America’s Cup Act of 2011 (H.R. 3321) UPDATED – Turns Out It IS All-American

On January 5, 2011, H.R. 3321 America’s Cup Act of 2011 was introduced in the first session of the 112th Congress. On the surface, this bill allows foreign flagged sailing yachts and support vessels to operate off the coast of California during the 34th America’s Cup. Due to the requirements of the Merchant Marine Act of 1920 as re-codified in 2006, certain support and spectator vessels operating under a non-U.S. flag would not be able to operate in and out of ports in California during the running of the latest America’s Cup. With multiple regattas scheduled through the defense of the America’s Cup in September 2013, and nine well-funded racing teams involved, the economic benefit to California and the U.S. is undeniable. Delving deeper into the bill, it becomes much more than a yacht race, however.

H.R. 3321 starts out with the statement that it intends “To facilitate the hosting in the United States of the 34th America’s Cup by authorizing certain eligible vessels to participate in activities related to the competition, and for other purposes.” Highlighting, italicizing and underlining of the previous section is to point out the last minute changes to this bill. In addition to the yachts and support vessels mentioned above, H.R. 3321 allows the following vessels to be issued a certificate of documentation with a coastwise endorsement for the United States:

  • MV Geysir : Container Ship : Built in Louisiana – U.S. flagged – rationale for waiver unknown
  • RV Ocean Veritas : Research/Dive Vessel : Built in Mississippi – U.S. flagged – rationale for waiver unknown
  • Luna : Superyacht : Bermuda flagged
  • LNG Gemini : LNG Tanker : Marshall Islands flagged
  • LNG Leo : LNG Tanker : Marshall Islands flagged
  • LNG Virgo : LNG Tanker : Marshall Islands flagged

In the case of the the three LNG tankers, they were built in Quincy, Massachusetts and operated under the U.S. flag for a period of time.  Even after being reflagged to the Marshall Islands, they continued to be manned by U.S. mariners until 2005.  Once they were reflagged, the LNG tankers were not eligible for domestic work, nor were they needed.  Not needed, that is, until Sunoco devised a business plan to ship natural gas from Philadelphia to the U.S. Gulf Coast.  While these vessels continue to operate under the Marshall Islands flag today, if these plans move forward, it would appear that the Marcus Hook area of Philadelphia and the U.S. merchant marine will gain some jobs.  These jobs will be gained through a waiver of the Jones Act, but these waivers do not normally create jobs.

The Jones Act (Section 27 of the Merchant Marine Act, 1920, as amended (46 App. U.S.C. 883)) has been under attack for years. Slowly, but surely, corporations are eroding the value of the Jones Act by obtaining waivers for foreign-flagged and crewed vessels to operate in the U.S. domestic trade. This has become all too commonplace in the offshore drilling and oilfield supply industry, much to the dismay of U.S. citizens that were laid off from those same jobs in the Great Recession. The most recent waiver that made front page news was the delivery of diesel fuel, gasoline and heating oil to the city of Nome, Alaska. The delivery was made, not by a U.S. flagged vessel, but by a Russian vessel.

Today, the House Committee on Transportation and Infrastructure unveiled the American Energy & Infrastructure Jobs Act. It is being touted as the largest transportation reform since 1956. While not highlighted during the press conference, there is hope that the maritime sector might actually be addressed. Let’s hope that our representatives in Congress realize how easily American jobs can be created (or lost) and read the fine print.

 

UPDATED : Please note that substantial changes have been made to the above post.  Information came to light indicating that the three LNG tankers above will be operating under the U.S. flag as this business venture moves forward.  As was noted on another forum, one must ensure their facts are correct before ranting and raving.  My apologies to gCaptain, John Konrad and Rob Almeida, as the information I forwarded to them was incorrect.

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