Resolution in Support of Reforming the Jones Act

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Model Bill Info
Bill Title Resolution in Support of Reforming the Jones Act
Date Introduced November 29, 2023
Type Model Resolution
Status Draft
Task Forces Commerce, Insurance and Economic Development; Federalism and International Relations
Keywords International Trade

Resolution in Support of Reforming the Jones Act

WHEREAS, Section 27 of the Merchant Marine Act of 1920 (P.L. 66-261) (46 U.S.C. § 55102), commonly known as the Jones Act, is a federal cabotage law that restricts the surface carriage of cargo by water between coastwise points in the United States to vessels that are U.S.-built, U.S.-flag, U.S.-owned and U.S.-crewed.

WHEREAS, both the U.S. commercial shipbuilding industry and domestic shipping fleet have experienced significant declines under Jones Act protectionism.

WHEREAS, the high costs of constructing shipping vessels in the United States as required by the Jones Act diminishes the size of the United States shipping fleet and increases its age, increases fuel costs due to age, increases maintenance costs due to age, and increases crewing costs due to age and a lack of automation.

WHEREAS, all other modes of domestic transportation in the U.S. are permitted to use foreign manufactured equipment for commercial operation without restriction including aircraft, railroad cars and locomotives, trucks, automobiles, and mass transit vehicles.

WHEREAS, the U.S. shipyards’ inefficiency, extreme lack of competitiveness, and high prices deters the expansion and modernization of the U.S.-flagged merchant fleet.

WHEREAS, expansion of the U.S.-flagged merchant fleet would serve to reduce or eliminate the projected shortage of 1,839 mariners to conduct concurrent sustained sealift and commercial fleet operations as calculated by a 2017 Department of Transportation Maritime Workforce Working Group report.

WHEREAS, deliveries of large, oceangoing merchant ships from U.S. shipyards have averaged fewer than three per year since the year 2000.

WHEREAS, the few large ships delivered by U.S. shipyards are highly reliant on imported parts and components, including from the People’s Republic of China.

WHEREAS, shipyards located in allied countries including Japan, South Korea, and NATO members can efficiently construct large, oceangoing merchant ships.

WHEREAS, a Congressional Budget Office study calculated that 62 percent of the total cost difference between U.S. and foreign carriers can be attributed to higher U.S. capital costs.

WHEREAS, no other country requires that all large, oceangoing ships used in domestic trade be constructed in that same country.

WHEREAS, the high cost of U.S.-built ships serves as a barrier to market entry in the deep-sea domestic trades of Alaska, Guam, Hawaii, and Puerto Rico as well as the domestic coastal transportation of oil, petroleum, and other bulk products.

WHEREAS, a 2013 report issued by the World Economic Forum in collaboration with Bain & Company and the World Bank described the Jones Act as “the most restrictive example” of a cabotage law and that “such barriers actually damage local economies and saddle businesses and consumers with significant costs.”

WHEREAS, the Jones Act has been cited as a key factor behind U.S. refineries purchasing Russian oil instead of domestic supplies due to the high cost of domestic transport.

WHEREAS, New England and Puerto Rico must import liquified natural gas due to the total lack of Jones Act-compliant gas tankers needed to transport it domestically.

WHEREAS, numerous useful types of vessels do not exist in the Jones Act-qualified fleet including gas tankers, livestock carriers, and heavy-lift vessels.

WHEREAS, the use of old ships encouraged by the Jones Act’s U.S. build requirements generates more maintenance and repair business for state-owned shipyards in the People’s Republic of China that regularly service many of these vessels.

WHEREAS, the high cost of Jones Act transport and lack of appropriate vessel types serves as a barrier to commerce within the United States and discourages domestic supply chains.

WHEREAS, United States trading partners restrict their markets to U.S. exports of agricultural products and other goods in retaliation for U.S. refusal to modify the Jones Act and open its domestic shipping and shipbuilding markets.

WHEREAS, the high costs associated with the Jones Act has many domestic businesses utilizing the nations highway and rail systems in order to transport goods to various markets, leading to increased wear and tear on the nations roadways and railways, increased maintenance costs on roadways and railways, increased fuel consumption, and increased vehicle congestion on the nations roadways.

WHEREAS, repealing the Jones Act would allow domestic businesses to realize cost savings by utilizing the nations waterways as a safer and easier method of transporting goods to market, would reduce the amount of vehicles on the nation’s highways, and would permit goods to arrive to markets in a more timely fashion; therefore, be it

NOW, THEREFORE BE IT RESOLVED that the Legislature of the state of {state} urges:

That the Legislature hereby urges the United States Congress to consider amending the Jones Act’s to permit vessels over 10,000 gross tons purchased from countries that have mutual defense agreements with the United States, including Japan, South Korea, and NATO members, to operate in domestic trade; and

BE IT FURTHER RESOLVED, [LEGISLATIVE BODY] urges Congress to adopt a generous and flexible waiver system based on economic need that would allow utilization of the numerous vessel types operating under the flags of friendly countries not found in the U.S.-flagged merchant fleet.