[Congressional Record (Bound Edition), Volume 147 (2001), Part 1]
[Senate]
[Page 545]
[From the U.S. Government Publishing Office, www.gpo.gov]



 SENATE RESOLUTION 11--EXPRESSING THE SENSE OF THE SENATE REAFFIRMING 
            THE CARGO PREFERENCE POLICY OF THE UNITED STATES

  Mr. INOUYE submitted the following resolution; which was referred to 
the committee on Commerce, Science, and Transportation:

                               S. Res. 11

       Whereas the maritime policy of the United States expressly 
     provides that the United States shall have a merchant marine 
     sufficient to carry a substantial portion of the 
     international waterborne commerce of the United States;
       Whereas the maritime policy of the United States expressly 
     provides that the United States shall have a merchant marine 
     sufficient to serve as a fourth arm of defense in time of war 
     and national emergency;
       Whereas the Federal Government has expressly recognized the 
     vital role of the United States merchant marine during 
     Operation Desert Shield and Operation Desert Storm;
       Whereas cargo reservation programs of Federal agencies are 
     intended to support the privately owned and operated United 
     States-flag merchant marine by requiring a certain percentage 
     of government-impelled cargo to be carried on United States-
     flag vessels;
       Whereas when Congress enacted the cargo reservation laws, 
     Congress contemplated that Federal agencies would incur 
     higher program costs to use the United States-flag vessels 
     required under those laws;
       Whereas section 2631 of title 10, United States Code, 
     requires that all United States military cargo be carried on 
     United States-flag vessels;
       Whereas Federal law requires that cargo purchased with loan 
     funds and guarantees from the Export-Import Bank of the 
     United States established under section 2 of the Export-
     Import Bank Act of 1945 (12 U.S.C. 635), be carried on United 
     States-flag vessels;
       Whereas section 901(b) of the Merchant Marine Act, 1936 (46 
     U.S.C. App. 1241(b)), requires that at least 50 percent of 
     the gross tonnage of ocean-borne cargo generated directly or 
     indirectly by the Federal Government be carried on United 
     States-flag vessels, and section 901b of that Act (46 U.S.C. 
     App. 1241f) requires that, in the case of such cargoes of 
     certain agricultural commodities that are the subject of an 
     export activity of the Commodity Credit Corporation or the 
     Secretary of Agriculture, an additional 25 percent of the 
     gross tonnage be carried on United States-flag vessels;
       Whereas cargo reservation programs are very important for 
     the shipowners of the United States, which require 
     compensation for maintaining a United States-flag fleet;
       Whereas the United States-flag vessels that carry reserved 
     cargo provide high-quality jobs for seafarers of the United 
     States;
       Whereas, according to the most recent statistics from the 
     Maritime Administration, in 1997, cargo reservation programs 
     generated $900,000,000 in revenue to the United States-flag 
     fleet and accounted for one-third of all revenue from United 
     States-flag foreign trade cargo;
       Whereas the Maritime Administration has indicated that the 
     total volume of cargoes moving under the programs subject to 
     the cargo reservation laws is declining and will continue to 
     decline;
       Whereas, in 1970, Congress found that the degree of 
     compliance by Federal agencies with the requirements of the 
     cargo reservation laws was chaotic and uneven, and that it 
     varied from agency to agency;
       Whereas, to ensure maximum compliance by all agencies with 
     Federal cargo reservation laws, Congress enacted the Merchant 
     Marine Act of 1970 (84 Stat. 1018), amending the Merchant 
     Marine Act, 1936, to centralize monitoring and compliance 
     authority for all cargo reservation programs in the Maritime 
     Administration;
       Whereas, notwithstanding section 901(b) of the Merchant 
     Marine Act, 1936 (46 U.S.C. App. 1241(b)), and the purpose 
     and policy of the cargo reservation programs, compliance by 
     Federal agencies with Federal cargo reservation laws 
     continues to be inadequate;
       Whereas the Maritime Administrator cited the limited 
     enforcement powers of the Maritime Administration with 
     respect to Federal agencies that fail to comply with section 
     901(b) of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1241(b)) and other Federal cargo reservation laws; and
       Whereas the Maritime Administrator recommended that 
     Congress grant the Maritime Administration the authority to 
     settle any cargo reservation disputes that may arise between 
     a ship operator and a Federal agency: Now, therefore, be it
       Resolved, That it is the sense of the Senate that--
       (1) each Federal agency should administer programs of the 
     Federal agency that are subject to the cargo reservation laws 
     (including regulations of the Maritime Administration) to 
     ensure that the programs are in compliance with the intent 
     and purpose of the cargo reservation laws; and
       (2) the Maritime Administrator should--
       (A) closely and strictly monitor any cargo that is subject 
     to the cargo reservation laws; and
       (B) provide such directions and decisions to Federal 
     agencies as will ensure maximum compliance with the cargo 
     preference laws.

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