Contents. Lease Financing Rule Affirms Administration Support for Jones Act. Table of VOLUME 61, NO. 4 FEBRUARY 20, 2004 HIGHLIGHTS IN THIS ISSUE

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1 ISSN Agency Actions Phone: (703) Fax: (703) North Quincy Street, Suite 200, Arlington, Virginia Contents Table of VOLUME 61, NO. 4 FEBRUARY 20, 2004 HIGHLIGHTS IN THIS ISSUE Lease Financing Rule Affirms Administration Support for Jones Act...1 USCG Publishes Changes to PREP Schedule...2 New One-Page Drug Testing Form Required for MIS Reporting...3 Legislative News Senate Approves Highway Bill; Measure Includes 4.3-Cent Repeal...3 In the News Defending America By Sea...4 AIS Shared Use Proposal Submitted...5 Association News Save the Date: AWO Spring Convention Events Scheduled...6 Capital River Relief: Team Up to Clean Up...6 Responsible Carrier News Thirty-One RCP Auditors to Recertify...7 Interregion Safety Committee to Meet, Work on 2004 Safety Priorities...7 Regional Reports Pacific Region Holds Annual Meeting in Seattle...8 Atlantic Region Meets in Washington, D.C...8 President Urged to Examine Administration s Missouri River Plans...10 Lease Financing Rule Affirms Administration Support for Jones Act RRecent Coast Guard and Maritime Administration pronouncements on vessel lease financing include a strong reaffirmation of the Bush Administration s support for the integrity of the Jones Act. The quotations below are from the preamble to the Coast Guard s February 4 final rule on lease financing (see February 6 AWO Letter). While AWO is continuing to analyze the details of the final rule and the accompanying notice of proposed rulemaking jointly issued by the Coast Guard and the Maritime Administration, statements such as the following made by the Coast Guard in the preamble, make clear that the Administration s goal is to respect congressional intent and uphold longstanding cabotage principles: The final rule, together with the proposals in the separate rulemaking, are designed to preserve the Jones Act protections completely, while allowing lease-financing owners to own vessels in coastwise trade. According to the legislative history for the 1996 Act, Congress intended to broaden the sources of capital for owners of U.S. vessels engaged in the coastwise trade by creating new lease-financing options. At the same time, the Conference Report states that Congress did not intend to undermine the basic principle of U.S. maritime law that vessels operated in (continued on page 2) This edition of the AWO Letter is sponsored by:

2 AGENCY ACTIONS Lease Financing Rule Affirms Administration Support for Jones Act (continued from page 1) domestic trades must be built in shipyards in the United States and be operated and controlled by U.S. citizens, which is vital to U.S. military and economic security. A number of comments suggest that the proposed rules would have a detrimental effect on the integrity of the Jones Act, as well as on U.S. military and economic security, because the proposals could allow significant portions of the U.S.-flag coastwise fleet to fall under foreign control. We agree with the premise of these comments. Because of the rich history of the Jones Act, the protections it has traditionally extended to American citizens, and the lack of any indication in either the statute or the legislative history in favor of an USCG Publishes Changes to PREP Schedule intended repeal of the Jones Act, we reject the conclusion of those who construe the law so as to accomplish such a repeal. the lease financing law was intended to be a narrow exception to the Jones Act; it was not intended to repeal that Act. we do not agree that the statute should be applied so literally that the result would be a wholesale, yet implicit, repeal of the Jones Act protections for domestic shipping. We have historically implemented the vessel-documentation law with due regard to the important cabotage principles embodied in the Jones Act. We have endeavored in the past, as we do now, to carry out the cabotage principles that are the essence of the Jones Act as expressed by Congress The Coast Guard has published a revision to the earlier announced Area Exercise schedule for the National Preparedness for Response Exercise Program (PREP) for calendar years 2004, 2005, and PREP, which was developed by the Coast Guard, the Environmental Protection Agency (EPA), the Research and Special Programs Administration (RSPA), and the Minerals Management Service (MMS), provides guidelines for compliance with the pollution response exercise requirements of OPA 90. Area Exercises involve the entire response community (federal, state, local, and industry participants) and are designed to evaluate the entire response mechanism in a given Area to ensure adequate response preparedness. The changes to the schedule include date changes for government-led exercises in 2004 in Guam, Prince William Sound and EPA Region I. For industry-led exercises, a date change has been made to the Maryland Coastal exercise. A complete revised triennial schedule is available. Companies interested in participating in an Area Exercise may call either the Coast Guard office or the EPA On-Scene Coordinator (OSC) where the exercise is scheduled. The revised PREP schedule was published in the February 5 Federal Register. The PREP Area Exercise schedule and exercise design manuals are available on the Internet at in the Act itself and its legislative history, as well as in the leasefinancing amendment and its legislative history. We believe that in order to carry out Congress s intent in implementing the lease-financing law, we must be mindful of all legitimate sources from which that intent may be gleaned. In fact, for us to ignore the Jones Act or its rich history would be contrary to our responsibility. we agree that Congress also did not intend any more of a relaxation of the Jones Act than was necessary to effectuate the purposes of the lease-financing provision. It sought to preserve control of the operation and management of lease-financed vessels in the hands of section 2 citizens by means of requiring a long-term demise charter to such a citizen. We agree with the contention that Congress did not intend a wholesale repeal of the Jones Act with the lease-financing amendment. AWO is currently conducting a more detailed analysis of the Coast Guard and MarAd documents and will provide further information to members shortly. In the meantime, all AWO members should plan to participate in this rulemaking by submitting comments on the NPRM (due May 4) and speaking at the public hearing (date and location to be announced). AWO will provide more information to assist members in preparing comments to the docket and statements for the public hearing. AWO members with questions about this rulemaking should contact Jennifer Carpenter at (703) or jcarpenter@vesselalliance.com. For a copy of the final rule or the NPRM, contact Amy Brandt at abrandt@vesselalliance.com. 2 February 20, 2004

3 AGENCY ACTIONS/LEGISLATIVE NEWS New One-Page Drug Testing Form Required for MIS Reporting To conform Coast Guard drug testing regulations with a 2003 Department of Transportation (DOT) final rule on Drug and Alcohol Management Information System (MIS) Reporting, the Coast Guard will now require all marine employers to use a single-page form for MIS reporting. DOT agencies and the Coast Guard will now use a common form to collect information on employee drug testing data. The final rule is effective March 12, The new one-page form eliminates several data elements on the annual MIS reporting form. Marine employers will no longer have to report the number of persons denied a position for a positive drug test, the number of employees returned to duty following a drug violation, employee and supervisor drug and alcohol training data, post-accident alcohol testing data, and reasonable cause alcohol testing data. Marine employers are not required to submit alcohol testing information on the new MIS form because marine employers are not subject to the alcohol testing provisions of the DOT regulations. AWO members are reminded that the new MIS form, available from any Coast Guard Marine Safety Office or on the Internet at must be submitted to the Coast Guard for calendar year 2003 by March 15, Reports should be mailed to: Commandant (G-MOA), U.S. Coast Guard Headquarters, 2100 Second Street, S.W., Room 2404, Washington, D.C , or by electronic submission to the Web site listed above. CTAC Plans Spring Meeting The Chemical Transportation Advisory Committee (CTAC) will hold its spring meeting on March 2-4 at Coast Guard headquarters. CTAC advises the Coast Guard on various issues related to the marine transportation of hazardous materials in bulk. The CTAC Subcommittee on Hazardous Cargo Transportation Security will meet first, on March 2 and 3 from 9:00 a.m. to 4:00 p.m. The subcommittee will discuss the CTAC recommendations to the Coast Guard on bulk solid ammonium nitrate. The full CTAC meeting will be held March 4, from 9:00 a.m. to 3:30 p.m. The committee will consider the status of maritime security rule implementation, an initiative to include marine-specific competencies for hazardous material incident responders in the National Fire Protection Association (NFPA) 472 Standard, and an update on Coast Guard regulatory projects including the hazardous substance response plan regulations. The meetings will be held in Room 2415 at U.S. Coast Guard Headquarters, 2100 Second Street, S.W., Washington, D.C. All meetings are open to the public. For a copy of the complete agenda, Amy Brandt at abrandt@vesselalliance.com. Senate Approves Highway Bill; Important Dates and Reminders at a glance All contact persons can be reached by calling AWO s Arlington, VA office at (703) unless otherwise noted. March 15: Registration deadline for AWO's second annual Congressional Barge- In, scheduled for April 21 in conjunction with the Spring Convention in Washington, D.C. For more information, contact Megan Tucker. March 17: Admiral s Breakfast with VADM Hull and RADM Duncan in conjunction with Inland Industry Days, New Orleans, LA. For more information, contact Lynn Muench at (314) Measure Includes 4.3-Cent Fuel Tax Repeal On February 12, the Senate passed its version of the highway reauthorization bill (S. 1072). The mammoth piece of legislation would authorize $318 billion over six years for federal aid for highways, highway safety programs and transit programs. Of particular interest to AWO, the bill includes language to repeal the 4.3 cent-per-gallon fuel tax that is paid by inland barge operators and the railroads effective October 1, This is good news considering the continued uncertainty surrounding ultimate completion of the energy package, which is the current vehicle for repeal of the 4.3-cent tax. While inclusion of the 4.3-cent repeal provision in the highway bill provides an alternate route for securing repeal this year, it is important to note that this route is also paved with obstacles due to concerns regarding the high cost of the highway package. The Senate highway bill also includes language that would require electronic report filing under the IRS ExSTARS (Excise Summary Terminal Activity Reporting System) Program. This language does not, however, mandate Electronic Data Exchange (EDI) as the only form of electronic filing. In addition, while an earlier version of the legislation would have given the Secretary of the Treasury and the Internal Revenue Service broad discretion to select an electronic filing format, the final version of the bill does not provide such authority. AWO will continue to work with key congressional staff to ensure that EDI not be mandated as the only form of electronic filing. February 20,

4 LEGISLATIVE NEWS/IN THE NEWS Defending America By Sea This story, authored by Associated Press Reporter Randall Richard, ran in numerous major newspapers across the nation on February 9. (AP) As the U.S. Coast Guard tackles its new, urgent mission of protecting America from terrorist attack, one of the tools it needs is a radio frequency to help monitor the movements and cargo of thousands of ships that enter the nation s ports each year. But the Coast Guard is out of luck. The Federal Communications Commission - over the Coast Guard s objections - sold the frequency at auction to a private company in 1998 for $6.8 million. Now the Coast Guard wants a slice of the frequency back, calling it essential to its plans. The winning bidder, MariTEL Inc., says it can have it, maybe, for $20 million. MariTEL bought the frequency fair and square, realizing at the time, even if the FCC didn t, just how valuable it was. Like any good entrepreneur, the company expects to profit from its investment, says Dan Smith, who, as MariTEL s president, supervises its two other employees. The squabble over the radio frequency is just one of the obstacles the Coast Guard faces between now and July 1, the day it promises to enforce new anti-terrorism rules mandated by the federal Maritime Transportation Security Act of With 361 ports to protect, 95,000 miles of navigable waterways to defend and 20,000 oceangoing vessels to keep an eye on, the Coast Guard is focusing on what it considers the nation s 11,700 most likely maritime targets of a terrorist attack. About 3,200 of them are on shore: oil refineries, nuclear power plants, liquid natural gas facilities and hundreds of other waterfront sites that use or store hazardous materials. The 8,500 others are on the water: ferries that carry tens of thousands of commuters to work in cities from Seattle to New York, barges and cargo ships that crisscross U.S. harbors and inland waterways, oceangoing tankers and freighters that bring in everything from oil and fertilizer to automobiles and bananas. Oceangoing vessels are of special concern because they often pick up their cargos in countries where terrorists are born and arrive in U.S. ports after crossing lawless oceans where pirates still prowl. Container ships alone bring 16 million boxcar-sized containers a year to U.S. ports, and 95 percent of them are unloaded without ever being inspected. It is to the water, not to the skies, that America needs to be looking if it hopes to thwart the most devastating terrorist attacks, many in the maritime industry say. An airplane is fine if you want to take down the twin towers, says Dennis Bryant, a former Coast Guard lawyer who is now senior counsel with Holland and Knight, a major maritime law firm. But if you want to bring a nuclear device into this country, you re going to have a hard time doing it by plane. As every schoolchild in Halifax, Nova Scotia, learns, it doesn t take a nuclear device to create a maritime disaster of World Trade Center proportions. On December 6, 1917, two ships, one of them carrying 2,500 tons of volatile chemicals bound for the Allied war effort in Europe, collided in Halifax harbor. The blast leveled 1,630 homes and killed nearly 2,000 of the city s 50,000 residents. Modern explosives in a major port city could do far worse. To counter the terrorist threat, the Coast Guard says it is counting in part on new technologies, including a sophisticated vessel tracking system that uses the radio frequency the FCC sold. It is also putting much of the onus for port security on private industry and on local and regional port authorities. AWO s Congressional Barge-In -- Be There! ATTENTION AWO MEMBERS! AWO will hold its second annual Congressional "Barge-In" on Wednesday, April 21, in conjunction with the Spring Convention in Washington, D.C. To register, please contact Megan Tucker at (703) or mtucker@vesselalliance.com. Registration deadline is March 15. Being a small service, we can t do the job ourselves, says Capt. R.G. Sullivan, the Coast Guard s director of Homeland Security for the Port of New Orleans. We can be the coordinator, but we need to be partnering with owners and operators, with state and local law enforcement and other federal agencies. Just deciding where the maritime industry is most vulnerable has not been easy. To help figure it out, the Coast Guard hired a private defense contractor, Northrup Grumman Mission Systems to conduct assessments of security threats at 55 major ports at a cost of up to $1 million each. The assessments are classified, but the Congressional General Accounting Office has reviewed some of them and declared that it has concerns about the scope and quality. The Coast Guard says it shared some of the concerns but believes they have been addressed. Meanwhile, each of the 8,500 U.S.- flagged ships and 3,200 port installations that the Coast Guard considers most at risk were required to submit security plans to the Coast Guard by Dec. 31 or face fines of up to $25,000. (continued on page 5) 4 February 20, 2004

5 IN THE NEWS Defending America By Sea (continued from page 4) Nevertheless, the Coast Guard says, as many as 700 of those ships and 300 of those port installations missed the deadline completely. The Coast Guard has not yet reviewed the plans that have been filed to determine whether they are adequate. The Coast Guard announced Wednesday that it has begun issuing $10,000 fines to those who filed no plan at all. Port installations and ships that filed inadequate plans, the Coast Guard says, will be given a new deadline for correcting them. Coast Guard spokeswoman Jolie Shifflet declined to name vessels and installations that missed the deadline, citing security concerns. The next deadline is July 1, when the installations and ships must implement their security plans. It s unheard of, says Bryant, the former Coast Guard lawyer. The industry has had other regulatory regimes come into place but these changes are happening virtually overnight. Meanwhile, some maritime experts question the gaps in the Coast Guard s approach. For one thing, boats under 65 feet, as well as most fishing and recreational craft, are exempt from carrying transponders that would allow them to be tracked electronically if the dispute over the radio frequency is resolved. You re basically exempting the same sized ships that blew up the Cole, says Channing F. Hayden Jr., president of the Steamship Association of Louisiana, referring to the Oct. 12, 2000 suicide attack in Yemen that killed 17 sailors aboard the Navy destroyer. The Coast Guard plan also exempts foreign-flagged oceangoing vessels from meeting the requirement of the Maritime Transportation Security Act of Although such vessels make up more than half the oceangoing ships entering U.S. ports, the Coast Guard says they are not covered by the law. Instead, the Coast Guard says, foreignflagged vessels are required to meet international security standards, which are supposed to be enforced in part by the countries whose flags they fly. Many in Congress say the Coast Guard s interpretation of the law is wrong - that it was intended to apply to all vessels entering U.S. waters. A resolution to clarify Congress s intent is expected to come up for a vote this year. Regardless of whether foreign vessels ultimately come under U.S. standards, most are already required, by international standards, to carry transponders. However, the Coast Guard is a still a long way from being able to read their signals. The necessary equipment has been installed in only five of the country s 361 ports, Bryant says. Maritime experts regard the system as an excellent navigational and safety tool, but some question its effectiveness as an anti-terrorism device. The way it s set up, Bryant said, it s the master on each ship that inputs the ship s data - its name, speed, heading, cargo and country of origin. And if you re a terrorist you re just not likely to say you have a small nuclear device on board. The Coast Guard, says Bryant, believes there are ways to tell when someone on board a ship tries to dummy things up a BREAKING NEWS AIS Shared Use Proposal Submitted The Federal Communications Commission (FCC) issued a Public Notice stating that MariTEL, Inc. submitted a proposal for shared use of VHF maritime channels 87B ( MHz) and 88B ( MHz) by MariTEL, the U.S. Coast Guard, and ship station licensees for automatic identification system (AIS) purposes. MariTEL purchased these and related radio spectrums in a FCC auction some years ago. Such shared use, under this proposal, would be limited to AIS purposes and would be designed to not interfere with other use of the spectrum. Comments on the proposal should be submitted by February 27, bit but that it s still disconcerting that the person on board, who could well be your terrorist, inputs a good percent of the data. Meanwhile, for the identification system to work at all, the Coast Guard still has to obtain the right to use a channel on the radio frequency that was sold to MariTEL in The Coast Guard says it objected when the sale was proposed, saying two channels on the frequency were important to navigation. The FCC says it went ahead with the sale with the understanding that the Coast Guard and MariTEL would work out an arrangement -- which they have failed to do. In a pre- Sept. 11 world, the FCC says, the frequency s importance to homeland security was not apparent. Smith, the MariTEL president, says the company can t simply give the frequency back. It has nothing to do with patriotism, he says. We ve got over a thousand investors who put more than $85 million into this company, and he has a responsibility to protect their interests. The FCC says hearings on the matter are being scheduled. Possible resolutions include anything from a negotiated settlement to the government to a voiding of the original sale. February 20,

6 IN THE NEWS SAVE THE DATE! AWO Spring Convention Events Scheduled for April AWO s 2004 Spring Convention is scheduled for April in Washington, D.C. All meetings will be held at The Fairmont Washington Hotel, located at 2401 M Street, NW. Have you made your flight and hotel reservations yet? Events surrounding the Convention will begin on April 20 at 2:00 p.m. with a clean-up effort of the Potomac River (see story at right), and will conclude on April 23 with AWO s Annual Membership and Board of Directors meetings, which run until 11:30 a.m. The Spring convention will kick off a yearlong celebration of AWO s 60th Anniversary, and promises to be the don t miss industry event of the year. More information, including specific meeting details and plans for the special anniversary celebration is forthcoming. If you have any questions or need additional information before that time, please contact Marilyn Clark at (703) or via at m.clark@earthlink.net. Capital River Relief: Team Up to Clean Up AWO will participate in an effort to clean-up and restore the Potomac and Anacostia rivers in Washington, DC on the afternoon of April 20, led by Chad Pegracke and his organization, Living Lands & Waters. The project, now officially named Capital River Relief: Team Up to Clean Up, is being underwritten by the Koch Foundation, and will begin on April 1 and conclude on April 24, Earth Day. AWO members McDonough Marine Service and Moran Towing Corporation will be official sponsors of the Clean-up by donating the barges and towboats needed for the project. AWO Vice President - Public Affairs Anne Burns has been named to the Advisory Committee for the project. AWO members are invited to participate in the Clean-Up from 2:00 p.m. until 5:00 p.m. on Tuesday, April 20. AWO will provide transportation from The Fairmont Washington Hotel to the Clean-Up site. Please contact Marilyn Clark at m.clark@earthlink.net to let her know if you plan to participate. Chad Pegracke is the founder of Living Lands & Waters ( a non profit organization formed in 1997 and dedicated to cleaning and restoring national waterways. Over the past seven years, the project has spread through nine states and 54 communities. With the help of his crew and thousands of volunteers, Chad has removed over 800 tons of trash from the waters of the Mississippi, Illinois and Ohio rivers. Please plan to be a part of this very worthwhile effort. For more information, please contact Anne Burns at aburns@vesselalliance.com. Welcome, New Members! GLENMAR, INC West 191st Street Spring Hill, KS Rep: Mr. Charles R. Glenn President MGI Trading, Inc. P.O. Box The Woodlands, TX Rep: Mr. R. G. Holland President T & C Towing, Inc. 174 Old McDonald Road Elizabeth City, NC Rep: Mr. Tommy S. Wooten Owner and President Marine Rental Inc Market Street Channelview, TX Rep: Mr. Robert Fontenot Operations Manager Material Service Corporation P.O. Box 158 Lockport, IL Rep: Mr. Randall J. Mucha Director of Safety & Insurance Merichem Chemicals & Refinery Services LLC 5455 Old Spanish Trail Houston, TX Rep: Mr. Rodger Reynolds Supervisor Logistics 6 February 20, 2004

7 RESPONSIBLE CARRIER NEWS Thirty-One RCP Auditors to Recertify More than 30 Responsible Carrier Program (RCP) auditors are planning to attend re-/certification training on March 2-4 in Arlington, VA. In addition to six prospective auditors, 31 auditors have indicated they will recertify their validation to conduct third-party audits of AWO members RCPs. The first class of AWO-certified RCP auditors was initially certified in Like RCP compliance certification, auditor certification is valid for three years, making this the third goaround for the majority, who are the most experienced RCP auditors. The goal of the training program is the continuous honing of auditor skills and understanding of the RCP. In addition to a review of changes to the RCP that have occurred in the last three years, the session will stress trust and credibility, and sharing expertise and knowledge, both with other auditors and AWO members. RCP Accreditation Board members, along with AWO staff, will conduct the training. RCP auditors will be evaluated via group exercises and will submit individual written assignments to complete the rigorous training. The Accreditation Board is committed to upgrading auditor skills in its efforts toward the continuous improvement of the Responsible Carrier Program and Responsible Carrier Program audit. AWO is pleased with the continued commitment that these auditors have shown to provide members with a value-added audit that is improving safety throughout the industry. Please contact Kathy Rehak at (703) or krehak@vesselalliance.com for further information. Safety Pages Interregion Safety Committee to Meet, Work on 2004 Safety Priorities The Spring meeting of the AWO Interregion Safety Committee will be held on March at the Sheraton Downtown Hotel, 623 Union Street, Nashville, TN. The meeting will begin at 1:00 p.m. on Wednesday, March 24. A reception will be held at the conclusion of the afternoon session. The meeting resumes at 8:00 a.m. on Thursday, March 25 and will conclude by 12:00 p.m. Reservations can be made by calling (800) The committee s subcommittees will meet on the morning of Wednesday, March 24 on the following schedule: Lesson Plan Subcommittee - 9:30 a.m. Fall Overboard Prevention Subcommittee - 10:00 a.m. Crew Alertness Subcommittee - 11:00 a.m. Committee members are invited to bring a mate (or captain or deckhand) or anyone else who might benefit from seeing the work of a broad base of industry safety professionals and helping to learn new ways crewmembers can help in upgrading the safety culture of the inland barge and towing industry. The committee s 2004 safety priorities are: Crew Alertness Fall Overboard Prevention Communication and Improved Crew Safety Performance Bridge Transit Safety Statistics To RSVP for the meeting or for further information, please contact Kathy Rehak, Manager - Safety Programs, at (703) or krehak@vesselalliance.com. AWO Safety Calendars Still Available AWO is still taking orders for its 2004 AWO Safety Calendar, which focuses on Bridge Transit Safety. Order forms for the Safety Calendar can be accessed on the AWO Web site by clicking on Commitment to Safety, Safety Tools/Documents Library, and then 2004 Safety Calendar order form. If you have any questions, please contact Traci Fischer at (703) or via at tfischer@vesselalliance.com. February 20,

8 REGIONAL REPORTS Pacific Region Pacific Region Holds Annual Meeting in Seattle AWO members held the 2004 Annual Meeting in Seattle on February 5. The productive morning meeting had a turnout of about 30 members. Pacific Region Chairman George Clark, Harley Marine Services, chaired the meeting and set the tone by pointing out the importance of the meeting s focus on the industry s future safety regime as well as the appropriate framework for the Pacific Region activities and work. Tom Allegretti, AWO President, reported on AWO national priorities and the status of various other national issues that AWO is currently addressing on behalf of members. In addition, Ned Moran, AWO Vice Chairman of the AWO Board of Directors from Moran Towing Corporation, and Boyd Hollingsworth, AWO Vice President - Legislative Affairs, led a discussion of the industry s future safety regime, including actions taken by the AWO Board of Directors and the timetable being followed to move ahead with legislation to establish the new regime. Some members attending requested clarification on various points but the Pacific Region membership firmly supports the intent and focus of this important effort. The meeting also addressed current Pacific Region issues, including activities in the Washington legislature to deal with fallout from the recent Point Wells tank barge oil spill on December 30. Finally, Steve Scalzo, Immediate Past Chairman of the AWO Board, Foss Maritime Company, then led a discussion assessing member viewpoint on the appropriate framework for conducting AWO activities and work in the Pacific Region. Numerous members strongly expressed the view that work of the Pacific Region office has been an important value for their companies and AWO in the face of aggressive state activities on the West Coast. There was firm consensus among members to maintain the status quo as it relates to the Pacific Region activities and programs. Bill Gobel, Zidell Marine, nominated as Pacific Region Directors for : George Clark, Harley Marine Services; Cholly Mercer, Pecos, Inc; Charlie Nalen, Crowley Maritime Corporation; and Steve Scalzo, Foss Maritime. All those attending voted in favor of these nominations. Atlantic Region Atlantic Region Meets in Washington, D.C. AWO Atlantic Region members met on February 10 at The Fairmont Washington Hotel for the annual meeting. Chairman Donald Ivins, Express Marine, Inc. welcomed the members and complimented AWO on its agility to respond to legal and regulatory challenges and do so with a level of professionalism that is truly a credit to the association. The Atlantic Region members nominated and elected John Dragone, Maritrans Operating Company L.P., as Chairman and Chris Roehrig, Roehrig Maritime, LLC, as Vice Chairman. The members also re-elected Linn Peterson, Coastal Tug & Barge, Inc. and elected Jeff Parker, Allied Transportation Company, and Steve Furlough, C&P Tug and Barge Company, to serve as Directors. Phil Chase, Reinauer Transportation Company, was elected to serve as Alternate Director until Mr. Craig Philip, Ingram Barge Company, described the extraordinary work with AWO and the Coast Guard on the final legislative language related to the industry s future safety regime. Tom Allegretti, AWO President & CEO, provided the Washington Report and focused on the national priorities and the legislative and regulatory challenges in Boyd Hollingsworth, AWO Vice President - Legislative Affairs, provided a synopsis of the PAC contributions over the past three years. Linda O Leary, AWO Vice President - Atlantic Region, provided a overview of the state legislative activities related to ballast water, pilotage and port safety programs. Mr. Bruce Law, Allied Transportation Company, described the Environmental Protection Agency s (EPAs) final designation of the Hudson River as a no vessel discharge area. Mr. Morton Bouchard III, Bouchard Transportation Company, next described New York State tax law that imposes a tax for the consumption of diesel fuel by vessels transiting state (continued on page 9) 8 February 20, 2004

9 REGIONAL REPORTS Midcontinent Office 2004 Inland Industry Days Announced AWO Member Events Scheduled The U.S. Coast Guard and U.S. Army Corps of Engineers announced that the annual Inland Industry Days will be held in New Orleans, Louisiana on March 16-18, The conference will be held at the Hyatt Regency New Orleans, Poydras Plaza at Loyola Avenue. Topics will include homeland security, lock maintenance, safety, and licensing. In conjunction with this event, U.S. Coast Guard VADM James Hull, Commander of the Atlantic Region, and RADM Robert Duncan, Commander of the Eighth District, will be the guests of honor at an AWO March 17 breakfast. The meeting will be followed with an Operations and Maintenance presentation by the U.S. Army Corps of Engineers. To register for the Admirals Breakfast, please complete the attached registration form and fax it to Marilyn Clark at (985) For more information, contact Lynn Muench at (314) or via at Chicago Marine Industry Days Announced Chicago Marine Industry Days will be held on Wednesday, March 24 in Hammond, Indiana. This all day seminar, sponsored by the U.S. Coast Guard - MSO- Chicago, will include vessel security updates, presentations by the U.S. Army Corps of Engineers on near-term Chicago area projects, water management in the Chicago area by the Water Reclamation District, safety discussions on confined space issues, and an update on new licensing and documentation requirements. For more information, contact Lynn Muench at (314) or via at awo-midcontinent@msn.com. Atlantic Region Meets in Washington, D.C. (continued from page 8) waterways. Mr. Bouchard sought support for a lobbying effort -- Tax Equity & Amnesty (TEA). AWO Atlantic Region members supported the suggestion and formed a Steering Committee to help lead the effort. Mr. Ned Moran, Moran Towing Company, proceeded with a description of the traditional role of the regional offices and led a discussion on the future role of those offices. Mr. Robert Hughes, Hughes Brothers, Inc., outlined the historical relationship between New York companies, the Towboat & Harbor Carriers Association and AWO and concluded that it endured because members valued the services provided by a regional staff. Mr. Hughes offered a resolution that stipulated the Atlantic Region maintain an office in New York City and that the task force designated to evaluate the role of the regional offices incorporate the input of the AWO Regional Vice Presidents. The resolution passed. Chairman Don Ivins concluded the meeting by thanking the members for their support and adjourning at noon for a fundraiser luncheon with Congressman Frank LoBiondo AWO Letter Sponsorships Still Available AWO is now accepting sponsorship applications for the 2004 AWO Letter. Each great advertising opportunity costs $500, which includes a front-page sponsorship block featuring your company s name, location, logo, and Web site address. The ad is also placed on the AWO Web site, Each issue is archived and kept on the site for at least two years. To secure a sponsorship, please contact Traci Fischer at (703) or via at tfischer@vesselalliance.com to obtain a sponsorship form. February 20,

10 REGIONAL REPORTS Midcontinent Office Congressman Skelton Urges President to Examine Administration s Missouri River Plans Congressman Ike Skelton (D- MO) has been a leader in the continuing bi-partisan effort by the Missouri delegation asking the Administration to find a common-sense solution to the Missouri River issue. Congressman Skelton points out in a letter dated January 27 that the recently released Biological Assessment is undoubtedly harmful to Missouri and that barge companies are already folding-up shop due to unreliability of channel depths on the river. The President The White House Washington, D.C Dear Mr. President, January 27, 2004 The Missouri River and the proper management thereof remains an important issue for the citizens of Missouri and for the overall economic well-being of the Show-Me State. I encourage you to give immediate attention to the negative consequences that are developing as a result of the Administration s plans for managing the river. The Missouri River flows through the northern reaches of the Fourth Congressional District, whose residents I have the privilege of representing in the U.S. House of Representatives. Having been born in the river town of Lexington in Lafayette County, the Missouri River has played an important role in my life. Generations of men and women who have lived along the river share my respect for the Missouri River s contributions to our history, our heritage, and our economy. Citizens in Missouri continue to be concerned about the impact of proposed water flow changes on farming, barge navigation, other agribusiness, and power generation, in addition to the impact on wildlife habitat. Over the past several years, the Missouri River basin has experienced extremely dry weather and water levels have not been as high as we would like to maintain normal water flow. Combining the current dry spell with the low summer flows that have been advocated by the Administration is a recipe for disaster. In fact, barge companies are already folding-up shop because river reliability has been completely voided. This turn of events is undoubtedly harmful to Missouri. Without barges to move fertilizer and commodities up and down the river, transportation costs for Missouri s farmers will dramatically rise during this growing season. Additionally, low water levels and high summer water temperatures will hinder electricity generation at power plants located along the river and will interrupt commerce on the Mississippi River. These low flows also threaten to end a way of life that has been a part of Missouri s heritage. None of these outcomes can be taken lightly, and I ask you to immediately examine the Administration s plans for Missouri River management. Anything short of a common-sense solution that keeps summer flows at a level adequate to maintain barge traffic, to run our electric companies, and to preserve economic benefits to Missouri s farmers is not an option you should consider implementing. I look forward to hearing from you in the near future explaining how the Administration plans to rectify this situation on behalf of Missourians. Sincerely, Very truly yours, IKE SKELTON Member of Congress 10 February 20, 2004