[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2151 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 2151
To amend the Merchant Marine Act, 1936, to establish the Maritime
Security Fleet program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 19, 1993
Mr. Studds (for himself, Mr. Lipinski, Mr. Fields of Texas, Mr.
Bateman, Mr. Young of Alaska, Mr. Hughes, Mr. Hutto, Mr. Tauzin, Mr.
Ortiz, Mr. Manton, Mr. Pickett, Mrs. Unsoeld, Mr. Reed, Mr. Lancaster,
Mr. Andrews of Maine, Ms. Furse, Ms. Schenk, Mr. Gene Green of Texas,
Mr. Hastings, Mr. Barlow, Mr. Thompson of Mississippi, Mr. Ackerman,
Mr. King, and Mrs. Bentley) introduced the following bill; which was
referred to the Committee on Merchant Marine and Fisheries
_______________________________________________________________________
A BILL
To amend the Merchant Marine Act, 1936, to establish the Maritime
Security Fleet program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Maritime Security and
Competitiveness Act of 1993''.
SEC. 2. PURPOSE OF THE MERCHANT MARINE ACT, 1936.
Section 101 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1101)
is amended to read as follows:
``SEC. 101. FOSTERING DEVELOPMENT AND MAINTENANCE OF MERCHANT MARINE.
``The Secretary of Transportation shall carry out this Act in a
manner that ensures the existence of an operating fleet of United
States documented vessels that is--
``(1) sufficient to carry the domestic water-borne commerce
of the United States and a substantial portion of the water-
borne export and import foreign commerce of the United States
and to provide shipping service essential for maintaining the
flow of such domestic and foreign water-borne commerce at all
times;
``(2) adequate to serve as a naval auxiliary in time of war
or national emergency;
``(3) owned and operated by citizens of the United States,
to the extent practicable;
``(4) composed of the best-equipped, safest, and most
modern vessels;
``(5) manned with the best trained and efficient personnel
who are citizens of the United States; and
``(6) supplemented by modern and efficient United States
facilities for shipbuilding and ship repair.''.
SEC. 3. MARITIME SECURITY FLEET PROGRAM.
(a) Establishment of Program.--The Merchant Marine Act, 1936 (46
App. U.S.C. 1101 et seq.) is amended by inserting after title III the
following new title:
``TITLE IV--MARITIME SECURITY FLEET PROGRAM
``SEC. 401. ESTABLISHMENT OF MARITIME SECURITY FLEET.
``The Secretary of Transportation shall establish a fleet of active
commercial vessels to enhance sealift capabilities and maintain a
presence in international commercial shipping of United States
documented vessels. The fleet shall be known as the `Maritime Security
Fleet'.
``SEC. 402. COMPOSITION OF FLEET.
``The Fleet shall consist of privately owned United States
documented vessels for which there are in effect operating agreements.
``SEC. 403. VESSELS ELIGIBLE FOR ENROLLMENT IN FLEET.
``(a) In General.--A vessel is eligible to be enrolled in the Fleet
if the Secretary decides, in accordance with this section, that it is
eligible. The Secretary may decide whether a vessel is eligible to be
enrolled in the Fleet only pursuant to an eligibility decision
application submitted to the Secretary by the owner or operator of the
vessel. The Secretary shall make such a decision by not later than 90
days after the date of submittal of an eligibility decision application
for the vessel by the owner or operator of the vessel.
``(b) Vessel Eligibility and Listing.--The Secretary shall decide
that a vessel is eligible to be enrolled in the Fleet if--
``(1) the person that will be the contractor with respect
to an operating agreement for the vessel agrees to enter into
an operating agreement with the Secretary for the vessel under
section 404;
``(2) the vessel is not built in a foreign subsidized
shipyard under a contract entered into on or after May 19,
1993;
``(3) the person that will be a contractor with respect to
an operating agreement for the vessel is a citizen of the
United States;
``(4)(A) the vessel is a United States documented vessel on
May 19, 1993;
``(B) the vessel is--
``(i) a United States documented vessel after May
19, 1993; and
``(ii) not more than 10 years of age on the date of
that documentation; or
``(C) if the vessel is not in existence on that date--
``(i) the person that will be the contractor with
respect to an operating agreement for the vessel has
entered into a binding contract with a shipyard for the
delivery of a vessel that the Secretary decides will
otherwise be eligible under this subsection; and
``(ii) an operating agreement for the vessel is
entered into by not later than 30 months after the date
of submittal of the application; and
``(5) the vessel is self-propelled and is--
``(A) a container vessel with a capacity of at
least 750 Twenty-foot Equivalent Units;
``(B) a roll-on/roll-off vessel with a carrying
capacity of at least 10,000 square feet or 500 Twenty-
foot Equivalent Units;
``(C) a LASH vessel with a barge capacity of at
least 75 barges;
``(D) a vessel subject to a contract under title VI
on May 19, 1993; or
``(E) any other type of vessel that is suitable for
use by the United States for national defense or
military purposes in time of war or national emergency.
``(c) Notice of Noneligibility Decision.--
``(1) Determination.--The Secretary shall make
determinations under subsection (b) for each vessel for which
an eligibility decision application is submitted under this
section.
``(2) Written explanation.--The Secretary shall provide to
the person that submits an eligibility application for a vessel
a written explanation of any decision that the vessel is not
eligible for enrollment in the Fleet.
``(d) List of Eligible Vessels.--
``(1) In general.--The Secretary shall maintain a list of
vessels that the Secretary decides in accordance with this
section are eligible to be enrolled in the Fleet.
``(2) Removal of vessels from list.--The Secretary shall
remove a vessel from the list maintained under this subsection,
and the vessel shall not be an eligible vessel for purposes of
this title--
``(A) at any time that the conditions for
eligibility under subsection (b) are not fulfilled for
the vessel; or
``(B) if the status of the person who submitted an
eligibility decision application for the vessel, as
owner or operator of the vessel, changes and after that
change--
``(i) the owner or operator of the vessel
fails to submit a new eligibility decision
application for the vessel; or
``(ii) such an application is not approved
by the Secretary.
``SEC. 404. OPERATING AGREEMENTS, GENERALLY.
``(a) Requirement for Enrollment of Vessels.--A vessel may be
enrolled in the Fleet only if it is an eligible vessel for which the
owner or operator of the vessel applies for and enters into an
operating agreement with the Secretary under this section.
``(b) Priority for Awarding Agreements.--The Secretary shall enter
into operating agreements according to the following priority:
``(1) Vessels under ods contracts.--For operating
agreements that are effective before September 30, 2000, any
vessel that is or will be owned or operated by a person that--
``(A) is a party to an operating-differential
subsidy contract entered into under title VI; and
``(B) is or will be operating that vessel under
that contract;
if the authority to operate the vessel under the contract is
terminated under an agreement with the Secretary.
``(2) Other vessels owned by citizens.--To the extent that
amounts are available after applying paragraph (1), any vessel
that is--
``(A) owned and operated by a person that is a
citizen of the United States under section 2 of the
Shipping Act, 1916; and
``(B) on the list maintained under section 403(d).
``(3) Other vessels.--To the extent that amounts are
available after applying paragraphs (1) and (2), any vessel
that is--
``(A) owned and operated by a person that is
eligible to document a vessel under chapter 121 of
title 46, United States Code; and
``(B) on the list maintained under section 403(d).
``(c) Prohibition on Entering Agreements.--The Secretary may not
enter into an operating agreement for a fiscal year only to the extent
that annual appropriations laws place a limit on the total amount of
operating agreements that the Secretary may enter into and obligate
during that fiscal year.
``(d) Prohibition on Vessel Coverage.--A vessel may not be covered
by an operating agreement if the vessel is covered by an operation-
differential subsidy contract under title VI.
``(e) Time Limit for Decision on Entering Operating Agreement.--To
the extent that the Secretary is not restricted from entering into
contracts under subsection (c), the Secretary shall enter an operating
agreement for a vessel within 90 days after making the decision that
the vessel is eligible to be enrolled in the Fleet under section
403(a).
``(f) Effective Date of Operating Agreement.--Except as provided in
section 3(b) of the Maritime Security and Competitiveness Act of 1993,
the effective date of an operating agreement may not be later than the
later of--
``(1) 30 days after the date the agreement is entered; or
``(2) the date the vessel covered by the agreement enters
into the trade required under section 405(a)(1)(A).
``(g) Expiration of Offers for Agreements.--Unless extended by the
Secretary, an offer by the Secretary to enter into an operating
agreement under this section expires 120 days after the date of the
offer.
``(h) Length of Agreements.--An operating agreement is effective
for 10 years from the effective date of the agreement.
``(i) Termination of Agreement for Failure To Place Vessel.--An
operating agreement entered into by the Secretary pursuant to
subsection (b)(1), and the rights under that agreement, are terminated
at the end of the 90-day period beginning on the date the agreement is
entered into unless a vessel from the list maintained under section
403(d) is covered by the agreement before the end of that period.
``(j) Repayment Requirements.--
``(1) Noncompliance.--A contractor that fails to comply
with the terms of an operating agreement shall be liable to the
United States Government for all amounts received by the
contractor as payments for the vessel under this title with
respect to the period of that noncompliance.
``(2) Failure to operate replacement vessel.--A contractor
under an operating agreement that covers a vessel that is 25 or
more years of age and that fails to replace the vessel as
provided in section 405(a)(3) (A) or (B) shall be liable to the
United States Government for all amounts received by the
contractor as payments for the vessel under this title with
respect to periods after the date the vessel becomes 25 years
of age.
``(k) Binding Obligation of Government.--An operating agreement
constitutes a contractual obligation of the United States Government to
pay the amounts provided for under that agreement.
``SEC. 405. TERMS OF OPERATING AGREEMENTS.
``(a) Operating Agreement Requirements.--An operating agreement
shall, during the effective period of the agreement, provide the
following:
``(1) Operation and documentation.--The vessel covered by
the operating agreement--
``(A) shall be operated in the foreign trade or
domestic trade allowed under a registry endorsement for
the vessel issued under section 12105 of title 46,
United States Code;
``(B) may not be operated in the coastwise trade of
the United States or in mixed coastwise and foreign
trade, except for coastwise trade allowed under a
registry endorsement issued for the vessel under
section 12105 of title 46, United States Code; and
``(C) shall be documented under chapter 121 of
title 46, United States Code.
``(2) Annual payments.--The Secretary shall pay the
contractor, in accordance with this subsection, the following
amounts for each fiscal year in which the vessel is operated in
accordance with the agreement:
``(A) For fiscal year 1996, $2,300,000.
``(B) For each fiscal year after fiscal year 1996,
$2,100,000.
``(3) Termination based on age of vessel.--The operating
agreement shall terminate on the date the vessel covered by the
agreement is 25 years of age, unless--
``(A) the contractor agrees to acquire a
replacement for the vessel from among vessels on the
list maintained under section 403(d); and
``(B)(i) in the case of a vessel to be replaced
with a new vessel, the contractor enters into a binding
contract with a shipyard for the delivery, by not later
than 30 months after the later of the date the
operating agreement is entered into or the date the
vessel subject to the operating agreement is 25 years
of age, of the replacement vessel; or
``(ii) in the case of a vessel to be replaced with
an existing vessel, the contractor acquires the
replacement vessel from among vessels on the list
maintained under section 403(d), by not later than 12
months after the later of the date the operating
agreement is entered into or the date the vessel
subject to the operating agreement is 25 years of age.
``(4) Availability of vessel.--
``(A) In general.--On a request of the President
during time of war or national emergency or when
considered by the President, acting through the
Secretary in consultation with the Secretary of
Defense, to be necessary in the interest of national
security, and subject to subparagraph (B), the
contractor as soon as practicable shall, as specified
by the Secretary--
``(i) make the vessel covered by the
agreement available to the Secretary under a
time charter; or
``(ii) provide space on the vessel covered
by the agreement to the Secretary on a
guaranteed basis.
``(B) Condition for charter.--The Secretary shall
allow a contractor to comply with this paragraph by
providing space on a vessel under subparagraph (A)(ii)
unless the Secretary determines that it is necessary in
the interest of national security that the contractor
make the vessel available under a time charter.
``(5) Delivery of vessel.--The contractor shall deliver a
vessel to the Secretary pursuant to a time charter under
paragraph (4)(A)(i), as specified in the request for the
vessel--
``(A) at the first port in the United States the
vessel is scheduled to call after the date of receipt
of the request;
``(B) at the port in the United States to which the
vessel is nearest on the date of receipt of the
request; or
``(C) in any other reasonable manner authorized by
the agreement and specified in the request.
``(6) Delivery costs.--The Secretary shall reimburse the
contractor for costs incurred by the contractor in delivering
the vessel covered by the agreement to the Secretary in
accordance with the agreement.
``(7) Compensation.--The Secretary shall pay the
contractor, as provided in the operating agreement, reasonable
compensation at reasonable commercial rates for the period of
time the vessel is chartered or the contractor provides space
on the vessel under paragraph (4).
``(8) Required operation.--
``(A) In general.--A vessel covered by the
operating agreement shall be operated in the trade
required under paragraph (1) for at least 320 days in a
fiscal year, including days during which the vessel is
dry-docked, surveyed, inspected, or repaired.
``(B) Reduction in payments.--If a vessel operates
in the trade required under paragraph (1) for less than
the time required under subparagraph (A), the payments
required under paragraph (2) shall be reduced on a pro-
rata basis to reflect the lesser time in that
operation.
``(9) Substitution of vessels authorized.--The contractor
may substitute for the vessel covered by the agreement another
vessel on the list maintained under section 403(d).
``(10) Termination for failure to operate or substitute.--
The operating agreement is terminated if--
``(A) the vessel covered by the agreement is not
operated under an operating agreement for one year; and
``(B) a substitute for that vessel is not operated
under the agreement during that year.
``(b) Payments.--
``(1) In general.--The amount required to be paid by the
Secretary each year to a contractor under an operating
agreement pursuant to subsection (a)(2)--
``(A) shall be paid at a pro rated amount at the
beginning of each month in equal installments; and
``(B) except as provided in paragraph (2), may not
be reduced by reason of operation of the vessel covered
by the agreement to carry civilian or military
preference cargoes under--
``(i) section 901(a), 901(b), or 901b;
``(ii) section 2631 of title 10, United
States Code; or
``(iii) the Act of March 26, 1934 (48 Stat.
500).
``(2) Reduction for preference cargo.--A contractor with
respect to a vessel may not receive any payment under this
title for any day in which the vessel is engaged in
transporting more than 5,000 tons of preference cargo described
in paragraph (1)(B) that is bulk cargo (as defined in section 3
of the Shipping Act of 1984).
``(c) Redelivery of Vessels.--The Secretary shall, upon the
termination of the need for which a vessel is delivered under an
operating agreement, return the vessel to the contractor--
``(1) at a place that is mutually agreed upon by the
Secretary of Defense and the contractor; and
``(2) in the condition in which it was delivered to the
Secretary, excluding normal wear and tear.
``(d) Transfer of Operating Agreements.--A contractor under an
operating agreement may transfer the agreement (including all rights
under the agreement) to any other person that is a citizen of the
United States, after notification of the Secretary in accordance with
regulations prescribed by the Secretary. A person to whom an agreement
is transferred may receive payments from the Secretary under the
agreement only if the vessel to be covered by the agreement after the
transfer is on the list maintained under section 403(d).
``SEC. 406. NONCONTIGUOUS TRADE RESTRICTIONS.
``(a) Prohibition.--
``(1) In general.--Except as provided in this section, a
contractor may not receive any payment under this title if--
``(A) the contractor or a related party with
respect to the contractor, directly or indirectly owns,
charters, or operates a vessel engaged in the
transportation of cargo in noncontiguous trade, other
than in accordance with a waiver under subsection (b)
or (c); or
``(B) for noncontiguous trade for which there is a
waiver under subsection (b) or (c), there is a--
``(i) material change in the domestic ports
served from the ports permitted to be served
under the waiver;
``(ii) material increase in the annual
number or the frequency of sailings from the
number or frequency permitted under the waiver;
or
``(iii) material increase in the annual
volume of cargo carried or annual capacity
utilized from the annual volume of cargo or
annual capacity permitted under the waiver.
``(2) Limitations on prohibition.--Paragraph (1) applies to
a contractor only in the years specified for payments under the
operating agreement entered into by the contractor.
``(b) General Waiver Authority.--
``(1) In general.--Except as provided in subsection (c),
the Secretary shall waive, in writing, the application of
subsection (a) to a contractor pursuant to an application
submitted in accordance with this subsection, unless the
Secretary finds that--
``(A) the waiver would result in unfair competition
to any person that operates vessels as a carrier of
cargo in a service exclusively in the noncontiguous
trade for which the waiver is applied;
``(B) existing service in that noncontiguous trade
is adequate; or
``(C) the waiver will result in prejudice to the
objects or policy of this title or Act.
``(2) Terms of waiver.--Any waiver granted by the Secretary
under this subsection shall state--
``(A) the domestic ports permitted to be served;
``(B) the annual number or frequency of sailings
that may be provided; and
``(C)(i) the annual volume of cargo permitted,
``(ii) for containerized or trailer service, the
annual 40-foot equivalent unit shipboard container and
trailer or vehicle or general cargo capacity permitted,
or
``(iii) for tug and barge service, the annual barge
house cubic foot capacity and the annual barge deck
general cargo capacity, or 40-foot equivalent unit
container, trailer, or vehicle capacity, permitted.
``(3) Applications for waivers.--An application for a
waiver under this subsection may be submitted by a contractor
and shall describe, as applicable, the nature and scope of--
``(A) the service proposed to be conducted in a
noncontiguous trade under the waiver; or
``(B) any proposed material change or increase in a
service in a noncontiguous trade permitted under an
existing waiver.
``(4) Action on application and hearing.--
``(A) Notice and proceeding.--Within 30 days after
receipt of an application for a waiver under this
subsection, the Secretary shall--
``(i) publish a notice of the application;
and
``(ii) begin a proceeding on the
application under section 554 of title 5,
United States Code, to receive--
``(I) evidence of the nature,
quantity, and quality of the existing
service in the noncontiguous trade for
which the waiver is applied;
``(II) a description of the
proposed service or proposed material
change or increase in a previously
permitted service;
``(III) the projected effect of the
proposed service or proposed material
change or increase in existing service;
and
``(IV) recommendations on
conditions that should be contained in
any waiver for the proposed service or
material change or increase.
``(B) Intervention.--An applicant for a waiver
under this subsection, and any person that operates
cargo vessels in the noncontiguous trade for which a
waiver is applied and that has any interest in the
application, may intervene in the proceedings on the
application.
``(C) Hearing.--Before deciding whether to grant a
waiver under this subsection, the Secretary shall hold
a public hearing in an expeditious manner, reasonable
notice of which shall be published.
``(5) Decision.--The Secretary shall complete all
proceedings and hearings on an application under this
subsection and issue a decision on the record within 90 days
after receipt of the final briefs submitted for the record.
``(c) Existing Noncontiguous Trade Operators.--
``(1) In general.--The Secretary shall waive the
application of subsection (a) to a contractor pursuant to an
application submitted in accordance with this subsection if the
Secretary finds that the contractor, or a related party or
predecessor in interest with respect to the contractor--
``(A) engaged in bona fide operation of a vessel as
a carrier of cargo by water--
``(i) in a noncontiguous trade on July 1,
1992; or
``(ii) in furnishing seasonal service in a
season ordinarily covered by its operation,
during the 12 calendar months preceding July 1,
1992; and
``(B) has operated in that service since that time,
except for interruptions of service resulting from
Operation Desert Storm or over which the contractor (or
related party or predecessor in interest) had no
control.
``(2) Terms of waiver.--
``(A) In general.--Except as otherwise provided in
this paragraph, the level of service permitted under a
waiver under this subsection shall be the level of
service provided by the applicant (or related party or
predecessor in interest) in the relevant noncontiguous
trade during, for year-round service, the 6 calendar
months preceding July 1, 1992, or for seasonal service,
the 12 calendar months preceding July 1, 1992,
determined by--
``(i) the domestic ports called;
``(ii) the number of sailings actually
made, except as to interruptions in the service
in the noncontiguous trade resulting from
Operation Desert Storm or over which the
applicant (or related party or predecessor in
interest) had no control; and
``(iii) the volume of cargo carried or, for
containerized or trailer service, the 40-foot
equivalent unit shipboard container, trailer,
or vehicle or general cargo capacity employed,
or, for tug and barge service, the barge house
cubic foot capacity and barge deck general
cargo capacity or 40-foot equivalent unit
container, trailer, or vehicle capacity,
employed.
``(B) Certain containerized vessels.--If an
applicant under this subsection was offering service as
an operator of containerized vessels in noncontiguous
trades with Hawaii, Puerto Rico, and Alaska on July 1,
1992, a waiver under this subsection shall permit the
applicant to conduct--
``(i) 104 sailings each year from the West
Coast of the United States to Hawaii with an
annual capacity allocated to the service of 75
percent of the total capacity of the vessels
employed in the service on July 1, 1992;
``(ii) 156 sailings each year in each
direction between the East Coast or Gulf Coast
of the United States and Puerto Rico with an
annual capacity allocated to the service of 75
percent of the total capacity of its vessels
employed in the service on July 1, 1992; and
``(iii) 103 sailings each year in each
direction between Washington and Alaska with an
annual capacity allocated to the service in
each direction of 100 percent of the total
capacity of its vessels employed in the service
on July 1, 1992.
``(C) Certain tugs and barges.--If an applicant
under this subsection was offering service as an
operator of tugs and barges in noncontiguous trades
with Hawaii, Puerto Rico, and Alaska on July 1, 1992, a
waiver under this subsection shall permit the applicant
to conduct--
``(i) 17 sailings each year in each
direction between ports in Washington, Oregon,
and Northern California and ports in Hawaii
with an annual barge house cubic foot capacity
and annual barge deck 40-foot equivalent unit
container capacity in each direction of 100
percent of the total of the capacity of its
vessels employed in the service during the 6
calendar months preceding July 1, 1992,
annualized;
``(ii) 253 sailings each year in each
direction between the East Coast or Gulf Coast
of the United States and Puerto Rico with an
annual 40-foot equivalent unit container or
trailer capacity equal to 100 percent of the
capacity of its barges employed in the service
on July 1, 1992;
``(iii) 37 regularly scheduled tandem tow
rail barge sailings and 10 additional single
tow sailings each year in each direction
between Washington and the Alaskan port range
between and including Anchorage and Whittier
with an annual capacity allocated to the
service in each direction of 100 percent of the
total rail car capacity of its vessels employed
in the service on July 1, 1992;
``(iv) 8 regularly scheduled single tow
sailings each year in each direction between
Washington and points in Alaska (not including
the port range between and including Anchorage
and Whittier, except occasional deviations to
discharge incidental quantities of cargo) with
an annual capacity allocated to the service in
each direction of 100 percent of the total
capacity of its vessels employed in the service
on July 1, 1992; and
``(v) unscheduled, contract carrier tug and
barge service between points in Alaska not
served by the common carrier service permitted
under clause (iii) or (iv) and points in
Washington, with an annual capacity allocated
to that service not exceeding 100 percent of
the highest total capacity of the equipment
that was employed in that service in any year
after 1979.
``(D) Annualization.--Capacity otherwise required
by this paragraph to be permitted under a waiver under
this subsection shall be annualized if not a seasonal
service.
``(E) Adjustments.--
``(i) In general.--The annual capacity
permitted under a waiver under this subsection
shall be adjusted for each calendar year to
reflect changes in the total volume of trade on
the noncontiguous trade route for which the
waiver is issued. Such an adjustment may not be
considered to be a material change or increase
in service under the waiver for purposes
subsection (b)(3)(B).
``(ii) Limitation.--An increase in capacity
under this subparagraph shall apply only to the
extent the contractor actually uses the
increased capacity to carry cargo in the
permitted service in the calendar year
immediately following the preceding increase in
gross product. However, if a contractor
operating exclusively containerized vessels in
that trade on July 1, 1992, carries an average
load factor of at least 90 percent of permitted
capacity (including the capacity, if any, both
authorized and used under the previous
sentence) during 9 months of any one calendar
year, then in the next following calendar year
and thereafter, the requirement that additional
capacity shall be used in the immediately
following year does not apply.
``(3) Applications for waivers.--For a waiver under this
subsection a contractor shall submit to the Secretary an
application certifying the facts required to be found under
paragraph (1) (A) or (B), as applicable.
``(4) Action on application.--
``(A) Notice.--The Secretary shall publish a notice
of receipt of an application for a waiver under this
subsection within 30 days after receiving the
application.
``(B) Hearing prohibited.--The Secretary may not
conduct a hearing on an application for a waiver under
this subsection.
``(C) Submission of comments.--The Secretary shall
give every person operating a cargo vessel in a
noncontiguous trade for which a waiver is applied for
under this subsection and who has any interest in the
application a reasonable opportunity to submit comments
on the application and on the description of the
service that would be permitted by any waiver that is
granted by the Secretary under the application.
``(5) Decision on application.--
``(A) In general.--Except as provided in
subparagraph (B), the Secretary shall complete all
proceedings on an application under this subsection and
issue a decision on the record within 180 days after
receipt of the application.
``(B) Expedited consideration.--Subject to the time
required for publication of notice and for receipt and
evaluation of comments by the Secretary, an application
for a waiver under this subsection submitted at the
same time the applicant applies for inclusion of a
vessel in the Fleet shall be granted in accordance with
the level of service determined by the Secretary under
this subsection by not later than the date on which the
Secretary offers to the applicant an operating
agreement with respect to that vessel.
``(6) Change or increase in service.--Any material change
or increase in a service that is subject to a waiver under this
subsection is not authorize except to the extent the change or
increase is permitted by a waiver under subsection (b).
``(d) Annual Report on Waivers.--Each waiver under this section
shall require the person who is granted the waiver to submit to the
Secretary each year an annual report setting forth for the service
authorized by the waiver--
``(1) the ports served during the year;
``(2) the number or frequency of sailings performed during
the year; and
``(3) the volume of cargo carried or, for containerized or
trailer service, the annual 40-foot equivalent unit shipboard
container, trailer, or vehicle capacity utilized during the
year, or for tug and barge service, the annual barge house and
barge deck capacity utilized during the year.
``(e) Definitions.--In this section--
``(1) the term `noncontiguous trade' means trade between--
``(A) the contiguous 48 States; and
``(B) Alaska, Hawaii, or Puerto Rico; and
``(2) the term `related party' means--
``(A) a holding company, subsidiary, affiliate, or
associate of a contractor; and
``(B) an officer, director, agency, or other
executive of a contractor or of a person referred to in
subparagraph (A).
``SEC. 407. FUNDING FOR CONTINGENCY RETAINER FLEET OPERATING
AGREEMENTS.
``(a) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary any amounts necessary to liquidate
obligations under operating agreements.
``(b) Transfer of Balances From Operating-Differential Subsidy
Program.--Any amounts otherwise available for operating differential
subsidy contracts under title VI that are no longer required for those
contracts are available, until expended, for operating agreements.
``SEC. 408. DEFINITIONS.
``In this title:
``(1) Contractor.--The term `contractor' means an owner or
operator of a vessel that enters into an operating agreement
for the vessel with the Secretary.
``(2) Eligibility decision application.--The term
`eligibility decision application' means an application for a
decision by the Secretary under section 403 that a vessel is
eligible to be enrolled in the Fleet.
``(3) Eligible vessel.--The term `eligible vessel' means a
vessel that the Secretary decides under section 403 is eligible
to be enrolled in the Fleet.
``(4) Fleet.--The term `Fleet' means the Contingency
Retainer Fleet established under section 402.
``(5) Fleet operator.--The term `Fleet Operator' means a
person that is a party to an operating agreement with the
Secretary in effect under this title.
``(6) Operating agreement.--The term `operating agreement'
means an operating agreement entered into by the Secretary
under section 404.
``(7) Secretary.--The term `Secretary' means the Secretary
of Transportation.
``(8) United states documented vessel.--The term `United
States documented vessel' means a vessel that is documented
under chapter 121 of title 46, United States Code.''.
(b) Limitation on Entering and Effectiveness of Agreements.--The
Secretary of Transportation may not enter into an operating agreement
under title IV of the Merchant Marine Act, 1936, as amended by this
Act, before October 1, 1994. Any operating agreement entered into under
that title between October 1, 1994, and September 30, 1995, may not be
effective until October 1, 1995.
(c) Limitation on Payments.--Notwithstanding section 405(a)(2) of
the Merchant Marine Act, 1936, as amended by this Act, or the terms of
any operating agreement (as that term is used in that section), the
United States Government is not obligated to pay, and the Secretary of
Transportation may not pay, any amount pursuant to that section for any
day in which a vessel that is covered by an operating agreement is
under a charter to the United States Government that was entered into
before the date of the enactment of this Act.
(d) Limitation on Operating Agreements for Vessels Constructed
Under Existing Foreign Construction Contracts.--
(1) Limitation.--The Secretary of Transportation may decide
that a vessel described in paragraph (2) is eligible for an
operating agreement under title IV of the Merchant Marine Act,
1936, as amended by this Act, only if--
(A) the contract under which the vessel is
constructed is, on and after May 19, 1993, binding on
the person that submits an eligibility application
under that title for the vessel;
(B) construction of the vessel is begun before
January 1, 1994; and
(C) the vessel is a United States documented vessel
(as that term is defined in that title) before November
19, 1995.
(2) Vessel described.--A vessel referred to in paragraph
(1) is a vessel--
(A) that is constructed in a foreign country under
a contract that is entered into before May 19, 1993;
and
(B) the construction of which is not completed
before that date.
SEC. 4. OPERATING-DIFFERENTIAL SUBSIDY CONTRACTS.
(a) Prohibition on New Contracts.--Section 601 of the Merchant
Marine Act, 1936 (46 App. U.S.C. 1171) is amended by adding at the end
the following:
``(c) After the effective date of this subsection, the Secretary of
Transportation may not enter into any new contract under this title.''.
(b) Termination of Existing Contracts.--Notwithstanding any other
provision of this Act, any contract in effect under title VI of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1171 et seq.), on the day
before the date of enactment of this Act shall continue in effect under
its terms and terminate as set forth in the contract, unless
voluntarily terminated on an earlier date by the persons (other than
the United States Government) that are parties to the contract.
(c) Exemption of Bulk Cargo ODS Vessels From Operating
Restrictions.--Section 506 of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1156) is amended--
(1) by inserting ``(a)'' after ``Sec. 506.''; and
(2) by adding at the end the following new subsection:
``(b) This section does not apply to any liquid or dry bulk cargo
vessel for which operating-differential subsidy is required to be paid
under a contract under title VI that is in force on the effective date
of this subsection, effective upon the termination date of the contract
(as set forth in the contract as in effect on the effective date of
this subsection).''.
(d) Restrictions on Operations of ODS Vessels.--Title VI of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1171 et seq.), as amended by
this Act, is further amended by adding at the end the following:
``SEC. 616. LIMITATION ON APPLICATION OF RESTRICTIONS ON OPERATIONS.
``Sections 605(c), 804, and 805, this section, and the essential
service requirements in section 601(a) and 603(a), do not apply to a
contractor if--
``(1) the contractor submits an eligibility decision
application to the Secretary under title IV for all of the
vessels operated by the contractor under an operating-
differential subsidy contract; and
``(2) all of those vessels for which operating agreements
are offered by the Secretary under title IV are enrolled in the
Maritime Security Fleet.''.
(e) Termination of Operating Differential Subsidy For Older
Vessels.--Section 605(b) of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1175(b)), is amended by adding the following new sentence at the
end of the subsection: ``After May 19, 1993, the Secretary of
Transportation may not enter any new formal order under this
subsection.''.
SEC. 5. DEFINITIONS APPLICABLE TO MERCHANT MARINE ACT, 1936.
Section 905 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1244),
is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Each of the terms `foreign commerce' and `foreign trade'
mean--
``(1) trade between the United States and a foreign
country; or
``(2) trade between foreign ports.'';
(2) by striking subsection (c) and inserting the following:
``(c) The term `citizen of the United States' means a person
eligible to own a documented vessel under chapter 121 of title 46,
United States Code.'', and
(3) by adding at the end the following:
``(h) The term `foreign subsidized shipyard' means a shipyard
that--
``(1) receives or benefits from, directly or indirectly, a
shipyard subsidy for the construction of vessels; and
``(2) is located in a foreign country that has not signed a
trade agreement with the United States that provides for the
elimination of subsidies for that shipyard.
``(i) The term `subsidy' includes any of the following:
``(A) Officially supported export credits and development
assistance.
``(B) Direct official operating support to the commercial
shipbuilding and repair industry, or to a related entity that
favors the operation of shipbuilding and repair, including--
``(i) grants;
``(ii) loans and loan guarantees other than those
available on the commercial market;
``(iii) forgiveness of debt;
``(iv) equity infusions on terms inconsistent with
commercially reasonable investment practices;
``(v) preferential provision of goods and services;
and
``(vi) public sector ownership of commercial
shipyards on terms inconsistent with commercially
reasonable investment practices.
``(C) Direct official support for investment in the
commercial shipbuilding and repair industry, or to a related
entity that favors the operation of shipbuilding and repair,
including the kinds of support listed in clauses (i) through
(v) of subparagraph (B), and any restructuring support, except
public support for social purposes directly and effectively
linked to shipyard closures.
``(D) Assistance in the form of grants, preferential loans,
preferential tax treatment, or otherwise, that benefits or is
directly related to shipbuilding and repair for purposes of
research and development that is not equally open to domestic
and foreign enterprises.
``(E) Tax policies and practices that favor the
shipbuilding and repair industry, directly or indirectly, such
as tax credits, deductions, exemptions and preferences,
including accelerated depreciation, if the benefits are not
generally available to persons or firms not engaged in
shipbuilding or repair.
``(F) Any official regulation or practice that authorizes
or encourages persons or firms engaged in shipbuilding or
repair to enter into anticompetitive arrangements.
``(G) Any indirect support directly related, in law or in
fact, to shipbuilding and repair at national yards, including
any public assistance favoring shipowners with an indirect
effect on shipbuilding or repair activities, and any assistance
provided to suppliers of significant inputs to shipbuilding,
which results in benefits to domestic shipbuilders.
``(H) Any export subsidy identified in the Illustrative
List of Export Subsidies in the Annex to the Agreement on
Interpretation and Application of Articles VI, XVI, and XXIII
of the General Agreement on Tariffs and Trade or any other
export subsidy that may be prohibited as a result of the
Uruguay Round of trade negotiations.''.
SEC. 6. GOVERNMENT-IMPELLED CARGOES.
(a) Vessels Eligible for Cargoes.--Section 901(b) of the Merchant
Marine Act, 1936 (46 App. U.S.C. 1241(b)) is amended--
(1) in paragraph (1), by striking ``For purposes of this
section, the term `privately owned United States-flag
commercial vessels''' and all that follows through the end of
the paragraph and inserting a period; and
(2) by adding at the end the following new paragraph:
``(3) In this section and section 901b, the term `privately owned
United States-flag commercial vessel' means a privately owned vessel
that is documented under chapter 121 of title 46, United States Code,
that--
``(A) was built in the United States;
``(B) was documented under chapter 121 of title 46, United
States Code, before May 19, 1993;
``(C) does not transport under section 901b or this section
on any voyage more than 5,000 tons of bulk cargo (as defined in
section 3 of the Shipping Act of 1984), and--
``(i) was built in a foreign shipyard under a
contract entered into before May 19, 1993; or
``(ii) is built under a contract entered into after
that date, in a foreign shipyard that on the date the
contract is entered is not a foreign subsidized
shipyard;
``(D)(i) is built under a contract entered into after May
19, 1993, in a foreign shipyard that on the date the contract
was entered is not a foreign subsidized shipyard; and
``(ii) has not been documented in a foreign country before
it is documented under chapter 121 of title 46, United States
Code; or
``(E) has been documented under chapter 121 of title 46,
United States Code, for at least 3 consecutive years, and--
``(i) was built in a foreign shipyard under a
contract entered into before May 19, 1993; or
``(ii) is built under a contract entered into after
that date, in a foreign shipyard that on the date the
contract was entered is not a foreign subsidized
shipyard.''.
(b) Clerical Amendment.--Section 901b of the Merchant Marine Act,
1936 (46 App. U.S.C. 1241f) is amended by adding at the end the
following:
``(f) For the definition of the term `privately owned United
States-flag commercial vessel', see section 901(b)(3).''.
SEC. 7. VESSEL FINANCING.
(a) Elimination of Mortgagee Restrictions.--Section 31322(a) of
title 46, United States Code, is amended to read as follows:
``(a) A preferred mortgage is a mortgage, whenever made, that--
``(1) includes the whole of the vessel;
``(2) is filed in substantial compliance with section 31321
of this title; and
``(3)(A) covers a documented vessel; or
``(B) covers a vessel for which an application for
documentation is filed that is in substantial compliance with
the requirements of chapter 121 of this title and the
regulations prescribed under that chapter.''.
(b) Elimination of Trustee Restrictions.--
(1) Repeal.--Section 31328 of title 46, United States Code,
is repealed.
(2) Conforming amendment.--Section 31330(b) of title 46,
United States Code, is amended in paragraphs (1), (2), and (3)
by striking ``31328 or'' each place it appears.
(c) Removal of Mortgage Restrictions.--Section 9 of the Shipping
Act, 1916 (46 App. U.S.C. 808), as amended by this Act, is further
amended--
(1) in subsection (c)--
(A) by striking ``and sections 31322(a)(1)(D) and
31328 of title 46, United States Code,''; and
(B) in paragraph (1) by striking ``mortgage,'' each
place it appears; and
(2) in subsection (d)--
(A) in paragraph (1) by striking ``transfer, or
mortgage'' and inserting ``or transfer'';
(B) in paragraph (2) by striking ``transfers, or
mortgages'' and inserting ``or transfers'';
(C) in paragraph (3)(B) by striking ``transfers, or
mortgages'' and inserting ``or transfers''; and
(D) in paragraph (4) by striking ``transfers, or
mortgages'' and inserting ``or transfers'';
SEC. 8. PLACEMENT OF VESSELS UNDER FOREIGN REGISTRY.
(a) In General.--Section 9 of the Shipping Act, 1916 (46 App.
U.S.C. 808), as amended by this Act, is further amended by adding at
the end the following:
``(e) Notwithstanding subsection (c)(2), the Merchant Marine Act,
1936, or any contract entered into with the Secretary under that Act,
the Secretary of Transportation shall allow a documented vessel to be
placed under a foreign registry if at least one replacement vessel of a
capacity that is equivalent or greater, as measured by deadweight tons,
gross tons, or container equivalent units, as appropriate, is
documented under chapter 121 of title 46, United States Code, by the
owner of the vessel placed under foreign registry.''.
(b) Application.--The amendment made by subsection (a) applies to
vessels that are placed under foreign registry after the date of
enactment of this Act and replacement vessels documented in the United
States after that date.
SEC. 9. EFFECTIVE DATE.
The amendments made by this Act are effective on the date which is
120 days after the date of enactment of this Act.
SEC. 10. REGULATIONS.
(a) In General.--The Secretary of Transportation shall prescribe
regulations as necessary to carry out this Act.
(b) Interim Regulations.--The Secretary of Transportation may
prescribe interim regulations necessary to carry out this Act and for
accepting eligibility decision applications under section 403 of the
Merchant Marine Act, 1936, as amended by this Act. For this purpose,
the Secretary of Transportation is excepted from compliance with the
notice and comment requirements of section 553 of title 5, United
States Code. All regulations prescribed under the authority of this
subsection that are not earlier superseded by final rules shall expire
270 days after the date of enactment of this Act.
SEC. 11. EXPANSION OF STANDING FOR MARITIME UNIONS.
Section 301 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1131)
is amended by adding at the end the following:
``(c) Standing for Maritime Union Representatives.--The duly-
elected representative of any organization that is certified by the
Secretary of Labor as the proper collective bargaining agency for
officers or crew employed on any type of United States documented
vessel is an interested party in, and has standing to challenge, any
proposed or final order, action, or rule of the Secretary of
Transportation under this Act.''.
SEC. 12. STUDY.
(a) In General.--After providing public notice and opportunity for
comment, the Secretary of Transportation shall conduct a study of--
(1) the impact of this Act on the international
competitiveness of United States documented vessels and whether
this Act has had a favorable or unfavorable impact on the
ability of United States documented vessels to compete
successfully with foreign-flag vessels;
(2) whether continuation of the Maritime Security Fleet
program established by this Act would assist the international
competitiveness of United States documented vessels;
(3) whether the Maritime Security Fleet program should be
continued, modified, or discontinued;
(4) alternatives that are or should be available to
operators of United States documented vessels if the Maritime
Security Fleet program is discontinued; and
(5) any other issues related to promoting the international
competitiveness of United States documented vessels that the
Secretary considers appropriate.
(b) Report.--The Secretary of Transportation shall submit to the
Congress a report on the findings and conclusions of the study required
by subsection (a) by not later than 4 years after the date of enactment
of this Act, which shall include such recommendations as the Secretary
considers appropriate.
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