U.S. SENATE LEADERS PREPARE BILL TO ESTABLISH NEW U.S. SHIP REGISTRY

   Senate Majority Leader Trent Lott and Sen. John Breaux, D-La., will soon
introduce legislation to establish the nation’s first tax-free ship
registry.
   The registry would be run jointly by the Maritime Administration and the
Coast Guard, and would be open to non-U.S.-built ships.
   The goal of the registry is to bring new tonnage under the U.S. flag
which would be available to the Defense Department in national emergencies.
   Once registered, the ships will operate tax-free, and seafarers’ wages
up to $80,000 annually would not be subject to U.S. income taxes.
   To qualify for enrollment, ships in the new registry will be required to
meet U.S. Coast Guard standards.
   Vessels are currently made available to the Defense Department through
the Maritime Security Program, a 10-year U.S. ship subsidy program which
covers 47 U.S.-flag, U.S.-crewed ships, at $2.1 million per vessel per year.
   Not yet halfway through the 10-year program, some Congressmen have been questioning continued support of the program. Since the program started in 1996, U.S.-flag lines such as APL and Lykes Bros. have been acquired by
foreign companies, which have set up U.S.-based ship-operating companies to circumvent the U.S.-flag requirements.
   The legislation is expected to be introduced in the Senate during the
next two weeks.