Officials on Puerto Rico’s oversight board encouraged Congress on Tuesday to change or repeal the Jones Act, the century-old shipping law designed to protect U.S. maritime interests and shipbuilders.
“Any measures that Congress takes to ensure the cost of shipping fuels to Puerto Rico is reduced is a positive step towards rebuilding the economy,” said Noel Zamot, a revitalization coordinator for Puerto Rico’s financial oversight board who was recently appointed emergency manager of the island’s bankrupt power utility.
Zamot, testifying before the House Natural Resources Committee, was responding to questions from some Republicans on the panel who said the Jones Act had exacerbated fuel shortages in Puerto Rico after Hurricane Maria.
“The Jones Act is a problem for Puerto Rico and I would like to find a solution,” said Rep. Doug Lamborn, R-Colo. “Congress should look at that. Everyone won't be happy, but if we want to see Puerto Rico succeed and thrive, those are the kinds of hard decisions we have to be willing to make.”
Puerto Rico's federal oversight board was created by Congress under the Obama administration to oversee the restructuring process of the island's $73 billion debt load.
“I support your effort to relook at the Jones Act,” said Natalie Jaresko, the executive director of the financial oversight board. “It is an additional cost for the island.”
Enacted in 1920, the Jones Act prohibits tankers from hauling oil between U.S. ports unless those vessels are American-made, flagged and manned by a crew that is 75 percent U.S. citizens.
The Trump administration temporarily waived the shipping law on Sept. 28 to fulfill fuel needs on the island in response to Maria. Waiving the law allowed any ship to help get supplies to the island.
The Trump administration was initially hesitant to grant the 10-day waiver to Puerto Rico, as it did for Texas and Florida after Hurricanes Harvey and Irma. It justified its reluctance by saying U.S. vessels were able to adequately serve the island.
But it acted after a request from Puerto Rico Gov. Ricardo Rossello and pressure from lawmakers, including Sen. John McCain, R-Ariz.
Experts say the law blocking foreign-flagged vessels imposes higher shipping costs on Puerto Rico than on other islands. The nearby U.S. Virgin Islands have been exempt from the Jones Act since its inception.
The recent attention to the Jones Act has prompted lawmakers to call for the repealing the law or making changes to it. McCain and Sen. Mike Lee, R-Utah, introduced legislation in September to permanently exempt Puerto Rico from the Jones Act.
Any changes to the law would be challenged by the powerful U.S. shipping industry, which lobbied against the waiver.
Indeed, at least two lawmakers at Tuesday’s hearing said the Jones Act does not present a problem for Puerto Rico.
“I am not sure I believe the Jones Act is really a problem,” said Rep. Alan Lowenthal, D-Calif. “Before the hurricanes, was there a concern about the Jones Act? The issue was getting the goods from the ports out to the communities.”
Rep. Garret Graves, R-La., said Congress should focus on other areas to more directly help Puerto Rico’s recovery. He said only one vessel took advantage of the waiver.
“This has been fascinating listening to people talk about the Jones Act,” Graves said. “This entire thing is a farce. We can continue to sit here and makeup solutions in search of problems or focus on real solutions that are needed.”