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U.S. Laws and Regulations Should Be Changed to Facilitate the Increase of Larger Recreational Vessels Operating in U.S. Waters Issue: The current regulatory tonnage limit of 300 gross tons (GT) to register as a recreational vessel under the U.S. flag limits the economic impact of this sector and hurts the overall U.S. economy. Discussion: The recreational vessel industry accounts for significant economic impacts in the marine trades and overall U.S. economy. Accordingly, more large recreational vessels in the U.S. mean more opportunities to increase market share and reap the benefit of the economic impact of these economic generators. The United States accounts for approximately 20 % of the world’s large recreational vessel market encompassing over 1,100 companies employing close to 28,800 workers. The estimated economic impact of large recreational vessels alone in the United States is close to $6 billion, and as a result is a significant segment of the marine tourism. o Cruising vessels and charters have a positive economic impact on coastal communities. Each large recreational vessel spins off significant benefits in additional jobs, shipyard repair and refurbishing work, provisioning, and impact on local economies. A large yacht (24 meters and up) spends roughly 10 % to 15 % of its total value each year on various services. That equates to $500,000 to $1 million or more in spending per year per vessel. The large yacht fleet is estimated to be close to 4200 vessels with an estimated 40 % to 50 % of those vessels owned by Americans. However the majority of those vessels are flagged outside the United States. Success Story: The Motor Yacht Freedom was recently flagged under the U.S. flag using the American Bureau of Shipping Guide for Building and Classing Motor Pleasure Yachts as an equivalent standard to the requirements of 46 Code of Federal Regulations (CFR). This approach suggests that standards can be developed to facilitate the placing of additional recreational vessels of larger than 300 GT under the U.S. flag. Regulatory Objective: USSA sent a letter in December 2014 to and initiated a dialogue with the Coast Guard to begin the development of a comprehensive regulatory regime centered on an increase in the regulatory tonnage limit of 300 GT to facilitate the more U. S. flag recreational vessels of a larger tonnage operating within U. S. waters for longer periods of time. Elements of this effort could include: A new subchapter in 46 CFR could be created to accomplish this. Provide for the documentation larger vessels as recreational vessels. Create structural and safety standards for recreational vessels. Establish appropriate manning standards. Action: To facilitate the flagging of large recreational vessels of 300 GT and larger under the U.S. flag to increase the number operating in U.S. waters: (1) Meet with the Coast Guard to develop an appropriate regulatory regime; and (2) Seek legislation from Congress as needed to provide the necessary authority.
757 SE 17 Street, #662, Fort Lauderdale, FL 33316 * 954‐792‐8666 ussuperyacht.com * info@ussuperyacht.com
American Boat Building Restoration Act Goal: Grow and bring manufacturing jobs back to America. Background: As recently as the late 1970’s, the United States was the world’s leading manufacturer in the large boat building sector. Over the past several decades, these large boats have grown in size, complexity and overall economic impact. However, in the United States, there has been a sharp decline in number of vessels produced, as well as the number of U.S. companies capable of building those boats. Concurrently, there has been a substantial increase in the number and scope of boat building companies outside the United States. This loss, in a critical U.S. manufacturing sector, has resulted in the elimination of tens of thousands of high‐paying, skilled labor positions nationwide. It should also be noted that approximately 70% of the world’s large boat owners are Americans – Americans who are forced to buy foreign‐built boats due to the lack of a diverse U.S. option. This incentive program is designed to reignite this U.S. manufacturing sector and increase the demand for much needed high skilled labor jobs. It will also have a significant positive overall economic impact to the United States. Big Boats = Big Jobs In 2012, the United States was ranked 4th in the World’s Global Order Book with 71 projects. In addition, 4 of the top 20 companies were in the United States. In 2017, only one (1) of those four (4) is still in business‐ Westport – based in Seattle, WA. The Decline of U.S. Boat Builders: Then Chris Craft Roamer Broward Marine Inc.* Burger Boat Company Delta Marine Denison Marine Stephens Marine Egg Harbor Yachts Trojan Yacht Company Derecktor Christensen Trinity Newcastle Westport
versus
Today Delta Marine Westport Burger Boat Company
*In the late1980’s – Broward Marine was the world’s leading builder of yachts!
Economic Impact of superyachts: The US represents 20% of the $32B global service/manufacturing yacht market or $6B
Note: There are 8,000 vessels over 80’ worldwide 40% homeport in the Americas 48% homeport in Europe 12% homeport in the rest of the world
Conclusion: Boat buying/ownership needs to be returned to primarily a tool for business development and prospecting that will also help fuel the American boat building industry, a sector that has the potential to employ tens of thousands of Americans. By creating an incentive that drives business to the American boat building industry, we can keep American jobs and money in America! Action: Remove the recreational boat building industry from the burdensome Revenue Act of 1978 (PL 95‐600) Section 361 and allow the deductions claimed by business who own and operate American built yachts. This will ensure that only American companies and American jobs are positively impacted by this action. 757 SE 17 Street, #662, Fort Lauderdale, FL 33316 * 954-792-8666 ussuperyacht.com * info@ussuperyacht.com
MARAD Grants for Recreational Vessel Shipyards Would Significantly Impact the U.S. Economy and Create Jobs Issue: A lack of grants awarded to shipyards that work on recreational vessels shows a tremendous misunderstanding exists about their significant role in overall maritime community and U.S. economy. Background: The recreational vessel industry is an integral part of the U.S. economy offering opportunities in the maritime and recreational sectors. The United States accounts for approximately 20% of the world’s large recreational vessel market encompassing over 1,100 companies that employ close to 28,800 workers. The estimated economic impact in the United States is close to $6 billion. o The economic and jobs impact is significant. Increasing this opportunity for more recreational vessels increases this sector of the economy and adds to the already significant marine tourism segment. o Specifically each large recreational vessel spins off significant jobs, shipyard repair and refurbishing work, provisioning, and impact on local economies. It’s a true ripple effect. o A large vessel (24 meters and up) spends roughly 10 % to 15 % of its total value each year on various services. That equates to $500,000 to $1 million or more in spending per year per vessel. Shipyards that work on recreational vessels: o Are an expanding part of the maritime industry and have the same economic impact as commercial yards. o Use and maintain the same skills, training, technology, and equipment as commercial vessels, especially for large recreational vessels. MARAD: The U.S. Maritime Administration has a grant program to support and revitalize the U.S. shipbuilding capacity. o MARAD grants have not been awarded to shipyards that only build and repair recreational vessels. o MARAD uses a length of 100 ft., rather than the international industry standard of approx. 80 ft., in classifying large recreational vessels. In early 2014, USSA met with MARAD representatives to discuss inclusion of shipyards working on recreational vessels because the same skills are required as supportive of the national shipbuilding base. MARAD held its Second National Maritime Strategy Symposium on May 6, 2014, at which the shipyard grant program was discussed, including for recreational vessels. USSA has followed up with a request to MARAD to include shipyards that build and repair recreational vessels in the final national maritime strategy, especially those yards working on both recreational and commercial vessels. Action: The U. S. Maritime Administration should recognize the significant economic impact of recreational vessels on the U.S. economy by making grants to the recreational vessel shipbuilding and repair facilities and attendant skill sets as part of its National Maritime Strategy to bolster the expansion of this segment of the U.S. maritime industry.
757 SE 17 Street, #662, Fort Lauderdale, FL 33316 * 954‐792‐8666 ussuperyacht.com * info@ussuperyacht.com
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