Federal regulations are 'sinking the marine industry'

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The president of the Marine Industries Association of South Florida will tell a congressional subcommittee on Thursday how a rule the Department of Labor issued is hurting the yacht repair industry.

MIASF president and small business operator Kristina Hebert will testify before the House Small Business Subcommittee on Investigations, Oversight and Regulations about making affordable workers’ compensation insurance available to the thousands of workers who repair pleasure boats.

The hearing is titled “Sinking the Marine Industry: How Regulations are Affecting Today’s Maritime Businesses.”

Hebert told me in an interview Tuesday that she will be addressing how a 2011 Labor Department rule misinterprets the industry’s exemption from the federal Longshore and Harbor Workers’ Compensation Act.

The chief operating officer of Ward’s Marine Electric in Fort Lauderdale, Hebert worked for about eight years to get Congress to give companies that repair and service large yachts a much needed insurance break by allowing them to cover their employees with much cheaper state workers’ compensation insurance rather than longshoremen’s coverage. The Longshore Act is the law that covers workers in shipyards that build everything from aircraft carriers to tankers.

Speaking for MIASF and the United States Superyacht Association, Hebert will tell the subcommittee Thursday that by ignoring the congressional intent behind changes made in 2009 to the Longshore Act, the Labor Department limited rather than expanded the exemption for the recreational marine repair industry.

“The new rule has instead created confusion in both the recreational marine repair industry and the insurance industry,” Hebert states in written testimony she intends to submit to the subcommittee. “The misapplication of the exemption brought thousands of workers under duplicative coverage or, even worse, left them without any coverage at all. For these reasons the rulemaking seriously missed the mark and will serve only to cost American jobs and drive economic activity offshore.”

In addition to looking at the regulatory actions of the Labor Department in terms of the Longshore Act, the hearing will examine the planning and permitting process of the Army Corps of Engineers regarding the dredging of navigable waterways and the intrastate taxation of small businesses. The issues will be viewed through the lens of small business job creation and economic growth.

Mark Ducharme, vice president and chief financial officer of Monterey Boats, will testify on behalf of the NMMA.

About 95 percent of MIASF members are small businesses, which more or less mirrors the broad U.S. recreational marine industry.

“An agency should not have the power to come in and exceed the legislative intent and put small businesses at risk,” Hebert told me. “Agencies need to be working with small businesses to provide incentives, rather than disincentives. … Boating is viewed by many as a hobby, but we are an industry. We are not subsidized by government. There are no bailouts. We just want to be able to operate competitively.”

Not every federal agency and department represents a hurdle. Hebert says the MIASF has good working relationships with the U.S. Customs and Border Protection agency, the State Department and the Coast Guard over the comings and goings of yachts into U.S. ports for repairs, service, provisioning and so forth.

“They’ve been great,” she says.


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