Puerto Rico Senate adopts Jones Act reform resolution
by Michael Hansen Hawaii Shippers Council
Two concurrent resolutions calling on the U.S. Congress to exempt the noncontiguous domestic trades of the United States from the U.S. build requirement of the Jones Act were recently introduced in the Legislative Assembly of Puerto Rico, and one resolution was adopted by the Puerto Rico Senate on Monday, May 6, 2013.
The Jones Act is the common name for Section 27 of the Merchant Marine Act of 1920 that requires vessels be U.S.-built, U.S. flag, U.S.-owned and U.S.-crewed to carry cargo between domestic places in the U.S. The noncontiguous trades of the U.S. are Alaska, Guam, Hawaii and Puerto Rico.
Territorial Senator Lawrence N. “Larry” Seilhamer Rodríguez (PNP / NPP) introduced Resolucion Concurrente del Senado 21 (RCS 21) in late April 2013 and the Senate of the Legislative Assembly of Puerto Rico adopted the resolution on Monday, May 6, 2013. Senator Seilhamer Rodriguez is currently the minority leader in the Puerto Rico Senate.
In the House, Territorial Representative Antonio L “Tony” Soto Torres (PNP / NPP) introduced Resolucion Concurrente de la Camara 32 (RCC 32)
on April 26, 2013, it has been referred to committee and is awaiting hearings. Rep. Soto Torres is a member of the minority in the Camara de Representatives, or House of Representatives.
The two Puerto Rico resolutions are nearly the same and wholly based upon the two resolutions introduced in to the Hawaii State House on March 13, 2013. The companion resolutions, House Concurrent Resolution 150 ( HCR 150) and House Resolution 119 (HR 119), were both entitled, “Requesting Congress To Exempt The Noncontiguous Domestic Trades of Alaska, Hawaii, and Puerto Rico From the United States Build Requirement of the Jones Act for Large Oceangoing Ships”
Both Sen Seilhamer Rodriguez and Rep Soto Torres are members of the New Progressive Party of Puerto Rico, NPP (in Spanish, Partido Nuevo Progresista de Puerto Rico, PNP) and popularly known as the “Progresistas. The PNP / NPP advocates for Statehood and is currently the minority in both chambers of the Legislative Assembly as a result of the 2012 elections.
Majorities in both chambers are held by Popular Democratic Party of Puerto Rico, PDP (in Spanish, Partido Popular Democratico de Puerto Rico, PPD), and commonly known as “Populares,” who advocate for an enhanced commonwealth political status.
The current Governor of Puerto Rico Governor Alejandro Garcia Padilla is a PPD / PDP member.
Puerto Rico’s single non-voting delegate to congress, Representative Pedro R. Pierluisi Urrutia, formally known as the Resident Commissioner of Puerto Rico to the U.S. Congress, is a PNP / NPP member and the only member of Congress that serves a four year term.
We look forward to additional support from the Commonwealth of Puerto Rico for Jones Act reform.
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The Hawaii Shippers Council (HSC) is a business league organization incorporated in 1997 to represent cargo interests – known as “shippers” – who tender goods for shipment with the ocean carriers operating the Hawaii trade.
Please contact the HSC at email pacmar@hawaiiantel.net if you wish to be placed on our email list.
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News coverage of RCS 21:
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Background -- Puerto Rico Political Overview—As a Result of the 2012 Elections
The new administration of Governor Alejandro Garcia Padilla through its cabinet secretary for economic development indicated earlier this month that they would seek a full Jones Act exemption for the Commonwealth of Puerto Rico as recommended last year in a report by the Federal Reserve Bank of New York, commonly known as the New York Fed.
Gov Garcia Padilla won a closely contested election in November 2012 defeating the incumbent former Governor Luis Guillermo Fortuño Bursetby a narrow 0.6% margin and assumed office less than three months ago on January 2, 2013. The legislative election results were far more definitive. Gov Garcia’s party, Popular Democratic Party of Puerto Rico, PDP (in Spanish, Partido Popular Democratico de Puerto Rico, PPD), and commonly known as “Populares,” won majorities in both chambers of the Commonwealth’s Legislative Assembly. The PDP has a supermajority of 66.67% in the Senate with 18 out of 27 seats, and a simple majority of 55% in the House with 28 out of 51 seats. Gov Garcia is also a member of the national Democratic Party
The PDP supports an enhanced commonwealth political status for Puerto Rico similar to that of the Commonwealth of the Northern Mariana Islands (CNMI), which among other things is exempt from the Jones Act by the international treaty that led to its annexation.
Former Gov Fortuño is a member of the New Progressive Party of Puerto Rico, NPP (in Spanish, Partido Nuevo Progresista de Puerto Rico, PNP) and popularly known as the “Progresistas.” The NPP supports Statehood for Puerto Rico. Gov Fortuño is a member of the national Republican Party and while in office advocated a full exemption from the Jones Act for Puerto Rico.
Puerto Rico’s single non-voting delegate to congress, Representative Pedro R. Pierluisi Urrutia, formally known as the Resident Commissioner of Puerto Rico to the U.S. Congress, is the only member of Congress that serves a four year term. Rep Pierluisi was reelected defeating Rafael Cox Alomar (PDP) by a margin of 1.28 %, and will serve another four years until the end of 2016. Rep Pierluisi is a member of the NPP, but unlike former Gov Fortuño, is a member of the national Democratic Party and caucuses with the Democrats in Congress.
It would seem reasonable to assume that any federal legislative measure to exempt Puerto Rico from the Jones Act, either in full or in part, would, during the near to medium term, likely have to be introduced by Rep Pierluisi in the U.S. House of Representatives in order to achieve any success. Especially as the other members of Congress will look to the resident commissioner for leadership on the Jones Act issue as it applies to Puerto Rico.
Among the other unique features of Puerto Rico’s political system is that all members of the Commonwealth’s bicameral Legislative Assembly – Senate and House alike – serve concurrent four year terms. As such, the current 17th Legislature of Puerto Rico will remain in office until January 8, 2017. Candidates for governor and the resident commissioner traditionally stand for election together as “running mates.” The second-in-command administrative position typically held by an elected lieutenant governor elsewhere in the U.S., in Puerto Rico is the Secretary of State, who is appointed by the governor and approved by both chambers of the Assembly.
There are a total of six registered local political parties in Puerto Rico. After the two main local parties, i.e., the PDP and NPP, the third most important political party with only a single member in the Assembly is the Puerto Rico Independence Party (Spanish Partido Independentista Puertorriqueno, PIP) popularly known as the “independenistas.”
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VOCERO Microsoft Translation:
They ask Congress to partially exempt Puerto Rico from laws of cabotage
6 May 2013 - politics, Puerto Rico- Cyber News
"The island, as well as the other non-contiguous jurisdictions, is dependent on maritime trade so there is a direct cause and effect relationship between the laws of cabotage and our economic development"
Spokesman of the New Progressive Party (PNP) in the Senate, Larry Seilhamer Rodríguez presented Senate Concurrent Resolution 21 asking the Congress of the United States to enact legislation to partially exempt Puerto Rico from compliance with the laws of cabotage.
"The legislature of the State of Hawaii submitted two measures requesting Congress to reform the laws of cabotage in order that Hawaii, Alaska and Puerto Rico have a partial waiver that allows the use of large ships built outside the United States, with the primary purpose of providing economic relief on the price of fuel and merchandise." This concurrent resolution, precisely seeks to join the claim of Hawaii. The island, like the other non-contiguous jurisdictions, is dependent on maritime trade so there is a direct cause and effect relationship of between the laws of cabotage and our economic development", said Seilhamer Rodríguez.
The Senator recalled that recently the Government Accountability Office of United States (GAO, for its acronym in English) investigated the effect of the cabotage laws in Puerto Rico at the request of the Resident Commissioner, Pedro Pierluisi, and recognized that it would be cheaper for Puerto Rico to use not only U.S.-flagged fleet but other boats too.
Similarly, the spokesman of the PNP in the Senate explained that in the case of the transport of products for power generation, the cabotage laws represent a fundamental obstacle.
"The use of natural gas for the production of energy is currently one of the most effective tools to reduce the dependence on oil for which there is a great need that Puerto Rico make a transition to natural gas." Recent discovery of deposits of natural gas in the United States represent an appreciable and economic source of emerge if transportation costs can be minimized. “In that sense, it is necessary to obtain a partial exemption to the cabotage laws to allow natural gas ships from United States so to take advantage of the high-flow that exists of this fuel", said the Senator.
Seilhamer Rodríguez clarified that the exemption concerning the construction of ocean-going vessels is a limited reform of the cabotage laws that will not change flag, ownership and American crew provisions as currently apply to operations in non-contiguous jurisdictions.
"This will allow the use of the new built ships abroad, it will eliminate barriers to entry, and it will take advantage the flow of natural gas from the United States to make Puerto Rico more competitive and provide relief to the consumer cost of electricity", he said.
Likewise, he pointed out that this proposal reflects requests made by leading statesmen like the former Governor Carlos Romero Barceló and Pierluisi, among others, beause it is a process that can lower costs specifically in the production of electrical energy. It is also equivalent to what has been requested by States such as Hawaii and Alaska.
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SIN COMILLAS Microsoft Translation:
Senate urges US Congress special cabotage law treatment
Mon, May 6, 2013
By editorial without quotes
The Senate of Puerto Rico agreed to request to the Congress of the United States the adoption of legislation granting partial exemption from complying with the laws of cabotage to the island.
The action is contained in the Concurrent Resolution 21 of the Senate, authored by the spokesperson of the PNP, Larry Seilhamer Rodríguez, requesting the Congress of the United States to pass legislation to achieve partial exemption from compliance with the federal legislation on cabotage which would permit the use of large ocean-going ships built outside the United States on the routes from ports of the States to Hawaii, Alaska and Puerto Rico..
In its explanatory statement, the resolution refers to federal cabotage law that states the maritime transportation between Puerto Rico and the rest of the United States has to be performed only in American built boats, with American flag, American owners and American crew.
He also argues that federal cabotage legislation governs four of the seven non-contiguous national jurisdictions, i.e. the States of Hawaii, Alaska, the territory of Guam and Puerto Rico. While the territory of American Samoa, the Commonwealth of the Northern Mariana Islands and the Virgin Islands of the United States are completely exempt.
A recent study by the Government Accountability Office (GAO, for its acronym in English) investigated the effect of laws of cabotage in Puerto Rico. The GAO acknowledged that it would be cheaper for Puerto Rico to use not only U.S.-flagged fleet but other boats too. The results of the study were widely criticized for lack of scientific rigor of analysis.
In addition, the body approved Senate Resolution 237, authored by Senator Rossana López León, which instructs committees on Government, government efficiency and economic innovation, and civil rights, citizen participation and Social economy conduct a study on the report by the Government Accountability Office (GAO) on 14 March 2013, related to the economic impact of the cost of sea freight between Puerto Rico and United States, as a result of the imposition of federal cabotage laws.
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EOM