[Congressional Record Volume 144, Number 135 (Thursday, October 1, 1998)]
[Senate]
[Pages S11297-S11302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   OCEAN SHIPPING REFORM ACT OF 1998

  Mrs. HUTCHISON. Mr. President, I ask the Chair lay before the Senate 
a message from the House of Representatives on the bill (S. 414) to 
amend the Shipping Act of 1984 to encourage competition in 
international shipping and growth of United States exports, and for 
other purposes.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the bill from the Senate (S. 414) entitled 
     ``An Act to amend the Shipping Act of 1984 to encourage 
     competition in international shipping and growth of United 
     States exports, and for other purposes'', do pass with the 
     following amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Ocean Shipping Reform Act of 
     1998''.

     SEC. 2. EFFECTIVE DATE.

       Except as otherwise expressly provided in this Act, this 
     Act and the amendments made by this Act take effect May 1, 
     1999.

            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'';
       (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.

       Section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702) 
     is amended by--
       (1) striking ``the government under whose registry the 
     vessels of the carrier operate;'' in paragraph (8) and 
     inserting ``a government;'';
       (2) 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.'';
       (3) striking paragraph (10) and redesignating paragraphs 
     (11) through (27) as paragraphs (10) through (26);
       (4) striking ``in an unfinished or semifinished state that 
     require special handling moving in lot sizes too large for a 
     container,'' in paragraph (10), as redesignated;
       (5) striking ``paper board in rolls, and paper in rolls.'' 
     in paragraph (10) as redesignated and inserting ``paper and 
     paper board in rolls or in pallet or skid-sized sheets.'';
       (6) striking ``conference, other than a service contract or 
     contract based upon time-volume rates,'' in paragraph (13) as 
     redesignated and inserting ``agreement'';
       (7) striking ``conference.'' in paragraph (13) as 
     redesignated and inserting ``agreement and the contract 
     provides for a deferred rebate arrangement.'';
       (8) by striking ``carrier.'' in paragraph (14) as 
     redesignated 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.'';
       (9) striking paragraph (16) as redesignated and 
     redesignating paragraphs (17) through (26) as redesignated as 
     paragraphs (16) through (25), respectively;
       (10) striking paragraph (17), as redesignated, and 
     inserting the following:
       ``(17) `ocean transportation intermediary' means an ocean 
     freight forwarder or a non-vessel-operating common carrier. 
     For purposes of this paragraph, the term--
       ``(A) `ocean freight forwarder' means a person that--
       ``(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; and
       ``(B) `non-vessel-operating common carrier' means 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 (19), as redesignated and inserting 
     the following:
       ``(19) `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.''; and
       (12) striking paragraph (21), as redesignated, and 
     inserting the following:
       ``(21) `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 transportation intermediary, as defined in 
     paragraph (17)(B) of this section, that accepts 
     responsibility for payment of all charges applicable under 
     the tariff or service contract.''.

     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;'';

[[Page S11298]]

       (2) striking ``and'' in paragraph (6) and inserting ``or''; 
     and
       (3) striking paragraph (7) and inserting the following:
       ``(7) discuss and agree on 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)'';
       (2) striking ``and'' in paragraph (1) and inserting ``or''; 
     and
       (3) 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.

       (a) In General.--Section 5 of the Shipping Act of 1984 (46 
     U.S.C. App. 1704) is amended by--
       (1) striking subsection (b)(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;
       (2) redesignating subsections (c) through (e) as 
     subsections (d) through (f); and
       (3) inserting after subsection (b) the following:
       ``(c) Ocean Common Carrier Agreements.--An ocean common 
     carrier agreement may not--
       ``(1) prohibit or restrict a member or members of the 
     agreement from engaging in negotiations for service contracts 
     with 1 or more shippers;
       ``(2) require a member or members of the agreement to 
     disclose a negotiation on a service contract, or the terms 
     and conditions of a service contract, other than those terms 
     or conditions required to be published under section 8(c)(3) 
     of this Act; or
       ``(3) adopt mandatory rules or requirements affecting the 
     right of an agreement member or agreement members to 
     negotiate and enter into service contracts.

     An agreement may provide authority to adopt voluntary 
     guidelines relating to the terms and procedures of an 
     agreement member's or agreement members' service contracts if 
     the guidelines explicitly state the right of members of the 
     agreement not to follow the guidelines. These guidelines 
     shall be confidentially submitted to the Commission.''.
       (b) Application.--
       (1) Subsection (e) of section 5 of that Act, as 
     redesignated, is amended by striking ``this Act, the Shipping 
     Act, 1916, and the Intercoastal Shipping Act, 1933, do'' and 
     inserting ``this Act does''; and
       (2) Subsection (f) of section 5 of that Act, as 
     redesignated, is amended by--
       (A) striking ``and the Shipping Act, 1916, do'' and 
     inserting ``does'';
       (B) striking ``or the Shipping Act, 1916,''; and
       (C) inserting ``or are essential terms of a service 
     contract'' after ``tariff''.

     SEC. 105. EXEMPTION FROM ANTITRUST LAWS.

       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) striking ``or'' at the end of subsection (b)(2);
       (3) striking ``States.'' at the end of subsection (b)(3) 
     and inserting ``States; or''; and
       (4) adding at the end of subsection (b) the following:
       ``(4) to any loyalty contract.''.

     SEC. 106. TARIFFS.

       (a) In General.--Section 8(a) of the Shipping Act of 1984 
     (46 U.S.C. App. 1707(a)) is amended by--
       (1) inserting ``new assembled motor vehicles,'' after 
     ``scrap,'' in paragraph (1);
       (2) striking ``file with the Commission, and'' in paragraph 
     (1);
       (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 ``freight forwarder'' in paragraph (1)(C) and 
     inserting ``transportation intermediary, as defined in 
     section 3(17)(A),'';
       (6) striking ``and'' at the end of paragraph (1)(D);
       (7) striking ``loyalty contract,'' in paragraph (1)(E);
       (8) striking ``agreement.'' in paragraph (1)(E) and 
     inserting ``agreement; and'';
       (9) adding at the end of paragraph (1) the following:
       ``(F) include copies of any loyalty contract, omitting the 
     shipper's name.''; and
       (10) 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. In no case may the contract dispute 
     resolution forum be controlled by or in any way affiliated 
     with a controlled carrier as defined in section 3(8) of this 
     Act, or by the government which owns or controls the carrier.
       ``(2) Filing requirements.--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 
     individual ocean common carrier or an agreement shall be 
     filed confidentially with the Commission. Each service 
     contract shall include the following essential terms--
       ``(A) the origin and destination port ranges;
       ``(B) the origin and destination geographic areas in the 
     case of through intermodal movements;
       ``(C) the commodity or commodities involved;
       ``(D) the minimum volume or portion;
       ``(E) the line-haul rate;
       ``(F) the duration;
       ``(G) service commitments; and
       ``(H) the liquidated damages for nonperformance, if any.
       ``(3) Publication of certain terms.--When a service 
     contract is filed confidentially with the Commission, a 
     concise statement of the essential terms described in 
     paragraphs 2 (A), (C), (D), and (F) shall be published and 
     made available to the general public in tariff format.
       ``(4) Disclosure of certain terms.--
       ``(A) An ocean common carrier, which is a party to or is 
     subject to the provisions of a collective bargaining 
     agreement with a labor organization, shall, in response to a 
     written request by such labor organization, state whether it 
     is responsible for the following work at dock areas and 
     within port areas in the United States with respect to cargo 
     transportation under a service contract described in 
     paragraph (1) of this subsection--
       ``(i) the movement of the shipper's cargo on a dock area or 
     within the port area or to or from railroad cars on a dock 
     area or within the port area;
       ``(ii) the assignment of intraport carriage of the 
     shipper's cargo between areas on a dock or within the port 
     area;
       ``(iii) the assignment of the carriage of the shipper's 
     cargo between a container yard on a dock area or within the 
     port area and a rail yard adjacent to such container yard; 
     and
       ``(iv) the assignment of container freight station work and 
     container maintenance and repair work performed at a dock 
     area or within the port area.
       ``(B) The common carrier shall provide the information 
     described in subparagraph (A) of this paragraph to the 
     requesting labor organization within a reasonable period of 
     time.
       ``(C) This paragraph requires the disclosure of information 
     by an ocean common carrier only if there exists an applicable 
     and otherwise lawful collective bargaining agreement which 
     pertains to that carrier. No disclosure made by an ocean 
     common carrier shall be deemed to be an admission or 
     agreement that any work is covered by a collective bargaining 
     agreement. Any dispute regarding whether any work is covered 
     by a collective bargaining agreement and the responsibility 
     of the ocean common carrier under such agreement shall be 
     resolved solely in accordance with the dispute resolution 
     procedures contained in the collective bargaining agreement 
     and the National Labor Relations Act, and without reference 
     to this paragraph.
       ``(D) Nothing in this paragraph shall have any effect on 
     the lawfulness or unlawfulness under this Act, the National 
     Labor Relations Act, the Taft-Hartley Act, the Federal Trade 
     Commission Act, the antitrust laws, or any other Federal or 
     State law, or any revisions or amendments thereto, of any 
     collective bargaining agreement or element thereof, including 
     any element that constitutes an essential term of a service 
     contract under this subsection.
       ``(E) For purposes of this paragraph the terms `dock area' 
     and `within the port area' shall have the same meaning and 
     scope as in the applicable collective bargaining agreement 
     between the requesting labor organization and the carrier.''.
       (c) Rates.--Subsection (d) of that section is amended by--
       (1) striking the subsection caption and inserting ``(d) 
     Tariff Rates.--'';
       (2) striking ``30 days after filing with the Commission.'' 
     in the first sentence and inserting ``30 calendar days after 
     publication.'';
       (3) inserting ``calendar'' after ``30'' in the next 
     sentence; and
       (4) striking ``publication and filing with the 
     Commission.'' in the last sentence and inserting 
     ``publication.''.
       (d) Refunds.--Subsection (e) of that section is amended 
     by--
       (1) striking ``tariff of a clerical or administrative 
     nature or an error due to inadvertence'' in paragraph (1) and 
     inserting a comma; and
       (2) striking ``file a new tariff,'' in paragraph (1) and 
     inserting ``publish a new tariff, or an error in quoting a 
     tariff,'';
       (3) striking ``refund, filed a new tariff with the 
     Commission'' in paragraph (2) and inserting ``refund for an 
     error in a tariff or a failure to publish a tariff, published 
     a new tariff'';
       (4) inserting ``and'' at the end of paragraph (2); and
       (5) striking paragraph (3) and redesignating paragraph (4) 
     as paragraph (3).
       (e) Marine Terminal Operator Schedules.--Subsection (f) of 
     that section is amended to read as follows:
       ``(f) Marine Terminal Operator Schedules.--A marine 
     terminal operator may make available to the public, subject 
     to section 10(d) of this Act, a schedule of rates, 
     regulations, and practices, including limitations of 
     liability for cargo loss or damage, pertaining to receiving,

[[Page S11299]]

     delivering, handling, or storing property at its marine 
     terminal. Any such schedule made available to the public 
     shall be enforceable by an appropriate court as an implied 
     contract without proof of actual knowledge of its 
     provisions.''.
       (f) Automated Tariff System Requirements; Form.--Section 8 
     of that Act is amended by adding at the end the following:
       ``(g) 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 ``service contracts filed with the 
     Commission'' in the first sentence of subsection (a) and 
     inserting ``service contracts, 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'' in paragraph (1) as redesignated and 
     inserting ``published or assessed'';
       (8) striking ``filing with the Commission.'' in subsection 
     (c) and inserting ``publication.'';
       (9) striking ``Disapproval of Rates.--'' 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.'';
       (13) striking ``60'' in subsection (d) and inserting 
     ``30'';
       (14) inserting ``controlled'' after ``affected'' in 
     subsection (d);
       (15) striking ``file'' in subsection (d) and inserting 
     ``publish'';
       (16) striking ``disapproval'' in subsection (e) and 
     inserting ``prohibition'';
       (17) inserting ``or'' after the semicolon in subsection 
     (f)(1);
       (18) striking paragraphs (2), (3), and (4) of subsection 
     (f); and
       (19) 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, charges, 
     classifications, rules, and practices 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 of 
     this Act or the Foreign Shipping Practices Act of 1988 (46 
     U.S.C. App. 1710a);'';
       (4) redesignating paragraphs (5) and (6) as paragraphs (3) 
     and (4), respectively;
       (5) striking ``except for service contracts,'' in paragraph 
     (4), as redesignated, and inserting ``for service pursuant to 
     a tariff,'';
       (6) striking ``rates;'' in paragraph (4)(A), as 
     redesignated, and inserting ``rates or charges;'';
       (7) inserting after paragraph (4), as redesignated, the 
     following:
       ``(5) for service pursuant to a service contract, engage in 
     any unfair or unjustly discriminatory practice in the matter 
     of rates or charges with respect to any port;'';
       (8) redesignating paragraphs (7) and (8) as paragraphs (6) 
     and (7), respectively;
       (9) striking paragraph (6) as redesignated and inserting 
     the following:
       ``(6) use a vessel or vessels in a particular trade for the 
     purpose of excluding, preventing, or reducing competition by 
     driving another ocean common carrier out of that trade;'';
       (10) striking paragraphs (9) through (13) and inserting the 
     following:
       ``(8) for service pursuant to a tariff, give any undue or 
     unreasonable preference or advantage or impose any undue or 
     unreasonable prejudice or disadvantage;
       ``(9) for service pursuant to a service contract, give any 
     undue or unreasonable preference or advantage or impose any 
     undue or unreasonable prejudice or disadvantage with respect 
     to any port;
       ``(10) unreasonably refuse to deal or negotiate;'';
       (11) redesignating paragraphs (14), (15), and (16) as 
     paragraphs (11), (12), and (13), respectively;
       (12) striking ``a non-vessel-operating common carrier'' in 
     paragraphs (11) and (12) as redesignated and inserting ``an 
     ocean transportation intermediary'';
       (13) striking ``sections 8 and 23'' in paragraphs (11) and 
     (12) as redesignated and inserting ``sections 8 and 19'';
       (14) striking ``or in which an ocean transportation 
     intermediary is listed as an affiliate'' in paragraph (12), 
     as redesignated;
       (15) striking ``Act;'' in paragraph (12), as redesignated, 
     and inserting ``Act, or with an affiliate of such ocean 
     transportation intermediary;''
       (16) striking ``paragraph (16)'' in the matter appearing 
     after paragraph (13), as redesignated, and inserting 
     ``paragraph (13)''; and
       (17) inserting ``the Commission,'' after ``United States,'' 
     in such matter.
       (b) Section 10(c) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1709(c)) is amended by--
       (1) striking ``non-ocean carriers'' in paragraph (4) and 
     inserting ``non-ocean carriers, unless such negotiations and 
     any resulting agreements are not in violation of the 
     antitrust laws and are consistent with the purposes of this 
     Act'';
       (2) striking ``freight forwarder'' in paragraph (5) and 
     inserting ``transportation intermediary, as defined by 
     section 3(17)(A) of this Act,'';
       (3) striking ``or'' at the end of paragraph (5);
       (4) striking ``contract.'' in paragraph (6) and inserting 
     ``contract;''; and
       (5) adding at the end the following:
       ``(7) for service pursuant to a service contract, engage in 
     any unjustly discriminatory practice in the matter of rates 
     or charges with respect to any locality, port, or persons due 
     to those persons' status as shippers' associations or ocean 
     transportation intermediaries; or
       ``(8) for service pursuant to a service contract, give any 
     undue or unreasonable preference or advantage or impose any 
     undue or unreasonable prejudice or disadvantage with respect 
     to any locality, port, or persons due to those persons' 
     status as shippers' associations or ocean transportation 
     intermediaries;''.
       (c) Section 10(d) of the Shipping Act of 1984 (46 U.S.C. 
     App. 1709(d)) is amended by--
       (1) striking ``freight forwarders,'' and inserting 
     ``transportation intermediaries,'';
       (2) striking ``freight forwarder,'' in paragraph (1) and 
     inserting ``transportation intermediary,'';
       (3) striking ``subsection (b)(11), (12), and (16)'' and 
     inserting ``subsections (b)(10) and (13)''; and
       (4) adding at the end thereof the following:
       ``(4) No marine terminal operator may give any undue or 
     unreasonable preference or advantage or impose any undue or 
     unreasonable prejudice or disadvantage with respect to any 
     person.
       ``(5) The prohibition in subsection (b)(13) of this section 
     applies to ocean transportation intermediaries, as defined by 
     section 3(17)(A) of this Act.''.

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

     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 by--
       (1) striking `` `non-vessel-operating common carrier','' in 
     subsection (a)(1) and inserting `` `ocean transportation 
     intermediary','';
       (2) striking ``forwarding and'' in subsection (a)(4);
       (3) striking ``non-vessel-operating common carrier'' in 
     subsection (a)(4) and inserting ``ocean transportation 
     intermediary services and'';
       (4) striking ``freight forwarder,'' in subsections (c)(1) 
     and (d)(1) and inserting ``transportation intermediary,'';
       (5) striking ``filed with the Commission,'' in subsection 
     (e)(1)(B) and inserting ``and service contracts,'';
       (6) inserting ``and service contracts'' after ``tariffs'' 
     the second place it appears in subsection (e)(1)(B); and
       (7) striking ``(b)(5)'' each place it appears in subsection 
     (h) and inserting ``(b)(6)''.

     SEC. 112. 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 operated by that common carrier and any such 
     vessel may be libeled therefore in the district court of the 
     United States for the district in which it may be found.''.

[[Page S11300]]

       (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 
     (7)'';
       (2) by 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--
       (1) striking ``or (b)(4)'' and inserting ``or (b)(2)'';
       (2) striking ``(b)(1), (4)'' and inserting ``(b)(1), (2)''; 
     and
       (3) adding at the end thereof the following ``Neither the 
     Commission nor any court shall order any person to pay the 
     difference between the amount billed and agreed upon in 
     writing with a common carrier or its agent and the amount set 
     fourth in any tariff or service contract by that common 
     carrier for the transportation service provided.''.

     SEC. 113. 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. 114. 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 a substantial reduction in competition, or be 
     detrimental to commerce.'' and inserting ``result in 
     substantial reduction in competition or be detrimental to 
     commerce.''.

     SEC. 115. AGENCY REPORTS AND ADVISORY COMMISSION.

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

     SEC. 116. OCEAN FREIGHT FORWARDERS.

       Section 19 of the Shipping Act of 1984 (46 U.S.C. App. 
     1718) is amended by--
       (1) striking ``freight forwarders'' in the section caption 
     and inserting ``transportation intermediaries'';
       (2) striking subsection (a) and inserting the following:
       ``(a) License.--No person in the United States may act as 
     an ocean transportation intermediary unless that person holds 
     a license issued by the Commission. The Commission shall 
     issue an intermediary's license to any person that the 
     Commission determines to be qualified by experience and 
     character to act as an ocean transportation intermediary.'';
       (3) redesignating subsections (b), (c), and (d) as 
     subsections (c), (d), and (e), respectively;
       (4) inserting after subsection (a) the following:
       ``(b) Financial Responsibility.--
       ``(1) No person may act as an ocean transportation 
     intermediary 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 order for reparation 
     issued pursuant to section 11 or 14 of this Act, or any 
     penalty assessed pursuant to section 13 of this Act;
       ``(B) may be available to pay any claim against an ocean 
     transportation intermediary arising from its transportation-
     related activities described in section 3(17) of this Act 
     with the consent of the insured ocean transportation 
     intermediary and subject to review by the surety company, or 
     when the claim is deemed valid by the surety company after 
     the ocean transportation intermediary has failed to respond 
     to adequate notice to address the validity of the claim; and
       ``(C) shall be available to pay any judgment for damages 
     against an ocean transportation intermediary arising from its 
     transportation-related activities under section 3(17) of this 
     Act, provided the claimant has first attempted to resolve the 
     claim pursuant to subparagraph (B) of this paragraph and the 
     claim has not been resolved within a reasonable period of 
     time.
       ``(3) The Commission shall prescribe regulations for the 
     purpose of protecting the interests of claimants, ocean 
     transportation intermediaries, and surety companies with 
     respect to the process of pursuing claims against ocean 
     transportation intermediary bonds, insurance, or sureties 
     through court judgments. The regulations shall provide that a 
     judgment for monetary damages may not be enforced except to 
     the extent that the damages claimed arise from the 
     transportation-related activities of the insured ocean 
     transportation intermediary, as defined by the Commission.
       ``(4) An ocean transportation intermediary 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.'';
       (5) striking, each place such term appears--
       (A) ``freight forwarder'' and inserting ``transportation 
     intermediary'';
       (B) ``a forwarder's'' and inserting ``an intermediary's'';
       (C) ``forwarder'' and inserting ``intermediary''; and
       (D) ``forwarding'' and inserting ``intermediary'';
       (6) 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).'';
       (7) striking ``Forwarders.--''  in the caption of 
     subsection (e), as redesignated, and inserting 
     ``Intermediaries.--'';
       (8) striking ``intermediary'' the first place it appears in 
     subsection (e)(1), as redesignated and as amended by 
     paragraph (5)(A), and inserting ``intermediary, as defined in 
     section 3(17)(A) of this Act,'';
       (9) striking ``license'' in paragraph (1) of subsection 
     (e), as redesignated, and inserting ``license, if required by 
     subsection (a),'';
       (10) striking paragraph (3) of subsection (e), as 
     redesignated, and redesignating paragraph (4) as paragraph 
     (3); and
       (11) 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 transportation intermediary, as defined in section 
     3(17)(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 transportation intermediary, as so defined; or
       ``(B) agree to limit the payment of compensation to an 
     ocean transportation intermediary, 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 intermediary services are 
     provided.''.

     SEC. 117. 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, licenses, 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 
     1998, 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 1998.'';
       (2) inserting the following at the end of subsection (e):
       ``(3) The Ocean Shipping Reform Act of 1998 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 
     1998.''.

     SEC. 118. SURETY FOR NON-VESSEL-OPERATING COMMON CARRIERS.

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

  TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR THE FEDERAL MARITIME 
                               COMMISSION

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR 
                   1998.

       There are authorized to be appropriated to the Federal 
     Maritime Commission, $15,000,000 for fiscal year 1998.

     SEC. 202. FEDERAL MARITIME COMMISSION ORGANIZATION.

       Section 102(d) of Reorganization Plan No. 7 of 1961 (75 
     Stat. 840) is amended to read as follows:
       ``(d) A vacancy or vacancies in the membership of 
     Commission shall not impair the power of the Commission to 
     execute its functions. The affirmative vote of a majority of 
     the members serving on the Commission is required to dispose 
     of any matter before the Commission.''.

     SEC. 203. REGULATIONS.

       Not later than March 1, 1999, the Federal Maritime 
     Commission shall prescribe final regulations to implement the 
     changes made by this Act.

       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 ``forwarding and'' in subsection (1)(b);
       (2) striking ``non-vessel-operating common carrier 
     operations,'' in subsection (1)(b) and inserting ``ocean 
     transportation intermediary services and operations,'';
       (3) striking ``methods or practices'' and inserting 
     ``methods, pricing practices, or other practices'' in 
     subsection (1)(b);
       (4) striking ``tariffs of a common carrier'' in subsection 
     7(d) and inserting ``tariffs and service contracts of a 
     common carrier'';
       (5) striking ``use the tariffs of conferences'' in 
     subsections (7)(d) and (9)(b) and inserting ``use tariffs of 
     conferences and service contracts of agreements'';

[[Page S11301]]

       (6) striking ``tariffs filed with the Commission'' in 
     subsection (9)(b) and inserting ``tariffs and service 
     contracts'';
       (7) striking ``freight forwarder,'' each place it appears 
     and inserting ``transportation intermediary,''; and
       (8) striking ``tariff'' each place it appears in subsection 
     (11) and inserting ``tariff or service contract''.
       (b) Stylistic Conformity.--Section 19 of the Merchant 
     Marine Act, 1920 (46 U.S.C. App. 876), as amended by 
     subsection (a), is further amended by--
       (1) redesignating subdivisions (1) through (12) as 
     subsections (a) through (l), respectively;
       (2) redesignating subdivisions (a), (b), and (c) of 
     subsection (a), as redesignated, as paragraphs (1), (2), and 
     (3);
       (3) redesignating subdivisions (a) through (d) of 
     subsection (f), as redesignated, as paragraphs (1) through 
     (4), respectively;
       (4) redesignating subdivisions (a) through (e) of 
     subsection (g), as redesignated, as paragraphs (1) through 
     (5), respectively;
       (5) redesignating clauses (i) and (ii) of subsection 
     (g)(4), as redesignated, as subparagraphs (A) and (B), 
     respectively;
       (6) redesignating subdivisions (a) through (e) of 
     subsection (i), as redesignated, as paragraphs (1) through 
     (5), respectively;
       (7) redesignating subdivisions (a) and (b) of subsection 
     (j), as redesignated, as paragraphs (1) and (2), 
     respectively;
       (8) striking ``subdivision (c) of paragraph (1)'' in 
     subsection (c), as redesignated, and inserting ``subsection 
     (a)(3)'';
       (9) striking ``paragraph (2)'' in subsection (c), as 
     redesignated, and inserting ``subsection (b)'';
       (10) striking ``paragraph (1)(b)'' each place it appears 
     and inserting ``subsection (a)(2)'';
       (11) striking ``subdivision (b),'' in subsection (g)(4), as 
     redesignated, and inserting ``paragraph (2),'';
       (12) striking ``paragraph (9)(d)'' in subsection (j)(1), as 
     redesignated, and inserting ``subsection (i)(4)''; and
       (13) striking ``paragraph (7)(d) or (9)(b)'' in subsection 
     (k), as redesignated, and inserting ``subsection (g)(4) or 
     (i)(2)''.

     SEC. 302. TECHNICAL CORRECTIONS.

       (a) Public Law 89-777.--Sections 2 and 3 of the Act of 
     November 6, 1966 (46 U.S.C. App. 817d and 817e) are amended 
     by striking ``they in their discretion'' each place it 
     appears and inserting ``it in its discretion''.
       (b) Tariff Act of 1930.--Section 641(i) of the Tariff Act 
     of 1930 (19 U.S.C. 1641) is repealed.

           TITLE IV--CERTAIN LOAN GUARANTEES AND COMMITMENTS

     SEC. 401. CERTAIN LOAN GUARANTEES AND COMMITMENTS.

       (a) The Secretary of Transportation may not issue a 
     guarantee or commitment to guarantee a loan for the 
     construction, reconstruction, or reconditioning of a liner 
     vessel under the authority of title XI of the Merchant Marine 
     Act, 1936 (46 U.S.C. App. 1271 et seq.) after the date of 
     enactment of this Act unless the Chairman of the Federal 
     Maritime Commission certifies that the operator of such 
     vessel--
       (1) has not been found by the Commission to have violated 
     section 19 of the Merchant Marine Act, 1920 (46 U.S.C. App. 
     876), or the Foreign Shipping Practices Act of 1988 (46 
     U.S.C. App. 1701a), within the previous 5 years; and
       (2) has not been found by the Commission to have committed 
     a violation of the Shipping Act of 1984 (46 U.S.C. App. 1701 
     et seq.), which involves unjust or unfair discriminatory 
     treatment or undue or unreasonable prejudice or disadvantage 
     with respect to a United States shipper, ocean transportation 
     intermediary, ocean common carrier, or port within the 
     previous 5 years.
       (b) The Secretary of Commerce may not issue a guarantee or 
     a commitment to guarantee a loan for the construction, 
     reconstruction, or reconditioning of a fishing vessel under 
     the authority of title XI of the Merchant Marine Act, 1936 
     (46 U.S.C. App. 1271 et seq.) if the fishing vessel operator 
     has been--
       (1) held liable or liable in rem for a civil penalty 
     pursuant to section 308 of the Magnuson-Stevens Fishery 
     Conservation and Management Act (16 U.S.C. 1858) and not paid 
     the penalty;
       (2) found guilty of an offense pursuant to section 309 of 
     the Magnuson-Stevens Fishery Conservation and Management Act 
     (16 U.S.C. 1859) and not paid the assessed fine or served the 
     assessed sentence;
       (3) held liable for a civil or criminal penalty pursuant to 
     section 105 of the Marine Mammal Protection Act of 1972 (16 
     U.S.C. 1375) and not paid the assessed fine or served the 
     assessed sentence; or
       (4) held liable for a civil penalty by the Coast Guard 
     pursuant to title 33 or 46, United States Code, and not paid 
     the assessed fine.

  Mrs. HUTCHISON. Mr. President, S. 414 is my bill that was passed by 
the Senate. It was passed by the House. It is now back in the 
conference, and there will be an amendment.
  American ports and carriers are disadvantaged by current laws that 
require all contracts to be public. To avoid this, shippers who 
conveniently can, will ship out of foreign ports in nearby Canada and 
Mexico to avoid this. U.S. ports are bypassed and the U.S. carriers 
lose business because only U.S. companies have to reveal their ocean 
transportation costs. This permits their foreign competition to 
undercut our shippers.
  Recent economic problems in Asia will increase pressure in those 
countries to increase their exports. Therefore, S. 414 will be even 
more important as our shippers meet the heightened competitive 
challenge.
  S. 414 attempts to level the playing field between U.S. companies 
which export and their foreign competitors.
  This bill will encourage greater competition among carriers. It will 
provide American exporters and importers with greater choice in 
obtaining ocean transportation services, and promote more ocean 
shipping activity for our carriers and our ports.
  In providing our shippers with this important reform, we have still 
attempted to preserve anti-discrimination provisions in current law and 
the elements of our current ``transparent'' system that protect our 
ports, smaller shippers and U.S. workers. This bill balances the need 
to have enough transparency to assure fair pricing with contract 
privacy.
  Our shippers say they want more flexibility in dealing with their 
ocean carriers, and the ability to go outside the traditional tariff 
system and conference structure. We've provided this needed 
confidentiality, but balanced it with protections for ports and U.S. 
dock workers who seek information on the movement of commodities to 
protect their competitive position.
  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 bill represents the first 
major reform of this critical industry in a decade, and the most 
significant change to the underlying statute since 1984.
  Mr. President, I am proud to have worked with the distinguished 
Majority Leader and colleagues from both sides of the aisle to pass 
this important legislation.
  I would like to commend, in addition to the Majority Leader, the 
ranking member of the full Commerce Committee, Senator Hollings, the 
ranking member of the Surface Transportation and Merchant Marine 
Subcommittee, Senator Inouye, and my colleague from Louisiana, Senator 
Breaux, for their hard work in putting together meaningful legislation 
that we're passing today.
  I am very pleased we have now worked this important bill out. I think 
it will certainly help our economy.
  I ask unanimous consent the Senate concur in the amendment of the 
House.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Mr. President, I rise to acknowledge today's passage of the 
Ocean Shipping Reform Act. This action sets America's maritime industry 
on the right course. It increases competition for U.S. exporters by 
allowing America's exporters to compete on a level playing field with 
foreign entities. It has been fourteen years since Congress tackled 
comprehensive ocean shipping reform for the commercial sector. Since 
most of the world's commerce travels by sea, and the industry has 
changed so much during that period, additional reform is long since 
overdue. This legislation will update, revise, and improve upon the 
Shipping Act of 1984. It ensures fairness for U.S. carriers and 
shippers by modernizing America's ocean shipping regulatory system.
  The Ocean Shipping Reform Act represents true compromise. This 
legislative effort brought together many divergent interests--parties 
who often do not agree with one another. As my colleagues can attest 
to, achieving mutually beneficial reform was not an easy task. The 
process was difficult and sometimes arduous. It was, however, a 
necessary and important legislative journey for our nation's ocean 
shipping industry. In the end, all affected parties rolled-up their 
sleeves and worked hard to develop an equitable solution. The result is 
a consensus bill that received the solid backing of all industry 
segments including U.S. shippers, American and foreign ocean carriers, 
ports nation-wide, and U.S. labor. The 105th Congress' passage of this 
compromise measure represents a milestone in maritime policy. Everyone 
involved can be proud of this significant accomplishment.
  I would like to take this opportunity to express my thanks to the 
many individuals from industry and labor who participated in this 
endeavor. I also want to congratulate the many Senators and staff who 
worked on this bill.

[[Page S11302]]

 I particularly want to express my gratitude to Senator McCain, Senator 
Kay Bailey Hutchison and Senator Gorton who worked diligently to 
deliver to the U.S. shipping industry and to all Americans real 
maritime reform. I also want to recognize the efforts of Chairman 
Shuster of the House Committee on Transportation and Infrastructure who 
spearheaded this reform effort in the House of Representatives.
  Mr. President, the Ocean Shipping Reform Act of 1998 focuses on the 
needs of America's small, medium, and large shippers, carriers, U.S. 
ports, and on our nation's dock workers. It will ensure that the 
collective power of some industry elements will not be allowed to abuse 
other industry segments. The bill provides protection for small ports 
and small shippers through increased competition among shipping lines 
for export and import cargoes. It allows shipping lines and their 
customers to negotiate volume discount arrangements through the signing 
of confidential service contracts for transportation services without 
first obtaining the blessing of the shipping line conferences. This 
legislation gives shippers greater ability to shop around for the best 
rates and service from the carriers of their choice. Additionally, the 
bill continues current filing requirements for service contracts to 
provide continued FMC oversight of common carrier activities.
  This legislation will retain common carrier tariff publication and 
enforcement while eliminating 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 or an 
electronic bulletin board to satisfy the tariff publication 
requirement. This just makes common sense. It reduces the cost of doing 
business while maintaining protections for small shippers. The wide 
availability of competitive price and service information will make for 
a better informed shipping consumer.
  The Ocean Shipping Reform Act of 1998 does much to ensure that 
America's presence in the shipping industry is not subjected to unfair 
foreign rules or discriminatory practices. The FMC's enforcement 
actions taken against unfair port practices in Japan illustrates the 
essential and unique mission that this agency performs. Even more 
recently, issues concerning Brazil and China have come on their radar 
screen. This is a function that will continue, a mission that I 
wholeheartedly support.
  This legislation will significantly change the regulatory framework 
governing ocean transportation. It increases shipper and carrier 
flexibility and competitive options, ensures tariff accuracy and 
fairness, produces government efficiencies and provides genuine reform 
to protect American interests. These changes will strengthen the 
ability of common carriers to market their services and makes America's 
shippers more competitive. The Ocean Shipping Reform Act of 1998 makes 
sense for American businesses and consumers alike. It will help sustain 
a strong and vibrant American maritime industry--fostering economic 
growth and enhancing our national security for years to come.
  Mr. McCAIN. Mr. President, today I rise to praise the Senate for the 
final passage of S. 414, the Ocean Shipping Reform Act of 1998, and to 
clarify the legislative history of the bill with the Senator from 
Texas, who authorized the bill.
  On April 21, 1998, the Senate first adopted S. 414. In her statement 
providing legislative history for the bill, the Senator from Texas 
identified a need to resolve the requirement for Federal agencies, 
including those in the Department of Defense, to ensure U.S.-flag ocean 
common carrier compliance with cargo preference law requirements 
concerning shipping rates with the new confidential service contracting 
regime authorized by S. 414., At that time, my colleague encouraged the 
Federal Maritime Commission to work with other Federal agencies to 
address this concern.
  I'd like to ask the Senator from Texas to clarify the ability of the 
FMC to share confidential service contract rate and service information 
with other Federal agencies to ensure that U.S.-flag shipping rates for 
preference cargo shipments meet statutory requirements.
  Mrs. HUTCHISON. Mr. President, I want to thank the distinguished 
Chairman of the Commerce Committee for raising this issue. The General 
Counsel of the FMC, in a recent written response to an inquiry on this 
issue with respect to the Department of Defense, stated:

       I have no doubt that we will be able to develop an 
     intragovernmental system for providing the DOD with the 
     pricing and service information it needs to effectively 
     execute its mission, within the framework of S. 414. If we 
     determine that technical legislative corrections would aid 
     this process, we will no doubt make such recommendations 
     jointly. At this time, however, I do not believe that any 
     additional amendments to the bill are necessary to meet your 
     concerns for the Department.

  Mr. President, I want to make it clear that the FMC is authorized to 
share with another Federal agency service contract information that 
parties of the service contract have legally decided to protect from 
public disclosure in order to enable that Federal agency to ensure the 
compliance of U.S.-flag ocean common carriers with cargo preference law 
shipping rate requirements. Of course, that confidential service 
contract information would remain protected from disclosure to the 
public consistent with the Shipping Act of 1984, as amended by the 
Ocean Shipping Reform Act of 1998, and other applicable Federal laws.
  Mr. McCAIN. Mr. President, I'd like to thank my colleague from Texas 
for clarifying this issue. Also, I'd like to complement her on her 
efforts to protect the interests of the Department of Defense, other 
Federal agencies, and American taxpayers while reforming the ocean 
liner transportation system in a manner that encourages greater 
competition. The Ocean Shipping Reform Act of 1998 is a thoroughly 
crafted piece of legislation that required hard work by her and many 
others for more than 3 years. It is a worthy accomplishment for the 
106th Congress.

                          ____________________