[Congressional Record Volume 147, Number 13 (Wednesday, January 31, 2001)]
[Senate]
[Page S915]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 222. A bill to provide tax incentives for the construction of 
seagoing cruise ships in United States shipyards, and to facilitate the 
development of a United States-flag, United States-built cruise 
industry, and for other purposes; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise to introduce legislation designed to 
promote growth in the domestic cruise ship industry and at the same 
time enable U.S. shipyards to compete for cruise ship orders. The 
legislation would provide tax incentives for U.S. cruise ship 
construction and operation.
  Current law prohibits non-U.S. vessels from carrying passengers 
between U.S. ports. As such, today's domestic cruise market is very 
limited. The cruise industry consists predominantly of foreign vessels 
which must sail to and from foreign ports. The vast majority of cruise 
passengers are Americans, but most of the revenues now go to foreign 
destinations. That is because the high cost of building and operating 
U.S.-flag cruise ships and competition from modern, foreign-flag cruise 
ships have deterred growth in the domestic cruise ship trade.
  By some estimates, a single port call by a cruise vessel generates 
between $300,000 and $500,000 in economic benefits. This is a very 
lucrative market, and I would like to see U.S. companies and American 
workers benefit from this untapped potential. However, domestic ship 
builders and cruise operations face a very difficult, up-hill battle 
against unfair competition from foreign cruise lines and foreign 
shipyards. Foreign cruise lines, for example, pay no corporate income 
tax. Nor are they held to the same demanding ship construction and 
operating standards imposed on U.S.-flag vessel operators. Foreign 
cruise lines are also free from the need to comply with many U.S. labor 
and environmental protection laws, and U.S. health, safety, and 
sanitation laws do not apply to the foreign ships.
  The legislation I am introducing today is designed to level the 
playing field between the U.S. cruise industry and the international 
cruise industry. For example, it provides that a shipyard will pay 
taxes on the construction or overhaul of a cruise ship of 20,000 gross 
tons or greater only after the delivery of the ship.
  Under my bill, a U.S. company operating a cruise ship of 20,000 grt 
and greater may depreciate that vessel over a five-year period rather 
than the current 10-year depreciation period. The bill would also 
repeal the $2,500 business tax deduction limit for a convention on a 
cruise ship to provide a tax deduction limit equal to that provided to 
conventions held at shore-side hotels. The measure would authorize a 20 
percent tax credit for fuel operating costs associated with 
environmentally clean gas turbine engines manufactured in the U.S., and 
also allows use of investment of Capital Construction Funds to include 
not only the non-contiguous trades, but also the domestic point-to-
point trades and ``cruises to nowhere''.
  Mr. President, I truly believe that this legislation would help 
jumpstart the domestic cruise trade, benefit U.S. workers and 
companies, and promote economic growth in our ports. I strongly urge my 
colleagues to join me in a strong show of support for this effort.
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