent these bilaterals. It is pointed out that the Congress and Administration are undertaking major fishery development initia- tives, and that a principal policy of the Fishery Conservation and Management Act of 1976 (FCMA), as amended, is to achieve full utilization of all U.S. fishery resources by U.S. fishermen. The bi- laterals operate at cross-purposes with these policies by permanently limiting the total U.S. harvest. This situation is aggravated by the fact that the U.S.', is expected to'prevail in any boundary settlement. Fur- thermore, the bilaterals permanently displace the Re~ionai Fishery Management Councils from the important role provided them by the FCMA. The Administration defends the permanence of the bilaterals, point- ing out that Canada rejected a U.S. proposal for a 10-year fisheries agreement. Canada insisted upon permanent protection of its fishing industry against a boundary delimitation decision favoring the United States. Moreover, it is argued that transboundary stocks will require `indefinite joint management. , `` ` ` 0. Are the specific access provisions of the fisheries agreement'in the interests of the United States? PAGENO="0111" 107 In testimony before the Subeomulittee,. a spokesman for the Mid-' Atlantic Fishery Management Council and witnesses representing important segments of the U.S. fishing industry maintained that the access provisions of the bilaterals unfairly favored Canada. The Administration disagreed. The issue involves two major elements. First, U.S. fishermen are guaranteed access to the richest scallop area of Georges Bank, notwith- standing any boundary settlement that might recognize Canadian jurisdiction over the northeastern third of the Bank. However, Canada retains access to the entire Bank, not just the one-third it claims, not- withstanding a boundary settlement that would likely recognize U.S. jurisdiction over the Bank. Second, and more broadly, the United States would have access to a large area off Canada's East Coast. Canada would have access to the U.S. zone, not only in the northeast, but also in the Mid-Atlantic region. P. Are the bilaterals necessary for effective conservation and man- agement of East Coast fish stocks? Opponents of the bilaterals maintain that, while the existence of a disputed area and of transboundary stocks present conservation and management problems, the scope of regime negotiated by the Ad- ministration goes far beyond what is necessary to resolve those mat- ters and that the management mechanism reflected in the fisheries agreement is not likely to accomplish its intended purpose effectively. The opposition points out that a simple bilateral coordinating mechan- ism reflected in the fisheries agreement is not likely to accomplish its intended purpose effectively. The opposition points out that a simple bilateral coordinating mechanism would be adequate to handle the stocks of the disputed area and the transboundary stocks. Such a mechanism would avoid the complexity of the approach taken by the fisheries agreement. The Administration argues that an ad hoe approach is not adequate and that absent a fixed, formal and comprehensive mechanism, there ~will be a tendency on the part of each government to permit increased fishing efforts, perhaps to the detriment of the stocks, in response to real or imagined abuses permitted or encouraged by the other side. The Administration maintains that the differing views of the United States and Canada have hindered or frustrated the implementation of conservation programs. For example, scallops are under considerable pressure in the disputed area and it is said that most transbouiidary stocks could be overfished. It is further argued that where the fishermen of both countries have access to a stock, as of Georges Bank, an opti- mum yield established by the country without agreement by the other to observe it has little practical significance. The cod and haddock fisheries are considered illustrative. In November, 1978, in response, in part, to what was perceived to be a relaxation of U.S. regulations, Canada relaxed its trip limitations in both fisheries. By the end of the year, the combined U.S. and Canadian catch of haddock in Subarea 5 and statisti~a.l Area 6 exceeded 28,000 tons, whereas the New England Reolonal Fishery Management Council had established an optimum yield for haddock of 20,000 tons. Similarly, U.S. and Canadian catches of cod from Subdivision 5Z and statistical Area 6 exceeded 36,000 tons wbile the New England Council had set the optimum yield at 26,000 PAGENO="0112" 108 to~tis. Howe've~r, the Administratior~ does not assert that biologiaal harm has ~c~ut~red thus far and, moreover, does recognize that there are en~ couragitig si~is that major North Atlantic stocks, such as haddock,. cod aaid herring; may be restored to greater abundance. The Admims tration is expressing its fear that unregulated fishing could exceedtbe maximum sustainable yield levels for certaiu species. E. Are the entitlements in the fisheries agreement fair to U.S. fishermen ~ Opponents of the bilaterais believe that the specific entitlements established by the fisheries agreement are unfair to U.S. fishermen. It is argued that the entitlements fail to take into `account recent growth trends in the 15.5. fishing industry, would inhibit investment in the industry, ~v~uid prevent full U.S. utilization of fishery resources in the U.S. zone, would allow further Canadian penetration of U.S. fisheries and fish markets and potential foreign fish' markets, would reward Canadian subsidies, and would, even taking into account the U.S. entitlements in the Canadian zone, result in an overall net eco- nomic loss to U.S. Fishermen. The Administration points out that in the 1965-77 period, the U.S. share of haddock in certain areas was 52.8%, while the entitlement is established at 79%. In the same time frame, the historical U.S. take of cod in certain areas was 47.4%, while the entitlement is 8.3%. The U.S. scallop harvest rises from 19.9% in the 1965-77 period to 26.65% under the fisheries agreement. The U.S. has a 90% entitlement to red and silver hake that have not been significantly fished by U.S. fisher- men in the past. Opponents of the agreement respond that selection of the 1965-1977 period as the base period for comparison purposes ignores the earlier period in which the U.S. harvested `almost all of the Georges Bank scallops, fails to take into account the U.S. industry growth trend reflected in the past several years (including large recent investments in the scallop fleet), ignores the new Federal policy for fisheries de- velopment, `and coincides with the period of the most intense, illegal Canadian subsidization (about 21% according to. `a Sea Grant study) which resulted in displacement of the U.S. lead in such fisheries as scallops. Between 1976 and 1978 the U.S. harvest of cod and haddock ii~ the relevant, areas increased approximately 50%. For scallops the U.S.' harvest increased *approximately 30%. Notwithstanding the current growth, and the potential for increased expansion of the U.S. effort, the treaty .proponents continue to use the 1965-77 period as the basis of comparison. Moreover, Canada is given' new access to squid in the U.S. zone, thus allowing that country to compete with our fledgling, squid industry and to establish, and lock up. foreign markets in a manner that could inhibit U.S. growth in the fishery.. As for the redfish access granted to U.S. `fishermen by' the `Canadians, that, according'to opponents, affects only 1115.5. `boats and is. meaningless in `light of the fact that even though the Canadian zone was closed to U.S~ . redfish fishermen last year,. their catch increased'and the optimum yield was not exceeded. *Specific figures cited by the opposition `include the following: Under, the treaty, the `U.S. would reduce its scallop catch by 35%, that is, by PAGENO="0113" 109 1~00 metric tons, worth $10 million, and Canada would reduceits catch by only 17%; the U.S. would reduce its share `of the pollock harvest from 40% to 25.6%, for a loss of $2.5 million; the Canadians would be entitled, after 6 years, to 33.33% of the herring on Georges Bank,thus Ignoring the growth trend in the U.S. herring fishery reflected by an increase from 2,000 metric tons in, 1978 to Th,000 metric tons expected in 180; the total ájlowable catch of cod and haddock will increase, but Canada will benefit through the entitlements of 17% of the cod and 21% of the haddock in areas either under largely undisputed U.S. jurisdiction or under disputed jurisdiction that could be expected to be settled in favor of the United States. The Administration claims $4.3 million in lost opportunity for U.S. fishermen in the undisputed Canadian zone, if the regime is not in. place in 1980. However, as the preceding paragraph details, op- ponents of the agreement claim an even larger.net loss in that year for the U.S., if the bilaterals enter into force. In assessing the relative merits of the agreement to the U.S., it is instructive to examine the extent.to which the overall U.S. fish harvest in the area covered by the agreement will be affected by the agreement. Data provided by the Department of Commerce shows that, if th~ agreements enter into force, the U.S. harvest in the affected area in 1980 is expected to be approximately 30,000 metric tons, greater than the 1978 harvest. The Canadian harvest, however, can be expected to rise, in the same time frame, by approximately 129,000 metric tons. F. Does the management scheme of' the fisheries agreement reflect. sound policy? Opponents of the bilaterals argue that the management scheme of the fisheries agreement is unworkable and tends to undermine the au- thority of the United States over its fishery resources and reduces .to i~isignificance the role of the Regional Fishery Management Councils. The oppo~ition states that the complexity of the scheme renders its practical utility doubtful. Further, U.S.-initiated management deci- sions are perceived to be vulnerable to Canadian objections and the consequent referral of any or all issues to the Arbitrator. The au- thority of the Councils is seen to be substantially diminished by the ~ddition. of the.bilateral management process, as well as by the dispute settlement procedures that result in decisions by national governments,, Co-chairmen or,. as noted above, `the Arbitrator, instead of by the Councils. It is. answered that the complexity of the system does not render it unworkable. Rather, the `system is designed to assure that management decisions' will be made rationally and in a timely manner. Although the integrity of U.S. exclusive management authority over U.S. fisheries is not preserved, the U.S. obtains a management role over ~sheries in the Canadian zone. As for the Councils, they are said to have the pro-. tection of a majority vote in the U.S. section of the bilateral Commis- sion. In addition, the Regional Councils will initiate management plans and will be assured, that any second-guessing will have to be aceom~ pushed over a high. legal threshold subject to management principles. based on the FCMA and expressly laid out in the treaty. Moreover, the Councils will have a direct influence on the management of certani important stocks in the Canadian zone. ~6-4iO-8O-8 PAGENO="0114" 110 G. Are there. other interests of the United States that would justify ~atification of the bilaterals? The Administration has argued that the bilaterals are important to general U.S.-Canada reiations and will allow hydrocarbon develop- ment to move ahead in what is now the disputed area. Further, it may be argued that ratification of these bilaterals will improve the pros- pects for fimil. resoiut~on of other fisImries~ and boundaries issues ~ut- standing betw~een the two cquntr~es. O~nits~di~agr~e. Endangered Species Act Oversight On July 16, 20 and 27, 1979 the Subcommittee conducted over- sight hearings on the administration of the Endangered Species Act of 1973 and the Convention on International Trade in Endangered Spe- cies of Wild Fauna and Flora. These hearings followed eight days of oversight hearings on the administration of the Endangered Species Act during the 95th Congress. Together these oversight hearings rep- resent the most comprehensive Congressional review of the EndaiI~ gered Species Program since the enactment of the 1973 legislation. The 1978 hearings resulted in the development of a comprehensive amendment to the Act (P.L. 95-632). The 1979 hearings were sched- uled to review the implementation of the 1978 amendments as well as a recently completed General Accounting Office report on the Endan- gered Species program (Endangered Species-A Controversial Issue Needing Resolution, CED 79-65). The 1979 hearings also reviewed the United States policy regarding international trade in threatened and endangered wildlife. The General Accounting Office initiated their audit of the Depart- ment of the Interior's Endangered Species Program in early 1978. Although the GAO report was not formally issued until July 2, 1979, the GAO kept the Subcommittee leadership informed of the progress of the report throughout the development of the 1978 amendments to the Act~ Some of the preliminary findings of the GAO werehic~$rpo- rated into the House version of the 1978 amendments and ultimately into P.L. 95-632. In general, the GAO report identified deficiencies which can only be resolved through improved management and administration of the Endangered Species Office. The following is a brief summary of the major features of the GAO report. Inconsistent application of policies and procedures.-~-The GAO alleged that on several occasions the Fish and Wildlife Service delayed or refrained from listing species or designating critical habitat because of the controversy surrounding the listing and designation. Under the Act species are listed as endangered or threatened on the basis of the biological status of the species alone. The Act clearly does not permit the Secretary or the endangered species program m~tnager to decide that species should not be listed because of the potential political repercussions. The GAO report indicated that on at least one occasion prior to the enactment of the 1978 amendments, the Fish and Wildlife Service deliberately delayed action on a petition to list a species because of the potential political controversy associated with the petition. PAGENO="0115" lii The GAO repOrt also noted 1~hat the Fish aiid 1~Tiid1if~ S~r~rid~ developed no less than six priority systems to consider the listing of proposed species. The Service represented to the Committee during the oversight hearings that a priority system for the listing of species has been chosen and has been recently implemented. Insufficient attention to de-listing and reclassifying species.-The GAO report indicated that the Service has assigned a low priority within the listing process'to reviewing previously listed species for re~ classification or de-lisbing. The Fish nnd'WildlifeSei~ice admitted to the Committee that they have made a conscious decision to focus the bulk of their resources on listing species rather than reclassifications or de-listing. The GAO indicated that biologists assigned primarily to the listing process spend only about 1 percent of their time or reclassifying and de-listing species. Questionable land acquisition practices.-Since 1968 the Fish : and Wildlife Service has obligated $30.8 million to acquire 65,000 acres of land for the conservation of endangered and threatened species. The ,GAO report alleged that in some cases funds have been obligated to acquire additional land for species that were not facing a high degree of threat to their survival. The GAO report also alleged that funds were spent to acquire land when viable alternatives existed. The petition and consultation process.-The Endangered Species Act provides that any interested person may petition the Secretary to list or de-list an endangered or threatened species. The Secretary must review the status of the species that is the subject of the petition if the petitioner presents substantial evidence warranting the review. The petition pr6cess is the major provision in the Act for citizen input into the listing and de-listing process. The GAO found that the Service has failed to develop an effective system for logging, evaluating, and acting on the petition. In fact, the GAO discovered that the Service had essentially misplaced 45 peti- tions submitted to it. The GAO on its own initiative developed the first comprehensive list of the petitions submitted to the Service. Legislative recom,inendations.-The GAO made a number of legis- lative suggestions as a result of their investigation of the administra- tion of `the Endangered Species Act. These recommendations included the following: (1) Lindting the listing of separate popnlations of endangercd and threatened~ species.-The Endangered Species Act of 1973 defined the te~rn "species" to include subspeci~s and individual populations of species or subspecies. The 1978 amendments altered this definition to exclude separate populations of invertebrate species from the defini- tion. The GAO report recommends further changes in the definition of "species" to limit the Secretary's authority, to list individual populations. The GAO recommends that the definition of "species" be altered to exclude individual populations. The GAO identifies three benefits of this proposal. First, the Service could not list a species population' adversely affected by a Federal, State, or private project or program when all of the populations of the species, considered in their totality, are not endangered or threatened. Second, the change would force the PAGENO="0116" 112 Service to justify the different treatment of separate populations of the same species. Third, recovery efforts would be maximized by ex- pending the limited funds available on species which are endangered or threatened throughout a significant portion of their entire range. The GAO has made an alternative recommendation to Congress on this issue. The alternative is that the authority to list separate popula- tions be limited to those that are considered "significant." The GAO defines "significant" to include those populations that constitute "sig- nificant" portions of the species' range in tenns of total nUIfll)erS, hio~ logical importance, or the need to maintain the species within the. Tjnited States." The effect of the GAO's alternative recominewlation would be to restrict the instances in which individual populations could be listed. Although the Committee recognizes that the current definition of "species" could be abused by the Service, the Committee did not rec- ommend a change in the definition at this time. The GAO recommen-~ dation, while purporting to reduce unnecessary conflicts, may in fact produce them. The GAO's primary recommendation would force the Service to evaluate the status of a species considering all of the species separate populations. Although in some cases, this review might reveal that the species is not endangered or threatened and does not need to he listed, in other cases, the result may be that the entire species would be listed even though there are some populations that are healthy. The GAO argues that the Service could cure this defect by listing the healthy PoPulations as threatened and tailoring the protective regulations to provide the appropriate level of protection. As the Di- rector of the Service indicated to the Committee, however, this ap- proach could waste precious time, money and personnel. First, the Service would list animals which are not in need of protection, then they would have to issue regulations indicating that the aiiimals do not need Protectlon. The Service would also have to consult, pursuant to Section 7, on the "threatened" species even though these populations were not threatened in the first place. (2) Expandinq the coverage of permanent exemptions.-The 1978 amendments to the Act provided that any exemption granted by the Endangered Species Committee would be a permanent exemption pro- vided that the Federal agency involved had conducted a biological as- sessment on the project (Sec. 7(h) (2)). This provision also provided, however, that an exemption would not be permamment if the Secretary found that the exemption would result in the. extinction of the species. In that case, the exemption committee would have 80 clays to decide whether to grant an exemption notwithstanding the Secretary's finding. The clear intent of Section 7(h) (2) was to make sure that once a ~roject sponsor had conducted a biological assessment, and had re- ceived an exemption from the Endangered Species Committee, that this exemption would apply to all other endangered species conflicts involving the project.. The Conferees on the 1978 amendments believed that equity demanded that once project sponsors had made a good faith effort to discover all endangered and threatened species at the project site. and once the project received an exemption from the Act, the project sponsor should not be required to seek another exemption if a PAGENO="0117" 113 new conflict between the project and an endangered species is sub' sequently discovered. (3) Consultation on proposed ct~nd candidate species.-Section 7 of the Act requires Federal agencies to consult with the Fish and Wi1d~ life Service or the National Marine. Fisheries Service whenever a Fed~ eral action may affect a listed species. In addition to requiring Federal agencies to ensure that their actions do not adversely impact endangered species, the section also requires all Federal agencies to consult with the Department of the Interior (Department of Commerce in the case of marine species) when any of the agency's actions may affect listed species. This consultation process is central to the resolution of conflicts under the Act. The evi- dence presented to the Committee in oversight hearings in 1978 and 1979 suggests that in most instances good faith consultation between the acting agency and the Service can resolve endangered species conflicts. The GAO report suggests broadening the consultation requirement of the Act to include proposed and candidate species in addition to those species that are formally listed as endangered or threatened. The GAO argues that the consultation process should be required to op- erate on all species that are likely to be listed so that conflicts can be resolved at the earliest opportunity. Convention on International Trade in Endangered Species of Wild Fauna and Flora As part of its general oversight activities on the implementation of the Endangered Species Act, the Subcommittee conducted one day of hearings on July 16, 1979, on U.S. policy regarding international trade in threatened and endangered wildlife. The oversight hearing focused on the following issues involved in the administration of CITES: (1) The conflict between the Management Authority and the Scientific Authority. This' conflict' has caused substantial con- cern* among wildlife professionals and hampers the achievement `of a coherent U.S. wildlife trade policy; (~) The absence of any accountability of the `Scientific Au- thority to any official of the Federal Government; and (3) Questionable' interpretations of CITES by the Scientific `Authority and the Management Authority. After reviewing all of the evidence submitted during the course of the oversight hearings the Committee evaluated the need for neces- sary legislative changes to the Act. Subsequently, the Chairman `of the `Subcommittee proposed a series of amendments to H.R. 2218, the Endangered Species Authorization Bill-the House adopted these amendments on October 24, 1979. For further discussion of these amendments see the Activities Report discussion of H.R. 2218. A separate oversight report and Committee recommendations are intended to be published later in this Congress. Ocean Dutimping Oversight On June 27, 1979, the Subcommittees on Fisheries and Wildlife Conservation and theEnvironment and on Oceanography held a joint oversight hearing ~n:qeean di~mpiz~g4 See the Oceanography Subeom~ mittee section for a full report. PAGENO="0118" 114 Fish rind. Wildlite Coordination Act Under the Fish and Wildlife Coordination Act, equal consideration must be given to fish and wildlife habitat by Federal agencies when evaluating the impacts of any Federal activity or any private activity subject to Federal permits. Oil and gas exploration and development activities which take place in wetlands are subject to the dredge and fill permit program of the Corps of Engineers. In the New Orleans District Office of the Corps, up to 100 such permits are applied for monthly. While the individual impacts of such activities are usually quite small, their cumulative impacts contribute to significant wet- land losses in coastal states, particularly Louisiana and Texas. Be- cause of these anticipated habitat losses, up to ~0 percent of the oil and gas permits applied for in the New Orleans District are objected to monthly by Federal fish and wildlife agencies and the activity can- not receive a permit until the objection is resolved. In response to complaints by several state energy resource agencies that permits for such activities were being unduly delayed, the Sub- cOmmittee held a day of oversight hearings on October 5, 19~9, in New Orleans, Louisiana, to evaluate the procedure used by the Corps of Engineers in processing permits for wetland activities which have been objected to by agencies under the Fish and Wildlife Coordina- tion Act. Testimony was received from state officials, oil and gas in- dustry representatives, and the Federal agencies involved. The means by which objections to proposed work in wetlands are resolved between the Corps of Engineers and the U.S. fish and wildlife agencies was closely scrutinized. * The Corps of Engineers anticipated that many of the delays being perceived would be eliminated through a pending interagency agree- ment with the resource agencies. The agreement would streamline~ the procedure by delegating many final permit decisions involving minor activities to the Division Engineer of the Corps instead of requiring that disputed permits be resolved in the `central offices of the agencies in Washington. It was further pointed out by the Corps that in most cases, even disputed cases which are sent to Washington for final resolution are acted upon within 90 days. The agencies were urged to conclude the interagency agreements as rapidly as possible so that balanced decisions required by law are made within a reasonable length of time. Pacific Northwest SaZmon Enhancement Program On October 15. and i6,197~ the: l~committee~ conducted.. oversight hearings on the Carter Administration's Washington State salmon enhancement "buy back," and loan guarantee proposal. The Admin- istration's proposal is intended to implement the so-called Boldt de- cision and to resolve existing controversies in the Pacific Northwest salmon fishery, SUMMARY OP ADMINISThATrON PROPOSAL 1.' Enhancement.-The Administration has proposed to provide $~O million in Federal matching funds fot' the enhancement of anaçlro- nious species and their habitat in Washington State PAGENO="0119" 115 Miil~oi~ Capital expenditures-Hatcheries and other p~ject~__~~ ~ $31 Related operations and maintenance funds (5 yr.) 19 Total Federal share 50 The State of Washington would be expected to match' these funds. 2. Fleet adjustment (buy back) program.-The Administration has proposed Federal matching funds of $25 million to buy back non- Treaty fishing vessels over a ten year period. The stated objective of this program is to bripg,, the, Indian, aiid non-Indian fIe~ts. into appi~opriate balance consistent with the Supreme Court decision (Washington v. Fishing Vessel Association) so that fishing remains a viable economic occupation and so that fishing can occur without adjustment in fishing times. 3. Loan and loan guarantee pro graim.-In addition to the enhanced ment and buy back program; the Administration has proposed to alIó- cate $15 million for a loan and loan guarantee program to assist Treaty tribes in up-grading vCssels., and gear. The loans and lan guarantees would be used to more adequately harvest the Treaty tribe's share of the resource and to achieve a balance in fishing effort between treaty and non-treaty fishermen. The State of Washington would not be expected to match these funds. BACKGROUND The Boldt decision and resulting controversy In 1974 Judge Boldt of the Federal District Court in Washington State issued his now famous opinion interpreting a series of treaties negotiated between the Federal Government and Indian tribes in the Pacific Northwest in the mid-1850's. The major question resolved by the Boldt decision was the meaning* of the following phrase (or its equivalent) which appeared in the treaties: "The right of taking fish, at all usual and accustomed grounds and stations, is further secured to said Indians, in common with all citizens of the territory." Judge Boldt decided that the quoted phrase. n~eant,~in part, that certain Indian tribes and tribal members within a broad geographic "case area" in western Washington State had an enforceable right to an opportunity. to harvest a specified proportion of the salmon and steel- head resource at the tribes' usual and accustomed fishing grounds. The court developed a formula which provided the tribes with the: opportunity to take 50 percent of the harvestable numbers of salmon ~ ditional~fishingg4~ounc1s. The `~ court ~defined the harvestable number of fish to be the total number of fish within the case area regulatory jurisdiction of the State of Washington, after deducting spawning requirement, which would have been available for harvest at the treaty tribe's usual and accustomed fishing places. The court also provided an adjustment to compensate the tribes for fish harvested enroute by non-treaty fisher- men within Washington waters. The essence of the court formula was to establish a means for the allocation of' the anadromous fish between Indian and non-Indians. The "Boidt" decision was met with strong and bitter reaction by non-treaty commercial and sports fishermen, The salmon catch by PAGENO="0120" 116 treaty fishermen increased from about six (6) percent of the total Washington Stat.e landings in the years immediately preceding the decision, to approximately fifteen (15) percent by 1976. There is some uncertainty about how much higher the Indians share would have to go to comply with the decision. In order to achieve the increased level of catch for treaty fishermen, special "treaty only" salmon fishing days were established, and other regulations were put into effect to implement the court decision. The result was a complex and often confusing situationS The net effect of the many court orders was to remove day-to-day management of the fishery from the State to the court. Extensive litigation, acts of violence, vandalism and damage to boats and nets increased with the implementation of the court de~ cision. Between February 1974 and the spring of 1978 numerous Court decisions were rendered by Federal and State courts on this issue. These decisions, while doing little to change the original decision, were often contradictory and served to heighten tensions between treaty and nontreaty fishermen. Because steelhead trout, a highly prized anadrornous sport fish, were also affected by the court decision, sportsmen and sport groups also reacted angrily to the decision, as well as to the steps taken to implement the decision. The Supreme Court decision In July of this year the U.S. supreme Court affirmed, in large part, the 1974 decision of Judge Boldt. The Supreme Court modified the earlier Boidt decision in two significant respects. First, the Court ruled that Boidt erred in excluding fish taken by the Indians on their reservations from their share of the runs, and in excluding fish caught for ceremonial and subsistence purposes. Second, the Court made it clear that t.he 50 percent equitable division ordered by Judge Boldt. imposes a "maximum but not minimum allocation." The Court stated that the treaty secured the Indians "so much as, but not more than, is necessary to provide the Indians with a livelihood-~that is to say,, a moderate living." The Subcommittee received testimony from representatives of the Administration, Northwest Indian tribes, and the commercial and re.crea~tiona.l fishing industry. The Committee is awaiting the formal suhrni~si.on of the Administration's legislative proposal. N~tional Wildiife Refvqe System Oversight On October 29 and 30, 1979, the Subcommittee conducted oversight hearings on the National Wildlife Refuge System. The hearings focused on a recently completed task force report on the policy, op- eration, rnaintep~arice, funding, administration, and identity of the National Wildlife Refuge System. BACKGROUND OF THE NATIONAL WILDLIFE REFUGE SYSTEM The National Wildlife Refuge System includes 521 units of land encompassing 34.1 miflion acre.s. Wildlife Refuge System lands include wildlife refuges. wildlife ranges, game ranges, wildlife rnanagem~nt areas, and waterfowl production areas. All of these areas are estabw PAGENO="0121" 117 ~ish~d primarily for re~toration; pre~ervation, and management of ~ril.dlife an~d wildlife hubitat~ In contrast to the Park Service, th~ U.S. Fishand Wildlife Service employs active habitat manipuiation~ techniques on a number of refuges, although most of the land under its jurisdiction is directly managed only through protective measures. The National Wildlife Refuge System Administration Act is* the basic organic statute governing the administration and management of the Refuge System. The Act provides that the Secretary may per- mit hunting, fishing, public recreation and accommodations, and access and easements for powerlines, pipelines, and roads when he determines that such uses are compatible with the refuge's purpose. The Administration Act also provides that the Secretary may permit economic activities on refuges, again if he determines that these ac- tivities are compatible with the primary purpose for which the refuge in question was established. Examples of economic activities that occur on.refuges include timber. harvesting, haying, grazing, sand and gravel extraction,, and mineral leasing. In theory, the Refuge Administration Act permits harcirock mineral location and extraction if it is found to be compatible with the refuge. In .practice, hardrock mining has been prohibited on all but two wild~ life refuges by either the Executive Order creating the refuge or by regulation. Oil and gas development occurs on a number of refuges in the System where subsurface rights were ret~iined by previous owners. Several refuges, most notably the Delta Refuge in Louisiana, and the Kenai Moose Range in Alaska, also have significant ongoing oil and gas leasing programs. Petroleum development on refuges in the lower 48 States is, by regulation, limited to those situations where the refuge is subject to drainage. A total of 766,998 acres of wilderness has been designated within units of the Refuge System. A wilderness designation nearly al- ways prohibits commercial development, and will require all non- conforming activities to be conducted. in the least obtrusive manner possible. While wilderness designation' does not preclude all activities of man in the area, such designation is intended to determine how ad~ mmistrative and public use activities are carried out. Generally, `ad- ministrative activities within a wilderness area are required to be carried out with the minimum tool necessary to successfully, safely and economically accomplish the desired management objective. THE TASK FORCE REPORT ~Tñ June `j977 A~ssistant Se~retary of the Interior Herbst ordered the estabh~hment of the Wildlife Refuge Task Force to address growing concerns from within and outside the Fish and Wildlife Service about the policy, operation, maintenance, funding, administration, and `identity of the National Wildlife Refuge System. On January, 6, 1978 the 10-member Task Force submitted `its re~ port. The Direetor of the:Fish and Wildlife Service and the As~istant Secretary commented on the Task Force recommendations and modi~ fled some of the recommendations The Fish and Wildlife Service ha~ been directed to incorporate, the recommendationa into Service policy. PAGENO="0122" 118 The Subcommittee received testimony on four separate aspects of the task force report-wildlife objectives and management, refuge management and non-program uses, public use of refuges, and the refuge acquisition program. The Subcommittee received testimony from a large number of wit- nesses representing many of the conservation groups that participated in the development of the task force recommendations as well as a number of other interested individuals. Fi~1&a~r~e$ ~ Oversight On December 10, 1979, the Subcommittee held an oversight hearing on fisheries development. At issue was the question of the proper Fed- eral role in stimulating the attainment by U.S. fishermen and fish pro- cessors of full utilization of the fishery resources subject to United States jurisdiction. Witnesses included: Terry Leitzell, National Marine Fisheries Serv- ice; Kathy Nordstrom, National Food Processors Association; Lucy Sloan, National Federation of Fishermen; Tom Reynolds, National Fishmeal Institute; Gustave Fritschie, National Fisheries Institute; Dave Burney, U S Tuna Foundation, Gil Radon~ki, N~tional Sport Fithing 1nstitute~; Larry Brodie, New' England Fish Company; ~Bill Utz, National Shrimp Congress; Jon Damron, West Coast Fisheries Development Foundation; Claude Ver Duin, Great Lakes Fisheries Development Foundation; and Sara Hemphill, Alaska Fisheries De- velopment Foundation. The Administration witness testified that the U.S. harvest could be doubled to five million metric tons per year and that full utilization by U.S. fishermen of the most promising non-traditional species could create 43,000 new U.S. jobs and add $1.2 billion to the national wealth by 1990. Administration policy emphasized joint Federal/private sector cost-sharing programs, regionally oriented development ac- tivities, targeting on specific fisheries, and broader research and de- velopment efforts which affect more than one fishery or group of fisheries. An Administration bill was in preparation to assist in bet- tci~pursuingthat ppljcy. In commenting on pending Congressional initiatives, the Adminis- tration witness rejected measures to refocus and revitalize the Sal- tonstall-Kennedy program, opposed the naming of additional fish- eries `attaches, strongly opposed for'the time being, the extension of the Capital Construction Fund (CCF) and Vessel Obligation Guarantee Program to shoreside facilities, and refused to support any amend- ment of the Fishery Conservation and Management Act to stimulate levelopment. However, the Administration supported a transfer ~of funds in the Fisheries Loan Fund, hertofore under administrative moratorium, to the Vessel Obligation Guarantee Program but sought `an overall limit to the amount of guarantees that could be provided. Industry witnesses disagreed with the Administration on each of the foregoing points, except that which related to the transfer of the funds in the Fisheries Loan Fund. Revitalization of the Saltonstall- Kennedy. (S-K) Program was given top priority' and extension of COF and the Vessel Obligation Guarantee Program to shoreside fa- cilities received wide support. One point of disagreement was eon~ PAGENO="0123" 119 cerning the question of whether S-K funds should be made available fer recreational fisheries development projects. The representative of the sport fishing industry supported such availability, but the witness for the commercial fish processing industry opposed it. There was not a similar split between the fisheries interests con- cerned with resident and distant water fisheries. Each of those seg~ ments of the fishing industry supported the use of S-K funds to stimu- late the development of both fisheries. Fisheri~s dev~opmcnt f n~i'atiqus en~dorsed more e~teusive ~`ed- eral efforts to help bring about full utilization of U.S. fish resources by U.S. fishermen. The past performance of the Administration on fish- eries development was criticized. Further hearings are anticipated during the second session. INTERNATIONAL OvERsmHT Eastern Tropical Pacific Tuna Regime The Subcommittee played an active role with respect to the tuna fishing regime in the Eastern Tropical Pacific. Tuna harvested from that' area' `by U.S. fi~herm~n p~o~ride' an important contribution to the national economy. The Convention for the Establishment of an Inter-American Tropical Tuna Commission (IATTC) was concluded in 1949 and entered into force for the United States and Costa Rica, the two origi- nal signatories, in 1950. Article V provides for accession by any government "whose nationals participate in the fisheries covered by this Convention," and in accordance with that provision, Canada, France, Japan, Mexico, Nicaragua, and Panama acceded. The Convention neither recognizes nor expressly derogates from the positions of the United States, on the one hand, and of th~ de- veloping coastal States, on the other, concerning coastal State )uriS- diction over tuna. Indeed, this fact was recognized in an exchange of letters between the United States and Costa Rica in 1950. The Convention created a management regime for tuna in the Eastern Tropical Pacific. Yeilo~fin tnna..cens~rta~tion measures were first adopted for the area in 1966 and have continued to the present. No measures have been established for other species. Special allocations have been established for coastal States and have increased over the years as follows: 1969-4000 tons for small vessels; 1971-6000 tons for small vessels;, 1972-2000 tons for newly constructed vessels of less dev~loped countries (LDC's); 1978-6000 tons for newly constructed vessels of LDC's; 1974-8000 tons for newly constructed vessels of LDC's 1975-10,QQO tons for newly constructed vessels of LDC's; 1976-13,000 tons for newly constructed vessels of LDC's; 19.78-26,000 tons guaranteed to Mexico; 7,500 tons guaranteed to Costa Rica. Followin~r notice required by the IATTC, Mexico withdrew from the Convention on November 8, 1978 and Costa Rica withdrew in April, 1979. Those `States believed that `they should enjoy greater PAGENO="0124" 120 guaranteed allooations . and ~ that other. ~important. changes to the ~re~- gime were required to advance their national interests and those of the other developing coastal States Negotiations were un~dertaken to establish a new convention The talks involved primarily Costa Rica, Mexico and the United States At length, the number of issues was reduced to four What would be the guaranteed allocation of yellowfln tuna to the Latin American coastal States ~ What would be the an angement for the last trip of the inter national fleet (including U S vessels) ~ What would be the fishing license fees to be distributed to the Latin coastal States ~ What would be the nature of the special arrangement for old and disadvantaged vessels of the IT S fleet ~ Negotiating positions of the U S , on the one hand, and Costa Rica and Mexico, on the other, were at first widely separated Concerning the guaranteed allocations for yellowfin in the Convention area, the Latins insisted on 69% for themselves and the U S proposed 45%, each side taking a different view concerning the proper method for determining, where the tuna was concentrated in the convention area (i.e., whether and to what extent the tuna were concentrated inside or outside of the Latin 200 mile zones) and, therefore, the proper allo cation of quotas to reflect that determination The United States, in an effort to reach a compromise, offered to accept 57% This offer was made without prior consultation with the Congress and the U S tuna industry The Subcommittee Chairman and Ranking Minority Member met with President Carazo of Costa Rica in San Jose to discuss these issues During the course of the discussions, President Carazo indicated a~ strong desire for a successful conclusion of the negotiations and of fered to explore new avenues to realizing that goal The Subcommit tee representatives, noted that, historically, the coastal States have never harvested more than .27% of the available resource.~ Moreover~ scientific evidence indicates that only 45% of the resource is found in the zones of the coastal States Only 43% of the Convention area lies within 200 mile zones (and 8% of that area is in the U S Zone) Coast al State allocations under negotiation, however, would apply to the entire area The coastal States, therefore would enjoy an allocation of a resource which spans over an area 65% of which is beyond their claimed fisheries iurisdictions It was feared that a 57% guaranteed coastal State allocation would have an adverse impact on the United States tuna industry That allocation risked a significant. defection of U.S.. tuna .ve~sels from the U.S. flag to Latin American flags for the sake of taking advantage of a guaranteed allocation Processing capacity would follow These are results which U S tuna boat owners, with the support of U S tuna processors, strongly resist and which would operate to the detriment of the national employment and balance of payments positrons Subsequently, the U S withdrew the 57 percent proposal and, ulti mately, offered a tonnage based formula, with the guaranteed alloca tion to coastal States tied to the overall catch limits That is, the guar anteed allocation would increase or decrease in `proportion to the level, PAGENO="0125" 121' from year to year, of the total allowable yellowftn' catch.' Mexico ~nd Costa Rica have reftised to accept that arrangement and insist that their allocations be fixed without regard to anr~ual fluctuations in the overall catch limit. Resolution of the issue of the last trip has also evaded the negotia- tors. Mexico and Costa Rica continue to demand that limits be placed on the last trip, with the consequences likely being that a substantial number of vessels would be compelled to conclude their fishing a'ctivi- ties without filling their holds. The U.S. is resisting that result. Other issues appear close to settlement. Pending conclusion of a long-term regime, certain ad hoe arrange- meiits have been made. For 1979, Costa Rica and Mexico agreed (by an exchange of diplomatic notes with the U.S.) to access to their 200- mile zones by U.S. tuna vessels, in return for extension by the United States of the IATTC measures that were applicable in. 1978. This arrangement ended the situation in which U.S. vessels had been seized by Costa Rica and the U.S. had imposed a retaliatory embargo on the importation of costa Rican tuna products. Unilateral jurisdiction over tuna. is claimed' by Costa Rica (and Mexico), but' the United States maintains that only internationally agreed management meas- ures may be imposed, under international law, on these highly migra- tory species that range through many 200-mile zones and' into the seas beyond. When there are seizures of `U.S. tuna vessels based on uni- lateral claims, the U.S. imposes' embargoes on certain fish products of the foreign countries concerned. `It is anticipated that a satisfactory' three-year agreement can be concluded in one more negotiating session. If the new, long-term re- gime is not in place by the time' the 1980'flshing season begins, further interim measures are likely to be sought. Negotiations on the Convention on the Conservation of Migratory Species of Wild Animals BONN, WEST GERMANY, JUNE 11-23~ 1979 At the invitation of the Federal Republic of Germany, sixty-three Nations were present in Bonn to attempt to negotiate a treaty for the conservation of migratory species of wild animals. The Committee sent two staff members to monitor t'he proceedings and to advise the U.S. `delegation on the Congressional viewpoint of major provisions of the draft treaty. From the outset,'the U.S. position was to try and assist in ironing out a workable Convention, although it was generally agreed that the U.S. would benefit little' from the treaty. Existing U.S. wild- life laws and treaties to which the U.S. is a signatory provides as great a measure of protection as the Bonn Convention would provide. The working document was drafted by West Germany and con- sisted of a framework for countries to'conclude special agreements with each other for migratory animals in two categories: those of an un- favorable `conservation status requiring immediate and' stringent pro- tection, and all other species selected to be the subject of agreements `between countries. For the first category, treaty requirements for con- servation action had a direct and binding'effëct on contracting parties. PAGENO="0126" 122 The U.S., because of many provisions in the treaty which were irn- acceptable, arrived in Bonn with authority to nego1~iate rather than with full authority to sign a treaty. Changes required by the U.S. and which were communicated to the West German Government several weeks in advance of the Convention were as follows: Definition of "migratory species" must not include "shared species," or species which cross international boundaries sporadi- cally for reasons other than true biological migration; F~ish and shellfish should be excluded from the treaty; Appendix I species (calling for. mandatory agreements) must be equivalent to "Endangered" status in U.S. law; Requirements for action to conserve Appendix II species must be entirely discretionary; Existing migratory wildlife treaties must be exempt; Exceptions for "taking" of Appendix I species must accom- modate scientific, subsistence and management purposes; and Deletion of binding arbitration requirements regarding suffi- ciency of conservation agreements. It was obvious that strong U.S. positions, particularly the U.S. posi- tion to exclude fish and shellfish and marine mammals protected under existing agreements, would be unacceptable to many countries in Africa, Europe, and Asia. Canada, Australia, Japan and the U.S.S.R. however, shared the concerns of the U.S. regarding marii~ë species and possible conflicts with existing treaties and tr~iaty negotiations. An- other major concern of the U.S. was the recognition of Federal-State wildlife management systems in Federal States such as the U.S., Canada, Australia, Switzerland, and Austria. * During the course of the Convention in meetings, discussions, and formal votes, the U.S. delegation was unable to find sufficient support from other countries to modify the Convention document to adequately reflect U.S. positions. The Convention adjourned with the U.S. abstain- ing from voting on the treaty and initialing the final document with a statement indicating that the treaty was unacceptable to U.S. interests. Con'vention on International Trade in Endangered Flora and Fauna-. Costa Rica MARCH 18-3O~ 1979 On March 25,1979 the Chairman of the Subàommittee on Fisheries and Wildlife Conservation and the Enviromneñt, Mr. Breanx, ~nd the ranking minority Member, Mr. Forsythe, traveled to San Jose, Costa Rica to attend the Convention on International Trade in En- dangered Flora and Fauna (CITES). Appointed by the Speaker of the House as Congressional advisors to the official U.S. Delegation,. Mr. Breaux and Mr. Forsythe conducted two days of meetings and discussions with the Interior and State Department delegation im- bers to review U.S. proposals for revising the lists from which inter~ national trade in endangered wildlife is regulated. The purpose and viability of other U.S. proposals to modify the wQrking text of the Treaty were reviewed and ~he C~mmittee Me~nbers met with. U.S. representatives of inte~n~atio~jal ctxis~rvation groups in an effort to~ secure their support for the U.S. proposals. . PAGENO="0127" 123 The U.S. Delegation to the Cônventioti received ConventioI~ ap~ proval for many of their proposals during the course of the negotia- tions. The American alligator, once an endangered species, was moved from Appendix I to Appendix II of the treaty thus allowing closely regulated international trade in alligator hides. A proposal to create a list of parts and derivatives to be controlled under the Con~ vention which was considered damaging to world wildlife conserva- tion goals was defeated with the leadership of the U.S. Delegation. Th~ U.S. presented a model identific~ation manual to assist customs offi~ials. in reeo~i~izing wildlife products. The p~k~ties agi~e.ed to. seek funding for production `and distribution of the manual from the United Nations Environmental Program (UNEP). A proposal to interrelate the CITES treaty provisions with International Whaling Commission provisions regarding commercial whaling was presented along with a recommendation for wider geographical representation on the CITES standing Committee. The U.S. also obtained approval for listing hybrids on CITES appendices when necessary to control similar looking species or when qualifying for protection in their own right. SUBCOMMITTEE ON COAST GUARD AND NAVIGATION Total bills referred to Subcommittee 30 Bjlls~reported, passed, and now public law 1 Bills reported 8 Hearings held (days) 18 Markup sessions (days) 6 LEGISLATIVE ACTIVITIES Hi?. 85-Comprehensi've Oil Pollution Liability and Compensation Act The purpose of the bill is to establish a comprehensive system of liability and compensation for damages caused by oil pollution in the navigable waters of the United States, their connecting or tributary waters, and in certain high seas areas. The legislation establishes strict liability, within specified limits, for the owners and operators of the sources of oil discharges and a backup, çn'i~pensatio~i fund to ~` respond to damage claims tl~tkare not satisfied by the party responsIble for the discharge and damage claims where the responsible party cannot be identified. The compensation fund would be derived from a fee, collected by terminal and refinery owners, of not to exceed three cents per barrel of oil, and would be maintained at a le'vel of between $150,000,000 `and $200,000,- 000. The scheme would supersede duplicative funds~ and procedures that now exist in various FedOral and State statutes. During the 94th Congress, the Subcommittee addressed the problem of oil pollution in considering a proposal from the Executive Depart- ment, following recommendations of the Attorney General resulting frpm, a, study of the matter directed by the Deepwater Port Act of 1O~4 J~ight days of heai~ings were held during the ~4th Congress and, after five dayeof up~sess~ons~ the Suboominittee approved. ia R * 14862, a clean bill, which was ultimately reported by unanimous voice vote and was reported in House Report 94-1489, Part 1, filed on Sep- PAGENO="0128" i24 tember 9, 1976. Since H.R.. 14862 had been referred' joiutly to ~the Committee on Merchant Marine and Fisheries and thQ Con~mit1e~ on Public Works' and Transportation, and since no action on , th~ bill could be taken by the Committee on Public Works and Trans- portation before the end of the Session, the bill died with the adjourn- ment of the Congress in early October 1976. Beginning early in the 95th Congress, several bills were introduced on the subject, all.of which were based on the.language of.H.R. 14862. The bills introduced and considered by the Subcommittee included H.R's 47, 48, 776, 1827, 1900, 2364, 2365, 3038, 3134; 3549, 3550, 8691, 3711,3926,4570, and 6213. * Four days of hearings were held; and, after three days of markup, the Subcommittee approved a clean bill, H.R. 6803. The Committee on Merchant Marine and Fh~heries, in markup session on May 4,1977, adopted six amendments to the bill, four of which were technical and cQnforming in nature; and, by unanimous voice vote, ordered H.1R. 6803 reported as amended. The report was filed as House Report 95- 340, Part 1 on May 16,. 1977. Since the bill had been referred jointly to the Committee on Public Works and Transportation, the bill was thereafter considered by th~at Committee and, on June 30, 1977, that Committee-through its Chair- man-notified the Chairman of the Committee on Merchant Marine and Fisheries that it supported the bill as reported, with the condition that certain proposed amendments would be adopted. In general, the proposed amendments were technical and clarifying in nature.. On July 13, 1977, the Full Committee met and adopted the proposed amendments of the Committee on Public Works and Transportation. Thereafter, on September 12, 1977, the bill was passed by the House, incorporating the amendments of both Committees, under suspension of the rules,, by vote of 332 to 59. On September 13, 1977, the bill, as passed by the `House, was received in the Senate and referred jointly to the Committee on Commerce, Science, and Transportation and the Committee on Environment and Public Works. On September 12, 1977, the Senate Committee on Commerce, Sci~ ence, and Transportation acted on this legislation and filed Report `95-427 on S. 2083, a companion bill; however, the Senate Committee on Environment and Public Works did not act until the following year. During April and May of 1978, the Senate Subcommittee on En- vironmental Pollution held hearings,, but it appeared that there was' a possibility that action on this legislation would be postponed until the next' Congress. On August 2, 1978, a letter was directed to the Senate Subcommittee on Environmental Pollution .expressin~ concern over the need to enact Soil pollution liability and compensation legis- latiOn during the 95th Congress. On August 25, 1978, the Senate Com- mittee on. Environment and Public Works filed Report 95-1152 on S. 2083. Subsequently, on October 5, 1978, the Senate acted on and passed S. 2083. They then considered H.R. 6803 by striking all after the enact- ing clause and substituting therefor the language of S. 2083. This lan- ,guage, while it included many of the House positions, was a complete rewrite of the House `bill' and' took a substantially different approach. Having received the Senate language only a few days'prior to adjourn- PAGENO="0129" 125 ment, it was not possible to convene a conference, nor was it possible to evaluate the implications of the provisions of the Senate bill. Therefore, on October 12, 1978, the House amended H.R. 6803, as amended by the Senate, by using the original House language and in- cluding within it quite a few of the Senate positions with which it was in agreement. However, the Senate took no further action and the bill died. On January 15, 1979, H.R. 85 was introduced by Mr. Biaggi with over fifty cosponsors, including Mr. Murphy, Chairman of the Full Committee, and H.R. 29 was introduced by Mr. Studds with thirty-six cosponsors. The Subcommittee held hearings on these legislative pro- posals on March 13-14,1979. Testimony was received from the Coast Guard (representing the Administration and the Department of Transportation); from rep- resentatives of other governmental agencies and advisory groups, en- vironmentalists, terminal operators, truck operators, oil companies, shipping interests, and offshore interests; and froni the States of Mary- land and Virginia. Numerous associations provided statements for the record, while others submitted their views in correspondence addressed to the Subcommittee or to individual Members. After receipt of Executive Communication No. 1057 of March 21, 1979, a legislative proposal of the Secretary of Transportation, a bill was introduced by request by Mr. Murphy on April 4, 1979; This bill, H.R. 3441, was generally similar to the other two bills. Although hearings were not held explicitly on this bill, its provisions were made known to the Members and were considered at markup session. Since the subject of H.R. 85 had been before the Committee during the two previous Congresses, most Members were familiar with the is- sues, thereby reducing the time required for discussion and review. $ome of the more important issues that were again considered were those related to preemption of certain duplicative Federal and State Jaws; financial responsibility of onshore facilities; the need to provide consistency with existing pollution laws; defenses to liability; limita- tions, of liability for particular types of vessels and facilities; types of claimants; and the availability of oil pollution insurance. There were relatively few new issues, with the most important being that of haz- nrdous substances liability and compensation. At the conclusion of the hearings, the Subcommittee met in markup session on April 10, 1979q at whi~h time eleven noncontroversial smendments were proposed and adopted en bloc. The Subcommittee also `accepted four other amendments and a number of technical atad conformii~g amendments. The Subcommittee rejected one amendment, while four amendments that had been offered were withdrawn. Stthse- * quontly, the Subcommittee oi~dered a Committee Print of H.IR.' 85 and recommended that the bill, as amended, be reported to the Full Cothmittee. The Full Committee considered the legislation on May 9, 1979 and, * after accepting an amendment, ordered the bill reported to the' House as House Report 96-172, Part 1, on May 15, 1979. The Committee on Public Works and Transportation. to which H.R. ~5 was joIntly referred, held a hearing On the bill on September 98, 1979 but took no furI~her action prioi~'to the ~nd of the First Session. 50-410-80--9 PAGENO="0130" 126 H.R. 1196-Vessel Documentation Act Documentation is the administrative procedure by which a vessel is registered or licensed as a vessel of the United States for identification purposes and certified as authorized to engage in a specific trade. Ves- sel documentation carries the imprimatur of the nation that issues the document to operate the vessel. The rigthts, privileges, and immunities of that nation and the international comity attendant with interna- tional law and diplomacy follow the vessel wherever it may be on the high seas or territorial seas of another nation. The first system for documentation of vessels was established on September 1, 1789, by the 11th Act of the First Congress. Sueceeding Congresses periodically amended and added to these early laws in an effort to meet changing conditions and the expanding needs of water- borne commerce. In addition to the amendments and additions to the basic 1789 Act, numerous transfers of functions and reorganizations have been superimposed on those early statutes, but have never been rationally incorporated into them, nor have the statutes been expressly amended to accommodate those transfers or reorganizations. Since assuming responsibility for the documentation function in 1967, the Coast Guard has carefully examined the procedures and transactions involved in* the documentation of vessels with a view toward improving service and reducing expenditures. While a number of minor improvements have been made, major improvements are barred by existing statutes. A 1968 study of existing statutes and reg- ulations by tihe Department of Transportation recommended legisla- tion to create a simpler and more efficient documentation system. On March 5, 1971, the Secretary of Transportation forwarded an execu- tive communication to the Congress, proposing a number of changes to implement the recommendations of the study. During the 92nd Con- gre~s, these recommendations were incorporated in H.R. 760, the Ves- sel Documentation Act. Hearings were held and~ on July 26, 1971, the bill was reported, with a number of minor amendments, in House Report 92-378. H.R. 760 was passed by the House of Representatives on August 2, 1971, but the Senate was not able to take any action and the bill died with the ad- joiirnment of the 92nd Congress. During the 93rd Congress, H.R. 735, an identical bill, was intro- diice4: however, no action was taken by either the House or the Senate. During the 94th Congress, the Department of Transportation pro- posed a package of four bills related to the modernization of laws- two of which dealt with the documentation of vessels. There was no opposition to revising and modernizing the laws pertaining to the documentation of vessels as proposed by H.R. .11412. There was, how- ever, considerable criticism of H.R. 14111. which eliminated the option enjoyed by owners of pleasure vessels of five net tons or more to docu- ment their vessels under Federal law in lieu of numbering them under State law. The opposition was so strong that the Administration re- considered its recommendations. The Congress took no action on any of the four proposals. H.R. 187 was introduced in the 95th Congress. It was similar to previous bills, except that it did not include the. controversial elimina- tion of Federal documentation of pleasure vessels. However, no action PAGENO="0131" 127 was taken by either House due primarily to the need to review exist- ing legislation concerning the inspection and control of foreign tank- ers using our waters-which was precipitated by a rash of tanker accidents during the winter of 1976-77, the most famous being the Argo Merchant grounding off Cape Code; and to the need to act on legislation to provide a comprehensive system of liability and compensation for oil spill damage and removal costs. The need for amendatory legislation to permit modern procedures and business techniques in the documentation of vessels remains para- mount. At the end of calendar year 1978, the Coast Guard had 10~3 separate locations where documents could be issued. It employed 123 persons who performed over 216,000 transactions for the year in con- nection with over 124,000 documented vessels of the United States. The annual budget for 1978 was in excess of $3 million. H.B. 1196 was introduced by Mr. Biaggi on January 22, 1979. A hearing was held on June 20, 1979, and testimony indicated general support for the bill. It. was agreed that enactment would reduce the burden on the maritime industry and also provide for easier adminis- tration by the Coast Guard. This bill would eliminate the restrictive administrative details o~f present law, and would delegate responsibility and regulatory author- ity for the administration of the vessel documentation program withiii specific guidelines. This will permit the Coast Guard to introduce modern procedures and apply up-to-date business tecluñques better to meet the changing needs of the maritime industry and the public. While IELR. 1196 provides for extensive revision of antiquated pro- cedures, it does not change the purposes and objectives of vessel docu- mentation or the underlying substantive policies. The Subcommittee considered the bill in markup session on July 24, 1979, and adopted a number of technical and conforming amendments. The Full Committee ordered the bill reported to the House on July ~5., 1979. House Report 96-428 was filed on September 13, 1979. }LR. 1196, as amended, passed the House under suspension of the rules on September 17, 1979. No action was taken by the Senate prior, to the end of the First Session `of the 96th Congress. H.!?,. 1197-Tonnage Measurement Si'imp~ca'tion Act ~he requirement for the admeasurement of .ve~sels oi~iginated during' the ~,ariy days of this nation. At that time, it was recognized that' i't was.necessary to measure a vessel to determine its tonnage so that there coulU 1?e a standard basis for the establishment of tolls, taxes,. `insur-' ance premiums, port charges, and similar items that affect vess~l operating costs. Tonnage, as it relates to the vessel admeasurement laws, is not a measure of the weight of a vessel or the cargo it can carry, but `r~fher. it ~s the measure of the volume of the space in' a vessel. These gross~ and net tonnages are expressed `in units where 100 cubic feet equals one' ton. These tonnages are used to determine the ap~plicabiJãty of~int~~mi-' tional conventions, treaties, laws, and regulations. They are also used, for, computing limits `of liability, tonnage duties, port `a~nd pilotage' fees, and similar charges. To facilitate movement of vessels `in trade,, governments of maritime nations have adopted similar ruIe~ ~for ton-' nage measurement of vessels. PAGENO="0132" 128 The tonnage measurement laws are administered by the Coast Guard. That organization makes the measurements and calculations necessary to determine the gross'and net tonnages of a vessel. The pros- cut law-found in section 4148 of the Revised Statutes of the United States and codified in section 71 of title 46 of the United States Code- had its inception with the Act of December 31, 1792 (1 Stat. 290). The Act of May 6, 1864 (13 Stat. 64) made a number of changes and was the first major revision since the original enactments in 1790 and 1792. In 1873, the 1864 Act was modified ~s part of the extensive effort to codify the statutes of the United Stetes in force on December 1, 1873, and became section 4148 of the Revised Statutes' of the United States. This section and the procedures specified in it remained relatively. unchanged until the mid-1960's when a need arose to simplify admeas- urement procedures for the ever-increasing number of pleasure vessels resulting from the phenomenal growth of the recreational boating industry. On June 29, 1966, Public Law 89-476 (80 Stat. 229) amended' section 4148 of the Revised Statutes to permit the owner of a pleasure vessel the option of having his vessel admeasured under a simplified *admeasurement procedure instead of the complex procedure detailed. in section 4148.' The simplified procedure assigns a gross and net ton- nage that are obtained from the product of the vessel's length, breadth, and depth in feet, and from appropriate coefficients. These coefficients are prescribed by regulation and are based on the vessel's hull form. This simplified procedure applied only to pleasure vessels, not to commercial vessels. `The success of the simplified tonnage measurement system for ple.as- ure vessels led to the conclusion that it should be extended to small corn-. mercial vessels. Legislation was originally introduced on January 20, 1976 in the form of H.R. 11410; however, no action was taken. In. the next Congress, H.R. 184 was introduced on January 4, 1977; but, due to the pressure to enact tank vessel safety and oil pollution liability and compensation legislation, and because the Administration had not `in- cluded such a proposal in its legislative program, no further action v~as taken. The Subcommittee has had under review a number of older statutes as part of a continuing effort to simplify existing maritime safety laws and procedures wherever it is practicable to `do so. This is part of an ongoing program resulting from extensive oversight hearings on the Coast Guard's marine safety program during the 95th Congress. }LR. 11~Z is part of this program and is consistent with the national effort to simplify bureaucratic procedures and provide for regulatory reform. At the present time, the admeasurement of all commercial vesscls,~ large or;small, requires the physical on-scene measurement of each por- ti9fl and space of a vessel in order to calculate gross and net tonna.ges. The present intricate system of tonnage computation is often referred to. as formal admeasurement and is done in accordance with detailed s~atutory requirements (46 U.S.C. 77, 83-83k), additional regulatory' requirements, complicateçl measurements, and calculations using `into- gral calculus. "ll.~. iI9~ would continue' the requirement `for use of formal ad- measurement for.the larger commercial self-propelled vessels; that is, those that ~rc 24 meters (79 feet) "oi- greater in length. It would,' hO'w~ PAGENO="0133" over, permit the assignment of tonnage to smaller cominsreial vessels-~ those under24 meters and those that are not self-propelled-by usiiig ~eitherformal admeasurement or a. simplified adni~asuremént1?roCedUre similar to that presently applicable to pleasure ves~els. The owner would have the option of choosing which procedure he desired to us~. The simplified procedure is not available to a commercial vessel, re- gardless of size or method of propulsion, if it engages or intends to engage in an international voyage by sea. It must use the formal proce~ dures. This is necessary to insure the continued acceptability by foreigli governments of the United States-issued admeasurement documents. The bill would permit the better utilization of the time and efforts of admeasurers, will reduce the number of persons required to ad- measure the growing number of small commercial vessels, and will per- mit more timely admeasurement of the larger commercial vessels. It is estimated that use of the simplified admeasurement method will per~. mit the tonnage measurement of small commercial vessels in one-eighth the time it presently takes. The bill will also permit the assignment of tonnage measurements to specified models or classes of vessels, thereby avoiding the need for repetitious measurement of each vessel. H.R. 1197 was introduced by Mr. Biaggi on January 22, 1979. A hearing on it (and on H.R. 1196, a related proposal. to revise and in~prove the laws relating to the documentation of vessels) was held on. June 20, 1979. Testimony in support of the bill was received from the Administration and industry. The Subcommittee was not aware of any person or organization that opposed the bill. Subcommittee markup was held on July 24, 1979, with the adoption of four amendments-three of which were technical and conforming and the fourth which added regulatory authority to the bill. The Full Committee ordered the bill, as amended, reported to the House by unanimous voice vote on July 25, 1979. House Report 96- 429 was filed on September 13, 1979. H.R. 1197, as amended, passed the House under suspension of the rules by unanimous voice vote on September 17, 1979. No action w~s taken on the bill by the Senate prior to the end of the First Session of the 96th Congress. H.R. 1198-Lines of Demarcation In order to prevent collisions at sea, the maritime nations of the `world have ovr the years agreed on rules to b~ followed by ships on the high seas. Though the rules themselves have changed from time to time, one aspect of them has not changed. They have always allowe4 fOr the application of local or special rules to the internal waters or territorial sea of a nation while the internationally agreed upon rules apply on the high seas. The use of this authority for two sets of navigational rules of the road created the necessity for the estab- lishment of dividing lines so that mariners would know where the international rules applied and where the local or special rules applied. The Act of February 8, 1895 directed the Secretary of the Treasury to designate and define the lines di~viding the high seas from river~, harbors~ and inland waters. The lines of demarcation authorized under that Act are used today to define the area of applicability of the Inl:and Rules of the Road as PAGENO="0134" 130 opposed to the International Regulations for Preventing Collisions at Sea, 1972. Those lines inform the mariners where to cease using one set of rules of the road and where to begin using another in pro- eeeding to or from the sea. * It has always been clear that the original objective of the 1895 Act was to authorize demarcation lines for the sole purpose of deter- mining the applicability of the different sets of navigation rules. Commencing in 1908, however, Congress began `using the lines of demarcation as a basis for the application of various marine safety vessel inspection and manning statutes. These statutes include the Coastwise Load Line Act (1935)., 46 U.S.C. 88; the Seagoing Motor Vessel Act (1936), 46 U.C.C. 367 ;the Officers' Competency Certificates Act (1939), 46 U.S.C. 224a; various merchant seamen provisions (1915, 1936, 1937, 1941), 46 U.S.C. 672, ~72-1, and 672c; as well as the more recent Bridge-to-Bridge Com- munications Act (1971), 33 U.S.C. 1201. None of these statute's con- cern navigation rules hut deal instead with vessel inspection, equip- ment, and manning standards. During the early part of the 20th Century, and for more than fifty years up to 1953, the Coast Guard and its predecessor agencies estab- lished lines of demarcation that were, with only minor and rare excep- tions, within the territorial sea of the United States. The fact that these lines were placed within the three-mile limit-and usually at the headlands or fairly close to shore-and had remained relatively stable for many years undoubtedly influenced Congress to adopt these lines for the purposes of the marine safety laws listed above. The lines served as a basis for applying different standards to vessels that oper- ated in inland or protected waters from those that operated offshore. Starting in 1953, the Coast Guard relocated the demarcation lines in a number of areas to a position beyond the three-mile territorial sea and well out into waters considered high seas under international law. The addition by Congress of marine safety statutes keyed to the 1895 Act created pressure to move the demarcation lines out further from shore. The seaward location of the line of demarcation in the Gulf of Mexico in 1953 was probably the most notable in that it made the inland rules applicable to vessels operating as much as thirty miles from shore. The dual use Congress had assigned to the lines of demarcation resulted in exempting those same vessel~from numerous marine safety vessel inspection and manning standards. The result of establishing the lines of demarcation beyond the limits of the territorial sea was to create an anomalous situation. Areas that were clearly part of the high seas were nevertheless delineated as part of the inland waters of the United States for the purposes not only of statutes having only domestic application-the marine safety kLws-but for the navigation rules as well. This anomalous situation came to a head in 1977. On July 15th of that year, the International Regulations for Preventing Collisions at Sea, 1979 (COLREGS 1972) entered into force. Unlike previous iterations of the international rules, these regulations had `the status of a treaty and received the advice and consent of the Senate. The Coast Gu~rd* concluded that after this treaty came into force it could PAGENO="0135" 131 no longer legally require vessels to comply with the Inland Rules while oil the high seas or the territorial sea outside of rivers, harbors, and inland waterways. The Coast Guard, therefore, issued regulations, effective the day COLREGS 1972 came into force, relocating the lines of demarcation consistent with that treaty. This relocation moved the lines to within the three-mile territorial sea, except in those rare cases where safety hilzards would be created to do so. This action corrected the long- standing problem of applying the special or local navigation rules to vessels operating well out on the high seas. While the Coast Guard was willing to move the lines of demarcation for navigation purposes shoreward to within the territorial sea, it was not willing similarly to move the lines for the purposes of applicability of the various marine safety statutes. It solved this dilemma by creat- ing two separate sets of lines-one for purposes of applicability of the navigation rules; the other for purposes of applicability of the marine safety statutes. These latter lines were called boundary lines by the Coast Guard. The agency has admitted that it strained its legal authority in taking the action it did and agreed that a legislative clarification would be useful. H.R. 1198 clarifies the law by giving the Coast Guard clear author- ity to establish separate lines of demarcation for the purposes of the navigation rules and for the purposes of the marine safety laws. Sec- ond, it places a limit on how far offshore the lines for marine safety purposes can be placed. And third, it authorizes different lines for the purposes of different marine safety laws. The bill would also insure that the lines for navigation purposes would be established as close inshore as practicable and consistent with safety. The Subcommittee held a hearing on H.R. 1198 on June 5, 1979. Testimony received supported the legislation, and all of those testify- ing also recommended amending the Seagoing Barge Act (33 u.S.C. 395) so that the applicability of that Act would be tied to the line of ~demarcation. The Subcommittee considered the bill in markup session on July 24, 1979, and adopted four amendments-two of which were technical and conforming, one was adopted to conform with a request from the Ad- ministration, and one was adopted to conform with a request from the close offshore barge industry. The Full Committee considered the bill in markup session on July 25, 1979, and reported it to the House by unanimous voice vote. House Re- port 96-427 was filed on September 13, 1979. H.R. 1198, as amended, passed the House under suspension of the rules by unanimous voice vote on September 17, 1979. No action was taken on the bill by the Senate prior to the end of the First Session of the 96th Congress. H.R. 1414 and H.R. 3749-Liquefied Gas Safety and Siting H.R. 1414 would amend the Ports and Waterways Safety Act in order to regulate the safety and siting of liquefied bulk gas facilities; to establish a comprehensive liability and compensation fund for those facilities; and to provide for the licensing of those facilities sited be- PAGENO="0136" 132 yond the limits of the territorial sea that are subject to the jurisdiction of the United States. I-LR. 3749 would regulate the safety, siting, con- struction, and operation of liquefied gas facilities in, or in close prox- imity to, the coastal zone of the United States. For a number of years, the Committee on Merchant Marine and Fisheries has been concerned with the safe transport of liquefied gas in the marine mode, as well as the safe storage and handling of lique- fled gas at waterfront facilities. "Liquefied gas" includes but is not limited to "liquefied natural gas" (LNG). During the 92nd Congress, the Committee held hearings on the Liq- uefied Natural~ Gas Carrier Construction Program that was author- ized under the 1970 amendments to the Merchant Marine Act of 1936. In the 93rd Congress, the Committee held oversight hearings on the safety of LNG tankers, includino the design and construction stand- ards governing the operation of t~Iiese tankers in domestic and foreign tiThie. In addition, the Chairman of the Merchant Marine and Fisheries Committee, John M. Murphy of New York, and the Chairman of the Coast Guard and Navigation Subcommittee, Mario Biaggi of New York, were personally involved with the. investigation of a liquefied natural gas accident that occurred at an LNG storage facility on Staten Island, New York in February 1973, which resulted in the death of forty workers. Investigations of this incident raised significant ques- tions about the adequacy of the Federal regulatory regime governing the siting of liquefied gas facilities in densely populated urban areas within the coastal zone, as well as the safety of the marine routes used by LNG vessels within congest.ed harbors. The adequacy of existing legal and insurance regimes providing liability and compensation coverage of victims suffering damages from an LNG accident is also a subject of great concern. The Office of Technology Assessment (OTA) report of 1977, "Trans- portation of Liquefied Natural Gas", raised equally alarming ques- tions about the safety of LNG. The Comptroller General's office, in a report released July 31, 1978, entitled "Liquefied Energy Gas Safety," reiterated the earlier warnings voiced by OTA. Among the recom- mendations to Congress contained in the report were the following: Mandatory remote siting of new facilities; Denial of expansion and reevaluation of the safety of existing facilities near populated areas; Avoidance of transporting large quantities of liquid gases through populated areas; Consolidation of the authority and responsibility for liquefied gas safety into a single agency; Creation of a liquefied gas liability and compensation fund to supplement third-party insurance coverage applicable to liquefied gas accidents. In response to these significant and frequently voiced concerns over public risk and safety, Mr. Biaggi introduced H.R. 11365, the Liquefied Bulk Gas Marine Transportation Safety Act, for comment in the Second Session of the 95th Congress, followed by the reintroduction of an identical bill, I-I.R. 1414, on January 24, 1979 in the First Session of the 96th Congress. PAGENO="0137" 133 The same concern about LNG's threat to public safety provided the impetus for the introduction of H.R. 3749, the Coastal Area Liquefied Gas Facility Safety Act, by Mr. Murphy on April 25, 1979. ll.R. 1414 was jointly referred to the Committees on Merchant Marine and Fisheries, Interstate and Foreign Commerce, and Public Works and Transportation; while H.R. 3749 was jointly referred to the Committees on Merchant Marine and Fisheries and Interstate and Foreign Commerce. Within the Merchant Marine and Fisheries Com- mittee, the Subcommittee on Coast Guard and Navigation has primary responsibility, along with the Subcommittees on Merchant Marine, and Oceanography, to consider both bills. As introduced, the bills contain important similarities with some differences in approach. In common, both measures: Apply to interstate and intrastate baseload liquefied gas facili- ties (according to H.R. 1414, "liquefied gases" include LNG and LPG, naptha and liquid hydrogen being transported in the marine mode), while H.R. 3749 restricts liquefied gases to LNG and LPG; Establish a coordinated Federal/State regulatory approach that consolidates the responsibility for establishing minimum Federal standards for safety in the siting, design, construction, and opera- tion of liquefied gas facilities within a single agency, the Depart- ment of Transportation; Encourage remote siting for new liquefied gas facilities to be constructed in urban, coastal areas; Recognize State interest in coastal energy matters (H.R. 3749 permits the establishment of higher safety stan4ards by States for the siting, design, construction, and operation of liquefied gas facilities. H.R. 1414 does not preempt higher State safety stand- ards under the existing authority of the Ports and Waterways Safety Act and recognizes, by implication, the right of States in- directly to regulate the siting of liquefied gas facilities under the consistency provisions of the Coastal Zone Management Act of 1972, as amended.); Consolidate Federal licensing requirements into a single pro-. ceeding (H.B. 1414 uses the provisions of the Federal Power Act to regulate onshore facilities and establishes a single Federal licensing regime for offshore facilities that is similar to the Deep- water Port Act. ILR. 3749 requires the Assistant Administrator of NOAA to issue a new license for the construction of a liquefied gas facility in the coastal zone.); Provide for a single Federal license for all new liquefied gas facilities to be located offshore., either in the territorial waters or the high seas subject to U.S. jurisdiction; Require uniform marine traffic management regulations to govern the movement of liquefied gas vessels through confined and congested waters, under the existing authority of the Ports and Waterways Safety Act; Provide for license denial or revocation procedures for industry applications and licenses to construct or operate liquefied gas facilities. In addition, H.R. 1414 imposes strict liability for damages attribut- able to vessels and facilities involved in liquefied gas incidents. Under PAGENO="0138" 134 the bill's provisions, the liability of a vessel or facility owner or op- erator may be limited in certain instances, supplemented by the es- tablishment of a Liquefied Gas Liability and Compensation fund, while unlimited liability may be imposed in situations where gross neg- ligence, willful misconduct, or violation of standards is found. On July 18 and 19, 1979, the Coast Guard, Merchant Marine, and Oceanography Subcommittees held hearings on H.R. 1414 and H.R. 3749. Among those testifying were the Administrator of the Eco- nomic Regulatory Administration (Department of Energy), accom- panied by the General Counsel of the Federal Energy Regulatory Commission; the Chief, Office of Marine Environment and System, United States Coast Guard; the Assistant Administrator for Coastal Zone Management of the National Oceanic and Atmospheric Admin- istration; a member of the National Transportation Safety Board; the President of B.L.A.S.T. (Bring Legal Action to Stop the Tanks) ~ the Vice President of Columbia Gas Corporation, accompanied by a representative of the American Gas Association; the Vice President of the Brooklyn Union Gas Company a representative from the New York Department of Environmental Conservation and the California Public Utilities Commission; the Director of the Harry Lundeberg School of Seamanship, Piney Point, Maryland; the Chairman and Executive Secretary -of the Oceanographic Commission of Wash- ington; the President of the Interstate Natural Gas Association~ accompanied by the Senior Vice President of the El Paso LNG Com- pany; the President of Western LNG Terminal Associates; and the Vice President for Fuel Supply. accompanied by a consulting engi- neer, from the Public Service Electric and Gas Company of New Jersey. In addition, the following individuals submitted testimony for the record: the President of the Shipbuilders COuncil of America; the Vice President of the Seafarers International Union of North Amer- ica; the President of the Transportation Institute; the President of the American Institute of Merchant Shipping: a representative from the Environmental Policy Center; and the Washington representative and Chairman of the LNG Technical Committee of the National Fire Prorn tection Association. These hearings demonstrated: That the lack of a consistent LNG import policy creates uncer- tainties, delays, and increased costs in obtaining project approval for liquefied gas baseload projects, resulting in the cancellation of LNG vessel contracts by U.S. shipyards and a consequent reduc- tion in U.S. maritime employment; the existence of sigiiificant unanswered questions concerning the safety, security, and siting of liquefied gas facilities that are not specifically addressed by existing law or regulation; the need to simplify the regulatory process for liauefied gas facility approvals, including the consolidation of authority and responsibility for implementing a single set of minimum Federal standards governing the design, construction, and operation of liquefied gas facilities within a single agency, the Department of Transportation; the potential utilization of the coastal zone management proc- ess as a means to coordinate Federal interagency project review PAGENO="0139" 135 and issuance of necessary licenses and permits covering liquefied gas facility siting and for resolving Federal/State conflicts over the siting of energy facilities in the coastal zone; the advisability of adopting a remote siting strategy for new liquefied gas facilities, including the offshore siting of those facil- ites that are technologically and economically feasible; the need to revise and supplement the existing law of liability and compensation for damages arising out of incidents involving liquefied gas vessels and facilities, by imposing standards of strict liability upon the transportation, storage, and handling of lique- fied gas, and by either imposition of the requirement for filing certificates of financial responsibility to insure adequate compensa- tion of victims suffering damage from liquefied gas incidents or by the establishment of a Liquefied Gas Liability and Compensa~- tion Fund to accomplish the same purpose. While the hearings revealed a predictably wide divergence of opinion concerning liquefied gas safety and siting issues, the necessity for subsequent Committee legislative action improving upon the status quo was firmly established. However, while the Committee was considering these issues and the bills pending before it, both the House and Senate were considering independent legislation supple- menting existing law in the field of liquefied gas facility safety. The Committee, therefore, elected to defer further hearings or considera- tion of pending legislation until the House and Senate had sufficient time to act on these other measures. The Committee determined to wait until the Second Session of the 96th Congress to reassess the need for, and scope and content of additional legislation on this subject, includ- ing the possible modification and merger of the respective measures pending before it. H.R. P4395-Coast Guard Authorization H.R. 2295 is the annual authorization bill for the Coast Guard. It authorizes for fiscal year 1980 funds for the operation and maintenance of the Coast Guard; for acquisition, construction, and improvement of vessels, aircraft, and facilities; for the alteration or removal of ob- structive bridges; and for research, development, test, and evaluation.. It authorizes military personnel ceilings and necessary average stu- dent training loads and increases the ceiling on the number of com- missioned officers in the Coast Guard from 5,000 to 6,000. It also pro- vides for back pay and the raising of the statutory pay ceiling for the Coast Guard's only remaining full-time civilian lighthouse keeper. The Coast Guard operates as a part of the Department of Transpor- tation, with primary responsibility for the enforcement, or assist- ance in enforcement, of all applicable Federal laws on and under the high seas and waters subject to the jurisdiction of the United States; the promotion of safety of life and property in those areas; the main- tenance of aids to maritime navigation; icebreaking; and oceano- graphic research. The Coast Guard, as a military service and a branch of the Armed Forces, maintains a readiness to operate as a service in the Navy u.pon the declaration of war or when the President directs. In addition, individual units operate with the Navy in time of national emergency. The Coast Guard is one of the oldest Federal agencies. It had its inception in 1'T90 as the Revenue Marine, established to enforce the PAGENO="0140" 136 Customs laws and facilitate maritime commerce. Today, the enforce- ment of laws and treaties is still one of the Service's largest operational programs, and the facilitation of waterborne activity remains a pm- mary objective Throughout its history the growth of the Coast Guard has reflected the growth and maturity of the United States as missions and objectives have been added and broadened The Commandant of the Coast Guard testified that his Service is as lean as it can possibly be and is stretched to the limit The Subcom mittee concurred with this evaluation and concluded that a service that isstretched to the limit is not a safe service. A service that is as lean as it can be has no margin for error and must of necessity shortchang~ training and maintenance in favor of meeting operational demands In its action on this bill, the Subcommittee considered the implica tions of the collision and sinking of the Coast Guard cutter Cuya- Itoga last October The Subcommittee held hearings on that mci- dent and had the benefit of investigations concerning it by the Coast Guard, the National Transportation Safety Board, and the Depart- ment of Transportation. This tragedy highlighted the deficiencies in training, vessel maintenance, and personnel from which the Coast Guard suffers The conclusion is inescapable that the sinking of the Cuyalmoga and the resultant loss of life were caused, at least in part, by shortages in funding and personnel These deficiencies in training, maintenance of vessels, and personnel are reflected in other places throughout the Coast Guard The Subcom mittee concluded that additions to the budget of funds and personnel were essential to correct these deficiencies Therefore, a major part of the resources added to the bill are to increase the Coast Guard's train- ing and maintenance capabilities, and thus to enhance the safety of the Service itself and its ability to perform its duties. The Subcommittee found that the same low funding levels that have caused personnel and training problems in the Coast Guard are also reflected in the overall materiel condition of its floating units It is appirent that the Service does not have sufficient funds or person- nel to maintain its fleet properly The result is a lessening of the safety of Coast Guard vessels and their ability to perform their missions This, in turn, makes them less desirable from a personnel standpoint The Subcommittee, therefore, provided additional funding and per- sonnel for increased engineering and maintenance In addition to authorizing vessel procurement, the bill provides for the completion of the `muthorization for procurement of 41 fixed wing, medium range surveillance (MRS) aircraft The contract with Falcon Tet for these aircraft designated HU-25A, had an expected date of first delivery during August of this year However, the date has now been moved to April 1980 due to engine delivery problems The flU- 2~A, powered by two fan jet engines will have an all weather capa bility high dash speeds, and low altitude search capabilities with a high degree of navigational accuricy It will have a rescue equipment dron capability and will be provided with highly sophisticated sensor ecmipment The contract for the short range recovery (SRR) helicopter is to be awmrded during June 1979, with an expected date of first delivery in early 1981 The committee provided authorization for funding of 32 PAGENO="0141" 137 helicopters, out of a total program of 90, thereby requiring future funding for 58 helicopters. The new helicopter will replace the exist- ing inventory of the aging 1-111-52k helicopter and, while retaining all the present capabilities of the }111-52A, will be a safer and more capable aircraft due to its twin-engine installations, radar, and auto- matic flight control system. Another issue considered by the Subcommittee was the backlog na construction projects at shore stations that require acquisition, con- struction, and improvement funding. Whih~ attention is often centered on large, major shore construction projects, there remains a need to provide funds for the smaller and minor shore units. The Subcom- mittee added funds to complete a number of needed selected smaller projects. For comparative purposes, the Congress appropriated for fiscal year 1979 $1,286,835,000; and, for 1980, the President's budget request amounted to $1,358,261,000, an increase of approximately five arid, a half percent. The bill added $23,332,000-for a total increase to $1,- 381,593,000, which is approximately 1.7 percent above the Adminis- tration's budget request. In the authorization for Coast Gu~ird operating expenses which, simply stated, supports the Coast Guard's day-to-day operations, the bill increased the Administration's request of $1,037,175,000 to $1,048,- 357,000-a difference of $11,182,000 or 1.1 percent. In the authorization for acquisition, construction, and improvemelit of vessels, aircraft, shore units, and aids to navigation, the bill ii~i- `creased the Administration's request of $~84,361,000 to $292,811,'OOO,.a `difference of $8,450,000 or 2.9 percent. In the authorization for alteration or removal of bridge~, the Sub- committee endors~d the Administration's request for $14,900,000 to remain ayailable until expended, noting that no additional bridges9e at a stage in their planning cycle to require funding during fiscal year 1980. In the authorization for research, development, test, and evalnation, the bill increased the Administration's request of $21,825,000 to `$2~,- 525,000-an increase of $3,700,000 or 16.9 percent. KR. 2295 was introduced by Mr. Biaggi on February 21, 1979, basedön estimated requirements due to failure of the Administration to submit a timely proposal for legislation to authorize fiscal year 1980 appropriations. `The Administration transmitted Executive Commu- nication No. 759 on February 28, 1979, the same day the hearing was held on KR. 2295,by the Subcommittee. The- Subcommittee met. in markup session on March ~8, 1979, adopted several amendments by voice vote; and unanimously order~d IJ.R. 2295, as' amended, reported to the Full Committee. * On April 10, 1979, the Full Committee,, after, adopting a number of amendn~ents by ,.voic~ vote, ordered -KR. 2295, as so amended, re~ p~rt~d~to the House by unanimous voice vote. On May 4, 1979, H.R. 2295~ as amended, was reported to the Rouse in House Report N9 96-118's On May 17', 1979, the Senate passed S~ 700, an identical bill `with'the exception that $10 million had been added for increased fuel costs PAGENO="0142" 138 On May 31st, the House passed H.R. 2295, with an amendment adding $10 million to the Committee amendments, under an open rule. The House then considered and passed S. 709, an identical bill to H.R. 2295. On June 13, 1979, the President signed Public Law 96-23, authoriz- ing $1,395,593,000 for fiscal year 1980. Hi?. 1645 and H.!?. 5164-Small Vessel Manning During prior Congresses, the Subcommittee has noted the need to modernize the marine safety laws. Some of these laws were intended to cope with a marine transportation industry centered around the development and expanding use of steam-driven propulsion plants for vessels and the related need to provide for the protection and welfare of passengers. Many of these enactments date from the 1800's and have been amended frequently, the latest significant amendments occurring in the mid-1930's. Since then, there have been considerable technological advances in marine propulsion, equipment, and hull design. There has also been an increasing industrial awareness of the social and labor problems as- sociated with employment of seamen in specialized seagoing trades. Of even greater significance has been the evolution, during the past thirty years, of an offshore mineral and oil support vessel industry from a makeshift, can-do industry into a sophisticated, specialized in- dustry using modern state-of-the-art technology. The result is that today the small commercial vessel industry is subject to a patchwork of archaic, complex, and inconsistent laws that were developed more than a century ago during the era of steam-propelled vessels and are inapplicable or inappropriate for meeting the changing conditions and modç~rn needs of our waterborne commerce. During the 95th Congress, the Subcommittee held a number of over- sight hearings to permit a review and examination of the various Coast Guard marine safety programs and the laws governing them. These comprehensive reviews, while evaluating the implementation, enforcement, and effectiveness of the navigation and vessel safety laws, highlighted a problem with the manning of small commercial ves- sels that carry passengers for hire. H.R. 1645 was jntroduced by Mr. Biaggi on January 31, 1979, to deal with problems involving the manning of vessels carrying passengers for hire that are more, than 65 feet in length and less than 100 gross tons. During the legislative hearings on H.R. 1645, the larger andmore eon~plex issue of inspection and manning of vessels engaged in freight- for-hire and passenger-for-hire operations, particularly those engaged in the .mineral.and oil exploration and exploitation industry, surfuced. Additionally, there was an indicated need to provide the Coast Guard with more flexibility in establishing manning requirements for inland passenger vessels between 100 and 800 gross tons, based on a number of variable considerations. Finally, it became clear that the tangled and confusing require- ments for. able seamen found in various enactments codified at section 67~ of' title 46 of the U.S. Code required correction and clarifi~ation. The able seaman . problem not only affects the smaller cornmer~eial `vessels but also has significant impact on the larger deep sea vessels. Therefore, a broader based bill was introduced to replace and expand upon H.R. 1645. PAGENO="0143" 139 H.R. 5164, introduced on September 5, 1979, would amend certain inspection and manning laws applicable to small vessels carrying passengers or freight for hire. The bill amends sections 223, 224, 390, 404, 672, and 673 of title 46, U.S. Code and repeals a number of re- lated laws. All are concerned with the inspection and manning of vessels, with special emphasis on those provisions of law dealing with small commercial vessels. Hearings were held by the Subcommittee on H.R. 1645 on July 11, 1979 and on H.R. 5164 on September 12th and 18th. The Subcom- mittee reported H.R. 5164, with a comprehensive amendment, to the Full Committee on November 8, 1979. The amended bill requires all offshore supply vessels be inspected by the Coast Guard. This replaces the present statute that requires inspection only if the vessel is carrying freight or passengers for hire. Presently uninspected vessels would be allowed a grace period during which they would be subjected to reduced inspection requirements. The bill gives the. Coast Guard discretion to tailor the inspection of these vessels to the particular requirements and conditions of the off- shore industry. It also provides transitional provisions to facilitate bringing presently uninspected vessels under inspection. With respect to the able seaman problem, the amended bill estah~ lishes an orderly ladder for advancement based on experience levels. It also provides a separate category of able seamen to meet the par- ticular requirements of the offshore oil industry. The bill also raises the statutory floor for the requirement for li- censed engineers and pilots from the present 15 gross tons to 300 gross tons. Between those limits the Coast Guard retains discretion to require those personnel on vessels. No further action was taken on either 11.11. 1645 or ER. 5164 prior to the end of the First Session of the 96th Congress. ILR. 2538-Coast Guard Drug Law Enforce~ment The recent rapid rise in maritime drug smuggling beginning in 1973 reached a plateau in 1978. In that year, the Coast Guard seized or participated in the seizure of 167 vessels, most of them on the high seas; made 867 arrests of both U.S. citizens and foreign nationals; and confiscated 3.5 million pounds of contraband with a street value of $1.3 billion (a sum in excess of the Coast Guard's operating budget for that year). Although Coast Guard seizure statistics con- sist mostly of marijuana, a high-bulk item frequently transported in the marine mode, Drug Enforcement Administration (PEA) intelli- gence estimates report that virtually all types of narcotics and d~in- gerous drugs are illegally imported into the United States on board commercial or pleasure vessels. This dramatic rise in maritime drug smuggling has been facilitated by a loophole in domestic law in which drug-related offenses, corn- mitted on vessels operating beyond U.S.. territorial waters, are not prohibited under United States law. This void was inadvertently created in 1970 when enactment of the Comprehensive Drug Abuse Prevention and Control Act (P.L. 91-191) repealed prior law out- lawing possession of drugs on board United States vessels. Drug traffickers have, become singularly suo~ssful in exploiting this loop- PAGENO="0144" 140 ,hol~. As a result, over 80 percent of the cases involving United States citizens and virtually all cases involving foreign nationals are dis- missed at the preliminary hearing stage. Moreover, aliens arrested for drug trafficking are automatically repatriated or deported to their country of origin at U.S. taxpayer expense. H.R. 2538 was introduced on March 1, 1979 by Mr. Biaggi for him- self and over fifty cosponsors. It would restore statutory penalties for possession as well as the manufacture, distribution, and unlawful im- portation of all controlled substances by persons on board vessels of the United States or vessels subject to the jurisdiction of the TJnited States (defined to include stateless vessels, vessels within 11.5. cus- toms waters, or vessels flying foreign flags with the prior consent of the flag state), or by U.S. citizens on board any vessel. It also pro- hibits the attempt or conspiracy to commit one of the enumerated offenses. In addition, the transfer of a controlled substance to a United States vessel or vessel subject to the jurisdiction of the United States is made a separate offense. Also, the statutory anomaly whereby civil penalties but not criminal sanctions could be applied against vessels in the customs zone is cured. A hearing was held on H.R. 2538 on March 28, 1979. Testifying on behalf of the legislation was a panel representing the House Select Committee on Narcotics Abuse and Control, including its Chairman, the Ranking Minority Member, and an original cosponsor of the leg- islation. Also appearing were the Commandant of the Coast Guard, the U.S. Commissioner of Customs, representatives from the State Department and the Justice Department (DEA), and the Assistant US~ Attorney for the Southern District of Fonda. The witnesses uniformly endorsed the legislation, while suggest- ing certain modifications to the bill as introduced. These included deletion of prior consent as a basis for asserting domestic juris- diction over persons on board foreign flag vessels apprehended for drug smuggling; the incorporation of venue, forfeiture, definitional material, and other procedural matters in the body of the bill, in deference * to its configuration as an independent criminal statute, while at the same time providing definitional cross-references to the Com- * prehensive Act for consistency in application and statutory interpretation; * specific recognition of illicit trafficking in certain controlled substances permitted under the Comprehensive Act; and * the substitution of an alternative nexus of knowledge or spe- cific intent to unlawfully import controlled substances as a statu- tory basis for asserting concurrent jurisdiction over foreign nationals apprenhended on the high seas for smuggling drugs into the United States. Following additional redrafting to accommodate these agency rec- ommendations, the Subcommittee considered the bill in markup ses- ~ion on May 8, 1979 and adopted an amendment in the nature of a su1~stitute. The primary purpose of the amendment was to shift the~ fécus of the bill from simple possession of narcoticsand dangerous dFiigs to possession with the intent to manufacture or distribute them. The operative effect is to target the bill at the drug trafficker-the PAGENO="0145" 141 person who has large quantities of the drug for sale to others, rather than at the person who has oniy a small amount of drugs in his pos- session for personal consumption. As amended, the bill eliminates any possible conflict with interna- tional law by limiting its scope to situations where the United States has clear jurisdiction. Flag state jurisdiction is invoked to assert competence over U.S. vessels, wherever they may be, and over vessels without nationality on the high seas. Any person on board such a vessel, of either U.S. or foreign citizenship, is prohibited from manu- facturing, distributing, or possessing with the intent to manufacture or distribute any controlled substance. This is meant to include all narcotics and dangerous drugs listed in Schedules I through V of the Comprehensive Act (21 U.S.C. 812). An exception is provided for legal carriage of controlled substances for medical or scientific purposes by common or contract carrier. This parallels existing law. An additional exception was provided in the original statute (21 U.S.C. 184) (for medical chest supplies). In its revised format, the bill does not make this carriage unlawful, since it encompasses an unlawful distribution (reference to the term "dis- pensation" has been deleted from the bill). The term "distribution" as defined in the Comprehensive Act does not include drugs that are legally administered or prescribed for medical purposes. Therefore, under the bill carriage of a controlled substance for legitimate med- ical purposes would not be prohibited. Parallel offenses are set forth applicable to U.S. c.itizens on board any vessel anywhere, based upon the jurisdictional principle of citizen- ship or nationality. These same offenses are prohibited in the U.S. cus- toms zone, recognized under international law. Finally, an additional offense of unlawful importation with the element of knowledge or spe~ cific intent is incorporated in the bill to reach extraterritorial acts ~committed by persons on board any vessel susceptible to the assertion of U.S. jurisdiction and arrest while on the high seas. It is intended to reach foreign flag motherships, hovering on the high seas off U.S. coasts, currently operating beyond the assertion of U.S. jurisdiction. The Subcommittee reported the bill, as amended, to the Full Com- mittee on May 8, 1979. The Committee considered the bill in markup session on June 12, 1979 and ordered it reported to the House (House Report Number 96~-323, dated July 10, 1979). * 1I.R. 2538, as t~mended, passed the House under suspension of the rules on July 23, 1979 by unanimous voice vote. No action was taken ~ the bill by the Senate prior to the end ef the First Session of the 96th Congress. H.R.93994-Port Safety Grants The purpose of the bill is to amend the Ports and Waterways Safety Act to authorize the award of matching grants to municipalities and public agencies in the United States to enable those authorities to pro- tect deep-draft commercial ports and land areas adjacent to those p~ts from fires, expleslQns, and other mcideiits iausw~ damagc~ in those ports. H.R. ~2994 represents a similar but significantly revised version of legislation originally introduced in the 94th Congress as H.R. 10529, 56-410-80----iO PAGENO="0146" 142 and reintroduced as H.R. 362 (an identical bill) in the 95th Congress. These earlier bills were the subject of a series of Subcommittee hear- ings on port safety problems in commercial ports which began with field hearings in the Ports of Philadelphia and New Orleans in the p4th Congress and continued in the 95th Congress with hearings con- ducted in the Ports of New York, Los Angeles/Long Beach, and Seattle. The combined oversight and legislative hearings revealed two pro- nounced trends affecting port safety in our major commercial ports: (1) a rapid deterioration of marine fire protection and disaster re- sponse capability; and (2) an eroding fiscal base in related port cities, precluding adequate funding for necessary training and replacement of personnel, modernization or replacement of capital plant and equip- inent, and the failure to undertake comprehensive contingency planning. H.R. 2994 and its predecessor bills constitute a legislative embodi- ment of what has come to be known as the "Seattle Plan," named after a pilot program undertaken in the Port of Seattle to improve port city marine firefighting capability and upgrade disaster planning and response through the provision of fiscal assi~tance to port cities and port authorities in the preparation of comprehensive port-wide contingency plans, training of land-based fire companies to respond to, fires involving vessels and port facilities, and replacement of World War II fireboats with new equipment specially designed to combat fires involving newer, larger classes of vessels and large, expensive new port facilities. H.R. 2994 was introduced on March 15, 1979 by Mr. Biaggi, Mr. Murphy, Mr. Pritchard, and over forty cosponsors. It was jointly referred to the Committees on Merchant Marine and Fisheries and Public Works and Transportation. The bill authorizes the award of Federal matching grants to either municipalities or port authorities, whichever entity has the authority and responsibility for providing port safety services in deep-draft commercial ports. Combined applications by more than one port or city are permitted in recognition of the multiple jurisdiction aspects of many commercial ports. A two-tiered grants system is used with different grant formulas applied to the respective grant categories in the provision of Federal matching funds to encourage all port~ to prepare contingency plans and establish a precondition for the award of implementation grants for the training of personnel and the acQuisition of new equipment and facilities. H.R. 2994 is a limited commitment of interim Federal financial assistance to commercial ports predicated upon the national interest in promoting port development and insuring the continuity of port operations. It recognizes the traditionally limited role iii Federal assistance to port development. However, Federal concern for port safety has developed in the recent past, reflected in Coast Guard in- volvement in the operational aspects of port safety for some years. The five-year program of fiscal assistance encompassed b~ the leg- islation is finite in nature, terminated by a sunset provision at the conclusion of fiscal year 1985. At that time, it is intended that port PAGENO="0147" 143 cities or authorities should be in better position to maintain improved capabilities in marine firefighting and emergency response brought about through this legislation. Recognizing the delicate competitive balance between ports and the historical low rate of return attributable to commercial poi.t opera- tions, the bill directs the Secretary of rfraJIspoitatjoll to prepare a report, coincident with the implementation of the grant program, to surve~y alternative fiscal mechanisms for maintaining port safety services following the termination of Federal financial assistance. The Subcommittee held hearings on I-I.R. 2994 on April 26-27, 1979. Among the witnesses testifying at these hearings were representatives of th.e cities and ports of New York arncl Buffalo. New York: Phila- cleiphia, Pennsylvania; Baltimore, Maryland; Long Beach, Califor- nia; and the Virgin Island.s Port Authority. Also testifying were representatives of the Coast Guard, American Association of Port Au- thorities, and the International Association of Firefighters. In addi- tion, testimony was provided for the record by the cities and ports of New Orleans, Louisiana and Seattle, Washington; the American In- stitute of Merchant Shipping; the Maritime Port Council of Greater New York and New Jersey; the American Waterway Operators; the Port Authority of New York and New Jersey the Puerto T~ico Port Authority; the American Institute of Marine Underwriters: the Amer- ican Insurance Association; amid the Subcommittee on Ports and Ter- minals of the New York State Assembly. The Subcommittee reported 1I.R. 2994, with several amendments, to the Full Committee on May 8, 1979. On May 9th, the Full Committee ordered the bill reported to t~e House: and House Report Number 96-324, Pa.rt 1 was flied July 10, 1979. No further action was taken on the legislation. IL!?. Jp9l0-Recreational Boatki.g Sri fety and Facilities Jnmprovenmen~ Act of 1979 H.R. 4310 was introduced on June 5, 1979 by Mr. Biaggi and several cospomisors, including Mr. Murphy. Chairman of the Full Committee. It was jointly referred to the Committee on Merchant Marine and Fisheries and the Committee on Ways and Means. A redraft of similar legislation. IJ.R. 13911, introduced in the Sec- ond Session of tl.ie 95th Congress, I{.R. 4310, as introduced, suhst.itmktes a dedicated fund for the grants-to-States provisions of the orighud Federal Boat Safety Act of 1971, repealing those sections either di- rectly or by implication. It creates a $30 million revolving funcL super- imposed upon the Highway Trust. Fund administered by the Secretary * of the Treasury. It diverts up to $30 million ammaily, dependent upon estimated receipts from tlwJTi~hwav Trust Fund. to a new Recrea- tional Boating Safety and Facilities Improvement Fund to be aclmin- istered by the Secretary of Transportation. Any additional mnarine fuels tax proceeds will be transferred to the Land and Wat.er Conser- vation Fund, admmmstered by the Secretary of Interior, as under ex- isting law. The bill authorizes the allocation arid distribution of $10 mu.ilii~n. annually in FNTPFa1 matching funds for State boating safety and $20 million for facilities development programs. A ceiling of 50 percent is PAGENO="0148" 144 irnl)osecl 111)011 tJie overall Federal share of the cost of imp1em~11ting. colllI)1eheflSive State boating ~rogi~t11~s. rflle authorization for a~)pFO- P1~iTti011S for the Fiu~i is for three years beginning in fiscal year 1981,. subject to annual appropriations acts. In order to establish eligibility for Federa.1 matching funds, a State must submit a coiiiprehensive recreational l)Oat.ing safety and faci].ities iinI)rOve.meiit progia.in for approval by the Secretary of Transportation. Required elements to be contained in each State's submitted plan include boating safety ed- ucation, assistance, and cii forcement activities and the development of a State-wide boatmg facilities development. I)iail. Allocation and distnbi.i~.~on of Federal matching funds from the Fund among the. ehigil)ie States are. ln accordance. with formulas set forth in the Act, based upon the. formulas utilized in the predecessor grants-to-States program. These formulas provide antomatic entitle- ment of a. share of the available Federal funds for all St.ates with approved State. boating ~)rograms. Au additional share of Federal funds would be allocated and dist.J.1i)uted in the I)rOpolt.ion that the total of numbered boats under the Act in each State bears to the total* numbered ve.ssels in all eligible States. Finally, the remaining Federal funds would be allocated to reflect tfr willingness of individual States to undertake. additiona.i efforts to en1~ance recreational boating safety or develop additional boating facil- ities as evidenced by the amount of State. fund.s obligated or e.X1)aflded ih those States in proportion to the efforts of all other eligible States. The Subcommittee on Coast. Guard amid Navigation held hearings on the l.i11 on July 17, 1979. With time exception of the Administration's spokesman, all witnesses strongly endorsed the legislation. In addition, testimony was received for the. record Suppo.rtmg the. legislation from the Governors of the States of Alabama, Missouri, Michigan. amid Ore- gon; National Association of State Parks and Recreation Directors: the National Boating Safety Advisory Committee; and the Oregon 1~'1aririe Board. Memorials were also received from the Virginia I-louse of Delegates and the. California. State. Legislature. as well as a. net.it.ion from the Pennsylvania Fish Commission, urging passage of }LR. 4310. Following t.his legislative hearing, the Subcommittee. conducted a field. hearing in Rochester, New York on August 29, 1979, to receive the comments o.f local boating organizations, marine trade associations, and representatives of the general public. The Subcommittee considered H.R. 4310 in markup session on Sep. t~ember 18, 1979, and adopted three a~nendinents modifying t.he formula ~ allocating facilities moneys from the Fund amon~ eligible States,. reducing the mnulti-yeiar authorization for approp.ri~tions from thern Fund from four years to three, and directing the Secretary of the Tre.as- urv to report current marine fuels t.a.x receipts by State. rrhe first amendment conformed the legislat.ion in all respects to the formulas utilized in t.he predecessor ~rants-to-St.a.tes program. pro- v~drng incentives to those States willing to undertake additional efforts in boating facilities development. The ot.her amendments meflected the fact,i that the Secretary of the Treasury has fiever con- ducted an~ independent estimate of the amount of marine fuels tax revenue received by the Federal government from each State. Col- ]ectively the~ amendments provide an earlier opportunity to under- PAGENO="0149" 145 iake oversight of the Act's implementation foiio*ing receipt of the Secretary's report. Additional amendments, designed to encourage consistency and avoid redundancy with other Federal recreation-related programs in the implementation of the facilities development portion of the Act, were adopted. Under one, the Coast Guard would be required to con- suit with the Department of Interior in the development of guide- lines to implement the facilities portion of the legislation. Likewise, the official in each State charged with implementing those provisions would be required to consult with State counterparts responsible for implementing State-wide comprehensive outdoor recreation plans and coastal zone management plans respectively. Another amendment would bar a State from utilizing its share of matching funds under the Act as its share of matching funds under any other program. Conversely, a State would also be prohibited from utilizing Federal funds received from other sources as a por- tion of that State's share of Federal matching funds required under the Act. Following adoption of these amendments, the Subcommittee re- ported the bill, as amended, to the Full Committee on September 18, 1979. On September 19th, the Full Committee reported the bill to the House. Subsequent to the Committee consideration of the bill, the Com- mittee on Ways and Means considered the bill in markup and or- dered it reported with a technical amendment, segregating certain provisions of the bill into a new title II. Those sections dealt with the establishment of a recreational boating fund in the Treasury, the transfer of marine fuels tax receipts into the Fund, and the require- inent for a study of estimated marine fuels tax receipts to be con- ducted by the Secretary of the Treasury. The Full Committee, therefore, was recalled on October 31st in order to consider a technical and conforming amendment to the bill as originally reported by the Committee, in order to incorporate the amendment adopted by the Committee on Ways and Means. Follow- ing its reconsideration, the bill was reported to the House, as amended. House Report Number 96-591, dated November 7, 1979 applies to Part 1 to the Merchant Marine Committee and Part 2 to the Com- mittee on Ways and Means. H.R. 4310 passed the House under suspension of the rules on De- cember 3, 1979. No action was taken on the bill by the Senate prior to the end of the First Session of the 96th Congress. .H.R. 5577-IXTOC I Oil PoZiution Compensation Act of 1979 H.R. 5577 would authorize the Secretary of Transportation to prod vide compensation for economic loss resulting from oil pollution caused by the blowout of IXTOC I, Bay of Campeche, Mexico, on June 8, This measure was introduced by Mr. Wyatt and others on Octo- ber 12, 1979, in response to the world's largest oil spill, caused by the blowout of the IXTOC I oil well located approximately forty `miles ~off the Yucatan Peninsula in the Bay of Campeche. It was jointly "referred to the Committees on Merchant Marine and Fisheries auci :Public Works and Transportation. PAGENO="0150" 146 Following the spill, the Committee on Merchant Marine and Fish- eries and the Subcommittee on Water Resources of the Committee on Pithlic Works and Transportation conducted joint oversight hearings in Corpus Christi, Texas, in order to assess the overall impact of the IXTOC I spill and the resulting oil pollution of the Texas coast and offshore waters of the Gulf of Mexico. These hearings suggested the need for consideration of interim compensation legislation as an alter- native to litigation of oil spill liability and compensation issues arising out of the incident. Suits now pending include as a party defendant, PETROLEOS MEXICANOS (PEMEX), the Mexican government- controlled monopoly, thereby posing potential adverse impacts upon U.S./Mexican bilateral relations if these suits proceed to term. Specifically, H.R. 5577 authorizes the Secretary of Transportation to establish an interim compensation regime applicable only to the' IXTOC I oil spill to compensate any U.S. claimant for any economic loss recognized under the Outer Continental Shelf Lands Act Amend- ments of 1978 (OCSLAA) arising out of or directly resulting from the IXTOC I spill. The bill authorizes $80 million to be appropriated' for this purpose. The administrative framework for adjudicatin.g and compensating claims follows existing standards, regulations, and pro- cedures applicable to the Offshore Oil Spill Pollution Fund estab- lished by title III of the OCSLAA. A six-year statute of limitations applies to claims presented under this statutory remedy. The Secre- tary is further subrogated to all rights, claims, and causes of action of any claimant compensated for economic loss under this statutory regime. The bill also authorizes the award of an additional one-time' grant of $6 million to the State of Texas for the establishment of a fishery restoration program to mitigate loss of natural resources occa- sioned by the IXTOC I spill. A joint hearing was conducted by the combined Subcommittees on Coast Guard and Navigation and Fisheries and Wildlife conservation and the Environment concerning the legislation on December 6, 1979. Among the witnesses testifying at that hearing were the Honorable' Bob Eckhardt, U.S. Representative from the Eighth C~ngressional District of Texas; the Honorable A. R. ("Babe") Scthwartz, Texas State Senator; the State Coordinator for the Governor's Division of Disaster Emergency Services, representi'ng the Governor of Texas, ac- companied by a representative of the' Texas Department of Water Re- sources the Chief of the Environmental Protection Division of the Office o'f the Attorney General for the State of Texas, representing thefl Attorney General; a panel comprised of local officials and private citi- zens from the communities of South Padre Island and Port Isabel, Texas; the Chief of the Office of Marine Environment and Systems, U.S. Coast Guard; the Deputy Administrator of the National Oceanic and Atmospheric Administration; the Assistant Legal Advisor for Oceans. Environment, and Scientific Affairs, Department of State; and the Lep'isiative Counsel for the National Shrimp Congress. Testimony received was evenly divided, with State and local wit- nesses supporting interim compensation legislation as a timely and efFective mechanism to compensate oil pollution victims pendmg inter- national settlement of claims against the Republic of Mexico. In turn, the Federal agency representatives advised against enactment of PAGENO="0151" 147 "piecemeal legislation", applicable only to the IXTOC I incident, in favor of comprehensive liability and compensation legislation (such as H.R. 85, reported by the Merchant Marine and Fisheries Committee earlier in the Session). On the damage issue, the Subcommittees received testimony docu- menting economic losses incurred to date by the tourist and commercial fishing industries in the Gulf of Mexico. In addition, the witnesses uniformly recommended the undertaking of a systematic damage as~ sessment and monitoring program in order to assess the long-term economic and environmental consequences of the spill. In view of the limited period of time remaining before adjournment, no further action was taken concerning the legislation during th~ First Session of the 96th Congress. OVERSIGhT ACTIVITIES Coast Guard Drug Law Enforcement The Subcommittee continued its four-year inquiry into the effective- ness of Coast Guard drug law enforcement efforts centered in the Seventh Coast Guard District, in which 70 percent of Coast Guard: drug seizures are made. The District encompasses the southern Atlan- tic coast of the United States, Caribbean Sea, and portions of the east- ern Gulf of Mexico. The Subcommittee combined a field hearing and visits to Seventh Coast Guard District bases and units during July 1979. The Subcommittee heard briefings on the current conduct of the Coast Guard's drug interdiction campaign. These provided an oppor- tunity to review the effectiveness of the Coast Guard's drug interdic- tion strategy and accomplishments, and to assess the adequacy of Coast Guard resources devoted to maritime drug interdiction, especially in the maritime chokepoints of the Yucatan Channel, Straits of Florida, Windward and Mona Passages. The Subcommittee visited Coast Guard bases and units, including Coast Guard Air Station Opa Locka, Florida; Base Miami; U.S. Coast Guard cutter Dauntless; Coast Guard Group Key West; and units of Coast Guard Group Puerto~ Rico in Saint Thomas and Saint Croix, U.S. Virgin Islands, at the' request of the Delegate from the Virgin Islands, the Honorable Melvin' Evans, a Member of the Subcommittee. The Subcommittee utilized a recently released Comptroller Gen- eral's report prepared at Subcommittee request, entitled: "The Coast Guard's Role in Drug Interception: How Much Is Enough V', released: February 12, 1979, as a basis for determining the adequacy of Coast Guard resources committed to maritime drug interdiction. That report concluded that the Coast Guard was presently devoting all available' resources to this effort, and that additional resources would be neces-~ sary to expand the present level of drug interdiction activities. On July 3, 1979, the Subcommittee held a field hearing in Key West, Florida, an appropriate site lying astride one of the principal drug' trafficking routes from South America to the United States and pro- viding a safe haven for smuggling operations along miles of unpro- tected coastline abutting the Straits of Florida. Among the witnesses~ testifying at the hearing were the Coast Guard Seventh District Corn-' PAGENO="0152" 148 mander, th~ Southeastern Regional Director of the Drug Enforcement Administration, the U.S. Customs Service Supervisor and Patrol Officer in Key West, and the Sheriffs of Broward and Monroe Coun- ties in Florida. The hearing served to update the Subcommittee on current trends and projections in maritime drug smuggling such as the shift to larger vessels and longer smuggling routes to the U.S., eastward of Puerto Rico; the impact of improved interagency coordination and coopera- tion in drug interdiction; improved intelligence collection and dis- semination; and the conduct of "sting" type operations directed at the neutralization of entire smuggling networks. The latter include the confiscation of vehicles and equipment used to facilitate drug smug- gling, in addition to the arrest and prosecution of drug traffickers. These interagency joint operations, such as the Black Tuna operation, now utilize the Racketeering-Influenced Corrupt Organization (RICO) and continuing criminal enterprise statutes (21 U.S.C. 848) to target Class I drug violators and their vertically integrated smug- gling organizations. An additional purpose of the Subcommittee's hearing was to provide special recognition of significant efforts undertaken by State and local law enforcement officials to improve the coordination of maritime drug interdiction operations within the area encompassed by the Seventh `Coast Guard District. Among those accomplishments recognized was the establishment of a mini-EPIC (El Paso Intelligence Center) by the Broward County Sheriff's Office, designed to coordinate the drug `interdiction activities of all Federal, State, and local law enforcement agencies in that key southeastern Florida coastal area. The hearing also served to recognize the significant contraband seizure record of a recently established Customs Enforcement Office in Key West. At the time of the hearing, this office was statistically the number one drug interdiction unit in the entire U.S. Customs Service for the first six `months of 1979. Following the hearing, the Subcommittee conducted field visits to satellite units of Coast Guard Group Puerto Rico, located in Saint Thomas and Saint Croix, holding an extensive dialogue with the local officials and citizens on the need for additional Coast Guard resources in that area. Based upon those discussions and in light of its investiga- tions, the Subcommittee determined to investigate further the need to, augment the Coast Guard's presence in that vicinity. The Subcom- mittee recogmzed that the provision of additional resources, however, would have to take into account overall Coast Guard responsibilities and requirements within the Seventh District and throughout the `Service. Coast Guard Ice breakers The Subcommittee held an oversight hearing on June 28, 1979 on the Coast Guard's icebreaker replacement program. The hearing was intended to focus on the engineering problems of the Polar class ice- breakers and on the program to insure adequate icebreaking capability on the Great Lakes. The Subcommittee heard testimony from the Coast Guard, the Lake Carriers Association, and from a marine con- :sultant in the field of ice navigation. Additionally, brief testimony PAGENO="0153" 149 was received from a representative of Wartsila Helsinki Shipyard of Finland. Within the past several years, the Coast Guard has constructed. two Polar class icebreakers. These vessels were designed for duty in the Arctic and Antarctic to replace the Wind class icebreakers. Th~ Coast Guard's experience in developing the Polar icebreakers are~ relevant to the development of a new icebreaker for service on the Great Lakes. On August 1965, the Coast Guard established an icebreaker design' program starting with feasibility and conceptual studies, followed by preliminary and final design phases. These initial efforts culminated in February 1971 with the preparation of contract drawing specifica- tions for a new Polar class icebreaker. On August 7, 1971, the Coast Guard awarded a firm fixed-price contract to Lockheed Shipbuildrng'~ and Construction Company (LSCC) in the amount of $52.7 million to construct the Polar Star (WAGB-10). The two Polar class ice- breakers required $2.5 million for the design phases in 1967 and 1968, and appropriations during 1971 and 1973 totalling $125 million. The actual contract price, including all modifications, has been set at almost $102.7 million. The Polar Star was launched on November 10, 1~73 and delivered on December 31, 1975-372 days late. The Polar Sea was~ delivered on January 19, 1977-369 days late. It has been generally agreed for some years that to meet the reason- able demands of commerce, the existing Coast Guard icebreaking force on the Great Lakes would have to be increased. At the time of the hear- ing, those resources consisted primarily of the Coast Guard icebreaker Mackinaw and the temporarily deployed Westwind plus a number of 110-foot icebreaking tugs. In the First Session of the 95th Congress, appropriations were authorized for the design and construction `of a replacement icebreaker for the Great Lakes, as well as for a new class of 140-foot harbor tug boats with increased icebreaking capability. An amount of $20 million was actually appropriated in the Second Sup- plemental Appropriations Act, 1978, toward acquisition of an ice- breaker to replace the Westwind. The conference report on this bill recommended that the r~placement vessel should be designed so that its primary mission would be icebreaking on the Great Lakes, but that it should also have dual-draft capability to permit icebreaking in other regions during the time of `the year it was not needed on the Great Lakes. This dual-drift/dual-use concept is one of the items the Sub- committee wanted to explore further. The Subcommittee also was interested in knowing whether the ex- tensive contractual problems, long delays in delivery, inadequate de- sign standards that resulted in poor vessel performance, extensive engineering prohiems that caused mission cancellations and extended shipyard time for expensive repairs and redesign work encountered with the Polar' class would plague the Wind class `dual-draft replace- ment icebreaker program. Some of the subsidiary questions the Subcommittee had were wheth- er the Coast Guard should build an icebreaker dedicated to Great Lakes service or one that is capable of service both on the Lakes and in the podar regionsr-and whether, in order to reduce procurement time and cost, the Coast Guard `should design its own icebreaker or try to~ buy one off the ~he1f. PAGENO="0154" 150 The Vice Co~nmandant~of the Coast Guard was the firstwitness. On the issue of the engineering problems encountered by the Polar class,~ he stated that those problems were not caused by any deficiencies in Coast Guard `design work. He pointed out that the two Polar class ice- breakers incorporated significant advances in marine engineering tech- nology and that successful implementation of such advances often requires redesign. In the case of the Polar Star, the Coast Guard de- signed the world's most powerful conventional icebreaker, with a revo- lutionary and highly efficient bow fGrm and an advanced propulsion system. It is in this propulsion system that serious problems were being en- countered. The Coast Guard reported that these problems are being resolved, however. For example, the Polar Sea just completed a sue- cessful three-month Arctic deployment during which it encountered ice conditions three- to eight-feet thick, with a ten-inch snow cover. The Polar Star, on her first trip to the Antarctic, broke out the channel to McMurdo Sound in about forty hours, a job that normally takes about ~two weeks. The problems of the Polar class are being overcome, al- though the process is obviously time-consuming and expensive. The Subcommittee estimates that the various costs to correct the problems will exceed $3.8 million. The Coast Guard witness stated that the newest addition to the Coast fluard fleet is the 140-foot icebreakirig tug, designed by the Coast ~Guard and built in a U.S. shipyard. The first one was put in service ~durmg the winter of 1978-79 and has performed excellently. On the question of a replacement icebreaker for the Great Lakes, the Coast Guard testified that it completed the conceptual design phase during mid-1978 and a preliminary design phase for dual-draft ice- breaker during December 1978. It is expected that the contract desi.gn and specification preparation phase should be completed by December 1980, that the Coast Guard should be ready to invite bids by Decem- her 31, 1980, that the contract for construction should be awarded during June 1981, and delivery can be expected in January 1985. Thus far, the design is on schedule and the cost reduction areas have been identified and incorporated. The Coast Guard indicated that it could meet the delivery date, although it felt that the vessel would not be needed until 1986. During 1978, the Comptroller General (GAO) analyzed various alternatives to expedite procurement and evaluated the estimated costs ~to procure a replacement icebreaker. Their letter report of December 1, 1978 (CED-79-16 (08405)) indicated that they could not identify any alternative method of procurement that would be likely to reduce the time required to award a construction contract. They further indi- cated that the cost estimate developed by the Coast Guard during the initial planning phase was acceptable. The Coast Guard witness argued for the dual-mission concept by stating that, since the icebreaker is only needed in the Great Lakes for three or four months each year, it would be a waste of resources to design an icebreaker that could only serve on the Great Lakes. The 1Coast Guard favors a dual-draft icebreaker that can augment the existing dedicated Great Lakes icebreaker, the Mackinaw, during the -winter navigation season and that could then be used for Polar opera- ~tions. PAGENO="0155" 151 The proposed design for the re-placement icebreaker envisions a con- -ventionaily powered `ship with an overall length of 296 feet, a beam of ~64 feet, and a diesel electric propulsion plaiit of about 13~500 horse- power. The ship should be capable ~f continuously breaking three feet of ice. The design will -accommodate 150 personnel, with an endurance of fuel and supplies for 50 days. It will carry a helicopter and facilities for scientific research. One of the issues that was reviewed during prior Authorization hearings was the possibility of purchasing an off-the-shelf icebreaker in order to speed up the -delivery date of an icebreaker to assist- the Jiackinaw on the Great Lakes. In response to questions, the witness stated that none of the proposed alternative icebreakers would meet `the Coast Guard's design requirements. The Coast Guard evaluated -the Canadian "R" class and the Finnish T]i~ho and Ale icebreakers. `It feels that each of these would require major redesign to meet Coast Guard requirements. The witness further stated that none of the for- ~eign designs the Coast Guard evaluated had the two-compartment safety standard which the C-oast Guard desires. The -Coast Guard's studies indicate that, in comparison to the Coast `Guard-designed dual-draft icebreaker, the Canadian "R" class is `longer, heavier, and slightly less capable of continuous icebreaking; the Uhro is much longer, beamier, taller, and far shorter on fuel endurance than is acceptable; and the Ale is smaller, less capable of continu- ous icebreaking, and has shorter fuel endurance. All ha-ye in- -sufficient accommodations for crew-size requirements. All rely on non- TJ.S.-furnishecl equipment which could bring long-term support prob- lems. However, the studies pointed out that any of the foreign manu- facturers could bid on the construction of the replacement icebreaker and that their proposals could be considered in any award determina- iions. The Subcommittee heard next from Captain Frederick Goettel, a re- tired Coast Guard officer, who is now a marine consultant. In his opinion, the Coast Guard is making a mistake by planning a -dual- `draft/dual-mission icebreaker since that will preclude use of bow propellers and will result in a large crew, special boats, a heavy heli- --copter, extensive communications equipment, and other extras that are not needed for service on the Lakes. The vessel would also be re- quired to operate at less than optimum draft on the Lakes. The wit- -ness pointed to the extensive experience of the Wartsila Helsinki Ship- yard of Finland and stated that there would be great economies of time and money in using that source for an icebreaker for the United States. ~While the witness clearly recommended a single-mission vessel, he concluded that a dual-design ship could do an acceptable job provided "it had as wide a beam as possible. The Subcommittee also heard from Vice Admiral Paul Trimbie, a re- tired Coast Guard officer, President, Great Lakes Carriers Association. His Association believes that there is an immediate need for additional icebreaking services on the Great Lakes and that the Coast Guard should procure a replacement icebreaker as soon as possible. He pointed --out that the nation's expanding raw material needs can only be met with the addition of a `second large icebreaker. This east winter, cam- `-merce to certain ports in Lake Erie was terminated before the end of PAGENO="0156" 152 January. A modern icebreaker would have permitted navigation long- er into the winter. That winter also demonstrated the critical need for more icebreaking to support the steel industry and utilities and in- dustry consumers of oil, and these needs will increase during the 1980's. The witness concurred with previous testimony as to the advantages~ of a bow propeller and as to the possibility of getting a ship faster i.f some other method of procurement were followed other than Coast. Guard design and construction. Along t.his line, the Subcommittee heard brief testimony from a representative of the Wartsila Shipyard.. to the effect that the shipyard could construct a vessel to meet Coast Guard specifications in two and a half to three years, for a cost of $60 million. This compares to the Coast Guard-estimated price of $91 million. The Subcommittee was concerned about the extensive time it is taking to settle certain contract claims arising out of the construction. of the Polar class icebreakers. At the present time, there are two major c]aims under litigation before. the Department, of Transportation's Contract Appeals Board (DOTCAB). It noted that one claim for almost $15 million has been before DOTCAB since mid-1975. Another claim for about $2 million has similarly been pei~ding decision for several years. In response to a Subcommittee. inquiry, the Depart- ment referred to the large size and complexity of those claims and said it expected them t.o be decided in the early fall of 1979. The major claim has since been decided. Lo$s of the Coast Guard Gutter "Guyahoqa" The Subcommittee met on March 6, 1979 to review the loss of the Coast Guard cutter Guyalioga. The facts of the incident were as follows. On October 20, 1978, the Coast Guard cutter Cuyahoga was un clerway northbound in Chesa- peake Bay near the mouth of the Potomac River.. The Ouya.hoga, which was based at the Reserve Training Center, Yorktown, Virginia, was on a weekend training cruise. She had on board 13 crew members and 16 officer candidate trainees. Shortly before 9 p.m., the Guyalioga sighted a. vessel ahead of her that was later identified as the Argentmean coal carrier Sau ta Crv~ II. The Santa Gru~ was sout.hboimcl on an almost reciprocal course t.o t.he (Juyalwga. When the two vessels were about a. mile apart, the Cvya- hoga changed course 35° to the. left., putting her on a collision course with the Santa Grv.~. Shortly thereafter, as collision became imminent,. bot.h vessels sounded whistle signals and took evasive n.etioris. The vessels nevertheless collided. The Sa~f a Cru,~ struck the Uui,alwqa on her starboard side, opening a large gash and puishmg her over onto her port side. The Cu~/ahoga sank almost immediately. Eleven men on the Guyahoga were killed in the accident. There. were no casualties on the Santa Gru~ II. Shortly after the loss of the. Guyalwga. it became apparent that several issues were raised by the accident. that. were within the Sub- committee's jurisdiction. Chief among these issues were the questions oft.he general safety of Coast Guard t.rahiing vessels. the maintenance of Coast. Guard vessels, their manning, and the training Procedures' `of the Coast Guard. To investigate these a.n d other issue.s, the Sub- PAGENO="0157" 153 committee held a hearing on March 6, 1979, reèeiving testimony from officials of the Coast Guard and the National Transportation Safety Board. The Subcommittee also had available the reports of the joint Coast Guard-National Transportation Safety Board investigation and the report of an investigation into the safety of afloat training in the Coast Guard which was ordered by the Secretary of Transportation. It was generally agreed that the primary fault for the collision rested with the Cuyahoga as a result of her left turn into the path ofthe oncoming Santa Crw~. This, of course, raised the question of why the Cuyahoga made such a maneuver, which was contrary to the rules of * the road. The answer, oversimplified, seems to be that the commanding officer of the Uuyahoga was concentrating on instructing officer train- ees in the navigation of the vessel, with especial reference to the planned upcoming turn into the Potomac River. Second, the command- ing officer of the Cuyahoga had already formed the opinion that the Santa Uruz was also heading up into the Potomac. The combination of this erroneous opinion and his preoccupation with the instruction of trainees led the commanding officer to make his previously planned course change on schedule. It was apparent from the investigations and the hearing that little fault for the accident could be placed on other members of the crew of the Cuyahoga. They properly performed their duties and correctly executed the orders they received. `It is clear though that, if the ve~se1 had been more fully manned and had more experienced personnel aboard, the result might have been different. One result of the minimum manning of the Cnyahoga was that the commanding officer apparently felt forced to perform the dual func- tiQns of navigating the vessel and acting as instructor to the tra~ji~ees. ~Thus, at the time of the collision, he was in charge of the navigation of the vessel and was also instructing trainees. It is one of the first rules * of safety at sea that the watch officer of a vessel underway should devote Ms full attention to the navigation of the vessel. The lack of sufficient experienced personnel on the Cuyahoga made it almost impossible to follow this rule and separate the two functions. The Subcommittee noted that the question of inadequate manning of Lthe C'u~a1ioga had been raised on at least two earlier occasions by Coast Guard inspecting officers. No action on their recommendation had beerL taken by the Coast Guard, however. This lack of manning also im- pacted on the maintenance and materiel condi~tiou of the ship. It~is `pO~sible that fewer lives would have been lost had the Cuyahoga been maintained properly and her various emergency equipment upgraded to present-day standards. An obvious factor in this collision was the failure by either vessel * to communicate by radio with the other. Each vessel was equipped with bridge-to-bridie radiotelephone, but neither used it. The law and regulations require, in effect, the use of the bridge-to-bridge radio- telephone when "necessary for the safe navigation" of the vessel. In hindsight, it was clearly "necessary" in this case, with the greater *burden being on the Cuyahoqa since she was the one that made the course change that caused the collision. In its report, the National Transportation Safety Board reco~ri- mended that the Coast Guard determine "in quantitative terms at what PAGENO="0158" 154 - minimum distance navigational information should be transmitted by bridge-to-bridge radiotelephone in passing, crossing, or meeting situa~ tions, and promulgate regulations accordingly". This recommendation raises the twin questions of whether such a regulation is within the Coast Guard's authority to issue and, if it is, whether such a regu- lation is feasible froni a practical standpoint. The Subcommittee intends to maintain oversight of the Coast Guard's action on this~ recommendation. This collision brought out a difference between the Inland Rules anft the International Rules for preventing collisions at sea. Under the~ Inland Rules, and the Pilot Rules, the stand-on vessel is required to~ hold course and speed. The International Rules modify this require-. ment for crossing situations by providing that the stand-Qn vessel may' act to avoid collision as soon as it becomes apparent that the other vessel is not taking appropriate action. Under this latter rule, the pilot of the Santa C~u~ II would have been permitted to slow his vessel once he saw the Uuya/wga change course to cross in front of him. The National Transportation Safety Board recommended amendment of the Inland and Pilot Rules to bring them into conformance with the International Rules so as to provide mariners the flexibility to initiate early action in crossing situations. The National Transportation Safety Board witness at the hearing reiterated this recommendation but also called the Subcommittee's attention to one negative aspect to~ the pi~oposed ch~uige; namely, that the increase in flexibility would also lead to a decrease in certainty. The National Transportation Safety Board concluded in its report that a meeting situation under the rules existed between the two ves- sels and that the course change by the Uuya/ioga some three minutes~ before the collision was, from the point of view of the Sainta Cru~, an unexplained deviation from the meeting situation, which would reauire the Santa Uru~ to immediately sound the danger signal. He~ pointed out that if both vessels are maneuvering at the same time it may be counter-productive. A dissenting opinion argued that this~ course change by the Uuyalioqa converted the meeting situation into a~ crossing situation, thus justifying the Santa Uru~ in holding its course and speed and not sounding the danger signal. The Subcommittee e~p~ssed its concurrence with the majority that the two vessels were~ in a meeting situation and that the turn by the Uuyahoga occurred at such close ran~e, and so shortly before the collision, that there was not time to establish a new situation between the vessels, and that the' Santa Uru~ II should have, immediately blown the danger signal. As a result of this tragedy, the Secretary of Transportation ordered a `study of the safety of afloat training for entry-level Coast Guard persnn'nel. The report to the Secretary on the results of that study con~ cluded that compliance with existing Coast Guard directives ancI~ orders would eliminate many afloat training problems; that the Coast Guard cutter Eagle presents the greatest potential for a serious acci- deiit ;and that the Coast Guard cutter Reliance is not a completely ade- qu~it~e t~aimpg platform because of her reduced permanent crew and~ materiel condition. The report alsoconcluded that some training boats~ and Fhlps are short of qualified training and maintenance nersonnel ançl that added staff would increase the mnr~in of safety. The report made recommendations to correct the deficiencies and inadequacies it; PAGENO="0159" 155 found and pointed out that additional funding and personnel "may be required to facilitate timely corrective action." The Subcommittee concurred with this last statement in the report to the Secretary. From its study of the incident and the various reports and testimony concerning it, the Subcommittee concluded that short- ages in personnel and funding contributed not only to the collision itself but also to the resulting loss of life, The Uvyalioga was the old- est vessel in the Coast Guard's fleet and obviously had not been main- ta~~ed to ~ suffic~e~tly safe standard. Further, it was not equipped or designed to meet present-day standards for safe operation. These defi- ciencies, which are reflected to a lesser extent on other Coast Guard `training platforms, are at least partly the result of insufficient funds being devoted to the Uuyahoga, and to other training ships and boats. It is also clear that shortage of Coast Guard personnel contributed to this tragedy. First, there were insufficient qualified personnel aboard the Cuyahoga to carry out the twin functions of directing the naviga- tion of the vessel and training the officer candidates. Second, the defi- ciencies in personnel over the years contributed to the failure to maintain the vessel properly. In its actions on the annual Coast Guard authorization bill, the Subcommittee utilized the information it had gathered in its inquiry into the loss of the Uuyahoga. As a result, it recommended adding fw~,s and~pe~sw~inel tp several areas to ipaprove the maiptei~ance and condition of Coast Guard vessels and to increase the Service's training capability. Marine Transportation of Hazardous Substances The Subcommittee held oversight hearings on the marine trai~s- portation of hazardous substances on July 31 and September 13, 1979. The hearings focused on the many complex issues involving liability and compensation aspects of hazardous substances spills and on their cleanup and removal. They were a follow-on to the Subcommittee's extensive work on liability and compensation for oil pollution. That work led to the development of H.R. 85 which was reported out by the Full Committee on May 15, 1979. The Subcommittee's work on pollution, while extensive, had con- cen~rated on oil, whose damage potential is readily discernable. Since hazardous substances are numerous and their potential for damage highly variable, the Subcommittee hearings were intended to develop information that would permit defining problem areas and addressing them with appropriate legislation if indicated. The hearings were not intended to review and consider any of the bills that have been intro- duced or to address any of their specific provisions. During the hearings, the consensus indicated that the.subjects of. oil pollution, hazardous substances pollution, and abandoned hazardous substances dump sites should not be joined in one bill, but should be treated separately. There was concern expressed over the Adminis- tration's decision to join these three issues into one bill and its poten- tial for delaying the pas~age of I-I.R., 85. This concern was .d~pened b~y the c~tinurng n~as~rve oil p~llution n~ciclent rreated by th~ June 3 1979 blowout of the Mexican offshore oil well, Iwtoc I in the Gulf of Mexico; and the July 19, 1979 supertanker collision between the PAGENO="0160" 16 AtZantic Empress and the Aegean Captain off the coasts of Trinidad and Tobago. The he~rings revealed that the precise magnitude of the national problem created by releases of hazardous substances from shoreside facilities, from vessels, and from other transportation modes is diffi- cult to establish. One reason is the failure' of the Environmental Pro- * tection Agency to promulgate a list of hazardous polluting substances, thereby delaying the implementation of an effective enforcement and reporting system for hazardous substances polluting incidents. Regulations for the implementation of such a reporting system were proposed on February 16, 1979, and final rules became effective only on September 28, 1979. All of the witnesses believed that there was a need for a systematic and comprehensive data base covering, all `aspects of hazardous substances pollution.' While the hearings reviewed problems of the marine transportation of hazardous substances, there was considerable testimony and concern expressed over the problem of abandoned hazardous waste disposal `sites,' the huge costs estimated to relieve these problems, the human exposure and health problems involved, and the potential for economiC lo~ses from releases from these sites. The materials presented clearly demonstrated that hazardous substances releases, while including both ~transportation- and nontransportation- related facilities, have not created significant problems in the field of marine transportation. `Many of the problems are generated inthe railroad mode of transpor- tation. Cases of potential pollution that were cited indicated the effec- tiveness of existing~ regulations and procedures applicable to the marine mode. It was apparent that with oil the problem was relatively simple `since one basic substance-namely, crude oji and its refined prod- ucts-is involved. Hazardous substances, however, consist of hundreds of different chemicals, in different forms, and transported by different methods-making the problem highly complex. Oil is also, to a lai~ge extent, removable, and the damage it creates generally ascertainable. With chemicals only 22 of the 299 on the EPA list are removable, while the remaining 277 are water-soluble. This, of course, magnifies the issues as to types of provable and ascertainable damages and the types of claimants that should be included in any compensation scheme. The Subcommittee concluded, that a clear understanding of h~b~ `is `and is not a hazardous substance and how to quantify the harmfulness of particular amounts of such a substance might prove difficult, but that these understandings are essential before legal or financial responsibilities can be imposed. The hearing highlighted the need to establish a. system to encourage a high standard of care by those who are responsible for and who actix- ally transport hazardous substances. With respect to oil spill legisla- `tion, `a two-tier system has been developed whereby the carrier of. the oil has frontline responsibility for the prevention of pollution and for its reporting and cleanup, with the oil industry supporting ~ $200 million backup fund by the payment of a fee on oiL The Subcommittee plans to address the question of how ,a similar system might be. estab- lished `to'provide the financial arid liability, incentives tO encourag&a high ~tai~dard of care in `tim marine transportation of hazardous substances. PAGENO="0161" 157 Fropo~ed IMCO Cowoentwn o~ei Lzabiltty and Conipensatzon in Con nec'tio'it With the O~arriage of Noxious and 5a~ardous~Substances by Sea The Subcommittee was represented at the 41st Session of the Legal Committee of the Inter-Governmental Maritime Consultative Organi- zation (IMCO) in London, England. The meeting considered draft articles for a Convention on Liability and Compensation in' Connec- tion With the Carriage of Noxious and Hazardous Substances by Sea. This Session attempted to agree on basic concepts; however, this proved difficult. While there was less than unanimity as to solutions, *there was unanimity as to the complex nature of the problems in- volved in establishing a legal regime to deal with hazardous substances. It was apparent that before draft articles could be considered it would be necessary to agree upon a list of hazardous substances and to ascertain the scope and extent of the proposed `Convention. After. much discussion, it was agreed that the Informal Working Group of Technical Experts should be reconstituted to provide the. Committee with expertise on the substances that should be covered. The experts were told to consider only those substances that are carried in bulk and can cause massive and catastrophic environmental, toxic, and fire and explosion damage to persons and property beyond the confines of the vessel itself. This left open the question of including bulk resi- dues and hazardous substances carried in packaged form. Concern, was also expressed over reducing the ori~ina.l 84 substances to too small a list. A paper presented by the U.S. highlighted our list of 299~ ele- ments and compounds designated as hazardous substances and the iieed to consider factors such as probability and consequence. The group finally developed a work.ing paper that included some two dozen sub- stances that will be subjected to another review at the next session. In considering the draft articles, the Legal Committee' comrnened a review of four alternatives that had been developed at prior sessions. Alternative I provided joint and several liability among tlaeshipowner a~d shipper, which appeared complicated and `full of insurance. prob-' lems. Alternative II also' makes the shipowner and shipper iiabie~ with the shipper liable up `to a~ fixed limit and the shipper `liable up to' an additional higher fixed limit. Alternative III makes the shipper solely liable for damages, while Alternative IV makes the. ship~wner solely liable for damages. Where the liability should be placed is' a conten-' tious issfie and one directly related to the `scope of substances to be included. ` On the basis ~of Committee preference, it was decided to deal' first, with Alternative IT and then Alternative' IV, without excluding ref- erence to or possible future study .o'f the other `two alternatives. An article-by-article review was commenced, which was quite revealing and enlightening due to the widespread disagreement as to what a.~ particular definition or a particular article should say. Considerable controversy arose over what should be included in the definition of. "damage" and which victims require protection. While many agreed that damage to property and person~ outside the ship should he in- cluded, many also felt that, persons on' board the vessel such as long- shoremen and persons other than the crew should also be included. Other damages that were discussed were damage to cargo and to natu- 56-410-80----i1 PAGENO="0162" 158 ral resources, and the economic losses suffered for preventative meas- ures taken, evaluation of persons and property, wreck removal, and for closing down businesses. It was recognized that any definition of "damage" had to be realistic and could have severe insurance coverage implications. Additional discussions related to basis of liability, such as whether or not the Convention should apply solely when substances are being carried at sea or also during transfer operations. This further reflects the problem of not lmowing what insurance coverage applies, the shipowner's or the shipper's. Article 6, which relates to the "appli- cable law" for establishing liability limits, was considered by all as a crucial article of the Convention, and all agreed it was essential for one to know what the threshold sAnd ceiling amounts of liability are, whether he be shipowner or shipper. If left up to the applicable na- tional law, this might create too many variables to permit adequate insurance coverage. The United States felt that limitation amounts should have some relationship to the risks involved and should not be based solely on vessel size or volume carrie4. The Legal Committee decided that a working document should be prepared containing articles and summaries of comments to date. It agreed to meet for five more one-week sessions before the Diplo- matic Conference meets in 1982. SUBCOMMITTEE ON OCEANOGRAPHY Total bills referred to subcommittee 16 Bills reported, passed, and now Public Laws 1 Bills considered 8 Hearings held (days) 15 Markup sessions (days) 5 LEGISLATIVE Aci'ivrri~s. ILR. 9~O-To `Provide for the Development of A~ucwu7tnre in the United States and for Other Pt~rposes H.R. 20 was introduced on January 15, 1979 by Mr. Murphy of New York and 25 other Members. Joint hearings were held on the bill by the Subcommittee on Fisheries and Wildlife Conservation and the Environment and the Subcommittee on Oceanography on April 5, 1979. On April 27, 1979, the Subcommittees jointly ordered H.R. 20 reported without amendment to the Full Committee. On May 3, 1977, the Full Committee unanimously ordered the bill reported to the house with amendments. H.R. 20 was sequentially referred to the Oommitt~e on Agriculture, which reported the bill to the House with amendments on July 16, 1979. No further action was taken on the bill during the first session of the 96th Congress. A cothplete description, of the legislative history, provisions, and aètions taken on H.R. 20 is includedin the section of this report which describes the legislative activities of the Subcommittee on Fisheries and Wildlife Conservation and the Environment. H.!?. 1414 and H.!?. 3749-1-Liquid Natural Gas (LNG) Facility Saf~ty and Siting On July `18 and 19, 1979 the Subcommittee on Oceanography joined the Subcommittees on Coast Guard and Navigation and Merchant PAGENO="0163" 159 Marine in holding joint hearings on 11.11. 1414 and H.R. 3749, two bills to increase safety and siting regulation of liquid natural gas facilities in the United States. A detailed description of the bills and the hear.. ings on them is contained in the section of this report describing the legislative activities of the Subcommittee on Coast Guard and Navigation. 8. 1J,54-NOAA Corps Status EguaZi~ation LegLslation As `one of the Nation's seven uniformed services, the NOAA Com- missioned Officers Corps functions as a small cadre of officers available to the Department of Defense in times of war or national emergency. At the same time, the Corps provides scientific knowledcre to the National Oceanic and Atmospheric Administration (NOA~) of the Department of Commerce in such areas as: geodesy; oceanography; photogrammetry; hydrographic surveying; tide and current studies; fisheries; and cartography. The purpose of this legislation is to make several changes in the law with respect to the Commissioned Officer Corps of NOAA. This action brings the Commissioned Officers Corps into closer parity with other divisions of the armed and uniformed services. To accomplish this purpose, S. 1454 would simplify the interservice transfer of Commissioned Officers between NOAA and other divisions of the uniformed services, provide for advance payments to NOAA Officers to meet expenses incident to a permanent change of station when on duty at a distant station (members of the armed forces are presently aut~horized to receive such payments), and extend to NOAA Officers the same benefits now afforded members of the armed services with respect to applying for unemployment compensation in any State in which they first file a claim after separation from active service. In May 1979, the legislation was transmitted to the House and the Senate by. the Departi'nent of Comm~rce, S. 1454 passed the Senate without ameLndments on. September 6, 1979. The bill was referred jointly to the House Committees on Merchant Marine and Fisheries, Armed Services, and Ways and Means. During a Full Conimittee markup on October 31, 1979, Chairman Stnd'de asked and received unanimous consent to discharge the Sub- committee from further consideration of S. 1454, and the bill was ordered reported to the House without amendment by unanimous voice vote~ A detailed description of the bill is contained in House Report 96-539, part 2. The bill was considered on the House Floor under unanimous con~ sent on December 20, 1979, and passed unanimously with amendments. H.R. 2519-Authorization of Appropriations for flseaZ year 1980 and Amendments to t1~e Marine Protection, Research, and Sa'nc- tuaries Act of 1972 (Ocean Dumping Act) H.R. 2519 was introduced on February. 28, 1979, by Mr. Murphy of New York, and eight cosponsors. Eleven additional Members joined as co~ponsors of the bill before it was ordered reported. H.R. 2519 as introduced was identical to H.R. 10661 which passed the House in the 95th Congress, but was not acted upon `by the Senate. H.R. 2519 was jointly referred to the Committees on Merchant Marine and Fish- eries and Science and Technology. Within the Committee on Merchant PAGENO="0164" 160 Marine and Fisheries, the bill was further referred jointly to the Subcommittees on Oceanography and Fisheries and Wildlife Con- servation and the Environment. As reported by the Committee, ILR. 2519 would amend section 111 of Title I, section 204 of Title II, and section 304 of Title III of the. Marine Protection, Research, and Sanctuaries Act of 1972, as amended, to extend the authority to appropriate funds not to exceed the follow~ ing amounts (in millions) for fiscal years 1979 and 1980: Fiscal year 1979: Title I $3. 0 Title II - 6.0 Title Ill . - 1. 0 Fiscalyear 1980: Title i 3. 5 Title II 10. 5 Title Ill 3. 0 In addition, H.R. 2519 would transfer the authority to conduct re- search on alternative waste disposal methods of ocean dumping from the 1~epartment of Commerce to the Environmental Protection Agency. In cases where a federal agency desires to ocean dump material from a foreign location, the bill would allow that agency to apply for a permit to the foreign government involved, provided that the Environmental Protection Age.ncy (EPA) concurs with the proposed agency action. Further, the bill would amend Public Law 95-153 to require theY termination on or before December 31, 1981, of the ocean dumping of industrial wastes which are harmful to the marine environment. The bill~ would allow the issuance of limited permits after the 1981 deadline for ocean dumping of industrial waste which is necessary to conduct research on new technology or to determine whether the o~cean dumping of a new or little understood substance will in fact be harmful. Finally, H.R. 2519 would amend Title III of the Marine Protec- tion, Research,. and~ Sanctuaries Act of 1972 to require the Secretary of Commerce to. identify the activities which are to be regulated prior to the designatiQn of a marine sanctuary, to. allow popularly elected governors of territories the same rights .as state governors in the marine sanctuary designation process, arid to provide a method for Congres- sional disapproval of part or all of a proposed marine sanctuary designation. On March 5,. i~79, the two Subcommittees held a joint open hear- ing on H.R. 2519, re~eiying testimony from Administration witnesses representing the Environmental Protection Agency and the National Oceanic and Atmospheric. Administration. Statements for the record were submitted by several environmental organizations. This hearing also included~H.R.. 1963~ filed by Mr. Hughes of New Jersey, which wa~s identical to Section 7 of H.R. 2519. On March 19, 1979, the Subcqmmittee on Oceanography . and the Subcommittee on Fisheries and Wildlife Conservation and the En- vironment met in joint open session and ordered H~R. 2519 reported with amendments. tO the Full Committee on Merchant. Marine and Fisheries by~ a unanimous vOice vote. An amendment by Mr. Forsythe PAGENO="0165" .161 amended section 7 of the bill to permit the Mministrator of the' Environmental. Protection Agency to issue limited permits after th~ 1981 de~ad1ine esZabIished by t~iat section, for ocean dumping of indus- trial waste which is ~iecessary to conduct research on new technology or to determine whether the ocean dumping of a new or little-under- stood siibstan~e~will be harmful to the marine environment. An amend- ment offered by Mr Pritchard added a new section 8 to the bill which `amends current law to allow a federal agency desiring to ocean dump material, from a foreign location to apply for a permit to the foreign governthent involved, with the concurrence of the Environmental Pro- tection Agency, Mr. Sjudds offered amendments en bloc to sections 1, 3, and 6 of the bill to change five of the six authorization figures as shown in th~ following table: HR. 2519 as filed (Identical to House-passed H.R. 10661 in the .95th Congress) Fiscal year 1979: Millioii~ Title I $6.8 TitlëIT 7 5 Title m___. 2. 0 Fiscal year 1980: TitieT 7.8 Title II 9 0 Title III 3. 0 H.R. 2519 as Amended by Joint Subcommittees Fiscal year 1979: Millions Title I $3. 0 Title II 6. 0 Title III 1. 0 Fiscal year 1980: Title I 3.5 Title II 9. 5 Title HI 3. 0 Four of the five changes in authorization levels made by the amend- ments are reductions from the amount authorized by the bill which passed the House in 1978. The purpose of the reductions is to bring the authorization figures into a more reasonable relationship with the amount actually being appropriated for these activities. The reduc- tions are not intended by the Committee to be interpreted as showing any reduction in the Committee's estimate of the funds needed for these activities, nor to signal the Committee on Appropriations that it should reduce the amounts actually being appropriated. The Com- mittee believes the full amounts authorized by the amended bill should be appropriated to carry out the important activities authorized by the bill. The fiscal year 1980 authorization for Title IT was increased by $500,000 to cover the Administration's budget request. Mr. Wyatt offered an amendment to section 5 of the bill, which added provisions allowing the Congress to disapprove part or all, of a proposed marine sanctuary designation by passage of a concurrent resolution by both Houses of Congress wit.hin 60 days of continuous session after the designation's submission. Mr. Studds offered a series of technical amendments to various sections of the bill. All of the above-mentioned amendments were adopted by voice vote by the Sub- committees on Oceanography and Fisheries and Wildlife Conservation and the Environment. PAGENO="0166" 162 On April 10, 1979, the Committee on Merchant Marine and Fish~ eries met in open session on H.R. 2519. The Committee adopted by voice vote an amendment by Mr. Studds to section 5 of the bill to clarify authority over enforcement of marine sanctuary regulations, and an amendment by Mr. Forsythe adding $1,000,000 to the Fiscal Year 1980 authorization for ocean dumping research (Title II) to fund two studies which will provide information to be used in efforts to reduce the pollution entering the New York Bight area from the Hudson and Raritan Rivers. By voice vote, H.R. 2519 was ordered reported to the House with a single amendment in the nature of a substitute, striking all after the enacting clause and inserting the text resulting from the Committee's deliberations. The Committee on Science and Technology, to which H.R. 2519 was jointly referred, reported the bill to the House with several provisions different from those adopted by the Committee on Mer- chant Marine and Fisheries. In order to simplify consideration of the bill by the full House, a single version was negotiated between the two Committees and filed as I-i.R. 5214. The negotiated version, H.R. 5214, was identical to H.R. 2519 as reported by this Committee except for deletion of authorizations for fiscal year 1979; reduction of the title II (research) authorization for fiscal year 1980 from $10.5 mil- lion to $10.338 million; and addition at the end of the bill of a new section defining the waters of Long Island Sound as ocean waters for the purposes of ocean dumping regulation. On September 6, 1979 the Chairmen of the. Committees on Merchant Marine and Fisheries and Science and Technology sent a letter to the Chairman of the Committee on Rules asking for a hearing on a rule for H.R. 2519 which would allow the text of H.R. 5214 to be offered in lieu of the committee amendments and considered as an original bill for pur- poses of amendment. The Committee on Rules did not schedule ~ hearing on the proposed rule during the 1st Session. 1?.]?. 2&~O-To Authorize Appropriations for the National Ocean Pollntion Reeec&rch and Develop iment and Monitoring Planning /Ict for Fiscal Year 1980. H.R. 2520 was introduced on February 28, 1979, by Mr. Murphy of New York, and five cosponsors. Four additional members joined as ~cosponsors before the bill was ordered reported. The bill was jointly referred to the Committees on Merchant Marine and Fisheries and Science and Technology. On ]\`rarcli 1, 1979, the Subcommittee on Oceanography held' an open hearing on H.R. 2520, receiving testimony from Administration `witnesses from the National Oceanic and Atmospheric Administra- tion (NOAA). The Congress passed the National Ocean Pollution Research and Development and Monitoring Planning Act in 1978-Public Law 95-273-primarily to provide for the coordination and planning of the ocean pollution research, development and monitoring activities of the Federal Government. Among. the means designated to imple- ment this coordination effort was the formulation every two years of a plan covering the research and monitoring program for the next five years. . PAGENO="0167" 163 NOAA was designated the lead Federal agency for preparing this plan, the initial version of which was to be submitted to the Congress by February 15, 1979. Due to the late date on which the act became law, the completion of the initial 5-year plan was not expected until well into fiscal year 1979. In fact, it had not yet been published in late December. In recognition of this likely delay, Congress did not authorize appropriations for fiscal year 1979 in its enactment of Public Law 95-273. H.R. 2520 authorized appropriations of $5 million for fiscal year 1980 to NOAA for the purposes of carrying out the act. Inquiring into the specific uses of this funding, the Committee learned at its March 1 hearing that $4.45 million would be used to fund priority ocean pollution research, development and monitoring needs identified in the first 5-year plan and not currently being addressed by the Federal Government. Approximately $450,000 would be expended on develop- ment and implementation of data and management information sys tems and $100,000 would be for administrative expenses. On March 19, 1979, the Subcommittee on Oceanography met in open session and ordered 11.11. 2520 reported to the Full Committee on Merchant Marine and Fisheries by a unanimous voice vote. On April 10, 1979, the Committee on Merchant Marine and Fisheries met in open session and ordered 11.11. 2520 reported to the House by unanimous voice vote. No amendments were offered to the bill in either the subcommittee or the full committee. The Committee on Science and Technology ordered the bill reported to the House on March 15, 1979. Its version amended the figure $5 million to $4.3 thillion, which was the official Administration request. Since the Committee on Merchant Marine and Fisheries wished to bring H.R. 2520 before the House under suspension of the rules and because it would have been very difficult to justify in detail the specific need for $5 million, it acceeded to the Committee on Science and Technology's amendment reducing the authorization to $4.3 million. ILIR. 2520 was considered by and passed the House under suspension of the rules with the Science Committee amendment, on May 14, 1979. The bill passed the Senate on May 17, 1979, without further amend- ment. 11.11.2520 became Public Law 96-17 on June 4, 1979, H.Ri3759-Deep Se&ied Hard Mineral Resource Act }T.R. 2750 was introduced March 8, 1979 by Mr. Murphy of New York, Mr. Breaux, Mr. tTdall, Mr. Santini, Mr. Zablocki, Mr. Bing- ham, Mr. Bonker, Mr. Tlllman, Mr. Pritchard, Mr. Young of Alaska, Mr. Derwinski, and Mr. Conable. The bill was jointly referred to the Committees on Merchant Marine and Fisheries, Foreign Affairs, In- terior and Insular Affairs, and Ways and Means. Additional Members joined as cosponsors subsequent to the bill's original introduction. The bill was referred on March 14, 1979 to this Committee's Sub- committee on Oceanography, which held hearings on May 22, May 23, and June 7, 1979. Testimony was received from Members of Congress, officials of the Executive branch,, representatives of the mining in- düstry, environmental groups, church groups, academia, a maritimG organization, and other interested citizens. PAGENO="0168" 164 KR. 2759 as introduced was identical to the language of H.R. 3350 as it 1passed the House during the 95th Congress, except for deletion of the definition of the term "Secretary". Legislation on the subject of deep seabed hard mineral resources has been under consideration in the Committee on Merchant Marine and Fisheries since the 92nd Congress. Hearings have been held on the sub- ject in each Congress since then~ In the 93rd and 94th Congresses, bills. w~re reported to the full Committee on Merchant Marine and Fish- eries, but not to the House. In the 95th Congress, H.R. 3350 was reported to the full House by three cminittees, and was passed on July 26, 1978 by a 312-80 vote.. A similar bill was reported by committees in the other body, but was not.passed prior to sine die adjournment. Although mineral nodules were first discovered on the deep ocean seabed in 1872 by the British oceanographic ship H.M.S. Challenger,. only in the last 10 to 15 years has serious consideration been given to the development of these nodules as a valuable mineral resource, These nodules contain several different metals at varying levels of purity, with specifically nickel, copper, cobalt, and manganese receiv- ing the most interest from a commercial Standpoint. Although the relative content of these minerals varies considerably in different areas of the deep seabed, one study suggests that the average content of manganese nodules is 24.9 percent manganese, 14.0 percent iron, 1.0 percent nickel, 0.5 percent copper, and 0.35 percent cobalt. Current processing technology would be aimed at refining nickel, copper,. and cobalt. Manganese would be refined by at least one of the pro- posed operations. The origin of the nodules, although still somewhat uncertain, is thought to be primarily a geochemical process which involves accre- tion of the metals around small objects of the deep seabed including sediments, or bones from fish or mammals. The distribution of these nodules on the deep seabed occurs mainly beyond the national juris- diction of any coastal state, except for a small portion of the Clarion- Clipperton zone off Mexico. Estimates of the total amount of nodules available range widely, with some estimates at aromTld 1.5 trillion tons. Obviously, however, this vast supply does not by itself translate into economic viability. Before the major mining consortia, which have invested significantly in the development of deep seabed min- erals, can begin coimmercial deep seabed mining operations, they must take into account other factors including (1) the number of areas with nodules of sufficient concentrations and in sufficient abundance,. (2) topographical features of these areas which affect the operation and maintenance of dredging machinery, and, perhaps most important, (3) the current market demand and price for minerals to be obtained from the seabed, and to' what extent seabed minerals are competitive with land-based operations.. Seabed minerals provide a major new source of supply of the four metals mentioned above, and this ex- plains the strong interest of many existing land-based producers, in- cludrng both developed and developing countries. The four major consortia which have been assembled primarly as a means of risk-sharing include the following: PAGENO="0169" 165 (1) Kennecott Exploration Corp.-This consortium is composed of Xennecott Copper Corporation, which has ~Q percent of the owner- ship. Other partners, all at a level of 10 p~rcent, include Rio Tmto 2ine, Ltd. of the ILK.; Consolidated Goldfields, Ltd. of the U.K.; British Petroleum Co. of the U.K.; Norancia Mines, Ltd. of Canada.; and Mitsubishi Corp. of Japan. (2) Ocean Mining Associates.-The consortium consists of three partners, all with one-third ownership. They are United States Steei Corporation; Union Miniere S.A. of Belgium; and Sun Co., Inc. 0± the United States. (3) Ocean Management, Inc.-T his consortium consists of four ma- j or partners, all with 25 percent ownership. They are International Nickel Co., Ltd. (INCO) of Canada; SEDCO, Inc. of the U.S.; Metallgeseilschaft A.G., Preussag A.G., and Salzgitter A.G., all of the Federal Republic of Germany; and Deep Ocean Mining Co., Ltd., which is composed of 23 Japanese companies. (4) Ocean Minerals Company.-This consortium consists of Lock- heed Missiles and Space Corporation of the U.S.; Billiton B.V. of the Netherlands; Bos Kalis Westminister Ocean Minerals B.V. of the Netherlands; and Standard Oil of Indiana of the U.S. These four seabed mining consortia are prepared from a techno- logical and economic standpoint to accelerate their commercial de- velopment, which could result in full-scale commercial recovery around 1985 or 1986. Although past predictions of the commencement of com- mercial recovery have steadily moved further into the future, it is possible that these companies are nearing the stage of development where they are likely to begin developing demonstration~siZe testing of integrated mining and processing systems. The expenditures for indi- vidual mining companies during this prototype per~od are expected to be in the order of $150 million per consortium. Already two consortia have undertaken at-sea tests of their deep sekhed mining recovery systems. The work to be carried on in this next phase of the project must be conducted on the same ore deposit to be ultimately exploited, in order to adapt mining and metallurgical systems to particular ore characteristics. Most of the commercial deposits of metal nodules are at depths greater than 2,000 meters. Therefore, the lift technology, including the dredgehead and the pipestring for an airlift or hydraulic system, requires extremely sophisticated materials, engineering, and design. The three primary methods being studied for recovering nod~ules in- dude (1) a suction dredge with airlift pumping, (2) a hydraulic suc- tion dredge without the use of air, and (3) the so-called continuous line bucket (CLB) method. Although the CLB system, which is sim- ply a series of buckets attached to a polypropylene rope, is the sim- plest, and by far the least costly, the effectiveness of this system is brought into question, assuming that the airlift and hydraulic lift systems can be further refined. The processing technology is extremely dependent upon the physical ~characteristics of the nodules, including their iron content, trace metal content, detrital material content, and the overall grade of the mm- erals. The metallurgical process which is developed must be ~dapted PAGENO="0170" 166 to the characteristics of the nodules in a particular mine site. Alterna. tive extraction processes which are currently under consideration include (1) an i~mmonia leaching system, (2) a hydrochloric acid leaching system, and (3) a pyrometallurgical system. The hydrochloric a4~id leaching method and the pyrometallurgical method are necessary in order to extract manganese from the nodules. The ability to recover manganese has the effect of reducing th~ overall operating cost of the processing facility for the production of nickel, which will be the most valuable of the metals produced. In terms of the overall cost factors for the deep seabed mining in- dustry, a useful model has been developed by a multidisciplinary team at MIT. Using a certain set of assumptions which provide only rela- tive rather than absolute values; a baseline mining project with a total investment of $560 million for preliminary investment and expenses, and with additional operating expenses of $100 million, annual gross revenues were estimated at approximately $258 million. After account- ing for depreciation, interest and taxes, the internal rate of return (IROR) for the baseline project was 18 percent, resulting in a pay- back period of 5.4 years. In consultations with Members of this Committee, legislators from several other countries (including West Germany, Japan, United Kingdom) have indicated that they have filed or plan to file legisla- tion similar to that being considered in the United States. Most have indicated that they plan to wait until legislation has been passed in the United States before pressing for its passage in their own countries. The `purposes of the Deep Seabed Hard Mineral Resources Act are fivefold. First, the legislation is intended to encourage the successful conclusion of the negotiations to achieve a comprehensive Law of the Sea (LOS) Treaty which will among other things, give legal definition to the `principle that the hard minerals of the deep seabed are part of the "common heritage of mankind." From the perspective of the United States, the successful conclusion of a comprehensive Law of the Sea Treaty requires negotiation of treaty provisions providing non- discriminatory and assured access to deep seabed resources for all nations. Second, this legislation provides for the establishment of an inter- national revenue sharing fund which would receive contrih~tio'ns from companies that have been issued permits to engage in commercial re- covery under `this Act. The proceeds of the fund would be used for sharing with the international community pursuant to an eventual Law of the Sea Treaty. The purpose of the establishment of this fund is to demonstrate the good faith of the United States and its desire to work toward a legal definition of the concept of the "common heritage of mankind." The third purpose of this Act is to establish an interim program. and procedure to regulate the exploration for and the~'eommercial recovery of hard mineral resources of the deep ocean floor by U.S. citizens, pend- ing the ratification of a Law of the Sea Treaty by the United States and its entering into force. `Fourth, this legislation is designed `to accelerate the program of en- vironmental assessment of the effects of exploration for and com- mercial recovery of hard mineral resources of the deep seabed. This PAGENO="0171" 167 legislation ~s ainied at assuring that such~ exploration and recovery activities are cènduëted hi a manner which will encourage the con- servation of such resources, protect the quality of the environment, and promote the safety of life and property at sea. Because deep seabed mining involves a new application of technology at sea, this legisla.- tion is designed to assure that environmental regulation evolves with the development of the technology. Finally, the legislatioriis designed to encourage the continued devel- opment of the technology necessary to recover the hard mineral re~ sources of the deep seabed; Because of the protracted nature of the international negotiations to establish a legal regime for deep seabed mining, it is possible that without interim legislation, much of the existing research and development efforts could be dissipated. It is expected that this interim ocean mining legislation will provide a degree of investment certainty sufficient to maintain a more constant industrial research and development effort in the development of the technology for mining deep* seabed minerals. The Subcommittee on Oceanography held mark-up sessions on H.R. 2759 on June 20 and July 11, 1979. By unanimous consent, the Subcommittee adopted as the markup vehicle a Subcommittee staff print, which made substantial changes to the text of Titles I and III of the bill. After adoption of the Subcommittee staff print as the markup vehicle, it was amended in several respects by the Subcom- mittee. An amendment offered by Mr. Pritchard changed purpose (5) in Section 2(b) of the bill to "encourage", rather than "allow", the continued development of technology necessary to recover the hard mineral resources of the deep seabed. An amendment offered by Mr. Studds added to the bill section 203, which disclaims any legal or moral obligation on the part of the United States to compensate any person for ~ny impairment of the value of his investment in any deep seabed mining operation conducted under the bill which might occur in connection with the entering into force of a Law of the Sea Treaty with respect to the United States. An amendment offered by Mr. Breaux to. the aforementioned amendment by Mr. Studds changed the language of sections 201 and 202 to set stricter standards for determining whether or not a Law of the Sea Treaty ~nipairs the value of deep seabed mining investments. An amendment offered by Mr. Akaka rewrote paragraph 102(c) (5) to prioritize the factors which must be taken into account by the Secretary in issuing regu- lations with respect to the location of processing plants. A series of technical amendments offered by Mr. Studds was adopted by the Subcommittee. All of these amendments were adopted in the Sub- committee by voice vote. On July 25, 1979, the. full Committee on Merchant Marine and I~ isheries marked up H.R. 2759 as reported by the Subcommittee on Oceanography. During the full Committee markup, six amendments were adopted. An amendment offered by Mr. Breaux providing for judicial review of pre-hcense suspensions under section 101(b) was ~clopted by an 8 to 5 division vote. An amendment offered by Mr. Murphy to section 102 (a) to require the Secretary to issue licenses and permits to eligible applicants was adopted by a voice vote. Amend- ments offered by Mr. Murphy to delete from the administrative fees PAGENO="0172" 168 required to be paid under section 104 the administrative costs of processing environmental impact statements, and to delete from sec- tion 109 a subsection providing for creation of stable reference areas, were passed by voice vote. An amendment offered by Mr. Breaux, ~adopted by an 11 to 7 division vote, added a new paragraph (4) to ~section 105(c), prohibiting the Secretary from modifying terms, con- ditions, or restrictions of a license or permit if the Secretary deter- mines, on the basis of substantial evidence, that the national interest in obtaining hard mineral resources from the area which is covered by the license or permit and which is the subjeét of the proposed modification outweighs the potential injury to the quality of the environment intended to be remedied by the modification. An amend- ment offered by Mr. MeCloskey, adopted by a 12 to 4 division vote, amended sections 201 and 202 to refer to continuation of existing deep seabed mining operations, rather than to impairment of the value of investments. H.R. 2759, as amended, was ordered reported to the House by voice vote, with a quorum present. Further details of the provisions of H.R. 2759 as reported by the Committee to the House are contained in House Report 96-411, part 2. By the end of the 1st Session, H.R. 2759 had been reported to the House, with different amendments, by the Committees on Merchant Marine and Fisheries, Interior and Insular Affairs, and Ways and Means. The Committee on Foreign Affairs, to which the bill was also iorntly referred, held several hearings during the 1st Session on the bill, and was reported to be awaiting the outcome of the next session of the Law of the Sea negotiations which will conclude in March, 1980, before reporting domestic deep seabed mining legislation. The Carter Administration has taken the position of supp9rting Senate passage of deep seabed mining legislation, but is advising the House of Representatives that it should not pass such legislation until at least April, 1980, at which time, a conclusion can be drawn about the likelihood of ultimate success of the U.N. Law of the Sea Treaty negotiations. TLR. 3577-To Ant hori~e Appropriations for the Natio'naZAclivisory Copvimittee oz~ Oceans and Atmosphere (NACOA) for FiscaZ ~Jectrs 1980 and 1981 H.R. 3577 was introduced on April 10, 1979 by Mr. Murphy of New York and Mr. Pritchard. On April 24, 1979, the Subcommittee on Oceanography held an open hearing on H.R. 3577, receiving testimony from Mr. Michael Glazer, Assistant Administrator for Policy and~ Planning of the Na- tional Oceanic and Atmospheric Administration (NOAA), Depart- ment of COm~mei~ce, and Dr. Donald L. McKernan, Chairman of NACOA, plus three other NACOA. members. The major purposes of the hearing were to examine how extensive a role NACOA was playing in federal oceanic and atmospheric policy and whether NACOA had made the best use practicable of its fiscal year 1979 funding. Mr. Glager testified that NACOA was performing a valuable function and that the Administration's authorization re- quest for NACOA for fiscal year 1980 was $465,000. This number represented a $19,000 decrease from NA'COA's fiscal year $484~u00 PAGENO="0173" .169 apprôpriatioñ and a: $55,000 decrease from the $520,000 NACOA projected as its fiscal year 1979 expenditures. NACOA was author- ized $572,000 in fiscal year 1979 and H.R. 3577 would authorize $550,- 000 for fi~cal year 1980. Under questioning by Chairman Studds, Mr. Glazer informed the Subcommittee that the cut to $465,000 was part of a reduction ap- plied to the entire executive direction and administration budget item of NACOA, in which NACOA is included. However, this reduction was'ap:plied to the amount originally appropriated-$484,000-instead of to the actual amount available to NACOA in fiscal year 1979- $523,000. NOAA neither attempted to prepare a $465,00 budget for NACOA no~ consulted with NACOA until after submitting its request. Dr. Donald L. McKernan, Chairman of NACOA, explained that he had directed NACOA's staff to formulate a budget request for fiscal year 1980 that would state the minimum amount NACOA would need to continue its fiscal year 1979 level of operations. The budget estimate the, ~taff formulated came to $603,776-including $373,676' for salaries and benefits for 12 staff members. Dr. McKernan agreed with committee members that the NACOA staff is topheavy in its grade levels antl salaries and said that he was working to alleviate this problem by attracting younger staff. After careful scrutiny, the Subcommittee concluded that $550,000 would be sufficient fund- ing for NACQA's fiscal year 1980 budget. Immediately following the hearing, the Subcommittee marked up the. bill. Chairman Studds offered a substitute to H.R. 3577 to elimin- ate carryover funding to NACOA from one fiscal year to the next because in. actual practice NACOA had not in past year received its carryover fun~1s from NOAA. The substitute also provided for only a one year authorization as opposed to the two year authorization originally in the bill because it. was felt that it would not be possible to accurately predict NACOA's needs for fiscal year 1981 at that time. Mr. Pritchard offered an amendment to the substitute to H.R. 3577 to increase NACOA's authorization level for fiscal year 1980 from $465,000 to $550,000. Mr. Pritchard's amendment and the substitute were adopted by unanimous voice votes. n 4pril 25, 1979, the Committee on Merchant Marine and Fish- eries met in open(session and ordered H.R. 3577 reported to the House with the Subcommittee amendments by unanimous voice vote. The C~m~nittee's report (House Renort 96-116) was flied, with the House Qf Representatives ~n May 3, 1979. H~R~ 3577 was considered by the House of Representatives under ~uspension of the rules on May 14, 1979, and was passed by a vote of `340 to 36. A ~irnilar Senate bill, S. 951, reported by the Senate Commerce Committee on May 11, 1979 authorized $585,000 for fiscal year 1980 and $62~,000 for fiscal year 1981. Negotiations between the two bodies resulted in an agreement on a two year bill authorizing $565,000 for fiscal y~e~r 1980'and.$GOO,OOO'for fiscal year 1981. The amended' S. 951 passed the. Senate. on June 4, 1979. The House agreed to the Senate amendment on June 14, 1979, and the bill became law onjüne 21,1979 as Public Law 96-26. PAGENO="0174" :170 J1.R. 4417-Chesapeake Bay Research Coordination Act of .1979 H.R. 4417 was introduced on June 11, 1979, and was jointly referred to the Committees on Merchant Marine and Fisheries, and Science and Technology. The bill was introduced, by Congressman Robert Bau- man and co-sponsored by Congresswoman Majorie bit and Bar- bara Mikuiski. A similar bill passed the House in the 95th Congress, but was never taken up by the Senate. The primary purpose of H.R. 4417 would be to provide for the coordination of federally supported and conducted research efforts regarding the Chesapeake Bay. It would establish within the De- partment of Commerce an independent agency, to be called the Office for Chesapeake Bay Research, Planning, and Coordination (the Office). The Office would be responsible for reviewing and evaluating on ~ continuing basis all Federal marine research projects on the Chesa- peake Bay in order to determine both the extent of duplication of such research and ~the benefits to be obtained from it. It would also develop a priority listing of additional research projects which would be of benefit to the area. In addition, the Office would be responsible for setting up a clearinghouse of information on related ongoing re- search called the Chesapeake Research Exchange. It would also be charged with reviewing and evaluating those efforts, conducting periodic meetings, making recommendations to State, local and re- gional governments, and submitting an annual report to the Congress knd the Secretary of Commerce. H.R. 4417 would also establish a Chesapeake Bay Research Board, which would consist `of members, selected by the governors of Mary- land and Virginia, and by the Secretary of Commerce (in consulta- tion with other agencies). The Board's main function would be to develop a Chesapeake Bay Research. Plan, updating it annually; to advise the director of the Office concerning th~ carrying out of the Qffice's responsibilities; and to review, evaluate and comment upon. the Office's ahnual report. The bill would authorize $500,000 for these purposes for each of the next three fiscal years. Qn september 6, 1979, the Subcommittee on Oceanography con- ducted a joint hearing on. H.R. 4417 with the Subcommittee on Na- tural Resources and Environment of the Committee on Science and Tecirnology. Testifying at this hearing were representatives from: NOAA, the Department of Comn'~erce; the State of Maryland; the Cornmonw~a1th of Virginia; a,r~d the Chesapeake Itesearch Consor- tium, Inc., , S S The NOAA witness supjorted the objectives of the bill,. bnt.stated his belief that it would be xmnecessary5 since similar efforts are already being performed by the federal government-specifically,.by EPA and NSF."The Maryland representative supported H.R. 4417-with sug- gested ainendments-~because the State believed, current federal .rc- ~earch performed by different agencies was not, coordinated, and as a result, inef~Ic1ent. The Commonwealth of Virginia's position was one of apprôvaJ of, the bill's intent, but `the testimony suggested that such research coordination be set up within existing structures. The witness also expressed a fear of "federal predominance" and felt the timing of PAGENO="0175" 171 the bill was wrong in light of EPA's Bay program and recent coopera- tive agreements between Maryland and Virginia. The Director of the Chesapeake Research Consortium, Inc., a non- profit corporation set up in 1972 by several Maryland and Virginia universities and the Smithsonian Institution, felt the office might be duplicative, and problematic for scientists in their current research projects. It would also, according to him, allow one agency to exert control over other agencies' programs. Further consideration of the bill may occur early in 1980. OvERsIGHT AcTIvITn~s Renewable Ocean Energy Sources-Ocean Thermal Energy Conver- sion (OTEC) The Subcommittee on Oceanography conducted two hearings on OTEC during 1979-on June21 and September 20. At its initial hearing on OTEC, the Subcommittee learned from the Department of Energy (DOE) witness that: (a) OTEC is one of the most promising new sources of energy in the future U.S. energy picture; (b) OTEC has the greatest potential of the ocean energy tech- nologies (over 90% of DOE's current budget for ocean energy systems goes to OTEC); (c) OTEC is the only direct solar technology that can provide baseload power and in fact, it could provide a "significant" per- centage of the baseload electrical demands in the southeastern and Gulf states; and (d) what is needed to make OTEC commercially, viable is an "extension of state-of-the-art technology with certain and impor- taut adaptations and innovations." OTEC technology would essentially make use of the temperature difference betweer~ warm surface waters and cold, deeper ocean waters to produce electrical or chemical energy. In areas with calm waters and the necessary shallow 30° Fahrenheit thermal gradient differential- such as U.S. coastal waters off Hawaii, Puerto Rico, the U.S. Virgin Islands, and parts of the Gulf-energy could be transmitted ashore through electric cables laid on the seabed. These would be stationary OTEC plants. Alternatively, grazing OTEC plantships could roam the seas following warm surface currents and producing energy through at-sea-energy-intensive manufacturing processes such as pro- duction of ammonia (NH3) or sthelting of aluminum. The Subcommittee learned that there are two basic types of OTEC systems: the open cycle and the closed cycle systems. The open cycle system uses seawater as the "Working fluid." First, the warm surface water is flash-evaporated under a partial vacuum within the OTEC plant. The resultant vapor then propels a turbine which generates electricity. Afterwards, the vapor is cooled in a condenser using cold water pumped up from the deeper waters. Because salt does not evap- orate with the water, the condensed vapor becomes fresh water, a us~hle by-product. The closed cycle system uses warm water drawn .from the surface and pumped through heat exchangers where the secondary "working PAGENO="0176" 172 fluid"-such as ammonia, propane, or freon-is vaporized. The high~ pressure vapor is then used to drive a turbine, which in turn generates electricity. From the turbine, exhaust vapor flows to a condenser where it returns to the liquid state as it is cooled by the cold water pumped up from the deeper ocean. On August 2, 1979, off the coast of Hawaii, an at-sea closed cycle OTEC pilot plant generated net electricity for the first time ever. This pilot plant, conceived and designed by the cooperative efforts of the State of Hawaii, the University of Hawaii, the Lockheed Missiles and Space Company, the Dillingharn Corporation, and Aif a Lava.l Ther- mal, generated 50 kilowatts of electricity, with a net of about 11 or 12 kilowatts beyond the electricity used to operate the plant. Witnesses from Lockheed and Dillingham explained the intricate details of this pilot plant-inciuding at least the partial surmounting of former problems such as: poor heat coefficient performance of t.he heat ex- changer; biofouling of the pipes; and pollutant problems. At the September 20 hearing, the Subcommittee also heard a repre- sentative of DEVCO International, Inc., discuss a recent cost-sharing proposal made to DOE by a consortimn of private U.S. companies willing to spend up to $40 million for design and construction of OTEC plants. The witnesses stressed that based on research data, although the~ capital costs of constructing an OTEC system would be greater than an advanced nuclear, coal, or oil plant, auì OTEC plant, once con- structed, would incur substantially lower operating costs-due to its free source of renewable energy. Several other industry and university witnesses expressed hopes that DOE would encoi.irage competitive desigu and operation con- tracts, and thereby develop a commercial OTEC industry both more quickly and more economically. Some even felt that if DOE were to continue at a "conservative" pace, OTEC's economic feasibility might he lost, and certainly other technologically advanced countries might surpass the U.S. in this field. The primary message given to the Subcommittee by industry and other witnesses was that two actions are necessary to realize the ex- tremely large potential of OTEC technology: prompt demonstration of at least one large-scale OTEC system. and passage of federal le.~is- lation providing a regulatory framework for the licensing and siting of commercial OTEC facilities. Chairma.ui Studds introduced Jegisla- tion t.o establish such a regulatory framework in the closing days of the 1st Session. Action on the bill will begin in early 1980. Renewab7e Ocean Energy Sonrees-Ocean Biomass Uon.tversion The Subcommittee on Oceanography held one hearing on ocean biomass conversion on September 26, 1979. Among the witnesses testi- fying at this hearing were representatives from: the Department of Energy (DOE); the Gas Research Institute; Woods Hole Oceano- graphic Institution; Neushul Maricult.ure, Inc.; and the State Univer- sity of New York. Ocean biornass conversion is a process by which marine algae (sea- weed) could be converted into met.hane~ methanol, or other fuels.. Energy derived from the infant land-based biomass conversion indus- PAGENO="0177" 173 try already provides roughly 2.5% of all U.S. energy supplies. Land- based conversion technologies like anaerobic digestion, fermentation, or pyrolysis would be the most likely conversion processes for ocean biomass, too, At the September 26 hearing, DOE representatives testified that energy from biomass conversion is "potentially the single most im- portant renewable solar energy contributor `between now `and 2000." However, increased demand for higher value products such as crops, paper, and lumber is likely to make current surplus land unavailable for biomass conversion long after the turn of the century. DOE's ~opinion therefore, is that aquatic biomass resources-both from the oceans and from fresh water-"offer the long-term potential for sup- plying large portions of U.S. energy demands." In other words, the land-based biomass conversion technology would seem to be a strong snort-term contributor `to our national energy needs, while ocean and fresh water biomass conversion could be an equally strong contributor towards our longer-term needs. The Director of the Gas Research Institute described for the Sub- committee the test farm it has developed in conjunction with the Gen- eral Electric Corporation, which is in charge of managing and en- gineering the project. They selected a large brown seawee~1, Cali- fornia Giant Kelp (Macrocystis pyrifera) as the test plant because it is one of the fastest growing plants in the world (two feet or more a day), and it has a high capacity for reproduction and regeneration. They connected 1000 of these spores to a submerged anchored metal trellis with successful results-largely because a diesel pump was drawing up nutrient-rich deeper water. However, a storm eventually washed away the plants and destroyed their protective covering, in- dicating that there are still very important problems to be solved be- fore the commerciwlization of this techno1o~y is attained. DOE p'ans to spend $3.5 `million in fisèal'year 1980 (`with~supplemental approØi- ations possible) on this project, specifically t~ verify biomass yield,, cost projections, and potential net gain in useful energy. The remaining witnesses expressed hopes that DOE would not lock itself into one species of algae or one major project, and they ex- plained the nature of their current and projected experiments. The Subcommittee was encouraged by the variety of species that seemed potentially useful and the competitive field emerging in attempts to commercialize this industry, which could play a significant part in our national energy picture early in the next century. Coaetal Zone Management Act 0/1972 a~ Amended The Coastal Zone Management Act (OZMA) of 19'T2 (Pnblic Law 92-583) is the single federal law which `establishes a national policy and program for th,,e management, beneficial use, protection and devel- opment of the land and water resources of the Nation's coastal `zones. Because major portions of the CZMA expire at the end `of fiscal year 1980, the Subcommittee on Oceanography will be, faced with many difficult decisions concerning reauthorization levels and amendments. Th order to fully and faiHy evaluate the CZMA, Chairman Studds hnrn'hed a m'Ilor oversight effort which is aimed at soliciting the views of all'those who have participated in coastal zoile management. 56-410-80------12 PAGENO="0178" 174 Since its passage in 197~, the CZMA has undergone'major revisions. Following is a brief history of the amendments to the CZMA. as they have occurred. 93d Congress H.R. 16215, the Coastal Zone Management Act Amendments of 1974, became public law (P.L. 93-612) on January 2, 1975. These amend- ments contained no major substantive changes in the Act, but did clar- ify three specific sections. Section 305 was amended to provide for more flexibility in the allocation of administrative grants to coastal states. Section 306 was changed to increase the authorization for state man- agement program development grants while section 315 was amended to extend the authorizations for estuarine sanctuaries grants. 94th Congress The' CZMA. Amendments of 1976 (P.L. 94-370) created significant changes in the Act. These amendments were viewed as necessary be- cause of many new issues which had arisen in 4 short years. Since the enactment of the Coastal Zone Management Act of 1972, the call for a greater degree of energy self-sufficiency was emphasized by the famed Arab oil embargo. Energy independence became an important national `priority which greatly influenced the coasts of the nation. This influ- ence was expressed through the demand for more offshore and gas ac- tivity. the desire to site new energy facilities in coastal areas and the need for deepwater ports. The original Act was considered a sound piece of legislation, but the Act did not provide for the problems that states were to encounter in view of the energy-related activity in the coastal zone. Several legislative proposals were introduced in Congress for the purpose of amending the CZMA so that it would more adequately ad- dress the many new issues. The problem of onshore. impact was per- ceiv~d as the th~jor issue rel~ting to the acceleration of OCS oil and gas drilling Other major policy issues involved separating OCS ex ploration from development activities, alternative leasing systems, op- ei~ating practices for safety and environmental protection and the handling of industry information by Federal authorities. On July 26, 1976 the President signed into law S. 586, the CZM Act Amendments of 1976. The amendments were intended ~ encourage `new or ~xpanded oil and gas production in an orderly' manner from the OCS by providing for financial. assist~nce to meet state and local needs resulting from new energy activity. This assistance is provided in `the form of grants, loans and' loan guarantees. `The assistance is available to states receiving or aMici'patingimpacts in their co~stal zones from the exploration for or development and production of energy resources, or from the location, construction, expansion, or operation of any ma- jor energy facility. 95th Congress The Outer Continental. Shelf Lands Act Amendments of `1978. `(OCSLAA). passed the 95th Congress in the second session. Title V of this Act contained' amendments .to the CZMA. Section 501 of the `OSCLAA made.several.~hanges in the CEIP formula grant provisions. These changes included amending the formula used to calculate state PAGENO="0179" 175 grant awards, incorporation of a floor and ceiling in formula grant awards, changing grant eligibility and uses, and changing the timing and,distribution of formula grants. Section 502 of the OCSLAA changed the annual formula grant au- thorization from $50 million to a yearly level of $130 million. Section 503 of the OCSLAA added a new provision to section 308(c) of the CZMA. This new provision, section 308(c) (2), labeled OCS State Participation Grants, was created to enable states to carry out their responsibilities under the amended OCSLAA. Section 308(c) (2) grants were intended to financially assist states in the administrative, policy, operational and managerial aspects of participating in the Fed~ eral leasing program. Finally, section 501 of the OCSLAA modified the OCS Federal consistency provisions of the CZMA by encouraging expeditious state concurrence on an OCS exploration, development, or production plan consistency certification. On October 9 and 10 the Subcommittee on Oceanography began its coastal zone management oversight effort by conducting two days of hearings in Washington. These hearings were designed to solicit the views of those federal agencies and national interest groups which have been involved in the implementation of the CZMA. Of special interest to the Subcommittee was the testimony of Mr. Robert IV. Knecht, Associate Administrator for the Coastal Zone Management Program, who testified at length about the successes and f~iilures of the CZM program. Mr. Knecht explained the progress ivhich the CZM programs had made and suggested several changes which should be made during reauthorization. He testified that these, changes would be specifically detailed in the administration's CZM bill, which he anticipated would be submitted to the Congress in mid- November. Testimony from other Federal agencies revolved around tWo basic themes the need for Federal agency participatiou in determining national interests, and the federal eori~istency provisions ot the CZMA. Similarly those witnesses representing industry, energ~r, or develon :ment interests also cited the federal consistency provisions of the CZMA as an area of the Act which needed legislative attentIon. ~These witnesses als~ explained that the national interest provisions of the CZMA requiredciarificati.on so as to highlight the need for energy development in the coastal zone. Those ~Itn~s~es vepmsentin~ ~nvironmental points of view testified -that the CZM program has failed to protect key coastal resOurces froth hhwise development. Further, they explained that cha~igés in the CZM Act would be necessary for `adequate envii~onmental pro- tection of our coastal areas Suggested changes included makino~ the CZM pro~ram mandatory, clarifying the primary conservation thrust of the CZMA,and establishing strict criteria for State CZM programs. On October 31. the Subcommittee on Oceanograp~hy concluciect its Washington CZM oversight hearings. Essen~i~ily, this hearing was scheduled to allow those Federal agencies aud natIon~l interest groups which cOuld not participate in the earlier hearings to express their `view oh the CZM program. Chairman Studds expressed special in- terest in the testimony of Ms. Gloria Jimenéz, Associate Director of ;the Federal Flood Insurance Administration. In her testimony PAGENO="0180" 176 Ms. Jimenez explained several linkages between CZM and the Flood Insurance Program which could potentially lead to more effective coastal management. She also urged that CZM programs address the uses of or impacts on flood plains in order to minimize flood damages. Another witness testified about the importance of barrier islands and their special relationship to coastal areas. While requesting that CZM help identify undeveloped barrier islands and assist in helping states. define permissible uses of these islands, this witness recognized that appropriations for Section 315(2) of the CZMA would be necessary in order to successfully address these problems. On November 17, the Subcommittee on Oceanography began its regional oversight hearing process. In what was the first in a series of hearings to be held in various coastal regions throughout the coun- try, the Subcommittee solicited the views of those states and interest groups in the Gulf Coast area. States invited to participate in the New Orleans hearing included Georgia, Florida, Mississippi, Ala- bama, Louisiana, and Texas-as well as Puerto Rico and the U.S. Vir- gin Islands. In all, 24 witnesses testified, representing the views of state and local governments, industry, environmentalists, port au- thorities, academia, and citi~en groups. Becauseso many states were represented, testimony centered around' individual state programs, their successes and failures. The Texas and Louisiana Programs drew the greatest attention. Overall, the Sub- committee greatly valued the various perspectives and suggestions presented in the testimony, especially those which pertained to CZM State and Federal relationships. it is anticipated that some of these suggestions will be translated into proposed amendments tO the CZM Act. Pive additional regional oversight hearings will be held' early in the 2nd Session to hear views on implementation and provisions of the Act in other coastal regions of the United States. Law of the Sea Conference O'cer8ight The Subcommittee on Oceanography continued its oversight of the negotiations at the Third United Nations Conference on the Law of the Sea. The Conference, preparations for which began in 1969, is writing a comprehensive international treaty which will codify and define international law affecting `the oceans for many years to come. The oversight activities of the Subcommittee included receiving a status report from Ambassador Elliot L. Richardson, head of the U.S. delegation at the Conference, at .an eversight hearing on February 27, 1979, staff attendance at meetings of the Law of the Sea Advisory Committee, and consultations with representatives of the Department of State at various times during the year.' A description of the early history and negotiations at the lAw' of the Sea Conference is contained in the Activities Report of this Com- mittee for the 95th Congress (House Report 95-1834). During 1979 two formal sessions of the. Conference were' held-the first early in the year, and~the.second from July 16 to August 24. At the end of the August session, Ambassador' Richardson reported substantial progress toward agreement on most outstanding issues, and' that the forward PAGENO="0181" 177 momentum generated now seemed sufficient to enable the Conference to resolve the difficult remaining issues next year in a generally satis- factory manner. Two formal sessions of the Conference are scheduled for 1980: the first in New York beginning February 27, and the second in Geneva beginning July 28. Most of the remaining difficult issues outstanding relate to deep seabed mining provisions, although the gaps between parties were significantly narrowed on many of those issues during 1979. The other substantive matters which need to be resolved from the United States' point of view include finalization of amendments on marine scientific research and marine mammals, technical clarification of the con- tinental shelf provisions, recognition that bilateral boundary dispute settlement and liberation movement objectives cannot be included in a treaty which is to be widely ratified, preparation of final clauses that protect the substantive balance of the treaty and promote its earliest and most widespread acceptance, and adoption of procedures for vot- ing on a draft treaty which will not jeopardize the many major trade- `offs and compromises which have been incorporated into the text during the years of complicated negOtiations. The Subcommittee will continue its oversight of the Conference durmg the 2nd Session. 1981 Statutory Deadline on Ocean Dumqi~1ng of Sewage Sludge On June 27, 1979 the Subcommittee on Oceanography and the Sub- committee on Fisheries and Wildlife Conservation and the Environ- ment, which share jurisdiction over the Marine Protection, Research, and Sanctuaries Act, held an oyersight hearing on the effects of the December 31, 1981 statutory deadline for the cessation of all ocean dumping of sewage sludge which may be,harmful. The hearing was held because it was becoming increasingly apparent that while some municipalities had stopped ocean dumpitig of sewage sludge or would clearly be able to do so by the statutory deadline, other municipalities were facing severe and controversial problems in their attempts to comply with the deadline. Nine of the ten major ocean dumping municipalities are in New York and New Jersey, and dump sewage sludge into the heavily polluted area known as the New York Bight. New York City is responsible for 46 percent of the sewage sludge which is dumped into the New York Bight area. Witnesses heard by the Subcommittees included representatives of the General Accounting Office, National Oceanic and Atmospheric Administration, and ~Environmental Protection Agency; the mayors of New York City and Ocean City, Maryland; representatives of sev- eral New Jersey communities; and a representative of the National Wildlife Federation. Mayor Koch of New York City testified that if the law were not changed, he would comply with it, even if the City had to rent barges to store sewage sludge until other means of disposal were ready. The Mayor went on to say, however, that he believes the 1~81 statutory deadline forces an artificial set of priorities on the City which will not result in the most rational allocation of resources to reduce environ- mental pollution. PAGENO="0182" 178 The Subcommittees were informed at the hearing that much of the pollution entering the New York Bight area is the result of agricul- tural runoff and other pollution from the Hudson and Raritan Rivers7 raw sewage discharged from sewer overflows during heavy rains in. the New York metropolitan area, and raw sewage being discharged. by the City because construction of two needed treatment plants has been delayed. The ocean dumping of sewage sludge was estimated to account for about 5 to 15 percent of the pollutants entering the New York Bight area. Subsequent to the hearing, New York City entered into discussions' with the Environmental Protection Agency in an effort to design a package of actions which would clean up more pollution for which the City is responsible than would be cleaned up `by strict enforcement of the 1981 statutory deadline on ocean dumping of sewage sludge. If" such a package is agreed upon, the City hopes that EPA will support a relaxation of the statutory deadline either by consent decree in a federal court, or by insertion of a'ppropriate waiver authority into the law by the Congress. Several of the representatives of New Jersey communities which. are currently dumping sewage sludge into the' ocean urged the Sub- committees to relax the statutory deadline as it applies to them. There" was no `sentiment expressed by members of the Subcommittees in favor of a change in the deadline unless it is accompanied by the type of' overall pollution reduction package discussed above in connection with New York City. Those municipalities which are not able to propose an overall package which would reduce pollution by more than it would be reduced by cessation of their ocean dumping activities should' not delay their compliance efforts in hopes of legislative relief. Marine Ecosystems Analysis (MESA) Symposium on Ecological' Effects of Environmental Stress The MESA New York Bight Project Office in conjunction with the~ New York Sea Grant Institute in the New Jersey Marine Science Consortium and the Estuarine Research Foundation cosponsored a symposium entitled: "Ecological Effects of Environmental Stress'7 during June 10-15, 1979, in New York City. Four Committee staff members ~t~nc1ed and.participat~d in.the symposium during its final two days when much of the information generated prior to and during `the symposium, was being summarized. The symposium participants consisted of both environmental scien- tists who have done research on the effects of contaminants in the marine environment in the N'ew York Btight and elsewhere, and en- vironmental managers who must make decisions based upon this scientific information. Approximately 50 scientists were invited to participate in the earlier workshops, whach were aimed at summarizing pertinent data and interpretations of this data regarding pollutant effects on the ecosystems of the Hudson/Raritan estuary and the New York Bight. The later phase of the symnosium, primarily the last two days, was aimed at evaluating this information in light of current technical, economic, and political considerations. Several environ- mental managers, engineers, planners, and other regulatory officials participated in these discussions, along with the Committee staff mem- PAGENO="0183" 179 bers. The topics of the individual workshops ai~d their respecti~ chairmen include the following: TABLE 1.-Research-oriented workshops Title Chairman Effects of Pollutants on Fishes C. J. Sindermann, NOAA/National M~- rine Fisheries Service, Sandy Hook Laboratory. Effects of Pollutants on Plankton! A. McErlean, University of Maryland. Neuston. Effects of Pollutants on Benthos M. P. Carricker, University of Delaware.. Effects of Nutrients and Carbon Load- A. J. Mearns, Southern California Coast- jugs on Communities and Ecosys- al Water Research Project. tems. Effects of Toxic Substances D. Wolfe, NOAA/Outer Continental Shelf Environmental Assessment Program. TABLE 2.-Management-orieflte~f workshops Title Chairman Industrial Wastes A. Mytelka, Interstate Sanitation Corn- mission. Domestic Wastes C. Gunnerson, NOAA/Environmental Re-~ search Laboratories. Dredged Materials R. Gordon, Yale University. Non-Point Sources T. Kneip, New York University, Institute of Environmental Medicine. The summary report of the management panel on domestic or municipal waste discharges was of particular interest due to con- troversy over the provision of existing law which requires the cessation of the ocean dumping of harmful sewage sludge by December 31, 1981. This panel concluded that some of the pollution effects resulting from municipal waste disposal in the New York Bight included, among other things, nitrogen enrichment, oxygen depletion, short-term fish kills, red tides, fin rot, damaged benthos, damaged beaches, and in some instance damage to commercial and recreational fisheries. Although it was difficult to determine precisely to what extent the ocean dump- ing of harmful materials caused these effects, NOAA has estimated that 5 to 15 percent of the overall amount of contaminants entering the New York Bight is attributable to sewage ~ludge dumping. There are many other sources of harmful materials including heavy materials such as cadmium and mercury and synthetic organics such as PCB~s, which result from runoff in the Raritan/Hudson estuary, as well as dredging activities. Another problem which was pointed out by the Domestic Waste Panel is that roughly 350 million gallons of raw sewage from Man- hattan, Brooklyn, and the Bronx, is discharged daily into the Hudson River or its connecting waterways. Only 85 percent of the New York Metropolitan Area has sewer systems that result in either primary or secondary treatment of. its w~aste waters, The Panel on Domestic Waste also concluded that, while elimination of sludge dumping is a readily attainable step in controlling pollution of the Bight, uncertainties as to its cost-effectiveness relative to those of alternatives, have led to proposals for extending the timing or rate PAGENO="0184" 180 of compliance with the curtailment of ocean dumping. Although the management panel recommended some type of phased reduction of ocean dumping of sewage sludge, its recommendations did not go much further except to point out how such phased reduction might be viewed from a number of different perspectives including the following: (1) Regulatory agencies would take a negative view of proposed relaxation of the deadline because nonenforcement would penalize those who previously had complied with the same regulations so * equity would be lost; feasible and environmentally-acceptable land-based alternatives to ocean dumping exist; the marine envi- ronment would continue to be impacted; and valuable resources, capable of being recycled, would continue to be wasted. (2) Conservationist and resource management interests are also negative, insisting that ecological impacts of sludge dumping are too elusive and too dangerous to take chances with. (3) The scientific view of phased reductions notes that the con- tribution of sludge to the New York Bight pollution is relatively small compared to other inputs; that significant recovery of other damaged ecosystems has occurred in from one to five years, and that recovery of the Bight from sludge dumping may take a longer period of time because of other inputs. (4) The technological view of graduated reductions is positive since they permit application of the National Academy of Sci- ence's approach considering the assimulative capacity of air, land and water to sludge management alternatives and the operational flexibility and cost savings which this allows. Scheduling and phasing of final design and' specifications, equipment delivery, and `construction would be more efficient. Land use and allocation of space to waste disposal would be improved, and finally the risk of * selecting a wrong technology would be minimized. The symposium concluded on June 15, in a public session, with a summary by each of the `panels, and comments by Congressional staff members from the Merchant Marine and Fisheries Committee and. the Science and Technology Committee. Woods Hole Oceanographic Institution-Briefing (August e, 1979) On August 6, Chairman Studds and staff members of the Oceanog- raph'~'- Subcommittee visited Woods Hole Oceanographic Institution (WHOI) for a briefing on the Institution's recent activities and re- search. WHOI Director, Dr. Steele, welcomed the Subcommittee and began the briefing by discussing .the need ,f~r coordination between `those who make marine, policy and those who attempt to verify the `stippositions on which marine policy is based. Dr. `Steele, stressed that marine research needs `to be' properly directed towards those areas -where'serious `policy questions remained unresolved. In his request for coordination Dr. Steele emphasized that marine research must be avail- able and applicable to those unresolved policy areas in order to con- struct wise and ratiOnal public policy. Following `the initial discussion, the Subcommittee attended four separate bri~fings and visited selected WHOI facilities. `The first of these' briefings focused on ocean current measure~nents and buoy `de- PAGENO="0185" ~1~81 velopment, deployment, and related research. The Subcommittee was given a full tour of the WHOI buoy laboratory where experiments about ocean currents throughout the world originate. The next discus- sion centered around marine policy questions, including Law of the Sea issues, fisheries, and related science research policy, and their rela- tionship to research institutions like WHOI. The third briefing began with a complete tour of the WHOI envi- ronmental systems lab. During this tour the Subcommittee examined research experiments being conducted by Dr. John Farrington, Dr. Judith Capuzzo, and Dr. John Ryther, which related to biomass con- version, and the problems of ocean waste disposal and hydrocarbon pollution. Finally, the Subcommittee viewed recent film taken by the WHOI submersible "ALVIN" on its research venture to explore ocean vents in the East Pacific Rise. Discussions followed concerning the WHOI study of hydrothermal vents and its contribution to our understand- ing of ocean dynamics. Mexican Oil Spill Investigation As part of the Subcommittee on Oceanography's jurisdiction over ocean pollution problems, the Subcommittee participated actively in the investigation of events leading to and following the massive oil spill resulting from the blowout of the Petroleos Mexicanos (PEMEX) well, IXTOC I, in the Bay of Campeche off Mexico. Sub- committee staff participated in a Coast Guard overflight to survey the well site and the extent of resulting oil in the Gulf of Mexico on July 14, 1979, and Subcommittee members and staff participated in the oversight hearing held jointly in Corpus Christi, Texas on Septem- ber 8 and 9 by the Committee on Merchant Marine and Fisheries and the Committee on Public Works and Transportation. A complete description of events and facts learned during the over- sight investigations is contained in the section of this report describ- ing the oversight activities of the full Committee on Merchant MarineS and Fisheries. The Oceanography Subcommittee staff continues to monitor the situation, including particularly the efforts of the Na- tional Oceanic and Atmospheric Administration to conduct a full and thorough assessment of the weathering of the oil and the impacts of the Oil spill on Texas and the Gulf of Mexico. National Oceanic and Atmospheric Administration Organic Act A number of persons involved in oceans and atmospheric affairs in the United States have suggested that the mission and authorities of the National Oceanic and Atmospheric Administration (NOAA), whichwas created in the Department of Commerce by Executive Or- der in 1970, should be spelled out in legislation. Those who recommend passage of such a NOAA Organic Act say that it would, by spelling out NOAA's missions and authorities, provide a better yardstick than the existing Executive Order against which to measure the perform- ance of the agency. They point out that, in addition, a NOAA Organic Act should require annual authorization of appropriations for opera- tional. expenditures of the agency which is not now required. The au- thorizing committees of the House which have jurisdiction over PAGENO="0186" `182 NOAA activities (the Committee on Merchant Marine and Fisheries and the Committee on Science and Technology) now authorize appro- priations only for specific programs which were created by law. The vast majority of ex2enditures by NOAA are: not currently required to be authori~ed befthe `fund~ are appropriated, and therefore their budgets escape the detailed scrutiny of the authorizing committees. Because of the Oceanography Subcommittee's jurisdiction over mat- ters relating to the National Oceanic and Atmospheric Administra- tion,, Subcommittee staff members attended several meetings and dis- ~ussions during the 1st Session on the subject of a NOAA Organic Act, and reviewed several possible drafts of such a bill. H.R. 5347, which was introduced in September by Mr. Breaux, Mr. Murphy of New York,: and Mr. Forsythe, was referred jointly to the Committee on Merchant Marine and Fisheries and the Committee on Science and Technology. Within the Committee on Merchant Marine and Fish- eries, the bill was referred jointly to the Subcommittee on Ocean- ography and the Subcommittee on Fisheries and Wildlife Conserva- tion and the Environment. No hearings were held on the bill during the 1st Session. SUECOMMIrrEE ON PANAMA CANAL Total bills referred to subcommittee 19 Bills considered 9 Hearings held (days) 14 Markup sessions (days) 4 site vIsits (days) 6 The First Session of the 96th Congress was a time of intense legis- lative activity for the Panama Canal Subcommittee due to the con- sideration of legislation tO provide for operation of the Panama Canal under the treaty arrangement with Panama approved in 1978. The great bulk of the Subcommittee's activity centered around the numer- mis issues in that legislation and the advancement of the bill H.R. 111, the Panama Canal `Act of 1979. now Public Law 96-70, which provides the charter for the operation of the Canal to the year 2000. In addition to the charter legislation for the Panama Canal operation, the Sub- committee also culminated consideration of important ecological con- cerns with the advancement of S. 817, now Public Law 96-89, which increases the limit on authorized apprOpriations for the Canal Zone Biological Area. Finally, the Subcommittee dealt with H.R. 5269, the first annual authorization bill for Panama Canal operations under the Panama Canal Act of 1979. Tn view of the critical role, that H.Th 111, the Panama Canal Act of 1979, will play in the operation of, the Canal in the next 40 years, a particularly detailed history of the legislation is provided' in this report. LEGISLATIVE ACTIVITIES Charter Leqis7atio'n for Panama Cara7 Under New T~re,atieg (H.!?. 111, H.!?. 454, H.!?. .1511, H.!?~ 1716, 11.1?. 1958, H.!?. ~522) Nece$sity for Legi~7at~on.-Because of the approval of th~ new treaty relationship with Panama, the impression prevailed in some segments that a~ol~ for the' TTou~e cf R~re t:atives'dn `the formula- tion of a new regime to operate the Canal had been precluded, and PAGENO="0187" 183 ~that the Congress would not have any substantial dealings with the operation of the Canal henceforth. From the outset the Subcommittee ~and the Full Committee, on Merchant Marine and Fisheries felt the absolute necessity to correct this misimpression, an endeavor `which was substantially aided'by the fact that a' major principle of the legislative alternative which came to be favored by the majority of the Com- mittee on Merchant Marine and Fisheries Committee and Subcom- `inittee on Panal `Canal was one emphasizing the involvement and control of the Congress. Under the Panama, Canal Treaty and the Neutrality Treaty, the United States agreed to undertake certain responsibilities in order to exercise concurrent rights. Primary control over the operation and defense of the Panama Canal to the year 2000 was from the effective date of the treaty both a right and a responsibility with many ramifi- cations. While an international role for the United States in the con- text of Canal operation had been anticipated by the approval of the `treaty arrangement and the exchange of instruments of ratification, nevertheless the execution of United States responsibilities could not have been accomplished without the exercise by Congress of the com- merce, appropriation, and property powers set out in the Constitution. `Moreover, just as deliberations of the United States Senate aided in clarification and strengthening of many of the treaty provisions in `order to protect the nation's interests, the role provided for the Con- gress by the Constitution permitted the enactment of legislation to clari'f~ provisions of the treaties and protect U.S. interests in whatever manner the' Congress believed to be conducive to the public good. The seriousness of the situation reflecting a need for legislation to provide for Canal operation was evident when the ramifications of the absence of such legislation were considered. It was recognized that under the terms of the Panama Canal Treaty, on October 1. 1979 when the treaty entered into force, the provisions of the treaty by their own terms and without followup legislation re- `suited in a number of grave and far-reaching consequences including the following: All prior treaties with Panama authorizing operation of the Canal would be abrogated; The U.S. Government agencies responsible for canal operation ,before October 1 would be prohibited from continuing to function; The United States would have the right and the obligation to continue to operate the Canal, through a Commission established by Congress, until the year 2000 but with a treaty that left all arrangements for that operation to, the law enacted by Congress; The United States would owe to Panama an annual payment aggregating about $75 million a year at estimated levels of traffic. ` ` , ` It was, further recognized that on October `1,, in the absence of legislation madenecessary by the treaty: ` The authority theretofore in, effect for establishing and collect- ing tolls for use of the canal (about $400 million a year) would be unenforceable; ` ,`, ` Fifteen thousand U~S. Government employees engaged in oper- ation of the canal would become unemployed because their employ~ ing agencies would have gone out of business; PAGENO="0188" 184 The Panama Railroad and the ports at either end of the ça~ial,. with other real property of the United States, would `~b~ trans- ferred to Panama by the Executive regardless of Congr~ssiona1 views (the canal and all remaining U.S. prpperty in. Panama would be transferred to Panama without restriction on or before December 31, 1999); There would be no provision establishing the Panama Canal Commission in the Executive branch of the U.S. Government. or' for oversight by the Congress; and The taxpayers of the United States would be forced to assume treaty implementing costs in the billions of dollars. In speaking on the issue raised by the relationship between the' Panama Canal Treaty and followup legislation the Chairman of the' Committee on Merchant Marine and Fisheries, the Honorable John M.. Murphy, and other members,~ repeatedly emphasized that the basic issue before the Congress in considering such legislation was not~ whether the Panama Canal Treaty was wise, or well-drawn, or even in the best interests of the United States. Those questions became immaterial when the treaty was ratified. The issue involved, in con- sideration of the bill was, rather, how best to protect the interests of the United States and provide for operation of the canal until the year 2000-_the year established by the treaty for the total withdrawal of the United `States from Panama. Administration versus tJom,mjittee Legislative Altermatives.-Dur- ing the early period of consideration of legislation to operate the Canal under the 1977 treaty arrangement, two major alternative legis- lative packages were presented. Drafts of the Executive branch alter- native had been published in the Congressional Record as early as the period of the treaty debates in the Senate, and a summary of the provisions of the Executive draft are contained in the previous Activities Report of the Committee on Merchant Marine and Fisheries (House Report No. 95-1834, at pp. 312-314). Work on the alternative Committee-based legislation was commenced when the text of the treaties became available in 1977 and several drafts were readied for consideration prior to introduction. The Committee alternative, H.R. 111, was introduced on January 15, 1979 by John M. Murphy, Chairman of the Committee on Merchant Marine and Fisheries, and was initially co-sponsored by Carroll Hub- bard, Chairman of the Subcommittee on the Panama Canal, and E (Kika) de Ia Garza, a member of the Committee on Merchant Marine and Fisheries. Robert Bauman, Ranking Minority Member of the' Panama Canal Subcommittee, later became a co-sponsor of H.R. 111. After introduction, H.R. 111 then was referred jointly to the Commit- tees on Merchant Marine and Fisheries, Post Office and Civil Service, Judiciary, and International Relations (now Foreign Affairs). The Executive branch alternative legislation, H.R. 1716, introduced by Chairmen Murphy, Zabloeld and Rodino on January 31. 1979, was the result of the formal Executive eomm~unication dispatched to the Congress on January 24 (House Document 96-39' (Exec. Corn. 464) Each of the four committees the jurisdiction of which was touched by the legislation were referred a title of the bill (Title IT-Merchant Ma- rine ,and Fisheries; Title I-Foreign Affairs; Title Ill-Post Office PAGENO="0189" 185 and Civil Service; Title TV-Judiciary) and the introciuètory portion of the bill and Title. V of the bill were concurrently referred to all four committees. Although there were a number of common approaches in H.R. 111, the Committee alternative, known as the "Murphy bill", and E1.R. 1716, the Administration `inith~tive, the basiè thrust of the legislative pro- posals differed considerably in the form that the government agency known as the Panama Canal Commission was to take, and the degree of control allocated tO the Congress in the operation of the Canal. The principal features of H.IR. 111 as introduced included: 1. The provision for operation of the canal by a noncorporate agency instead of continuing the Panama Canal Company under another name; 2. The return to the requirement that revenues of the canal be paid into the Treasury and that expenditures be made pursuant to annual appropriations; 3'. The centralization of administrative authority and responsi- bility in the Secretary of Defense; and 4. Provision for Persidential appointment and Senate confirma- tion of the key officials of the agency and members of the various policymaking bodies provided for by the treaty. }LR. 1716 differed in considerable degree from these principles in }LR.' 111. TT.R. 1716, in contrast to the regular authorization and. appropriations proces~ established in H.R. 111, established.the Pan- ama Canal Commission as a wholly-owned U.S.' government corpora- tion. Under `this particular form of agency the Commission would hate submitted a budget program each year for review, by the Con- gress and enactment of authority for appropriations. Also in sharp cortr~ast to `H.R. 111 was the treatment of the ap- pnintmei~t of'k~y offi~ial~ ~eTated to the Canal. Under 1~.R. 1716, none of' the Presidëtiti~1 appoiniments to keep post~ associated with the Canal were made subTect to Senate confirmatjon Such posts included all supervisory ~Bóard members, the `Administrator, Deputy Admin- istrator, and U.S. members of the Consultative Committee and Joint Commission `on the Environment. Also,, under IT.R. 111 four of the fiv~ members' of the, Consultative Committee were to be appointed by `the Congress `and all `actions of the Committee reviewed by the Congress. ` ` . The two alternative pieces of legislation also differed in their actual provisions' on the role of various Executive officials. While, as indi- cated, `}T.R. 111 made the Panama Canal Commission subject to the direction of the Secretary ,of Defense, H.R. 1716 continued the "stoç~k- holder" concept inherent in the government corporat,e concept. For many years the stockholder'has been the Secretary' of the Army or his designee~ Thus, under either approach, a Department of flefense would have exercised an oversight function over the Canal operation, but no strong role or statutory role was provided in H.R. 1716., Hearings on Legislation To Operate the Canal Under the Panema Canal Treaty.-The Subcom~.ittee Chairman, Mr~ Hubbard of Ken- tucky, believed' that the legislation to operate the Canal under the 1977 treaty would be one of the major issues to ~ace the first session of the ~96th Congress. MOreover, he believed that there were a whole host and PAGENO="0190" 186 a wide range of issues in the legislation which required detailed under- standing on the part of Subcommittee Members. He also perceived there was widespread public interest in the question of treaty imple- mentation, as evidenced by the mail sent to the Subcommittee and to many Members of the Subcommittee. For all of these reasons, Chair- man Hubbard decided that the Subcommittee should have extensive hearings on the legislation, should hear opinions from every relevant perspective, and should hear from as many witnesses as possible. What resulted from the Subcommittee effort to explore the unique circumstances and provisions of the legislation were nine days of hear~ ings with some 74 witnesses, including Members of Congress; repre- ~entatives of the executive branch agencies; representatives of the General Accounting Office and the Smithsonian Institution; numer- ous Canal Zone civic and employee organizations; legal experts; en- vironmentalists; and interested public citizens. Analysis of the legislation was also aided by the following studies done at the Subcommittee's request and incorporated into the record of the hearings: (1) Environmental I$8ues Affecting the Pananw] Canal, a working paper prepared by the Office of Technology Assess- ment's Ocean Program (see pp. 974-1167 of Canal Operation Under 1977 Treaty-Part 2, Hearings of the Subcommittee on the Panama Canal of the Committee on Merchant Marine and Fisheries, Ninety- Sixth ~1o~igress, Serial No. 96-2, and hereinafter for purposes of brev.~ ity reference as "Treaty Hearings-Part 2"); (2) "Report of the Congressional Budget Office on a Study of Panama Canal Tolls and. Traffic Levels," contained in a December 19, 1~78, letter of the Con- gressional Budget Office to the Honorable Robert L. Leggett, Acting Chairman, Panama Canal Subcommittee (see pp. 1500-1513, Treaty Hearings-Part 2) (3) "Effect of the Panama Canal Treaties Upon Provisions of the United States Code," a paper dated January 94, 1979, by Christine P. Benagh, American Law Division, Congressional Re- search Service (see pp. 1197-1258, Treaty Hearings-Part 2); and (4) "Panama Canal Treaty-Panamanian Related and Implementing Leg- islation" answers prepared by Armando E. Gonzalez, Assistant to the Chief, and Rubens M~edina, Chief, Hispanic Law Division, Library of Congress, in response to questions posed by Chairman John M. Murphy of the Committee on Merchant Marine and Fisheries (see pp. 1261- 1290, Treaty Hearings-Part 2). In addition to these ~aluable studies in the record of hearings several other valuable papers were done for the Subcommittee and Committee on Merchant Marine and Fisheries by the American Law Division, Library of Congress, and are con- tained in the files of the Subcommittee. The Subcommittee in addition to its emphasis on prepared studies, also forwarded extensive written questions to each executive branch witness prior to the appearance of that agency representative before the Subcommittee. The written questions, and the valuable responses provided, are contained in the printed ~bearings of th~ Subcommittee, Serial Numbers 96~-1 and 96-2, Canal Operation Under 7977 Tre~aty- Part 1 and Part 2. On February 14 the Subcommittee heard Members of Congress in its opening day of hearings on H.R. 111, H.R. 454, H.R. 15th H.R. 1716, and H.R. 1958 (H.R. 2522 was later introduced and added as PAGENO="0191" 187 a bill for hearings). Subcommittee Chairman Hubbard and Full Com~ mittee `Chairman Murphy and Ranking Minority Member of the Sub- committee Bauman presented lengthy statements at the opening of `the hearings. Chairman Murphy compared the merits of H.R. 111 and H.R. 1716 and asked for the members' attention to the two bills as the hearings developed. The Honorable George Hansen, Republican Representative from the State of Idaho, was the first witness on February 14. In his testimony Mr. Hansen emphasized the necessity for Congress to exercise ap- proval over transfers of property and funding for the Canal treaties. He recalled the promises of the Executive to execute a treaty that would not be costly to the U.S. taxpayer. He discussed the relation- ship between big banks and the debt financing of the Government of Panama. Finally, he extolled the advantages of H.R. 1958, which he had introduced as taxpayer relief legislation. The questioning of Mr. Hansen by Subcommittee Members focused among other things on the issues of the level of tolls that would be generated by H.R. 1958. The Honorable Lawrence P. McDonald, a Democratic Representa- tive from the State of Georgia, followed Mr. Hansen. In his state- ment and answers to questions Mr. McDonald criticized the court deci - sion on the issue of disposition of property and the funding incident to the property treaties. He indicated that the Panama policy of the United States was in his view part of a policy of retreat. The Honorable Steven D. Symms, Republican Representative from the State of Idaho, was the final witness to present oral testimony on February 1.. Mr. Symms indicated his opposition to both H.R. 111 and H.R. 1716 but indicated that H.R. 111 was the preferable of the two approaches if legislation had to be accepted. Members of Congress presenting statements for the record of the February 14 hearing were Mr. Flood of Pennsylvania, who stressed continu~4 so~re~ign cotitrol of the Canal Zone~, Mr Hall of Texas, who emphasized t~r~aty cOsts `to' the American taxpayer and the pre- rogatives of the Congress to dispose of U.S. property Dr. Paul of Texas, who sttbmitted a statement wholly devoted to the constitutional issue of transfer of property; Mr. Wampler of Virginia, who urged rejection of the legislation; andMr. Rinaldo, who also urged r~jection. On February 15 the Subcommittee heard from its first witnesses from the Executive branch. The Hon. Warren Christopher, Deputy Secretary of State, pro- vided the Subcommittee in a brief statement, with general background for treaty implementing legislation, and emphasized the importance of its rapid `consideration and enactment. Chairman Murphy assured Mr. Christopher that the Committee on Merchant Marine and Fisher- ies would move as rapidly as possible. The Deputy Secretary was questioned extensively during his appearance. Ambassador David H. Popper, special Representative of, the Sec- retary of State for Panama Treaty~ Affairs, élth~idated some overall objectives he felt the legislation must accomplish, and brought to the Subcommittee's attention his view of the advantages of H.R~ 1716 over H.R. 111, with special emphasis on the issue of form of agency. Herbert J. Hansell, Legal Advisor, Department of State, focused on the structure of H.R. 1716 and the assumptions that had formed the PAGENO="0192" 188 basis for its drafting. Mr. Hansell also compared the bills before the Subcommittee. Questioning of Mr. Hanseil by the Subcommittee covered many issues, including the constitutional issue of transfer of property. The next witness on February 15 was the Honorable Charles W. Duncan, Jr., Deputy Secretary of Defense, whO was accompanied by Lieutenant General (Ret.) Welborn G. Dolvin, Department of De- fense Representative for Panama Canal Treaty Affairs. Mr. Duncan spoke of the role envisioned for Department of Defense personnel in the establishment of the Panama Canal Commission. Lieutenant General Dennis P. McAuliffe, Commander in Chief, U.S. Southern Command, presented testimony to the Subcommittee indicating the specific military-related objectives that depended upon legislation for their aceomplishment. Samuel B. Nemirow, Deputy Assistant Secretary for Maritime Affairs, Department of Commerce spoke to several financial and navi- gational issues presented by the legislation before the Subcommittee, including the issue of traffic sensitivity to tolls increases. Stephen A~ Shefler, Deputy Assistant Secretary for Policy and International Affairs, Department of Transportation, accompanied by John Noun, Department of Transportation, and Commander Hugh Williams, U.S. Coast Guard, presented testimony and recounted the importance of the Canal to the U.S. and the desire of the Department to play a role in the affairs of the Panama Canal Commission. On Friday, February 23, and Saturday, February' 24, the Subcom- mittee held hearings in the Canal Zone for the purpose of obtaining the views of those likely, to be most affected by the legislation; Chair- man Murphy conducted the hearings of the Subcommittee for these two days. , Governor~ Parfitt presented a lengthy statement to the Subcommit- tee on Febui~ary .23. He 4iscussed emplqyee provisiqns of th.e legisla- tion~.. which he felt to. be `highly crucial, and he also discussed i~sues of special immigration, form of agency,, financial provisions of the legislation, operational requirements for the Canal, the .~rnergency fund, tolls, claims, the importance of timely passage of legislation, and planning for treaty impiementatioit The t~overnor' was exten- sively questioned by the Subcommittee, especially On the issues of form of agency, tolls, ani pay. .me~ts to, Panama\ On February 2~3 the ~ubcómmittee a1~q heard from representatives of civic associations, in the Canal Zone, who included R. Georges Bouche, First Vice ,Presi4ent, Pacific Civiè Council ; James Whee1e~, Representative, Pacific Civic Council; "Patricia Munchbach, Presi- dent, Gamboa Civic Council, Phillip Henry, President, Rainbow City Civic Council and President, Congress of `Latin American CivIc Coun- oils;. Samuel Blenman, President, `Paraiso Civic' `Council; Seabert Haynes, President, Pedro Miguel Civic. Council; Kenneth Hannah, President, `Cristobal-Margarita-Brazos Heights Civic Council~ Gary Hudson, President, Coco Solo-France Field Civic Council; and Vic- toria McCaulley, President, ~atun Civic Council. There were many c 6nceriis of the civic associations that were pre- sented to the Subcommittee, especially `in the areas of employment PAGENO="0193" 189 benefits under the new regime, amenities of living that had been avail- able within the Canal Zone, the preservation of institutions of im~ portance to the Canal community physical safety and, among the Latin American associations, equality of job rights, special immigra- tion, and collective bargaining. Representatives of the Canal Zone Bar Association also appeared before the Subcommittee on February 23 to express their views on the provisions of the legislation before the Subcommittee in the areas of courts and law enforcement and also to present a view of the legal problems that would arise from provisions of the Panama Canal Treaty. Witnesses of the Bar Association included Mr. Daniel D. Douglas; Woodrow de Castro of De Castro and Robles; James Duns- worth; Patricia Lindley, President of the Bar Association; and Mar- cos Ostrander, Vice President of the Bar Association: On February 24 the Subcommittee heard the testimony of labor representatives of the Canal Zone. Testimony was taken from Shannon Wall, President, National Maritime Union; Alfred J. Graham, Presi- dent, Central Labor Union-Metal Trades Council; Frank Hamilton, Area Counsel, I.O.M.M. & P. (International Organization of Masters, Mates, and Pilots); Mark Tartar, Vice President, CLU-MTC; Ralph Sheppard, President American Federation of Teachers, Local 29; Oaptkin S. V. Faulkner, Panama Canal and Caribbean Branch of the LO.M.M. & P.; James O'Donnell, President and David Baglien, Vice President, American Federation of Government Employees, Local 14; William Sinclair, Area Director, American Federation of State, County & Municipal Employees (AFSCME) accompanied by Luis Atiderson, Secretary General, AFSCME Local 907, and Saturnin Mauge, President AFSCME Local 907; and William R. Drummond, President, Canal Zone Police Union, AFGE Lodge Local 1896 ac- companied by Ricarclo R. Royo, Second Vice President and Victor E. Joseph, Secretary-Treasurer. Testimony was also taken from various representatives of personnel bureaus and officers who were greatly concerned abbut personnel as- pects of the legislation. These included: Joseph E. Cochran, Civilian Personnel Officer, 193d Infantry Brigade; Dr. Jose A. Filos-Diaz, Assistant Chief, Pulmonary Service and Allergy; Jose Oller, NM-7, Purchasing Agent, USAFSCO; and Del Craig, Commissary Officer, USA Troop Support Agency, accompanied by Maj. David Chinn,. Treaty Coordinator, USA TSA. The labor organizations made very specific recommendations of material assistance to the Subcommittee. Their concerns related to specific job benefits to be provided in conjunction with the legislation and the mantle under which col~1ective bargaining with the Panan~a Canal Commission and other U.S. agencies in Panama would be conducted. ~IUhe representatives of personnel bureaus and other offices felt that the specific problems of their offices might not be given adequate atten- tion in the context of the legislation. On February 26 the Subcommittee hearings returned to Washing~ ton and the Chairmanship of Mr. Hubbard of Kentucky. The Honor- able Ambler H. Moss, Jr., Ambassador of the U.S. to Panama. made a 50-410-5O-13 PAGENO="0194" 190 presentation to the Subcommittee and was questioned extensively concerning Panama's understanding of key provisions in the Panama Canal treaties. The Honorable Clifford L. Alexander, Jr., Secretary of the Army, presented a statement on the organizational needs of the Panama Canal operation. The Honorable Elmer B. .Staats, .Coinp.. troller General of the tTnited States, accompanied by Frank M. Zappa- costa, Assistant Director, General Accounting Office, made. a most helpful comprehensive statement on the financial aspect of the legis- lation. Many of the Comptroller General's comments affected the fifr- ther disposition of the legislation. Finally, the Honorable Robert Carswell, Deputy Secretary of the Treasury, appeared to discuss fi- nancial management and requirement standards in the legislation. On February 28 the Subcommittee had an opportunity to hear Dr. David Challinor, Assistant Secretary for Science of the Smith- sonian Institution, who discussed the environmental aspects of the legislation and the needs of Barro Colorado Island; Dr. Alan K. Campbell, Director, Office of Personnel Management, accompanied by Thomas A. Tinsley, Deputy Associate Director, who focused upon `the retirement benefits in the legislation; H. Miles Foy, Attorney-Advisor in the Office of Legal Counsel of the Department of Justice, who dis- cussed among other things the constitutionality of the Panama Canal Commission; and Darius Gaskins, Deputy Assistant Secr~tary for Policy and Evaluation, Department of Energy, who discus~d the importance of the Canal in the framework of the nation's enei'gy needs. On. March 7 the Subcommittee heard a very detailed presentation from Dr. Charles H. Breecher, a jurist who raised five challenges to the constitutionality of the prospective Panama Canal Commission. The Subcommittee also heard the statement of former Ambassador Robert 0. Blake, International Institute for Environment and Devel- opment, and Chairman, Panama Canal Environmental Task Forte, who recommended a strong role for the Joint Commissioi~i ~ the Environment. On March 13 the Subcommittee heard very important testimony re- lating to the finances of the Panama Canal from Mr. Leonard Kujawa, partner, Arthur Anderson `and Company; Mr. Philip L. Steers, ~Jr., former Financial Vice-President, Panama Canal Company; a panel consisting of Herbert R. Haar, Jr., Associate Port' Director, Port of New Orleans, Richard Lidiñsky, Jr., Assistant Director of Transporta- tion, Maryland Port Administration, J. Gregory Prior, Executive Assistant, Port of Charleston, and Ely M. Brandes, President, Inter- national Research Associates, with introductory statements by the Honorable Barbara Mikulski of Maryland, a member of the Committee on Merchant Marine and Fisheries, the Honorable Lindy Boggs, Demo- cratic Representative from Louisiana and the Honorable Mendel J. Davis, Democratic Representative from South Carolina; William M. Benkert, President of the American Institute of Merchant Shipping, accompained by Barbara Burke, legislative assistant of the Institute; Captain J. W. Clark, President, Delta Steamship Lines; and Hans Blocklin, Vice President, Lykes Brothers Steamship Company, Inc. Statements for the record were received from NYK Line, the Council of North Atlantic Shipping Associations, and the International. Com~ mittee of Passenger Lines. . . .. PAGENO="0195" 191 On March 14, in its final day of hearings prior to markup, the Sub- committee heard the testimony of Charles Mae.chling, Jr., Attorney, Kirlin, Campbell, and Keating, Washington, D.C., who discussed the problems for third parties that might arise from the treaty imple.. mentation; a panel of environmentalists consisting of Dr. Paul Cam- panella, JRB Associates, Michael Wright, Direetor of International Programs, Nature Conservancy, John 1-lendrickson, Environmental Advisor and Senior Staff Officer of the U.S. Section of the Interna- tional Joint Commission, U.S. and Canada (statement for record only), and Nicholas A. Robinson, Member, Board of Directors, Sierra Club (this panel urged a strong role for the Joint Commission on the En- vironment) ; the Honorable Mike Gravel, Democratic Senator from the State of Alaska, who advocated an interoceanic canal study; Terry Rogers, Legislative Liaison, American Federation of Government Em- ployees, accompanied by Stephen Koczak, Special Projects Assistant; and Mr. John Washburn, a Washington attorney. Statements made for the record were submitted by David E. Ortman, Research Associate, Friends of the Earth. in$pection Visits to the Canal Zone and Panama in Connection with L~q'~siation For Operation.-Many Members of the Subcommittee and Committee felt that those who were most directly affected by the changes wrought. by the new treaties and legislation for canal opera- tion under those. treaties ought to be given an opportunity to be heard fully. The i~revioiis Subcommittee Chairman, the late Ralph Metcalfe, had promised persons in the Canal Zone such an opportunity to be heard. Moreover, the Members felt that an onsite visit at the Canal W~.S indispensible to deciding ii~O1~ the advisibilit.y of the inclusion of various provisions in the legislation. Accordingly, a delegation of Subcommittee members undertook an inspection and hearing visit to the Canal Zone. from February 22 to 25. This visit, and the questions that arose during its duration and which remained unresolved at the time. of the subcommittee's markup of legislation, in turn prompted a visit of a second delegation of Committee members from March 22 to 25. The delegation visiting the Isthmus from February 22 to 25 was headed by Mr. .John M. Murphy, Chairman of the Full Committee. A ccompanymg the Full Committee Chairman were Members of the Commnitte.e on Merchant Marine and Fisheries, including Mr. David Bonior of Michigan, a Member of the Panama Canal Subcommittee, Mr. Joe Wyatt of Texas, Mr. Michael Lowry of Washington, a Mem- ber of the Panama Canal Subcommittee, Mr. Robert Bauman of Maryland, Ranking Minority Member of the Panama Canal Subcom- mittee, Mr. Norman Lent of New York, Mr. William Carne.y of New York, a Member of the. Panama Canal Subcommittee, and Mr. Melvin Evans of the Virgin Islands. The. February 23 and 24 hearings, smrnnarized earlier, were the key meetings for the delegation during the February visit. The hear- ~ngs were of demonstrable benefit to the Canal Zone and Tsthrnian ~ommnmmnity since provisions later incorporated into H.R. 111, including establishment of an Office of Ombudsman, the retention of at least one magistrate court during the transition period, the retention of the Canal Zone College. and a report on living conditions in Panama, all. resulted from cont.rilmtions made at the hearings. PAGENO="0196" 192 There were many other important meetings that augmented the hearings. These included a briefing by the Commander-in-Chief of SOTJTHCOM, Lieutenant General Dennis P. McAuliffe, who was later to become the first Administrator of the Panama Canal Com- mission; a briefing by the U.S. Embassy staff in Panama on the situ- ation in that country as of that time; and a briefing by the Panama Canal Authority of the Government of Panama. The delegation also had an exit briefing with Canal Zone Governor Parfitt just before leaving the Canal Zone on February 25. The U.S. Embassy briefing on February 23 focused on the composi- tion of the new Royo ~Government in Panama, three executive agree- ments previously concluded between the United States and Panama, and the economic situation in Panama. In the SOUTHCOM briefing of February 23 General McAuliffe discussed the mission of U.S. forces in the Canal Zone, the military construction and other military related requirements prompted by the Panama Canal treaties, the subject areas for which implementing legislation was needed for a transfer of functions, and manpower requirements. On February 24 the Panama Canal Authority presented its briefing to the Congressional delegation. Presentations at the briefing were made by Gabriel Lewis Galindo, former Panamanian Ambassador to the U.S. and then Director of the Panama Canal Authority, Fernando Manfredo, Advisor to the Director (later to be Deputy Administra- tor of the Panama Canal Commission), Pablo Duran, General Di- rector of the National Port Authority of Panama, Eduardo Shaffer Ramirez, Director of Ports, Railroads, and Marine Supplies for the Panama Canal Authority, Tomas Paredes Royo, Development Di- rector of the Panama Canal Authority, and Augusto Zambrano, Di- rector of Operations. Each of the Panamanian briefers discussed, in their particular areas of competence, the objectives and goals and organizations of the Panama Canal Authority and the U.S.-Panamanian implementation committees. Mr. Manfredo briefed on the overall organization of the Government of Panama for implementation of the Panama Canal Treaties, and Dr. Zambrano briefed on environmental protection of the Panama Canal watershed. A number of members of the Congressional delegation were greatly upset with certain remarks made by the Panamanian briefers in the context of the briefing on February 24. Mr. Manfredo had made a comment, for example, that Canal Zone businesses would owe the Government of Panama retroactive taxes after October 1, which the U.S. believed to be nrecluded by the Panama Canal Treaty. l~~nre- over~ at the time of the deleo~ation's visit, Panama h~id complained puhli~ly that some of the facilities being turned over to Panama were in bad shape and should be ungraded, and modernized. Again, the U.S. agencies and authorities h~cl taken the position that there was no treaty obligation to renovate facilities in order to transfer them to Panama. Chairman Murnhy declared in a press conference held inst before the deie~ration returned to the TTnited States on Fpbri~arv 25 that he had become "quite concerned that some of the key understandings that PAGENO="0197" 193 underlie the Panama Canal treaty are now in shambles." If misun- derstandings did exist on any points, he said, there may not be any treaty at all, or, at best, there was a need to clarify the terms of the implementing legislation. In the course of the press conference the other members of the delegation echoed the Chairman's sentiments on these issues. In brief, the chief problems of Panamanian treaty interpretation that had arisen from the February 22 to 25 visit were: (1) the view expressed by certain Panamanian officials that Panama was entitled to contingency payment under Article XIII 4(c) of the Panama Canal Treaty, which the U.S. felt by reason of its contingency nature should not be placed in the formula for tolls; (2) the view expressed by certain Panamanian officials that the Government of Panama had the right after October 1, 1979, to tax businesses in the Canal Zone on their operations prior to that date, a move the U.S. viewed ~s pro- hibited by Article IX, paragraph 1 of the Panama Canal Treaty; (~) the statement made by some Pa~namanian officials that the U.S. should refurbish old facilities before turning them over to Panama, which was not required by the Pamtma Canal Treaties; (4) the de- sire of the Panamanian Government to obtain all available move- able property in connection with installations such as the ports and railroad; and (5) taxes and other charges likely to be imposed by the Government of Panama after October 1 on non-profit organizations that had operated in the Canal Zone before that date. After the return of the delegation of Members from the Isthmus on Sunday, February 25, U.S. Ambassador Ambler Moss appeared before the Subcommittee on February 26. At that time the Ambassador was asked by Chairman Murphy to provide to the Committee as soon as possible a clear statement on the position of the Panamanian Govern- ment with respect to the issues that had arisen in the course of the meetings with Panamanian officials. The Ambassador promised to re- spond to the Congressional concerns as soon as possible. On March 21 an official exchange of notes between the U.S. and Panama occurred in which Panama agreed that it could not retroac- tively tax after October 1 business organizations that had operated in the Canal Zone. Furthermore, Panama agreed that toll rates need not be set at levels to recover the contingent payments under Article XIII 4(c). The exdhange of notes came after the Subcommittee had already made the determination that in order to intelligently deliberate upon the legislation before it, more precise information was needed from the Government of Panama as to their views on the issues raised in the initial inspection visit. Moreover, the diplomatic note of March .21 addressed only two of the five issues of concern to the Subcommittee. Accordingly another Committee delegation to visit Panama and meet with Panamanian officials was chosen on March 21 and the delegation did visit Panama from March 22 to 25. The delegation was headed by Mr. Bowen of Mississippi, Ranking Majority Member of the Panama Canal Subcommittee, and also included Mr. Robert Bauman, Ranking Minority Member of the Panama Canal Subcommittee, Mr. David Bonior of Michigan and Mr. Michael Lowry of Washington, both mem- bers of the Panama Canal Subcommittee, and Mr. .Joe Wyatt of Texas, a member of the full Committee on Merchant Marine an~l Fisheries. PAGENO="0198" 194 Durirg the visit to Panama on Saturday, March 24, following meet- ings with President Aristides Royo of Panai~ia and various officials of th~ Panama Canal Authority, Mr. Bowen, the delegation leader, issued a press statement on the results of the meeting. Subsequent to returning to the U.S.,. at the next markup session. of the Panama Canal Subcommittee, Mr. Bowen presented a del~ailed ~xp1anation of the results of the mission. He indicated that the Panamanian President and the Director of the Panama Canal Authority had both confirmed that the Republic of Panama would not collect retroactive taxes or other charges or impose sanctions on U.S. businesses or organizations operating in the Canal Zone for their activities prior to October 1, 1979. The two also con- firmed that toil rates need not be set at levels to recover the $10 million annual contingency payment due Panama, according to Mr. Bow~n~ The Panamanian officials also made it clear that it was not a U.S. treaty obligation to upgrade facilities to be transferred to Panama, although Panama would not object if the U.S. upgraded facilities Mr. Bowen said. On the matter of moveable property, he said, the matter was being negotiated by the U.S. Executive and Panama and the taiks were encouraging, and the Panamanians had accepted the concept that they would negotiate financial terms for the property. Finally, with respect to the welfare of non-profit organizations operating before October 1 in the Canal Zone, Mr. Bowen indicated the U.S. was asking the Panamanians for fair consideration of rates, requirements, and other aspects of Panamanian law as applied to these organizations. Panama, he said, indicated that such considera- tion would be given and negotiations would be undertaken. Mr. Bauman indicated in the markup session on March 29 that he had a different perspective on the issues raised, and that he was dis- satisfied with the amount of time the Department of State had taken to respond to the concerns of the Subcommittee. Mr. Bauman stated that the delegation was not permitted an official meeting with the Panama Canal Authority, and that the entire delegation was not in- vited to meet with President Royo. Mr. Bauman recounted a number of the issues presented by the inspection visit of February and he con- cluded that the strictest possible legislation should be written in the light of those problems. Subcommittee and Full Committee Markup of Implementing Legis- lation.-After its nine days of extensive hearings, after having heard the views of more than 75 separate individuals~ and after two im- portant Canal Zone visits, the Subcommittee on Panama Canal began its markup of legislation to operate the Canal under the Panama Canal Treaty on March 21. The Subcommittee chose to deliberate upon H.R. 111, which had been jointly referred to four House com- mittees, and also upon appropriate sections of I-I.R. 1716, a portion of which had been solely referred (Title II and Section 105) and a portion concurrently referred (Introduction and Title V) to the Com- mittee on Merchant Marine and Fisheries under a reporting deadline of April 10. H.R. 454, H.R. 1511, H.R. 1958 and H.R. 2522 were also approved as subjects of the markup but these were not initially pro- posed by any Members as main vehicles for Subcommittee markup. The March 21 markup of the Subcommittee adjourned without any substantive decisions on provisions of either H.R. 111 or H.R. 1716 PAGENO="0199" 195 because of the incompleteness of responses to questions previously posed by the Subcommittee to the Executive and because of the need to clarify the position taken by the Government of Panama on cer- tain crucial issues related to the legislation. As previously indicated, a task force of the Committee was sent to Panama from March 22 to 25 in order to resolve the problems raised in Panamanian treaty in- terpretation. The task force was generally successful in its mission, as indicated by the statement issued during the visit by the delegation leader, the honorable David B. Bowen and the statement presented to the Subcommittee by the same Member in the next markup session on March 27. The Subcommittee accepted as a basis for the markup prepared prints of H.R. 111 and H.R. 1716. Significant changes from the intro- dticed version of the bill which were included in the committee print of the bill for markup purposes were as follows: (1) The requirement that one of the U.S. members of the super- visory Board of the Panama Canal Commission be experienced * and knowledgeable in U.S. labor matters, and one other experi- * eneed in port and maritime matters; (2) Deletion of the requirement for Senate confirmation of the Panamanian representatives on the supervisory Board of the Pan- ama Canal Commission and for U.S. representatives on the Joint Commission on the Environment, and addition of language to provide more specific authority and staff and budget for such Joint Commission; (3) Exemption of the Panama Canal Commission, in matters of operation, management or maintenance of the Canal, from author- ity of the Ambassador, but specification of the requirement that the Commission keep the Ambassador fully and currently in- formed; (4) Provision, in an entirely new section of the bill, for a Code of Conduct for Commission personnel, including minimum ethical * standards, sanctions on improper conduct, and a standard for being made subject to prosecution; (5) Guarantee of continuation of basic pay and other benefits for personnel separated by reason of reduction-in-force on Sep- tember 30, 1979 and employed by the Commission in less than si~ months; (6) Provision for payment of $10 million of the Panama Canal Company to the Treasury for reimbursement of the Treasury for transferred employees leave and repatriation expenses; (7) Substitution in the section on accounting policies and pay- ments to Panama of the term "costs" rather than "expenses" in reference to operation and maintenance of the Canal, deletion of * accounts for amortization of use rights, and the broadening and detailing of language of the calculation of interest for payment; (8) Stipulation in the nature of clarification that the Panama Canal Commission would reimburse the Civil Service Retirement and Disability Fund for the unfunded liability of such system as it would result from provisions of the Panama Canal Act; (9) Tn the subject area of payments to Panama, specification that payments to Panama would be made quarterly from appro- priations for that purpose and that the public service payment PAGENO="0200" 196 under paragraphS of Article III of the Treaty be audited and any overpayment refunded; (10) Prohibition on U.S. payment to Panama in connection with the Panama Canal Treaty during any period in which Pan- ama applied retroactive taxation to businesses operating or org&-. nizations existing in the Canal Zone before October 1, 1979, and sense of the Congress language that paragraph 1 of the Article IX of the Treaty prohibits retroactive taxation; (11) Fiscal year 1980 authorization of $40,000,000, rather than $10,000,000 for the Panama Canal Emergency Fund; (12) Limitation of $120,000 rather than $60,000. on amounts that may be paid by the Commission for damages in marine acci- dent cases outside the locks; (13) In the fonnula for the basis of tolls for use of the Pan- ama Canal, deletion of the factor of amortization and insertion of the term "replacement depreciation" in lieu of "depreciation"; (14) Continuation of at least one magistrate court for the full period of the 30-month transition period under the Panama Canal Treaty and inclusion of authority for the termination of only one rather than both magistrates courts; (15) Provision for a report by the President during the transi- tioil period on treatment of employees by the Government of Panama and land-use licenses and living conditions; (16) Provision for an Office of Ombudsman (at GS-18 level or below) during the transition period to hear grievances of em- ployees and make recommendations thereon; (17) Provision for a two-phased interoceanic canal study nearly identical to the study incorporated as the Gravel Sea-Level Study Amendment to ILI~. 2329, 95th Congress; and (18) A simplified version of the provision for disinterment and reinterment of remains. For the purposes of consideration of the bill I-LR. 1716, the vehicle placed before the Subcommittee incorporated with necessary technical changes those provisions of H.R. 111 which were applicable to the- portions of the subject matter of H.R. 1716 referred to the Committee. On March 27 the Subcommittee began its consideration of the sub-. stance of 1J.R. 111 and other bills. The focus of the markup went prin- cipally to }LR. 111. The Subcommittee adopted amendments: (1) To require U.S. members of the Board of the Panama Canal Commission to cast their votes as directed by the Secre- tary of Defense (voice vote); (2) To require that, in lieu of the requirement that one U.S. member of the Board be experienced and knowledgeable in U.S. labor matters, one U.S. member of the Board be experienced and knowledgeable in port matters or export-import business and an- other in labor matters (voice vote); (3) To specify that the Panama Canal Commission shall fix the compensation of personnel of the Joint Commission on the Environment (voice vote); (4) To stipulate that the Panama Canal Commission would approve the rules of the Joint Commission on the Environment (voice vote); PAGENO="0201" 197 (5) To make technical changes to the provision of the bill on Code of Conduct (voice vote); (6) To require that provisions of U.S. law on ethical conduct apply direc~1y to all Board members of the Panama Canal Com- mission (adopted by a roll-reall vote of 9 to 4); (7) To require that all costs of treaty implementation be paid before the contingency payment to Panama (voice vote); (8) To impose the bill's restrictions on property transfer and * reprogramming of funds notwithstanding other provisions of * law (voice vote); * (9) To withhold payments to Panama during the period whenthe Panama Canal Commission determined that these were unpaid claims of U.S. citizens unsettled for six months or more * (voice vote); (10) To stipulate that tolls shall not be prescribed to cover the contingent payment to Panama under paragraph (c) of Article XIII of the Panama Canal Treaty of 1977 (voice vote); (11) To clarify that payments to Panama cease when individ- * uals' formerly living in the Canal Zone are taxed retroactively * by Panama (voice vote); * (12) To require that the Presidential report on former em- ployees, living conditions, etc. be made annually through the life of the Panama Canal Treaty (voice vote); * (13) To provide authority for the Attorney General and the Panama Canal Commission to take custody of Canal Zone pris- oners (voice vote); (14) To require that the Ombudsman be a U.S. citizen and that the Office terminate at the expiration of the Panama Canal Treaty (voice vote) ; and (15) To delete all provisions of the bill relating to an inter- oceanic canal study. In the deliberations of the Subcommittee on March 27, numerous amendments were also rejected, including amendments: (1) To limit the authority of the Secretary of Defense to direct the votes of U.S. nationals on the Board of the Commission only in national defense matters and to provide for polling of U.S. members of the Board (defeated by division vote of 6 nays to 4 yeas); (2) To delete provisions for direction of the Panama Canal Commission by the Secretary of Defense (defeated by division vote of 6to 4); (3) To stipulate that the armed forces commander designated by the President have responsibility for the security of the Canal and coordinate with Commission personnel in lieu of assuming exclusive jurisdiction over the Commission (voice vote); (4) To establish the Panama Canal Commission as a U.S. gov- ernment corporation (voice vote); (5) To delete provisions of the bill regarding congressional approval of transfer of Canal property (voice vote); (6) To limit increases in tolls to not more than seven percent a year after an initial increase in tolls for the Panama Canal Commission and to permit a surcharge on cargo not destined to PAGENO="0202" 198 the U.S. or PaTlama for reimbursement of amortization of unfunded liability of the Civil Service Retirement and Disability Fund resulting from the bill (voice vote); (7) To limit increases in tolls to not more than seven percent a year after the initial increase for the Commission (defeated by division vote of 6 to 1); and (8) To limit the initial increase in tolls for the Panama Canal qommission to 27% (voice vote). On March 29 the Subcommittee on Panama Canal again met for the purposes of deliberating on the legislation. On that date the Sub- committee approved several `amendments. The major decision made at the meeting was whether to accept in H.R. 111 the same amendments to employment provisions that had been incorporated by the Commit- tee on Post Office and Civil Service in deliberations the previous day. The Subcommittee decided to approve seven amendments identical in substance to those made by the Post Office Committee. These amendments, which were incorporated into a new Chapter 3 of H.R. 111 by voice vote: (1) Applied provisions of the Civil Service Reform Act (FL. 95-454) regarding labor-management relations to the Panama Canal Commission and Executive agencies conducting operations in the Republic of Panama; (2) Made `clear that the Panama Canal Commission would re- imburse the Civil Service Retirement Fun'd for the unfunded lia- bility that would `arise from the provisions of the legislation (this concept had already been incorporated into H.R. 111); (3) Guaranteed that bases of pay (rates of pay having been guaranteed in the introduced legislation) would continue for em- ployees transferred from the Canal organization; (4) Permitted the Department of Defense to pay teachers trans- ferred from the Canal Zone Government under terms other than those of the Overseas Teachers Pay and Personnel Practices Act (20 TJSC 903(c)) until the rates of basic `compensation of those employees equal or exceed the rates for DOD overseas teachers under the Overseas Act; (5) Provided sabbatical leave once every 10 years for Canal Zone Government teachers transferred to the Department of De- fense; (6) Guaranteed the continuation of leave and travel benefits for employees transferred from the Panama Canal organization as a result of the treaty and followup `legislation; and (7) One other tecihnical amendment. Those amendments which had been approved by the Committee on Post Office and Civil Service in H.R. 1716 but which the Subcommittee determined it should not approve for H.R. 111: (1) Reduced the special annuity benefit provided in the orh~inaJ version of H.R. 1716 and H.R. 111 for any early retirement taken and required tho~e receiving the annuity benefits to be essential to the operation of the Canal; (2) Limited placement assistance to individuals who were to be separated as a result of the Panama Canal Treaty to such assist- ance as would be accorded to other Federal employees who are similarly displaced, and PAGENO="0203" 199 (3) E1iminate~d the cost of living allowance designed to be paid to omployeos five years after the entry into force of the Panama Canal Treaty in order to iepl'~ce the benefits of military corn missary, military exchange, and postal service benefits provided nntil that time Another amendment, approved by voice vote of the subcommittee, ch~inged the postal service provision in H B 111. to one identical to that approved by the Committee on Post Office and Civil Service A third amendment approved by voice vote on March 29 provided that only U S laws, executive orders, and regulations should apply to employee organizations of the Panama Canal Commission or U S agencies in the conduct of their operations in Panama The Subcommittee also approved a provision for H R 111 m~nd'~t rng that the Department of Defense would continue to operate the Canal Zone College until the year 2000 at the level of services provided prior to October 1, 1979. Under another amendment approved by the subcommittee, again by voice vote, the fire protection installations in the Canal Zone were not to be transferred to P~nama until (a) a reduction of firefighters personnel made it impossible for the United States to continue to operate the installation, and (b) the installation was excess to the needs of the United States Other amendments approved on March 29 clarified further that U S payments to Panama would cease if Panama imposed retro- active taxation on former Canal Zone persons or businesses and spe- c fled that amounts for the Emergency Fund after 1980 would be sub-. ject to "sums provided in advance in appropriations acts." The March 29 markup of the subcommittee also witnessed the sub- committee's desire not to adopt either the Administration sponsored approach of establishing the Panama Canal Commission as an agency with wide flexibility or the approach sponsored by Congressman George Hansen and others to impose such strict standards on the fi wincial provisions of the legislation such that it appeared to many Members the terms of the treaty arrangement would be violated The Subcommittee reiected, by voice vote, an amendment to estab hsh the Panama Canal Commission as a government corporation The subcommittee also rejected by voice vote an amendment which de- clared that ~cceptance of Panama Canal Treaty payments by Panama indicated that the U.S. rightfully exercised sovereignty over the Canal Zone prior to October 1, 1979. Prior to reporting H R 111 and pertinent portions of H R 1716 I o the full Committee on Merchant Marine and Fisheries, the Panama Canal Subcommittee, by a vote of 5 nays to 3 yeas with 1 member voting present rejected the substitution of the bill H H 1958 for the terms of H R 111 H H 1958 required that all expenses for im- plementation of the Panama Canal tre'ities be treated as `~in exnense of the Panama Canal Commission and reimbursed from Canal rev- ertues, specified an annual report be delivered to the Congress on the cost of the treaty; stipulated that no funds could be used to im- plcment the Panama Canal Treaty and no property of the U S in the Canal Zone could be transferred except when specifically author- l7ed by the Congress, and provided that the Panama Can~il Corn PAGENO="0204" 200 pany and Canal Zone Government could continue to function until the Panama Canal Commission was duly established. After the Subcommittee rejected the substitution of H.R. 1958 for H.R. 111, reporting of the bill to the full committee was agreed to by voice vote. The Subcommittee then took up consideration of sec- tion 106 and title II of H.R. 1716, which had been solely referred to the Committee on Merchant Marine and Fisheries and the Subcom- mittee. The provisions of section 106 and Title II were made subS. stantively the same as the parallel provisions of H.R. 111 and were approved by voice vote. Before approving H.R. 1716, however, it was necessary for the subcommittee to first approve an amendment to the Committee Print of H.R. 1716 granting the same U.S. tariff treatment for Panamanian equipment and repairs to fishing vessels, and fish netting, as ap~ pertained before October 1. While this change to the introduced version of H.R. 111 had been incorporated into the Committee Print on H.R. 111 it was not so incorporated into the print of section 106 and Title II of H.R. 1716. As previously mentioned, the Speaker made concurrent referral to four committees of Section 2 of H.R. 1716, which concerned terms of reference for the Canal Zone and other Canal-related terms appearing in the laws of the United States, and Title V of the bill, which au- thorized the disinterment, reinternment, and transportation of remains of U.S. citizens buried in the Canal Zone, and stipulated the effective date for the terms of the Panama Canal legislation. The subcommittee approved by voice vote the Committee Print of these provisions. The provisions were substantively similar to the authority and interpre- tation originally provided for H.R. 1716, but changes were adapted from H.R. 111 as reported to the full committee. On April 2 the full Committee on Merchant Marine and Fisheries began its deliberations on ER. 111 and the portions of H.R. 1716 commended to it. That day the Committee agreed by voice vote to an amendment which stipulated that the United States and the Republic of Panama, not the Panama Canal Commission, would establish the Joint Commission on the Environment and approve rules for the con- duct of affairs of the joint body. The amendment also specified that more generally the U.S., not the Panama Canal Commission, would establish compensation for U.S. personnel on the Joint Commission. A second amendment approved `by the Committee provided that, in lieu of the direct application of U.S. law on standards of employee conduct to Panamanian Members of the Board of the Panama Canal Commission, the U.S. and Panama would negotiate suitable arrange- ments for the enforcement of the code of conduct by both countries, and that all members of the Board of the Panama Canal Commission would be subject to `such code, and that the code would be enforced only in accordance with such arrangement. The provisions of the code of conduct for Panama Canal Commission employees were to be "substantially" the same as U.S. law. This amendment on the code of conduct was approved `by a roll call vote of 21 yeas to 16 nays, with 3 Members voting present. Another amendment adopted by the Full Committee on April 2 provided that important guarantees and benefits in the bill would be PAGENO="0205" 201 applicable to persons who were separated by the Panama Canal Com- mission by reason of reduction-in-force but who were rehired within a six month period. A third amendment approved by voice vote on April 2 made the contingency payment under Article XIII(4) (c) due, under specific conditions, at the end of the second fiscal quarter following the end of the fiscal year for which payment is due. A fourth favorably considered amendment provided that the repay- merit scheme for any overpayment of the public service payment of paragraph 5, Article III of the Panama Canal Treaty would be in accordance with `Understanding (1) to the treaty. The approval was by voice vote. The full Committee on April 2 also rejected two amendments to change provisions of }LR. 111 which some Members felt violated the terms of the new treaty arrangement with Panama. The majority of the Committee apparently did riot agree with this assessment that the provisions violated the treaty. By a division vote of 7 yeas to 13 nays the Committee rejected an amendment which in effect limited the direction of the Secretary of Defense over the Panama Canal Commis- sion to' direction of the votes of the U.S. members of the Board. Also re~jected by a division vote of 7 yeas to 14 nays was an amendment which provided that, during wartime or when war is imminent, a U.S. military commander would coordinate the operation and defense of the Panama Canal, and which also authorized the President to appoint military officers to the Board of the Commission for reasons of na- tibnal security. These provisions would have been in lieu of direct control. of the Canal by the `U.S. military commander appointed by the President. The Full Committee met again the next day, April 3, to conclude Committee deliberations on H.R. 111 and H.R. 1716. In the April 3 session several substantive and technical amendments were approved, but several more were defeated. Amendments favorably cofisidered included those that: (1) Restricted the use of the Panama Canal Emergency Fund. ~v1ciereby in the case of a withdrawal from the Emergency Fund fo~ unprogrammed increases in traffic, the amounts to be with- dr~wn would be limited to the amount of revenues expected to `be recovered from the increased traffic, and secondly, whereby the Fund could not be used for payments to Panama (voice vote); ,,(2) Provided that payments be made to Panama on a monthly rather than quarterly basis (except for the contingency pay- merit) (voice vote); * (3) Deleted the provision that had been inserted at tlae subcom- mittee level concerning the Panama Canal Commission and ex- propriation of property of U.S. citizens by the Government of Panama (approved by a roll call vote of 21 yeas to `1, nays, with 1 Member voting present); ` ,* (4) Excepted the Balboa and Coco Solito fire stations from the stipulations contained in the section of the bill on transfer ,o~f fire installations; * (5). Contained the application of the Fair. Labor Standards Act for the purposes of the minimum wage and other standards. PAGENO="0206" 202 Amendments defeated in the course of the deliberations on April 3 would have (1) Limited those costs of treaty implementation to be paid before the contingency payment to only those costs associated with the operation and maintenance of the Panama Canal (de- feated by a division vote of 5 yeas to 9 nays) ; (2) Stated that acceptance of Panama Canal treaty payments by the Republic of Panama constituted recognition that the United States rightfully exercised sovereignty over the Canal Zone prior to October 1, 1979 (also raised in Subcomniitte on Panama Canal) (voice vote), (3) Authorized in the imposition of a toll surcharge a credit for cargo originating in or destined for the United States or Panama as a iesult of U S investment in the Canal (defeated by a roll call vote of 19 ayes to 20 noes, with 1 voting present), (4) Established the Panama Canal Commission as a wholly- owned government corporation rather than an agency of the U.S. government (voice vote); (5) Halted treaty payments to Panama if Panama failed to comply fully with the conditions of paragraph 7 of Article X of the Panama Canal Treaty regarding persons who had been employed in activities for which Panama assumed responsibility on October 1 (defeated by roll call vote of 20 yeas and 20 nays), (6) Modified the form of agency under which the Panama Canal Commission was to be established in order to provide a business-type budget within the context of the appropriations process (defeated by a division vote of 6 yeas to 10 nays), (7) Substituted the bill H.R. 1958 (explained previously) for the provisions of H R 111 (defeated by roll call vote of 18 yeas and 22 nays) With the completion of the amendment process to H R 111, and W]th the rejection of the terms of H R 1958 (the "Taxpayer Relief Amendments to Panama Treaty Legislation", known as the Hansen bill) the Committee then proceeded to vote to report H R 111, by a vote of 21 yeas to 17 nays with 2 Members voting present As was the case with the Subcommittee on Panama Canal, the terms of H R 1716 incorporated in identical substance the parallel provisions of H.R. 111 Both section 106 and Title II of H R 1716 (having been incor- porated completely into Title TI) were repoited, as were the concur- rently referred Section 2 and Title V On April 11 the Committee filed its report on H R 1716 (House Report No 96 94, part II) and on April 23 its report on H R 111 (House Report 96-98, part I, with part II, the Congressional Budget Office cost estimate, being filed on June 7) Both repoits were lengthy and detailed and both carried the additional view of Mr Treen, the additional views of Mr Dornan, Mr C'~rney and Mr Tom Evans, dissenting views of Mr. Cnrney and Mr. Don Young `of Alaska, additional views of Ms Mikuiski, additional views submitted by Mr Lowry, Mr AuCoin, Mr Bonker, Mr Studds and Mr Bonier, and minority views submitted by Mr Snyder, Mr Baiiman, Mr Emery, Mr Tom Evans of Delctware Mr Bob Davis, Mr Jones of North Carolina, Mr Wyatt, Mr Forsythe, Mr Don Young of Alaska, Mr Lent, Mr Dornan, Mr Trible, Mr Carney, and Mr de la Garza~ PAGENO="0207" 203 Uom~parison of H.]?. 111 and H.]?. 1716 Version of Other Uom~~ imittees.-While the Committee on Merchant Marine and Fisheries proceeded to report both H.R. 111 and pertinent portions of H.R. 1716, the three other committees of jurisdiction in the House, the Committees on Post Office and Civil Service, Foreign Affairs, and Judiciary, reported only H.R. 1716. Because each of the four corn- inittees maintained interest in the work of the other committees and communication between committees was at a maximum, the portions of H.R. 1716 as reported by the three committees did not differ sub- stantially from the provisions of H.R. 111 as reported. There were, however, between H.R. 111 as reported and H.R. 1716 as reported from four committees some differe~aces in provisions which were of material importance because these became alternatives in the amend- ing process in the whole House or because these emerged again as pro- posals in the, House-Senate conference. The `Foreign Affairs Committee reported a provision dealing with the Canal in wartime that required the Administrator of the Panama Canal Commission to comply with the directives of a military officer appointed by the President during such period. This differed from the Merchant Marine and Fisheries provision which authorized a U.S.' military officer to assume exclusive jurisdiction over the Canal's operation upon designation by the President during wartime. An- other difference of importance to the Foreign Affairs Committee con- cerned the designation of persons to receive privileges under Article VIII of the Panama Canal Treaty-the Merchant Marine and Fish- eries version of the legislation stipulated that the Secretary of De- fense would designate such officers and employees, while the Foreign Affairs Committee version indicated that the Secretary of State would designate the privileged from a list supplied by the Panama Canal Commission. There'were a number of key differences between the employment and employee benefit provisions incorporated into the reported version of H.R. 111 and the H.R. 1716 legislation reported by the Committee on Post Office and Civil Service. These differences between the two committees' versions precipitated some major amendments and critical debate during House floor consideration. As reported by the Committee on Merchant Marine and Fisheries, H.R. 111 contained benefit provisions as originally requested by the Executive, including provisions for eligibility for early retirement of Panama Canal Company, Canal Zone Government, and Panama Canal Commission personnel at age 48 and 18 years of service, or involuntarily with 20 years of service with no reduction in annuity; placement assistance for employees separated from Car~al service `as a result of the treaty arrangement; and a cost of living allowance for U.S.' citizen employees of the Commission commencing 5 years `after the entry into force of the new treaty arrangement due to loss of mili- tary exchange privileges, commissary privileges, and military postal service. As previously indicated, the Post Office and Civil Service Committee, in their reported version of H.R. 1716 (House Report No. 96-94, Part III) deleted the cost of living allowance, limited place- ment a~sistance to that accorded other displaced federal employees, and provided for both a reduction in annuity for early retirement taken and the imposition of a requirement that early retirement be PAGENO="0208" S 204 accorded only to "essential employees", Also the Post Office Commit- tee's work in Title III of H.R. 1716 did not include provisions con- cerning: (1) a requirement that relations with employee organizations be conducted only under U.S. law; (2) the continued application of the Fair Labor Standards Act in the Canal area, or; (3) reemployment by the Panama Canal Commission within a six-month period after October 1 separation due to implementation of the treaty. The Committee on Judiciary reported with one amendment those portions of H.R. 1716 over which it had cognizance. The Judiciary amendment deleted the provision of H.R. 1716 concerning special im~ migration privileges for certain employees and dependents. The im- migration provision reported by the Committee on Merchant Marine and Fisheries included special status for non-U.S. citizens and depeñd~ cuts residing in Panama who performed service for the Canal organi~ zation, retirees from the Canal organization with 15 or more years of experience, and individuals employed by the Panama Canal organi- zation and resident in the Canal Zone on the effective date of the exchange of instruments of ratification. The Judiciary Committee product, also reflecting the Executive's draft version of the legislation as it was submitted, varied from. the product of the Merchant Marine Committee in that it authorized the President to abolish both of the Canal Zone magistrate courts before the end of the 30-month transition period whereas the Merchant Ma~ rine Committee version required the retention of at least one of those courth. Under the legislative provisions reported by the Judiciary Committee, authority for the exercise of U.S. rights during the tran- sition period was invested in the Panama Canal Commission;. the Merchant Marine Committee reported version invested this authority in the President. . Two other differences in the provisions of H.R. 111 as reported to the House by the Committee on Merchant Marine and Fisheries and those of H.R. 1716 as reported by the four committees of jurisdiction should be noted. H.R. 111 as reported required, by reason of an amend- ment approved by the Panama Canal Subcommittee, an annual.report to be submitted by the President to the Congress on U.S. rights and responsibilities under the Panama Canal Treaty, including discussion of treatment of former employees by the Government of Panama. H.TR. 1716 contained no such provision. A second difference of note con- cerned the authorization for disinterment and reinterment of remains of U.S. citizens, a matter under the concurrent jurisdiction of the four committees. H.R. 111 authorized such sums as are necessary to carry out this project, while H.R. 1716 authorized $3.5 million. . House Floor Considerc&tion,-On May 17, 1979, the House eon- sidered H. Res. 274, providing for the consideration of the bill H~R. 111, to provide for the operation and maintenance of the Panama Canal and to provide for the exercise of the rights and performance Of the duties of the United States provided in the Panama Canal Treaty of 1977. H. Res. 274 waived sections 303 (a) (4), 311(a), 401 (a), 401 (b) (1), and 402(a) of the Congressional Budget Act of 1974 (Pub- lic Law 93-~344) and clause 3, rule XIII of the House rules. . The only substantive waiver was of section 303 (a) (4) which pro' hibits consideration of legislation including new entitlement author- PAGENO="0209" 205 ity prior to final action on the first concurrent resolution~ on the budget. At the time of consideration of ILR. 111 the first &~nóurrènt resolution on the budget had not been approved. All the other waiver~s were of a technical nature. Section 311 (a) of the Budget Act bars consideration of...a~y ~bili which provides new entitlement authority which would, if enacted, exceed the total budget outlays. Certain provisions of H.R. 111 as re- ported provided new entitlement authority in the form of early retire- ment payments which would exceed the total budget outlays, and therefore would have subjected H.R. 111 to points :~f order without the waiver in H. Res. 274. *Section 401 (a) of the Budget Act bars consideration of any bill which provides new contract authority unless such authority is limited to such extent or in such amounts as may be provided in advance in appropriations acts. A provision in H.R. 111 as reported whièh per- mitted the Panama Canal Commission and the U.S. Postal Service to assume obligations of the Canal Zone Postal Service would have vio- lated Section 401 (a) and subjected the bill to a point of order ~ithOut the waiver. Section 401(b) (1) of the Budget Act bars the consideration of any bill which provides new entitlement authority to become effective be- fore the first day of the fiscal year which begins in the calendai~ year in which the bill is reported. Certain provisions in H.R. 111 provided for new entitlement authority to become effective upon enactment, there- fore subjecting H.R. 111 to points of order under Section 401(b) (1) for which waiver was necessary. Section 402 (a) of the Budget Act bars the consideration of ~ny bill authorizing the enactment of new budget authority for a fiscal year unless the bill has been reported by May 15 preceding the beginning of that fiscal year. Since H.R. 111 contained a provision authorizing the. enactment of budget authority to disinter, transport, and. reinter remains of U.S. citizens in the Canal Zone in fiscal year 1979, and since the authorization was not reported by May 15, 1978, a waiver of thi~. section of the Budget Act was necessary. H. IRes. 274 was an open rule providing two hours of general debate to the Committee on Merdhant Marine and Fisheries and one hour each. to the Committee on Post Office and Civil Service; Foreign Affairs; and Judiciary. The open rule made it in order that, the Com- mittees on Post Office and Civil Service, Foreign Affairs, and Judiciary could offer amendments in subject areas related to their jurisdiction when the version of H.R. 1716 as reported from that Committee dif- fered from the parallel provisions in H.R. 111. H. Res. 274 was agreed to by a roll-call vote of 200 yeas and 198 noes. General Debate.-On May 21, 1979 the House held general debe~te n~ }J~~ 111. (see Congressional Record, May 21, 1979, pp. H3481- 113519) * Chairman Murphy, the leading spokesman through~out the deliberations on H,R. 111, presented a complete picture of the events.. that led up to the situation that surrounded the implementing legisla- tion. He provided the House Members with background information. beginning with the Panama Canal Act of 1912, which established the first governing agency to operate the Panama Canal, and...through; the: government corporation called the Panama Canal Company that 56-410-----80-14 PAGENO="0210" 206 W5$ to operate the canal up to the treaty effective date. Mr. Murphy stated. that the necessity of the implementing legislation arises from the simple legal principle that under the Constitution many of the pro~- visions of the treaty are not and cannot be self-executing, that is, those provisions that expressly depend on legislation and those which involve subjects that are committed exclusively to the legislative power of the Congress. He argued that failure to provide legislation to execute U.S. rig~hts and responsibilities in treaty areas that are not self-execut- ing may be detrimental to all U.S. areas of involvement. He defined the effect of the treaty and provided a treaty cost estimate. Finally, he. gave an overall description of the provisions* of H.R. 111, and described all the work of the committee that went into the legislation to provide for operation of the Canal under the Panama Canal Treaty. Mr. Bowen, Ranking Majority Member of the Panama Canal Sub- ~ommittee, followed Mr. Murphy. He expressed the view that the most effective way to serve the national interest would be to pass H.R. 111 without amendment. In his view the three options before the House were: (1) Passage of H.R. 111, an option Mr. Bowen preferred because he said under this option the U.S. would administer the Panaitia Canal forthe next 20 years; (2) Non-passage of any form of implementing legislation, w~hich, Mr. Bowen argued, would lead to no one being able to * administer the Canal and therefore the closure of the waterway~ or; (3) Support of amendments to H.R. 111 which were potential treaty violations, which he believed would result in a default' of * U.S. treaty obligations and could cause a possible shutdown of the Canal. ,` Mr. `Bonior, a supporter of H.R. 111 and member of the Panama Canal Subcommittee, aroiued that the bill would provide the incentives needed to keep the highly skilled American workforce on the `job by protecting their job riethts; providing for their schools, and medical care; increasing the retirement benefits for those with a stahe in the Canal; and by dealing fairly with the U.S. citizens who lose their joJ~..as a result of the treaty. He stressed the necessity of the legislation in maintaining the present U.S. workforce in order to make the bran-. sition to Panamanian control a smooth one. * Mr.. Pritchard, a Minority M~mbe.r on the Merchant Marine . and Fisheries Committee, supported H.R. 111. He argued that it was now incumbent upon the US. to meet its solemn resnonsibility to insure t'he. prompt passa~e of the implementing legislation to enable the tTmfrrl States to fulfil the letter and spirit of the treaties~ to' which the U.S. was irrevocably bound. Mr. Dmgell, a Maiority Member of the Merchant Marine and Fish~- cries Committee and a Member of the Panama Canal Subcommittee. supnorted H.R. lii because in his opinion it w's the best proposal to, implement a rather shoddily drawn treaty. Mr. Dingell felt that tr.R. 111 contained several essential provisions which were: the noncorporate agency form; the requirement of expenditures to be made pursuant to authorization and annual appropriation by Cougress; the centrAliza- tion of administrative authority in the Secretary of Defense for Canal PAGENO="0211" 207 operation and defense; and the confirmation by the Senate of super- visory Board members who are appointed by the President. These pro~ visions, Mr. Dingell felt, were essential safeguards in strengthening the poorly-conceived treaty. Mr. Bauman, the Ranking Minority Member of the Panama Canal Subcommittee, stated that the Minority Members of the Merchant Marine and Fisheries Committee voted against the bill H.R. Ill as re- ported but did not do so with any particular malice toward H.R. lii, and in fact those who voted against the bill all felt it was the best vehicle before them. He went on to describe to the House Members his views of what events had taken place as background to the treaties and what the impact would be. Mr. Bauman concluded his statement by arguing that the treaties were one of the saddest and worst mistakes ever made in our foreign policy and now, he said, it was the responsi- bility of the Congress to clean up the mess by passing the strongest legislation possible. Mr. Carney, a Minority Member of the Panama Canal Subcommit- tee, argued that the American people by a substantial margin opposed the treaties. Mr. Carney struck a theme of opposition on the grounds that the transfer of the Canal required funding to pay for that trans- fer. Mr. Carney argued that the House of Representatives had no ob- ligation to appropriate money to pay for a transfer to which it was not a party. He expressed his opinion the cost of this transfer could be borne by two other parties-the Republic of Panama or the users of the Canal. Mr. Carney concluded by emphasizing the need of the U.S. Government to respond to the desires of the people of the United States. Mr. Hansen, a leading opponent of the implementing h~gislation, argued that Panama was officially involved with gun smugglin ~ activ- ities to Nicaragua. which was a violation of the Panama CanaLNeutral- ity. Treaty. Mr. Hansen argued that key treaty proponents promise4 prior to the approval of the Panama Canal Treaty that the American taxpayer would suffer no liabilities as a result of the treaty and that the tolipayers would be protected, which conflicted with the $4 billion cost estimate to the U.S. that had since arisen. Mr. Hansen indicate~l his, intention to offer an amendment termed the "honesty amendment" w1~dch would keep the promises of no tax liability upon which the Senate relied in consenting to the treaties. The ~irnendment to be offered, he said, would transfer all costs to Panama and protect. the U.S. taxpayer. Mr. ~dwards of Oklahoma, an opponent toH.R. 111, argued that~ vote against the implementing legislation is a vote against the Panama canal Treaty. In Mr. Edwards' view, this was the House of Repre~ sentatives chance to do the responsible thing and stop the giveaway, of billions of American dollars. Mr., Rudd, in total opposition to implementing the Pani~m'a CausAl' Treaties, argued that there was no specific prohibition against `c~n:-' gressional appropriations for Canal operations and other aseqélated expenses exceeding the amount of Canal revenues, after contrój of the Canal has been turned over to the Panama Can'~l Commission In his view this absence of any provision for balancing revenues and expendi- tures (meant that the new Panama Canal Commission cOuld `sta~t'di~'- PAGENO="0212" 208 ping into the general fund of the U.S. Treasury, if Canal expenses and: other treaty costs exceeded the Canal revenues. Mr. Rudd believed that the House members had a solemn obligation to amend this legis- lation so that the American taxpayer would not pay any Canal costs beyond Canal revenues as `promised by the administration officials during debate over the Canal treaties. Mr. Zablocki, Chairman of the Foreign Affairs Committee; `argued that H.R. 111 was not a perfect bill and recommended amending sec- tion 108 of H.R. 111 entitled "Control by Armed Forces in Time of War" with the Committee on Foreign Affairs amendment relating to that issue. He argued that this amendment would `accomplish the same goal of section 108 of ER. 111 without departing from the terms of the treaties. The Committee on Foreign Affairs found potential treaty problems with some of the provisions of ER. 111 but Mr. Zablocki felt these provisions could be amended by language which conforms to the treaty and that this could be worked out in the anticipated con- férenee report. He argued that if H.R. 111 were rejected or crippled with counterproductive amendments, the U.S. would be ignoring its security interests in the Canal, its economic interests, `and its standing as a nation which lives up to its agreements and commitments around the world. Mr. Derwinski, a member of `the Committees on Foreign Affair~, and Post Office and Civil Service, argued that H.R. 111 guaranteed the House a strong affirmative voice in clearly spelling out U.S. treaty commitments and responsibilities to manage, operate, and maintain the Panama Canal. Without such a positive response, he felt, the treaty wbuld he subjected to continuous, open-ended interpretation. `Mr. Hanley, Chairman of Post Office and Civil Service, along with tw~ `other members of the Post Office and Civil Service Committee, supported legislation with the Post Office and Civil Service Committee amendment relating to the employee and employee benefits. In Mr. Hanley's opinion the amendment provided the appropriate mix of. benefits and incentives which would ease the transition for Canal em-j ployees; was consistent with the terms of the treaties; and was more than fair to Canal employees. Ms. Holtzman, `Chairwoman of the Immigration, Refugees and Tn~ ternational Law Subcommittee of the Judiciary Committee, aioi~g with' the"other Judiciary members Mr. McClory, Mr. Lungren and,Mr. Fish, supported the implementing legislation with the adoption of the.Judi- ciary Committee amendment whi'ch would have deleted the special immigration provision of H.R. 111. These members indicated their op.- position to the special immigration provision because they believed the present immigration laws were adequate and that the special immigra- tion provision would establish a precedent for blanket admission treat.- merit for other U.S. employee group's around the world. Secret Ses8ion.-On June 20, 1979 the House resumed consideration' of'H.R. 111 under the proceedings o-f the 5-minute rule (see Congres- sioñal Record, June 20, 1979, pp. H4786-H4852). ` `,A secret session was requested by Mr. Bauman in order to present to the House certain facts which he felt were of the classified nature that bore directly on the consideration of H.R. 111. When the House, voted tO move into secret session this was the first time since 1830 PAGENO="0213" 209 that the House had met under that restriction. Time during the se- cret session was controlled by Chairman Murphy and Mr. Bauman (see Congressional Record, July 17, 1979, pp. H6054-116064). Mr. Bauman offered material during the course of the secret session in order to substantiate his views that the Panamanian Government was involved in gun smuggling activities to Nicaragua. Mr. Bauman raised two basic contentions in the secret session: (1) If the Panamanian Government was involved in gun smuggling activities into Nicaragua, then that government was in violation of the Panama Canal Neutrality Treaty of 1977 with the U.S.; and (2) he contended, if the House of Representatives was to make in- telligent judgments when voting on the amendments regarding the neutrality of the canal, all of the relevant facts had to be presented. Mr. Murphy, Mr. Bowen, Mr. Derwinski, along with Members of the House leaJership, Mr. Wright and Mr. Rhodes concluded that the secret session made obvious the extreme importance of passage of H.R. 111 as the only responsible action in securing the continual operation of the Panama Canal for the next 20 years. Without the implementing legislation, Mr. Murphy contended, the Panama Canal treaty would still become effective with all its vagaries. He presented his view that in light of the secret session a strong implementing package would be preferable for the interests of the United States. Amendments `in the House.-After the recent session the house re- solved itself into the Committee of the Whole House on the State of the Union for further consideration of the bill, H.R. 111, under the five-minute rule for all amendments. An amendment was offered by Mr. Pashayan changing the title of the "Panama Canal Act of 1979" to the "Panama Canal Defense Act of 1979." The title amendment was agreed to by a voice vote. A preferential motion was offered by Mr. Bethune which would have struck the enacting clause. The motion would have postponed all debate until it had been decided what material from the secret session the House would have been able to discuss in open debate~ The preferential motion was rejected by a roll-call vote of 97 ayes to 313 nays. An amendment was offered by Mr. Hanley, Chairman of the Com- mittee on Post Office and Civil Service, containing the employee pro- visions of title III of H.R. 1716 which was reported by the Committee on Post Office and Civil Service. This amendment would have au- thorized an immediate retirement annuity for employees who retire at age 48 after 18 years of service, but also required the annuity to be reduced by 2 percent for each year the retiring employee was under 5, It was believed by the Post Office and Civil Service Committee that this reduced the retirement costs by approximately $102 million over the life'of the treaty. The amendment would have limited the applica- tion of this higher annuity rate to those employees whose continued service was determined by the President to be essential. The wording of the amendment also spoke to the question of the employees whG lose their jobs as a result of implementation of the treaty who would not be given any greater placement assistance than is accorded to Fed- eral employees in the U.S. who were similarly displaced. The amend- ment also would have deleted the special cost-of-living allowance tc~ the employees of the Panama Canal Commission. PAGENO="0214" 210 Mr. Murphy offered an amendment to Mr. Ilanley's amendment which incorporated many of the useful technical and conforming changes in Mr. Hanley's amendment as well as preserving the thrust and intent of the employee benefits of the original H.R. 111. Mr. Murphy's amendment reinstated the provision on early retirement, placement assistance, and a cost-of-living adjustment from the origi- nal H.R. 111. In the opinion of Mr. Murphy these provisions were critical to maintaining the skilled work force necessary for the con~ tinned efficient operation of the Canal. Mr. Murphy's amendment to Mr. Hanley's amendment was agreed to by a roll-call vote of 277 yeas to 142 nays. Mr. Courter offered an amendment that would have struck the lan- guage providing for a sabbatical leave program for school teachers in Panama transferred from the Canal Zone Govenment. Mr. Courter's amendment to Mr. Murphy's amendment was rejected by a division vote of 14 yeas to 35 nays. An amendment was offered by Mr. Treen which exempted cargo originating in or destined for the United States from a capital sur- charge on tolls for expansion and improvement of the Canal. Mr. Treen's amendment was agreed to by a voice vote. * A technical amendment was offered by Mr. Murphy to cure techni- cal violations of section 401 (a) of the Budget Act. Section 401(a) of the Budget Act prohibits consideration of legislation for new contract `or borrowing authority unless that authority is specifically made sub- ject to amounts provided in advance in appropriations acts. A pro- vision in H.R. 111 as reported which permitted the Panama Canal `Commission and the U.S. Postal Service to assume obligations of the Canal Zone Postal Service would have violated Section 401(a). The technical amendment was agreed to by a voice vote. An amendment was offered by Mr. Biaggi which would have pro- vided that no payments are to be made to Panama until all outstand- ing claims of American citizens for compensation for property ex- propriated by the Panamanian Government are paid. The proponents of the amendment argued that it simply insured that American in* terest~ are fully protected under the terms of the implementation of the Panama Canal' Treaty. Opponents of this amendment argued that adoption of the amendment would be a clear violation of the treaty language. They argued that this condition on the payments to Panama stated by the amendment are entirely extraneous to the treaty. Mr. Biaggi's amendment was rejected by a roll-call vote of 194 yeas to 227 nays. An amendment was offered by Mr. Hansen which he termed the "honesty amendment" which would have insured that no costs from the treaty appertained to U.S. taxpayers and also would have insured minimum rates for toilpayers and consumers in implementing the treatyby transferring all the costs to Panama. Mr. Murphy offered an amendment to this Hansen, amendment. The Murphy amendment was supported by the argument tha~t it protected U.S. taxpayers from paying any money to the Republic of Panama and clarified that the payments to Panama can only come from the revenues collected from the tolls deposited in the Panama Canal Corn- mission Fund and subsequently appropriated by Congress. PAGENO="0215" 211 *Mr. Murphy argued that his amendment prevented the basic thrust of the Hansen amendment since the Hansen Amendment would pro- dude any payments to Panama which were mandated by the Panama Canal Treaty and therefore the amendment was clear treaty violation. Mr. Murphy argued that his amendment not only would protect the U.S. tn~payers from any costs to Panama but also would implement the treaty. Mr. Murphy's amendment was agreed to by a roll-call vote of 220 yeas and 200 nays. Mr. Hansen's amendment as amended by Mr. Mur- phy's amendment was further agreed to by a roll call vote of 255 yeas and 162 nays. This was the last vote on June 20, 1979. The House agreed to complete the rest of debate on H.R. 111 on June 21 and was scheduled to startS at 10:00 o'clock and to conclude debate and final vote m 3 hours. Consideration of H.R. 111 by the House continued on June 21 (see Congressional Record, June 21, 1979, pp. H4871-H4902). An amendment was offered by Mr. Rudd which specifically required the Panama Canal Commission to operate on a self-sustaining basis by limiting appropriations to it or for its use to the amountof Panama Canal revenues to be deposited in the Panama Canal Commission Fund in the Treasury as estimated by the Department of Defense and certi- fied by the Comptroller General. Mr. Rudd's amendment was agreed to by a voicevote. Due to a clerical error the version of Mr. Rudd's amendment as adopted contained a provision which was not intended to be part of the amendment, striking Section 233 of the bill establishing the Emergency Fund. Mr. Bauman, on June 25, 1979 obtained unanimous consent to reinstate section 233. (See Congressional Record, June 25, 1979, p. H5036). During the continuation of debate on H.R. 111 on June 21, an amendment was offered by Mr. Bauman which extended the bill's pro- vision for defense of the Canal to include the situation where the Republic of Panama is at war. Thus, under the amendment, in time of war in which either the U.S. or Panama was engaged or when war was imminent the President could have moved to have the Canal Commis- sion controlled by a U.S. officer of the Armed Forces. Mr. Baurnan's amendment was agreed to by a voice vote. An amendment was offered by Mr. Kramer which would have defined the Republic of Panama, for purposes of placement of Pan- amanian nationals on the supervisory Board, as the country p~overned by a national government having been installed by free elections. Opponents of the amendment argued that it violated the Panama Canal Treaty and would make the TT.S. the judge of the governmental affairs of a sovereign Panama. Mr. Kramer's amendment was rejected by a vote of :142 yeas and 274 nays. An amendment was then offered b~ Mr. Bauman which redefined the special immigration status for Canal employees by authorizing special immigrant status for employees and their dependents whose welfare was endangered as a result of the Panama Canal Treaty. This category was inserted in lieu of a provision in the reported version of H.R. 111 conferring special status on former employees of the Canal or~aniza- tion residing in Panama. The Bauman amendment also limited the PAGENO="0216" 212 total, number of persons who could enter the U.S. under the immigra- tion provision in the bill to 7,500. Mr~ Fish offered, an amendment to Mr. Bauman's amendment. This amendment to the amendment would have limited the immigration status ~omferred by the legislation to present or previous* employees of the. Panama Canal Company, or Canal Zone Government, who find their personal safety threatened after the Treaty is effective. The am~ndn~ent to the amendment placed an overall limit of 1,000 Of those who could enter the TJ.S. under such a provision. Mr. Fish's amend- ment tO Mr. Baurnan's amendment was rejected by a division vote of 11 yeas and 12 nays. Mr. Bauman's amendment was agreed to by a division vote of 57 yeas and 13 nays. An amehdment was offered by Mr. Davis which deleted a provision inserted by the Panama Canal Subcommittee exempting U.S. fishing ve~sOis from a tariff on any nets purchased, or net repair work com- pleted or repairs done in the Republic of Panama. Mr. Davis argued that the provision in the bill exempting the tariff was under the juris- diction of the Ways and Means Committee and would create unfair competition for American companies. Mr. Murphy argued that the Committee language would simply cofitinue the exemption that was applying to the Canal Zone before the new treaty became effective and he argt~ed~ the provision would protect the American-flag purse seine tuna fleet from the imposition of a new tariff without a change in op- eratior~. Mr. Davis's amendment was agreed to by a division vote of 2 yeas and 10 nays. An amendment was offered by Mr. Fuqua which would have de- lèted the language in the bill that authorized the Department of De- fense to operate the Canal Zone College. Mr. Fuqua argued that the operation of the College should be contracted out as for other over- ~eas institutions of higher learnin~g under DOD auspices. Opposition to the amendment was articulated by Mr. Bonior, who argued that the College was an element of stability in the Canal area community, that its continuation would aid in retaining skilled U.S. workers at the Canal, and finally, that the College was helpful to U.S.-Panama- nian relations. Mr. Fuqua's amendment was rejected by a voice vote. An amendment was offered by Mr. Pashayan which would preclude payments to Panama if the U.S. President or Congress determined that the Republic of Panama was interfering in the internal affairs of any other state. Payments could be resumed when such interference had ceased. Mr. Pashayan's amendment was agreed to by a voice vote. An amendment was offered by Mr. Montgomery which would have transferred to the Government of Panama such costs as might be in- curred by the relocation constructibn or movement of U.S. military facilities as a result of the Panama Canal Treaty. Proponents of the amendment argued that Panama should pay for the valuable assets it was ~receiving free of charge. Opponents argued that the amend- ment violated Article XIII of the Panama Canal Treaty and that it was in essence the same amendment that had been offered by Mr. Han- sen. Mr.. Montgomery's amendment was rejected by a roll-call vote of 210 yeas abd 213 nays. Ayi amendment was offered by Mr. Phil Crane which stated that no property in the Canal Zone shall be disposed of except pursuant to PAGENO="0217" 213 law enacted by the Congress after December 30, 199. Mr. Crane argued that total control of the eanal property, including the Panama Canal Railroad, was essential until the year 2000. Chairman Murphy argued that the prerogatives of the Congress concerning 1~he disposi- tion of property had been protected in H.R. 111 as reported. Mr. Crane's amendment was rejected by a roll-call vote of 177 yeas and 248 nays. An amendment was offered by Mr. G-oodling which~ would have required that no U.S. property after April 18, 1978 may be transferred to the Republic of Panama unless the Republic of Panama pays the fair market value for the property at the time of the proposed trans- fer. Mr. Goodling's amendment was rejected by a voice vote. An amendment was offered by Mr. Roth which required the Presi- dent to enter into negotiations with the Republic of Panama to make arrangements for the stationing of U.S. military forces in the Republic *of Panama after the expiration of the treaty. Mr. Roth argued that the amendment would follow up the Nunn-Talmadge Reservation to the Neutrality Treaty, and Chairman Murphy agreed with this view. Mr. Roth's amendment was agreed to by a voice vote. Debate on amendments having ended by reason of the expiration of the time limit, a motion to recommit was offered by Mr. Bauman which would have recommitted the bill to the Committee on Merchant Marine and Fisheries with instructions to report back the same bill to the House with the Hansen "honesty amendment". This amendment would~ have transferred all costs incurred from the Panama Canal treaty to the Republic of Panama. According to Mr. Bauman, this motion al- lowed for a direct vote on the "honesty amendment" which was pre- eluded earlier because of the adoption of Mr. Murphy's amendment which was offered as an amendment to the Hansen amendment. The motion to recommit was rejected by a roll-call vote of 210 yeas and 216 nays. The motion to recommit was followed by the final vote on H.R. 111. House approval was given to the bill by a roll-call vote of 224 yeas to 202 nays. The final vote was followed by a title amendment offered by Mr. Pashayan. The title of the legislation was changed to read: "to enable the United States to maintain American security and interests respect- in~ the Panama Canal, for the duration of the Panama Canal Treaty of 1977." The title amendment was adopted by a voice vote. This con- cluded the floor action on H.R. 111 as amended. AS'enate Consideration of H.R. 111.-In the Senate H.R. 111 was referred to the Committee on Armed Services, which holds the primary responsibility for Panama Canal jurisdiction in that body. That Com- mittee held hearings on June 26 and 27 on 5. 1024. a bill dealing with the same subject as H.R. 111 and H.R. 1716, at which representatives of the Administration, public witnesses (an accountant, union leaders, and various maritime and business representatives), and Members of Congress testified. The Armed Services Committee had earlier held hearings on the Panama Canal Treaty and had obtained a management study of the effects of the Canal treaties on the responsibility for op- erating the Canal. During the hearing process and in its report on H.R. 111 (Senate Report No. 96-255) the Armed Services Committee PAGENO="0218" 214 g~wé ~special attentiofi to issues of costs, Panama Canal Commission power~and,organization, the form of agency under which the Co,rnmi~ sion.' was to be established, employment benefits, special immigratith~, transfer. of U.S. property, and perceived treaty viblations. in th~ legislation. On'JW~ .21 the Armed Services Committee reported H.R. 111. `The reported bill adopted the approach suggested by the Executive Branch with ~espect to the organization ~and powers of the Commission [see comparison `of approaches and analysis in this report of Execntive draft: of legislation and also in the Report of the Committee on Mer- chant Marine and Fisheries, (95th Congress)] and the provisions of the legislation for payments to the Republic of Panama, but the bill as `report~d to the Senate adopted the approach taken by the House in IT.R. 111 with respect to employment `and employee benefits. Several itew" provisions were written into the bill by the Senate Committee in the hght of problems that arose during the period of the consideration of the legislation. Thus, of 97 provisions in the Armed Services Corn- *mittee bill, 31 were derived from provisions which appeared in the Executive-sponsored draft of the legislation (introduced as S. 1024 in the Senate), 51 were derived from the House version of H.R. 111, and ~were'new provisions. The new provisions concerned payment of i~nter~ `est to the Treasury; the transfer of certain funds from the Panama Canai Company to the Department of Defense to compensate for the leave" and repatriation expenses of transferred employees; a require~ i~ient to make effective the bill's provision on parole and pardons only' where the treaty on transfer of prisoners between the u.S. and Panama took `effect; limit on the admission of speciaa immigrants under the Panama Canal Act to 25,000 with no more than 7,500 permitted to enter each year; and certain repeals andamendments. `On July 26 the Senate took up consideration of H.R. 111 after the p~sage of a resolution waiving Section 402(a) of the Budget Act. In the course of consideration of H.R. 111 `on that date, six amend- ments were proposed. The sole amendment approved by the Senate `was one. which incorporated a labor-management provision identical to, that in the House passed bill. This was approved by a roll call yote' `of 53 to 45. The five proposed amendments to H.R. 111 that were rejected on' July26: `(1) Stipulated that no property of the United States located in the Republic of Panama could be disposed of except pursuant to `~" ~n Act of Congress (rejected by a vote of 41 yeas to 56 nays) ~ (2) Provided for an interoceanic canal study (rejected by a vote of 43 yeas to 54 nays); (3) Required all costs of treaty implementation to be paid be- fore the contingency payment to Panama is made under Article XIII 4(c) of the treaty (the amendment, identical to the House- passed provision, was rejected by a vote of 34 yeas to 62 nays) ; `(4) Authorized the President to take any action necessary. to keep the Panama Canal open, secure, neutral, and accessible, not- withstanding any vote by members of the Panama Canal Commis- sion, (rejected by a vote of 46 yeas to 50 nays) ; and PAGENO="0219" 215 (5) Stopped payments to Panama if that country interfered in * the internal affairs of other countries (identical to a provision'.m the House-passed bill, and rejected by a vote of 22 yeas to 73 nays).. After completion of its debate on all amendments to H.R. 111, the Senate approved final passage of the legislation by a vote of 64 yeas to 30 nays. Conferees and instruetion.-Following Senate passage of IT.R. 111 on July 26, the bill was returned to the House on July 27. When Chair- man Murphy made a unanimous consent request to disagree to the Senate amendment to H.R. 111 and ask for a conference, Mr., Baurnan objected on the grounds that conferees from four committees would be appointed, but all conferees apparently would be empowered to vOte on all aspects of the legislation. On July 30, the Committee on Rules wrote and approved a rule (H. Res. 430) permitting the House to request a conference with the Senate on H.R. 111. On the same day the resolution was agreed to by the House with little debate on its substance. Following the apprOval of the 11. Res. 430, Mr. Bauman offered a motion to instruct the I-louse conferees to adhere in the conference with the Senate to the language of sections 101, 102, 103, 104, 105, 110, 231, 232, 233, 234, 235, 236,250, 371, 372, 373, and 374. These sections of the House bill concerned the form, organization, and powers of the Panama Canal Commission; the funding of the Commission; payments to Panama; and the thsix~si- tion of U.S. property. Mr. Bauman and Chairman Murphy argued that the sections con- tained in the instructions were integral to the purposes of the House version of H.R. 111. Mr. Bauman argued that the Administration had planned to defeat the tenets of the House version by supporting the Senate version in conference. Mr. Hansen also spbke in strong sup:pOrt of the motion to instruct, as did Mr. Montgomery and Mr. Charles Wilson of Texas. Mr. * Bowen, Mrs. Schroeder, and the opponents of Mr. Baumán's n~otion to instruct argued that instructing House confereeS would make negotiations more difficult with the Senate. On a roll call vote, the motion to instruct was approved by 308 yeas to 89 nays. Following the roll call vote Messrs. Murphy of New York, Dingell, Bowen, Hubbard, Bonior, Wyatt, Zablocki, Fascell, Hanley, Ms. Holtzman, Mrs. Schroeder, Messrs. Harris, McCloskey, Bauman, Carney, Broomfield, Derwins'ki, and Fish were appointed as conferees of the House. On July 31, the Senate insisted on its amendments, agreed to a conference with the House, and appointed as conferees Senators" Sten- ms., Jackson, Exon, Levin, Thurmond, Warner, and Humphrey. The conferees first met on August 1 and generally discussed major issues involved in the legislation, including the form in ~hicl~ the ,Panama Canal Commission was to be established, the funding of the Comirnssion, and certain employment issues. On `September 11, following meetings between staff of the comfrdt- tees concerned, the conferees met to discuss in mere `detail the major issues identified for resolution. Senator Levin presented a major pro- posal on behalf of some of the Senate conferees on the subjects of form PAGENO="0220" 216 of agency; financing of the Commission; membership on the super- visory Board; control of the Canal in wartime; a code of conduct; minimum wage; payments to Panama; property disposition; guar- antees for transferred employees; chief engineer; claims; iimmgra- tion; and the interim toll setting procedure. No final resolution of differences was arrived at in the September 11 meeting. On September 17, conferees again discussed report language, and language for the statement of conference managers, concerning the issues raised at the previous session. The conferees also discussed the issue of immigration and the rate for payment of interest. The thrust of the discussions centered upon a final resolution of the major issues in the bill, and agreement was obtained on these issues. On September 17 the first conference report on 1I.R. 111 was filed in the House (House Report No. 96-438) and on September 18 in the Senate (Senate Report No. 96-320). On September 20 the Senate ap- proved the conference report by a vote of 60 yeas to 35 nays. Ap- proval. followed Senate rejection (by a vote of 45 yeas to 50 nays) of a recommital motion offered by Senator Dole. His motion would have required that the recommitted conference report bring back language that would cause a cessation of treaty payments and property transfer to Panama if foreign military forces (other than those of the United states) were stationed in Panama. Senator Levin argued that the insertion of such language would subject the report to a point of order and interfere in the internal affairs of Panama. Following Senate approval, the House of Representatives also took up consideration of the conference report on the bill H.R. 111 on September 20. In the course of the House debate, Chairman Murphy offered that the conference report met the guidelines of the House in six basic areas of interest: form of agency; the location of the agency in the hierarchy of the U.S. Government; coordination of the opera- tion and defense of the Canal; the constitutional prerogative to trans- fer property; protection of the U.S. taxpayer; and protection of Canal employees. Chairman Zablocki of the House Foreign Affairs Committee and Mr. Derwinski, Mr. Bonior, Mrs. Schroeder and Mr. Bowen also supported adoption of the report. Mr. Bauman opposed adoption of the conference report on the grounds that there remained adequate time to change the report before October 1 and also that the house of Representatives could retain, in the conference report language, more of the provision authored by the body. Mr. Carney, Mr. Spenee, Mr. Bethune and Mr. Hansen all opposed the report on the grounds that Panama should not be con- veyed the Canal, and that the approval of treaty implementing legis- lation was a sign of U.S. weakness. On a rolicall vote the conference report was defeated by a vote of 192 yeas to 203 nays. Following defeat of the report, conferees on H.R. 111 were reappointed. Senate conferees for further conference on H~R. 111 were reappointed on September 21. The same Members who served on the first conference committee were "chosen" for further conference on the legislation. Because comparative view of the House and Senate versions of the bill and the terms of resolution of the various issues as contained in PAGENO="0221" 217 the first conference report would appear to be integral to an under- standing of the history of the Panama Canal Act, such a comparison is provided in the section which follows. 188ue8 for Co'nference.-The fundamental difference between the House version of H.R. ill, as approved on June 21, and the Senate version approved on July 26 was in the relationship of the Congress to the finances and property of the Commission, the placement of the Commission in the hierarchy of the U.S. Government and the powers and organization of that agency. Overall, there were more than 40 differences between the texts of the bill as passed by the two bodies. Despite these basic differences in key areas of the legislation, there was considerable similarity between a number of House and Senate provisions in H.R. 111, especially in the area of employment. A total of 34 provisions in the Senate bill were identical or identical in substance to the 105 distinct provisions in the House bill, and 19 of the 105 provisions were similarly treated in the Senate version. For the purposes of a more precise history of the resolution of differences between the House and Senate versions of H.R. 111, what follows is a brief rósum~ of the position held on each issue by both bodies, with the resolution in the first conference report of each of the issues (It must be noted that a new committee of conference drafted six changes to the first conference report followifig its rejection by the House in order to make the subsequent report more amenable to the two bodies). AGENCY STRUCTURE Form of Agency.-The House bill established the Panama Canal Commission as an appropriated fund agency, with finances subject to the Budget and Accounting Act of 1950. The Senate bill established the Commission as a Government corporation under the Government Corporation Control Act. On this most important issue, the provisions of `the House bill were adopted by the conference committee. Direction by Secretai'ij of Defense.-The House bill provided that the Commission shall operate the Canal subject to the direction of the Secretary of Defense. The Senate bill continued the stockholder concept (President or his designee) but did not subject the Com- mission to any Secretary. rrhe conference committee adopted laiigua~e making it clear that the Panama Canal Commission is an a~ncv rn the Executive branch and providing that the powers of the President with respect to the Commission were to be exercised through the Sec- retary of Defense. Board Membersltip.-The House bill provided that of the U.S. nationals on the nine-person supervisory board, one shall be the Sec- retary of Defense or his designee and three of the five shall be from the private sector, one each expert in labor matters, port or export- import business, and TLS.-flag shipping. The Senate bill did not mandate private or public sector U.S. board members nor did it desig- nate Department officials. The first conference committee adopted language retaining the concept that three of the five U.S. members. of the Board be from the private sector but eliminating the need for back- ground in specific subject areas (this changed by second conference report). PAGENO="0222" 218 Chief Engineer.-The House bill provided for a post of Chief Engineer of the Panama Canal Commission. The Senate bill did not provide for any such post. The provision of the House bill was adopted. Adm~inistrator.-Tha House bill did not define the role of the Ad- ministrator. The Senate bill stated that the Administrator shall be the Chief Executive Officer of the Panama Canal Commission. The provision of the House bill was adopted. Control of Canal During Wartinw.-The House bill continued a provision of law authorizing the President to appoint a military `olli- cer to assume exclusive control of the Panama Canal in wartime, or when war is imminent for the United States or Panama. The Senate bill repealed the provision of law on wartime operation of the Canal and did not provide any new language in this regard. The conference committee adopted language stating that the President could order the Administrator of the Panama Canal Commission to comply'with the orders of a designated military officer when the security of `the Canal is threatened. (The statement of managers on this changed in the second conference report.) Code of Conduet.-The House bill provided for a Code of Conduct for U.S~ and Panamanian board members and employees based on tT,S. and Panamanian law. The Senate bill contained no comparable provision. The provision of the House bill was adopted. FINANCES 7"iming of Payments to Panama.-The House bill provided that payments of all but the contingency payment should be made monthly. The contingent payment is to be made at the end of the second fiscal quarter after the fiscal year for which it may be due. The Senate bill contained no stipulations on the timing of payments to Panama. The c~nference committee adopted the Senate provision. Method of Payments to Panama.-The House bill provided that the Panama Canal Commission shall make payments to Panama out of appropriations for that purpose. The Senate bill provided that the Panama Canal Commission shall pay directly to Panama out of Canal operating revenues the payments under the Panama Canal Tre~ty, * The conference committee adopted language stating that the Corn- missioi~. shall make payments to Panama as required by the treaty. Under other provisions of the `bill, such payments are required to be i~iade, from appropriations. Public Serviee Payment to Panama.-The House bill provided that the public service payments to Panama (paragraph 5, Article III. of `Treaty) shall be audited annually by GAO and any overpayment in aocordance with Understanding (1) to the Treaty shall be refunded `h~ Panama or set off against amounts payable by the United States., for public services provided by Panama. The Senate bill stated that the ,publie service payment shall be considered an operating expense of the Panama Canal Commission. The House provision was adopted by ~ conference committee. `,çeasation of Payments for Retroactive Taa,ation.-The Housebill. cp~tained a provision denying treaty payments to Panama for any period during which Panama levied taxes retroactive to `the entry into PAGENO="0223" 219 foree of. the Panama Canal Treaty on Canal Zone businesses or orga~ nizations. The Senate bill contained no comparable provision. The conference committee adopted language stating the sense of the Oon~ grass that retroactive taxation was prohibited by the Panama'.Canal' tJ'reaty (changed by second conference report). . . Zimplenwntation Costs Paid Prior to Contingent Payment.-~-The House bill provided that no contingent payment can be made to P~n~ma until all costs of implementing the Panama Canal Treaty, as deijned by the Comptroller General, are paid. The `Senate bill hadno comparable provision. The conference committee adopted language stating no contingent payment could be made until all costs associated with' the operation and maintenance of the Canal are paid. Prohibitions on Reprogramming and Property Trans fer.-'The House" bill stated that, notwithstanding provisions of law' allowing transfers, etc. between accounts and disposal of property,. and not-. withstanding the Panama Canal Treaty, prohibitions in the' bill on property transfer, payments to Panama, and appropriations for the `Ca~al Commission shall apply.' The Senate bill had no comparable prov'i'sion. The conference committee adopted language that. `stated' prohibitions in the bill on appropriations shall apply notwithstanding other provisions of law allowing transfers of funds between aecotrnts or other financial transactions. Cessation of Contingent Payment for Panaima Interference in O'thè~ Countries.-The House bill provided that if the President or Congress by concurrent resolution finds that Panama is interfering in the affairs of other countries, no contingent treaty payment or pay- meñt under the Economic/Military executive agreement of September 7~, 1977 can be made until the President or Congress by concutrent resOlution finds interference has ceased. The Senate bill had no com-' parable: provision. `The conference report had no provision and thus adopted the Senate view. `Taxpayer Protection.-The House bill provided that no property shotild be transferred to Panama unless Panama has paid `all its debts to the Panama Canal Commission, and only" unless funds in the Pan- ama Canal Commission Fund had been `used for treaty payment to Panama. The House version further provided that TJ.S. property in Panama may not be transferred unless the President had in.f9rmEs4 Panama that no payments to Panama `shall be derived from `tax re*~ nues, that the U.S. retains full discretion `as to use of tax revenues, `that Congress will authorize and appropriate all taxpayer funds to gd toward treaty implementation, and that total amounts expended for the Panama Canal Commission shall not , exceed Comn-nssion revenues. These provisions did not apply to the disinterment, `and reinterment of deceased U.S. citizens' in Panama under `Reservation `3" to the Neutrality Treaty. The Senate provision ,stated the sense of the `Congress that costs of implementing the Treaty should be kept to :a minimum and that direct appropriated costs of implementation should' be nO greater than $665,700,000 and subse4uent adjustment for' inu1a~' tion. C'osts of implementation were to be consistent with U.S. obliga- `ti~ns to run the' Canal safely and efficiently. The' conference committee adopted the entire Senate provision with.technical changes. ~Fhe' essence of the House provision on the President"s advice' to' "Panama was adopted, but the first ~stated prohibitions on the `Pan- PAGENO="0224" 220 amanian debts and payments from the Commission Fund were not included. Calculation of Interest.-The House bill stated that for purposes of cost accounting and establishing rates of tolls, interest would be calculated on U.S. investment in the Canal on the day preceding the effective date of the Act increased by subsequent appropriations and the value of property transferred to the Commission and decreased by deposits of Canal revenues in the Treasury, and property transferred to Panama and other government agencies. The interest rate on the mvestment was to be determined by the Secretary of the Treasury taking into account the average market yield, for the month beginning each fiscal year, on outstanding U.S. marketable obligations. The Senate bill provided that the interest on the U.S. investment was to be paid based on the Canal Zone Code formula that applied to the Panama Canal Company minus the average cash balance of the Commission on deposit with the Treasury. Payment of interest was to~ be made to the extent earned, or paid from subsequent earnings at a rate of interest determined by the Secretary of the Treasury. The conference committee adopted the House language with slight tech- nical revision. Di~spo8ition of Co~impany/Government Fu'nd$.-The. House bill con- tained provisions requirino~ that, on the effective date of the Act~, Panama Canal Company rinds would be transferred to a "Panama Canal Commission Fund" in the treasury. All receipts of the Com- mission which before the effective date would have been Pana~na Canal Company Funds were to go to the Commission Fund. Unex- pended appropriations to the Government funds were to be deposited in the general fund of the Treasury. The Senate bill provided that the Commission would succeed to the assets and liabilities of the Panama Canal Company if such assets were not transferred to Pan- ama or to other U.S. government agencies. The conference committee adopted the House provision. Balancing of Re~enuee and Appropriations.-The House bill stated that funds appropriated to the Panama Canal Commission for any fiscal year should not exceed its projected revenues as estimated by the Secretary of Defense and certified by the Comptroller General. Deductions from future appropriations would be made to the extent that appropriations exceeded revenues. There was no comparable pro- vision in the Senate bill (although the Senate bill would have con- tinued in effect Canal Zone Code provisions designed to achieve the goal of balancing corporate revenues and expenditures). The confer- ence committee adopted the House language except for the provision for deduction from future appropriations. The conference language also allowed amounts deposited with the Commission in prior years and remaining unexpended to be counted with revenues~ Emergenc~ Fund.-The House bill contained a provision creating an Emergency Fund for insuring continuous, efficient, and safe oper- ation of the Panama Canal. The provision stated withdrawals from the Fund because of unprogrammed increases in traffic could be made in amounts greater then revenues to be generated by such traffic, that the fund was not available for payments to Panama and that any funds withdrawn must be repaid. The Senate bill had no comparable pro~ PAGENO="0225" 221 vision (but did allow the $40 million borrowing authority of the Corn- P~113T to carry over to the Commission). The conference committee adopted the 1-louse provision. Audit~ng of Com'iniss'on.-The House bill contained a P~OV1SiOfl making the Panama Canal Commission subject to audit by the General Accounting Office pursuant to the Budget and Accounting Act of 1950. The provision stated that the GAO is to have access to all necessary facilities for the audit, and a GAO statement issued not later than six niont.hs after the end of each fiscal year shall describe the results o-f the audit, including the costs of treaty implementation, and including un- lawful expenditures, etc. The Senate bill did not conta.m a similar pm- vision (although the iole of the GAO in auditing under the Government Corporation Control Act would have continued to apply). The conference committee adopted the I-louse provision in full, and thei.i added language requiring the Comptroller Genera.l to recognize the problems ot transition to a new agency when the GAO makes their audits and reports for Fiscal Year 1980. TOLLS Use Riq1~fs.-The I-louse bill ha-cl no provislon relating ainoitiza- tion of use of rights to costs which must be covered by tolls. rllhe Senate hi 11 provided that toll rates will be calculated to cover, among other things. amortization of use rights. rflle conference. coimnittee in effect adopted the I-louse view by including no such language on aiiioit-ization of use rights. Pci?/m.cnt of Tolls by Goce.rnme~it Vessels.-Thie I-louse bill provided that the President may require TJ.S. government vessels to pay tolls or, if they are not reqiured to pay tolls, t.o provide computation of such for the pimipose of prescribing toll ra.tes and computing payments to Panama. The Senate bill stated that the TT.S. governmentS vessels shall pay tolls. The conference committee adopted the Senate view. Sn.ie/ia-rqe.-The. I-louse bill stated that the costs of interest, clepre- ci.a.tion, a-nd capital for i~ln.nt replacement, e-tc. would be recoveredi through a toll surcharge. Except a-s requjred by treaty, credit for the surcharge may be given for cargo originating in or destined for the TT.S. or Panama. rilolis would be. calculated to cover, among other things, capital for plant repl a.ceiiient, et.c. The Sen ate hi 11 provided that tolls may cover a capita-i reserve account.. The conference commit-tee adopted language that requires toils at time Canal to 1e set at rates to recover funds for p1 ant replacement., expansion, an ci lmprovements. Jnteijm Toll A d-ji(8fn? ent.-The I-louse bill a-uthrnrized the Panama Canal Company to initiate a-li increase in toll rates t.o cover costs of op- ciation during the first. year of the Panama Canal Treaty. but required compliance with l)rocedures in the bill. The Senate. bill authorized the Panama Canal Company to change rates subject to President.ia.l ap- proval after three months notice in the Federa.i Register. if l)OSSihle. The conference coimnittee adopted language that pei.mit.teci t.he Pa-n- a-ma Canal Company to propose and the President to approve an ad- ~ustmeiit in tolls t.o cover the first year of Commission operations with- out regard to the normal procedures. - 5(4105015 PAGENO="0226" 222 LMFLOYE1~S Minimum Wage.-The House bill applied the Fair Labor Stand- ards Act to areas used by the U.S. under the Panama Canal Treaty for purposes of minimum wage, maximum hours, inspections, records, and child labor. The Senate bill had no comparable provision. The confer- ence committee did not adopt language to apply the Fair Labor Stand- ards Act but rather incorporated language outlining wage policies to be followed by U.S. agencies operating in Panama. The policy estab- lished set a floor of $2.90 per hour for employees with a minimum two percent pay increase each year for employees on a non-U.S. wage scale. Cost of Living Adjustment.-The House bill authorized U.S. citi- zen employees of the Panama Canal Commission an allowance de- termined by the Commission to offset increased costs of living due to loss of privileges from sales stores, military exchanges, etc. The Sen- ate bill authorized an allowance determined by the Commission to U.S. citizens employed prior to the entry into force of the Treaty or to Commission personnel recruited outside of Panama. The conference committee adopted the Senate language. Hducational Benefits.-The House bill authorized one round-trip annually for undergraduate education of dependents (under 23 years of age) of U.S. citizens employed by the Commission. The Senate bill authorized one round-trip annually for undergraduate educa- tion of dependents (under 23 years of age) of either U.S. citizens employed before the entry into force of the Treaty or of employees recruited outside of Panama after the new Treaty enters into force. The conference committee adopted the Senate language. Guarantee of Pay Bases.-The House bill included rates of basic pay as well as bases for establishing rates of basic pay in those terms and conditions of employment which are guaranteed to be no less favorable to employees of the Panama Canal Company and Canal Zone Government who transfer to the Commission or to another U.S. Government position in Panama, or who are separated due to the treaty but rehired by the Commission before 6 months lapses. The Senate bill, for this same group, guaranteed only rates of basic pay. The conference committee adopted the Senate position. Guarantee of Leave and Travel Carryover.-The House bill, for the same group of persons as are affected by the previous issue, guar- ~tnteed leave and travel to be no less favorable than those in effect prior to October 1 for the same employees. The Senate bill also guar- anteed leave and travel, except as modified to provide equity with employees of agencies to which an employee may be transferred. The conference committee adopted the House position. Teachers Sabbatical.-The House bill continued a provision author- izing the Department of Defense to grant a sabbatical to Canal Zone Government teachers transferred to the Defense Department Over- seas School System. The provision stated that the sabbatical, for study or uncompensated work experience, will not result in a loss of bene- fits for such teachers; may not be taken more than once in a 10-year period, and unless the teacher has completed 7 years of service as a teacher, and if the teacher is eligible for voluntary retirement with annui~ty. A grant of a sabbatical is contingent upon the teacher's agree- PAGENO="0227" 223 merit to serve 2 more consecutive years in the competitive service, and the teacher is liable to the United States if he fails to meet the sab~ batical conditions. The Senate bill contained no comparable provision. The conference committee adopted the House provision for sabbaticals, except that compensation during the sabbatical period was to be on the same basis as previously provided by the Canal Zone Government (half-pay). Privileges a'nd Immunities.-The House bill stated that the Secre- tary of Defense shall designate officers and employees of the Panam~i Canal Commission and other individuals entitled to the privileges referenced in Article VIII of the Panama Canal Treaty, and that the Department of State shall furnish the list to, and update it for, Panama. The Senate bill stated that the Secretary of State shall from among persons recommended by the Panama Canal Commission mans- tam and furnish to the Republic of Panama the list of officials for privileges under Article VIII. The conference committee adopted the House provision. Reimbursement for Use of Employees by Panan'&a.-The House b~l1 contained no provision regarding the use of Panama Canal Commis- sion employees by Panama. The Senate bill stated that reimbursemeht by Panama for U.S. employees under paragraph 8 of Article X of the Treaty for functions and activities transferred to Panama shall be made to the Panama Canal Commission. The conference committee adopted the Senate provision. Scope and Equality of Health and Educational Services, etc.-The House bill stated that the Department of Defense or the agency desig- nated by the President to carry out the educational and health cure services formerly carried out by the Canal Zone Government and Panama Canal Company may have appropriations made available to it, and would provide such services to persons formerly eligible to receive them. Expended amounts were reimbursable to the agency from agency appropriations bearing the cost of the employee coin- pensation concerned. The Senate bill authorized the agency designated by the President to provide educational and health services to th