[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1350 Reported in House (RH)]
Union Calendar No. 121
104th CONGRESS
1st Session
H. R. 1350
[Report No. 104-229]
_______________________________________________________________________
A BILL
To amend the Merchant Marine Act, 1936 to revitalize the United States-
flag merchant marine, and for other purposes.
_______________________________________________________________________
August 3, 1995
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
Union Calendar No. 121
104th CONGRESS
1st Session
H. R. 1350
[Report No. 104-229]
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
August 3, 1995
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on March
29, 1995]
_______________________________________________________________________
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. MARITIME SECURITY PROGRAM.
Title VI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1171 et
seq.) is amended--
(1) by striking the title heading and inserting the
following:
``Title VI--Vessel Operating Assistance Programs
``Subtitle A--Operating-Differential Subsidy Program'';
and
(2) by adding at the end the following new subtitle:
``Subtitle B--Maritime Security Fleet Program
``establishment of fleet
``Sec. 651. (a) In General.--The Secretary of Transportation shall
establish a fleet of active, militarily useful, privately-owned vessels
to meet national defense and other security requirements and maintain a
United States presence in international commercial shipping. The Fleet
shall consist of privately owned, United States-flag vessels for which
there are in effect operating agreements under this subtitle, and shall
be known as the Maritime Security Fleet.
``(b) Vessel Eligibility.--A vessel is eligible to be included in
the Fleet if the vessel is self-propelled and--
``(1)(A) is operated by a person as an ocean common carrier
(as that term is used in the Shipping Act of 1984 (46 App.
U.S.C. 1701 et seq.));
``(B) whether in commercial service, on charter to the
Department of Defense, or in other employment, is either--
``(i) a roll-on/roll-off vessel with a carrying
capacity of at least 80,000 square feet or 500 twenty-
foot equivalent units; or
``(ii) a lighter aboard ship vessel with a barge
capacity of at least 75 barges; or
``(C) any other type of vessel that is determined by the
Secretary to be suitable for use by the United States for
national defense or military purposes in time of war or
national emergency;
``(2)(A)(i) is a United States-documented vessel; and
``(ii) on the date an operating agreement covering the
vessel is entered into under this subtitle, is--
``(I) a LASH vessel that is 25 years of age or
less; or
``(II) any other type of vessel that is 15 years of
age or less;
except that the Secretary of Transportation may waive the
application of clause (ii) if the Secretary, in consultation
with the Secretary of Defense, determines that the waiver is in
the national interest; or
``(B) it is not a United States-documented vessel, but the
owner of the vessel has demonstrated an intent to have the
vessel documented under chapter 121 of title 46, United States
Code, if it is included in the Fleet, and the vessel will be
less than 10 years of age on the date of that documentation;
``(3) the Secretary of Transportation determines that the
vessel is necessary to maintain a United States presence in
international commercial shipping or, after consultation with
the Secretary of Defense, determines that the vessel is
militarily useful for meeting the sealift needs of the United
States with respect to national emergencies; and
``(4) at the time an operating agreement for the vessel is
entered into under this subtitle, the vessel will be eligible
for documentation under chapter 121 of title 46, United States
Code.
``operating agreements
``Sec. 652. (a) In General.--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 under this section. Notwithstanding subsection (g), the
Secretary may enter into an operating agreement for, among other
vessels that are eligible to be included in the Fleet, any vessel which
continues to operate under an operating-differential subsidy contract
under subtitle A or which is under charter to the Department of
Defense.
``(b) Requirements for Operation.--An operating agreement under
this section shall require that, during the period a vessel is
operating under the agreement--
``(1) the vessel--
``(A) shall be operated exclusively in the foreign
trade or in mixed foreign and domestic trade allowed
under a registry endorsement issued under section 12105
of title 46, United States Code, and
``(B) shall not otherwise be operated in the
coastwise trade; and
``(2) the vessel shall be documented under chapter 121 of
title 46, United States Code.
``(c) Certain Requirements Not To Apply.--A contractor of a vessel
included in an operating agreement under this subtitle may operate the
vessel in the foreign commerce of the United States without
restriction, and shall not be subject to any requirement under section
801, 808, 809, or 810.
``(d) Effectiveness and Annual Payment Requirements of Operating
Agreements.--
``(1) Effectiveness.--The Secretary of Transportation may
enter into an operating agreement under this subtitle for
fiscal year 1996. The agreement shall be effective only for 1
fiscal year, but shall be renewable, subject to the
availability of appropriations, for each subsequent fiscal year
through the end of fiscal year 2005.
``(2) Annual payment.--An operating agreement under this
subtitle shall require, subject to the availability of
appropriations and the other provisions of this section, that
the Secretary of Transportation pay each fiscal year to the
contractor, for each vessel that is covered by the operating
agreement, an amount equal to $2,300,000 for fiscal year 1996
and $2,100,000 for each fiscal year thereafter in which the
agreement is in effect. The amount shall be paid in equal
monthly installments at the end of each month. The amount shall
not be reduced except as provided by this section.
``(e) Certification Required for Payment.--As a condition of
receiving payment under this section for a fiscal year for a vessel,
the owner or operator of the vessel shall certify, in accordance with
regulations issued by the Secretary of Transportation, that the vessel
has been and will be operated in accordance with subsection (b)(1) for
at least 320 days in the fiscal year. Days during which the vessel is
drydocked, surveyed, inspected, or repaired shall be considered days of
operation for purposes of this subsection.
``(f) Operating Agreement is Obligation of United States
Government.--An operating agreement under this subtitle constitutes a
contractual obligation of the United States Government to pay the
amounts provided for in the agreement to the extent of actual
appropriations.
``(g) Limitations.--The Secretary of Transportation shall not make
any payment under this subtitle for a vessel with respect to any days
for which the vessel is--
``(1) subject to an operating-differential subsidy contract
under subtitle A or under a charter to the United States
Government, other than a charter pursuant to section 653;
``(2) not operated or maintained in accordance with an
operating agreement under this subtitle; or
``(3) more than 25 years of age, except that the Secretary
may make such payments for a LASH vessel for any day for which
the vessel is more than 25 years of age if that vessel--
``(A) is modernized after January 1, 1994,
``(B) is modernized before it is 25 years of age,
and
``(C) is not more than 30 years of age.
``(h) Payments.--With respect to payments under this subtitle for a
vessel covered by an operating agreement, the Secretary of
Transportation--
``(1) except as provided in paragraph (2), shall not reduce
any payment for the operation of a vessel to carry military or
other preference cargoes under section 2631 of title 10, United
States Code, the Act of March 26, 1934 (46 App. U.S.C. 1241-1),
section 901(a), 901(b), or 901b of this Act, or any other cargo
preference law of the United States;
``(2) shall not make any payment for any day that a vessel
is engaged in transporting more than 7,500 tons of civilian
bulk preference cargoes pursuant to section 901(a), 901(b), or
901b that is bulk cargo (as that term is defined in section 3
of the Shipping Act of 1984 (46 App. U.S.C. 1702)); and
``(3) shall make a pro rata reduction in payment for each
day less than 320 in a fiscal year that a vessel covered by an
operating agreement is not operated in accordance with
subsection (b)(1), with days during which the vessel is
drydocked or undergoing survey, inspection, or repair
considered to be days on which the vessel is operated.
``(i) Priority for Awarding Agreements.--Subject to the
availability of appropriations, the Secretary shall enter into
operating agreements according to the following priority:
``(1) Vessels owned by citizens.--
``(A) Priority.--First, for any vessel that is--
``(i) owned and operated by persons who are
citizens of the United States under section 2
of the Shipping Act, 1916; or
``(ii) less than 10 years of age and owned
and operated by a corporation that is--
``(I) eligible to document a vessel
under chapter 121 of title 46, United
States Code; and
``(II) affiliated with a
corporation operating or managing for
the Secretary of Defense other vessels
documented under that chapter, or
chartering other vessels to the
Secretary of Defense.
``(B) Limitation on number of operating
agreements.--The total number of operating agreements
that may be entered into by a person under the priority
in subparagraph (A)--
``(i) for vessels described in subparagraph
(A)(i), may not exceed the sum of--
``(I) the number of United States-
documented vessels the person operated
in the foreign commerce of the United
States (except mixed coastwise and
foreign commerce) on May 17, 1995; and
``(II) the number of United States-
documented vessels the person chartered
to the Secretary of Defense on that
date; and
``(ii) for vessels described in
subparagraph (A)(ii), may not exceed 5 vessels.
``(C) Treatment of related parties.--For purposes
of subparagraph (B), a related party with respect to a
person shall be treated as the person.
``(2) Other vessels owned by citizens and government
contractors.--To the extent that amounts are available after
applying paragraph (1), any vessel that is owned and operated
by a person who is--
``(A) a citizen of the United States under section
2 of the Shipping Act, 1916, that has not been awarded
an operating agreement under the priority established
under paragraph (1); or
``(B)(i) eligible to document a vessel under
chapter 121 of title 46, United States Code; and
``(ii) affiliated with a corporation operating or
managing other United States-documented vessels for the
Secretary of Defense or chartering other vessels to the
Secretary of Defense.
``(3) Other vessels.--To the extent that amounts are
available after applying paragraphs (1) and (2), any other
eligible vessel.
``(j) Transfer of Operating Agreements.--A contractor under an
operating agreement may transfer the agreement (including all rights
and obligations under the agreement) to any person eligible to enter
into that operating agreement under this subtitle after notification of
the Secretary in accordance with regulations prescribed by the
Secretary, unless the transfer is disapproved by the Secretary within
90 days after the date of that notification. A person to whom an
operating agreement is transferred may receive payments from the
Secretary under the agreement only if each vessel to be covered by the
agreement after the transfer is an eligible vessel under section
651(b).
``(k) Reversion of Unused Authority.--The obligation of the
Secretary to make payments under an operating agreement under this
subtitle shall terminate with respect to a vessel if the contractor
fails to engage in operation of the vessel for which such payment is
required--
``(1) within one year after the effective date of the
operating agreement, in the case of a vessel in existence on
the effective date of the agreement, or
``(2) within 30 months after the effective date of the
operating agreement, in the case of a vessel to be constructed
after that effective date.
``(l) Procedure for Considering Application; Effective Date for
Certain Vessels.--
``(1) Procedures.--Within 90 days after receipt of an
application for enrollment of a vessel in the Fleet, the
Secretary shall enter into an operating agreement with the
applicant or provide in writing the reason for denial of that
application.
``(2) Effective date.--Unless an earlier date is requested
by the applicant, the effective date for an operating agreement
with respect to a vessel which is, on the date of entry into an
operating agreement, either subject to a contract under
subtitle A or on charter to the United States Government, other
than a charter under section 653, shall be the expiration or
termination date of the contract under subtitle A or of the
Government charter covering the vessel, respectively, or any
earlier date the vessel is withdrawn from that contract or
charter.
``(m) Early Termination.--An operating agreement under this
subtitle shall terminate on a date specified by the contractor if the
contractor notifies the Secretary, by not later than 60 days before the
effective date of the termination, that the contractor intends to
terminate the agreement. Vessels covered by an operating agreement
terminated under to this subsection shall remain documented under
chapter 121 of title 46, United States Code, until the date the
operating agreement would have terminated according to its terms. A
contractor who terminates an operating agreement pursuant to this
subsection shall continue to be bound by the provisions of section 653
until the date the operating agreement would have terminated according
to its terms. All terms and conditions of an Emergency Preparedness
Agreement entered into under to section 653 shall remain in effect
until the date the operating agreement would have terminated according
to its terms, except that the terms of such Emergency Preparedness
Agreement may be modified by the mutual consent of the contractor and
the Secretary of Transportation.
``(n) Termination for Lack of Funds.--If funds are not appropriated
under the authority provided by section 655 for any fiscal year, then
each vessel covered by an operating agreement under this subtitle is
thereby released from any further obligation under the operating
agreement, the operating agreement shall terminate, and the vessel
owner or operator may transfer and register such vessel under an
effective United States-controlled foreign flag, notwithstanding any
other provision of law. If section 902 is applicable to such vessel
after registry under an effective United States-controlled foreign
flag, the vessel is available to be requisitioned by the Secretary of
Transportation pursuant to section 902.
``(o) Award of Operating Agreements.--
``(1) In general.--The Secretary of Transportation, subject
to paragraph (4), shall award operating agreements within each
priority under subsection (i)(1), (2), and (3) under
regulations prescribed by the Secretary.
``(2) Number of agreements awarded.--Regulations under
paragraph (1) shall provide that if appropriated amounts are
not sufficient for operating agreements for all vessels within
a priority under subsection (i)(1), (2), or (3), the Secretary
shall award to each person submitting a request a number of
operating agreements that bears approximately the same ratio to
the total number of vessels in the priority, as the amount of
appropriations available for operating agreements for vessels
in the priority bears to the amount of appropriations necessary
for operating agreements for all vessels in the priority.
``(3) Treatment of related parties.--For purposes of
paragraph (2), a related party with respect to a person shall
be treated as the person.
``(4) Preference for u.s.-built vessels.--In awarding
operating agreements for vessels within a priority under
subsection (i) (1), (2), or (3), the Secretary shall give
preference to a vessel that was constructed in the United
States, to the extent such preference is consistent with
establishment of a fleet described in the first sentence of
section 651(a) (taking into account the age of the vessel, the
nature of service provided by the vessel, and the commercial
viability of the vessel).
``(p) Notice to U.S. Shipbuilders Required.--The Secretary shall
include in any operating agreement under this subtitle a requirement
that the contractor under the agreement shall, by not later than 30
days after soliciting any bid or offer for the construction of any
vessel in a foreign shipyard and before entering into a contract for
construction of a vessel in a foreign shipyard, provide notice of the
intent of the contractor to enter into such a contract to each shipyard
in the United States that is capable of constructing the vessel.
``national security requirements
``Sec. 653. (a) Emergency Preparedness Agreement.--
``(1) Requirement to enter agreement.--The Secretary of
Transportation shall establish an Emergency Preparedness
Program under this section that is approved by the Secretary of
Defense. Under the program, the Secretary of Transportation
shall include in each operating agreement under this subtitle a
requirement that the contractor enter into an Emergency
Preparedness Agreement under this section with the Secretary.
The Secretary shall negotiate and enter into an Emergency
Preparedness Agreement with each contractor as promptly as
practicable after the contractor has entered into an operating
agreement under this subtitle.
``(2) Terms of agreement.--An Emergency Preparedness
Agreement under this section shall require that upon a request
by the Secretary of Defense during time of war or national
emergency, an owner or operator of a vessel covered by an
operating agreement under this subtitle shall make available
commercial transportation resources (including services). The
basic terms of the Emergency Preparedness Agreement shall be
established pursuant to consultations among the Secretary, the
Secretary of Defense, and Maritime Security Program
contractors. In any Emergency Preparedness Agreement, the
Secretary and a contractor may agree to additional or modifying
terms appropriate to the contractor's circumstances.
``(b) Resources Made Available.--The commercial transportation
resources to be made available under an Emergency Preparedness
Agreement shall include vessels or capacity in vessels, intermodal
systems and equipment, terminal facilities, intermodal and management
services, and other related services, or any agreed portion of such
nonvessel resources for activation as the Secretary may determine to be
necessary, seeking to minimize disruption of the contractor's service
to commercial shippers.
``(c) Compensation.--
``(1) In general.--The Secretary of Transportation shall
provide in each Emergency Preparedness Agreement for reasonable
compensation for all commercial transportation resources
provided pursuant to this section.
``(2) Specific requirements.--Compensation under this
subsection--
``(A) shall not be less than the contractor's
commercial market charges for like transportation
resources;
``(B) shall include all the contractor's costs
associated with provision and use of the contractor's
commercial resources to meet emergency requirements;
``(C) in the case of a charter of an entire vessel,
shall be fair and reasonable;
``(D) shall be in addition to and shall not in any
way reflect amounts payable under section 652; and
``(E) shall be provided from the time that a vessel
or resource is diverted from commercial service until
the time that reenters commercial service.
``(d) Temporary Replacement Vessels.--Notwithstanding any other
provision of this subtitle or of other law to the contrary--
``(1) a contractor may operate or employ in foreign
commerce a foreign-flag vessel or foreign-flag vessel capacity,
as a temporary replacement for a United States-documented
vessel or United States-documented vessel capacity that is
activated under an Emergency Preparedness Agreement; and
``(2) such replacement vessel or vessel capacity shall be
eligible during the replacement period to transport preference
cargoes subject to section 2631 of title 10, United States
Code, the Act of March 26, 1934 (46 App. U.S.C. 1241-1), and
sections 901(a), 901(b), and 901b of this Act to the same
extent as the eligibility of the vessel or vessel capacity
replaced.
``(e) Redelivery and Liability of U.S. for Damages.--
``(1) In general.--All commercial transportation resources
activated under an Emergency Preparedness Agreement shall, upon
termination of the period of activation, be redelivered to the
contractor in the same good order and condition as when
received, less ordinary wear and tear, or the Government shall
fully compensate the contractor for any necessary repair or
replacement.
``(2) Limitation on liability of u.s.--Except as may be
expressly agreed to in an Emergency Preparedness Agreement, or
as otherwise provided by law, the Government shall not be
liable for disruption of a contractor's commercial business or
other consequential damages to a contractor arising from
activation of commercial transportation resources under an
Emergency Preparedness Agreement.
``(3) Limitation on application of other requirements.--
Sections 902 and 909 of this Act shall not apply to a vessel
while it is covered by an Emergency Preparedness Agreement
under this subtitle. Any Emergency Preparedness Agreement
entered into by a contractor shall supersede any other
agreement between that contractor and the Government for vessel
availability in time of war or national emergency.
``definitions
``Sec. 654. In this subtitle:
``(1) Fleet.--The term `Fleet' means the Maritime Security
Fleet established pursuant to section 651(a).
``(2) LASH vessel.--The term `LASH vessel' means a lighter
aboard ship vessel.
``(3) United states-documented vessel.--The term `United
States-documented vessel' means a vessel documented under
chapter 121 of title 46, United States Code.
``authorization of appropriations
``Sec. 655. There are authorized to be appropriated for operating
agreements under this subtitle, to remain available until expended,
$100,000,000 for fiscal year 1996 and such sums as may be necessary,
not to exceed $100,000,000, for each fiscal year thereafter through
fiscal year 2005.''.
SEC. 3. TERMINATION OF OPERATING-DIFFERENTIAL SUBSIDY PROGRAM.
(a) Limitation on Payments for Older Vessels.--Section 605(b) of
the Merchant Marine Act, 1936 (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 after the calendar year the vessel becomes 25
years of age, unless the Secretary of Transportation has determined,
before the date of 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.''.
(b) Wind-Up of Program.--Subtitle A of such Act (46 App. U.S.C.
1171 et seq.), as designated by the amendment made by section 2(1), is
further amended by adding at the end the following new section:
``Sec. 616. (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 operating-differential subsidy under this
subtitle.
``(b) Notwithstanding any other provision of this Act, any
operating-differential subsidy contract in effect under this title on
the day before the date of enactment of the Maritime Security Act of
1995 shall continue in effect and terminate as set forth in the
contract, unless voluntarily terminated at an earlier date by the
parties (other than the United States Government) to the contract.
``(c) The essential service requirements of section 601(a) and
603(b), and the provisions of sections 605(c) and 809(a), shall not
apply to the operating-differential subsidy program under this subtitle
effective upon the earlier of--
``(1) the date that a payment is made, under the Maritime
Security Program established by subtitle B to a contractor
under that subtitle who is not party to an operating-
differential subsidy contract under this subtitle, with the
Secretary to cause notice of the date of such payment to be
published in the Federal Register as soon as possible; or
``(2) with respect to a particular contractor under the
operating-differential subsidy program, the date that
contractor enters into a contract with the Secretary under the
Maritime Security Program established by subtitle B.
``(d)(1) Notwithstanding any other provision of law, a vessel may
be transferred and registered under an effective United States-
controlled foreign flag if--
``(A) the operator of the vessel receives an operating-
differential subsidy pursuant to a contract under this subtitle
which is in force on October 1, 1994, and
the Secretary approves the replacement of such vessel with a
comparable vessel, or
``(B) the vessel is covered by an operating agreement under
subtitle B, and the Secretary approves the replacement of such
vessel with a comparable vessel for inclusion in the Maritime
Security Fleet established under subtitle B.
``(2) Any such vessel may be requisitioned by the Secretary of
Transportation pursuant to section 902.''.
SEC. 4. DOMESTIC OPERATIONS.
Section 805(a) of the Merchant Marine Act, 1936 (46 App. U.S.C.
1223(a)) is amended by striking ``1935'' each place it appears and
inserting ``1995''.
SEC. 5. USE OF FOREIGN-FLAG VESSELS.
(a) In General.--Section 804 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1222) is amended by adding at the end the following new
subsection:
``(f) The provisions of subsection (a) shall not preclude a
contractor receiving assistance under subtitle A or B of title VI, or
any holding company, subsidiary, or affiliate of the contractor, or any
officer, director, agent, or executive thereof, from--
``(1) owning, chartering, or operating any foreign-flag
vessel on a voyage or a segment of a voyage that does not call
at a port in the United States;
``(2) owning, chartering, or operating any foreign-flag
vessel in line haul service between the United States and
foreign ports if--
``(A) the foreign-flag vessel was operated by, or
is a replacement for a foreign-flag vessel operated by,
such owner or operator, or any holding company,
subsidiary, affiliate, or associate of such owner or
operator, on the date of enactment of the Maritime
Security Act of 1995;
``(B) the owner or operator, with respect to each
additional foreign-flag vessel, other than a time
chartered vessel, has first applied to have that vessel
covered by an operating agreement under subtitle B of
title VI, and the Secretary has not awarded an
operating agreement with respect to that vessel within
90 days after the filing of the application; or
``(C) the vessel has been placed under foreign
documentation pursuant to section 9 of the Shipping
Act, 1916 (46 App. U.S.C. 808), except that any
foreign-flag vessel, other than a time chartered
vessel, a replacement vessel under section 653(d), or a
vessel operated by the owner or operator on the date of
enactment of the Maritime Security Act of 1995, in line
haul service between the United States and foreign
ports is registered under the flag of an effective
United States-controlled foreign flag, and available to
be requisitioned by the Secretary of Transportation
pursuant to section 902 of this Act;
``(3) owning, chartering, or operating foreign-flag bulk
cargo vessels that are operated in foreign-to-foreign service
or the foreign commerce of the United States;
``(4) chartering or operating foreign-flag vessels that are
operated solely as replacement vessels for United States-flag
vessels or vessel capacity that are made available to the
Secretary of Defense pursuant to section 653 of this Act; or
``(5) entering into time or space charter or other
cooperative agreements with respect to foreign-flag vessels or
acting as agent or broker for a foreign-flag vessel or
vessels.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to a contractor under subtitle B of title VI of the Merchant
Marine Act, 1936, as amended by this Act, upon enactment of this Act,
and shall apply to a contractor under subtitle A of title VI of that
Act, upon the earlier of--
(1) the date that a payment is made, under the Maritime
Security Program under subtitle B of that title to a contractor
under subtitle B of that title who is not party to an
operating-differential subsidy contract under subtitle A of
that title, with the Secretary of Transportation to cause
notice of the date of such payment to be published in the
Federal Register as soon as possible; or
(2) with respect to a particular contractor under the
operating-differential subsidy program under subtitle A of that
title, the date that contractor enters into a contract with the
Secretary under the Maritime Security Program established by
subtitle B of that title.
SEC. 6. AMENDMENT TO SHIPPING ACT, 1916.
Section 9 of the Shipping Act, 1916 (46 App. U.S.C. 808) is 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 of Transportation
under that Act, a vessel may be placed under a foreign registry,
without approval of the Secretary, if--
``(1)(A) the Secretary determines that 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 the foreign registry; and
``(B) the replacement vessel is not more than 10 years of
age on the date of that documentation;
``(2)(A) an application for an operating agreement under
subtitle B of title VI of the Merchant Marine Act, 1936 has
been filed with respect to a vessel which is eligible to be
included in the Maritime Security Fleet under section 651(b)(1)
of that Act; and
``(B) the Secretary has not awarded an operating agreement
with respect to that vessel within 90 days after the date of
that application;
``(3) a contract covering the vessel under subtitle A of
title VI of the Merchant Marine Act, 1936 has expired, and that
vessel is more than 15 years of age on the date the contract
expires; or
``(4) an operating agreement covering the vessel under
subpart B of title VI of the Merchant Marine Act, 1936 has
expired.''.
SEC. 7. CONSTRUCTION DIFFERENTIAL SUBSIDY RESTRICTIONS.
Title V of the Merchant Marine Act, 1936 (46 App. U.S.C. 1151 et
seq.) is amended by adding at the end the following new section:
``SEC. 512. LIMITATION ON RESTRICTIONS.
``Notwithstanding any other provision of law or contract, all
restrictions and requirements under sections 503, 506, and 802
applicable to a liner vessel constructed, reconstructed, or
reconditioned with the aid of construction-differential subsidy shall
terminate upon the expiration of the 25-year period beginning on the
date of the original delivery of the vessel from the shipyard.''.
SEC. 8. REGULATIONS.
(a) In General.--The Secretary of Transportation may prescribe
rules as necessary to carry out this Act and the amendments made by
this Act.
(b) Interim Rules.--The Secretary of Transportation may prescribe
interim rules necessary to carry out this Act and the amendments made
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 rules prescribed under
the authority of this subsection that are not earlier superseded by
final rules shall expire no later than 270 day after the date of
enactment of this Act.
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