[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S11951-S11954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         OCEAN SHIPPING REFORM

  Mr. PRESSLER. Mr. President, as we bring the 104th Congress to a 
close, I want to provide an update on our progress to enact ocean 
shipping reform legislation.
  Last October, I introduced S. 1356, a companion bill to H.R. 2149. I 
did so to begin Senate discussion of this important reform proposal. In 
November, I chaired a Committee on Commerce, Science, and 
Transportation hearing on the bill. The hearing revealed numerous 
issues affecting all segments of the liner ocean shipping industry that 
required further consideration. On July 18, 1996, I placed a proposed 
amendment to S. 1356 in the Record for public review and comment. After 
several additional meetings with affected segments of the ocean 
shipping industry, we have made further progress in crafting acceptable 
legislation.
  Today I will ask to have printed in the Record a revised version of 
that amendment to S. 1356. While there are a few issues requiring 
additional work, we have made substantial progress toward producing a 
bill that will gain broad support within the affected industries and 
the Congress.
  I am pleased to be joined by Senators Gorton, Lott, Hutchison, Snowe, 
Inouye, Exon, and Breaux as cosponsors in this amendment. This 
bipartisan approach demonstrates just how serious we are about 
achieving meaningful reform.
  We have run out of time in the 104th Congress to complete this 
effort. However, I intend to introduce ocean shipping reform 
legislation early in the 105th Congress. With the support of my fellow 
Commerce Committee members and other Senators, we can pass ocean 
shipping reform legislation next year.
  Mr. President, 95 percent of U.S. foreign commerce is transported via 
ocean shipping. Approximately half of this amount is shipped in bulk 
form, oil, grain, chemicals, and so forth, on an unregulated vessel 
charter basis. The remainder is shipped by container on liner vessels, 
regularly scheduled service under the Shipping Act of 1984, as 
regulated by the Federal Maritime Commission [FMC]. As the 
international liner shipping trade has evolved since 1984, many 
industry segments have requested changes in the Shipping Act of 1984 to 
keep pace with this evolution.
  My amendment, the International Ocean Shipping Act of 1996, would 
improve the Shipping Act of 1984 in several key areas. First, it would 
eliminate the filing of common carrier tariffs with the Federal 
Government. Instead of requiring Government approval, tariffs would 
become effective upon publication through private systems. My amendment 
also would increase tariff rate flexibility by easing restrictions on 
tariff rate changes and independent action by conference carriers.
  Second, it would allow for greater flexibility in service contracting 
by shippers and ocean common carriers. The amendment would allow 
individual ocean common carriers and shippers to negotiate confidential 
service contracts.
  Finally, responsibility for enforcing U.S. ocean shipping laws would 
be shifted to the Surface Transportation Board, which would be renamed 
the Intermodal Transportation Board. The Federal Maritime Commission 
would be terminated at the end of fiscal year 1998. A single 
independent agency would then administer domestic surface, rail, and 
water transportation and international ocean transportation 
regulations. The Government would catch up to the carriers and 
shippers, who are already thinking intermodally.
  Mr. President, I ask unanimous consent that my proposed amendment to 
S. 1356 be printed in the Record at the end of my statement.
  THE PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1).
  There being no objection, the text of the amendment was ordered to be 
printed in the Record, as follows:


                            amendment no. --

(Purpose: To amend the Shipping Act of 1984 to encourage competition in 
international shipping and growth of United States imports and exports, 
                        and for other purposes)

       Strike out all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``International Ocean Shipping 
     Act of 1996'' .

     SEC. 2. EFFECTIVE DATE.

        Except as otherwise expressly provided in this Act, this 
     Act and the amendments made by this Act take effect on 
     October 1, 1997.
            TITLE I--AMENDMENTS TO THE SHIPPING ACT OF 1984

     SEC. 101. PURPOSE.

       Section 2 of the Shipping Act of 1984 (46 U.S.C. App. 1701) 
     is amended by--
       (1) striking ``and'' after the semicolon in paragraph (2);
       (2) striking ``needs.'' in paragraph (3) and inserting 
     ``needs; and''; and
       (3) adding at the end thereof the following:
       ``(4) to promote the growth and development of United 
     States exports through competitive and efficient ocean 
     transportation and by placing a greater reliance on the 
     marketplace.''.

     SEC. 102. DEFINITIONS.

       (a) In General.--Section 3 of the Shipping Act of 1984 (46 
     U.S.C. App. 1702) is amended by--
       (1) striking paragraph (5) and redesignating paragraph (4) 
     as paragraph (5);
       (2) inserting after paragraph (3) the following:
       ``(4) `Board' means the Intermodal Transportation Board.'';
       (3) striking ``the government under whose registry the 
     vessels of the carrier operate;'' in paragraph (8) and 
     inserting ``a government;'';
       (4) striking paragraph (9) and inserting the following:
       ``(9) `deferred rebate' means a return by a common carrier 
     of any portion of freight

[[Page S11952]]

     money to a shipper as a consideration for that shipper giving 
     all, or any portion, of its shipments to that or any other 
     common carrier over a fixed period of time, the payment of 
     which is deferred beyond the completion of service for which 
     it is paid, and is made only if the shipper has agreed to 
     make a further shipment or shipments with that or any other 
     common carrier.'';
       (5) striking ``in an unfinished or semifinished state that 
     require special handling moving in lot sizes too large for a 
     container'' in paragraph (11);
       (6) striking ``paper board in rolls, and paper in rolls.'' 
     in paragraph (11) and inserting ``paper and paper board in 
     rolls or in pallet or skid-sized sheets.'';
       (7) striking ``conference, other than a service contractor 
     contract based upon time volume rates,'' in paragraph (14), 
     and inserting ``conference'';
       (8) by striking ``conference.'' in paragraph (14) and 
     inserting ``conference and the contract provides for a 
     deferred rebate arrangement.'';
       (9) striking paragraph (17) and redesignating paragraphs 
     (18) through (27) as paragraphs (17) through (26), 
     respectively;
       (10) striking paragraph (18), as redesignated, and 
     inserting the following:
       ``(18) `ocean freight forwarder' means a person that--
       ``(A)(i) in the United States, dispatches shipments from 
     the United States via a common carrier and books or otherwise 
     arranges space for those shipments on behalf of shippers; and
       ``(ii) processes the documentation or performs related 
     activities incident to those shipments; or
       ``(B) acts as a common carrier that does not operate the 
     vessels by which the ocean transportation is provided, and is 
     a shipper in its relationship with an ocean common 
     carrier.'';
       (11) striking paragraph (20), as redesignated and inserting 
     the following:
       ``(20) `service contract' means a written contract, other 
     than a bill of lading or a receipt, between one or more 
     shippers and an individual ocean common carrier or an 
     agreement between or among ocean common carriers in which the 
     shipper or shippers makes a commitment to provide a certain 
     volume or portion of cargo over a fixed time period, and the 
     ocean common carrier or the agreement commits to a certain 
     rate or rate schedule and a defined service level, such as 
     assured space, transit time, port rotation, or similar 
     service features. The contract may also specify provisions in 
     the event of nonperformance on the part of any party.'';
       (12) striking paragraph (22), as redesignated, and 
     inserting the following:
       ``(22) `shipper' means:
       ``(A) a cargo owner;
       ``(B) the person for whose account the ocean transportation 
     is provided;
       ``(C) the person to whom delivery is to be made;
       ``(D) a shippers' association; or
       ``(E) an ocean freight forwarder, as defined in paragraph 
     (18)(B) of this section, that accepts responsibility for 
     payment of the ocean freight.''.
       (b) Special Effective Date.--The amendments made by 
     subsection (a) take effect on the date of enactment, except 
     that the amendments made by paragraphs (1) and (2) take 
     effect on October 1, 1998.

     SEC. 103. AGREEMENTS WITHIN THE SCOPE OF THE ACT.

       Section 4(a) of the Shipping Act of 1984 (46 U.S.C. App. 
     1703(a)) is amended by--
       (1) striking ``operators or non-vessel operating common 
     carriers;'' in paragraph (5) and inserting ``operators;'';
       (2) striking ``and'' in paragraph (6) and inserting ``or''; 
     and
       (3) striking paragraph (7) and inserting the following:
       ``(7) discuss and agree upon any matter related to service 
     contracts.''.

     SEC. 104. AGREEMENTS.

       Section 5(b)(8) of the Shipping Act of 1984 (46 U.S.C. App. 
     1704) is amended to read as follows:
       ``(8) provide that any member of the conference may take 
     independent action on any rate or service item upon not more 
     than 5 calendar days' notice to the conference and that, 
     except for exempt commodities not published in the conference 
     tariff, the conference will include the new rate or service 
     item in its tariff for use by that member, effective no later 
     than 5 calendar days after receipt of the notice, and by any 
     other member that notifies the conference that it elects to 
     adopt the independent rate or service item on or after its 
     effective date, in lieu of the existing conference tariff 
     provision for that rate or service item. A conference 
     agreement may not require a member of the agreement to 
     disclose the existence of an existing individual service 
     contract under section 8(c)(3) of this Act or a negotiation 
     on an individual service contract under section 8(c)(3) of 
     this Act. A conference agreement may not prohibit members of 
     the agreement from negotiating and entering into individual 
     service contracts under section 8(c)(3) of this Act.''.

     SEC. 105. EXEMPTION FROM ANTITRUST LAWS.

       (a) In General.--Section 7 of the Shipping Act of 1984 (46 
     U.S.C. App. 1706) is amended by--
       (1) inserting ``or publication'' in paragraph (2) of 
     subsection (a) after ``filing'';
       (2) inserting ``Federal Maritime'' before ``Commission'' in 
     paragraph (6) of subsection (a);
       (3) striking ``or'' at the end of subsection (b)(2);
       (4) striking ``States.'' at the end of subsection (b)(5) 
     and inserting ``States; or''; and
       (5) adding at the end of subsection (b) the following: 
     ``(4) to any loyalty contract.''.
       (b) Special Effective Date.--The amendments made by 
     subsection (a) take effect on the date of enactment except 
     the amendment made by paragraph (2) of subsection (a) takes 
     effect on October 1, 1998.

     SEC. 106. TARIFFS.

       Section 8 of the Shipping Act of 1984 (46 U.S.C. App. 1707) 
     is amended by--
       (1) inserting ``new assembled motor vehicles,'' after 
     ``scrap,'' in subsection (a)(1);
       (2) striking ``file with the Commission, and'' in 
     subsection (a)(1);
       (3) striking ``inspection,'' in subsection (a)(1) and 
     inserting ``inspection in an automated tariff system approved 
     by the Board,'';
       (4) inserting before ``However,'' in subsection (a)(1) the 
     following: ``An ocean freight forwarder described in section 
     3(18)(B) of this Act that is not, or whose assets are not, 
     directly or indirectly, owned or controlled by an ocean 
     common carrier is exempt from the requirements of this 
     subsection.'';
       (5) striking ``tariff filings'' in subsection (a)(1) and 
     inserting ``tariffs'';
       (6) striking ``loyalty contract,'' in subsection (a)(1)(E);
       (7) striking paragraph (2) of subsection (a) and inserting 
     the following:
       ``(2) Tariffs shall be made available electronically to any 
     person, without time, quantity, or other limitation, through 
     appropriate access from remote terminals, and a reasonable 
     charge may be assessed for such access. No charge may be 
     assessed for access by a Federal agency.'';
       (8) striking subsection (c) and inserting the following:
       ``(c) Service Contracts.--
       ``(1) In general.--An individual ocean common carriers or 
     an agreement between or among ocean common carriers may enter 
     into a service contract with one or more shippers subject to 
     the requirements of this Act. The exclusive remedy for a 
     breach of a contract entered into under this subsection shall 
     be an action in an appropriate court, unless the parties 
     otherwise agree.
       ``(2) Agreement service contracts.--Except for service 
     contracts dealing with bulk cargo, forest products, recycled 
     metal scrap, new assembled motor vehicles, waste paper, or 
     paper waste, each contract entered into under this subsection 
     by an agreement shall be filed with the Commission, and at 
     the same time, a concise statement of its essential terms 
     shall be filed with the Commission and made available to the 
     general public in tariff format, and those essential terms 
     shall be available to all shippers similarly situated. The 
     essential terms shall include--
       ``(A) the origin and destination port ranges in the case of 
     port-to-port movements, and the origin and destination 
     geographic areas in the case of through intermodal movements;
       ``(B) the commodity or commodities involved;
       ``(C) the minimum volume;
       ``(D) the line-haul rate;
       ``(E) the duration;
       ``(F) service commitments; and
       ``(G) the liquidated damages for nonperformance, if any.
       ``(3) Individual Service Contracts.--Notwithstanding 
     subsection (a) of this section and paragraph (2) of this 
     subsection, service contracts entered into under this 
     subsection between one or more shippers and an individual 
     ocean common carrier may be made on a confidential basis. 
     Service contracts entered into under this subsection shall be 
     retained by the parties of the contract for 3 years 
     subsequent to the expiration of the contract.'';
       (9) striking ``30 days after filing with the Commission'' 
     in the first sentence of subsection (d) and inserting ``21 
     calendar days after publication'';
       (10) striking ``30'' in the second sentence of subsection 
     (d) and inserting ``21''; and
       (11) striking ``and filing with the Commission'' in the 
     last sentence of subsection (d);
       (12) striking subsection (e) and inserting the following:
       ``(e) Marine Terminal Operator Schedules.--A marine 
     terminal operator may make available to the public a schedule 
     of rates, regulations, and practices, including limitations 
     of liability for cargo loss or damage, pertaining to 
     receiving, delivering, handling, or storing property at its 
     marine terminal. Any such schedule made available to the 
     public shall be enforceable as an implied contract, subject 
     to section 10 of this Act, without proof of actual knowledge 
     of its provisions.''; and
       (13) striking subsection (f) and inserting the following:
       ``(f) Regulations.--The Commission shall by regulation 
     prescribe the requirements for automated tariff systems 
     established under this section and shall approve any 
     automated tariff system that complies with those 
     requirements. The Commission shall disapprove or, after 
     periodic review, cancel any automated tariff system that 
     fails to meet the requirements established under this 
     section. The Commission shall by regulation prescribe the 
     form and manner in which marine terminal operator schedules 
     authorized by this section shall be published.''.

     SEC. 107. AUTOMATED TARIFF FILING AND INFORMATION SYSTEM.

       Section 502 of the High Seas Driftnet Fisheries Enforcement 
     Act (46 U.S.C. App. 1707a) is repealed.

[[Page S11953]]

     SEC. 108. CONTROLLED CARRIERS.

       Section 9 of the Shipping Act of 1984 (46 U.S.C. App. 1708) 
     is amended by--
       (1) striking ``filed with the Commission'' in the first 
     sentence of subsection (a) and inserting a comma and ``or 
     charge or assess rates'';
       (2) striking ``or maintain'' in the first sentence of 
     subsection (a) and inserting ``maintain, or enforce'';
       (3) striking ``disapprove'' in the third sentence of 
     subsection (a) and inserting ``prohibit the publication or 
     use of''; and
       (4) striking ``filed by a controlled carrier that have been 
     rejected, suspended, or disapproved by the Commission'' in 
     the last sentence of subsection (a) and inserting ``that have 
     been suspended or prohibited by the Board'';
       (5) striking ``may take into account appropriate factors 
     including, but not limited to, whether--'' in subsection (b) 
     and inserting ``shall take into account whether'';
       (6) striking ``(1)'' in paragraph (1) of subsection (b) and 
     resetting the text of paragraph (1) as a full measure 
     continuation of the matter preceding it;
       (7) striking ``filed'' each place it appears in subsection 
     (b) and inserting ``published or assessed'';
       (8) striking ``similar trade;'' in subsection (b) and 
     inserting ``similar trade. The Board may also take into 
     account other appropriate factors, including, but not limited 
     to, whether--'';
       (9) redesignating paragraphs (2), (3), and (4) of 
     subsection (b) as paragraphs (1), (2), and (3), respectively; 
     and
       (10) striking ``filing with the Commission'' in subsection 
     (c) and inserting ``publication'';
       (11) striking ``Disapproval.--'' in subsection (d) and 
     inserting ``Prohibition of Rates.--Within 120 days after the 
     receipt of information requested by the Board under this 
     section, the Board shall determine whether the rates, 
     charges, classifications, rules, or regulations of a 
     controlled carrier may be unjust and unreasonable.'' ;
       (12) striking ``filed'' in subsection (d) and inserting 
     ``published or assessed'';
       (13) striking ``may'' in the second sentence of subsection 
     (d), as amended by paragraph (11) of this section, and 
     inserting ``shall'';
       (14) striking ``disapproved'' in such sentence and 
     inserting ``prohibited'';
       (15) striking ``60'' in subsection (d) and inserting 
     ``30'';
       (16) inserting ``controlled'' after ``affected'' in 
     subsection (d);
       (17) striking ``file'' in subsection (d) and inserting 
     ``publish''.
       (18) striking ``disapproval'' in subsection (e) and 
     inserting ``prohibition'';
       (19) inserting ``or'' after the semicolon in subsection 
     (f)(1);
       (20) striking paragraphs (2), (3), and (4) of subsection 
     (f); and
       (21) redesignating paragraph (5) of subsection (f) as 
     paragraph (2).

     SEC. 109. PROHIBITED ACTS.

       (a) Section 10(b) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1709(b)) is amended by--
       (1) striking paragraphs (1) through (3);
       (2) redesignating paragraph (4) as paragraph (1);
       (3) inserting after paragraph (1), as redesignated, the 
     following:
       ``(2) provide service in the liner trade that--
       `(A) is not in accordance with the rates contained in a 
     tariff published or a service contract entered into under 
     section 8 of this Act unless excepted or exempted under 
     section 8(a)(1) or 16 of this Act; or
       ``(B) is under a tariff or service contract which has been 
     suspended or prohibited by the Board under section 9 or 11a 
     of this Act;'';
       (4) redesignating paragraphs (5) through (8) as paragraphs 
     (3) through (6), respectively;
       (5) striking paragraph (9) and redesignating paragraphs 
     (10) through (16) as paragraphs (7) through (13), 
     respectively;
       (6) in paragraph (7), as redesignated, inserting ``except 
     for service contracts,'' before ``demand,'';
       (7) in paragraph (9), as redesignated --
       (A) inserting ``port, class or type of shipper, ocean 
     freight forwarder,'' after ``locality,''; and
       (B) inserting ``except for service contracts,'' after 
     ``deal or,'';
       (8) striking ``a non-vessel-operating common carrier'' each 
     place it appears in paragraph (11) and paragraph (12), as 
     redesignated, and inserting ``an ocean freight forwarder'';
       (9) striking ``sections 8 and 23'' in paragraph (11) and 
     paragraph (12), as redesignated, and inserting ``section 
     19'';
       (10) striking ``a tariff and'' in paragraphs (11) and (12), 
     as redesignated;
       (11) striking ``paragraph (16)'' in the matter appearing 
     after paragraph (13), as redesignated, and inserting 
     ``paragraph (13)''; and
       (12) inserting ``the Commission,'' after ``United States,'' 
     in such matter.
       (b) Section 10(c)(5) of the Shipping Act of 1984(46 U.S.C. 
     App. 1709(c)(5)) is amended by inserting ``as defined by 
     section 3(18)(A) of this Act,'' before ``or limit''.
       (c) Section 10(d)(3) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1709(d)(3)) is amended by striking ``subsection (b)(11), 
     (12), and (16) of this section apply to'' and inserting 
     ``subsection (b)(8), (9), and (13) of this section apply to 
     ocean freight forwarders and''.

     SEC. 110. COMPLAINTS, INVESTIGATIONS, REPORTS, AND 
                   REPARATIONS.

       Section 11(g) of the Shipping Act of 1984 (46 U.S.C. App. 
     1710(g)) is amended by--
       (1) striking ``10(b)(5) or (7)'' and inserting 
     ``10(b)(3)''; and
       (2) striking ``10(b)(6)(A) or (B)'' and inserting 
     ``10(b)(4).''.

     SEC. 111. DEFINITIONS.

       Section 10002 of the Foreign Shipping Practices Act of 1988 
     (46 U.S.C. App. 1710a) is amended by--
       (1) striking ``non-vessel-operating common carrier,'' in 
     subsection (a)(1) and inserting ``ocean freight forwarder,'';
       (2) striking ``non-vessel-operating common carrier 
     operations,'' in subsection (a)(4);
       (3) striking ``filed with the Commission,'' in subsection 
     (e)(1)(B) and inserting ``and service contracts,'';
       (4) inserting ``and service contracts'' after ``tariffs'' 
     the second place it appears in subsection (e)(1)(B); and
       (5) striking ``13(b)(5) of the Shipping Act of 1984 (46 
     App. U.S.C. 1712(b)(5))'' in subsection (h) and inserting 
     ``13(b)(3) of the Shipping Act of 1984 (46 U.S.C. App. 
     1712(b)(3))''.

     SEC. 112. SUBPOENAS AND DISCOVERY.

       Section 12(a)(2) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1711 (a)(2)) is amended by striking ``evidence.'' and 
     inserting ``evidence, including individual service contracts 
     described in section 8(c)(3) of this Act.''.

     SEC. 113. PENALTIES.

       (a) Section 13(a) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1712(a)) is amended by adding at the end thereof the 
     following: ``The amount of any penalty imposed upon a common 
     carrier under this subsection shall constitute a lien upon 
     the vessels of the common carrier and any such vessel may be 
     libeled therefor in the district court of the United States 
     for the district in which it may be found.''.
       (b) Section 13(b) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1712(b)) is amended by--
       (1) striking paragraphs (1) through (3) and redesignating 
     paragraphs (4) through (6) as paragraphs (2) through (4);
       (2) inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) If the Commission finds, after notice and an 
     opportunity for a hearing, that a common carrier has failed 
     to supply information ordered to be produced or compelled by 
     subpoena under section 12 of this Act, the Commission may 
     request that the Secretary of the Treasury refuse or revoke 
     any clearance required for a vessel operated by that common 
     carrier. Upon request by the Commission, the Secretary of the 
     Treasury shall, with respect to the vessel concerned, refuse 
     or revoke any clearance required by section 4197 of the 
     Revised Statutes of the United States (46 U.S.C. App. 91)''; 
     and
       (3) striking ``penalties authorized under paragraphs (1), 
     (2), and (3) of this subsection.'' in paragraph (3), as 
     redesignated, and inserting ``penalty authorized under 
     paragraph (1) of this subsection.''.
       (c) Section 13(f)(1) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1712(f)(1)) is amended by striking ``section 10(a)(1), 
     (b)(1), or (b)(4)'' and inserting ``section 10(a)(1) or 
     10(b)(1).''.

     SEC. 114. REPORTS AND CERTIFICATES.

       Section 15 of the Shipping Act of 1984 (46 U.S.C. App. 
     1714) is amended by--
       (1) striking ``and certificates'' in the section heading;
       (2) striking ``(a) Reports.--'' in the subsection heading; 
     and
       (3) striking subsection (b).

     SEC. 115. EXEMPTIONS.

       Section 16 of the Shipping Act of 1984 (46 U.S.C. App. 
     1715) is amended by striking ``substantially impair effective 
     regulation by the Commission, be unjustly discriminatory, 
     result in substantial reduction in competition, or be 
     detrimental to commerce.'' and inserting ``result in 
     substantial reduction in competition or be detrimental to 
     commerce.''.

     SEC. 116. AGENCY REPORTS AND ADVISORY COMMISSION.

       Section 18 of the Shipping Act of 1984 (46 U.S.C. App. 
     1717) is repealed.

     SEC. 117. OCEAN FREIGHT FORWARDERS.

       Section 19 of the Shipping Act of 1984 (46 U.S.C. App. 
     1718) is amended by--
       (1) striking subsection (a) and inserting the following:
       ``(a) License.--No person in the United States may act as 
     an ocean freight forwarder unless that person holds a license 
     issued by the Commission. The Commission shall issue a 
     forwarder's license to any person that the Commission 
     determines to be qualified by experience and character to act 
     as an ocean freight forwarder.'';
       (2) redesignating subsections (b), (c), and (d) as 
     subsections (c), (d), and (e), respectively;
       (3) inserting after subsection (a) the following:
       ``(b) Financial Responsibility.--
       ``(1) No person may act as an ocean freight forwarder 
     unless that person furnishes a bond, proof of insurance, or 
     other surety in a form and amount determined by the 
     Commission to insure financial responsibility that is issued 
     by a surety company found acceptable by the Secretary of the 
     Treasury.
       ``(2) A bond, insurance, or other surety obtained pursuant 
     to this section--
       ``(A) shall be available to pay any judgment for damages 
     against an ocean freight forwarder arising from its 
     transportation-related activities under section 3(18) of this 
     Act, or any order for reparation issued pursuant to section 
     11 or 14 of this Act, or any penalty assessed pursuant to 
     section 13 of this Act; and
       ``(B) may be available to pay any claim against an ocean 
     freight forwarder arising

[[Page S11954]]

     from its transportation-related activities under section 
     3(18) of this Act that is deemed valid by the surety company 
     after providing the ocean freight forwarder the opportunity 
     to address the validity of the claim.
       ``(3) An ocean freight forwarder not domiciled in the 
     United States shall designate a resident agent in the United 
     States for receipt of service of judicial and administrative 
     process, including subpoenas.'';
       (4) striking ``a bond in accordance with subsection 
     (a)(2)'' in subsection (c), as redesignated, and inserting 
     ``a bond, proof of insurance, or other surety in accordance 
     with subsection (b)(1)'';
       (5) striking ``forwarder'' in paragraph (1) of subsection 
     (e) and inserting ``forwarder, as described in section 
     3(18),'';
       (6) striking ``license'' in paragraph (1) of subsection (e) 
     and inserting ``license, if required by subsection (a),'';
       (7) striking paragraph (3) of subsection (e), as 
     redesignated, and redesignating paragraph (4) as paragraph 
     (3); and
       (8) adding at the end of subsection (e), as redesignated, 
     the following:
       ``(4) No conference or group of 2 or more ocean common 
     carriers in the foreign commerce of the United States that is 
     authorized to agree upon the level of compensation paid to an 
     ocean freight forwarder, as defined in section 3(18)(A) of 
     this Act, may--
       ``(A) deny to any member of the conference or group the 
     right, upon notice of not more than 5 calendar days, to take 
     independent action on any level of compensation paid to an 
     ocean freight forwarder, as so defined; or
       ``(B) agree to limit the payment of compensation to an 
     ocean freight forwarder, as so defined, to less than 1.25 
     percent of the aggregate of all rates and charges which are 
     applicable under a tariff and which are assessed against the 
     cargo on which the forwarding services are provided.''.

     SEC. 118. CONTRACTS, AGREEMENTS, AND LICENSES PRIOR TO 
                   SHIPPING LEGISLATION.

       Section 20 of the Shipping Act of 1984 (46 U.S.C. App. 
     1719) is amended by--
       (1) striking subsection (d) and inserting the following:
       ``(d) Effects on Certain Agreements and Contracts.--All 
     agreements, contracts, modifications, and exemptions 
     previously issued, approved, or effective under the Shipping 
     Act, 1916, or the Shipping Act of 1984 shall continue in 
     force and effect as if issued or effective under this Act, as 
     amended by the International Ocean Shipping Act of 1996, and 
     all new agreements, contracts, and modifications to existing, 
     pending, or new contracts or agreements shall be considered 
     under this Act, as amended by the International Ocean 
     Shipping Act of 1996.'';
       (2) inserting the following at the end of subsection (e):
       ``(3) The International Ocean Shipping Act of 1996 shall 
     not affect any suit--
       ``(A) filed before the effective date of that Act, or
       ``(B) with respect to claims arising out of conduct engaged 
     in before the effective date of that Act filed within 1 year 
     after the effective date of that Act.
       ``(4) Regulations issued by the Federal Maritime Commission 
     shall remain in force and effect where not inconsistent with 
     this Act, as amended by the International Ocean Shipping Act 
     of 1996.''.

     SEC. 119. SURETY FOR NON-VESSEL-OPERATING COMMON CARRIERS.

       Section 23 of the Shipping Act of 1984 (46 U.S.C. App. 
     1721) is repealed.

     SEC. 120. REPLACEMENT OF FEDERAL MARITIME COMMISSION WITH 
                   INTERMODAL TRANSPORTATION BOARD.

       Effective October 1, 1998, the Shipping Act of 1984 (46 
     U.S.C. App. 1701 et seq.) is amended by--
       (1) striking ``Federal Maritime Commission'' each place it 
     appears, except in section 20, and inserting ``Intermodal 
     Transportation Board'';
       (2) striking ``Commission'' each place it appears 
     (including chapter and section headings), except in sections 
     7(a)(6) and 20, and inserting ``Board''; and
       (3) striking ``Commission's'' each place it appears and 
     inserting ``Board's''.
 TITLE II--TRANSFER OF FUNCTIONS OF THE FEDERAL MARITIME COMMISSION TO 
                  THE INTERMODAL TRANSPORTATION BOARD

     SEC. 201. TRANSFER TO THE INTERMODAL TRANSPORTATION BOARD.

       (a) Change of Name of Surface Transportation Board to 
     Intermodal Transportation Board.--The ICC Termination Act of 
     1995 (Pub. L. 104-88) is amended by striking ``Surface 
     Transportation Board'' each place it appears and inserting 
     ``Intermodal Transportation Board''.
       (b) Functions of the Federal Maritime Commission.--All 
     functions, powers and duties vested in the Federal Maritime 
     Commission shall be administered by the Intermodal 
     Transportation Board.
       (c) Regulations.--No later than July 1, 1997, the Federal 
     Maritime Commission, in consultation with the Surface 
     Transportation Board, shall prescribe final regulations to 
     implement the changes made by this Act.
       (d) Authorization of Appropriations for Fiscal Year 1997.--
     There is authorized to be appropriated to the Federal 
     Maritime Commission, $19,000,000 for fiscal year 1997.
       (e) Commissioners of the Federal Maritime Commission.--
     Subject to the political party restrictions of section 701(b) 
     of title 49, United States Code, the 2 Commissioners of the 
     Federal Maritime Commission whose terms have the latest 
     expiration dates shall become members of the Intermodal 
     Transportation Board. Of the 2 members of the Intermodal 
     Transportation Board first appointed under this subsection, 
     the one with the first expiring term (as a member of the 
     Federal Maritime Commission) shall serve for a term ending 
     December 31, 2000, and the other shall serve for a term 
     ending December 31, 2002. Effective October 1, 1998, the 
     right of any Federal Maritime Commission commissioner other 
     than those designated under this subsection to remain in 
     office is terminated.
       (f) Membership of the Intermodal Transportation Board.--
       (1) Number of members.--Section 701(b)(1) of title 49, 
     United States Code, is amended by--
       (A) striking ``3 members'' and inserting ``5 members''; and
       (B) striking ``2 members'' and inserting ``3 members''.
       (2) Qualifications.--Section 701(b)(2) of title 49, United 
     States Code, is amended by inserting after ``sector.'' the 
     following: ``Effective October 1, 1998, at least 2 members 
     shall be individuals with--
       ``(A) professional standing and demonstrated knowledge in 
     the fields of maritime transportation or its regulation; or
       ``(B) professional or business experience in the maritime 
     transportation private sector, including marine terminal or 
     public port operation.''.
       (g) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1998, except as otherwise 
     provided.
       TITLE III--AMENDMENTS TO OTHER SHIPPING AND MARITIME LAWS

     SEC. 301. AMENDMENTS TO SECTION 19 OF THE MERCHANT MARINE 
                   ACT, 1920.

       (a) In General.--Section 19 of the Merchant Marine Act, 
     1920 (46 U.S.C. App. 876) is amended by--
       (1) striking ``Federal Maritime Commission'' each place it 
     appears and inserting ``Intermodal Transportation Board'';
       (2) inserting ``ocean freight'' after ``solicitations,'' in 
     subsection (1)(b);
       (3) striking ``non-vessel-operating common carrier 
     operations,'' in subsection (1)(b);
       (4) striking ``methods or practices'' and inserting 
     ``methods, pricing practices, or other practices'' in 
     subsection (1)(b);
       (5) striking ``tariffs filed with the Commission'' in 
     subsection (9)(b) and inserting ``tariffs and service 
     contracts''; and
       (6) striking ``Commission'' each place it appears 
     (including the heading) and inserting ``Board''.
       (b) Special Effective Date.--The amendments made by 
     subsection (a) take effect on the date of enactment of this 
     Act, except that the amendments made by paragraphs (1) and 
     (7) of that subsection take effect on October 1, 1998.

     SEC. 302. TECHNICAL CORRECTIONS.

       (a) Public Law 89-777.--
       (1) The Act of November 6, 1966, (Pub. L. 89-777; 80 Stat. 
     1356; 46 U.S.C. App. 817 et seq.) is amended by--
       (A) striking ``Shipping Act, 1916'' in section 2(d) and 
     inserting ``Shipping Act of 1984'';
       (B) striking ``Shipping Act, 1916'' in section 3(d) and 
     inserting ``Shipping Act of 1984'';
       (C) striking ``Federal Maritime Commission'' each place it 
     appears and inserting ``Intermodal Transportation Board''; 
     and
       (D) striking ``Commission'' each place it appears and 
     inserting ``Board''.
       (2) The amendments made by subparagraphs (A) and (B) of 
     paragraph (1) take effect on September 30, 1996. The 
     amendments made by subparagraphs (C) and (D) of paragraph (1) 
     take effect on October 1, 1998.
       (b) Title 28, United States Code, and Cross Reference.--
       (1) Section 2341 of title 28, United States Code, is 
     amended by--
       (A) striking ``Commission, the Federal Maritime 
     Commission,'' in paragraph (3)(A); and
       (B) striking ``Surface'' in paragraph (3)(E) and inserting 
     ``Intermodal''.
       (2) Section 2342 of such title is amended by--
       (A) striking paragraph (3) and inserting the following:
       ``(3) all rules, regulations, or final orders of the 
     Secretary of Transportation issued pursuant to section 2, 9, 
     37, 41, or 43 of the Shipping Act, 1916 (46 U.S.C. App. 802, 
     803, 808, 835, 839, or 841a) or pursuant to part B or C of 
     subtitle IV of title 49 (49 U.S.C. 13101 et seq. or 15101 et 
     seq.);''; and
       (B) striking paragraph (5) and inserting the following:
       ``(5) all rules, regulations, or final orders of the 
     Intermodal Transportation Board--
       ``(A) made reviewable by section 2321 of this title; or
       ``(B) pursuant to--
       ``(i) section 19 of the Merchant Marine Act, 1920 (46 
     U.S.C. App. 876);
       ``(ii) section 14 or 17 of the Shipping Act of 1984 (46 
     U.S.C. App. 1713 or 1716); or
       ``(iii) section 2(d) or 3(d) of the Act of November 6, 1966 
     (46 U.S.C. App. 817d(d) or 817e(d));''.
       (3) Section 10002(i) of the Foreign Shipping Practices Act 
     of 1988 (46 U.S.C. 1710a(i)) is amended by striking 
     ``2342(3)(B)'' and inserting ``2342(5)(B)''.
       (c) Tariff Act of 1930.--Section 641(i) of the Tariff Act 
     of 1930 (19 U.S.C. 1641) is repealed.
     
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