39–006

109TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 109–161

RECREATIONAL MARINE EMPLOYMENT ACT OF 2005

JUNE 30, 2005.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BOEHNER, from the Committee on Education and the 

Workforce, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 940] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Education and the Workforce, to whom was 

referred the bill (H.R. 940) to amend the Longshore and Harbor 

Workers’ Compensation Act to clarify the exemption for recreational vessel support employees, and for other purposes, having 

considered the same, report favorably thereon with an amendment 

and recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Recreational Marine Employment Act of 2005’’. 

SEC. 2. CLARIFICATION OF RECREATIONAL VESSEL WORKER EXEMPTION. 

The Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901 et seq.) is 

amended as follows: 

(1) Section 2 (33 U.S.C. 902) is amended—

(A) in paragraph (3)—

(i) so that subparagraph (C) reads as follows: 

‘‘(C) individuals employed by or at, or engaged in the construction or 

maintenance of, a recreational marine facility or structure;’’ and 

(ii) so that subparagraph (F) reads as follows: 

‘‘(F) individuals employed primarily to build, repair, test, maintain, accommodate, buy, sell, store, restore, transport by land, or dismantle a recreational vessel;’’; and 

(B) by redesignating paragraph (22) as paragraph (24) and inserting after 

paragraph (21) the following new paragraphs: 

2

1See Hearing on H.R. 1329, ‘‘The Recreational Marine Employment Act of 2003,’’ before the 

Subcommittee on Workforce Protections, Committee on Education and the Workforce, U.S. 

House of Representatives, 108th Congress, Second Session, Serial No. 108–69 (hereinafter 

‘‘Hearing on H.R. 1329’’). 

‘‘(22) The term ‘recreational marine facility or structure’ means a place used 

primarily to build, repair, test, maintain, accommodate, buy, sell, store, restore, 

or dismantle recreational vessels. 

‘‘(23) The term ‘recreational vessel’ means a vessel manufactured primarily 

for pleasure use.’’. 

PURPOSE

H.R. 940, the ‘‘Recreational Marine Employment Act of 2005,’’ 

clarifies the status of employees in the recreational maritime industry under the Longshore and Harbor Workers’ Compensation 

Act (‘‘LHWCA,’’ the ‘‘Longshore Act,’’ or the ‘‘Act’’). As testimony before the Subcommittee on Workforce Protections has made clear, 

current law is outdated and arbitrarily imposes inappropriate and 

illogical requirements on the domestic recreational maritime industry. This in turn puts the industry at a competitive disadvantage 

to foreign competition. H.R. 940 is intended to address the failings 

in current law by clarifying the recreational marine exemption to 

reflect the current state of the industry, the appropriate extension 

of federal workers’ compensation coverage, and the realities of the 

21st century global economy. Specifically, the bill extends the Act’s 

current law recreational marine exemption—which is based on a 

twenty-year old fixed and arbitrary standard—by focusing on the 

practical and functional operations of the recreational marine industry. 

COMMITTEE ACTION

107th Congress 

On May 22, 2002, Representative Ric Keller (R–FL) introduced 

H.R. 4811, the ‘‘Recreational Marine Employment Act of 2002.’’ The 

bill was referred to the Committee on Education and the Workforce 

Subcommittee on Workforce Protections. No action was taken on 

the bill prior to the adjournment of the 107th Congress. 

108th Congress 

On March 18, 2003, Representative Keller introduced H.R. 1329, 

the ‘‘Recreational Marine Employment Act of 2003.’’ The bill was 

again referred to the Committee on Education and the Workforce 

Subcommittee on Workforce Protections. 

The Subcommittee on Workforce Protections held a hearing on 

H.R. 1329 on July 15, 2004.1 At this hearing, the Subcommittee 

heard testimony from Kristina Hebert, Vice President of Ward’s 

Marine Electrics, a recreational marine company in Fort Lauderdale, Florida, who testified on her own behalf and on behalf of the 

Marine Industries Association of South Florida; Larry Nelson, Vice 

President of Westport Shipyard, Inc., a boat building company in 

Westport, Washington; Ian Greenway of St. Petersburg, Florida, 

owner of the commercial marine insurance company LIG Marine 

Managers; and Robert E. McGarrah, Jr., Coordinator for Workers’ 

Compensation for the AFL–CIO in Washington, DC. 

3

109th Congress 

On February 17, 2005, Representative Keller introduced H.R. 

940, the ‘‘Recreational Marine Employment Act of 2005,’’ with 15 

cosponsors, including two Democrats. H.R. 940 is substantively 

identical to H.R. 1329 as introduced in the 108th Congress. In light 

of the legislative hearing held on H.R. 1329 in July 2004, no legislative hearings were held on H.R. 940. 

On March 10, 2005, the Subcommittee on Workforce Protections 

favorably reported H.R. 940, without amendment, to the Committee on Education and the Workforce by a roll call vote of 6 to 

5. On April 13, 2005, the Committee on Education and the Workforce favorably reported the bill, as amended by an amendment in 

the nature of a substitute offered by Mr. Keller, to the House of 

Representatives by a roll call vote of 27 to 18. 

The amendment in the nature of a substitute adopted by the 

Committee retained the core provisions contained in H.R. 940 while 

addressing several concerns raised at Subcommittee markup. Specifically, the substitute amendment: (a) changed the term ‘‘principally’’ to ‘‘primarily’’ within the definitions of recreational vessel 

and recreational marine facility to more closely track statutory language defining recreational vessels; (b) changed ‘‘principally’’ to 

‘‘primarily’’ in the delineation of an employee’s duties to comport 

with statutory and regulatory language regarding the determination of an employee’s principal duties under other laws; (c) eliminated a provision within H.R. 940 that would have allowed an employer to qualify for an exemption under the Longshore Act if the 

employer was simply ‘‘in compliance’’ with state workers’ compensation laws; and (d) eliminated a provision unrelated to the 

Longshore Act that addressed the ability of non-maritime workers 

to bring tort law claims of ‘‘unseaworthiness.’’ 

SUMMARY

Congress enacted the Longshore Act to provide workers’ compensation coverage to non-seamen maritime workers working on 

navigable waters who otherwise had no coverage for injuries sustained in the course of their employment. The Act was intended to 

be the sole remedy for workers’ compensation claims for these 

workers. In 1984, Congress exempted from the Longshore Act certain employees in the recreational boating industry, specifically 

those employees who built, repaired or dismantled recreational vehicles under 65 feet in length. In doing so, Congress reasoned that: 

(a) employment in the recreational marine industry was not comparable to employment in the commercial marine industry, and 

thus such employees were not appropriately included within 

LHWCA; and (b) injuries suffered by employees during the course 

of employment in the recreational marine industry would be covered under state workers’ compensation laws. 

In the twenty years since the 1984 LHWCA amendments, the 

length of recreational vehicles has increased dramatically. H.R. 940 

is intended to update the current-law definition of recreational vessel to reflect these industry changes; rather than setting an arbitrary length limitation, H.R. 940 appropriately defines a recreational vessel with reference to the recreational purpose for 

which it is manufactured. In addition, recognizing the fundamenVerDate jul 14 2003 22:18 Jul 05, 2005 Jkt 039006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR161.XXX HR161
4

2The Committee believes that the Minority’s analysis of state workers’ compensation law 

versus federal benefits under LHWCA compared ‘‘maximum allowable’’ benefits under both regimes—such maximum benefits are provided to employees who are paid much more highly than 

those employed in the recreational marine industry. In support of the Minority’s view, during 

Committee consideration of this legislation, the Minority cited a report prepared by the Congressional Research Service (CRS). To date, the Majority has not been provided a copy of this report 

and therefore cannot speak to its merits. The Committee restates its view that under H.R. 940, 

the vast majority of injured employees will fare better—and certainly no worse—than current 

law. 3See Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917). Subsequent case law has made clear 

that a state may in fact extend its workers’ compensation system to include workers injured 

over navigable waters, resulting, at times, in cases where an employer is subject to dual coverage requirements (state workers’ compensation and the Longshore Act). 

tally different nature of the work involved and the risk entailed in 

the broader recreational marine industry (as compared to the commercial shipbuilding industry), H.R. 940 extends the Longshore Act 

exemption to include those recreational marine employees who construct or maintain recreational marine structures (such as residential docks). Importantly, however, H.R. 940 does not change current 

law with respect to state workers’ compensation—under the bill, as 

under current law, exemption from the Longshore Act is available 

only where a maritime employer’s employees are subject to coverage under state workers’ compensation law.2

COMMITTEE VIEWS

Background 

In 1917, the U.S. Supreme Court ruled that a state could not extend its workers’ compensation system to cover longshoremen injured over the navigable waters of the United States.3 Thereafter, 

Congress enacted the Longshore Act, which was intended to resolve 

the problem of worker coverage for employment activity that occurred on inland navigable waters and thus fell outside the scope 

of state workers’ compensation laws. 

The Longshore Act applies to workers loading and unloading 

cargo, harbor workers, ship repairmen and ship builders, and other 

longshore occupations. Coverage has also been extended to employees of federal contractors on overseas military, air, or naval bases; 

individuals on public works contracts performed outside the continental United States; workers employed in non-appropriated fund 

instrumentalities, such as post exchanges; and employees engaged 

in operations on the Outer Continental Shelf. 

The Longshore Act provides medical benefits, compensation for 

lost wages, and rehabilitation services to those injured during the 

course of employment or to those who contract an occupational disease related to their employment. Survivor benefits are also provided if a work-related injury causes the employee’s death. Benefits 

are paid directly by a self-insured employer, an authorized insurance carrier, or in particular circumstances, by a Special Fund administered by the Department of Labor. The Special Fund is funded by fines and penalties levied under the Act; payments by employers for each death case where there is no survivor entitled to 

the benefits; interest payments on Fund investments; and by far 

the largest source, payment of annual assessments by self-insured 

employers and insurance carriers. 

The requirement for employers to obtain insurance under the 

Longshore Act varies from situation to situation, and from state to 

state. Generally, if an employer has at least one maritime employee 

5

4See U.S. House of Representatives Report No. 92–1441, at 10–11 (1972). 

5Third-party suits are those that an injured worker may file against a party other than his 

or her employer (because of, e.g., an unsafe workplace, defective equipment, or other conditions 

that may have caused the injury). Prior to the 1972 amendments, in certain instances the third 

party could then recover its losses by bringing suit against the employer. 6See Mississippi Coast Marine, Inc. v. Bosarge, 637 F.2d 994 (5th Cir. 1981). 

working on navigable waters, then that employer is required to obtain insurance under the Longshore Act. The penalties for failing 

to insure under the Longshore Act include a fine of not more than 

$10,000, imprisonment, or both, and personal liability jointly with 

the company for any compensation or benefits which may accrue 

under Longshore with respect to an injured employee. The program 

provides over $670 million in monetary, medical and vocational rehabilitation benefits in more than 72,000 cases annually for maritime workers and various other special classes of private industry 

employees disabled or killed by employment injuries or occupational diseases. The Longshore Act has been amended ten times 

since 1927, with the most significant changes (summarized below) 

occurring in 1972 and 1984. 

The 1972 amendments 

In 1972, Congress amended LHWCA to extend federal workers’ 

compensation coverage to certain maritime workers who were injured on the landward side of the waters’ edge (thus not over navigable waters). The amendments extended LHWCA coverage to certain shore-side maritime workers injured as they went between 

ship and shore. Specifically, the 1972 amendments extended the 

Act to cover injuries occurring to workers on any adjoining pier, 

wharf, dry dock, terminal, marine railway or other adjoining area 

customarily used for loading, unloading, repairing or building a 

vessel.4 It also placed limits on third-party suits to reduce multiple 

liability by employers.5

The 1984 amendments 

Subsequent to enactment of the 1972 amendments, questions 

arose as to whether an employee would be covered under state 

workers’ compensation or LHWCA if engaged in maritime work on 

the landward side of the waters’ edge. Similarly, the 1972 amendments had not addressed whether employees working on ‘‘recreational vessels’’ were intended to be covered. Courts, however, 

had interpreted the Longshore Act to cover the pleasure boat industry, marinas, summer camps, and in some cases persons working far from navigable waters.6

In 1984, Congress amended the Act to address these uncertainties. The 1984 amendments specifically excluded certain categories 

of workers who were not engaged in maritime occupations or who 

were not exposed to maritime hazards even though they may have 

been employed by maritime employers. Specifically, the 1984 

amendments excluded from Longshore Act coverage: (1) persons 

performing clerical, data processing, and other office work exclusively; (2) individuals employed by a club, camp, recreational operation, restaurant, museum or retail outlet; (3) those employed by 

a marina but not engaged in construction work on the marina except for routine maintenance; (4) employees of suppliers, transporters or vendors who are temporarily on the premises of a covered employer but not doing the usual work of that employer; (5) 

6

7 ‘‘Serious Incidents,’’ as defined by OSHA, are those that involve lost time or work restrictions. The OSHA Recordable Incident Rates measure injuries per 100 employees as a function 

of the total number of hours worked. 8 Hearing on H.R. 1329, at 22. 

9 Id. 

aquaculture workers; and (6) individuals employed to build, repair, 

or dismantle recreational vessels under sixty-five feet in length. 

Change in the recreational marine industry

Since the 1984 amendments, workers employed to build, repair 

or dismantle recreational vessels under 65 feet in length have been 

excluded from coverage under the Longshore Act. Workers working 

on vessels—recreational or otherwise—of 65 feet or more have been 

subject to the Act’s coverage. In the past 20 years, however, there 

has been a tremendous growth in the number of recreational boats 

built as well as an increase in the physical size of recreational 

boats sold in the United States. Indeed, presently, there are nearly 

400,000 boats in the United States measuring 65 feet in length or 

longer. 

The marina and boatyard industries maintain that the hazards 

to which employees in the recreational marine industry are exposed 

are more similar to those found in the general construction industry than those found in commercial ship building and shipyard operations. Data from the Occupational Safety and Health Administration (OSHA) support industry’s position that recreational marine work is far different than commercial work. For example, for 

2002, OSHA data indicates that the serious incident rate for the 

recreational marine industry is 2.35, whereas the serious incident 

rate for the commercial industry is 11.1.7

In testimony before the Subcommittee on Workforce Protections, 

Ian Greenway, president of LIG Marine Managers, a provider of 

commercial marine insurance, refuted the notion that there was an 

increased safety risk for boats greater than 65 feet in length which 

justifies the exorbitant expense of Longshore coverage. Mr. Greenway testified that there is no difference in the risks associated with 

repairing the plumbing, air conditioning, or radio on a 75-foot recreational boat as compared to a 65-foot recreational boat.8 He further testified that current insurance data demonstrate that claims 

for these larger vessels are significantly lower: for example, claims 

for workers on vessels of 65–150 feet are at least 38 percent lower 

than those on vessels under 65 feet.9

Global competition 

Any company, marina, boatyard, or subcontractor that services 

recreational boats 65 feet in length or longer must obtain insurance 

under the Longshore Act. The Committee is concerned that this 

has forced many small marinas to obtain both Longshore and state 

workers’ compensation coverage because of the uncertainty of who 

is covered and who is not. 

The marina and boatyard industry estimates that one in five 

boat projects has migrated from the U.S. to Canada as a direct result of the increased cost of doing business in the U.S. Likewise, 

the industry in South Florida has seen a large but undocumented 

number of jobs move to the Bahamas. The evidence suggests that 

Longshore Act requirements put U.S. businesses at a competitive 

7

10 Id. at 11. 11 Id. at 9. 12 Id. at 15. 

disadvantage to Canadian foreign competition resulting in domestic 

job loss. 

In testimony before the Subcommittee on Workforce Protections, 

small business owner Kristina Hebert noted that because of the 

high costs of purchasing Longshore insurance, U.S. businesses have 

experienced negative consequences in competing with companies in 

the Bahamas and Caribbean. As Ms. Hebert testified, one of the 

main reasons costs are lower is that ‘‘employers there do not have 

to pay the extremely high cost of Longshore coverage and can 

therefore outbid American businesses.’’ 10

It has been estimated that it is nearly three times more expensive to insure for the same risk under the Longshore Act than 

under applicable state workers’ compensation systems. Domestic 

boat builders maintain that the duplicative and added cost of the 

Longshore Act premiums hinders their ability to expand their 

workforces. At the July 2004 hearing, Ms. Hebert testified that employers such as Ward’s Marine Electric would save approximately 

$200,000 a year by not having to purchase the unnecessary and duplicative Longshore insurance and agreed with other witnesses that 

this money could ‘‘instead be used to expand our services, increase 

our employees’ wages, and hire more skilled workers.’’ 11 Finally, as 

Larry Nelson, vice president of administration for Westport Shipyard in Westport, Washington explained to the Subcommittee, 

‘‘[B]y switching to state workers’ compensation coverage, which is 

two to four times less expensive as Longshore coverage, [ ] small 

businesses would in many instances use the savings to expand 

their businesses, expand their workforces and update and enhance 

their production processes.’’ 12

Conclusion 

H.R. 940 clarifies and extends exemption from the Longshore Act 

across the broad range of the recreational marine industry. The 

Committee is concerned that since enactment of the 1984 amendments, the recreational marine industry has seen rapid growth in 

the number of vessels 65 feet or longer, growth which threatens the 

vitality and integrity of the 1984 recreational vessel exclusion. The 

bill reflects the Committee’s view that the recreational marine industry is fundamentally different than the commercial shipbuilding 

industry, irrespective of any arbitrary ‘‘footage’’ limitation applied 

to any single vessel. Finally, H.R. 940 responds to the intense competitive nature of the recreational marine industry: the bill would 

help restore U.S. jobs in the recreational boating industry that 

have been lost to foreign competition overseas, while maintaining 

all existing state remedies and workers’ compensation protections. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title. 

This act may be cited as the ‘‘Recreational Marine Employment 

Act of 2005.’’ 

8

13The general provisions of the U.S. Code applicable to vessels and seamen define ‘‘recreational vessel’’ at 46 U.S.C. § 2101(25). The Department of Labor has also used this terminology in regulations implementing the Longshore and Harbors Workers’ Compensation Act. See 

20 C.F.R. § 701.301(a)(12)(iii)(F) (1985) (defining recreational vessel as one operated primarily 

for pleasure). 14See, e.g., 29 C.F.R. § 541.700 (defining ‘‘primary duty’’ under Fair Labor Standards Act). 

Section 2. Clarification of recreational vessel worker exemption. 

Section 2 amends section 2(3) of the Longshore and Harbor 

Workers’ Compensation Act to exempt from Longshore Act coverage: (a) individuals who are employed by or at, or who are engaged in the construction or maintenance of, a recreational marine 

facility or structure; and (b) individuals who are employed primarily to build, repair, test, maintain, accommodate, buy, sell, 

store, restore, transport by land, or dismantle a recreational vessel. 

Section 2 defines a ‘‘recreational marine facility or structure’’ as ‘‘a 

place used primarily to build, repair, test, maintain, accommodate, 

buy, sell, store, restore, or dismantle recreational vessels’’ and defines a ‘‘recreational vessel’’ as a vessel, irrespective of size, that is 

‘‘manufactured primarily for pleasure use.’’ 

EXPLANATION OF AMENDMENTS ADOPTED IN COMMITTEE

The Committee adopted an amendment in the nature of a substitute offered by Representative Keller described herein. 

The amendment in the nature of a substitute adopted by the 

Committee retained the core provisions contained in H.R. 940. The 

substitute changed the term ‘‘principally’’ to ‘‘primarily’’ within the 

definition of recreational vessel and recreational marine facility to 

more closely track statutory language defining recreational vessels.13 It similarly changed ‘‘principally’’ to ‘‘primarily’’ in the delineation of an employee’s duties to comport with common statutory 

and regulatory language regarding the determination of an employee’s principal duties.14

The substitute eliminated a provision within H.R. 940 that would 

have allowed an employer to qualify for an exemption under the 

Longshore Act if that employer was ‘‘in compliance with’’ state 

workers’ compensation coverage. Under current law, an employer 

may qualify for an exemption from the Longshore Act only if its 

employees are subject to state workers’ compensation coverage. If 

no state workers’ compensation coverage is in place then the employer is required to provide Longshore coverage. Concern was 

raised at Subcommittee markup that the ‘‘in compliance with’’ language contained in H.R. 940 as introduced may have resulted in 

some workers falling through a ‘‘gap’’ in state workers’ compensation and Longshore Act coverage. The amendment removes the 

workers’ compensation language that may have inadvertently created such a gap and thus retains current law in this regard. 

Finally, the substitute eliminated a provision of the bill unrelated to the Longshore Act that addressed the ability of non-maritime workers to bring tort law claims of ‘‘unseaworthiness.’’ This 

provision raised substantive concern at Subcommittee markup; as 

it was not fundamentally related to the necessary Longshore Act 

reforms that H.R. 940 is intended to make, this provision was 

dropped in the substitute. 

9

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1, the Congressional Accountability Act (CAA), requires a description of the application of 

this bill to the legislative branch. H.R. 940 clarifies the status of 

employees in the recreational maritime industry under the 

Longshore and Harbor Workers’ Compensation Act (‘‘LHWCA,’’ the 

‘‘Longshore Act,’’ or the ‘‘Act’’). The bill does not restrict legislative 

branch employees from the benefits of this legislation. 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget & Impoundment Control 

Act requires a statement of whether the provisions of the reported 

bill include unfunded mandates. The Committee received a letter 

regarding unfunded mandates from the Director of the Congressional Budget Office and as such the Committee agrees that the 

bill does not contain any unfunded mandates. See infra.

10


Insert offset folio 11 here HR161.001
11


Insert offset folio 12 here HR161.002
12

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

body of this report. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the House of Representatives and section 308(a) of the Congressional Budget Act of 1974 and with respect to requirements of 

clause 3(c)(3) of rule XIII of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the Committee 

has received the following cost estimate for H.R. 940 from the Director of the Congressional Budget Office:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 29, 2005. 

Hon. JOHN A. BOEHNER, 

Chairman, Committee on Education and the Workforce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 940, the Recreational Marine Employment Act of 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Christina Hawley Sadoti. 

Sincerely, 

ELIZABETH M. ROBINSON

(For Douglas Holtz-Eakin, Director). 

Enclosure. 

H.R. 940—Recreational Marine Employment Act of 2005

H.R. 940 would amend the Longshore and Harbor Workers’ Compensation Act to clarify the exemption for certain workers in the 

shipbuilding industry. Current law requires special workers’ compensation coverage for that industry, with an exemption for employees of companies that build boats less than 65 feet in length. 

This bill would expand the exemption to all workers in the recreational marine industry, regardless of the length of the vessel. 

Most of the insurance premium payments and workers’ compensation benefits are paid to and from private insurance companies. However, the Department of Labor (DOL) oversees an account 

that assesses fines and penalties, makes annual assessments of authorized private insurance carriers, and pays benefits to workers in 

special circumstances. DOL estimates that payments related to the 

recreational marine industry into and out of this special fund 

amount to less than $1 million annually. Therefore, CBO estimates 

the effects of this legislation on mandatory spending and receipts 

would be insignificant. 

H.R. 940 contains no new private-sector or intergovernmental 

mandates as defined in the Unfunded Mandates Reform Act and 

would impose no significant costs on state, local, or tribal governVerDate jul 14 2003 22:18 Jul 05, 2005 Jkt 039006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR161.XXX HR161
13 

ments. Under current law, employers in the recreational marine industry must purchase insurance required by the Longshore and 

Harbor Workers’ Compensation Act. This bill would shift that coverage to policies meeting the requirements of state laws governing 

workers’ compensation. 

This estimate was prepared by Christina Hawley Sadoti (for federal costs), Nabeel Alsalam (for the private-sector impact), and Leo 

Lex (for the state and local impact). This estimate was approved 

by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c) of House Rule XIII, the goal of 

H.R. 940 is to clarify the status of employees in the recreational 

maritime industry under the Longshore and Harbor Workers’ Compensation Act (‘‘LHWCA,’’ the ‘‘Longshore Act,’’ or the ‘‘Act’’). The 

Committee expects the Department of Labor to implement the 

changes to the law in accordance with these stated goals. 

CONSTITUTIONAL AUTHORITY STATEMENT

H.R. 940 amends the Longshore Harbor Workers’ Compensation 

Act, and thus falls within the scope of Congressional powers under 

Article I, section 8, clause 3 and Article III, section 2, clause 1 of 

the Constitution of the United States to the same extent as does 

the Longshore Act. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 940. 

However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its report 

a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SECTION 2 OF THE LONGSHORE AND HARBOR 

WORKERS’ COMPENSATION ACT 

* * * * * * * 

DEFINITIONS

SEC. 2. When used in this Act— 

(1) * * * 

* * * * * * * 

14 

(3) The term ‘‘employee’’ means any person engaged in maritime 

employment, including any longshoreman or other person engaged 

in longshoring operations, and any harbor-worker including a ship 

repairman, shipbuilder, and ship-breaker, but such term does not 

include— 

(A) * * * 

* * * * * * * 

ø(C) individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance);¿ 

(C) individuals employed by or at, or engaged in the construction or maintenance of, a recreational marine facility or structure; 

* * * * * * * 

ø(F) individuals employed to build, repair, or dismantle any 

recreational vessel under sixty-five feet in length;¿ 

(F) individuals employed primarily to build, repair, test, 

maintain, accommodate, buy, sell, store, restore, transport by 

land, or dismantle a recreational vessel; 

* * * * * * * 

(22) The term ‘‘recreational marine facility or structure’’ means a 

place used primarily to build, repair, test, maintain, accommodate, 

buy, sell, store, restore, or dismantle recreational vessels. 

(23) The term ‘‘recreational vessel’’ means a vessel manufactured 

primarily for pleasure use. 

ø(22)¿ (24) The singular includes the plural and the masculine 

includes the feminine and neuter. 

(15)

1See page 75, ‘‘Adequacy of Earnings Replacement in Workers’ Compensation Programs, A 

Report of the Study Panel on Benefit Adequacy of the Workers’ Compensation Steering ComContinued

MINORITY VIEWS 

We oppose H.R. 940, the ‘‘Recreational Marine Employment Act 

of 2005.’’ The effect of this legislation is to substantially diminish 

the income and living standards of injured workers, too often to 

poverty levels; and to create much greater uncertainty and consequent litigation regarding the parameters of the Longshore and 

Harbor Workers’ Compensation Act. 

PROBLEMS WITH H.R. 940 AS REPORTED BY COMMITTEE

H.R. 940 Imposes Substantial Cuts in Benefits for Injured Workers 

While State benefits typically compensate workers at a rate of 

two-thirds of their weekly income, States typically have much 

lower benefits ceilings. As consequence, well paid injured workers, 

such as the highly skilled workers who may be expected to be employed building multi-million dollar yachts, suffer a much greater 

loss of income under State workers’ compensation laws than they 

do under the Longshore Act. 

According to information provided by CRS, a worker who earns 

$1200 a week ($60,000 a year assuming the person takes two 

weeks off) who is totally disabled would receive a benefit of $800 

a week under the Longshore Act. By contrast, the same worker 

under Florida’s workers’ compensation law would only receive $626 

a week, almost half of their former income. In North Carolina, the 

same worker would only receive $688 a week under state law. In 

Tennessee, the worker would only receive $618 a week under state 

law. In Mississippi that worker would have only received $341 a 

week, and in Georgia would only receive a benefit of $425 a week. 

The Longshore Act also pays more for ‘‘scheduled injuries’’ which 

are injuries to specific body parts included in a ‘‘schedule’’ in the 

workers’ compensation statute. For the loss of an arm at the shoulder, for example, a marina worker would receive $321,603 under 

the Longshore Act. For an identical injury, however, a worker 

would only receive $121,100.60 in South Carolina and $90,704.39 

in the state of Washington. 

According to the National Academy of Social Insurance, in 1998 

the average temporary total disability benefit payment in sixteen 

states (Alabama, Iowa, Kentucky, South Carolina, Nebraska, Oklahoma, Maine, North Dakota, Idaho, New Mexico, Georgia, Louisiana, Kansas, South Dakota, Montana and Mississippi) is below 

the poverty threshold for a family of four. In addition, Utah and 

Indiana benefits were right at the poverty line for average temporary total disability weekly compensation.1

16

mittee,’’ National Academy of Social Insurance, H. Allan Hunt, Editor, W.E. Upjohn Institute 

for Employment Research, 2004. 

Finally, unlike the Longshore program, not a single state workers’ compensation program annually indexes benefits for inflation. 

Hence, the disparity between what an injured worker and family 

would be awarded under current law, in contrast to H.R. 940, increases over time to the further detriment of injured workers and 

their families. 

H.R. 940 Exempts Those Working on Commercial Vessels from 

Longshore Coverage 

Although the sponsors of H.R. 940 claim the bill only effects recreational vessels, it is much broader. The bill exempts individuals 

employed by or at or engaged in construction or maintenance of a 

recreational marine facility. A recreational marine facility is defined as ‘‘a place used primarily to build, repair, test, maintain, accommodate, buy, sell, store, restore or dismantle a recreational vessel.’’ If a shipyard is deemed to primarily build or repair recreational vessels, regardless of the size of those vessels, then that 

yard is exempt from the Longshore Act regardless of the fact that 

it may also do substantial work on commercial vessels. 

The bill exempts ‘‘individuals employed primarily to build, repair, 

test, maintain, accommodate, buy, sell, store, restore, transport by 

land or dismantle a recreational vessel.’’ A worker who works primarily on recreational vessels is exempt from Longshore coverage 

even if the employee is injured while working on a commercial vessel. 

Anyone employed at a recreational marine facility is exempt even 

if they are working on a commercial vessel; and any employee who 

works primarily on recreation vessels is exempt even if they are 

working at a commercial shipyard on a commercial vessel. 

H.R. 940 Exempts Workers who Have Always Been Covered by the 

Longshore Act Since Its Inception 

Those who construct marinas, pile drivers and carpenters, have 

been covered by the Longshore Act since it was enacted in 1927. 

When recreational marinas were exempted in 1984, such employees 

were explicitly excluded from the scope of that exemption. No evidence has ever been offered to the Committee that this work has 

gotten safer or otherwise should be exempted from the Longshore 

Act. Nevertheless, H.R. 940 exempts workers engaged in construction of a recreational marine facility. 

H.R. 940 Is Unduly Ambiguous Regarding the Size and Definition 

of a Recreational Vessel 

Recreation vessel is defined as a vessel ‘‘manufactured primarily 

for pleasure use’’ without regard to the size of the vessel. Ships 

that can only be constructed or repaired in dry docks on navigable 

waters can nevertheless be deemed recreational vessels. A ship 

that is also used for commercial purposes is nevertheless a recreational vessel if it is used primarily for pleasure use. A ship that 

is used exclusively for commercial use may nevertheless be deemed 

a recreational vessel if the ship was manufactured primarily for 

17

2See ‘‘Statement of Hon. Ric Keller, a Representative in Congress from the State of Florida,’’ 

in H.R. 1329, Recreational Marine Employment Act of 2003, Hearing Before the Subcommittee 

on Workforce Protections of the Committee on Education and the Workforce, U.S. House of Representatives, 108th Congress, 2nd Session, July 15, 2004, Serial No. 108–69, at page 4.

pleasure use. What is meant by ‘‘pleasure use’’ is also uncertain. 

Is a cruise liner operated by Carnival Lines a vessel that is operated primarily for pleasure use? What about a yacht owned by a 

corporation that is used partly to woo customers and partly for the 

relaxation of executives? How does one determine whether a large 

yacht will be used as a charter boat, and if so, is it a vessel primarily for pleasure use? 

The Burdens Imposed on Injured Workers by H.R. 940 Significantly 

Outweigh the Bill’s Purported Benefits 

The justification offered by the Republicans for enacting H.R. 940 

is that the reduction in premiums will better enable recreational 

marinas and recreational yacht builders to compete with foreign 

competition. However, according to the author of the bill, Mr. Keller, the ‘‘employers in the recreational marine industry would save 

an average of $99,000 per year if they were exempt from the 

Longshore Act.’’ 2 The estimate for these savings is based on a survey that has never been entered into the record. Even assuming 

the estimate is accurate, it hardly begins to close the gap between 

American labor costs and those of Carribean and Chinese workers 

with whom American yacht builders and marinas compete. In addition, when one considers that a single yacht that is sixty-five feet 

or more may sell for millions of dollars, the hardships imposed by 

the bill upon workers are not justifiable. 

GEORGE MILLER. 

MAJOR OWENS. 

RUBE ́ N HINOJOSA. 

DALE E. KILDEE. 

DANNY K. DAVIS. 

ROBERT C. ‘‘BOBBY’’ SCOTT. 

ROBERT ANDREWS. 

RUSH HOLT. 

TIMOTHY BISHOP. 

DENNIS KUCINICH. 

RAU ́ L M. GRIJALVA. 

JOHN TIERNEY.

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