JONES ACT REFORM BILL IN THE WORKS

JONES ACT REFORM BILL IN THE WORKS

A freshman House Republican will introduce legislation soon to reform Jones Act cabotage laws that for 75 years have restricted U.S. domestic waterborne trade to American vessels.

Rep. Walter B. Jones Jr., R-N.C., has received no support yet from senior House Republicans for his reform effort. The bill is almost certain to be controversial and its chances for passage this year are considered slim.Rep. Jones circulated a letter seeking co-sponsors for the effort to other lawmakers last week, saying the "Coastal Shipping Competition Act" would:

* Eliminate restrictions on non-U.S. vessels doing business in internationally accessible coastal, intercoastal, and non-contiguous waters of the United States.

* Remove comparable restrictions on the passenger ship industry to stimulate port jobs on the East and West coasts.

* Continue to provide protection to small businesses and other companies engaged solely in inland domestic commerce by protecting jobs in those trades.

* Allow barge operators and others to opt into cheaper workers compensation coverage for their employees.

Rep. Jones said in the letter his bill would be aimed at generating new maritime and industrial jobs by stimulating demand for U.S. commodities through lower domestic transportation costs while also creating new jobs in U.S. ports and maritime sectors.

The bill would leave barge and towboat operators of the nation's heartland largely protected from foreign competition, as they are now. At the same time it would offer enticements to major U.S. ports and steamship lines.

It is being groomed to appeal to the new Republican majority in Congress by promising to create thousands of maritime and industrial jobs while contributing $21 billion toward balancing the federal budget deficit over seven years.

The pending legislation is being pushed by the Jones Act Reform Coalition, a shippers group headed by Rob Quartel, a former federal maritime official.

Finding a Republican to introduce such a bill has been crucial for the coalition.

Neither Rep. Bud Shuster, R-Pa., chairman of the House Transportation and Fisheries Committee, nor Rep. Howard Coble, R-N.C., chairman of the Coast Guard and Maritime Transportation Subcommittee, has taken a position on the bill and no hearings are contemplated at this time.

In coastal trade routes, foreign-flag carriers operating non-scheduled service, such as bulk tramp steamers, could enter the market with few restrictions. Also, the proposal would open up regular liner service along the coast to foreign-flag vessels, but with restrictions. The foreign flags would have to hire U.S. crews, follow U.S. environmental and safety laws, and comply with U.S. tax laws - provisions that might discourage market entries.

While U.S.-flag carriers may face more competition along the coast, they would be able to purchase foreign-built vessels for use in the trade.

"The Jones bill tries to make maritime laws correspond with other U.S. transportation laws," said David L. Barrett, counsel for public affairs of the National Grain and Feed Association, which is part of the coalition of grain dealers, livestock producers and oil buyers and sellers pushing for the reforms.

"It opens entry to the markets but levels the playing field so U.S. carriers and foreign carriers face the same laws and regulations," he said.

For the most part, operators on inland waterways such as the Mississippi River would not be affected, though the proposal would allow limited foreign investment in U.S.-flag towboat, barge and dredge operations.

The coalition of shippers has so far tried to head off major opposition to the bill by crafting additional provisions attractive to carriers, including the change in employee liability laws. Under present law, Jones Act operators are subject to higher workers compensation liabilities.

The plan also tries to woo support from ports by allowing passenger cruise vessels to sail between U.S. ports, a major legislative objective now of the American Association of Port Authorities. Further it angles for labor support by saying domestic employment would increase through preservation of U.S-crew requirements.

Rep. Jones' late father had been chairman of the former House Merchant Marine and Fisheries Committee but he is no relation to Sen. Wesley L. Jones, R-Wash., the original sponsor of the 1920 Merchant Marine Act.