H. R. 1442

One Hundred Nineth Congress

of the

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Tuesday, 

the third day of January, two thousand and six 

An Act 

To complete the codification of title 46, United States Code, ‘‘Shipping’’, as positive 

law.

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. TABLE OF CONTENTS. 

The table of contents for this Act is as follows:

Sec. 1. Table of contents. 

Sec. 2. Purpose; conformity with original intent. 

Sec. 3. Title analysis. 

Sec. 4. Subtitle I of title 46. 

Sec. 5. Subtitle II of title 46. 

Sec. 6. Subtitle III of title 46. 

Sec. 7. Subtitle IV of title 46. 

Sec. 8. Subtitle V of title 46. 

Sec. 9. Subtitle VI of title 46. 

Sec. 10. Subtitle VII of title 46. 

Sec. 11. Subtitle VIII of title 46. 

Sec. 12. Maritime Administration. 

Sec. 13. Amendments relating to Maritime Security Act of 2003. 

Sec. 14. Amendments to partially restated provisions. 

Sec. 15. Additional amendments to title 46. 

Sec. 16. Recreational boating safety technical amendments. 

Sec. 17. Conforming amendments to other laws. 

Sec. 18. Transitional and savings provisions. 

Sec. 19. Repeals.

SEC. 2. PURPOSE; CONFORMITY WITH ORIGINAL INTENT. 

(a) PURPOSE.—The purpose of this Act is to complete the codification of title 46, United States Code, ‘‘Shipping’’, as positive 

law, by reorganizing and restating the laws currently in the 

appendix to title 46. 

(b) CONFORMITY WITH ORIGINAL INTENT.—In the codification 

of laws by this Act, the intent is to conform to the understood 

policy, intent, and purpose of the Congress in the original enactments, with such amendments and corrections as will remove 

ambiguities, contradictions, and other imperfections, in accordance 

with section 205(c)(1) of House Resolution No. 988, 93d Congress, 

as enacted into law by Public Law 93–554 (2 U.S.C. 285b(1)). 

SEC. 3. TITLE ANALYSIS. 

The title analysis of title 46, United States Code, is amended 

to read as follows:

‘‘Subtitle Sec.

‘‘I. GENERAL .................................................................................................. 101

‘‘II. VESSELS AND SEAMEN ....................................................................... 2101

‘‘III. MARITIME LIABILITY ..........................................................................30101

‘‘IV. REGULATION OF OCEAN SHIPPING ...............................................40101

‘‘V. MERCHANT MARINE ............................................................................50101
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‘‘VI. CLEARANCE, TONNAGE TAXES, AND DUTIES ............................60101

‘‘VII. SECURITY AND DRUG ENFORCEMENT .........................................70101

‘‘VIII. MISCELLANEOUS ..................................................................................80101’’.

SEC. 4. SUBTITLE I OF TITLE 46. 

Title 46, United States Code, is amended by inserting after 

the title analysis the following:

‘‘Subtitle I—General

‘‘Chapter Sec. 

‘‘1. Definitions ................................................................................................. 101

‘‘3. Federal Maritime Commission ............................................................ 301

‘‘5. Other General Provisions ..................................................................... 501

‘‘CHAPTER 1—DEFINITIONS

‘‘Sec. 

‘‘101. Agency. 

‘‘102. Barge. 

‘‘103. Boundary Line. 

‘‘104. Citizen of the United States. 

‘‘105. Consular officer. 

‘‘106. Documented vessel. 

‘‘107. Exclusive economic zone. 

‘‘108. Fisheries. 

‘‘109. Foreign commerce or trade. 

‘‘110. Foreign vessel. 

‘‘111. Numbered vessel. 

‘‘112. State. 

‘‘113. Undocumented. 

‘‘114. United States. 

‘‘115. Vessel. 

‘‘116. Vessel of the United States.

‘‘§ 101. Agency 

‘‘In this title, the term ‘agency’ means a department, agency, 

or instrumentality of the United States Government. 

‘‘§ 102. Barge 

‘‘In this title, the term ‘barge’ means a non-self-propelled vessel. 

‘‘§ 103. Boundary Line 

‘‘In this title, the term ‘Boundary Line’ means a line established 

under section 2(b) of the Act of February 19, 1895 (33 U.S.C. 

151). 

‘‘§ 104. Citizen of the United States 

‘‘In this title, the term ‘citizen of the United States’, when 

used in reference to a natural person, means an individual who 

is a national of the United States as defined in section 101(a)(22) 

of the Immigration and Nationality Act (8 U.S.C. 1101(a)(22)). 

‘‘§ 105. Consular officer 

‘‘In this title, the term ‘consular officer’ means an officer or 

employee of the United States Government designated under regulations to issue visas. 

‘‘§ 106. Documented vessel 

‘‘In this title, the term ‘documented vessel’ means a vessel 

for which a certificate of documentation has been issued under 

chapter 121 of this title. 
H. R. 1442—3

‘‘§ 107. Exclusive economic zone 

‘‘In this title, the term ‘exclusive economic zone’ means the 

zone established by Presidential Proclamation 5030 of March 10, 

1983 (16 U.S.C. 1453 note). 

‘‘§ 108. Fisheries 

‘‘In this title, the term ‘fisheries’ includes processing, storing, 

transporting (except in foreign commerce), planting, cultivating, 

catching, taking, or harvesting fish, shellfish, marine animals, 

pearls, shells, or marine vegetation in the navigable waters of 

the United States or in the exclusive economic zone. 

‘‘§ 109. Foreign commerce or trade 

‘‘(a) IN GENERAL.—In this title, the terms ‘foreign commerce’ 

and ‘foreign trade’ mean commerce or trade between a place in 

the United States and a place in a foreign country. 

‘‘(b) CAPITAL CONSTRUCTION FUNDS AND CONSTRUCTION-DIFFERENTIAL SUBSIDIES.—In the context of capital construction funds 

under chapter 535 of this title, and in the context of constructiondifferential subsidies under title V of the Merchant Marine Act, 

1936, the terms ‘foreign commerce’ and ‘foreign trade’ also include, 

in the case of liquid and dry bulk cargo carrying services, trading 

between foreign ports in accordance with normal commercial bulk 

shipping practices in a manner that will permit bulk vessels of 

the United States to compete freely with foreign bulk vessels in 

their operation or competition for charters, subject to regulations 

prescribed by the Secretary of Transportation. 

‘‘§ 110. Foreign vessel 

‘‘In this title, the term ‘foreign vessel’ means a vessel of foreign 

registry or operated under the authority of a foreign country. 

‘‘§ 111. Numbered vessel 

‘‘In this title, the term ‘numbered vessel’ means a vessel for 

which a number has been issued under chapter 123 of this title. 

‘‘§ 112. State 

‘‘In this title, the term ‘State’ means a State of the United 

States, the District of Columbia, Guam, Puerto Rico, the Virgin 

Islands, American Samoa, the Northern Mariana Islands, and any 

other territory or possession of the United States. 

‘‘§ 113. Undocumented 

‘‘In this title, the term ‘undocumented’ means not having and 

not required to have a certificate of documentation issued under 

chapter 121 of this title. 

‘‘§ 114. United States 

‘‘In this title, the term ‘United States’, when used in a 

geographic sense, means the States of the United States, the District 

of Columbia, Guam, Puerto Rico, the Virgin Islands, American 

Samoa, the Northern Mariana Islands, and any other territory 

or possession of the United States. 

‘‘§ 115. Vessel 

‘‘In this title, the term ‘vessel’ has the meaning given that 

term in section 3 of title 1. 
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‘‘§ 116. Vessel of the United States 

‘‘In this title, the term ‘vessel of the United States’ means 

a vessel documented under chapter 121 of this title (or exempt 

from documentation under section 12102(c) of this title), numbered 

under chapter 123 of this title, or titled under the law of a State.

‘‘CHAPTER 3—FEDERAL MARITIME COMMISSION

‘‘Sec. 

‘‘301. General organization. 

‘‘302. Quorum. 

‘‘303. Record of meetings and votes. 

‘‘304. Delegation of authority. 

‘‘305. Regulations. 

‘‘306. Annual report. 

‘‘307. Expenditures.

‘‘§ 301. General organization 

‘‘(a) ORGANIZATION.—The Federal Maritime Commission is an 

independent establishment of the United States Government. 

‘‘(b) COMMISSIONERS.—

‘‘(1) COMPOSITION.—The Commission is composed of 5 

Commissioners, appointed by the President by and with the 

advice and consent of the Senate. Not more than 3 Commissioners may be appointed from the same political party. 

‘‘(2) TERMS.—The term of each Commissioner is 5 years, 

with each term beginning one year apart. An individual 

appointed to fill a vacancy is appointed only for the unexpired 

term of the individual being succeeded. A vacancy shall be 

filled in the same manner as the original appointment. When 

the term of a Commissioner ends, the Commissioner may continue to serve until a successor is appointed and qualified. 

‘‘(3) REMOVAL.—The President may remove a Commissioner 

for inefficiency, neglect of duty, or malfeasance in office. 

‘‘(c) CHAIRMAN.—

‘‘(1) DESIGNATION.—The President shall designate one of 

the Commissioners as Chairman. 

‘‘(2) GENERAL AUTHORITY.—The Chairman is the chief 

executive and administrative officer of the Commission. In carrying out the duties and powers of the Commission (other 

than under paragraph (3)), the Chairman is subject to the 

policies, regulatory decisions, findings, and determinations of 

the Commission. 

‘‘(3) PARTICULAR DUTIES.—

‘‘(A) IN GENERAL.—The Chairman shall—

‘‘(i) appoint and supervise officers and employees 

of the Commission; 

‘‘(ii) appoint the heads of major organizational 

units, but only after consultation with the other 

Commissioners; 

‘‘(iii) distribute the business of the Commission 

among personnel and organizational units; 

‘‘(iv) supervise the expenditure of money for 

administrative purposes; and 

‘‘(v) assign Commission personnel, including 

Commissioners, to perform duties and powers delegated by the Commission under section 304 of this 

title. 
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‘‘(B) NONAPPLICATION.—Subparagraph (A) (other than 

clause (v)) does not apply to personnel employed regularly 

and full-time in the offices of Commissioners other than 

the Chairman. 

‘‘(4) DELEGATION.—The Chairman may designate officers 

and employees under the Chairman’s jurisdiction to perform 

duties and powers of the Chairman, subject to the Chairman’s 

supervision and direction. 

‘‘(d) SEAL.—The Commission shall have a seal which shall 

be judicially recognized. 

‘‘§ 302. Quorum 

‘‘A vacancy or vacancies in the membership of the Federal 

Maritime Commission do not impair the power of the Commission 

to execute its functions. The affirmative vote of a majority of the 

Commissioners serving on the Commission is required to dispose 

of any matter before the Commission. 

‘‘§ 303. Record of meetings and votes 

‘‘The Federal Maritime Commission, through its secretary, shall 

keep a record of its meetings and the votes taken on any action, 

order, contract, or financial transaction of the Commission. 

‘‘§ 304. Delegation of authority 

‘‘(a) DELEGATION.—The Federal Maritime Commission, by published order or regulation, may delegate to a division of the Commission, an individual Commissioner, an employee board, or an officer 

or employee of the Commission, any of its duties or powers, 

including those relating to hearing, determining, ordering, certifying, reporting, or otherwise acting on any matter. This subsection 

does not affect section 556(b) of title 5. 

‘‘(b) REVIEW.—The Commission may review any action taken 

under a delegation of authority under subsection (a). The review 

may be taken on the Commission’s own initiative or on the petition 

of a party to or an intervenor in the action, within the time and 

in the manner prescribed by the Commission. The vote of a majority 

of the Commission, less one member, is sufficient to bring an 

action before the Commission for review. 

‘‘(c) DEEMED ACTION OF COMMISSION.—If the Commission 

declines review, or if review is not sought, within the time prescribed under subsection (b), the action taken under the delegation 

of authority is deemed to be the action of the Commission. 

‘‘§ 305. Regulations 

‘‘The Federal Maritime Commission may prescribe regulations 

to carry out its duties and powers. 

‘‘§ 306. Annual report 

‘‘(a) IN GENERAL.—Not later than April 1 of each year, the 

Federal Maritime Commission shall submit a report to Congress. 

The report shall include the results of its investigations, a summary 

of its transactions, the purposes for which all of its expenditures 

were made, and any recommendations for legislation. 

‘‘(b) REPORT ON FOREIGN LAWS AND PRACTICES.—The Commission shall include in its annual report to Congress—
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‘‘(1) a list of the 20 foreign countries that generated the 

largest volume of oceanborne liner cargo for the most recent 

calendar year in bilateral trade with the United States; 

‘‘(2) an analysis of conditions described in section 42302(a) 

of this title being investigated or found to exist in foreign 

countries; 

‘‘(3) any actions being taken by the Commission to offset 

those conditions; 

‘‘(4) any recommendations for additional legislation to offset 

those conditions; and 

‘‘(5) a list of petitions filed under section 42302(b) of this 

title that the Commission rejected and the reasons for each 

rejection. 

‘‘§ 307. Expenditures 

‘‘The Federal Maritime Commission may make such expenditures as are necessary in the performance of its functions from 

funds appropriated or otherwise made available to it, which appropriations are authorized.

‘‘CHAPTER 5—OTHER GENERAL PROVISIONS

‘‘Sec. 

‘‘501. Waiver of navigation and vessel-inspection laws. 

‘‘502. Cargo exempt from forfeiture. 

‘‘503. Notice of seizure. 

‘‘504. Remission of fees and penalties. 

‘‘505. Penalty for violating regulation or order.

‘‘§ 501. Waiver of navigation and vessel-inspection laws 

‘‘(a) ON REQUEST OF SECRETARY OF DEFENSE.—On request of 

the Secretary of Defense, the head of an agency responsible for 

the administration of the navigation or vessel-inspection laws shall 

waive compliance with those laws to the extent the Secretary considers necessary in the interest of national defense. 

‘‘(b) BY HEAD OF AGENCY.—When the head of an agency responsible for the administration of the navigation or vessel-inspection 

laws considers it necessary in the interest of national defense, 

the individual may waive compliance with those laws to the extent, 

in the manner, and on the terms the individual prescribes. 

‘‘(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. 

‘‘§ 502. Cargo exempt from forfeiture 

‘‘Cargo on a vessel is exempt from forfeiture under this title 

if—

‘‘(1) the cargo is owned in good faith by a person not 

the owner, master, or crewmember of the vessel; and 

‘‘(2) the customs duties on the cargo have been paid or 

secured for payment as provided by law. 

‘‘§ 503. Notice of seizure 

‘‘When a forfeiture of a vessel or cargo accrues, the official 

of the United States Government required to give notice of the 

seizure of the vessel or cargo shall include in the notice, if they 

are known to that official, the name and the place of residence 

of the owner or consignee at the time of the seizure. 
H. R. 1442—7

‘‘§ 504. Remission of fees and penalties 

‘‘Any part of a fee, tax, or penalty paid or a forfeiture incurred 

under a law or regulation relating to vessels or seamen may be 

remitted if—

‘‘(1) application for the remission is made within one year 

after the date of the payment or forfeiture; and 

‘‘(2) it is found that the fee, tax, penalty, or forfeiture 

was improperly or excessively imposed. 

‘‘§ 505. Penalty for violating regulation or order 

‘‘A person convicted of knowingly and willfully violating a regulation or order of the Federal Maritime Commission or the Secretary 

of Transportation under subtitle IV or V of this title, for which 

no penalty is expressly provided, shall be fined not more than 

$500. Each day of a continuing violation is a separate offense.’’.

SEC. 5. SUBTITLE II OF TITLE 46. 

Chapter 121 of title 46, United States Code, is amended to 

read as follows:

‘‘CHAPTER 121—DOCUMENTATION OF VESSELS

‘‘SUBCHAPTER I—GENERAL 

‘‘Sec. 

‘‘12101. Definitions. 

‘‘12102. Vessels requiring documentation. 

‘‘12103. General eligibility requirements. 

‘‘12104. Applications for documentation. 

‘‘12105. Issuance of documentation. 

‘‘12106. Surrender of title and number. 

‘‘12107. Wrecked vessels. 

‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL DOCUMENTATION 

‘‘12111. Registry endorsement. 

‘‘12112. Coastwise endorsement. 

‘‘12113. Fishery endorsement. 

‘‘12114. Recreational endorsement. 

‘‘12115. Temporary endorsement for vessels procured outside the United States. 

‘‘12116. Limited endorsements for Guam, American Samoa, and Northern Mariana 

Islands. 

‘‘12117. Oil spill response vessels. 

‘‘12118. Owners engaged primarily in manufacturing or mineral industry. 

‘‘12119. Owners engaged primarily in leasing or financing transactions. 

‘‘12120. Liquified gas tankers. 

‘‘12121. Small passenger vessels and uninspected passenger vessels. 

‘‘SUBCHAPTER III—MISCELLANEOUS 

‘‘12131. Command of documented vessels. 

‘‘12132. Loss of coastwise trade privileges. 

‘‘12133. Duty to carry certificate on vessel and allow examination. 

‘‘12134. Evidentiary uses of documentation. 

‘‘12135. Invalidation of certificates of documentation. 

‘‘12136. Surrender of certificates of documentation. 

‘‘12137. Recording of vessels built in the United States. 

‘‘12138. List of documented vessels. 

‘‘12139. Reports. 

‘‘SUBCHAPTER IV—PENALTIES 

‘‘12151. Penalties. 

‘‘12152. Denial or revocation of endorsement for non-payment of civil penalty.

‘‘SUBCHAPTER I—GENERAL 

‘‘§ 12101. Definitions 

‘‘(a) REBUILT IN THE UNITED STATES.—In this chapter, a vessel 

is deemed to have been rebuilt in the United States only if the 
H. R. 1442—8

entire rebuilding, including the construction of any major component 

of the hull or superstructure, was done in the United States. 

‘‘(b) RELATED TERMS IN OTHER LAWS.—When the following 

terms are used in a law, regulation, document, ruling, or other 

official act referring to the documentation of a vessel, the following 

definitions apply: 

‘‘(1) REGISTRY ENDORSEMENT.—The terms ‘certificate of registry’, ‘register’, and ‘registry’ mean a certificate of documentation with a registry endorsement issued under this chapter. 

‘‘(2) COASTWISE ENDORSEMENT.—The terms ‘license’, ‘enrollment and license’, ‘license for the coastwise (or coasting) trade’, 

and ‘enrollment and license for the coastwise (or coasting) trade’ 

mean a certificate of documentation with a coastwise endorsement issued under this chapter. 

‘‘(3) YACHT.—The term ‘yacht’ means a recreational vessel 

even if not documented. 

‘‘§ 12102. Vessels requiring documentation 

‘‘(a) IN GENERAL.—Except as otherwise provided, a vessel may 

engage in a trade only if the vessel has been issued a certificate 

of documentation with an endorsement for that trade under this 

chapter. 

‘‘(b) VESSELS LESS THAN 5 NET TONS.—A vessel of less than 

5 net tons may engage in a trade without being documented if 

the vessel otherwise satisfies the requirements to engage in the 

particular trade. 

‘‘(c) BARGES.—A barge qualified to engage in the coastwise 

trade may engage in the coastwise trade, without being documented, 

on rivers, harbors, lakes (except the Great Lakes), canals, and 

inland waters. 

‘‘§ 12103. General eligibility requirements 

‘‘(a) IN GENERAL.—Except as otherwise provided, a certificate 

of documentation for a vessel may be issued under this chapter 

only if the vessel is—

‘‘(1) wholly owned by one or more individuals or entities 

described in subsection (b); 

‘‘(2) at least 5 net tons as measured under part J of this 

subtitle; and 

‘‘(3) not documented under the laws of a foreign country. 

‘‘(b) ELIGIBLE OWNERS.—For purposes of subsection (a)(1), the 

following are eligible owners: 

‘‘(1) An individual who is a citizen of the United States. 

‘‘(2) An association, trust, joint venture, or other entity 

if—

‘‘(A) each of its members is a citizen of the United 

States; and 

‘‘(B) it is capable of holding title to a vessel under 

the laws of the United States or a State. 

‘‘(3) A partnership if—

‘‘(A) each general partner is a citizen of the United 

States; and 

‘‘(B) the controlling interest in the partnership is owned 

by citizens of the United States. 

‘‘(4) A corporation if—

‘‘(A) it is incorporated under the laws of the United 

States or a State; 
H. R. 1442—9

‘‘(B) its chief executive officer, by whatever title, and 

the chairman of its board of directors are citizens of the 

United States; and 

‘‘(C) no more of its directors are noncitizens than a 

minority of the number necessary to constitute a quorum. 

‘‘(5) The United States Government. 

‘‘(6) The government of a State. 

‘‘(c) TEMPORARY CERTIFICATES PRIOR TO MEASUREMENT.—Notwithstanding subsection (a)(2), the Secretary may issue a temporary 

certificate of documentation for a vessel before it is measured. 

‘‘§ 12104. Applications for documentation 

‘‘(a) IN GENERAL.—An application for a certificate of documentation or endorsement under this chapter must be filed by the owner 

of the vessel. The application must be filed in the manner, be 

in the form, and contain the information prescribed by the Secretary. 

‘‘(b) APPLICANT’S IDENTIFYING INFORMATION.—The Secretary 

shall require the applicant to provide—

‘‘(1) if the applicant is an individual, the individual’s social 

security number; or 

‘‘(2) if the applicant is an entity—

‘‘(A) the entity’s taxpayer identification number; or 

‘‘(B) if the entity does not have a taxpayer identification 

number, the social security number of an individual who 

is a corporate officer, general partner, or individual trustee 

of the entity and who signs the application. 

‘‘§ 12105. Issuance of documentation 

‘‘(a) IN GENERAL.—Except as provided in section 12152 of this 

title, the Secretary, on receipt of a proper application, shall issue 

a certificate of documentation or a temporary certificate of documentation for a vessel satisfying the requirements of section 12103 

of this title. The certificate shall contain each endorsement under 

subchapter II of this chapter for which the owner applies and 

the vessel is eligible. 

‘‘(b) TEMPORARY CERTIFICATES FOR RECREATIONAL VESSELS.—

The Secretary may delegate, subject to the supervision and control 

of the Secretary and under terms prescribed by regulation, to private entities determined and certified by the Secretary to be qualified, the authority to issue a temporary certificate of documentation 

for a recreational vessel eligible under section 12103 of this title. 

A temporary certificate issued under this subsection is valid for 

not more than 30 days. 

‘‘(c) INFORMATION TO BE INCLUDED IN CERTIFICATE.—A certificate of documentation shall—

‘‘(1) identify and describe the vessel; 

‘‘(2) identify the owner of the vessel; and 

‘‘(3) contain additional information prescribed by the Secretary. 

‘‘(d) PROCEDURES TO ENSURE INTEGRITY AND ACCURACY.—The 

Secretary shall prescribe procedures to ensure the integrity of, 

and the accuracy of information contained in, certificates of documentation. 
H. R. 1442—10

‘‘§ 12106. Surrender of title and number 

‘‘(a) IN GENERAL.—A documented vessel may not be titled by 

a State or required to display numbers under chapter 123 of this 

title, and any certificate of title issued by a State for a documented 

vessel shall be surrendered as provided by regulations prescribed 

by the Secretary. 

‘‘(b) VESSELS COVERED BY PREFERRED MORTGAGE.—The Secretary may approve the surrender under subsection (a) of a certificate of title for a vessel covered by a preferred mortgage under 

section 31322(d) of this title only if the mortgagee consents. 

‘‘§ 12107. Wrecked vessels 

‘‘(a) REQUIREMENTS.—A vessel is a wrecked vessel under this 

chapter if it—

‘‘(1) was wrecked on a coast of the United States or adjacent 

waters; and 

‘‘(2) has undergone repairs in a shipyard in the United 

States equal to at least 3 times the appraised salvage value 

of the vessel. 

‘‘(b) APPRAISALS.—The Secretary may appoint a board of three 

appraisers to determine whether a vessel satisfies subsection (a)(2). 

The costs of the appraisal shall be paid by the owner of the vessel. 

‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL 

DOCUMENTATION 

‘‘§ 12111. Registry endorsement 

‘‘(a) REQUIREMENTS.—A registry endorsement may be issued 

for a vessel that satisfies the requirements of section 12103 of 

this title. 

‘‘(b) AUTHORIZED ACTIVITY.—A vessel for which a registry 

endorsement is issued may engage in foreign trade or trade with 

Guam, American Samoa, Wake, Midway, or Kingman Reef. 

‘‘(c) CERTAIN VESSELS OWNED BY TRUSTS.—

‘‘(1) NONAPPLICATION OF BENEFICIARY CITIZENSHIP REQUIRE- MENT.—For the issuance of a certificate of documentation with 

only a registry endorsement, the beneficiaries of a trust are 

not required to be citizens of the United States if the trust 

qualifies under paragraph (2) and the vessel is subject to a 

charter to a citizen of the United States. 

‘‘(2) REQUIREMENTS FOR TRUST TO QUALIFY.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), a trust 

qualifies under this paragraph with respect to a vessel 

only if—

‘‘(i) each trustee is a citizen of the United States; 

and 

‘‘(ii) the application for documentation of the vessel 

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 
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the vessel that may adversely affect the interests of 

the United States. 

‘‘(B) AUTHORITY OF NON-CITIZENS.—If any person that 

is not a citizen of the United States has authority to 

direct or participate in directing a trustee for a trust in 

matters involving any ownership or operation of the vessel 

that may adversely affect the interests of the United States 

or in removing a trustee for a trust without cause, either 

directly or indirectly through the control of another person, 

the trust is not qualified under this paragraph unless the 

trust instrument provides that persons who are not citizens 

of the United States may not hold more than 25 percent 

of the aggregate authority to so direct or remove a trustee. 

‘‘(C) OWNERSHIP BY NON-CITIZENS.—Subparagraphs (A) 

and (B) do not prohibit a person that is not a citizen 

of the United States from holding more than 25 percent 

of the beneficial interest in a trust. 

‘‘(3) CITIZENSHIP OF PERSON CHARTERING VESSEL.—If a person chartering a vessel from a trust that qualifies under paragraph (2) is a citizen of the United States under section 50501 

of this title, the vessel is deemed to be owned by a citizen 

of the United States for purposes of that section and related 

laws, except chapter 531 of this title. 

‘‘§ 12112. Coastwise endorsement 

‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued 

for a vessel that—

‘‘(1) satisfies the requirements of section 12103 of this 

title; 

‘‘(2)(A) was built in the United States; or 

‘‘(B) if not built in the United States—

‘‘(i) was captured in war by citizens of the United 

States and lawfully condemned as prize; 

‘‘(ii) was adjudged to be forfeited for a breach of the 

laws of the United States; or 

‘‘(iii) qualifies as a wrecked vessel under section 12107 

of this title; and 

‘‘(3) otherwise qualifies under the laws of the United States 

to engage in the coastwise trade. 

‘‘(b) AUTHORIZED ACTIVITY.—Subject to the laws of the United 

States regulating the coastwise trade, a vessel for which a coastwise 

endorsement is issued may engage in the coastwise trade. 

‘‘§ 12113. Fishery endorsement 

‘‘(a) REQUIREMENTS.—A fishery endorsement may be issued 

for a vessel that—

‘‘(1) satisfies the requirements of section 12103 of this 

title and, if owned by an entity, the entity satisfies the ownership requirements in subsection (c); 

‘‘(2) was built in the United States; 

‘‘(3) if rebuilt, was rebuilt in the United States; 

‘‘(4) was not forfeited to the United States Government 

after July 1, 2001, for a breach of the laws of the United 

States; and 

‘‘(5) otherwise qualifies under the laws of the United States 

to engage in the fisheries. 

‘‘(b) AUTHORIZED ACTIVITY.—
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‘‘(1) IN GENERAL.—Subject to the laws of the United States 

regulating the fisheries, a vessel for which a fishery endorsement is issued may engage in the fisheries. 

‘‘(2) USE BY PROHIBITED PERSONS.—A fishery endorsement 

is invalid immediately if the vessel for which it is issued is 

used as a fishing vessel while it is chartered or leased to 

an individual who is not a citizen of the United States or 

to an entity that is not eligible to own a vessel with a fishery 

endorsement. 

‘‘(c) OWNERSHIP REQUIREMENTS FOR ENTITIES.— ‘‘(1) IN GENERAL.—A vessel owned by an entity is eligible 

for a fishery endorsement only if at least 75 percent of the 

interest in the entity, at each tier of ownership and in the 

aggregate, is owned and controlled by citizens of the United 

States. 

‘‘(2) DETERMINING 75 PERCENT INTEREST.—In determining 

whether at least 75 percent of the interest in the entity is 

owned and controlled by citizens of the United States under 

paragraph (1), the Secretary shall apply section 50501(d) of 

this title, except that for this purpose the terms ‘control’ or 

‘controlled’—

‘‘(A) include the right to—

‘‘(i) direct the business of the entity; 

‘‘(ii) limit the actions of or replace the chief executive officer, a majority of the board of directors, any 

general partner, or any person serving in a management capacity of the entity; or 

‘‘(iii) direct the transfer, operation, or manning 

of a vessel with a fishery endorsement; but 

‘‘(B) do not include the right to simply participate 

in the activities under subparagraph (A), or the exercise 

of rights under loan or mortgage covenants by a mortgagee 

eligible to be a preferred mortgagee under section 31322(a) 

of this title, except that a mortgagee not eligible to own 

a vessel with a fishery endorsement may only operate 

such a vessel to the extent necessary for the immediate 

safety of the vessel or for repairs, drydocking, or berthing 

changes. 

‘‘(3) EXCEPTIONS.—This subsection does not apply to a 

vessel when it is engaged in the fisheries in the exclusive 

economic zone under the authority of the Western Pacific 

Fishery Management Council established under section 

302(a)(1)(H) of the Magnuson-Stevens Fishery Conservation 

and Management Act (16 U.S.C. 1852(a)(1)(H)) or to a purse 

seine vessel when it is engaged in tuna fishing in the Pacific 

Ocean outside the exclusive economic zone or pursuant to the 

South Pacific Regional Fisheries Treaty, provided that the 

owner of the vessel continues to comply with the eligibility 

requirements for a fishery endorsement under the Federal law 

that was in effect on October 1, 1998. A fishery endorsement 

issued pursuant to this paragraph is valid for engaging only 

in the activities described in this paragraph. 

‘‘(d) REQUIREMENTS BASED ON LENGTH, TONNAGE, OR HORSEPOWER.—

‘‘(1) APPLICATION.—This subsection applies to a vessel 

that—

‘‘(A) is greater than 165 feet in registered length; 
H. R. 1442—13

‘‘(B) is more than 750 gross registered tons as measured 

under chapter 145 of this title or 1,900 gross registered 

tons as measured under chapter 143 of this title; or 

‘‘(C) has an engine or engines capable of producing 

a total of more than 3,000 shaft horsepower. 

‘‘(2) REQUIREMENTS.—A vessel subject to this subsection 

is not eligible for a fishery endorsement unless—

‘‘(A)(i) a certificate of documentation was issued for 

the vessel and endorsed with a fishery endorsement that 

was effective on September 25, 1997; 

‘‘(ii) the vessel is not placed under foreign registry 

after October 21, 1998; and 

‘‘(iii) if the fishery endorsement is invalidated after 

October 21, 1998, application is made for a new fishery 

endorsement within 15 business days of the invalidation; 

or 

‘‘(B) the owner of the vessel demonstrates to the Secretary that the regional fishery management council of 

jurisdiction established under section 302(a)(1) of the 

Magnuson-Stevens Fishery Conservation and Management 

Act (16 U.S.C. 1852(a)(1)) has recommended after October 

21, 1998, and the Secretary of Commerce has approved, 

conservation and management measures in accordance 

with the American Fisheries Act (Public Law 105–277, 

div. C, title II) (16 U.S.C. 1851 note) to allow the vessel 

to be used in fisheries under the council’s authority. 

‘‘(e) VESSELS MEASURING 100 FEET OR GREATER.—

‘‘(1) IN GENERAL.—The Administrator of the Maritime 

Administration shall administer subsections (c) and (d) with 

respect to vessels 100 feet or greater in registered length. 

The owner of each such vessel shall file a statement of citizenship setting forth all relevant facts regarding vessel ownership 

and control with the Administrator on an annual basis to 

demonstrate compliance with those provisions. 

‘‘(2) REGULATIONS.—Regulations to implement this subsection shall conform to the extent practicable with the regulations establishing the form of citizenship affidavit set forth 

in part 355 of title 46, Code of Federal Regulations, as in 

effect on September 25, 1997, except that the form of the 

statement shall be written in a manner to allow the owner 

of the vessel to satisfy any annual renewal requirements for 

a certificate of documentation for the vessel and to comply 

with this subsection and subsections (c) and (d), and shall 

not be required to be notarized. 

‘‘(3) TRANSFER OF OWNERSHIP.—Transfers of ownership and 

control of vessels subject to subsection (c) or (d), which are 

100 feet or greater in registered length, shall be rigorously 

scrutinized for violations of those provisions, with particular 

attention given to—

‘‘(A) leases, charters, mortgages, financing, and similar 

arrangements; 

‘‘(B) the control of persons not eligible to own a vessel 

with a fishery endorsement under subsection (c) or (d), 

over the management, sales, financing, or other operations 

of an entity; and 
H. R. 1442—14

‘‘(C) contracts involving the purchase over extended 

periods of time of all, or substantially all, of the living 

marine resources harvested by a fishing vessel. 

‘‘(f) VESSELS MEASURING LESS THAN 100 FEET.—The Secretary 

shall establish reasonable and necessary requirements to demonstrate compliance with subsections (c) and (d), with respect to 

vessels measuring less than 100 feet in registered length, and 

shall seek to minimize the administrative burden on individuals 

who own and operate those vessels. 

‘‘(g) VESSELS PURCHASED THROUGH FISHING CAPACITY REDUC- TION PROGRAM.—A vessel purchased by the Secretary of Commerce 

through a fishing capacity reduction program under the MagnusonStevens Fishery Conservation Management Act (16 U.S.C. 1801 

et seq.) or section 308 of the Interjurisdictional Fisheries Act of 

1986 (16 U.S.C. 4107) is not eligible for a fishery endorsement, 

and any fishery endorsement issued for that vessel is invalid. 

‘‘(h) REVOCATION OF ENDORSEMENTS.—The Secretary shall 

revoke the fishery endorsement of any vessel subject to subsection 

(c) or (d) whose owner does not comply with those provisions. 

‘‘(i) REGULATIONS.—Regulations to implement subsections (c) 

and (d) and sections 12151(c) and 31322(b) of this title shall prohibit 

impermissible transfers of ownership or control, specify any transactions that require prior approval of an implementing agency, 

identify transactions that do not require prior agency approval, 

and to the extent practicable, minimize disruptions to the commercial fishing industry, to the traditional financing arrangements 

of that industry, and to the opportunity to form fishery cooperatives. 

‘‘§ 12114. Recreational endorsement 

‘‘(a) REQUIREMENTS.—A recreational endorsement may be 

issued for a vessel that satisfies the requirements of section 12103 

of this title. 

‘‘(b) AUTHORIZED ACTIVITY.—A vessel operating under a recreational endorsement may be operated only for pleasure. 

‘‘(c) APPLICATION OF CUSTOMS LAWS.—A vessel for which a 

recreational endorsement is issued may proceed between a port 

of the United States and a port of a foreign country without entering 

or clearing with the Secretary of Homeland Security. However, 

a recreational vessel is subject to the requirements for reporting 

arrivals under section 433 of the Tariff Act of 1930 (19 U.S.C. 

1433), and individuals on the vessel are subject to applicable customs regulations. 

‘‘§ 12115. Temporary endorsement for vessels procured outside the United States 

‘‘(a) GENERAL AUTHORITY.—The Secretary and the Secretary 

of State, acting jointly, may provide for the issuance of a certificate 

of documentation with an appropriate endorsement for a vessel 

procured outside the United States and meeting the ownership 

requirements of section 12103 of this title. 

‘‘(b) AUTHORIZED ACTIVITY.—Subject to limitations the Secretary may prescribe, a vessel documented under this section may 

proceed to the United States and engage en route in foreign trade 

or trade with Guam, American Samoa, Wake, Midway, or Kingman 

Reef. 

‘‘(c) APPLICATION OF UNITED STATES JURISDICTION AND LAWS.— A vessel documented under this section is subject to the jurisdiction 
H. R. 1442—15

and laws of the United States. However, if the Secretary considers 

it to be in the public interest, the Secretary may suspend for 

a period of not more than 6 months the application of a vessel 

inspection law carried out by the Secretary or regulations prescribed 

under that law. 

‘‘(d) SURRENDER OF CERTIFICATE.—On the vessel’s arrival in 

the United States, the certificate of documentation shall be surrendered as provided by regulations prescribed by the Secretary. 

‘‘§ 12116. Limited endorsements for Guam, American Samoa, 

and Northern Mariana Islands 

‘‘(a) ENDORSEMENTS.—A vessel satisfying the requirements of 

subsection (b) may be issued—

‘‘(1) a coastwise endorsement to engage in the coastwise 

trade of fisheries products between places in Guam, American 

Samoa, and the Northern Mariana Islands; or 

‘‘(2) a fishery endorsement to engage in fishing in the 

territorial sea and fishery conservation zone adjacent to Guam, 

American Samoa, and the Northern Mariana Islands. 

‘‘(b) REQUIREMENTS.—An endorsement may be issued under 

subsection (a) for a vessel that—

‘‘(1) satisfies the requirements of section 12103 of this 

title; 

‘‘(2) was not built in the United States, except that for 

an endorsement under subsection (a)(2), the vessel must not 

have been built or rebuilt in the United States; 

‘‘(3) is less than 200 gross tons as measured under section 

14502 of this title, or an alternate tonnage as measured under 

section 14302 of this title as prescribed by the Secretary under 

section 14104 of this title; and 

‘‘(4) otherwise qualifies under the laws of the United States 

to engage in the coastwise trade or the fisheries, as the case 

may be. 

‘‘§ 12117. Oil spill response vessels 

‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued 

for a vessel that—

‘‘(1) satisfies the requirements for a coastwise endorsement, 

except for the ownership requirement otherwise applicable 

without regard to this section; 

‘‘(2) is owned by a not-for-profit oil spill response cooperative or by members of such a cooperative that dedicate the 

vessel to use by the cooperative; 

‘‘(3) is at least 50 percent owned by individuals or entities 

described in section 12103(b) of this title; and 

‘‘(4) is to be used only for—

‘‘(i) deploying equipment, supplies, and personnel to 

recover, contain, or transport oil discharged into the navigable waters of the United States or the exclusive economic 

zone; or 

‘‘(ii) training exercises to prepare to respond to such 

a discharge. 

‘‘(b) DEEMED OWNED BY CITIZENS.—A vessel satisfying subsection (a) is deemed to be owned only by citizens of the United 

States under sections 12103, 12132, and 50501 of this title. 
H. R. 1442—16

‘‘§ 12118. Owners engaged primarily in manufacturing or 

mineral industry 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) BOWATERS CORPORATION.—The term ‘Bowaters corporation’ means a corporation that has filed a certificate under 

oath with the Secretary, in the form and at the times prescribed 

by the Secretary, establishing that—

‘‘(A) the corporation is incorporated under the laws 

of the United States or a State; 

‘‘(B) a majority of the officers and directors of the 

corporation are individuals who are citizens of the United 

States; 

‘‘(C) at least 90 percent of the employees of the corporation are residents of the United States; 

‘‘(D) the corporation is engaged primarily in a manufacturing or mineral industry in the United States; 

‘‘(E) the total book value of the vessels owned by the 

corporation is not more than 10 percent of the total book 

value of the assets of the corporation; and 

‘‘(F) the corporation buys or produces in the United 

States at least 75 percent of the raw materials used or 

sold in its operations. 

‘‘(2) PARENT.—The term ‘parent’ means a corporation that 

has filed a certificate under oath with the Secretary, in the 

form and at the times prescribed by the Secretary, establishing 

that the corporation—

‘‘(A) is incorporated under the laws of the United States 

or a State; and 

‘‘(B) controls, directly or indirectly, at least 50 percent 

of the voting stock of a Bowaters corporation. 

‘‘(3) SUBSIDIARY.—The term ‘subsidiary’ means a corporation that has filed a certificate under oath with the Secretary, 

in the form and at the times prescribed by the Secretary, 

establishing that the corporation—

‘‘(A) is incorporated under the laws of the United States 

or a State; and 

‘‘(B) has at least 50 percent of its voting stock controlled, directly or indirectly, by a Bowaters corporation 

or its parent. 

‘‘(b) DEEMED CITIZEN.—A Bowaters corporation is deemed to 

be a citizen of the United States for purposes of chapters 121, 

551, and 561 and section 80104 of this title. 

‘‘(c) ISSUANCE OF DOCUMENTATION.—A certificate of documentation and appropriate endorsement may be issued for a vessel that—

‘‘(1) is owned by a Bowaters corporation; 

‘‘(2) was built in the United States; and 

‘‘(3)(A) is self-propelled and less than 500 gross tons as 

measured under section 14502 of this title, or an alternate 

tonnage as measured under section 14302 of this title as prescribed by the Secretary under section 14104 of this title; 

or 

‘‘(B) is not self-propelled. 

‘‘(d) EFFECTS OF DOCUMENTATION.—

‘‘(1) IN GENERAL.—Subject to paragraph (2)—

‘‘(A) a vessel documented under this section may 

engage in the coastwise trade; and 
H. R. 1442—17

‘‘(B) the vessel and its owner and master are entitled 

to the same benefits and are subject to the same requirements and penalties as if the vessel were otherwise documented or exempt from documentation under this chapter. 

‘‘(2) TRANSPORTATION OF PASSENGERS OR MERCHANDISE.—

A vessel documented under this section may transport passengers or merchandise for hire in the coastwise trade only—

‘‘(A) as a service for a parent or subsidiary of the 

corporation owning the vessel; or 

‘‘(B) when under a demise or bareboat charter, at prevailing rates for use not in the domestic noncontiguous 

trades, from the corporation owning the vessel to a carrier 

that—

‘‘(i) is subject to jurisdiction under subchapter II 

of chapter 135 of title 49; 

‘‘(ii) otherwise qualifies as a citizen of the United 

States under section 50501 of this title; and 

‘‘(iii) is not owned or controlled, directly or 

indirectly, by the corporation owning the vessel. 

‘‘(e) VALIDITY OF CORPORATE CERTIFICATE.—A certificate filed 

by a corporation under this section remains valid only as long 

as the corporation continues to satisfy the conditions required of 

the corporation by this section. When a corporation no longer satisfies those conditions, the corporation loses its status under this 

section and immediately shall surrender to the Secretary any documents issued to it based on that status. 

‘‘(f) PENALTIES.— ‘‘(1) FALSIFYING MATERIAL FACT.—If a corporation knowingly falsifies a material fact in a certificate filed under subsection (a), the vessel (or its value) documented or operated 

under this section shall be forfeited. 

‘‘(2) TRANSPORTING MERCHANDISE.—If a vessel transports 

merchandise for hire in violation of this section, the merchandise shall be forfeited to the United States Government. 

‘‘(3) TRANSPORTING PASSENGERS.—If a vessel transports 

passengers for hire in violation of this section, the vessel is 

liable for a penalty of $200 for each passenger so transported. 

‘‘(4) REMISSION OR MITIGATION.—A penalty or forfeiture 

incurred under this subsection may be remitted or mitigated 

under section 2107(b) of this title. 

‘‘§ 12119. Owners engaged primarily in leasing or financing 

transactions 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) AFFILIATE.—The term ‘affiliate’ means, with respect 

to any person, any other person that is—

‘‘(i) directly or indirectly controlled by, under common 

control with, or controlling that person; or 

‘‘(ii) named as being part of the same consolidated 

group in any report or other document submitted to the 

United States Securities and Exchange Commission or the 

Internal Revenue Service. 

‘‘(2) CARGO.—The term ‘cargo’ does not include cargo to 

which title is held for non-commercial reasons and primarily 

for the purpose of evading the requirements of subsection (c)(3). 

‘‘(3) OIL.—The term ‘oil’ has the meaning given that term 

in section 2101(20) of this title. 
H. R. 1442—18

‘‘(4) PASSIVE INVESTMENT.—The term ‘passive investment’ 

means an investment in which neither the investor nor any 

affiliate of the investor is involved in, or has the power to 

be involved in, the formulation, determination, or direction 

of any activity or function concerning the management, use, 

or operation of the asset that is the subject of the investment. 

‘‘(5) QUALIFIED PROPRIETARY CARGO.—The term ‘qualified 

proprietary cargo’ means—

‘‘(A) oil, petroleum products, petrochemicals, or liquefied natural gas cargo that is beneficially owned by the 

person that submits to the Secretary an application or 

annual certification under subsection (c)(3), or by an affiliate of that person, immediately before, during, or immediately after the cargo is carried in coastwise trade on 

a vessel owned by that person; 

‘‘(B) oil, petroleum products, petrochemicals, or liquefied natural gas cargo not beneficially owned by the person 

that submits to the Secretary an application or an annual 

certification under subsection (c)(3), or by an affiliate of 

that person, but which is carried in coastwise trade by 

a vessel owned by that person and which is part of an 

arrangement in which vessels owned by that person and 

at least one other person are operated collectively as one 

fleet, to the extent that an equal amount of oil, petroleum 

products, petrochemicals, or liquefied natural gas cargo 

beneficially owned by that person, or by an affiliate of 

that person, is carried in coastwise trade on one or more 

other vessels, not owned by that person, or by an affiliate 

of that person, if the other vessel or vessels are also part 

of the same arrangement; 

‘‘(C) in the case of a towing vessel associated with 

a non-self-propelled tank vessel where both vessels function 

as a single self-propelled vessel, oil, petroleum products, 

petrochemicals, or liquefied natural gas cargo that is beneficially owned by the person that owns both the towing 

vessel and the non-self-propelled tank vessel, or any United 

States affiliate of that person, immediately before, during, 

or immediately after the cargo is carried in coastwise trade 

on either of those vessels; or 

‘‘(D) any oil, petroleum products, petrochemicals, or 

liquefied natural gas cargo carried on any vessel that is 

either a self-propelled tank vessel having a length of at 

least 210 meters or a tank vessel that is a liquefied natural 

gas carrier that—

‘‘(i) was delivered by the builder of the vessel to 

the owner of the vessel after December 31, 1999; and 

‘‘(ii) was purchased by a person for the purpose, 

and with the reasonable expectation, of transporting 

on the vessel liquefied natural gas or unrefined petroleum beneficially owned by the owner of the vessel, 

or an affiliate of the owner, from Alaska to the continental United States. 

‘‘(6) UNITED STATES AFFILIATE.—The term ‘United States 

affiliate’ means, with respect to any person, an affiliate the 

principal place of business of which is located in the United 

States. 
H. R. 1442—19

‘‘(b) REQUIREMENTS.—A coastwise endorsement may be issued 

for a vessel if—

‘‘(1) the vessel satisfies the requirements for a coastwise 

endorsement, except for the ownership requirement otherwise 

applicable without regard to this section; 

‘‘(2) the person that owns the vessel (or, if the vessel 

is owned by a trust or similar arrangement, the beneficiary 

of the trust or similar arrangement) meets the requirements 

of subsection (c); 

‘‘(3) the vessel is under a demise charter to a person that 

certifies to the Secretary that the person is a citizen of the 

United States under section 50501 of this title for engaging 

in the coastwise trade; and 

‘‘(4) the demise charter is for a period of at least 3 years 

or a shorter period as may be prescribed by the Secretary. 

‘‘(c) OWNERSHIP CERTIFICATION.—

‘‘(1) IN GENERAL.—A person meets the requirements of 

this subsection if the person transmits to the Secretary each 

year the certification required by paragraph (2) or (3) with 

respect to a vessel. 

‘‘(2) INVESTMENT CERTIFICATION.—To meet the certification 

requirement of this paragraph, a person shall certify that it—

‘‘(A) is a leasing company, bank, or financial institution; 

‘‘(B) owns, or holds the beneficial interest in, the vessel 

solely as a passive investment; 

‘‘(C) does not operate any vessel for hire and is not 

an affiliate of any person that operates any vessel for 

hire; and 

‘‘(D) is independent from, and not an affiliate of, any 

charterer of the vessel or any other person that has the 

right, directly or indirectly, to control or direct the movement or use of the vessel. 

‘‘(3) CERTAIN TANK VESSELS.—

‘‘(A) IN GENERAL.—To meet the certification requirement of this paragraph, a person shall certify that—

‘‘(i) the aggregate book value of the vessels owned 

by the person and United States affiliates of the person 

does not exceed 10 percent of the aggregate book value 

of all assets owned by the person and its United States 

affiliates; 

‘‘(ii) not more than 10 percent of the aggregate 

revenues of the person and its United States affiliates 

is derived from the ownership, operation, or management of vessels; 

‘‘(iii) at least 70 percent of the aggregate tonnage 

of all cargo carried by all vessels owned by the person 

and its United States affiliates and documented with 

a coastwise endorsement is qualified proprietary cargo; 

‘‘(iv) any cargo other than qualified proprietary 

cargo carried by all vessels owned by the person and 

its United States affiliates and documented with a 

coastwise endorsement consists of oil, petroleum products, petrochemicals, or liquified natural gas; 

‘‘(v) no vessel owned by the person or any of its 

United States affiliates and documented with a coastwise endorsement carries molten sulphur; and 
H. R. 1442—20

‘‘(vi) the person owned one or more vessels documented under this section as of August 9, 2004. 

‘‘(B) APPLICATION ONLY TO CERTAIN VESSELS.—A person 

may make a certification under this paragraph only with 

respect to—

‘‘(i) a tank vessel having a tonnage of at least 

6,000 gross tons, as measured under section 14502 

of this title (or an alternative tonnage measured under 

section 14302 of this title as prescribed by the Secretary under section 14104 of this title); or 

‘‘(ii) a towing vessel associated with a non-selfpropelled tank vessel that meets the requirements of 

clause (i), where both vessels function as a single selfpropelled vessel. 

‘‘(d) FILING OF DEMISE CHARTER.—The demise charter and any 

amendments to the charter shall be filed with the certification 

required by subsection (b)(3) or within 10 days after filing an 

amendment to the charter. The charter and amendments shall 

be made available to the public. 

‘‘(e) CONTINUATION OF ENDORSEMENT AFTER TERMINATION OF

CHARTER.—When a charter required by subsection (b)(3) is terminated for default by the charterer, the Secretary may continue 

the coastwise endorsement for not more than 6 months on terms 

and conditions the Secretary may prescribe. 

‘‘(f) DEEMED OWNED BY CITIZENS.—A vessel satisfying the 

requirements of this section is deemed to be owned only by citizens 

of the United States under sections 12103 and 50501 of this title. 

‘‘§ 12120. Liquified gas tankers 

‘‘Notwithstanding any agreement with the United States 

Government, the Secretary may issue a certificate of documentation 

with a coastwise endorsement for a vessel to transport liquified 

natural gas or liquified petroleum gas to Puerto Rico from other 

ports in the United States, if the vessel—

‘‘(1) is a foreign built vessel that was built before October 

19, 1996; or 

‘‘(2) was documented under this chapter before that date, 

even if the vessel is placed under a foreign registry and subsequently redocumented under this chapter for operation under 

this section. 

‘‘§ 12121. Small passenger vessels and uninspected passenger 

vessels 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ELIGIBLE VESSEL.—The term ‘eligible vessel’ means 

a vessel that—

‘‘(A) was not built in the United States and is at 

least 3 years old; or 

‘‘(B) if rebuilt, was rebuilt outside the United States 

at least 3 years before the certificate requested under subsection (b) would take effect. 

‘‘(2) SMALL PASSENGER VESSEL; UNINSPECTED PASSENGER

VESSEL; PASSENGER FOR HIRE.—The terms ‘small passenger 

vessel’, ‘uninspected passenger vessel’, and ‘passenger for hire’ 

have the meaning given those terms in section 2101 of this 

title. 
H. R. 1442—21

‘‘(b) ISSUANCE OF CERTIFICATE AND ENDORSEMENT.—Notwithstanding sections 12112, 12113, 55102, and 55103 of this title, 

the Secretary may issue a certificate of documentation with an 

appropriate endorsement for employment in the coastwise trade 

as a small passenger vessel or an uninspected passenger vessel 

in the case of an eligible vessel authorized to carry no more than 

12 passengers for hire if the Secretary of Transportation, after 

notice and an opportunity for public comment, determines that 

the employment of the vessel in the coastwise trade will not 

adversely affect—

‘‘(1) United States vessel builders; or 

‘‘(2) the coastwise trade business of any person that employs 

vessels built in the United States in that business. 

‘‘(c) REVOCATION.— ‘‘(1) FOR FRAUD.—The Secretary shall revoke a certificate 

or endorsement issued under subsection (b) if the Secretary 

of Transportation, after notice and an opportunity for a hearing, 

determines that the certificate or endorsement was obtained 

by fraud. 

‘‘(2) OTHER PROVISIONS NOT AFFECTED.—Paragraph (1) does 

not affect—

‘‘(A) the criminal prohibition on fraud and false statements in section 1001 of title 18; or 

‘‘(B) any other authority of the Secretary to revoke 

a certificate or endorsement issued under subsection (b). 

‘‘SUBCHAPTER III—MISCELLANEOUS 

‘‘§ 12131. Command of documented vessels 

‘‘(a) IN GENERAL.—Except as provided in subsection (b), a documented vessel may be placed under the commmand only of a citizen 

of the United States. 

‘‘(b) EXCEPTIONS.—Subsection (a) does not apply to—

‘‘(1) a vessel with only a recreational endorsement; or 

‘‘(2) an unmanned barge operating outside of the territorial 

waters of the United States. 

‘‘§ 12132. Loss of coastwise trade privileges 

‘‘(a) SOLD FOREIGN OR PLACED UNDER FOREIGN REGISTRY.— A vessel of more than 200 gross tons (as measured under chapter 

143 of this title), eligible to engage in the coastwise trade, and 

later sold foreign in whole or in part or placed under foreign 

registry may not thereafter engage in the coastwise trade. 

‘‘(b) REBUILT OUTSIDE THE UNITED STATES.—A vessel eligible 

to engage in the coastwise trade and later rebuilt outside the 

United States may not thereafter engage in the coastwise trade. 

‘‘§ 12133. Duty to carry certificate on vessel and allow examination 

‘‘(a) DUTY TO CARRY.—The certificate of documentation of a 

vessel shall be carried on the vessel unless the vessel is exempt 

by regulation from carrying the certificate. 

‘‘(b) AVAILABILITY.—The owner or individual in charge of a 

vessel required to carry its certificate of documentation shall make 

the certificate available for examination at the request of an officer 

enforcing the revenue laws or as otherwise required by law or 

regulation. 
H. R. 1442—22

‘‘(c) CRIMINAL PENALTY.—A person willfully violating subsection 

(b) shall be fined under title 18, imprisoned for not more than 

one year, or both. 

‘‘§ 12134. Evidentiary uses of documentation 

‘‘A certificate of documentation is—

‘‘(1) conclusive evidence of nationality for international purposes, but not in a proceeding conducted under the laws of 

the United States; 

‘‘(2) conclusive evidence of qualification to engage in a 

specified trade; and 

‘‘(3) not conclusive evidence of ownership in a proceeding 

in which ownership is in issue. 

‘‘§ 12135. Invalidation of certificates of documentation 

‘‘A certificate of documentation or an endorsement on the certificate is invalid if the vessel for which it is issued—

‘‘(1) no longer meets the requirements of this chapter and 

regulations prescribed under this chapter applicable to the 

certificate or endorsement; or 

‘‘(2) is placed under the command of an individual not 

a citizen of the United States in violation of section 12131 

of this title. 

‘‘§ 12136. Surrender of certificates of documentation 

‘‘(a) SURRENDER.—An invalid certificate of documentation, or 

a certificate with an invalid endorsement, shall be surrendered 

as provided by regulations prescribed by the Secretary. 

‘‘(b) CONDITIONS FOR SURRENDER.—

‘‘(1) VESSELS OVER 1,000 TONS.—The Secretary may condition approval of the surrender of the certificate of documentation for a vessel over 1,000 gross tons. 

‘‘(2) VESSELS COVERED BY MORTGAGE.—The Secretary may 

approve the surrender of the certificate of documentation of 

a vessel covered by a mortgage filed or recorded under section 

31321 of this title only if the mortgagee consents. 

‘‘(3) NOTICE OF LIEN.—The Secretary may not refuse to 

approve the surrender of the certificate of documentation for 

a vessel solely on the basis that a notice of a claim of a 

lien on the vessel has been recorded under section 31343(a) 

of this title. 

‘‘(c) CONTINUED APPLICATION OF CERTAIN LAWS.—

‘‘(1) IN GENERAL.—Notwithstanding subsection (a), until 

the certificate of documentation is surrendered with the 

approval of the Secretary, a documented vessel is deemed to 

continue to be documented under this chapter for purposes 

of—

‘‘(A) chapter 313 of this title for an instrument filed 

or recorded before the date of invalidation and an assignment after that date; 

‘‘(B) sections 56101 and 56102(a)(2) and chapter 563 

of this title; and 

‘‘(C) any other law of the United States identified by 

the Secretary by regulation as a law to which the Secretary 

applies this subsection. 
H. R. 1442—23

‘‘(2) EXCEPTION.—This subsection does not apply when a 

vessel is forfeited or sold by order of a district court of the 

United States. 

‘‘§ 12137. Recording of vessels built in the United States 

‘‘The Secretary may provide for recording and certifying 

information about vessels built in the United States that the Secretary considers to be in the public interest. 

‘‘§ 12138. List of documented vessels 

‘‘(a) IN GENERAL.—The Secretary shall publish periodically a 

list of all documented vessels and information about those vessels 

that the Secretary considers pertinent or useful. The list shall 

contain a notation clearly indicating all vessels classed by the 

American Bureau of Shipping. 

‘‘(b) VESSELS FOR CABLE LAYING, MAINTENANCE, AND REPAIR.—

‘‘(1) IN GENERAL.—The Secretary of Transportation shall 

develop, maintain, and periodically update an inventory of vessels that are documented under this chapter, are at least 200 

feet in length, and have the capability to lay, maintain, or 

repair a submarine cable, without regard to whether a particular vessel is classed as a cable ship or cable vessel. 

‘‘(2) INFORMATION TO BE INCLUDED.—For each vessel listed 

in the inventory, the Secretary of Transportation shall include 

in the inventory—

‘‘(A) the name, length, beam, depth, and other distinguishing characteristics of the vessel; 

‘‘(B) the abilities and limitations of the vessel with 

respect to laying, maintaining, and repairing a submarine 

cable; and 

‘‘(C) the name and address of the person to whom 

inquiries regarding the vessel may be made. 

‘‘(3) PUBLICATION.—The Secretary of Transportation shall 

publish in the Federal Register an updated inventory every 

6 months. 

‘‘§ 12139. Reports 

‘‘(a) IN GENERAL.—To ensure compliance with this chapter and 

laws governing the qualifications of vessels to engage in the coastwise trade and the fisheries, the Secretary may require owners, 

masters, and charterers of documented vessels to submit reports 

in any reasonable form and manner the Secretary may prescribe. 

‘‘(b) VESSELS REBUILT OUTSIDE UNITED STATES.— ‘‘(1) IN GENERAL.—Under regulations prescribed by the Secretary, if a vessel exceeding the tonnage specified in paragraph 

(2) and documented or last documented under the laws of 

the United States is rebuilt outside the United States, the 

owner or master shall submit a report of the rebuilding to 

the Secretary. 

‘‘(2) TONNAGE.—The tonnage referred to in paragraph (1) 

is—

‘‘(A) 500 gross tons as measured under section 14502 

of this title; or 

‘‘(B) an alternate tonnage as measured under section 

14302 of this title as prescribed by the Secretary under 

section 14104 of this title. 
H. R. 1442—24

‘‘(3) TIMING OF SUBMISSION.—If the rebuilding is completed 

in the United States, the report shall be submitted when the 

rebuilding is completed. If the rebuilding is completed outside 

the United States, the report shall be submitted when the 

vessel first arrives at a port in the customs territory of the 

United States. 

‘‘SUBCHAPTER IV—PENALTIES 

‘‘§ 12151. Penalties 

‘‘(a) IN GENERAL.—A person that violates this chapter or a 

regulation prescribed under this chapter is liable to the United 

States Government for a civil penalty of not more than $10,000. 

Each day of a continuing violation is a separate violation. 

‘‘(b) SEIZURE AND FORFEITURE OF VESSELS.—A vessel and its 

equipment are liable to seizure by and forfeiture to the Government 

if—

‘‘(1) the owner of the vessel or the representative or agent 

of the owner knowingly falsifies or conceals a material fact, 

or knowingly makes a false statement or representation, about 

the documentation of the vessel or in applying for documentation of the vessel; 

‘‘(2) a certificate of documentation is knowingly and fraudulently used for the vessel; 

‘‘(3) the vessel is operated after its endorsement has been 

denied or revoked under section 12152 of this title; 

‘‘(4) the vessel is employed in a trade without an appropriate endorsement; 

‘‘(5) the vessel has only a recreational endorsement and 

is operated other than for pleasure; 

‘‘(6) the vessel is a documented vessel and is placed under 

the command of a person not a citizen of the United States, 

except as authorized by section 12131(b) of this title; or 

‘‘(7) the vessel is rebuilt outside the United States and 

a report of the rebuilding is not submitted as required by 

section 12139(b) of this title. 

‘‘(c) ENGAGING IN FISHING AFTER FALSIFYING ELIGIBILITY.—

In addition to other penalties under this section, the owner of 

a documented vessel for which a fishery endorsement has been 

issued is liable to the Government for a civil penalty of not more 

than $100,000 for each day the vessel engages in fishing (as defined 

in section 3 of the Magnuson-Stevens Fishery Conservation and 

Management Act (16 U.S.C. 1802)) within the exclusive economic 

zone, if the owner or the representative or agent of the owner 

knowingly falsified or concealed a material fact, or knowingly made 

a false statement or representation, about the eligibility of the 

vessel under section 12113(c) or (d) of this title in applying for 

or applying to renew the fishery endorsement. 

‘‘§ 12152. Denial or revocation of endorsement for non-payment of civil penalty 

‘‘If the owner of a vessel fails to pay a civil penalty imposed 

by the Secretary, the Secretary may deny the issuance or renewal 

of an endorsement, or revoke the endorsement, on a certificate 

of documentation issued for the vessel under this chapter.’’.
H. R. 1442—25

SEC. 6. SUBTITLE III OF TITLE 46. 

(a) SUBTITLE ANALYSIS.—The analysis of subtitle III of title 

46, United States Code, is amended to read as follows:

‘‘Chapter Sec.

‘‘301. General Liability Provisions ................................................................30101

‘‘303. Death on the High Seas .........................................................................30301

‘‘305. Exoneration and Limitation of Liability ...........................................30501

‘‘307. Liability of Water Carriers ...................................................................30701

‘‘309. Suits in Admiralty Against the United States .................................30901

‘‘311. Suits Involving Public Vessels .............................................................31101

‘‘313. Commercial Instruments and Maritime Liens ................................31301’’.

(b) REPEALS.—Title 46, United States Code, is amended by 

striking chapter 301 and the lines appearing immediately before 

and immediately after chapter 313 indicating that certain chapters 

are reserved. 

(c) CHAPTERS 301–311.—Title 46, United States Code, is 

amended by inserting after the analysis of subtitle III the following:

‘‘CHAPTER 301—GENERAL LIABILITY PROVISIONS

‘‘Sec. 

‘‘30101. Extension of jurisdiction to cases of damage or injury on land. 

‘‘30102. Liability to passengers. 

‘‘30103. Liability of master, mate, engineer, and pilot. 

‘‘30104. Personal injury to or death of seamen. 

‘‘30105. Restriction on recovery by non-citizens and non-resident aliens for incidents in waters of other countries. 

‘‘30106. Time limit on bringing maritime action for personal injury or death.

‘‘§ 30101. Extension of jurisdiction to cases of damage or 

injury on land 

‘‘(a) IN GENERAL.—The admiralty and maritime jurisdiction 

of the United States extends to and includes cases of injury or 

damage, to person or property, caused by a vessel on navigable 

waters, even though the injury or damage is done or consummated 

on land. 

‘‘(b) PROCEDURE.—A civil action in a case under subsection 

(a) may be brought in rem or in personam according to the principles 

of law and the rules of practice applicable in cases where the 

injury or damage has been done and consummated on navigable 

waters. 

‘‘(c) ACTIONS AGAINST UNITED STATES.—

‘‘(1) EXCLUSIVE REMEDY.—In a civil action against the 

United States for injury or damage done or consummated on 

land by a vessel on navigable waters, chapter 309 or 311 

of this title, as appropriate, provides the exclusive remedy. 

‘‘(2) ADMINISTRATIVE CLAIM.—A civil action described in 

paragraph (1) may not be brought until the expiration of the 

6-month period after the claim has been presented in writing 

to the agency owning or operating the vessel causing the injury 

or damage. 

‘‘§ 30102. Liability to passengers 

‘‘(a) LIABILITY.—The owner and master of a vessel, and the 

vessel, are liable for personal injury to a passenger or damage 

to a passenger’s baggage caused by—

‘‘(1) a neglect or failure to comply with part B or F of 

subtitle II of this title; or 

‘‘(2) a known defect in the steaming apparatus or hull 

of the vessel. 
H. R. 1442—26

‘‘(b) NOT SUBJECT TO LIMITATION.—A liability imposed under 

this section is not subject to limitation under chapter 305 of this 

title. 

‘‘§ 30103. Liability of master, mate, engineer, and pilot 

‘‘A person may bring a civil action against a master, mate, 

engineer, or pilot of a vessel, and recover damages, for personal 

injury or loss caused by the master’s, mate’s, engineer’s, or pilot’s—

‘‘(1) negligence or willful misconduct; or 

‘‘(2) neglect or refusal to obey the laws governing the 

navigation of vessels. 

‘‘§ 30104. Personal injury to or death of seamen 

‘‘(a) CAUSE OF ACTION.—A seaman injured in the course of 

employment or, if the seaman dies from the injury, the personal 

representative of the seaman may elect to bring a civil action 

at law, with the right of trial by jury, against the employer. Laws 

of the United States regulating recovery for personal injury to, 

or death of, a railway employee apply to an action under this 

section. 

‘‘(b) VENUE.—An action under this section shall be brought 

in the judicial district in which the employer resides or the 

employer’s principal office is located. 

‘‘§ 30105. Restriction on recovery by non-citizens and nonresident aliens for incidents in waters of other 

countries 

‘‘(a) DEFINITION.—In this section, the term ‘continental shelf ’ 

has the meaning given that term in article I of the 1958 Convention 

on the Continental Shelf. 

‘‘(b) RESTRICTION.—Except as provided in subsection (c), a civil 

action for maintenance and cure or for damages for personal injury 

or death may not be brought under a maritime law of the United 

States if—

‘‘(1) the individual suffering the injury or death was not 

a citizen or permanent resident alien of the United States 

at the time of the incident giving rise to the action; 

‘‘(2) the incident occurred in the territorial waters or waters 

overlaying the continental shelf of a country other than the 

United States; and 

‘‘(3) the individual suffering the injury or death was 

employed at the time of the incident by a person engaged 

in the exploration, development, or production of offshore mineral or energy resources, including drilling, mapping, surveying, 

diving, pipelaying, maintaining, repairing, constructing, or 

transporting supplies, equipment, or personnel, but not 

including transporting those resources by a vessel constructed 

or adapted primarily to carry oil in bulk in the cargo spaces. 

‘‘(c) NONAPPLICATION.—Subsection (b) does not apply if the individual bringing the action establishes that a remedy is not available 

under the laws of—

‘‘(1) the country asserting jurisdiction over the area in 

which the incident occurred; or 

‘‘(2) the country in which the individual suffering the injury 

or death maintained citizenship or residency at the time of 

the incident. 
H. R. 1442—27

‘‘§ 30106. Time limit on bringing maritime action for personal 

injury or death 

‘‘Except as otherwise provided by law, a civil action for damages 

for personal injury or death arising out of a maritime tort must 

be brought within 3 years after the cause of action arose.

‘‘CHAPTER 303—DEATH ON THE HIGH SEAS

‘‘Sec. 

‘‘30301. Short title. 

‘‘30302. Cause of action. 

‘‘30303. Amount and apportionment of recovery. 

‘‘30304. Contributory negligence. 

‘‘30305. Death of plaintiff in pending action. 

‘‘30306. Foreign cause of action. 

‘‘30307. Commercial aviation accidents. 

‘‘30308. Nonapplication.

‘‘§ 30301. Short title 

‘‘This chapter may be cited as the ‘Death on the High Seas 

Act’. 

‘‘§ 30302. Cause of action 

‘‘When the death of an individual is caused by wrongful act, 

neglect, or default occurring on the high seas beyond 3 nautical 

miles from the shore of the United States, the personal representative of the decedent may bring a civil action in admiralty against 

the person or vessel responsible. The action shall be for the exclusive 

benefit of the decedent’s spouse, parent, child, or dependent relative. 

‘‘§ 30303. Amount and apportionment of recovery 

‘‘The recovery in an action under this chapter shall be a fair 

compensation for the pecuniary loss sustained by the individuals 

for whose benefit the action is brought. The court shall apportion 

the recovery among those individuals in proportion to the loss 

each has sustained. 

‘‘§ 30304. Contributory negligence 

‘‘In an action under this chapter, contributory negligence of 

the decedent is not a bar to recovery. The court shall consider 

the degree of negligence of the decedent and reduce the recovery 

accordingly. 

‘‘§ 30305. Death of plaintiff in pending action 

‘‘If a civil action in admiralty is pending in a court of the 

United States to recover for personal injury caused by wrongful 

act, neglect, or default described in section 30302 of this title, 

and the individual dies during the action as a result of the wrongful 

act, neglect, or default, the personal representative of the decedent 

may be substituted as the plaintiff and the action may proceed 

under this chapter for the recovery authorized by this chapter. 

‘‘§ 30306. Foreign cause of action 

‘‘When a cause of action exists under the law of a foreign 

country for death by wrongful act, neglect, or default on the high 

seas, a civil action in admiralty may be brought in a court of 

the United States based on the foreign cause of action, without 

abatement of the amount for which recovery is authorized. 
H. R. 1442—28

‘‘§ 30307. Commercial aviation accidents 

‘‘(a) DEFINITION.—In this section, the term ‘nonpecuniary damages’ means damages for loss of care, comfort, and companionship. 

‘‘(b) BEYOND 12 NAUTICAL MILES.—In an action under this 

chapter, if the death resulted from a commercial aviation accident 

occurring on the high seas beyond 12 nautical miles from the 

shore of the United States, additional compensation is recoverable 

for nonpecuniary damages, but punitive damages are not recoverable. 

‘‘(c) WITHIN 12 NAUTICAL MILES.—This chapter does not apply 

if the death resulted from a commercial aviation accident occurring 

on the high seas 12 nautical miles or less from the shore of the 

United States. 

‘‘§ 30308. Nonapplication 

‘‘(a) STATE LAW.—This chapter does not affect the law of a 

State regulating the right to recover for death. 

‘‘(b) INTERNAL WATERS.—This chapter does not apply to the 

Great Lakes or waters within the territorial limits of a State.

‘‘CHAPTER 305—EXONERATION AND LIMITATION OF 

LIABILITY

‘‘Sec. 

‘‘30501. Definition. 

‘‘30502. Application. 

‘‘30503. Declaration of nature and value of goods. 

‘‘30504. Loss by fire. 

‘‘30505. General limit of liability. 

‘‘30506. Limit of liability for personal injury or death. 

‘‘30507. Apportionment of losses. 

‘‘30508. Provisions requiring notice of claim or limiting time for bringing action. 

‘‘30509. Provisions limiting liability for personal injury or death. 

‘‘30510. Vicarious liability for medical malpractice with regard to crew. 

‘‘30511. Action by owner for limitation. 

‘‘30512. Liability as master, officer, or seaman not affected.

‘‘§ 30501. Definition 

‘‘In this chapter, the term ‘owner’ includes a charterer that 

mans, supplies, and navigates a vessel at the charterer’s own 

expense or by the charterer’s own procurement. 

‘‘§ 30502. Application 

‘‘Except as otherwise provided, this chapter (except section 

30503) applies to seagoing vessels and vessels used on lakes or 

rivers or in inland navigation, including canal boats, barges, and 

lighters. 

‘‘§ 30503. Declaration of nature and value of goods 

‘‘(a) IN GENERAL.—If a shipper of an item named in subsection 

(b), contained in a parcel, package, or trunk, loads the item as 

freight or baggage on a vessel, without at the time of loading 

giving to the person receiving the item a written notice of the 

true character and value of the item and having that information 

entered on the bill of lading, the owner and master of the vessel 

are not liable as carriers. The owner and master are not liable 

beyond the value entered on the bill of lading. 

‘‘(b) ITEMS.—The items referred to in subsection (a) are precious 

metals, gold or silver plated articles, precious stones, jewelry, trinkets, watches, clocks, glass, china, coins, bills, securities, printings, 
H. R. 1442—29

engravings, pictures, stamps, maps, papers, silks, furs, lace, and 

similar items of high value and small size. 

‘‘§ 30504. Loss by fire 

‘‘The owner of a vessel is not liable for loss or damage to 

merchandise on the vessel caused by a fire on the vessel unless 

the fire resulted from the design or neglect of the owner. 

‘‘§ 30505. General limit of liability 

‘‘(a) IN GENERAL.—Except as provided in section 30506 of this 

title, the liability of the owner of a vessel for any claim, debt, 

or liability described in subsection (b) shall not exceed the value 

of the vessel and pending freight. If the vessel has more than 

one owner, the proportionate share of the liability of any one owner 

shall not exceed that owner’s proportionate interest in the vessel 

and pending freight. 

‘‘(b) CLAIMS SUBJECT TO LIMITATION.—Unless otherwise 

excluded by law, claims, debts, and liabilities subject to limitation 

under subsection (a) are those arising from any embezzlement, 

loss, or destruction of any property, goods, or merchandise shipped 

or put on board the vessel, any loss, damage, or injury by collision, 

or any act, matter, or thing, loss, damage, or forfeiture, done, 

occasioned, or incurred, without the privity or knowledge of the 

owner. 

‘‘(c) WAGES.—Subsection (a) does not apply to a claim for wages. 

‘‘§ 30506. Limit of liability for personal injury or death 

‘‘(a) APPLICATION.—This section applies only to seagoing vessels, 

but does not apply to pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, fish tender vessels, canal boats, 

scows, car floats, barges, lighters, or nondescript vessels. 

‘‘(b) MINIMUM LIABILITY.—If the amount of the vessel owner’s 

liability determined under section 30505 of this title is insufficient 

to pay all losses in full, and the portion available to pay claims 

for personal injury or death is less than $420 times the tonnage 

of the vessel, that portion shall be increased to $420 times the 

tonnage of the vessel. That portion may be used only to pay claims 

for personal injury or death. 

‘‘(c) CALCULATION OF TONNAGE.—Under subsection (b), the tonnage of a self-propelled vessel is the gross tonnage without deduction for engine room, and the tonnage of a sailing vessel is the 

tonnage for documentation. However, space for the use of seamen 

is excluded. 

‘‘(d) CLAIMS ARISING ON DISTINCT OCCASIONS.—Separate limits 

of liability apply to claims for personal injury or death arising 

on distinct occasions. 

‘‘(e) PRIVITY OR KNOWLEDGE.—In a claim for personal injury 

or death, the privity or knowledge of the master or the owner’s 

superintendent or managing agent, at or before the beginning of 

each voyage, is imputed to the owner. 

‘‘§ 30507. Apportionment of losses 

‘‘If the amounts determined under sections 30505 and 30506 

of this title are insufficient to pay all claims—

‘‘(1) all claimants shall be paid in proportion to their respective losses out of the amount determined under section 30505 

of this title; and 
H. R. 1442—30

‘‘(2) personal injury and death claimants, if any, shall be 

paid an additional amount in proportion to their respective 

losses out of the additional amount determined under section 

30506(b) of this title. 

‘‘§ 30508. Provisions requiring notice of claim or limiting 

time for bringing action 

‘‘(a) APPLICATION.—This section applies only to seagoing vessels, 

but does not apply to pleasure yachts, tugs, towboats, towing vessels, tank vessels, fishing vessels, fish tender vessels, canal boats, 

scows, car floats, barges, lighters, or nondescript vessels. 

‘‘(b) MINIMUM TIME LIMITS.—The owner, master, manager, or 

agent of a vessel transporting passengers or property between ports 

in the United States, or between a port in the United States 

and a port in a foreign country, may not limit by regulation, 

contract, or otherwise the period for—

‘‘(1) giving notice of, or filing a claim for, personal injury 

or death to less than 6 months after the date of the injury 

or death; or 

‘‘(2) bringing a civil action for personal injury or death 

to less than one year after the date of the injury or death. 

‘‘(c) EFFECT OF FAILURE TO GIVE NOTICE.—When notice of 

a claim for personal injury or death is required by a contract, 

the failure to give the notice is not a bar to recovery if—

‘‘(1) the court finds that the owner, master, or agent of 

the vessel had knowledge of the injury or death and the owner 

has not been prejudiced by the failure; 

‘‘(2) the court finds there was a satisfactory reason why 

the notice could not have been given; or 

‘‘(3) the owner of the vessel fails to object to the failure 

to give the notice. 

‘‘(d) TOLLING OF PERIOD TO GIVE NOTICE.—If a claimant is 

a minor or mental incompetent, or if a claim is for wrongful death, 

any period provided by a contract for giving notice of the claim 

is tolled until the earlier of—

‘‘(1) the date a legal representative is appointed for the 

minor, incompetent, or decedent’s estate; or 

‘‘(2) 3 years after the injury or death. 

‘‘§ 30509. Provisions limiting liability for personal injury or 

death 

‘‘(a) PROHIBITION.—

‘‘(1) IN GENERAL.—The owner, master, manager, or agent 

of a vessel transporting passengers between ports in the United 

States, or between a port in the United States and a port 

in a foreign country, may not include in a regulation or contract 

a provision limiting—

‘‘(A) the liability of the owner, master, or agent for 

personal injury or death caused by the negligence or fault 

of the owner or the owner’s employees or agents; or 

‘‘(B) the right of a claimant for personal injury or 

death to a trial by court of competent jurisdiction. 

‘‘(2) VOIDNESS.—A provision described in paragraph (1) is 

void. 

‘‘(b) EMOTIONAL DISTRESS, MENTAL SUFFERING, AND PSYCHO- LOGICAL INJURY.—
H. R. 1442—31

‘‘(1) IN GENERAL.—Subsection (a) does not prohibit a provision in a contract or in ticket conditions of carriage with a 

passenger that relieves an owner, master, manager, agent, 

operator, or crewmember of a vessel from liability for infliction 

of emotional distress, mental suffering, or psychological injury 

so long as the provision does not limit such liability when 

the emotional distress, mental suffering, or psychological injury 

is—

‘‘(A) the result of physical injury to the claimant caused 

by the negligence or fault of a crewmember or the owner, 

master, manager, agent, or operator; 

‘‘(B) the result of the claimant having been at actual 

risk of physical injury, and the risk was caused by the 

negligence or fault of a crewmember or the owner, master, 

manager, agent, or operator; or 

‘‘(C) intentionally inflicted by a crewmember or the 

owner, master, manager, agent, or operator. 

‘‘(2) SEXUAL OFFENSES.—This subsection does not limit the 

liability of a crewmember or the owner, master, manager, agent, 

or operator of a vessel in a case involving sexual harassment, 

sexual assault, or rape. 

‘‘§ 30510. Vicarious liability for medical malpractice with 

regard to crew 

‘‘In a civil action by any person in which the owner or operator 

of a vessel or employer of a crewmember is claimed to have vicarious 

liability for medical malpractice with regard to a crewmember occurring at a shoreside facility, and to the extent the damages resulted 

from the conduct of any shoreside doctor, hospital, medical facility, 

or other health care provider, the owner, operator, or employer 

is entitled to rely on any statutory limitations of liability applicable 

to the doctor, hospital, medical facility, or other health care provider 

in the State of the United States in which the shoreside medical 

care was provided. 

‘‘§ 30511. Action by owner for limitation 

‘‘(a) IN GENERAL.—The owner of a vessel may bring a civil 

action in a district court of the United States for limitation of 

liability under this chapter. The action must be brought within 

6 months after a claimant gives the owner written notice of a 

claim. 

‘‘(b) CREATION OF FUND.—When the action is brought, the owner 

(at the owner’s option) shall—

‘‘(1) deposit with the court, for the benefit of claimants—

‘‘(A) an amount equal to the value of the owner’s 

interest in the vessel and pending freight, or approved 

security; and 

‘‘(B) an amount, or approved security, that the court 

may fix from time to time as necessary to carry out this 

chapter; or 

‘‘(2) transfer to a trustee appointed by the court, for the 

benefit of claimants—

‘‘(A) the owner’s interest in the vessel and pending 

freight; and 

‘‘(B) an amount, or approved security, that the court 

may fix from time to time as necessary to carry out this 

chapter. 
H. R. 1442—32

‘‘(c) CESSATION OF OTHER ACTIONS.—When an action has been 

brought under this section and the owner has complied with subsection (b), all claims and proceedings against the owner related 

to the matter in question shall cease. 

‘‘§ 30512. Liability as master, officer, or seaman not affected 

‘‘This chapter does not affect the liability of an individual 

as a master, officer, or seaman, even though the individual is 

also an owner of the vessel.

‘‘CHAPTER 307—LIABILITY OF WATER CARRIERS

‘‘Sec. 

‘‘30701. Definition. 

‘‘30702. Application. 

‘‘30703. Bills of lading. 

‘‘30704. Loading, stowage, custody, care, and delivery. 

‘‘30705. Seaworthiness. 

‘‘30706. Defenses. 

‘‘30707. Criminal penalty.

‘‘§ 30701. Definition 

‘‘In this chapter, the term ‘carrier’ means the owner, manager, 

charterer, agent, or master of a vessel. 

‘‘§ 30702. Application 

‘‘(a) IN GENERAL.—Except as otherwise provided, this chapter 

applies to a carrier engaged in the carriage of goods to or from 

any port in the United States. 

‘‘(b) LIVE ANIMALS.—Sections 30703 and 30704 of this title 

do not apply to the carriage of live animals. 

‘‘§ 30703. Bills of lading 

‘‘(a) ISSUANCE.—On demand of a shipper, the carrier shall issue 

a bill of lading or shipping document. 

‘‘(b) CONTENTS.—The bill of lading or shipping document shall 

include a statement of—

‘‘(1) the marks necessary to identify the goods; 

‘‘(2) the number of packages, or the quantity or weight, 

and whether it is carrier’s or shipper’s weight; and 

‘‘(3) the apparent condition of the goods. 

‘‘(c) PRIMA FACIE EVIDENCE OF RECEIPT.—A bill of lading or 

shipping document issued under this section is prima facie evidence 

of receipt of the goods described. 

‘‘§ 30704. Loading, stowage, custody, care, and delivery 

‘‘A carrier may not insert in a bill of lading or shipping document a provision avoiding its liability for loss or damage arising 

from negligence or fault in loading, stowage, custody, care, or proper 

delivery. Any such provision is void. 

‘‘§ 30705. Seaworthiness 

‘‘(a) PROHIBITION.—A carrier may not insert in a bill of lading 

or shipping document a provision lessening or avoiding its obligation 

to exercise due diligence to—

‘‘(1) make the vessel seaworthy; and 

‘‘(2) properly man, equip, and supply the vessel. 

‘‘(b) VOIDNESS.—A provision described in subsection (a) is void. 
H. R. 1442—33

‘‘§ 30706. Defenses 

‘‘(a) DUE DILIGENCE.—If a carrier has exercised due diligence 

to make the vessel in all respects seaworthy and to properly man, 

equip, and supply the vessel, the carrier and the vessel are not 

liable for loss or damage arising from an error in the navigation 

or management of the vessel. 

‘‘(b) OTHER DEFENSES.—A carrier and the vessel are not liable 

for loss or damage arising from—

‘‘(1) dangers of the sea or other navigable waters; 

‘‘(2) acts of God; 

‘‘(3) public enemies; 

‘‘(4) seizure under legal process; 

‘‘(5) inherent defect, quality, or vice of the goods; 

‘‘(6) insufficiency of package; 

‘‘(7) act or omission of the shipper or owner of the goods 

or their agent; or 

‘‘(8) saving or attempting to save life or property at sea, 

including a deviation in rendering such a service. 

‘‘§ 30707. Criminal penalty 

‘‘(a) IN GENERAL.—A carrier that violates this chapter shall 

be fined under title 18. 

‘‘(b) LIEN.—The amount of the fine and costs for the violation 

constitute a lien on the vessel engaged in the carriage. A civil 

action in rem to enforce the lien may be brought in the district 

court of the United States for any district in which the vessel 

is found. 

‘‘(c) DISPOSITION OF FINE.—Half of the fine shall go to the 

person injured by the violation and half to the United States 

Government.

‘‘CHAPTER 309—SUITS IN ADMIRALTY AGAINST THE 

UNITED STATES

‘‘Sec. 

‘‘30901. Short title. 

‘‘30902. Definition. 

‘‘30903. Waiver of immunity. 

‘‘30904. Exclusive remedy. 

‘‘30905. Period for bringing action. 

‘‘30906. Venue. 

‘‘30907. Procedure for hearing and determination. 

‘‘30908. Exemption from arrest or seizure. 

‘‘30909. Security. 

‘‘30910. Exoneration and limitation. 

‘‘30911. Costs and interest. 

‘‘30912. Arbitration, compromise, or settlement. 

‘‘30913. Payment of judgment or settlement. 

‘‘30914. Release of privately owned vessel after arrest or attachment. 

‘‘30915. Seizures and other proceedings in foreign jurisdictions. 

‘‘30916. Recovery by the United States for salvage services. 

‘‘30917. Disposition of amounts recovered by the United States. 

‘‘30918. Reports.

‘‘§ 30901. Short title 

‘‘This chapter may be cited as the ‘Suits in Admiralty Act’. 

‘‘§ 30902. Definition 

‘‘In this chapter, the term ‘federally-owned corporation’ means 

a corporation in which the United States owns all the outstanding 

capital stock. 
H. R. 1442—34

‘‘§ 30903. Waiver of immunity 

‘‘(a) IN GENERAL.—In a case in which, if a vessel were privately 

owned or operated, or if cargo were privately owned or possessed, 

or if a private person or property were involved, a civil action 

in admiralty could be maintained, a civil action in admiralty in 

personam may be brought against the United States or a federallyowned corporation. In a civil action in admiralty brought by the 

United States or a federally-owned corporation, an admiralty claim 

in personam may be filed or a setoff claimed against the United 

States or corporation. 

‘‘(b) NON-JURY.—A claim against the United States or a federally-owned corporation under this section shall be tried without 

a jury. 

‘‘§ 30904. Exclusive remedy 

‘‘If a remedy is provided by this chapter, it shall be exclusive 

of any other action arising out of the same subject matter against 

the officer, employee, or agent of the United States or the federallyowned corporation whose act or omission gave rise to the claim. 

‘‘§ 30905. Period for bringing action 

‘‘A civil action under this chapter must be brought within 

2 years after the cause of action arose. 

‘‘§ 30906. Venue 

‘‘(a) IN GENERAL.—A civil action under this chapter shall be 

brought in the district court of the United States for the district 

in which—

‘‘(1) any plaintiff resides or has its principal place of business; or 

‘‘(2) the vessel or cargo is found. 

‘‘(b) TRANSFER.—On a motion by a party, the court may transfer 

the action to any other district court of the United States. 

‘‘§ 30907. Procedure for hearing and determination 

‘‘(a) IN GENERAL.—A civil action under this chapter shall proceed and be heard and determined according to the principles 

of law and the rules of practice applicable in like cases between 

private parties. 

‘‘(b) IN REM.— ‘‘(1) REQUIREMENTS.—The action may proceed according 

to the principles of an action in rem if—

‘‘(A) the plaintiff elects in the complaint; and 

‘‘(B) it appears that an action in rem could have been 

maintained had the vessel or cargo been privately owned 

and possessed. 

‘‘(2) EFFECT ON RELIEF IN PERSONAM.—An election under 

paragraph (1) does not prevent the plaintiff from seeking relief 

in personam in the same action. 

‘‘§ 30908. Exemption from arrest or seizure 

‘‘The following are not subject to arrest or seizure by judicial 

process in the United States: 

‘‘(1) A vessel owned by, possessed by, or operated by or 

for the United States or a federally-owned corporation. 

‘‘(2) Cargo owned or possessed by the United States or 

a federally-owned corporation. 
H. R. 1442—35

‘‘§ 30909. Security 

‘‘Neither the United States nor a federally-owned corporation 

may be required to give a bond or admiralty stipulation in a 

civil action under this chapter. 

‘‘§ 30910. Exoneration and limitation 

‘‘The United States is entitled to the exemptions from and 

limitations of liability provided by law to an owner, charterer, 

operator, or agent of a vessel. 

‘‘§ 30911. Costs and interest 

‘‘(a) IN GENERAL.—A judgment against the United States or 

a federally-owned corporation under this chapter may include costs 

and interest at the rate of 4 percent per year until satisfied. Interest 

shall run as ordered by the court, except that interest is not allowable for the period before the action is filed. 

‘‘(b) CONTRACT PROVIDING FOR INTEREST.—Notwithstanding 

subsection (a), if the claim is based on a contract providing for 

interest, interest may be awarded at the rate and for the period 

provided in the contract. 

‘‘§ 30912. Arbitration, compromise, or settlement 

‘‘The Secretary of a department of the United States Government, or the board of trustees of a federally-owned corporation, 

may arbitrate, compromise, or settle a claim under this chapter. 

‘‘§ 30913. Payment of judgment or settlement 

‘‘(a) IN GENERAL.—The proper accounting officer of the United 

States shall pay a final judgment, arbitration award, or settlement 

under this chapter on presentation of an authenticated copy. 

‘‘(b) SOURCE OF PAYMENT.—Payment shall be made from an 

appropriation or fund available specifically for the purpose. If no 

appropriation or fund is specifically available, there is hereby appropriated, out of money in the Treasury not otherwise appropriated, 

an amount sufficient to pay the judgment, award, or settlement. 

‘‘§ 30914. Release of privately owned vessel after arrest or 

attachment 

‘‘If a privately owned vessel not in the possession of the United 

States or a federally-owned corporation is arrested or attached 

in a civil action arising or alleged to have arisen from prior ownership, possession, or operation by the United States or corporation, 

the vessel shall be released without bond or stipulation on a statement by the United States, through the Attorney General or other 

authorized law officer, that the United States is interested in the 

action, desires release of the vessel, and assumes liability for the 

satisfaction of any judgment obtained by the plaintiff. After the 

vessel is released, the action shall proceed against the United 

States in accordance with this chapter. 

‘‘§ 30915. Seizures and other proceedings in foreign jurisdictions 

‘‘(a) IN GENERAL.—If a vessel or cargo described in section 

30908 or 30914 of this title is arrested, attached, or otherwise 

seized by judicial process in a foreign country, or if an action 

is brought in a court of a foreign country against the master 

of such a vessel for a claim arising from the ownership, possession, 
H. R. 1442—36

or operation of the vessel, or the ownership, possession, or carriage 

of such cargo, the Secretary of State, on request of the Attorney 

General or another officer authorized by the Attorney General, 

may direct the United States consul residing at or nearest the 

place at which the action was brought—

‘‘(1) to claim the vessel or cargo as immune from arrest, 

attachment, or other seizure, and to execute an agreement, 

stipulation, bond, or undertaking, for the United States or 

federally-owned corporation, for the release of the vessel or 

cargo and the prosecution of any appeal; or 

‘‘(2) if an action has been brought against the master 

of such a vessel, to enter the appearance of the United States 

or corporation and to pledge the credit of the United States 

or corporation to the payment of any judgment and costs in 

the action. 

‘‘(b) ARRANGING BOND OR STIPULATION.—The Attorney General 

may—

‘‘(1) arrange with a bank, surety company, or other person, 

whether in the United States or a foreign country, to execute 

a bond or stipulation; and 

‘‘(2) pledge the credit of the United States to secure the 

bond or stipulation. 

‘‘(c) PAYMENT OF JUDGMENT.—The appropriate accounting 

officer of the United States or corporation may pay a judgment 

in an action described in subsection (a) on presentation of a copy 

of the judgment if certified by the clerk of the court and authenticated by—

‘‘(1) the certificate and seal of the United States consul 

claiming the vessel or cargo, or by the consul’s successor; and 

‘‘(2) the certificate of the Secretary as to the official capacity 

of the consul. 

‘‘(d) RIGHT TO CLAIM IMMUNITY NOT AFFECTED.—This section 

does not affect the right of the United States to claim immunity 

of a vessel or cargo from foreign jurisdiction. 

‘‘§ 30916. Recovery by the United States for salvage services 

‘‘(a) CIVIL ACTION.—The United States, and the crew of a merchant vessel owned or operated by the United States, or a federallyowned corporation, may bring a civil action to recover for salvage 

services provided by the vessel and crew. 

‘‘(b) DEPOSIT OF AMOUNTS RECOVERED.—Any amount recovered 

under this section by the United States for its own benefit, and 

not for the benefit of the crew, shall be deposited in the Treasury 

to the credit of the department of the United States Government, 

or the corporation, having control of the possession or operation 

of the vessel. 

‘‘§ 30917. Disposition of amounts recovered by the United 

States 

‘‘Amounts recovered in a civil action brought by the United 

States on a claim arising from the ownership, possession, or operation of a merchant vessel, or the ownership, possession, or carriage 

of cargo, shall be deposited in the Treasury to the credit of the 

department of the United States Government, or the federallyowned corporation, having control of the vessel or cargo, for 

reimbursement of the appropriation, insurance fund, or other fund 
H. R. 1442—37

from which the compensation for which the judgment was recovered 

was or will be paid. 

‘‘§ 30918. Reports 

‘‘The Secretary of each department of the United States Government, and the board of trustees of each federally-owned corporation, 

shall report to Congress at each session thereof all arbitration 

awards and settlements agreed to under this chapter since the 

previous session, for which the time to appeal has expired or been 

waived.

‘‘CHAPTER 311—SUITS INVOLVING PUBLIC VESSELS

‘‘Sec. 

‘‘31101. Short title. 

‘‘31102. Waiver of immunity. 

‘‘31103. Applicable procedure. 

‘‘31104. Venue. 

‘‘31105. Security when counterclaim filed. 

‘‘31106. Exoneration and limitation. 

‘‘31107. Interest. 

‘‘31108. Arbitration, compromise, or settlement. 

‘‘31109. Payment of judgment or settlement. 

‘‘31110. Subpoenas to officers or members of crew. 

‘‘31111. Claims by nationals of foreign countries. 

‘‘31112. Lien not recognized or created. 

‘‘31113. Reports.

‘‘§ 31101. Short title 

‘‘This chapter may be cited as the ‘Public Vessels Act’. 

‘‘§ 31102. Waiver of immunity 

‘‘(a) IN GENERAL.—A civil action in personam in admiralty 

may be brought, or an impleader filed, against the United States 

for—

‘‘(1) damages caused by a public vessel of the United States; 

or 

‘‘(2) compensation for towage and salvage services, 

including contract salvage, rendered to a public vessel of the 

United States. 

‘‘(b) COUNTERCLAIM OR SETOFF.—If the United States brings 

a civil action in admiralty for damages caused by a privately owned 

vessel, the owner of the vessel, or the successor in interest, may 

file a counterclaim in personam, or claim a setoff, against the 

United States for damages arising out of the same subject matter. 

‘‘§ 31103. Applicable procedure 

‘‘A civil action under this chapter is subject to the provisions 

of chapter 309 of this title except to the extent inconsistent with 

this chapter. 

‘‘§ 31104. Venue 

‘‘(a) IN GENERAL.—A civil action under this chapter shall be 

brought in the district court of the United States for the district 

in which the vessel or cargo is found within the United States. 

‘‘(b) VESSEL OR CARGO OUTSIDE TERRITORIAL WATERS.—If the 

vessel or cargo is outside the territorial waters of the United 

States—

‘‘(1) the action shall be brought in the district court of 

the United States for any district in which any plaintiff resides 

or has an office for the transaction of business; or 
H. R. 1442—38

‘‘(2) if no plaintiff resides or has an office for the transaction 

of business in the United States, the action may be brought 

in the district court of the United States for any district. 

‘‘§ 31105. Security when counterclaim filed 

‘‘If a counterclaim is filed for a cause of action for which 

the original action is filed under this chapter, the respondent to 

the counterclaim shall give security in the usual amount and form 

to respond to the counterclaim, unless the court for cause shown 

orders otherwise. The proceedings in the original action shall be 

stayed until the security is given. 

‘‘§ 31106. Exoneration and limitation 

‘‘The United States is entitled to the exemptions from and 

limitations of liability provided by law to an owner, charterer, 

operator, or agent of a vessel. 

‘‘§ 31107. Interest 

‘‘A judgment in a civil action under this chapter may not 

include interest for the period before the judgment is issued unless 

the claim is based on a contract providing for interest. 

‘‘§ 31108. Arbitration, compromise, or settlement 

‘‘The Attorney General may arbitrate, compromise, or settle 

a claim under this chapter if a civil action based on the claim 

has been commenced. 

‘‘§ 31109. Payment of judgment or settlement 

‘‘The proper accounting officer of the United States shall pay 

a final judgment, arbitration award, or settlement under this 

chapter on presentation of an authenticated copy. Payment shall 

be made from any money in the Treasury appropriated for the 

purpose. 

‘‘§ 31110. Subpoenas to officers or members of crew 

‘‘An officer or member of the crew of a public vessel may 

not be subpoenaed in a civil action under this chapter without 

the consent of—

‘‘(1) the Secretary of the department or the head of the 

independent establishment having control of the vessel at the 

time the cause of action arose; or 

‘‘(2) the master or commanding officer of the vessel at 

the time the subpoena is issued. 

‘‘§ 31111. Claims by nationals of foreign countries 

‘‘A national of a foreign country may not maintain a civil 

action under this chapter unless it appears to the satisfaction 

of the court in which the action is brought that the government 

of that country, in similar circumstances, allows nationals of the 

United States to sue in its courts. 

‘‘§ 31112. Lien not recognized or created 

‘‘This chapter shall not be construed as recognizing the existence of or as creating a lien against a public vessel of the United 

States. 
H. R. 1442—39

‘‘§ 31113. Reports 

‘‘The Attorney General shall report to Congress at each session 

thereof all claims settled under this chapter.’’.

SEC. 7. SUBTITLE IV OF TITLE 46. 

Title 46, United States Code, is amended by inserting after 

subtitle III the following:

‘‘Subtitle IV—Regulation of Ocean Shipping 

‘‘PART A—OCEAN SHIPPING

‘‘Chapter Sec. 

‘‘401. General ....................................................................................................... 40101

‘‘403. Agreements ............................................................................................... 40301

‘‘405. Tariffs, Service Contracts, Refunds, and Waivers .......................... 40501

‘‘407. Controlled Carriers ................................................................................ 40701

‘‘409. Ocean Transportation Intermediaries ............................................... 40901

‘‘411. Prohibitions and Penalties ................................................................... 41101

‘‘413. Enforcement ............................................................................................. 41301

‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

‘‘421. Regulations Affecting Shipping in Foreign Trade ......................... 42101

‘‘423. Foreign Shipping Practices .................................................................. 42301

‘‘PART C—MISCELLANEOUS

‘‘441. Evidence of Financial Responsibility for Passenger Transportation.44101

‘‘PART A—OCEAN SHIPPING

‘‘CHAPTER 401—GENERAL

‘‘Sec. 

‘‘40101. Purposes. 

‘‘40102. Definitions. 

‘‘40103. Administrative exemptions. 

‘‘40104. Reports filed with the Commission.

‘‘§ 40101. Purposes 

‘‘The purposes of this part are to—

‘‘(1) establish a nondiscriminatory regulatory process for 

the common carriage of goods by water in the foreign commerce 

of the United States with a minimum of government intervention and regulatory costs; 

‘‘(2) provide an efficient and economic transportation 

system in the ocean commerce of the United States that is, 

insofar as possible, in harmony with, and responsive to, international shipping practices; 

‘‘(3) encourage the development of an economically sound 

and efficient liner fleet of vessels of the United States capable 

of meeting national security needs; and 

‘‘(4) promote the growth and development of United States 

exports through competitive and efficient ocean transportation 

and by placing a greater reliance on the marketplace. 

‘‘§ 40102. Definitions 

‘‘In this part: 

‘‘(1) AGREEMENT.—The term ‘agreement’—
H. R. 1442—40

‘‘(A) means a written or oral understanding, arrangement, or association, and any modification or cancellation 

thereof; but 

‘‘(B) does not include a maritime labor agreement. 

‘‘(2) ANTITRUST LAWS.—The term ‘antitrust laws’ means—

‘‘(A) the Sherman Act (15 U.S.C. 1 et seq.); 

‘‘(B) sections 73 and 74 of the Wilson Tariff Act (15 

U.S.C. 8, 9); 

‘‘(C) the Clayton Act (15 U.S.C. 12 et seq.); 

‘‘(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a, 

13b, 21a); 

‘‘(E) the Federal Trade Commission Act (15 U.S.C. 

41 et seq.); 

‘‘(F) the Antitrust Civil Process Act (15 U.S.C. 1311 

et seq.); and 

‘‘(G) Acts supplementary to those Acts. 

‘‘(3) ASSESSMENT AGREEMENT.—The term ‘assessment 

agreement’ means an agreement, whether part of a collective 

bargaining agreement or negotiated separately, to the extent 

the agreement provides for the funding of collectively bargained 

fringe-benefit obligations on other than a uniform worker-hour 

basis, regardless of the cargo handled or type of vessel or 

equipment used. 

‘‘(4) BULK CARGO.—The term ‘bulk cargo’ means cargo that 

is loaded and carried in bulk without mark or count. 

‘‘(5) CHEMICAL PARCEL-TANKER.—The term ‘chemical parceltanker’ means a vessel that has—

‘‘(A) a cargo-carrying capability consisting of individual 

cargo tanks for bulk chemicals that—

‘‘(i) are a permanent part of the vessel; and 

‘‘(ii) have segregation capability with piping systems to permit simultaneous carriage of several bulk 

chemical cargoes with minimum risk of cross-contamination; and 

‘‘(B) a valid certificate of fitness under the International Maritime Organization Code for the Construction 

and Equipment of Ships Carrying Dangerous Chemicals 

in Bulk. 

‘‘(6) COMMON CARRIER.—The term ‘common carrier’—

‘‘(A) means a person that—

‘‘(i) holds itself out to the general public to provide 

transportation by water of passengers or cargo between 

the United States and a foreign country for compensation; 

‘‘(ii) assumes responsibility for the transportation 

from the port or point of receipt to the port or point 

of destination; and 

‘‘(iii) uses, for all or part of that transportation, 

a vessel operating on the high seas or the Great Lakes 

between a port in the United States and a port in 

a foreign country; but 

‘‘(B) does not include a carrier engaged in ocean 

transportation by ferry boat, ocean tramp, or chemical 

parcel-tanker, or by vessel when primarily engaged in the 

carriage of perishable agricultural commodities—
H. R. 1442—41

‘‘(i) if the carrier and the owner of those commodities are wholly-owned, directly or indirectly, by a person primarily engaged in the marketing and distribution of those commodities; and 

‘‘(ii) only with respect to the carriage of those 

commodities. 

‘‘(7) CONFERENCE.—The term ‘conference’—

‘‘(A) means an association of ocean common carriers 

permitted, pursuant to an approved or effective agreement, 

to engage in concerted activity and to use a common tariff; 

but 

‘‘(B) does not include a joint service, consortium, 

pooling, sailing, or transshipment agreement. 

‘‘(8) CONTROLLED CARRIER.—The term ‘controlled carrier’ 

means an ocean common carrier that is, or whose operating 

assets are, directly or indirectly, owned or controlled by a 

government, with ownership or control by a government being 

deemed to exist for a carrier if—

‘‘(A) a majority of the interest in the carrier is owned 

or controlled in any manner by that government, an agency 

of that government, or a public or private person controlled 

by that government; or 

‘‘(B) that government has the right to appoint or disapprove the appointment of a majority of the directors, 

the chief operating officer, or the chief executive officer 

of the carrier. 

‘‘(9) DEFERRED REBATE.—The term ‘deferred rebate’ means 

a return by a common carrier of any freight money to a shipper, 

where the return is—

‘‘(A) consideration for the shipper giving all or any 

portion of its shipments to that or any other common 

carrier over a fixed period of time; 

‘‘(B) deferred beyond the completion of the service for 

which it was paid; and 

‘‘(C) made only if the shipper has agreed to make 

a further shipment with that or any other common carrier. 

‘‘(10) FOREST PRODUCTS.—The term ‘forest products’ 

includes lumber in bundles, rough timber, ties, poles, piling, 

laminated beams, bundled siding, bundled plywood, bundled 

core stock or veneers, bundled particle or fiber boards, bundled 

hardwood, wood pulp in rolls, wood pulp in unitized bales, 

and paper and paper board in rolls or in pallet or skid-sized 

sheets. 

‘‘(11) INLAND DIVISION.—The term ‘inland division’ means 

the amount paid by a common carrier to an inland carrier 

for the inland portion of through transportation offered to the 

public by the common carrier. 

‘‘(12) INLAND PORTION.—The term ‘inland portion’ means 

the charge to the public by a common carrier for the nonocean portion of through transportation. 

‘‘(13) LOYALTY CONTRACT.—The term ‘loyalty contract’ 

means a contract with an ocean common carrier or agreement 

providing for—

‘‘(A) a shipper to obtain lower rates by committing 

all or a fixed portion of its cargo to that carrier or agreement; and 

‘‘(B) a deferred rebate arrangement. 
H. R. 1442—42

‘‘(14) MARINE TERMINAL OPERATOR.—The term ‘marine terminal operator’ means a person engaged in the United States 

in the business of providing wharfage, dock, warehouse, or 

other terminal facilities in connection with a common carrier, 

or in connection with a common carrier and a water carrier 

subject to subchapter II of chapter 135 of title 49. 

‘‘(15) MARITIME LABOR AGREEMENT.—The term ‘maritime 

labor agreement’—

‘‘(A) means—

‘‘(i) a collective bargaining agreement between an 

employer subject to this part, or a group of such 

employers, and a labor organization representing 

employees in the maritime or stevedoring industry; 

‘‘(ii) an agreement preparatory to such a collective 

bargaining agreement among members of a multiemployer bargaining group; or 

‘‘(iii) an agreement specifically implementing provisions of such a collective bargaining agreement or providing for the formation, financing, or administration 

of a multi-employer bargaining group; but 

‘‘(B) does not include an assessment agreement. 

‘‘(16) NON-VESSEL-OPERATING COMMON CARRIER.—The term 

‘non-vessel-operating common carrier’ means a common carrier 

that—

‘‘(A) does not operate the vessels by which the ocean 

transportation is provided; and 

‘‘(B) is a shipper in its relationship with an ocean 

common carrier. 

‘‘(17) OCEAN COMMON CARRIER.—The term ‘ocean common 

carrier’ means a vessel-operating common carrier. 

‘‘(18) OCEAN FREIGHT FORWARDER.—The term ‘ocean freight 

forwarder’ means a person that—

‘‘(A) in the United States, dispatches shipments from 

the United States via a common carrier and books or 

otherwise arranges space for those shipments on behalf 

of shippers; and 

‘‘(B) processes the documentation or performs related 

activities incident to those shipments. 

‘‘(19) OCEAN TRANSPORTATION INTERMEDIARY.—The term 

‘ocean transportation intermediary’ means an ocean freight forwarder or a non-vessel-operating common carrier. 

‘‘(20) SERVICE CONTRACT.—The term ‘service contract’ 

means a written contract, other than a bill of lading or receipt, 

between one or more shippers, on the one hand, and an individual ocean common carrier or an agreement between or 

among ocean common carriers, on the other, in which—

‘‘(A) the shipper or shippers commit to providing a 

certain volume or portion of cargo over a fixed time period; 

and 

‘‘(B) the ocean common carrier or the agreement commits to a certain rate or rate schedule and a defined service 

level, such as assured space, transit time, port rotation, 

or similar service features. 

‘‘(21) SHIPMENT.—The term ‘shipment’ means all of the 

cargo carried under the terms of a single bill of lading. 

‘‘(22) SHIPPER.—The term ‘shipper’ means—

‘‘(A) a cargo owner; 
H. R. 1442—43

‘‘(B) the person for whose account the ocean transportation of cargo is provided; 

‘‘(C) the person to whom delivery is to be made; 

‘‘(D) a shippers’ association; or 

‘‘(E) a non-vessel-operating common carrier that 

accepts responsibility for payment of all charges applicable 

under the tariff or service contract. 

‘‘(23) SHIPPERS’ ASSOCIATION.—The term ‘shippers’ association’ means a group of shippers that consolidates or distributes 

freight on a nonprofit basis for the members of the group 

to obtain carload, truckload, or other volume rates or service 

contracts. 

‘‘(24) THROUGH RATE.—The term ‘through rate’ means the 

single amount charged by a common carrier in connection with 

through transportation. 

‘‘(25) THROUGH TRANSPORTATION.—The term ‘through 

transportation’ means continuous transportation between origin 

and destination for which a through rate is assessed and which 

is offered or performed by one or more carriers, at least one 

of which is a common carrier, between a United States port 

or point and a foreign port or point. 

‘‘§ 40103. Administrative exemptions 

‘‘(a) IN GENERAL.—The Federal Maritime Commission, on 

application or its own motion, may by order or regulation exempt 

for the future any class of agreements between persons subject 

to this part or any specified activity of those persons from any 

requirement of this part if the Commission finds that the exemption 

will not result in substantial reduction in competition or be detrimental to commerce. The Commission may attach conditions to 

an exemption and may, by order, revoke an exemption. 

‘‘(b) OPPORTUNITY FOR HEARING.—An order or regulation of 

exemption or revocation of an exemption may be issued only if 

the Commission has provided an opportunity for a hearing to 

interested persons and departments and agencies of the United 

States Government. 

‘‘§ 40104. Reports filed with the Commission 

‘‘(a) IN GENERAL.—The Federal Maritime Commission may 

require a common carrier or an officer, receiver, trustee, lessee, 

agent, or employee of the carrier to file with the Commission 

a periodical or special report, an account, record, rate, or charge, 

or a memorandum of facts and transactions related to the business 

of the carrier. The report, account, record, rate, charge, or memorandum shall be made under oath if the Commission requires, 

and shall be filed in the form and within the time prescribed 

by the Commission. 

‘‘(b) CONFERENCE MINUTES.—Conference minutes required to 

be filed with the Commission under this section may not be released 

to third parties or published by the Commission. 

‘‘CHAPTER 403—AGREEMENTS

‘‘Sec. 

‘‘40301. Application. 

‘‘40302. Filing requirements. 

‘‘40303. Content requirements. 

‘‘40304. Commission action. 
H. R. 1442—44

‘‘40305. Assessment agreements. 

‘‘40306. Nondisclosure of information. 

‘‘40307. Exemption from antitrust laws.

‘‘§ 40301. Application 

‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—This part applies 

to an agreement between or among ocean common carriers to—

‘‘(1) discuss, fix, or regulate transportation rates, including 

through rates, cargo space accommodations, and other conditions of service; 

‘‘(2) pool or apportion traffic, revenues, earnings, or losses; 

‘‘(3) allot ports or regulate the number and character of 

voyages between ports; 

‘‘(4) regulate the volume or character of cargo or passenger 

traffic to be carried; 

‘‘(5) engage in an exclusive, preferential, or cooperative 

working arrangement between themselves or with a marine 

terminal operator; 

‘‘(6) control, regulate, or prevent competition in international ocean transportation; or 

‘‘(7) discuss and agree on any matter related to a service 

contract. 

‘‘(b) MARINE TERMINAL OPERATOR AGREEMENTS.—This part 

applies to an agreement between or among marine terminal operators, or between or among one or more marine terminal operators 

and one or more ocean common carriers, to—

‘‘(1) discuss, fix, or regulate rates or other conditions of 

service; or 

‘‘(2) engage in exclusive, preferential, or cooperative 

working arrangements, to the extent the agreement involves 

ocean transportation in the foreign commerce of the United 

States. 

‘‘(c) ACQUISITIONS.—This part does not apply to an acquisition 

by any person, directly or indirectly, of any voting security or 

assets of any other person. 

‘‘(d) MARITIME LABOR AGREEMENTS.—This part does not apply 

to a maritime labor agreement. However, this subsection does not 

exempt from this part any rate, charge, regulation, or practice 

of a common carrier that is required to be set forth in a tariff 

or is an essential term of a service contract, whether or not the 

rate, charge, regulation, or practice arises out of, or is otherwise 

related to, a maritime labor agreement. 

‘‘(e) ASSESSMENT AGREEMENTS.—This part (except sections 

40305 and 40307(a)) does not apply to an assessment agreement. 

‘‘§ 40302. Filing requirements 

‘‘(a) IN GENERAL.—A true copy of every agreement referred 

to in section 40301(a) or (b) of this title shall be filed with the 

Federal Maritime Commission. If the agreement is oral, a complete 

memorandum specifying in detail the substance of the agreement 

shall be filed. 

‘‘(b) EXCEPTIONS.—Subsection (a) does not apply to—

‘‘(1) an agreement related to transportation to be performed 

within or between foreign countries; or 

‘‘(2) an agreement among common carriers to establish, 

operate, or maintain a marine terminal in the United States. 

‘‘(c) REGULATIONS.—The Commission may by regulation prescribe the form and manner in which an agreement shall be filed 
H. R. 1442—45

and any additional information and documents necessary to 

evaluate the agreement. 

‘‘§ 40303. Content requirements 

‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—

‘‘(1) RESTRICTIONS.—An ocean common carrier agreement 

may not—

‘‘(A) prohibit or restrict a member of the agreement 

from engaging in negotiations for a service contract with 

a shipper; 

‘‘(B) require a member of the agreement to disclose 

a negotiation on a service contract, or the terms of a 

service contract, other than those terms required to be 

published under section 40502(d) of this title; or 

‘‘(C) adopt mandatory rules or requirements affecting 

the right of an agreement member to negotiate and enter 

into a service contract. 

‘‘(2) VOLUNTARY GUIDELINES.—An ocean common carrier 

agreement may provide authority to adopt voluntary guidelines 

relating to the terms and procedures of an agreement member’s 

service contracts if the guidelines explicitly state the right 

of members of the agreement not to follow the guidelines. 

Any guidelines adopted shall be submitted confidentially to 

the Federal Maritime Commission. 

‘‘(b) CONFERENCE AGREEMENTS.—Each conference agreement 

must—

‘‘(1) state its purpose; 

‘‘(2) provide reasonable and equal terms for admission and 

readmission to conference membership for any ocean common 

carrier willing to serve the particular trade or route; 

‘‘(3) permit any member to withdraw from conference membership on reasonable notice without penalty; 

‘‘(4) at the request of any member, require an independent 

neutral body to police fully the obligations of the conference 

and its members; 

‘‘(5) prohibit the conference from engaging in conduct 

prohibited by section 41105(1) or (3) of this title; 

‘‘(6) provide for a consultation process designed to promote—

‘‘(A) commercial resolution of disputes; and 

‘‘(B) cooperation with shippers in preventing and eliminating malpractices; 

‘‘(7) establish procedures for promptly and fairly considering requests and complaints of shippers; and 

‘‘(8) provide that—

‘‘(A) any member of the conference may take independent action on a rate or service item on not more 

than 5 days’ notice to the conference; and 

‘‘(B) except for an exempt commodity not published 

in the conference tariff, the conference will include the 

new rate or service item in its tariff for use by that member, 

effective no later than 5 days after receipt of the notice, 

and by any other member that notifies the conference that 

it elects to adopt the independent rate or service item 

on or after its effective date, in lieu of the existing conference tariff provision for that rate or service item. 
H. R. 1442—46

‘‘(c) INTERCONFERENCE AGREEMENTS.—Each agreement between 

carriers not members of the same conference must provide the 

right of independent action for each carrier. Each agreement 

between conferences must provide the right of independent action 

for each conference. 

‘‘(d) VESSEL SHARING AGREEMENTS.—

‘‘(1) IN GENERAL.—An ocean common carrier that is the 

owner, operator, or bareboat, time, or slot charterer of a liner 

vessel documented under section 12103 or 12111(c) of this 

title may agree with an ocean common carrier described in 

paragraph (2) to which it charters or subcharters the vessel 

or space on the vessel that the charterer or subcharterer may 

not use or make available space on the vessel for the carriage 

of cargo reserved by law for vessels of the United States. 

‘‘(2) CARRIER DESCRIBED.—An ocean common carrier 

described in this paragraph is one that is not the owner, operator, or bareboat charterer for at least one year of liner vessels 

of the United States that are eligible to be included in the 

Maritime Security Fleet Program and are enrolled in an Emergency Preparedness Program under chapter 531 of this title. 

‘‘§ 40304. Commission action 

‘‘(a) NOTICE OF FILING.—Within 7 days after an agreement 

is filed, the Federal Maritime Commission shall transmit a notice 

of the filing to the Federal Register for publication. 

‘‘(b) PRELIMINARY REVIEW AND REJECTION.—After preliminary 

review, the Commission shall reject an agreement that it finds 

does not meet the requirements of sections 40302 and 40303 of 

this title. The Commission shall notify in writing the person filing 

the agreement of the reason for rejection. 

‘‘(c) REVIEW AND EFFECTIVE DATE.—Unless rejected under subsection (b), an agreement (other than an assessment agreement) 

is effective—

‘‘(1) on the 45th day after filing, or on the 30th day after 

notice of the filing is published in the Federal Register, whichever is later; or 

‘‘(2) if additional information or documents are requested 

under subsection (d)—

‘‘(A) on the 45th day after the Commission receives 

all the additional information and documents; or 

‘‘(B) if the request is not fully complied with, on the 

45th day after the Commission receives the information 

and documents submitted and a statement of the reasons 

for noncompliance with the request. 

‘‘(d) REQUEST FOR ADDITIONAL INFORMATION.—Before the 

expiration of the period specified in subsection (c)(1), the Commission may request from the person filing the agreement any additional information and documents the Commission considers necessary to make the determinations required by this section. 

‘‘(e) MODIFICATION OF REVIEW PERIOD.—

‘‘(1) SHORTENING.—On request of the party filing an agreement, the Commission may shorten a period specified in subsection (c), but not to a date that is less than 14 days after 

notice of the filing of the agreement is published in the Federal 

Register. 

‘‘(2) EXTENSION.—The period specified in subsection (c)(2) 

may be extended only by the United States District Court 
H. R. 1442—47

for the District of Columbia in a civil action brought by the 

Commission under section 41307(c) of this title. 

‘‘(f) FIXED TERMS.—The Commission may not limit the effectiveness of an agreement to a fixed term. 

‘‘§ 40305. Assessment agreements 

‘‘(a) FILING REQUIREMENT.—An assessment agreement shall be 

filed with the Federal Maritime Commission and is effective on 

filing. 

‘‘(b) COMPLAINTS.—If a complaint is filed with the Commission 

within 2 years after the date of an assessment agreement, the 

Commission shall disapprove, cancel, or modify the agreement, 

or an assessment or charge pursuant to the agreement, that the 

Commission finds, after notice and opportunity for a hearing, to 

be unjustly discriminatory or unfair as between carriers, shippers, 

or ports. The Commission shall issue its final decision in the proceeding within one year after the date the complaint is filed. 

‘‘(c) ADJUSTMENTS OF ASSESSMENTS AND CHARGES.—To the 

extent that the Commission finds under subsection (b) that an 

assessment or charge is unjustly discriminatory or unfair as 

between carriers, shippers, or ports, the Commission shall adjust 

the assessment or charge for the period between the filing of the 

complaint and the final decision by awarding prospective credits 

or debits to future assessments and charges. However, if the 

complainant has ceased activities subject to the assessment or 

charge, the Commission may award reparations. 

‘‘§ 40306. Nondisclosure of information 

‘‘Information and documents (other than an agreement) filed 

with the Federal Maritime Commission under this chapter are 

exempt from disclosure under section 552 of title 5 and may not 

be made public except as may be relevant to an administrative 

or judicial proceeding. This section does not prevent disclosure 

to either House of Congress or to a duly authorized committee 

or subcommittee of Congress. 

‘‘§ 40307. Exemption from antitrust laws 

‘‘(a) IN GENERAL.—The antitrust laws do not apply to—

‘‘(1) an agreement (including an assessment agreement) 

that has been filed and is effective under this chapter; 

‘‘(2) an agreement that is exempt under section 40103 

of this title from any requirement of this part; 

‘‘(3) an agreement or activity within the scope of this part, 

whether permitted under or prohibited by this part, undertaken 

or entered into with a reasonable basis to conclude that it 

is—

‘‘(A) pursuant to an agreement on file with the Federal 

Maritime Commission and in effect when the activity takes 

place; or 

‘‘(B) exempt under section 40103 of this title from 

any filing or publication requirement of this part; 

‘‘(4) an agreement or activity relating to transportation 

services within or between foreign countries, whether or not 

via the United States, unless the agreement or activity has 

a direct, substantial, and reasonably foreseeable effect on the 

commerce of the United States; 
H. R. 1442—48

‘‘(5) an agreement or activity relating to the foreign inland 

segment of through transportation that is part of transportation 

provided in a United States import or export trade; 

‘‘(6) an agreement or activity to provide wharfage, dock, 

warehouse, or other terminal facilities outside the United 

States; or 

‘‘(7) an agreement, modification, or cancellation approved 

before June 18, 1984, by the Commission under section 15 

of the Shipping Act, 1916, or permitted under section 14b 

of that Act, and any properly published tariff, rate, fare, or 

charge, or classification, rule, or regulation explanatory thereof 

implementing that agreement, modification, or cancellation. 

‘‘(b) EXCEPTIONS.—This part does not extend antitrust immunity to—

‘‘(1) an agreement with or among air carriers, rail carriers, 

motor carriers, or common carriers by water not subject to 

this part relating to transportation within the United States; 

‘‘(2) a discussion or agreement among common carriers 

subject to this part relating to the inland divisions (as opposed 

to the inland portions) of through rates within the United 

States; 

‘‘(3) an agreement among common carriers subject to this 

part to establish, operate, or maintain a marine terminal in 

the United States; or 

‘‘(4) a loyalty contract. 

‘‘(c) RETROACTIVE EFFECT OF DETERMINATIONS.—A determination by an agency or court that results in the denial or removal 

of the immunity to the antitrust laws under subsection (a) does 

not remove or alter the antitrust immunity for the period before 

the determination. 

‘‘(d) RELIEF UNDER CLAYTON ACT.—A person may not recover 

damages under section 4 of the Clayton Act (15 U.S.C. 15), or 

obtain injunctive relief under section 16 of that Act (15 U.S.C. 

26), for conduct prohibited by this part. 

‘‘CHAPTER 405—TARIFFS, SERVICE CONTRACTS, 

REFUNDS, AND WAIVERS

‘‘Sec. 

‘‘40501. General rate and tariff requirements. 

‘‘40502. Service contracts. 

‘‘40503. Refunds and waivers.

‘‘§ 40501. General rate and tariff requirements 

‘‘(a) AUTOMATED TARIFF SYSTEM.— ‘‘(1) IN GENERAL.—Each common carrier and conference 

shall keep open to public inspection in an automated tariff 

system, tariffs showing all its rates, charges, classifications, 

rules, and practices between all points or ports on its own 

route and on any through transportation route that has been 

established. However, a common carrier is not required to 

state separately or otherwise reveal in tariffs the inland divisions of a through rate. 

‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply with 

respect to bulk cargo, forest products, recycled metal scrap, 

new assembled motor vehicles, waste paper, or paper waste. 

‘‘(b) CONTENTS OF TARIFFS.—A tariff under subsection (a) 

shall—
H. R. 1442—49

‘‘(1) state the places between which cargo will be carried; 

‘‘(2) list each classification of cargo in use; 

‘‘(3) state the level of compensation, if any, of any ocean 

freight forwarder by a carrier or conference; 

‘‘(4) state separately each terminal or other charge, privilege, or facility under the control of the carrier or conference 

and any rules that in any way change, affect, or determine 

any part or the total of the rates or charges; 

‘‘(5) include sample copies of any bill of lading, contract 

of affreightment, or other document evidencing the transportation agreement; and 

‘‘(6) include copies of any loyalty contract, omitting the 

shipper’s name. 

‘‘(c) ELECTRONIC ACCESS.—A tariff under subsection (a) shall 

be made available electronically to any person, without time, 

quantity, or other limitation, through appropriate access from 

remote locations. A reasonable fee may be charged for such access, 

except that no fee may be charged for access by a Federal agency. 

‘‘(d) TIME-VOLUME RATES.—A rate contained in a tariff under 

subsection (a) may vary with the volume of cargo offered over 

a specified period of time. 

‘‘(e) EFFECTIVE DATES.—

‘‘(1) INCREASES.—A new or initial rate or change in an 

existing rate that results in an increased cost to a shipper 

may not become effective earlier than 30 days after publication. 

However, for good cause, the Federal Maritime Commission 

may allow the rate to become effective sooner. 

‘‘(2) DECREASES.—A change in an existing rate that results 

in a decreased cost to a shipper may become effective on 

publication. 

‘‘(f) MARINE TERMINAL OPERATOR SCHEDULES.—A marine terminal operator may make available to the public a schedule of 

rates, regulations, and practices, including limitations of liability 

for cargo loss or damage, pertaining to receiving, delivering, handling, or storing property at its marine terminal. Any such schedule 

made available to the public is enforceable by an appropriate court 

as an implied contract without proof of actual knowledge of its 

provisions. 

‘‘(g) REGULATIONS.—

‘‘(1) IN GENERAL.—The Commission shall by regulation prescribe the requirements for the accessibility and accuracy of 

automated tariff systems established under this section. The 

Commission, after periodic review, may prohibit the use of 

any automated tariff system that fails to meet the requirements 

established under this section. 

‘‘(2) REMOTE TERMINALS.—The Commission may not require 

a common carrier to provide a remote terminal for electronic 

access under subsection (c). 

‘‘(3) MARINE TERMINAL OPERATOR SCHEDULES.—The 

Commission shall by regulation prescribe the form and manner 

in which marine terminal operator schedules authorized by 

this section shall be published. 

‘‘§ 40502. Service contracts 

‘‘(a) IN GENERAL.—An individual ocean common carrier or an 

agreement between or among ocean common carriers may enter 
H. R. 1442—50

into a service contract with one or more shippers subject to the 

requirements of this part. 

‘‘(b) FILING REQUIREMENTS.—

‘‘(1) IN GENERAL.—Each service contract entered into under 

this section by an individual ocean common carrier or an agreement shall be filed confidentially with the Federal Maritime 

Commission. 

‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply to contracts regarding bulk cargo, forest products, recycled metal 

scrap, new assembled motor vehicles, waste paper, or paper 

waste. 

‘‘(c) ESSENTIAL TERMS.—Each service contract shall include—

‘‘(1) the origin and destination port ranges; 

‘‘(2) the origin and destination geographic areas in the 

case of through intermodal movements; 

‘‘(3) the commodities involved; 

‘‘(4) the minimum volume or portion; 

‘‘(5) the line-haul rate; 

‘‘(6) the duration; 

‘‘(7) service commitments; and 

‘‘(8) the liquidated damages for nonperformance, if any. 

‘‘(d) PUBLICATION OF CERTAIN TERMS.—When a service contract 

is filed confidentially with the Commission, a concise statement 

of the essential terms specified in paragraphs (1), (3), (4), and 

(6) of subsection (c) shall be published and made available to 

the general public in tariff format. 

‘‘(e) DISCLOSURE OF CERTAIN TERMS.— ‘‘(1) DEFINITIONS.—In this subsection, the terms ‘dock area’ 

and ‘within the port area’ have the same meaning and scope 

as in the applicable collective bargaining agreement between 

the requesting labor organization and the carrier. 

‘‘(2) DISCLOSURE.—An ocean common carrier that is a party 

to or is otherwise subject to a collective bargaining agreement 

with a labor organization shall, in response to a written request 

by the labor organization, state whether it is responsible for 

the following work at a dock area or within a port area in 

the United States with respect to cargo transportation under 

a service contract: 

‘‘(A) The movement of the shipper’s cargo on a dock 

area or within the port area or to or from railroad cars 

on a dock area or within the port area. 

‘‘(B) The assignment of intraport carriage of the shipper’s cargo between areas on a dock or within the port 

area. 

‘‘(C) The assignment of the carriage of the shipper’s 

cargo between a container yard on a dock area or within 

the port area and a rail yard adjacent to the container 

yard. 

‘‘(D) The assignment of container freight station work 

and container maintenance and repair work performed at 

a dock area or within the port area. 

‘‘(3) WITHIN REASONABLE TIME.—The common carrier shall 

provide the information described in paragraph (2) to the 

requesting labor organization within a reasonable period of 

time. 

‘‘(4) EXISTENCE OF COLLECTIVE BARGAINING AGREEMENT.— This subsection does not require the disclosure of information 
H. R. 1442—51

by an ocean common carrier unless there exists an applicable 

and otherwise lawful collective bargaining agreement pertaining to that carrier. A disclosure by an ocean common carrier 

may not be deemed an admission or an agreement that any 

work is covered by a collective bargaining agreement. A dispute 

about whether any work is covered by a collective bargaining 

agreement and the responsibility of an ocean common carrier 

under a collective bargaining agreement shall be resolved solely 

in accordance with the dispute resolution procedures contained 

in the collective bargaining agreement and the National Labor 

Relations Act (29 U.S.C. 151 et seq.), and without reference 

to this subsection. 

‘‘(5) EFFECT UNDER OTHER LAWS.—This subsection does not 

affect the lawfulness or unlawfulness under this part or any 

other Federal or State law of any collective bargaining agreement or element thereof, including any element that constitutes 

an essential term of a service contract. 

‘‘(f) REMEDY FOR BREACH.—Unless the parties agree otherwise, 

the exclusive remedy for a breach of a service contract is an action 

in an appropriate court. The contract dispute resolution forum 

may not be controlled by or in any way affiliated with a controlled 

carrier or by the government that owns or controls the carrier. 

‘‘§ 40503. Refunds and waivers 

‘‘The Federal Maritime Commission, on application of a carrier 

or shipper, may permit a common carrier or conference to refund 

a portion of the freight charges collected from a shipper, or to 

waive collection of a portion of the charges from a shipper, if—

‘‘(1) there is an error in a tariff, a failure to publish a 

new tariff, or an error in quoting a tariff, and the refund 

or waiver will not result in discrimination among shippers, 

ports, or carriers; 

‘‘(2) the common carrier or conference, before filing an 

application for authority to refund or waive any charges for 

an error in a tariff or a failure to publish a tariff, has published 

a new tariff setting forth the rate on which the refund or 

waiver would be based; and 

‘‘(3) the application for the refund or waiver is filed with 

the Commission within 180 days from the date of shipment. 

‘‘CHAPTER 407—CONTROLLED CARRIERS

‘‘Sec. 

‘‘40701. Rates. 

‘‘40702. Rate standards. 

‘‘40703. Effective date of rates. 

‘‘40704. Commission review. 

‘‘40705. Presidential review of Commission orders. 

‘‘40706. Exceptions.

‘‘§ 40701. Rates 

‘‘(a) IN GENERAL.—A controlled carrier may not—

‘‘(1) maintain a rate or charge in a tariff or service contract, 

or charge or assess a rate, that is below a just and reasonable 

level; or 

‘‘(2) establish, maintain, or enforce in a tariff or service 

contract a classification, rule, or regulation that results, or 

is likely to result, in the carriage or handling of cargo at 

a rate or charge that is below a just and reasonable level. 
H. R. 1442—52

‘‘(b) COMMISSION PROHIBITION.—The Federal Maritime Commission, at any time after notice and opportunity for a hearing, may 

prohibit the publication or use of a rate, charge, classification, 

rule, or regulation that a controlled carrier has failed to demonstrate 

is just and reasonable. 

‘‘(c) BURDEN OF PROOF.—In a proceeding under this section, 

the burden of proof is on the controlled carrier to demonstrate 

that its rate, charge, classification, rule, or regulation is just and 

reasonable. 

‘‘(d) VOIDNESS.—A rate, charge, classification, rule, or regulation 

that has been suspended or prohibited by the Commission is void 

and its use is unlawful. 

‘‘§ 40702. Rate standards 

‘‘(a) DEFINITION.—In this section, the term ‘constructive costs’ 

means the costs of another carrier, other than a controlled carrier, 

operating similar vessels and equipment in the same or a similar 

trade. 

‘‘(b) STANDARDS.—In determining whether a rate, charge, classification, rule, or regulation of a controlled carrier is just and reasonable, the Federal Maritime Commission—

‘‘(1) shall take into account whether the rate or charge 

that has been published or assessed, or that would result from 

the pertinent classification, rule, or regulation, is below a level 

that is fully compensatory to the controlled carrier based on 

the carrier’s actual costs or constructive costs; and 

‘‘(2) may take into account other appropriate factors, 

including whether the rate, charge, classification, rule, or regulation is—

‘‘(A) the same as, or similar to, those published or 

assessed by other carriers in the same trade; 

‘‘(B) required to ensure movement of particular cargo 

in the same trade; or 

‘‘(C) required to maintain acceptable continuity, level, 

or quality of common carrier service to or from affected 

ports. 

‘‘§ 40703. Effective date of rates 

‘‘Notwithstanding section 40501(e) of this title and except for 

service contracts, a rate, charge, classification, rule, or regulation 

of a controlled carrier may not become effective, without special 

permission of the Federal Maritime Commission, until the 30th 

day after publication. 

‘‘§ 40704. Commission review 

‘‘(a) REQUEST FOR JUSTIFICATION.—On request of the Federal 

Maritime Commission, a controlled carrier shall file with the 

Commission, within 20 days of the request, a statement of justification that sufficiently details the carrier’s need and purpose for 

an existing or proposed rate, charge, classification, rule, or regulation and upon which the Commission may reasonably base a determination of its lawfulness. 

‘‘(b) DETERMINATION.—Within 120 days after receipt of information requested under subsection (a), the Commission shall determine 

whether the rate, charge, classification, rule, or regulation may 

be unjust and unreasonable. 
H. R. 1442—53

‘‘(c) SHOW CAUSE ORDER.—Whenever the Commission is of the 

opinion that a rate, charge, classification, rule, or regulation published or assessed by a controlled carrier may be unjust and 

unreasonable, the Commission shall issue an order to the controlled 

carrier to show cause why the rate, charge, classification, rule, 

or regulation should not be prohibited. 

‘‘(d) SUSPENSION PENDING DETERMINATION.—

‘‘(1) NOT YET EFFECTIVE.—Pending a determination of the 

lawfulness of a rate, charge, classification, rule, or regulation 

in a proceeding under subsection (c), the Commission may 

suspend the rate, charge, classification, rule, or regulation at 

any time before its effective date. 

‘‘(2) ALREADY EFFECTIVE.—If a rate, charge, classification, 

rule, or regulation has already become effective, the Commission, on issuance of an order to show cause, may suspend 

the rate, charge, classification, rule, or regulation on at least 

30 days’ notice to the controlled carrier. 

‘‘(3) MAXIMUM SUSPENSION.—A period of suspension under 

this subsection may not exceed 180 days. 

‘‘(e) REPLACEMENT DURING SUSPENSION.—Whenever the 

Commission has suspended a rate, charge, classification, rule, or 

regulation under this section, the controlled carrier may publish 

a new rate, charge, classification, rule, or regulation to take effect 

immediately during the suspension in lieu of the suspended rate, 

charge, classification, rule, or regulation. However, the Commission 

may reject the new rate, charge, classification, rule, or regulation 

if the Commission believes it is unjust and unreasonable. 

‘‘§ 40705. Presidential review of Commission orders 

‘‘(a) TRANSMISSION TO PRESIDENT.—The Federal Maritime 

Commission shall transmit to the President, concurrently with 

publication thereof, each order of suspension or final order of 

prohibition issued under section 40704 of this title. 

‘‘(b) PRESIDENTIAL REQUEST AND COMMISSION ACTION.—Within 

10 days after receipt or the effective date of a Commission order 

referred to in subsection (a), the President, in writing, may request 

the Commission to stay the effect of the order if the President 

finds that the stay is required for reasons of national defense 

or foreign policy. The reasons shall be specified in the request. 

The Commission shall immediately grant the request by issuing 

an order in which the President’s request shall be described. During 

a stay, the President shall, whenever practicable, attempt to resolve 

the matter by negotiating with representatives of the applicable 

foreign governments. 

‘‘§ 40706. Exceptions 

‘‘This chapter does not apply to—

‘‘(1) a controlled carrier of a foreign country whose vessels 

are entitled by a treaty of the United States to receive national 

or most-favored-nation treatment; or 

‘‘(2) a trade served only by controlled carriers. 

‘‘CHAPTER 409—OCEAN TRANSPORTATION 

INTERMEDIARIES

‘‘Sec. 

‘‘40901. License requirement. 

‘‘40902. Financial responsibility. 
H. R. 1442—54

‘‘40903. Suspension or revocation of license. 

‘‘40904. Compensation by common carriers.

‘‘§ 40901. License requirement 

‘‘(a) IN GENERAL.—A person in the United States may not 

act as an ocean transportation intermediary unless the person 

holds an ocean transportation intermediary’s license issued by the 

Federal Maritime Commission. The Commission shall issue a 

license to a person that the Commission determines to be qualified 

by experience and character to act as an ocean transportation 

intermediary. 

‘‘(b) EXCEPTION.—A person whose primary business is the sale 

of merchandise may forward shipments of the merchandise for 

its own account without an ocean transportation intermediary’s 

license. 

‘‘§ 40902. Financial responsibility 

‘‘(a) IN GENERAL.—A person may not act as an ocean transportation intermediary unless the person furnishes a bond, proof of 

insurance, or other surety—

‘‘(1) in a form and amount determined by the Federal 

Maritime Commission to insure financial responsibility; and 

‘‘(2) issued by a surety company found acceptable by the 

Secretary of the Treasury. 

‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A bond, insurance, 

or other surety obtained under this section—

‘‘(1) shall be available to pay any penalty assessed under 

section 41109 of this title or any order for reparation issued 

under section 41305 of this title; 

‘‘(2) may be available to pay any claim against an ocean 

transportation intermediary arising from its transportationrelated activities—

‘‘(A) with the consent of the insured ocean transportation intermediary and subject to review by the surety 

company; or 

‘‘(B) when the claim is deemed valid by the surety 

company after the ocean transportation intermediary has 

failed to respond to adequate notice to address the validity 

of the claim; and 

‘‘(3) shall be available to pay any judgment for damages 

against an ocean transportation intermediary arising from its 

transportation-related activities, if the claimant has first 

attempted to resolve the claim under paragraph (2) and the 

claim has not been resolved within a reasonable period of 

time. 

‘‘(c) REGULATIONS ON COURT JUDGMENTS.—The Commission 

shall prescribe regulations for the purpose of protecting the interests 

of claimants, ocean transportation intermediaries, and surety 

companies with respect to the process of pursuing claims against 

ocean transportation intermediary bonds, insurance, or sureties 

through court judgments. The regulations shall provide that a judgment for monetary damages may not be enforced except to the 

extent that the damages claimed arise from the transportationrelated activities of the insured ocean transportation intermediary, 

as defined by the Commission. 

‘‘(d) RESIDENT AGENT.—An ocean transportation intermediary 

not domiciled in the United States shall designate a resident agent 
H. R. 1442—55

in the United States for receipt of service of judicial and administrative process, including subpoenas. 

‘‘§ 40903. Suspension or revocation of license 

‘‘(a) FAILURE TO MAINTAIN QUALIFICATIONS OR TO COMPLY.— The Federal Maritime Commission, after notice and opportunity 

for a hearing, shall suspend or revoke an ocean transportation 

intermediary’s license if the Commission finds that the ocean 

transportation intermediary—

‘‘(1) is not qualified to provide intermediary services; or 

‘‘(2) willfully failed to comply with a provision of this part 

or with an order or regulation of the Commission. 

‘‘(b) FAILURE TO MAINTAIN BOND, PROOF OF INSURANCE, OR

OTHER SURETY.—The Commission may revoke an ocean transportation intermediary’s license for failure to maintain a bond, proof 

of insurance, or other surety as required by section 40902(a) of 

this title. 

‘‘§ 40904. Compensation by common carriers 

‘‘(a) CERTIFICATION OF LICENSE AND SERVICES.—A common carrier may compensate an ocean freight forwarder for a shipment 

dispatched for others only when the ocean freight forwarder has 

certified in writing that it holds an ocean transportation 

intermediary’s license (if required under section 40901 of this title) 

and has—

‘‘(1) engaged, booked, secured, reserved, or contracted 

directly with the carrier or its agent for space aboard a vessel 

or confirmed the availability of the space; and 

‘‘(2) prepared and processed the ocean bill of lading, dock 

receipt, or other similar document for the shipment. 

‘‘(b) DUAL COMPENSATION.—A common carrier may not pay 

compensation for services described in subsection (a) more than 

once on the same shipment. 

‘‘(c) BENEFICIAL INTEREST SHIPMENTS.—An ocean freight forwarder may not receive compensation from a common carrier for 

a shipment in which the ocean freight forwarder has a direct 

or indirect beneficial interest. A common carrier may not knowingly 

pay compensation on that shipment. 

‘‘(d) LIMITS ON AUTHORITY OF CONFERENCE OR GROUP.—A conference or group of two or more ocean common carriers in the 

foreign commerce of the United States that is authorized to agree 

on the level of compensation paid to an ocean freight forwarder 

may not—

‘‘(1) deny a member of the conference or group the right, 

upon notice of not more than 5 days, to take independent 

action on any level of compensation paid to an ocean freight 

forwarder; or 

‘‘(2) agree to limit the payment of compensation to an 

ocean freight forwarder to less than 1.25 percent of the aggregate of all rates and charges applicable under a tariff and 

assessed against the cargo on which the services of the ocean 

freight forwarder are provided. 

‘‘CHAPTER 411—PROHIBITIONS AND PENALTIES

‘‘Sec. 

‘‘41101. Joint ventures and consortiums. 

‘‘41102. General prohibitions. 
H. R. 1442—56

‘‘41103. Disclosure of information. 

‘‘41104. Common carriers. 

‘‘41105. Concerted action. 

‘‘41106. Marine terminal operators. 

‘‘41107. Monetary penalties. 

‘‘41108. Additional penalties. 

‘‘41109. Assessment of penalties.

‘‘§ 41101. Joint ventures and consortiums 

‘‘In this chapter, a joint venture or consortium of two or more 

common carriers operating as a single entity is deemed to be a 

single common carrier. 

‘‘§ 41102. General prohibitions 

‘‘(a) OBTAINING TRANSPORTATION AT LESS THAN APPLICABLE

RATES.—A person may not knowingly and willfully, directly or 

indirectly, by means of false billing, false classification, false 

weighing, false report of weight, false measurement, or any other 

unjust or unfair device or means, obtain or attempt to obtain 

ocean transportation for property at less than the rates or charges 

that would otherwise apply. 

‘‘(b) OPERATING CONTRARY TO AGREEMENT.—A person may not 

operate under an agreement required to be filed under section 

40302 or 40305 of this title if—

‘‘(1) the agreement has not become effective under section 

40304 of this title or has been rejected, disapproved, or canceled; 

or 

‘‘(2) the operation is not in accordance with the terms 

of the agreement or any modifications to the agreement made 

by the Federal Maritime Commission. 

‘‘(c) PRACTICES IN HANDLING PROPERTY.—A common carrier, 

marine terminal operator, or ocean transportation intermediary 

may not fail to establish, observe, and enforce just and reasonable 

regulations and practices relating to or connected with receiving, 

handling, storing, or delivering property. 

‘‘§ 41103. Disclosure of information 

‘‘(a) PROHIBITION.—A common carrier, marine terminal operator, or ocean freight forwarder, either alone or in conjunction 

with any other person, directly or indirectly, may not knowingly 

disclose, offer, solicit, or receive any information concerning the 

nature, kind, quantity, destination, consignee, or routing of any 

property tendered or delivered to a common carrier, without the 

consent of the shipper or consignee, if the information—

‘‘(1) may be used to the detriment or prejudice of the 

shipper, the consignee, or any common carrier; or 

‘‘(2) may improperly disclose its business transaction to 

a competitor. 

‘‘(b) EXCEPTIONS.—Subsection (a) does not prevent providing 

the information—

‘‘(1) in response to legal process; 

‘‘(2) to the Federal Maritime Commission or an agency 

of the United States Government; or 

‘‘(3) to an independent neutral body operating within the 

scope of its authority to fulfill the policing obligations of the 

parties to an agreement effective under this part. 

‘‘(c) DISCLOSURE FOR DETERMINING BREACH OR COMPILING

STATISTICS.—An ocean common carrier that is a party to a conference agreement approved under this part, a receiver, trustee, 
H. R. 1442—57

lessee, agent, or employee of the carrier, or any other person authorized by the carrier to receive information—

‘‘(1) may give information to the conference or any person 

or agency designated by the conference, for the purpose of—

‘‘(A) determining whether a shipper or consignee has 

breached an agreement with the conference or its member 

lines; 

‘‘(B) determining whether a member of the conference 

has breached the conference agreement; or 

‘‘(C) compiling statistics of cargo movement; and 

‘‘(2) may not prevent the conference or its designee from 

soliciting or receiving information for any of those purposes. 

‘‘§ 41104. Common carriers 

‘‘A common carrier, either alone or in conjunction with any 

other person, directly or indirectly, may not—

‘‘(1) allow a person to obtain transportation for property 

at less than the rates or charges established by the carrier 

in its tariff or service contract by means of false billing, false 

classification, false weighing, false measurement, or any other 

unjust or unfair device or means; 

‘‘(2) provide service in the liner trade that is—

‘‘(A) not in accordance with the rates, charges, classifications, rules, and practices contained in a tariff published 

or a service contract entered into under chapter 405 of 

this title, unless excepted or exempted under section 40103 

or 40501(a)(2) of this title; or 

‘‘(B) under a tariff or service contract that has been 

suspended or prohibited by the Federal Maritime Commission under chapter 407 or 423 of this title; 

‘‘(3) retaliate against a shipper by refusing, or threatening 

to refuse, cargo space accommodations when available, or resort 

to other unfair or unjustly discriminatory methods because 

the shipper has patronized another carrier, or has filed a complaint, or for any other reason; 

‘‘(4) for service pursuant to a tariff, engage in any unfair 

or unjustly discriminatory practice in the matter of—

‘‘(A) rates or charges; 

‘‘(B) cargo classifications; 

‘‘(C) cargo space accommodations or other facilities, 

with due regard being given to the proper loading of the 

vessel and the available tonnage; 

‘‘(D) loading and landing of freight; or 

‘‘(E) adjustment and settlement of claims; 

‘‘(5) for service pursuant to a service contract, engage in 

any unfair or unjustly discriminatory practice in the matter 

of rates or charges with respect to any port; 

‘‘(6) use a vessel in a particular trade for the purpose 

of excluding, preventing, or reducing competition by driving 

another ocean common carrier out of that trade; 

‘‘(7) offer or pay any deferred rebates; 

‘‘(8) for service pursuant to a tariff, give any undue or 

unreasonable preference or advantage or impose any undue 

or unreasonable prejudice or disadvantage; 

‘‘(9) for service pursuant to a service contract, give any 

undue or unreasonable preference or advantage or impose any 
H. R. 1442—58

undue or unreasonable prejudice or disadvantage with respect 

to any port; 

‘‘(10) unreasonably refuse to deal or negotiate; 

‘‘(11) knowingly and willfully accept cargo from or transport 

cargo for the account of an ocean transportation intermediary 

that does not have a tariff as required by section 40501 of 

this title and a bond, insurance, or other surety as required 

by section 40902 of this title; or 

‘‘(12) knowingly and willfully enter into a service contract 

with an ocean transportation intermediary that does not have 

a tariff as required by section 40501 of this title and a bond, 

insurance, or other surety as required by section 40902 of 

this title, or with an affiliate of such an ocean transportation 

intermediary. 

‘‘§ 41105. Concerted action 

‘‘A conference or group of two or more common carriers may 

not—

‘‘(1) boycott or take any other concerted action resulting 

in an unreasonable refusal to deal; 

‘‘(2) engage in conduct that unreasonably restricts the use 

of intermodal services or technological innovations; 

‘‘(3) engage in any predatory practice designed to eliminate 

the participation, or deny the entry, in a particular trade of 

a common carrier not a member of the conference, a group 

of common carriers, an ocean tramp, or a bulk carrier; 

‘‘(4) negotiate with a non-ocean carrier or group of nonocean carriers (such as truck, rail, or air operators) on any 

matter relating to rates or services provided to ocean common 

carriers within the United States by those non-ocean carriers, 

unless the negotiations and any resulting agreements are not 

in violation of the antitrust laws and are consistent with the 

purposes of this part, except that this paragraph does not 

prohibit the setting and publishing of a joint through rate 

by a conference, joint venture, or association of ocean common 

carriers; 

‘‘(5) deny in the export foreign commerce of the United 

States compensation to an ocean freight forwarder or limit 

that compensation to less than a reasonable amount; 

‘‘(6) allocate shippers among specific carriers that are parties to the agreement or prohibit a carrier that is a party 

to the agreement from soliciting cargo from a particular shipper, 

except as—

‘‘(A) authorized by section 40303(d) of this title; 

‘‘(B) required by the law of the United States or the 

importing or exporting country; or 

‘‘(C) agreed to by a shipper in a service contract; 

‘‘(7) for service pursuant to a service contract, engage in 

any unjustly discriminatory practice in the matter of rates 

or charges with respect to any locality, port, or person due 

to the person’s status as a shippers’ association or ocean 

transportation intermediary; or 

‘‘(8) for service pursuant to a service contract, give any 

undue or unreasonable preference or advantage or impose any 

undue or unreasonable prejudice or disadvantage with respect 

to any locality, port, or person due to the person’s status as 

a shippers’ association or ocean transportation intermediary. 
H. R. 1442—59

‘‘§ 41106. Marine terminal operators 

‘‘A marine terminal operator may not—

‘‘(1) agree with another marine terminal operator or with 

a common carrier to boycott, or unreasonably discriminate in 

the provision of terminal services to, a common carrier or 

ocean tramp; 

‘‘(2) give any undue or unreasonable preference or advantage or impose any undue or unreasonable prejudice or disadvantage with respect to any person; or 

‘‘(3) unreasonably refuse to deal or negotiate. 

‘‘§ 41107. Monetary penalties 

‘‘(a) IN GENERAL.—A person that violates this part or a regulation or order of the Federal Maritime Commission issued under 

this part is liable to the United States Government for a civil 

penalty. Unless otherwise provided in this part, the amount of 

the penalty may not exceed $5,000 for each violation or, if the 

violation was willfully and knowingly committed, $25,000 for each 

violation. Each day of a continuing violation is a separate violation. 

‘‘(b) LIEN ON CARRIER’S VESSELS.—The amount of a civil penalty 

imposed on a common carrier under this section constitutes a lien 

on the vessels operated by the carrier. Any such vessel is subject 

to an action in rem to enforce the lien in the district court of 

the United States for the district in which it is found. 

‘‘§ 41108. Additional penalties 

‘‘(a) SUSPENSION OF TARIFFS.—For a violation of section 

41104(1), (2), or (7) of this title, the Federal Maritime Commission 

may suspend any or all tariffs of the common carrier, or that 

common carrier’s right to use any or all tariffs of conferences 

of which it is a member, for a period not to exceed 12 months. 

‘‘(b) OPERATING UNDER SUSPENDED TARIFF.—A common carrier 

that accepts or handles cargo for carriage under a tariff that has 

been suspended, or after its right to use that tariff has been suspended, is liable to the United States Government for a civil penalty 

of not more than $50,000 for each shipment. 

‘‘(c) FAILURE TO PROVIDE INFORMATION.—

‘‘(1) PENALTIES.—If the Commission finds, after notice and 

opportunity for a hearing, that a common carrier has failed 

to supply information ordered to be produced or compelled 

by subpoena under section 41303 of this title, the Commission 

may—

‘‘(A) suspend any or all tariffs of the carrier or the 

carrier’s right to use any or all tariffs of conferences of 

which it is a member; and 

‘‘(B) request the Secretary of Homeland Security to 

refuse or revoke any clearance required for a vessel operated by the carrier, and when so requested, the Secretary 

shall refuse or revoke the clearance. 

‘‘(2) DEFENSE BASED ON FOREIGN LAW.—If, in defense of 

its failure to comply with a subpoena or discovery order, a 

common carrier alleges that information or documents located 

in a foreign country cannot be produced because of the laws 

of that country, the Commission shall immediately notify the 

Secretary of State of the failure to comply and of the allegation 

relating to foreign laws. On receiving the notification, the Secretary of State shall promptly consult with the government 
H. R. 1442—60

of the nation within which the information or documents are 

alleged to be located for the purpose of assisting the Commission in obtaining the information or documents. 

‘‘(d) IMPAIRING ACCESS TO FOREIGN TRADE.—If the Commission 

finds, after notice and opportunity for a hearing, that the action 

of a common carrier, acting alone or in concert with another person, 

or a foreign government has unduly impaired access of a vessel 

documented under the laws of the United States to ocean trade 

between foreign ports, the Commission shall take action that it 

finds appropriate, including imposing any of the penalties authorized by this section. The Commission also may take any of the 

actions authorized by sections 42304 and 42305 of this title. 

‘‘(e) SUBMISSION OF ORDER TO PRESIDENT.—Before an order 

under this section becomes effective, it shall be submitted immediately to the President. The President, within 10 days after 

receiving it, may disapprove it if the President finds that disapproval is required for reasons of national defense or foreign 

policy. 

‘‘§ 41109. Assessment of penalties 

‘‘(a) GENERAL AUTHORITY.—Until a matter is referred to the 

Attorney General, the Federal Maritime Commission may, after 

notice and opportunity for a hearing, assess a civil penalty provided 

for in this part. The Commission may compromise, modify, or remit, 

with or without conditions, a civil penalty. 

‘‘(b) FACTORS IN DETERMINING AMOUNT.—In determining the 

amount of a civil penalty, the Commission shall take into account 

the nature, circumstances, extent, and gravity of the violation committed and, with respect to the violator, the degree of culpability, 

history of prior offenses, ability to pay, and other matters justice 

may require. 

‘‘(c) EXCEPTION.—A civil penalty may not be imposed for conspiracy to violate section 41102(a) or 41104(1) or (2) of this title 

or to defraud the Commission by concealing such a violation. 

‘‘(d) PROHIBITED BASIS OF PENALTY.—The Commission or a 

court may not order a person to pay the difference between the 

amount billed and agreed upon in writing with a common carrier 

or its agent and the amount set forth in a tariff or service contract 

by that common carrier for the transportation service provided. 

‘‘(e) TIME LIMIT.—A proceeding to assess a civil penalty under 

this section must be commenced within 5 years after the date 

of the violation. 

‘‘(f) REVIEW OF CIVIL PENALTY.—A person against whom a 

civil penalty is assessed under this section may obtain review 

under chapter 158 of title 28. 

‘‘(g) CIVIL ACTIONS TO COLLECT.—If a person does not pay 

an assessment of a civil penalty after it has become final or after 

the appropriate court has entered final judgment in favor of the 

Commission, the Attorney General at the request of the Commission 

may seek to collect the amount assessed in an appropriate district 

court of the United States. The court shall enforce the order of 

the Commission unless it finds that the order was not regularly 

made and duly issued. 

‘‘CHAPTER 413—ENFORCEMENT

‘‘Sec. 

‘‘41301. Complaints. 
H. R. 1442—61

‘‘41302. Investigations. 

‘‘41303. Discovery and subpoenas. 

‘‘41304. Hearings and orders. 

‘‘41305. Award of reparations. 

‘‘41306. Injunctive relief sought by complainants. 

‘‘41307. Injunctive relief sought by the Commission. 

‘‘41308. Enforcement of subpoenas and orders. 

‘‘41309. Enforcement of reparation orders.

‘‘§ 41301. Complaints 

‘‘(a) IN GENERAL.—A person may file with the Federal Maritime 

Commission a sworn complaint alleging a violation of this part, 

except section 41307(b)(1). If the complaint is filed within 3 years 

after the claim accrues, the complainant may seek reparations 

for an injury to the complainant caused by the violation. 

‘‘(b) NOTICE AND RESPONSE.—The Commission shall provide 

a copy of the complaint to the person named in the complaint. 

Within a reasonable time specified by the Commission, the person 

shall satisfy the complaint or answer it in writing. 

‘‘(c) IF COMPLAINT NOT SATISFIED.—If the complaint is not 

satisfied, the Commission shall investigate the complaint in an 

appropriate manner and make an appropriate order. 

‘‘§ 41302. Investigations 

‘‘(a) IN GENERAL.—The Federal Maritime Commission, on complaint or its own motion, may investigate any conduct or agreement 

that the Commission believes may be in violation of this part. 

The Commission may by order disapprove, cancel, or modify any 

agreement that operates in violation of this part. 

‘‘(b) EFFECTIVENESS OF AGREEMENT DURING INVESTIGATION.— Unless an injunction is issued under section 41306 or 41307 of 

this title, an agreement under investigation by the Commission 

remains in effect until the Commission issues its order. 

‘‘(c) DATE FOR DECISION.—Within 10 days after the initiation 

of a proceeding under this section or section 41301 of this title, 

the Commission shall set a date by which it will issue its final 

decision. The Commission by order may extend the date for good 

cause. 

‘‘(d) SANCTIONS FOR DELAY.—If, within the period for final 

decision under subsection (c), the Commission determines that it 

is unable to issue a final decision because of undue delay caused 

by a party to the proceeding, the Commission may impose sanctions, 

including issuing a decision adverse to the delaying party. 

‘‘(e) REPORT.—The Commission shall make a written report 

of every investigation under this part in which a hearing was 

held, stating its conclusions, decisions, findings of fact, and order. 

The Commission shall provide a copy of the report to all parties 

and publish the report for public information. A published report 

is competent evidence in a court of the United States. 

‘‘§ 41303. Discovery and subpoenas 

‘‘(a) IN GENERAL.—In an investigation or adjudicatory proceeding under this part—

‘‘(1) the Federal Maritime Commission may subpoena witnesses and evidence; and 

‘‘(2) a party may use depositions, written interrogatories, 

and discovery procedures under regulations prescribed by the 

Commission that, to the extent practicable, shall conform to 

the Federal Rules of Civil Procedure (28 App. U.S.C.). 
H. R. 1442—62

‘‘(b) WITNESS FEES.—Unless otherwise prohibited by law, a 

witness is entitled to the same fees and mileage as in the courts 

of the United States. 

‘‘§ 41304. Hearings and orders 

‘‘(a) OPPORTUNITY FOR HEARING.—The Federal Maritime 

Commission shall provide an opportunity for a hearing before 

issuing an order relating to a violation of this part or a regulation 

prescribed under this part. 

‘‘(b) MODIFICATION OF ORDER.—The Commission may reverse, 

suspend, or modify any of its orders. 

‘‘(c) REHEARING.—On application of a party to a proceeding, 

the Commission may grant a rehearing of the same or any matter 

determined in the proceeding. Except by order of the Commission, 

a rehearing does not operate as a stay of an order. 

‘‘(d) PERIOD OF EFFECTIVENESS.—An order of the Commission 

remains in effect for the period specified in the order or until 

suspended, modified, or set aside by the Commission or a court 

of competent jurisdiction. 

‘‘§ 41305. Award of reparations 

‘‘(a) DEFINITION.—In this section, the term ‘actual injury’ 

includes the loss of interest at commercial rates compounded from 

the date of injury. 

‘‘(b) BASIC AMOUNT.—If the complaint was filed within the 

period specified in section 41301(a) of this title, the Federal Maritime Commission shall direct the payment of reparations to the 

complainant for actual injury caused by a violation of this part, 

plus reasonable attorney fees. 

‘‘(c) ADDITIONAL AMOUNTS.—On a showing that the injury was 

caused by an activity prohibited by section 41102(b), 41104(3) or 

(6), or 41105(1) or (3) of this title, the Commission may order 

the payment of additional amounts, but the total recovery of a 

complainant may not exceed twice the amount of the actual injury. 

‘‘(d) DIFFERENCE BETWEEN RATES.—If the injury was caused 

by an activity prohibited by section 41104(4)(A) or (B) of this title, 

the amount of the injury shall be the difference between the rate 

paid by the injured shipper and the most favorable rate paid by 

another shipper. 

‘‘§ 41306. Injunctive relief sought by complainants 

‘‘(a) IN GENERAL.—After filing a complaint with the Federal 

Maritime Commission under section 41301 of this title, the 

complainant may bring a civil action in a district court of the 

United States to enjoin conduct in violation of this part. 

‘‘(b) VENUE.—The action must be brought in the judicial district 

in which—

‘‘(1) the Commission has brought a civil action against 

the defendant under section 41307(a) of this title; or 

‘‘(2) the defendant resides or transacts business, if the 

Commission has not brought such an action. 

‘‘(c) REMEDIES BY COURT.—After notice to the defendant, and 

a showing that the standards for granting injunctive relief by courts 

of equity are met, the court may grant a temporary restraining 

order or preliminary injunction for a period not to exceed 10 days 

after the Commission has issued an order disposing of the complaint. 
H. R. 1442—63

‘‘(d) ATTORNEY FEES.—A defendant prevailing in a civil action 

under this section shall be allowed reasonable attorney fees to 

be assessed and collected as part of the costs of the action. 

‘‘§ 41307. Injunctive relief sought by the Commission 

‘‘(a) GENERAL VIOLATIONS.—In connection with an investigation 

under section 41301 or 41302 of this title, the Federal Maritime 

Commission may bring a civil action to enjoin conduct in violation 

of this part. The action must be brought in the district court 

of the United States for any judicial district in which the defendant 

resides or transacts business. After notice to the defendant, and 

a showing that the standards for granting injunctive relief by courts 

of equity are met, the court may grant a temporary restraining 

order or preliminary injunction for a period not to exceed 10 days 

after the Commission has issued an order disposing of the issues 

under investigation. 

‘‘(b) REDUCTION IN COMPETITION.—

‘‘(1) ACTION BY COMMISSION.—If, at any time after the 

filing or effective date of an agreement under chapter 403 

of this title, the Commission determines that the agreement 

is likely, by a reduction in competition, to produce an unreasonable reduction in transportation service or an unreasonable 

increase in transportation cost, the Commission, after notice 

to the person filing the agreement, may bring a civil action 

in the United States District Court for the District of Columbia 

to enjoin the operation of the agreement. The Commission’s 

sole remedy with respect to an agreement likely to have such 

an effect is an action under this subsection. 

‘‘(2) REMEDIES BY COURT.—In an action under this subsection, the court may issue—

‘‘(A) a temporary restraining order or a preliminary 

injunction; and 

‘‘(B) a permanent injunction after a showing that the 

agreement is likely to have the effect described in paragraph (1). 

‘‘(3) BURDEN OF PROOF AND THIRD PARTIES.—In an action 

under this subsection, the burden of proof is on the Commission. 

The court may not allow a third party to intervene. 

‘‘(c) FAILURE TO PROVIDE INFORMATION.—If a person filing an 

agreement, or an officer, director, partner, agent, or employee of 

the person, fails substantially to comply with a request for the 

submission of additional information or documents within the period 

provided in section 40304(c) of this title, the Commission may 

bring a civil action in the United States District Court for the 

District of Columbia. At the request of the Commission, the Court—

‘‘(1) may order compliance; 

‘‘(2) shall extend the period specified in section 40304(c)(2) 

of this title until there has been substantial compliance; and 

‘‘(3) may grant other equitable relief that the court decides 

is appropriate. 

‘‘(d) REPRESENTATION.—The Commission may represent itself 

in a proceeding under this section in—

‘‘(1) a district court of the United States, on notice to 

the Attorney General; and 

‘‘(2) a court of appeals of the United States, with the 

approval of the Attorney General. 
H. R. 1442—64

‘‘§ 41308. Enforcement of subpoenas and orders 

‘‘(a) CIVIL ACTION.—If a person does not comply with a subpoena 

or order of the Federal Maritime Commission, the Attorney General, 

at the request of the Commission, or an injured party, may seek 

enforcement in a district court of the United States having jurisdiction over the parties. If, after hearing, the court determines that 

the subpoena or order was regularly made and duly issued, the 

court shall enforce the subpoena or order. 

‘‘(b) TIME LIMIT ON BRINGING ACTIONS.—An action under this 

section to enforce an order of the Commission must be brought 

within 3 years after the date the order was violated. 

‘‘§ 41309. Enforcement of reparation orders 

‘‘(a) CIVIL ACTION.—If a person does not comply with an order 

of the Federal Maritime Commission for the payment of reparation, 

the person to whom the award was made may seek enforcement 

of the order in a district court of the United States having jurisdiction over the parties. 

‘‘(b) PARTIES AND SERVICE OF PROCESS.—All parties in whose 

favor the Commission has made an award of reparation by a single 

order may be joined as plaintiffs, and all other parties in the 

order may be joined as defendants, in a single action in a judicial 

district in which any one plaintiff could maintain an action against 

any one defendant. Service of process against a defendant not 

found in that district may be made in a district in which any 

office of that defendant is located or in which any port of call 

on a regular route operated by that defendant is located. Judgment 

may be entered for any plaintiff against the defendant liable to 

that plaintiff. 

‘‘(c) NATURE OF REVIEW.—In an action under this section, the 

findings and order of the Commission are prima facie evidence 

of the facts stated in the findings and order. 

‘‘(d) COSTS AND ATTORNEY FEES.—The plaintiff is not liable 

for costs of the action or for costs of any subsequent stage of 

the proceedings unless they accrue on the plaintiff’s appeal. A 

prevailing plaintiff shall be allowed reasonable attorney fees to 

be assessed and collected as part of the costs of the action. 

‘‘(e) TIME LIMIT ON BRINGING ACTIONS.—An action under this 

section to enforce an order of the Commission must be brought 

within 3 years after the date the order was violated. 

‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

‘‘CHAPTER 421—REGULATIONS AFFECTING SHIPPING IN 

FOREIGN TRADE

‘‘Sec. 

‘‘42101. Regulations of the Commission. 

‘‘42102. Regulations of other agencies. 

‘‘42103. No preference to Government-owned vessels. 

‘‘42104. Information, witnesses, and evidence. 

‘‘42105. Disclosure to public. 

‘‘42106. Other actions to remedy unfavorable conditions. 

‘‘42107. Refusal of clearance and entry. 

‘‘42108. Penalty for operating under suspended tariff or service contract. 

‘‘42109. Consultation with other agencies.

‘‘§ 42101. Regulations of the Commission 

‘‘(a) UNFAVORABLE CONDITIONS.—To further the objectives and 

policy set forth in section 50101 of this title, the Federal Maritime 
H. R. 1442—65

Commission shall prescribe regulations affecting shipping in foreign 

trade, not in conflict with law, to adjust or meet general or special 

conditions unfavorable to shipping in foreign trade, whether in 

a particular trade or on a particular route or in commerce generally, 

including intermodal movements, terminal operations, cargo solicitation, agency services, ocean transportation intermediary services 

and operations, and other activities and services integral to 

transportation systems, and which arise out of or result from laws 

or regulations of a foreign country or competitive methods, pricing 

practices, or other practices employed by owners, operators, agents, 

or masters of vessels of a foreign country. 

‘‘(b) INITIATION OF REGULATION.—A regulation under subsection 

(a) may be initiated by the Commission on its own motion or 

on the petition of any person, including another component of 

the United States Government. 

‘‘§ 42102. Regulations of other agencies 

‘‘(a) REQUEST TO AGENCY.—To further the objectives and policy 

set forth in section 50101 of this title, the Federal Maritime 

Commission shall request the head of a department, agency, or 

instrumentality of the United States Government to suspend, 

modify, or annul any existing regulations, or to make new regulations, affecting shipping in the foreign trade, except regulations 

relating to the Public Health Service, the Consular Service, or 

the inspection of vessels. 

‘‘(b) PRIOR REVIEW AND APPROVAL.—A department, agency, or 

instrumentality of the Government may not prescribe a regulation 

affecting shipping in the foreign trade (except a regulation affecting 

the Public Health Service, the Consular Service, or the inspection 

of vessels) until the regulation has been submitted to the Commission for its approval and final action has been taken by the Commission or the President. 

‘‘(c) SUBMISSION TO PRESIDENT.—If the head of a department, 

agency, or instrumentality of the Government refuses to comply 

with a request under subsection (a) or objects to a decision of 

the Commission under subsection (b), the Commission or the head 

of the department, agency, or instrumentality may submit the facts 

to the President. The President may establish, suspend, modify, 

or annul the regulation. 

‘‘§ 42103. No preference to Government-owned vessels 

‘‘A regulation may not give a vessel owned by the United 

States Government a preference over a vessel owned by citizens 

of the United States and documented under the laws of the United 

States. 

‘‘§ 42104. Information, witnesses, and evidence 

‘‘(a) ORDER TO SUPPLY INFORMATION.—In carrying out section 

42101 of this title, the Federal Maritime Commission may order 

any person (including a common carrier, tramp operator, bulk operator, shipper, shippers’ association, ocean transportation intermediary, or marine terminal operator, or an officer, receiver, 

trustee, lessee, agent, or employee thereof) to file with the Commission a report, answers to questions, documentary material, or other 

information the Commission considers necessary or appropriate. 

The Commission may require the response to any such order to 
H. R. 1442—66

be made under oath. The response shall be provided in the form 

and within the time specified by the Commission. 

‘‘(b) SUBPOENAS AND DISCOVERY.—In carrying out section 42101 

of this title, the Commission may—

‘‘(1) subpoena witnesses and evidence; and 

‘‘(2) authorize a party to use depositions, written interrogatories, and discovery procedures that, to the extent practicable, 

conform to the Federal Rules of Civil Procedure (28 App. 

U.S.C.). 

‘‘(c) WITNESS FEES.—Unless otherwise prohibited by law, and 

subject to funds being appropriated, a witness in a proceeding 

under section 42101 of this title is entitled to the same fees and 

mileage as in the courts of the United States. 

‘‘(d) PENALTIES.—For failure to supply information ordered to 

be produced or compelled by subpoena under this section, the 

Commission may—

‘‘(1) after notice and opportunity for a hearing, suspend 

tariffs and service contracts of a common carrier or the common 

carrier’s right to use tariffs of conferences and service contracts 

of agreements of which it is a member; or 

‘‘(2) assess a civil penalty of not more than $5,000 for 

each day that the information is not provided. 

‘‘(e) ENFORCEMENT.—If a person does not comply with an order 

or subpoena of the Commission under this section, the Commission 

may seek enforcement in a district court of the United States 

having jurisdiction over the parties. If, after hearing, the court 

determines that the order or subpoena was regularly made and 

duly issued, the court shall enforce the order or subpoena. 

‘‘§ 42105. Disclosure to public 

‘‘Notwithstanding any other provision of law, the Federal Maritime Commission may refuse to disclose to the public a response 

or other information submitted to it under this chapter. 

‘‘§ 42106. Other actions to remedy unfavorable conditions 

‘‘If the Federal Maritime Commission finds that conditions 

unfavorable to shipping in foreign trade as described in section 

42101 of this title exist, the Commission may—

‘‘(1) limit voyages to and from United States ports or the 

amount or type of cargo carried; 

‘‘(2) suspend, in whole or in part, tariffs and service contracts for carriage to or from United States ports, including 

a common carrier’s right to use tariffs of conferences and service 

contracts of agreements in United States trades of which it 

is a member for any period the Commission specifies; 

‘‘(3) suspend, in whole or in part, an ocean common carrier’s 

right to operate under any agreement filed with the Commission, including any agreement authorizing preferential treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenue with other ocean common 

carriers; 

‘‘(4) impose a fee not to exceed $1,000,000 per voyage; 

or 

‘‘(5) take any other action the Commission finds necessary 

and appropriate to adjust or meet any condition unfavorable 

to shipping in the foreign trade of the United States. 
H. R. 1442—67

‘‘§ 42107. Refusal of clearance and entry 

‘‘At the request of the Federal Maritime Commission—

‘‘(1) the Secretary of Homeland Security shall—

‘‘(A) refuse the clearance required by section 60105 

of this title to a vessel of a country that is named in 

a regulation prescribed by the Commission under section 

42101 of this title; and 

‘‘(B) collect any fees imposed by the Commission under 

section 42106(4) of this title; and 

‘‘(2) the Secretary of the department in which the Coast 

Guard is operating shall—

‘‘(A) deny entry, for purposes of oceanborne trade, of 

a vessel of a country that is named in a regulation prescribed by the Commission under section 42101 of this 

title, to a port or place in the United States or the navigable 

waters of the United States; or 

‘‘(B) detain the vessel at the port or place in the United 

States from which it is about to depart for another port 

or place in the United States. 

‘‘§ 42108. Penalty for operating under suspended tariff or 

service contract 

‘‘A common carrier that accepts or handles cargo for carriage 

under a tariff or service contract that has been suspended under 

section 42104(d)(1) or 42106(2) of this title, or after its right to 

use another tariff or service contract has been suspended under 

those provisions, is liable to the United States Government for 

a civil penalty of not more than $50,000 for each day that it 

is found to be operating under a suspended tariff or service contract. 

‘‘§ 42109. Consultation with other agencies 

‘‘The Federal Maritime Commission may consult with, seek 

the cooperation of, or make recommendations to other appropriate 

agencies of the United States Government prior to taking any 

action under this chapter. 

‘‘CHAPTER 423—FOREIGN SHIPPING PRACTICES

‘‘Sec. 

‘‘42301. Definitions. 

‘‘42302. Investigations. 

‘‘42303. Information requests. 

‘‘42304. Action against foreign carriers. 

‘‘42305. Refusal of clearance and entry. 

‘‘42306. Submission of determinations to President. 

‘‘42307. Review of regulations and orders.

‘‘§ 42301. Definitions 

‘‘(a) DEFINED IN PART A.—In this chapter, the terms ‘common 

carrier’, ‘marine terminal operator’, ‘ocean common carrier’, ‘ocean 

transportation intermediary’, ‘shipper’, and ‘shippers’ association’ 

have the meaning given those terms in section 40102 of this title. 

‘‘(b) OTHER DEFINITIONS.—In this chapter: 

‘‘(1) FOREIGN CARRIER.—The term ‘foreign carrier’ means 

an ocean common carrier a majority of whose vessels are documented under the laws of a foreign country. 

‘‘(2) MARITIME SERVICES.—The term ‘maritime services’ 

means port-to-port transportation of cargo by vessels operated 

by an ocean common carrier. 
H. R. 1442—68

‘‘(3) MARITIME-RELATED SERVICES.—The term ‘maritimerelated services’ means intermodal operations, terminal operations, cargo solicitation, agency services, ocean transportation 

intermediary services and operations, and all other activities 

and services integral to total transportation systems of ocean 

common carriers and their foreign domiciled affiliates for themselves and others. 

‘‘(4) UNITED STATES CARRIER.—The term ‘United States carrier’ means an ocean common carrier operating vessels documented under the laws of the United States. 

‘‘(5) UNITED STATES OCEANBORNE TRADE.—The term ‘United 

States oceanborne trade’ means the carriage of cargo between 

the United States and a foreign country, whether directly or 

indirectly, by an ocean common carrier. 

‘‘§ 42302. Investigations 

‘‘(a) IN GENERAL.—The Federal Maritime Commission shall 

investigate whether any laws, rules, regulations, policies, or practices of a foreign government, or any practices of a foreign carrier 

or other person providing maritime or maritime-related services 

in a foreign country, result in the existence of conditions that—

‘‘(1) adversely affect the operations of United States carriers 

in United States oceanborne trade; and 

‘‘(2) do not exist for foreign carriers of that country in 

the United States under the laws of the United States or 

as a result of acts of United States carriers or other persons 

providing maritime or maritime-related services in the United 

States. 

‘‘(b) INITIATION OF INVESTIGATION.—An investigation under subsection (a) may be initiated by the Commission on its own motion 

or on the petition of any person, including another component 

of the United States Government. 

‘‘(c) TIME FOR DECISION.—The Commission shall complete an 

investigation under this section and render a decision within 120 

days after it is initiated. However, the Commission may extend 

this 120-day period for an additional 90 days if the Commission 

is unable to obtain sufficient information to determine whether 

a condition specified in subsection (a) exists. A notice providing 

an extension shall state clearly the reasons for the extension. 

‘‘§ 42303. Information requests 

‘‘(a) IN GENERAL.—To further the purposes of section 42302(a) 

of this title, the Federal Maritime Commission may order any 

person (including a common carrier, shipper, shippers’ association, 

ocean transportation intermediary, or marine terminal operator, 

or an officer, receiver, trustee, lessee, agent or employee thereof) 

to file with the Commission any periodic or special report, answers 

to questions, documentary material, or other information the 

Commission considers necessary or appropriate. The Commission 

may require the response to any such order to be made under 

oath. The response shall be provided in the form and within the 

time specified by the Commission. 

‘‘(b) SUBPOENAS.—In an investigation under section 42302 of 

this title, the Commission may subpoena witnesses and evidence. 

‘‘(c) NONDISCLOSURE.—Notwithstanding any other provision of 

law, the Commission may determine that any information submitted 
H. R. 1442—69

to it in response to a request under this section, or otherwise, 

shall not be disclosed to the public. 

‘‘§ 42304. Action against foreign carriers 

‘‘(a) IN GENERAL.—Subject to section 42306 of this title, whenever the Federal Maritime Commission, after notice and opportunity 

for comment or hearing, determines that the conditions specified 

in section 42302(a) of this title exist, the Commission shall take 

such action to offset those conditions as it considers necessary 

and appropriate against any foreign carrier that is a contributing 

cause, or whose government is a contributing cause, to those conditions. The action may include—

‘‘(1) limitations on voyages to and from United States ports 

or on the amount or type of cargo carried; 

‘‘(2) suspension, in whole or in part, of any or all tariffs 

and service contracts, including an ocean common carrier’s 

right to use any or all tariffs and service contracts of conferences in United States trades of which it is a member for 

any period the Commission specifies; 

‘‘(3) suspension, in whole or in part, of an ocean common 

carrier’s right to operate under any agreement filed with the 

Commission, including any agreement authorizing preferential 

treatment at terminals, preferential terminal leases, space chartering, or pooling of cargo or revenue with other ocean common 

carriers; and 

‘‘(4) a fee not to exceed $1,000,000 per voyage. 

‘‘(b) CONSULTATION.—The Commission may consult with, seek 

the cooperation of, or make recommendations to other appropriate 

agencies of the United States Government prior to taking any 

action under subsection (a). 

‘‘§ 42305. Refusal of clearance and entry 

‘‘Subject to section 42306 of this title, whenever the Federal 

Maritime Commission determines that the conditions specified in 

section 42302(a) of this title exist, then at the request of the 

Commission—

‘‘(1) the Secretary of Homeland Security shall refuse the 

clearance required by section 60105 of this title to a vessel 

of a foreign carrier that is identified by the Commission under 

section 42304 of this title; and 

‘‘(2) the Secretary of the department in which the Coast 

Guard is operating shall—

‘‘(A) deny entry, for purposes of oceanborne trade, of 

a vessel of a foreign carrier that is identified by the 

Commission under section 42304 of this title, to a port 

or place in the United States or the navigable waters 

of the United States; or 

‘‘(B) detain the vessel at the port or place in the United 

States from which it is about to depart for another port 

or place in the United States. 

‘‘§ 42306. Submission of determinations to President 

‘‘Before a determination under section 42304 of this title 

becomes effective or a request is made under section 42305 of 

this title, the determination shall be submitted immediately to 

the President. The President, within 10 days after receiving it, 

may disapprove it in writing, setting forth the reasons for the 
H. R. 1442—70

disapproval, if the President finds that disapproval is required 

for reasons of national defense or foreign policy. 

‘‘§ 42307. Review of regulations and orders 

‘‘A regulation or final order of the Federal Maritime Commission under this chapter is reviewable exclusively in the same forum 

and in the same manner as provided in section 2342(3)(B) of title 

28. 

‘‘PART C—MISCELLANEOUS

‘‘CHAPTER 441—EVIDENCE OF FINANCIAL 

RESPONSIBILITY FOR PASSENGER TRANSPORTATION

‘‘Sec. 

‘‘44101. Application. 

‘‘44102. Financial responsibility to indemnify passengers for nonperformance of 

transportation. ‘‘44103. Financial responsibility to pay liability for death or injury. 

‘‘44104. Civil penalty. 

‘‘44105. Refusal of clearance. 

‘‘44106. Conduct of proceedings.

‘‘§ 44101. Application 

‘‘This chapter applies to a vessel that—

‘‘(1) has berth or stateroom accommodations for at least 

50 passengers; and 

‘‘(2) boards passengers at a port in the United States. 

‘‘§ 44102. Financial responsibility to indemnify passengers 

for nonperformance of transportation 

‘‘(a) FILING REQUIREMENT.—A person in the United States may 

not arrange, offer, advertise, or provide transportation on a vessel 

to which this chapter applies unless the person has filed with 

the Federal Maritime Commission evidence of financial responsibility to indemnify passengers for nonperformance of the transportation. 

‘‘(b) SATISFACTORY EVIDENCE.—To satisfy subsection (a), a person must file—

‘‘(1) information the Commission considers necessary; or 

‘‘(2) a copy of a bond or other security, in such form as 

the Commission by regulation may require. 

‘‘(c) AUTHORIZED ISSUER OF BOND.—If a bond is filed, it must 

be issued by a bonding company authorized to do business in 

the United States. 

‘‘§ 44103. Financial responsibility to pay liability for death 

or injury 

‘‘(a) GENERAL REQUIREMENT.—The owner or charterer of a 

vessel to which this chapter applies shall establish, under regulations prescribed by the Federal Maritime Commission, financial 

responsibility to meet liability for death or injury to passengers 

or other individuals on a voyage to or from a port in the United 

States. 

‘‘(b) AMOUNTS.— ‘‘(1) IN GENERAL.—The amount of financial responsibility 

required under subsection (a) shall be based on the number 

of passenger accommodations as follows: ‘‘(A) $20,000 for each of the first 500 passenger accommodations. 
H. R. 1442—71

‘‘(B) $15,000 for each additional passenger accommodation between 501 and 1,000. 

‘‘(C) $10,000 for each additional passenger accommodation between 1,001 and 1,500. 

‘‘(D) $5,000 for each additional passenger accommodation over 1,500. 

‘‘(2) MULTIPLE VESSELS.—If the owner or charterer is operating more than one vessel subject to this chapter, the amount 

of financial responsibility shall be based on the number of 

passenger accommodations on the vessel with the largest 

number of passenger accommodations. 

‘‘(c) AVAILABILITY TO PAY JUDGMENT.—The amount determined 

under subsection (b) shall be available to pay a judgment for damages (whether less than or more than $20,000) for death or injury 

to a passenger or other individual on a voyage to or from a port 

in the United States. 

‘‘(d) MEANS OF ESTABLISHING.—Financial responsibility under 

this section may be established by one or more of the following 

if acceptable to the Commission: 

‘‘(1) Insurance. 

‘‘(2) Surety bond issued by a bonding company authorized 

to do business in the United States. 

‘‘(3) Qualification as a self-insurer. 

‘‘(4) Other evidence of financial responsibility. 

‘‘§ 44104. Civil penalty 

‘‘A person that violates section 44102 or 44103 of this title 

is liable to the United States Government for a civil penalty of 

not more than $5,000, plus $200 for each passage sold, to be 

assessed by the Federal Maritime Commission. The Commission 

may remit or mitigate the penalty on terms the Commission considers proper. 

‘‘§ 44105. Refusal of clearance 

‘‘The Secretary of Homeland Security shall refuse the clearance 

required by section 60105 of this title, at the port or place of 

departure from the United States, of a vessel that is subject to 

this chapter and does not have evidence issued by the Federal 

Maritime Commission of compliance with sections 44102 and 44103 

of this title. 

‘‘§ 44106. Conduct of proceedings 

‘‘Part A of this subtitle applies to proceedings conducted by 

the Federal Maritime Commission under this chapter.’’.

SEC. 8. SUBTITLE V OF TITLE 46. 

(a) SUBTITLE ANALYSIS.—The analysis of subtitle V of title 

46, United States Code, is amended to read as follows: 

‘‘PART A—GENERAL

‘‘Chapter Sec. 

‘‘501. Policy, Studies, and Reports ................................................................ 50101

‘‘503. Administrative ......................................................................................... 50301

‘‘505. Other General Provisions ..................................................................... 50501

‘‘PART B—MERCHANT MARINE SERVICE

‘‘511. General ....................................................................................................... 51101
H. R. 1442—72

‘‘513. United States Merchant Marine Academy ........................................ 51301

‘‘515. State Maritime Academy Support Program ..................................... 51501

‘‘517. Other Support for Merchant Marine Training ................................ 51701

‘‘519. Merchant Marine Awards ..................................................................... 51901

‘‘521. Miscellaneous ........................................................................................... 52101

‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS

‘‘531. Maritime Security Fleet ........................................................................ 53101

‘‘533. Construction Reserve Funds ................................................................ 53301

‘‘535. Capital Construction Funds ................................................................. 53501

‘‘537. Loans and Guarantees ........................................................................... 53701

‘‘539. War Risk Insurance ................................................................................ 53901

‘‘PART D—PROMOTIONAL PROGRAMS

‘‘551. Coastwise Trade ...................................................................................... 55101

‘‘553. Passenger and Cargo Preferences ...................................................... 55301

‘‘555. Miscellaneous ........................................................................................... 55501

‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES

‘‘561. Restrictions on Transfers ..................................................................... 56101

‘‘563. Emergency Acquisition of Vessels ...................................................... 56301

‘‘565. Essential Vessels Affected by Neutrality Act ................................... 56501

‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

‘‘571. General Authority ................................................................................... 57101

‘‘573. Vessel Trade-In Program ...................................................................... 57301

‘‘575. Construction, Charter, and Sale of Vessels ...................................... 57501

‘‘PART G—RESTRICTIONS AND PENALTIES

‘‘581. Restrictions and Penalties ....................................................................58101’’.

(b) CHAPTERS PRECEDING CHAPTER 531.—Subtitle V of title 

46, United States Code, is amended by inserting after the subtitle 

analysis the following:

‘‘PART A—GENERAL

‘‘CHAPTER 501—POLICY, STUDIES, AND REPORTS

‘‘Sec. 

‘‘50101. Objectives and policy. 

‘‘50102. Survey of merchant marine. 

‘‘50103. Determinations of essential services. 

‘‘50104. Studies of general maritime problems. 

‘‘50105. Studies and cooperation relating to the construction of vessels. 

‘‘50106. Studies on the operation of vessels. 

‘‘50107. Studies on marine insurance. 

‘‘50108. Studies on cargo carriage and cargo containers. 

‘‘50109. Miscellaneous studies. 

‘‘50110. Securing preference to vessels of the United States. 

‘‘50111. Reports to Congress. 

‘‘50112. National Maritime Enhancement Institutes. 

‘‘50113. Use and performance reports by operators of vessels.

‘‘§ 50101. Objectives and policy 

‘‘(a) OBJECTIVES.—It is necessary for the national defense and 

the development of the domestic and foreign commerce of the United 

States that the United States have a merchant marine—

‘‘(1) sufficient to carry the waterborne domestic commerce 

and a substantial part of the waterborne export and import 
H. R. 1442—73

foreign commerce of the United States and to provide shipping 

service essential for maintaining the flow of the waterborne 

domestic and foreign commerce at all times; 

‘‘(2) capable of serving as a naval and military auxiliary 

in time of war or national emergency; 

‘‘(3) owned and operated as vessels of the United States 

by citizens of the United States; 

‘‘(4) composed of the best-equipped, safest, and most suitable types of vessels and manned with a trained and efficient 

citizen personnel; and 

‘‘(5) supplemented by efficient facilities for building and 

repairing vessels. 

‘‘(b) POLICY.—It is the policy of the United States to encourage 

and aid the development and maintenance of a merchant marine 

satisfying the objectives described in subsection (a). 

‘‘§ 50102. Survey of merchant marine 

‘‘(a) IN GENERAL.—The Secretary of Transportation shall survey 

the merchant marine of the United States to determine whether 

replacements and additions are required to carry out the objectives 

and policy of section 50101 of this title. The Secretary shall study, 

perfect, and adopt a long-range program for replacements and additions that will result, as soon as practicable, in—

‘‘(1) an adequate and well-balanced merchant fleet, 

including vessels of all types, that will provide shipping service 

essential for maintaining the flow of foreign commerce by vessels designed to be readily and quickly convertible into transport and supply vessels in a time of national emergency; 

‘‘(2) ownership and operation of the fleet by citizens of 

the United States insofar as practicable; 

‘‘(3) vessels designed to afford the best and most complete 

protection for passengers and crew against fire and all marine 

perils; and 

‘‘(4) an efficient capacity for building and repairing vessels 

in the United States with an adequate number of skilled personnel to provide an adequate mobilization base. 

‘‘(b) COOPERATION WITH SECRETARY OF NAVY.—In carrying out 

subsection (a)(1), the Secretary of Transportation shall cooperate 

closely with the Secretary of the Navy as to national defense 

requirements. 

‘‘§ 50103. Determinations of essential services 

‘‘(a) ESSENTIAL SERVICES, ROUTES, AND LINES.—

‘‘(1) IN GENERAL.—The Secretary of Transportation shall 

investigate, determine, and keep current records of the ocean 

services, routes, and lines from ports in the United States, 

or in the territories and possessions of the United States, 

to foreign markets, which the Secretary determines to be essential for the promotion, development, expansion, and maintenance of the foreign commerce of the United States. In making 

such a determination, the Secretary shall consider and give 

due weight to—

‘‘(A) the cost of maintaining each line; 

‘‘(B) the probability that a line cannot be maintained 

except at a heavy loss disproportionate to the benefit to 

foreign trade; 
H. R. 1442—74

‘‘(C) the number of voyages and types of vessels that 

should be employed in a line; 

‘‘(D) the intangible benefit of maintaining a line to 

the foreign commerce of the United States, the national 

defense, and other national requirements; and 

‘‘(E) any other facts and conditions a prudent business 

person would consider when dealing with the person’s own 

business. 

‘‘(2) SAINT LAWRENCE SEAWAY.—For purposes of paragraph 

(1), the Secretary shall establish services, routes, and lines 

that reflect the seasonal closing of the Saint Lawrence Seaway 

and provide for alternate routing of vessels through a different 

range of ports during that closing to maintain continuity of 

service on a year-round basis. 

‘‘(b) BULK CARGO CARRYING SERVICES.—The Secretary shall 

investigate, determine, and keep current records of the bulk cargo 

carrying services that should be provided by vessels of the United 

States (whether or not operating on particular services, routes, 

or lines) for the promotion, development, expansion, and maintenance of the foreign commerce of the United States and the national 

defense or other national requirements. 

‘‘(c) TYPES OF VESSELS.—The Secretary shall investigate, determine, and keep current records of the type, size, speed, method 

of propulsion, and other requirements of the vessels, including 

express-liner or super-liner vessels, that should be employed in—

‘‘(1) the services, routes, or lines described in subsection 

(a), and the frequency and regularity of the voyages of the 

vessels, with a view to furnishing adequate, regular, certain, 

and permanent service; and 

‘‘(2) the bulk cargo carrying services described in subsection 

(b). 

‘‘§ 50104. Studies of general maritime problems 

‘‘The Secretary of Transportation shall study all maritime problems arising in carrying out the policy in section 50101 of this 

title. 

‘‘§ 50105. Studies and cooperation relating to the construction of vessels 

‘‘(a) RELATIVE COSTS AND NEW DESIGNS.—The Secretary of 

Transportation shall investigate, determine, and keep current 

records of—

‘‘(1) the relative cost of construction of comparable vessels 

in the United States and in foreign countries; and 

‘‘(2) new designs, new methods of construction, and new 

types of equipment for vessels. 

‘‘(b) RULES, CLASSIFICATIONS, AND RATINGS.—The Secretary 

shall examine the rules under which vessels are constructed abroad 

and in the United States and the methods of classifying and rating 

the vessels. 

‘‘(c) COLLABORATION WITH OWNERS AND BUILDERS.—The Secretary shall collaborate with vessel owners and shipbuilders in 

developing plans for the economical construction of vessels and 

their propelling machinery, of most modern economical types, giving 

thorough consideration to all well-recognized means of propulsion 

and taking into account the benefits from standardized production 

where practicable and desirable. 
H. R. 1442—75

‘‘(d) EXPRESS-LINER AND SUPER-LINER VESSELS.—The Secretary 

shall study and cooperate with vessel owners in devising means 

by which there may be constructed, by or with the aid of the 

United States Government, express-liner or super-liner vessels comparable to those of other nations, especially with a view to their 

use in a national emergency, and the use of transoceanic aircraft 

service in connection with or in lieu of those vessels. 

‘‘§ 50106. Studies on the operation of vessels 

‘‘(a) RELATIVE COSTS.—The Secretary of Transportation shall 

investigate, determine, and keep current records of the relative 

cost of marine insurance, maintenance, repairs, wages and subsistence of officers and crews, and all other items of expense, in the 

operation of comparable vessels under the laws and regulations 

of the United States and those of the foreign countries whose 

vessels are substantial competitors of American vessels. 

‘‘(b) SHIPYARDS.—The Secretary shall investigate, determine, 

and keep current records of the number, location, and efficiency 

of shipyards in the United States. 

‘‘(c) NAVIGATION LAWS.—The Secretary shall examine the 

navigation laws and regulations of the United States and make 

such recommendations to Congress as the Secretary considers 

proper for the amendment, improvement, and revision of those 

laws and for the development of the merchant marine of the United 

States. 

‘‘§ 50107. Studies on marine insurance 

‘‘The Secretary of Transportation shall—

‘‘(1) examine into the subject of marine insurance, the 

number of companies in the United States, domestic and foreign, engaging in marine insurance, the extent of the insurance 

on hulls and cargoes placed or written in the United States, 

and the extent of reinsurance of American maritime risks in 

foreign companies; and 

‘‘(2) ascertain what steps may be necessary to develop 

an ample marine insurance system as an aid in the development 

of the merchant marine of the United States. 

‘‘§ 50108. Studies on cargo carriage and cargo containers 

‘‘(a) STUDIES.—The Secretary of Transportation shall study—

‘‘(1) the methods of encouraging the development and 

implementation of new concepts for the carriage of cargo in 

the domestic and foreign commerce of the United States; and 

‘‘(2) the economic and technological aspects of the use of 

cargo containers as a method of carrying out the policy in 

section 50101 of this title. 

‘‘(b) RESTRICTION.—In carrying out subsection (a) and the policy 

in section 50101 of this title, the United States Government may 

not give preference as between carriers based on the length, height, 

or width of cargo containers or the length, height, or width of 

cargo container cells. This restriction applies to all existing container vessels and any container vessel to be constructed or rebuilt. 

‘‘§ 50109. Miscellaneous studies 

‘‘(a) FOREIGN SUBSIDIES.—The Secretary of Transportation shall 

investigate, determine, and keep current records of the extent and 
H. R. 1442—76

character of the governmental aid and subsidies granted by foreign 

governments to their merchant marine. 

‘‘(b) LAWS APPLICABLE TO AIRCRAFT.—The Secretary shall investigate, determine, and keep current records of the provisions of 

law relating to shipping that should be made applicable to aircraft 

engaged in foreign commerce to further the policy in section 50101 

of this title, and any appropriate legislation in this regard. 

‘‘(c) AID FOR COTTON, COAL, LUMBER, AND CEMENT.—The Secretary shall investigate, determine, and keep current records of 

the advisability of enactment of suitable legislation authorizing 

the Secretary, in an economic or commercial emergency, to aid 

farmers and producers of cotton, coal, lumber, and cement in any 

section of the United States in the transportation and landing 

of their products in any foreign port, which products can be carried 

in dry-cargo vessels by reducing rates, by supplying additional 

tonnage to any American operator, or by operation of vessels directly 

by the Secretary, until the Secretary considers the special rate 

reduction and operation unnecessary for the benefit of those farmers 

and producers. 

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

Secretary shall investigate, determine, and keep current records 

of intercoastal and inland water transportation, including their 

relation to transportation by land and air. 

‘‘(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. 

‘‘§ 50110. Securing preference to vessels of the United States 

‘‘(a) POSSIBILITIES OF PROMOTING CARRIAGE.—The Secretary 

of Transportation shall investigate, determine, and keep current 

records of the possibilities of promoting the carriage of United 

States foreign trade in vessels of the United States. 

‘‘(b) INDUCEMENTS TO IMPORTERS AND EXPORTERS.—The Secretary shall study and cooperate with vessel owners in devising 

means by which the importers and exporters of the United States 

can be induced to give preference to vessels of the United States. 

‘‘(c) LIAISON WITH AGENCIES AND ORGANIZATIONS.—The Secretary shall establish and maintain liaison with such other agencies 

of the United States Government, and with such representative 

trade organizations throughout the United States, as may be concerned, directly or indirectly, with any movement of commodities 

in the waterborne export and import foreign commerce of the United 

States, for the purpose of securing preference to vessels of the 

United States in the shipment of those commodities. 

‘‘§ 50111. Reports to Congress 

‘‘(a) IN GENERAL.—Not later than April 1 of each year, the 

Secretary of Transportation shall submit a report to Congress. 
H. R. 1442—77

The report shall include, with respect to activities of the Secretary 

under this subtitle, the results of investigations, a summary of 

transactions, a statement of all expenditures and receipts, the purposes for which all expenditures were made, and any recommendations for legislation. 

‘‘(b) ADMINISTERED AND OVERSIGHT FUNDS.—The Secretary, in 

the report under subsection (a) and in the annual budget estimate 

for the Maritime Administration submitted to Congress, shall state 

separately the amount, source, intended use, and nature of any 

funds (other than funds appropriated to the Administration or 

to the Secretary of Transportation for use by the Administration) 

administered, or subject to oversight, by the Administration. 

‘‘(c) ADDITIONAL RECOMMENDATIONS FOR LEGISLATION.—The 

Secretary, from time to time, shall make recommendations to Congress for legislation the Secretary considers necessary to better 

achieve the objectives and policy of section 50101 of this title. 

‘‘§ 50112. National Maritime Enhancement Institutes 

‘‘(a) DESIGNATION.—The Secretary of Transportation may designate National Maritime Enhancement Institutes. 

‘‘(b) ACTIVITIES.—Activities undertaken by an institute may 

include—

‘‘(1) conducting research about methods to improve the 

performance of maritime industries; 

‘‘(2) enhancing the competitiveness of domestic maritime 

industries in international trade; 

‘‘(3) forecasting trends in maritime trade; 

‘‘(4) assessing technological advancements; 

‘‘(5) developing management initiatives and training; 

‘‘(6) analyzing economic and operational impacts of regulatory policies and international negotiations or agreements 

pending before international bodies; 

‘‘(7) assessing the compatibility of domestic maritime infrastructure systems with overseas transport systems; 

‘‘(8) fostering innovations in maritime transportation 

pricing; and 

‘‘(9) improving maritime economics and finance. 

‘‘(c) APPLICATION FOR DESIGNATION.—An institution seeking 

designation as a National Maritime Enhancement Institute shall 

submit an application under regulations prescribed by the Secretary. 

‘‘(d) CRITERIA FOR DESIGNATION.—The Secretary shall designate 

an institute under this section on the basis of the following criteria: 

‘‘(1) The demonstrated research and extension resources 

available to the applicant for carrying out the activities specified 

in subsection (b). 

‘‘(2) The ability of the applicant to provide leadership in 

making national and regional contributions to the solution of 

both long-range and immediate problems of the domestic maritime industry. 

‘‘(3) The existence of an established program of the 

applicant encompassing research and training directed to 

enhancing maritime industries. 

‘‘(4) The demonstrated ability of the applicant to assemble 

and evaluate pertinent information from national and international sources and to disseminate results of maritime 
H. R. 1442—78

industry research and educational programs through a continuing education program. 

‘‘(5) The qualification of the applicant as a nonprofit institution of higher learning. 

‘‘(e) FINANCIAL AWARDS.—The Secretary may make awards on 

an equal matching basis to an institute designated under subsection 

(a) from amounts appropriated. The aggregate annual amount of 

the Federal share of the awards by the Secretary may not exceed 

$500,000. 

‘‘(f) UNIVERSITY TRANSPORTATION RESEARCH FUNDS.—The Secretary may make a grant under section 5505 of title 49 to an 

institute designated under subsection (a) for maritime and maritime 

intermodal research under that section as if the institute were 

a university transportation center. In making a grant, the Secretary, 

through the Research and Innovative Technology Administration, 

shall advise the Maritime Administration on the availability of 

funds for the grants and consult with the Administration on making 

the grants. 

‘‘§ 50113. Use and performance reports by operators of vessels 

‘‘(a) FILING REQUIREMENT.—The Secretary of Transportation 

by regulation may require the operator of a vessel in the waterborne 

foreign commerce of the United States to file such report, account, 

record, or memorandum on the use and performance of the vessel 

as the Secretary considers desirable to assist in carrying out this 

subtitle. The report, account, record, or memorandum shall be 

signed and verified, and be filed at the times and in the manner, 

as provided by regulation. 

‘‘(b) CIVIL PENALTY.—An operator not filing a report, account, 

record, or memorandum required by the Secretary under this section 

is liable to the United States Government for a civil penalty of 

$50 for each day of the violation. A penalty imposed under this 

section on the operator of a vessel constitutes a lien on the vessel 

involved in the violation. A civil action in rem to enforce the 

lien may be brought in the district court of the United States 

for any district in which the vessel is found. The Secretary may 

remit or mitigate any penalty imposed under this section.

‘‘CHAPTER 503—ADMINISTRATIVE

‘‘Sec. 

‘‘50301. Vessel Operations Revolving Fund. 

‘‘50302. Port development. 

‘‘50303. Operating property and extending term of notes. 

‘‘50304. Sale and transfer of property. 

‘‘50305. Appointment of trustee or receiver and operation of vessels. 

‘‘50306. Requiring testimony and records in investigations.

‘‘§ 50301. Vessel Operations Revolving Fund 

‘‘(a) IN GENERAL.—There is a ‘Vessel Operations Revolving 

Fund’ for use by the Secretary of Transportation in carrying out 

duties and powers related to vessel operations, including charter, 

operation, maintenance, repair, reconditioning, and improvement 

of merchant vessels under the jurisdiction of the Secretary. The 

Fund has a working capital of $20,000,000, to remain available 

until expended. 

‘‘(b) RELATIONSHIP TO OTHER LAWS.—Notwithstanding any 

other law, rates for shipping services provided under the Fund 
H. R. 1442—79

shall be prescribed by the Secretary and the Fund shall be credited 

with receipts from vessel operations conducted under the Fund. 

Sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943 

(50 App. U.S.C. 1291(a), (c), 1293(c), 1294), apply to those operations 

and to seamen employed through general agents as employees 

of the United States Government. Notwithstanding any other law 

on the employment of persons by the Government, the seamen 

may be employed in accordance with customary commercial practices in the maritime industry. 

‘‘(c) ADVANCEMENTS.—With the approval of the Director of the 

Office of Management and Budget, the Secretary may advance 

amounts the Secretary considers necessary, but not more than 

2 percent of vessel operating expenses, from the Fund to the appropriation ‘Salaries and Expenses’ in carrying out duties and powers 

related to vessel operations, without regard to the limitations on 

amounts stated in that appropriation. 

‘‘(d) TRANSFERS.—The unexpended balances of working funds 

or of allocation accounts established after January 1, 1951, for 

the activities provided for in subsection (a), and receipts received 

from those activities, may be transferred to the Fund, which shall 

be available for the purposes of those working funds or allocation 

accounts. 

‘‘(e) LIMITATION.—

‘‘(1) IN GENERAL.—Amounts made available to the Secretary 

for maritime activities by this section or any other law may 

not be used to pay for a vessel described in paragraph (2) 

unless the compensation to be paid is computed under section 

56303 of this title as that section is interpreted by the Comptroller General. 

‘‘(2) APPLICABLE VESSELS.—Paragraph (1) applies to a 

vessel—

‘‘(A) the title to which is acquired by the Government 

by requisition or purchase; 

‘‘(B) the use of which is taken by requisition or agreement; or 

‘‘(C) lost while insured by the Government. 

‘‘(3) NONAPPLICABLE VESSELS.—Paragraph (1) does not 

apply to a vessel under a construction-differential subsidy contract. 

‘‘(f) AVAILABILITY FOR ADDITIONAL PURPOSES.—The Fund is 

available for—

‘‘(1) necessary expenses incurred in the protection, 

preservation, maintenance, acquisition, or use of vessels 

involved in mortgage foreclosure or forfeiture proceedings 

instituted by the Government, including payment of prior 

claims and liens, expenses of sale, or other related charges; 

‘‘(2) necessary expenses incident to the redelivery and layup, in the United States, of vessels chartered as of June 20, 

1956, under agreements not calling for their return to the 

Government; 

‘‘(3) the activation, repair, and deactivation of merchant 

vessels chartered for limited emergency purposes during fiscal 

year 1957 under the jurisdiction of the Secretary; and 

‘‘(4) payment of expenses of custody and maintenance of 

Government-owned vessels not in the National Defense Reserve 

Fleet. 
H. R. 1442—80

‘‘(g) EXPENSES AND RECEIPTS RELATED TO CHARTER OPERATIONS.—The Fund is available for expenses incurred in activating, 

repairing, and deactivating merchant vessels chartered under the 

jurisdiction of the Secretary. Receipts from charter operations of 

Government-owned vessels under the jurisdiction of the Secretary 

shall be credited to the Fund. 

‘‘§ 50302. Port development 

‘‘(a) GENERAL REQUIREMENTS.—With the objective of promoting, 

encouraging, and developing ports and transportation facilities in 

connection with water commerce over which the Secretary of 

Transportation has jurisdiction, the Secretary, in cooperation with 

the Secretary of the Army, shall—

‘‘(1) investigate territorial regions and zones tributary to 

ports, taking into consideration the economies of transportation 

by rail, water, and highway and the natural direction of the 

flow of commerce; 

‘‘(2) investigate the causes of congestion of commerce at 

ports and applicable remedies; 

‘‘(3) investigate the subject of water terminals, including 

the necessary docks, warehouses, and equipment, to devise 

and suggest the types most appropriate for different locations 

and for the most expeditious and economical transfer or interchange of passengers or property between water carriers and 

rail carriers; 

‘‘(4) consult with communities on the appropriate location 

and plan of construction of wharves, piers, and water terminals; 

‘‘(5) investigate the practicability and advantages of harbor, 

river, and port improvements in connection with foreign and 

coastwise trade; and 

‘‘(6) investigate any other matter that may tend to promote 

and encourage the use by vessels of ports adequate to care 

for the freight that naturally would pass through those ports. 

‘‘(b) SUBMISSION OF FINDINGS TO SURFACE TRANSPORTATION

BOARD.—After an investigation under subsection (a), if the Secretary of Transportation believes that the rates or practices of 

a rail carrier subject to the jurisdiction of the Surface Transportation Board are detrimental to the objective specified in subsection 

(a), or that new rates or practices, new or additional port terminal 

facilities, or affirmative action by a rail carrier is necessary to 

promote that objective, the Secretary may submit findings to the 

Board for action the Board considers appropriate under existing 

law. 

‘‘§ 50303. Operating property and extending term of notes 

‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation 

may—

‘‘(1) operate or lease docks, wharves, piers, or real property 

under the Secretary’s control; and 

‘‘(2) make extensions and accept renewals of—

‘‘(A) promissory notes and other evidences of indebtedness on property; and 

‘‘(B) mortgages and other contracts securing the property. 

‘‘(b) TERMS OF TRANSACTIONS.—A transaction under subsection 

(a) shall be on terms the Secretary considers necessary to carry 
H. R. 1442—81

out the purposes of this subtitle, but consistent with sound business 

practice. 

‘‘(c) AVAILABILITY OF AMOUNTS.—Amounts received by the Secretary from a transaction under this section are available for 

expenditure by the Secretary as provided in this subtitle. 

‘‘§ 50304. Sale and transfer of property 

‘‘(a) AUTHORITY TO SELL.—The Secretary of Transportation may 

sell property (other than vessels transferred under section 4 of 

the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 990)) on terms 

the Secretary considers appropriate. 

‘‘(b) TRANSFERS FROM MILITARY TO CIVILIAN CONTROL.—When 

the President considers it in the interest of the United States, 

the President may transfer to the Secretary of Transportation 

possession and control of property described in the second paragraph 

of section 17 of the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 

994), as originally enacted, that is possessed and controlled by 

the Secretary of a military department. 

‘‘(c) TRANSFERS FROM CIVILIAN TO MILITARY CONTROL.—When 

the President considers it necessary, the President by executive 

order may transfer to the Secretary of a military department possession and control of property described in section 17 of the Merchant 

Marine Act, 1920 (ch. 250, 41 Stat. 994), as originally enacted, 

that is possessed and controlled by the Secretary of Transportation. 

The President’s order shall state the need for the transfer and 

the period of the need. When the President decides that the need 

has ended, the possession and control shall revert to the Secretary 

of Transportation. The property may not be sold except as provided 

by law. 

‘‘§ 50305. Appointment of trustee or receiver and operation 

of vessels 

‘‘(a) APPOINTMENT OF TRUSTEES AND RECEIVERS.— ‘‘(1) APPOINTMENT OF SECRETARY.—In a proceeding in a 

court of the United States in which a trustee or receiver may 

be appointed for a corporation operating a vessel of United 

States registry between the United States and a foreign 

country, on which the United States Government holds a mortgage, the court may appoint the Secretary of Transportation 

as the sole trustee or receiver (subject to the direction of the 

court) if—

‘‘(A) the court finds that the appointment will—

‘‘(i) inure to the advantage of the estate and the 

parties in interest; and 

‘‘(ii) tend to carry out the purposes of this subtitle; 

and 

‘‘(B) the Secretary expressly consents to the appointment. 

‘‘(2) APPOINTMENT OF OTHER PERSON.—The appointment 

of another person as trustee or receiver without a hearing 

becomes effective when ratified by the Secretary, but the Secretary may demand a hearing. 

‘‘(b) OPERATION OF VESSELS.—

‘‘(1) IN GENERAL.—If the court is unwilling to allow the 

trustee or receiver to operate the vessel in foreign commerce 

without financial aid from the Government pending termination 

of the proceeding, and the Secretary certifies to the court that 
H. R. 1442—82

the continued operation of the vessel is essential to the foreign 

commerce of the United States and is reasonably calculated 

to carry out the purposes of this subtitle, the court may allow 

the Secretary to operate the vessel, either directly or through 

a managing agent or operator employed by the Secretary. The 

Secretary must agree to comply with terms imposed by the 

court sufficient to protect the parties in interest. The Secretary 

also must agree to pay all operating losses resulting from 

the operation. The operation shall be for the account of the 

trustee or receiver. 

‘‘(2) PAYMENT OF OPERATING LOSSES AND OTHER AMOUNTS.—

The Secretary has no claim against the corporation, its estate, 

or its assets for operating losses paid by the Secretary, but 

the Secretary may pay amounts for depreciation the Secretary 

considers reasonable and other amounts the court considers 

just. The payment of operating losses and the other amounts 

and compliance with terms imposed by the court shall be in 

satisfaction of any claim against the Secretary resulting from 

the operation of the vessel. 

‘‘(3) DEEMED OPERATION BY GOVERNMENT.—A vessel operated by the Secretary under this subsection is deemed to be 

a vessel operated by the United States under chapter 309 

of this title. 

‘‘§ 50306. Requiring testimony and records in investigations 

‘‘(a) IN GENERAL.—In conducting an investigation that the Secretary of Transportation considers necessary and proper to carry 

out this subtitle, the Secretary may administer oaths, take evidence, 

and subpoena persons to testify and produce documents relevant 

to the matter under investigation. Persons may be required to 

attend or produce documents from any place in the United States 

at any designated place of hearing. 

‘‘(b) FEES AND MILEAGE.—Persons subpoenaed by the Secretary 

under subsection (a) shall be paid the same fees and mileage 

paid to witnesses in the courts of the United States. 

‘‘(c) ENFORCEMENT OF SUBPOENAS.—If a person disobeys a subpoena issued under subsection (a), the Secretary may seek an 

order enforcing the subpoena from the district court of the United 

States for the district in which the person resides or does business. 

Process may be served in the judicial district in which the person 

resides or is found. The court may issue an order to obey the 

subpoena and punish a refusal to obey as a contempt of court.

‘‘CHAPTER 505—OTHER GENERAL PROVISIONS

‘‘Sec. 

‘‘50501. Entities deemed citizens of the United States. 

‘‘50502. Applicability to receivers, trustees, successors, and assigns. 

‘‘50503. Oceanographic research vessels. 

‘‘50504. Sailing school vessels.

‘‘§ 50501. Entities deemed citizens of the United States 

‘‘(a) IN GENERAL.—In this subtitle, a corporation, partnership, 

or association is deemed to be a citizen of the United States only 

if the controlling interest is owned by citizens of the United States. 

However, if the corporation, partnership, or association is operating 

a vessel in the coastwise trade, at least 75 percent of the interest 

must be owned by citizens of the United States. 
H. R. 1442—83

‘‘(b) ADDITIONAL REQUIREMENTS FOR CORPORATIONS.—In this 

subtitle, a corporation is deemed to be a citizen of the United 

States only if, in addition to satisfying the requirements in subsection (a)—

‘‘(1) it is incorporated under the laws of the United States 

or a State; 

‘‘(2) its chief executive officer, by whatever title, and the 

chairman of its board of directors are citizens of the United 

States; and 

‘‘(3) no more of its directors are noncitizens than a minority 

of the number necessary to constitute a quorum. 

‘‘(c) DETERMINATION OF CONTROLLING CORPORATE INTEREST.—

The controlling interest in a corporation is owned by citizens of 

the United States under subsection (a) only if—

‘‘(1) title to the majority of the stock in the corporation 

is vested in citizens of the United States free from any trust 

or fiduciary obligation in favor of a person not a citizen of 

the United States; 

‘‘(2) the majority of the voting power in the corporation 

is vested in citizens of the United States; 

‘‘(3) there is no contract or understanding by which the 

majority of the voting power in the corporation may be exercised, directly or indirectly, in behalf of a person not a citizen 

of the United States; and 

‘‘(4) there is no other means by which control of the corporation is given to or permitted to be exercised by a person not 

a citizen of the United States. 

‘‘(d) DETERMINATION OF 75 PERCENT CORPORATE INTEREST.—

At least 75 percent of the interest in a corporation is owned by 

citizens of the United States under subsection (a) only if—

‘‘(1) title to at least 75 percent of the stock in the corporation is vested in citizens of the United States free from any 

trust or fiduciary obligation in favor of a person not a citizen 

of the United States; 

‘‘(2) at least 75 percent of the voting power in the corporation is vested in citizens of the United States; 

‘‘(3) there is no contract or understanding by which more 

than 25 percent of the voting power in the corporation may 

be exercised, directly or indirectly, in behalf of a person not 

a citizen of the United States; and 

‘‘(4) there is no other means by which control of more 

than 25 percent of any interest in the corporation is given 

to or permitted to be exercised by a person not a citizen of 

the United States. 

‘‘§ 50502. Applicability to receivers, trustees, successors, and 

assigns 

‘‘This subtitle applies to receivers, trustees, successors, and 

assigns of any person to whom this subtitle applies. 

‘‘§ 50503. Oceanographic research vessels 

‘‘An oceanographic research vessel (as defined in section 2101 

of this title) is deemed not to be engaged in trade or commerce. 
H. R. 1442—84

‘‘§ 50504. Sailing school vessels 

‘‘(a) DEFINITIONS.—In this section, the terms ‘sailing school 

instructor’, ‘sailing school student’, and ‘sailing school vessel’ have 

the meaning given those terms in section 2101 of this title. 

‘‘(b) NOT SEAMEN.—A sailing school student or sailing school 

instructor is deemed not to be a seaman under—

‘‘(1) parts B, F, and G of subtitle II of this title; or 

‘‘(2) the maritime law doctrines of maintenance and cure 

or warranty of seaworthiness. 

‘‘(c) NOT MERCHANT VESSEL OR ENGAGED IN TRADE OR COMMERCE.—A sailing school vessel is deemed not to be—

‘‘(1) a merchant vessel under section 11101(a)–(c) of this 

title; or 

‘‘(2) a vessel engaged in trade or commerce. 

‘‘(d) EVIDENCE OF FINANCIAL RESPONSIBILITY.—The owner or 

charterer of a sailing school vessel shall maintain evidence of financial responsibility to meet liability for death or injury to sailing 

school students and sailing school instructors on a voyage on the 

vessel. The amount of financial responsibility shall be at least 

$50,000 for each student and instructor. Financial responsibility 

under this subsection may be evidenced by insurance or other 

adequate financial resources.

‘‘PART B—MERCHANT MARINE SERVICE

‘‘CHAPTER 511—GENERAL

‘‘Sec. 

‘‘51101. Policy. 

‘‘51102. Definitions. 

‘‘51103. General authority of Secretary of Transportation. 

‘‘51104. General authority of Secretary of the Navy.

‘‘§ 51101. Policy 

‘‘It is the policy of the United States that merchant marine 

vessels of the United States should be operated by highly trained 

and efficient citizens of the United States and that the United 

States Navy and the merchant marine of the United States should 

work closely together to promote the maximum integration of the 

total seapower forces of the United States. 

‘‘§ 51102. Definitions 

‘‘In this part: 

‘‘(1) ACADEMY.—The term ‘Academy’ means the United 

States Merchant Marine Academy located at Kings Point, New 

York, and maintained under chapter 513 of this title. 

‘‘(2) COST OF EDUCATION PROVIDED.—The term ‘cost of education provided’ means the financial costs incurred by the 

United States Government for providing training or financial 

assistance to students at the Academy and the State maritime 

academies, including direct financial assistance, room, board, 

classroom academics, and other training activities. 

‘‘(3) MERCHANT MARINE OFFICER.—The term ‘merchant 

marine officer’ means an individual issued a license by the 

Coast Guard authorizing service as—

‘‘(A) a master, mate, or pilot on a documented vessel 

that—
H. R. 1442—85

‘‘(i) is of at least 1,000 gross tons as 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; and 

‘‘(ii) operates on the oceans or the Great Lakes; 

or 

‘‘(B) an engineer officer on a documented vessel propelled by machinery of at least 4,000 horsepower. 

‘‘(4) STATE MARITIME ACADEMY.—The term ‘State maritime 

academy’ means—

‘‘(A) a State maritime academy or college sponsored 

by a State and assisted under chapter 515 of this title; 

and 

‘‘(B) a regional maritime academy or college sponsored 

by a group of States and assisted under chapter 515 of 

this title. 

‘‘§ 51103. General authority of Secretary of Transportation 

‘‘(a) EDUCATION AND TRAINING.—The Secretary of Transportation may provide for the education and training of citizens of 

the United States for the safe and efficient operation of the merchant marine of the United States at all times, including operation 

as a naval and military auxiliary in time of war or national emergency. 

‘‘(b) SURPLUS PROPERTY FOR INSTRUCTIONAL PURPOSES.—

‘‘(1) IN GENERAL.—The Secretary may cooperate with and 

assist the institutions named in paragraph (2) by making vessels, shipboard equipment, and other marine equipment, owned 

by the United States Government and determined to be excess 

or surplus, available to those institutions for instructional purposes, by gift, loan, sale, lease, or charter on terms the Secretary 

considers appropriate. 

‘‘(2) INSTITUTIONS.—The institutions referred to in paragraph (1) are—

‘‘(A) the United States Merchant Marine Academy; 

‘‘(B) a State maritime academy; and 

‘‘(C) a nonprofit training institution jointly approved 

by the Secretary of Transportation and the Secretary of 

the department in which the Coast Guard is operating 

as offering training courses that meet Federal regulations 

for maritime training. 

‘‘(c) ASSISTANCE FROM OTHER AGENCIES.—

‘‘(1) IN GENERAL.—The Secretary of Transportation may 

secure directly from an agency, on a reimbursable basis, 

information, facilities, and equipment necessary to carry out 

this part. 

‘‘(2) DETAILING PERSONNEL.—At the request of the Secretary, the head of an agency (including a military department) 

may detail, on a reimbursable basis, personnel from the agency 

to the Secretary to assist in carrying out this part. 

‘‘(d) ACADEMY PERSONNEL.—To carry out this part, the Secretary may—

‘‘(1) employ an individual as a professor, lecturer, or 

instructor at the Academy, without regard to the provisions 

of title 5 governing appointments in the competitive service; 

and 
H. R. 1442—86

‘‘(2) pay the individual without regard to chapter 51 and 

subchapter III of chapter 53 of title 5. 

‘‘§ 51104. General authority of Secretary of the Navy 

‘‘The Secretary of the Navy, in cooperation with the Maritime 

Administrator and the head of each State maritime academy, shall 

ensure that—

‘‘(1) the training of future merchant marine officers at 

the United States Merchant Marine Academy and at State 

maritime academies includes programs for naval science 

training in the operation of merchant vessels as a naval and 

military auxiliary; and 

‘‘(2) naval officer training programs for future officers, 

insofar as possible, are maintained at designated maritime 

academies consistent with Navy standards and needs. 

‘‘CHAPTER 513—UNITED STATES MERCHANT MARINE 

ACADEMY

‘‘Sec. 

‘‘51301. Maintenance of the Academy. 

‘‘51302. Nomination and competitive appointment of cadets. 

‘‘51303. Non-competitive appointments. 

‘‘51304. Additional appointments from particular areas. 

‘‘51305. Prohibited basis for appointment. 

‘‘51306. Cadet commitment agreements. 

‘‘51307. Places of training. 

‘‘51308. Uniforms, textbooks, and transportation allowances. 

‘‘51309. Academic degree. 

‘‘51310. Deferment of service obligation under cadet commitment agreements. 

‘‘51311. Midshipman status in the Naval Reserve. 

‘‘51312. Board of Visitors. 

‘‘51313. Advisory Board. 

‘‘51314. Limitation on charges and fees for attendance.

‘‘§ 51301. Maintenance of the Academy 

‘‘The Secretary of Transportation shall maintain the United 

States Merchant Marine Academy to provide instruction to individuals to prepare them for service in the merchant marine of the 

United States. 

‘‘§ 51302. Nomination and competitive appointment of cadets 

‘‘(a) REQUIREMENTS.—An individual may be nominated for a 

competitive appointment as a cadet at the United States Merchant 

Marine Academy only if the individual—

‘‘(1) is a citizen or national of the United States; and 

‘‘(2) meets the minimum requirements that the Secretary 

of Transportation shall establish. 

‘‘(b) NOMINATORS.—Nominations for competitive appointments 

for the positions allocated under subsection (c) may be made as 

follows: 

‘‘(1) A Senator may nominate residents of the State represented by that Senator. 

‘‘(2) A Member of the House of Representatives may nominate residents of the State in which the congressional district 

represented by that Member is located. 

‘‘(3) A Delegate to the House of Representatives from the 

District of Columbia, the Virgin Islands, Guam, or American 

Samoa may nominate residents of the jurisdiction represented 

by that Delegate. 
H. R. 1442—87

‘‘(4) The Resident Commissioner to the United States from 

Puerto Rico may nominate residents of Puerto Rico. 

‘‘(5) The Governor of the Northern Mariana Islands may 

nominate residents of the Northern Mariana Islands. 

‘‘(6) The Panama Canal Commission may nominate—

‘‘(A) residents, or sons or daughters of residents, of 

an area or installation in Panama and made available 

to the United States under the Panama Canal Treaty of 

1977, the agreements relating to and implementing that 

Treaty, signed September 7, 1977, and the Agreement 

Between the United States of America and the Republic 

of Panama Concerning Air Traffic Control and Related 

Services, concluded January 8, 1979; and 

‘‘(B) sons or daughters of personnel of the United States 

Government and the Panama Canal Commission residing 

in Panama. 

‘‘(c) ALLOCATION OF POSITIONS.—Positions for competitive 

appointments shall be allocated each year as follows: 

‘‘(1) Positions shall be allocated for residents of each State 

nominated by the Members of Congress from that State in 

proportion to the representation in Congress from that State. 

‘‘(2) Four positions shall be allocated for residents of the 

District of Columbia nominated by the Delegate to the House 

of Representatives from the District of Columbia. 

‘‘(3) One position each shall be allocated for residents of 

the Virgin Islands, Guam, and American Samoa nominated 

by the Delegates to the House of Representatives from the 

Virgin Islands, Guam, and American Samoa, respectively. 

‘‘(4) One position shall be allocated for a resident of Puerto 

Rico nominated by the Resident Commissioner to the United 

States from Puerto Rico. 

‘‘(5) One position shall be allocated for a resident of the 

Northern Mariana Islands nominated by the Governor of the 

Northern Mariana Islands. 

‘‘(6) Two positions shall be allocated for individuals nominated by the Panama Canal Commission. 

‘‘(d) COMPETITIVE SYSTEM FOR APPOINTMENT.—

‘‘(1) ESTABLISHMENT OF SYSTEM.—The Secretary shall 

establish a competitive system for selecting individuals nominated under subsection (b) to fill the positions allocated under 

subsection (c). The system must determine the relative merit 

of each individual based on competitive examinations, an 

assessment of the individual’s academic background, and other 

effective indicators of motivation and probability of successful 

completion of training at the Academy. 

‘‘(2) APPOINTMENTS BY JURISDICTION.—The Secretary shall 

appoint individuals to fill the positions allocated under subsection (c) for each jurisdiction in the order of merit of the 

individuals nominated from that jurisdiction. 

‘‘(3) REMAINING UNFILLED POSITIONS.—If positions remain 

unfilled after the appointments are made under paragraph 

(2), the Secretary shall appoint individuals to fill the positions 

in the order of merit of the remaining individuals nominated 

from all jurisdictions. 
H. R. 1442—88

‘‘§ 51303. Non-competitive appointments 

‘‘The Secretary of Transportation may appoint each year without competition as cadets at the United States Merchant Marine 

Academy not more than 40 qualified individuals with qualities 

the Secretary considers to be of special value to the Academy. 

In making these appointments, the Secretary shall try to achieve 

a national demographic balance at the Academy. 

‘‘§ 51304. Additional appointments from particular areas 

‘‘(a) OTHER COUNTRIES IN WESTERN HEMISPHERE.—The President may appoint individuals from countries in the Western Hemisphere other than the United States to receive instruction at the 

United States Merchant Marine Academy. Not more than 12 

individuals may receive instruction under this subsection at the 

same time, and not more than 2 individuals from the same country 

may receive instruction under this subsection at the same time. 

‘‘(b) OTHER COUNTRIES GENERALLY.—

‘‘(1) APPOINTMENT.—The Secretary of Transportation, with 

the approval of the Secretary of State, may appoint individuals 

from countries other than the United States to receive instruction at the Academy. Not more than 30 individuals may receive 

instruction under this subsection at the same time. 

‘‘(2) REIMBURSEMENT.—The Secretary of Transportation 

shall ensure that the country from which an individual comes 

under this subsection will reimburse the Secretary for the 

cost (as determined by the Secretary) of the instruction and 

allowances received by the individual. 

‘‘(c) PANAMA.—

‘‘(1) APPOINTMENT.—The Secretary of Transportation, with 

the approval of the Secretary of State, may appoint individuals 

from Panama to receive instruction at the Academy. Individuals 

appointed under this subsection are in addition to those 

appointed under any other provision of this chapter. 

‘‘(2) REIMBURSEMENT.—The Secretary of Transportation 

shall be reimbursed for the cost (as determined by the Secretary) of the instruction and allowances received by an individual appointed under this subsection. 

‘‘(d) ALLOWANCES AND REGULATIONS.—Individuals receiving 

instruction under this section are entitled to the same allowances 

and are subject to the same regulations on admission, attendance, 

discipline, resignation, discharge, dismissal, and graduation, as 

cadets at the Academy appointed from the United States. 

‘‘§ 51305. Prohibited basis for appointment 

‘‘Preference may not be given to an individual for appointment 

as a cadet at the United States Merchant Marine Academy because 

one or more members of the individual’s immediate family are 

alumni of the Academy. 

‘‘§ 51306. Cadet commitment agreements 

‘‘(a) AGREEMENT REQUIREMENTS.—A citizen of the United States 

appointed as a cadet at the United States Merchant Marine 

Academy must sign, as a condition of the appointment, an agreement to—

‘‘(1) complete the course of instruction at the Academy; 
H. R. 1442—89

‘‘(2) fulfill the requirements for a license as an officer 

in the merchant marine of the United States before graduation 

from the Academy; 

‘‘(3) maintain a valid license as an officer in the merchant 

marine of the United States for at least 6 years after graduation 

from the Academy, accompanied by the appropriate national 

and international endorsements and certification required by 

the Coast Guard for service aboard vessels on domestic and 

international voyages; 

‘‘(4) apply for, and accept if tendered, an appointment as 

a commissioned officer in the Naval Reserve (including the 

Merchant Marine Reserve, Naval Reserve), the Coast Guard 

Reserve, or any other reserve unit of an armed force of the 

United States, and, if tendered the appointment, to serve for 

at least 6 years after graduation from the Academy; 

‘‘(5) serve the foreign and domestic commerce and the 

national defense of the United States for at least 5 years 

after graduation from the Academy—

‘‘(A) as a merchant marine officer on a documented 

vessel or a vessel owned and operated by the United States 

Government or by a State; 

‘‘(B) as an employee in a United States maritimerelated industry, profession, or marine science (as determined by the Secretary of Transportation), if the Secretary 

determines that service under subparagraph (A) is not 

available to the individual; 

‘‘(C) as a commissioned officer on active duty in an 

armed force of the United States, as a commissioned officer 

in the National Oceanic and Atmospheric Administration, 

or in other maritime-related Federal employment which 

serves the national security interests of the United States, 

as determined by the Secretary; or 

‘‘(D) by a combination of the service alternatives 

referred to in subparagraphs (A)–(C); and 

‘‘(6) report to the Secretary on compliance with this subsection. 

‘‘(b) FAILURE TO COMPLETE COURSE OF INSTRUCTION.— ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines that an individual who has attended the Academy for 

at least 2 years has failed to fulfill the part of the agreement 

described in subsection (a)(1), the individual may be ordered 

by the Secretary of Defense to serve on active duty in one 

of the armed forces of the United States for a period of not 

more than 2 years. In cases of hardship as determined by 

the Secretary of Transportation, the Secretary of Transportation 

may waive this paragraph in whole or in part. 

‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is 

unable or unwilling to order an individual to serve on active 

duty under paragraph (1), or if the Secretary of Transportation 

determines that reimbursement of the cost of education provided would better serve the interests of the United States, 

the Secretary of Transportation may recover from the individual 

the cost of education provided by the Government. 

‘‘(c) FAILURE TO CARRY OUT OTHER REQUIREMENTS.— ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines that an individual has failed to fulfill any part of the 

agreement described in subsection (a)(2)–(6), the individual may 
H. R. 1442—90

be ordered to serve on active duty for a period of at least 

3 years but not more than the unexpired period (as determined 

by the Secretary) of the service required by subsection (a)(5). 

The Secretary of Transportation, in consultation with the Secretary of Defense, shall determine in which service the individual shall serve. In cases of hardship as determined by the 

Secretary of Transportation, the Secretary of Transportation 

may waive this paragraph in whole or in part. 

‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is 

unable or unwilling to order an individual to serve on active 

duty under paragraph (1), or if the Secretary of Transportation 

determines that reimbursement of the cost of education provided would better serve the interests of the United States, 

the Secretary of Transportation may recover from the individual 

the cost of education provided. The Secretary may reduce the 

amount to be recovered to reflect partial performance of service 

obligations and other factors the Secretary determines merit 

a reduction. 

‘‘(d) ACTIONS TO RECOVER COST.—To aid in the recovery of 

the cost of education provided by the Government under a commitment agreement under this section, the Secretary of Transportation 

may—

‘‘(1) request the Attorney General to bring a civil action 

against the individual; and 

‘‘(2) make use of the Federal debt collection procedures 

in chapter 176 of title 28 or other applicable administrative 

remedies. 

‘‘§ 51307. Places of training 

‘‘The Secretary of Transportation may provide for the training 

of cadets at the United States Merchant Marine Academy—

‘‘(1) on vessels owned or subsidized by the United States 

Government; 

‘‘(2) on other documented vessels, with the permission of 

the owner; and 

‘‘(3) in shipyards or plants and with industrial or educational organizations. 

‘‘§ 51308. Uniforms, textbooks, and transportation allowances 

‘‘The Secretary of Transportation shall provide cadets at the 

United States Merchant Marine Academy—

‘‘(1) all required uniforms and textbooks; and 

‘‘(2) allowances for transportation (including reimbursement of traveling expenses) when traveling under orders as 

a cadet. 

‘‘§ 51309. Academic degree 

‘‘(a) BACHELOR’S DEGREE.—

‘‘(1) IN GENERAL.—The Superintendent of the United States 

Merchant Marine Academy may confer the degree of bachelor 

of science on an individual who—

‘‘(A) has met the conditions prescribed by the Secretary 

of Transportation; and 

‘‘(B) if a citizen of the United States, has passed the 

examination for a merchant marine officer’s license. 
H. R. 1442—91

‘‘(2) EFFECT OF PHYSICAL DISQUALIFICATION.—An individual 

not allowed to take the examination for a merchant marine 

officer’s license only because of physical disqualification may 

not be denied a degree for not taking the examination. 

‘‘(b) MASTER’S DEGREE.—The Superintendent of the Academy 

may confer a master’s degree on an individual who has met the 

conditions prescribed by the Secretary. A master’s degree program 

may be funded through non-appropriated funds. To maintain the 

appropriate academic standards, the program shall be accredited 

by the appropriate accreditation body. The Secretary may prescribe 

regulations necessary to administer such a program. 

‘‘(c) GRADUATION NOT ENTITLEMENT TO HOLD LICENSE.— Graduation from the Academy does not entitle an individual to 

hold a license authorizing service on a merchant vessel. 

‘‘§ 51310. Deferment of service obligation under cadet 

commitment agreements 

‘‘The Secretary of Transportation may defer the service commitment of an individual under section 51306(a)(5) of this title (as 

specified in the cadet commitment agreement) for not more than 

2 years if the individual is engaged in a graduate course of study 

approved by the Secretary. However, deferment of service as a 

commissioned officer under section 51306(a)(5) must be approved 

by the Secretary of the military department that has jurisdiction 

over the service or by the Secretary of Commerce for service with 

the National Oceanic and Atmospheric Administration. 

‘‘§ 51311. Midshipman status in the Naval Reserve 

‘‘(a) APPLICATION REQUIREMENT.—Before being appointed as 

a cadet at the United States Merchant Marine Academy, a citizen 

of the United States must agree to apply for midshipman status 

in the Naval Reserve (including the Merchant Marine Reserve, 

Naval Reserve). 

‘‘(b) APPOINTMENT.—

‘‘(1) IN GENERAL.—A citizen of the United States appointed 

as a cadet at the Academy shall be appointed by the Secretary 

of the Navy as a midshipman in the Naval Reserve (including 

the Merchant Marine Reserve, Naval Reserve). 

‘‘(2) RIGHTS AND PRIVILEGES.—The Secretary of the Navy 

shall provide for cadets of the Academy who are midshipmen 

in the United States Naval Reserve to be—

‘‘(A) issued an identification card (referred to as a 

‘military ID card’); and 

‘‘(B) entitled to all rights and privileges in accordance 

with the same eligibility criteria as apply to other members 

of the Ready Reserve of the reserve components of the 

armed forces. 

‘‘(3) COORDINATION.—The Secretary of the Navy shall carry 

out paragraphs (1) and (2) in coordination with the Secretary 

of Transportation. 

‘‘§ 51312. Board of Visitors 

‘‘(a) IN GENERAL.—A Board of Visitors to the United States 

Merchant Marine Academy shall be established, for a term of 2 

years commencing at the beginning of each Congress, to visit the 

Academy annually on a date determined by the Secretary of 
H. R. 1442—92

Transportation and to make recommendations on the operation 

of the Academy. 

‘‘(b) APPOINTMENT.—

‘‘(1) IN GENERAL.—The Board shall be composed of—

‘‘(A) 2 Senators appointed by the chairman of the Committee on Commerce, Science, and Transportation of the 

Senate; 

‘‘(B) 3 Members of the House of Representatives 

appointed by the chairman of the Committee on Armed 

Services of the House of Representatives; 

‘‘(C) 1 Senator appointed by the Vice President; 

‘‘(D) 2 Members of the House of Representatives 

appointed by the Speaker of the House of Representatives; 

and 

‘‘(E) the chairmen of the Committee on Commerce, 

Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives, 

as ex officio members. 

‘‘(2) SUBSTITUTE APPOINTMENT.—If an appointed member 

of the Board is unable to visit the Academy as provided in 

subsection (a), another individual may be appointed as a substitute in the manner provided in paragraph (1). 

‘‘(c) STAFF.—The chairmen of the Committee on Commerce, 

Science, and Transportation of the Senate and the Committee on 

Armed Services of the House of Representatives may designate 

staff members of their committees to serve without reimbursement 

as staff for the Board. 

‘‘(d) TRAVEL EXPENSES.—When serving away from home or 

regular place of business, a member of the Board or a staff member 

designated under subsection (c) shall be allowed travel expenses, 

including per diem in lieu of subsistence, as authorized by section 

5703 of title 5. 

‘‘§ 51313. Advisory Board 

‘‘(a) IN GENERAL.—An Advisory Board to the United States 

Merchant Marine Academy shall be established to visit the Academy 

at least once during each academic year, for the purpose of examining the course of instruction and management of the Academy 

and advising the Maritime Administrator and the Superintendent 

of the Academy. 

‘‘(b) APPOINTMENT AND TERMS.—The Board shall be composed 

of not more than 7 individuals appointed by the Secretary of 

Transportation. The individuals must be distinguished in education 

and other fields related to the Academy. Members of the Board 

shall be appointed for terms of not more than 3 years and may 

be reappointed. The Secretary shall designate one of the members 

as chairman. 

‘‘(c) TRAVEL EXPENSES.—When serving away from home or regular place of business, a member of the Board shall be allowed 

travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5. 

‘‘(d) RELATIONSHIP TO OTHER LAW.—The Federal Advisory Committee Act (5 App. U.S.C.) does not apply to the Board. 

‘‘§ 51314. Limitation on charges and fees for attendance 

‘‘(a) PROHIBITION.—Except as provided in subsection (b), no 

charge or fee for tuition, room, or board for attendance at the 
H. R. 1442—93

United States Merchant Marine Academy may be imposed unless 

the charge or fee is specifically authorized by a law enacted after 

October 5, 1994. 

‘‘(b) EXCEPTION.—The prohibition specified in subsection (a) 

does not apply with respect to any item or service provided to 

cadets for which a charge or fee is imposed as of October 5, 1994. 

The Secretary of Transportation shall notify Congress of any change 

made by the Academy in the amount of a charge or fee authorized 

under this subsection. 

‘‘CHAPTER 515—STATE MARITIME ACADEMY SUPPORT 

PROGRAM

‘‘Sec. 

‘‘51501. General support program. 

‘‘51502. Detailing of personnel. 

‘‘51503. Regional maritime academies. 

‘‘51504. Use of training vessels. 

‘‘51505. Annual payments for maintenance and support. 

‘‘51506. Conditions to receiving payments and use of vessels. 

‘‘51507. Places of training. 

‘‘51508. Allowances for students. 

‘‘51509. Student incentive payment agreements. 

‘‘51510. Deferment of service obligation under student incentive payment agreements. 

‘‘51511. Midshipman status in the Naval Reserve.

‘‘§ 51501. General support program 

‘‘(a) ASSISTANCE TO STATE MARITIME ACADEMIES.—The Secretary of Transportation shall cooperate with and assist State maritime academies in providing instruction to individuals to prepare 

them for service in the merchant marine of the United States. 

‘‘(b) COURSE DEVELOPMENT.—The Secretary shall provide to 

each State maritime academy guidance and assistance in developing 

courses on the operation and maintenance of new vessels, on equipment, and on innovations being introduced to the merchant marine 

of the United States. 

‘‘§ 51502. Detailing of personnel 

‘‘At the request of the Governor of a State, the President 

may detail, without reimbursement, personnel of the Navy, the 

Coast Guard, and the Maritime Service to a State maritime 

academy to serve as a superintendent, professor, lecturer, or 

instructor at the academy. 

‘‘§ 51503. Regional maritime academies 

‘‘The Governors of the States cooperating to sponsor a regional 

maritime academy shall designate in writing one of those States 

to conduct the affairs of that academy. A regional maritime academy 

is eligible for assistance from the United States Government on 

the same basis as a State maritime academy sponsored by a single 

State. 

‘‘§ 51504. Use of training vessels 

‘‘(a) APPLICATIONS TO USE VESSELS.—The Governor of a State 

sponsoring a State maritime academy (or the Governor of the State 

designated to conduct the affairs of a regional maritime academy) 

may apply in writing to the Secretary of Transportation to obtain 

the use of a training vessel for the academy. A vessel provided 

under this section remains the property of the United States 

Government. 
H. R. 1442—94

‘‘(b) GENERAL AUTHORITY.—Subject to subsection (c), the Secretary may provide to a State maritime academy, for use as a 

training vessel, a suitable vessel under the control of the Secretary 

or made available to the Secretary under subsection (e). If a suitable 

vessel is not available, the Secretary may build and provide a 

suitable vessel. 

‘‘(c) APPROVAL REQUIREMENTS.—The Secretary may provide a 

vessel under this section only if—

‘‘(1) an application has been made under subsection (a); 

‘‘(2) the State maritime academy satisfies section 51506(a) 

of this title; and 

‘‘(3) a suitable port will be available for the safe mooring 

of the vessel while the academy is using the vessel. 

‘‘(d) PREPARATION AND MAINTENANCE.—A vessel provided under 

this section shall be—

‘‘(1) repaired, reconditioned, and equipped (with all apparel, 

charts, books, and instruments of navigation) as necessary for 

use as a training vessel; and 

‘‘(2) maintained in good repair by the Secretary. 

‘‘(e) AGENCY VESSELS.—An agency may provide to the Secretary, 

for use by a State maritime academy, a vessel (including equipment) 

that—

‘‘(1) is suitable for training purposes; and 

‘‘(2) can be provided without detriment to the service to 

which the vessel is assigned. 

‘‘(f) FUEL COSTS.—The Secretary may pay to a State maritime 

academy the costs of fuel used by a vessel provided under this 

section while used for training. 

‘‘(g) REMOVING VESSELS FROM SERVICE AND VESSEL SHARING.—

The Secretary may not—

‘‘(1) take a vessel, currently in use as a training vessel 

under this section, out of service to implement an alternative 

program (including vessel sharing) unless the vessel is 

incapable of being maintained in good repair as required by 

subsection (d); or 

‘‘(2) implement a program requiring a State maritime 

academy to share its training vessel with another State maritime academy, except with the express consent of Congress. 

‘‘§ 51505. Annual payments for maintenance and support 

‘‘(a) PAYMENT AGREEMENTS.—The Secretary of Transportation 

may make an agreement (effective for not more than 4 years) 

with the following academies to provide annual payments to those 

academies for their maintenance and support: 

‘‘(1) One State maritime academy in each State that satisfies section 51506(a) of this title. 

‘‘(2) Each regional maritime academy that satisfies section 

51506(a) of this title. 

‘‘(b) PAYMENTS.—

‘‘(1) IN GENERAL.—Subject to paragraph (2), an annual payment to an academy under subsection (a) shall be at least 

equal to the amount given to the academy for its maintenance 

and support by the State in which it is located, or, for a 

regional maritime academy, by all States cooperating to sponsor 

the academy. 
H. R. 1442—95

‘‘(2) MAXIMUM.—The amount under paragraph (1) may not 

be more than $25,000. However, if the academy satisfies section 

51506(b) of this title, the amount shall be—

‘‘(A) $100,000 for a State maritime academy; and 

‘‘(B) $200,000 for a regional maritime academy. 

‘‘§ 51506. Conditions to receiving payments and use of vessels 

‘‘(a) GENERAL CONDITIONS.—As conditions of receiving an 

annual payment or the use of a vessel under this chapter, a State 

maritime academy must—

‘‘(1) provide courses of instruction on navigation, marine 

engineering (including steam and diesel propulsion), the operation and maintenance of new vessels and equipment, and 

innovations being introduced to the merchant marine of the 

United States; 

‘‘(2) agree in writing to conform to the standards for 

courses, training facilities, admissions, and instruction that 

the Secretary of Transportation may establish after consultation 

with the superintendents of State maritime academies; and 

‘‘(3) agree in writing to require, as a condition for graduation, that each individual who is a citizen of the United States 

and who is attending the academy in a merchant marine officer 

preparation program pass the examination required for the 

issuance of a license under section 7101 of this title. 

‘‘(b) ADDITIONAL CONDITION TO PAYMENTS OF MORE THAN

$25,000.—As a condition of receiving an annual payment of more 

than $25,000 under section 51505 of this title, a State maritime 

academy also must agree to admit each year a number of citizens 

of the United States who meet its admission requirements and 

reside in a State not supporting that academy. The Secretary shall 

determine the number of individuals to be admitted by each 

academy under this subsection. The number may not be more 

than one-third of the total number of individuals attending the 

academy at any time. 

‘‘§ 51507. Places of training 

‘‘The Secretary of Transportation may provide for the training 

of students attending a State maritime academy—

‘‘(1) on vessels owned or subsidized by the United States 

Government; 

‘‘(2) on other documented vessels, with the permission of 

the owner; and 

‘‘(3) in shipyards or plants and with industrial or educational organizations. 

‘‘§ 51508. Allowances for students 

‘‘Under regulations prescribed by the Secretary of Transportation, a student at a State maritime academy shall receive from 

the Secretary allowances for transportation (including reimbursement of traveling expenses) when traveling under orders to receive 

training under section 51507 of this title. 

‘‘§ 51509. Student incentive payment agreements 

‘‘(a) GENERAL AUTHORITY.—If a State maritime academy has 

an agreement with the Secretary of Transportation under section 

51505 of this title, the Secretary may make an agreement with 

a student at the academy who is a citizen of the United States 
H. R. 1442—96

to make student incentive payments to the individual. An agreement with a student may not be effective for more than 4 academic 

years. The Secretary shall allocate payments under this section 

among the various State maritime academies in an equitable 

manner. 

‘‘(b) PAYMENTS.—Payments under an agreement under this section shall be equal to $4,000 each academic year and be paid, 

as prescribed by the Secretary, while the individual is attending 

the academy. The payments shall be used for uniforms, books, 

and subsistence. 

‘‘(c) MIDSHIPMAN AND ENLISTED RESERVE STATUS.—An agreement under this section shall require the student to accept midshipman and enlisted reserve status in the Naval Reserve (including 

the Merchant Marine Reserve, Naval Reserve) before receiving any 

payments under the agreement. 

‘‘(d) AGREEMENT REQUIREMENTS.—An agreement under this section shall require the student to—

‘‘(1) complete the course of instruction at the academy 

the individual is attending; 

‘‘(2) take the examination for a license as an officer in 

the merchant marine of the United States before graduation 

from the academy and fulfill the requirements for such a license 

within 3 months after graduation from the academy; 

‘‘(3) maintain a valid license as an officer in the merchant 

marine of the United States for at least 6 years after graduation 

from the academy, accompanied by the appropriate national 

and international endorsements and certification required by 

the Coast Guard for service aboard vessels on domestic and 

international voyages; 

‘‘(4) accept, if tendered, an appointment as a commissioned 

officer in the Naval Reserve (including the Merchant Marine 

Reserve, Naval Reserve), the Coast Guard Reserve, or any 

other reserve unit of an armed force of the United States, 

and, if tendered the appointment, to serve for at least 6 years 

after graduation from the academy; 

‘‘(5) serve the foreign and domestic commerce and the 

national defense of the United States for at least 3 years 

after graduation from the academy—

‘‘(A) as a merchant marine officer on a documented 

vessel or a vessel owned and operated by the United States 

Government or by a State; 

‘‘(B) as an employee in a United States maritimerelated industry, profession, or marine science (as determined by the Secretary), if the Secretary determines that 

service under subparagraph (A) is not available to the 

individual; 

‘‘(C) as a commissioned officer on active duty in an 

armed force of the United States, as a commissioned officer 

in the National Oceanic and Atmospheric Administration, 

or in other maritime-related Federal employment which 

serves the national security interests of the United States, 

as determined by the Secretary; or 

‘‘(D) by a combination of the service alternatives 

referred to in subparagraphs (A)–(C); and 

‘‘(6) report to the Secretary on compliance with this subsection. 

‘‘(e) FAILURE TO COMPLETE COURSE OF INSTRUCTION.—
H. R. 1442—97

‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines that an individual who has accepted the payments 

described in subsection (b) for a minimum of 2 academic years 

has failed to fulfill the part of the agreement described in 

subsection (d)(1), the individual may be ordered by the Secretary of Defense to serve on active duty in the armed forces 

of the United States for a period of not more than 2 years. 

In cases of hardship as determined by the Secretary of 

Transportation, the Secretary of Transportation may waive this 

paragraph in whole or in part. 

‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is 

unable or unwilling to order an individual to serve on active 

duty under paragraph (1), or if the Secretary of Transportation 

determines that reimbursement of the cost of education provided would better serve the interests of the United States, 

the Secretary of Transportation may recover from the individual 

the amount of student incentive payments, plus interest and 

attorney fees. The Secretary may reduce the amount to be 

recovered to reflect partial performance of service obligations 

and other factors the Secretary determines merit a reduction. 

‘‘(f) FAILURE TO CARRY OUT OTHER REQUIREMENTS.— ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines that an individual has failed to fulfill any part of the 

agreement described in subsection (d)(2)–(6), the individual may 

be ordered to serve on active duty for a period of at least 

2 years but not more than the unexpired period (as determined 

by the Secretary) of the service required by subsection (d)(5). 

The Secretary of Transportation, in consultation with the Secretary of Defense, shall determine in which service the individual shall serve. In cases of hardship as determined by the 

Secretary of Transportation, the Secretary of Transportation 

may waive this paragraph in whole or in part. 

‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is 

unable or unwilling to order an individual to serve on active 

duty under paragraph (1), or if the Secretary of Transportation 

determines that reimbursement of the cost of education provided would better serve the interests of the United States, 

the Secretary of Transportation may recover from the individual 

the amount of student incentive payments, plus interest and 

attorney fees. The Secretary may reduce the amount to be 

recovered to reflect partial performance of service obligations 

and other factors the Secretary determines merit a reduction. 

‘‘(g) ACTIONS TO RECOVER COST.—To aid in the recovery of 

the cost of education provided by the Government under a commitment agreement under this section, the Secretary of Transportation 

may—

‘‘(1) request the Attorney General to bring a civil action 

against the individual; and 

‘‘(2) make use of the Federal debt collection procedures 

in chapter 176 of title 28 or other applicable administrative 

remedies. 

‘‘§ 51510. Deferment of service obligation under student 

incentive payment agreements 

‘‘The Secretary of Transportation may defer the service commitment of an individual under section 51509(d)(5) of this title (as 

specified in the agreement under section 51509) for not more than 
H. R. 1442—98

2 years if the individual is engaged in a graduate course of study 

approved by the Secretary. However, deferment of service as a 

commissioned officer on active duty must be approved by the Secretary of the affected military department (or the Secretary of 

Commerce, for service with the National Oceanic and Atmospheric 

Administration). 

‘‘§ 51511. Midshipman status in the Naval Reserve 

‘‘A citizen of the United States attending a State maritime 

academy may be appointed by the Secretary of the Navy as a 

midshipman in the Naval Reserve (including the Merchant Marine 

Reserve, Naval Reserve). 

‘‘CHAPTER 517—OTHER SUPPORT FOR MERCHANT 

MARINE TRAINING

‘‘Sec. 

‘‘51701. United States Maritime Service. 

‘‘51702. Civilian nautical schools. 

‘‘51703. Additional training. 

‘‘51704. Training for maritime oil pollution prevention, response, and clean-up.

‘‘§ 51701. United States Maritime Service 

‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation 

may establish and maintain a voluntary organization, to be known 

as the United States Maritime Service, for the training of citizens 

of the United States to serve on merchant vessels of the United 

States. 

‘‘(b) SPECIFIC AUTHORITY.—The Secretary may—

‘‘(1) determine the number of individuals to be enrolled 

for training and reserve purposes in the Service; 

‘‘(2) fix the rates of pay and allowances of the individuals 

without regard to chapter 51 or subchapter III of chapter 53 

of title 5; 

‘‘(3) prescribe the course of study and the periods of training 

for the Service; and 

‘‘(4) prescribe the uniform of the Service and the rules 

on providing and wearing the uniform. 

‘‘(c) RANKS, GRADES, AND RATINGS.—The ranks, grades, and 

ratings for personnel of the Service shall be the same as those 

prescribed for personnel of the Coast Guard. 

‘‘(d) MEDALS AND AWARDS.—The Secretary may establish and 

maintain a medals and awards program to recognize distinguished 

service, superior achievement, professional performance, and other 

commendable achievement by personnel of the Service. 

‘‘§ 51702. Civilian nautical schools 

‘‘(a) DEFINITION.—In this section, the term ‘civilian nautical 

school’ means a school operated in the United States (except the 

United States Merchant Marine Academy, a State maritime 

academy, or another school operated by the United States Government) that offers instruction to individuals quartered on a vessel 

primarily to train them for service in the merchant marine. 

‘‘(b) INSPECTION.—Each civilian nautical school is subject to 

inspection by the Secretary of Transportation. 

‘‘(c) RATING AND CERTIFICATION.—The Secretary may, under 

regulations the Secretary may prescribe, provide for the rating 

and certification of civilian nautical schools as to the adequacy 
H. R. 1442—99

of their course of instruction, the competence of their instructors, 

and the suitability of the equipment used in their course of instruction. 

‘‘§ 51703. Additional training 

‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation 

may provide additional training on maritime subjects to supplement 

other training opportunities and make the training available to 

the personnel of the merchant marine of the United States and 

individuals preparing for a career in the merchant marine of the 

United States. 

‘‘(b) EQUIPMENT, SUPPLIES, AND CONTRACTS.—The Secretary 

may—

‘‘(1) prepare or buy equipment or supplies required for 

the additional training; and 

‘‘(2) without regard to section 3709 of the Revised Statutes 

(41 U.S.C. 5), make contracts for services the Secretary considers necessary to prepare the equipment and supplies and 

to supervise and administer the additional training. 

‘‘§ 51704. Training for maritime oil pollution prevention, 

response, and clean-up 

‘‘(a) ASSISTANCE IN ESTABLISHING PROGRAM.—The Secretary 

of Transportation shall assist maritime training institutions 

approved by the Secretary in establishing a training program for 

maritime oil pollution prevention, response, and clean-up. 

‘‘(b) PROVIDING TRAINING VESSELS.—Subject to subsection (c), 

the Secretary may provide, with title free of all liens, to maritime 

training institutions that have a program established under subsection (a), offshore supply vessels and tug/supply vessels that 

were built in the United States and are in the possession of the 

Maritime Administration because of a default on a loan guaranteed 

under chapter 537 of this title. 

‘‘(c) REQUIREMENTS.—In addition to any other requirements 

the Secretary considers appropriate, the following requirements 

apply to vessels provided under this section: 

‘‘(1) The vessel shall be offered to the institution at a 

location selected by the Secretary. 

‘‘(2) The institution shall use the vessel to train students 

and appropriate maritime industry personnel in oil spill prevention, response, clean-up, and related skills. 

‘‘(3) The institution shall make the vessel and qualified 

students available to appropriate Federal, State, and local oil 

spill response authorities when there is a maritime oil spill. 

‘‘(4) The institution may not sell, trade, charter, donate, 

scrap, or in any way alter or dispose of the vessel without 

prior approval of the Secretary. 

‘‘(5) The institution may not use the vessel in competition 

with a privately-owned vessel documented under chapter 121 

of this title or titled under the law of a State, unless necessary 

to carry out this section. 

‘‘(6) When the institution can no longer use the vessel 

for its training program, the institution shall return the vessel 

to the Secretary. The Secretary shall take possession at the 

institution and thereafter may provide the vessel to another 

institution under this section or dispose of the vessel. 
H. R. 1442—100

‘‘CHAPTER 519—MERCHANT MARINE AWARDS

‘‘Sec. 

‘‘51901. Awards for individual acts or service. 

‘‘51902. Gallant Ship Award. 

‘‘51903. Multiple awards. 

‘‘51904. Presentation to representatives. 

‘‘51905. Flags and grave markers. 

‘‘51906. Special certificates for civilian service to armed forces. 

‘‘51907. Manufacture and sale of awards and replacements. 

‘‘51908. Prohibition against unauthorized manufacture, sale, possession, or display 

of awards.

‘‘§ 51901. Awards for individual acts or service 

‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation 

may award decorations and medals of appropriate design (including 

ribbons, ribbon bars, emblems, rosettes, miniature facsimiles, 

plaques, citations, or other suitable devices or insignia) for individual acts or service in the merchant marine of the United States. 

The design may be similar to the design of a decoration or medal 

authorized for members of the armed forces for similar acts or 

service. 

‘‘(b) SPECIFIC AUTHORITY.—The Secretary may award—

‘‘(1) a Merchant Marine Distinguished Service Medal to 

an individual for outstanding acts, conduct, or valor beyond 

the line of duty; 

‘‘(2) a Merchant Marine Meritorious Service Medal to an 

individual for meritorious acts, conduct, or valor in the line 

of duty, but not of the outstanding character that would warrant 

the award of the Merchant Marine Distinguished Service 

Medal; 

‘‘(3) a decoration or medal to an individual for service 

during a war, national emergency proclaimed by the President 

or Congress, or operations by the armed forces outside the 

continental United States under conditions of danger to life 

and property; and 

‘‘(4) a decoration or medal to an individual for other acts 

or service of conspicuous gallantry, intrepidity, and extraordinary heroism under conditions of danger to life and property 

that would warrant a similar decoration or medal for a member 

of the armed forces. 

‘‘§ 51902. Gallant Ship Award 

‘‘(a) AWARDS TO VESSELS.—The Secretary of Transportation 

may award a Gallant Ship Award and a citation to a vessel 

(including a foreign vessel) participating in outstanding or gallant 

action in a marine disaster or other emergency to save life or 

property at sea. The Secretary may award a plaque to the vessel, 

and a replica of the plaque may be preserved as a permanent 

historical record. 

‘‘(b) AWARDS TO CREWS.—The Secretary of Transportation may 

award an appropriate citation ribbon bar to the master and each 

individual serving, at the time of the action, on a vessel issued 

an award under subsection (a). 

‘‘(c) CONSULTATION.—The Secretary of Transportation shall consult with the Secretary of State before awarding an award or 

citation to a foreign vessel or its crew under this section. 
H. R. 1442—101

‘‘§ 51903. Multiple awards 

‘‘An individual may not be awarded more than one of any 

type of decoration or medal under this chapter. For each succeeding 

act or service justifying the same decoration or medal, a suitable 

device may be awarded to be worn with the decoration or medal. 

‘‘§ 51904. Presentation to representatives 

‘‘If an individual to be issued an award under this chapter 

is unable to accept the award personally, the Secretary of Transportation may present the award to an appropriate representative. 

‘‘§ 51905. Flags and grave markers 

‘‘Except as authorized under another law, the Secretary of 

Transportation may issue, at no cost, a flag of the United States 

and a grave marker to the family or personal representative of 

a deceased individual who served in the merchant marine of the 

United States in support of the armed forces of the United States 

or its allies during a war or national emergency. 

‘‘§ 51906. Special certificates for civilian service to armed 

forces 

‘‘(a) GENERAL AUTHORITY.—The Maritime Administrator may 

issue a special certificate to an individual, or the personal representative of an individual, in recognition of service of that individual 

in the merchant marine of the United States, if the service has 

been determined to be active duty under section 401 of the GI 

Bill Improvement Act of 1977 (Public Law 95–202; 38 U.S.C. 106 

note). 

‘‘(b) RELATIONSHIP TO OTHER LAWS.—Issuance of a certificate 

under subsection (a) does not entitle an individual to any rights, 

privileges, or benefits under a law of the United States. 

‘‘§ 51907. Manufacture and sale of awards and replacements 

‘‘The Secretary of Transportation may—

‘‘(1) authorize private persons to manufacture decorations 

and medals authorized under this chapter or a prior law; and 

‘‘(2) provide at cost, or authorize private persons to sell 

at reasonable prices, replacements for those decorations and 

medals. 

‘‘§ 51908. Prohibition against unauthorized manufacture, 

sale, possession, or display of awards 

‘‘(a) PROHIBITION.—Except as authorized under this chapter, 

a person may not manufacture, sell, possess, or display a decoration 

or medal provided for in this chapter. 

‘‘(b) CIVIL PENALTY.—A person violating this section is liable 

to the United States Government for a civil penalty of not more 

than $2,000. 

‘‘CHAPTER 521—MISCELLANEOUS

‘‘Sec. 

‘‘52101. Reemployment rights for certain merchant seamen.

‘‘§ 52101. Reemployment rights for certain merchant seamen 

‘‘(a) IN GENERAL.—An individual who is certified by the Secretary of Transportation under subsection (c) shall be entitled to 
H. R. 1442—102

reemployment rights and other benefits substantially equivalent 

to the rights and benefits provided for by chapter 43 of title 38 

for any member of a reserve component of the armed forces of 

the United States who is ordered to active duty. 

‘‘(b) TIME FOR APPLICATION.—An individual may submit an 

application for certification under subsection (c) to the Secretary 

not later than 45 days after the date the individual completes 

a period of employment described in subsection (c)(1)(A) with respect 

to which the application is submitted. 

‘‘(c) CERTIFICATION DETERMINATION.—Not later than 20 days 

after the date the Secretary receives from an individual an application for certification under this subsection, the Secretary shall—

‘‘(1) determine whether the individual—

‘‘(A) was employed in the activation or operation of 

a vessel—

‘‘(i) in the National Defense Reserve Fleet maintained under section 11 of the Merchant Ship Sales 

Act of 1946 (50 App. U.S.C. 1744) in a period in which 

the vessel was in use or being activated for use under 

subsection (b) of that section; 

‘‘(ii) requisitioned or purchased under chapter 563 

of this title; or 

‘‘(iii) owned, chartered, or controlled by the United 

States Government and used by the Government for 

a war, armed conflict, national emergency, or maritime 

mobilization need (including for training purposes or 

testing for readiness and suitability for mission 

performance); and 

‘‘(B) during the period of that employment, possessed 

a valid license, certificate of registry, or merchant mariner’s 

document issued under chapter 71 or 73 of this title; and 

‘‘(2) if the Secretary makes affirmative determinations 

under subparagraphs (A) and (B) of paragraph (1), certify that 

individual under this subsection. 

‘‘(d) EQUIVALENCE TO MILITARY SELECTIVE SERVICE ACT CERTIFICATE.—For purposes of reemployment rights and benefits provided by this section, a certification under subsection (c) shall 

be considered to be the equivalent of a certificate described in 

section 9(a) of the Military Selective Service Act (50 App. U.S.C. 

459(a)).

‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS’’. 

(c) CHAPTERS FOLLOWING CHAPTER 531.—Subtitle V of title 

46, United States Code, is amended by adding at the end the 

following:

‘‘CHAPTER 533—CONSTRUCTION RESERVE FUNDS

‘‘Sec. 

‘‘53301. Definitions. 

‘‘53302. Authority for construction reserve funds. 

‘‘53303. Persons eligible to establish funds. 

‘‘53304. Vessel ownership. 

‘‘53305. Eligible fund deposits. 

‘‘53306. Recognition of gain for tax purposes. 

‘‘53307. Basis for determining gain or loss and for depreciating new vessels. 

‘‘53308. Order and proportions of deposits and withdrawals. 

‘‘53309. Accumulation of deposits. 

‘‘53310. Obligation of deposits and period for construction of certain vessels. 
H. R. 1442—103

‘‘53311. Taxation of deposits on failure of conditions. 

‘‘53312. Assessment and collection of deficiency tax.

‘‘§ 53301. Definitions 

‘‘(a) IN GENERAL.—In this chapter: 

‘‘(1) CONSTRUCTION CONTRACT.—The term ‘construction contract’ includes, for a taxpayer constructing a new vessel in 

a shipyard owned by that taxpayer, an agreement between 

the taxpayer and the Secretary of Transportation for that 

construction containing provisions the Secretary considers 

advisable to carry out this chapter. 

‘‘(2) NEW VESSEL.—The term ‘new vessel’ means—

‘‘(A) a vessel—

‘‘(i) constructed in the United States after 

December 31, 1939, constructed with a constructiondifferential subsidy under title V of the Merchant 

Marine Act, 1936, or constructed with financing or 

a financing guarantee under chapter 537 or 575 of 

this title; 

‘‘(ii) documented or agreed with the Secretary to 

be documented under the laws of the United States; 

and 

‘‘(iii)(I) of a type, size, and speed that the Secretary 

determines is suitable for use on the high seas or 

Great Lakes in carrying out this subtitle, but not less 

than 2,000 gross tons or less than 12 knots speed 

unless the Secretary certifies in each case that a vessel 

of lesser tonnage or speed is desirable for use by the 

United States Government in case of war or national 

emergency; or 

‘‘(II) constructed to replace a vessel bought or 

requisitioned by the Government; and 

‘‘(B) a vessel reconstructed or reconditioned for use 

only on the Great Lakes, including the Saint Lawrence 

River and Gulf, if the Secretary finds that the reconstruction or reconditioning will promote the objectives of this 

subtitle. 

‘‘(b) ADDITIONAL TAX-RELATED TERMS.—Other terms used in 

this chapter have the same meaning as in chapter 1 of the Internal 

Revenue Code of 1986 (26 U.S.C. ch. 1). 

‘‘§ 53302. Authority for construction reserve funds 

‘‘(a) GENERAL AUTHORITY.—An eligible person under section 

53303 of this title may establish a construction reserve fund for 

the construction, reconstruction, reconditioning, or acquisition of 

a new vessel or for other purposes authorized by this chapter. 

‘‘(b) APPLICATION OF CERTAIN LAWS AND REGULATIONS.—The 

fund shall be established, maintained, expended, and used as provided by this chapter and regulations prescribed jointly by the 

Secretary of Transportation and the Secretary of the Treasury. 

‘‘§ 53303. Persons eligible to establish funds 

‘‘A construction reserve fund may be established by a citizen 

of the United States that—

‘‘(1) is operating a vessel in the foreign or domestic commerce of the United States or in the fisheries; 
H. R. 1442—104

‘‘(2) owns, in whole or in part, a vessel being operated 

in the foreign or domestic commerce of the United States or 

in the fisheries; 

‘‘(3) was operating a vessel in the foreign or domestic 

commerce of the United States or in the fisheries when it 

was bought or requisitioned by the United States Government; 

‘‘(4) owned, in whole or in part, a vessel being operated 

in the foreign or domestic commerce of the United States or 

in the fisheries when it was bought or requisitioned by the 

Government; or 

‘‘(5) had acquired or was having constructed a vessel to 

operate in the foreign or domestic commerce of the United 

States or in the fisheries when it was bought or requisitioned 

by the Government. 

‘‘§ 53304. Vessel ownership 

‘‘In this chapter, a vessel is deemed to be constructed or 

acquired by a taxpayer if constructed or acquired by a corporation 

when the taxpayer owns at least 95 percent of each class of stock 

of the corporation. 

‘‘§ 53305. Eligible fund deposits 

‘‘A construction reserve fund may include deposits of—

‘‘(1) the proceeds from the sale of a vessel; 

‘‘(2) indemnities for the loss of a vessel; 

‘‘(3) earnings from the operation of a documented vessel 

and from services incident to the operation; and 

‘‘(4) interest or other amounts accrued on deposits in the 

fund. 

‘‘§ 53306. Recognition of gain for tax purposes 

‘‘(a) DEFINITIONS.—In this section, the terms ‘net proceeds’ and 

‘net indemnity’ mean the sum of—

‘‘(1) the adjusted basis of the vessel; and 

‘‘(2) the amount of gain the taxpayer would recognize without regard to this section. 

‘‘(b) RECOGNITION OF GAIN.—In computing net income under 

the income or excess profits tax laws of the United States, a taxpayer does not recognize a gain on the sale or the actual or constructive total loss of a vessel if the taxpayer—

‘‘(1) deposits an amount equal to the net proceeds of the 

sale or the net indemnity for the loss in a construction reserve 

fund within 60 days after receiving the payment of proceeds 

or indemnity; and 

‘‘(2) elects under this section not to recognize the gain. 

‘‘(c) WHEN ELECTION MUST BE MADE.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 

the taxpayer must make the election referred to in subsection 

(b) in the taxpayer’s income tax return for the taxable year 

in which the gain was realized. 

‘‘(2) RECEIPT AFTER TAXABLE YEAR.—If the vessel is bought 

or requisitioned by the United States Government, or is lost, 

and the taxpayer receives payment for the vessel or indemnity 

for the loss from the Government after the end of the taxable 

year in which it was bought, requisitioned, or lost, the taxpayer 

must make the election referred to in subsection (b) within 
H. R. 1442—105

60 days after receiving the payment or indemnity, on a form 

prescribed by the Secretary of the Treasury. 

‘‘(d) EFFECT OF STATUTE OF LIMITATION.—If the taxpayer makes 

an election under subsection (c)(2), and computation or recomputation under this section is otherwise allowable but is prevented 

by a statute of limitation on the date the election is made or 

within 6 months thereafter, the computation or recomputation 

nevertheless shall be made notwithstanding the statute if the taxpayer files a claim for the computation or recomputation within 

6 months after the date of making the election. 

‘‘§ 53307. Basis for determining gain or loss and for depreciating new vessels 

‘‘Under the income or excess profits tax laws of the United 

States, the basis for determining a gain or loss and for depreciation 

of a new vessel constructed, reconstructed, reconditioned, or 

acquired by the taxpayer, or for which purchase-money indebtedness 

is liquidated as provided in section 53310 of this title, with amounts 

from a construction reserve fund, shall be reduced by that part 

of the deposits in the fund expended in the construction, reconstruction, reconditioning, acquisition, or liquidation of purchase-money 

indebtedness of the new vessel that represents a gain not recognized 

for tax purposes under section 53306 of this title. 

‘‘§ 53308. Order and proportions of deposits and withdrawals 

‘‘In this chapter—

‘‘(1) if the net proceeds of a sale or the net indemnity 

for a loss is deposited in more than one deposit, the amount 

consisting of the gain shall be deemed to be deposited first; 

‘‘(2) amounts expended, obligated, or otherwise withdrawn 

shall be applied against the amounts deposited in the fund 

in the order of deposit; and 

‘‘(3) if a deposit consists in part of a gain not recognized 

under section 53306 of this title, any expenditure, obligation, 

or withdrawal applied against that deposit shall be deemed 

to be a gain in the proportion that the part of the deposit 

consisting of a gain bears to the total amount of the deposit. 

‘‘§ 53309. Accumulation of deposits 

‘‘For any taxable year, amounts on deposit in a construction 

reserve fund on the last day of the taxable year, for which the 

requirements of section 53310 of this title have been satisfied (to 

the extent they apply on the last day of the taxable year), are 

deemed to have been retained for the reasonable needs of the 

business within the meaning of section 537(a) of the Internal Revenue Code of 1986 (26 U.S.C. 537(a)). 

‘‘§ 53310. Obligation of deposits and period for construction 

of certain vessels 

‘‘(a) APPLICATION OF SECTIONS 53306 AND 53309.—Sections 

53306 and 53309 of this title apply to a deposit in a construction 

reserve fund only if, within 3 years after the date of the deposit 

(and any extension under subsection (c))—

‘‘(1)(A) a contract is made for the construction or acquisition 

of a new vessel or, with the approval of the Secretary of 

Transportation, for a part interest in a new vessel or for the 

reconstruction or reconditioning of a new vessel; 
H. R. 1442—106

‘‘(B) the deposit is expended or obligated for expenditure 

under that contract; 

‘‘(C) at least 12.5 percent of the construction or contract 

price of the vessel is paid or irrevocably committed for payment; 

and 

‘‘(D) the plans and specifications for the vessel are approved 

by the Secretary to the extent the Secretary considers necessary; or 

‘‘(2) the deposit is expended or obligated for expenditure 

for the liquidation of existing or subsequently incurred purchase-money indebtedness to a person not a parent company 

of, or a company affiliated or associated with, the mortgagor 

on a new vessel. 

‘‘(b) ADDITIONAL REQUIREMENTS FOR CERTAIN VESSELS.—In 

addition to the requirements of subsection (a)(1), for a vessel not 

constructed under a construction-differential subsidy contract or 

not bought from the Secretary of Transportation—

‘‘(1) at least 5 percent of the construction (or, if the contract 

covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months 

after the date of the construction contract (or within the period 

of an extension under subsection (c)), as estimated by the 

Secretary and certified by the Secretary to the Secretary of 

the Treasury; and 

‘‘(2) construction under the contract must be completed 

with reasonable dispatch thereafter. 

‘‘(c) EXTENSIONS.—The Secretary of Transportation may grant 

extensions of the period within which the deposits must be expended 

or obligated or within which the construction must have progressed 

to the extent of 5 percent completion under this section. However, 

the extensions may not be for a total of more than 2 years for 

the expenditure or obligation of deposits or one year for the progress 

of construction. 

‘‘§ 53311. Taxation of deposits on failure of conditions 

‘‘A deposited gain, if otherwise taxable income under the law 

applicable to the taxable year in which the gain was realized, 

shall be included in gross income for that taxable year, except 

for purposes of the declared value excess profits tax and the capital 

stock tax, if—

‘‘(1) the deposited gain is not expended or obligated within 

the appropriate period under section 53310 of this title; 

‘‘(2) the deposited gain is withdrawn before the end of 

that period; 

‘‘(3) the construction related to that deposited gain has 

not progressed to the extent of 5 percent of completion within 

the appropriate period under section 53310 of this title; or 

‘‘(4) the Secretary of Transportation finds and certifies to 

the Secretary of the Treasury that, for causes within the control 

of the taxpayer, the entire construction related to that deposited 

gain is not completed with reasonable dispatch. 

‘‘§ 53312. Assessment and collection of deficiency tax 

‘‘Notwithstanding any other provision of law, a deficiency in 

tax for a taxable year resulting from the inclusion of an amount 

in gross income as provided by section 53311 of this title, and 

the amount to be treated as a deficiency under section 53311 
H. R. 1442—107

instead of as an adjustment for the declared value excess profits 

tax, may be assessed or a civil action may be brought to collect 

the deficiency without assessment, at any time. Interest on a deficiency or amount to be treated as a deficiency does not begin 

until the date the deposited gain or part of the deposited gain 

in question is required to be included in gross income under section 

51111.

‘‘CHAPTER 535—CAPITAL CONSTRUCTION FUNDS

‘‘Sec. 

‘‘53501. Definitions. 

‘‘53502. Regulations. 

‘‘53503. Establishing a capital construction fund. 

‘‘53504. Deposits and withdrawals. 

‘‘53505. Ceiling on deposits. 

‘‘53506. Investment and fiduciary requirements. 

‘‘53507. Nontaxation of deposits. 

‘‘53508. Separate accounts within a fund. 

‘‘53509. Qualified withdrawals. 

‘‘53510. Tax treatment of qualified withdrawals and basis of property. 

‘‘53511. Tax treatment of nonqualified withdrawals. 

‘‘53512. FIFO and LIFO withdrawals. 

‘‘53513. Corporate reorganizations and partnership changes. 

‘‘53514. Relationship of old fund to new fund. 

‘‘53515. Records and reports. 

‘‘53516. Termination of agreement after change in regulations. 

‘‘53517. Reports.

‘‘§ 53501. Definitions 

‘‘In this chapter: 

‘‘(1) AGREEMENT VESSEL.—The term ‘agreement vessel’ 

means—

‘‘(A) an eligible vessel or a qualified vessel that is 

subject to an agreement under this chapter; and 

‘‘(B) a barge or container that is part of the complement 

of a vessel described in subparagraph (A) if provided for 

in the agreement. 

‘‘(2) ELIGIBLE VESSEL.—The term ‘eligible vessel’ means—

‘‘(A) a vessel—

‘‘(i) constructed in the United States (and, if 

reconstructed, reconstructed in the United States), constructed outside the United States but documented 

under the laws of the United States on April 15, 1970, 

or constructed outside the United States for use in 

the United States foreign trade pursuant to a contract 

made before April 15, 1970; 

‘‘(ii) documented under the laws of the United 

States; and 

‘‘(iii) operated in the foreign or domestic trade 

of the United States or in the fisheries of the United 

States; and 

‘‘(B) a commercial fishing vessel—

‘‘(i) constructed in the United States and, if 

reconstructed, reconstructed in the United States; 

‘‘(ii) of at least 2 net tons but less than 5 net 

tons; 

‘‘(iii) owned by a citizen of the United States; 

‘‘(iv) having its home port in the United States; 

and 

‘‘(v) operated in the commercial fisheries of the 

United States. 
H. R. 1442—108

‘‘(3) JOINT REGULATIONS.—The term ‘joint regulations’ 

means regulations prescribed jointly by the Secretary and the 

Secretary of the Treasury under section 53502(b) of this title. 

‘‘(4) NONCONTIGUOUS TRADE.—The term ‘noncontiguous 

trade’ means—

‘‘(A) trade between—

‘‘(i) one of the contiguous 48 States; and 

‘‘(ii) Alaska, Hawaii, Puerto Rico, or an insular 

territory or possession of the United States; and 

‘‘(B) trade between—

‘‘(i) a place in Alaska, Hawaii, Puerto Rico, or 

an insular territory or possession of the United States; 

and 

‘‘(ii) another place in Alaska, Hawaii, Puerto Rico, 

or an insular territory or possession of the United 

States. 

‘‘(5) QUALIFIED VESSEL.—The term ‘qualified vessel’ 

means—

‘‘(A) a vessel—

‘‘(i) constructed in the United States (and, if 

reconstructed, reconstructed in the United States), constructed outside the United States but documented 

under the laws of the United States on April 15, 1970, 

or constructed outside the United States for use in 

the United States foreign trade pursuant to a contract 

made before April 15, 1970; 

‘‘(ii) documented under the laws of the United 

States; and 

‘‘(iii) agreed, between the Secretary and the person 

maintaining the capital construction fund established 

under section 53503 of this title, to be operated in 

the United States foreign, Great Lakes, or noncontiguous domestic trade or in the fisheries of the United 

States; and 

‘‘(B) a commercial fishing vessel—

‘‘(i) constructed in the United States and, if 

reconstructed, reconstructed in the United States; 

‘‘(ii) of at least 2 net tons but less than 5 net 

tons; 

‘‘(iii) owned by a citizen of the United States; 

‘‘(iv) having its home port in the United States; 

and 

‘‘(v) operated in the commercial fisheries of the 

United States. 

‘‘(6) SECRETARY.—The term ‘Secretary’ means—

‘‘(A) the Secretary of Commerce with respect to an 

eligible vessel or a qualified vessel operated or to be operated in the fisheries of the United States; and 

‘‘(B) the Secretary of Transportation with respect to 

other vessels. 

‘‘(7) UNITED STATES FOREIGN TRADE.—The term ‘United 

States foreign trade’ includes those areas in domestic trade 

in which a vessel built with a construction-differential subsidy 

is allowed to operate under the first sentence of section 506 

of the Merchant Marine Act, 1936. 

‘‘(8) VESSEL.—The term ‘vessel’ includes—
H. R. 1442—109

‘‘(A) cargo handling equipment that the Secretary 

determines is intended for use primarily on the vessel; 

and 

‘‘(B) an ocean-going towing vessel, an ocean-going 

barge, or a comparable towing vessel or barge operated 

on the Great Lakes. 

‘‘§ 53502. Regulations 

‘‘(a) IN GENERAL.—Except as provided in subsection (b), the 

Secretary shall prescribe regulations to carry out this chapter. 

‘‘(b) TAX LIABILITY.—The Secretary and the Secretary of the 

Treasury shall prescribe joint regulations for the determination 

of tax liability under this chapter. 

‘‘§ 53503. Establishing a capital construction fund 

‘‘(a) IN GENERAL.—A citizen of the United States owning or 

leasing an eligible vessel may make an agreement with the Secretary under this chapter to establish a capital construction fund 

for the vessel. 

‘‘(b) ALLOWABLE PURPOSE.—The purpose of the agreement shall 

be to provide replacement vessels, additional vessels, or 

reconstructed vessels, built in the United States and documented 

under the laws of the United States, for operation in the United 

States foreign, Great Lakes, or noncontiguous domestic trade or 

in the fisheries of the United States. 

‘‘§ 53504. Deposits and withdrawals 

‘‘(a) REQUIRED DEPOSITS.—An agreement to establish a capital 

construction fund shall provide for the deposit in the fund of the 

amounts agreed to be appropriate to provide for qualified withdrawals under section 53509 of this title. 

‘‘(b) APPLICABLE REQUIREMENTS.—Deposits in and withdrawals 

from the fund are subject to the requirements included in the 

agreement or prescribed by the Secretary by regulation. However, 

the Secretary may not require a person to deposit in the fund 

for a taxable year more than 50 percent of that portion of the 

person’s taxable income for that year (as determined under section 

53505(a)(1) of this title) that is attributable to the operation of 

an agreement vessel. 

‘‘§ 53505. Ceiling on deposits 

‘‘(a) MAXIMUM DEPOSITS.—The amount deposited in a capital 

construction fund for a taxable year may not exceed the sum of—

‘‘(1) that portion of the taxable income of the owner or 

lessee for the taxable year (computed under chapter 1 of the 

Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without 

regard to the carryback of net operating loss or net capital 

loss or this chapter) that is attributable to the operation of 

agreement vessels in the foreign or domestic trade of the United 

States or in the fisheries of the United States; 

‘‘(2) the amount allowable as a deduction under section 

167 of such Code (26 U.S.C. 167) for the taxable year for 

agreement vessels; 

‘‘(3) if the transaction is not taken into account for purposes 

of paragraph (1), the net proceeds (as defined in joint regulations) from the disposition of an agreement vessel or from 
H. R. 1442—110

insurance or indemnity attributable to an agreement vessel; 

and 

‘‘(4) the receipts from the investment or reinvestment of 

amounts held in the fund. 

‘‘(b) REDUCTIONS FOR LESSEES.—For a lessee, the maximum 

amount that may be deposited for an agreement vessel under subsection (a)(2) for any period shall be reduced by any amount the 

owner is required or permitted, under the capital construction fund 

agreement, to deposit for that period for the vessel under subsection 

(a)(2). 

‘‘§ 53506. Investment and fiduciary requirements 

‘‘(a) IN GENERAL.—Amounts in a capital construction fund shall 

be kept in the depository specified in the agreement and shall 

be subject to trustee and other fiduciary requirements prescribed 

by the Secretary. Except as provided in subsection (b), amounts 

in the fund may be invested only in interest-bearing securities 

approved by the Secretary. 

‘‘(b) STOCK INVESTMENTS.— ‘‘(1) IN GENERAL.—With the approval of the Secretary, an 

agreed percentage (but not more than 60 percent) of the assets 

of the fund may be invested in the stock of domestic corporations that—

‘‘(A) is fully listed and registered on an exchange registered with the Securities and Exchange Commission as 

a national securities exchange; and 

‘‘(B) would be acquired by a prudent investor seeking 

a reasonable income and the preservation of capital. 

‘‘(2) PREFERRED STOCK.—The preferred stock of a corporation is deemed to satisfy the requirements of this subsection, 

even though it may not be registered and listed because it 

is nonvoting stock, if the common stock of the corporation 

satisfies the requirements and the preferred stock otherwise 

would satisfy the requirements. 

‘‘(c) MAINTAINING AGREED PERCENTAGE.—If at any time the 

fair market value of the stock in the fund is more than the agreed 

percentage of the assets in the fund, any subsequent investment 

of amounts deposited in the fund, and any subsequent withdrawal 

from the fund, shall be made in a way that tends to restore the 

fair market value of the stock to not more than the agreed percentage. 

‘‘§ 53507. Nontaxation of deposits 

‘‘(a) TAX TREATMENT.—Subject to subsection (b), under the 

Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)—

‘‘(1) taxable income (determined without regard to this 

chapter and section 7518 of such Code (26 U.S.C. 7518)) for 

the taxable year shall be reduced by the amount deposited 

for the taxable year out of amounts referred to in section 

53505(a)(1) of this title; 

‘‘(2) a gain from a transaction referred to in section 

53505(a)(3) of this title shall not be taken into account if 

an amount equal to the net proceeds (as defined in joint regulations) from the transaction is deposited in the fund; 

‘‘(3) the earnings (including gains and losses) from the 

investment and reinvestment of amounts held in the fund shall 

not be taken into account; 
H. R. 1442—111

‘‘(4) the earnings and profits of a corporation (within the 

meaning of section 316 of such Code (26 U.S.C. 316)) shall 

be determined without regard to this chapter and section 7518 

of such Code (26 U.S.C. 7518); and 

‘‘(5) in applying the tax imposed by section 531 of such 

Code (26 U.S.C. 531), amounts held in the fund shall not 

be taken into account. 

‘‘(b) CONDITION.—This section applies to an amount only if 

the amount is deposited in the fund under the agreement within 

the time provided in joint regulations. 

‘‘§ 53508. Separate accounts within a fund 

‘‘(a) IN GENERAL.—A capital construction fund shall have three 

accounts: 

‘‘(1) The capital account. 

‘‘(2) The capital gain account. 

‘‘(3) The ordinary income account. 

‘‘(b) CAPITAL ACCOUNT.—The capital account shall consist of—

‘‘(1) amounts referred to in section 53505(a)(2) of this title; 

‘‘(2) amounts referred to in section 53505(a)(3) of this title, 

except that portion representing a gain not taken into account 

because of section 53507(a)(2) of this title; 

‘‘(3) the percentage applicable under section 243(a)(1) of 

the Internal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of 

any dividend received by the fund for which the person 

maintaining the fund would be allowed (were it not for section 

53507(a)(3) of this title) a deduction under section 243 of such 

Code (26 U.S.C. 243); and 

‘‘(4) interest income exempt from taxation under section 

103 of such Code (26 U.S.C. 103). 

‘‘(c) CAPITAL GAIN ACCOUNT.—The capital gain account shall 

consist of—

‘‘(1) amounts representing capital gains on assets held for 

more than 6 months and referred to in section 53505(a)(3) 

or (4) of this title; minus 

‘‘(2) amounts representing capital losses on assets held 

in the fund for more than 6 months. 

‘‘(d) ORDINARY INCOME ACCOUNT.—The ordinary income account 

shall consist of—

‘‘(1) amounts referred to in section 53505(a)(1) of this title; 

‘‘(2)(A) amounts representing capital gains on assets held 

for not more than 6 months and referred to in section 

53505(a)(3) or (4) of this title; minus 

‘‘(B) amounts representing capital losses on assets held 

in the fund for not more than 6 months; 

‘‘(3) interest (except tax-exempt interest referred to in subsection (b)(4)) and other ordinary income (except any dividend 

referred to in paragraph (5)) received on assets held in the 

fund; 

‘‘(4) ordinary income from a transaction described in section 

53505(a)(3) of this title; and 

‘‘(5) that portion of any dividend referred to in subsection 

(b)(3) not taken into account under subsection (b)(3). 

‘‘(e) WHEN LOSSES ALLOWED.—Except on termination of a fund, 

capital losses referred to in subsection (c) or (d)(2) shall be allowed 

only as an offset to gains referred to in subsection (c) or (d)(2), 

respectively. 
H. R. 1442—112

‘‘§ 53509. Qualified withdrawals 

‘‘(a) IN GENERAL.—Subject to subsection (b), a withdrawal from 

a capital construction fund is a qualified withdrawal if it is made 

under the terms of the agreement and is for—

‘‘(1) the acquisition, construction, or reconstruction of a 

qualified vessel or a barge or container that is part of the 

complement of a qualified vessel; or 

‘‘(2) the payment of the principal on indebtedness incurred 

in the acquisition, construction, or reconstruction of a qualified 

vessel or a barge or container that is part of the complement 

of a qualified vessel. 

‘‘(b) BARGES AND CONTAINERS.—Except as provided in regulations prescribed by the Secretary, subsection (a) applies to a barge 

or container only if it is constructed in the United States. 

‘‘(c) TREATMENT AS NONQUALIFIED WITHDRAWAL.—Under joint 

regulations, if the Secretary determines that a substantial obligation under an agreement is not being fulfilled, the Secretary, after 

notice and opportunity for a hearing to the person maintaining 

the fund, may treat any amount in the fund as an amount withdrawn from the fund in a nonqualified withdrawal. 

‘‘§ 53510. Tax treatment of qualified withdrawals and basis 

of property 

‘‘(a) ORDER OF WITHDRAWALS.—A qualified withdrawal from 

a capital construction fund shall be treated as made—

‘‘(1) first from the capital account; 

‘‘(2) second from the capital gain account; and 

‘‘(3) third from the ordinary income account. 

‘‘(b) ORDINARY INCOME ACCOUNT WITHDRAWALS.—If a portion 

of a qualified withdrawal for a vessel, barge, or container is made 

from the ordinary income account, the basis of the vessel, barge, 

or container shall be reduced by an amount equal to that portion. 

‘‘(c) CAPITAL GAIN ACCOUNT WITHDRAWALS.—If a portion of 

a qualified withdrawal for a vessel, barge, or container is made 

from the capital gain account, the basis of the vessel, barge, or 

container shall be reduced by an amount equal to that portion. 

‘‘(d) WITHDRAWALS TO PAY PRINCIPAL.—If a portion of a qualified withdrawal to pay the principal on indebtedness is made from 

the ordinary income account or the capital gain account, an amount 

equal to the total reduction that would be required by subsections 

(b) and (c) if the withdrawal were a qualified withdrawal for a 

purpose described in those subsections shall be applied, in the 

order provided in joint regulations, to reduce the basis of vessels, 

barges, and containers owned by the person maintaining the fund. 

The remaining amount of the withdrawal shall be treated as a 

nonqualified withdrawal. 

‘‘(e) GAIN ON PROPERTY WITH REDUCED BASIS.—If property, 

the basis of which was reduced under subsection (b), (c), or (d), 

is disposed of, any gain realized on the disposition, to the extent 

it does not exceed the total reduction in the basis of the property 

under those subsections, shall be treated as an amount referred 

to in section 53511(c)(1) of this title withdrawn on the date of 

disposition of the property. Subject to conditions prescribed in joint 

regulations, this subsection does not apply to a disposition if there 

is a redeposit, in an amount determined under joint regulations, 

that restores the fund as far as practicable to the position it was 

in before the withdrawal. 
H. R. 1442—113

‘‘§ 53511. Tax treatment of nonqualified withdrawals 

‘‘(a) IN GENERAL.—Except as provided in section 53513 of this 

title, a withdrawal from a fund that is not a qualified withdrawal 

shall be treated as a nonqualified withdrawal. 

‘‘(b) ORDER OF WITHDRAWALS.—A nonqualified withdrawal shall 

be treated as made—

‘‘(1) first from the ordinary income account; 

‘‘(2) second from the capital gain account; and 

‘‘(3) third from the capital account. 

‘‘(c) TAX TREATMENT.—For purposes of the Internal Revenue 

Code of 1986 (26 U.S.C. 1 et seq.)—

‘‘(1) a nonqualified withdrawal from the ordinary income 

account shall be included in income as an item of ordinary 

income for the taxable year in which the withdrawal is made; 

‘‘(2) a nonqualified withdrawal from the capital gain 

account shall be included in income for the taxable year in 

which the withdrawal is made as an item of gain realized 

during that year from the disposition of an asset held for 

more than 6 months; and 

‘‘(3) for the period through the last date prescribed for 

payment of tax for the taxable year in which the withdrawal 

is made—

‘‘(A) no interest shall be payable under section 6601 

of such Code (26 U.S.C. 6601) and no addition to the 

tax shall be payable under section 6651 of such Code (26 

U.S.C. 6651); 

‘‘(B) interest on the amount of the additional tax attributable to an amount treated as a nonqualified withdrawal 

from the ordinary income account or the capital gain 

account shall be paid at the rate determined under subsection (d) from the last date prescribed for payment of 

the tax for the taxable year for which the amount was 

deposited in the fund; and 

‘‘(C) no interest shall be payable on amounts treated 

as withdrawn on a last-in-first-out basis under section 

53512 of this title. 

‘‘(d) INTEREST RATE.—The rate of interest under subsection 

(c)(3)(B) for a nonqualified withdrawal made in a taxable year 

beginning after 1971 shall be determined and published jointly 

by the Secretary and the Secretary of the Treasury. The rate 

shall be such that its relationship to 8 percent is comparable, 

as determined by the Secretaries under joint regulations, to the 

relationship between—

‘‘(1) the money rates and investment yields for the calendar 

year immediately before the beginning of the taxable year; 

and 

‘‘(2) the money rates and investment yields for the calendar 

year 1970. 

‘‘(e) NONQUALIFIED WITHDRAWALS.—

‘‘(1) IN GENERAL.—The following applicable percentage of 

any amount that remains in a capital construction fund at 

the close of the following specified taxable year following the 

taxable year for which the amount was deposited shall be 

treated as a nonqualified withdrawal:
H. R. 1442—114

‘‘If the amount remains in the fund at The 

applicable 

the close of the— percentage 

is—

‘‘26th taxable year ............................................................................ 20 percent

‘‘27th taxable year ............................................................................ 40 percent

‘‘28th taxable year ............................................................................ 60 percent

‘‘29th taxable year ............................................................................ 80 percent

‘‘30th taxable year ............................................................................ 100 percent.

‘‘(2) EARNINGS.—The earnings of a capital construction fund 

for any taxable year (except net gains) shall be treated under 

this subsection as an amount deposited for the taxable year. 

‘‘(3) CONTRACT FOR QUALIFIED WITHDRAWAL.—Under paragraph (1), an amount shall not be treated as remaining in 

a capital construction fund at the close of a taxable year to 

the extent there is a binding contract at the close of the taxable 

year for a qualified withdrawal of the amount for an identified 

item for which the withdrawal may be made. 

‘‘(4) EXCESS EARNINGS.—If the Secretary determines that 

the balance in a capital construction fund exceeds the amount 

appropriate to meet the vessel construction program objectives 

of the person that established the fund, the amount of the 

excess shall be treated as a nonqualified withdrawal under 

paragraph (1) unless the person develops appropriate program 

objectives within 3 years to dissipate the excess. 

‘‘(5) AMOUNTS IN FUND ON JANUARY 1, 1987.—Under this 

subsection, amounts in a capital construction fund on January 

1, 1987, shall be treated as having been deposited in that 

fund on that date. 

‘‘(f) TAX DETERMINATIONS.— ‘‘(1) IN GENERAL.—For a taxable year for which there is 

a nonqualified withdrawal (including an amount treated as 

a nonqualified withdrawal under subsection (e)), the tax 

imposed by chapter 1 of the Internal Revenue Code of 1986 

(26 U.S.C. ch. 1) shall be determined by—

‘‘(A) excluding the withdrawal from gross income; and 

‘‘(B) increasing the tax imposed by chapter 1 of such 

Code by the product of the amount of the withdrawal 

and the highest tax rate specified in section 1 (or section 

11 for a corporation) of such Code (26 U.S.C. 1, 11). 

‘‘(2) MAXIMUM TAX RATE.—For that portion of a nonqualified 

withdrawal made from the capital gain account during a taxable 

year to which section 1(h) or 1201(a) of such Code (26 U.S.C. 

1(h), 1201(a)) applies, the tax rate used under paragraph (1)(B) 

may not exceed 15 percent (or 34 percent for a corporation). 

‘‘(3) TAX BENEFIT RULE.—If any portion of a nonqualified 

withdrawal is properly attributable to deposits (except earnings 

on deposits) made by the taxpayer in a taxable year that 

did not reduce the taxpayer’s liability for tax under chapter 

1 of such Code (26 U.S.C. ch. 1) for a taxable year before 

the taxable year in which the withdrawal occurs—

‘‘(A) that portion shall not be taken into account under 

paragraph (1); and 

‘‘(B) an amount equal to that portion shall be allowed 

as a deduction under section 172 of such Code (26 U.S.C. 

172) for the taxable year in which the withdrawal occurs. 

‘‘(4) COORDINATION WITH DEDUCTION FOR NET OPERATING

LOSSES.—A nonqualified withdrawal excluded from gross 

income under paragraph (1) shall be excluded in determining 
H. R. 1442—115

taxable income under section 172(b)(2) of such Code (26 U.S.C. 

172(b)(2)). 

‘‘§ 53512. FIFO and LIFO withdrawals 

‘‘(a) FIFO.—Except as provided in subsection (b), an amount 

withdrawn from an account under this chapter shall be treated 

as withdrawn on a first-in-first-out basis. 

‘‘(b) LIFO.—An amount withdrawn from an account under this 

chapter shall be treated as withdrawn on a last-in-first-out basis 

if it is—

‘‘(1) a nonqualified withdrawal for research, development, 

and design expenses incident to new and advanced vessel 

design, machinery, and equipment; or 

‘‘(2) an amount treated as a nonqualified withdrawal under 

section 53510(d) of this title. 

‘‘§ 53513. Corporate reorganizations and partnership 

changes 

‘‘Under joint regulations—

‘‘(1) a transfer of a capital construction fund from one 

person to another person in a transaction to which section 

381 of the Internal Revenue Code of 1986 (26 U.S.C. 381) 

applies may be treated as if the transaction is not a nonqualified 

withdrawal; and 

‘‘(2) a similar rule shall be applied to a continuation of 

a partnership (within the meaning of subchapter K of chapter 

1 of such Code (26 U.S.C. 701 et seq.)). 

‘‘§ 53514. Relationship of old fund to new fund 

‘‘(a) DEFINITION.—In this section, the term ‘old fund’ means 

a capital construction fund maintained before October 21, 1970. 

‘‘(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining 

an old fund may elect to continue the old fund, but may not—

‘‘(1) hold amounts in the old fund beyond the expiration 

date provided in the agreement under which the old fund 

is maintained (determined without regard to an extension or 

renewal made after April 14, 1970); or 

‘‘(2) maintain simultaneously the old fund and a new fund 

established under this chapter. 

‘‘(c) APPLICATION OF NEW FUND AGREEMENT TO OLD FUND

AMOUNTS.—If a person makes an agreement under this chapter 

to establish a new fund, the person may agree to extend the agreement to some or all of the amounts in an old fund. Each item 

in the old fund to be transferred shall be transferred in a nontaxable 

transaction to the appropriate account in the new fund. For purposes of section 53511(c)(3) of this title, the date of the deposit 

of an item so transferred shall be July 1, 1971, or the date of 

the deposit in the old fund, whichever is later. 

‘‘§ 53515. Records and reports 

‘‘A person maintaining a fund under this chapter shall keep 

records and make reports as required by the Secretary or the 

Secretary of the Treasury. 
H. R. 1442—116

‘‘§ 53516. Termination of agreement after change in regulations 

‘‘If, after an agreement has been made under this chapter, 

a change is made either in the joint regulations or in the regulations 

prescribed by the Secretary under this chapter that could have 

a substantial effect on the rights or duties of a person maintaining 

a fund under this chapter, that person may terminate the agreement. 

‘‘§ 53517. Reports 

‘‘(a) IN GENERAL.—Within 120 days after the close of each 

calendar year, the Secretary of Transportation and the Secretary 

of Commerce each shall provide the Secretary of the Treasury 

a written report on the capital construction funds under the particular Secretary’s jurisdiction for the calendar year. 

‘‘(b) CONTENTS.—The report shall state the name and taxpayer 

identification number of each person—

‘‘(1) establishing a capital construction fund during the 

calendar year; 

‘‘(2) maintaining a capital construction fund on the last 

day of the calendar year; 

‘‘(3) terminating a capital construction fund during the 

calendar year; 

‘‘(4) making a deposit to or withdrawal from a capital 

construction fund during the calendar year, and the amount 

of the deposit or withdrawal; or 

‘‘(5) having been determined during the calendar year to 

have failed to fulfill a substantial obligation under a capital 

construction fund agreement to which the person is a party.

‘‘CHAPTER 537—LOANS AND GUARANTEES

‘‘SUBCHAPTER I—GENERAL 

‘‘Sec. 

‘‘53701. Definitions. 

‘‘53702. General authority. 

‘‘53703. Application procedures. 

‘‘53704. Funding limits. 

‘‘53705. Pledge of United States Government. 

‘‘53706. Eligible purposes of obligations. 

‘‘53707. Findings related to obligors and operators. 

‘‘53708. Findings related to economic soundness. 

‘‘53709. Amount of obligations. 

‘‘53710. Contents of obligations. 

‘‘53711. Security interest. 

‘‘53712. Monitoring financial condition and operations of obligor. 

‘‘53713. Administrative fees. 

‘‘53714. Guarantee fees. 

‘‘53715. Escrow fund. 

‘‘53716. Deposit fund. 

‘‘53717. Management of funds in the Treasury. 

‘‘53718. Annual report to Congress. 

‘‘SUBCHAPTER II—DEFAULT PROVISIONS 

‘‘53721. Rights of obligee. 

‘‘53722. Actions by Secretary. 

‘‘53723. Payments by Secretary and issuance of obligations. 

‘‘53724. Rights to secured property. 

‘‘53725. Actions against obligor. 

‘‘SUBCHAPTER III—PARTICULAR PROJECTS 

‘‘53731. Commercial demonstration ocean thermal energy conversion facilities and 

plantships. 
H. R. 1442—117

‘‘53732. Eligible export vessels. 

‘‘53733. Shipyard modernization and improvement. 

‘‘53734. Replacement of vessels because of changes in operating standards. 

‘‘53735. Fisheries financing and capacity reduction.

‘‘SUBCHAPTER I—GENERAL 

‘‘§ 53701. Definitions 

‘‘In this chapter: 

‘‘(1) ACTUAL COST.—The term ‘actual cost’ means the sum 

of—

‘‘(A) all amounts paid by or for the account of the 

obligor as of the date on which a determination is made 

under section 53715(d)(1) of this title; and 

‘‘(B) all amounts that the Secretary reasonably estimates the obligor will become obligated to pay from time 

to time thereafter, for the construction, reconstruction, or 

reconditioning of the vessel, including guarantee fees that 

will become payable under section 53714 of this title in 

connection with all obligations issued for construction, 

reconstruction, or reconditioning of the vessel or equipment 

to be delivered, and all obligations issued for the delivered 

vessel or equipment. 

‘‘(2) CONSTRUCTION, RECONSTRUCTION, AND RECONDI- TIONING.—The terms ‘construction’, ‘reconstruction’, and 

‘reconditioning’ include designing, inspecting, outfitting, and 

equipping. 

‘‘(3) DEPRECIATED ACTUAL COST.—The term ‘depreciated 

actual cost’ of a vessel means—

‘‘(A) if the vessel was not reconstructed or 

reconditioned, the actual cost of the vessel depreciated 

on a straight line basis over the useful life of the vessel 

as determined by the Secretary, not to exceed 25 years 

from the date of delivery by the builder; or 

‘‘(B) if the vessel was reconstructed or reconditioned, 

the sum of—

‘‘(i) the actual cost of the vessel depreciated on 

a straight line basis from the date of delivery by the 

builder to the date of the reconstruction or reconditioning, using the original useful life of the vessel, 

and from the date of the reconstruction or reconditioning, using a useful life of the vessel determined 

by the Secretary; and 

‘‘(ii) any amount paid or obligated to be paid for 

the reconstruction or reconditioning, depreciated on 

a straight line basis using a useful life of the vessel 

determined by the Secretary. 

‘‘(4) ELIGIBLE EXPORT VESSEL.—The term ‘eligible export 

vessel’ means a vessel that—

‘‘(A) is constructed, reconstructed, or reconditioned in 

the United States for use in world-wide trade; and 

‘‘(B) will, on delivery or redelivery, become or remain 

documented under the laws of a country other than the 

United States. 

‘‘(5) FISHERY FACILITY.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 

term ‘fishery facility’ means—

‘‘(i) for operations on land—
H. R. 1442—118

‘‘(I) a structure or appurtenance thereto 

designed for the unloading and receiving from vessels, the processing, the holding pending processing, the distribution after processing, or the 

holding pending distribution, of fish from a fishery; 

‘‘(II) the land necessary for the structure or 

appurtenance; and 

‘‘(III) equipment that is for use with the structure or appurtenance and that is necessary for 

performing a function referred to in subclause (I); 

‘‘(ii) for operations not on land, a vessel built in 

the United States and used for, equipped to be used 

for, or of a type normally used for, the processing 

of fish; or 

‘‘(iii) for aquaculture, including operations on land 

or elsewhere—

‘‘(I) a structure or appurtenance thereto 

designed for aquaculture; 

‘‘(II) the land necessary for the structure or 

appurtenance; 

‘‘(III) equipment that is for use with the structure or appurtenance and that is necessary for 

performing a function referred to in subclause (I); 

and 

‘‘(IV) a vessel built in the United States and 

used for, equipped to be used for, or of a type 

normally used for, aquaculture. 

‘‘(B) REQUIRED OWNERSHIP.—Under subparagraph (A), 

the structure, appurtenance, land, equipment, or vessel 

must be owned by—

‘‘(i) an individual who is a citizen of the United 

States; or 

‘‘(ii) an entity that is a citizen of the United States 

under section 50501 of this title and that is at least 

75 percent owned (as determined under that section) 

by citizens of the United States. 

‘‘(6) FISHING VESSEL.—The term ‘fishing vessel’ has the 

meaning given that term in section 3 of the Magnuson-Stevens 

Fishery Conservation and Management Act (16 U.S.C. 1802), 

and any reference in this chapter to a vessel designed principally for commercial use in the fishing trade or industry 

is deemed to be a reference to a fishing vessel. 

‘‘(7) MORTGAGE.—The term ‘mortgage’ includes—

‘‘(A) a preferred mortgage as defined in section 31301 

of this title; and 

‘‘(B) a mortgage on a vessel that will become a preferred mortgage when filed or recorded under chapter 313 

of this title. 

‘‘(8) OBLIGATION.—The term ‘obligation’ means an 

instrument of indebtedness issued for a purpose described in 

section 53706 of this title, except—

‘‘(A) an obligation issued by the Secretary under section 

53723 of this title; and 

‘‘(B) an obligation eligible for investment of funds under 

section 53715(f) or 53717 of this title. 

‘‘(9) OBLIGEE.—The term ‘obligee’ means the holder of an 

obligation. 
H. R. 1442—119

‘‘(10) OBLIGOR.—The term ‘obligor’ means a party primarily 

liable for payment of the principal of or interest on an obligation. 

‘‘(11) OCEAN THERMAL ENERGY CONVERSION FACILITY OR

PLANTSHIP.—The term ‘ocean thermal energy conversion facility 

or plantship’ means an at-sea facility or vessel, whether mobile, 

floating unmoored, moored, or standing on the seabed, that 

uses temperature differences in ocean water to produce electricity or another form of energy capable of being used directly 

to perform work, and includes—

‘‘(A) equipment installed on the facility or vessel to 

use the electricity or other form of energy to produce, 

process, refine, or manufacture a product; 

‘‘(B) a cable or pipeline used to deliver the electricity, 

freshwater, or product to shore; and 

‘‘(C) other associated equipment and appurtenances 

of the facility or vessel to the extent they are located 

seaward of the high water mark. 

‘‘(12) SECRETARY.—The term ‘Secretary’ means—

‘‘(A) the Secretary of Commerce with respect to fishing 

vessels and fishery facilities; and 

‘‘(B) the Secretary of Transportation with respect to 

other vessels and general shipyard facilities (as defined 

in section 53733(a) of this title). 

‘‘(13) VESSEL.—The term ‘vessel’ means any type of vessel, 

whether in existence or under construction, including—

‘‘(A) a cargo vessel; 

‘‘(B) a passenger vessel; 

‘‘(C) a combination cargo and passenger vessel; 

‘‘(D) a tanker; 

‘‘(E) a tug or towboat; 

‘‘(F) a barge; 

‘‘(G) a dredge; 

‘‘(H) a floating drydock with a capacity of at least 

35,000 lifting tons and a beam of at least 125 feet between 

the wing walls; 

‘‘(I) an oceanographic research vessel; 

‘‘(J) an instruction vessel; 

‘‘(K) a pollution treatment, abatement, or control 

vessel; 

‘‘(L) a fishing vessel whose ownership meets the citizenship requirements under section 50501 of this title for 

documenting vessels to operate in the coastwise trade; and 

‘‘(M) an ocean thermal energy conversion facility or 

plantship that is or will be documented under the laws 

of the United States. 

‘‘§ 53702. General authority 

‘‘(a) IN GENERAL.—The Secretary, on terms the Secretary may 

prescribe, may guarantee or make a commitment to guarantee 

the payment of the principal of and interest on an obligation eligible 

to be guaranteed under this chapter. A guarantee or commitment 

to guarantee shall cover 100 percent of the principal and interest. 

‘‘(b) DIRECT LOANS FOR FISHERIES.— ‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

this chapter, any obligation involving a fishing vessel, fishery 

facility, aquaculture facility, individual fishing quota, or fishing 
H. R. 1442—120

capacity reduction program issued under this chapter after 

October 11, 1996, shall be a direct loan obligation for which 

the Secretary shall be the obligee, rather than an obligation 

issued to an obligee other than the Secretary and guaranteed 

by the Secretary. A direct loan obligation under this subsection 

shall be treated in the same manner and to the same extent 

as an obligation guaranteed under this chapter except with 

respect to provisions of this chapter that by their nature can 

only be applied to obligations guaranteed under this chapter. 

‘‘(2) INTEREST RATE.—Notwithstanding any other provision 

of this chapter, the annual rate of interest an obligor shall 

pay on a direct loan obligation under this subsection is 2 

percent plus the additional percent the Secretary must pay 

as interest to borrow from the Treasury the funds to make 

the loan. 

‘‘§ 53703. Application procedures 

‘‘(a) TIME FOR DECISION.—

‘‘(1) IN GENERAL.—The Secretary shall approve or deny 

an application for a loan guarantee under this chapter within 

270 days after the date on which the signed application is 

received by the Secretary. 

‘‘(2) EXTENSION.—On request by an applicant, the Secretary 

may extend the 270-day period in paragraph (1) to a date 

not later than 2 years after the date on which the signed 

application was received by the Secretary. 

‘‘(b) CERTIFICATION OF REVIEW.—The Secretary may not guarantee or make a commitment to guarantee an obligation under 

this chapter unless the Secretary certifies that a full and fair 

consideration of all the regulatory requirements, including economic 

soundness and financial requirements applicable to the obligor and 

related parties, and a thorough assessment of the technical, economic, and financial aspects of the loan application, has been made. 

‘‘§ 53704. Funding limits 

‘‘(a) GENERAL LIMITATIONS.—The total unpaid principal amount 

of obligations guaranteed under this chapter and outstanding at 

one time may not exceed $12,000,000,000. Of that amount—

‘‘(1) $850,000,000 shall be limited to obligations related 

to fishing vessels and fishery facilities; and 

‘‘(2) $3,000,000,000 shall be limited to obligations related 

to eligible export vessels. 

‘‘(b) ADDITIONAL LIMITATIONS.—Additional limitations may not 

be imposed on new commitments to guarantee loans for any fiscal 

year, except in amounts established in advance by annual authorization laws. A vessel eligible for a guarantee under this chapter 

may not be denied eligibility because of its type. 

‘‘(c) LIMITS BASED ON RISK FACTORS.—

‘‘(1) DEFINITION.—In this subsection, the term ‘cost’ has 

the meaning given that term in section 502 of the Federal 

Credit Reform Act of 1990 (2 U.S.C. 661a). 

‘‘(2) SYSTEM OF RISK CATEGORIES.—The Secretary shall—

‘‘(A) establish, and update annually, a system of risk 

categories for obligations guaranteed under this chapter 

that categorizes the relative risk of guarantees based on 

the risk factors set forth in paragraph (4); 
H. R. 1442—121

‘‘(B) determine annually for each risk category a subsidy rate equivalent to the cost of obligations in the category, expressed as a percentage of the amount guaranteed 

for obligations in the category; and 

‘‘(C) ensure that each risk category is comprised of 

loans that are relatively homogeneous in cost and share 

characteristics predictive of defaults and other costs, given 

the facts known at the time of obligation or commitment, 

using a risk category system that is based on historical 

analysis of program data and statistical evidence concerning the likely costs of defaults or other costs that 

are expected to be associated with the loans in the category. 

‘‘(3) USE OF SYSTEM.—

‘‘(A) PLACING OBLIGATION IN CATEGORY.—Before 

making a guarantee under this chapter for an obligation, 

and annually for projects subject to a guarantee, the Secretary shall apply the risk factors specified in paragraph 

(4) to place the obligation in a risk category established 

under paragraph (2). 

‘‘(B) REDUCTION OF AVAILABLE AMOUNT.—The Secretary 

shall consider the total amount available to the Secretary 

for making guarantees under this chapter to be reduced 

by the amount determined by multiplying—

‘‘(i) the amount guaranteed under this chapter for 

an obligation; by 

‘‘(ii) the subsidy rate for the category in which 

the obligation is placed under subparagraph (A). 

‘‘(C) ESTIMATED COST.—The estimated cost to the 

United States Government of a guarantee under this 

chapter for an obligation is deemed to be the amount 

determined under subparagraph (B) for the obligation. 

‘‘(D) RESTRICTION ON FURTHER GUARANTEES.—The Secretary may not guarantee obligations under this chapter 

after the total amount available to the Secretary under 

appropriations laws for the cost of loan guarantees is 

considered to be reduced to zero under subparagraph (B). 

‘‘(4) RISK FACTORS.—The risk factors referred to in this 

subsection are—

‘‘(A) if applicable, the country risk for each eligible 

export vessel financed or to be financed by an obligation; 

‘‘(B) the period for which an obligation is guaranteed 

or to be guaranteed; 

‘‘(C) the amount of an obligation guaranteed or to 

be guaranteed in relation to the total cost of the project 

financed or to be financed by the obligation; 

‘‘(D) the financial condition of an obligor or applicant 

for a guarantee; 

‘‘(E) if applicable, other guarantees related to the 

project; 

‘‘(F) if applicable, the projected employment of each 

vessel or equipment to be financed with an obligation; 

‘‘(G) if applicable, the projected market that will be 

served by each vessel or equipment to be financed with 

an obligation; 

‘‘(H) the collateral provided for a guarantee for an 

obligation; 
H. R. 1442—122

‘‘(I) the management and operating experience of an 

obligor or applicant for a guarantee; 

‘‘(J) whether a guarantee under this chapter is or will 

be in effect during the construction period of the project; 

and 

‘‘(K) the concentration risk presented by an unduly 

large percentage of loans outstanding by any one borrower 

or group of affiliated borrowers. 

‘‘§ 53705. Pledge of United States Government 

‘‘(a) FULL FAITH AND CREDIT.—The full faith and credit of 

the United States Government is pledged to the payment of a 

guarantee made under this chapter, for both principal and interest, 

including interest (as may be provided for in the guarantee) accruing 

between the date of default under a guaranteed obligation and 

the date of payment in full of the guarantee. 

‘‘(b) INCONTESTABILITY.—A guarantee or commitment to guarantee made under this chapter is conclusive evidence of the eligibility of the obligation for the guarantee. The validity of a guarantee 

or commitment to guarantee made under this chapter is incontestable. 

‘‘§ 53706. Eligible purposes of obligations 

‘‘(a) IN GENERAL.—To be eligible for a guarantee under this 

chapter, an obligation must aid in any of the following: 

‘‘(1)(A) Financing (including reimbursement of an obligor 

for expenditures previously made for) the construction, 

reconstruction, or reconditioning of a vessel (including an 

eligible export vessel) designed principally for research, or for 

commercial use—

‘‘(i) in the coastwise or intercoastal trade; 

‘‘(ii) on the Great Lakes, or on bays, sounds, rivers, 

harbors, or inland lakes of the United States; 

‘‘(iii) in foreign trade as defined in section 109(b) of 

this title; 

‘‘(iv) as an ocean thermal energy conversion facility 

or plantship; 

‘‘(v) as a floating drydock in the construction, 

reconstruction, reconditioning, or repair of vessels; or 

‘‘(vi) as an eligible export vessel in worldwide trade. 

‘‘(B) A guarantee under subparagraph (A) may not be made 

more than one year after delivery of the vessel (or redelivery 

if the vessel was reconstructed or reconditioned) unless the 

proceeds of the obligation are used to finance the construction, 

reconstruction, or reconditioning of a vessel or of facilities or 

equipment related to marine operations. 

‘‘(2) Financing (including reimbursement of an obligor for 

expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a vessel owned by citizens 

of the United States and designed principally for research, 

or for commercial use in the fishing industry. 

‘‘(3) Financing the purchase, reconstruction, or reconditioning of a vessel or fishery facility—

‘‘(A) for which an obligation was guaranteed under 

this chapter; and 

‘‘(B) that, under subchapter II of this chapter—
H. R. 1442—123

‘‘(i) is a vessel or fishery facility for which an 

obligation was accelerated and paid; 

‘‘(ii) was acquired by the Federal Ship Financing 

Fund or successor account under section 53717 of this 

title; or 

‘‘(iii) was sold at foreclosure begun or intervened 

in by the Secretary. 

‘‘(4) Financing any part of the repayment to the United 

States Government of any amount of a construction-differential 

subsidy paid for a vessel. 

‘‘(5) Refinancing an existing obligation (regardless of 

whether guaranteed under this chapter) issued for a purpose 

described in paragraphs (1)–(4), including a short-term obligation incurred to obtain temporary funds with the intention 

of refinancing. 

‘‘(6) Financing or refinancing (including reimbursement of 

an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a fishery 

facility. 

‘‘(7) Financing or refinancing (including reimbursement of 

an obligor for expenditures previously made for) the purchase 

of an individual fishing quota in accordance with section 

303(d)(4) of the Magnuson-Stevens Fishery Conservation and 

Management Act (16 U.S.C. 1853(d)(4)). 

‘‘(b) NON-VESSELS TREATED AS VESSELS.—An obligation guaranteed under subsection (a)(6) or (7) shall be treated, for purposes 

of this chapter, in the same manner and to the same extent as 

an obligation that aids in financing the construction, reconstruction, 

reconditioning, or purchase of a vessel, except with respect to provisions that by their nature can only be applied to vessels. 

‘‘(c) PRIORITIES FOR CERTAIN VESSELS.—In guaranteeing or 

making a commitment to guarantee an obligation under this 

chapter, the Secretary shall give priority to—

‘‘(1) a vessel that is otherwise eligible for a guarantee 

and is constructed with assistance under subtitle D of the 

Maritime Security Act of 2003 (46 U.S.C. 53101 note); and 

‘‘(2) after applying paragraph (1), a vessel that is otherwise 

eligible for a guarantee and that the Secretary of Defense 

determines—

‘‘(A) is suitable for service as a naval auxiliary in 

time of war or national emergency; and 

‘‘(B) meets a shortfall in sealift capacity or capability. 

‘‘§ 53707. Findings related to obligors and operators 

‘‘(a) RESPONSIBLE OBLIGOR.—The Secretary may not guarantee 

or make a commitment to guarantee an obligation under this 

chapter unless the Secretary finds that the obligor is responsible 

and has the ability, experience, financial resources, and other qualifications necessary for the adequate operation and maintenance 

of each vessel that will serve as security for the guarantee. 

‘‘(b) OPERATORS OF LINER VESSELS.—The Secretary of Transportation may not guarantee or make a commitment to guarantee 

a loan for the construction, reconstruction, or reconditioning of 

a liner vessel under this chapter unless the Chairman of the Federal 

Maritime Commission certifies that the operator of the vessel has 

not been found by the Commission to have committed, within the 

previous 5 years—
H. R. 1442—124

‘‘(1) a violation of part A of subtitle IV of this title that 

involves unjust or unfair discriminatory treatment or undue 

or unreasonable prejudice or disadvantage with respect to a 

United States shipper, ocean transportation intermediary, 

ocean common carrier, or port; or 

‘‘(2) a violation of part B of subtitle IV of this title. 

‘‘(c) OPERATORS OF FISHING VESSELS.—The Secretary of Commerce may not guarantee or make a commitment to guarantee 

a loan for the construction, reconstruction, or reconditioning of 

a fishing vessel under this chapter if the operator of the vessel 

has been—

‘‘(1) held liable, or the vessel has been held liable in rem, 

for a civil penalty under section 308 of the Magnuson-Stevens 

Fishery Conservation and Management Act (16 U.S.C. 1858) 

and the operator has not paid the penalty; 

‘‘(2) found guilty of an offense under section 309 of the 

Magnuson-Stevens Fishery Conservation and Management Act 

(16 U.S.C. 1859) and not paid the assessed fine or served 

the assessed sentence; 

‘‘(3) held liable for a civil or criminal penalty under section 

105 of the Marine Mammal Protection Act of 1972 (16 U.S.C. 

1375) and not paid the assessed fine or served the assessed 

sentence; or 

‘‘(4) held liable for a civil penalty by the Coast Guard 

under this title or title 33 and not paid the assessed fine. 

‘‘(d) WAIVERS CONCERNING FINANCIAL CONDITION.—The Secretary shall prescribe regulations concerning circumstances under 

which waivers of, or exceptions to, otherwise applicable regulatory 

requirements concerning financial condition can be made. The regulations shall require that—

‘‘(1) the economic soundness requirements in section 

53708(a) of this title are met after the waiver of the financial 

condition requirement; and 

‘‘(2) the waiver shall provide for the imposition of other 

requirements on the obligor designed to compensate for the 

increased risk associated with the obligor’s failure to meet 

regulatory requirements applicable to financial condition. 

‘‘§ 53708. Findings related to economic soundness 

‘‘(a) BY SECRETARY OF TRANSPORTATION.—The Secretary of 

Transportation may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary finds 

that the property or project for which the obligation will be executed 

will be economically sound. In making that finding, the Secretary 

shall consider—

‘‘(1) the need in the particular segment of the maritime 

industry for new or additional capacity, including any impact 

on existing equipment for which a guarantee under this chapter 

is in effect; 

‘‘(2) the market potential for employment of the vessel 

over the life of the guarantee; 

‘‘(3) projected revenues and expenses associated with 

employment of the vessel; 

‘‘(4) any charter, contract of affreightment, transportation 

agreement, or similar agreement or undertaking relevant to 

the employment of the vessel; 

‘‘(5) other relevant criteria; and 
H. R. 1442—125

‘‘(6) for inland waterways, the need for technical improvements, including increased fuel efficiency or improved safety. 

‘‘(b) BY SECRETARY OF COMMERCE.—The Secretary of Commerce 

may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary finds, at or prior 

to the time the commitment is made or the guarantee becomes 

effective, that—

‘‘(1) the property or project for which the obligation will 

be executed will be economically sound; and 

‘‘(2) for a fishing vessel, the purpose of the financing or 

refinancing is consistent with—

‘‘(A) the wise use of the fisheries resources and the 

development, advancement, management, conservation, 

and protection of the fisheries resources; or 

‘‘(B) the need for technical improvements, including 

increased fuel efficiency or improved safety. 

‘‘(c) USED FISHING VESSELS AND FACILITIES.—The Secretary 

of Commerce may not guarantee or make a commitment to guarantee an obligation under this chapter for the purchase of a used 

fishing vessel or used fishery facility unless the vessel or facility 

will be—

‘‘(1) reconstructed or reconditioned in the United States 

and will contribute to the development of the United States 

fishing industry; or 

‘‘(2) used—

‘‘(A) in the harvesting of fish from an underused 

fishery; or 

‘‘(B) for a purpose described in the definition of ‘fishery 

facility’ in section 53701 of this title with respect to an 

underused fishery. 

‘‘(d) INDEPENDENT ANALYSIS.—The Secretary may make a determination that aspects of an application under this chapter require 

independent analysis to be conducted by third party experts due 

to risk factors associated with markets, technology, financial structures, or other risk factors identified by the Secretary. Any independent analysis conducted under this subsection shall be performed by a party chosen by the Secretary. 

‘‘(e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Notwithstanding any other provision of this chapter, the Secretary 

may make a determination that an application under this title 

requires additional equity because of increased risk factors associated with markets, technology, financial structures, or other risk 

factors identified by the Secretary. 

‘‘§ 53709. Amount of obligations 

‘‘(a) IN GENERAL.—The principal of an obligation may not be 

guaranteed in an amount greater than the amount determined 

by multiplying the percentage applicable under subsection (b) by—

‘‘(1) the amount paid by or for the account of the obligor 

(as determined by the Secretary, which determination shall 

be conclusive) for the construction, reconstruction, or reconditioning of the vessel used as security for the guarantee; or 

‘‘(2) if the obligor creates an escrow fund under section 

53715 of this title, the actual cost of the vessel. 

‘‘(b) LIMITATIONS ON AMOUNT BORROWED.— ‘‘(1) IN GENERAL.—Except as otherwise provided, the principal amount of an obligation guaranteed under this chapter 
H. R. 1442—126

may not exceed 75 percent of the actual cost or depreciated 

actual cost, as determined by the Secretary, of the vessel used 

as security for the guarantee. 

‘‘(2) CERTAIN APPROVED VESSELS.—The principal amount 

may not exceed 87.5 percent of the actual cost or depreciated 

actual cost if—

‘‘(A) the size and speed of the vessel are approved 

by the Secretary; 

‘‘(B) the vessel is or would have been eligible for mortgage aid for construction under section 509 of the Merchant 

Marine Act, 1936, or would have been eligible except that 

the vessel was built with a construction-differential subsidy 

and the subsidy has been repaid; and 

‘‘(C) the vessel is of a type described in that section 

for which the minimum down payment required by that 

section is 12.5 percent of the cost of the vessel. 

‘‘(3) BARGES.—For a barge constructed without a construction-differential subsidy or for which the subsidy has been 

repaid, the principal amount may not exceed 87.5 percent of 

the actual cost or depreciated actual cost. 

‘‘(4) FISHING VESSELS AND FISHERY FACILITIES.—For a 

fishing vessel or fishery facility, the principal amount may 

not exceed 80 percent of the actual cost or depreciated actual 

cost. However, debt for the vessel or facility may not be placed 

through the Federal Financing Bank. 

‘‘(5) OTEC.—For an ocean thermal energy conversion 

facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 percent 

of the actual cost or depreciated actual cost of the facility 

or plantship. 

‘‘(6) ELIGIBLE EXPORT VESSELS.—For an eligible export 

vessel, the principal amount may not exceed 87.5 percent of 

the actual cost or depreciated actual cost. 

‘‘(c) SECURITY INVOLVING MULTIPLE VESSELS.—The principal 

amount of an obligation having more than one vessel as security 

for the guarantee may not exceed the sum of the principal amounts 

allowable for all the vessels. 

‘‘(d) PROHIBITION ON UNIFORM PERCENTAGE LIMITATIONS.—The 

Secretary may not establish a percentage under any provision of 

subsection (b) that is to be applied uniformly to all guarantees 

or commitments to guarantee made under that provision. 

‘‘(e) PROHIBITION ON MINIMUM PRINCIPAL AMOUNT.—The Secretary may not establish, as a condition of eligibility for a guarantee 

under this chapter, a minimum principal amount for an obligation 

covering the reconstruction or reconditioning of a fishing vessel 

or fishery facility. For purposes of this chapter, the reconstruction 

or reconditioning of a fishing vessel or fishery facility does not 

include the routine minor repair or maintenance of the vessel 

or facility. 

‘‘§ 53710. Contents of obligations 

‘‘(a) IN GENERAL.—An obligation guaranteed under this chapter 

must—

‘‘(1) provide for payments by the obligor satisfactory to 

the Secretary; 

‘‘(2) provide for interest (exclusive of guarantee fees and 

other fees) at a rate not more than the annual rate on the 
H. R. 1442—127

unpaid principal that the Secretary determines is reasonable, 

considering the range of interest rates prevailing in the private 

market for similar loans and the risks assumed by the Secretary; 

‘‘(3) have a maturity date satisfactory to the Secretary, 

but—

‘‘(A) not more than 25 years after the date of delivery 

of the vessel used as security for the guarantee; or 

‘‘(B) if the vessel has been reconstructed or 

reconditioned, not more than the later of—

‘‘(i) 25 years after the date of delivery of the vessel; 

or 

‘‘(ii) the remaining years of useful life of the vessel 

as determined by the Secretary; and 

‘‘(4) provide, or a related agreement must provide, that 

if the vessel used as security for the guarantee is a delivered 

vessel, the vessel shall be—

‘‘(A) in class A–1, American Bureau of Shipping, or 

meet other standards acceptable to the Secretary, with 

all required certificates, including marine inspection certificates of the Coast Guard or, in the case of an eligible 

export vessel, of the appropriate foreign authorities under 

a treaty, convention, or other international agreement to 

which the United States is a party, and with all outstanding requirements and recommendations necessary for 

class retention accomplished, unless the Secretary permits 

a deferment of repairs necessary to meet these requirements; and 

‘‘(B) well equipped, in good repair, and in every respect 

seaworthy and fit for service. 

‘‘(b) PROVISIONS FOR CERTAIN PASSENGER VESSELS.—

‘‘(1) IN GENERAL.—With the Secretary’s approval, if the 

vessel used as security for the guarantee is a passenger vessel 

having the tonnage, speed, passenger accommodations, and 

other characteristics described in section 503 of the Merchant 

Marine Act, 1936, an obligation guaranteed under this chapter 

or a related agreement may provide that—

‘‘(A) the only recourse by the United States Government against the obligor for payments under the guarantee 

will be repossession of the vessel and assignment of insurance claims; and 

‘‘(B) the obligor’s liability for payments under the guarantee will be satisfied and discharged by the surrender 

of the vessel and all interest in the vessel to the Government in the condition described in paragraph (2). 

‘‘(2) SURRENDER OF VESSEL.—

‘‘(A) IN GENERAL.—On surrender, the vessel must be—

‘‘(i) free and clear of all liens and encumbrances 

except the security interest conveyed to the Secretary 

under this chapter; 

‘‘(ii) in class; and 

‘‘(iii) in as good order and condition (ordinary wear 

and tear excepted) as when acquired by the obligor. 

‘‘(B) COVERING DEFICIENCIES BY INSURANCE.—To the 

extent covered by insurance, a deficiency related to a 

requirement in subparagraph (A) may be satisfied by 
H. R. 1442—128

assignment of the obligor’s insurance claims to the Government. 

‘‘(c) OTHER PROVISIONS TO PROTECT SECURITY INTERESTS.—

An obligation guaranteed under this chapter and any related agreement must contain other provisions for the protection of the security 

interests of the Government (including acceleration, assumption, 

and subrogation provisions and the issuance of notes by the obligor 

to the Secretary), liens and releases of liens, payment of taxes, 

and other matters that the Secretary may prescribe. 

‘‘§ 53711. Security interest 

‘‘(a) IN GENERAL.—The Secretary may guarantee an obligation 

under this chapter only if the obligor conveys or agrees to convey 

to the Secretary a security interest the Secretary considers necessary to protect the interest of the United States Government. 

‘‘(b) MULTIPLE VESSELS AND TYPES OF SECURITY.—The security 

interest may relate to more than one vessel and may consist of 

more than one type of security. If the security interest relates 

to more than one vessel, the obligation may have the latest maturity 

date allowable under section 53710(a)(3) of this title for any of 

the vessels used as security for the guarantee. However, the Secretary may require such payments of principal prior to maturity, 

with respect to all related obligations, as the Secretary considers 

necessary to maintain adequate security for the guarantee. 

‘‘§ 53712. Monitoring financial condition and operations of 

obligor 

‘‘(a) IN GENERAL.—The Secretary shall monitor the financial 

condition and operations of the obligor on a regular basis during 

the term of the guarantee. The Secretary shall document the results 

of the monitoring on an annual or quarterly basis depending on 

the condition of the obligor. If the Secretary determines that the 

financial condition of the obligor warrants additional protections 

to the Secretary, the Secretary shall take appropriate action under 

subsection (b). If the Secretary determines that the financial condition of the obligor jeopardizes its continued ability to perform its 

responsibilities in connection with the guarantee of an obligation 

by the Secretary, the Secretary shall make an immediate determination whether default should take place and whether further measures described in subsection (b) should be taken to protect the 

interests of the Secretary while ensuring that program objectives 

are met. 

‘‘(b) CONTRACT PROVISIONS TO PROTECT SECRETARY.—The Secretary shall include provisions in a loan agreement with an obligor 

that provides additional authority to the Secretary to take action 

to limit potential losses in connection with a defaulted loan or 

a loan that is in jeopardy due to the deteriorating financial condition 

of the obligor. These provisions include requirements for additional 

collateral or greater equity contributions that are effective upon 

the occurrence of verifiable conditions relating to the obligor’s financial condition or the status of the vessel or shipyard project. 

‘‘§ 53713. Administrative fees 

‘‘(a) IN GENERAL.—The Secretary shall charge and collect from 

the obligor fees the Secretary considers reasonable for—

‘‘(1) investigating an application for a guarantee; 

‘‘(2) appraising property offered as security for a guarantee; 
H. R. 1442—129

‘‘(3) issuing a commitment; 

‘‘(4) providing services related to an escrow fund under 

section 53715 of this title; and 

‘‘(5) inspecting property during construction, reconstruction, 

or reconditioning. 

‘‘(b) TOTAL FEE LIMITATION.—The total fees under subsection 

(a) may not exceed 0.5 percent of the original principal amount 

of the obligations to be guaranteed. 

‘‘(c) FEES FOR INDEPENDENT ANALYSIS.—The Secretary may 

charge and collect fees to cover the costs of independent analysis 

under section 53708(d) of this title. Notwithstanding section 3302 

of title 31, any fee collected under this subsection shall—

‘‘(1) be credited as an offsetting collection to the account 

that finances the administration of the loan guarantee program; 

‘‘(2) be available for expenditure only to pay the costs 

of activities and services for which the fee is imposed; and 

‘‘(3) remain available until expended. 

‘‘§ 53714. Guarantee fees 

‘‘(a) REGULATIONS.—Subject to this section, the Secretary shall 

prescribe regulations to assess a fee for guaranteeing an obligation 

under this chapter. 

‘‘(b) COMPUTATION OF FEE.— ‘‘(1) IN GENERAL.—The amount of the fee for a guarantee 

under this chapter shall be equal to the sum of the amounts 

determined under paragraph (2) for the years in which the 

guarantee is in effect. 

‘‘(2) PRESENT VALUE FOR EACH YEAR.—The amount referred 

to in paragraph (1) for a year in which the guarantee is in 

effect is the present value of the amount calculated under 

paragraph (3). To determine the present value, the Secretary 

shall apply a discount rate determined by the Secretary of 

the Treasury, considering current market yields on outstanding 

obligations of the United States Government having periods 

to maturity comparable to the period to maturity for the 

guaranteed obligation. 

‘‘(3) CALCULATION OF AMOUNT.—The amount referred to 

in paragraph (2) shall be calculated by multiplying—

‘‘(A) the estimated average unpaid principal amount 

of the obligation that will be outstanding during the year 

(excluding the average amount, other than interest, on 

deposit during the year in an escrow fund under section 

53715 of this title); by 

‘‘(B) the fee rate set under paragraph (4). 

‘‘(4) SETTING FEE RATES.—To set the fee rate referred to 

in paragraph (3)(B), the Secretary shall establish a formula 

that—

‘‘(A) takes into account the security provided for the 

guaranteed obligation; and 

‘‘(B) is a sliding scale based on the creditworthiness 

of the obligor, using—

‘‘(i) the lowest allowable rate under paragraph (5) 

for the most creditworthy obligors; and 

‘‘(ii) the highest allowable rate under paragraph 

(5) for the least creditworthy obligors. 

‘‘(5) PERMISSIBLE RANGE OF RATES.—The fee rate set under 

paragraph (4) shall be—
H. R. 1442—130

‘‘(A) for a delivered vessel or equipment, at least 0.5 

percent and not more than 1 percent; and 

‘‘(B) for a vessel to be constructed, reconstructed, or 

reconditioned or equipment to be delivered, at least 0.25 

percent and not more than 0.5 percent. 

‘‘(c) WHEN FEE COLLECTED.—A fee for the guarantee of an 

obligation under this chapter shall be collected not later than the 

date on which an amount is first paid on the obligation. 

‘‘(d) FINANCING THE FEE.—A fee paid under this section is 

eligible to be financed under this chapter and shall be included 

in the actual cost of the obligation guaranteed. 

‘‘(e) NOT REFUNDABLE.—A fee paid under this section is not 

refundable. However, an obligor shall receive credit for the amount 

paid for the remaining term of the obligation if the obligation 

is refinanced and guaranteed under this chapter after the refinancing. 

‘‘§ 53715. Escrow fund 

‘‘(a) IN GENERAL.—If the proceeds of an obligation guaranteed 

under this chapter are to be used to finance the construction, 

reconstruction, or reconditioning of a vessel that will serve as security for a guarantee under this chapter, the Secretary may accept 

and hold in escrow, under an escrow agreement with the obligor, 

a portion of the proceeds of all obligations guaranteed under this 

chapter whose proceeds are to be so used which is equal to—

‘‘(1) the excess of—

‘‘(A) the principal amount of all obligations whose proceeds are to be so used; over 

‘‘(B) 75 percent or 87.5 percent, whichever is applicable 

under section 53709(b) of this title, of the amount paid 

by or for the account of the obligor for the construction, 

reconstruction, or reconditioning of the vessel; plus 

‘‘(2) any interest the Secretary may require on the amount 

described in paragraph (1). 

‘‘(b) SECURITY INVOLVING BOTH UNCOMPLETED AND DELIVERED

VESSELS.—If the security for the guarantee of an obligation relates 

both to a vessel to be constructed, reconstructed, or reconditioned 

and to a delivered vessel, the principal amount of the obligation 

shall be prorated for purposes of subsection (a) under regulations 

prescribed by the Secretary. 

‘‘(c) DISBURSEMENT BEFORE TERMINATION OF AGREEMENT.— ‘‘(1) PURPOSES.—The Secretary shall disburse amounts in 

the escrow fund, as specified in the escrow agreement, to—

‘‘(A) pay amounts the obligor is obligated to pay for—

‘‘(i) the construction, reconstruction, or reconditioning of a vessel used as security for the guarantee; 

and 

‘‘(ii) interest on the obligations; 

‘‘(B) redeem the obligations under a refinancing 

guaranteed under this chapter; and 

‘‘(C) pay any excess interest deposits to the obligor 

at times provided for in the escrow agreement. 

‘‘(2) MANNER OF PAYMENT.—If a payment becomes due 

under the guarantee before the termination of the escrow agreement, the amount in the escrow fund at the time the payment 

becomes due, including realized income not yet paid to the 

obligor, shall be paid into the appropriate account under section 
H. R. 1442—131

53717 of this title. The amount shall be credited against 

amounts due or to become due from the obligor to the Secretary 

on the guaranteed obligations or, to the extent not so required, 

be paid to the obligor. 

‘‘(d) PAYMENTS REQUIRED BEFORE DISBURSEMENT.—

‘‘(1) IN GENERAL.—No disbursement shall be made under 

subsection (c) to any person until the total amount paid by 

or for the account of the obligor from sources other than the 

proceeds of the obligation equals at least 25 percent or 12.5 

percent, whichever is applicable under section 53709(b) of this 

title, of the aggregate actual cost of the vessel, as previously 

approved by the Secretary. If the aggregate actual cost of 

the vessel has increased since the Secretary’s initial approval 

or if it increases after the first disbursement is permitted 

under this subsection, then no further disbursements shall 

be made under subsection (c) until the total amount paid by 

or for the account of the obligor from sources other than the 

proceeds of the obligation equals at least 25 percent or 12.5 

percent, as applicable, of the increase, as determined by the 

Secretary, in the aggregate actual cost of the vessel. This paragraph does not require the Secretary to consent to finance 

any increase in actual cost unless the Secretary determines 

that such an increase in the obligation meets all the terms 

and conditions of this chapter or other applicable law. 

‘‘(2) DOCUMENTED PROOF OF PROGRESS REQUIREMENT.—The 

Secretary shall, by regulation, establish a transparent, independent, and risk-based process for verifying and documenting 

the progress of projects under construction before disbursing 

guaranteed loan funds. At a minimum, the process shall require 

documented proof of progress in connection with the construction, reconstruction, or reconditioning of a vessel or vessels 

before disbursements are made from the escrow fund. The 

Secretary may require that the obligor provide a certificate 

from an independent party certifying that the requisite progress 

in construction, reconstruction, or reconditioning has taken 

place. 

‘‘(e) DISBURSEMENT ON TERMINATION OF AGREEMENT.— ‘‘(1) IN GENERAL.—If a payment has not become due under 

the guarantee before the termination of the escrow agreement, 

the balance of the escrow fund at the time of termination 

shall be disbursed to—

‘‘(A) prepay the excess of—

‘‘(i) the principal amount of all obligations whose 

proceeds are to be used to finance the construction, 

reconstruction, or reconditioning of the vessel used or 

to be used as security for the guarantee; over 

‘‘(ii) 75 percent or 87.5 percent, whichever is 

applicable under section 53709(b) of this title, of the 

actual cost of the vessel to the extent paid; and 

‘‘(B) pay interest on that prepaid amount of principal. 

‘‘(2) REMAINING BALANCE.—Any remaining balance of the 

escrow fund shall be paid to the obligor. 

‘‘(f) INVESTMENT.—The Secretary may invest and reinvest any 

part of an escrow fund in obligations of the United States Government with maturities such that the escrow fund will be available 

as required for purposes of the escrow agreement. Investment 

income shall be paid to the obligor when received. 
H. R. 1442—132

‘‘(g) TERMS TO PROTECT GOVERNMENT.—The escrow agreement 

shall contain other terms the Secretary considers necessary to protect fully the interests of the Government. 

‘‘§ 53716. Deposit fund 

‘‘(a) IN GENERAL.—There is a deposit fund in the Treasury 

for purposes of this section. The Secretary, in accordance with 

an agreement under subsection (b), may deposit into and hold 

in the fund cash belonging to an obligor to serve as collateral 

for a guarantee made under this chapter with respect to the obligor. 

‘‘(b) AGREEMENT.—The Secretary and an obligor shall make 

a reserve fund or other collateral account agreement to govern 

the deposit, withdrawal, retention, use, and reinvestment of cash 

of the obligor held in the fund. The agreement shall contain—

‘‘(1) terms and conditions required by this section; 

‘‘(2) terms that grant to the United States Government 

a security interest in all amounts deposited into the fund; 

and 

‘‘(3) any additional terms considered by the Secretary to 

be necessary to protect fully the interests of the Government. 

‘‘(c) INVESTMENT.—The Secretary may invest and reinvest any 

part of the amounts in the fund in obligations of the Government 

with maturities such that amounts in the fund will be available 

as required for purposes of the agreement under subsection (b). 

Cash balances in the fund in excess of current requirements shall 

be maintained in a form of uninvested funds, and the Secretary 

of the Treasury shall pay interest on these funds. 

‘‘(d) WITHDRAWALS.— ‘‘(1) IN GENERAL.—Cash deposited into the fund may not 

be withdrawn without the consent of the Secretary. 

‘‘(2) USE OF INCOME.—Subject to paragraph (3), the Secretary may pay any income earned on cash of an obligor deposited into the fund in accordance with the agreement with the 

obligor under subsection (b). 

‘‘(3) RETENTION AGAINST DEFAULT.—The Secretary may 

retain and offset any or all of the cash of an obligor in the 

fund, and any income realized thereon, as part of the Secretary’s 

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

on an obligation. 

‘‘§ 53717. Management of funds in the Treasury 

‘‘(a) DEFINITION.—In this section, the term ‘FCRA’ means the 

Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 

‘‘(b) LOAN GUARANTEES BY SECRETARY OF TRANSPORTATION.— ‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of 

Transportation shall account for payments and disbursements 

involving obligations guaranteed under this chapter and not 

subject to FCRA in an account in the Treasury entitled the 

Federal Ship Financing Fund Liquidating Account (a liquidating account as defined in FCRA). 

‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Transportation shall account for payments and disbursements involving 

obligations guaranteed under this chapter and subject to FCRA 

in a separate account in the Treasury entitled the Federal 

Ship Financing Guaranteed Loan Financing Account (a 

financing account as defined in FCRA). 

‘‘(c) LOAN GUARANTEES BY SECRETARY OF COMMERCE.—
H. R. 1442—133

‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of Commerce shall account for payments and disbursements involving 

obligations guaranteed under this chapter and not subject to 

FCRA in a separate account in the Treasury established for 

this purpose. 

‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Commerce 

shall account for payments and disbursements involving obligations guaranteed under this chapter and subject to FCRA in 

a separate account in the Treasury established for this purpose. 

‘‘(d) DIRECT LOANS BY SECRETARY OF COMMERCE.—The Secretary of Commerce shall account for payments and disbursements 

involving direct loans made under this chapter in a separate account 

in the Treasury established for this purpose. 

‘‘§ 53718. Annual report to Congress 

‘‘The Secretary of Transportation shall report to Congress 

annually on the loan guarantee program under this chapter. Each 

report shall include—

‘‘(1) the size, in dollars, of the portfolio of loans guaranteed; 

‘‘(2) the size, in dollars, of projects in the portfolio facing 

financial difficulties; 

‘‘(3) the number and type of projects covered; 

‘‘(4) a profile of pending loan applications; 

‘‘(5) the amount of appropriations available for new guarantees; 

‘‘(6) a profile of each project approved since the last report; 

and 

‘‘(7) a profile of any defaults since the last report. 

‘‘SUBCHAPTER II—DEFAULT PROVISIONS 

‘‘§ 53721. Rights of obligee 

‘‘(a) DEMANDS BY OBLIGEES.—Except as provided in subsection 

(c), if an obligor has continued in default for 30 days in the payment 

of principal or interest on an obligation guaranteed under this 

chapter, the obligee or the obligee’s agent may demand that the 

Secretary pay the unpaid principal amount of the obligation and 

the unpaid interest on the obligation to the date of payment. The 

demand must be made within the earlier of—

‘‘(1) a period that may be specified in the guarantee or 

a related agreement; or 

‘‘(2) 90 days from the date of the default. 

‘‘(b) PAYMENTS BY SECRETARY.— ‘‘(1) IN GENERAL.—If a demand is made under subsection 

(a), the Secretary shall pay to the obligee or the obligee’s 

agent the unpaid principal amount of the obligation and the 

unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—

‘‘(A) a period that may be specified in the guarantee 

or a related agreement; or 

‘‘(B) 30 days from the date of the demand. 

‘‘(2) IF NO EXISTING DEFAULT.—The Secretary is not 

required to make payment under this subsection if, within 

the appropriate period under paragraph (1), the Secretary finds 

that the obligor was not in default or that the default was 

remedied before the demand. 
H. R. 1442—134

‘‘(c) ASSUMPTION OF RIGHTS AND OBLIGATIONS BEFORE

DEMAND.—An obligee or the obligee’s agent may not demand payment under this section if the Secretary, before the demand and 

on terms that may be provided in the obligation or a related 

agreement, has assumed the obligor’s rights and duties under the 

obligation and any related agreement and made any payment in 

default. However, the guarantee of the obligation remains in effect 

after the Secretary’s assumption. 

‘‘§ 53722. Actions by Secretary 

‘‘(a) GENERAL AUTHORITY.—On default under an obligation or 

related agreement between the Secretary and the obligor, the Secretary, on terms that may be provided in the obligation or agreement, may—

‘‘(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify 

the obligee or the obligee’s agent of the default and the Secretary’s assumption; or 

‘‘(2) notify the obligee or the obligee’s agent of the default. 

‘‘(b) DEMANDS BY OBLIGEES.— ‘‘(1) DEMAND.—If the Secretary proceeds under subsection 

(a)(2), the obligee or the obligee’s agent may demand that 

the Secretary pay the unpaid principal amount of the obligation 

and the unpaid interest on the obligation. The demand must 

be made within the earlier of—

‘‘(A) a period that may be specified in the guarantee 

or a related agreement; or 

‘‘(B) 60 days from the date of the Secretary’s notice. 

‘‘(2) PAYMENT.—If a demand is made under paragraph (1), 

the Secretary shall pay to the obligee or the obligee’s agent 

the unpaid principal amount of the obligation and the unpaid 

interest on the obligation to the date of payment. Payment 

shall be made within the earlier of—

‘‘(A) a period that may be specified in the guarantee 

or a related agreement; or 

‘‘(B) 30 days from the date of the demand. 

‘‘(c) CONTINUED EFFECT OF GUARANTEE.—A guarantee of an 

obligation remains in effect after an assumption of the obligation 

by the Secretary. 

‘‘(d) ADDITIONAL RESPONSES.—If there is a default on an obligation, the Secretary shall conduct operations under this chapter 

in a manner that—

‘‘(1) maximizes the net present value return from the sale 

or disposition of assets associated with the obligation, including 

prompt referral to the Attorney General for collection as appropriate; 

‘‘(2) minimizes the amount of any loss realized in the resolution of the guarantee; 

‘‘(3) ensures adequate competition and fair and consistent 

treatment of offerors; and 

‘‘(4) requires appraisal of assets by an independent 

appraiser. 

‘‘§ 53723. Payments by Secretary and issuance of obligations 

‘‘(a) CASH PAYMENT.—Amounts required to be paid by the Secretary under section 53721 or 53722 of this title shall be paid 

in cash. 
H. R. 1442—135

‘‘(b) ISSUANCE OF OBLIGATIONS.—If amounts in the appropriate 

account under section 53717 of this title are not sufficient to make 

a payment required under section 53721 or 53722 of this title, 

the Secretary may issue obligations to the Secretary of the Treasury. 

The Secretary, with the approval of the Secretary of the Treasury, 

shall prescribe the form, denomination, maturity, and other terms 

(except the interest rate) of the obligations. The Secretary of the 

Treasury shall set the interest rate for the obligations, considering 

the current average market yield on outstanding marketable obligations of the United States Government of comparable maturities 

during the month before the obligations are issued. 

‘‘(c) PURCHASE OF OBLIGATIONS.—The Secretary of the Treasury 

shall purchase the obligations issued under this section. To purchase 

the obligations, the Secretary of the Treasury may use as a public 

debt transaction the proceeds from the sale of securities issued 

under chapter 31 of title 31. The purposes for which securities 

may be issued under that chapter are extended to include the 

purchase of obligations under this subsection. The Secretary of 

the Treasury may sell obligations purchased under this section. 

A redemption, purchase, or sale of the obligations by the Secretary 

of the Treasury is a public debt transaction of the Government. 

‘‘(d) DEPOSITS AND REDEMPTIONS.—The Secretary shall deposit 

amounts borrowed under this section in the appropriate account 

under section 53717 of this title and make redemptions of the 

obligations from that account. 

‘‘§ 53724. Rights to secured property 

‘‘(a) ACQUISITION OF SECURITY RIGHTS.—When the Secretary 

makes a payment on, or assumes, an obligation under section 

53721 or 53722 of this title, the Secretary acquires the rights 

under the security agreement with the obligor in the security held 

by the Secretary to guarantee the obligation. 

‘‘(b) USE AND DISPOSITION OF SECURED PROPERTY.—Notwithstanding any other law relating to the acquisition, handling, or 

disposal of property by the United States Government, the Secretary 

has the right, in the Secretary’s discretion, to complete, reconstruct, 

recondition, renovate, repair, maintain, operate, charter, or sell 

any property acquired under a security agreement with an obligor, 

or to place a vessel so acquired in the National Defense Reserve 

Fleet. The terms of a sale under this subsection shall be as approved 

by the Secretary. 

‘‘§ 53725. Actions against obligor 

‘‘(a) IN GENERAL.—For a default under a guaranteed obligation 

or related agreement, the Secretary may take any action against 

the obligor or another liable party that the Secretary considers 

necessary to protect the interests of the United States Government. 

A civil action may be brought in the name of the United States 

or the obligee. The obligee shall make available to the Government 

all records and evidence necessary to prosecute the action. 

‘‘(b) TITLE, POSSESSION, AND PURCHASE.—

‘‘(1) IN GENERAL.—The Secretary may—

‘‘(A) accept a conveyance of title to and possession 

of property from the obligor or another party liable to 

the Secretary; and 
H. R. 1442—136

‘‘(B) purchase the property for an amount not greater 

than the unpaid principal amount of the obligation and 

interest thereon. 

‘‘(2) PAYMENT OF EXCESS.—If, through the sale of property, 

the Secretary receives an amount of cash greater than the 

unpaid principal amount of the obligation, the unpaid interest 

on the obligation, and the expenses of collecting those amounts, 

the Secretary shall pay the excess to the obligor. 

‘‘SUBCHAPTER III—PARTICULAR PROJECTS 

‘‘§ 53731. Commercial demonstration ocean thermal energy 

conversion facilities and plantships 

‘‘(a) IN GENERAL.—Under subchapter I of this chapter, the 

Secretary may guarantee or make a commitment to guarantee 

the payment of the principal of and interest on an obligation that 

aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or 

reconditioning of a commercial demonstration ocean thermal energy 

conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities 

and plantships or a demonstrated 400 megawatt capacity, whichever 

comes first. 

‘‘(b) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise 

provided in this section, a guarantee or commitment to guarantee 

under this section is subject to all the provisions applicable to 

a guarantee or commitment to guarantee under subchapter I of 

this chapter. 

‘‘(c) ECONOMIC SOUNDNESS.—The required determination of economic soundness under section 53708 of this title applies to a 

guarantee or commitment to guarantee for that portion of a facility 

or plantship not to be supported with appropriated Federal funds. 

‘‘(d) REASONABLENESS OF RISK.—A guarantee or commitment 

to guarantee may not be made under this section unless the Secretary of Energy, in consultation with the Secretary, certifies to 

the Secretary that, for the facility or plantship for which the guarantee or commitment to guarantee is sought, there is sufficient 

guarantee of performance and payment to lower the risk to the 

United States Government to a reasonable level. In deciding 

whether to issue such a certification, the Secretary of Energy shall 

consider—

‘‘(1) the successful demonstration of the technology to be 

used in the facility at a scale sufficient to establish the likelihood of technical and economic viability in the proposed market; 

and 

‘‘(2) the need of the United States to develop new and 

renewable sources of energy and the benefits to be realized 

from the construction and successful operation of the facility 

or plantship. 

‘‘(e) AMOUNT OF OBLIGATION.—The total principal amount of 

an obligation guaranteed under this section may not exceed 87.5 

percent of—

‘‘(1) the actual cost or depreciated actual cost of the facility 

or plantship; or 

‘‘(2) if the facility or plantship is supported with appropriated Federal funds, the total principal amount of that portion 

of the actual cost or depreciated actual cost for which the 
H. R. 1442—137

obligor is obligated to secure financing under the agreement 

between the obligor and the Department of Energy or other 

Federal agency. 

‘‘(f) OTEC DEMONSTRATION FUND.—

‘‘(1) IN GENERAL.—There is a special subaccount, known 

as the OTEC Demonstration Fund, in the account established 

under section 53717(b)(1) of this title. 

‘‘(2) USE AND OPERATION.—The OTEC Demonstration Fund 

shall be used for obligation guarantees authorized under this 

section that do not qualify under subchapter I of this chapter. 

Except as otherwise provided in this section, the OTEC Demonstration Fund shall be operated in the same manner as 

the parent account. However—

‘‘(A) amounts received by the Secretary under subchapter I of this chapter related to guarantees or commitments to guarantee made under this section shall be deposited only in the OTEC Demonstration Fund; and 

‘‘(B) when obligations issued by the Secretary under 

section 53723 of this title related to the OTEC Demonstration Fund are outstanding, any amount received by the 

Secretary under subchapter I of this chapter related to 

ocean thermal energy conversion facilities or plantships 

shall be deposited in the OTEC Demonstration Fund. 

‘‘(3) TRANSFERS.—Assets in the OTEC Demonstration Fund 

may be transferred to the parent account when and to the 

extent the balance in the OTEC Demonstration Fund exceeds 

the total guarantees or commitments to guarantee made under 

this section then outstanding, plus obligations issued by the 

Secretary under section 53723 of this title related to the OTEC 

Demonstration Fund. 

‘‘(4) LIABILITY.—The parent account is not liable for a guarantee or commitment to guarantee made under this section. 

‘‘(5) MAXIMUM UNPAID PRINCIPAL AMOUNT.—The total 

unpaid principal amount of the obligations guaranteed with 

the backing of the OTEC Demonstration Fund and outstanding 

at any one time may not exceed $1,650,000,000. 

‘‘(g) ISSUANCE AND PAYMENT OF OBLIGATIONS.—Section 53723 

of this title applies to the OTEC Demonstration Fund. However, 

obligations issued by the Secretary under that section related to 

the OTEC Demonstration Fund shall be payable only from proceeds 

realized by the OTEC Demonstration Fund. 

‘‘(h) TAXATION OF INTEREST.—Interest on an obligation guaranteed under this section shall be included in gross income under 

chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. ch. 

1). 

‘‘§ 53732. Eligible export vessels 

‘‘(a) APPLICABLE TERMS.—The Secretary may guarantee an 

obligation for an eligible export vessel in accordance with—

‘‘(1) the terms applicable under this chapter for vessels 

documented under the laws of the United States; or 

‘‘(2) other terms the Secretary determines are more favorable than those terms and compatible with export credit terms 

offered by foreign governments for the sale of vessels built 

in foreign shipyards. 

‘‘(b) INTERAGENCY COUNCIL.—
H. R. 1442—138

‘‘(1) ESTABLISHMENT.—There is an interagency council to 

carry out this section. 

‘‘(2) COMPOSITION.—The council is composed of the following individuals or their designees: 

‘‘(A) The Secretary of Transportation, who is the chairman of the council. 

‘‘(B) The Secretary of the Treasury. 

‘‘(C) The Secretary of State. 

‘‘(D) The Assistant to the President for Economic Policy. 

‘‘(E) The United States Trade Representative. 

‘‘(F) The President and Chairman of the Export-Import 

Bank of the United States. 

‘‘(3) FUNCTIONS.—The council shall—

‘‘(A) obtain information on shipbuilding loan guarantees, direct and indirect subsidies, and other favorable 

treatment of shipyards provided by foreign governments 

to shipyards in competition with United States shipyards; 

‘‘(B) consult regularly with United States shipbuilders 

to obtain the essential information about international 

shipbuilding competition on which to set terms for loan 

guarantees under subsection (a)(2); and 

‘‘(C) provide guidance to the Secretary in establishing 

terms for loan guarantees under subsection (a)(2). 

‘‘(4) ANNUAL REPORT.—Not later than January 31 of each 

year, the Secretary shall submit to Congress a report on activities of the Secretary under this section during the preceding 

year. The report shall include—

‘‘(A) documentation of sources of information about 

assistance by governments of other countries to shipyards 

in those countries; and 

‘‘(B) a summary of recommendations made to the Secretary during the preceding year about applications submitted to the Secretary during that year for loan guarantees to construct eligible export vessels. 

‘‘(c) REQUIRED FINDINGS.—

‘‘(1) BENEFIT TO SHIPBUILDING INDUSTRY.—The Secretary 

may not guarantee or make a commitment to guarantee an 

obligation for an eligible export vessel unless the Secretary 

finds that the construction, reconstruction, or reconditioning 

of the vessel will aid in the transition of United States shipyards to commercial activities or will preserve shipbuilding 

assets that would be essential in time of war or national emergency. 

‘‘(2) PRIORITY OF DOCUMENTED VESSELS.—The Secretary 

may not make a commitment to guarantee an obligation for 

an eligible export vessel unless the Secretary determines that 

making the commitment will not result in denial of an economically sound application for a commitment to guarantee an 

obligation for a vessel documented under the laws of the United 

States and operating in the domestic or foreign commerce of 

the United States. The Secretary has sole discretion in making 

the determination. In making the determination, the Secretary 

shall consider—

‘‘(A) the status and economic soundness of pending 

applications for commitments to guarantee obligations for 

vessels documented under the laws of the United States 
H. R. 1442—139

that are operating or will be operating in the domestic 

or foreign commerce of the United States; and 

‘‘(B) the amount of guarantee authority available. 

‘‘(d) RESTRICTION ON TRANSFER OF VESSEL.—The Secretary may 

not guarantee or make a commitment to guarantee an obligation 

for an eligible export vessel unless the owner of the vessel agrees 

with the Secretary that the vessel will not be transferred to a 

country designated by the Secretary of Defense as a country whose 

interests are hostile to the interests of the United States. 

‘‘(e) REVIEW BY SECRETARY OF DEFENSE.—

‘‘(1) NOTIFICATION.—The Secretary shall promptly notify 

the Secretary of Defense of the receipt of an application for 

a loan guarantee for an eligible export vessel. 

‘‘(2) DISAPPROVAL.—The Secretary of Defense, within 30 

days after receiving the notice, may disapprove the guarantee 

based on an assessment of the potential use of the vessel 

in a manner that may harm the national security interests 

of the United States. The Secretary may not disapprove a 

guarantee solely because of the type of vessel to be constructed. 

‘‘(3) DELEGATION.—The authority of the Secretary of 

Defense to disapprove a guarantee under this subsection may 

be delegated only to a civilian officer of the Department of 

Defense appointed by the President by and with the advice 

and consent of the Senate. 

‘‘(4) PROHIBITION.—The Secretary may not make a loan 

guarantee disapproved by the Secretary of Defense under this 

subsection. 

‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary may not issue 

a commitment to guarantee an obligation for an eligible export 

vessel under this chapter after the last date on which such a 

commitment may be issued under any treaty or convention entered 

into after November 30, 1993, that prohibits guarantee of such 

an obligation. 

‘‘§ 53733. Shipyard modernization and improvement 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ADVANCED SHIPBUILDING TECHNOLOGY.—The term 

‘advanced shipbuilding technology’ includes—

‘‘(A) numerically controlled machine tools, robots, automated process control equipment, computerized flexible 

manufacturing systems, associated computer software, and 

other technology for improving shipbuilding and related 

industrial production that advance the state-of-the-art; and 

‘‘(B) novel techniques and processes designed to 

improve shipbuilding quality, productivity, and practice, 

and to promote sustainable development, including 

engineering design, quality assurance, concurrent 

engineering, continuous process production technology, 

energy efficiency, waste minimization, design for 

recyclability or parts reuse, inventory management, 

upgraded worker skills, and communications with customers and suppliers. 

‘‘(2) GENERAL SHIPYARD FACILITY.—The term ‘general shipyard facility’ means—

‘‘(A) for operations on land—
H. R. 1442—140

‘‘(i) a structure or appurtenance thereto designed 

for the construction, reconstruction, repair, rehabilitation, or refurbishment of a vessel, including a graving 

dock, building way, ship lift, wharf, or pier crane; 

‘‘(ii) the land necessary for the structure or appurtenance; and 

‘‘(iii) equipment that is for use with the structure 

or appurtenance and that is necessary for performing 

a function referred to in clause (i); and 

‘‘(B) for operations not on land, a vessel, floating drydock, or barge built in the United States and used for, 

equipped to be used for, or of a type normally used for, 

performing a function referred to in subparagraph (A)(i). 

‘‘(3) MODERN SHIPBUILDING TECHNOLOGY.—The term 

‘modern shipbuilding technology’ means the best available 

proven technology, techniques, and processes appropriate to 

enhancing the productivity of shipyards. 

‘‘(b) GENERAL AUTHORITY.—Under subchapter I of this chapter, 

the Secretary may guarantee or make a commitment to guarantee 

the payment of the principal of and interest on an obligation for 

advanced shipbuilding technology and modern shipbuilding technology of a general shipyard facility in the United States. Only 

a private shipyard is eligible to receive a guarantee. 

‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise 

provided in this section, a guarantee or commitment to guarantee 

under this section is subject to all the provisions applicable to 

a guarantee or commitment to guarantee under subchapter I of 

this chapter. 

‘‘(d) AMOUNT OF OBLIGATION.—The principal amount of an 

obligation guaranteed under this chapter may not exceed 87.5 percent of the actual cost of the advanced shipbuilding technology 

or modern shipbuilding technology. 

‘‘(e) TRANSFER OF AMOUNTS.—The Secretary may accept the 

transfer of amounts from a department, agency, or instrumentality 

of the United States Government and may use those amounts 

to cover the cost (as defined in section 502 of the Federal Credit 

Reform Act of 1990 (2 U.S.C. 661a)) of making guarantees or 

commitments to guarantee under this section. 

‘‘§ 53734. Replacement of vessels because of changes in operating standards 

‘‘(a) GENERAL AUTHORITY.—Notwithstanding any other provision of this chapter, the Secretary, on terms the Secretary may 

prescribe, may guarantee or make a commitment to guarantee 

the payment of the principal of and interest on an obligation that 

aids in financing or refinancing (including reimbursement of an 

obligor for expenditures previously made for) a contract for the 

construction or reconstruction of a vessel if—

‘‘(1) the vessel is designed and to be used for commercial 

use in coastwise, intercoastal, or foreign trade; 

‘‘(2) the construction or reconstruction is necessary to 

replace a vessel that cannot continue to be operated because 

of a change required by law in the standards for the operation 

of vessels, and the applicant for the guarantee or commitment 

would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels 

before the change; 
H. R. 1442—141

‘‘(3) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed 

or reconstructed under this section and agrees to employ vessels 

constructed or reconstructed under this section as replacements 

only for vessels made obsolete by the change in operating 

standards; 

‘‘(4) the capacity of the vessels to be constructed or 

reconstructed under this section will not increase the cargo 

carrying capacity of the vessels being replaced; 

‘‘(5) the Secretary has not determined that the market 

demand for the vessel over its useful life will diminish so 

as to make granting the guarantee fiduciarily imprudent; 

‘‘(6) the vessel, if to be reconstructed, will have a useful 

life of at least 15 years after the reconstruction; and 

‘‘(7) the Secretary has considered the criteria specified in 

section 53708(a)(3)–(5) of this title. 

‘‘(b) TERM AND AMOUNT OF OBLIGATION.— ‘‘(1) TERM.—The term of an obligation guaranteed under 

this section may not exceed 25 years. 

‘‘(2) AMOUNT.—The amount of an obligation guaranteed 

under this section may not exceed 87.5 percent of the actual 

cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary may not 

establish a percentage under this paragraph that is to be 

applied uniformly to all guarantees or commitments to guarantee made under this section. 

‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—A guarantee or 

commitment to guarantee under this section is also subject to 

sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) and (e), 

53709(a), 53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714, 

53717, and 53721–53725 of this title. 

‘‘(d) SECURITY AGAINST DEFAULT.—The Secretary shall require 

by regulation that an applicant under this section provide adequate 

security against default. 

‘‘(e) GUARANTEE FEES.—The Secretary may establish a fee for 

the guarantee of an obligation under this section that is in addition 

to the fee established under section 53714 of this title. The fee 

may be—

‘‘(1) an annual fee of not more than an additional 1 percent 

added to the fee established under section 53714 of this title; 

or 

‘‘(2) a fee based on the amount of the obligation versus 

the percentage of the obligor’s fleet being replaced by vessels 

constructed or reconstructed under this section. 

‘‘§ 53735. Fisheries financing and capacity reduction 

‘‘(a) DEFINITION.—In this section, the term ‘program’ means 

a fishing capacity reduction program established under section 312 

of the Magnuson-Stevens Fishery Conservation and Management 

Act (16 U.S.C. 1861a). 

‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee 

the repayment of debt obligations issued by entities under this 

section. Debt obligations to be guaranteed may be issued by any 

entity that has been approved by the Secretary and has agreed 

with the Secretary to conditions the Secretary considers necessary 

for this section to achieve the objective of the program and to 

protect the interest of the United States. 
H. R. 1442—142

‘‘(c) REQUIREMENTS OF OBLIGATIONS.—A debt obligation guaranteed under this section shall—

‘‘(1) be treated in the same manner and to the same extent 

as other obligations guaranteed under this chapter, except with 

respect to provisions of this chapter that by their nature cannot 

be applied to obligations guaranteed under this section; 

‘‘(2) have the fishing fees established under the program 

paid into a separate subaccount of the fishing capacity reduction 

fund established under this section; ‘‘(3) not exceed $100,000,000 in an unpaid principal amount 

outstanding at any one time for a program; 

‘‘(4) have such maturity (not to exceed 20 years), take 

such form, and contain such conditions as the Secretary determines necessary for the program to which they relate; 

‘‘(5) have as the exclusive source of repayment (subject 

to the second sentence of subsection (d)(2)) and as the exclusive 

payment security, the fishing fees established under the program; and 

‘‘(6) at the discretion of the Secretary be issued in the 

public market or sold to the Federal Financing Bank. 

‘‘(d) FISHING CAPACITY REDUCTION FUND.— ‘‘(1) IN GENERAL.—There is a separate account in the 

Treasury, known as the Fishing Capacity Reduction Fund. 

Within the Fund, at least one subaccount shall be established 

for each program into which shall be paid all fishing fees 

established under the program and other amounts authorized 

for the program. 

‘‘(2) AVAILABILITY OF AMOUNTS.—Amounts in the Fund shall 

be available, without appropriation or fiscal year limitation, 

to the Secretary to pay the cost of the program, including 

payments to financial institutions to pay debt obligations 

incurred by entities under this section. Funds available for 

this purpose from other amounts available for the program 

may also be used to pay those debt obligations. 

‘‘(3) INVESTMENT.—Amounts in the Fund that are not currently needed for the purpose of this section shall be kept 

on deposit or invested in obligations of the United States 

Government. 

‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations 

the Secretary considers necessary to carry out this section.

‘‘CHAPTER 539—WAR RISK INSURANCE

‘‘Sec. 

‘‘53901. Definitions. 

‘‘53902. Authority to provide insurance. 

‘‘53903. Insurable interests. 

‘‘53904. Liability insurance for persons involved in war or defense efforts. 

‘‘53905. Agency insurance. 

‘‘53906. Hull insurance valuation. 

‘‘53907. Reinsurance. 

‘‘53908. Additional insurance privately obtained. 

‘‘53909. War risk insurance revolving fund. 

‘‘53910. Administrative. 

‘‘53911. Civil actions for losses. 

‘‘53912. Expiration date.

‘‘§ 53901. Definitions 

‘‘In this chapter: 

‘‘(1) AMERICAN VESSEL.—The term ‘American vessel’ 

includes—
H. R. 1442—143

‘‘(A) a documented vessel with a registry or coastwise 

endorsement under chapter 121 of this title; 

‘‘(B) an undocumented vessel owned or chartered by 

or made available to the United States Government; and 

‘‘(C) a tug, barge, or other watercraft (whether or not 

documented) owned by a citizen of the United States and 

used in essential water transportation or in the fisheries, 

except only for sport fishing. 

‘‘(2) CARGO.—The term ‘cargo’ includes a loaded or empty 

container on a vessel. 

‘‘(3) TRANSPORTATION IN THE WATERBORNE COMMERCE OF

THE UNITED STATES.—The term ‘transportation in the waterborne commerce of the United States’ includes the operation 

of a vessel in the fisheries, except only for sport fishing. 

‘‘(4) WAR RISKS.—The term ‘war risks’ includes, to the 

extent the Secretary of Transportation determines—

‘‘(A) any part of a loss excluded from marine insurance 

coverage under a ‘free of capture or seizure’ clause or 

analogous clause; and 

‘‘(B) any other loss from a hostile act, including confiscation, expropriation, nationalization, or deprivation. 

‘‘§ 53902. Authority to provide insurance 

‘‘(a) IN GENERAL.—With the approval of the President, and 

after such consultation with interested agencies of United States 

Government as the President may require, the Secretary of 

Transportation may provide insurance and reinsurance against loss 

or damage from war risks as provided by this chapter whenever 

it appears to the Secretary that insurance adequate for the needs 

of the waterborne commerce of the United States cannot be obtained 

on reasonable terms and conditions from companies authorized 

to do insurance business in a State of the United States. 

‘‘(b) CONSIDERATION OF RISK.—Insurance or reinsurance under 

this chapter shall be based, insofar as practicable, on consideration 

of the risk involved. 

‘‘(c) AVAILABILITY OF VESSEL DURING WAR OR NATIONAL EMERGENCY.—Insurance or reinsurance for a vessel may be provided 

under this chapter only on the condition that the vessel will be 

available to the Government in time of war or national emergency. 

‘‘§ 53903. Insurable interests 

‘‘(a) IN GENERAL.—The Secretary of Transportation may provide 

insurance and reinsurance under this chapter for—

‘‘(1) an American vessel, including a vessel under construction; 

‘‘(2) a foreign vessel—

‘‘(A) owned by a citizen of the United States; or 

‘‘(B) engaged in transportation in the waterborne commerce of the United States or in such other transportation 

by water or such other services as the Secretary considers 

to be in the interest of the national defense or national 

economy of the United States, when so engaged; 

‘‘(3) cargo—

‘‘(A) shipped or to be shipped on a vessel insurable 

under this section, including by express or registered mail; 

‘‘(B) owned by a citizen or resident of the United States; 
H. R. 1442—144

‘‘(C) imported to or exported from the United States, 

or sold or purchased by a citizen or resident of the United 

States, under a contract of sale or purchase the terms 

of which provide that the risk of loss by war risks or 

the obligation to provide insurance against war risks is 

on a citizen or resident of the United States; or 

‘‘(D) shipped between ports in the United States; 

‘‘(4) disbursements, including advances to masters and general average disbursements, and freight and passage money 

of a vessel insurable under this section; 

‘‘(5) personal effects of an individual on a vessel insurable 

under this section; 

‘‘(6) loss of life, injury, or detention by an enemy of the 

United States after capture, with respect to an individual on 

a vessel insurable under this section; and 

‘‘(7) statutory or contractual obligations or other liabilities 

of a vessel insurable under this section or of the owner or 

charterer of such a vessel, of a nature customarily covered 

by insurance. 

‘‘(b) CONSIDERATIONS FOR FOREIGN VESSELS.—In determining 

whether to provide insurance or reinsurance for a foreign vessel, 

the Secretary shall consider the characteristics, employment, and 

general management of the vessel by the owner or charterer. 

‘‘(c) NON-WAR RISKS.—Insurance of a risk under subsection 

(a)(5)–(7), insofar as it involves a liability related to an individual 

on the vessel, may include risks other than war risks to the extent 

the Secretary considers advisable. 

‘‘§ 53904. Liability insurance for persons involved in war or 

defense efforts 

‘‘(a) IN GENERAL.—The Secretary of Transportation may provide 

insurance under this chapter against legal liability that a person 

may incur in providing services or facilities for a vessel if, in 

the opinion of the Secretary, the insurance—

‘‘(1) is required in prosecuting a war or for national defense; 

and 

‘‘(2) cannot be obtained at reasonable rates or on reasonable 

terms and conditions from approved companies authorized to 

do insurance business in a State of the United States. 

‘‘(b) LIMITATIONS.—Employer liability insurance and worker 

compensation insurance against legal liability to employees may 

not be provided under this section. 

‘‘§ 53905. Agency insurance 

‘‘(a) IN GENERAL.—With the approval of the President, an 

agency of the United States Government may obtain insurance 

provided for by this chapter from the Secretary of Transportation, 

except as provided in sections 17302 and 17303 of title 40. 

‘‘(b) PREMIUM WAIVERS.—With the approval of the President, 

the Secretary of Transportation may provide insurance under this 

chapter at the request of the Secretary of Defense and other agencies the President may prescribe, without payment of an insurance 

premium if the Secretary of Defense or agency agrees to indemnify 

the Secretary of Transportation against loss covered by the insurance. The Secretary of Defense and agencies may make such an 

indemnity agreement. 
H. R. 1442—145

‘‘(c) PRESIDENTIAL APPROVAL.—The signature of the President 

(or an official designated by the President) on the agreement shall 

be treated as the approval required by section 53902(a) of this 

title. 

‘‘§ 53906. Hull insurance valuation 

‘‘(a) STATED VALUATION.—The valuation in a hull insurance 

policy for actual or constructive total loss of the insured vessel 

shall be a stated valuation determined by the Secretary of Transportation. The stated valuation—

‘‘(1) shall exclude national defense features paid for by 

the United States Government; and 

‘‘(2) may not exceed the amount that would be payable 

if the ownership of the vessel had been requisitioned under 

chapter 563 of this title at the time the insurance attached 

under the policy. 

‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the 

insurance attaches under a policy referred to in subsection (a) 

or within 60 days after the Secretary determines the valuation, 

whichever is later, the insured may reject the valuation and pay, 

at the rate provided in the policy, premiums based on the asserted 

valuation the insured specifies at the time of rejection. However, 

the asserted valuation is not binding on the Government in any 

subsequent action on the policy. 

‘‘(c) AMOUNT OF CLAIM.—If a vessel is actually or constructively 

totally lost and the insured under a policy referred to in subsection 

(a) has not rejected the stated valuation determined by the Secretary, the amount of a claim adjusted, compromised, settled, 

adjudged, or paid may not exceed the stated valuation. However, 

if the insured has rejected the valuation, the insured—

‘‘(1) shall be paid, as a tentative advance only, 75 percent 

of the stated valuation; and 

‘‘(2) may bring a civil action against the United States 

in a court having jurisdiction of the claim to recover a valuation 

equal to the just compensation the court determines would 

have been payable if the ownership of the vessel had been 

requisitioned under chapter 563 of this title at the time the 

insurance attached under the policy. 

‘‘(d) ADJUSTING PREMIUMS.—If a court makes a determination 

as provided under subsection (c)(2), premiums paid under the policy 

shall be adjusted based on the court’s determination and the rates 

provided for in the policy. 

‘‘§ 53907. Reinsurance 

‘‘(a) IN GENERAL.—To the extent the Secretary of Transportation is authorized to provide insurance under this chapter, the 

Secretary may provide reinsurance to a company authorized to 

do insurance business in a State of the United States. The Secretary 

may obtain reinsurance from such a company for any insurance 

provided by the Secretary under this chapter. 

‘‘(b) RATES.—The Secretary may not provide reinsurance at 

rates less than, nor obtain reinsurance at rates more than, the 

rates established by the Secretary on the same or similar risks 

or the rates charged by the insurance company for the insurance 

reinsured, whichever is more advantageous to the Secretary. However, the Secretary may provide an allowance to the insurance 
H. R. 1442—146

company for the costs of services and facilities the company provides, in an amount the Secretary considers reasonable according 

to good business practice. The allowance to the company may not 

include any amount for soliciting or stimulating insurance business. 

‘‘§ 53908. Additional insurance privately obtained 

‘‘With the approval of the Secretary of Transportation, a person 

having an insurable interest in a vessel may obtain insurance 

on the vessel with other underwriting agents in addition to the 

insurance with the Secretary. The Secretary is not entitled to the 

benefit of the additional insurance. 

‘‘§ 53909. War risk insurance revolving fund 

‘‘(a) IN GENERAL.—There is a war risk insurance revolving 

fund in the Treasury. 

‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts 

appropriated to carry out this chapter and amounts received in 

carrying out this chapter. 

‘‘(c) PAYMENTS.—There shall be paid from the fund amounts 

for return premiums, losses, settlements, judgments, and all liabilities incurred by the United States Government under this chapter. 

‘‘(d) INVESTMENT.—The Secretary of Transportation may 

request the Secretary of the Treasury to invest such portion of 

the fund as is not, in the judgment of the Secretary of Transportation, required to meet the current needs of the fund. These 

investments shall be made by the Secretary of the Treasury in 

public debt securities of the Government, with maturities suitable 

to the needs of the fund, and bearing interest rates determined 

by the Secretary of the Treasury, taking into consideration current 

market yields on outstanding marketable obligations of the Government of comparable maturity. Interest and benefits from the securities shall be deposited in the fund. 

‘‘§ 53910. Administrative 

‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying 

out this chapter, the Secretary of Transportation may act in accordance with commercial practice in the marine insurance business. 

‘‘(b) REGULATIONS.—The Secretary may prescribe regulations 

the Secretary considers appropriate to carry out this chapter. 

‘‘(c) POLICIES, RATES, AND ANNUAL FEES.—The Secretary may 

prescribe and change forms and policies, and fix and change the 

amounts insured and rates of premium, under this chapter. 

‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an 

annual fee in an amount calculated to cover the expenses of processing applications for insurance, employing underwriting agents, 

and appointing experts under this chapter. 

‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may 

settle and pay claims, and pay judgments against the United States, 

related to insurance under this chapter. 

‘‘(f) UNDERWRITING AGENTS.—

‘‘(1) IN GENERAL.—The Secretary may, and when the Secretary finds it practical to do so shall, employ a domestic 

company or group of domestic companies, authorized to do 

marine insurance business in a State of the United States, 

to act as underwriting agent for the Secretary. The services 

of an underwriting agent may be used in adjusting claims, 

but a claim may not be paid until approved by the Secretary. 
H. R. 1442—147

‘‘(2) COMPENSATION.—The Secretary may allow the company or group of companies reasonable compensation for services as the underwriting agent. The compensation may include 

an allowance for expenses reasonably incurred by the agent, 

but may not include any amount for soliciting or stimulating 

business. 

‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in 

subsection (f)(2), the Secretary may not pay an insurance broker 

or other person acting in a similar intermediary capacity a fee 

or other consideration for participating in arranging insurance when 

the Secretary directly insures any of the risk. 

‘‘(h) EMPLOYMENT OF MARINE INSURANCE EXPERTS.—The Secretary, without regard to the laws and regulations on the employment of Federal employees, may appoint and prescribe the duties 

of experts in marine insurance as the Secretary considers necessary 

to carry out this chapter. 

‘‘(i) SERVICES OF OTHER GOVERNMENT AGENCIES.—With the 

consent of another agency of the United States Government, the 

Secretary may use information, services, facilities, officers, and 

employees of the agency in carrying out this chapter. 

‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may prescribe by regulation vessel location reporting requirements for a 

vessel insured under this chapter. 

‘‘§ 53911. Civil actions for losses 

‘‘(a) IN GENERAL.—If there is a disagreement about a loss 

insured under this chapter, a civil action in admiralty may be 

brought against the United States in the district court of the United 

States for the district in which the plaintiff or the plaintiff’s agent 

resides. If the plaintiff has no residence in the United States, 

the action may be brought in the United States District Court 

for the District of Columbia or in the district court for any district 

in which the Attorney General agrees to accept service. Any person 

who may have an interest in the insurance may be made a party, 

either initially or on the motion of either party. 

‘‘(b) EXCLUSIVE REMEDY.—A civil action against the United 

States under this section is exclusive of any other action by reason 

of the same subject matter against an officer, employee, or agent 

employed or retained by the Government under this chapter. 

‘‘(c) PROCEDURE.—A civil action under this section shall be 

heard and determined under chapter 309 of this title. 

‘‘(d) TOLLING OF LIMITATIONS PERIOD.—If a claim is filed with 

the Secretary of Transportation, the running of the limitations 

period for bringing a civil action is suspended until the Secretary 

denies the claim, and for 60 days thereafter. The Secretary is 

deemed to have denied the claim if the Secretary does not act 

on the claim within 6 months after the claim is filed, unless the 

Secretary for good cause shown agrees with the claimant on a 

different period for the Secretary to act on the claim. 

‘‘(e) INTERPLEADER.—If the Secretary acknowledges the indebtedness of the Government under the insurance and there is a 

dispute about the persons entitled to receive payment, the Government may bring a civil action interpleading those persons. The 

action shall be brought in the United States District Court for 

the District of Columbia or in the district court for the district 

in which any of those persons resides. A person not residing or 

found in the district may be made a party by service in any 
H. R. 1442—148

reasonable manner the court directs. If the court is satisfied that 

unknown persons might make a claim under the insurance, the 

court may direct service on those unknown persons by publication 

in the Federal Register. Judgment after service by publication in 

the Federal Register discharges the Government from further 

liability to all persons. 

‘‘§ 53912. Expiration date 

‘‘The authority of the Secretary of Transportation to provide 

insurance and reinsurance under this chapter expires on December 

31, 2010.

‘‘PART D—PROMOTIONAL PROGRAMS

‘‘CHAPTER 551—COASTWISE TRADE

‘‘Sec. 

‘‘55101. Application of coastwise laws. 

‘‘55102. Transportation of merchandise. 

‘‘55103. Transportation of passengers. 

‘‘55104. Transportation of passengers between Puerto Rico and other ports in the 

United States. 

‘‘55105. Transportation of hazardous waste. 

‘‘55106. Merchandise transferred between barges. 

‘‘55107. Empty cargo containers and barges. 

‘‘55108. Platform jackets. 

‘‘55109. Dredging. 

‘‘55110. Transportation of dredged material. 

‘‘55111. Towing. 

‘‘55112. Vessel escort operations and towing assistance. 

‘‘55113. Use of foreign documented oil spill response vessels. 

‘‘55114. Unloading fish from foreign vessels. 

‘‘55115. Supplies on fish processing vessels. 

‘‘55116. Canadian rail lines. 

‘‘55117. Great Lakes rail route. 

‘‘55118. Foreign railroads whose road enters by ferry, tugboat, or towboat. 

‘‘55119. Yukon River. 

‘‘55120. Transshipment of imported merchandise intended for immediate exportation. 

‘‘55121. Transportation of merchandise and passengers on Canadian vessels.

‘‘§ 55101. Application of coastwise laws 

‘‘(a) IN GENERAL.—Except as provided in subsection (b), the 

coastwise laws apply to the United States, including the island 

territories and possessions of the United States. 

‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to—

‘‘(1) American Samoa; 

‘‘(2) the Northern Mariana Islands, except as provided in 

section 502(b) of the Covenant To Establish a Commonwealth 

of the Northern Mariana Islands in Political Union With the 

United States of America (48 U.S.C. 1801 note); 

‘‘(3) Canton Island until the President declares by 

proclamation that the coastwise laws apply to Canton Island; 

or 

‘‘(4) the Virgin Islands until the President declares by 

proclamation that the coastwise laws apply to the Virgin 

Islands. 

‘‘§ 55102. Transportation of merchandise 

‘‘(a) DEFINITION.—In this section, the term ‘merchandise’ 

includes—

‘‘(1) merchandise owned by the United States Government, 

a State, or a subdivision of a State; and 
H. R. 1442—149

‘‘(2) valueless material. 

‘‘(b) REQUIREMENTS.—Except as otherwise provided in this 

chapter or chapter 121 of this title, a vessel may not provide 

any part of the transportation of merchandise by water, or by 

land and water, between points in the United States to which 

the coastwise laws apply, either directly or via a foreign port, 

unless the vessel—

‘‘(1) is wholly owned by citizens of the United States for 

purposes of engaging in the coastwise trade; and 

‘‘(2) has been issued a certificate of documentation with 

a coastwise endorsement under chapter 121 or is exempt from 

documentation but would otherwise be eligible for such a certificate and endorsement. 

‘‘(c) PENALTY.—Merchandise transported in violation of subsection (b) is liable to seizure by and forfeiture to the Government. 

Alternatively, an amount equal to the value of the merchandise 

(as determined by the Secretary of Homeland Security) or the 

actual cost of the transportation, whichever is greater, may be 

recovered from any person transporting the merchandise or causing 

the merchandise to be transported. 

‘‘§ 55103. Transportation of passengers 

‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter 

or chapter 121 of this title, a vessel may not transport passengers 

between ports or places in the United States to which the coastwise 

laws apply, either directly or via a foreign port, unless the vessel—

‘‘(1) is wholly owned by citizens of the United States for 

purposes of engaging in the coastwise trade; and 

‘‘(2) has been issued a certificate of documentation with 

a coastwise endorsement under chapter 121 or is exempt from 

documentation but would otherwise be eligible for such a certificate and endorsement. 

‘‘(b) PENALTY.—The penalty for violating subsection (a) is $300 

for each passenger transported and landed. 

‘‘§ 55104. Transportation of passengers between Puerto Rico 

and other ports in the United States 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) CERTIFICATE.—The term ‘certificate’ means a certificate 

of financial responsibility for indemnification of passengers for 

nonperformance of transportation issued by the Federal Maritime Commission under section 44102 of this title. 

‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ 

means a vessel of similar size, or offering similar service, as 

any other vessel transporting passengers under subsection (b). 

‘‘(b) EXEMPTION.—Except as otherwise provided in this section, 

a vessel not qualified to engage in the coastwise trade may transport 

passengers between a port in Puerto Rico and another port in 

the United States. 

‘‘(c) EXPIRATION OF EXEMPTION.—

‘‘(1) WHEN COASTWISE-QUALIFIED VESSEL OFFERING

SERVICE.—On a showing to the Secretary of the department 

in which the Coast Guard is operating, by the vessel owner 

or charterer, that a United States passenger vessel qualified 

to engage in the coastwise trade is offering or advertising 

passenger service between a port in Puerto Rico and another 

port in the United States pursuant to a certificate, the Secretary 
H. R. 1442—150

shall notify the owner or operator of each vessel transporting 

passengers under subsection (b) to terminate that transportation within 270 days after the Secretary’s notification. Except 

as provided in subsection (d), the authority to transport passengers under subsection (b) expires at the end of that 270-

day period. 

‘‘(2) WHEN NON-COASTWISE-QUALIFIED VESSEL OFFERING

SERVICE.—On a showing to the Secretary, by the vessel owner 

or charterer, that a United States passenger vessel not qualified 

to engage in the coastwise trade is offering or advertising 

passenger service between a port in Puerto Rico and another 

port in the United States pursuant to a certificate, the Secretary 

shall notify the owner or operator of each foreign vessel transporting passengers under subsection (b) to terminate that 

transportation within 270 days after the Secretary’s notification. Except as provided in subsection (d), the authority of 

a foreign vessel to transport passengers under subsection (b) 

expires at the end of that 270-day period. 

‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising 

the service described in subsection (c) has not begun that service 

within 270 days after the Secretary’s notification, the expiration 

provided by subsection (c) is delayed until 90 days after the vessel 

offering or advertising the service begins that service. 

‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that 

the service on which an expiration was based is no longer available, 

the expired authority to transport passengers is reinstated. 

‘‘§ 55105. Transportation of hazardous waste 

‘‘(a) IN GENERAL.—The transportation of hazardous waste, as 

defined in section 1004(5) of the Resource Conservation and 

Recovery Act of 1976 (42 U.S.C. 6903(5)), from a point in the 

United States to sea for incineration is deemed to be transportation 

of merchandise under section 55102 of this title. 

‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.— ‘‘(1) IN GENERAL.—Subsection (a) does not apply to 

transportation performed by a foreign ocean incineration vessel 

owned by or under construction on May 1, 1982, for a corporation wholly owned by citizens of the United States under section 

50501(a)–(c) of this title. 

‘‘(2) STANDARDS FOR INCINERATION EQUIPMENT.—Incineration equipment on a vessel described in paragraph (1) must 

meet standards of the Coast Guard and the Environmental 

Protection Agency. 

‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall 

be inspected by the Coast Guard, regardless of whether 

inspected by the nation in which it is registered. The inspection 

shall be the same as would be required of a vessel of the 

United States, including drydock inspection and internal examination of tanks and void spaces. The inspection may be made 

concurrently with an inspection by that nation or within one 

year after the initial issuance or next scheduled issuance of 

the Safety of Life at Sea Safety Construction Certificate. In 

making the inspection, the Coast Guard shall refer to the 

condition of the hull and superstructure established by the 

initial foreign certification as the basis for evaluating the current condition of the hull and superstructure. The Coast Guard 

shall allow the substitution of fittings, material, apparatus, 
H. R. 1442—151

equipment, and appliances different from those required for 

vessels of the United States if satisfied they are equivalent 

and at least as effective as those required for vessels of the 

United States. A satisfactory inspection under this paragraph 

shall be certified in writing by the Secretary of the department 

in which the Coast Guard is operating. 

‘‘(c) EFFECTIVE DATE.—Subsection (a) is not effective until an 

appropriate vessel has been built and documented under chapter 

121 of this title. 

‘‘§ 55106. Merchandise transferred between barges 

‘‘(a) IN GENERAL.—On terms and conditions the Secretary of 

Homeland Security may prescribe by regulation, the Secretary may 

suspend the application of section 55102 of this title to the transportation of merchandise that is transferred, when moving in the 

foreign trade of the United States, from a barge certified by the 

owner or operator as designed specifically for carriage on a vessel 

and carried regularly on a vessel in foreign trade, to another such 

barge owned or leased by the same owner or operator. However, 

this subsection does not apply to transportation between the continental United States and noncontiguous States, territories, or 

possessions to which the coastwise laws apply. 

‘‘(b) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This 

section applies to a vessel of foreign registry only if the Secretary 

of Homeland Security finds, based on information from the Secretary of State, that the government of the nation of registry extends 

reciprocal privileges to vessels of the United States. 

‘‘§ 55107. Empty cargo containers and barges 

‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on 

terms and conditions the Secretary of Homeland Security may 

prescribe by regulation, section 55102 of this title does not apply 

to the transportation of—

‘‘(1) empty cargo vans, empty lift vans, or empty shipping 

tanks; 

‘‘(2) equipment for use with cargo vans, lift vans, or shipping tanks; 

‘‘(3) empty barges specifically designed for carriage aboard 

a vessel and equipment (except propulsion equipment) for use 

with those barges; 

‘‘(4) empty instruments for international traffic exempted 

from the customs laws under section 322(a) of the Tariff Act 

of 1930 (19 U.S.C. 1322(a)); or 

‘‘(5) stevedoring equipment and material. 

‘‘(b) CONDITIONS.—

‘‘(1) PARAGRAPHS (1)–(4).—Paragraphs (1)–(4) of subsection 

(a) apply only if the items named are owned or leased by 

the owner or operator of the vessel and transported for its 

use in handling its cargo in foreign trade. 

‘‘(2) PARAGRAPH (5).—Paragraph (5) of subsection (a) applies 

only if the items named are—

‘‘(A) owned or leased by the owner or operator of the 

vessel or by the stevedoring company having the contract 

for the loading or unloading of the vessel; and 

‘‘(B) transported without charge for use in the handling 

of cargo in foreign trade. 
H. R. 1442—152

‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This 

section applies to a vessel of foreign registry only if the Secretary 

of Homeland Security finds, based on information from the Secretary of State, that the government of the nation of registry extends 

reciprocal privileges to vessels of the United States. 

‘‘§ 55108. Platform jackets 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) COASTWISE QUALIFIED VESSEL.—The term ‘coastwise 

qualified vessel’ means a vessel that has been issued a certificate of documentation with a coastwise endorsement under 

chapter 121 of this title. 

‘‘(2) PLATFORM JACKET.—The term ‘platform jacket’ refers 

to a single physical component and includes any type of offshore 

exploration, development, or production structure or component 

thereof, including—

‘‘(A) platform jackets; 

‘‘(B) tension leg or SPAR platform superstructures 

(including the deck, drilling rig and support utilities, and 

supporting structure); 

‘‘(C) hull (including vertical legs and connecting pontoons or vertical cylinder); 

‘‘(D) tower and base sections of a platform jacket; 

‘‘(E) jacket structures; and 

‘‘(F) deck modules (known as ‘topsides’). 

‘‘(b) AUTHORIZED TRANSPORTATION.—Section 55102 of this title 

does not apply to the transportation of a platform jacket in or 

on a non-coastwise qualified launch barge between two points in 

the United States, at one of which there is an installation or 

other device within the meaning of section 4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)), if—

‘‘(1) the launch barge was built before December 31, 2000, 

and has a launch capacity of at least 12,000 long tons; and 

‘‘(2) the Secretary of Transportation makes a determination, 

in accordance with procedures established under subsection 

(c), that a suitable coastwise qualified vessel is not available 

for use in the transportation and, if needed, launch or installation of a platform jacket. 

‘‘(c) PROCEDURES TO MAXIMIZE USE OF COASTWISE QUALIFIED

VESSELS.—The Secretary of Transportation shall adopt procedures 

implementing this section that are reasonably designed to provide 

timely information so as to maximize the use of coastwise qualified 

vessels. The procedures shall, among other things, establish that 

for purposes of this section, a coastwise qualified vessel shall be 

deemed to be not available only if—

‘‘(1) on application by an owner or operator for the use 

of a non-coastwise qualified launch barge for transportation 

of a platform jacket under this section (which application shall 

include all relevant information, including engineering details 

and timing requirements), the Secretary promptly publishes 

a notice in the Federal Register—

‘‘(A) describing the project and the platform jacket 

involved; 

‘‘(B) advising that all relevant information reasonably 

needed to assess the transportation requirements for the 

platform jacket will be made available to interested parties 

on request; and 
H. R. 1442—153

‘‘(C) requesting that information on the availability 

of coastwise qualified vessels be submitted within 30 days 

after publication of that notice; and 

‘‘(2)(A) no information is submitted to the Secretary within 

that 30 day period; or 

‘‘(B) the owner or operator of a coastwise qualified vessel 

submits information to the Secretary asserting that the owner 

or operator has a suitable coastwise qualified vessel available 

for the transportation, but the Secretary determines, within 

90 days after the notice is first published, that the coastwise 

qualified vessel is not suitable or reasonably available for the 

transportation. 

‘‘§ 55109. Dredging 

‘‘(a) IN GENERAL.—Except as provided in subsection (b), a vessel 

may engage in dredging in the navigable waters of the United 

States only if—

‘‘(1) the vessel is wholly owned by citizens of the United 

States for purposes of engaging in the coastwise trade; 

‘‘(2) the charterer, if any, is a citizen of the United States 

for purposes of engaging in the coastwise trade; and 

‘‘(3) the vessel has been issued a certificate of documentation with a coastwise endorsement under chapter 121 of this 

title or is exempt from documentation but would otherwise 

be eligible for such a certificate and endorsement. 

‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with 

a registry endorsement may engage in the dredging of gold in 

Alaska. 

‘‘(c) PENALTY.—If a vessel is operated in knowing violation 

of this section, the vessel and its equipment are liable to seizure 

by and forfeiture to the United States Government. 

‘‘§ 55110. Transportation of dredged material 

‘‘Section 55102 of this title applies to the transportation of 

valueless material or dredged material, regardless of whether it 

has commercial value, from a point in the United States or on 

the high seas within the exclusive economic zone, to another point 

in the United States or on the high seas within the exclusive 

economic zone. 

‘‘§ 55111. Towing 

‘‘(a) IN GENERAL.—Except when towing a vessel in distress, 

a vessel may not do any part of any towing described in subsection 

(b) unless the towing vessel—

‘‘(1) is wholly owned by citizens of the United States for 

purposes of engaging in the coastwise trade; and 

‘‘(2) has been issued a certificate of documentation with 

a coastwise endorsement under chapter 121 of this title or 

is exempt from documentation but would otherwise be eligible 

for such a certificate and endorsement. 

‘‘(b) APPLICABLE TOWING.—Subsection (a) applies to the towing 

of—

‘‘(1) a vessel between ports or places in the United States 

to which the coastwise laws apply, either directly or via a 

foreign port or place; 

‘‘(2) a vessel from point to point within the harbors of 

ports or places to which the coastwise laws apply; or 
H. R. 1442—154

‘‘(3) a vessel transporting valueless material or dredged 

material, regardless of whether it has commercial value, from 

a point in the United States or on the high seas within the 

exclusive economic zone, to another point in the United States 

or on the high seas within the exclusive economic zone. 

‘‘(c) PENALTIES.—

‘‘(1) OWNER AND MASTER.—The owner and master of a 

vessel towing another vessel in violation of this section are 

each liable for a penalty of at least $350 but not more than 

$1,100. A penalty under this paragraph constitutes a lien on 

the vessel. The lien is enforceable in a district court of the 

United States for any district in which the vessel is found. 

Clearance may not be granted to the vessel until the penalties 

have been paid. 

‘‘(2) VESSEL.—In addition to the penalties under paragraph 

(1), the towing vessel is liable for a penalty of $60 per ton 

based on the tonnage of each towed vessel. 

‘‘§ 55112. Vessel escort operations and towing assistance 

‘‘(a) IN GENERAL.—Except in the case of a vessel in distress, 

only a vessel of the United States may perform the following escort 

vessel operations within the navigable waters of the United States: 

‘‘(1) Operations that commence or terminate at a port or 

place in the United States. 

‘‘(2) Operations required by United States law or regulation. 

‘‘(3) Operations provided in whole or in part within or 

through navigation facilities owned, maintained, or operated 

by the United States Government or the approaches to those 

facilities, other than facilities operated by the St. Lawrence 

Seaway Development Corporation on the St. Lawrence River 

portion of the Seaway. 

‘‘(b) ESCORT VESSELS.—For purposes of this section, an escort 

vessel is—

‘‘(1) any vessel that is assigned and dedicated to assist 

another vessel, whether or not tethered to that vessel, solely 

as a safety precaution to assist in controlling the speed or 

course of the assisted vessel in the event of a steering or 

propulsion equipment failure, or any other similar emergency 

circumstance, or in restricted waters where additional assistance in maneuvering the vessel is required to ensure its safe 

operation; and 

‘‘(2) in the case of a vessel being towed under section 

55111 of this title, any vessel that is assigned and dedicated 

to the vessel being towed in addition to any towing vessel 

required under that section. 

‘‘(c) RELATIONSHIP TO OTHER LAW.—This section does not affect 

section 55111 of this title. 

‘‘(d) PENALTY.—A person violating this section is liable to the 

Government for a civil penalty of not more than $10,000 for each 

day during which the violation occurs. 

‘‘§ 55113. Use of foreign documented oil spill response vessels 

‘‘Notwithstanding any other provision of law, an oil spill 

response vessel documented under the laws of a foreign country 

may operate in waters of the United States on an emergency 

and temporary basis, for the purpose of recovering, transporting, 
H. R. 1442—155

and unloading in a United States port oil discharged as a result 

of an oil spill in or near those waters, if—

‘‘(1) an adequate number and type of oil spill response 

vessels documented under the laws of the United States cannot 

be engaged to recover oil from an oil spill in or near those 

waters in a timely manner, as determined by the Federal 

On-Scene Coordinator for a discharge or threat of a discharge 

of oil; and 

‘‘(2) the foreign country has by its laws accorded to vessels 

of the United States the same privileges accorded to vessels 

of the foreign country under this section. 

‘‘§ 55114. Unloading fish from foreign vessels 

‘‘(a) PROHIBITIONS.—Except as otherwise provided by this section or a treaty or convention to which the United States is a 

party, a foreign vessel may not unload, in a port of the United 

States—

‘‘(1) its catch of fish taken on board on the high seas 

or fish products processed from that catch of fish; or 

‘‘(2) fish or fish products taken on board that vessel on 

the high seas from a vessel engaged in fishing operations or 

the processing of fish or fish products. 

‘‘(b) REGULATIONS ON OBTAINING INFORMATION.—The Secretary 

of Commerce may prescribe regulations the Secretary considers 

necessary to obtain information on the transportation of fish products by vessels of the United States for foreign fish processing 

vessels to points in the United States. 

‘‘(c) VIRGIN ISLANDS.—

‘‘(1) IN GENERAL.—A foreign vessel of not more than 50 

feet overall in length may unload its catch of fresh fish (whole 

or with the heads, viscera, or fins removed, but not frozen, 

otherwise processed, or further advanced) in a port of the 

Virgin Islands for immediate consumption in those islands. 

Fish unloaded under this paragraph may be sold or transferred 

only for immediate consumption. In the absence of satisfactory 

evidence that a sale or transfer to an agent, representative, 

or employee of a freezer or cannery is for immediate consumption, the sale or transfer is deemed not to be for immediate 

consumption. This paragraph does not prohibit the freezing, 

smoking, or other processing of fresh fish by the ultimate 

consumer of the fish. 

‘‘(2) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded 

in the Virgin Islands that are retained, sold, or transferred, 

except as allowed by paragraph (1), are liable to seizure by 

and forfeiture to the United States Government. A person 

retaining, selling, transferring, buying, or receiving the fish 

is liable to the Government for a civil penalty of not more 

than $1,000 for each violation. A penalty or forfeiture under 

this paragraph may be compromised, modified, or remitted 

under section 2107(b) of this title. 

‘‘(d) NORTHERN MARIANA ISLANDS.—Subsection (a) does not 

apply to the Northern Mariana Islands. 
H. R. 1442—156

‘‘§ 55115. Supplies on fish processing vessels 

‘‘Section 55102 of this title does not apply to supplies aboard 

a United States documented fish processing vessel that are necessary and used for processing or assembling fishery products 

aboard such a vessel. 

‘‘§ 55116. Canadian rail lines 

‘‘Section 55102 of this title does not apply to the transportation 

of merchandise between points in the continental United States, 

including Alaska, over through routes in part over Canadian rail 

lines and connecting water facilities if the routes are recognized 

by the Surface Transportation Board and rate tariffs for the routes 

have been filed with the Board. 

‘‘§ 55117. Great Lakes rail route 

‘‘Section 55102 of this title does not apply to the transportation 

of merchandise loaded on a railroad car or to a motor vehicle 

with or without a trailer, and with its passengers or contents 

when accompanied by the operator, when the railroad car or motor 

vehicle is transported in a railroad car ferry operated between 

fixed terminals on the Great Lakes as part of a rail route, if—

‘‘(1) the car ferry is owned by a common carrier by water 

and operated as part of a rail route with the approval of 

the Surface Transportation Board; 

‘‘(2) the stock of the common carrier by water, or its predecessor, was owned or controlled by a common carrier by rail 

prior to June 5, 1920; 

‘‘(3) the stock of the common carrier owning the car ferry 

is, with the approval of the Board, now owned or controlled 

by a common carrier by rail; and 

‘‘(4) the car ferry is built in and documented under the 

laws of the United States. 

‘‘§ 55118. Foreign railroads whose road enters by ferry, tugboat, or towboat 

‘‘A foreign railroad, whose road enters the United States by 

ferry, tugboat, or towboat, may own and operate a vessel not having 

a coastwise endorsement in connection with the water transportation of the passenger, freight, express, baggage, and mail cars 

used by that road, together with the passengers, freight, express 

matter, baggage, and mails transported in those cars. However, 

the foreign railroad is subject to the same restrictions imposed 

by law on a vessel of the United States entering a port of the 

United States from the same foreign country. Except as otherwise 

authorized by this chapter, the ferry, tugboat, or towboat may 

not, under penalty of forfeiture, be used in the transportation of 

merchandise between ports or places in the United States to which 

the coastwise laws apply. 

‘‘§ 55119. Yukon River 

‘‘Section 55102 of this title does not apply to the transportation 

of merchandise on the Yukon River until the Alaska Railroad is 

completed and the Secretary of Transportation finds that proper 

facilities will be available for transportation by citizens of the 

United States to properly handle the traffic. 
H. R. 1442—157

‘‘§ 55120. Transshipment of imported merchandise intended 

for immediate exportation 

‘‘The Secretary of Homeland Security may prescribe regulations 

for the transshipment and transportation of merchandise that is 

imported into the United States by sea for immediate exportation 

to a foreign port by sea, or by a river, the right to ascend or 

descend which for the purposes of commerce is secured by treaty 

to the citizens of the United States and the subjects of a foreign 

power. 

‘‘§ 55121. Transportation of merchandise and passengers on 

Canadian vessels 

‘‘(a) BETWEEN ROCHESTER AND ALEXANDRIA BAY.—Until passenger service is established by vessels of the United States between 

the port of Rochester, New York, and the port of Alexandria Bay, 

New York, the Secretary of Homeland Security may issue annually 

permits to Canadian passenger vessels to transport passengers 

between those ports. Canadian vessels holding such a permit are 

not subject to section 55103 of this title. 

‘‘(b) WITHIN ALASKA OR BETWEEN ALASKA AND OTHER POINTS

IN THE UNITED STATES.—Until the Secretary of Transportation 

determines that service by vessels of the United States is available 

to provide the transportation described in paragraph (1) or (2), 

sections 55102 and 55103 of this title do not apply to the transportation on Canadian vessels of—

‘‘(1) passengers between ports in southeastern Alaska; or 

‘‘(2) passengers or merchandise between Hyder, Alaska, 

and other points in southeastern Alaska or in the United States 

outside Alaska.

‘‘CHAPTER 553—PASSENGER AND CARGO PREFERENCES

‘‘SUBCHAPTER I—GENERAL 

‘‘Sec. 

‘‘55301. Priority loading for coal. 

‘‘55302. Transportation of United States Government personnel. 

‘‘55303. Motor vehicles owned by United States Government personnel. 

‘‘55304. Exports financed by the United States Government. 

‘‘55305. Cargoes procured, furnished, or financed by the United States Government. 

‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF AGRICULTURAL 

COMMODITIES 

‘‘55311. Findings and purposes. 

‘‘55312. Determining prevailing world market price. 

‘‘55313. Exemption of certain agricultural exports from cargo preference provisions. 

‘‘55314. Transportation requirements for certain exports sponsored by the Secretary of Agriculture. 

‘‘55315. Minimum tonnage. 

‘‘55316. Financing the transportation of agricultural commodities. 

‘‘55317. Termination of subchapter. 

‘‘55318. Effect on other law. 

‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 

‘‘55331. Definitions. 

‘‘55332. Designating American Great Lakes vessels. 

‘‘55333. Exemption from restriction on transporting certain cargo. 

‘‘55334. Restrictions on operations. 

‘‘55335. Revocations and terminations of designations. 

‘‘55336. Civil penalty.
H. R. 1442—158

‘‘SUBCHAPTER I—GENERAL 

‘‘§ 55301. Priority loading for coal 

‘‘A vessel engaged in the coastwise transportation of coal produced in the United States, from a port in the United States 

to another port in the United States, shall be given priority in 

loading at any of those ports ahead of a waiting vessel engaged 

in the export transportation of coal produced in the United States. 

However, if the Secretary of Transportation finds that it is in 

the national interest, the Secretary may eliminate this priority 

loading at any port. The Secretary shall report to Congress within 

30 days an action eliminating priority loading under this section. 

‘‘§ 55302. Transportation of United States Government personnel 

‘‘(a) IN GENERAL.—An officer or employee of the United States 

Government traveling by sea on official business overseas or to 

or from a territory or possession of the United States shall travel 

and transport personal effects on a vessel documented under the 

laws of the United Sates if such a vessel is available, unless the 

necessity of the mission requires the use of a foreign vessel. 

‘‘(b) REGULATIONS.—The Administrator of General Services 

shall prescribe regulations under which agencies may not pay for 

or reimburse an officer or employee for travel or transportation 

expenses incurred on a foreign vessel in the absence of satisfactory 

proof of the necessity of using the vessel. 

‘‘§ 55303. Motor vehicles owned by United States Government personnel 

‘‘Notwithstanding any other law, privately-owned American 

shipping services may be used to transport motor vehicles owned 

by personnel of the United States Government whenever transportation of those vehicles at Government expense is otherwise authorized by law. 

‘‘§ 55304. Exports financed by the United States Government 

‘‘It is the sense of Congress that any loans made by an 

instrumentality of the United States Government to foster the 

exporting of agricultural or other products shall provide that the 

products may be transported only on vessels of the United States 

unless, as to any or all of those products, the Secretary of Transportation, after investigation, certifies to the instrumentality that vessels of the United States are not available in sufficient number, 

in sufficient tonnage capacity, on necessary schedules, or at reasonable rates. 

‘‘§ 55305. Cargoes procured, furnished, or financed by the 

United States Government 

‘‘(a) DEFINITION.—In this section, the term ‘privately-owned 

commercial vessel of the United States’ does not include a vessel 

that, after September 21, 1961, was built or rebuilt outside the 

United States or documented under the laws of a foreign country, 

until the vessel has been documented under the laws of the United 

States for at least 3 years. 

‘‘(b) MINIMUM TONNAGE.—When the United States Government 

procures, contracts for, or otherwise obtains for its own account, 

or furnishes to or for the account of a foreign country without 
H. R. 1442—159

provision for reimbursement, any equipment, materials, or commodities, within or without the United States, or advances funds or 

credits, or guarantees the convertibility of foreign currencies in 

connection with the furnishing of the equipment, materials, or 

commodities, the appropriate agencies shall take steps necessary 

and practicable to ensure that at least 50 percent of the gross 

tonnage of the equipment, materials, or commodities (computed 

separately for dry bulk carriers, dry cargo liners, and tankers) 

which may be transported on ocean vessels is transported on privately-owned commercial vessels of the United States, to the extent 

those vessels are available at fair and reasonable rates for commercial vessels of the United States, in a manner that will ensure 

a fair and reasonable participation of commercial vessels of the 

United States in those cargoes by geographic areas. 

‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Congress (by concurrent resolution or otherwise) may waive this section 

temporarily by—

‘‘(1) declaring the existence of an emergency justifying a 

waiver; and 

‘‘(2) notifying the appropriate agencies of the waiver. 

‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having responsibility under this section shall administer its programs with respect 

to this section under regulations prescribed by the Secretary of 

Transportation. The Secretary shall review the administration of 

those programs and report annually to Congress on their administration. 

‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF 

AGRICULTURAL COMMODITIES 

‘‘§ 55311. Findings and purposes 

‘‘(a) FINDINGS.—Congress finds that—

‘‘(1) a productive and healthy agricultural industry and 

a strong and active United States maritime industry are vitally 

important to the economic well-being and security of the United 

States; 

‘‘(2) both industries must compete in international markets 

increasingly dominated by foreign trade barriers and the subsidization practices of foreign governments; and 

‘‘(3) increased agricultural exports and the use of merchant 

vessels of the United States contribute positively to the United 

States balance of trade and generate employment opportunities 

in the United States. 

‘‘(b) PURPOSES.—The purposes of this subchapter are to—

‘‘(1) enable the Secretary of Agriculture to plan export 

programs effectively, by clarifying the ocean transportation 

requirements applicable to those programs; 

‘‘(2) take immediate and positive steps to promote the 

growth of the cargo-carrying capacity of the United States 

merchant marine; 

‘‘(3) expand international trade in United States agricultural commodities and products and develop, maintain, and 

expand markets for United States agricultural exports; 

‘‘(4) improve the efficiency of administration of both the 

commodity purchasing and selling activities and the ocean 

transportation activities associated with export programs sponsored by the Secretary; 
H. R. 1442—160

‘‘(5) stimulate and promote the agricultural and maritime 

industries of the United States and encourage cooperative 

efforts by both industries to address their common problems; 

and 

‘‘(6) provide for the appropriate disposition of these findings 

and purposes. 

‘‘§ 55312. Determining prevailing world market price 

‘‘(a) AGRICULTURAL COMMODITIES AND PRODUCTS.—The prevailing world market price for agricultural commodities or their 

products shall be determined under this subchapter under procedures prescribed by the Secretary of Agriculture. The Secretary 

shall prescribe the procedures by regulation, with notice and opportunity for public comment under section 553 of title 5. 

‘‘(b) SERVICES AND NON-AGRICULTURAL COMMODITIES AND

PRODUCTS.—If a determination of the prevailing world market price 

of any other type of materials, goods, equipment, or service is 

required to determine whether a barter or exchange transaction 

is subject to section 55314(b)(6) or (7) of this title, the determination 

shall be made by the Secretary of Agriculture in consultation with 

the heads of other appropriate agencies. 

‘‘§ 55313. Exemption of certain agricultural exports from 

cargo preference provisions 

‘‘Sections 55304 and 55305 of this title do not apply to export 

activities of the Secretary of Agriculture or the Commodity Credit 

Corporation under which—

‘‘(1) agricultural commodities or their products acquired 

by the Corporation are made available to United States 

exporters, users, processors, or foreign purchasers for the purpose of developing, maintaining, or expanding export markets 

for United States agricultural commodities or their products 

at prevailing world market prices; 

‘‘(2) payments are made available to United States 

exporters, users, or processors or, except as provided in section 

55314 of this title, cash grants are made available to foreign 

purchasers, for the purpose described in paragraph (1); 

‘‘(3) commercial credit guarantees are blended with direct 

credits from the Corporation to reduce the effective rate of 

interest on export sales of United States agricultural commodities or their products; 

‘‘(4) credit or credit guarantees for not more than 3 years 

are extended by the Corporation to finance or guarantee export 

sales of United States agricultural commodities or their products; or 

‘‘(5) agricultural commodities or their products owned or 

controlled by or under loan from the Corporation are exchanged 

or bartered for materials, goods, equipment, or services at least 

equal in value to the agricultural commodities or their products 

for which they are exchanged or bartered (determined on the 

basis of prevailing world market prices at the time of the 

exchange or barter), but this paragraph does not exempt from 

the cargo preference provisions referred to in section 55314(b) 

of this title any requirement otherwise applicable to the materials, goods, equipment, or services imported under the transaction. 
H. R. 1442—161

‘‘§ 55314. Transportation requirements for certain exports 

sponsored by the Secretary of Agriculture 

‘‘(a) MINIMUM TONNAGE.— ‘‘(1) IN GENERAL.—In addition to the requirement under 

section 55305 of this title for the transportation of a percentage 

of gross tonnage on commercial vessels of the United States, 

25 percent of the gross tonnage of agricultural commodities 

or their products specified in subsection (b) shall be transported 

each calendar year on commercial vessels of the United States 

that—

‘‘(A) are necessary for national security; and 

‘‘(B) if more than 25 years old, were rebuilt within 

the last 5 years and certified by the Secretary of Transportation as having a useful life of at least 5 years after 

that rebuilding. 

‘‘(2) CALENDAR YEAR.—To provide for effective and equitable 

administration of the cargo preference laws, the calendar year 

for the purpose of compliance with minimum percentage 

requirements is the 12-month period beginning October 1 of 

each year. 

‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to 

export activity (except inspection or weighing activities, other activities carried out for health or safety, or technical assistance provided 

in the handling of commercial transactions) of the Secretary of 

Agriculture or the Commodity Credit Corporation—

‘‘(1) carried out under the Agricultural Trade Development 

and Assistance Act of 1954 (7 U.S.C. 1691 et seq.); 

‘‘(2) carried out under section 416 of the Agricultural Act 

of 1949 (7 U.S.C. 1431); 

‘‘(3) carried out under the Bill Emerson Humanitarian 

Trust Act (7 U.S.C. 1736f–1); 

‘‘(4) under which agricultural commodities or their products 

are—

‘‘(A) donated through foreign governments or private 

or public agencies, including intergovernmental organizations; or 

‘‘(B) sold for foreign currencies or for dollars on credit 

terms of more than 10 years; 

‘‘(5) under which agricultural commodities or their products 

are made available for emergency food relief at less than prevailing world market prices; 

‘‘(6) under which a cash grant is made directly or through 

an intermediary to a foreign purchaser to enable the purchaser 

to obtain United States agricultural commodities or their products in an amount greater than the difference between the 

prevailing world market price and the United States market 

price, free along side vessel at a United States port; or 

‘‘(7) under which agricultural commodities owned or controlled by or under loan from the Corporation are exchanged 

or bartered for materials, goods, equipment, or services produced in foreign countries, except export activities described 

in section 55313(5) of this title. 

‘‘(c) ADDITIONAL REQUIREMENTS.—

‘‘(1) APPLICATION OF SECTION 55305.—The requirement for 

transportation on vessels of the United States under subsection 

(a) is subject to the same terms and conditions as provided 

in section 55305 of this title. 
H. R. 1442—162

‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph 

(3), in carrying out this section and section 55305 of this title, 

the Corporation shall take steps necessary and practicable, 

and consistent with this section and section 55305, without 

detriment to any port range to allocate, on the principle of 

lowest landed cost without regard to the country of registry 

of the vessel, 25 percent of the bagged, processed, or fortified 

commodities provided under title II of the Agricultural Trade 

Development and Assistance Act of 1954 (7 U.S.C. 1721 et 

seq.). 

‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first 

there shall be calculated the allocation of 100 percent of the 

quantity to be procured on an overall lowest landed cost basis 

without regard to the country of registry of the vessel, and 

then there shall be allocated to the Great Lakes port range 

any cargoes for which it has the lowest landed cost under 

that calculation. The requirements for transportation on vessels 

of the United States under this section and section 55305 

of this title do not apply to commodities allocated to the Great 

Lakes port range under paragraph (2). Commodities allocated 

to the Great Lakes port range under paragraph (2) may not 

be reallocated or diverted to another port range to meet those 

requirements to the extent that the total tonnage of commodities to which paragraph (2) applies that is furnished and 

transported from the Great Lakes port range is less than 25 

percent of the total annual tonnage of the commodities furnished. 

‘‘(4) AWARDING CONTRACTS.—In awarding a contract for 

the transportation by vessel of commodities from the Great 

Lakes port range pursuant to an export activity referred to 

in subsection (b), an agency—

‘‘(A) shall consider expressions of freight interest for 

any vessel from a vessel operator who meets reasonable 

requirements for financial and operational integrity; and 

‘‘(B) may not deny award of the contract to a person 

based on the type of vessel on which the transportation 

would be provided (including on the basis that the transportation would not be provided on a liner vessel, as that 

term is used in the Shipping Act of 1984, as in effect 

on November 14, 1995), if the person otherwise satisfies 

reasonable requirements for financial and operational 

integrity. 

‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of 

nonavailability of vessels of the United States resulting from 

the application of this subsection may not reduce the gross 

tonnage of commodities required by this section and section 

55305 of this title to be transported on vessels of the United 

States. 

‘‘§ 55315. Minimum tonnage 

‘‘(a) DEFINITION.—In this section, the term ‘base period’ means 

the 5-year period running from the sixth through the second prior 

fiscal years. 

‘‘(b) REQUIREMENT.—For each fiscal year, the minimum 

quantity of agricultural commodities to be exported under programs 

subject to section 55314 of this title is the average of the tonnage 
H. R. 1442—163

exported under those programs during the base period, discarding 

the high and low years. 

‘‘(c) WAIVERS.—The President may waive the minimum quantity 

for a fiscal year under this section if the President determines 

and reports to Congress, together with reasons, that the quantity 

cannot be used effectively for the purposes of those programs or, 

based on a certification by the Secretary of Agriculture, that the 

commodities are not available for reasons that include the unavailability of funds. 

‘‘§ 55316. Financing the transportation of agricultural 

commodities 

‘‘(a) FINANCING OF INCREASED CHARGES.—The Secretary of 

Transportation shall finance any increased ocean freight charges 

incurred in any fiscal year that result from the application of 

section 55314 of this title. 

‘‘(b) REIMBURSEMENT OF INCREASED CHARGES.—

‘‘(1) IN GENERAL.—The Secretary of Transportation shall 

reimburse the Secretary of Agriculture and the Commodity 

Credit Corporation for the amount by which, in any fiscal 

year—

‘‘(A) the total cost of ocean freight and ocean freight 

differential for which obligations are incurred by the Secretary of Agriculture and the Corporation on exports of 

agricultural commodities and their products under the agricultural export programs specified in section 55314(b) of 

this title; exceeds 

‘‘(B) 20 percent of the value of the commodities and 

their products and the cost of the ocean freight and ocean 

freight differential on which obligations are incurred by 

the Secretary of Agriculture and the Corporation during 

that fiscal year. 

‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes 

of this subsection, commodities shipped from the inventory 

of the Corporation shall be valued as provided in section 412(d) 

of the Agricultural Trade Development and Assistance Act of 

1954 (7 U.S.C. 1736f(d)). 

‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.—

‘‘(1) ISSUANCE.—To meet the expenses required to be 

assumed under subsections (a) and (b), the Secretary of 

Transportation shall issue obligations to the Secretary of the 

Treasury. The Secretary of Transportation, with the approval 

of the Secretary of the Treasury, shall prescribe the form, 

denomination, maturity, and other terms (except the interest 

rate) of the obligations. The Secretary of the Treasury shall 

set the interest rate for the obligations, considering the average 

market yield on outstanding marketable obligations of the 

United States Government of comparable maturities during 

the month before the obligations are issued. 

‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the obligations issued under this subsection. To purchase 

the obligations, the Secretary of the Treasury may use as 

a public debt transaction the proceeds from the sale of securities 

issued under chapter 31 of title 31. The purposes for which 

securities may be issued under that chapter are extended to 

include the purchase of obligations under this subsection. A 
H. R. 1442—164

redemption or purchase of the obligations by the Secretary 

of the Treasury is a public debt transaction of the Government. 

‘‘(d) SOURCE OF FUNDS FOR REIMBURSEMENT.—Reimbursement 

of the Secretary of Transportation for costs incurred under this 

section shall be made with appropriated funds rather than through 

cancellation of notes. 

‘‘(e) APPROPRIATIONS.—

‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized 

to be appropriated an amount sufficient to reimburse the Secretary of Transportation for the costs incurred under this section, including administrative expenses and the principal and 

interest due on obligations issued to the Secretary of the 

Treasury. 

‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each 

fiscal year, such amounts as may be necessary are hereby 

appropriated to pay interest and to liquidate debt on obligations 

issued to the Secretary of the Treasury under this section. 

‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Secretary of Transportation is unable to obtain the funds necessary 

to finance the increased ocean freight charges resulting from the 

requirements of subsections (a) and (b) and section 55314(a) of 

this title, the Secretary shall notify Congress within 10 working 

days of the discovery of the insufficiency. 

‘‘§ 55317. Termination of subchapter 

‘‘This subchapter terminates 90 days after the date on which 

a notification is made under section 55316(f) of this title, except 

for shipments of agricultural commodities and their products subject 

to contracts made before the end of that 90-day period, unless 

within that 90-day period the Secretary of Transportation proclaims 

that funds are available to finance increased freight charges 

resulting from the requirements of sections 55314(a) and 55316(a) 

and (b) of this title. On the termination of this subchapter under 

this section—

‘‘(1) this subchapter does not exempt export activities from, 

or subject export activities to, the cargo preference laws; and 

‘‘(2) the 50-percent requirement in section 55305 of this 

title remains in effect. 

‘‘§ 55318. Effect on other law 

‘‘This subchapter does not affect chapter 5 of title 5. 

‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 

‘‘§ 55331. Definitions 

‘‘In this subchapter: 

‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American 

Great Lakes vessel’ means a vessel so designated under section 

55332 of this title, but only during the period the designation 

is in effect. 

‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake 

Superior, Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, 

the Saint Lawrence River west of Saint Regis, New York, 

and their connecting and tributary waters. 

‘‘(3) GREAT LAKES SHIPPING SEASON.—The term ‘Great 

Lakes shipping season’ means the period each year during 

which the Saint Lawrence Seaway is open for navigation by 
H. R. 1442—165

vessels, as declared by the Saint Lawrence Seaway Development Corporation. 

‘‘§ 55332. Designating American Great Lakes vessels 

‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall designate a vessel as an American Great Lakes vessel if—

‘‘(1) an application for designation is submitted to the Secretary under regulations prescribed by the Secretary; 

‘‘(2) the vessel is documented under the laws of the United 

States; 

‘‘(3) the vessel, on the effective date of the designation, 

is—

‘‘(A) at least 1, but not more than 6, years old; or 

‘‘(B) at least 1, but not more than 11, years old if 

the Secretary finds that suitable vessels are not available 

to provide the type of service for which the vessel will 

be used after the designation; 

‘‘(4) the vessel has not previously been designated as an 

American Great Lakes vessel; and 

‘‘(5) the owner makes an agreement as provided under 

subsection (b). 

‘‘(b) AGREEMENTS.—A vessel may be designated as an American 

Great Lakes vessel only if the person that will be the owner of 

the vessel at the time of the designation makes an agreement 

with the Secretary providing that if the Secretary determines that 

the vessel is necessary to the defense of the United States, the 

United States Government will have an exclusive right, during 

the 120-day period following the date of a revocation of the designation under section 55335 of this title, to purchase the vessel for 

a price equal to the greater of—

‘‘(1) the approximate world market value of the vessel; 

or 

‘‘(2) the cost of the vessel to the owner less a reasonable 

amount for depreciation. 

‘‘(c) CERTAIN FOREIGN DOCUMENTATION AND SALE NOT PROHIB- ITED.—Notwithstanding any other law, if the Government does 

not exercise its right of purchase under an agreement under subsection (b), the owner of the vessel is not prohibited from—

‘‘(1) documenting the vessel under the laws of a foreign 

country; or 

‘‘(2) selling the vessel to a person not a citizen of the 

United States. 

‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations 

establishing requirements for submitting applications under this 

section. 

‘‘§ 55333. Exemption from restriction on transporting certain 

cargo 

‘‘The 3-year documentation requirement of section 55305(a) of 

this title does not apply to a vessel designated as an American 

Great Lakes vessel during the period of its designation. 

‘‘§ 55334. Restrictions on operations 

‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an 

American Great Lakes vessel may not be used to—

‘‘(1) engage in trade—
H. R. 1442—166

‘‘(A) from a port in the United States that is not 

located on the Great Lakes; or 

‘‘(B) between ports in the United States; 

‘‘(2) transport bulk cargo (as defined in section 40102 of 

this title) that is subject to section 55305 or 55314 of this 

title or section 2631 of title 10; or 

‘‘(3) provide a service (except ocean freight service) as—

‘‘(A) a contract carrier; or 

‘‘(B) a common carrier on a fixed advertised schedule 

offering frequent sailings at regular intervals in the foreign 

trade of the United States. 

‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel 

may be used for not more than 90 days during any 12-month 

period to engage in trade prohibited by subsection (a)(1)(A), except 

during the Great Lakes shipping season. 

‘‘§ 55335. Revocations and terminations of designations 

‘‘(a) REVOCATIONS.—After notice and an opportunity for a 

hearing, the Secretary of Transportation may revoke a designation 

of a vessel as an American Great Lakes vessel if the Secretary 

finds that—

‘‘(1) the vessel does not meet a requirement for the designation; 

‘‘(2) the vessel has been operated in violation of this subchapter; or 

‘‘(3) the owner or operator of the vessel has violated an 

agreement made under section 55332(b) of this title. 

‘‘(b) TERMINATIONS.—On petition and a showing of good cause 

by the owner of a vessel, the Secretary may terminate the designation of a vessel as an American Great Lakes vessel. The Secretary 

may impose conditions in a termination order to prevent significant 

adverse effects on other operators of vessels of the United States. 

‘‘§ 55336. Civil penalty 

‘‘After notice and an opportunity for a hearing, the Secretary 

of Transportation may impose a civil penalty of not more than 

$1,000,000 on the owner of an American Great Lakes vessel for 

any act for which the designation may be revoked under section 

55335 of this title.

‘‘CHAPTER 555—MISCELLANEOUS

‘‘Sec. 

‘‘55501. Mobile trade fairs.

‘‘§ 55501. Mobile trade fairs 

‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage 

and promote the development and use of mobile trade fairs designed 

to show and sell the products of United States business and agriculture at foreign ports and at other commercial centers throughout 

the world where the operators of the fairs use, insofar as practicable, 

vessels and aircraft of the United States in transporting their 

exhibits. 

‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Secretary determines that a mobile trade fair provides an economical 

and effective means of promoting export sales, the Secretary may 

provide to the operator of the fair—

‘‘(1) technical assistance and support; and 
H. R. 1442—167

‘‘(2) financial assistance to defray certain expenses incurred 

outside the United States, except the cost of transportation 

on foreign vessels and aircraft. 

‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section, 

the President may use, in addition to amounts appropriated to 

carry out trade promotion activities, foreign currencies owned by 

or owed to the United States Government.

‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES

‘‘CHAPTER 561—RESTRICTIONS ON TRANSFERS

‘‘Sec. 

‘‘56101. Approval required to transfer vessel to noncitizen. 

‘‘56102. Additional controls during war or national emergency. 

‘‘56103. Conditional approvals. 

‘‘56104. Penalty for false statements. 

‘‘56105. Forfeiture procedure.

‘‘§ 56101. Approval required to transfer vessel to noncitizen 

‘‘(a) RESTRICTIONS.— ‘‘(1) IN GENERAL.—Except as otherwise provided in this 

section, section 12119 of this title, or section 611 of the Merchant Marine Act, 1936, a person may not, without the approval 

of the Secretary of Transportation—

‘‘(A) sell, lease, charter, deliver, or in any other manner 

transfer, or agree to sell, lease, charter, deliver, or in 

any other manner transfer, to a person not a citizen of 

the United States, an interest in or control of—

‘‘(i) a documented vessel owned by a citizen of 

the United States; or 

‘‘(ii) a vessel last documented under the laws of 

the United States; or 

‘‘(B) place under foreign registry, or operate under 

the authority of a foreign country, a documented vessel 

or a vessel last documented under the laws of the United 

States. 

‘‘(2) EXCEPTIONS.—Paragraph (1)(A) does not apply to a 

vessel that has been operated only for pleasure or only as 

a fishing vessel, fish processing vessel, or fish tender vessel 

(as defined in section 2101 of this title). 

‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing 

with respect to a vessel to be documented under chapter 121 of 

this title, the Secretary may grant approval under subsection (a) 

before the vessel is documented. 

‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this 

subtitle, the Merchant Marine Act, 1936, or any contract with 

the Secretary made under this subtitle or that Act, a person may 

place a vessel under foreign registry without the approval of the 

Secretary if—

‘‘(1)(A) the Secretary, in conjunction with the Secretary 

of Defense, determines that at least one replacement vessel 

of equal or greater military capability and of a capacity that 

is equivalent or greater, as measured by deadweight tons, gross 

tons, or container equivalent units, as appropriate, is documented under chapter 121 of this title by the owner of the 

vessel placed under foreign registry; and 

‘‘(B) the replacement vessel is not more than 10 years 

old on the date of that documentation; or 
H. R. 1442—168

‘‘(2) an operating agreement covering the vessel under 

chapter 531 of this title has expired. 

‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or 

transfer of a vessel, or of an interest in or control of a vessel, 

in violation of this section is void. 

‘‘(e) PENALTIES.—

‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells, 

charters, or transfers a vessel, or an interest in or control 

of a vessel, in violation of this section shall be fined under 

title 18, imprisoned for not more than 5 years, or both. 

‘‘(2) CIVIL PENALTY.—A person that sells, charters, or transfers a vessel, or an interest in or control of a vessel, in violation 

of this section is liable to the United States Government for 

a civil penalty of not more than $10,000 for each violation. 

‘‘(3) FORFEITURE.—A documented vessel may be seized by 

and forfeited to the Government if, in violation of this section, 

a person—

‘‘(A) knowingly sells, charters, or transfers the vessel 

or an interest in or control of the vessel; or 

‘‘(B) places the vessel under foreign registry or operates 

the vessel under the authority of a foreign country. 

‘‘§ 56102. Additional controls during war or national emergency 

‘‘(a) IN GENERAL.—During war, or a national emergency 

declared by Presidential proclamation, a person may not, without 

the approval of the Secretary of Transportation—

‘‘(1) place under foreign registry a vessel owned in whole 

or in part by a citizen of the United States or a corporation 

incorporated under the laws of the United States or of a State; 

‘‘(2) sell, mortgage, lease, charter, deliver, or in any other 

manner transfer, or agree to sell, mortgage, lease, charter, 

deliver, or in any other manner transfer, to a person not a 

citizen of the United States—

‘‘(A) a vessel owned as described in paragraph (1), 

or an interest therein; 

‘‘(B) a vessel documented under the laws of the United 

States, or an interest therein; or 

‘‘(C) a facility for building or repairing vessels, or an 

interest therein; 

‘‘(3) issue, assign, or transfer to a person not a citizen 

of the United States an instrument of indebtedness secured 

by a mortgage of a vessel to a trustee, by an assignment 

of an owner’s interest in a vessel under construction to a 

trustee, or by a mortgage of a facility for building or repairing 

vessels to a trustee, unless the trustee or a substitute trustee 

is approved by the Secretary under subsection (b); 

‘‘(4) enter into an agreement or understanding to construct 

a vessel in the United States for, or to be delivered to, a 

person not a citizen of the United States without expressly 

stipulating that construction will not begin until after the war 

or national emergency has ended; 

‘‘(5) enter into an agreement or understanding whereby 

there is vested in, or for the benefit of, a person not a citizen 

of the United States the controlling interest in a corporation 

that is incorporated under the laws of the United States or 
H. R. 1442—169

a State and that owns a vessel or facility for building or 

repairing vessels; or 

‘‘(6) cause or procure a vessel, constructed in whole or 

in part in the United States and never cleared for a foreign 

port, to depart from a port of the United States before it 

has been documented under the laws of the United States. 

‘‘(b) TRUSTEES.—

‘‘(1) APPROVAL.—The Secretary shall approve a trustee or 

substitute trustee under subsection (a)(3) if and only if the 

trustee is a bank or trust company that—

‘‘(A) is organized as a corporation, and is doing business, under the laws of the United States or a State; 

‘‘(B) is authorized under those laws to exercise corporate trust powers; 

‘‘(C) is a citizen of the United States; 

‘‘(D) is subject to supervision or examination by Federal 

or State authority; and 

‘‘(E) has a combined capital and surplus (as set forth 

in its most recent published report of condition) of at least 

$3,000,000. 

‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases 

to meet the conditions in paragraph (1), the Secretary shall 

disapprove the trustee or substitute trustee. After the disapproval, the restrictions on transfer or assignment without 

the Secretary’s approval in subsection (a)(3) apply. 

‘‘(3) OPERATION OF VESSEL.—During a period when subsection (a) applies, a trustee referred to in subsection (a)(3), 

even though approved as a trustee by the Secretary, may not 

operate the vessel under the mortgage or assignment without 

the Secretary’s approval. 

‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in 

violation of this section is void. 

‘‘(d) RECOVERY OF CONSIDERATION.—

‘‘(1) IN GENERAL.—A person that deposited or paid consideration in connection with a transaction prohibited by this section 

may recover the consideration after tender of the vessel, facility, 

stock, or other security, or interest therein, to the person entitled to it, or the forfeiture thereof to the United States Government. 

‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person 

in whose interest the consideration was deposited, or to whom 

it was paid, entered into the transaction in the belief that 

the person depositing or paying the consideration was a citizen 

of the United States. 

‘‘(e) PENALTIES.—

‘‘(1) CRIMINAL PENALTY.—A person that violates, or 

attempts or conspires to violate, this section shall be fined 

under title 18, imprisoned for not more than 5 years, or both. 

‘‘(2) FORFEITURE.—The following shall be forfeited to the 

Government: 

‘‘(A) A vessel, a facility for building or repairing vessels, 

or an interest in a vessel or such a facility, that is sold, 

mortgaged, leased, chartered, delivered, transferred, or 

documented, or agreed to be sold, mortgaged, leased, chartered, delivered, transferred, or documented, in violation 

of this section. 
H. R. 1442—170

‘‘(B) Stock and other securities sold or transferred, 

or agreed to be sold or transferred, in violation of this 

section. 

‘‘(C) A vessel departing in violation of subsection (a)(6). 

‘‘§ 56103. Conditional approvals 

‘‘(a) IN GENERAL.—In approving an act or transaction under 

section 56101 or 56102 of this title, the Secretary of Transportation 

may do so absolutely or upon conditions the Secretary considers 

advisable. The Secretary shall state the conditions in the notice 

of approval. 

‘‘(b) VIOLATIONS.—A violation of a condition of approval is subject to the same penalties as a violation resulting from an act 

done without the required approval. The violation occurs at the 

time the condition is violated. 

‘‘§ 56104. Penalty for false statements 

‘‘A person that knowingly makes a false statement of a material 

fact to the Secretary of Transportation or another officer, employee, 

or agent of the Department of Transportation, to obtain the Secretary’s approval under section 56101 or 56102 of this title, shall 

be fined under title 18, imprisoned for not more than 5 years, 

or both. 

‘‘§ 56105. Forfeiture procedure 

‘‘(a) IN GENERAL.—A forfeiture under this chapter may be 

enforced in the same way as a forfeiture under the laws on the 

collection of duties. However, such a forfeiture may be remitted 

without seizure of the vessel. 

‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter 

to enforce a forfeiture, a prior criminal conviction of a person 

for a violation of this chapter with respect to the subject matter 

of the forfeiture is prima facie evidence of the violation against 

the person convicted.

‘‘CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS

‘‘Sec. 

‘‘56301. General authority. 

‘‘56302. Charter terms. 

‘‘56303. Compensation. 

‘‘56304. Disputed compensation. 

‘‘56305. Vessel encumbrances. 

‘‘56306. Use and transfer of vessels. 

‘‘56307. Return of vessels.

‘‘§ 56301. General authority 

‘‘During a national emergency declared by Presidential 

proclamation, or a period for which the President has proclaimed 

that the security of the national defense makes it advisable, the 

Secretary of Transportation may requisition or purchase, or requisition or charter the use of, a vessel owned by citizens of the United 

States, a documented vessel, or a vessel under construction in 

the United States. 

‘‘§ 56302. Charter terms 

‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not 

ownership under this chapter, the Secretary of Transportation, 

at the time of requisition or as soon thereafter as the situation 
H. R. 1442—171

allows, shall offer the person entitled to possession of the vessel 

a charter containing—

‘‘(1) the terms the Secretary believes should govern the 

relationship between the United States Government and the 

person; and 

‘‘(2) the rate of hire the Secretary considers just compensation for the use of the vessel and the services required under 

the charter. 

‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the 

charter and rate of hire, the parties shall proceed as provided 

in section 56304 of this title. 

‘‘§ 56303. Compensation 

‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of 

Transportation shall determine and pay just compensation for a 

vessel requisitioned under this chapter. 

‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel 

may not be considered enhanced by the circumstances requiring 

its requisition. Consequential damages arising from the requisition 

may not be paid. 

‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.— ‘‘(1) IF PAID.—If a construction-differential subsidy has been 

paid for the vessel, the value of the vessel at the time of 

requisition shall be determined under section 802 of the Merchant Marine Act, 1936. 

‘‘(2) IF NOT PAID.—If a construction-differential subsidy has 

not been paid for the vessel, the value of any national defense 

features previously paid for by the United States Government 

shall be excluded. 

‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost 

or damaged by a risk assumed by the Government under the 

charter, but a valuation for the vessel or a means of compensation 

has not been agreed to, the Secretary shall pay just compensation 

for the loss or damage, to the extent the person is not reimbursed 

through insurance. 

‘‘§ 56304. Disputed compensation 

‘‘If the person entitled to compensation disputes the amount 

of just compensation determined by the Secretary of Transportation 

under this chapter, the Secretary shall pay the person, as a tentative advance, 75 percent of the amount determined. The person 

may bring a civil action against the United States to recover just 

compensation. If the tentative advance paid under this section 

is greater than the amount of the court’s judgment, the person 

shall refund the difference. 

‘‘§ 56305. Vessel encumbrances 

‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel 

does not prevent the requisition of the vessel under this chapter. 

‘‘(b) DEPOSIT IN TREASURY.—

‘‘(1) IN GENERAL.—If an encumbrance exists, the Secretary 

of Transportation may deposit part of the compensation or 

advance of compensation to be paid under this chapter (but 

not more than the total amount of all encumbrances) in a 

fund in the Treasury. The Secretary shall publish notice of 

the creation of the fund in the Federal Register. 
H. R. 1442—172

‘‘(2) AVAILABILITY OF AMOUNTS DEPOSITED.—Amounts 

deposited in the fund shall be available to pay the compensation 

or any of the encumbrances (including encumbrances stipulated 

to in a court of the United States or a State) existing at 

the time the vessel was requisitioned. 

‘‘(c) CIVIL ACTION.— ‘‘(1) IN GENERAL.—Within 6 months after publication of 

notice under subsection (b), the holder of an encumbrance may 

bring a civil action in admiralty, according to the principles 

of libels in rem, against the fund. 

‘‘(2) VENUE.—The action must be brought in the district 

court of the United States—

‘‘(A) from whose custody the vessel was or may be 

requisitioned; or 

‘‘(B) in whose district the vessel was located when 

it was requisitioned. 

‘‘(3) SERVICE OF PROCESS.—Service of process shall be made 

on the appropriate United States Attorney, the Attorney General, and the Secretary, in the manner provided by the Federal 

Rules of Civil Procedure (28 App. U.S.C.). Notice of the action 

shall be given to all interested persons as ordered by the 

court. 

‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall proceed and be determined according to the principles of law 

and the rules of practice applicable in like cases between private 

parties. 

‘‘§ 56306. Use and transfer of vessels 

‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, 

recondition, reconstruct, operate, or charter for operation, a vessel 

acquired under this chapter. 

‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may 

transfer the possession or control of a vessel acquired under this 

chapter to another department or agency of the United States 

Government on terms and conditions approved by the President. 

The department or agency shall promptly reimburse the Secretary 

for expenditures for just compensation, purchase price, charter hire, 

repairs, reconditioning, or reconstruction. 

‘‘§ 56307. Return of vessels 

‘‘When a vessel requisitioned for use but not ownership is 

returned to the owner, the Secretary of Transportation shall—

‘‘(1) return the vessel in a condition at least as good as 

when taken, less ordinary wear and tear; or 

‘‘(2) pay the owner an amount sufficient to recondition 

the vessel to that condition, less ordinary wear and tear.

‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY 

NEUTRALITY ACT

‘‘Sec. 

‘‘56501. Definition. 

‘‘56502. Adjusting obligations and arranging maintenance. 

‘‘56503. Types of adjustments and arrangements. 

‘‘56504. Changes in adjustments and arrangements.

‘‘§ 56501. Definition 

‘‘In this chapter, the term ‘essential vessel’ means a vessel 

that is—
H. R. 1442—173

‘‘(1)(A) security for a mortgage indebtedness to the United 

States Government; or 

‘‘(B) constructed under this subtitle or required by a contract under this subtitle to be operated on a certain essential 

foreign trade route; and 

‘‘(2) necessary in the interests of commerce and national 

defense to be maintained in condition for prompt use. 

‘‘§ 56502. Adjusting obligations and arranging maintenance 

‘‘(a) GENERAL AUTHORITY.—On written application, the Secretary of Transportation may adjust obligations and arrange for 

maintenance of an essential vessel as provided in this chapter 

if the Secretary determines, after any investigation or proceeding 

the Secretary considers desirable, that—

‘‘(1) the operation of the vessel in the service, route, or 

line to which it is assigned under this subtitle, or in which 

it otherwise would be operated, is not—

‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 

441 et seq.) or a proclamation issued under that Act; or 

‘‘(B) compatible with maintaining the availability of 

the vessel for national defense and commerce; 

‘‘(2) it is not feasible under existing law to employ the 

vessel in any other service or operation in foreign or domestic 

trade (except temporary or emergency operation under section 

56503(b)(5) of this title); and 

‘‘(3) the applicant, because of the restrictions of the Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or the withdrawal 

of vessels for national defense under paragraph (1), is not 

earning or will not earn a reasonable return on the capital 

necessarily employed in its business. 

‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under 

subsection (a) shall continue in effect only as long as the circumstances described in subsection (a) continue to exist. 

‘‘§ 56503. Types of adjustments and arrangements 

‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrangement under this chapter shall include suspension of—

‘‘(1) the requirement to operate the vessel in foreign trade 

under the applicable operating-differential or construction-differential subsidy contract or mortgage or other agreement; and 

‘‘(2) the right to operating-differential subsidy for the vessel. 

‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To 

the extent the Secretary of Transportation considers appropriate 

to carry out the purposes of this subtitle, an adjustment or arrangement under this chapter may include any of the following: 

‘‘(1) Lay-up of the vessel by the owner or in the custody 

of the Secretary, with payment or reimbursement by the Secretary of necessary and proper expenses (including reasonable 

overhead and insurance) or a fixed periodic allowance instead 

of payment or reimbursement. 

‘‘(2) Postponement, for not more than the total period of 

the lay-up, of the maturity date of each installment of the 

principal of obligations to the United States Government for 

the vessel (regardless of whether the maturity date is during 

a lay-up period), or rearrangement of those maturities. 

‘‘(3) Postponement or cancellation of interest accruing on 

the obligations during a lay-up period. 
H. R. 1442—174

‘‘(4) Extension, for not more than the total period of the 

lay-up, of the 20-year life limitation for the vessel and other 

limitations and provisions of this subtitle based on a 20-year 

life. 

‘‘(5) Provision for temporary or emergency employment of 

the vessel (instead of lay-up) as may be practicable, with such 

arrangements for management of the vessel, payment of 

expenses, and application of the proceeds of the employment, 

as the Secretary may approve, with any period of operation 

being included as part of the lay-up period. 

‘‘(6) Payment to the Secretary, on termination of the 

arrangements with the applicant, of the applicant’s net profits 

(earned while the arrangements were in effect) in excess of 

10 percent a year on the capital necessarily employed in the 

applicant’s business, as reimbursement for obligations postponed or canceled and expenses incurred or paid by the Secretary under this section. 

‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the 

applicant represented by a vessel of the applicant laid-up or operated under this section shall be included in capital necessarily 

employed in the applicant’s business. The Secretary may require 

a vessel laid-up or operated under this section to be security for 

reimbursement. 

‘‘§ 56504. Changes in adjustments and arrangements 

‘‘The Secretary of Transportation may change an adjustment 

or arrangement made under this chapter as the Secretary considers 

necessary to carry out this chapter.

‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

‘‘CHAPTER 571—GENERAL AUTHORITY

‘‘Sec. 

‘‘57101. Placement of vessels in National Defense Reserve Fleet. 

‘‘57102. Disposition of vessels not worth preserving. 

‘‘57103. Sale of obsolete vessels in National Defense Reserve Fleet. 

‘‘57104. Acquisition of vessels from sale of obsolete vessels. 

‘‘57105. Acquisition of vessels for essential services, routes, or lines. 

‘‘57106. Maintenance, improvement, and operation of vessels. 

‘‘57107. Vessels for other agencies. 

‘‘57108. Consideration of ballast and equipment in determining selling price. 

‘‘57109. Operation of vessels purchased, chartered, or leased from Secretary of 

Transportation.

‘‘§ 57101. Placement of vessels in National Defense Reserve 

Fleet 

‘‘(a) IN GENERAL.—Any vessel acquired by the Maritime 

Administration shall be placed in the National Defense Reserve 

Fleet maintained under section 11 of the Merchant Ship Sales 

Act of 1946 (50 App. U.S.C. 1744). 

‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under 

subsection (a) may not be traded out or sold from the Fleet, except 

as provided in section 57102, 57103, or 57104 or chapter 533, 

537, 573, or 575 of this title. 

‘‘§ 57102. Disposition of vessels not worth preserving 

‘‘(a) IN GENERAL.—If the Secretary of Transportation determines that a vessel owned by the Maritime Administration is of 

insufficient value for commercial or military operation to warrant 
H. R. 1442—175

its further preservation, the Secretary may scrap the vessel or 

sell the vessel for cash. 

‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection 

(a) shall be made on the basis of competitive sealed bids, after 

an appraisal and due advertisement. The purchaser does not have 

to be a citizen of the United States. The purchaser shall provide 

a surety bond, with a surety approved by the Secretary, to ensure 

that the vessel will not be operated in the foreign trade of the 

United States at any time within 10 years after the sale, in competition with a vessel owned by a citizen of the United States and 

documented under the laws of the United States. 

‘‘§ 57103. Sale of obsolete vessels in National Defense Reserve 

Fleet 

‘‘(a) IN GENERAL.—The Secretary of Transportation may convey 

the right, title, and interest of the United States Government in 

any vessel of the National Defense Reserve Fleet that has been 

identified by the Secretary as an obsolete vessel of insufficient 

value to warrant its further preservation, if the recipient—

‘‘(1) is a non-profit organization, a State, or a municipal 

corporation or political subdivision of a State; 

‘‘(2) agrees not to use, or allow others to use, the vessel 

for commercial transportation purposes; 

‘‘(3) agrees to make the vessel available to the Government 

whenever the Secretary indicates that it is needed by the 

Government; 

‘‘(4) agrees to hold the Government harmless for any claims 

arising from exposure to asbestos, polychlorinated biphenyls, 

lead paint, or other hazardous substances after conveyance 

of the vessel, except for claims arising from use of the vessel 

by the Government; 

‘‘(5) has a conveyance plan and a business plan that 

describes the intended use of the vessel, each of which has 

been submitted to and approved by the Secretary; 

‘‘(6) has provided proof, as determined by the Secretary, 

of resources sufficient to accomplish the transfer, necessary 

repairs and modifications, and initiation of the intended use 

of the vessel; and 

‘‘(7) agrees that when the recipient no longer requires the 

vessel for use as described in the business plan required under 

paragraph (5)—

‘‘(A) the recipient will, at the discretion of the Secretary, reconvey the vessel to the Government in good 

condition except for ordinary wear and tear; or 

‘‘(B) if the Board of Trustees of the recipient has 

decided to dissolve the recipient according to the laws 

of the State in which the recipient is incorporated, then—

‘‘(i) the recipient shall distribute the vessel, as 

an asset of the recipient, to a person that has been 

determined exempt from taxation under section 

501(c)(3) of the Internal Revenue Code of 1986 (26 

U.S.C. 501(c)(3)), or to the Federal Government or 

a State or local government for a public purpose; and 

‘‘(ii) the vessel shall be disposed of by a court 

of competent jurisdiction of the county in which the 

principal office of the recipient is located, for such 

purposes as the court shall determine, or to such 
H. R. 1442—176

organizations as the court shall determine are organized exclusively for public purposes. 

‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, additional equipment from other obsolete vessels of the Fleet may 

be conveyed to assist the recipient with maintenance, repairs, or 

modifications. 

‘‘(c) ADDITIONAL TERMS.—The Secretary may require any additional terms the Secretary considers appropriate. 

‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this 

section, the vessel shall be delivered to the recipient at a time 

and place to be determined by the Secretary. The vessel shall 

be conveyed in an ‘as is’ condition. 

‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel 

to the recipient, the Secretary determines that a different disposition of the vessel would better serve the interests of the Government, the Secretary shall pursue the more favorable disposition 

of the obsolete vessel and shall not be liable for any damages 

that may result from an intended recipient’s reliance upon a proposed transfer. 

‘‘(f) REVERSION.—The Secretary shall include in any conveyance 

under this section terms under which all right, title, and interest 

conveyed by the Secretary shall revert to the Government if the 

Secretary determines the vessel has been used other than as 

described in the business plan required under subsection (a)(5). 

‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels 

‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire 

suitable documented vessels with amounts in the Vessel Operations 

Revolving Fund derived from the sale of obsolete vessels in the 

National Defense Reserve Fleet. 

‘‘(b) VALUATION.—The acquired and obsolete vessels shall be 

valued at their scrap value in domestic or foreign markets as 

of the date of the acquisition for or sale from the Fleet. However, 

the value assigned to those vessels shall be determined on the 

same basis, with consideration given to the fair value of the cost 

of moving the vessel sold from the Fleet to the place of scrapping. 

‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the layup of the vessel acquired under this section may be paid from 

amounts in the Fund. 

‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet 

under this section may be scrapped in an approved foreign market 

without obtaining additional separate approval from the Secretary 

to transfer the vessel to a person not a citizen of the United 

States. 

‘‘§ 57105. Acquisition of vessels for essential services, routes, 

or lines 

‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire 

a vessel, by purchase or otherwise, if—

‘‘(1) the Secretary considers the vessel necessary to establish, maintain, improve, or serve as a replacement on an essential service, route, or line in the foreign commerce of the United 

States, as determined under section 50103 of this title; 

‘‘(2) the vessel was constructed in the United States; and 

‘‘(3) the Secretary of the Navy has certified to the Secretary 

of Transportation that the vessel is suitable for economical 

and speedy conversion into a naval or military auxiliary or 
H. R. 1442—177

otherwise suitable for use by the United States Government 

in time of war or national emergency. 

‘‘(b) PRICE.—The price paid for the vessel shall be based on 

a fair and reasonable valuation. However, the price may not exceed 

by more than 5 percent the cost of the vessel to the owner (excluding 

any construction-differential subsidy and the cost of national 

defense features paid by the Secretary of Transportation) plus the 

actual cost previously expended for reconditioning, less depreciation 

based on a 25-year life for a dry-cargo or passenger vessel and 

a 20-year life for a tanker or other liquid bulk carrier vessel. 

‘‘(c) DOCUMENTATION.—A vessel acquired under this section 

that is not documented under the laws of the United States at 

the time of acquisition shall be so documented as soon as practicable. 

‘‘§ 57106. Maintenance, improvement, and operation of vessels 

‘‘(a) IN GENERAL.—The Secretary of Transportation may maintain, repair, recondition, remodel, and improve vessels owned by 

the United States Government and in the possession or under 

the control of the Secretary, to equip them adequately for competition in the foreign trade of the United States. The Secretary may 

operate such a vessel or charter the vessel on terms and conditions 

the Secretary considers appropriate to carry out the purposes of 

this subtitle. 

‘‘(b) DOCUMENTATION AND RESTRICTIONS ON OPERATION.—A 

vessel reconditioned, remodeled, or improved under subsection (a) 

shall be documented under the laws of the United States and 

remain so documented for at least 5 years after completion of 

the reconditioning, remodeling, or improvement. During that period, 

it shall be operated on voyages that are not exclusively coastwise. 

‘‘§ 57107. Vessels for other agencies 

‘‘(a) IN GENERAL.—The Secretary of Transportation may construct, reconstruct, repair, equip, and outfit, by contract or otherwise, vessels or parts thereof, for any other department or agency 

of the United States Government to the extent the other department 

or agency is authorized by law to do so for its own account. 

‘‘(b) EFFECT ON CONTRACT AUTHORIZATION.—An obligation 

incurred or expenditure made by the Secretary under this section 

does not affect any contract authorization of the Secretary, but 

instead shall be charged against the existing appropriation or contract authorization of the department or agency. 

‘‘§ 57108. Consideration of ballast and equipment in determining selling price 

‘‘The Maritime Administration may not sell a vessel until its 

ballast and equipment have been inventoried and their value considered in determining the selling price of the vessel. 

‘‘§ 57109. Operation of vessels purchased, chartered, or 

leased from Secretary of Transportation 

‘‘Unless otherwise authorized by the Secretary of Transportation, a vessel purchased, chartered, or leased from the Secretary 

may be operated only under a certificate of documentation with 

a registry or coastwise endorsement. Such a vessel, while employed 

solely as a merchant vessel, is subject to the laws, regulations, 
H. R. 1442—178

and liabilities governing merchant vessels, whether the United 

States Government has an interest in the vessel as an owner 

or holds a mortgage, lien, or other interest.

‘‘CHAPTER 573—VESSEL TRADE-IN PROGRAM

‘‘Sec. 

‘‘57301. Definitions. 

‘‘57302. Authority to acquire vessels. 

‘‘57303. Utility value and tonnage requirements. 

‘‘57304. Eligible acquisition dates. 

‘‘57305. Determination of trade-in allowance. 

‘‘57306. Payment of trade-in allowance. 

‘‘57307. Recognition of gain for tax purposes. 

‘‘57308. Use of vessels at least 25 years old.

‘‘§ 57301. Definitions 

‘‘In this chapter: 

‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel—

‘‘(A) constructed under this subtitle and acquired 

within 2 years after the date of completion; or 

‘‘(B) constructed in a domestic shipyard on private 

account and not under this subtitle, and documented under 

the laws of the United States. 

‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means 

a vessel that—

‘‘(A) is of at least 1,350 gross tons; 

‘‘(B) the Secretary of Transportation believes should, 

because of its age, obsolescence, or other reasons, be 

replaced in the public interest; and 

‘‘(C) has been owned by a citizen of the United States 

for at least 3 years immediately before its acquisition under 

this chapter. 

‘‘§ 57302. Authority to acquire vessels 

‘‘To promote the construction of new, safe, and efficient vessels 

to carry the domestic and foreign waterborne commerce of the 

United States, the Secretary of Transportation may acquire an 

obsolete vessel in exchange for an allowance of credit toward the 

cost of construction or purchase of a new vessel as provided in 

this chapter. 

‘‘§ 57303. Utility value and tonnage requirements 

‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be 

acquired under this chapter for operation in the domestic or foreign 

commerce of the United States may not be substantially less than 

that of the obsolete vessel acquired in exchange under this chapter. 

‘‘(b) TONNAGE.—If the Secretary of Transportation finds that 

the new vessel will have a utility value at least equal to that 

of the obsolete vessel, the new vessel may be of lesser gross tonnage 

than the obsolete vessel. However, the gross tonnage of the new 

vessel must be at least one-third the gross tonnage of the obsolete 

vessel. 

‘‘§ 57304. Eligible acquisition dates 

‘‘At the option of the owner, the acquisition of an obsolete 

vessel under this chapter shall occur—

‘‘(1) when the owner contracts for the construction or purchase of a new vessel; or 
H. R. 1442—179

‘‘(2) within 5 days of the actual date of delivery of the 

new vessel to the owner. 

‘‘§ 57305. Determination of trade-in allowance 

‘‘(a) IN GENERAL.—The Secretary of Transportation shall determine the trade-in allowance for an obsolete vessel at the time 

of acquisition of the vessel. The allowance shall be the fair value 

of the vessel. In determining the value, the Secretary shall consider—

‘‘(1) the scrap value of the obsolete vessel in American 

and foreign markets; 

‘‘(2) the depreciated value based on a 20-year or 25-year 

life, whichever applies to the obsolete vessel; and 

‘‘(3) the market value of the obsolete vessel for operation 

in world commerce or in the domestic or foreign commerce 

of the United States. 

‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete 

vessel occurs when the owner contracts for the construction of 

the new vessel, and the owner uses the obsolete vessel during 

the period of construction of the new vessel, the Secretary shall 

reduce the trade-in allowance by an amount representing the fair 

value of that use. The Secretary shall establish the rate for use 

of the obsolete vessel when the contract for construction of the 

new vessel is made. 

‘‘§ 57306. Payment of trade-in allowance 

‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an 

obsolete vessel under this chapter occurs when the owner contracts 

for the construction or purchase of the new vessel, the Secretary 

of Transportation shall apply the trade-in allowance to the purchase 

price of the new vessel rather than paying it to the owner. If 

the new vessel is constructed under this subtitle, the Secretary 

may apply the trade-in allowance to the required cash payments 

on terms and conditions the Secretary may prescribe. If the new 

vessel is not constructed under this subtitle, the Secretary shall 

pay the trade-in allowance to the builder of the vessel for the 

account of the owner when the Secretary acquires the obsolete 

vessel. 

‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the 

obsolete vessel occurs when the new vessel is delivered to the 

owner, the Secretary shall deposit the trade-in allowance in the 

owner’s capital construction fund. 

‘‘§ 57307. Recognition of gain for tax purposes 

‘‘The owner of an obsolete vessel does not recognize a gain 

under the Federal income tax laws when the vessel is transferred 

to the Secretary of Transportation in exchange for a trade-in allowance under this chapter. The basis of the new vessel acquired 

with the allowance is the same as the basis of the obsolete vessel—

‘‘(1) increased by the difference between the cost of the 

new vessel and the trade-in allowance of the obsolete vessel; 

and 

‘‘(2) decreased by the amount of loss recognized on the 

transfer. 
H. R. 1442—180

‘‘§ 57308. Use of vessels at least 25 years old 

‘‘An obsolete vessel acquired under this chapter that is or 

becomes at least 25 years old may not be used for commercial 

operation. However, the vessel may be used—

‘‘(1) during a period in which vessels may be requisitioned 

under chapter 563 of this title; or 

‘‘(2) except as otherwise provided in this subtitle, on trade 

routes serving only the foreign trade of the United States.

‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE 

OF VESSELS

‘‘SUBCHAPTER I—GENERAL 

‘‘Sec. 

‘‘57501. Completion of long-range program. 

‘‘57502. Construction, reconditioning, and remodeling of vessels. 

‘‘57503. Competitive bidding. 

‘‘57504. Charter or sale of vessels acquired by Department of Transportation. 

‘‘57505. Employment of vessels on foreign trade routes. 

‘‘57506. Minimum selling price of vessels. 

‘‘SUBCHAPTER II—CHARTERS 

‘‘57511. Demise charters. 

‘‘57512. Competitive bidding. 

‘‘57513. Minimum bid. 

‘‘57514. Qualifications of bidders. 

‘‘57515. Awarding of charters. 

‘‘57516. Operating-differential subsidies. 

‘‘57517. Recovery of excess profits. 

‘‘57518. Performance bond. 

‘‘57519. Insurance. 

‘‘57520. Vessel maintenance. 

‘‘57521. Termination of charter during national emergency. 

‘‘SUBCHAPTER III—MISCELLANEOUS 

‘‘57531. Construction and charter of vessels for unsuccessful routes. 

‘‘57532. Operation of experimental vessels.

‘‘SUBCHAPTER I—GENERAL 

‘‘§ 57501. Completion of long-range program 

‘‘Whenever the Secretary of Transportation determines that 

the objectives and policies declared in sections 50101 and 50102 

of this title cannot be fully realized within a reasonable time under 

titles V and VI of the Merchant Marine Act, 1936, and the President 

approves the determination, the Secretary, in accordance with this 

chapter, shall complete the long-range program described in section 

50102 of this title. 

‘‘§ 57502. Construction, reconditioning, and remodeling of 

vessels 

‘‘(a) IN GENERAL.—The Secretary of Transportation may have 

new vessels constructed, and have old vessels reconditioned or 

remodeled, as the Secretary determines necessary to carry out 

the objectives of this subtitle. 

‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remodeling of vessels under subsection (a) shall take place in shipyards 

in the continental United States (including Alaska and Hawaii). 

However, if satisfactory contracts cannot be obtained from private 

shipbuilders, the Secretary may have the work done in navy yards. 

‘‘(c) APPLICABILITY OF CONSTRUCTION-DIFFERENTIAL SUBSIDY

PROVISIONS.—Contracts for the construction, reconstruction, or 
H. R. 1442—181

reconditioning of a vessel by a private shipbuilder under this 

chapter are subject to the provisions of title V of the Merchant 

Marine Act, 1936, applicable to a contract with a private shipbuilder 

for the construction of a vessel under title V of that Act. 

‘‘§ 57503. Competitive bidding 

‘‘(a) ADVERTISEMENT AND BIDDING.—The Secretary of Transportation may make a contract with a private shipbuilder for the 

construction of a new vessel, or for the reconstruction or reconditioning of an existing vessel, only after due advertisement and 

upon sealed competitive bids. 

‘‘(b) OPENING OF BIDS.—Bids required under this section shall 

be opened at the time and place stated in the advertisement for 

bids. All interested persons, including representatives of the press, 

shall be permitted to attend. The results of the bidding shall be 

publicly announced. 

‘‘§ 57504. Charter or sale of vessels acquired by Department 

of Transportation 

‘‘Vessels transferred to or otherwise acquired by the Department of Transportation in any manner may be chartered or sold 

by the Secretary of Transportation as provided in this chapter. 

‘‘§ 57505. Employment of vessels on foreign trade routes 

‘‘(a) IN GENERAL.—The Secretary of Transportation shall 

arrange for the employment of the Department of Transportation’s 

vessels in steamship lines on such trade routes, exclusively serving 

the foreign trade of the United States, as the Secretary determines 

are essential for the development and maintenance of the commerce 

of the United States and the national defense. However, the Secretary shall first determine that those routes are not being adequately served by existing steamship lines privately owned and 

operated by citizens of the United States and documented under 

the laws of the United States. 

‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Secretary shall have a policy of encouraging private operation of each 

essential steamship line now owned by the United States Government by—

‘‘(1) selling the line to a citizen of the United States; or 

‘‘(2) demising the Secretary’s vessels on bareboat charter 

to citizens of the United States who agree to maintain the 

line in the manner provided in this chapter. 

‘‘§ 57506. Minimum selling price of vessels 

‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or 

the Merchant Marine Act, 1936, may not be sold by the Secretary 

of Transportation for less than the price specified in this section. 

‘‘(b) OPERATION IN FOREIGN TRADE.—If the vessel is to be 

operated in foreign trade, the minimum price is the estimated 

foreign construction cost (exclusive of national defense features) 

determined as of the date the construction contract is executed, 

less depreciation under subsection (d). 

‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be 

operated in domestic trade, the minimum price is the cost of 

construction in the United States (exclusive of national defense 

features), less depreciation under subsection (d). 
H. R. 1442—182

‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and 

(c) shall be based on—

‘‘(1) a 25-year life for dry-cargo and passenger vessels; 

and 

‘‘(2) a 20-year life for tankers and other bulk liquid carrier 

vessels. 

‘‘SUBCHAPTER II—CHARTERS 

‘‘§ 57511. Demise charters 

‘‘A charter by the Secretary of Transportation under this 

chapter shall demise the vessel to the charterer subject to all 

usual conditions contained in a bareboat charter. The charter shall 

be for a term the Secretary considers to be in the best interest 

of the United States Government and the merchant marine. 

‘‘§ 57512. Competitive bidding 

‘‘(a) IN GENERAL.—The Secretary of Transportation may charter 

a vessel of the Department of Transportation to a private operator 

only on the basis of competitive sealed bidding. The bids must 

be submitted in strict compliance with the terms and conditions 

of a public advertisement soliciting the bids. 

‘‘(b) ADVERTISEMENT FOR BIDS.—An advertisement for bids shall 

state—

‘‘(1) the number, type, and tonnage of the vessels being 

offered for bareboat charter for operation as a steamship line 

on a designated trade route; 

‘‘(2) the minimum number of sailings required; 

‘‘(3) the length of time of the charter; 

‘‘(4) the right of the Secretary to reject all bids; and 

‘‘(5) other information the Secretary considers necessary 

for the information of prospective bidders. 

‘‘(c) OPENING OF BIDS.—Bids required under this section shall 

be opened at the time and place stated in the advertisement for 

bids. All interested persons, including representatives of the press, 

shall be permitted to attend. The results of the bidding shall be 

publicly announced. 

‘‘§ 57513. Minimum bid 

‘‘The Secretary of Transportation shall reject any bid for the 

charter under this subchapter of a vessel constructed under this 

subtitle or the Merchant Marine Act, 1936, if the charter hire 

offered is lower than the minimum charter hire would be if the 

vessel were chartered under section 57531 of this title. 

‘‘§ 57514. Qualifications of bidders 

‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter 

to a bidder, the Secretary of Transportation shall consider—

‘‘(1) the bidder’s financial resources, credit standing, and 

practical experience in operating vessels; and 

‘‘(2) other factors a prudent business person would consider 

in entering into a transaction involving a large capital investment. 

‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a 

vessel to a person appearing to lack sufficient capital, credit, and 

experience to operate the vessel successfully over the period covered 

by the charter. 
H. R. 1442—183

‘‘§ 57515. Awarding of charters 

‘‘(a) IN GENERAL.—The Secretary of Transportation shall award 

the charter to the bidder proposing to pay the highest monthly 

charter hire. However, the Secretary may reject the highest or 

most advantageous or any other bid if the Secretary considers 

the charter hire offered too low or determines that the bidder 

lacks the qualifications required by section 57514 of this title. 

‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the 

highest bid, the Secretary may—

‘‘(1) award the charter to the next highest bidder; or 

‘‘(2) reject all bids and either readvertise the line or operate 

the line until conditions appear more favorable to reoffer the 

line for private charter. 

‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason 

for rejection shall be stated in writing to the bidder. 

‘‘§ 57516. Operating-differential subsidies 

‘‘If the Secretary of Transportation considers it necessary, the 

Secretary may make a contract with a charterer of a vessel owned 

by the Secretary for payment of an operating-differential subsidy, 

on the same terms and conditions, and subject to the same limitations and restrictions, as otherwise provided with respect to payment of operating-differential subsidies to operators of privatelyowned vessels. 

‘‘§ 57517. Recovery of excess profits 

‘‘(a) IN GENERAL.—A charter under this chapter shall provide 

that if, at the end of a calendar year subsequent to the execution 

of the charter, the cumulative net voyage profit (after payment 

of the charter hire reserved in the charter and payment of the 

charterer’s fair and reasonable overhead expenses applicable to 

operation of the chartered vessel) exceeds 10 percent a year of 

the charterer’s capital necessarily employed in the business of the 

chartered vessel, the charterer shall pay to the Secretary of 

Transportation, as additional charter hire, half the cumulative net 

voyage profit in excess of 10 percent a year. However, any cumulative net voyage profit accounted for under this subsection is 

not to be included in the calculation of cumulative net voyage 

profit in any subsequent year. 

‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall 

define the terms ‘net voyage profit’, ‘fair and reasonable overhead 

expenses’, and ‘capital necessarily employed’ for this section. Each 

advertisement for bids and each charter shall contain these definitions, stating the formula for determining each of these three 

amounts. 

‘‘§ 57518. Performance bond 

‘‘The Secretary of Transportation shall require a charterer of 

a vessel of the Secretary to deposit with the Secretary an undertaking, with approved sureties, in such amount as the Secretary 

may require as security for the faithful performance of the terms 

of the charter, including indemnity against liens on the chartered 

vessel. 

‘‘§ 57519. Insurance 

‘‘A charter under this chapter shall require the charterer to 

carry, at the charterer’s expense, insurance on the chartered vessel 
H. R. 1442—184

covering all marine and port risks, protection and indemnity risks, 

and all other hazards and liabilities, adequate to cover damages 

claimed against and losses sustained by the chartered vessel arising 

during the term of the charter. The insurance shall be in such 

form, in such amount, and with such companies as the Secretary 

of Transportation may require. In accordance with law, any of 

the insurance risks may be underwritten by the Secretary. 

‘‘§ 57520. Vessel maintenance 

‘‘(a) IN GENERAL.—A charter under this chapter shall require 

the charterer, at the charterer’s expense, to—

‘‘(1) keep the chartered vessel in good repair and efficient 

operating condition; and 

‘‘(2) make any repairs required by the Secretary of 

Transportation. 

‘‘(b) INSPECTION.—The charter shall provide that the Secretary 

has the right to inspect the vessel at any time to ascertain its 

condition. 

‘‘§ 57521. Termination of charter during national emergency 

‘‘A charter under this chapter shall provide that during a 

national emergency proclaimed by the President or a period for 

which the President has proclaimed that the security of the national 

defense makes it advisable, the Secretary of Transportation may 

terminate the charter without cost to the United States Government 

on such notice to the charterer as the President determines. 

‘‘SUBCHAPTER III—MISCELLANEOUS 

‘‘§ 57531. Construction and charter of vessels for unsuccessful routes 

‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that 

a trade route determined to be essential under section 50103 of 

this title cannot be successfully developed and maintained and 

the Secretary’s replacement program cannot be achieved under 

private operation of the trade route by a citizen of the United 

States with vessels documented under chapter 121 of this title, 

without further aid by the United States Government in addition 

to the financial aid authorized under titles V and VI of the Merchant 

Marine Act, 1936, the Secretary, without advertisement or competition, may—

‘‘(1) have constructed, in private shipyards or in navy yards, 

vessels of the types necessary for the trade route; and 

‘‘(2) demise charter those new vessels to the operator of 

vessels of the United States established on the trade route. 

‘‘(b) AMOUNT OF CHARTER HIRE.—

‘‘(1) IN GENERAL.—The annual charter hire under subsection (a) shall be at least 4 percent of the price (referred 

to in this section as the ‘foreign cost’) at which the vessel 

would be sold if constructed under title V of the Merchant 

Marine Act, 1936, plus—

‘‘(A) a percentage of the depreciated foreign cost computed annually determined by the Secretary of the 

Treasury, taking into consideration the current average 

market yield on outstanding marketable obligations of the 
H. R. 1442—185

Government with remaining periods to maturity comparable to the term of the charter, adjusted to the nearest 

one-eighth percent; and 

‘‘(B) an allowance adequate in the judgment of the 

Secretary of Transportation to cover administrative costs. 

‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) 

shall be based on—

‘‘(A) a 25-year life for dry-cargo and passenger vessels; 

and 

‘‘(B) a 20-year life for tankers and other bulk liquid 

carrier vessels. 

‘‘(c) OPTION TO PURCHASE.—The charter may contain an option 

to the charterer to purchase the vessels from the Secretary of 

Transportation within 5 years after delivery under the charter, 

on the same terms and conditions as provided in title V of the 

Merchant Marine Act, 1936, for the purchase of new vessels from 

the Secretary. However—

‘‘(1) the purchase price shall be the foreign cost less depreciation to the date of purchase based on the useful life specified 

in subsection (b)(2); 

‘‘(2) the required cash payment payable at the time of 

the purchase shall be 25 percent of the purchase price; 

‘‘(3) the charter may provide that any part of the charter 

hire paid in excess of the minimum charter hire provided for 

in this section may be credited against the cash payment payable at the time of the purchase; 

‘‘(4) the balance of the purchase price shall be paid within 

the remaining years of useful life (as specified in subsection 

(b)(2)) after the date of delivery of the vessel under the charter 

and in approximately equal annual installments, except that 

the first installment, which shall be payable on the next ensuing 

anniversary date of the delivery under the charter, shall be 

a proportionate part of the annual installment; and 

‘‘(5) interest shall be payable on the unpaid balances from 

the date of purchase, at a rate not less than—

‘‘(A) a rate determined by the Secretary of the 

Treasury, taking into consideration the current average 

market yield on outstanding marketable obligations of the 

Government with remaining periods to maturity comparable to the average maturities of the loans, adjusted 

to the nearest one-eighth percent; plus 

‘‘(B) an allowance adequate in the judgment of the 

Secretary of Transportation to cover administrative costs. 

‘‘(d) OPERATION OF VESSEL.— ‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for 

operation of the vessel exclusively—

‘‘(A) in foreign trade; 

‘‘(B) on a round-the-world voyage; 

‘‘(C) on a round voyage from the west coast of the 

United States to a European port that includes an intercoastal port of the United States; 

‘‘(D) on a round voyage from the Atlantic coast of 

the United States to the Orient that includes an intercoastal port of the United States; or 

‘‘(E) on a voyage in foreign trade on which the vessel 

may stop at Hawaii or an island territory or possession 

of the United States. 
H. R. 1442—186

‘‘(2) DOMESTIC TRADE.—The charter shall provide if the 

vessel is operated in domestic trade on any of the services 

specified in paragraph (1), the charterer will pay annually 

to the Secretary of Transportation that proportion of 1⁄25 of 

the difference between the domestic and foreign cost of the 

vessel as the gross revenue derived from the domestic trade 

bears to the gross revenue derived from the entire voyages 

completed during the preceding year. 

‘‘§ 57532. Operation of experimental vessels 

‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’ 

means a vessel owned by the United States Government (including 

a vessel in the National Defense Reserve Fleet) that has been 

constructed, reconditioned, or remodeled for experimental or testing 

purposes. 

‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation, 

for the purpose of practical development, trial, and testing, may 

operate an experimental vessel under a bareboat charter or general 

agency agreement in the foreign or domestic trade of the United 

States or for use for the account of a department or agency of 

the Government, without regard to other provisions of this subtitle 

and other laws related to chartering and general agency operations. 

Not more than 10 vessels may be operated and tested under this 

section in any one year. 

‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this 

section shall be on terms the Secretary considers appropriate to 

carry out the purposes of this subtitle. A bareboat charter under 

this section shall be at reasonable rates and include restrictions 

the Secretary considers appropriate to protect the public interest, 

including provisions for recapture of profits under section 57517 

of this title. A charter or general agency agreement under this 

section shall be reviewed annually to determine whether conditions 

exist to justify continuance of the charter or agreement. 

‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel operations of the Secretary under this section and employed through 

a general agent in connection with a charter or agreement under 

this section is entitled to all the rights and remedies provided 

in sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943 

(50 App. U.S.C. 1291(a), (c), 1293(c), 1294).

‘‘PART G—RESTRICTIONS AND PENALTIES

‘‘CHAPTER 581—RESTRICTIONS AND PENALTIES

‘‘Sec. 

‘‘58101. Operating in domestic intercoastal or coastwise service. 

‘‘58102. Default on payment or maintenance of reserves. 

‘‘58103. Employing another person as managing or operating agent. 

‘‘58104. Willful violation constitutes breach of contract or charter. 

‘‘58105. Preferences for cargo in which charterer has interest. 

‘‘58106. Concerted discriminatory activities. 

‘‘58107. Discrimination at ports by water common carriers. 

‘‘58108. Charges for transportation subject to subtitle IV of title 49. 

‘‘58109. Penalties.

‘‘§ 58101. Operating in domestic intercoastal or coastwise 

service 

‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid 

to a contractor under the operating-differential subsidy program, 
H. R. 1442—187

and a vessel may not be chartered to a person under chapter 

575 of this title, if the contractor or charterer, or a holding company, 

subsidiary, affiliate, or associate of the contractor or charterer, 

or an officer, director, agent, or executive thereof, directly or 

indirectly—

‘‘(1) owns, charters, or operates a vessel engaged in the 

domestic intercoastal or coastwise service; or 

‘‘(2) owns a pecuniary interest in a person that owns, 

charters, or operates a vessel in the domestic intercoastal or 

coastwise service. 

‘‘(b) WAIVER.—A person may apply to the Secretary of Transportation for a waiver of subsection (a). Before deciding on the waiver, 

the Secretary shall give the applicant and other interested persons 

an opportunity for a hearing. The Secretary may not grant the 

waiver if the Secretary finds it would—

‘‘(1) result in unfair competition to a person operating 

exclusively in the domestic intercoastal or coastwise service; 

or 

‘‘(2) be prejudicial to the objectives and policy of this subtitle. 

‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall 

grant an application under subsection (b) without requiring further 

proof that the public interest and convenience will be served and 

without further proceedings as to the competition in the route 

or trade, if the contractor or other person, or a predecessor in 

interest, was in bona-fide operation as a common carrier by water 

in the domestic intercoastal or coastwise trade in 1935 over the 

route or in the trade for which the application is made and has 

so operated since that time or, if engaged in furnishing seasonal 

service only, was in bona-fide operation in 1935 during the season 

ordinarily covered by its operation, except in either event as to 

interruptions of service over which the applicant or its predecessor 

in interest had no control. 

‘‘(d) DIVERSION INTO INTERCOASTAL OR COASTWISE OPER- ATIONS.—If an application under subsection (b) is approved, a person 

referred to in this section may not divert, directly or indirectly, 

money, property, or any other thing of value, used in a foreigntrade operation for which a subsidy is paid by the United States 

Government, into intercoastal or coastwise operations. 

‘‘§ 58102. Default on payment or maintenance of reserves 

‘‘The Secretary of Transportation may supervise the number 

and compensation of all officers and employees of a contractor 

under the operating-differential subsidy program or a charterer 

under chapter 575 of this title, receiving an operating-differential 

subsidy, if the contractor or charterer—

‘‘(1) is in default on a mortgage, note, purchase contract, 

or other obligation to the Secretary; or 

‘‘(2) has not maintained, in a manner satisfactory to the 

Secretary, all of the reserves provided for in this subtitle. 

‘‘§ 58103. Employing another person as managing or operating agent 

‘‘(a) PROHIBITION.—Except with the written consent of the Secretary of Transportation, a contractor holding a contract under 

the operating-differential subsidy program or under chapter 575 

of this title may not—
H. R. 1442—188

‘‘(1) employ another person as the managing or operating 

agent of the operator; or 

‘‘(2) charter a vessel, on which an operating-differential 

subsidy is to be paid, for operation by another person. 

‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter 

prohibited by this section is made, the person operating the chartered vessel is subject to all the provisions of this subtitle and 

the operating-differential subsidy program, including limitations 

of profits and salaries. 

‘‘§ 58104. Willful violation constitutes breach of contract or 

charter 

‘‘A willful violation of any provision of sections 58101–58103 

of this title constitutes a breach of the contract or charter. On 

determining that a violation has occurred, the Secretary of 

Transportation may declare the contract or charter rescinded. 

‘‘§ 58105. Preferences for cargo in which charterer has 

interest 

‘‘A contractor receiving an operating-differential subsidy, or 

a charterer under chapter 575 of this title, may not unjustly 

discriminate in any manner so as to give preference, directly or 

indirectly, to cargo in which the contractor or charterer has a 

direct or indirect ownership, purchase, or vending interest. 

‘‘§ 58106. Concerted discriminatory activities 

‘‘(a) PROHIBITION.—A contractor receiving an operating-differential subsidy, or a charterer under chapter 575 of this title, may 

not continue as a party to or conform to an agreement with another 

carrier by water, or engage in a practice in concert with another 

carrier by water, that is unjustly discriminatory or unfair to any 

other citizen of the United States operating a common carrier 

by water employing only vessels documented under the laws of 

the United States on an established trade route from and to a 

United States port. 

‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or subsidy of any kind may be paid, directly or indirectly, out of funds 

of the United States Government to a contractor or charterer that 

has violated subsection (a). 

‘‘(c) CIVIL ACTION.—A person whose business or property is 

injured by a violation of subsection (a) may bring a civil action 

in the district court of the United States for the district in which 

the defendant resides, is found, or has an agent. If the person 

prevails, the person shall be awarded—

‘‘(1) 3 times the damages; and 

‘‘(2) costs, including reasonable attorney fees. 

‘‘§ 58107. Discrimination at ports by water common carriers 

‘‘(a) PROHIBITION.—A common carrier by water may not, directly 

or indirectly, through an agreement, conference, association, understanding, or otherwise, prevent or attempt to prevent any other 

common carrier by water from serving any port described in subsection (b) at the same rates the first carrier charges at the nearest 

port already regularly served by it. 

‘‘(b) PORTS.—A port referred to in subsection (a) is one that 

is—

‘‘(1) designed for the accommodation of ocean-going vessels; 
H. R. 1442—189

‘‘(2) located on an improvement project authorized by law 

or by a Federal agency; and 

‘‘(3) located within the continental limits of the United 

States. 

‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not 

limit the authority otherwise vested in the Secretary of Transportation and the Federal Maritime Commission. 

‘‘§ 58108. Charges for transportation subject to subtitle IV 

of title 49

‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive 

for transportation subject to subtitle IV of title 49 of persons or 

property, under any joint rate, fare, or charge, or under any export, 

import, or other proportional rate, fare, or charge, that is based 

in whole or in part on the fact that the persons or property affected 

are to be transported to, or have been transported from, a port 

in a territory or possession of the United States or in a foreign 

country, by a carrier by water in foreign commerce, any lower 

rate, fare, or charge than the carrier charges, collects, or receives 

for the transportation of persons or similar property for the same 

distance, in the same direction, and over the same route, in commerce wholly within the United States, unless the vessel used 

for the transportation is or was at the time of the transportation 

documented under the laws of the United States. 

‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of 

Transportation believes that adequate shipping facilities to or from 

any port in a territory or possession of the United States or a 

foreign country are not being provided by vessels documented under 

the laws of the United States, the Secretary shall certify this 

fact to the Surface Transportation Board. On receiving the certification, the Board may by order suspend the operation of subsection 

(a) with respect to the rates, fares, and charges for the transportation by rail of persons and property transported from or to be 

transported to those ports, for such time and under such terms 

and conditions as the Secretary may specify in the order or in 

any supplemental order. 

‘‘(c) TERMINATION OF SUSPENSION.—Whenever the Secretary 

believes that adequate shipping facilities are being provided to 

those ports by vessels documented under the laws of the United 

States, and certifies that fact to the Board, the Board may order 

the termination of the suspension. 

‘‘§ 58109. Penalties 

‘‘(a) INDIVIDUALS.—An individual convicted of violating section 

58101(d), 58103, or 58105 of this title shall be fined under title 

18, imprisoned for at least one year but not more than 5 years, 

or both. 

‘‘(b) ORGANIZATIONS.—An organization convicted of committing 

an act prohibited by this subtitle shall be fined under title 18. 

‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or 

organization convicted of violating a section referred to in subsection 

(a) is ineligible, at the discretion of the Secretary of Transportation, 

to receive any benefit under the construction-differential subsidy 

or operating-differential subsidy programs, or a charter under 

chapter 575 of this title, for 5 years after the conviction.’’.
H. R. 1442—190

SEC. 9. SUBTITLE VI OF TITLE 46. 

(a) REDESIGNATION.—Title 46, United States Code, is amended 

by redesignating subtitle VI as subtitle VII. 

(b) NEW SUBTITLE.—Title 46, United States Code, is amended 

by inserting after subtitle V the following: 

‘‘Subtitle VI—Clearance, Tonnage Taxes, and 

Duties

‘‘Chapter Sec. 

‘‘601. Arrival and Departure Requirements ................................................ 60101

‘‘603. Tonnage Taxes and Light Money ........................................................ 60301

‘‘605. Discriminating Duties and Reciprocal Privileges .......................... 60501

‘‘CHAPTER 601—ARRIVAL AND DEPARTURE 

REQUIREMENTS

‘‘Sec. 

‘‘60101. Boarding arriving vessels before inspection. 

‘‘60102. Production of certificate on entry. 

‘‘60103. Oath of ownership on entry. 

‘‘60104. Depositing certificates of documentation with consular officers. 

‘‘60105. Clearance of vessels. 

‘‘60106. State inspection laws. 

‘‘60107. Payment of fees on departing vessel. 

‘‘60108. Duty to transport tendered cargo. 

‘‘60109. Duty to transport money and securities of the United States Government.

‘‘§ 60101. Boarding arriving vessels before inspection 

‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall 

prescribe and enforce regulations on the boarding of a vessel 

arriving at a port of the United States before the vessel has been 

inspected and secured. 

‘‘(b) CRIMINAL PENALTY.—A person violating a regulation prescribed under this section shall be fined under title 18, imprisoned 

for not more than 6 months, or both. 

‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be construed as supplementary to section 2279 of title 18. 

‘‘§ 60102. Production of certificate on entry 

‘‘On entry of a vessel documented under chapter 121 of this 

title, the master or other individual in charge of the vessel shall 

produce the certificate of documentation to the customs officer at 

the place where the vessel is entered. If the certificate is not 

produced, the vessel is not entitled to the privileges of a documented 

vessel. 

‘‘§ 60103. Oath of ownership on entry 

‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United 

States from a foreign port, the individual designated under subsection (b) shall state under oath that—

‘‘(1) the vessel’s certificate of documentation contains the 

names of all the owners of the vessel; or 

‘‘(2) part of the ownership has been transferred since the 

certificate was issued and, to the best of the individual’s knowledge and belief, the vessel is still owned only by citizens of 

the United States. 

‘‘(b) PERSON TO MAKE STATEMENT.—The statement under subsection (a) shall be made by—

‘‘(1) an owner if one resides at the port of entry; or 
H. R. 1442—191

‘‘(2) the master if an owner does not reside at the port 

of entry. 

‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appropriate individual does not make the statement required by this 

section, the vessel is not entitled to the privileges of a vessel 

of the United States. 

‘‘§ 60104. Depositing certificates of documentation with consular officers 

‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citizens of the United States, on a voyage from a port in the United 

States, arrives at a foreign port, the master of the vessel shall 

deposit the vessel’s certificate of documentation with a consular 

officer at the foreign port if there is a consular officer at that 

port. 

‘‘(b) RETURN OF CERTIFICATE.—When the master produces a 

clearance from the appropriate officer of the foreign port, the consular officer shall return the certificate of documentation to the 

master if the master has complied with the provisions of law related 

to the discharge of seamen in a foreign country and the payment 

of fees of consular officers. 

‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel 

failing to deposit the certificate of documentation as required by 

subsection (a) is liable to the United States Government for a 

civil penalty of $500. The consular officer shall bring an action 

to recover the penalty in any court of competent jurisdiction. The 

action shall be brought in the name of the consular officer for 

the benefit of the United States. 

‘‘§ 60105. Clearance of vessels 

‘‘(a) VESSELS OF THE UNITED STATES.—Except as otherwise 

provided by law, a vessel of the United States shall obtain clearance 

from the Secretary of Homeland Security before proceeding from 

a port or place in the United States—

‘‘(1) for a foreign port or place; 

‘‘(2) for another port or place in the United States if the 

vessel has on board foreign merchandise for which entry has 

not been made; or 

‘‘(3) outside the territorial sea to visit a hovering vessel 

or to receive merchandise while outside the territorial sea. 

‘‘(b) OTHER VESSELS.—Except as otherwise provided by law, 

a vessel that is not a vessel of the United States shall obtain 

clearance from the Secretary before proceeding from a port or 

place in the United States—

‘‘(1) for a foreign port or place; 

‘‘(2) for another port or place in the United States; or 

‘‘(3) outside the territorial sea to visit a hovering vessel 

or to receive or deliver merchandise while outside the territorial 

sea. 

‘‘(c) REGULATIONS.—The Secretary may by regulation—

‘‘(1) prescribe the manner in which clearance under this 

section is to be obtained, including the documents, data, or 

information which shall be submitted or transmitted, pursuant 

to an authorized data interchange system, to obtain the clearance; 
H. R. 1442—192

‘‘(2) permit clearance to be obtained before all requirements 

for clearance are complied with, but only if the owner or operator of the vessel files a bond in an amount set by the Secretary 

conditioned on the compliance by the owner or operator with 

all specified requirements for clearance within a time period 

(not exceeding 4 business days) established by the Secretary; 

and 

‘‘(3) permit clearance to be obtained at a place other than 

a designated port of entry, under conditions the Secretary may 

prescribe. 

‘‘§ 60106. State inspection laws 

‘‘When State law requires a certificate of inspection for goods 

carried on a vessel, a vessel transporting the goods may not be 

cleared until the certificate is produced. 

‘‘§ 60107. Payment of fees on departing vessel 

‘‘A departing vessel may be cleared only when all legal fees 

that have accrued on the vessel are paid and proof of payment 

is presented to the individual granting the clearance. 

‘‘§ 60108. Duty to transport tendered cargo 

‘‘Clearance may be refused to a vessel or vehicle transporting 

cargo destined for a domestic or foreign port when the owner, 

master, or other individual in charge refuses to accept cargo tendered in good condition, with proper charges, for the same or 

an intermediate port by a citizen of the United States. This section 

does not apply if the vessel or vehicle is already fully loaded 

(giving appropriate consideration to its proper loading) or is not 

adaptable to transport the tendered cargo. 

‘‘§ 60109. Duty to transport money and securities of the 

United States Government 

‘‘Before being given clearance, a vessel owned by a citizen 

of the United States and bound on a voyage from a port in the 

United States to another port in the United States or in a foreign 

country, or on a voyage from a port in a foreign country to a 

port in the United States, shall receive on board any bullion, coin, 

notes, bonds, or other securities of the United States Government 

that an agency, consular officer, or other agent of the Government 

offers. The vessel shall transport the items securely and deliver 

them promptly to the proper authorities or consignees on arriving 

at the port of destination. Compensation shall be paid for services 

provided under this section that is equal to compensation paid 

to other carriers in the ordinary transaction of business.

‘‘CHAPTER 603—TONNAGE TAXES AND LIGHT MONEY

‘‘Sec. 

‘‘60301. Regular tonnage taxes. 

‘‘60302. Special tonnage taxes. 

‘‘60303. Light money. 

‘‘60304. Presidential suspension of tonnage taxes and light money. 

‘‘60305. Vessels in distress. 

‘‘60306. Vessels not engaged in trade. 

‘‘60307. Vessels engaged in coastwise trade or the fisheries. 

‘‘60308. Vessels engaged in Great Lakes trade. 

‘‘60309. Passenger vessels making trips between ports of the United States and 

foreign ports. 

‘‘60310. Vessels making daily trips on interior waters. 
H. R. 1442—193

‘‘60311. Hospital vessels in time of war. 

‘‘60312. Rights under treaties preserved.

‘‘§ 60301. Regular tonnage taxes 

‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents 

per ton (but not more than a total of 10 cents per ton per year) 

at each entry in a port of the United States of—

‘‘(1) a vessel entering from a foreign port or place in North 

America, Central America, the West Indies Islands, the Bahama 

Islands, the Bermuda Islands, or the coast of South America 

bordering the Caribbean Sea; or 

‘‘(2) a vessel returning to the same port or place in the 

United States from which it departed, and not entering the 

United States from another port or place, except—

‘‘(A) a vessel of the United States; 

‘‘(B) a recreational vessel (as defined in section 2101 

of this title); or 

‘‘(C) a barge. 

‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents 

per ton (but not more than a total of 30 cents per ton per year) 

on a vessel at each entry in a port of the United States from 

a foreign port or place not named in subsection (a)(1). 

‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—

Subsection (a) does not apply to a vessel entering other than by 

sea from a foreign port or place at which tonnage, lighthouse, 

or other equivalent taxes are not imposed on vessels of the United 

States. 

‘‘§ 60302. Special tonnage taxes 

‘‘(a) ENTRY FROM FOREIGN PORT OR PLACE.—Regardless of 

whether a tax is imposed under section 60301 of this title, a 

tax is imposed on a vessel at each entry in a port of the United 

States from a foreign port or place at the following rates: 

‘‘(1) 30 cents per ton on a vessel built in the United States 

but owned in any part by a subject of a foreign country. 

‘‘(2) 50 cents per ton on other vessels not of the United 

States. 

‘‘(3) 50 cents per ton on a vessel of the United States 

having an officer who is not a citizen of the United States. 

‘‘(4) $2 per ton on a foreign vessel entering from a foreign 

port or place at which vessels of the United States are not 

ordinarily allowed to enter and trade. 

‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROPERTY BETWEEN DISTRICTS.—Regardless of whether a tax is imposed 

under section 60301 of this title, a tax of 50 cents per ton is 

imposed on a vessel not of the United States at each entry in 

one customs district from another district when transporting goods 

loaded in one district to be delivered in another district. 

‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—The 

tax of 50 cents per ton under this section does not apply to a 

vessel that—

‘‘(1) is owned only by citizens of the United States; and 

‘‘(2) after entering a port of the United States, becomes 

documented as a vessel of the United States before leaving 

that port. 
H. R. 1442—194

‘‘§ 60303. Light money 

‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be 

called ‘light money’, is imposed on a vessel not of the United 

States at each entry in a port of the United States. This tax 

shall be imposed and collected under the same regulations that 

apply to tonnage taxes. 

‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.—

‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel 

owned only by citizens of the United States if—

‘‘(A) the vessel is carrying a regular document issued 

by a customhouse of the United States proving the vessel 

to be owned only by citizens of the United States; and 

‘‘(B) on entry of the vessel from a foreign port, the 

individual designated under paragraph (2) states under 

oath that—

‘‘(i) the document contains the names of all the 

owners of the vessel; or 

‘‘(ii) part of the ownership has been transferred 

since the document was issued and, to the best of 

that individual’s knowledge and belief, the vessel is 

still owned only by citizens of the United States. 

‘‘(2) PERSON TO MAKE STATEMENT.—The statement under 

paragraph (1)(B) shall be made by—

‘‘(A) an owner if one resides at the port of entry; 

or 

‘‘(B) the master if an owner does not reside at the 

port of entry. 

‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection (a) section does not apply to a vessel that—

‘‘(1) is owned only by citizens of the United States; and 

‘‘(2) after entering a port of the United States, becomes 

documented as a vessel of the United States before leaving 

that port. 

‘‘§ 60304. Presidential suspension of tonnage taxes and light 

money 

‘‘If the President is satisfied that the government of a foreign 

country does not impose discriminating or countervailing duties 

to the disadvantage of the United States, the President shall suspend the imposition of special tonnage taxes and light money under 

sections 60302 and 60303 of this title on vessels of that country. 

‘‘§ 60305. Vessels in distress 

‘‘A vessel is exempt from tonnage taxes and light money when 

it enters because it is in distress. 

‘‘§ 60306. Vessels not engaged in trade 

‘‘A vessel is exempt from tonnage taxes and light money when 

not engaged in trade. 

‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries 

‘‘A vessel with a registry endorsement or a coastwise endorsement, trading from one port in the United States to another port 

in the United States or employed in the bank, whale, or other 

fisheries, is exempt from tonnage taxes and light money. 
H. R. 1442—195

‘‘§ 60308. Vessels engaged in Great Lakes trade 

‘‘A documented vessel with a registry endorsement, engaged 

in foreign trade on the Great Lakes or their tributary or connecting 

waters in trade with Canada, does not become subject to tonnage 

taxes or light money because of that trade. 

‘‘§ 60309. Passenger vessels making trips between ports of 

the United States and foreign ports 

‘‘A passenger vessel making at least 3 trips per week between 

a port of the United States and a foreign port is exempt from 

tonnage taxes and light money. 

‘‘§ 60310. Vessels making daily trips on interior waters 

‘‘A vessel making regular daily trips between a port of the 

United States and a port of Canada only on interior waters not 

navigable to the ocean is exempt from tonnage taxes and light 

money, except on its first clearing each year. 

‘‘§ 60311. Hospital vessels in time of war 

‘‘In time of war, a hospital vessel is exempt from tonnage 

taxes, light money, and pilotage charges in the ports of the United 

States if the vessel is one for which the conditions of the international convention for the exemption of hospital ships from taxation in time of war, concluded at The Hague on December 21, 

1904, are satisfied. The President by proclamation shall name the 

vessels for which the conditions are satisfied and state when the 

exemption begins and ends. 

‘‘§ 60312. Rights under treaties preserved 

‘‘This chapter and chapter 605 of this title do not affect a 

right or privilege of a foreign country relating to tonnage taxes 

or other duties on vessels under a law or treaty of the United 

States.

‘‘CHAPTER 605—DISCRIMINATING DUTIES AND 

RECIPROCAL PRIVILEGES

‘‘Sec. 

‘‘60501. Vessels allowed to import. 

‘‘60502. Discriminating duty on goods imported in foreign vessels or from contiguous countries. 

‘‘60503. Reciprocal suspension of discriminating duties. 

‘‘60504. Reciprocal privileges for recreational vessels. 

‘‘60505. Retaliatory suspension of commercial privileges. 

‘‘60506. Retaliation against British dominions of North America. 

‘‘60507. Suspension of free passage through Saint Marys Falls Canal.

‘‘§ 60501. Vessels allowed to import 

‘‘(a) IN GENERAL.—Except as otherwise provided by treaty, 

goods may be imported into the United States from a foreign 

port or place only in—

‘‘(1) a vessel of the United States; or 

‘‘(2) a foreign vessel owned only by citizens or subjects 

of the country—

‘‘(A) in which the goods are grown, produced, or manufactured; or 

‘‘(B) from which the goods can only be, or most usually 

are, first shipped for transportation. 
H. R. 1442—196

‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING

SIMILAR RESTRICTIONS.—Subsection (a) does not apply to a vessel 

of a foreign country that does not maintain a similar restriction 

against United States documented vessels. 

‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection (a) does not apply to a vessel that—

‘‘(1) is owned only by citizens of the United States; and 

‘‘(2) after entering a port of the United States, becomes 

documented as a vessel of the United States before leaving 

that port. 

‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in violation of this section, the goods and the vessel in which they are 

imported, along with its equipment and other cargo, may be seized 

by and forfeited to the United States Government. 

‘‘§ 60502. Discriminating duty on goods imported in foreign 

vessels or from contiguous countries 

‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent 

ad valorem (in addition to other duties imposed by law) is imposed 

on goods—

‘‘(1) imported in a vessel not of the United States unless 

the vessel—

‘‘(A) is entitled by law or treaty to enter the ports 

of the United States on payment of the same duties as 

are payable on goods imported in a vessel of the United 

States; or 

‘‘(B)(i) is owned only by citizens of the United States; 

and 

‘‘(ii) after entering a port of the United States, becomes 

documented as a vessel of the United States before leaving 

that port; or 

‘‘(2) produced or manufactured in a foreign country not 

contiguous to the United States and imported from a country 

contiguous to the United States, unless imported in the usual 

course of strictly retail trade. 

‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without 

payment of the duty required by this section, the goods and the 

vessel in which they are imported may be seized by, and forfeited 

to, the United States Government. 

‘‘§ 60503. Reciprocal suspension of discriminating duties 

‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from 

the government of a foreign country that it has suspended, in 

any part, the imposition of discriminating duties for any class 

of vessels owned by citizens of the United States or goods imported 

in those vessels, the President may proclaim a reciprocal suspension 

of discriminating duties for the same class of vessels owned by 

citizens of that country or goods imported in those vessels. 

‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under 

this section takes effect retroactively from the date the President 

received the proof from the foreign government, and expires when 

that government stops granting the reciprocal suspension. 

‘‘§ 60504. Reciprocal privileges for recreational vessels 

‘‘When the President is satisfied that yachts owned by residents 

of the United States and used only for pleasure are allowed to 

arrive at, depart from, and cruise in the waters of a foreign port 
H. R. 1442—197

without entering, clearing, or paying any duties or fees (including 

cruising license fees), the Secretary of Homeland Security may 

allow yachts from that foreign port used only for pleasure to arrive 

at and depart from the ports of the United States and to cruise 

in the waters of the United States without paying any duties 

or fees. However, the Secretary may require foreign yachts to obtain 

a license to cruise in the waters of the United States. The license 

shall be in the form prescribed by the Secretary and contain limitations about length of time, direction, place of cruising and action, 

and other matters the Secretary considers appropriate. The license 

shall be issued without cost to the yacht. 

‘‘§ 60505. Retaliatory suspension of commercial privileges 

‘‘(a) GENERAL AUTHORITY.—The President may proclaim a 

suspension of commercial privileges to vessels of a foreign country 

when—

‘‘(1) vessels of that country have been given the same 

commercial privileges in the ports and waters of the United 

States given to vessels of the United States (except the privilege 

of engaging in coastwise commerce); and 

‘‘(2) vessels of the United States are denied commercial 

privileges in the ports or waters of that country given to vessels 

of that country. 

‘‘(b) APPLICATION.—A suspension under this section shall apply 

to the same commercial privileges denied to vessels of the United 

States in the ports or waters of the foreign country, and to the 

same class of vessels of that country as the class of vessels of 

the United States denied the privileges. 

‘‘(c) EFFECTIVE DATE.—The President shall designate the effective date of the suspension in the proclamation. 

‘‘(d) PENALTIES.— ‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or 

agent of a vessel of a foreign country does an act for the 

vessel in the ports or waters of the United States in violation 

of a proclamation issued under this section, the vessel and 

the goods on the vessel may be seized by, and forfeited to, 

the United States Government. 

‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official 

of the Government enforcing this section shall be fined under 

title 18, imprisoned for not more than 2 years, or both. 

‘‘§ 60506. Retaliation against British dominions of North 

America 

‘‘(a) GENERAL AUTHORITY.—The President by proclamation may 

prohibit vessels of the British dominions of North America, their 

masters and crews, and products of or coming from those dominions, 

from entering waters, ports, or places of the United States when 

the President is satisfied that—

‘‘(1) fishermen or fishing vessels of the United States in 

waters, ports, or places of the British dominions of North 

America are being or recently have been—

‘‘(A) denied rights provided by law or treaty; 

‘‘(B) subjected to unreasonable restrictions in the exercise of those rights; or 

‘‘(C) otherwise harassed; 

‘‘(2) fishermen or fishing vessels of the United States, 

having a permit under the laws of the United States to dock 
H. R. 1442—198

or trade at a port or place in the British dominions of North 

America, are being or recently have been—

‘‘(A) denied the privilege of entering the port or place 

in the same manner and under the same regulations 

applicable to trading vessels of the most-favored-nation; 

‘‘(B) prevented from buying supplies allowed to be sold 

to trading vessels of the most-favored-nation; or 

‘‘(C) otherwise harassed; or 

‘‘(3) other vessels of the United States or their masters 

or crews in waters, ports, or places of the British dominions 

of North America are being or recently have been—

‘‘(A) denied privileges given to vessels of the mostfavored-nation or their masters or crews; or 

‘‘(B) otherwise harassed. 

‘‘(b) COVERAGE AND EXCEPTIONS.—The President may apply 

a proclamation under this section to any of the subjects named, 

and may include exceptions for vessels in distress or need of supplies. The President may change, revoke, and renew the proclamation. 

‘‘(c) PENALTIES.—A person violating a proclamation issued 

under this section shall be fined under title 18, imprisoned for 

not more than 2 years, or both. A vessel or goods found in waters, 

ports, or places of the United States in violation of the proclamation 

may be seized by, and forfeited to, the United States Government. 

‘‘§ 60507. Suspension of free passage through Saint Marys 

Falls Canal 

‘‘(a) PURPOSE.—The purpose of this section is to secure reciprocal advantages for the citizens, ports, and vessels of the United 

States. 

‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that 

vessels of the United States, or passengers or cargo being transported to a port of the United States, are prohibited from passing 

through a canal or lock connected with the navigation of the Saint 

Lawrence River, the Great Lakes, or their connecting waterways, 

or burdened in that passage by tolls or other means that are 

unreasonable in view of the free passage through the Saint Marys 

Falls Canal allowed to vessels of all countries, the President by 

proclamation may suspend the right of free passage through the 

Saint Marys Falls Canal for vessels owned by subjects of the country 

imposing the prohibition, tolls, or other burdens and for passengers 

and cargo being transported to the ports of that country, even 

when carried in vessels of the United States. The suspension shall 

apply to the extent and for the time the President considers appropriate. 

‘‘(c) IMPOSITION OF TOLL.— ‘‘(1) IN GENERAL.—During a suspension under this section, the President shall impose a toll of not more than $2 per 

ton on cargo and not more than $5 on each passenger. 

‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll 

may not be imposed on passengers or cargo landed at 

Ogdensburg, New York, or any port west of Ogdensburg and 

south of a line drawn from the northern boundary of New 

York through the Saint Lawrence River, the Great Lakes, and 

their connecting channels to the northern boundary of Minnesota. 

‘‘(d) COLLECTION OF TOLL.—
H. R. 1442—199

‘‘(1) IN GENERAL.—A toll imposed under this section shall 

be collected under regulations prescribed by the Secretary of 

Homeland Security. The Secretary may require the master 

of a vessel to provide a sworn statement of the amount and 

kind of cargo, the number of passengers, and the destination 

of the passengers and cargo. 

‘‘(2) PROOF OF LANDING.—When applicable, the Secretary 

also may require satisfactory proof that the passengers and 

cargo were landed at a port described in subsection (c)(2). 

Until that proof is provided, the Secretary may assume the 

passengers and cargo were not landed at such a port, and 

the amount of a toll that otherwise would be imposed is a 

lien enforceable against the vessel when found in the waters 

of the United States.’’.

SEC. 10. SUBTITLE VII OF TITLE 46. 

Subtitle VII of title 46, United States Code, as redesignated 

by section 9(a) of this Act, is amended as follows: 

(1) The subtitle heading and analysis are amended to read 

as follows: 

‘‘Subtitle VII—Security and Drug Enforcement

‘‘Chapter Sec.

‘‘701. Port Security ............................................................................................70101

‘‘703. Maritime Security ...................................................................................70301

‘‘705. Maritime Drug Law Enforcement .......................................................70501’’.

(2) Add after chapter 701 the following:

‘‘CHAPTER 703—MARITIME SECURITY

‘‘Sec. 

‘‘70301. Definitions. 

‘‘70302. International measures for seaport and vessel security. 

‘‘70303. Security standards at foreign ports. 

‘‘70304. Travel advisories on security at foreign ports. 

‘‘70305. Suspension of passenger services. 

‘‘70306. Report on terrorist threats.

‘‘§ 70301. Definitions 

‘‘In this chapter: 

‘‘(1) COMMON CARRIER.—The term ‘common carrier’ has 

the meaning given that term in section 40102 of this title. 

‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ has 

the meaning given that term in section 2101 of this title. 

‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary 

of the department in which the Coast Guard is operating. 

‘‘§ 70302. International measures for seaport and vessel security 

‘‘Congress encourages the President to continue to seek agreement on international seaport and vessel security through the International Maritime Organization. In developing an agreement, each 

member country of the International Maritime Organization should 

consult with appropriate private sector interests in that country. 

The agreement would establish seaport and vessel security measures and could include—

‘‘(1) seaport screening of cargo and baggage similar to that 

done at airports; 
H. R. 1442—200

‘‘(2) security measures to restrict access to cargo, vessels, 

and dockside property to authorized personnel only; 

‘‘(3) additional security on board vessels; 

‘‘(4) licensing or certification of compliance with appropriate 

security standards; and 

‘‘(5) other appropriate measures to prevent unlawful acts 

against passengers and crews on vessels. 

‘‘§ 70303. Security standards at foreign ports 

‘‘(a) GENERAL REQUIREMENTS.—The Secretary shall develop and 

implement a plan to assess the effectiveness of the security measures maintained at foreign ports that the Secretary, in consultation 

with the Secretary of State, determines pose a high risk of acts 

of terrorism against passenger vessels. In carrying out this subsection, the Secretary shall consult with the Secretary of State 

about the terrorist threat that exists in each country and poses 

a high risk of acts of terrorism against passenger vessels. 

‘‘(b) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—

If the Secretary, after implementing the plan under subsection 

(a), determines that a port does not maintain and administer effective security measures, the Secretary of State (after being informed 

by the Secretary) shall—

‘‘(1) notify the appropriate government authorities of the 

country in which the port is located of the determination; 

and 

‘‘(2) recommend steps necessary to bring the security measures at that port up to the standard used by the Secretary 

in making the assessment under subsection (a). 

‘‘(c) ANTITERRORISM ASSISTANCE.—The President is encouraged 

to provide antiterrorism assistance related to maritime security 

under chapter 8 of part II of the Foreign Assistance Act of 1961 

(22 U.S.C. 2349aa et seq.) to foreign countries, especially for a 

port that the Secretary determines under subsection (b) does not 

maintain and administer effective security measures. 

‘‘§ 70304. Travel advisories on security at foreign ports 

‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Secretary that the Secretary has determined that a condition exists 

that threatens the safety or security of passengers, passenger vessels, or crew traveling to or from a foreign port that the Secretary 

has determined under section 70303(b) of this title does not maintain and administer effective security measures, the Secretary of 

State immediately shall issue a travel advisory for that port. The 

Secretary of State shall take the necessary steps to widely publicize 

the travel advisory. 

‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under subsection (a) may be lifted only if the Secretary, in consultation 

with the Secretary of State, has determined that effective security 

measures are maintained and administered at the port. 

‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify 

Congress immediately of any change in the status of a travel 

advisory issued under this section. 

‘‘§ 70305. Suspension of passenger services 

‘‘(a) GENERAL AUTHORITY.—Whenever the President determines 

that a foreign nation permits the use of territory under its jurisdiction as a base of operations or training for, or as a sanctuary 
H. R. 1442—201

for, or in any way arms, aids, or abets, a terrorist or terrorist 

group that knowingly uses the illegal seizure of passenger vessels 

or the threat thereof as an instrument of policy, the President 

may suspend the right of any passenger vessel common carrier 

to operate to or from, and the right of any passenger vessel of 

the United States to use, a port in that foreign nation for passenger 

service. The suspension may be without notice or hearing and 

for as long as the President determines is necessary to ensure 

the security of passenger vessels against unlawful seizure. 

‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a 

passenger vessel of the United States, may not operate in violation 

of a suspension under this section. 

‘‘(c) PENALTIES.— ‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in 

violation of this section, the Secretary may deny the vessels 

of that person entry to ports of the United States. 

‘‘(2) CIVIL PENALTY.—A person violating this section is liable 

to the United States Government for a civil penalty of not 

more than $50,000. Each day a vessel uses a prohibited port 

is a separate violation. 

‘‘§ 70306. Report on terrorist threats 

‘‘(a) CONTENT.—Not later than February 28 of each year, the 

Secretary shall submit a report to Congress on the threat from 

acts of terrorism to United States ports and vessels operating 

from those ports. The Secretary shall include a description of activities undertaken under title I of the Maritime Transportation Security Act of 2002 (Public Law 107–295, 116 Stat. 2066) and an 

analysis of the effect of those activities on port security against 

acts of terrorism. 

‘‘(b) SUBMISSION.—The report shall be submitted to the Committee on International Relations and the Committee on Transportation and Infrastructure of the House of Representatives and the 

Committee on Foreign Relations and the Committee on Commerce, 

Science, and Transportation of the Senate. Any classified information in the report shall be submitted separately as an addendum.

‘‘CHAPTER 705—MARITIME DRUG LAW ENFORCEMENT

‘‘Sec. 

‘‘70501. Findings and declarations. 

‘‘70502. Definitions. 

‘‘70503. Manufacture, distribution, or possession of controlled substances on vessels. 

‘‘70504. Jurisdiction and venue. 

‘‘70505. Failure to comply with international law as a defense. 

‘‘70506. Penalties. 

‘‘70507. Forfeitures.

‘‘§ 70501. Findings and declarations 

‘‘Congress finds and declares that trafficking in controlled substances aboard vessels is a serious international problem, is universally condemned, and presents a specific threat to the security 

and societal well-being of the United States. 

‘‘§ 70502. Definitions 

‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in 

section 102 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 802) apply to this chapter. 
H. R. 1442—202

‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term 

‘vessel of the United States’ means—

‘‘(1) a vessel documented under chapter 121 of this title 

or numbered as provided in chapter 123 of this title; 

‘‘(2) a vessel owned in any part by an individual who 

is a citizen of the United States, the United States Government, 

the government of a State or political subdivision of a State, 

or a corporation incorporated under the laws of the United 

States or of a State, unless—

‘‘(A) the vessel has been granted the nationality of 

a foreign nation under article 5 of the 1958 Convention 

on the High Seas; and 

‘‘(B) a claim of nationality or registry for the vessel 

is made by the master or individual in charge at the 

time of the enforcement action by an officer or employee 

of the United States who is authorized to enforce applicable 

provisions of United States law; and 

‘‘(3) a vessel that was once documented under the laws 

of the United States and, in violation of the laws of the United 

States, was sold to a person not a citizen of the United States, 

placed under foreign registry, or operated under the authority 

of a foreign nation, whether or not the vessel has been granted 

the nationality of a foreign nation. 

‘‘(c) VESSEL SUBJECT TO THE JURISDICTION OF THE UNITED

STATES.—

‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject 

to the jurisdiction of the United States’ includes—

‘‘(A) a vessel without nationality; 

‘‘(B) a vessel assimilated to a vessel without nationality 

under paragraph (2) of article 6 of the 1958 Convention 

on the High Seas; 

‘‘(C) a vessel registered in a foreign nation if that 

nation has consented or waived objection to the enforcement of United States law by the United States; 

‘‘(D) a vessel in the customs waters of the United 

States; 

‘‘(E) a vessel in the territorial waters of a foreign 

nation if the nation consents to the enforcement of United 

States law by the United States; and 

‘‘(F) a vessel in the contiguous zone of the United 

States, as defined in Presidential Proclamation 7219 of 

September 2, 1999 (43 U.S.C. 1331 note), that—

‘‘(i) is entering the United States; 

‘‘(ii) has departed the United States; or 

‘‘(iii) is a hovering vessel as defined in section 

401 of the Tariff Act of 1930 (19 U.S.C. 1401). 

‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver 

of objection by a foreign nation to the enforcement of United 

States law by the United States under paragraph (1)(C) or 

(E)—

‘‘(A) may be obtained by radio, telephone, or similar 

oral or electronic means; and 

‘‘(B) is proved conclusively by certification of the Secretary of State or the Secretary’s designee. 

‘‘(d) VESSEL WITHOUT NATIONALITY.— ‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without 

nationality’ includes—
H. R. 1442—203

‘‘(A) a vessel aboard which the master or individual 

in charge makes a claim of registry that is denied by 

the nation whose registry is claimed; 

‘‘(B) a vessel aboard which the master or individual 

in charge fails, on request of an officer of the United 

States authorized to enforce applicable provisions of United 

States law, to make a claim of nationality or registry for 

that vessel; and 

‘‘(C) a vessel aboard which the master or individual 

in charge makes a claim of registry and for which the 

claimed nation of registry does not affirmatively and 

unequivocally assert that the vessel is of its nationality. 

‘‘(2) VERIFICATION OR DENIAL.—A claim of registry under 

paragraph (1)(A) or (C) may be verified or denied by radio, 

telephone, or similar oral or electronic means. The denial of 

such a claim is proved conclusively by certification of the Secretary of State or the Secretary’s designee. 

‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nationality or registry under this section includes only—

‘‘(1) possession on board the vessel and production of documents evidencing the vessel’s nationality as provided in article 

5 of the 1958 Convention on the High Seas; 

‘‘(2) flying its nation’s ensign or flag; or 

‘‘(3) a verbal claim of nationality or registry by the master 

or individual in charge of the vessel. 

‘‘§ 70503. Manufacture, distribution, or possession of controlled substances on vessels 

‘‘(a) PROHIBITIONS.—An individual may not knowingly or intentionally manufacture or distribute, or possess with intent to manufacture or distribute, a controlled substance on board—

‘‘(1) a vessel of the United States or a vessel subject to 

the jurisdiction of the United States; or 

‘‘(2) any vessel if the individual is a citizen of the United 

States or a resident alien of the United States. 

‘‘(b) EXTENSION BEYOND TERRITORIAL JURISDICTION.—Subsection (a) applies even though the act is committed outside the 

territorial jurisdiction of the United States. 

‘‘(c) NONAPPLICATION.— ‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a) 

does not apply to—

‘‘(A) a common or contract carrier or an employee of 

the carrier who possesses or distributes a controlled substance in the lawful and usual course of the carrier’s business; or 

‘‘(B) a public vessel of the United States or an individual on board the vessel who possesses or distributes 

a controlled substance in the lawful course of the individual’s duties. 

‘‘(2) ENTERED IN MANIFEST.—Paragraph (1) applies only 

if the controlled substance is part of the cargo entered in 

the vessel’s manifest and is intended to be imported lawfully 

into the country of destination for scientific, medical, or other 

lawful purposes. 

‘‘(d) BURDEN OF PROOF.—The United States Government is 

not required to negative a defense provided by subsection (c) in 

a complaint, information, indictment, or other pleading or in a 
H. R. 1442—204

trial or other proceeding. The burden of going forward with the 

evidence supporting the defense is on the person claiming its benefit. 

‘‘§ 70504. Jurisdiction and venue 

‘‘(a) JURISDICTION.—Jurisdiction of the United States with 

respect to a vessel subject to this chapter is not an element of 

an offense. Jurisdictional issues arising under this chapter are 

preliminary questions of law to be determined solely by the trial 

judge. 

‘‘(b) VENUE.—A person violating section 70503 of this title shall 

be tried in the district court of the United States for—

‘‘(1) the district at which the person enters the United 

States; or 

‘‘(2) the District of Columbia. 

‘‘§ 70505. Failure to comply with international law as a 

defense 

‘‘A person charged with violating section 70503 of this title 

does not have standing to raise a claim of failure to comply with 

international law as a basis for a defense. A claim of failure to 

comply with international law in the enforcement of this chapter 

may be made only by a foreign nation. A failure to comply with 

international law does not divest a court of jurisdiction and is 

not a defense to a proceeding under this chapter. 

‘‘§ 70506. Penalties 

‘‘(a) VIOLATIONS.—A person violating section 70503 of this title 

shall be punished as provided in section 1010 of the Comprehensive 

Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 960). 

However, if the offense is a second or subsequent offense as provided 

in section 1012(b) of that Act (21 U.S.C. 962(b)), the person shall 

be punished as provided in section 1012 of that Act (21 U.S.C. 

962). 

‘‘(b) ATTEMPTS AND CONSPIRACIES.—A person attempting or 

conspiring to violate section 70503 of this title is subject to the 

same penalties as provided for violating section 70503. 

‘‘§ 70507. Forfeitures 

‘‘(a) IN GENERAL.—Property described in section 511(a) of the 

Comprehensive Drug Abuse Prevention and Control Act of 1970 

(21 U.S.C. 881(a)) that is used or intended for use to commit, 

or to facilitate the commission of, an offense under section 70503 

of this title may be seized and forfeited in the same manner that 

similar property may be seized and forfeited under section 511 

of that Act (21 U.S.C. 881). 

‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly 

recognized as smuggling tactics may provide prima facie evidence 

of intent to use a vessel to commit, or to facilitate the commission 

of, an offense under section 70503 of this title, and may support 

seizure and forfeiture of the vessel, even in the absence of controlled 

substances aboard the vessel. The following indicia, among others, 

may be considered, in the totality of the circumstances, to be prima 

facie evidence that a vessel is intended to be used to commit, 

or to facilitate the commission of, such an offense: 

‘‘(1) The construction or adaptation of the vessel in a 

manner that facilitates smuggling, including—
H. R. 1442—205

‘‘(A) the configuration of the vessel to ride low in the 

water or present a low hull profile to avoid being detected 

visually or by radar; 

‘‘(B) the presence of any compartment or equipment 

that is built or fitted out for smuggling, not including 

items such as a safe or lock-box reasonably used for the 

storage of personal valuables; 

‘‘(C) the presence of an auxiliary tank not installed 

in accordance with applicable law or installed in such a 

manner as to enhance the vessel’s smuggling capability; 

‘‘(D) the presence of engines that are excessively overpowered in relation to the design and size of the vessel; 

‘‘(E) the presence of materials used to reduce or alter 

the heat or radar signature of the vessel and avoid detection; 

‘‘(F) the presence of a camouflaging paint scheme, or 

of materials used to camouflage the vessel, to avoid detection; or 

‘‘(G) the display of false vessel registration numbers, 

false indicia of vessel nationality, false vessel name, or 

false vessel homeport. 

‘‘(2) The presence or absence of equipment, personnel, or 

cargo inconsistent with the type or declared purpose of the 

vessel. 

‘‘(3) The presence of excessive fuel, lube oil, food, water, 

or spare parts, inconsistent with legitimate vessel operation, 

inconsistent with the construction or equipment of the vessel, 

or inconsistent with the character of the vessel’s stated purpose. 

‘‘(4) The operation of the vessel without lights during times 

lights are required to be displayed under applicable law or 

regulation and in a manner of navigation consistent with smuggling tactics used to avoid detection by law enforcement authorities. 

‘‘(5) The failure of the vessel to stop or respond or heave 

to when hailed by government authority, especially where the 

vessel conducts evasive maneuvering when hailed. 

‘‘(6) The declaration to government authority of apparently 

false information about the vessel, crew, or voyage or the failure 

to identify the vessel by name or country of registration when 

requested to do so by government authority. 

‘‘(7) The presence of controlled substance residue on the 

vessel, on an item aboard the vessel, or on an individual aboard 

the vessel, of a quantity or other nature that reasonably 

indicates manufacturing or distribution activity. 

‘‘(8) The use of petroleum products or other substances 

on the vessel to foil the detection of controlled substance residue. 

‘‘(9) The presence of a controlled substance in the water 

in the vicinity of the vessel, where given the currents, weather 

conditions, and course and speed of the vessel, the quantity 

or other nature is such that it reasonably indicates manufacturing or distribution activity.’’.

SEC. 11. SUBTITLE VIII OF TITLE 46. 

Title 46, United States Code, is amended by adding after subtitle VII the following: 
H. R. 1442—206

‘‘Subtitle VIII—Miscellaneous

‘‘Chapter Sec. 

‘‘801. Wrecks and Salvage ................................................................................ 80101

‘‘803. Ice and Derelicts ..................................................................................... 80301

‘‘805. Safe Containers for International Cargo .......................................... 80501

‘‘CHAPTER 801—WRECKS AND SALVAGE

‘‘Sec. 

‘‘80101. Vessel stranded on foreign coast. 

‘‘80102. License to salvage on Florida coast. 

‘‘80103. Property on Florida coast to be taken to port of entry. 

‘‘80104. Salvaging operations by foreign vessels. 

‘‘80105. Canadian vessels aiding vessels in United States waters. 

‘‘80106. International agreement on derelicts. 

‘‘80107. Salvors of life to share in remuneration.

‘‘§ 80101. Vessel stranded on foreign coast 

‘‘(a) DUTIES OF CONSULAR OFFICER.—When a vessel of the 

United States is stranded on a coast of a foreign country, the 

consular officer in that country shall take proper measures, to 

the extent the laws of that country allow, to—

‘‘(1) save and secure the vessel and property on the vessel; 

and 

‘‘(2) prepare an inventory of the property that is saved. 

‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the 

consular officer shall deliver the property, with an inventory, to 

the owner of the property. 

‘‘(c) LIMITATION ON TAKING POSSESSION.—A consular officer 

may not take possession of property under this section when the 

owner, master, or consignee is present or able to take possession 

of the property. 

‘‘§ 80102. License to salvage on Florida coast 

‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in 

the business of salvaging on the coast of Florida, a vessel and 

its master each must have a license issued by a judge of the 

district court of the United States for a judicial district of Florida. 

‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this 

section, the judge must be satisfied, when the license is for—

‘‘(1) a vessel, that the vessel is seaworthy and properly 

equipped for the business of saving property shipwrecked and 

in distress; or 

‘‘(2) a master, that the master is trustworthy and innocent 

of any fraud or misconduct related to property shipwrecked 

or saved on the coast. 

‘‘§ 80103. Property on Florida coast to be taken to port of 

entry 

‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or 

a key or shoal, on the coast of Florida and within the jurisdiction 

of the United States, shall be brought to a port of entry of the 

United States. 

‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property 

described in subsection (a) to a foreign port may be seized by, 

and forfeited to, the United States Government. A forfeiture under 

this subsection accrues half to the informer and half to the Government. 
H. R. 1442—207

‘‘§ 80104. Salvaging operations by foreign vessels 

‘‘(a) PROHIBITION.—Except as provided in this section or section 

80105 of this title, a foreign vessel may not, under penalty of 

forfeiture, engage in salvaging operations on the Atlantic or Pacific 

coast of the United States, in any portion of the Great Lakes 

or their connecting or tributary waters, including any portion of 

the Saint Lawrence River through which the international boundary 

line extends, or in territorial waters of the United States on the 

Gulf of Mexico. 

‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary 

of Homeland Security may authorize a foreign vessel to engage 

in salvaging operations in a particular locality if, on investigation, 

the Secretary is satisfied that there is not available in that locality 

a suitable vessel that is—

‘‘(1) owned only by citizens of the United States (including 

a Bowaters corporation under section 12118 of this title); and 

‘‘(2) documented under chapter 121 of this title or numbered 

under chapter 123 of this title. 

‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does 

not prohibit or restrict assistance to vessels or salvaging operations 

authorized by treaty, including—

‘‘(1) article II of the Treaty between the United States 

and Great Britain concerning reciprocal rights for United States 

and Canada in the conveyance of prisoners and wrecking and 

salvage, signed at Washington, May 18, 1908 (35 Stat. 2036); 

or 

‘‘(2) the Treaty between the United States of America and 

Mexico to facilitate assistance to and salvage of vessels in 

territorial waters, signed at Mexico City, June 13, 1935 (49 

Stat. 3359). 

‘‘§ 80105. Canadian vessels aiding vessels in United States 

waters 

‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment 

may give aid to Canadian or other vessels and property wrecked, 

disabled, or in distress in the waters of the United States contiguous 

to Canada, including—

‘‘(1) the canal and improvement of the waters between 

Lake Erie and Lake Huron; and 

‘‘(2) the Saint Marys River and canal. 

‘‘(b) RECIPROCITY.—This section does not apply after the President proclaims that privileges reciprocal to those under subsection 

(a) have been withdrawn or rendered inoperative by the Government 

of Canada. 

‘‘§ 80106. International agreement on derelicts 

‘‘The President may make an international agreement with 

other governments interested in the navigation of the North Atlantic 

Ocean, providing for the reporting, marking, and removal of dangerous wrecks, derelicts, and other menaces to navigation outside 

the coast waters of the countries bordering the North Atlantic 

Ocean. 

‘‘§ 80107. Salvors of life to share in remuneration 

‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who 

gave aid following an accident giving rise to salvage, is entitled 

to a fair share of the payment awarded to the salvor for salvaging 
H. R. 1442—208

the vessel or other property or preventing or minimizing damage 

to the environment. 

‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remuneration for aid or salvage services is not affected by common ownership 

of the vessels giving and receiving the aid or salvage services. 

‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover 

remuneration for giving aid or salvage services must be brought 

within 2 years after the date the aid or salvage services were 

given, unless the court in which the action is brought is satisfied 

that during that 2-year period there had not been a reasonable 

opportunity to seize the aided or salvaged vessel within the jurisdiction of the court or within the territorial waters of the country 

of the plaintiff’s residence or principal place of business. 

‘‘(d) NONAPPLICATION.—This section does not apply to a vessel 

of war or a vessel owned by the United States Government appropriated only to a public service.

‘‘CHAPTER 803—ICE AND DERELICTS

‘‘Sec. 

‘‘80301. International agreements. 

‘‘80302. Patrol services. 

‘‘80303. Speed of vessel in ice region.

‘‘§ 80301. International agreements 

‘‘(a) GENERAL AUTHORITY.—The President may make agreements with interested maritime countries to—

‘‘(1) maintain in the North Atlantic Ocean a service of 

ice patrol, of study and observation of ice and current conditions, and of assistance to vessels and their crews requiring 

assistance within the limits of the patrol; 

‘‘(2) maintain a service of study and observation of ice 

and current conditions in the waters affecting the set and 

drift of ice in the North Atlantic Ocean; and 

‘‘(3) take all practicable steps to ensure the destruction 

or removal of derelicts in the northern part of the Atlantic 

Ocean, east of the line drawn from Cape Sable to a point 

in latitude 34 degrees north, longitude 70 degrees west, if 

the destruction or removal is necessary. 

‘‘(b) PAYMENT BETWEEN COUNTRIES.—The President may 

include in an agreement under subsection (a) a provision for—

‘‘(1) payment to the United States Government by other 

countries for their proportionate share of the expense of 

maintaining the services; or 

‘‘(2) contribution by the Government for its proportionate 

share if the agreement provides for another country to maintain 

the services. 

‘‘§ 80302. Patrol services 

‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made 

under section 80301 of this title provide otherwise, an ice patrol 

shall be maintained during the entire ice season in guarding the 

southeastern, southern, and southwestern limits of the region of 

icebergs in the vicinity of the Grand Banks of Newfoundland. The 

patrol shall inform trans-Atlantic and other passing vessels by 

radio and other available means of the ice conditions and the 

extent of the dangerous region. During the ice season, there shall 

be maintained a service of study of ice and current conditions, 
H. R. 1442—209

a service of providing assistance to vessels and crews requiring 

assistance, and a service of removing and destroying derelicts. 

Any of these services may be maintained during the remainder 

of the year as may be advisable. 

‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn 

any vessel known to be approaching a dangerous area and recommend safe routes. 

‘‘(c) RECORDING AND REPORTING INCIDENTS.—

‘‘(1) RECORDING.—An ice patrol vessel shall record the name 

of a vessel and the facts of the case when the patrol observes 

or knows that the vessel—

‘‘(A) is on other than a regular recognized or advertised 

route crossing the North Atlantic Ocean; 

‘‘(B) has crossed the fishing banks of Newfoundland 

north of latitude 43 degrees north during the fishing season; or 

‘‘(C) has passed through regions known or believed 

to be endangered by ice when proceeding to and from 

ports of North America. 

‘‘(2) REPORTING.—The name of the vessel and all pertinent 

information about the incident shall be reported to the government of the country to which the vessel belongs if that government requests. 

‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard, 

under the direction of the Secretary of the department in which 

the Coast Guard is operating, shall carry out the services provided 

for in this section and shall assign necessary vessels, material, 

and personnel of the Coast Guard. On request of such Secretary, 

the head of an agency may detail personnel, lend or contribute 

material or equipment, or otherwise assist in carrying out the 

services provided for in this section. 

‘‘(e) ANNUAL REPORT.—The Commandant shall publish an 

annual report of the activities of the services provided for in this 

section. A copy of the report shall be provided to each interested 

foreign government and to each agency assisting in the work. 

‘‘§ 80303. Speed of vessel in ice region 

‘‘(a) REQUIREMENT.—The master of a vessel of the United 

States, when ice is reported on or near the vessel’s course, shall 

proceed at a moderate speed or change the course of the vessel 

to go well clear of the danger zone. 

‘‘(b) CIVIL PENALTY.—A master violating this section is liable 

to the United States Government for a civil penalty of not more 

than $500.

‘‘CHAPTER 805—SAFE CONTAINERS FOR 

INTERNATIONAL CARGO

‘‘Sec. 

‘‘80501. Definitions. 

‘‘80502. Application of Convention. 

‘‘80503. General authority of the Secretary. 

‘‘80504. Approval and examination. 

‘‘80505. Enforcement. 

‘‘80506. Delegation of authority. 

‘‘80507. Employee protection. 

‘‘80508. Amendments to Convention. 

‘‘80509. Civil penalty.
H. R. 1442—210

‘‘§ 80501. Definitions 

‘‘In this chapter: 

‘‘(1) CONTAINER.—The term ‘container’ has the meaning 

given that term in the Convention. 

‘‘(2) CONVENTION.—The term ‘Convention’ means the International Convention for Safe Containers, and its annexes, done 

at Geneva, Switzerland, December 2, 1972. 

‘‘(3) INTERNATIONAL TRANSPORT.—The term ‘international 

transport’ means the transportation of a container between—

‘‘(A) a place in a foreign country and a place in the 

jurisdiction of the United States; or 

‘‘(B) two places outside the United States by United 

States carriers. 

‘‘(4) OWNER.—The term ‘owner’ includes the lessee or bailee 

of a container if a written lease or bailment provides for the 

lessee or bailee to exercise the owner’s responsibility for 

maintaining and examining the container. 

‘‘(5) SAFETY APPROVAL PLATE.—The term ‘safety approval 

plate’ has the meaning given that term in annex I of the 

Convention. 

‘‘§ 80502. Application of Convention 

‘‘The Convention applies to an owner of a container used in 

international transport if the owner is domiciled or has its principal 

office in the United States. 

‘‘§ 80503. General authority of the Secretary 

‘‘(a) IN GENERAL.—The Secretary of the department in which 

the Coast Guard is operating shall carry out the Convention and 

this chapter in the United States. 

‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations 

to carry out this chapter. The regulations shall—

‘‘(1) establish procedures for testing, inspecting, and initially approving containers and designs for containers, including 

procedures for attaching, invalidating, and removing safety 

approval plates for containers; 

‘‘(2) establish procedures to be followed by the owners of 

containers for the periodic examination of containers as provided in the Convention; and 

‘‘(3) provide a method for developing, collecting, and 

disseminating information about container safety and the international transport of containers. 

‘‘(c) SAFETY APPROVAL PLATES.—If the owner of a container 

without a safety approval plate establishes that the container satisfies the standards of the Convention, the Secretary may authorize 

a safety approval plate to be attached to the container. 

‘‘(d) SCHEDULE OF FEES.—The Secretary may prescribe a 

schedule of fees for services performed by the Secretary, or by 

a person delegated authority under section 80506 of this title, 

for the testing, inspection, and initial approval of containers and 

container designs. 

‘‘(e) ENCOURAGING INTERMODAL TRANSPORT.—To the maximum 

extent possible, the Secretary shall encourage the development 

and use of intermodal transport, using containers built to facilitate 

economical, safe, and expeditious handling of containerized cargo 

without intermediate reloading when it is being transported over 

land, air, and sea areas. 
H. R. 1442—211

‘‘§ 80504. Approval and examination 

‘‘(a) DOMICILE AND PRINCIPAL OFFICE IN UNITED STATES.—

A container owner domiciled and having its principal office in 

the United States shall have the container—

‘‘(1) approved initially under procedures prescribed by the 

Secretary of the department in which the Coast Guard is operating or by the government of another country that is a party 

to the Convention; and 

‘‘(2) examined periodically as provided in the Convention 

under procedures prescribed by the Secretary. 

‘‘(b) DOMICILE OR PRINCIPAL OFFICE IN UNITED STATES.—A 

container owner domiciled or having its principal office in the 

United States shall have the container—

‘‘(1) approved initially under procedures prescribed by the 

Secretary or by the government of another country that is 

a party to the Convention; and 

‘‘(2) examined periodically as provided in the Convention, 

under procedures prescribed by the government of the country 

in which the owner is domiciled or has its principal office, 

as long as that country is a party to the Convention. 

‘‘(c) NEITHER DOMICILE NOR PRINCIPAL OFFICE IN UNITED

STATES.—A container owner neither domiciled nor having its principal office in the United States or another country that is a 

party to the Convention may submit a container for initial approval 

and periodic examination under procedures prescribed by the Secretary. 

‘‘§ 80505. Enforcement 

‘‘(a) IN GENERAL.—To enforce the Convention, this chapter, 

and regulations prescribed under this chapter, the Secretary of 

the department in which the Coast Guard is operating may—

‘‘(1) examine, or require to be examined, containers in 

international transport; 

‘‘(2) approve designs for containers; 

‘‘(3) inspect and test containers being manufactured; 

‘‘(4) issue a detention order removing or excluding a container from service until the container owner satisfies the Secretary that the container meets the standards of the Convention, if the container—

‘‘(A) does not have a safety approval plate attached 

to it; or 

‘‘(B) has a safety approval plate attached but there 

is significant evidence that the container is in a condition 

that creates an obvious risk to safety; 

‘‘(5) take other appropriate action, including issuing necessary orders, to remove a container from service or restrict 

its use if the container is not in compliance with the Convention, 

this chapter, or regulations prescribed under this chapter, but 

does not present an obvious risk to safety; and 

‘‘(6) allow a container found to be unsafe or without a 

safety approval plate to be moved to another location for repair 

or other disposition, under restrictions consistent with the 

intent of the Convention. 

‘‘(b) PAYMENT OF EXPENSES.— ‘‘(1) EXAMINATION.—The owner of a container involved in 

an action by the Secretary under this section related to an 
H. R. 1442—212

examination of the container shall pay or reimburse the Secretary for the expenses arising from that action, except for 

the costs of routine examinations of the container or a safety 

approval plate. 

‘‘(2) TESTING, INSPECTION, AND INITIAL APPROVAL.—The 

owner of a container submitted to the procedure established 

by the Secretary for testing, inspection, and initial approval, 

and the manufacturer of a container that submits a design 

to the procedure established by the Secretary for testing, inspection, and initial approval, shall pay or reimburse the Secretary 

for the expenses arising from the testing, inspection, or 

approval. 

‘‘(3) CREDIT TO APPROPRIATION.—Amounts received by the 

Secretary as reimbursement shall be credited to the appropriation for operating expenses of the Coast Guard. 

‘‘(c) PRESUMPTION BASED ON SAFETY APPROVAL PLATE.—A container bearing a safety approval plate authorized by a country 

that is a party to the Convention is presumed to be in a safe 

condition unless there is significant evidence that the container 

is in a condition that creates an obvious risk to safety. 

‘‘(d) NOTICE OF ORDERS.—

‘‘(1) IN GENERAL.—When the Secretary issues a detention 

or other order under this section, the Secretary promptly shall 

notify in writing—

‘‘(A) the owner of the container; 

‘‘(B) the owner’s agent; or 

‘‘(C) if the identity of the owner is not apparent from 

the container or shipping documents, the custodian. 

‘‘(2) INFORMATION TO INCLUDE.—The notification shall identify the container involved, give the location of the container, 

and describe the condition or situation giving rise to the order. 

‘‘(e) DURATION OF ORDERS.—An order issued by the Secretary 

under this section remains in effect until—

‘‘(1) the Secretary declares the container to be in compliance 

with the standards of the Convention; or 

‘‘(2) the container is removed permanently from service. 

‘‘(f) NOTICE OF DEFECTIVE CONTAINER TO COUNTRY ISSUING

SAFETY APPROVAL PLATE.—If the Secretary has reason to believe 

that a container bearing a safety approval plate issued by another 

country was defective at the time of approval, the Secretary shall 

notify that country. 

‘‘§ 80506. Delegation of authority 

‘‘(a) IN GENERAL.—The Secretary of the department in which 

the Coast Guard is operating may delegate to any person, including 

a public or private agency or nonprofit organization, authority to 

grant initial approval for containers and designs and to attach 

safety approval plates. 

‘‘(b) REGULATIONS.—Before making a delegation under this section, the Secretary shall prescribe regulations establishing—

‘‘(1) criteria to be followed in selecting a person to whom 

authority is to be delegated; 

‘‘(2) a detailed description of the duties and powers to 

be carried out by the person to whom authority is delegated, 

including the records the person shall keep; and 
H. R. 1442—213

‘‘(3) the review the Secretary will conduct to decide whether 

the person is carrying out the delegated duties and powers 

properly. 

‘‘(c) INSPECTION OF RECORDS.—A person delegated authority 

under this section shall make available to the Secretary for inspection, on request, records the person is required to keep. 

‘‘(d) PENALTIES AND ORDERS.—A person delegated authority 

under this section may not—

‘‘(1) assess or collect, or attempt to assess or collect, a 

penalty for violation of the Convention, this chapter, or an 

order issued by the Secretary under this chapter; or 

‘‘(2) issue or attempt to issue a detention or other order. 

‘‘(e) PUBLICATION.—The Secretary shall publish in the Federal 

Register or other appropriate publication—

‘‘(1) the name and address of each person to whom authority 

is delegated; 

‘‘(2) the duties and powers delegated; and 

‘‘(3) the period of the delegation. 

‘‘(f) REVOCATION.—The Secretary may revoke a delegation of 

authority under this section at any time. 

‘‘§ 80507. Employee protection 

‘‘(a) PROHIBITION.—A person may not discharge or discriminate 

against an employee because the employee has reported the existence of an unsafe container or a violation of this chapter or a 

regulation prescribed under this chapter. 

‘‘(b) COMPLAINTS.—An employee alleging to have been discharged or discriminated against in violation of subsection (a) may 

file a complaint with the Secretary of Labor. The complaint must 

be filed within 60 days after the violation. 

‘‘(c) ENFORCEMENT.—The Secretary of Labor may investigate 

the complaint. If the Secretary of Labor finds there has been a 

violation, the Secretary of Labor may bring a civil action in an 

appropriate district court of the United States. The court has jurisdiction to restrain violations of subsection (a) and order appropriate 

relief, including reinstatement of the employee to the employee’s 

former position with back pay. 

‘‘(d) NOTICE TO COMPLAINANT.—Within 30 days after receiving 

a complaint under this section, the Secretary of Labor shall notify 

the complainant of the intended action on the complaint. 

‘‘§ 80508. Amendments to Convention 

‘‘(a) PROPOSALS BY UNITED STATES.—The Secretary of State, 

with the concurrence of the Secretary of the department in which 

the Coast Guard is operating, may propose amendments to the 

Convention or request a conference for amending the Convention 

as provided in article IX of the Convention. 

‘‘(b) PROPOSALS BY OTHER COUNTRIES.—An amendment communicated to the United States under article IX(2) of the Convention 

may be accepted for the United States by the President, with 

the advice and consent of the Senate. The President may declare 

that the United States does not accept an amendment. 

‘‘(c) AMENDMENTS TO ANNEXES.—

‘‘(1) IN GENERAL.—The Secretary of State, with the concurrence of the Secretary of the department in which the Coast 

Guard is operating—
H. R. 1442—214

‘‘(A) may propose amendments to the annexes to the 

Convention; 

‘‘(B) may propose a conference for amending annexes 

to the Convention; and 

‘‘(C) shall consider and act on amendments to the 

annexes to the Convention adopted by the Maritime Safety 

Committee of the International Maritime Organization and 

communicated to the United States under article X(2) of 

the Convention. 

‘‘(2) ACTION FOLLOWING APPROVAL OR OBJECTION.—If a proposed amendment to an annex is approved by the United States, 

the amendment shall enter into force as provided in article 

X of the Convention. If a proposed amendment is objected 

to, the Secretary of State promptly shall communicate the 

objection as provided in article X(3) of the Convention. 

‘‘(d) APPOINTMENT OF ARBITRATOR.—The Secretary of State, 

with the concurrence of the Secretary of the department in which 

the Coast Guard is operating, shall appoint an arbitrator when 

one is required to resolve a dispute within the meaning of article 

XIII of the Convention. 

‘‘§ 80509. Civil penalty 

‘‘(a) IN GENERAL.—An owner, agent, or custodian who has been 

notified of an order issued under section 80505 of this title and 

fails to take reasonable and prompt action to prevent or stop a 

container subject to the order from being moved in violation of 

the order is liable to the United States Government for a civil 

penalty of not more than $5,000 for each container moved. Each 

day the container remains in service while the order is in effect 

is a separate violation. 

‘‘(b) ASSESSMENT AND COLLECTION.—

‘‘(1) IN GENERAL.—After notice and an opportunity for a 

hearing, the Secretary of the department in which the Coast 

Guard is operating shall assess and collect any penalty under 

this section. 

‘‘(2) FACTORS TO CONSIDER.—In determining the amount 

of the penalty, the Secretary shall consider the gravity of the 

violation, the hazards involved, and the record of the person 

charged with respect to violations of the Convention, this 

chapter, or regulations prescribed under this chapter. 

‘‘(3) REMISSION, MITIGATION, OR COMPROMISE.—The Secretary may remit, mitigate, or compromise a penalty under 

this section. 

‘‘(4) ENFORCEMENT.—If a person fails to pay a penalty 

under this section, the Secretary shall refer the matter to 

the Attorney General for collection in an appropriate district 

court of the United States.’’.

SEC. 12. MARITIME ADMINISTRATION. 

Section 109 of title 49, United States Code, is amended to 

read as follows: 

‘‘§ 109. Maritime Administration 

‘‘(a) ORGANIZATION.—The Maritime Administration is an 

administration in the Department of Transportation. 

‘‘(b) MARITIME ADMINISTRATOR.—The head of the Maritime 

Administration is the Maritime Administrator, who is appointed 
H. R. 1442—215

by the President by and with the advice and consent of the Senate. 

The Administrator shall report directly to the Secretary of Transportation and carry out the duties prescribed by the Secretary. 

‘‘(c) DEPUTY MARITIME ADMINISTRATOR.—The Maritime 

Administration shall have a Deputy Maritime Administrator, who 

is appointed in the competitive service by the Secretary, after 

consultation with the Administrator. The Deputy Administrator 

shall carry out the duties prescribed by the Administrator. The 

Deputy Administrator shall be Acting Administrator during the 

absence or disability of the Administrator and, unless the Secretary 

designates another individual, during a vacancy in the office of 

Administrator. 

‘‘(d) DUTIES AND POWERS VESTED IN SECRETARY.—All duties 

and powers of the Maritime Administration are vested in the Secretary. 

‘‘(e) REGIONAL OFFICES.—The Maritime Administration shall 

have regional offices for the Atlantic, Gulf, Great Lakes, and Pacific 

port ranges, and may have other regional offices as necessary. 

The Secretary shall appoint a qualified individual as Director of 

each regional office. The Secretary shall carry out appropriate activities and programs of the Maritime Administration through the 

regional offices. 

‘‘(f) INTERAGENCY AND INDUSTRY RELATIONS.—The Secretary 

shall establish and maintain liaison with other agencies, and with 

representative trade organizations throughout the United States, 

concerned with the transportation of commodities by water in the 

export and import foreign commerce of the United States, for the 

purpose of securing preference to vessels of the United States 

for the transportation of those commodities. 

‘‘(g) DETAILING OFFICERS FROM ARMED FORCES.—To assist the 

Secretary in carrying out duties and powers relating to the Maritime 

Administration, not more than five officers of the armed forces 

may be detailed to the Secretary at any one time, in addition 

to details authorized by any other law. During the period of a 

detail, the Secretary shall pay the officer an amount that, when 

added to the officer’s pay and allowances as an officer in the 

armed forces, makes the officer’s total pay and allowances equal 

to the amount that would be paid to an individual performing 

work the Secretary considers to be of similar importance, difficulty, 

and responsibility as that performed by the officer during the detail. 

‘‘(h) CONTRACTS AND AUDITS.— ‘‘(1) CONTRACTS.—In the same manner that a private corporation may make a contract within the scope of its authority 

under its charter, the Secretary may make contracts for the 

United States Government and disburse amounts to—

‘‘(A) carry out the Secretary’s duties and powers under 

this section and subtitle V of title 46; and 

‘‘(B) protect, preserve, and improve collateral held by 

the Secretary to secure indebtedness. 

‘‘(2) AUDITS.—The financial transactions of the Secretary 

under paragraph (1) shall be audited by the Comptroller General. The Comptroller General shall allow credit for an expenditure shown to be necessary because of the nature of the business 

activities authorized by this section or subtitle V of title 46. 

At least once a year, the Comptroller General shall report 

to Congress any departure by the Secretary from this section 

or subtitle V of title 46. 
H. R. 1442—216

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) IN GENERAL.—Except as otherwise provided in this 

subsection, there are authorized to be appropriated such 

amounts as may be necessary to carry out the duties and 

powers of the Secretary relating to the Maritime Administration. 

‘‘(2) LIMITATIONS.—Only those amounts specifically authorized by law may be appropriated for the use of the Maritime 

Administration for—

‘‘(A) acquisition, construction, or reconstruction of vessels; 

‘‘(B) construction-differential subsidies incident to the 

construction, reconstruction, or reconditioning of vessels; 

‘‘(C) costs of national defense features; 

‘‘(D) payments of obligations incurred for operatingdifferential subsidies; 

‘‘(E) expenses necessary for research and development 

activities, including reimbursement of the Vessel Operations Revolving Fund for losses resulting from expenses 

of experimental vessel operations; 

‘‘(F) the Vessel Operations Revolving Fund; 

‘‘(G) National Defense Reserve Fleet expenses; 

‘‘(H) expenses necessary to carry out part B of subtitle 

V of title 46; and 

‘‘(I) other operations and training expenses related to 

the development of waterborne transportation systems, the 

use of waterborne transportation systems, and general 

administration. 

‘‘(3) TRAINING VESSELS.—Amounts may not be appropriated 

for the purchase or construction of training vessels for State 

maritime academies unless the Secretary has approved a plan 

for sharing training vessels between State maritime academies.’’.

SEC. 13. AMENDMENTS RELATING TO MARITIME SECURITY ACT OF 

2003. 

(a) AMENDMENTS TO CHAPTER 531.—Chapter 531 of title 46, 

United States Code, is amended as follows: 

(1) In section 53102—

(A) in the headings of paragraphs (1), (2), and (4) 

of subsection (c), strike ‘‘SECTION 2’’ and substitute ‘‘SECTION

50501’’; 

(B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and (B), 

and (4)(B), strike ‘‘section 2 of the Shipping Act, 1916 

(46 U.S.C. App. 802)’’ and substitute ‘‘section 50501 of 

this title’’; 

(C) in subsection (d), strike ‘‘the first section of Public 

Law 81–891 (64 Stat. 1120; 46 U.S.C. App. note prec. 

3)’’ and substitute ‘‘section 501 of this title’’; and 

(D) in subsection (e)(1)—

(i) strike ‘‘a documented vessel (as that term is 

defined in section 12101 of this title)’’ and substitute 

‘‘documented under chapter 121 of this title,’’; and 

(ii) in subparagraph (B), strike ‘‘a documented 

vessel (as defined in that section)’’ and substitute 

‘‘documented under chapter 121’’. 

(2) In section 53103(c)—
H. R. 1442—217

(A) in the heading of paragraph (1)(C), strike ‘‘SECTION

2’’ and substitute ‘‘SECTION 50501’’; 

(B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), strike 

‘‘section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’ 

and substitute ‘‘section 50501 of this title’’; 

(C) in paragraph (1)(B), strike ‘‘subparagraphs’’ and 

substitute ‘‘subparagraph’’; and 

(D) in paragraph (3)(B), strike ‘‘agreement’’ and substitute ‘‘agreements’’. 

(3) In section 53104—

(A) in subsection (c)(3)(B)(ii)(I) and (II), strike ‘‘section 

2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and 

substitute ‘‘section 50501 of this title’’; 

(B) in subsection (e)(2), strike ‘‘section 9 of the Shipping 

Act, 1916 (46 U.S.C. App. 808)’’ and substitute ‘‘section 

56101 of this title’’; and 

(C) in subsection (e)(3), strike ‘‘section 902 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1242)’’ and ‘‘section 

902 of such Act’’ and substitute ‘‘chapter 563 of this title’’ 

and ‘‘chapter 563’’, respectively. 

(4) In section 53105—

(A) in subsection (a)(1)(A), strike ‘‘section 12105’’ and 

substitute ‘‘section 12111’’; and 

(B) in subsection (f), strike ‘‘approve’’ and substitute 

‘‘approves’’. 

(5) In section 53106—

(A) in subsection (d)(1), strike ‘‘section 2631 of title 

10, United States Code, the Act of March 26, 1934 (46 

U.S.C. App. 1241–1), section 901(a), 901(b), or 901b of 

the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a), 

1241(b), or 1241f)’’ and substitute ‘‘section 55302(a), 55304, 

55305, or 55314 of this title, section 2631 of title 10’’; 

(B) in subsection (d)(2), strike ‘‘section 901(a), 901(b), 

or 901b of the Merchant Marine Act, 1936 (46 U.S.C. 

App. 1241(a), 1241(b), or 1241f),’’ and substitute ‘‘section 

55302(a), 55305, or 55314 of this title’’; and 

(C) in subsection (e)(2), strike ‘‘section 2(c) of the Shipping Act, 1916 (46 U.S.C. App. 802(c))’’ and substitute 

‘‘section 50501 of this title, applying the 75 percent ownership requirement of that section’’. 

(6) In section 53107(f)—

(A) strike ‘‘section 2631 of title 10, United States Code, 

the Act of March 26, 1934 (46 U.S.C. App. 1241–1), section 

901(a), 901(b), or 901b of the Merchant Marine Act, 1936 

(46 U.S.C. App. 1241(a), 1241(b), or 1241f)’’ and substitute 

‘‘section 55302(a), 55304, 55305, or 55314 of this title, 

section 2631 of title 10’’; and 

(B) strike ‘‘section 2631 of title 10, United States Code, 

the Act of March 26, 1934 (46 U.S.C. App. 1241–1), and 

sections 901(a), 901(b), and 901b of the Merchant Marine 

Act, 1936 (46 U.S.C. App. 1241(a), 1241(b), and 1241b)’’ 

and substitute ‘‘sections 55302(a), 55304, 55305, and 55314 

of this title and section 2631 of title 10’’. 

(7) In section 53108(b), strike ‘‘section 901(b)(1) of the 

Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))’’ and 

substitute ‘‘section 55305(a) of this title’’. 
H. R. 1442—218

(b) OTHER CONFORMING PROVISIONS.—If this Act is enacted 

prior to October 1, 2005, then—

(1) until that date, the reference in section 12111(c)(3) 

of title 46, United States Code, as enacted by this Act, to 

‘‘chapter 531 of this title’’ is deemed instead to be a reference 

to ‘‘subtitle B of title VI of the Merchant Marine Act, 1936’’; 

and 

(2) section 3534(b)(1) of the Maritime Security Act of 2003 

(Public Law 108–136, 117 Stat. 1818) is repealed.

SEC. 14. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS. 

(a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46 

App. U.S.C. 111, 123) is amended by striking ‘‘or tonnage tax’’. 

(b) Section 809(a) of the Merchant Marine Act, 1936 (46 App. 

U.S.C. 1213(a)), is amended by striking ‘‘and section 211(a)’’. 

SEC. 15. ADDITIONAL AMENDMENTS TO TITLE 46. 

Title 46, United States Code, is amended as follows: 

(1) The analysis of subtitle II is amended as follows: 

(A) In each chapter item, capitalize the first letter 

of each word containing 4 or more letters. 

(B) Strike the item for chapter 39. 

(C) The item for chapter 45 is amended to read as 

follows:

‘‘45. Uninspected Commercial Fishing Industry Vessels ...................... 4501’’.

(2) Section 2101 is amended as follows: 

(A) Paragraphs (2), (3), (3a), (6), (10), (10a), (12), (17b), 

(36), (41), (44), (45), and (46) are repealed. 

(B) In paragraph (8a), insert ‘‘Prevention’’ after 

‘‘Abuse’’. 

(C) In paragraph (18), strike ‘‘those’’. 

(D) In paragraph (34)—

(i) strike ‘‘, except in part H,’’; and 

(ii) strike ‘‘head’’ and substitute ‘‘Secretary’’. 

(3) In section 2102(b), strike ‘‘West’’ and ‘‘East’’ and substitute ‘‘west’’ and ‘‘east’’, respectively. 

(4) In section 2106, strike ‘‘a district court of the United 

States’’ and substitute ‘‘the district court of the United States 

for any district’’. 

(5) Section 2108 is repealed. 

(6) In section 2110—

(A) in subsection (a)(2), strike ‘‘part B of this title’’ 

and substitute ‘‘part B of this subtitle’’; 

(B) in subsection (b)(2)(A)(iii), strike the period at the 

end and substitute ‘‘; and’’; 

(C) in subsection (b)(5), strike ‘‘fees’’ and substitute 

‘‘fee’’; 

(D) In subsection (f), strike ‘‘Secretary of the Treasury 

shall deny the clearance required by section 4197 of the 

Revised Statutes of the United States (46 App. U.S.C. 

91)’’ and substitute ‘‘Secretary of Homeland Security shall 

deny the clearance required by section 60105 of this title’’; 

and 

(E) In subsection (j), strike ‘‘state’’ and substitute 

‘‘State’’. 

(7) In section 2301, strike ‘‘section’’ and substitute ‘‘sections 

2304 and’’. 
H. R. 1442—219

(8) In section 2304—

(A) insert the paragraph designation ‘‘(1)’’ after ‘‘(a)’’; 

and 

(B) insert at the end of subsection (a) the following 

new paragraph: 

‘‘(2) Paragraph (1) does not apply to a vessel of war or a 

vessel owned by the United States Government appropriated only 

to a public service.’’. 

(9) In section 2306(a)(2), strike ‘‘section 212(A) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1122a),’’ and substitute 

‘‘section 50113 of this title’’. 

(10) In section 3205(d), strike ‘‘Secretary of the Treasury 

shall withhold or revoke the clearance required by section 4197 

of the Revised Statutes (46 App. U.S.C. 91)’’ and substitute 

‘‘Secretary of Homeland Security shall withhold or revoke the 

clearance required by section 60105 of this title’’. 

(11) In section 3302—

(A) in subsection (b), insert a comma after ‘‘fishing 

vessel’’; 

(B) in subsection (j)(2)(B), strike ‘‘section 1304 of the 

Merchant Marine Act, 1936 (46 App. U.S.C. 1295c)’’ and 

substitute ‘‘chapter 515 of this title’’; and 

(C) in subsection (l)(1)(C), strike ‘‘Inc..’’ and substitute 

‘‘Inc.’’. 

(12) In section 3306(d), strike ‘‘section 1302(3) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295a(3))’’ and substitute ‘‘section 51102 of this title’’. 

(13) In section 3318(f), strike the period after ‘‘felony’’. 

(14) In the analysis of chapter 37, the item for section 

3719 is amended to read as follows:

‘‘3719. Reduction of oil spills from single hull non-self-propelled tank vessels.’’.

(15) In paragraphs (1)(C), (2), and (3) of section 3703a(c), 

strike ‘‘documentation under section 4136 of the Revised Statutes of the United States (46 App. U.S.C. 14)’’ and substitute 

‘‘documentation as a wrecked vessel under section 12112 of 

this title’’. 

(16) In section 3704, strike ‘‘section 27 of the Merchant 

Marine Act, 1920 (46 App. U.S.C. 883),’’ and substitute ‘‘chapter 

551 of this title’’. 

(17) In section 3718(e)(1), strike ‘‘Secretary of the Treasury’’ 

and ‘‘section 4197 of the Revised Statutes of the United States 

(46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland 

Security’’ and ‘‘section 60105 of this title’’, respectively. 

(18) In section 4702, strike the subsection ‘‘(a)’’ designation. 

(19) In section 4705—

(A) strike ‘‘subcontractor not’’ and substitute ‘‘subcontractor are not’’; 

(B) strike ‘‘(a)(1)’’ and substitute ‘‘(a)’’; 

(C) strike ‘‘(2) Paragraph (1)’’ and substitute ‘‘(b) Subsection (a)’’; 

(D) strike ‘‘(A)’’ and substitute ‘‘(1)’’; and 

(E) strike ‘‘(B)’’ and substitute ‘‘(2)’’. 

(20) In section 5113(b), strike ‘‘section 4197 of the Revised 

Statutes (46 App. U.S.C. 91)’’ and substitute ‘‘section 60105 

of this title’’. 
H. R. 1442—220

(21) In section 6101, redesignate the second subsection 

(g) and subsection (h) as subsections (h) and (i), respectively. 

(22) In section 8103(a), strike ‘‘Only’’ and substitute ‘‘Except 

as otherwise provided in this title, only’’. 

(23) In section 9307(b)(2)(A), strike ‘‘The’’ and substitute 

‘‘the’’. 

(24) In section 12503(a), in the matter before paragraph 

(1), strike ‘‘delegee’’ and substitute ‘‘delegate’’. 

(25) In section 13102(a), insert ‘‘(26 U.S.C. 9504)’’ after 

‘‘Internal Revenue Code of 1986’’. 

(26) In section 14305(a)—

(A) in paragraph (1), strike ‘‘and sections 12106(c) and 

12108(c)’’ and substitute ‘‘of this subtitle and section 

12116’’; 

(B) in paragraph (5), strike ‘‘section 4283 of the Revised 

Statutes of the United States (46 App. U.S.C. 183)’’ and 

substitute ‘‘section 30506 of this title’’; 

(C) in paragraph (6), strike ‘‘sections 27 and 27A of 

the Act of June 5, 1920 (46 App. U.S.C. 883 and 883–

1)’’ and substitute ‘‘sections 12118 and 12132 of this title’’; 

and 

(D) in paragraph (7), strike ‘‘Act of July 14, 1956 (46 

App. U.S.C. 883a)’’ and substitute ‘‘section 12139(b) of this 

title’’. 

(27) In section 31306(a), strike ‘‘section 9 or 37 of the 

Shipping Act, 1916 (46 App. U.S.C. 808, 835)’’ and substitute 

‘‘section 56102 or 56103 of this title’’. 

(28) In section 31308, strike ‘‘title XI of the Merchant 

Marine Act, 1936 (46 App. U.S.C. 1271 et seq.)’’ and substitute 

‘‘chapter 537 of this title’’. 

(29) In section 31322—

(A) in subsection (a)(4)(A), strike ‘‘section 12102(c)’’ 

and substitute ‘‘section 12113(c)’’; 

(B) in subsection (a)(4)(E), strike ‘‘under section 

12102(a)’’ and substitute ‘‘for purposes of documentation 

under section 12103’’; and 

(C) in subsection (f)(2), strike ‘‘section 12102(c)’’ and 

substitute ‘‘section 12113(c)’’. 

(30) In section 31325(b)(3)(B), strike ‘‘section 9 or 37 of 

the Shipping Act, 1936 (46 App. U.S.C. 808, 835)’’ and substitute ‘‘section 56101 or 56102 of this title’’. 

(31) In section 31326(b)—

(A) in paragraph (1), strike ‘‘title XI of the Merchant 

Marine Act, 1936 (46 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘chapter 537 of this title,’’; and 

(B) in paragraph (2), strike ‘‘title XI of that Act’’ and 

substitute ‘‘chapter 537 of this title’’. 

(32) In section 31329—

(A) in subsection (a)(1), strike ‘‘section 12102’’ and substitute ‘‘section 12103’’; and 

(B) in subsection (b)—

(i) in paragraph (2), strike ‘‘section 902 of the 

Merchant Marine Act, 1936 (46 App. U.S.C. 1242)’’ 

and substitute ‘‘chapter 563 of this title’’; and 

(ii) in paragraph (3), strike ‘‘sale foreign within 

the terms of the first proviso of section 27 of the 

Merchant Marine Act, 1920 (46 App. U.S.C. 883)’’ and 
H. R. 1442—221

substitute ‘‘sale to a person not a citizen of the United 

States under section 12132 of this title’’. 

(33)(A) Sections 70118 and 70119, as added by section 

801(a) of the Coast Guard and Maritime Transportation Act 

of 2004 (Public Law 108–293, 118 Stat. 1078), are redesignated 

as sections 70117 and 70118, respectively, and moved to appear 

immediately after section 70116 of title 46, United States Code. 

(B) Sections 70117 and 70118, as added by section 802(a)(2) 

of such Act, are redesignated as sections 70120 and 70121, 

respectively, and moved to appear immediately after section 

70119 of title 46, United States Code. 

(C) In section 70120(a) (as redesignated by subparagraph 

(B)), strike ‘‘section 70120’’ and substitute ‘‘section 70119’’. 

(D) In section 70121(a) (as redesignated by subparagraph 

(B))—

(i) strike ‘‘section 70120’’ and substitute ‘‘section 

70119’’; and 

(ii) strike ‘‘section 4197 of the Revised Statutes of 

the United States (46 U.S.C. App. 91)’’ and substitute ‘‘section 60105 of this title’’. 

(E) In the analysis of chapter 701, strike the items relating 

to sections 70117–70119 and substitute the following:

‘‘70117. Firearms, arrests, and seizure of property. 

‘‘70118. Enforcement by State and local officers. 

‘‘70119. Civil penalty. 

‘‘70120. In rem liability for civil penalties and certain costs. 

‘‘70121. Withholding of clearance.’’.

SEC. 16. RECREATIONAL BOATING SAFETY TECHNICAL AMENDMENTS. 

(a) SECTION 2102.—Section 2102 of title 46, United States Code, 

is amended by—

(1) striking subsection (a); and 

(2) striking the subsection (b) designation. 

(b) CHAPTER 131.—Chapter 131 of title 46, United States Code, 

is amended as follows: 

(1) Redesignate sections 13101 to 13106 as sections 13102 

to 13107. 

(2) Insert as the first section the following: 

‘‘§ 13101. Definitions 

‘‘In this chapter: 

‘‘(1) ELIGIBLE STATE.—The term ‘eligible State’ means a 

State that has a State recreational boating safety program 

accepted by the Secretary. 

‘‘(2) STATE RECREATIONAL BOATING SAFETY PROGRAM.—The 

term ‘State recreational boating safety program’ means education, assistance, and enforcement activities conducted for 

maritime casualty prevention, reduction, and reporting for recreational boating.’’. 

(3) In the chapter analysis, redesignate items 13101 to 

13106 as items 13102 to 13107 and insert as the first item 

the following:

‘‘13101. Definitions.’’.

(c) CROSS REFERENCES.— (1) Section 4 of the Dingell-Johnson Sport Fish Restoration 

Act (16 U.S.C. 777c) is amended by striking ‘‘13106’’ wherever 

appearing and substituting ‘‘13107’’. 
H. R. 1442—222

(2) Section 9504(c) of the Internal Revenue Code of 1986 

(26 U.S.C. 9504(c)) is amended by striking ‘‘section 13106’’ 

and substituting ‘‘section 13107’’. 

(3) Section 13102(c) of title 46, United States Code, as 

redesignated by subsection (b), is amended by striking ‘‘section 

13103’’ and substituting ‘‘section 13104’’. 

(4) Section 13103(c) of title 46, United States Code, as 

redesignated by subsection (b), is amended by striking ‘‘section 

13106’’ and substituting ‘‘section 13107’’. 

(5) Section 13107(a)(1) of title 46, United States Code, 

as redesignated by subsection (b), is amended by striking ‘‘section 13103’’ and substituting ‘‘section 13104’’. 

(6) Section 13108(a) of title 46, United States Code, is 

amended by—

(A) striking ‘‘section 13103’’ and substituting ‘‘section 

13104’’; and 

(B) striking ‘‘section 13105’’ and substituting ‘‘section 

13106’’. 

(7) Section 31322(d)(1)(A) of title 46, United States Code, 

is amended by striking ‘‘section 13106(b)(8)’’ and substituting 

‘‘section 13107(b)(8)’’. 

SEC. 17. CONFORMING AMENDMENTS TO OTHER LAWS. 

(a) TITLE 10.—Title 10, United States Code, is amended as 

follows: 

(1) In section 374(b)(4)(A)(iv), strike ‘‘The Maritime Drug 

Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘Chapter 705 of title 46’’. 

(2) In section 2218(d)(2), strike ‘‘sections 508 and 510 of 

the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), 

shall be deposited in the Fund’’ and substitute ‘‘sections 57101–

57104 and chapter 573 of title 46’’. 

(3) In section 2350b(g)(2), strike ‘‘section 901(b) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b))’’ and substitute 

‘‘section 55305 of title 46’’. 

(4) In section 2645—

(A) in subsection (c), strike ‘‘the second sentence of 

section 1208(a) of the Merchant Marine Act, 1936 (46 

U.S.C. App. 1288(a))’’ and substitute ‘‘section 53909(b) of 

title 46’’; 

(B) in subsection (h)(1), strike ‘‘title XII of the Merchant 

Marine Act, 1936 (46 U.S.C. App. 1281 et seq.),’’ and substitute ‘‘chapter 539 of title 46’’; and 

(C) in subsection (h)(2), strike ‘‘the first sentence of 

section 1208(a) of the Merchant Marine Act, 1936 (46 

U.S.C. App. 1288(a))’’ and substitute ‘‘section 53909(a) of 

title 46’’. 

(5) In section 5985, strike ‘‘section 1304 of the Merchant 

Marine Act, 1936 (46 U.S.C. App. 1295c),’’ and substitute 

‘‘chapter 515 of title 46’’. 

(6) In section 7721(a), strike ‘‘the Act of March 3, 1925 

(commonly referred to as the ‘Public Vessels Act’) (46 U.S.C. 

App. 781–790)’’ and substitute ‘‘chapter 311 of title 46’’. 

(b) TITLE 11.—Title 11, United States Code, is amended as 

follows: 

(1) In section 362(b)—
H. R. 1442—223

(A) in paragraph (12), strike ‘‘section 207 or title XI 

of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 

537 of title 46 or section 109(h) of title 49’’; and 

(B) in paragraph (13), strike ‘‘section 207 or title XI 

of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 

537 of title 46’’. 

(2) In section 1110(a)(3)(A)(ii), strike ‘‘documented vessel 

(as defined in section 30101(1) of title 46)’’ and substitute 

‘‘vessel documented under chapter 121 of title 46’’. 

(c) TITLE 14.—Sections 821(b) and 823a(b) of title 14, United 

States Code, are each amended by striking paragraphs (3)–(5) and 

substituting the following: 

‘‘(3) Section 30101 of title 46 (popularly known as the 

Admiralty Extension Act). 

‘‘(4) Chapter 309 of title 46 (known as the Suits in 

Admiralty Act). 

‘‘(5) Chapter 311 of title 46 (known as the Public Vessels 

Act).’’. 

(d) TITLE 18.—Title 18, United States Code, is amended as 

follows: 

(1) In section 229F(9)(C), strike ‘‘section 3(b) of the Maritime Drug Enforcement Act, as amended (46 U.S.C., App. sec. 

1903(b))’’ and substitute ‘‘section 70502(b) of title 46, United 

States Code’’. 

(2) In section 507—

(A) in the first paragraph, strike ‘‘recording, registry, 

or enrollment of any vessel, in the office of any collector 

of the customs, or a license to any vessel for carrying 

on the coasting trade or fisheries of the United States’’ 

and substitute ‘‘documentation of any vessel’’; 

(B) in the first paragraph, strike ‘‘collector or other’’; 

and 

(C) in the second paragraph, strike ‘‘license,’’. 

(3) In section 924—

(A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and (k)(1), 

strike ‘‘the Maritime Drug Law Enforcement Act (46 U.S.C. 

App. 1901 et seq.)’’ and substitute ‘‘chapter 705 of title 

46’’; and 

(B) in subsection (g)(2), strike ‘‘802 et seq.’’ and substitute ‘‘801 et seq.’’. 

(4) In section 929(a)(2), strike ‘‘the Maritime Drug Law 

Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute 

‘‘chapter 705 of title 46’’. 

(5) In section 965(a), strike ‘‘section 4197 of the Revised 

Statutes of the United States (46 U.S.C. App. 91)’’ and substitute ‘‘section 60105 of title 46’’. 

(6) In section 2277(a), strike ‘‘registered, enrolled, or 

licensed’’ and substitute ‘‘documented’’. 

(7) In section 3142(e) and (f)(1)(C), strike ‘‘the Maritime 

Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ 

and substitute ‘‘chapter 705 of title 46’’. 

(e) INTERNAL REVENUE CODE OF 1986.—The Internal Revenue 

Code of 1986 (26 U.S.C. 1 et seq.) is amended as follows: 

(1) In section 56(c)(2)—

(A) strike ‘‘section 607 of the Merchant Marine Act, 

1936 (46 U.S.C. 1177)’’ and substitute ‘‘chapter 535 of title 

46, United States Code’’; and 
H. R. 1442—224

(B) in subparagraphs (A) and (B), strike ‘‘such section 

607’’ substitute ‘‘such chapter 535’’. 

(2) In section 140(a)(4), strike ‘‘section 607(d) of the Merchant Marine Act, 1936 (46 U.S.C. 1177)’’ and substitute ‘‘section 53507 of title 46, United States Code’’. 

(3) In section 543(a)(1)(B), strike ‘‘section 511 or 607 of 

the Merchant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)’’ 

and substitute ‘‘chapter 533 or 535 of title 46, United States 

Code’’. 

(4) In section 1023(2), strike ‘‘section 511 of the Merchant 

Marine Act, 1936, as amended (46 U.S.C. 1161)’’ and substitute 

‘‘chapter 533 of title 46, United States Code’’. 

(5) In section 1061—

(A) in paragraph (1), strike ‘‘section 510 of the Merchant Marine Act, 1936, see subsection (e) of that section, 

as amended August 4, 1939 (46 U.S.C. App. 1160)’’ and 

substitute ‘‘chapter 573 of title 46, United States Code, 

see section 57307 of title 46’’; 

(B) in paragraph (2), strike ‘‘section 511 of such Act, 

as amended (46 U.S.C. App. 1161)’’ and substitute ‘‘chapter 

533 of title 46, United States Code’’; and 

(C) strike paragraph (3). 

(6) In section 7518—

(A) in subsection (a)(1), strike ‘‘section 607 of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 535 of 

title 46 of the United States Code’’; 

(B) in subsections (a)(2) and (c)(1)(A) and (D), strike 

‘‘section 607 of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 535 of title 46, United States Code’’; and 

(C) in subsection (g)(3)(C)(iii), strike ‘‘Merchant Marine 

Act of 1936’’ and substitute ‘‘Merchant Marine Act, 1936,’’. 

(f) TITLE 28.—Title 28, United States Code, is amended as 

follows: 

(1) In section 994(h)(1)(B) and (2)(B), strike ‘‘the Maritime 

Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ 

and substitute ‘‘chapter 705 of title 46’’. 

(2) In section 1605(d), strike ‘‘the Ship Mortgage Act, 1920 

(46 U.S.C. 911 and following)’’ and ‘‘that Act’’ and substitute 

‘‘section 31301 of title 46’’ and ‘‘chapter 313 of title 46’’, respectively. 

(3) In section 2342(3)—

(A) in subparagraph (A), strike ‘‘section 2, 9, 37, or 

41 of the Shipping Act, 1916 (46 U.S.C. App. 802, 803, 

808, 835, 839, and 841a)’’ and substitute ‘‘section 50501, 

50502, 56101–56104, or 57109 of title 46’’; and 

(B) strike subparagraph (B) and substitute the following: 

‘‘(B) the Federal Maritime Commission issued pursuant 

to section 305, 41304, 41308, or 41309 or chapter 421 

or 441 of title 46;’’. 

(4) In section 2680(d), strike ‘‘sections 741–752, 781–790 

of Title 46,’’ and substitute ‘‘chapter 309 or 311 of title 46’’. 

(g) TITLE 40.—Title 40, United States Code, is amended as 

follows: 

(1) In section 548, strike ‘‘the Merchant Marine Act, 1936 

(46 App. U.S.C. 1101 et seq.),’’ and substitute ‘‘part F of subtitle 

V of title 46’’. 
H. R. 1442—225

(2) In section 3134(b), strike ‘‘the Merchant Marine Act, 

1936 (46 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘subtitle 

V of title 46’’. 

(3) In section 3313(a)—

(A) in the matter before paragraph (1), strike ‘‘Except 

for the authority contained in section 3305(b) of this title, 

the’’ and substitute ‘‘The’’; and 

(B) in paragraph (1), strike ‘‘shall’’ and substitute 

‘‘shall, except for the authority contained in section 3305(b) 

of this title,’’. 

(h) TITLE 49.—Title 49, United States Code, is amended as 

follows: 

(1) In section 5122(c)(1), strike ‘‘Secretary of the Treasury’’ 

and ‘‘section 4197 of the Revised Statutes of the United States 

(46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland 

Security’’ and ‘‘section 60105 of title 46’’, respectively. 

(2) In section 5901(3)(B), strike ‘‘section 3 of the Shipping 

Act of 1984 (46 App. U.S.C. 1702)’’ and substitute ‘‘section 

40102 of title 46’’. 

(i) MISCELLANEOUS.—Section 5501(a) of the Oceans Act of 1992 

(Public Law 102–587, 106 Stat. 5084) is amended by adding the 

following: 

‘‘(3) The exceptions provided by paragraph (2) shall apply under 

section 55109 of title 46, United States Code, to the same extent 

as under former section 1 of the Act of May 28, 1906, as amended 

by paragraph (1).’’. 

SEC. 18. TRANSITIONAL AND SAVINGS PROVISIONS. 

(a) CUTOFF DATE.—This Act replaces certain provisions enacted 

on or before April 30, 2005. If a law enacted after that date amends 

or repeals a provision replaced by this Act, that law is deemed 

to amend or repeal, as the case may be, the corresponding provision 

enacted by this Act. If a law enacted after that date is otherwise 

inconsistent with this Act, it supersedes this Act to the extent 

of the inconsistency. 

(b) ORIGINAL DATE OF ENACTMENT UNCHANGED.—For purposes 

of determining whether one provision supersedes another based 

on enactment later in time, the date of enactment of a provision 

enacted by this Act is deemed to be the date of enactment of 

the provision it replaced. 

(c) REFERENCES TO PROVISIONS REPLACED.—A reference to a 

provision replaced by this Act is deemed to refer to the corresponding provision enacted by this Act. 

(d) LAWS GOVERNING APPLICABILITY OF PRIOR AMENDMENTS.—

This Act does not affect any law governing the applicability of 

an amendment to a provision replaced by this Act, notwithstanding 

the repeal by this Act of the provision that was amended. To 

the extent that any such law governed the applicability of a provision replaced by this Act, that law governs the applicability of 

the corresponding provision enacted by this Act. 

(e) REGULATIONS, ORDERS, AND OTHER ADMINISTRATIVE

ACTIONS.—A regulation, order, or other administrative action in 

effect under a provision replaced by this Act continues in effect 

under the corresponding provision enacted by this Act. 

(f) ACTIONS TAKEN AND OFFENSES COMMITTED.—An action 

taken or an offense committed under a provision replaced by this 
H. R. 1442—226

Act is deemed to have been taken or committed under the corresponding provision enacted by this Act. 

SEC. 19. REPEALS. 

The following provisions are repealed, except with respect to 

rights and duties that matured, penalties that were incurred, or 

proceedings that were begun before the date of enactment of this 

Act:

Revised Statutes 

Revised Statutes Section 

United States Code 

Title Section 

2792 ................................................................. 46 App. 124

4136 ................................................................. 46 App. 14

4173 ................................................................. 46 App. 42

4184 ................................................................. 46 App. 57

4188 ................................................................. 46 App. 59

4197 ................................................................. 46 App. 91

4202 ................................................................. 46 App. 97

4204 ................................................................. 46 App. 98

4206 ................................................................. 46 App. 100

4219 ................................................................. 46 App. 121

4220 ................................................................. 46 App. 122

4221 ................................................................. 46 App. 125

4225 ................................................................. 46 App. 128

4226 ................................................................. 46 App. 129

4227 ................................................................. 46 App. 135

4228 ................................................................. 46 App. 141

4238 ................................................................. 46 App. 721

4239 ................................................................. 46 App. 722

4240 ................................................................. 46 App. 723

4241 ................................................................. 46 App. 724

4281 ................................................................. 46 App. 181

4282 ................................................................. 46 App. 182

4283 ................................................................. 46 App. 183

4283A ............................................................... 46 App. 183b 

4283B ............................................................... 46 App. 183c 

4284 ................................................................. 46 App. 184

4285 ................................................................. 46 App. 185

4286 ................................................................. 46 App. 186

4287 ................................................................. 46 App. 187

4289 ................................................................. 46 App. 188

4309 ................................................................. 46 App. 354

4310 ................................................................. 46 App. 355

4311 ................................................................. 46 App. 251

4320 ................................................................. 46 App. 262

4336 ................................................................. 46 App. 277

4370 ................................................................. 46 App. 316

4373 ................................................................. 46 App. 321

4374 ................................................................. 46 App. 322

4375 ................................................................. 46 App. 323

4376 ................................................................. 46 App. 324

4378 ................................................................. 46 App. 326

4379 ................................................................. 46 App. 327

4380 ................................................................. 46 App. 328

4493 ................................................................. 46 App. 491

Statutes at Large 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

1874

Apr. 18 110 .......................................................... 18 31 ................ 336

1878

June 19 324 .......................................................... 20 175 .............. 725

1884

June 26 121 14 ..................................................... 23 57 ................ 121
H. R. 1442—227

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

18 ..................................................... 23 57 ................ 189

July 5 221 3 ....................................................... 23 119 .............. 3

8(c) ................................................... ........ ..................... 9

1886

June 19 421 8 ....................................................... 24 81 ................ 289

9 ....................................................... 24 81 ................ 320

17 ..................................................... 24 82 ................ 142

1887

Mar. 3 339 .......................................................... 24 475 .............. 143

1892

July 26 248 1 ....................................................... 27 267 .............. 144

2 ....................................................... 27 268 .............. 145

1893

Feb. 13 105 1 ....................................................... 27 445 .............. 190

2 ....................................................... 27 445 .............. 191

3 ....................................................... 27 445 .............. 192

4 ....................................................... 27 445 .............. 193

5 ....................................................... 27 446 .............. 194

6 ....................................................... 27 446 .............. 196

7 ....................................................... 27 446 .............. 195

8 ....................................................... 27 446 .............. 190 nt

Oct. 31 No. 13 .......................................................... 28 13 ................ 726

1898

Feb. 17 26 1 ....................................................... 30 248 .............. 290

3 ....................................................... 30 248 .............. 291

1900

Mar. 31 120 1–3 ................................................... 31 58 ................ 163

1906

May 28 2566 1 (except as may be applicable 

under section 5501(a)(2) of Pub. 

L. 102–587).

34 204 .............. 292

1908

Mar. 24 96 1 ....................................................... 35 46 ................ 133

2 ....................................................... 35 46 ................ 134

May 28 212 5 ....................................................... 35 425 .............. 104

1909

Aug. 5 6 36 ..................................................... 36 111 .............. 121

1910

Mar. 8 86 .......................................................... 36 234 .............. 132

1912

Aug. 1 268 1 ....................................................... 37 242 .............. 727

3 ....................................................... 37 242 .............. 729

4 ....................................................... 37 242 .............. 730

5 ....................................................... 37 242 .............. 731

1913

Oct. 3 16 IV(J)(1)–(3) ...................................... 38 195 .............. 19 U.S.C. 

128, 130, 

131; 

46 App. 146

1915

Mar. 4 153 20 ..................................................... 38 1185 ............ 688

171 .......................................................... 38 1193 ............ 19 U.S.C. 

128, 131; 

46 App. 121, 

128, 146
H. R. 1442—228

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

1916

Sept. 7 451 1 ....................................................... 39 728 .............. 801

2(a)–(c) ............................................. 39 729 .............. 802

2(d) ................................................... 39 729 .............. 803

9 ....................................................... 39 730 .............. 808

12 ..................................................... 39 732 .............. 811

34 ..................................................... 39 738 .............. 833

36 ..................................................... 39 738 .............. 834

37 ..................................................... ........ ..................... 835

38 ..................................................... ........ ..................... 836

39 ..................................................... ........ ..................... 837

41 ..................................................... ........ ..................... 839

46 ..................................................... ........ ..................... 842

1920

Mar. 9 95 1 ....................................................... 41 525 .............. 741

2 ....................................................... 41 525 .............. 742

3 ....................................................... 41 526 .............. 743

4 ....................................................... 41 526 .............. 744

5 ....................................................... 41 526 .............. 745, 745 nt 

6 ....................................................... 41 527 .............. 746

7 ....................................................... 41 527 .............. 747

8 ....................................................... 41 527 .............. 748

9 ....................................................... 41 527 .............. 749

10 ..................................................... 41 528 .............. 750

11 ..................................................... 41 528 .............. 751

12 ..................................................... 41 528 .............. 752

Mar. 30 111 1 ....................................................... 41 537 .............. 761

2 ....................................................... 41 537 .............. 762

4 ....................................................... 41 537 .............. 764

5 ....................................................... 41 537 .............. 765

6 ....................................................... 41 537 .............. 766

7 ....................................................... 41 538 .............. 767

8 ....................................................... 41 538 .............. 768

June 5 250 1 ....................................................... 41 988 .............. 861

6 ....................................................... 41 991 .............. 865

7 ....................................................... 41 991 .............. 866

8 ....................................................... 41 992 .............. 867

9 ....................................................... 41 992 .............. 868

10 ..................................................... 41 992 .............. 869

12 ..................................................... 41 993 .............. 871

13 ..................................................... 41 993 .............. 872

17 ..................................................... 41 994 .............. 875

19 ..................................................... 41 995 .............. 876

21 ..................................................... 41 997 .............. 877

27 ..................................................... 41 999 .............. 883

27A ................................................... ........ ..................... 883–1

28 ..................................................... 41 999 .............. 884

36 ..................................................... 41 1007 ............ 887

37 ..................................................... 41 1008 ............ 888

39 ..................................................... 41 1008 ............ 889

1925

Mar. 3 428 1 ....................................................... 43 1112 ............ 781

2 ....................................................... 43 1112 ............ 782

3 ....................................................... 43 1112 ............ 783

4 ....................................................... 43 1112 ............ 784

5 ....................................................... 43 1113 ............ 785

6 ....................................................... 43 1113 ............ 786

7 ....................................................... 43 1113 ............ 787

8 ....................................................... 43 1113 ............ 788

9 ....................................................... 43 1113 ............ 789

10 ..................................................... 43 1113 ............ 790

1928

May 22 675 1 ....................................................... 45 689 .............. 891

202 ................................................... 45 690 .............. 891b 

203 ................................................... 45 690 .............. 891c 

703 ................................................... 45 698 .............. 891u 

704 ................................................... 45 698 .............. 891v 

705 ................................................... 45 698 .............. 891w 
H. R. 1442—229

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

706 ................................................... 45 698 .............. 891x

1932

June 30 314 306 ................................................... 47 408 .............. 804a

315 .......................................................... 47 420 .............. 743a, 745

1934

Mar. 26 90 .......................................................... 48 500 .............. 1241–1

June 14 523 .......................................................... 48 963 .............. 48 U.S.C. 

1664

1936

June 25 807 1 ....................................................... 49 1922 ............ 738

2 ....................................................... 49 1922 ............ 738a 

4 ....................................................... 49 1923 ............ 738c

June 29 858 101 ................................................... 49 1985 ............ 1101

201 ................................................... 49 1985 ............ 1111

202 ................................................... 49 1986 ............ 1112

204 ................................................... 49 1987 ............ 1114

205 ................................................... 49 1987 ............ 1115

206 ................................................... 49 1987 ............ 1116

207 ................................................... 49 1988 ............ 1117

208 ................................................... 49 1988 ............ 1118

209 ................................................... 49 1988 ............ 1119

210 ................................................... 49 1989 ............ 1120

211 ................................................... 49 1989 ............ 1121

212 ................................................... 49 1990 ............ 1122

212(A) .............................................. ........ ..................... 1122a 

212(B) .............................................. ........ ..................... 1122b 

213 ................................................... 49 1991 ............ 1123

214 ................................................... 49 1991 ............ 1124

215 ................................................... ........ ..................... 1125

302 ................................................... ........ ..................... 1132

508 ................................................... 49 2000 ............ 1158

510 ................................................... ........ ..................... 1160

511 (added by Act Oct. 10, 1940) .. ........ ..................... 1161

607 ................................................... 49 2005 ............ 1177

701 ................................................... 49 2008 ............ 1191

702 ................................................... 49 2008 ............ 1192

703 ................................................... 49 2008 ............ 1193

704 ................................................... 49 2008 ............ 1194

705 ................................................... 49 2009 ............ 1195

706 ................................................... 49 2009 ............ 1196

707 ................................................... 49 2009 ............ 1197

708 ................................................... 49 2009 ............ 1198

709 ................................................... 49 2010 ............ 1199

710 ................................................... 49 2010 ............ 1200

711 ................................................... 49 2010 ............ 1201

712 ................................................... 49 2010 ............ 1202

713 ................................................... 49 2010 ............ 1203

714 ................................................... 49 2011 ............ 1204

715 ................................................... ........ ..................... 1205

805 ................................................... 49 2012 ............ 1223

806(b)–(d) ........................................ 49 2014 ............ 1228

808 ................................................... 49 2015 ............ 1226

809(b) ............................................... ........ ..................... 1213

810 ................................................... 49 2015 ............ 1227

901 ................................................... 49 2015 ............ 1241

901a ................................................. ........ ..................... 1241e 

901b ................................................. ........ ..................... 1241f 

901c .................................................. ........ ..................... 1241g 

901d ................................................. ........ ..................... 1241h 

901e ................................................. ........ ..................... 1241i 

901f .................................................. ........ ..................... 1241j 

901g ................................................. ........ ..................... 1241k 

901h ................................................. ........ ..................... 1241l 

901i .................................................. ........ ..................... 1241m 

901j .................................................. ........ ..................... 1241n 

901k ................................................. ........ ..................... 1241o 

902 ................................................... 49 2015 ............ 1242
H. R. 1442—230

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

905 ................................................... 49 2016 ............ 1244

906 (1st sentence) ........................... 49 2016 ............ 1245

908 ................................................... ........ ..................... 1247

1101 ................................................. ........ ..................... 1271

1102 ................................................. ........ ..................... 1272

1103 ................................................. ........ ..................... 1273

1104A ............................................... ........ ..................... 1274

1104B ............................................... ........ ..................... 1274a 

1105 ................................................. ........ ..................... 1275

1108 ................................................. ........ ..................... 1279a 

1109 ................................................. ........ ..................... 1279b 

1110 ................................................. ........ ..................... 1279c 

1111 ................................................. ........ ..................... 1279d 

1111 ................................................. ........ ..................... 1279f 

1112 ................................................. ........ ..................... 1279e 

1112 ................................................. ........ ..................... 1279g 

1201 ................................................. ........ ..................... 1281

1202 ................................................. ........ ..................... 1282

1203 ................................................. ........ ..................... 1283

1204 ................................................. ........ ..................... 1284

1205 ................................................. ........ ..................... 1285

1206 ................................................. ........ ..................... 1286

1207 ................................................. ........ ..................... 1287

1208 ................................................. ........ ..................... 1288

1209 ................................................. ........ ..................... 1289

1210 ................................................. ........ ..................... 1290

1211 ................................................. ........ ..................... 1291

1212 ................................................. ........ ..................... 1292

1213 ................................................. ........ ..................... 1293

1214 ................................................. ........ ..................... 1294

1301 ................................................. ........ ..................... 1295

1302 ................................................. ........ ..................... 1295a 

1303 ................................................. ........ ..................... 1295b 

1304 ................................................. ........ ..................... 1295c 

1305 ................................................. ........ ..................... 1295d 

1306 ................................................. ........ ..................... 1295e 

1307 ................................................. ........ ..................... 1295f 

1308 ................................................. ........ ..................... 1295g

1938

Apr. 26 174 .......................................................... 52 223 .............. 289a

June 25 681 1st proviso on p. 1119 .................... 52 1119 ............ 1111a

1940

June 29 442 .......................................................... 54 684 .............. 1242a

1941

Feb. 6 5 4 ....................................................... 55 6 .................. 1125a

1947

Mar. 22 20 proviso under heading ‘‘Independent Offices’’.61 18 ................ 1116a

1948

June 19 526 .......................................................... 62 496 .............. 740

June 30 775 101 (last proviso on p. 1199) .......... 62 1199 ............ 864a

1949

June 29 281 1 (proviso) ........................................ 63 349 .............. 864b

1950

Dec. 27 1155 1, 2 ................................................... 64 1120 ............ 3 nt prec.

1951

June 2 121 pars. under heading ‘‘Vessel Operations Revolving Fund’’.65 59 ................ 1241a

Nov. 1 664 par. under heading ‘‘War-Risk Insurance Revolving Fund’’.65 746 .............. 1288a
H. R. 1442—231

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

1956

June 20 415 101 (par. beginning with ‘‘Vessel 

operations revolving fund’’).

70 319 .............. 1241b, 

1241b nt

July 14 600 2 ....................................................... 70 544 .............. 883a 

3 ....................................................... 70 544 .............. 883b

Aug. 1 846 .......................................................... 70 897 .............. 1241c

1957

June 13 85–52 101 (1st proviso on p. 73) ............... 71 73 ................ 1177a

1958

June 25 85–469 101 (par. under heading ‘‘Federal 

Ship Mortgage Insurance 

Fund’’).

72 231 .............. 1280

1960

June 12 86–518 9 ....................................................... 74 217 .............. 1125 nt

1961

June 30 87–77 .......................................................... 75 196 .............. 289b

Sept. 13 87–220 2 ....................................................... 75 493 .............. 251a 

3 ....................................................... 75 493 .............. 251b

1965

June 30 89–56 .......................................................... 79 195 .............. 1111 nt

July 30 89–99 1 ....................................................... 79 424 .............. 441

3 ....................................................... 79 424 .............. 443

4 ....................................................... 79 424 .............. 444

1966

Nov. 6 89–777 2 ....................................................... 80 1356 ............ 817d 

3 ....................................................... 80 1357 ............ 817e

1976

July 14 94–361 603 ................................................... 90 929 .............. 1126–1

Oct. 4 94–455 807 ................................................... 90 1606 ............ 1177–1

1977

Dec. 13 95–208 1 ....................................................... 91 1475 ............ 1501 nt 

2 ....................................................... 91 1475 ............ 1501

3 ....................................................... 91 1476 ............ 1502

4 ....................................................... 91 1476 ............ 1503

5 ....................................................... 91 1477 ............ 1504

6 ....................................................... 91 1478 ............ 1505

7 ....................................................... 91 1479 ............ 1506

8 ....................................................... 91 1479 ............ 1507

1980

Sept. 15 96–350 1 ....................................................... 94 1159 ............ 1901

2 ....................................................... 94 1160 ............ 1902

3 ....................................................... 94 1160 ............ 1903

4 ....................................................... 94 1160 ............ 1904

Oct. 6 96–382 1 ....................................................... 94 1525 ............ 763a

Oct. 7 96–387 5 ....................................................... 94 1546 ............ 1121–1

1981

Aug. 6 97–31 2 ....................................................... 95 151 .............. 1601

3 ....................................................... 95 151 .............. 1602

4 ....................................................... 95 151 .............. 1603

5 ....................................................... 95 151 .............. 1604

6 ....................................................... 95 151 .............. 1605

8 ....................................................... 95 152 .............. 1607

9 ....................................................... 95 152 .............. 1608

1982

Oct. 15 97–322 201 ................................................... 96 1588 ............ 446 nt 
H. R. 1442—232

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

204 ................................................... 96 1589 ............ 446

205 ................................................... 96 1589 ............ 446a 

206 ................................................... 96 1590 ............ 446b 

207 ................................................... 96 1590 ............ 446c

1984

Mar. 20 98–237 1 ....................................................... 98 67 ................ 1701 nt 

2 ....................................................... 98 67 ................ 1701

3 ....................................................... 98 67 ................ 1702

4 ....................................................... 98 70 ................ 1703

5 ....................................................... 98 70 ................ 1704

6 ....................................................... 98 72 ................ 1705

7 ....................................................... 98 73 ................ 1706

8 ....................................................... 98 74 ................ 1707

9 ....................................................... 98 76 ................ 1708

10 ..................................................... 98 77 ................ 1709

11 ..................................................... 98 80 ................ 1710

12 ..................................................... 98 81 ................ 1711

13 ..................................................... 98 82 ................ 1712

14 ..................................................... 98 83 ................ 1713

15 ..................................................... 98 84 ................ 1714

16 ..................................................... 98 84 ................ 1715

17 ..................................................... 98 84 ................ 1716

19 ..................................................... 98 87 ................ 1718

20(e) ................................................. 98 90 ................ 1719

Oct. 5 98–454 302 ................................................... 98 1734 ............ 808a

Oct. 30 98–563 .......................................................... 98 2916 ............ 289c

1985

Dec. 23 99–198 1141 ................................................. 99 1490 ............ 1241d 

1143 ................................................. 99 1496 ............ 1241p

1986

Aug. 27 99–399 902 ................................................... 100 889 .............. 1801

905 ................................................... 100 890 .............. 1802

907 ................................................... 100 891 .............. 1803

908 ................................................... 100 891 .............. 1804

909 ................................................... 100 892 .............. 1805

910 ................................................... 100 892 .............. 1806

911 ................................................... 100 892 .............. 1807

912 ................................................... 100 892 .............. 1808

913 ................................................... 100 892 .............. 1809

1987

Dec. 22 100–202 101(a) [title V (par. under heading 

‘‘Ocean Freight Differential’’)].

101 1329, ...........

1329–27 ......

1241h nt 

101(a) [title V (4th proviso on p. 

1329-28)].

101 1329, ...........

1329–28 ......

1295c–1

1988

May 30 100–324 1 ....................................................... 102 576 .............. 2001 nt 

2 ....................................................... 102 576 .............. 2001

3 ....................................................... 102 576 .............. 2002

4 ....................................................... 102 576 .............. 2003

5 ....................................................... 102 576 .............. 2004

6 ....................................................... 102 577 .............. 2005

7 ....................................................... 102 577 .............. 2006

8 ....................................................... 102 577 .............. 2007

Aug. 23 100–418 10002 ............................................... 102 1570 ............ 1710a

1989

Oct. 13 101–115 4 ....................................................... 103 692 .............. 1295c nt 

8 ....................................................... 103 694 .............. 1121–2

1990

Nov. 28 101–624 1521 ................................................. 104 3665 ............ 1241q 

1522 ................................................. 104 3665 ............ 1241r 

1523 ................................................. 104 3666 ............ 1241s 

1524 ................................................. 104 3667 ............ 1241t 

1526 ................................................. 104 3668 ............ 1241u 
H. R. 1442—233

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise specified) 

Volume Page 

1527 ................................................. 104 3668 ............ 1241v

1993

Nov. 30 103–160 1358 ................................................. 107 1816 ............ 1280a

1996

Oct. 19 104–324 1117 ................................................. 110 3973 ............ 46 U.S.C. 

12101 nt 

1120(f) .............................................. 110 3978 ............ 883 nt

1998

Oct. 14 105–258 401 ................................................... 112 1916 ............ 1273a

Oct. 21 105–277 203(b)–(e) ......................................... 112 2681–619 .... 46 U.S.C. 

12102 nt

Nov. 13 105–383 502–504 ........................................... 112 3445 ............ 46 U.S.C. 

12106 nt

2000

Oct. 30 106–398 1 [§ 3506] ......................................... 114 1654, ...........

1654A–494

1118 nt

2002

Nov. 25 107–295 403 ................................................... 116 2114 ............ 46 U.S.C. 

12119 nt 

404 ................................................... 116 2114 ............ 316a

2003

Nov. 24 108–136 3527 ................................................. 117 1802 ............ 1280b 
H. R. 1442—234

Reorganization Plans 

Year Plan No. Section 

Statutes at Large 

Volume Page 

1949 6 .............. ....................................................................... 63 1069

1950 21 ............ 201, 203, 204 ............................................... 64 1276

1961 7 .............. 101–105, 201, 301, 302 ............................... 75 840, 842

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.