[Congressional Record Volume 143, Number 29 (Monday, March 10, 1997)]
[Senate]
[Pages S2079-S2084]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. HUTCHISON (for herself, Mr. Lott, Mr. Breaux and Mr. 
        Gorton):
  S. 414. A bill to amend the Shipping Act of 1984 to encourage 
competition in international shipping and growth of U.S. imports and 
exports, and for other purposes; to the Committee on Commerce, Science, 
and Transportation.


                 the OCEAN SHIPPING REFORM ACT OF 1997

  Mrs. HUTCHISON. Mr. President, last Congress, we made substantial 
progress toward enacting ocean shipping reform. The House passed a bill 
and, under the leadership of Senators Lott and Pressler, we in the 
Senate were presented with a very workable framework for ocean shipping 
reform. I am pleased to make it the framework upon which we base the 
bill which Senators Lott, Gorton, Breaux, and I are introducing today. 
It is my hope that we can develop the consensus necessary to pass this 
measure in a timely way.
  The next step in this process is the hearing later this month before 
the Surface Transportation and Merchant Marine Subcommittee, which I 
chair. I am looking forward to hearing from those who will be impacted 
by our legislative efforts. Ninety-five percent of U.S. foreign 
commerce is transported via ocean shipping. Half of this trade, which 
is carried by container liner vessels with scheduled service and is 
regulated under the Shipping Act of 1984, is affected by these reforms.
  This legislation represents an important opportunity to ease the hand 
of regulation on a significant sector of commerce, and eliminate a 
regulatory agency altogether. Our bill terminates the Federal Maritime 
Commission and consolidates remaining maritime regulatory 
responsibilities into a renamed Surface Transportation Board. Thus, we 
will eliminate one regulatory agency and improve another by making its 
mission more reflective of the shipping world where commerce moves 
intermodally--over rail, road, and ocean.
  This bill allows for greater flexibility in service contracting by 
shippers and

[[Page S2080]]

ocean common carriers, which will permit freight to move at the most 
competitive prices while we continue to protect against discriminatory 
practices. To this end, we continue to require a form of tariff 
publication. However, it is much more flexible than current tariff 
filing. Tariffs become effective upon publication through a private 
system, not the Government, and tariff changes do not require 
Government approval. This puts the maritime industry on similar footing 
as other transportation industries which we have deregulated in recent 
years, providing carriers with much greater rate flexibility. At the 
same time, we preserve protections required to counter the effects of 
ocean carrier antitrust immunity and foreign carrier involvement in 
this segment of commerce.
  I look forward to working with colleagues on both sides of the aisle 
to pass this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 414

       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 ``Ocean Shipping Reform Act of 
     1997'' .

     SEC. 2. EFFECTIVE DATE.

        Except as otherwise expressly provided in this Act, this 
     Act and the amendments made by this Act take effect on March 
     1, 1998.
            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 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 contract or 
     contract based upon time-volume rates,'' in paragraph (14) 
     and inserting ``conference'';
       (8) striking ``conference.'' in paragraph (14) and 
     inserting ``conference and the contract provides for a 
     deferred rebate arrangement.'';
       (9) striking ``carrier.'' in paragraph (15) and inserting 
     ``carrier, or in connection with a common carrier and a water 
     carrier subject to subchapter II of chapter 135 of title 49, 
     United States Code.''.
       (10) striking paragraph (17) and redesignating paragraphs 
     (18) through (27) as paragraphs (17) through (26), 
     respectively;
       (11) 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.'';
       (12) 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.'';
       (13) 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 all charges applicable under the tariff or service 
     contract.''.
       (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 January 1, 1999.

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

       (a) Ocean Common Carriers.--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.''.
       (b) Marine Terminal Operators.--Section 4(b) of that Act 
     (46 U.S.C. App. 1703(b)) is amended by--
       (1) striking ``(to the extent the agreements involve ocean 
     transportation in the foreign commerce of the United 
     States)''; and
       (2) striking ``arrangements.'' in paragraph (2) and 
     inserting ``arrangements, to the extent that such agreements 
     involve ocean transportation in the foreign commerce of the 
     United States.''.

     SEC. 104. AGREEMENTS.

       Section 5(b) of the Shipping Act of 1984 (46 U.S.C. App. 
     1704(b)) is amended by--
       (1) striking ``and'' at the end of paragraph (7);
       (2) striking paragraph (8) and inserting the following:
       ``(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; and
       ``(9) prohibit the conference from--
       ``(A) prohibiting or restricting the members of the 
     conference from engaging in negotiations for individual 
     service contracts under section 8(c)(3) of this Act with 1 or 
     more shippers;
       ``(B) requiring a member of the conference to disclose the 
     existence of a confidential 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, except when the conference enters into negotiations with 
     the same shipper; and
       ``(C) issuing mandatory rules or requirements affecting 
     individual service contracts under section 8(c)(3) of this 
     Act, except as provided in subparagraph (B).

     A conference may issue voluntary guidelines relating to the 
     terms and procedures of individual service contracts under 
     section 8(c)(3) of this Act if the guidelines explicitly 
     state the right of members of the conference not to follow 
     the guidelines.''.

     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)(3) 
     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 January 1, 1999.

     SEC. 106. TARIFFS.

       (a) In General.--Subsection (a) of 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 paragraph (1);
       (2) striking ``file with the Commission, and'' in paragraph 
     (1);

[[Page S2081]]

       (3) striking ``inspection,'' in paragraph (1) and inserting 
     ``inspection in an automated tariff system,'';
       (4) striking ``tariff filings'' in paragraph (1) and 
     inserting ``tariffs'';
       (5) striking ``and'' at the end of paragraph (1)(D);
       (6) striking ``loyalty contract,'' in paragraph (1)(E);
       (7) striking ``agreement.'' in paragraph (1)(E) and 
     inserting ``agreement; and'';
       (8) adding at the end of paragraph (1) the following:
       ``(F) include copies of any loyalty contract, omitting the 
     shipper's name.''; and
       (9) striking paragraph (2) 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 locations, and a reasonable 
     charge may be assessed for such access. No charge may be 
     assessed a Federal agency for such access.''.
       (b) Service Contracts.--Subsection (c) of that section is 
     amended to read as follows:
       ``(c) Service Contracts.--
       ``(1) In general.--An individual ocean common carrier 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 confidentially with the 
     Commission, and at the same time, a concise statement of its 
     essential terms shall be published 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 1 or more shippers and an individual ocean 
     common carrier--
       ``(A) may be made on a confidential basis;
       ``(B) are not required to be filed with the Commission; and
       ``(C) shall be retained by the parties to the contract for 
     3 years subsequent to the expiration of the contract.'';
       (c) Rates.--Subsection (d) of that section is amended by--
       (1) striking ``30 days after filing with the Commission.'' 
     in the first sentence and inserting ``21 calendar days after 
     publication.'';
       (2) striking ``less than 30'' in the next sentence and 
     inserting ``less than 21 calendar''; and
       (3) striking ``publication and filing with the 
     Commission.'' in the last sentence and inserting 
     ``publication.''.
       (d) Marine Terminal Operator Schedules.--Subsection (e) of 
     that section is amended to read as follows:
       ``(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.''.
       (e) Automated Tariff System Requirements; Form.--Subsection 
     (f) of that section is amended to read as follows:
       ``(f) Regulations.--The Commission shall by regulation 
     prescribe the requirements for the accessibility and accuracy 
     of automated tariff systems established under this section. 
     The Commission may, after periodic review, prohibit the use 
     of any automated tariff system that fails to meet the 
     requirements established under this section. The Commission 
     may not require a common carrier to provide a remote terminal 
     for access under subsection (a)(2). 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.

     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 Commission'';
       (5) striking ``may take into account appropriate factors 
     including, but not limited to, whether--'' in subsection (b) 
     and inserting ``shall take into account whether the rates or 
     charges which have been published or assessed or which would 
     result from the pertinent classifications, rules, or 
     regulations are below a level which is fully compensatory to 
     the controlled carrier based upon that carrier's actual costs 
     or upon its constructive costs. For purposes of the preceding 
     sentence, the term `constructive costs' means the costs of 
     another carrier, other than a controlled carrier, operating 
     similar vessels and equipment in the same or a similar trade. 
     The Commission may also take into account other appropriate 
     factors, including but not limited to, whether--'';
       (6) striking paragraph (1) of subsection (b) and 
     redesignating paragraphs (2), (3), and (4) as paragraphs (1), 
     (2), and (3), respectively;
       (7) striking ``filed'' each place it appears in subsection 
     (b) and inserting ``published or assessed'';
       (8) striking ``filing with the Commission'' in subsection 
     (c) and inserting ``publication'';
       (9) striking ``Disapproval.--'' in subsection (d) and 
     inserting ``Prohibition of Rates.--Within 120 days after the 
     receipt of information requested by the Commission under this 
     section, the Commission shall determine whether the rates, 
     charges, classifications, rules, or regulations of a 
     controlled carrier may be unjust and unreasonable.'' ;
       (10) striking ``filed'' in subsection (d) and inserting 
     ``published or assessed'';
       (11) striking ``may issue'' in subsection (d) and inserting 
     ``shall issue'';
       (12) striking ``disapproved.'' in subsection (d) 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 Commission 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 a comma and ``except for service contracts,'' 
     after ``deal or'';
       (8) striking ``a non-vessel-operating common carrier'' each 
     place it appears in paragraphs (11) and (12), as 
     redesignated, and inserting ``an ocean freight forwarder'';
       (9) striking ``sections 8 and 23'' in paragraphs (11) and 
     (12), as redesignated, and inserting ``sections 8 and 19'';
       (10) striking ``paragraph (16)'' in the matter appearing 
     after paragraph (13), as redesignated, and inserting 
     ``paragraph (13)''; and
       (11) 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)'' and inserting ``subsections (b)(8), (9), and 
     (13)''.

     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 ``section 10(b)(5) or (7)'' and inserting 
     ``section 10(b)(3) or (5)''; and
       (2) striking ``section 10(b)(6)(A) or (B)'' and inserting 
     ``section 10(b)(4)(A) or (B).''.

[[Page S2082]]

     SEC. 111. FOREIGN SHIPPING PRACTICES ACT OF 1988.

       Section 10002 of the Foreign Shipping Practices Act of 1988 
     (46 U.S.C. App. 1710a) is amended--
       (1) by striking ``non-vessel-operating common carrier,'' in 
     paragraph (1) and inserting ``ocean freight forwarder,'';
       (2) striking ``non-vessel-operating common carrier 
     operations,'' in paragraph (4);
       (3) by inserting ``and service contracts'' after 
     ``tariffs'' each place it appears in subsection (e)(1)(B);
       (4) by striking ``filed with the Commission'' in subsection 
     (e)(1)(B); and
       (5) by striking ``section 13(b)(5) of the Shipping Act of 
     1984 (46 App. U.S.C. 1712(b)(5)'' in subsection (h) and 
     inserting ``section 13(b)(6) of the Shipping Act of 1984 (46 
     App. U.S.C. 1712(b)(6))''.

     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 ``section 10(b)(1), (2), (3), (4), or (8)'' in 
     paragraph (1) and inserting ``section 10(b)(1), (2), or 
     (6)'';
       (2) redesignating paragraphs (4), (5), and (6) as 
     paragraphs (5), (6), and (7), respectively;
       (3) inserting before paragraph (5), as redesignated, the 
     following:
       ``(4) 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
       (4) striking ``paragraphs (1), (2), and (3)'' in paragraph 
     (6), as redesignated, and inserting ``paragraphs (1), (2), 
     (3), and (4)''.
       (c) Section 13(f)(1) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1712(f)(1)) is amended by striking ``or (b)(4)'' and 
     inserting ``or (b)(2)''.

     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 
     for subsection (a); 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 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 UNDER PRIOR 
                   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 Ocean Shipping Reform Act of 1997, 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 Ocean Shipping Reform Act 
     of 1997.'';
       (2) inserting the following at the end of subsection (e):
       ``(3) The Ocean Shipping Reform Act of 1997 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 Ocean Shipping Reform Act of 
     1997.''.

     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.

       (a) In General.--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 sections 7(a)(6) and 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''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on January 1, 1999.
 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 January 1, 1998, 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 1998.--
     There is authorized to be appropriated to the Federal 
     Maritime Commission, $15,000,000 for fiscal year 1998.
       (e) Commissioners of the Federal Maritime Commission.--
     Subject to the political

[[Page S2083]]

     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 January 1, 1999, 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 January 1, 1999, 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 January 1, 1999, 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 
     (6) of that subsection take effect on January 1, 1999.

     SEC. 302. TECHNICAL CORRECTIONS.

       (a) Public Law 89-777.--The Act of November 6, 1966, (Pub. 
     L. 89-777; 80 Stat. 1356; 46 U.S.C. App. 817 et seq.) is 
     amended by--
       (1) striking ``Federal Maritime Commission'' each place it 
     appears and inserting ``Intermodal Transportation Board''; 
     and
       (2) striking ``Commission'' each place it appears and 
     inserting ``Board''.
       (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));''.
       (c) Foreign Shipping Practices Act of 1988.--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)''.
       (d) Tariff Act of 1930.--Section 641(i) of the Tariff Act 
     of 1930 (19 U.S.C. 1641) is repealed.
       (e) Effective Dates.--
       (1) The amendments made by subsections (a), (b), and (c) 
     take effect January 1, 1999.
       (2) The repeal made by subsection (d) takes effect March 1, 
     1998.

  Mr. LOTT. Mr. President, I rise today to introduce bipartisan 
legislation that will update, revise and improve upon the Shipping Act 
of 1984. This legislation is a continuation and extension of work 
initiated in the last Congress by Representative Bud Shuster, my friend 
in the House of Representatives and Senator Larry Pressler, then 
chairman of the Senate's Commerce Committee.
  Under the leadership of Senator Pressler, the proposal from the House 
of Representatives was examined through an initial hearing, and it was 
modified to address the concerns expressed by many in the industry. 
Only after a critical review of the key issues and concerns was a 
revised bipartisan amendment to the Senate bill introduced. 
Unfortunately, time ran out in the 104th Congress and the Senate 
Commerce Committee could not hold another hearing on the proposal. 
Still, changes continued to be incorporated into a single new version 
of the amendment, and in the last week of the 104th Congress the 
amendment was placed in the Congressional Record.
  My legislative plan was simple and direct--introduce a bill and then 
hold a hearing so that public input would have a genuine opportunity to 
affect the legislative process. This remains my plan, and that is why I 
used my public ending point in the 104th Congress as my new beginning 
point in the 105th Congress.
  As the process began again in this Congress, we again sought input 
from the maritime world as we prepared this important legislation for 
reintroduction. In the 104th Congress, the House of Representatives was 
the first to act. In the 105th Congress, the Senate will be the first 
to act.
  Mr. President, this explanation of the legislative journey was 
necessary so that my colleagues will have an appreciation of the 
outreach that was pursued by the Senate in its drafting process 
regarding this shipping reform.
  Let me say that I grew up in an active port community. In fact, I 
still live in that port city of Pascagoula. There is nothing in our 
legislative proposal that is intended to harm the onshore maritime 
community. Believe me, I know first hand the challenges faced by ports 
because I have lived with them. I still remember the committee hearing 
on the shipping act last year where I had to give lessons in how to 
pronounce ``Pascagoula.'' On that day, I wanted to make sure people who 
develop and comment on maritime policy know and remember Pascagoula.
  I would like to add one more comment about the development of this 
legislation before I say a few words on what the bill will accomplish. 
The U.S. Coast Guard detailed an officer to the Commerce, Science, and 
Transportation Committee to assist the committee's members and staff on 
both sides of the isle on issues affecting the Coast Guard and the 
maritime world. Last year and part of this year we have had the able 
assistance of Lt. Comdr. Jim Sartucci. He was instrumental in 
collecting comments and in drafting provisions of this proposal in both 
the 104th and now the 105th Congress.
  I have received many unsolicited compliments about Jim's willingness 
to listen and merge in a meaningful way, individual proposals from all 
segments of the maritime world. Everyone that I have encountered has 
told me that Jim was both professional and fair as we worked through 
the process.
  Mr. President, Lieutenant Commander Sartucci has clearly reflected 
great credit upon the Coast Guard, the Commerce Committee, and on this 
legislative proposal.
  Mr. President, we now know how we got to this point in the 
legislative process. There are still two topics that need to be 
addressed today.
  First, why do we need shipping reform and second, how does the bill 
accomplish that reform?
  In just a few minutes, let me explain why we need shipping reform.
  Last year's successful maritime reform effort addressed the critical 
requirement of guaranteeing an American fleet and American crews in the 
context of necessary sealift capabilities for deploying and supporting 
our military forces overseas. Our efforts in shipping reform this year 
focus on the needs of America's ports and Americans who work dockside. 
Both big and little ports. were considered as part of the process. 
Ports with and without cranes.
  Mr. President, last year, I spoke at length with the Honorable Helen

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Delich Bentley, the former Maryland Congresswoman. She has been an 
effective defender of ports and maritime labor for years. She is a true 
champion, and I value her advice. I made a commitment to Helen then and 
I believe it has been honored this year with the legislative language. 
The legislation will provide adequate protection for small ports and 
small shippers. Also, the legislation will ensure that the collective 
power of some industry elements will not be allowed to abuse other 
segments of the industry.
  Having said this, it is time to deregulate the ocean shipping 
industry and to sunset the FMC. The path was started by President 
Reagan back in 1984. Senator Slade Gorton, my colleague and friend, was 
the principal author of this initial step and with his help we took the 
next step when we put together the proposal in the 104th Congress. I am 
very pleased that the author of the original act that we are amending 
has agreed to cosponsor this bill.
  Mr. President, this year Senator Kay Bailey Hutchison will be leading 
the charge to complete this second part of maritime reform. She has a 
clear understanding of what is necessary to strike the delicate balance 
to achieve deregulation without permitting marketplace abuses. She will 
do an excellent job in chairing the hearing and finalizing the 
legislative language for the full Senate.
  Let me be very clear; this proposal only deals with liner shipping, 
basically container ship, legislation--not bulk cargo shipping, which 
represents the other half of U.S. ocean borne trade. Do not let the 
opponents of reform confuse the issue. The already deregulated world of 
bulk cargo shipping is not being disturbed.
  I must also be candid. The challenge is to balance ocean common 
carrier antitrust issues and large ocean carrier and shipper desires 
for more private business relationships with meaningful oversight to 
produce a fair, yet competitive playing field. I believe this 
legislation strikes the right balance.
  I must also say that at the Commerce Committee hearing back in 1995, 
both Senator Breaux and I challenged the witnesses to work with us to 
resolve the concerns we were hearing from our constituents. The 
witnesses and many others did just that. They showed up and 
participated in extensive, good faith negotiations.
  This bill is not antilabor. The shoreside and seafaring unions 
continue to work with us in a constructive manner. Their goal and ours 
is to put in place an ocean shipping framework that eliminates 
inefficient and burdensome regulations, promotes U.S. trade, and in so 
doing, preserves and creates American jobs.
  This bill is not about dealing with just a couple of players in the 
maritime community. Many members of the industry were consulted. We 
provided a genuine opportunity to participate in dialog as we drafted 
this bill. Introduction should not stop the consensus seeking process. 
And, I hope the discussion will continue with Senator Hutchison as she 
prepares for the upcoming hearing and even following the hearing.
  Let me now explain how this legislation accomplishes our goals to 
reform this critical industry.
  This legislation will permit confidential contracting between 
individual ocean common carriers and shippers, but will continue 
current public filing requirements for joint ocean common carrier 
contracts. This action balances the desire to make the U.S. ocean liner 
contracting process consistent with international ocean shipping 
practices and other U.S. transportation modes with the unique 
application of ocean common carrier antitrust immunity in the ocean 
liner shipping industry. At recent meetings held by the Maritime 
Administration on the diversion of cargo from U.S. ports, the current 
U.S. ocean liner shipping system was identified as a contributor to 
this problem. This legislation will help eliminate this U.S. port 
handicap.

  This legislation will retain common carrier tariff enforcement, but 
would eliminate the requirement to file tariffs with the Government. 
Common carriers would be able to take advantage of available modern 
technology by using a World Wide Web home page to satisfy the tariff 
publication requirement. This just makes common sense and reduces the 
cost of doing business while maintaining protections for small 
shippers.
  This legislation will streamline and reform the Federal Maritime 
Commission [FMC], and establish a responsible time line to downsize the 
FMC in accordance with its new mission and merge it with the Surface 
Transportation Board. America will then have a single, centralized, 
independent, Federal agency where the distinct regulatory systems for 
each mode of transportation are monitored and enforced in a coherent 
manner.
  This legislation does much to ensure that America's presence in the 
ocean shipping business is not subjected to unfair foreign rules or 
practices. The recent FMC enforcement actions taken against unfair port 
practices in Japan is an illustration of an essential FMC mission that 
is not performed by other Federal agencies. This mission will continue, 
and I will support it wholeheartedly.
  Let me be clear. This bill will significantly change the regulations 
governing ocean transportation in the foreign commerce of the United 
States while providing Government efficiencies and genuine reforms to 
protect American interests. The changes will strengthen ocean common 
carriers' ability to competitively price their services, in turn, 
making American shippers more competitive.
  Mr. President, the world's transportation community is now, and has 
been for some time, a seamless intermodal world. With this bill our 
Federal Government will finally be able to think and act in an 
intermodal manner. The American people get less Federal micro-
management of our ocean shipping industry while receiving the 
protection of a government agency focused on preserving fair 
competition. An economically efficient, market oriented shipping 
industry provides America an advantage in the global marketplace.
  Mr. President, I want to thank my colleagues for their attention, and 
I hope they will give serious consideration to becoming a cosponsor to 
this necessary bipartisan legislative reform. Remember this is not just 
a port State matter; it is also an exporting State concern.
                                 ______