[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1262 Introduced in Senate (IS)]


108th CONGRESS
  1st Session
                                S. 1262

 To authorize appropriations for fiscal years 2004, 2005, and 2006 for 
certain maritime programs of the Department of Transportation, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 13, 2003

  Mr. McCain  introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
 To authorize appropriations for fiscal years 2004, 2005, and 2006 for 
certain maritime programs of the Department of Transportation, 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 Administration 
Authorization Act of 2003''.

SEC. 2. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS 2004, 2005, 
              AND 2006.

    There are authorized to be appropriated to the Secretary of 
Transportation for the Maritime Administration--
            (1) for expenses necessary for operations and training 
        activities, not to exceed $104,400,000 for the fiscal year 
        ending September 30, 2004, $106,000,000 for the fiscal year 
        ending September 2005, and $109,000,000 for the fiscal year 
        ending 2006;
            (2) for administrative expenses related to loan guarantee 
        commitments under title XI of the Merchant Marine Act, 1936 (46 
        U.S.C. App. 1271 et seq.), $4,498,000 for each of fiscal years 
        2004, 2005, and 2006; and
            (3) for ship disposal, $11,422,000 for each of fiscal years 
        2004, 2005, and 2006.

SEC. 3. CONVEYANCE OF OBSOLETE VESSELS UNDER TITLE V, MERCHANT MARINE 
              ACT, 1936.

    Section 508 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1158) 
is amended--
            (1) by inserting ``(a) Authority To Scrap or Sell Obsolete 
        Vessels.--'' before ``If''; and
            (2) by adding at the end the following:
2    ``(b) Authority To Convey Vessels.--
            ``(1) In general.--Notwithstanding section 510(j) of this 
        Act, the Secretary of Transportation may convey the right, 
        title, and interest of the United States Government in any 
        vessel of the National Defense Reserve Fleet that has been 
        identified by the Secretary as an obsolete vessel of 
        insufficient value to warrant its further preservation, if--
                    ``(A) the recipient is a non-profit organization, a 
                State, Commonwealth, or possession of the United States 
                or any municipal corporation or political subdivision 
                thereof, or the District of Columbia;
                    ``(B) the recipient agrees not to use, or allow 
                others to use, the vessel for commercial transportation 
                purposes;
                    ``(C) the recipient agrees to make the vessel 
                available to the Government whenever the Secretary 
                indicates that it is needed by the Government;
                    ``(D) the recipient agrees to hold the Government 
                harmless for any claims arising from exposure to 
                asbestos, polychlorinated biphenyls, lead paint, or 
                other hazardous substances after conveyance of the 
                vessel, except for claims arising from use of the 
                vessel by the Government;
                    ``(E) the recipient has a conveyance plan and a 
                business plan, each of which have been submitted to and 
                approved by the Secretary; and
                    ``(F) the recipient has provided proof, as 
                determined by the Secretary, of resources sufficient to 
                accomplish the transfer, necessary repairs and 
                modifications, and initiation of the intended use of 
                the vessel.
            ``(2) Other equipment.--At the Secretary's discretion, 
        additional equipment from other obsolete vessels of the 
        National Defense Reserve Fleet may be conveyed to assist the 
        recipient with maintenance, repairs, or modifications.
            ``(3) Additional terms.--The Secretary may require any 
        additional terms the Secretary considers appropriate.
            ``(4) Delivery of vessel.--If conveyance is made under this 
        subsection the vessel shall be delivered to the recipient at a 
        time and place to be determined by the Secretary. The vessel 
        shall be conveyed in an `as is' condition.
            ``(5) Limitations.--If at any time prior to delivery of the 
        vessel to the recipient, the Secretary determines that a 
        different disposition of a vessel would better serve the 
        interests of the Government, the Secretary shall pursue the 
        more favorable disposition of the obsolete vessel and shall not 
        be liable for any damages that may result from an intended 
        recipient's reliance upon a proposed transfer.''.

SEC. 4. CARGO PREFERENCE UNDER TITLE IX.

    (a) Construction of U.S.-Flag Tank Ships.--Section 901(b)(1) of the 
Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1)) is amended by 
striking ``three years:'' and all that follows and inserting ``3 years. 
Notwithstanding the preceding sentence, the term `privately owned 
United States-flag commercial vessel' shall include a United States 
documented self-propelled tank vessel when the owner of such a vessel 
has notified the Maritime Administration in writing of the existence of 
an executed contract between the owner and a United States shipyard for 
the construction of 2 or more self-propelled, double hulled tank 
vessels to be documented under the laws of the United States, each to 
be capable of carrying more than 2 types of refined petroleum products. 
The preceding sentence shall apply to such a privately owned United 
States-flag commercial vessel for a 3-year period commencing on the 
date the contract is executed for construction of the vessels and shall 
continue to apply to the vessel throughout the 3-year period so long as 
the vessel remains documented under the laws of the United States.''.
    (b) Conforming Cargo Preference Year to Federal Fiscal Year.--
Section 901b(c)(2) of the Merchant Marine Act, 1936 (46 U.S.C App. 
1241f(c)(2)) is amended by striking ``1986.'' and inserting ``1986, the 
18-month period beginning April 1, 2002, and the 12-month period 
beginning October 1, 2003, and each year thereafter.''.

SEC. 5. EQUITY PAYMENTS BY OBLIGOR FOR DISBURSEMENT PRIOR TO 
              TERMINATION OF ESCROW AGREEMENT UNDER TITLE XI.

    (a) In General.--Section 1108 of the Merchant Marine Act, 1936 (46 
U.S.C. App. 1279a) is amended by adding at the end the following:
    ``(g) Payments Required Before Disbursement.--
            ``(1) In general.--No disbursement shall be made under 
        subsection (b) to any person until the total amount paid by or 
        for the account of the obligor from sources other than the 
        proceeds of the obligation equals at least 25 per centum or 
        12\1/2\ per centum, whichever is applicable, of the actual cost 
        of the vessel. The Secretary shall establish a system of 
        controls, including automated controls, to ensure that no loan 
        funds are disbursed to a shipowner or shipyard owner before the 
        shipowner or shipyard owner meets the requirement of the 
        preceding sentence.
            ``(2) Documented proof of progress requirement.--The 
        Secretary shall, by regulation, establish a transparent, 
        independent, and risk-based process for verifying and 
        documenting the progress of projects under construction before 
        disbursing guaranteed loan funds. At a minimum, the process 
        shall require documented proof of progress in connection with 
        the construction, reconstruction, or reconditioning of a vessel 
        or vessels before disbursements are made from the escrow fund. 
        The regulations shall require that the obligor provide a 
        certificate from an independent party certifying that the 
        requisite progress in construction, reconstruction, or 
        reconditioning has taken place.''.
    (b) Definition of Actual Cost.--Section 1101(f) of the Merchant 
Marine Act, 1936 (46 U.S.C. App. 1271(f)) is amended to read as 
follows:
    ``(f) Actual Cost Defined.--The term `actual cost' means the sum 
of--
            ``(1) all amounts paid by or for the account of the obligor 
        as of the date on which a determination is made under section 
        1108(g)(1); and
            ``(2) all amounts that the Secretary reasonably estimates 
        that the obligor will become obligated to pay from time to time 
        thereafter, for the construction, reconstruction, or 
        reconditioning of the vessel, including guarantee fees that 
        will become payable under section 1104A(e) in connection with 
        all obligations issued for construction, reconstruction, or 
        reconditioning of the vessel or equipment to be delivered, and 
        all obligations issued for the delivered vessel or 
        equipment.''.

SEC. 6. WAIVERS OF PROGRAM REQUIREMENTS UNDER TITLE XI.

    Section 1104A(d) of the Merchant Marine Act, 1936 (46 U.S.C. App. 
1274(d)) is amended by redesignating paragraph (4) as paragraph (5), 
and inserting after paragraph (3) the following:
            ``(4) The Secretary shall promulgate regulations concerning 
        circumstances under which waivers of or exceptions to otherwise 
        applicable regulatory requirements concerning financial 
        condition can be made. The regulations shall require that--
                    ``(A) a waiver of otherwise applicable regulatory 
                requirements be made only with the documented 
                concurrence of program offices with expertise in 
                economic, technical, and financial aspects of the 
                review process;
                    ``(B) the economic soundness requirements set forth 
                in paragraph (1)(A) of this subsection are met after 
                the waiver of the financial condition requirement; and
                    ``(C) the wavier shall provide for the imposition 
                of other requirements on the obligor designed to 
                compensate for the increased risk associated with the 
                obligor's failure to meet regulatory requirements 
                applicable to financial condition.''.

SEC. 7. PROJECT MONITORING UNDER TITLE XI.

    (a) Project Monitoring.--Section 1104A of the Merchant Marine Act, 
1936 (46 U.S.C. App. 1274) is amended by adding at the end the 
following:
    ``(k) Monitoring.-- The Secretary shall monitor the financial 
conditions and operations of the obligor on a regular basis during the 
term of the guarantee. The Secretary shall document the results of the 
monitoring on a quarterly or monthly basis depending upon the condition 
of the obligor. If the Secretary determines that the financial 
condition of the obligor warrants additional protections to the 
Secretary, then the Secretary shall take appropriate action under 
subsection (m) of this section. If the Secretary determines that the 
financial condition of the obligor jeopardizes its continued ability to 
perform its responsibilities in connection with the guarantee of 
obligations by the Secretary, the Secretary shall make an immediate 
determination whether default should take place and whether further 
measures should be taken to protect the interests of the Secretary 
while insuring that program objectives are met.''.
    (b) Separation of Duties and Other Requirements.--Section 1104A of 
the Merchant Marine Act, 1936 (46 U.S.C. App. 1274), as amended by 
subsection (a), is further amended by adding at the end the following:
    ``(l) Review of Applications.--No commitment to guarantee, or 
guarantee of, an obligation shall be made by the Secretary unless the 
Secretary certifies that a full and fair consideration of all the 
regulatory requirements, including economic soundness and financial 
requirements applicable to obligors and related parties, has been made 
through a documented independent assessment conducted by offices with 
expertise in technical, economic, and financial aspects of the loan 
application process.
    ``(m) Agreement With Obligor.--The Secretary shall include 
provisions in loan agreements with obligors that provide additional 
authority to the Secretary to take action to limit potential losses in 
connection with defaulted loans or loans that are in jeopardy due to 
the deteriorating financial condition of obligors. Provisions that the 
Secretary shall include in loan agreements include requirements for 
additional collateral or greater equity contributions that are 
effective upon the occurrence of verifiable conditions relating to the 
obligors financial condition or the status of the vessel or shipyard 
project.''.

SEC. 8. DEFAULTS UNDER TITLE XI.

    (a) Actions To Be Taken in Event of Default.--Section 1105 of the 
Merchant Marine Act, 1936 (46 U.S.C. App. 1275) is amended by adding at 
the end the following:
    ``(f) Default Response.--In the event of default on a obligation, 
the Secretary shall conduct operations under this title in a manner 
which--
            ``(1) maximizes the net present value return from the sale 
        or disposition of assets associated with the obligation;
            ``(2) minimizes the amount of any loss realized in the 
        resolution of the guarantee;
            ``(3) ensures adequate competition and fair and consistent 
        treatment of offerors; and
            ``(4) requires appraisal of assets by an independent 
        appraiser.''.
    (b) Restrictions.--
            (1) Section 1104A(d)(1)(A)(i) of the Merchant Marine Act, 
        1936 (46 U.S.C. App. 1274 (d)(1)(A)(i)) is amended by striking 
        ``equipment for which a guarantee under this title is in 
        effect;'' and inserting ``equipment;''.
            (2) Section 1104A(d)(1)(A) of the Merchant Marine Act, 1936 
        (46 U.S.C. App. 1274 (d)(1)(A)) is amended--
                    (A) by striking ``and'' after the semicolon in 
                clause (v);
                    (B) by striking ``safety.'' in clause (vi) and 
                inserting ``safety; and''; and
                    (C) by adding at the end the following:
                            ``(vii) the past performance of the 
                        shipyard doing the construction on commercial 
                        projects, including cost-over-runs and on-time 
                        performance.''.

SEC. 9. 270-DAY DECISION PERIOD.

    Section 1104A of the Merchant Marine Act, 1936 (46 U.S.C. App. 
1274), as amended by section 7, is amended by adding at the end the 
following:
    ``(n) 270-Day Decision.--The Secretary of Transportation shall 
approve or deny an application for a loan guarantee under this title 
within 270 days after the date on which the signed application is 
received by the Secretary.''.

SEC. 10. LOAN GUARANTEES UNDER TITLE XI.

    Section 1104A of the Merchant Marine Act, 1936 (46 U.S.C. App. 
1274) is amended--
            (1) by adding at the end of subsection (d)(1) the 
        following:
                    ``(C) The Secretary may make a determination that 
                aspects of an application under this title require 
                independent analysis to be conducted by third party 
                experts due to risk factors associated with markets, 
                technology, financial structures, or other risk factors 
                identified by the Secretary. Any independent analysis 
                conducted pursuant to this provision shall be performed 
                by a party chosen by the Secretary.
                    ``(D) Notwithstanding any other provision of this 
                title, the Secretary may make a determination that an 
                application under this title requires additional equity 
                because of increased risk factors associated with 
                markets, technology, financial structures, or other 
                risk factors identified by the Secretary.
                    ``(E) In determining whether to approve an 
                application under this title, the Secretary may 
                consider a proposed shipyard's past performance on 
                commercial projects including cost increases, quality 
                of work, and ability to meet work and delivery 
                schedules. After consideration of these factors the 
                Secretary may impose additional requirements on a 
                shipyard, require additional security, or disapprove an 
                application.
                    ``(F) The Secretary may charge and collect fees to 
                cover the costs of independent analysis under 
                subparagraph (C). Notwithstanding section 3302 of title 
                31, United States Code, any fee collected under this 
                subparagraph shall--
                            ``(i) be credit as an offesetting 
                        collection to the account that finances the 
                        administration of the loan guarantee program;
                            ``(ii) shall be available for expenditure 
                        only to pay the costs of activities and 
                        services for which the fee is imposed; and
                            ``(iii) shall remain available until 
                        expended.''; and
            (2) by striking ``(including for obtaining independent 
        analysis under subsection (d)(4)),'' in subsection (f).

SEC. 11. ANNUAL REPORT ON TITLE XI PROGRAM.

    The Secretary of Transportation shall report to Congress annually 
on the loan guarantee program under title XI of the Merchant Marine 
Act, 1936 (46 U.S.C. App. 1271 et seq.). The reports shall include--
            (1) the size, in dollars, of the portfolio of loans 
        guaranteed;
            (2) the size, in dollars, of projects in the portfolio 
        facing financial difficulties;
            (3) the number and type of projects covered;
            (4) a profile of pending loan applications;
            (5) the amount of appropriations available for new 
        guarantees;
            (6) a profile of each project approved since the last 
        report; and
            (7) a profile of any defaults since the last report.

SEC. 12. REVIEW OF TITLE XI LOAN GUARANTEE PROGRAM.

    (a) In General.--The Secretary of Transportation shall conduct a 
comprehensive assessment of the human capital and other resource needs 
in connection with the title XI loan guarantee program under the 
Merchant Marine Act, 1936 (46 U.S.C. App. 1271 et seq.). In connection 
with this assessment, the Secretary shall develop an organizational 
framework for the program offices that insures that a clear separation 
of duties is established among the loan application, project 
monitoring, and default management functions.
    (b) Program Enhancements.--
            (1) Section 1103(h)(1) of the Merchant Marine Act, 1936 (46 
        U.S.C. App. 1273(h)(1)) is amended--
                    (A) by striking ``subsection'' in subparagraph (A) 
                and inserting ``subsection, and update annually,'';
                    (B) by inserting ``annually'' before ``determine'' 
                in subparagraph (B);
                    (C) by striking ``and'' after the semicolon in 
                subparagraph (A);
                    (D) by striking ``category.'' in subparagraph (B) 
                and inserting ``category; and''; and
                    (E) by adding at the end the following:
                    ``(C) ensure that each risk category is comprised 
                of loans that are relatively homogenous in cost and 
                share characteristics predictive of defaults and other 
                costs, given the facts known at the time of obligation 
                or committment, using a risk category system that is 
                based on historical analysis of program data and 
                statistical evidence concerning the likely costs of 
                defaults or other costs that expected to be associated 
                with the loans in the category.''.
            (2) Section 1103(h)(2)(A) of that Act (46 U.S.C. App. 
        1273(h)(2)(A)) is amended by inserting ``and annually for 
        projects subject to a guarantee,'' after ``obligation,''.
            (3) Section 1103(h)(3) of that Act (46 U.S.C. App. 
        1273(h)(3)) is amended by adding at the end the following:
                    ``(K) A risk factor for concentration risk 
                reflecting the risk presented by an unduly large 
                percentage of loans outstanding by any 1 borrower or 
                group of affiliated borrowers.''.
    (c) Report.--The Secretary shall report to the Senate Committee on 
Commerce, Science, and Transportation and the House of Representatives 
Committee on Armed Services on the results of the development of an 
organizational framework under subsection (a) by January 2, 2004.
    (d) Funding.--It is the sense of the Congress that no further 
appropriations should be made for purposes of extending loan guarantees 
under the title XI loan guarantee program of the Merchant Marine Act, 
1936 (46 U.S.C. App. 1271 et seq.) until the Secretary of 
Transportation has developed sufficient internal controls and resource 
allocation to ensure that the loan guarantee program is efficiently and 
effectively fulfilling the purposes for which it was established and 
has updated default and recovery assumptions used in estimating the 
credit subsidy costs of the program to more accurately reflect the 
actual costs associated with the program.

SEC. 13. WAR RISK INSURANCE.

    (a) International Agreements.--Section 1205 of the Merchant Marine 
Act, 1936 (46 U.S.C. App. 1285) is amended by adding at the end the 
following:
    ``(c) Insuring International Operations.--The Secretary of 
Transportation is authorized, upon the request of the Secretary of 
Defense or any other agency, with the approval of the President, to 
make payments on behalf of the United States with regard to an 
international sharing of risk agreement or any lesser obligation on the 
part of the United States for vessels supporting operations of the 
North Atlantic Treaty Organization or similar international 
organization or alliance in which the United States is involved, 
regardless of registration or ownership, and without regard to whether 
the vessels are under contract with a department or agency of the 
United States. In order to segregate moneys received and disbursed in 
connection with an agreement authorized under this subsection, the 
Secretary of Transportation shall establish a subaccount within the 
insurance fund established under section 1208 of this Act.
    ``(d) Receipt of Contributions.--
            ``(1) In general.--Notwithstanding the provisions of 
        section 3302(b) of title 31, United States Code, if the 
        international agreements referenced in subsection (c) of this 
        section provide for the sharing of risks involved in mutual or 
        joint operations, contributions for losses incurred by the fund 
        subaccount or financed pursuant to section 1208 that are 
        received from foreign entities, may be deposited in the fund 
        subaccount.
            ``(2) Indemnity agreement.--Such risk sharing agreements 
        shall not affect the requirement that the Secretary of Defense 
        or a head of a department, agency, or instrumentality 
        designated by the President make an indemnity agreement with 
        the Secretary of Transportation under subsection (b) for a 
        waiver of premium on insurance obtained by a department, agency 
        or instrumentality of the United States Government.
            ``(3) Crediting of contributory payments.--If the Secretary 
        of Defense, or a designated head of a department, agency or 
        instrumentality, has made a payment to the Secretary of 
        Transportation on account of a loss, pursuant to an 
        indemnification agreement under subsection (b), and the 
        Secretary of Transportation subsequently receives from an 
        entity a contributory payment on account of the same loss, 
        pursuant to a risk sharing agreement referred to in paragraph 
        (1), the amount of the contribution shall be deemed to be a 
        credit in favor of the indemnifying department, agency, or 
        instrumentality against any amount that such department, 
        agency, or instrumentality owes or may owe to the Secretary of 
        Transportation under a subsequent indemnification agreement.''.
    (b) Permanent Budgetary Resource.--Section 1208 of the Merchant 
Marine Act, 1936 (46 U.S.C. App. 1288) is amended by adding at the end 
the following:
    ``(c) Authorization of Appropriations.--To the extent that the fund 
balance is insufficient to fund current obligations arising under this 
chapter, there are authorized to be appropriated to the Secretary of 
Transportation such sums as may be necessary to pay such 
obligations.''.
    (c) Clerical Amendment.--The section heading for section 1205 of 
the Merchant Marine Act, 1936 (46 U.S.C. App. 1285) is amended to read 
as follows:

``SEC. 1205. INSURANCE ON PROPERTY OF GOVERNMENT DEPARTMENTS, AGENCIES 
              AND INTERNATIONAL ORGANIZATIONS.''.

SEC. 14. MARITIME EDUCATION AND TRAINING.

    (a) Cost of Education Defined.--Section 1302 of the Merchant Marine 
Act, 1936 (46 U.S.C. App. 1295a) is amended--
            (1) by striking ``and'' after the semicolon in paragraph 
        (3);
            (2) by striking ``States.'' in paragraph (4)(B) and 
        inserting ``States; and''; and
            (3) by adding at the end the following:
            ``(5) the term `cost of education provided' means the 
        financial costs incurred by the Federal Government for 
        providing training or financial assistance to students at the 
        United States Merchant Marine Academy and the State maritime 
        academies, including direct financial assistance, room, board, 
        classroom academics, and other training activities.''.
    (b) Commitment Agreements.--Section 1303(e) of the Merchant Marine 
Act, 1936 (46 U.S.C. App. 1295b(e)) is amended--
            (1) by striking ``Academy, unless the individual is 
        separated from the'' in paragraph (1)(A);
            (2) by striking paragraph (1)(C) and inserting the 
        following:
            ``(C) to maintain a valid license as an officer in the 
        merchant marine of the United States for at least 6 years 
        following the date of graduation from the Academy of such 
        individual, accompanied by the appropriate national and 
        international endorsements and certification as required by the 
        United States Coast Guard for service aboard vessels on 
        domestic and international voyages;'';
            (3) by striking paragraph (1)(E)(iii) and inserting the 
        following:
                    ``(iii) as a commissioned officer on active duty in 
                an armed force of the United States, as a commissioned 
                officer in the National Oceanic and Atmospheric 
                Administration, or other maritime-related employment 
                with the Federal Government which serves the national 
                security interests of the United States, as determined 
                by the Secretary; or'';
            (4) by striking paragraph (2) and inserting the following:
    ``(2)(A) If the Secretary determines that any individual who has 
attended the Academy for not less than 2 years has failed to fulfill 
the part of the agreement required by paragraph (1)(A), such individual 
may be ordered by the Secretary of Defense to active duty in one of the 
armed forces of the United States to serve for a period of time not to 
exceed 2 years. In cases of hardship as determined by the Secretary, 
the Secretary may waive this provision in whole or in part.
            ``(B) If the Secretary of the Navy is unable or unwilling 
        to order an individual to active duty under subparagraph (A), 
        or if the Secretary of Transportation determines that 
        reimbursement of the cost of education provided would better 
        serve the interests of the United States, the Secretary may 
        recover from the individual the cost of education provided by 
        the Federal Government.'';
            (5) by striking paragraph (3) and inserting the following:
    ``(3)(A) If the Secretary determines that an individual has failed 
to fulfill any part of the agreement required by paragraph (1), as 
described in subparagraphs (1)(B), (C), (D), (E), or (F), such 
individual may be ordered to active duty to serve a period of time not 
less than 3 years and not more than the unexpired portion, as 
determined by the Secretary, of the service required by paragraph 
(1)(E). The Secretary, in consultation with the Secretary of Defense, 
shall determine in which service the individual shall be ordered to 
active duty to serve such period of time. In cases of hardship, as 
determined by the Secretary, the Secretary may waive this provision in 
whole or in part.
    ``(B) If the Secretary of Defense is unable or unwilling to order 
an individual to active duty under subparagraph (A), or if the 
Secretary of Transportation determines that reimbursement of the cost 
of education provided would better serve the interests of the United 
States, the Secretary may recover from the individual the cost of 
education provided in an amount proportionate to the unfulfilled 
portion of the service obligation as determined by the Secretary. In 
cases of hardship the Secretary may waive this provision in whole or in 
part.''; and
            (6) by redesignating paragraph (4) as paragraph (5) and 
        inserting after paragraph (3) the following:
    ``(4) To aid in the recovery of the cost of education provided by 
the Federal Government pursuant to a commitment agreement under this 
section, the Secretary may request the Attorney General to begin court 
proceedings, or the Secretary may make use of the Federal debt 
collection procedures in chapter 176 of title 28, United States Code, 
or other applicable administrative remedies.''.
    (c) Degrees Awarded.--Section 1303(g) of the Merchant Marine Act, 
1936 (46 U.S.C. App. 1295b(g)) is amended to read as follows:
    ``(g) Degrees Awarded.--
            ``(1) Bachelor's degree.--The Superintendent of the Academy 
        may confer the degree of bachelor of science upon any 
        individual who has met the conditions prescribed by the 
        Secretary and who, if a citizen of the United States, has 
        passed the examination for a merchant marine officer's license. 
        No individual may be denied a degree under this subsection 
        because the individual is not permitted to take such 
        examination solely because of physical disqualification.
            ``(2) Master's degree.--The Superintendent of the Academy 
        may confer a master's degree upon any individual who has met 
        the conditions prescribed by the Secretary. Any master's degree 
        program may be funded through non-appropriated funds. In order 
        to maintain the appropriate academic standards, the program 
        shall be accredited by the appropriate accreditation body. The 
        Secretary may make regulations necessary to administer such a 
        program.''.
    (d) Student Incentive Payments.--Section 1304(g) of the Merchant 
Marine Act, 1936 (46 U.S.C. App. 1295c(g)) is amended--
            (1) by striking ``$3,000'' in paragraph (1) and inserting 
        ``$4,000'';
            (2) in paragraph (3)(A) by striking ``attending, unless the 
        individual is separated by such academy;'' and inserting 
        ``attending;'';
            (3) by striking paragraph (3)(C) and inserting the 
        following:
            ``(C) to maintain a valid license as an officer in the 
        merchant marine of the United States for at least 6 years 
        following the date of graduation from such State maritime 
        academy of such individual, accompanied by the appropriate 
        national and international endorsements and certification as 
        required by the United States Coast Guard for service aboard 
        vessels on domestic and international voyages;'';
            (4) by striking paragraph (3)(E)(iii) and inserting the 
        following:
                    ``(iii) as a commissioned officer on active duty in 
                an armed force of the United States, as a commissioned 
                officer in the National Oceanic and Atmospheric 
                Administration, or in other maritime-related employment 
                with the Federal Government which serves the national 
                security interests of the United States, as determined 
                by the Secretary; or'';
            (5) by striking paragraph (4) and inserting the following:
    ``(4)(A) If the Secretary determines that an individual who has 
accepted the payment described in paragraph (1) for a minimum of 2 
academic years has failed to fulfill the part of the agreement required 
by paragraph (1) and described in paragraph (3)(A), such individual may 
be ordered by the Secretary of the Navy to active duty in the United 
States Navy to serve for a period of time not to exceed 2 years. In 
cases of hardship, as determined by the Secretary, the Secretary may 
waive this provision in whole or in part.
    ``(B) If the Secretary of the Navy is unable or unwilling to order 
an individual to active duty under subparagraph (A), or if the 
Secretary of Transportation determines that reimbursement of the cost 
of education provided would better serve the interests of the United 
States, the Secretary may recover from the individual the cost of 
education provided by the Federal Government.'';
            (6) by striking paragraph (5) and inserting the following:
    ``(5)(A) If the Secretary determines that an individual has failed 
to fulfill any part of the agreement required by paragraph (1), as 
described in paragraphs (3)(B), (C), (D), (E), or (F), such individual 
may be ordered to active duty to serve a period of time not less than 2 
years and not more than the unexpired portion, as determined by the 
Secretary, of the service required by paragraph (3)(E). The Secretary, 
in consultation with the Secretary of Defense, shall determine in which 
service the individual shall be ordered to active duty to serve such 
period of time. In cases of hardship, as determined by the Secretary, 
the Secretary may waive this provision in whole or in part.
    ``(B) If the Secretary of Defense is unable or unwilling to order 
an individual to active duty under subparagraph (A), or if the 
Secretary of Transportation determines that reimbursement of the cost 
of education provided would better serve the interests of the United 
States, the Secretary may recover from the individual the cost of 
education provided in an amount proportionate to the unfulfilled 
portion of the service obligation as determined by the Secretary. In 
cases of hardship the Secretary may waive this provision in whole or in 
part.''; and
            (7) by redesignating paragraphs (6) and (7) as paragraphs 
        (7) and (8), respectively, and inserting after paragraph (5) 
        the following:
    ``(6) To aid in the recovery of the cost of education provided by 
the Federal Government pursuant to a commitment agreement under this 
section, the Secretary may request the Attorney General to begin court 
proceedings, or the Secretary may make use of the Federal debt 
collection procedures in chapter 176 of title 28, United States Code, 
or other applicable administrative remedies.''.
    (e) Awards and Medals.--Section 1306 of the Merchant Marine Act, 
1936 (46 U.S.C. App. 1295e) is amended by adding at the end the 
following:
    ``(d) Awards and Medals.--The Secretary may establish and maintain 
a medals and awards program to recognize distinguished service, 
superior achievement, professional performance, and other commendable 
achievement by personnel of the United States Maritime Service.''.

SEC. 15. PROHIBITION AGAINST CARRYING GOVERNMENT IMPELLED CARGOES FOR 
              VESSELS WITH SUBSTANDARD SECURITY MEASURES.

    Section 2302(e)(1) of title 46, United States Code, is amended--
            (1) by inserting ``including violations for substandard 
        security measures,'' in subparagraph (A) after ``party,''; and
            (2) by inserting ``including violations for substandard 
        security measures,'' in subparagraph (B) after ``party,''.

SEC. 16. AUTHORITY TO CONVEY OBSOLETE VESSELS TO U.S. TERRITORIES AND 
              FOREIGN COUNTRIES FOR REEFING.

    (a) Section 3 of the Act entitled ``An Act to authorize 
appropriations for the fiscal year 1973 for certain maritime programs 
of the Department of Commerce, and for related purposes.'' (16 U.S.C. 
1220), Title 16, United States Code, is amended to read as follows:

``SEC. 3. PREPARATION OF VESSELS FOR USE AS ARTIFICIAL REEFS.

    ``(a) Guidance.--
            ``(1) In general.--Not later than September 30, 2003, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Transportation, acting through the Maritime 
        Administration, shall jointly develop guidance recommending 
        environmental best management practices to be used in the 
        preparation of vessels for use as artificial reefs. Before 
        issuing the guidance, the Administrator and the Secretary shall 
        consult with interested Federal and State agencies.
            ``(2) Requirements.--The guidance shall--
                    ``(A) recommend environmental best management 
                practices for the preparation of vessels that would 
                ensure that the use of vessels so prepared as 
                artificial reefs would be environmentally beneficial;
                    ``(B) promote the nationally consistent use of such 
                practices; and
                    ``(C) provide a basis for estimating the costs 
                associated with the preparation of vessels for use as 
                artificial reefs.
            ``(3) Use by federal agencies.--The guidance shall serve as 
        national guidance for Federal agencies preparing vessels for 
        use as artificial reefs.
            ``(4) Report.--The Secretary of Transportation shall submit 
        to Congress a report on the environmental best management 
        practices developed under paragraph (1) through the existing 
        ship disposal reporting requirements in section 3502 of the 
        Floyd D. Spence National Defense Authorization Act for Fiscal 
        Year 2001 (16 U.S.C. 5405 note). The report shall describe such 
        practices, and may include such other matters as the Secretary 
        considers appropriate.
    ``(b) Application Required.--
            ``(1) In general.--A State, commonwealth, possession of the 
        United States or foreign government may apply for any vessel of 
        the National Defense Reserve Fleet that has been identified by 
        the Secretary as an obsolete vessel of insufficient value to 
        warrant its further preservation in such a manner and form as 
        the Secretary shall prescribe. At a minimum, the application 
        shall state--
                    ``(A) the location at which the applicant proposes 
                to sink the vessel or vessels;
                    ``(B) the environmental goals to be achieved by the 
                use of the vessel or vessels; and
                    ``(C) that the applicant agrees to hold the 
                Government harmless for any claims arising from 
                exposure to asbestos, polychlorinated biphenyls, lead 
                paint, or other hazardous substances after conveyance 
                of the vessel, except for claims arising from use of 
                the vessel by the Government.
            ``(2) States.--
                    ``(A) Additional documentation required.--A State, 
                commonwealth, or possession of the United States shall 
also provide to the Secretary and the Administrator in its application 
documentation that the proposed use of the particular vessel or vessels 
requested will comply with all applicable water quality standards and 
will benefit the environment in the vicinity of the proposed reef, 
taking into account the guidance issued under subsection (a) and other 
appropriate environmental considerations.
                    ``(B) EPA certification.--Before any vessel may be 
                used as an artificial reef, the State, commonwealth, or 
                possession of the United States shall demonstrate to 
                the Environmental Protection Agency, and that Agency 
                shall determine in writing, that the use of the vessel 
                as an artificial reef at the proposed location will be 
                environmentally beneficial.
            ``(3) Foreign governments.--A foreign government shall also 
        provide to the Secretary and the Administrator in its 
        application--
                    ``(A) documentation of--
                            ``(i) how the proposed use of the vessel or 
                        vessels will benefit the environment; and
                            ``(ii) remediation that the vessel will 
                        undergo prior to use as an artificial reef; and
                    ``(B) certification that such remediation shall 
                take into account the guidance issued under subsection 
                (a).
            ``(4) Determination of environmental benefit.--No obsolete 
        vessel shall be conveyed unless the Maritime Administration and 
        the Environmental Protection Agency jointly determine, in 
        writing, that the proposed remediation measures will ensure 
        that use of the vessel as an artificial reef will be 
        environmentally beneficial. The contract conveying the vessel 
        or vessels from Maritime Administration to the foreign 
        government shall require the use of the remediation measures 
        determined by Maritime Administration and the Environmental 
        Protection Agency to ensure that use of the vessel or vessels 
        as an artificial reef will be environmentally beneficial.
    ``(c) Application With Other Law.--Nothing in this section shall be 
construed as affecting in any manner the application of any other 
provision of law, including laws relating to the conveyance of obsolete 
vessels, their distribution in commerce, or their use as artificial 
reefs.''.

SEC. 17. MAINTENANCE OF CURRENT SAINT LAWRENCE SEAWAY DEVELOPMENT 
              CORPORATION SAFETY RESPONSIBILITIES.

    Section 3(2) of the Ports and Waterways Safety Act (33 U.S.C. 
1222(2)) is amended by striking ``operating.'' and inserting 
``operating, except that `Secretary' means the Secretary of 
Transportation with respect to the applicability of this Act to the 
Saint Lawrence Seaway.''.

SEC. 18. USE OF INSURANCE PROCEEDS FOR REPAIRS AT UNITED STATES 
              MERCHANT MARINE ACADEMY.

    Notwithstanding section 3302 of title 31, United States Code, the 
Maritime Administration may deposit into its operations and training 
account (account number 69X1750) and use, for purposes otherwise 
authorized by law and in addition to amounts otherwise appropriated, 
the amount received by the Maritime Administration as insurance 
proceeds as a result of the fire that occurred on December 16, 1996, at 
the United States Merchant Marine Academy, Fitch Building.

SEC. 19. AVAILABILITY TO THE VESSEL OPERATIONS REVOLVING FUND OF FUNDS 
              FROM LAWSUITS AND SETTLEMENTS.

    The Vessel Operations Revolving Fund, created by the Third 
Supplemental Appropriations Act, 1951 (65 Stat. 59), shall, after the 
date of enactment of this Act, be credited with amounts received by the 
United States from final judgments and dispute settlements that arise 
from the operation of vessels in the National Defense Reserve Fleet, 
including the Ready Reserve Force. Funds credited to the Fund under 
this section shall be available until expended.
                                 <all>