The next witness will be Cornelius Ray, president of the Boating Industry Association, accompanied by George Page, director of the National Association of Engine and Boat Manufacturers.

We are glad to have both of you here and we will appreciate your coming to the witness stand. For the record, give your names and addresses.

STATEMENT OF CORNELIUS RAY, PRESIDENT, BOATING INDUSTRY ASSOCIATION; ACCOMPANIED BY GEORGE PAGE, DIRECTOR, NATIONAL ASSOCIATION OF ENGINE AND BOAT MANUFACTURERS, AND TOM BOGGS, WASHINGTON COUNSEL

Mr. RAY. May we ask Mr. Tom Boggs, our Washington Counsel, to join us?

Mr. CLARK. Yes. You may proceed.

Mr. RAY. Mr. Chairman and members of the committee, my name is Connie Ray and I am the president of Sea Ray Boats of Phoenix, Ariz., and also president of the Boating Industry Association.

Appearing with me today is Mr. George Page, director of the National Association of Engine and Boat Manufacturers.

Also present are Matt Kaufman and Jeff Napier of the BIA staff, Dick Snyder of the NAEBM staff, and Tom Boggs and Gordon Arbuckle of the law firm of Patton, Blow, Verrill, Brand & Boggs which serves as Washington counsel to the two associations.

We are testifying at this hearing on a joint basis and represent the Boating Industry Association of Chicago, Ill., and the National Association of Engine and Boat Manufacturers of Greenwich, Conn.

Together we have as members in excess of 800 boatbuilders, engine and motor manufacturers, accessory producers, and firms servicing our industry. We are also sponsors of affiliate groups representing marine distributors, dealers, boatowners, and others involved in pleasure boating.

We were very pleased to have had the opportunity to appear recently at two of the regional hearings held by your committee.

Due to that opportunity, we will make every effort to avoid undue repetition of what we have said before, and will simply highlight the considerations which we feel to be of major importance. I will address these considerations in a general way and Mr. Page will then discuss in detail our suggested technical revisions to the bill.

First let me say that we do support H.R. 15041 and its purposes, and wish to thank you, the Coast Guard, the State boating law administrators, and the many others that have been involved in the writing of this legislation. Much thought, time, and effort has gone into it, and the result of those labors is a most reasonable piece of legislation. We hope it will become law soon.

We indicated at the regional hearings that we, as an industry, have supported numerous voluntary efforts to make sure that our boats and equipment sold in the marketplace are safe, if they are used in the proper manner prescribed.

We have supported for some 15 years the quasi-public American Boat and Yacht Council which promulgates voluntary quality and

performance standards for boating equipment. We have also supported the Yacht Safety Bureau, now a division of the Underwriters Laboratories, as a qualified laboratory to test recreational boating equipment for safety. We have supported the BIA certification program to accredit equipment meeting voluntary safety standards.

We have published volumes of material for the boatowner regarding boating safety and the proper use of equipment, and we have worked continuously with various State and Federal regulatory bodies for the purpose of searching out boat safety problems and finding immediate solutions. All of these efforts have been effective and represent only a portion of the total industry effort.

Although much has been done over the years on a voluntary basis, we realize that we must do more. This is the basic purpose of H.R. 15041, and the reason why the industry supports its passage.

As we have indicated in our earlier testimony, however, we do not think that the persons charged with administration of the proposed act should ignore the very successful experience of the industry in voluntarily adopting and securing compliance with safety standards of precisely the same nature as those proposed to be adopted and enforced under the act.

Initially, we believe that Federal involvement in boating safety can be most effective by adopting and enforcing mandatory standards which closely follow the voluntary safety standards now in existence and utilized by the vast majority of manufacturers in our industry. After adoption of the initial standards we believe that those charged with administration of the act should continue to take advantage of industry expertise whenever updating or revision of standards is indicated. If these two guidelines are followed, we believe that the result will be not only better standards but also a minimization of the expenditure of Government time and expense in connection with the standardmaking process.

The guidelines which I am suggesting are completely compatible with the provisions of section 6 of the bill which would require the Secretary, in the promulgation of regulations and standards, to consider relevant, available boat safety standards and consult with the Boating Safety Advisory Council established in compliance with the act. If these mandates are effectively carried out, the initial standards under the act can be promulgated substantially through reliance on existing industry standards, minimizing the expenditure of Federal funds and efforts in this connection. As new problems arise, continuing consultation with the advisory council and a realistic consideration of its recommendations will minimize Federal involvement in the expensive research, technical evaluation, and staffing requirestandardsmaking process.

In pointing out these potential benefits of reference to existing safety standards and consultation with the Boating Safety Advisory Council, I am assuming that the reference will be more than pro forma and that the advisory council will be treated, not as a figurehead, but as an active participant in the agency's activities. We would hope that the committee's record of proceedings and its report to the Congress would make it clear that industry's efforts and assistance in the development of standards will be encouraged and realistically taken into account.

In a nutshell, the point I am making is that the industry can be of assistance in achieving the goal of boat safety if it is permitted to do so. As manufacturers in the recreational boating industry, we would be putting our heads in the sand if we did not keep pleasure in boating. To keep that pleasure in boating, we must make sure it is a safe sport, and we are ready and willing to exert every possible effort to that end. That is why we are testifying today in support of the bill and why we are eager to assist in achieving the act's purposes after the date of enactment.

It has been a pleasure to appear before your committee today. I will be happy to respond to any questions either at this time or at the end of Mr. Page's testimony.

Thank you.

Mr. CLARK. Rather than ask the questions at this time I think the committee would prefer if you would go ahead, Mr. Page, and give your testimony and then we will direct questions to both of you. Mr. Page.

STATEMENT OF GEORGE H. PAGE, DIRECTOR, NATIONAL

ASSOCIATION OF ENGINE AND BOAT MANUFACTURERS

Mr. PAGE. Mr. Chairman, and members of the committee my name is George H. Page. I am president of Marmac Products, Inc. of Cleveland, Ohio, and am also a director of the National Association of Engine and Boat Manufacturers. As Mr. Ray has indicated, both NAEBM and BIA support the passage of H.R. 15041. We think it is basically a good piece of legislation and one which will contribute to the safety of pleasure boaters on our Nation's waterways. My purpose in appearing here today is to suggest technical amendments to the bill to make it more workable from the industry's point of view and, hopefully, to insure that the bill's provisions will be fairly and efficiently applied.

In my testimony, I hope to provide a section by section checklist of the points which BIA and NAEBM would like to have taken into account in marking up H.R. 15041.

1. Section 5(b) (1). At the various hearings, we have suggested that 180 days may not be adequate lead time in situations where a significant amount of retooling or changes in the manufacturing process are required. Accordingly, it is suggested that the language of section 5(b) (1) be amended to read as follows:

(1) shall specify an effective date which is not earlier than three hundred and sixty-five days from the date of isuance, in any case involving major product redesign, retooling or major changes in the manufacturing process, or, in any case not involving such major redesign, retooling or changes, one hundred and eighty days from the date of issuance: provided, however, that the Secretary may specify an earlier effective date where he finds that there exists a boating safety hazard so critical as to require an earlier effective date.

There is also a need for some flexibility in application of the effective dates since some companies cannot accomplish design changes as fast as others. This flexibility can probably be achieved by granting temporary exemption pursuant to section 9 of the bill. While no language change appears necessary in this connection it should be made clear that the power granted under section 9 is broad enough to cover this type of problem.

2. Section 5(b) (2). We have suggested that retrofit, even where relatively minor modifications of each individual boat are required, can be a very substantial problem. It seems unreasonable to permit the Secretary to retroactively apply new standards to boats already in existence on a showing of hazard less stringent than that required for acceleration of the effective date of that same standard as applied to new boats. The required finding of hazard set forth in section 5 (b) (1) should be applicable also to the requirement for retrofit. It is therefore suggested that section 5(b) (2) be amended to read as follows:

(2) may not compel substantial alteration of a boat or item of associated equipment which is in existence, or the construction or manufacture of which is commenced, before the effective date of the regulation; but subject to that limitation, and where there exists a boating safety hazard so critical as to require partial compliance, may require partial compliance or performance that the Secretary considers appropriate in relation to the degree of hazard that the partial compliance will correct.

3. Section 6. This section is similar to, and is probably based on, 15 U.S.C. section 1392 (f). That section of the Traffic and Motor Vehicle Safety Act of 1966 specified, in a similar manner, the matters to be taken into consideration in prescribing motor vehicle safety standards under that act.

The Senate report which accompanied the motor vehicle safety bill eventually adopted by the Conference Committee made it clear that in issuing any standard the Secretary would be—

required to publish a statement of basis and purpose which provides a nontechnical explanation sufficient to enable the public to understand the purpose and, where appropriate, the limitations of the standard's coverage together with a technical statement setting forth the data necessary to an evaluation of the standard by competent technical personnel.

The report further specified that judicial review of any standard should ascertain whether the standards promulgated were "supported by substantial evidence on the record considered as a whole."

Notwithstanding this apparently clear mandate, the courts in reviewing standards issued under the Motor Vehicle Safety Act have refused to grant "substantial evidence" review of rulemaking proceedings, but instead, have taken the position that standards may be set aside only if they can be shown to be "arbitrary and capricious." If the Secretary is permitted to rely on matters outside the administrative record in making his decision and if that decision must stand unless it can be shown to be "arbitrary and capricious" then it is clear that a person attacking an improvidently adopted standard would bear an impossible burden of proof. Therefore, there would be no realistic means of testing questionable regulations.

It is our belief that if there is to be any check whatsoever on the administrator's discretion in adopting standards, then it must be crystal clear that standards must be based on the record of evidence and comments received or obtained by the administrator and must be supported by substantial evidence appearing on that record. In a technical area such as this, mistakes can be made. We are attempting to assure that such mistakes can be corrected before irreparable injury

occurs.

In light of these considerations, the Associations would suggest the following language changes for section 6:

1. Revise the first line of the section to read as follows:

In establishing a need for, formulating and prescribing regulations and standards under Section 5 of this Act, the Secretary shall among other things * *

2. Revise subsection 6 (4) to read as follows:

Consult with the Boating Safety Advisory Council established in compliance with this Act regarding all of the foregoing considerations.

3. Add new subsection 6(5) reading substantially as follows:

Maintain a record of all evidence and comments relied upon in promulgation of standards in order that, in the event of judicial review, the reviewing court will have an adequate basis to determine whether the said standard is supported by substantial evidence on the record considered as a whole in the manner provided in 5 U.S.C. Section 706 (2) (E.)

4. Section 10-Federal Preemption. The associations are satisfied with the language of this provision. However, in view of the problems which are arising in connection with the preemption provision of the recently passed vessel pollution law, it should be made crystal clear that the preemption takes effect on the effective date of the statute, and not the effective date of the regulations issued thereunder.

5. Section 12 (a). While the associations agree with the intent of this section of the bill to make it unlawful for any person to manufacture or distribute noncomplying vessels and associated equipment in interstate commerce, we believe that the present language may work a hardship on persons in the distribution chain who sell noncomplying vessels or equipment without knowledge of such noncompliance. We understand that the staff has suggested language to meet this problem and we urge adoption of such language.

6. Section 12(e). If left unmodified, this section conceivably could be interpreted to cover dealer demonstration rides. At this time, no need has been shown for requiring the licensing of operators of vessels used for dealer demonstrations. The considerable expense and effort which would be required in order to administer a program for such licensing does not now seem merited. However, it is possible that this will become a problem in the future and we might want to leave the door open for the Coast Guard to adopt applicable licensing requirements without coming back to the Congress. Accordingly, we would suggest the addition of a new subsection 12(f) which would read substantially as follows:

(f) subsection 12(e) of this Act shall not apply to any vessel being used for bona fide dealer demonstrations furnished without fee to business invitees. However, if on the basis of substantial evidence the Secretary determines, pursuant to Section 6 hereof, that requiring vessels so used to be under the control of licensed persons is necessary to meet the need for boating safety, then the Secretary may promulgate regulations requiring the licensing of persons controlling such vessels in the same manner as provided in subsection 12(e) of this Act for persons in control of vessels carrying passengers for hire.

7. Section 15(d). Because of the potentially severe impact on the typically small manufacturer of boating equipment of publicity desseminated by the Secretary and the great possibility that the consumer will misinterpret such publicity, the associations have suggested revision of this subsection to read as follows:

(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 disclose to the public only so much of the information contained in the communication as he deems will contribute to boating safety.