Passenger Ship Act of 1986 - Directs the Secretary of the department in which the Coast Guard is operating, from the date of enactment of this Act to August 31, 1988, to monitor efforts to construct passenger vessels in the United States, or to refurbish under U.S. law passenger vessels built in the United States. Requires passenger vessels so monitored to have accommodations for at least 600 passengers. Requires the Secretary, during the above period, to publish notice in the Federal Register within 30 days after the substantially complete construction or refurbishment of a vessel that was not operating on the date of enactment of this Act as a documented passenger vessel of the United States entitled to engage in the coastwise trade.
Directs the Secretary, notwithstanding certain specified Federal law, to document certain vessels, not otherwise qualified, to be entitled to engage in coastwise trade if two U.S. built or refurbished vessels are not substantially completed by September 1, 1988, and under specified other conditions. Outlines application requirements for vessels deriving such documentation. Provides for an application fee. Directs the Secretary, within 18 months after the enactment of this Act to determine those vessels meeting the requirements for such documentation, and to notify the applicant that the vessel is so qualified. Allows such documented vessels to advertise for service in the coastwise trade and be issued a license for such trade between August 31, 1988, and September 1, 1990.
Prohibits the owner of a vessel documented under this Act from offering substantially similar service to the service offered on the date of enactment of this Act by the owner or operator of a passenger vessel constructed in the United States, unless the latter vessel terminates such service. Prohibits such competition with service offered or advertised after September 1, 1988, by an owner of a coastwise passenger vessel constructed in the United States, if certain conditions occur. Outlines procedures for the determination of the presence of substantially similar service.