Mr. CLARK. From the last sentence in your statement, I gather that you want the Administrative Procedure Act protections to apply to the promulgation of regulations under H.R. 17830. How do you propose that this be assured?

Mr. SCHULTZ. Sir, I am not a lawyer. I would hope somehow it could be part of the law that the Administrative Procedures Act be used. Personally, I think this would be an advantage. This is more than we have at the present time in regard to further regulations which by their nature might be created under an Executive order with no procedure for hearing from local interests in that respect. I think the industry would be ahead of where they are now if the Administrative Procedures Act applied in the security area.

In general, we have approved of what the Coast Guard hopes to do here. I think I have indicated we would like to know a little better just how far they propose to go. We have indicated our objections to getting too much detail in the regulation.

Mr. CLARK. Mr. Schadeberg.

Mr. SCHADEBERG. First of all, may I say I share the philosophy that the Federal Government should not do what can be done on some other level. I appreciate your comments.

On page 3. in the first paragraph, you say:

In some ways this is an extension of the Federal Water Pollution Control Act recently adopted which is already bringing port and waterway development in this nation to a standstill in the middle of the greatest transportation revolution in our history, through restrictive administration of the Act as regards navigational dredging requirements.

Do you have the figures on that? Have you made any study?

Are there some figures we could have for the record that would indicate in what way and to what extent this restriction is stopping development?

Mr. SCHULTZ. Probably I have an advantage in that I come from the Great Lakes. At the present time the deposit of dredging spoils in uncontained areas, or into the lake in general, has been prohibited by Executive order. Only those ports that have certain areas where the spoils are confined can continue dredging. This is all of the Great Lakes with the exception of Superior. This means that even maintenance dredging has come to a halt. I assure you that each time a port these days tries to create a landfill or find a location for dredging spoils that the pollution control interests, not just the Government. the private interests, are heard from considerably. They specifically do have that problem on the Great Lakes now; that is, where to go with the dredging spoil.

Mr. SCHADEBERG. I am quite sure in my district in the Port of Kenosha they had the problem. I am under the impression that the city government and the people involved in it are pretty much in favor of restricting that type of dredging dumping.

Mr. SCHULTZ. If it is maintenance dredging by the Federal Government, the local interests are required to provide the spoil disposal area. There is some legislation proposed that there be a 50-50 costsharing basis between the Federal and local interests.

No one is in favor of polluting the Great Lakes. Publicly I don't think anyone would take a position in favor of pollution. The costbenefit ratio of providing special areas for some dredging spoil is

pretty dubious and there are probably better investments to cure pollution; that is, improving sewage disposal facilities. I can appreciate the feeling of the pollution control people. Any pollution is bad and in that respect it is bad.

Mr. SCHADEBERG. Probably we need to redefine the cost-benefit ratio and put a certain portion on the basis of pollution rather than just economics of the port. That may be something we can look into. Is there any other area where you feel the development has been stopped or hindered because of restrictions?

Mr. SCHULTZ. I think the Great Lakes have accented the problem occurring everywhere else. It is becoming more and more difficult to obtain permits for new channels or even deepening or maintenance of existing channels. The definition of pollution, I guess, is anything that God did not put there. Under a restrictive interpretation such as that, it is impossible to do dredging even when the area is clean. We have had the problem to a higher degree before the other ports, but I can see this happening in all ports.

Mr. SCHADEBERG. Mostly in the area of dredging.

Mr. SCHULTZ. Any time you change the natural configuration.
Mr. SCHADEBERG. Thank you.

Mr. CLARK. Mr. Casey, have you any questions?

Mr. CASEY. As you go through your statement and you break it down under the various subject heads under basic vessel control, you indicate you are afraid the act may be overly administered. That is true of any act that the Congress passes unless we have an intelligent. administration. But I gather if you are assured that these controls were imposed only after hearings or after advice and consultation with the local authorities that it would to some extent, if not greatly, remove your objection to that particular section of the bill.

Mr. SCHULTZ. That would help. May I check with Mr. Amundsen? Is this reasonable?

Mr. AMUNDSEN. I think we can agree with you as you phrase it. Mr. CASEY. In other words, if the controls are adapted to local conditions and the local authorities are consulted, then their problems are taken care of in connection with the regulation thereof.

Mr. AMUNDSEN. We would like machinery whereby the economics are considered as well as the safety.

Mr. CASEY. You have no objection to the port security section of the bill?

Mr. SCHULTZ. No, sir.

Mr. CASEY. You have very little objection to the hazardous cargo section of the bill?

Mr. SCHULTZ. No objections, just a plea to reconcile our labeling and handling restrictions, we hope something in this bill would encourage more progress along this line.

Mr. CASEY. You are asking for safeguards to protect the private interests, or at least assure that the private interests are consulted and the economics are taken into consideration.

Mr. SCHULTZ. In this particular case; no. We are not objecting or not requesting that we get more involved than we are present. The present system is reasonably satisfactory. One of the difficulties that possibly could be cured at this time would be priority of authority of the different agencies, to get somebody who says a particular label or

symbol or regulation is the regulation, symbol, or what have you, for all carriers. Under ICC regulations and the Coast Guard there is some difference.

Mr. CASEY. One of the purposes of this bill was to put in the Coast Guard the kind of authority we feel might be needed, to have them be the controlling agency, and not have three or four agencies proscribing different rules of conduct. On the whole, this bill as a vehicle could work if it were improved and amended and modified to proscribe the kind of safeguards you are suggesting.

Mr. SCHULTZ. That is right.

Mr. CASEY. You are not opposed to the bill. You are suggesting some changes in the bill.

Mr. SCHULTZ. Yes.

Mr. CASEY. Thank you.

Mr. CLARK. Mr. Corrado?

Mr. CORRADO. Could we pursue this consultation idea a bit further! As I read the bill, there is no device or instrument in the bill for consultation with respect to the economic interests.

What is your suggestion to solve this problem?

Mr. SCHULTZ. I am not a lawyer by training so I do not know how it can be put into the law.

The Administrative Procedures Act seems to do the job. In setting ship standards and lifesaving equipment aboard vessels, the Adminis trative Procedures Act is followed. We are made aware of what the Coast Guard proposes to do by way of changes in that area. I guess it has not saved us from complexity, but let us say at this point the private interests do not have much objection if they have a reasonable hearing.

Mr. CORRADO. Under the Administrative Procedures Act after a hearing you have a chance to comment.

Mr. SCHULTZ. Yes.

Mr. CORRADO. It seem to me this is after the fact. They are bent on promulgating the rules. The Coast Guard chooses to promulgate the rules in a wide area. If you rely on the Administrative Procedures Act, your comments would come after the regulation procedure has been started or is underway. I wondered if you had any idea of consultation prior to this.

Mr. AMUNDSEN. If I may respond to that, our concern is in certain areas of this legislation. Our feeling is that the vessel traffic volume is a different thing in different waters. For example, the density of the Port of New York is an example of an extreme situation, whereas in other harbors this might be less of a problem. The whole thrust of our desire is for local consultations to that end, so you do not get some sort of a national system that would not work in some places. So we would want something in there that would build a safeguard along those lines.

Mr. SCHADEBERG. If the gentleman will yield, I share this idea— and I am not against the bill-I share his viewpoint, and I am concerned about two things. The first is a regulation which may be set permanently that may apply to one port but may not apply to another. Second, I think there should be some means by which the economie factor can share in this, as you say, before the fact, so that we can

prevent any unnecessary damage being done. I am sure that the private interests are not particularly interested in the dollar alone. They are interested in safety, too. Somehow or other you can put the two together.

Mr. CORRADO. The problem is how do we go about doing this?

Mr. SCHADEBERG. Maybe they can give us some legal help, or maybe we can in the committee. I am not a lawyer, either.

Mr. CORRADO. Maybe we can talk about this later.

Mr. AMUNDSEN. We would be happy to do that.

Mr. CORRADO. If there is interest in this area, if people see this as a problem, perhaps a way could be found to solve this problem. I think we will just have to see how it progresses and see to what extent it is really a problem.

In 3(b), it says that nothing contained in this act is intended to supplant or modify any treaty or statute or authority granted thereunder.

Yesterday we had extended testimony from the American Waterway Operators concerning possible conflict between the Corps of Engineers and the Coast Guard. There is some testimony of conflict between the Navy and Coast Guard in this area. You people, together with other witnesses, have raised a lot of problems about overlapping and coincidental jurisdictions and overlapping jurisdictions with State authorities and other Federal authorities, yet when you read 3(b), it says that nothing contained in this act is intended to supplant or modify any treaty or statute, and so on.

What would be your answer to the fact that a protection, at least as far as Federal law is concerned, seems to be written into the statute? If there is an existing Federal law, then this new law apparently would not have any effect on the existing law.

Mr. SCHULTZ. Speaking as a port operator, I can point out one of the problems there. Speed limits at the present time, where they exist, are set under the Corps of Engineers. If you have a disclaimer under the Coast Guard Act, then we will be under the Coast Guard vessel movement control except for certain exceptions. From a practical standpoint, it makes it a little more difficult if there is not one agency in charge. I do not know how to express it, but let us say some priority of power here. At the present time the Corps of Engineers seems to be limiting exercise of its powers. It is not growing with the system.

Mr. CORRADO. You are suggesting that the existing law would take precedence over this bill if it were to become law?

Mr. SCHULTZ. In some cases this is good, in some cases it is bad, depending on whose law we think is best. This is a problem. It is not clear. Mr. AMUNDSEN. A lot of times it depends on the aggressiveness of the several agencies. Our main fear is another Federal overlay in a State and local situation. It is a good example of what I first said in the Water Pollution Control Act which contains no mention of dredg ing. It is one of the first things to become regulated under the permit

system.

Mr. CORRADO. That may be a problem with this act because it seems to be broadly drawn. It leaves it wide open for regulation.

Mr. AMUNDSEN. To the degree that somebody wants to grab the ball, this is how it works out eventually in actual practice.

Mr. SCHULTZ. As an answer, we have commented on overlay here. I think we need to recognize that most port operators are not too conversant with all of the laws. They are busy trying to handle cargo. I think we can make a general statement with regard to overlay. We would prefer one good Coast Guard law to the laws we have now. Mr. CORRADO. The way it is worded now you have no choice. Mr. SCHULTZ. Then it is worded wrong.

Mr. CORRADO. This law would not have any bearing on what is already governed by law. You would not have your choice of what the best law is.

Mr. SCHULTZ. At the present time we do not have our choice of the best law. We are stuck with whatever agency is able to exert its power best in a particular case. As an industry position we are willing to give up something we do not have now, which is the best law in each area, for one reasonably good one. So at least we have one authority to look to. We have to only learn one rulebook.

Mr. CORRADO. Thank you very much, Mr. Chairman.

Mr. CLARK. Thank you very much.

Mr. SCHULTZ. Thank you, sir.

Mr. CLARK. The meeting is adjourned to the call of the Chair. (Whereupon, at 10:55 a.m., the subcommittee adjourned.)