[Senate Report 106-124]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 235
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-124

======================================================================



 
                       ``EXXON VALDEZ'' OIL SPILL

                                _______
                                

                 July 28, 1999.--Ordered to be printed

                                _______


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 711]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 711) to allow for the investment of joint 
Federal and State funds from the civil settlement of damages 
from the Exxon Valdez oil spill, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1.

    (a) Notwithstanding any other provision of law and subject to the 
provisions of subsections (e) and (g), upon the joint motion of the 
United States and the State of Alaska and the issuance of an 
appropriate order by the United States District Court for the District 
of Alaska, the joint trust funds, or any portion thereof, including any 
interest accrued thereon, previously received or to be received by the 
United States and the State of Alaska pursuant to the Agreement and 
Consent Decree issued in United States v. Exxon Corporation, et al. 
(No. A91-082 CIV) and State of Alaska v. Exxon Corporation, et al. (No. 
A91-083 CIV) (hereafter referred to as the ``Consent Decree''), may be 
deposited in --
          (1) the Natural Resource Damage Assessment and Restoration 
        Fund (hereafter referred to as the ``Fund'' established in 
        title I of the Department of the Interior and Related Agencies 
        Appropriations Act, 1992 (Pub. L. 102-154, 43 U.S.C. 1474b);
          (2) accounts outside the United States Treasury (hereafter 
        referred to as ``outside accounts''); or
          (3) both.
Any funds deposited in an outside account may be invested only in 
income-producing obligations and other instruments or securities that 
have been determined unanimously by the Federal and State natural 
resource trustees for the Exxon Valdez oil spill (`'trustees'') to have 
a high degree of reliability and security.
    (b) Joint trust funds deposited in the Fund or an outside account 
that have been approved unanimously by the Trustees for expenditure by 
or through a State or Federal agency shall be transferred promptly from 
the Fund or the outside account to the State of Alaska or United States 
upon the joint request of the governments.
    (c) The transfer of joint trust funds outside the Court Registry 
shall not affect the supervisory jurisdiction of the District Court 
under the Consent Decree or the Memorandum of Agreement and Consent 
Decree in United States v. State of Alaska (No. A91-081-CIV) over all 
expenditures of the joint trust funds.
    (d) Nothing herein shall affect the requirements of section 207 of 
the Dire Emergency Supplemental Appropriations and Transfers for Relief 
From the Effects of Natural Disasters, for Other Urgent Needs, and for 
the Incremental Cost of ``Operation Desert Shield/Desert Storm'' Act of 
1992 (Pub. L. 102-229, 42 U.S.C. 1474b note) that amounts received by 
the United States and designated by the trustees for the expenditure by 
or through a Federal agency must be deposited into the Fund.
    (e) All remaining settlement funds are eligible for the investment 
authority granted under subsection (a) of this act so long as they are 
managed and allocated consistent with the Resolution of the Trustees 
adopted March 1, 1999 concerning the Restoration Reserve, as follows;
          (1) $55 million of the funds remaining on October 1, 2002 and 
        the associated earnings thereafter shall be managed and 
        allocated for habitat protection programs including small 
        parcel habitat acquisitions. Such sums shall be reduced by:
                  (A) the amount of any payments made after the date of 
                enactment of this Act from the Joint Trust Funds 
                pursuant to an agreement between the Trustee Council 
                and Koniag, Inc. which includes those lands which are 
                presently subject to the Koniag Non-Development 
                Easement, including, but not limited to, the 
                continuation or modification of such Easement, and;
                  (B) payments in excess of $6.32 million for any 
                habitat acquisition or protection from the joint trust 
                funds after the date of enactment of this Act and prior 
                to October 1, 2002, other than payments for which the 
                Council is currently obligated through purchase 
                agreements with the Kodiak Island Borough, Afognak 
                Joint Venture and the Eyak Corporation.
          (2) All other funds remaining on October 1, 2002, and the 
        associated earnings shall be used to fund a program, consisting 
        of--
                  (A) marine research, including applied fisheries 
                research;
                  (B) monitoring and;
                  (C) restoration, other than habitat acquisition, 
                which may include community and economic restoration 
                projects and facilities, (including projects proposed 
                by the communities of the EVOS Region or the fishing 
                industry) consistent with the Consent Decree.
    (f) The federal trustees and the state trustees, to the extent 
authorized by State law, are authorized to issue grants as needed to 
implement this program.
    (g) The authority provided in this Act shall expire on September 
30, 2002, unless by September 30, 2001, the Trustees have submitted to 
the Congress a report recommending a structure the Trustees believe 
would be most effective and appropriate for the administration and 
expenditure of remaining funds and interest received. Upon the 
expiration of the authorities granted in this Act all monies in the 
Fund or outside accounts shall be returned to the Court Registry or 
other account permitted by law.

                         purpose of the measure

    S. 711 provides for a higher rate of interest to be earned 
on the settlement funds resulting from the Exxon Valdez oil 
spill by granting authority for the funds to be invested in 
accounts other than the Court Registry Investment System 
(CRIS).

                          background and need

    The March 24, 1989, Exxon Valdez oil spill in Alaska's 
Prince William Sound was the largest oil spill in U.S. history, 
affecting nearly 1,500 miles of Alaska's coastline. Under a 
civil settlement agreement approved in the U.S. District Court 
for the District of Alaska in October 1991, Exxon agreed to pay 
civil claims totaling $900 million to the Federal Government 
and the State of Alaska by September 1, 2001. Under a criminal 
settlement reached at the same time, Exxon agreed to pay a $25 
million fine and to pay the Federal Government and the State of 
Alaska each $50 million as remedial and compensatory payments 
to be used exclusively for restoring natural resources damaged 
by the spill or for research on the prevention or amelioration 
of future oil spills.
    Administration of the civil settlement is carried out under 
a memorandum of agreement (MOA) between the Federal Government 
and State of Alaska. The MOA established a six-member Federal/
State trusteeship, which later became the Trustee Council, to 
review and approve expenditures of civil settlement funds for 
restoration projects. The three Federal trustees are the 
Secretary of the Interior, the Secretary of Agriculture, and 
the Administrator of the National Oceanic and Atmospheric 
Administration, Department of Commerce, or their 
representatives. The three State trustees are the Commissioner 
of the State Department of Fish and Game, the Commissioner of 
the State Department of Environmental Conservation, and the 
Attorney General of the State of Alaska or their 
representative. A staff headed by an executive director 
conducts day-to-day activities.
    Under the agreement, Exxon's civil settlement payments flow 
to three areas. The first two are to reimburse Federal and 
State agencies for past spill related work and credit to Exxon 
for the reimbursement of agreed-upon cleanup performed 
following the spill. The remainder of Exxon's payments are 
deposited into a joint State/Federal trust fund under the 
jurisdiction of the U.S. district court system. This trust fund 
is currently an interest-bearing account within the CRIS, a 
system used for U.S. district court settlements. To release any 
of these funds, the Federal and State trustees must petition 
the court to make the funds available for the purposes and 
activities specified in the settlement agreement and the MOA. 
Federal agencies in Alaska and Alaska State agencies 
responsible for the management of the land and species within 
the spill area take the lead in carrying out restoration 
activities. For restoration activities that are to be carried 
out by Federal agencies, funds are transferred to an interest-
bearing account of the Department of the Interior, where they 
are transferred to specific agency accounts as needed. For 
restoration activities to be carried out by the State, funds 
are deposited in a State trust fund from which they are drawn 
directly by State agencies following an appropriation from the 
legislature.
    By the time all of the settlement money has been paid by 
Exxon and excluding reimbursements to the governments and to 
Exxon for additional cleanup, the Trustee Council estimates 
that approximately 60% of the funds will have been spent on 
habitat acquisition while approximately 40% will be spent on 
research and monitoring. This imbalance has been a concern to 
the Alaska Congressional delegation in particular. In November 
of 1997, Senator Murkowski introduced S. 1523, which would have 
given the Exxon Valdez Oil Spill Trustees (``Trustees'') the 
ability to invest outside of the CRIS account but would have 
restricted all of the new interest from being used for habitat 
acquisition. Similar language was added to the 1998 
appropriations bill for the Departments of Commerce, Justice, 
State, the Judiciary, and related agencies for the fiscal year 
ending September 30, 1999. The language was eventually dropped 
in conference.
    In August of 1998, at the request of the Chairman of the 
Senate Committee on Energy and Natural Resources, the General 
Accounting Office did an audit of the Trust accounts and 
expenditures. The audit made several findings. First, the GAO 
auditors agreed with other auditors who found that the fees 
charged by CRIS on the liquidity and reserve accounts are 
excessive and greatly exceed the costs incurred in 
administering the funds. Second, they found that the Trustees 
could earn a higher rate of interest income if the settlement 
funds were invested outside of CRIS. Third, they found that the 
percentage of money spent on habitat acquisition was more than 
two and one half times the percentage spent on research. It was 
these factors that led Senator Murkowski to continue to push 
the Trustees to dedicate the majority of the remaining funds to 
be used for a scientific understanding of Prince William Sound, 
and not for more habitat acquisition. That principle is 
embodied in S. 711.

                          Legislative History

    S. 711 was introduced by Senator Murkowski, on behalf of 
himself and Senator Stevens, on March 24, 1999. A hearing was 
held before the Committee on Energy and Natural Resources on 
May 14, 1999. At the business meeting on June 30, 1999, the 
Committee on Energy and Natural Resources ordered S. 711, as 
amended, favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on June 30, 1999, by a unanimous voice vote of 
a quorum present, recommends that the Senate pass S. 711, if 
amended as described herein.

                          committee amendments

    During the consideration of S. 711, the Committee adopted 
an amendment in the nature of a substitute offered by Senator 
Murkowski. The amendment makes technical, clarifying and 
conforming changes. In addition, the amendment modifies 
subsection (e) to direct the management and allocation of the 
remaining settlement funds. The amendment is describe in 
further detail in the section-by-section analysis.

                      section-by-section analysis

    Section 1: Subsection (a) grants the Trustees the ability 
to invest joint trust funds outside of the Court Registry 
Investment System into income producing obligations in (1) the 
Natural Resource Damage Assessment and Restoration Fund (``the 
Fund'') and/or accounts outside the U.S. Treasury system 
pursuant to the limitations described in subsections (e) and 
(g) of the legislation.
    Subsection (b) requires that joint trust funds deposited in 
the Fund or an outside account shall be transferred promptly to 
the State of Alaska or the United States Government upon the 
joint request of the governments.
    Subsection (c) states that the transfer of any joint trust 
funds outside the court registry shall not affect the 
supervisory jurisdiction of the District Court under the 
Consent Decree or the Memorandum of Agreement and Consent 
Decree in United States v. State of Alaska (No. A91-081-CIV).
    Subsection (d) states that nothing in the legislation 
affects the requirement of section 207 of the Dire Emergency 
Supplemental Appropriations and Transfers for Relief From the 
Effects of Natural Disasters, for Other Urgent Needs, and for 
the Incremental Cost of ``Operation Desert Shield/Desert 
Storm'' Act of 1992 (Pub. L. 102-229, 42 U.S.C. 1474b note) 
that amounts received by the United States and designated by 
the Trustees for the expenditure by or through a Federal agency 
must be deposited into the Fund.
    Subsection (e) states that all remaining settlement funds 
are eligible for the investment authority granted under 
subsection (a) of this Act so long as they are managed and 
allocated consistent with the Resolution of the Trustees 
adopted March 1, 1999 concerning the Restoration Reserve and 
specifically as detailed in the following paragraphs. Paragraph 
(1) provides that $55 million of the funds remaining on October 
1, 2002 and the associated earnings thereafter shall be managed 
and allocated for habitat protection programs including small 
parcel habitat acquisitions. Such sums shall be reduced by the 
amount of any payments made after the date of enactment of this 
Act from the joint trust funds pursuant to an agreement between 
the Trustee Council and Koniag, Inc., which includes those 
lands which are presently subject to the Koniag Non-Development 
Easement, including, but not limited to, the continuation or 
modification of such Easement, and any payments in excess of 
$6.32 million for any habitat acquisition or protection from 
the joint trust funds after the date of enactment of this Act 
and prior to October 1, 2002, other than payments for which the 
Council is currently obligated through purchase agreements with 
the Kodiak Island Borough, Afognak Joint Venture and the Eyak 
Corporation. This language will allow for the continuation of 
payments to be made on purchases the Trustees are already 
committed to as well as those potential purchases that the 
Council has made offers on as of June 30, 1999. Additionally, 
any funds needed for the administration of the Trust will also 
be deducted from these monies. With regard to the Koniag lands 
mentioned above, representatives of the Trustee Council and 
Koniag are negotiating the possible long-term extension of an 
existing easement covering key lands within the Kodiak NWR. 
Nothing in this legislation is intended to limit the authority 
of the Council or the Department of the Interior to enter into 
an agreement with Koniag, or to establish an account for the 
benefit of Koniag prior to October 1, 2002, and the principal 
or earnings thereon could be used to fund this easement or 
future acquisition of these lands. Consistent with the 
Council's March 1, 1999 resolution, any payments to Koniag 
from, or accrued interest in, such account would count toward 
the $55 million as habitat protection fund on October 1, 2002 
that is provided for under section 1(e) of this legislation. 
Paragraph (2) provides that all other funds remaining on 
October 1, 2002, estimated to be at least $115 million, and the 
associated earnings shall be used to fund a program, consisting 
of marine research, including applied fisheries research; 
monitoring; and restoration, other than habitat acquisition, 
which may include community and economic restoration projects 
and facilities, (including projects proposed by the communities 
of the Exxon Valdez Oil Spill region or the fishing industry) 
consistent with the Consent Decree. This language provides for 
a greater scientific understanding of the marine environment of 
Prince William Sound as well as offer opportunities for the 
EVOS communities to participate in development and economic 
enhancement projects.
    Subsection (f) authorizes the federal trustees and the 
state trustees, to the extent authorized by State law, to issue 
grants needed to implement the provisions of this Act.
    Subsection (g) states the authority provided in this Act 
shall expire on September 30, 2002, unless by September 30, 
2001, the Trustees have submitted to the Congress a report 
recommending a structure of remaining funds and interest 
received. This subsection further states that upon the 
expiration of the authorities granted in this Act all monies in 
the Fund or outside accounts shall be returned to the Court 
Registry or other account permitted by law.

                   cost and budgetary considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

S. 711--A bill to allow for the investment of joint federal and state 
        funds from the civil settlement of damages from the Exxon 
        Valdez oil spill

    CBO estimates that enacting S. 711 would have no net impact 
on the federal budget. The bill could increase both direct 
spending and offsetting receipts (a credit against direct 
spending); therefore, pay-as-you-go procedures would apply. We 
estimate, however, that any changes would offset each other--
mostly within the same year. S. 711 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would impose no costs on 
state, local, or tribal governments. The state of Alaska and 
local governments in the state could benefit should some of the 
additional interest earned as a result of this bill be 
allocated to state agencies.
    S. 711 would increase the amounts available to the federal 
government and the state of Alaska for the purposes of 
assessing damage to natural resources by the Exxon Valdez oil 
spill of 1989 and conducting restoration efforts. Specifically, 
the bill would allow the Exxon Valdez Oil Spill Trustee 
Council, with the approval of the U.S. District Court (Alaska), 
to choose where to deposit the amounts paid by the Exxon 
Corporation each year under the consent decree issued as a 
result of that spill. Under existing law, Exxon makes annual 
payments (currently $70 million) into the federal government's 
Court Registry Investment System (CRIS). The trustees allocate 
those sums to federal agencies, through the Natural Resources 
Damage Assessment and Restoration Fund (NRDA), and to the state 
of Alaska. S. 711 would allow the trustees to instead deposit 
the Exxon payments directly into the NRDA fund or some account 
outside the U.S. Treasury.
    Depositing payments from Exxon without going through the 
CRIS would enable the trustees to reduce the fund's management 
fees by up to $200,000 annually. Moreover, depositing all such 
amounts into an outside account (most likely Alaska's 
investment system) would have the additional benefit of 
increasing interest earnings by an average of about $3 million 
a year. Because there is no way to determine whether the 
federal government would receive any of the additional interest 
revenue earned by the joint trust funds, CBO cannot estimate 
the additional offsetting receipts and direct spending that 
might occur if S. 711 is enacted. If additional funds are 
allocated to the government as a result of the legislation, the 
additional receipts would be offset by an equal increase in 
direct spending--mostly in the same year that any new receipts 
occur.
    For purposes of this estimate, CBO assumes that interest 
rates paid by U.S. securities and by the Alaska investment 
systems will remain at or near current rates. (The Alaska 
system would pay the trust fund about twice what CRIS does.) 
This estimate is based on information provided by the U.S. Fish 
and Wildlife Service and the Exxon Valdez Oil Spill Trustee 
Council.
    The CBO staff contact is Deborah Reis. This estimate was 
approved by Robert A. Sunshine, Deputy Assistant Director for 
Budget Analysis.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 711. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 711, as ordered reported.

                        executive communications

    On June 30, 1999, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Department of Justice and the Office of 
Management and Budget setting forth Executive agency 
recommendations on S. 711. These reports had not been received 
at the time the report on S. 711 was filed. When the reports 
become available, the Chairman will request that they be 
printed in the Congressional Record for the advice of the 
Senate. On May 13, 1999, the Administration offered written 
testimony on S. 711. The testimony provided by the Department 
of Justice and the Trustee Council follows:

Statement of Lois J. Schiffer, Assistant Attorney General, Environment 
                    Division, Department of Justice

    Mr. Chairman and members of the committee, I am pleased to 
submit this written testimony on behalf of the United States 
Department of Justice concerning S. 711, a bill to allow for 
the investment of Joint Federal and State funds from the civil 
settlement of damages from the Exxon Valdez oil spill, and for 
other purposes.
    Following the Exxon Valdez oil spill (EVOS), in October 
1991 the United States and the State of Alaska entered into a 
civil Agreement and Consent Decree (Consent Decree) with Exxon 
Corporation, in which Exxon agreed to pay $900 million over ten 
years primarily for restoration of natural resources injured by 
the spill. In addition, the United States and Alaska entered 
into a Memorandum of Agreement (MOA) settling potential 
disputes between them relating to the spill. The Consent Decree 
and the MOA, which were both approved by the U.S. District 
Court as judgments in pending litigation, govern decisions on 
how the settlement funds are to be expended. Specifically, they 
provide that decisions on the use of restoration funds must be 
made by unanimous agreement of designated state and federal 
natural resource trustees (the Trustees).
    The Trustees responsible for the Exxon Valdez restoration 
fund include, for the United States, the Secretaries of the 
Interior and Agriculture and the Administrator of the National 
Oceanic and Atmospheric Administration and, for the State of 
Alaska, the Alaska Attorney General and the Commissioners of 
the Departments of Fish and Game and Environmental 
Conservation. The Trustees established a Trustee Council, 
composed of federal trustee representatives in Alaska and the 
State trustees, to administer the restoration fund.
    The Trustee Council develops plans for the use of the EVOS 
restoration fund through a public process. Public participation 
(including hearings, meetings and written comment periods) 
occurs at many phases of the restoration process, and a Public 
Advisory Group was formed to advise the Trustee Council on all 
matters relating to the planning, evaluation and allocation of 
funds and restoration activities. Considering input from the 
public, the Trustee Council makes expenditure determinations 
based on a variety of factors, including: the linkage between 
the resource to be restored and the spill; the cost-efficiency 
of the project; its technical feasibility; the scientific basis 
for it; and its predicted effectiveness. To date, funds have 
been spent on research and monitoring of the extent of recovery 
of injured resources, a variety of direct restoration projects, 
and acquisition of habitat to protect and assist in the 
recovery of injured species and other resources of value to the 
public.
    The Miscellaneous Receipts Act requires that all funds 
received by the United States be deposited in the federal 
Treasury, unless specific legal authority exists for a deposit 
into some other account. As the relevant statutes and rules 
have been interpreted, the only non-Treasury fund into which 
EVOS funds may be deposited is the registry of a federal court. 
Thus, without further Congressional authorization, the EVOS 
funds must stay in a court registry account or in a fund within 
the Treasury.
    Consistent with these requirements, funds received from 
Exxon are placed into the Court Registry Investment System 
(CRI), which was established to hold and manage relatively 
large funds under judicial supervision and is overseen by the 
Administrative Office of the U.S. Courts. All requests for 
withdrawals from that fund must be made jointly by the Alaska 
Department of Law, on behalf of state trustees, and the 
Department of Justice, on behalf of the federal trustees. 
Disbursements from the fund must be authorized by the District 
Court in Alaska and they are subject to review by the Court for 
consistency with the Clean Water Act, the Consent Decree and 
the MOA. To date, the Court has approved all such expenditures 
requested by the state and federal governments.
    The Trustees would like to have authorization to invest the 
EVOS restoration fund outside the Treasury or the Court 
registry, in order to obtain a lower management fee than is 
currently charged by the CRIS and a higher rate of return than 
is available in such federal accounts, which by regulation must 
be invested in U.S. Treasury securities. The provision of S. 
711 that would allow such alternative investments (section 
1(a)-(d) of the bill) offers a way to make more money available 
for restoration or replacement of injured natural resources, 
through increased earning of interest.
    If the bill were limited to this authorization, we would 
welcome it. However, subsection 1(e) of the proposed bill would 
restrict expenditure of any interest accrued under the 
provision's authority to:
          a peer reviewed grant program consisting of--
                  (1) marine research, including applied 
                research;
                  (2) monitoring; and
                  (3) restoration, other than habitat 
                acquisition, and additionally for community 
                economic restoration projects and facilities 
                (including projects proposed by communities of 
                the EVOS Region and of the fishing industry).
    This provision could be interpreted in a manner that is 
inconsistent with the Consent Decree and the MOA governing the 
Trustees' use of the restoration funds in this case. The MOA 
requires that these funds be used ``for the purposes of 
restoring, replacing, enhancing, rehabilitating, or acquiring 
the equivalent of the natural resources injured as a result of 
the Oil Spill and the reduced or lost services provided by such 
resources. * * *'' Plainly, expenditures for ``economic 
restoration projects and facilities'' unrelated to the 
restoration or protection of natural resources would be 
inconsistent with this mandate, and thus contrary to the court 
orders approving the Consent Decree and MOA and to the Clean 
Water Act, which provides the statutory authority for the EVOS 
settlement.
    The provision also would prohibit the use of the interest 
for habitat acquisition, which is an authorized use of the 
restoration funds under the Consent Decree and MOA and has 
received strong, consistent support both from the scientific 
community and from members of the Alaskan public who have 
submitted comments in the restoration planning process. Thus, 
the provision restricts the discretion of the Trustee Council 
to select the most effective means to restore or replace 
resources injured by the oil spill.
    The Department opposes legislation that would interfere 
with the Trustees' ability to spend the Exxon funds in a manner 
that is consistent with the Consent Decree, the MOA and the 
public process that has been established. Our concerns may be 
addressed, however, if subsection 1(e) were deleted or modified 
to ensure that all funds are used in a manner consistent with 
the applicable court decrees and the Trustees' decisions based 
on the public planning process. In any event, we would be 
pleased to work with you to develop legislation that we can all 
support.
    Thank you.

             ADDITIONAL VIEWS OF SENATOR FRANK H. MURKOWSKI

    In the years since 11.3 million gallons of crude oil 
bubbled into the sea, the Exxon Valdez Oil Spill (EVOS) 
Trustees Council has had nearly $800 million of the eventual 
$900 million that Exxon will pay at their disposal to fund 
scientific studies. Those studies should have determined the 
health of marine life, wildlife and the ecosystem of Prince 
William Sound. But according to the latest summary of 
scientific studies, while it is possible to say that some 
species have or are recovering, it is not possible to give a 
full accounting.
    According to a report from the council earlier this year 
very little is known about the health of cutthroat trout, Dolly 
Varden, rockfish or Kittlitz's murrelets. And there is only 
slightly more information on the health of killer whales, 
pigeon guillemots, cormorants, the common loon, harbor seals 
and harlequin ducks.
    While it is heartening that the Sound appears to be 
recovering sooner than many thought likely, and that herring 
and salmon stocks are recovering as are bald eagles and river 
otters, it is frustrating that more hard scientific data has 
not been gathered.
    That is why I felt it necessary to introduce this 
legislation providing for increased earnings of the remaining 
settlement funds and directing the expenditure of those funds.
    I, for one, believe the Council's priorities have been 
misplaced which has necessitated that legislation. They have 
been unwilling to admit that science does not yet provide many 
mitigation answers; instead, the spill trustees have decided to 
go on a land buying spree as an alternative.
    This is a mistake.
    In a state where 68 percent of all land is federally owned 
and where individuals own less than 1 percent of all property, 
the trustees have allotted $416 million of the initial $900 
million court settlement just for land acquisitions. They 
nearly have completed the purchase of 647,000 acres in and 
around Prince William Sound and just recently voted to set 
aside an additional $55 million to fund acquisitions, literally 
forever, even though most of the land being bought was not 
directly affected by the spill.
    Alaska Natives worked for decades to win the 1971 land 
settlement that gave them control of 44 million acres of 
Alaska. Now, in less than a quarter of a century Natives have 
lost much of the land they had fought to gain--a good part of 
the Native lands in the region have been reacquired through the 
actions of the trustees. It is ironic, indeed, that the United 
States purchased Alaska for $7.2 million in 1867 and that 60 
times more money already has been committed to buy back parts 
of it.
    Back in 1994 when $600 million of the settlement was still 
uncommitted, I urged the trustees to commit the bulk of the 
settlement to a ``permanent fund'' that would provide a 
perpetual source of significant funding for research or 
mitigation projects. I also urged the trustees to utilize the 
expertise of the University of Alaska in undertaking those 
studies. I warned that if too much funding was allocated to 
land acquisition, or spent on marginal science, less money 
would be available to fund sound studies to shed light on the 
mysteries affecting commercial and sport fisheries and marine 
life and wildlife in the Sound.
    In the intervening years we have seen General Accounting 
Office audits documenting that the trustees have paid on 
average 56 percent above government-appraised value for the 
lands it has acquired. We've seen a situation this year where 
the trustees paid nearly $80 million for lands on Kodiak 
Island, while the Department of the Interior set the value of 
those same lands at about one-third that amount when it came to 
funding revenue sharing payments to the Kodiak Island Borough.
    Long after the Sound has healed its wounds, those lands 
bought by the trustees will be lost forever to economic 
activity and to the Native heritage. Nowhere could this be 
clearer than the example of one Native corporation that agreed 
to sell its lands with the intent to invest in a perpetual 
trust to help children go to school and provide solutions to 
other problems. Instead it was pressured to make a one time 
payment to each shareholder.
    The longest-lasting legacy of the tragedy may be that some 
of the Alaska Natives find themselves like the Biblical Esau 
who sold his birthright to Jacob for a mess of pottage and 
bread. When the meal was gone so was his heritage. When that 
one-time payment has been spent, what will have been gained and 
what will pass on to their children?
    Today, another tragedy is clear, we still do not have the 
answers to the effects of the spill, even though we had the 
where-with-all to have obtained them.
    Immediately following the spill I sponsored a provision in 
the Oil Pollution Act of 1990, which was passed by Congress, to 
create Regional Citizens Advisory Councils, giving local 
residents the authority and the resources to improve all 
aspects of oil transport planning and cleanup. Patterned after 
a concept then in place at the Port of Sullom Voe in the North 
Sea's Shetland Islands, there is no question that the oversight 
and creativity that the councils engendered have done the most 
to make Alaska's oil transportation system the best in the 
world.
    Today, it is time for Congress to act again to ensure that 
we have the resources to obtain the best science available in 
understanding Prince William Sound. I believe this bill will 
allow us to do just that. I also believe that this bill will 
help the Trustee Council refocus their efforts away from land 
acquisition and toward a better scientific understanding of 
Prince William Sound and the human element that calls that area 
home.
    Speaking of the human element, I also hope this bill will 
lead to the Trustee Council placing a greater emphasis on 
economic development projects for the impacted communities as 
provided for in the legislation. It is for this reason that 
language specifically authorizes ``community and economic 
restoration projects and facilities (including projects 
proposed by the Communities of the EVOS region * * *)'' It is 
my intent that this provision include economic development 
projects such as the Cordova Center which is proposed by the 
people of the economic and emotional ground zero of the spill.
    I am pleased that the Committee has agreed to pass S. 711 
as I believe it will greatly assist in achieving a better 
understanding of Prince William Sound through sound science.

                                                Frank H. Murkowski.

                        changes in existing law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 711, as ordered 
reported.

                                  
