does not include the Great Lakes, their interconnecting channels, and the Saint Lawrence Seaway, and

"(b) 'commercial users' means common, contract, or other carriers for hire and owners or operators of private shallow-draft cargo vessels.

"SEC. 306. This title may be cited as the 'Inland Waterways Improvement and Cost Recovery Act of 1978.'

IDENTIFICATION OF THE MAJOR DIFFERENCES IN VARIOUS PROPOSALS ON WATERWAY USER CHARGES

Mr. STEVENSON. Mr. President, Senator Domenici and I are today introducing a compromise amendment to H.R. 8309, the lock and dam 26 authorization and waterway user fee bill.

The amendment reflects concessions on all sides and is an effort to break an impasse that threatens to prevent replacement of locks and dam 26 on the Mississippi River at Alton, Ill., and many other worthy projects. Locks and dam 26 is used by the commerce of the Upper Mississippi and Illinois Rivers. In its present condition, this 40-yearold facility is inadequate. Its replacement is critical to the welfare of the most highly developed agricultural and industrial region in the world.

Under this amendment the barge industry will be required for the first time to contribute a portion of what the Federal Government spends to build, operate and maintain the inland navigation system. This step is long overdue-and I commend Senator Domenici for his unrelenting efforts to win a contribution from the industry most benefited by this system.

Our compromise will:

First. Authorize a new lock and dam 26 with a single 1,200-foot lock, configured so it can accommodate a second lock if authorized by Congress.

Second. Authorize studies for the planned development and environmental protection of the Upper Mississippi River. The amendment also prohibits a 12-foot channel on the Upper Mississippi River and its tributaries and construction of any new navigation projects pending the study.

Third. Impose a 2-cent-per-gallon fuel tax in fiscal year 1980 and fiscal year 1981 for commercial users of the system, increasing to 12 cents in fiscal year 1985 and thereafter.

Fourth. Authorize a 3-year study by the Department of Transportation of a comprehensive system of user charges for the inland waterway system.

Fifth. Require recovery of 10 percent of the cost of any new construction on the inland system, with the exception of locks and dam 26. The 10 percent recovery will be spread out over the entire system during the first 10 years a new facility is in operation.

The 10-percent contribution would not produce revenues until long after the Congress has considered the DOT study recommendations. When this study is completed, Congress will have an opportunity to repeal or change the recovery formula before it becomes operative. If for any reason construction of lock and dam 26 is delayed, the Congress might well decide to repeal the 10-percent cost recovery before it takes effect. If it deferred action on the DOT user fee study, the 10 percent recovery would remain in effect.

This compromise is sound and workable. It has won the backing of the administration. It meets its "minimum" requirements with respect to recovery of operating and capital expenditures for the inland waterway system. Similarly, the administration has informed us that the House bill, which contains a lower fuel tax and no capital recovery formula, and the other known proposals circulating in the Senate do not meet the President's requirements and would not be approved,

The fuel tax in this amendment is modest; 12 cents is equal to the average State and Federal fuel taxes now paid by the trucking industry in the region and does not take full effect until 1985. By then 12 cents per gallon on marine diesel fuel will be lower than highway fuel taxes. The trucking industry also pays Federal excise taxes on tires, batteries, and other products; 12 cents per gallon would recover approximately 50 percent of the Federal Government's annual expenditures for operation and maintenance of the inland waterways.

The Senate earlier approved a provision supported by Senator Domenici and the administration that would have required the barge industry to pay the full operating and maintenance costs and half the capital costs of new construction. In the interest of getting action, they have made substantial concessions. I have relented in my opposition to recovery of an arbitrary percentage of construction costs. This is, therefore, a compromise. It is also a sound basis for action and little enough to ask of the waterway industry.

Senator Dominici and I have never disagreed on the need for user fees. We have not disagreed on the need for a new lock and dam. We disagreed on how to best achieve common goals. We are now of one mind, and I am optimistic that we will succeed with the Carter administration's support.

This amendment, if approved, would assure Midwest farmers transportation for their products at reasonable cost. It would assure city dwellers a means of receiving coal and other fuels. It offers equity to the American taxpayer. And it begins the process of balancing competing modes of transportation, so that the waterway users no longer enjoy an advantage which threatens the viability of other vital transportation modes.

This issue has been debated for 3 years. It is our last chance in this Congress to authorize replacement of locks and dam 26-and it is our last chance this year to enact user fees. This compromise has the backing of the administration and will be signed. I urge its adoption.

Mr. President, I commend the administration for its cooperation and productive attention to this matter and I ask unanimous consent

that a copy of Secretary Adams' letter to me of April 28 be printed in the Record.

There being no objection, the letter was ordered to be printed in the Record.

THE SECRETARY OF TRANSPORTATION,
Washington, D.C., April 28, 1978.

Hon. ADLAI E. STEVENSON,
U.S. Senate,

Washington, D.C.

DEAR SENATOR STEVENSON: I am writing to advise you of the Administration's views on legislation now pending before the Senate concerning Lock and Dam 26 and waterway user charges.

When I last wrote you on the issue of waterway user charges, it was to inform you of the President's intention to veto the House bill, H.R. 8309. We remain convinced that the 4c/6c tax recommended by the House is inadequate.

The Administration would still prefer legislation recovering 100 percent of the costs of operation and maintenance, and 50 percent of the cost of new construction of the inland waterway system. This year those costs are approaching the half-billion dollar level.

In order to expedite this matter, however, we will accept the compromise substitute for H.R. 8309 that has been offered by Senators Stevenson and Domenici. This substitute offers the minimum acceptable basis from which to develop an adequate House-Senate Conference bill.

In our view, the most important elements of the Stevenson-Domenici proposal

are:

(1) An adequate level of taxation implemented by a date certain. We support the Stevenson-Domenici proposal for a gradually phased-in fuel tax beginning no later than FY 1980, and reaching 12c per gallon by the end of FY 1984. This tax will still be proportionally much less, for example, than the dedicated highway taxes paid by the trucking industry. Based on extensive studies, we believe that this tax would impose no serious hardship for barge companies or their shippers.

(2) The principle of cost recovery. Both this Administration and the Senate have supported full recovery of operation and maintenance costs and 50 percent recovery of the cost of new construction on the inland waterway system. While we remain convinced of the correctness of our position, we are willing to postpone implementation of this level of recovery pending the outcome of a comprehensive study to be carried out by the Department of Transportation and other agencies.

In the meantime, the fuel tax discussed above should be implemented. For any projects initiated prior to the enactment or rejection of the recommendations of the DOT study, a minimum of 10 percent of capital costs should be recovered, as proposed in the Stevenson-Domenici substitute.

(3) Comprehensive planning for the inland waterway system. As the costs of the current waterway system have escalated, the need for a comprehensive review of waterway development policy has grown. The commercial waterway industry, according to a recent CBO study, receives the equivalent of 40 percent of its annual revenues in Federal subsidies in the form of free Federal waterway operation and construction; the equivalent Federal subsidy of other modes is 3 percent or less. The Stevenson-Domenici study proposal offers an opportunity to develop a coordinated approach to waterway costs within the context of a national transportation system.

This Administration very much wants to establish a fair system of waterway user charges along with the waterway improvements that are needed. However, the President has asked me to emphasize that our desire to establish this system does not mean that we will accept legislation involving insubstantial taxes which are indefinitely delayed. He has asked me to advise you that he will not sign legislation authorizing a new lock and dam at Alton, Illinois unless it establishes a firm time-table with an early commencement date for the implementation of a fuel tax which would recover a substantial portion of operating costs. Moreover, acceptable legislation would provide for some capital cost recovery on new waterway construction, pending Congressional enactment or rejection of the recommendations of the DOT study. The Stevenson-Domenici proposal meets

these criteria as compared with other proposals that have been circulated recently in the Senate which do not, and would not be signed.

In addition the President has asked me to convey his hope that this bill will not be used as a vehicle for additional costly or extraneous amendments that could jeopardize final enactment of this needed legislation.

I hope that you will be able to support the Stevenson-Domenici substitute, and that we can finally resolve this difficult issue.

Sincerely,

BROCK ADAMS.

WATERWAY USER CHARGES: THE ADMINISTRATION TAKES A STRONG POSITION IN SUPPORT OF THE AMENDMENT OFFERED BY SENATORS DOMENICI AND STEVENSON

Mr. DOMENICI. Mr. President, over the weekend, each of us, I believe received a letter from Secretary of Transportation Brock Adams detailing the clear position of the Carter administration on the issue of waterway user charges and H.R. 8309.

Secretary Adams states that President Carter "has asked me to advise you that he will not sign legislation authorizing a new lock and dam at Alton, Ill., unless it establishes a firm timetable with an early commencement date for the implementation of a fuel tax which would recover a substantial portion of operating costs. Moreover, acceptable legislation would provide for some capital cost recovery on new waterway construction. ***"

Mr. President, I ask that this important letter be printed in the Record.

[The letter referred to by Senator Domenici was previously entered into the Record by Senator Stevenson and may be found at p. 289.]

SENATE DEBATE-MAY 3, 1978

NAVIGATION DEVELOPMENT ACT (H.R. 8309)

UNANIMOUS-CONSENT AGREEMENT

Mr. LONG. Mr. President, I ask unanimous consent that if either the Senator from Louisiana (Mr. Long) or the Senator from New Mexico (Mr. Domenici) offers an amendment on user fees and locks and dam No. 26, the amendment thereon by the other Senator be in order as a substitute therefor, be considered as before the Senate also, and that if one is agreed to, the other falls. If the Senate votes for the amendment, the one agreed to becomes a part of the bill.

I further ask unanimous consent that thereafter, it shall be in order to offer an amendment by Mr. Danforth relating to fees on deep-draft vessels, an amendment by Mr. Allen relating to LASH barges, and another amendment by Mr. Allen relating to the definition of inland waterways.

The PRESIDING OFFICER. Is there objection?

Mr. ALLEN. Reserving the right to object, and I shall not object. I appreciate the courtesy of the distinguished Senator from Louisiana (Mr. Long) and the distinguished Senator from New Mexico (Mr. Domenici) in propounding this unanimous-consent request. It does get us out of a parliamentary bind that would have prevented the offering of amendments, because the substitute, if agreed to as to whichever amendment was pending, would have precluded offering other amendments. This does give us an opportunity to offer our amendments. I do appreciate this request being made.

Mr. DOMENICI. Mr. President, reserving the right to object, and I shall not, I thank the distinguished Senator from Louisiana and the distinguished Senator from Alabama for helping us work this out.

It is my understanding, I say to my good friend from Louisiana, that even though the so-called Long amendment and the Domenici amendment may touch different parts of the bill, it is our intention that, indeed, as the unanimous-consent agreement states, they would be considered substitutes, one for the other, as if they did not touch different parts of the bill.

Mr. LONG. Yes; as far as this Senator is concerned, I believe we have an understanding also that, however the vote goes between the two of us, we expect to abide by it.

The PRESIDING OFFICER, Is there objection?

Mr. LONG. So that we will decide which will go first and we can settle the rest of it.

Mr. DANFORTH. Reserving the right to object, is it my understanding that the amendment of the Senator from Louisiana and the amendment of the Senator from New Mexico will be be debated at the same time?

Mr. LONG. Yes.