Mr. FRENZEL. No questions. I thank my colleague for his fine testimony.

Mr. BURLESON. Mr. Lederer.

Mr. LEDERER. No questions, but we do thank the gentleman.

Mr. BURLESON. Mr. Gradison.

Mr. GRADISON. No questions, thank you, Mr. Chairman. Thank you Mr. Bedell.

Mr. BURLESON. We thank you again, Berkeley.

Our next witness is our colleague, Congressman Robert Edgar. Is Bob here?

Mr. EDGAR. Right here.

Mr. BURLESON. Glad to have you, Mr. Edgar. If you wish to have your full statement included in the record and summarize, we would appreciate it.

Mr. EDGAR. Thank you Mr. Chairman. I ask unanimous consent to insert my statement for the record.

Mr. BURLESON. It will be done.

STATEMENT OF HON. ROBERT W. EDGAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. EDGAR. I am a member of the full Public Works and Transportation Committee which considered this issue over the last few days. I speak representing a minority point of view on that particular committee, in full support of the Secretary of Transportation and the administration's position of phasing in over the next 10 years a user fee concept that would recover 100 percent of operation and maintenance and 50 percent of construction costs on our waterway system.

I would like to just briefly outline five basic areas of concern to me. First, the question of studies. Our colleague Bill Alexander mentioned that the National Transportation Policy Commission will be bringing forward to Congress a study on the user fee concept. He proposes that we wait until that study arrives. I would like to quote from a study that says this: "Gathering together all of the preceding discussion, it may be concluded that the assessment of tolls would remove an unstabilizing influence from the field of transportation, lessen or eliminate the rancor and the lack of willingness to cooperate which the relations of rail and water carriers and make more successful planning of future waterway improvements and of transportation policies generally.

That quote comes from a 1939 report to Franklin Delano Roosevelt, and it is one of 18 studies. I would like to submit for the record a list of the 18 studies that have been put forward, and I noticed in reviewing this list of 18 it does not include the study that was reported by the Army Corps of Engineers in December 1976, recommending waterway user fees. It does not include the three volumes put forward by the Department of Transportation in March of 1977, in support of waterway user fees.

It does include the CBO working staff paper which was released last week which summarized many of these reports and recommended waterway user fees. I would also draw the committee's attention to the November 28, 1975, report of the Comptroller of the United

States, where he lists out some of the questions and comments of the commissions and agencies who have indicated that we ought to move to some user fee concept.

Mr. BURLESON. Do you wish to have that inserted in the record? Mr. EDGAR. I would like to have both the list of studies and the statement of the Comptroller General inserted in the record.

Mr. BURLESON. Without objection, both papers will be inserted in the record.

[The prepared statement and materials referred to follow:]

STATEMENT OF HON. ROBERT W. EDGAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. Chairman, thank you for this opportunity to appear before the Ways and Means Committee on the issue of waterway user taxes.

Yesterday afternoon, the Public Works and Transportation Committee approved H.R. 8309. Title I of this legislation authorizes the construction of a new lock and dam at Alton, Illinois. Title III of the legislation authorizes a comprehensive study on the need for, and the impact of, waterway user charges. Title II has been left blank by the Committee, so that the Ways and Means Committee can insert a tax to compensate the Federal government for expenditures which directly benefit a single mode of commercial transportation at the expense of other modes.

I strongly support the establishment of a waterway user charge or tax. The barge industry is the only one which doesn't contribute to the cost of its right of way. I am a member of the Public Works and Transportation Committee, Mr. Chairman, and I testified before its Water Resources Subcommittee three days ago to express my views on the issue. If there is no objection, I would like to insert at this point of my testimony a copy of my statement before the Water Resources Subcommittee. I anticipate that today and tomorrow, this Committee will learn of the unfairness of the present Federal policy toward inland waterways, so I will go on to other issues.

Mr. Chairman, I have supported waterway user charges for a long time. Last year, I introduced an amendment in the Water Resources Subcommittee to establish a modest waterway user charge. I withdrew the amendment after receiving assurances that the issue would be looked at closely during the 95th Congress. Yesterday, following a full day of hearings on waterway user charges, I introduced during full committee markup of H.R. 8309 a waterway user charge proposal. This amendment was similar to the amendment approved by the Senate on June 22nd. It was also very sensitive to the views of Secretary of Transportation Brock Adams, who testified on Monday that the Administration supports a user charge or tax which would raise, following a phased-in period not exceeding ten years, 100 percent of operating and maintenance expenses of the Corps of Engineers, and 50 percent of capital expenses of the Corps, for the inland waterway system.

Mr. Adams warned the Committee that there was the prospect of a Presidential veto on this legislation, unless there was a user fee or tax which raised close to the 100 percent O. & M., and 50 percent capital formula supported by the Administration. The Secretary also noted that relying entirely on a user tax would bring about basic inequities. The barge owners on the heavily traveled Mississippi would be subsidizing barge traffic on less traveled waterways if there were no factor based upon the relative O. & M. and capital costs per ton mile.

My amendment would have allowed the Committee to strike a balance between the fees collected as a tax, and the fees collected as a charge. It would have maintained the responsibility of the Public Works and Transportation Committee over waterway policy. I have expressed concern that the Committee abdicated its responsibility on this issue, Mr. Chairman. My amendment would have allowed the Committee I serve on to set the schedule of charges, and to set the schedule of the phase-in period.

Unfortunately, the amendment was defeated by a large margin. I do not believe that there is enough sentiment on the Committee to approve a user charge. Therefore, I recommend that this Committee approve what ever user

tax it deems necessary to meet the objections of the President, and end this unnecessary subsidy which distorts transportation policy and serves narrow economic interests at the expense of our taxpayers.

According to the Department of Transportation, a 42 cents tax would be required. I support such a tax, and I urge this Committee to approve a tax which will be absorbable by the barge industry.

Thank you, Mr. Chairman, and I would be glad to respond to any questions you or the other Members of this committee wish to ask.

TESTIMONY OF CONGRESSMAN ROBERT W. EDGAR BEFORE THE HOUSE SUBCOMMITTEE ON WATER RESOURCES ON WATERWAY USER CHARGES, JULY 18, 1977

Mr. Chairman, I am pleased to appear before this subcommittee to testify today on the issue of waterway user charges. Last year, as a member of the subcommittee, I introduced an amendment to establish a phased-in charge for the millions of dollars which the Federal government expends to construct, operate, and maintain the 15,000 mile network of waterways which are navigble by barges. I withdrew the amendment after I was assured that this issue would receive attention during the 95th Congress.

I urge this subcommittee to support efforts to enact a user charge. The American public should be outraged that their government does not require the reimbursement of a single dollar of the nearly $400 million which are expended annually by the Corps of Engineers for construction, operation, and maintenance of our inland waterway system.

For those who have no financial or political interest in this issue and have read the scores of reports, studies, and media accounts, it is sometimes difficult to grasp why a waterway user charge wasn't implemented thirty years ago. There are few obligations by the Federal Treasury which are less justifiable, in my opinion. Every Administration since Franklin Roosevelt has endorsed a user charge concept. Virtually every independent study done supports user charges, and the view that the lack of such a program represents a significant distortion of our transportation policy. A staff working paper released last week by the Congressional Budget Office systematically and cogently shreds all of the flimsy arguments advanced by certain narrow economic interests which have successfully strangled user fee efforts for decades.

This report adds to the powerful evidence against the present system, which subsidizes some of the largest conglomorates in the United States. The time for reform is ripe. The Senate has endorsed a user fee concept. This subcommittee will have a major role in removing the institutional barriers which have prevented a profitable industry from paying its fair share for benefits received. Your leadership, Mr. Chairman, is needed to remove this distortion in transportation policy. In scheduling these hearings, you and the subcommittee should be congratulated.

Last week, I introduced H.R. 8292, to establish a program of user charges on our inland waterways. This legislation is cosponsored by my friend and colleague Berkley Bedell, who has worked very hard during this session of the Congress to sensitize our colleagues to the need for such a charge. As far as I know, H.R. 8292 is the only user charge bill which can be considered exclusively by the Public Works and Transportation Committee. Three similar proposals have been introduced during this session. Bills of Mr. Bedell, Mr. Leach, and Mr. Skubitz have been jointly referred to the committees of Public Works and Transportation and Ways and Means.

My bill is very similar to the legislation approved by the full Senate authored by Senator Domenici. H.R. 8292 directs the Secretary of Transportation, in consultation with the Secretary of the Army, to establish a program of user fees to recapture a maximum of 50 percent of Federal operations and maintenance costs, and 100 percent of construction costs expended for the inland waterway system. The charges would be phased in over a 10-year period, and would go into effect following mandated public hearings, the publishing of preliminary regulations, public comment and the publishing of final regulations -provided that the final regulations are not disapproved by a Joint Resolution of the Congress.

The program could use five strategies to assess user charges; (1) license fees;

(2) congestion charges;

(3) ton-mile segment charges;

(4) lockage fees; and

(5) loaded and unloaded capacity charges over various segments.

Mr. Chairman, the Ways and Means. Committee is conducting two days of hearings late this week on user charges. I understand that that Committee plans to go ahead with a user tax which they will request to be attached as Title II of the bill before this subcommittee. While the proposal I introduced is not a tax, I support proposals which would place a tax on fuel used by barges. There has been discussion of a four cent fuel tax. Such a tax would raise less than 10 percent of the annual Federal expenditures on the waterway system, perhaps $30 million. There are advantages to a fuel tax proposal. It is much easier to administer than a segment charge. A 4-cent tax would be a good place to start, but I see no reason why members of this subcommittee could not support a tax of 40 cents per gallon, phased in over a 10-year period. The schedule of the tax could parallel the schedule of user charges in H.R. 8292. During these hearings, the subcommittee may hear certain statements in opposition to user charges or user taxes. I would like to take a minute to explode some of the myths which have been perpetuated by those who seek to maintain this raid on our taxpayers. These statements are as follows: (1) transportation of goods by barge is more energy-efficient than by other transportation forms, and should be encouraged; (2) the goods carried by barges are basic commodies such as coal, grain, and gasoline. Raising their price would only contribute to inflation; (3) the subsidy stimulates economic development adjacent to the waterways; (4) barge traffic would be diverted to other forms if a user charge were imposed; and (5) the costs of the user charge would be passed on to consumers anyway, or reduce the profits of farmers.

Mr. Chairman, pipelines are more energy efficient than other modes, yet receive no government subsidy. Energy studies historically fail to include the energy used in getting the commodity to the waterway, a process which often uses trucks and rail. The July, 1977, CBO report is illuminating on this issue. It finds:

"Opponents of waterway user charges argue that barge transportation should be encouraged by a subsidy because it is more energy-efficient than competing methods of transportation. Relative energy use varies greatly in specific circumstances because of differences in size, speed, and type of shipments for barges, railroads, pipelines, and trucks. When reasonable estimates vary so widely one can only conclude that blanket statements on energy efficiency are unwarranted.. (p.x, "Financing Waterway Development: The User Charge Debate", July, 1977)

If there is reason to subsidize basic commodities, the subsidy should be allowed for all transit modes. If economic development is desired, subsidies should be allowed for all modes in areas where economic development is needed. The barge traffic which would be diverted is that which cannot pay its own way without being subsidized. Of course, lifting this subsidy would require someone else to pick up the tab. This argument would be just as viable for subsidies of other modes. The fact is that it is the policy of the Federal government to require any class of people who benefit from Federal expenditures to pay for that expenditure. This policy, underscored by the national transportation policy statement issued on September 17, 1975, also appears in a different form in existing law (65 Stat 290).

Every other transit mode has user charges despite the fact that economic development is stimulated by these modes, and that the price of goods transported by these modes increases the price. When one mode does not pay its fair share, it distorts competition between modes. This is what has occurred, in my opinion.

I agree with many of my colleagues that instituting an immediate 100 percent recovery would have an adverse impact on our commercial transportation network, and would be unacceptable. But there is no reason to begin recovery on a schedule of my bill, which starts with a 20 percent recovery of operation and maintenance expenses beginning the first year the program is established. Mr. Chairman, I am concerned by the study provision which appears in H.R. 8309. I agree that once user charges are authorized, the economic and social impact should be closely monitored. If any study is needed before a charge is enacted, perhaps we should direct the Secretary of Transportation to study the scores of studies which have been performed to look at this issue

during the last four decades. Authorizing the study in H.R. 8309 would only continue to delay the day when the barge owners have to begin paying for services rendered.

In conclusion, I urge this subcommittee to endorse the spirit of bills such as H.R. 8292, H.R. 8254, H.R. 8302, and H.R. 4339, legislation which in my opinion is clearly in the national interest.

I am willing to respond to any questions to have, Mr. Chairman.

STUDIES AND POSITIONS ON WATERWAY USER CHARGES

(1) 1939: Report of War Department and Treasury Department. Report favored adoption of user charges.

(2) 1939: Report of the Federal Coordinator for Transportation. Report favored reduction in federal investment in waterways.

"Gathering together all of the preceeding discussion, it may be concluded that the assessment of tolls would remove an unstabilizing influence from the field of transportation, lessen or eliminate the rancor and the lack of willingness to cooperate which mark the relations of rail and water carriers, and make for more successful planning of future waterway improvements and of transportation policies generally."

(3) 1942: Report of National Resources Planning Board. Favored user charges.

(4) 1944: Report of Board of Investigation and Research. Favored user charges.

(5) 1946: Hearings of the House Committee on Interstate and Foreign Commerce. No formal recommendations.

(6) 1950: Senate Commerce Committee held hearings on inland waterways under Senate Resolution 50.

(7) 1950: Report of President's Water Resources Policy Commission. Recommended user charges.

(8) 1952: Department of Commerce Study: Background Study.

(9) 1960: Department of Commerce Study: Recommended user charges. "National Transportation is basically out of balance. It is less a national system than a loose grouping of individual induction. We have built a vast network of highways, railways, inland waterways and seaport, airways and airports, and pipelines, with little attention to conflict among these expanding networks."

(10) 1966: Economic Report of the President.

"At the same time, cost should reflect the value of all the resources required to provide the service. Federally provided transportation facilities have continually expanded. Users should pay their fair share of the cost and maintenance of the highways, waterways, and airway facilities. As it is, there are uneven payments from different classes of users-some making substantial payments and others none at all. Adequate user charges should be instituted in the interest of both equity and overall transportation efficiency."

(11) 1970: Charles River Associated Study for DOT. Recommends user charges.

(12) 1971: DOT study. Recommends user charges.

"The argument for some user charge on grounds of equity and efficiency is impeccable

(13) 1973: National Water Commission. Recommended charger to recover 100% of O+M and 100% of new capital.

"There is no longer any rational justification for assumption by the Federal Treasury of the entire cost of construction, operating, and maintaining navigable waterways."

The report also stated:

"First, a major weakness of the present program stems from deficiencies in the procedures by which it is determined whether or not a proposed waterway project would result in a justified addition to the national transportation system.

"Second, a major weakness of the legislative policies governing the present program is that they do not require beneficiaries to share in the cost of constructing, operating, and maintaining Federal waterway projects.