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[Senate Report 112-99]
[From the U.S. Government Publishing Office]

112th Congress 
 1st Session                     SENATE                          Report
                                                                 112-99
_______________________________________________________________________

                                                       Calendar No. 252
 
     MARITIME ADMINISTRATION AUTHORIZATION ACT FOR FISCAL YEAR 2012

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1430

                                     

                December 7, 2011.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      one hundred twelfth congress

                             first session

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas
JOHN F. KERRY, Massachusetts         OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            JIM DeMINT, South Carolina
BILL NELSON, Florida                 JOHN THUNE, South Dakota
MARIA CANTWELL, Washington           ROGER F. WICKER, Mississippi
FRANK R. LAUTENBERG, New Jersey      JOHNNY ISAKSON, Georgia
MARK PRYOR, Arkansas                 ROY BLUNT, Missouri
CLAIRE McCASKILL, Missouri           JOHN BOOZMAN, Arkansas
AMY KLOBUCHAR, Minnesota             PATRICK J. TOOMEY, Pennsylvania
TOM UDALL, New Mexico                MARCO RUBIO, Florida
MARK WARNER, Virginia                KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska                  DEAN HELLER, Nevada
                     Ellen Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     Bruce Andrews, General Counsel
                Todd Bertoson, Republican Staff Director
            Jarrod Thompson Republican Deputy Staff Director
               Rebecca Seidel, Republican General Counsel
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-99
======================================================================

     MARITIME ADMINISTRATION AUTHORIZATION ACT FOR FISCAL YEAR 2012

                                _______
                                

                December 7, 2011.--Ordered to be printed

                                _______
                                

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

                                 REPORT

                         [To accompany S. 1430]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1430) to authorize certain 
maritime programs of the Department of Transportation, and for 
other purposes, having considered the same, reports favorably 
thereon with an amendment (in the nature of a substitute) and 
recommends that the bill (as amended) do pass.

                          Purpose of the Bill

  This legislation is the annual authorization act for the 
Maritime Administration (MARAD) within the Department of 
Transportation (DOT). The legislation would authorize 
appropriations for MARAD for FY 2012. The bill would require a 
report of future marine transportation system requirements, 
including intercoastal and inland waterway needs; authorize the 
use of vessels within the National Defense Reserve Fleet (NDRF) 
for civil contingency operations; make modifications to the 
recycling and donation program for obsolete NDRF Vessels; 
authorize a demonstration program to evaluate emerging energy-
efficient marine technologies; require the Government 
Accountability Office (GAO) to conduct a study of the maritime 
workforce; reduce certain reporting requirements for DOT's 
ship-scrapping programs; and modify and extend existing 
authorizations for the Maritime Security Program (MSP).

                          Background and Needs

  MARAD was authorized through fiscal year (FY) 2011 in the 
National Defense Authorization Act for Fiscal Year 2011 (P.L. 
111-383). MARAD administers various U.S. merchant marine 
support programs within DOT including: the MSP; the title XI 
guaranteed loan program; various cargo preference programs; the 
Small Shipyard Assistance Program; the maintenance of the Ready 
Reserve Force (RRF) and NDRF; a Marine Highway Program; and the 
operation of the U.S. Merchant Marine Academy at Kings Point, 
NY.

                         Summary of Provisions

  The bill would require the Secretary of Transportation 
(Secretary) to submit reports on the status of the Nation's 
intercoastal and intracoastal waterways, and on the potential 
for using container-on-barge transportation on inland waterways 
systems. The bill would also expand the criteria by which the 
Secretary can designate America's Marine Highways, to include 
short sea shipping projects that mitigate congestion or have 
environmental benefits. The legislation would allow the 
Secretary of Defense's designee to approve of the use of NDRF 
vessels to be used for foreign disaster relief operations and 
humanitarian assistance efforts, if requested by outside 
agencies. The legislation would create a Green Ships Program 
that would use MARAD facilities to identify, evaluate, 
demonstrate, and improve upon promising technologies for ships 
to comply with environmental laws.
  The legislation would also eliminate paperwork by allowing 
ship scrapping information to be available through MARAD 
briefings to Congress instead of in annual reports. The 
legislation would extend operating agreements in MSP through 
2025, and authorize appropriations to operators. In addition, 
the legislation would establish the priority for replacement in 
MSP to be military requirements of the Secretary of Defense and 
would authorize MARAD to purchase vessels leaving MSP to enter 
RRF. The legislation would also require the Comptroller General 
to conduct a study of the training needs of the maritime 
workforce and the sufficiency of current training programs to 
serve them. The legislation would authorize funds for all 
MARAD-administered programs.

                          Legislative History

  S. 1430 was introduced by Senator Lautenberg and was 
cosponsored by Senator Rockefeller, on July 27, 2011. The bill 
was amended by a manager's amendment from Senator Lautenberg at 
the Commerce Committee, to address issues relating to ship 
recycling. The Senate Committee on Commerce, Science, and 
Transportation reported the bill favorably as amended on 
November 4, 2011. The staff members assigned to this 
legislation are: Dan Easley, Democratic Counsel; and Mike 
Meenan, Republican Counsel.

                            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:

                                                 November 14, 2011.
Hon. John D. Rockefeller IV,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1430, the Maritime 
Administration Authorization Act for Fiscal Year 2012.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sarah Puro.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 1430--Maritime Administration Authorization Act for Fiscal Year 2012

    Summary: S. 1430 would amend various laws governing the 
activities of the Maritime Administration (MARAD) and would 
authorize appropriations for that agency for fiscal year 2012. 
Assuming appropriation of the amounts specifically authorized 
($185 million) and estimated to be necessary ($3 million), CBO 
estimates that implementing S. 1430 would cost $188 million 
over the 2012-2016 period. Pay-as-you-go procedures apply to 
the legislation; however, CBO estimates that the bill would 
have no significant net impact on direct spending and would not 
affect revenues.
    S. 1430 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1430 is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                                                                          2012-
                                                              2012     2013     2014     2015     2016     2016
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.............................      188        0        0        0        0      188
Estimated Outlays.........................................      150       24       14        0        0      188
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
1430 will be enacted in 2012 and that the amounts authorized by 
the bill will be appropriated for 2012. Estimated outlays are 
based on historical spending patterns for MARAD activities.
    CBO estimates that S. 1430 would authorize the 
appropriation of $188 million for MARAD activities. That amount 
includes $162 million for operations and training, $19 million 
for the agency's program to dispose of obsolete vessels in the 
National Defense Reserve Fleet, and $4 million for the 
administrative costs of loan guarantees. The bill also would 
require MARAD to complete a study of the Marine Transportation 
System and the Maritime workforce that CBO estimates would cost 
$3 million to complete. Assuming appropriation of the amounts 
specifically authorized and estimated to be necessary, CBO 
estimates that implementing S. 1430 would cost $188 million 
over the 2012-2016 period.
    Section 5 of the legislation would authorize MARAD to 
establish a green ships program to study technologies to reduce 
pollution from ships. The bill would authorize MARAD to offset 
some or all of the costs of that program by charging fees to 
industry stakeholders who submit their technologies to MARAD 
for testing. Those amounts would be available to be spent 
without further appropriation, and CBO estimates that spending 
of those collections would not result in any significant net 
change in direct spending. In 2011, MARAD received an 
appropriation of about $3 million through the Operations and 
Training account for a similar technology testing program.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Pay-as-you-go procedures apply to S. 1430 because 
enacting the legislation could affect direct spending. However, 
CBO estimates that enacting the bill would have no significant 
net effect on direct spending in any year. (Enacting S. 1430 
would not affect revenues.)
    Intergovernmental and private-sector impact: S. 1430 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Sarah Puro; Impact on 
state, local, and tribal governments: Ryan Miller; Impact on 
the private sector: Vi Nguyen.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  S. 1430 as reported by the Committee is consistent with 
previous MARAD authorizations and would not affect the number 
of people subject to regulation.

                            ECONOMIC IMPACT

  S. 1430 as reported, would not have significant impact on the 
Nation's economy.

                                PRIVACY

  S. 1430 would have no impact on the personal privacy of 
individuals.

                               PAPERWORK

  S. 1430, as reported, should not increase paperwork 
requirements for individuals and businesses.

                   Congressionally Directed Spending

  In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis

Section 1. Short Title, Amendment of Title 46, United States Code; 
        Table of Contents.

  Section 1 would state the short title, the ``Maritime 
Administration Authorization Act for Fiscal Year 2012,'' as 
well as clarify that any amendments are to title 46 United 
States Code, unless otherwise stated.

Section 2. Marine Transportation System.

  Section 2 would require the Secretary, in consultation with 
the Secretary of Defense and the commanding officer of the Army 
Corps of Engineers, and in concurrence with the U.S. Coast 
Guard, to submit a report on the status of the Nation's coastal 
and inland waterways. The report would describe the state of 
marine transportation infrastructure; provide estimates of the 
investment levels require to maintain and improve the 
infrastructure; and describe the overall environmental 
management of the maritime transportation system. This section 
would also allow the Secretary to investigate, make 
determinations concerning, and develop a repository of 
statistical information relating to intercoastal and 
intracoastal water transportation.
  Section 2 would require MARAD to assess the potential for 
using container-on-barge transportation on the inland waterways 
system and submit a report with MARAD's findings, conclusions, 
and recommendations. The factors to be considered in the 
assessment include: environmental benefits of increasing 
container-on-barge movements; regional differences in the 
inland waterways system; existing programs for establishing 
awareness of deep sea shipping operations; mechanisms to ensure 
that the implementation of the plan would not be inconsistent 
with the antitrust laws; and potential frequency of service at 
inland river ports.

Section 3. Short Sea Transportation Program Amendments.

  This section would broaden benefits of using America's Marine 
Highway beyond surface congestion to include promoting more 
efficient use of the Nation's waterways. The Secretary would be 
authorized to designate a project as a short sea shipping 
project if such project would mitigate landside congestion or 
promote more efficient use of the navigable waters of the 
United States.

Section 4. Use of National Defense Reserve Fleet and Ready Reserve 
        Force Vessels.

  Section 4 would allow the use of NDRF vessels for civil 
contingency operations when requested by another agency of the 
government of any State, locality, territory or political 
subdivision of the United States, for foreign disaster relief 
and humanitarian assistance operations. MARAD vessels have 
assisted in several natural disaster relief efforts (Hurricane 
Katrina, the earthquake in Haiti). In these instances, MARAD's 
RRF, a subset of the NDRF, and NDRF vessels were activated and 
used to assist in performing recovery efforts. At present, NDRF 
vessels can only be used in these situations upon the request 
of the Secretary of Defense. Section 4 would extend this 
authority to make a request to other Federal agencies, such as 
the Department of State or the Federal Emergency Management 
Agency, as well as any State, locality, territory, or other 
political subdivision of the United States. The concurrence of 
the Secretary of Defense's designee would still be necessary 
for use of any NDRF vessels.

Section 5. Green Ships Program.

  Section 5 would create a program that seeks to identify, 
evaluate, demonstrate, and improve upon promising technologies 
that facilitate compliance with United States and international 
environmental laws and standards, and disseminate the results 
to the public. This provision would provide MARAD with the 
necessary authority and resources to build upon its existing 
efforts to assist the maritime industry in reducing air 
emissions and improve fuel economy. By creating a more formal 
partnership with the Environmental Protection Agency, the 
Committee believes these efforts would be more effective in 
producing tangible results which can be applied throughout the 
maritime industry. The program would use MARAD vessels as 
analysis and testing platforms and also utilize partnership and 
cooperative efforts with academic, public and non-governmental 
entities. The Committee expects that MARAD would support 
qualified projects not only in the developmental and 
verification stage, but also to assist in the deployment of 
newly verified technologies which may need support from this 
program to gain wider industry acceptance and utilization. 
Proving how effective certain technologies are is likely to be 
economically valuable to vessel operators; therefore evaluating 
developing technology should prove to be a very cost-effective 
way to encourage technology adoption by industry. Section 5 
would also create a fund in the United States Treasury for 
appropriated funds, collected fees, and any other funds 
received for the program, to carry out the program. This 
provision would also require that the Secretary submit an 
annual report to the Senate Committee on Commerce, Science, and 
Transportation, the House of Representatives Committee on Armed 
Services, and the House of Representatives Committee on 
Transportation and Infrastructure on the activities, 
expenditures, and results of the program during the preceding 
fiscal year.

Section 6. Waiver of Navigation and Vessel Inspection Laws.

  Section 6 would modify existing law (46 U.S.C. 501(b)) to 
require certification to Congress of the non-availability of 
qualified U.S. flag capacity to meet national defense 
requirements in the event that a waiver of navigation or vessel 
inspection laws is granted. The amendment would ensure 
continued appropriate Congressional notification in the event 
that waivers of navigation or vessel inspection laws are 
granted, yet would not constrain officials from granted such 
waivers should the need arise.

Section 7. Ship Scrapping Reporting Requirement.

  Section 7 would modify existing MARAD reporting requirements 
to allow ship scrapping information to be provided through 
briefings to Congress in lieu of the annual report process. 
This provision would require MARAD, upon request, to provide 
Congress with information on its recycling program on a timely 
basis. Section 7 eliminates the production of annual ship 
disposal reports to Congress.

Section 8. Extension of Maritime Security Fleet Program.

  This section would authorize the Secretary to extend existing 
operating agreements in MSP through September 30, 2025. 
Currently, the existing agreements are renewed automatically on 
a yearly basis through FY 2015, subject to the availability of 
appropriations. For those operating agreements where the 
contractor does not wish to enter into an extension, the 
Secretary would be authorized to award the operating agreement 
to a new contractor on the basis of military need for the new 
vessel in conjunction with the Secretary of Defense. After 
February 28, 2015, contractors would no longer be able to 
transfer the agreements.
  Section 8 would also clarify the priority for selecting 
replacement vessels for MSP. It would specify that the primary 
consideration for determining priority for replacement of MSP 
vessels is established by military requirements of the 
Secretary of Defense. After consideration of military 
requirements, priority would be given to applicants that are 
U.S. citizens under section 50501 of title 46, United States 
Code. It would further specify that the second or later 
replacements must not be any less commercially or militarily 
useful than the initial replacement vessel.
  Section 8 would authorize MARAD to purchase vessels, that 
were under a MSP operating agreement and that have been 
replaced by their owners, for inclusion in the RRF component of 
the NDRF. The purchase would be subject to the vessel owner's 
agreement and the concurrence of the Secretary of Defense. The 
vessels would be required to have participated in the Marine 
Security Program for at least three years and meet 
recapitalization requirements for the RRF. The vessels would be 
purchased at fair market value, as determined by MARAD. 
Currently, there is no program to replace or recapitalize RRF 
vessels as they approach the end of their useful lives. This 
would be a cost effective method to rejuvenate the RRF because 
these ships, which are under a U.S. flag, would not require 
upgrading to U.S. standards and could continue in a maritime 
security role as RRF ships.
  Section 8 would authorize the requested appropriations for 
the MSP for years 2016 through 2025. The requests are as 
follows: $186 million per year for years 2012 through 2018; 
$210 million per year in years 2019 through 2021; and $222 
million per year in years 2022 through 2025. Additionally, this 
provision would authorize the requested appropriations to 
escalate payments per vessel per year for the years 2016 
through 2025. The requests are as follows: $3.1 million for 
each vessel for each FY 2016 through 2018; $3.5 million for 
each vessel for each FY 2019 through 2021; and $3.7 million for 
each vessel for each FY 2022 through 2025. The higher payments 
spread over ten years are necessary to induce these militarily 
useful vessels to remain under U.S. flag and contribute to the 
U.S. economy and jobs.
  This section would also clarify the definition for foreign 
commerce in chapter 531 of title 46, United States Code, by 
eliminating an obsolete restriction on foreign-to-foreign trade 
that was originally used in the operating-differential subsidy 
program.

Section 9. Maritime Workforce Study.

  Section 9 would require the Comptroller General of the United 
States to conduct a study on the training needs of the maritime 
workforce. The study would analyze the impact upon U.S. 
mariners of all sectors of the maritime industry of training 
requirements imposed by; domestic and international regulations 
and conventions, companies, and Government agencies that 
charter or operate vessels. It would also evaluate the ability 
of the Nation's maritime training infrastructure to meet the 
current needs of the maritime industry, and include 
recommendations both for enhancing the capabilities of the 
Nation's maritime training infrastructure.

Section 10. Maritime Administration Vessel Recycling Contract 
        Accountability.

  Section 10 would direct the DOT Inspector General within 12 
months after the enactment of this Act to conduct an assessment 
of the source selection procedures and practices used to award 
MARAD's NDRF vessel recycling contracts. In addition, the 
Inspector General shall assess the process, procedures and 
practices used for MARAD's qualification of vessel recycling 
facilities.

Section 11. Prohibition on Maritime Administration Receipt of Polar 
        Icebreakers.

  Section 11 would prohibit MARAD from receiving, maintaining, 
dismantling, or recycling either the Coast Guard Cutter POLAR 
SEA (WAGB 11) or the Coast Guard Cutter POLAR STAR (WAGB 10) 
until the Congress has received the polar icebreaker business 
case analysis (required under 124 Stat. 2928) or until the 
Coast Guard has replaced the vessels with two ``in commission, 
active'' heavy polar icebreakers. The amendment would also 
place additional strictures on the Coast Guard to prevent: 
placement the vessels into inactive status; the appointment of 
a decommissioning officer; expending funds for decommissioning 
of the vessels; the transfer or relinquishment of ownership; or 
the change in the homeport of either cutter.

Section 12. Authorization of Appropriations.

  Section 12 would authorize appropriations for Operations and 
Training, including at the U.S. Merchant Marine Academy and 
State Maritime Schools; title XI Loans, Ship Disposal, and MSP.

                        Changes in Existing Law

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

                           TITLE 46. SHIPPING

                          SUBTITLE I. GENERAL

                  CHAPTER 5. OTHER GENERAL PROVISIONS

501. Waiver of navigation and vessel-inspection laws

    (a) On Request of Secretary of Defense.--On request of the 
Secretary of Defense, the head of an agency responsible for the 
administration of the navigation or vessel-inspection laws 
shall waive compliance with those laws to the extent the 
Secretary considers necessary in the interest of national 
defense.
    (b) By Head of Agency.--When the head of an agency 
responsible for the administration of the navigation or vessel-
inspection laws considers it necessary in the interest of 
national defense, the individual, following a determination by 
the Maritime Administrator, acting in the Administrator's 
capacity as Director, National Shipping Authority, of the non-
availability of qualified United States flag capacity to meet 
national defense requirements, may waive compliance with those 
laws to the extent, in the manner, and on the terms the 
individual, in consultation with the Administrator, acting in 
that capacity, prescribes. A waiver shall be accompanied by a 
certification by the individual and the Administrator to the 
Committee on Commerce, Science, and Transportation and the 
Committee on Armed Services of the Senate, and the Committee on 
Transportation and Infrastructure and the Committee on Armed 
Services of the House of Representatives that it is not 
possible to use a United States flag vessel or United States 
flag vessels collectively to meet the national defense 
requirements.
    (c) Termination of Authority.--The authority granted by 
this section shall terminate at such time as the Congress by 
concurrent resolution or the President may designate.

                           TITLE 46. SHIPPING

                      SUBTITLE V. MERCHANT MARINE

                            PART A. GENERAL

               CHAPTER 501. POLICY, STUDIES, AND REPORTS

50109. Miscellaneous studies

    (a) Foreign Subsidies.--The Secretary of Transportation 
shall investigate, determine, and keep current records of the 
extent and character of the governmental aid and subsidies 
granted by foreign governments to their merchant marine.
    (b) Laws Applicable to Aircraft.--The Secretary shall 
investigate, determine, and keep current records of the 
provisions of law relating to shipping that should be made 
applicable to aircraft engaged in foreign commerce to further 
the policy in section 50101 of this title, and any appropriate 
legislation in this regard.
    (c) Aid for Cotton, Coal, Lumber, and Cement.--The 
Secretary shall investigate, determine, and keep current 
records of the advisability of enactment of suitable 
legislation authorizing the Secretary, in an economic or 
commercial emergency, to aid farmers and producers of cotton, 
coal, lumber, and cement in any section of the United States in 
the transportation and landing of their products in any foreign 
port, which products can be carried in dry-cargo vessels by 
reducing rates, by supplying additional tonnage to any American 
operator, or by operation of vessels directly by the Secretary, 
until the Secretary considers the special rate reduction and 
operation unnecessary for the benefit of those farmers and 
producers.
    [(d) Intercoastal and Inland Water Transportation.--The 
Secretary shall investigate, determine, and keep current 
records of intercoastal and inland water transportation, 
including their relation to transportation by land and air.]
    (d) Marine Transportation System.--
            (1) Report on waterways.--Not later than October 1, 
        2012, the Secretary, in consultation with the Secretary 
        of Defense and the commanding officer of the Army Corps 
        of Engineers, and with the concurrence of the Secretary 
        of the department in which the Coast Guard is 
        operating, shall submit a report to the Committee on 
        Commerce, Science, and Transportation of the Senate and 
        the Committee on Armed Services and the Committee on 
        Transportation and Infrastructure of the House of 
        Representatives on the status of the Nation's coastal 
        and inland waterways that--
                    (A) describes the state of the United 
                States' marine transportation infrastructure, 
                including intercoastal infrastructure, 
                intracoastal infrastructure, inland waterway 
                infrastructure, ports, and marine facilities;
                    (B) provides estimates of the investment 
                levels required--
                            (i) to maintain the infrastructure; 
                        and
                            (ii) to improve the infrastructure; 
                        and
                    (C) describes the overall environmental 
                management of the maritime transportation 
                system and the integration of environmental 
                stewardship into the overall system.
            (2) Marine transportation.--The Secretary may 
        investigate, make determinations concerning, and 
        develop a repository of statistical information 
        relating to marine transportation, including its 
        relationship to transportation by land and air, to 
        facilitate research, assessment, and maintenance of the 
        maritime transportation system. As used in this 
        paragraph, the term ``marine transportation'' includes 
        intercoastal transportation, intracoastal 
        transportation, inland waterway transportation, ports, 
        and marine facilities.
            (3) Authorization of appropriations.--There are 
        authorized to be appropriated to the Secretary such 
        sums as may be necessary to carry out this subsection.
    (e) Obsolete Tonnage and Tramp Service.--The Secretary 
shall make studies and reports to Congress on--
             (1) the scrapping or removal from service of old 
        or obsolete merchant tonnage owned by the United States 
        Government or in use in the merchant marine; and
             (2) tramp shipping service and the advisability of 
        citizens of the United States participating in that 
        service with vessels under United States registry.
    (f) Mortgage Loans.--The Secretary shall investigate the 
legal status of mortgage loans on vessel property, with a view 
to the means of improving the security of those loans and of 
encouraging investment in American shipping.

                           TITLE 46. SHIPPING

                      SUBTITLE V. MERCHANT MARINE

                            PART A. GENERAL

                      CHAPTER 503. ADMINISTRATIVE

50307. Green ships program

    (a) In General.--The Secretary of Transportation may 
establish a green ships program to engage in the environmental 
study, research, development, assessment, and deployment of 
emerging marine technologies and practices related to the 
marine transportation system through the use of public vessels 
under the control of the Maritime Administration or private 
vessels under Untied States registry, and through partnerships 
and cooperative efforts with academic, public, private, and 
non-governmental entities and facilities.
    (b) Program Requirements.--The program shall--
            (1) identify, study, evaluate, test, demonstrate, 
        or improve emerging marine technologies and practices 
        that are likely to achieve environmental improvements 
        by--
                    (A) reducing air emissions, water 
                emissions, or other ship discharges;
                    (B) increasing fuel economy or the use of 
                alternative fuels and alternative energy 
                (including the use of shore power); or
                    (C) controlling aquatic invasive species; 
                and
            (2) be coordinated with the Environmental 
        Protection Agency, the United States Coast Guard, and 
        other Federal, State, local, or tribal agencies, as 
        appropriate.
    (c) Program Coordination.--Program coordination under 
subsection (b)(2) may include--
            (1) activities that are associated with the 
        development or approval of validation and testing 
        regimes; and
            (2) certification or validation of emerging 
        technologies or practices that demonstrate significant 
        environmental benefits.
    (d) Funding and Fees.--
            (1) In general.--In carrying out the green ships 
        program, the Secretary of Transportation may apply such 
        funds as may be appropriated and such funds or 
        resources as may become available by gift, cooperative 
        agreement, or otherwise, including the collection of 
        fees, for the purposes of the program and its 
        administration.
            (2) Establishment of fees.--Pursuant to section 
        9701 of title 31, the Secretary of Transportation may 
        promulgate regulations establishing fees to recover 
        reasonable costs to the Secretary and to academic, 
        public, and non-governmental entities associated with 
        the program.
            (3) Fee deposit.--Any fees collected under this 
        section shall be deposited in a special fund of the 
        United States Treasury for services rendered under the 
        program, which thereafter shall remain available until 
        expended to carry out the Secretary of Transportation's 
        activities for which the fees were collected.
    (e) Report.--The Secretary of Transportation shall report 
on the activities, expenditures, and results of the green ships 
program during the preceding fiscal year in the annual budget 
submission to Congress.

                           TITLE 46. SHIPPING

                      SUBTITLE V. MERCHANT MARINE

                 PART C. FINANCIAL ASSISTANCE PROGRAMS

                  CHAPTER 531. MARITIME SECURITY FLEET

53101. Definitions

    In this chapter:
            (1) Bulk cargo.--The term ``bulk cargo'' means 
        cargo that is loaded and carried in bulk without mark 
        or count.
            (2) Contractor.--The term ``contractor'' means an 
        owner or operator of a vessel that enters into an 
        operating agreement for the vessel with the Secretary 
        under section 53103.
            (3) Fleet.--The term ``Fleet'' means the Maritime 
        Security Fleet established under section 53102(a).
            [(4) Foreign commerce.--The term ``foreign 
        commerce''--
                    [(A) subject to subparagraph (B), means--
                            [(i) commerce or trade between the 
                        United States, its territories or 
                        possessions, or the District of 
                        Columbia, and a foreign country; and
                            [(ii) commerce or trade between 
                        foreign countries; and
                    [(B) includes, in the case of liquid and 
                dry bulk cargo carrying services, trading 
                between foreign ports in accordance with normal 
                commercial bulk shipping practices in such 
                manner as will permit United States-documented 
                vessels freely to compete with foreign-flag 
                bulk carrying vessels in their operation or in 
                competing for charters, subject to rules and 
                regulations promulgated by the Secretary of 
                Transportation pursuant to this chapter or 
                subtitle D of the Maritime Security Act of 
                2003.]
            (4) Foreign commerce.--The term ``foreign 
        commerce'' means--
                    (A) commerce or trade between the United 
                States, its territories or possessions, or the 
                District of Columbia, and a foreign country; 
                and
                    (B) commerce or trade between foreign 
                countries.
            [(5) LASH vessel.--The term ``LASH vessel'' means a 
        lighter aboard ship vessel.\1\]
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    \1\ This amendment takes effect on December 31, 2014
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            [(6) Participating fleet vessel.--The term 
        ``participating fleet vessel'' means any vessel that--
                    [(A) on October 1, 2005--
                            [(i) meets the requirements of 
                        paragraph (1), (2), (3), or (4) of 
                        section 53102(c); and
                            [(ii) is less than 25 years of age, 
                        or less than 30 years of age in the 
                        case of a LASH vessel; and
                    [(B) on December 31, 2004, is covered by an 
                operating agreement under subtitle B of title 
                VI of the Merchant Marine Act, 1936 (46 U.S.C. 
                App. 1187 et seq.).\2\]
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    \2\ This amendment takes effect on December 31, 2014
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            (5) Participating fleet vessel.--The term 
        ``participating fleet vessel'' means any vessel that--
                    (A) on October 1, 2015--
                            (i) meets the requirements of 
                        paragraph (1), (2), (3), or (4) of 
                        section 53102(c); and
                            (ii) is less than 20 years of age 
                        if the vessel is a tank vessel, or is 
                        less than 25 years of age for all other 
                        vessel types; and
                    (B) on December 31, 2014, is covered by an 
                operating agreement under this chapter.
            [(7)](6) Person.--The term ``person'' includes 
        corporations, partnerships, and associations existing 
        under or authorized by the laws of the United States, 
        or any State, Territory, District, or possession 
        thereof, or of any foreign country.
            [(8)](7) Product tank vessel.--The term ``product 
        tank vessel'' means a double hulled tank vessel capable 
        of carrying simultaneously more than 2 separated grades 
        of refined petroleum products.
            [(9)](8) Secretary.--The term ``Secretary'' means 
        the Secretary of Transportation.
            [(10)](9) Tank vessel.--The term ``tank vessel'' 
        has the meaning that term has under section 2101 of 
        this title.
            [(11)](10) United States.--The term ``United 
        States'' includes the District of Columbia, the 
        Commonwealth of Puerto Rico, the Northern Mariana 
        Islands, Guam, American Samoa, the Virgin Islands.
            [(12)](11) United States citizen trust.--
                    (A) Subject to subparagraph (C), the term 
                ``United States citizen trust'' means a trust 
                that is qualified under this paragraph.
                    (B) A trust is qualified under this 
                paragraph with respect to a vessel only if--
                            (i) each of the trustees is a 
                        citizen of the United States; and
                            (ii) the application for 
                        documentation of the vessel under 
                        chapter 121 of this title includes the 
                        affidavit of each trustee stating that 
                        the trustee is not aware of any reason 
                        involving a beneficiary of the trust 
                        that is not a citizen of the United 
                        States, or involving any other person 
                        that is not a citizen of the United 
                        States, as a result of which the 
                        beneficiary or other person would hold 
                        more than 25 percent of the aggregate 
                        power to influence or limit the 
                        exercise of the authority of the 
                        trustee with respect to matters 
                        involving any ownership or operation of 
                        the vessel that may adversely affect 
                        the interests of the United States.
                    (C) If any person that is not a citizen of 
                the United States has authority to direct or 
                participate in directing a trustee for a trust 
                in matters involving any ownership or operation 
                of the vessel that may adversely affect the 
                interests of the United States or in removing a 
                trustee for a trust without cause, either 
                directly or indirectly through the control of 
                another person, the trust is not qualified 
                under this paragraph unless the trust 
                instrument provides that persons who are not 
                citizens of the United States may not hold more 
                than 25 percent of the aggregate authority to 
                so direct or remove a trustee.
                    (D) This paragraph shall not be considered 
                to prohibit a person who is not a citizen of 
                the United States from holding more than 25 
                percent of the beneficial interest in a trust.
            [(13)](12) United states-documented vessel.--The 
        term ``United States-documented vessel'' means a vessel 
        documented under chapter 121 of this title.

53102. Establishment of Maritime Security Fleet

           *       *       *       *       *       *       *

    [(b) Vessel Eligibility.--A vessel is eligible to be 
included in the Fleet if--
            [(1) the vessel meets the requirements of paragraph 
        (1), (2), (3), or (4) of subsection (c);
            [(2) the vessel is operated (or in the case of a 
        vessel to be constructed, will be operated) in 
        providing transportation in foreign commerce;
            [(3) the vessel is self-propelled and is--
                    [(A) a roll-on/roll-off vessel with a 
                carrying capacity of at least 80,000 square 
                feet or 500 twenty-foot equivalent units and 
                that is 15 years of age or less on the date the 
                vessel is included in the Fleet;
                    [(B) a tank vessel that is constructed in 
                the United States after the date of the 
                enactment of this chapter;
                    [(C) a tank vessel that is 10 years of age 
                or less on the date the vessel is included in 
                the Fleet;
                    [(D) a LASH vessel that is 25 years of age 
                or less on the date the vessel is included in 
                the Fleet; or
                    [(E) any other type of vessel that is 15 
                years of age or less on the date the vessel is 
                included in the Fleet;
            [(4) the vessel is--
                    [(A) determined by the Secretary of Defense 
                to be suitable for use by the United States for 
                national defense or military purposes in time 
                of war or national emergency; and
                    [(B) determined by the Secretary to be 
                commercially viable; and
            [(5) the vessel--
                    [(A) is a United States-documented vessel; 
                or
                    [(B) is not a United States-documented 
                vessel, but--
                            [(i) the owner of the vessel has 
                        demonstrated an intent to have the 
                        vessel documented under chapter 121 of 
                        this title if it is included in the 
                        Fleet; and
                            [(ii) at the time an operating 
                        agreement for the vessel is entered 
                        into under this chapter, the vessel is 
                        eligible for documentation under 
                        chapter 121 of this title.]
    (b) Vessel Eligibility.--A vessel is eligible to be 
included in the Fleet if--
            (1) the vessel meets the requirements of paragraph 
        (1), (2), (3), or (4) of subsection (c);
            (2) the vessel is operated (or in the case of a 
        vessel to be constructed, will be operated) in 
        providing transportation in foreign commerce;
            (3) the vessel is self-propelled and--
                    (A) is a tank vessel that is 10 years of 
                age or less on the date the vessel is included 
                in the Fleet; or
                    (B) is any other type of vessel that is 15 
                years of age or less on the date the vessel is 
                included in the Fleet;
            (4) the vessel--
                    (A) is suitable for use by the United 
                States for national defense or military 
                purposes in time of war or national emergency, 
                as determined by the Secretary of Defense; and
                    (B) is commercially viable, as determined 
                by the Secretary; and
            (5) the vessel--
                    (A) is a United States-documented vessel; 
                or
                    (B) is not a United States-documented 
                vessel, but--
                            (i) the owner of the vessel has 
                        demonstrated an intent to have the 
                        vessel documented under chapter 121 of 
                        this title if it is included in the 
                        Fleet; and
                            (ii) at the time an operating 
                        agreement for the vessel is entered 
                        into under this chapter, the vessel is 
                        eligible for documentation under 
                        chapter 121 of this title.

           *       *       *       *       *       *       *

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.]
    (b) Extension of Existing Operating Agreements.--
            (1) Offer to extend.--Not later than 60 days after 
        the date of enactment of the Maritime Administration 
        Authorization Act for Fiscal Year 2012, the Secretary 
        shall offer, to an existing contractor, to extend, 
        through September 30, 2025, an operating agreement that 
        is in existence on the date of enactment of that Act. 
        The terms and conditions of the extended operating 
        agreement shall include terms and conditions authorized 
        under this chapter, as amended from time to time.
            (2) Time limit.--An existing contractor shall have 
        not later than 120 days after the date the Secretary 
        offers to extend an operating agreement to agree to the 
        extended operating agreement.
            (3) Subsequent award.--The Secretary may award an 
        operating agreement to an applicant that is eligible to 
        enter into an operating agreement for fiscal years 2016 
        through 2025 if the existing contractor does not agree 
        to the extended operating agreement under paragraph 
        (2).
    [(c) Priority for Awarding Agreements.--
            [(1) In general.--Subject to the availability of 
        appropriations, the Secretary shall enter into 
        operating agreements according to the following 
        priority:
                    [(A) New tank vessels.--First, for any tank 
                vessel that--
                            [(i) is constructed in the United 
                        States after the effective date of this 
                        chapter;
                            [(ii) is eligible to be included in 
                        the Fleet under section 53102(b); and
                            [(iii) during the period of an 
                        operating agreement under this chapter 
                        that applies to the vessel, will be 
                        owned and operated by one or more 
                        persons that are citizens of the United 
                        States under section 50501 of this 
                        title,
                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 subparagraph (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 
                50501 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 50501 of 
                        this title; 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 50501 of 
                        this title.
                    [(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 agreements 
                within a priority--
                            [(i) in accordance with operational 
                        requirements specified by the Secretary 
                        of Defense;
                            [(ii) in the case of operating 
                        agreements awarded under subparagraph 
                        (C) or (D) of paragraph (1), according 
                        to applicants' records of owning and 
                        operating vessels; and
                            [(iii) subject to the approval of 
                        the Secretary of Defense.
            [(4) Treatment of tank vessel to be replaced.--
                    [(A) For purposes of the application of 
                paragraph (1)(A) with respect to the award of 
                an operating agreement, the Secretary may treat 
                an existing tank vessel that is eligible to be 
                included in the Fleet under section 53102(b) as 
                a vessel that is constructed in the United 
                States after the effective date of this 
                chapter, if--
                            [(i) (I) a binding contract for 
                        construction in the United States of a 
                        replacement vessel to be operated under 
                        the operating agreement is executed by 
                        not later than 9 months after the first 
                        date amounts are available to carry out 
                        this chapter; and
                                    [(II) the replacement 
                                vessel is eligible to be 
                                included in the Fleet under 
                                section 53102(b); or
                            [(ii) (I) not later than 9 months 
                        after the first date amounts are 
                        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;
                                    [(II) the combined tonnage 
                                of the vessels required to be 
                                chartered under subclause (I) 
                                is equal to or greater than the 
                                tonnage of the existing tank 
                                vessel subject to an operating 
                                agreement;
                                    [(III) the operator enters 
                                into an agreement with the 
                                Secretary that is substantially 
                                the same as an Emergency 
                                Preparedness Agreement under 
                                section 53107 of this title, 
                                under which the operator shall 
                                make available commercial 
                                transportation resources as 
                                provided in that section;
                                    [(IV) 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 those 
                                vessels required to be 
                                chartered under subclause (I) 
                                by that person is 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.
                    [(B) No payment under this chapter may be 
                made for an existing tank vessel with respect 
                to which a binding contract is entered into 
                under 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) For purpose of subparagraph (A)(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.
                    [(D) No payment under this chapter may be 
                made for an existing tank vessel with respect 
                to which an agreement is entered into under 
                subparagraph (A)(ii) for any period occurring--
                            [(i) after the date that is 5 years 
                        after the first date that amounts 
                        became available to carry out this 
                        chapter, if the vessel or vessels 
                        required to be chartered under 
                        subparagraph (A)(ii) have not been 
                        delivered; or
                            [(ii) after delivery of the vessel 
                        or vessels required to be chartered 
                        under such subparagraph, if any of such 
                        vessels is not chartered by the 
                        operator of the existing tank vessel.
    (c) Procedure for Awarding New Operating Agreements.--The 
Secretary may enter into a new operating agreement with an 
applicant that meets the requirements of section 53102(c) (for 
vessels that meet the qualifications of section 53102(b)) on 
the basis of priority for vessel type established by military 
requirements of the Secretary of Defense. The Secretary shall 
allow an applicant at least 30 days to submit an application 
for a new operating agreement. After consideration of military 
requirements, priority shall be given to an applicant that is a 
U.S. citizen under section 50501 of this title. The Secretary 
may not approve an application without the consent of the 
Secretary of Defense. The Secretary shall enter into an 
operating agreement with the applicant or provide a written 
reason for denying the application.
    (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.

53104. Effectiveness of operating agreements

    (a) Effectiveness, Generally.--The Secretary may enter into 
an operating agreement under this chapter for fiscal year 2006. 
Except as provided in subsection (b), the agreement shall be 
effective only for 1 fiscal year, but shall be renewable, 
subject to the availability of appropriations, for each 
subsequent fiscal year through the end of fiscal year 2025.
    (b) Vessels under charter to United States.--Unless an 
earlier date is requested by the applicant, the effective date 
for an operating agreement with respect to a vessel that is, on 
the date of entry into an operating agreement, on charter to 
the United States Government, other than a charter pursuant to 
an Emergency Preparedness Agreement under section 53107, shall 
be the expiration or termination date of the Government charter 
covering the vessel, or any earlier date the vessel is 
withdrawn from that charter.
    (c) Termination.--
            (1) Termination by Secretary.--If the contractor 
        with respect to an operating agreement materially fails 
        to comply with the terms of the agreement--
                    (A) the Secretary shall notify the 
                contractor and provide a reasonable opportunity 
                to comply with the operating agreement;
                    (B) the Secretary shall terminate the 
                operating agreement if the contractor fails to 
                achieve such compliance; and
                    (C) upon such termination, any funds 
                obligated by the agreement shall be available 
                to the Secretary to carry out this chapter.
            (2) Early termination by contractor, generally.--An 
        operating agreement under this chapter shall terminate 
        on a date specified by the contractor if the contractor 
        notifies the Secretary, by not later than 60 days 
        before the effective date of the termination, that the 
        contractor intends to terminate the agreement.
            [(3) Early termination by contractor, with 
        available replacement.--An operating agreement under 
        this chapter shall terminate upon the expiration of the 
        3-year period beginning on the date a vessel begins 
        operating under the agreement, if--
                    [(A) the contractor notifies the Secretary, 
                by not later than 2 years after the date the 
                vessel begins operating under the agreement, 
                that the contractor intends to terminate the 
                agreement under this paragraph; and
                    [(B) the Secretary, in conjunction with the 
                Secretary of Defense, determines that--
                            [(i) an application for an 
                        operating agreement under this chapter 
                        has been received for a replacement 
                        vessel that is acceptable to the 
                        Secretaries; and
                            [(ii) during the period of an 
                        operating agreement under this chapter 
                        that applies to the replacement vessel, 
                        the replacement vessel will be--
                                    [(I) owned and operated by 
                                one or more persons that are 
                                citizens of the United States 
                                under section 50501 of this 
                                title; 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 
                                50501 of this title.]
    (d) Nonrenewal for Lack of Funds.--If, by the first day of 
a fiscal year, sufficient funds have not been appropriated 
under the authority provided by this chapter for that fiscal 
year, then the Secretary shall notify the Committee on Armed 
Services and the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Armed 
Services of the House of Representatives that operating 
agreements authorized under this chapter for which sufficient 
funds are not available will not be renewed for that fiscal 
year if sufficient funds are not appropriated by the 60th day 
of that fiscal year.
    (e) Release of Vessels from Obligations.--If [an operating 
agreement under this chapter is terminated under subsection 
(c)(3), or if] funds are not appropriated for payments under an 
operating agreement under this chapter for any fiscal year by 
the 60th day of that fiscal year, then--
            (1) each vessel covered by the operating agreement 
        is thereby released from any further obligation under 
        the operating agreement;
            (2) the owner or operator of the vessel may 
        transfer and register such vessel under a foreign 
        registry that is acceptable to the Secretary of 
        Transportation and the Secretary of Defense, 
        notwithstanding section 56101 of this title; and
            (3) if chapter 563 of this title is applicable to 
        such vessel after registration of the vessel under such 
        a registry, then the vessel is available to be 
        requisitioned by the Secretary of Transportation 
        pursuant to chapter 563.

53105. Obligations and rights under operating agreements

           *       *       *       *       *       *       *

    [(e) Transfer of Operating Agreements.--
            [(1) A contractor under an operating agreement may 
        transfer the agreement (including all rights and 
        obligations under the agreement) to any person that is 
        eligible to enter into that operating agreement under 
        this chapter, if the transfer is approved by the 
        Secretary and the Secretary of Defense.
            [(2) Limitation.--The Secretary of Defense may not 
        approve under paragraph (1) transfer of an operating 
        agreement to a person that is not a citizen of the 
        United States under section 50501 of this title unless 
        the Secretary of Defense determines that there is no 
        person who is a citizen under such section and is 
        interested in obtaining the operating agreement for a 
        vessel that is otherwise eligible to be included in the 
        Fleet under section 53102(b) and meets the requirements 
        of the Department of Defense.]
    (e) Transfer of Operating Agreements.--A contractor under 
an operating agreement may transfer the agreement (including 
all rights and obligations under the operating agreement) to 
any person that is eligible to enter into the operating 
agreement under this chapter if the Secretary and the Secretary 
of Defense determine that the transfer is in the best interests 
of the United States. A transaction shall not be considered a 
transfer of an operating agreement if the same legal entity 
with the same vessels remains the contracting party under the 
operating agreement.
    [(f) Replacement Vessel.--A contractor may replace a vessel 
under an operating agreement with another vessel that is 
eligible to be included in the Fleet under section 53102(b), if 
the Secretary, in conjunction with the Secretary of Defense, 
approves replacement of the vessel.]
    (f) Replacement Vessels.--A contractor may replace a vessel 
under an operating agreement with another vessel that is 
eligible to be included in the Fleet under section 53102(b), if 
the Secretary, in conjunction with the Secretary of Defense, 
approves the replacement of the vessel.

53106. Payments

    (a) Annual Payment.--
            (1) In general.--The Secretary, subject to the 
        availability of appropriations and the other provisions 
        of this section, shall pay to the contractor for an 
        operating agreement, for each vessel that is covered by 
        the operating agreement, an amount equal to--
                    (A) $2,600,000 for each of fiscal years 
                2006, 2007, and 2008;
                    (B) $2,900,000, for each of fiscal years 
                2009, 2010, and 2011; [and
                    (C) $3,100,000 for each of fiscal years 
                2012 though 2025.]
                    (C) $3,100,000 for each of fiscal years 
                2012, 2013, 2014, 2015, 2016, 2017, and 2018;
                    (D) $3,500,000 for each of fiscal years 
                2019, 2020, and 2021; and
                    (E) $3,700,000 for each of fiscal years 
                2022, 2023, 2024, and 2025.
            (2) Timing.--The amount shall be paid in equal 
        monthly installments at the end of each month. The 
        amount shall not be reduced except as provided by this 
        section.
    (b) Certification Required for Payment.--As a condition of 
receiving payment under this section for a fiscal year for a 
vessel, the contractor for the vessel shall certify, in 
accordance with regulations issued by the Secretary, that the 
vessel has been and will be operated in accordance with section 
53105(a)(1) for at least 320 days in the fiscal year. Days 
during which the vessel is drydocked, surveyed, inspected, or 
repaired shall be considered days of operation for purposes of 
this subsection.
    (c) General Limitations.--The Secretary of Transportation 
shall not make any payment under this chapter for a vessel with 
respect to any days for which the vessel is--
            (1) under a charter to the United States 
        Government, other than a charter pursuant to an 
        Emergency Preparedness Agreement under section 53107;
            (2) not operated or maintained in accordance with 
        an operating agreement under this chapter; or
            (3) more than--
                    (A) 25 years of age, except as provided in 
                subparagraph (B) or (C);
                    (B) 20 years of age, in the case of a tank 
                vessel; or
                    (C) 30 years of age, in the case of [a LASH 
                vessel.] a lighter aboard ship vessel. [This 
                amendment takes effect on December 31, 2014]
    (d) Reductions in Payments.--With respect to payments under 
this chapter for a vessel covered by an operating agreement, 
the Secretary--
            (1) except as provided in paragraph (2), shall not 
        reduce any payment for the operation of the vessel to 
        carry military or other preference cargoes under 
        section 55302(a), 55304, 55305, or 55314 of this title, 
        section 2631 of title 10, or any other cargo preference 
        law of the United States;
            (2) shall not make any payment for any day that the 
        vessel is engaged in transporting more than 7,500 tons 
        of civilian bulk preference cargoes pursuant to section 
        55302(a), 55305, or 55314 of this title, section 
        901(a), 901(b), or 901b of the Merchant Marine Act, 
        1936 (46 U.S.C. App. 1241(a), 1241(b), or 1241f), that 
        is bulk cargo; and
            (3) shall make a pro rata reduction in payment for 
        each day less than 320 in a fiscal year that the vessel 
        is not operated in accordance with section 53105(a)(1), 
        with days during which the vessel is drydocked or 
        undergoing survey, inspection, or repair considered to 
        be days on which the vessel is operated.
    (e) Limitation Regarding Noncontiguous Domestic Trade.--
            (1) In general.--No contractor shall receive 
        payments pursuant to this chapter during a period in 
        which it participates in noncontiguous domestic trade.
            (2) Limitation on application.--Paragraph (1) shall 
        not apply to any person that is a citizen of the United 
        States within the meaning of section 50501 of this 
        title, applying the 75 percent ownership requirement of 
        that section.
            (3) Participates in a noncontiguous domestic trade 
        defined.--In this subsection the term ``participates in 
        a noncontiguous domestic trade'' means directly or 
        indirectly owns, charters, or operates a vessel engaged 
        in transportation of cargo between a point in the 
        contiguous 48 States and a point in Alaska, Hawaii, or 
        Puerto Rico, other than a point in Alaska north of the 
        Arctic Circle.
    [(f) Priority in Allocation of Available Amounts.--If the 
amount available for a fiscal year for making payments under 
operating agreements under this chapter is not sufficient to 
pay the full amount authorized under each agreement pursuant to 
this section for such fiscal year, the amount available shall 
be allocated among such agreements in a manner that gives 
priority to payments for vessels that are subject to agreements 
under section 3517 of the Maritime Security Act of 2003 (46 
U.S.C. 53101 note).]

53107. National security requirements

           *       *       *       *       *       *       *

    (b) Terms of Agreement.--
            [(1) In general.--An Emergency Preparedness 
        Agreement under this section shall require that upon a 
        request by the Secretary of Defense during time of war 
        or national emergency, or whenever determined by the 
        Secretary of Defense to be necessary for national 
        security or contingency operation (as that term is 
        defined in section 101 of title 10, United States 
        Code), a contractor for a vessel covered by an 
        operating agreement under this chapter shall make 
        available commercial transportation resources 
        (including services).]
            (1) In general.--An Emergency Preparedness 
        Agreement under this section shall require that a 
        contractor for a vessel covered by an operating 
        agreement under this chapter shall make commercial 
        transportation resources (including services) 
        available, upon request by the Secretary of Defense 
        during a time of war or national emergency, or whenever 
        the Secretary of Defense determines that it is 
        necessary for national security or contingency 
        operation (as that term is defined in section 101 of 
        title 10, United States Code).
            (2) Basic terms.--
                    (A) The basic terms of the Emergency 
                Preparedness Agreement shall be established 
                (subject to subparagraph (B)) by the Secretary 
                and the Secretary of Defense.
                    (B) In any Emergency Preparedness 
                Agreement, the Secretary and a contractor may 
                agree to additional or modifying terms 
                appropriate to the contractor's circumstances 
                if those terms have been approved by the 
                Secretary of Defense.
            (3) Defense measures against unauthorized 
        seizures.--
                    (A) The Emergency Preparedness Agreement 
                for any operating agreement that first takes 
                effect or is renewed after the date of 
                enactment of the National Defense Authorization 
                Act for Fiscal Year 2010 shall require that any 
                vessel operating under the agreement in the 
                carriage of cargo for the Department of Defense 
                in an area that is designated by the Coast 
                Guard as an area of high risk of piracy shall 
                be equipped with, at a minimum, appropriate 
                non-lethal defense measures to protect the 
                vessel, crew, and cargo from unauthorized 
                seizure at sea.
                    (B) The Secretary of Defense and the 
                Secretary of the department in which the Coast 
                Guard is operating shall jointly prescribe the 
                non-lethal defense measures that are required 
                under this paragraph.

           *       *       *       *       *       *       *

[53109. Special rule regarding age of participating fleet vessel

    [Any age restriction under section 53102(b)(3) or 
53106(c)(3) shall not apply to a participating fleet vessel 
during the 30-month period beginning on the date the vessel 
begins operating under an operating agreement under this title, 
if the Secretary determines that the contractor for the vessel 
has entered into an arrangement to obtain and operate under the 
operating agreement for the participating fleet vessel a 
replacement vessel that, upon commencement of such operation, 
will be eligible to be included in the Fleet under section 
53102(b).]

           *       *       *       *       *       *       *

53111. Authorization of appropriations

    There are authorized to be appropriated for payments under 
section 53106, to remain available until expended--
            (1) $156,000,000 for each of fiscal years 2006, 
        2007, and 2008;
            (2) $174,000,000 for each of fiscal years 2009, 
        2010, and 2011; [and]
            [(3) $186,000,000 for each fiscal year thereafter 
        through fiscal year 2025.]
            (3) $186,000,000 for each of fiscal years 2012, 
        2013, 2014, 2015, 2016, 2017, and 2018;
            (4) $210,000,000 for each of fiscal years 2019, 
        2020, and 2021; and
            (5) $222,000,000 for each fiscal year thereafter 
        through fiscal year 2025.

53112. Acquisition of fleet vessels

    (a) In General.--Notwithstanding section 2218(f) of title 
10, United States Code, upon replacement of any vessel subject 
to an operating agreement under this chapter, and subject to 
agreement by the vessel owner, the Secretary is authorized, 
subject to concurrence with the Secretary of Defense, to 
acquire the vessel being replaced for inclusion in the National 
Defense Reserve Fleet.
    (b) Requirements.--In order to be eligible for acquisition 
by the Secretary under this section, a vessel shall--
            (1) have been included in a Maritime Security 
        Program Operating Agreement for not less than 3 years; 
        and
            (2) meet recapitalization requirements for the 
        Ready Reserve Force.
    (c) Fair Market Value.--The Maritime Administration shall 
establish a fair market value for the acquisition of an 
eligible vessel under this section.
    (d) Appropriations.--A vessel acquisition under this 
section shall be subject to the availability of appropriations 
and the appropriations shall be part of the National Defense 
Reserve Fleet appropriations and separate from Maritime 
Security Program appropriations.

                           TITLE 46. SHIPPING

                      SUBTITLE V. MERCHANT MARINE

                      PART D. PROMOTIONAL PROGRAMS

                 CHAPTER 556. SHORT SEA TRANSPORTATION

55601. Short sea transportation program

    (a) Establishment.--The Secretary of Transportation shall 
establish a short sea transportation program and designate 
short sea transportation projects to be conducted under the 
program to mitigate landside congestion and to promote more 
efficient use of the navigable waters of the United States.
    (b) Program Elements.--The program shall encourage the use 
of short sea transportation through the development and 
expansion of--
            (1) documented vessels;
            (2) shipper utilization;
            (3) port and landside infrastructure; and
            (4) marine transportation strategies by State and 
        local governments.
    (c) Short Sea Transportation Routes.--The Secretary shall 
designate short sea transportation routes as extensions of the 
surface transportation system to focus public and private 
efforts to use the waterways to relieve landside congestion 
along coastal corridors and to promote more efficient use of 
the navigable waters of the United States. The Secretary may 
collect and disseminate data for the designation and 
delineation of short sea transportation routes.
    [(d) Project Designation.--The Secretary may designate a 
project to be a short sea transportation project if the 
Secretary determines that the project may--
            [(1) offer a waterborne alternative to available 
        landside transportation services using documented 
        vessels; and
            [(2) provide transportation services for passengers 
        or freight (or both) that may reduce congestion on 
        landside infrastructure using documented vessels.]
    (d) Project Designation.--The Secretary may designate a 
project as a short sea transportation project if the Secretary 
determines that the project--
            (1) mitigates landside congestion; or
            (2) promotes more efficient use of the navigable 
        waters of the United States.
    (e) Elements of Program.--For a short sea transportation 
project designated under this section, the Secretary may--
            (1) promote the development of short sea 
        transportation services;
            (2) coordinate, with ports, State departments of 
        transportation, localities, other public agencies, and 
        the private sector and on the development of landside 
        facilities and infrastructure to support short sea 
        transportation services; and
            (3) develop performance measures for the short sea 
        transportation program.
    (f) Multistate, State and Regional Transportation 
Planning.--The Secretary, in consultation with Federal entities 
and State and local governments, shall develop strategies to 
encourage the use of short sea transportation for 
transportation of passengers and cargo. The Secretary shall--
            (1) assess the extent to which States and local 
        governments include short sea transportation and other 
        marine transportation solutions in their transportation 
        planning;
            (2) encourage State departments of transportation 
        to develop strategies, where appropriate, to 
        incorporate short sea transportation, ferries, and 
        other marine transportation solutions for regional and 
        interstate transport of freight and passengers in their 
        transportation planning; and
            (3) encourage groups of States and multi-State 
        transportation entities to determine how short sea 
        transportation can address congestion, bottlenecks, and 
        other interstate transportation challenges.
    (g) Grants.--
            (1) In general.--The Secretary shall establish and 
        implement a short sea transportation grant program to 
        implement projects or components of a project 
        designated under subsection (d).
            (2) Applications.--In order to receive a grant 
        under the program, an applicant shall--
                    (A) submit an application to the Secretary, 
                in such form and manner, at such time, and 
                containing such information as the Secretary 
                may require; and
                    (B) demonstrate to the satisfaction of the 
                Secretary that--
                            (i) the project is financially 
                        viable;
                            (ii) the funds received will be 
                        spent efficiently and effectively; and
                            (iii) a market exists for the 
                        services of the proposed project as 
                        evidenced by contracts or written 
                        statements of intent from potential 
                        customers.
            (3) Non-Federal share.--An applicant shall provide 
        at least 20 percent of the project costs from non-
        Federal sources. In awarding grants under the program, 
        the Secretary shall give a preference to those projects 
        or components that present the most financially viable 
        transportation services and require the lowest 
        percentage Federal share of the costs.

                           TITLE 46. SHIPPING

                      SUBTITLE V. MERCHANT MARINE

                      PART D. PROMOTIONAL PROGRAMS

                 CHAPTER 556. SHORT SEA TRANSPORTATION

55605. Short sea transportation defined

    In this chapter, the term ``short sea transportation'' 
means the carriage [by vessel] by a documented vessel of 
cargo--
            (1) that is--
                    (A) contained in intermodal cargo 
                containers and loaded by crane on the vessel; 
                or
                    (B) loaded on the vessel by means of 
                wheeled technology; and
            (2) that is--
                    (A) loaded at a port in the United States 
                and unloaded either at another port in the 
                United States or at a port in Canada located in 
                the Great Lakes Saint Lawrence Seaway System; 
                or
                    (B) loaded at a port in Canada located in 
                the Great Lakes Saint Lawrence Seaway System 
                and unloaded at a port in the United States.

                    MERCHANT SHIP SALES ACT OF 1946

SEC. 11. NATIONAL DEFENSE RESERVE FLEET.

                         [50 U.S.C. App. 1744]

    (a) Fleet Components.--The Secretary of Transportation 
shall maintain a National Defense Reserve Fleet, including any 
vessel assigned by the Secretary to the Ready Reserve Force 
component of the fleet, consisting of those vessels owned or 
acquired by the United States Government that the Secretary of 
Transportation, after consultation with the Secretary of the 
Navy, determines are of value for national defense purposes and 
that the Secretary of Transportation decides to place and 
maintain in the fleet.
    (b) Permitted Uses.--Except as otherwise provided by law, a 
vessel in the fleet may be used--
            (1) for an account of an agency of the United 
        States Government in a period during which vessels may 
        be requisitioned under section 902 of the Merchant 
        Marine Act, 1936 (46 App. U.S.C. 1242); or
            (2) on the request of the Secretary of Defense, and 
        in accordance with memoranda of agreement between the 
        Secretary of Transportation and the Secretary of 
        Defense, for--
                    (A) testing for readiness and suitability 
                for mission performance;
                    (B) defense sealift functions for which 
                other sealift assets are not reasonably 
                available; and
                    (C) support of the deployment of the United 
                States armed forces in a military contingency, 
                for military contingency operations, or for 
                civil contingency operations upon orders from 
                the National Command Authority;
            (3) for otherwise lawfully permitted storage or 
        transportation of non-defense-related cargo as directed 
        by the Secretary of Transportation with the concurrence 
        of the Secretary of Defense;
            (4) for training purposes to the extent authorized 
        by the Secretary of Transportation with the concurrence 
        of the Secretary of Defense; [or]
            (5) on a reimbursable basis, for charter to the 
        government of any State, locality, or Territory of the 
        United States, except that the prior consent of the 
        Secretary of Defense for such use shall be required 
        with respect to any vessel in the Ready Reserve Force 
        or in the National Defense Reserve Fleet which is 
        maintained in a retention status for the Department of 
        Defense[.]; or
            (6) for civil contingency operations and Maritime 
        Administration promotional and media events under 
        subsection (f).
    (c) Ready Reserve Force Management.--
            (1) Minimum requirements.--To ensure the readiness 
        of vessels in the Ready Reserve Force component of the 
        National Defense Reserve Fleet, the Secretary of 
        Transportation shall, at a minimum--
                    (A) maintain all of the vessels in a manner 
                that will enable each vessel to be activated 
                within a period specified in plans for 
                mobilization of the vessels;
                    (B) activate and conduct sea trials on each 
                vessel at least once every 30 months;
                    (C) maintain in an enhanced activation 
                status those vessels that are scheduled to be 
                activated within 5 days;
                    (D) locate those vessels that are scheduled 
                to be activated within 5 days near embarkation 
                ports specified for those vessels; and
                    (E) notwithstanding section 2109 of title 
                46, United States Code, have each vessel 
                inspected by the Secretary of the department in 
                which the Coast Guard is operating to determine 
                if the vessel meets the safety standards that 
                would apply under part B of subtitle II of that 
                title if the vessel were not a public vessel.
            (2) Vessel managers.--
                    (A) Eligibility for contract.--A person, 
                including a shipyard, is eligible for a 
                contract for the management of a vessel in the 
                Ready Reserve Force if the Secretary 
                determines, at a minimum, that the person has--
                            (i) experience in the operation of 
                        commercial-type vessels or public 
                        vessels owned by the United States 
                        Government; and
                            (ii) the management capability 
                        necessary to operate, maintain, and 
                        activate the vessel at a reasonable 
                        price.
                    (B) Contract requirement.--The Secretary of 
                Transportation shall include in each contract 
                for the management of a vessel in the Ready 
                Reserve Force a requirement that each seaman 
                who performs services on any vessel covered by 
                the contract hold the license or merchant 
                mariner's document that would be required under 
                chapter 71 or chapter 73 of title 46, United 
                States Code, for a seaman performing that 
                service while operating the vessel if the 
                vessel were not a public vessel.
    (d) Applicability of Limitations on Overhaul, Repair, and 
Maintenance in Foreign Shipyards.--
            (1) Application of limitation.--The provisions of 
        section 7310 of title 10, United States Code, shall 
        apply to vessels specified in subsection (b), and to 
        the Secretary of Transportation with respect to those 
        vessels, in the same manner as those provisions apply 
        to vessels specified in subsection (b) of such section, 
        and to the Secretary of the Navy, respectively.
            (2) Covered vessels.-- Vessels specified in this 
        paragraph are vessels maintained by the Secretary of 
        Transportation in support of the Department of Defense, 
        including any vessel assigned by the Secretary of 
        Transportation to the Ready Reserve Force that is owned 
        by the United States.
    (e) Exemption of Fleet from 46 USCS 3703a.-- Vessels in 
the National Defense Reserve Fleet are exempt from the 
provisions of section 3703a of title 46, United States Code.
    (f) Civil Contingency Operations and Promotional and Media 
Events.--The Secretary of Transportation may allow, with the 
concurrence of the Secretary of Defense, the use of a vessel in 
the National Defense Reserve Fleet for civil contingency 
operations requested by another Federal agency, and for 
Maritime Administration promotional and media events that are 
related to demonstration projects and research and development 
supporting the Maritime Administration's mission, if the 
Secretary of Transportation determines the use of the vessel is 
in the best interest of the United States Government after--
            (1) considering the availability of the National 
        Defense Reserve Fleet and Ready Reserve Force 
        resources;
            (2) considering the impact on National Defense 
        Reserve Fleet and Ready Reserve Force mission support 
        to the defense and homeland security requirements of 
        the United States Government;
            (3) ensuring that the use of the vessel supports 
        the mission of the Maritime Administration and does not 
        significantly interfere with vessel maintenance, 
        repair, safety, readiness, or resource availability;
            (4) ensuring that safety precautions are taken, 
        including indemnification of liability, when 
        applicable;
            (5) ensuring that any cost incurred by the use of 
        the vessel is funded as a reimbursable transaction 
        between Federal agencies, as applicable; and
            (6) considering any other factors the Secretary of 
        Transportation determines are appropriate.

FLOYD D. SPENCE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2001

SEC. 3502. NATIONAL DEFENSE RESERVE FLEET.

[16 U.S.C. 5405 note]

           *       *       *       *       *       *       *

    [(f) Report.--No later than 1 year after the date of the 
enactment of this subsection, and every 6 months thereafter, 
the Secretary of Transportation, in coordination with the 
Secretary of the Navy, shall report to the Committee on 
Transportation and Infrastructure, the Committee on Resources, 
and the Committee on Armed Services of the House of 
Representatives, and to the Committee on Commerce, Science, and 
Transportation and the Committee on Armed Services of the 
Senate, on the progress made in implementing the vessel 
disposal plan developed under subsection (c). In particular, 
the report shall address the performance measures required to 
be established under subsection (c)(2)(C).]
    (f) The Secretary of Transportation shall provide 
briefings, upon request, to the Committee on Commerce, Science, 
and Transportation and the Committee on Armed Services of the 
Senate and the Committee on Transportation and Infrastructure, 
the Committee on Resources, and the Committee on Armed Services 
of the House of Representatives on--
            (1) the progress made to recycle vessels;
            (2) any problems encountered in recycling vessels; 
        and
            (3) any other issues relating to vessel recycling 
        and disposal.

                                  
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