[Congressional Record Volume 143, Number 55 (Thursday, May 1, 1997)]
[Senate]
[Pages S3873-S3874]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         BENEFITS FROM CRUISE SHIPS VISITING ALASKA LEGISLATION

  Mr. MURKOWSKI. Mr. President, yesterday I reintroduced a bill that I 
introduced some years ago. I think it is a very important measure. It 
is a measure that will unlock and open a door that Congress has kept 
barred for over 100 years. By opening this door, we are going to create 
thousands of new jobs, hundreds of millions of dollars in economic 
activity, and significant revenue for the Federal and State and local 
governments. Furthermore, that door can be opened with no adverse 
impact on any existing U.S. industry, U.S. labor interest, or on the 
environment. And it will cost the Federal Government nothing.
  There is no magic to this. In fact, it is a very simple matter. This 
bill allows U.S. seaports to compete for the ever-growing cruise ship 
trade, specifically to my State of Alaska, but all west coast ports, 
Tacoma, San Francisco, Los Angeles, and so forth, would benefit. 
Further, it would encourage the development of an all-Alaska cruise 
business as well.
  The bill I propose 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 vessel that could conceivably compete in the 
same market as U.S.-flag tour boats, ferries, vessels that carry cargo, 
et cetera.
  Finally, it provides a mechanism to guarantee that if a U.S. vessel, 
a cruise vessel, ever enters this trade in the future, steps will be 
taken to ensure an ample pool of potential passengers. Specifically, it 
would require that foreign-flag vessels of greater passenger capacity 
will be required to leave the market upon the entry of any U.S. cruise 
ship.
  People say, don't we have U.S. passenger ships? We have one, just one 
left: the Constitution, that operates off the Hawaiian Islands. The 
last U.S. passenger ship that was built to cruise ship capability, was 
the S.S. United States, nearly 40 years ago. We are simply not in the 
cruise passenger business in the United States anymore, but foreign 
ships from the Caribbean are. They move to Alaska and the west coast of 
British Columbia in the summer, where they carry passengers between 
American ports and foreign ports, but cannot carry passengers between 
U.S. ports. What we are proposing is we simply allow those vessels on 
the west coast to carry passengers from west coast U.S. ports such as 
San Francisco and Tacoma, to Alaska, and on intra-Alaska voyages.
  This is a straightforward approach to a vexing problem that deserves 
support by this body.
  Let us look at the facts. The U.S. ports currently are precluded--let 
me emphasize this--U.S. ports are precluded from competing for the 
Alaska cruise ship trade by the Passenger Service Act of--when? Of 
1886. That act bars foreign vessels from carrying passengers on one-way 
voyages between the U.S. ports. However, it is not 1886 anymore. These 
days, no one--no one is building any U.S. passenger ship of this type. 
And no one has built one in over 40 years. The S.S. United States was 
the last one.
  Let me again emphasize that it is not 1886 anymore. These days, no 
one is building any U.S.-flagged, U.S.-crewed, U.S.-built cruise ships 
of the type that are in the cruise business and sail out of Caribbean 
ports in the wintertime and out of Vancouver, British Columbia, to 
Alaska in the summertime.

  Because there are no U.S. vessels in this important trade, the only 
real effect the Passenger Service Act has been to force all vessels 
sailing to my State of Alaska to base their operations in a foreign 
port, namely Vancouver, British Columbia.
  In essence, Mr. President, what we have here is an act of Congress 
prohibiting U.S. cities from competing for thousands of jobs, and for 
hundreds of millions of business dollars. This is absurd. It is worse 
than absurd. In light of our ever-popular election year promises to 
keep the economy growing, I suggest it belongs to Letterman's top 10 
reasons why Congress oftentimes does not know what it is doing.
  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?
  This is not the first time I have introduced this legislation. When I 
began the process, 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 of 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.
  I have nothing but admiration for my friends in British Columbia and 
the city of Vancouver. They have done a fine job. But we are simply 
spiting ourselves and our own U.S. interests and it is time we looked 
at this issue rationally. The cash flow generated by this trade is 
enormous. Most of these passengers fly in and out of Seattle-Tacoma 
International Airport in Washington State, but because of this law they 
spend little time there. Instead they spend their pre- and post-sailing 
time in a Vancouver hotel, in a bus to Vancouver, at a Vancouver 
restaurant, a Vancouver coffee shop, and when their vessel sails it is 
loaded with food, fuel, general supplies, repair, maintenance needs 
taken care of--by Canadian vendors.
  There is nothing wrong with that, but this business could be in the 
United States. According to some of our estimates, the city of 
Vancouver receives benefits of well over $200 million a year. Others 
provide more modest estimates, such as a comprehensive study done 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

[[Page S3874]]

Vancouver, plus payments to Canadian vendors and employees of over $119 
million.
  If that business had taken place in the United States, in U.S. ports 
such as Tacoma or San Francisco, it would have been worth additional 
Federal, State and local tax revenues of approximately $60 million.
  I note that there is interest now in ports in South Carolina to offer 
sailings along the eastern seaboard. It is interesting to note also 
that we have already seen fit to exempt Puerto Rico from the Passenger 
Service Act, under less onerous restrictions than in this bill, so that 
foreign vessels are allowed to from the United States to the territory 
of Puerto Rico. So we have made these exceptions, they can work without 
destroying the fabric of our life, and there is no justification why 
this should not also be done for voyages from the west coast to Alaska.
  In addition to the opportunities now being shunted to Vancouver, we 
are also missing an opportunity to create entirely new jobs and 
increased income flow by developing new cruise routes between Alaska 
ports.
  The city of Ketchikan, AK, was told a few years ago that there were 
two relatively small cruise lines that were very interested in 
establishing short cruises within southeastern Alaska, and indeed, were 
interested in basing their vessels in Ketchikan. I am told such a 
business could have contributed as much as $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 most 
spectacular States of the United States, namely, Alaska, and yet we 
force them to go to another country, Canada, to do it. We are throwing 
away both jobs and money and getting nothing in return. Why is this 
allowed to happen? The answer is simple, but it is not rational.
  Although the current law is a job loser, there are those who argue 
that any change would weaken U.S. maritime interests. I submit that 
simply is not the case. For some inexplicable reason, paranoia seems to 
run deep among those who oppose this bill. They seem to feel that, by 
amending the Passenger Service Act so that it makes sense for the 
United States and would create jobs, somehow it is a threat to the 
Jones Act. That is not true. The vessels covered under the Jones Act 
haul freight, not passengers, between U.S. ports. They are required to 
be U.S. built, U.S. crewed, and U.S. documented, and because this 
protects an existing industry, we support that. But the circumstances 
for freight vessels do not exist for passenger ships.
  There is simply no connection whatsoever between the two issues. I 
have repeatedly made it 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--shipyard workers 
and certainly longshoremen, not to mention hotel and restaurant 
workers, and many others who would have a great deal to gain from this 
legislation.
  The bill has been carefully written to prevent the loss of any 
existing jobs in other trades. As I have said before, Puerto Rico 
already enjoys an exemption from the Passenger Service Act. We looked 
at that exemption--which has worked successfully--and drafted this 
effort with even more care in mind.
  Finally, there can be no suggestion that this bill might harm smaller 
U.S. tour or excursion vessels built in U.S. yards with U.S. crews. The 
industry featuring these small vessels is thriving and doing well but 
simply does not cater to the same clientele and same base as the larger 
cruise ships. For one thing, the tour boats operating in Alaska are 
much smaller. The smallest foreign flag vessel eligible under this is 
Carnival Cruise Lines Wind Star, which is about 5,700 gross deadweight 
tons. It overnights approximately 159 passengers.

  By contrast, although the largest U.S. vessel in the Alaska trade is 
rated at 138 passengers, she is less than 100 gross deadweight tons. 
This means there is a vast difference between these two vessels. The 
small U.S. vessels should be protected from foreign competition, and 
our bill does that, but it does so with the realization that not all 
markets, and not all passengers, are the same.
  The fact of the matter is that there is no significant competition 
between the two types of vessels, because the passengers inclined to 
one are not likely to be inclined to the other. The larger passenger 
vessels offer unmatched luxury, personal service, onboard shopping, 
entertainment, gaming and so forth. The smaller vessels offer more 
flexible routes, the ability to get closer to the extraordinary natural 
attractions along the way and are able to get into the smaller 
communities.
  Now Mr. President, in the spirit of full disclosure, let me 
acknowledge that there is one operating U.S. vessel that does not fit 
the mold, as I mentioned earlier. That is the Constitution, an aging 
30,000-ton vessel operating only in Hawaii. It was a U.S. flag vessel 
that was built years ago to operate in the United States. It went out 
of U.S. operation, into foreign flag service, then was refitted. It 
took action by Congress to allow it to come back into the U.S. trade.
  This is the only oceangoing-capable U.S. ship that might fit the 
description of a cruise vessel, but I question its ability to compete, 
certainly in the market with the newer cruise vessels. And I repeat, it 
is the only one. I searched for other U.S. vessels that meet or exceed 
the 5,000-ton limit in the bill, and the only ones I found that even 
approach it are the Delta Queen and the Mississippi Queen, both of 
which are approximately 3,300 tons and both of which are somewhat like 
19th century riverboats. They can operate on the Mississippi and other 
large rivers, but are entirely unsuitable for any open-ocean itinerary.
  I cannot claim this legislation would immediately lead to increased 
earnings to U.S. ports. There are advantages of operating out of 
Vancouver--the sailing time to Alaska is shorter, and so forth. But I 
can say that it would allow U.S. ports--ports like Tacoma and San 
Francisco--to compete fairly for this lucrative business.
  Instead of being anchored by a rule that is actively harmful to U.S. 
interests, as I said at the beginning, this is only a way to open the 
door so we can look at what we are losing and look at what we can gain.
  We heard a lot of talk about growing the economy and creating jobs 
during the last years, and we all know that such changes are easy to 
talk about but difficult to accomplish. Here is a bill that opens up 
the door to thousands of jobs and hundreds of millions of dollars, and 
can do it without 1 red cent of the taxpayers' money. Isn't that worth 
thinking about?
  It has been 110 years since the current law was enacted, and it is 
time for a change.

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