I

104TH CONGRESS

2D SESSION H. R. 4006

To reform the coastwise, intercoastal, and noncontiguous trade shipping laws,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 2, 1996

Mr. SMITH of Michigan introduced the following bill; which was referred to

the Committee on Transportation and Infrastructure, and in addition to

the Committee on National Security, 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 reform the coastwise, intercoastal, and noncontiguous

trade shipping laws, 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; FINDINGS.

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

5 ‘‘Coastal Shipping Competition Act of 1996’’.

6 (b) FINDINGS.—The Congress finds the following:

7 (1) Efficient, competitive, broadly available wa8 terborne cargo transportation service is an essential

9 component of a national intermodal transportation
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1 system, and such services should be promoted by the

2 United States.

3 (2) In the last several decades, the size of the

4 active United States domestic deepwater fleet has

5 shrunk substantially, to a total of only 126 ocean6 going vessels and 59 vessels in the Great Lakes

7 today.

8 (3) The result has been shipping shortages,

9 higher prices, and significant commercial transpor10 tation inefficiencies, all of which can be alleviated,

11 without any cost to the taxpayer, by increasing com12 petition in domestic deepwater shipping.

13 (4) Such inefficiencies undermine the competi14 tive position of a broad range of American busi15 nesses, particularly in potential domestic markets,

16 versus their foreign competition. These shipping

17 shortages and higher-than-market prices have led to

18 the loss of American jobs to overseas competitors

19 able to purchase transportation services on the inter20 national market.

21 (5) Lack of access to adequate deepwater com22 mercial waterborne transportation alternatives sup23 presses economic activity in an amount of more than

24 $10,000,000,000 annually and causes the loss of as-
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1 sociated tax revenue, according to a study by the

2 United States International Trade Commission.

3 (6) American mariners and water carriers are

4 dedicated to providing the high-quality service that

5 their customers deserve, but flexibility in capital in6 vestment is needed to acquire the modern equipment

7 essential to satisfy the current and potential demand

8 for superior deep-sea domestic cargo transportation

9 service.

10 (7) Eliminating international capital investment

11 restrictions on the deep-sea domestic transportation

12 industry will help American ocean transportation

13 companies to provide the world class service Amer14 ican manufacturers, farmers, consumers, and tax15 payers deserve.

16 (8) Similarly, permitting domestic transpor17 tation service providers to purchase their vessels on

18 the international market without penalty will lower

19 their operating expenses, creating savings which they

20 can pass on to their customers in the form of lower

21 prices and improved efficiency.

22 (9) Allowing American domestic deepwater com23 mercial carriers to comply with appropriate inter24 national operating and construction standards to

25 which the United States is a party through treaties
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1 and conventions will further lower operating ex2 penses and reduce the cost of the service provided by

3 those companies.

4 (10) Rationalizing the tort and liability provi5 sions governing the maritime industry will help re6 duce the insurance costs of employers and diminish

7 the need for costly and contentious litigation to set8 tle worker injury claims.

9 (11) Liberalizing the regulations currently gov10 erning the domestic deep-sea transportation of cargo

11 will encourage a renaissance in the Nation’s water12 borne coastal trades, reducing highway congestion,

13 road damage, and air and noise pollution, and will

14 substantially contribute to the ability of American

15 commercial enterprise to compete against foreign

16 companies.

17 (12) Foreign shipowner income derived from

18 coastwise trade is United States-source income for

19 purposes of Federal tax laws.

20 SEC. 2. MISCELLANEOUS AMENDMENTS TO DEFINITIONS IN

21 TITLE 46, UNITED STATES CODE.

22 Section 2101 of title 46, United States Code, is

23 amended—
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1 (1) in each of paragraphs (1) through (45), by

2 striking the period at the end and inserting a semi3 colon;

4 (2) in paragraph (46), by striking the period at

5 the end and inserting ‘‘; and’’;

6 (3) by striking paragraph (3a) and inserting

7 the following:

8 ‘‘(3a) ‘citizen of the United States’ means—

9 ‘‘(A)(i) a national of the United States, as

10 defined in section 101(a)(22) of the Immigra11 tion and Nationality Act (8 U.S.C.

12 1101(a)(22));

13 ‘‘(ii) a corporation established under the

14 laws of the United States or under the laws of

15 a State, territory, district, or possession of the

16 United States, that has—

17 ‘‘(I) a president or other chief execu18 tive officer and chairman of the board of

19 directors of that corporation who are citi20 zens of the United States; and

21 ‘‘(II) a board of directors, on which a

22 majority of the number of directors nec23 essary to constitute a quorum are citizens

24 of the United States;
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1 ‘‘(iii) a partnership existing under the laws

2 of a State, territory, district, or possession of

3 the United States that has at least 1 general

4 partner who is a citizen of the United States;

5 ‘‘(iv) a trust that has at least 1 trustee

6 who is a citizen of the United States; or

7 ‘‘(v) an association, joint venture, limited

8 liability company or partnership, or other entity

9 that has at least 1 member who is a citizen of

10 the United States; but

11 ‘‘(B) such term does not include—

12 ‘‘(i) with respect to a person or entity

13 under clause (ii), (iii), or (v) of subpara14 graph (A), any parent corporation, part15 nership, or other person (other than an in16 dividual) or entity that is a second-tier

17 owner (as that term is defined by the Sec18 retary) of the person or entity involved; or

19 ‘‘(ii) with respect to a trust under

20 clause (iv), any beneficiary of the trust.’’;

21 (4) by inserting after paragraph (4) the follow22 ing new paragraph:

23 ‘‘(4a) ‘coastwise trade’—

24 ‘‘(A) subject to subparagraph (B), means

25 the transportation by water of merchandise or
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1 passengers, the towing of a vessel by a towing

2 vessel, or dredging operations embraced within

3 the coastwise laws of the United States—

4 ‘‘(i) between points in the United

5 States (including any district, territory, or

6 possession of the United States);

7 ‘‘(ii) on the Great Lakes (including

8 any tributary or connecting waters of the

9 Great Lakes and the Saint Lawrence Sea10 way);

11 ‘‘(iii) on the subjacent waters of the

12 Outer Continental Shelf subject to the

13 Outer Continental Shelf Lands Act (43

14 U.S.C. 1331 et seq.); and

15 ‘‘(iv) in the noncontiguous trade; and

16 ‘‘(B) does not include the activities speci17 fied in subparagraph (A) on the navigable wa18 ters included in the inland waterways trade ex19 cept for activities specified in subparagraph (A)

20 that occur on mixed waters.’’;

21 (5) by inserting after paragraph (11c) the fol22 lowing new paragraph:

23 ‘‘(11d) ‘foreign qualified vessel’ means a ves24 sel—

25 ‘‘(A) registered in a foreign country; and
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1 ‘‘(B) the owner, operator, or charterer of

2 which is a citizen of the United States or—

3 ‘‘(i) has qualified to engage in busi4 ness in a State and has an agent in that

5 State upon whom service of process may be

6 made;

7 ‘‘(ii) is subject to the laws of the

8 United States in the same manner as any

9 foreign person doing business in the Unit10 ed States; and

11 ‘‘(iii) either—

12 ‘‘(I) employs vessels in the coast13 wise trade regularly or from time to

14 time as part of a regularly scheduled

15 freight service in the foreign ocean

16 (including the Great Lakes) trades of

17 the United States; or

18 ‘‘(II) offers passage or cruises on

19 passenger vessels the owner, operator,

20 or charterer employs in the coastwise

21 trade or in the coastwise trade as part

22 of those cruises offered in the foreign

23 ocean (including the Great Lakes)

24 trades of the United States.’’;
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1 (6) by redesignating paragraph (14a) as para2 graph (14b);

3 (7) by inserting after paragraph (14) the fol4 lowing new paragraph:

5 ‘‘(14a) ‘inland waterways trade’—

6 ‘‘(A) means—

7 ‘‘(i) the transportation of merchandise

8 or passengers on the navigable rivers, ca9 nals, lakes other than the Great Lakes, or

10 other waterways inside the Boundary Line;

11 ‘‘(ii) the towing of barges by towing

12 vessels in the waters specified in clause (i);

13 or

14 ‘‘(iii) engaging in dredging operations

15 in the waters specified in clause (i); and

16 ‘‘(B) includes any activity specified in sub17 paragraph (A) that is conducted in mixed wa18 ters.’’;

19 (8) by redesignating paragraph (15a) as para20 graph (15b);

21 (9) by inserting after paragraph (15) the fol22 lowing:

23 ‘‘(15a) ‘mixed waters’ means—

24 ‘‘(A) the harbors and ports on the coasts

25 and Great Lakes of the United States; and
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1 ‘‘(B) the rivers, canals, and other water2 ways tributary to the Great Lakes or to the

3 coastal harbors and coasts of the United States

4 inside the Boundary Line,

5 that the Secretary of Transportation determines to

6 be navigable by oceangoing vessels.’’;

7 (10) by redesignating paragraph (17a) as para8 graph (17b);

9 (11) by inserting after paragraph (17) the fol10 lowing:

11 ‘‘(17a) ‘noncontiguous trade’ means transpor12 tation by water of merchandise or passengers, or

13 towing by towing vessels—

14 ‘‘(A) between—

15 ‘‘(i) a point in the 48 continental

16 States and the District of Columbia; and

17 ‘‘(ii) a point in Hawaii, Alaska, Puer18 to Rico, Guam, the Virgin Islands, Amer19 ican Samoa, the Northern Mariana Is20 lands, or any other noncontiguous territory

21 or possession of the United States, as em22 braced within the coastwise laws of the

23 United States; or

24 ‘‘(B) between 2 points described in sub25 paragraph (A)(ii).’’;
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1 (12) in paragraph (21)(A)—

2 (A) in clause (ii), by striking ‘‘or’’ after

3 the semicolon;

4 (B) in clause (iii), by inserting ‘‘or’’ after

5 the semicolon; and

6 (C) by adding at the end the following new

7 clause:

8 ‘‘(iv) an individual who—

9 ‘‘(I) is a member of the family or

10 a guest of the owner or charterer; and

11 ‘‘(II) is not a passenger for

12 hire;’’;

13 (13) by striking paragraph (40) and inserting

14 the following:

15 ‘‘(40) ‘towing vessel’ means any commercial

16 vessel engaged in, or that a person intends to use to

17 engage in, the service of—

18 ‘‘(A) towing, pulling, pushing, or hauling

19 alongside (or any combination thereof); or

20 ‘‘(B) assisting in towing, pulling, pushing,

21 or hauling alongside;’’; and

22 (14) by inserting after paragraph (40) the fol23 lowing new paragraphs:

24 ‘‘(40a) ‘towing of a vessel by a towing vessel be25 tween points’ means attaching a towing vessel to a
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1 towed vessel (including any barge) at 1 point and re2 leasing the towed vessel from the towing vessel at

3 another point, regardless of the origin or ultimate

4 destination of either the towed vessel or the towing

5 vessel; and

6 ‘‘(40b) ‘transportation of merchandise or pas7 sengers by water between points’ means, without re8 gard to the origin or ultimate destination of the

9 merchandise or passengers involved—

10 ‘‘(A) in the case of merchandise, loading

11 merchandise at 1 point and permanently un12 loading the merchandise at another point; or

13 ‘‘(B) in the case of passengers, embarking

14 passengers at 1 point and permanently dis15 embarking the passengers at another point.’’.

16 SEC. 3. DOCUMENTATION.

17 (a) DEFINITIONS.—Section 12101(b)(2) of title 46,

18 United States Code, is amended—

19 (1) by striking paragraph (2) and inserting the

20 following:

21 ‘‘(2) ‘license’, ‘enrollment and license’, ‘license

22 for the coastwise (or coasting) trade’, ‘enrollment

23 and license for the coastwise (or coasting) trade’,

24 and ‘enrollment and license to engage in the foreign

25 and coastwise (or coasting) trade on the northern,
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1 northeastern, and northwestern frontiers, otherwise

2 than by sea’ mean a coastwise endorsement provided

3 in section 12106.’’;

4 (2) by striking paragraph (3); and

5 (3) by redesignating paragraph (4) as para6 graph (3).

7 (b) VESSELS ELIGIBLE FOR DOCUMENTATION.—Sec8 tion 12102(a) of title 46, United States Code, is amend9 ed—

10 (1) by striking all that precedes paragraph (5)

11 and inserting the following:

12 ‘‘(a) A vessel of at least 5 net tons that is not reg13 istered under the laws of a foreign country or that is not

14 titled in a State is eligible for documentation if—

15 ‘‘(1)(A) the vessel is owned by an individual

16 who is a citizen of the United States, or a corpora17 tion, association, trust, joint venture, partnership,

18 limited liability company, or other entity that is a

19 citizen of the United States; and

20 ‘‘(B) the owner of the vessel is capable of hold21 ing title to a vessel under the laws of the United

22 States or under the laws of a State;’’; and

23 (2) by redesignating paragraphs (5) and (6) as

24 paragraphs (2) and (3), respectively.
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1 (c) COASTWISE ENDORSEMENTS.—Section 12106 of

2 title 46, United States Code, is amended to read as fol3 lows:

4 ‘‘§ 12106. Coastwise endorsements and certificates

5 ‘‘(a) IN GENERAL.—A certificate of documentation

6 may be endorsed with a coastwise endorsement for a vessel

7 that is eligible for documentation.

8 ‘‘(b) ELIGIBILITY.—

9 ‘‘(1) IN GENERAL.—Any of the following vessels

10 may be issued a certificate to engage in the coast11 wise trade if the Secretary of Transportation makes

12 a finding, pursuant to information obtained and fur13 nished by the Secretary of State, that the govern14 ment of the nation of registry of such vessel extends

15 reciprocal privileges to vessels of the United States

16 to engage in the transportation of merchandise or

17 passengers (or both) in its coastwise trade:

18 ‘‘(A) A foreign qualified vessel (as defined

19 in section 2101(11d)).

20 ‘‘(B) A vessel of foreign registry—

21 ‘‘(i) if the vessel is subject to a demise

22 or bareboat charter, for the duration of

23 that charter, to a person or entity that

24 would be eligible to document that vessel if
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1 that person or entity were the owner of the

2 vessel; or

3 ‘‘(ii) that engages irregularly in the

4 coastwise trade of the United States.

5 ‘‘(2) VESSEL ENGAGING IRREGULARLY IN THE

6 COASTWISE TRADE.—For purposes of this sub7 section, a vessel engages irregularly in the coastwise

8 trade of the United States if that vessel—

9 ‘‘(A) during any 60-day period does not

10 make, in the aggregate, more than 4 calls to

11 United States ports; and

12 ‘‘(B) during any calendar year does not

13 make, in the aggregate, more than 6 calls to

14 United States ports.

15 ‘‘(c) EMPLOYMENT IN THE COASTWISE TRADE.—

16 Subject to the applicable laws of the United States regu17 lating the coastwise trade and trade with Canada, only

18 a vessel with a certificate of documentation endorsed with

19 a coastwise endorsement or with a certificate issued under

20 subsection (b) may be employed in the coastwise trade.’’.

21 (d) INLAND WATERWAYS ENDORSEMENTS.—Section

22 12107 of title 46, United States Code, is amended to read

23 as follows:
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1 ‘‘§ 12107. Inland waterways endorsements

2 ‘‘A certificate of documentation may be endorsed with

3 an inland waterways endorsement for a vessel that—

4 ‘‘(1) is eligible for documentation; and

5 ‘‘(2)(A) was built in the United States; or

6 ‘‘(B) was not built in the United States; but

7 was—

8 ‘‘(i) captured in war by citizens of the

9 United States and lawfully condemned as prize;

10 ‘‘(ii) adjudged to be forfeited for a breach

11 of the laws of the United States; or

12 ‘‘(iii) is qualified for documentation under

13 section 4136 of the Revised Statutes (46 App.

14 U.S.C. 14).’’.

15 (e) LIMITATIONS ON OPERATIONS AUTHORIZED BY

16 CERTIFICATES.—Section 12110(b) of title 46, United

17 States Code, is amended—

18 (1) by striking ‘‘coastwise trade’’ and inserting

19 ‘‘coastwise trade or inland waterways trade’’; and

20 (2) by striking ‘‘that trade’’ and inserting

21 ‘‘those trades’’.
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1 SEC. 4. TRANSPORTATION OF MERCHANDISE IN THE

2 COASTWISE AND INLAND WATERWAYS

3 TRADES.

4 (a) IN GENERAL.—Section 27 of the Merchant Ma5 rine Act, 1920 (46 U.S.C. App. 883) is amended to read

6 as follows:

7 ‘‘SEC. 27. PROHIBITION.

8 ‘‘No merchandise, including merchandise owned by

9 the United States Government, a State (as defined in sec10 tion 2101 of title 46, United States Code), or a political

11 subdivision of a State, and including material without

12 value, shall be transported by water, on penalty of forfeit13 ure of the merchandise (or a monetary amount not to ex14 ceed the value of the merchandise, as determined by the

15 Secretary of the Treasury, or the actual cost of the trans16 portation, whichever is greater, to be recovered from any

17 cosigner, seller, owner, importer, consignee, agent, or

18 other person that transports or causes the merchandise

19 to be transported by water)—

20 ‘‘(1) in the coastwise trade, in any vessel other

21 than—

22 ‘‘(A) a vessel documented with a coastwise

23 endorsement under section 12106(a) of title 46,

24 United States Code; or

25 ‘‘(B) a vessel that has been issued coast26 wise certification under section 12106(b) of title
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1 46, United States Code, that is in effect for en2 gaging in the transportation of merchandise; or

3 ‘‘(2) in the inland waterways trade in any vessel

4 other than a vessel documented with an inland wa5 terways endorsement under section 12107 of title

6 46, United States Code.’’.

7 (b) REPEAL.—Section 27A of the Merchant Marine

8 Act, 1920 (46 App. U.S.C. 883–1) is repealed.

9 SEC. 5. TRANSPORTATION OF PASSENGERS.

10 (a) IN GENERAL.—Section 8 of the Act of June 19,

11 1886 (24 Stat. 81, chapter 421; 46 U.S.C. App. 289) is

12 amended to read as follows:

13 ‘‘SEC. 8. PROHIBITION.

14 ‘‘No passengers shall be transported by water, on

15 penalty of $200 for each passenger so transported or the

16 actual cost of the transportation, whichever is greater, to

17 be recovered from the vessel so transporting the pas18 senger—

19 ‘‘(1) in the coastwise trade, in any vessel other

20 than—

21 ‘‘(A) a vessel documented with a coastwise

22 endorsement under section 12106 of title 46,

23 United States Code; or

24 ‘‘(B) a vessel that has been issued a coast25 wise certification under section 12106(b) of title
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1 46, United States Code, that is in effect for en2 gaging in the transportation of merchandise;

3 and

4 ‘‘(2) in the inland waterways trade, in any ves5 sel other than a vessel documented with an inland

6 waterways endorsement under section 12107 of title

7 46, United States Code.’’.

8 (b) REPEALS.—The following provisions are repealed:

9 (1) The Act of April 26, 1938 (52 Stat. 223,

10 chapter 174; 46 U.S.C. App. 289a).

11 (2) Section 12(22) of the Maritime Act of 1981

12 (46 U.S.C. App. 289b).

13 (3) Public Law 98–563 (46 U.S.C. App. 289c).

14 SEC. 6. TOWING AND SALVAGING OPERATIONS.

15 Section 4370(a) of the Revised Statutes (46 U.S.C.

16 App. 316(a)) is amended to read as follows:

17 ‘‘(a)(1) No vessel (including any barge), other than

18 a vessel in distress, may be towed—

19 ‘‘(A) in the coastwise trade by any vessel other

20 than—

21 ‘‘(i) a vessel documented with a coastwise

22 endorsement under section 12106(a) of title 46,

23 United States Code; or

24 ‘‘(ii) a vessel registered in a foreign coun25 try, if the Secretary of the Treasury finds, pur-
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1 suant to information furnished by the Secretary

2 of State, that the government of that foreign

3 country and the government of the country of

4 which each ultimate owner of the towing vessel

5 is a citizen extend reciprocal privileges to ves6 sels of the United States to tow vessels (includ7 ing barges) in the coastal waters of that coun8 try; or

9 ‘‘(B) in the inland waterways trade by any ves10 sel other than a vessel documented with an inland

11 waterways endorsement under section 12107 of title

12 46, United States Code.

13 ‘‘(2)(A) The owner and master of any vessel that

14 tows another vessel (including a barge) in violation of this

15 section shall each be liable to the United States Govern16 ment for a civil penalty in an amount not less than $250

17 and not greater than $1,000. The penalty shall be enforce18 able through the district court of the United States for

19 any district in which the offending vessel is found.

20 ‘‘(B) A penalty specified in subparagraph (A) shall

21 constitute a lien upon the offending vessel, and that vessel

22 shall not be granted clearance until that penalty is paid.

23 ‘‘(C) In addition to the penalty specified in subpara24 graph (A), the offending vessel shall be liable to the Unit25 ed States Government for a civil penalty in an amount
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1 equal to $50 per ton of the measurement of the vessel

2 towed in violation of this section, which shall be recover3 able in a libel or other enforcement action conducted

4 through the district court for the United States for the

5 district in which the offending vessel is found.’’.

6 SEC. 7. DREDGING OPERATIONS.

7 The first section of the Act of May 28, 1906 (34 Stat.

8 204, chapter 2566; 46 U.S.C. App. 292), is amended to

9 read as follows:

10 ‘‘SECTION 1. VESSELS THAT MAY ENGAGE IN DREDGING.

11 ‘‘(a) IN GENERAL.—A vessel may engage in dredging

12 operations—

13 ‘‘(1) on the navigable waters included in the

14 coastwise trade, if—

15 ‘‘(A) the vessel is documented with a coast16 wise endorsement under section 12106(a) of

17 title 46, United States Code; or

18 ‘‘(B) the vessel is registered in a foreign

19 country and the Secretary of the Treasury

20 finds, pursuant to information furnished by the

21 Secretary of State, that the government of that

22 foreign country and each government of the

23 country of which an ultimate owner of the ves24 sel is a citizen extend reciprocal privileges to

25 vessels of the United States to engage in dredg-
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1 ing operations in the coastal waters of that

2 country; or

3 ‘‘(2) on the navigable waters included in the in4 land waterways trade, if—

5 ‘‘(A) the vessel is documented with an in6 land waterways endorsement under section

7 12107 of title 46, United States Code; or

8 ‘‘(B) the vessel would be qualified to be

9 documented under the laws of the United

10 States with a coastwise endorsement under sec11 tion 12106(a) of title 46, United States Code,

12 except that the vessel was not built in the Unit13 ed States.

14 ‘‘(b) PENALTIES.—When a vessel is operated in

15 knowing violation of this section, that vessel and its equip16 ment are liable to seizure by and forfeiture to the United

17 States Government.’’.

18 SEC. 8. 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—

22 (1) in subsection (a)—

23 (A) by inserting a period after ‘‘possession

24 thereof’’; and
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1 (B) by striking all that follows the period

2 inserted in subparagraph (A) through the end

3 of the subsection; and

4 (2) by striking subsection (c).

5 (b) APPROVAL OF TRANSFER OF REGISTRY OR OP6 ERATION UNDER AUTHORITY OF A FOREIGN COUNTRY OR

7 FOR SCRAPPING IN A FOREIGN COUNTRY; PENALTIES.—

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

9 is amended—

10 (1) by striking subsection (c) and inserting the

11 following:

12 ‘‘(c) Except as provided in section 611 of the Mer13 chant Marine Act, 1936 (46 U.S.C. App. 1181) and sec14 tion 31322(a)(1)(D) of title 46, United States Code, a

15 person may not, without the approval of the Secretary of

16 Transportation—

17 ‘‘(1) place under foreign registry—

18 ‘‘(A) a documented vessel; or

19 ‘‘(B) a vessel with respect to which the last

20 documentation was made under the laws of the

21 United States;

22 ‘‘(2) operate a vessel referred to in paragraph

23 (1) under the authority of a foreign government; or
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1 ‘‘(3) scrap or transfer for scrapping a vessel re2 ferred to in paragraph (1) in a foreign country.’’;

3 and

4 (2) by striking subsection (d) and inserting the

5 following:

6 ‘‘(d)(1) A person that places a documented vessel

7 under foreign registry, operates that vessel under the au8 thority of a foreign country, or scraps or transfers for

9 scrapping that vessel in a foreign country—

10 ‘‘(A) in violation of this section and knowing

11 that that placement, operation, scrapping, or trans12 fer for scrapping is a violation of this section shall,

13 upon conviction, be fined under title 18, United

14 States Code, imprisoned for not more than 5 years,

15 or both; or

16 ‘‘(B) otherwise in violation of this section shall

17 be liable to the United States Government for a civil

18 penalty of not more than $10,000 for each violation.

19 ‘‘(2) A documented vessel may be seized by, and for20 feited to, the United States Government if that vessel is

21 placed under foreign registry, operated under the author22 ity of a foreign country, or scrapped or transferred for

23 scrapping in a foreign country in violation of this sec24 tion.’’.
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1 SEC. 9. 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 1 or more ports in the Unit15 ed 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. 10. REGULATIONS REGARDING VESSELS.

4 (a) APPLICABLE MINIMUM REQUIREMENTS.—Except

5 as provided in paragraph (2), 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 paragraph (1) is inconsistent with

16 a minimum that is applicable to vessels that are docu17 mented in a foreign country and that are admitted to en18 gage in the transportation of cargo and merchandise in

19 the United States coastwise trade, the standard applicable

20 to United States documented vessels shall be deemed to

21 be the standard applicable to vessels that are documented

22 in a foreign country.

23 (c) MINIMUM REQUIREMENTS FOR VESSELS.—As

24 used in this subsection, the term ‘‘minimum requirements

25 for vessels’’ means, with respect to vessels (including Unit-
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1 ed States documented vessels and foreign documented ves2 sels), all safety, manning, inspection, construction, and

3 equipment requirements applicable to those vessels in

4 United States coastwise passenger trade, to the extent

5 that those requirements are consistent with applicable

6 international law and treaties to which the United States

7 is a signatory.

8 SEC. 11. ENVIRONMENT.

9 All vessels, whether documented under the laws of the

10 United States or not, regularly engaging in the United

11 States coastwise trade shall comply with all applicable

12 United States and international environmental standards

13 in force for the United States.

14 SEC. 12. GENERAL REQUIREMENTS.

15 Each person or entity that is not a citizen of the

16 United States, as defined in section 2101(3a) of title 46,

17 United States Code, that owns or operates vessels that

18 regularly engage in the United States domestic coastwise

19 trade shall—

20 (1) establish an office or place, and qualify

21 under the laws of that place, to do business in the

22 United States;

23 (2) name an agent upon whom process may be

24 served;
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1 (3) abide by all applicable laws of the United

2 States, including applicable environmental, labor,

3 and tax laws; and

4 (4) post evidence of—

5 (A) financial responsibility in amounts as

6 considered necessary by the Secretary of Trans7 portation for the business activities of that per8 son or entity; and

9 (B) compliance with applicable United

10 States laws.

Æ