Calendar No. 220

106TH CONGRESS

1ST SESSION S. 937

[Report No. 106–111]

A BILL

To authorize appropriations for fiscal years 2000

purposes.Department of Transportation, and for otherand 2001 for certain maritime programs of the

JULY 20, 1999

Reported with an amendment and an amendment to the

title
II

Calendar No. 220

106TH CONGRESS

1ST SESSION S. 937

[Report No. 106–111]

To authorize appropriations for fiscal years 2000 and 2001 for certain maritime programs of the Department of Transportation, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 3, 1999

Mrs. HUTCHISON (for herself, Mr. MCCAIN, Mr. HOLLINGS, and Mr. INOUYE)

introduced the following bill; which was read twice and referred to the

Committee on Commerce, Science, and Transportation

JULY 20, 1999

Reported by Mr. MCCAIN, with an amendment and an amendment to the title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To authorize appropriations for fiscal years 2000 and 2001

for certain maritime programs of the Department of

Transportation, 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,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Maritime Administra3 tion Authorization Act for Fiscal Years 2000 and 2001’’.

4 SECTION 2. AUTHORIZATION OF APPROPRIATIONS FOR

5 FISCAL YEARS 2000 AND 2001.

6 There are authorized to be appropriated to the Sec7 retary of Transportation for the Maritime Administration

8 as follows:

9 (1) For expenses necessary for operations and

10 training activities, not to exceed $72,164,000 for the

11 fiscal year ending September 30, 2000.

12 (2) For the costs, as defined in section 502 of

13 the Federal Credit Reform Act of 1990, of guaran14 teed loans authorized by Title XI of the Merchant

15 Marine Act, 1936, (46 U.S.C. App. 1271 et seq.),

16 $6,000,000, to be available until expended. In addi17 tion, for administrative expenses related to loan

18 guarantee commitments under Title XI of the Mer19 chant Marine Act, 1936, (46 U.S.C. App. 1271 et

20 seq.), $3,893,000.

21 (3) For the fiscal year ending September 30,

22 2001, such sums as may be necessary.

23 SECTION 3. AMENDMENTS TO TITLE XI OF THE MERCHANT

24 MARINE ACT, 1936.

25 (a) Section 1108(a) of the Merchant Marine Act,

26 1936 (46 U.S.C. App. 1279a(a)) is amended by striking
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1 from ‘‘If the proceeds’’ through ‘‘require: Provided, That

2 in the event’’ and inserting ‘‘If the proceeds of an obliga3 tion guaranteed under this title are to be used to finance

4 the construction, reconstruction, or reconditioning of a

5 vessel or vessels which will serve as security for the guar6 antee of the Secretary, the Secretary is authorized to ac7 cept and hold, in escrow under an escrow agreement with

8 the obligor, proceeds of that obligation (together with such

9 interest as may be earned thereon and, if required by the

10 Secretary, an amount equal to 6 month’s interest on the

11 obligation). The Secretary may not release funds from the

12 escrow until the Secretary first determines that the obligor

13 has paid its portion of the actual cost of constructing, re14 constructing, or reconditioning the vessel or vessels and,

15 second, determines that the funds to be released are need16 ed to pay, or make reimbursements in connection with

17 payments previously made to the shipyard or other con18 tractors for work performed, or to pay for other approved

19 costs, with respect to the vessel or vessels. If’’.

20 (b) Title XI of the Merchant Marine Act, 1936, (46

21 U.S.C. App. 1271 et seq.) is amended by inserting after

22 section 1108 the following:

23 ‘‘SEC. 1109. RESERVE FUNDS AND COLLATERAL ACCOUNTS.

24 ‘‘(a) CREATION OF FUNDS AND ACCOUNTS.—There

25 is hereby established in the Treasury a deposit fund into
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1 which the Secretary is authorized to deposit cash belong2 ing to an obligor so long as the Secretary has a security

3 interest in such cash. The account shall be governed by

4 the terms of an agreement, as described hereunder, to be

5 entered into by the Secretary and an obligor.

6 ‘‘(b) TERMS OF AGREEMENT.—The Secretary and an

7 obligor shall enter into a reserve fund or other collateral

8 account agreement to govern the making of deposits and

9 withdrawals and the retention, use, and reinvestment of

10 the cash deposited under subsection (a). The agreement

11 shall contain such terms and conditions as are further re12 quired hereunder and as are considered by the Secretary

13 to be necessary to protect fully the interests of the United

14 States.

15 ‘‘(c) INVESTMENT.—The Secretary is authorized to

16 invest and reinvest any part of the cash of a reserve fund

17 or collateral account in obligations of the United States

18 with such maturities that these funds and accounts will

19 be available as required for purposes of the agreement.

20 Cash balances of the deposit fund in excess of current re21 quirements shall be maintained in a form of uninvested

22 funds and the Secretary of the Treasury shall pay interest

23 on these funds.

24 ‘‘(d) INCOME.—The cash deposited in a reserve fund

25 or collateral account may not be withdrawn without the
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1 consent of the Secretary. The Secretary may retain and

2 offset any or all of the cash on deposit in a reserve fund

3 or collateral account, and any income realized thereon, as

4 part of the Secretary’s recovery against an obligor that

5 has defaulted on an obligation. In the absence of a default

6 on an obligation, the Secretary may pay any income real7 ized on a reserve fund or collateral account in accordance

8 with the terms of the agreement.’’.

9 SECTION 4. AMENDMENTS TO TITLE IX OF THE MERCHANT

10 MARINE ACT, 1936.

11 (a) Title IX of the Merchant Marine Act, 1936, (46

12 U.S.C. App. 1241 et seq.) is amended by inserting after

13 section 902 the following:

14 ‘‘SEC. 903. DOCUMENTATION OF CERTAIN DRY CARGO VES15 SELS.

16 ‘‘(a) IN GENERAL.—The restrictions of section

17 901(b)(1) of this Act concerning the building, rebuilding,

18 or documentation of a vessel in a foreign country shall

19 not apply to dry bulk vessels and breakbulk vessels over

20 5,000 deadweight tons constructed, reconstructed, or ac21 quired in a foreign shipyard within 1 year after the date

22 of enactment of the Maritime Administration Authoriza23 tion Act for Fiscal Years 2000 and 2001 and before the

24 date of enactment of the OECD Shipbuilding Trade
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1 Agreement Act, and transferred to U.S.-flag registry

2 under section 12105 of title 46, United States Code, if—

3 ‘‘(1) the vessels have non-emergency shipyard

4 repairs, and other shipyard work necessary to con5 form the vessel to U.S.-flag standards, performed in

6 a shipyard of the United States;

7 ‘‘(2) the vessels comply with the standards set

8 forth in section 1137 of the Coast Guard Authoriza9 tion Act of 1996 (46 U.S.C. App. 1187 note); and

10 ‘‘(3) the vessels have not be granted approval

11 under section 9(e) of the Shipping Act, 1916 (as

12 amended by section 1136(b) of the Coast Guard Au13 thorization Act of 1996).

14 ‘‘(b) APPLICATION OF SECTION 607.—Section 607 of

15 this Act does not apply to vessels the construction, recon16 struction, modification, or acquisition of which is described

17 in subsection (a).’’.

18 (b) Section 901b(c)(2) of the Merchant Marine Act,

19 1936, (46 U.S.C. App. 1241f(c)(2)) is amended by strik20 ing ‘‘1986.’’ and inserting ‘‘1986, the 18-month period

21 commencing April 1, 1999, and the 12-month period be22 ginning on the first day of October in the year 2000 and

23 each year thereafter.’’.
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1 SECTION 5. EXTENSION OF WAR RISK INSURANCE AUTHOR2 ITY.

3 Section 1214 of the Merchant Marine Act, 1936, (46

4 App. U.S.C. 1294) is amended by striking ‘‘June 30,

5 2000.’’ and inserting ‘‘June 30, 2005’’.

6 SECTION 6. TRANSPORTATION REPORT ON MARITIME AC7 TIVITIES.

8 Section 208 of the Merchant Marine Act, 1936, (46

9 U.S.C. App. 1118) is amended by striking ‘‘1 each’’ and

10 inserting ‘‘1st of each odd-numbered’’.

11 SECTION 7. OWNERSHIP OF THE JEREMIAH O’BRIEN.

12 Section 3302(l)(1)(C) of title 46, United States Code,

13 is amended by striking ‘‘United States Maritime Adminis14 tration.’’ and inserting ‘‘National Liberty Ship Memorial,

15 Inc.’’.

16 SECTION 1. SHORT TITLE.

17 This Act may be cited as the ‘‘Maritime Administra18 tion Authorization Act for Fiscal Year 2000’’.

19 SEC. 2. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL

20 YEARS 2000.

21 There are authorized to be appropriated to the Sec22 retary of Transportation for the Maritime Administration

23 as follows:

24 (1) For expenses necessary for operations and

25 training activities, not to exceed $79,764,000 for the

26 fiscal year ending September 30, 2000.
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1 (2) For the costs, as defined in section 502 of the

2 Federal Credit Reform Act of 1990, of guaranteed

3 loans authorized by title XI of the Merchant Marine

4 Act, 1936 (46 U.S.C. App. 1271 et seq.), $6,000,000,

5 to be available until expended. In addition, for ad6 ministrative expenses related to loan guarantee com7 mitments under title XI of the Merchant Marine Act,

8 1936 (46 U.S.C. App. 1271 et seq.), $3,893,000.

9 SEC. 3. AMENDMENTS TO TITLE XI OF THE MERCHANT MA10 RINE ACT, 1936.

11 (a) AUTHORITY TO HOLD OBLIGATION PROCEEDS IN

12 ESCROW.—Section 1108(a) of the Merchant Marine Act,

13 1936 (46 U.S.C. App. 1279a(a)) is amended by striking so

14 much as precedes ‘‘guarantee of an obligation’’ and insert15 ing the following:

16 ‘‘(a) AUTHORITY TO HOLD OBLIGATION PROCEEDS IN

17 ESCROW.—(1) If the proceeds of an obligation guaranteed

18 under this title are to be used to finance the construction,

19 reconstruction, or reconditioning of a vessel that will serve

20 as security for the guarantee, the Secretary may accept and

21 hold, in escrow under an escrow agreement with the

22 obligor—

23 ‘‘(A) the proceeds of that obligation, including

24 such interest as may be earned thereon; and
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1 ‘‘(B) if required by the Secretary, an amount

2 equal to 6 month’s interest on the obligation.

3 ‘‘(2) The Secretary may release funds held in escrow

4 under paragraph (1) only if the Secretary determines that

5 the funds released are needed—

6 ‘‘(A) to pay, or make reimbursements in connec7 tion with payments previously made for work per8 formed in that construction, reconstruction, or recon9 ditioning; or

10 ‘‘(B) to pay for other costs approved by the Sec11 retary, with respect to the vessel or vessels.

12 ‘‘(3) If the security for the’’.

13 (b) AUTHORITY TO HOLD OBLIGOR’S CASH AS COL14 LATERAL.—Title XI of the Merchant Marine Act, 1936 is

15 amended by inserting after section 1108 the following:

16 ‘‘SEC. 1109. DEPOSIT FUND.

17 ‘‘(a) ESTABLISHMENT OF DEPOSIT FUND.—There is

18 established in the Treasury a deposit fund for purposes of

19 this section. The Secretary may, in accordance with an

20 agreement under subsection (b), deposit into and hold in

21 the deposit fund cash belonging to an obligor to serve as

22 collateral for a guarantee under this title made with respect

23 to the obligor.

24 ‘‘(b) AGREEMENT.—
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1 ‘‘(1) IN GENERAL.—The Secretary and an obli2 gor shall enter into a reserve fund or other collateral

3 account agreement to govern the deposit, withdrawal,

4 retention, use, and reinvestment of cash of the obligor

5 held in the deposit fund established by subsection (a).

6 ‘‘(2) TERMS.—The agreement shall contain such

7 terms and conditions as are required under this sec8 tion and such additional terms as are considered by

9 the Secretary to be necessary to protect fully the inter10 ests of the United States.

11 ‘‘(3) SECURITY INTEREST OF UNITED STATES.—

12 The agreement shall include terms that grant to the

13 United States a security interest in all amounts de14 posited into the deposit fund.

15 ‘‘(c) INVESTMENT.—The Secretary may invest and re16 invest any part of the amounts in the deposit fund estab17 lished by subsection (a) in obligations of the United States

18 with such maturities as ensure that amounts in the deposit

19 fund will be available as required for purposes of agree20 ments under subsection (b). Cash balances of the deposit

21 fund in excess of current requirements shall be maintained

22 in a form of uninvested funds and the Secretary of the

23 Treasury shall pay interest on these funds.

24 ‘‘(d) WITHDRAWALS.—
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1 ‘‘(1) IN GENERAL.—The cash deposited into the

2 deposit fund established by subsection (a) may not be

3 withdrawn without the consent of the Secretary.

4 ‘‘(2) USE OF INCOME.—Subject to paragraph (3),

5 the Secretary may pay any income earned on cash of

6 an obligor deposited into the deposit fund in accord7 ance with the terms of the agreement with the obligor

8 under subsection (b).

9 ‘‘(3) RETENTION AGAINST DEFAULT.—The Sec10 retary may retain and offset any or all of the cash

11 of an obligor in the deposit fund, and any income re12 alized thereon, as part of the Secretary’s recovery

13 against the obligor in case of a default by the obligor

14 on an obligation.’’.

15 SEC. 4. AMENDMENTS TO TITLE IX OF THE MERCHANT MA16 RINE ACT, 1936.

17 (a) Title IX of the Merchant Marine Act, 1936 (46

18 U.S.C. App. 1241 et seq.), is amended by inserting after

19 section 902 the following:

20 ‘‘SEC. 903. DOCUMENTATION OF CERTAIN DRY CARGO VES21 SELS.

22 ‘‘(a) IN GENERAL.—The restrictions of section

23 901(b)(1) of this Act concerning the building, rebuilding,

24 or documentation of a vessel in a foreign country shall not

25 apply to dry bulk vessels and breakbulk vessels over 5,000
12

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1 deadweight tons constructed, reconstructed, or acquired in

2 a foreign shipyard within 1 year after the date of enactment

3 of the Maritime Administration Authorization Act for Fis4 cal Year 2000 and before the date on which the OECD Ship5 building Trade Agreement enters into force, and transferred

6 to U.S.-flag registry under section 12105 of title 46, United

7 States Code, if—

8 ‘‘(1) the vessels have non-emergency shipyard re9 pairs, and other shipyard work necessary to conform

10 the vessel to U.S.-flag standards, performed in a ship11 yard of the United States;

12 ‘‘(2) the vessels comply with the standards set

13 forth in section 1137 of the Coast Guard Authoriza14 tion Act of 1996 (46 U.S.C. App. 1187 note); and

15 ‘‘(3) the vessels have not be granted approval

16 under section 9(e) of the Shipping Act, 1916 (as

17 amended by section 1136(b) of the Coast Guard Au18 thorization Act of 1996).

19 ‘‘(b) APPLICATION OF SECTION 607.—Section 607 of

20 this Act does not apply to vessels the construction, recon21 struction, modification, or acquisition of which is described

22 in subsection (a).’’.

23 (b) Section 901b(c)(2) of the Merchant Marine Act,

24 1936 (46 U.S.C. App. 1241f(c)(2)), is amended by striking

25 ‘‘1986.’’ and inserting ‘‘1986, the 18-month period com-
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1 mencing April 1, 1999, and the 12-month period beginning

2 on the first day of October in the year 2000 and each year

3 thereafter.’’.

4 SEC. 5. EXTENSION OF WAR RISK INSURANCE AUTHORITY.

5 Section 1214 of the Merchant Marine Act, 1936 (46

6 U.S.C. App. 1294), is amended by striking ‘‘June 30,

7 2000.’’ and inserting ‘‘June 30, 2005’’.

8 SEC. 6. TRANSPORTATION REPORT ON MARITIME ACTIVI9 TIES.

10 Section 208 of the Merchant Marine Act, 1936 (46

11 U.S.C. App. 1118), is amended by striking ‘‘1 each’’ and

12 inserting ‘‘1st of each odd-numbered’’.

13 SEC. 7. OWNERSHIP OF THE JEREMIAH O’BRIEN.

14 Section 3302(l)(1)(C) of title 46, United States Code,

15 is amended by striking ‘‘United States Maritime Adminis16 tration.’’ and inserting ‘‘National Liberty Ship Memorial,

17 Inc.’’.

18 SEC. 8. MARITIME RESEARCH AND TECHNOLOGY DEVELOP19 MENT.

20 (a) IN GENERAL.—The Maritime Administration shall

21 conduct a study of maritime research and technology devel22 opment, and report its findings and conclusions, together

23 with any recommendations it finds appropriate, to the Con24 gress within 9 months after the date of enactment of this

25 Act.
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1 (b) REQUIRED AREAS OF STUDY.—The Administra2 tion shall include the following items in the report required

3 by subsection (a):

4 (1) The approximate dollar values appropriated

5 by the Congress for each of the 5 fiscal years ending

6 before the study is commenced for each of the fol7 lowing modes of transportation:

8 (A) Highway.

9 (B) Rail.

10 (C) Aviation.

11 (D) Public transit.

12 (E) Maritime.

13 (2) A description of how Federal funds appro14 priated for research in the different transportation

15 modes are utilized.

16 (3) A summary and description of current re17 search and technology development funds appro18 priated for each of those fiscal years for maritime re19 search initiatives, with separate categories for funds

20 provided to the Coast Guard for marine safety re21 search purposes.

22 (4) A description of cooperative mechanisms that

23 could be used to attract and leverage non-federal in24 vestments in United States maritime research and

25 technology development and application programs.
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1 (5) Proposals for research and technology devel2 opment funding to facilitate the evolution of Maritime

3 Transportation System.

4 (c) AUTHORIZATION OF APPROPRIATIONS.—There are

5 authorized to be appropriated $100,000 to carry out this

6 section.

Amend the title so as to read: ‘‘A bill to authorize

appropriations for fiscal year 2000 for certain maritime

programs of the Department of Transportation, and for

other purposes.’’.