Rep Cmte Small Business

Contact: DJ Jordan, Joel Hannahs 202-225-5821

Subcommittee Examines Regulations Affecting Marine Industry Small Businesses

Washington, July 12, 2012 -

The Small Business Subcommittee on Investigations, Oversight and Regulations today held a hearing to examine federal policy and regulatory impediments for small businesses in the marine industry. The wide-ranging discussion focused on the effects of regulatory actions by the Department of Labor, the planning and permitting processes for the maintenance of navigable waterways at the United States Army Corps of Engineers, and boating-related intra-state taxation of small businesses.

“Because many of these companies have a major impact on the economic well-being of their coastal regions, it is important for Washington to carefully evaluate the regulations and tax policies in this industry,” said Subcommittee Chairman Mike Coffman (R-CO). “In addition, an aging system of locks, dams, and undredged channels threatens the continued viability of many waterways as reliable shipping avenues, and we must judiciously devote adequate resources to keeping them in good shape for interstate commerce.”  

Rep. Allen West (R-FL) said, “Boating has an estimated annual economic impact of $72 billion, much of it benefiting small businesses that work in boat repair, recreation, and transportation. The maritime industry in Florida alone is responsible for the creation of more than 200,000 jobs and represents an $18 billion dollar industry. These numbers are only a portion of the large impact that this industry has on our state, and nation overall. As we struggle with our lagging economy, this administration must re-evaluate the abundance of regulations coming from Washington, DC, because they are making it harder for small businesses to grow and hire. This hearing provided a valuable format to hear firsthand how important the maritime industry is to our nation and the problems that are preventing economic growth within it.”

Materials for the hearing are posted on the House Small Business Committee’s website

Notable Witness Quotes:

Mark Ducharme, Vice President and Chief Financial Officer of Monterey Boats in Williston, FL, said, “We understand state’s face the great temptation of raising tax revenues from those who do not vote in its’ elections or utilize state resources. We only engage in interstate commerce by providing products or services and do so without any physical presence in the state, but efforts to expand traditional definitions of “tax nexus” have become completely absurd.

“The time is right to end unfair business taxation and to make it clear that state taxation of out-of-state entities can only be done within certain well-defined limits. American businesses are not asking for a hand-out from the Congress, only a fair and level playing field, free from the unexpected tax surprises that I have described to you today.”

Kristina Hebert, Chief Operating Officer of Ward's Marine Electric, Inc. in Fort Lauderdale, FL, said, “…[the Department of Labor] has mandated a definition of recreational vessels that imposes unnecessary and cumbersome additional guidelines to determine how the exemption for recreational marine workers would apply. DOL incorporated a definition of “recreational vessel” used in the shipping laws and then needlessly superimposed a number of cross-referenced maritime statutes to further restrict the category. By incorporating a multitude of definitions not enacted by Congress for the LHWCA and apply them in a way that the exemption would be narrower, not more expansive, DOL created an exhausting and confusing list of vessels that would not be considered recreational vessels when undergoing repair work.”

Captain Steve Engemann, President of Herman Sand and Gravel in Herman, MO, said, “I can assure you that these regulations and federal policies have constricted my business and if left unchecked, will ultimately be the demise of my business and many others that serve the Missouri River and beyond.”