[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3769 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 3769

 To promote the construction in the United States of modern, efficient 
    documented vessels suitable for commercial and national defense 
  purposes, to strengthen the defense industrial base, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 2, 1994

Ms. Schenk (for herself, Mr. Andrews of Maine, Mr. Dellums, Mr. Filner, 
Mr. Hochbrueckner, Mr. Hunter, Mr. Lipinski, Mr. Studds, Mr. Taylor of 
 Mississippi, and Mr. Traficant) introduced the following bill; which 
     was referred to the Committee on Merchant Marine and Fisheries

_______________________________________________________________________

                                 A BILL


 
 To promote the construction in the United States of modern, efficient 
    documented vessels suitable for commercial and national defense 
  purposes, to strengthen the defense industrial base, 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 ``Merchant Marine Revitalization Act 
of 1994''.

SEC. 2. FINDINGS, PURPOSES, AND POLICY.

    (a) Findings.--Congress finds the following:
            (1) The United States-flag merchant fleet, which is the 
        primary means of transporting vital military and critical raw 
        material cargo in the event of national emergencies, the United 
        States shipyard industry, which designs and constructs all Navy 
        vessels and is a mobilization base in the event of national 
        emergency, and domestic producers of marine equipment, which 
        are essential to the construction of commercial and naval 
        vessels, serve essential national security functions.
            (2) The United States shipbuilding industry is encumbered 
        in the international ship construction market by significant 
        subsidies and anticompetitive practices that impede the ability 
        of United States firms to compete on a fair and equitable 
        basis.
            (3) The United States shipbuilding industry encounters 
        costs of production due to regulatory measures required by the 
        United States that exceed the standards imposed 
        internationally.
            (4) The United States-flag merchant fleet has dwindled in 
        size to the point that United States-flag vessels now carry 
        less than 4 percent of the ocean borne trade of the United 
        States.
            (5) The United States shipyard industry currently has no 
        orders for new construction of large commercial vessels, 
        several major shipyards are experiencing severe financial 
        conditions, and the industry is laying-off thousands of 
        employees.
            (6) Skilled labor to crew the United States merchant marine 
        and to construct new vessels is at a precariously low level.
            (7) The United States-flag merchant fleet, the United 
        States shipyard industry, and the domestic marine equipment 
        suppliers, have decreased in size to the point that the bulk 
        sealift capability and vessel construction and repair 
        mobilization capacity of the United States are dangerously 
        inadequate.
            (8) The United States shipbuilding industry, by effectively 
        transitioning from defense production to global 
        competitiveness, has the potential to become an exporter of 
        ships, thereby providing jobs, paying taxes, and earning 
        foreign exchange.
            (9) The most equitable and cost-effective means of 
        promoting the United States-flag merchant fleet and the United 
        States shipyard industry is to reserve a certain portion of 
        cargo imports for United States-flag merchant vessels designed 
        and built in the United States.
    (b) Purpose and Policy.--It is the purpose and policy of the 
Congress in this Act--
            (1) to take immediate and positive steps to promote the 
        orderly and rapid re-growth of the United States-flag merchant 
        fleet to transport at least 30 percent of certain imports of 
        the United States on United States-flag vessels by January 1, 
        2000, to ensure viable merchant marine and shipbuilding 
        industries;
            (2) to assist and cooperate with the importers of 
        designated commodities so that they will be able to ship their 
        imported goods in United States-flag vessels in a commercially 
        practicable manner;
            (3) to encourage the design and construction by the United 
        States shipyard industry of new, efficient merchant vessels;
            (4) to require the maintenance and repair of United States-
        flag vessels in United States shipyards unless there is an 
        emergency on a voyage;
            (5) to eliminate foreign subsidies and anticompetitive 
        practices and make the United States merchant marine and 
        shipbuilding industries internationally competitive by the turn 
        of the century;
            (6) to preserve existing and create additional essential 
        skilled employment in the merchant marine and shipbuilding 
        industries and their supplier industries;
            (7) to complement and support existing efforts to preserve 
        viable and healthy merchant marine and shipbuilding industries 
        for the benefit of the economy of the United States, the 
        balance of payments of the United States, and the national 
        defense; and
            (8) to preclude the monopolization of the shipping industry 
        by foreign-flag vessels.

SEC. 3. UNITED STATES-FLAG TRANSPORT OF CERTAIN IMPORTED CARGOES 
              REQUIRED.

    Section 901 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1241) 
is amended by adding at the end the following new subsection:
    ``(d) United States-Flag Transport of Certain Imported Cargoes 
Required.--
            ``(1) United states-flag transport required.--The Secretary 
        shall issue regulations that--
                    ``(A) ensure that of the total amount of oil in 
                bulk that is imported each year and that is transported 
                on seagoing vessels in the course of that importation, 
                and of the total amount of motor vehicles that is 
                imported each year that is so transported, not less 
                than the percentage applicable under paragraph (2) is 
                so transported only on vessels that are documented 
                under the laws of the United States and otherwise are 
                eligible vessels; and
                    ``(B) require that of the total amount of each type 
                of covered cargo that a person imports in a year, not 
                less than the percentage applicable for that year under 
                paragraph (2) shall be complying covered cargoes.
            ``(2) Minimum percentage applicable.--
                    ``(A) Oil in bulk.--Except as otherwise provided in 
                this subsection, the percentage applicable under this 
                paragraph to importation of oil in bulk is as follows:
                            ``(i) In the case of oil in bulk 
                        transported in the course of that importation 
                        on seagoing vessels of 200,000 deadweight tons 
                        or greater--
                                    ``(I) before 1997, 4 percent;
                                    ``(II) in 1997, 8 percent;
                                    ``(III) in 1998, 12 percent;
                                    ``(IV) in 1999, 16 percent;
                                    ``(V) in 2000, 20 percent;
                                    ``(VI) in 2001, 25 percent; and
                                    ``(VII) in each year after 2001, 30 
                                percent.
                            ``(ii) In the case of oil in bulk 
                        transported in the course of that importation 
                        on seagoing vessels of less than 200,000 
                        deadweight tons--
                                    ``(I) before 1998, 10 percent;
                                    ``(II) in 1998, 15 percent;
                                    ``(III) in 1999, 20 percent;
                                    ``(IV) in 2000, 25 percent; and
                                    ``(V) in each year after 2000, 30 
                                percent.
                    ``(B) Motor vehicles.--Except as otherwise provided 
                in this paragraph or paragraph (6), the percentage 
                applicable under this paragraph to importation of motor 
                vehicles is--
                            ``(i) before 1995, 4 percent;
                            ``(ii) in 1995, 5 percent;
                            ``(iii) in 1996, 10 percent;
                            ``(iv) in 1997, 20 percent;
                            ``(v) in 1998, 30 percent;
                            ``(vi) in 1999, 40 percent; and
                            ``(vii) in each year after 1999, 50 
                        percent.
                    ``(C) Reduction of percentage for lack of available 
                eligible vessels.--
                            ``(i) In general.--The Secretary may reduce 
                        a percentage otherwise applicable in a year for 
                        a covered cargo under subparagraph (A) or (B), 
                        if--
                                    ``(I) the Secretary determines that 
                                the number of eligible vessels 
                                (including eligible vessels on order 
                                and scheduled to be ready for 
                                commercial service) that are available 
                                at fair and reasonable rates to 
                                transport the amount of the covered 
                                cargo expected to be imported in that 
                                year is not adequate to enable 
                                importers of the covered cargo to 
                                comply with the percentage otherwise 
                                applicable; and
                                    ``(II) the percentage, as reduced, 
                                will ensure, in the manner most 
                                equitable and commercially practicable 
                                for all importers, the use of all 
                                eligible vessels that the Secretary 
                                determines are available to provide 
                                that transport.
                            ``(ii) Termination of reduction.--Any 
                        reduction of a percentage under this 
                        subparagraph shall not apply after the number 
                        of eligible vessels that are available at fair 
                        and reasonable rates to transport a covered 
                        cargo is adequate to enable importers of the 
                        covered cargo to comply with the percentage 
                        otherwise applicable under subparagraph (A) or 
                        (B).
                            ``(iii) Determination of available vessels 
                        required.--Each year the Secretary shall 
                        determine the number of eligible vessels that 
                        are available at fair and reasonable rates to 
                        transport each type of covered cargo.
                    ``(D) Reduction of percentage for national 
                emergency.--The President may reduce a percentage 
                otherwise applicable in a year under subparagraph (A) 
                or (B), if the President--
                            ``(i) determines that an emergency exists 
                        justifying the reduction to protect the 
                        national interests of the United States; and
                            ``(ii) issues a statement in writing of the 
                        reasons for that determination.
            ``(3) Exemptions.--The requirements under this subsection 
        shall not apply to--
                    ``(A) importation of oil in bulk by a person in any 
                year in which the total amount of oil in bulk imported 
                by the person--
                            ``(i) does not exceed an average daily 
                        amount of 30,000 barrels per day, and
                            ``(ii) does not exceed the number of 
                        barrels used by the person in that year; or
                    ``(B) importation of motor vehicles by a person in 
                any year in which the total number of motor vehicles 
                imported by the person does not exceed a de minimis 
                number of motor vehicles determined by the Secretary 
                that would not have an impact on the implementation of 
                this subsection.
            ``(4) Treatment of related persons.--In determining for 
        purposes of paragraph (1) the amount of a covered cargo 
        imported by a person, the Secretary shall include covered cargo 
        that is imported by any other person who controls, is 
        controlled by, or is under common control with, the person with 
        respect to whom the determination is made.
            ``(5) Issuance of credits and use in lieu of compliance.--
                    ``(A) Establishment of system.--The Secretary shall 
                establish in regulations under paragraph (1) a system 
                under which--
                            ``(i) the Secretary shall issue credits to 
                        a person for amounts of a complying covered 
                        cargo that are imported by the person in a year 
                        in excess of the applicable percentage for the 
                        complying covered cargo for the year under 
                        paragraph (2) and of any amount the person is 
                        required to report under paragraph 9(C);
                            ``(ii) those credits may be transferred to 
                        another person; and
                            ``(iii) a person may redeem any of those 
                        credits held by the person in lieu of complying 
                        in that year with paragraphs (1)(B) and (9)(C).
                    ``(B) Importer certification.--Each person that 
                imports a covered cargo in any year after 1993 shall 
                submit to the Secretary, before the end of January of 
                the following year, a sworn statement certifying--
                            ``(i) the amount of each type of covered 
                        cargo that was imported by the person in the 
                        year covered by the certification; and
                            ``(ii) the percentage of each of those 
                        amounts that was a complying covered cargo.
            ``(6) Phase out of requirements.--
                    ``(A) In general.--The Secretary shall phase out 
                the requirements of this subsection, in accordance with 
                subparagraphs (B) and (C), if--
                            ``(i) there is in force for the United 
                        States and implemented by the Congress an 
                        international agreement that eliminates 
                        shipbuilding subsidies among the 10 countries 
                        with the largest production of commercial 
                        vessels; and
                            ``(ii) the Secretary, after due 
                        investigation, determines and reports to the 
                        Congress that all shipbuilding subsidies among 
                        those countries have in fact been eliminated.
                    ``(B) Reduction of applicable percentage.--The 
                Secretary shall phase out the requirements of this 
                subsection pursuant to subparagraph (A) by reducing 
                each year the percentages otherwise applicable in the 
                year under paragraph (2).
                    ``(C) Assuring participation of existing eligible 
                vessels.--The Secretary shall reduce applicable 
                percentages pursuant to subparagraph (B) in a manner 
                that will reasonably ensure that each eligible vessel 
                constructed under a contract entered into after the 
                date of the enactment of the Maritime Revitalization 
                Act of 1994 and before the date of the determination 
                under subparagraph (A)(ii) pursuant to which the 
                reduction is made, will have the opportunity to 
                participate in the transportation of covered cargoes 
                for the lesser of the economic life of the vessel or 
                the 20-year period beginning on the date of the 
                completion of construction of the vessel.
                    ``(D) Reinstatement of requirements.--
                Notwithstanding any determination by the Secretary 
                under subparagraph (A)(ii) that subsidies have been 
                eliminated, if the Secretary, in consultation with the 
                United States Trade Representative and the heads of 
                other Federal agencies, finds at any time that any of 
                the subsidies have been resumed, then--
                            ``(i) the Secretary shall reinstate the 
                        requirements of this subsection; and
                            ``(ii) any reductions in percentages 
                        otherwise applicable under paragraph (2) that 
                        were made pursuant to the determination under 
                        subparagraph (A)(ii) of this paragraph shall 
                        not apply.
            ``(7) Vessel financing.--If the Secretary determines that 
        inadequate commercial financing exists to construct new vessels 
        of a design appropriate to meet the requirements of this 
        subsection, the Secretary may guarantee that financing under 
        title XI.
            ``(8) Implementation, generally.--
                    ``(A) Ensuring fair participation.--In implementing 
                this subsection, the Secretary shall ensure fair and 
                reasonable participation by appropriate types and sizes 
                of eligible vessels, in the transportation of complying 
                covered cargoes from all geographic areas in which the 
                cargoes originate.
                    ``(B) Actions by other agencies.--The head of each 
                agency and each instrumentality of the United States 
                Government, and the officers and employees of those 
                agencies and instrumentalities, shall take all 
                appropriate actions to comply with, implement, and 
                enforce the requirements of this subsection.
            ``(9) Penalties.--
                    ``(A) Imposition of civil penalty.--Any person who 
                is determined by the Secretary, on the record after an 
                opportunity for a hearing in accordance with section 
                554 of title 5, United States Code, to have violated 
                this subsection or any regulation issued under this 
                subsection, shall be liable to the United States for a 
                civil penalty assessed by the Secretary by written 
                notice, in an amount determined under subparagraph (B).
                    ``(B) Amount of civil penalty.--The amount of a 
                civil penalty under subparagraph (A) shall be the equal 
                to--
                            ``(i) the amount of the economic benefit 
                        the Secretary determines the person derived 
                        from the activity constituting the violation; 
                        plus
                            ``(ii) 10 percent of that amount.
                    ``(C) Increase in required imports of complying 
                covered cargo.--If the Secretary determines under this 
                paragraph that the amount of a type of complying 
                covered cargo that a person imported in a year was less 
                than the amount of that type of complying covered cargo 
                the person was required to import that year under this 
                subsection, the Secretary shall require the person to--
                            ``(i) import in the year following the year 
                        in which the determination is made an amount of 
                        that type of complying covered cargo that is 
                        equal to the shortfall, in addition to any 
                        amount of that type of complying covered cargo 
                        the person is required to import to comply with 
                        this subsection; or
                            ``(ii) redeem credits equivalent to that 
                        amount under the system established under 
                        paragraph (5)(A).
            ``(10) Efficiency report.--The Secretary shall report to 
        the Congress in 1997 on--
                    ``(A) the progress made by the United States 
                shipbuilding and merchant marine industries in 
                increasing the efficiency of the construction and 
                operation of documented vessels and thereby achieving 
                international competitiveness by 2001, through 
                improvements in the cost of--
                            ``(i) construction, including design;
                            ``(ii) equipment and materials; and
                            ``(iii) operations, including labor;
                    ``(B) the subsidies and anticompetitive measures of 
                foreign countries in their shipbuilding and merchant 
                marine industries; and
                    ``(C) the costs imposed on the shipbuilding and 
                merchant marine industries of the United States due to 
                regulatory measures of the United States.
            ``(11) Annual report.--the Secretary shall review, 
        evaluate, and report annually to the Congress and the President 
        on the implementation of this subsection, together with 
        recommendations concerning the requirements of this subsection.
            ``(12) Regulations.--
                    ``(A) Issuance.--The Secretary of Transportation 
                shall issue regulations implementing this subsection by 
                not later than 6 months after the date of the enactment 
                of the Merchant Marine Revitalization Act of 1994.
                    ``(B) Vessel availability and rates.--Regulations 
                issued under this paragraph shall include regulations 
                that establish a methodology for determining the 
                availability of United States-flag vessels and that 
                establish fair and reasonable rates for those vessels. 
                In promulgating those regulations, the Secretary shall 
                seek to develop a methodology which accounts for 
                variations in charter and vessel types, voyage lengths, 
                and other characteristics which may require special 
                consideration (including cost variations over time) and 
                which affords vessel operators a reasonable profit 
                calculated to promote continued acquisition of new 
                vessels from United States shipyards. The Secretary 
                shall publish on a regular and frequent basis the rates 
                developed under this section.
            ``(13) Definitions.--In this subsection:
                    ``(A) Complying covered cargo.--The term `complying 
                covered cargo' means a covered cargo that is 
                transported by seagoing vessel in the course of 
                importation (including transportation directly to the 
                United States from the original point of production, or 
                indirectly from that point through any intermediate 
                point) only on an eligible vessel.
                    ``(B) Covered cargo.--The term `covered cargo' 
                means oil in bulk or a motor vehicle that is--
                            ``(i) imported after the date of the 
                        enactment of the Maritime Revitalization Act of 
                        1994; and
                            ``(ii) transported in the course of that 
                        importation (including transportation directly 
                        to the United States from the original point of 
                        production, or indirectly from that point 
                        through any intermediate point) on a seagoing 
                        vessel;
                    ``(C) Eligible vessel.--The term `eligible vessel' 
                means a vessel--
                            ``(i) that is a documented vessel (as that 
                        term is defined in section 2101 of title 46, 
                        United States Code);
                            ``(ii) that is a seagoing vessel designed 
                        to transport oil in bulk or motor vehicles;
                            ``(iii) that is built in the United States;
                            ``(iv) that is constructed from components 
                        (including the hull, superstructure, equipment, 
                        and materials) from domestic sources, except 
                        that this clause does not apply--
                                    ``(I) with respect to any component 
                                that is not available from 2 or more 
                                domestic sources in an amount of time 
                                that reasonably allows compliance with 
                                the requirements of this subsection; or
                                    ``(II) to a vessel that was built 
                                before the date of the enactment of the 
                                Merchant Marine Revitalization Act of 
                                1994;
                            ``(v) that is less than 20 years old;
                            ``(vi) that complies with all applicable 
                        Federal laws, including all applicable Federal 
                        environmental requirements and safety 
                        requirements; and
                            ``(vii) for which all work performed in 
                        overhauling, repairing, and maintaining the 
                        vessel after the date of the enactment of the 
                        Merchant Marine Revitalization Act of 1994 is 
                        performed in shipyards in the United States, 
                        except for emergency voyage repairs.
                    ``(D) Import.--The term `import' means to--
                            ``(i) bring covered cargo into the customs 
                        territory of the United States; and
                            ``(ii) be primarily liable for payment of 
                        any duties for that covered cargo.
                    ``(E) Motor vehicle.--The term `motor vehicle' 
                means complete passenger automobiles, trucks, 
                commercial cars and buses, motorcycles, and special 
                purpose motor vehicles which are primarily for highway 
                use.
                    ``(F) Oil.--The term `oil' means--
                            ``(i) crude oil; or
                            ``(ii) any of the following products 
                        refined or derived from crude oil: unfinished 
                        fuels, gasoline, kerosene, aviation fuels, 
                        naphtha, cracking stocks, distillate heating 
                        oil, diesel oil, and residual oils.
                    ``(G) Secretary.--The term `Secretary' means the 
                Secretary of Transportation.''.

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HR 3769 IH----2