U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

49—010 

" ! SENATE 109TH CONGRESS

2nd Session 

REPORT

2006

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 

SEPTEMBER 6, 2006.—Ordered to be printed 


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(II) 

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 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

GORDON H. SMITH, Oregon 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK LAUTENBERG, New Jersey 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

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 


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49–010 

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 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. 


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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. 


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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 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. 


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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). 


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By fiscal year, in millions of dollars— 

2007 2008 2009 2010 2011 2012 2013 2014 2015 

CHANGES IN DIRECT SPENDING 

Estimated budget authority ..................................................................................................................................... 1 1 1 1 1 1 1 1 Estimated outlays .................................................................................................................................................... 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 

tions in legislation are not counted for purposes of Congressional scorekeeping. 


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Basis of estimate: Several provisions of the legislation would pro- vide 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 


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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 liVerDate Aug 31 2005 16:59 Sep 07, 2006 Jkt 049010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR327.XXX SR327

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cense 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 SecVerDate Aug 31 2005 16:59 Sep 07, 2006 Jkt 049010 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\SR327.XXX SR327

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retary, 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, 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

ø§ 2578. Vessels: transfer between departments 

øA 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.¿ 


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§ 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

§ 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 MagnusonStevens 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 


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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 vesVerDate Aug 31 2005 16:59 Sep 07, 2006 Jkt 049010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\SR327.XXX SR327

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sel 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. 


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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 øshall, 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. 


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TITLE 46. SHIPPING 

SUBTITLE V. MERCHANT MARINE

CHAPTER 531. MARITIME SECURITY FLEET

§ 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 


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15 

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. 


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16 

(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—

ø(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 

ø(ii)¿ (II) the replacement vessel is eligible to be 

included in the Fleet under section ø53102(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. 


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(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 

øSEC. 801. VESSEL OPERATIONS REVOLVING FUND; ESTABLISHMENT; 

USES; LIMITATIONS. 

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

øFor 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 


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18 

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 


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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 constructiondifferential 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. øUpon 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 


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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 PA- CIFIC 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. 


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(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 


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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. 


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(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 


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24 

′′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; 

ø(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; 


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25 

(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 øAdministration, 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 


sroberts on PROD1PC70 with REPORTS
26 

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. 


sroberts on PROD1PC70 with REPORTS
27 

(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. 


sroberts on PROD1PC70 with REPORTS
28 

(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. 


sroberts on PROD1PC70 with REPORTS
29 

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; 


sroberts on PROD1PC70 with REPORTS
30 

(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—


sroberts on PROD1PC70 with REPORTS
31 

(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. 

ø(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. 


sroberts on PROD1PC70 with REPORTS
32 

(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 


sroberts on PROD1PC70 with REPORTS
33 

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 


sroberts on PROD1PC70 with REPORTS
34 

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. 


sroberts on PROD1PC70 with REPORTS
35 

(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 


sroberts on PROD1PC70 with REPORTS
36 

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 AdminisVerDate Aug 31 2005 16:59 Sep 07, 2006 Jkt 049010 PO 00000 Frm 00038 Fmt 6659 Sfmt 6603 E:\HR\OC\SR327.XXX SR327

sroberts on PROD1PC70 with REPORTS
37 

tration, 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. 

Æ 


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