[Congressional Record Volume 143, Number 70 (Friday, May 23, 1997)]
[Senate]
[Pages S5110-S5112]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THURMOND (for himself and Mr. Murkowski):
  S. 803. A bill to permit the transportation of passengers between 
United States ports by certain foreign-flag vessels and to encourage 
U.S.-flag vessels to participate in such transportation; to the 
Committee on Commerce, Science, and Transportation.


                      THE U.S. CRUISE TOURISM ACT

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
greatly increase the economic benefits to our Nation from cruise ship 
tourism. This measure, called the United States Cruise Tourism Act, 
will implement one of the recommendations of the White House Conference 
on Travel and Tourism. I am pleased to be joined by Senator Murkowski 
in introducing this bill.
  Pleasure cruises aboard ocean-going vessels represent one of the 
fastest growing segments of our tourism industry. Over the past 5 
years, cruise ship tourism has grown by 50 percent and is expected to 
grow at a rate of 5\1/2\ percent annually over the next few years. When 
a cruise ship is in port, as much as $250,000 is spent on maintenance 
and supplies, and cruise passengers spend an average of $205 a day. 
Although 85 percent of these cruise passengers are Americans, most of 
the revenues now go to foreign destinations.
  This export of American tourist dollars is the unintended consequence 
of the outdated Passenger Vessel Services Act [PSA] of 1886. This act 
prohibits non-U.S.-flag vessels from carrying passengers between U.S. 
ports. Unfortunately, since the U.S.-flag fleet is now down to one 
cruise ship, this restriction makes passenger cruise travel between U.S 
ports virtually impossible. Today, the passenger cruise industry in the 
United States consists primarily of foreign flag vessels which, under 
current law, must sail to and from foreign ports. This prevents many of 
our mid-coast ports such as Charleston, San Francisco, Baltimore and 
others from participating in the cruise industry because of their 
distance from foreign ports. As a result, potential cruise itineraries 
on the east and west coast, the gulf coast, the Great Lakes and the 
coast of Alaska have yet to be developed.
  Mr. President, our legislation would allow our port cities and shore-
based tourism businesses to take advantage of this booming area of 
tourism while providing incentives for the rehabilitation of the U.S.-
flag cruise industry. This bill would enact a narrow waiver to the PSA 
to permit large, ocean-going, foreign-flag cruise ships to carry 
passengers between U.S. ports. Subsequently, as U.S. companies become 
attracted to the business, U.S.-flag ships will enter the market. When 
this happens, foreign vessels would be required to reduce their 
capacity to make room for more U.S. competitors. This provision also 
addresses the concern expressed by many of our shipyards. They have 
complained that the uncertainty over the continuation of the PSA was 
chilling their efforts to obtain investment in a U.S.-built cruise 
ship. If enacted, our bill would assure a market for the ships they 
build.
  Finally, Mr. President, this legislation in no way affects the Jones 
Act. The Jones Act is an entirely separate statute enacted in 1920 to 
protect our cargo fleet and assure that we have a qualified merchant 
marine in times of war. Also, this measure does not waive the PSA for 
any trade where there currently exists an American competitor. U.S. 
ferries, river boat cruises, and cruises on the Atlantic intra-coastal 
waterway would not be affected.
  Mr. President, our country has a beautiful coastline and Americans 
should not have to join the armed services or buy a yacht to see it. 
Moreover, our tourist industry is one of the most successful 
contributors to the economic growth of our Nation. We should not permit 
artificial barriers to inhibit the good work of the people in this 
industry. This legislation will remove that barrier. I urge my 
colleagues to support it.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 803

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``United States Cruise Tourism 
     Act of 1997''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) It is in the interest of the United States to maximize 
     economic return from the growing industry of pleasure 
     cruises--

[[Page S5111]]

       (A) by encouraging the growth of new cruise itineraries 
     between coastal cities in the United States, and
       (B) by encouraging the use of United States goods, labor, 
     and support services.
       (2) In maximizing the economic benefits to the United 
     States from increased cruise vessel tourism, there is a need 
     to ensure that existing employment and economic activity 
     associated with United States-flag vessels (including tour 
     boats, river boats, intracoastal waterway cruise vessels, and 
     ferries) are protected and to provide for the reemergence of 
     a United States-flag cruise vessel industry.
       (3) The pleasure cruise industry is one of the fastest 
     growing segments of the tourism industry and is expected to 
     grow at a rate of 5 percent a year over the next few years.
       (4) The United States-flag ocean cruise vessel fleet 
     consists of only a single vessel that tours the Hawaiian 
     Islands. As a result, all the cruise vessels carrying 
     passengers to and from United States ports are foreign-flag 
     vessels and the United States ports served are mostly ports 
     that are close enough to foreign ports to allow intermediate 
     calls.
       (5) Prohibiting cruises between United States ports by 
     foreign-flag vessels results in the loss of tourist dollars 
     and revenue for United States ports and greatly disadvantages 
     United States ports and coastal communities.

     SEC. 3. FOREIGN-FLAG CRUISE VESSELS.

       (a) Definitions.--In this Act:
       (1) Coastwise trade.--The term ``coastwise trade'' means 
     the coastwise trade provided for in section 12106 of title 
     46, United States Code and includes trade in the Great Lakes.
       (2) Cruise vessel.--The term ``cruise vessel'' means a 
     vessel of greater than 4,000 gross registered tons which 
     provides a full range of luxury accommodations, 
     entertainment, dining, and other services for its passengers.
       (3) Foreign-flag cruise vessel.--The term ``foreign-flag 
     cruise vessel'' does not apply to a vessel which--
       (A) provides ferry services or intracoastal waterway 
     cruises;
       (B) regularly carries for hire both passengers and vehicles 
     or other cargo; or
       (C) serves residents of the vessel's ports of call in the 
     United States as a common or frequently used means of 
     transportation between United States ports.
       (4) Repair and maintenance service.--The term ``repair and 
     maintenance service'' includes alterations and upgrades.
       (b) Waiver.--Notwithstanding the provisions of section 8 of 
     the Act of June 19, 1886 (24 Stat. 81, Chapter 421; 46 U.S.C. 
     App. 289), or any other provision of law, and except as 
     otherwise provided by this section, the Secretary of 
     Transportation (in this Act referred to as the ``Secretary'') 
     may approve the transportation of passengers on foreign-flag 
     cruise vessels not otherwise qualified to engage in the 
     coastwise trade between ports in the United States, directly 
     or by way of a foreign port.
       (c) Exceptions.--
       (1) In general.--The Secretary may not approve the 
     transportation of passengers on a foreign-flag cruise vessel 
     pursuant to this section with respect to any coastwise trade 
     that is being served by a United States-flag cruise vessel.
       (2) United states-flag service initiated after approval of 
     foreign-flag vessel.--Upon a showing to the Secretary, by a 
     United States-flag cruise vessel owner or charterer, that 
     service aboard a cruise 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 from the 
     Federal Maritime Commission (issued pursuant to section 3 of 
     Public Law 89-777; 46 U.S.C. App. 817e) for service in the 
     coastwise trade on an itinerary substantially similar to that 
     of a foreign-flag cruise vessel transporting passengers under 
     authority of this section, the Secretary shall, in accordance 
     with subsection (d)(2), notify the owner or charterer of the 
     foreign-flag cruise vessel that the Secretary will, within 3 
     years after the date of notification, terminate such service.
       (d) Termination.--
       (1) In general.--Coastwise trade privileges granted to such 
     owner or charterer of a foreign-flag cruise vessel under this 
     section shall expire on the date that is 3 years after the 
     date of the Secretary's notification described in subsection 
     (c)(2).
       (2) Order of termination.--Any notification issued by the 
     Secretary under this subsection shall be issued to the owner 
     or charterer of a foreign-flag cruise vessel--
       (A) in the reverse order in which the foreign-flag cruise 
     vessel entered service in the coastwise trade under this 
     section, determined by the date of the vessel's first 
     coastwise sailing; and
       (B) in the minimum number necessary to ensure that the 
     passenger-carrying capacity thereby removed from the 
     coastwise trade service exceeds the passenger-carrying 
     capacity of the United States-flag cruise vessel entering the 
     service.
       (3) Exception.--If, at the expiration of the 3-year period 
     specified in paragraph (1), the United States-flag cruise 
     vessel that has been offering or advertising service pursuant 
     to a certificate described in subsection (c)(2) has not 
     entered the coastwise trade described in subsection (c)(2), 
     then the termination of service required by paragraph (1) 
     shall not take effect until 180 days after the date of the 
     entry into that coastwise trade service by the United States-
     flag cruise vessel.
       (e) Requirement For Repairs In United States Shipyards.--
       (1) In general.--The owner or charterer of a foreign-flag 
     cruise vessel that is qualified to provide coastwise trade 
     service under this section is required to have repair and 
     maintenance service for the vessel performed in the United 
     States during the period that such vessel is qualified for 
     such coastwise trade service, except in a case in which the 
     vessel requires repair and maintenance service while at a 
     distant foreign port (as defined in section 4.80a(a) of title 
     19, Code of Federal Regulations (or any corresponding similar 
     regulation or ruling)).
       (2) Action if requirement not met.--
       (A) General rule.--If the Secretary determines that the 
     owner or charterer has not met the repair and maintenance 
     service requirement described in paragraph (1), the Secretary 
     shall terminate the coastwise trade privileges granted to the 
     owner or charterer under this section.
       (B) Waiver.--The Secretary may waive the repair and 
     maintenance service requirement if the Secretary finds that--
       (i) the repair and maintenance service is not available in 
     the United States, or
       (ii) an emergency prevented the owner or charterer from 
     obtaining the service in the United States.
       (f) Alien Crewmen.--Section 252 of the Immigration and 
     Nationality Act (8 U.S.C. 1282) is amended--
       (1) in subsection (a), by redesignating paragraphs (1) and 
     (2) as subparagraphs (A) and (B);
       (2) by inserting ``(1)'' immediately after ``(a)'';
       (3) in subsection (a)(1) (as redesignated), in the second 
     sentence, by inserting ``, except as provided in paragraph 
     (2), and'' after ``subsection (b),'';
       (4) by adding at the end of subsection (a)(1) (as 
     redesignated), the following:
       ``(2) An immigration officer may extend for a period or 
     periods of up to 6 months each a conditional permit to land 
     that is granted under paragraph (1) to an alien crewman 
     employed on a vessel if the owner or charterer of the vessel 
     requests the extension and the immigration officer determines 
     that the extension is necessary to maintain the vessel in the 
     coastwise trade between ports in the United States, directly 
     or by way of a foreign port.''; and
       (5) in subsection (b), by striking ``subsection (a)(1)'' 
     and inserting ``subsection (a)(1)(A)''.
       (g) Disclaimer.--
       (1) In general.--Nothing in this Act shall be construed as 
     affecting or otherwise modifying the authority contained in--
       (A) Public Law 87-77 (46 U.S.C. App. 289b) authorizing the 
     transportation of passengers and merchandise in Canadian 
     vessels between ports in Alaska and the United States; or
       (B) Public Law 98-563 (46 U.S.C. App. 289c) permitting the 
     transportation of passengers between Puerto Rico and other 
     United States ports.
       (2) Jones act.--Except as otherwise expressly provided in 
     this Act, nothing in this Act shall be construed as affecting 
     or modifying the provisions of the Merchant Marine Act, 1920.

  Mr. MURKOWSKI. Today, Mr. President, I am very pleased to join the 
senior Senator from South Carolina [Mr. Thurmond] in introducing this 
important bill. It is intended to break down a barrier that Congress 
created 111 years ago, and which has long since ceased to make sense.
  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.
  There's no magic to this; in fact, it's a very simple matter. This 
bill merely allows U.S. ports to compete in the business of offering 
homeport services to the cruise ship trade.
  The bill amends the Passenger Service Act to allow foreign cruise 
ships to operate between U.S. 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, 
ferries, or riverboats. 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.
  As my colleagues know, this bill is very similar to S. 668, a bill I 
introduced just a few weeks ago. The major difference is that that bill 
applies only

[[Page S5112]]

to cruise ships operating in Alaska, and this one applies nationwide. 
Other differences include the fact that my original bill sets a 5,000 
gross deadweight ton cut-off for vessels seeking to enter the coastwise 
trade, and this one uses a 4,000 ton limit. This bill also requires 
foreign vessels operating in the U.S. trade to effect repairs in U.S. 
shipyards. Both of these differences are positive, in my view.
  The change in tonnage will encourage U.S. ports to compete for 
business from some of the smaller vessels in the luxury cruise ship 
fleet, which continuing to protect existing U.S. tour vessels in the 
100-ton class. While there are a few riverboats in the area of 3,000 
tons, none of these operate in the open ocean cruise ship trade, and 
the bill contains other protections specifically for these U.S. 
vessels.
  The requirement for U.S. repair will assist in creating and 
maintaining even more U.S. jobs. From the standpoint of the cruise 
ships, it simply calls for the continuation of what is already a common 
practice among vessels that need work while visiting a U.S. port
  Mr. President, it isn't 1886 anymore, and it is time to change the 
current law. These days, no one is building any U.S. passenger ships of 
this type, and no one has built one in over 40 years. Instead of 
protecting U.S. jobs, the current law is a job losing proposition, as 
it prohibits U.S. cities from competing. That is absurd.
  The cash flow generated by the cruise ship trade is enormous. Most 
passengers bound for my State of Alaska fly in or out of Seattle-Tacoma 
International Airport, 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 from the cruise ship trade. 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.
  This is a market almost entirely focused on U.S. citizens going to 
see one of the United State's 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. 
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.
  Then there is the suggestion that this bill might harm smaller U.S. 
tour or excursion boats. Mr. President, that is also untrue. The 
industry featuring these smaller vessels is thriving, but it simply 
doesn't cater to the same client base as large cruise ships. The fact 
of the matter is that there is no significant competition between the 
two types of vessel, because the services they offer are in no way 
comparable. The larger vessels offer unmatched luxury and personal 
service, on-board shopping, entertainment, and so forth. The smaller 
vessels offer more flexible routes, timing, shore excursions, and other 
opportunities.
  There is one operating U.S. vessel that doesn't fit the mold: the 
Constitution, an aging 30,000-ton vessel operating only in Hawai. 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 tonnage 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. Further, the bill 
specifically prohibits any foreign vessel from participating in the 
intra-coastal trade served by these riverboats.
  Mr. President, I will not 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. That alone makes 
it good public policy, and I look forward to my colleagues' agreement 
and support.
                                 ______