Lease Finance Provision News

The Coast Guard has issued a supplemental notice of proposed rulemaking (SNPRM) that makes technical changes to its proposed requirements for lease financing of vessels in the domestic coastwise trade. While the proposal makes clear that the Coast Guard recognizes its obligation to implement the 1996 statute that eased lease financing requirements for Jones Act vessels in a way consistent with congressional intent, the SNPRM does not appear to completely close loopholes that have become apparent since the statute was first enacted. In enacting the lease financing requirements, Congress made clear that its objective was to broaden the sources of investment capital available to domestic vessel operators, and not to undermine the basic principle of U.S.