VES-10-02-RR:IT:EC 114247 GEV
Jeffrey F. Lawrence, Esq.
Sher & Blackwell
Suite 900
1850 M Street, N.W.
Washington, D.C. 20036
RE: Dredging; Cutter Dredge; 46 U.S.C. App. 292; Pub. L. 102-587
Dear Mr. Lawrence:
This is in response to your letter of February 10, 1998, on
behalf of your client, Stuyvesant Dredging Company ("SDC"),
requesting a ruling that two cutter dredge vessels to be
documented under the U.S. flag with a registry endorsement and
chartered to SDC or an entity in which it has an ownership
interest may perform dredging operations in the United States.
Our ruling is set forth below.
FACTS:
SDC is the time charterer of the U.S.-flag hopper dredge
STUYVESANT. SDC expects to bid on a project to dredge the lower
Colorado River in the United States. Dredging will begin 9,000
feet north of the Morelos Dam near Yuma, Arizona, and continue
downstream to the Morelos Dam. Because of the location and
nature of the work, the hopper dredge STUYVESANT cannot be used
on this project. Accordingly, to fulfill this contract, SDC
plans to enter into a project charter for two non-hopper cutter
dredges, presently named the COLIMA and the SINALOA, (hereafter
referred to as the "Cutter Dredges"). The AAMCO shipyard built
both the Cutter Dredges in the United States in 1979 and 1980,
respectively. For some time, however, they have been documented
under the Mexican flag and have been operated outside the United
States.
- 2 -
Ownership of the Cutter Dredges would be transferred to a
U.S. corporation (or similar entity) formed pursuant to the laws
of a State of the United States. The corporation would meet the
requirements for a corporation owning a registry vessel (i.e., it
would be a U.S. corporation
with a U.S. citizen as its president and non-U.S. citizens would
not comprise more than a minority of a quorum of the board of
directors, but the shareholders may be non-U.S. citizens). The
Cutter Dredges would be documented under the laws of the United
States and would fly the U.S. flag with a registry endorsement
issued pursuant to 46 U.S.C. 12105. These vessels would be
chartered to SDC, or an entity in which SDC has an ownership
interest, for use on this project and the charter of the Cutter
Dredges would terminate when the Colorado River project is
completed.
ISSUE:
Whether a U.S.-built cutter dredge that was placed under a
foreign flag and will be transferred to the U.S. flag with a
registry endorsement on its certificate of documentation can be
chartered to SDC for dredging operations in the United States
without violating the provisions of 46 U.S.C. App. 292, as
amended.
LAW AND ANALYSIS:
The navigation law pertaining to dredging is found at 1 of
the Act of May 24, 1906 (34 Stat. 204; 46 U.S.C. App. 292).
This statute, which provided that dredging in the United States
was prohibited by any foreign-built dredging vessel except one of
those named in 2 of the Act of May 24, 1906, was amended by the
Oceans Act of 1992 (Pub. L. 102-587, 5501(a)(1) and (2), 106
Stat. 5039, 5084-85, effective November 4, 1992) to provide,
inter alia, that the coastwise eligibility requirements (i.e.,
U.S.-build, ownership and documentation) are applicable to
vessels used as dredges as of the effective date of that
legislation. However, pursuant to the statutory language of Pub.
L. 102-587, the amendments contained therein were not made
applicable to the STUYVESANT, as well as various other vessels
including:
...any other non-hopper dredging vessel documented
under chapter 121
[section 12101 et seq. of Title 46] and chartered to
Stuyvesant Dredging
Company or to an entity in which it has an ownership
interest, as is nec-
essary (a) to fulfill dredging obligations under a
specific contract, including
any extension periods; or (b) as temporary replacement
capacity which has
become disabled but only for so long as the disability
shall last and until the
vessel is in a position to fully resume dredging
operations; however, this
exception expires on December 8, 2022 or when the
vessel STUYVESANT
ceases to be documented under chapter 121 [section
12101 et seq. of Title
46], whichever first occurs. (Pub. L. 102-587,
5501(a)(2)(A)(iii))
- 3 -
With respect to the interpretation of the above provision,
we note the well-established "plain language" principle which
mandates that in determining legislative intent, the language of
the statute must first be examined. Phone Mate, Inc. v. United
States, 12 CIT 575, 690 F.Supp. 1048 (1988), aff'd, 867 F.2d 1404
(1989). In the absence of ambiguity, the plain meaning of that
statute must prevail. United Stats v. RMS Electronics, Inc., 67
CCPA 79, C.A.D. 1249, 642 F.2d 1081 (1980) (See also Consumer
Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102,
108 (1980)
As regards the Cutter Dredges under consideration, it is
readily apparent that as proposed they would meet the following
criteria clearly specified in the language of
5501(a)(2)(A)(iii) of Pub. L. 102-587: (1) the vessels are non-hopper dredging vessels; (2) the vessels will be documented under
Chapter 121 of Title 46; (3) the vessels would be chartered to
SDC to fulfill dredging obligations under a specific contract;
and (4) the dredging will take place prior to December 8, 2022,
or when the vessel STUYVESANT ceases to be documented under
Chapter 121 of Title 46.
Accordingly, compliance with the statutorily imposed
criteria cited above renders permissible the use of the subject
cutter dredges by SDC in the United States.
HOLDING:
A U.S.-built cutter dredge that was placed under a foreign
flag and will be transferred to the U.S. flag with a registry
endorsement on its certificate of documentation can be chartered
to SDC for dredging operations in the United States in accordance
with Pub. L. 102-587,
5501(a)(2)(A)(iii) without violating the provisions of 46
U.S.C. App. 292, as amended.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch