Omnibus Water Resources Legislation: S. 825 and S. 970

Bunting, Keith J., manager, government and public affairs, Dow Chemical Co.
Carlson Louis, cochairman, transportation committee, National Association of
Wheat Growers.....

Prepared statement

Joseph Mark, president, Anker Energy Corp., National Coal Association

Prepared statement

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OMNIBUS WATER RESOURCES LEGISLATION

TUESDAY, JUNE 21, 1983

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

SUBCOMMITTEE ON WATER RESOURCES,

Washington, D.C.

The subcommittee met at 10 a.m., in room SD-406, Dirksen Senate Office Building, Hon. James Abdnor (chairman of the subcommittee) presiding.

Present: Senators Abdnor, Randolph, and Moynihan.

OPENING STATEMENT OF HON. JAMES ABDNOR, U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

Senator ABDNOR. The Subcommittee on Water Resources will come to order.

We have a very distinguished panel of my colleagues with us here today. We welcome you to the committee.

Today we are going to address the difficult subject of cost recovery for the deep port maintenance cost and the cost sharing for new port deepening projects. Between 1978 and 1982, the Federal Government expended $1.7 billion in 1982 dollars to maintain the Nation's deep-draft ports. That comes to $340 million a year and even with modest inflation that amounts to a large long-term drain on the Treasury and a burden to the general taxpayer.

There certainly is concern in the Senate that these costs could be recovered in the future. The consensus has been lacking in the overall important question of how do we recover these costs and from whom. These are not easy questions and the sponsors of the legislative proposals which have been made in this Congress are to be commended in their efforts to resolve this issue. Part of the reason this issue is so difficult to address is that there are many interests on this question, all of whom must be considered in determining the most equitable solution.

Of course the various sides have concerns that cost recovery not be implemented in a way which could alter the existing commercial balance among themselves. Carriers are concerned that costs recovery be equitably shared amongst different types of sea-going craft. Shippers, who will be heard from by this subcommittee on June 27 are concerned that cost recovery will not be equitably shared among the most different products which are transported through our ports. These concerns must be recognized as real.

The effects of different cost recovery methods and levels must be carefully examined in that light. It is then most necessary in this process that all those concerned with cost recovery and most direct

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ly affected by the administration and my Senate colleagues recognize the essential need and the willingness to remain open to compromise on this issue. In the spirit of compromise I believe we could recover port maintenance costs, defining cost-sharing policy for new port projects and move forward on these projects which are necessary to the future growth of the Nation's economy.

At this time I would like to call on the dean of this committee, Senator Randolph.

OPENING STATEMENT OF HON. JENNINGS RANDOLPH, U.S.
SENATOR FROM THE STATE OF WEST VIRGINIA

Senator RANDOLPH. Thank you very much, Mr. Chairman. Deep draft port legislation has been around for a long while and you have been very helpful as we and other committees and subcommittees have discussed this which has taken many forms.

This has been a controversial matter. Many ports have asked that the Corps of Engineers study the deepening of their channels and their turning basins. These studies are in anticipation of major changes down the road, I suppose, not the road but down the port, as we think in terms of the worldwide fleet of cargo vessels.

When we think of the movement of coal to foreign markets, particularly through the Port of Norfolk, I say to Senator Warner, that was in fact the first impetus in this movement.

While we are not exporting as much coal as I believe we would have exported several years ago I do anticipate a resurgence in our export market. We certainly must deepen Norfolk and similar harbors if we are to have the advantage of this great export potential, the coal resource of America.

There are many issues that remain. Who pays for all of this. While it has been traditional for the Federal Government to fund such projects at nearly 100 percent of their cost, this administration, and I am not critical of the administration in this regard except to say that this administration has proposed a system of user fees at deep draft harbors. Many Senators and Representatives of the port sections of the country will testify as to what they believe to be a proper allocation of costs and the appropriate method for collection. I have joined with other Senators in sponsoring several bills and I feel that perhaps, in the long run, that whatever program is developed the most important objective is to dredge the channels and move the cargo.

I look forward certainly, as other members of the subcommittee and the committee will to your testimony. I do believe that the members of our committee will pay very close attention to the various proposals, certainly the comments that you give to us this morning. I do not know personally whether we should have an ad valorem tax or a tonnage based tax but we must move forward. I do know the latter to be true. So the Committee on Environment and Public Works chaired by the able Senator Stafford must make a recommendation on the proper allocation of fees and then work within our committee structure and the subcommittee and under the able Senator presiding today, to develop a method for collection of the fees which we believe are absolutely necessary for needed work.

That seems to me to be a correct, I hope, helpful statement. Thank you, Mr. Chairman.

Senator ABDNOR. Thank you.

Senator Moynihan?

OPENING STATEMENT OF HON. DANIEL PATRICK MOYNIHAN, U.S.
SENATOR FROM THE STATE OF NEW YORK

Senator MOYNIHAN. Mr. Chairman, just a few words to thank you for your introduction and to continue the remarks of the dean of our committee.

I think our distinguished witnesses and our guests this morning would want to know that we are considering the first change in the policies of the Federal Government in respect to rivers and harbors in 160 years. It was the decision of Justice Marshall in Gibbons v. Ogden about the monopoly granted by the State of New York with the steamboats on the Hudson River which declared the supremacy of the commerce laws in 1824 and that was the year the Congress authorized its first legislation for cleaning and snagging in the Ohio and Mississippi Rivers.

This has been entirely a federally funded operation since then. But if I may say, Mr. Chairman, among the numbers you described are the maintenance costs which we are dealing with. What has happened in rivers and harbors development is very much what has happened in water supply programs generally which is to say nothing has happened. We have reached a stalemate and the last serious water project that passed this Congress was in 1972. The old arrangements don't work any more. We are seeking newer ones. If you would like an example of the degree to which they don't work any more the Corps of Engineers which has, from the very beginning, been responsible for this work, our distinguished panel might want to know the Corps of Engineers this year is involved in twice as much construction in Saudi Arabia as it is in the United States; that is, which is to say nothing.

We are dealing with the idea of some form of cost sharing. Last year we had 15 bills on the matter. This year we have two. So we are making some progress. I hope that we will see it begin with our panel this morning.

Thank you, Mr. Chairman.

Senator ABDNOR. Thank you.

We are pleased to have this very distinguished panel starting off our hearings. I know they are all extremely busy and want to get back to their duties. It is my understanding that Senator Hatfield, who I thought at first would be here, will not be able to make it

now.

Senator WARNER. He is at the White House, Mr. Chairman, consulting with the President on the budget.

Senator THURMOND. He should be in in a few minutes. The meeting at the White House is over. I suggest we proceed.

Senator ABDNOR. Gentlemen, Senator Warner, Senator Byrd, Senator Mattingly, I am pleased that you are here. I know you have some strong views on port development and we are anxiously awaiting to hear from you.

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