[Congressional Record Volume 143, Number 148 (Wednesday, October 29, 1997)]
[Extensions of Remarks]
[Pages E2114-E2115]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF A BILL TO ENCOURAGE THE SALE OF LARGE PLEASURE BOATS

                                 ______
                                 

                         HON. E. CLAY SHAW, JR.

                               of florida

                    in the house of representatives

                      Wednesday, October 29, 1997

  Mr. SHAW. Mr. Speaker, today I am introducing a bill that would 
greatly enhance the international yachting industry in the United 
States.
  Most people are unaware how the sale or even the mere presence of 
large foreign-owned pleasure boats docked at a domestic port 
contributes to the local economy. A single large luxury boat can 
literally pump tens of thousands of dollars into the local economy a 
month. For example, the cost of supporting a crew, docking fees, boat 
repairs, supplies, and other related expenditures while the boat is 
moored at a domestic marina all help the economy and create jobs. 
Attracting these types of vessels to our shores is therefore beneficial 
to the economy. In fact, in my congressional district, a significant 
segment of the local economy is based on the recreational boating trade 
and its attendant services.
  Unfortunately, current law and customs regulations as applied to 
large yachts have the unintended consequence of discouraging the sale 
of these vessels domestically. This is primarily for two reasons. 
First, when the yacht is imported into the United States for sale, the 
duty must be paid immediately, whether the yacht is eventually sold or 
not. This requirement is onerous for the yacht seller, because if the 
yacht is not sold, he or she cannot get a timely or full refund of the 
duty. This is due to the lengthy procedure--9 months to a year--that 
the Customs Service administrative process takes. If the value of the 
yacht exceeds $1 million, the loss of funds to the seller can be quite 
substantial.
  Second, there is an old maxim among boaters that ``every boat is for 
sale.'' Consider this

[[Page E2115]]

scenario: a foreign boatowner enters U.S. waters, without intending to 
sell his or her boat. An interested buyer propositions the foreign 
owner, and informal negotiations ensue. Once the owner of the foreign 
boat offers the vessel for sale--and this sometimes can be a gray 
area--if a duty has not been paid on the boat, it can be immediately 
seized by the Customs Service. While such actions by the Customs 
Service are rare, this policy has a chilling effect on potential 
foreign boat sellers interested in entering the country because they 
are fearful their boats will be seized and impounded even if they 
casually talk to someone interested in purchasing their boat. To avoid 
this risk, some of these sellers conclude the sale of the boat 
offshore, where no duty is paid and no economic benefits are realized 
for the local economy.
  My bill would remedy this problem by deferring payment of the duty on 
large pleasure boats until after the sale has been consummated. In 
order to ensure that the duty is paid when the boat is sold, the 
foreign seller would be mandated to post a bond, the value of which 
would be twice the amount of the duty. Because the value of the bond 
would be twice the duty on the boat the Federal Government would be 
virtually guaranteed of receiving its duty. Moreover, I have narrowly 
tailored this legislation so it applies only to large pleasure boats 
that are intended to be sold at domestic boat shows. I am hopeful this 
provision has the effect of not only promoting America's boat shows--
which are among the largest and best in the world--but also ensuring 
the sale of these boats occur in an orderly setting.
  Mr. Speaker, south Florida is the boating capital of the world. My 
bill helps make our ports and boat shows more attractive to 
international yacht sellers. Because this type of economic activity is 
highly beneficial to the economy, I urge my colleagues to join me in 
supporting this legislation.

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