By Stephen J. Olsen, Esq. Over the last few years, Gawthrop Greenwood’s tax, trusts and…
By Gordon W. Prince, Esq.
United States Senator Mike Lee from Utah recently introduced three bills to repeal and reform the Passenger Vessel Services Act of 1886 (“PVSA”). The PVSA requires that all vessels transporting passengers between two or more U.S. ports be U.S. built, owned, flagged, and crewed. If the passenger vessel does not meet those requirements, the vessel must stop in a foreign destination while traveling between two U.S. points. The largest impact of the PVSA has traditionally been felt by the cruise line industry. Many of the world’s largest cruise lines such as Carnival and Royal Caribbean are incorporated in foreign countries and operate foreign built vessels, resulting in their U.S. operations being restricted by the PVSA. Thus, in order to comply with the PVSA, these foreign passenger cruise ships must stop in a foreign destination when traveling between to U.S. points (i.e. a cruise ship bound from a port in the U.S. to Alaska having to stop in Canada).
Senator Lee views the PVSA as an outdated law, that, by diverting cruise ships away from U.S. ports and to foreign ports, negatively impacts the economy of U.S. coastal towns and ports and the American workers located there. In response, Senator Lee introduced the following three bills in the Senate:
(1) Open America’s Ports Act (S.1994): Would repeal the PVSA thereby allowing all vessels that qualify under U.S. law to transport passengers from U.S. port to U.S. port. This would permit foreign vessels that qualify under U.S. law to travel from U.S. port to U.S. port without having to stop at a foreign port in between.
(2) Safeguarding American Tourism Act (S.1998): Would exempt large passenger vessels, defined as vessels with 800 or more passenger berths, from PVSA requirements. In other words, an exemption for cruise ships, allowing these foreign owned cruise ships to transport passengers from U.S. port to U.S. port without stopping at a foreign port.
(3) Protecting Jobs in American Ports Act(S.1992) Would repeal the “U.S.-built” requirement for passenger vessels operating between U.S. ports, with the goal of incentivizing American companies to develop voyages that increase traffic and economic activity, as well as opportunities for port workers, in U.S. coastal towns and ports.
Senator Lee, with Senator Tom McClintock from California, has also introduced a bill known as the Open America’s Water Act which aims to repeal the Jones Act. The Jones Act is a sister law to the PVSA, which prohibits foreign vessels (vessels that do not meet the U.S. built, ownership, flag, and crew requirements under the Jones Act) from transporting goods between U.S. points. Senator Lee had previously introduced a different act in 2019 attempting to repeal the Jones Act, but it did not gain any traction.
Gawthrop Greenwood and its team of Maritime & Transportation Law lawyers continue to review developments as they unfold. If you have any questions, please do not hesitate to call us at 610-696-8225.