Mr. RENSHAW. I know of none, sir. I am just not familiar with that. Mr. BURKE. I thank you.

Mr. ROSTENKOWSKI. Mr. Duncan.

Mr. DUNCAN. Thank you, Mr. Chairman.

Mr. Renshaw, how many shipbuilders or people belong to your Waterways Operators Association?

Mr. RENSHAW. There are about 32 shipyards, comparatively small yards, that belong to the American Waterways Operators. There are 18 to 19 shipyards, mainly very large ones, that belong to the Shipbuilders Council of America. We have had correspondence with well over a hundred shipyards unaffiliated with either one of those organizations. As an individual, I represent an ad hoc committee of shipyards from the American Waterways Operators and the Shipbuilders Council, plus many, many unaffiliated.

Mr. Duncan, it is surprising, but I don't know the total number of shipyards in this country. We are finding out in a hurry.

Mr. DUNCAN. What is the size of the shipbuilding industry in this country? How many people are employed?

Mr. RENSHAW. I believe it is in the neighborhood of 130,000 employees.

Mr. DUNCAN. Has that increased or decreased in the last 10 years?
Mr. RENSHAW. I would say there has been a slight decrease.
Mr. DUNCAN. Thank you.

Thank you, Mr. Chairman.

Mr. ROSTENKOWSKI. Mr. Brotzman.

Mr. BROTZMAN. I have one question, a sort of followup question. Could you estimate what percentage of those ships that sail under the American flag were built in this country? What I am trying to find out is what percentage of the shipbuilding market for ships used by Americans do we have? Do we build most of our own ships? Does somebody else build the ships for us?

Mr. RENSHAW. I don't have the figures in front of me. Unfortunately, there are many ships built for Americans in foreign shipyards.

Mr. BROTZMAN. Do you have any idea about the percentages on that? Mr. RENSHAW. I really don't know. I am not equipped with that information. If we can get this information together we will be glad to submit a statement.

Mr. BROTZMAN. It was a matter for my own information. I was just trying to learn something about your industry and how it is doing, and what percentage of the market we have.

Mr. RENSHAW. If any American ship is built overseas it then has to fly a foreign flag. But we will get those figures together and submit that as an addendum to our testimony.

Mr. BROTZMAN. I appreciate that. Thank you.

[The information requested was not received by the committee at the time of printing.]

Mr. RENSHAW. I think it is pertinent. That applies to the bigger ships and really the bigger shipyards. Increased costs in American yards makes building here less attractive. The problem with the smaller shipyards competing in the foreign market is particularly acute. Many smaller shipyards, particularly in the gulf area, are quite competitive with foreign shipyards in Europe and in Japan. This is a

highly competitive business. These increased compensation costs would literally drive these people out of business.

Mr. BROTZMAN. Thank you.

Mr. ROSTENKOWSKI. Mr. Archer.

Mr. ARCHER. Mr. Renshaw, is your committee making any effort through other substantive legislation to change the Longshoremen's and Harbor Workers' Compensation Act so as to get back on the traditional basis of land-based injuries being covered under State law?

Mr. RENSHAW. Today we are not. We are looking at every avenue of relief. To date we have made no effort elsewhere.

Mr. ARCHER. I certainly agree with your presentation that the Congress really did not consider this at all to my knowledge, at the time that it came on the floor of the House. I assume you did not testify before the Education and Labor Committee because you didn't have any knowledge that this was going to come up. Is that a correct assumption?

Mr. RENSHAW. That is correct.

Mr. ARCHER. I think, though, that it might be an unusual precedent, if the Ways and Means Committee attempted by tax credit to offset something that was done by another committee of the House.

It seems to me that the best approach to this thing would be for you to go with legislation back to the Education and Labor Committee and attempt to get these lines drawn again where they have traditionally been. But I understand completely the tremendous impact this has had on your industry and how it could very well force our shipbuilding industry overseas to a greater extent than it already is. Mr. RENSHAW. We have talked to some of the other committees, as indicated in our original request for an appointment here. We have not pursued any other specific action to date. We feel that this is one area that would be a legitimate area for relief.

Mr. ARCHER. Thank you very much, Mr. Renshaw.

Thank you, Mr. Chairman.

Mr. ROSTENKOWSKI. Mr. Clancy.

Mr. CLANCY. Mr. Renshaw, how many employees who are covered under the Federal laws are injured in a given year? Do you have any statistics as to that?

Mr. RENSHAW. I do not. But that should be a statistic that that would be readily available. We will try to get hold of it, sir.

Mr. CLANCY. Will you submit that for the record, please?

Mr. RENSHAW. Yes, sir.

[The information requested was not received by the committee at the time of printing.]

Mr. CLANCY. We talk about 130,000 total employees-I think that is the figure you used-engaged in this industry.

Mr. RENSHAW. That is the range of total employees.

Mr. CLANCY. As a result of the actions in 1972, 45,000 additional were added under the Federal Act.

Mr. RENSHAW. 45,000 for the 70 shipyards. Bear in mind this is not the total industry.

Mr. CLANCY. In other words, the 42,000 or 45,000, whatever the figure is, results from those replying to your questionnaire? Mr. RENSHAW. Yes; that is correct.

Mr. CLANCY. Thank you very much.

Mr. ROSTENKOWSKI. Thank you, Mr. Renshaw. The record will remain open for you to submit those statistics.

Mr. RENSHAW. Thank you very much.

Mr. ROSTENKOWSKI. The next witness is Mr. Harry Freeman. Mr. VANIK. Mr. Chairman, before this witness leaves the standyour company is a shipbuilding company?

Mr. RENSHAW. A shipbuilding company; yes, sir.

Mr. VANIK. You don't operate any ships, do you?

Mr. RENSHAW. My particular companies are three shipyards building river towboats and barges. We have a sister company that operates a bargeline.

Mr. VANIK. Are those bargelines under American registry?

Mr. RENSHAW. Absolutely. Every one of them.

Mr. VANIK. Thank you very much.

Mr. ROSTENKOWSKI. Mr. Harry Freeman, if you will identify yourself, you may continue with your statement.

STATEMENT OF HARRY M. FREEMAN, ADOPT A CHILD TODAY OF OHIO, INC.

Mr. FREEMAN. Mr. Chairman, my name is Harry Freeman. I am testifying today as a member of Adopt a Child Today of Ohio. Adopt a Child Today of Ohio, Inc., is a citizen adoption group composed of involved laymen, adoptive parents, and other interested citizens concerned about homeless children and their need for families.

The organization presently has six chapters and seven affiliates with approximately 1,000 members living throughout the State of Ohio. The principals in the group have been involved with child welfare for nearly a decade. We appreciate your allowing us to testify before the committee today.

Our purpose in testifying is to support proposals to amend the tax code to allow a deduction from gross income for adoption fees and related costs incurred in connection with the adoption of a child by a taxpayer. Currently, these expenses are treated by the Internal Revenue Service as personal expenses and consequently not deductible.

Given that considerable social and economic benefits accrue to society as a result of individuals adopting children and removing them from public care, we believe that this treatment of adoption expenses is unreasonable.

The expenses arising from adoption should be treated at least as favorably as medical expenses related to natural birth. However, since these expenses represent true out-of-pocket costs, they should be treated as completely deductible.

Adoption service is costly. In addition to the legal costs involved, there are the agency costs which may include the cost of medical care for the natural mother and the child, court costs, and the costs of making the necessary social studies.

While these fees are sometimes waived or adjusted according to the individual situation, adoptive parents usually pay costs beyond those incurred in a natural birth.

The amounts of the expenses vary considerably throughout the country depending upon whether or not there is an agency involved and whether it is public or private, the particular items in the agency fee, the amount of legal work necessary, and geographic variations. The expenses typically range from zero dollars to $3,000 per adoption. DHEW's Children's Bureau has estimated in a bulletin dated December 1971 that, on the average, the prospective adoptive parent might expect to pay $1,000 for an adoption arranged by a private agency, $800 for an independent adoption, and $450 in attorney fees for an adoption arranged by a public agency that does not charge fees. Of course, since the joys of a child in a home are really impossible to estimate, it is impossible to relate the above-mentioned costs to the benefits of having a child. Nevertheless, they are rather sizable and do represent a drain on the family's resources.

Today, although there is a shortage of healthy white infants, the most popular group for adoption, there continues to be an increasing number of children without homes. According to estimates by the Children's Bureau, 3 out of every 10 children available for adoption will not be placed.

This 30 percent is made up of children of nonwhite or racially mixed parentage, of physically and mentally handicapped children, and of older children.

The Child Welfare League of America believes that there are perhaps 80,000 nonwhite children plus 110,000 other children in foster homes and institutions who have not been placed in permanent homes. With the continued liberalization of parental custody laws affecting these children in limbo, there will be more adoptable children available in the future.

Most children adopted by nonrelatives are born of unwed mothers. In 1970, for example, 88 percent of the children adopted by nonrelatives were in this category. Furthermore, those children available for adoption who are not born of unwedded parents come from a family environment that for some reason has become damaging to the child's welfare.

Either of these backgrounds means that some form of public service and support during childhood and youth would become necessary were these children not adopted. This potential drain on public sources of support is rendered unnecessary by adoption.

Of course, creating loving homes for the homeless children of the country involves many factors, only one of which is amending the tax code to allow adoption expenses to be deducted. In the instance of low-income families who other than for financial reasons would qualify as an adoptive home, small subsidies might be necessary. This is an issue for State legislatures and not the Ways and Means Committee. Incidentally, over 20 States have now passed enabling legislation for such programs, and 15 or 20 other States are considering similar laws. However, the committee can contribute to the creation of an environment conductive to adoption by allowing the initial adoption costs to be deductible.

Other elements in our society besides the State legislatures have initiated programs to encourage the adoption of homeless children.

Recently IBM has initiated a program to provide assistance to their employees for adoption expenses. The benefit reimburses employees for 80 percent of the costs up to $800 per child. Eligible expenses include adoption agency and legal fees, temporary foster care, and maternity benefits for the biological mother.

We are aware of at least two bills that have been referred to the committee that will provide the desired relief to the parents of adopted children. Mr. Corman's bill, H.R. 4916, and Mr. Rarick's bill, H.R. 1858, both provide that adoption expenses be deductible.

The two bills differ in that Mr. Corman's bill contains a $1,250 limit on the deduction, while Mr. Rarick's bill contains no such limitation. While we would prefer that no limitation be placed on the deduction, we cannot take strong exception to a $1,250 limit since most adoption expenses, which were estimated in 1971 by the Children's Bureau to be $580 per adoption, will fall under the limit.

We are very encouraged by the apparently broad support within the House for the provisions of the bills. Mr. Rarick's bill at last count had some 40 cosponsors from both sides of the aisle whose voting records represent the entire spectrum of political philosophy within the House. We noted and appreciated that Mr. Duncan was one of the cosponsors.

Mr. Chairman, bills similar to and identical to Mr. Corman's and Mr. Rarick's bills have been submitted to the committee during the past few Congresses, but for some reason have not been reported out for consideration by the House. We hope that you will not allow this to happen to these bills.

Easing the financial burdens of initiating an adoption will encourage potential adoptive parents to open their families to homeless children, and will contribute to bettering the lot of an unfortunate group of young citizens who are all too often ignored by society.

Önce again, Mr. Chairman, we thank you for allowing us to testify before the committee today.

Mr. ROSTENKOWSKI. Thank you, Mr. Freeman, for a very informative statement.

Mr. Burke?

Mr. BURKE. Mr. Freeman, I want to commend you for your statement here. You are getting into a field in which I am greatly and deeply interested-child welfare.

The Federal Government only contributes about $44 million a year to child welfare cases. I am referring to those people who are in institutions around the country. I believe that represents about a 6-percent contribution on the part of the Federal Government toward the most disadvantaged children. Certainly this is an area where we can help relieve the situation in assisting prospective adoptive parents.

Some of these children are in institutions in the various States and stay there until they reach maturity.

I have often referred to them as the most forgotten children in our society. Something should be done by the Federal Government to recognize this area because there are approximately 600,000 children involved here all over the country. It is almost a national scandal the way they handle the child welfare cases of this country.