[Congressional Record Volume 150, Number 119 (Tuesday, September 28, 2004)]
[House]
[Pages H7590-H7654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1430
                   TITLE 46 CODIFICATION ACT OF 2004

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 4319) to complete the codification of title 46, United 
States Code, ``Shipping'', as positive law, as amended.
  The Clerk read as follows:

                               H.R. 4319

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Title 46 
     Codification Act of 2004''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1.  Short title; table of contents.
Sec. 2.  Title analysis.
Sec. 3.  Subtitle I of title 46.
Sec. 4.  Subtitle II of title 46.
Sec. 5.  Subtitle III of title 46.
Sec. 6.  Subtitle IV of title 46.
Sec. 7.  Subtitle V of title 46.
Sec. 8.  Subtitle VI of title 46.
Sec. 9.  Subtitle VII of title 46.
Sec. 10.  Subtitle VIII of title 46.
Sec. 11.  Maritime Administration.
Sec. 12.  Amendments relating to Maritime Security Act of 2003.
Sec. 13.  Amendments to partially restated provisions.
Sec. 14.  Additional amendments to title 46.
Sec. 15.  Conforming amendments to other laws.
Sec. 16.  Legislative construction and transitional provisions.
Sec. 17.  Repeals.
Sec. 18.  Effective date.

     SEC. 2. TITLE ANALYSIS.

       The title analysis of title 46, United States Code, is 
     amended to read as follows:

``Subtitle                                                     Sec.

``I.  GENERAL.......................................................101
``II.  VESSELS AND SEAMEN..........................................2101
``III.  MARITIME LIABILITY........................................30101
``IV.  REGULATION OF OCEAN SHIPPING...............................40101
``V.  MERCHANT MARINE.............................................50101
``VI.  CLEARANCE, TONNAGE TAXES, AND DUTIES.......................60101
``VII.  SECURITY AND DRUG ENFORCEMENT.............................70101
``VIII.  MISCELLANEOUS.........................................80101''.

     SEC. 3. SUBTITLE I OF TITLE 46.

       Title 46, United States Code, is amended by inserting after 
     the title analysis the following:

                         ``Subtitle I--General

``Chapter                                                      Sec.

``1.  Definitions...................................................101
``3.  Federal Maritime Commission...................................301
``5.  Other General Provisions......................................501

                        ``CHAPTER 1--DEFINITIONS

``Sec.
``101.  Agency.
``102.  Barge.
``103.  Boundary Line.
``104.  Citizen of the United States.
``105.  Consular officer.
``106.  Documented vessel.
``107.  Exclusive economic zone.
``108.  Fisheries.
``109.  Foreign commerce or trade.
``110.  Foreign vessel.
``111.  Numbered vessel.
``112.  State.
``113.  Undocumented.
``114.  United States.
``115.  Vessel.
``116.  Vessel of the United States.

     ``Sec. 101. Agency

       ``In this title, the term `agency' means a department, 
     agency, or instrumentality of the United States Government.

     ``Sec. 102. Barge

       ``In this title, the term `barge' means a non-self-
     propelled vessel.

     ``Sec. 103. Boundary Line

       ``In this title, the term `Boundary Line' means a line 
     established under section 2(b) of the Act of February 19, 
     1895 (33 U.S.C. 151).

     ``Sec. 104. Citizen of the United States

       ``In this title, the term `citizen of the United States', 
     when used in reference to a natural person, means an 
     individual who is a national of the United States as defined 
     in section 101(a)(22) of the Immigration and Nationality Act 
     (8 U.S.C. 1101(a)(22)).

     ``Sec. 105. Consular officer

       ``In this title, the term `consular officer' means an 
     officer or employee of the United States Government 
     designated under regulations to issue visas.

     ``Sec. 106. Documented vessel

       ``In this title, the term `documented vessel' means a 
     vessel for which a certificate of documentation has been 
     issued under chapter 121 of this title.

     ``Sec. 107. Exclusive economic zone

       ``In this title, the term `exclusive economic zone' means 
     the zone established by Presidential Proclamation 5030 of 
     March 10, 1983 (16 U.S.C. 1453 note).

     ``Sec. 108. Fisheries

       ``In this title, the term `fisheries' includes processing, 
     storing, transporting (except in foreign commerce), planting, 
     cultivating, catching, taking, or harvesting fish, shellfish, 
     marine animals, pearls, shells, or marine vegetation in the 
     navigable waters of the United States or in the exclusive 
     economic zone.

     ``Sec. 109. Foreign commerce or trade

       ``(a) In General.--In this title, the terms `foreign 
     commerce' and `foreign trade' mean commerce or trade between 
     a place in the United States and a place in a foreign 
     country.
       ``(b) Capital Construction Funds and Construction-
     Differential Subsidies.--In the context of capital 
     construction funds under chapter 535 of this title, and in 
     the context of construction-differential subsidies under 
     title V of the Merchant Marine Act, 1936, the terms `foreign 
     commerce' and `foreign trade' also include, in the case of 
     liquid and dry bulk cargo carrying services, trading between 
     foreign ports in accordance with normal commercial bulk 
     shipping practices in a manner that will permit United 
     States-flag bulk vessels to compete freely with foreign-flag 
     bulk vessels in their operation or competition for charters, 
     subject to regulations prescribed by the Secretary of 
     Transportation.

     ``Sec. 110. Foreign vessel

       ``In this title, the term `foreign vessel' means a vessel 
     of foreign registry or operated under the authority of a 
     foreign country.

     ``Sec. 111. Numbered vessel

       ``In this title, the term `numbered vessel' means a vessel 
     for which a number has been issued under chapter 123 of this 
     title.

[[Page H7591]]

     ``Sec. 112. State

       ``In this title, the term `State' means a State of the 
     United States, the District of Columbia, Guam, Puerto Rico, 
     the Virgin Islands, American Samoa, the Northern Mariana 
     Islands, and any other territory or possession of the United 
     States.

     ``Sec. 113. Undocumented

       ``In this title, the term `undocumented' means not having 
     and not required to have a certificate of documentation 
     issued under chapter 121 of this title.

     ``Sec. 114. United States

       ``In this title, the term `United States', when used in a 
     geographic sense, means the States of the United States, the 
     District of Columbia, Guam, Puerto Rico, the Virgin Islands, 
     American Samoa, the Northern Mariana Islands, and any other 
     territory or possession of the United States.

     ``Sec. 115. Vessel

       ``In this title, the term `vessel' has the meaning given 
     that term in section 3 of title 1.

     ``Sec. 116. Vessel of the United States

       ``In this title, the term `vessel of the United States' 
     means a vessel documented under chapter 121 of this title, 
     numbered under chapter 123 of this title, or titled under the 
     law of a State.

                ``CHAPTER 3--FEDERAL MARITIME COMMISSION

``Sec.
``301.  General organization.
``302.  Quorum.
``303.  Record of meetings and votes.
``304.  Delegation of authority.
``305.  Regulations.
``306.  Annual report.
``307.  Expenditures.

     ``Sec. 301. General organization

       ``(a) Organization.--The Federal Maritime Commission is an 
     independent establishment of the United States Government.
       ``(b) Commissioners.--
       ``(1) Composition.--The Commission is composed of 5 
     Commissioners, appointed by the President by and with the 
     advice and consent of the Senate. Not more than 3 
     Commissioners may be appointed from the same political party.
       ``(2) Terms.--The term of each Commissioner is 5 years, 
     with each term beginning one year apart. An individual 
     appointed to fill a vacancy is appointed only for the 
     unexpired term of the individual being succeeded. A vacancy 
     shall be filled in the same manner as the original 
     appointment. When the term of a Commissioner ends, the 
     Commissioner may continue to serve until a successor is 
     appointed and qualified.
       ``(3) Removal.--The President may remove a Commissioner for 
     inefficiency, neglect of duty, or malfeasance in office.
       ``(c) Chairman.--
       ``(1) Designation.--The President shall designate one of 
     the Commissioners as Chairman.
       ``(2) General authority.--The Chairman is the chief 
     executive and administrative officer of the Commission. In 
     carrying out the duties and powers of the Commission (other 
     than under paragraph (3)), the Chairman is subject to the 
     policies, regulatory decisions, findings, and determinations 
     of the Commission.
       ``(3) Particular duties.--
       ``(A) In general.--The Chairman shall--
       ``(i) appoint and supervise officers and employees of the 
     Commission;
       ``(ii) appoint the heads of major organizational units, but 
     only after consultation with the other Commissioners;
       ``(iii) distribute the business of the Commission among 
     personnel and organizational units;
       ``(iv) supervise the expenditure of money for 
     administrative purposes; and
       ``(v) assign Commission personnel, including Commissioners, 
     to perform duties and powers delegated by the Commission 
     under section 304 of this title.
       ``(B) Nonapplication.--Subparagraph (A) (other than clause 
     (v)) does not apply to personnel employed regularly and full-
     time in the offices of Commissioners other than the Chairman.
       ``(4) Delegation.--The Chairman may designate officers and 
     employees under the Chairman's jurisdiction to perform duties 
     and powers of the Chairman, subject to the Chairman's 
     supervision and direction.
       ``(d) Seal.--The Commission shall have a seal which shall 
     be judicially recognized.

     ``Sec. 302. Quorum

       ``A vacancy or vacancies in the membership of the Federal 
     Maritime Commission do not impair the power of the Commission 
     to execute its functions. The affirmative vote of a majority 
     of the Commissioners serving on the Commission is required to 
     dispose of any matter before the Commission.

     ``Sec. 303. Record of meetings and votes

       ``The Federal Maritime Commission, through its secretary, 
     shall keep a record of its meetings and the votes taken on 
     any action, order, contract, or financial transaction of the 
     Commission.

     ``Sec. 304. Delegation of authority

       ``(a) Delegation.--The Federal Maritime Commission, by 
     published order or regulation, may delegate to a division of 
     the Commission, an individual Commissioner, an employee 
     board, or an officer or employee of the Commission, any of 
     its duties or powers, including those relating to hearing, 
     determining, ordering, certifying, reporting, or otherwise 
     acting on any matter. This subsection does not affect section 
     556(b) of title 5.
       ``(b) Review.--The Commission may review any action taken 
     under a delegation of authority under subsection (a). The 
     review may be taken on the Commission's own initiative or on 
     the petition of a party to or an intervenor in the action, 
     within the time and in the manner prescribed by the 
     Commission. The vote of a majority of the Commission, less 
     one member, is sufficient to bring an action before the 
     Commission for review.
       ``(c) Deemed Action of Commission.--If the Commission 
     declines review, or if review is not sought, within the time 
     prescribed under subsection (b), the action taken under the 
     delegation of authority is deemed to be the action of the 
     Commission.

     ``Sec. 305. Regulations

       ``The Federal Maritime Commission may prescribe regulations 
     to carry out its duties and powers.

     ``Sec. 306. Annual report

       ``(a) In General.--Not later than April 1 of each year, the 
     Federal Maritime Commission shall submit a report to 
     Congress. The report shall include the results of its 
     investigations, a summary of its transactions, the purposes 
     for which all of its expenditures were made, and any 
     recommendations for legislation.
       ``(b) Report on Foreign Laws and Practices.--The Commission 
     shall include in its annual report to Congress--
       ``(1) a list of the 20 foreign countries that generated the 
     largest volume of oceanborne liner cargo for the most recent 
     calendar year in bilateral trade with the United States;
       ``(2) an analysis of conditions described in section 
     42302(a) of this title being investigated or found to exist 
     in foreign countries;
       ``(3) any actions being taken by the Commission to offset 
     those conditions;
       ``(4) any recommendations for additional legislation to 
     offset those conditions; and
       ``(5) a list of petitions filed under section 42302(b) of 
     this title that the Commission rejected and the reasons for 
     each rejection.

     ``Sec. 307. Expenditures

       ``The Federal Maritime Commission may make such 
     expenditures as are necessary in the performance of its 
     functions from funds appropriated or otherwise made available 
     to it, which appropriations are authorized.

                 ``CHAPTER 5--OTHER GENERAL PROVISIONS

``Sec.
``501.  Waiver of navigation and vessel-inspection laws.
``502.  Cargo exempt from forfeiture.
``503.  Notice of seizure.
``504.  Remission of fees and penalties.
``505.  Penalty for violating regulation or order.

     ``Sec. 501. Waiver of navigation and vessel-inspection laws

       ``(a) On Request of Secretary of Defense.--On request of 
     the Secretary of Defense, the head of an agency responsible 
     for the administration of the navigation or vessel-inspection 
     laws shall waive compliance with those laws to the extent the 
     Secretary considers necessary in the interest of national 
     defense.
       ``(b) By Head of Agency.--When the head of an agency 
     responsible for the administration of the navigation or 
     vessel-inspection laws considers it necessary in the interest 
     of national defense, the individual may waive compliance with 
     those laws to the extent, in the manner, and on the terms the 
     individual prescribes.
       ``(c) Termination of Authority.--The authority granted by 
     this section shall terminate at such time as the Congress by 
     concurrent resolution or the President may designate.

     ``Sec. 502. Cargo exempt from forfeiture

       ``Cargo on a vessel is exempt from forfeiture under this 
     title if--
       ``(1) the cargo is owned in good faith by a person not the 
     owner, master, or crewmember of the vessel; and
       ``(2) the customs duties on the cargo have been paid or 
     secured for payment as provided by law.

     ``Sec. 503. Notice of seizure

       ``When a forfeiture of a vessel or cargo accrues, the 
     official of the United States Government required to give 
     notice of the seizure of the vessel or cargo shall include in 
     the notice, if they are known to that official, the name and 
     the place of residence of the owner or consignee at the time 
     of the seizure.

     ``Sec. 504. Remission of fees and penalties

       ``Any part of a fee, tax, or penalty paid or a forfeiture 
     incurred under a law or regulation relating to vessels or 
     seamen may be remitted if--
       ``(1) application for the remission is made within one year 
     after the date of the payment or forfeiture; and
       ``(2) it is found that the fee, tax, penalty, or forfeiture 
     was improperly or excessively imposed.

     ``Sec. 505. Penalty for violating regulation or order

       ``A person convicted of knowingly and willfully violating a 
     regulation or order of the Federal Maritime Commission or the 
     Secretary of Transportation under subtitle IV or V of this 
     title, for which no penalty is expressly provided, shall be 
     fined not more than $500. Each day of a continuing violation 
     is a separate offense.''.

     SEC. 4. SUBTITLE II OF TITLE 46.

       Chapter 121 of title 46, United States Code, is amended to 
     read as follows:

                ``CHAPTER 121--DOCUMENTATION OF VESSELS

                        ``SUBCHAPTER I--GENERAL

``Sec.
``12101.  Definitions.
``12102.  Vessels requiring documentation.
``12103.  General eligibility requirements.
``12104.  Applications for documentation.
``12105.  Issuance of documentation.
``12106.  Surrender of title and number.
``12107.  Wrecked vessels.

        ``SUBCHAPTER II--ENDORSEMENTS AND SPECIAL DOCUMENTATION

``12111.  Registry endorsement.

[[Page H7592]]

``12112.  Coastwise endorsement.
``12113.  Fishery endorsement.
``12114.  Recreational endorsement.
``12115.  Temporary endorsement for vessels procured outside the United 
              States.
``12116.  Limited endorsements for Guam, American Samoa, and Northern 
              Mariana Islands.
``12117.  Oil spill response vessels.
``12118.  Owners engaged primarily in manufacturing or mineral 
              industry.
``12119.  Owners engaged primarily in leasing or financing 
              transactions.
``12120.  Liquified gas tankers.
``12121.  Small passenger vessels and uninspected passenger vessels.

                    ``SUBCHAPTER III--MISCELLANEOUS

``12131.  Command of documented vessels.
``12132.  Loss of coastwise trade privileges.
``12133.  Duty to carry certificate on vessel and allow examination.
``12134.  Evidentiary uses of documentation.
``12135.  Invalidation of certificates of documentation.
``12136.  Surrender of certificates of documentation.
``12137.  Recording of vessels built in the United States.
``12138.  List of documented vessels.
``12139.  Reports.

                       ``SUBCHAPTER IV--PENALTIES

``12151.  Penalties.
``12152.  Denial or revocation of endorsement for non-payment of civil 
              penalty.

                        ``SUBCHAPTER I--GENERAL

     ``Sec. 12101. Definitions

       ``(a) Rebuilt in the United States.--In this chapter, a 
     vessel is deemed to have been rebuilt in the United States 
     only if the entire rebuilding, including the construction of 
     any major component of the hull or superstructure, was done 
     in the United States.
       ``(b) Related Terms in Other Laws.--When the following 
     terms are used in a law, regulation, document, ruling, or 
     other official act referring to the documentation of a 
     vessel, the following definitions apply:
       ``(1) Registry endorsement.--The terms `certificate of 
     registry', `register', and `registry' mean a certificate of 
     documentation with a registry endorsement issued under this 
     chapter.
       ``(2) Coastwise endorsement.--The terms `license', 
     `enrollment and license', `license for the coastwise (or 
     coasting) trade', and `enrollment and license for the 
     coastwise (or coasting) trade' mean a certificate of 
     documentation with a coastwise endorsement issued under this 
     chapter.
       ``(3) Yacht.--The term `yacht' means a recreational vessel 
     even if not documented.

     ``Sec. 12102. Vessels requiring documentation

       ``(a) In General.--Except as otherwise provided, a vessel 
     may engage in a trade only if the vessel has been issued a 
     certificate of documentation with an endorsement for that 
     trade under this chapter.
       ``(b) Vessels Less Than 5 Net Tons.--A vessel of less than 
     5 net tons may engage in a trade without being documented if 
     the vessel otherwise satisfies the requirements to engage in 
     the particular trade.
       ``(c) Barges.--A barge qualified to engage in the coastwise 
     trade may engage in the coastwise trade, without being 
     documented, on rivers, harbors, lakes (except the Great 
     Lakes), canals, and inland waters.

     ``Sec. 12103. General eligibility requirements

       ``(a) In General.--Except as otherwise provided, a 
     certificate of documentation for a vessel may be issued under 
     this chapter only if the vessel is--
       ``(1) wholly owned by one or more individuals or entities 
     described in subsection (b);
       ``(2) at least 5 net tons as measured under part J of this 
     subtitle; and
       ``(3) not documented under the laws of a foreign country.
       ``(b) Eligible Owners.--For purposes of subsection (a)(1), 
     the following are eligible owners:
       ``(1) An individual who is a citizen of the United States.
       ``(2) An association, trust, joint venture, or other entity 
     if--
       ``(A) each of its members is a citizen of the United 
     States; and
       ``(B) it is capable of holding title to a vessel under the 
     laws of the United States or a State.
       ``(3) A partnership if--
       ``(A) each general partner is a citizen of the United 
     States; and
       ``(B) the controlling interest in the partnership is owned 
     by citizens of the United States.
       ``(4) A corporation if--
       ``(A) it is incorporated under the laws of the United 
     States or a State;
       ``(B) its chief executive officer, by whatever title, and 
     the chairman of its board of directors are citizens of the 
     United States; and
       ``(C) no more of its directors are noncitizens than a 
     minority of the number necessary to constitute a quorum.
       ``(5) The United States Government.
       ``(6) The government of a State.
       ``(c) Temporary Certificates Prior to Measurement.--
     Notwithstanding subsection (a)(2), the Secretary may issue a 
     temporary certificate of documentation for a vessel before it 
     is measured.

     ``Sec. 12104. Applications for documentation

       ``(a) In General.--An application for a certificate of 
     documentation or endorsement under this chapter must be filed 
     by the owner of the vessel. The application must be filed in 
     the manner, be in the form, and contain the information 
     prescribed by the Secretary.
       ``(b) Applicant's Identifying Information.--The Secretary 
     shall require the applicant to provide--
       ``(1) if the applicant is an individual, the individual's 
     social security number; or
       ``(2) if the applicant is an entity--
       ``(A) the entity's taxpayer identification number; or
       ``(B) if the entity does not have a taxpayer identification 
     number, the social security number of an individual who is a 
     corporate officer, general partner, or individual trustee of 
     the entity and who signs the application.

     ``Sec. 12105. Issuance of documentation

       ``(a) In General.--Except as provided in section 12152 of 
     this title, the Secretary, on receipt of a proper 
     application, shall issue a certificate of documentation or a 
     temporary certificate of documentation for a vessel 
     satisfying the requirements of section 12103 of this title. 
     The certificate shall contain each endorsement under 
     subchapter II of this chapter for which the owner applies and 
     the vessel is eligible.
       ``(b) Temporary Certificates for Recreational Vessels.--The 
     Secretary may delegate, subject to the supervision and 
     control of the Secretary and under terms prescribed by 
     regulation, to private entities determined and certified by 
     the Secretary to be qualified, the authority to issue a 
     temporary certificate of documentation for a recreational 
     vessel eligible under section 12103 of this title. A 
     temporary certificate issued under this subsection is valid 
     for not more than 30 days.
       ``(c) Information To Be Included in Certificate.--A 
     certificate of documentation shall--
       ``(1) identify and describe the vessel;
       ``(2) identify the owner of the vessel; and
       ``(3) contain additional information prescribed by the 
     Secretary.
       ``(d) Procedures To Ensure Integrity and Accuracy.--The 
     Secretary shall prescribe procedures to ensure the integrity 
     of, and the accuracy of information contained in, 
     certificates of documentation.

     ``Sec. 12106. Surrender of title and number

       ``(a) In General.--A documented vessel may not be titled by 
     a State or required to display numbers under chapter 123 of 
     this title, and any certificate of title issued by a State 
     for a documented vessel shall be surrendered as provided by 
     regulations prescribed by the Secretary.
       ``(b) Vessels Covered by Preferred Mortgage.--The Secretary 
     may approve the surrender under subsection (a) of a 
     certificate of title for a vessel covered by a preferred 
     mortgage under section 31322(d) of this title only if the 
     mortgagee consents.

     ``Sec. 12107. Wrecked vessels

       ``(a) Requirements.--A vessel is a wrecked vessel under 
     this chapter if it--
       ``(1) was wrecked on a coast of the United States or 
     adjacent waters; and
       ``(2) has undergone repairs in a shipyard in the United 
     States equal to at least 3 times the appraised salvage value 
     of the vessel.
       ``(b) Appraisals.--The Secretary may appoint a board of 
     three appraisers to determine whether a vessel satisfies 
     subsection (a)(2). The costs of the appraisal shall be paid 
     by the owner of the vessel.

        ``SUBCHAPTER II--ENDORSEMENTS AND SPECIAL DOCUMENTATION

     ``Sec. 12111. Registry endorsement

       ``(a) Requirements.--A registry endorsement may be issued 
     for a vessel that satisfies the requirements of section 12103 
     of this title.
       ``(b) Authorized Activity.--A vessel for which a registry 
     endorsement is issued may engage in foreign trade or trade 
     with Guam, American Samoa, Wake, Midway, or Kingman Reef.
       ``(c) Certain Vessels Owned by Trusts.--
       ``(1) Nonapplication of beneficiary citizenship 
     requirement.--For the issuance of a certificate of 
     documentation with only a registry endorsement, the 
     beneficiaries of a trust are not required to be citizens of 
     the United States if the trust qualifies under paragraph (2) 
     and the vessel is subject to a charter to a citizen of the 
     United States.
       ``(2) Requirements for trust to qualify.--
       ``(A) In general.--Subject to subparagraph (B), a trust 
     qualifies under this paragraph with respect to a vessel only 
     if--
       ``(i) each trustee is a citizen of the United States; and
       ``(ii) the application for documentation of the vessel 
     includes the affidavit of each trustee stating that the 
     trustee is not aware of any reason involving a beneficiary of 
     the trust that is not a citizen of the United States, or 
     involving any other person that is not a citizen of the 
     United States, as a result of which the beneficiary or other 
     person would hold more than 25 percent of the aggregate power 
     to influence or limit the exercise of the authority of the 
     trustee with respect to matters involving any ownership or 
     operation of the vessel that may adversely affect the 
     interests of the United States.
       ``(B) Authority of non-citizens.--If any person that is not 
     a citizen of the United States has authority to direct or 
     participate in directing a trustee for a trust in matters 
     involving any ownership or operation of the vessel that may 
     adversely affect the interests of the United States or in 
     removing a trustee for a trust without cause, either directly 
     or indirectly through the control of another person, the 
     trust is not qualified under this paragraph unless the trust 
     instrument provides that persons who are not citizens of the 
     United States may not hold more than 25 percent of the 
     aggregate authority to so direct or remove a trustee.
       ``(C) Ownership by non-citizens.--Subparagraphs (A) and (B) 
     do not prohibit a person that is not a citizen of the United 
     States from holding more than 25 percent of the beneficial 
     interest in a trust.
       ``(3) Citizenship of person chartering vessel.--If a person 
     chartering a vessel from a trust that qualifies under 
     paragraph (2) is a citizen of the United States under section 
     50501 of this title, the vessel is deemed to be owned by a 
     citizen of the United States for purposes of that

[[Page H7593]]

     section and related laws, except subtitle B of title VI of 
     the Merchant Marine Act, 1936.

     ``Sec. 12112. Coastwise endorsement

       ``(a) Requirements.--A coastwise endorsement may be issued 
     for a vessel that--
       ``(1) satisfies the requirements of section 12103 of this 
     title;
       ``(2)(A) was built in the United States; or
       ``(B) if not built in the United States--
       ``(i) was captured in war by citizens of the United States 
     and lawfully condemned as prize;
       ``(ii) was adjudged to be forfeited for a breach of the 
     laws of the United States; or
       ``(iii) qualifies as a wrecked vessel under section 12107 
     of this title; and
       ``(3) otherwise qualifies under the laws of the United 
     States to engage in the coastwise trade.
       ``(b) Authorized Activity.--Subject to the laws of the 
     United States regulating the coastwise trade, a vessel for 
     which a coastwise endorsement is issued may engage in the 
     coastwise trade.

     ``Sec. 12113. Fishery endorsement

       ``(a) Requirements.--A fishery endorsement may be issued 
     for a vessel that--
       ``(1) satisfies the requirements of section 12103 of this 
     title and, if owned by an entity, the entity satisfies the 
     ownership requirements in subsection (c);
       ``(2) was built in the United States;
       ``(3) if rebuilt, was rebuilt in the United States;
       ``(4) was not forfeited to the United States Government 
     after July 1, 2001, for a breach of the laws of the United 
     States; and
       ``(5) otherwise qualifies under the laws of the United 
     States to engage in the fisheries.
       ``(b) Authorized Activity.--
       ``(1) In general.--Subject to the laws of the United States 
     regulating the fisheries, a vessel for which a fishery 
     endorsement is issued may engage in the fisheries.
       ``(2) Use by prohibited persons.--A fishery endorsement is 
     invalid immediately if the vessel for which it is issued is 
     used as a fishing vessel while it is chartered or leased to 
     an individual who is not a citizen of the United States or to 
     an entity that is not eligible to own a vessel with a fishery 
     endorsement.
       ``(c) Ownership Requirements for Entities.--
       ``(1) In general.--A vessel owned by an entity is eligible 
     for a fishery endorsement only if at least 75 percent of the 
     interest in the entity, at each tier of ownership and in the 
     aggregate, is owned and controlled by citizens of the United 
     States.
       ``(2) Determining 75 percent interest.--In determining 
     whether at least 75 percent of the interest in the entity is 
     owned and controlled by citizens of the United States under 
     paragraph (1), the Secretary shall apply section 50501(d) of 
     this title, except that for this purpose the terms `control' 
     or `controlled'--
       ``(A) include the right to--
       ``(i) direct the business of the entity;
       ``(ii) limit the actions of or replace the chief executive 
     officer, a majority of the board of directors, any general 
     partner, or any person serving in a management capacity of 
     the entity; or
       ``(iii) direct the transfer, operation, or manning of a 
     vessel with a fishery endorsement; but
       ``(B) do not include the right to simply participate in the 
     activities under clause (A), or the exercise of rights under 
     loan or mortgage covenants by a mortgagee eligible to be a 
     preferred mortgagee under section 31322(a) of this title, 
     except that a mortgagee not eligible to own a vessel with a 
     fishery endorsement may only operate such a vessel to the 
     extent necessary for the immediate safety of the vessel or 
     for repairs, drydocking, or berthing changes.
       ``(3) Exceptions.--This subsection does not apply to a 
     vessel when it is engaged in the fisheries in the exclusive 
     economic zone under the authority of the Western Pacific 
     Fishery Management Council established under section 
     302(a)(1)(H) of the Magnuson-Stevens Fishery Conservation and 
     Management Act (16 U.S.C. 1852(a)(1)(H)) or to a purse seine 
     vessel when it is engaged in tuna fishing in the Pacific 
     Ocean outside the exclusive economic zone or pursuant to the 
     South Pacific Regional Fisheries Treaty, provided that the 
     owner of the vessel continues to comply with the eligibility 
     requirements for a fishery endorsement under the Federal law 
     that was in effect on October 1, 1998. A fishery endorsement 
     issued pursuant to this paragraph is valid for engaging only 
     in the activities described in this paragraph.
       ``(d) Requirements Based on Length, Tonnage, or 
     Horsepower.--
       ``(1) Application.--This subsection applies to a vessel 
     that--
       ``(A) is greater than 165 feet in registered length;
       ``(B) is more than 750 gross registered tons as measured 
     under chapter 145 of this title or 1,900 gross registered 
     tons as measured under chapter 143 of this title; or
       ``(C) has an engine or engines capable of producing a total 
     of more than 3,000 shaft horsepower.
       ``(2) Requirements.--A vessel subject to this subsection is 
     not eligible for a fishery endorsement unless--
       ``(A)(i) a certificate of documentation was issued for the 
     vessel and endorsed with a fishery endorsement that was 
     effective on September 25, 1997;
       ``(ii) the vessel is not placed under foreign registry 
     after October 21, 1998; and
       ``(iii) if the fishery endorsement is invalidated after 
     October 21, 1998, application is made for a new fishery 
     endorsement within 15 business days of the invalidation; or
       ``(B) the owner of the vessel demonstrates to the Secretary 
     that the regional fishery management council of jurisdiction 
     established under section 302(a)(1) of the Magnuson-Stevens 
     Fishery Conservation and Management Act (16 U.S.C. 
     1852(a)(1)) has recommended after October 21, 1998, and the 
     Secretary of Commerce has approved, conservation and 
     management measures in accordance with the American Fisheries 
     Act (Public Law 105-277, div. C, title II) (16 U.S.C. 1851 
     note) to allow the vessel to be used in fisheries under the 
     council's authority.
       ``(e) Vessels Measuring 100 Feet or Greater.--
       ``(1) In general.--The Administrator of the Maritime 
     Administration shall administer subsections (c) and (d) with 
     respect to vessels 100 feet or greater in registered length. 
     The owner of each such vessel shall file a statement of 
     citizenship setting forth all relevant facts regarding vessel 
     ownership and control with the Administrator on an annual 
     basis to demonstrate compliance with those provisions.
       ``(2) Regulations.--Regulations to implement this 
     subsection shall conform to the extent practicable with the 
     regulations establishing the form of citizenship affidavit 
     set forth in part 355 of title 46, Code of Federal 
     Regulations, as in effect on September 25, 1997, except that 
     the form of the statement shall be written in a manner to 
     allow the owner of the vessel to satisfy any annual renewal 
     requirements for a certificate of documentation for the 
     vessel and to comply with this subsection and subsections (c) 
     and (d), and shall not be required to be notarized.
       ``(3) Transfer of ownership.--Transfers of ownership and 
     control of vessels subject to subsection (c) or (d), which 
     are 100 feet or greater in registered length, shall be 
     rigorously scrutinized for violations of those provisions, 
     with particular attention given to--
       ``(A) leases, charters, mortgages, financing, and similar 
     arrangements;
       ``(B) the control of persons not eligible to own a vessel 
     with a fishery endorsement under subsection (c) or (d), over 
     the management, sales, financing, or other operations of an 
     entity; and
       ``(C) contracts involving the purchase over extended 
     periods of time of all, or substantially all, of the living 
     marine resources harvested by a fishing vessel.
       ``(f) Vessels Measuring Less Than 100 Feet.--The Secretary 
     shall establish reasonable and necessary requirements to 
     demonstrate compliance with subsections (c) and (d), with 
     respect to vessels measuring less than 100 feet in registered 
     length, and shall seek to minimize the administrative burden 
     on individuals who own and operate those vessels.
       ``(g) Vessels Purchased Through Fishing Capacity Reduction 
     Program.--A vessel purchased by the Secretary of Commerce 
     through a fishing capacity reduction program under the 
     Magnuson-Stevens Fishery Conservation Management Act (16 
     U.S.C. 1801 et seq.) or section 308 of the 
     Interjurisdictional Fisheries Act of 1986 (16 U.S.C. 4107) is 
     not eligible for a fishery endorsement, and any fishery 
     endorsement issued for that vessel is invalid.
       ``(h) Revocation of Endorsements.--The Secretary shall 
     revoke the fishery endorsement of any vessel subject to 
     subsection (c) or (d) whose owner does not comply with those 
     provisions.
       ``(i) Regulations.--Regulations to implement subsections 
     (c) and (d) and sections 12151(c) and 31322(b) of this title 
     shall prohibit impermissible transfers of ownership or 
     control, specify any transactions that require prior approval 
     of an implementing agency, identify transactions that do not 
     require prior agency approval, and to the extent practicable, 
     minimize disruptions to the commercial fishing industry, to 
     the traditional financing arrangements of that industry, and 
     to the opportunity to form fishery cooperatives.

     ``Sec. 12114. Recreational endorsement

       ``(a) Requirements.--A recreational endorsement may be 
     issued for a vessel that satisfies the requirements of 
     section 12103 of this title.
       ``(b) Authorized Activity.--A vessel operating under a 
     recreational endorsement may be operated only for pleasure.
       ``(c) Application of Customs Laws.--A vessel for which a 
     recreational endorsement is issued may proceed between a port 
     of the United States and a port of a foreign country without 
     entering or clearing with the Secretary of Homeland Security. 
     However, a recreational vessel is subject to the requirements 
     for reporting arrivals under section 433 of the Tariff Act of 
     1930 (19 U.S.C. 1433), and individuals on the vessel are 
     subject to applicable customs regulations.

     ``Sec. 12115. Temporary endorsement for vessels procured 
       outside the United States

       ``(a) General Authority.--The Secretary and the Secretary 
     of State, acting jointly, may provide for the issuance of a 
     certificate of documentation with an appropriate endorsement 
     for a vessel procured outside the United States and meeting 
     the ownership requirements of section 12103 of this title.
       ``(b) Authorized Activity.--Subject to limitations the 
     Secretary may prescribe, a vessel documented under this 
     section may proceed to the United States and engage en route 
     in foreign trade or trade with Guam, American Samoa, Wake, 
     Midway, or Kingman Reef.
       ``(c) Application of United States Jurisdiction and Laws.--
     A vessel documented under this section is subject to the 
     jurisdiction and laws of the United States. However, if the 
     Secretary considers it to be in the public interest, the 
     Secretary may suspend for a period of not more than 6 months 
     the application of a vessel inspection law carried out by the 
     Secretary or regulations prescribed under that law.
       ``(d) Surrender of Certificate.--On the vessel's arrival in 
     the United States, the certificate of documentation shall be 
     surrendered as provided by regulations prescribed by the 
     Secretary.

     ``Sec. 12116. Limited endorsements for Guam, American Samoa, 
       and Northern Mariana Islands

       ``(a) Endorsements.--A vessel satisfying the requirements 
     of subsection (b) may be issued--

[[Page H7594]]

       ``(1) a coastwise endorsement to engage in the coastwise 
     trade of fisheries products between places in Guam, American 
     Samoa, and the Northern Mariana Islands; or
       ``(2) a fishery endorsement to engage in fishing in the 
     territorial sea and fishery conservation zone adjacent to 
     Guam, American Samoa, and the Northern Mariana Islands.
       ``(b) Requirements.--An endorsement may be issued under 
     subsection (a) for a vessel that--
       ``(1) satisfies the requirements of section 12103 of this 
     title;
       ``(2) was not built in the United States, except that for 
     an endorsement under subsection (a)(2), the vessel must not 
     have been built or rebuilt in the United States;
       ``(3) is less than 200 gross tons as measured under section 
     14502 of this title, or an alternate tonnage as measured 
     under section 14302 of this title as prescribed by the 
     Secretary under section 14104 of this title; and
       ``(4) otherwise qualifies under the laws of the United 
     States to engage in the coastwise trade or the fisheries, as 
     the case may be.

     ``Sec. 12117. Oil spill response vessels

       ``(a) Requirements.--A coastwise endorsement may be issued 
     for a vessel that--
       ``(1) satisfies the requirements for a coastwise 
     endorsement, except for the ownership requirement otherwise 
     applicable without regard to this section;
       ``(2) is owned by a not-for-profit oil spill response 
     cooperative or by members of such a cooperative that dedicate 
     the vessel to use by the cooperative;
       ``(3) is at least 50 percent owned by individuals or 
     entities described in section 12103(b) of this title; and
       ``(4) is to be used only for--
       ``(i) deploying equipment, supplies, and personnel to 
     recover, contain, or transport oil discharged into the 
     navigable waters of the United States or the exclusive 
     economic zone; or
       ``(ii) training exercises to prepare to respond to such a 
     discharge.
       ``(b) Deemed Owned by Citizens.--A vessel satisfying 
     subsection (a) is deemed to be owned only by citizens of the 
     United States under sections 12103, 12132, and 50501 of this 
     title.

     ``Sec. 12118. Owners engaged primarily in manufacturing or 
       mineral industry

       ``(a) Definitions.--In this section:
       ``(1) Bowaters corporation.--The term `Bowaters 
     corporation' means a corporation that has filed a certificate 
     under oath with the Secretary, in the form and at the times 
     prescribed by the Secretary, establishing that--
       ``(A) the corporation is incorporated under the laws of the 
     United States or a State;
       ``(B) a majority of the officers and directors of the 
     corporation are individuals who are citizens of the United 
     States;
       ``(C) at least 90 percent of the employees of the 
     corporation are residents of the United States;
       ``(D) the corporation is engaged primarily in a 
     manufacturing or mineral industry in the United States;
       ``(E) the total book value of the vessels owned by the 
     corporation is not more than 10 percent of the total book 
     value of the assets of the corporation; and
       ``(F) the corporation buys or produces in the United States 
     at least 75 percent of the raw materials used or sold in its 
     operations.
       ``(2) Parent.--The term `parent' means a corporation that 
     has filed a certificate under oath with the Secretary, in the 
     form and at the times prescribed by the Secretary, 
     establishing that the corporation--
       ``(A) is incorporated under the laws of the United States 
     or a State; and
       ``(B) controls, directly or indirectly, at least 50 percent 
     of the voting stock of a Bowaters corporation.
       ``(3) Subsidiary.--The term `subsidiary' means a 
     corporation that has filed a certificate under oath with the 
     Secretary, in the form and at the times prescribed by the 
     Secretary, establishing that the corporation--
       ``(A) is incorporated under the laws of the United States 
     or a State; and
       ``(B) has at least 50 percent of its voting stock 
     controlled, directly or indirectly, by a Bowaters corporation 
     or its parent.
       ``(b) Deemed Citizen.--A Bowaters corporation is deemed to 
     be a citizen of the United States for purposes of chapters 
     121, 551, and 561 and section 80104 of this title.
       ``(c) Issuance of Documentation.--A certificate of 
     documentation and appropriate endorsement may be issued for a 
     vessel that--
       ``(1) is owned by a Bowaters corporation;
       ``(2) was built in the United States; and
       ``(3)(A) is self-propelled and less than 500 gross tons as 
     measured under section 14502 of this title, or an alternate 
     tonnage as measured under section 14302 of this title as 
     prescribed by the Secretary under section 14104 of this 
     title; or
       ``(B) is not self-propelled.
       ``(d) Effects of Documentation.--
       ``(1) In general.--Subject to paragraph (2)--
       ``(A) a vessel documented under this section may engage in 
     the coastwise trade; and
       ``(B) the vessel and its owner and master are entitled to 
     the same benefits and are subject to the same requirements 
     and penalties as if the vessel were otherwise documented or 
     exempt from documentation under this chapter.
       ``(2) Transportation of passengers or merchandise.--A 
     vessel documented under this section may transport passengers 
     or merchandise for hire in the coastwise trade only--
       ``(A) as a service for a parent or subsidiary of the 
     corporation owning the vessel; or
       ``(B) when under a demise or bareboat charter, at 
     prevailing rates for use not in the domestic noncontiguous 
     trades, from the corporation owning the vessel to a carrier 
     that--
       ``(i) is subject to jurisdiction under subchapter II of 
     chapter 135 of title 49;
       ``(ii) otherwise qualifies as a citizen of the United 
     States under section 50501 of this title; and
       ``(iii) is not owned or controlled, directly or indirectly, 
     by the corporation owning the vessel.
       ``(e) Validity of Corporate Certificate.--A certificate 
     filed by a corporation under this section remains valid only 
     as long as the corporation continues to satisfy the 
     conditions required of the corporation by this section. When 
     a corporation no longer satisfies those conditions, the 
     corporation loses its status under this section and 
     immediately shall surrender to the Secretary any documents 
     issued to it based on that status.
       ``(f) Penalties.--
       ``(1) Falsifying material fact.--If a corporation knowingly 
     falsifies a material fact in a certificate filed under 
     subsection (a), the vessel (or its value) documented or 
     operated under this section shall be forfeited.
       ``(2) Transporting merchandise.--If a vessel transports 
     merchandise for hire in violation of this section, the 
     merchandise shall be forfeited to the United States 
     Government.
       ``(3) Transporting passengers.--If a vessel transports 
     passengers for hire in violation of this section, the vessel 
     is liable for a penalty of $200 for each passenger so 
     transported.
       ``(4) Remission or mitigation.--A penalty or forfeiture 
     incurred under this subsection may be remitted or mitigated 
     under section 2107(b) of this title.

     ``Sec. 12119. Owners engaged primarily in leasing or 
       financing transactions

       ``(a) Definitions.--In this section:
       ``(1) Affiliate.--The term `affiliate' means, with respect 
     to any person, any other person that is--
       ``(i) directly or indirectly controlled by, under common 
     control with, or controlling that person; or
       ``(ii) named as being part of the same consolidated group 
     in any report or other document submitted to the United 
     States Securities and Exchange Commission or the Internal 
     Revenue Service.
       ``(2) Cargo.--The term `cargo' does not include cargo to 
     which title is held for non-commercial reasons and primarily 
     for the purpose of evading the requirements of subsection 
     (c)(3).
       ``(3) Oil.--The term `oil' has the meaning given that term 
     in section 2101(20) of this title.
       ``(4) Passive investment.--The term `passive investment' 
     means an investment in which neither the investor nor any 
     affiliate of the investor is involved in, or has the power to 
     be involved in, the formulation, determination, or direction 
     of any activity or function concerning the management, use, 
     or operation of the asset that is the subject of the 
     investment.
       ``(5) Qualified proprietary cargo.--The term `qualified 
     proprietary cargo' means--
       ``(A) oil, petroleum products, petrochemicals, or liquefied 
     natural gas cargo that is beneficially owned by the person 
     that submits to the Secretary an application or annual 
     certification under subsection (c)(3), or by an affiliate of 
     that person, immediately before, during, or immediately after 
     the cargo is carried in coastwise trade on a vessel owned by 
     that person;
       ``(B) oil, petroleum products, petrochemicals, or liquefied 
     natural gas cargo not beneficially owned by the person that 
     submits to the Secretary an application or an annual 
     certification under subsection (c)(3), or by an affiliate of 
     that person, but which is carried in coastwise trade by a 
     vessel owned by that person and which is part of an 
     arrangement in which vessels owned by that person and at 
     least one other person are operated collectively as one 
     fleet, to the extent that an equal amount of oil, petroleum 
     products, petrochemicals, or liquefied natural gas cargo 
     beneficially owned by that person, or by an affiliate of that 
     person, is carried in coastwise trade on one or more other 
     vessels, not owned by that person, or by an affiliate of that 
     person, if the other vessel or vessels are also part of the 
     same arrangement;
       ``(C) in the case of a towing vessel associated with a non-
     self-propelled tank vessel where both vessels function as a 
     single self-propelled vessel, oil, petroleum products, 
     petrochemicals, or liquefied natural gas cargo that is 
     beneficially owned by the person that owns both the towing 
     vessel and the non-self-propelled tank vessel, or any United 
     States affiliate of that person, immediately before, during, 
     or immediately after the cargo is carried in coastwise trade 
     on either of those vessels; or
       ``(D) any oil, petroleum products, petrochemicals, or 
     liquefied natural gas cargo carried on any vessel that is 
     either a self-propelled tank vessel having a length of at 
     least 210 meters or a tank vessel that is a liquefied natural 
     gas carrier that--
       ``(i) was delivered by the builder of the vessel to the 
     owner of the vessel after December 31, 1999; and
       ``(ii) was purchased by a person for the purpose, and with 
     the reasonable expectation, of transporting on the vessel 
     liquefied natural gas or unrefined petroleum beneficially 
     owned by the owner of the vessel, or an affiliate of the 
     owner, from Alaska to the continental United States.
       ``(6) United states affiliate.--The term `United States 
     affiliate' means, with respect to any person, an affiliate 
     the principal place of business of which is located in the 
     United States.
       ``(b) Requirements.--A coastwise endorsement may be issued 
     for a vessel if--
       ``(1) the vessel satisfies the requirements for a coastwise 
     endorsement, except for the ownership requirement otherwise 
     applicable without regard to this section;
       ``(2) the person that owns the vessel (or, if the vessel is 
     owned by a trust or similar arrangement, the beneficiary of 
     the trust or similar arrangement) meets the requirements of 
     subsection (c);

[[Page H7595]]

       ``(3) the vessel is under a demise charter to a person that 
     certifies to the Secretary that the person is a citizen of 
     the United States under section 50501 of this title for 
     engaging in the coastwise trade; and
       ``(4) the demise charter is for a period of at least 3 
     years or a shorter period as may be prescribed by the 
     Secretary.
       ``(c) Ownership Certification.--
       ``(1) In general.--A person meets the requirements of this 
     subsection if the person transmits to the Secretary each year 
     the certification required by paragraph (2) or (3) with 
     respect to a vessel.
       ``(2) Investment certification.--To meet the certification 
     requirement of this paragraph, a person shall certify that 
     it--
       ``(A) is a leasing company, bank, or financial institution;
       ``(B) owns, or holds the beneficial interest in, the vessel 
     solely as a passive investment;
       ``(C) does not operate any vessel for hire and is not an 
     affiliate of any person that operates any vessel for hire; 
     and
       ``(D) is independent from, and not an affiliate of, any 
     charterer of the vessel or any other person that has the 
     right, directly or indirectly, to control or direct the 
     movement or use of the vessel.
       ``(3) Certain tank vessels.--
       ``(A) In general.--To meet the certification requirement of 
     this paragraph, a person shall certify that--
       ``(i) the aggregate book value of the vessels owned by the 
     person and United States affiliates of the person does not 
     exceed 10 percent of the aggregate book value of all assets 
     owned by the person and its United States affiliates;
       ``(ii) not more than 10 percent of the aggregate revenues 
     of the person and its United States affiliates is derived 
     from the ownership, operation, or management of vessels;
       ``(iii) at least 70 percent of the aggregate tonnage of all 
     cargo carried by all vessels owned by the person and its 
     United States affiliates and documented with a coastwise 
     endorsement is qualified proprietary cargo;
       ``(iv) any cargo other than qualified proprietary cargo 
     carried by all vessels owned by the person and its United 
     States affiliates and documented with a coastwise endorsement 
     consists of oil, petroleum products, petrochemicals, or 
     liquified natural gas;
       ``(v) no vessel owned by the person or any of its United 
     States affiliates and documented with a coastwise endorsement 
     carries molten sulphur; and
       ``(vi) the person owned one or more vessels documented 
     under this section as of August 9, 2004.
       ``(B) Application only to certain vessels.--A person may 
     make a certification under this paragraph only with respect 
     to--
       ``(i) a tank vessel having a tonnage of at least 6,000 
     gross tons, as measured under section 14502 of this title (or 
     an alternative tonnage measured under section 14302 of this 
     title as prescribed by the Secretary under section 14104 of 
     this title); or
       ``(ii) a towing vessel associated with a non-self-propelled 
     tank vessel that meets the requirements of clause (i), where 
     both vessels function as a single self-propelled vessel.
       ``(d) Filing of Demise Charter.--The demise charter and any 
     amendments to the charter shall be filed with the 
     certification required by subsection (b)(3) or within 10 days 
     after filing an amendment to the charter. The charter and 
     amendments shall be made available to the public.
       ``(e) Continuation of Endorsement After Termination of 
     Charter.--When a charter required by subsection (b)(3) is 
     terminated for default by the charterer, the Secretary may 
     continue the coastwise endorsement for not more than 6 months 
     on terms and conditions the Secretary may prescribe.
       ``(f) Deemed Owned by Citizens.--A vessel satisfying the 
     requirements of this section is deemed to be owned only by 
     citizens of the United States under sections 12103 and 50501 
     of this title.

     ``Sec. 12120. Liquified gas tankers

       ``Notwithstanding any agreement with the United States 
     Government, the Secretary may issue a certificate of 
     documentation with a coastwise endorsement for a vessel to 
     transport liquified natural gas or liquified petroleum gas to 
     Puerto Rico from other ports in the United States, if the 
     vessel--
       ``(1) is a foreign built vessel that was built before 
     October 19, 1996; or
       ``(2) was documented under this chapter before that date, 
     even if the vessel is placed under a foreign registry and 
     subsequently redocumented under this chapter for operation 
     under this section.

     ``Sec. 12121. Small passenger vessels and uninspected 
       passenger vessels

       ``(a) Definitions.--In this section:
       ``(1) Eligible vessel.--The term `eligible vessel' means a 
     vessel that--
       ``(A) was not built in the United States and is at least 3 
     years old; or
       ``(B) if rebuilt, was rebuilt outside the United States at 
     least 3 years before the certificate requested under 
     subsection (b) would take effect.
       ``(2) Small passenger vessel; uninspected passenger vessel; 
     passenger for hire.--The terms `small passenger vessel', 
     `uninspected passenger vessel', and `passenger for hire' have 
     the meaning given those terms in section 2101 of this title.
       ``(b) Issuance of Certificate and Endorsement.--
     Notwithstanding sections 12112, 12113, 55102, and 55103 of 
     this title, the Secretary may issue a certificate of 
     documentation with an appropriate endorsement for employment 
     in the coastwise trade as a small passenger vessel or an 
     uninspected passenger vessel in the case of an eligible 
     vessel authorized to carry no more than 12 passengers for 
     hire if the Secretary of Transportation, after notice and an 
     opportunity for public comment, determines that the 
     employment of the vessel in the coastwise trade will not 
     adversely affect--
       ``(1) United States vessel builders; or
       ``(2) the coastwise trade business of any person that 
     employs vessels built in the United States in that business.
       ``(c) Revocation.--
       ``(1) For fraud.--The Secretary shall revoke a certificate 
     or endorsement issued under subsection (b) if the Secretary 
     of Transportation, after notice and an opportunity for a 
     hearing, determines that the certificate or endorsement was 
     obtained by fraud.
       ``(2) Other provisions not affected.--Paragraph (1) does 
     not affect--
       ``(A) the criminal prohibition on fraud and false 
     statements in section 1001 of title 18; or
       ``(B) any other authority of the Secretary to revoke a 
     certificate or endorsement issued under subsection (b).

                    ``SUBCHAPTER III--MISCELLANEOUS

     ``Sec. 12131. Command of documented vessels

       ``(a) In General.--Except as provided in subsection (b), a 
     documented vessel may be placed under the commmand only of a 
     citizen of the United States.
       ``(b) Exceptions.--Subsection (a) does not apply to--
       ``(1) a vessel with only a recreational endorsement; or
       ``(2) an unmanned barge operating outside of the 
     territorial waters of the United States.

     ``Sec. 12132. Loss of coastwise trade privileges

       ``A vessel having a lawful right to engage in the coastwise 
     trade is permanently prohibited from engaging in the 
     coastwise trade if the vessel is--
       ``(1)(A) more than 200 gross tons as measured under chapter 
     143 of this title; and
       ``(B) sold foreign or placed under foreign registry; or
       ``(2) rebuilt outside the United States.

     ``Sec. 12133. Duty to carry certificate on vessel and allow 
       examination

       ``(a) Duty To Carry.--The certificate of documentation of a 
     vessel shall be carried on the vessel unless the vessel is 
     exempt by regulation from carrying the certificate.
       ``(b) Availability.--The owner or individual in charge of a 
     vessel required to carry its certificate of documentation 
     shall make the certificate available for examination at the 
     request of an officer enforcing the revenue laws or as 
     otherwise required by law or regulation.
       ``(c) Criminal Penalty.--A person willfully violating 
     subsection (b) shall be fined under title 18, imprisoned for 
     not more than one year, or both.

     ``Sec. 12134. Evidentiary uses of documentation

       ``A certificate of documentation is--
       ``(1) conclusive evidence of nationality for international 
     purposes, but not in a proceeding conducted under the laws of 
     the United States;
       ``(2) conclusive evidence of qualification to engage in a 
     specified trade; and
       ``(3) not conclusive evidence of ownership in a proceeding 
     in which ownership is in issue.

     ``Sec. 12135. Invalidation of certificates of documentation

       ``A certificate of documentation or an endorsement on the 
     certificate is invalid if the vessel for which it is issued--
       ``(1) no longer meets the requirements of this chapter and 
     regulations prescribed under this chapter applicable to the 
     certificate or endorsement; or
       ``(2) is placed under the command of an individual not a 
     citizen of the United States in violation of section 12131 of 
     this title.

     ``Sec. 12136. Surrender of certificates of documentation

       ``(a) Surrender.--An invalid certificate of documentation, 
     or a certificate with an invalid endorsement, shall be 
     surrendered as provided by regulations prescribed by the 
     Secretary.
       ``(b) Conditions for Surrender.--
       ``(1) Vessels over 1,000 tons.--The Secretary may condition 
     approval of the surrender of the certificate of documentation 
     for a vessel over 1,000 gross tons.
       ``(2) Vessels covered by mortgage.--The Secretary may 
     approve the surrender of the certificate of documentation of 
     a vessel covered by a mortgage filed or recorded under 
     section 31321 of this title only if the mortgagee consents.
       ``(3) Notice of lien.--The Secretary may not refuse to 
     approve the surrender of the certificate of documentation for 
     a vessel solely on the basis that a notice of a claim of a 
     lien on the vessel has been recorded under section 31343(a) 
     of this title.
       ``(c) Continued Application of Certain Laws.--
       ``(1) In general.--Notwithstanding subsection (a), until 
     the certificate of documentation is surrendered with the 
     approval of the Secretary, a documented vessel is deemed to 
     continue to be documented under this chapter for purposes 
     of--
       ``(A) chapter 313 of this title for an instrument filed or 
     recorded before the date of invalidation and an assignment 
     after that date;
       ``(B) sections 56101 and 56102(a)(2) and chapter 563 of 
     this title; and
       ``(C) any other law of the United States identified by the 
     Secretary by regulation as a law to which the Secretary 
     applies this subsection.
       ``(2) Exception.--This subsection does not apply when a 
     vessel is forfeited or sold by order of a district court of 
     the United States.

     ``Sec. 12137. Recording of vessels built in the United States

       ``The Secretary may provide for recording and certifying 
     information about vessels built in the United States that the 
     Secretary considers to be in the public interest.

     ``Sec. 12138. List of documented vessels

       ``(a) In General.--The Secretary shall publish periodically 
     a list of all documented vessels

[[Page H7596]]

     and information about those vessels that the Secretary 
     considers pertinent or useful. The list shall contain a 
     notation clearly indicating all vessels classed by the 
     American Bureau of Shipping.
       ``(b) Vessels for Cable Laying, Maintenance, and Repair.--
       ``(1) In general.--The Secretary of Transportation shall 
     develop, maintain, and periodically update an inventory of 
     vessels that are documented under this chapter, are at least 
     200 feet in length, and have the capability to lay, maintain, 
     or repair a submarine cable, without regard to whether a 
     particular vessel is classed as a cable ship or cable vessel.
       ``(2) Information to be included.--For each vessel listed 
     in the inventory, the Secretary of Transportation shall 
     include in the inventory--
       ``(A) the name, length, beam, depth, and other 
     distinguishing characteristics of the vessel;
       ``(B) the abilities and limitations of the vessel with 
     respect to laying, maintaining, and repairing a submarine 
     cable; and
       ``(C) the name and address of the person to whom inquiries 
     regarding the vessel may be made.
       ``(3) Publication.--The Secretary of Transportation shall 
     publish in the Federal Register an updated inventory every 6 
     months.

     ``Sec. 12139. Reports

       ``(a) In General.--To ensure compliance with this chapter 
     and laws governing the qualifications of vessels to engage in 
     the coastwise trade and the fisheries, the Secretary may 
     require owners, masters, and charterers of documented vessels 
     to submit reports in any reasonable form and manner the 
     Secretary may prescribe.
       ``(b) Vessels Rebuilt Outside United States.--
       ``(1) In general.--Under regulations prescribed by the 
     Secretary, if a vessel exceeding the tonnage specified in 
     paragraph (2) and documented or last documented under the 
     laws of the United States is rebuilt outside the United 
     States, the owner or master shall submit a report of the 
     rebuilding to the Secretary.
       ``(2) Tonnage.--The tonnage referred to in paragraph (1) 
     is--
       ``(A) 500 gross tons as measured under section 14502 of 
     this title; or
       ``(B) an alternate tonnage as measured under section 14302 
     of this title as prescribed by the Secretary under section 
     14104 of this title.
       ``(3) Timing of submission.--If the rebuilding is completed 
     in the United States, the report shall be submitted when the 
     rebuilding is completed. If the rebuilding is completed 
     outside the United States, the report shall be submitted when 
     the vessel first arrives at a port in the customs territory 
     of the United States.

                       ``SUBCHAPTER IV--PENALTIES

     ``Sec. 12151. Penalties

       ``(a) In General.--A person that violates this chapter or a 
     regulation prescribed under this chapter is liable to the 
     United States Government for a civil penalty of not more than 
     $10,000. Each day of a continuing violation is a separate 
     violation.
       ``(b) Seizure and Forfeiture of Vessels.--A vessel and its 
     equipment are liable to seizure by and forfeiture to the 
     Government if--
       ``(1) the owner of the vessel or the representative or 
     agent of the owner knowingly falsifies or conceals a material 
     fact, or knowingly makes a false statement or representation, 
     about the documentation of the vessel or in applying for 
     documentation of the vessel;
       ``(2) a certificate of documentation is knowingly and 
     fraudulently used for the vessel;
       ``(3) the vessel is operated after its endorsement has been 
     denied or revoked under section 12152 of this title;
       ``(4) the vessel is employed in a trade without an 
     appropriate endorsement;
       ``(5) the vessel has only a recreational endorsement and is 
     operated other than for pleasure;
       ``(6) the vessel is a documented vessel and is placed under 
     the command of a person not a citizen of the United States, 
     except as authorized by section 12131(b) of this title; or
       ``(7) the vessel is rebuilt outside the United States and a 
     report of the rebuilding is not submitted as required by 
     section 12139(b) of this title.
       ``(c) Engaging in Fishing After Falsifying Eligibility.--In 
     addition to other penalties under this section, the owner of 
     a documented vessel for which a fishery endorsement has been 
     issued is liable to the Government for a civil penalty of not 
     more than $100,000 for each day the vessel engages in fishing 
     (as defined in section 3 of the Magnuson-Stevens Fishery 
     Conservation and Management Act (16 U.S.C. 1802)) within the 
     exclusive economic zone, if the owner or the representative 
     or agent of the owner knowingly falsified or concealed a 
     material fact, or knowingly made a false statement or 
     representation, about the eligibility of the vessel under 
     section 12113(c) or (d) of this title in applying for or 
     applying to renew the fishery endorsement.

     ``Sec. 12152. Denial or revocation of endorsement for non-
       payment of civil penalty

       ``If the owner of a vessel fails to pay a civil penalty 
     imposed by the Secretary, the Secretary may deny the issuance 
     or renewal of an endorsement, or revoke the endorsement, on a 
     certificate of documentation issued for the vessel under this 
     chapter.''.

     SEC. 5. SUBTITLE III OF TITLE 46.

       (a) Subtitle Analysis.--The analysis of subtitle III of 
     title 46, United States Code, is amended to read as follows:

``Chapter                                                      Sec.

``301.  General Liability Provisions..............................30101
``303.  Death on the High Seas....................................30301
``305.  Exoneration and Limitation of Liability...................30501
``307.  Liability of Water Carriers...............................30701
``309.  Suits in Admiralty Against United States Government.......30901
``311.  Suits Involving Public Vessels............................31101
``313.  Commercial Instruments and Maritime Liens..............31301''.
       (b) Repeals.--Title 46, United States Code, is amended by 
     striking chapter 301 and the lines appearing immediately 
     before and immediately after chapter 313 indicating that 
     certain chapters are reserved.
       (c) Chapters 301-311.--Title 46, United States Code, is 
     amended by inserting after the analysis of subtitle III the 
     following:

              ``CHAPTER 301--GENERAL LIABILITY PROVISIONS

``Sec.
``30101.  Extension of jurisdiction to cases of damage or injury on 
              land.
``30102.  Liability to passengers.
``30103.  Liability of master, mate, engineer, and pilot.
``30104.  Personal injury to or death of seamen.
``30105.  Restriction on recovery by non-citizens and non-resident 
              aliens for incidents in waters of other countries.
``30106.  Time limit on bringing action.

     ``Sec. 30101. Extension of jurisdiction to cases of damage or 
       injury on land

       ``(a) In General.--The admiralty and maritime jurisdiction 
     of the United States extends to and includes cases of injury 
     or damage, to person or property, caused by a vessel on 
     navigable waters, even though the injury or damage is done or 
     consummated on land.
       ``(b) Procedure.--A civil action in a case under subsection 
     (a) may be brought in rem or in personam according to the 
     principles of law and the rules of practice applicable in 
     cases where the injury or damage has been done and 
     consummated on navigable waters.
       ``(c) Actions Against United States.--
       ``(1) Exclusive remedy.--In a civil action against the 
     United States Government for injury or damage done or 
     consummated on land by a vessel on navigable waters, chapter 
     309 or 311 of this title, as appropriate, provides the 
     exclusive remedy.
       ``(2) Administrative claim.--A civil action described in 
     paragraph (1) may not be brought until the expiration of the 
     6 month period after the claim has been presented in writing 
     to the agency owning or operating the vessel causing the 
     injury or damage.

     ``Sec. 30102. Liability to passengers

       ``(a) Liability.--The owner and master of a vessel, and the 
     vessel, are liable for personal injury to a passenger or 
     damage to a passenger's baggage caused by--
       ``(1) a neglect or failure to comply with part B or F of 
     subtitle II of this title; or
       ``(2) a known defect in the steaming apparatus or hull of 
     the vessel.
       ``(b) Not Subject to Limitation.--A liability imposed under 
     this section is not subject to limitation under chapter 305 
     of this title.

     ``Sec. 30103. Liability of master, mate, engineer, and pilot

       ``A person may bring a civil action against a master, mate, 
     engineer, or pilot of a vessel, and recover damages, for 
     personal injury or loss caused by the master's, mate's, 
     engineer's, or pilot's--
       ``(1) negligence or willful misconduct; or
       ``(2) neglect or refusal to obey the laws governing the 
     navigation of vessels.

     ``Sec. 30104. Personal injury to or death of seamen

       ``(a) Cause of Action.--A seaman injured in the course of 
     employment or, if the seaman dies from the injury, the 
     personal representative of the seaman may elect to bring a 
     civil action at law, with the right of trial by jury, against 
     the employer. Laws of the United States regulating recovery 
     for personal injury to, or death of, a railway employee apply 
     to an action under this section.
       ``(b) Venue.--An action under this section shall be brought 
     in the judicial district in which the employer resides or the 
     employer's principal office is located.

     ``Sec. 30105. Restriction on recovery by non-citizens and 
       non-resident aliens for incidents in waters of other 
       countries

       ``(a) Definition.--In this section, the term `continental 
     shelf ' has the meaning given that term in article I of the 
     1958 Convention on the Continental Shelf.
       ``(b) Restriction.--Except as provided in subsection (c), a 
     civil action for maintenance and cure or for damages for 
     personal injury or death may not be brought under a maritime 
     law of the United States if--
       ``(1) the individual suffering the injury or death was not 
     a citizen or permanent resident alien of the United States at 
     the time of the incident giving rise to the action;
       ``(2) the incident occurred in the territorial waters or 
     waters overlaying the continental shelf of a country other 
     than the United States; and
       ``(3) the individual suffering the injury or death was 
     employed at the time of the incident by a person engaged in 
     the exploration, development, or production of offshore 
     mineral or energy resources, including drilling, mapping, 
     surveying, diving, pipelaying, maintaining, repairing, 
     constructing, or transporting supplies, equipment, or 
     personnel, but not including transporting those resources by 
     a vessel constructed or adapted primarily to carry oil in 
     bulk in the cargo spaces.
       ``(c) Nonapplication.--Subsection (b) does not apply if the 
     individual bringing the action establishes that a remedy is 
     not available under the laws of--
       ``(1) the country asserting jurisdiction over the area in 
     which the incident occurred; or

[[Page H7597]]

       ``(2) the country in which the individual suffering the 
     injury or death maintained citizenship or residency at the 
     time of the incident.

     ``Sec. 30106. Time limit on bringing action

       ``Except as otherwise provided by law, a civil action for 
     damages for personal injury or death arising out of a 
     maritime tort must be brought within 3 years after the cause 
     of action arose.

                 ``CHAPTER 303--DEATH ON THE HIGH SEAS

``Sec.
``30301.  Short title.
``30302.  Cause of action.
``30303.  Amount and apportionment of recovery.
``30304.  Contributory negligence.
``30305.  Death of plaintiff in pending action.
``30306.  Foreign cause of action.
``30307.  Commercial aviation accidents.
``30308.  Nonapplication.

     ``Sec. 30301. Short title

       ``This chapter may be cited as the `Death on the High Seas 
     Act'.

     ``Sec. 30302. Cause of action

       ``When the death of an individual is caused by wrongful 
     act, neglect, or default occurring on the high seas beyond a 
     marine league from the shore of the United States, the 
     personal representative of the decedent may bring a civil 
     action in admiralty against the person or vessel responsible. 
     The action shall be for the exclusive benefit of the 
     decedent's spouse, parent, child, or dependent relative.

     ``Sec. 30303. Amount and apportionment of recovery

       ``The recovery in an action under this chapter shall be a 
     fair compensation for the pecuniary loss sustained by the 
     individuals for whose benefit the action is brought. The 
     court shall apportion the recovery among those individuals in 
     proportion to the loss each has sustained.

     ``Sec. 30304. Contributory negligence

       ``In an action under this chapter, contributory negligence 
     of the decedent is not a bar to recovery. The court shall 
     consider the degree of negligence of the decedent and reduce 
     the recovery accordingly.

     ``Sec. 30305. Death of plaintiff in pending action

       ``If a civil action in admiralty is pending in a court of 
     the United States to recover for personal injury caused by 
     wrongful act, neglect, or default described in section 30302 
     of this title, and the individual dies during the action as a 
     result of the wrongful act, neglect, or default, the personal 
     representative of the decedent may be substituted as the 
     plaintiff and the action may proceed under this chapter for 
     the recovery authorized by this chapter.

     ``Sec. 30306. Foreign cause of action

       ``When a cause of action exists under the law of a foreign 
     country for death by wrongful act, neglect, or default on the 
     high seas, a civil action in admiralty may be brought in a 
     court of the United States based on the foreign cause of 
     action, without abatement for the amount for which recovery 
     is authorized.

     ``Sec. 30307. Commercial aviation accidents

       ``(a) Definition.--In this section, the term `nonpecuniary 
     damages' means damages for loss of care, comfort, and 
     companionship.
       ``(b) Beyond 12 Nautical Miles.--In an action under this 
     chapter, if the death resulted from a commercial aviation 
     accident occurring on the high seas beyond 12 nautical miles 
     from the shore of the United States, additional compensation 
     is recoverable for nonpecuniary damages for wrongful death, 
     but punitive damages are not recoverable.
       ``(c) Within 12 Nautical Miles.--This chapter does not 
     apply if the death resulted from a commercial aviation 
     accident occurring on the high seas 12 nautical miles or less 
     from the shore of the United States.

     ``Sec. 30308. Nonapplication

       ``(a) State Law.--This chapter does not affect the law of a 
     State regulating the right to recover for death.
       ``(b) Internal Waters.--This chapter does not apply to the 
     Great Lakes, waters within the territorial limits of a State, 
     or navigable waters in the Panama Canal.

         ``CHAPTER 305--EXONERATION AND LIMITATION OF LIABILITY

``Sec.
``30501.  Definition.
``30502.  Application.
``30503.  Declaration of nature and value of goods.
``30504.  Loss by fire.
``30505.  General limit of liability.
``30506.  Limit of liability for personal injury or death.
``30507.  Apportionment of losses.
``30508.  Provisions requiring notice of claim or limiting time for 
              bringing action.
``30509.  Provisions limiting liability for personal injury or death.
``30510.  Vicarious liability for medical malpractice.
``30511.  Action by owner for limitation.
``30512.  Liability as master, officer, or seaman not affected.

     ``Sec. 30501. Definition

       ``In this chapter, the term `owner' includes a charterer 
     that mans, supplies, and navigates a vessel at the 
     charterer's own expense or by the charterer's own 
     procurement.

     ``Sec. 30502. Application

       ``Except as otherwise provided, this chapter (except 
     section 30503) applies to seagoing vessels and vessels used 
     on lakes or rivers or in inland navigation, including canal 
     boats, barges, and lighters.

     ``Sec. 30503. Declaration of nature and value of goods

       ``(a) In General.--If a shipper of an item named in 
     subsection (b), contained in a parcel, package, or trunk, 
     loads the item as freight or baggage on a vessel, without at 
     the time of loading giving to the person receiving the item a 
     written notice of the true character and value of the item 
     and having that information entered on the bill of lading, 
     the owner and master of the vessel are not liable as 
     carriers. The owner and master are not liable beyond the 
     value entered on the bill of lading.
       ``(b) Items.--The items referred to in subsection (a) are 
     precious metals, gold or silver plated articles, precious 
     stones, jewelry, trinkets, watches, clocks, glass, china, 
     coins, bills, securities, printings, engravings, pictures, 
     stamps, maps, papers, silks, furs, lace, and similar items of 
     high value and small size.

     ``Sec. 30504. Loss by fire

       ``The owner of a vessel is not liable for loss or damage to 
     merchandise on the vessel caused by a fire on the vessel 
     unless the fire resulted from the design or neglect of the 
     owner.

     ``Sec. 30505. General limit of liability

       ``(a) In General.--Except as provided in section 30506 of 
     this title, the liability of the owner of a vessel for any 
     claim arising from any cause, on account of that ownership, 
     without the privity or knowledge of the owner shall not 
     exceed the value of the vessel and pending freight. If the 
     vessel has more than one owner, the proportionate share of 
     the liability of any one owner shall not exceed that owner's 
     proportionate interest in the vessel and pending freight.
       ``(b) Nonapplication.--This section does not apply to a 
     claim for wages.

     ``Sec. 30506. Limit of liability for personal injury or death

       ``(a) Application.--This section applies only to seagoing 
     vessels, but does not apply to pleasure yachts, tugs, 
     towboats, towing vessels, tank vessels, fishing vessels, fish 
     tender vessels, canal boats, scows, car floats, barges, 
     lighters, or nondescript vessels.
       ``(b) Minimum Liability.--If the amount of the vessel 
     owner's liability determined under section 30505 of this 
     title is such that the portion available to pay claims for 
     personal injury or death is less than $420 times the tonnage 
     of the vessel, that portion shall be increased to $420 times 
     the tonnage of the vessel. That portion may be used only to 
     pay claims for personal injury or death.
       ``(c) Calculation of Tonnage.--Under subsection (b), the 
     tonnage of a self-propelled vessel is the gross tonnage 
     without deduction for engine room, and the tonnage of a 
     sailing vessel is the tonnage for documentation. However, 
     space for the use of seamen is excluded.
       ``(d) Claims Arising on Distinct Occasions.--Separate 
     limits of liability apply to claims for personal injury or 
     death arising on distinct occasions.
       ``(e) Privity or Knowledge.--In a claim for personal injury 
     or death, the privity or knowledge of the master or managing 
     agent, at or before the beginning of each voyage, is imputed 
     to the owner.

     ``Sec. 30507. Apportionment of losses

       ``If the amount determined under sections 30505 and 30506 
     of this title is insufficient to pay all claimants, the 
     claimants shall be paid in proportion to their respective 
     losses.

     ``Sec. 30508. Provisions requiring notice of claim or 
       limiting time for bringing action

       ``(a) Application.--This section applies only to seagoing 
     vessels, but does not apply to pleasure yachts, tugs, 
     towboats, towing vessels, tank vessels, fishing vessels, fish 
     tender vessels, canal boats, scows, car floats, barges, 
     lighters, or nondescript vessels.
       ``(b) Minimum Time Limits.--The owner, master, manager, or 
     agent of a vessel transporting passengers or property between 
     ports in the United States, or between a port in the United 
     States and a port in a foreign country, may not limit by 
     regulation, contract, or otherwise the period for--
       ``(1) giving notice of, or filing a claim for, personal 
     injury or death to less than 6 months after the date of the 
     injury or death; or
       ``(2) bringing a civil action for personal injury or death 
     to less than one year after the date of the injury or death.
       ``(c) Effect of Failure To Give Notice.--When notice of a 
     claim for personal injury or death is required by a contract, 
     the failure to give the notice is not a bar to recovery if--
       ``(1) the court finds that the owner, master, or agent of 
     the vessel had knowledge of the injury or death and the owner 
     has not been prejudiced by the failure;
       ``(2) the court finds there was a satisfactory reason why 
     the notice could not have been given; or
       ``(3) the owner of the vessel fails to object to the 
     failure to give the notice.
       ``(d) Tolling of Period To Give Notice.--If a claimant is a 
     minor or mental incompetent, or if a claim is for wrongful 
     death, any period provided by a contract for giving notice of 
     the claim is tolled until the earlier of--
       ``(1) the date a legal representative is appointed for the 
     minor, incompetent, or decedent's estate; or
       ``(2) 3 years after the injury or death.

     ``Sec. 30509. Provisions limiting liability for personal 
       injury or death

       ``(a) Prohibition.--
       ``(1) In general.--The owner, master, manager, or agent of 
     a vessel transporting passengers between ports in the United 
     States, or between a port in the United States and a port in 
     a foreign country, may not include in a regulation or 
     contract a provision limiting--
       ``(A) the liability of the owner, master, or agent for 
     personal injury or death caused by the negligence or fault of 
     the owner or the owner's employees or agents; or

[[Page H7598]]

       ``(B) the right of a claimant for personal injury or death 
     to a trial.
       ``(2) Voidness.--A provision described in paragraph (1) is 
     void.
       ``(b) Emotional Distress, Mental Suffering, and 
     Psychological Injury.--
       ``(1) In general.--Subsection (a) does not prohibit a 
     provision in a contract or in ticket conditions of carriage 
     with a passenger that relieves an owner, master, manager, 
     agent, operator, or crewmember of a vessel from liability for 
     infliction of emotional distress, mental suffering, or 
     psychological injury so long as the provision does not limit 
     such liability when the emotional distress, mental suffering, 
     or psychological injury is--
       ``(A) the result of physical injury to the claimant caused 
     by the negligence or fault of a crewmember or the owner, 
     master, manager, agent, or operator;
       ``(B) the result of the claimant having been at actual risk 
     of physical injury, and the risk was caused by the negligence 
     or fault of a crewmember or the owner, master, manager, 
     agent, or operator; or
       ``(C) intentionally inflicted by a crewmember or the owner, 
     master, manager, agent, or operator.
       ``(2) Sexual offenses.--This subsection does not limit the 
     liability of a crewmember or the owner, master, manager, 
     agent, or operator of a vessel in a case involving sexual 
     harassment, sexual assault, or rape.

     ``Sec. 30510. Vicarious liability for medical malpractice

       ``In a civil action by any person in which the owner or 
     operator of a vessel or employer of a crewmember is claimed 
     to have vicarious liability for medical malpractice with 
     regard to a crewmember occurring at a shoreside facility, and 
     to the extent the damages resulted from the conduct of any 
     shoreside doctor, hospital, medical facility, or other health 
     care provider, the owner, operator, or employer is entitled 
     to rely on any statutory limitations of liability applicable 
     to the doctor, hospital, medical facility, or other health 
     care provider in the State of the United States in which the 
     shoreside medical care was provided.

     ``Sec. 30511. Action by owner for limitation

       ``(a) In General.--The owner of a vessel may bring a civil 
     action in a district court of the United States for 
     limitation of liability under this chapter. The action must 
     be brought within 6 months after a claimant gives the owner 
     written notice of a claim.
       ``(b) Creation of Fund.--When the action is brought, the 
     owner shall--
       ``(1) deposit with the court, for the benefit of 
     claimants--
       ``(A) an amount equal to the value of the owner's interest 
     in the vessel and pending freight, or approved security; and
       ``(B) an amount, or approved security, that the court may 
     fix from time to time as necessary to carry out this chapter; 
     or
       ``(2) transfer to a trustee appointed by the court, for the 
     benefit of claimants--
       ``(A) the owner's interest in the vessel and pending 
     freight; and
       ``(B) an amount, or approved security, that the court may 
     fix from time to time as necessary to carry out this chapter.
       ``(c) Cessation of Other Actions.--When an action has been 
     brought under this section and the owner has complied with 
     subsection (b), all claims and proceedings against the owner 
     related to the matter in question shall cease.

     ``Sec. 30512. Liability as master, officer, or seaman not 
       affected

       ``This chapter does not affect the liability of an 
     individual as a master, officer, or seaman, even though the 
     individual is also an owner of the vessel.

               ``CHAPTER 307--LIABILITY OF WATER CARRIERS

``Sec.
``30701.  Definition.
``30702.  Application.
``30703.  Bills of lading.
``30704.  Loading, stowage, custody, care, and delivery.
``30705.  Seaworthiness.
``30706.  Defenses.
``30707.  Civil penalty.

     ``Sec. 30701. Definition

       ``In this chapter, the term `carrier' means the owner, 
     manager, charterer, agent, or master of a vessel.

     ``Sec. 30702. Application

       ``(a) In General.--Except as otherwise provided, this 
     chapter applies to a carrier engaged in the carriage of goods 
     to or from any port in the United States.
       ``(b) Relation to COGSA.--The relationship between this 
     chapter and the Carriage of Goods By Sea Act shall be the 
     same as the relationship that existed between the Act of 
     February 13, 1893 (ch. 105, 27 Stat. 445) (commonly known as 
     the Harter Act) and the Carriage of Goods By Sea Act, prior 
     to the repeal of the Harter Act.
       ``(c) Live Animals.--Sections 30703 and 30704 of this title 
     do not apply to the carriage of live animals.

     ``Sec. 30703. Bills of lading

       ``(a) Issuance.--A carrier shall issue to a shipper a bill 
     of lading or shipping document.
       ``(b) Contents.--The bill of lading or shipping document 
     shall include a statement of--
       ``(1) the marks necessary to identify the goods;
       ``(2) the number of packages, or the quantity or weight, 
     and whether it is carrier's or shipper's weight; and
       ``(3) the apparent condition of the goods.
       ``(c) Prima Facie Evidence of Receipt.--A bill of lading or 
     shipping document issued under this section is prima facie 
     evidence of receipt of the goods described.

     ``Sec. 30704. Loading, stowage, custody, care, and delivery

       ``A carrier may not insert in a bill of lading or shipping 
     document a provision relieving the carrier from liability for 
     loss or damage arising from improper loading, stowage, 
     custody, care, or delivery. Any such provision is void.

     ``Sec. 30705. Seaworthiness

       ``(a) Prohibition.--A carrier may not insert in a bill of 
     lading or shipping document a provision lessening or avoiding 
     its obligation to exercise due diligence to--
       ``(1) make the vessel seaworthy; and
       ``(2) properly man, equip, and supply the vessel.
       ``(b) Voidness.--A provision described in subsection (a) is 
     void.

     ``Sec. 30706. Defenses

       ``(a) Due Diligence.--If a carrier has exercised due 
     diligence to make the vessel in all respects seaworthy and to 
     properly man, equip, and supply the vessel, the carrier and 
     the vessel are not liable for loss or damage arising from an 
     error in the navigation or management of the vessel.
       ``(b) Other Defenses.--A carrier and the vessel are not 
     liable for loss or damage arising from--
       ``(1) dangers of the sea or other navigable waters;
       ``(2) acts of God;
       ``(3) public enemies;
       ``(4) seizure under legal process;
       ``(5) inherent defect, quality, or vice of the goods;
       ``(6) insufficiency of package;
       ``(7) act or omission of the shipper or owner of the goods 
     or their agent; or
       ``(8) saving or attempting to save life or property at sea, 
     including a deviation in rendering such a service.

     ``Sec. 30707. Civil penalty

       ``(a) In General.--A carrier that violates this chapter is 
     liable for a civil penalty of not more than $2,000.
       ``(b) Lien.--The amount of the penalty and costs for the 
     violation constitute a lien on the vessel engaged in the 
     carriage. A civil action in rem to enforce the lien may be 
     brought in the district court of the United States for any 
     district in which the vessel is found.
       ``(c) Disposition of Penalty.--Half of the penalty shall be 
     paid to the person injured by the violation and half to the 
     United States Government.

   ``CHAPTER 309--SUITS IN ADMIRALTY AGAINST UNITED STATES GOVERNMENT

``Sec.
``30901.  Short title.
``30902.  Definition.
``30903.  Waiver of immunity.
``30904.  Exclusive remedy.
``30905.  Period for bringing action.
``30906.  Venue.
``30907.  Security.
``30908.  Procedure for hearing and determination.
``30909.  Exoneration and limitation.
``30910.  Costs and interest.
``30911.  Arbitration, compromise, or settlement.
``30912.  Payment of judgment or settlement.
``30913.  Exemption from arrest or seizure.
``30914.  Release of privately owned vessel after seizure.
``30915.  Seizures and other proceedings in foreign jurisdictions.
``30916.  Recovery by United States Government for salvage services.
``30917.  Disposition of amounts recovered by United States Government.
``30918.  Reports.

     ``Sec. 30901. Short title

       ``This chapter may be cited as the `Suits in Admiralty 
     Act'.

     ``Sec. 30902. Definition

       ``In this chapter, the term `federally-owned corporation' 
     means a corporation in which the United States Government 
     owns all the outstanding capital stock.

     ``Sec. 30903. Waiver of immunity

       ``(a) In General.--In a case in which, if a vessel were 
     privately owned or operated, or if cargo were privately owned 
     or possessed, or if a private person or property were 
     involved, a civil action in admiralty could be maintained, a 
     civil action in personam may be brought against the United 
     States Government or a federally-owned corporation. In a 
     civil action in admiralty brought by the Government or a 
     federally-owned corporation, an admiralty claim in personam 
     may be filed or a setoff claimed against the Government or 
     corporation.
       ``(b) Non-Jury.--A claim against the Government or a 
     federally-owned corporation under this section shall be tried 
     without a jury.

     ``Sec. 30904. Exclusive remedy

       ``If a remedy is provided by this chapter, it shall be 
     exclusive of any other action arising out of the same subject 
     matter against the officer, employee, or agent of the United 
     States Government or the federally-owned corporation whose 
     act or omission gave rise to the claim.

     ``Sec. 30905. Period for bringing action

       ``A civil action under this chapter must be brought within 
     2 years after the cause of action arose.

     ``Sec. 30906. Venue

       ``(a) In General.--A civil action under this chapter shall 
     be brought in the district court of the United States for the 
     district in which--
       ``(1) any plaintiff resides or has its principal place of 
     business; or
       ``(2) the vessel or cargo is found.
       ``(b) Transfer.--On a motion by a party, the court may 
     transfer the action to any other district court of the United 
     States.

     ``Sec. 30907. Security

       ``Neither the United States Government nor a federally-
     owned corporation may be required to

[[Page H7599]]

     give a bond or admiralty stipulation in a civil action under 
     this chapter.

     ``Sec. 30908. Procedure for hearing and determination

       ``(a) In General.--A civil action under this chapter shall 
     proceed and be heard and determined according to the 
     principles of law and the rules of practice applicable in 
     like cases between private parties.
       ``(b) In Rem.--
       ``(1) Requirements.--The action may proceed according to 
     the principles of an action in rem if--
       ``(A) the plaintiff elects in the complaint; and
       ``(B) it appears that an action in rem could have been 
     maintained had the vessel or cargo been privately owned and 
     possessed.
       ``(2) Effect on relief in personam.--An election under 
     paragraph (1) does not prevent the plaintiff from seeking 
     relief in personam in the same action.

     ``Sec. 30909. Exoneration and limitation

       ``The United States Government is entitled to the 
     exemptions from and limitations of liability provided by law 
     to an owner, charterer, operator, or agent of a vessel.

     ``Sec. 30910. Costs and interest

       ``(a) In General.--A judgment against the United States 
     Government or a federally-owned corporation under this 
     chapter may include costs and interest at the rate of 4 
     percent a year until satisfied. Interest shall run as ordered 
     by the court, except that interest is not allowable for the 
     period before the action is filed.
       ``(b) Contract Providing for Interest.--Notwithstanding 
     subsection (a), if the claim is based on a contract providing 
     for interest, interest may be awarded at the rate and for the 
     period provided in the contract.

     ``Sec. 30911. Arbitration, compromise, or settlement

       ``The Secretary of a department of the United States 
     Government, or the board of trustees of a federally-owned 
     corporation, may arbitrate, compromise, or settle a claim 
     authorized by this chapter.

     ``Sec. 30912. Payment of judgment or settlement

       ``(a) In General.--The proper accounting officer of the 
     United States Government shall pay a final judgment, 
     arbitration award, or settlement under this chapter on 
     presentation of an authenticated copy.
       ``(b) Source of Payment.--Payment shall be made from an 
     appropriation or fund available specifically for the purpose. 
     If no appropriation or fund is specifically available, there 
     is hereby appropriated, out of money in the Treasury not 
     otherwise appropriated, an amount sufficient to pay the 
     judgment, award, or settlement.

     ``Sec. 30913. Exemption from arrest or seizure

       ``The following are not subject to arrest or seizure by 
     judicial process in the United States:
       ``(1) A vessel owned by, possessed by, or operated by or 
     for the United States Government or a federally-owned 
     corporation.
       ``(2) Cargo owned or possessed by the Government or a 
     federally-owned corporation.

     ``Sec. 30914. Release of privately owned vessel after seizure

       ``If a privately owned vessel not in the possession of the 
     United States Government or a federally-owned corporation is 
     arrested or attached in a civil action arising or alleged to 
     have arisen from prior ownership, possession, or operation by 
     the Government or corporation, the vessel shall be released 
     without bond or stipulation on a statement by the Government, 
     through the Attorney General or other authorized law officer, 
     that the Government is interested in the action, desires 
     release of the vessel, and assumes liability for the 
     satisfaction of any judgment obtained by the plaintiff. After 
     the vessel is released, the action shall proceed against the 
     Government in accordance with this chapter.

     ``Sec. 30915. Seizures and other proceedings in foreign 
       jurisdictions

       ``(a) In General.--If a vessel or cargo described in 
     section 30913 or 30914 of this title is arrested, attached, 
     or otherwise seized by judicial process in a foreign country, 
     or if an action is brought in a court of a foreign country 
     against the master of such a vessel for a claim arising from 
     the ownership, possession, or operation of the vessel, or the 
     ownership, possession, or carriage of such cargo, the 
     Secretary of State, on request of the Attorney General or 
     another officer authorized by the Attorney General, may 
     direct the United States consul residing at or nearest the 
     place at which the action was brought--
       ``(1) to claim the vessel or cargo as immune from arrest, 
     attachment, or other seizure, and to execute an agreement, 
     stipulation, bond, or undertaking, for the United States 
     Government or federally-owned corporation, for the release of 
     the vessel or cargo and the prosecution of any appeal; or
       ``(2) if an action has been brought against the master of 
     such a vessel, to enter the appearance of the Government or 
     corporation and to pledge the credit of the Government or 
     corporation to the payment of any judgment and costs in the 
     action.
       ``(b) Arranging Bond or Stipulation.--The Attorney General 
     may--
       ``(1) arrange with a bank, surety company, or other person, 
     whether in the United States or a foreign country, to execute 
     a bond or stipulation; and
       ``(2) pledge the credit of the Government to secure the 
     bond or stipulation.
       ``(c) Payment of Judgment.--The appropriate accounting 
     officer of the Government or corporation may pay a judgment 
     in an action described in subsection (a) on presentation of a 
     copy of the judgment if certified by the clerk of the court 
     and authenticated by--
       ``(1) the certificate and seal of the United States consul 
     claiming the vessel or cargo, or by the consul's successor; 
     and
       ``(2) the certificate of the Secretary as to the official 
     capacity of the consul.
       ``(d) Right To Claim Immunity Not Affected.--This section 
     does not affect the right of the Government to claim immunity 
     of a vessel or cargo from foreign jurisdiction.

     ``Sec. 30916. Recovery by United States Government for 
       salvage services

       ``(a) Civil Action.--The United States Government, and the 
     crew of a merchant vessel owned or operated by the 
     Government, or a federally-owned corporation, may bring a 
     civil action to recover for salvage services provided by the 
     vessel and crew.
       ``(b) Deposit of Amounts Recovered.--Any amount recovered 
     under this section by the Government for its own benefit, and 
     not for the benefit of the crew, shall be deposited in the 
     Treasury to the credit of the department of the Government, 
     or the corporation, having control of the possession or 
     operation of the vessel.

     ``Sec. 30917. Disposition of amounts recovered by United 
       States Government

       ``Amounts recovered in a civil action brought by the United 
     States Government on a claim arising from the ownership, 
     possession, or operation of a merchant vessel, or the 
     ownership, possession, or carriage of cargo, shall be 
     deposited in the Treasury to the credit of the department of 
     the Government, or the federally-owned corporation, having 
     control of the vessel or cargo, for reimbursement of the 
     appropriation, insurance fund, or other fund from which the 
     compensation for which the judgment was recovered was or will 
     be paid.

     ``Sec. 30918. Reports

       ``The Secretary of each department of the United States 
     Government, and the board of trustees of each federally-owned 
     corporation, shall report to Congress at each session thereof 
     all arbitration awards and settlements agreed to under this 
     chapter since the previous session, for which the time to 
     appeal has expired or been waived.

             ``CHAPTER 311--SUITS INVOLVING PUBLIC VESSELS

``Sec.
``31101.  Short title.
``31102.  Waiver of immunity.
``31103.  Applicable procedure.
``31104.  Venue.
``31105.  Security when counterclaim filed.
``31106.  Exoneration and limitation.
``31107.  Interest.
``31108.  Arbitration, compromise, or settlement.
``31109.  Payment of judgment or settlement.
``31110.  Subpoenas to officers or members of crew.
``31111.  Claims by nationals of foreign countries.
``31112.  Lien not recognized or created.
``31113.  Reports.

     ``Sec. 31101. Short title

       ``This chapter may be cited as the `Public Vessels Act'.

     ``Sec. 31102. Waiver of immunity

       ``(a) In General.--A civil action in personam in admiralty 
     may be brought, or an impleader filed, against the United 
     States Government for--
       ``(1) damages caused by a public vessel of the United 
     States; or
       ``(2) compensation for towage and salvage services, 
     including contract salvage, rendered to a public vessel of 
     the United States.
       ``(b) Counterclaim or Setoff.--If the Government brings a 
     civil action in admiralty for damages caused by a privately 
     owned vessel, the owner of the vessel, or the successor in 
     interest, may file a counterclaim in personam, or claim a 
     setoff, against the Government for damages arising out of the 
     same subject matter.

     ``Sec. 31103. Applicable procedure

       ``A civil action under this chapter is subject to the 
     provisions of chapter 309 of this title except to the extent 
     inconsistent with this chapter.

     ``Sec. 31104. Venue

       ``(a) In General.--A civil action under this chapter shall 
     be brought in the district court of the United States for the 
     district in which the vessel or cargo is found within the 
     United States.
       ``(b) Vessel or Cargo Outside Territorial Waters.--If the 
     vessel or cargo is outside the territorial waters of the 
     United States--
       ``(1) the action shall be brought in the district court of 
     the United States for any district in which any plaintiff 
     resides or has an office for the transaction of business; or
       ``(2) if no plaintiff resides or has an office for the 
     transaction of business in the United States, the action may 
     be brought in the district court of the United States for any 
     district.

     ``Sec. 31105. Security when counterclaim filed

       ``If a counterclaim is filed for a cause of action for 
     which the original action is filed under this chapter, the 
     respondent to the counterclaim shall give security in the 
     usual amount and form to respond to the counterclaim, unless 
     the court for cause shown orders otherwise. The proceedings 
     in the original action shall be stayed until the security is 
     given.

     ``Sec. 31106. Exoneration and limitation

       ``The United States Government is entitled to the 
     exemptions from and limitations of liability provided by law 
     to an owner, charterer, operator, or agent of a vessel.

     ``Sec. 31107. Interest

       ``A judgment in a civil action under this chapter may not 
     include interest for the period before the judgment is issued 
     unless the claim is based on a contract providing for 
     interest.

     ``Sec. 31108. Arbitration, compromise, or settlement

       ``The Attorney General may arbitrate, compromise, or settle 
     a claim authorized by this chapter if the claim actually has 
     been filed.

[[Page H7600]]

     ``Sec. 31109. Payment of judgment or settlement

       ``The proper accounting officer of the United States shall 
     pay a final judgment, arbitration award, or settlement under 
     this chapter on presentation of an authenticated copy. 
     Payment shall be made from any money in the Treasury 
     appropriated for the purpose.

     ``Sec. 31110. Subpoenas to officers or members of crew

       ``An officer or member of the crew of a public vessel may 
     not be subpoenaed in a civil action under this chapter 
     without the consent of--
       ``(1) the Secretary of the department or the head of the 
     independent establishment having control of the vessel at the 
     time the cause of action arose; or
       ``(2) the master or commanding officer of the vessel at the 
     time the subpoena is issued.

     ``Sec. 31111. Claims by nationals of foreign countries

       ``A national of a foreign country may not maintain a civil 
     action under this chapter unless it appears to the 
     satisfaction of the court in which the action is brought that 
     the government of that country, in similar circumstances, 
     allows nationals of the United States to sue in its courts.

     ``Sec. 31112. Lien not recognized or created

       ``This chapter shall not be construed as recognizing the 
     existence of or as creating a lien against a public vessel of 
     the United States.

     ``Sec. 31113. Reports

       ``The Attorney General shall report to Congress at each 
     session thereof all claims settled under this chapter.''.

     SEC. 6. SUBTITLE IV OF TITLE 46.

       Title 46, United States Code, is amended by inserting after 
     subtitle III the following:

              ``Subtitle IV--Regulation of Ocean Shipping

                        ``Part A--Ocean Shipping

``Chapter                                                      Sec.

``401.  General...................................................40101
``403.  Agreements................................................40301
``405.  Tariffs, Service Contracts, Refunds, and Waivers..........40501
``407.  Controlled Carriers.......................................40701
``409.  Ocean Transportation Intermediaries.......................40901
``411.  Prohibitions and Penalties................................41101
``413.  Enforcement...............................................41301

             ``Part B--Actions To Address Foreign Practices

``421.  Regulations Affecting Shipping in Foreign Trade...........42101
``423.  Foreign Shipping Practices................................42301

                        ``Part C--Miscellaneous

``441.  Evidence of Financial Responsibility for Passenger 
  Transportation..................................................44101

                        ``Part A--Ocean Shipping

                         ``CHAPTER 401--GENERAL

``Sec.
``40101.  Purposes.
``40102.  Definitions.
``40103.  Administrative exemptions.
``40104.  Reports filed with the Commission.

     ``Sec. 40101. Purposes

       ``The purposes of this part are to--
       ``(1) establish a nondiscriminatory regulatory process for 
     the common carriage of goods by water in the foreign commerce 
     of the United States with a minimum of government 
     intervention and regulatory costs;
       ``(2) provide an efficient and economic transportation 
     system in the ocean commerce of the United States that is, 
     insofar as possible, in harmony with, and responsive to, 
     international shipping practices;
       ``(3) encourage the development of an economically sound 
     and efficient United States-flag liner fleet capable of 
     meeting national security needs; and
       ``(4) 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. 40102. Definitions

       ``In this part:
       ``(1) Agreement.--The term `agreement'--
       ``(A) means a written or oral understanding, arrangement, 
     or association, and any modification or cancellation thereof; 
     but
       ``(B) does not include a maritime labor agreement.
       ``(2) Antitrust laws.--The term `antitrust laws' means--
       ``(A) the Sherman Act (15 U.S.C. 1 et seq.);
       ``(B) sections 73 and 74 of the Wilson Tariff Act (15 
     U.S.C. 8, 9);
       ``(C) the Clayton Act (15 U.S.C. 12 et seq.);
       ``(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a, 13b, 
     21a);
       ``(E) the Federal Trade Commission Act (15 U.S.C. 41 et 
     seq.);
       ``(F) the Antitrust Civil Process Act (15 U.S.C. 1311 et 
     seq.); and
       ``(G) Acts supplementary to those Acts.
       ``(3) Assessment agreement.--The term `assessment 
     agreement' means an agreement, whether part of a collective 
     bargaining agreement or negotiated separately, to the extent 
     the agreement provides for the funding of collectively 
     bargained fringe-benefit obligations on other than a uniform 
     worker-hour basis, regardless of the cargo handled or type of 
     vessel or equipment used.
       ``(4) Bulk cargo.--The term `bulk cargo' means cargo that 
     is loaded and carried in bulk without mark or count.
       ``(5) Chemical parcel-tanker.--The term `chemical parcel-
     tanker' means a vessel that has--
       ``(A) a cargo-carrying capability consisting of individual 
     cargo tanks for bulk chemicals that--
       ``(i) are a permanent part of the vessel; and
       ``(ii) have segregation capability with piping systems to 
     permit simultaneous carriage of several bulk chemical cargoes 
     with minimum risk of cross-contamination; and
       ``(B) a valid certificate of fitness under the 
     International Maritime Organization Code for the Construction 
     and Equipment of Ships Carrying Dangerous Chemicals in Bulk.
       ``(6) Common carrier.--The term `common carrier'--
       ``(A) means a person that--
       ``(i) holds itself out to the general public to provide 
     transportation by water of passengers or cargo between the 
     United States and a foreign country for compensation;
       ``(ii) assumes responsibility for the transportation from 
     the port or point of receipt to the port or point of 
     destination; and
       ``(iii) uses, for all or part of that transportation, a 
     vessel operating on the high seas or the Great Lakes between 
     a port in the United States and a port in a foreign country; 
     but
       ``(B) does not include a carrier engaged in ocean 
     transportation by ferry boat, ocean tramp, or chemical 
     parcel-tanker, or by vessel when primarily engaged in the 
     carriage of perishable agricultural commodities--
       ``(i) if the carrier and the owner of those commodities are 
     wholly-owned, directly or indirectly, by a person primarily 
     engaged in the marketing and distribution of those 
     commodities; and
       ``(ii) only with respect to the carriage of those 
     commodities.
       ``(7) Conference.--The term `conference'--
       ``(A) means an association of ocean common carriers 
     permitted, pursuant to an approved or effective agreement, to 
     engage in concerted activity and to use a common tariff; but
       ``(B) does not include a joint service, consortium, 
     pooling, sailing, or transshipment agreement.
       ``(8) Controlled carrier.--The term `controlled carrier' 
     means an ocean common carrier that is, or whose operating 
     assets are, directly or indirectly, owned or controlled by a 
     government, with ownership or control by a government being 
     deemed to exist for a carrier if--
       ``(A) a majority of the interest in the carrier is owned or 
     controlled in any manner by that government, an agency of 
     that government, or a public or private person controlled by 
     that government; or
       ``(B) that government has the right to appoint or 
     disapprove the appointment of a majority of the directors, 
     the chief operating officer, or the chief executive officer 
     of the carrier.
       ``(9) Deferred rebate.--The term `deferred rebate' means a 
     return by a common carrier of any freight money to a shipper, 
     where the return is--
       ``(A) consideration for the shipper giving all or any 
     portion of its shipments to that or any other common carrier 
     over a fixed period of time;
       ``(B) deferred beyond the completion of the service for 
     which it was paid; and
       ``(C) made only if the shipper has agreed to make a further 
     shipment with that or any other common carrier.
       ``(10) Forest products.--The term `forest products' 
     includes lumber in bundles, rough timber, ties, poles, 
     piling, laminated beams, bundled siding, bundled plywood, 
     bundled core stock or veneers, bundled particle or fiber 
     boards, bundled hardwood, wood pulp in rolls, wood pulp in 
     unitized bales, and paper and paper board in rolls or in 
     pallet or skid-sized sheets.
       ``(11) Inland division.--The term `inland division' means 
     the amount paid by a common carrier to an inland carrier for 
     the inland portion of through transportation offered to the 
     public by the common carrier.
       ``(12) Inland portion.--The term `inland portion' means the 
     charge to the public by a common carrier for the non-ocean 
     portion of through transportation.
       ``(13) Loyalty contract.--The term `loyalty contract' means 
     a contract with an ocean common carrier or agreement 
     providing for--
       ``(A) a shipper to obtain lower rates by committing all or 
     a fixed portion of its cargo to that carrier or agreement; 
     and
       ``(B) a deferred rebate arrangement.
       ``(14) Marine terminal operator.--The term `marine terminal 
     operator' means a person engaged in the United States in the 
     business of providing wharfage, dock, warehouse, or other 
     terminal facilities in connection with a common carrier, or 
     in connection with a common carrier and a water carrier 
     subject to subchapter II of chapter 135 of title 49.
       ``(15) Maritime labor agreement.--The term `maritime labor 
     agreement'--
       ``(A) means--
       ``(i) a collective bargaining agreement between an employer 
     subject to this part, or a group of such employers, and a 
     labor organization representing employees in the maritime or 
     stevedoring industry;
       ``(ii) an agreement preparatory to such a collective 
     bargaining agreement among members of a multi-employer 
     bargaining group; or
       ``(iii) an agreement specifically implementing provisions 
     of such a collective bargaining agreement or providing for 
     the formation, financing, or administration of a multi-
     employer bargaining group; but
       ``(B) does not include an assessment agreement.
       ``(16) Non-vessel-operating common carrier.--The term `non-
     vessel-operating common carrier' means a common carrier 
     that--
       ``(A) does not operate the vessels by which the ocean 
     transportation is provided; and
       ``(B) is a shipper in its relationship with an ocean common 
     carrier.
       ``(17) Ocean common carrier.--The term `ocean common 
     carrier' means a vessel-operating common carrier.
       ``(18) Ocean freight forwarder.--The term `ocean freight 
     forwarder' means a person that--

[[Page H7601]]

       ``(A) 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
       ``(B) processes the documentation or performs related 
     activities incident to those shipments.
       ``(19) Ocean transportation intermediary.--The term `ocean 
     transportation intermediary' means an ocean freight forwarder 
     or a non-vessel-operating common carrier.
       ``(20) Service contract.--The term `service contract' means 
     a written contract, other than a bill of lading or receipt, 
     between one or more shippers, on the one hand, and an 
     individual ocean common carrier or an agreement between or 
     among ocean common carriers, on the other, in which--
       ``(A) the shipper or shippers commit to providing a certain 
     volume or portion of cargo over a fixed time period; and
       ``(B) 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.
       ``(21) Shipment.--The term `shipment' means all of the 
     cargo carried under the terms of a single bill of lading.
       ``(22) Shipper.--The term `shipper' means--
       ``(A) a cargo owner;
       ``(B) the person for whose account the ocean transportation 
     of cargo is provided;
       ``(C) the person to whom delivery is to be made;
       ``(D) a shippers' association; or
       ``(E) a non-vessel-operating common carrier that accepts 
     responsibility for payment of all charges applicable under 
     the tariff or service contract.
       ``(23) Shippers' association.--The term `shippers' 
     association' means a group of shippers that consolidates or 
     distributes freight on a nonprofit basis for the members of 
     the group to obtain carload, truckload, or other volume rates 
     or service contracts.
       ``(24) Through rate.--The term `through rate' means the 
     single amount charged by a common carrier in connection with 
     through transportation.
       ``(25) Through transportation.--The term `through 
     transportation' means continuous transportation between 
     origin and destination for which a through rate is assessed 
     and which is offered or performed by one or more carriers, at 
     least one of which is a common carrier, between a United 
     States port or point and a foreign port or point.

     ``Sec. 40103. Administrative exemptions

       ``(a) In General.--The Federal Maritime Commission, on 
     application or its own motion, may by order or regulation 
     exempt for the future any class of agreements between persons 
     subject to this part or any specified activity of those 
     persons from any requirement of this part if the Commission 
     finds that the exemption will not result in substantial 
     reduction in competition or be detrimental to commerce. The 
     Commission may attach conditions to an exemption and may, by 
     order, revoke an exemption.
       ``(b) Opportunity for Hearing.--An order or regulation of 
     exemption or revocation of an exemption may be issued only if 
     the Commission has provided an opportunity for a hearing to 
     interested persons and departments and agencies of the United 
     States Government.

     ``Sec. 40104. Reports filed with the Commission

       ``(a) In General.--The Federal Maritime Commission may 
     require a common carrier or an officer, receiver, trustee, 
     lessee, agent, or employee of the carrier to file with the 
     Commission a periodical or special report, an account, 
     record, rate, or charge, or a memorandum of facts and 
     transactions related to the business of the carrier. The 
     report, account, record, rate, charge, or memorandum shall be 
     made under oath if the Commission requires, and shall be 
     filed in the form and within the time prescribed by the 
     Commission.
       ``(b) Conference Minutes.--Conference minutes required to 
     be filed with the Commission under this section may not be 
     released to third parties or published by the Commission.

                       ``CHAPTER 403--AGREEMENTS

``Sec.
``40301.  Application.
``40302.  Filing requirements.
``40303.  Content requirements.
``40304.  Commission action.
``40305.  Assessment agreements.
``40306.  Nondisclosure of information.
``40307.  Exemption from antitrust laws.

     ``Sec. 40301. Application

       ``(a) Ocean Common Carrier Agreements.--This part applies 
     to an agreement between or among ocean common carriers to--
       ``(1) discuss, fix, or regulate transportation rates, 
     including through rates, cargo space accommodations, and 
     other conditions of service;
       ``(2) pool or apportion traffic, revenues, earnings, or 
     losses;
       ``(3) allot ports or regulate the number and character of 
     voyages between ports;
       ``(4) regulate the volume or character of cargo or 
     passenger traffic to be carried;
       ``(5) engage in an exclusive, preferential, or cooperative 
     working arrangement between themselves or with a marine 
     terminal operator;
       ``(6) control, regulate, or prevent competition in 
     international ocean transportation; or
       ``(7) discuss and agree on any matter related to a service 
     contract.
       ``(b) Marine Terminal Operator Agreements.--This part 
     applies to an agreement between or among marine terminal 
     operators, or between or among one or more marine terminal 
     operators and one or more ocean common carriers, to--
       ``(1) discuss, fix, or regulate rates or other conditions 
     of service; or
       ``(2) engage in exclusive, preferential, or cooperative 
     working arrangements, to the extent the agreement involves 
     ocean transportation in the foreign commerce of the United 
     States.
       ``(c) Acquisitions.--This part does not apply to an 
     acquisition by any person, directly or indirectly, of any 
     voting security or assets of any other person.
       ``(d) Maritime Labor Agreements.--This part does not apply 
     to a maritime labor agreement. However, this subsection does 
     not exempt from this part any rate, charge, regulation, or 
     practice of a common carrier that is required to be set forth 
     in a tariff or is an essential term of a service contract, 
     whether or not the rate, charge, regulation, or practice 
     arises out of, or is otherwise related to, a maritime labor 
     agreement.
       ``(e) Assessment Agreements.--This part (except sections 
     40305 and 40307(a)) does not apply to an assessment 
     agreement.

     ``Sec. 40302. Filing requirements

       ``(a) In General.--A true copy of every agreement referred 
     to in section 40301(a) or (b) of this title shall be filed 
     with the Federal Maritime Commission. If the agreement is 
     oral, a complete memorandum specifying in detail the 
     substance of the agreement shall be filed.
       ``(b) Exceptions.--Subsection (a) does not apply to--
       ``(1) an agreement related to transportation to be 
     performed within or between foreign countries; or
       ``(2) an agreement among common carriers to establish, 
     operate, or maintain a marine terminal in the United States.
       ``(c) Regulations.--The Commission may by regulation 
     prescribe the form and manner in which an agreement shall be 
     filed and any additional information and documents necessary 
     to evaluate the agreement.

     ``Sec. 40303. Content requirements

       ``(a) Ocean Common Carrier Agreements.--
       ``(1) Restrictions.--An ocean common carrier agreement may 
     not--
       ``(A) prohibit or restrict a member of the agreement from 
     engaging in negotiations for a service contract with a 
     shipper;
       ``(B) require a member of the agreement to disclose a 
     negotiation on a service contract, or the terms of a service 
     contract, other than those terms required to be published 
     under section 40502(d) of this title; or
       ``(C) adopt mandatory rules or requirements affecting the 
     right of an agreement member to negotiate and enter into a 
     service contract.
       ``(2) Voluntary guidelines.--An ocean common carrier 
     agreement may provide authority to adopt voluntary guidelines 
     relating to the terms and procedures of an agreement member's 
     service contracts if the guidelines explicitly state the 
     right of members of the agreement not to follow the 
     guidelines. Any guidelines adopted shall be submitted 
     confidentially to the Federal Maritime Commission.
       ``(b) Conference Agreements.--Each conference agreement 
     must--
       ``(1) state its purpose;
       ``(2) provide reasonable and equal terms for admission and 
     readmission to conference membership for any ocean common 
     carrier willing to serve the particular trade or route;
       ``(3) permit any member to withdraw from conference 
     membership on reasonable notice without penalty;
       ``(4) at the request of any member, require an independent 
     neutral body to police fully the obligations of the 
     conference and its members;
       ``(5) prohibit the conference from engaging in conduct 
     prohibited by section 41105(1) or (3) of this title;
       ``(6) provide for a consultation process designed to 
     promote--
       ``(A) commercial resolution of disputes; and
       ``(B) cooperation with shippers in preventing and 
     eliminating malpractices;
       ``(7) establish procedures for promptly and fairly 
     considering requests and complaints of shippers; and
       ``(8) provide that--
       ``(A) any member of the conference may take independent 
     action on a rate or service item on not more than 5 days' 
     notice to the conference; and
       ``(B) except for an exempt commodity 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 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.
       ``(c) Interconference Agreements.--Each agreement between 
     carriers not members of the same conference must provide the 
     right of independent action for each carrier. Each agreement 
     between conferences must provide the right of independent 
     action for each conference.
       ``(d) Vessel Sharing Agreements.--
       ``(1) In general.--An ocean common carrier that is the 
     owner, operator, or bareboat, time, or slot charterer of a 
     United States-flag liner vessel documented under section 
     12103 or 12111(c) of this title may agree with an ocean 
     common carrier described in paragraph (2) to which it 
     charters or subcharters the vessel or space on the vessel 
     that the charterer or subcharterer may not use or make 
     available space on the vessel for the carriage of cargo 
     reserved by law for United States-flag vessels.
       ``(2) Carrier described.--An ocean common carrier described 
     in this paragraph is one that is not the owner, operator, or 
     bareboat charterer for at least one year of United States-
     flag liner vessels that are eligible to be included in the 
     Maritime Security Fleet Program and are enrolled in an 
     Emergency Preparedness Program under chapter 531 of this 
     title.

     ``Sec. 40304. Commission action

       ``(a) Notice of Filing.--Within 7 days after an agreement 
     is filed, the Federal Maritime

[[Page H7602]]

     Commission shall transmit a notice of the filing to the 
     Federal Register for publication.
       ``(b) Preliminary Review and Rejection.--After preliminary 
     review, the Commission shall reject an agreement that it 
     finds does not meet the requirements of sections 40302 and 
     40303 of this title. The Commission shall notify in writing 
     the person filing the agreement of the reason for rejection.
       ``(c) Review and Effective Date.--Unless rejected under 
     subsection (b), an agreement (other than an assessment 
     agreement) is effective--
       ``(1) on the 45th day after filing, or on the 30th day 
     after notice of the filing is published in the Federal 
     Register, whichever is later; or
       ``(2) if additional information or documents are requested 
     under subsection (d)--
       ``(A) on the 45th day after the Commission receives all the 
     additional information and documents; or
       ``(B) if the request is not fully complied with, on the 
     45th day after the Commission receives the information and 
     documents submitted and a statement of the reasons for 
     noncompliance with the request.
       ``(d) Request for Additional Information.--Before the 
     expiration of the period specified in subsection (c)(1), the 
     Commission may request from the person filing the agreement 
     any additional information and documents the Commission 
     considers necessary to make the determinations required by 
     this section.
       ``(e) Modification of Review Period.--
       ``(1) Shortening.--On request of the party filing an 
     agreement, the Commission may shorten a period specified in 
     subsection (c), but not to a date that is less than 14 days 
     after notice of the filing of the agreement is published in 
     the Federal Register.
       ``(2) Extension.--The period specified in subsection (c)(2) 
     may be extended only by the United States District Court for 
     the District of Columbia in a civil action brought by the 
     Commission under section 41307(c) of this title.
       ``(f) Fixed Terms.--The Commission may not limit the 
     effectiveness of an agreement to a fixed term.

     ``Sec. 40305. Assessment agreements

       ``(a) Filing Requirement.--An assessment agreement shall be 
     filed with the Federal Maritime Commission and is effective 
     on filing.
       ``(b) Complaints.--If a complaint is filed with the 
     Commission within 2 years after the date of an assessment 
     agreement, the Commission shall disapprove, cancel, or modify 
     the agreement, or an assessment or charge pursuant to the 
     agreement, that the Commission finds, after notice and 
     opportunity for a hearing, to be unjustly discriminatory or 
     unfair as between carriers, shippers, or ports. The 
     Commission shall issue its final decision in the proceeding 
     within one year after the date the complaint is filed.
       ``(c) Adjustments of Assessments and Charges.--To the 
     extent that the Commission finds under subsection (b) that an 
     assessment or charge is unjustly discriminatory or unfair as 
     between carriers, shippers, or ports, the Commission shall 
     adjust the assessment or charge for the period between the 
     filing of the complaint and the final decision by awarding 
     prospective credits or debits to future assessments and 
     charges. However, if the complainant has ceased activities 
     subject to the assessment or charge, the Commission may award 
     reparations.

     ``Sec. 40306. Nondisclosure of information

       ``Information and documents (other than an agreement) filed 
     with the Federal Maritime Commission under this chapter are 
     exempt from disclosure under section 552 of title 5 and may 
     not be made public except as may be relevant to an 
     administrative or judicial proceeding. This section does not 
     prevent disclosure to either House of Congress or to a duly 
     authorized committee or subcommittee of Congress.

     ``Sec. 40307. Exemption from antitrust laws

       ``(a) In General.--The antitrust laws do not apply to--
       ``(1) an agreement (including an assessment agreement) that 
     has been filed and is effective under this chapter;
       ``(2) an agreement that is exempt under section 40103 of 
     this title from any requirement of this part;
       ``(3) an agreement or activity within the scope of this 
     part, whether permitted under or prohibited by this part, 
     undertaken or entered into with a reasonable basis to 
     conclude that it is--
       ``(A) pursuant to an agreement on file with the Federal 
     Maritime Commission and in effect when the activity takes 
     place; or
       ``(B) exempt under section 40103 of this title from any 
     filing or publication requirement of this part;
       ``(4) an agreement or activity relating to transportation 
     services within or between foreign countries, whether or not 
     via the United States, unless the agreement or activity has a 
     direct, substantial, and reasonably foreseeable effect on the 
     commerce of the United States;
       ``(5) an agreement or activity relating to the foreign 
     inland segment of through transportation that is part of 
     transportation provided in a United States import or export 
     trade;
       ``(6) an agreement or activity to provide wharfage, dock, 
     warehouse, or other terminal facilities outside the United 
     States; or
       ``(7) an agreement, modification, or cancellation approved 
     before June 18, 1984, by the Commission under section 15 of 
     the Shipping Act, 1916, or permitted under section 14b of 
     that Act, and any properly published tariff, rate, fare, or 
     charge, or classification, rule, or regulation explanatory 
     thereof implementing that agreement, modification, or 
     cancellation.
       ``(b) Exceptions.--This part does not extend antitrust 
     immunity to--
       ``(1) an agreement with or among air carriers, rail 
     carriers, motor carriers, or common carriers by water not 
     subject to this part relating to transportation within the 
     United States;
       ``(2) a discussion or agreement among common carriers 
     subject to this part relating to the inland divisions (as 
     opposed to the inland portions) of through rates within the 
     United States;
       ``(3) an agreement among common carriers subject to this 
     part to establish, operate, or maintain a marine terminal in 
     the United States; or
       ``(4) a loyalty contract.
       ``(c) Retroactive Effect of Determinations.--A 
     determination by an agency or court that results in the 
     denial or removal of the immunity to the antitrust laws under 
     subsection (a) does not remove or alter the antitrust 
     immunity for the period before the determination.
       ``(d) Relief Under Clayton Act.--A person may not recover 
     damages under section 4 of the Clayton Act (15 U.S.C. 15), or 
     obtain injunctive relief under section 16 of that Act (15 
     U.S.C. 26), for conduct prohibited by this part.

    ``CHAPTER 405--TARIFFS, SERVICE CONTRACTS, REFUNDS, AND WAIVERS

``Sec.
``40501.  General rate and tariff requirements.
``40502.  Service contracts.
``40503.  Refunds and waivers.

     ``Sec. 40501. General rate and tariff requirements

       ``(a) Automated Tariff System.--
       ``(1) In general.--Each common carrier and conference shall 
     keep open to public inspection in an automated tariff system, 
     tariffs showing all its rates, charges, classifications, 
     rules, and practices between all points or ports on its own 
     route and on any through transportation route that has been 
     established. However, a common carrier is not required to 
     state separately or otherwise reveal in tariffs the inland 
     divisions of a through rate.
       ``(2) Exceptions.--Paragraph (1) does not apply with 
     respect to bulk cargo, forest products, recycled metal scrap, 
     new assembled motor vehicles, waste paper, or paper waste.
       ``(b) Contents of Tariffs.--A tariff under subsection (a) 
     shall--
       ``(1) state the places between which cargo will be carried;
       ``(2) list each classification of cargo in use;
       ``(3) state the level of compensation, if any, of any ocean 
     freight forwarder by a carrier or conference;
       ``(4) state separately each terminal or other charge, 
     privilege, or facility under the control of the carrier or 
     conference and any rules that in any way change, affect, or 
     determine any part or the total of the rates or charges;
       ``(5) include sample copies of any bill of lading, contract 
     of affreightment, or other document evidencing the 
     transportation agreement; and
       ``(6) include copies of any loyalty contract, omitting the 
     shipper's name.
       ``(c) Electronic Access.--A tariff under subsection (a) 
     shall be made available electronically to any person, without 
     time, quantity, or other limitation, through appropriate 
     access from remote locations. A reasonable fee may be charged 
     for such access, except that no fee may be charged for access 
     by a Federal agency.
       ``(d) Time-Volume Rates.--A rate contained in a tariff 
     under subsection (a) may vary with the volume of cargo 
     offered over a specified period of time.
       ``(e) Effective Dates.--
       ``(1) Increases.--A new or initial rate or change in an 
     existing rate that results in an increased cost to a shipper 
     may not become effective earlier than 30 days after 
     publication. However, for good cause, the Federal Maritime 
     Commission may allow the rate to become effective sooner.
       ``(2) Decreases.--A change in an existing rate that results 
     in a decreased cost to a shipper may become effective on 
     publication.
       ``(f) 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 is enforceable by an appropriate court as an implied 
     contract without proof of actual knowledge of its provisions.
       ``(g) Regulations.--
       ``(1) In general.--The Commission shall by regulation 
     prescribe the requirements for the accessibility and accuracy 
     of automated tariff systems established under this section. 
     The Commission, after periodic review, may prohibit the use 
     of any automated tariff system that fails to meet the 
     requirements established under this section.
       ``(2) Remote terminals.--The Commission may not require a 
     common carrier to provide a remote terminal for electronic 
     access under subsection (c).
       ``(3) Marine terminal operator schedules.--The Commission 
     shall by regulation prescribe the form and manner in which 
     marine terminal operator schedules authorized by this section 
     shall be published.

     ``Sec. 40502. Service contracts

       ``(a) 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 part.
       ``(b) Filing Requirements.--
       ``(1) In general.--Each service contract entered into under 
     this section by an individual ocean common carrier or an 
     agreement shall be filed confidentially with the Federal 
     Maritime Commission.
       ``(2) Exceptions.--Paragraph (1) does not apply to 
     contracts regarding bulk cargo, forest products, recycled 
     metal scrap, new assembled motor vehicles, waste paper, or 
     paper waste.
       ``(c) Essential Terms.--Each service contract shall 
     include--
       ``(1) the origin and destination port ranges;

[[Page H7603]]

       ``(2) the origin and destination geographic areas in the 
     case of through intermodal movements;
       ``(3) the commodities involved;
       ``(4) the minimum volume or portion;
       ``(5) the line-haul rate;
       ``(6) the duration;
       ``(7) service commitments; and
       ``(8) the liquidated damages for nonperformance, if any.
       ``(d) Publication of Certain Terms.--When a service 
     contract is filed confidentially with the Commission, a 
     concise statement of the essential terms specified in clauses 
     (1), (3), (4), and (6) of subsection (c) shall be published 
     and made available to the general public in tariff format.
       ``(e) Disclosure of Certain Terms.--
       ``(1) Definitions.--In this subsection, the terms `dock 
     area' and `within the port area' have the same meaning and 
     scope as in the applicable collective bargaining agreement 
     between the requesting labor organization and the carrier.
       ``(2) Disclosure.--An ocean common carrier that is a party 
     to or is otherwise subject to a collective bargaining 
     agreement with a labor organization shall, in response to a 
     written request by the labor organization, state whether it 
     is responsible for the following work at a dock area or 
     within a port area in the United States with respect to cargo 
     transportation under a service contract:
       ``(A) 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.
       ``(B) The assignment of intraport carriage of the shipper's 
     cargo between areas on a dock or within the port area.
       ``(C) 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 the container yard.
       ``(D) The assignment of container freight station work and 
     container maintenance and repair work performed at a dock 
     area or within the port area.
       ``(3) Within reasonable time.--The common carrier shall 
     provide the information described in paragraph (2) to the 
     requesting labor organization within a reasonable period of 
     time.
       ``(4) Existence of collective bargaining agreement.--This 
     subsection does not require the disclosure of information by 
     an ocean common carrier unless there exists an applicable and 
     otherwise lawful collective bargaining agreement pertaining 
     to that carrier. A disclosure by an ocean common carrier may 
     not be deemed an admission or an agreement that any work is 
     covered by a collective bargaining agreement. A dispute about 
     whether any work is covered by a collective bargaining 
     agreement and the responsibility of an ocean common carrier 
     under a collective bargaining agreement shall be resolved 
     solely in accordance with the dispute resolution procedures 
     contained in the collective bargaining agreement and the 
     National Labor Relations Act (29 U.S.C. 151 et seq.), and 
     without reference to this subsection.
       ``(5) Effect under other laws.--This subsection does not 
     affect the lawfulness or unlawfulness under this part or any 
     other Federal or State law of any collective bargaining 
     agreement or element thereof, including any element that 
     constitutes an essential term of a service contract.
       ``(f) Remedy for Breach.--Unless the parties agree 
     otherwise, the exclusive remedy for a breach of a service 
     contract is an action in an appropriate court. The contract 
     dispute resolution forum may not be controlled by or in any 
     way affiliated with a controlled carrier or by the government 
     that owns or controls the carrier.

     ``Sec. 40503. Refunds and waivers

       ``The Federal Maritime Commission, on application of a 
     carrier or shipper, may permit a common carrier or conference 
     to refund a portion of the freight charges collected from a 
     shipper, or to waive collection of a portion of the charges 
     from a shipper, if--
       ``(1) there is an error in a tariff, a failure to publish a 
     new tariff, or an error in quoting a tariff, and the refund 
     or waiver will not result in discrimination among shippers, 
     ports, or carriers;
       ``(2) the common carrier or conference, before filing an 
     application for authority to refund or waive any charges for 
     an error in a tariff or a failure to publish a tariff, has 
     published a new tariff setting forth the rate on which the 
     refund or waiver would be based; and
       ``(3) the application for the refund or waiver is filed 
     with the Commission within 180 days from the date of 
     shipment.

                   ``CHAPTER 407--CONTROLLED CARRIERS

``Sec.
``40701.  Rates.
``40702.  Rate standards.
``40703.  Effective date of rates.
``40704.  Commission review.
``40705.  Presidential review of Commission orders.
``40706.  Exceptions.

     ``Sec. 40701. Rates

       ``(a) In General.--A controlled carrier may not--
       ``(1) maintain a rate or charge in a tariff or service 
     contract, or charge or assess a rate, that is below a just 
     and reasonable level; or
       ``(2) establish, maintain, or enforce in a tariff or 
     service contract a classification, rule, or regulation that 
     results, or is likely to result, in the carriage or handling 
     of cargo at a rate or charge that is below a just and 
     reasonable level.
       ``(b) Commission Prohibition.--The Federal Maritime 
     Commission, at any time after notice and opportunity for a 
     hearing, may prohibit the publication or use of a rate, 
     charge, classification, rule, or regulation that a controlled 
     carrier has failed to demonstrate is just and reasonable.
       ``(c) Burden of Proof.--In a proceeding under this section, 
     the burden of proof is on the controlled carrier to 
     demonstrate that its rate, charge, classification, rule, or 
     regulation is just and reasonable.
       ``(d) Voidness.--A rate, charge, classification, rule, or 
     regulation that has been suspended or prohibited by the 
     Commission is void and its use is unlawful.

     ``Sec. 40702. Rate standards

       ``(a) Definition.--In this section, 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.
       ``(b) Standards.--In determining whether a rate, charge, 
     classification, rule, or regulation of a controlled carrier 
     is just and reasonable, the Federal Maritime Commission--
       ``(1) shall take into account whether the rate or charge 
     that has been published or assessed, or that would result 
     from the pertinent classification, rule, or regulation, is 
     below a level that is fully compensatory to the controlled 
     carrier based on the carrier's actual costs or constructive 
     costs; and
       ``(2) may take into account other appropriate factors, 
     including whether the rate, charge, classification, rule, or 
     regulation is--
       ``(A) the same as, or similar to, those published or 
     assessed by other carriers in the same trade;
       ``(B) required to ensure movement of particular cargo in 
     the same trade; or
       ``(C) required to maintain acceptable continuity, level, or 
     quality of common carrier service to or from affected ports.

     ``Sec. 40703. Effective date of rates

       ``Notwithstanding section 40501(e) of this title and except 
     for service contracts, a rate, charge, classification, rule, 
     or regulation of a controlled carrier may not become 
     effective, without special permission of the Federal Maritime 
     Commission, until the 30th day after publication.

     ``Sec. 40704. Commission review

       ``(a) Request for Justification.--On request of the Federal 
     Maritime Commission, a controlled carrier shall file with the 
     Commission, within 20 days of the request, a statement of 
     justification that sufficiently details the carrier's need 
     and purpose for an existing or proposed rate, charge, 
     classification, rule, or regulation and upon which the 
     Commission may reasonably base a determination of its 
     lawfulness.
       ``(b) Determination.--Within 120 days after receipt of 
     information requested under subsection (a), the Commission 
     shall determine whether the rate, charge, classification, 
     rule, or regulation may be unjust and unreasonable.
       ``(c) Show Cause Order.--Whenever the Commission is of the 
     opinion that a rate, charge, classification, rule, or 
     regulation published or assessed by a controlled carrier may 
     be unjust and unreasonable, the Commission shall issue an 
     order to the controlled carrier to show cause why the rate, 
     charge, classification, rule, or regulation should not be 
     prohibited.
       ``(d) Suspension Pending Determination.--
       ``(1) Not yet effective.--Pending a determination of the 
     lawfulness of a rate, charge, classification, rule, or 
     regulation in a proceeding under subsection (c), the 
     Commission may suspend the rate, charge, classification, 
     rule, or regulation at any time before its effective date.
       ``(2) Already effective.--If a rate, charge, 
     classification, rule, or regulation has already become 
     effective, the Commission, on issuance of an order to show 
     cause, may suspend the rate, charge, classification, rule, or 
     regulation on at least 30 days' notice to the controlled 
     carrier.
       ``(3) Maximum suspension.--A period of suspension under 
     this subsection may not exceed 180 days.
       ``(e) Replacement During Suspension.--Whenever the 
     Commission has suspended a rate, charge, classification, 
     rule, or regulation under this section, the controlled 
     carrier may publish a new rate, charge, classification, rule, 
     or regulation to take effect immediately during the 
     suspension in lieu of the suspended rate, charge, 
     classification, rule, or regulation. However, the Commission 
     may reject the new rate, charge, classification, rule, or 
     regulation if the Commission believes it is unjust and 
     unreasonable.

     ``Sec. 40705. Presidential review of Commission orders

       ``(a) Transmission to President.--The Federal Maritime 
     Commission shall transmit to the President, concurrently with 
     publication thereof, each order of suspension or final order 
     of prohibition issued under section 40704 of this title.
       ``(b) Presidential Request and Commission Action.--Within 
     10 days after receipt or the effective date of a Commission 
     order referred to in subsection (a), the President, in 
     writing, may request the Commission to stay the effect of the 
     order if the President finds that the stay is required for 
     reasons of national defense or foreign policy. The reasons 
     shall be specified in the request. The Commission shall 
     immediately grant the request by issuing an order in which 
     the President's request shall be described. During a stay, 
     the President shall, whenever practicable, attempt to resolve 
     the matter by negotiating with representatives of the 
     applicable foreign governments.

     ``Sec. 40706. Exceptions

       ``This chapter does not apply to--
       ``(1) a controlled carrier of a foreign country whose 
     vessels are entitled by a treaty of the United States to 
     receive national or most-favored-nation treatment; or
       ``(2) a trade served only by controlled carriers.

           ``CHAPTER 409--OCEAN TRANSPORTATION INTERMEDIARIES

``Sec.

[[Page H7604]]

``40901.  License requirement.
``40902.  Financial responsibility.
``40903.  Suspension or revocation of license.
``40904.  Compensation by common carriers.

     ``Sec. 40901. License requirement

       ``(a) In General.--A person in the United States may not 
     act as an ocean transportation intermediary unless the person 
     holds an ocean transportation intermediary's license issued 
     by the Federal Maritime Commission. The Commission shall 
     issue a license to a person that the Commission determines to 
     be qualified by experience and character to act as an ocean 
     transportation intermediary.
       ``(b) Exception.--A person whose primary business is the 
     sale of merchandise may forward shipments of the merchandise 
     for its own account without an ocean transportation 
     intermediary's license.

     ``Sec. 40902. Financial responsibility

       ``(a) In General.--A person may not act as an ocean 
     transportation intermediary unless the person furnishes a 
     bond, proof of insurance, or other surety--
       ``(1) in a form and amount determined by the Federal 
     Maritime Commission to insure financial responsibility; and
       ``(2) issued by a surety company found acceptable by the 
     Secretary of the Treasury.
       ``(b) Scope of Financial Responsibility.--A bond, 
     insurance, or other surety obtained under this section--
       ``(1) shall be available to pay any penalty assessed under 
     section 41109 of this title or any order for reparation 
     issued under section 41305 of this title;
       ``(2) may be available to pay any claim against an ocean 
     transportation intermediary arising from its transportation-
     related activities--
       ``(A) with the consent of the insured ocean transportation 
     intermediary and subject to review by the surety company; or
       ``(B) 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
       ``(3) shall be available to pay any judgment for damages 
     against an ocean transportation intermediary arising from its 
     transportation-related activities, if the claimant has first 
     attempted to resolve the claim under paragraph (2) and the 
     claim has not been resolved within a reasonable period of 
     time.
       ``(c) Regulations on Court Judgments.--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.
       ``(d) Resident Agent.--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.

     ``Sec. 40903. Suspension or revocation of license

       ``(a) Failure To Maintain Qualifications or To Comply.--The 
     Federal Maritime Commission, after notice and opportunity for 
     a hearing, shall suspend or revoke an ocean transportation 
     intermediary's license if the Commission finds that the ocean 
     transportation intermediary--
       ``(1) is not qualified to provide intermediary services; or
       ``(2) willfully failed to comply with a provision of this 
     part or with an order or regulation of the Commission.
       ``(b) Failure To Maintain Bond, Proof of Insurance, or 
     Other Surety.--The Commission may revoke an ocean 
     transportation intermediary's license for failure to maintain 
     a bond, proof of insurance, or other surety as required by 
     section 40902(a) of this title.

     ``Sec. 40904. Compensation by common carriers

       ``(a) Certification of License and Services.--A common 
     carrier may compensate an ocean freight forwarder for a 
     shipment dispatched for others only when the ocean freight 
     forwarder has certified in writing that it holds an ocean 
     transportation intermediary's license (if required under 
     section 40901 of this title) and has--
       ``(1) engaged, booked, secured, reserved, or contracted 
     directly with the carrier or its agent for space aboard a 
     vessel or confirmed the availability of the space; and
       ``(2) prepared and processed the ocean bill of lading, dock 
     receipt, or other similar document for the shipment.
       ``(b) Dual Compensation.--A common carrier may not pay 
     compensation for services described in subsection (a) more 
     than once on the same shipment.
       ``(c) Beneficial Interest Shipments.--An ocean freight 
     forwarder may not receive compensation from a common carrier 
     for a shipment in which the ocean freight forwarder has a 
     direct or indirect beneficial interest. A common carrier may 
     not knowingly pay compensation on that shipment.
       ``(d) Limits on Authority of Conference or Group.--A 
     conference or group of two or more ocean common carriers in 
     the foreign commerce of the United States that is authorized 
     to agree on the level of compensation paid to an ocean 
     freight forwarder may not--
       ``(1) deny a member of the conference or group the right, 
     upon notice of not more than 5 days, to take independent 
     action on any level of compensation paid to an ocean freight 
     forwarder; or
       ``(2) agree to limit the payment of compensation to an 
     ocean freight forwarder to less than 1.25 percent of the 
     aggregate of all rates and charges applicable under a tariff 
     and assessed against the cargo on which the services of the 
     ocean freight forwarder are provided.

               ``CHAPTER 411--PROHIBITIONS AND PENALTIES

``Sec.
``41101.  Joint ventures and consortiums.
``41102.  General prohibitions.
``41103.  Disclosure of information.
``41104.  Common carriers.
``41105.  Concerted action.
``41106.  Marine terminal operators.
``41107.  Monetary penalties.
``41108.  Additional penalties.
``41109.  Assessment of penalties.

     ``Sec. 41101. Joint ventures and consortiums

       ``In this chapter, a joint venture or consortium of two or 
     more common carriers operating as a single entity is deemed 
     to be a single common carrier.

     ``Sec. 41102. General prohibitions

       ``(a) Obtaining Transportation at Less Than Applicable 
     Rates.--A person may not knowingly and willfully, directly or 
     indirectly, by means of false billing, false classification, 
     false weighing, false report of weight, false measurement, or 
     any other unjust or unfair device or means, obtain or attempt 
     to obtain ocean transportation for property at less than the 
     rates or charges that would otherwise apply.
       ``(b) Operating Contrary to Agreement.--A person may not 
     operate under an agreement required to be filed under section 
     40302 or 40305 of this title if--
       ``(1) the agreement has not become effective under section 
     40304 of this title or has been rejected, disapproved, or 
     canceled; or
       ``(2) the operation is not in accordance with the terms of 
     the agreement or any modifications to the agreement made by 
     the Federal Maritime Commission.
       ``(c) Practices in Handling Property.--A common carrier, 
     marine terminal operator, or ocean transportation 
     intermediary may not fail to establish, observe, and enforce 
     just and reasonable regulations and practices relating to or 
     connected with receiving, handling, storing, or delivering 
     property.

     ``Sec. 41103. Disclosure of information

       ``(a) Prohibition.--A common carrier, marine terminal 
     operator, or ocean freight forwarder, either alone or in 
     conjunction with any other person, directly or indirectly, 
     may not knowingly disclose, offer, solicit, or receive any 
     information concerning the nature, kind, quantity, 
     destination, consignee, or routing of any property tendered 
     or delivered to a common carrier, without the consent of the 
     shipper or consignee, if the information--
       ``(1) may be used to the detriment or prejudice of the 
     shipper, the consignee, or any common carrier; or
       ``(2) may improperly disclose its business transaction to a 
     competitor.
       ``(b) Exceptions.--Subsection (a) does not prevent 
     providing the information--
       ``(1) in response to legal process;
       ``(2) to the Federal Maritime Commission or an agency of 
     the United States Government; or
       ``(3) to an independent neutral body operating within the 
     scope of its authority to fulfill the policing obligations of 
     the parties to an agreement effective under this part.
       ``(c) Disclosure for Determining Breach or Compiling 
     Statistics.--An ocean common carrier that is a party to a 
     conference agreement approved under this part, a receiver, 
     trustee, lessee, agent, or employee of the carrier, or any 
     other person authorized by the carrier to receive 
     information--
       ``(1) may give information to the conference or any person 
     or agency designated by the conference, for the purpose of--
       ``(A) determining whether a shipper or consignee has 
     breached an agreement with the conference or its member 
     lines;
       ``(B) determining whether a member of the conference has 
     breached the conference agreement; or
       ``(C) compiling statistics of cargo movement; and
       ``(2) may not prevent the conference or its designee from 
     soliciting or receiving information for any of those 
     purposes.

     ``Sec. 41104. Common carriers

       ``A common carrier, either alone or in conjunction with any 
     other person, directly or indirectly, may not--
       ``(1) allow a person to obtain transportation for property 
     at less than the rates or charges established by the carrier 
     in its tariff or service contract by means of false billing, 
     false classification, false weighing, false measurement, or 
     any other unjust or unfair device or means;
       ``(2) provide service in the liner trade that is--
       ``(A) not in accordance with the rates, charges, 
     classifications, rules, and practices contained in a tariff 
     published or a service contract entered into under chapter 
     405 of this title, unless excepted or exempted under section 
     40103 or 40501(a)(2) of this title; or
       ``(B) under a tariff or service contract that has been 
     suspended or prohibited by the Federal Maritime Commission 
     under chapter 407 or 423 of this title;
       ``(3) retaliate against a shipper by refusing, or 
     threatening to refuse, cargo space accommodations when 
     available, or resort to other unfair or unjustly 
     discriminatory methods because the shipper has patronized 
     another carrier, or has filed a complaint, or for any other 
     reason;
       ``(4) for service pursuant to a tariff, engage in any 
     unfair or unjustly discriminatory practice in the matter of--
       ``(A) rates or charges;
       ``(B) cargo classifications;
       ``(C) cargo space accommodations or other facilities, with 
     due regard being given to the proper loading of the vessel 
     and the available tonnage;

[[Page H7605]]

       ``(D) loading and landing of freight; or
       ``(E) adjustment and settlement of claims;
       ``(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;
       ``(6) use a vessel in a particular trade for the purpose of 
     excluding, preventing, or reducing competition by driving 
     another ocean common carrier out of that trade;
       ``(7) offer or pay any deferred rebates;
       ``(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) knowingly and willfully accept cargo from or 
     transport cargo for the account of an ocean transportation 
     intermediary that does not have a tariff as required by 
     section 40501 of this title and a bond, insurance, or other 
     surety as required by section 40902 of this title; or
       ``(12) knowingly and willfully enter into a service 
     contract with an ocean transportation intermediary that does 
     not have a tariff as required by section 40501 of this title 
     and a bond, insurance, or other surety as required by section 
     40902 of this title, or with an affiliate of such an ocean 
     transportation intermediary.

     ``Sec. 41105. Concerted action

       ``A conference or group of two or more common carriers may 
     not--
       ``(1) boycott or take any other concerted action resulting 
     in an unreasonable refusal to deal;
       ``(2) engage in conduct that unreasonably restricts the use 
     of intermodal services or technological innovations;
       ``(3) engage in any predatory practice designed to 
     eliminate the participation, or deny the entry, in a 
     particular trade of a common carrier not a member of the 
     conference, a group of common carriers, an ocean tramp, or a 
     bulk carrier;
       ``(4) negotiate with a non-ocean carrier or group of non-
     ocean carriers (such as truck, rail, or air operators) on any 
     matter relating to rates or services provided to ocean common 
     carriers within the United States by those non-ocean 
     carriers, unless the negotiations and any resulting 
     agreements are not in violation of the antitrust laws and are 
     consistent with the purposes of this part, except that this 
     clause does not prohibit the setting and publishing of a 
     joint through rate by a conference, joint venture, or 
     association of ocean common carriers;
       ``(5) deny in the export foreign commerce of the United 
     States compensation to an ocean freight forwarder or limit 
     that compensation to less than a reasonable amount;
       ``(6) allocate shippers among specific carriers that are 
     parties to the agreement or prohibit a carrier that is a 
     party to the agreement from soliciting cargo from a 
     particular shipper, except as--
       ``(A) authorized by section 40303(d) of this title;
       ``(B) required by the law of the United States or the 
     importing or exporting country; or
       ``(C) agreed to by a shipper in a service contract;
       ``(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 person due 
     to the person's status as a shippers' association or ocean 
     transportation intermediary; 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 person due to the person's status 
     as a shippers' association or ocean transportation 
     intermediary.

     ``Sec. 41106. Marine terminal operators

       ``A marine terminal operator may not--
       ``(1) agree with another marine terminal operator or with a 
     common carrier to boycott, or unreasonably discriminate in 
     the provision of terminal services to, a common carrier or 
     ocean tramp;
       ``(2) give any undue or unreasonable preference or 
     advantage or impose any undue or unreasonable prejudice or 
     disadvantage with respect to any person; or
       ``(3) unreasonably refuse to deal or negotiate.

     ``Sec. 41107. Monetary penalties

       ``(a) In General.--A person that violates this part or a 
     regulation or order of the Federal Maritime Commission issued 
     under this part is liable to the United States Government for 
     a civil penalty. Unless otherwise provided in this part, the 
     amount of the penalty may not exceed $5,000 for each 
     violation or, if the violation was willfully and knowingly 
     committed, $25,000 for each violation. Each day of a 
     continuing violation is a separate violation.
       ``(b) Lien on Carrier's Vessels.--The amount of a civil 
     penalty imposed on a common carrier under this section 
     constitutes a lien on the vessels operated by the carrier. 
     Any such vessel is subject to an action in rem to enforce the 
     lien in the district court of the United States for the 
     district in which it is found.

     ``Sec. 41108. Additional penalties

       ``(a) Suspension of Tariffs.--For a violation of section 
     41104(1), (2), or (7) of this title, the Federal Maritime 
     Commission may suspend any or all tariffs of the common 
     carrier, or that common carrier's right to use any or all 
     tariffs of conferences of which it is a member, for a period 
     not to exceed 12 months.
       ``(b) Operating Under Suspended Tariff.--A common carrier 
     that accepts or handles cargo for carriage under a tariff 
     that has been suspended, or after its right to use that 
     tariff has been suspended, is liable to the United States 
     Government for a civil penalty of not more than $50,000 for 
     each shipment.
       ``(c) Failure To Provide Information.--
       ``(1) Penalties.--If the Commission finds, after notice and 
     opportunity for a hearing, that a common carrier has failed 
     to supply information ordered to be produced or compelled by 
     subpoena under section 41303 of this title, the Commission 
     may--
       ``(A) suspend any or all tariffs of the carrier or the 
     carrier's right to use any or all tariffs of conferences of 
     which it is a member; and
       ``(B) request the Secretary of Homeland Security to refuse 
     or revoke any clearance required for a vessel operated by the 
     carrier, and when so requested, the Secretary shall refuse or 
     revoke the clearance.
       ``(2) Defense based on foreign law.--If, in defense of its 
     failure to comply with a subpoena or discovery order, a 
     common carrier alleges that information or documents located 
     in a foreign country cannot be produced because of the laws 
     of that country, the Commission shall immediately notify the 
     Secretary of State of the failure to comply and of the 
     allegation relating to foreign laws. On receiving the 
     notification, the Secretary of State shall promptly consult 
     with the government of the nation within which the 
     information or documents are alleged to be located for the 
     purpose of assisting the Commission in obtaining the 
     information or documents.
       ``(d) Impairing Access to Foreign Trade.--If the Commission 
     finds, after notice and opportunity for a hearing, that the 
     action of a common carrier, acting alone or in concert with 
     another person, or a foreign government has unduly impaired 
     access of a vessel documented under the laws of the United 
     States to ocean trade between foreign ports, the Commission 
     shall take action that it finds appropriate, including 
     imposing any of the penalties authorized by this section. The 
     Commission also may take any of the actions authorized by 
     sections 42304 and 42305 of this title.
       ``(e) Submission of Order to President.--Before an order 
     under this section becomes effective, it shall be submitted 
     immediately to the President. The President, within 10 days 
     after receiving it, may disapprove it if the President finds 
     that disapproval is required for reasons of national defense 
     or foreign policy.

     ``Sec. 41109. Assessment of penalties

       ``(a) General Authority.--Until a matter is referred to the 
     Attorney General, the Federal Maritime Commission may, after 
     notice and opportunity for a hearing, assess a civil penalty 
     provided for in this part. The Commission may compromise, 
     modify, or remit, with or without conditions, a civil 
     penalty.
       ``(b) Factors in Determining Amount.--In determining the 
     amount of a civil penalty, the Commission shall take into 
     account the nature, circumstances, extent, and gravity of the 
     violation committed and, with respect to the violator, the 
     degree of culpability, history of prior offenses, ability to 
     pay, and other matters justice may require.
       ``(c) Exception.--A civil penalty may not be imposed for 
     conspiracy to violate section 41102(a) or 41104(1) or (2) of 
     this title or to defraud the Commission by concealing such a 
     violation.
       ``(d) Prohibited Basis of Penalty.--The Commission or a 
     court may not order a 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 forth in a tariff or 
     service contract by that common carrier for the 
     transportation service provided.
       ``(e) Time Limit.--A proceeding to assess a civil penalty 
     under this section must be commenced within 5 years after the 
     date of the violation.
       ``(f) Review of Civil Penalty.--A person against whom a 
     civil penalty is assessed under this section may obtain 
     review under chapter 158 of title 28.
       ``(g) Civil Actions To Collect.--If a person does not pay 
     an assessment of a civil penalty after it has become final or 
     after the appropriate court has entered final judgment in 
     favor of the Commission, the Attorney General at the request 
     of the Commission may seek to collect the amount assessed in 
     an appropriate district court of the United States. The court 
     shall enforce the order of the Commission unless it finds 
     that the order was not regularly made and duly issued.

                       ``CHAPTER 413--ENFORCEMENT

``Sec.
``41301.  Complaints.
``41302.  Investigations.
``41303.  Discovery and subpoenas.
``41304.  Hearings and orders.
``41305.  Award of reparations.
``41306.  Injunctive relief sought by complainants.
``41307.  Injunctive relief sought by the Commission.
``41308.  Enforcement of subpoenas and orders.
``41309.  Enforcement of reparation orders.

     ``Sec. 41301. Complaints

       ``(a) In General.--A person may file with the Federal 
     Maritime Commission a sworn complaint alleging a violation of 
     this part, except section 41307(b)(1). If the complaint is 
     filed within 3 years after the claim accrues, the complainant 
     may seek reparations for an injury to the complainant caused 
     by the violation.
       ``(b) Notice and Response.--The Commission shall provide a 
     copy of the complaint to the person named in the complaint. 
     Within a reasonable time specified by the Commission, the 
     person shall satisfy the complaint or answer it in writing.
       ``(c) If Complaint Not Satisfied.--If the complaint is not 
     satisfied, the Commission shall investigate the complaint in 
     an appropriate manner and make an appropriate order.

[[Page H7606]]

     ``Sec. 41302. Investigations

       ``(a) In General.--The Federal Maritime Commission, on 
     complaint or its own motion, may investigate any conduct or 
     agreement that the Commission believes may be in violation of 
     this part. The Commission may by order disapprove, cancel, or 
     modify any agreement that operates in violation of this part.
       ``(b) Effectiveness of Agreement During Investigation.--
     Unless an injunction is issued under section 41306 or 41307 
     of this title, an agreement under investigation by the 
     Commission remains in effect until the Commission issues its 
     order.
       ``(c) Date for Decision.--Within 10 days after the 
     initiation of a proceeding under this section or section 
     41301 of this title, the Commission shall set a date by which 
     it will issue its final decision. The Commission by order may 
     extend the date for good cause.
       ``(d) Sanctions for Delay.--If, within the period for final 
     decision under subsection (c), the Commission determines that 
     it is unable to issue a final decision because of undue delay 
     caused by a party to the proceeding, the Commission may 
     impose sanctions, including issuing a decision adverse to the 
     delaying party.
       ``(e) Report.--The Commission shall make a written report 
     of every investigation under this part in which a hearing was 
     held, stating its conclusions, decisions, findings of fact, 
     and order. The Commission shall provide a copy of the report 
     to all parties and publish the report for public information. 
     A published report is competent evidence in a court of the 
     United States.

     ``Sec. 41303. Discovery and subpoenas

       ``(a) In General.--In an investigation or adjudicatory 
     proceeding under this part--
       ``(1) the Federal Maritime Commission may subpoena 
     witnesses and evidence; and
       ``(2) a party may use depositions, written interrogatories, 
     and discovery procedures under regulations prescribed by the 
     Commission that, to the extent practicable, shall conform to 
     the Federal Rules of Civil Procedure (28 App. U.S.C.).
       ``(b) Witness Fees.--Unless otherwise prohibited by law, a 
     witness is entitled to the same fees and mileage as in the 
     courts of the United States.

     ``Sec. 41304. Hearings and orders

       ``(a) Opportunity for Hearing.--The Federal Maritime 
     Commission shall provide an opportunity for a hearing before 
     issuing an order relating to a violation of this part or a 
     regulation prescribed under this part.
       ``(b) Modification of Order.--The Commission may reverse, 
     suspend, or modify any of its orders.
       ``(c) Rehearing.--On application of a party to a 
     proceeding, the Commission may grant a rehearing of the same 
     or any matter determined in the proceeding. Except by order 
     of the Commission, a rehearing does not operate as a stay of 
     an order.
       ``(d) Period of Effectiveness.--An order of the Commission 
     remains in effect for the period specified in the order or 
     until suspended, modified, or set aside by the Commission or 
     a court of competent jurisdiction.

     ``Sec. 41305. Award of reparations

       ``(a) Definition.--In this section, the term `actual 
     injury' includes the loss of interest at commercial rates 
     compounded from the date of injury.
       ``(b) Basic Amount.--If the complaint was filed within the 
     period specified in section 41301(a) of this title, the 
     Federal Maritime Commission shall direct the payment of 
     reparations to the complainant for actual injury caused by a 
     violation of this part, plus reasonable attorney fees.
       ``(c) Additional Amounts.--On a showing that the injury was 
     caused by an activity prohibited by section 41102(b), 
     41104(3) or (6), or 41105(1) or (3) of this title, the 
     Commission may order the payment of additional amounts, but 
     the total recovery of a complainant may not exceed twice the 
     amount of the actual injury.
       ``(d) Difference Between Rates.--If the injury was caused 
     by an activity prohibited by section 41104(4)(A) or (B) of 
     this title, the amount of the injury shall be the difference 
     between the rate paid by the injured shipper and the most 
     favorable rate paid by another shipper.

     ``Sec. 41306. Injunctive relief sought by complainants

       ``(a) In General.--After filing a complaint with the 
     Federal Maritime Commission under section 41301 of this 
     title, the complainant may bring a civil action in a district 
     court of the United States to enjoin conduct in violation of 
     this part.
       ``(b) Venue.--The action must be brought in the judicial 
     district in which--
       ``(1) the Commission has brought a civil action against the 
     defendant under section 41307(a) of this title; or
       ``(2) the defendant resides or transacts business, if the 
     Commission has not brought such an action.
       ``(c) Remedies by Court.--After notice to the defendant, 
     and a showing that the standards for granting injunctive 
     relief by courts of equity are met, the court may grant a 
     temporary restraining order or preliminary injunction for a 
     period not to exceed 10 days after the Commission has issued 
     an order disposing of the complaint.
       ``(d) Attorney Fees.--A defendant prevailing in a civil 
     action under this section shall be allowed reasonable 
     attorney fees to be assessed and collected as part of the 
     costs of the action.

     ``Sec. 41307. Injunctive relief sought by the Commission

       ``(a) General Violations.--In connection with an 
     investigation under section 41301 or 41302 of this title, the 
     Federal Maritime Commission may bring a civil action to 
     enjoin conduct in violation of this part. The action must be 
     brought in the district court of the United States for any 
     judicial district in which the defendant resides or transacts 
     business. After notice to the defendant, and a showing that 
     the standards for granting injunctive relief by courts of 
     equity are met, the court may grant a temporary restraining 
     order or preliminary injunction for a period not to exceed 10 
     days after the Commission has issued an order disposing of 
     the issues under investigation.
       ``(b) Reduction in Competition.--
       ``(1) Action by commission.--If, at any time after the 
     filing or effective date of an agreement under chapter 403 of 
     this title, the Commission determines that the agreement is 
     likely, by a reduction in competition, to produce an 
     unreasonable reduction in transportation service or an 
     unreasonable increase in transportation cost, the Commission, 
     after notice to the person filing the agreement, may bring a 
     civil action in the United States District Court for the 
     District of Columbia to enjoin the operation of the 
     agreement. The Commission's sole remedy with respect to an 
     agreement likely to have such an effect is an action under 
     this subsection.
       ``(2) Remedies by court.--In an action under this 
     subsection, the court may issue--
       ``(A) a temporary restraining order or a preliminary 
     injunction; and
       ``(B) a permanent injunction after a showing that the 
     agreement is likely to have the effect described in paragraph 
     (1).
       ``(3) Burden of proof and third parties.--In an action 
     under this subsection, the burden of proof is on the 
     Commission. The court may not allow a third party to 
     intervene.
       ``(c) Failure To Provide Information.--If a person filing 
     an agreement, or an officer, director, partner, agent, or 
     employee of the person, fails substantially to comply with a 
     request for the submission of additional information or 
     documents within the period provided in section 40304(c) of 
     this title, the Commission may bring a civil action in the 
     United States District Court for the District of Columbia. At 
     the request of the Commission, the Court--
       ``(1) may order compliance;
       ``(2) shall extend the period specified in section 
     40304(c)(2) of this title until there has been substantial 
     compliance; and
       ``(3) may grant other equitable relief that the court 
     decides is appropriate.
       ``(d) Representation.--The Commission may represent itself 
     in a proceeding under this section in--
       ``(1) a district court of the United States, on notice to 
     the Attorney General; and
       ``(2) a court of appeals of the United States, with the 
     approval of the Attorney General.

     ``Sec. 41308. Enforcement of subpoenas and orders

       ``(a) Civil Action.--If a person does not comply with a 
     subpoena or order of the Federal Maritime Commission, the 
     Attorney General, at the request of the Commission, or an 
     injured party, may seek enforcement in a district court of 
     the United States having jurisdiction over the parties. If, 
     after hearing, the court determines that the subpoena or 
     order was regularly made and duly issued, the court shall 
     enforce the subpoena or order.
       ``(b) Time Limit on Bringing Actions.--An action under this 
     section to enforce an order of the Commission must be brought 
     within 3 years after the date the order was violated.

     ``Sec. 41309. Enforcement of reparation orders

       ``(a) Civil Action.--If a person does not comply with an 
     order of the Federal Maritime Commission for the payment of 
     reparation, the person to whom the award was made may seek 
     enforcement of the order in a district court of the United 
     States having jurisdiction over the parties.
       ``(b) Parties and Service of Process.--All parties in whose 
     favor the Commission has made an award of reparation by a 
     single order may be joined as plaintiffs, and all other 
     parties in the order may be joined as defendants, in a single 
     action in a judicial district in which any one plaintiff 
     could maintain an action against any one defendant. Service 
     of process against a defendant not found in that district may 
     be made in a district in which any office of that defendant 
     is located or in which any port of call on a regular route 
     operated by that defendant is located. Judgment may be 
     entered for any plaintiff against the defendant liable to 
     that plaintiff.
       ``(c) Nature of Review.--In an action under this section, 
     the findings and order of the Commission are prima facie 
     evidence of the facts stated in the findings and order.
       ``(d) Costs and Attorney Fees.--The plaintiff is not liable 
     for costs of the action or for costs of any subsequent stage 
     of the proceedings unless they accrue on the plaintiff's 
     appeal. A prevailing plaintiff shall be allowed reasonable 
     attorney fees to be assessed and collected as part of the 
     costs of the action.
       ``(e) Time Limit on Bringing Actions.--An action under this 
     section to enforce an order of the Commission must be brought 
     within 3 years after the date the order was violated.

             ``Part B--Actions To Address Foreign Practices

     ``CHAPTER 421--REGULATIONS AFFECTING SHIPPING IN FOREIGN TRADE

``Sec.
``42101.  Regulations of the Commission.
``42102.  Regulations of other agencies.
``42103.  No preference to Government-owned vessels.
``42104.  Information, witnesses, and evidence.
``42105.  Disclosure to public.
``42106.  Other actions to remedy unfavorable conditions.
``42107.  Refusal of clearance and entry.
``42108.  Penalty for operating under suspended tariff or service 
              contract.
``42109.  Consultation with other agencies.

[[Page H7607]]

     ``Sec. 42101. Regulations of the Commission

       ``(a) Unfavorable Conditions.--To further the objectives 
     and policy set forth in section 50101 of this title, the 
     Federal Maritime Commission shall prescribe regulations 
     affecting shipping in foreign trade, not in conflict with 
     law, to adjust or meet general or special conditions 
     unfavorable to shipping in foreign trade, whether in a 
     particular trade or on a particular route or in commerce 
     generally, including intermodal movements, terminal 
     operations, cargo solicitation, agency services, ocean 
     transportation intermediary services and operations, and 
     other activities and services integral to transportation 
     systems, and which arise out of or result from laws or 
     regulations of a foreign country or competitive methods, 
     pricing practices, or other practices employed by owners, 
     operators, agents, or masters of vessels of a foreign 
     country.
       ``(b) Initiation of Regulation.--A regulation under 
     subsection (a) may be initiated by the Commission on its own 
     motion or on the petition of any person, including another 
     component of the United States Government.

     ``Sec. 42102. Regulations of other agencies

       ``(a) Request to Agency.--To further the objectives and 
     policy set forth in section 50101 of this title, the Federal 
     Maritime Commission shall request the head of a department, 
     agency, or instrumentality of the United States Government to 
     suspend, modify, or annul any existing regulations, or to 
     make new regulations, affecting shipping in the foreign 
     trade, except regulations relating to the Public Health 
     Service, the Consular Service, or the inspection of vessels.
       ``(b) Prior Review and Approval.--A department, agency, or 
     instrumentality of the Government may not prescribe a 
     regulation affecting shipping in the foreign trade (except a 
     regulation affecting the Public Health Service, the Consular 
     Service, or the inspection of vessels) until the regulation 
     has been submitted to the Commission for its approval and 
     final action has been taken by the Commission or the 
     President.
       ``(c) Submission to President.--If the head of a 
     department, agency, or instrumentality of the Government 
     refuses to comply with a request under subsection (a) or 
     objects to a decision of the Commission under subsection (b), 
     the Commission or the head of the department, agency, or 
     instrumentality may submit the facts to the President. The 
     President may establish, suspend, modify, or annul the 
     regulation.

     ``Sec. 42103. No preference to Government-owned vessels

       ``A regulation may not give a vessel owned by the United 
     States Government a preference over a vessel owned by 
     citizens of the United States and documented under the laws 
     of the United States.

     ``Sec. 42104. Information, witnesses, and evidence

       ``(a) Order To Supply Information.--In carrying out section 
     42101 of this title, the Federal Maritime Commission may 
     order any person (including a common carrier, tramp operator, 
     bulk operator, shipper, shippers' association, ocean 
     transportation intermediary, or marine terminal operator, or 
     an officer, receiver, trustee, lessee, agent, or employee 
     thereof) to file with the Commission a report, answers to 
     questions, documentary material, or other information the 
     Commission considers necessary or appropriate. The Commission 
     may require the response to any such order to be made under 
     oath. The response shall be provided in the form and within 
     the time specified by the Commission.
       ``(b) Subpoenas and Discovery.--In carrying out section 
     42101 of this title, the Commission may--
       ``(1) subpoena witnesses and evidence; and
       ``(2) authorize a party to use depositions, written 
     interrogatories, and discovery procedures that, to the extent 
     practicable, conform to the Federal Rules of Civil Procedure 
     (28 App. U.S.C.).
       ``(c) Witness Fees.--Unless otherwise prohibited by law, 
     and subject to funds being appropriated, a witness in a 
     proceeding under section 42101 of this title is entitled to 
     the same fees and mileage as in the courts of the United 
     States.
       ``(d) Penalties.--For failure to supply information ordered 
     to be produced or compelled by subpoena under this section, 
     the Commission may--
       ``(1) after notice and opportunity for a hearing, suspend 
     tariffs and service contracts of a common carrier or the 
     common carrier's right to use tariffs of conferences and 
     service contracts of agreements of which it is a member; or
       ``(2) assess a civil penalty of not more than $5,000 for 
     each day that the information is not provided.
       ``(e) Enforcement.--If a person does not comply with an 
     order or subpoena of the Commission under this section, the 
     Commission may seek enforcement in a district court of the 
     United States having jurisdiction over the parties. If, after 
     hearing, the court determines that the order or subpoena was 
     regularly made and duly issued, the court shall enforce the 
     order or subpoena.

     ``Sec. 42105. Disclosure to public

       ``Notwithstanding any other provision of law, the Federal 
     Maritime Commission may refuse to disclose to the public a 
     response or other information submitted to it under this 
     chapter.

     ``Sec. 42106. Other actions to remedy unfavorable conditions

       ``If the Federal Maritime Commission finds that conditions 
     unfavorable to shipping in foreign trade as described in 
     section 42101 of this title exist, the Commission may--
       ``(1) limit voyages to and from United States ports or the 
     amount or type of cargo carried;
       ``(2) suspend, in whole or in part, tariffs and service 
     contracts for carriage to or from United States ports, 
     including a common carrier's right to use tariffs of 
     conferences and service contracts of agreements in United 
     States trades of which it is a member for any period the 
     Commission specifies;
       ``(3) suspend, in whole or in part, an ocean common 
     carrier's right to operate under any agreement filed with the 
     Commission, including any agreement authorizing preferential 
     treatment at terminals, preferential terminal leases, space 
     chartering, or pooling of cargo or revenue with other ocean 
     common carriers;
       ``(4) impose a fee not to exceed $1,000,000 per voyage; or
       ``(5) take any other action the Commission finds necessary 
     and appropriate to adjust or meet any condition unfavorable 
     to shipping in the foreign trade of the United States.

     ``Sec. 42107. Refusal of clearance and entry

       ``At the request of the Federal Maritime Commission--
       ``(1) the Secretary of Homeland Security shall--
       ``(A) refuse the clearance required by section 60105 of 
     this title to a vessel of a country that is named in a 
     regulation prescribed by the Commission under section 42101 
     of this title; and
       ``(B) collect any fees imposed by the Commission under 
     section 42106(4) of this title; and
       ``(2) the Secretary of the department in which the Coast 
     Guard is operating shall--
       ``(A) deny entry, for purposes of oceanborne trade, of a 
     vessel of a country that is named in a regulation prescribed 
     by the Commission under section 42101 of this title, to a 
     port or place in the United States or the navigable waters of 
     the United States; or
       ``(B) detain the vessel at the port or place in the United 
     States from which it is about to depart for another port or 
     place in the United States.

     ``Sec. 42108. Penalty for operating under suspended tariff or 
       service contract

       ``A common carrier that accepts or handles cargo for 
     carriage under a tariff or service contract that has been 
     suspended under section 42104(d)(1) or 42106(2) of this 
     title, or after its right to use another tariff or service 
     contract has been suspended under those provisions, is liable 
     to the United States Government for a civil penalty of not 
     more than $50,000 for each day that it is found to be 
     operating under a suspended tariff or service contract.

     ``Sec. 42109. Consultation with other agencies

       ``The Federal Maritime Commission may consult with, seek 
     the cooperation of, or make recommendations to other 
     appropriate agencies of the United States Government prior to 
     taking any action under this chapter.

               ``CHAPTER 423--FOREIGN SHIPPING PRACTICES

``Sec.
``42301.  Definitions.
``42302.  Investigations.
``42303.  Information requests.
``42304.  Action against foreign carriers.
``42305.  Refusal of clearance and entry.
``42306.  Submission of determinations to President.
``42307.  Review of regulations and orders.

     ``Sec. 42301. Definitions

       ``(a) Defined in Part A.--In this chapter, the terms 
     `common carrier', `marine terminal operator', `ocean common 
     carrier', `ocean transportation intermediary', `shipper', and 
     `shippers' association' have the meaning given those terms in 
     section 40102 of this title.
       ``(b) Other Definitions.--In this chapter:
       ``(1) Foreign carrier.--The term `foreign carrier' means an 
     ocean common carrier a majority of whose vessels are 
     documented under the laws of a foreign country.
       ``(2) Maritime services.--The term `maritime services' 
     means port-to-port transportation of cargo by vessels 
     operated by an ocean common carrier.
       ``(3) Maritime-related services.--The term `maritime-
     related services' means intermodal operations, terminal 
     operations, cargo solicitation, agency services, ocean 
     transportation intermediary services and operations, and all 
     other activities and services integral to total 
     transportation systems of ocean common carriers and their 
     foreign domiciled affiliates for themselves and others.
       ``(4) United states carrier.--The term `United States 
     carrier' means an ocean common carrier operating vessels 
     documented under the laws of the United States.
       ``(5) United states oceanborne trade.--The term `United 
     States oceanborne trade' means the carriage of cargo between 
     the United States and a foreign country, whether directly or 
     indirectly, by an ocean common carrier.

     ``Sec. 42302. Investigations

       ``(a) In General.--The Federal Maritime Commission shall 
     investigate whether any laws, rules, regulations, policies, 
     or practices of a foreign government, or any practices of a 
     foreign carrier or other person providing maritime or 
     maritime-related services in a foreign country, result in the 
     existence of conditions that--
       ``(1) adversely affect the operations of United States 
     carriers in United States oceanborne trade; and
       ``(2) do not exist for foreign carriers of that country in 
     the United States under the laws of the United States or as a 
     result of acts of United States carriers or other persons 
     providing maritime or maritime-related services in the United 
     States.
       ``(b) Initiation of Investigation.--An investigation under 
     subsection (a) may be initiated by the Commission on its own 
     motion or on the petition of any person, including another 
     component of the United States Government.
       ``(c) Time for Decision.--The Commission shall complete an 
     investigation under this section and render a decision within 
     120 days after it is initiated. However, the Commission may 
     extend this 120-day period for an additional 90

[[Page H7608]]

     days if the Commission is unable to obtain sufficient 
     information to determine whether a condition specified in 
     subsection (a) exists. A notice providing an extension shall 
     state clearly the reasons for the extension.

     ``Sec. 42303. Information requests

       ``(a) In General.--To further the purposes of section 
     42302(a) of this title, the Federal Maritime Commission may 
     order any person (including a common carrier, shipper, 
     shippers' association, ocean transportation intermediary, or 
     marine terminal operator, or an officer, receiver, trustee, 
     lessee, agent or employee thereof) to file with the 
     Commission any periodic or special report, answers to 
     questions, documentary material, or other information the 
     Commission considers necessary or appropriate. The Commission 
     may require the response to any such order to be made under 
     oath. The response shall be provided in the form and within 
     the time specified by the Commission.
       ``(b) Subpoenas.--In an investigation under section 42302 
     of this title, the Commission may subpoena witnesses and 
     evidence.
       ``(c) Nondisclosure.--Notwithstanding any other provision 
     of law, the Commission may determine that any information 
     submitted to it in response to a request under this section, 
     or otherwise, shall not be disclosed to the public.

     ``Sec. 42304. Action against foreign carriers

       ``(a) In General.--Subject to section 42306 of this title, 
     whenever the Federal Maritime Commission, after notice and 
     opportunity for comment or hearing, determines that the 
     conditions specified in section 42302(a) of this title exist, 
     the Commission shall take such action to offset those 
     conditions as it considers necessary and appropriate against 
     any foreign carrier that is a contributing cause, or whose 
     government is a contributing cause, to those conditions. The 
     action may include--
       ``(1) limitations on voyages to and from United States 
     ports or on the amount or type of cargo carried;
       ``(2) suspension, in whole or in part, of any or all 
     tariffs and service contracts, including an ocean common 
     carrier's right to use any or all tariffs and service 
     contracts of conferences in United States trades of which it 
     is a member for any period the Commission specifies;
       ``(3) suspension, in whole or in part, of an ocean common 
     carrier's right to operate under any agreement filed with the 
     Commission, including any agreement authorizing preferential 
     treatment at terminals, preferential terminal leases, space 
     chartering, or pooling of cargo or revenue with other ocean 
     common carriers; and
       ``(4) a fee not to exceed $1,000,000 per voyage.
       ``(b) Consultation.--The Commission may consult with, seek 
     the cooperation of, or make recommendations to other 
     appropriate agencies of the United States Government prior to 
     taking any action under subsection (a).

     ``Sec. 42305. Refusal of clearance and entry

       ``Subject to section 42306 of this title, whenever the 
     Federal Maritime Commission determines that the conditions 
     specified in section 42302(a) of this title exist, then at 
     the request of the Commission--
       ``(1) the Secretary of Homeland Security shall refuse the 
     clearance required by section 60105 of this title to a vessel 
     of a foreign carrier that is identified by the Commission 
     under section 42304 of this title; and
       ``(2) the Secretary of the department in which the Coast 
     Guard is operating shall--
       ``(A) deny entry, for purposes of oceanborne trade, of a 
     vessel of a foreign carrier that is identified by the 
     Commission under section 42304 of this title, to a port or 
     place in the United States or the navigable waters of the 
     United States; or
       ``(B) detain the vessel at the port or place in the United 
     States from which it is about to depart for another port or 
     place in the United States.

     ``Sec. 42306. Submission of determinations to President

       ``Before a determination under section 42304 of this title 
     becomes effective or a request is made under section 42305 of 
     this title, the determination shall be submitted immediately 
     to the President. The President, within 10 days after 
     receiving it, may disapprove it in writing, setting forth the 
     reasons for the disapproval, if the President finds that 
     disapproval is required for reasons of national defense or 
     foreign policy.

     ``Sec. 42307. Review of regulations and orders

       ``A regulation or final order of the Federal Maritime 
     Commission under this chapter is reviewable exclusively in 
     the same forum and in the same manner as provided in section 
     2342(3)(B) of title 28.

                        ``Part C--Miscellaneous

   ``CHAPTER 441--EVIDENCE OF FINANCIAL RESPONSIBILITY FOR PASSENGER 
                             TRANSPORTATION

``Sec.
``44101.  Application.
``44102.  Financial responsibility to indemnify passengers for 
              nonperformance of transportation.
``44103.  Financial responsibility to pay liability for death or 
              injury.
``44104.  Civil penalty.
``44105.  Refusal of clearance.
``44106.  Conduct of proceedings.

     ``Sec. 44101. Application

       ``This chapter applies to a vessel that--
       ``(1) has berth or stateroom accommodations for at least 50 
     passengers; and
       ``(2) boards passengers at a port in the United States.

     ``Sec. 44102. Financial responsibility to indemnify 
       passengers for nonperformance of transportation

       ``(a) Filing Requirement.--A person in the United States 
     may not arrange, offer, advertise, or provide transportation 
     on a vessel to which this chapter applies unless the person 
     has filed with the Federal Maritime Commission evidence of 
     financial responsibility to indemnify passengers for 
     nonperformance of the transportation.
       ``(b) Satisfactory Evidence.--To satisfy subsection (a), a 
     person must file--
       ``(1) information the Commission considers necessary; or
       ``(2) a copy of a bond or other security, in such form as 
     the Commission by regulation may require.
       ``(c) Authorized Issuer of Bond.--If a bond is filed, it 
     must be issued by a bonding company authorized to do business 
     in the United States.

     ``Sec. 44103. Financial responsibility to pay liability for 
       death or injury

       ``(a) General Requirement.--The owner or charterer of a 
     vessel to which this chapter applies shall establish, under 
     regulations prescribed by the Federal Maritime Commission, 
     financial responsibility to meet liability for death or 
     injury to passengers or other individuals on a voyage to or 
     from a port in the United States.
       ``(b) Amounts.--
       ``(1) In general.--The amount of financial responsibility 
     required under subsection (a) shall be based on the number of 
     passenger accommodations as follows:
       ``(A) $20,000 for each of the first 500 passenger 
     accommodations.
       ``(B) $15,000 for each additional passenger accommodation 
     between 501 and 1,000.
       ``(C) $10,000 for each additional passenger accommodation 
     between 1,001 and 1,500.
       ``(D) $5,000 for each additional passenger accommodation 
     over 1,500.
       ``(2) Multiple vessels.--If the owner or charterer is 
     operating more than one vessel subject to this chapter, the 
     amount of financial responsibility shall be based on the 
     number of passenger accommodations on the vessel with the 
     largest number of passenger accommodations.
       ``(c) Availability To Pay Judgment.--The amount determined 
     under subsection (b) shall be available to pay a judgment for 
     damages (whether less than or more than $20,000) for death or 
     injury to a passenger or other individual on a voyage to or 
     from a port in the United States.
       ``(d) Means of Establishing.--Financial responsibility 
     under this section may be established by one or more of the 
     following if acceptable to the Commission:
       ``(1) Insurance.
       ``(2) Surety bond issued by a bonding company authorized to 
     do business in the United States.
       ``(3) Qualification as a self-insurer.
       ``(4) Other evidence of financial responsibility.

     ``Sec. 44104. Civil penalty

       ``A person that violates section 44102 or 44103 of this 
     title is liable to the United States Government for a civil 
     penalty of not more than $5,000, plus $200 for each passage 
     sold, to be assessed by the Federal Maritime Commission. The 
     Commission may remit or mitigate the penalty on terms the 
     Commission considers proper.

     ``Sec. 44105. Refusal of clearance

       ``The Secretary of Homeland Security shall refuse the 
     clearance required by section 60105 of this title, at the 
     port or place of departure from the United States, of a 
     vessel that is subject to this chapter and does not have 
     evidence issued by the Federal Maritime Commission of 
     compliance with sections 44102 and 44103 of this title.

     ``Sec. 44106. Conduct of proceedings

       ``Part A of this subtitle applies to proceedings conducted 
     by the Federal Maritime Commission under this chapter.''.

     SEC. 7. SUBTITLE V OF TITLE 46.

       (a) Subtitle Analysis.--The analysis of subtitle V of title 
     46, United States Code, is amended to read as follows:

                           ``Part A--General

``Chapter                                                      Sec.

``501.  Policy, Studies, and Reports..............................50101
``503.  Administrative............................................50301
``505.  Other General Provisions..................................50501

                   ``Part B--Merchant Marine Service

``511.  General...................................................51101
``513.  United States Merchant Marine Academy.....................51301
``515.  State Maritime Academy Support Program....................51501
``517.  Other Support for Merchant Marine Training................51701
``519.  Merchant Marine Awards....................................51901
``521.  Miscellaneous.............................................52101

                ``Part C--Financial Assistance Programs

``531.  Maritime Security Fleet...................................53101
``533.  Construction Reserve Funds................................53301
``535.  Capital Construction Funds................................53501
``537.  Loans and Guarantees......................................53701
``539.  War Risk Insurance........................................53901

                     ``Part D--Promotional Programs

``551.  Coastwise Trade...........................................55101
``553.  Passenger and Cargo Preferences...........................55301
``555.  Miscellaneous.............................................55501

           ``Part E--Control of Merchant Marine Capabilities

``561.  Restrictions on Transfers.................................56101
``563.  Emergency Acquisition of Vessels..........................56301
``565.  Essential Vessels Affected by Neutrality Act..............56501

              ``Part F--Government-Owned Merchant Vessels

``571.  General Authority.........................................57101
``573.  Vessel Trade-In Program...................................57301
``575.  Construction, Charter, and Sale of Vessels................57501

[[Page H7609]]

                  ``Part G--Restrictions and Penalties

``581.  Restrictions and Penalties.............................58101''.
       (b) Chapters Preceding Chapter 531.--Subtitle V of title 
     46, United States Code, is amended by inserting after the 
     subtitle analysis the following:

                           ``Part A--General

              ``CHAPTER 501--POLICY, STUDIES, AND REPORTS

``Sec.
``50101.  Objectives and policy.
``50102.  Survey of merchant marine.
``50103.  Determinations of essential services.
``50104.  Studies of general maritime problems.
``50105.  Studies and cooperation relating to the construction of 
              vessels.
``50106.  Studies on the operation of vessels.
``50107.  Studies on marine insurance.
``50108.  Studies on cargo carriage and cargo containers.
``50109.  Miscellaneous studies.
``50110.  Securing preference to vessels of the United States.
``50111.  Reports to Congress.
``50112.  National Maritime Enhancement Institutes.
``50113.  Use and performance reports by operators of vessels.

     ``Sec. 50101. Objectives and policy

       ``(a) Objectives.--It is necessary for the national defense 
     and the development of the domestic and foreign commerce of 
     the United States that the United States have a merchant 
     marine--
       ``(1) sufficient to carry the waterborne domestic commerce 
     and a substantial part of the waterborne export and import 
     foreign commerce of the United States and to provide shipping 
     service essential for maintaining the flow of the waterborne 
     domestic and foreign commerce at all times;
       ``(2) capable of serving as a naval and military auxiliary 
     in time of war or national emergency;
       ``(3) owned and operated under United States flag by 
     citizens of the United States insofar as practicable;
       ``(4) composed of the best-equipped, safest, and most 
     suitable types of vessels, built in the United States and 
     manned with a trained and efficient citizen personnel; and
       ``(5) supplemented by efficient facilities for building and 
     repairing vessels.
       ``(b) Policy.--It is the policy of the United States 
     Government to encourage and aid the development and 
     maintenance of a merchant marine satisfying the objectives 
     described in subsection (a).

     ``Sec. 50102. Survey of merchant marine

       ``(a) In General.--The Secretary of Transportation shall 
     survey the merchant marine of the United States to determine 
     whether replacements and additions are required to carry out 
     the objectives and policy of section 50101 of this title. The 
     Secretary shall study, perfect, and adopt a long-range 
     program for replacements and additions that will result, as 
     soon as practicable, in--
       ``(1) an adequate and well-balanced merchant fleet, 
     including vessels of all types, that will provide shipping 
     service essential for maintaining the flow of foreign 
     commerce by vessels designed to be readily and quickly 
     convertible into transport and supply vessels in a time of 
     national emergency;
       ``(2) ownership and operation of the fleet by citizens of 
     the United States insofar as practicable;
       ``(3) vessels designed to afford the best and most complete 
     protection for passengers and crew against fire and all 
     marine perils; and
       ``(4) an efficient capacity for building and repairing 
     vessels in the United States with an adequate number of 
     skilled personnel to provide an adequate mobilization base.
       ``(b) Cooperation With Secretary of Navy.--In carrying out 
     subsection (a)(1), the Secretary of Transportation shall 
     cooperate closely with the Secretary of the Navy as to 
     national defense requirements.

     ``Sec. 50103. Determinations of essential services

       ``(a) Essential Services, Routes, and Lines.--
       ``(1) In general.--The Secretary of Transportation shall 
     investigate, determine, and keep current records of the ocean 
     services, routes, and lines from ports in the United States, 
     or in the territories and possessions of the United States, 
     to foreign markets, which the Secretary determines to be 
     essential for the promotion, development, expansion, and 
     maintenance of the foreign commerce of the United States. In 
     making such a determination, the Secretary shall consider and 
     give due weight to--
       ``(A) the cost of maintaining each line;
       ``(B) the probability that a line cannot be maintained 
     except at a heavy loss disproportionate to the benefit to 
     foreign trade;
       ``(C) the number of voyages and types of vessels that 
     should be employed in a line;
       ``(D) the intangible benefit of maintaining a line to the 
     foreign commerce of the United States, the national defense, 
     and other national requirements; and
       ``(E) any other facts and conditions a prudent business 
     person would consider when dealing with the person's own 
     business.
       ``(2) Saint lawrence seaway.--For purposes of paragraph 
     (1), the Secretary shall establish services, routes, and 
     lines that reflect the seasonal closing of the Saint Lawrence 
     Seaway and provide for alternate routing of vessels through a 
     different range of ports during that closing to maintain 
     continuity of service on a year-round basis.
       ``(b) Bulk Cargo Carrying Services.--The Secretary shall 
     investigate, determine, and keep current records of the bulk 
     cargo carrying services that should be provided by United 
     States-flag vessels (whether or not operating on particular 
     services, routes, or lines) for the promotion, development, 
     expansion, and maintenance of the foreign commerce of the 
     United States and the national defense or other national 
     requirements.
       ``(c) Types of Vessels.--The Secretary shall investigate, 
     determine, and keep current records of the type, size, speed, 
     method of propulsion, and other requirements of the vessels, 
     including express-liner or super-liner vessels, that should 
     be employed in--
       ``(1) the services, routes, or lines described in 
     subsection (a), and the frequency and regularity of the 
     voyages of the vessels, with a view to furnishing adequate, 
     regular, certain, and permanent service; and
       ``(2) the bulk cargo carrying services described in 
     subsection (b).

     ``Sec. 50104. Studies of general maritime problems

       ``The Secretary of Transportation shall study all maritime 
     problems arising in carrying out the policy in section 50101 
     of this title.

     ``Sec. 50105. Studies and cooperation relating to the 
       construction of vessels

       ``(a) Relative Costs and New Designs.--The Secretary of 
     Transportation shall investigate, determine, and keep current 
     records of--
       ``(1) the relative cost of construction of comparable 
     vessels in the United States and in foreign countries; and
       ``(2) new designs, new methods of construction, and new 
     types of equipment for vessels.
       ``(b) Rules, Classifications, and Ratings.--The Secretary 
     shall examine the rules under which vessels are constructed 
     abroad and in the United States and the methods of 
     classifying and rating the vessels.
       ``(c) Collaboration With Owners and Builders.--The 
     Secretary shall collaborate with vessel owners and 
     shipbuilders in developing plans for the economical 
     construction of vessels and their propelling machinery, of 
     most modern economical types, giving thorough consideration 
     to all well-recognized means of propulsion and taking into 
     account the benefits from standardized production where 
     practicable and desirable.
       ``(d) Express-Liner and Super-Liner Vessels.--The Secretary 
     shall study and cooperate with vessel owners in devising 
     means by which there may be constructed, by or with the aid 
     of the United States Government, express-liner or super-liner 
     vessels comparable to those of other nations, especially with 
     a view to their use in a national emergency, and the use of 
     transoceanic aircraft service in connection with or in lieu 
     of those vessels.

     ``Sec. 50106. Studies on the operation of vessels

       ``(a) Relative Costs.--The Secretary of Transportation 
     shall investigate, determine, and keep current records of the 
     relative cost of marine insurance, maintenance, repairs, 
     wages and subsistence of officers and crews, and all other 
     items of expense, in the operation of comparable vessels 
     under the laws and regulations of the United States and those 
     of the foreign countries whose vessels are substantial 
     competitors of American vessels.
       ``(b) Shipyards.--The Secretary shall investigate, 
     determine, and keep current records of the number, location, 
     and efficiency of shipyards in the United States.
       ``(c) Navigation Laws.--The Secretary shall examine the 
     navigation laws and regulations of the United States and make 
     such recommendations to Congress as the Secretary considers 
     proper for the amendment, improvement, and revision of those 
     laws and for the development of the merchant marine of the 
     United States.

     ``Sec. 50107. Studies on marine insurance

       ``The Secretary of Transportation shall--
       ``(1) examine into the subject of marine insurance, the 
     number of companies in the United States, domestic and 
     foreign, engaging in marine insurance, the extent of the 
     insurance on hulls and cargoes placed or written in the 
     United States, and the extent of reinsurance of American 
     maritime risks in foreign companies; and
       ``(2) ascertain what steps may be necessary to develop an 
     ample marine insurance system as an aid in the development of 
     the merchant marine of the United States.

     ``Sec. 50108. Studies on cargo carriage and cargo containers

       ``(a) Studies.--The Secretary of Transportation shall 
     study--
       ``(1) the methods of encouraging the development and 
     implementation of new concepts for the carriage of cargo in 
     the domestic and foreign commerce of the United States; and
       ``(2) the economic and technological aspects of the use of 
     cargo containers as a method of carrying out the policy in 
     section 50101 of this title.
       ``(b) Restriction.--In carrying out subsection (a) and the 
     policy in section 50101 of this title, the United States 
     Government may not give preference as between carriers based 
     on the length, height, or width of cargo containers or the 
     length, height, or width of cargo container cells. This 
     restriction applies to all existing container vessels and any 
     container vessel to be constructed or rebuilt.

     ``Sec. 50109. Miscellaneous studies

       ``(a) Foreign Subsidies.--The Secretary of Transportation 
     shall investigate, determine, and keep current records of the 
     extent and character of the governmental aid and subsidies 
     granted by foreign governments to their merchant marine.
       ``(b) Laws Applicable to Aircraft.--The Secretary shall 
     investigate, determine, and keep current records of the 
     provisions of law relating to shipping that should be made 
     applicable to aircraft engaged in foreign commerce to further 
     the policy in section 50101 of this title, and any 
     appropriate legislation in this regard.

[[Page H7610]]

       ``(c) Aid for Cotton, Coal, Lumber, and Cement.--The 
     Secretary shall investigate, determine, and keep current 
     records of the advisability of enactment of suitable 
     legislation authorizing the Secretary, in an economic or 
     commercial emergency, to aid farmers and producers of cotton, 
     coal, lumber, and cement in any section of the United States 
     in the transportation and landing of their products in any 
     foreign port, which products can be carried in dry-cargo 
     vessels by reducing rates, by supplying additional tonnage to 
     any American operator, or by operation of vessels directly by 
     the Secretary, until the Secretary considers the special rate 
     reduction and operation unnecessary for the benefit of those 
     farmers and producers.
       ``(d) Intercoastal and Inland Water Transportation.--The 
     Secretary shall investigate, determine, and keep current 
     records of intercoastal and inland water transportation, 
     including their relation to transportation by land and air.
       ``(e) Obsolete Tonnage and Tramp Service.--The Secretary 
     shall make studies and reports to Congress on--
       ``(1) the scrapping or removal from service of old or 
     obsolete merchant tonnage owned by the United States 
     Government or in use in the merchant marine; and
       ``(2) tramp shipping service and the advisability of 
     citizens of the United States participating in that service 
     with vessels under United States registry.
       ``(f) Mortgage Loans.--The Secretary shall investigate the 
     legal status of mortgage loans on vessel property, with a 
     view to the means of improving the security of those loans 
     and of encouraging investment in American shipping.

     ``Sec. 50110. Securing preference to vessels of the United 
       States

       ``(a) Possibilities of Promoting Carriage.--The Secretary 
     of Transportation shall investigate, determine, and keep 
     current records of the possibilities of promoting the 
     carriage of United States foreign trade in vessels of the 
     United States.
       ``(b) Inducements to Importers and Exporters.--The 
     Secretary shall study and cooperate with vessel owners in 
     devising means by which the importers and exporters of the 
     United States can be induced to give preference to vessels of 
     the United States.
       ``(c) Liaison With Agencies and Organizations.--The 
     Secretary shall establish and maintain liaison with such 
     other agencies of the United States Government, and with such 
     representative trade organizations throughout the United 
     States, as may be concerned, directly or indirectly, with any 
     movement of commodities in the waterborne export and import 
     foreign commerce of the United States, for the purpose of 
     securing preference to vessels of the United States in the 
     shipment of those commodities.

     ``Sec. 50111. Reports to Congress

       ``(a) In General.--Not later than April 1 of each year, the 
     Secretary of Transportation shall submit a report to 
     Congress. The report shall include, with respect to 
     activities of the Secretary under this subtitle, the results 
     of investigations, a summary of transactions, a statement of 
     all expenditures and receipts, the purposes for which all 
     expenditures were made, and any recommendations for 
     legislation.
       ``(b) Administered and Oversight Funds.--The Secretary, in 
     the report under subsection (a) and in the annual budget 
     estimate for the Maritime Administration submitted to 
     Congress, shall state separately the amount, source, intended 
     use, and nature of any funds (other than funds appropriated 
     to the Administration or to the Secretary of Transportation 
     for use by the Administration) administered, or subject to 
     oversight, by the Administration.
       ``(c) Additional Recommendations for Legislation.--The 
     Secretary, from time to time, shall make recommendations to 
     Congress for legislation the Secretary considers necessary to 
     better achieve the objectives and policy of section 50101 of 
     this title.

     ``Sec. 50112. National Maritime Enhancement Institutes

       ``(a) Designation.--The Secretary of Transportation may 
     designate National Maritime Enhancement Institutes.
       ``(b) Activities.--Activities undertaken by an institute 
     may include--
       ``(1) conducting research about methods to improve the 
     performance of maritime industries;
       ``(2) enhancing the competitiveness of domestic maritime 
     industries in international trade;
       ``(3) forecasting trends in maritime trade;
       ``(4) assessing technological advancements;
       ``(5) developing management initiatives and training;
       ``(6) analyzing economic and operational impacts of 
     regulatory policies and international negotiations or 
     agreements pending before international bodies;
       ``(7) assessing the compatibility of domestic maritime 
     infrastructure systems with overseas transport systems;
       ``(8) fostering innovations in maritime transportation 
     pricing; and
       ``(9) improving maritime economics and finance.
       ``(c) Application for Designation.--An institution seeking 
     designation as a National Maritime Enhancement Institute 
     shall submit an application under regulations prescribed by 
     the Secretary.
       ``(d) Criteria for Designation.--The Secretary shall 
     designate an institute under this section on the basis of the 
     following criteria:
       ``(1) The demonstrated research and extension resources 
     available to the applicant for carrying out the activities 
     specified in subsection (b).
       ``(2) The ability of the applicant to provide leadership in 
     making national and regional contributions to the solution of 
     both long-range and immediate problems of the domestic 
     maritime industry.
       ``(3) The existence of an established program of the 
     applicant encompassing research and training directed to 
     enhancing maritime industries.
       ``(4) The demonstrated ability of the applicant to assemble 
     and evaluate pertinent information from national and 
     international sources and to disseminate results of maritime 
     industry research and educational programs through a 
     continuing education program.
       ``(5) The qualification of the applicant as a nonprofit 
     institution of higher learning.
       ``(e) Financial Awards.--The Secretary may make awards on 
     an equal matching basis to an institute designated under 
     subsection (a) from amounts appropriated. The aggregate 
     annual amount of the Federal share of the awards by the 
     Secretary may not exceed $500,000.
       ``(f) University Transportation Research Funds.--The 
     Secretary may make a grant under section 5505 of title 49 to 
     an institute designated under subsection (a) for maritime and 
     maritime intermodal research under that section as if the 
     institute were a university transportation center. In making 
     a grant, the Secretary, through the Research and Special 
     Programs Administration, shall advise the Maritime 
     Administration on the availability of funds for the grants 
     and consult with the Administration on making the grants.

     ``Sec. 50113. Use and performance reports by operators of 
       vessels

       ``(a) Filing Requirement.--The Secretary of Transportation 
     by regulation may require the operator of a vessel in the 
     waterborne foreign commerce of the United States to file such 
     report, account, record, or memorandum on the use and 
     performance of the vessel as the Secretary considers 
     desirable to assist in carrying out this subtitle. The 
     report, account, record, or memorandum shall be signed and 
     verified, and be filed at the times and in the manner, as 
     provided by regulation.
       ``(b) Civil Penalty.--An operator not filing a report, 
     account, record, or memorandum required by the Secretary 
     under this section is liable to the United States Government 
     for a civil penalty of $50 for each day of the violation. A 
     penalty imposed under this section on the operator of a 
     vessel constitutes a lien on the vessel involved in the 
     violation. A civil action in rem to enforce the lien may be 
     brought in the district court of the United States for any 
     district in which the vessel is found. The Secretary may 
     remit or mitigate any penalty imposed under this section.

                     ``CHAPTER 503--ADMINISTRATIVE

``Sec.
``50301.  Vessel Operations Revolving Fund.
``50302.  Port development.
``50303.  Operating property and extending term of notes.
``50304.  Sale and transfer of property.
``50305.  Appointment of trustee or receiver and operation of vessels.
``50306.  Requiring testimony and records in investigations.

     ``Sec. 50301. Vessel Operations Revolving Fund

       ``(a) In General.--There is a `Vessel Operations Revolving 
     Fund' for use by the Secretary of Transportation in carrying 
     out duties and powers related to vessel operations, including 
     charter, operation, maintenance, repair, reconditioning, and 
     improvement of merchant vessels under the jurisdiction of the 
     Secretary. The Fund has a working capital of $20,000,000, to 
     remain available until expended.
       ``(b) Relationship to Other Laws.--Notwithstanding any 
     other law, rates for shipping services provided under the 
     Fund shall be prescribed by the Secretary and the Fund shall 
     be credited with receipts from vessel operations conducted 
     under the Fund. Sections 1(a) and (c), 3(c), and 4 of the Act 
     of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 
     1294), apply to those operations and to seamen employed 
     through general agents as employees of the United States 
     Government. Notwithstanding any other law on the employment 
     of persons by the Government, the seamen may be employed in 
     accordance with customary commercial practices in the 
     maritime industry.
       ``(c) Advancements.--With the approval of the Director of 
     the Office of Management and Budget, the Secretary may 
     advance amounts the Secretary considers necessary, but not 
     more than 2 percent of vessel operating expenses, from the 
     Fund to the appropriation `Salaries and Expenses' in carrying 
     out duties and powers related to vessel operations, without 
     regard to the limitations on amounts stated in that 
     appropriation.
       ``(d) Transfers.--The unexpended balances of working funds 
     or of allocation accounts established after January 1, 1951, 
     for the activities provided for in subsection (a), and 
     receipts received from those activities, may be transferred 
     to the Fund, which shall be available for the purposes of 
     those working funds or allocation accounts.
       ``(e) Limitation.--
       ``(1) In general.--Amounts made available to the Secretary 
     for maritime activities by this section or any other law may 
     not be used to pay for a vessel described in paragraph (2) 
     unless the compensation to be paid is computed under section 
     56303 of this title as that section is interpreted by the 
     Comptroller General.
       ``(2) Applicable vessels.--Paragraph (1) applies to a 
     vessel--
       ``(A) the title to which is acquired by the Government by 
     requisition or purchase;
       ``(B) the use of which is taken by requisition or 
     agreement; or
       ``(C) lost while insured by the Government.
       ``(3) Nonapplicable vessels.--Paragraph (1) does not apply 
     to a vessel under a construction-differential subsidy 
     contract.
       ``(f) Availability for Additional Purposes.--The Fund is 
     available for--

[[Page H7611]]

       ``(1) necessary expenses incurred in the protection, 
     preservation, maintenance, acquisition, or use of vessels 
     involved in mortgage foreclosure or forfeiture proceedings 
     instituted by the Government, including payment of prior 
     claims and liens, expenses of sale, or other related charges;
       ``(2) necessary expenses incident to the redelivery and 
     lay-up, in the United States, of vessels chartered as of June 
     20, 1956, under agreements not calling for their return to 
     the Government;
       ``(3) the activation, repair, and deactivation of merchant 
     vessels chartered for limited emergency purposes during 
     fiscal year 1957 under the jurisdiction of the Secretary; and
       ``(4) payment of expenses of custody and maintenance of 
     Government-owned vessels not in the National Defense Reserve 
     Fleet.
       ``(g) Expenses and Receipts Related to Charter 
     Operations.--The Fund is available for expenses incurred in 
     activating, repairing, and deactivating merchant vessels 
     chartered under the jurisdiction of the Secretary. Receipts 
     from charter operations of Government-owned vessels under the 
     jurisdiction of the Secretary shall be credited to the Fund.

     ``Sec. 50302. Port development

       ``(a) General Requirements.--With the objective of 
     promoting, encouraging, and developing ports and 
     transportation facilities in connection with water commerce 
     over which the Secretary of Transportation has jurisdiction, 
     the Secretary, in cooperation with the Secretary of the Army, 
     shall--
       ``(1) investigate territorial regions and zones tributary 
     to ports, taking into consideration the economies of 
     transportation by rail, water, and highway and the natural 
     direction of the flow of commerce;
       ``(2) investigate the causes of congestion of commerce at 
     ports and applicable remedies;
       ``(3) investigate the subject of water terminals, including 
     the necessary docks, warehouses, and equipment, to devise and 
     suggest the types most appropriate for different locations 
     and for the most expeditious and economical transfer or 
     interchange of passengers or property between water carriers 
     and rail carriers;
       ``(4) consult with communities on the appropriate location 
     and plan of construction of wharves, piers, and water 
     terminals;
       ``(5) investigate the practicability and advantages of 
     harbor, river, and port improvements in connection with 
     foreign and coastwise trade; and
       ``(6) investigate any other matter that may tend to promote 
     and encourage the use by vessels of ports adequate to care 
     for the freight that naturally would pass through those 
     ports.
       ``(b) Submission of Findings to Surface Transportation 
     Board.--After an investigation under subsection (a), if the 
     Secretary of Transportation believes that the rates or 
     practices of a rail carrier subject to the jurisdiction of 
     the Surface Transportation Board are detrimental to the 
     objective specified in subsection (a), or that new rates or 
     practices, new or additional port terminal facilities, or 
     affirmative action by a rail carrier is necessary to promote 
     that objective, the Secretary may submit findings to the 
     Board for action the Board considers appropriate under 
     existing law.

     ``Sec. 50303. Operating property and extending term of notes

       ``(a) General Authority.--The Secretary of Transportation 
     may--
       ``(1) operate or lease docks, wharves, piers, or real 
     property under the Secretary's control; and
       ``(2) make extensions and accept renewals of--
       ``(A) promissory notes and other evidences of indebtedness 
     on property; and
       ``(B) mortgages and other contracts securing the property.
       ``(b) Terms of Transactions.--A transaction under 
     subsection (a) shall be on terms the Secretary considers 
     necessary to carry out the purposes of this subtitle, but 
     consistent with sound business practice.
       ``(c) Availability of Amounts.--Amounts received by the 
     Secretary from a transaction under this section are available 
     for expenditure by the Secretary as provided in this 
     subtitle.

     ``Sec. 50304. Sale and transfer of property

       ``(a) Authority To Sell.--The Secretary of Transportation 
     may sell property (other than vessels transferred under 
     section 4 of the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 
     990)) on terms the Secretary considers appropriate.
       ``(b) Transfers From Military to Civilian Control.--When 
     the President considers it in the interest of the United 
     States, the President may transfer to the Secretary of 
     Transportation possession and control of property described 
     in the second paragraph of section 17 of the Merchant Marine 
     Act, 1920 (ch. 250, 41 Stat. 994), as originally enacted, 
     that is possessed and controlled by the Secretary of a 
     military department.
       ``(c) Transfers From Civilian to Military Control.--When 
     the President considers it necessary, the President by 
     executive order may transfer to the Secretary of a military 
     department possession and control of property described in 
     section 17 of the Merchant Marine Act, 1920 (ch. 250, 41 
     Stat. 994), as originally enacted, that is possessed and 
     controlled by the Secretary of Transportation. The 
     President's order shall state the need for the transfer and 
     the period of the need. When the President decides that the 
     need has ended, the possession and control shall revert to 
     the Secretary of Transportation. The property may not be sold 
     except as provided by law.

     ``Sec. 50305. Appointment of trustee or receiver and 
       operation of vessels

       ``(a) Appointment of Trustees and Receivers.--
       ``(1) Appointment of secretary.--In a proceeding in a court 
     of the United States in which a trustee or receiver may be 
     appointed for a corporation operating a vessel of United 
     States registry between the United States and a foreign 
     country, on which the United States Government holds a 
     mortgage, the court may appoint the Secretary of 
     Transportation as the sole trustee or receiver (subject to 
     the direction of the court) if--
       ``(A) the court finds that the appointment will--
       ``(i) inure to the advantage of the estate and the parties 
     in interest; and
       ``(ii) tend to carry out the purposes of this subtitle; and
       ``(B) the Secretary expressly consents to the appointment.
       ``(2) Appointment of other person.--The appointment of 
     another person as trustee or receiver without a hearing 
     becomes effective when ratified by the Secretary, but the 
     Secretary may demand a hearing.
       ``(b) Operation of Vessels.--
       ``(1) In general.--If the court is unwilling to allow the 
     trustee or receiver to operate the vessel in foreign commerce 
     without financial aid from the Government pending termination 
     of the proceeding, and the Secretary certifies to the court 
     that the continued operation of the vessel is essential to 
     the foreign commerce of the United States and is reasonably 
     calculated to carry out the purposes of this subtitle, the 
     court may allow the Secretary to operate the vessel, either 
     directly or through a managing agent or operator employed by 
     the Secretary. The Secretary must agree to comply with terms 
     imposed by the court sufficient to protect the parties in 
     interest. The Secretary also must agree to pay all operating 
     losses resulting from the operation. The operation shall be 
     for the account of the trustee or receiver.
       ``(2) Payment of operating losses and other amounts.--The 
     Secretary has no claim against the corporation, its estate, 
     or its assets for operating losses paid by the Secretary, but 
     the Secretary may pay amounts for depreciation the Secretary 
     considers reasonable and other amounts the court considers 
     just. The payment of operating losses and the other amounts 
     and compliance with terms imposed by the court shall be in 
     satisfaction of any claim against the Secretary resulting 
     from the operation of the vessel.
       ``(3) Deemed operation by government.--A vessel operated by 
     the Secretary under this subsection is deemed to be a vessel 
     operated by the Government under chapter 309 of this title.

     ``Sec. 50306. Requiring testimony and records in 
       investigations

       ``(a) In General.--In conducting an investigation that the 
     Secretary of Transportation considers necessary and proper to 
     carry out this subtitle, the Secretary may administer oaths, 
     take evidence, and subpoena persons to testify and produce 
     documents relevant to the matter under investigation. Persons 
     may be required to attend or produce documents from any place 
     in the United States at any designated place of hearing.
       ``(b) Fees and Mileage.--Persons subpoenaed by the 
     Secretary under subsection (a) shall be paid the same fees 
     and mileage paid to witnesses in the courts of the United 
     States.
       ``(c) Enforcement of Subpoenas.--If a person disobeys a 
     subpoena issued under subsection (a), the Secretary may seek 
     an order enforcing the subpoena from the district court of 
     the United States for the district in which the person 
     resides or does business. Process may be served in the 
     judicial district in which the person resides or is found. 
     The court may issue an order to obey the subpoena and punish 
     a refusal to obey as a contempt of court.

                ``CHAPTER 505--OTHER GENERAL PROVISIONS

``Sec.
``50501.  Entities deemed citizens of the United States.
``50502.  Applicability to receivers, trustees, successors, and 
              assigns.
``50503.  Oceanographic research vessels.
``50504.  Sailing school vessels.

     ``Sec. 50501. Entities deemed citizens of the United States

       ``(a) In General.--In this subtitle, a corporation, 
     partnership, or association is deemed to be a citizen of the 
     United States only if the controlling interest is owned by 
     citizens of the United States. However, if the corporation, 
     partnership, or association is operating a vessel in the 
     coastwise trade, at least 75 percent of the interest must be 
     owned by citizens of the United States.
       ``(b) Additional Requirements for Corporations.--In this 
     subtitle, a corporation is deemed to be a citizen of the 
     United States only if, in addition to satisfying the 
     requirements in subsection (a)--
       ``(1) it is incorporated under the laws of the United 
     States or a State;
       ``(2) its chief executive officer, by whatever title, and 
     the chairman of its board of directors are citizens of the 
     United States; and
       ``(3) no more of its directors are noncitizens than a 
     minority of the number necessary to constitute a quorum.
       ``(c) Determination of Controlling Corporate Interest.--The 
     controlling interest in a corporation is owned by citizens of 
     the United States under subsection (a) only if--
       ``(1) title to the majority of the stock in the corporation 
     is vested in citizens of the United States free from any 
     trust or fiduciary obligation in favor of a person not a 
     citizen of the United States;
       ``(2) the majority of the voting power in the corporation 
     is vested in citizens of the United States;
       ``(3) there is no contract or understanding by which the 
     majority of the voting power in the corporation may be 
     exercised, directly or indirectly, in behalf of a person not 
     a citizen of the United States; and

[[Page H7612]]

       ``(4) there is no other means by which control of the 
     corporation is given to or permitted to be exercised by a 
     person not a citizen of the United States.
       ``(d) Determination of 75 Percent Corporate Interest.--At 
     least 75 percent of the interest in a corporation is owned by 
     citizens of the United States under subsection (a) only if--
       ``(1) title to at least 75 percent of the stock in the 
     corporation is vested in citizens of the United States free 
     from any trust or fiduciary obligation in favor of a person 
     not a citizen of the United States;
       ``(2) at least 75 percent of the voting power in the 
     corporation is vested in citizens of the United States;
       ``(3) there is no contract or understanding by which more 
     than 25 percent of the voting power in the corporation may be 
     exercised, directly or indirectly, in behalf of a person not 
     a citizen of the United States; and
       ``(4) there is no other means by which control of more than 
     25 percent of any interest in the corporation is given to or 
     permitted to be exercised by a person not a citizen of the 
     United States.

     ``Sec. 50502. Applicability to receivers, trustees, 
       successors, and assigns

       ``This subtitle applies to receivers, trustees, successors, 
     and assigns of any person to whom this subtitle applies.

     ``Sec. 50503. Oceanographic research vessels

       ``An oceanographic research vessel (as defined in section 
     2101 of this title) is deemed not to be engaged in trade or 
     commerce.

     ``Sec. 50504. Sailing school vessels

       ``(a) Definitions.--In this section, the terms `sailing 
     school instructor', `sailing school student', and `sailing 
     school vessel' have the meaning given those terms in section 
     2101 of this title.
       ``(b) Not Seamen.--A sailing school student or sailing 
     school instructor is deemed not to be a seaman under--
       ``(1) parts B, F, and G of subtitle II of this title; or
       ``(2) the maritime law doctrines of maintenance and cure or 
     warranty of seaworthiness.
       ``(c) Not Merchant Vessel or Engaged in Trade or 
     Commerce.--A sailing school vessel is deemed not to be--
       ``(1) a merchant vessel under section 11101(a)-(c) of this 
     title; or
       ``(2) a vessel engaged in trade or commerce.
       ``(d) Evidence of Financial Responsibility.--The owner or 
     charterer of a sailing school vessel shall maintain evidence 
     of financial responsibility to meet liability for death or 
     injury to sailing school students and sailing school 
     instructors on a voyage on the vessel. The amount of 
     financial responsibility shall be at least $50,000 for each 
     student and instructor. Financial responsibility under this 
     subsection may be evidenced by insurance or other adequate 
     financial resources.

                   ``Part B--Merchant Marine Service

                         ``CHAPTER 511--GENERAL

``Sec.
``51101.  Policy.
``51102.  Definitions.
``51103.  General authority of Secretary of Transportation.
``51104.  General authority of Secretary of the Navy.

     ``Sec. 51101. Policy

       ``It is the policy of the United States Government that 
     merchant marine vessels of the United States should be 
     operated by highly trained and efficient citizens of the 
     United States and that the United States Navy and the 
     merchant marine of the United States should work closely 
     together to promote the maximum integration of the total 
     seapower forces of the United States.

     ``Sec. 51102. Definitions

       ``In this part:
       ``(1) Academy.--The term `Academy' means the United States 
     Merchant Marine Academy located at Kings Point, New York, and 
     maintained under chapter 513 of this title.
       ``(2) Cost of education provided.--The term `cost of 
     education provided' means the financial costs incurred by the 
     United States Government for providing training or financial 
     assistance to students at the Academy and the State maritime 
     academies, including direct financial assistance, room, 
     board, classroom academics, and other training activities.
       ``(3) Merchant marine officer.--The term `merchant marine 
     officer' means an individual issued a license by the Coast 
     Guard authorizing service as--
       ``(A) a master, mate, or pilot on a documented vessel 
     that--
       ``(i) is of at least 1,000 gross tons as measured under 
     section 14502 of this title or an alternate tonnage measured 
     under section 14302 of this title as prescribed by the 
     Secretary under section 14104 of this title; and
       ``(ii) operates on the oceans or the Great Lakes; or
       ``(B) an engineer officer on a documented vessel propelled 
     by machinery of at least 4,000 horsepower.
       ``(4) State maritime academy.--The term `State maritime 
     academy' means--
       ``(A) a State maritime academy or college sponsored by a 
     State and assisted under chapter 515 of this title; and
       ``(B) a regional maritime academy or college sponsored by a 
     group of States and assisted under chapter 515 of this title.

     ``Sec. 51103. General authority of Secretary of 
       Transportation

       ``(a) Education and Training.--The Secretary of 
     Transportation may provide for the education and training of 
     citizens of the United States for the safe and efficient 
     operation of the merchant marine of the United States at all 
     times, including operation as a naval and military auxiliary 
     in time of war or national emergency.
       ``(b) Surplus Property for Instructional Purposes.--
       ``(1) In general.--The Secretary may cooperate with and 
     assist the institutions named in paragraph (2) by making 
     vessels, shipboard equipment, and other marine equipment, 
     owned by the United States Government and determined to be 
     excess or surplus, available to those institutions for 
     instructional purposes, by gift, loan, sale, lease, or 
     charter on terms the Secretary considers appropriate.
       ``(2) Institutions.--The institutions referred to in 
     paragraph (1) are--
       ``(A) the United States Merchant Marine Academy;
       ``(B) a State maritime academy; and
       ``(C) a nonprofit training institution jointly approved by 
     the Secretary of Transportation and the Secretary of the 
     department in which the Coast Guard is operating as offering 
     training courses that meet Federal regulations for maritime 
     training.
       ``(c) Assistance From Other Agencies.--
       ``(1) In general.--The Secretary of Transportation may 
     secure directly from an agency, on a reimbursable basis, 
     information, facilities, and equipment necessary to carry out 
     this part.
       ``(2) Detailing personnel.--At the request of the 
     Secretary, the head of an agency (including a military 
     department) may detail, on a reimbursable basis, personnel 
     from the agency to the Secretary to assist in carrying out 
     this part.
       ``(d) Academy Personnel.--To carry out this part, the 
     Secretary may--
       ``(1) employ an individual as a professor, lecturer, or 
     instructor at the Academy, without regard to the provisions 
     of title 5 governing appointments in the competitive service; 
     and
       ``(2) pay the individual without regard to chapter 51 and 
     subchapter III of chapter 53 of title 5.

     ``Sec. 51104. General authority of Secretary of the Navy

       ``The Secretary of the Navy, in cooperation with the 
     Maritime Administrator and the head of each State maritime 
     academy, shall ensure that--
       ``(1) the training of future merchant marine officers at 
     the United States Merchant Marine Academy and at State 
     maritime academies includes programs for naval science 
     training in the operation of merchant vessels as a naval and 
     military auxiliary; and
       ``(2) naval officer training programs for future officers, 
     insofar as possible, are maintained at designated maritime 
     academies consistent with Navy standards and needs.

          ``CHAPTER 513--UNITED STATES MERCHANT MARINE ACADEMY

``Sec.
``51301.  Maintenance of the Academy.
``51302.  Nomination and competitive appointment of cadets.
``51303.  Non-competitive appointments.
``51304.  Additional appointments from particular areas.
``51305.  Prohibited basis for appointment.
``51306.  Cadet commitment agreements.
``51307.  Places of training.
``51308.  Uniforms, textbooks, and transportation allowances.
``51309.  Academic degree.
``51310.  Deferment of service obligation under cadet commitment 
              agreements.
``51311.  Midshipman status in the Naval Reserve.
``51312.  Board of Visitors.
``51313.  Advisory Board.

     ``Sec. 51301. Maintenance of the Academy

       ``The Secretary of Transportation shall maintain the United 
     States Merchant Marine Academy to provide instruction to 
     individuals to prepare them for service in the merchant 
     marine of the United States.

     ``Sec. 51302. Nomination and competitive appointment of 
       cadets

       ``(a) Requirements.--An individual may be nominated for a 
     competitive appointment as a cadet at the United States 
     Merchant Marine Academy only if the individual--
       ``(1) is a citizen or national of the United States; and
       ``(2) meets the minimum requirements that the Secretary of 
     Transportation shall establish.
       ``(b) Nominators.--Nominations for competitive appointments 
     for the positions allocated under subsection (c) may be made 
     as follows:
       ``(1) A Senator may nominate residents of the State 
     represented by that Senator.
       ``(2) A Member of the House of Representatives may nominate 
     residents of the State in which the congressional district 
     represented by that Member is located.
       ``(3) A Delegate to the House of Representatives from the 
     District of Columbia, the Virgin Islands, Guam, or American 
     Samoa may nominate residents of the jurisdiction represented 
     by that Delegate.
       ``(4) The Resident Commissioner to the United States from 
     Puerto Rico may nominate residents of Puerto Rico.
       ``(5) The Governor of the Northern Mariana Islands may 
     nominate residents of the Northern Mariana Islands.
       ``(6) The Panama Canal Commission may nominate--
       ``(A) residents, or sons or daughters of residents, of an 
     area or installation in Panama and made available to the 
     United States under the Panama Canal Treaty of 1977, the 
     agreements relating to and implementing that Treaty, signed 
     September 7, 1977, and the Agreement Between the United 
     States of America and the Republic of Panama Concerning Air 
     Traffic Control and Related Services, concluded January 8, 
     1979; and
       ``(B) sons or daughters of personnel of the United States 
     Government and the Panama Canal Commission residing in 
     Panama.

[[Page H7613]]

       ``(c) Allocation of Positions.--Positions for competitive 
     appointments shall be allocated each year as follows:
       ``(1) Positions shall be allocated for residents of each 
     State nominated by the Members of Congress from that State in 
     proportion to the representation in Congress from that State.
       ``(2) Four positions shall be allocated for residents of 
     the District of Columbia nominated by the Delegate to the 
     House of Representatives from the District of Columbia.
       ``(3) One position each shall be allocated for residents of 
     the Virgin Islands, Guam, and American Samoa nominated by the 
     Delegates to the House of Representatives from the Virgin 
     Islands, Guam, and American Samoa, respectively.
       ``(4) One position shall be allocated for a resident of 
     Puerto Rico nominated by the Resident Commissioner to the 
     United States from Puerto Rico.
       ``(5) One position shall be allocated for a resident of the 
     Northern Mariana Islands nominated by the Governor of the 
     Northern Mariana Islands.
       ``(6) Two positions shall be allocated for individuals 
     nominated by the Panama Canal Commission.
       ``(d) Competitive System for Appointment.--
       ``(1) Establishment of system.--The Secretary shall 
     establish a competitive system for selecting individuals 
     nominated under subsection (b) to fill the positions 
     allocated under subsection (c). The system must determine the 
     relative merit of each individual based on competitive 
     examinations, an assessment of the individual's academic 
     background, and other effective indicators of motivation and 
     probability of successful completion of training at the 
     Academy.
       ``(2) Appointments by jurisdiction.--The Secretary shall 
     appoint individuals to fill the positions allocated under 
     subsection (c) for each jurisdiction in the order of merit of 
     the individuals nominated from that jurisdiction.
       ``(3) Remaining unfilled positions.--If positions remain 
     unfilled after the appointments are made under paragraph (2), 
     the Secretary shall appoint individuals to fill the positions 
     in the order of merit of the remaining individuals nominated 
     from all jurisdictions.

     ``Sec. 51303. Non-competitive appointments

       ``The Secretary of Transportation may appoint each year 
     without competition as cadets at the United States Merchant 
     Marine Academy not more than 40 qualified individuals with 
     qualities the Secretary considers to be of special value to 
     the Academy. In making these appointments, the Secretary 
     shall try to achieve a national demographic balance at the 
     Academy.

     ``Sec. 51304. Additional appointments from particular areas

       ``(a) Other Countries in Western Hemisphere.--The President 
     may appoint individuals from countries in the Western 
     Hemisphere other than the United States to receive 
     instruction at the United States Merchant Marine Academy. Not 
     more than 12 individuals may receive instruction under this 
     subsection at the same time, and not more than 2 individuals 
     from the same country may receive instruction under this 
     subsection at the same time.
       ``(b) Other Countries Generally.--
       ``(1) Appointment.--The Secretary of Transportation, with 
     the approval of the Secretary of State, may appoint 
     individuals from countries other than the United States to 
     receive instruction at the Academy. Not more than 30 
     individuals may receive instruction under this subsection at 
     the same time.
       ``(2) Reimbursement.--The Secretary of Transportation shall 
     ensure that the country from which an individual comes under 
     this subsection will reimburse the Secretary for the cost (as 
     determined by the Secretary) of the instruction and 
     allowances received by the individual.
       ``(c) Panama.--
       ``(1) Appointment.--The Secretary of Transportation, with 
     the approval of the Secretary of State, may appoint 
     individuals from Panama to receive instruction at the 
     Academy. Individuals appointed under this subsection are in 
     addition to those appointed under any other provision of this 
     chapter.
       ``(2) Reimbursement.--The Secretary of Transportation shall 
     be reimbursed for the cost (as determined by the Secretary) 
     of the instruction and allowances received by an individual 
     appointed under this subsection.
       ``(d) Allowances and Regulations.--Individuals receiving 
     instruction under this section are entitled to the same 
     allowances and are subject to the same regulations on 
     admission, attendance, discipline, resignation, discharge, 
     dismissal, and graduation, as cadets at the Academy appointed 
     from the United States.

     ``Sec. 51305. Prohibited basis for appointment

       ``Preference may not be given to an individual for 
     appointment as a cadet at the United States Merchant Marine 
     Academy because one or more members of the individual's 
     immediate family are alumni of the Academy.

     ``Sec. 51306. Cadet commitment agreements

       ``(a) Agreement Requirements.--A citizen of the United 
     States appointed as a cadet at the United States Merchant 
     Marine Academy must sign, as a condition of the appointment, 
     an agreement to--
       ``(1) complete the course of instruction at the Academy;
       ``(2) fulfill the requirements for a license as an officer 
     in the merchant marine of the United States before graduation 
     from the Academy;
       ``(3) maintain a valid license as an officer in the 
     merchant marine of the United States for at least 6 years 
     after graduation from the Academy, accompanied by the 
     appropriate national and international endorsements and 
     certification required by the Coast Guard for service aboard 
     vessels on domestic and international voyages;
       ``(4) apply for, and accept if tendered, an appointment as 
     a commissioned officer in the Naval Reserve (including the 
     Merchant Marine Reserve, Naval Reserve), the Coast Guard 
     Reserve, or any other reserve unit of an armed force of the 
     United States, and, if tendered the appointment, to serve for 
     at least 6 years after graduation from the Academy;
       ``(5) serve the foreign and domestic commerce and the 
     national defense of the United States for at least 5 years 
     after graduation from the Academy--
       ``(A) as a merchant marine officer on a documented vessel 
     or a vessel owned and operated by the United States 
     Government or by a State;
       ``(B) as an employee in a United States maritime-related 
     industry, profession, or marine science (as determined by the 
     Secretary of Transportation), if the Secretary determines 
     that service under subclause (A) is not available to the 
     individual;
       ``(C) as a commissioned officer on active duty in an armed 
     force of the United States, as a commissioned officer in the 
     National Oceanic and Atmospheric Administration, or in other 
     maritime-related Federal employment which serves the national 
     security interests of the United States, as determined by the 
     Secretary; or
       ``(D) by a combination of the service alternatives referred 
     to in subclauses (A)-(C); and
       ``(6) report to the Secretary on compliance with this 
     subsection.
       ``(b) Failure To Complete Course of Instruction.--
       ``(1) Active duty.--If the Secretary of Transportation 
     determines that an individual who has attended the Academy 
     for at least 2 years has failed to fulfill the part of the 
     agreement described in subsection (a)(1), the individual may 
     be ordered by the Secretary of Defense to serve on active 
     duty in one of the armed forces of the United States for a 
     period of not more than 2 years. In cases of hardship as 
     determined by the Secretary of Transportation, the Secretary 
     of Transportation may waive this paragraph in whole or in 
     part.
       ``(2) Recovery of cost.--If the Secretary of Defense is 
     unable or unwilling to order an individual to serve on active 
     duty under paragraph (1), or if the Secretary of 
     Transportation determines that reimbursement of the cost of 
     education provided would better serve the interests of the 
     United States, the Secretary of Transportation may recover 
     from the individual the cost of education provided by the 
     Government.
       ``(c) Failure To Carry Out Other Requirements.--
       ``(1) Active duty.--If the Secretary of Transportation 
     determines that an individual has failed to fulfill any part 
     of the agreement described in subsection (a)(2)-(6), the 
     individual may be ordered to serve on active duty for a 
     period of at least 3 years but not more than the unexpired 
     period (as determined by the Secretary) of the service 
     required by subsection (a)(5). The Secretary of 
     Transportation, in consultation with the Secretary of 
     Defense, shall determine in which service the individual 
     shall serve. In cases of hardship as determined by the 
     Secretary of Transportation, the Secretary of Transportation 
     may waive this paragraph in whole or in part.
       ``(2) Recovery of cost.--If the Secretary of Defense is 
     unable or unwilling to order an individual to serve on active 
     duty under paragraph (1), or if the Secretary of 
     Transportation determines that reimbursement of the cost of 
     education provided would better serve the interests of the 
     United States, the Secretary of Transportation may recover 
     from the individual the cost of education provided. The 
     Secretary may reduce the amount to be recovered to reflect 
     partial performance of service obligations and other factors 
     the Secretary determines merit a reduction.
       ``(d) Actions To Recover Cost.--To aid in the recovery of 
     the cost of education provided by the Government under a 
     commitment agreement under this section, the Secretary of 
     Transportation may--
       ``(1) request the Attorney General to bring a civil action 
     against the individual; and
       ``(2) make use of the Federal debt collection procedures in 
     chapter 176 of title 28 or other applicable administrative 
     remedies.

     ``Sec. 51307. Places of training

       ``The Secretary of Transportation may provide for the 
     training of cadets at the United States Merchant Marine 
     Academy--
       ``(1) on vessels owned or subsidized by the United States 
     Government;
       ``(2) on other documented vessels, with the permission of 
     the owner; and
       ``(3) in shipyards or plants and with industrial or 
     educational organizations.

     ``Sec. 51308. Uniforms, textbooks, and transportation 
       allowances

       ``The Secretary of Transportation shall provide cadets at 
     the United States Merchant Marine Academy--
       ``(1) all required uniforms and textbooks; and
       ``(2) allowances for transportation (including 
     reimbursement of traveling expenses) when traveling under 
     orders as a cadet.

     ``Sec. 51309. Academic degree

       ``(a) Bachelor's Degree.--
       ``(1) In general.--The Superintendent of the United States 
     Merchant Marine Academy may confer the degree of bachelor of 
     science on an individual who--
       ``(A) has met the conditions prescribed by the Secretary of 
     Transportation; and
       ``(B) if a citizen of the United States, has passed the 
     examination for a merchant marine officer's license.
       ``(2) Effect of physical disqualification.--An individual 
     not allowed to take the examination for a merchant marine 
     officer's license only

[[Page H7614]]

     because of physical disqualification may not be denied a 
     degree for not taking the examination.
       ``(b) Master's Degree.--The Superintendent of the Academy 
     may confer a master's degree on an individual who has met the 
     conditions prescribed by the Secretary. A master's degree 
     program may be funded through non-appropriated funds. To 
     maintain the appropriate academic standards, the program 
     shall be accredited by the appropriate accreditation body. 
     The Secretary may prescribe regulations necessary to 
     administer such a program.
       ``(c) Graduation Not Entitlement To Hold License.--
     Graduation from the Academy does not entitle an individual to 
     hold a license authorizing service on a merchant vessel.

     ``Sec. 51310. Deferment of service obligation under cadet 
       commitment agreements

       ``The Secretary of Transportation may defer the service 
     commitment of an individual under section 51306(a)(5) of this 
     title (as specified in the cadet commitment agreement) for 
     not more than 2 years if the individual is engaged in a 
     graduate course of study approved by the Secretary. However, 
     deferment of service as a commissioned officer under section 
     51306(a)(5) must be approved by the Secretary of the military 
     department that has jurisdiction over the service or by the 
     Secretary of Commerce for service with the National Oceanic 
     and Atmospheric Administration.

     ``Sec. 51311. Midshipman status in the Naval Reserve

       ``(a) Application Requirement.--Before being appointed as a 
     cadet at the United States Merchant Marine Academy, a citizen 
     of the United States must agree to apply for midshipman 
     status in the Naval Reserve (including the Merchant Marine 
     Reserve, Naval Reserve).
       ``(b) Appointment.--
       ``(1) In general.--A citizen of the United States appointed 
     as a cadet at the Academy shall be appointed by the Secretary 
     of the Navy as a midshipman in the Naval Reserve (including 
     the Merchant Marine Reserve, Naval Reserve).
       ``(2) Rights and privileges.--The Secretary of the Navy 
     shall provide for cadets of the Academy who are midshipmen in 
     the United States Naval Reserve to be--
       ``(A) issued an identification card (referred to as a 
     `military ID card'); and
       ``(B) entitled to all rights and privileges in accordance 
     with the same eligibility criteria as apply to other members 
     of the Ready Reserve of the reserve components of the armed 
     forces.
       ``(3) Coordination.--The Secretary of the Navy shall carry 
     out paragraphs (1) and (2) in coordination with the Secretary 
     of Transportation.

     ``Sec. 51312. Board of Visitors

       ``(a) In General.--A Board of Visitors to the United States 
     Merchant Marine Academy shall be established, for a term of 2 
     years commencing at the beginning of each Congress, to visit 
     the Academy annually on a date determined by the Secretary of 
     Transportation and to make recommendations on the operation 
     of the Academy.
       ``(b) Appointment.--
       ``(1) In general.--The Board shall be composed of--
       ``(A) 2 Senators appointed by the chairman of the Committee 
     on Commerce, Science, and Transportation of the Senate;
       ``(B) 3 Members of the House of Representatives appointed 
     by the chairman of the Committee on Armed Services of the 
     House of Representatives;
       ``(C) 1 Senator appointed by the Vice President;
       ``(D) 2 Members of the House of Representatives appointed 
     by the Speaker of the House of Representatives; and
       ``(E) the chairmen of the Committee on Commerce, Science, 
     and Transportation of the Senate and the Committee on Armed 
     Services of the House of Representatives, as ex officio 
     members.
       ``(2) Substitute appointment.--If an appointed member of 
     the Board is unable to visit the Academy as provided in 
     subsection (a), another individual may be appointed as a 
     substitute in the manner provided in paragraph (1).
       ``(c) Staff.--The chairmen of the Committee on Commerce, 
     Science, and Transportation of the Senate and the Committee 
     on Armed Services of the House of Representatives may 
     designate staff members of their committees to serve without 
     reimbursement as staff for the Board.
       ``(d) Travel Expenses.--When serving away from home or 
     regular place of business, a member of the Board or a staff 
     member designated under subsection (c) shall be allowed 
     travel expenses, including per diem in lieu of subsistence, 
     as authorized by section 5703 of title 5.

     ``Sec. 51313. Advisory Board

       ``(a) In General.--An Advisory Board to the United States 
     Merchant Marine Academy shall be established to visit the 
     Academy at least once during each academic year, for the 
     purpose of examining the course of instruction and management 
     of the Academy and advising the Maritime Administrator and 
     the Superintendent of the Academy.
       ``(b) Appointment and Terms.--The Board shall be composed 
     of not more than 7 individuals appointed by the Secretary of 
     Transportation. The individuals must be distinguished in 
     education and other fields related to the Academy. Members of 
     the Board shall be appointed for terms of not more than 3 
     years and may be reappointed. The Secretary shall designate 
     one of the members as chairman.
       ``(c) Travel Expenses.--When serving away from home or 
     regular place of business, a member of the Board shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, as authorized by section 5703 of title 5.
       ``(d) Relationship to Other Law.--The Federal Advisory 
     Committee Act (5 App. U.S.C.) does not apply to the Board.

         ``CHAPTER 515--STATE MARITIME ACADEMY SUPPORT PROGRAM

``Sec.
``51501.  General support program.
``51502.  Detailing of personnel.
``51503.  Regional maritime academies.
``51504.  Use of training vessels.
``51505.  Annual payments for maintenance and support.
``51506.  Conditions to receiving payments and use of vessels.
``51507.  Places of training.
``51508.  Allowances for students.
``51509.  Student incentive payment agreements.
``51510.  Deferment of service obligation under student incentive 
              payment agreements.
``51511.  Midshipman status in the Naval Reserve.

     ``Sec. 51501. General support program

       ``(a) Assistance to State Maritime Academies.--The 
     Secretary of Transportation shall cooperate with and assist 
     State maritime academies in providing instruction to 
     individuals to prepare them for service in the merchant 
     marine of the United States.
       ``(b) Course Development.--The Secretary shall provide to 
     each State maritime academy guidance and assistance in 
     developing courses on the operation and maintenance of new 
     vessels, on equipment, and on innovations being introduced to 
     the merchant marine of the United States.

     ``Sec. 51502. Detailing of personnel

       ``At the request of the Governor of a State, the President 
     may detail, without reimbursement, personnel of the Navy, the 
     Coast Guard, and the Maritime Service to a State maritime 
     academy to serve as a superintendent, professor, lecturer, or 
     instructor at the academy.

     ``Sec. 51503. Regional maritime academies

       ``The Governors of the States cooperating to sponsor a 
     regional maritime academy shall designate in writing one of 
     those States to conduct the affairs of that academy. A 
     regional maritime academy is eligible for assistance from the 
     United States Government on the same basis as a State 
     maritime academy sponsored by a single State.

     ``Sec. 51504. Use of training vessels

       ``(a) Applications To Use Vessels.--The Governor of a State 
     sponsoring a State maritime academy (or the Governor of the 
     State designated to conduct the affairs of a regional 
     maritime academy) may apply in writing to the Secretary of 
     Transportation to obtain the use of a training vessel for the 
     academy. A vessel provided under this section remains the 
     property of the United States Government.
       ``(b) General Authority.--Subject to subsection (c), the 
     Secretary may provide to a State maritime academy, for use as 
     a training vessel, a suitable vessel under the control of the 
     Secretary or made available to the Secretary under subsection 
     (e). If a suitable vessel is not available, the Secretary may 
     build and provide a suitable vessel.
       ``(c) Approval Requirements.--The Secretary may provide a 
     vessel under this section only if--
       ``(1) an application has been made under subsection (a);
       ``(2) the State maritime academy satisfies section 51506(a) 
     of this title; and
       ``(3) a suitable port will be available for the safe 
     mooring of the vessel while the academy is using the vessel.
       ``(d) Preparation and Maintenance.--A vessel provided under 
     this section shall be--
       ``(1) repaired, reconditioned, and equipped (with all 
     apparel, charts, books, and instruments of navigation) as 
     necessary for use as a training vessel; and
       ``(2) maintained in good repair by the Secretary.
       ``(e) Agency Vessels.--An agency may provide to the 
     Secretary, for use by a State maritime academy, a vessel 
     (including equipment) that--
       ``(1) is suitable for training purposes; and
       ``(2) can be provided without detriment to the service to 
     which the vessel is assigned.
       ``(f) Fuel Costs.--The Secretary may pay to a State 
     maritime academy the costs of fuel used by a vessel provided 
     under this section while used for training.
       ``(g) Removing Vessels From Service and Vessel Sharing.--
     The Secretary may not--
       ``(1) take a vessel, currently in use as a training vessel 
     under this section, out of service to implement an 
     alternative program (including vessel sharing) unless the 
     vessel is incapable of being maintained in good repair as 
     required by subsection (d); or
       ``(2) implement a program requiring a State maritime 
     academy to share its training vessel with another State 
     maritime academy, except with the express consent of 
     Congress.

     ``Sec. 51505. Annual payments for maintenance and support

       ``(a) Payment Agreements.--The Secretary of Transportation 
     may make an agreement (effective for not more than 4 years) 
     with the following academies to provide annual payments to 
     those academies for their maintenance and support:
       ``(1) One State maritime academy in each State that 
     satisfies section 51506(a) of this title.
       ``(2) Each regional maritime academy that satisfies section 
     51506(a) of this title.
       ``(b) Payments.--
       ``(1) In general.--Subject to paragraph (2), an annual 
     payment to an academy under subsection (a) shall be at least 
     equal to the amount given to the academy for its maintenance 
     and support by the State in which it is located, or, for a 
     regional maritime academy, by all States cooperating to 
     sponsor the academy.
       ``(2) Maximum.--The amount under paragraph (1) may not be 
     more than $25,000. However, if the academy satisfies section 
     51506(b) of this title, the amount shall be--

[[Page H7615]]

       ``(A) $100,000 for a State maritime academy; and
       ``(B) $200,000 for a regional maritime academy.

     ``Sec. 51506. Conditions to receiving payments and use of 
       vessels

       ``(a) General Conditions.--As conditions of receiving an 
     annual payment or the use of a vessel under this chapter, a 
     State maritime academy must--
       ``(1) provide courses of instruction on navigation, marine 
     engineering (including steam and diesel propulsion), the 
     operation and maintenance of new vessels and equipment, and 
     innovations being introduced to the merchant marine of the 
     United States;
       ``(2) agree in writing to conform to the standards for 
     courses, training facilities, admissions, and instruction 
     that the Secretary of Transportation may establish after 
     consultation with the superintendents of State maritime 
     academies; and
       ``(3) agree in writing to require, as a condition for 
     graduation, that each individual who is a citizen of the 
     United States and who is attending the academy in a merchant 
     marine officer preparation program pass the examination 
     required for the issuance of a license under section 7101 of 
     this title.
       ``(b) Additional Condition to Payments of More Than 
     $25,000.--As a condition of receiving an annual payment of 
     more than $25,000 under section 51505 of this title, a State 
     maritime academy also must agree to admit each year a number 
     of citizens of the United States who meet its admission 
     requirements and reside in a State not supporting that 
     academy. The Secretary shall determine the number of 
     individuals to be admitted by each academy under this 
     subsection. The number may not be more than one-third of the 
     total number of individuals attending the academy at any 
     time.

     ``Sec. 51507. Places of training

       ``The Secretary of Transportation may provide for the 
     training of students attending a State maritime academy--
       ``(1) on vessels owned or subsidized by the United States 
     Government;
       ``(2) on other documented vessels, with the permission of 
     the owner; and
       ``(3) in shipyards or plants and with industrial or 
     educational organizations.

     ``Sec. 51508. Allowances for students

       ``Under regulations prescribed by the Secretary of 
     Transportation, a student at a State maritime academy shall 
     receive from the Secretary allowances for transportation 
     (including reimbursement of traveling expenses) when 
     traveling under orders to receive training under section 
     51507 of this title.

     ``Sec. 51509. Student incentive payment agreements

       ``(a) General Authority.--If a State maritime academy has 
     an agreement with the Secretary of Transportation under 
     section 51505 of this title, the Secretary may make an 
     agreement with a student at the academy who is a citizen of 
     the United States to make student incentive payments to the 
     individual. An agreement with a student may not be effective 
     for more than 4 academic years. The Secretary shall allocate 
     payments under this section among the various State maritime 
     academies in an equitable manner.
       ``(b) Payments.--Payments under an agreement under this 
     section shall be equal to $4,000 each academic year and be 
     paid, as prescribed by the Secretary, while the individual is 
     attending the academy. The payments shall be used for 
     uniforms, books, and subsistence.
       ``(c) Midshipman and Enlisted Reserve Status.--An agreement 
     under this section shall require the student to accept 
     midshipman and enlisted reserve status in the Naval Reserve 
     (including the Merchant Marine Reserve, Naval Reserve) before 
     receiving any payments under the agreement.
       ``(d) Agreement Requirements.--An agreement under this 
     section shall require the student to--
       ``(1) complete the course of instruction at the academy the 
     individual is attending;
       ``(2) take the examination for a license as an officer in 
     the merchant marine of the United States before graduation 
     from the academy and fulfill the requirements for such a 
     license within 3 months after graduation from the academy;
       ``(3) maintain a valid license as an officer in the 
     merchant marine of the United States for at least 6 years 
     after graduation from the academy, accompanied by the 
     appropriate national and international endorsements and 
     certification required by the Coast Guard for service aboard 
     vessels on domestic and international voyages;
       ``(4) accept, if tendered, an appointment as a commissioned 
     officer in the Naval Reserve (including the Merchant Marine 
     Reserve, Naval Reserve), the Coast Guard Reserve, or any 
     other reserve unit of an armed force of the United States, 
     and, if tendered the appointment, to serve for at least 6 
     years after graduation from the academy;
       ``(5) serve the foreign and domestic commerce and the 
     national defense of the United States for at least 3 years 
     after graduation from the academy--
       ``(A) as a merchant marine officer on a documented vessel 
     or a vessel owned and operated by the United States 
     Government or by a State;
       ``(B) as an employee in a United States maritime-related 
     industry, profession, or marine science (as determined by the 
     Secretary), if the Secretary determines that service under 
     subclause (A) is not available to the individual;
       ``(C) as a commissioned officer on active duty in an armed 
     force of the United States, as a commissioned officer in the 
     National Oceanic and Atmospheric Administration, or in other 
     maritime-related Federal employment which serves the national 
     security interests of the United States, as determined by the 
     Secretary; or
       ``(D) by a combination of the service alternatives referred 
     to in subclauses (A)-(C); and
       ``(6) report to the Secretary on compliance with this 
     subsection.
       ``(e) Failure To Complete Course of Instruction.--
       ``(1) Active duty.--If the Secretary of Transportation 
     determines that an individual who has accepted the payments 
     described in subsection (b) for a minimum of 2 academic years 
     has failed to fulfill the part of the agreement described in 
     subsection (d)(1), the individual may be ordered by the 
     Secretary of Defense to serve on active duty in the armed 
     forces of the United States for a period of not more than 2 
     years. In cases of hardship as determined by the Secretary of 
     Transportation, the Secretary of Transportation may waive 
     this paragraph in whole or in part.
       ``(2) Recovery of cost.--If the Secretary of Defense is 
     unable or unwilling to order an individual to serve on active 
     duty under paragraph (1), or if the Secretary of 
     Transportation determines that reimbursement of the cost of 
     education provided would better serve the interests of the 
     United States, the Secretary of Transportation may recover 
     from the individual the amount of student incentive payments, 
     plus interest and attorney fees. The Secretary may reduce the 
     amount to be recovered to reflect partial performance of 
     service obligations and other factors the Secretary 
     determines merit a reduction.
       ``(f) Failure To Carry Out Other Requirements.--
       ``(1) Active duty.--If the Secretary of Transportation 
     determines that an individual has failed to fulfill any part 
     of the agreement described in subsection (d)(2)-(6), the 
     individual may be ordered to serve on active duty for a 
     period of at least 2 years but not more than the unexpired 
     period (as determined by the Secretary) of the service 
     required by subsection (d)(5). The Secretary of 
     Transportation, in consultation with the Secretary of 
     Defense, shall determine in which service the individual 
     shall serve. In cases of hardship as determined by the 
     Secretary of Transportation, the Secretary of Transportation 
     may waive this paragraph in whole or in part.
       ``(2) Recovery of cost.--If the Secretary of Defense is 
     unable or unwilling to order an individual to serve on active 
     duty under paragraph (1), or if the Secretary of 
     Transportation determines that reimbursement of the cost of 
     education provided would better serve the interests of the 
     United States, the Secretary of Transportation may recover 
     from the individual the amount of student incentive payments, 
     plus interest and attorney fees. The Secretary may reduce the 
     amount to be recovered to reflect partial performance of 
     service obligations and other factors the Secretary 
     determines merit a reduction.
       ``(g) Actions To Recover Cost.--To aid in the recovery of 
     the cost of education provided by the Government under a 
     commitment agreement under this section, the Secretary of 
     Transportation may--
       ``(1) request the Attorney General to bring a civil action 
     against the individual; and
       ``(2) make use of the Federal debt collection procedures in 
     chapter 176 of title 28 or other applicable administrative 
     remedies.

     ``Sec. 51510. Deferment of service obligation under student 
       incentive payment agreements

       ``The Secretary of Transportation may defer the service 
     commitment of an individual under section 51509(d)(5) of this 
     title (as specified in the agreement under section 51509) for 
     not more than 2 years if the individual is engaged in a 
     graduate course of study approved by the Secretary. However, 
     deferment of service as a commissioned officer on active duty 
     must be approved by the Secretary of the affected military 
     department (or the Secretary of Commerce, for service with 
     the National Oceanic and Atmospheric Administration).

     ``Sec. 51511. Midshipman status in the Naval Reserve

       ``A citizen of the United States attending a State maritime 
     academy may be appointed by the Secretary of the Navy as a 
     midshipman in the Naval Reserve (including the Merchant 
     Marine Reserve, Naval Reserve).

       ``CHAPTER 517--OTHER SUPPORT FOR MERCHANT MARINE TRAINING

``Sec.
``51701.  United States Maritime Service.
``51702.  Civilian nautical schools.
``51703.  Additional training.
``51704.  Training for maritime oil pollution prevention, response, and 
              clean-up.

     ``Sec. 51701. United States Maritime Service

       ``(a) General Authority.--The Secretary of Transportation 
     may establish and maintain a voluntary organization, to be 
     known as the United States Maritime Service, for the training 
     of citizens of the United States to serve on merchant vessels 
     of the United States.
       ``(b) Specific Authority.--The Secretary may--
       ``(1) determine the number of individuals to be enrolled 
     for training and reserve purposes in the Service;
       ``(2) fix the rates of pay and allowances of the 
     individuals without regard to chapter 51 or subchapter III of 
     chapter 53 of title 5;
       ``(3) prescribe the course of study and the periods of 
     training for the Service; and
       ``(4) prescribe the uniform of the Service and the rules on 
     providing and wearing the uniform.
       ``(c) Ranks, Grades, and Ratings.--The ranks, grades, and 
     ratings for personnel of the Service shall be the same as 
     those prescribed for personnel of the Coast Guard.
       ``(d) Medals and Awards.--The Secretary may establish and 
     maintain a medals and

[[Page H7616]]

     awards program to recognize distinguished service, superior 
     achievement, professional performance, and other commendable 
     achievement by personnel of the Service.

     ``Sec. 51702. Civilian nautical schools

       ``(a) Definition.--In this section, the term `civilian 
     nautical school' means a school operated in the United States 
     (except the United States Merchant Marine Academy, a State 
     maritime academy, or another school operated by the United 
     States Government) that offers instruction to individuals 
     quartered on a vessel primarily to train them for service in 
     the merchant marine.
       ``(b) Inspection.--Each civilian nautical school is subject 
     to inspection by the Secretary of Transportation.
       ``(c) Rating and Certification.--The Secretary may, under 
     regulations the Secretary may prescribe, provide for the 
     rating and certification of civilian nautical schools as to 
     the adequacy of their course of instruction, the competence 
     of their instructors, and the suitability of the equipment 
     used in their course of instruction.

     ``Sec. 51703. Additional training

       ``(a) General Authority.--The Secretary of Transportation 
     may provide additional training on maritime subjects to 
     supplement other training opportunities and make the training 
     available to the personnel of the merchant marine of the 
     United States and individuals preparing for a career in the 
     merchant marine of the United States.
       ``(b) Equipment, Supplies, and Contracts.--The Secretary 
     may--
       ``(1) prepare or buy equipment or supplies required for the 
     additional training; and
       ``(2) without regard to section 3709 of the Revised 
     Statutes (41 U.S.C. 5), make contracts for services the 
     Secretary considers necessary to prepare the equipment and 
     supplies and to supervise and administer the additional 
     training.

     ``Sec. 51704. Training for maritime oil pollution prevention, 
       response, and clean-up

       ``(a) Assistance in Establishing Program.--The Secretary of 
     Transportation shall assist maritime training institutions 
     approved by the Secretary in establishing a training program 
     for maritime oil pollution prevention, response, and clean-
     up.
       ``(b) Providing Training Vessels.--Subject to subsection 
     (c), the Secretary may provide, with title free of all liens, 
     to maritime training institutions that have a program 
     established under subsection (a), offshore supply vessels and 
     tug/supply vessels that were built in the United States and 
     are in the possession of the Maritime Administration because 
     of a default on a loan guaranteed under chapter 537 of this 
     title.
       ``(c) Requirements.--In addition to any other requirements 
     the Secretary considers appropriate, the following 
     requirements apply to vessels provided under this section:
       ``(1) The vessel shall be offered to the institution at a 
     location selected by the Secretary.
       ``(2) The institution shall use the vessel to train 
     students and appropriate maritime industry personnel in oil 
     spill prevention, response, clean-up, and related skills.
       ``(3) The institution shall make the vessel and qualified 
     students available to appropriate Federal, State, and local 
     oil spill response authorities when there is a maritime oil 
     spill.
       ``(4) The institution may not sell, trade, charter, donate, 
     scrap, or in any way alter or dispose of the vessel without 
     prior approval of the Secretary.
       ``(5) The institution may not use the vessel in competition 
     with a privately-owned vessel documented under chapter 121 of 
     this title or titled under the law of a State, unless 
     necessary to carry out this section.
       ``(6) When the institution can no longer use the vessel for 
     its training program, the institution shall return the vessel 
     to the Secretary. The Secretary shall take possession at the 
     institution and thereafter may provide the vessel to another 
     institution under this section or dispose of the vessel.

                 ``CHAPTER 519--MERCHANT MARINE AWARDS

``Sec.
``51901.  Awards for individual acts or service.
``51902.  Gallant Ship Award.
``51903.  Multiple awards.
``51904.  Presentation to representatives.
``51905.  Flags and grave markers.
``51906.  Special certificates for civilian service to armed forces.
``51907.  Manufacture and sale of awards and replacements.
``51908.  Prohibition against unauthorized manufacture, sale, 
              possession, or display of awards.

     ``Sec. 51901. Awards for individual acts or service

       ``(a) General Authority.--The Secretary of Transportation 
     may award decorations and medals of appropriate design 
     (including ribbons, ribbon bars, emblems, rosettes, miniature 
     facsimiles, plaques, citations, or other suitable devices or 
     insignia) for individual acts or service in the merchant 
     marine of the United States. The design may be similar to the 
     design of a decoration or medal authorized for members of the 
     armed forces for similar acts or service.
       ``(b) Specific Authority.--The Secretary may award--
       ``(1) a Merchant Marine Distinguished Service Medal to an 
     individual for outstanding acts, conduct, or valor beyond the 
     line of duty;
       ``(2) a Merchant Marine Meritorious Service Medal to an 
     individual for meritorious acts, conduct, or valor in the 
     line of duty, but not of the outstanding character that would 
     warrant the award of the Merchant Marine Distinguished 
     Service Medal;
       ``(3) a decoration or medal to an individual for service 
     during a war, national emergency proclaimed by the President 
     or Congress, or operations by the armed forces outside the 
     continental United States under conditions of danger to life 
     and property; and
       ``(4) a decoration or medal to an individual for other acts 
     or service of conspicuous gallantry, intrepidity, and 
     extraordinary heroism under conditions of danger to life and 
     property that would warrant a similar decoration or medal for 
     a member of the armed forces.

     ``Sec. 51902. Gallant Ship Award

       ``(a) Awards to Vessels.--The Secretary of Transportation 
     may award a Gallant Ship Award and a citation to a vessel 
     (including a foreign vessel) participating in outstanding or 
     gallant action in a marine disaster or other emergency to 
     save life or property at sea. The Secretary may award a 
     plaque to the vessel, and a replica of the plaque may be 
     preserved as a permanent historical record.
       ``(b) Awards to Crews.--The Secretary of Transportation may 
     award an appropriate citation ribbon bar to the master and 
     each individual serving, at the time of the action, on a 
     vessel issued an award under subsection (a).
       ``(c) Consultation.--The Secretary of Transportation shall 
     consult with the Secretary of State before awarding an award 
     or citation to a foreign vessel or its crew under this 
     section.

     ``Sec. 51903. Multiple awards

       ``An individual may not be awarded more than one of any 
     type of decoration or medal under this chapter. For each 
     succeeding act or service justifying the same decoration or 
     medal, a suitable device may be awarded to be worn with the 
     decoration or medal.

     ``Sec. 51904. Presentation to representatives

       ``If an individual to be issued an award under this chapter 
     is unable to accept the award personally, the Secretary of 
     Transportation may present the award to an appropriate 
     representative.

     ``Sec. 51905. Flags and grave markers

       ``Except as authorized under another law, the Secretary of 
     Transportation may issue, at no cost, a flag of the United 
     States and a grave marker to the family or personal 
     representative of a deceased individual who served in the 
     merchant marine of the United States in support of the armed 
     forces of the United States or its allies during a war or 
     national emergency.

     ``Sec. 51906. Special certificates for civilian service to 
       armed forces

       ``(a) General Authority.--The Maritime Administrator may 
     issue a special certificate to an individual, or the personal 
     representative of an individual, in recognition of service of 
     that individual in the merchant marine of the United States, 
     if the service has been determined to be active duty under 
     section 401 of the GI Bill Improvement Act of 1977 (Public 
     Law 95-202; 38 U.S.C. 106 note).
       ``(b) Relationship to Other Laws.--Issuance of a 
     certificate under subsection (a) does not entitle an 
     individual to any rights, privileges, or benefits under a law 
     of the United States.

     ``Sec. 51907. Manufacture and sale of awards and replacements

       ``The Secretary of Transportation may--
       ``(1) authorize private persons to manufacture decorations 
     and medals authorized under this chapter or a prior law; and
       ``(2) provide at cost, or authorize private persons to sell 
     at reasonable prices, replacements for those decorations and 
     medals.

     ``Sec. 51908. Prohibition against unauthorized manufacture, 
       sale, possession, or display of awards

       ``(a) Prohibition.--Except as authorized under this 
     chapter, a person may not manufacture, sell, possess, or 
     display a decoration or medal provided for in this chapter.
       ``(b) Civil Penalty.--A person violating this section is 
     liable to the United States Government for a civil penalty of 
     not more than $2,000.

                      ``CHAPTER 521--MISCELLANEOUS

``Sec.
``52101.  Reemployment rights for certain merchant seamen.

     ``Sec. 52101. Reemployment rights for certain merchant seamen

       ``(a) In General.--An individual who is certified by the 
     Secretary of Transportation under subsection (c) shall be 
     entitled to reemployment rights and other benefits 
     substantially equivalent to the rights and benefits provided 
     for by chapter 43 of title 38 for any member of a reserve 
     component of the armed forces of the United States who is 
     ordered to active duty.
       ``(b) Time for Application.--An individual may submit an 
     application for certification under subsection (c) to the 
     Secretary not later than 45 days after the date the 
     individual completes a period of employment described in 
     subsection (c)(1)(A) with respect to which the application is 
     submitted.
       ``(c) Certification Determination.--Not later than 20 days 
     after the date the Secretary receives from an individual an 
     application for certification under this subsection, the 
     Secretary shall--
       ``(1) determine whether the individual--
       ``(A) was employed in the activation or operation of a 
     vessel--
       ``(i) in the National Defense Reserve Fleet maintained 
     under section 11 of the Merchant Ship Sales Act of 1946 (50 
     App. U.S.C. 1744) in a period in which the vessel was in use 
     or being activated for use under subsection (b) of that 
     section;
       ``(ii) requisitioned or purchased under chapter 563 of this 
     title; or
       ``(iii) owned, chartered, or controlled by the United 
     States Government and used by the Government for a war, armed 
     conflict, national

[[Page H7617]]

     emergency, or maritime mobilization need (including for 
     training purposes or testing for readiness and suitability 
     for mission performance); and
       ``(B) during the period of that employment, possessed a 
     valid license, certificate of registry, or merchant mariner's 
     document issued under chapter 71 or 73 of this title; and
       ``(2) if the Secretary makes affirmative determinations 
     under paragraph (1)(A) and (B), certify that individual under 
     this subsection.
       ``(d) Equivalence to Military Selective Service Act 
     Certificate.--For purposes of reemployment rights and 
     benefits provided by this section, a certification under 
     subsection (c) shall be considered to be the equivalent of a 
     certificate described in section 9(a) of the Military 
     Selective Service Act (50 App. U.S.C. 459(a)).

               ``Part C--Financial Assistance Programs''.

       (c) Chapters Following Chapter 531.--Subtitle V of title 
     46, United States Code, is amended by adding at the end the 
     following:

               ``CHAPTER 533--CONSTRUCTION RESERVE FUNDS

``Sec.
``53301.  Definitions.
``53302.  Authority for construction reserve funds.
``53303.  Persons eligible to establish funds.
``53304.  Vessel ownership.
``53305.  Eligible fund deposits.
``53306.  Recognition of gain for tax purposes.
``53307.  Basis for determining gain or loss and for depreciating new 
              vessels.
``53308.  Order and proportions of deposits and withdrawals.
``53309.  Accumulation of deposits.
``53310.  Obligation of deposits and period for construction of certain 
              vessels.
``53311.  Taxation of deposits on failure of conditions.
``53312.  Assessment and collection of deficiency tax.

     ``Sec. 53301. Definitions

       ``(a) In General.--In this chapter:
       ``(1) Construction contract.--The term `construction 
     contract' includes, for a taxpayer constructing a new vessel 
     in a shipyard owned by that taxpayer, an agreement between 
     the taxpayer and the Secretary of Transportation for that 
     construction containing provisions the Secretary considers 
     advisable to carry out this chapter.
       ``(2) New vessel.--The term `new vessel' means--
       ``(A) a vessel--
       ``(i) constructed in the United States after December 31, 
     1939, constructed with a construction-differential subsidy 
     under title V of the Merchant Marine Act, 1936, or 
     constructed with financing or a financing guarantee under 
     chapter 537 or 575 of this title;
       ``(ii) documented or agreed with the Secretary to be 
     documented under the laws of the United States; and
       ``(iii)(I) of a type, size, and speed that the Secretary 
     determines is suitable for use on the high seas or Great 
     Lakes in carrying out this subtitle, but not less than 2,000 
     gross tons or less than 12 knots speed unless the Secretary 
     certifies in each case that a vessel of lesser tonnage or 
     speed is desirable for use by the United States Government in 
     case of war or national emergency; or
       ``(II) constructed to replace a vessel bought or 
     requisitioned by the Government; and
       ``(B) a vessel reconstructed or reconditioned for use only 
     on the Great Lakes, including the Saint Lawrence River and 
     Gulf, if the Secretary finds that the reconstruction or 
     reconditioning will promote the objectives of this subtitle.
       ``(b) Additional Tax-Related Terms.--Other terms used in 
     this chapter have the same meaning as in chapter 1 of the 
     Internal Revenue Code of 1986 (26 U.S.C. ch. 1).

     ``Sec. 53302. Authority for construction reserve funds

       ``(a) General Authority.--An eligible person under section 
     53303 of this title may establish a construction reserve fund 
     for the construction, reconstruction, reconditioning, or 
     acquisition of a new vessel or for other purposes authorized 
     by this chapter.
       ``(b) Application of Certain Laws and Regulations.--The 
     fund shall be established, maintained, expended, and used as 
     provided by this chapter and regulations prescribed jointly 
     by the Secretary of Transportation and the Secretary of the 
     Treasury.

     ``Sec. 53303. Persons eligible to establish funds

       ``A construction reserve fund may be established by a 
     citizen of the United States that--
       ``(1) is operating a vessel in the foreign or domestic 
     commerce of the United States or in the fisheries;
       ``(2) owns, in whole or in part, a vessel being operated in 
     the foreign or domestic commerce of the United States or in 
     the fisheries;
       ``(3) was operating a vessel in the foreign or domestic 
     commerce of the United States or in the fisheries when it was 
     bought or requisitioned by the United States Government;
       ``(4) owned, in whole or in part, a vessel being operated 
     in the foreign or domestic commerce of the United States or 
     in the fisheries when it was bought or requisitioned by the 
     Government; or
       ``(5) had acquired or was having constructed a vessel to 
     operate in the foreign or domestic commerce of the United 
     States or in the fisheries when it was bought or 
     requisitioned by the Government.

     ``Sec. 53304. Vessel ownership

       ``In this chapter, a vessel is deemed to be constructed or 
     acquired by a taxpayer if constructed or acquired by a 
     corporation when the taxpayer owns at least 95 percent of 
     each class of stock of the corporation.

     ``Sec. 53305. Eligible fund deposits

       ``A construction reserve fund may include deposits of--
       ``(1) the proceeds from the sale of a vessel;
       ``(2) indemnities for the loss of a vessel;
       ``(3) earnings from the operation of a documented vessel 
     and from services incident to the operation; and
       ``(4) interest or other amounts accrued on deposits in the 
     fund.

     ``Sec. 53306. Recognition of gain for tax purposes

       ``(a) Definitions.--In this section, the terms `net 
     proceeds' and `net indemnity' mean the sum of--
       ``(1) the adjusted basis of the vessel; and
       ``(2) the amount of gain the taxpayer would recognize 
     without regard to this section.
       ``(b) Recognition of Gain.--In computing net income under 
     the income or excess profits tax laws of the United States, a 
     taxpayer does not recognize a gain on the sale or the actual 
     or constructive total loss of a vessel if the taxpayer--
       ``(1) deposits an amount equal to the net proceeds of the 
     sale or the net indemnity for the loss in a construction 
     reserve fund within 60 days after receiving the payment of 
     proceeds or indemnity; and
       ``(2) elects under this section not to recognize the gain.
       ``(c) When Election Must Be Made.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     taxpayer must make the election referred to in subsection (b) 
     in the taxpayer's income tax return for the taxable year in 
     which the gain was realized.
       ``(2) Receipt after taxable year.--If the vessel is bought 
     or requisitioned by the United States Government, or is lost, 
     and the taxpayer receives payment for the vessel or indemnity 
     for the loss from the Government after the end of the taxable 
     year in which it was bought, requisitioned, or lost, the 
     taxpayer must make the election referred to in subsection (b) 
     within 60 days after receiving the payment or indemnity, on a 
     form prescribed by the Secretary of the Treasury.
       ``(d) Effect of Statute of Limitation.--If the taxpayer 
     makes an election under subsection (c)(2), and computation or 
     recomputation under this section is otherwise allowable but 
     is prevented by a statute of limitation on the date the 
     election is made or within 6 months thereafter, the 
     computation or recomputation nevertheless shall be made 
     notwithstanding the statute if the taxpayer files a claim for 
     the computation or recomputation within 6 months after the 
     date of making the election.

     ``Sec. 53307. Basis for determining gain or loss and for 
       depreciating new vessels

       ``Under the income or excess profits tax laws of the United 
     States, the basis for determining a gain or loss and for 
     depreciation of a new vessel constructed, reconstructed, 
     reconditioned, or acquired by the taxpayer, or for which 
     purchase-money indebtedness is liquidated as provided in 
     section 53310 of this title, with amounts from a construction 
     reserve fund, shall be reduced by that part of the deposits 
     in the fund expended in the construction, reconstruction, 
     reconditioning, acquisition, or liquidation of purchase-money 
     indebtedness of the new vessel that represents a gain not 
     recognized for tax purposes under section 53306 of this 
     title.

     ``Sec. 53308. Order and proportions of deposits and 
       withdrawals

       ``In this chapter--
       ``(1) if the net proceeds of a sale or the net indemnity 
     for a loss is deposited in more than one deposit, the amount 
     consisting of the gain shall be deemed to be deposited first;
       ``(2) amounts expended, obligated, or otherwise withdrawn 
     shall be applied against the amounts deposited in the fund in 
     the order of deposit; and
       ``(3) if a deposit consists in part of a gain not 
     recognized under section 53306 of this title, any 
     expenditure, obligation, or withdrawal applied against that 
     deposit shall be deemed to be a gain in the proportion that 
     the part of the deposit consisting of a gain bears to the 
     total amount of the deposit.

     ``Sec. 53309. Accumulation of deposits

       ``For any taxable year, amounts on deposit in a 
     construction reserve fund on the last day of the taxable 
     year, for which the requirements of section 53310 of this 
     title have been satisfied (to the extent they apply on the 
     last day of the taxable year), are deemed to have been 
     retained for the reasonable needs of the business within the 
     meaning of section 537(a) of the Internal Revenue Code of 
     1986 (26 U.S.C. 537(a)).

     ``Sec. 53310. Obligation of deposits and period for 
       construction of certain vessels

       ``(a) Application of Sections 53306 and 53309.--Sections 
     53306 and 53309 of this title apply to a deposit in a 
     construction reserve fund only if, within 3 years after the 
     date of the deposit (and any extension under subsection 
     (c))--
       ``(1)(A) a contract is made for the construction or 
     acquisition of a new vessel or, with the approval of the 
     Secretary of Transportation, for a part interest in a new 
     vessel or for the reconstruction or reconditioning of a new 
     vessel;
       ``(B) the deposit is expended or obligated for expenditure 
     under that contract;
       ``(C) at least 12.5 percent of the construction or contract 
     price of the vessel is paid or irrevocably committed for 
     payment; and
       ``(D) the plans and specifications for the vessel are 
     approved by the Secretary to the extent the Secretary 
     considers necessary; or
       ``(2) the deposit is expended or obligated for expenditure 
     for the liquidation of existing or subsequently incurred 
     purchase-money indebtedness to a person not a parent company 
     of, or a company affiliated or associated with, the mortgagor 
     on a new vessel.
       ``(b) Additional Requirements for Certain Vessels.--In 
     addition to the requirements of subsection (a)(1), for a 
     vessel not constructed under a construction-differential 
     subsidy contract or not bought from the Secretary of 
     Transportation--
       ``(1) at least 5 percent of the construction (or, if the 
     contract covers more than one vessel, at

[[Page H7618]]

     least 5 percent of the construction of the first vessel) must 
     be completed within 6 months after the date of the 
     construction contract (or within the period of an extension 
     under subsection (c)), as estimated by the Secretary and 
     certified by the Secretary to the Secretary of the Treasury; 
     and
       ``(2) construction under the contract must be completed 
     with reasonable dispatch thereafter.
       ``(c) Extensions.--The Secretary of Transportation may 
     grant extensions of the period within which the deposits must 
     be expended or obligated or within which the construction 
     must have progressed to the extent of 5 percent completion 
     under this section. However, the extensions may not be for a 
     total of more than 2 years for the expenditure or obligation 
     of deposits or one year for the progress of construction.

     ``Sec. 53311. Taxation of deposits on failure of conditions

       ``A deposited gain, if otherwise taxable income under the 
     law applicable to the taxable year in which the gain was 
     realized, shall be included in gross income for that taxable 
     year, except for purposes of the declared value excess 
     profits tax and the capital stock tax, if--
       ``(1) the deposited gain is not expended or obligated 
     within the appropriate period under section 53310 of this 
     title;
       ``(2) the deposited gain is withdrawn before the end of 
     that period;
       ``(3) the construction related to that deposited gain has 
     not progressed to the extent of 5 percent of completion 
     within the appropriate period under section 53310 of this 
     title; or
       ``(4) the Secretary of Transportation finds and certifies 
     to the Secretary of the Treasury that, for causes within the 
     control of the taxpayer, the entire construction related to 
     that deposited gain is not completed with reasonable 
     dispatch.

     ``Sec. 53312. Assessment and collection of deficiency tax

       ``Notwithstanding any other provision of law, a deficiency 
     in tax for a taxable year resulting from the inclusion of an 
     amount in gross income as provided by section 53311 of this 
     title, and the amount to be treated as a deficiency under 
     section 53311 instead of as an adjustment for the declared 
     value excess profits tax, may be assessed or a civil action 
     may be brought to collect the deficiency without assessment, 
     at any time. Interest on a deficiency or amount to be treated 
     as a deficiency does not begin until the date the deposited 
     gain or part of the deposited gain in question is required to 
     be included in gross income under section 51111.

               ``CHAPTER 535--CAPITAL CONSTRUCTION FUNDS

``Sec.
``53501.  Definitions.
``53502.  Regulations.
``53503.  Establishing a capital construction fund.
``53504.  Deposits and withdrawals.
``53505.  Ceiling on deposits.
``53506.  Investment and fiduciary requirements.
``53507.  Nontaxation of deposits.
``53508.  Separate accounts within a fund.
``53509.  Qualified withdrawals.
``53510.  Tax treatment of qualified withdrawals and basis of property.
``53511.  Tax treatment of nonqualified withdrawals.
``53512.  FIFO and LIFO withdrawals.
``53513.  Corporate reorganizations and partnership changes.
``53514.  Relationship of old fund to new fund.
``53515.  Records and reports.
``53516.  Termination of agreement after change in regulations.
``53517.  Reports.

     ``Sec. 53501. Definitions

       ``In this chapter:
       ``(1) Agreement vessel.--The term `agreement vessel' 
     means--
       ``(A) an eligible vessel or a qualified vessel that is 
     subject to an agreement under this chapter; and
       ``(B) a barge or container that is part of the complement 
     of a vessel described in subclause (A) if provided for in the 
     agreement.
       ``(2) Eligible vessel.--The term `eligible vessel' means--
       ``(A) a vessel--
       ``(i) constructed in the United States (and, if 
     reconstructed, reconstructed in the United States), 
     constructed outside the United States but documented under 
     the laws of the United States on April 15, 1970, or 
     constructed outside the United States for use in the United 
     States foreign trade pursuant to a contract made before April 
     15, 1970;
       ``(ii) documented under the laws of the United States; and
       ``(iii) operated in the foreign or domestic trade of the 
     United States or in the fisheries of the United States; and
       ``(B) a commercial fishing vessel--
       ``(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States;
       ``(ii) of at least 2 net tons but less than 5 net tons;
       ``(iii) owned by a citizen of the United States;
       ``(iv) having its home port in the United States; and
       ``(v) operated in the commercial fisheries of the United 
     States.
       ``(3) Joint regulations.--The term `joint regulations' 
     means regulations prescribed jointly by the Secretary and the 
     Secretary of the Treasury under section 53502(b) of this 
     title.
       ``(4) Noncontiguous trade.--The term `noncontiguous trade' 
     means--
       ``(A) trade between--
       ``(i) one of the contiguous 48 States; and
       ``(ii) Alaska, Hawaii, Puerto Rico, or an insular territory 
     or possession of the United States; and
       ``(B) trade between--
       ``(i) a place in Alaska, Hawaii, Puerto Rico, or an insular 
     territory or possession of the United States; and
       ``(ii) another place in Alaska, Hawaii, Puerto Rico, or an 
     insular territory or possession of the United States.
       ``(5) Qualified vessel.--The term `qualified vessel' 
     means--
       ``(A) a vessel--
       ``(i) constructed in the United States (and, if 
     reconstructed, reconstructed in the United States), 
     constructed outside the United States but documented under 
     the laws of the United States on April 15, 1970, or 
     constructed outside the United States for use in the United 
     States foreign trade pursuant to a contract made before April 
     15, 1970;
       ``(ii) documented under the laws of the United States; and
       ``(iii) agreed, between the Secretary and the person 
     maintaining the capital construction fund established under 
     section 53503 of this title, to be operated in the United 
     States foreign, Great Lakes, or noncontiguous domestic trade 
     or in the fisheries of the United States; and
       ``(B) a commercial fishing vessel--
       ``(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States;
       ``(ii) of at least 2 net tons but less than 5 net tons;
       ``(iii) owned by a citizen of the United States;
       ``(iv) having its home port in the United States; and
       ``(v) operated in the commercial fisheries of the United 
     States.
       ``(6) Secretary.--The term `Secretary' means--
       ``(A) the Secretary of Commerce with respect to an eligible 
     vessel or a qualified vessel operated or to be operated in 
     the fisheries of the United States; and
       ``(B) the Secretary of Transportation with respect to other 
     vessels.
       ``(7) United states foreign trade.--The term `United States 
     foreign trade' includes those areas in domestic trade in 
     which a vessel built with a construction-differential subsidy 
     is allowed to operate under the first sentence of section 506 
     of the Merchant Marine Act, 1936.
       ``(8) Vessel.--The term `vessel' includes--
       ``(A) cargo handling equipment that the Secretary 
     determines is intended for use primarily on the vessel; and
       ``(B) an ocean-going towing vessel, an ocean-going barge, 
     or a comparable towing vessel or barge operated on the Great 
     Lakes.

     ``Sec. 53502. Regulations

       ``(a) In General.--Except as provided in subsection (b), 
     the Secretary shall prescribe regulations to carry out this 
     chapter.
       ``(b) Tax Liability.--The Secretary and the Secretary of 
     the Treasury shall prescribe joint regulations for the 
     determination of tax liability under this chapter.

     ``Sec. 53503. Establishing a capital construction fund

       ``(a) In General.--A citizen of the United States owning or 
     leasing an eligible vessel may make an agreement with the 
     Secretary under this chapter to establish a capital 
     construction fund for the vessel.
       ``(b) Allowable Purpose.--The purpose of the agreement 
     shall be to provide replacement vessels, additional vessels, 
     or reconstructed vessels, built in the United States and 
     documented under the laws of the United States, for operation 
     in the United States foreign, Great Lakes, or noncontiguous 
     domestic trade or in the fisheries of the United States.

     ``Sec. 53504. Deposits and withdrawals

       ``(a) Required Deposits.--An agreement to establish a 
     capital construction fund shall provide for the deposit in 
     the fund of the amounts agreed to be appropriate to provide 
     for qualified withdrawals under section 53509 of this title.
       ``(b) Applicable Requirements.--Deposits in and withdrawals 
     from the fund are subject to the requirements included in the 
     agreement or prescribed by the Secretary by regulation. 
     However, the Secretary may not require a person to deposit in 
     the fund for a taxable year more than 50 percent of that 
     portion of the person's taxable income for that year (as 
     determined under section 53505(a)(1) of this title) that is 
     attributable to the operation of an agreement vessel.

     ``Sec. 53505. Ceiling on deposits

       ``(a) Maximum Deposits.--The amount deposited in a capital 
     construction fund for a taxable year may not exceed the sum 
     of--
       ``(1) that portion of the taxable income of the owner or 
     lessee for the taxable year (computed under chapter 1 of the 
     Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without 
     regard to the carryback of net operating loss or net capital 
     loss or this chapter) that is attributable to the operation 
     of agreement vessels in the foreign or domestic trade of the 
     United States or in the fisheries of the United States;
       ``(2) the amount allowable as a deduction under section 167 
     of such Code (26 U.S.C. 167) for the taxable year for 
     agreement vessels;
       ``(3) if the transaction is not taken into account for 
     purposes of clause (1), the net proceeds (as defined in joint 
     regulations) from the disposition of an agreement vessel or 
     from insurance or indemnity attributable to an agreement 
     vessel; and
       ``(4) the receipts from the investment or reinvestment of 
     amounts held in the fund.
       ``(b) Reductions for Lessees.--For a lessee, the maximum 
     amount that may be deposited for an agreement vessel under 
     subsection (a)(2) for any period shall be reduced by any 
     amount the owner is required or permitted, under the capital 
     construction fund agreement, to deposit for that period for 
     the vessel under subsection (a)(2).

     ``Sec. 53506. Investment and fiduciary requirements

       ``(a) In General.--Amounts in a capital construction fund 
     shall be kept in the depository

[[Page H7619]]

     specified in the agreement and shall be subject to trustee 
     and other fiduciary requirements prescribed by the Secretary. 
     Except as provided in subsection (b), amounts in the fund may 
     be invested only in interest-bearing securities approved by 
     the Secretary.
       ``(b) Stock Investments.--
       ``(1) In general.--With the approval of the Secretary, an 
     agreed percentage (but not more than 60 percent) of the 
     assets of the fund may be invested in the stock of domestic 
     corporations that--
       ``(A) is fully listed and registered on an exchange 
     registered with the Securities and Exchange Commission as a 
     national securities exchange; and
       ``(B) would be acquired by a prudent investor seeking a 
     reasonable income and the preservation of capital.
       ``(2) Preferred stock.--The preferred stock of a 
     corporation is deemed to satisfy the requirements of this 
     subsection, even though it may not be registered and listed 
     because it is nonvoting stock, if the common stock of the 
     corporation satisfies the requirements and the preferred 
     stock otherwise would satisfy the requirements.
       ``(c) Maintaining Agreed Percentage.--If at any time the 
     fair market value of the stock in the fund is more than the 
     agreed percentage of the assets in the fund, any subsequent 
     investment of amounts deposited in the fund, and any 
     subsequent withdrawal from the fund, shall be made in a way 
     that tends to restore the fair market value of the stock to 
     not more than the agreed percentage.

     ``Sec. 53507. Nontaxation of deposits

       ``(a) Tax Treatment.--Subject to subsection (b), under the 
     Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)--
       ``(1) taxable income (determined without regard to this 
     chapter and section 7518 of such Code (26 U.S.C. 7518)) for 
     the taxable year shall be reduced by the amount deposited for 
     the taxable year out of amounts referred to in section 
     53505(a)(1) of this title;
       ``(2) a gain from a transaction referred to in section 
     53505(a)(3) of this title shall not be taken into account if 
     an amount equal to the net proceeds (as defined in joint 
     regulations) from the transaction is deposited in the fund;
       ``(3) the earnings (including gains and losses) from the 
     investment and reinvestment of amounts held in the fund shall 
     not be taken into account;
       ``(4) the earnings and profits of a corporation (within the 
     meaning of section 316 of such Code (26 U.S.C. 316)) shall be 
     determined without regard to this chapter and section 7518 of 
     such Code (26 U.S.C. 7518); and
       ``(5) in applying the tax imposed by section 531 of such 
     Code (26 U.S.C. 531), amounts held in the fund shall not be 
     taken into account.
       ``(b) Condition.--This section applies to an amount only if 
     the amount is deposited in the fund under the agreement 
     within the time provided in joint regulations.

     ``Sec. 53508. Separate accounts within a fund

       ``(a) In General.--A capital construction fund shall have 
     three accounts:
       ``(1) The capital account.
       ``(2) The capital gain account.
       ``(3) The ordinary income account.
       ``(b) Capital Account.--The capital account shall consist 
     of--
       ``(1) amounts referred to in section 53505(a)(2) of this 
     title;
       ``(2) amounts referred to in section 53505(a)(3) of this 
     title, except that portion representing a gain not taken into 
     account because of section 53507(a)(2) of this title;
       ``(3) the percentage applicable under section 243(a)(1) of 
     the Internal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of 
     any dividend received by the fund for which the person 
     maintaining the fund would be allowed (were it not for 
     section 53507(a)(3) of this title) a deduction under section 
     243 of such Code (26 U.S.C. 243); and
       ``(4) interest income exempt from taxation under section 
     103 of such Code (26 U.S.C. 103).
       ``(c) Capital Gain Account.--The capital gain account shall 
     consist of--
       ``(1) amounts representing capital gains on assets held for 
     more than 6 months and referred to in section 53505(a)(3) or 
     (4) of this title; minus
       ``(2) amounts representing capital losses on assets held in 
     the fund for more than 6 months.
       ``(d) Ordinary Income Account.--The ordinary income account 
     shall consist of--
       ``(1) amounts referred to in section 53505(a)(1) of this 
     title;
       ``(2)(A) amounts representing capital gains on assets held 
     for not more than 6 months and referred to in section 
     53505(a)(3) or (4) of this title; minus
       ``(B) amounts representing capital losses on assets held in 
     the fund for not more than 6 months;
       ``(3) interest (except tax-exempt interest referred to in 
     subsection (b)(4)) and other ordinary income (except any 
     dividend referred to in clause (5)) received on assets held 
     in the fund;
       ``(4) ordinary income from a transaction described in 
     section 53505(a)(3) of this title; and
       ``(5) that portion of any dividend referred to in 
     subsection (b)(3) not taken into account under subsection 
     (b)(3).
       ``(e) When Losses Allowed.--Except on termination of a 
     fund, capital losses referred to in subsection (c) or (d)(2) 
     shall be allowed only as an offset to gains referred to in 
     subsection (c) or (d)(2), respectively.

     ``Sec. 53509. Qualified withdrawals

       ``(a) In General.--Subject to subsection (b), a withdrawal 
     from a capital construction fund is a qualified withdrawal if 
     it is made under the terms of the agreement and is for--
       ``(1) the acquisition, construction, or reconstruction of a 
     qualified vessel or a barge or container that is part of the 
     complement of a qualified vessel; or
       ``(2) the payment of the principal on indebtedness incurred 
     in the acquisition, construction, or reconstruction of a 
     qualified vessel or a barge or container that is part of the 
     complement of a qualified vessel.
       ``(b) Barges and Containers.--Except as provided in 
     regulations prescribed by the Secretary, subsection (a) 
     applies to a barge or container only if it is constructed in 
     the United States.
       ``(c) Treatment as Nonqualified Withdrawal.--Under joint 
     regulations, if the Secretary determines that a substantial 
     obligation under an agreement is not being fulfilled, the 
     Secretary, after notice and opportunity for a hearing to the 
     person maintaining the fund, may treat any amount in the fund 
     as an amount withdrawn from the fund in a nonqualified 
     withdrawal.

     ``Sec. 53510. Tax treatment of qualified withdrawals and 
       basis of property

       ``(a) Order of Withdrawals.--A qualified withdrawal from a 
     capital construction fund shall be treated as made--
       ``(1) first from the capital account;
       ``(2) second from the capital gain account; and
       ``(3) third from the ordinary income account.
       ``(b) Ordinary Income Account Withdrawals.--If a portion of 
     a qualified withdrawal for a vessel, barge, or container is 
     made from the ordinary income account, the basis of the 
     vessel, barge, or container shall be reduced by an amount 
     equal to that portion.
       ``(c) Capital Gain Account Withdrawals.--If a portion of a 
     qualified withdrawal for a vessel, barge, or container is 
     made from the capital gain account, the basis of the vessel, 
     barge, or container shall be reduced by an amount equal to 
     that portion.
       ``(d) Withdrawals To Pay Principal.--If a portion of a 
     qualified withdrawal to pay the principal on indebtedness is 
     made from the ordinary income account or the capital gain 
     account, an amount equal to the total reduction that would be 
     required by subsections (b) and (c) if the withdrawal were a 
     qualified withdrawal for a purpose described in those 
     subsections shall be applied, in the order provided in joint 
     regulations, to reduce the basis of vessels, barges, and 
     containers owned by the person maintaining the fund. The 
     remaining amount of the withdrawal shall be treated as a 
     nonqualified withdrawal.
       ``(e) Gain on Property With Reduced Basis.--If property, 
     the basis of which was reduced under subsection (b), (c), or 
     (d), is disposed of, any gain realized on the disposition, to 
     the extent it does not exceed the total reduction in the 
     basis of the property under those subsections, shall be 
     treated as an amount referred to in section 53511(c)(1) of 
     this title withdrawn on the date of disposition of the 
     property. Subject to conditions prescribed in joint 
     regulations, this subsection does not apply to a disposition 
     if there is a redeposit, in an amount determined under joint 
     regulations, that restores the fund as far as practicable to 
     the position it was in before the withdrawal.

     ``Sec. 53511. Tax treatment of nonqualified withdrawals

       ``(a) In General.--Except as provided in section 53513 of 
     this title, a withdrawal from a fund that is not a qualified 
     withdrawal shall be treated as a nonqualified withdrawal.
       ``(b) Order of Withdrawals.--A nonqualified withdrawal 
     shall be treated as made--
       ``(1) first from the ordinary income account;
       ``(2) second from the capital gain account; and
       ``(3) third from the capital account.
       ``(c) Tax Treatment.--For purposes of the Internal Revenue 
     Code of 1986 (26 U.S.C. 1 et seq.)--
       ``(1) a nonqualified withdrawal from the ordinary income 
     account shall be included in income as an item of ordinary 
     income for the taxable year in which the withdrawal is made;
       ``(2) a nonqualified withdrawal from the capital gain 
     account shall be included in income for the taxable year in 
     which the withdrawal is made as an item of gain realized 
     during that year from the disposition of an asset held for 
     more than 6 months; and
       ``(3) for the period through the last date prescribed for 
     payment of tax for the taxable year in which the withdrawal 
     is made--
       ``(A) no interest shall be payable under section 6601 of 
     such Code (26 U.S.C. 6601) and no addition to the tax shall 
     be payable under section 6651 of such Code (26 U.S.C. 6651);
       ``(B) interest on the amount of the additional tax 
     attributable to an amount treated as a nonqualified 
     withdrawal from the ordinary income account or the capital 
     gain account shall be paid at the rate determined under 
     subsection (d) from the last date prescribed for payment of 
     the tax for the taxable year for which the amount was 
     deposited in the fund; and
       ``(C) no interest shall be payable on amounts treated as 
     withdrawn on a last-in-first-out basis under section 53512 of 
     this title.
       ``(d) Interest Rate.--The rate of interest under subsection 
     (c)(3)(B) for a nonqualified withdrawal made in a taxable 
     year beginning after 1971 shall be determined and published 
     jointly by the Secretary and the Secretary of the Treasury. 
     The rate shall be such that its relationship to 8 percent is 
     comparable, as determined by the Secretaries under joint 
     regulations, to the relationship between--
       ``(1) the money rates and investment yields for the 
     calendar year immediately before the beginning of the taxable 
     year; and
       ``(2) the money rates and investment yields for the 
     calendar year 1970.
       ``(e) Nonqualified Withdrawals.--
       ``(1) In general.--The following applicable percentage of 
     any amount that remains in a capital construction fund at the 
     close of the following specified taxable year following the 
     taxable year for which the amount was deposited shall be 
     treated as a nonqualified withdrawal:


[[Page H7620]]


``If the amount remains in the fund at   The applicable percentage is--
  the close of the--
``26th taxable year.....................................20 percent ....

``27th taxable year.....................................40 percent ....

``28th taxable year.....................................60 percent ....

``29th taxable year.....................................80 percent ....

``30th taxable year....................................100 percent.....

       ``(2) Earnings.--The earnings of a capital construction 
     fund for any taxable year (except net gains) shall be treated 
     under this subsection as an amount deposited for the taxable 
     year.
       ``(3) Contract for qualified withdrawal.--Under paragraph 
     (1), an amount shall not be treated as remaining in a capital 
     construction fund at the close of a taxable year to the 
     extent there is a binding contract at the close of the 
     taxable year for a qualified withdrawal of the amount for an 
     identified item for which the withdrawal may be made.
       ``(4) Excess earnings.--If the Secretary determines that 
     the balance in a capital construction fund exceeds the amount 
     appropriate to meet the vessel construction program 
     objectives of the person that established the fund, the 
     amount of the excess shall be treated as a nonqualified 
     withdrawal under paragraph (1) unless the person develops 
     appropriate program objectives within 3 years to dissipate 
     the excess.
       ``(5) Amounts in fund on january 1, 1987.--Under this 
     subsection, amounts in a capital construction fund on January 
     1, 1987, shall be treated as having been deposited in that 
     fund on that date.
       ``(f) Tax Determinations.--
       ``(1) In general.--For a taxable year for which there is a 
     nonqualified withdrawal (including an amount treated as a 
     nonqualified withdrawal under subsection (e)), the tax 
     imposed by chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. ch. 1) shall be determined by--
       ``(A) excluding the withdrawal from gross income; and
       ``(B) increasing the tax imposed by chapter 1 of such Code 
     by the product of the amount of the withdrawal and the 
     highest tax rate specified in section 1 (or section 11 for a 
     corporation) of such Code (26 U.S.C. 1, 11).
       ``(2) Maximum tax rate.--For that portion of a nonqualified 
     withdrawal made from the capital gain account during a 
     taxable year to which section 1(h) or 1201(a) of such Code 
     (26 U.S.C. 1(h), 1201(a)) applies, the tax rate used under 
     subparagraph (A)(ii) may not exceed 15 percent (or 34 percent 
     for a corporation).
       ``(3) Tax benefit rule.--If any portion of a nonqualified 
     withdrawal is properly attributable to deposits (except 
     earnings on deposits) made by the taxpayer in a taxable year 
     that did not reduce the taxpayer's liability for tax under 
     chapter 1 of such Code (26 U.S.C. ch. 1) for a taxable year 
     before the taxable year in which the withdrawal occurs--
       ``(A) that portion shall not be taken into account under 
     paragraph (1); and
       ``(B) an amount equal to that portion shall be allowed as a 
     deduction under section 172 of such Code (26 U.S.C. 172) for 
     the taxable year in which the withdrawal occurs.
       ``(4) Coordination with deduction for net operating 
     losses.--A nonqualified withdrawal excluded from gross income 
     under paragraph (1) shall be excluded in determining taxable 
     income under section 172(b)(2) of such Code (26 U.S.C. 
     172(b)(2)).

     ``Sec. 53512. FIFO and LIFO withdrawals

       ``(a) FIFO.--Except as provided in subsection (b), an 
     amount withdrawn from an account under this chapter shall be 
     treated as withdrawn on a first-in-first-out basis.
       ``(b) LIFO.--An amount withdrawn from an account under this 
     chapter shall be treated as withdrawn on a last-in-first-out 
     basis if it is--
       ``(1) a nonqualified withdrawal for research, development, 
     and design expenses incident to new and advanced vessel 
     design, machinery, and equipment; or
       ``(2) an amount treated as a nonqualified withdrawal under 
     section 53510(d) of this title.

     ``Sec. 53513. Corporate reorganizations and partnership 
       changes

       ``Under joint regulations--
       ``(1) a transfer of a capital construction fund from one 
     person to another person in a transaction to which section 
     381 of the Internal Revenue Code of 1986 (26 U.S.C. 381) 
     applies may be treated as if the transaction is not a 
     nonqualified withdrawal; and
       ``(2) a similar rule shall be applied to a continuation of 
     a partnership (within the meaning of subchapter K of chapter 
     1 of such Code (26 U.S.C. 701 et seq.)).

     ``Sec. 53514. Relationship of old fund to new fund

       ``(a) Definition.--In this section, the term `old fund' 
     means a capital construction fund maintained before October 
     21, 1970.
       ``(b) Election To Maintain Old Fund.--A person maintaining 
     an old fund may elect to continue the old fund, but may not--
       ``(1) hold amounts in the old fund beyond the expiration 
     date provided in the agreement under which the old fund is 
     maintained (determined without regard to an extension or 
     renewal made after April 14, 1970); or
       ``(2) maintain simultaneously the old fund and a new fund 
     established under this chapter.
       ``(c) Application of New Fund Agreement to Old Fund 
     Amounts.--If a person makes an agreement under this chapter 
     to establish a new fund, the person may agree to extend the 
     agreement to some or all of the amounts in an old fund. Each 
     item in the old fund to be transferred shall be transferred 
     in a nontaxable transaction to the appropriate account in the 
     new fund. For purposes of section 53511(c)(3) of this title, 
     the date of the deposit of an item so transferred shall be 
     July 1, 1971, or the date of the deposit in the old fund, 
     whichever is later.

     ``Sec. 53515. Records and reports

       ``A person maintaining a fund under this chapter shall keep 
     records and make reports as required by the Secretary or the 
     Secretary of the Treasury.

     ``Sec. 53516. Termination of agreement after change in 
       regulations

       ``If, after an agreement has been made under this chapter, 
     a change is made either in the joint regulations or in the 
     regulations prescribed by the Secretary under this chapter 
     that could have a substantial effect on the rights or duties 
     of a person maintaining a fund under this chapter, that 
     person may terminate the agreement.

     ``Sec. 53517. Reports

       ``(a) In General.--Within 120 days after the close of each 
     calendar year, the Secretary of Transportation and the 
     Secretary of Commerce each shall provide the Secretary of the 
     Treasury a written report on the capital construction funds 
     under the particular Secretary's jurisdiction for the 
     calendar year.
       ``(b) Contents.--The report shall state the name and 
     taxpayer identification number of each person--
       ``(1) establishing a capital construction fund during the 
     calendar year;
       ``(2) maintaining a capital construction fund on the last 
     day of the calendar year;
       ``(3) terminating a capital construction fund during the 
     calendar year;
       ``(4) making a deposit to or withdrawal from a capital 
     construction fund during the calendar year, and the amount of 
     the deposit or withdrawal; or
       ``(5) having been determined during the calendar year to 
     have failed to fulfill a substantial obligation under a 
     capital construction fund agreement to which the person is a 
     party.

                  ``CHAPTER 537--LOANS AND GUARANTEES

                        ``SUBCHAPTER I--GENERAL

``Sec.
``53701.  Definitions.
``53702.  General authority.
``53703.  Application procedures.
``53704.  Funding limits.
``53705.  Pledge of United States Government.
``53706.  Eligible purposes of obligations.
``53707.  Findings related to obligors and operators.
``53708.  Findings related to economic soundness.
``53709.  Amount of obligations.
``53710.  Contents of obligations.
``53711.  Security interest.
``53712.  Monitoring financial condition and operations of obligor.
``53713.  Administrative fees.
``53714.  Guarantee fees.
``53715.  Escrow fund.
``53716.  Deposit fund.
``53717.  Management of funds in the Treasury.
``53718.  Annual report to Congress.

                  ``SUBCHAPTER II--DEFAULT PROVISIONS

``53721.  Rights of obligee.
``53722.  Actions by Secretary.
``53723.  Payments by Secretary and issuance of obligations.
``53724.  Rights to secured property.
``53725.  Actions against obligor.

                 ``SUBCHAPTER III--PARTICULAR PROJECTS

``53731.  Commercial demonstration ocean thermal energy conversion 
              facilities and plantships.
``53732.  Eligible export vessels.
``53733.  Shipyard modernization and improvement.
``53734.  Replacement of vessels because of changes in operating 
              standards.
``53735.  Fisheries financing and capacity reduction.

                        ``SUBCHAPTER I--GENERAL

     ``Sec. 53701. Definitions

       ``In this chapter:
       ``(1) Actual cost.--The term `actual cost' means the sum 
     of--
       ``(A) all amounts paid by or for the account of the obligor 
     as of the date on which a determination is made under section 
     53715(d)(1) of this title; and
       ``(B) all amounts that the Secretary reasonably estimates 
     the obligor will become obligated to pay from time to time 
     thereafter, for the construction, reconstruction, or 
     reconditioning of the vessel, including guarantee fees that 
     will become payable under section 53714 of this title in 
     connection with all obligations issued for construction, 
     reconstruction, or reconditioning of the vessel or equipment 
     to be delivered, and all obligations issued for the delivered 
     vessel or equipment.
       ``(2) Construction, reconstruction, and reconditioning.--
     The terms `construction', `reconstruction', and 
     `reconditioning' include designing, inspecting, outfitting, 
     and equipping.
       ``(3) Depreciated actual cost.--The term `depreciated 
     actual cost' of a vessel means--
       ``(A) if the vessel was not reconstructed or reconditioned, 
     the actual cost of the vessel depreciated on a straight line 
     basis over the useful life of the vessel as determined by the 
     Secretary, not to exceed 25 years from the date of delivery 
     by the builder; or
       ``(B) if the vessel was reconstructed or reconditioned, the 
     sum of--
       ``(i) the actual cost of the vessel depreciated on a 
     straight line basis from the date of delivery by the builder 
     to the date of the reconstruction or reconditioning, using 
     the original useful life of the vessel, and from the date of 
     the reconstruction or reconditioning, using a useful life of 
     the vessel determined by the Secretary; and
       ``(ii) any amount paid or obligated to be paid for the 
     reconstruction or reconditioning, depreciated on a straight 
     line basis using a useful life of the vessel determined by 
     the Secretary.
       ``(4) Eligible export vessel.--The term `eligible export 
     vessel' means a vessel that--

[[Page H7621]]

       ``(A) is constructed, reconstructed, or reconditioned in 
     the United States for use in world-wide trade; and
       ``(B) will, on delivery or redelivery, become or remain 
     documented under the laws of a country other than the United 
     States.
       ``(5) Fishery facility.--
       ``(A) In general.--Subject to paragraph (B), the term 
     `fishery facility' means--
       ``(i) for operations on land--

       ``(I) a structure or appurtenance thereto designed for the 
     unloading and receiving from vessels, the processing, the 
     holding pending processing, the distribution after 
     processing, or the holding pending distribution, of fish from 
     a fishery;
       ``(II) the land necessary for the structure or 
     appurtenance; and
       ``(III) equipment that is for use with the structure or 
     appurtenance and that is necessary for performing a function 
     referred to in clause (I);

       ``(ii) for operations not on land, a vessel built in the 
     United States and used for, equipped to be used for, or of a 
     type normally used for, the processing of fish; or
       ``(iii) for aquaculture, including operations on land or 
     elsewhere--

       ``(I) a structure or appurtenance thereto designed for 
     aquaculture;
       ``(II) the land necessary for the structure or 
     appurtenance;
       ``(III) equipment that is for use with the structure or 
     appurtenance and that is necessary for performing a function 
     referred to in clause (I); and
       ``(IV) a vessel built in the United States and used for, 
     equipped to be used for, or of a type normally used for, 
     aquaculture.

       ``(B) Required ownership.--Under paragraph (A), the 
     structure, appurtenance, land, equipment, or vessel must be 
     owned by--
       ``(i) an individual who is a citizen of the United States; 
     or
       ``(ii) an entity that is a citizen of the United States 
     under section 50501 of this title and that is at least 75 
     percent owned (as determined under that section) by citizens 
     of the United States.
       ``(6) Fishing vessel.--The term `fishing vessel' has the 
     meaning given that term in section 3 of the Magnuson-Stevens 
     Fishery Conservation and Management Act (16 U.S.C. 1802), and 
     any reference in this chapter to a vessel designed 
     principally for commercial use in the fishing trade or 
     industry is deemed to be a reference to a fishing vessel.
       ``(7) Mortgage.--The term `mortgage' includes--
       ``(A) a preferred mortgage as defined in section 31301 of 
     this title; and
       ``(B) a mortgage on a vessel that will become a preferred 
     mortgage when filed or recorded under chapter 313 of this 
     title.
       ``(8) Obligation.--The term `obligation' means an 
     instrument of indebtedness issued for a purpose described in 
     section 53706 of this title, except--
       ``(A) an obligation issued by the Secretary under section 
     53723 of this title; and
       ``(B) an obligation eligible for investment of funds under 
     section 53715(f) or 53717 of this title.
       ``(9) Obligee.--The term `obligee' means the holder of an 
     obligation.
       ``(10) Obligor.--The term `obligor' means a party primarily 
     liable for payment of the principal of or interest on an 
     obligation.
       ``(11) Ocean thermal energy conversion facility or 
     plantship.--The term `ocean thermal energy conversion 
     facility or plantship' means an at-sea facility or vessel, 
     whether mobile, floating unmoored, moored, or standing on the 
     seabed, that uses temperature differences in ocean water to 
     produce electricity or another form of energy capable of 
     being used directly to perform work, and includes--
       ``(A) equipment installed on the facility or vessel to use 
     the electricity or other form of energy to produce, process, 
     refine, or manufacture a product;
       ``(B) a cable or pipeline used to deliver the electricity, 
     freshwater, or product to shore; and
       ``(C) other associated equipment and appurtenances of the 
     facility or vessel to the extent they are located seaward of 
     the high water mark.
       ``(12) Secretary.--The term `Secretary' means--
       ``(A) the Secretary of Commerce with respect to fishing 
     vessels and fishery facilities; and
       ``(B) the Secretary of Transportation with respect to other 
     vessels and general shipyard facilities (as defined in 
     section 53733(a) of this title).
       ``(13) Vessel.--The term `vessel' means any type of vessel, 
     whether in existence or under construction, including--
       ``(A) a cargo vessel;
       ``(B) a passenger vessel;
       ``(C) a combination cargo and passenger vessel;
       ``(D) a tanker;
       ``(E) a tug or towboat;
       ``(F) a barge;
       ``(G) a dredge;
       ``(H) a floating drydock with a capacity of at least 35,000 
     lifting tons and a beam of at least 125 feet between the wing 
     walls;
       ``(I) an oceanographic research vessel;
       ``(J) an instruction vessel;
       ``(K) a pollution treatment, abatement, or control vessel;
       ``(L) a fishing vessel whose ownership meets the 
     citizenship requirements under section 50501 of this title 
     for documenting vessels to operate in the coastwise trade; 
     and
       ``(M) an ocean thermal energy conversion facility or 
     plantship that is or will be documented under the laws of the 
     United States.

     ``Sec. 53702. General authority

       ``(a) In General.--The Secretary, on terms the Secretary 
     may prescribe, may guarantee or make a commitment to 
     guarantee the payment of the principal of and interest on an 
     obligation eligible to be guaranteed under this chapter. A 
     guarantee or commitment to guarantee shall cover 100 percent 
     of the principal and interest.
       ``(b) Direct Loans for Fisheries.--
       ``(1) In general.--Notwithstanding any other provision of 
     this chapter, any obligation involving a fishing vessel, 
     fishery facility, aquaculture facility, individual fishing 
     quota, or fishing capacity reduction program issued under 
     this chapter after October 11, 1996, shall be a direct loan 
     obligation for which the Secretary shall be the obligee, 
     rather than an obligation issued to an obligee other than the 
     Secretary and guaranteed by the Secretary. A direct loan 
     obligation under this subsection shall be treated in the same 
     manner and to the same extent as an obligation guaranteed 
     under this chapter except with respect to provisions of this 
     chapter that by their nature can only be applied to 
     obligations guaranteed under this chapter.
       ``(2) Interest rate.--Notwithstanding any other provision 
     of this chapter, the annual rate of interest an obligor shall 
     pay on a direct loan obligation under this subsection is 2 
     percent plus the additional percent the Secretary must pay as 
     interest to borrow from the Treasury the funds to make the 
     loan.

     ``Sec. 53703. Application procedures

       ``(a) Time for Decision.--
       ``(1) In general.--The Secretary shall approve or deny an 
     application for a loan guarantee under this chapter within 
     270 days after the date on which the signed application is 
     received by the Secretary.
       ``(2) Extension.--On request by an applicant, the Secretary 
     may extend the 270-day period in paragraph (1) to a date not 
     later than 2 years after the date on which the signed 
     application was received by the Secretary.
       ``(b) Certification of Review.--The Secretary may not 
     guarantee or make a commitment to guarantee an obligation 
     under this chapter unless the Secretary certifies that a full 
     and fair consideration of all the regulatory requirements, 
     including economic soundness and financial requirements 
     applicable to the obligor and related parties, and a thorough 
     assessment of the technical, economic, and financial aspects 
     of the loan application, has been made.

     ``Sec. 53704. Funding limits

       ``(a) General Limitations.--The total unpaid principal 
     amount of obligations guaranteed under this chapter and 
     outstanding at one time may not exceed $12,000,000,000. Of 
     that amount--
       ``(1) $850,000,000 shall be limited to obligations related 
     to fishing vessels and fishery facilities; and
       ``(2) $3,000,000,000 shall be limited to obligations 
     related to eligible export vessels.
       ``(b) Additional Limitations.--Additional limitations may 
     not be imposed on new commitments to guarantee loans for any 
     fiscal year, except in amounts established in advance by 
     annual authorization laws. A vessel eligible for a guarantee 
     under this chapter may not be denied eligibility because of 
     its type.
       ``(c) Limits Based on Risk Factors.--
       ``(1) Definition.--In this subsection, the term `cost' has 
     the meaning given that term in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a).
       ``(2) System of risk categories.--The Secretary shall--
       ``(A) establish, and update annually, a system of risk 
     categories for obligations guaranteed under this chapter that 
     categorizes the relative risk of guarantees based on the risk 
     factors set forth in paragraph (4);
       ``(B) determine annually for each risk category a subsidy 
     rate equivalent to the cost of obligations in the category, 
     expressed as a percentage of the amount guaranteed for 
     obligations in the category; and
       ``(C) ensure that each risk category is comprised of loans 
     that are relatively homogeneous in cost and share 
     characteristics predictive of defaults and other costs, given 
     the facts known at the time of obligation or commitment, 
     using a risk category system that is based on historical 
     analysis of program data and statistical evidence concerning 
     the likely costs of defaults or other costs that are expected 
     to be associated with the loans in the category.
       ``(3) Use of system.--
       ``(A) Placing obligation in category.--Before making a 
     guarantee under this chapter for an obligation, and annually 
     for projects subject to a guarantee, the Secretary shall 
     apply the risk factors specified in paragraph (4) to place 
     the obligation in a risk category established under paragraph 
     (2).
       ``(B) Reduction of available amount.--The Secretary shall 
     consider the total amount available to the Secretary for 
     making guarantees under this chapter to be reduced by the 
     amount determined by multiplying--
       ``(i) the amount guaranteed under this chapter for an 
     obligation; by
       ``(ii) the subsidy rate for the category in which the 
     obligation is placed under subparagraph (A).
       ``(C) Estimated cost.--The estimated cost to the United 
     States Government of a guarantee under this chapter for an 
     obligation is deemed to be the amount determined under 
     subparagraph (B) for the obligation.
       ``(D) Restriction on further guarantees.--The Secretary may 
     not guarantee obligations under this chapter after the total 
     amount available to the Secretary under appropriations laws 
     for the cost of loan guarantees is considered to be reduced 
     to zero under subparagraph (B).
       ``(4) Risk factors.--The risk factors referred to in this 
     subsection are--
       ``(A) if applicable, the country risk for each eligible 
     export vessel financed or to be financed by an obligation;

[[Page H7622]]

       ``(B) the period for which an obligation is guaranteed or 
     to be guaranteed;
       ``(C) the amount of an obligation guaranteed or to be 
     guaranteed in relation to the total cost of the project 
     financed or to be financed by the obligation;
       ``(D) the financial condition of an obligor or applicant 
     for a guarantee;
       ``(E) if applicable, other guarantees related to the 
     project;
       ``(F) if applicable, the projected employment of each 
     vessel or equipment to be financed with an obligation;
       ``(G) if applicable, the projected market that will be 
     served by each vessel or equipment to be financed with an 
     obligation;
       ``(H) the collateral provided for a guarantee for an 
     obligation;
       ``(I) the management and operating experience of an obligor 
     or applicant for a guarantee;
       ``(J) whether a guarantee under this chapter is or will be 
     in effect during the construction period of the project; and
       ``(K) the concentration risk presented by an unduly large 
     percentage of loans outstanding by any one borrower or group 
     of affiliated borrowers.

     ``Sec. 53705. Pledge of United States Government

       ``(a) Full Faith and Credit.--The full faith and credit of 
     the United States Government is pledged to the payment of a 
     guarantee made under this chapter, for both principal and 
     interest, including interest (as may be provided for in the 
     guarantee) accruing between the date of default under a 
     guaranteed obligation and the date of payment in full of the 
     guarantee.
       ``(b) Incontestability.--A guarantee or commitment to 
     guarantee made under this chapter is conclusive evidence of 
     the eligibility of the obligation for the guarantee. The 
     validity of a guarantee or commitment to guarantee made under 
     this chapter is incontestable.

     ``Sec. 53706. Eligible purposes of obligations

       ``(a) In General.--To be eligible for a guarantee under 
     this chapter, an obligation must aid in any of the following:
       ``(1)(A) Financing (including reimbursement of an obligor 
     for expenditures previously made for) the construction, 
     reconstruction, or reconditioning of a vessel (including an 
     eligible export vessel) designed principally for research, or 
     for commercial use--
       ``(i) in the coastwise or intercoastal trade;
       ``(ii) on the Great Lakes, or on bays, sounds, rivers, 
     harbors, or inland lakes of the United States;
       ``(iii) in foreign trade as defined in section 109(b) of 
     this title;
       ``(iv) as an ocean thermal energy conversion facility or 
     plantship;
       ``(v) as a floating drydock in the construction, 
     reconstruction, reconditioning, or repair of vessels; or
       ``(vi) as an eligible export vessel in worldwide trade.
       ``(B) A guarantee under subparagraph (A) may not be made 
     more than one year after delivery of the vessel (or 
     redelivery if the vessel was reconstructed or reconditioned) 
     unless the proceeds of the obligation are used to finance the 
     construction, reconstruction, or reconditioning of a vessel 
     or of facilities or equipment related to marine operations.
       ``(2) Financing (including reimbursement of an obligor for 
     expenditures previously made for) the construction, 
     reconstruction, reconditioning, or purchase of a vessel owned 
     by citizens of the United States and designed principally for 
     research, or for commercial use in the fishing industry.
       ``(3) Financing the purchase, reconstruction, or 
     reconditioning of a vessel or fishery facility--
       ``(A) for which an obligation was guaranteed under this 
     chapter; and
       ``(B) that, under subchapter II of this chapter--
       ``(i) is a vessel or fishery facility for which an 
     obligation was accelerated and paid;
       ``(ii) was acquired by the Federal Ship Financing Fund or 
     successor account under section 53717 of this title; or
       ``(iii) was sold at foreclosure begun by the Secretary.
       ``(4) Financing any part of the repayment to the United 
     States Government of any amount of a construction-
     differential subsidy paid for a vessel.
       ``(5) Refinancing an existing obligation (regardless of 
     whether guaranteed under this chapter) issued for a purpose 
     described in clauses (1)-(4), including a short-term 
     obligation incurred to obtain temporary funds with the 
     intention of refinancing.
       ``(6) Financing or refinancing (including reimbursement of 
     an obligor for expenditures previously made for) the 
     construction, reconstruction, reconditioning, or purchase of 
     a fishery facility.
       ``(7) Financing or refinancing (including reimbursement of 
     an obligor for expenditures previously made for) the purchase 
     of an individual fishing quota in accordance with section 
     303(d)(4) of the Magnuson-Stevens Fishery Conservation and 
     Management Act (16 U.S.C. 1853(d)(4)).
       ``(b) Non-Vessels Treated as Vessels.--An obligation 
     guaranteed under subsection (a)(6) or (7) shall be treated, 
     for purposes of this chapter, in the same manner and to the 
     same extent as an obligation that aids in financing the 
     construction, reconstruction, reconditioning, or purchase of 
     a vessel, except with respect to provisions that by their 
     nature can only be applied to vessels.
       ``(c) Priorities for Certain Vessels.--In guaranteeing or 
     making a commitment to guarantee an obligation under this 
     chapter, the Secretary shall give priority to--
       ``(1) a vessel that is otherwise eligible for a guarantee 
     and is constructed with assistance under subtitle D of the 
     Maritime Security Act of 2003 (46 U.S.C. 53101 note); and
       ``(2) after applying clause (1), a vessel that is otherwise 
     eligible for a guarantee and that the Secretary of Defense 
     determines--
       ``(A) is suitable for service as a naval auxiliary in time 
     of war or national emergency; and
       ``(B) meets a shortfall in sealift capacity or capability.

     ``Sec. 53707. Findings related to obligors and operators

       ``(a) Responsible Obligor.--The Secretary may not guarantee 
     or make a commitment to guarantee an obligation under this 
     chapter unless the Secretary finds that the obligor is 
     responsible and has the ability, experience, financial 
     resources, and other qualifications necessary for the 
     adequate operation and maintenance of each vessel that will 
     serve as security for the guarantee.
       ``(b) Operators of Liner Vessels.--The Secretary of 
     Transportation may not guarantee or make a commitment to 
     guarantee a loan for the construction, reconstruction, or 
     reconditioning of a liner vessel under this chapter unless 
     the Chairman of the Federal Maritime Commission certifies 
     that the operator of the vessel has not been found by the 
     Commission to have committed, within the previous 5 years--
       ``(1) a violation of part A of subtitle IV of this title 
     that 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; or
       ``(2) a violation of part B of subtitle IV of this title.
       ``(c) Operators of Fishing Vessels.--The Secretary of 
     Commerce may not guarantee or make a commitment to guarantee 
     a loan for the construction, reconstruction, or 
     reconditioning of a fishing vessel under this chapter if the 
     operator of the vessel has been--
       ``(1) held liable or liable in rem for a civil penalty 
     under section 1858 of title 16 and not paid the penalty;
       ``(2) found guilty of an offense under section 1859 of 
     title 16 and not paid the assessed fine or served the 
     assessed sentence;
       ``(3) held liable for a civil or criminal penalty under 
     section 1375 of title 16 and not paid the assessed fine or 
     served the assessed sentence; or
       ``(4) held liable for a civil penalty by the Coast Guard 
     under this title or title 33 and not paid the assessed fine.
       ``(d) Waivers Concerning Financial Condition.--The 
     Secretary shall prescribe regulations concerning 
     circumstances under which waivers of, or exceptions to, 
     otherwise applicable regulatory requirements concerning 
     financial condition can be made. The regulations shall 
     require that--
       ``(1) the economic soundness requirements in section 
     53708(a) of this title are met after the waiver of the 
     financial condition requirement; and
       ``(2) the waiver shall provide for the imposition of other 
     requirements on the obligor designed to compensate for the 
     increased risk associated with the obligor's failure to meet 
     regulatory requirements applicable to financial condition.

     ``Sec. 53708. Findings related to economic soundness

       ``(a) By Secretary of Transportation.--The Secretary of 
     Transportation may not guarantee or make a commitment to 
     guarantee an obligation under this chapter unless the 
     Secretary finds that the property or project for which the 
     obligation will be executed will be economically sound. In 
     making that finding, the Secretary shall consider--
       ``(1) the need in the particular segment of the maritime 
     industry for new or additional capacity, including any impact 
     on existing equipment for which a guarantee under this 
     chapter is in effect;
       ``(2) the market potential for employment of the vessel 
     over the life of the guarantee;
       ``(3) projected revenues and expenses associated with 
     employment of the vessel;
       ``(4) any charter, contract of affreightment, 
     transportation agreement, or similar agreement or undertaking 
     relevant to the employment of the vessel;
       ``(5) other relevant criteria; and
       ``(6) for inland waterways, the need for technical 
     improvements, including increased fuel efficiency or improved 
     safety.
       ``(b) By Secretary of Commerce.--The Secretary of Commerce 
     may not guarantee or make a commitment to guarantee an 
     obligation under this chapter unless the Secretary finds, at 
     or prior to the time the commitment is made or the guarantee 
     becomes effective, that--
       ``(1) the property or project for which the obligation will 
     be executed will be economically sound; and
       ``(2) for a fishing vessel, the purpose of the financing or 
     refinancing is consistent with--
       ``(A) the wise use of the fisheries resources and the 
     development, advancement, management, conservation, and 
     protection of the fisheries resources; or
       ``(B) the need for technical improvements, including 
     increased fuel efficiency or improved safety.
       ``(c) Used Fishing Vessels and Facilities.--The Secretary 
     of Commerce may not guarantee or make a commitment to 
     guarantee an obligation under this chapter for the purchase 
     of a used fishing vessel or used fishery facility unless the 
     vessel or facility will be--
       ``(1) reconstructed or reconditioned in the United States 
     and will contribute to the development of the United States 
     fishing industry; or
       ``(2) used--
       ``(A) in the harvesting of fish from an underused fishery; 
     or
       ``(B) for a purpose described in the definition of `fishery 
     facility' in section 53701 of this title with respect to an 
     underused fishery.
       ``(d) Independent Analysis.--The Secretary may make a 
     determination that aspects of an

[[Page H7623]]

     application under this chapter require independent analysis 
     to be conducted by third party experts due to risk factors 
     associated with markets, technology, financial structures, or 
     other risk factors identified by the Secretary. Any 
     independent analysis conducted under this subsection shall be 
     performed by a party chosen by the Secretary.
       ``(e) Additional Equity Because of Increased Risks.--
     Notwithstanding any other provision of this chapter, the 
     Secretary may make a determination that an application under 
     this title requires additional equity because of increased 
     risk factors associated with markets, technology, financial 
     structures, or other risk factors identified by the 
     Secretary.

     ``Sec. 53709. Amount of obligations

       ``(a) In General.--The principal of an obligation may not 
     be guaranteed in an amount greater than the amount determined 
     by multiplying the percentage applicable under subsection (b) 
     by--
       ``(1) the amount paid by or for the account of the obligor 
     (as determined by the Secretary, which determination shall be 
     conclusive) for the construction, reconstruction, or 
     reconditioning of the vessel used as security for the 
     guarantee; or
       ``(2) if the obligor creates an escrow fund under section 
     53715 of this title, the actual cost of the vessel.
       ``(b) Limitations on Amount Borrowed.--
       ``(1) In general.--Except as otherwise provided, the 
     principal amount of an obligation guaranteed under this 
     chapter may not exceed 75 percent of the actual cost or 
     depreciated actual cost, as determined by the Secretary, of 
     the vessel used as security for the guarantee.
       ``(2) Certain approved vessels.--The principal amount may 
     not exceed 87.5 percent of the actual cost or depreciated 
     actual cost if--
       ``(A) the size and speed of the vessel are approved by the 
     Secretary;
       ``(B) the vessel is or would have been eligible for 
     mortgage aid for construction under section 509 of the 
     Merchant Marine Act, 1936, or would have been eligible except 
     that the vessel was built with a construction-differential 
     subsidy and the subsidy has been repaid; and
       ``(C) the vessel is of a type described in that section for 
     which the minimum down payment required by that section is 
     12.5 percent of the cost of the vessel.
       ``(3) Barges.--For a barge constructed without a 
     construction-differential subsidy or for which the subsidy 
     has been repaid, the principal amount may not exceed 87.5 
     percent of the actual cost or depreciated actual cost.
       ``(4) Fishing vessels and fishery facilities.--For a 
     fishing vessel or fishery facility, the principal amount may 
     not exceed 80 percent of the actual cost or depreciated 
     actual cost. However, debt for the vessel or facility may not 
     be placed through the Federal Financing Bank.
       ``(5) OTEC.--For an ocean thermal energy conversion 
     facility or plantship constructed without a construction-
     differential subsidy, the principal amount may not exceed 
     87.5 percent of the actual cost or depreciated actual cost of 
     the facility or plantship.
       ``(6) Eligible export vessels.--For an eligible export 
     vessel, the principal amount may not exceed 87.5 percent of 
     the actual cost or depreciated actual cost.
       ``(c) Security Involving Multiple Vessels.--The principal 
     amount of an obligation having more than one vessel as 
     security for the guarantee may not exceed the sum of the 
     principal amounts allowable for all the vessels.
       ``(d) Prohibition on Uniform Percentage Limitations.--The 
     Secretary may not establish a percentage under any provision 
     of subsection (b) that is to be applied uniformly to all 
     guarantees or commitments to guarantee made under that 
     provision.
       ``(e) Prohibition on Minimum Principal Amount.--The 
     Secretary may not establish, as a condition of eligibility 
     for a guarantee under this chapter, a minimum principal 
     amount for an obligation covering the reconstruction or 
     reconditioning of a fishing vessel or fishery facility. For 
     purposes of this chapter, the reconstruction or 
     reconditioning of a fishing vessel or fishery facility does 
     not include the routine minor repair or maintenance of the 
     vessel or facility.

     ``Sec. 53710. Contents of obligations

       ``(a) In General.--An obligation guaranteed under this 
     chapter must--
       ``(1) provide for payments by the obligor satisfactory to 
     the Secretary;
       ``(2) provide for interest (exclusive of guarantee fees and 
     other fees) at a rate not more than the annual rate on the 
     unpaid principal that the Secretary determines is reasonable, 
     considering the range of interest rates prevailing in the 
     private market for similar loans and the risks assumed by the 
     Secretary;
       ``(3) have a maturity date satisfactory to the Secretary, 
     but--
       ``(A) not more than 25 years after the date of delivery of 
     the vessel used as security for the guarantee; or
       ``(B) if the vessel has been reconstructed or 
     reconditioned, not more than the later of--
       ``(i) 25 years after the date of delivery of the vessel; or
       ``(ii) the remaining years of useful life of the vessel as 
     determined by the Secretary; and
       ``(4) provide, or a related agreement must provide, that if 
     the vessel used as security for the guarantee is a delivered 
     vessel, the vessel shall be--
       ``(A) in class A-1, American Bureau of Shipping, or meet 
     other standards acceptable to the Secretary, with all 
     required certificates, including marine inspection 
     certificates of the Coast Guard or, in the case of an 
     eligible export vessel, of the appropriate national flag 
     authorities under a treaty, convention, or other 
     international agreement to which the United States Government 
     is a party, and with all outstanding requirements and 
     recommendations necessary for class retention accomplished, 
     unless the Secretary permits a deferment of repairs necessary 
     to meet these requirements; and
       ``(B) well equipped, in good repair, and in every respect 
     seaworthy and fit for service.
       ``(b) Provisions for Certain Passenger Vessels.--
       ``(1) In general.--With the Secretary's approval, if the 
     vessel used as security for the guarantee is a passenger 
     vessel having the tonnage, speed, passenger accommodations, 
     and other characteristics described in section 503 of the 
     Merchant Marine Act, 1936, an obligation guaranteed under 
     this chapter or a related agreement may provide that--
       ``(A) the only recourse by the Government against the 
     obligor for payments under the guarantee will be repossession 
     of the vessel and assignment of insurance claims; and
       ``(B) the obligor's liability for payments under the 
     guarantee will be satisfied and discharged by the surrender 
     of the vessel and all interest in the vessel to the 
     Government in the condition described in paragraph (2).
       ``(2) Surrender of vessel.--
       ``(A) In general.--On surrender, the vessel must be--
       ``(i) free and clear of all liens and encumbrances except 
     the security interest conveyed to the Secretary under this 
     chapter;
       ``(ii) in class; and
       ``(iii) in as good order and condition (ordinary wear and 
     tear excepted) as when acquired by the obligor.
       ``(B) Covering deficiencies by insurance.--To the extent 
     covered by insurance, a deficiency related to a requirement 
     in subparagraph (A) may be satisfied by assignment of the 
     obligor's insurance claims to the Government.
       ``(c) Other Provisions To Protect Security Interests.--An 
     obligation guaranteed under this chapter and any related 
     agreement must contain other provisions for the protection of 
     the security interests of the Government (including 
     acceleration, assumption, and subrogation provisions and the 
     issuance of notes by the obligor to the Secretary), liens and 
     releases of liens, payment of taxes, and other matters that 
     the Secretary may prescribe.

     ``Sec. 53711. Security interest

       ``(a) In General.--The Secretary may guarantee an 
     obligation under this chapter only if the obligor conveys or 
     agrees to convey to the Secretary a security interest the 
     Secretary considers necessary to protect the interest of the 
     United States Government.
       ``(b) Multiple Vessels and Types of Security.--The security 
     interest may relate to more than one vessel and may consist 
     of more than one type of security. If the security interest 
     relates to more than one vessel, the obligation may have the 
     latest maturity date allowable under section 53710(a)(3) of 
     this title for any of the vessels used as security for the 
     guarantee. However, the Secretary may require such payments 
     of principal prior to maturity, with respect to all related 
     obligations, as the Secretary considers necessary to 
     maintain adequate security for the guarantee.

     ``Sec. 53712. Monitoring financial condition and operations 
       of obligor

       ``(a) In General.--The Secretary shall monitor the 
     financial condition and operations of the obligor on a 
     regular basis during the term of the guarantee. The Secretary 
     shall document the results of the monitoring on an annual or 
     quarterly basis depending on the condition of the obligor. If 
     the Secretary determines that the financial condition of the 
     obligor warrants additional protections to the Secretary, the 
     Secretary shall take appropriate action under subsection (b). 
     If the Secretary determines that the financial condition of 
     the obligor jeopardizes its continued ability to perform its 
     responsibilities in connection with the guarantee of an 
     obligation by the Secretary, the Secretary shall make an 
     immediate determination whether default should take place and 
     whether further measures described in subsection (b) should 
     be taken to protect the interests of the Secretary while 
     ensuring that program objectives are met.
       ``(b) Contract Provisions To Protect Secretary.--The 
     Secretary shall include provisions in a loan agreement with 
     an obligor that provides additional authority to the 
     Secretary to take action to limit potential losses in 
     connection with a defaulted loan or a loan that is in 
     jeopardy due to the deteriorating financial condition of the 
     obligor. These provisions include requirements for additional 
     collateral or greater equity contributions that are effective 
     upon the occurrence of verifiable conditions relating to the 
     obligor's financial condition or the status of the vessel or 
     shipyard project.

     ``Sec. 53713. Administrative fees

       ``(a) In General.--The Secretary shall charge and collect 
     from the obligor fees the Secretary considers reasonable 
     for--
       ``(1) investigating an application for a guarantee;
       ``(2) appraising property offered as security for a 
     guarantee;
       ``(3) issuing a commitment;
       ``(4) providing services related to an escrow fund under 
     section 53715 of this title; and
       ``(5) inspecting property during construction, 
     reconstruction, or reconditioning.
       ``(b) Total Fee Limitation.--The total fees under 
     subsection (a) may not exceed 0.5 percent of the original 
     principal amount of the obligations to be guaranteed.
       ``(c) Fees for Independent Analysis.--The Secretary may 
     charge and collect fees to cover the costs of independent 
     analysis under section 53708(d) of this title. 
     Notwithstanding section 3302 of title 31, any fee collected 
     under this subsection shall--
       ``(1) be credited as an offsetting collection to the 
     account that finances the administration of the loan 
     guarantee program;

[[Page H7624]]

       ``(2) be available for expenditure only to pay the costs of 
     activities and services for which the fee is imposed; and
       ``(3) remain available until expended.

     ``Sec. 53714. Guarantee fees

       ``(a) Regulations.--Subject to this section, the Secretary 
     shall prescribe regulations to assess a fee for guaranteeing 
     an obligation under this chapter.
       ``(b) Computation of Fee.--
       ``(1) In general.--The amount of the fee for a guarantee 
     under this chapter shall be equal to the sum of the amounts 
     determined under paragraph (2) for the years in which the 
     guarantee is in effect.
       ``(2) Present value for each year.--The amount referred to 
     in paragraph (1) for a year in which the guarantee is in 
     effect is the present value of the amount calculated under 
     paragraph (3). To determine the present value, the Secretary 
     shall apply a discount rate determined by the Secretary of 
     the Treasury, considering current market yields on 
     outstanding obligations of the United States Government 
     having periods to maturity comparable to the period to 
     maturity for the guaranteed obligation.
       ``(3) Calculation of amount.--The amount referred to in 
     paragraph (2) shall be calculated by multiplying--
       ``(A) the estimated average unpaid principal amount of the 
     obligation that will be outstanding during the year 
     (excluding the average amount, other than interest, on 
     deposit during the year in an escrow fund under section 53715 
     of this title); by
       ``(B) the fee rate set under paragraph (4).
       ``(4) Setting fee rates.--To set the fee rate referred to 
     in paragraph (3)(B), the Secretary shall establish a formula 
     that--
       ``(A) takes into account the security provided for the 
     guaranteed obligation; and
       ``(B) is a sliding scale based on the creditworthiness of 
     the obligor, using--
       ``(i) the lowest allowable rate under paragraph (5) for the 
     most creditworthy obligors; and
       ``(ii) the highest allowable rate under paragraph (5) for 
     the least creditworthy obligors.
       ``(5) Permissible range of rates.--The fee rate set under 
     paragraph (4) shall be--
       ``(A) for a delivered vessel or equipment, at least 0.5 
     percent and not more than 1 percent; and
       ``(B) for a vessel to be constructed, reconstructed, or 
     reconditioned or equipment to be delivered, at least 0.25 
     percent and not more than 0.5 percent.
       ``(c) When Fee Collected.--A fee for the guarantee of an 
     obligation under this chapter shall be collected not later 
     than the date on which an amount is first paid on the 
     obligation.
       ``(d) Financing the Fee.--A fee paid under this section is 
     eligible to be financed under this chapter and shall be 
     included in the actual cost of the obligation guaranteed.
       ``(e) Not Refundable.--A fee paid under this section is not 
     refundable. However, an obligor shall receive credit for the 
     amount paid for the remaining term of the obligation if the 
     obligation is refinanced and guaranteed under this chapter 
     after the refinancing.

     ``Sec. 53715. Escrow fund

       ``(a) In General.--If the proceeds of an obligation 
     guaranteed under this chapter are to be used to finance the 
     construction, reconstruction, or reconditioning of a vessel 
     that will serve as security for a guarantee under this 
     chapter, the Secretary may accept and hold in escrow, under 
     an escrow agreement with the obligor, a portion of the 
     proceeds of all obligations guaranteed under this chapter 
     whose proceeds are to be so used which is equal to--
       ``(1) the excess of--
       ``(A) the principal amount of all obligations whose 
     proceeds are to be so used; over
       ``(B) 75 percent or 87.5 percent, whichever is applicable 
     under section 53709(b) of this title, of the amount paid by 
     or for the account of the obligor for the construction, 
     reconstruction, or reconditioning of the vessel; plus
       ``(2) any interest the Secretary may require on the amount 
     described in clause (1).
       ``(b) Security Involving Both Uncompleted and Delivered 
     Vessels.--If the security for the guarantee of an obligation 
     relates both to a vessel to be constructed, reconstructed, or 
     reconditioned and to a delivered vessel, the principal amount 
     of the obligation shall be prorated for purposes of 
     subsection (a) under regulations prescribed by the Secretary.
       ``(c) Disbursement Before Termination of Agreement.--
       ``(1) Purposes.--The Secretary shall disburse amounts in 
     the escrow fund, as specified in the escrow agreement, to--
       ``(A) pay amounts the obligor is obligated to pay for--
       ``(i) the construction, reconstruction, or reconditioning 
     of a vessel used as security for the guarantee; and
       ``(ii) interest on the obligations;
       ``(B) redeem the obligations under a refinancing guaranteed 
     under this chapter; and
       ``(C) pay any excess interest deposits to the obligor at 
     times provided for in the escrow agreement.
       ``(2) Manner of payment.--If a payment becomes due under 
     the guarantee before the termination of the escrow agreement, 
     the amount in the escrow fund at the time the payment becomes 
     due, including realized income not yet paid to the obligor, 
     shall be paid into the appropriate account under section 
     53717 of this title. The amount shall be credited against 
     amounts due or to become due from the obligor to the 
     Secretary on the guaranteed obligations or, to the extent not 
     so required, be paid to the obligor.
       ``(d) Payments Required Before Disbursement.--
       ``(1) In general.--No disbursement shall be made under 
     subsection (c) to any person until the total amount paid by 
     or for the account of the obligor from sources other than the 
     proceeds of the obligation equals at least 25 percent or 12.5 
     percent, whichever is applicable under section 53709(b) of 
     this title, of the aggregate actual cost of the vessel, as 
     previously approved by the Secretary. If the aggregate actual 
     cost of the vessel has increased since the Secretary's 
     initial approval or if it increases after the first 
     disbursement is permitted under this subsection, then no 
     further disbursements shall be made under subsection (c) 
     until the total amount paid by or for the account of the 
     obligor from sources other than the proceeds of the 
     obligation equals at least 25 percent or 12.5 percent, as 
     applicable, of the increase, as determined by the Secretary, 
     in the aggregate actual cost of the vessel. This paragraph 
     does not require the Secretary to consent to finance any 
     increase in actual cost unless the Secretary determines that 
     such an increase in the obligation meets all the terms and 
     conditions of this chapter or other applicable law.
       ``(2) Documented proof of progress requirement.--The 
     Secretary shall, by regulation, establish a transparent, 
     independent, and risk-based process for verifying and 
     documenting the progress of projects under construction 
     before disbursing guaranteed loan funds. At a minimum, the 
     process shall require documented proof of progress in 
     connection with the construction, reconstruction, or 
     reconditioning of a vessel or vessels before disbursements 
     are made from the escrow fund. The Secretary may require that 
     the obligor provide a certificate from an independent party 
     certifying that the requisite progress in construction, 
     reconstruction, or reconditioning has taken place.
       ``(e) Disbursement on Termination of Agreement.--
       ``(1) In general.--If a payment has not become due under 
     the guarantee before the termination of the escrow agreement, 
     the balance of the escrow fund at the time of termination 
     shall be disbursed to--
       ``(A) prepay the excess of--
       ``(i) the principal amount of all obligations whose 
     proceeds are to be used to finance the construction, 
     reconstruction, or reconditioning of the vessel used or to be 
     used as security for the guarantee; over
       ``(ii) 75 percent or 87.5 percent, whichever is applicable 
     under section 53709(b) of this title, of the actual cost of 
     the vessel to the extent paid; and
       ``(B) pay interest on that prepaid amount of principal.
       ``(2) Remaining balance.--Any remaining balance of the 
     escrow fund shall be paid to the obligor.
       ``(f) Investment.--The Secretary may invest and reinvest 
     any part of an escrow fund in obligations of the United 
     States Government with maturities such that the escrow fund 
     will be available as required for purposes of the escrow 
     agreement. Investment income shall be paid to the obligor 
     when received.
       ``(g) Terms To Protect Government.--The escrow agreement 
     shall contain other terms the Secretary considers necessary 
     to protect fully the interests of the Government.

     ``Sec. 53716. Deposit fund

       ``(a) In General.--There is a deposit fund in the Treasury 
     for purposes of this section. The Secretary, in accordance 
     with an agreement under subsection (b), may deposit into and 
     hold in the fund cash belonging to an obligor to serve as 
     collateral for a guarantee made under this chapter with 
     respect to the obligor.
       ``(b) Agreement.--The Secretary and an obligor shall make a 
     reserve fund or other collateral account agreement to govern 
     the deposit, withdrawal, retention, use, and reinvestment of 
     cash of the obligor held in the fund. The agreement shall 
     contain--
       ``(1) terms and conditions required by this section;
       ``(2) terms that grant to the United States Government a 
     security interest in all amounts deposited into the fund; and
       ``(3) any additional terms considered by the Secretary to 
     be necessary to protect fully the interests of the 
     Government.
       ``(c) Investment.--The Secretary may invest and reinvest 
     any part of the amounts in the fund in obligations of the 
     Government with maturities such that amounts in the fund will 
     be available as required for purposes of the agreement under 
     subsection (b). Cash balances in the fund in excess of 
     current requirements shall be maintained in a form of 
     uninvested funds, and the Secretary of the Treasury shall pay 
     interest on these funds.
       ``(d) Withdrawals.--
       ``(1) In general.--Cash deposited into the fund may not be 
     withdrawn without the consent of the Secretary.
       ``(2) Use of income.--Subject to paragraph (3), the 
     Secretary may pay any income earned on cash of an obligor 
     deposited into the fund in accordance with the agreement with 
     the obligor under subsection (b).
       ``(3) Retention against default.--The Secretary may retain 
     and offset any or all of the cash of an obligor in the fund, 
     and any income realized thereon, as part of the Secretary's 
     recovery against the obligor in case of a default by the 
     obligor on an obligation.

     ``Sec. 53717. Management of funds in the Treasury

       ``(a) Definition.--In this section, the term `FCRA' means 
     the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
       ``(b) Loan Guarantees by Secretary of Transportation.--
       ``(1) When not subject to fcra.--The Secretary of 
     Transportation shall account for payments and disbursements 
     involving obligations guaranteed under this chapter and not 
     subject to FCRA in an account in the Treasury entitled the 
     Federal Ship Financing Fund Liquidating Account (a 
     liquidating account as defined in FCRA).

[[Page H7625]]

       ``(2) When subject to fcra.--The Secretary of 
     Transportation shall account for payments and disbursements 
     involving obligations guaranteed under this chapter and 
     subject to FCRA in a separate account in the Treasury 
     entitled the Federal Ship Financing Guaranteed Loan Financing 
     Account (a financing account as defined in FCRA).
       ``(c) Loan Guarantees by Secretary of Commerce.--
       ``(1) When not subject to fcra.--The Secretary of Commerce 
     shall account for payments and disbursements involving 
     obligations guaranteed under this chapter and not subject to 
     FCRA in a separate account in the Treasury established for 
     this purpose.
       ``(2) When subject to fcra.--The Secretary of Commerce 
     shall account for payments and disbursements involving 
     obligations guaranteed under this chapter and subject to FCRA 
     in a separate account in the Treasury established for this 
     purpose.
       ``(d) Direct Loans by Secretary of Commerce.--The Secretary 
     of Commerce shall account for payments and disbursements 
     involving direct loans made under this chapter in a separate 
     account in the Treasury established for this purpose.

     ``Sec. 53718. Annual report to Congress

       ``The Secretary of Transportation shall report to Congress 
     annually on the loan guarantee program under this chapter. 
     Each report shall include--
       ``(1) the size, in dollars, of the portfolio of loans 
     guaranteed;
       ``(2) the size, in dollars, of projects in the portfolio 
     facing financial difficulties;
       ``(3) the number and type of projects covered;
       ``(4) a profile of pending loan applications;
       ``(5) the amount of appropriations available for new 
     guarantees;
       ``(6) a profile of each project approved since the last 
     report; and
       ``(7) a profile of any defaults since the last report.

                  ``SUBCHAPTER II--DEFAULT PROVISIONS

     ``Sec. 53721. Rights of obligee

       ``(a) Demands by Obligees.--Except as provided in 
     subsection (c), if an obligor has continued in default for 30 
     days in the payment of principal or interest on an obligation 
     guaranteed under this chapter, the obligee or the obligee's 
     agent may demand that the Secretary pay the unpaid principal 
     amount of the obligation and the unpaid interest on the 
     obligation to the date of payment. The demand must be made 
     within the earlier of--
       ``(1) a period that may be specified in the guarantee or a 
     related agreement; or
       ``(2) 90 days from the date of the default.
       ``(b) Payments by Secretary.--
       ``(1) In general.--If a demand is made under subsection 
     (a), the Secretary shall pay to the obligee or the obligee's 
     agent the unpaid principal amount of the obligation and the 
     unpaid interest on the obligation to the date of payment. 
     Payment shall be made within the earlier of--
       ``(A) a period that may be specified in the guarantee or a 
     related agreement; or
       ``(B) 30 days from the date of the demand.
       ``(2) If no existing default.--The Secretary is not 
     required to make payment under this subsection if, within the 
     appropriate period under paragraph (1), the Secretary finds 
     that the obligor was not in default or that the default was 
     remedied before the demand.
       ``(c) Assumption of Rights and Obligations Before Demand.--
     An obligee or the obligee's agent may not demand payment 
     under this section if the Secretary, before the demand and on 
     terms that may be provided in the obligation or a related 
     agreement, has assumed the obligor's rights and duties under 
     the obligation and any related agreement and made any payment 
     in default. However, the guarantee of the obligation remains 
     in effect after the Secretary's assumption.

     ``Sec. 53722. Actions by Secretary

       ``(a) General Authority.--On default under an obligation or 
     related agreement between the Secretary and the obligor, the 
     Secretary, on terms that may be provided in the obligation or 
     agreement, may--
       ``(1) assume the obligor's rights and duties under the 
     obligation or agreement, make any payment in default, and 
     notify the obligee or the obligee's agent of the default and 
     the Secretary's assumption; or
       ``(2) notify the obligee or the obligee's agent of the 
     default.
       ``(b) Demands by Obligees.--
       ``(1) Demand.--If the Secretary proceeds under subsection 
     (a)(2), the obligee or the obligee's agent may demand that 
     the Secretary pay the unpaid principal amount of the 
     obligation and the unpaid interest on the obligation. The 
     demand must be made within the earlier of--
       ``(A) a period that may be specified in the guarantee or a 
     related agreement; or
       ``(B) 60 days from the date of the Secretary's notice.
       ``(2) Payment.--If a demand is made under paragraph (1), 
     the Secretary shall pay to the obligee or the obligee's agent 
     the unpaid principal amount of the obligation and the unpaid 
     interest on the obligation to the date of payment. Payment 
     shall be made within the earlier of--
       ``(A) a period that may be specified in the guarantee or a 
     related agreement; or
       ``(B) 30 days from the date of the demand.
       ``(c) Continued Effect of Guarantee.--A guarantee of an 
     obligation remains in effect after an assumption of the 
     obligation by the Secretary.
       ``(d) Additional Responses.--If there is a default on an 
     obligation, the Secretary shall conduct operations under this 
     chapter in a manner that--
       ``(1) maximizes the net present value return from the sale 
     or disposition of assets associated with the obligation, 
     including prompt referral to the Attorney General for 
     collection as appropriate;
       ``(2) minimizes the amount of any loss realized in the 
     resolution of the guarantee;
       ``(3) ensures adequate competition and fair and consistent 
     treatment of offerors; and
       ``(4) requires appraisal of assets by an independent 
     appraiser.

     ``Sec. 53723. Payments by Secretary and issuance of 
       obligations

       ``(a) Cash Payment.--Amounts required to be paid by the 
     Secretary under section 53721 or 53722 of this title shall be 
     paid in cash.
       ``(b) Issuance of Obligations.--If amounts in the 
     appropriate account under section 53717 of this title are not 
     sufficient to make a payment required under section 53721 or 
     53722 of this title, the Secretary may issue obligations to 
     the Secretary of the Treasury. The Secretary, with the 
     approval of the Secretary of the Treasury, shall prescribe 
     the form, denomination, maturity, and other terms (except the 
     interest rate) of the obligations. The Secretary of the 
     Treasury shall set the interest rate for the obligations, 
     considering the current average market yield on outstanding 
     marketable obligations of the United States Government of 
     comparable maturities during the month before the obligations 
     are issued.
       ``(c) Purchase of Obligations.--The Secretary of the 
     Treasury shall purchase the obligations issued under this 
     section. To purchase the obligations, the Secretary of the 
     Treasury may use as a public debt transaction the proceeds 
     from the sale of securities issued under chapter 31 of title 
     31. The purposes for which securities may be issued under 
     that chapter are extended to include the purchase of 
     obligations under this subsection. The Secretary of the 
     Treasury may sell obligations purchased under this section. A 
     redemption, purchase, or sale of the obligations by the 
     Secretary of the Treasury is a public debt transaction of the 
     Government.
       ``(d) Deposits and Redemptions.--The Secretary shall 
     deposit amounts borrowed under this section in the 
     appropriate account under section 53717 of this title and 
     make redemptions of the obligations from that account.

     ``Sec. 53724. Rights to secured property

       ``(a) Acquisition of Security Rights.--When the Secretary 
     makes a payment on, or assumes, an obligation under section 
     53721 or 53722 of this title, the Secretary acquires the 
     rights under the security agreement with the obligor in the 
     security held by the Secretary to guarantee the obligation.
       ``(b) Use and Disposition of Secured Property.--
     Notwithstanding any other law relating to the acquisition, 
     handling, or disposal of property by the United States 
     Government, the Secretary has the right, in the Secretary's 
     discretion, to complete, reconstruct, recondition, renovate, 
     repair, maintain, operate, charter, or sell any property 
     acquired under a security agreement with an obligor, or to 
     place a vessel so acquired in the National Defense Reserve 
     Fleet. The terms of a sale under this subsection shall be as 
     approved by the Secretary.

     ``Sec. 53725. Actions against obligor

       ``(a) In General.--For a default under a guaranteed 
     obligation or related agreement, the Secretary may take any 
     action against the obligor or another liable party that the 
     Secretary considers necessary to protect the interests of the 
     United States Government. A civil action may be brought in 
     the name of the Government or the obligee. The obligee shall 
     make available to the Government all records and evidence 
     necessary to prosecute the action.
       ``(b) Title, Possession, and Purchase.--
       ``(1) In general.--The Secretary may--
       ``(A) accept a conveyance of title to and possession of 
     property from the obligor or another party liable to the 
     Secretary; and
       ``(B) purchase the property for an amount not greater than 
     the unpaid principal amount of the obligation and interest 
     thereon.
       ``(2) Payment of excess.--If, through the sale of property, 
     the Secretary receives an amount of cash greater than the 
     unpaid principal amount of the obligation, the unpaid 
     interest on the obligation, and the expenses of collecting 
     those amounts, the Secretary shall pay the excess to the 
     obligor.

                 ``SUBCHAPTER III--PARTICULAR PROJECTS

     ``Sec. 53731. Commercial demonstration ocean thermal energy 
       conversion facilities and plantships

       ``(a) In General.--Under subchapter I of this chapter, the 
     Secretary may guarantee or make a commitment to guarantee the 
     payment of the principal of and interest on an obligation 
     that aids in financing (including reimbursement of an obligor 
     for expenditures previously made for) the construction, 
     reconstruction, or reconditioning of a commercial 
     demonstration ocean thermal energy conversion facility or 
     plantship. This section may be used to guarantee obligations 
     for a total of not more than 5 separate facilities and 
     plantships or a demonstrated 400 megawatt capacity, whichever 
     comes first.
       ``(b) Applicability of Other Provisions.--Except as 
     otherwise provided in this section, a guarantee or commitment 
     to guarantee under this section is subject to all the 
     provisions applicable to a guarantee or commitment to 
     guarantee under subchapter I of this chapter.
       ``(c) Economic Soundness.--The required determination of 
     economic soundness under section 53708 of this title applies 
     to a guarantee or commitment to guarantee for that portion of 
     a facility or plantship not to be supported with appropriated 
     Federal funds.
       ``(d) Reasonableness of Risk.--A guarantee or commitment to 
     guarantee may not be made under this section unless the 
     Secretary of Energy, in consultation with the Secretary, 
     certifies to the Secretary that, for the facility or

[[Page H7626]]

     plantship for which the guarantee or commitment to guarantee 
     is sought, there is sufficient guarantee of performance and 
     payment to lower the risk to the United States Government to 
     a reasonable level. In deciding whether to issue such a 
     certification, the Secretary of Energy shall consider--
       ``(1) the successful demonstration of the technology to be 
     used in the facility at a scale sufficient to establish the 
     likelihood of technical and economic viability in the 
     proposed market; and
       ``(2) the need of the United States to develop new and 
     renewable sources of energy and the benefits to be realized 
     from the construction and successful operation of the 
     facility or plantship.
       ``(e) Amount of Obligation.--The total principal amount of 
     an obligation guaranteed under this section may not exceed 
     87.5 percent of--
       ``(1) the actual cost or depreciated actual cost of the 
     facility or plantship; or
       ``(2) if the facility or plantship is supported with 
     appropriated Federal funds, the total principal amount of 
     that portion of the actual cost or depreciated actual cost 
     for which the obligor is obligated to secure financing under 
     the agreement between the obligor and the Department of 
     Energy or other Federal agency.
       ``(f) OTEC Demonstration Fund.--
       ``(1) In general.--There is a special subaccount, known as 
     the OTEC Demonstration Fund, in the account established under 
     section 53717(b)(1) of this title.
       ``(2) Use and operation.--The OTEC Demonstration Fund shall 
     be used for obligation guarantees authorized under this 
     section that do not qualify under subchapter I of this 
     chapter. Except as otherwise provided in this section, the 
     OTEC Demonstration Fund shall be operated in the same manner 
     as the parent account. However--
       ``(A) amounts received by the Secretary under subchapter I 
     of this chapter related to guarantees or commitments to 
     guarantee made under this section shall be deposited only in 
     the OTEC Demonstration Fund; and
       ``(B) when obligations issued by the Secretary under 
     section 53723 of this title related to the OTEC Demonstration 
     Fund are outstanding, any amount received by the Secretary 
     under subchapter I of this chapter related to ocean thermal 
     energy conversion facilities or plantships shall be deposited 
     in the OTEC Demonstration Fund.
       ``(3) Transfers.--Assets in the OTEC Demonstration Fund may 
     be transferred to the parent account when and to the extent 
     the balance in the OTEC Demonstration Fund exceeds the total 
     guarantees or commitments to guarantee made under this 
     section then outstanding, plus obligations issued by the 
     Secretary under section 53723 of this title related to the 
     OTEC Demonstration Fund.
       ``(4) Liability.--The parent account is not liable for a 
     guarantee or commitment to guarantee made under this section.
       ``(5) Maximum unpaid principal amount.--The total unpaid 
     principal amount of the obligations guaranteed with the 
     backing of the OTEC Demonstration Fund and outstanding at any 
     one time may not exceed $1,650,000,000.
       ``(g) Issuance and Payment of Obligations.--Section 53723 
     of this title applies to the OTEC Demonstration Fund. 
     However, obligations issued by the Secretary under that 
     section related to the OTEC Demonstration Fund shall be 
     payable only from proceeds realized by the OTEC Demonstration 
     Fund.
       ``(h) Taxation of Interest.--Interest on an obligation 
     guaranteed under this section shall be included in gross 
     income under chapter 1 of the Internal Revenue Code of 1986 
     (26 U.S.C. ch. 1).

     ``Sec. 53732. Eligible export vessels

       ``(a) Applicable Terms.--The Secretary may guarantee an 
     obligation for an eligible export vessel in accordance with--
       ``(1) the terms applicable under this chapter for vessels 
     documented under the laws of the United States; or
       ``(2) other terms the Secretary determines are more 
     favorable than those terms and compatible with export credit 
     terms offered by foreign governments for the sale of vessels 
     built in foreign shipyards.
       ``(b) Interagency Council.--
       ``(1) Establishment.--There is an interagency council to 
     carry out this section.
       ``(2) Composition.--The council is composed of the 
     following individuals or their designees:
       ``(A) The Secretary of Transportation, who is the chairman 
     of the council.
       ``(B) The Secretary of the Treasury.
       ``(C) The Secretary of State.
       ``(D) The Assistant to the President for Economic Policy.
       ``(E) The United States Trade Representative.
       ``(F) The President and Chairman of the Export-Import Bank 
     of the United States.
       ``(3) Functions.--The council shall--
       ``(A) obtain information on shipbuilding loan guarantees, 
     direct and indirect subsidies, and other favorable treatment 
     of shipyards provided by foreign governments to shipyards in 
     competition with United States shipyards;
       ``(B) consult regularly with United States shipbuilders to 
     obtain the essential information about international 
     shipbuilding competition on which to set terms for loan 
     guarantees under subsection (a)(2); and
       ``(C) provide guidance to the Secretary in establishing 
     terms for loan guarantees under subsection (a)(2).
       ``(4) Annual report.--Not later than January 31 of each 
     year, the Secretary shall submit to Congress a report on 
     activities of the Secretary under this section during the 
     preceding year. The report shall include--
       ``(A) documentation of sources of information about 
     assistance by governments of other countries to shipyards in 
     those countries; and
       ``(B) a summary of recommendations made to the Secretary 
     during the preceding year about applications submitted to the 
     Secretary during that year for loan guarantees to construct 
     eligible export vessels.
       ``(c) Required Findings.--
       ``(1) Benefit to shipbuilding industry.--The Secretary may 
     not guarantee or make a commitment to guarantee an obligation 
     for an eligible export vessel unless the Secretary finds that 
     the construction, reconstruction, or reconditioning of the 
     vessel will aid in the transition of United States shipyards 
     to commercial activities or will preserve shipbuilding assets 
     that would be essential in time of war or national emergency.
       ``(2) Priority of documented vessels.--The Secretary may 
     not make a commitment to guarantee an obligation for an 
     eligible export vessel unless the Secretary determines that 
     making the commitment will not result in denial of an 
     economically sound application for a commitment to guarantee 
     an obligation for a vessel documented under the laws of the 
     United States and operating in the domestic or foreign 
     commerce of the United States. The Secretary has sole 
     discretion in making the determination. In making the 
     determination, the Secretary shall consider--
       ``(A) the status and economic soundness of pending 
     applications for commitments to guarantee obligations for 
     vessels documented under the laws of the United States that 
     are operating or will be operating in the domestic or foreign 
     commerce of the United States; and
       ``(B) the amount of guarantee authority available.
       ``(d) Restriction on Transfer of Vessel.--The Secretary may 
     not guarantee or make a commitment to guarantee an obligation 
     for an eligible export vessel unless the owner of the vessel 
     agrees with the Secretary that the vessel will not be 
     transferred to a country designated by the Secretary of 
     Defense as a country whose interests are hostile to the 
     interests of the United States.
       ``(e) Review by Secretary of Defense.--
       ``(1) Notification.--The Secretary shall promptly notify 
     the Secretary of Defense of the receipt of an application for 
     a loan guarantee for an eligible export vessel.
       ``(2) Disapproval.--The Secretary of Defense, within 30 
     days after receiving the notice, may disapprove the guarantee 
     based on an assessment of the potential use of the vessel in 
     a manner that may harm the national security interests of the 
     United States. The Secretary may not disapprove a guarantee 
     solely because of the type of vessel to be constructed.
       ``(3) Delegation.--The authority of the Secretary of 
     Defense to disapprove a guarantee under this subsection may 
     be delegated only to a civilian officer of the Department of 
     Defense appointed by the President by and with the advice and 
     consent of the Senate.
       ``(4) Prohibition.--The Secretary may not make a loan 
     guarantee disapproved by the Secretary of Defense under this 
     subsection.
       ``(f) Expiration of Authority.--The Secretary may not issue 
     a commitment to guarantee an obligation for an eligible 
     export vessel under this chapter after the last date on which 
     such a commitment may be issued under any treaty or 
     convention entered into after November 30, 1993, that 
     prohibits guarantee of such an obligation.

     ``Sec. 53733. Shipyard modernization and improvement

       ``(a) Definitions.--In this section:
       ``(1) Advanced shipbuilding technology.--The term `advanced 
     shipbuilding technology' includes--
       ``(A) numerically controlled machine tools, robots, 
     automated process control equipment, computerized flexible 
     manufacturing systems, associated computer software, and 
     other technology for improving shipbuilding and related 
     industrial production that advance the state-of-the-art; and
       ``(B) novel techniques and processes designed to improve 
     shipbuilding quality, productivity, and practice, and to 
     promote sustainable development, including engineering 
     design, quality assurance, concurrent engineering, continuous 
     process production technology, energy efficiency, waste 
     minimization, design for recyclability or parts reuse, 
     inventory management, upgraded worker skills, and 
     communications with customers and suppliers.
       ``(2) General shipyard facility.--The term `general 
     shipyard facility' means--
       ``(A) for operations on land--
       ``(i) a structure or appurtenance thereto designed for the 
     construction, reconstruction, repair, rehabilitation, or 
     refurbishment of a vessel, including a graving dock, building 
     way, ship lift, wharf, or pier crane;
       ``(ii) the land necessary for the structure or 
     appurtenance; and
       ``(iii) equipment that is for use with the structure or 
     appurtenance and that is necessary for performing a function 
     referred to in subclause (i); and
       ``(B) for operations not on land, a vessel, floating 
     drydock, or barge built in the United States and used for, 
     equipped to be used for, or of a type normally used for, 
     performing a function referred to in subclause (A)(i).
       ``(3) Modern shipbuilding technology.--The term `modern 
     shipbuilding technology' means the best available proven 
     technology, techniques, and processes appropriate to 
     enhancing the productivity of shipyards.
       ``(b) General Authority.--Under subchapter I of this 
     chapter, the Secretary may guarantee or make a commitment to 
     guarantee the payment of the principal of and interest on an 
     obligation for advanced shipbuilding technology and modern 
     shipbuilding technology of a general shipyard facility in the 
     United States. Only a private shipyard is eligible to receive 
     a guarantee.
       ``(c) Applicability of Other Provisions.--Except as 
     otherwise provided in this section, a guarantee or commitment 
     to guarantee under this section is subject to all the 
     provisions applicable to a guarantee or commitment to 
     guarantee under subchapter I of this chapter.

[[Page H7627]]

       ``(d) Amount of Obligation.--The principal amount of an 
     obligation guaranteed under this chapter may not exceed 87.5 
     percent of the actual cost of the advanced shipbuilding 
     technology or modern shipbuilding technology.
       ``(e) Transfer of Amounts.--The Secretary may accept the 
     transfer of amounts from a department, agency, or 
     instrumentality of the United States Government and may use 
     those amounts to cover the cost (as defined in section 502 of 
     the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of 
     making guarantees or commitments to guarantee under this 
     section.

     ``Sec. 53734. Replacement of vessels because of changes in 
       operating standards

       ``(a) General Authority.--Notwithstanding any other 
     provision of this chapter, the Secretary, on terms the 
     Secretary may prescribe, may guarantee or make a commitment 
     to guarantee the payment of the principal of and interest on 
     an obligation that aids in financing or refinancing 
     (including reimbursement of an obligor for expenditures 
     previously made for) a contract for the construction or 
     reconstruction of a vessel if--
       ``(1) the vessel is designed and to be used for commercial 
     use in coastwise, intercoastal, or foreign trade;
       ``(2) the construction or reconstruction is necessary to 
     replace a vessel that cannot continue to be operated because 
     of a change required by law in the standards for the 
     operation of vessels, and the applicant for the guarantee or 
     commitment would not otherwise legally be able to continue 
     operating vessels in the trades in which the applicant 
     operated vessels before the change;
       ``(3) the applicant is presently engaged in transporting 
     cargoes in vessels of the type and class that will be 
     constructed or reconstructed under this section and agrees to 
     employ vessels constructed or reconstructed under this 
     section as replacements only for vessels made obsolete by the 
     change in operating standards;
       ``(4) the capacity of the vessels to be constructed or 
     reconstructed under this section will not increase the cargo 
     carrying capacity of the vessels being replaced;
       ``(5) the Secretary has not determined that the market 
     demand for the vessel over its useful life will diminish so 
     as to make granting the guarantee fiduciarily imprudent;
       ``(6) the vessel, if to be reconstructed, will have a 
     useful life of at least 15 years after the reconstruction; 
     and
       ``(7) the Secretary has considered the criteria specified 
     in section 53708(a)(3)-(5) of this title.
       ``(b) Term and Amount of Obligation.--
       ``(1) Term.--The term of an obligation guaranteed under 
     this section may not exceed 25 years.
       ``(2) Amount.--The amount of an obligation guaranteed under 
     this section may not exceed 87.5 percent of the actual cost 
     or depreciated actual cost to the applicant for the 
     construction or reconstruction of the vessel. The Secretary 
     may not establish a percentage under this paragraph that is 
     to be applied uniformly to all guarantees or commitments to 
     guarantee made under this section.
       ``(c) Applicability of Other Provisions.--A guarantee or 
     commitment to guarantee under this section is also subject to 
     sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) 
     and (e), 53709(a), 53710(a)(1), (2), and (4) and (c), 
     53711(a), 53713, 53714, 53717, and 53721-53725 of this title.
       ``(d) Security Against Default.--The Secretary shall 
     require by regulation that an applicant under this section 
     provide adequate security against default.
       ``(e) Guarantee Fees.--The Secretary may establish a fee 
     for the guarantee of an obligation under this section that is 
     in addition to the fee established under section 53714 of 
     this title. The fee may be--
       ``(1) an annual fee of not more than an additional 1 
     percent added to the fee established under section 53714 of 
     this title; or
       ``(2) a fee based on the amount of the obligation versus 
     the percentage of the obligor's fleet being replaced by 
     vessels constructed or reconstructed under this section.

     ``Sec. 53735. Fisheries financing and capacity reduction

       ``(a) Definition.--In this section, the term `program' 
     means a fishing capacity reduction program established under 
     section 312 of the Magnuson-Stevens Fishery Conservation and 
     Management Act (16 U.S.C. 1861a).
       ``(b) Guarantee Authority.--The Secretary may guarantee the 
     repayment of debt obligations issued by entities under this 
     section. Debt obligations to be guaranteed may be issued by 
     any entity that has been approved by the Secretary and has 
     agreed with the Secretary to conditions the Secretary 
     considers necessary for this section to achieve the objective 
     of the program and to protect the interest of the United 
     States.
       ``(c) Requirements of Obligations.--A debt obligation 
     guaranteed under this section shall--
       ``(1) be treated in the same manner and to the same extent 
     as other obligations guaranteed under this chapter, except 
     with respect to provisions of this chapter that by their 
     nature cannot be applied to obligations guaranteed under this 
     section;
       ``(2) have the fishing fees established under the program 
     paid into a separate subaccount of the fishing capacity 
     reduction fund established under this section;
       ``(3) not exceed $100,000,000 in an unpaid principal amount 
     outstanding at any one time for a program;
       ``(4) have such maturity (not to exceed 20 years), take 
     such form, and contain such conditions as the Secretary 
     determines necessary for the program to which they relate;
       ``(5) have as the exclusive source of repayment (subject to 
     the second sentence of subsection (d)(2)) and as the 
     exclusive payment security, the fishing fees established 
     under the program; and
       ``(6) at the discretion of the Secretary be issued in the 
     public market or sold to the Federal Financing Bank.
       ``(d) Fishing Capacity Reduction Fund.--
       ``(1) In general.--There is a separate account in the 
     Treasury, known as the Fishing Capacity Reduction Fund. 
     Within the Fund, at least one subaccount shall be established 
     for each program into which shall be paid all fishing fees 
     established under the program and other amounts authorized 
     for the program.
       ``(2) Availability of amounts.--Amounts in the Fund shall 
     be available, without appropriation or fiscal year 
     limitation, to the Secretary to pay the cost of the program, 
     including payments to financial institutions to pay debt 
     obligations incurred by entities under this section. Funds 
     available for this purpose from other amounts available for 
     the program may also be used to pay those debt obligations.
       ``(3) Investment.--Amounts in the Fund that are not 
     currently needed for the purpose of this section shall be 
     kept on deposit or invested in obligations of the United 
     States Government.
       ``(e) Regulations.--The Secretary shall prescribe 
     regulations the Secretary considers necessary to carry out 
     this section.

                   ``CHAPTER 539--WAR RISK INSURANCE

``Sec.
``53901.  Definitions.
``53902.  Authority to provide insurance.
``53903.  Insurable interests.
``53904.  Liability insurance for persons involved in war or defense 
              efforts.
``53905.  Agency insurance.
``53906.  Hull insurance valuation.
``53907.  Reinsurance.
``53908.  Additional insurance privately obtained.
``53909.  War risk insurance revolving fund.
``53910.  Administrative.
``53911.  Civil actions for losses.
``53912.  Expiration date.

     ``Sec. 53901. Definitions

       ``In this chapter:
       ``(1) American vessel.--The term `American vessel' 
     includes--
       ``(A) a documented vessel with a registry or coastwise 
     endorsement under chapter 121 of this title;
       ``(B) an undocumented vessel owned or chartered by or made 
     available to the United States Government; and
       ``(C) a tug, barge, or other watercraft (whether or not 
     documented) owned by a citizen of the United States and used 
     in essential water transportation or in the fisheries, except 
     only for sport fishing.
       ``(2) Cargo.--The term `cargo' includes a loaded or empty 
     container on a vessel.
       ``(3) Transportation in the waterborne commerce of the 
     united states.--The term `transportation in the waterborne 
     commerce of the United States' includes the operation of a 
     vessel in the fisheries, except only for sport fishing.
       ``(4) War risks.--The term `war risks' includes, to the 
     extent the Secretary of Transportation determines--
       ``(A) any part of a loss excluded from marine insurance 
     coverage under a `free of capture or seizure' clause or 
     analogous clause; and
       ``(B) any other loss from a hostile act, including 
     confiscation, expropriation, nationalization, or deprivation.

     ``Sec. 53902. Authority to provide insurance

       ``(a) In General.--With the approval of the President, and 
     after such consultation with interested agencies of United 
     States Government as the President may require, the Secretary 
     of Transportation may provide insurance and reinsurance 
     against loss or damage from war risks as provided by this 
     chapter whenever it appears to the Secretary that insurance 
     adequate for the needs of the waterborne commerce of the 
     United States cannot be obtained on reasonable terms and 
     conditions from companies authorized to do insurance business 
     in a State of the United States.
       ``(b) Consideration of Risk.--Insurance or reinsurance 
     under this chapter shall be based, insofar as practicable, on 
     consideration of the risk involved.
       ``(c) Availability of Vessel During War or National 
     Emergency.--Insurance or reinsurance for a vessel may be 
     provided under this chapter only on the condition that the 
     vessel will be available to the Government in time of war or 
     national emergency.

     ``Sec. 53903. Insurable interests

       ``(a) In General.--The Secretary of Transportation may 
     provide insurance and reinsurance under this chapter for--
       ``(1) an American vessel, including a vessel under 
     construction;
       ``(2) a foreign vessel--
       ``(A) owned by a citizen of the United States; or
       ``(B) engaged in transportation in the waterborne commerce 
     of the United States or in such other transportation by water 
     or such other services as the Secretary considers to be in 
     the interest of the national defense or national economy of 
     the United States, when so engaged;
       ``(3) cargo--
       ``(A) shipped or to be shipped on a vessel insurable under 
     this section, including by express or registered mail;
       ``(B) owned by a citizen or resident of the United States;
       ``(C) imported to or exported from the United States, or 
     sold or purchased by a citizen or resident of the United 
     States, under a contract of sale or purchase the terms of 
     which provide that the risk of loss by war risks or the 
     obligation to provide insurance against war risks is on a 
     citizen or resident of the United States; or
       ``(D) shipped between ports in the United States;

[[Page H7628]]

       ``(4) disbursements, including advances to masters and 
     general average disbursements, and freight and passage money 
     of a vessel insurable under this section;
       ``(5) personal effects of an individual on a vessel 
     insurable under this section;
       ``(6) loss of life, injury, or detention by an enemy of the 
     United States after capture, with respect to an individual on 
     a vessel insurable under this section; and
       ``(7) statutory or contractual obligations or other 
     liabilities of a vessel insurable under this section or of 
     the owner or charterer of such a vessel, of a nature 
     customarily covered by insurance.
       ``(b) Considerations for Foreign Vessels.--In determining 
     whether to provide insurance or reinsurance for a foreign 
     vessel, the Secretary shall consider the characteristics, 
     employment, and general management of the vessel by the owner 
     or charterer.
       ``(c) Non-War Risks.--Insurance of a risk under subsection 
     (a)(5)-(7), insofar as it involves a liability related to an 
     individual on the vessel, may include risks other than war 
     risks to the extent the Secretary considers advisable.

     ``Sec. 53904. Liability insurance for persons involved in war 
       or defense efforts

       ``(a) In General.--The Secretary of Transportation may 
     provide insurance under this chapter against legal liability 
     that a person may incur in providing services or facilities 
     for a vessel if, in the opinion of the Secretary, the 
     insurance--
       ``(1) is required in prosecuting a war or for national 
     defense; and
       ``(2) cannot be obtained at reasonable rates or on 
     reasonable terms and conditions from approved companies 
     authorized to do insurance business in a State of the United 
     States.
       ``(b) Limitations.--Employer liability insurance and worker 
     compensation insurance against legal liability to employees 
     may not be provided under this section.

     ``Sec. 53905. Agency insurance

       ``(a) In General.--With the approval of the President, an 
     agency of the United States Government may obtain insurance 
     provided for by this chapter from the Secretary of 
     Transportation, except as provided in sections 17302 and 
     17303 of title 40.
       ``(b) Premium Waivers.--With the approval of the President, 
     the Secretary of Transportation may provide insurance under 
     this chapter at the request of the Secretary of Defense and 
     other agencies the President may prescribe, without payment 
     of an insurance premium if the Secretary of Defense or agency 
     agrees to indemnify the Secretary of Transportation against 
     loss covered by the insurance. The Secretary of Defense and 
     agencies may make such an indemnity agreement.
       ``(c) Presidential Approval.--The signature of the 
     President (or an official designated by the President) on the 
     agreement shall be treated as the approval required by 
     section 53902(a) of this title.

     ``Sec. 53906. Hull insurance valuation

       ``(a) Stated Valuation.--The valuation in a hull insurance 
     policy for actual or constructive total loss of the insured 
     vessel shall be a stated valuation determined by the 
     Secretary of Transportation. The stated valuation--
       ``(1) shall exclude national defense features paid for by 
     the United States Government; and
       ``(2) may not exceed the amount that would be payable if 
     the ownership of the vessel had been requisitioned under 
     chapter 563 of this title at the time the insurance attached 
     under the policy.
       ``(b) Rejecting Stated Valuation.--Within 60 days after the 
     insurance attaches under a policy referred to in subsection 
     (a) or within 60 days after the Secretary determines the 
     valuation, whichever is later, the insured may reject the 
     valuation and pay, at the rate provided in the policy, 
     premiums based on the asserted valuation the insured 
     specifies at the time of rejection. However, the asserted 
     valuation is not binding on the Government in any subsequent 
     action on the policy.
       ``(c) Amount of Claim.--If a vessel is actually or 
     constructively totally lost and the insured under a policy 
     referred to in subsection (a) has not rejected the stated 
     valuation determined by the Secretary, the amount of a claim 
     adjusted, compromised, settled, adjudged, or paid may not 
     exceed the stated valuation. However, if the insured has 
     rejected the valuation, the insured--
       ``(1) shall be paid, as a tentative advance only, 75 
     percent of the stated valuation; and
       ``(2) may bring a civil action against the Government in a 
     court having jurisdiction of the claim to recover a valuation 
     equal to the just compensation the court determines would 
     have been payable if the ownership of the vessel had been 
     requisitioned under chapter 563 of this title at the time the 
     insurance attached under the policy.
       ``(d) Adjusting Premiums.--If a court makes a determination 
     as provided under subsection (c)(2), premiums paid under the 
     policy shall be adjusted based on the court's determination 
     and the rates provided for in the policy.

     ``Sec. 53907. Reinsurance

       ``(a) In General.--To the extent the Secretary of 
     Transportation is authorized to provide insurance under this 
     chapter, the Secretary may provide reinsurance to a company 
     authorized to do insurance business in a State of the United 
     States. The Secretary may obtain reinsurance from such a 
     company for any insurance provided by the Secretary under 
     this chapter.
       ``(b) Rates.--The Secretary may not provide reinsurance at 
     rates less than, nor obtain reinsurance at rates more than, 
     the rates established by the Secretary on the same or similar 
     risks or the rates charged by the insurance company for the 
     insurance reinsured, whichever is more advantageous to the 
     Secretary. However, the Secretary may provide an allowance to 
     the insurance company for the costs of services and 
     facilities the company provides, in an amount the Secretary 
     considers reasonable according to good business practice. The 
     allowance to the company may not include any amount for 
     soliciting or stimulating insurance business.

     ``Sec. 53908. Additional insurance privately obtained

       ``With the approval of the Secretary of Transportation, a 
     person having an insurable interest in a vessel may obtain 
     insurance on the vessel with other underwriting agents in 
     addition to the insurance with the Secretary. The Secretary 
     is not entitled to the benefit of the additional insurance.

     ``Sec. 53909. War risk insurance revolving fund

       ``(a) In General.--There is a war risk insurance revolving 
     fund in the Treasury.
       ``(b) Deposits.--There shall be deposited in the fund 
     amounts appropriated to carry out this chapter and amounts 
     received in carrying out this chapter.
       ``(c) Payments.--There shall be paid from the fund amounts 
     for return premiums, losses, settlements, judgments, and all 
     liabilities incurred by the United States Government under 
     this chapter.
       ``(d) Investment.--On request of the Secretary of 
     Transportation, the Secretary of the Treasury may invest or 
     reinvest any part of the fund in securities of the Government 
     or securities whose principal and interest are guaranteed by 
     the Government. Interest and benefits from the securities 
     shall be deposited in the fund.

     ``Sec. 53910. Administrative

       ``(a) Accordance With Commercial Practice.--In carrying out 
     this chapter, the Secretary of Transportation may act in 
     accordance with commercial practice in the marine insurance 
     business.
       ``(b) Regulations.--The Secretary may prescribe regulations 
     the Secretary considers appropriate to carry out this 
     chapter.
       ``(c) Policies, Rates, and Annual Fees.--The Secretary may 
     prescribe and change forms and policies, and fix and change 
     the amounts insured and rates of premium, under this chapter.
       ``(d) Annual Fees.--The Secretary may charge and collect an 
     annual fee in an amount calculated to cover the expenses of 
     processing applications for insurance, employing underwriting 
     agents, and appointing experts under this chapter.
       ``(e) Payment of Claims and Judgments.--The Secretary may 
     settle and pay claims, and pay judgments against the United 
     States Government, related to insurance under this chapter.
       ``(f) Underwriting Agents.--
       ``(1) In general.--The Secretary may, and when the 
     Secretary finds it practical to do so shall, employ a 
     domestic company or group of domestic companies, authorized 
     to do marine insurance business in a State of the United 
     States, to act as underwriting agent for the Secretary. The 
     services of an underwriting agent may be used in adjusting 
     claims, but a claim may not be paid until approved by the 
     Secretary.
       ``(2) Compensation.--The Secretary may allow the company or 
     group of companies reasonable compensation for services as 
     the underwriting agent. The compensation may include an 
     allowance for expenses reasonably incurred by the agent, but 
     may not include any amount for soliciting or stimulating 
     business.
       ``(g) Fees For Arranging Insurance.--Except as provided in 
     subsection (f)(2), the Secretary may not pay an insurance 
     broker or other person acting in a similar intermediary 
     capacity a fee or other consideration for participating in 
     arranging insurance when the Secretary directly insures any 
     of the risk.
       ``(h) Employment of Marine Insurance Experts.--The 
     Secretary, without regard to the laws and regulations on the 
     employment of Federal employees, may appoint and prescribe 
     the duties of experts in marine insurance as the Secretary 
     considers necessary to carry out this chapter.
       ``(i) Services of Other Government Agencies.--With the 
     consent of another Government agency, the Secretary may use 
     information, services, facilities, officers, and employees of 
     the agency in carrying out this chapter.
       ``(j) Vessel Location Reporting.--The Secretary may 
     prescribe by regulation vessel location reporting 
     requirements for a vessel insured under this chapter.

     ``Sec. 53911. Civil actions for losses

       ``(a) In General.--If there is a disagreement about a loss 
     insured under this chapter, a civil action in admiralty may 
     be brought against the United States Government in the 
     district court of the United States for the district in which 
     the plaintiff or the plaintiff's agent resides. If the 
     plaintiff has no residence in the United States, the action 
     may be brought in the United States District Court for the 
     District of Columbia or in the district court for any 
     district in which the Attorney General agrees to accept 
     service. Any person who may have an interest in the insurance 
     may be made a party, either initially or on the motion of 
     either party.
       ``(b) Exclusive Remedy.--A civil action against the 
     Government under this section is exclusive of any other 
     action by reason of the same subject matter against an 
     officer, employee, or agent employed or retained by the 
     Government under this chapter.
       ``(c) Procedure.--A civil action under this section shall 
     be heard and determined under chapter 309 of this title.
       ``(d) Tolling of Limitations Period.--If a claim is filed 
     with the Secretary of Transportation, the running of the 
     limitations period for bringing a civil action is suspended 
     until the

[[Page H7629]]

     Secretary denies the claim, and for 60 days thereafter. The 
     Secretary is deemed to have denied the claim if the Secretary 
     does not act on the claim within 6 months after the claim is 
     filed, unless the Secretary for good cause shown agrees with 
     the claimant on a different period for the Secretary to act 
     on the claim.
       ``(e) Interpleader.--If the Secretary acknowledges the 
     indebtedness of the Government under the insurance and there 
     is a dispute about the persons entitled to receive payment, 
     the Government may bring a civil action interpleading those 
     persons. The action shall be brought in the United States 
     District Court for the District of Columbia or in the 
     district court for the district in which any of those persons 
     resides. A person not residing or found in the district may 
     be made a party by service in any reasonable manner the court 
     directs. If the court is satisfied that unknown persons might 
     make a claim under the insurance, the court may direct 
     service on those unknown persons by publication in the 
     Federal Register. Judgment after service by publication in 
     the Federal Register discharges the Government from further 
     liability to all persons.

     ``Sec. 53912. Expiration date

       ``The authority of the Secretary of Transportation to 
     provide insurance and reinsurance under this chapter expires 
     on June 30, 2005.

                     ``Part D--Promotional Programs

                     ``CHAPTER 551--COASTWISE TRADE

``Sec.
``55101.  Application of coastwise laws.
``55102.  Transportation of merchandise.
``55103.  Transportation of passengers.
``55104.  Transportation of passengers between Puerto Rico and other 
              ports in the United States.
``55105.  Transportation of hazardous waste.
``55106.  Merchandise transferred between barges.
``55107.  Empty cargo containers and barges.
``55108.  Platform jackets.
``55109.  Dredging.
``55110.  Transportation of dredged material.
``55111.  Towing.
``55112.  Vessel escort operations and towing assistance.
``55113.  Use of foreign documented oil spill response vessels.
``55114.  Unloading fish from foreign vessels.
``55115.  Supplies on fish processing vessels.
``55116.  Canadian rail lines.
``55117.  Great Lakes rail route.
``55118.  Foreign railroads whose road enters by ferry, tugboat, or 
              towboat.
``55119.  Yukon River.
``55120.  Transshipment of imported merchandise intended for immediate 
              exportation.

     ``Sec. 55101. Application of coastwise laws

       ``(a) In General.--Except as provided in subsection (b), 
     the coastwise laws apply to the United States, including the 
     island territories and possessions of the United States.
       ``(b) Exceptions.--The coastwise laws do not apply to--
       ``(1) the Virgin Islands until the President declares by 
     proclamation that the coastwise laws apply to the Virgin 
     Islands; or
       ``(2) American Samoa.

     ``Sec. 55102. Transportation of merchandise

       ``(a) Definition.--In this section, the term `merchandise' 
     includes--
       ``(1) merchandise owned by the United States Government, a 
     State, or a subdivision of a State; and
       ``(2) valueless material.
       ``(b) Requirements.--Except as otherwise provided in this 
     chapter or chapter 121 of this title, a vessel may not 
     provide any part of the transportation of merchandise by 
     water, or by land and water, between points in the United 
     States to which the coastwise laws apply, either directly or 
     via a foreign port, unless the vessel--
       ``(1) is wholly owned by citizens of the United States for 
     purposes of engaging in the coastwise trade; and
       ``(2) has been issued a certificate of documentation with a 
     coastwise endorsement under chapter 121 or is exempt from 
     documentation but would otherwise be eligible for such a 
     certificate and endorsement.
       ``(c) Penalty.--Merchandise transported in violation of 
     subsection (b) is liable to seizure by and forfeiture to the 
     Government. Alternatively, an amount equal to the value of 
     the merchandise (as determined by the Secretary of Homeland 
     Security) or the actual cost of the transportation, whichever 
     is greater, may be recovered from any person transporting the 
     merchandise or causing the merchandise to be transported.

     ``Sec. 55103. Transportation of passengers

       ``(a) In General.--Except as otherwise provided in this 
     chapter or chapter 121 of this title, a vessel may not 
     transport passengers between ports or places in the United 
     States, either directly or via a foreign port, unless the 
     vessel--
       ``(1) is wholly owned by citizens of the United States for 
     purposes of engaging in the coastwise trade; and
       ``(2) has been issued a certificate of documentation with a 
     coastwise endorsement under chapter 121 or is exempt from 
     documentation but would otherwise be eligible for such a 
     certificate and endorsement.
       ``(b) Penalty.--The penalty for violating subsection (a) is 
     $300 for each passenger transported and landed.

     ``Sec. 55104. Transportation of passengers between Puerto 
       Rico and other ports in the United States

       ``(a) Definitions.--In this section:
       ``(1) Certificate.--The term `certificate' means a 
     certificate of financial responsibility for indemnification 
     of passengers for nonperformance of transportation issued by 
     the Federal Maritime Commission under section 44102 of this 
     title.
       ``(2) Passenger vessel.--The term `passenger vessel' means 
     a vessel of similar size, or offering similar service, as any 
     other vessel transporting passengers under subsection (b).
       ``(b) Exemption.--Except as otherwise provided in this 
     section, a vessel not qualified to engage in the coastwise 
     trade may transport passengers between a port in Puerto Rico 
     and another port in the United States.
       ``(c) Expiration of Exemption.--
       ``(1) When coastwise-qualified vessel offering service.--On 
     a showing to the Secretary of the department in which the 
     Coast Guard is operating, by the vessel owner or charterer, 
     that a United States passenger vessel qualified to engage in 
     the coastwise trade is offering or advertising passenger 
     service between a port in Puerto Rico and another port in the 
     United States pursuant to a certificate, the Secretary shall 
     notify the owner or operator of each vessel transporting 
     passengers under subsection (b) to terminate that 
     transportation within 270 days after the Secretary's 
     notification. Except as provided in subsection (d), the 
     authority to transport passengers under subsection (b) 
     expires at the end of that 270-day period.
       ``(2) When non-coastwise-qualified vessel offering 
     service.--On a showing to the Secretary, by the vessel owner 
     or charterer, that a United States passenger vessel not 
     qualified to engage in the coastwise trade is offering or 
     advertising passenger service between a port in Puerto Rico 
     and another port in the United States pursuant to a 
     certificate, the Secretary shall notify the owner or operator 
     of each foreign vessel transporting passengers under 
     subsection (b) to terminate that transportation within 270 
     days after the Secretary's notification. Except as provided 
     in subsection (d), the authority of a foreign vessel to 
     transport passengers under subsection (b) expires at the end 
     of that 270-day period.
       ``(d) Delaying Expiration.--If the vessel offering or 
     advertising the service described in subsection (c) has not 
     begun that service within 270 days after the Secretary's 
     notification, the expiration provided by subsection (c) is 
     delayed until 90 days after the vessel offering or 
     advertising the service begins that service.
       ``(e) Reinstatement of Exemption.--If the Secretary finds 
     that the service on which an expiration was based is no 
     longer available, the expired authority to transport 
     passengers is reinstated.

     ``Sec. 55105. Transportation of hazardous waste

       ``(a) In General.--The transportation of hazardous waste, 
     as defined in section 1004(5) of the Resource Conservation 
     and Recovery Act of 1976 (42 U.S.C. 6903(5)), from a point in 
     the United States to sea for incineration is deemed to be 
     transportation of merchandise under section 55102 of this 
     title.
       ``(b) Nonapplication to Certain Foreign Vessels.--
       ``(1) In general.--Subsection (a) does not apply to 
     transportation performed by a foreign-flag ocean incineration 
     vessel owned by or under construction on May 1, 1982, for a 
     corporation wholly owned by citizens of the United States 
     under section 50501(a)-(c) of this title.
       ``(2) Standards for incineration equipment.--Incineration 
     equipment on a vessel described in paragraph (1) must meet 
     standards of the Coast Guard and the Environmental Protection 
     Agency.
       ``(3) Inspection.--A vessel described in paragraph (1) 
     shall be inspected by the Coast Guard, regardless of whether 
     inspected by the flag nation. The inspection shall be the 
     same as would be required of a vessel of the United States, 
     including drydock inspection and internal examination of 
     tanks and void spaces. The inspection may be made 
     concurrently with an inspection by the flag nation or within 
     one year after the initial issuance or next scheduled 
     issuance of the Safety of Life at Sea Safety Construction 
     Certificate. In making the inspection, the Coast Guard shall 
     refer to the condition of the hull and superstructure 
     established by the initial foreign certification as the basis 
     for evaluating the current condition of the hull and 
     superstructure. The Coast Guard shall allow the substitution 
     of fittings, material, apparatus, equipment, and appliances 
     different from those required for vessels of the United 
     States if satisfied they are equivalent and at least as 
     effective as those required for vessels of the United States. 
     A satisfactory inspection under this paragraph shall be 
     certified in writing by the Secretary of the department in 
     which the Coast Guard is operating.
       ``(c) Effective Date.--Subsection (a) is not effective 
     until an appropriate vessel has been built and documented 
     under chapter 121 of this title.

     ``Sec. 55106. Merchandise transferred between barges

       ``(a) In General.--On terms and conditions the Secretary of 
     Homeland Security may prescribe by regulation, the Secretary 
     may suspend the application of section 55102 of this title to 
     the transportation of merchandise that is transferred, when 
     moving in the foreign trade of the United States, from a 
     barge certified by the owner or operator as designed 
     specifically for carriage on a vessel and carried regularly 
     on a vessel in foreign trade, to another such barge owned or 
     leased by the same owner or operator. However, this 
     subsection does not apply to transportation between the 
     continental United States and noncontiguous States, 
     territories, or possessions to which the coastwise laws 
     apply.
       ``(b) Reciprocity Requirement for Foreign Vessels.--This 
     section applies to a vessel of foreign registry only if the 
     Secretary of Homeland Security finds, based on information 
     from the Secretary of State, that the government of the 
     nation of registry extends reciprocal privileges to vessels 
     of the United States.

[[Page H7630]]

     ``Sec. 55107. Empty cargo containers and barges

       ``(a) In General.--Subject to subsections (b) and (c), and 
     on terms and conditions the Secretary of Homeland Security 
     may prescribe by regulation, section 55102 of this title does 
     not apply to the transportation of--
       ``(1) empty cargo vans, empty lift vans, or empty shipping 
     tanks;
       ``(2) equipment for use with cargo vans, lift vans, or 
     shipping tanks;
       ``(3) empty barges specifically designed for carriage 
     aboard a vessel and equipment (except propulsion equipment) 
     for use with those barges;
       ``(4) empty instruments for international traffic exempted 
     from the customs laws under section 322(a) of the Tariff Act 
     of 1930 (19 U.S.C. 1322(a)); or
       ``(5) stevedoring equipment and material.
       ``(b) Conditions.--
       ``(1) Clauses (1)-(4).--Clauses (1)-(4) of subsection (a) 
     apply only if the items named are owned or leased by the 
     owner or operator of the vessel and transported for its use 
     in handling its cargo in foreign trade.
       ``(2) Clause (5).--Clause (5) of subsection (a) applies 
     only if the items named are--
       ``(A) owned or leased by the owner or operator of the 
     vessel or by the stevedoring company having the contract for 
     the loading or unloading of the vessel; and
       ``(B) transported without charge for use in the handling of 
     cargo in foreign trade.
       ``(c) Reciprocity Requirement for Foreign Vessels.--This 
     section applies to a vessel of foreign registry only if the 
     Secretary of Homeland Security finds, based on information 
     from the Secretary of State, that the government of the 
     nation of registry extends reciprocal privileges to vessels 
     of the United States.

     ``Sec. 55108. Platform jackets

       ``(a) Definitions.--In this section:
       ``(1) Coastwise qualified vessel.--The term `coastwise 
     qualified vessel' means a vessel that has been issued a 
     certificate of documentation with a coastwise endorsement 
     under chapter 121 of this title.
       ``(2) Platform jacket.--The term `platform jacket' refers 
     to a single physical component and includes any type of 
     offshore exploration, development, or production structure or 
     component thereof, including--
       ``(A) platform jackets;
       ``(B) tension leg or SPAR platform superstructures 
     (including the deck, drilling rig and support utilities, and 
     supporting structure);
       ``(C) hull (including vertical legs and connecting pontoons 
     or vertical cylinder);
       ``(D) tower and base sections of a platform jacket;
       ``(E) jacket structures; and
       ``(F) deck modules (known as `topsides').
       ``(b) Authorized Transportation.--Section 55102 of this 
     title does not apply to the transportation of a platform 
     jacket in or on a non-coastwise qualified launch barge 
     between two points in the United States, at one of which 
     there is an installation or other device within the meaning 
     of section 4(a) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1333(a)), if--
       ``(1) the launch barge was built before December 31, 2000, 
     and has a launch capacity of at least 12,000 long tons; and
       ``(2) the Secretary of Transportation makes a 
     determination, in accordance with procedures established 
     under subsection (c), that a suitable coastwise qualified 
     vessel is not available for use in the transportation and, if 
     needed, launch or installation of a platform jacket.
       ``(c) Procedures To Maximize Use of Coastwise Qualified 
     Vessels.--The Secretary of Transportation shall adopt 
     procedures implementing this section that are reasonably 
     designed to provide timely information so as to maximize the 
     use of coastwise qualified vessels. The procedures shall, 
     among other things, establish that for purposes of this 
     section, a coastwise qualified vessel shall be deemed to be 
     not available only if--
       ``(1) on application by an owner or operator for the use of 
     a non-coastwise qualified launch barge for transportation of 
     a platform jacket under this section (which application shall 
     include all relevant information, including engineering 
     details and timing requirements), the Secretary promptly 
     publishes a notice in the Federal Register--
       ``(A) describing the project and the platform jacket 
     involved;
       ``(B) advising that all relevant information reasonably 
     needed to assess the transportation requirements for the 
     platform jacket will be made available to interested parties 
     on request; and
       ``(C) requesting that information on the availability of 
     coastwise qualified vessels be submitted within 30 days after 
     publication of that notice; and
       ``(2)(A) no information is submitted to the Secretary 
     within that 30 day period; or
       ``(B) the owner or operator of a coastwise qualified vessel 
     submits information to the Secretary asserting that the owner 
     or operator has a suitable coastwise qualified vessel 
     available for the transportation, but the Secretary 
     determines, within 90 days after the notice is first 
     published, that the coastwise qualified vessel is not 
     suitable or reasonably available for the transportation.

     ``Sec. 55109. Dredging

       ``(a) In General.--Except as provided in subsection (b), a 
     vessel may engage in dredging in the navigable waters of the 
     United States only if--
       ``(1) the vessel is wholly owned by citizens of the United 
     States for purposes of engaging in the coastwise trade;
       ``(2) the charterer, if any, is a citizen of the United 
     States for purposes of engaging in the coastwise trade; and
       ``(3) the vessel has been issued a certificate of 
     documentation with a coastwise endorsement under chapter 121 
     of this title or is exempt from documentation but would 
     otherwise be eligible for such a certificate and endorsement.
       ``(b) Dredging of Gold in Alaska.--A documented vessel with 
     a registry endorsement may engage in the dredging of gold in 
     Alaska.
       ``(c) Penalty.--If a vessel is operated in knowing 
     violation of this section, the vessel and its equipment are 
     liable to seizure by and forfeiture to the United States 
     Government.

     ``Sec. 55110. Transportation of dredged material

       ``Section 55102 of this title applies to the transportation 
     of valueless material or dredged material, regardless of 
     whether it has commercial value, from a point in the United 
     States or on the high seas within the exclusive economic 
     zone, to another point in the United States or on the high 
     seas within the exclusive economic zone.

     ``Sec. 55111. Towing

       ``(a) In General.--Except when towing a vessel in distress, 
     a vessel may not do any part of any towing described in 
     subsection (b) unless the towing vessel--
       ``(1) is wholly owned by citizens of the United States for 
     purposes of engaging in the coastwise trade; and
       ``(2) has been issued a certificate of documentation with a 
     coastwise endorsement under chapter 121 of this title or is 
     exempt from documentation but would otherwise be eligible for 
     such a certificate and endorsement.
       ``(b) Applicable Towing.--Subsection (a) applies to the 
     towing of--
       ``(1) a vessel between ports or places in the United States 
     to which the coastwise laws apply, either directly or via a 
     foreign port or place;
       ``(2) a vessel from point to point within the harbors of 
     ports or places to which the coastwise laws apply; or
       ``(3) a vessel transporting valueless material or dredged 
     material, regardless of whether it has commercial value, from 
     a point in the United States or on the high seas within the 
     exclusive economic zone, to another point in the United 
     States or on the high seas within the exclusive economic 
     zone.
       ``(c) Penalties.--
       ``(1) Owner and master.--The owner and master of a vessel 
     towing another vessel in violation of this section are each 
     liable for a penalty of at least $350 but not more than 
     $1,100. A penalty under this paragraph constitutes a lien on 
     the vessel. The lien is enforceable in a district court of 
     the United States for any district in which the vessel is 
     found. Clearance may not be granted to the vessel until the 
     penalties have been paid.
       ``(2) Vessel.--In addition to the penalties under paragraph 
     (1), the towing vessel is liable for a penalty of $60 per ton 
     based on the tonnage of each towed vessel.

     ``Sec. 55112. Vessel escort operations and towing assistance

       ``(a) In General.--Except in the case of a vessel in 
     distress, only a vessel of the United States may perform the 
     following escort vessel operations within the navigable 
     waters of the United States:
       ``(1) Operations that commence or terminate at a port or 
     place in the United States.
       ``(2) Operations required by United States law or 
     regulation.
       ``(3) Operations provided in whole or in part within or 
     through navigation facilities owned, maintained, or operated 
     by the United States Government or the approaches to those 
     facilities, other than facilities operated by the St. 
     Lawrence Seaway Development Corporation on the St. Lawrence 
     River portion of the Seaway.
       ``(b) Escort Vessels.--For purposes of this section, an 
     escort vessel is--
       ``(1) any vessel that is assigned and dedicated to assist 
     another vessel, whether or not tethered to that vessel, 
     solely as a safety precaution to assist in controlling the 
     speed or course of the assisted vessel in the event of a 
     steering or propulsion equipment failure, or any other 
     similar emergency circumstance, or in restricted waters where 
     additional assistance in maneuvering the vessel is required 
     to ensure its safe operation; and
       ``(2) in the case of a vessel being towed under section 
     55111 of this title, any vessel that is assigned and 
     dedicated to the vessel being towed in addition to any towing 
     vessel required under that section.
       ``(c) Relationship to Other Law.--This section does not 
     affect section 55111 of this title.
       ``(d) Penalty.--A person violating this section is liable 
     to the Government for a civil penalty of not more than 
     $10,000 for each day during which the violation occurs.

     ``Sec. 55113. Use of foreign documented oil spill response 
       vessels

       ``Notwithstanding any other provision of law, an oil spill 
     response vessel documented under the laws of a foreign 
     country may operate in waters of the United States on an 
     emergency and temporary basis, for the purpose of recovering, 
     transporting, and unloading in a United States port oil 
     discharged as a result of an oil spill in or near those 
     waters, if--
       ``(1) an adequate number and type of oil spill response 
     vessels documented under the laws of the United States cannot 
     be engaged to recover oil from an oil spill in or near those 
     waters in a timely manner, as determined by the Federal On-
     Scene Coordinator for a discharge or threat of a discharge of 
     oil; and
       ``(2) the foreign country has by its laws accorded to 
     vessels of the United States the same privileges accorded to 
     vessels of the foreign country under this section.

     ``Sec. 55114. Unloading fish from foreign vessels

       ``(a) Prohibitions.--Except as otherwise provided by this 
     section or a treaty or convention to which the United States 
     Government is a

[[Page H7631]]

     party, a foreign vessel may not unload, in a port of the 
     United States--
       ``(1) its catch of fish taken on board on the high seas or 
     fish products processed from that catch of fish; or
       ``(2) fish or fish products taken on board that vessel on 
     the high seas from a vessel engaged in fishing operations or 
     the processing of fish or fish products.
       ``(b) Regulations on Obtaining Information.--The Secretary 
     of Commerce may prescribe regulations the Secretary considers 
     necessary to obtain information on the transportation of fish 
     products by vessels of the United States for foreign fish 
     processing vessels to points in the United States.
       ``(c) Virgin Islands Exemption.--A foreign vessel of not 
     more than 50 feet overall in length may unload its catch of 
     fresh fish (whole or with the heads, viscera, or fins 
     removed, but not frozen, otherwise processed, or further 
     advanced) in a port of the Virgin Islands for immediate 
     consumption in those islands. Fish unloaded under this 
     subsection may be sold or transferred only for immediate 
     consumption. In the absence of satisfactory evidence that a 
     sale or transfer to an agent, representative, or employee of 
     a freezer or cannery is for immediate consumption, the sale 
     or transfer is deemed not to be for immediate consumption. 
     This subsection does not prohibit the freezing, smoking, or 
     other processing of fresh fish by the ultimate consumer of 
     the fish.
       ``(d) Seizure, Forfeiture, and Penalty.--Fish unloaded in 
     the Virgin Islands that are retained, sold, or transferred, 
     except as allowed by subsection (c), are liable to seizure by 
     and forfeiture to the Government. A person retaining, 
     selling, transferring, buying, or receiving the fish is 
     liable to the Government for a civil penalty of not more than 
     $1,000 for each violation. A penalty or forfeiture under this 
     section may be compromised, modified, or remitted under 
     section 2107(b) of this title.

     ``Sec. 55115. Supplies on fish processing vessels

       ``Section 55102 of this title does not apply to supplies 
     aboard a United States documented fish processing vessel that 
     are necessary and used for processing or assembling fishery 
     products aboard such a vessel.

     ``Sec. 55116. Canadian rail lines

       ``Section 55102 of this title does not apply to the 
     transportation of merchandise between points in the 
     continental United States, including Alaska, over through 
     routes in part over Canadian rail lines and connecting water 
     facilities if the routes have been recognized by the Surface 
     Transportation Board and rate tariffs for the routes have 
     been filed with the Board.

     ``Sec. 55117. Great Lakes rail route

       ``Section 55102 of this title does not apply to the 
     transportation of merchandise loaded on a railroad car or to 
     a motor vehicle with or without a trailer, and with its 
     passengers or contents when accompanied by the operator, when 
     the railroad car or motor vehicle is transported in a 
     railroad car ferry operated between fixed terminals on the 
     Great Lakes as part of a rail route, if--
       ``(1) the car ferry is owned by a common carrier by water 
     and operated as part of a rail route with the approval of the 
     Surface Transportation Board;
       ``(2) the stock of the common carrier by water, or its 
     predecessor, was owned or controlled by a common carrier by 
     rail prior to June 5, 1920;
       ``(3) the stock of the common carrier owning the car ferry 
     is, with the approval of the Board, now owned or controlled 
     by a common carrier by rail; and
       ``(4) the car ferry is built in and documented under the 
     laws of the United States.

     ``Sec. 55118. Foreign railroads whose road enters by ferry, 
       tugboat, or towboat

       ``A foreign railroad, whose road enters the United States 
     by ferry, tugboat, or towboat, may own and operate a vessel 
     not having a coastwise endorsement in connection with the 
     water transportation of the passenger, freight, express, 
     baggage, and mail cars used by that road, together with the 
     passengers, freight, express matter, baggage, and mails 
     transported in those cars. However, the foreign railroad is 
     subject to the same restrictions imposed by law on a vessel 
     of the United States entering a port of the United States 
     from the same foreign country. Except as otherwise authorized 
     by this chapter, the ferry, tugboat, or towboat may not, 
     under penalty of forfeiture, be used in the transportation of 
     merchandise between ports or places in the United States to 
     which the coastwise laws apply.

     ``Sec. 55119. Yukon River

       ``Section 55102 of this title does not apply to the 
     transportation of merchandise on the Yukon River until the 
     Alaska Railroad is completed and the Secretary of 
     Transportation finds that proper facilities will be available 
     for transportation by citizens of the United States to 
     properly handle the traffic.

     ``Sec. 55120. Transshipment of imported merchandise intended 
       for immediate exportation

       ``The Secretary of Homeland Security may prescribe 
     regulations for the transshipment and transportation of 
     merchandise that is imported into the United States by sea 
     for immediate exportation to a foreign port by sea, or by a 
     river, the right to ascend or descend which for the purposes 
     of commerce is secured by treaty to the citizens of the 
     United States and the subjects of a foreign power.

             ``CHAPTER 553--PASSENGER AND CARGO PREFERENCES

                        ``SUBCHAPTER I--GENERAL

``Sec.
``55301.  Priority loading for coal.
``55302.  Transportation of United States Government personnel.
``55303.  Motor vehicles owned by United States Government personnel.
``55304.  Exports financed by the United States Government.
``55305.  Cargoes procured, furnished, or financed by the United States 
              Government.

   ``SUBCHAPTER II--EXPORT TRANSPORTATION OF AGRICULTURAL COMMODITIES

``55311.  Findings and purposes.
``55312.  Determining prevailing world market price.
``55313.  Exemption of certain agricultural exports from cargo 
              preference provisions.
``55314.  Transportation requirements for certain exports sponsored by 
              the Secretary of Agriculture.
``55315.  Minimum tonnage.
``55316.  Financing the transportation of agricultural commodities.
``55317.  Termination of subchapter.
``55318.  Effect on other law.

             ``SUBCHAPTER III--AMERICAN GREAT LAKES VESSELS

``55331.  Definitions.
``55332.  Designating American Great Lakes vessels.
``55333.  Exemption from restriction on transporting certain cargo.
``55334.  Restrictions on operations.
``55335.  Revocations and terminations of designations.
``55336.  Civil penalty.

                        ``SUBCHAPTER I--GENERAL

     ``Sec. 55301. Priority loading for coal

       ``A vessel engaged in the coastwise transportation of coal 
     produced in the United States, from a port in the United 
     States to another port in the United States, shall be given 
     priority in loading at any of those ports ahead of a waiting 
     vessel engaged in the export transportation of coal produced 
     in the United States. However, if the Secretary of 
     Transportation finds that it is in the national interest, the 
     Secretary may eliminate this priority loading at any port. 
     The Secretary shall report to Congress within 30 days an 
     action eliminating priority loading under this section.

     ``Sec. 55302. Transportation of United States Government 
       personnel

       ``(a) In General.--An officer or employee of the United 
     States Government traveling by sea on official business 
     overseas or to or from a territory or possession of the 
     United States shall travel and transport personal effects on 
     a vessel documented under the laws of the United Sates if 
     such a vessel is available, unless the necessity of the 
     mission requires the use of a foreign vessel.
       ``(b) Regulations.--The Administrator of General Services 
     shall prescribe regulations under which agencies may not pay 
     for or reimburse an officer or employee for travel or 
     transportation expenses incurred on a foreign vessel in the 
     absence of satisfactory proof of the necessity of using the 
     vessel.

     ``Sec. 55303. Motor vehicles owned by United States 
       Government personnel

       ``Notwithstanding any other law, privately-owned American 
     shipping services may be used to transport motor vehicles 
     owned by personnel of the United States Government whenever 
     transportation of those vehicles at Government expense is 
     otherwise authorized by law.

     ``Sec. 55304. Exports financed by the United States 
       Government

       ``It is the sense of Congress that any loans made by an 
     instrumentality of the United States Government to foster the 
     exporting of agricultural or other products shall provide 
     that the products may be transported only on vessels of the 
     United States unless, as to any or all of those products, the 
     Secretary of Transportation, after investigation, certifies 
     to the instrumentality that vessels of the United States are 
     not available in sufficient number, in sufficient tonnage 
     capacity, on necessary schedules, or at reasonable rates.

     ``Sec. 55305. Cargoes procured, furnished, or financed by the 
       United States Government

       ``(a) Definition.--In this section, the term `privately-
     owned United States-flag commercial vessel' does not include 
     a vessel that, after September 21, 1961, was built or rebuilt 
     outside the United States or documented under the laws of a 
     foreign country, until the vessel has been documented under 
     the laws of the United States for at least 3 years.
       ``(b) Minimum Tonnage.--When the United States Government 
     procures, contracts for, or otherwise obtains for its own 
     account, or furnishes to or for the account of a foreign 
     country without provision for reimbursement, any equipment, 
     materials, or commodities, within or without the United 
     States, or advances funds or credits, or guarantees the 
     convertibility of foreign currencies in connection with the 
     furnishing of the equipment, materials, or commodities, the 
     appropriate agencies shall take steps necessary and 
     practicable to ensure that at least 50 percent of the gross 
     tonnage of the equipment, materials, or commodities (computed 
     separately for dry bulk carriers, dry cargo liners, and 
     tankers) which may be transported on ocean vessels is 
     transported on privately-owned United States-flag commercial 
     vessels, to the extent those vessels are available at fair 
     and reasonable rates for United States-flag commercial 
     vessels, in a manner that will ensure a fair and reasonable 
     participation of United States-flag commercial vessels in 
     those cargoes by geographic areas.
       ``(c) Waivers.--The President, the Secretary of Defense, or 
     Congress (by concurrent resolution or otherwise) may waive 
     this section temporarily by--

[[Page H7632]]

       ``(1) declaring the existence of an emergency justifying a 
     waiver; and
       ``(2) notifying the appropriate agencies of the waiver.
       ``(d) Programs of Other Agencies.--An agency having 
     responsibility under this section shall administer its 
     programs with respect to this section under regulations 
     prescribed by the Secretary of Transportation. The Secretary 
     shall review the administration of those programs and report 
     annually to Congress on their administration.

   ``SUBCHAPTER II--EXPORT TRANSPORTATION OF AGRICULTURAL COMMODITIES

     ``Sec. 55311. Findings and purposes

       ``(a) Findings.--Congress finds that--
       ``(1) a productive and healthy agricultural industry and a 
     strong and active United States maritime industry are vitally 
     important to the economic well-being and security of the 
     United States;
       ``(2) both industries must compete in international markets 
     increasingly dominated by foreign trade barriers and the 
     subsidization practices of foreign governments; and
       ``(3) increased agricultural exports and the use of 
     merchant vessels of the United States contribute positively 
     to the United States balance of trade and generate employment 
     opportunities in the United States.
       ``(b) Purposes.--The purposes of this subchapter are to--
       ``(1) enable the Secretary of Agriculture to plan export 
     programs effectively, by clarifying the ocean transportation 
     requirements applicable to those programs;
       ``(2) take immediate and positive steps to promote the 
     growth of the cargo-carrying capacity of the United States 
     merchant marine;
       ``(3) expand international trade in United States 
     agricultural commodities and products and develop, maintain, 
     and expand markets for United States agricultural exports;
       ``(4) improve the efficiency of administration of both the 
     commodity purchasing and selling activities and the ocean 
     transportation activities associated with export programs 
     sponsored by the Secretary;
       ``(5) stimulate and promote the agricultural and maritime 
     industries of the United States and encourage cooperative 
     efforts by both industries to address their common problems; 
     and
       ``(6) provide for the appropriate disposition of these 
     findings and purposes.

     ``Sec. 55312. Determining prevailing world market price

       ``(a) Agricultural Commodities and Products.--The 
     prevailing world market price for agricultural commodities or 
     their products shall be determined under this subchapter 
     under procedures prescribed by the Secretary of Agriculture. 
     The Secretary shall prescribe the procedures by regulation, 
     with notice and opportunity for public comment under section 
     553 of title 5.
       ``(b) Services and Non-Agricultural Commodities and 
     Products.--If a determination of the prevailing world market 
     price of any other type of materials, goods, equipment, or 
     service is required to determine whether a barter or exchange 
     transaction is subject to section 55314(b)(6) or (7) of this 
     title, the determination shall be made by the Secretary of 
     Agriculture in consultation with the heads of other 
     appropriate agencies.

     ``Sec. 55313. Exemption of certain agricultural exports from 
       cargo preference provisions

       ``Sections 55304 and 55305 of this title do not apply to 
     export activities of the Secretary of Agriculture or the 
     Commodity Credit Corporation under which--
       ``(1) agricultural commodities or their products acquired 
     by the Corporation are made available to United States 
     exporters, users, processors, or foreign purchasers for the 
     purpose of developing, maintaining, or expanding export 
     markets for United States agricultural commodities or their 
     products at prevailing world market prices;
       ``(2) payments are made available to United States 
     exporters, users, or processors or, except as provided in 
     section 55314 of this title, cash grants are made available 
     to foreign purchasers, for the purpose described in clause 
     (1);
       ``(3) commercial credit guarantees are blended with direct 
     credits from the Corporation to reduce the effective rate of 
     interest on export sales of United States agricultural 
     commodities or their products;
       ``(4) credit or credit guarantees for not more than 3 years 
     are extended by the Corporation to finance or guarantee 
     export sales of United States agricultural commodities or 
     their products; or
       ``(5) agricultural commodities or their products owned or 
     controlled by or under loan from the Corporation are 
     exchanged or bartered for materials, goods, equipment, or 
     services at least equal in value to the agricultural 
     commodities or their products for which they are exchanged or 
     bartered (determined on the basis of prevailing world market 
     prices at the time of the exchange or barter), but this 
     clause does not exempt from the cargo preference provisions 
     referred to in section 55314(b) of this title any requirement 
     otherwise applicable to the materials, goods, equipment, or 
     services imported under the transaction.

     ``Sec. 55314. Transportation requirements for certain exports 
       sponsored by the Secretary of Agriculture

       ``(a) Minimum Tonnage.--
       ``(1) In general.--In addition to the requirement under 
     section 55305 of this title for the transportation of a 
     percentage of gross tonnage on United States-flag vessels, 25 
     percent of the gross tonnage of agricultural commodities or 
     their products specified in subsection (b) shall be 
     transported each calendar year on United States-flag 
     commercial vessels that--
       ``(A) are necessary for national security; and
       ``(B) if more than 25 years old, were rebuilt within the 
     last 5 years and certified by the Secretary of Transportation 
     as having a useful life of at least 5 years after that 
     rebuilding.
       ``(2) Calendar year.--To provide for effective and 
     equitable administration of the cargo preference laws, the 
     calendar year for the purpose of compliance with minimum 
     percentage requirements is the 12-month period beginning 
     October 1 of each year.
       ``(b) Applicable Export Activity.--This section applies to 
     export activity (except inspection or weighing activities, 
     other activities carried out for health or safety, or 
     technical assistance provided in the handling of commercial 
     transactions) of the Secretary of Agriculture or the 
     Commodity Credit Corporation--
       ``(1) carried out under the Agricultural Trade Development 
     and Assistance Act of 1954 (7 U.S.C. 1691 et seq.);
       ``(2) carried out under section 416 of the Agricultural Act 
     of 1949 (7 U.S.C. 1431);
       ``(3) carried out under the Bill Emerson Humanitarian Trust 
     Act (7 U.S.C. 1736f-1);
       ``(4) under which agricultural commodities or their 
     products are--
       ``(A) donated through foreign governments or private or 
     public agencies, including intergovernmental organizations; 
     or
       ``(B) sold for foreign currencies or for dollars on credit 
     terms of more than 10 years;
       ``(5) under which agricultural commodities or their 
     products are made available for emergency food relief at less 
     than prevailing world market prices;
       ``(6) under which a cash grant is made directly or through 
     an intermediary to a foreign purchaser to enable the 
     purchaser to obtain United States agricultural commodities or 
     their products in an amount greater than the difference 
     between the prevailing world market price and the United 
     States market price, free along side vessel at a United 
     States port; or
       ``(7) under which agricultural commodities owned or 
     controlled by or under loan from the Corporation are 
     exchanged or bartered for materials, goods, equipment, or 
     services produced in foreign countries, except export 
     activities described in section 55313(5) of this title.
       ``(c) Additional Requirements.--
       ``(1) Application of section 55305.--The requirement for 
     United States-flag transportation under subsection (a) is 
     subject to the same terms and conditions as provided in 
     section 55305 of this title.
       ``(2) Allocation of commodities.--Subject to paragraph (3), 
     in carrying out this section and section 55305 of this title, 
     the Corporation shall take steps necessary and practicable, 
     and consistent with this section and section 55305, without 
     detriment to any port range to allocate, on the principle of 
     lowest landed cost without regard to the country of 
     documentation of the vessel, 25 percent of the bagged, 
     processed, or fortified commodities provided under title II 
     of the Agricultural Trade Development and Assistance Act of 
     1954 (7 U.S.C. 1721 et seq.).
       ``(3) Calculations.--In carrying out paragraph (2), first 
     there shall be calculated the allocation of 100 percent of 
     the quantity to be procured on an overall lowest landed cost 
     basis without regard to the country of documentation of the 
     vessel, and then there shall be allocated to the Great Lakes 
     port range any cargoes for which it has the lowest landed 
     cost under that calculation. The requirements for United 
     States-flag transportation under this section and section 
     55305 of this title do not apply to commodities allocated to 
     the Great Lakes port range under paragraph (2). To the extent 
     that the Great Lakes port range is used to furnish and 
     transport less than 25 percent of the total annual tonnage of 
     commodities to which paragraph (2) applies, the commodities 
     allocated to the Great Lakes port range under paragraph (2) 
     may not be reallocated or diverted to another port range to 
     meet the requirements for United States-flag transportation 
     under this section and section 55305 of this title.
       ``(4) Awarding contracts.--In awarding a contract for the 
     transportation by vessel of commodities from the Great Lakes 
     port range pursuant to an export activity referred to in 
     subsection (b), an agency--
       ``(A) shall consider expressions of freight interest for 
     any vessel from a vessel operator who meets reasonable 
     requirements for financial and operational integrity; and
       ``(B) may not deny award of the contract to a person based 
     on the type of vessel on which the transportation would be 
     provided (including on the basis that the transportation 
     would not be provided on a liner vessel, as that term is used 
     in the Shipping Act of 1984, as in effect on November 14, 
     1995), if the person otherwise satisfies reasonable 
     requirements for financial and operational integrity.
       ``(5) Nonavailability of vessels.--A determination of 
     nonavailability of United States-flag vessels resulting from 
     the application of this subsection may not reduce the gross 
     tonnage of commodities required by this section and section 
     55305 of this title to be transported on United States-flag 
     vessels.

     ``Sec. 55315. Minimum tonnage

       ``(a) Definition.--In this section, the term `base period' 
     means the 5-year period running from the sixth through the 
     second prior fiscal years.
       ``(b) Requirement.--For each fiscal year, the minimum 
     quantity of agricultural commodities to be exported under 
     programs subject to section 55314 of this title is the 
     average of the tonnage exported under those programs during 
     the base period, discarding the high and low years.
       ``(c) Waivers.--The President may waive the minimum 
     quantity for a fiscal year under this section if the 
     President determines and reports

[[Page H7633]]

     to Congress, together with reasons, that the quantity cannot 
     be used effectively for the purposes of those programs or, 
     based on a certification by the Secretary of Agriculture, 
     that the commodities are not available for reasons that 
     include the unavailability of funds.

     ``Sec. 55316. Financing the transportation of agricultural 
       commodities

       ``(a) Financing of Increased Charges.--The Secretary of 
     Transportation shall finance any increased ocean freight 
     charges incurred in any fiscal year that result from the 
     application of section 55314 of this title.
       ``(b) Reimbursement of Increased Charges.--
       ``(1) In general.--The Secretary of Transportation shall 
     reimburse the Secretary of Agriculture and the Commodity 
     Credit Corporation for the amount by which, in any fiscal 
     year--
       ``(A) the total cost of ocean freight and ocean freight 
     differential for which obligations are incurred by the 
     Secretary of Agriculture and the Corporation on exports of 
     agricultural commodities and their products under the 
     agricultural export programs specified in section 55314(b) of 
     this title; exceeds
       ``(B) 20 percent of the value of the commodities and their 
     products and the cost of the ocean freight and ocean freight 
     differential on which obligations are incurred by the 
     Secretary of Agriculture and the Corporation during that 
     fiscal year.
       ``(2) Commodities shipped from inventory.--For purposes of 
     this subsection, commodities shipped from the inventory of 
     the Corporation shall be valued as provided in section 412(d) 
     of the Agricultural Trade Development and Assistance Act of 
     1954 (7 U.S.C. 1736f(d)).
       ``(c) Issuance and Purchase of Obligations.--
       ``(1) Issuance.--To meet the expenses required to be 
     assumed under subsections (a) and (b), the Secretary of 
     Transportation shall issue obligations to the Secretary of 
     the Treasury. The Secretary of Transportation, with the 
     approval of the Secretary of the Treasury, shall prescribe 
     the form, denomination, maturity, and other terms (except the 
     interest rate) of the obligations. The Secretary of the 
     Treasury shall set the interest rate for the obligations, 
     considering the average market yield on outstanding 
     marketable obligations of the United States Government of 
     comparable maturities during the month before the obligations 
     are issued.
       ``(2) Purchase.--The Secretary of the Treasury shall 
     purchase the obligations issued under this subsection. To 
     purchase the obligations, the Secretary of the Treasury may 
     use as a public debt transaction the proceeds from the sale 
     of securities issued under chapter 31 of title 31. The 
     purposes for which securities may be issued under that 
     chapter are extended to include the purchase of obligations 
     under this subsection. A redemption or purchase of the 
     obligations by the Secretary of the Treasury is a public debt 
     transaction of the Government.
       ``(d) Source of Funds for Reimbursement.--Reimbursement of 
     the Secretary of Transportation for costs incurred under this 
     section shall be made with appropriated funds rather than 
     through cancellation of notes.
       ``(e) Appropriations.--
       ``(1) Authorization.--Each fiscal year, there is authorized 
     to be appropriated an amount sufficient to reimburse the 
     Secretary of Transportation for the costs incurred under this 
     section, including administrative expenses and the principal 
     and interest due on obligations issued to the Secretary of 
     the Treasury.
       ``(2) Appropriation for administrative expenses.--Each 
     fiscal year, such amounts as may be necessary are hereby 
     appropriated to pay interest and to liquidate debt on 
     obligations issued to the Secretary of the Treasury under 
     this section.
       ``(f) Notification to Congress of Insufficiency.--If the 
     Secretary of Transportation is unable to obtain the funds 
     necessary to finance the increased ocean freight charges 
     resulting from the requirements of subsections (a) and (b) 
     and section 55314(a) of this title, the Secretary shall 
     notify Congress within 10 working days of the discovery of 
     the insufficiency.

     ``Sec. 55317. Termination of subchapter

       ``This subchapter terminates 90 days after the date on 
     which a notification is made under section 55316(f) of this 
     title, except for shipments of agricultural commodities and 
     their products subject to contracts made before the end of 
     that 90-day period, unless within that 90-day period the 
     Secretary of Transportation proclaims that funds are 
     available to finance increased freight charges resulting from 
     the requirements of sections 55314(a) and 55316(a) and (b) of 
     this title. On the termination of this subchapter under this 
     section--
       ``(1) this subchapter does not exempt export activities 
     from, or subject export activities to, the cargo preference 
     laws; and
       ``(2) the 50-percent requirement in section 55305 of this 
     title remains in effect.

     ``Sec. 55318. Effect on other law

       ``This subchapter does not affect chapter 5 of title 5.

             ``SUBCHAPTER III--AMERICAN GREAT LAKES VESSELS

     ``Sec. 55331. Definitions

       ``In this subchapter:
       ``(1) American great lakes vessel.--The term `American 
     Great Lakes vessel' means a vessel so designated under 
     section 55332 of this title, but only during the period the 
     designation is in effect.
       ``(2) Great lakes.--The term `Great Lakes' means Lake 
     Superior, Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, 
     the Saint Lawrence River west of Saint Regis, New York, and 
     their connecting and tributary waters.
       ``(3) Great lakes shipping season.--The term `Great Lakes 
     shipping season' means the period each year during which the 
     Saint Lawrence Seaway is open for navigation by vessels, as 
     declared by the Saint Lawrence Seaway Development 
     Corporation.

     ``Sec. 55332. Designating American Great Lakes vessels

       ``(a) Designations.--The Secretary of Transportation shall 
     designate a vessel as an American Great Lakes vessel if--
       ``(1) an application for designation is submitted to the 
     Secretary under regulations prescribed by the Secretary;
       ``(2) the vessel is documented under the laws of the United 
     States;
       ``(3) the vessel, on the effective date of the designation, 
     is--
       ``(A) at least 1, but not more than 6, years old; or
       ``(B) at least 1, but not more than 11, years old if the 
     Secretary finds that suitable vessels are not available to 
     provide the type of service for which the vessel will be used 
     after the designation;
       ``(4) the vessel has not previously been designated as an 
     American Great Lakes vessel; and
       ``(5) the owner makes an agreement as provided under 
     subsection (b).
       ``(b) Agreements.--A vessel may be designated as an 
     American Great Lakes vessel only if the person that will be 
     the owner of the vessel at the time of the designation makes 
     an agreement with the Secretary providing that if the 
     Secretary determines that the vessel is necessary to the 
     defense of the United States, the United States Government 
     will have an exclusive right, during the 120-day period 
     following the date of a revocation of the designation under 
     section 55335 of this title, to purchase the vessel for a 
     price equal to the greater of--
       ``(1) the approximate world market value of the vessel; or
       ``(2) the cost of the vessel to the owner less a reasonable 
     amount for depreciation.
       ``(c) Certain Foreign Documentation and Sale Not 
     Prohibited.--Notwithstanding any other law, if the Government 
     does not exercise its right of purchase under an agreement 
     under subsection (b), the owner of the vessel is not 
     prohibited from--
       ``(1) documenting the vessel under the laws of a foreign 
     country; or
       ``(2) selling the vessel to a person not a citizen of the 
     United States.
       ``(d) Regulations.--The Secretary shall prescribe 
     regulations establishing requirements for submitting 
     applications under this section.

     ``Sec. 55333. Exemption from restriction on transporting 
       certain cargo

       ``The 3-year documentation requirement of section 55305(a) 
     of this title does not apply to a vessel designated as an 
     American Great Lakes vessel during the period of its 
     designation.

     ``Sec. 55334. Restrictions on operations

       ``(a) Prohibitions.--Except as provided in subsection (b), 
     an American Great Lakes vessel may not be used to--
       ``(1) engage in trade--
       ``(A) from a port in the United States that is not located 
     on the Great Lakes; or
       ``(B) between ports in the United States;
       ``(2) transport bulk cargo (as defined in section 40102 of 
     this title) that is subject to section 55305 or 55314 of this 
     title or section 2631 of title 10; or
       ``(3) provide a service (except ocean freight service) as--
       ``(A) a contract carrier; or
       ``(B) a common carrier on a fixed advertised schedule 
     offering frequent sailings at regular intervals in the 
     foreign trade of the United States.
       ``(b) Off-Season Exception.--An American Great Lakes vessel 
     may be used for not more than 90 days during any 12-month 
     period to engage in trade prohibited by subsection (a)(1)(A), 
     except during the Great Lakes shipping season.

     ``Sec. 55335. Revocations and terminations of designations

       ``(a) Revocations.--After notice and an opportunity for a 
     hearing, the Secretary of Transportation may revoke a 
     designation of a vessel as an American Great Lakes vessel if 
     the Secretary finds that--
       ``(1) the vessel does not meet a requirement for the 
     designation;
       ``(2) the vessel has been operated in violation of this 
     subchapter; or
       ``(3) the owner or operator of the vessel has violated an 
     agreement made under section 55332(b) of this title.
       ``(b) Terminations.--On petition and a showing of good 
     cause by the owner of a vessel, the Secretary may terminate 
     the designation of a vessel as an American Great Lakes 
     vessel. The Secretary may impose conditions in a termination 
     order to prevent significant adverse effects on other 
     operators of United States-flag vessels.

     ``Sec. 55336. Civil penalty

       ``After notice and an opportunity for a hearing, the 
     Secretary of Transportation may impose a civil penalty of not 
     more than $1,000,000 on the owner of an American Great Lakes 
     vessel for any act for which the designation may be revoked 
     under section 55335 of this title.

                      ``CHAPTER 555--MISCELLANEOUS

``Sec.
``55501.  Mobile trade fairs.

     ``Sec. 55501. Mobile trade fairs

       ``(a) In General.--The Secretary of Commerce shall 
     encourage and promote the development and use of mobile trade 
     fairs designed to show and sell the products of United States 
     business and agriculture at foreign ports and at other 
     commercial centers throughout the world where the operators 
     of the fairs use, insofar as practicable, vessels and 
     aircraft of the United States in transporting their exhibits.
       ``(b) Technical and Financial Assistance.--When the 
     Secretary determines that a mobile

[[Page H7634]]

     trade fair provides an economical and effective means of 
     promoting export sales, the Secretary may provide to the 
     operator of the fair--
       ``(1) technical assistance and support; and
       ``(2) financial assistance to defray certain expenses 
     incurred outside the United States, except the cost of 
     transportation on foreign vessels and aircraft.
       ``(c) Use of Foreign Currencies.--To carry out this 
     section, the President may use, in addition to amounts 
     appropriated to carry out trade promotion activities, foreign 
     currencies owned by or owed to the United States Government.

           ``Part E--Control of Merchant Marine Capabilities

                ``CHAPTER 561--RESTRICTIONS ON TRANSFERS

``Sec.
``56101.  Approval required to transfer vessel to noncitizen.
``56102.  Additional controls during war or national emergency.
``56103.  Conditional approvals.
``56104.  Penalty for false statements.
``56105.  Forfeiture procedure.

     ``Sec. 56101. Approval required to transfer vessel to 
       noncitizen

       ``(a) Restrictions.--
       ``(1) In General.--Except as otherwise provided in this 
     section, section 12119 of this title, or section 611 of the 
     Merchant Marine Act, 1936, a person may not, without the 
     approval of the Secretary of Transportation--
       ``(A) sell, lease, charter, deliver, or in any other manner 
     transfer, or agree to sell, lease, charter, deliver, or in 
     any other manner transfer, to a person not a citizen of the 
     United States, an interest in or control of--
       ``(i) a documented vessel owned by a citizen of the United 
     States; or
       ``(ii) a vessel last documented under the laws of the 
     United States; or
       ``(B) place under foreign registry, or operate under the 
     authority of a foreign country, a documented vessel or a 
     vessel last documented under the laws of the United States.
       ``(2) Exceptions.--Paragraph (1)(A) does not apply to a 
     vessel that has been operated only for pleasure or only as a 
     fishing vessel, fish processing vessel, or fish tender vessel 
     (as defined in section 2101 of this title).
       ``(b) Approval Before Documentation.--To promote financing 
     with respect to a vessel to be documented under chapter 121 
     of this title, the Secretary may grant approval under 
     subsection (a) before the vessel is documented.
       ``(c) Exceptions.--Notwithstanding any other provision of 
     this subtitle, the Merchant Marine Act, 1936, or any contract 
     with the Secretary made under this subtitle or that Act, a 
     person may place a vessel under foreign registry without the 
     approval of the Secretary if--
       ``(1)(A) the Secretary, in conjunction with the Secretary 
     of Defense, determines that at least one replacement vessel 
     of equal or greater military capability and of a capacity 
     that is equivalent or greater, as measured by deadweight 
     tons, gross tons, or container equivalent units, as 
     appropriate, is documented under chapter 121 of this title by 
     the owner of the vessel placed under foreign registry; and
       ``(B) the replacement vessel is not more than 10 years old 
     on the date of that documentation; or
       ``(2) an operating agreement covering the vessel under 
     chapter 531 of this title has expired.
       ``(d) Status of Prohibited Transaction.--A charter, sale, 
     or transfer of a vessel, or of an interest in or control of a 
     vessel, in violation of this section is void.
       ``(e) Penalties.--
       ``(1) Criminal penalty.--A person that knowingly sells, 
     charters, or transfers a vessel, or an interest in or control 
     of a vessel, in violation of this section shall be fined 
     under title 18, imprisoned for not more than 5 years, or 
     both.
       ``(2) Civil penalty.--A person that sells, charters, or 
     transfers a vessel, or an interest in or control of a vessel, 
     in violation of this section is liable to the United States 
     Government for a civil penalty of not more than $10,000 for 
     each violation.
       ``(3) Forfeiture.--A documented vessel may be seized by and 
     forfeited to the Government if, in violation of this section, 
     a person--
       ``(A) knowingly sells, charters, or transfers the vessel or 
     an interest in or control of the vessel; or
       ``(B) places the vessel under foreign registry or operates 
     the vessel under the authority of a foreign country.

     ``Sec. 56102. Additional controls during war or national 
       emergency

       ``(a) In General.--During war, or a national emergency 
     declared by Presidential proclamation, a person may not, 
     without the approval of the Secretary of Transportation--
       ``(1) place under foreign registry or flag a vessel owned 
     in whole or in part by a citizen of the United States or a 
     corporation incorporated under the laws of the United States 
     or of a State;
       ``(2) sell, mortgage, lease, charter, deliver, or in any 
     other manner transfer, or agree to sell, mortgage, lease, 
     charter, deliver, or in any other manner transfer, to a 
     person not a citizen of the United States--
       ``(A) a vessel owned as described in clause (1), or an 
     interest therein;
       ``(B) a vessel documented under the laws of the United 
     States, or an interest therein; or
       ``(C) a facility for building or repairing vessels, or an 
     interest therein;
       ``(3) issue, assign, or transfer to a person not a citizen 
     of the United States an instrument of indebtedness secured by 
     a mortgage of a vessel to a trustee, by an assignment of an 
     owner's interest in a vessel under construction to a trustee, 
     or by a mortgage of a facility for building or repairing 
     vessels to a trustee, unless the trustee or a substitute 
     trustee is approved by the Secretary under subsection (b);
       ``(4) enter into an agreement or understanding to construct 
     a vessel in the United States for, or to be delivered to, a 
     person not a citizen of the United States without expressly 
     stipulating that construction will not begin until after the 
     war or national emergency has ended;
       ``(5) enter into an agreement or understanding whereby 
     there is vested in, or for the benefit of, a person not a 
     citizen of the United States the controlling interest in a 
     corporation that is incorporated under the laws of the United 
     States or a State and that owns a vessel or facility for 
     building or repairing vessels; or
       ``(6) cause or procure a vessel, constructed in whole or in 
     part in the United States and never cleared for a foreign 
     port, to depart from a port of the United States before it 
     has been documented under the laws of the United States.
       ``(b) Trustees.--
       ``(1) Approval.--The Secretary shall approve a trustee or 
     substitute trustee under subsection (a)(3) if and only if the 
     trustee is a bank or trust company that--
       ``(A) is organized as a corporation, and is doing business, 
     under the laws of the United States or a State;
       ``(B) is authorized under those laws to exercise corporate 
     trust powers;
       ``(C) is a citizen of the United States;
       ``(D) is subject to supervision or examination by Federal 
     or State authority; and
       ``(E) has a combined capital and surplus (as set forth in 
     its most recent published report of condition) of at least 
     $3,000,000.
       ``(2) Disapproval.--If a trustee or substitute trustee 
     ceases to meet the conditions in paragraph (1), the Secretary 
     shall disapprove the trustee or substitute trustee. After the 
     disapproval, the restrictions on transfer or assignment 
     without the Secretary's approval in subsection (a)(3) apply.
       ``(3) Operation of vessel.--During a period when subsection 
     (a) applies, a trustee referred to in subsection (a)(3), even 
     though approved as a trustee by the Secretary, may not 
     operate the vessel under the mortgage or assignment without 
     the Secretary's approval.
       ``(c) Status of Prohibited Transaction.--A transaction in 
     violation of this section is void.
       ``(d) Recovery of Consideration.--
       ``(1) In general.--A person that deposited or paid 
     consideration in connection with a transaction prohibited by 
     this section may recover the consideration after tender of 
     the vessel, facility, stock, or other security, or interest 
     therein, to the person entitled to it, or the forfeiture 
     thereof to the United States Government.
       ``(2) Exception.--Paragraph (1) does not apply if the 
     person in whose interest the consideration was deposited, or 
     to whom it was paid, entered into the transaction in the 
     belief that the person depositing or paying the consideration 
     was a citizen of the United States.
       ``(e) Penalties.--
       ``(1) Criminal penalty.--A person that violates, or 
     attempts or conspires to violate, this section shall be fined 
     under title 18, imprisoned for not more than 5 years, or 
     both.
       ``(2) Forfeiture.--The following shall be forfeited to the 
     Government:
       ``(A) A vessel, a facility for building or repairing 
     vessels, or an interest in a vessel or such a facility, that 
     is sold, mortgaged, leased, chartered, delivered, 
     transferred, or documented, or agreed to be sold, mortgaged, 
     leased, chartered, delivered, transferred, or documented, in 
     violation of this section.
       ``(B) Stock and other securities sold or transferred, or 
     agreed to be sold or transferred, in violation of this 
     section.
       ``(C) A vessel departing in violation of subsection (a)(6).

     ``Sec. 56103. Conditional approvals

       ``(a) In General.--In approving an act or transaction under 
     section 56101 or 56102 of this title, the Secretary of 
     Transportation may do so absolutely or upon conditions the 
     Secretary considers advisable. The Secretary shall state the 
     conditions in the notice of approval.
       ``(b) Violations.--A violation of a condition of approval 
     is subject to the same penalties as a violation resulting 
     from an act done without the required approval. The violation 
     occurs at the time the condition is violated.

     ``Sec. 56104. Penalty for false statements

       ``A person that knowingly makes a false statement of a 
     material fact to the Secretary of Transportation or another 
     officer, employee, or agent of the Department of 
     Transportation, to obtain the Secretary's approval under 
     section 56101 or 56102 of this title, shall be fined under 
     title 18, imprisoned for not more than 5 years, or both.

     ``Sec. 56105. Forfeiture procedure

       ``(a) In General.--A forfeiture under this chapter may be 
     enforced in the same way as a forfeiture under the laws on 
     the collection of duties. However, such a forfeiture may be 
     remitted without seizure of the vessel.
       ``(b) Prior Convictions.--In a proceeding under this 
     chapter to enforce a forfeiture, a prior criminal conviction 
     of a person for a violation of this chapter with respect to 
     the subject matter of the forfeiture is prima facie evidence 
     of the violation against the person convicted.

            ``CHAPTER 563--EMERGENCY ACQUISITION OF VESSELS

``Sec.
``56301.  General authority.
``56302.  Charter terms.
``56303.  Compensation.
``56304.  Disputed compensation.
``56305.  Vessel encumbrances.
``56306.  Use and transfer of vessels.
``56307.  Return of vessels.

     ``Sec. 56301. General authority

       ``During a national emergency declared by Presidential 
     proclamation, or a period for which

[[Page H7635]]

     the President has proclaimed that the security of the 
     national defense makes it advisable, the Secretary of 
     Transportation may requisition or purchase, or requisition or 
     charter the use of, a vessel owned by citizens of the United 
     States, a documented vessel, or a vessel under construction 
     in the United States.

     ``Sec. 56302. Charter terms

       ``(a) In General.--If a vessel is requisitioned for use but 
     not ownership under this chapter, the Secretary of 
     Transportation, at the time of requisition or as soon 
     thereafter as the situation allows, shall offer the person 
     entitled to possession of the vessel a charter containing--
       ``(1) the terms the Secretary believes should govern the 
     relationship between the United States Government and the 
     person; and
       ``(2) the rate of hire the Secretary considers just 
     compensation for the use of the vessel and the services 
     required under the charter.
       ``(b) Refusal To Accept.--If the person does not accept the 
     charter and rate of hire, the parties shall proceed as 
     provided in section 56304 of this title.

     ``Sec. 56303. Compensation

       ``(a) In General.--As soon as practicable, the Secretary of 
     Transportation shall determine and pay just compensation for 
     a vessel requisitioned under this chapter.
       ``(b) Factors Not Affecting Value.--The value of a vessel 
     may not be considered enhanced by the circumstances requiring 
     its requisition. Consequential damages arising from the 
     requisition may not be paid.
       ``(c) Effect of Construction-Differential Subsidy.--
       ``(1) If paid.--If a construction-differential subsidy has 
     been paid for the vessel, the value of the vessel at the time 
     of requisition shall be determined under section 802 of the 
     Merchant Marine Act, 1936.
       ``(2) If not paid.--If a construction-differential subsidy 
     has not been paid for the vessel, the value of any national 
     defense features previously paid for by the United States 
     Government shall be excluded.
       ``(d) Loss or Damage During Charter.--If a vessel is lost 
     or damaged by a risk assumed by the Government under the 
     charter, but a valuation for the vessel or a means of 
     compensation has not been agreed to, the Secretary shall pay 
     just compensation for the loss or damage, to the extent the 
     person is not reimbursed through insurance.

     ``Sec. 56304. Disputed compensation

       ``If the person entitled to compensation disputes the 
     amount of just compensation determined by the Secretary of 
     Transportation under this chapter, the Secretary shall pay 
     the person, as a tentative advance, 75 percent of the amount 
     determined. The person may bring a civil action against the 
     United States Government to recover just compensation. If the 
     tentative advance paid under this section is greater than the 
     amount of the court's judgment, the person shall refund the 
     difference.

     ``Sec. 56305. Vessel encumbrances

       ``(a) In General.--The existence of an encumbrance on a 
     vessel does not prevent the requisition of the vessel under 
     this chapter.
       ``(b) Deposit in Treasury.--
       ``(1) In general.--If an encumbrance exists, the Secretary 
     of Transportation may deposit part of the compensation or 
     advance of compensation to be paid under this chapter (but 
     not more than the total amount of all encumbrances) in a fund 
     in the Treasury. The Secretary shall publish notice of the 
     creation of the fund in the Federal Register.
       ``(2) Availability of amounts deposited.--Amounts deposited 
     in the fund shall be available to pay the compensation or any 
     of the encumbrances (including encumbrances stipulated to in 
     a court of the United States or a State) existing at the time 
     the vessel was requisitioned.
       ``(c) Civil Action.--
       ``(1) In general.--Within 6 months after publication of 
     notice under subsection (b), the holder of an encumbrance may 
     bring a civil action in admiralty, according to the 
     principles of libels in rem, against the fund.
       ``(2) Venue.--The action must be brought in the district 
     court of the United States--
       ``(A) from whose custody the vessel was or may be 
     requisitioned; or
       ``(B) in whose district the vessel was located when it was 
     requisitioned.
       ``(3) Service of process.--Service of process shall be made 
     on the appropriate United States Attorney, the Attorney 
     General, and the Secretary, in the manner provided by the 
     Federal Rules of Civil Procedure (28 App. U.S.C.). Notice of 
     the action shall be given to all interested persons as 
     ordered by the court.
       ``(4) As between private parties.--The action shall proceed 
     and be determined according to the principles of law and the 
     rules of practice applicable in like cases between private 
     parties.

     ``Sec. 56306. Use and transfer of vessels

       ``(a) In General.--The Secretary of Transportation may 
     repair, recondition, reconstruct, operate, or charter for 
     operation, a vessel acquired under this chapter.
       ``(b) Transfer to Other Agencies.--The Secretary may 
     transfer the possession or control of a vessel acquired under 
     this chapter to another department or agency of the United 
     States Government on terms and conditions approved by the 
     President. The department or agency shall promptly reimburse 
     the Secretary for expenditures for just compensation, 
     purchase price, charter hire, repairs, reconditioning, or 
     reconstruction.

     ``Sec. 56307. Return of vessels

       ``When a vessel requisitioned for use but not ownership is 
     returned to the owner, the Secretary of Transportation 
     shall--
       ``(1) return the vessel in a condition at least as good as 
     when taken, less ordinary wear and tear; or
       ``(2) pay the owner an amount sufficient to recondition the 
     vessel to that condition, less ordinary wear and tear.

      ``CHAPTER 565--ESSENTIAL VESSELS AFFECTED BY NEUTRALITY ACT

``Sec.
``56501.  Definition.
``56502.  Adjusting obligations and arranging maintenance.
``56503.  Types of adjustments and arrangements.
``56504.  Changes in adjustments and arrangements.

     ``Sec. 56501. Definition

       ``In this chapter, the term `essential vessel' means a 
     vessel that is--
       ``(1)(A) security for a mortgage indebtedness to the United 
     States Government; or
       ``(B) constructed under this subtitle or required by a 
     contract under this subtitle to be operated on a certain 
     essential foreign trade route; and
       ``(2) necessary in the interests of commerce and national 
     defense to be maintained in condition for prompt use.

     ``Sec. 56502. Adjusting obligations and arranging maintenance

       ``(a) General Authority.--On written application, the 
     Secretary of Transportation may adjust obligations and 
     arrange for maintenance of an essential vessel as provided in 
     this chapter if the Secretary determines, after any 
     investigation or proceeding the Secretary considers 
     desirable, that--
       ``(1) the operation of the vessel in the service, route, or 
     line to which it is assigned under this subtitle, or in which 
     it otherwise would be operated, is not--
       ``(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 
     441 et seq.) or a proclamation issued under that Act; or
       ``(B) compatible with maintaining the availability of the 
     vessel for national defense and commerce;
       ``(2) it is not feasible under existing law to employ the 
     vessel in any other service or operation in foreign or 
     domestic trade (except temporary or emergency operation under 
     section 56503(b)(5) of this title); and
       ``(3) the applicant, because of the restrictions of the 
     Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or the 
     withdrawal of vessels for national defense under clause (1), 
     is not earning or will not earn a reasonable return on the 
     capital necessarily employed in its business.
       ``(b) Effective Period.--Adjustments and arrangements under 
     subsection (a) shall continue in effect only as long as the 
     circumstances described in subsection (a) continue to exist.

     ``Sec. 56503. Types of adjustments and arrangements

       ``(a) Suspension Requirements.--An adjustment or 
     arrangement under this chapter shall include suspension of--
       ``(1) the requirement to operate the vessel in foreign 
     trade under the applicable operating-differential or 
     construction-differential subsidy contract or mortgage or 
     other agreement; and
       ``(2) the right to operating-differential subsidy for the 
     vessel.
       ``(b) Discretionary Adjustments and Arrangements.--To the 
     extent the Secretary of Transportation considers appropriate 
     to carry out the purposes of this subtitle, an adjustment or 
     arrangement under this chapter may include any of the 
     following:
       ``(1) Lay-up of the vessel by the owner or in the custody 
     of the Secretary, with payment or reimbursement by the 
     Secretary of necessary and proper expenses (including 
     reasonable overhead and insurance) or a fixed periodic 
     allowance instead of payment or reimbursement.
       ``(2) Postponement, for not more than the total period of 
     the lay-up, of the maturity date of each installment of the 
     principal of obligations to the United States Government for 
     the vessel (regardless of whether the maturity date is during 
     a lay-up period), or rearrangement of those maturities.
       ``(3) Postponement or cancellation of interest accruing on 
     the obligations during a lay-up period.
       ``(4) Extension, for not more than the total period of the 
     lay-up, of the 20-year life limitation for the vessel and 
     other limitations and provisions of this subtitle based on a 
     20-year life.
       ``(5) Provision for temporary or emergency employment of 
     the vessel (instead of lay-up) as may be practicable, with 
     such arrangements for management of the vessel, payment of 
     expenses, and application of the proceeds of the employment, 
     as the Secretary may approve, with any period of operation 
     being included as part of the lay-up period.
       ``(6) Payment to the Secretary, on termination of the 
     arrangements with the applicant, of the applicant's net 
     profits (earned while the arrangements were in effect) in 
     excess of 10 percent a year on the capital necessarily 
     employed in the applicant's business, as reimbursement for 
     obligations postponed or canceled and expenses incurred or 
     paid by the Secretary under this section.
       ``(c) Laid-Up Vessels.--Under subsection (b)(6), capital of 
     the applicant represented by a vessel of the applicant laid-
     up or operated under this section shall be included in 
     capital necessarily employed in the applicant's business. The 
     Secretary may require a vessel laid-up or operated under this 
     section to be security for reimbursement.

     ``Sec. 56504. Changes in adjustments and arrangements

       ``The Secretary of Transportation may change an adjustment 
     or arrangement made under this chapter as the Secretary 
     considers necessary to carry out this chapter.

[[Page H7636]]

              ``Part F--Government-Owned Merchant Vessels

                    ``CHAPTER 571--GENERAL AUTHORITY

``Sec.
``57101.  Placement of vessels in National Defense Reserve Fleet.
``57102.  Disposition of vessels not worth preserving.
``57103.  Sale of obsolete vessels in National Defense Reserve Fleet.
``57104.  Acquisition of vessels from sale of obsolete vessels.
``57105.  Acquisition of vessels for essential services, routes, or 
              lines.
``57106.  Maintenance, improvement, and operation of vessels.
``57107.  Vessels for other agencies.
``57108.  Consideration of ballast and equipment in determining selling 
              price.
``57109.  Operation of vessels purchased, chartered, or leased from 
              Secretary of Transportation.

     ``Sec. 57101. Placement of vessels in National Defense 
       Reserve Fleet

       ``(a) In General.--Any vessel acquired by the Maritime 
     Administration shall be placed in the National Defense 
     Reserve Fleet maintained under section 11 of the Merchant 
     Ship Sales Act of 1946 (50 App. U.S.C. 1744).
       ``(b) Removal From Fleet.--A vessel placed in the Fleet 
     under subsection (a) may not be traded out or sold from the 
     Fleet, except as provided in section 57102, 57103, or 57104 
     or chapter 533, 537, 573, or 575 of this title.

     ``Sec. 57102. Disposition of vessels not worth preserving

       ``(a) In General.--If the Secretary of Transportation 
     determines that a vessel owned by the Maritime Administration 
     is of insufficient value for commercial or military operation 
     to warrant its further preservation, the Secretary may scrap 
     the vessel or sell the vessel for cash.
       ``(b) Selling Procedure.--The sale of a vessel under 
     subsection (a) shall be made on the basis of competitive 
     sealed bids, after an appraisal and due advertisement. The 
     purchaser does not have to be a citizen of the United States. 
     The purchaser shall provide a surety bond, with a surety 
     approved by the Secretary, to ensure that the vessel will not 
     be operated in the foreign trade of the United States at any 
     time within 10 years after the sale, in competition with a 
     vessel owned by a citizen of the United States and documented 
     under the laws of the United States.

     ``Sec. 57103. Sale of obsolete vessels in National Defense 
       Reserve Fleet

       ``(a) In General.--The Secretary of Transportation may 
     convey the right, title, and interest of the United States 
     Government in any vessel of the National Defense Reserve 
     Fleet that has been identified by the Secretary as an 
     obsolete vessel of insufficient value to warrant its further 
     preservation, if the recipient--
       ``(1) is a non-profit organization, a State, or a municipal 
     corporation or political subdivision of a State;
       ``(2) agrees not to use, or allow others to use, the vessel 
     for commercial transportation purposes;
       ``(3) agrees to make the vessel available to the Government 
     whenever the Secretary indicates that it is needed by the 
     Government;
       ``(4) agrees to hold the Government harmless for any claims 
     arising from exposure to asbestos, polychlorinated biphenyls, 
     lead paint, or other hazardous substances after conveyance of 
     the vessel, except for claims arising from use of the vessel 
     by the Government;
       ``(5) has a conveyance plan and a business plan that 
     describes the intended use of the vessel, each of which has 
     been submitted to and approved by the Secretary;
       ``(6) has provided proof, as determined by the Secretary, 
     of resources sufficient to accomplish the transfer, necessary 
     repairs and modifications, and initiation of the intended use 
     of the vessel; and
       ``(7) agrees that when the recipient no longer requires the 
     vessel for use as described in the business plan required 
     under clause (5)--
       ``(A) the recipient will, at the discretion of the 
     Secretary, reconvey the vessel to the Government in good 
     condition except for ordinary wear and tear; or
       ``(B) if the Board of Trustees of the recipient has decided 
     to dissolve the recipient according to the laws of the State 
     in which the recipient is incorporated, then--
       ``(i) the recipient shall distribute the vessel, as an 
     asset of the recipient, to a person that has been determined 
     exempt from taxation under section 501(c)(3) of the Internal 
     Revenue Code of 1986 (26 U.S.C. 501(c)(3)), or to the Federal 
     Government or a State or local government for a public 
     purpose; and
       ``(ii) the vessel shall be disposed of by a court of 
     competent jurisdiction of the county in which the principal 
     office of the recipient is located, for such purposes as the 
     court shall determine, or to such organizations as the court 
     shall determine are organized exclusively for public 
     purposes.
       ``(b) Other Equipment.--At the Secretary's discretion, 
     additional equipment from other obsolete vessels of the Fleet 
     may be conveyed to assist the recipient with maintenance, 
     repairs, or modifications.
       ``(c) Additional Terms.--The Secretary may require any 
     additional terms the Secretary considers appropriate.
       ``(d) Delivery of Vessel.--If conveyance is made under this 
     section, the vessel shall be delivered to the recipient at a 
     time and place to be determined by the Secretary. The vessel 
     shall be conveyed in an `as is' condition.
       ``(e) Limitations.--If at any time prior to delivery of the 
     vessel to the recipient, the Secretary determines that a 
     different disposition of the vessel would better serve the 
     interests of the Government, the Secretary shall pursue the 
     more favorable disposition of the obsolete vessel and shall 
     not be liable for any damages that may result from an 
     intended recipient's reliance upon a proposed transfer.
       ``(f) Reversion.--The Secretary shall include in any 
     conveyance under this section terms under which all right, 
     title, and interest conveyed by the Secretary shall revert to 
     the Government if the Secretary determines the vessel has 
     been used other than as described in the business plan 
     required under subsection (a)(5).

     ``Sec. 57104. Acquisition of vessels from sale of obsolete 
       vessels

       ``(a) In General.--The Secretary of Transportation may 
     acquire suitable documented vessels with amounts in the 
     Vessel Operations Revolving Fund derived from the sale of 
     obsolete vessels in the National Defense Reserve Fleet.
       ``(b) Valuation.--The acquired and obsolete vessels shall 
     be valued at their scrap value in domestic or foreign markets 
     as of the date of the acquisition for or sale from the Fleet. 
     However, the value assigned to those vessels shall be 
     determined on the same basis, with consideration given to the 
     fair value of the cost of moving the vessel sold from the 
     Fleet to the place of scrapping.
       ``(c) Costs Incident to Lay-Up.--Costs incident to the lay-
     up of the vessel acquired under this section may be paid from 
     amounts in the Fund.
       ``(d) Transfers to Non-Citizens.--A vessel sold from the 
     Fleet under this section may be scrapped in an approved 
     foreign market without obtaining additional separate approval 
     from the Secretary to transfer the vessel to a person not a 
     citizen of the United States.

     ``Sec. 57105. Acquisition of vessels for essential services, 
       routes, or lines

       ``(a) In General.--The Secretary of Transportation may 
     acquire a vessel, by purchase or otherwise, if--
       ``(1) the Secretary considers the vessel necessary to 
     establish, maintain, improve, or serve as a replacement on an 
     essential service, route, or line in the foreign commerce of 
     the United States, as determined under section 50103 of this 
     title;
       ``(2) the vessel was constructed in the United States; and
       ``(3) the Secretary of the Navy has certified to the 
     Secretary of Transportation that the vessel is suitable for 
     economical and speedy conversion into a naval or military 
     auxiliary or otherwise suitable for use by the United States 
     Government in time of war or national emergency.
       ``(b) Price.--The price paid for the vessel shall be based 
     on a fair and reasonable valuation. However, the price may 
     not exceed by more than 5 percent the cost of the vessel to 
     the owner (excluding any construction-differential subsidy 
     and the cost of national defense features paid by the 
     Secretary of Transportation) plus the actual cost previously 
     expended for reconditioning, less depreciation based on a 25-
     year life for a dry-cargo or passenger vessel and a 20-year 
     life for a tanker or other liquid bulk carrier vessel.
       ``(c) Documentation.--A vessel acquired under this section 
     that is not documented under the laws of the United States at 
     the time of acquisition shall be so documented as soon as 
     practicable.

     ``Sec. 57106. Maintenance, improvement, and operation of 
       vessels

       ``(a) In General.--The Secretary of Transportation may 
     maintain, repair, recondition, remodel, and improve vessels 
     owned by the United States Government and in the possession 
     or under the control of the Secretary, to equip them 
     adequately for competition in the foreign trade of the United 
     States. The Secretary may operate such a vessel or charter 
     the vessel on terms and conditions the Secretary considers 
     appropriate to carry out the purposes of this subtitle.
       ``(b) Documentation and Restrictions on Operation.--A 
     vessel reconditioned, remodeled, or improved under subsection 
     (a) shall be documented under the laws of the United States 
     and remain so documented for at least 5 years after 
     completion of the reconditioning, remodeling, or improvement. 
     During that period, it shall be operated on voyages that are 
     not exclusively coastwise.

     ``Sec. 57107. Vessels for other agencies

       ``(a) In General.--The Secretary of Transportation may 
     construct, reconstruct, repair, equip, and outfit, by 
     contract or otherwise, vessels or parts thereof, for any 
     other department or agency of the United States Government to 
     the extent the other department or agency is authorized by 
     law to do so for its own account.
       ``(b) Effect on Contract Authorization.--An obligation 
     incurred or expenditure made by the Secretary under this 
     section does not affect any contract authorization of the 
     Secretary, but instead shall be charged against the existing 
     appropriation or contract authorization of the department or 
     agency.

     ``Sec. 57108. Consideration of ballast and equipment in 
       determining selling price

       ``The Maritime Administration may not sell a vessel until 
     its ballast and equipment have been inventoried and their 
     value considered in determining the selling price of the 
     vessel.

     ``Sec. 57109. Operation of vessels purchased, chartered, or 
       leased from Secretary of Transportation

       ``Unless otherwise authorized by the Secretary of 
     Transportation, a vessel purchased, chartered, or leased from 
     the Secretary may be operated only under a certificate of 
     documentation with a registry or coastwise endorsement. Such 
     a vessel, while employed solely as a merchant vessel, is 
     subject to the laws, regulations, and liabilities governing 
     merchant vessels, whether the United States Government has an 
     interest in

[[Page H7637]]

     the vessel as an owner or holds a mortgage, lien, or other 
     interest.

                 ``CHAPTER 573--VESSEL TRADE-IN PROGRAM

``Sec.
``57301.  Definitions.
``57302.  Authority to acquire vessels.
``57303.  Utility value and tonnage requirements.
``57304.  Eligible acquisition dates.
``57305.  Determination of trade-in allowance.
``57306.  Payment of trade-in allowance.
``57307.  Recognition of gain for tax purposes.
``57308.  Use of vessels at least 25 years old.

     ``Sec. 57301. Definitions

       ``In this chapter:
       ``(1) New vessel.--The term `new vessel' means a vessel--
       ``(A) constructed under this subtitle and acquired within 2 
     years after the date of completion; or
       ``(B) constructed in a domestic shipyard on private account 
     and not under this subtitle, and documented under the laws of 
     the United States.
       ``(2) Obsolete vessel.--The term `obsolete vessel' means a 
     vessel that--
       ``(A) is of at least 1,350 gross tons;
       ``(B) the Secretary of Transportation believes should, 
     because of its age, obsolescence, or other reasons, be 
     replaced in the public interest; and
       ``(C) has been owned by a citizen of the United States for 
     at least 3 years immediately before its acquisition under 
     this chapter.

     ``Sec. 57302. Authority to acquire vessels

       ``To promote the construction of new, safe, and efficient 
     vessels to carry the domestic and foreign waterborne commerce 
     of the United States, the Secretary of Transportation may 
     acquire an obsolete vessel in exchange for an allowance of 
     credit toward the cost of construction or purchase of a new 
     vessel as provided in this chapter.

     ``Sec. 57303. Utility value and tonnage requirements

       ``(a) Utility Value.--The utility value of a new vessel to 
     be acquired under this chapter for operation in the domestic 
     or foreign commerce of the United States may not be 
     substantially less than that of the obsolete vessel acquired 
     in exchange under this chapter.
       ``(b) Tonnage.--If the Secretary of Transportation finds 
     that the new vessel will have a utility value at least equal 
     to that of the obsolete vessel, the new vessel may be of 
     lesser gross tonnage than the obsolete vessel. However, the 
     gross tonnage of the new vessel must be at least one-third 
     the gross tonnage of the obsolete vessel.

     ``Sec. 57304. Eligible acquisition dates

       ``At the option of the owner, the acquisition of an 
     obsolete vessel under this chapter shall occur--
       ``(1) when the owner contracts for the construction or 
     purchase of a new vessel; or
       ``(2) within 5 days of the actual date of delivery of the 
     new vessel to the owner.

     ``Sec. 57305. Determination of trade-in allowance

       ``(a) In General.--The Secretary of Transportation shall 
     determine the trade-in allowance for an obsolete vessel at 
     the time of acquisition of the vessel. The allowance shall be 
     the fair value of the vessel. In determining the value, the 
     Secretary shall consider--
       ``(1) the scrap value of the obsolete vessel in American 
     and foreign markets;
       ``(2) the depreciated value based on a 20-year or 25-year 
     life, whichever applies to the obsolete vessel; and
       ``(3) the market value of the obsolete vessel for operation 
     in world commerce or in the domestic or foreign commerce of 
     the United States.
       ``(b) Use of Obsolete Vessels.--If acquisition of the 
     obsolete vessel occurs when the owner contracts for the 
     construction of the new vessel, and the owner uses the 
     obsolete vessel during the period of construction of the new 
     vessel, the Secretary shall reduce the trade-in allowance by 
     an amount representing the fair value of that use. The 
     Secretary shall establish the rate for use of the obsolete 
     vessel when the contract for construction of the new vessel 
     is made.

     ``Sec. 57306. Payment of trade-in allowance

       ``(a) Acquisition at Time of Contract.--If acquisition of 
     an obsolete vessel under this chapter occurs when the owner 
     contracts for the construction or purchase of the new vessel, 
     the Secretary of Transportation shall apply the trade-in 
     allowance to the purchase price of the new vessel rather than 
     paying it to the owner. If the new vessel is constructed 
     under this subtitle, the Secretary may apply the trade-in 
     allowance to the required cash payments on terms and 
     conditions the Secretary may prescribe. If the new vessel is 
     not constructed under this subtitle, the Secretary shall pay 
     the trade-in allowance to the builder of the vessel for the 
     account of the owner when the Secretary acquires the obsolete 
     vessel.
       ``(b) Acquisition at Time of Delivery.--If acquisition of 
     the obsolete vessel occurs when the new vessel is delivered 
     to the owner, the Secretary shall deposit the trade-in 
     allowance in the owner's capital construction fund.

     ``Sec. 57307. Recognition of gain for tax purposes

       ``The owner of an obsolete vessel does not recognize a gain 
     under the Federal income tax laws when the vessel is 
     transferred to the Secretary of Transportation in exchange 
     for a trade-in allowance under this chapter. The basis of the 
     new vessel acquired with the allowance is the same as the 
     basis of the obsolete vessel--
       ``(1) increased by the difference between the cost of the 
     new vessel and the trade-in allowance of the obsolete vessel; 
     and
       ``(2) decreased by the amount of loss recognized on the 
     transfer.

     ``Sec. 57308. Use of vessels at least 25 years old

       ``An obsolete vessel acquired under this chapter that is or 
     becomes at least 25 years old may not be used for commercial 
     operation. However, the vessel may be used--
       ``(1) during a period in which vessels may be requisitioned 
     under chapter 563 of this title; or
       ``(2) except as otherwise provided in this subtitle, on 
     trade routes serving only the foreign trade of the United 
     States.

       ``CHAPTER 575--CONSTRUCTION, CHARTER, AND SALE OF VESSELS

                        ``SUBCHAPTER I--GENERAL

``Sec.
``57501.  Completion of long-range program.
``57502.  Construction, reconditioning, and remodeling of vessels.
``57503.  Competitive bidding.
``57504.  Charter or sale of vessels acquired by Department of 
              Transportation.
``57505.  Employment of vessels on foreign trade routes.
``57506.  Minimum selling price of vessels.

                       ``SUBCHAPTER II--CHARTERS

``57511.  Demise charters.
``57512.  Competitive bidding.
``57513.  Minimum bid.
``57514.  Qualifications of bidders.
``57515.  Awarding of charters.
``57516.  Operating-differential subsidies.
``57517.  Recovery of excess profits.
``57518.  Performance bond.
``57519.  Insurance.
``57520.  Vessel maintenance.
``57521.  Termination of charter during national emergency.

                    ``SUBCHAPTER III--MISCELLANEOUS

``57531.  Construction and charter of vessels for unsuccessful routes.
``57532.  Operation of experimental vessels.

                        ``SUBCHAPTER I--GENERAL

     ``Sec. 57501. Completion of long-range program

       ``Whenever the Secretary of Transportation determines that 
     the objectives and policies declared in sections 50101 and 
     50102 of this title cannot be fully realized within a 
     reasonable time under titles V and VI of the Merchant Marine 
     Act, 1936, and the President approves the determination, the 
     Secretary, in accordance with this chapter, shall complete 
     the long-range program described in section 50102 of this 
     title.

     ``Sec. 57502. Construction, reconditioning, and remodeling of 
       vessels

       ``(a) In General.--The Secretary of Transportation may have 
     new vessels constructed, and have old vessels reconditioned 
     or remodeled, as the Secretary determines necessary to carry 
     out the objectives of this subtitle.
       ``(b) Place of Work.--Construction, reconditioning, and 
     remodeling of vessels under subsection (a) shall take place 
     in shipyards in the continental United States (including 
     Alaska and Hawaii). However, if satisfactory contracts cannot 
     be obtained from private shipbuilders, the Secretary may have 
     the work done in navy yards.
       ``(c) Applicability of Construction-Differential Subsidy 
     Provisions.--Contracts for the construction, reconstruction, 
     or reconditioning of a vessel by a private shipbuilder under 
     this chapter are subject to the provisions of title V of the 
     Merchant Marine Act, 1936, applicable to a contract with a 
     private shipbuilder for the construction of a vessel under 
     title V of that Act.

     ``Sec. 57503. Competitive bidding

       ``(a) Advertisement and Bidding.--The Secretary of 
     Transportation may make a contract with a private shipbuilder 
     for the construction of a new vessel, or for the 
     reconstruction or reconditioning of an existing vessel, only 
     after due advertisement and upon sealed competitive bids.
       ``(b) Opening of Bids.--Bids required under this section 
     shall be opened at the time and place stated in the 
     advertisement for bids. All interested persons, including 
     representatives of the press, shall be permitted to attend. 
     The results of the bidding shall be publicly announced.

     ``Sec. 57504. Charter or sale of vessels acquired by 
       Department of Transportation

       ``Vessels transferred to or otherwise acquired by the 
     Department of Transportation in any manner may be chartered 
     or sold by the Secretary of Transportation as provided in 
     this chapter.

     ``Sec. 57505. Employment of vessels on foreign trade routes

       ``(a) In General.--The Secretary of Transportation shall 
     arrange for the employment of the Department of 
     Transportation's vessels in steamship lines on such trade 
     routes, exclusively serving the foreign trade of the United 
     States, as the Secretary determines are essential for the 
     development and maintenance of the commerce of the United 
     States and the national defense. However, the Secretary shall 
     first determine that those routes are not being adequately 
     served by existing steamship lines privately owned and 
     operated by citizens of the United States and documented 
     under the laws of the United States.
       ``(b) Policy To Encourage Private Operation.--The Secretary 
     shall have a policy of encouraging private operation of each 
     essential steamship line now owned by the United States 
     Government by--
       ``(1) selling the line to a citizen of the United States; 
     or
       ``(2) demising the Secretary's vessels on bareboat charter 
     to citizens of the United States who agree to maintain the 
     line in the manner provided in this chapter.

     ``Sec. 57506. Minimum selling price of vessels

       ``(a) In General.--A vessel constructed under this subtitle 
     or the Merchant Marine Act, 1936, may not be sold by the 
     Secretary of Transportation for less than the price specified 
     in this section.

[[Page H7638]]

       ``(b) Operation in Foreign Trade.--If the vessel is to be 
     operated in foreign trade, the minimum price is the estimated 
     foreign construction cost (exclusive of national defense 
     features) determined as of the date the construction contract 
     is executed, less depreciation under subsection (d).
       ``(c) Operation in Domestic Trade.--If the vessel is to be 
     operated in domestic trade, the minimum price is the cost of 
     construction in the United States (exclusive of national 
     defense features), less depreciation under subsection (d).
       ``(d) Depreciation.--Depreciation under subsections (b) and 
     (c) shall be based on--
       ``(1) a 25-year life for dry-cargo and passenger vessels; 
     and
       ``(2) a 20-year life for tankers and other bulk liquid 
     carrier vessels.

                       ``SUBCHAPTER II--CHARTERS

     ``Sec. 57511. Demise charters

       ``A charter by the Secretary of Transportation under this 
     chapter shall demise the vessel to the charterer subject to 
     all usual conditions contained in a bareboat charter. The 
     charter shall be for a term the Secretary considers to be in 
     the best interest of the United States Government and the 
     merchant marine.

     ``Sec. 57512. Competitive bidding

       ``(a) In General.--The Secretary of Transportation may 
     charter a vessel of the Department of Transportation to a 
     private operator only on the basis of competitive sealed 
     bidding. The bids must be submitted in strict compliance with 
     the terms and conditions of a public advertisement soliciting 
     the bids.
       ``(b) Advertisement for Bids.--An advertisement for bids 
     shall state--
       ``(1) the number, type, and tonnage of the vessels being 
     offered for bareboat charter for operation as a steamship 
     line on a designated trade route;
       ``(2) the minimum number of sailings required;
       ``(3) the length of time of the charter;
       ``(4) the right of the Secretary to reject all bids; and
       ``(5) other information the Secretary considers necessary 
     for the information of prospective bidders.
       ``(c) Opening of Bids.--Bids required under this section 
     shall be opened at the time and place stated in the 
     advertisement for bids. All interested persons, including 
     representatives of the press, shall be permitted to attend. 
     The results of the bidding shall be publicly announced.

     ``Sec. 57513. Minimum bid

       ``The Secretary of Transportation shall reject any bid for 
     the charter under this subchapter of a vessel constructed 
     under this subtitle or the Merchant Marine Act, 1936, if the 
     charter hire offered is lower than the minimum charter hire 
     would be if the vessel were chartered under section 57531 of 
     this title.

     ``Sec. 57514. Qualifications of bidders

       ``(a) Considerations.--In deciding whether to award a 
     charter to a bidder, the Secretary of Transportation shall 
     consider--
       ``(1) the bidder's financial resources, credit standing, 
     and practical experience in operating vessels; and
       ``(2) other factors a prudent business person would 
     consider in entering into a transaction involving a large 
     capital investment.
       ``(b) Disqualifications.--The Secretary may not charter a 
     vessel to a person appearing to lack sufficient capital, 
     credit, and experience to operate the vessel successfully 
     over the period covered by the charter.

     ``Sec. 57515. Awarding of charters

       ``(a) In General.--The Secretary of Transportation shall 
     award the charter to the bidder proposing to pay the highest 
     monthly charter hire. However, the Secretary may reject the 
     highest or most advantageous or any other bid if the 
     Secretary considers the charter hire offered too low or 
     determines that the bidder lacks the qualifications required 
     by section 57514 of this title.
       ``(b) Highest Bid Rejected.--If the Secretary rejects the 
     highest bid, the Secretary may--
       ``(1) award the charter to the next highest bidder; or
       ``(2) reject all bids and either readvertise the line or 
     operate the line until conditions appear more favorable to 
     reoffer the line for private charter.
       ``(c) Reason for Rejection.--On request of a bidder, the 
     reason for rejection shall be stated in writing to the 
     bidder.

     ``Sec. 57516. Operating-differential subsidies

       ``If the Secretary of Transportation considers it 
     necessary, the Secretary may make a contract with a charterer 
     of a vessel owned by the Secretary for payment of an 
     operating-differential subsidy, on the same terms and 
     conditions, and subject to the same limitations and 
     restrictions, as otherwise provided with respect to payment 
     of operating-differential subsidies to operators of 
     privately-owned vessels.

     ``Sec. 57517. Recovery of excess profits

       ``(a) In General.--A charter under this chapter shall 
     provide that if, at the end of a calendar year subsequent to 
     the execution of the charter, the cumulative net voyage 
     profit (after payment of the charter hire reserved in the 
     charter and payment of the charterer's fair and reasonable 
     overhead expenses applicable to operation of the chartered 
     vessel) exceeds 10 percent a year of the charterer's capital 
     necessarily employed in the business of the chartered vessel, 
     the charterer shall pay to the Secretary of Transportation, 
     as additional charter hire, half the cumulative net voyage 
     profit in excess of 10 percent a year. However, any 
     cumulative net voyage profit accounted for under this 
     subsection is not to be included in the calculation of 
     cumulative net voyage profit in any subsequent year.
       ``(b) Terms To Be Defined and Used.--The Secretary shall 
     define the terms `net voyage profit', `fair and reasonable 
     overhead expenses', and `capital necessarily employed' for 
     this section. Each advertisement for bids and each charter 
     shall contain these definitions, stating the formula for 
     determining each of these three amounts.

     ``Sec. 57518. Performance bond

       ``The Secretary of Transportation shall require a charterer 
     of a vessel of the Secretary to deposit with the Secretary an 
     undertaking, with approved sureties, in such amount as the 
     Secretary may require as security for the faithful 
     performance of the terms of the charter, including indemnity 
     against liens on the chartered vessel.

     ``Sec. 57519. Insurance

       ``A charter under this chapter shall require the charterer 
     to carry, at the charterer's expense, insurance on the 
     chartered vessel covering all marine and port risks, 
     protection and indemnity risks, and all other hazards and 
     liabilities, adequate to cover damages claimed against and 
     losses sustained by the chartered vessel arising during the 
     term of the charter. The insurance shall be in such form, in 
     such amount, and with such companies as the Secretary of 
     Transportation may require. In accordance with law, any of 
     the insurance risks may be underwritten by the Secretary.

     ``Sec. 57520. Vessel maintenance

       ``(a) In General.--A charter under this chapter shall 
     require the charterer, at the charterer's expense, to--
       ``(1) keep the chartered vessel in good repair and 
     efficient operating condition; and
       ``(2) make any repairs required by the Secretary of 
     Transportation.
       ``(b) Inspection.--The charter shall provide that the 
     Secretary has the right to inspect the vessel at any time to 
     ascertain its condition.

     ``Sec. 57521. Termination of charter during national 
       emergency

       ``A charter under this chapter shall provide that during a 
     national emergency proclaimed by the President or a period 
     for which the President has proclaimed that the security of 
     the national defense makes it advisable, the Secretary of 
     Transportation may terminate the charter without cost to the 
     United States Government on such notice to the charterer as 
     the President determines.

                    ``SUBCHAPTER III--MISCELLANEOUS

     ``Sec. 57531. Construction and charter of vessels for 
       unsuccessful routes

       ``(a) In General.--If the Secretary of Transportation finds 
     that a trade route determined to be essential under section 
     50103 of this title cannot be successfully developed and 
     maintained and the Secretary's replacement program cannot be 
     achieved under private operation of the trade route by a 
     citizen of the United States with vessels documented under 
     the laws of the United States, without further aid by the 
     United States Government in addition to the financial aid 
     authorized under titles V and VI of the Merchant Marine Act, 
     1936, the Secretary, without advertisement or competition, 
     may--
       ``(1) have constructed, in private shipyards or in navy 
     yards, vessels of the types necessary for the trade route; 
     and
       ``(2) demise those new vessels or bareboat charter them to 
     the American-flag operator established on the trade route.
       ``(b) Amount of Charter Hire.--
       ``(1) In general.--The annual charter hire under subsection 
     (a) shall be at least 4 percent of the price (referred to in 
     this section as the `foreign cost') at which the vessel would 
     be sold if constructed under title V of the Merchant Marine 
     Act, 1936, plus--
       ``(A) a percentage of the depreciated foreign cost computed 
     annually determined by the Secretary of the Treasury, taking 
     into consideration the current average market yield on 
     outstanding marketable obligations of the Government with 
     remaining periods to maturity comparable to the term of the 
     charter, adjusted to the nearest one-eighth percent; and
       ``(B) an allowance adequate in the judgment of the 
     Secretary of Transportation to cover administrative costs.
       ``(2) Depreciation.--Depreciation under paragraph (1)(A) 
     shall be based on--
       ``(A) a 25-year life for dry-cargo and passenger vessels; 
     and
       ``(B) a 20-year life for tankers and other bulk liquid 
     carrier vessels.
       ``(c) Option To Purchase.--The charter may contain an 
     option to the charterer to purchase the vessels from the 
     Secretary of Transportation within 5 years after delivery 
     under the charter, on the same terms and conditions as 
     provided in title V of the Merchant Marine Act, 1936, for the 
     purchase of new vessels from the Secretary. However--
       ``(1) the purchase price shall be the foreign cost less 
     depreciation to the date of purchase based on the useful life 
     specified in subsection (b)(2);
       ``(2) the required cash payment payable at the time of the 
     purchase shall be 25 percent of the purchase price;
       ``(3) the charter may provide that any part of the charter 
     hire paid in excess of the minimum charter hire provided for 
     in this section may be credited against the cash payment 
     payable at the time of the purchase;
       ``(4) the balance of the purchase price shall be paid 
     within the remaining years of useful life (as specified in 
     subsection (b)(2)) after the date of delivery of the vessel 
     under the charter and in approximately equal annual 
     installments, except that the first installment, which shall 
     be payable on the next ensuing anniversary date of the 
     delivery under the charter, shall be a proportionate part of 
     the annual installment; and
       ``(5) interest shall be payable on the unpaid balances from 
     the date of purchase, at a rate not less than--

[[Page H7639]]

       ``(A) a rate determined by the Secretary of the Treasury, 
     taking into consideration the current average market yield on 
     outstanding marketable obligations of the Government with 
     remaining periods to maturity comparable to the average 
     maturities of the loans, adjusted to the nearest one-eighth 
     percent; plus
       ``(B) an allowance adequate in the judgment of the 
     Secretary of Transportation to cover administrative costs.
       ``(d) Operation of Vessel.--
       ``(1) Permissible voyages.--The charter shall provide for 
     operation of the vessel exclusively--
       ``(A) in foreign trade;
       ``(B) on a round-the-world voyage;
       ``(C) on a round voyage from the west coast of the United 
     States to a European port that includes an intercoastal port 
     of the United States;
       ``(D) on a round voyage from the Atlantic coast of the 
     United States to the Orient that includes an intercoastal 
     port of the United States; or
       ``(E) on a voyage in foreign trade on which the vessel may 
     stop at Hawaii or an island territory or possession of the 
     United States.
       ``(2) Domestic trade.--The charter shall provide if the 
     vessel is operated in domestic trade on any of the services 
     specified in paragraph (1), the charterer will pay annually 
     to the Secretary of Transportation that proportion of \1/25\ 
     of the difference between the domestic and foreign cost of 
     the vessel as the gross revenue derived from the domestic 
     trade bears to the gross revenue derived from the entire 
     voyages completed during the preceding year.

     ``Sec. 57532. Operation of experimental vessels

       ``(a) Definition.--In this section, the term `experimental 
     vessel' means a vessel owned by the United States Government 
     (including a vessel in the National Defense Reserve Fleet) 
     that has been constructed, reconditioned, or remodeled for 
     experimental or testing purposes.
       ``(b) Authority To Operate.--The Secretary of 
     Transportation, for the purpose of practical development, 
     trial, and testing, may operate an experimental vessel under 
     a bareboat charter or general agency agreement in the foreign 
     or domestic trade of the United States or for use for the 
     account of a department or agency of the Government, without 
     regard to other provisions of this subtitle and other laws 
     related to chartering and general agency operations. Not more 
     than 10 vessels may be operated and tested under this section 
     in any one year.
       ``(c) Terms of Operation.--Operation of a vessel under this 
     section shall be on terms the Secretary considers appropriate 
     to carry out the purposes of this subtitle. A bareboat 
     charter under this section shall be at reasonable rates and 
     include restrictions the Secretary considers appropriate to 
     protect the public interest, including provisions for 
     recapture of profits under section 57517 of this title. A 
     charter or general agency agreement under this section shall 
     be reviewed annually to determine whether conditions exist to 
     justify continuance of the charter or agreement.
       ``(d) Rights of Seamen.--A seaman engaged in vessel 
     operations of the Secretary under this section and employed 
     through a general agent in connection with a charter or 
     agreement under this section is entitled to all the rights 
     and remedies provided in sections 1(a) and (c), 3(c), and 4 
     of the Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 
     1293(c), 1294).

                  ``Part G--Restrictions and Penalties

               ``CHAPTER 581--RESTRICTIONS AND PENALTIES

``Sec.
``58101.  Operating in domestic intercoastal or coastwise service.
``58102.  Default on payment or maintenance of reserves.
``58103.  Employing another person as managing or operating agent.
``58104.  Willful violation constitutes breach of contract or charter.
``58105.  Preferences for cargo in which charterer has interest.
``58106.  Concerted discriminatory activities.
``58107.  Discrimination at ports by water common carriers.
``58108.  Charges for transportation subject to subtitle IV of title 
              49.
``58109.  Penalties.

     ``Sec. 58101. Operating in domestic intercoastal or coastwise 
       service

       ``(a) Prohibition.--A subsidy may not be awarded or paid to 
     a contractor under the operating-differential subsidy 
     program, and a vessel may not be chartered to a person under 
     chapter 575 of this title, if the contractor or charterer, or 
     a holding company, subsidiary, affiliate, or associate of the 
     contractor or charterer, or an officer, director, agent, or 
     executive thereof, directly or indirectly--
       ``(1) owns, charters, or operates a vessel engaged in the 
     domestic intercoastal or coastwise service; or
       ``(2) owns a pecuniary interest in a person that owns, 
     charters, or operates a vessel in the domestic intercoastal 
     or coastwise service.
       ``(b) Waiver.--A person may apply to the Secretary of 
     Transportation for a waiver of subsection (a). Before 
     deciding on the waiver, the Secretary shall give the 
     applicant and other interested persons an opportunity for a 
     hearing. The Secretary may not grant the waiver if the 
     Secretary finds it would--
       ``(1) result in unfair competition to a person operating 
     exclusively in the domestic intercoastal or coastwise 
     service; or
       ``(2) be prejudicial to the objectives and policy of this 
     subtitle.
       ``(c) Continuous Operation Since 1935.--The Secretary shall 
     grant an application under subsection (b) without requiring 
     further proof that the public interest and convenience will 
     be served and without further proceedings as to the 
     competition in the route or trade, if the contractor or other 
     person, or a predecessor in interest, was in bona-fide 
     operation as a common carrier by water in the domestic 
     intercoastal or coastwise trade in 1935 over the route or in 
     the trade for which the application is made and has so 
     operated since that time or, if engaged in furnishing 
     seasonal service only, was in bona-fide operation in 1935 
     during the season ordinarily covered by its operation, except 
     in either event as to interruptions of service over which the 
     applicant or its predecessor in interest had no control.
       ``(d) Diversion Into Intercoastal or Coastwise 
     Operations.--If an application under subsection (b) is 
     approved, a person referred to in this section may not 
     divert, directly or indirectly, money, property, or any other 
     thing of value, used in a foreign-trade operation for which a 
     subsidy is paid by the United States Government, into 
     intercoastal or coastwise operations.

     ``Sec. 58102. Default on payment or maintenance of reserves

       ``The Secretary of Transportation may supervise the number 
     and compensation of all officers and employees of a 
     contractor under the operating-differential subsidy program 
     or a charterer under chapter 575 of this title, receiving an 
     operating-differential subsidy, if the contractor or 
     charterer--
       ``(1) is in default on a mortgage, note, purchase contract, 
     or other obligation to the Secretary; or
       ``(2) has not maintained, in a manner satisfactory to the 
     Secretary, all of the reserves provided for in this subtitle.

     ``Sec. 58103. Employing another person as managing or 
       operating agent

       ``(a) Prohibition.--Except with the written consent of the 
     Secretary of Transportation, a contractor holding a contract 
     under the operating-differential subsidy program or under 
     chapter 575 of this title may not--
       ``(1) employ another person as the managing or operating 
     agent of the operator; or
       ``(2) charter a vessel, on which an operating-differential 
     subsidy is to be paid, for operation by another person.
       ``(b) Applicability of Provisions to Charterer.--If a 
     charter prohibited by this section is made, the person 
     operating the chartered vessel is subject to all the 
     provisions of this subtitle and the operating-differential 
     subsidy program, including limitations of profits and 
     salaries.

     ``Sec. 58104. Willful violation constitutes breach of 
       contract or charter

       ``A willful violation of any provision of sections 58101-
     58103 of this title constitutes a breach of the contract or 
     charter. On determining that a violation has occurred, the 
     Secretary of Transportation may declare the contract or 
     charter rescinded.

     ``Sec. 58105. Preferences for cargo in which charterer has 
       interest

       ``A contractor receiving an operating-differential subsidy, 
     or a charterer under chapter 575 of this title, may not 
     unjustly discriminate in any manner so as to give preference, 
     directly or indirectly, to cargo in which the contractor or 
     charterer has a direct or indirect ownership, purchase, or 
     vending interest.

     ``Sec. 58106. Concerted discriminatory activities

       ``(a) Prohibition.--A contractor receiving an operating-
     differential subsidy, or a charterer under chapter 575 of 
     this title, may not continue as a party to or conform to an 
     agreement with another carrier by water, or engage in a 
     practice in concert with another carrier by water, that is 
     unjustly discriminatory or unfair to any other citizen of the 
     United States operating a common carrier by water employing 
     only vessels documented under the laws of the United States 
     on an established trade route from and to a United States 
     port.
       ``(b) Government Payment Prohibited.--No payment or subsidy 
     of any kind may be paid, directly or indirectly, out of funds 
     of the United States Government to a contractor or charterer 
     that has violated subsection (a).
       ``(c) Civil Action.--A person whose business or property is 
     injured by a violation of subsection (a) may bring a civil 
     action in the district court of the United States for the 
     district in which the defendant resides, is found, or has an 
     agent. If the person prevails, the person shall be awarded--
       ``(1) 3 times the damages; and
       ``(2) costs, including reasonable attorney fees.

     ``Sec. 58107. Discrimination at ports by water common 
       carriers

       ``(a) Prohibition.--A common carrier by water may not, 
     directly or indirectly, through an agreement, conference, 
     association, understanding, or otherwise, prevent or attempt 
     to prevent any other common carrier by water from serving any 
     port described in subsection (b) at the same rates the first 
     carrier charges at the nearest port already regularly served 
     by it.
       ``(b) Ports.--A port referred to in subsection (a) is one 
     that is--
       ``(1) designed for the accommodation of ocean-going 
     vessels;
       ``(2) located on an improvement project authorized by law 
     or by a Federal agency; and
       ``(3) located within the continental limits of the United 
     States.
       ``(c) Other Authority Not Limited.--This section does not 
     limit the authority otherwise vested in the Secretary of 
     Transportation and the Federal Maritime Commission.

     ``Sec. 58108. Charges for transportation subject to subtitle 
       IV of title 49

       ``(a) Prohibition.--A carrier may not charge, collect, or 
     receive for transportation subject to subtitle IV of title 49 
     of persons or property, under any joint rate, fare, or 
     charge, or under any export, import, or other proportional 
     rate,

[[Page H7640]]

     fare, or charge, that is based in whole or in part on the 
     fact that the persons or property affected are to be 
     transported to, or have been transported from, a port in a 
     territory or possession of the United States or in a foreign 
     country, by a carrier by water in foreign commerce, any lower 
     rate, fare, or charge than the carrier charges, collects, or 
     receives for the transportation of persons or similar 
     property for the same distance, in the same direction, and 
     over the same route, in commerce wholly within the United 
     States, unless the vessel used for the transportation is or 
     was at the time of the transportation documented under the 
     laws of the United States.
       ``(b) Suspension of Prohibition.--Whenever the Secretary of 
     Transportation believes that adequate shipping facilities to 
     or from any port in a territory or possession of the United 
     States or a foreign country are not being provided by vessels 
     documented under the laws of the United States, the Secretary 
     shall certify this fact to the Surface Transportation Board. 
     On receiving the certification, the Board may by order 
     suspend the operation of subsection (a) with respect to the 
     rates, fares, and charges for the transportation by rail of 
     persons and property transported from or to be transported to 
     those ports, for such time and under such terms and 
     conditions as the Secretary may specify in the order or in 
     any supplemental order.
       ``(c) Termination of Suspension.--Whenever the Secretary 
     believes that adequate shipping facilities are being provided 
     to those ports by vessels documented under the laws of the 
     United States, and certifies that fact to the Board, the 
     Board may order the termination of the suspension.

     ``Sec. 58109. Penalties

       ``(a) Individuals.--An individual convicted of violating 
     section 58101(d), 58103, or 58105 of this title shall be 
     fined under title 18, imprisoned for at least one year but 
     not more than 5 years, or both.
       ``(b) Organizations.--An organization convicted of 
     committing an act prohibited by this subtitle shall be fined 
     under title 18.
       ``(c) Ineligibility To Receive Benefits.--An individual or 
     organization convicted of violating a section referred to in 
     subsection (a) is ineligible, at the discretion of the 
     Secretary of Transportation, to receive any benefit under the 
     construction-differential subsidy or operating-differential 
     subsidy programs, or a charter under chapter 575 of this 
     title, for 5 years after the conviction.''.

     SEC. 8. SUBTITLE VI OF TITLE 46.

       (a) Redesignation.--Title 46, United States Code, is 
     amended by redesignating subtitle VI as subtitle VII.
       (b) New Subtitle.--Title 46, United States Code, is amended 
     by inserting after subtitle V the following:

          ``Subtitle VI--Clearance, Tonnage Taxes, and Duties

``Chapter                                                      Sec.

``601.  Arrival and Departure Requirements........................60101
``603.  Tonnage Taxes and Light Money.............................60301
``605.  Discriminating Duties and Reciprocal Privileges...........60501

           ``CHAPTER 601--ARRIVAL AND DEPARTURE REQUIREMENTS

``Sec.
``60101.  Boarding arriving vessels before inspection.
``60102.  Production of certificate on entry.
``60103.  Oath of ownership on entry.
``60104.  Depositing certificates of documentation with consular 
              officers.
``60105.  Clearance of vessels.
``60106.  State inspection laws.
``60107.  Payment of fees on departing vessel.
``60108.  Duty to transport tendered cargo.
``60109.  Duty to transport money and securities of the United States 
              Government.

     ``Sec. 60101. Boarding arriving vessels before inspection

       ``(a) Regulations.--The Secretary of Homeland Security 
     shall prescribe and enforce regulations on the boarding of a 
     vessel arriving at a port of the United States before the 
     vessel has been inspected and secured.
       ``(b) Criminal Penalty.--A person violating a regulation 
     prescribed under this section shall be fined under title 18, 
     imprisoned for not more than 6 months, or both.
       ``(c) Relationship to Other law.--This section shall be 
     construed as supplementary to section 2279 of title 18.

     ``Sec. 60102. Production of certificate on entry

       ``On entry of a vessel documented under chapter 121 of this 
     title, the master or other individual in charge of the vessel 
     shall produce the certificate of documentation to the customs 
     officer at the place where the vessel is entered. If the 
     certificate is not produced, the vessel is not entitled to 
     the privileges of a documented vessel.

     ``Sec. 60103. Oath of ownership on entry

       ``(a) Required Statement.--On entry of a vessel of the 
     United States from a foreign port, the individual designated 
     under subsection (b) shall state under oath that--
       ``(1) the vessel's certificate of documentation contains 
     the names of all the owners of the vessel; or
       ``(2) part of the ownership has been transferred since the 
     certificate was issued and, to the best of the individual's 
     knowledge and belief, the vessel is still owned only by 
     citizens of the United States.
       ``(b) Person To Make Statement.--The statement under 
     subsection (a) shall be made by--
       ``(1) an owner if one resides at the port of entry; or
       ``(2) the master if an owner does not reside at the port of 
     entry.
       ``(c) Consequence of Not Making Statement.--If the 
     appropriate individual does not make the statement required 
     by this section, the vessel is not entitled to the privileges 
     of a vessel of the United States.

     ``Sec. 60104. Depositing certificates of documentation with 
       consular officers

       ``(a) Requirement of Master.--When a vessel owned by 
     citizens of the United States, on a voyage from a port in the 
     United States, arrives at a foreign port, the master of the 
     vessel shall deposit the vessel's certificate of 
     documentation with a consular officer at the foreign port if 
     there is a consular officer at that port.
       ``(b) Return of Certificate.--When the master produces a 
     clearance from the appropriate officer of the foreign port, 
     the consular officer shall return the certificate of 
     documentation to the master if the master has complied with 
     the provisions of law related to the discharge of seamen in a 
     foreign country and the payment of fees of consular officers.
       ``(c) Civil Penalty and Collection.--The master of a vessel 
     failing to deposit the certificate of documentation as 
     required by subsection (a) is liable to the United States 
     Government for a civil penalty of $500. The consular officer 
     shall bring an action to recover the penalty in any court of 
     competent jurisdiction. The action shall be brought in the 
     name of the consular officer for the benefit of the 
     Government.

     ``Sec. 60105. Clearance of vessels

       ``(a) Vessels of the United States.--Except as otherwise 
     provided by law, a vessel of the United States shall obtain 
     clearance from the Secretary of Homeland Security before 
     proceeding from a port or place in the United States--
       ``(1) for a foreign port or place;
       ``(2) for another port or place in the United States if the 
     vessel has on board foreign merchandise for which entry has 
     not been made; or
       ``(3) outside the territorial sea to visit a hovering 
     vessel or to receive merchandise while outside the 
     territorial sea.
       ``(b) Other Vessels.--Except as otherwise provided by law, 
     a vessel that is not a vessel of the United States shall 
     obtain clearance from the Secretary before proceeding from a 
     port or place in the United States--
       ``(1) for a foreign port or place;
       ``(2) for another port or place in the United States; or
       ``(3) outside the territorial sea to visit a hovering 
     vessel or to receive or deliver merchandise while outside the 
     territorial sea.
       ``(c) Regulations.--The Secretary may by regulation--
       ``(1) prescribe the manner in which clearance under this 
     section is to be obtained, including the documents, data, or 
     information which shall be submitted or transmitted, pursuant 
     to an authorized data interchange system, to obtain the 
     clearance;
       ``(2) permit clearance to be obtained before all 
     requirements for clearance are complied with, but only if the 
     owner or operator of the vessel files a bond in an amount set 
     by the Secretary conditioned on the compliance by the owner 
     or operator with all specified requirements for clearance 
     within a time period (not exceeding 4 business days) 
     established by the Secretary; and
       ``(3) permit clearance to be obtained at a place other than 
     a designated port of entry, under conditions the Secretary 
     may prescribe.

     ``Sec. 60106. State inspection laws

       ``When State law requires a certificate of inspection for 
     goods carried on a vessel, a vessel transporting the goods 
     may not be cleared until the certificate is produced.

     ``Sec. 60107. Payment of fees on departing vessel

       ``A departing vessel may be cleared only when all legal 
     fees that have accrued on the vessel are paid and proof of 
     payment is presented to the individual granting the 
     clearance.

     ``Sec. 60108. Duty to transport tendered cargo

       ``Clearance may be refused to a vessel or vehicle 
     transporting cargo destined for a domestic or foreign port 
     when the owner, master, or other individual in charge refuses 
     to accept cargo tendered in good condition, with proper 
     charges, for the same or an intermediate port by a citizen of 
     the United States. This section does not apply if the vessel 
     or vehicle is already fully loaded (giving appropriate 
     consideration to its proper loading) or is not adaptable to 
     transport the tendered cargo.

     ``Sec. 60109. Duty to transport money and securities of the 
       United States Government

       ``Before being given clearance, a vessel owned by a citizen 
     of the United States and bound on a voyage from a port in the 
     United States to another port in the United States or in a 
     foreign country, or on a voyage from a port in a foreign 
     country to a port in the United States, shall receive on 
     board any bullion, coin, notes, bonds, or other securities of 
     the United States Government that an agency, consular 
     officer, or other agent of the Government offers. The vessel 
     shall transport the items securely and deliver them promptly 
     to the proper authorities or consignees on arriving at the 
     port of destination. Compensation shall be paid for services 
     provided under this section that is equal to compensation 
     paid to other carriers in the ordinary transaction of 
     business.

              ``CHAPTER 603--TONNAGE TAXES AND LIGHT MONEY

``Sec.
``60301.  Regular tonnage taxes.
``60302.  Special tonnage taxes.
``60303.  Light money.
``60304.  Presidential suspension of tonnage taxes and light money.
``60305.  Vessels in distress.
``60306.  Vessels not engaged in trade.
``60307.  Vessels engaged in coastwise trade or the fisheries.
``60308.  Vessels engaged in Great Lakes trade.
``60309.  Passenger vessels making trips between ports of the United 
              States and foreign ports.

[[Page H7641]]

``60310.  Vessels making daily trips on interior waters.
``60311.  Hospital vessels in time of war.
``60312.  Rights under treaties preserved.

     ``Sec. 60301. Regular tonnage taxes

       ``(a) Lower Rate.--A tax is imposed at the rate of 2 cents 
     per ton (but not more than a total of 10 cents per ton per 
     year) at each entry in a port of the United States of--
       ``(1) a vessel entering from a foreign port or place in 
     North America, Central America, the West Indies Islands, the 
     Bahama Islands, the Bermuda Islands, or the coast of South 
     America bordering the Caribbean Sea; or
       ``(2) a vessel returning to the same port or place in the 
     United States from which it departed, and not entering the 
     United States from another port or place, except--
       ``(A) a vessel of the United States;
       ``(B) a recreational vessel (as defined in section 2101 of 
     this title); or
       ``(C) a barge.
       ``(b) Higher Rate.--A tax is imposed at the rate of 6 cents 
     per ton (but not more than a total of 30 cents per ton per 
     year) on a vessel at each entry in a port of the United 
     States from a foreign port or place not named in subsection 
     (a)(1).
       ``(c) Exception for Vessels Entering Other Than by Sea.--
     Subsection (a) does not apply to a vessel entering other than 
     by sea from a foreign port or place at which tonnage, 
     lighthouse, or other equivalent taxes are not imposed on 
     vessels of the United States.

     ``Sec. 60302. Special tonnage taxes

       ``(a) Entry From Foreign Port or Place.--Regardless of 
     whether a tax is imposed under section 60301 of this title, a 
     tax is imposed on a vessel at each entry in a port of the 
     United States from a foreign port or place at the following 
     rates:
       ``(1) 30 cents per ton on a vessel built in the United 
     States but owned in any part by a subject of a foreign 
     country.
       ``(2) 50 cents per ton on other vessels not of the United 
     States.
       ``(3) 50 cents per ton on a vessel of the United States 
     having an officer who is not a citizen of the United States.
       ``(4) $2 per ton on a foreign vessel entering from a 
     foreign port or place at which vessels of the United States 
     are not ordinarily allowed to enter and trade.
       ``(b) Vessels Not of the United States Transporting 
     Property Between Districts.--Regardless of whether a tax is 
     imposed under section 60301 of this title, a tax of 50 cents 
     per ton is imposed on a vessel not of the United States at 
     each entry in one customs district from another district when 
     transporting goods loaded in one district to be delivered in 
     another district.
       ``(c) Exception for Vessels Becoming Documented.--The tax 
     of 50 cents per ton under this section does not apply to a 
     vessel that--
       ``(1) is owned only by citizens of the United States; and
       ``(2) after entering a port of the United States, becomes 
     documented as a vessel of the United States before leaving 
     that port.

     ``Sec. 60303. Light money

       ``(a) Imposition of Tax.--A tax of 50 cents per ton, to be 
     called `light money', is imposed on a vessel not of the 
     United States at each entry in a port of the United States. 
     This tax shall be imposed and collected under the same 
     regulations that apply to tonnage taxes.
       ``(b) Exception for Vessels Owned by Citizens.--
       ``(1) In general.--Subsection (a) does not apply to a 
     vessel owned only by citizens of the United States if--
       ``(A) the vessel is carrying a regular document issued by a 
     customhouse of the United States proving the vessel to be 
     owned only by citizens of the United States; and
       ``(B) on entry of the vessel from a foreign port, the 
     individual designated under paragraph (2) states under oath 
     that--
       ``(i) the document contains the names of all the owners of 
     the vessel; or
       ``(ii) part of the ownership has been transferred since the 
     document was issued and, to the best of that individual's 
     knowledge and belief, the vessel is still owned only by 
     citizens of the United States.
       ``(2) Person to make statement.--The statement under 
     paragraph (1)(B) shall be made by--
       ``(A) an owner if one resides at the port of entry; or
       ``(B) the master if an owner does not reside at the port of 
     entry.
       ``(c) Exception for Vessels Becoming Documented.--
     Subsection (a) section does not apply to a vessel that--
       ``(1) is owned only by citizens of the United States; and
       ``(2) after entering a port of the United States, becomes 
     documented as a vessel of the United States before leaving 
     that port.

     ``Sec. 60304. Presidential suspension of tonnage taxes and 
       light money

       ``If the President is satisfied that the government of a 
     foreign country does not impose discriminating or 
     countervailing duties to the disadvantage of the United 
     States, the President shall suspend the imposition of special 
     tonnage taxes and light money under sections 60302 and 60303 
     of this title on vessels of that country.

     ``Sec. 60305. Vessels in distress

       ``A vessel is exempt from tonnage taxes and light money 
     when it enters because it is in distress.

     ``Sec. 60306. Vessels not engaged in trade

       ``A vessel is exempt from tonnage taxes and light money 
     when not engaged in trade.

     ``Sec. 60307. Vessels engaged in coastwise trade or the 
       fisheries

       ``A vessel with a registry endorsement or a coastwise 
     endorsement, trading from one port in the United States to 
     another port in the United States or employed in the bank, 
     whale, or other fisheries, is exempt from tonnage taxes and 
     light money.

     ``Sec. 60308. Vessels engaged in Great Lakes trade

       ``A documented vessel with a registry endorsement, engaged 
     in foreign trade on the Great Lakes or their tributary or 
     connecting waters in trade with Canada, does not become 
     subject to tonnage taxes or light money because of that 
     trade.

     ``Sec. 60309. Passenger vessels making trips between ports of 
       the United States and foreign ports

       ``A passenger vessel making at least 3 trips per week 
     between a port of the United States and a foreign port is 
     exempt from tonnage taxes and light money.

     ``Sec. 60310. Vessels making daily trips on interior waters

       ``A vessel making regular daily trips between a port of the 
     United States and a port of Canada only on interior waters 
     not navigable to the ocean is exempt from tonnage taxes and 
     light money, except on its first clearing each year.

     ``Sec. 60311. Hospital vessels in time of war

       ``In time of war, a hospital vessel is exempt from tonnage 
     taxes, light money, and pilotage charges in the ports of the 
     United States if the vessel is one for which the conditions 
     of the international convention for the exemption of hospital 
     ships from taxation in time of war, concluded at The Hague on 
     December 21, 1904, are satisfied. The President by 
     proclamation shall name the vessels for which the conditions 
     are satisfied and state when the exemption begins and ends.

     ``Sec. 60312. Rights under treaties preserved

       ``This chapter and chapter 605 of this title do not affect 
     a right or privilege of a foreign country relating to tonnage 
     taxes or other duties on vessels under a law or treaty of the 
     United States.

     ``CHAPTER 605--DISCRIMINATING DUTIES AND RECIPROCAL PRIVILEGES

``Sec.
``60501.  Vessels allowed to import.
``60502.  Discriminating duty on goods imported in foreign vessels or 
              from contiguous countries.
``60503.  Reciprocal suspension of discriminating duties.
``60504.  Reciprocal privileges for recreational vessels.
``60505.  Retaliatory suspension of commercial privileges.
``60506.  Retaliation against British dominions of North America.
``60507.  Suspension of free passage through Saint Marys Falls Canal.

     ``Sec. 60501. Vessels allowed to import

       ``(a) In General.--Except as otherwise provided by treaty, 
     goods may be imported into the United States from a foreign 
     port or place only in--
       ``(1) a vessel of the United States; or
       ``(2) a foreign vessel owned only by citizens or subjects 
     of the country--
       ``(A) in which the goods are grown, produced, or 
     manufactured; or
       ``(B) from which the goods can only be, or most usually 
     are, first shipped for transportation.
       ``(b) Exception for Vessels of Countries Not Maintaining 
     Similar Restrictions.--Subsection (a) does not apply to a 
     vessel of a foreign country that does not maintain a similar 
     restriction against United States documented vessels.
       ``(c) Exception for Vessels Becoming Documented.--
     Subsection (a) does not apply to a vessel that--
       ``(1) is owned only by citizens of the United States; and
       ``(2) after entering a port of the United States, becomes 
     documented as a vessel of the United States before leaving 
     that port.
       ``(d) Seizure and Forfeiture.--If goods are imported in 
     violation of this section, the goods and the vessel in which 
     they are imported, along with its equipment and other cargo, 
     may be seized by and forfeited to the United States 
     Government.

     ``Sec. 60502. Discriminating duty on goods imported in 
       foreign vessels or from contiguous countries

       ``(a) Imposition of Duty.--A discriminating duty of 10 
     percent ad valorem (in addition to other duties imposed by 
     law) is imposed on goods--
       ``(1) imported in a vessel not of the United States unless 
     the vessel--
       ``(A) is entitled by law or treaty to enter the ports of 
     the United States on payment of the same duties as are 
     payable on goods imported in a vessel of the United States; 
     or
       ``(B)(i) is owned only by citizens of the United States; 
     and
       ``(ii) after entering a port of the United States, becomes 
     documented as a vessel of the United States before leaving 
     that port; or
       ``(2) produced or manufactured in a foreign country not 
     contiguous to the United States and imported from a country 
     contiguous to the United States, unless imported in the usual 
     course of strictly retail trade.
       ``(b) Seizure and Forfeiture.--If goods are imported 
     without payment of the duty required by this section, the 
     goods and the vessel in which they are imported may be seized 
     by, and forfeited to, the United States Government.

     ``Sec. 60503. Reciprocal suspension of discriminating duties

       ``(a) General Authority.--On receiving satisfactory proof 
     from the government of a foreign country that it has 
     suspended, in any part, the imposition of discriminating 
     duties for any class

[[Page H7642]]

     of vessels owned by citizens of the United States or goods 
     imported in those vessels, the President may proclaim a 
     reciprocal suspension of discriminating duties for the same 
     class of vessels owned by citizens of that country or goods 
     imported in those vessels.
       ``(b) Effective and Expiration Dates.--A suspension under 
     this section takes effect retroactively from the date the 
     President received the proof from the foreign government, and 
     expires when that government stops granting the reciprocal 
     suspension.

     ``Sec. 60504. Reciprocal privileges for recreational vessels

       ``When the President is satisfied that yachts owned by 
     residents of the United States and used only for pleasure are 
     allowed to arrive at, depart from, and cruise in the waters 
     of a foreign port without entering, clearing, or paying any 
     duties or fees (including cruising license fees), the 
     Secretary of Homeland Security may allow yachts from that 
     foreign port used only for pleasure to arrive at and depart 
     from the ports of the United States and to cruise in the 
     waters of the United States without paying any duties or 
     fees. However, the Secretary may require foreign yachts to 
     obtain a license to cruise in the waters of the United 
     States. The license shall be in the form prescribed by the 
     Secretary and contain limitations about length of time, 
     direction, place of cruising and action, and other matters 
     the Secretary considers appropriate. The license shall be 
     issued without cost to the yacht.

     ``Sec. 60505. Retaliatory suspension of commercial privileges

       ``(a) General Authority.--The President may proclaim a 
     suspension of commercial privileges to vessels of a foreign 
     country when--
       ``(1) vessels of that country have been given the same 
     commercial privileges in the ports and waters of the United 
     States given to vessels of the United States (except the 
     privilege of engaging in coastwise commerce); and
       ``(2) vessels of the United States are denied commercial 
     privileges in the ports or waters of that country given to 
     vessels of that country.
       ``(b) Application.--A suspension under this section shall 
     apply to the same commercial privileges denied to vessels of 
     the United States in the ports or waters of the foreign 
     country, and to the same class of vessels of that country as 
     the class of vessels of the United States denied the 
     privileges.
       ``(c) Effective Date.--The President shall designate the 
     effective date of the suspension in the proclamation.
       ``(d) Penalties.--
       ``(1) Seizure and forfeiture.--If the master, officer, or 
     agent of a vessel of a foreign country does an act for the 
     vessel in the ports or waters of the United States in 
     violation of a proclamation issued under this section, the 
     vessel and the goods on the vessel may be seized by, and 
     forfeited to, the United States Government.
       ``(2) Fine or imprisonment.--A person opposing an official 
     of the Government enforcing this section shall be fined under 
     title 18, imprisoned for not more than 2 years, or both.

     ``Sec. 60506. Retaliation against British dominions of North 
       America

       ``(a) General Authority.--The President by proclamation may 
     prohibit vessels of the British dominions of North America, 
     their masters and crews, and products of or coming from those 
     dominions, from entering waters, ports, or places of the 
     United States when the President is satisfied that--
       ``(1) fishermen or fishing vessels of the United States in 
     waters, ports, or places of the British dominions of North 
     America are being or recently have been--
       ``(A) denied rights provided by law or treaty;
       ``(B) subjected to unreasonable restrictions in the 
     exercise of those rights; or
       ``(C) otherwise harassed;
       ``(2) fishermen or fishing vessels of the United States, 
     having a permit under the laws of the United States to dock 
     or trade at a port or place in the British dominions of North 
     America, are being or recently have been--
       ``(A) denied the privilege of entering the port or place in 
     the same manner and under the same regulations applicable to 
     trading vessels of the most-favored-nation;
       ``(B) prevented from buying supplies allowed to be sold to 
     trading vessels of the most-favored-nation; or
       ``(C) otherwise harassed; or
       ``(3) other vessels of the United States or their masters 
     or crews in waters, ports, or places of the British dominions 
     of North America are being or recently have been--
       ``(A) denied privileges given to vessels of the most-
     favored-nation or their masters or crews; or
       ``(B) otherwise harassed.
       ``(b) Coverage and Exceptions.--The President may apply a 
     proclamation under this section to any of the subjects named, 
     and may include exceptions for vessels in distress or need of 
     supplies. The President may change, revoke, and renew the 
     proclamation.
       ``(c) Penalties.--A person violating a proclamation issued 
     under this section shall be fined under title 18, imprisoned 
     for not more than 2 years, or both. A vessel or goods found 
     in waters, ports, or places of the United States in violation 
     of the proclamation may be seized by, and forfeited to, the 
     United States Government.

     ``Sec. 60507. Suspension of free passage through Saint Marys 
       Falls Canal

       ``(a) Purpose.--The purpose of this section is to secure 
     reciprocal advantages for the citizens, ports, and vessels of 
     the United States.
       ``(b) General Authority.--When the President is satisfied 
     that vessels of the United States, or passengers or cargo 
     being transported to a port of the United States, are 
     prohibited from passing through a canal or lock connected 
     with the navigation of the Saint Lawrence River, the Great 
     Lakes, or their connecting waterways, or burdened in that 
     passage by tolls or other means that are unreasonable in view 
     of the free passage through the Saint Marys Falls Canal 
     allowed to vessels of all countries, the President by 
     proclamation may suspend the right of free passage through 
     the Saint Marys Falls Canal for vessels owned by subjects of 
     the country imposing the prohibition, tolls, or other burdens 
     and for passengers and cargo being transported to the ports 
     of that country, even when carried in vessels of the United 
     States. The suspension shall apply to the extent and for the 
     time the President considers appropriate.
       ``(c) Imposition of Toll.--
       ``(1) In general.--During a suspension under this section, 
     the President shall impose a toll of not more than $2 per ton 
     on cargo and not more than $5 on each passenger.
       ``(2) Exceptions.--Notwithstanding paragraph (1), a toll 
     may not be imposed on passengers or cargo landed at 
     Ogdensburg, New York, or any port west of Ogdensburg and 
     south of a line drawn from the northern boundary of New York 
     through the Saint Lawrence River, the Great Lakes, and their 
     connecting channels to the northern boundary of Minnesota.
       ``(d) Collection of Toll.--
       ``(1) In general.--A toll imposed under this section shall 
     be collected under regulations prescribed by the Secretary of 
     Homeland Security. The Secretary may require the master of a 
     vessel to provide a sworn statement of the amount and kind of 
     cargo, the number of passengers, and the destination of the 
     passengers and cargo.
       ``(2) Proof of landing.--When applicable, the Secretary 
     also may require satisfactory proof that the passengers and 
     cargo were landed at a port described in subsection (c)(2). 
     Until that proof is provided, the Secretary may assume the 
     passengers and cargo were not landed at such a port, and the 
     amount of a toll that otherwise would be imposed is a lien 
     enforceable against the vessel when found in the waters of 
     the United States.''.

     SEC. 9. SUBTITLE VII OF TITLE 46.

       Subtitle VII of title 46, United States Code, as 
     redesignated by section 8(a) of this Act, is amended as 
     follows:
       (1) The subtitle heading and analysis are amended to read 
     as follows:

             ``Subtitle VII--Security and Drug Enforcement

``Chapter                                                      Sec.

``701.  Port Security.............................................70101
``703.  Maritime Security.........................................70301
``705.  Maritime Drug Law Enforcement..........................70501''.
       (2) Add after chapter 701 the following:

                    ``CHAPTER 703--MARITIME SECURITY

``Sec.
``70301.  Definitions.
``70302.  International measures for seaport and vessel security.
``70303.  Security standards at foreign ports.
``70304.  Travel advisories on security at foreign ports.
``70305.  Suspension of passenger services.
``70306.  Report on terrorist threats.

     ``Sec. 70301. Definitions

       ``In this chapter:
       ``(1) Common carrier.--The term `common carrier' has the 
     meaning given that term in section 40102 of this title.
       ``(2) Passenger vessel.--The term `passenger vessel' has 
     the meaning given that term in section 2101 of this title.
       ``(3) Secretary.--The term `Secretary' means the Secretary 
     of the department in which the Coast Guard is operating.

     ``Sec. 70302. International measures for seaport and vessel 
       security

       ``Congress encourages the President to continue to seek 
     agreement on international seaport and vessel security 
     through the International Maritime Organization. In 
     developing an agreement, each member country of the 
     International Maritime Organization should consult with 
     appropriate private sector interests in that country. The 
     agreement would establish seaport and vessel security 
     measures and could include--
       ``(1) seaport screening of cargo and baggage similar to 
     that done at airports;
       ``(2) security measures to restrict access to cargo, 
     vessels, and dockside property to authorized personnel only;
       ``(3) additional security on board vessels;
       ``(4) licensing or certification of compliance with 
     appropriate security standards; and
       ``(5) other appropriate measures to prevent unlawful acts 
     against passengers and crews on vessels.

     ``Sec. 70303. Security standards at foreign ports

       ``(a) General Requirements.--The Secretary shall develop 
     and implement a plan to assess the effectiveness of the 
     security measures maintained at foreign ports that the 
     Secretary, in consultation with the Secretary of State, 
     determines pose a high risk of acts of terrorism against 
     passenger vessels. In carrying out this subsection, the 
     Secretary shall consult with the Secretary of State about the 
     terrorist threat that exists in each country and poses a high 
     risk of acts of terrorism against passenger vessels.
       ``(b) Notice and Recommendations to Other Countries.--If 
     the Secretary, after implementing the plan under subsection 
     (a), determines that a port does not maintain and administer 
     effective security measures, the Secretary of State (after 
     being informed by the Secretary) shall--
       ``(1) notify the appropriate government authorities of the 
     country in which the port is located of the determination; 
     and
       ``(2) recommend steps necessary to bring the security 
     measures at that port up to the standard used by the 
     Secretary in making the assessment under subsection (a).
       ``(c) Antiterrorism Assistance.--The President is 
     encouraged to provide antiterrorism assistance related to 
     maritime security under

[[Page H7643]]

     chapter 8 of part II of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2349aa et seq.) to foreign countries, especially 
     for a port that the Secretary determines under subsection (b) 
     does not maintain and administer effective security measures.

     ``Sec. 70304. Travel advisories on security at foreign ports

       ``(a) General Requirements.--On being notified by the 
     Secretary that the Secretary has determined that a condition 
     exists that threatens the safety or security of passengers, 
     passenger vessels, or crew traveling to or from a foreign 
     port that the Secretary has determined under section 70303(b) 
     of this title does not maintain and administer effective 
     security measures, the Secretary of State immediately shall 
     issue a travel advisory for that port. The Secretary of State 
     shall take the necessary steps to widely publicize the travel 
     advisory.
       ``(b) Lifting Advisories.--A travel advisory issued under 
     subsection (a) may be lifted only if the Secretary, in 
     consultation with the Secretary of State, has determined that 
     effective security measures are maintained and administered 
     at the port.
       ``(c) Notice to Congress.--The Secretary of State shall 
     notify Congress immediately of any change in the status of a 
     travel advisory issued under this section.

     ``Sec. 70305. Suspension of passenger services

       ``(a) General Authority.--Whenever the President determines 
     that a foreign nation permits the use of territory under its 
     jurisdiction as a base of operations or training for, or as a 
     sanctuary for, or in any way arms, aids, or abets, a 
     terrorist or terrorist group that knowingly uses the illegal 
     seizure of passenger vessels or the threat thereof as an 
     instrument of policy, the President may suspend the right of 
     any passenger vessel common carrier to operate to or from, 
     and the right of any passenger vessel of the United States to 
     use, a port in that foreign nation for passenger service. The 
     suspension may be without notice or hearing and for as long 
     as the President determines is necessary to ensure the 
     security of passenger vessels against unlawful seizure.
       ``(b) Prohibition.--A passenger vessel common carrier, or a 
     passenger vessel of the United States, may not operate in 
     violation of a suspension under this section.
       ``(c) Penalties.--
       ``(1) Denial of entry.--If a person operates a vessel in 
     violation of this section, the Secretary may deny the vessels 
     of that person entry to ports of the United States.
       ``(2) Civil penalty.--A person violating this section is 
     liable to the United States Government for a civil penalty of 
     not more than $50,000. Each day a vessel uses a prohibited 
     port is a separate violation.

     ``Sec. 70306. Report on terrorist threats

       ``(a) Content.--Not later than February 28 of each year, 
     the Secretary shall submit a report to Congress on the threat 
     from acts of terrorism to United States ports and vessels 
     operating from those ports. The Secretary shall include a 
     description of activities undertaken under title I of the 
     Maritime Transportation Security Act of 2002 (Public Law 107-
     295, 116 Stat. 2066) and an analysis of the effect of those 
     activities on port security against acts of terrorism.
       ``(b) Submission.--The report shall be submitted to the 
     Committee on International Relations and the Committee on 
     Transportation and Infrastructure of the House of 
     Representatives and the Committee on Foreign Relations and 
     the Committee on Commerce, Science, and Transportation of the 
     Senate. Any classified information in the report shall be 
     submitted separately as an addendum.

              ``CHAPTER 705--MARITIME DRUG LAW ENFORCEMENT

``Sec.
``70501.  Findings and declarations.
``70502.  Definitions.
``70503.  Manufacture, distribution, or possession of controlled 
              substances on vessels.
``70504.  Jurisdiction and venue.
``70505.  Failure to comply with international law as a defense.
``70506.  Penalties.
``70507.  Forfeitures.

     ``Sec. 70501. Findings and declarations

       ``Congress finds and declares that trafficking in 
     controlled substances aboard vessels is a serious 
     international problem, is universally condemned, and presents 
     a specific threat to the security and societal well-being of 
     the United States.

     ``Sec. 70502. Definitions

       ``(a) Application of Other Definitions.--The definitions in 
     section 102 of the Comprehensive Drug Abuse Prevention and 
     Control Act of 1970 (21 U.S.C. 802) apply to this chapter.
       ``(b) Vessel of the United States.--In this chapter, the 
     term `vessel of the United States' means--
       ``(1) a vessel documented under chapter 121 of this title 
     or numbered as provided in chapter 123 of this title;
       ``(2) a vessel owned in any part by an individual who is a 
     citizen of the United States, the United States Government, 
     the government of a State or political subdivision of a 
     State, or a corporation incorporated under the laws of the 
     United States or of a State, unless--
       ``(A) the vessel has been granted the nationality of a 
     foreign nation under article 5 of the 1958 Convention on the 
     High Seas; and
       ``(B) a claim of nationality or registry for the vessel is 
     made by the master or individual in charge at the time of the 
     enforcement action by an officer or employee of the United 
     States who is authorized to enforce applicable provisions of 
     United States law; and
       ``(3) a vessel that was once documented under the laws of 
     the United States and, in violation of the laws of the United 
     States, was sold to a person not a citizen of the United 
     States or placed under foreign registry or a foreign flag, 
     whether or not the vessel has been granted the nationality of 
     a foreign nation.
       ``(c) Vessel Subject to the Jurisdiction of the United 
     States.--
       ``(1) In general.--In this chapter, the term `vessel 
     subject to the jurisdiction of the United States' includes--
       ``(A) a vessel without nationality;
       ``(B) a vessel assimilated to a vessel without nationality 
     under paragraph (2) of article 6 of the 1958 Convention on 
     the High Seas;
       ``(C) a vessel registered in a foreign nation if the flag 
     nation has consented or waived objection to the enforcement 
     of United States law by the United States;
       ``(D) a vessel in the customs waters of the United States;
       ``(E) a vessel in the territorial waters of a foreign 
     nation if the nation consents to the enforcement of United 
     States law by the United States; and
       ``(F) a vessel in the contiguous zone of the United States, 
     as defined in Presidential Proclamation 7219 of September 2, 
     1999 (43 U.S.C. 1331 note), that--
       ``(i) is entering the United States;
       ``(ii) has departed the United States; or
       ``(iii) is a hovering vessel as defined in section 401 of 
     the Tariff Act of 1930 (19 U.S.C. 1401).
       ``(2) Consent or waiver of objection.--Consent or waiver of 
     objection by a foreign nation to the enforcement of United 
     States law by the United States under paragraph (1)(C) or 
     (E)--
       ``(A) may be obtained by radio, telephone, or similar oral 
     or electronic means; and
       ``(B) is proved conclusively by certification of the 
     Secretary of State or the Secretary's designee.
       ``(d) Vessel Without Nationality.--
       ``(1) In general.--In this chapter, the term `vessel 
     without nationality' includes--
       ``(A) a vessel aboard which the master or individual in 
     charge makes a claim of registry that is denied by the flag 
     nation whose registry is claimed;
       ``(B) a vessel aboard which the master or individual in 
     charge fails, on request of an officer of the United States 
     authorized to enforce applicable provisions of United States 
     law, to make a claim of nationality or registry for that 
     vessel; and
       ``(C) a vessel aboard which the master or individual in 
     charge makes a claim of registry and for which the claimed 
     nation of registry does not affirmatively and unequivocally 
     assert that the vessel is of its nationality.
       ``(2) Claim of registry.--A claim of registry under 
     paragraph (1)(A) or (C) may be verified or denied by radio, 
     telephone, or similar oral or electronic means. The denial of 
     such a claim by the claimed flag nation is proved 
     conclusively by certification of the Secretary of State or 
     the Secretary's designee.
       ``(e) Claim of Nationality or Registry.--A claim of 
     nationality or registry under this section includes only--
       ``(1) possession on board the vessel and production of 
     documents evidencing the vessel's nationality as provided in 
     article 5 of the 1958 Convention on the High Seas;
       ``(2) flying its flag nation's ensign or flag; or
       ``(3) a verbal claim of nationality or registry by the 
     master or individual in charge of the vessel.

     ``Sec. 70503. Manufacture, distribution, or possession of 
       controlled substances on vessels

       ``(a) Prohibitions.--An individual may not knowingly or 
     intentionally manufacture or distribute, or possess with 
     intent to manufacture or distribute, a controlled substance 
     on board--
       ``(1) a vessel of the United States or a vessel subject to 
     the jurisdiction of the United States; or
       ``(2) any vessel if the individual is a citizen of the 
     United States or a resident alien of the United States.
       ``(b) Extension Beyond Territorial Jurisdiction.--
     Subsection (a) applies even though the act is committed 
     outside the territorial jurisdiction of the United States.
       ``(c) Nonapplication.--
       ``(1) In general.--Subject to paragraph (2), subsection (a) 
     does not apply to--
       ``(A) a common or contract carrier or an employee of the 
     carrier who possesses or distributes a controlled substance 
     in the lawful and usual course of the carrier's business; or
       ``(B) a public vessel of the United States or an individual 
     on board the vessel who possesses or distributes a controlled 
     substance in the lawful course of the individual's duties.
       ``(2) Entered in manifest.--Paragraph (1) applies only if 
     the controlled substance is part of the cargo entered in the 
     vessel's manifest and is intended to be imported lawfully 
     into the country of destination for scientific, medical, or 
     other lawful purposes.
       ``(d) Burden of Proof.--The United States Government is not 
     required to negative a defense provided by subsection (c) in 
     a complaint, information, indictment, or other pleading or in 
     a trial or other proceeding. The burden of going forward with 
     the evidence supporting the defense is on the person claiming 
     its benefit.

     ``Sec. 70504. Jurisdiction and venue

       ``(a) Jurisdiction.--Jurisdiction of the United States with 
     respect to a vessel subject to this chapter is not an element 
     of an offense. Jurisdictional issues arising under this 
     chapter are preliminary questions of law to be determined 
     solely by the trial judge.
       ``(b) Venue.--A person violating section 70503 of this 
     title shall be tried in the district court of the United 
     States for--
       ``(1) the district at which the person enters the United 
     States; or
       ``(2) the District of Columbia.

[[Page H7644]]

     ``Sec. 70505. Failure to comply with international law as a 
       defense

       ``A person charged with violating section 70503 of this 
     title does not have standing to raise a claim of failure to 
     comply with international law as a basis for a defense. A 
     claim of failure to comply with international law in the 
     enforcement of this chapter may be made only by a foreign 
     nation. A failure to comply with international law does not 
     divest a court of jurisdiction and is not a defense to a 
     proceeding under this chapter.

     ``Sec. 70506. Penalties

       ``(a) Violations.--A person violating section 70503 of this 
     title shall be punished as provided in section 1010 of the 
     Comprehensive Drug Abuse Prevention and Control Act of 1970 
     (21 U.S.C. 960). However, if the offense is a second or 
     subsequent offense as provided in section 1012(b) of that Act 
     (21 U.S.C. 962(b)), the person shall be punished as provided 
     in section 1012 of that Act (21 U.S.C. 962).
       ``(b) Attempts and Conspiracies.--A person attempting or 
     conspiring to violate section 70503 of this title is subject 
     to the same penalties as provided for violating section 
     70503.

     ``Sec. 70507. Forfeitures

       ``(a) In General.--Property described in section 511(a) of 
     the Comprehensive Drug Abuse Prevention and Control Act of 
     1970 (21 U.S.C. 881(a)) that is used or intended for use to 
     commit, or to facilitate the commission of, an offense under 
     section 70503 of this title may be seized and forfeited in 
     the same manner that similar property may be seized and 
     forfeited under section 511 of that Act (21 U.S.C. 881).
       ``(b) Prima Facie Evidence of Violation.--Practices 
     commonly recognized as smuggling tactics may provide prima 
     facie evidence of intent to use a vessel to commit, or to 
     facilitate the commission of, an offense under section 70503 
     of this title, and may support seizure and forfeiture of the 
     vessel, even in the absence of controlled substances aboard 
     the vessel. The following indicia, among others, may be 
     considered, in the totality of the circumstances, to be prima 
     facie evidence that a vessel is intended to be used to 
     commit, or to facilitate the commission of, such an offense:
       ``(1) The construction or adaptation of the vessel in a 
     manner that facilitates smuggling, including--
       ``(A) the configuration of the vessel to ride low in the 
     water or present a low hull profile to avoid being detected 
     visually or by radar;
       ``(B) the presence of any compartment or equipment that is 
     built or fitted out for smuggling, not including items such 
     as a safe or lock-box reasonably used for the storage of 
     personal valuables;
       ``(C) the presence of an auxiliary tank not installed in 
     accordance with applicable law or installed in such a manner 
     as to enhance the vessel's smuggling capability;
       ``(D) the presence of engines that are excessively over-
     powered in relation to the design and size of the vessel;
       ``(E) the presence of materials used to reduce or alter the 
     heat or radar signature of the vessel and avoid detection;
       ``(F) the presence of a camouflaging paint scheme, or of 
     materials used to camouflage the vessel, to avoid detection; 
     or
       ``(G) the display of false vessel registration numbers, 
     false indicia of vessel nationality, false vessel name, or 
     false vessel homeport.
       ``(2) The presence or absence of equipment, personnel, or 
     cargo inconsistent with the type or declared purpose of the 
     vessel.
       ``(3) The presence of excessive fuel, lube oil, food, 
     water, or spare parts, inconsistent with legitimate vessel 
     operation, inconsistent with the construction or equipment of 
     the vessel, or inconsistent with the character of the 
     vessel's stated purpose.
       ``(4) The operation of the vessel without lights during 
     times lights are required to be displayed under applicable 
     law or regulation and in a manner of navigation consistent 
     with smuggling tactics used to avoid detection by law 
     enforcement authorities.
       ``(5) The failure of the vessel to stop or respond or heave 
     to when hailed by government authority, especially where the 
     vessel conducts evasive maneuvering when hailed.
       ``(6) The declaration to government authority of apparently 
     false information about the vessel, crew, or voyage or the 
     failure to identify the vessel by name or country of 
     registration when requested to do so by government authority.
       ``(7) The presence of controlled substance residue on the 
     vessel, on an item aboard the vessel, or on an individual 
     aboard the vessel, of a quantity or other nature that 
     reasonably indicates manufacturing or distribution activity.
       ``(8) The use of petroleum products or other substances on 
     the vessel to foil the detection of controlled substance 
     residue.
       ``(9) The presence of a controlled substance in the water 
     in the vicinity of the vessel, where given the currents, 
     weather conditions, and course and speed of the vessel, the 
     quantity or other nature is such that it reasonably indicates 
     manufacturing or distribution activity.''.

     SEC. 10. SUBTITLE VIII OF TITLE 46.

       Title 46, United States Code, is amended by adding after 
     subtitle VII the following:

                     ``Subtitle VIII--Miscellaneous

``Chapter                                                      Sec.

``801.  Wrecks and Salvage........................................80101
``803.  Ice and Derelicts.........................................80301
``805.  Safe Containers for International Cargo...................80501

                   ``CHAPTER 801--WRECKS AND SALVAGE

``Sec.
``80101.  Vessel stranded on foreign coast.
``80102.  License to salvage on Florida coast.
``80103.  Property on Florida coast to be taken to port of entry.
``80104.  Salvaging operations by foreign vessels.
``80105.  Canadian vessels aiding vessels in United States waters.
``80106.  International agreement on derelicts.
``80107.  Salvors of life to share in remuneration.

     ``Sec. 80101. Vessel stranded on foreign coast

       ``(a) Duties of Consular Officer.--When a vessel of the 
     United States is stranded on a coast of a foreign country, 
     the consular officer in that country shall take proper 
     measures, to the extent the laws of that country allow, to--
       ``(1) save and secure the vessel and property on the 
     vessel; and
       ``(2) prepare an inventory of the property that is saved.
       ``(b) Delivery to Owner.--After deducting the expenses, the 
     consular officer shall deliver the property, with an 
     inventory, to the owner of the property.
       ``(c) Limitation on Taking Possession.--A consular officer 
     may not take possession of property under this section when 
     the owner, master, or consignee is present or able to take 
     possession of the property.

     ``Sec. 80102. License to salvage on Florida coast

       ``(a) Licensing Requirements.--To be regularly employed in 
     the business of salvaging on the coast of Florida, a vessel 
     and its master each must have a license issued by a judge of 
     the district court of the United States for a judicial 
     district of Florida.
       ``(b) Judicial Findings.--Before issuing a license under 
     this section, the judge must be satisfied, when the license 
     is for--
       ``(1) a vessel, that the vessel is seaworthy and properly 
     equipped for the business of saving property shipwrecked and 
     in distress; or
       ``(2) a master, that the master is trustworthy and innocent 
     of any fraud or misconduct related to property shipwrecked or 
     saved on the coast.

     ``Sec. 80103. Property on Florida coast to be taken to port 
       of entry

       ``(a) In General.--Property taken from a wreck, the sea, or 
     a key or shoal, on the coast of Florida and within the 
     jurisdiction of the United States, shall be brought to a port 
     of entry of the United States.
       ``(b) Seizure and Forfeiture.--A vessel transporting 
     property described in subsection (a) to a foreign port may be 
     seized by, and forfeited to, the United States Government. A 
     forfeiture under this subsection accrues half to the informer 
     and half to the Government.

     ``Sec. 80104. Salvaging operations by foreign vessels

       ``(a) Prohibition.--Except as provided in this section or 
     section 80105 of this title, a foreign vessel may not, under 
     penalty of forfeiture, engage in salvaging operations on the 
     Atlantic or Pacific coast of the United States, in any 
     portion of the Great Lakes or their connecting or tributary 
     waters, including any portion of the Saint Lawrence River 
     through which the international boundary line extends, or in 
     territorial waters of the United States on the Gulf of 
     Mexico.
       ``(b) When Suitable Vessel Not Available.--The Secretary of 
     Homeland Security may authorize a foreign vessel to engage in 
     salvaging operations in a particular locality if, on 
     investigation, the Secretary is satisfied that there is not 
     available in that locality a suitable vessel that is--
       ``(1) owned only by citizens of the United States 
     (including a Bowaters corporation under section 12118 of this 
     title); and
       ``(2) documented under chapter 121 of this title or 
     numbered under chapter 123 of this title.
       ``(c) Operations Authorized by Treaty.--This section does 
     not prohibit or restrict assistance to vessels or salvaging 
     operations authorized by treaty, including--
       ``(1) article II of the Treaty between the United States 
     and Great Britain concerning reciprocal rights for United 
     States and Canada in the conveyance of prisoners and wrecking 
     and salvage, signed at Washington, May 18, 1908 (35 Stat. 
     2036); or
       ``(2) the Treaty between the United States of America and 
     Mexico to facilitate assistance to and salvage of vessels in 
     territorial waters, signed at Mexico City, June 13, 1935 (49 
     Stat. 3359).

     ``Sec. 80105. Canadian vessels aiding vessels in United 
       States waters

       ``(a) In General.--Canadian vessels and wrecking equipment 
     may give aid to Canadian or other vessels and property 
     wrecked, disabled, or in distress in the waters of the United 
     States contiguous to Canada, including--
       ``(1) the canal and improvement of the waters between Lake 
     Erie and Lake Huron; and
       ``(2) the Saint Marys River and canal.
       ``(b) Reciprocity.--This section does not apply after the 
     President proclaims that privileges reciprocal to those under 
     subsection (a) have been withdrawn or rendered inoperative by 
     the Government of Canada.

     ``Sec. 80106. International agreement on derelicts

       ``The President may make an international agreement with 
     other governments interested in the navigation of the North 
     Atlantic Ocean, providing for the reporting, marking, and 
     removal of dangerous wrecks, derelicts, and other menaces to 
     navigation outside the coast waters of the countries 
     bordering the North Atlantic Ocean.

     ``Sec. 80107. Salvors of life to share in remuneration

       ``(a) Entitlement of Salvors.--A salvor of human life, who 
     gave aid following an accident giving rise to salvage, is 
     entitled to a fair share of the payment awarded to the salvor 
     for salvaging the vessel or other property or preventing or 
     minimizing damage to the environment.

[[Page H7645]]

       ``(b) Common Ownership of Vessels.--The right to 
     remuneration for aid or salvage services is not affected by 
     common ownership of the vessels giving and receiving the aid 
     or salvage services.
       ``(c) Time Limit on Bringing Actions.--A civil action to 
     recover remuneration for giving aid or salvage services must 
     be brought within 2 years after the date the aid or salvage 
     services were given, unless the court in which the action is 
     brought is satisfied that during that 2-year period there had 
     not been a reasonable opportunity to seize the aided or 
     salvaged vessel within the jurisdiction of the court or 
     within the territorial waters of the country of the 
     plaintiff's residence or principal place of business.
       ``(d) Nonapplication.--This section does not apply to a 
     vessel of war or a vessel owned by the United States 
     Government appropriated only to a public service.

                    ``CHAPTER 803--ICE AND DERELICTS

``Sec.
``80301.  International agreements.
``80302.  Patrol services.
``80303.  Speed of vessel in ice region.

     ``Sec. 80301. International agreements

       ``(a) General Authority.--The President may make agreements 
     with interested maritime countries to--
       ``(1) maintain in the North Atlantic Ocean a service of ice 
     patrol, of study and observation of ice and current 
     conditions, and of assistance to vessels and their crews 
     requiring assistance within the limits of the patrol;
       ``(2) maintain a service of study and observation of ice 
     and current conditions in the waters affecting the set and 
     drift of ice in the North Atlantic Ocean; and
       ``(3) take all practicable steps to ensure the destruction 
     or removal of derelicts in the northern part of the Atlantic 
     Ocean, east of the line drawn from Cape Sable to a point in 
     latitude 34 degrees north, longitude 70 degrees west, if the 
     destruction or removal is necessary.
       ``(b) Payment Between Countries.--The President may include 
     in an agreement under subsection (a) a provision for--
       ``(1) payment to the United States Government by other 
     countries for their proportionate share of the expense of 
     maintaining the services; or
       ``(2) contribution by the Government for its proportionate 
     share if the agreement provides for another country to 
     maintain the services.

     ``Sec. 80302. Patrol services

       ``(a) General Requirements.--Unless the agreements made 
     under section 80301 of this title provide otherwise, an ice 
     patrol shall be maintained during the entire ice season in 
     guarding the southeastern, southern, and southwestern limits 
     of the region of icebergs in the vicinity of the Grand Banks 
     of Newfoundland. The patrol shall inform trans-Atlantic and 
     other passing vessels by radio and other available means of 
     the ice conditions and the extent of the dangerous region. 
     During the ice season, there shall be maintained a service of 
     study of ice and current conditions, a service of providing 
     assistance to vessels and crews requiring assistance, and a 
     service of removing and destroying derelicts. Any of these 
     services may be maintained during the remainder of the year 
     as may be advisable.
       ``(b) Warnings to Vessels.--An ice patrol vessel shall warn 
     any vessel known to be approaching a dangerous area and 
     recommend safe routes.
       ``(c) Recording and Reporting Incidents.--
       ``(1) Recording.--An ice patrol vessel shall record the 
     name of a vessel and the facts of the case when the patrol 
     observes or knows that the vessel--
       ``(A) is on other than a regular recognized or advertised 
     route crossing the North Atlantic Ocean;
       ``(B) has crossed the fishing banks of Newfoundland north 
     of latitude 43 degrees north during the fishing season; or
       ``(C) has passed through regions known or believed to be 
     endangered by ice when proceeding to and from ports of North 
     America.
       ``(2) Reporting.--The name of the vessel and all pertinent 
     information about the incident shall be reported to the 
     government of the country to which the vessel belongs if that 
     government requests.
       ``(d) Administration.--The Commandant of the Coast Guard, 
     under the direction of the Secretary of the department in 
     which the Coast Guard is operating, shall carry out the 
     services provided for in this section and shall assign 
     necessary vessels, material, and personnel of the Coast 
     Guard. On request of such Secretary, the head of an agency 
     may detail personnel, lend or contribute material or 
     equipment, or otherwise assist in carrying out the services 
     provided for in this section.
       ``(e) Annual Report.--The Commandant shall publish an 
     annual report of the activities of the services provided for 
     in this section. A copy of the report shall be provided to 
     each interested foreign government and to each agency 
     assisting in the work.

     ``Sec. 80303. Speed of vessel in ice region

       ``(a) Requirement.--The master of a vessel of the United 
     States, when ice is reported on or near the vessel's course, 
     shall proceed at a moderate speed or change the course of the 
     vessel to go well clear of the danger zone.
       ``(b) Civil Penalty.--A master violating this section is 
     liable to the United States Government for a civil penalty of 
     not more than $500.

         ``CHAPTER 805--SAFE CONTAINERS FOR INTERNATIONAL CARGO

``Sec.
``80501.  Definitions.
``80502.  Application of Convention.
``80503.  General authority of the Secretary.
``80504.  Approval and examination.
``80505.  Enforcement.
``80506.  Delegation of authority.
``80507.  Employee protection.
``80508.  Amendments to Convention.
``80509.  Civil penalty.

     ``Sec. 80501. Definitions

       ``In this chapter:
       ``(1) Container.--The term `container' has the meaning 
     given that term in the Convention.
       ``(2) Convention.--The term `Convention' means the 
     International Convention for Safe Containers, and its 
     annexes, done at Geneva, Switzerland, December 2, 1972.
       ``(3) International transport.--The term `international 
     transport' means the transportation of a container between--
       ``(A) a place in a foreign country and a place in the 
     jurisdiction of the United States; or
       ``(B) two places outside the United States by United States 
     carriers.
       ``(4) Owner.--The term `owner' includes the lessee or 
     bailee of a container if a written lease or bailment provides 
     for the lessee or bailee to exercise the owner's 
     responsibility for maintaining and examining the container.
       ``(5) Safety approval plate.--The term `safety approval 
     plate' has the meaning given that term in annex I of the 
     Convention.

     ``Sec. 80502. Application of Convention

       ``The Convention applies to an owner of a container used in 
     international transport if the owner is domiciled or has its 
     principal office in the United States.

     ``Sec. 80503. General authority of the Secretary

       ``(a) In General.--The Secretary of the department in which 
     the Coast Guard is operating shall carry out the Convention 
     and this chapter in the United States.
       ``(b) Regulations.--The Secretary shall prescribe 
     regulations to carry out this chapter. The regulations 
     shall--
       ``(1) establish procedures for testing, inspecting, and 
     initially approving containers and designs for containers, 
     including procedures for attaching, invalidating, and 
     removing safety approval plates for containers;
       ``(2) establish procedures to be followed by the owners of 
     containers for the periodic examination of containers as 
     provided in the Convention; and
       ``(3) provide a method for developing, collecting, and 
     disseminating information about container safety and the 
     international transport of containers.
       ``(c) Safety Approval Plates.--If the owner of a container 
     without a safety approval plate establishes that the 
     container satisfies the standards of the Convention, the 
     Secretary may authorize a safety approval plate to be 
     attached to the container.
       ``(d) Schedule of Fees.--The Secretary may prescribe a 
     schedule of fees for services performed by the Secretary, or 
     by a person delegated authority under section 80506 of this 
     title, for the testing, inspection, and initial approval of 
     containers and container designs.
       ``(e) Encouraging Intermodal Transport.--To the maximum 
     extent possible, the Secretary shall encourage the 
     development and use of intermodal transport, using containers 
     built to facilitate economical, safe, and expeditious 
     handling of containerized cargo without intermediate 
     reloading when it is being transported over land, air, and 
     sea areas.

     ``Sec. 80504. Approval and examination

       ``(a) Domicile and Principal Office in United States.--A 
     container owner domiciled and having its principal office in 
     the United States shall have the container--
       ``(1) approved initially under procedures prescribed by the 
     Secretary of the department in which the Coast Guard is 
     operating or by the government of another country that is a 
     party to the Convention; and
       ``(2) examined periodically as provided in the Convention 
     under procedures prescribed by the Secretary.
       ``(b) Domicile or Principal Office in United States.--A 
     container owner domiciled or having its principal office in 
     the United States shall have the container--
       ``(1) approved initially under procedures prescribed by the 
     Secretary or by the government of another country that is a 
     party to the Convention; and
       ``(2) examined periodically as provided in the Convention, 
     under procedures prescribed by the government of the country 
     in which the owner is domiciled or has its principal office, 
     as long as that country is a party to the Convention.
       ``(c) Neither Domicile Nor Principal Office in United 
     States.--A container owner neither domiciled nor having its 
     principal office in the United States or another country that 
     is a party to the Convention may submit a container for 
     initial approval and periodic examination under procedures 
     prescribed by the Secretary.

     ``Sec. 80505. Enforcement

       ``(a) In General.--To enforce the Convention, this chapter, 
     and regulations prescribed under this chapter, the Secretary 
     of the department in which the Coast Guard is operating may--
       ``(1) examine, or require to be examined, containers in 
     international transport;
       ``(2) approve designs for containers;
       ``(3) inspect and test containers being manufactured;
       ``(4) issue a detention order removing or excluding a 
     container from service until the container owner satisfies 
     the Secretary that the container meets the standards of the 
     Convention, if the container--
       ``(A) does not have a safety approval plate attached to it; 
     or
       ``(B) has a safety approval plate attached but there is 
     significant evidence that the container is in a condition 
     that creates an obvious risk to safety;
       ``(5) take other appropriate action, including issuing 
     necessary orders, to remove a container from service or 
     restrict its use if the container is

[[Page H7646]]

     not in compliance with the Convention, this chapter, or 
     regulations prescribed under this chapter, but does not 
     present an obvious risk to safety; and
       ``(6) allow a container found to be unsafe or without a 
     safety approval plate to be moved to another location for 
     repair or other disposition, under restrictions consistent 
     with the intent of the Convention.
       ``(b) Payment of Expenses.--
       ``(1) Examination.--The owner of a container involved in an 
     action by the Secretary under this section related to an 
     examination of the container shall pay or reimburse the 
     Secretary for the expenses arising from that action, except 
     for the costs of routine examinations of the container or a 
     safety approval plate.
       ``(2) Testing, inspection, and initial approval.--The owner 
     of a container submitted to the procedure established by the 
     Secretary for testing, inspection, and initial approval, and 
     the manufacturer of a container that submits a design to the 
     procedure established by the Secretary for testing, 
     inspection, and initial approval, shall pay or reimburse the 
     Secretary for the expenses arising from the testing, 
     inspection, or approval.
       ``(3) Credit to appropriation.--Amounts received by the 
     Secretary as reimbursement shall be credited to the 
     appropriation for operating expenses of the Coast Guard.
       ``(c) Presumption Based on Safety Approval Plate.--A 
     container bearing a safety approval plate authorized by a 
     country that is a party to the Convention is presumed to be 
     in a safe condition unless there is significant evidence that 
     the container is in a condition that creates an obvious risk 
     to safety.
       ``(d) Notice of Orders.--
       ``(1) In general.--When the Secretary issues a detention or 
     other order under this section, the Secretary promptly shall 
     notify in writing--
       ``(A) the owner of the container;
       ``(B) the owner's agent; or
       ``(C) if the identity of the owner is not apparent from the 
     container or shipping documents, the custodian.
       ``(2) Information to include.--The notification shall 
     identify the container involved, give the location of the 
     container, and describe the condition or situation giving 
     rise to the order.
       ``(e) Duration of Orders.--An order issued by the Secretary 
     under this section remains in effect until--
       ``(1) the Secretary declares the container to be in 
     compliance with the standards of the Convention; or
       ``(2) the container is removed permanently from service.
       ``(f) Notice of Defective Container to Country Issuing 
     Safety Approval Plate.--If the Secretary has reason to 
     believe that a container bearing a safety approval plate 
     issued by another country was defective at the time of 
     approval, the Secretary shall notify that country.

     ``Sec. 80506. Delegation of authority

       ``(a) In General.--The Secretary of the department in which 
     the Coast Guard is operating may delegate to any person, 
     including a public or private agency or nonprofit 
     organization, authority to grant initial approval for 
     containers and designs and to attach safety approval plates.
       ``(b) Regulations.--Before making a delegation under this 
     section, the Secretary shall prescribe regulations 
     establishing--
       ``(1) criteria to be followed in selecting a person to whom 
     authority is to be delegated;
       ``(2) a detailed description of the duties and powers to be 
     carried out by the person to whom authority is delegated, 
     including the records the person shall keep; and
       ``(3) the review the Secretary will conduct to decide 
     whether the person is carrying out the delegated duties and 
     powers properly.
       ``(c) Inspection of Records.--A person delegated authority 
     under this section shall make available to the Secretary for 
     inspection, on request, records the person is required to 
     keep.
       ``(d) Penalties and Orders.--A person delegated authority 
     under this section may not--
       ``(1) assess or collect, or attempt to assess or collect, a 
     penalty for violation of the Convention, this chapter, or an 
     order issued by the Secretary under this chapter; or
       ``(2) issue or attempt to issue a detention or other order.
       ``(e) Publication.--The Secretary shall publish in the 
     Federal Register or other appropriate publication--
       ``(1) the name and address of each person to whom authority 
     is delegated;
       ``(2) the duties and powers delegated; and
       ``(3) the period of the delegation.
       ``(f) Revocation.--The Secretary may revoke a delegation of 
     authority under this section at any time.

     ``Sec. 80507. Employee protection

       ``(a) Prohibition.--A person may not discharge or 
     discriminate against an employee because the employee has 
     reported the existence of an unsafe container or a violation 
     of this chapter or a regulation prescribed under this 
     chapter.
       ``(b) Complaints.--An employee alleging to have been 
     discharged or discriminated against in violation of 
     subsection (a) may file a complaint with the Secretary of 
     Labor. The complaint must be filed within 60 days after the 
     violation.
       ``(c) Enforcement.--The Secretary of Labor may investigate 
     the complaint. If the Secretary of Labor finds there has been 
     a violation, the Secretary of Labor may bring a civil action 
     in an appropriate district court of the United States. The 
     court has jurisdiction to restrain violations of subsection 
     (a) and order appropriate relief, including reinstatement of 
     the employee to the employee's former position with back pay.
       ``(d) Notice to Complainant.--Within 30 days after 
     receiving a complaint under this section, the Secretary of 
     Labor shall notify the complainant of the intended action on 
     the complaint.

     ``Sec. 80508. Amendments to Convention

       ``(a) Proposals by United States Government.--The Secretary 
     of State, with the concurrence of the Secretary of the 
     department in which the Coast Guard is operating, may propose 
     amendments to the Convention or request a conference for 
     amending the Convention as provided in article IX of the 
     Convention.
       ``(b) Proposals by Other Countries.--An amendment 
     communicated to the United States Government under article 
     IX(2) of the Convention may be accepted for the Government by 
     the President, with the advice and consent of the Senate. The 
     President may declare that the Government does not accept an 
     amendment.
       ``(c) Amendments to Annexes.--
       ``(1) In general.--The Secretary of State, with the 
     concurrence of the Secretary of the department in which the 
     Coast Guard is operating--
       ``(A) may propose amendments to the annexes to the 
     Convention;
       ``(B) may propose a conference for amending annexes to the 
     Convention; and
       ``(C) shall consider and act on amendments to the annexes 
     to the Convention adopted by the Maritime Safety Committee of 
     the International Maritime Organization and communicated to 
     the Government under article X(2) of the Convention.
       ``(2) Action following approval or objection.--If a 
     proposed amendment to an annex is approved by the Government, 
     the amendment shall enter into force as provided in article X 
     of the Convention. If a proposed amendment is objected to, 
     the Secretary of State promptly shall communicate the 
     objection as provided in article X(3) of the Convention.
       ``(d) Appointment of Arbitrator.--The Secretary of State, 
     with the concurrence of the Secretary of the department in 
     which the Coast Guard is operating, shall appoint an 
     arbitrator when one is required to resolve a dispute within 
     the meaning of article XIII of the Convention.

     ``Sec. 80509. Civil penalty

       ``(a) In General.--An owner, agent, or custodian who has 
     been notified of an order issued under section 80505 of this 
     title and fails to take reasonable and prompt action to 
     prevent or stop a container subject to the order from being 
     moved in violation of the order is liable to the United 
     States Government for a civil penalty of not more than $5,000 
     for each container moved. Each day the container remains in 
     service while the order is in effect is a separate violation.
       ``(b) Assessment and Collection.--
       ``(1) In general.--After notice and an opportunity for a 
     hearing, the Secretary of the department in which the Coast 
     Guard is operating shall assess and collect any penalty under 
     this section.
       ``(2) Factors to consider.--In determining the amount of 
     the penalty, the Secretary shall consider the gravity of the 
     violation, the hazards involved, and the record of the person 
     charged with respect to violations of the Convention, this 
     chapter, or regulations prescribed under this chapter.
       ``(3) Remission, mitigation, or compromise.--The Secretary 
     may remit, mitigate, or compromise a penalty under this 
     section.
       ``(4) Enforcement.--If a person fails to pay a penalty 
     under this section, the Secretary shall refer the matter to 
     the Attorney General for collection in an appropriate 
     district court of the United States.''.

     SEC. 11. MARITIME ADMINISTRATION.

       Section 109 of title 49, United States Code, is amended to 
     read as follows:

     ``Sec. 109. Maritime Administration

       ``(a) Organization.--The Maritime Administration is an 
     administration in the Department of Transportation.
       ``(b) Maritime Administrator.--The head of the Maritime 
     Administration is the Maritime Administrator, who is 
     appointed by the President by and with the advice and consent 
     of the Senate. The Administrator shall report directly to the 
     Secretary of Transportation and carry out the duties 
     prescribed by the Secretary.
       ``(c) Deputy Maritime Administrator.--The Maritime 
     Administration shall have a Deputy Maritime Administrator, 
     who is appointed in the competitive service by the Secretary, 
     after consultation with the Administrator. The Deputy 
     Administrator shall carry out the duties prescribed by the 
     Administrator. The Deputy Administrator shall be Acting 
     Administrator during the absence or disability of the 
     Administrator and, unless the Secretary designates another 
     individual, during a vacancy in the office of Administrator.
       ``(d) Duties and Powers Vested in Secretary.--All duties 
     and powers of the Maritime Administration are vested in the 
     Secretary.
       ``(e) Regional Offices.--The Maritime Administration shall 
     have regional offices for the Atlantic, Gulf, Great Lakes, 
     and Pacific port ranges, and may have other regional offices 
     as necessary. The Secretary shall appoint a qualified 
     individual as Director of each regional office. The Secretary 
     shall carry out appropriate activities and programs of the 
     Maritime Administration through the regional offices.
       ``(f) Interagency and Industry Relations.--The Secretary 
     shall establish and maintain liaison with other agencies, and 
     with representative trade organizations throughout the United 
     States, concerned with the transportation of commodities by 
     water in the export and import foreign commerce of the United 
     States, for the purpose of securing preference to vessels of 
     the United States for the transportation of those 
     commodities.
       ``(g) Detailing Officers From Armed Forces.--To assist the 
     Secretary in carrying out

[[Page H7647]]

     duties and powers relating to the Maritime Administration, 
     not more than five officers of the armed forces may be 
     detailed to the Secretary at any one time, in addition to 
     details authorized by any other law. During the period of a 
     detail, the Secretary shall pay the officer an amount that, 
     when added to the officer's pay and allowances as an officer 
     in the armed forces, makes the officer's total pay and 
     allowances equal to the amount that would be paid to an 
     individual performing work the Secretary considers to be of 
     similar importance, difficulty, and responsibility as that 
     performed by the officer during the detail.
       ``(h) Contracts and Audits.--
       ``(1) Contracts.--In the same manner that a private 
     corporation may make a contract within the scope of its 
     authority under its charter, the Secretary may make contracts 
     for the United States Government and disburse amounts to--
       ``(A) carry out the Secretary's duties and powers under 
     this section and subtitle V of title 46; and
       ``(B) protect, preserve, and improve collateral held by the 
     Secretary to secure indebtedness.
       ``(2) Audits.--The financial transactions of the Secretary 
     under paragraph (1) shall be audited by the Comptroller 
     General. The Comptroller General shall allow credit for an 
     expenditure shown to be necessary because of the nature of 
     the business activities authorized by this section or 
     subtitle V of title 46. At least once a year, the Comptroller 
     General shall report to Congress any departure by the 
     Secretary from this section or subtitle V of title 46.
       ``(i) Authorization of Appropriations.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, there are authorized to be appropriated such 
     amounts as may be necessary to carry out the duties and 
     powers of the Secretary relating to the Maritime 
     Administration.
       ``(2) Limitations.--Only those amounts specifically 
     authorized by law may be appropriated for the use of the 
     Maritime Administration for--
       ``(A) acquisition, construction, or reconstruction of 
     vessels;
       ``(B) construction-differential subsidies incident to the 
     construction, reconstruction, or reconditioning of vessels;
       ``(C) costs of national defense features;
       ``(D) payments of obligations incurred for operating-
     differential subsidies;
       ``(E) expenses necessary for research and development 
     activities, including reimbursement of the Vessel Operations 
     Revolving Fund for losses resulting from expenses of 
     experimental vessel operations;
       ``(F) the Vessel Operations Revolving Fund;
       ``(G) National Defense Reserve Fleet expenses;
       ``(H) expenses necessary to carry out part B of subtitle V 
     of title 46; and
       ``(I) other operations and training expenses related to the 
     development of waterborne transportation systems, the use of 
     waterborne transportation systems, and general 
     administration.
       ``(3) Training Vessels.--Amounts may not be appropriated 
     for the purchase or construction of training vessels for 
     State maritime academies unless the Secretary has approved a 
     plan for sharing training vessels between State maritime 
     academies.''.

     SEC. 12. AMENDMENTS RELATING TO MARITIME SECURITY ACT OF 
                   2003.

       (a) Amendments to Chapter 531.--Chapter 531 of title 46, 
     United States Code, is amended as follows:
       (1) In section 53102--
       (A) in the headings of paragraphs (1), (2), and (4) of 
     subsection (c), strike ``section 2'' and substitute ``section 
     50501'';
       (B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and (B), 
     and (4)(B), strike ``section 2 of the Shipping Act, 1916 (46 
     U.S.C. App. 802)'' and substitute ``section 50501 of this 
     title'';
       (C) in subsection (d), strike ``the first section of Public 
     Law 81-891 (64 Stat. 1120; 46 U.S.C. App. note prec. 3)'' and 
     substitute ``section 501 of this title''; and
       (D) in subsection (e)(1)--
       (i) strike ``a documented vessel (as that term is defined 
     in section 12101 of this title)'' and substitute ``documented 
     under chapter 121 of this title,''; and
       (ii) in clause (B), strike ``a documented vessel (as 
     defined in that section)'' and substitute ``documented under 
     chapter 121''.
       (2) In section 53103(c)--
       (A) in the heading of paragraph (1)(C), strike ``section 
     2'' and substitute ``section 50501'';
       (B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), strike 
     ``section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)'' 
     and substitute ``section 50501 of this title'';
       (C) in paragraph (1)(B), strike ``subparagraphs'' and 
     substitute ``subparagraph''; and
       (D) in paragraph (3)(B), strike ``agreement'' and 
     substitute ``agreements''.
       (3) In section 53104--
       (A) in subsection (c)(3)(B)(ii)(I) and (II), strike 
     ``section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)'' 
     and substitute ``section 50501 of this title'';
       (B) in subsection (e)(2), strike ``section 9 of the 
     Shipping Act, 1916 (46 U.S.C. App. 808)'' and substitute 
     ``section 56101 of this title''; and
       (C) in subsection (e)(3), strike ``section 902 of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1242)'' and 
     ``section 902 of such Act'' and substitute ``chapter 563 of 
     this title'' and ``chapter 563'', respectively.
       (4) In section 53105--
       (A) in subsection (a)(1)(A), strike ``section 12105'' and 
     substitute ``section 12111''; and
       (B) in subsection (f), strike ``approve'' and substitute 
     ``approves''.
       (5) In section 53106--
       (A) in subsection (d)(1), strike ``section 2631 of title 
     10, United States Code, the Act of March 26, 1934 (46 U.S.C. 
     App. 1241-1), section 901(a), 901(b), or 901b of the Merchant 
     Marine Act, 1936 (46 U.S.C. App. 1241(a), 1241(b), or 
     1241f)'' and substitute ``section 55302(a), 55304, 55305, or 
     55314 of this title, section 2631 of title 10'';
       (B) in subsection (d)(2), strike ``section 901(a), 901(b), 
     or 901b of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1241(a), 1241(b), or 1241f),'' and substitute ``section 
     55302(a), 55305, or 55314 of this title''; and
       (C) in subsection (e)(2), strike ``section 2(c) of the 
     Shipping Act, 1916 (46 U.S.C. App. 802(c))'' and substitute 
     ``section 50501 of this title, applying the 75 percent 
     ownership requirement of that section''.
       (6) In section 53107(f)--
       (A) strike ``section 2631 of title 10, United States Code, 
     the Act of March 26, 1934 (46 U.S.C. App. 1241-1), section 
     901(a), 901(b), or 901b of the Merchant Marine Act, 1936 (46 
     U.S.C. App. 1241(a), 1241(b), or 1241f)'' and substitute 
     ``section 55302(a), 55304, 55305, or 55314 of this title, 
     section 2631 of title 10''; and
       (B) strike ``section 2631 of title 10, United States Code, 
     the Act of March 26, 1934 (46 U.S.C. App. 1241-1), and 
     sections 901(a), 901(b), and 901b of the Merchant Marine Act, 
     1936 (46 U.S.C. App. 1241(a), 1241(b), and 1241b)'' and 
     substitute ``sections 55302(a), 55304, 55305, and 55314 of 
     this title and section 2631 of title 10''; and
       (7) In section 53108(b), strike ``section 901(b)(1) of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))'' and 
     substitute ``section 55305(a) of this title''.
       (b) Other Conforming Amendments.--
       (1) Section 12111.--
       (A) Amendment.--Section 12111(c)(3) of title 46, United 
     States Code, as enacted by this Act, is amended by striking 
     ``subtitle B of title VI of the Merchant Marine Act, 1936'' 
     and substituting ``chapter 531 of this title''.
       (B) Effective Date.--The amendment made by subparagraph (A) 
     is effective the date of enactment of this Act, or the 
     effective date of section 3534(b)(1) of the Maritime Security 
     Act of 2003 (117 Stat. 1818), whichever is later.
       (2) Repeal.--If this Act takes effect before the amendment 
     made by section 3534(b)(1) of the Maritime Security Act of 
     2003 (Public Law 108-136, 117 Stat. 1818), such section 
     3534(b)(1) is repealed.

     SEC. 13. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS.

       (a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46 
     App. U.S.C. 111, 123) is amended by striking ``or tonnage 
     tax''.
       (b) Section 809(a) of the Merchant Marine Act, 1936 (46 
     App. U.S.C. 1213(a)), is amended by striking ``and section 
     211(a)''.

     SEC. 14. ADDITIONAL AMENDMENTS TO TITLE 46.

       Title 46, United States Code, is amended as follows:
       (1) The analysis of subtitle II is amended as follows:
       (A) In each chapter item, capitalize the first letter of 
     each word containing 4 or more letters.
       (B) Strike the item for chapter 39.
       (C) The item for chapter 45 is amended to read as follows:

``45.  Uninspected Commercial Fishing Industry Vessels..........4501''.

       (2) Section 2101 is amended as follows:
       (A) Clauses (2), (3), (3a), (6), (10), (10a), (12), (17b), 
     (36), (41), (44), (45), and (46) are repealed.
       (B) In clause (8a), insert ``Prevention'' after ``Abuse''.
       (C) In clause (18), strike ``those''.
       (D) In clause (34)--
       (i) strike ``, except in part H,''; and
       (ii) strike ``head'' and substitute ``Secretary''.
       (3) In section 2102--
       (A) in subsection (a)(2), strike ``section 2101(36) and 
     (44)'' and substitute ``chapter 1''; and
       (B) in subsection (b), strike ``West'' and ``East'' and 
     substitute ``west'' and ``east'', respectively.
       (4) In section 2106, strike ``a district court of the 
     United States'' and substitute ``the district court of the 
     United States for any district''.
       (5) Section 2108 is repealed.
       (6) In section 2110--
       (A) in subsection (a)(2), strike ``part B of this title'' 
     and substitute ``part B of this subtitle'';
       (B) in subsection (b)(2)(A)(iii), strike the period at the 
     end and substitute ``; and'';
       (C) in subsection (b)(5), strike ``fees'' and substitute 
     ``fee'';
       (D) In subsection (f), strike ``Secretary of the Treasury 
     shall deny the clearance required by section 4197 of the 
     Revised Statutes of the United States (46 App. U.S.C. 91)'' 
     and substitute ``Secretary of Homeland Security shall deny 
     the clearance required by section 60105 of this title''; and
       (E) In subsection (j), strike ``state'' and substitute 
     ``State''.
       (7) In section 2301, strike ``section'' and substitute 
     ``sections 2304 and''.
       (8) In section 2304--
       (A) insert the paragraph designation ``(1)'' after ``(a)''; 
     and
       (B) insert at the end of subsection (a) the following new 
     paragraph:
       ``(2) Paragraph (1) does not apply to a vessel of war or a 
     vessel owned by the United States Government appropriated 
     only to a public service.''.
       (9) In section 2306(a)(2), strike ``section 212(A) of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1122a),'' and 
     substitute ``section 50113 of this title''.
       (10) In section 3205(d), strike ``Secretary of the Treasury 
     shall withhold or revoke the clearance required by section 
     4197 of the Revised Statutes (46 App. U.S.C. 91)'' and 
     substitute ``Secretary of Homeland Security shall withhold or 
     revoke the clearance required by section 60105 of this 
     title''.
       (11) In section 3302--
       (A) in subsection (b), insert a comma after ``fishing 
     vessel'';
       (B) in subsection (j)(2)(B), strike ``section 1304 of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1295c)'' and 
     substitute ``chapter 515 of this title''; and

[[Page H7648]]

       (C) in subsection (l)(1)(C), strike ``Inc..'' and 
     substitute ``Inc.''.
       (12) In section 3306(d), strike ``section 1302(3) of the 
     Merchant Marine Act, 1936 (46 App. U.S.C. 1295a(3))'' and 
     substitute ``section 51102 of this title''.
       (13) In section 3318(f), strike the period after 
     ``felony''.
       (14) In section 3505, strike ``section 3303(a)'' and 
     substitute ``section 3303''.
       (15) In the analysis of chapter 37, the item for section 
     3719 is amended to read as follows:

``3719. Reduction of oil spills from single hull non-self-propelled 
              tank vessels.''.

       (16) In paragraphs (1)(C), (2), and (3) of section 
     3703a(c), strike ``documentation under section 4136 of the 
     Revised Statutes of the United States (46 App. U.S.C. 14)'' 
     and substitute ``documentation as a wrecked vessel under 
     section 12112 of this title''.
       (17) In section 3704, strike ``section 27 of the Merchant 
     Marine Act, 1920 (46 App. U.S.C. 883),'' and substitute 
     ``chapter 551 of this title''.
       (18) In section 3718(e)(1), strike ``Secretary of the 
     Treasury'' and ``section 4197 of the Revised Statutes of the 
     United States (46 App. U.S.C. 91)'' and substitute 
     ``Secretary of Homeland Security'' and ``section 60105 of 
     this title'', respectively.
       (19) In section 4702, strike the subsection ``(a)'' 
     designation.
       (20) In section 4705--
       (A) strike ``subcontractor not'' and substitute 
     ``subcontractor are not'';
       (B) strike ``(a)(1)'' and substitute ``(a)'';
       (C) strike ``(2) Paragraph (1)'' and substitute ``(b) 
     Subsection (a)'';
       (D) strike ``(A)'' and substitute ``(1)''; and
       (E) strike ``(B)'' and substitute ``(2)''.
       (21) In section 5113(b), strike ``section 4197 of the 
     Revised Statutes (46 App. U.S.C. 91)'' and substitute 
     ``section 60105 of this title''.
       (22) In section 6101, redesignate the second subsection (g) 
     and subsection (h) as subsections (h) and (i), respectively.
       (23) In section 8103(a), strike ``Only'' and substitute 
     ``Except as otherwise provided in this title, only''.
       (24) In section 9307(b)(2)(A), strike ``The'' and 
     substitute ``the''.
       (25) In section 12503(a), in the matter before clause (1), 
     strike ``delegee'' and substitute ``delegate''.
       (26) In section 13102(a), insert ``(26 U.S.C. 9504)'' after 
     ``Internal Revenue Code of 1986''.
       (27) In section 14305(a)--
       (A) in clause (1), strike ``and sections 12106(c) and 
     12108(c)'' and substitute ``of this subtitle and section 
     12116'';
       (B) in clause (5), strike ``section 4283 of the Revised 
     Statutes of the United States (46 App. U.S.C. 183)'' and 
     substitute ``section 30506 of this title'';
       (C) in clause (6), strike ``sections 27 and 27A of the Act 
     of June 5, 1920 (46 App. U.S.C. 883 and 883-1)'' and 
     substitute ``sections 12118 and 12132 of this title''; and
       (D) in clause (7), strike ``Act of July 14, 1956 (46 App. 
     U.S.C. 883a)'' and substitute ``section 12139(b) of this 
     title''.
       (28) In section 31306(a), strike ``section 9 or 37 of the 
     Shipping Act, 1916 (46 App. U.S.C. 808, 835)'' and substitute 
     ``section 56102 or 56103 of this title''.
       (29) In section 31308, strike ``title XI of the Merchant 
     Marine Act, 1936 (46 App. U.S.C. 1271 et seq.)'' and 
     substitute ``chapter 537 of this title''.
       (30) In section 31322--
       (A) in subsection (a)(4)(A), strike ``section 12102(c)'' 
     and substitute ``section 12113(c)'';
       (B) in subsection (a)(4)(E), strike ``under section 
     12102(a)'' and substitute ``for purposes of documentation 
     under section 12103'';
       (C) in subsection (f)(2), strike ``section 12102(c)'' and 
     substitute ``section 12113(c)''.
       (31) In section 31325(b)(3)(B), strike ``section 9 or 37 of 
     the Shipping Act, 1936 (46 App. U.S.C. 808, 835)'' and 
     substitute ``section 56101 or 56102 of this title''.
       (32) In section 31326(b)--
       (A) in clause (1), strike ``title XI of the Merchant Marine 
     Act, 1936 (46 App. U.S.C. 1101 et seq.)'' and substitute 
     ``chapter 537 of this title,''; and
       (B) in clause (2), strike ``title XI of that Act'' and 
     substitute ``chapter 537 of this title''.
       (33) In section 31329--
       (A) in subsection (a)(1), strike ``section 12102'' and 
     substitute ``section 12103''; and
       (B) in subsection (b)--
       (i) in clause (2), strike ``section 902 of the Merchant 
     Marine Act, 1936 (46 App. U.S.C. 1242)'' and substitute 
     ``chapter 563 of this title''; and
       (ii) in clause (3), strike ``sale foreign within the terms 
     of the first proviso of section 27 of the Merchant Marine 
     Act, 1920 (46 App. U.S.C. 883)'' and substitute ``sale to a 
     person not a citizen of the United States under section 12132 
     of this title''.
       (34)(A) Sections 70118 and 70119, as added by section 801 
     of the Coast Guard and Maritime Transportation Act of 2004 
     (Public Law 108-293, 118 Stat. 1078), are redesignated as 
     sections 70117 and 70118, respectively, and moved to appear 
     immediately after section 70116 of title 46, United States 
     Code.
       (B) Sections 70117 and 70118, as added by section 802 of 
     such Act, are redesignated as sections 70120 and 70121, 
     respectively, and moved to appear immediately after section 
     70119 of title 46, United States Code.
       (C) In section 70120(a) (as redesignated by subparagraph 
     (B)), strike ``section 70120'' and substitute ``section 
     70119''.
       (D) In section 70121(a) (as redesignated by subparagraph 
     (B))--
       (i) strike ``section 70120'' and substitute ``section 
     70119''; and
       (ii) strike ``section 4197 of the Revised Statutes of the 
     United States (46 U.S.C. App. 91)'' and substitute ``section 
     60105 of this title''.
       (E) In the analysis of chapter 701, strike the items 
     relating to sections 70117-70119 and substitute the 
     following:

``70117.  Firearms, arrests, and seizure of property.
``70118.  Enforcement by State and local officers.
``70119.  Civil penalty.
``70120.  In rem liability for civil penalties and certain costs.
``70121.  Withholding of clearance.''.

     SEC. 15. CONFORMING AMENDMENTS TO OTHER LAWS.

       (a) Title 10.--Title 10, United States Code, is amended as 
     follows:
       (1) In section 374(b)(4)(A)(iv), strike ``The Maritime Drug 
     Law Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
     substitute ``Chapter 705 of title 46''
       (2) In section 2218(d)(2), strike ``sections 508 and 510 of 
     the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), 
     shall be deposited in the Fund'' and substitute ``sections 
     57101-57104 and chapter 573 of title 46''.
       (3) In section 2350b(g)(2), strike ``section 901(b) of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b))'' and 
     substitute ``section 55305 of title 46''.
       (4) In section 2645--
       (A) in subsection (c), strike ``the second sentence of 
     section 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. 
     App. 1288(a))'' and substitute ``section 53909(b) of title 
     46'';
       (B) in subsection (h)(1), strike ``title XII of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et seq.),'' 
     and substitute ``chapter 539 of title 46''; and
       (C) in subsection (h)(2), strike ``the first sentence of 
     section 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. 
     App. 1288(a))'' and substitute ``section 53909(a) of title 
     46''.
       (5) In section 2664(a)(3), strike ``transferred to the 
     Secretary of Transportation under section 3 of the Maritime 
     Act of 1981 (46 U.S.C. App. 1602)'' and substitute ``of the 
     Secretary of Transportation relating to the Maritime 
     Administration''.
       (6) In section 5985, strike ``section 1304 of the Merchant 
     Marine Act, 1936 (46 U.S.C. App. 1295c),'' and substitute 
     ``chapter 515 of title 46''.
       (7) In section 7721(a), strike ``the Act of March 3, 1925 
     (commonly referred to as the `Public Vessels Act') (46 U.S.C. 
     App. 781-790)'' and substitute ``chapter 311 of title 46''.
       (b) Title 11.--Title 11, United States Code, is amended as 
     follows:
       (1) In section 362(b)--
       (A) in clause (12), strike ``section 207 or title XI of the 
     Merchant Marine Act, 1936'' and substitute ``chapter 537 of 
     title 46 or section 109(h) of title 49''; and
       (B) in clause (13), strike ``section 207 or title XI of the 
     Merchant Marine Act, 1936'' and substitute ``chapter 537 of 
     title 46''.
       (2) In section 1110(a)(3)(A)(ii), strike ``documented 
     vessel (as defined in section 30101(1) of title 46)'' and 
     substitute ``vessel documented under chapter 121 of title 
     46''.
       (c) Title 14.--Sections 821(b) and 823a(b) of title 14, 
     United States Code, are each amended by striking clauses (3)-
     (5) and substituting the following:
       ``(3) Section 30101 of title 46 (popularly known as the 
     Admiralty Extension Act).
       ``(4) Chapter 309 of title 46 (known as the Suits in 
     Admiralty Act).
       ``(5) Chapter 311 of title 46 (known as the Public Vessels 
     Act).''.
       (d) Title 18.--Title 18, United States Code, is amended as 
     follows:
       (1) In section 229F(9)(C), strike ``section 3(b) of the 
     Maritime Drug Enforcement Act, as amended (46 U.S.C., App. 
     sec. 1903(b))'' and substitute ``section 70502(b) of title 
     46, United States Code''.
       (2) In section 507--
       (A) in the first paragraph, strike ``recording, registry, 
     or enrollment of any vessel, in the office of any collector 
     of the customs, or a license to any vessel for carrying on 
     the coasting trade or fisheries of the United States'' and 
     substitute ``documentation of any vessel'';
       (B) in the first paragraph, strike ``collector or other''; 
     and
       (C) in the second paragraph, strike ``license,''.
       (3) In section 924--
       (A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and 
     (k)(1), strike ``the Maritime Drug Law Enforcement Act (46 
     U.S.C. App. 1901 et seq.)'' and substitute ``chapter 705 of 
     title 46''; and
       (B) in subsection (g)(2), strike ``802 et seq.'' and 
     substitute ``801 et seq.''.
       (4) In section 929(a)(2), strike ``the Maritime Drug Law 
     Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
     substitute ``chapter 705 of title 46''.
       (5) In section 965(a), strike ``section 4197 of the Revised 
     Statutes of the United States (46 U.S.C. App. 91)'' and 
     substitute ``section 60105 of title 46''.
       (6) In section 2277(a), strike ``registered, enrolled, or 
     licensed'' and substitute ``documented''.
       (7) In section 3142(e) and (f)(1)(C), strike ``the Maritime 
     Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
     substitute ``chapter 705 of title 46''.
       (e) Internal Revenue Code of 1986.--The Internal Revenue 
     Code of 1986 (26 U.S.C. 1 et seq.) is amended as follows:
       (1) In section 56(c)(2)--
       (A) strike ``section 607 of the Merchant Marine Act, 1936 
     (46 U.S.C. 1177)'' and substitute ``chapter 535 of title 46, 
     United States Code''; and
       (B) in clauses (A) and (B), strike ``such section 607'' 
     substitute ``such chapter 535''.
       (2) In section 140(a)(4), strike ``section 607(d) of the 
     Merchant Marine Act, 1936 (46 U.S.C. 1177)'' and substitute 
     ``section 53507 of title 46, United States Code''.
       (3) In section 543(a)(1)(B), strike ``section 511 or 607 of 
     the Merchant Marine Act, 1936 (46

[[Page H7649]]

     U.S.C. App. 1161 or 1177)'' and substitute ``chapter 533 or 
     535 of title 46, United States Code''.
       (4) In section 1023(2), strike ``section 511 of the 
     Merchant Marine Act, 1936, as amended (46 U.S.C. 1161)'' and 
     substitute ``chapter 533 of title 46, United States Code''.
       (5) In section 1061--
       (A) in clause (1), strike ``section 510 of the Merchant 
     Marine Act, 1936, see subsection (e) of that section, as 
     amended August 4, 1939 (46 U.S.C. App. 1160)'' and substitute 
     ``chapter 573 of title 46, United States Code, see section 
     57307 of title 46'';
       (B) in clause (2), strike ``section 511 of such Act, as 
     amended (46 U.S.C. App. 1161)'' and substitute ``chapter 533 
     of title 46, United States Code''; and
       (C) strike clause (3).
       (6) In section 7518--
       (A) in subsection (a)(1), strike ``section 607 of the 
     Merchant Marine Act, 1936'' and substitute ``chapter 535 of 
     title 46 of the United States Code'';
       (B) in subsections (a)(2) and (c)(1)(A) and (D), strike 
     ``section 607 of the Merchant Marine Act, 1936'' and 
     substitute ``chapter 535 of title 46, United States Code''; 
     and
       (C) in subsection (g)(3)(C)(iii), strike ``Merchant Marine 
     Act of 1936'' and substitute ``Merchant Marine Act, 1936,''.
       (f) Title 28.--Title 28, United States Code, is amended as 
     follows:
       (1) In section 994(h)(1)(B) and (2)(B), strike ``the 
     Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 et 
     seq.)'' and substitute ``chapter 705 of title 46''.
       (2) In section 1605(d), strike ``the Ship Mortgage Act, 
     1920 (46 U.S.C. 911 and following)'' and ``that Act'' and 
     substitute ``section 31301 of title 46'' and ``chapter 313 of 
     title 46'', respectively.
       (3) In section 2342(3)--
       (A) in clause (A), strike ``section 2, 9, 37, or 41 of the 
     Shipping Act, 1916 (46 U.S.C. App. 802, 803, 808, 835, 839, 
     and 841a)'' and substitute ``section 50501, 50502, 56101-
     56104, or 57109 of title 46''; and
       (B) strike clause (B) and substitute the following:
       ``(B) the Federal Maritime Commission issued pursuant to 
     section 305, 41304, 41308, or 41309 or chapter 421 or 441 of 
     title 46;''.
       (4) In section 2680(d), strike ``sections 741-752, 781-790 
     of Title 46,'' and substitute ``chapter 309 or 311 of title 
     46''.
       (g) Title 40.--Title 40, United States Code, is amended as 
     follows:
       (1) In section 548, strike ``the Merchant Marine Act, 1936 
     (46 App. U.S.C. 1101 et seq.),'' and substitute ``part F of 
     subtitle V of title 46''.
       (2) In section 3134(b), strike ``the Merchant Marine Act, 
     1936 (46 App. U.S.C. 1101 et seq.)'' and substitute 
     ``subtitle V of title 46''.
       (h) Title 49.--Title 49, United States Code, is amended as 
     follows:
       (1) In section 5122(c)(1), strike ``Secretary of the 
     Treasury'' and ``section 4197 of the Revised Statutes of the 
     United States (46 App. U.S.C. 91)'' and substitute 
     ``Secretary of Homeland Security'' and ``section 60105 of 
     title 46'', respectively.
       (2) In section 5901(3)(B), strike ``section 3 of the 
     Shipping Act of 1984 (46 App. U.S.C. 1702)'' and substitute 
     ``section 40102 of title 46''.
       (i) Miscellaneous.--Section 5501(a) of the Oceans Act of 
     1992 (Public Law 102-587, 106 Stat. 5084) is amended by 
     adding the following:
       ``(3) The exceptions provided by paragraph (2) shall apply 
     under section 55109 of title 46, United States Code, to the 
     same extent as under former section 1 of the Act of May 28, 
     1906, as amended by paragraph (1).''

     SEC. 16. LEGISLATIVE CONSTRUCTION AND TRANSITIONAL 
                   PROVISIONS.

       (a) In General.--The purpose of this Act is to complete the 
     codification of title 46, United States Code, ``Shipping'', 
     as positive law, in accordance with section 285b(1) of title 
     2, United States Code.
       (b) Conformity With Original Intent.--In the codification 
     of laws encompassed by this Act, the intent is to conform to 
     the understood policy, intent, and purpose of the Congress in 
     the original enactments, with such amendments and corrections 
     as will remove ambiguities, contradictions, and other 
     imperfections both of substance and of form.
       (c) Cutoff Date.--This Act codifies certain laws enacted as 
     of August 31, 2004. Any law enacted after that date that is 
     inconsistent with this Act, including any law purporting to 
     amend or repeal a provision that is repealed by this Act, 
     supersedes this Act to the extent of the inconsistency.
       (d) Original Date of Enactment Unchanged.--For purposes of 
     determining whether one provision of law supersedes another 
     based on enactment later in time, the date of enactment of a 
     provision codified by this Act is deemed to remain unchanged, 
     continuing to be the date of enactment of the underlying 
     provision that is codified.
       (e) References in Other Provisions.--A reference to a 
     provision of law codified by this Act, including a reference 
     in another law or in a rule, regulation, or order, is deemed 
     to refer to the corresponding provision enacted by this Act.
       (f) Savings Provisions.--
       (1) Rules, regulations, and orders.--A rule, regulation, or 
     order in effect under a provision of law codified by this Act 
     continues in effect under the corresponding provision enacted 
     by this Act.
       (2) Actions taken and offenses committed.--An action taken 
     or an offense committed under a provision of law codified by 
     this Act is deemed to have been taken or committed under the 
     corresponding provision enacted by this Act.

     SEC. 17. REPEALS.

       The following laws are repealed, except with respect to 
     rights and duties that matured, penalties that were incurred, 
     or proceedings that were begun before the date of enactment 
     of this Act:

                                                Revised Statutes
----------------------------------------------------------------------------------------------------------------
                                                                               United States Code
                   Revised Statutes Section                    -------------------------------------------------
                                                                         Title                   Section
----------------------------------------------------------------------------------------------------------------
2792..........................................................                  46 App.                      124
4136..........................................................                  46 App.                       14
4173..........................................................                  46 App.                       42
4184..........................................................                  46 App.                       57
4188..........................................................                  46 App.                       59
4197..........................................................                  46 App.                       91
4202..........................................................                  46 App.                       97
4204..........................................................                  46 App.                       98
4206..........................................................                  46 App.                      100
4219..........................................................                  46 App.                      121
4220..........................................................                  46 App.                      122
4221..........................................................                  46 App.                      125
4225..........................................................                  46 App.                      128
4226..........................................................                  46 App.                      129
4227..........................................................                  46 App.                      135
4228..........................................................                  46 App.                      141
4238..........................................................                  46 App.                      721
4239..........................................................                  46 App.                      722
4240..........................................................                  46 App.                      723
4241..........................................................                  46 App.                      724
4281..........................................................                  46 App.                      181
4282..........................................................                  46 App.                      182
4283..........................................................                  46 App.                      183
4283A.........................................................                  46 App.                     183b
4283B.........................................................                  46 App.                     183c
4284..........................................................                  46 App.                      184
4285..........................................................                  46 App.                      185
4286..........................................................                  46 App.                      186
4287..........................................................                  46 App.                      187
4289..........................................................                  46 App.                      188
4309..........................................................                  46 App.                      354
4310..........................................................                  46 App.                      355
4311..........................................................                  46 App.                      251
4320..........................................................                  46 App.                      262
4336..........................................................                  46 App.                      277
4370..........................................................                  46 App.                      316
4373..........................................................                  46 App.                      321
4374..........................................................                  46 App.                      322
4375..........................................................                  46 App.                      323
4376..........................................................                  46 App.                      324
4378..........................................................                  46 App.                      326
4379..........................................................                  46 App.                      327
4380..........................................................                  46 App.                      328
4493..........................................................                  46 App.                      491
----------------------------------------------------------------------------------------------------------------


[[Page H7650]]


                                                Statutes at Large
----------------------------------------------------------------------------------------------------------------
                                                                          Statutes at Large       U.S. Code (46
                                 Chapter or                          --------------------------    App. unless
             Date                Public Law           Section                                       otherwise
                                                                      Volume        Page           specified)
----------------------------------------------------------------------------------------------------------------
             1874
Apr. 18                         110           ......................      18  31..............  336
 
             1878
June 19                         324           ......................      20  175.............  725
 
             1884
June 26                         121           14....................      23  57..............  121
                                ............  18....................      23  57..............  189
 
July 5                          221           3.....................      23  119.............  3
                                ............  8(c)..................  ......  ................  9
 
             1886
June 19                         421           8.....................      24  81..............  289
                                ............  9.....................      24  81..............  320
                                ............  17....................      24  82..............  142
 
             1887
Mar. 3                          339           ......................      24  475.............  143
 
             1892
July 26                         248           1.....................      27  267.............  144
                                ............  2.....................      27  268.............  145
 
             1893
Feb. 13                         105           1.....................      27  445.............  190
                                ............  2.....................      27  445.............  191
                                ............  3.....................      27  445.............  192
                                ............  4.....................      27  445.............  193
                                ............  5.....................      27  446.............  194
                                ............  6.....................      27  446.............  196
                                ............  7.....................      27  446.............  195
                                ............  8.....................      27  446.............  190 nt
 
Oct. 31                         No. 13        ......................      28  13..............  726
 
             1898
Feb. 17                         26            1.....................      30  248.............  290
                                ............  3.....................      30  248.............  291
 
             1900
Mar. 31                         120           1-3...................      31  58..............  163
 
             1906
May 28                          2566          1 (except as may be         34  204.............  292
                                               applicable under
                                               section 5501(a)(2) of
                                               Pub. L. 102-587).
 
             1908
Mar. 24                         96            1.....................      35  46..............  133
                                ............  2.....................      35  46..............  134
 
May 28                          212           5.....................      35  425.............  104
 
             1909
Aug. 5                          6             36....................      36  111.............  121
 
             1910
Mar. 8                          86            ......................      36  234.............  132
 
             1912
Aug. 1                          268           1.....................      37  242.............  727
                                ............  3.....................      37  242.............  729
                                ............  4.....................      37  242.............  730
                                ............  5.....................      37  242.............  731
 
             1913
Oct. 3                          16            IV(J)(1)-(3)..........      38  195.............  19 U.S.C. 128,
                                                                                                 130, 131;
                                                                                                46 App. 146
 
             1915
Mar. 4                          153           20....................      38  1185............  688
 
                                171           ......................      38  1193............  19 U.S.C. 128,
                                                                                                 131;
                                                                                                46 App. 121,
                                                                                                 128, 146
 
             1916
Sept. 7                         451           1.....................      39  728.............  801
                                ............  2(a)-(c)..............      39  729.............  802
                                ............  2(d)..................      39  729.............  803
                                ............  9.....................      39  730.............  808
                                ............  12....................      39  732.............  811
                                ............  34....................      39  738.............  833
                                ............  36....................      39  738.............  834
                                ............  37....................  ......  ................  835
                                ............  38....................  ......  ................  836
                                ............  39....................  ......  ................  837
                                ............  41....................  ......  ................  839
                                ............  46....................  ......  ................  842
 
             1920
Mar. 9                          95            1.....................      41  525.............  741
                                ............  2.....................      41  525.............  742
                                ............  3.....................      41  526.............  743
                                ............  4.....................      41  526.............  744
                                ............  5.....................      41  526.............  745, 745 nt
                                ............  6.....................      41  527.............  746
                                ............  7.....................      41  527.............  747
                                ............  8.....................      41  527.............  748
                                ............  9.....................      41  527.............  749
                                ............  10....................      41  528.............  750
                                ............  11....................      41  528.............  751
                                ............  12....................      41  528.............  752
 
Mar. 30                         111           1.....................      41  537.............  761
                                ............  2.....................      41  537.............  762
                                ............  4.....................      41  537.............  764
                                ............  5.....................      41  537.............  765
                                ............  6.....................      41  537.............  766
                                ............  7.....................      41  538.............  767
                                ............  8.....................      41  538.............  768
 
June 5                          250           1.....................      41  988.............  861
                                ............  6.....................      41  991.............  865
                                ............  7.....................      41  991.............  866
                                ............  8.....................      41  992.............  867
                                ............  9.....................      41  992.............  868
                                ............  10....................      41  992.............  869
                                ............  12....................      41  993.............  871
                                ............  13....................      41  993.............  872
                                ............  17....................      41  994.............  875
                                ............  19....................      41  995.............  876
                                ............  21....................      41  997.............  877
                                ............  27....................      41  999.............  883

[[Page H7651]]

 
                                ............  27A...................  ......  ................  883-1
                                ............  28....................      41  999.............  884
                                ............  36....................      41  1007............  887
                                ............  37....................      41  1008............  888
                                ............  39....................      41  1008............  889
 
             1925
Mar. 3                          428           1.....................      43  1112............  781
                                ............  2.....................      43  1112............  782
                                ............  3.....................      43  1112............  783
                                ............  4.....................      43  1112............  784
                                ............  5.....................      43  1113............  785
                                ............  6.....................      43  1113............  786
                                ............  7.....................      43  1113............  787
                                ............  8.....................      43  1113............  788
                                ............  9.....................      43  1113............  789
                                ............  10....................      43  1113............  790
 
             1928
May 22                          675           1.....................      45  689.............  891
                                ............  202...................      45  690.............  891b
                                ............  203...................      45  690.............  891c
                                ............  703...................      45  698.............  891u
                                ............  704...................      45  698.............  891v
                                ............  705...................      45  698.............  891w
                                ............  706...................      45  698.............  891x
 
             1932
June 30                         314           306...................      47  408.............  804a
 
                                315           ......................      47  420.............  743a, 745
 
             1934
Mar. 26                         90            ......................      48  500.............  1241-1
 
June 28                         523           ......................      48  963.............  48 U.S.C. 1664
 
             1936
June 25                         807           1.....................      49  1922............  738
                                ............  2.....................      49  1922............  738a
                                ............  4.....................      49  1923............  738c
 
June 29                         858           101...................      49  1985............  1101
                                ............  201...................      49  1985............  1111
                                ............  202...................      49  1986............  1112
                                ............  204...................      49  1987............  1114
                                ............  205...................      49  1987............  1115
                                ............  206...................      49  1987............  1116
                                ............  207...................      49  1988............  1117
                                ............  208...................      49  1988............  1118
                                ............  209...................      49  1988............  1119
                                ............  210...................      49  1989............  1120
                                ............  211...................      49  1989............  1121
                                ............  212...................      49  1990............  1122
                                ............  212(A)................  ......  ................  1122a
                                ............  212(B)................  ......  ................  1122b
                                ............  213...................      49  1991............  1123
                                ............  214...................      49  1991............  1124
                                ............  215...................  ......  ................  1125
                                ............  302...................  ......  ................  1132
                                ............  508...................      49  2000............  1158
                                ............  510...................  ......  ................  1160
                                ............  511 (added by Act Oct.  ......  ................  1161
                                               10, 1940).
                                ............  607...................      49  2005............  1177
                                ............  701...................      49  2008............  1191
                                ............  702...................      49  2008............  1192
                                ............  703...................      49  2008............  1193
                                ............  704...................      49  2008............  1194
                                ............  705...................      49  2009............  1195
                                ............  706...................      49  2009............  1196
                                ............  707...................      49  2009............  1197
                                ............  708...................      49  2009............  1198
                                ............  709...................      49  2010............  1199
                                ............  710...................      49  2010............  1200
                                ............  711...................      49  2010............  1201
                                ............  712...................      49  2010............  1202
                                ............  713...................      49  2010............  1203
                                ............  714...................      49  2011............  1204
                                ............  715...................  ......  ................  1205
                                ............  805...................      49  2012............  1223
                                ............  806(b)-(d)............      49  2014............  1228
                                ............  808...................      49  2015............  1226
                                ............  809(b)................  ......  ................  1213
                                ............  810...................      49  2015............  1227
                                ............  901...................      49  2015............  1241
                                ............  901a..................  ......  ................  1241e
                                ............  901b..................  ......  ................  1241f
                                ............  901c..................  ......  ................  1241g
                                ............  901d..................  ......  ................  1241h
                                ............  901e..................  ......  ................  1241i
                                ............  901f..................  ......  ................  1241j
                                ............  901g..................  ......  ................  1241k
                                ............  901h..................  ......  ................  1241l
                                ............  901i..................  ......  ................  1241m
                                ............  901j..................  ......  ................  1241n
                                ............  901k..................  ......  ................  1241o
                                ............  902...................      49  2015............  1242
                                ............  905...................      49  2016............  1244
                                ............  906 (1st sentence)....      49  2016............  1245
                                ............  908...................  ......  ................  1247
                                ............  1101..................  ......  ................  1271
                                ............  1102..................  ......  ................  1272
                                ............  1103..................  ......  ................  1273
                                ............  1104A.................  ......  ................  1274
                                ............  1104B.................  ......  ................  1274a
                                ............  1105..................  ......  ................  1275
                                ............  1108..................  ......  ................  1279a
                                ............  1109..................  ......  ................  1279b
                                ............  1110..................  ......  ................  1279c
                                ............  1111..................  ......  ................  1279d
                                ............  1111..................  ......  ................  1279f
                                ............  1112..................  ......  ................  1279e
                                ............  1112..................  ......  ................  1279g
                                ............  1201..................  ......  ................  1281

[[Page H7652]]

 
                                ............  1202..................  ......  ................  1282
                                ............  1203..................  ......  ................  1283
                                ............  1204..................  ......  ................  1284
                                ............  1205..................  ......  ................  1285
                                ............  1206..................  ......  ................  1286
                                ............  1207..................  ......  ................  1287
                                ............  1208..................  ......  ................  1288
                                ............  1209..................  ......  ................  1289
                                ............  1210..................  ......  ................  1290
                                ............  1211..................  ......  ................  1291
                                ............  1212..................  ......  ................  1292
                                ............  1213..................  ......  ................  1293
                                ............  1214..................  ......  ................  1294
                                ............  1301..................  ......  ................  1295
                                ............  1302..................  ......  ................  1295a
                                ............  1303..................  ......  ................  1295b
                                ............  1304..................  ......  ................  1295c
                                ............  1305..................  ......  ................  1295d
                                ............  1306..................  ......  ................  1295e
                                ............  1307..................  ......  ................  1295f
                                ............  1308..................  ......  ................  1295g
 
             1938
June 25                         681           1st proviso on p. 1119      52  1119............  1111a
 
             1940
June 29                         442           ......................      54  684.............  1242a
 
             1941
Feb. 6                          5             4.....................      55  6...............  1125a
 
             1947
Mar. 22                         20            proviso under heading       61  18..............  1116a
                                               ``Independent
                                               Offices''.
 
             1948
June 19                         526           ......................      62  496.............  740
 
June 30                         775           101 (last proviso on        62  1199............  864a
                                               p. 1199).
 
             1949
June 29                         281           1 (proviso)...........      63  349.............  864b
 
             1950
Dec. 27                         1155          1, 2..................      64  1120............  3 nt prec.
 
             1951
June 2                          121           pars. under heading         65  59..............  1241a
                                               ``Vessel Operations
                                               Revolving Fund''.
 
Nov. 1                          664           par. under heading          65  746.............  1288a
                                               ``War-Risk Insurance
                                               Revolving Fund''.
 
             1956
June 20                         415           101 (par. beginning         70  319.............  1241b,
                                               with ``Vessel                                    1241b nt
                                               operations revolving
                                               fund'').
 
July 14                         600           2.....................      70  544.............  883a
                                ............  3.....................      70  544.............  883b
 
Aug. 1                          846           ......................      70  897.............  1241c
 
             1957
June 13                         85-52         101 (1st proviso on p.      71  73..............  1177a
                                               73).
 
             1958
June 25                         85-469        101 (par. under             72  231.............  1280
                                               heading ``Federal
                                               Ship Mortgage
                                               Insurance Fund'').
 
             1960
June 12                         86-518        9.....................      74  217.............  1125 nt
 
             1961
Sept. 13                        87-220        2.....................      75  493.............  251a
                                ............  3.....................      75  493.............  251b
 
             1965
June 30                         89-56         ......................      79  195.............  1111 nt
 
July 30                         89-99         1.....................      79  424.............  441
                                ............  3.....................      79  424.............  443
                                ............  4.....................      79  424.............  444
 
             1966
Nov. 6                          89-777        2.....................      80  1356............  817d
                                ............  3.....................      80  1357............  817e
 
             1976
July 14                         94-361        603...................      90  929.............  1126-1
 
Oct. 4                          94-455        807...................      90  1606............  1177-1
 
             1977
Dec. 13                         95-208        1.....................      91  1475............  1501 nt
                                ............  2.....................      91  1475............  1501
                                ............  3.....................      91  1476............  1502
                                ............  4.....................      91  1476............  1503
                                ............  5.....................      91  1477............  1504
                                ............  6.....................      91  1478............  1505
                                ............  7.....................      91  1479............  1506
                                ............  8.....................      91  1479............  1507
 
             1980
Sept. 15                        96-350        1.....................      94  1159............  1901
                                ............  2.....................      94  1160............  1902
                                ............  3.....................      94  1160............  1903
                                ............  4.....................      94  1160............  1904
 
Oct. 6                          96-382        1.....................      94  1525............  763a
 
Oct. 7                          96-387        5.....................      94  1546............  1121-1
 
             1981
Aug. 6                          97-31         2.....................      95  151.............  1601
                                ............  3.....................      95  151.............  1602
                                ............  4.....................      95  151.............  1603
                                ............  5.....................      95  151.............  1604
                                ............  6.....................      95  151.............  1605
                                ............  8.....................      95  152.............  1607
                                ............  9.....................      95  152.............  1608
 
             1982
Oct. 15                         97-322        201...................      96  1588............  446 nt
                                ............  204...................      96  1589............  446
                                ............  205...................      96  1589............  446a
                                ............  206...................      96  1590............  446b
                                ............  207...................      96  1590............  446c
 
             1984
Mar. 20                         98-237        1.....................      98  67..............  1701 nt
                                ............  2.....................      98  67..............  1701
                                ............  3.....................      98  67..............  1702

[[Page H7653]]

 
                                ............  4.....................      98  70..............  1703
                                ............  5.....................      98  70..............  1704
                                ............  6.....................      98  72..............  1705
                                ............  7.....................      98  73..............  1706
                                ............  8.....................      98  74..............  1707
                                ............  9.....................      98  76..............  1708
                                ............  10....................      98  77..............  1709
                                ............  11....................      98  80..............  1710
                                ............  12....................      98  81..............  1711
                                ............  13....................      98  82..............  1712
                                ............  14....................      98  83..............  1713
                                ............  15....................      98  84..............  1714
                                ............  16....................      98  84..............  1715
                                ............  17....................      98  84..............  1716
                                ............  19....................      98  87..............  1718
                                ............  20(e).................      98  90..............  1719
 
Oct. 5                          98-454        302...................      98  1734............  808a
 
Oct. 30                         98-563        ......................      98  2916............  289c
 
             1985
Dec. 23                         99-198        1141..................      99  1490............  1241d
                                ............  1143..................      99  1496............  1241p
 
             1986
Aug. 27                         99-399        902...................     100  889.............  1801
                                ............  905...................     100  890.............  1802
                                ............  907...................     100  891.............  1803
                                ............  908...................     100  891.............  1804
                                ............  909...................     100  892.............  1805
                                ............  910...................     100  892.............  1806
                                ............  911...................     100  892.............  1807
                                ............  912...................     100  892.............  1808
                                ............  913...................     100  892.............  1809
 
             1987
Dec. 22                         100-202       101(a) [title V (par.      101  1329,...........  1241h nt
                                               under heading ``Ocean          1329-27.........
                                               Freight
                                               Differential'')].
                                ............  101(a) [title V (4th       101  1329,...........  1295c-1
                                               proviso on p. 1329-            1329-28.........
                                               28)].
 
             1988
May 30                          100-324       1.....................     102  576.............  2001 nt
                                ............  2.....................     102  576.............  2001
                                ............  3.....................     102  576.............  2002
                                ............  4.....................     102  576.............  2003
                                ............  5.....................     102  576.............  2004
                                ............  6.....................     102  577.............  2005
                                ............  7.....................     102  577.............  2006
                                ............  8.....................     102  577.............  2007
 
Aug. 23                         100-418       10002.................     102  1570............  1710a
 
             1989
Oct. 13                         101-115       4.....................     103  692.............  1295c nt
                                ............  8.....................     103  694.............  1121-2
 
             1990
Nov. 28                         101-624       1521..................     104  3665............  1241q
                                ............  1522..................     104  3665............  1241r
                                ............  1523..................     104  3666............  1241s
                                ............  1524..................     104  3667............  1241t
                                ............  1526..................     104  3668............  1241u
                                ............  1527..................     104  3668............  1241v
 
             1993
Nov. 30                         103-160       1358..................     107  1816............  1280a
 
             1996
Oct. 19                         104-324       1117..................     110  3973............  46 U.S.C. 12101
                                                                                                 nt
                                ............  1120(f)...............     110  3978............  883 nt
 
             1998
Oct. 14                         105-258       401...................     112  1916............  1273a
 
Oct. 21                         105-277       203(b)-(e)............     112  2681-619........  46 U.S.C. 12102
                                                                                                 nt
 
Nov. 13                         105-383       502-504...............     112  3445............  46 U.S.C. 12106
                                                                                                 nt
 
             2000
Oct. 30                         106-398       1 [Sec.  3506]........     114  1654,...........  1118 nt
                                                                              1654A-494.......
 
             2002
Nov. 25                         107-295       403...................     116  2114............  46 U.S.C. 12119
                                                                                                 nt
                                ............  404...................     116  2114............  316a
 
             2003
Nov. 24                         108-136       3527..................     117  1802............  1280b
----------------------------------------------------------------------------------------------------------------


                                              Reorganization Plans
----------------------------------------------------------------------------------------------------------------
                                                                                     Statutes at Large
   Year              Plan No.                        Section             ---------------------------------------
                                                                            Volume               Page
----------------------------------------------------------------------------------------------------------------
     1949  6..........................  ................................         63  1069
     1950  21.........................  201, 203, 204...................         64  1276
     1961  7..........................  101-105, 201, 301, 302..........         75  840, 842
----------------------------------------------------------------------------------------------------------------

     SEC. 18. EFFECTIVE DATE.

       This Act shall take effect on October 1, 2004, or the date 
     of enactment of this Act, whichever is later.

  The SPEAKER pro tempore (Mr. Issa). Pursuant to the rule, the 
gentleman from Wisconsin (Mr. Sensenbrenner) and the gentleman from 
California (Mr. Schiff) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 4319, the bill 
currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, this bill, the Title 46 Codification Act of 2004, 
completes the codification of title 46, United States

[[Page H7654]]

Code, relating to shipping as positive law. The gentleman from Michigan 
(Mr. Conyers), ranking member, and I jointly introduced this 
legislation on May 10, 2004.
  The bill was prepared by the Office of the Law Revision Counsel as a 
part of the program required by 2 U.S.C., section 285(b), to prepare 
and submit to the Committee on the Judiciary, one title at a time, a 
complete complication, restatement, and revision of the general and 
permanent laws of the United States. This bill makes no substantive 
change in existing law. Rather, the bill removes ambiguities, 
contradictions, and other imperfections from existing law and it 
repeals obsolete, superfluous, and superseded provisions.
  After introduction, the bill was circulated for comment to interested 
parties, including committees of the Congress and agencies of the 
government. All comments were to be submitted no later than 45 days 
after the bill was introduced. The Federal Maritime Commission and the 
Department of Transportation provided extensive comments on the bill. 
Several other agencies and departments of the government also provided 
comments.
  The Office of the Law Revision Counsel reviewed and considered all 
comments, contacting the interested parties to resolve outstanding 
questions. Some comments proposing changes to improve the organization 
and clarity were incorporated in the restatement. Other comments, 
either suggesting substantive changes to existing law or expressing 
opposition to the substance of existing law, could not be incorporated 
in the restatement. This bill makes no substantive change in existing 
law and is not intended to do so. That is not the function of Law 
Revision Counsel bills. They reorganize and clean up the law and do not 
change the substance. Thus, Members should understand that because of 
the nature of this bill, supporting it does not imply support of the 
underlying provisions that are being reorganized and cleaned up.
  At committee I offered a substitute amendment prepared by the Office 
of the Law Revision Counsel which incorporated additional changes to 
the Code which were recommended as a result of the review and comment 
process. That is the text that is before us today. The Law Revision 
Counsel has indicated that he is satisfied that the substitute text 
makes no substantive change to existing law and that no additional cost 
to the government would be incurred as a result of the enactment of 
H.R. 4319.
  I would like to express the committee's appreciation for the work of 
the Law Revision Counsel and his staff on this bill. I urge all Members 
to support this legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SCHIFF. Mr. Speaker, I yield myself such time as I may consume.
  Today I rise in support of H.R. 4319, the Title 46 Codification Act 
of 2004. This bill, which is sponsored by the chairman and ranking 
member of the Committee on the Judiciary, enacts into positive law 
title 46 of the U.S. Code, entitled ``shipping.'' In addition H.R. 4319 
also sets forth organizational and administrative provisions regarding 
the Federal Maritime Commission.
  Title 46 of the U.S. Code has been partially codified and enacted by 
Congress into law. The partial revision, as it currently exists, was 
begun in 1983. However, while certain laws concerning marine safety and 
maritime liability were codified, overall revision of title 46 was not 
completed. Specifically, the extensive portions of title 46 that have 
not been codified appear as an appendix to the title, but much of the 
appendix consists of numerous public laws that have been enacted over 
the last century with little attention to the organization of maritime 
law as a single body of law. As a result, the current format of title 
46 is disjointed, confusing, and often without apparent logic.
  This legislation is necessary largely because of the many laws that 
comprise the appendix date back to the late 1800s and early 1900s and 
are written in language that is archaic and difficult to understand. 
There is also a significant amount of redundancy and obsolete material 
within the appendix. This bill would eliminate those redundancies, 
obsolete provisions, and unnecessary archaic verbiage. Overall, H.R. 
4319 makes significant improvements to the organization, accuracy, and 
clarity of title 46. I urge my colleagues to vote ``yes'' on this 
legislation.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 
4319, a piece of legislation introduced by Chairman Sensenbrenner and 
Ranking Member Conyers to complete the codification of title 46 of the 
United States Code.
  Codification of this legislation is important because it integrates 
the myriad of Federal, State, local and private law enforcement 
agencies overseeing the security of the international borders at our 
seaports. Furthermore, it authorizes more security officers, more 
screening equipment, and the building of important security 
infrastructure at seaports.
  U.S. seaports--especially high volume ports such as the Port of 
Houston with major multimodal hubs--are especially vulnerable to 
terrorist attacks because we do not have security mechanisms in place 
between modes, for example the interface between aircraft and ship. We 
must spend wisely to improve personnel and technology as are called for 
in the Secure COAST Act.
  Terrorists could cause mass casualties and serious damage to the 
economy if a weapon of mass destruction (WMD) is detonated in a 
container or if a large passenger vessel is attacked. Ports serve as 
America's gateways to the global economy. The Nation's economic 
prosperity rests on the ability of containerized and bulk cargo to 
arrive at their destination ports unimpeded to support the ``just in 
time'' delivery system that underpins the manufacturing and retail 
sectors. In addition, a large majority of America's energy sources 
arrive in large oil and gas tankers, which are prime targets for the 
terrorists.
  Recent reports state that Al-Qaida may be planning a maritime 
terrorist attack. The Department of Homeland Security has several 
initiatives dedicated to preventing terrorists from attacking America's 
ports. Despite these efforts, many security gaps remain. That is why I 
have joined my Democratic colleagues in co-sponsoring and introducing 
the secure Containers from Overseas And Seaports from Terrorism Act--or 
Secure COAST Act. This new proposal would supplement the Maritime 
Security Act, which H.R. 4319 codifies.
  Seven million containers arrive at U.S. seaports, many times sealed 
with only a padlock or lead tag, making them vulnerable to tampering. 
There are currently no sealing standards for containers or a process to 
verify that seals have not been disturbed. The Secure COAST Act would 
require DHS to develop sealing standards for containers and a 
verification process to ensure containers have not been tampered with.
  Currently, only two seaports in the entire country have the ability 
to screen for nuclear material entering our country. One of these 
ports--the Port of Norfolk--had to purchase the portal monitor itself.
  The Coast Guard estimates that ports will need to spend $1.1 billion 
over the next year to comply with new security regulations put in place 
by the Bush administration, but the president has requested only $46 
million for grant funding since 9/11.
  The U.S. Coast Guard fleet is the third oldest naval fleet in the 
world and its force size is comparable to the manpower level in 1966. 
We must authorize and implement provisions to supplement H.R. 4319 to 
accelerate the completion of the Coast Guard's Deepwater program to 
provide new ships to the fleet from 22 to 10 years and authorize an 
end-strength to 50,000 people, almost a 25 percent increase from 
current levels. It is time that the proper funding and appropriate 
resources are allocated for this vital mission to truly protect the 
American public.
  I support this legislation, H.R. 4319, and I urge my colleagues to do 
the same.
  Mr. SCHIFF. Mr. Speaker, I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Sensenbrenner) that the House suspend the 
rules and pass the bill, H.R. 4319, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________