U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

19–010 

" ! SENATE 

112TH CONGRESS

1st Session 

REPORT

2011

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 


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(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

JIM DEMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

JOHNNY ISAKSON, Georgia 

ROY BLUNT, Missouri 

JOHN BOOZMAN, Arkansas 

PATRICK J. TOOMEY, Pennsylvania 

MARCO RUBIO, Florida 

KELLY AYOTTE, New Hampshire 

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 


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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 

R E P O R T 

[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 


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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: 


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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 2013 2014 2015 2016 2012– 

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 


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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. 


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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 EmerVerDate Mar 15 2010 05:37 Dec 08, 2011 Jkt 019010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR099.XXX SR099

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gency 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 nongovernmental 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. 


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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 


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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 


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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. 

ø(d) INTERCOASTAL AND INLAND WATER TRANSPORTATION.—The 

Secretary shall investigate, determine, and keep current records of 


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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. 


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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 


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1 This amendment takes effect on December 31, 2014 2 This amendment takes effect on December 31, 2014 

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). 

ø(4) FOREIGN COMMERCE.—The term ‘‘foreign commerce’’— 

ø(A) subject to subparagraph (B), means— 

ø(i) commerce or trade between the United States, 

its territories or possessions, or the District of Columbia, and a foreign country; and 

ø(ii) commerce or trade between foreign countries; 

and 

ø(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. 

ø(5) LASH VESSEL.—The term ‘‘LASH vessel’’ means a 

lighter aboard ship vessel.1¿ 

ø(6) PARTICIPATING FLEET VESSEL.—The term ‘‘participating fleet vessel’’ means any vessel that— 

ø(A) on October 1, 2005— 

ø(i) meets the requirements of paragraph (1), (2), 

(3), or (4) of section 53102(c); and 

ø(ii) is less than 25 years of age, or less than 30 

years of age in the case of a LASH vessel; and 

ø(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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(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. 

ø(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. 

ø(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. 

ø(9)¿(8) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Transportation. 

ø(10)¿(9) TANK VESSEL.—The term ‘‘tank vessel’’ has the 

meaning that term has under section 2101 of this title. 

ø(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. 

ø(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 


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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. 

ø(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 

* * * * * * * 

ø(b) VESSEL ELIGIBILITY.—A vessel is eligible to be included in 

the Fleet if— 

ø(1) the vessel meets the requirements of paragraph (1), 

(2), (3), or (4) of subsection (c); 

ø(2) the vessel is operated (or in the case of a vessel to be 

constructed, will be operated) in providing transportation in 

foreign commerce; 

ø(3) the vessel is self-propelled and is— 

ø(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; 

ø(B) a tank vessel that is constructed in the United 

States after the date of the enactment of this chapter; 

ø(C) a tank vessel that is 10 years of age or less on 

the date the vessel is included in the Fleet; 

ø(D) a LASH vessel that is 25 years of age or less on 

the date the vessel is included in the Fleet; or 

ø(E) any other type of vessel that is 15 years of age 

or less on the date the vessel is included in the Fleet; 

ø(4) the vessel is— 

ø(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 

ø(B) determined by the Secretary to be commercially 

viable; and 

ø(5) the vessel— 

ø(A) is a United States-documented vessel; or 

ø(B) is not a United States-documented vessel, but— 

ø(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 

ø(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); 


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(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. 

ø(b) PROCEDURE FOR APPLICATIONS.— ø(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. 

ø(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. 

ø(3) PARTICIPATING FLEET VESSELS.— ø(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. 

ø(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 


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owner of the vessel shall be treated as having the authority referred to in paragraph (1). 

ø(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). 

ø(c) PRIORITY FOR AWARDING AGREEMENTS.— ø(1) IN GENERAL.—Subject to the availability of appropriations, the Secretary shall enter into operating agreements according to the following priority: 

ø(A) NEW TANK VESSELS.—First, for any tank vessel 

that— 

ø(i) is constructed in the United States after the 

effective date of this chapter; 

ø(ii) is eligible to be included in the Fleet under 

section 53102(b); and 

ø(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. 

ø(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. 

ø(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— 


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ø(i) owned and operated by one or more persons 

that are citizens of the United States under section 

50501 of this title; or 

ø(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. 

ø(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). 

ø(2) REDUCTION IN NUMBER OF SLOTS FOR PARTICIPATING

FLEET VESSELS.—The number in paragraph (1)(B) shall be reduced by 1— 

ø(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 

ø(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. 

ø(3) DISCRETION WITHIN PRIORITY.—The Secretary— 

ø(A) subject to subparagraph (B), may award operating agreements within each priority under paragraph (1) 

as the Secretary considers appropriate; and 

ø(B) shall award operating agreements within a priority— 

ø(i) in accordance with operational requirements 

specified by the Secretary of Defense; 

ø(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 

ø(iii) subject to the approval of the Secretary of 

Defense. 

ø(4) TREATMENT OF TANK VESSEL TO BE REPLACED.— ø(A) For purposes of the application of paragraph 

(1)(A) with respect to the award of an operating agreement, the Secretary may treat an existing tank vessel that 

is eligible to be included in the Fleet under section 

53102(b) as a vessel that is constructed in the United 

States after the effective date of this chapter, if— 

ø(i) (I) a binding contract for construction in the 

United States of a replacement vessel to be operated 

under the operating agreement is executed by not 

later than 9 months after the first date amounts are 

available to carry out this chapter; and 

ø(II) the replacement vessel is eligible to be 

included in the Fleet under section 53102(b); or 

ø(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 


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built in the United States and operated as a documented vessel or documented vessels; 

ø(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; 

ø(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; 

ø(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. 

ø(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— 

ø(i) 4 years after the first date amounts are available to carry out this chapter; or 

ø(ii) the date of delivery of the replacement tank 

vessel. 

ø(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. 

ø(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— 

ø(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 

ø(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 AGREE- MENTS.—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 agreeVerDate Mar 15 2010 05:37 Dec 08, 2011 Jkt 019010 PO 00000 Frm 00020 Fmt 6659 Sfmt 6603 E:\HR\OC\SR099.XXX SR099

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ment. 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. 

ø(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— 

ø(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 


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ø(B) the Secretary, in conjunction with the Secretary 

of Defense, determines that— 

ø(i) an application for an operating agreement 

under this chapter has been received for a replacement vessel that is acceptable to the Secretaries; and 

ø(ii) during the period of an operating agreement 

under this chapter that applies to the replacement 

vessel, the replacement vessel will be— 

ø(I) owned and operated by one or more persons that are citizens of the United States under 

section 50501 of this title; or 

ø(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 øan 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 

* * * * * * * 

ø(e) TRANSFER OF OPERATING AGREEMENTS.— 

ø(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. 

ø(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 secVerDate Mar 15 2010 05:37 Dec 08, 2011 Jkt 019010 PO 00000 Frm 00022 Fmt 6659 Sfmt 6601 E:\HR\OC\SR099.XXX SR099

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tion 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. 

ø(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; øand 

(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. 


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(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 øa 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. 

ø(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 


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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.— 

ø(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. 

* * * * * * * 


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ø§ 53109. Special rule regarding age of participating fleet 

vessel 

øAny 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; øand¿ 

ø(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. 


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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. 

ø(d) PROJECT DESIGNATION.—The Secretary may designate a 

project to be a short sea transportation project if the Secretary determines that the project may— 

ø(1) offer a waterborne alternative to available landside 

transportation services using documented vessels; and 

ø(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 


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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 øby 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— 


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(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; øor¿ 

(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 

Defenseø.¿; or 

(6) for civil contingency operations and Maritime Administration promotional and media events under subsection (f). 

(c) READY RESERVE FORCE MANAGEMENT.— 


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(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. 


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(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] 

* * * * * * * 

ø(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; 


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(2) any problems encountered in recycling vessels; and 

(3) any other issues relating to vessel recycling and disposal. 

Æ 


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