I 

108TH CONGRESS 

1ST SESSION H. R. 2845

To amend the Merchant Marine Act, 1920, to allow transportation of merchandise in noncontiguous trade on foreign-flag vessels, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 24, 2003

Mr. CASE introduced the following bill; which was referred to the Committee 

on Transportation and Infrastructure, and in addition to the Committee 

on Armed Services, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL

To amend the Merchant Marine Act, 1920, to allow transportation of merchandise in noncontiguous trade on foreignflag vessels, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘United States Non5 contiguous Shipping Open Market Act of 2003’’. 

6 SEC. 2. TRANSPORTATION OF CERTAIN MERCHANDISE. 

7 (a) IN GENERAL.—Section 27 of the Merchant Ma8 rine Act, 1929 (46 App. U.S.C. 883) is amended by insert-
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1 ing ‘‘(a) IN GENERAL.—’’ before the first sentence, and 

2 by adding at the end the following: 

3 ‘‘(b) NONCONTIGUOUS TRADE EXEMPTION.—Sub4 section (a) shall not apply with respect to transportation 

5 in noncontiguous trade of merchandise on a foreign quali6 fied freight vessel for which the Secretary of Transpor7 tation has issued a certificate of documentation. 

8 ‘‘(c) DEFINITIONS.—In this section: 

9 ‘‘(1) FOREIGN QUALIFIED FREIGHT VESSEL.—

10 The term ‘foreign qualified freight vessel’ means a 

11 freight vessel (as that term is defined in section 

12 2101 of title 46, United States Code) of not less 

13 than 1,000 gross tons that—

14 ‘‘(A) was not built in the United States (or 

15 if rebuilt, not rebuilt in the United States); 

16 ‘‘(B) is registered in a foreign country; and 

17 ‘‘(C) employs United States citizens to the 

18 extent required of vessels registered under sec19 tion 12102 of this title. 

20 ‘‘(2) NONCONTIGUOUS TRADE.—The term ‘non21 contiguous trade’ means—

22 ‘‘(A) trade between a point in the contig23 uous 48 States and a point in Alaska, Hawaii, 

24 Puerto Rico, or the insular territories or posses25 sions of the United States; or 
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1 ‘‘(B) trade between a point in Alaska, Ha2 waii, Puerto Rico, or the insular territories or 

3 possessions of the United States and another 

4 point in Alaska, Hawaii, Puerto Rico, or the in5 sular territories and possessions of the United 

6 States.’’. 

7 (b) COASTWISE ENDORSEMENTS.—12106(b) of title 

8 46, United States Code, is amended—

9 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; 

10 (2) by inserting ‘‘to paragraph (2) and’’ after 

11 ‘‘Subject’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(2)(A) Paragraph (1) shall not apply with respect 

14 to a foreign qualified freight vessel used for transportation 

15 referred to in section 27(b) of the Merchant Marine Act, 

16 1920 (46 App. U.S.C. 883(b)), for which the Secretary 

17 of Transportation has issued a certificate of documenta18 tion. 

19 ‘‘(B) In subparagraph (A) the term ‘foreign qualified 

20 freight vessel’ has the meaning given that term in section 

21 27(c) of the Merchant Marine Act, 1920 (46 App. U.S.C. 

22 883(c)).’’. 

23 (c) FOREIGN TRANSFER.—Section 9(c) of the Ship24 ping Act, 1916 (46 App. U.S.C. 808) is amended by in-
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1 serting ‘‘(1)’’ before the first sentence, and by adding at 

2 the end the following: 

3 ‘‘(2)(A) Notwithstanding paragraph (1), a foreign 

4 qualified freight vessel for which the Secretary has issued 

5 a certificate of documentation after the date of enactment 

6 of this Act and that is used solely for transportation re7 ferred to in section 27(b) of the Merchant Marine Act, 

8 1920 (46 App. U.S.C. 883(b)) may be placed under for9 eign registry without the approval of the Secretary at any 

10 time after that vessel is issued a certificate of documenta11 tion. At such time as that vessel is placed under foreign 

12 registry, the Secretary shall revoke the certificate of docu13 mentation issued by the Secretary. 

14 ‘‘(B) In subparagraph (A) the term ‘foreign qualified 

15 freight vessel’ has the meaning given that term in section 

16 27(c) of the Merchant Marine Act, 1920 (46 App. U.S.C. 

17 883(c)).’’.

18 SEC. 3. CITIZENSHIP AND TRANSFER PROVISIONS. 

19 (a) CITIZENSHIP OF CORPORATIONS, PARTNERSHIPS, 

20 AND ASSOCIATIONS.—Section 2 of the Shipping Act, 1916 

21 (46 U.S.C. App. 802) is amended by adding at the end 

22 the following: 

23 ‘‘(d)(1) The following provisions of this section shall 

24 not apply to a foreign qualified freight vessel used for 
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1 transportation referred to in section 27(b) of the Merchant 

2 Marine Act, 1920 (46 App. U.S.C. 883(b)): 

3 ‘‘(A) The text of subparagraph after ‘possession 

4 thereof’. 

5 ‘‘(B) subsection (c). 

6 ‘‘(2) In paragraph (1) the term ‘foreign qualified 

7 freight vessel’ has the meaning given that term in section 

8 27(c) of the Merchant Marine Act, 1920 (46 App. U.S.C. 

9 883(c)).’’. 

10 (b) APPROVAL OF TRANSFER OF REGISTRY OR OP11 ERATION UNDER AUTHORITY OF A FOREIGN COUNTRY OR

12 FOR SCRAPPING IN A FOREIGN COUNTRY; PENALTIES.—

13 Section 9 of the Shipping Act, 1916 (46 U.S.C. App. 808) 

14 is amended by adding at the end the following: 

15 ‘‘(e)(1) In lieu of the penalty under subsection (d), 

16 a person that commits an act described in paragraph (2) 

17 in violation of this section is liable to the United States 

18 Government for a civil penalty of not more than $10,000 

19 for each violation. 

20 ‘‘(2) The acts referred to in paragraph (1) are the 

21 following: 

22 ‘‘(A) Charter, sell, or transfer a foreign quali23 fied freight vessel used for transportation referred to

24 in section 27(b) of the Merchant Marine Act, 1920 
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1 (46 App. U.S.C. 883(b)), or interest in or control 

2 of such a vessel. 

3 ‘‘(B) Place under foreign registry a foreign 

4 qualified freight vessel used for transportation re5 ferred to in section 27(b) of the Merchant Marine 

6 Act, 1920 (46 App. U.S.C. 883(b)), that is docu7 mented in the United States. 

8 ‘‘(C) Operate under the authority of a foreign 

9 country a foreign qualified freight vessel used for 

10 transportation referred to in section 27(b) of the 

11 Merchant Marine Act, 1920 (46 App. U.S.C. 

12 883(b)). 

13 ‘‘(f) To promote the transfer of foreign vessels to be 

14 documented under chapter 121 of title 46, United States 

15 Code, for use for transportation referred to in section 

16 27(b) of the Merchant Marine Act, 1920 (46 App. U.S.C. 

17 883(b)), the Secretary may grant approval under sub18 section (c) with respect to such a vessel before the date 

19 the vessel is documented.’’. 

20 ‘‘(g) In subsections (e) and (f), the term ‘foreign 

21 qualified freight vessel’ has the meaning given that term 

22 in section 27(c) of the Merchant Marine Act, 1920 (46 

23 App. U.S.C. 883(c)).’’. 
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1 SEC. 4. LABOR PROVISIONS. 

2 (a) LIABILITY FOR INJURY OR DEATH OF MASTER

3 OR CREW MEMBER.—Section 20(a) of the Act of March 

4 4, 1915 (38 Stat. 1185, chapter 153; 46 U.S.C. App. 

5 688(a)), is amended—

6 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; 

7 (2) by adding at the end of paragraph (1) (as 

8 designated under paragraph (1) of this subsection) 

9 the following new sentence: ‘‘In an action brought 

10 under this subsection against a defendant employer 

11 that does not reside or maintain an office in the 

12 United States (including any territory or possession 

13 of the United States) and that engages in any enter14 prise that makes use of one or more ports in the 

15 United States (as defined in section 2101 of title 46, 

16 United States Code), jurisdiction shall be under the 

17 district court most proximate to the place of the oc18 currence of the personal injury or death that is the 

19 subject of the action.’’; and 

20 (3) by adding at the end the following new 

21 paragraph: 

22 ‘‘(2)(A) The employer of a master or member of the 

23 crew of a vessel—

24 ‘‘(i) may, at the election of the employer, par25 ticipate in an authorized compensation plan under 
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1 the Longshore and Harbor Workers’ Compensation 

2 Act (33 U.S.C. 901 et seq.); and 

3 ‘‘(ii) if the employer makes an election under 

4 clause (i), notwithstanding section 2(3)(G) of the 

5 Longshore and Harbor Workers’ Compensation Act 

6 (33 U.S.C. 902(3)(G)), shall be subject to that Act. 

7 ‘‘(B) If an employer makes an election, in accordance 

8 with subparagraph (A), to participate in an authorized 

9 compensation plan under the Longshore and Harbor 

10 Workers’ Compensation Act—

11 ‘‘(i) a master or crew member employed by that 

12 employer shall be considered to be an employee for 

13 the purposes of that Act; and

14 ‘‘(ii) the liability of that employer under that 

15 Act to the master or crew member, or to any person 

16 otherwise entitled to recover damages from the em17 ployer based on the injury, disability, or death of the 

18 master or crew member, shall be exclusive and in 

19 lieu of all other liability.’’. 

20 (b) MINIMUM REQUIREMENTS.—All vessels, whether 

21 documented in the United States or not, operating in the 

22 coastwise trade of the United States shall be subject to 

23 minimum international labor standards for seafarers 

24 under international agreements in force for the United 
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1 States, as determined by the Secretary of Transportation 

2 on the advice of the Secretaries of Labor and Defense. 

3 SEC. 5. REGULATIONS REGARDING VESSELS. 

4 (a) APPLICABLE MINIMUM REQUIREMENTS.—Except 

5 as provided in subsection (b), the minimum requirements 

6 for vessels engaging in the transportation of cargo or mer7 chandise in the United States coastwise trade shall be the 

8 recognized international standards in force for the United 

9 States (as determined by the Secretary of the department 

10 in which the Coast Guard is operating, in consultation 

11 with any other official of the Federal Government that the 

12 Secretary determines to be appropriate). 

13 (b) CONSISTENCY IN APPLICATION OF STAND14 ARDS.—In any case in which any minimum requirement 

15 for vessels referred to in subsection (a) establishes a lower 

16 standard than a minimum that is applicable to vessels that 

17 are documented in a foreign country and that are admit18 ted to engage in the transportation of cargo and merchan19 dise in the United States coastwise trade, the standard 

20 applicable to such vessels that are documented in a foreign 

21 country shall be the standard to be applied to United 

22 States documented vessels. 

23 SEC. 6. ENVIRONMENTAL STANDARDS. 

24 All vessels, whether documented under the laws of the 

25 United States or not, engaging in the United States coast-
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1 wise trade shall comply with all applicable United States 

2 and international environmental standards in force for the 

3 United States. 

4 SEC. 7. REQUIREMENTS FOR CERTAIN NONCITIZENS IR5 REGULARLY ENGAGING IN DOMESTIC COAST6 WISE TRADE. 

7 (a) IN GENERAL.—Each person or entity that is not 

8 a citizen of the United States, as defined in section 

9 2101(3a) of title 46, United States Code, that owns or 

10 operates vessels that irregularly engage in the United 

11 States domestic coastwise trade shall—

12 (1) name an agent upon whom process may be 

13 served; 

14 (2) abide by all applicable laws of the United 

15 States, including applicable environmental and tax 

16 laws; and 

17 (3) post evidence of documentation and en18 dorsements aboard such vessel indicating the owner 

19 or owners of such vessel, including any person con20 trolling vessels and the number of port calls and 

21 coastwise trips made during that calendar year. 

22 (b) PERSONS TREATED AS SINGLE EMPLOYER.—For 

23 purposes of paragraph (3), all persons treated as a single 

24 employer under subsection (a) or (b) of section 52 of the 
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1 Internal Revenue Code of 1986 shall be treated as 1 per2 son.

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