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[Senate Report 106-396]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 786
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-396
_______________________________________________________________________

                                     

                                                       
                    UNITED STATES CRUISE VESSEL ACT

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1510

 

               September 6, 2000.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred sixth congress
                             second session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA SNOWE, Maine                 JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                       Mark Buse, Staff Director
                   Ann H. Choiniere, General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                Gregg Elias, Democratic General Counsel

                                                       Calendar No. 786
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-396

======================================================================

 
                     UNITED STATES CRUISE VESSEL ACT

                                _______
                                

               September 6, 2000.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1510]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1510) to revise the laws of the 
United States pertaining to United States cruise vessels, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment, in the nature of a 
substitute, and recommends that the bill, as amended, do pass.

                          Purpose of the Bill

  The bill provides American companies, American workers, and 
American ports with increased opportunity to compete in the 
United States cruise market. By doing so, it would ultimately 
give consumers greater choice in domestic cruise destinations 
and allow more Americans to visit our nation's port cities. The 
bill allows U.S.-owned foreign-built cruise vessels to enter 
the domestic market for a limited time if the operators agree 
to build replacement vessels in the United States. This would 
allow new companies to enter the domestic market with existing 
vessels and immediately increase the size of the U.S. 
commercial fleet, thus providing new jobs for merchant 
mariners.
  Further, by requiring operators to build new vessels in the 
United States, the bill would create much needed work for U.S. 
shipyards while creating a fleet of modern and efficient U.S.-
flagged cruise vessels.

                          Background and Needs

  Subject to certain limited exceptions, the provisions of the 
law known as the Passenger Vessel Services Act (PVSA) (section 
8 of the Act of June 19, 1886) and section 12106 of title 46, 
United States Code, provide that only those vessels built in 
the United States and continuously owned by U.S. citizens and 
documented in the U.S. may transport passengers in the 
coastwise trade of the United States (between U.S. ports). The 
law was enacted in a time when maritime transportation was a 
significant mode of both domestic and international 
transportation. The law was intended to prevent U.S.-based 
companies from facing strong competition in the domestic market 
from maritime nations such as Great Britain. The law did not 
address vacation cruising as no market existed at that time.
  The Passenger Vessel Services Act has not been interpreted to 
restrict domestic port calls as long as the domestic port call 
is part of a trip that includes foreign destinations and the 
U.S. port calls are intermediary stops. This means that 
foreign-flagged vessels are currently entitled to make as many 
U.S. port calls as they choose, provided that it is part of an 
international route and that passengers who embark at a U.S. 
port do not permanently disembark at a different U.S. port. 
Additionally, the U.S. Customs Service has interpreted the 
Passenger Vessel Services Act to allow a foreign vessel to make 
as many intermediary U.S. port calls as it chooses, and 
disembark passengers at a different U.S. port, as long as the 
vessel makes a port call at a distant foreign port such as 
Aruba.
  One of the exceptions to the PVSA is the Puerto Rico 
Passenger Ship Act (Public Law 98-563) which allows vessels not 
qualified to engage in the coastwise trade to carry passengers 
between U.S. ports and Puerto Rico, and between Puerto Rico 
ports, if no similar coastwise trade qualified vessels are 
engaged in that trade. Under this exception, the unqualified 
vessels must exit that trade 270 days after similar coastwise 
trade qualified vessels enter that trade. This exemption, 
however, has not been widely utilized.
  Following World War II, the nature of maritime travel changed 
significantly as both domestic and transoceanic flights became 
more common and affordable. Air travel provided new competition 
for passenger vessels. With dwindling passengers, some vessel 
operators started to package cruising more as a vacation at sea 
than a mode of travel. By the mid-1970's the last regularly 
scheduled transoceanic passenger service had ceased.
  Companies had to do something with now-empty ships. Cruises 
to a few tropical ports slowly became popular. The first 
passenger ship specifically built for warm-weather cruising was 
introduced in 1970 by Carnival Cruise Lines. From there, the 
industry grew rapidly and has boomed since the mid-1980's when 
the first megaships were introduced to the market.
  The cruise ship industry is largely a North American 
phenomenon, and more than 80 percent of the approximately five 
million passengers traveling are North Americans. The cruise 
ship market has expanded slightly in the Mediterranean and very 
slightly in the Far East. In Europe there are a large number of 
smaller passenger vessel services operating in the domestic or 
car ferry markets, but these vessels tend to provide 
transportation rather than entertainment and tourism. In large 
part, the majority of cruise vessels operate from one of three 
cities: Miami departing for Caribbean, Mexican, and Central and 
South American destinations; Los Angeles for West Coast Mexican 
and Central American destinations; and Vancouver, British 
Columbia, for seasonal Alaskan tours. However, recently there 
has been increased usage of other U.S. ports as departure 
points.
  While there are numerous small- to medium-sized coastwise 
trade qualified vessels carrying passengers between U.S. ports, 
there is only one large coastwise trade qualified cruise ship 
engaged in that trade. The U.S.S. Independence, a 46-year old 
cruise ship, operates among the Hawaiian Islands. The U.S.S. 
Independence will soon be replaced by a foreign-built vessel in 
accordance with an initiative enacted as part of the Department 
of Defense Appropriations Act for Fiscal Year 1998. Also as 
part of this initiative, American Classic Voyages (ACV), which 
owns and operate the Independence, has a contract for two new 
large cruise vessels which will enter the Hawaiian market in 
2003 and 2004.
  With the exception of ACV's pilot project, growth in the 
domestic cruise ship trade has been deterred due to the higher 
costs of building and operating U.S.-flag cruise ships and 
competition from modern, foreign-flag cruise ships engaged in 
cruises to nowhere and international cruises. While many cruise 
ship operators are headquartered in the United States because 
of the size of the market, almost all cruise ship operators 
have registered their ships under flag-of-convenience 
registries such as Panama, Liberia, and the Bahamas. Operating 
under a flag-of-convenience provides the cheapest maritime 
operating structure. Ship operators are only required to pay 
registration fees, and do not have to pay any U.S. or flag-
state taxes on income derived through operations.
  Safety and labor standards on flag-of-convenience vessels are 
dictated by International Maritime Organization (IMO) safety 
standards that are agreed to by the flag state. Implementation 
of those standards is routinely delegated to private companies 
that provide inspections (commonly referred to as 
classification societies). Labor relations are usually 
privatized, and labor standards are dictated by International 
Labor Organization (ILO) labor standards treaties that are 
agreed to on an international basis.
  For many years, numerous U.S. port, travel, tourism, and 
business associations, and some vessel repair shipyards have 
touted the economic benefits of U.S. port visits by modern 
cruise ships. These groups have lobbied for changes in U.S. law 
that would stimulate growth in the industry by allowing 
foreign-flag cruise ships to enter the domestic market, provide 
incentives to build and operate U.S. flag cruise ships, or 
both. The provisions of the bill reflect the Committee's 
interest in structuring a compromise which would stimulate the 
domestic cruise market, while at the same time, ensure maximum 
benefit for the U.S. maritime industry.
  During consideration of S. 1510, members of the Committee 
expressed concern regarding the possible impact of the measure 
on cruise ship construction projects currently under 
development. Therefore, the provisions of the bill are limited 
in duration and restrict operation of foreign-built vessels in 
the domestic market, as well as provide the strict requirement 
for the Secretary of Transportation to ensure that the 
operation of a foreign-built vessel does not harm the coastwise 
business of any U.S.-built vessel operator. It is the view of 
the Committee that the impact on these projects is minimal.
  The Committee would expect the Secretary to act upon 
submitted applications for reflagging a vessel under the bill 
in a timely manner. The bill clearly restricts the ability of 
an applicant to transfer applications and does not confer a 
property right through the filing of applications. The bill 
does not set a time for completing the application process or 
receiving a certificate of documentation. The Committee expects 
that applicants should have a reasonable period of time to 
complete an application, given the complexity of such a task. 
The Committee realizes if applications are allowed to linger 
without action that the market would be subject to unrealistic 
uncertainties. However, the Committee does want to ensure that 
operators applying to the Secretary for permission to reflag a 
vessel into the domestic market are afforded ample time to 
complete negotiations on a foreign-built vessel and new U.S.-
built vessels.
  Additional concern was expressed during consideration of the 
bill that the market would be flooded by unqualified operators 
who cannot meet the construction requirements contained in the 
bill. The Committee addressed this concern by including 
language requiring all operators to meet the same requirements 
of an operator receiving a title XI maritime loan guarantee 
under title XI of the Merchant Marine Act, 1936 (46 U.S.C. App. 
1271 et seq.). The review of all applications required under 
section 103(2)(a) of the bill would ensure that the market does 
not become flooded to the point that operators of U.S.-built 
vessels cannot compete, and would help ensure that parties 
seeking to enter the domestic market have the requisite 
expertise and financial strength to operate a U.S.-flagged 
cruise line.

                          Legislative History

  Three bills were introduced during the 105th Congress that 
would have allowed foreign-flag vessels access to the domestic 
trade, and one bill was introduced allowing foreign-built 
vessels to be reflagged for use in the domestic trade under 
certain conditions. The provisions of both bills were patterned 
after the Puerto Rico exception. S. 668, a bill to increase 
economic benefits to the United States from the activities of 
cruise ships visiting Alaska, introduced by Senator Murkowski 
on April 30, 1997, would have allowed foreign-flag cruise ships 
of at least 5,000 gross tons displacement to transport 
passengers between ports in Alaska and between Alaska and other 
west coast U.S. ports until the Secretary of Transportation 
determined that U.S.-flag cruise ship service was available.
  S. 803, the United States Cruise Tourism Act of 1997, 
introduced by Senator Thurmond (cosponsored by Senators 
Murkowski, Chafee, and McCain) on May 23, 1997, would have 
allowed foreign-flag cruise ships of at least 4,000 gross tons 
displacement to transport passengers between ports in the U.S. 
until the Secretary of Transportation determined that U.S.-flag 
cruise ships were available. It would have further required 
such cruise ships to be repaired in the U.S. and would have 
allowed foreign-flag cruise ship alien crew members to extend 
their permits to land in the U.S.
  Senator Hutchison chaired a Surface Transportation and 
Merchant Marine Subcommittee hearing on S. 668, S. 803, and the 
domestic cruise ship trade, on October 21, 1997. 
Representatives of the Cruising America Coalition and the U.S. 
maritime industry provided testimony.
  Additionally, Senator Breaux introduced S. 2290 on July 10, 
1998. S. 2290 would have authorized the Secretary of 
Transportation to allow foreign-built cruise ships into the 
domestic trade if they are U.S.-flagged and replaced with U.S.-
built, U.S.-flagged cruise ships. S. 2290 would have also 
prohibited competition between U.S.-built and foreign-built 
U.S.-flag cruise ships on the same trade route; prohibited 
foreign-built U.S.-flag cruise ships from operating between or 
among the Hawaiian islands; allowed foreign-built U.S.-flag 
cruise ships to meet international construction standards (in 
lieu of U.S. standards); and allowed foreign-built, U.S.-flag 
cruise ships to be transferred to a foreign registry without 
approval by the Secretary of Transportation.
  S. 2507, the United States Cruise Ship Tourism Act of 1998, 
was introduced by Senators McCain, Thurmond, Hutchison and 
Burns on September 22, 1998. The bill would have allowed 
foreign-built vessels to be reflagged as U.S. vessels and 
engage in domestic commerce, and permitted limited employment 
of foreign-flag cruise ships in the domestic commerce. S. 2507 
would have allowed foreign-built cruise ships, fewer than ten 
years of age and at least 20,000 gross tons and with 
accommodations for at least 800 passengers, to be reflagged as 
U.S.-flag vessels to engage in foreign commerce. The bill would 
have limited each company that utilized the provisions of the 
bill to no more than three vessels, and would have waived 
certain design and safety standards provided that a Coast 
Guard-recognized classification society had approved the 
vessel.
  The bill also would have allowed the Secretary to approve 
foreign-flag vessels to operate domestically, with certain 
limitations:
          (1) Repositioning voyages.--Foreign-flag vessels 
        could be employed in the coastwise or domestic trades, 
        two voyages a year, as long as the voyage did not 
        exceed two weeks and either started on one coast of the 
        United States and ended on the other, or started along 
        one coast of the United States during a voyage between 
        two countries; and
           (2) Charter voyages.--The Secretary could approve 
        not more than thirty foreign-flag vessels a year which 
        could be chartered for thirty days, to a non-cruise 
        ship owning company, to be utilized in the domestic 
        commerce.
  During the 106th Congress, S. 1510 was introduced by Senators 
McCain, Hutchison, Feinstein, and Murkowski on August 5, 1999, 
to allow foreign-built vessels to be reflagged as U.S. vessels 
and engage in domestic commerce and to permit limited 
employment of foreign-flag cruise ships in domestic commerce. 
The bill as originally drafted would authorize the Secretary to 
issue permits to foreign-built passenger cruise vessels to 
operate domestic itineraries in the transportation of 
passengers in the coastwise trade under foreign or U.S.-flag.
  The Commerce Committee held a full committee hearing on 
October 6, 1999. At the hearing, the committee heard from a 
wide range of the maritime industry including representatives 
of maritime labor, cruise operators and ports. Many raised 
concerns about allowing foreign vessels into the domestic 
market under different standards than current U.S. operators, 
and potentially different rules of operation. As a result of 
these expressed concerns, but mindful of the need to stimulate 
the domestic cruise market, the committee adopted an amendment 
in the nature of a substitute to help stimulate the U.S. 
domestic cruise industry during a June 15, 2000 Commerce 
Committee markup session. The Committee reported S. 1510 
favorably on this date.

                      Summary of Major Provisions

  The bill provides a two-year window of opportunity to 
encourage the immediate reflagging of large cruise vessels 
under the United States flag for operation in the domestic 
cruise trades. The bill would allow the Secretary of 
Transportation to issue permits for the limited operation of 
foreign-built cruise vessels in the domestic trades if 
applications are received within two years of the date of 
enactment of this legislation.
  To be eligible for reflagging and operation in the U.S. 
domestic cruise trades, a cruise vessel must have been 
delivered after January 1, 1980, is at least 20,000 gross 
registered tons, have no fewer than 800 passenger berths, 
provide a full range of overnight accommodations, dining, and 
entertainment services, comply with the Safety of Life at Sea 
requirements for a fixed smoke detection and sprinkler system 
in the accommodation areas, and be constructed according to 
internationally accepted construction standards. This will help 
ensure that any foreign-flag vessels reflagged to take 
advantage of the bill are modern and safe.
  To be eligible to enter the domestic market, the vessel must 
be owned by a citizen of the United States as defined in 
section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802) or 
section 12106(e) of title 46, United States Code.
  The bill would assist the U.S. ship repair industry and would 
require foreign-built cruise vessels entering the domestic 
market to have all repair, maintenance, alteration and other 
work required for operation under the U.S. flag, as well as 
regular repair and maintenance work, performed in a U.S. 
shipyard.
  Prior to allowing a foreign-built vessel to be reflagged and 
utilized in the domestic market, the bill would require the 
operator of a reflagged vessel to enter into a binding contract 
with U.S. shipyards for the construction of at least one more 
vessel than the total number of vessels they will operate in 
the domestic cruise market. The contract must provide for a 
total number of passenger berths equal to or greater than the 
number operated in the domestic market by that operator. 
Additionally, the replacement vessels must be at least 20,000 
gross registered tons and have no fewer than 800 passenger 
berths.
  The bill would require the first replacement vessel be 
delivered within five years of the date the foreign-built 
vessel commences operation in the domestic trade and that each 
additional vessel be delivered within two years of the 
preceding vessel. Foreign-built vessels are required to leave 
the domestic market two years after the replacement vessel or 
vessels are delivered.
  The bill would require the Secretary of Transportation to 
ensure that the coastwise business of a U.S.-built vessel 
operator is not harmed by the operation of a foreign-built 
vessel in the domestic market. The Secretary, after reviewing 
the proposed itineraries of foreign-built vessels in the 
domestic market, as well as taking into consideration public 
comments, is required to determine if there will be an adverse 
impact on the operation of a U.S.-built vessel. The Secretary 
is required to consider the scope of the vessel's itineraries, 
the duration of the cruise, the size of the vessel and the 
retail per diem of the vessel. If there is a conflict, the 
operator of a foreign-built vessel must change the vessel's 
itinerary in order to remove the conflict to the satisfaction 
of the Secretary.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 23, 2000.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1510, the United 
States Cruise Vessel Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.
S. 1510--United States Cruise Vessel Act
    Under current law, cruise vessels that were not built in 
the United States are not eligible to receive coastwise 
endorsements, which allow ships to serve the domestic trade. S. 
1510 would authorize the Secretary of Transportation to issue 
certificates of documentation with temporary coastwise 
endorsements for these cruise vessels under certain conditions. 
In order to receive the temporary endorsements, cruise ship 
operators would have to enter into contracts with U.S. 
shipyards to construct new cruise vessels. The Secretary would 
have to oversee an operator's choice of cruise routes to ensure 
that operators of vessels built in the United States are not 
adversely affected by the entry of foreign-built ships.
    CBO estimates that implementing S. 1510 would have no 
significant impact on federal budget because the costs of 
issuing vessel documents and overseeing the cruise ship market 
as required by the bill would be minimal. The bill would not 
affect direct spending or receipts; therefore, pay-as-you-go 
procedures would not apply.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Deborah Reis. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:
  S. 1510 as reported makes no permanent change to existing 
law. It would require businesses operating foreign-built 
vessels in the domestic trade to file proposed itineraries with 
the Secretary of Transportation. This is an annual reporting 
requirement limited to the time the foreign-built vessel 
operates in the domestic market and is necessary in order to 
ensure that the foreign-built vessel does not have an adverse 
impact on the coastwise business of a U.S.-built vessel 
operator.
  Additionally, the bill would require the Secretary to review 
and monitor operations of foreign-built vessels within approved 
itineraries for the duration of their U.S. domestic operations.
  Because S. 1510 does not create any permanent programs, the 
legislation would have no additional regulatory impact, and 
would result in no additional reporting requirements. The 
legislation would have no further effect on the number or types 
of individuals and businesses regulated, the economic impact of 
such regulation, the personal privacy of affected individuals, 
or the paperwork required from such individuals and businesses.

                      Section-by-Section Analysis

Section 1. Short title

  This section designates the act as the ``United States Cruise 
Vessel Act''.

Section 2. Definitions

  This section defines terms that may be unique to the bill as 
well as terms defined elsewhere in law.

        TITLE I--OPERATIONS UNDER A CERTIFICATE OF DOCUMENTATION

Section 101. Domestic cruise vessel

  This section allows the Secretary of Transportation to accept 
applications for the issuance of a certificate of documentation 
with a temporary coastwise endorsement to foreign-built vessels 
that are at least 20,000 gross registered tons with a minimum 
of 800 passenger berths; that are owned by a person qualified 
to operate a passenger vessel in the coastwise trade and; that 
provide a full range of overnight accommodations, 
entertainment, dining, and other services for their passengers.
  The vessel would also have to meet the standards for smoke 
detection and sprinkler system installation as required by the 
1992 Amendments to the Safety of Life at Sea Conventions of 
1974 and be classed by and designed in accordance with the 
rules of the American Bureau of Shipping or another 
classification society accepted by the Secretary as long as it 
complies with applicable international agreements and 
associated guidelines, as determined by the country in which 
the vessel was documented immediately before becoming a 
documented vessel.
  The section would allow the Secretary to accept applications 
for up to two years from the date of enactment and the right to 
reflag a foreign-built vessel under an application may not be 
transferred by the applicant to any other person.

Section 102. Repairs requirement

  This section requires that all vessels documented under the 
bill have all repair, maintenance, alteration and other work 
required or necessary to the vessel's operation in the domestic 
cruise trades performed in a United States shipyard.

Section 103. Construction requirement

  This section requires any operator who is issued a 
certificate of documentation with a temporary coastwise 
endorsement under the bill to enter into a binding contract 
with a U.S. shipyard for one more vessel than the total number 
of vessels brought into the coastwise trade by that operator 
prior to commencing operations. In order to meet this 
requirement, the substitute amendment requires the operator and 
the yard demonstrate to the Secretary of Transportation that 
they have the abilities to both construct and operate the 
vessel prior to commencing operations.
  Further, it requires that the first vessel be delivered 
within five years and each additional vessel within two years 
of the preceding vessel. It allows for an extension of this 
provision due to impossibility of performance. It requires that 
the foreign-built vessels leave the coastwise trade within two 
years of the delivery of the replacement vessel or vessels and 
allows the operator to reflag the vessels without the approval 
of the Secretary of Transportation.
  Finally, it requires that replacement vessels be at least 
20,000 gross registered tons with a minimum of 800 passenger 
berths, are owned by a person qualified to operate a passenger 
vessel in the coastwise trade, and has combined vessel berth 
capacity equal to or greater than the vessel being replaced.

Section 104. Certain operations prohibited

  The section prohibits any vessels entering the coastwise 
trade under the bill from operating as a ferry or regularly 
carrying for hire both passengers and vehicles or other cargo 
and from operating between or among the islands of Hawaii.

Section 105. Priorities within domestic markets

  The section requires that an operator of a vessel issued a 
certificate of documentation under the Act, at the request of 
the Secretary, submit proposed itineraries for review and 
public comment. The Secretary shall, after consideration of all 
comments, make a determination if the proposed itinerary would 
adversely affect the operator of a U.S.-built vessel equal to 
or greater in size. If a determination is made that a submitted 
itinerary would adversely affect the operator of a U.S.-built 
vessel, the Secretary will work to resolve conflicts before 
publication of a final list of approved itineraries.
  Further, the section allows for changes to the itineraries 
approved by the Secretary, subject to public comment and review 
by the Secretary. The Secretary would have to follow the same 
standards set for approval of the original itinerary and would 
have to ensure the change did not adversely affect the operator 
of a U.S.-built vessel.

Section 106. Report

  The section requires the Secretary of Transportation to issue 
an annual report on the number of vessels operating under a 
certificate of documentation granted under the bill and on the 
progress of construction of replacement vessels.

Section 107. Enforcement

  The section provides priority to operate in the domestic 
market to cruise vessels built in the United States. Under this 
section the operator of a cruise vessel built in the United 
States would notify the Secretary of Transportation at least 
two full calendar years before the vessel is scheduled to 
commence domestic operations.
  Following this notification, the Secretary is required to 
have the operators of all foreign-built vessels operating under 
this bill to submit, in April of each year, proposed 
itineraries for the calendar year beginning 20 months after the 
required submission for review and public comment.
  After the review period, the Secretary is required to notify 
the operator of a foreign-built cruise vessel of any 
itineraries that are not available and attempt to work out any 
disputes prior to publication of a final list of approved 
itineraries.
  For purposes of the review, the Secretary shall consider the 
scope of the vessel's itinerary; the ports between which it 
will operate; the duration of the cruise; the size of the 
vessel; and the retail per diem of the vessel. In conducting 
the review, if the Secretary determines that the submitted 
itinerary of a foreign-built vessel will adversely affect the 
coastwise business of a comparable U.S. cruise vessel in a 
comparable market, the U.S.-built vessel shall be given 
priority to operate.

                       TITLE II--OTHER PROVISIONS

Section 201. Application with Jones Act and other acts

  The section states that nothing in the bill shall impact 
current law relating to the transportation of cargo or 
passengers in domestic commerce unless specified in the bill. 
Specifically it states that nothing in the bill would affect 
the Jones Act, P.L. 87-77, P.L. 98-563, section 27A of the 
Merchant Marine Act, 1920, and section 8109 of the Department 
of Defense Appropriations Act, 1998.

Section 202. Glacier Bay and other National Park Service area permits

  The section requires that newly created or otherwise 
available permits to enter Glacier Bay National Park or any 
other area within the jurisdiction of the National Park Service 
be issued to U.S.-flagged vessels carrying passengers for hire. 
It does not require the creation of any new permits or impact 
current permit holders.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the bill as 
reported would make no change to existing law.

                                
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