III

106TH CONGRESS

1ST SESSION S. RES. 32

To express the sense of the Senate reaffirming the cargo preference policy

of the United States.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 4, 1999

Mr. INOUYE submitted the following resolution; which was referred to the

Committee on Commerce, Science, and Transportation

RESOLUTION

To express the sense of the Senate reaffirming the cargo

preference policy of the United States.

Whereas the maritime policy of the United States expressly

provides that the United States have a merchant marine

sufficient to carry a substantial portion of the international waterborne commerce of the United States;

Whereas the maritime policy of the United States expressly

provides that the United States have a merchant marine

sufficient to serve as a fourth arm of defense in time of

war and national emergency;

Whereas the Federal Government has expressly recognized

the vital role of the United States merchant marine during Operation Desert Shield and Operation Desert

Storm;
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Whereas cargo reservation programs of Federal agencies are

intended to support the privately owned and operated

United States-flag merchant marine by requiring a certain percentage of government-impelled cargo to be carried on United States-flag vessels;

Whereas when Congress enacted Federal cargo reservation

laws Congress contemplated that Federal agencies would

incur higher program costs to use the United States-flag

vessels required under such laws;

Whereas section 2631 of title 10, United States Code, requires that all United States military cargo be carried on

United States-flag vessels;

Whereas Federal law requires that cargo purchased with loan

funds and guarantees from the Export-Import Bank of

the United States established under section 635 of title

12, United States Code, be carried on United States-flag

vessels;

Whereas section 901b of the Merchant Marine Act, 1936 (46

U.S.C. App. 1241f) requires that 75 percent of the gross

tonnage of certain agricultural exports that are the subject of an export activity of the Commodity Credit Corporation or the Secretary of Agriculture be carried on

United States-flag vessels;

Whereas section 901(b) of such Act (46 U.S.C. App.

1241(b)) requires that at least 50 percent of the gross

tonnage of other ocean borne cargo generated directly or

indirectly by the Federal Government be carried on

United States-flag vessels;

Whereas cargo reservation programs are very important for

the shipowners of the United States who require compensation for maintaining a United States-flag fleet;
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Whereas the United States-flag vessels that carry reserved

cargo provide quality jobs for seafarers of the United

States;

Whereas, according to the most recent statistics from the

Maritime Administration, in 1997, cargo reservation programs generated $900,000,000 in revenue to the United

States fleet and accounted for one-third of all revenue

from United States-flag foreign trade cargo;

Whereas the Maritime Administration has indicated that the

total volume of cargoes moving under the programs subject to Federal cargo reservation laws is declining and

will continue to decline;

Whereas, in 1970, Congress found that the degree of compliance by Federal agencies with the requirements of the

cargo reservation laws was chaotic, uneven, and varied

from agency to agency;

Whereas, to ensure maximum compliance by all agencies with

Federal cargo reservation laws, Congress enacted the

Merchant Marine Act of 1970 (Public Law 91–469) to

centralize monitoring and compliance authority for all

cargo reservation programs in the Maritime Administration;

Whereas, notwithstanding section 901(b) of the Merchant

Marine Act, 1936 (46 U.S.C. App. 1241(b)), and the

purpose and policy of the Federal cargo reservation programs, compliance by Federal agencies with Federal

cargo reservation laws continues to be inadequate;

Whereas the Maritime Administrator cited the limited enforcement powers of the Maritime Administration with

respect to Federal agencies that fail to comply with section 901(b) of the Merchant Marine Act, 1936 (46
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U.S.C. App. 1241(b)) and other Federal cargo reservation laws; and

Whereas the Maritime Administrator recommended that Congress grant the Maritime Administration the authority to

settle any cargo reservation disputes that may arise between a ship operator and a Federal agency: Now, therefore, be it

1 Resolved, That it is the sense of the Senate that—

2 (1) each Federal agency shall administer pro3 grams of the Federal agency that are subject to

4 Federal cargo reservation laws (including regulations

5 of the Maritime Administration) to ensure that such

6 programs are in compliance with the intent and pur7 pose of such cargo reservation laws; and

8 (2) the Maritime Administration shall closely

9 and strictly monitor any cargo that is subject to

10 such cargo reservation laws and shall provide direc11 tions and decisions to such Federal agencies as will

12 ensure maximum compliance with the cargo pref13 erence laws.

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