GRANTS FOR DOMESTIC OFFSHORE COMMUNITIES SEAPORT DEVELOPMENT ACT OF 1977 FRIDAY, FEBRUARY 24, 1978 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, SUBCOMMITTEE ON MERCHANT MARINE AND TOURISM, Washington, D.C. The subcommittee met at 10 a.m. in room 235 of the Russell Senate Office Building, Hon. Daniel K. Inouye (chairman of the subcommittee) presiding. OPENING STATEMENT BY SENATOR INQUYE Senator INOUYE. Today the committee begins hearings on S. 2348, a bill to establish a program of development grants for seaports located in our noncontiguous State of Hawaii and Alaska, the Commonwealth of Puerto Rico and the Territories of Guam and the Virgin Islands. These States, Territories and Possessions are unique in their almost total dependence on ocean shipping for movement and their interstate commerce. In my State of Hawaii, for example, every shopping trip for daily necessities and every major purchase of a house or car is affected by ocean freight rates. If shippers and consumers are to have an efficient surface transportation system at the lowest possible cost to be reflected in cost of these items, it is not enough that the carriers who serve them have high-speed, modern vessels in operation. There must also be modern, efficient seaport facilities through which cargo can be quickly processed and moved to and from vessels. The grants which S. 2348 would provide are intended to assist the responsible public agencies in Hawaii, Alaska, Puerto Rico and Guam and the Virgin Islands in construction, improvement or repair of their publicly owned areas or facilities used for the docking of ocean-going cargo vessels, the receiving, sorting, segregating or delivering of cargo and for other similar purposes. The bill's recognition of the unique transportation circumstances prevailing in these States and territories and consequent need for special Federal assistance is consistent with several existing Federal policies and programs which are designed to meet the unique transportation needs of other discrete regions, States and subdivisions. The CAB, for example, is authorized to grant subsidies to air carriers to finance the costs of providing necessary service to communities where the volume of traffic is insufficient to meet the costs of such service. This program thus recognizes the public interest in providing air transportation to the Nation's small communities, which would otherwise be without such service. For fiscal year 1977 that program cost the Federal Government $78.4 million. The Urban Mass Transportation Act of 1964 is another instance. Among other things it authorizes grants to assist urbanized areas in acquiring or improving capital equipment and facilities needed for urban mass transit systems, both public and private. This program recognizes the national interest in providing financial assistance to State and local governments so that they may establish, maintain and improve mass transportation systems in urban areas. Since 1964 this program has cost the Federal Government over $10.4 billion. A third example are the programs authorized by the Appalachian Regional Development Act of 1965 and administered by the Appalachian Regional Commission. The Appalachian Regional Commission is concerned with the economic development of the 13-State Appalachian Region, which includes parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and all of West Virginia. The economic development programs and projects submitted by these States are funded and executed by the Federal Government and include many in the area of transportation. Last year the cost to the Federal Government for transportation programs and projects, alone, was $194 million. S. 2348, therefore, recognizes the unique and compelling need to modernize the dock areas and facilities in these locales if they are to enjoy an efficient, low-cost transportation system similar to that which exists in the contiguous 48 States. I have received statements from Senators Stevens and Gravel, U.S. Senators from Alaska, and I will place them in the record at this point. [The statements follow:] STATEMENT OF HON. TED STEVENS, U.S. SENATOR FROM ALASKA Mr. STEVENS. Mr. Chairman, it is a pleasure for me to join you in support of our bill to provide funds for the construction of habor facilities in the noncontiguous portions of the United States. I will make my comments very brief this morning. Mr. Chairman, but needless to say I'm delighted that you have asked me to join with you as a cosponsor of this legislation. The construction of harbor facilities in Alaska is critical to the economic development of my state. Alaska is a storehouse of natural resources. We cannot, however, utilize these resources unless the harbor facilities exist to both bring in the equipment needed to extract or harvest these renewable and nonrenewable resources and to ship these resources out to the lower 48. Commercial fishing is an excellent of an industry dependent upon the construction of new port facilities. With the advent of the 200-mile limit, the Alaska fishing industry has rapidly expanded. To the best of my knowledge there is not a slip available for additional commercial-sized, modern fishing vessels anywhere in Alaska's prime commercial fishing areas. It has also been brought to my attention that all of the major shipyards in the United States capable of building vessels of the type used for Alaska commercial fishing operations are back ordered through 1980 with orders for the Alaska fleet. Prior to the enactment of the 200-mile limit, Alaskans caught only 15 percent of the fish harvested in the North Pacific. Eighty-five percent of the fish went to foreign fishermen. Now that Americans are guaranteed priority and levels of harvest have been stabilized, Americans have been catching an increasingly greater share of this tremendous resource. If new port facilities are not constructed in Alaska our capacity to displace foreign fishermen will soon come to an end. Mr. Chairman, I need not go any further in describing Alaska's need for new harbor facilities. I would, however, like to point out to the Committee that potential needs for harbor facilities in Alaska have already been documented. I would like to file for the Record a comprehensive study of Alaska's port and harbor needs which has been compiled by the Alaska Federal-State Land Use Planning Commission. This study comprehensively documents on a port-by-port basis the needs of each local community and the type of dock facility which would best be suited to its use. It is a totally comprehensive study, Mr. Chariman. Again, Mr. Chairman, I would like to thank you for inviting me to join with you in support of this legislation which is so vital to the maritime interests of our respective states. Alaska's Governor, Jay Hammond, also recognizes the importance of this bill and has asked me to convey his support to you. STATEMENT OF HON. MIKE GRAVEL, U.S. SENATOR FROM ALASKA I would like to thank the Committee for the opportunity to testify today on behalf of S. 2348, sponsored by Senator Inouye. I am pleased to be among those who are cosponsoring this legislation, most important for the future development of the noncontiguous states and the territories. My State, Alaska, has over half of the coastline of the United States. Our ports and shipping facilities are the major lifeline of both commerce and subsistence in Alaska. Except for marine transportation the development of Alaska's resources and the survival of its people would be impossible. There is but one, long, difficult and famous route overland by truck into one state. While the Alcan highway has served us well, it is a costly route into the state both in terms of equipment and lives. Alaska is also well served by its air carriers and we probably rely more on the air transportation of freight than any other state. But, the cost of air freight is prohibitive for most bulk items and our reliance on this form of transportation helps to contribute to a cost of living which is more than 60% greater than the national average. The cost of living in Alaska is one of the most serious problems faced by our citizens. It is not only true that the cost of living in Alaska is burdensome to its people, but also in Hawaii, where the cost of living is some 18% above the national average. One of the quickest ways to reduce these extreme cost of living figures in the non-contiguous states is to improve the transportation systems which bring goods to market in these states. Since water transportation is the cheapest form of transportation the cost of all goods brought into our state by sea is reduced by reducing the cost of water transportation. S. 2348 will help to accomplish this goal. The development of containerized cargo ships and other modern methods of transporting freight has demanded a similar modernization of port facilities. While the state of Alaska has been active in the modernization of port facilities and the development of new facilities, it is difficult with the limited resources of the state to meet the vast needs of a population so geographically diverse as the people of Alaska. While the state has been spending substantial sums each year for the development of port facilities, it seems that each year we fall farther and farther behind in the effort to service the needs of Alaska's rapid growth. S. 2348, introduced by my colleague from Hawaii, Senator Inouye, will help to meet the needs of the noncontiguous States in the development of their transportation systems. Just as the Federal Government has helped the State in the "lower 48" to develop transportation systems through the Federal highway program, the construction of bridges, and the support of marine transportation through the construction and maintenance of locks, dams and waterways on navigable rivers. We in the noncontiguous States have, for the most part, missed out on the benefits of these Federal programs because of our remote locations and the concomitant need for marine based offshore transportation as opposed to land or barge traffic. The problems of Alaska, Hawaii and the territories are unique. I do not like to harp on the fact that Alaska is different and therefore requires special treatment, but such is clearly the case in this instance. Our problems do not have a parallel in the lower 48, where the alternatives to water transportation are well developed and the competition between carriers keeps costs down. In Alaska, however, for many communities there is no transportation alternative to trans-oceanic freight. An additional $30 million annually could make a significant contribution to alleviation of the port facilities backlog in my State. I strongly support Senator Inouye's bill and hope that the committee and the Senate acts expeditiously to aid the transportation problems of Alaska, Hawaii, and the territories. [The bill and agency comments follow:] 95TH CONGRESS 1ST SESSION S. 2348 IN THE SENATE OF THE UNITED STATES DECEMBER 7, 1977 Mr. INOUYE introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To amend the Merchant Marine Act, 1920, by establishing a program of development grants for those seaports located in the domestic offshore States, territories, and possessions of the United States. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Domestic Offshore Com4 munities Seaport Development Act of 1977". 5 SEC. 2. The Merchant Marine Act, 1920 (46 U.S.C. 6 861, et seq.) is amended by inserting immediately after 7 section 8 thereof the following: 8 "SEC. 8A. (a) Congress hereby finds and declares 9 that the domestic offshore communities of the United States II 2 1 have public seaport systems which, due to the lack of ade2 quate capital improvements and resulting congestion, are 3 rapidly becoming inadequate to efficiently satisfy each com4 munity's needs at the lowest possible cost. In making this 5 finding, the Congress has recognized that each of these 6 communities is totally dependent upon a single mode of sur7 face transportation for movement of its interstate commerce, a unique dependence not found in other States of the Union 9 where a capability exists for carriage of goods by rail and 10 highway and/or inland waterway. 8 11 "(b) (1) In order to bring about the establishment of 12 a system of public seaports adequate to meet the present and 13 future needs of the domestic offshore communities, the Sec14 retary is authorized to make grants for seaport development 15 by grant agreements with sponsors in aggregate amounts not more than $100,000,000 for each of the fiscal years 17 1978 through 1981. 16 18 "(2) Any public agency, or two or more public 19 agencies acting jointly, may submit to the Secretary a 20 seaport development project application for one or more 21 projects, in a form and containing such information as the 22 Secretary may prescribe. All projects shall be subject to the approval of the Secretary, which approval may be given 24 only if he is satisfied that 23 25 "(A) the project is reasonably consistent with |