[Senate Report 106-345]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
 2d Session                      SENATE                          106-345
_______________________________________________________________________

                                     

                                                       Calendar No. 686


 
    MARITIME ADMINISTRATION AUTHORIZATION ACT FOR FISCAL YEAR 2001

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 2487







                 July 17, 2000.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred sixth congress
                             second session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA SNOWE, Maine                 JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                       Mark Buse, Staff Director
                   Ann H. Choiniere, General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                Gregg Elias, Democratic General Counsel


                                                       Calendar No. 686
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-345

======================================================================




     MARITIME ADMINISTRATION AUTHORIZATION ACT FOR FISCAL YEAR 2001

                                _______
                                

                 July 17, 2000.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 2487]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2487) ``A bill to authorize 
appropriations for Fiscal Year 2001 for certain maritime 
programs of the Department of Transportation'', having 
considered the same, reports favorably thereon with an 
amendment (in the nature of a substitute) and recommends that 
the bill (as amended) do pass.

                          Purpose of the Bill

  The bill as reported by the Committee authorizes 
appropriations for fiscal year (FY) 2001 for the Maritime 
Administration (MarAd); amends Title IX of the Merchant Marine 
Act of 1936 to eliminate the three-year period bulk or 
breakbulk vessels newly registered under the U.S.-flag must 
wait in order to carry government-impelled cargo for a one year 
period; amends the Merchant Marine Act of 1936 to allow the 
Secretary to scrap obsolete vessels in both domestic and 
international markets; conveys ownership of the National 
Defense Reserve Fleet Vessel, Glacier, to the Glacier Society 
for use as museum; requires the Maritime Administration to 
including the source and intended use of all funding in reports 
to Congress; amends Public Law 101-115 to recognize National 
Maritime Enhancement Institutes as if they were University 
Transportation Centers for purposes of research awards; and 
requires the Secretary of Transportation to review the funding 
of maritime research in relation to other modes of 
transportation.

                          Background and Needs

  MarAd administers various U.S. merchant marine support 
programs within the Department of Transportation (DOT). MarAd 
is composed of approximately 970 employees--(including Ready 
Reserve Force (RRF) and U.S. Merchant Marine Academy (USMMA). 
MarAd programs include Operating-Differential Subsidy (ODS), 
Maritime Security Fleet Program (MSP), Title XI guaranteed loan 
program, various cargo preference programs, maintenance of the 
RRF and National Defense Reserve Fleet (NDRF), and operation of 
the U.S. Merchant Marine Academy (USMMA) in Kings Point, NY.
  The committee remains concerned about the appalling condition 
of physical plant and infrastructure at USMMA. Further, the 
committee is troubled by the lack of action in completing a 
facilities master plan that would prioritize repairs and 
improvements. Absent long term identification of facility needs 
it is difficult to assess funding requirements. Additionally, 
the Committee urges MarAd to carefully evaluate the needs of 
all state maritime school ships with regard to repair and 
maintenance and make available, within applicable procedures 
and guidelines, funds to meet those needs.
  MarAd's annual discretionary appropriation does not include 
ODS contract authority costs; permanent, indefinite 
appropriations for cargo preference costs; RRF/NDRF maintenance 
funding; or MSP funding. The Committee is concerned that these 
programs have a large impact on the overall management and 
performance of MarAd and is seeking to require the reporting of 
all funding for these programs and any other programs 
administered by MarAd in annual reporting and budget 
submissions.
  During hearings on the bill, the Committee heard testimony 
regarding the default of a Title XI loan guarantee and the 
difficulties faced by MarAd in trying to minimize the loss to 
the federal government. The Committee recommends that MarAd 
evaluate carefully all actions it may undertake with regards to 
Title XI loan guarantee defaults and act to ensure that loss to 
the federal government is minimized.
  Under current law, vessels built or reconstructed in a 
foreign shipyard must be under U.S. registry for at least three 
years before being eligible to carry cargo under the Cargo 
Preference Act of 1954. The same limitation does not apply to 
vessels that transport military cargoes or Export-Import Bank 
cargoes reserved to U.S.-flag vessels under the Cargo 
Preference Act of 1904 or Public Resolution 17, respectively.
  The Merchant Marine Act of 1936 (46 U.S.C. App. 1101) 
mandates that the United States have sufficient vessels to 
carry a ``substantial portion'' of all preference cargo (75 
percent of government impelled food aid cargo). No dry-bulk 
vessels for our preference trades have been built in a U.S. 
shipyard since the federal subsidy for ship construction (CDS) 
effectively ended in 1981.
  The Committee remains concerned about the lack of bulk ship 
construction in U.S. yards and the low charter rates in our 
non-preference international dry bulk trades. The Committee 
believes it is unrealistic to expect that sufficient U.S.-flag 
dry bulk vessels to meet the demand of our preference trades 
will be constructed in U.S. shipyards at any time in the 
foreseeable future.
  Further, the Committee believes that while not ideal, this 
one-year relaxation of the three-year waiting requirement is 
the best way to ensure that the U.S.-flag dry bulk fleet is of 
sufficient size/number to carry a ``substantial portion'' of 
our preference cargo without any long-term economic 
disadvantage to U.S. shipyards.
  The Committee has diverse views on various Jones Act issues, 
but all agree that this measure does not affect in any way the 
U.S.-build requirement contained in the Jones Act. Under every 
major merchant marine act, Congress has recognized that the 
foreign trades, where the competition operates foreign-built 
and government subsidized vessels, should be distinguished from 
the domestic trades, where the competition operates U.S.-built 
vessels. Moreover, neither the previous enactment of section 
615 of the Merchant Marine Act of 1936, nor the 1997-enacted 
Maritime Security Program, nor other foreign trade foreign-
build permissions have had any spill-over effect on the Jones 
Act because Jones Act issues were not addressed in those 
instances. The Committee's action in reporting S. 2487, 
therefore, will have no precedential effect on the Committee's 
future consideration of Jones Act issues.
  The Committee has again chosen to limit the waiver of the 
three-year waiting period to one year in order to preserve 
building opportunities over the long term for U.S. shipyards, 
should the market for construction of new U.S.-built dry bulk 
ships become competitive at some future time. In the meantime, 
the Committee has carefully crafted section 3 to enhance job 
opportunities for U.S. shipbuilders in the near term. The 
Committee's bill explicitly provides that non-emergency 
shipyard repairs and other shipyard work necessary to conform 
vessels to U.S.-flag standards must be performed in a shipyard 
located in the United States. Such shipyard repairs and 
conforming shipyard work will create employment opportunities 
in domestic yards that otherwise would not exist.
  The Committee's decision to relax temporarily the three year 
waiting period for new foreign-built vessels to become eligible 
to carry cargoes under the Cargo Preference Act of 1954 will 
create additional seagoing billets for U.S. merchant mariners. 
The acquisition of new, modern dry bulk vessels will 
substantially improve the efficiency of the U.S.-flag fleet 
dedicated to the food-aid trade, and result in significant 
reductions in shipping costs and subsequent substantial savings 
to U.S. taxpayers. With major savings in transportation costs, 
appropriations for food-aid programs will purchase more aid, 
more U.S. farm produce will be delivered, and increased food-
aid relief will be possible for the same investment of federal 
dollars.

                          Legislative History

  S. 2487 was introduced in the Senate on May 1, 2000 by 
Senator McCain. The bill is cosponsored by Senators Hollings 
and Inouye. A hearing was held on the MarAd authorization on 
May 16, 2000. In open executive session on June 15, 2000, the 
Committee considered S. 2487, and ordered the legislation 
reported favorably without objection and with an amendment in 
the nature of a substitute by Senators McCain and Hollings. The 
amendment in the nature of a substitute conveys ownership of 
the National Defense Reserve Fleet Vessel, Glacier, to the 
Glacier Society for use as a museum; requires the Maritime 
Administration to include the source and intended use of all 
funding in reports to Congress; and requires the Secretary of 
Transportation to review the funding of maritime research in 
relation to other modes of transportation. The Committee also 
approved by voice vote an amendment offered by Senator Lott to 
increase the authorization of funds for the Title XI loan 
guarantee program to $50 million. The House Department of 
Defense Authorization bill (H.R. 4205) includes provisions 
similar or identical to S. 2487, as reported, which are within 
the jurisdiction of the Committee. The Committee anticipates 
the Senate Armed Services Committee will endorse the provisions 
of S. 2487, as reported, as the Senate position on the 
corresponding provisions in the House and Senate Department of 
Defense Authorization legislation during the conference with 
the House of Representatives on that legislation, and looks 
forward to working with the Senate Armed Services Committee to 
ensure the inclusion of S. 2487.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 28, 2000.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2487, the Maritime 
Administration Authorization Act for Fiscal Year 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2487--Maritime Administration Authorization Act for Fiscal Year 2001

    Summary: Assuming appropriation of the amounts authorized 
by S. 2487, CBO estimates that the federal government would 
spend about $80 million, mostly over the next year, to carry 
out ongoing maritime programs. The bill would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply. S. 2487 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA) and would impose no costs on state, local, or tribal 
governments.
    S. 2487 would authorize the appropriation of $80 million 
for operation and training activities of the Maritime 
Administration (MARAD) during fiscal year 2001. The bill also 
would authorize $54 million for fiscal year 2000 loan 
guarantees and related administrative expenses, as already 
authorized under the Merchant Marine Act of 1936. Section 7 of 
the bill would direct MARAD to conduct a study of maritime 
research and development. The study would examine, among other 
funding issues, the relative amount of federal funding 
historically provided to maritime programs as compared to those 
of other modes of transportation. For the purpose of carrying 
out this study over the next nine months, the bill would 
authorize the appropriation of $100,000. Other provisions of 
the bill, most of which would require MARAD to complete various 
studies and reports, would have no significant effect on the 
federal budget.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of the bill is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation). For this estimate, CBO assumes that the 
entire amount authorized for MARAD operation and training 
activities for fiscal year 2001 will be appropriated for that 
year. The estimate of outlays is based on historical spending 
patterns for MARAD. Because appropriations for maritime loan 
guarantees and related administrative costs are already 
authorized under existing law, the budgetary effects of S. 2487 
would be limited to the $80 million of authorized expenditures 
for MARAD operations and training programs and the $100,000 for 
a new study.

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

MARAD Spending Under Current Law:
    Budget Authority \1\..................................       73        0        0        0        0        0
    Estimated Outlays.....................................       82       11        4        0        0        0
Proposed Changes:
    Authorization Level \2\...............................        0       80        0        0        0        0
    Estimated Outlays.....................................        0       68        8        4        0        0
MARAD Spending Under S. 2487:
    Authorization Level \1\...............................       73       80        0        0        0        0
    Estimated Outlays.....................................       82       79       12        4        0        0
----------------------------------------------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year.
\2\ No amounts are included as proposed changes for loan guarantee subsidies or administrative costs because
  those amounts are already authorized under current law.

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Cost: Deborah Reis. Impact on 
State, Local, and Tribal Governments: Victoria Heid Hall. 
Impact on the Private Sector: Natalie Tawil.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:
    Because S. 2487 does not create any new programs, the 
legislation will have no additional regulatory impact, and will 
result in no additional reporting requirements. While S. 2487 
does not create any new programs, the legislation will require 
MarAd to report on the source and intended use of all funding 
under its administration. The legislation will have no further 
effect on the number or types of individuals and businesses 
regulated, the economic impact of such regulation, the personal 
privacy of affected individuals, or the paperwork required from 
such individuals and businesses.

                      Summary of Major Provisions

  The bill authorizes appropriations for the Maritime 
Administration for fiscal year 2000 and covers two appropriated 
accounts: (1) operations and training; and (2) the shipbuilding 
loan guarantee program authorized by Title XI of the Merchant 
Marine Act of 1936.
  The bill provides $80.24 million for operations and training 
programs including $37.236 million, an increase of $3.292 
million, for deferred capital maintenance at the U.S. Merchant 
Marine Academy. The Committee is concerned that the physical 
condition of the Academy poses a health and safety risk to 
students and faculty, and recommends that MarAd move 
expeditiously to address the deterioration of the property. In 
addition, $50 million is for the costs, as defined in section 
502 of the Federal Credit Reform Act of 1990, of loan 
guarantees authorized by Title XI of the Merchant Marine Act, 
1936 (46 U.S.C. App. 1271 et seq.), and $4.179 million is for 
administrative expenses related to these loan guarantee 
commitments. Finally, the bill authorizes $100,000 for MarAd to 
prepare a report to Congress on the status of research and 
technology development, and to make recommendations on how 
MarAd intends to provide and oversee the necessary research to 
consider the needs of the Maritime Transportation System (MTS). 
The Committee recognizes the rapidly changing nature of our 
maritime and intermodal transportation needs, and would 
encourage long term plans on how to address the changing 
environment.
  The bill also amends current law to provide a one year waiver 
of the three year period bulk and breakbulk vessels newly 
registered under the U.S. flag must wait in order to carry 
Government-impelled cargo. The waiver would be in effect only 
for one year beginning on the date of enactment. It is 
essential to provide a window through which some newer vessels 
may be able to enter the market to transport some of the 
increased food aid.
  Finally, the bill would amend the National Maritime Heritage 
Act of 1994 and allow the Secretary to scrap obsolete vessels 
in both domestic and international markets; convey ownership of 
the National Defense Reserve Fleet Vessel, Glacier, to the 
Glacier Society for use as a museum; requires the Maritime 
Administration to including the source and intended use of all 
funding in reports to Congress; amends Public Law 101-115 to 
recognize National Maritime Enhancement Institutes as if they 
were University Transportation Centers for purposes of the 
award of research funds for maritime and intermodal research; 
and require the Secretary of Transportation to review the 
funding of maritime research in relation to other modes of 
transportation.

                      Section-by-Section Analysis


Section 1. Short title

  Section 1 states the short title of the proposal, the 
``Maritime Administration Authorization Act for Fiscal Year 
2001''.

Section 2. Authorization of appropriations for fiscal year 2001

  Section 2 authorizes $80,240,000 for MarAd operations and 
training activities, of which $33,520,000 is authorized for 
MarAd operations. Operations and training activities include 
the costs incurred by headquarters and region staff in the 
administration and direction of the various MarAd programs such 
as:
          (1) Emergency planning and operations, including 
        administration of the Maritime Security Program 
        agreements.
          (2) Negotiation of agreements, understandings and 
        arrangements to reduce barriers that restrict American 
        access to foreign ports and markets.
          (3) Port, intermodal, and environmental activities.
          (4) Labor, training, and safety activities.
          (5) Administration of the Capital Construction Fund/
        Construction Reserve Fund.
          (6) Monitoring compliance with cargo reservation 
        statutes.
          (7) Administration of the Operating-Differential 
        Subsidy agreements.
  Operations and training funds also include funds for the 
operation of the United States Merchant Marine Academy (USMMA) 
at Kings Point, New York, and continuing assistance to the six 
state maritime academies. Expenses for maritime training at the 
USMMA include $37,236,000, an increase of $3 million, for 
capital maintenance and expenses, and $9,484,000 for financial 
assistance to the state maritime academies.
  The USMMA offers a four-year undergraduate, full scholarship 
program that leads to a Bachelor of Science degree and to a 
merchant marine license as Third Mate or Third Assistant 
Engineer or both. In addition, the students are enrolled as 
midshipmen and are commissioned upon graduation as ensigns in 
the U.S. Naval Reserve and required to serve for no fewer than 
six years. Additionally, USMMA graduates are required to 
maintain licenses as U.S. merchant marine officers for six 
years, and work as employees on board a U.S. flag vessel or in 
a maritime related industry or serve five years on active duty 
with the U.S. armed services.
  The state maritime academies program assists states in the 
training of individuals for service as officers in the U.S. 
merchant marine. Assistance is provided to participating states 
(California, Maine, Massachusetts, Michigan, New York, and 
Texas) in the form of direct payments to the academies, 
incentive payments to cadets currently enrolled in the Student 
Incentive Payment (SIP) Program, and funding for the cost of 
maintenance and repair for MarAd ships provided on loan to the 
schools for use as training ships.
  The Omnibus Appropriations Act for Fiscal Year 1999, P.L. 
105-277, established the American Fisheries Act. The American 
Fisheries Act tasks MarAd with new duties and responsibilities 
in determining the citizenship of certain fishing vessels. 
Among other things, the measure designates MarAd as the primary 
agency responsible for ensuring that the proper citizenship 
requirements are adhered to for ownership of vessels 100 feet 
or greater that have, or are seeking, a fisheries endorsement 
to their documentation. In enforcing citizenship standards, 
MarAd will be required to rigorously scrutinize transfers of 
ownership or control with particular attention to leases, 
charters, mortgages, and financing arrangements for fishing 
vessels. Further, MarAd will need to approve qualified trustees 
to hold mortgages where vessel financing is procured through 
foreign lenders.
  Operations and training funds will also be used to administer 
the processing of waivers to the U.S.-build requirement of the 
Jones Act for certain small passenger vessels, enacted in P.L. 
105-383, the Coast Guard Authorization Act of 1998.
  The section also contains the authorization for the maritime 
guaranteed loan program that is administered by MarAd under 
Title XI of the Merchant Marine Act of 1936 (46 U.S.C. App. 
1271 et seq.). Title XI authorizes the Secretary of 
Transportation (authority delegated to the Maritime 
Administrator) to enter into commitments to guarantee private 
sector debt financing for the construction or reconstruction of 
U.S.-flag vessels and export vessels in U.S. shipyards, and for 
U.S. shipyard modernization and improvement projects. Title XI 
loan guarantees enable ship owners and shipyards to borrow 
private sector funds on more favorable terms than might 
otherwise be available. Government funds are expended only in 
the event of a default, because the private sector provides 
total project funding.
  Federal accounting procedures enacted in the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661 et seq.) require that 
estimated costs of potential defaults and administrative costs 
be appropriated before a loan guarantee commitment may be 
entered into by the Government. An authorization of $50,000,000 
for the estimated costs of loan guarantee commitments, with an 
estimated carryover of $42,000,000, would enable MarAd to 
provide loan guarantees of $1,840,000,000 based on a 5 percent 
loan subsidy rate. The Federal Credit Reform Act of 1990 
requires, and MarAd requests, a separate authorization of 
$4,179,000 for administrative expenses for the entire Title XI 
program, to manage both the existing portfolio of loan 
guarantees and new guarantees.

Section 3. Amendments to Title IX of the Merchant Marine Act of 1936

  The section would amend Title IX of the Merchant Marine Act 
of 1936, as amended, to create a new section 910 eliminating 
the three-year period bulk or breakbulk vessels (including 
heavylift vessels) newly registered under the U.S. flag must 
wait in order to carry government-impelled cargo. This new 
section would remain in effect for one year from the date of 
enactment, or until enactment of the Organization for Economic 
Cooperation and Development (OECD) Agreement on Shipbuilding 
Subsidies (which would permit new vessels built in OECD 
countries to immediately carry preference cargoes). Present law 
requires a vessel that is registered under a foreign flag, or 
is foreign built or reconstructed in a foreign shipyard to be 
under U.S. registry for at least three years before the vessel 
is able to carry cargo reserved to U.S.-flag vessels under the 
Cargo Preference Act of 1954. This requirement does not apply 
to liner vessels that receive operating payments under the 
Maritime Security Program. Bulk vessels do not qualify for 
operating payments under the Maritime Security Program and are 
subject to the three-year wait period.
  It is unlikely that a foreign-flag vessel newly transferred 
to U.S. registry can support itself in U.S. foreign commercial 
trades during the three-year waiting period due to presently 
low international charter rates. Thus, there is a barrier to 
replacement and modernization of the U.S.-flag bulk fleet, 
which is required by statute to transport 75 percent of 
agricultural products exported under certain food aid programs. 
The youngest U.S.-flag self-propelled bulk vessel in foreign 
trade is 13 years old and shippers of cargo subject to cargo 
preference sometimes have a difficult time obtaining a U.S.-
flag vessel. This proposed amendment provides a limited 
opportunity for modern foreign vessels to transfer to U.S. 
registry and to be immediately eligible to carry preference 
cargoes. In return, the vessels must perform non-emergency 
shipyard repairs, and other shipyard work necessary to conform 
the vessel to U.S.-flag standards, in a shipyard of the United 
States, and such vessels shall not be granted preapproval to 
leave U.S. registry under section 9(e) of the Shipping Act, 
1916, as amended on October 19, 1996.
  It is anticipated that this provision will improve the vessel 
profile of the US.-flag dry bulk fleet, add jobs for U.S. 
merchant mariners, and increase the percentage of U.S. foreign 
commerce carded in U.S.-flag vessels. These additional modern 
vessels will increase the competition for carriage of 
government-impelled cargoes, which could result in substantial 
cost savings to the U.S. Government.
  This section also would amend Section 901(b)(c)(2) of the 
Merchant Marine Act of 1936, to make the cargo preference year 
for determining compliance coincide with the Federal Government 
Fiscal Year. This would simplify record keeping and management 
of the program without impact to any involved agencies or 
shippers.

Section 4. Scrapping of certain vessels

  Section 4 would require the Secretary of Transportation to 
focus efforts to scrap obsolete vessels in the National Defense 
Reserve Fleet on vessels identified as posing the greatest risk 
to the environment and navigation of our nation's waterways. 
Further, it would require the Secretary of Transportation along 
with the Secretary of the Navy, the Administrator of the 
Environmental Protection Agency (EPA), the Director of the 
Occupational Health and Safety Administration, and the 
Secretary of State, after reviewing all alternatives, to 
develop a long term plan for disposal of obsolete vessels 
within nine months of enactment.
  The section directs the Secretary of Transportation along 
with the Secretary of the Navy, the Administrator of the 
Environmental Protection Agency (EPA), the Occupational Safety 
and Health Administration, and the Secretary of State, to 
consider all alternatives and available information in 
developing a disposal plan, including alternative scrapping 
sites, vessel donations, sinking of vessels in deep water, 
sinking vessels for development of artificial reefs, the sale 
of vessels before they become obsolete, the results of the Navy 
Pilot Scrapping Program (Section 8124, P.L. 105-262), and the 
Interagency Ship Scrapping Review Panel report on ship 
scrapping issued in April of 1998.
  The section would also allow for the scrapping of vessels in 
both the domestic and international market as long as scrapping 
facilities are able to scrap vessels economically, safely, with 
minimal impact on the environment, while showing respect for 
worker safety.
  Additionally, Section 4 would amend the National Maritime 
Heritage Act of 1994 by extending the deadline for disposal of 
all obsolete vessels by five years. This is the second 
extension of the deadline, but is one that is required due to 
the inaction of MarAd, the EPA, and the Department of State in 
addressing the problems associated with scrapping since 
enactment of the Heritage Act in 1994. The additional time is 
also needed to allow the domestic shipbuilding industry to 
adjust its activities to meet the need to scrap in the domestic 
market.
  The section would further amend the Heritage Act by removing 
the requirement that obsolete vessels be scrapped at a profit 
to the federal government and replacing it with a requirement 
that vessels be scrapped in the most cost effective manner to 
the United States taking into account the need for disposal, 
the environment, and safety concerns.
  Finally, Section 4 would allow the Secretary of 
Transportation to use funds made available for the care and 
maintenance of the National Defense Reserve Fleet for the 
scrapping of obsolete vessels and require a report to Congress 
biannually on the progress of disposal of obsolete vessels.

Section 5. Reporting of administered and oversight funds

  Section 5 would require MarAd to include in its annual 
estimated budget and its annual report to Congress the amount, 
source, intended use, and nature of any funding for programs 
under MarAd's jurisdiction or administered by MarAd (other than 
funds appropriated to the Administration or to the Secretary of 
Transportation) for use by MarAd.
  MarAd does not currently include in its annual budget 
submission information relating to programs such as management 
of the Ready Reserve Fleet that are funded through the 
Department of Defense. While these activities are vital to our 
nation's defense transportations needs, MarAd is not currently 
required to provide any information on past activities or 
justification for future needs in relation to other programs 
under its jurisdiction.

Section 6. Maritime intermodal research

  Section 6 would allow the Secretary of Transportation to make 
grants for maritime and maritime intermodal research to 
National Maritime Enhancement Institutes. This section also 
requires the Secretary to advise the Maritime Administration 
concerning the funds available for grants through the Research 
and Special Programs Administration and to consult with MarAd 
on the making of the grants.
  Under current law (Section 5505 of Public Law 105-178), the 
Secretary of Transportation, through delegation to the Research 
and Special Programs Agency, cannot make grants to National 
Maritime Enhancement Institutes. This provision would authorize 
the Secretary to award research grants to National Maritime 
Enhancement Institutes, as if they were University 
Transportation Centers.

Section 7. Maritime research and technology development

  Section 7 authorizes $100,000 for the Secretary of 
Transportation to prepare a report to Congress on the status of 
research and technology development in the five different modes 
of transportation. MarAd will be required to report on federal 
funds spent on research for each mode of transportation and 
provide a description of current and future research proposals 
for our nation's Maritime Transportation System.

Section 8. Authority to convey National Defense Reserve Fleet vessel, 
        Glacier

  Section 8 would authorize the Secretary of Transportation to 
convey the National Defense Reserve Fleet vessel, U.S.S. 
Glacier (United States official number AGB-4), to the Glacier 
Society, Inc., for use as a museum. This provision also 
specifies the same terms of conveyance and required conditions 
typically required by the Committee for Government vessel 
conveyance authorizations.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                         TITLE 10. ARMED FORCES

                    SUBTITLE A. GENERAL MILITARY LAW

               PART IV. SERVICE, SUPPLY, AND PROCUREMENT

                 CHAPTER 131. PLANNING AND COORDINATION

Sec. 2218. National Defense Sealift Fund

  (a) Establishment.--There is established in the Treasury of 
the United States a fund to be known as the ``National Defense 
Sealift Fund''.
  (b) Administration of Fund.--The Secretary of Defense shall 
administer the Fund consistent with the provisions of this 
section.
  (c) Fund Purposes.--
          (1) Funds in the National Defense Sealift Fund shall 
        be available for obligation and expenditure only for 
        the following purposes:
                  (A) Construction (including design of 
                vessels), purchase, alteration, and conversion 
                of Department of Defense sealift vessels.
                  (B) Operation, maintenance, and lease or 
                charter of Department of Defense vessels for 
                national defense purposes.
                  (C) Installation and maintenance of defense 
                features for national defense purposes on 
                privately owned and operated vessels that are 
                constructed in the United States and documented 
                under the laws of the United States.
                  (D) Research and development relating to 
                national defense sealift.
                  (E) Expenses for maintaining and scrapping 
                the vessels of the National Defense Reserve 
                Fleet under section 11 of the Merchant Ship 
                Sales Act of 1946 (50 U.S.C. App. 1744), and 
                for the costs of acquisition of vessels for, 
                and alteration and conversion of vessels in (or 
                to be placed in), the fleet, but only for 
                vessels built in United States shipyards.
          (2) Funds in the National Defense Sealift Fund may be 
        obligated or expended only in amounts authorized by 
        law.
          (3) Funds obligated and expended for a purpose set 
        forth in subparagraph (B) or (D) of paragraph (1) may 
        be derived only from funds deposited in the National 
        Defense Sealift Fund pursuant to subsection (d)(1).
  (d) Deposits.--There shall be deposited in the Fund the 
following:
          (1) All funds appropriated to the Department of 
        Defense for fiscal years after fiscal year 1993 for--
                  (A) construction (including design of 
                vessels), purchase, alteration, and conversion 
                of national defense sealift vessels;
                  (B) operations, maintenance, and lease or 
                charter of national defense sealift vessels;
                  (C) installation and maintenance of defense 
                features for national defense purposes on 
                privately owned and operated vessels; and
                  (D) research and development relating to 
                national defense sealift.
          (2) All receipts from the disposition of national 
        defense sealift vessels, excluding receipts from the 
        sale, exchange, or scrapping of National Defense 
        Reserve Fleet vessels under sections 508 and 510 of the 
        Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 
        1160), shall be deposited in the Fund.
          (3) All receipts from the charter of vessels under 
        section 1424(c) of the National Defense Authorization 
        Act for Fiscal Year 1991 (10 U.S.C. 7291 note).
  (e) Acceptance of Support.--
          (1) The Secretary of Defense may accept from any 
        person, foreign government, or international 
        organization any contribution of money, personal 
        property (excluding vessels), or assistance in kind for 
        support of the sealift functions of the Department of 
        Defense.
          (2) Any contribution of property accepted under 
        paragraph (1) may be retained and used by the 
        Department of Defense or disposed of in accordance with 
        procedures prescribed by the Secretary of Defense.
          (3) The Secretary of Defense shall deposit in the 
        Fund money and receipts from the disposition of any 
        property accepted under paragraph (1).
  (f) Limitations.--
          (1) Not more than a total of five vessels built in 
        foreign ship yards may be purchased with funds in the 
        National Defense Sealift Fund pursuant to subsection 
        (c)(1).
          (2) Construction, alteration, or conversion of 
        vessels with funds in the National Defense Sealift Fund 
        pursuant to subsection (c)(1) shall be conducted in 
        United States ship yards and shall be subject to 
        section 1424(b) of Public Law 101-510 (104 Stat. 1683).
  (g) Expiration of Funds After 5 Years.--No part of an 
appropriation that is deposited in the National Defense Sealift 
Fund pursuant to subsection (d)(1) shall remain available for 
obligation more than five years after the end of fiscal year 
for which appropriated except to the extent specifically 
provided by law.
  (h) Budget Requests.--Budget requests submitted to Congress 
for the National Defense Sealift Fund shall separately 
identify--
          (1) the amount requested for programs, projects, and 
        activities for construction (including design of 
        vessels), purchase, alteration, and conversion of 
        national defense sealift vessels;
          (2) the amount requested for programs, projects, and 
        activities for operation, maintenance, and lease or 
        charter of national defense sealift vessels;
          (3) the amount requested for programs, projects, and 
        activities for installation and maintenance of defense 
        features for national defense purposes on privately 
        owned and operated vessels that are constructed in the 
        United States and documented under the laws of the 
        United States; and
          (4) the amount requested for programs, projects, and 
        activities for research and development relating to 
        national defense sealift.
  (i) Title or Management of Vessels.--Nothing in this section 
(other than subsection (c)(1)(E)) shall be construed to affect 
or modify title to, management of, or funding responsibilities 
for, any vessel of the National Defense Reserve Fleet, or 
assigned to the Ready Reserve Force component of the National 
Defense Reserve Fleet, as established by section 11 of the 
Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744).
  (j) Authority for Certain Use of Funds.--Upon a determination 
by the Secretary of Defense that such action serves the 
national defense interest and after consultation with the 
congressional defense committees, the Secretary may use funds 
available for obligation or expenditure for a purpose specified 
under subsection (c)(1) (A), (B), (C), and (D) for any purpose 
under subsection (c)(1).
  (k) Contracts for Incorporation of Defense Features in 
Commercial Vessels.--
          (1) The head of an agency may enter into a contract 
        with a company submitting an offer for that company to 
        install and maintain defense features for national 
        defense purposes in one or more commercial vessels 
        owned or controlled by that company in accordance with 
        the purpose for which funds in the National Defense 
        Sealift Fund are available under subsection (c)(1)(C). 
        The head of the agency may enter into such a contract 
        only after the head of the agency makes a determination 
        of the economic soundness of the offer.
          (2) The head of an agency may make advance payments 
        to the contractor under a contract under paragraph (1) 
        in a lump sum, in annual payments, or in a combination 
        thereof for costs associated with the installation and 
        maintenance of the defense features on a vessel covered 
        by the contract, as follows:
                  (A) The costs to build, procure, and install 
                a defense feature in the vessel.
                  (B) The costs to periodically maintain and 
                test any defense feature on the vessel.
                  (C) Any increased costs of operation or any 
                loss of revenue attributable to the 
                installation or maintenance of any defense 
                feature on the vessel.
                  (D) Any additional costs associated with the 
                terms and conditions of the contract.
          (3) For any contract under paragraph (1) under which 
        the United States makes advance payments under 
        paragraph (2) for the costs associated with 
        installation or maintenance of any defense feature on a 
        commercial vessel, the contractor shall provide to the 
        United States such security interests in the vessel, by 
        way of a preferred mortgage under section 31322 of 
        title 46 or otherwise, as the head of the agency may 
        prescribe in order to adequately protect the United 
        States against loss for the total amount of those 
        costs.
          (4) Each contract entered into under this subsection 
        shall--
                  (A) set forth terms and conditions under 
                which, so long as a vessel covered by the 
                contract is owned or controlled by the 
                contractor, the contractor is to operate the 
                vessel for the Department of Defense 
                notwithstanding any other contract or 
                commitment of that contractor; and
                  (B) provide that the contractor operating the 
                vessel for the Department of Defense shall be 
                paid for that operation at fair and reasonable 
                rates.
          (5) The head of an agency may not delegate authority 
        under this subsection to any officer or employee in a 
        position below the level of head of a procuring 
        activity.
  (l) Definitions.--In this section:
          (1) The term ``Fund'' means the National Defense 
        Sealift Fund established by subsection (a).
          (2) The term ``Department of Defense sealift vessel'' 
        means any ship owned, operated, controlled, or 
        chartered by the Department of Defense that is any of 
        the following:
                  (A) A fast sealift ship, including any vessel 
                in the Fast Sealift Program established under 
                section 1424 of Public Law 101-510 (104 Stat. 
                1683) [10 USCS Sec. 7291 note].
                  (B) A maritime prepositioning ship.
                  (C) An afloat prepositioning ship.
                  (D) An aviation maintenance support ship.
                  (E) A hospital ship.
                  (F) A strategic sealift ship.
                  (G) A combat logistics force ship.
                  (H) A maritime prepositioned ship.
                  (I) Any other auxiliary support vessel.
          (3) The term ``national defense sealift vessel'' 
        means--
                  (A) a Department of Defense sealift vessel; 
                and
                  (B) a national defense reserve fleet vessel, 
                including a vessel in the Ready Reserve Force 
                maintained under section 11 of the Merchant 
                Ship Sales Act of 1946 (50 U.S.C. App. 1744).
          (4) The term ``congressional defense committees'' 
        means--
                  (A) the Committee on Armed Services and the 
                Committee on Appropriations of the Senate; and
                  (B) the Committee on Armed Services and the 
                Committee on Appropriations of the House of 
                Representatives.
          (5) The term ``head of an agency'' has the meaning 
        given that term in section 2302(1) of this title.

                 NATIONAL MARITIME HERITAGE ACT OF 1994


SEC. 6. FUNDING.

                            [16 U.S.C. 5405]

  (a) Availability of Funds From Sale and Scrapping of Obsolete 
Vessels.--
          (1) In general.--Notwithstanding any other provision 
        of law, the amount of funds credited in a fiscal year 
        to the Vessel Operations Revolving Fund established by 
        the Act of June 2, 1951 (46 App. U.S.C. 1241a), that is 
        attributable to the sale of obsolete vessels in the 
        National Defense Reserve Fleet that are scrapped or 
        sold under section 508 or 510(i) of the Merchant Marine 
        Act, 1936 (46 App. U.S.C. 1158 or 1160(i)) shall be 
        available until expended as follows:
                  (A) 50 percent shall be available to the 
                Administrator of the Maritime Administration 
                for such acquisition, maintenance, repair, 
                reconditioning, or improvement of vessels in 
                the National Defense Reserve Fleet as is 
                authorized under other Federal law.
                  (B) 25 percent shall be available to the 
                Administrator of the Maritime Administration 
                for the payment or reimbursement of expenses 
                incurred by or on behalf of State maritime 
                academies or the United States Merchant Marine 
                Academy for facility and training ship 
                maintenance, repair, and modernization, and for 
                the purchase of simulators and fuel.
                  (C) The remainder shall be available to the 
                Secretary to carry out the Program, as provided 
                in subsection (b).
          (2) Application.--Paragraph (1) does not apply to 
        amounts credited to the Vessel Operations Revolving 
        Fund before July 1, 1994.
  (b) Use of Amounts for Program.--
          (1) In general.--Except as provided in paragraph (2), 
        of amounts available each fiscal year for the Program 
        under subsection (a)(1)(C)--
                  (A) \1/2\ shall be used for grants under 
                section 4(b); and
                  (B) \1/2\ shall be used for grants under 
                section 4(c).
          (2) Use for interim projects.--Amounts available for 
        the Program under subsection (a)(1)(C) that are the 
        proceeds of any of the first 8 obsolete vessels in the 
        National Defense Reserve Fleet that are sold or 
        scrapped after July 1, 1994, under section 508 or 
        510(i) of the Merchant Marine Act, 1936 (46 U.S.C. 
        [App.] 1158 or 1160(i)) are available to the Secretary 
        for grants for interim projects approved under section 
        4(j) of this Act.
          (3) Administrative expenses.--
                  (A) In general.--Not more than 15 percent or 
                $500,000, whichever is less, of the amount 
                available for the Program under subsection 
                (a)(1)(C) for a fiscal year may be used for 
                expenses of administering the Program.
                  (B) Allocation.--Of the amount available 
                under subparagraph (A) for a fiscal year--
                          (i) \1/2\ shall be allocated to the 
                        National Trust for expenses incurred in 
                        administering grants under section 
                        4(b); and
                          (ii) \1/2\ shall be allocated as 
                        appropriate by the Secretary to the 
                        National Park Service and participating 
                        State Historic Preservation Officers.
  (c) Disposals of Vessels.--
          (1) Requirement.--The Secretary of Transportation 
        shall dispose of all vessels described in paragraph 
        (2)--
                  (A) by September 30, [2001;] 2006;
                  [(B) in a manner that maximizes the return on 
                the vessels to the United States; and]
                  (B) in the most cost effective manner to the 
                United States taking into account the need for 
                disposal, the environment, and safety concerns; 
                and
                  (C) in accordance with the plan of the 
                Department of Transportation for disposal of 
                those vessels and requirements under sections 
                508 and 510(i) of the Merchant Marine Act, 1936 
                (46 App. U.S.C. 1158, 1160(i)).
          (2) Vessels described.--The vessels referred to in 
        paragraph (1) are the vessels in the National Defense 
        Reserve Fleet after July 1, 1994, that--
                  (A) are not assigned to the Ready Reserve 
                Force component of that fleet; and
                  (B) are not specifically authorized or 
                required by statute to be used for a particular 
                purpose.
  (d) Treatment of Amounts Available.--Amounts available under 
this section shall not be considered in any determination of 
the amounts available to the Department of the Interior.

                           Public Law 101-115

                        [46 U.S.C. App. 1121-2]

NATIONAL MARITIME ENHANCEMENT INSTITUTES

  Sec. 8. (a) The Secretary of Transportation may designate 
National Maritime Enhancement Institutes.
  (b) Activities undertaken by such an Institute may include--
          (1) conducting research concerning methods for 
        improving 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) An institution seeking designation as a National Maritime 
Enhancement Institute shall submit an application under 
regulations prescribed by the Secretary.
  (d) 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 designee for carrying out the 
        activities specified in subsection (b);
          (2) the capability of the designee 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 
        designee encompassing research and training directed to 
        enhancing maritime industries;
          (4) the demonstrated ability of the designee 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; and
          (5) the qualification of the designee as a nonprofit 
        institution of higher learning.
  (e) 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 shall not exceed $500,000.
  (f) University Transportation Research Funds.--
          (1) In general.--The Secretary may make a grant under 
        section 5505 of title 49, United States Code, 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.
          (2) Advice and consultation of marad.--In making a 
        grant under the authority of paragraph (1), the 
        Secretary, through the Research and Special Programs 
        Administration, shall advise the Maritime 
        Administration concerning the availability of funds for 
        the grants, and consult with the Administration on the 
        making of the grants.

                  TITLE 46. MERCHANT MARINE ACT, 1936

SHIPMENT REQUIREMENTS FOR CERTAIN EXPORTS SPONSORED BY DEPARTMENT OF 
                    AGRICULTURE

                         [46 U.S.C. App. 1241f]

  Sec. 901b. (a) Minimum Requirement Respecting Gross Tonnage 
Transported in United States-Flag Commercial Vessels; 
Implementation.--
          (1) In addition to the requirement for United States-
        flag carriage of a percentage of gross tonnage imposed 
        by section 901(b)(1) of this Act, 25 percent of the 
        gross tonnage of agricultural commodities or the 
        products thereof specified in subsection (b) shall be 
        transported on United States-flag commercial vessels.
          (2) In order to achieve an orderly and efficient 
        implementation of the requirement of paragraph (1)--
                  (A) an additional quantity equal to 10 
                percent of the gross tonnage referred to in 
                paragraph (1) shall be transported in United 
                States-flag vessels in calendar year 1986;
                  (B) an additional quantity equal to 20 
                percent of the gross tonnage shall be 
                transported in such vessels in calendar year 
                1987; and
                  (C) an additional quantity equal to 25 
                percent of the gross tonnage shall be 
                transported in such vessels in calendar year 
                1988 and in each calendar year thereafter.
  (b) Covered Export Activity.--This section shall apply to any 
export activity of the Commodity Credit Corporation or the 
Secretary of Agriculture--
          (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 et seq.);
          (4) under which agricultural commodities or the 
        products thereof are--
                  (A) donated through foreign governments or 
                agencies, private or public, including 
                intergovernmental organizations; or
                  (B) sold for foreign currencies or for 
                dollars on credit terms of more than ten years;
          (5) under which agricultural commodities or the 
        products thereof 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 for the 
        purpose of enabling the purchaser to obtain United 
        States agricultural commodities or the products thereof 
        in an amount greater than the difference between the 
        prevailing world market price and the United States 
        market price, free along side vessel at United States 
        port; or
          (7) under which agricultural commodities owned or 
        controlled by or under loan from the Commodity Credit 
        Corporation are exchanged or bartered for materials, 
        goods, equipment, or services produced in foreign 
        countries, other than export activities described in 
        section 901a(5).
  (c) Terms and Conditions.--
          (1) The requirement for United States-flag 
        transportation imposed by subsection (a) shall be 
        subject to the same terms and conditions as provided in 
        section 901(b) of this Act.
          (2) In order to provide for effective and equitable 
        administration of the cargo preference laws the 
        calendar year for the purpose of compliance with 
        minimum percentage requirements shall be for 12 month 
        periods commencing April 1, [1986.] 1986, the 18-month 
        period commencing April 1, 2000, and the 12-month 
        period beginning on the first day of October in the 
        year 2001 and each year thereafter.
          (3)(A) Subject to subparagraph (B), in administering 
        sections 901(b) and 901b (46 U.S.C. App. 1241(b) and 
        1241f), and, subject to subparagraph (B) of this 
        paragraph, consistent with those sections, the 
        Commodity Credit Corporation shall take such steps as 
        may be necessary and practicable 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 furnished pursuant 
        to title II of the Agricultural Trade Development and 
        Assistance Act of 1954 (7 U.S.C. 1751 et seq.).
          (B) In carrying out this paragraph, there shall first 
        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 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 section 901(b) and this section 
        shall not apply to commodities allocated under 
        subparagraph (A) to the Great Lakes port range, and 
        commodities allocated under subparagraph (A) to that 
        port range may not be reallocated or diverted to 
        another port range to meet those requirements to the 
        extent that the total tonnage of commodities to which 
        subparagraph (A) applies that is furnished and 
        transported from the Great Lakes port range is less 
        than 25 percent of the total annual tonnage of such 
        commodities furnished.
          (C) In awarding any contract for the transportation 
        by vessel of commodities from the Great Lakes port 
        range pursuant to an export activity referred to in 
        subsection (b), each agency or instrumentality--
                  (i) shall consider expressions of freight 
                interest for any vessel from a vessel operator 
                who meets reasonable requirements for financial 
                and operational integrity; and
                  (ii) 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.
          (4) Any determination of nonavailability of United 
        States-flag vessels resulting from the application of 
        this subsection shall not reduce the gross tonnage of 
        commodities required by sections 901(b) and 901b to be 
        transported on United States-flag vessels.
  (d) Export Activity Defined.--As used in subsection (b), the 
term ``export activity'' does not include inspection or 
weighing activities, other activities carried out for health or 
safety purposes, or technical assistance provided in the 
handling of commercial transactions.
  (e) Prevailing World Market Price.--
          (1) The prevailing world market price as to 
        agricultural commodities or the products thereof shall 
        be determined under sections 901a through 901d in 
        accordance with procedures established by the Secretary 
        of Agriculture. The Secretary shall prescribe such 
        procedures by regulation, with notice and opportunity 
        for public comment, pursuant to section 553 of title 5, 
        United States Code.
          (2) In the event that a determination of the 
        prevailing world market price of any other type of 
        materials, goods, equipment, or service is required in 
        order to determine whether a barter or exchange 
        transaction is subject to subsection (b)(6) or (b)(7), 
        such determination shall be made by the Secretary of 
        Agriculture in consultation with the heads of other 
        appropriate Federal agencies.

SEC. 910. DOCUMENTATION OF CERTAIN DRY CARGO VESSELS.

  (a) In General.--The restrictions of section 901(b)(1) of 
this Act concerning a vessel built in a foreign country shall 
not apply to a newly constructed drybulk or breakbulk vessel 
over 7,500 deadweight tons that has been delivered from a 
foreign shipyard or contracted for construction in a foreign 
shipyard before the earlier of--
          (1) the date that is 1 year after the date of 
        enactment of the Maritime Administration Authorization 
        Act for Fiscal Year 2001; or
          (2) the effective date of the OECD Shipbuilding Trade 
        Agreement Act.
  (b) Compliance With Certain U.S.-Build Requirements.--A 
vessel timely contracted for or delivered pursuant to this 
section and documented under the laws of the United States 
shall be deemed to have been United-States built for purposes 
of sections 901(b) and 901b of this Act if--
          (1) following delivery by a foreign shipyard, the 
        vessel has any additional shipyard work necessary to 
        receive its initial Coast Guard certificate of 
        inspection performed in a United States shipyard;
          (2) the vessel is not documented in another country 
        before being documented under the laws of the United 
        States;
          (3) the vessel complies with the same inspection 
        standards set forth for ocean common carriers in 
        section 1137 of the Coast Guard Authorization Act of 
        1996 (46 U.S.C. App. 1187 note); and
          (4) actual delivery of a vessel contracted for 
        construction takes place on or before the 3-year 
        anniversary of the date of the contract to construct 
        the vessel.
  (c) Section 12106(e) of Title 46.--Section 12106(e) of title 
46, United States Code, shall not apply to a vessel built 
pursuant to this section.

                                
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