DEMOCRATIC Congressman Gene Taylor, from the shipbuilding state of Mississippi, has introduced a proposed amendment that would effectively block conversion of Jones Act ships at foreign shipyards, while still allowing the rebuilt ships to retain their eligibility under the US cabotage law.

The issue has been contentious within US shipowning circles for several years. It was in the spotlight two months ago, when Seacor won a landmark judgement from an US appellate court that established that conversion of two Seacor tankers to double-hulled configuration at a Chinese shipyard did not jeopardise their eligibility to continue in the Jones Act trades.

The Jones Act requires that ships conducting cabotage business be built, owned, crewed and controlled by US entities.

The Seacor case featured a lawsuit against the marine and offshore operator by Jones Act trade rivals Crowley Maritime and Overseas Shipholding Group. The Shipbuilders’ Council of America was also a plaintiff.

The US Coast Guard, the US Department of Homeland Security, and the National Vessel Documentation Centre were defendants in the case.

Under the law, a Jones Act ship must also not be rebuilt outside the US. The USCG, in assessing the Seacor vessels’ eligibility, relied on a technical aspect covering the percentage of steel weight attributable to the Chinese work and found that the retrofitting did not add a “major component”.

Congressman Taylor’s proposed amendment to the Jones Act seeks to plug this “major component” loophole. If passed, it would effectively make conversions such as Seacor’s ineligible for the Jones Act.

Mississippi, along the US Gulf Coast, is among the major shipbuilding states of the US and any loss of conversion work to foreign yards is construed as a loss of business for the state. According to state statistics, some 15,000 workers are directly employed in the shipbuilding sector.