In 2009, after a long fought battle by a coalition of recreational boating trade groups, the Longshore and Harbor Workers’ Compensation Act was successfully amended by the American Recovery and Reinvestment Act of 2009 to exclude certain additional recreational vessel yard workers from the federal law’s definition of “employee” as it related to repair and dismantling of recreational vessels. For the past couple of years, the Department of Labor has been writing the federal regulation to the law, which is of great interest to businesses that employ workers who build, repair, or dismantle recreational vessels. The boating industry was very concerned that the Longshore issue would require duplication of insurance coverage increasing the overhead costs and making repairs in certain areas uncompetitive to boat yards in nearby countries.

On December 30, 2011, the Department of Labor published its final rule to implement the law. The final rule includes nearly all the changes requested by the coalition of recreational boating groups working on the issue. The preamble provides guidance that will directly result in many boat manufacturers and repair facilities to be able to revisit whether their operations need a Longshore rider on their Workers’ Compensation policy.

The following are highlights of the Department of Labor final rule.

1. Clear guidance is provided that if a boat manufacturer or repair facility is landlocked (not adjacent to navigable body of water), there is no need for LHWCA coverage.
2. For manufacturing facilities adjacent to a navigable water, the exemption for the under 65 foot exemption continues to apply for boats intended for the recreational market.
3. Work on vessels owned by police, government, and municipalities are excluded. This exemption frees up facilities to do work on these vessels without triggering the LHWCA coverage.
4. The 65-foot exemption limitation is lifted for facilities that repair recreational vessels adjacent to or on navigable waters. However, these facilities will have to look at the current use of the vessel to apply the exemption.

One of the keys to the re-write of the rule, is the definition of “recreational vessel.” The rule incorporated the Coast Guard’s standards for categorizing vessels. The final rule also contains two key provisions designed to make the definition easier to apply. The final rule provides that manufacturers and builders may determine whether a vessel is recreational by the nature of the vessel’s design rather that the end use of the vessel, and rule includes within the definition of recreational vessels non-military vessels that are recreational by design and owned or chartered by federal, state, or municipal governments.

The following will link you to a newsletter from the American Recreation Coalition. You will note that the newsletter says the Speaker has pulled H.R. 7, the Highway Bill, from the House floor because the President has threatened a veto.

February 2012 ARC Newsletter

Larry Innis
MRAA Legislative Affairs

I attended a briefing this afternoon on the upcoming case the Supreme Court will hold, which may repeal parts of the Affordable Care Act.
 
Many small businesses and marine retailers are very concerned about the cost (affordability) of the Affordable Care Act (commonly known as Obamacare). From March 26 to 28, 2012, the U.S. Supreme Court will hear arguments in the challenge to the constitutionality of the Affordable Care Act. The arguments are scheduled for 5.5 hours over the three days, which is the longest time given to hear arguments in well over 100 years. It is expected these three days of argument will attract substantial media attention. However, very little has been reported on the case so far. As such, I want to present this brief of what is happening and what can be expected over the next couple of months.
 
As a reminder, the case is Florida, et al v. Department of Health and Human Services, et al. The case was brought by the attorneys general of 26 states and the National Federation of Independent Businesses. Since the Affordable Care Act was enacted in March 2010, dozens of legal cases have been filed against the law. Most cases have been dismissed on procedural grounds.

Of the small number of cases that have gotten past procedural hurdles, four cases have reached the Courts of Appeals. Of those cases, three courts have rejected challenges to the law (the Sixth Circuit and the DC Circuit upheld the law entirely, and the Fourth Circuit found the challenge to be premature under the Anti-Injunction Act). In the Eleventh Circuit, in a case brought by the attorneys general of 26 states and the National Federation of Independent Businesses, the court found the individual responsibility provision to be unconstitutional.  However, the court left the rest of the law in place and specifically found the Medicaid expansion to be constitutional.

The federal government has appealed the decision striking down the individual responsibility provision. The 26 states and the NFIB have appealed the parts of the decision that left the law in place. Neither party is arguing the case against the individual responsibility provision is premature; however, the Supreme Court has decided on its own to consider that question.
 
The Court has divided the case into four separate questions:

• Is the challenge to the individual responsibility provision premature under the Anti-Injunction Act, which prohibits challenging a tax prior to that tax being imposed?
• Is the individual responsibility provision constitutional?
• If the individual responsibility provision is unconstitutional, what other parts of the law, if any, must also be struck down?
• Is the Affordable Care Act’s expansion of Medicaid constitutional?

The Court could issue a ruling at any time after the conclusion of the March 26-28 hearing, but it is most likely to be sometime at the end of its term in late June.
 
It is impossible for me to predict the Supreme Court’s decision, but the Court is 5 to 4 on the conservative side and is generally predisposed to rule against precedent. Repeal of the Affordable Care Act has far reaching consequences affecting many long time precedents. This case truly is a once-in-a-generation event.
 
We will continue to watch this case closely and keep you up to date.

Larry Innis
MRAA Legislative Affairs