### §308704. Funding

(a) Availability of Funds From Sale and Scrapping of Obsolete Vessels.—

(1) In general.—Notwithstanding any other provision of law, the amount of funds credited in a fiscal year to the Vessel Operations Revolving Fund established by section 50301(a) of title 46 that is attributable to the sale of obsolete vessels in the National Defense Reserve Fleet that are scrapped or sold under section 57102, 57103, or 57104 of title 46 shall be available until expended as follows:

(A) Fifty percent shall be available to the Administrator of the Maritime Administration for such acquisition, maintenance, repair, reconditioning, or improvement of vessels in the National Defense Reserve Fleet as is authorized under other Federal law.

(B) Twenty five percent shall be available to the Administrator of the Maritime Administration for the payment or reimbursement of expenses incurred by or on behalf of State maritime academies or the United States Merchant Marine Academy for facility and training ship maintenance, repair, and modernization, and for the purchase of simulators and fuel.

(C) The remainder shall be available to the Secretary to carry out the Program, as provided in subsection (b).

(2) Applicability.—Paragraph (1) does not apply to amounts credited to the Vessel Operations Revolving Fund before July 1, 1994.

(b) Use of Amounts for Program.—

(1) Allocation.—

(A) In general.—Except as provided in subparagraph (B) and paragraph (2), of the amounts available each fiscal year for the Program under subsection (a)(1)(C)—

(i) 50 percent shall be used for grants under section 308703(b); and

(ii) 50 percent shall be used for grants under section 308703(c).

(B) Set aside.—

(i) In general.—Not less than 25 percent of the amounts available each fiscal year for the Program under subsection (a)(1)(C) shall be used for the preservation and presentation to the public of the maritime heritage property of the Maritime Administration.

(ii) Direct transfers.—The Secretary may provide amounts used for the preservation and presentation to the public of the maritime heritage property of the Maritime Administration through direct transfers to the Maritime Administration.

(iii) Waiver.—The Maritime Administrator may waive the application of clause (i) for any fiscal year.

(2) Administrative expenses.—

(A) In general.—Not more than 15 percent or $500,000, whichever is less, of the amount available for the Program under subsection (a)(1)(C) for a fiscal year may be used for expenses of administering the Program.

(B) Allocation.—Of the amount available under subparagraph (A) for a fiscal year—

(i) one half shall be allocated to the National Trust for expenses incurred in administering grants under section 308703(b) of this title; and

(ii) one half shall be allocated as appropriate by the Secretary to the Service and participating State Historic Preservation Officers.

(c) Disposal of Vessels.—

(1) Requirement.—The Secretary of Transportation shall dispose (by sale or by purchase of disposal services) of all vessels described in paragraph (2)—

(A) in accordance with a priority system for disposing of vessels, as determined by the Secretary, that shall include provisions requiring the Maritime Administration to—

(i) dispose of all deteriorated high priority ships that are available for disposal within 12 months of their designation as available for disposal; and

(ii) give priority to the disposition of those vessels that pose the most significant danger to the environment or cost the most to maintain;

(B) in the manner that provides the best value to the Federal Government, except in any case in which obtaining the best value would require towing a vessel and the towing poses a serious threat to the environment; and

(C) in accordance with the plan of the Department of Transportation for disposal of those vessels and requirements under sections 57102 to 57104 of title 46.

(2) Description of vessels.—The vessels referred to in paragraph (1) are the vessels in the National Defense Reserve Fleet after July 1, 1994, that—

(A) are not assigned to the Ready Reserve Force component of the National Defense Reserve Fleet; and

(B) are not specifically authorized or required by statute to be used for a particular purpose.

(d) Treatment of Available Amounts.—Amounts available under this section shall not be considered in any determination of the amounts available to the Department of the Interior.

(Pub. L. 113–287, §3, Dec. 19, 2014, 128 Stat. 3241; Pub. L. 114–328, div. C, title XXXV, §3507(a), Dec. 23, 2016, 130 Stat. 2777.)

| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
| --- | --- | --- |
| 308704 | 16 U.S.C. 5405. | Pub. L. 103–451, §6, Nov. 2, 1994, 108 Stat. 4776; Pub. L. 105–85, div. A, title X, §1026(c), Nov. 18, 1997, 111 Stat. 1878; Pub. L. 106–398, §1 [div. C, title XXXV, §3502(a)], Oct. 30, 2000, 114 Stat. 1654, 1654A–490; Pub. L. 110–181, div. C, title XXXV, §3514, Jan. 28, 2008, 122 Stat. 594; Pub. L. 111–84, div. C, title XXXV, §3509, Oct. 28, 2009, 123 Stat. 2721; Pub. L. 111–383, div. A, title X, §1075(n), Jan. 7, 2011, 124 Stat. 4378. |

Section

The text of 16 U.S.C. 5405(b)(2) is omitted as obsolete.

In subsection (a)(1)(C), before subparagraph (i), the words "whether collected before or after October 28, 2009" are omitted as obsolete.

#### **Editorial Notes**

#### Amendments

2016—Subsec. (a)(1)(C). Pub. L. 114–328, §3507(a)(1), amended subpar. (C) generally. Prior to amendment, subpar. (C) related to availability of remainder of funds.

Subsec. (b)(1). Pub. L. 114–328, §3507(a)(2), amended par. (1) generally. Prior to amendment, par. (1) related to use of amounts for certain projects under the National Maritime Heritage Grants Program.

#### **Statutory Notes and Related Subsidiaries**

#### Pilot Program on Export of Obsolete Vessels for Dismantlement and Recycling

Pub. L. 107–314, div. C, title XXXV, §3504(c), (d), Dec. 2, 2002, 116 Stat. 2755, 2756, provided that the Secretary of Transportation, Secretary of State, and Administrator of the Environmental Protection Agency would jointly carry out, during fiscal year 2003, one or more pilot programs through the Maritime Administration to explore the feasibility and advisability of various alternatives for exporting obsolete vessels in the National Defense Reserve Fleet for purposes of the dismantlement and recycling of such vessels and the Secretary of Transportation shall submit to Congress a report on the pilot programs including a description of their activities and recommendations for further legislative or administrative action as the Secretary considers appropriate.

#### Scrapping of National Defense Reserve Fleet Vessels

Pub. L. 106–398, §1 [div. C, title XXXV, §3502(b)–(f)], Oct. 30, 2000, 114 Stat. 1654, 1654A–490 to 1654A–492, as amended by Pub. L. 109–163, div. C, title XXXV, §3505(a), Jan. 6, 2006, 119 Stat. 3551; Pub. L. 112–81, div. C, title XXXV, §3504, Dec. 31, 2011, 125 Stat. 1717; Pub. L. 112–239, div. C, title XXXV, §3502, Jan. 2, 2013, 126 Stat. 2222, provided that:

"(b) Selection of Scrapping Facilities.—The Secretary of Transportation may scrap obsolete vessels pursuant to section 6(c)(1) of the National Maritime Heritage Act of 1994 ([former] 16 U.S.C. 5405(c)(1)) [see 54 U.S.C. 308704(c)(1)] through qualified scrapping facilities, using the most expeditious scrapping methodology and location practicable. Scrapping facilities shall be selected under that section on a best value basis consistent with the Federal Acquisition Regulation, as in effect on the date of contract award, without any predisposition toward foreign or domestic facilities taking into consideration, among other things, the ability of facilities to scrap vessels—

"(1) at least cost to the Government;

"(2) in a timely manner;

"(3) giving consideration to worker safety and the environment; and

"(4) in a manner that minimizes the geographic distance that a vessel must be towed when towing a vessel poses a serious threat to the environment.

"(c) Comprehensive Management Plan.—

"(1) Requirement to develop plan.—The Secretary of Transportation shall prepare, publish, and submit to the Congress by not later than 180 days after the date of the enactment of this Act [probably should be "this subsection", Jan. 6, 2006] a comprehensive plan for management of the vessel disposal program of the Maritime Administration in accordance with the recommendations made in the Government Accountability Office in report number GAO–05–264, dated March 2005.

"(2) Contents of plan.—The plan shall—

"(A) include a strategy and implementation plan for disposal of obsolete National Defense Reserve Fleet vessels (including vessels added to the fleet after the enactment of this paragraph) in a timely manner, maximizing the use of all available disposal methods, including dismantling, use for artificial reefs, donation, and Navy training exercises;

"(B) identify and describe the funding and other resources necessary to implement the plan, and specific milestones for disposal of vessels under the plan;

"(C) establish performance measures to track progress toward achieving the goals of the program, including the expeditious disposal of ships commencing upon the date of the enactment of this paragraph;

"(D) develop a formal decisionmaking framework for the program; and

"(E) identify external factors that could impede successful implementation of the plan, and describe steps to be taken to mitigate the effects of such factors.

"(d) Implementation of Management Plan.—

"(1) Requirement to implement.—Subject to the availability of appropriations, the Secretary shall implement the vessel disposal program of the Maritime Administration in accordance with—

"(A) the management plan submitted under subsection (c); and

"(B) the requirements set forth in paragraph (2).

"(2) Utilization of domestic sources.—In the procurement of services under the vessel disposal program of the Maritime Administration, the Secretary shall—

"(A) use full and open competition; and

"(B) utilize domestic sources to the maximum extent practicable.

"(e) Failure to Submit Plan.—

"(1) Private management contract for disposal of maritime administration vessels.—The Secretary of Transportation, subject to the availability of appropriations, shall promptly award a contract using full and open competition to expeditiously implement all aspects of disposal of obsolete National Defense Reserve Fleet vessels.

"(2) Application.—This subsection shall apply beginning 180 days after the date of the enactment of this subsection [Jan. 6, 2006], unless the Secretary of Transportation has submitted to the Congress the comprehensive plan required under subsection (c).

"(f) Briefings.—The Maritime Administrator shall, upon request, provide briefings to the Committee on Transportation and Infrastructure, the Committee on Natural Resources, and the Committee on Armed Services of the House of Representatives, and the Committee on Commerce, Science, and Transportation and the Committee on Armed Services of the Senate, on the progress made in recycling vessels, problems encountered with recycling vessels, issues relating to vessel recycling, and other issues relating to vessel recycling and disposal."