Close Agency Loopholes to the Jones Act
Floor Speech
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Mr. GARAMENDI. Mr. Speaker Pro Tempore, today I reintroduce the ``Close Agency Loopholes to the Jones Act of 2023,'' which would close nearly 50 years of anti-Jones Act decisions--known as ``letter rulings''--by U.S. Customs and Border Protection (CBP).
As chairman of the House Armed Services Subcommittee on Readiness and having served as ranking member of the Subcommittee on Coast Guard and Maritime Transportation from 2013 to 2018, I am committed to rebuilding the U.S.-flagged fleet including international and Jones Act vessels. For decades, Congress has stood idly by while federal regulators chipped away at the Jones Act, allowing foreign vessels paying poverty wages to take jobs from Americans working in our maritime industry. That must stop.
In December 2020, Congress enacted my amendment to the Outer Continental Shelf Lands Act as section 9503 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116-283) affirming that the application of the Constitution, laws, and civil and political jurisdiction of the United States to the Outer Continental Shelf also applies to non-mineral energy resources and exploring for, developing, producing, transporting, or transmitting such resources. As I stated in my remarks on September 24, 2020 (Congressional Record, Vol. 166, No. 166), Congress always intended U.S. law to apply to any form of exploration, development, production, transportation, and transmission of energy resources under the Outer Continental Shelf Lands Act of 1953.
On January 25, 2021, President Biden's first executive order (no. 14005) directed federal agencies to maximize the use of American mariners, American-built ships, and U.S.-flagged vessels under the Jones Act. In response to my amendment enacted in the FY21 NOAA, U.S. CBP issued a headquarters ruling letter ``HQ H309186'' on January 27, 2021, correctly holding that the transportation of ``scour protection'' materials from the Port of Providence, Rhode Island to a wind project on the Outer Continental Shelf off the southeast shore of Martha's Vineyard is a coastwise activity under the Jones Act.
On March 17, 2021, the national trade association for the offshore wind industry sent a letter to the Commissioner of CBP requesting that the agency withdraw HQ H309186. In this letter, the offshore wind industry mischaracterized my September 2020 remarks from the Congressional Record as somehow supporting its request that CBP withdraw the January 27, 2021, letter ruling. On March 25, 2021, CBP issued a revised headquarters ruling letter (HQ H317289) contradicting its January 2021 letter ruling and the President's stated policy, allowing foreign vessels to construct energy projects on the Outer Continental Shelf.
To be clear, my September 2020 remarks in the Congressional Record stated that my amendment to Outer Continental Shelf Lands Act simply clarified that all forms of offshore energy development are indeed subject to the same U.S. laws that apply to the offshore oil and gas industry. That does not mean that I accept the validity of the many administrative loopholes to the Jones Act created by decades of bad letter rulings and poor enforcement by CBP. Rather, I have long held that many of the activities regulators have incorrectly allowed the offshore oil and gas industry to engage in using foreign-flagged vessels are clear violations of the plain text of the Jones Act and original Congressional intent.
It is now clear to me that the regulators at CBP are unwilling to fully implement the Jones Act, as directed by President Biden's Executive Order 14005. My `Closing Agency Loopholes to the Jones Act' would finally force federal regulators to enforce the law as Congress intended in 1920, maximizing job opportunities for American mariners, U.S.-flagged vessels, and domestic shipyard workers. In effect, my legislation would also compel CBP to implement the President's stated policy by fully enforcing the Jones Act.
On April 26, 2023, the House Committee on Transportation and Infrastructure passed two key sections from my bill in the ``Coast Guard Authorization Act of 2023'' (H.R. 2741 ). Sections 8 and 9 from my bill are now incorporated as Section 312 (Notification) and Section 313 (Publication of Fines and Penalties) of H.R. 2741.
Section 312 requires foreign-flagged vessels purporting to operate under a Jones Act exemption to notify CBP and post online its legal basis for operating on the Outer Continental Shelf. Currently, CBP uses an honor system for foreign vessels operating on the Outer Continental Shelf and their legal basis for doing, which undermines the agency's' ability to enforce the Jones Act properly and enables outright fraud. Section 313 requires CBP to publish online any penalties against foreign-flagged vessels operating illegally on the Outer Continental Shelf, including for failing to notify the agency of the purported Jones Act exemption in advance.
For this Congress, I also require in my bill that offshore energy developers on the Outer Continental Shelf pay a prevailing wage. Under current law, project developers operating in the United States' Exclusive Economic Zone at sea can pay poverty wages, exploiting foreign workers and undermining American mariners' ability to compete for this work. After decades of failed promises, we are finally building the clean energy economy of the future. American mariners are ready, willing, and able to work in the burgeoning offshore wind industry. But they cannot be expected to compete against foreign-flag vessels paying poverty wages to workers with no legally guaranteed collective bargaining rights or labor standards.
Mr. Speaker Pro Tempore, I encourage all members of the House to cosponsor this critical and long overdue legislation.
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