Sec. 2. Findings
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Congress finds the following: In 1920, Congress enacted the Merchant Marine Act (chapters 121 and 551 of title 46, United States Code), commonly referred to as the Jones Act . In 1953, Congress enacted the Outer Continental Shelf Lands Act ( 43 U.S.C. 1331 et seq. ) applying the Constitution, laws, and civil and political jurisdiction of the United States to the outer Continental Shelf. In 2020, Congress enacted section 9503 of the William M.
(Mac)Thornberry National Defense Authorization Act for Fiscal Year 2021 ( Public Law 116–283 ) affirming that application of the Constitution, laws, and civil and political jurisdiction of the United States to the outer Continental Shelf also applies to non-mineral energy resources and exploring for, developing, producing, transporting, or transmitting such resources. Therefore, the Jones Act prohibits the use of a non-Jones Act qualified vessel for the provision of any coastwise transportation of merchandise to or from a port of the United States (including territories or possessions to which the coastwise laws apply) to any point on the outer Continental Shelf, or between any two points on the outer Continental Shelf. U.S. Customs and Border Protection (hereinafter referred to as CBP ) is responsible for interpreting and enforcing the Jones Act. CBP has issued ruling letters and other interpretative guidance to requesting parties that provide the description of proposed activities. Unlike most federal agencies, CBP is required by section 625(c) of the Tariff Act of 1930 ( 19 U.S.C. 1625(c) ) to follow its past interpretive guidance and treatments of substantially identical transactions, unless it institutes a public notice and comment process to modify or revoke that interpretative guidance. As a result, CBP and market participants treat as binding ruling letters and interpretative guidance in addressing whether and how the Jones Act applies in substantially identical factual situations. Thus, CBP’s ruling letters—even if legally incorrect—have substantial impacts: When CBP purports to authorize a foreign vessel to transport merchandise between coastwise points, unless ordered by a Federal court to rescind such ruling letters, CBP does not take enforcement action against other foreign vessels engaging in substantially identical transactions, and vessel operators accordingly rely on CBP’s past ruling letters and guidance issued to other parties. Over several decades, CBP has purported to create an array of exemptions from the prohibitions of the Jones Act for the benefit of foreign vessels. On December 11, 2019, CBP published Customs Bulletin and Decisions, Vol. 53, No. 45 (hereinafter referred to as the 2019 Decision ) revoking a handful of its interpretations, recognizing that the analyses employed therein were inconsistent with the Jones Act and original congressional intent, including by using statutory language out of context, having been superseded by amendments, or being predicated on CBP-created distinctions that had always been irrelevant under the Jones Act. However, the 2019 Decision still left in force many ruling letters inconsistent with the Jones Act and original congressional intent, espousing the same unlawful doctrines, revoked others that properly interpreted the Jones Act, and created several new loopholes that purport to immunize much of the same foreign vessel activities that are now, and have always been, prohibited under the Jones Act. Thus, CBP has created invalid exemptions from the prohibition embodied in the Jones Act, using a variety of new and old doctrines inconsistent with original congressional intent. In 2014, the Supreme Court of the United States found in Utility Air Regulatory Group v. Environmental Protection Agency (573 U.S. 302, 328) that it is a core administrative law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate . These invalid, ultra vires doctrines, and their uses, include— an unlawfully broad interpretation of vessel equipment which conflicts with Congress’ statutory description of merchandise, and the explicit, limited statutory exemption; the paid out not unladen doctrine, which provides that pipe or cable laying operations are not coastwise trade subject to the Jones Act—even when the pipe is laid between two coastwise points, and in spite of Congress’ statutory prohibition against foreign vessels performing any part of the transportation by water of merchandise; the paid out not unladen doctrine is also used by foreign vessel operators to justify the transportation of merchandise attached to the paid out pipe or cable; the lifting operations exemption, which purports to permit self-propelled movements by a vessel when using a crane or like equipment to install or remove merchandise on or from offshore facilities or subsea infrastructure; the decommissioning activity exemption, which purports that merchandise transported as a result of decommissioning—i.e., the restoration of the sea-floor and the water surface by plugging and abandoning the well and removing the installation and facility—is not subject to the Jones Act; the offshore research vessel misapplications, which improperly extends the exclusion for oceanographic or limnological research vessels to commercial research activities that directly support the exploration for, or development, production, transportation, or transmission of, resources, on the outer Continental Shelf; and the pristine seabed exemption, where CBP has purported to hold that Outer Continental Shelf Lands Act’s explicit application to the subsoil and seabed of the outer Continental Shelf does not include the pristine seabed . If a ruling letter is contrary to the statute’s plain text and the expressed intent of Congress, or found unpersuasive by a Federal court, it will be invalidated as arbitrary and capricious. Federal courts have not squarely addressed the interpretations contained in these CBP ruling letters and other guidance, and thus have never upheld these interpretations as valid and authoritative.
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- 573 U.S. 302
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