I have no further questions.

Senator BARTLETT. Mr. McKernan, immediately following your prepared statement I am going to ask unanimous consent to place in the record the report of the Department on S. 627, dated April 22, 1963, and signed by Assistant Secretary of the Interior Briggs, and the table which prompted Senator Prouty's questions, entitled "Calculated Apportionment of Funds Under the "Commercial Fisheries Resource and Development Act of 1963.'" (Documents referred to follow :)

U.S. DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,
Washington, D.C., April 22, 1963.

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,
U.S. Senate, Washington, D.C.

DEAR SENATOR MAGNUSON: Your committee has requested this Department's comments on S. 627, a bill to promote State commercial fishery research and development projects, and for other purposes.

We recommend the enactment of S. 627 with some minor amendments suggested herein.

This Department, through the U.S. Fish and Wildlife Service, is engaged in various forms of fishery research authorized by the Fish and Wildlife Act of 1956, as amended (16 U.S.C. sec. 742a et seq.) and other acts of Congress. The problems, however, affecting the Nation's fisheries are many and varied. In addition to Federal research, there is a definite need to encourage, assist, and strengthen State commercial fisheries research and development programs, as provided in this bill, in those States where our domestic commercial fishing industry is part of the economy. State activities of this kind complement the fishery programs of this Department. Certain phases of commercial fisheries research and development are most susceptible of State management. Thus, such programs can mutually benefit the Nation's commercial fisheries.

Other programs in which there is now Federal effort, but in which increased activity on the part of the States is desirable, would include such development projects as research on the utilization of the resource, the collection of statistics and information on the economics of the industry, and the promotion of the use of fishery products through marketing programs.

Information concerning the fishes of our coasts and inland waters is, at present, limited almost entirely to a few species which are heavily fished. Knowledge of the many unused and underused species is fragmentary, at best, and in many cases entirely lacking.

The Atlantic States Marine Commission has published a study made in 1954 concerning the amount of information available about the commercial fishes along the Atlantic coast of the United States. The study defined the term "commercial fishes" as fishes which had either an annual catch of 1 million pounds or more or an annual value of $1 million or more.

The results of this survey brought out the serious deficiences in our knowledge about commercial fishes. The report enumerated 10 items of information, such as mortality rates, causes of changes in abundance and growth rates, which are normally considered necessary for the intelligent management of any fishery. In the New England area 68 percent of the possible items of information on 18 species of fish and shellfish were either scanty or entirely lacking. In the Middle Atlantic and Chesapeake areas, the report indicated that the comparable figures were 61 percent on 21 species, while in the South Atlantic area the figures were 79 percent on 17 species.

These figures must be coupled with the knowledge that practically no information is available on the many species of fish which did not meet the above criteria for commercial fishes. These facts, taken together, clearly demonstrate the tremendous lack of even general knowledge about the fishes along our Atlantic coast. We believe that a similar study, if conducted today, would produce similar answers for other coastal waters even though much research has been done since 1954.

S. 627 is designed to provide much-needed assistance to the States in carrying out programs of research and development of the Nation's fishery resources.

The bill would allow a more direct attack on the fishery resources of the Nation at the local level.

This bill is intended to supplement, not replace, State funds and, where possible, to increase the amount of State funds that may be used in such programs. The funds would be apportioned among the States based on a formula, which is found in section 5 of the bill.

The basis for the above formula is the ratio of the average amount of commercial fishery activity that is normally carried on in each State to the total average amount of commercial fishery activity carried on in all the States. The amount of such commercial fishery activity is measured by the dollar value of raw fish as defined in section 2 of the bill, added to the dollar value to the manufacturer of manufactured and processed fishery merchandise.

Section 5 also provides that the Secretary will arrive at this dollar value by using the average of the three most recent calendar years for which data satisfactory to him are available. The use of a 3-year average, we believe, is intended to eliminate broad fluctuations which may result from resource failure, and the use of data satisfactory to the Secretary would insure computations based upon the best available statistics. Normally, the data available from commercial fishery States would be for the same 3-year period in each State. However, in the case of some States with a limited commercial fishery, statistical surveys may not be made each year. Thus, we may not have a uniform 3-year period throughout the States. Consequently, we do not believe that the bill should require the use of data from 3 consecutive calendar years; the 3 most recent, although not consecutive, would be adequate.

When considering the manufactured and processed fishery merchandise to be included, for purposes of the formula, the same practices would be followed as are now used by this Department in the development of the commercial fisheries statistical surveys. Presently, the Bureau of Commercial Fisheries of this Department lists as processed fishery products only those which have been subjected to some special process or treatment which changes the physical characteristics of the product, such as canning, smoking, or salting. Thus, under our present practices, cleaned and frozen fish would not be included unless there is further treatment such as filleting, steaking, or packaging.

In addition to providing a formula for apportioning these funds among the States, section 5 provides that no State shall receive less than one-half of 1 percent nor more than 10 percent of the total apportionment. This minimummaximum percentage should be adequate, since the minimum should be sufficient to finance at least one project in every eligible State. Section 5 also provides that apportionate funds not obligated, as defined in section 2 of the bill, within 2 fiscal years shall be returned to the Treasury of the United States. This provision is essential to the proper administration of the bill.

Section 4 of S. 627 authorizes the appropriation of $5 million each fiscal year for a total of 5 such years. We believe this is a reasonable estimate of the amount needed to finance the State expenditures of this program. however, that no allowance is made for the expenses of program administration, We note, investigation, facilitating services, and execution of this proposed legislation. An allowance for expenses of this kind, which are estimated to be approximately $400,000 annually, would have to be made, otherwise the administration of this bill may require substantial curtailment of the current fisheries program financed by our regular appropriations. Provisions for such administrative expenses could be included in S. 627 or through the establishment of a separate activity in the appropriations for the Bureau of Commercial Fisheries of this Department, which finance other program administration expenses.

Subsection 6 (a) provides for the submission to, and approval by, the Secretary of certain information in support of State projects as defined in section 2 of the bill. Subsection 6(b) provides that the Federal share of any project approved by the Secretary shall not exceed 75 percent of the total estimated cost thereof. Thus, the State will be required to pay 25 percent of the cost of any approved project under this bill. This cost-sharing principle is well established and insures greater interest on the part of the State.

Finally, subsection 6(c) provides for the payment of the Federal share of such completed projects and for periodic payments in the discretion of the Secretary. This susbection and section 7 provide that the projects shall be carried out pursuant to State law; and that where any property, real or personal, is acquired pursuant to an approved project and disposed of within 5 years of acquisition the pro rata share of the net proceeds will be returned to the United States.

We believe that S. 627 will further assist the commercial fisheries industry, and therefore, we recommend its enactment. Our suggested amendments are as follows:

1. Page 2, line 1, after the words "in the" insert "harvesting,". The purpose of this amendment is to expand the definition to include all oyster culture operations.

2. Page 3, line 16 and 20, delete the word "consecutive". As indicated earlier in this report, many States do not make statistical surveys each year. 3. Page 3, line 23, delete the words "each State" and insert "all States". 4. Page 4, line 7, delete "section" and insert "Act".

5. Page 6, line 8, change the period to a comma and add the following, "and in accordance with such regulations as the Secretary may prescribe." We believe this provision is necessary in order to properly administer the provisions of this bill.

As required by the act of July 25, 1956 (70 Stat. 652), the enclosed statement has been prepared concerning the estimated additional man-years of civilian employment and expenditures for the first 5 years of the program to which S. 627 relates.

The Bureau of the Budget has advised that time limitations have prevented relating the views expressed in this report to overall administration objectives and priorities. Among these considerations are: The relationship to overall commercial fisheries programs, the relationship to other oceanographic research, and the appropriate balance between State and Federal commercial fisheries research activities.

Sincerely yours,

FRANK P. BRIGGS, Assistant Secretary of the Interior.

U.S. DEPARTMENT OF INTERIOR

Subject matter: S. 627, a bill to promote State commercial fishery research and development projects, and for other purposes

Estimated additional man-years of civilian employment and expenditures for the first 5 years of proposed new or expanded programs

1 Current year refers to fiscal year 1964 if bill is passed and appropriation made during present session of Congress.

Calculated apportionment of funds under the Commercial Fisheries Resource and and Development Act of 1963 (S. 627)

Gross amount received by the manufacturer at the point of production.

A maximum of 10 percent and a minimum of one-half of 1 percent are assured under the allocation. 4 Estimated.

NOTES.-Allocation of funds is based on the ratio of the 1959-61 average value of raw fish landings and average value of manufactured products produced in each State and area.

The States of Nevada, New Mexico, Utah, Vermont, and West Virginia are not included in the above tabulation since the Bureau has not conducted fishery statistical surveys of these States. If surveys were conducted it is probable that some commercial fishing or manufacturing would have been found.

Source: Bureau of Commercial Fisheries, Branch of Statistics, Apr. 15, 1963.

Senator BARTLETT. I note in the report the Bureau of the Budget has not made any expression on S. 627 because of lack of time.

Is there any information at all available as to attitudes within the Bureau? If you can answer that.

Mr. McKERNAN. I am sure the chairman appreciates I am in no position to speak for the Bureau of the Budget in this regard but it is my personal opinion that the Bureau of the Budget views this particular type of legislation rather than the type which was submitted during the last Congress and which would have in a sense funded such a proposition out of import duties, the present system of funding is preferred by the Bureau of the Budget, I am quite certain of that.

On the other hand, with respect to the Bureau of the Budget's attitude on this particular bill, we simply haven't received it yet.

Senator BARTLETT. The Bureau will have to speak for itself on that.

Mr. McKERNAN. Right, except they, of course, have approved our submitting this bill to this committee. This report.

Senator BARTLETT. Now this bill provides for direct appropriations in the amount of $5 million?

Mr. MCKERNAN. $5 million, Mr. Chairman.

Senator BARTLETT. $5 million for each of 5 consecutive years? Mr. McKERNAN. Yes, Mr. Chairman.

Senator BARTLETT. And there is a preference, within the Bureau of the Budget, as you report and I infer in the Interior Department, for this approach rather than the using of import duties?

Mr. McKERNAN. Yes, Mr. Chairman. The administration in general, and the Department as well, feels that in this way Congress has a say in the appropriation of these funds each year and in a sense will provide some review of the program and accomplishments, and this is a more direct way to fund the costs of U.S. Government, so in general, the Department feels this is a superior way of funding this bill.

Senator BARTLETT. And you noted in your last statement that Congress would have a double whack at it in acting upon the authorization proposed in S. 627 and annually thereafter by means of the appropriations committee?

Mr. McKERNAN. That is correct.

Senator BARTLETT. And it is your view, the view of the Bureau of Fisheries, that research of the character contemplated here might and probably would result in a substantial increase in the supply of fish caught by the U.S. citizens?

Mr. McKERNAN. Very much so, Mr. Chairman. As you are well aware, the Department and Federal Government is deeply involved in the international aspects of fisheries, as well as more fundamental research on the fish stocks which migrate between the several States. It is becoming more and more necessary to increase our knowledge of the living resources of the sea, if we are to protect these resources for posterity, protect them for our present commercial fisheries, and attempt to maintain our own fisheries at the highest levels of profitability.

In fact, because our costs are higher, Mr. Chairman, it is absolutely essential that we remain in the competition by superior knowledge,