I
105TH CONGRESS
1ST SESSION
H. R. 1991
To reform the coastwise, intercoastal, and noncontiguous trade shipping laws,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 19, 1997
Mr. SMITH of Michigan (for himself, Mr. COX of California, Mr. BOB SCHAF-
FER of Colorado, Mr. MCINTOSH, Mr. NORWOOD, Mr. PETRI, Mr. BE-
REUTER, Mr. LATHAM, Mr. UNDERWOOD, Mr. KLUG, Mr. STENHOLM,
and Mr. SKEEN) 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 deter-
mined 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Coastal Shipping Competition Act’’.
(b) FINDINGS.—The Congress finds the following:
(1) Efficient, competitive, broadly available wa-
terborne cargo transportation service is an essential
component of a national intermodal transportation
system, and such services should be promoted by the
United States.
(2) The cost of building ships in the United
States is so uncompetitive with international ship-
builders that it is effectively prohibiting the growth
and modernization of the Jones Act fleet.
(3) The decline of ships of over 1,000 tons in
the Jones Act fleet as well as the resulting decrease
in the number of sailors represents a dimunition in
emergency sealift capacity in times of national emer-
gency.
(4) In the last several decades, the size of the
active United States domestic deepwater fleet has
shrunk substantially, to a total today of only 130
self-propelled oceangoing vessels of over 1,000 tons
and 59 vessels in the Great Lakes.
(5) The result has been shipping shortages,
higher prices, and significant commercial transpor-
tation inefficiencies, all of which can be alleviated,
without any cost to the taxpayer, by increasing com-
petition in domestic deepwater shipping.
(6) Such inefficiencies undermine the competi-
tive position of a broad range of American busi-
nesses, particularly in potential domestic markets,
versus their foreign competition. These shipping
shortages and higher-than-market prices have led to
the loss of American jobs to overseas competitors
able to purchase transportation services on the inter-
national market.
(7) Lack of access to adequate deepwater com-
mercial waterborne transportation alternatives sup-
presses economic activity in an amount of between
$4,200,000,000 and $10,000,000,000 annually and
causes the loss of associated tax revenue, according
to a study by the United States International Trade
Commission.
(8) American mariners and water carriers are
dedicated to providing the high-quality service that
their customers deserve, but flexibility in capital in-
vestment is needed to acquire the modern equipment
essential to satisfy the current and potential demand
for superior deepwater domestic cargo transportation
service.
(9) Eliminating international capital investment
restrictions on the deepwater domestic transpor-
tation industry will help American ocean transpor-
tation companies to provide the world class service
American manufacturers, farmers, consumers, and
taxpayers deserve.
(10) Similarly, permitting domestic transpor-
tation service providers to purchase their vessels on
the international market without penalty will lower
their operating expenses, creating savings which they
can pass on to their customers in the form of lower
prices and improved efficiency.
(11) Allowing American domestic deepwater
commercial carriers to comply with appropriate
international operating and construction standards
to which the United States is a party through trea-
ties and conventions will further lower operating ex-
penses and reduce the cost of the service provided by
those companies.
(12) Rationalizing the tort and liability provi-
sions governing the maritime industry will help re-
duce the insurance costs of employers and diminish
the need for costly and contentious litigation to set-
tle worker injury claims.
(13) Liberalizing the regulations currently gov-
erning the domestic deepwater transportation of
cargo will encourage a renaissance in the Nation’s
waterborne coastal trades, reducing highway conges-
tion, road damage, and air and noise pollution, and
will substantially contribute to the ability of Amer-
ican commercial enterprise to compete against for-
eign companies.
SEC. 2. MISCELLANEOUS AMENDMENTS TO DEFINITIONS IN
TITLE 46, UNITED STATES CODE.
Section 2101 of title 46, United States Code, is
amended—
(1) by striking paragraph (3a) and inserting
the following:
‘‘(3a) ‘citizen of the United States’ means—
‘‘(A)(i) a national of the United States, as
defined in section 101(a)(22) of the Immigra-
tion 
and 
Nationality 
Act 
(8 
U.S.C.
1101(a)(22));
‘‘(ii) a corporation established under the
laws of the United States or under the laws of
a State, territory, district, or possession of the
United States, that has—
‘‘(I) a president or other chief execu-
tive officer and chairman of the board of
directors of that corporation who are citi-
zens of the United States; and
‘‘(II) a board of directors on which no
more of its directors than a minority of the
number necessary to constitute a quorum
are noncitizens;
‘‘(iii) a partnership existing under the laws
of a State, territory, district, or possession of
the United States that has at least one general
partner who is a citizen of the United States;
‘‘(iv) a trust that has at least one trustee
who is a citizen of the United States; or
‘‘(v) an association, joint venture, limited
liability company, or other entity that has at
least one member who is a citizen of the United
States; but
‘‘(B) such term does not include—
‘‘(i) with respect to a person or entity
under clause (ii), (iii), (iv), or (v) of sub-
paragraph (A), any parent corporation,
partnership, or other person (other than
an individual) or entity that is a second- or
higher-tier owner (as that term is defined
by the Secretary) of the person or entity
described in clauses (ii), (iii), or (v), as ap-
plicable; or
‘‘(ii) with respect to a trust under
clause (iv), any beneficiary of the trust.’’;
(2) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(4a) ‘coastwise trade’—
‘‘(A) subject to subparagraph (B), means
the transportation by water of merchandise or
passengers, or the towing of a vessel between
points, or dredging operations embraced within
the coastwise laws of the United States—
‘‘(i) in the United States (including
any district, territory, or possession of the
United States);
‘‘(ii) on the Great Lakes (including
any tributary or connecting waters of the
Great Lakes and the Saint Lawrence Sea-
way);
‘‘(iii) on the subjacent waters of the
Outer Continental Shelf subject to the
Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.); and
‘‘(iv) in the noncontiguous trade; and
‘‘(B) does not include the activities speci-
fied in subparagraph (A) on the navigable wa-
ters included in the inland waterways trade ex-
cept for activities specified in subparagraph (A)
that occur on mixed waters.’’;
(3) by inserting after paragraph (11c) the fol-
lowing new paragraph:
‘‘(11d) ‘foreign qualified vessel’ means a ves-
sel—
‘‘(A) registered in a foreign country;
‘‘(B) the owner of which is a citizen of the
United States; and
‘‘(C) employs United States citizens to the
extent required of vessels registered under sec-
tion 12102 of this title.’’;
(4) by redesignating paragraph (14a) as para-
graph (14b);
(5) by inserting after paragraph (14) the fol-
lowing new paragraph:
‘‘(14a) ‘inland waterways trade’—
‘‘(A) means—
‘‘(i) the transportation of merchandise
or passengers on the navigable rivers, ca-
nals, lakes other than the Great Lakes, or
other waterways inside the Boundary Line;
‘‘(ii) the towing of barges by towing
vessels in the waters specified in clause (i);
or
‘‘(iii) engaging in dredging operations
in the waters specified in clause (i); and
‘‘(B) includes any activity specified in sub-
paragraph (A) that is conducted in mixed wa-
ters.’’;
(6) by redesignating paragraph (15a) as para-
graph (15b);
(7) by inserting after paragraph (15) the fol-
lowing:
‘‘(15a) ‘mixed waters’ means—
‘‘(A) the waters of the harbors and ports
both on the coasts and on the Great Lakes of
the United States; and
‘‘(B) the rivers, canals, and other water-
ways tributary to the Great Lakes or to the
coastal harbors and coasts of the United States
inside the Boundary Line,
that the Secretary of Transportation determines to
be navigable by oceangoing vessels.’’;
(8) by redesignating paragraph (17a) as para-
graph (17b);
(9) by inserting after paragraph (17) the fol-
lowing:
‘‘(17a) ‘noncontiguous trade’ means transpor-
tation by water of merchandise or passengers, or
towing by towing vessels—
‘‘(A) between—
‘‘(i) a point in the 48 continental
States and the District of Columbia; and
‘‘(ii) a point in Hawaii, Alaska, Puer-
to Rico, Guam, the Virgin Islands, Amer-
ican Samoa, the Northern Mariana Is-
lands, or any other noncontiguous territory
or possession of the United States, as em-
braced within the coastwise laws of the
United States; or
‘‘(B) between two points described in sub-
paragraph (A)(ii).’’;
(10) in paragraph (21)(A)—
(A) in clause (ii), by striking ‘‘or’’ after
the semicolon;
(B) in clause (iii), by inserting ‘‘or’’ after
the semicolon; and
(C) by adding at the end the following new
clause:
‘‘(iv) an individual who—
‘‘(I) is a member of the family or
a guest of the owner or charterer; and
‘‘(II) is not a passenger for
hire;’’;
(11) by striking paragraph (40) and inserting
the following:
‘‘(40) ‘towing vessel’ means any commercial
vessel engaged in, or that a person intends to use to
engage in, the service of—
‘‘(A) towing, pulling, pushing, or hauling
alongside (or any combination thereof); or
‘‘(B) assisting in towing, pulling, pushing,
or hauling alongside.’’; and
(12) by inserting after paragraph (40) the fol-
lowing new paragraphs:
‘‘(40a) ‘towing of a vessel by a towing vessel be-
tween points’ means attaching a towing vessel to a
towed vessel (including any barge) at one point and
releasing the towed vessel from the towing vessel at
another point, regardless of the origin or ultimate
destination of either the towed vessel or the towing
vessel.
‘‘(40b) ‘transportation of merchandise or pas-
sengers by water between points’ means, without re-
gard to the origin or ultimate destination of the
merchandise or passengers involved—
‘‘(A) in the case of merchandise, loading
merchandise at one point and permanently un-
loading the merchandise at another point; or
‘‘(B) in the case of passengers, embarking
passengers at one point and permanently dis-
embarking the passengers at another point.’’.
SEC. 3. DOCUMENTATION.
(a) DEFINITIONS.—Section 12101(b)(2) of title 46,
United States Code, is amended—
(1) by striking paragraph (2) and inserting the
following:
‘‘(2) ‘license’, ‘enrollment and license’, ‘license
for the coastwise (or coasting) trade’, ‘enrollment
and license for the coastwise (or coasting) trade’,
and ‘enrollment and license to engage in the foreign
and coastwise (or coasting) trade on the northern,
northeastern, and northwestern frontiers, otherwise
than by sea’ mean a coastwise endorsement as pro-
vided in section 12106.’’; and
(2) by redesignating paragraph (4) as para-
graph (3).
(b) VESSELS ELIGIBLE FOR DOCUMENTATION.—Sec-
tion 12102(a) of title 46, United States Code, is amend-
ed—
(1) by striking all that precedes paragraph (5)
and inserting the following:
‘‘(a) A vessel of at least 5 net tons that is not reg-
istered under the laws of a foreign country or that is not
titled in a State is eligible for documentation if—
‘‘(1)(A) the vessel is owned by an individual
who is a citizen of the United States, or by a cor-
poration, association, trust, joint venture, partner-
ship, limited liability company, or other entity that
is a citizen of the United States; and
‘‘(B) the owner of the vessel is capable of hold-
ing title to a vessel under the laws of the United
States or under the laws of a State;’’; and
(2) by redesignating paragraphs (5) and (6) as
paragraphs (2) and (3), respectively.
(c) COASTWISE ENDORSEMENTS.—
(1) IN GENERAL.—Section 12106 of title 46,
United States Code, is amended—
(A) by amending the section heading to
read as follows:
‘‘§ 12106. Coastwise endorsements and certificates’’;
(B) by redesignating subsections (c), (d),
and (e) as subsections (d), (e), and (f); and
(C) by striking subsections (a) and (b) and
inserting the following:
‘‘(a) COASTWISE ENDORSEMENTS.—A certificate of
documentation may be endorsed with a coastwise endorse-
ment for a vessel that is eligible for documentation.
‘‘(b) COASTWISE CERTIFICATES.—
‘‘(1) IN GENERAL.—Any of the following vessels
may be issued a certificate to engage in the coast-
wise trade if the Secretary of Transportation makes
a finding, pursuant to information obtained and fur-
nished by the Secretary of State, that the govern-
ments of the nations of registry and of the citizen-
ship or nationality of each owner of record (and, if
that owner is not an individual or individuals, then
the individual or individuals at the ultimate tier of
ownership) of such vessel extend reciprocal privileges
to vessels of the United States to engage in the
transportation of merchandise or passengers (or
both) in its or their coastwise trades:
‘‘(A) A foreign qualified vessel (as defined
in section 2101(11d)).
‘‘(B) A vessel of foreign registry if that
vessel engages irregularly in the coastwise trade
of the United States.
‘‘(2) VESSEL ENGAGING IRREGULARLY IN THE
COASTWISE
TRADE.—For purposes of this sub-
section, a vessel engages irregularly in the coastwise
trade of the United States if that vessel—
‘‘(A) during any 60-day period does not
make, in the aggregate, more than four calls to
United States ports;
‘‘(B) during any calendar year does not
make, in the aggregate, more than six calls to
United States ports; and
‘‘(C) is owned by any person whose vessels
make not more than 18 calls to United States
ports during any calendar year.
For purposes of subparagraph (C), all persons treat-
ed as a single employer under subsection (a) or (b)
of section 52 of the Internal Revenue Code of 1986
shall be treated as 1 person for purposes of the pre-
ceding sentence.
‘‘(c) EMPLOYMENT OF A VESSEL IN THE COASTWISE
TRADE.—Subject to the applicable laws of the United
States regulating the coastwise trade and trade with Can-
ada, only a vessel with a certificate of documentation en-
dorsed with a coastwise endorsement or with a certificate
issued under subsection (b) may be employed in the coast-
wise trade.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 121 of title 46,
‘‘(C) a vessel that is authorized by a treaty or
in accordance with the provisions of section 725 of
this title;
‘‘(D) a vessel that is aiding or saving vessels or
lives in distress; or
‘‘(E) a vessel for which the Commissioner of
Customs is satisfied that no suitable vessel wholly
owned by a person or persons who are citizens of the
United States and documented under the laws of the
United States is available in any particular locality
and authorizes the use of a foreign vessel or vessels
in salvaging operation or operations in that locality.
‘‘(2) A vessel operated in violation of this subsection
is subject to seizure and forfeiture by and to the United
States Government in a libel or other enforcement action
in the district court of the United States for the district
in which the offending vessel is found.’’.
SEC. 7. DREDGING OPERATIONS.
The first section of the Act of May 28, 1906 (34 Stat.
204, chapter 2566; 46 U.S.C. App. 292), is amended to
read as follows:
‘‘SECTION 1. VESSELS THAT MAY ENGAGE IN DREDGING.
‘‘(a) IN GENERAL.—A vessel may engage in dredging
operations—