[Congressional Record Volume 141, Number 193 (Wednesday, December 6, 1995)]
[House]
[Pages H14056-H14078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     MARITIME SECURITY ACT OF 1995

  Mr. QUILLEN. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 287 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 287

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 1(b) of rule 
     XXIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 1350) to amend the Merchant Marine Act, 1936 
     to revitalize the United States-flag merchant marine, and for 
     other purposes. The first reading of the bill shall be 
     dispensed with. General debate shall be confined to the bill 
     and shall not exceed one hour equally divided and controlled 
     by the chairman and ranking minority member of the Committee 
     on National Security. After general debate the bill shall be 
     considered for amendment under the five-minute rule. It shall 
     be in order to consider as an original bill for the purpose 
     of amendment under the five-minute rule the amendment in the 
     nature of a substitute recommended by the Committee on 
     National Security now printed in the bill. Each section shall 
     be considered as read. Before consideration of any other 
     amendment, it shall be in order without intervention of any 
     point of order to consider the amendment printed in the 
     report of the Committee on Rules accompanying this 
     resolution. That amendment may be offered only by the 
     chairman of the Committee on National Security or his 
     designee, shall be considered as read, may amend portions of 
     the bill not yet read for amendment, shall be debatable for 
     ten minutes equally divided and controlled by the proponent 
     and an opponent, shall not be subject to amendment, and shall 
     not be subject to a demand for division of the question in 
     the House or in the Committee of the Whole. During further 
     consideration of the bill for amendment, the chairman of the 
     Committee of the Whole may accord priority in recognition on 
     the basis of whether the Member offering an amendment has 
     caused it to be printed in the portion of the Congressional 
     Record designated for that purpose in clause 6 of rule XXIII. 
     Amendments so printed shall be considered as read. At the 
     conclusion of consideration of the bill for amendment the 
     Committee shall rise and report the bill to the House with 
     such amendments as may have been adopted. Any Member may 
     demand a separate vote in the House on any amendment adopted 
     in the Committee of the Whole to the bill or to the committee 
     amendment in the nature of a substitute. The previous 
     question shall be considered as ordered on the bill and 
     amendments thereto to final passage without intervening 
     motion except one motion to recommit with or without 
     instructions.

  The SPEAKER pro tempore. The gentleman from Tennessee [Mr. Quillen] 
is recognized for 1 hour.
  Mr. QUILLEN. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to the distinguished ranking member of the 
Committee on Rules, my good friend, the gentleman from Massachusetts 
[Mr. Moakley], pending which I yield myself such time as I may consume. 
During consideration of this resolution, all time yielded is for the 
purpose of debate only.
  (Mr. QUILLEN asked and was given permission to revise and extend his 
remarks and include therein extraneous material.)


                    amendment offered by mr. quillen

  Mr. Speaker, I ask unanimous consent that House Resolution 287 be 
amended at page 2, line 19, by striking ``10 minutes'' and inserting 
``20 minutes.'' The Committee on Rules approved 20 minutes of debate on 
the manager's amendment, but the resolution erroneously only provides 
for 10 minutes of debate.
  I understand that the minority has been consulted on this matter and 
that there is no objection to the unanimous consent request.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Tennessee?
  There was no objection.
  The text of the amendment is as follows:

       Amendment offered by Mr. Quillen:
       Page 2, line 19: Strike out ``ten minutes'' and insert ``20 
     minutes''.

  Mr. QUILLEN. Mr. Speaker, House Resolution 287 is an open rule 
providing for the consideration of H.R. 1350, the Maritime Security Act 
of 1995. The rule provides 1 hour of general debate divided equally 
between the chairman and ranking minority member of the Committee on 
National Security, and makes in order as an original bill for the 
purpose of amendment the committee amendment in the nature of a 
substitute, with each section considered as read.
  Under the rule, it shall first be in order to consider an amendment 
offered by the chairman of the National Security Committee or his 
designee. Consistent with the unanimous-consent request, such amendment 
shall be debatable for 20 minutes equally divided between a proponent 
and an opponent, and shall not be subject to amendment or demand for 
division of the question.

  Members who have preprinted their amendments in the Congressional 
Record prior to consideration may be given priority in recognition, and 
the rule provides one motion to recommit with or without instructions.
  Mr. Speaker, I proudly served during World War II aboard the aircraft 
carrier Antietam. Back then the United States had the largest 
commercial, privately owned merchant shipping fleet in the world. Now 
we only rank 16th. Complying with Federal laws and Coast Guard 
requirements have resulted in higher operating costs for U.S.-flag 
carriers, and as a result there are less than 150 U.S. flagged vessels. 
It is outrageous that we've let our merchant marine fleet diminish to 
this point.
  The Maritime Security Act will ensure the availability of a U.S. 
merchant marine fleet crewed by U.S. merchant seaman to provide sealift 
capacity for wartime or national emergencies.
  Without passage of this bill, the United States will have to rely on 
foreign-flag shipping to conduct foreign commerce and for any future 
military operations. We cannot stand by and allow this to happen. The 
Maritime Security Act will preserve a viable U.S.-flag merchant marine 
and domestic shipbuilding industry by creating new commercial 
opportunities for American shipbuilders and streamlining the regulatory 
process.
  Mr. Speaker, I commend the National Security Committee for bringing 
forth this bipartisan bill. It's taken almost 10 years for the Congress 
to enact a comprehensive bill to revitalize our Sinking Maritime 
Program.
  The future of our merchant marine fleet is at stake. We owe it to our 
country to see that all of our defense components--including our 
sealift capabilities--are second to none.
  I urge my colleagues to vote ``yes'' on this open rule and to support 
this bill.

[[Page H 14057]]

  Mr. Speaker, I include for the Record the following material from the 
Committee on Rules:

  THE AMENDMENT PROCESS UNDER SPECIAL RULES REPORTED BY THE RULES COMMITTEE,\1\ 103D CONGRESS V. 104TH CONGRESS 
                                            [As of December 1, 1995]                                            
----------------------------------------------------------------------------------------------------------------
                                                  103d Congress                        104th Congress           
              Rule type              ---------------------------------------------------------------------------
                                       Number of rules    Percent of total   Number of rules    Percent of total
----------------------------------------------------------------------------------------------------------------
Open/Modified-open \2\..............                 46                 44                 56                 66
Modified Closed \3\.................                 49                 47                 20                 24
Closed \4\..........................                  9                  9                  9                 10
                                     ---------------------------------------------------------------------------
      Total.........................                104                100                 85                100
----------------------------------------------------------------------------------------------------------------
\1\ This table applies only to rules which provide for the original consideration of bills, joint resolutions or
  budget resolutions and which provide for an amendment process. It does not apply to special rules which only  
  waive points of order against appropriations bills which are already privileged and are considered under an   
  open amendment process under House rules.                                                                     
\2\ An open rule is one under which any Member may offer a germane amendment under the five-minute rule. A      
  modified open rule is one under which any Member may offer a germane amendment under the five-minute rule     
  subject only to an overall time limit on the amendment process and/or a requirement that the amendment be     
  preprinted in the Congressional Record.                                                                       
\3\ A modified closed rule is one under which the Rules Committee limits the amendments that may be offered only
  to those amendments designated in the special rule or the Rules Committee report to accompany it, or which    
  preclude amendments to a particular portion of a bill, even though the rest of the bill may be completely open
  to amendment.                                                                                                 
\4\ A closed rule is one under which no amendments may be offered (other than amendments recommended by the     
  committee in reporting the bill).                                                                             


                          SPECIAL RULES REPORTED BY THE RULES COMMITTEE, 104TH CONGRESS                         
                                            [As of December 1, 1995]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                                 Disposition of 
    H. Res. No. (Date rept.)         Rule type           Bill No.              Subject                rule      
----------------------------------------------------------------------------------------------------------------
H. Res. 38 (1/18/95)...........  O................  H.R. 5...........  Unfunded Mandate        A: 350-71 (1/19/ 
                                                                        Reform.                 95).            
H. Res. 44 (1/24/95)...........  MC...............  H. Con. Res. 17..  Social Security.......  A: 255-172 (1/25/
                                                    H.J. Res. 1......  Balanced Budget Amdt..   95).            
H. Res. 51 (1/31/95)...........  O................  H.R. 101.........  Land Transfer, Taos     A: voice vote (2/
                                                                        Pueblo Indians.         1/95).          
H. Res. 52 (1/31/95)...........  O................  H.R. 400.........  Land Exchange, Arctic   A: voice vote (2/
                                                                        Nat'l. Park and         1/95).          
                                                                        Preserve.                               
H. Res. 53 (1/31/95)...........  O................  H.R. 440.........  Land Conveyance, Butte  A: voice vote (2/
                                                                        County, Calif.          1/95).          
H. Res. 55 (2/1/95)............  O................  H.R. 2...........  Line Item Veto........  A: voice vote (2/
                                                                                                2/95).          
H. Res. 60 (2/6/95)............  O................  H.R. 665.........  Victim Restitution....  A: voice vote (2/
                                                                                                7/95).          
H. Res. 61 (2/6/95)............  O................  H.R. 666.........  Exclusionary Rule       A: voice vote (2/
                                                                        Reform.                 7/95).          
H. Res. 63 (2/8/95)............  MO...............  H.R. 667.........  Violent Criminal        A: voice vote (2/
                                                                        Incarceration.          9/95).          
H. Res. 69 (2/9/95)............  O................  H.R. 668.........  Criminal Alien          A: voice vote (2/
                                                                        Deportation.            10/95).         
H. Res. 79 (2/10/95)...........  MO...............  H.R. 728.........  Law Enforcement Block   A: voice vote (2/
                                                                        Grants.                 13/95).         
H. Res. 83 (2/13/95)...........  MO...............  H.R. 7...........  National Security       PQ: 229-100; A:  
                                                                        Revitalization.         227-127 (2/15/  
                                                                                                95).            
H. Res. 88 (2/16/95)...........  MC...............  H.R. 831.........  Health Insurance        PQ: 230-191; A:  
                                                                        Deductibility.          229-188 (2/21/  
                                                                                                95).            
H. Res. 91 (2/21/95)...........  O................  H.R. 830.........  Paperwork Reduction     A: voice vote (2/
                                                                        Act.                    22/95).         
H. Res. 92 (2/21/95)...........  MC...............  H.R. 889.........  Defense Supplemental..  A: 282-144 (2/22/
                                                                                                95).            
H. Res. 93 (2/22/95)...........  MO...............  H.R. 450.........  Regulatory Transition   A: 252-175 (2/23/
                                                                        Act.                    95).            
H. Res. 96 (2/24/95)...........  MO...............  H.R. 1022........  Risk Assessment.......  A: 253-165 (2/27/
                                                                                                95).            
H. Res. 100 (2/27/95)..........  O................  H.R. 926.........  Regulatory Reform and   A: voice vote (2/
                                                                        Relief Act.             28/95).         
H. Res. 101 (2/28/95)..........  MO...............  H.R. 925.........  Private Property        A: 271-151 (3/2/ 
                                                                        Protection Act.         95).            
H. Res. 103 (3/3/95)...........  MO...............  H.R. 1058........  Securities Litigation   .................
                                                                        Reform.                                 
H. Res. 104 (3/3/95)...........  MO...............  H.R. 988.........  Attorney                A: voice vote (3/
                                                                        Accountability Act.     6/95).          
H. Res. 105 (3/6/95)...........  MO...............  .................  ......................  A: 257-155 (3/7/ 
                                                                                                95).            
H. Res. 108 (3/7/95)...........  Debate...........  H.R. 956.........  Product Liability       A: voice vote (3/
                                                                        Reform.                 8/95).          
H. Res. 109 (3/8/95)...........  MC...............  .................  ......................  PQ: 234-191 A:   
                                                                                                247-181 (3/9/   
                                                                                                95).            
H. Res. 115 (3/14/95)..........  MO...............  H.R. 1159........  Making Emergency Supp.  A: 242-190 (3/15/
                                                                        Approps.                95).            
H. Res. 116 (3/15/95)..........  MC...............  H.J. Res. 73.....  Term Limits Const.      A: voice vote (3/
                                                                        Amdt.                   28/95).         
H. Res. 117 (3/16/95)..........  Debate...........  H.R. 4...........  Personal                A: voice vote (3/
                                                                        Responsibility Act of   21/95).         
                                                                        1995.                                   
H. Res. 119 (3/21/95)..........  MC...............  .................  ......................  A: 217-211 (3/22/
                                                                                                95).            
H. Res. 125 (4/3/95)...........  O................  H.R. 1271........  Family Privacy          A: 423-1 (4/4/   
                                                                        Protection Act.         95).            
H. Res. 126 (4/3/95)...........  O................  H.R. 660.........  Older Persons Housing   A: voice vote (4/
                                                                        Act.                    6/95).          
H. Res. 128 (4/4/95)...........  MC...............  H.R. 1215........  Contract With America   A: 228-204 (4/5/ 
                                                                        Tax Relief Act of       95).            
                                                                        1995.                                   
H. Res. 130 (4/5/95)...........  MC...............  H.R. 483.........  Medicare Select          A: 253-172 (4/6/
                                                                        Expansion.              95).            
H. Res. 136 (5/1/95)...........  O................  H.R. 655.........  Hydrogen Future Act of  A: voice vote (5/
                                                                        1995.                   2/95).          
H. Res. 139 (5/3/95)...........  O................  H.R. 1361........  Coast Guard Auth. FY    A: voice vote (5/
                                                                        1996.                   9/95).          
H. Res. 140 (5/9/95)...........  O................  H.R. 961.........  Clean Water Amendments  A: 414-4 (5/10/  
                                                                                                95).            
H. Res. 144 (5/11/95)..........  O................  H.R. 535.........  Fish Hatchery--         A: voice vote (5/
                                                                        Arkansas.               15/95).         
H. Res. 145 (5/11/95)..........  O................  H.R. 584.........  Fish Hatchery--Iowa...  A: voice vote (5/
                                                                                                15/95).         
H. Res. 146 (5/11/95)..........  O................  H.R. 614.........  Fish Hatchery--         A: voice vote (5/
                                                                        Minnesota.              15/95).         
H. Res. 149 (5/16/95)..........  MC...............  H. Con. Res. 67..  Budget Resolution FY    PQ: 252-170 A:   
                                                                        1996.                   255-168 (5/17/  
                                                                                                95).            
H. Res. 155 (5/22/95)..........  MO...............  H.R. 1561........  American Overseas       A: 233-176 (5/23/
                                                                        Interests Act.          95).            
H. Res. 164 (6/8/95)...........  MC...............  H.R. 1530........  Nat. Defense Auth. FY   PQ: 225-191 A:   
                                                                        1996.                   233-183 (6/13/  
                                                                                                95).            
H. Res. 167 (6/15/95)..........  O................  H.R. 1817........  MilCon Appropriations   PQ: 223-180 A:   
                                                                        FY 1996.                245-155 (6/16/  
                                                                                                95).            
H. Res. 169 (6/19/95)..........  MC...............  H.R. 1854........  Leg. Branch Approps.    PQ: 232-196 A:   
                                                                        FY 1996.                236-191 (6/20/  
                                                                                                95).            
H. Res. 170 (6/20/95)..........  O................  H.R. 1868........  For. Ops. Approps. FY   PQ: 221-178 A:   
                                                                        1996.                   217-175 (6/22/  
                                                                                                95).            
H. Res. 171 (6/22/95)..........  O................  H.R. 1905........  Energy & Water          A: voice vote (7/
                                                                        Approps. FY 1996.       12/95).         
H. Res. 173 (6/27/95)..........  C................  H.J. Res. 79.....  Flag Constitutional     PQ: 258-170 A:   
                                                                        Amendment.              271-152 (6/28/  
                                                                                                95).            
H. Res. 176 (6/28/95)..........  MC...............  H.R. 1944........  Emer. Supp. Approps...  PQ: 236-194 A:   
                                                                                                234-192 (6/29/  
                                                                                                95).            
H. Res. 185 (7/11/95)..........  O................  H.R. 1977........  Interior Approps. FY    PQ: 235-193 D:   
                                                                        1996.                   192-238 (7/12/  
                                                                                                95).            
H. Res. 187 (7/12/95)..........  O................  H.R. 1977........  Interior Approps. FY    PQ: 230-194 A:   
                                                                        1996 #2.                229-195 (7/13/  
                                                                                                95).            
H. Res. 188 (7/12/95)..........  O................  H.R. 1976........  Agriculture Approps.    PQ: 242-185 A:   
                                                                        FY 1996.                voice vote (7/18/
                                                                                                95).            
H. Res. 190 (7/17/95)..........  O................  H.R. 2020........  Treasury/Postal         PQ: 232-192 A:   
                                                                        Approps. FY 1996.       voice vote (7/18/
                                                                                                95).            
H. Res. 193 (7/19/95)..........  C................  H.J. Res. 96.....  Disapproval of MFN to   A: voice vote (7/
                                                                        China.                  20/95).         
H. Res. 194 (7/19/95)..........  O................  H.R. 2002........  Transportation          PQ: 217-202 (7/21/
                                                                        Approps. FY 1996.       95).            
H. Res. 197 (7/21/95)..........  O................  H.R. 70..........  Exports of Alaskan      A: voice vote (7/
                                                                        Crude Oil.              24/95).         
H. Res. 198 (7/21/95)..........  O................  H.R. 2076........  Commerce, State         A: voice vote (7/
                                                                        Approps. FY 1996.       25/95).         
H. Res. 201 (7/25/95)..........  O................  H.R. 2099........  VA/HUD Approps. FY      A: 230-189 (7/25/
                                                                        1996.                   95).            
H. Res. 204 (7/28/95)..........  MC...............  S. 21............  Terminating U.S. Arms   A: voice vote (8/
                                                                        Embargo on Bosnia.      1/95).          
H. Res. 205 (7/28/95)..........  O................  H.R. 2126........  Defense Approps. FY     A: 409-1 (7/31/  
                                                                        1996.                   95).            
H. Res. 207 (8/1/95)...........  MC...............  H.R. 1555........  Communications Act of   A: 255-156 (8/2/ 
                                                                        1995.                   95).            
H. Res. 208 (8/1/95)...........  O................  H.R. 2127........  Labor, HHS Approps. FY  A: 323-104 (8/2/ 
                                                                        1996.                   95).            
H. Res. 215 (9/7/95)...........  O................  H.R. 1594........  Economically Targeted   A: voice vote (9/
                                                                        Investments.            12/95).         
H. Res. 216 (9/7/95)...........  MO...............  H.R. 1655........  Intelligence            A: voice vote (9/
                                                                        Authorization FY 1996.  12/95).         
H. Res. 218 (9/12/95)..........  O................  H.R. 1162........  Deficit Reduction       A: voice vote (9/
                                                                        Lockbox.                13/95).         
H. Res. 219 (9/12/95)..........  O................  H.R. 1670........  Federal Acquisition     A: 414-0 (9/13/  
                                                                        Reform Act.             95).            
H. Res. 222 (9/18/95)..........  O................  H.R. 1617........  CAREERS Act...........  A: 388-2 (9/19/  
                                                                                                95).            
H. Res. 224 (9/19/95)..........  O................  H.R. 2274........  Natl. Highway System..  PQ: 241-173 A:   
                                                                                                375-39-1 (9/20/ 
                                                                                                95).            
H. Res. 225 (9/19/95)..........  MC...............  H.R. 927.........  Cuban Liberty & Dem.    A: 304-118 (9/20/
                                                                        Solidarity.             95).            
H. Res. 226 (9/21/95)..........  O................  H.R. 743.........  Team Act..............  A: 344-66-1 (9/27/
                                                                                                95).            
H. Res. 227 (9/21/95)..........  O................  H.R. 1170........  3-Judge Court.........  A: voice vote (9/
                                                                                                28/95).         
H. Res. 228 (9/21/95)..........  O................  H.R. 1601........  Internatl. Space        A: voice vote (9/
                                                                        Station.                27/95).         
H. Res. 230 (9/27/95)..........  C................  H.J. Res. 108....  Continuing Resolution   A: voice vote (9/
                                                                        FY 1996.                28/95).         
H. Res. 234 (9/29/95)..........  O................  H.R. 2405........  Omnibus Science Auth..  A: voice vote (10/
                                                                                                11/95).         
H. Res. 237 (10/17/95).........  MC...............  H.R. 2259........  Disapprove Sentencing   A: voice vote (10/
                                                                        Guidelines.             18/95).         
H. Res. 238 (10/18/95).........  MC...............  H.R. 2425........  Medicare Preservation   PQ: 231-194 A:   
                                                                        Act.                    227-192 (10/19/ 
                                                                                                95).            
H. Res. 239 (10/19/95).........  C................  H.R. 2492........  Leg. Branch Approps...  PQ: 235-184 A:   
                                                                                                voice vote (10/ 
                                                                                                31/95).         
H. Res. 245 (10/25/95).........  MC...............  H. Con. Res. 109.  Social Security         PQ: 228-191 A:   
                                                    H.R. 2491........   Earnings Reform.        235-185 (10/26/ 
                                                                       Seven-Year Balanced      95).            
                                                                        Budget.                                 
H. Res. 251 (10/31/95).........  C................  H.R. 1833........  Partial Birth Abortion  A: 237-190 (11/1/
                                                                        Ban.                    95).            
H. Res. 252 (10/31/95).........  MO...............  H.R. 2546........  D.C. Approps..........  A: 241-181 (11/1/
                                                                                                95).            
H. Res. 257 (11/7/95)..........  C................  H.J. Res. 115....  Cont. Res. FY 1996....  A: 216-210 (11/8/
                                                                                                95).            
H. Res. 258 (11/8/95)..........  MC...............  H.R. 2586........  Debt Limit............  A: 220-200 (11/10/
                                                                                                95).            

[[Page H 14058]]
                                                                                                                
H. Res. 259 (11/9/95)..........  O................  H.R. 2539........  ICC Termination Act...  A: voice vote (11/
                                                                                                14/95).         
H. Res. 261 (11/9/95)..........  C................  H.J. Res. 115....  Cont. Resolution......  A: 223-182 (11/10/
                                                                                                95).            
H. Res. 262 (11/9/95)..........  C................  H.R. 2586........  Increase Debt Limit...  A: 220-185 (11/10/
                                                                                                95).            
H. Res. 269 (11/15/95).........  O................  H.R. 2564........  Lobbying Reform.......  A: voice vote (11/
                                                                                                16/95).         
H. Res. 270 (11/15/95).........  C................  H.J. Res. 122....  Further Cont.           A: 229-176 (11/15/
                                                                        Resolution.             95).            
H. Res. 273 (11/16/95).........  MC...............  H.R. 2606........  Prohibition on Funds    A: 239-181 (11/17/
                                                                        for Bosnia.             95).            
H. Res. 284 (11/29/95).........  O................  H.R. 1788........  Amtrak Reform.........  A: voice vote (11/
                                                                                                30/95).         
H. Res. 287 (11/30/95).........  O................  H.R. 1350........  Maritime Security Act.  .................
----------------------------------------------------------------------------------------------------------------
Codes: O-open rule; MO-modified open rule; MC-modified closed rule; C-closed rule; A-adoption vote; D-defeated; 
  PQ-previous question vote. Source: Notices of Action Taken, Committee on Rules, 104th Congress.               


  Mr. QUILLEN. Mr. Speaker, I reserve the balance of my time.
  Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume, 
and I thank the gentleman from Tennessee [Mr. Quillen], my colleague 
and dear friend, for yielding me the customary 30 minutes.
  Mr. Speaker, once again I am happy to see my Republican colleagues 
bringing an open rule to the floor.
  This open rule makes in order a bipartisan manager's amendment which 
will be offered by Mr. Spence and which I urge my colleagues to 
support.
  This amendment makes important changes in re-employment rights for 
merchant seamen, shipbuilding loan guarantees, and cargo preference 
requirements.
  And this bill does more than promote maritime commerce. It will 
ensure that during wartime we will not have to rely on ships flying 
flags other than the American flag to carry American troops and 
supplies.
  Mr. Speaker, a lot of people probably don't realize how badly we 
needed U.S.-flagged ships during the gulf war. We transported 79 
percent of the cargo and troops for that war on U.S.-flagged ships. If, 
heaven forbid, we ever find ourselves in that position again, we need 
to be sure that our ships can carry our troops and supplies.
  But, Mr. Speaker, our merchant marine fleet is shrinking. In World 
War II, the United States had the largest commercial shipping fleet in 
the entire world. Today we are the world's largest trading nation but 
15 countries have bigger fleets than we do.
  For a country with a maritime heritage as proud as ours, a heritage 
dating back to the earliest days of the Republic, this is unacceptable.
  The bill we are considering today will help preserve that heritage, 
strengthen our merchant marine fleet, and protect our troops.
  In 1948 there were 716 vessels flying the U.S. flag. Today less than 
150 vessels fly the U.S. flag in international trade. American ships 
are becoming an endangered species. Let's not let them become extinct.
  Without this maritime security program, maritime operators will have 
no incentive to fly the U.S. flag or hire U.S. merchant mariners.
  I urge my colleagues to support our merchant marines, support this 
rule, and support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. QUILLEN. Mr. Speaker, I yield such time as he may consume to the 
distinguished gentleman from New York [Mr. Solomon], chairman of the 
Committee on Rules.
  Mr. SOLOMON. Mr. Speaker, I thank the gentleman from Tennessee [Mr. 
Quillen], chairman emeritus of the Committee on Rules, my mentor, for 
yielding.
  Mr. Speaker, if there ever was a bill that was overdue in this House, 
it is this one.
  Mr. Speaker, this rule which passed in committee by voice vote should 
be passed overwhelmingly, as it provides for full and open 
consideration of some absolutely critical legislation.
  Mr. Speaker, the Maritime Security Act of 1955 is a vital first step 
toward revitalizing our merchant marine. Make no mistake about it, this 
bill does not provide all of the answers to fully restoring the 
strength of our merchant marine. But it is a huge first step in that 
direction.
  Mr. Speaker, our merchant marine industry is in desperate condition. 
Forty years ago, this Nation had a merchant fleet of over 4,000 
vessels. Today, that number is under 400. We are now in the sorry state 
where 96 percent of U.S. exports leave this country on foreign ships.
  Mr. Speaker, since 1981, we have lost one-third of our shipyards, 
50,000 shipyard jobs, and 100,000 jobs in shipyard supply companies.
  This situation must be reversed, and now. It must be reversed to 
preserve jobs, good jobs in the maritime industry. It must be reversed 
to maintain our trade competitiveness.
  And last and most important, it must be reversed to preserve a 
critical component of our national security apparatus.
  Remember Desert Shield, and Desert Storm? Remember the incredible 
sealift operations that were required? Unfortunately, a lot of that 
cargo had to go on foreign ships. Some of those ships didn't want to 
sail into dangerous waters and others were not sure they supported our 
position of defending Kuwait.
  Now, we have another major military operation beginning in Bosnia. 
Make no mistake about it, this is a mistaken mission, but one that will 
require a major amount of sealift as well.
  Mr. Speaker, every time our soldiers on the ground have to rely on a 
foreign ship for their supplies, they are in peril.
  We must act now to deal with this dangerous and unacceptable 
situation. If something is not done today to strengthen our Merchant 
Marine fleet the size of the fleet could drop to less than 100 ships. 
We cannot allow that to happen and that is where H.R. 1350 comes in.
  The National Security committee has done an outstanding job in 
drafting legislation which begins the process of restoring our merchant 
marine yet stays within the guidelines of the 7-year balanced budget.
  Unlike the current policy, H.R. 1350 employs a more market-based 
approach to helping the merchant marine.
  The legislation does away with the policy of paying foreign wage 
differentials and establishes a flat per ship rate.
  The Maritime Security Act eliminates outmoded regulations, which 
hamper our fleet's ability to operate. Regulations, such as the 
requirement to undergo Federal hearings in order to change a trade 
route or to replace older vessels with new ones.
  These changes will give our fleet more incentive to hold down costs, 
and more flexibility to operate and compete with foreign vessels.
  And it is most important to point out. The bill saves money. The 
program set up will have a spending limit of $100 million per year, as 
compared to the current level of roughly $210 million per year.
  And so importantly, Mr. Speaker, in exchange for the benefits they 
receive under the program, vessels which participate will be required 
to provide their services to the Secretary of Defense during a national 
emergency.
  Mr. Speaker, this is really the crux of the matter in my view. When 
our troops go into harm's way they need the assurance that their 
supplies will be there for them. We owe them nothing less.
  The U.S. merchant marine is a vital aspect of that supply source, and 
that is why we must pass this legislation today.

                              {time}  1345

  Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
California [Ms. Harman].
  (Ms. HARMAN asked and was given permission to revise and extend her 
remarks.)
  Ms. HARMAN. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  I rise in support of this open rule and of H.R. 1350. As a member of 
the maritime panel of the Committee on National Security, I want to 
commend 

[[Page H 14059]]
the gentleman from Virginia [Mr. Bateman], the ranking member, the 
gentleman from Mississippi [Mr. Taylor], for their leadership in 
bringing this bipartisan measure to the floor today.
  While I support the Maritime Security Act, I must note that efforts 
to improve the U.S. merchant marine industry thus far have been 
comprised of Band-Aids, when major reconstructive surgery is needed. 
Even this much needed bill before us is, regrettably, a Band-Aid 
dictated by fiscal restraints.
  I have established in my district, home to the Port of Los Angeles, a 
maritime advisory committee whose members share with me local 
perspectives on maritime issues. It is clear that a robust national 
maritime program is required to protect U.S. national security 
interests, many of which we just heard about from the gentleman from 
New York.
  I believe we must approach maritime defense issues in much the same 
way as we should approach nonmaritime defense issues. For both it is 
critical that we have an industrial base that can meet both commercial 
and military requirements as well as retain and build high-skilled, 
high-wage jobs on which that base relies. We can no longer afford to 
maintain two distinct industrial bases.
  Mr. Speaker, the future of our merchant marine is at stake. I urge my 
colleagues to carefully weigh the consequences of not having a merchant 
marine, consequences that affect our military readiness as well as our 
Nation's competitive and rightful place on the world's oceans. I urge 
support of the rule and for H.R. 1350 as amended by the bipartisan 
manager's amendment.
  Mr. QUILLEN. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia [Mr. Bateman], distinguished chairman of the Committee on 
National Security Subcommittee on Military Readiness.
  Mr. BATEMAN. Mr. Speaker, I thank the distinguished chairman emeritus 
as well as the chairman of the Committee on Rules and the distinguished 
ranking member and the gentleman from Massachusetts [Mr. Moakley], for 
the statements that they have made in support of H.R. 1350.
  I am extremely proud that this bill is finally coming to the floor of 
the House. I want to assure all of my colleagues that this bill comes 
here as a bipartisan measure. Beyond that, it even comes here as a 
bicameral measure, because there have been close consultations with our 
counterparts in the other body to the end that this year at last we 
will have a Maritime Security Act.
  Those who have preceded me, I think, have made it abundantly clear 
that the national security of the United States is the bedrock upon 
which this bill, this legislation is founded. No one who really thinks 
about our national security could possibly make an argument that our 
country is secure if we do not have an American-flag merchant marine. 
It is a sad fact of life that without this provision, we virtually 
assure the disappearance of the American flag from the oceans of the 
world. That has not just economic consequences for some ship operators, 
not just economic consequences for some American merchant mariners who 
would lose their jobs; it has enormous consequences for the very 
security of these United States.

  This Nation is a maritime power, and, as long as it remains a power, 
it must be a maritime power. Geography dictates that as much today as 
it did in 1781, when the French fleet, under the Count de Grasse, 
defeated the British fleet in the Battle of the Capes and sealed the 
doom of Cornwallis' army at Yorktown. From that date through all of our 
history, the United States's security has depended upon its maritime 
capability.
  As I said, we face the complete eradication from the seas of the 
world of an American-flag merchant marine unless we take this modest 
step.
  I would like to tell my colleagues that this was an enormous boost 
for the American-flag merchant marine and that it would entirely 
revitalize that merchant marine. That, unfortunately, I cannot tell 
you. But I cannot emphasize too strongly that there will be no America-
flag merchant marine without the Maritime Security Act. We are in the 
dismal situation where we speak to survival, not just revitalization.
  I thank the gentleman for yielding time to me.
  Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas [Mr. Gene Green].
  (Mr. GENE GREEN of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. GENE GREEN of Texas. Mr. Speaker, I thank my colleague from 
Massachusetts for yielding time to me and for allowing me to rise in 
support of not only the rule but the bill.
  The question before our House today is a very basic one. Will we act 
in an affirmative manner and support the continued existence of the 
U.S.-flag merchant marine by passing H.R. 1350, the Maritime Security 
Act of 1995. I for one strongly urge this needed measure because I 
believe that the continued existence of our U.S.-flag merchant fleet is 
of utmost importance to our Nation, both in our economic terms and our 
defense terms.
  The Port of Houston is in my congressional district and is the 
largest port for foreign tonnage. Throughout this last century, the 
Nation's Chief Executives and Congress have recognized the American 
merchant marine as a national asset. When the prosperity of the 
American shipping industry was at a low ebb, there was a general 
recognition by the President and Congress that it should not be allowed 
to be a wasted asset. Today our U.S.-flag merchant fleet is indeed at 
its lowest point.
  One can say that it is a fading asset. However, the enactment of H.R. 
1350 will prevent it from becoming a wasted asset, one which we as a 
nation cannot afford to loose.
  As the health of our U.S. merchant marine steadily became less 
robust, this body in a bipartisan effort overwhelmingly enacted 
maritime revitalization legislation in the last several sessions. 
Unfortunately, the technical considerations in the Senate precluded 
passage in that body. It is therefore imperative now that we enact H.R. 
1350 to provide the wherewithal to reverse the downward spiral in the 
American-flag fleet itself. This bill and rule deserves our 
overwhelming support.
  Positive and pragmatic action is need to nourish and sustain the 
growth of our maritime assets. We cannot afford to have any more U.S.-
flag vessels exit the American flag. If this legislation is not enacted 
by this body, be assured that many vessels will leave the American-
flag. Is that what we want? I hope not. I believe not.
  I, for one, wholeheartedly support the rule and H.R. 1350 and urge 
all my colleagues to also support it.
  Mr. QUILLEN. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Wisconsin [Mr. Roth].
  Mr. ROTH. Mr. Speaker, I thank my friend from Tennessee for yielding 
time to me.
  I am a strong proponent and supporter of this legislation. I 
congratulate the Members who worked so diligently on this legislation. 
They have done a remarkable job when one reads it. One provision that 
is vitally important to the Great Lakes ports, of course, I am very 
much in favor of. The current cargo preference law unfairly penalizes 
our ports. In effect, it shuts them out completely of shipping the 
Federal food aid.
  Now, since 1985, we have been working on this particular problem that 
is this preference which was expanded to the 75-percent level. Our 
local companies and the people in our area, especially on the Great 
Lakes, have suffered because of this. We used to be able to ship 
Wisconsin grown products from our own harbors. Of course, that was 
changed and we now have to truck these products, taken by rail, flown 
to other ports, mainly along the gulf coast.
  Obviously, this is very costly, very inefficient. It is estimated 
that this preference costs the taxpayers over half a billion dollars. 
So naturally when we correct these inequities, I am very much in favor 
of that. Furthermore, so are the taxpayers.
  Furthermore, Federal agencies in charge of the Public Law 480 program 
place meeting the cargo requirements ahead of fairness and equity in 
our ports.
  Now, on our Great Lakes, we are competitive. We are cost-effective. 
We are willing and able to do the work. 

[[Page H 14060]]
For example, one Green Bay firm, the Leicht Co., dropped from 150 
employees down to 20 employees since 1985 as a direct result of this 
preference inequity.
  Therefore, that is why I say this is a good piece of legislation 
because it correct that.
  Mr. Speaker, the Great Lakes cargo equity provision is about jobs and 
it is about fairness. We must return fairness to the maritime practices 
that affect the working people and the ports of the Great Lakes. The 
unfair cargo preference policy discriminates against local companies 
and working people, especially on the Great Lakes.
  Mr. Speaker, these unjust practices have cost thousands of jobs. So 
with this legislation we are now saying that we are standing up for the 
working people in America by passing some equity legislation again to 
create more jobs. This is a good provision for businesses. It is a good 
provision for the Great Lakes communities. But it is best of all for 
the American people, the American working people and the taxpayers of 
the United States who are going to save through these provisions over a 
half a billion dollars.
  I again congratulate the people who have worked so diligently and so 
hard on this legislation. this is the type of legislation we need to 
bring America into the 21st century and allow us to compete with any 
country in the world.

                              {time}  1400

  Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Hawaii [Mr. Abercrombie].
  (Mr. ABERCROMBIE asked and was given permission to revise and extend 
his remarks.)
  Mr. ABERCROMBIE. Mr. Speaker, before I begin, I would like to pay 
tribute, and I am sure that the gentleman from Virginia [Mr. Bateman] 
and the gentleman from Mississippi [Mr. Taylor] and the staff now of 
the merchant marine panel of the Committee on National Security, wants 
to recognize the work of the gentleman from Massachusetts [Mr. Studds] 
who helped to pioneer this work with the Merchant Marine Committee. 
Unfortunately this legislation, as has been noted at least indirectly 
in previous discussion, was killed in the other body, and so we find 
ourselves playing catch up today.
  Why is it so important then that we emphasize this bipartisan 
approach in the work that has been done by the gentleman from 
Massachusetts [Mr. Studds] and others over the years?
  Three things. It revitalizes, helps to revitalize, the U.S. shipping 
industry. It keeps U.S. ships and American merchant mariners afloat and 
helps guarantee the availability of supplies of troops overseas.
  In June of 1992, Mr. Speaker, General Colin Powell said, and I quote:

       Since I became Chairman of the Joint of Chiefs of Staff, I 
     have come to appreciate firsthand why our merchant marine has 
     long been called the fourth arm of defense.... The war in the 
     Persian Gulf is over, but the merchant marine's contribution 
     to our nation continues. In war, merchant seamen have long 
     served with valor and distinction by carrying critical 
     supplies and equipment to our troops in far away lands. In 
     peacetime, the merchant marine has another vital role-
     contributing to our economic security by linking us to our 
     trading partners around the world and providing the 
     foundation for our ocean commerce.

  As has been noted, the U.S. merchant maritime industry, once the 
world's leader is on the verge of being lost to foreign competition. 
That is why I regard this bill, Mr. Speaker, as only a first step, an 
interim step, and I am sure we are going to have bipartisan support to 
see that we extend this next year. We must move now to resuscitate, and 
that is the correct word, resuscitate, this vital national resource. In 
the time of crisis we cannot depend upon foreign-flag ships and crews 
for defense sealift and sustainment requirements.
  Mr. Speaker, this bill costs the taxpayers a fraction of what the 
Department of Defense would pay to build or charter the same amount of 
sealift. If we allow this industry to sink, and I mean that literally, 
we will lose more than just U.S.-flag ships. Our ability to effectively 
influence worldwide shipping standards which effect domestic and 
international trade will be diminished and, in fact, lost. A vital U.S. 
commercial fleet also means jobs for Americans. U.S. commercial fleet 
also means jobs for Americans. U.S.-flag ships abide by U.S. tax, 
environmental, safety, and labor laws and standards. American-crewed, 
American-made ships support U.S. interests.
  Mr. Speaker, I come here today to join with my colleagues on both 
sides of the aisle to say that we are just making the first step in 
seeing to it that we have a revitalized American merchant marine. I 
want to see American-built ships and American shipyards, American 
shippers with American crews, setting the standard for the rest of the 
world.
  Mr. QUILLEN. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from California [Mr. Cunningham].
  Mr. CUNNINGHAM. Mr. Speaker, I would say to my colleagues this is 
probably one of the most enjoyable times that we have. It is that, as 
my colleagues know, we did away with, I think the Republicans, with a 
pretty good committee in the Merchant Marine and Fisheries Committee 
both under Mr. Ford and Chairman Studds. It was one of the most 
bipartisan committees except with the tuna bill, Mr. Speaker, and we 
worked pretty well together, and that is what we are doing here. It is 
not about the 1996 elections, it is not about partisan politics. It is 
about American jobs, it is about American security, it is about 
national security, and it is about the betterment of this country.
  I take a look at what we can do, and I agree with the gentlewoman 
from California, Ms. Harman's analysis. It is that both under Democrat 
and Republican rule we have not done very much for our merchant marine 
fleet, and I think this is a small challenge to do that.
  I would like to thank specifically the gentleman from Virginia [Mr. 
Bateman] who serves not only in the maritime panel, the national 
security panel, but on the old Merchant Marine and Fisheries Committee. 
He has done the lion's share of fighting with our leadership to make 
sure that we can bring this up, and I sincerely mean that.
  As my colleagues know, during Desert Storm we had to go back, and we 
used a lot of our ships that had the old boilers. We had to find 
merchant marine and sailors that even knew how to use those, and they 
were not very effective. As my colleagues know, we lost millions of 
dollars in strapping materials, tiedown materials that just hold down 
the equipment to foreign ships during Desert Storm. We had to onload 
and offload several ships many, many times costing millions of dollars 
and the dollars saved. So I do not know if it is on my colleagues' 
checklist on when they support a bill or not, but it is bipartisan, it 
is taxpayer friendly, it is jobs, American jobs, both private and union 
jobs, and it gives national security strength.
   I would look at the items that also saved dollars. During Desert 
Storm it cost about a $174 per ton of cargo under non-U.S. flags. With 
U.S. flags it was $122. That is a 30-percent savings in those areas, 
and, when we are getting ready, against my personal will, to go into 
Bosnia, the C-17 and enhancing our merchant marine so that we can carry 
cargo and we can put American products on American ships with American 
seamen, I do not see how my colleagues could not support this, and I 
thank my colleagues on the other side of the aisle, and I thank the 
gentleman that was instrumental in doing this.
  Mr. MOAKLEY. Mr. Speaker, I yield 5 minutes to the gentleman from 
Illinois [Mr. Lipinski].
  (Mr. LIPINSKI asked and was given permission to revise and extend his 
remarks.)
  Mr. LIPINSKI. Mr. Speaker, as the former chairman of the now defunct 
Merchant Marine Subcommittee, I am keenly aware of the deteriorating 
health of the U.S. maritime industry. The number of U.S.-flag vessels 
has declined substantially, from 716 in 1948 to less than 150 today, as 
have the number of American officers and seamen trained to operate 
these vessels. Although the United States continues to be the world's 
largest trading Nation, the U.S. commercial shipping fleet now ranks 
16th in size in the world.
  Why is this? Why are we allowing foreign flag vessels to take over 
our Nation's commercial shipping fleet? U.S.-flag vessels must comply 
with Federal tax, environment, safety, and labor laws. Foreign flag 
vessels do not. Foreign flag vessels hire foreign citizen 

[[Page H 14061]]
crews. They do not have to pay their crew minimum wage or provide them 
with health, pension, or vacation benefits. They do not have to pay 
U.S. taxes. In addition, foreign flag vessels have absolutely no 
obligation to comply with the health and safety standards established 
by our government. In contrast, U.S. shipowners hire U.S. citizens and 
must comply with Federal laws protecting the welfare of the crew 
members. With these higher labor and other requirement costs, U.S. 
shipowners are at a serious disadvantage. No American company can 
successfully compete under these circumstances.
  We must take action to save the U.S. maritime industry. In addition 
to commercial shipping activities, privately owned vessels play a 
significant role in U.S. military readiness. The Defense Department 
relies on the domestic merchant marine for military sealift operations. 
In the recent Persian Gulf war, 95 percent of all equipment and 
supplies needed by American soldiers in the field was moved by 
sealift--one-third was shipped on privately owned U.S.-flag vessels. In 
time of crisis, we cannot depend on foreign ships and foreign crews for 
sealift and sustainment requirements. Why should we rely on Third World 
crews who have no allegiance to the U.S. to deliver equipment, medical 
supplies, and materials that American service men and women need as 
they fight to protect America's interests abroad? We should not and we 
cannot.
  The Maritime Security Act of 1995 ensures a maritime security fleet 
comprised of privately owned U.S.-flag, U.S. crewed vessels that we can 
readily rely on to carry our exports throughout the world and to carry 
our military supplies during a national emergency. I urge you to please 
vote in favor of H.R. 1350. We need American-crewed, American-made 
ships to support our national interests.
  Mr. QUILLEN. Mr. Speaker, I yield 4 minutes to the distinguished 
gentleman from Louisiana [Mr. Livingston], the chairman of the House 
Committee on Appropriations.
  (Mr. LIVINGSTON asked and was given permission to revise and extend 
his remarks.)
  Mr. LIVINGSTON. Mr. Speaker, I thank the gentleman from Tennessee 
[Mr. Quillen] for yielding me this time, and I want to congratulate 
him, the gentleman from New York [Mr. Solomon], and the gentleman from 
Massachusetts [Mr. Moakley] on what I think is an outstanding rule 
which I heartily support. I also want to thank and congratulate the 
chairman, the gentleman from Virginia [Mr. Bateman] and the ranking 
member, the gentleman from Mississippi [Mr. Taylor] on the Merchant 
Marine Subcommittee of the Committee on National Security for bringing 
forward this very important piece of legislation.
  I indeed rise to echo the comments of the gentleman from Illinois 
[Mr. Lipinski] who preceded me and rise in support of H.R. 1350, the 
Maritime Security Act of 1995. I understand that some Members and some 
organizations may have a problem spending tax dollars to support U.S.-
flag, U.S.-manned merchant marine vessels. But we cannot allow the 
United States, the world's preeminent economic and military power, to 
lose our presence in the world's trading lanes. We cannot lose our 
ability to supply and protect our troops during overseas deployments, 
one of which may well be beginning in the next few weeks.
  Mr. Speaker, sealift during Desert Storm-Desert Shield accounted for 
over 90 percent of the lift of supplies and logistics in those 
operations. Seventy-eight percent of all of the cargo for those 
operations was actually shipped on U.S. flags. What this bill does is 
try to maintain what we have left in terms of a U.S. merchant marine 
fleet. That is an issue which obviously from the debate that has 
transpired here already today has strong bipartisan support. Twenty-one 
freshman Republicans already expressed their support for this bill in a 
``Dear Colleague'' letter. The U.S. Navy League and other defense 
groups support the bill. The bill is also important to the defense of 
our country, so much so that the appropriation committees of the House 
and Senate have agreed to fund this program out of the defense 050 
account subject to passage of this authorization bill.
  I might add that bill will be before the House tomorrow. I would urge 
its passage, and any Members interested in this particular provision 
should also be inclined to vote for that Commerce-State-Justice 
appropriations bill.
  We included this provision in that bill, and I think that the 
sponsors of this particular bill were eager to get it passed into law 
because our own military commanders, our uniformed soldiers and 
sailors, continually tell us how very, very critical the U.S. merchant 
marine is to our Nation's security.
  Mr. Speaker, General Rutherford, the commander of our military's 
transportation command, testified before the Senate last July that his 
command supports the proposal for a maritime security program which 
assures access to the type and quantity of sealift capacity and 
mariners necessary to meet Department of Defense contingency 
operations. With the $46 million that is appropriated by the 
Subcommittee on Commerce, Justice, State, and Judiciary subject to this 
authorization, I would expect that the Department of Defense and the 
Department of Transportation will work together to expeditiously 
implement a program that will support the nucleus of an American 
merchant marine ship estimated to be about 52 ships of LASH, roll-on/
roll-off container vessels and other militarily useful U.S.-flag 
vessels.
  Mr. Speaker, H.R. 1350 provides what our military commanders say they 
need, and most important this revised and reformed program will spend 
50- to 60-percent less than programs that have existed before. So to 
preserve American jobs and to provide an effective American merchant 
marine I strongly urge an aye vote on the final passage of H.R. 1350. I 
urge an aye vote on this rule, and I urge an aye vote tomorrow on the 
rule and the bill involving the appropriations for Commerce-State-
Justice which will be before us again within 24 hours.

                              {time}  1415

  Mr. MOAKLEY. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York [Mr. Engel].
  Mr. ENGEL. Mr. Speaker, I thank my friend from Massachusetts for 
yielding me this time.
  Mr. Speaker, I rise in strong support of H.R. 1350, the Maritime 
Security Act, and also the rule pertaining to the act. This has been a 
very emotional Congress, and it is nice to see bipartisanship. Everyone 
is agreeing with this bill. It is a good bill. The legislation is 
critical to the future and continued existence of our Nation's 
commercial maritime fleet.
  As you are aware, last year the House overwhelmingly passed 
legislation to promote our maritime industry. Unfortunately, the 103d 
Congress adjourned before the Senate had the opportunity to cast its 
vote. During the intervening period, several U.S.-flag carriers have 
chosen a course of action which inevitably led to the reflagging of a 
number of U.S.-flag liner vessels. The decision to reflag was based on 
their perceived inability to compete successfully with their foreign 
counterparts who receive tremendous support and a great deal of 
incentives from their respective governments, while the U.S. Government 
promotional programs for this industry have been systematically 
reduced, eliminated, or attacked.
  While foreign nations recognize the importance of maintaining and 
supporting a strong national flag commercial maritime presence, the 
U.S.-flag merchant marine has been targeted by its adversaries because 
it has received government support.
  For each direct or indirect expression of support accorded to the 
U.S. fleet, the American merchant marine has contributed substantially 
to the economic and national security interests of our Nation. U.S.-
flag carriers manned by patriotic and dependable American crews 
responded each and every time our country called for their assistance 
in times of war and national emergency, in Haiti, Somalia, Desert 
Storm, and now in Bosnia. As we celebrate the 50th anniversary of the 
end of World War II, let us remember the thousands of U.S.-flag cargo 
ships that were lost during that war and the thousands of merchant 
mariners who lost their lives in the service of their country.
  Without the efforts of the U.S.-flag merchant marine and heroic 
actions of the men and women who manned those 

[[Page H 14062]]
vessels, perhaps the welfare of this Nation would not be as sound as it 
is today.
  Mr. Speaker, H.R. 1350 is critical to the future and continued 
existence of America's future maritime fleet. At the same time, the 
fleet is crucial to our national security. We therefore cannot justify 
turning our backs on this industry and its loyal work force and must 
enact the Maritime Security Act swiftly because it represents the best 
chance for Congress to preserve such an essential resource. It will 
maintain and create jobs, American products, American ships, American 
seamen, and workers.
  Mr. Speaker, I urge my colleagues to support the bill.
  Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Virginia [Mr. Pickett].
  (Mr. PICKETT asked and was given permission to revise and extend his 
remarks.)
  Mr. PICKETT. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, the deteriorating condition of the maritime industries 
of the United States, including the ship repair industry, is a serious 
and growing danger to U.S. economic and military security. Both our 
strategic sealift capability and our shipyard mobilization base are at 
risk and will be increasingly at risk without decisive action by this 
Congress and this President to enact appropriate remedial legislation.
  H.R. 1350 provides a practical, balanced, and cost-effective plan to 
put in place an integrated and plausible maritime policy. This 
legislation will begin the process to help our Nation restore and 
enhance its maritime industrial base.
  Members serving on the merchant marine panel have taken a hands-on 
approach in dealing with the sharply divergent interests that exist 
within the maritime industries. Chairman Bateman is to be commended for 
his leadership in getting to the floor a bill that is supported by the 
National Security Committee and the Department of Defense. H.R. 1350 
represents a major breakthrough in defining a plan to deal fairly and 
responsibly with the problem. It is the product of compromise and 
substantial agreement among the members of the National Security 
Committee.
  H.R. 1350 does carry a cost. The rapidly deteriorating situation 
cannot be remedied without expending a modest amount of national 
resources. Any course of action will have costs to our Nation. The 
challenge is to develop and implement policies that meet our 
requirements in the most cost-effective manner possible. H.R. 1350 
meets this test.
  Mr. Speaker, H.R. 1350 will enable our Nation to maintain and sustain 
a viable maritime industry. The U.S.- and foreign-flag ships trading in 
and out of U.S. ports will all benefit. Economic and security 
requirements dictate that our Nation have a strong merchant marine 
industry.
  What we have before us is the very minimum that must be done to begin 
the job of revitalizing our merchant fleet and ensuring the future of 
our shipbuilding and ship repair yards. I urge my colleagues to pass 
this legislation.
  Mr. QUILLEN. Mr. Speaker, I yield 3 minutes to the gentleman from 
California [Mr. Hunter] to close the debate.
  Mr. HUNTER. Mr. Speaker, I thank the gentleman for yielding me time, 
and thank him for the generous allocation of time.
  Mr. Speaker, I think everything that could be said about this bill 
has been said, but let me add my thanks to the gentleman from Virginia, 
Mr. Herb Bateman, and the gentleman from Mississippi, Mr. Gene Taylor, 
for their leadership in the merchant marine panel on the Committee on 
National Security, in being the driving forces to put this bill 
together and get it to the floor.
  This is a national security bill. A little earlier this year, General 
Robert Rutherford, commander of the U.S. Transportation Command, told 
Congress that we had to have our own and maintain our own sealift 
capability. His words were ``We can't plan on the availability of 
foreign-flag ships and mariners to go into a theater of war.''
  In the Persian Gulf operation, about 80 percent of the equipment that 
we brought to that theater was brought with sealift. About 20 percent 
was with airlift. It is a little known fact that actually a lot of the 
sealift that we brought were what I call rent-a-ships. They were ships 
that, if the foreign policy of this country had been scrutinized a 
little more severely by our allies, possibly would not have been 
available; or if the dangers to those ships as they entered the gulf 
area had been more severe, possibly those ships would not have been 
available to move American supplies and logistics capability into the 
gulf.
  This is a national security bill. One nice thing about it is the 
carriers that sign up for this program do not just supply ships, they 
supply the entire integrated service of transportation. They supply the 
terminal facilities, they supply the rail systems, they supply the 
services of the freight forwarders. So you can take equipment from a 
specific place in the United States and you can guarantee that it is 
going to be moved all the way through the system into the theater of 
war or operations that we are maintaining anywhere around the world.
  For those people who are free traders and say we should not be 
subsidizing anything, I would remind them that even Adam Smith, who was 
the father of free trade, said the one area where you have to guarantee 
by government expenditures that you have strength and have continuing 
capability is in the area of maritime security.
  If we do not expend these funds, and we are making a fairly dramatic 
cut from the program that existed before, we are not going to have that 
guarantee that when the men and women of this country in uniform go to 
project power around the world, that the equipment that they need will 
be there for them. We are making that guarantee with this bill.
  Once again, my commendations to the gentleman from Mississippi, Mr. 
Gene Taylor, and to the gentleman from Virginia, Mr. Herb Bateman, the 
great chairman of the panel, for all their hard work.
  Mr. MOAKLEY. Mr. Speaker, I yield back the balance of my time.
  Mr. QUILLEN. Mr. Speaker, I urge adoption of the rule and the passage 
of the bill.
  Mr. Speaker, I have no further requests for time, I yield back the 
balance of my time, and I move the previous question on the resolution.
  The previous question was ordered.
  The resolution, as amended, was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution 
287 and rule XXIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the consideration of the 
bill, H.R. 1350.

                              {time}  1424


                     in the committee of the whole

  Accordingly the House resolved itself into the Committee of the Whole 
House on the State of the Union for the consideration of the bill, H.R. 
1350, to amend the Merchant Marine Act, 1936 to revitalize the United 
States-flag merchant marine, and for other purposes, with Mr. Dickey in 
the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from South Carolina [Mr. Spence] will 
be recognized for 30 minutes, and the gentleman from Mississippi [Mr. 
Taylor] will be recognized for 30 minutes.
  The Chair recognizes the gentleman from South Carolina [Mr. Spence].
  Mr. SPENCE. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. SPENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. SPENCE. Mr. Chairman, before I begin, I want to commend the 
chairman of this committee's Readiness Subcommittee and the committee's 
special oversight panel on the Merchant Marine, the gentleman from 
Virginia [Mr. Bateman] for his leadership and hard work on this 
important legislation. Likewise, the panel's ranking Democrat member, 
the gentleman from Mississippi [Mr. Taylor], should be commended for 
his leadership on this bill.
  H.R. 1350 establishes a Maritime Security Program to ensure that this 
country retains privately owned, U.S.-

[[Page H 14063]]
flag and U.S.-crewed vessels to provide a sustainment sealift 
capability in time of war, national emergency, or when our national 
security interests require.
  Over the years our effort to revitalize this capability has been a 
bipartisan one. I am proud to say that our committee, which recently 
received jurisdiction over this issue, has continued this bipartisan 
tradition. Maintaining our U.S.-flag fleet capable of supplying U.S. 
troops abroad is too important to get bogged down in partisanship.
  Over 80 percent of U.S. sustainment cargo in Desert Storm moved by 
sea and on vessels which are covered under this bill. Without this 
legislation, our sealift in the future will likely move on foreign-
owned and foreign-flag vessels crewed by citizens from Third World 
countries. That scenario is not acceptable to me as we all have a 
responsibility for assuring that our military is supplied in as timely 
and efficient a manner as possible. This bill helps to assure this 
goal.
  I urge my colleagues' support for this bill and for the manager's 
amendment which will be offered at the conclusion of general debate.
  Before reserving the balance of my time, I would like to announce 
that Chairman Bateman will serve as manager of the bill on this side of 
the aisle.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, let me begin by thanking the ranking Democrat, the 
gentleman from California [Mr. Dellums], for the opportunity to manage 
this bill. The gentleman in his time as chairman of the Committee on 
National Security did a magnificent job of looking after the interests 
of our Nation's shipbuilders and all of our maritime interests, and I 
think to a very large extent the bipartisan cooperation we are seeing 
today is an extension of what has been going on for the past 2 years 
when he was the chairman.
  Mr. Chairman, on the day that I was born, the United States was the 
world's undisputed maritime power. Today, we still have the world's 
largest and most capable Navy. However, our Nation's merchant fleet is 
one of the smallest and our ships are some of the oldest in the world. 
And to be honest, there is not enough commercial shipbuilding on order 
to maintain the American merchant fleet for another decade.
  On Saturday, the U.S. Navy will commission our Nation's newest Nimitz 
class nuclear aircraft carrier CVN-74, the John C. Stennis. This 
carrier is named in honor of a great Mississippian and American who 
served as the chairman of the Senate Armed Services Committee and the 
Senate Appropriations Committee.
  All Mississippians take great pride in having this magnificent ship 
named in honor of one of our State's most distinguished citizens.
  Unfortunately, the John C. Stennis is one of only a handful of ships 
that were built in our Nation this year. And everyone of those ships 
were built for the Department of Defense. Not one large oceangoing ship 
was built in this country last year.
  By contrast, the Japanese built 28 percent of all the merchant ship 
tonnage this year. The South Koreans built 35 percent of the merchant 
ship tonnage. The six largest shipbuilders in the United States did not 
even make the list--together they did not deliver a single merchant 
ship.
  I wish that I could tell you that things are better with regard to 
the U.S. flag merchant fleet. Unfortunately, I cannot. Our Nation's 
privately owned U.S. flagged merchant fleet is old, small, and 
shrinking.
  In 1985, the U.S. flag merchant fleet consisted of 477 tankers and 
dry cargo vessels. By 1995 that number had dropped 363. It is estimated 
that in the year 2000--5 years from now--there will be only 130 
merchant ships in the U.S. fleet.
  Economically, that means that we are losing jobs for our merchant 
mariners, shipbuilders, steelworkers, and the tens of thousands of 
Americans who work in related industries.
  Militarily, it means that the world's finest soldiers, sailors, 
marines, and airmen have to depend on foreign ships and crews for their 
supplies. Over 90 percent of everything that was shipped to support our 
troops during desert shield and desert storm was delivered by sea.
  Yet, in a nearly flawless war, when not a single American supply ship 
was damaged or sunk by our enemy--our great Nation had to charter over 
80 foreign flag ships to supply our troops. Not because we wanted to, 
but because there simply were not enough American ships to supply and 
arm our Nation's Armed Forces.
  And, without the assistance of these foreign ships, the world's 
greatest fighting force would have been helpless for the lack of fuel, 
food, weapons, and ammunition.
  I'd like to be able to tell you that the measure before us today 
solves all of these problems. Unfortunately, it doesn't fix any of 
them. It does, however, buy us some time. It helps to keep what is left 
of the U.S. flag merchant fleet in service for another year. It 
continues the Title 11 Shipbuilding Loan Program for another year. It 
gives our Nation's merchant mariners who are recalled to man our 
Nation's ships in times of national emergencies the same re-employment 
rights as our national guardsmen and Armed Forces reservists.

                              {time}  1430

  Mr. Chairman, on a personal note, I hope that next year the chairman 
of our panel, the gentleman from Virginia [Mr. Bateman], and I can 
stand before this body with a much more ambitious bill. I think it is 
very safe to say that Mr. Bateman had to learn the job of being in the 
majority and we Democrats had to learn the job of being in the 
minority. But I hope that having had a year of experience in these 
positions, and having had a number of very prominent Members of this 
body speak on behalf of the American Merchant Marine, I hope that Mr. 
Johnson was taking names, and I hope Mr. Braver and Mr. Peranich were 
taking names, because I think we would be very smart in the next few 
weeks to hunt these people down and get them to cosponsor the very 
ambitious shipbuilding and ship operating bill for the United States of 
America for next year.
  Mr. Chairman, I rise in support of the bill and I reserve the balance 
of my time.
  Mr. BATEMAN. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. BATEMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. BATEMAN. Mr. Chairman, these remarks will be much more brief than 
what is in the prepared statement. So much has been said already in the 
course of the discussion on the rule about this bill and its merits, I 
do not want to unduly trespass upon the time of my colleagues to 
further extol it.
  There are very few simple bottom-line things that I hope all Members 
will focus upon as they come to the floor for the vote on this bill. 
First of all, we have reformed an existing Merchant Marine 
subsidization program. It is less than one-half the cost of the 
preexisting program. We are providing a sealift surge capability for 
our national security at a cost of no more than $100 million a year, 
when the Department of Defense has estimated that to provide that same 
amount of backup national security sealift capability would, by any 
other methodology, cost the taxpayers of America $800 million a year.
  Mr. Chairman, we are not bringing to the floor an entitlement 
program, we are bringing to the floor a program which will be sustained 
on the basis of an annual appropriation, not an entitlement. As I have 
previously indicated, a program that is less than one-half the cost of 
the existing program.
  Mr. Chairman, when we have heard so repeatedly from people who are so 
very, very knowledgeable that we are here today dealing in this bill 
not with the creation of a robust American Merchant Marine but the very 
survival of the American Merchant Marine, I would hope that when 
Members come to the floor of the House, unless they believe it is a 
matter of indifference whether or not an American flagged Merchant 
Marine survives, that they will be here in support of H.R. 1350.
  Mr. Chairman, let me begin by thanking the gentleman from Mississippi 
[Mr. Taylor] for his very able assistance in producing a bill which 
enjoys strong bipartisan support. I would also like to express my 
appreciation to the National Security Committee's very able chairman, 
Chairman Floyd Spence and to the 

[[Page H 14064]]
very able ranking member, the Honorable Ron Dellums. Without each of 
these members support and assistance we would not be before the House 
today.
  H.R. 1350 is a very simple and very modest proposal. Support for H.R. 
1350 will be a statement by this body and by its Members that you wish 
to see the American flag continue to fly from vessels carrying this 
Nation's commerce. But Mr. Chairman even more important, a vote to 
support H.R. 1350 will assure that our fighting men and women will have 
the supplies and food and ammunition to sustain their efforts when they 
are operating in some distant land. The lessons of Desert Storm should 
not be forgotten so quickly.
  I recognize that there are those who have in the past questioned the 
need for a U.S. merchant fleet to support our troops in time of war, 
national emergency or where the national security dictates our 
involvement. Those same individuals had their eyes opened during Desert 
Storm when the entire free world was mobilized to fight one common 
enemy. Over 80 percent of our sustainment cargo moved by sea. During 
that conflict we were forced to use foreign vessels to supplement the 
available U.S. flag tonnage. Our country was indeed fortunate that we 
were engaging an enemy that was so vilified by the entire civilized 
world. The next time circumstances could be different. We may not have 
a unified world effort.
  Let me take just a moment to comment on some key elements of this 
program and how it differs from the current program. As many of you 
know the current program is designed as an entitlement program. That 
program was very expensive. This bill prohibits the granting of any 
future contracts under this entitlement program. That program will 
essentially expire next year. H.R. 1350 replaces the old program which 
had steadily rising payments to the vessel operators with specific set 
payments each year--$2.3 million the first year, declining the next 
year to $2.1 million. It is estimated that this program is more than 50 
percent cheaper than the current entitlement program. Just as important 
as the reduction in payments to the vessel operators, is the fact that 
the funding of this program is subject to annual appropriations. I wish 
to emphasize that point. If this program is not working or if we are 
not retaining the assets we need, then Congress can in any year of this 
10 year program vote to end it at that point in time.
  I would like to make one more point before I yield to the gentleman 
from Mississippi. The Congressional Budget Office has scored the annual 
cost of this program at $100 million, with the first year cost at $46 
million. This is as I have said, roughly one-half the cost of the 
current program. For the Defense Department to build or buy this same 
sealift capacity, it has been estimated that it would cost over $5 
billion. Just to maintain that type of fleet and to man it with skilled 
mariners would easily exceed the annual cost of this Maritime Security 
Program. In short I believe we have designed a program that reflects 
the budget restraints we are operating under but at the same time 
serves to fill a critical shortfall in the sealift capability that is 
essential to our national security.
  Mr. STUMP. Mr. Chairman, will the gentleman yield?
  Mr. BATEMAN. Mr. Chairman, I am pleased at this time to yield to the 
gentleman from Arizona [Mr. Stump], the chairman of the Committee on 
Veterans' Affairs, for purposes of a colloquy.
  Mr. STUMP. Mr. Chairman, I thank the gentleman for yielding, and for 
the purposes of clarifying the bill's reemployment rights provision, I 
would like to enter into a colloquy with the gentleman.
  My understanding is that the administration, investigation and 
enforcement provided for in H.R. 1350 for reemployment rights for 
Merchant Mariners will be done by the Department of Transportation, not 
the Department of Labor; is that correct?
  Mr. BATEMAN. Yes, that is correct. Administration, investigation and 
enforcement will all be performed by the Department of Transportation, 
and to the extent necessary, by the Department of Justice. Nothing will 
be done by the Department of Labor, and these provisions will not 
impact upon that Department.
  Mr. STUMP. Mr. Chairman, could the gentleman also confirm my 
understanding that this bill in no way gives veterans status to 
merchant mariners?
  Mr. BATEMAN. That is also correct, it would not.
  Mr. STUMP. Mr. Chairman, I thank the gentleman for yielding and I 
urge my colleagues to support this bill.
  Mr. BATEMAN. Mr. Chairman, I thank the gentleman and I reserve the 
balance of my time.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield 4 minutes to the 
gentlewoman from Oregon [Ms. Furse], an active member of the former 
Committee on Merchant Marine and Fisheries.
  Ms. FURSE. Mr. Chairman, I thank my colleague for yielding me this 
time.
  Mr. Chairman, I rise today in very strong support of H.R. 1350, the 
Maritime Security Act. As someone who served on both the Committee on 
Merchant Marine and Fisheries, and the Committee on National Security, 
and who worked very hard to gain passage of legislation to restore our 
Nation's maritime industry, I know just how important this legislation 
is to preserving but also to enhancing our sealift force and 
maintaining an international commercial transportation capability.
  H.R. 1350 is important legislation because it is designed to close 
two gaping holes in the security of America, one in our defensive 
structure and the other in our economic base. As a Congresswoman from 
Oregon, the maritime industry is absolutely vital to my community. The 
coastal areas and the Columbia River are key players in our local 
economy as well as bearers of our Nation's heritage.
  The people who make their living in the maritime industry have a 
proud history, but, unfortunately, today there are thousands of people 
who have lost their jobs or who are struggling to make ends meet as a 
result of the massive decline in the maritime industry. That decline 
has come about since 1981.

  The legislation before us today, Mr. Chairman, is a first step in 
saving two of America's most precious resources, domestic shipyards and 
the U.S.-flagged Merchant Marine. This bill will preserve and also 
create jobs for American seafarers and shipbuilding workers. And we 
have the best in this country, the best seafarers and the best 
shipbuilding workers. These industries will receive genuine 
improvements that will make a real difference.
  These are the industries we need to compete in a global market. 
Continued American leadership in international trade and a sound 
national defense both rely heavily on our ability to transport goods 
and other supplies overseas, including our precious men and women in 
uniform. Today, unfortunately, we are losing that ability.
  Mr. Chairman, H.R. 1350 makes a number of other important reforms in 
merchant seaman reemployment rights and in cargo preference 
requirements that will increase efficiencies and, ultimately, will 
reduce costs. These reforms are long overdue.
  As I said earlier, I have served on both of these important 
committees. I know how important this bill is to our national economic 
and defensive securities, but it is also important to the people we 
serve, the people who work in the maritime industry. Their families, 
their communities, their lives are also at stake, as is our security, 
both national and economic.
  I find it rather disheartening, Mr. Chairman, to be here repeating 
something I said on this same floor in 1993, but I am glad to be able 
to be here to speak again in support of this great bill. If we do not 
put together and implement a sensible maritime policy as soon as 
possible, there will not be a maritime industry left to salvage. We 
must get H.R. 1350 passed as soon as possible.
  I really want to congratulate the sponsors of this bill and I urge 
all my colleagues to support H.R. 1350.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield 4 minutes to the 
distinguished gentleman from New Jersey [Mr. Torricelli].
  Mr. TORRICELLI. Mr. Chairman, I thank the gentleman for yielding me 
this time.
  Mr. Chairman, Napoleon once said that an army marches on its stomach. 
A great deal has changed in history and the security of nations, but 
Napoleon's observation is as true today as it was so many years ago. In 
the Persian Gulf war, the United States found that it had the fighting 
men, it had the world's finest equipment, we had the fighting will, but 
we lacked the ability to get our forces to the area of combat safely, 
quickly and efficiently.
  For more than 40 years, Mr. Chairman, we have witnessed the rapid but 
the certain deterioration in the merchant marine capabilities of the 
United States from the world's largest fleet. In 1945 there were 2,000 
flagged vessels of our country, there are today less than 350. To some, 
it is a loss of pride; to others, an indication of an unfavorable 

[[Page H 14065]]
economic trend. But in the final analysis, there is a more important 
measure of this deterioration in our presence in the world seas. It is 
our inability in times of national crisis to ensure that our national 
interests are protected.
  Today, Mr. Chairman, the committee deserves to be complimented 
because H.R. 1350, the Maritime Security Act, can at least assure the 
situation will not deteriorate further. Indeed, while saving money for 
the Federal Government, we can at the same time assure that our 
security interests are protected in maintaining some minimal presence 
of American crewed and flagged vessels on the high seas.
  There is not a developing nation in the world that does not recognize 
the importance of what we are doing here today. Every nation has 
recognized that, as it has had to save money and to assure its public 
treasury, it had an equal interest for security and economic reasons in 
the viability of a national fleet. Some will argue this should be done 
simply in the marketplace, with no Government presence whatsoever, the 
problem being that those are not the rules by which the world plays.
  Mr. Chairman, other nations have decided to involve themselves and 
their merchant fleets. If we do not, the outcome is simple. There will 
be no fleet at all.
  Finally, to those who would argue that we should simply allow the 
market to run its course, I would remind them that while other nations 
might, the United States is not simply another nation. We have the 
world's greatest security commitments and requirements. We have 
invested in a vast national security infrastructure, and this is its 
most vulnerable individual component.
  I rise therefore, Mr. Chairman, to congratulate the committee, the 
Members of the House who have spent so much effort bringing this 
legislation to the floor today, and I urge my colleagues, by an 
overwhelming vote, to give their affirmative votes, and I thank the 
gentleman for yielding.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield 2 minutes to the 
gentleman from Massachusetts [Mr. Studds], the chairman of the former 
Committee on Merchant Marine and Fisheries.
  Mr. STUDDS. Mr. Chairman, I rise in strong support of the bill 
somewhat wistfully, precisely as the former chairman of the former 
committee of jurisdiction over these matters. I note with some pleasure 
that the tradition of that committee, in terms of bipartisan 
tranquillity, has extended to this Congress, of all places, and to this 
floor at this time on this subject with many of these Members who are 
very familiar with this problem.

                              {time}  1445

  I would also like, for the umpteenth time, to express my appreciation 
to the members of the Committee on National Security, whatever its 
title is this year, on both sides, with whom we worked in such a 
collegial and productive fashion in the last Congress, in an equally 
bipartisan fashion, to craft legislation which I modestly observe was 
perhaps a bit stronger and more extensive even than the bill before us 
now.
  That bill died where so many bills die, in the other body, for 
reasons someone referred to them as technical. I do not think they were 
technical; I think they were basically political and regional, but they 
died. It went to its final resting place in that burial of so much good 
legislation, that plot across the building there.
  Mr. Chairman, this is good legislation, but we should not kid 
ourselves that this is going to solve the problem. We are drawing a 
minimal line below which we will not let this fleet sink. No Member 
should think that we have resolved the question of the United States as 
a maritime power going into the next century by adopting this 
legislation, even in the unlikely event that the other body can move 
itself to agree with us. But it is important, it is essential, and I am 
delighted to join with the members of the Committee on National 
Security on behalf of this.

  Mr. Chairman, I would wistfully observe that had this subject been as 
important in the minds of the Members on the other side as they say 
that it is, that their first action might not have been the abolition 
of the aforementioned, much-lamented and grieved-for Committee on the 
Merchant Marine and Fisheries. But, nonetheless, that has been done, 
and I am delighted to be a part of what I hope is a lasting legacy in 
this and future legislation.
  Mr. Chairman, I support the proposed legislation in part because it 
is absolutely necessary that Congress act now to save our merchant 
fleet. Twice in the last 2 years, the House has passed legislation that 
in all modesty would have done more in that regard that this bill, only 
to have our efforts come to naught in the Senate. But time not only is 
no longer on our side--it has run out. Today, we are being asked to set 
a floor below which our commercial fleet cannot be allowed to fall. We 
should not fool ourselves into believing we are doing anything else. In 
the future, Congress must again take up the task of formulating the 
kind of policies necessary to attract new, modern vessels to the United 
States fleet, with their owners assured of a long-term, binding 
commitment of the U.S. Government to foster and maintain such a fleet.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I reserve the balance of my 
time.
  Mr. BATEMAN. Mr. Chairman, I yield 2 minutes to the gentleman from 
Mississippi [Mr. Wicker].
  (Mr. WICKER asked and was given permission to revise and extend his 
remarks.)
  Mr. WICKER. Mr. Chairman, I certainly rise today in support of H.R. 
1350, the Maritime Security Act of 1995, and strongly encourage my 
colleagues to support this bipartisan effort. I would like to commend 
the gentleman from South Carolina [Mr. Spence] and the gentleman from 
Virginia [Mr. Bateman] as well as my colleague, the gentleman from 
Mississippi [Mr. Taylor], for their leadership, and also the committee 
for unanimously reporting this legislation.
  Mr. Chairman, it is the most sweeping maritime reform in 6 decades, 
and it will provide for a modern, cost-competitive American maritime 
fleet while reducing Federal spending by one-half. The legislation will 
also reduce or eliminate regulations that prevent American ship-
operating companies from competing on an equal basis with foreign-flag 
operators.
  Today, Federal regulations determine where our U.S. flagship can 
operate. These regulations mandate equipment and rules that penalize 
vessels which fly our flag. They discourage investment in modern, 
efficient vessels. H.R. 1350 will eliminate regulations that make no 
sense, that cost American jobs, and that tie the hands of American 
companies.
  Most importantly, H.R. 1350 will give America a commercial private-
sector sealift fleet to serve our economic and military objectives and 
promote a strong national defense that is unquestioned by friend and 
foe alike.
  Supporters of the fleet have included former President Reagan and 
Gen. Colin Powell, who referred to the program as the ``workhorse'' of 
our operations in missions such as Desert Shield and Desert Storm.
  The U.S. Constitution lays out only one specific responsibility for 
the Federal Government, and that is to provide for a national defense 
of our country. We must work to provide the best and most cost-
effective defense America can afford.
  H.R. 1350 will cut redtape, strengthen our Nation's maritime force, 
and solidify our Nation's defense at a bargain to the taxpayers. I 
strongly urge my colleagues to vote for the Maritime Security Act of 
1995.
  Mr. BATEMAN. Mr. Chairman, I would like to inquire if the gentleman 
from Mississippi [Mr. Taylor] has further speakers.
  Mr. TAYLOR of Mississippi. Mr. Chairman, to the best of my knowledge, 
we have no more requests for time.
  Mr. BATEMAN. Mr. Chairman, we have no further requests for time on 
this side of the aisle.
  Mr. TAYLOR of Mississippi. Mr. Chairman, may I say good things about 
the gentleman from Virginia [Mr. Bateman] before he closes?
  Mr. BATEMAN. Mr. Chairman, I am always happy to yield for that 
purpose.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I want to encourage all of 
my colleagues, Democratic and Republican, to support this measure. It 
is, as the gentleman from Virginia [Mr. Bateman] said before the 
Committee on Rules last week, a modest measure, doing the best we can 
with what we have to maintain the U.S. merchant fleet.

[[Page H 14066]]

  I have every confidence that the new chairman of the maritime panel 
can come up with a much more ambitious program for next year and, as 
his ranking minority member, I intend to work with him to the fullest 
on that.
  Mr. Chairman, I want to take the comments to heart of what the 
gentleman from Louisiana [Mr. Livingston], the chairman of the 
Committee on Appropriations, said about the need for the American 
merchant fleet. I think we ought to be on the gentleman's doorstep 
asking for his help to do the things that we know need to be done.
  Mr. Chairman, with that, I yield back the balance of my time, and 
encourage the passage of the bill.
  Mr. BATEMAN. Mr. Chairman, I will take but a moment further, but I 
feel it is necessary for me to do that in order for me to express my 
gratitude and, I should hope, the appreciation of all the Members of 
the House for the cooperation and leadership that I have received as 
chairman of the merchant marine panel from the gentleman from 
Mississippi [Mr. Taylor], and to also commend the gentleman from 
Massachusetts [Mr. Studds], and the gentleman from Illinois [Mr. 
Lipinski], who have always played a critical role in trying to support 
the American merchant marine community. They have done yeoman's work in 
this field. It is a part of a truly bipartisan effort.
  So, Mr. Chairman, thanks to all of them, and thanks to all those who 
came to the floor to express their support for this vitally needed 
legislation.
  Mr. DIAZ-BALART. Mr. Chairman, I rise today to offer my support for 
H.R. 1350, the Maritime Security Act of 1995.
  Mr. Chairman, history has only begun to tell the story of the need 
for our country to have a viable merchant marine fleet. During the 
Vietnam war, the demand was not always met by the merchant marine fleet 
because some of the vessels that were flagged in other countries had 
crews that refused to crew the fleet during this conflict. More 
recently, during Desert Shield/Desert Storm, trained mariners were 
ready to go to sea, but because they had no rehire rights they could 
not take a chance on losing their civilian jobs. Because of this lack 
of reemployment, the United States had to rely on pensioners who were 
in their 60's, 70's and even 80's to service these cargo and supply 
vessels.
  H.R. 1350 reverses a trend and ensures the existence of a fleet of 
militarily useful U.S.-flag commercial vessels and their American 
citizen crews, necessary for the military security requirements of our 
Nation. Fortunately there is consensus in Congress that H.R. 1350 needs 
to be enacted into law as soon as possible. The Maritime Security Act 
is supported by all segments of the U.S.-flag maritime industry--the 
American seafarers and the American shipbuilders.
  I am proud to be supporting H.R. 1350 with enthusiasm.
  Mr. UNDERWOOD. Mr. Chairman, as an island community 3500 miles west 
of Hawaii, we on Guam appreciate the immense importance of our national 
maritime policy. As an American community once occupied by enemy 
forces, we also greatly appreciate sound national security policies.
  The Maritime Security Act of 1995 serves to ensure an American 
merchant fleet crewed by Americans. These vessels would ensure the 
availability of critical assets in the event of a major conflict. I 
support these very important national security goals.
  I would point out that the purpose of this act is to help the 
American merchant marine fleet compete with foreign shipping interests. 
I must take issue when the competition is so skewed that there is no 
competition at all. In Guam's case, the Jones Act requires that goods 
shipped to Guam from other U.S. ports, such as from the west coast, 
must be carried on American vessels. Guam would rather have the open 
competition. Yes, subsidize the American carriers, if necessary, to 
even the playing field, but by all means, do not subsidize and then 
close the markets. In Guam's case, we have the worst of all worlds.
  Because the Guam shipping rates are so high compared to rates to 
Japan, we are actually in a position to lose business in our port from 
the United States military to these foreign ports. It is actually 
cheaper for the United States military to move its supplies to a 
foreign port and to re-supply United States naval ships from these 
foreign ports, than it is to ship those same supplies to Guam. In an 
era of strict budgetary constraints, the Navy's Military Sealift 
Command is contemplating this very scenario. What happened to national 
security concerns? What happened to loyalty to American workers in the 
American port of Guam? Very simply, what happened is that the shippers 
who receive these subsidies, and who have the captive Guam market 
because of the Jones Act, have made it impossible for the Navy to 
operate out of Guam due to their exorbitant shipping rates.
  And we Americans who live on Guam are finding it increasingly 
untenable to be the ones whose shipping rates provide the windfall 
profits to shipping companies because of Jones Act restrictions.
  Mr. Chairman, I can support the shipping subsidies if it helps the 
fair and open competition. But I would urge Congress to open Guam's 
market to fair and open competition.
  Mr. POMEROY. Mr. Chairman, I rise in support of H.R. 1350, the 
Maritime Security Act of 1995.
  Both our national security and commercial interests are well-served 
by preserving a viable U.S.-flagged maritime industry. A domestic fleet 
of ocean-going vessels provides vital sealift capability to our 
military and ensures that foreign shipping interests do not gain total 
control over America's foreign trade. For these reasons, all Americans 
should support the maintenance of a healthy domestic shipping industry.
  While the legislation before us today protects the future of our 
domestic shipping capability, it does so while dramatically reducing 
costs to the Federal Government. H.R. 1350 reduces operating assistance 
payments for militarily useful U.S.-flag ships by more than 50 percent, 
from $225 million annually to $100 million. What's more the bill 
eliminates outdated and unnecessary rules and regulations which impede 
the ability of U.S.-flag commercial vessels to compete and to expand 
and modernize their fleets.
  Finally, Mr. Chairman, I am pleased that the committee successfully 
revised the application of cargo preference requirements for shipments 
of agriculture commodities under the Public Law 480 Food for Peace 
Program. The revision will ensure that Great Lakes ports, which are not 
served by large U.S.-flag vessels, are not precluded from participating 
in such shipments.
  This provision is especially important to North Dakota and the entire 
upper Midwest because we export a significant amount of agriculture 
products through Great Lakes ports. As I have said before on this 
floor, I do not view the interest of domestic shipping agricultural 
trade as incompatible. H.R. 1350 strikes an important balance that 
serves the interests of both industries.
  I congratulate the chairman of the Armed Services Committee, Mr. 
Spence, and the ranking minority member, Mr. Dellums, for bringing this 
bipartisan legislation to the floor today. The bill was unanimously 
supported by the Committee on National Security and deserves the 
support of all Members.
  Mr. FLANAGAN. Mr. Chairman, I rise in strong support of H.R. 1350, 
the Maritime Security Act of 1995, sponsored by the gentleman from 
South Carolina [Mr. Spence] and the gentleman from Virginia [Mr. 
Bateman], and urge my colleagues to support it also.
  Mr. Chairman, this year marks the 50th anniversary of the end of 
World War II. On May 18 and September 2 of this year, all segments of 
America's Armed Forces were praised and their exploits recounted for 
the commemoration of the 50th anniversaries of V-E Day and V-J Day, 
respectfully. One segment that I believe was not given the full credit 
it deserves was the U.S. merchant marine.
  The United States led the free world to victory, in part, because its 
skilled men and women worked around the clock in America's machine 
shops and shipyards to produce the vessels needed to carry the critical 
supplies and ordinance to our fighting men and women overseas. Those 
ships were all crewed with brave, young American merchant mariners who 
sailed through thousands of miles of treacherous waters, often 
unprotected from submarine attacks.
  It was America's industrial strength that helped to overwhelm our 
German and Japanese enemies, though only because American shipyards 
also supplied the transportation to move it. Between 1941 and 1945, 
more than 51,000,000 tons of merchant shipping was built by U.S. 
shipyards, representing some 10,000 Liberty and Victory freighters and 
T-2 tankers, all U.S. manned and produced by a revolutionary process 
called prefabrication in which a vessel could be built from start to 
finish in just 4 days. At the height of the Liberty-building program, 
shipyards in Baltimore and San Francisco and other port cities were 
launching three ships a day. Germany's U-boats could not sink such an 
output at the rate losses were replaced.
  We will retain a small part of this industry component if the House 
votes in favor of H.R. 1350 today. With the enactment of this important 
legislation, America will have the nucleus of a merchant fleet flying 
the Stars and Stripes proudly on the fantails of our ships, ready to 
provide the kind of protection and competition to American shippers who 
would otherwise be at the mercy of foreign-flag fleets.
  With this bill, our Nation will also have a civilian fleet which we 
can count on during times of both war and peace. Further, it will have 
a 

[[Page H 14067]]
maritime manpower base and intermodal cargo carrying capability 
essential to strong sealift under our own control.
  Mr. Chairman, I strongly urge my colleagues to support the national 
security of our country by voting for this bill and manager's amendment 
to it.
  Mr. REED. Mr. Chairman, I rise in strong support of H.R. 1350, the 
Maritime Security Act of 1995.
  As a member of the Merchant Marine and Fisheries Committee and the 
Subcommittee on Merchant Marine in the 102d and 103d Congresses, I was 
actively involved in several maritime reform efforts. While that 
committee no longer exists, I am glad that we are making another 
attempt to ensure our status as a maritime power.
  H.R. 1350 would support a fleet of militarily useful U.S.-flagged 
commercial vessels and American merchant marines for future needs. It 
would prevent foreign shipping interests from controlling all U.S. 
maritime trade. It would reduce the costs of the operating assistance 
program and eliminate burdensome administrative requirements. H.R. 1350 
would also help our Nation's shipyards by encouraging the construction 
of new vessels here in America.
  Throughout my tenure in the House of Representatives, I have been 
proud to come to the floor and vote in favor of several bills to ensure 
a vibrant American merchant marine and maritime industry. Such 
legislation is good for our economy and our national security.
  Unfortunately, maritime reform and revitalization efforts failed to 
get the support of the other Chamber. I would urge my colleagues in the 
other body to get on board and support our Nation's maritime industry.
  Mr. TRAFICANT. Mr. Chairman, I rise in strong support of H.R. 1350, 
the Maritime Security Act of 1995. I commend Chairman Spence and the 
ranking minority member of the National Security Committee, Mr. 
Dellums, for bringing this important bill forward.
  The bill makes some much needed and long overdue reforms in Federal 
maritime programs. Most importantly, the bill replaces the Operational 
Differential Subsidy [ODS] Program with a new Maritime Security Fleet 
[MSF] Program within the Transportation Department. The new MSF Program 
would provide annual payments to U.S.-flag shipping companies who agree 
to make their vessels available to the Federal Government when needed 
for national security purposes.
  The new MSF Program will allow the United States to maintain a modern 
merchant fleet, provide sealift for national emergencies, and ensure 
that America remains a player in ocean transportation and commerce. The 
MSF Program will provide for a viable United States maritime industry 
able to provide America with the maritime services necessary to respond 
to a national security crisis--such as a war in the Persian Gulf or the 
Korean Peninsula.
  Members should note that the MSF Program will provide this service at 
a program cost significantly less than the current Operating 
Differential Subsidy Program.
  The chairman's amendment includes a provision which reauthorizes and 
reforms the title XI program to provide Federal loan guarantees to 
buyers who build vessels in American shipyards. The funds authorized in 
the bill will provide seed money for as much as $500 million in loan 
guarantee authority for the construction of commercial vessels in U.S. 
shipyards.
  For every American shipyard job that is created, 10 jobs are created 
in related industries throughout the country. The title XI loan 
guarantee program is a successful and necessary initiative.
  To fully appreciate the urgent necessity of this program one must 
fully understand the real world of commercial shipbuilding. The 
international shipbuilding industry is highly competitive and dominated 
by nations that heavily subsidize their shipbuilding industries.
  The title XI program, time and time again, allows shipbuilding 
projects in this country to go forward--projects that normally never 
would have happened without title XI.
  At a time when some $20 billion of United States taxpayer money is 
being used to bail out Mexico, it would be a travesty and a tragedy not 
to continue a modest program like title XI that creates American jobs 
and secures our national security.
  At the present time there is great pressure on the Congress to cut 
Federal spending. I agree that Congress should closely review each and 
every program of the Federal Government. There are certain 
responsibilities, however, that the Federal Government cannot shirk or 
shortchange. National security is one of them.
  The new Maritime Security Fleet Program authorized in this bill will 
foster a continuing and effective partnership between the Federal 
Government and the private sector by utilizing existing industries to 
provide cost effective sealift, as well as a modern and efficient 
marine transportation system.
  The maintenance of a viable and efficient maritime industry is an 
essential component of ensuring national security. To cut or eliminate 
these programs would seriously compromise our national security by 
compromising the U.S. military's ability to move troops and material to 
any point on the globe where our interests might be threatened.
  Napoleon once said that an army lives on its stomach. That maxim is 
as true in the high-technology battlefield of 1995 as it was in the 
19th century. Modern-day armies need to eat, they need to be 
transported and they need logistic support to function and to fight. I, 
for one, do not want to rely on foreign maritime fleets and crews to 
feed, clothe, and equip American troops during a crisis. That is why we 
need to pass H.R. 1350.
  I urge my colleagues to support H.R. 1350.
  Ms. PELOSI. Mr. Chairman, I rise today in strong support of H.R. 
1350, the Maritime Security Act of 1995. This legislation preserves a 
strong U.S. merchant marine and it is vital to our national defense and 
economy.
  In the years immediately following World War II, almost half of the 
world's commercial fleet sailed under the American flag. Today, while 
the United States remains the largest trading nation in the world, our 
merchant marine fleet now ranks 16th in size when compared to other 
maritime nations. This legislation would begin to reverse this dramatic 
decline.
  H.R. 1350, which was reported unanimously by the Committee on 
National Security, serves several important purposes. The bill creates 
a Maritime Security Program which will ensure that the United States 
has a U.S.-flagged and crewed fleet of militarily useful commercial 
vessels ready at all times. This fleet will serve our country in peace 
and in war.
  In addition, the Maritime Security Program would significantly reduce 
the cost of the Federal maritime operating assistance program from a 
$225 million annual program to a $100 million annual program. Each ship 
that participates in the program would receive $2.3 million per year 
for the first year and $2.1 million per year for the remaining 9 years 
of the program. When fully operational, the program would result in the 
retention of approximately 50 U.S.-flag vessels which would otherwise 
shift their operations to foreign flags of convenience with foreign 
crews.
  This is the most sweeping maritime reform program in six decades. It 
will reduce Federal spending while providing for a modern cost-
competitive American maritime fleet which will serve our Nation's 
economic and military objectives. Furthermore, it will ensure that our 
American commercial fleet will be crewed by American sailors, the 
finest crews in the world.
  I urge my colleagues to support this important legislation and vote 
``yes'' on H.R. 1350.
  Mr. BATEMAN. Mr. Chairman, I have no further requests for time, and I 
yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  The amendment in the nature of a substitute printed in the bill shall 
be considered by sections as an original bill for the purpose of 
amendment, and pursuant to the rule each section is considered read.
  Before consideration of any other amendment, it shall be in order to 
consider the amendment printed in House Report 104-375, if offered by 
the gentleman from South Carolina [Mr. Spence], or his designee. That 
amendment shall be considered read, may amend portions of the bill not 
yet read for amendment, is not subject to amendment, and is not subject 
to a demand for division of the question. Debate on the amendment is 
limited to 20 minutes, equally divided and controlled by the proponent 
and an opponent of the amendment.
  During consideration of the bill for amendment, the Chairman of the 
Committee of the Whole may accord priority in recognition to a Member 
offering an amendment that has been printed in the designated place in 
the Congressional Record. Those amendments will be considered read.
  The Clerk will designate section 1.
  The text of section 1 is as follows:

       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''.

  The CHAIRMAN. Are there any amendments to section 1?
  Mr. BATEMAN. Mr. Chairman, I ask unanimous consent that the remainder 
of the committee amendment in the nature of a substitute be printed in 
the Record and open to amendment at any point.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Virginia?
  There was no objection.
  The text of the remainder of the committee amendment in the nature of 
a substitute is as follows:

[[Page H 14068]]


     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 


[[Page H 14069]]
     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 

[[Page H 14070]]
     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.


                    amendment offered by mr. bateman

  Mr. BATEMAN. Mr. Chairman, I offer an amendment, printed in House 
Report 104-375.
  The CHAIRMAN. The clerk will designate the amendment.
  The text of the amendment is as follows:

  Amendment offered by Mr. Bateman:
       Page 5, strike lines 18 through 23, and insert the 
     following:
       ``(c) Regulatory Relief.--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. Participation in the 
     program established by this subtitle shall not subject a 
     contractor to section 805 or to any provision of subtitle 
     A.''
       Page 13, line 24, insert before the period the following: 
     ``and the Secretary of Defense''.
       Page 14, strike lines 1 through 13, and insert the 
     following:
       ``(n) Nonrenewal for Lack of Funds.--If, by the first day 
     of a fiscal year, sufficient funds have not been appropriated 
     under the authority provided by section 655 for that fiscal 
     year, the Secretary of Transportation shall notify the 
     Congress that operating agreements authorized under this 
     subtitle for which sufficient funds are not available will 
     not be renewed for that fiscal year if sufficient funds are 
     not appropriated by the 60th day of that fiscal year. If 
     funds are not appropriated under the authority provided by 
     section 655 for any fiscal year by the 60th day of that 
     fiscal year, then each vessel covered by an operating 
     agreement under this subtitle for which funds are not 
     available is 

[[Page H 14071]]
     thereby released from any further obligation under the operating 
     agreement, and the vessel owner or operator may transfer and 
     register such vessel under a foreign registry deemed 
     acceptable by the Secretary of Transportation, 
     notwithstanding any other provision of law. If section 902 is 
     applicable to such vessel after registration of the vessel 
     under such a registry, the vessel is available to be 
     requisitioned by the Secretary of Transportation pursuant to 
     section 902.''
       Page 16, strike line 21 and all that follows through line 8 
     on page 17, and insert the following:
       ``(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, or whenever determined by the Secretary 
     of Defense to be necessary for national security (including 
     any natural disaster, international peace operation, or 
     contingency operation (as that term is defined in section 101 
     of title 10, United States Code)), a contractor for 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 
     Agreements 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 if those terms have been approved by the 
     Secretary of Defense.
       ``(3) Participation after expiration of operating 
     agreement.--Except as provided by section 652(m), the 
     Secretary may not require, through an Emergency Preparedness 
     Agreement or operating agreement, that a contractor continue 
     to participate in an Emergency Preparedness Agreement when 
     the operating agreement with the contractor has expired 
     according to its terms or is otherwise no longer in effect. 
     After expiration of an Emergency Preparedness Agreement, a 
     contractor may volunteer to continue to participate in such 
     an agreement.''
       Page 18, after line 16, insert the following:
       ``(3) Approval of amount by secretary of defense.--No 
     compensation may be provided for a vessel under this 
     subsection unless the amount of the compensation is approved 
     by the Secretary of Defense.''
       Page 20, strike lines 10 through 19, and insert the 
     following:


                             ``definitions

       ``Sec. 654. In this subtitle:
       ``(1) Bulk cargo.--The term `bulk cargo' means cargo that 
     is loaded and carried in bulk without mark or count.
       ``(2) Contractor.--The term `contractor' means an owner or 
     operator of a vessel that enters into an operating agreement 
     for the vessel with the Secretary of Transportation under 
     section 652.
       ``(3) Ocean common carrier.--The term `ocean common 
     carrier' means a person holding itself out to the general 
     public to operate vessels to provide transportation by water 
     of passengers or cargo between the United States and a 
     foreign country for compensation, that--
       ``(A) assumes responsibility for the transportation from 
     the port or point of receipt to the port or point of 
     destination, and
       ``(B) utilizes, for all or part of that transportation, a 
     vessel operating on the high seas or the Great Lakes between 
     a port in the United States and a port in a foreign country, 
     except that the term does not include a common carrier 
     engaged in ocean transportation by ferry boat, ocean tramp, 
     or chemical parcel-tanker. As used in this paragraph, 
     `chemical parcel-tanker' means a vessel whose cargo-carrying 
     capability consists of individual cargo tanks for bulk 
     chemicals that are a permanent part of the vessel, that have 
     segregation capability with piping systems to permit 
     simultaneous carriage of several bulk chemical cargoes with 
     minimum risk of cross-contamination, and that has a valid 
     certificate of fitness under the International Maritime 
     Organization Code for the Construction and Equipment of Ships 
     Carrying Dangerous Chemicals in Bulk.
       ``(4) Fleet.--The term `Fleet' means the Maritime Security 
     Fleet established pursuant to section 651(a).
       ``(5) LASH vessel.--The term `LASH vessel' means a lighter 
     aboard ship vessel.
       ``(6) United states-documented vessel.--The term `United 
     States-documented vessel' means a vessel documented under 
     chapter 121 of title 46, United States Code.''
       Page 23, strike lines 10 through 13, and insert the 
     following:

     SEC. 4. DOMESTIC OPERATIONS.

       (a) In General.--Subtitle B of title VI of the Merchant 
     Marine Act, 1936, as amended by section 102 of this title, is 
     further amended by adding at the end the following new 
     section:


                    ``noncontiguous domestic trades

       ``Sec. 656. (a)(1) Except as otherwise provided in this 
     section, no contractor or related party shall receive 
     payments pursuant to this subtitle during a period when it 
     participates in a noncontiguous domestic trade, except upon 
     written permission of the Secretary of Transportation. Such 
     written permission shall also be required for any material 
     change in the number or frequency of sailings, the capacity 
     offered, or the domestic ports called by a contractor or 
     related party in a noncontiguous domestic trade. The 
     Secretary may grant such written permission pursuant to 
     written application of such contractor or related party 
     unless the Secretary finds that--
       ``(A) existing service in that trade is adequate; or
       ``(B) the service sought to be provided by the contractor 
     or related party--
       ``(i) would result in unfair competition to any other 
     person operating vessels in such noncontiguous domestic 
     trade, or
       ``(ii) would be contrary to the objects and policy of this 
     Act.
       ``(2) For purposes of this subsection, `written permission 
     of the Secretary' means permission which states the capacity 
     offered, the number and frequency of sailings, and the 
     domestic ports called, and which is granted following--
       ``(A) written application containing the information 
     required by paragraph (e)(1) by a person seeking such written 
     permission, notice of which application shall be published in 
     the Federal Register within 15 days of filing of such 
     application with the Secretary;
       ``(B) holding of a hearing on the application under section 
     554 of title 5, United States Code, in which every person, 
     firm or corporation having any interest in the application 
     shall be permitted to intervene and be heard; and
       ``(C) final decision on the application by the Secretary 
     within 120 days following conclusion of such hearing.
       ``(b) Subsection (a) shall not apply in any way to 
     provision by a contractor of service within the level of 
     service provided by that contractor as of the date 
     established by subsection (c) or to provision of service 
     permitted by subsection (d).
       ``(c) The date referred to in subsection (b) shall be 
     August 9, 1995: Provided, however, That with respect to tug 
     and barge service to Alaska the date referred to in 
     subsection (b) shall be July 1, 1992.
       ``(d) A contractor may provide service in a trade in 
     addition to the level of service provided as of the 
     applicable date established by subsection (c) in proportion 
     to the annual increase in real gross product of the 
     noncontiguous State or Commonwealth served since the 
     applicable date established by subsection (c).
       ``(e)(1) A person applying for award of an agreement under 
     this subtitle shall include with the application a 
     description of the level of service provided by that person 
     in each noncontiguous domestic trade served as of the date 
     applicable under subsection (c). The application also shall 
     include, for each such noncontiguous domestic trade: a list 
     of vessels operated by that person in such trade, their 
     container carrying capacity expressed in twenty-foot 
     equivalent units (TEUs) or other carrying capacity, the 
     itinerary for each such vessel, and such other information as 
     the Secretary may require by regulation. Such description and 
     information shall be made available to the public. Within 15 
     days of the date of an application for an agreement by a 
     person seeking to provide service pursuant to subsections (b) 
     and (c) of this section, the Secretary shall cause to be 
     published in the Federal Register notice of such description, 
     along with a request for public comment thereon. Comments on 
     such description shall be submitted to the Secretary within 
     30 days of publication in the Federal Register. Within 15 
     days after receipt of comments, the Secretary shall issue a 
     determination in writing either accepting, in whole or part, 
     or rejecting use of the applicant's description to establish 
     the level of service provided as of the date applicable under 
     subsection (c): Provided, That notwithstanding the provisions 
     of this subsection, processing of the application for an 
     award of an agreement shall not be suspended or delayed 
     during the time in which comments may be submitted with 
     respect to the determination or during the time prior to 
     issuance by the Secretary of the required determination: 
     Provided further, That if the Secretary does not make the 
     determination required by this paragraph within the time 
     provided by this paragraph, the description of the level of 
     service provided by the applicant shall be deemed to be the 
     level of service provided as of the applicable date until 
     such time as the Secretary makes the determination.
       ``(2) No contractor shall implement the authority granted 
     in subsection (d) of this section except as follows:
       ``(A) An application shall be filed with the Secretary 
     which shall state the increase in capacity sought to be 
     offered, a description of the means by which such additional 
     capacity would be provided, the basis for applicant's 
     position that such increase in capacity would be in 
     proportion to or less than the increase in real gross product 
     of the relevant noncontiguous State or Commonwealth since the 
     applicable date established by subsection (c), and such 
     information as the Secretary may require so that the 
     Secretary may accurately determine such increase in real 
     gross product of the relevant noncontiguous State or 
     Commonwealth.
       ``(B) Such increase in capacity sought by applicant and 
     such information shall be made available to the public.
       ``(C) Within 15 days of the date of an application pursuant 
     to this paragraph the Secretary shall cause to be published 
     in the Federal Register notice of such application, along 
     with a request for public comment thereon.
       ``(D) Comments on such application shall be submitted to 
     the Secretary within 30 days of publication in the Federal 
     Register.
       ``(E) Within 15 days after receipt of comments, the 
     Secretary shall issue a determination in writing either 
     accepting, in 

[[Page H 14072]]
     whole or part, or rejecting, the increase in capacity sought by the 
     applicant as being in proportion to or less than the increase 
     in real gross product of the relevant noncontiguous State or 
     Commonwealth since the applicable date established by 
     subsection (c): Provided, That, notwithstanding the 
     provisions of this section, if the Secretary does not make 
     the determination required by this paragraph within the time 
     provided by this paragraph, the increase in capacity sought 
     by applicant shall be permitted as being in proportion to or 
     less than such increase in real gross product until such time 
     as the Secretary makes the determination.
       ``(f) With respect to provision by a contractor of service 
     in a noncontiguous domestic trade not authorized by this 
     section, the Secretary shall deny payments under the 
     operating agreement with respect to the period of provision 
     of such service but shall deny payments only in part if the 
     extent of provision of such unauthorized service was de 
     minimis or not material.
       ``(g) Notwithstanding any other provision of this subtitle, 
     the Secretary may issue temporary permission for any United 
     States citizen, as that term is defined in section 2 of the 
     Shipping Act, 1916, to provide service to a noncontiguous 
     State or Commonwealth upon the request of the Governor of 
     such noncontiguous State or Commonwealth, in circumstances 
     where an Act of God, a declaration of war or national 
     emergency, or any other condition occurs that prevents ocean 
     transportation service to such noncontiguous State or 
     Commonwealth from being provided by persons currently 
     providing such service. Such temporary permission shall 
     expire 90 days from date of grant, unless extended by the 
     Secretary upon written request of the Governor of such State 
     or Commonwealth.
       ``(h) As used in this section:
       ``(1) The term `level of service provided by a contractor' 
     in a trade as of a date means--
       ``(A) with respect to service other than service described 
     in (B), the total annual capacity provided by the contractor 
     in that trade for the 12 calendar months preceding that date: 
     Provided, That, with respect to unscheduled, contract carrier 
     tug and barge service between points in Alaska south of the 
     Arctic Circle and points in the contiguous 48 States, the 
     level of service provided by a contractor shall include 100 
     percent of the capacity of the equipment dedicated to such 
     service on the date specified in subsection (c) and actually 
     utilized in that service in the two-year period preceding 
     that date, excluding service to points between Anchorage, 
     Alaska and Whittier, Alaska, served by common carrier service 
     unless such unscheduled service is only for carriage of oil 
     or pursuant to a contract with the United States military: 
     Provided further, That, with respect to scheduled barge 
     service between the contiguous 48 States and Puerto Rico, 
     such total annual capacity shall be deemed as such total 
     annual capacity plus the annual capacity of two additional 
     barges, each capable of carrying 185 trailers and 100 
     automobiles; and
       ``(B) with respect to service provided by container 
     vessels, the overall capacity equal to the sum of--
       ``(i) 100 percent of the capacity of vessels operated by or 
     for the contractor on that date, with the vessels' 
     configuration and frequency of sailing in effect on that 
     date, and which participate solely in that noncontiguous 
     domestic trade; and
       ``(ii) 75 percent of the capacity of vessels operated by or 
     for the contractor on that date, with the vessels' 
     configuration and frequency of sailing in effect on that 
     date, and which participate in that noncontiguous domestic 
     trade and in another trade, provided that the term does not 
     include any restriction on frequency, or number of sailings, 
     or on ports called within such overall capacity.
       ``(2) The level of service set forth in paragraph (1) shall 
     be described with the specificity required by subsection 
     (e)(1) and shall be the level of service in a trade with 
     respect to the applicable date established by subsection (c) 
     only if the service is not abandoned thereafter, except for 
     interruptions due to military contingency or other events 
     beyond the contractor's control.
       ``(3) The term `participates in a noncontiguous domestic 
     trade' means directly or indirectly owns, charters, or 
     operates a vessel engaged in transportation of cargo between 
     a point in the contiguous 48 states and a point in Alaska, 
     Hawaii, or Puerto Rico, other than a point in Alaska north of 
     the Arctic Circle.
       ``(4) The term `related party' means--
       ``(A) a holding company, subsidiary, affiliate, or 
     associate of a contractor who is a party to an operating 
     agreement under this subtitle; and
       ``(B) an officer, director, agent, or other executive of a 
     contractor or of a person referred to in subparagraph (A).''.
       (b) Conforming Amendment.--Section 805 of the Merchant 
     Marine Act, 1936 (46 App. U.S.C. 1223) is amended--
       (1) by striking ``title VI of this Act'' each place it 
     appears and inserting ``subtitle A of title VI of this Act''; 
     and
       (2) by striking ``under title VI'' each place it appears 
     and inserting ``under subtitle A of title VI''.
       Page 28, after line 26, add the following new sections:

     SEC. 9. MERCHANT SHIP SALES ACT OF 1946 AMENDMENT.

       Section 11 of the Merchant Ship Sales Act of 1946 (50 App. 
     U.S.C. 1744) is amended as follows:
       (1) In subsection (b)(2) by striking ``Secretary of the 
     Navy,'' and inserting ``Secretary of Defense,''.
       (2) By striking subsection (c) and redesignating subsection 
     (d) as subsection (c).

     SEC. 10. REEMPLOYMENT RIGHTS FOR CERTAIN MERCHANT SEAMEN.

       (a) In General.--Title III of the Merchant Marine Act, 1936 
     (46 App. U.S.C. 1131) is amended by inserting after section 
     301 the following new section:
       ``Sec. 302. (a) An individual who is certified by the 
     Secretary of Transportation under subsection (c) shall be 
     entitled to reemployment rights and other benefits 
     substantially equivalent to the rights and benefits provided 
     for by chapter 43 of title 38, United States Code, for any 
     member of a Reserve component of the Armed Forces of the 
     United States who is ordered to active duty.
       ``(b) An individual may submit an application for 
     certification under subsection (c) to the Secretary of 
     Transportation not later than 45 days after the date the 
     individual completes a period of employment described in 
     subsection (c)(1)(A) with respect to which the application is 
     submitted.
       ``(c) Not later than 20 days after the date the Secretary 
     of Transportation receives from an individual an application 
     for certification under this subsection, the Secretary 
     shall--
       ``(1) determine whether or not the individual--
       ``(A) was employed in the activation or operation of a 
     vessel--
       ``(i) in the National Defense Reserve Fleet maintained 
     under section 11 of the Merchant Ship Sales Act of 1946, in a 
     period in which that vessel was in use or being activated for 
     use under subsection (b) of that section;
       ``(ii) that is requisitioned or purchased under section 902 
     of this Act; or
       ``(iii) that is owned, chartered, or controlled by the 
     United States and used by the United States for a war, armed 
     conflict, national emergency, or maritime mobilization need 
     (including for training purposes or testing for readiness and 
     suitability for mission performance); and
       ``(B) during the period of that employment, possessed a 
     valid license, certificate of registry, or merchant mariner's 
     document issued under chapter 71 or chapter 73 (as 
     applicable) of title 46, United States Code; and
       ``(2) if the Secretary makes affirmative determinations 
     under paragraph (1) (A) and (B), certify that individual 
     under this subsection.
       ``(d) For purposes of reemployment rights and benefits 
     provided by this section, a certification under subsection 
     (c) shall be considered to be the equivalent of a certificate 
     referred to in paragraph (1) of section 4301(a) of title 38, 
     United States Code.''.
       (b) Application.--The amendment made by subsection (a) 
     shall apply to employment described in section 302(c)(1)(A) 
     of the Merchant Marine Act, 1936, as amended by subsection 
     (a), occurring after the date of enactment of this Act.
       (c) Regulation.--Not later than 120 days after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall issue regulations implementing this section.

     SEC. 11. TITLE XI LOAN GUARANTEES.

       Title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 
     1271 et seq.) is amended--
       (1) in section 1101(b), by striking ``owned by citizens of 
     the United States'';
       (2) in section 1104B(a), in the material preceding 
     paragraph (1), by striking ``owned by citizens of the United 
     States''; and
       (3) in section 1110(a), by striking ``owned by citizens of 
     the United States''.

     SEC. 12. EXTENSION OF WAR RISK INSURANCE AUTHORITY.

       Section 1214 of the Merchant Marine Act, 1936 (46 App. 
     U.S.C. 1294) is amended by striking ``June 30, 1995'' and 
     inserting ``June 30, 2000''.

     SEC. 13. VESSEL LOAN GUARANTEE PROGRAM.

       (a) Risk Factor Determinations.--Section 1103 of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1273) is amended by 
     adding at the end the following new subsection:
       ``(h)(1) The Secretary shall--
       ``(A) establish in accordance with this subsection a system 
     of risk categories for obligations guaranteed under this 
     title, that categorizes the relative risk of guarantees made 
     under this title with respect to the risk factors set forth 
     in paragraph (3); and
       ``(B) determine for each of the risk categories a subsidy 
     rate equivalent to the cost of obligations in the category, 
     expressed as a percentage of the amount guaranteed under this 
     title for obligations in the category.
       ``(2)(A) Before making a guarantee under this section for 
     an obligation, the Secretary shall apply the risk factors set 
     forth in paragraph (3) to place the obligation in a risk 
     category established under paragraph (1)(A).
       ``(B) The Secretary shall consider the aggregate amount 
     available to the Secretary for making guarantees under this 
     title to be reduced by the amount determined by multiplying--
       ``(i) the amount guaranteed under this title for an 
     obligation, by
       ``(ii) the subsidy rate for the category in which the 
     obligation is placed under subparagraph (A) of this 
     paragraph.
       ``(C) The estimated cost to the Government of a guarantee 
     made by the Secretary under this title for an obligation is 
     deemed to be the amount determined under subparagraph (B) for 
     the obligation.
       ``(D) The Secretary may not guarantee obligations under 
     this title after the aggregate 

[[Page H 14073]]
     amount available to the Secretary under appropriations Acts for the 
     cost of loan guarantees is required by subparagraph (B) to be 
     considered reduced to zero.
       ``(3) The risk factors referred to in paragraphs (1) and 
     (2) are the following:
       ``(A) If applicable, the country risk for each eligible 
     export vessel financed or to be financed by an obligation.
       ``(B) The period for which an obligation is guaranteed or 
     to be guaranteed.
       ``(C) The amount of an obligation, which is guaranteed or 
     to be guaranteed, in relation to the total cost of the 
     project financed or to be financed by the obligation.
       ``(D) The financial condition of an obligor or applicant 
     for a guarantee.
       ``(E) If applicable, any guarantee related to the project, 
     other than the guarantee under this title for which the risk 
     factor is applied.
       ``(F) If applicable, the projected employment of each 
     vessel or equipment to be financed with an obligation.
       ``(G) If applicable, the projected market that will be 
     served by each vessel or equipment to be financed with an 
     obligation.
       ``(H) The collateral provided for a guarantee for an 
     obligation.
       ``(I) The management and operating experience of an obligor 
     or applicant for a guarantee.
       ``(J) Whether a guarantee under this title is or will be in 
     effect during the construction period of the project.
       ``(4) In this subsection, the term `cost' has the meaning 
     given that term in section 502 of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661a).''.
       (b) Application.--Subsection (h)(2) of section 1103 of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1273), as amended 
     by subsection (a) of this section, shall apply to guarantees 
     that the Secretary of Transportation makes or commits to make 
     with any amounts that are unobligated on or after the date of 
     enactment of this Act.
       (c) Guarantee Fees.--Section 1104A(e) of title XI of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1274(e)) is amended 
     to read as follows:
       ``(e)(1) Except as otherwise provided in this subsection, 
     the Secretary shall prescribe regulations to assess in 
     accordance with this subsection a fee for the guarantee of an 
     obligation under this title.
       ``(2)(A) The amount of a fee under this subsection for a 
     guarantee is equal to the sum determined by adding the 
     amounts determined under subparagraph (B) for the years in 
     which the guarantee is in effect.
       ``(B) The amount referred to in subparagraph (A) for a year 
     is the present value (determined by applying the discount 
     rate determined under subparagraph (F)) of the amount 
     determined by multiplying--
       ``(i) the estimated average unpaid principal amount of the 
     obligation that will be outstanding during the year 
     (determined in accordance with subparagraph (E)), by
       ``(ii) the fee rate established under subparagraph (C) for 
     the obligation for each year.
       ``(C) The fee rate referred to in subparagraph (B)(ii) for 
     an obligation shall be--
       ``(i) in the case of an obligation for a delivered vessel 
     or equipment, not less than one-half of 1 percent and not 
     more than 1 percent, determined by the Secretary for the 
     obligation under the formula established under subparagraph 
     (D); or
       ``(ii) in the case of an obligation for a vessel to be 
     constructed, reconstructed, or reconditioned, or of equipment 
     to be delivered, not less than one-quarter of 1 percent and 
     not more than one-half of 1 percent, determined by the 
     Secretary for the obligation under the formula established 
     under subparagraph (D).
       ``(D) The Secretary shall establish a formula for 
     determining the fee rate for an obligation for purposes of 
     subparagraph (C), that--
       ``(i) is a sliding scale based on the creditworthiness of 
     the obligor;
       ``(ii) takes into account the security provided for a 
     guarantee under this title for the obligation; and
       ``(iii) uses--
       ``(I) in the case of the most creditworthy obligors, the 
     lowest rate authorized under subparagraph (C) (i) or (ii), as 
     applicable; and
       ``(II) in the case of the least creditworthy obligors, the 
     highest rate authorized under subparagraph (C) (i) or (ii), 
     as applicable.
       ``(E) For purposes of subparagraph (B)(i), the estimated 
     average unpaid principal amount does not include the average 
     amount (except interest) on deposit in a year in the escrow 
     fund under section 1108.
       ``(F) For purposes of determining present value under 
     subparagraph (B) for an obligation, the Secretary shall apply 
     a discount rate determined by the Secretary of the Treasury 
     taking into consideration current market yields on 
     outstanding obligations of the United States having periods 
     to maturity comparable to the period to maturity for the 
     obligation with respect to which the determination of present 
     value is made.
       ``(3) A fee under this subsection shall be assessed and 
     collected not later than the date on which amounts are first 
     paid under an obligation with respect to which the fee is 
     assessed.
       ``(4) A fee paid under this subsection is not refundable. 
     However, an obligor shall receive credit for the amount paid 
     for the remaining term of the guaranteed obligation if the 
     obligation is refinanced and guaranteed under this title 
     after such refinancing.
       ``(5) A fee paid under subsection (e) shall be included in 
     the amount of the actual cost of the obligation guaranteed 
     under this title and is eligible to be financed under this 
     title.''.

     SEC. 14. MARITIME POLICY REPORT.

       (a) Report.--The Secretary of Transportation shall transmit 
     to the Congress a report setting forth the Department of 
     Transportation's policies for the 5-year period beginning 
     October 1, 1995, with respect to--
       (1) fostering and maintaining a United States merchant 
     marine capable of meeting economic and national security 
     requirements;
       (2) improving the vitality and competitiveness of the 
     United States merchant marine and the maritime industrial 
     base, including ship repairers, shipbuilders, ship manning, 
     ship operators, and ship suppliers;
       (3) reversing the precipitous decrease in the number of 
     ships in the United States-flag fleet and the Nation's 
     shipyard and repair capability;
       (4) stabilizing and eventually increasing the number of 
     mariners available to crew United States merchant vessels;
       (5) achieving adequate manning of merchant vessels for 
     national security needs during a mobilization;
       (6) ensuring that sufficient civil maritime resources will 
     be available to meet defense deployment and essential 
     economic requirements in support of our national security 
     strategy;
       (7) ensuring that the United States maintains the 
     capability to respond unilaterally to security threats in 
     geographic areas not covered by alliance commitments and 
     otherwise meets sealift requirements in the event of crisis 
     or war;
       (8) ensuring that international agreements and practices do 
     not place United States maritime industries at an unfair 
     competitive disadvantage in world markets;
       (9) ensuring that Federal agencies promote, through 
     efficient application of laws and regulations, the readiness 
     of the United States merchant marine and supporting 
     industries; and
       (10) any other relevant maritime policies.
       (b) Date of Transmittal.--The report required under 
     subsection (a) shall be transmitted along with the 
     President's budget submission, under section 1105 of title 
     31, United States Code, for fiscal year 1997.

     SEC. 15. RELIEF FROM U.S. DOCUMENTATION REQUIREMENT FOR 3 
                   VESSELS.

       (a) In General.--Notwithstanding any other law or any 
     agreement with the United States Government, a vessel 
     described in subsection (b) may be sold to a person that is 
     not a citizen of the United States and transferred to or 
     placed under a foreign registry.
       (b) Vessels Described.--The vessels referred to in 
     subsection (a) are the following:
       (1) RAINBOW HOPE (United States official number 622178).
       (2) IOWA TRADER (United States official number 642934).
       (3) KANSAS TRADER (United States official number 634621).

     SEC. 16. VESSEL REPAIR AND MAINTENANCE PILOT PROGRAM.

       (a) In General.--The Secretary of Transportation shall 
     conduct a pilot program to evaluate the feasibility of using 
     renewable contracts for the maintenance and repair of 
     outported vessels in the Ready Reserve Force to enhance the 
     readiness of those vessels. Under the pilot program, the 
     Secretary, subject to the availability of appropriations and 
     with 6 months after the date of the enactment of this Act, 
     shall award 9 contracts for this purpose.
       (b) Use of Various Contracting Arrangements.--In conducting 
     a pilot program under this section, the Secretary of 
     Transportation shall use contracting arrangements similar to 
     those used by the Department of Defense for procuring 
     maintenance and repair of its vessels.
       (c) Contract Requirements.--Each contract with a shipyard 
     under this section shall--
       (1) subject to subsection (d), provide for the procurement 
     from the shipyard of all repair and maintenance (including 
     activation, deactivation, and drydocking) for 1 vessel in the 
     Ready Reserve Force that is outported in the geographical 
     vicinity of the shipyard;
       (2) be effective for 1 fiscal year; and
       (3) be renewable, subject to the availability of 
     appropriations, for each subsequent fiscal year through 
     fiscal year 1998.
       (d) Limitation of Work Under Contracts.--A contract under 
     this section may not provide for the procurement of operation 
     or manning for a vessel that may be procured under another 
     contract for the vessel to which section 11(d)(2) of the 
     Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1774(d)(2)) 
     applies.
       (e) Geographic Distribution.--The Secretary shall seek to 
     distribute contract awards under this section to shipyards 
     located throughout the United States.
       (f) Reports.--The Secretary shall submit to the Congress--
       (1) an interim report on the effectiveness of each contract 
     under this section in providing for economic and efficient 
     repair and maintenance of the vessel included in the 
     contract, no later than 20 months after the date of the 
     enactment of this Act; and
       (2) a final report on that effectiveness no later than 6 
     months after the termination of all contracts awarded 
     pursuant to this section.
     
[[Page H 14074]]


     SEC. 17. STREAMLINING OF CARGO ALLOCATION PROCEDURES.

       Section 901b(c)(3) of the Merchant Marine Act, 1936 (46 
     App. U.S.C. 1241f(c)(3)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``and consistent with those sections,'' and 
     inserting ``and, subject to subparagraph (B) of this 
     paragraph, consistent with those sections,''; and
       (B) by striking ``50 percent'' and inserting ``25 
     percent''; and
       (2) by striking subparagraph (B) and inserting the 
     following new subparagraphs:
       ``(B) In carrying out this paragraph, there shall first be 
     calculated the allocation of 100 percent of the quantity to 
     be procured on an overall lowest landed cost basis without 
     regard to the country of documentation of the vessel and 
     there shall be allocated to the Great Lakes port range any 
     cargoes for which it has the lowest landed cost under that 
     calculation. The requirements for United States-flag 
     transportation under section 901(b) and this section shall 
     not apply to commodities allocated under subparagraph (A) to 
     the Great Lakes port range, and commodities allocated under 
     subparagraph (A) to that port range may not be reallocated or 
     diverted to another port range to meet those requirements to 
     the extent that the total tonnage of commodities to which 
     subparagraph (A) applies that is furnished and transported 
     from the Great Lakes port range is less than 25 percent of 
     the total annual tonnage of such commodities furnished.
       ``(C) In awarding any contract for the transportation by 
     vessel of commodities from the Great Lakes port range 
     pursuant to an export activity referred to in subsection (b), 
     each agency or instrumentality--
       ``(i) shall consider expressions of freight interest for 
     any vessel from a vessel operator who meets reasonable 
     requirements for financial and operational integrity; and
       ``(ii) may not deny award of the contract to a person based 
     on the type of vessel on which the transportation would be 
     provided (including on the basis that the transportation 
     would not be provided on a liner vessel (as that term is used 
     in the Shipping Act of 1984, as in effect on November 14, 
     1995)), if the person otherwise satisfies reasonable 
     requirements for financial and operational integrity.''.


            modification to amendment offered by mr. bateman

  Mr. BATEMAN. Mr. Chairman, I ask unanimous consent that the amendment 
printed in the report of the Committee on Rules be modified in 
accordance with the document at the desk.
  The CHAIRMAN. The Clerk will report the modification.

  The Clerk read as follows:
       Modification to amendment offered by Mr. Bateman: In the 
     text proposed to be added as section 17 (page 31, beginning 
     at line 1)--
       (1) insert ``(a) Amendments.--'' before ``Section 
     901b(c)(3)'' (at page 30, line 3); and
       (2) add at the end the following new subsection:
       (b) Conforming Amendments.--(1) Paragraph (4) of section 
     901b(c) of that Act is repealed.
       (2) Paragraph (5) of that section is redesignated as 
     paragraph (4).

  Mr. BATEMAN (during the reading). Mr. Chairman, I ask unanimous 
consent that the modification be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Virginia?
  There was no objection.
  Mr. BATEMAN. Mr. Chairman, this modification request is simply to 
restore to the text of the bill language which was inadvertently 
dropped as it went through the word processing processes. There are no 
substantive changes of any kind effected and it is simply to restore 
language inadvertently omitted.
  The CHAIRMAN. Is there objection to the modification offered by the 
gentleman from Virginia [Mr. Bateman]?
  There was no objection.
  The CHAIRMAN. Pursuant to the rule, the gentleman from Virginia [Mr. 
Bateman] will be recognized for 10 minutes and a Member opposed will be 
recognized for 10 minutes.
  The Chair recognizes the gentleman from Virginia [Mr. Bateman].
  Mr. BATEMAN. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. BATEMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. BATEMAN. Mr. Chairman, this amendment makes a number of important 
but I believe noncontroversial changes to H.R. 1350. None of these 
provisions will result in additional costs to the Government, in fact 
several of the provisions will save substantial sums over a number of 
years.
  Let me comment first on a provision which will extend the authority 
for the Secretary of Transportation to offer war risk insurance. This 
critical authority expired in June of this year and this amendment will 
renew the program for 5 years. Under the program the Maritime 
Administration is authorized to provide insurance against the hazards 
of war to privately owned vessels or government-owned vessels which are 
operated by contractors when commercial insurance cannot be obtained on 
reasonable terms and conditions.
  The Navy is obligated under its various charters and operating 
contracts either to reimburse ship owners and operators for the 
additional insurance premium costs, or to provide cost free Government 
war risk coverage for that commercial insurance whenever the Government 
directs the ships into an area designated by the commercial insurance 
providers as ``war risk exclusion zones''. The Government saves money 
by substituting premium-free Government insurance. The Military Sealift 
Command has quantified the saving to the Navy resulting from the 
invocation of this program during Desert Storm at $436,302,736 million. 
This program was also invoked in during operations in Somalia and 
Haiti.
  This amendment also modifies the circumstances when commercial 
vessels may be called to assist the Defense Department. It allows for 
callup during war or national emergency but also when the Secretary of 
Defense determines that it is necessary for the National Security. This 
is authority granted to the SECDEF is important. However because any 
activation can be disruptive to commercial operations, I trust that all 
steps will be taken to minimize this disruption consistent of course 
with our military requirements.
  This amendment also grants reemployment rights to certain merchant 
seamen who volunteer to serve on vessels which are activated during a 
war, national emergency, or when required for national security 
reasons. This has the strong support of the Defense Department which 
found that because of the absence of reemployment rights it was forced 
to rely on individuals who had retired from their civilian jobs. Many 
were in their 60's and 70's. Finding qualified and physically able 
mariners from this pool became increasingly difficult. I want to 
emphasize that this program does not create veterans status or mandate 
service but simply allows an individual who volunteers for service of a 
sealift vessel that he will have his or her civilian job when they 
return. It is very similar to the current program available to our 
reserve components.
  We have also included a provision regarding the ability of carriers 
in the Maritime Security Program to offer service in the domestic 
trades. We believe that this is very substantially improved from the 
version introduced by request. At the time the committee ordered the 
bill reported, it had not resolved the issue to everyone's satisfaction 
but agreed to keep working on the issue. Compared to present law, 
section 4 of the bill as set forth in the managers amendment establish 
a new provision which significantly streamlines the regulatory regime 
regarding the ability of a carrier to receive payments under the 
program and to continue to participate in the domestic trades. This 
provision grandfathers existing operators and service levels without 
the necessity of going through another administrative hearing and also 
allows growth in the trades without a new hearing. This provision was 
developed and included in the other body's version of this bill after 
our committee's having ordered our bill reported. After having examined 
the provision, we have chosen to adopt and offer it as part of the 
managers amendment to speed consideration of this bill in the Senate. 
We know of no opposition to this provision.
  Also included within the managers amendment is a provision pertaining 
to the shipment of certain government cargoes through Great Lakes 
ports. This provision which represents a compromise developed by port 
and shipping interests, is intended to ensure that such cargoes are 
allocated to the Great Lakes and other port ranges based on fair 
competition and market conditions. This amendment is based on several 
fundamental principles. First we wish to strongly emphasize that it 
will not affect our port ranges--this is not a cargo reservation or set 
aside measure nor does this amendment contain any mechanism or 
procedure which specifically directs cargoes to the Great 

[[Page H 14075]]
Lakes or any port range. It simply amends current law to reduce 
administrative burdens by allowing title II ``food for peace'' cargoes 
to be allocated on the basis of the existing principles of lowest 
landed cost. This permits Great Lakes ports to participate, without 
diversion of cargo from our coastal ports.
  We have included a number of other provisions that seek to improve 
the operation of a number of programs at the Maritime Administration--
again none of which are controversial.
  I urge support for this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I am unaware of any 
opposition to the amendment, but I do ask unanimous consent to claim 
the 10 minutes on our side.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Mississippi?
  There was no objection.
  The CHAIRMAN. The Chair recognizes the gentleman from Mississippi 
[Mr. Taylor].

                              {time}  1500

  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield 3 minutes to the 
gentleman from Florida [Mr. Deutsch].
  Mr. DEUTSCH. Mr. Chairman, I rise today in strong support of the 
maritime Security Act. This legislation will revitalize the U.S. 
Maritime industry and significantly strengthen our military readiness.
  Maritime commerce is a major part of the engine that drives south 
Florida's economy, where Port Everglades and the Port of Miami are 
among the fastest growing hubs for international commerce. In fact--in 
my home county of Broward--nearly 80 percent of Port Everglades' 
business relies on trade with the Caribbean and Latin America. Our 
increasing reliance on international trade makes this important 
legislation for all Americans.
  The Maritime Security Act will help ensure the bright future of south 
Florida's ports and their major role in international commerce. This 
legislation is good for U.S. business and it is good for national 
security. I commend the bill's sponsors for their excellent leadership 
and urge my colleagues to support this legislation.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I reserve the balance of my 
time.
  Mr. BATEMAN. Mr. Chairman, I yield 2 minutes to the gentleman from 
Louisiana [Mr. Tauzin].
  Mr. TAUZIN. Mr. Chairman, I rise in support of the manager's 
amendment and of course in support of the general bill.
  As the bill now stands before us today, this bill reforms the 
maritime program in a way that will save us significant income, both 
for the Government and, I think, for the program. From a $200 million 
program, this becomes a $100 million program, a 50-percent-plus savings 
to the U.S. Treasury at a time when we are trying to balance the 
budget.
  More importantly, this bill makes significant changes in the law that 
have been desired for a long time. First, it simplifies the procedures 
so that payments are made on a much simpler format with much less 
bureaucracy. It simplifies and also creates flexibility for the program 
so that vessel owners under the new rules and regulations are indeed 
allowed to alter their trade routes, replace older tonnage with new 
tonnage without necessarily receiving prior Federal consent to the 
program. It creates that flexibility. Yet at the same time, it puts a 
new requirement upon vessel owners to make their vessels available not 
just in wartime but also for general sealift reasons.
  The gentleman from Virginia [Mr. Bateman] has pointed out the 
incredible importance as a maritime nation of having a maritime 
capacity for sealift purposes in times of national emergency. Finally, 
this bill ends off-budget entitlement treatment of this program and 
creates instead the ordinary congressional oversight based upon an 
annual appropriations process. For all those good reasons, this is a 
good reform of the maritime security fleet program. It is designed, as 
I said, for flexibility, simplicity, for tax savings and at the same 
time new responsibilities for a maritime nation to make sure its 
maritime fleet is available in times of need for sealift capacity. I 
urge adoption of the bill and the manager's amendment.
  Mr. BATEMAN. Mr. Chairman, I yield 1 minute to the gentleman from 
Washington [Mr. Tate].
  Mr. TATE. Mr. Chairman, I thank the chairman.
  This particular proposal, H.R. 1350, is part of our efforts to reduce 
and balance the budget. We reduced the subsidy for $225 million down to 
$100 million. But it is also necessary to maintain our independent U.S. 
overseas sealift fleet for national security reasons.
  It supports the U.S.-flag commercial vessels and their crews as well, 
but it does four important things. It ensures that foreign shipping 
interests do not gain control over our U.S. foreign trade. It 
eliminates burdensome regulations that impede the ability of U.S.-flag 
commercial vessels to compete in the global marketplace. It encourages 
the construction of commercial vessels and in U.S. shipyards. And it 
begins the annual appropriations process for the maritime industry 
instead of the 10-year process that the House passed last year. This 
bill gives us more flexibility.
  I commend this bill. It is a bipartisan bill. The chairman should be 
commended, and I look forward to passage.
  Miss COLLINS of Michigan. Mr. Chairman, I rise in support of the 
manager's amendment to the Maritime Security Act for two very simple 
reasons: It corrects an inequity, and holds out the potential of 
creating much-needed jobs for Great Lakes ports, including those of my 
own congressional district, which includes the port of Detroit.
  Since 1985, our Great Lakes ports have been effectively prevented 
from participating in the Federal food aid program, since most of that 
cargo was reserved for U.S.-flag vessels--ships that are simply too 
large to fit through the locks on the St. Lawrence Seaway. The 
manager's language in this Maritime Security Act allows shipping of 
such cargo to be awarded in the most cost-effective manner, thus 
creating a more level playing field for ports all across the country. I 
believe it will enable vessel operators serving our ports to more 
fairly compete for cargoes without being disadvantaged by federally 
imposed or administered cargo preferences.
  Consequently, Mr. Chairman, I urge support for the manager's 
amendment and passage of the maritime security bill.
  Mr. BATEMAN. Mr. Chairman, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I have no further requests 
for time, and I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment, as modified, offered 
by the gentleman from Virginia [Mr. Bateman].
  The amendment, as modified, was agreed to.


                    Amendment Offered by Mr. Bateman

  Mr. BATEMAN. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment offered by Mr. Bateman: Page 3, strike lines 2 
     and 3 and insert the following: common carrier;
       Page 6, line 22, strike ``owner or operator of'' and insert 
     ``contractor for''.
       Page 8, strike lines 16 and 17 and insert the following: 
     cargo; and
       Page 12, line 14, strike ``Within'' and insert ``No later 
     than 30 days after the date of the enactment of the Maritime 
     Security Act of 1995, the Secretary shall accept applications 
     for enrollment of vessels in the Fleet, and within''.
       Page 13, line 11, strike ``under to'' and insert ``under''.
       Page 13, line 19, strike ``under to'' and insert ``under''.
       Page 17, line 21, insert ``fair and'' after ``Agreement 
     for''.
       Page 18, line 15, insert ``it'' after ``until the time 
     that''.
       Page 24, line 4, insert ``owned, chartered, or'' after 
     ``foreign-flag vessel was''.
       Page 24, line 5, insert ``owned, chartered, or'' after 
     ``foreign-flag vessel''.
       Page 27, line 20, strike ``subpart'' and insert 
     ``subtitle''.

  Mr. BATEMAN (during the reading). Mr. Chairman, I ask unanimous 
consent that the amendment be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Virginia?
  There was no objection.
  Mr. BATEMAN. Mr. Chairman, this amendment contains clarifying and 

[[Page H 14076]]
  technical changes to the underlying text of H.R. 1350.
  The one change which I wish to note is the addition of a provision 
which requires the Secretary of Transportation to accept applications 
within 30 days of the enactment. This is identical to a provision in 
the Senate bill and is designed to speed the implementation of this 
bill by the administration.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I know of no opposition to 
the amendment. We support it.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Virginia [Mr. Bateman].
  The amendment was agreed to.
  Mr. SMITH of Michigan. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I rise in opposition to this bill. I do not believe 
that we should be here today creating a new Government program that, 
once appropriated, is going to hand out a billion dollars. Inasmuch as 
we are under the caps, that means the billion dollars is going to come 
out of other programs.
  I consider this kind of legislation corporate welfare.
  It is true that H.R. 1350 would replace the existing operational 
differential program that is more expensive, but that program is being 
phased out. The industry is expecting the nonrenewal of those 
contracts. The industry has been planning on the phaseout of that 
program. Now we are asked to pay more than $2 million a year in 
subsidies for each ship, for each of the next 9 years for every ship 
that is enrolled in this program.
  Even as we struggle to reach a balanced budget and protect the future 
of our kids and our grandkids, we are being asked to pay shipping 
companies, if it is appropriated, and I understand the Committee on 
Appropriations intends to appropriate these bills, we are going to pay 
every shipping company $21 million for every ship enrolled in this 
program. It is corporate subsidies, and we have to stop those corporate 
subsidies simply for saying, if you are going to fly an American flag, 
you can get this subsidy.
  This program and the proponents of this bill say that it is necessary 
to protect national security. But again this ignores the fact, I think, 
that the old program was being phased out. For too long we have allowed 
some of these vague national security claims to justify subsidies for 
selected industries. This year's budget makes some progress in trimming 
subsidies for military procurement, energy, agriculture, other 
industries that have been connected to national defense. Agriculture, 
certainly food and fiber, is essential for our national security in 
time of war. But we have made the decision to phase out those 
subsidies.
  Now, it is possible that other countries are going to produce the 
food and fiber; we are going to have to depend on those other 
countries. But it seems to me in this era where we have decided to slow 
down on those corporate subsidies, it is important that we not start 
new programs at this time.
  We have found that many of these subsidies have far more to do with 
well-financed special interests than military preparedness. The same I 
think is true here. It is unreasonable to believe that we cannot defend 
our country without paying shipowners more than $20 million per ship to 
fly our flag.
  As we struggle to balance the budget, I think it is outrageous to ask 
Congress and the American people to create yet another corporate 
subsidy. I ask all my colleagues' thoughtful evaluation and 
consideration of this bill.
  Mrs. MINK of Hawaii. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I rise in support of H.R. 1350, the Maritime Security 
Act of 1995.
  One of the cornerstones of national security that our country depends 
on is the ability to rapidly deploy and support our troops overseas. 
The U.S. maritime industry has played an indispensable role serving 
this purpose in every war this country has ever been involved in. 
Merchant seamen have often put their lives in danger transporting 
troops and supplies into the heart of war zones. They have served with 
courage and loyalty contributing to the American effort in every 
wartime endeavor. H.R. 1350 establishes a new Maritime Security Fleet 
Program that will allow the Federal Government to secure participating 
U.S.-flagged vessels when needed for national security purposes. H.R. 
1350 will also serve as an incentive for construction of new U.S.-
flagged vessels and for existing vessels to remain U.S.-flagged.
  The U.S. maritime industry must be maintained at an adequate level in 
order to insure the availability of carriers in times of crisis. The 
United States must not be left in a position where it will be dependent 
on foreign carriers to transport troops and supplies. History has shown 
that securing the assistance of foreign countries is frequently time 
consuming and difficult. The United States must be capable of acting on 
its own if and when it deems necessary.
  This bill will help to preserve the U.S.-flagged merchant marine and 
domestic shipbuilding industry. It will create many commercial 
opportunities for American shipbuilders and thousands of jobs for 
Americans. The United States will thereby maintain an ample supply of 
ships and skilled mariners, impeding the trend of reflagging U.S. ships 
overseas to avoid U.S. taxes and health, safety, and labor standards.
  Preservation of the U.S. maritime industry will encourage better 
working conditions on foreign vessels. The United States is among the 
highest in health, safety, and labor standards on board maritime 
vessels. Workers on foreign vessels are often envious of the 
humanitarian protections afforded to crews of U.S. vessels. If the U.S. 
maritime industry is allowed to dwindle, there will be little pressure 
on foreign ships to improve their standards.
  In addition, the current process will be streamlined. The new program 
will be less expensive than the previous program and more economical 
than if the Government builds and sustains its own fleet for these 
purposes. Vessel operators in the Maritime Security Fleet will be 
required to allow the Department of Defense to use both land and water 
transportation systems, unlike the previous program. Furthermore, both 
the Department of Defense and the Department of Transportation support 
H.R. 1350.
  Although the United States is the world's largest trading nation, the 
size of our commercial fleet ranks 16th in the world. The history of 
the U.S. maritime industry is one of pride, bravery, dedication, and 
loyalty. The revitalization of the merchant marine program is essential 
to the national security of the United States. Maximum mobility in 
times of crisis is an indispensable tool necessary to efficiently deal 
with such situations. H.R. 1350 will help to provide that mobility.
  Mr. Chairman, I urge a ``yes'' vote on this bill.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I move to strike the last 
word.
  Mr. Chairman, I yield to the gentleman from Hawaii [Mr. Abercrombie].


                         parliamentary inquiry

  Mr. BATEMAN. Mr. Chairman, I have a parliamentary inquiry.
  The CHAIRMAN. The gentleman will state it.
  Mr. BATEMAN. Mr. Chairman, I am not objecting to my colleagues having 
an understanding to speak. My understanding is all time on general 
debate has expired. All amendments that have been offered have been 
disposed of and have been adopted. Time has been yielded back. I do not 
object to my colleagues having an opportunity to rebut the last 
speaker, but I frankly think we are consuming time of the House beyond 
what is necessary.
  The CHAIRMAN. Pro forma amendments can be made at this time under an 
open rule.
  The Chair recognizes the gentleman from Mississippi [Mr. Taylor].
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield to the gentleman 
from Hawaii [Mr. Abercrombie].
  Mr. ABERCROMBIE. Mr. Chairman, I assure the gentleman from Virginia 
[Mr. Bateman], my good friend, that the only reason that I am speaking 
is to try to correct the record because of the excellent presentation 
that has been made. I very much regret the observations made by the 
gentleman from Michigan, particularly the observation that this is 
somehow a handout and that it is corporate welfare and we are being 
asked to pay more in subsidies.
  I wish some of the people who come down on the floor and make these 
observations would be available during 

[[Page H 14077]]
our hearings. On the contrary, I think if you attend the national 
security meetings, you find that we are spending in the neighborhood of 
$100 million to provide each ship for sealift capacity for the 
Department of Defense ships.

                              {time}  1515

  Now in return for the $2 million that we will be paying to the ships 
under this bill, they must be made available in times of war for 
shipment. In effect we are contracting out with the merchant marine a 
position I presume the gentleman from Michigan would support. I think 
that that is a heck of a good investment, a $2 million investment. Now 
I am perfectly willing to build more ships.
  There is supposedly a struggle to reach a balanced budget. As the 
gentleman and I have discussed at other times, I hardly think that that 
is what we are going to be doing in this discussion about the budget. 
Balancing it is about the last thing we are going to do, and if my 
colleagues want to put the word ``balance'' into the equation, we have 
to balance the American interests involved in this investment. I do not 
see this as a subsidy at all, but rather an investment in American 
ships, in American jobs, to make sure that America can get the job done 
when it needs to do it.
  Mr. SMITH of Michigan. Mr. Speaker, will the gentleman yield?
  Mr. TAYLOR of Mississippi. Reclaiming my time, Mr. Chairman, to 
reinforce the statement of my good friend from Hawaii and to answer 
what I think will be the questions of the gentleman, the 100 million 
dollars that this Nation will spend to provide for the Maritime 
Security Fleet would build 1 cargo ship for the Navy or make 50 ships 
available for the next year. That is good economics.
  I come from shipbuilding country. I would much rather build ships 
than charter them, but you cannot argue with getting 50 ships for the 
price of 1, and incidentally our Nation is building over a dozen fast 
sealift ships to help fill this need, but it will never completely 
fulfill the need. We will have to rely on a strong American merchant 
marine, and that is why I support this measure.
  I yield to the gentleman from Michigan [Mr. Smith].
  Mr. SMITH of Michigan. Mr. Chairman, I guess I have two questions. 
One would be under the definition of war, if these contracts were 
signed, would these ships be enlisted for the Bosnia, current Bosnia, 
situation?
  Mr. TAYLOR of Mississippi. Mr. Chairman, under the terms of the bill, 
any national emergency. That includes hurricanes, any national 
emergency.
  Mr. SMITH of Michigan. Does it include Bosnia?
  Mr. TAYLOR of Mississippi. It would.
  Mr. SMITH of Michigan. Let me ask one more question. It is my 
understanding that the cost of these ships is possibly as low as a 100 
million up to $200 million for some of the larger ships. Is it my 
understanding that over the period of this legislation, 9 years, we are 
looking at $21 million per ship subsidy, paying that $2.2, or $2.3 or--
--
  Mr. TAYLOR of Mississippi. If I may say to the gentleman, it is $2.3 
million for the first year, $2.1 million for each remaining, but keep 
in mind I come from shipbuilding country. We simply cannot build ships 
for the same price as we can go out and charter 50 American ships, and 
we are building some ships to fill the need, but what those ships that 
are being built, or solely for the Navy, will be dedicated for 
prepositioning, but will not fill the entire need that this country 
will need in times of war.
  Mr. BATEMAN. Mr. Chairman, will the gentleman yield?
  Mr. TAYLOR of Mississippi. I yield to the gentleman from Virginia.
  Mr. BATEMAN. I think we have got to bear in mind that we are not 
talking here about an entitlement program; we are replacing an 
entitlement program, and no one is going to get $1 million, $2 million 
or any number of millions for the next 10 years. They are going to get 
it only insofar as each successive session of Congress sees fit to 
sustain a program. This is a tremendous step to satisfy the kinds of 
objections that the gentleman is raising.
  I respect the gentleman deeply and certainly respect his opinion. All 
of us are entitled to our opinions. But we are not entitled to our 
version of the facts.
  The CHAIRMAN. Are there any further amendments to the bill?
  Mr. OBEY. Mr. Chairman, I move to strike the last word.
  (Mr. OBEY asked and was given permission to revise and extend his 
remarks.)
  Mr. OBEY. Mr. Chairman, I rise in strong support of this legislation 
with the inclusion of the Great Lakes cargo equity provision in the 
managers' amendment to the bill.
  Since 1985 when cargo preference on Federal food aid was expanded 
from 50 percent to 75 percent, Great Lakes ports have operated at a 
disadvantage because 75 percent of that cargo was taken off the top to 
be reserved for U.S.-flag vessels. Great Lakes ports don't enjoy 
regularly-scheduled ocean-going U.S. flag service because U.S. flag 
vessels are simply too large to fit through the locks on the St. 
Lawrence Seaway. Further, the Federal agencies that administer the 
program have always placed meeting the cargo preference requirement 
ahead of any concern for port range equity.
  Consequently, the cargo preference requirement has effectively shut 
our ports out of the program. Often, after the 75 percent cargo 
preference requirement was satisfied, there was insufficient cargo 
available to make it economically viable for Great Lakes ports to bid. 
In some cases, when Great Lakes ports did successfully bid for cargo, 
it might still be diverted to another port range to satisfy cargo 
preference.
  Over the past 10 years, we have sought to restore some equity to the 
Federal maritime program, and legislative provisions were enacted in 
1985 and 1990. Unfortunately, those efforts turned out to be either 
temporary or ineffective. Last year, a Great Lakes equity provision 
which I authored was included in the House-passed maritime security 
bill, but that legislation was not enacted.
  This year, with the assistance of the American Great Lakes ports and 
representatives of the maritime industry, we have developed a new 
provision to ensure equity for the Great Lakes region which is included 
in the managers' amendment to the bill. This provision will establish a 
new contracting procedure whereby our ports will get to bid on 100 
percent of Public Law-480 title II cargo. This is the most labor-
intensive type of cargo to load and unload and it represents the 
greatest job-creating potential for our workers. If shipping that cargo 
via a Great Lakes port is the most cost-effective option, then the 
Great Lakes will be awarded that cargo. Furthermore, unlike current 
law, once awarded, that cargo cannot be taken away and diverted to 
another port range to satisfy cargo preference.
  Nothing in this provision will diminish the 75-percent cargo 
preference requirement for the food aid program.
  To accomplish this, the provision requires a two-step procedure be 
utilized by the Department of Agriculture in allocating cargoes to 
ports. First, after commodity suppliers and vessel operators have 
submitted quotes or bids to the Commodity Credit Corporation, an 
initial evaluation will calculate the port allocation for 100 percent 
of the quantity to be procured on an overall lowest landed cost basis 
without regard to the flag of the vessels involved. In this 
environment, absent cargo preference requirements, if a Great Lakes 
port has won a cargo based on lowest landed cost, then it is allocated 
to that Great Lakes port and cannot be diverted. A second evaluation is 
then performed to determine the specific port allocation for the 
remaining cargo to be purchased on the basis of 75-percent overall 
cargo preference requirement.

  Other than a more competitive bid from another port range, the only 
restriction, then, that will be placed on the allocation of Public Law 
480 title II cargo to Great Lakes ports is that the total may not 
exceed more than 25 percent of the annual tonnage which represents the 
non-U.S.-flag share.
  During the 3 months of the year when the Great Lakes are frozen and 
closed to commerce the initial calculation will not be necessary. This 
is also true if no vessel operator or commodity supplier has offered a 
quote or rate through a Great Lakes port.
  Clearly, this provision moves our region of the country to a more 
level playing field. If it works as designed it will enable vessel 
operators serving our ports to fairly compete for cargoes without being 
disadvantaged by cargo preference.
  I wish to thank the majority and minority members of the National 
Security Committee for their help in reaching agreement on this Great 
Lakes cargo equity provision, especially Chairman Spence, subcommittee 
Chairman Bateman, and ranking Democrat Ron Dellums. I would also like 
to thank the staffs of each of these members, the representatives of 
maritime labor and U.S.-flag vessel operators who have been involved in 
the development of this provision, and representatives of the Great 
Lakes ports. Each of them was an essential element in the crafting of 
this provision.

[[Page H 14078]]

  As such, I urge you to join with me in supporting the important job-
creating Great Lakes cargo equity provision in the maritime security 
bill.
  The CHAIRMAN. If there are no further amendments, the question is on 
the committee amendment in the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly the Committee rose; and the Speaker pro tempore (Mr. 
Gutknecht) having assumed the chair, Mr. Dickey, Chairman pro tempore 
of the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 
1350) to amend the Merchant Marine Act, 1936 to revitalize the United 
States-flag merchant marine, and for other purposes, pursuant to House 
Resolution 287, he reported the bill back to the House with an 
amendment adopted by the Committee of the Whole.
  The SPEAKER pro tempore (Mr. Gutknecht). Under the rule, the previous 
question is ordered.
  Is a separate vote demanded on any amendment to the committee 
amendment in the nature of a substitute adopted by the Committee of the 
Whole? If not, the question is on the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill?
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

                          ____________________