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U.S. Report • Legal the Quincy default will be mitigated by any amounts recovered from the sale of assets at the shipyard.

In addition, since FY 1995 a total of $ 1.076 billion in

MarAd Title XI funds has been returned to the Trea- sury under the liquidation and periodic re-estimation procedures of the FCRA. Under the FCRA, all bal- ances in the financing account from accumulated fees and interest have to be transferred to the General Fund of the U.S. Treasury. In addition, vessel loan guaran- tees periodically are "re-estimated" to determine whether they are more or less risky. If less risky (pre- sumably a vessel loan becomes increasingly less risky as it is being paid off over time), a proportional amount of the subsidy appropriation originally set aside to cover a potential default is also returned to the U.S.

Treasury for general use.

Prospects for Increased Funding

Can Title XI funding be restored to the levels of the mid-1990s? While uncertain, there are signs that a siz- able number of Members of Congress are recognizing the value of making up for the funding lost in recent years. Important steps have been taken to lay the groundwork for the actual appropriations. Earlier this year, 24 Senators and more than 50 Congressmen sent letters in support of $50 million for the Title XI Pro- gram to the Senate and House Appropriations Com- mittees, respectively. Since then, the House of Repre- sentatives voted for legislation recommending autho- rization for a $50 million program, and the Senate committee responsible for maritime issues also voted in favor of $50 million for Title XI. However, the actual appropriations for Title XI are provided separately every year in the

Commerce-Justice-State ("CJS") appro- priations bill, and an appropriation for the full $50 million could be difficult under current budget constraints. The

House, for example, passed an FY 2001

CJS appropriations bill in late June that provides only $10,621 million for Title

XI subsidy costs.

Although the Senate has not yet (as of this writing) acted on its version of the

CJS appropriations bill, the Senate cus- tomarily has taken a more favorable view of the Title XI program than the House.

However, the overall budget allocation for the Senate CJS appropriations bill is severely limited and funding for all pro- grams within the bill, including for Title

XI, may be held to levels that Senators would not normally desire. For this rea- son, in addition to regular appropria- tions, alternative sources of funding may have to be considered. They range from an allocation to the Title XI program from the ever-burgeoning budget sur- plus, to transfers from Department of

Defense appropriations, as was the case in FY94 and FY95. Surely the amounts transferred to the U.S. Treasury over the years should count for something as the current budget is debated. The hope is that Congress will continue the ship- building initiative that began in the early 1990s and be creative in finding the resources to main- tain a strong, vibrant, and fully funded Title XI pro- gram.

The preceding was authored by

Duncan C. Smith III and James S. W. Drewry, Dyer

Ellis & Joseph.

Offshore Companies Take

Legal Action

Chevron, Conoco and Murphy Exploration & Production filed a lawsuit against the U.S. government for denying the companies' "time- ly and fair review" of plans, permits and an appeal concerning a lively natural gas field in the eastern Gulf of Mexico.

The company trio is partners in a proposed natural gas development project focused on federal offshore leases in the Destin Dome 56

Field, 25 miles south of Pensacola, Fla. The

U.S. Department of Energy cites that the field is comprised of potential reserves at up to 2.6 trillion cu. ft. of natural gas. The complaint, which was filed in the U.S. Court of Federal

Claims, alleges that the U.S. government delayed and ultimately blocked the partners from developing the field. Currently, the pro- ject is pending a decision by the Department of

Commerce, who will not render a settlment on

Circle 316 on Reader Service Card the project until the EPA has completed environmental permits. The partners are seeking compensation for lease bonuses and rentals paid to the federal govern- ment; exploration costs; and expenses incurred for the preparation of environmental studies.

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Circle 231 on Reader Service Card

August, 2000 33