S. R. 237 RESOLUTION

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Cornelius Newton
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1 TEXT APPROVED IN FINAL VOTE BY THE SENATE (MAY 6, 2013) COMMONWEALTH OF PUERTO RICO 17 th Legislative 1 st Regular Assembly Session SENATE OF PUERTO RICO S. R. 237 April 12, 2013 Introduced by Mrs. López-León Co-sponsored by Messrs. Suárez-Cáceres, Tirado-Rivera, and Vargas-Morales Referred to the Committee on Rules, Calendar, and Internal Affairs RESOLUTION To direct the Committee on Government, Governmental Efficiency, and Economic Innovation and the Committee on Civil Rights, Citizen Participation, and Social Economy of the Senate of Puerto Rico to conduct a comprehensive study on the economic impact of shipping costs between Puerto Rico and the United States as a consequence of the imposition of Federal Coastwise Laws, based on the report of the Government Accountability Office (GAO) of March 14, STATEMENT OF MOTIVES It is well known that the Commonwealth of Puerto Rico has been subject to U.S. coastwise laws since 1900, when Congress passed the first Organic Act to establish a civil government in the Island, that is, the Foraker Act. 1 This legislation provided that coastwise trade between Puerto Rico and the United States shall be regulated in accordance with the provisions of law applicable to such trade 1 Public Law No of April 12, 1900.

2 2 between any two great coasting districts of the United States. Subsequently, the Federal law was amended and Puerto Rico was subject to the provisions of the Jones-Shafroth Act of Two years later, Section 27 of Public Law No became applicable and has regulated coastwise trade in the Island ever since. The spirit and effect of the Jones Act of 1920 limits maritime transportation in the United States, its territories and possessions. This means that all maritime transportation between Puerto Rico and any other port in the United States must be carried out in vessels that were built in and registered under the flag of the United States 3. In general, these laws require that the maritime transport of cargo between points in the United States be: provided by the U.S. Merchant Marine, registered under the U.S. flag with a coastwise endorsement, and transported in vessels built in the United States and manned by U.S. citizen crews. The result of this, among others, is the higher cost of products that enter and are consumed in the Island. Given the foregoing, it is well known that the economic effect and impact, both on the Commonwealth of Puerto Rico and the United States, of applying the coastwise laws has been commented on and documented throughout our history. For example, through Concurrent Resolution No. 35, passed unanimously on October 30, 1995, the 10 th Legislative Assembly requested the U.S. Congress to exclude Puerto Rico from the application of coastwise laws. Subsequently, other means of expression and legislative investigations were approved by the Senate and the House of Representatives of Puerto Rico to address this important issue, which affects both the Island and the Federal government. 2 Merchant Marine Act of 1920 (46 U.S.C. Sec 55102), better known as the Jones Act of It is well known that the U.S. Merchant Marine is the most expensive in the world.

3 3 Finally, at the request of the Hon. Pedro Pierluisi, Resident Commissioner for the Commonwealth of Puerto Rico, the Government Accountability Office (GAO) issued a report titled PUERTO RICO: Characteristics of the Island s Maritime Trade and Potential Effects of Modifying the Jones Act. 4 It is important to mention that, in the aforementioned report, the GAO makes a distinction regarding insular jurisdictions of the United States and, to such ends, explains that the U.S. Department of the Interior defines an insular area as a jurisdiction that is neither a part of one of the several states nor a Federal district. Insular areas of the United States include American Samoa, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands, as well as the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. It must be noted that Congress excluded the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands from the application of coastwise laws, whereas vessels transporting goods to Guam are excluded from the U.S.-build requirement. This means that the Commonwealth of Puerto Rico is the only jurisdiction subject to all Jones Act requirements regarding cargo. 5 Thus, it is a moral imperative for the study conducted by GAO to require a scientific, practical, and careful analysis of all aspects regarding how coastwise laws affect our citizens socioeconomic wellbeing. Such study includes an analysis of all GAO determinations and the effect that the cabotage situation has had on Puerto Rico for nearly one hundred thirteen (113) years. It is necessary to understand that, currently, international commerce is moving towards easing rules and regulation that apply to merchandise entering countries until total deregulation 4 Report No. GAO of March 14, In 1980, coastwise laws were amended to exclude their application to cruise ship passengers arriving to the Island s ports, due to the economic crises Puerto Rico was facing at the time. This fact established a precedent for Puerto Rico in terms of amendments to coastwise laws.

4 4 is achieved. Such action seeks to foster competitiveness and economic development in all countries and, consequently, to benefit consumers through greater product variety at lower prices. For example, the United States and the People s Republic of China have the strictest regulations in terms of maritime commerce. However, China has totally eliminated the Chinese-build requirement for vessels transporting cargo to that country. Furthermore, GAO acknowledges in its report that the vessels currently in use have exceeded their expected useful life, in some instances by twice that term. It further indicates that these vessels burn fuel faster and less efficiently, and lack the capacity to transport bulk cargo, oil, and gas, among other situations affecting economic activities related to maritime commerce. Finally, the Senate of the Commonwealth of Puerto Rico, through its Committees with jurisdiction on this matter, shall encourage citizens to express themselves on the GAO report entitled PUERTO RICO: Characteristics of the Island s Maritime Trade and Potential Effects of Modifying the Jones Act, with regards to the effects of modifying the way in which Federal coastwise laws apply to Puerto Rico. The study and analysis hereby directed shall be comprehensive and include all sectors and populations of the Island, so that this High Body can make a thorough analysis that encompasses the thoughts of all citizens on the socioeconomic impact and effect of excluding Puerto Rico or not from the application of Federal coastwise laws BE IT RESOLVED BY THE SENATE OF PUERTO RICO: Section 1. The Committee on Government, Governmental Efficiency, and Economic Innovation and the Committee on Civil Rights, Citizen Participation, and Social Economy of the Senate of Puerto Rico are hereby directed to conduct a comprehensive study on the economic impact of shipping costs between Puerto

5 Rico and the United States as a consequence of the imposition of Federal Coastwise Laws, based on the report of the Government Accountability Office (GAO) of March 14, Section 2. The Committee on Government, Governmental Efficiency, and Economic Innovation and the Committee on Civil Rights, Citizen Participation, and Social Economy shall include in such report a comprehensive sample of the analysis made by all sectors and populations of the Island regarding the GAO report entitled PUERTO RICO: Characteristics of the Island s Maritime Trade and Potential Effects of Modifying the Jones Act. Section 3. The Committees shall file a joint report within ninety (90) days as of the approval of this Resolution. Section 4. A copy of the joint report filed by the Committees shall be translated into English and delivered to the President of the United States, the Hon. Barack Obama; the Government Accountability Office (GAO); the National Conference of State Legislatures (NCSL); the Council of State Governments (CSG); and the United Nations. Section 5. This Resolution shall take effect immediately after its approval.

SENATE JOINT RESOLUTION NO. 17 IN THE LEGISLATURE OF THE STATE OF ALASKA TWENTY-NINTH LEGISLATURE - FIRST SESSION A RESOLUTION

SENATE JOINT RESOLUTION NO. 17 IN THE LEGISLATURE OF THE STATE OF ALASKA TWENTY-NINTH LEGISLATURE - FIRST SESSION A RESOLUTION -LS0\A BY SENATOR COGHILL Introduced: // Referred: Transportation SENATE JOINT RESOLUTION NO. IN THE LEGISLATURE OF THE STATE OF ALASKA TWENTY-NINTH LEGISLATURE - FIRST SESSION A RESOLUTION Requesting