[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1350 Introduced in House (IH)]
104th CONGRESS
1st Session
H. R. 1350
To amend the Merchant Marine Act, 1936 to revitalize the United States-
flag merchant marine, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 29, 1995
Mr. Spence (for himself, Mr. Dellums, and Mr. Bateman), (all by
request) introduced the following bill; which was referred to the
Committee on National Security
_______________________________________________________________________
A BILL
To amend the Merchant Marine Act, 1936 to revitalize the United States-
flag merchant marine, 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 Act of 1995.''
SEC. 2. AMENDMENTS TO THE MERCHANT MARINE ACT, 1936, AS AMENDED.
(a) Title VI of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1171 et seq.), is amended by deleting the heading of title VI,
``OPERATING-DIFFERENTIAL SUBSIDY'' and inserting a new heading and
subheading as follows:
``TITLE VI--OPERATING-DIFFERENTIAL SUBSIDY AND MARITIME SECURITY
PROGRAM
``Subpart A--Operating-Differential Subsidy''.
(b) Section 605(b) (46 App. U.S.C. 1175(b)) is amended to read as
follows:
``(b) No operating-differential subsidy shall be paid for the
operation of a vessel that is more than twenty-five years of age,
unless the Secretary of Transportation has determined, before the
enactment of the Maritime Security Act of 1995, that it is in the
public interest to grant such financial aid for the operation of such
vessel. After the date of enactment of the Maritime Security Act of
1995, the Secretary of Transportation shall have no authority to grant
additional operating-differential subsidy under this subsection.''.
(c) Title VI of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1171 et seq.) is amended by adding a new section 616 following
section 615, to read as follows:
``Sec. 616. (a)(1) The Secretary of Transportation may authorize a
contractor operating a liner vessel and receiving an operating-
differential subsidy under subpart A of this title to construct,
reconstruct, or acquire a liner vessel of over five thousand deadweight
tons worldwide to replace a vessel that would reach the end of its
subsidizable life prior to the expiration of the contractor's
operating-differential subsidy contract. The replacement vessel shall
be documented under chapter 121 of subtitle II of title 46, United
States Code.
``(2) A replacement liner vessel shall not be eligible for
operating-differential subsidy pursuant to subpart A of this title, and
shall be limited to payments in the amounts set forth in subpart B of
this title until the existing contract pursuant to subpart A terminates
according to its terms.
``(b)(1) The Secretary of Transportation may authorize a contractor
operating a bulk cargo vessel and receiving operating-differential
subsidy under subpart A of this title to construct, reconstruct, or
acquire a bulk cargo vessel of over five thousand deadweight tons
worldwide to replace a vessel that would reach the end of its
subsidizable life prior to the expiration of the contractor's
operating-differential subsidy contract. The replacement vessel shall
be documented under chapter 121 of subtitle II of title 46, United
States Code.
``(2) A replacement bulk cargo vessel shall continue to receive an
operating-differential subsidy under an existing contract pursuant to
subpart A of this title until the existing contract terminates
according to its terms.
``(c) Liner vessels and bulk cargo vessels constructed pursuant to
subsections (a) and (b) of this section shall be deemed to have been
built in a domestic shipyard for the purposes of section 610 of this
Act: Provided, That the provisions of section 607 of this Act shall not
apply to vessels constructed, reconstructed, or acquired pursuant to
subsections (a) and (b) of this section.
``(d) Any existing foreign-built liner vessel that is acquired
pursuant to subsection (a) of this section and documented under chapter
121 of subtitle II of title 46, United States Code, shall be less than
five years of age at the time of such documentation.
``(e) Any existing foreign-built bulk cargo vessel that is acquired
pursuant to subsection (b) of this section and documented under chapter
121 of subtitle II of title 46, United States Code, shall be less than
five years of age at the time of such documentation.
``(f) No authority granted by the Secretary of Transportation to
construct, reconstruct, or acquire vessels pursuant to subsections (a)
and (b) of this section may be sold, assigned, conveyed, leased or
otherwise transferred to any other party, without the written consent
of the Secretary of Transportation pursuant to section 608 of this
title.''.
(d) Title VI of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1171 et seq.) is amended by adding a new section 617 following
the new section 616, to read as follows:
``Sec. 617. (A) After the date of enactment of the Maritime
Security Act of 1995, the Secretary of Transportation shall not enter
into any new contract for an operating-differential subsidy under
subpart A of this title.
``(b) Notwithstanding any other provision of this Act, any
operating-differential subsidy contract in effect under title VI on the
day before the date of enactment of the Maritime Security and Trade Act
of 1995--
``(1) shall continue in effect and terminate as set forth
in the contract, unless voluntarily terminated at an earlier
date by the persons (other than the United States Government)
that are parties to the contract; and
``(2) may not be renewed or extended.
``(c) After the date of enactment of the Maritime Security Act of
1995, an owner or operator of a vessel covered by an operating-
differential subsidy contract under subpart A of this title may operate
such vessel in the foreign commerce of the United States without
restriction, notwithstanding any other provision of this Act.
``(d) With respect to a liner vessel--
``(1) whose operator receives operating-differential
subsidy pursuant to a contract under this title, which is in
force on October 1, 1995, and if the Secretary approves the
replacement of such vessel with a comparable vessel, or
``(2) covered by an operating agreement under subpart B of
this title, and if the Secretary approves the replacement of
such vessel with a comparable vessel for inclusion in the fleet
established under subpart B of title VII--
such vessel may be transferred and registered under the flag of an
effective United States-controlled foreign flag, notwithstanding any
other provision of law: Provided, That the vessel is available to be
requisitioned by the Secretary of Transportation pursuant to section
902 of this Act (46 App. U.S.C. 1242).''.
(e) Title VI of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1171 et seq.) is amended by adding a new subpart B to read as
follows:
``Subpart B--Maritime Security Program
``establishment of fleet
``Sec. 650. (a) The Secretary of Transportation shall encourage the
establishment of a fleet of active, militarily useful, privately owned
vessels to meet national defense and other security requirements and
maintain an American presence in international commercial shipping. The
fleet shall consist of privately owned, United States-flag liner
vessels for which there are in effect operating agreements under this
subpart.
``(b) A liner vessel may not be included in the fleet unless:
``(1) It is operated by an `ocean common carrier' as
defined in section 3 of the Shipping Act of 1984 (46 App.
U.S.C. 1702).
``(2) It is a vessel that is fifteen years of age or less
on the date an operating agreement is entered into under
section 651, unless the Secretary of Transportation, in
consultation with the Secretary of Transportation, in
consultation with the Secretary of Defense, determines that it
is in the national interest to waive this requirement.
``(3) It is a vessel that is less than five years of age at
the time it is documented under chapter 121 of subtitle II of
title 46, United States Code, if it is foreign-built.
``(4) The Secretary of Transportation, after consultation
with the Secretary of Defense, determines that the vessel is
necessary to maintain a United States presence in international
commercial shipping or determines that the vessel is militarily
useful for meeting the sealift needs of the United States with
respect to national emergencies.
``(5) The owner or operator of the vessel is a citizen of
the United States as set forth in section 651.
``operating agreements
``Sec. 651. (a) The Secretary of Transportation shall require, as a
condition of including any vessel in the fleet, that the owner or
operator of the vessel enter into an operating agreement with the
Secretary of Transportation pursuant to this section.
``(b) An operating agreement pursuant to this section shall require
that, during the period of the agreement--
``(1) each vessel covered by the operating agreement--
``(A) shall be operated exclusively in the foreign
trade, and
``(B) shall not be operated in the coastwise trade
of the United States or in mixed domestic and foreign
trade; and
``(2) the owner or operator of a vessel covered by the
operating agreement shall have the vessel documented under
chapter 121 of subtitle II of title 46, United States Code, and
shall maintain that documentation.
``(c) An owner or operator of a vessel covered by an operating
agreement under this subpart may operate this vessel in the foreign
commerce of the United States without restriction.
``(d)(1) The Secretary of Transportation is authorized to enter
into multiyear operating agreements for the period of fiscal year 1996
through fiscal year 2005, subject to the following conditions:
``(A) The total amount of all operating agreements does not
exceed $1,000,000,000 for fiscal years 1996 through 2005.
``(B) Funds need only be appropriated for the first year of
the agreements and for termination costs, pursuant to section 3
of the Maritime Security Act of 1995, at the time the operating
agreements are executed.
``(C) Funds for termination costs shall be held in reserve,
pursuant to section 3 of the Maritime Security Act of 1995.
``(D) Such operating agreements shall provide that at no
time will the Government's total termination liability exceed
amounts currently appropriated for the purpose of such
agreements plus amounts held in reserve for termination costs.
``(E) An operating agreement entered into pursuant to this
section shall not be considered a procurement contract for the
purposes of Federal procurement laws or regulations.
``(2) An operating agreement pursuant to this section shall provide
that the Secretary of Transportation pay to the owner or operator of
each liner vessel that is included in the operating agreement, an
amount per vessel per year that does not exceed $2,500,000, for fiscal
years 1996 through 1998, and does not exceed $2,000,000, for fiscal
years 1999 through 2005. The amount per year paid to the owner or
operator of a liner vessel under an operating agreement pursuant to
this section shall be paid at the end of each month in equal
installments.
``(e) In order to qualify for the annual payments under this
section, the owner or operator shall certify annually, pursuant to
regulations issued by the Secretary, that each vessel covered by an
operating agreement was operated in a trade required by section
651(b)(1) for at least three hundred and twenty days in a fiscal year,
including days during which the liner vessel is drydocked, surveyed,
inspected, or repaired.
``(f) Without regard to an operating agreement in effect with an
owner or operator of a liner vessel under this section, the Secretary
of Transportation shall not make any payment under this section for a
vessel with respect to any period in which the vessel is--
``(1) subject to an operating-differential subsidy contract
under subpart A of title VI of this Act;
``(2) not operated or maintained in accordance with an
operating agreement under this subpart; or
``(3) more than twenty-five years of age.
``(g) With respect to payments under this section for a vessel
covered by an operating agreement, the Secretary of Transportation--
``(1) shall not reduce any payment for the operation of a
vessel to carry military or other preference cargoes under--
``(A) section 2631 of title 10, United States Code;
or
``(B) section 1241-1 of title 46, Appendix, United
States Code;
``(2) shall not make any payment for each day that a vessel
is engaged in transporting more than five thousand tons of
civilian bulk preference cargoes pursuant to section 901(a),
901(b), or 901b of this Act; and
``(3) shall reduce any payment for each day that a vessel
is engaged in transporting less than five thousand tons of
civilian bulk preference cargoes pursuant to sections 901(a),
901(b), or 901b of this Act, by an amount which bears the same
ratio to the amount otherwise payable as revenue for the
carriage of preference cargo bears to the gross revenue derived
from the entire voyage.
``(h) The Secretary of Transportation shall enter into operating
agreements in the following order of priority--
``(1) liner vessel or vessels owned or operated by a person
that is a citizen of the United States under section 2 of the
Shipping Act, 1916; and then
``(2) liner vessel or vessels owned or operated by a person
that is eligible to document a vessel under chapter 121 of
subtitle II of title 46, United States Code.
``(i) No authority granted by the Secretary of Transportation to an
owner or operator of a vessel covered by an operating agreement under
this subpart may be sold, assigned, conveyed, leased or otherwise
transferred to any other party, without the written consent of the
Secretary of Transportation pursuant to the provisions of section 608
of this title.
``(j) Any authority granted by the Secretary of Transportation to
an owner or operator of a vessel covered by an operating agreement
under this subpart shall be used by the holder of the operating
agreement within one year from the date such authority is granted for
existing vessels and within two years from the date such authority is
granted for newly constructed vessels, or the authority shall revert to
the Secretary of Transportation for such disposition as determined
appropriate.
``(k) An operating agreement entered into by the Secretary of
Transportation under this subpart shall be effective for a period of
not more than ten years, and, under any condition, terminate not later
than September 30, 2005.
``(l) An operating agreement entered into by the Secretary of
Transportation under this subpart shall require the owner or operator
of a vessel covered by an operating agreement under this subpart to
enroll in an Emergency Preparedness Program, pursuant to the
requirements of section 652, under such terms and conditions as the
Secretary may prescribe.
``national security requirements
``Sec. 652. (a) On a request of the President during time of war or
national emergency or when decided by the President to be necessary in
the national interest, an owner or operator of a vessel covered by an
operating agreement under this subpart shall make available commercial
transportation resources pursuant to an Emergency Preparedness Program
established by the Secretary of Transportation and approved by the
Secretary of Defense.
``(b) The commercial transportation resources to be made available
shall include vessels or capacity in vessels, intermodal systems and
equipment, terminal facilities, and intermodal and management services,
or any portion of these resources, as the Secretary may determine to be
necessary.
``(c) The Secretary of Transportation shall not reduce the amount
of equal monthly installment payments under section 651 to an owner or
operator who makes commercial transportation resources available
pursuant to an Emergency Preparedness Program under this section.
``(d) An owner or operator who makes a vessel available pursuant to
this section shall be permitted to employ a foreign-flag vessel in the
foreign commerce of the United States, without receiving additional
compensation, as a replacement for a vessel covered by an operating
agreement, until a vessel used is redelivered.
``domestic noncontiguous trade restrictions
``Sec. 653. (a) Prohibition.--
``(1) In general.--Except as provided in this section, an
owner or operator may not receive any payment under this
subpart--
``(A) if the owner or operator or a related party
with respect to the owner or operator, directly or
indirectly owns, charters, or operates a vessel engaged
in the transportation of cargo in a noncontiguous trade
other than in accordance with a waiver under subsection
(b), (c), or (d); or
``(B) if the owner or operator is authorized to
operate a vessel in noncontiguous trade under such a
waiver, and there is a--
``(i) material change in the domestic ports
served by the owner or operator from the ports
permitted to be served under the waiver;
``(ii) material increase in the annual
number or the frequency of sailings by the
owner or operator from the number or frequency
permitted under the waiver; or
``(iii) material increase in the annual
volume of cargo carried or annual capacity
utilized by the owner or operator from the
annual volume of cargo or annual capacity
permitted under the waiver.
``(2) Limitations on prohibition.--Paragraph (1) applies to
an owner or operator only in the years specified for payments
under the operating agreement entered into by the owner or
operator.
``(b) General Waiver Authority.--
``(1) In general.--Except as provided in subsection (c),
the Secretary may waive, in writing, the application of
subsection (a) to an owner or operator 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) subject to paragraph (6), 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 forty-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 forty-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 an owner or
operator 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 a
previous waiver.
``(4) Action on application and hearing.--
``(A) Notice and proceeding.--Within thirty days
after receipt of an application for a waiver under this
subsection, the Secretary shall--
``(i) publish a notice of the application;
``(ii) begin a proceeding on the
application 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 ninety
days after receipt of the final briefs submitted for the
record.
``(6) Limitation on consideration of certain existing
service.--
``(A) Limitation.--In determining whether to grant
a waiver under this subsection for noncontiguous trade
with Hawaii, the Secretary shall not consider the
criterion set forth in paragraph (1)(B) if a qualified
operator--
``(i) is a party to an operating agreement
under this subpart, and
``(ii) operates four or more vessels in
foreign commerce in competition with another
operator who is a party to an operating
agreement under this subpart.
``(B) Qualfieid operator.--In this paragraph, the
term `qualified operator' means a person that on July
1, 1992, offered service as an operator of
containerized vessels, trailer vessels, or combination
container and trailer vessels in domestic trade with
Hawaii and the Johnston Islands (including a related
party with respect to the person).
``(c) Waivers for Existing Noncontiguous Trade Operators.--
``(1) In general.--The Secretary shall waive the
application of subsection (a) to an owner or operator, who is a
party to an operating agreement under this subpart, pursuant to
an application submitted in accordance with this subsection if
the Secretary finds that the owner or operator, or a related
party or predecessor in interest with respect to the owner or
operator--
``(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
military contingency or over which the owner or
operator (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 six calendar
months preceding July 1, 1992, or for seasonal service,
the twelve 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
military contingency 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 forty-
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 forty-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 for the applicant
shall permit a level of service consisting of--
``(i) one hundred and four sailings each
year from the West Coast of the United States
to Hawaii with an annual capacity allocated to
the service of 75 per centum of the total
capacity of the vessels employed in the service
on July 1, 1992;
``(ii) one hundred and fifty-six 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 per centum of the total
capacity of its vessels employed in the service
on the date of the enactment of the Maritime
Security Act of 1995; and
``(iii) one hundred and three sailings each
year in each direction between Washington and
Alaska with an annual capacity allocated to the
service in each direction of 100 per centum 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 for the applicant shall
permit a level of service consisting of--
``(i) seventeen 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 forty-foot equivalent
unit container capacity in each direction of
100 per centum of the total of the capacity of
its vessels employed in the service during the
six calendar months preceding July 1, 1992,
annualized;
``(ii) two hundred and fifty-three sailings
each year in each direction between the East
Coast or Gulf Coast of the United States and
Puerto Rico with an annual forty-foot
equivalent unit container or trailer capacity
equal to 100 per centum of the capacity of its
barges employed in the service on the date of
the enactment of the Maritime Security Act of
1995;
``(iii) thirty-seven regularly scheduled
tandem tow rail barge sailings and ten
additional single tow rail barge 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 per centum of the total rail car capacity
of its vessels employed in the service on July
1, 1992;
``(iv) eight 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 per centum 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 south of
the Arctic Circle not served by the common
carrier service permitted under clause (iii)
and points in the contiguous forty-eight
States, with an annual capacity allocated to
that service not exceeding 100 per centum of
the total capacity of the equipment that was
dedicated to service south of the Arctic Circle
on July 1, 1992, and actually utilized in that
service in the two-year period preceding that
date.
``(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) Each written waiver granted by the
Secretary under this subsection shall contain a
statement that the annual capacity permitted
under this waiver in any direction shall
increase for a calendar year by the percentage
of increase during the preceding calendar year
in the real gross product of the State or
territory to which goods are transported in the
noncontiguous trade covered by the waiver, or
its equivalent economic measure as determined
by the Secretary if the real gross produce is
not available, and that the increase shall not
be considered to be a material change or
increase for purposes of subsection (a)(1)(B).
``(ii) The increase in permitted capacity
under clause (i) in the noncontiguous trade
with Alaska shall be allowed only to the extent
the operator actually uses that increased
capacity to carry cargo in the permitted
service in the calendar year immediately
following the preceding increase in gross
product. However, if an operator operating
exclusively containerized vessels in trade on
July 1, 1992, carries an average load factor of
at least 90 per centum of permitted capacity
(including the capacity, if any, both
authorized and used under the previous
sentence) during nine months of any one
calendar year, then in the next following
calendar year and thereafter, the requirement
that additional capacity must be used in the
immediately following year does not apply.
``(F) Service levels not increased by termination
of agreement.--The termination of an operating
agreement under subpart B of this title shall not be
considered to increase a level of service specified in
subparagraph (A), (B), or (C) if the contractor under
the agreement enters into another operating agreement
after that termination.
``(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 thirty 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 domestic 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.--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
established under this subpart 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 of increase in service.--Any material change
or increase in a service that is subject to a waiver under this
subsection is not authorized except to the extent the change or
increase is permitted by a waiver under subsection (b).
``(d) Emergency Waiver.--Notwithstanding any other provision of
this section, the Secretary may, without hearing, temporarily waive the
application of subsection (a)(1)(B) if the Secretary finds that a
material change or increase is essential in order to respond adequately
to--
``(1) an environmental or natural disaster or emergency, or
``(2) another emergency declared by the President.
Any waiver shall be for a period of not to exceed forty-five days,
except that a waiver may be renewed for thirty-day periods if the
Secretary finds that adequate capacity continues to be otherwise
unavailable.
``(e) 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 forty-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.
``(f) Definitions.--In this section--
``(1) the term `noncontiguous trade' means trade between--
``(A) a point in the contiguous forty-eight States;
and
``(B) a point in Alaska, Hawaii, or Puerto Rico,
other than a point in Alaska north of the Arctic
Circle; and
``(2) the term `related party' means--
``(A) a holding company, subsidiary, affiliate, or
associate of a owner or operator who is a party to an
operating agreement under this subpart; and
``(B) an officer, director, agency, or other
executive of a contractor or of a person referred to in
subparagraph (A).
``definitions
``Sec. 654. For the purposes of subpart B of this title:
``(1) The term `citizen of the United States' means a
person that is a citizen of the United States under section 651
of this subpart.
``(2) The term `operating agreement' means an operating
agreement that takes effect under section 651 of this subpart
and covers one or more vessels.''.
(f) Effective Date.--The amendments made by subsections (a) through
(e) of this section shall be effective beginning on the date which is
one hundred twenty days after the date of enactment of the Maritime
Security Act of 1995.
SEC. 3. AUTHORIZATION OF APPROPRIATIONS.
(a) Funds are authorized to be appropriated for operating
agreements that are entered into under the Maritime Security Program in
subpart B of title VI of the Merchant Marine Act, 1936, as amended, as
follows:
``(1) not to exceed $175,000,000, to remain available until
expended, for fiscal year 1996, of which $75,000,000 shall be
held in reserve for contract termination costs, and
``(2) not to exceed $100,000,000, to remain available until
expended, for each of fiscal years 1997 through 2005.''.
(b) For any fiscal year after fiscal year 1996, contract
termination costs are deemed termination costs that satisfy the total
obligation of the Federal Government to an owner or operator of a
vessel covered by an operating agreement under the Maritime Security
Program and the operating agreement is thereby terminated, if funds are
not authorized and appropriated for payments pursuant to operating
agreements that are entered into under the Maritime Security Program,
and the $75,000,000 held in reserve for contract termination costs is
paid on a pro rata basis for vessels covered by operating agreements in
the year of the default. Each vessel covered by an operating agreement
is thereby released from any further obligation under the operating
agreement and the vessel owner or operator may transfer and register
such vessel immediately under an effective United States-controlled
foreign flag, notwithstanding any other provision of law: Provided,
that, if section 902 of the Merchant Marine Act, 1936, as amended (46
App. U.S.C. 1242) is applicable to such vessel after registry under the
flag of an effective United States-controlled foreign flag, the vessel
is available to be requisitioned by the Secretary of Transportation
pursuant to section 902 of the Merchant Marine Act, 1936, as amended.
SEC. 4. USE OF FOREIGN-FLAG VESSELS.
Section 804 of title VIII of the Merchant Marine Act, 1936, as
amended (46 App. U.S.C. 1222), is amended by adding a new subsection
(f) as follows:
``(f) The provisions of subsection (a) of this section shall not
preclude an owner or operator receiving operating assistance under
subpart A or subpart B of title VI, or any holding company, subsidiary,
affiliate or associate of such owner or operator, or any officer,
director, agency, or executive thereof from--
``(1) owning, chartering, or operating any foreign-flag
vessel that is operated as a feeder vessel for a United States-
flag service under an operating agreement pursuant to subpart B
of title VI;
``(2) owning, chartering, or operating any foreign-flag
vessel in line haul service between the United States and
foreign ports; Provided, That the foreign-flag vessel was
operated by that owner or operator on the date of enactment of
this Act; or that the owner or operator, with respect to each
additional foreign-flag vessel, has first applied to have that
vessel added to the existing operating agreement, and the
Secretary has denied the application; And provided further,
That any foreign-flag vessel in line haul service between the
United States and foreign ports is--
(A) registered under the flag of an effective
United States-controlled foreign flag, and
(B) available to be requisitioned by the Secretary
of Transportation pursuant to section 902 of this Act;
``(3) owning, chartering, or operating foreign-flag liner
vessels that are operated exclusively in foreign-to-foreign
service and not in the foreign commerce of the United States;
``(4) owning, chartering, or operating foreign-flag bulk
cargo vessels that are operated in both foreign-to-foreign
service and the foreign commerce of the United States;
``(5) chartering or operating foreign-flag vessels that are
operated solely as replacement vessels for United States-flag
vessels that are made available to the Secretary of Defense
pursuant to section 652 of subpart B of title VI; or
``(6) entering into space charter agreements with foreign-
flag carriers or acting as agent or broker for a foreign-flag
vessel or vessels.''.
SEC. 5. DEFINITION OF PRIVATELY OWNED UNITED STATES-FLAG COMMERCIAL
VESSELS.
The third sentence of section 901(b)(1) of title IX of the Merchant
Marine Act, 1936, as amended (46 App. U.S.C. 1241(b)(1)) is deleted in
its entirety and the following is inserted in lieu thereof: ``For
purposes of this section, the term `privately owned United States-flag
commercial vessels' shall be deemed to include--
(A) any privately owned United States flag
commercial vessel constructed in the United States,
(B) any privately owned liner vessel constructed,
reconstructed, or acquired outside the United States
that is documented pursuant to chapter 121 of title 46,
United States Code and is less than five years of age
on the date of such documentation, and
(C) any bulk cargo vessel constructed in or
delivered by a shipyard outside the United States after
January 1, 1993.
The term `privately owned United States-flag commercial
vessels' shall also be deemed to include any liner or bulk
cargo vessel that so qualified pursuant to section 615 of title
VI or Section 901(b)(1) of title IX of this Act, prior to
enactment of the Maritime Security Act of 1995. The term
`privately owned United States-flag commercial vessels' shall
not be deemed to include any liquid bulk cargo vessel that does
not meet the requirements of section 3703a of title 46, United
States Code.''.
SEC. 6. USE OF FOREIGN-FLAG FEEDER VESSELS IN CARRIAGE OF PREFERENCE
CARGOES.
The provisions of law set forth in 46 App. U.S.C. 1241(b)(1), 1241-
1, and 1241f, requiring use of United States-flag vessels shall, with
respect to liner vessels, be deemed fulfilled, as to the total of any
shipment other than that of the Department of Defense covered by 10
U.S.C. 2631, if the actual ocean transportation of each shipment for
which the United States-flag carrier has issued its own through bill-
of-lading between the original port of lading and the port of final
discharge, consists of transportation of the cargo by a combination of
United States- and foreign-flag vessels; Provided, That, measured by
distance, the United States-flag line haul portion of each voyage is
greater than the foreign-flag feeder portion of each voyage pursuant to
regulations issued by the Secretary of Transportation.
SEC. 7. LIMITATION ON RESTRICTIONS.
Notwithstanding any other provision of law or contract, all
restrictions and requirements set forth in 46 App. U.S.C. 1153, 1156,
and 1212, applicable to a vessel constructed, reconstructed or
reconditioned with the aid of construction-differential subsidy shall
terminate--
(1) for a liner or dry bulk cargo vessel, upon the
expiration of the twenty-five-year period beginning on the date
of original delivery of the vessel from the shipyard, and
(2) for a liquid bulk cargo vessel, upon the expiration of
the twenty-year period beginning on the date of original
delivery of the vessel from the shipyard.
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