I

103D CONGRESS

1ST SESSION H. R. 57

To amend title 10, United States Code, to clarify the preference for United

States-flag merchant vessels in the carriage of Department of Defense

cargoes, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mrs. BENTLEY introduced the following bill; which was referred jointly to the

Committees on Merchant Marine and Fisheries and Armed Services

A BILL

To amend title 10, United States Code, to clarify the preference for United States-flag merchant vessels in the

carriage of Department of Defense cargoes, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘United States Mer5 chant Marine Utilization and Preference Act of 1993’’.

6 SEC. 2. FINDINGS AND POLICY.

7 (a) FINDINGS.—The Congress finds that, for national

8 defense, it is in the interest of the United States that a
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1 clear understanding exists among the Department of

2 Transportation and the Department of Defense, in par3 ticular, and all other Federal departments and agencies,

4 that all Federal departments and agencies have com5 plementary interests in the control and utilization of

6 ocean-going merchant vessels that are registered or docu7 mented under the laws of the United States.

8 (b) POLICY.—It is the policy of the United States

9 that—

10 (1) the Federal Maritime Administration and

11 its wartime counterpart have broad powers of con12 trol over ocean-going United States-flag merchant

13 vessels; and

14 (2) the Secretary of Defense, operating under

15 the national policy promulgated in section 101 of the

16 Merchant Marine Act, 1936 (46 App. U.S.C. 1101),

17 ensure that military drafts of United States-flag

18 merchant vessels (including breakbulk, roll-on-roll19 off, lift-on lift-off (cellularized and containerized),

20 multipurpose carriers, tankers, and various auxil21 iaries), are operated in conformity with the require22 ments and plans of the Department of Defense and

23 military exigencies.

24 SEC. 3. PURPOSE.

25 The purpose of this Act is to—
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1 (1) clarify the Department of Defense cargoes

2 transported by water that are required to be trans3 ported on privately owned United States-flag vessels;

4 (2) clarify the Department of Defense cargoes

5 transported by water that may be transported on

6 vessels that are owned, controlled, or chartered by

7 the Government of the United States; and

8 (3) reduce to a minimum the number of cargo

9 transport vessels maintained and operated by the

10 Military Sealift Command in order to give preference

11 to privately owned United States-flag vessels for

12 transportation by water of Department of Defense

13 cargoes.

14 SEC. 4. TRANSPORTATION BY WATER OF DEPARTMENT OF

15 DEFENSE CARGOES.

16 Section 2631 of title 10, United States Code, is

17 amended to read as follows:

18 ‘‘§ 2631. Transportation by water of Department of

19 Defense cargoes

20 ‘‘(a) Except as otherwise provided in this section,

21 under conditions other than full or partial mobilization de22 clared by the President, transportation by water for De23 partment of Defense cargoes shall be obtained, consistent

24 with military requirements and prudent management, in

25 the following order of priority:
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1 ‘‘(1) To the maximum extent practicable, use of

2 privately owned United States-flag vessels that are—

3 ‘‘(A) operating in United States liner or

4 tramp trades, and

5 ‘‘(B) not chartered to the Government.

6 ‘‘(2)(A) Time charter or voyage charter of suit7 able privately owned United States-flag vessels—

8 ‘‘(i) operating in liner service providing

9 partial or total space available, or

10 ‘‘(ii) operating in tramp service,

11 to the extent those vessels are voluntarily made

12 available to the Department of Defense.

13 ‘‘(B) Time charters and voyage charters pursu14 ant to this paragraph shall be kept to the minimum

15 necessary to meet requirements which, barring rea16 sonable foresight, cannot be met by United States17 flag liner or tramp operators.

18 ‘‘(3)(A) In the event suitable United States-flag

19 vessels are not available in accordance with para20 graphs (1) and (2), and upon the written approval

21 of the Secretary of Transportation, use of—

22 ‘‘(i) vessels in the nucleus fleet established

23 under section 2631a; and

24 ‘‘(ii) to the extent vessels in the nucleus

25 fleet are not available, as determined by the
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1 Secretary of Defense, foreign-flag vessels to the

2 extent necessary to meet urgent military re3 quirements.

4 ‘‘(B) Any use of a foreign-flag vessel pursuant

5 to this paragraph shall be limited to a single voyage.

6 ‘‘(b)(1) Except as provided in paragraph (2), any ap7 propriate tariff that a person has filed with the Federal

8 Maritime Commission under either the Shipping Act of

9 1916 or the Shipping Act of 1984 shall apply to transpor10 tation of Department of Defense cargo on any United

11 States-flag vessel that is operated by that person.

12 ‘‘(2)(A) This section does not prohibit an agency that

13 is responsible for procuring transportation of Department

14 of Defense cargo from procuring that transportation from

15 a person at a negotiated rate that is more favorable to

16 the United States Government than a tariff filed by that

17 person that is otherwise applicable under paragraph (1).

18 ‘‘(B) Any rate that is negotiated under this subpara19 graph shall be filed with the Federal Maritime Commis20 sion in the manner prescribed by the Commission.

21 ‘‘(c)(1) The Office of the Chief of Naval Operations

22 shall be solely responsible in the Department of Defense

23 for obtaining, providing, operating, and controlling Gov24 ernment-owned or Government-chartered vessels—
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1 ‘‘(A) to transport Department of Defense car2 goes in areas that are not served by privately owned

3 United States-flag merchant vessels; and

4 ‘‘(B) for purposes of any partial or full mobili5 zation conducted for any reason declared by the

6 President.

7 ‘‘(2)(A) The Military Sealift Command is the sole

8 manager for ocean transportation of Department of De9 fense cargoes.

10 ‘‘(B) The purpose of any ocean transportation pro11 vided by the Department of Defense is to support and aug12 ment persons who provide transportation by water in com13 mercial service to the extent those persons cannot provide

14 the vessels or services required by the Department of De15 fense.

16 ‘‘(C) Except as provided in this section and section

17 2631a, the Department of Defense shall not engage in

18 competition with private persons in the provision of trans19 portation by water in commercial service.’’.

20 SEC. 5. NUCLEUS FLEET.

21 Chapter 157 of title 10, United States Code, is

22 amended by inserting after section 2631 the following:

23 ‘‘§ 2631a. Nucleus fleet

24 ‘‘(a)(1) The Secretary of Defense shall establish and

25 maintain at all times under the exclusive custody, jurisdic-
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1 tion, and control of the Department of Defense, a fleet

2 of vessels, of a size and composition appropriate to meet

3 military requirements. Such fleet shall be known as the

4 ‘nucleus fleet’.

5 ‘‘(2) The nucleus fleet may be comprised of—

6 ‘‘(A) Government-owned vessels, operated by ei7 ther—

8 ‘‘(i) the Military Sealift Command or other

9 Department of Defense agency with civil service

10 employees, or

11 ‘‘(ii) companies that are citizens of the

12 United States under section 2 of the Shipping

13 Act, 1916, with commercial crews; or

14 ‘‘(B) privately owned United States-flag vessels

15 that are chartered by the Department of Defense.

16 ‘‘(b)(1) Under conditions other than full mobilization,

17 the nucleus fleet—

18 ‘‘(A) shall consist of such number and types of

19 vessels as is appropriate to respond to changes in

20 the military situation, as determined by the Sec21 retary of Defense; and

22 ‘‘(B) may include transport, cargo, tanker, roll23 on roll-off, lift-on lift-off, geared, and nongeared ves24 sels and auxiliaries in appropriate numbers—
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1 ‘‘(i) to carry out logistic needs of the mili2 tary departments which cannot be met by pri3 vate United States commercial interests;

4 ‘‘(ii) to provide immediate capability in an

5 emergency; and

6 ‘‘(iii) to provide an adequate base for nec7 essary expansion to meet emergency or mobili8 zation requirements in support of approved

9 plans for national defense, national emergency,

10 national mobilization, or national interest.

11 ‘‘(2)(A) Under conditions other than full mobiliza12 tion, that portion of the nucleus fleet maintained for pur13 poses of transportation by water shall remain within close

14 tolerance to the following numbers of vessels by types:

15 ‘‘(i) 10 dry cargo vessels.

16 ‘‘(ii) 22 tanker vessels.

17 ‘‘(B) The numbers set forth in subparagraph (A)(i)

18 and (ii)—

19 ‘‘(i) shall be reduced by one for each vessel de20 activated under subsection (c)(2)(A) or for which a

21 contract of charter is terminated under subsection

22 (c)(2)(B); and

23 ‘‘(ii) are subject to review and redetermination

24 by the Secretary of Defense in accordance with mili25 tary operation requirements.
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1 ‘‘(C) Any change in the composition of the nucleus

2 fleet from the numbers and types of vessels specified in

3 subparagraph (A)(i) and (ii) shall not be effective unless—

4 ‘‘(i) a request for that change is submitted by

5 the Secretary of the Navy to the Secretary of De6 fense;

7 ‘‘(ii) the change is approved by the Secretary of

8 Defense; and

9 ‘‘(iii) the change is reported to the Congress

10 with supporting rationale.

11 ‘‘(3) In addition to the numbers of vessels specified

12 under paragraph (2), the nucleus fleet may include such

13 miscellaneous service support vessels and naval fleet auxil14 iary vessels as the Military Sealift Command determines

15 to be necessary to retain and operate for purposes of pro16 viding indirect support of other vessels of the Department

17 of the Navy.

18 ‘‘(c)(1) If a vessel in the nucleus fleet is inactive for

19 a period of 30 days, it shall be placed in reduced operating

20 status.

21 ‘‘(2) If vessel in the nucleus fleet is inactive for 120

22 days—

23 ‘‘(A) in the case of a vessel that is owned by

24 the United States, it shall be deactivated and placed
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1 in reserve or disposed of, as considered appropriate

2 by the Secretary of Defense; and

3 ‘‘(B) in the case of a privately owned vessel, the

4 contract under which it is chartered shall be termi5 nated on the earliest possible date.

6 ‘‘(d)(1) Under conditions of full mobilization, in addi7 tion to the numbers and types of vessels authorized under

8 subsections (a), (b), and (c)—

9 ‘‘(A) the nucleus fleet may be augmented by

10 those types and numbers of vessels determined to be

11 appropriate by the Secretary of Defense, in accord12 ance with the priority established under section

13 2631(a);

14 ‘‘(B) the specific types of vessels to be added to

15 the nucleus fleet, and an appropriate schedule for

16 their transfer to or acquisition for the nucleus fleet,

17 shall be determined only by the Chief of Naval Oper18 ations.

19 ‘‘(2)(A) Any vessels to be added to the nucleus fleet

20 pursuant to paragraph (1) shall be provided by the Sec21 retary of Transportation in accordance with mobilization

22 procedures approved by the Secretary of Defense.

23 ‘‘(B) In addition to additional vessels provided under

24 subparagraph (A) for the nucleus fleet, the Secretary of

25 Transportation shall provide to the Secretary of Defense
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1 such additional miscellaneous service support vessels and

2 naval fleet auxiliary vessels as the Secretary of Defense

3 determines to be necessary for purposes of providing indi4 rect support of other vessels of the Department of the

5 Navy for purposes of a full mobilization.

6 ‘‘(3) During periods of full or partial mobilization,

7 the Secretary of Defense shall—

8 ‘‘(A) continuously review the number of mer9 chant vessels under the control of the Department of

10 Defense;

11 ‘‘(B) determine any of those vessels that are ex12 cess to the needs of the department; and

13 ‘‘(C) transfer to the Secretary of Transpor14 tation such excess vessels.

15 ‘‘(4)(A) Upon the termination of hostilities or in the

16 event of a partial demobilization prior to the termination

17 of hostilities, the nucleus fleet shall be reduced to the num18 bers and types of vessels in the fleet before full mobiliza19 tion, as determined by the Secretary of Defense.

20 ‘‘(B) In the event of a reduction in the nucleus fleet

21 under this paragraph, any vessels in the fleet that are re22 tained as part of either the active or laid-up permanent

23 operating forces of the Department of the Navy shall be

24 released from control by the Department of Defense in

25 the following order of priority:
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1 ‘‘(i) Foreign-flag vessels that are under charter.

2 ‘‘(ii) United States-flag vessels that are under

3 charter from private owners.

4 ‘‘(iii) United States Government-owned mer5 chant vessels that are desired for sale or charter by

6 United States citizens for United States-flag oper7 ation in commercial service.

8 ‘‘(C) Vessels that are sold or chartered pursuant to

9 subparagraph (B)(iii) are deemed to be war-built vessels

10 for purposes of the Merchant Ship Sales Act of 1946 (50

11 App. U.S.C. 1735 et seq.).’’.

12 SEC. 6. CLERICAL AMENDMENT.

13 The table of sections at the beginning of chapter 157

14 of title 10, United States Code, is amended by striking

15 the item relating to section 2631 and inserting the follow16 ing:

‘‘2631. Transportation by water of Department of Defense cargoes.

‘‘2631a. Nucleus fleet.’’.

17 SEC. 7. READY RESERVE FORCE.

18 Section 11 of the Merchant Ship Sales Act of 1946

19 (50 App. U.S.C. 1744) is amended by adding at the end

20 the following:

21 ‘‘(e) USE OF VESSELS IN READY RESERVE FORCE.—

22 ‘‘(1) USE IN PEACETIME.—Vessels in the Ready

23 Reserve Force component of the National Defense

24 Reserve Fleet may be used in peacetime for routine
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1 movements of cargo as part of military exercises

2 only if that use does not compete with United

3 States-flag commercial vessel operators.

4 ‘‘(2) DEACTIVATION FOLLOWING NATIONAL

5 EMERGENCY.—A vessel in the Ready Reserve Force

6 component of the National Defense Reserve Fleet

7 that is activated to meet military sealift require8 ments associated with a national emergency shall be

9 deactivated in an expeditious manner if those re10 quirements no longer exist.’’.

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