[Congressional Record Volume 143, Number 52 (Monday, April 28, 1997)]
[Senate]
[Pages S3754-S3756]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 661. A bill to provide an administrative process for obtaining a 
waiver of the coastwise trade laws for certain vessels; to the 
Committee on Commerce, Science, and Transportation.


               coastwise trade vessel waivers legislation

 Mr. McCAIN. Mr. President, I introduce legislation that would 
provide an administrative process for obtaining a waiver of the 
coastwise trade laws to allow certain vessels to commercially operate 
in the coastwise trade. This legislation will improve the 
responsiveness of the Federal Government in meeting the needs of many 
vessel-operating small businesses.
  The coastwise trade laws require that vessels operating between U.S. 
ports be built and documented in the United States and owned and 
operated by U.S. citizens. Today, if a U.S. citizen owner of a foreign-
built vessel wants to carry passengers for hire on that vessel in the 
coastwise trade of the United States, that person must obtain a 
legislative waiver of the coastwise laws.
  Many of my colleagues are familiar with these private relief bills. 
The legislative process for consolidating these numerous House and 
Senate bills usually involves including them in the Coast Guard 
authorization bill for final passage.
  While some Members may value the current process as a useful 
constituent service, it often delays resolution of a constituent's 
request by a year or more, causing financial hardship for the 
constituent's business. The potential influence of campaign 
contributions on such private relief bills is also a concern. The 
legislative process is slow, inefficient, and potentially unfair. Our 
constituents would be better served by delegating this waiver authority 
for noncontroversial requests to an appropriate administrative agency.
  My bill would authorize the Secretary of Transportation to 
administratively waive certain coastwise trade restrictions for vessels 
that meet the following criteria, which the Commerce Committee 
currently uses to determine if a waiver is warranted:
  First, this waiver authority would apply to foreign-built vessels of 
at least 3 years of age, and U.S.-built vessels that were rebuilt in 
foreign countries at least 3 years prior to the effective date of the 
waiver. The vast majority of the waiver requests considered by the 
Commerce, Science, and Transportation Committee in the past 3 years 
were for vessels of at least this age that had originally been used for 
recreational or other noncoastwise purposes.
  Second, this bill would limit the coastwise trade use of vessels 
obtaining such privileges through this process to service carrying a 
maximum of 12 passengers for hire. Again, the vast majority of waiver 
requests considered by the Commerce Committee specified this type of 
intended use.
  Finally, the Secretary would be required to make a determination that 
the use of the applicant's vessel in the coastwise trade would not 
adversely affect U.S.-vessel builders or the coastwise trade business 
of any person who employs U.S.-built vessels in the same trade. An 
exemption granted under this authority could be revoked if the vessel 
use substantially changes so as to cause such problems.
  Mr. President, during the 104th Congress, 73 of the 119 bills 
considered by the Commerce Committee were requests for waiver of the 
coastwise trade laws for special vessels. If my bill is enacted, only a 
few waiver requests falling outside the above criteria would need to be 
considered by the Commerce Committee each year, allowing the

[[Page S3755]]

Committee to focus its attention on more weighty matters.
  This bill would not authorize exemption from existing U.S. citizen 
ownership and crewing requirements. Also, this bill would not apply to 
vessels used for any purpose other than the carriage of a maximum of 12 
passengers for hire. My approach to these waivers is supported by the 
Passenger Vessel Association, National Association of Charterboat 
Operators, the Offshore Marine Services Association, the Committee for 
Private Offshore Rescue and Towing, and the Shipbuilders Council of 
America.
  Mr. President, I ask unanimous consent that letters of support from 
these organizations be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                 Passenger Vessel Association,

                                    Arlington, VA, March 10, 1997.
     Mr. Jim Sartucci,
     Committee on Commerce, Science and Transportation, U.S. 
         Senate, Washington, DC.
       Dear Mr. Sartucci, in response to your earlier 
     communication regarding Chairman McCain's interest in 
     developing a new process for evaluating proposed waivers from 
     the U.S.-build requirement of the Jones Act or the Passenger 
     Service Act, the Passenger Vessel Association will not object 
     to a proposal which:
       Clearly states the vessels in question are limited to those 
     certified to carry 12 or fewer passengers; shifts the burden 
     of proving ``no competitive impact'' to the waiver applicant; 
     provides that the Maritime Administration (MARAD) shall 
     review the waiver if the vessel for which it was granted is 
     relocated and, if MARAD determines that the vessel in its new 
     location poses a competitive disadvantage to an existing 
     operator, shall revoke the waiver; requires the Maritime 
     Administration to devise a means of widely informing the 
     passenger vessel industry about waiver requests that is 
     separate from a simple Federal Register notice; includes a 
     statement to the effect that the change does not reflect the 
     committee's view on the overall integrity of the Jones Act or 
     the Passenger Service Act.
       Thank you for the opportunity to evaluate and comment on 
     this proposed change to the law. If you have any questions, 
     please do not hesitate to let me know.
           Sincerely,
                                              John R. Groundwater,
     Executive Director.
                                  ____

                                           National Association of


                                        Charterboat Operators,

                                Washington, DC, February 20, 1997.
     Chairman John McCain,
     Senate Commerce, Science, and Transportation Committee, 
         Washington, DC.
       Dear Chairman McCain: I am writing you in support of the 
     proposed legislative language for documentation of small 
     passenger vessels on behalf of the National Association of 
     Charterboat Operators (NACO), a 4,100 member association 
     representing owners the charter industry. NACO appreciates 
     the opportunity to comment on the proposed legislation.
       NACO applauds the Committee for understanding and 
     attempting to correct certain laws governing coastwise trade 
     for vessels. These laws often times produce consequences that 
     very significantly depending on the size and the nature of 
     business of the vessel. NACO is hopeful that this is the 
     first step by the Committee in recognizing that small vessels 
     are consistently and inappropriately grouped with large 
     vessels under the same rules and regulations. As you are 
     aware, this leads to increased regulatory costs and burdens 
     for these small businesses.
       This proposed change to title 46 of the U.S. Code will 
     alleviate undue and costly burdens currently placed on small 
     passenger vessels who do not have the manpower or the 
     resources to go through the long and difficult documentation 
     process. This will help to ease these burdens, saving each 
     company time and money.
       By creating specific qualifications for documentation, the 
     Committee creates standards for documentation for small 
     passenger vessels which will ease the burden of the Committee 
     from responding to each individual request for documentation 
     and appropriately moves this documentation responsibility to 
     the Department of Transportation while also giving them 
     flexibility in approving documentation.
       Although NACO is in full agreement with the language, we 
     are concerned about sections (b)(2) and (c)(B) pertaining to 
     whether employment of the vessel adversely affects U.S. 
     vessel builders or operators of ships. NACO is concerned that 
     the criteria used in determining the adverse affects to 
     shipbuilders and operators in the same trade would be 
     arbitrary.
       Again, NACO is in full support of this administrative 
     change to the Jones Act, however, at the same time, the 
     association believes that the Committee should move 
     cautiously when making any sort of revision to the Jones Act.
       Thank you for you time and your attention to the need to 
     ease unfair burdens placed on small business. If you need 
     additional comments or information please contact me at (202) 
     546-6993.
           Sincerely,
                                                    Amy J. Taylor,
     Director of Congressional Affairs.
                                  ____

                                                   Offshore Marine


                                          Service Association,

                                   Harahan, LA, February 20, 1997.
     Mr. James Sartucci,
     Committee on Commerce, Science, and Transportation, 
         Washington, DC.
       Dear Mr. Sartucci: The Offshore Marine Service Association 
     (OMSA) has reviewed the draft language contained in your fax 
     transmission of February 10. We understand and respect 
     Chairman McCain's administrative objective and intention with 
     respect to this legislative initiative. Consequently, 
     speaking strictly for our constituency, OMSA has no absolute 
     objection to the proposal to grant restricted and conditional 
     coastwise trading privileges to certain small foreign built 
     vessels. In actual fact, however, our association's members 
     are not significantly affected, at least directly, by the 
     specific parameters included in this proposed legislation. 
     The PVA, and perhaps others, would appear to be the parties 
     to whom we would normally defer on the specifics of this 
     proposition.
       As discussed, our own support is contingent upon retention 
     of the protective covenants and limitations set forth in the 
     proposal presented to us for consideration, viz. in (b)(1), 
     that the vessel be strictly limited to service as a small 
     passenger vessel or an uninspected passenger vessel as those 
     terms are defined in Section 2101 of title 46, United States 
     Code, and in (b)(2) and (c).
       Finally, for the record, we ask that you please note that 
     OMSA does have some discomfort with the precedent that could 
     be set by this legislation. We harbor some concern it could 
     conceivably ``open the door'' to subsequent, additional 
     legislation that would, relatively speaking, more seriously 
     impact the coastwise trade protections afforded to U.S. flag 
     vessels under the Jones Act and the Passenger Vessel Services 
     Act. However, we accept, in good faith, the Chairman's stated 
     objectives and the collateral safeguards that are promised.
       OMSA would agree that the U.S. Maritime Administration 
     (MARAD) could be the appropriate government agency within the 
     Department of Transportation to consider and approve 
     applications for the purposes of the proposal.
       We thank you for keeping us advised of such proposals and 
     for inviting our views. Please do not hesitate to contact the 
     undersigned, at (504) 734-7622, if you have any questions or 
     wish to discuss this matter in further detail.
           Very truly yours,
                                                 Robert J. Alario,
     President.
                                  ____


                   [From the C-Port News, Mar. 1997]

             Senate Committee Proposes Change to Jones Act

       Congress will soon be proposing a major change to the Jones 
     Act that will allow marine assistance operators to use 
     foreign built vessels and vessels rebuilt outside the United 
     States in their businesses.
       The bill, introduced by Senator John McCain (R-AZ), 
     Chairman of the Senate Commerce, Science, and Transportation 
     Committee, allows for the use of a foreign built or rebuilt 
     vessel in commercial coastwise trade when the vessel is over 
     3 years old and is used as a small or uninspected passenger 
     vessel. Marine assistance towing vessels are classified by 
     the Coast Guard as uninspected passenger vessels, not 
     uninspected towing vessels.
       Although the bill will help the marine assistance industry, 
     it also contains two stipulations about which C-PORT is 
     concerned. The bill allows the Secretary of Transportation to 
     revoke the new documentation policy for foreign vessels if it 
     is found to adversely affect U.S. vessel builders or other 
     similar businesses using U.S. built vessels. According to the 
     bill, ``the Secretary of Transportation may issue a 
     certificate of documentation with appropriate endorsement for 
     employment in the coastwise trade as a small passenger vessel 
     or an uninspected passenger vessel for an eligible vessel if 
     the Secretary determines that the employment of the vessel . 
     . . will not adversely affect (1) United States vessel 
     builders; or (2) the coastwise trade business of any person 
     who employs vessels built in the United States in the 
     business.''
       C-PORT sent the following letter to Chairman McCain to 
     express support for the bill, but also to voice concern over 
     these two stipulations:
       ``Dear Chairman McCain: C-PORT applauds the Committee for 
     understanding and attempting to correct certain laws 
     governing coastwise trade for vessels. These laws often times 
     produce consequences that vary significantly depending on the 
     size and the nature of business of the vessel. C-PORT is 
     hopeful that this is the first step by the Committee in 
     recognizing that small vessels are consistently and 
     inappropriately grouped with large vessels under the same 
     rules and regulations. As you are aware, this leads to 
     increased regulatory costs and burdens for these small 
     businesses.
       ``This proposed change to title 46 of the U.S. Code will 
     alleviate undue and costly burdens currently placed on small 
     vessels who do not have the manpower or the resources to go 
     through the long and difficult documentation process. This 
     will help to

[[Page S3756]]

     ease these burdens, saving each company time and money.
       ``By creating specific qualifications for documentation, 
     the Committee creates standards for documentation for small 
     vessels which will ease the burden of the Committee from 
     responding to each individual request for documentation 
     and appropriately moves this documentation responsibility 
     to the Department of Transportation while also giving them 
     flexibility in approving documentation.
       ``Although C-PORT is in full agreement with the language, 
     we are concerned about sections (b)(2) and (c)(B) pertaining 
     to whether employment of the vessel adversely affects U.S. 
     vessel builders or operators of ships. C-PORT is concerned 
     that the criteria used in determining the adverse affects to 
     shipbuilders and operators in the same trade would be 
     arbitrary.
       ``Again, C-PORT is in full support of this administrative 
     change to the Jones Act, however, at the same time, the 
     association believes that the Committee should move 
     cautiously when making any sort of revision to the Jones Act.
       ``Thank you for your time and your attention to the need to 
     ease unfair burdens placed on small business.''
       C-PORT expects this legislation to easily pass the Senate 
     and the House. We will keep you informed as this measure 
     moves through Congress. If you have any questions contact Amy 
     Taylor (800) 745-6094.
                                  ____



                              Shipbuilders Council of America,

                                Alexandria, VA, February 27, 1997.
     Mr. James Sartucci,
     Senate Committee on Commerce, Science, and Transportation, 
         Washington, DC.
       Dear Jim: Thank you for sending the most recent draft of 
     Senator McCain's Jones Act waiver bill. SCA shares your basic 
     objective of reducing the paperwork burden on Committee 
     members and staff while in no way eroding or changing the 
     U.S.-build requirement or any other provisions of the Jones 
     Act.
       SCA supports all of the suggested additions to Senator 
     McCain's bill included in a letter of February 25 sent to you 
     and Carl Bentzel by Rolf Marshall of the Maritime Cabotage 
     Task Force (MCTF). Most importantly, these recommended 
     changes will make it undeniably clear that by enacting this 
     bill Congress in no way lessens or modifies the protections 
     granted by cabotage statutes.
       Therefore, SCA supports the February 19 draft of the Jones 
     Act waiver bill along with the recommended changes described 
     in the February 25 letter from the MCTF.
       On behalf of the members of SCA I want to commend you for 
     your diligence in crafting a new Jones Act waiver process 
     that makes sense administratively while safeguarding the 
     Jones Act.
           Cordially,
                                                 Penny L. Eastman,
     President.

                          ____________________