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Calendar No. 949
110th Congress Report
2d Session 110-451
NAVAL VESSEL TRANSFER ACT OF 2008
September 10, 2008.--Ordered to be printed
Mr. Dodd, from the Committee on Foreign Relations,
submitted the following
[To accompany S. 3052]
The Committee on Foreign Relations, having had under
consideration the bill S. 3052 to provide for the transfer of
naval vessels to certain foreign recipients, reports favorably
thereon and recommends that the bill do pass.
II. Committee Action.................................................1
IV. Cost Estimate....................................................3
V. Evaluation of Regulatory Impact..................................4
VI. Changes in Existing Law..........................................4
The purpose of the Naval Vessel Transfer Act of 2008 is to
authorize the President to transfer certain specified naval
vessels to particular countries.
II. Committee Action
S. 3052 was introduced on May 22, 2008 by Sens. Biden and
Lugar. At a business meeting on July 29, 2008, the committee
ordered S. 3052 reported favorably by voice vote, with no
Pursuant to section 824(b) of the National Defense
Authorization Act for Fiscal Year 1994, as amended, 10 U.S.C.
7307(a), a naval vessel that is in excess of 3,000 tons or that
is less than 20 years of age may not be disposed of to another
nation unless the disposition of that vessel is approved by law
enacted after August 5, 1974. Each year, the executive branch
requests the needed legislation for the ship transfers that it
wishes to offer to particular countries, either by grant or by
S. 3052 would provide the required approval for six
transfers, as follows:
To the Government of Pakistan, the Oliver Hazard Perry
class guided missile frigate McInerney (FFG-8);
To the Government of Greece, the Osprey class minehunter
coastal ships Osprey (MHC-51) and Robin (MHC-54);
To the Government of Chile, the Kaiser class oiler Andrew
J. Higgins (AO-190); and
To the Government of Peru, the Newport class amphibious
tank landing ships Fresno (LST-1182) and Racine (LST-
These would all be grant transfers under section 516 of the
Foreign Assistance Act of 1961 (22 U.S.C. 2321j).
Section 2 contains four provisions that are traditional
elements of ship transfer legislation. Section 2(b) provides
that the value of a vessel transferred to another country on a
grant basis pursuant to authority provided by this section
shall not be counted against the aggregate value of excess
defense articles transferred to countries in any fiscal year
under section 516 of the Foreign Assistance Act of 1961 (22
U.S.C. 2321j). Section 2(c) provides that any expense incurred
by the United States in connection with a transfer authorized
by this section shall be charged to the recipient
(notwithstanding section 516(e)(1) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2321j(e)(1)). Section 2(d) provides
that, to the maximum extent practicable, the President shall
require, as a condition of the transfer of a vessel under this
section, that the country to which the vessel is transferred
have such repair or refurbishment of the vessel as is needed,
before the vessel joins the naval forces of that country,
performed at a shipyard located in the United States, including
a United States Navy shipyard. Section 2(e) provides that the
authority provided by this bill will expire 2 years after the
date of enactment of the bill.
On April 25, 2008, the Secretary of the Navy, the Honorable
Donald C. Winter, wrote to the chairman of the Committee on
Foreign Relations that: ``Authority to transfer surplus vessels
is an important aspect of our ship disposition strategy. It
enables us to manage our inventory while strengthening ties
with our naval allies by transferring ships that they desire.''
Secretary Winter added: ``The ships specified in this proposal
are no longer required for service by the Navy. Expeditious
enactment of the proposal is in the best interests of the
Navy's Maritime Strategy as it will allow us to strengthen the
capabilities of partner nations.'' An accompanying section-by-
section analysis of the proposal added the following
information on this bill:
These proposed transfers would improve the United
States' political and military relationships with close
allies. They would support strategic engagement goals
and regional security cooperation objectives. Active
use of former naval vessels by coalition forces in
support of regional priorities is more advantageous
than retaining vessels in the Navy's inactive fleet and
disposing of them by scrapping or another method.
The United States would incur no costs in
transferring these naval vessels. The recipients would
be responsible for all costs associated with the
transfers, including maintenance, repairs, training,
and fleet turnover costs.
IV. Cost Estimate
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, August 8, 2008.
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 3052, the Naval
Vessel Transfer Act of 2008.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
Peter R. Orszag.
Congressional Budget Office Cost Estimate
August 8, 2008.
Naval Vessel Transfer Act of 2008
AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON
JULY 29, 2008
S. 3052 would authorize the grants of six naval vessels to
foreign countries. In each case, the bill identifies the vessel
and the recipient country. The authority to transfer those
vessels would expire two years after enactment. Under the bill,
any costs related to the transfer, including costs for
refurbishment of the vessels, must be paid by the recipient
country. Such amounts are typically paid directly to the
private shipyard that does the work.
Because the bill would authorize the transfer of those
vessels by grant, instead of by sale, CBO estimates that
enacting this bill would not affect direct spending or
revenues. Implementing the bill would have no significant
effects on spending subject to appropriation.
S. 3052 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
The CBO staff contact for this estimate is Sunita D'Monte.
This estimate was approved by Peter H. Fontaine, Assistant
Director for Budget Analysis.
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. 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 to existing law are made by this bill.