The shallow draft inland waterway ports, numbering well over 180 on the other hand, are dependent entirely upon the viability of a single mode, the inland waterways, and the towboat industry which moves the cargo. Should that one mode fail or deteriorate the entire inland port system will likewise fail or deteriorate.

Also drastically affected are the industrial and agricultural complexes whose economic survival also depends upon the healthy condition of the inland waterway mode. The industrial development aspect of this alone represents capital investments exceeding $203 billion.

All transportation modes are vital to our nation's economy and it follows that the most economic, efficient, and energy conserving intermodal system is one which provides for the maximum utilization of transportation by water to a point as close as possible to the receiver, utilizing rail and truck to complete the remainder of the movement normally within the shorter ranges of haul where these modes are most efficient.

Due to the highly competitive nature of the transportation modes, Federal subsidies and Federal taxes, in whatever form, play a most crucial role in establishing a comparable base from which to measure the true cost of services and capability to compete.

As an example, taking FY 1980 figures, Federal subsidies to the inland waterways amounted to approximately $282 million while Federal subsidies to the railroads were approximately $2.4 billion. Reduced to ton-miles, this is .09 cents/ton mile to inland waterways and .27 cents/ ton-mile to the railroads - a three-fold financial advantage to rail.

Compounding this three-fold advantage is the Administration's proposal to further tax the inland waterways to recover from 70 to 100% of the Federal subsidies in addition to the fuel tax already imposed while remaining silent in the matter of recovery of the much higher subsidies continuing to be given to the railroads.

Such gross disparity of treatment results in an artificial boost in all transportation costs, which are passed on to the shipper who adds it on to his bill and finally, the unfortunate consumer and taxpayer picks up the tab.

In the mean time, the most efficient mode, the inland waterways, is forced into a less competitive position thus creating a diversion of cargo to the railroads.

Deregulation of the railroads under the provisions of the Staggers Act adds further to this disparity.

There is certainly no arguing the basic premise of the Administration that the "beneficiaries should pay" providing the beneficiaries are clearly delineated and treated fairly and equitably in the matter of allocation of subsidies and provisions for pay-back.

It should also be noted that one of the greatest beneficiaries of the services performed by the transportation modes comes in the form of custom's receipts totaling some $10 billion or more each year. Surely a goodly portion of this should be allocated each year to the transportation modes in proportion to their participation in the movement of the

import cargo generating these customs receipts.

Before any user charges or taxes are placed upon any mode, a comparable financial operating base should be determined for all competing modes and financial credit be given for each mode's contribution in the form of cash customs receipts and enhancement to the national security. User charges and taxes may then be assessed to recover such differences that might exist between these benefits to the Federal government and the subsidies provided by the Federal government.

Taxes in excess of this which can be justified in order to meet Federal deficits may then be applied across the board to all modes in a fair and equitable manner without destroying the competitive advantages of each mode and the overall efficiency of the nation's transportation system.

Mr. Chairman, Members of the Subcommittee, we most respectfully ask your careful consideration of the matters brought forth in this presentation and urge your support in providing our nation with the most efficient transportation system possible thereby enhancing not only the domestic economy but also our competitive edge in world markets.

This opportunity to appear before you is deeply appreciated.
Thank you, very much.

Meriton P. Banschishif

Milton P. Barschdorf
Chairman of the Board

May 6, 1983

page 2

I am pleased to advise you that the Gulf Ports Association, representing both large and small ports, has given consideration to this analysis and a unanimous resolution was passed at the recent meeting of GPA held in Galveston, April 21-22. Mr. Richard Leach, President of the Gulf Ports Association, has accepted the responsibility for distributing the position of the GPA, and I am confident that each of you will receive copies. It was a pleasure to learn that Senator Thad Cochran of Mississippi has become a co-sponsor of S. 865, and that Congressman Trent Lott of Mississippi has become a co-sponsor of H. R. 2406, and they will propose constructive changes.

Thanking you for your constructive efforts on behalf of the nation's ports and, with all good wishes, we remain

Mr. Richard P. Leach, President, Gulf Ports Association
Mr. William G. Simpson

Mississippi State Port Authority at Gulfport

March 28, 1983

The Honorable Thad Cochran

United States Senate

328 Russell Senate Office Building

Washington, D. C. 20510

Dear Senator Cochran :

On March 21, 1983 there was introduced in the Senate S. 865 Deep-Draft Navigation Act of 1983. While I am confident that you and members of your staff have already taken good notice of this Bill, it is opportune that we register our comment and recommendations on this proposed legislation. We are very grateful for the consideration and splendid support received last year in dealing with earlier "user fee" proposals.

It is our conviction that the proposed legislation, S. 865 Deep-Draft Navigation Act of 1983, is a positive step toward resolving past differences between large and small ports, and is a reasonable compromise with the past approach of the Administration to impose drastic user fee legislation which would have been extremely detrimental to smaller ports such as Gulfport. It is significant that S. 865 apparently is acceptable to the Administration, as indicated by the letter from Mr. David Stockman, which was inserted in the Congressional Record as a supporting document to S. 865.

The proposed legislation contains several of the provisions which we advocated last year and, if we must have user fees then this legislation appears to be the most acceptable yet introduced. We certainly agree that the Bill is not a perfect instrument, but it sets a course which will enable all interested parties to use as the basis for registering their particular views and recommendations.

Following our own very careful review, we can now provide you with our comment concerning certain aspects which concern us:

1. Title III, Section 302 apparently does not provide for
mandatory imposition by states either directly, or through
Customs, of the proposed qualified State Vessel Tax on
Cargoes Loaded. This should be mandatory to avoid possi-
bility that some states may choose not to impose such
taxes thereby affording their respective ports substantial
advantages.

2.

It is unclear whether coastal trade and non-contiguous
trade will be subject to imposition of the proposed
national uniform user fee either by Federal or State
authority. Such trade should definitely be included to
insure equitable treatment.

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