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Congressman Bobby Scott

Representing the 3rd District of Virginia

IN OPPOSITION TO THE BYRNE-FRANKEL AMENDMENT TO THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2018

July 14, 2017
Floor Statements

Mr. SCOTT of Virginia. Mr. Chairman, I rise in opposition to this amendment.

   The amendment shifts workers who repair super yachts and large, luxury watercraft out of coverage under the Longshore and Harbor Workers' Compensation Act and into coverage under State workers' compensation programs.

   But it doesn't just amend the longshoremen act. Rather, it creates a problem with the Coast Guard law. The Coast Guard opposed an identical amendment last year because it creates widespread damage to Coast Guard regulatory and enforcement authorities, implicates U.S. treaty obligations, and could affect the collection of tonnage taxes on foreign flagged vessels.

   The Department of Labor also opposes the amendment because it could lead to uncertainty and foster litigation under the longshoremen coverage. Moreover, by shifting workers out of longshoremen into the weak State workers' comp laws such as Florida, it could permanently impoverish workers.

   Last year, the Florida Supreme Court held that the Florida workers' compensation law was so anemic that it was unconstitutional.

   If the goal is to provide reasonable insurance rates, then it should be in the insurance industry not by complicating the Coast Guard, by complicating the Department of Labor, and denying workers their benefits under the Longshoremen's Compensation Act.

   Mr. Chairman, I include in the Record a letter from the Committee on Education and the Workforce opposing this amendment.

   Committee on Education and the Workforce, House of Representatives,

   Washington, DC, July 12, 2017. 
Re Opposition to Making Amendment 302 in Order as part of the National Defense Authorization Act for FY 2018 (H.R. 2810)


Hon. PETE SESSIONS, 
Chairman, Committee on Rules, 
House of Representatives, Washington, DC. 
Hon. LOUISE MCINTOSH SLAUGHTER, 
Ranking Member, Committee on Rules, 
House of Representatives, Washington, DC.

   DEAR CHAIRMAN SESSIONS AND RANKING MEMBER SLAUGHTER: I am writing to request that you not make Amendment 302 in order as part of the rule for the FY 2018 National Defense Authorization Act (H.R. 2810).

   The amendment offered by Representatives Frankel and Byrne changes the definition of a ``recreational'' vessel under U.S. Coast Guard (USCG) boating safety authorizing legislation. The amendment authors' goal is to change workers' compensation coverage for those repairing luxury water craft and superyachts by shifting coverage for these workers from the Longshore and Harbor Workers Compensation Act (LHWCA) into state workers' compensation programs.

   However, the amendment does not amend the LHWCA. Rather it changes the definition of ``recreational vessel'' under Section 4301 of Title 46 (the Federal Boat Safety Act of 1971). According to the Coast Guard, this approach to amending the LHWCA will have adverse collateral impacts on Coast Guard regulatory and enforcement authorities, implicate U.S. treaty obligations, and affect collection of tonnage taxes on foreign flagged vessels. The USCG statement, attached to this letter, notes that this provision could:

   Exclude vessels now covered under the U.S. implementing legislation for the International Convention on the Control of Harmful Anti-Fouling Systems on Ships, and reduce available civil monetary penalties to deter violations;

   Allow a foreign vessel owner to exempt itself from tonnage taxes by declaring its vessel to be under repair; and,

   Allow foreign flagged vessels to avoid requirements for safety management systems under the International Safety Management Code.

   The U.S. Department of Labor (DOL) objected to this provision in the last Congress, as it would ``lead to uncertainty and foster litigation regarding Longshore Act coverage'' because the definition of ``recreational'' vessel introduces subjective criteria.

   This identical amendment was included in the House National Defense Authorization Act for FY 2017 as Section 3512, but was removed in the House-Senate conference following the numerous objections raised by the U.S. Coast Guard and the U.S. Department of Labor.

   None of these concerns have been considered in hearings within the respective committees of jurisdiction for USCG or DOL, and deserve careful consideration before being brought to a vote.

   I thank you for your consideration of this request.

   Sincerely,

   ROBERT C. BOBBY SCOTT
Ranking Member.

   Encl: U.S. Coast Guard Views on Amendment to the National Defense Authorization Act (this set of views applied to the identical language included in Amendment 302 that was adopted in Section 3512 the FY 2017 National Defense Authorization Act).

   Coast Guard Views on Sec. 3512 of H.R. 4909, the NDAA for FY17

   The Coast Guard would oppose the previously referenced amendment to 46 U.S.C. §4301. As a general matter, it seems like this proposed amendment is out of place. Sec. 803 of the American Investment and Recovery Act amended sec. 2(3)(F) of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. §902(3)(F)), a statutory regime squarely within the purview of the Department of Labor (DOL). Indeed, in 2011, it was DOL--not the Coast Guard--that promulgated the rule in question that, according to industry background documentation, would appear to be the root cause of this issue. Thus, any changes to address this issue should be more properly directed either to the Longshore and Harbor Workers' Compensation Act or to DOL and its implementing regulations.

   Aside from the amendment's misplaced statutory location, the proposed amendment contains numerous drafting issues. For example, the proposed amendment contains no limitation of the ``dismantling'' language to those activities ``in connection with the repair of such vessel.'' Irrespective of the drafting issues, the proposed amendment would not provide any immediate relief as the draft language contains terms undefined by statute that prevent it from being self-executing. Finally, if adopted, the amendment would likely create a wholly unnecessary bifurcated regulatory scheme between the DOL regulations under 20 C.F.R. §701.501-701.505 and additional regulations promulgated by the Coast Guard.

   The proposed change to the definition of a ``recreational vessel'' to include ``any vessel, including a foreign vessel, being repaired or dismantled [.....] during such repair or dismantling if the vessel (1) shares elements of design and construction of traditional recreational vessels (as so defined); and (2) when operating is not normally engaged in a military, commercial, or traditionally commercial undertaking'' has significant impacts on Coast Guard regulatory and enforcement authorities.

   The change in the definition would expand the current exclusion for ``recreational vessels'' from the U.S. implementing legislation for the International Convention on the Control of Harmful Anti-Fouling Systems on Ships. Specifically, civil penalties for owners of ``recreational vessels'' are statutorily limited to $5,000 as compared to the $37,500 maximum penalty for all other vessel owners.

   The change in the definition could be construed to allow a foreign vessel owner to exempt itself from tonnage taxes required under 46 U.S.C. §60301, by claiming that its vessel is ``being repaired'' and thereby a recreational vessel exempted from tonnage taxes.

   The change in the definition could also be construed to allow foreign flagged vessels to avoid the requirements to maintain a safety management system onboard under 46 U.S.C. §3201, et seq. by claiming that its vessel is ``being repaired'' and thereby a recreational vessel exempted from Safety Management Requirements under the International Safety Management Code.

   In addition to these statutory impacts, there are numerous Coast Guard regulations not related to Longshoreman and Harbor Workers' Compensation Act authorities that would be impacted by the change. These include:

   33 C.F.R. §95.001

   33 C.F.R. §151.51

   46 C.F.R. §2.01-7

   46 C.F.R. §4.03-50

   46 C.F.R. §67.11

   46 C.F.R. §136.105

   This list is by no means exhaustive. Given the time for review, the Coast Guard has not been able to conduct a comprehensive review of statutory and regulatory impacts that would be implicated by this change. Furthermore, as drafted, this change would require the Coast Guard to reallocate a substantial amount of financial and personnel resources to ensure that its regulations were in alignment with the revised definition. Such an undertaking is wholly incompatible with the current fiscal climate.

   Mr. SCOTT of Virginia. Mr. Chairman, I urge a ``no'' vote on this amendment.