H.R. 667 — Noncontiguous Shipping Relief Act of 2024

This section establishes an exemption from coastwise trade requirements (i.e., vessels must be U.S.-owned and hold a coastwise endorsement to transport merchandise between U.S. points) for transportation in noncontiguous trade (as defined in 46 U.S.C. 53501, i.e., between the U.S. mainland and places such as Alaska and Hawaii) on a foreign qualified freight vessel of not less than 1,000 gross tons that (1) was not built or rebuilt in the United States, (2) is registered in a foreign country, and (3) employs U.S. citizens to the extent required under 46 U.S.C. 12102, provided the Secretary of Transportation issues it a certificate of documentation under chapter 121. It makes conforming amendments to (1) authorize coastwise endorsements for such vessels used in noncontiguous trade and (2) exempt such vessels (if documented after enactment and used solely for noncontiguous trade) from restrictions on foreign transfers, allowing placement under foreign registry without Secretary approval (with automatic revocation of the U.S. certificate). (Thus, these vessels may temporarily operate under U.S. documentation in specified domestic trade before returning to foreign registry.)

This section establishes exceptions from certain corporate U.S. citizenship requirements for foreign qualified freight vessels (as defined in 46 U.S.C. §55102(c)) used for transportation described in 46 U.S.C. §55102(c)(2)(B). (1) It exempts such vessels from the controlling corporate interest tests under 46 U.S.C. §50501(c) and the requirements that a corporation's chief executive officer and board chairman be U.S. citizens and that noncitizens not exceed a minority of the quorum under §50501(b)(2)-(3). (As background, §50501 generally deems a corporation a U.S. citizen eligible to document vessels for domestic trades—including the coastwise trade between U.S. points, which requires 75% U.S. ownership—only if it meets strict U.S. ownership, officer, and director criteria.) (2) It authorizes the Secretary of Homeland Security to approve the transfer of such vessels to U.S. registry under chapter 121 before documentation, to promote their use for §55102(c)(2)(B) transportation. (Thus, these provisions facilitate documentation and operation of specified foreign vessels in certain U.S. trades without full U.S. corporate citizenship compliance.)

This section amends the Jones Act seaman remedy provision (46 U.S.C. 30104) and related requirements as follows: (1) establishes jurisdiction in the U.S. district court most proximate to the injury or death site for civil actions against a non-U.S.-based employer that uses one or more U.S. ports; (2) permits employers of a vessel's master or crew member to elect coverage under the Longshore and Harbor Workers' Compensation Act (LHWCA, 33 U.S.C. 901 et seq.), under which such individuals are deemed LHWCA employees and employer liability under LHWCA is exclusive (i.e., precluding Jones Act claims); and (3) requires all vessels operating in the U.S. coastwise trade, whether U.S.-documented or not, to comply with minimum international labor standards for seafarers under applicable U.S. agreements, as determined by the Secretary of Transportation with advice from the Secretaries of Labor and Defense.

This section establishes minimum requirements for vessels engaging in the U.S. coastwise trade (i.e., transportation of cargo or merchandise between U.S. ports) as the recognized international standards in force for the United States, as determined by the Coast Guard commandant in consultation with other appropriate federal officials. It further requires that if any such international standard is lower than a minimum applicable to foreign-documented vessels admitted to the coastwise trade, the foreign standard applies to U.S.-documented vessels.

This section requires all vessels engaging in the U.S. coastwise trade (i.e., domestic maritime transport between U.S. ports), whether documented under U.S. law or not, to comply with all applicable U.S. and international environmental standards.

This section requires each person or entity that is not a citizen of the United States, as defined in 46 U.S.C. §104 (i.e., a U.S. national under the Immigration and Nationality Act), owning or operating vessels that irregularly engage in domestic coastwise trade to (1) name an agent for service of process; (2) abide by all applicable U.S. laws, including environmental and tax laws; and (3) post aboard such vessels evidence of documentation and endorsements indicating the owner(s), including any controlling persons, and the number of port calls and coastwise trips made that calendar year. Subsection (b) treats all persons treated as a single employer under IRC §52(a) or (b) as one person for purposes of paragraph (a)(3).