The U.S. Maritime Administration (MARAD) has a procedure for the owner of a small passenger vessel carrying 12 or fewer passengers for hire to obtain an administrative waiver of the coastwise laws.

The coastwise laws (such as the Jones Act and the Passenger Vessel Services Act), provide that a vessel cannot transport passengers between two U.S. ports unless it is U.S.-built, U.S.-owned, U.S.-flagged, and U.S.-manned. Traditionally, the only way to receive a waiver from any of the requirements of the coastwise laws has been to convince Congress to enact a special legislative exception for a particular vessel.

The MARAD administrative coastwise waiver process was initially enacted as Title V of the Coast Guard Authorization Act of 1998 (Public Law 105-383). Subsequently, Congress renewed the provision and amended it slightly in section 207(c) of the Maritime Policy Improvement Act of 2002 (Public Law 107-295).

The genesis of the administrative coastwise waiver provision was legislation introduced by Senator John McCain of Arizona (who was at the time chairman of the Committee on Commerce, Science and Transportation, the Senate panel that considers requests for legislative waivers to the coastwise laws). The small passenger vessel administrative coastwise waiver process is an effort to transfer some of the burden of considering certain waiver requests from the Congress to the executive branch.

The text of the most recent version of the statute is reproduced at the bottom of this document.

The Maritime Administration is the agency within the U.S. Department of Transportation that receives and considers waiver requests for small passenger vessels. Its rule describes how a person may submit an application, what information is required, how MARAD will publicize the application and receive comments on it, and what criteria the agency will use in deciding whether to grant the request.

Before granting a waiver request, MARAD must find that "the employment of the vessel in the coastwise trade will not adversely affect – (1) United States vessel builders; or (2) the coastwise trade business of any person who employs vessels built in the United States in that business."

Despite the possibility that some coastwise requirements may be relaxed through the waiver process, the law still mandates that a vessel must be documented in the U.S. to carry passengers from one U.S. port to another.

For more information about this program, including instructions as to how to submit an application, contact Ms. Joann Spittle at 202-366-5979 (email: joann.spittle@dot.gov). Also, there is information on this program posted at www.marad.dot.gov; click on the icon labeled "Small Vessel Waiver Program."

Again, this administrative process for a coastwise waiver is available only for a vessel carrying 12 or fewer passengers for hire. For a passenger vessel with a larger capacity, the only option for a coastwise waiver is the traditional one of special congressional legislation. To be considered for an administrative coastwise waiver, the small passenger vessel must be at least three years old; a newly built vessel is not eligible.

PUBLIC LAW 105-383, as amended by section 207(c) of PUBLIC LAW 107-295
TITLE V - ADMINISTRATIVE PROCESS FOR JONES ACT WAIVERS

SEC. 501. FINDINGS.
The Congress finds that - (1) current coastwise trade laws provide no administrative authority to waive the United-States-built requirement of those laws for the limited carriage of passengers for hire on vessels built or rebuilt outside the United States; (2) requests for such waivers require the enactment of legislation by the Congress; (3) each Congress routinely approves numerous such requests for waiver and rarely rejects any such request; and (4) the review and approval of such waiver requests is a ministerial function which properly should be executed by an administrative agency with appropriate expertise.

SEC. 502. ADMINISTRATIVE WAIVER OF COASTWISE TRADE LAWS.
Notwithstanding sections 12106 and 12108 of title 46, United States Code, section 8 of the Act of June 19, 1886 (46 U.S.C. App. 289), and section 27 of the Merchant Marine Act, 1920 (46 U.S.C. App. 883), the Secretary of Transportation may issue a certificate of documentation with appropriate endorsement for employment in the coastwise trade as a small passenger vessel or an uninspected passenger vessel for an eligible vessel authorized to carry no more than 12 passengers for hire if the Secretary, after notice and an opportunity for public comment, determines that the employment of the vessel in the coastwise trade will not adversely affect - (1) United States vessel builders; or (2) the coastwise trade business of any person who employs vessels built in the United States in that business.

SEC. 503. REVOCATION.
(a) REVOCATION FOR FRAUD.—The Secretary shall revoke a certificate or an endorsement issued under section 502, after notice and an opportunity for a hearing, if the Secretary determines that the certificate or endorsement was obtained by fraud.
(b) APPLICATION WITH CRIMINAL PENALTIES.—Nothing in this section affects – (1) the criminal prohibition on fraud and false statements provided by section 1001 of title 18, United States Code; or (2) any other authority of the Secretary to revoke a certificate or endorsement issued under section 502 of this Act.

SEC. 504. DEFINITIONS.
In this title: (1) Secretary. -The term "Secretary'' means the Secretary of Transportation. (2) Eligible vessel. -The term "eligible vessel'' means a vessel that - (A) was not built in the United States and is at least 3 years of age; or (B) if rebuilt, was rebuilt outside the United States at least 3 years before the certification requested under section 502, if granted, would take effect. (3) Small passenger vessel; uninspected passenger vessel; passenger for hire. - The terms "small passenger vessel'', "uninspected passenger vessel'', and "passenger for hire'' have the meaning given such terms by section 2101 of title 46, United States Code.