New looks at COGSA and cruise ships.

Two major pieces of proposed legislation will likely face lawmakers when they return for the first Congressional session of the new millennium.

Early in the session Senator Kay Bailey Hutchison (R.-Texas), Chairman of the Senate Surface Transportation and Merchant Marine Subcommittee,

* a change to COGSA's $500 cargo liability cap;

* better carrier accountability; and

* standing in U.S. courts for shippers seeking relief in cargo-damage disputes with shipping lines.

The second major bill, filed close to the end of this year's session by Senator John Breaux (D-La.) in the Senate and Representatives Jim McCrery (R-La.) and William J. Jefferson (D-La.) at the House, would substantially alter the status of cruise ships of 20,000 grt and greater. The proposed All American Cruise Act would:

* allow U.S. shipyards to defer taxes on construction or overhaul of a cruise ship until after delivery provided the newbuilding contract is at least 12 months in duration;

* provide parity for U.S. cruise ship operators with their foreign competitors by eliminating corporate income taxes for domestic firms operating cruise ships from U.S. ports;

* allow U.S. cruise operators to depreciate their vessels over a five-year, rather than the existing 10-year, depreciation period;

* repeal the $2,500 business tax-deduction limit for a convention on a cruise ship, putting such gatherings on a par with the tax status of landside conventions;

* provide a 20% tax credit for fuel operating costs associated with U.S.-manufactured, clean-burning engines;

* expand the allowable use of Capital Construction Funds (CCF), now limited to non-contiguous trades, to also embrace domestic point-to-point trades and cruises-to-nowhere. This provision would apply only to U.S.-built vessels and those re-flagged to the U.S. as so-called "interim vessels." CCF withdrawals could also be used for lease payments on U.S. cruise ship newbuildings.

* Allow a foreign-built ship to be brought into the U.S. trades provided the owner or buyer had first entered into a binding contract to build at least two cruise ships of equal or greater size at a domestic shipyard, for delivery within four and five years, respectively.

Several of these provisions will seem familiar as they have been the subject of legislation in previous years, but were either not brought up for final committee vote or failed to pass muster at the House or Senate.