The proposal to reinterpret the Passenger Vessel Services Act was dealt a major setback last week, when the White House Office of Management and Budget said the proposal "presents no compelling public need."
The proposed rulemaking would require all foreign-flag ships to spend 50% more time in foreign ports.
Last Wednesday, the OMB returned the proposed rulemaking on Hawaiian Coastwise voyages to the Department of Homeland Security for reconsideration, along with a letter saying that it did not meet several of the basic requirements which require federal agencies to "promulgate only such regulations that are required by law, or compelling public need."
NCL Corp., whose struggles with its U.S.-flag Hawaii operations were the catalyst behind the proposal, said in a statement that it was "disappointed by this additional delay in implementing regulations on this important issue, but hopes [Customs and Border Protection] will address the procedural concerns identified by OMB and will re-submit the compromise rule."
NCL also added in its statement that Hawaii's Department of Business, Economic Development and Tourism had determined that the Pride of America, the only ship remaining in its once three-strong U.S.-flag Hawaii fleet, "provides significant economic benefits" to the islands.
The Pride of America provides more than 4,600 jobs, $496 million in total economic impact and $142 million in total earnings impact, "which is almost 3.3 times more than the economic impact attributable to the entire foreign-flag fleet that calls on Hawaii", NCL said.
NCL noted that the current proposal is a "reasonable compromise that is limited to Hawaii and that imposes no minimum stay in any foreign port. The rule permits foreign-flag cruise ships to offer bona fide international voyages built around Hawaii port calls from any port in the U.S., while making clear that only U.S. flag cruise ships are permitted to offer truly domestic Hawaii itineraries."
The Cruise Lines International Association, meanwhile, commended the OMB's decision.
"The industry applauds the administration for taking a serious look at this issue and for reaching an interim decision balancing all interests in the matter," CLIA said in a statement. "We look forward to working with the administration as it continues to evaluate the needs of commerce."