Administrative Process For Jones Act Waivers

The U.S. coastwise laws (primarily the Jones Act and the Passenger Vessel Services Act) require to carry cargo or passengers between U.S. ports, a vessel must be U.S.-flagged, U.S.-crewed, U.S.-built, and U.S.-owned. Traditionally, the only way for a non-qualified vessel to obtain the right to engage in domestic service has been for Congress to enact special legislation granting the privilege to the vessel by name. Public Law 105-383, enacted in November 1998, establishes a new option for obtaining a waiver of the coastwise laws for certain small passenger vessels. Title V of P.L. 105-383 (the USCG Authorization Act of 1998) creates an administrative process through the Secretary of Transportation for a limited class of passenger vessels. This process will be subject to a four-year trial. The genesis of Title V was legislation (S. 661) introduced by Senator John McCain of Arizona. Senator McCain is chairman of the Committee on Commerce, Science, and Transportation, the Senate panel that considers Jones Act waivers. He made clear his personal belief that considering waiver requests in his committee was a burden and he preferred to have an executive branch agency take responsibility for reviewing some of them. The new administrative waiver process will be available only for a passenger vessel that carries no more than 12 passengers. A person seeking an administrative waiver of the coastwise laws must apply to the Secretary of Transportation. The Secretary must publicize the application and provide an opportunity for comment on it. Before granting the waiver request, the Secretary must find "the employment of the vessel in the coastwise trade will not adversely affect - (1) U.S. vessel builders; or (2) the coastwise trade business of any person who employs vessels built in the U.S. in that business." The legislation also includes a procedure for the Secretary to revoke a previously granted Jones Act waiver upon a showing that the vessel's employment in the coastwise trade has changed substantially to the detriment of U.S. shipbuilders or other vessel operators. The Secretary of Transportation intends to delegation this new authority to the Maritime Administration. That agency will soon establish procedures for accepting and reviewing applications for vessel waivers.