II

Calendar No. 106

107TH CONGRESS

1ST SESSION S. 127

[Report No. 107–47]

To give American companies, American workers, and American ports the

opportunity to compete in the United States cruise market.

IN THE SENATE OF THE UNITED STATES

JANUARY 22, 2001

Mr. MCCAIN (for himself, Mr. CLELAND, Mrs. HUTCHISON, Mr. MURKOWSKI,

Mr. MILLER, Mrs. BOXER, Ms. MIKULSKI, Mr. SARBANES, Mr. THURMOND, Mrs. FEINSTEIN, Mr. INOUYE, Mr. BREAUX, Mr. BURNS, Mr.

SMITH of Oregon, Mr. HOLLINGS, Mr. KERRY, Mr. SCHUMER, and Mr.

REID) introduced the following bill; which was read twice and referred

to the Committee on Commerce, Science, and Transportation

JULY 27, 2001

Reported by Mr. HOLLINGS, without amendment

A BILL

To give American companies, American workers, and American ports the opportunity to compete in the United

States cruise market.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF SECTIONS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘United States Cruise Vessel Act’’.

4 (b) TABLE OF SECTIONS.—The table of sections for

5 this Act is as follows:

Sec. 1. Short title; table of sections.

Sec. 2. Definitions.

TITLE I—OPERATIONS UNDER CERTIFICATE OF

DOCUMENTATION

Sec. 101. Domestic cruise vessel.

Sec. 102. Repairs requirement.

Sec. 103. Construction requirement.

Sec. 104. Certain operations prohibited.

Sec. 105. Priorities within domestic markets.

Sec. 106. Report.

Sec. 107. Enforcement

TITLE II—OTHER PROVISIONS

Sec. 201. Application with Jones Act and other Acts.

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

6 SEC. 2. DEFINITIONS.

7 In this Act:

8 (1) ELIGIBLE CRUISE VESSEL.—The term ‘‘eli9 gible cruise vessel’’ means a cruise vessel that—

10 (A) was delivered after January 1, 1980;

11 (B) is at least 20,000 gross registered

12 tons;

13 (C) has no fewer than 800 passenger

14 berths;

15 (D) is owned by a person that is a citizen

16 of the United States for the purpose of oper17 ating a vessel in the coastwise trade within the
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1 meaning of section 2 of the Shipping Act, 1916

2 (46 U.S.C. 802) or section 12106(e) of title 46,

3 United States Code;

4 (E) provides a full range of overnight ac5 commodations, entertainment, dining, and other

6 services for its passengers;

7 (F) has a fixed smoke detection and sprin8 kler system installed throughout the accommo9 dation and service spaces, or will have such a

10 system installed within the time period required

11 by the 1992 Amendments to the Safety of Life

12 at Sea Convention of 1974; and

13 (G) meets the eligibility requirements for a

14 certificate of inspection under section 1137(a)

15 of the Coast Guard Authorization Act of 1996

16 (46 U.S.C. App. 1187 nt.), and complies with

17 the applicable international agreements and as18 sociated guidelines referred to in section

19 1137(a)(2) of that Act (46 U.S.C. 1187 nt.).

20 (2) ITINERARY.—The term ‘‘itinerary’’ means

21 the route travelled by a cruise vessel on a single voy22 age that begins at the first port at which passengers

23 on that voyage embark, includes each port at which

24 the vessel calls before the last port at which pas25 sengers on that voyage disembark, and ends at that
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1 last port of disembarkation. For purposes of this

2 paragraph, the term ‘‘embark’’ and ‘‘disembark’’

3 have the meaning given those terms in section

4 4.80a(a)(4) of title 19, Code of Federal Regulations

5 (as such section is in effect on the date of enactment

6 of this Act).

7 (3) OPERATOR.—The term ‘‘operator’’ means

8 the owner, operator, or charterer.

9 (4) SECRETARY.—The term ‘‘Secretary’’ means

10 the Secretary of Transportation.

11 (5) UNITED STATES SHIPYARD.—The term

12 ‘‘United States shipyard’’ means a shipyard located

13 in the United States.

14 (6) UNITED STATES.—The term ‘‘United

15 States’’ has the meaning given that term in section

16 2101(44) of title 46, United States Code.

17 TITLE I—OPERATIONS UNDER

18 CERTIFICATE OF DOCU19 MENTATION

20 SEC. 101. DOMESTIC CRUISE VESSEL.

21 (a) IN GENERAL.—Notwithstanding the provisions of

22 section 8 of the Act of June 19, 1886 (46 U.S.C. App.

23 289), section 27 of the Act of June 5, 1920, commonly

24 known as the Jones Act, (46 U.S.C. App. 883), section

25 27A of that Act, (46 U.S.C. App. 883–1), and section
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1 12106 of title 46, United States Code, the Secretary shall

2 issue a certificate of documentation with a temporary

3 coastwise endorsement for an eligible cruise vessel not

4 built in the United States to operate in domestic

5 itineraries in the transportation of passengers in the coast6 wise trade between ports in the United States if the vessel

7 meets the requirements of this title.

8 (b) TERMINATION OF AUTHORITY.—The authority of

9 the Secretary to issue a certificate of documentation under

10 subsection (a) begins on the day after the date of enact11 ment of this Act and terminates on the day that is 24

12 months after that date.

13 (c) APPLICATION ONLY REQUIRED.—Notwith14 standing subsection (b), the Secretary may issue a certifi15 cate of documentation under subsection (a) more than 24

16 months after the date of enactment of this Act if—

17 (1) the Secretary received the application for

18 the certificate of documentation before the end of

19 that 24-month period; and

20 (2) the vessel otherwise meets the requirements

21 of this title.

22 (d) RIGHTS UNDER APPLICATION NOT

23 TRANSFERRABLE.—The right to receive a certification of

24 documentation pursuant to an application described in

25 subsection (c) may not be transferred by the applicant to
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1 any other person. For purposes of this subsection, the

2 transfer of that right to a successor in interest to the ap3 plicant in connection with the reorganization, restruc4 turing, acquisition, or sale of the applicant’s business shall

5 not be considered another person.

6 SEC. 102. REPAIRS REQUIREMENT.

7 (a) IN GENERAL.—The Secretary may not issue a

8 certificate of documentation under section 101(a) for an

9 eligible cruise vessel unless the operator establishes to the

10 satisfaction of the Secretary that—

11 (1) any repair, maintenance, alteration, or other

12 preparation of the vessel for operation under a cer13 tificate of documentation issued under section

14 101(a) have been, or will be, performed in a United

15 States shipyard; and

16 (2) any repair, maintenance, or alteration of the

17 vessel after a certificate of documentation is issued

18 under that section will be performed in a United

19 States shipyard.

20 (b) WAIVER.—The Secretary may waive the require21 ments of subsection (a) if the Secretary finds that the re22 pair, maintenance, alterations, or other preparation serv23 ices are not available in the United States or if an emer24 gency dictates that the vessel proceed to a foreign port.
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1 SEC. 103. CONSTRUCTION REQUIREMENT.

2 (a) CONSTRUCTION CONTRACT REQUIRED.—

3 (1) IN GENERAL.—Except as provided in para4 graph (2), a vessel for which a certificate of docu5 mentation has been issued under section 101(a) may

6 not commence operations in the coastwise trade until

7 the operator of that vessel executes a contract with

8 one or more United States shipyards for the con9 struction of a total of 2 or more cruise vessels with

10 a total combined berth or stateroom capacity equal

11 to at least the total combined berth or stateroom ca12 pacity of that vessel. If certificates of documentation

13 are issued under section 101(a) for more than 1 ves14 sel for an operator, the construction contract re15 quired by the preceding sentence shall provide for

16 the construction of 1 more vessel than the number

17 of vessels for which certificates of documentation are

18 issued with a total combined berth or stateroom ca19 pacity equal to at least the total combined berth or

20 stateroom capacity of the vessels for which the cer21 tificates of documentation are issued.

22 (2) DEMONSTRATION OF CAPABILITY RE23 QUIRED.—For purposes of this subsection, a con24 struction contract for which financing is not pro25 vided under title XI of the Merchant Marine Act,

26 1936 (46 U.S.C. App. 1101 et seq.) shall not be rec-
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1 ognized as meeting the requirements of paragraph

2 (1) unless both the operator and the shipyard are

3 capable of completing the contract. For purposes of

4 this paragraph—

5 (A) an operator shall be considered to be

6 capable of completing such a contract if the op7 erator meets the standards set forth in sections

8 298.12, 298.13, and 298.14 of title 46, Code of

9 Federal Regulations; and

10 (B) a shipyard shall be considered to be

11 capable of completing such a contract if the

12 shipyard meets the standards set forth in sec13 tion 298.32(a) of that title.

14 (b) MINIMUM SIZE REQUIREMENT.—For purposes of

15 this section, a contract for the construction of a vessel

16 shall be disregarded if that vessel—

17 (1) will be less than 20,000 gross registered

18 tons; or

19 (2) will have fewer than 800 passenger berths.

20 (c) CONTRACT TERMS.—

21 (1) IN GENERAL.—The contract required by

22 subsection (a) shall provide for delivery of the first

23 such vessel not later than 60 months after the date

24 on which operations of the vessel for which the cer25 tificate of documentation was issued commence, and
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1 shall contain any other provisions required by the

2 Secretary for purposes of this subsection. If the con3 tract provides for the construction of more than 1

4 vessel, it shall provide for delivery of each vessel sub5 sequent to the first not later than 24 months after

6 delivery of the immediately preceding vessel.

7 (2) EXTENSION OF TIME PERIODS FOR IMPOS8 SIBILITY OF PERFORMANCE.—If the commencement

9 of construction or the completion of construction is

10 prevented or delayed by circumstances that would be

11 recognized as providing a defense of impossibility-of12 performance by the shipyard under applicable con13 tract law, each time period in this Act related to de14 livery of a vessel by that shipyard shall be extended

15 for whatever period of time the circumstance on

16 which the defense is predicated continues to exist.

17 (d) EXPIRATION OF COASTWISE ENDORSEMENT.—

18 The coastwise endorsement for an eligible cruise vessel

19 under section 101(a) shall expire 24 months after the de20 livery date for the replacement vessel or vessels for that

21 eligible cruise vessel. For purposes of this subsection, the

22 term ‘‘replacement vessel or vessels’’ means 1 or more ves23 sels the operator of the eligible cruise vessel is obligated

24 to construct in the United States under the contract de25 scribed in subsection (a) with respect to the eligible cruise
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1 vessel that have at least the same number of passenger

2 berths as the eligible cruise vessel, or they, replace.

3 (e) REFLAGGING UNDER FOREIGN REGISTRY.—Not4 withstanding section 9(c) of the Shipping Act, 1916 (46

5 U.S.C. App. 808), the operator of an eligible cruise vessel

6 issued a certificate of documentation with a temporary

7 coastwise endorsement under section 101(a), or a cruise

8 vessel constructed under a contract described in subsection

9 (a) of this section, may place that vessel under foreign

10 registry.

11 SEC. 104. CERTAIN OPERATIONS PROHIBITED.

12 Neither an eligible cruise vessel operating in domestic

13 itineraries under a certificate of documentation issued

14 under section 101(a) nor a vessel constructed under a con15 tract described in section 103(a) may—

16 (1) operate as a ferry;

17 (2) regularly carry for hire both passengers and

18 vehicles or other cargo; or

19 (3) operate between or among the islands of

20 Hawaii.

21 SEC. 105. PRIORITIES WITHIN DOMESTIC MARKETS.

22 (a) NOTIFICATION OF SECRETARY.—

23 (1) NEW VESSELS.—Any person eligible under

24 section 12102 of title 46, United States Code, to

25 document a vessel under chapter 121 of that title
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1 that enters into a contract with a United States

2 shipyard for the construction of a cruise vessel

3 that—

4 (A) will be at least 20,000 gross registered

5 tons,

6 (B) will have no fewer than 800 passenger

7 berths, and

8 (C) is otherwise eligible for a certificate of

9 documentation and a coastwise trade endorse10 ment,

11 shall notify the Secretary, at such time and in such

12 manner and form as the Secretary may require, of

13 the construction of that vessel not less than 2 full

14 calendar years before the earliest date on which the

15 vessel is intended to commence operations.

16 (2) RECONSTRUCTION.—The notification re17 quirement of paragraph (1) also applies to any such

18 person that enters into a contract with a United

19 States shipyard for the reconstruction of any vessel,

20 including a vessel that has a certificate of docu21 mentation under chapter 121 of title 46, United

22 States Code, will, after reconstruction, will be that

23 size and capacity and be eligible for such an en24 dorsement.
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1 (b) PRIORITY TO U.S.-BUILT VESSELS.—The Sec2 retary shall give priority to any cruise vessel described in

3 subsection (a) over any other cruise vessel of comparable

4 operations in a comparable market under a certificate of

5 documentation issued under section 101(a) if the Sec6 retary, after notice and an opportunity for public com7 ment, determines that the employment in the coastwise

8 trade of the vessel issued a certificate of documentation

9 under section 101(a) will adversely affect the coastwise

10 trade business of any person operating a vessel not docu11 mented under section 101(a) in the coastwise trade.

12 (c) FACTORS CONSIDERED.—In determining and as13 signing priorities, the Secretary shall consider, among

14 other factors determined by the Secretary to be

15 appropriate—

16 (1) the scope of a vessel’s itinerary, including—

17 (A) the ports between which it operates;

18 and

19 (B) the duration of the cruise;

20 (2) the time frame within which the vessel will

21 serve a particular itinerary;

22 (3) the size of the vessel; and

23 (4) the retail per diem of the vessel.

24 (d) IMPLEMENTATION.—
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1 (1) INTINERARY SUBMISSION REQUIRED.—The

2 Secretary shall require the operator of each vessel

3 issued a certificate of documentation under section

4 101(a) to submit, in April of each year, a proposed

5 itinerary for that vessel for cruise itineraries for the

6 calendar year beginning 20 months after the date on

7 which the itinerary is required to be submitted.

8 (2) PUBLICATION AND COMMENT.—

9 (A) PUBLICATION.—The Secretary shall

10 cause any itinerary submitted under paragraph

11 (1), and any late submission or revision sub12 mitted under paragraph (3), to be published in

13 the Federal Register.

14 (B) COMMENT PERIOD.—The Secretary

15 shall receive and consider comments from the

16 public on any itinerary published under sub17 paragraph (A) for a period of 30 days after the

18 date on which the itinerary is published.

19 (3) REVISIONS AND LATER SUBMISSIONS.—The

20 Secretary shall permit late submissions and revisions

21 of submissions after the final list of approved

22 itineraries is published under paragraph (4)(C)(iii)

23 and before the start date of a requested itinerary.

24 (4) SCHEDULING.—
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1 (A) ACTION BY SECRETARY.—Within 30

2 days after the close of the comment period on

3 an itinerary published under paragraph (2)(A),

4 the Secretary shall—

5 (i) review the itineraries submitted to

6 the Secretary for compliance with the pri7 orities established by this section;

8 (ii) advise affected cruise vessel opera9 tors of any specific itinerary that is not

10 available and the reason it is not available;

11 and

12 (iii) publish a proposed list of ap13 proved itineraries.

14 (B) OPERATORS’ APPEALS.—The operator

15 of any eligible cruise vessel may appeal the Sec16 retary’s decision under subparagraph (A)(ii)

17 within 30 days after the Secretary advises the

18 operator of the decision.

19 (C) RESOLUTION OF CONFLICTS.—As soon

20 as practicable after the end of the 30-day pe21 riod described in subparagraph (B), the Sec22 retary shall—

23 (i) resolve any appeals and consider

24 new itinerary proposals;
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1 (ii) advise cruise vessel operators who

2 responded under subparagraph (B) of the

3 Secretary’s decision with respect to the ap4 peal or the new itinerary proposal; and

5 (iii) publish a final list of approved

6 itineraries.

7 SEC. 106. REPORT.

8 The Secretary shall issue an annual report on the

9 number of vessels operating under certificate of

10 documentations granted under section 101(a), and on the

11 progress of construction on vessels to replace those vessels

12 under section 103.

13 SEC. 107. ENFORCEMENT.

14 (a) BREACH OF CONSTRUCTION CONTRACT BY OP15 ERATOR.—The Secretary shall revoke a temporary coast16 wise endorsement issued under section 101(a)(2) for a ves17 sel if the operator of that vessel commits a serious breach

18 of the construction contract required by section 103(a).

19 The revocation shall take effect at the conclusion of the

20 last voyage on the last cruise itinerary approved by the

21 Secretary before the Secretary made the determination to

22 revoke the endorsement.

23 (b) BREACH OF CONSTRUCTION CONTRACT BY SHIP24 YARD.—
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1 (1) IN GENERAL.—If a shipyard commits a se2 rious breach of a construction contract required by

3 section 103(a) with an operator of a vessel for which

4 a certificate of documentation granted under section

5 101(a)—

6 (A) the operator shall notify the Secretary

7 immediately of the breach; and

8 (B) the operator may continue to operate

9 that vessel as if the contract were in effect for

10 a period of 24 months after notification of the

11 Secretary on the condition that the operator

12 will make good faith efforts during that 24-

13 month period to execute a contract with a

14 United States shipyard for the construction of

15 the vessels that were to have been constructed

16 under that contract.

17 (2) GOOD FAITH EFFORT REQUIRED.—If the

18 Secretary determines at any time during that 24-

19 month period that the operator has ceased to make

20 good faith efforts to execute such a contract, then

21 the Secretary shall immediately terminate the opera22 tor’s authority to continue operations under this

23 paragraph.

24 (c) SUBSTANTIAL BREACHES ONLY.—For purposes

25 of subsections (a) and (b), the term ‘‘serious breach of
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1 contract’’ means a breach of contract for which an appro2 priate remedy under section 2–703 or 2–711 of the Uni3 form Commercial Code, as promulgated by the National

4 Conference of Commissioners on Uniform State Law, is

5 cancellation by the seller or buyer, respectively.

6 TITLE II—OTHER PROVISIONS

7 SEC. 201. APPLICATION WITH JONES ACT AND OTHER ACTS.

8 (a) IN GENERAL.—Nothing in this Act affects or oth9 erwise modifies the authority contained in—

10 (1) Public Law 87–77 (46 U.S.C. App. 289b)

11 authorizing the transportation of passengers and

12 merchandise in Canadian vessels between ports in

13 Alaska and the United States; or

14 (2) Public Law 98–563 (46 U.S.C. App. 289c)

15 permitting the transportation of passengers between

16 Puerto Rico and other United States ports.

17 (3) Section 27A of the Act of the Merchant Ma18 rine Act, 1920 (46 U.S.C. App. 883–1).

19 (4) Section 8109 of the Department of Defense

20 Appropriations Act, 1998.

21 (b) JONES ACT.—Except as in section 101(a), noth22 ing in this Act affects or modifies the Merchant Marine

23 Act, 1920 (46 U.S.C. App. 861 et seq.).
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1 SEC. 202. GLACIER BAY AND OTHER NATIONAL PARK SERV2 ICE AREA PERMITS.

3 (a) IN GENERAL.—The Secretary of the Interior,

4 after consultation with the Secretary of Transportation,

5 shall issue new or otherwise available permits to United

6 States-flag vessels carrying passengers for hire to enter

7 Glacier Bay or any other area within the jurisdiction of

8 the National Park Service. Any such permit shall not af9 fect the rights of any person that, on the date of enact10 ment of this Act, holds a valid permit to enter Glacier

11 Bay or such other area.

12 (b) NEW PERMITS NOT AUTHORIZED.—Subsection

13 (a) does not authorize the Secretary of the Interior to

14 issue new permits, but, if new permits are authorized

15 under any other provision of law, they shall be awarded

16 in accordance with subsection (a).

Calendar No. 106

107TH CONGRESS

1ST SESSION S. 127

[Report No. 107–47]

A BILL

To give American companies, American workers,

and American ports the opportunity to competein the United States cruise market.

JULY 27, 2001

Reported without amendment