I

107TH CONGRESS

1ST SESSION H. R. 2046

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

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 26 (legislative day, MAY 25), 2001

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 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 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’’.

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) The cost of building ships in the United

4 States is so uncompetitive with international ship5 builders that it is effectively prohibiting the growth

6 and modernization of the Jones Act fleet.

7 (3) The decline of ships of over 1,000 tons in

8 the Jones Act fleet as well as the resulting decrease

9 in the number of sailors represents a diminution in

10 emergency sealift capacity in times of national emer11 gency.

12 (4) In the last several decades, the size of the

13 active United States domestic deepwater fleet has

14 shrunk substantially, to a total today of only 130

15 self-propelled oceangoing vessels of over 1,000 tons

16 and 59 vessels in the Great Lakes.

17 (5) The result has been shipping shortages,

18 higher prices, and significant commercial transpor19 tation inefficiencies, all of which can be alleviated,

20 without any cost to the taxpayer, by increasing com21 petition in domestic deepwater shipping.

22 (6) Such inefficiencies reduce our ability to

23 move good, such as agriculture and petroleum prod24 ucts, and undermine the competitive position of a

25 broad range of American businesses, particularly in
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1 potential domestic markets, versus their foreign

2 competition. These shipping shortages and higher3 than-market prices have led to the loss of American

4 jobs to overseas competitors able to purchase trans5 portation services on the international market.

6 (7) Lack of access to adequate deepwater com7 mercial waterborne transportation alternatives sup8 presses economic activity in an amount of between

9 $4,200,000,000 and $10,000,000,000 annually and

10 causes the loss of associated tax revenue, according

11 to a study by the United States International Trade

12 Commission.

13 (8) American mariners and water carriers are

14 dedicated to providing the high-quality service that

15 their customers deserve, but flexibility in capital in16 vestment is needed to acquire the modern equipment

17 essential to satisfy the current and potential demand

18 for superior deepwater domestic cargo transportation

19 service.

20 (9) Eliminating international capital investment

21 restrictions on the deepwater domestic transpor22 tation industry will help American ocean transpor23 tation companies to provide the world class service

24 American manufacturers, farmers, consumers, and

25 taxpayers deserve.
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1 (10) Similarly, permitting domestic transpor2 tation service providers to purchase their vessels on

3 the international market without penalty will lower

4 their operating expenses, creating savings which they

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

6 prices and improved efficiency.

7 (11) Allowing American domestic deepwater

8 commercial carriers to comply with appropriate

9 international operating and construction standards

10 to which the United States is a party through trea11 ties and conventions will further lower operating ex12 penses and reduce the cost of the service provided by

13 those companies.

14 (12) Rationalizing the tort and liability provi15 sions governing the maritime industry will help re16 duce the insurance costs of employers and diminish

17 the need for costly and contentious litigation to set18 tle worker injury claims.

19 (13) Liberalizing the regulations currently gov20 erning the domestic deepwater transportation of

21 cargo will encourage a renaissance in the Nation’s

22 waterborne coastal trades, reducing highway conges23 tion, road damage, and air and noise pollution, and

24 will substantially contribute to the ability of Amer-
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1 ican commercial enterprise to compete against for2 eign companies.

3 SEC. 2. MISCELLANEOUS AMENDMENTS TO DEFINITIONS IN

4 TITLE 46, UNITED STATES CODE.

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

6 amended—

7 (1) by striking paragraph (3a) and inserting

8 the following:

9 ‘‘(3a) ‘citizen of the United States’ means—

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

11 defined in section 101(a)(22) of the Immigra12 tion and Nationality Act (8 U.S.C.

13 1101(a)(22));

14 ‘‘(ii) a corporation established under the

15 laws of the United States or under the laws of

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

17 United States, that has—

18 ‘‘(I) a president or other chief execu19 tive officer and chairman of the board of

20 directors of that corporation who are citi21 zens of the United States; and

22 ‘‘(II) a board of directors on which no

23 more of its directors than a minority of the

24 number necessary to constitute a quorum

25 are noncitizens;
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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 one general

4 partner who is a citizen of the United States;

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

6 who is a citizen of the United States; or

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

8 liability company, or other entity that has at

9 least one member who is a citizen of the United

10 States; but

11 ‘‘(B) such term does not include—

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

13 under clause (ii), (iii), (iv), or (v) of sub14 paragraph (A), any parent corporation,

15 partnership, or other person (other than

16 an individual) or entity that is a second- or

17 higher-tier owner (as that term is defined

18 by the Secretary) of the person or entity

19 described in clauses (ii), (iii), or (v), as ap20 plicable; or

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

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

23 (2) by inserting after paragraph (4) the fol24 lowing new paragraph:

25 ‘‘(4a) ‘coastwise trade’—
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1 ‘‘(A) subject to subparagraph (B), means

2 the transportation by water of merchandise or

3 passengers, or the towing of a vessel between

4 points, or dredging operations embraced within

5 the coastwise laws of the United States—

6 ‘‘(i) in the United States (including

7 any district, territory, or possession of the

8 United States);

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

10 any tributary or connecting waters of the

11 Great Lakes and the Saint Lawrence Sea12 way);

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

14 Outer Continental Shelf subject to the

15 Outer Continental Shelf Lands Act (43

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

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

18 ‘‘(B) does not include the activities speci19 fied in subparagraph (A) on the navigable wa20 ters included in the inland waterways trade ex21 cept for activities specified in subparagraph (A)

22 that occur on mixed waters.’’;

23 (3) by inserting after paragraph (11c) the fol24 lowing new paragraph:
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1 ‘‘(11d) ‘foreign qualified vessel’ means a

2 vessel—

3 ‘‘(A) registered in a foreign country;

4 ‘‘(B) the owner of which is a citizen of the

5 United States; and

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

7 extent required of vessels registered under sec8 tion 12102 of this title.’’;

9 (4) by redesignating paragraph (14a) as para10 graph (14b);

11 (5) by inserting after paragraph (14) the fol12 lowing new paragraph:

13 ‘‘(14a) ‘inland waterways trade’—

14 ‘‘(A) means—

15 ‘‘(i) the transportation of merchandise

16 or passengers on the navigable rivers, ca17 nals, lakes other than the Great Lakes, or

18 other waterways inside the Boundary Line;

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

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

21 or

22 ‘‘(iii) engaging in dredging operations

23 in the waters specified in clause (i); and
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1 ‘‘(B) includes any activity specified in sub2 paragraph (A) that is conducted in mixed wa3 ters.’’;

4 (6) by redesignating paragraph (15a) as para5 graph (15b);

6 (7) by inserting after paragraph (15) the fol7 lowing:

8 ‘‘(15a) ‘mixed waters’ means—

9 ‘‘(A) the waters of the harbors and ports

10 both on the coasts and on the Great Lakes of

11 the United States; and

12 ‘‘(B) the rivers, canals, and other water13 ways tributary to the Great Lakes or to the

14 coastal harbors and coasts of the United States

15 inside the Boundary Line,

16 that the Secretary of Transportation determines to

17 be navigable by oceangoing vessels.’’;

18 (8) by redesignating paragraph (17b) as para19 graph (17c);

20 (9) by inserting after paragraph (17a) the fol21 lowing:

22 ‘‘(17b) ‘noncontiguous trade’ means transpor23 tation by water of merchandise or passengers, or

24 towing by towing vessels—

25 ‘‘(A) between—
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1 ‘‘(i) a point in the 48 continental

2 States and the District of Columbia; and

3 ‘‘(ii) a point in Hawaii, Alaska, Puer4 to Rico, Guam, the Virgin Islands, Amer5 ican Samoa, the Northern Mariana Is6 lands, or any other noncontiguous territory

7 or possession of the United States, as em8 braced within the coastwise laws of the

9 United States; or

10 ‘‘(B) between two points described in sub11 paragraph (A)(ii).’’;

12 (10) in paragraph (21)(A)—

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

14 the semicolon;

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

16 the semicolon; and

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

18 clause:

19 ‘‘(iv) an individual who—

20 ‘‘(I) is a member of the family or

21 a guest of the owner or charterer; and

22 ‘‘(II) is not a passenger for

23 hire;’’;

24 (11) by striking paragraph (40) and inserting

25 the following:
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1 ‘‘(40) ‘towing vessel’ means any commercial

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

3 engage in, the service of—

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

5 alongside (or any combination thereof); or

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

7 or hauling alongside.’’; and

8 (12) by inserting after paragraph (40) the fol9 lowing new paragraphs:

10 ‘‘(40a) ‘towing of a vessel by a towing vessel be11 tween points’ means attaching a towing vessel to a

12 towed vessel (including any barge) at one point and

13 releasing the towed vessel from the towing vessel at

14 another point, regardless of the origin or ultimate

15 destination of either the towed vessel or the towing

16 vessel.

17 ‘‘(40b) ‘transportation of merchandise or pas18 sengers by water between points’ means, without re19 gard to the origin or ultimate destination of the

20 merchandise or passengers involved—

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

22 merchandise at one point and permanently un23 loading the merchandise at another point; or
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1 ‘‘(B) in the case of passengers, embarking

2 passengers at one point and permanently dis3 embarking the passengers at another point.’’.

4 SEC. 3. DOCUMENTATION.

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

6 United States Code, is amended—

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

8 following:

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

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

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

12 and ‘enrollment and license to engage in the foreign

13 and coastwise (or coasting) trade on the northern,

14 northeastern, and northwestern frontiers, otherwise

15 than by sea’ mean a coastwise endorsement as pro16 vided in section 12106.’’; and

17 (2) by redesignating paragraph (4) as para18 graph (3).

19 (b) VESSELS ELIGIBLE FOR DOCUMENTATION.—Sec20 tion 12102(a) of title 46, United States Code, is

21 amended—

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

23 and inserting the following:
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1 ‘‘(a) A vessel of at least 5 net tons that is not reg2 istered under the laws of a foreign country or that is not

3 titled in a State is eligible for documentation if—

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

5 who is a citizen of the United States, or by a cor6 poration, association, trust, joint venture, partner7 ship, limited liability company, or other entity that

8 is a citizen of the United States; and

9 ‘‘(B) the owner of the vessel is capable of hold10 ing title to a vessel under the laws of the United

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

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

13 paragraphs (2) and (3), respectively.

14 (c) COASTWISE ENDORSEMENTS.—

15 (1) IN GENERAL.—Section 12106 of title 46,

16 United States Code, is amended—

17 (A) by amending the section heading to

18 read as follows:

19 ‘‘§ 12106. Coastwise endorsements and certificates’’;

20 (B) by redesignating subsections (c), (d),

21 and (e) as subsections (d), (e), and (f); and

22 (C) by striking subsections (a) and (b) and

23 inserting the following:
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1 ‘‘(a) COASTWISE ENDORSEMENTS.—A certificate of

2 documentation may be endorsed with a coastwise endorse3 ment for a vessel that is eligible for documentation.

4 ‘‘(b) COASTWISE CERTIFICATES.—

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

6 may be issued a certificate to engage in the coast7 wise trade if the Secretary of Transportation makes

8 a finding, pursuant to information obtained and fur9 nished by the Secretary of State, that the govern10 ments of the nations of registry and of the citizen11 ship or nationality of each owner of record (and, if

12 that owner is not an individual or individuals, then

13 the individual or individuals at the ultimate tier of

14 ownership) of such vessel extend reciprocal privileges

15 to vessels of the United States to engage in the

16 transportation of merchandise or passengers (or

17 both) in its or their coastwise trades:

18 ‘‘(A) A foreign qualified vessel.

19 ‘‘(B) A vessel of foreign registry if that

20 vessel engages irregularly in the coastwise trade

21 of the United States.

22 ‘‘(2) VESSEL ENGAGING IRREGULARLY IN THE

23 COASTWISE TRADE.—For purposes of this sub24 section, a vessel engages irregularly in the coastwise

25 trade of the United States if that vessel—
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1 ‘‘(A) during any 60-day period does not

2 make, in the aggregate, more than four calls to

3 United States ports;

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

5 make, in the aggregate, more than six calls to

6 United States ports; and

7 ‘‘(C) is owned by any person whose vessels

8 make not more than 18 calls to United States

9 ports during any calendar year.

10 For purposes of subparagraph (C), all persons treat11 ed as a single employer under subsection (a) or (b)

12 of section 52 of the Internal Revenue Code of 1986

13 shall be treated as 1 person for purposes of the pre14 ceding sentence.

15 ‘‘(c) EMPLOYMENT OF A VESSEL IN THE COASTWISE

16 TRADE.—Subject to the applicable laws of the United

17 States regulating the coastwise trade and trade with Can18 ada, only a vessel with a certificate of documentation en19 dorsed with a coastwise endorsement or with a certificate

20 issued under subsection (b) may be employed in the coast21 wise trade.’’.

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions at the beginning of chapter 121 of title 46,

24 United States Code, is amended by striking the item

25 relating to section 12106 and inserting the fol-
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1 lowing:

‘‘12106. Coastwise endorsements and certificates.’’.

2 (d) INLAND WATERWAYS ENDORSEMENTS.—

3 (1) IN GENERAL.—Chapter 121 of title 46,

4 United States Code, is amended by inserting after

5 section 12106 the following new section:

6 ‘‘§ 12107. Inland waterways endorsements

7 ‘‘A certificate of documentation may be endorsed with

8 an inland waterways endorsement for a vessel that—

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

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

11 ‘‘(B) was not built in the United States, but—

12 ‘‘(i) was captured in war by citizens of the

13 United States and lawfully condemned as prize;

14 ‘‘(ii) was adjudged to be forfeited for a

15 breach of the laws of the United States; or

16 ‘‘(iii) is qualified for documentation under

17 section 4136 of the Revised Statutes (46 App.

18 U.S.C. 14).’’.

19 (2) CONFORMING AMENDMENT.—The table of

20 sections at the beginning of chapter 121 of title 46,

21 United States Code, is amended by inserting after

22 the item relating to section 12106 the following:

‘‘12107. Inland waterways endorsements.’’.
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1 (e) LIMITATIONS ON OPERATIONS AUTHORIZED BY

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

3 States Code, is amended—

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

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

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

7 ‘‘those trades’’.

8 SEC. 4. TRANSPORTATION OF MERCHANDISE IN THE

9 COASTWISE AND INLAND WATERWAYS

10 TRADES.

11 (a) IN GENERAL.—Section 27 of the Merchant Ma12 rine Act, 1920 (46 U.S.C. App. 883) is amended to read

13 as follows:

14 ‘‘SEC. 27. PROHIBITION.

15 ‘‘No merchandise, including merchandise owned by

16 the United States Government, a State (as defined in sec17 tion 2101 of title 46, United States Code), or a political

18 subdivision of a State, and including material without

19 value, shall be transported by water, on penalty of for20 feiture of the merchandise (or a monetary amount not to

21 exceed the value of the merchandise, as determined by the

22 Secretary of the Treasury, or the actual cost of the trans23 portation, whichever is greater, to be recovered from any

24 cosigner, seller, owner, importer, consignee, agent, or
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1 other person that transports or causes the merchandise

2 to be transported by water)—

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

4 than—

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

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

7 United States Code; or

8 ‘‘(B) a vessel that has been issued a coast9 wise certificate under section 12106(b) of title

10 46, United States Code, that is in effect for en11 gaging in the transportation of merchandise; or

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

13 other than a vessel documented with an inland wa14 terways endorsement under section 12107 of title

15 46, United States Code.’’.

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

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

18 SEC. 5. TRANSPORTATION OF PASSENGERS.

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

20 1886 (24 Stat. 81, chapter 421; 46 U.S.C. App. 289) is

21 amended to read as follows:

22 ‘‘SEC. 8. PROHIBITION.

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

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

25 actual cost of the transportation, whichever is greater, to
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1 be recovered from the vessel so transporting the

2 passenger—

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

4 than—

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

6 endorsement under section 12106 of title 46,

7 United States Code; or

8 ‘‘(B) a vessel that has been issued a coast9 wise certificate under section 12106(b) of title

10 46, United States Code, that is in effect for en11 gaging in the transportation of merchandise;

12 and

13 ‘‘(2) in the inland waterways trade, in any ves14 sel other than a vessel documented with an inland

15 waterways endorsement under section 12107 of title

16 46, United States Code.’’.

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

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

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

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

21 (46 U.S.C. App. 289b).

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

23 SEC. 6. TOWING AND SALVAGING OPERATIONS.

24 Section 4370 of the Revised Statutes (46 U.S.C. App.

25 316) is amended—
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1 (1) by striking subsection (b), and by redesig2 nating subsections (c), (d), and (e) as subsections

3 (b), (c), and (d);

4 (2) by amending subsections (a), (b), and (c) to

5 read as follows:

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

7 vessel in distress, may be towed—

8 ‘‘(1) in the coastwise trade or, when the towed

9 vessel is transporting valueless material or any

10 dredged material, regardless of whether it has com11 mercial value, from a point or place in the United

12 States or a point or place on the high seas within

13 the Exclusive Economic Zone as defined in the Pres14 idential Proclamation of March 10, 1983, to another

15 point or place in the United States or a point or

16 place on the high seas within the Exclusive Eco17 nomic Zone, by any vessel other than—

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

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

20 United States Code;

21 ‘‘(B) a vessel registered in a foreign coun22 try, if the Secretary of Transportation makes a

23 finding, pursuant to information obtained and

24 furnished by the Secretary of State, that the

25 governments of the nations of registry and of
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1 the citizenship or nationality of each owner of

2 record (and if such owner is not an individual,

3 than the individual at the ultimate tier of own4 ership) of such vessel extend reciprocal privi5 leges to vessels of the United States to tow ves6 sels (including barges) in the coastal waters of

7 those countries; or

8 ‘‘(2) in the inland waterways trade by any ves9 sel other than a vessel documented with an inland

10 waterways endorsement under section 12107 of title

11 46, United States Code.

12 ‘‘(b)(1) The owner and master of any vessel that tows

13 another vessel (including a barge) in violation of this sec14 tion shall each be liable to the United States Government

15 for a civil penalty in an amount not less than $250 and

16 not greater than $1,000. The penalty shall be enforceable

17 through the district court of the United States for any

18 district in which the offending vessel is found.

19 ‘‘(2) A penalty specified in paragraph (1) shall con20 stitute a lien upon the offending vessel, and that vessel

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

22 ‘‘(3) In addition to the penalty specified in paragraph

23 (1), the offending vessel shall be liable to the United

24 States Government for a civil penalty in an amount equal

25 to $50 per ton of the measurement of the vessel towed
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1 in violation of this section, which shall be recoverable in

2 a libel or other enforcement action conducted through the

3 district court for the United States for the district in

4 which the offending vessel is found.

5 ‘‘(c)(1) No vessel shall engage in salvaging operations

6 on the Atlantic or Pacific coast of the United States, in

7 any portion of the Great Lakes or their connecting or trib8 utary waters, including any portion of the Saint Lawrence

9 River through which the international boundary line ex10 tends, or in territorial waters of the United States on the

11 Gulf of Mexico, except—

12 ‘‘(A) a vessel that is documented under the laws

13 of the United States;

14 ‘‘(B) a vessel registered in a foreign country, if

15 the Secretary of Transportation makes a finding,

16 pursuant to information obtained and furnished by

17 the Secretary of State, that the governments of the

18 nations of registry and the citizenship or nationality

19 of each owner of record (and if such owner is not

20 an individual, than the individual at the ultimate tier

21 of ownership) of such vessel extend reciprocal privi22 leges to vessels of the United States to engage in

23 salvaging operations in the coastal waters of those

24 countries;
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1 ‘‘(C) a vessel that is authorized by a treaty or

2 in accordance with the provisions of section 725 of

3 this title;

4 ‘‘(D) a vessel that is aiding or saving vessels or

5 lives in distress; or

6 ‘‘(E) a vessel for which the Commissioner of

7 Customs is satisfied that no suitable vessel wholly

8 owned by a person or persons who are citizens of the

9 United States and documented under the laws of the

10 United States is available in any particular locality

11 and authorizes the use of a foreign vessel or vessels

12 in salvaging operation or operations in that locality.

13 ‘‘(2) A vessel operated in violation of this subsection

14 is subject to seizure and forfeiture by and to the United

15 States Government in a libel or other enforcement action

16 in the district court of the United States for the district

17 in which the offending vessel is found.’’.

18 SEC. 7. DREDGING OPERATIONS.

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

20 204, chapter 2566; 46 U.S.C. App. 292), is amended to

21 read as follows:

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

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

24 operations—
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1 ‘‘(1) on the navigable waters included in the

2 coastwise trade, if—

3 ‘‘(A) the vessel is documented with a coast4 wise endorsement under section 12106(a) of

5 title 46, United States Code; or

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

7 country and the Secretary of Transportation

8 makes a finding, pursuant to information ob9 tained and furnished by the Secretary of State,

10 that the governments of the nations of registry

11 and the citizenship or nationality of each owner

12 of record (and if such owner is not an indi13 vidual, than the individual at the ultimate tier

14 of ownership) of such vessel extend reciprocal

15 privileges to vessels of the United States to en16 gage in dredging operations in the coastal wa17 ters of those countries;

18 ‘‘(2) on the navigable waters included in the in19 land waterways trade, if—

20 ‘‘(A) the vessel is documented with an in21 land waterways endorsement under section

22 12107 of title 46, United States Code; or

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

24 documented under the laws of the United

25 States with a coastwise endorsement under sec-
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1 tion 12106(a) of title 46, United States Code,

2 except that the vessel was not built in the

3 United States.

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

5 knowing violation of this section, that vessel and its equip6 ment are liable to seizure by and forfeiture to the United

7 States Government.’’.

8 SEC. 8. CITIZENSHIP AND TRANSFER PROVISIONS.

9 (a) CITIZENSHIP OF CORPORATIONS, PARTNERSHIPS,

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

11 (46 U.S.C. App. 802) is amended—

12 (1) in subsection (a)—

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

14 thereof’’; and

15 (B) by striking all that follows the period

16 inserted in subparagraph (A) through the end

17 of the subsection; and

18 (2) by striking subsection (c).

19 (b) APPROVAL OF TRANSFER OF REGISTRY OR OP20 ERATION UNDER AUTHORITY OF A FOREIGN COUNTRY OR

21 FOR SCRAPPING IN A FOREIGN COUNTRY; PENALTIES.—

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

23 is amended—

24 (1) by amending subsection (d)(4) to read as

25 follows:
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1 ‘‘(4) A person that charters, sells, or transfers

2 a vessel, or interest in or control of a vessel, or

3 places a documented vessel under foreign registry, or

4 operates that vessel under the authority of a foreign

5 country, in violation of this section is liable to the

6 United States Government for a civil penalty of not

7 more than $10,000 for each violation.’’; and

8 (2) by adding at the end the following:

9 ‘‘(e) To promote the transfer of foreign vessels to be

10 documented under chapter 121 of title 46, United States

11 Code, the Secretary may grant approval under subsection

12 (c) before the date the vessel is documented.’’.

13 SEC. 9. LABOR PROVISIONS.

14 (a) LIABILITY FOR INJURY OR DEATH OF MASTER

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

16 4, 1915 (38 Stat. 1185, chapter 153; 46 U.S.C. App.

17 688(a)), is amended—

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

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

20 designated under paragraph (1) of this subsection)

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

22 under this subsection against a defendant employer

23 that does not reside or maintain an office in the

24 United States (including any territory or possession

25 of the United States) and that engages in any enter-
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1 prise that makes use of one or more ports in the

2 United States (as defined in section 2101 of title

3 46, United States Code), jurisdiction shall be under

4 the district court most proximate to the place of the

5 occurrence of the personal injury or death that is

6 the subject of the action.’’; and

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

8 paragraph:

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

10 crew of a vessel—

11 ‘‘(i) may, at the election of the employer, par12 ticipate in an authorized compensation plan under

13 the Longshore and Harbor Workers’ Compensation

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

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

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

17 Longshore and Harbor Workers’ Compensation Act

18 (33 U.S.C. 902(3)(G)), shall be subject to that Act.

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

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

21 compensation plan under the Longshore and Harbor

22 Workers’ Compensation Act—

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

24 employer shall be considered to be an employee for

25 the purposes of that Act; and
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1 ‘‘(ii) the liability of that employer under that

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

3 otherwise entitled to recover damages from the em4 ployer based on the injury, disability, or death of the

5 master or crew member, shall be exclusive and in

6 lieu of all other liability.’’.

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

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

9 coastwise trade of the United States shall be subject to

10 minimum international labor standards for seafarers

11 under international agreements in force for the United

12 States, as determined by the Secretary of Transportation

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

14 SEC. 10. REGULATIONS REGARDING VESSELS.

15 (a) APPLICABLE MINIMUM REQUIREMENTS.—Except

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

17 for vessels engaging in the transportation of cargo or mer18 chandise in the United States coastwise trade shall be the

19 recognized international standards in force for the United

20 States (as determined by the Secretary of the department

21 in which the Coast Guard is operating, in consultation

22 with any other official of the Federal Government that the

23 Secretary determines to be appropriate).

24 (b) CONSISTENCY IN APPLICATION OF STAND25 ARDS.—In any case in which any minimum requirement
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1 for vessels referred to in subsection (a) is inconsistent with

2 a minimum that is applicable to vessels that are docu3 mented in a foreign country and that are admitted to en4 gage in the transportation of cargo and merchandise in

5 the United States coastwise trade, the standard applicable

6 to such vessels that are documented in a foreign country

7 shall be the standard to be applied to United States docu8 mented vessels.

9 (c) MINIMUM REQUIREMENTS FOR PASSENGER VES10 SELS.—The minimum requirements for all vessels engag11 ing in carriage of passengers in the United States in coast12 wise trade (including United States documented vessels

13 and foreign documented vessels) shall be all safety, man14 ning, inspection, construction, and equipment require15 ments applicable to United States vessels documented

16 under the laws of the United States to engage in coastwise

17 passenger trade, to the extent that those requirements are

18 consistent with applicable international law and treaties

19 to which the United States is a signatory.

20 SEC. 11. ENVIRONMENTAL STANDARDS.

21 All vessels, whether documented under the laws of the

22 United States or not, engaging in the United States coast23 wise trade shall comply with all applicable United States

24 and international environmental standards in force for the

25 United States.
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1 SEC. 12. NATIONAL SECURITY REQUISITION OR CHARTER

2 OF VESSELS THAT REGULARLY ENGAGE IN

3 COASTWISE TRADE.

4 Section 902(a) of the Merchant Marine Act, 1936 (46

5 App. U.S.C. 1242(a)) is amended in the first sentence by

6 inserting ‘‘any vessel that regularly engages in coastwise

7 trade (as that term is defined in section 2101 of title 46,

8 United States Code),’’ after ‘‘documented vessel,’’.

9 SEC. 13. REQUIREMENTS FOR CERTAIN NONCITIZENS IR10 REGULARLY ENGAGING IN DOMESTIC COAST11 WISE TRADE.

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

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

14 United States Code, that owns or operates vessels that ir15 regularly engage in the United States domestic coastwise

16 trade shall—

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

18 served;

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

20 States, including applicable environmental and tax

21 laws; and

22 (3) post evidence of documentation and en23 dorsements aboard such vessel indicating the owner

24 or owners of such vessel, including any person con25 trolling vessels and the number of port calls and

26 coastwise trips made during that calendar year.
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1 For purposes of paragraph (3), all persons treated

2 as a single employer under subsection (a) or (b) of section

3 52 of the Internal Revenue Code of 1986 shall be treated

4 as 1 person.

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