[Congressional Record Volume 143, Number 54 (Wednesday, April 30, 1997)]
[Senate]
[Pages S3844-S3846]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MURKOWSKI:
  S. 668. A bill to increase economic benefits to the United States 
from the activities of cruise ships visiting Alaska; to the Committee 
on Commerce, Science, and Transportation.


         BENEFITS FROM CRUISE SHIPS VISITING ALASKA LEGISLATION

  Mr. MURKOWSKI. Today, Mr. President, I am reintroducing a very 
important measure--one that will unlock and open a door that Congress 
has kept barred for over 100 years.
  Opening that door will create a path to thousands of new jobs, to 
hundreds of millions of dollars in new economic activity, and to 
millions in new Federal, State, and local government revenues. 
Furthermore, Mr. President, that door can be opened with no adverse 
impact on any existing U.S. industry, labor interest, or on the 
environment, and it will cost the Government virtually nothing.

[[Page S3845]]

  There's no magic to this; in fact, it's a very simple matter. My bill 
merely allows U.S. ports to compete for the growing cruise ship trade 
to Alaska, and encourages the development of an all-Alaska cruise 
business, as well.
  The bill amends the Passenger Service Act to allow foreign cruise 
ships to operate from U.S. ports to Alaska, and between Alaska ports. 
However, it also very carefully protects all existing U.S. passenger 
vessels by using a definition of ``cruise ship'' designed to exclude 
any foreign-flag vessels that could conceivably compete in the same 
market as U.S.-flag tour boats or ferries. Finally, it provides a 
mechanism to guarantee that if a U.S. vessel ever enters this trade in 
the future, steps will be taken to ensure an ample pool of potential 
passengers.
  Mr. President, this is a straightforward approach to a vexing 
problem, and it deserves the support of this body.
  Let's look at the facts. U.S. ports currently are precluded from 
competing for the Alaska cruise ship trade by the Passenger Service Act 
of 1886, which bars foreign vessels from carrying passengers on one-way 
voyages between U.S. ports. However, it isn't 1886 anymore. These days, 
no one is building any U.S. passenger ships of this type, and no one 
has built one in over 40 years.
  Because there are no U.S. vessels in this important trade, the only 
real effect of the Passenger Service Act is to force all the vessels 
sailing to Alaska to base their operations in a foreign port instead of 
a U.S. city.
  Mr. President, what we have here is an act of Congress prohibiting 
U.S. cities from competing for thousands of jobs and hundreds of 
millions in business dollars. That is worse than absurd--in light of 
our ever-popular election-year promises to help the economy, it belongs 
in Letterman's ``Top Ten Reasons Why Congress Doesn't Know What It's 
Doing.''
  How, Mr. President, can anyone argue with a straight face for the 
continuation of a policy that fails utterly to benefit any identifiable 
American interest, while actively discouraging economic growth.
  Mr. President, this is not the first time I have introduced this 
legislation. When I began, Alaska-bound cruise passengers totaled about 
200,000 per year. By last year, 445,000 people--most of them American 
citizens--were making that voyage. This year's traffic may exceed 
500,000 people. Almost all those passengers are sailing to and from 
Vancouver, British Columbia--not because Vancouver is necessarily a 
better port, but because our own foolish policy demands it.
  The cash flow generated by this trade is enormous. Most passengers 
fly in or out of Seattle-Tacoma International Airport in Washington 
State, but because of the law, they spend little time there. Instead, 
they spend their pre- and post-sailing time in a Vancouver hotel, at 
Vancouver restaurants and in Vancouver gift shops. And when their 
vessel sails, it sails with food, fuel, general supplies, repair and 
maintenance needs taken care of by Vancouver vendors.
  According to some estimates the city of Vancouver receives benefits 
of well over $200 million per year. Others provide more modest 
estimates, such as a comprehensive study by the International Council 
of Cruise Lines, which indicated that in 1992 alone, the Alaska cruise 
trade generated over 2,400 jobs for the city of Vancouver, plus 
payments to Canadian vendors and employees of over $119 million. If 
that business had taken place inside the United States, it would have 
been worth additional Federal, State and local tax revenues of 
approximately $60 million.
  In addition to the opportunities now being shunted to Vancouver, we 
are also missing an opportunity to create entirely new jobs and income 
through the potential to develop new cruising routes between Alaska 
ports. The city of Ketchikan, AK, was told a few years ago that two 
relatively small cruise ships were very interested in establishing 
short cruises within southeast Alaska. I'm told such a business could 
have contributed $2 million or more to that small community's economy, 
and created dozens of new jobs. But, because of the current policy, the 
opportunity simply evaporated.
  Why, Mr. President, do we allow this to happen? This is a market 
almost entirely focused on U.S. citizens going to see one of the United 
States most spectacular places, and yet we force them to go to another 
country to do it. We are throwing away both money and jobs--and getting 
nothing whatsoever in return.
  Why is this allowed to happen? The answer is simple--but it is not 
rational. Although the current law is actually a job loser, there are 
those who argue that any change would weaken U.S. maritime interests. I 
submit, Mr. President, that is not the case.
  For some inexplicable reason, paranoia runs deep among those who 
oppose this bill. They seem to feel that amending the Passenger Service 
Act so that it makes sense for the United States would create a threat 
to Jones Act vessels hauling freight between U.S. ports. Mr. President, 
there simply is no connection whatsoever between the two. I have 
repeatedly made clear that I have no intention of using this bill to 
create cracks in the Jones Act.

  This bill would actually enhance--not impede--opportunities for U.S. 
workers. Both shipyard workers and longshoremen--not to mention hotel 
and restaurant workers and many others--would have a great deal to gain 
from this legislation, and the bill has been carefully written to 
prevent the loss of any existing jobs in other trades.
  Finally, let me dispose of any suggestion that this bill might harm 
smaller U.S. tour or excursion boats. The industry featuring these 
smaller vessels is thriving, but it simply doesn't cater to the same 
client base as large cruise ships. For one thing, the tour boats 
operating in Alaska are all much smaller. The smallest foreign-flag 
vessel eligible under this limit is Carnival Cruise Line's Windstar, 
which is a 5,700-ton ship with overnight accomodations for 159 
passengers. By contrast, although the largest U.S. vessel in the Alaska 
trade is rated to carry 138 passengers, she is less than 100 gross 
deadweight tons.
  The fact of the matter is that there is no significant competition 
between the two types of vessel, because the passengers inclined to one 
are not likely to be inclined to the other. The larger vessels offer 
unmatched luxury and personal service, on-board shopping, 
entertainment, etc. The smaller vessels offer more flexible routes and 
the ability to get closer to many of Alaska's extraordinary natural 
attractions.
  In the spirit of full disclosure, Mr. President, let me acknowledge 
that there is one operating U.S. vessel that doesn't fit the mold: the 
Constitution, an aging 30,000-ton vessel operating only in Hawaii. This 
is the only ocean-capable U.S. ship that might fit the definition of 
``cruise vessel.'' I have searched for other U.S. vessels that meet or 
exceed the 5,000-ton limit in the bill, and the only ones I have found 
that even approach it are the Delta Queen and the Mississippi Queen, 
both of which are approximately 3,360 tons, and both of which are 19th 
century-style riverboats that are entirely unsuitable for any open-
ocean itinerary such as the Alaska trade.
  Mr. President, I cannot claim that this legislation would immediately 
lead to increased earnings for U.S. ports. I can only say that it would 
allow them to compete fairly, instead of being anchored by a rule that 
is actively harmful to U.S. interests. It is, as I said at the 
beginning of this statement, only a way to open the door.
  We've heard a lot of talk about growing the economy and creating jobs 
during the last few years. But we all know, Mr. President, that such 
changes are easier to talk about than they are to accomplish. Well, Mr. 
President, here is a bill that opens the door to thousands of jobs and 
hundreds of millions of new dollars, and does it without one red cent 
of taxpayer money. It's been 110 years since the current law was 
enacted, and it's time for a change.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 668

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. FINDINGS.

       Congress finds the following:
       (1) It is in the interest of the United States--

[[Page S3846]]

       (A) to maximize economic return from the growing trade in 
     cruise ships sailings to and from Alaska by encouraging the 
     use of United States labor, supplies, berthing and repair 
     facilities, and other services, and
       (B) to encourage the growth of new enterprises including 
     the transportation of passengers on luxury cruise ships 
     between ports in Alaska.
       (2) In promoting additional economic benefits to the United 
     States from the cruise ship industry, there is a need to 
     ensure that existing employment and economic activity 
     associated with the Alaska Marine Highway System, United 
     States-flag tour boats operating from Alaskan ports, and 
     similar United States enterprises are protected from adverse 
     impact.
       (3) Cruise ship sailings to Alaska comprise a vital and 
     growing segment of the United States travel industry. Since 
     1989, the number of tourists coming to Alaska via cruise 
     ships has increased by 86 percent. With almost 500,000 
     passengers per year, Alaska has become the third most popular 
     cruise destination in the world, after the Caribbean and 
     Europe.
       (4) The cruise ship industry is expected to grow at a rate 
     of 15 percent per year over the next several years. In 1996, 
     7 new cruise ships having a combined capacity to carry over 
     13,000 passengers entered the market.
       (5) The only United States-flag ocean cruise ship in 
     service is an aging vessel operating cruises only between the 
     Hawaiian Islands. No United States-flag cruise ships are 
     presently available to enter the Alaskan trade. Thus, all 
     cruise ships carrying passengers to and from Alaskan 
     destinations are foreign-flag vessels which are precluded, 
     under current law, from carrying passengers between United 
     States ports.
       (6) The City of Vancouver, British Columbia receives 
     substantial economic benefit by providing services to cruise 
     ships in the Alaskan trade. In 1996, there were 487 Alaska-
     related voyages, with over 445,000 passengers, up from 
     389,000 in 1995. Most of the voyages stopped in Vancouver. 
     Vancouver has benefited from the cruise ship industry through 
     the direct and indirect employment of almost 2,500 people, 
     and through revenues from goods and services of approximately 
     $120,000,000 a year.
       (7) The transfer of cruise ship-based economic activity 
     from Vancouver, British Columbia to United States ports could 
     yield additional Federal revenues of nearly $100,000,000 a 
     year and additional State and local government revenues of 
     approximately $30,000,000.

     SEC. 2. FOREIGN-FLAG CRUISE VESSELS.

       (a) Definitions.--For the purposes of this section:
       (1) Cruise vessel.--The term ``cruise vessel'' means a 
     vessel of greater than 5,000 deadweight tons which provides a 
     full range of luxury accommodations, entertainment, dining, 
     and other services for its passengers.
       (2) Foreign-flag cruise vessel.--The term ``foreign-flag 
     cruise vessel'' does not apply to a vessel which--
       (A) regularly carries for hire both passengers and vehicles 
     or other cargo, or
       (B) serves residents of their ports of call in Alaska or 
     other ports in the United States as a common or frequently 
     used means of transportation between United States ports.
       (b) Waiver.--Notwithstanding the provisions of section 8 of 
     the Act of June 19, 1886 (46 U.S.C. 289) or any other 
     provision of law, passengers may be transported in foreign-
     flag cruise vessels between ports in Alaska and between ports 
     in Alaska and other ports on the west coast of the contiguous 
     States, except as otherwise provided by this section.
       (c) Coastwise Trade.--Upon a showing satisfactory to the 
     Secretary of Transportation, by the owner or charterer of a 
     United States-flag cruise vessel, that service aboard such 
     vessel qualified to engage in the coastwise trade is being 
     offered or advertised pursuant to a Certificate of Financial 
     Responsibility for Indemnification of Passengers for 
     Nonperformance of Transportation (46 App. U.S.C. 817(e)) for 
     service in the coastwise trade between ports in Alaska or 
     between ports in Alaska and other ports on the west coast of 
     the contiguous States, or both, the Secretary shall notify 
     the owner or charterer of one or more foreign-flag cruise 
     vessels transporting passengers under authority of this 
     section, if any, that the Secretary shall, within 1 year from 
     the date of notification, terminate such service. Coastwise 
     privileges granted to any owner or charterer of a foreign-
     flag cruise vessel under this section shall expire on the 
     365th day following receipt of the Secretary's notification.
       (d) Notification.--Notifications issued by the Secretary 
     under subsection (c) shall be issued to the owners or 
     charterers of foreign-flag cruise vessels--
       (1) in the reverse order in which foreign-flag cruise 
     vessels entered the coastwise service pursuant to this 
     section determined by the date of each vessel's first 
     coastwise sailing; and
       (2) in the minimum number needed to ensure that the 
     passenger-carrying capacity thereby removed from coastwise 
     service exceeds the passenger-carrying capacity of the United 
     States-flag cruise vessel which is entering the service.
       (e) Termination.--If, at the expiration of the 365-day 
     period specified in subsection (c), the United States-flag 
     cruise vessel that has offered or advertised service pursuant 
     to a Certificate of Financial Responsibility for 
     Indemnification of Passengers for Nonperformance of 
     Transportation has not entered the coastwise passenger trade 
     between ports in Alaska or between ports in Alaska and other 
     ports on the west coast of the contiguous States, then the 
     termination of service required by subsection (c) shall not 
     take effect until 180 days following the entry into the trade 
     by the United States-flag cruise vessel.
       (f) Disclaimer.--Nothing in this section shall be construed 
     as affecting or otherwise modifying the authority contained 
     in the Act of June 30, 1961 (46 U.S.C. 289b) authorizing the 
     transportation of passengers and merchandise in Canadian 
     vessels between ports in Alaska and the United States.
                                 ______