Saltonstall-Kennedy Fishery Funding

CRS Report for Congress
Saltonstall-Kennedy Fishery Funding
Eugene H. Buck
Specialist in Natural Resources Policy
Resources, Science, and Industry Division
Summary
The Saltonstall-Kennedy Act established a fund that, among other things, has
supported fishery research and development projects, with funding awarded annually on
a competitive basis. Recent congressional “earmarks” have preempted the competitive
process for awarding funding for industry projects. This report will be updated as this
issue evolves.
The Saltonstall-Kennedy (S-K) Act, as amended (15 U.S.C. §713c-3), established
a fund (known as the S-K Fund) that the Secretary of Commerce uses to finance projects
and cooperative agreements for fishery research and development. Under this authority,
projects or cooperative agreements are selected annually on a competitive basis to assist
NOAA Fisheries (previously known as the National Marine Fisheries Service) in
addressing concerns related to U.S. commercial and recreational fisheries. The S-K Fund
is capitalized through annual transfers under a permanent appropriation to the Secretary
of Commerce of 30% of the gross receipts collected by the Secretary of Agriculture under
the customs laws on imports of fish and fish products.¹
The objective of the S-K program is to address the needs of fishing communities in
providing economic benefits for rebuilding and maintaining sustainable fisheries, and in
dealing with the impacts of conservation and management measures.² The S-K program
has become very important in addressing issues of immediate concern to the commercial
fishing industry, by producing many new gear innovations, markets, and management
options. Issues addressed have included fish harvesting, seafood quality improvements,
domestic and foreign market development, efficiency and productivity improvements, and³

the costs/profitability of potential fishing industry investments.
¹ Because of progressive reductions and eliminations of tariffs on edible fisheries products, most
of these customs duties come from non-edible products, such as pearls, coral jewelry, etc.
² U.S. Dept. of Commerce, National Marine Fisheries Service, The Saltonstall-Kennedy Grant
Program: Fisheries Research and Development, Report 2003 (Aug. 1, 2003), p. 2.
³ U.S. General Accounting Office, Uses of Saltonstall/Kennedy Fisheries Development Funds,
(continued...)
Congressional Research Service ˜ The Library of Congress

Customs receipts have increased substantially during the life of this program, with
almost $80 million currently being transferred annually to the Secretary of Commerce.
Table 1 summarizes program funding. In 1980, Congress enacted formal program
authority to fund fishing industry development projects and expanded this authority in
1983, establishing a minimum percentage of S-K funds to be used to provide financial
assistance to projects. The balance of S-K funds were to be used by the Secretary of
Commerce for a national program of fisheries research and development to address
aspects of U.S. fisheries not adequately addressed by funded industry projects. Beginning
in FY1979, increasing amounts of S-K dollars have been transferred to the Department
of Commerce’s National Oceanic and Atmospheric Administration’s (NOAA’s)
Operations, Research, and Facilities (ORF) account, reducing the funds and percentage
of funds available for fishing industry projects and the national program. Since FY1982,
the S-K program has never allocated the minimum amount (50% after FY1980 and 60%
after FY1983) specified by law for industry projects. For example, in FY2002, slightly
more than $79.1 million in customs duty receipts were transferred to the Department of
Commerce from the Department of Agriculture. Of this amount, P.L. 107-77 transferred
$68 million to NOAA’s ORF account “for necessary expenses of activities authorized by⁴
law for the National Oceanic and Atmospheric Administration.” A total of slightly more
than $11.1 million (14.1% of the customs receipts transferred to the Department of
Commerce) remained for commercial fishing industry projects, the national program of
fisheries research and development, and S-K program administration.
In FY2004 appropriations (P.L. 108-199, 118 Stat. 73, §208 of “General Provisions
— Department of Commerce”), congressional earmarks designated funds for specific
activities outside the regular competitive award process, and the competitive program was⁵
cancelled for FY2004. A similar situation occurred in FY2003. Regardless of the merits
of the activities funded through the congressional earmarks, some elements of the
commercial fishing industry have expressed frustration when the competitive process is
circumvented and projects are funded outside a competitive selection process.⁶
Since the S-K program requires no periodic reauthorization, no recent congressional
oversight hearings have been held to review the department’s rationale for allocating S-K
funds between industry projects and agency base funding; how specific project areas to
be funded are selected; how this program is administered and at what cost; how the results
of funded projects are reviewed, disseminated, and used; and to what extent the program
continues to meet its statutory objectives. Additional questions include whether the S-K

³ (...continued)
GAO/RCED0-85-145 (Washington, DC: Aug. 30,1985), p. ii.
⁴ 115 Stat. 774-775.
⁵ In several earlier instances, congressional “soft” earmarks were specified in report language
associated with annual appropriations. Although such language is not legally binding, NOAA
followed the direction in making funds available noncompetitively for various specific projects.
Examples include the Interstate Shellfish Sanitation Conference for an education program on
naturally occurring Vibrio vulnificus in shellfish and the Alaska Fisheries Development
Foundation for a report entitled An Ocean of Answers.
⁶ Discussions among commercial fishermen on the internet discussion group “Fishfolk”
fishfolk@mitvma.mit.edu on Mar. 22-25, 2004.

program might be considered a continuing subsidy for the commercial fishing industry,
whether the funding of industry projects continues to be useful, how the utility of the S-K
program authority may have changed over time, and whether critical research might be
done by industry if it were not funded by the S-K program.
Criticism of S-K program management generally comes from elements of the
commercial fishing industry. Some critics of S-K Fund management question whether
the administration of both regulation and research within the same agency raises questions
about objectivity; they suggest that researchers might be hesitant to criticize the agency
for its regulatory actions because they might lose access to future or continued project
funding. Others suggest that the selection (i.e., restriction) of what types of projects will
be funded also may administratively “earmark” funds, such as occurred in FY2003 when
about half of all industry project funding ($5 million of an anticipated $10.3 million) was
identified for direction to Atlantic salmon aquaculture development. Others suggest that
the narrow agency identification of projects that would be funded in FY2003 actually
prompted the subsequent congressional earmarks to specify projects that are to be funded.
The following chronology presents the development of this program. Key references
are identified in footnotes by links to where they may be viewed, with care taken to select
those resources that may be least transient. Full citations are not provided to these
footnoted documents because of the lengthy organizations and titles for them.
Chronology

07/01/1954 — President Eisenhower signs the Saltonstall-Kennedy Act (68 Stat.

376; 15 U.S.C. §713c-3) into law.

06/15/1961 — Senate Commerce Subcommittee on Merchant Marine and Fisheries
holds a hearing on fishery research and rehabilitation amendments to
the S-K Act.⁷
10/01/1978 — NOAA’s National Marine Fisheries Service (NMFS) begins
receiving S-K dollars as annual budgetary transfers to NOAA’s
Operations, Research, and Facilities account.

12/22/1980 — Section 210 of the American Fisheries Promotion Act (P.L. 96-561)

amends the S-K Act to require that not less than 50% of each fiscal
year’s funds be used to provide financial assistance for projects.
01/06/1983 — Section 423 of P.L. 97-424 amends the S-K Act to require that not
less than 60% of each fiscal year’s funds be used to provide financial
assistance for projects.

⁷ U.S. Congress, Senate, Committee on Commerce, Subcommittee on Merchant Marine and
Fisheries, Fishery Research and Rehabilitation (Amendments to Saltonstall-Kennedy Act), 87^th^st
Congress, 1 session, hearing on S. 1230 on June 15, 1961 (Washington, DC: GPO, 1961), 103
p.

08/30/1985 — The General Accounting Office (GAO) releases a report on the Uses
of Saltonstall/Kennedy Fisheries Development Funds
(GAO/RCED0-85-145), reviewing both NMFS in-house activities
and competitive industry projects supported by S-K dollars. GAO
examines the adequacy of the project selection process, project
monitoring procedures, and the dissemination of project results.
GAO presents views on the benefits of this program to the U.S.
commercial fishing industry but makes no recommendations.⁸
11/14/1986 — The enactment of §209 of P.L. 99-659 creates the Fisheries
Promotional Fund, to be capitalized with S-K funds.⁹
05/14/2002 — NOAA Fisheries announces the FY2003 S-K Program, allocating $5
million of an anticipated $10.3 million for Atlantic salmon
aquaculture development.¹⁰
02/20/2003 — President Bush signs P.L. 108-7, wherein §209 (Division B; General
Provisions — Department of Commerce) appropriates $10 million
in S-K dollars for the Alaska Fisheries Marketing Board for
FY2003.¹¹
06/30/2003 — NOAA Fisheries announces the FY2004 S-K Program, suggesting
that about $4 million would be available for projects.¹²

08/01/2003 — NOAA Fisheries publishes its 2003 S-K Report to Congress.¹³

01/23/2004 — President Bush signs P.L. 108-199, wherein §208 (Division B;

General Provisions — Department of Commerce)¹⁴ appropriates $17
million in S-K dollars for various specified fisheries programs for
FY2004;¹⁵ a “soft” earmark (H.Rept. 108-221, p. 89) identifies an
additional $250,000 for the Gulf and South Atlantic Fisheries
Foundation to continue a Vibrio education program.
03/19/2004 — NOAA Fisheries announces that the FY2004 competitive S-K
Program is being canceled due to insufficient funding and all

⁸ See [http://161.203.16.4/d11t3/127795.pdf], visited Mar. 24, 2004.
⁹ 16 U.S.C. §4008.
¹⁰ 67 Federal Register 34427-34434 (May 14, 2002).
¹¹ 117 Stat. 78.
¹² 68 Federal Register 38678-38690 (June 30, 2003).
¹³ See [http://www.nmfs.noaa.gov/ocs/sk/pdf/03report_wsite.pdf], visited Mar. 24, 2004.
¹⁴ 118 Stat. 73-74.
¹⁵ $10,000,000 to the Alaska Fisheries Marketing Board, $2,000,000 to the Gulf and South
Atlantic Fisheries Foundation, $2,000,000 to the South Carolina Seafood Alliance, $1,500,000
to the Oregon Trawl Commission, and $1,500,000 to the Oregon State University Seafood
Laboratory.

applications are being returned to the applicants without further
consideration.¹⁶ On its S-K website, NOAA Fisheries notes that the
President’s budget request for FY2005 also does not provide
sufficient funding for the competitive S-K Program.¹⁷

¹⁶ 69 Federal Register 13021 (Mar. 19, 2004).
¹⁷ See [http://www.nmfs.noaa.gov/ocs/skhome.html], visited Mar. 24, 2004.

Table 1. Financing History of Saltonstall-Kennedy Account
(thousand $)
^Im^port^T^r^an^s^f^er^Fund^{s t}^o^Fisher^m^e^n’^s^Co^ngr^e^ss.^Re^m^a^ind^e^r^Earm^ark^s^an^d
^FY^d^u^ties^fr^o^m^NOA^A^Prom^otⁱ^oⁿ^a^l^earm^a^rk^s^a^av^ailable^aa^rem^aⁱⁿ^{der as}
^collected^A^g^ri^cu^l^t^u^re^OR^F^Fund^{% of}^tran^s^f^er
¹⁹⁷⁸^43,280^12,984⁰⁰⁰^12,984^100%
¹⁹⁷⁹^58,120^17,436^5,000⁰⁰^12,436^71%
¹⁹⁸⁰^88,930^26,679^5,000⁰⁰^21,679^81%
¹⁹⁸¹^116,600^35,000^17,500⁰⁰^17,500^50%
¹⁹⁸²^87,300^26,200^10,000⁰⁰^16,200^62%
¹⁹⁸³^102,100^30,600^22,600⁰⁰^8,000^26%
¹⁹⁸⁴^119,900^33,600^23,600⁰⁰^10,000^30%
¹⁹⁸⁵^116,500^34,900^25,900⁰⁰^9,000^26%
¹⁹⁸⁶^145,600^43,700^34,100⁰⁰^9,600^22%
¹⁹⁸⁷^191,400^57,400^51,600⁷⁵⁰⁰⁵^,050^9%
¹⁹⁸⁸^187,800^56,300^44,400^2,600⁰⁹^,300^17%
¹⁹⁸⁹^178,900^53,600^45,600^3,000⁰⁵^,000^9%
¹⁹⁹⁰^206,500^61,900^55,000^2,000⁰⁴^,900^8%
¹⁹⁹¹^235,900^70,800^60,900^2,000⁰⁷^,900^11%
¹⁹⁹²^213,700^64,100^63,100⁰⁰^1,000^2%
¹⁹⁹³^204,700^61.400^55,000⁰⁰^6,400^10%
¹⁹⁹⁴^206,500^61,944^54,800⁰⁰^7,144^12%
¹⁹⁹⁵^215,885^64,765^55,500⁰⁰^9,265^14%
¹⁹⁹⁶^242,977^72,893^63,000⁰⁰^9,893^14%
¹⁹⁹⁷^221,270^66,381^66,000⁰⁰³⁸¹^1%
¹⁹⁹⁸^219,110^65,730^62,380⁰⁰^3,350^5%
¹⁹⁹⁹^221,420^66,430^63,380⁰⁰^3,050^5%
²⁰⁰⁰^233,070^69,920^68,000⁰⁰^1,920^3%
²⁰⁰¹^242,760^72,830^68,000⁰⁰^4,830^7%
²⁰⁰²^263,770^79,130^68,000⁰⁰^11,130^14%
²⁰⁰³^250,750^75,220^65,000⁰^10,000²²⁰^14%
²⁰⁰⁴^265,747^79,724^62,000⁰^17,250⁴⁷⁴^22%

^a.^Ex^cept^f^o^{r F}^Y^{2004, t}^hⁱ^s^col^u^mⁿ^doesⁿ^o^tⁱⁿ^cl^u^d^{e t}^h^{e “}^s^of^t^”^earm^a^rk^s^as^prevⁱ^o^u^s^l^y^di^s^c^u^s^s^e^d.
^aa.^T^hⁱ^s^am^ouⁿ^tⁱⁿ^cl^u^d^es^f^uⁿ^d^s^f^o^{r i}ⁿ^du^s^t^ry^proj^ect^s^,^t^h^e^natⁱ^oⁿ^a^l^prog^ram^,^an^{d N}^M^F^S^/^N^O^A^A^Fⁱ^s^h^eri^e^s
^ex^pen^s^es^f^o^r^admⁱⁿⁱ^s^t^eriⁿ^g^t^h^{e i}ⁿ^du^s^t^ry^proj^ect^s^.^In^F^Y^{2003, t}^h^es^{e adm}ⁱⁿⁱ^s^t^ratⁱ^v^{e ex}^pen^s^es^w^e^re^es^tⁱ^m^at^ed
^at^$500,000.