of our neighboring States. We would hope that the general registration system, as it has evolved from the boating bill of 1958, would be sufficient in the eyes of the Secretary. The flexibility of the bill seems to allow a restructuring of the existing registration system. We feel in the New England area that a tremendous amount of time and effort has been expended attempting to standardize registration among tne neighboring States. Too many changes could produce further timelags and further delaying needed reciprocity in terms of accepting another State's registration during the short boating season for visitors from out-of-State. We have boatowners in the New England area who, at times, in the recent past, have carried as many as three different boat registrations in order to boat in areas where their families wished to do so.

Realizing that the areas that I have touched on have been covered by the major industry associations and other segments of the industry, further, that the committee has sagely taken these comments, as I understand it, and is attempting to make the necessary improvements to the bill, we would therefore, strongly recommend passage of House bill 15041.

Mr. CLARK. Thank you, Mr. King. The committee recognizes this problem with section 12 and we will rectify it by an amendment. Mr. Keith.

Mr. KEITH. I am glad to hear your observations on section 12 and trust that you can give us the suggested amendment.

What would you suggest for a leadtime?

Mr. KING. We feel that the 1 year that has been proposed by the manufacturers association is realistic except in hazardous situations, particularly in areas where you have a great deal of tooling involved, engines and things of this nature. It is very difficult to even buy tools, as I understand it on 6 months' leadtime today.

Mr. KEITH. I have no further questions.

Mr. CLARK. Counsel would like to raise a question.

Mr. CORRADO. Mr. King, this has to do with the criminal provisions section. As you know, we have had quite a few comments and suggestions during the course of the hearings as to the criminal penalties section and there have been various comments that there are already existing Federal laws that would deal with the carriage of an improperly manufactured boat across State lines or an illegal boat across State lines. Could you tell me, do you have any knowledge of such laws? I am trying to tie this down, if I can.

Mr. KING. I don't specifically have knowledge, but I think in most cases the laws are not so much Federal as they are State.

I think that our local associations and our boating administrators particularly in the New England area, I know, have worked very hard to cooperate in these areas and build a very close personal relationship on these problems.

For instance, where we have theft involved, registration is very important thing when theft is involved. Through our group associations, we pass on the serial numbers and ask that they be posted in the yacht clubs and dealerships to assist in this. I think there is more done on the State level than there is on the Federal level in this area at present.

Mr. CORRADO. Of course, this will be a Federal law, so I would be reluctant to recommend eliminating the criminal provisions of a Federal law when there was no other existing Federal sanction. That is really part of the problem. If there are other existing Federal sanctions, I think we ought to try to get them out in the open and find out what they are. That is the only thing I had.

Mr. KING. $50,000 seems to be a stiff penalty in our eyes.

Mr. CORRADO. Since you bring that point up I would like to comment on that a moment. That is the civil penalty. I am afraid that is misunderstood. That is for a related series of violations and not just one violation. If it is viewed in that particular context, I do not think it really is excessive. If you view it for any single incident, then I would be inclined to agree with you, but the way the bill reads, it is for any related series, so I think it is reasonable. I am glad you raised that because I think it is good to get that point in the record.

Mr. CLARK. Thank you very much, Mr. King.

Our next witness is Thomas J. Legere, the Commonwealth of Massachusetts, Division of Motorboats, 100 Nashua Street, Boston, Mass.

STATEMENT OF THOMAS J. LEGERE, THE COMMONWEALTH OF MASSACHUSETTS, DIVISION OF MOTORBOATS, BOSTON, MASS.

Mr. LEGERE. My name is Thomas J. Legere, State boating administrator for the State of Massachusetts.

Mr. Chairman, Congressman Keith, I just want to be recorded as supporting this bill. I spend many hours in the Northeast with the Northeast administrator and the national administrator working over this legislation almost piece by piece. There are areas that may be a little bit difficult for people in the industry to absorb right away.

In answer to Bill King on the license bill, we have gone through that and we particularly ask at this time that it be eliminated from this bill. We have taken up, and I think all of the administrators agree, that an educational program would be far better than licensing, and we are all leaning toward this.

In Massachusetts, to bring you up to date, we have gone from 103 to 115,000 registrations. So, you can see that the industry being such a mobile industry that we do need uniformity and it can only come from a national level.

Mr. CLARK. Thank you very much. We are very hapy to have you here and to have your comments on this bill. We think that something has to be done, and we are glad to have your support.

Thank you very much.

Our next witness is Mr. Ralph Thacher, National Association of Engine and Boat Manufacturers, 537 Steamboat Road, Greenwich, Conn.

STATEMENT OF RALPH THACHER, NATIONAL ASSOCIATION OF ENGINE & BOAT MANUFACTURERS, GREENWICH, CONN.

Mr. THACHER. Good morning, everybody.

I am Ralph Thacher, and I live in Marion, Mass., and I have spent virtually a lifetime in and around boats, and in the boating industry both as a manufacturer, and in the service and sales of boats. So, I have had quite a bit of background and some heartaches.

The interesting position that I have had in the National Association of Engine & Boat Manufacturers for the past 8 years as a director and as an officer of it was also as chairman of its Government Relations Committee. In this particular job, I had the opportunity along with other associates to work with the Coast Guard on the drafting of this legislation that you are considering today. I think this was unique in many ways that industry and the interested parties did have an opportunity to work very closely with the authors of the bill.

The Coast Guard worked this bill up and we went through eight drafts and we joked about the seventh and the seventh-and-a-half draft until finally it was presented to the Congressmen who finally introduced the bill.

With that little story, I would like to tackle a couple of points that we are still at odds on. They are not too serious and others have touched upon them here, but I think they should be in the record as our feeling, and hopefully amendments or changes will be made to correct these deficiencies that we see.

We are very much gratified to see that the Coast Guard will be the prime administering agent for the final authority granted under the bill. We consider ourselves fortunate to be dealing with people whom we feel most competent, knowledgeable and fair. We do not always agree with them, but we ask no more than their record of efficiency and effectiveness to date be maintained by their sucessors in administering this legislation.

I would like to touch on something here. I mentioned successors. For the past 2 years, we worked with Admiral Morrison, Captain Norris, Captain Hayes who is here and, more recently, Admiral McClellan who has been the Chief of the Office of Boating Safety. Strikingly enough, we got along with these people well, we had great faith in their ability, in their word and great trust in their taking care of our needs promptly, efficiently and fairly. But we always recognize the fact that the services being as they are, transfers do occur and new people come on the scene. Therefore, we want to be sure the enacted legislation is something we can live with and that sucessors to the people we have dealt with will administer in the way we understand they are going to.

Just yesterday afternoon I learned that Admiral McClellan has received orders to be transferred out of the Chief's Office to Seattle and, therefore, we are going to be dealing very shortly with a new boss for Captain Hayes over here. We don't know him. We assume he is going to be another good Coast Guardsman, but we don't know. So, we want this bill in good form at the time you fellows enact it in Congress.

I would like to make a few specific comments. Our Association is in total agreement with the legislation's goal of promoting boating safety. We do, however, have these specific suggestions. They are minor language changes, but they are important.

Section 5(b)(1) of the bill (manufacturer standards) we are concerned with providing adequate leadtime for tooling and other changes that might be required by a new standard. We would suggest a year instead of the minimum 180 days with the present exception continued in cases of critical hazard where there is need for a faster implementation. However, even in such urgent circumstances there should be a

compliance flexibility since some companies cannot accomplish the changeover as fast as others.

We are not satisfied with section 5(b) (2) either. This provides for retrofit (alteration of existing units in the consumer's or dealer's hands). If a man has a 2-year-old boat and suddenly finds he has to make expensive alterations to comply with new standards, he may just give up on boating. This "grandfather clause" should be strengthened by requiring the finding of a "high degree of hazard" before the retrofit can be required.

Section 6 provides that a Boating Safety Advisory Council (established in another section) shall be consulted regarding standards. While under Federal law such groups can be advisory only, we would like for it to be included in on considerations of whether there is a need for a standard in the first instance-not just meet to be told there is a need and here is what the standard will be. We would, therefore, suggest that section 6 be revised to begin, "In establishing a need, formulating and . . ." and that section 6(4) have added "regarding these considerations" at the end.

Without going into a long history of a lawsuit our industry had with the Highway Safety Administration over standards, we are advised by our lawyers that we need stronger language in this bill to assure judicial review of an unreasonable standard. I would, therefore, suggest addition of a new subsection (5) in section 6 to read "issue a written statement upon promulgation of a standard or regulation indicating his reasons for decision based upon these considerations."

We also believe that it should be made clear that standards making procedures should be in accordance with the formal rulemaking procedures required by the Administrative Procedure Act.

Section 12(e) is intended to require boat operators for hire to be licensed. Present law requires such operators to be licensed if carrying six or more persons and this section seeks to extend that down to any passenger for hire situation, which is reasonable to us.

But, as drafted in the bill and interpreted by the courts, the definition of "for hire" means any consideration between the operator and the passengers. It includes dealer demonstration rides and even situations where one man buys the gas and the other brings the boat. This is neither necessary nor appropriate. I would suggest adding the words, "provided that this section shall not apply in the case of any boat while being used for bona fide dealer demonstrations furnished without fee to a business invitee or for noncommercial purposes by two or more persons present on such boat as joint venturers."

I might add that we tried to get some of our dealers licensed—the nearest Coast Guard office is in Houston-and they did not want to bother when we got there. Moreover, Coast Guard statistics do not show dealer demonstrations to be a safety problem.

Section 15, regarding notification of both defects, is of great concern to us as presently drafted. Under our industry certification program, we are required by contract to notify and remedy at our cost all noncompliances with industry safety standards and Federal standards on our boats. This is also in the bill in section 15 and is acceptable. But we do not like the last sentence in section 15 (d) which lets the Secretary blast the bad news around.

For example, if the Secretary, upon being notified that the lights on one of our models are not quite right, issues a press release so stating, people do not read it exactly. Rather, they read it that all of our boats are no good-notwithstanding that the actual release clearly states only the lights on one model are insufficient. Whereas everybody needs a car and the auto companies are economically powerful, they can withstand such publicity interpretation. Boat companies are small and we can't. I, therefore, suggest a substitute subsection 15(d):

(d) Every manufacturer shall furnish to the Secretary a true or representative copy of all notices, bulletins, and other communications to purchasers or dealers required under this act. The Secretary may only disclose to the public so much of the information contained in the communication as he deems will contribute to boating safety.

We are especially disturbed about the potential effect of section 12(a). That section prohibits the manufacture, construction, assembly, shipment in interstate commerce, selling or distributing any marine product which does not meet the regulations and standards. Certainly a provision of this nature is necessary to prevent substandard equipment from being produced. But we feel that an unintended and heavy burden will be created by this section. Consider this example:

Suppose there is a standard requiring a certain minimal amount of flotation material in a boat. The "X" Boat Co. builds a boat which it certifies on the invoice to meet the flotation standard. In fact, however, quality control problems have resulted in a slightly inadequate amount of flotation under the standard, but no one knows this yet, and the boat is sold to a distributor. The distributor in turn sells the boat to a dealer who sells it to a boat owner. Noting that the boat floats too low in the water compared to an identical boat of the same manufacturer and model, the boat owner reports it to the Coast Guard. Sure enough, the Coast Guard proves that the boat did not meet the flotation standard.

Logically, and under section 12 (a) (1), the manufacturer is responsible as well as he should be. But the distributor and dealer are also subject to penalties under this section, notwithstanding that they could not reasonably determine that this boat lacked some foamed-inplace flotation between the hull and the flooring and certainly were not on notice of the inadequacy. Their penalty can be either that under section 34 (a) (civil penalty of up to $1,000 fine).

We feel that this result is grossly unreasonable and cannot even act as a deterrent to those not directly responsible for the noncompliance since they cannot in most cases have knowledge of a technical defect produced by someone else.

We would suggest that this section be amended by striking the word "unless" at the end and adding, "if he knows or reasonably should know," and adding to subsection 12(a) (1) so that it reads "it does not conform ***"

Related to the penalty provisions is the fact that the purpose of the bill is to promote safety, not fine people or raise revenue. We think that where a manufacturer discovers his own noncompliance (usually a quality control-type problem) gives prompt notification to everyone as required and seeks to remedy the problem promptly, he should have the penalty waived. We would like to see a provision in the bill to that effect, whether in section 15 or in section 24 and 35.