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Federal Document Clearing House Congressional Testimony
May 1, 2002 Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 648 words

COMMITTEE: HOUSE ARMED SERVICE

HEADLINE: FISCAL 2003 DEFENSE AUTHORIZATION BILL

TESTIMONY-BY: DUNCAN HUNTER, CHAIRMAN,

AFFILIATION: SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE

BODY:
May 1, 2002

OPENING STATEMENT OF

DUNCAN HUNTER CHAIRMAN, SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE

HOUSE ARMED SERVICE - FULL COMMITTEE MARKUP -

SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE PROVISIONS

My statement will be brief. The panel held a hearing on the authorization request for the Maritime Administration budget on March 14-almost five weeks ago now. There were a number of issues raised at that time: 1) Title XI loan guarantee program 2) Scrapping of obsolete vessels in the National Defense Reserve Fleet 3) Reauthorization of the Maritime Security Program. With respect to the Title XI program, the Administration had requested that no new funds be authorized or appropriated. They did request that the administrative costs be authorized in the amount of $4.1 million dollars.

The panel's recommendation proposes $50 million for loan guarantees and $4.1 million for administrative expenses. I know many of you have signed a letter to Chairman Wolf urging his support for this program at this level. The Panel also proposes granting authority for the Maritime Administrator to obtain the assistance of outside independent financial analysts when the need exists. This will supplement the internal analysis that is done and will likely be used where we have applications for guarantees in new markets or where different financing arrangements are being proposed. This was something the Maritime Administrator had requested. I am also proposing the transfer of the USS SPHINX to the Dunkirk Historical Lighthouse and Veterans Park Museum in Dunkirk, New York (which is on Lake Erie) for use as a military museum. It is currently located in the Reserve Fleet in the James River and would otherwise be scrapped. This transfer will actually save the government money.

On the ship scrapping issue: The Administration proposed funding the program at $11.1 million for fiscal year '03. The Panel's mark recommends $20 million. However, I am also setting up a new vessel-reefing program that will allow some of this $20 million to go to individual states to offset the cost of reefing these vessels. These artificial reefs attract fish, divers, and of course tourists. The funds will be used by the states to tow the vessels, remove hazardous materials including oil from the vessels, and finally to actually sink the vessels. Our goal is to increase demand by the states and at the same time get these vessels out of the fleet where they could unfortunately sink at any time. The cost of reefing a vessel is approximately $500 thousand to $1 million dollars-The cost of scrapping is approximately $2.5 million dollars per vessel. We are not changing any environmental laws-just providing financial assistance to states to assist in the reefing effort.

The remaining numbers in the Panel's recommendation for Operations and Training, including funding for United States Merchant Maritime Academy and the state maritime schools are as proposed by the Administration-with the exception of the amounts requested under the accrual funding proposal for health benefits and retirement contributions which affects all agencies. $49.1 million will go to the United States Merchant Marine Academy, $7.6 million will go to the six state maritime academies, and $35.9 million will go for operations at the Maritime Administration. Counting the increase to Title XI and the increase provided for the reefing program, the mark is $54.4 million above the budget request.

On the Maritime Security issue, many of you recall that last year the Administration proposed transferring the program to the Department of Defense. They have not renewed that proposal and we are leaving the program as originally authorized. I hope the Panel can start hearings later this session on the reauthorization of this program.



LOAD-DATE: May 6, 2002