[Senate Report 109-327]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                                 SENATE
 2nd Session                                                    109-327
_______________________________________________________________________

                                     

                                                       Calendar No. 591
 
            MARITIME ADMINISTRATION IMPROVEMENT ACT OF 2006

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 3852




                                     


      DATE deg.September 6, 2006.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred ninth congress
                             second session

                     TED STEVENS, Alaska, Chairman
                 DANIEL K. INOUYE, Hawaii, Co-Chairman
JOHN McCAIN, Arizona                 JOHN D. ROCKEFELLER IV, West 
CONRAD BURNS, Montana                    Virginia
TRENT LOTT, Mississippi              JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas          BYRON L. DORGAN, North Dakota
OLYMPIA J. SNOWE, Maine              BARBARA BOXER, California
GORDON H. SMITH, Oregon              BILL NELSON, Florida
JOHN ENSIGN, Nevada                  MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire        E. BENJAMIN NELSON, Nebraska
JIM DeMINT, South Carolina           MARK PRYOR, Arkansas
DAVID VITTER, Louisiana
                    Lisa Sutherland, Staff Director
                 Christine Kurth, Deputy Staff Director
                    Kenneth Nahigian, Chief Counsel
     Margaret Cummisky, Democratic Staff Director and Chief Counsel
 Samuel Whitehorn, Democratic Deputy Staff Director and General Counsel


                                                       Calendar No. 591
109th Congress                                                   Report
                                 SENATE
 2nd Session                                                    109-327

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




            MARITIME ADMINISTRATION IMPROVEMENT ACT OF 2006

                                _______
                                

               September 6, 2006.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 3852]

    The Committee on Commerce, Science, and Transportation 
reports favorably an original bill to enhance certain maritime 
programs of the Department of Transportation, and for other 
purposes, and recommends that the bill joint 
resolution deg. do pass.

                          Purpose of the Bill

  The bill includes several provisions designed to clarify what 
is expected of cadets and graduates of the USMMA, as well as 
some of the functions and programs overseen by MARAD. Several 
provisions of the bill would authorize MARAD to retain a 
portion of the fees it charges and collects for certain duties 
the agency performs. In addition, the bill includes technical 
corrections which would restore vessel transfer authority to 
the Secretary of Transportation, and would clarify the use of 
funds in excess of those necessary for merchant marine vessel 
war risk insurance.

                          Background and Needs

  The mission of MARAD is to promote the development and 
maintenance of an adequate, well-balanced U.S. merchant marine, 
sufficient to carry the Nation's domestic waterborne commerce 
and a substantial portion of its waterborne foreign commerce, 
and capable of serving as a naval and military auxiliary in 
time of war or national emergency. MARAD also works to ensure 
that the United States enjoys adequate shipbuilding and repair 
service, efficient ports, effective intermodal water and land 
transportation systems, and adequate reserve shipping capacity 
in times of national emergency.
  To meet its mission, MARAD administers various U.S. merchant 
marine support programs within the Department of Transportation 
(DOT). These programs include the Maritime Security Program 
(MSP), title XI maritime loan guarantee program, a small 
shipyard and maritime community assistance program, various 
cargo preference programs, maintenance of the Ready Reserve 
Force (RRF)--often used in domestic disaster relief efforts--
and the National Defense Reserve Force (NDRF), and operation of 
the USMMA at Kings Point, NY. MARAD has approximately 825 
employees, including the RRF and the USMMA staff.
  The MSP is an element of the U.S. maritime transportation 
system, which provides funded operating agreements to privately 
owned, U.S.-flagged, and U.S.-crewed vessels in international 
trade. This fleet also is available to support the Department 
of Defense (DOD) sustainment in a contingency. Currently, the 
MSP is authorized through fiscal year 2015 and subject to a 
separate annual appropriation.
  MARAD's operations and training account funds the 
administration and staffing of MARAD programs (other than the 
title XI guaranteed loan program and RRF costs), the USMMA, 
State maritime school costs associated with Federal training 
ships, training courses for merchant mariners, various 
operating programs, and research and development. The USMMA 
educates young men and women to become officers in the U.S. 
merchant marine.
  The Global Maritime and Transportation School (GMATS) is a 
private, tuition-funded graduate school housed at the USMMA, 
which offers advanced mariner training, and logistics and 
supply chain management courses. The primary mission of GMATS 
is to offer leading edge education and training programs that 
will benefit maritime and transportation professionals from 
government agencies, the military, and private industry. Funds 
to operate GMATS are generated through tuition, meal, and 
lodging fees. It is not an appropriated instrumentality of the 
DOT. The current process through which some applicants are 
accepted is cumbersome and this legislation would reduce that 
burden and clarify GMATS's role.

                         Summary of Provisions

  Several provisions of the bill are designed to clarify what 
is expected of cadets at the USMMA, and provide greater choice 
for its graduates. The bill would require students entering the 
USMMA to meet the same physical and mental standards required 
by the DOD to ensure that students admitted to the Academy are 
capable of fulfilling the requirements of their service 
commitment agreement upon graduation. The bill also would 
require DOD, the U.S. Coast Guard, and the National Oceanic and 
Atmospheric Administration (NOAA) to certify annually to MARAD 
which Academy graduates have remained on active duty or in 
ready reserve status, thus confirming the fulfillment of a 
graduate's service commitment agreement. This would provide 
MARAD a mechanism to recover tuition from graduates who fail to 
perform their duties or are found in noncompliance with their 
commitment agreement.
  The bill would exempt Academy graduates who choose to serve 
on active duty in the Armed Forces from certain requirements 
otherwise required of graduates who do not serve on active 
duty. Those cadets who chose to serve on active duty instead 
would be obligated to the terms of service of the branch under 
which they serve. Individuals attending a State maritime 
academy would be required to enlist in either the U.S. Naval 
Reserve (including the Merchant Marine Reserve), or the U.S. 
Coast Guard Reserve as a prerequisite for receiving student 
incentive payments. An additional provision clarifies that 
GMATS is a non-appropriated fund instrumentality which is 
operated under the jurisdiction of DOT.
  The bill would authorize MARAD to retain fees collected to 
process applications for deepwater port licenses, as well as 
those collected on its administrative process for coastwise 
trade law waivers, subject to certain limits.
  The bill would authorize MARAD to use a portion of the fees 
collected for the operation of the NDRF vessels and proceeds 
recovered from vessel accident litigation and arbitration to 
cover the costs of vessel maintenance, repairs, and 
replacements. The bill also would provide an alternative 
approach for operators of the MSP product tankers to meet U.S.-
built replacement vessel requirements. The alternative approach 
would include the construction and operation of equivalent 
domestic trade tank vessels. Certain non-resident alien visa 
holders also would be authorized for temporary employment on 
U.S.-flag large passenger vessels.
  In addition, the bill would include several technical 
corrections, including a provision to restore vessel transfer 
authority to the DOT, which was inadvertently stripped when the 
Coast Guard was transferred to the Department of Homeland 
Security (DHS) with enactment of the Homeland Security Act of 
2002, P.L. 107-296, and reinserts an improperly deleted 
sentence which would clarify the Secretary of Transportation's 
role in the investment of funds in excess of that necessary for 
war risk insurance for merchant marine vessels.

                          Legislative History

  The original Committee bill was ordered reported to the 
Senate by voice vote on July 19, 2006, in the presence of a 
quorum.

                            Estimated Costs

  In compliance with subsection (a)(3) of paragraph 11 
of rule XXVI of the Standing Rules of the Senate, the Committee 
states that, in its opinion, it is necessary to dispense with 
the requirements of paragraphs (1) and (2) of that subsection 
in order to expedite the business of the Senate. deg.
  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:

                                                   August 17, 2006.
Hon. Ted Stevens,
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 the Maritime 
Administration Enhancement Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

Maritime Administration Improvement Act of 2006

    Summary: The Maritime Administration Improvement Act would 
amend various laws governing the activities of the Maritime 
Administration (MARAD). Several provisions of the bill would 
allow MARAD to spend, without further appropriation actions, 
certain collections from regulatory fees and legal damages. CBO 
estimates that enacting these provisions would increase direct 
spending by $5 million over the 2007-2011 period and by $10 
million over the 2007-2016 period. We estimate that 
implementing other provisions would have no significant impact 
on the federal budget because they would not change MARAD's 
responsibilities under maritime laws.
    The legislation 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.
    Estimated cost to the Federal Government: The estimated 
budgetary effects of the legislation are shown in the following 
table. The costs of this legislation fall within budget 
function 400 (transportation).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2007     2008     2009     2010     2011     2012     2013     2014     2015     2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated budget authority....................................        1        1        1        1        1        1        1        1        1        1
Estimated outlays.............................................        1        1        1        1        1        1        1        1        1        1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Enacting the bill also would change the classification of about $1 million a year in revenues by directing that those collections be recorded in
  the budget as an offset to spending. Following scorekeeping rule 13, such reclassifications in legislation are not counted for purposes of
  Congressional scorekeeping.


    Basis of estimate: Several provisions of the legislation 
would provide a total of about $1 million of new budget 
authority for MARAD each year by allowing the agency to spend, 
without further appropriation, certain amounts it currently 
collects and deposits in the U.S. Treasury as revenues.
    Section 11 would allow MARAD to spend payments for damages 
received for accidents that involve vessels that it owns or 
manages. Based on recent judgments and settlements for damages 
collected as a result of such incidents, CBO estimates that 
this new authority would increase direct spending by an average 
of $500,000 a year.
    Sections 9 and 10 would authorize the agency to spend, 
without further appropriations action, certain administrative 
and regulatory fees. Amounts collected each year from such 
fees, including up to $400,000 annually from licences on 
deepwater port applications and up to $50,000 annually on 
waivers of coastwise trade restrictions, would be spent by 
MARAD on related regulatory programs. Based on the level of 
historical collections, CBO estimates that enacting these 
provisions would increase annual direct spending by less than 
$500,000 a year.
    The bill also would change the budgetary classification of 
those administrative and regulatory fees. Such collections are 
currently considered revenues but under the legislation would 
become offsetting receipts (an offset to direct spending). The 
resulting decrease in revenues and corresponding decrease in 
outlays are not counted for purposes of Congressional 
consideration, however, pursuant to scorekeeping rule 13, which 
states that reclassifications are not counted for purposes of 
enforcing the budget resolution (see House Report 105-217, the 
conference report on the Balanced Budget Act of 1997, page 
1011).
    Intergovernmental and private-sector impact: The 
legislation contains no intergovernmental or private-sector 
mandates as defined in UMRA. Section 14 would provide Hawaii 
with additional flexibility in spending federal funds. Other 
provisions of the bill would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO Estimate: On November 15, 2005, CBO 
transmitted a cost estimate for the Maritime Administration 
Enhancement Act of 2005, as ordered reported by the Senate 
Committee on Commerce, Science, and Transportation on July 21, 
2006. The 2005 bill would authorize appropriations for MARAD 
programs for 2006; the 2006 bill contains no authorizations. 
Also, the 2005 bill would exempt MARAD from paying ad valorem 
taxes on certain materials and repairs for vessels that it 
operates, while the 2006 bill would not. Other provisions of 
the two bills are similar, as are the CBO cost estimates.
    Estimate prepared by: Federal spending: Deborah Reis; 
Impact on state, local, and tribal governments: Sarah Puro; 
Impact on the private sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

  Because S. 3852 does not create any new programs, the 
legislation will have no additional regulatory impact, and will 
result in no additional reporting requirements. 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.

                      Section-by-Section Analysis


Section 1. Short title; table of contents

  Section 1 states the short title of the legislation, the 
``Maritime Administration Improvement Act of 2006''.

Section 2. Vessel transfer authority

  This section would restore vessel transfer authority to DOT 
that was inadvertently lost when the Coast Guard was 
transferred to DHS.

Section 3. War risk insurance for merchant marine vessels

  This is a technical correction to section 3502(b) of P.L. 
108-375, the National Defense Authorization Act for Fiscal Year 
2005.

Section 4. Requirements for admission to the USMMA

  This section would require students entering the USMMA to 
meet the same physical and mental standards required by DOD. 
Any cadet not meeting such standards could be expelled. This 
change is necessary to ensure that students admitted to the 
Academy are capable of fulfilling the requirements of their 
commitment agreements upon graduation. If students do not meet 
these DOD standards, they would not be eligible to obtain a 
Merchant Marine license or to accept an appointment in a 
reserve unit of the Armed Forces of the United States, two key 
commitment agreement service requirements.

Section 5. Reserve training compliance and Armed Forces performance 
        reporting requirements for graduates

  Current law requires Academy graduates to become commissioned 
officers on active duty in an armed force of the United States 
or to become commissioned officers in the reserves of the Armed 
Forces for at least 6 years following graduation. The Privacy 
Act impedes MARAD from readily verifying with DOD, the Coast 
Guard, and NOAA that graduates are serving their commitment to 
the Armed Forces. This section would require DOD, the U.S. 
Coast Guard, and NOAA to certify annually to MARAD that Academy 
graduates have remained on active duty or in ready reserve 
status, thus confirming the fulfillment of a graduate's service 
commitment agreement. In addition, this provision would provide 
a mechanism for MARAD to recover tuition from graduates who 
fail to perform their duties and that are found in 
noncompliance with their commitment agreement.

Section 6. Service in the Armed Forces and alternate service 
        requirements

  This section would require Academy graduates who serve on 
active duty in the Armed Forces to abide by the obligations of 
service of the branch under which they serve, and exempts them 
from having to maintain a U.S. Coast Guard-issued merchant 
mariner license and from having to fulfill an armed service 
reserve service requirement. This provision is intended to 
exempt graduates from the reserve requirement of the commitment 
agreement they sign as a condition to admission to the Academy. 
It would not exempt graduates from any reserve obligation 
imposed on them by the Armed Forces branch in which they serve 
on active duty. Finally, this section would provide the 
Secretary with waiver and alternate service requirement 
authority for individuals who may be unable to perform their 
service requirements.

Section 7. Qualifying reserve duty for receipt of student incentive 
        payments

  This provision would require individuals attending a State 
Maritime Academy to accept enlisted reserve status in either 
the U.S. Naval Reserve, including the Merchant Marine Reserve, 
or the U.S. Coast Guard Reserve as a prerequisite for receiving 
student incentive payments.

Section 8. GMATS

  This section would clarify the role of GMATS located on the 
campus at Kings Point as a non-appropriated fund 
instrumentality operating under the jurisdiction of DOT.

Section 9. Availability of funds from application fees for deepwater 
        port licenses

  This section would allow MARAD to retain fees assessed 
pursuant to applications for licenses for ownership, 
construction, and operation of deepwater ports, up to $400,000 
per fiscal year.

Section 10. Availability of funds from administrative waivers of 
        coastwise trade restrictions

  This section would authorize MARAD to retain funds routinely 
collected through the agency's program for the Administrative 
Waiver of Coastwise Trade Laws for Eligible Vessels, up to 
$50,000 per fiscal year.

Section 11. Amendments to the Vessel Operations Revolving Fund (VORF)

  The VORF was created in 1951 to carry out vessel operating 
functions under the jurisdiction of the Secretary of 
Transportation, including the charter, operation, maintenance, 
repair, reconditioning, and betterment of merchant vessels. At 
present, such functions come at the expense of the operating 
repairs and maintenance budgeted for other NDRF vessels. In 
addition, all recoveries from litigation are deposited into the 
Treasury after payment to the Department of Justice for the 
costs of litigation. This section would allow MARAD to use a 
portion of the fee paid for the operation of the NDRF vessels 
and proceeds recovered from vessel accident litigation and 
arbitration. Funds would be placed in a reserve fund to cover 
the costs of vessel maintenance, repairs, and replacements.

Section 12. Right to use MARAD decoration

  Current law allows for the Secretary to sanction the use, 
manufacture, sale, possession, or display of a decoration or 
medal, such as the merchant marine seal. This provision would 
permit the Secretary, through the Maritime Administrator, to 
authorize the use of maritime emblems for purposes and events 
he deems meritorious, such as commemorative ceremonies or 
events. This section would make a technical correction to 
current law (46 U.S.C. App 2007) to clarify the Secretary means 
the Secretary of Transportation.

Section 13. MSP tank vessels

  This section would provide an alternative approach for 
operators of the MSP product tankers to meet U.S.-built 
replacement vessel requirements. The alternative approach would 
include the construction and operation of equivalent domestic 
trade tank vessels.

Section 14. Intermodal centers

  This provision would authorize funding provided under section 
5833 (m)(6)(B) from Public Law 109-59 to be used for projects. 
Public Law 109-59 also authorizes MARAD to set the requirements 
for the Hawaii Port Intermodal Expansion Pilot Project.

Section 15. Large passenger ship crew requirements

  This section would expand the pool of non-citizens that can 
be employed on U.S.-flag large passenger vessels to include 
certain non-resident alien visa holders.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law. deg.
  In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, in its 
opinion, it is necessary to dispense with the requirements of 
that paragraph in order to expedite the business of the 
Senate. deg.
  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):

                           UNITED STATES CODE


                         TITLE 10. ARMED FORCES


                    SUBTITLE A. GENERAL MILITARY LAW

               PART IV. SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 153. EXCHANGE OF MATERIAL AND DISPOSAL OF OBSOLETE, SURPLUS, OR 
                           UNCLAIMED PROPERTY

[Sec. 2578. Vessels: transfer between departments

  [A vessel under the jurisdiction of a military department may 
be transferred or otherwise made available without 
reimbursement to another military department or to the 
Department of Homeland Security, and a vessel under the 
jurisdiction of the Department of Homeland Security may be 
transferred or otherwise made available without reimbursement 
to a military department. Any such transfer may be made only 
upon the request of the Secretary of the military department 
concerned or the Secretary of Homeland Security, as the case 
may be, and with the approval of the Secretary of the 
department having jurisdiction of the vessel.]

Sec. 2578. Transfer of vessels between departments

  A vessel under the jurisdiction of a military department may 
be transferred or otherwise made available without 
reimbursement to another military department, the Department of 
Transportation, or the Department of Homeland Security. 
Notwithstanding the provisions of the section 11 of the Foreign 
Ship Sales Act of 1946, (50 App. U.S.C. 1744), a vessel under 
the jurisdiction of the Department of Transportation may be 
transferred or otherwise made available with or without 
reimbursement to any military department or the Department of 
Homeland Security. A vessel under the jurisdiction of the 
Department of Homeland Security may be transferred or otherwise 
made available without reimbursement to any military department 
or the Department of Transportation. Any such transfer shall be 
made only upon the request of the Secretary of the military 
department to receive the vessel, the Secretary of 
Transportation, or the Secretary of Homeland Security, and with 
the approval of the Secretary of the department having 
jurisdiction of the vessel.

                           UNITED STATES CODE

                           TITLE 46. SHIPPING

                    SUBTITLE II. VESSELS AND SEAMEN

                       PART F. MANNING OF VESSELS

                          CHAPTER 81. GENERAL

Sec. 8103. Citizenship and Navy Reserve requirements

  (a) Only a citizen of the United States may serve as master, 
chief engineer, radio officer, or officer in charge of a deck 
watch or engineering watch on a documented vessel.
  (b)(1) Except as otherwise provided in this section, on a 
documented vessel--
          (A) each unlicensed seaman must be--
                  (i) a citizen of the United States;
                  (ii) an alien lawfully admitted to the United 
                States for permanent residence; or
                  (iii) a foreign national who is enrolled in 
                the United States Merchant Marine Academy.
          (B) not more than 25 percent of the total number of 
        unlicensed seamen on the vessel may be aliens lawfully 
        admitted to the United States for permanent residence.
  (2) Paragraph (1) of this subsection does not apply to--
          (A) a yacht;
          (B) a fishing vessel fishing exclusively for highly 
        migratory species (as that term is defined in section 3 
        of the Magnuson-Stevens Fishery Conservation and 
        Management Act (16 U.S.C. 1802)); and
          (C) a fishing vessel fishing outside of the exclusive 
        economic zone.
  (3) The Secretary may waive a citizenship requirement under 
this section, other than a requirement that applies to the 
master of a documented vessel, with respect to--
          (A) an offshore supply vessel or other similarly 
        engaged vessel of less than 1,600 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 that operates from a foreign port;
          (B) a mobile offshore drilling unit or other vessel 
        engaged in support of exploration, exploitation, or 
        production of offshore mineral energy resources 
        operating beyond the water above the outer Continental 
        Shelf (as that term is defined in section 2(a) of the 
        Outer Continental Shelf Lands Act (43 U.S.C. 1331(a)); 
        and
          (C) any other vessel if the Secretary determines, 
        after an investigation, that qualified seamen who are 
        citizens of the United States are not available.
  (c) On each departure of a vessel (except a passenger vessel) 
for which a construction or operating differential subsidy has 
been granted, all of the seamen of the vessel must be citizens 
of the United States.
  (d)(1) On each departure of a passenger vessel for which a 
construction or operating differential subsidy has been 
granted, at least 90 percent of the entire complement 
(including licensed individuals) must be citizens of the United 
States.
  (2) An individual not required by this subsection to be a 
citizen of the United States may be engaged only if the 
individual has a declaration of intention to become a citizen 
of the United States or other evidence of admission to the 
United States for permanent residence. An alien may be employed 
only in the steward's department of the passenger vessel.
  (e) If a documented vessel is deprived for any reason of the 
services of an individual (except the master and the radio 
officer) when on a foreign voyage and a vacancy consequently 
occurs, until the vessel's return to a port at which in the 
most expeditious manner a replacement who is a citizen of the 
United States can be obtained, an individual not a citizen of 
the United States may serve in--
          (1) the vacancy; or
          (2) a vacancy resulting from the promotion of another 
        individual to fill the original vacancy.
  (f) A person employing an individual in violation of this 
section or a regulation prescribed under this section is liable 
to the United States Government for a civil penalty of $500 for 
each individual so employed.
  (g) A deck or engineer officer employed on a vessel on which 
an operating differential subsidy is paid, or employed on a 
vessel (except a vessel of the Coast Guard or Saint Lawrence 
Seaway Development Corporation) owned or operated by the 
Department of Transportation or by a corporation organized or 
controlled by the Department, if eligible, shall be a member of 
the Navy Reserve.
  (h) The President may--
          (1) suspend any part of this section during a 
        proclaimed national emergency; and
          (2) when the needs of commerce require, suspend as 
        far and for a period the President considers desirable, 
        subsection (a) of this section for crews of vessels of 
        the United States documented for foreign trade.
  (i)(1) Except as provided in paragraph (3) of this 
subsection, each unlicensed seaman on a fishing, fish 
processing, or fish tender vessel that is engaged in the 
fisheries in the navigable waters of the United States or the 
exclusive economic zone must be--
          (A) a citizen of the United States;
          (B) an alien lawfully admitted to the United States 
        for permanent residence;
          (C) any other alien allowed to be employed under the 
        Immigration and Nationality Act (8 U.S.C. 1101 et 
        seq.); or
          (D) an alien allowed to be employed under the 
        immigration laws of the Commonwealth of the Northern 
        Mariana Islands if the vessel is permanently stationed 
        at a port within the Commonwealth and the vessel is 
        engaged in the fisheries within the exclusive economic 
        zone surrounding the Commonwealth or another United 
        States territory or possession.
  (2) Not more than 25 percent of the unlicensed seamen on a 
vessel subject to paragraph (1) of this subsection may be 
aliens referred to in clause (C) of that paragraph.
  (3) This subsection does not apply to a fishing vessel 
fishing exclusively for highly migratory species (as that term 
is defined in section 3 of the Magnuson-Stevens Fishery 
Conservation and Management Act (16 U.S.C. 1802)).
  (j) Riding gang member. This section does not apply to an 
individual who is a riding gang member.
  (k)(1) Each unlicensed seaman on a passenger vessel of more 
than 70,000 gross tons as measured under section 14302 of this 
title, with capacity for at least 2,000 passengers and 
documented with a coastwise endorsement under chapter 121 of 
this title, shall be--
          (A) a citizen of the United States;
          (B) an alien lawfully admitted to the United States 
        for permanent residence,
          (C) an alien allowed to be employed under the 
        Immigration and Nationality Act (8 U.S.C. 1101 et. 
        seq.), including an alien crewman under Section 1101 
        (15)(D) (i) of that Act; or
          (D) a foreign national who is enrolled in the United 
        States Merchant Marine Academy.
  (2) Not more than 25 percent of the unlicensed seamen on a 
vessel subject to paragraph (1) of this subsection may be 
aliens referred to in subparagraph (B) or (C) of that 
paragraph.
  (3) An unlicensed seaman referred to in paragraph (1)(C) of 
this subsection--
          (A) shall have been employed, for a period of not 
        less than 1 year, on a passenger vessel under the same 
        common ownership or control as the vessel referred to 
        in paragraph (1) of this subsection, as certified by 
        the owner or managing operator of such vessel;
          (B) may be employed only in the steward's department, 
        as defined in the vessel security plan approved by the 
        Secretary pursuant to section 70103(c) of this title, 
        of the vessel; and
                  (C) shall have successfully completed a 
                security check of the relevant domestic and 
                international databases, as appropriate, or any 
                other national security-related information or 
                database.

        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2004


SEC. 3543. AWARD OF ASSISTANCE.

                         [46 U.S.C. 53101 note]

  (a) In General.--If after review of a proposal, the Secretary 
determines that the proposal fulfills the requirements under 
this subtitle, the Secretary [shall, to the extent of the 
availability of appropriations,] may enter into a contract with 
the proposed purchaser and the proposed shipyard for the 
construction of a product tank vessel with assistance under 
this subtitle.
  (b) Amount of Assistance.--The contract shall provide that 
the Secretary shall pay, subject to the availability of 
appropriations, the actual construction cost of the vessel, but 
in no case more than $50,000,000 per vessel.
  (c) Construction in United States.--A contract under this 
section shall require that construction of a vessel with 
assistance under this subtitle shall be performed in a shipyard 
in the United States.
  (d) Documentation of Vessel.--
          (1) Contract requirement.--A contract under this 
        section shall require that, upon delivery of a vessel 
        constructed with assistance under the contract, the 
        vessel shall be documented under chapter 121 of title 
        46, United States Code, with a registry endorsement 
        only.
          (2) Restriction on coastwise endorsement.--A vessel 
        constructed with assistance under this subtitle shall 
        not be eligible for a certificate of documentation with 
        a coastwise endorsement.
          (3) Authority to reflag not applicable.--Section 9(g) 
        of the Shipping Act, 1916, (46 U.S.C. App. 808(g)) 
        shall not apply to a vessel constructed with assistance 
        under this subtitle.
  (e) Emergency Preparedness Agreement.--
          (1) In general.--A contract under this section shall 
        require that the person who will be the operator of a 
        vessel constructed with assistance under the contract 
        shall enter into an Emergency Preparedness Agreement 
        for the vessel under section 53107 of title 46, United 
        States Code, as amended by this Act.
          (2) Treatment as contractor.--For purposes of the 
        application, under paragraph (1), of section 53107 of 
        title 46, United States Code, to a vessel constructed 
        with assistance under this subtitle, the term 
        ``contractor'' as used in that section means the person 
        who will be the operator of a vessel constructed with 
        assistance under this subtitle.
  (f) Additional Terms.--The Secretary shall incorporate in the 
contract the requirements set forth in this subtitle, and may 
incorporate in the contract any additional terms the Secretary 
considers necessary.

                           TITLE 46. SHIPPING


                      SUBTITLE V. MERCHANT MARINE

                  CHAPTER 531. MARITIME SECURITY FLEET

Sec. 53103. Award of operating agreements

    (a) In General.--The Secretary shall require, as a 
condition of including any vessel in the Fleet, that the person 
that is the owner or operator of the vessel for purposes of 
section 53102(c) enter into an operating agreement with the 
Secretary under this section.
    (b) Procedure for Applications.--
            (1) Acceptance of applications.--Beginning no later 
        than 30 days after the effective date of this chapter, 
        the Secretary shall accept applications for enrollment 
        of vessels in the Fleet.
            (2) Action on applications.--Within 90 days after 
        receipt of an application for enrollment of a vessel in 
        the Fleet, the Secretary shall approve the application 
        in conjunction with the Secretary of Defense, and shall 
        enter into an operating agreement with the applicant, 
        or provide in writing the reason for denial of that 
        application.
            (3) Participating fleet vessels.--
                    (A) In general.--The Secretary shall accept 
                an application for an operating agreement for a 
                participating fleet vessel under the priority 
                under subsection (c)(1)(B) only from a person 
                that has authority to enter into an operating 
                agreement for the vessel with respect to the 
                full term of the operating agreement.
                    (B) Vessel under demise charter.--For 
                purposes of subparagraph (A), in the case of a 
                vessel that is subject to a demise charter that 
                terminates by its terms on September 30, 2005 
                (without giving effect to any extension 
                provided therein for completion of a voyage or 
                to effect the actual redelivery of the vessel), 
                or that is terminable at will by the owner of 
                the vessel after such date, only the owner of 
                the vessel shall be treated as having the 
                authority referred to in paragraph (1).
                    (C) Vessel owned by united states citizen 
                trust.--For purposes of subparagraph (B), in 
                the case of a vessel owned by a United States 
                citizen trust, the term ``owner of the vessel'' 
                includes a beneficial owner of the vessel with 
                respect to such trust.
    (c) Priority for Awarding Agreements.--
            (1) In general.--Subject to the availability of 
        appropriations, the Secretary shall enter into 
        operating agreements according to the following 
        priority:
                    (A) New tank vessels.--First, for any tank 
                vessel that--
                            (i) is constructed in the United 
                        States after the effective date of this 
                        chapter;
                            (ii) is eligible to be included in 
                        the Fleet under section 53102(b); and
                            (iii) during the period of an 
                        operating agreement under this chapter 
                        that applies to the vessel, will be 
                        owned and operated by one or more 
                        persons that are citizens of the United 
                        States under section 2 of the Shipping 
                        Act, 1916 (46 U.S.C. App. 802), except 
                        that the Secretary shall not enter into 
                        operating agreements under this 
                        subparagraph for more than 5 such 
                        vessels.
                    (B) Participating fleet vessels.--Second, 
                to the extent amounts are available after 
                applying subparagraphs (A), for any 
                participating fleet vessel, except that the 
                Secretary shall not enter into operating 
                agreements under this subparagraph for more 
                than 47 vessels.
                    (C) Certain vessels operated by section 2 
                citizens.--Third, to the extent amounts are 
                available after applying subparagraphs (A) and 
                (B), for any other vessel that is eligible to 
                be included in the Fleet under section 
                53102(b), and that, during the period of an 
                operating agreement under this chapter that 
                applies to the vessel, will be--
                            (i) owned and operated by one or 
                        more persons that are citizens of the 
                        United States under section 2 of the 
                        Shipping Act, 1916 (46 U.S.C. App. 
                        802); or
                            (ii) owned by a person that is 
                        eligible to document the vessel under 
                        chapter 121 of this title, and operated 
                        by a person that is a citizen of the 
                        United States under section 2 of the 
                        Shipping Act, 1916 (46 U.S.C. App. 
                        802).
                    (D) Other eligible vessels.--Fourth, to the 
                extent amounts are available after applying 
                subparagraphs (A), (B), and (C), for any other 
                vessel that is eligible to be included in the 
                Fleet under section 53102(b).
            (2) Reduction in number of slots for participating 
        fleet vessels.--The number in paragraph (1)(B) shall be 
        reduced by 1--
                    (A) for each participating fleet vessel for 
                which an application for enrollment in the 
                Fleet is not received by the Secretary within 
                the 90-day period beginning on the effective 
                date of this chapter; and
                    (B) for each participating fleet vessel for 
                which an application for enrollment in the 
                Fleet received by the Secretary is not approved 
                by the Secretary and the Secretary of Defense 
                within the 90-day period beginning on the date 
                of such receipt.
            (3) Discretion within priority.--The Secretary--
                    (A) subject to subparagraph (B), may award 
                operating agreements within each priority under 
                paragraph (1) as the Secretary considers 
                appropriate; and
                    (B) shall award operating agreement within 
                a priority--
                            (i) in accordance with operational 
                        requirements specified by the Secretary 
                        of Defense;
                            (ii) in the case of operating 
                        agreements awarded under subparagraph 
                        (C) or (D) of paragraph (1), according 
                        to applicants' records of owning and 
                        operating vessels; and
                            (iii) subject to the approval of 
                        the Secretary of Defense.
            (4) Treatment of tank vessel to be replaced.--
                    (A) For purposes of the application of 
                paragraph (1)(A) with respect to the award of 
                an operating agreement, the Secretary may treat 
                an existing tank vessel that is eligible to be 
                included in the Fleet under section 53102(b) as 
                a vessel that is constructed in the United 
                States after the effective date of this 
                chapter, if--
                            [(i)] (i)(I) a binding contract for 
                        construction in the United States of a 
                        replacement vessel to be operated under 
                        the operating agreement is executed by 
                        not later than 9 months after the first 
                        date amounts are available to carry out 
                        this chapter; and
                            [(ii)] (II) the replacement vessel 
                        is eligible to be included in the Fleet 
                        under section [53102(b).] 53102(b); or
                          (ii)(I) not later than 9 months after 
                        the first date amounts are to available 
                        to carry out this chapter, the operator 
                        of the existing tank vessel enters into 
                        an agreement to charter one or more 
                        tank vessels to be built in the United 
                        States and operated as a documented 
                        vessel or documented vessels; and
                          (II) the combined tonnage of the 
                        documented vessel or vessels to be 
                        constructed under clause (I) is equal 
                        to or greater than the tonnage of the 
                        existing tank vessel subject to an 
                        operating agreement.
                        If the person that is the owner or 
                        operator of the existing tank vessel 
                        owns or operates more than one existing 
                        tank vessel subject to an operating 
                        agreement, the combined tonnage of all 
                        documented vessels to be built under 
                        clause (ii)(I) for that owner or 
                        operator shall be equal to or greater 
                        than the combined tonnage of all such 
                        existing tank vessels owned or operated 
                        by such person that are subject to 
                        operating agreements. For the purpose 
                        of clause (ii), tonnage shall be 
                        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.
                    (B) No payment under this chapter may be 
                made for an existing tank vessel subject to 
                subparagraph (A)(i) for which an operating 
                agreement is awarded under this paragraph after 
                the earlier of--
                            (i) 4 years after the first date 
                        amounts are available to carry out this 
                        chapter; or
                            (ii) the date of delivery of the 
                        replacement tank vessel.
                  (C) Subparagraph (A)(ii) applies only for the 
                period that the operator of the existing tank 
                vessel charters the United States-built vessel 
                or vessels described in such subparagraph. No 
                payment under this chapter may be made for an 
                existing tank vessel subject to subparagraph 
                (A)(ii) for any period that the United States-
                built vessel or vessels described in such 
                subparagraph are not chartered by the operator 
                of the existing tank vessel.
    (d) Limitation.--The Secretary may not award operating 
agreements under this chapter that require payments under 
section 53106 for a fiscal year for more than 60 vessels.

                          ACT OF JUNE 2, 1951

[SEC. 801. VESSEL OPERATIONS REVOLVING FUND; ESTABLISHMENT; USES; 
                    LIMITATIONS.

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

  [For working capital for the ``Vessel Operations Revolving 
Fund'', which is hereby created for the purpose of carrying out 
vessel operating functions of the Secretary of Transportation, 
including charter, operation, maintenance, repair, 
reconditioning, and betterment of merchant vessels under the 
jurisdiction of the Secretary of Transportation, $20,000,000, 
to remain available until expended. Notwithstanding any other 
provision of law, rates for shipping services rendered under 
said Fund shall be prescribed by the Secretary of 
Transportation and the Fund shall be credited with all receipts 
from vessel operating activities conducted thereunder: 
Provided, That the provisions of sections 1(a), 1(c), 3(c) and 
4 of Public Law 17, Seventy-eighth Congress (57 Stat. 45), as 
amended, shall be applicable in connection with such operations 
and to seamen employed through general agents as employees of 
the United States, who may be employed in accordance with 
customary commercial practices in the maritime industry, 
notwithstanding the provisions of any law applicable in terms 
to the employment of persons by the United States: Provided 
further, That such sums as may be determined to be necessary by 
the Secretary of Transportation, with the approval of the 
Bureau of the Budget, but not exceeding 2 per centum of vessel 
operating expenses, may be advanced from this Fund to the 
appropriation ``Salaries and expenses'' for the purposes of 
that appropriation in connection with vessel operating 
functions, but without regard to the limitations on amounts as 
stated therein: Provided further, That notwithstanding any 
other provisions of law, the unexpended balances of any working 
funds or of allocation accounts established, subsequent to 
January 1, 1951, for the activities provided for under this 
appropriation, together with receipts heretofore and hereafter 
received from such activities, may be transferred to and 
consolidated with this Fund, which shall be available for the 
purposes of such working funds or allocation accounts. No money 
made available to the Department of Transportation, for 
Maritime Activities, by this or any other Act shall be used in 
payment for a vessel the title to which is acquired by the 
Government either by requisition or purchase, or the use of 
which is taken either by requisition or agreement, or which is 
insured by the Government and lost while so insured, unless the 
price or hire to be paid therefor, (except in cases where 
section 802 of the Merchant Marine Act, 1936, as amended, is 
applicable) is computed in accordance with subsection 902(a) of 
said Act, as that subsection is interpreted by the General 
Accounting Office.]

SEC. 801. VESSEL OPERATIONS REVOLVING FUND.

  (a) In General.--There is established in the Treasury, for 
the purposes set forth in subsection (b), a Vessel Operations 
Revolving Fund which shall be available without appropriation 
to the Secretary of Transportation. All amounts and all 
receipts and proceeds received by the Fund shall be deposited 
into the Fund, become available for the purposes of the Fund, 
and shall remain available until expended.
  (b) Uses.--Amounts in the Fund shall be available for--
          (1) all expenses and charges relating to the 
        maintenance, repair, and operation of vessels under the 
        jurisdiction of the Secretary;
          (2) all expenses and charges relating to the 
        maintenance, repair, and operation of the facilities 
        necessary to preserve and maintain such vessels;
          (3) payment of all costs of, and indirect costs that 
        are reasonably related to, contracting, procurement, 
        inspection, storage, management, distribution, and 
        accountability of vessels under the jurisdiction of the 
        Secretary and such property, facilities, and 
        nonpersonal services as the Secretary deems necessary 
        for the operation and maintenance of such vessels;
          (4) expenses incurred in activating, repairing, and 
        deactivating vessels under the jurisdiction of the 
        Secretary;
          (5) the acquisition of such vessels for the National 
        Defense Reserve Fleet as both the Secretary and the 
        Secretary of Navy deem necessary;
          (6) necessary expenses incurred in the protection, 
        preservation, maintenance, acquisition, or use of 
        vessels of the National Defense Reserve Fleet involved 
        in mortgage foreclosure or forfeiture proceedings 
        instituted by the United States Government, including 
        payment of prior claims and liens, expenses of sale, 
        and other related charges; and
          (7) costs and expenses incurred to repair damages to 
        Government property under the jurisdiction or control 
        of the Secretary that is used in connection with the 
        National Defense Reserve Fleet.
  (c) Credits to the Fund.--
          (1) In general.--There shall be credited to and 
        retained by the Fund--
                  (A) all amounts received in connection with 
                vessel operations for vessels under the 
                jurisdiction of the Secretary; except that 
                there shall be no surcharge on charter hire or 
                similar collection in connection with vessel 
                operations for the purpose of the reserve 
                described in subsection (c)(2); and
                  (B) any reimbursements, advances, setoffs, 
                refunds, or recoveries arising out of or 
                relating to the operation and maintenance of 
                vessels of the National Defense Reserve Fleet 
                under the jurisdiction of the Secretary, 
                including any recoveries from litigation, 
                arbitration, or otherwise.
          (2) Reserve.--There shall be established and retained 
        in the Fund from litigation and arbitration recoveries 
        a reserve, not to exceed $30,000,000 at any one time, 
        for use as a reserve for unscheduled repairs and other 
        necessary expenses in connection with casualties to 
        vessels in the National Reserve Fleet.
  (d) Laws Relating to Seamen.--Subject to the provisions of 
sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943 
(50 U.S.C. App. 1291(a) and (c), 1293(c), 1294), seamen 
employed on vessels in the custody of the Secretary and 
operated through the Secretary's ship managers or general 
agents may be so employed by such ship managers or agents in 
accordance with customary commercial practices in the maritime 
industry without regard to any of the laws on employment of 
persons by the United States.
  (e) Advancements.--With the approval of the Director of the 
Office of Management and Budget, the Secretary may advance 
amounts the Secretary considers necessary from the Fund to the 
Maritime Administration Operations and Training appropriation 
account for purposes of carrying out duties and powers related 
to the maintenance, repair, and operation of vessels under the 
jurisdiction of the Secretary, without regard to the 
limitations on amounts stated in the Operations and Training 
appropriation.''
  (f) Limitations.--
          (1) In general.--Amounts made available to the 
        Secretary for purposes of 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 title 46, United States 
        Code, 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) that is lost while insured by the 
                Government.
          (3) Nonapplicable vessels.--Subparagraph (1) of this 
        section does not apply to a vessel operating under a 
        construction-differential subsidy contract.

                          MERCHANT MARINE ACT

                     TITLE XII--WAR RISK INSURANCE

SEC. 1208. INSURANCE FUND; INVESTMENTS; APPROPRIATIONS.

                         [46 U.S.C. App. 1288]

  (a) The Secretary shall create an insurance fund in the 
Treasury to enable him to carry out the provisions of this 
title. Moneys appropriated by Congress to carry out the 
provisions of this title and all moneys received from premiums, 
salvage, or other recoveries and all receipts in connection 
with this title shall be deposited in the Treasury to the 
credit of such fund. The Secretary of Transportation may 
request the Secretary of the Treasury to invest such portion of 
the Fund as is not, in the judgment of the Secretary of 
Transportation, required to meet the current needs of the fund. 
Such investments shall be made by the Secretary of the Treasury 
in public debt securities of the United States, with maturities 
suitable to the needs of the fund, and bearing interest rates 
determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturity. [Upon 
the request of the Secretary of Transportation, the Secretary 
of the Treasury may invest or reinvest all or any part of the 
fund in securities of the United States or in securities 
guaranteed as to principal and interest by the United States.] 
The Secretary of Transportation may request the Secretary of 
the Treasury to invest such portion of the fund as is not, in 
the judgment of the Secretary of Transportation, required to 
meet the current needs of the fund. Such investments shall be 
made by the Secretary of the Treasury in public debt securities 
of the United States, with maturities suitable to the needs of 
the fund, and bearing interest rates determined by the 
Secretary of the Treasury, taking into consideration current 
market yields on outstanding marketable obligations of the 
United States of comparable maturity. The interest and benefits 
accruing from such securities shall be deposited to the credit 
of the fund.
  (b) Such sums as shall be necessary to carry out the 
provisions of this title are authorized to be appropriated to 
such fund.

                       MERCHANT MARINE ACT, 1936

              TITLE XIII--MARITIME EDUCATION AND TRAINING

SEC. 1303. MAINTENANCE OF ACADEMY.

                         [46 U.S.C. App. 1295b]

  (a) Duty of Secretary.--The Secretary shall maintain the 
Academy for providing instruction to individuals to prepare 
them for service in the merchant marine of the United States.
  (b) Nomination and Appointment of Cadets; Designation and 
Licensing of Individuals From the Trust Territory of the 
Pacific Islands, Western Hemisphere Nations and Nations Other 
Than the United States.--
          (1) Each Senator and Member of the House of 
        Representatives, the Panama Canal Commission, the 
        Governor of the Northern Mariana Islands, and the 
        Delegate from American Samoa. may nominate for 
        appointment as a cadet at the Academy any individual 
        who is--
                  (A) a citizen of the United States or a 
                national of the United States; and
                  (B) a resident of the State represented by 
                such Senator if the individual is nominated by 
                a Senator, a resident of the State in which the 
                congressional district represented by such 
                Member of the House of Representatives is 
                located if the individual is nominated by a 
                Member of the House of Representatives (or a 
                resident of Guam, the Virgin Islands, the 
                District of Columbia, the Commonwealth of 
                Puerto Rico, or American Samoa if the 
                individual is nominated by a Member of the 
                House of Representatives representing such 
                area), a resident of the area or installation 
                described in paragraph (3)(A)(ii), or a son or 
                daughter of the personnel described in such 
                paragraph, if the individual is nominated by 
                the Panama Canal Commission, or a resident of 
                the Northern Mariana Islands if the individual 
                is nominated by the Governor of the Northern 
                Mariana Islands.
          (2)(A) The Secretary shall establish minimum 
        requirements for the individuals nominated pursuant to 
        paragraph (1) and shall establish a system of 
        competition for the selection of individuals qualified 
        for appointment as cadets at the Academy.
          (B) Such system of competition shall determine the 
        relative merit of appointing each such individual to 
        the Academy through the use of competitive 
        examinations, an assessment of the academic background 
        of the individual, and such other factors as are 
        considered effective indicators of motivation and the 
        probability of successful completion of training at the 
        Academy.
          (C) Notwithstanding the Rehabilitation Act (29 U.S.C. 
        701 et seq.) or any other provision of the Merchant 
        Marine Act, 1936 (46 U.S.C. App. 1101 et seq.), an 
        individual appointed as a cadet may not be admitted to 
        the Academy as a student, unless at the time of the 
        taking of the official oath upon entry into the 
        Merchant Marine Academy, that individual satisfies the 
        physical and mental requirements of the Department of 
        Defense to be appointed or enlisted as a Midshipman, 
        United States Naval Reserve. Following admission to the 
        Academy, notwithstanding the Rehabilitation Act or any 
        other provision of the Merchant Marine Act, 1936 (46 
        U.S.C. App. 1101 et seq.), such individual may continue 
        as a student only if that individual continues to 
        satisfy the physical and mental standards set forth in 
        this subparagraph unless the Secretary of 
        Transportation waives the standards for such individual 
        upon good cause shown. The decision of the Secretary as 
        to whether to grant such waiver shall be final.
          (3)(A) Qualified individuals nominated pursuant to 
        paragraph (1) shall be selected each year for 
        appointment as cadets at the Academy to fill positions 
        allocated as follows:
                  (i) Positions shall be allocated each year 
                for individuals who are residents of each State 
                and are nominated by the Members of the 
                Congress from such State in proportion to the 
                representation in Congress from that State.
                  (ii) Two positions shall be allocated each 
                year for individuals nominated by the Panama 
                Canal Commission who are sons or daughters of 
                residents of any area or installation located 
                in the Republic of Panama which is made 
                available to the United States pursuant to 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 sons or daughters of personnel of 
                the United States Government and the Panama 
                Canal Commission residing in the Republic of 
                Panama, nominated by the Panama Canal 
                Commission.
                  (iii) One position shall be allocated each 
                year for an individual who is a resident of 
                Guam and is nominated by the Delegate to the 
                House of Representatives from Guam.
                  (iv) One position shall be allocated each 
                year for an individual who is a resident of the 
                Virgin Islands and is nominated by the Delegate 
                to the House of Representatives from the Virgin 
                Islands.
                  (v) One position shall be allocated each year 
                for an individual who is a resident of the 
                Northern Mariana Islands and is nominated by 
                the Governor of the Northern Mariana Islands.
                  (vi) One position shall be allocated each 
                year for an individual who is a resident of 
                American Samoa and is nominated by the Delegate 
                to the House of Representatives from American 
                Samoa.
                  (vii) Four positions shall be allocated each 
                year for individuals who are residents of the 
                District of Columbia and are nominated by the 
                Delegate to the House of Representatives from 
                the District of Columbia.
                  (viii) One position shall be allocated each 
                year for an individual who is a resident of the 
                Commonwealth of Puerto Rico and is nominated by 
                the Resident Commissioner to the United States 
                from Puerto Rico.
          (B) The Secretary shall make appointments of 
        qualified individuals to fill the positions allocated 
        pursuant to subparagraph (A) (from among the 
        individuals nominated pursuant to paragraph (1)) in the 
        order of merit determined pursuant to paragraph (2)(B) 
        among residents of each State, Guam, the Virgin 
        Islands, the Northern Mariana Islands, American Samoa, 
        the District of Columbia, and the Commonwealth of 
        Puerto Rico and among individuals nominated by the 
        Panama Canal Commission.
          (C) If positions are not filled after the 
        appointments are made pursuant to subparagraph (B), the 
        Secretary shall make appointments of qualified 
        individuals to fill such positions from among all 
        individuals nominated pursuant to paragraph (1) in the 
        order of merit determined pursuant to paragraph (2)(B) 
        among all such individuals.
          (D) In addition, the Secretary may each year appoint 
        without competition as cadets at the Academy not more 
        than 40 qualified individuals possessing qualities 
        deemed to be of special value to the Academy. In making 
        such appointments the Secretary shall attempt to 
        achieve a national demographic balance at the Academy.
          (E) No preference shall be granted in selecting 
        individuals for appointment as cadets at the Academy 
        because one or more members of the immediate family of 
        any such individual are alumni of the Academy.
          (F) Any citizen of the United States selected for 
        appointment pursuant to this paragraph must agree to 
        apply for midshipman status in the United States Navy 
        Reserve (including the Merchant Marine Reserve, United 
        States Navy Reserve) before being appointed as a cadet 
        at the Academy.
          (G) For purposes of this paragraph, the term 
        ``State'' means the several States.
          (4)(A) In addition to paragraph (3), the Secretary 
        may permit, upon designation by the Secretary of the 
        Interior, individuals from the Trust Territory of the 
        Pacific Islands to receive instruction at the Academy.
          (B) Not more than 4 individuals may receive 
        instruction under this paragraph at any one time.
          (C) Any individual receiving instruction under the 
        authority of this paragraph shall receive the same 
        allowances and shall be subject to the same rules and 
        regulations governing admission, attendance, 
        discipline, resignation, discharge, dismissal, and 
        graduation as cadets at the Academy appointed from the 
        United States, subject to such exceptions as shall be 
        jointly agreed upon by the Secretary and the Secretary 
        of the Interior.
          (5)(A) In addition to paragraphs (3) and (4), the 
        President may designate individuals from nations 
        located in the Western Hemisphere other than the United 
        States to receive instruction at the Academy.
          (B) Not more than 12 individuals may receive 
        instruction under this paragraph at any one time, and 
        not more than 2 individuals receiving instruction under 
        this paragraph at any one time may be from the same 
        nation. (C) Any individual receiving instruction under 
        this subparagraph is entitled to the same allowances 
        and shall be subject to the same rules and regulations 
        governing admission, attendance, discipline, 
        resignation, discharge, dismissal, and graduation as 
        cadets at the Academy appointed from the United States.
          (6)(A) In addition to paragraphs (3), (4), and (5), 
        the Secretary may permit, upon approval of the 
        Secretary of State, individuals from nations other than 
        the United States to receive instruction at the 
        Academy.
          (B) Not more than 30 individuals may receive 
        instruction under this paragraph at any one time.
          (C) The Secretary shall insure that each nation from 
        which an individual comes to receive instruction under 
        this paragraph shall reimburse the Secretary for the 
        cost of such instruction (including the same allowances 
        as received by cadets at the Academy appointed from the 
        United States) as determined by the Secretary.
          (D) Any individual receiving instruction at the 
        Academy under this paragraph shall be subject to the 
        same rules and regulations governing admission, 
        attendance, discipline, resignation, discharge, 
        dismissal, and graduation as cadets at the Academy 
        appointed from the United States.
          (7)(A) The Secretary may permit, upon approval of the 
        Secretary of State, additional individuals from the 
        Republic of Panama to receive instruction at the 
        Academy, in addition to those individuals appointed 
        under paragraphs (3), (4), (5), and (6) of this 
        subsection.
          (B) The Secretary shall be reimbursed for the cost of 
        that instruction (including the same allowances as 
        received by cadets at the Academy appointed from the 
        United States) as determined by the Secretary.
          (C) An individual receiving instructions at the 
        Academy under this paragraph shall be subject to the 
        same rules and regulations governing admission, 
        attendance, discipline, resignation, discharge, 
        dismissal, and graduation as cadets at the Academy 
        appointed from the United States.
          (8) An individual appointed as a cadet under 
        paragraph (3), or receiving instruction under paragraph 
        (4), (5), (6), or (7) of this subsection is not 
        entitled to hold a license authorizing service on a 
        merchant marine vessel of the United States solely by 
        reason of graduation from the Academy.
  (c) Appointment of cadet as midshipman in the United States 
Navy Reserve.--
          (1) Any citizen of the United States who is appointed 
        as a cadet at the Academy shall be appointed by the 
        Secretary of the Navy as a midshipman in the United 
        States Navy Reserve (including the Merchant Marine 
        Reserve, United States Navy Reserve).
          (2) The Secretary of the Navy shall provide for 
        cadets of the Academy who are midshipmen in the United 
        States Navy Reserve to be issued an identification card 
        (referred to as a "military ID card") and to be 
        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) The Secretary of the Navy shall carry out 
        paragraphs (1) and (2) in coordination with the 
        Secretary.
  (d) Uniforms, Textbooks, and Transportation Allowances.--The 
Secretary shall provide to any cadet at the Academy all 
required uniforms and textbooks and allowances for 
transportation (including reimbursement of traveling expenses) 
while traveling under orders as a cadet of the Academy.
  (e) Commitment Agreements.--
          (1) Each individual appointed as a cadet at the 
        Academy after the date occurring 6 months after the 
        effective date of the Maritime Education and Training 
        Act of 1980, who is a citizen of the United States, 
        shall as a condition of appointment to the Academy sign 
        an agreement committing such individual--
                  (A) to complete the course of instruction at 
                the Academy;
                  (B) to fulfill the requirements for a license 
                as an officer in the merchant marine of the 
                United States on or before the date of 
                graduation from the Academy of such individual;
                  (C) to maintain a valid license as an officer 
                in the merchant marine of the United States for 
                at least 6 years following the date of 
                graduation from the Academy of such individual, 
                accompanied by the appropriate national and 
                international endorsements and certification as 
                required by the United States Coast Guard for 
                service aboard vessels on domestic and 
                international voyages;
                  [(D) to apply for an appointment as, to 
                accept if tendered an appointment as, and to 
                serve as a commissioned officer in the United 
                States Navy Reserve (including the Merchant 
                Marine Reserve, United States Navy Reserve), 
                the United States Coast Guard Reserve, or any 
                other Reserve unit of an armed force of the 
                United States, for at least 6 years following 
                the date of graduation from the Academy of such 
                individual;]
                  (D) in the case of an individual who executes 
                a commitment agreement under this subsection 
                after January 1, 2007, to serve and perform all 
                required duties and comply with all the 
                requirements of a commissioned officer in the 
                Selective Reserve of the United States Navy 
                (including the Merchant Marine Reserve), the 
                U.S. Public Health Service, or the National 
                Oceanic and Atmospheric Administration for a 
                period of at least 5 years following the date 
                of appointment, followed by from 1 to 3 years 
                in the Selective Reserve or Inactive Ready 
                Reserve, as provided by regulations prescribed 
                by the Secretary of Defense, (for a total of 
                service no greater than 8 years) or, with the 
                approval of the Secretary of Defense, to accept 
                an appointment in any other Reserve component 
                of an armed force of the United States or 
                perform such substitute service as determined 
                by the Secretary of Defense to be the 
                equivalent thereof;
                  (E) to serve the foreign and domestic 
                commerce and the national defense of the United 
                States for at least 5 years following the date 
                of graduation from the Academy--
                          (i) as a merchant marine officer 
                        serving on vessels documented under the 
                        laws of the United States or on vessels 
                        owned and operated by the United States 
                        or by any State or territory of the 
                        United States;
                          (ii) 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 
                        clause (i) is not available to such 
                        individual;
                          (iii) 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] 
                        Administration or the U.S. Public 
                        Health Service, or in other maritime-
                        related employment with the Federal 
                        Government which serves the national 
                        security interests of the United 
                        States, as determined by the Secretary; 
                        or
                          (iv) by combining the services 
                        specified in clauses (i), (ii), and 
                        (iii); and
                  (F) to report to the Secretary on the 
                compliance by the individual to this paragraph.
          (2)(A) If the Secretary determines that any 
        individual who has attended the Academy for not less 
        than 2 years has failed to fulfill the part of the 
        agreement required by paragraph (1)(A), such individual 
        may be ordered by the Secretary of Defense to active 
        duty in one of the armed forces of the United States to 
        serve for a period of time not to exceed 2 years. In 
        cases of hardship as determined by the Secretary, the 
        Secretary may waive this provision in whole or in part.
          (B) If the Secretary of Defense is unable or 
        unwilling to order an individual to active duty under 
        subparagraph (A), 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 may recover from the individual 
        the cost of education provided by the Federal 
        Government.
          (3)(A) If the Secretary determines that an individual 
        has failed to fulfill any part of the agreement 
        required by paragraph (1), as described in paragraph 
        (1)(B), (C), (D), (E), or (F), such individual may be 
        ordered to active duty to serve a period of time not 
        less than 3 years and not more than the unexpired 
        portion, as determined by the Secretary, of the service 
        required by paragraph (1)(E). The Secretary, in 
        consultation with the Secretary of Defense, shall 
        determine in which service the individual shall be 
        ordered to active duty to serve such period of time. In 
        cases of hardship, as determined by the Secretary, the 
        Secretary may waive this provision in whole or in part.
          (B) If the Secretary of Defense is unable or 
        unwilling to order an individual to active duty under 
        subparagraph (A), 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 may recover from the individual 
        the cost of education provided and may reduce the 
        amount to be recovered from such individual to reflect 
        partial performance of service obligations and such 
        other factors as the Secretary determines merit such a 
        reduction.
          (4) To aid in the recovery of the cost of education 
        provided by the Federal Government pursuant to a 
        commitment agreement under this section, the Secretary 
        may request the Attorney General to begin court 
        proceedings, and the Secretary may make use of the 
        Federal debt collection procedures in chapter 176 of 
        title 28, United States Code, or other applicable 
        administrative remedies.
          (5) The Secretary may defer the service commitment of 
        any individual pursuant to subparagraph (E) of 
        paragraph (1) (as specified in the agreement required 
        by such paragraph) for a period of not more than 2 
        years if such individual is engaged in a graduate 
        course of study approved by the Secretary, except that 
        any deferment of service as a commissioned officer 
        pursuant to paragraph (1)(E) must be approved by the 
        Secretary of the military department (including the 
        Secretary of Commerce with respect to the National 
        Oceanic and Atmospheric Administration) which has 
        jurisdiction over such service.
          (6)(A) In order to meet the requirements of paragraph 
        (1)(D), a graduate of the Academy shall perform all 
        directed training and obey all orders and directions 
        required by the relevant Reserve Component and remain 
        qualified in Ready Reserve classification for a period 
        of not less than 6 years, as required by the 
        regulations of the applicable armed service unless such 
        compliance is waived by the Secretary of Defense or the 
        Secretary of the Department in which the United States 
        Coast Guard is operating.
          (B) Notwithstanding section 552a of title 5, United 
        States Code, the Secretary of Defense or the Secretary 
        of the Department in which the Coast Guard is 
        operating, and the Administrator of the National 
        Oceanic and Atmospheric Administration--
                          (i) shall report the status of 
                        obligated service of an individual 
                        graduate upon request of the Maritime 
                        Administration; and
                          (ii) may, in their discretion, notify 
                        the Maritime Administration of the 
                        default in performance of a graduate in 
                        the performance of the graduate's 
                        duties, either on active duty or in the 
                        Ready Reserve Component of their 
                        respective service, or as a 
                        commissioned officer of the National 
                        Oceanic and Atmospheric Administration.
                  (C) A report or notice under subparagraph (B) 
                shall identify the graduate determined to have 
                failed to comply with service obligation 
                requirements and provide all required 
                information as to why such graduate has failed 
                to comply. Upon receipt of such a report or 
                notice, such graduate may be considered to be 
                in default of the graduate's service 
                obligations by the Maritime Administration, and 
                be subject to all remedies the Maritime 
                Administration may have with respect to such a 
                default.
          (7) An individual who graduates from the U. S. 
        Merchant Marine Academy after June 30, 2007, and meets 
        the service commitment described in paragraph 
        (1)(E)(iii) of this subsection shall be excused from 
        meeting the requirements of subparagraphs (1)(C) and 
        (1)(D).
          (8) The Secretary may modify or waive any of the 
        terms and conditions set forth in paragraph (1) through 
        the imposition of alternative service requirements.
  (f) Places of Training.--The Secretary may provide for the 
training of cadets at the Academy--
          (1) on vessels owned or subsidized by the United 
        States;
          (2) on other vessels documented under the laws of the 
        United States if the owner of any such vessel 
        cooperates in such use;
          (3) in shipyards or plants and with any industrial or 
        educational organizations; and
          (4) on any other vessel considered by the Secretary 
        to be necessary or appropriate or in the national 
        interest.
  (g) Degrees Awarded.--
          (1) Bachelor's degree.--The Superintendent of the 
        Academy may confer the degree of bachelor of science 
        upon any individual who has met the conditions 
        prescribed by the Secretary and who, if a citizen of 
        the United States, has passed the examination for a 
        merchant marine officer's license. No individual may be 
        denied a degree under this subsection because the 
        individual is not permitted to take such examination 
        solely because of physical disqualification.
          (2) Master's degree.--The Superintendent of the 
        Academy may confer a master's degree upon any 
        individual who has met the conditions prescribed by the 
        Secretary. Any master's degree program may be funded 
        through non-appropriated funds. In order to maintain 
        the appropriate academic standards, the program shall 
        be accredited by the appropriate accreditation body. 
        The Secretary may make regulations necessary to 
        administer such a program.
  (h) Board of Visitors.--
          (1) A Board of Visitors to the Academy shall be 
        established, for a term of two years commencing at the 
        beginning of each Congress, to visit the Academy 
        annually on a date determined by the Secretary and to 
        make recommendations on the operation of the Academy.
          (2) The Board shall be composed of--
                  (A) 2 Senators appointed by the chairman of 
                the Commerce, Science, and Transportation 
                Committee of the Senate;
                  (B) 3 Members of the House of Representatives 
                appointed by the chairman of the Merchant 
                Marine and Fisheries Committee 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 chairman of the Commerce, Science, 
                and Transportation Committee of the Senate and 
                the chairman of the Merchant Marine and 
                Fisheries Committee of the House of 
                Representatives, as ex officio members.
          (3) Whenever a member of the Board is unable to 
        attend the annual meeting provided in paragraph (1), 
        another individual may be appointed in the manner 
        provided by paragraph (2) as a substitute for such 
        member.
          (4) The chairmen of the Commerce, Science, and 
        Transportation Committee of the Senate and the Merchant 
        Marine and Fisheries Committee of the House of 
        Representatives may designate staff members of such 
        committees to serve without reimbursement as staff for 
        the Board.
          (5) While away from their homes or regular places of 
        business in the performance of services for the Board, 
        members of the Board and any staff members designated 
        under paragraph (4) shall be allowed travel expenses, 
        including per diem in lieu of subsistence, in the same 
        manner as persons employed intermittently in the 
        Government service are allowed expenses under section 
        5703 of title 5, United States Code.
  (i) Advisory Board.--
          (1) An Advisory Board to the 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.
          (2) The Advisory Board shall be composed of not more 
        than 7 persons of distinction in education and other 
        fields relating to the Academy who shall be appointed 
        by the Secretary for terms not to exceed 3 years and 
        may be reappointed.
          (3) The Secretary shall appoint a chairman from among 
        the members of the Advisory Board.
          (4) While away from their homes or regular places of 
        business in the performance of service for the Advisory 
        Board, members of the Advisory Board shall be allowed 
        travel expenses, including per diem in lieu of 
        subsistence, in the same manner as persons employed 
        intermittently in the Government service are allowed 
        expenses under section 5703 of title 5, United States 
        Code.
          (5) The Federal Advisory Committee Act (5 U.S.C. App. 
        1 et seq.) shall not apply to the Advisory Board 
        established pursuant to this subsection.
  (j) Limitation on Charges and Fees for Attendance.--
          (1) Except as provided in paragraph (2), no charge or 
        fee for tuition, room, or board for attendance at the 
        Academy may be imposed unless the charge or fee is 
        specifically authorized by a law enacted after October 
        5, 1994.
          (2) The prohibition specified in paragraph (1) does 
        not apply with respect to any item or service provided 
        to cadets for which a charge or fee is imposed as of 
        October 5, 1994. The Secretary of Transportation shall 
        notify Congress of any change made by the Academy in 
        the amount of a charge or fee authorized under this 
        paragraph.

                       MERCHANT MARINE ACT, 1936

              TITLE XIII--MARITIME EDUCATION AND TRAINING

SEC. 1304. STATE MARITIME ACADEMIES.

                         [46 U.S.C. App. 1295c]

  (a) Cooperation and Assistance.--The Secretary shall 
cooperate with and assist any State maritime academy in 
providing instruction to individuals to prepare them for 
service in the merchant marine of the United States.
  (b) Regional Maritime Academies.--The Governors of all States 
or territories of the United States, or both, cooperating to 
sponsor a regional maritime academy shall designate in writing 
one State or territory of the United States, from among the 
sponsoring States or territories, or both, to conduct the 
affairs of such regional maritime academy. Any regional 
maritime academy shall be eligible for assistance from the 
Federal Government on the same basis as any State maritime 
academy sponsored by a single State or territory of the United 
States.
  (c) Training Vessels.--
          (1)(A) The Secretary may furnish for training 
        purposes any suitable vessel under the control of the 
        Secretary or provided under subparagraph (B), or 
        construct and furnish a suitable vessel if such a 
        vessel is not available, to any State maritime academy 
        meeting the requirements of subsection (f)(1). Any such 
        vessel--
                  (i) shall be repaired, reconditioned, and 
                equipped (including supplying all apparel, 
                charts, books, and instruments of navigation) 
                as necessary for use as a training ship;
                  (ii) shall be furnished to such State 
                maritime academy only after application for 
                such vessel is made in writing by the Governor 
                of the State or territory sponsoring such State 
                maritime academy or, with respect to a regional 
                maritime academy the Governor of the State or 
                territory designated pursuant to subsection 
                (b);
                  (iii) shall be furnished to such State 
                maritime academy only if a suitable port for 
                the safe mooring of such vessel is available 
                while it is being used by such academy;
                  (iv) shall be maintained in good repair by 
                the Secretary; and
                  (v) shall remain the property of the United 
                States.
          (B) Any department or agency of the United States may 
        provide to the Secretary to be furnished to any State 
        maritime academy any vessel (including equipment) which 
        is suitable for the purposes of this paragraph and 
        which can be provided without detriment to the service 
        to which such vessel is assigned. (2) (A) The Secretary 
        shall, subject to the availability of appropriations, 
        pay to each State maritime academy the amount of the 
        costs of all fuel consumed by any vessel furnished 
        under paragraph (1) while such vessel is being used for 
        training purposes by such academy.
          (B) The amount of the payment to a State maritime 
        academy under this paragraph shall not exceed--
                  (i) $100,000 for fiscal year 2006;
                  (ii) $200,000 for fiscal year 2007; and
                  (iii) $300,000 for fiscal year 2008 and each 
                fiscal year thereafter.
          (3)(A) The Secretary may provide for the training of 
        individuals attending a State maritime academy--
                  (i) on vessels owned or subsidized by the 
                United States;
                  (ii) on other vessels documented under the 
                laws of the United States if the owner of any 
                such vessel cooperates in such use; and
                  (iii) in shipyards or plants and with any 
                industrial or educational organizations.
          (B) While traveling under orders for purposes of 
        receiving training under this paragraph, any individual 
        who is attending a State maritime academy shall receive 
        from the Secretary allowances for transportation 
        (including reimbursement of traveling expenses) in 
        accordance with any regulations promulgated by the 
        Secretary.
  (d) Annual Payments.--
          (1)(A) The Secretary may enter into an agreement, 
        which shall be effective for not more than 4 years, 
        with one State maritime academy (not including regional 
        maritime academies) located in each State or territory 
        of the United States which meets the requirements of 
        subsection (f)(1), and with each regional maritime 
        academy which meets the requirements of subsection 
        (f)(1), to make annual payments to each such academy 
        for the maintenance and support of such academy.
          (B) Subject to subparagraph (C), the annual payment 
        to such State maritime academy 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, and to 
        such regional maritime academy shall be at least equal 
        to the amount given the academy by all States and 
        territories cooperating to sponsor the academy.
          (C) The amount under subparagraph (B) may not be more 
        than $ 25,000, except that the amount shall be--
                  (i) $100,000 to such State maritime academy 
                if the academy meets the condition set forth in 
                subsection (f)(2); or
                  (ii) $300,000 for fiscal year 2006, $400,000 
                for fiscal year 2007, and $500,000 for fiscal 
                year 2008 and each fiscal year thereafter to 
                such regional maritime academy if the academy 
                meets the condition set forth in subsection 
                (f)(2).
          (2) 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.
  (e) Detailing of Personnel.--Upon the request of the Governor 
of any State or territory, the President may detail, without 
reimbursement, any of the personnel of the United States Navy, 
the United States Coast Guard, or the United States Maritime 
Service to any State maritime academy to serve as 
superintendents, professors, lecturers, or instructors at such 
academy.
  (f) Conditions to Receiving Payments or Use of Vessels.
          (1) As a condition to receiving any payment or the 
        use of any vessel under this section, any State 
        maritime academy shall--
                  (A) 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;
                  (B) agree in writing to conform to such 
                standards for courses, training facilities, 
                admissions, and instruction as are established 
                by the Secretary after consultation with the 
                superintendents of the State maritime 
                academies; and
                  (C) 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 shall pass the 
                examination administered by the Coast Guard 
                required for issuance of a license under 
                section 7101 of title 46, United States Code.
          (2) As a condition to receiving an annual payment of 
        any amount in excess of $25,000 under subsection (d), a 
        State maritime academy shall agree to admit to such 
        academy each year a number of individuals who meet the 
        admission requirements of such academy and who are 
        citizens of the United States residing in States and 
        territories of the United States other than the States 
        or territories, or both, supporting such academy. The 
        Secretary shall determine the number of individuals 
        under this paragraph for each State maritime academy so 
        that such number does not exceed one-third of the total 
        number of individuals attending such academy at any 
        time.
  (g) Student Incentive Payment Agreements.--
          (1) The Secretary may enter into an agreement, which 
        shall be effective for not more than 4 academic years, 
        with any individual, who is a citizen of the United 
        States and is attending a State maritime academy which 
        entered into an agreement with the Secretary under 
        subsection (d)(1), to make student incentive payments 
        to such individual, which payments shall be in amounts 
        equaling $4,000 for each academic year and which 
        payments shall be--
                  (A) allocated among the various State 
                maritime academies in a fair and equitable 
                manner;
                  (B) used to assist the individual in paying 
                the cost of uniforms, books, and subsistence; 
                and
                  (C) paid by the Secretary as the Secretary 
                shall prescribe while the individual is 
                attending the academy.
          [(2) Each agreement entered into under paragraph (1) 
        shall require the individual to accept midshipman and 
        enlisted reserve status in the United States Navy 
        Reserve (including the Merchant Marine Reserve, United 
        States Navy Reserve) before receiving any student 
        incentive payments under this subsection.]
          (2) Each agreement entered into under paragraph (1) 
        shall require the individual to accept enlisted reserve 
        status in the United States Naval Reserve (including 
        the Merchant Marine Reserve, United States Naval 
        Reserve) or the United States Coast Guard Reserve 
        before receiving any student incentive payments under 
        this subsection.
          (3) Each agreement entered into under paragraph (1) 
        shall obligate the individual receiving student 
        incentive payments under the agreement--
                  (A) to complete the course of instruction at 
                the State maritime academy which the individual 
                is attending;
                  (B) to take the examination for a license as 
                an officer in the merchant marine of the United 
                States on or before the date of graduation from 
                such State maritime academy of such individual 
                and to fulfill the requirements for such 
                license not later than 3 months after such 
                graduation date;
                  (C) to maintain a valid license as an officer 
                in the merchant marine of the United States for 
                at least 6 years following the date of 
                graduation from such State maritime academy of 
                such individual, accompanied by the appropriate 
                national and international endorsements and 
                certification as required by the United States 
                Coast Guard for service aboard vessels on 
                domestic and international voyages;
                  (D) to accept if tendered an appointment as, 
                and to serve as a commissioned officer in the 
                United States Navy Reserve (including the 
                Merchant Marine Reserve, United States Navy 
                Reserve), the United States Coast Guard 
                Reserve, or any other reserve unit of an armed 
                force of the United States, for at least 6 
                years following the date of graduation from 
                such State maritime academy of such individual;
                  (E) to serve the foreign and domestic 
                commerce and the national defense of the United 
                States for at least 3 years following the date 
                of graduation from the Academy--
                          (i) as a merchant marine officer 
                        serving on vessels documented under the 
                        laws of the United States or on vessels 
                        owned and operated by the United States 
                        or by any State or territory of the 
                        United States;
                          (ii) 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 
                        clause (i) is not available to such 
                        individual;
                          (iii) 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 employment with the 
                        Federal Government which serves the 
                        national security interests of the 
                        United States, as determined by the 
                        Secretary; or
                          (iv) by combining the services 
                        specified in clauses (i), (ii), and 
                        (iii); and (F) to report to the 
                        Secretary on the compliance by the 
                        individual to this paragraph.
          (4)(A) If the Secretary determines that an individual 
        who has accepted the payment described in paragraph (1) 
        for a minimum of 2 academic years has failed to fulfill 
        the part of the agreement required by paragraph (1) and 
        described in paragraph (3)(A), such individual may be 
        ordered by the Secretary of Defense to active duty in 
        the Armed Forces of the United States to serve for a 
        period of time not to exceed 2 years. In cases of 
        hardship, as determined by the Secretary, the Secretary 
        may waive this provision in whole or in part.
          (B) If the Secretary of Defense is unable or 
        unwilling to order an individual to active duty under 
        subparagraph (A), 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--(i) subject to clause (ii), may 
        recover from the individual the amount of student 
        incentive payments, plus interest and attorneys fees; 
        and (ii) may reduce the amount to be recovered from 
        such individual to reflect partial performance of 
        service obligations and such other factors as the 
        Secretary determines merit such reduction.
          (5)(A) If the Secretary determines that an individual 
        has failed to fulfill any part of the agreement 
        required by paragraph (1), as described in paragraph 
        (3)(B), (C), (D), (E), or (F), such individual may be 
        ordered to active duty to serve a period of time not 
        less than 2 years and not more than the unexpired 
        portion, as determined by the Secretary, of the service 
        required by paragraph (3)(E). The Secretary, in 
        consultation with the Secretary of Defense, shall 
        determine in which service the individual shall be 
        ordered to active duty to serve such period of time. In 
        cases of hardship, as determined by the Secretary, the 
        Secretary may waive this provision in whole or in part.
          (B) If the Secretary of Defense is unable or 
        unwilling to order an individual to active duty under 
        subparagraph (A), 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--
                  (i) subject to clause (ii), may recover from 
                the individual the amount of student incentive 
                payments, plus interest and attorneys fees; and
                  (ii) may reduce the amount to be recovered 
                from such individual to reflect partial 
                performance of service obligations and such 
                other factors as the Secretary determines merit 
                such reduction.
          (6) To aid in the recovery of student incentive 
        payments plus interest and attorneys fees the Secretary 
        may request the Attorney General to begin court 
        proceedings, and the Secretary may make use of the 
        Federal debt collection procedures in chapter 176 of 
        title 28, United States Code, and other applicable 
        administrative remedies.
          (7) The Secretary may defer the service commitment of 
        any individual pursuant to subparagraph (E) of 
        paragraph (3) (as specified in the agreement required 
        by such paragraph) for a period of not more than 2 
        years if such individual is engaged in a graduate 
        course of study approved by the Secretary, except that 
        any deferment of service as a commissioned officer 
        pursuant to subparagraph (E) of such paragraph must be 
        approved by the Secretary of the military department 
        (including the Secretary of Commerce with respect to 
        the National Oceanic and Atmospheric Administration) 
        which has jurisdiction over such service.
          (8) This subsection shall apply only to individuals 
        first entering a State maritime academy after the date 
        occurring 6 months after the effective date of the 
        Maritime Education and Training Act of 1980.
  (h) Appointment of Cadet as Midshipman in United States Navy 
Reserve.--Any citizen of the United States attending a State 
maritime academy may be appointed by the Secretary of the Navy 
as a midshipman in the United States Navy Reserve (including 
the Merchant Marine Reserve, United States Navy Reserve).

                       MERCHANT MARINE ACT, 1936

               TITLE XIII--MARINE EDUCATION AND TRAINING

SEC. 1309. OPERATION OF THE GLOBAL MARITIME AND TRANSPORTATION SCHOOL.

  (a) Operation as Nonappropriated Fund Instrumentality.--After 
the date of enactment of the Maritime Administration 
Improvement Act of 2006, the Global Maritime and Transportation 
School shall continue to operate as a nonappropriated fund 
instrumentality of the United States under the jurisdiction of 
the Department of Transportation, Maritime Administration.
  (b) Activities.--
          (1) In general.--Under the general supervision of the 
        Department of Transportation, Maritime Administration, 
        the school shall develop, administer, and provide 
        educational, training, and professional development 
        activities, including educational activities, for 
        Federal agencies, Federal employees, nonprofit 
        organizations, other entities, and members of the 
        general public, as well as carry out such other 
        projects and activities that may be authorized by the 
        Superintendent.
          (2) Training services.--The training services and 
        educational activities provided by the school shall be 
        available to the Armed Forces of the United States and 
        Commissioned Officers of the National Oceanic and 
        Atmospheric Administration, Federal and State agencies, 
        Federal and State employees, nonprofit organizations, 
        private companies or organizations, and private 
        individuals of the United States or foreign countries 
        friendly to the United States.
  (c) Fees and Donations.--
          (1) Collection of fees.--The school may charge and 
        retain fair and reasonable fees for the activities 
        provided.
          (2) Acceptance and making of donations.--
                  (A) The school may not accept any gifts of 
                services or other items from the United States 
                of America. The school may accept, use, hold, 
                dispose, and administer gifts, bequests, and 
                devises of money, securities, and other real or 
                personal property made for the benefit of, or 
                in connection with the school from parties 
                other than the United States of America.
                  (B) The school shall not accept a donation 
                from a person that is actively engaged in a 
                procurement activity with the school or has an 
                interest that may be substantially affected by 
                the performance or nonperformance of an 
                official duty of a member of the Board or an 
                employee of the school.
                  (C) The school is authorized to make gifts to 
                the Department of Transportation and the 
                Secretary is authorized to accept gifts from 
                the school for any purpose.
          (3) Not federal funds.--Fees collected under 
        paragraph (1) and amounts received under paragraph (2) 
        shall not be considered to be Federal funds and shall 
        not be required to be deposited in the Treasury of the 
        United States. The school shall not be funded by 
        appropriated funds.
  (d) Use of USMMA Faculty and Staff.--
          (1) Payment.--The school may provide payment to 
        United States Merchant Marine Academy faculty and staff 
        for teaching and other services for the school, but 
        only to the extent that the provision of such teaching 
        or services does not interfere or conflict with the 
        official duties of the faculty and staff and are 
        approved by the Superintendent.
          (2) Contracting authority.--The Academy may enter 
        into contracts with the school to provide faculty and 
        staff of the Academy for teaching and other services 
        and, to the extent of the actual costs incurred by the 
        Academy under said contracts, credit such funds 
        received under such contracts to the Academy's 
        appropriations, notwithstanding those provisions of law 
        relating to the deposit of miscellaneous receipts into 
        the Treasury.
  (e) General Administration.--
          (1) Authority of superintendent.--The Superintendent 
        is responsible for the overall supervision and 
        administration of the school and the determination of 
        its policies. In implementing this responsibility, the 
        Superintendent shall appoint members to the Board and 
        shall designate one member as the Senior Managing 
        Director and may designate other Managing Directors as 
        necessary.
          (2) Authority of the board.--The Superintendent may 
        delegate to the Board the Superintendent's 
        responsibility to advise and oversee the supervision 
        and administration of the school. The Board may consist 
        of both United States Merchant Marine Academy employees 
        and non-Academy employees, as determined by the 
        Superintendent. The Board shall be subject to 
        regulation by the Secretary and shall report to the 
        Superintendent.
          (3) Authority of the senior managing director.--The 
        Superintendent may delegate to the Senior Managing 
        Director of the school the authority to manage, 
        administer, and operate the school.
          (4) Duties of the managing directors.--The Senior 
        Managing Director shall be responsible, subject to the 
        supervision and direction of the Board and the 
        Superintendent, for carrying out the functions of the 
        school. All other Managing Directors shall be 
        responsible, subject to the supervision and direction 
        of the Senior Managing Director, for carrying out the 
        functions of the school.
          (5) Borrowing and investment authority.--The Board, 
        with the approval of the Superintendent, may authorize 
        the Senior Managing Director--
                  (A) to borrow money on the credit of the 
                school; and
                  (B) to invest funds held in excess of the 
                current operating requirements of the school 
                for purposes of maintaining a reasonable 
                reserve.
          (6) Liability.--The Managing Directors and the other 
        members of the Board shall not be held personally 
        liable for any loss or damage that may accrue to the 
        school as the result of any act performed within the 
        scope of their duties under this section.
  (f) Employees.--Employees of the school are employees of a 
nonappropriated fund instrumentality of the United States.
  (g) Not a Federal Agency.--The the school shall not be 
considered a Federal agency for purposes of--
          (1) the Federal Advisory Committee Act; or
          (2) sections 552 and 552a of title 5, United States 
        Code.
  (h) Acquisition and Disposal of Property.--In order to carry 
out the activities of the school, the school may--
          (1) acquire goods, services, and real property by 
        lease, purchase, or otherwise;
          (2) maintain, enlarge, or remodel any such property;
          (3) have sole control of any such personal or real 
        property; and
          (4) dispose of real and personal property without 
        regard to the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 101 et seq.).
  (i) Contract Authority.--The school may enter into contracts 
and leases without regard to the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 101 et seq.) or 
any other law that prescribes procedures for the procurement of 
property or service by an executive agency.
  (j) Use of Department Facilities and Resources.--The school 
may use the facilities and resources of the Department of 
Transportation, with the approval of the Superintendent, but 
only if any costs incurred by the Department that are 
attributable solely to the school operations and all costs 
incurred by the school arising out of such operations are paid 
using funds of the school or the Department of Transportation 
receives other adequate consideration for paying for such 
costs. Any reimbursement may be retained by the United States 
Merchant Marine Academy and credited to the charged 
appropriations account.
  (k) Audits of Records.--The financial records of the school 
shall be made available to the Department of Transportation 
Inspector General, upon request, for purposes of conducting an 
audit.
  (l) Definitions.--In this section:
          (1) Board.--The term ``Board'' means the school Board 
        of Directors.
          (2) Director.--The term ``Director'' means a member 
        of the school's Board of Directors.
          (3) Managing director.--The term ``Managing 
        Director'' means a member of the Board who is an 
        employee of the school with operational responsibility 
        for the organization, but not a Federal employee.
          (4) Senior managing director.--The term ``Senior 
        Managing Director'' means the Managing Director 
        designated the ``Senior Managing Director'' by the 
        Superintendent, as set forth in subsection (e) of this 
        section.
          (5) Secretary.--The term ``Secretary'' means the 
        Secretary of Transportation.
          (6) Superintendent.--The term ``Superintendent'' 
        means the Superintendent of the United States Merchant 
        Marine Academy at Kings Point, New York, operated by 
        the Maritime Administration, United States Department 
        of Transportation or, in the absence of the 
        Superintendent, the Superintendent's authorized 
        designee or such other person as the Secretary may 
        designate.

               MERCHANT MARINE DECORATIONS AND MEDALS ACT

SEC. 8. EXCLUSIVENESS OF RIGHT TO DECORATION OR MEDAL; CIVIL PENALTY 
                    FOR VIOLATION.

                         [46 U.S.C. App. 2007]

  Except as authorized by this Act, or the Secretary of 
Transportation, a person may not manufacture, sell, possess, or 
display a decoration or medal provided for in this Act. A 
person violating this section is liable to the United States 
Government for a civil penalty of $2,000.

                                  
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