I 

109TH CONGRESS 

1ST SESSION H. R. 1442 

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

as positive law. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2005 

Mr. SENSENBRENNER (for himself and Mr. CONYERS) introduced the 

following bill; which was referred to the Committee on the Judiciary 

A BILL 

To complete the codification of title 46, United States Code, 

‘‘Shipping’’, as positive law. 

1 Be it enacted by the Senate and House of Representatives of the United 

2 States of America in Congress assembled, 

3 SECTION 1. TABLE OF CONTENTS. 

4 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. Conforming amendments to other laws. 

Sec. 17. Transitional and savings provisions. 

Sec. 18. Repeals. 
2 

•HR 1442 IH 

1 SEC. 2. PURPOSE; CONFORMITY WITH ORIGINAL INTENT. 

2 (a) PURPOSE.—The purpose of this Act is to complete the codification 

3 of title 46, United States Code, ‘‘Shipping’’, as positive law, by reorganizing 

4 and restating the laws currently in the appendix to title 46. 

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

6 by this Act, the intent is to conform to the understood policy, intent, and 

7 purpose of the Congress in the original enactments, with such amendments 

8 and corrections as will remove ambiguities, contradictions, and other imper9 fections, in accordance with section 205(c)(1) of House Resolution No. 988, 

10 93d Congress, as enacted into law by Public Law 93–554 (2 U.S.C. 

11 285b(1)). 

12 SEC. 3. TITLE ANALYSIS. 

13 The title analysis of title 46, United States Code, is amended to read as 

14 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

‘‘VI. CLEARANCE, TONNAGE TAXES, AND DUTIES .......................... 60101

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

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

15 SEC. 4. SUBTITLE I OF TITLE 46. 

16 Title 46, United States Code, is amended by inserting after the title anal17 ysis the following: 

18 ‘‘Subtitle I—General 

‘‘Chapter Sec. 

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

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

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

19 ‘‘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. 

20 ‘‘§ 101. Agency 

21 ‘‘In this title, the term ‘agency’ means a department, agency, or instru22 mentality of the United States Government. 
3 

•HR 1442 IH 

1 ‘‘§ 102. Barge 

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

3 ‘‘§ 103. Boundary Line 

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

5 section 2(b) of the Act of February 19, 1895 (33 U.S.C. 151). 

6 ‘‘§ 104. Citizen of the United States 

7 ‘‘In this title, the term ‘citizen of the United States’, when used in ref8 erence to a natural person, means an individual who is a national of the 

9 United States as defined in section 101(a)(22) of the Immigration and Na10 tionality Act (8 U.S.C. 1101(a)(22)). 

11 ‘‘§ 105. Consular officer 

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

13 the United States Government designated under regulations to issue visas. 

14 ‘‘§ 106. Documented vessel 

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

16 certificate of documentation has been issued under chapter 121 of this title. 

17 ‘‘§ 107. Exclusive economic zone 

18 ‘‘In this title, the term ‘exclusive economic zone’ means the zone estab19 lished by Presidential Proclamation 5030 of March 10, 1983 (16 U.S.C. 

20 1453 note). 

21 ‘‘§ 108. Fisheries 

22 ‘‘In this title, the term ‘fisheries’ includes processing, storing, trans23 porting (except in foreign commerce), planting, cultivating, catching, taking, 

24 or harvesting fish, shellfish, marine animals, pearls, shells, or marine vege25 tation in the navigable waters of the United States or in the exclusive eco26 nomic zone. 

27 ‘‘§ 109. Foreign commerce or trade 

28 ‘‘(a) IN GENERAL.—In this title, the terms ‘foreign commerce’ and ‘for29 eign trade’ mean commerce or trade between a place in the United States 

30 and a place in a foreign country. 

31 ‘‘(b) CAPITAL CONSTRUCTION FUNDS AND CONSTRUCTION-DIFFEREN32 TIAL SUBSIDIES.—In the context of capital construction funds under chap33 ter 535 of this title, and in the context of construction-differential subsidies 

34 under title V of the Merchant Marine Act, 1936, the terms ‘foreign com35 merce’ and ‘foreign trade’ also include, in the case of liquid and dry bulk 

36 cargo carrying services, trading between foreign ports in accordance with 

37 normal commercial bulk shipping practices in a manner that will permit 

38 United States documented bulk vessels to compete freely with foreign bulk 

39 vessels in their operation or competition for charters, subject to regulations 

40 prescribed by the Secretary of Transportation. 
4 

•HR 1442 IH 

1 ‘‘§ 110. Foreign vessel 

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

3 or operated under the authority of a foreign country. 

4 ‘‘§ 111. Numbered vessel 

5 ‘‘In this title, the term ‘numbered vessel’ means a vessel for which a num6 ber has been issued under chapter 123 of this title. 

7 ‘‘§ 112. State 

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

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

10 Samoa, the Northern Mariana Islands, and any other territory or possession 

11 of the United States. 

12 ‘‘§ 113. Undocumented 

13 ‘‘In this title, the term ‘undocumented’ means not having and not re14 quired to have a certificate of documentation issued under chapter 121 of 

15 this title. 

16 ‘‘§ 114. United States 

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

18 means the States of the United States, the District of Columbia, Guam, 

19 Puerto Rico, the Virgin Islands, American Samoa, the Northern Mariana 

20 Islands, and any other territory or possession of the United States. 

21 ‘‘§ 115. Vessel 

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

23 3 of title 1. 

24 ‘‘§ 116. Vessel of the United States 

25 ‘‘In this title, the term ‘vessel of the United States’ means a vessel docu26 mented under chapter 121 of this title, numbered under chapter 123 of this 

27 title, or titled under the law of a State. 

28 ‘‘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. 

29 ‘‘§ 301. General organization 

30 ‘‘(a) ORGANIZATION.—The Federal Maritime Commission is an inde31 pendent establishment of the United States Government. 

32 ‘‘(b) COMMISSIONERS.— 

33 ‘‘(1) COMPOSITION.—The Commission is composed of 5 Commis34 sioners, appointed by the President by and with the advice and consent 

35 of the Senate. Not more than 3 Commissioners may be appointed from 

36 the same political party. 
5 

•HR 1442 IH 

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

2 term beginning one year apart. An individual appointed to fill a va3 cancy is appointed only for the unexpired term of the individual being 

4 succeeded. A vacancy shall be filled in the same manner as the original 

5 appointment. When the term of a Commissioner ends, the Commis6 sioner may continue to serve until a successor is appointed and quali7 fied. 

8 ‘‘(3) REMOVAL.—The President may remove a Commissioner for in9 efficiency, neglect of duty, or malfeasance in office. 

10 ‘‘(c) CHAIRMAN.— 

11 ‘‘(1) DESIGNATION.—The President shall designate one of the Com12 missioners as Chairman. 

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

14 and administrative officer of the Commission. In carrying out the du15 ties and powers of the Commission (other than under paragraph (3)), 

16 the Chairman is subject to the policies, regulatory decisions, findings, 

17 and determinations of the Commission. 

18 ‘‘(3) PARTICULAR DUTIES.— 

19 ‘‘(A) IN GENERAL.—The Chairman shall— 

20 ‘‘(i) appoint and supervise officers and employees of the 

21 Commission; 

22 ‘‘(ii) appoint the heads of major organizational units, but 

23 only after consultation with the other Commissioners; 

24 ‘‘(iii) distribute the business of the Commission among per25 sonnel and organizational units; 

26 ‘‘(iv) supervise the expenditure of money for administrative 

27 purposes; and 

28 ‘‘(v) assign Commission personnel, including Commis29 sioners, to perform duties and powers delegated by the Com30 mission under section 304 of this title. 

31 ‘‘(B) NONAPPLICATION.—Subparagraph (A) (other than clause 

32 (v)) does not apply to personnel employed regularly and full-time 

33 in the offices of Commissioners other than the Chairman. 

34 ‘‘(4) DELEGATION.—The Chairman may designate officers and em35 ployees under the Chairman’s jurisdiction to perform duties and powers 

36 of the Chairman, subject to the Chairman’s supervision and direction. 

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

38 recognized. 

39 ‘‘§ 302. Quorum 

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

41 Commission do not impair the power of the Commission to execute its func-
6 

•HR 1442 IH 

1 tions. The affirmative vote of a majority of the Commissioners serving on 

2 the Commission is required to dispose of any matter before the Commission. 

3 ‘‘§ 303. Record of meetings and votes 

4 ‘‘The Federal Maritime Commission, through its secretary, shall keep a 

5 record of its meetings and the votes taken on any action, order, contract, 

6 or financial transaction of the Commission. 

7 ‘‘§ 304. Delegation of authority 

8 ‘‘(a) DELEGATION.—The Federal Maritime Commission, by published 

9 order or regulation, may delegate to a division of the Commission, an indi10 vidual Commissioner, an employee board, or an officer or employee of the 

11 Commission, any of its duties or powers, including those relating to hearing, 

12 determining, ordering, certifying, reporting, or otherwise acting on any mat13 ter. This subsection does not affect section 556(b) of title 5. 

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

15 delegation of authority under subsection (a). The review may be taken on 

16 the Commission’s own initiative or on the petition of a party to or an inter17 venor in the action, within the time and in the manner prescribed by the 

18 Commission. The vote of a majority of the Commission, less one member, 

19 is sufficient to bring an action before the Commission for review. 

20 ‘‘(c) DEEMED ACTION OF COMMISSION.—If the Commission declines re21 view, or if review is not sought, within the time prescribed under subsection 

22 (b), the action taken under the delegation of authority is deemed to be the 

23 action of the Commission. 

24 ‘‘§ 305. Regulations 

25 ‘‘The Federal Maritime Commission may prescribe regulations to carry 

26 out its duties and powers. 

27 ‘‘§ 306. Annual report 

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

29 Maritime Commission shall submit a report to Congress. The report shall 

30 include the results of its investigations, a summary of its transactions, the 

31 purposes for which all of its expenditures were made, and any recommenda32 tions for legislation. 

33 ‘‘(b) REPORT ON FOREIGN LAWS AND PRACTICES.—The Commission 

34 shall include in its annual report to Congress— 

35 ‘‘(1) a list of the 20 foreign countries that generated the largest vol36 ume of oceanborne liner cargo for the most recent calendar year in bi37 lateral trade with the United States; 

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

39 title being investigated or found to exist in foreign countries; 

40 ‘‘(3) any actions being taken by the Commission to offset those con41 ditions; 
7 

•HR 1442 IH 

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

2 conditions; and 

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

4 the Commission rejected and the reasons for each rejection. 

5 ‘‘§ 307. Expenditures 

6 ‘‘The Federal Maritime Commission may make such expenditures as are 

7 necessary in the performance of its functions from funds appropriated or 

8 otherwise made available to it, which appropriations are authorized. 

9 ‘‘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. 

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

11 ‘‘(a) ON REQUEST OF SECRETARY OF DEFENSE.—On request of the Sec12 retary of Defense, the head of an agency responsible for the administration 

13 of the navigation or vessel-inspection laws shall waive compliance with those 

14 laws to the extent the Secretary considers necessary in the interest of na15 tional defense. 

16 ‘‘(b) BY HEAD OF AGENCY.—When the head of an agency responsible for 

17 the administration of the navigation or vessel-inspection laws considers it 

18 necessary in the interest of national defense, the individual may waive com19 pliance with those laws to the extent, in the manner, and on the terms the 

20 individual prescribes. 

21 ‘‘(c) TERMINATION OF AUTHORITY.—The authority granted by this sec22 tion shall terminate at such time as the Congress by concurrent resolution 

23 or the President may designate. 

24 ‘‘§ 502. Cargo exempt from forfeiture 

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

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

27 master, or crewmember of the vessel; and 

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

29 payment as provided by law. 

30 ‘‘§ 503. Notice of seizure 

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

32 States Government required to give notice of the seizure of the vessel or 

33 cargo shall include in the notice, if they are known to that official, the name 

34 and the place of residence of the owner or consignee at the time of the sei35 zure. 
8 

•HR 1442 IH 

1 ‘‘§ 504. Remission of fees and penalties 

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

3 a law or regulation relating to vessels or seamen may be remitted if— 

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

5 date of the payment or forfeiture; and 

6 ‘‘(2) it is found that the fee, tax, penalty, or forfeiture was improp7 erly or excessively imposed. 

8 ‘‘§ 505. Penalty for violating regulation or order 

9 ‘‘A person convicted of knowingly and willfully violating a regulation or 

10 order of the Federal Maritime Commission or the Secretary of Transpor11 tation under subtitle IV or V of this title, for which no penalty is expressly 

12 provided, shall be fined not more than $500. Each day of a continuing viola13 tion is a separate offense.’’. 

14 SEC. 5. SUBTITLE II OF TITLE 46. 

15 Chapter 121 of title 46, United States Code, is amended to read as fol16 lows: 

17 ‘‘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. 
9 

•HR 1442 IH 

1 ‘‘SUBCHAPTER I—GENERAL 

2 ‘‘§ 12101. Definitions 

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

4 deemed to have been rebuilt in the United States only if the entire rebuild5 ing, including the construction of any major component of the hull or super6 structure, was done in the United States. 

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

8 used in a law, regulation, document, ruling, or other official act referring 

9 to the documentation of a vessel, the following definitions apply: 

10 ‘‘(1) REGISTRY ENDORSEMENT.—The terms ‘certificate of registry’, 

11 ‘register’, and ‘registry’ mean a certificate of documentation with a reg12 istry endorsement issued under this chapter. 

13 ‘‘(2) COASTWISE ENDORSEMENT.—The terms ‘license’, ‘enrollment 

14 and license’, ‘license for the coastwise (or coasting) trade’, and ‘enroll15 ment and license for the coastwise (or coasting) trade’ mean a certifi16 cate of documentation with a coastwise endorsement issued under this 

17 chapter. 

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

19 not documented. 

20 ‘‘§ 12102. Vessels requiring documentation 

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

22 in a trade only if the vessel has been issued a certificate of documentation 

23 with an endorsement for that trade under this chapter. 

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

25 may engage in a trade without being documented if the vessel otherwise sat26 isfies the requirements to engage in the particular trade. 

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

28 engage in the coastwise trade, without being documented, on rivers, harbors, 

29 lakes (except the Great Lakes), canals, and inland waters. 

30 ‘‘§ 12103. General eligibility requirements 

31 ‘‘(a) IN GENERAL.—Except as otherwise provided, a certificate of docu32 mentation for a vessel may be issued under this chapter only if the vessel 

33 is— 

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

35 in subsection (b); 

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

37 and 

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

39 ‘‘(b) ELIGIBLE OWNERS.—For purposes of subsection (a)(1), the fol40 lowing are eligible owners: 

41 ‘‘(1) An individual who is a citizen of the United States. 
10 

•HR 1442 IH 

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

2 ‘‘(A) each of its members is a citizen of the United States; and 

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

4 the United States or a State. 

5 ‘‘(3) A partnership if— 

6 ‘‘(A) each general partner is a citizen of the United States; and 

7 ‘‘(B) the controlling interest in the partnership is owned by citi8 zens of the United States. 

9 ‘‘(4) A corporation if— 

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

11 a State; 

12 ‘‘(B) its chief executive officer, by whatever title, and the chair13 man of its board of directors are citizens of the United States; and 

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

15 of the number necessary to constitute a quorum. 

16 ‘‘(5) The United States Government. 

17 ‘‘(6) The government of a State. 

18 ‘‘(c) TEMPORARY CERTIFICATES PRIOR TO MEASUREMENT.—Notwith19 standing subsection (a)(2), the Secretary may issue a temporary certificate 

20 of documentation for a vessel before it is measured. 

21 ‘‘§ 12104. Applications for documentation 

22 ‘‘(a) IN GENERAL.—An application for a certificate of documentation or 

23 endorsement under this chapter must be filed by the owner of the vessel. 

24 The application must be filed in the manner, be in the form, and contain 

25 the information prescribed by the Secretary. 

26 ‘‘(b) APPLICANT’S IDENTIFYING INFORMATION.—The Secretary shall re27 quire the applicant to provide— 

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

29 number; or 

30 ‘‘(2) if the applicant is an entity— 

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

32 ‘‘(B) if the entity does not have a taxpayer identification num33 ber, the social security number of an individual who is a corporate 

34 officer, general partner, or individual trustee of the entity and who 

35 signs the application. 

36 ‘‘§ 12105. Issuance of documentation 

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

38 Secretary, on receipt of a proper application, shall issue a certificate of doc39 umentation or a temporary certificate of documentation for a vessel satis40 fying the requirements of section 12103 of this title. The certificate shall 
11 

•HR 1442 IH 

1 contain each endorsement under subchapter II of this chapter for which the 

2 owner applies and the vessel is eligible. 

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

4 Secretary may delegate, subject to the supervision and control of the Sec5 retary and under terms prescribed by regulation, to private entities deter6 mined and certified by the Secretary to be qualified, the authority to issue 

7 a temporary certificate of documentation for a recreational vessel eligible 

8 under section 12103 of this title. A temporary certificate issued under this 

9 subsection is valid for not more than 30 days. 

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

11 documentation shall— 

12 ‘‘(1) identify and describe the vessel; 

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

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

15 ‘‘(d) PROCEDURES TO ENSURE INTEGRITY AND ACCURACY.—The Sec16 retary shall prescribe procedures to ensure the integrity of, and the accuracy 

17 of information contained in, certificates of documentation. 

18 ‘‘§ 12106. Surrender of title and number 

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

20 or required to display numbers under chapter 123 of this title, and any cer21 tificate of title issued by a State for a documented vessel shall be surren22 dered as provided by regulations prescribed by the Secretary. 

23 ‘‘(b) VESSELS COVERED BY PREFERRED MORTGAGE.—The Secretary 

24 may approve the surrender under subsection (a) of a certificate of title for 

25 a vessel covered by a preferred mortgage under section 31322(d) of this title 

26 only if the mortgagee consents. 

27 ‘‘§ 12107. Wrecked vessels 

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

29 it— 

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

31 and 

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

33 to at least 3 times the appraised salvage value of the vessel. 

34 ‘‘(b) APPRAISALS.—The Secretary may appoint a board of three apprais35 ers to determine whether a vessel satisfies subsection (a)(2). The costs of 

36 the appraisal shall be paid by the owner of the vessel. 

37 ‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL 

38 DOCUMENTATION 

39 ‘‘§ 12111. Registry endorsement 

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

41 that satisfies the requirements of section 12103 of this title. 
12 

•HR 1442 IH 

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

2 is issued may engage in foreign trade or trade with Guam, American 

3 Samoa, Wake, Midway, or Kingman Reef. 

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

5 ‘‘(1) NONAPPLICATION OF BENEFICIARY CITIZENSHIP REQUIRE6 MENT.—For the issuance of a certificate of documentation with only 

7 a registry endorsement, the beneficiaries of a trust are not required to 

8 be citizens of the United States if the trust qualifies under paragraph 

9 (2) and the vessel is subject to a charter to a citizen of the United 

10 States. 

11 ‘‘(2) REQUIREMENTS FOR TRUST TO QUALIFY.— 

12 ‘‘(A) IN GENERAL.—Subject to subparagraph (B), a trust quali13 fies under this paragraph with respect to a vessel only if— 

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

15 ‘‘(ii) the application for documentation of the vessel in16 cludes the affidavit of each trustee stating that the trustee is 

17 not aware of any reason involving a beneficiary of the trust 

18 that is not a citizen of the United States, or involving any 

19 other person that is not a citizen of the United States, as a 

20 result of which the beneficiary or other person would hold 

21 more than 25 percent of the aggregate power to influence or 

22 limit the exercise of the authority of the trustee with respect 

23 to matters involving any ownership or operation of the vessel 

24 that may adversely affect the interests of the United States. 

25 ‘‘(B) AUTHORITY OF NON-CITIZENS.—If any person that is not 

26 a citizen of the United States has authority to direct or participate 

27 in directing a trustee for a trust in matters involving any owner28 ship or operation of the vessel that may adversely affect the inter29 ests of the United States or in removing a trustee for a trust with30 out cause, either directly or indirectly through the control of an31 other person, the trust is not qualified under this paragraph un32 less the trust instrument provides that persons who are not citi33 zens of the United States may not hold more than 25 percent of 

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

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

36 (B) do not prohibit a person that is not a citizen of the United 

37 States from holding more than 25 percent of the beneficial interest 

38 in a trust. 

39 ‘‘(3) CITIZENSHIP OF PERSON CHARTERING VESSEL.—If a person 

40 chartering a vessel from a trust that qualifies under paragraph (2) is 

41 a citizen of the United States under section 50501 of this title, the ves-
13 

•HR 1442 IH 

1 sel is deemed to be owned by a citizen of the United States for pur2 poses of that section and related laws, except chapter 531 of this title. 

3 ‘‘§ 12112. Coastwise endorsement 

4 ‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued for a ves5 sel that— 

6 ‘‘(1) satisfies the requirements of section 12103 of this title; 

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

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

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

10 lawfully condemned as prize; 

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

12 the United States; or 

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

14 title; and 

15 ‘‘(3) otherwise qualifies under the laws of the United States to en16 gage in the coastwise trade. 

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

18 regulating the coastwise trade, a vessel for which a coastwise endorsement 

19 is issued may engage in the coastwise trade. 

20 ‘‘§ 12113. Fishery endorsement 

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

22 that— 

23 ‘‘(1) satisfies the requirements of section 12103 of this title and, if 

24 owned by an entity, the entity satisfies the ownership requirements in 

25 subsection (c); 

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

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

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

29 1, 2001, for a breach of the laws of the United States; and 

30 ‘‘(5) otherwise qualifies under the laws of the United States to en31 gage in the fisheries. 

32 ‘‘(b) AUTHORIZED ACTIVITY.— 

33 ‘‘(1) IN GENERAL.—Subject to the laws of the United States regu34 lating the fisheries, a vessel for which a fishery endorsement is issued 

35 may engage in the fisheries. 

36 ‘‘(2) USE BY PROHIBITED PERSONS.—A fishery endorsement is in37 valid immediately if the vessel for which it is issued is used as a fishing 

38 vessel while it is chartered or leased to an individual who is not a cit39 izen of the United States or to an entity that is not eligible to own 

40 a vessel with a fishery endorsement. 

41 ‘‘(c) OWNERSHIP REQUIREMENTS FOR ENTITIES.— 
14 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—A vessel owned by an entity is eligible for a fish2 ery endorsement only if at least 75 percent of the interest in the entity, 

3 at each tier of ownership and in the aggregate, is owned and controlled 

4 by citizens of the United States. 

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

6 at least 75 percent of the interest in the entity is owned and controlled 

7 by citizens of the United States under paragraph (1), the Secretary 

8 shall apply section 50501(d) of this title, except that for this purpose 

9 the terms ‘control’ or ‘controlled’— 

10 ‘‘(A) include the right to— 

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

12 ‘‘(ii) limit the actions of or replace the chief executive offi13 cer, a majority of the board of directors, any general partner, 

14 or any person serving in a management capacity of the entity; 

15 or 

16 ‘‘(iii) direct the transfer, operation, or manning of a vessel 

17 with a fishery endorsement; but 

18 ‘‘(B) do not include the right to simply participate in the activi19 ties under subparagraph (A), or the exercise of rights under loan 

20 or mortgage covenants by a mortgagee eligible to be a preferred 

21 mortgagee under section 31322(a) of this title, except that a mort22 gagee not eligible to own a vessel with a fishery endorsement may 

23 only operate such a vessel to the extent necessary for the imme24 diate safety of the vessel or for repairs, drydocking, or berthing 

25 changes. 

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

27 it is engaged in the fisheries in the exclusive economic zone under the 

28 authority of the Western Pacific Fishery Management Council estab29 lished under section 302(a)(1)(H) of the Magnuson-Stevens Fishery 

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

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

32 Ocean outside the exclusive economic zone or pursuant to the South 

33 Pacific Regional Fisheries Treaty, provided that the owner of the vessel 

34 continues to comply with the eligibility requirements for a fishery en35 dorsement under the Federal law that was in effect on October 1, 

36 1998. A fishery endorsement issued pursuant to this paragraph is valid 

37 for engaging only in the activities described in this paragraph. 

38 ‘‘(d) REQUIREMENTS BASED ON LENGTH, TONNAGE, OR HORSE39 POWER.— 

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

41 ‘‘(A) is greater than 165 feet in registered length; 
15 

•HR 1442 IH 

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

2 chapter 145 of this title or 1,900 gross registered tons as meas3 ured under chapter 143 of this title; or 

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

5 more than 3,000 shaft horsepower. 

6 ‘‘(2) REQUIREMENTS.—A vessel subject to this subsection is not eli7 gible for a fishery endorsement unless— 

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

9 and endorsed with a fishery endorsement that was effective on 

10 September 25, 1997; 

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

12 21, 1998; and 

13 ‘‘(iii) if the fishery endorsement is invalidated after October 21, 

14 1998, application is made for a new fishery endorsement within 

15 15 business days of the invalidation; or 

16 ‘‘(B) the owner of the vessel demonstrates to the Secretary that 

17 the regional fishery management council of jurisdiction established 

18 under section 302(a)(1) of the Magnuson-Stevens Fishery Con19 servation and Management Act (16 U.S.C. 1852(a)(1)) has rec20 ommended after October 21, 1998, and the Secretary of Com21 merce has approved, conservation and management measures in 

22 accordance with the American Fisheries Act (Public Law 105– 

23 277, div. C, title II) (16 U.S.C. 1851 note) to allow the vessel to 

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

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

26 ‘‘(1) IN GENERAL.—The Administrator of the Maritime Administra27 tion shall administer subsections (c) and (d) with respect to vessels 100 

28 feet or greater in registered length. The owner of each such vessel shall 

29 file a statement of citizenship setting forth all relevant facts regarding 

30 vessel ownership and control with the Administrator on an annual basis 

31 to demonstrate compliance with those provisions. 

32 ‘‘(2) REGULATIONS.—Regulations to implement this subsection shall 

33 conform to the extent practicable with the regulations establishing the 

34 form of citizenship affidavit set forth in part 355 of title 46, Code of 

35 Federal Regulations, as in effect on September 25, 1997, except that 

36 the form of the statement shall be written in a manner to allow the 

37 owner of the vessel to satisfy any annual renewal requirements for a 

38 certificate of documentation for the vessel and to comply with this sub39 section and subsections (c) and (d), and shall not be required to be no40 tarized. 
16 

•HR 1442 IH 

1 ‘‘(3) TRANSFER OF OWNERSHIP.—Transfers of ownership and con2 trol of vessels subject to subsection (c) or (d), which are 100 feet or 

3 greater in registered length, shall be rigorously scrutinized for viola4 tions of those provisions, with particular attention given to— 

5 ‘‘(A) leases, charters, mortgages, financing, and similar ar6 rangements; 

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

8 fishery endorsement under subsection (c) or (d), over the manage9 ment, sales, financing, or other operations of an entity; and 

10 ‘‘(C) contracts involving the purchase over extended periods of 

11 time of all, or substantially all, of the living marine resources har12 vested by a fishing vessel. 

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

14 establish reasonable and necessary requirements to demonstrate compliance 

15 with subsections (c) and (d), with respect to vessels measuring less than 100 

16 feet in registered length, and shall seek to minimize the administrative bur17 den on individuals who own and operate those vessels. 

18 ‘‘(g) VESSELS PURCHASED THROUGH FISHING CAPACITY REDUCTION

19 PROGRAM.—A vessel purchased by the Secretary of Commerce through a 

20 fishing capacity reduction program under the Magnuson-Stevens Fishery 

21 Conservation Management Act (16 U.S.C. 1801 et seq.) or section 308 of 

22 the Interjurisdictional Fisheries Act of 1986 (16 U.S.C. 4107) is not eligible 

23 for a fishery endorsement, and any fishery endorsement issued for that ves24 sel is invalid. 

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

26 fishery endorsement of any vessel subject to subsection (c) or (d) whose 

27 owner does not comply with those provisions. 

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

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

30 transfers of ownership or control, specify any transactions that require prior 

31 approval of an implementing agency, identify transactions that do not re32 quire prior agency approval, and to the extent practicable, minimize disrup33 tions to the commercial fishing industry, to the traditional financing ar34 rangements of that industry, and to the opportunity to form fishery co35 operatives. 

36 ‘‘§ 12114. Recreational endorsement 

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

38 vessel that satisfies the requirements of section 12103 of this title. 

39 ‘‘(b) AUTHORIZED ACTIVITY.—A vessel operating under a recreational en40 dorsement may be operated only for pleasure. 
17 

•HR 1442 IH 

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

2 endorsement is issued may proceed between a port of the United States and 

3 a port of a foreign country without entering or clearing with the Secretary 

4 of Homeland Security. However, a recreational vessel is subject to the re5 quirements for reporting arrivals under section 433 of the Tariff Act of 

6 1930 (19 U.S.C. 1433), and individuals on the vessel are subject to applica7 ble customs regulations. 

8 ‘‘§ 12115. Temporary endorsement for vessels procured out9 side the United States 

10 ‘‘(a) GENERAL AUTHORITY.—The Secretary and the Secretary of State, 

11 acting jointly, may provide for the issuance of a certificate of documentation 

12 with an appropriate endorsement for a vessel procured outside the United 

13 States and meeting the ownership requirements of section 12103 of this 

14 title. 

15 ‘‘(b) AUTHORIZED ACTIVITY.—Subject to limitations the Secretary may 

16 prescribe, a vessel documented under this section may proceed to the United 

17 States and engage en route in foreign trade or trade with Guam, American 

18 Samoa, Wake, Midway, or Kingman Reef. 

19 ‘‘(c) APPLICATION OF UNITED STATES JURISDICTION AND LAWS.—A 

20 vessel documented under this section is subject to the jurisdiction and laws 

21 of the United States. However, if the Secretary considers it to be in the 

22 public interest, the Secretary may suspend for a period of not more than 

23 6 months the application of a vessel inspection law carried out by the Sec24 retary or regulations prescribed under that law. 

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

26 States, the certificate of documentation shall be surrendered as provided by 

27 regulations prescribed by the Secretary. 

28 ‘‘§ 12116. Limited endorsements for Guam, American Samoa, 

29 and Northern Mariana Islands 

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

31 (b) may be issued— 

32 ‘‘(1) a coastwise endorsement to engage in the coastwise trade of 

33 fisheries products between places in Guam, American Samoa, and the 

34 Northern Mariana Islands; or 

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

36 and fishery conservation zone adjacent to Guam, American Samoa, and 

37 the Northern Mariana Islands. 

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

39 (a) for a vessel that— 

40 ‘‘(1) satisfies the requirements of section 12103 of this title; 
18 

•HR 1442 IH 

1 ‘‘(2) was not built in the United States, except that for an endorse2 ment under subsection (a)(2), the vessel must not have been built or 

3 rebuilt in the United States; 

4 ‘‘(3) is less than 200 gross tons as measured under section 14502 

5 of this title, or an alternate tonnage as measured under section 14302 

6 of this title as prescribed by the Secretary under section 14104 of this 

7 title; and 

8 ‘‘(4) otherwise qualifies under the laws of the United States to en9 gage in the coastwise trade or the fisheries, as the case may be. 

10 ‘‘§ 12117. Oil spill response vessels 

11 ‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued for a ves12 sel that— 

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

14 for the ownership requirement otherwise applicable without regard to 

15 this section; 

16 ‘‘(2) is owned by a not-for-profit oil spill response cooperative or by 

17 members of such a cooperative that dedicate the vessel to use by the 

18 cooperative; 

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

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

21 ‘‘(4) is to be used only for— 

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

23 contain, or transport oil discharged into the navigable waters of 

24 the United States or the exclusive economic zone; or 

25 ‘‘(ii) training exercises to prepare to respond to such a dis26 charge. 

27 ‘‘(b) DEEMED OWNED BY CITIZENS.—A vessel satisfying subsection (a) 

28 is deemed to be owned only by citizens of the United States under sections 

29 12103, 12132, and 50501 of this title. 

30 ‘‘§ 12118. Owners engaged primarily in manufacturing or 

31 mineral industry 

32 ‘‘(a) DEFINITIONS.—In this section: 

33 ‘‘(1) BOWATERS CORPORATION.—The term ‘Bowaters corporation’ 

34 means a corporation that has filed a certificate under oath with the 

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

36 establishing that— 

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

38 United States or a State; 

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

40 are individuals who are citizens of the United States; 
19 

•HR 1442 IH 

1 ‘‘(C) at least 90 percent of the employees of the corporation are 

2 residents of the United States; 

3 ‘‘(D) the corporation is engaged primarily in a manufacturing 

4 or mineral industry in the United States; 

5 ‘‘(E) the total book value of the vessels owned by the corpora6 tion is not more than 10 percent of the total book value of the 

7 assets of the corporation; and 

8 ‘‘(F) the corporation buys or produces in the United States at 

9 least 75 percent of the raw materials used or sold in its oper10 ations. 

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

12 a certificate under oath with the Secretary, in the form and at the 

13 times prescribed by the Secretary, establishing that the corporation— 

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

15 State; and 

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

17 voting stock of a Bowaters corporation. 

18 ‘‘(3) SUBSIDIARY.—The term ‘subsidiary’ means a corporation that 

19 has filed a certificate under oath with the Secretary, in the form and 

20 at the times prescribed by the Secretary, establishing that the corpora21 tion— 

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

23 State; and 

24 ‘‘(B) has at least 50 percent of its voting stock controlled, di25 rectly or indirectly, by a Bowaters corporation or its parent. 

26 ‘‘(b) DEEMED CITIZEN.—A Bowaters corporation is deemed to be a cit27 izen of the United States for purposes of chapters 121, 551, and 561 and 

28 section 80104 of this title. 

29 ‘‘(c) ISSUANCE OF DOCUMENTATION.—A certificate of documentation and 

30 appropriate endorsement may be issued for a vessel that— 

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

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

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

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

35 under section 14302 of this title as prescribed by the Secretary under 

36 section 14104 of this title; or 

37 ‘‘(B) is not self-propelled. 

38 ‘‘(d) EFFECTS OF DOCUMENTATION.— 

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

40 ‘‘(A) a vessel documented under this section may engage in the 

41 coastwise trade; and 
20 

•HR 1442 IH 

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

2 same benefits and are subject to the same requirements and pen3 alties as if the vessel were otherwise documented or exempt from 

4 documentation under this chapter. 

5 ‘‘(2) TRANSPORTATION OF PASSENGERS OR MERCHANDISE.—A ves6 sel documented under this section may transport passengers or mer7 chandise for hire in the coastwise trade only— 

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

9 owning the vessel; or 

10 ‘‘(B) when under a demise or bareboat charter, at prevailing 

11 rates for use not in the domestic noncontiguous trades, from the 

12 corporation owning the vessel to a carrier that— 

13 ‘‘(i) is subject to jurisdiction under subchapter II of chap14 ter 135 of title 49; 

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

16 under section 50501 of this title; and 

17 ‘‘(iii) is not owned or controlled, directly or indirectly, by 

18 the corporation owning the vessel. 

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

20 corporation under this section remains valid only as long as the corporation 

21 continues to satisfy the conditions required of the corporation by this sec22 tion. When a corporation no longer satisfies those conditions, the corpora23 tion loses its status under this section and immediately shall surrender to 

24 the Secretary any documents issued to it based on that status. 

25 ‘‘(f) PENALTIES.— 

26 ‘‘(1) FALSIFYING MATERIAL FACT.—If a corporation knowingly fal27 sifies a material fact in a certificate filed under subsection (a), the ves28 sel (or its value) documented or operated under this section shall be 

29 forfeited. 

30 ‘‘(2) TRANSPORTING MERCHANDISE.—If a vessel transports mer31 chandise for hire in violation of this section, the merchandise shall be 

32 forfeited to the United States Government. 

33 ‘‘(3) TRANSPORTING PASSENGERS.—If a vessel transports pas34 sengers for hire in violation of this section, the vessel is liable for a 

35 penalty of $200 for each passenger so transported. 

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

37 under this subsection may be remitted or mitigated under section 

38 2107(b) of this title. 

39 ‘‘§ 12119. Owners engaged primarily in leasing or financing 

40 transactions 

41 ‘‘(a) DEFINITIONS.—In this section: 
21 

•HR 1442 IH 

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

2 person, any other person that is— 

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

4 with, or controlling that person; or 

5 ‘‘(ii) named as being part of the same consolidated group in any 

6 report or other document submitted to the United States Securi7 ties and Exchange Commission or the Internal Revenue Service. 

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

9 is held for non-commercial reasons and primarily for the purpose of 

10 evading the requirements of subsection (c)(3). 

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

12 2101(20) of this title. 

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

14 an investment in which neither the investor nor any affiliate of the in15 vestor is involved in, or has the power to be involved in, the formula16 tion, determination, or direction of any activity or function concerning 

17 the management, use, or operation of the asset that is the subject of 

18 the investment. 

19 ‘‘(5) QUALIFIED PROPRIETARY CARGO.—The term ‘qualified propri20 etary cargo’ means— 

21 ‘‘(A) oil, petroleum products, petrochemicals, or liquefied nat22 ural gas cargo that is beneficially owned by the person that sub23 mits to the Secretary an application or annual certification under 

24 subsection (c)(3), or by an affiliate of that person, immediately be25 fore, during, or immediately after the cargo is carried in coastwise 

26 trade on a vessel owned by that person; 

27 ‘‘(B) oil, petroleum products, petrochemicals, or liquefied nat28 ural gas cargo not beneficially owned by the person that submits 

29 to the Secretary an application or an annual certification under 

30 subsection (c)(3), or by an affiliate of that person, but which is 

31 carried in coastwise trade by a vessel owned by that person and 

32 which is part of an arrangement in which vessels owned by that 

33 person and at least one other person are operated collectively as 

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

35 products, petrochemicals, or liquefied natural gas cargo bene36 ficially owned by that person, or by an affiliate of that person, is 

37 carried in coastwise trade on one or more other vessels, not owned 

38 by that person, or by an affiliate of that person, if the other vessel 

39 or vessels are also part of the same arrangement; 

40 ‘‘(C) in the case of a towing vessel associated with a non-self41 propelled tank vessel where both vessels function as a single self- 
22 

•HR 1442 IH 

1 propelled vessel, oil, petroleum products, petrochemicals, or lique2 fied natural gas cargo that is beneficially owned by the person that 

3 owns both the towing vessel and the non-self-propelled tank vessel, 

4 or any United States affiliate of that person, immediately before, 

5 during, or immediately after the cargo is carried in coastwise trade 

6 on either of those vessels; or 

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

8 natural gas cargo carried on any vessel that is either a self-pro9 pelled tank vessel having a length of at least 210 meters or a tank 

10 vessel that is a liquefied natural gas carrier that— 

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

12 of the vessel after December 31, 1999; and 

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

14 the reasonable expectation, of transporting on the vessel liq15 uefied natural gas or unrefined petroleum beneficially owned 

16 by the owner of the vessel, or an affiliate of the owner, from 

17 Alaska to the continental United States. 

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

19 means, with respect to any person, an affiliate the principal place of 

20 business of which is located in the United States. 

21 ‘‘(b) REQUIREMENTS.—A coastwise endorsement may be issued for a ves22 sel if— 

23 ‘‘(1) the vessel satisfies the requirements for a coastwise endorse24 ment, except for the ownership requirement otherwise applicable with25 out regard to this section; 

26 ‘‘(2) the person that owns the vessel (or, if the vessel is owned by 

27 a trust or similar arrangement, the beneficiary of the trust or similar 

28 arrangement) meets the requirements of subsection (c); 

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

30 to the Secretary that the person is a citizen of the United States under 

31 section 50501 of this title for engaging in the coastwise trade; and 

32 ‘‘(4) the demise charter is for a period of at least 3 years or a short33 er period as may be prescribed by the Secretary. 

34 ‘‘(c) OWNERSHIP CERTIFICATION.— 

35 ‘‘(1) IN GENERAL.—A person meets the requirements of this sub36 section if the person transmits to the Secretary each year the certifi37 cation required by paragraph (2) or (3) with respect to a vessel. 

38 ‘‘(2) INVESTMENT CERTIFICATION.—To meet the certification re39 quirement of this paragraph, a person shall certify that it— 

40 ‘‘(A) is a leasing company, bank, or financial institution; 
23 

•HR 1442 IH 

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

2 as a passive investment; 

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

4 of any person that operates any vessel for hire; and 

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

6 of the vessel or any other person that has the right, directly or 

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

8 ‘‘(3) CERTAIN TANK VESSELS.— 

9 ‘‘(A) IN GENERAL.—To meet the certification requirement of 

10 this paragraph, a person shall certify that— 

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

12 person and United States affiliates of the person does not ex13 ceed 10 percent of the aggregate book value of all assets 

14 owned by the person and its United States affiliates; 

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

16 of the person and its United States affiliates is derived from 

17 the ownership, operation, or management of vessels; 

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

19 cargo carried by all vessels owned by the person and its 

20 United States affiliates and documented with a coastwise en21 dorsement is qualified proprietary cargo; 

22 ‘‘(iv) any cargo other than qualified proprietary cargo car23 ried by all vessels owned by the person and its United States 

24 affiliates and documented with a coastwise endorsement con25 sists of oil, petroleum products, petrochemicals, or liquified 

26 natural gas; 

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

28 States affiliates and documented with a coastwise endorse29 ment carries molten sulphur; and 

30 ‘‘(vi) the person owned one or more vessels documented 

31 under this section as of August 9, 2004. 

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

33 make a certification under this paragraph only with respect to— 

34 ‘‘(i) a tank vessel having a tonnage of at least 6,000 gross 

35 tons, as measured under section 14502 of this title (or an al36 ternative tonnage measured under section 14302 of this title 

37 as prescribed by the Secretary under section 14104 of this 

38 title); or 

39 ‘‘(ii) a towing vessel associated with a non-self-propelled 

40 tank vessel that meets the requirements of clause (i), where 

41 both vessels function as a single self-propelled vessel. 
24 

•HR 1442 IH 

1 ‘‘(d) FILING OF DEMISE CHARTER.—The demise charter and any amend2 ments to the charter shall be filed with the certification required by sub3 section (b)(3) or within 10 days after filing an amendment to the charter. 

4 The charter and amendments shall be made available to the public. 

5 ‘‘(e) CONTINUATION OF ENDORSEMENT AFTER TERMINATION OF CHAR6 TER.—When a charter required by subsection (b)(3) is terminated for de7 fault by the charterer, the Secretary may continue the coastwise endorse8 ment for not more than 6 months on terms and conditions the Secretary 

9 may prescribe. 

10 ‘‘(f) DEEMED OWNED BY CITIZENS.—A vessel satisfying the require11 ments of this section is deemed to be owned only by citizens of the United 

12 States under sections 12103 and 50501 of this title. 

13 ‘‘§ 12120. Liquified gas tankers 

14 ‘‘Notwithstanding any agreement with the United States Government, the 

15 Secretary may issue a certificate of documentation with a coastwise endorse16 ment for a vessel to transport liquified natural gas or liquified petroleum 

17 gas to Puerto Rico from other ports in the United States, if the vessel— 

18 ‘‘(1) is a foreign built vessel that was built before October 19, 1996; 

19 or 

20 ‘‘(2) was documented under this chapter before that date, even if the 

21 vessel is placed under a foreign registry and subsequently redocu22 mented under this chapter for operation under this section. 

23 ‘‘§ 12121. Small passenger vessels and uninspected pas24 senger vessels 

25 ‘‘(a) DEFINITIONS.—In this section: 

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

27 that— 

28 ‘‘(A) was not built in the United States and is at least 3 years 

29 old; or 

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

31 3 years before the certificate requested under subsection (b) would 

32 take effect. 

33 ‘‘(2) SMALL PASSENGER VESSEL; UNINSPECTED PASSENGER VESSEL; 

34 PASSENGER FOR HIRE.—The terms ‘small passenger vessel’, 

35 ‘uninspected passenger vessel’, and ‘passenger for hire’ have the mean36 ing given those terms in section 2101 of this title. 

37 ‘‘(b) ISSUANCE OF CERTIFICATE AND ENDORSEMENT.—Notwithstanding 

38 sections 12112, 12113, 55102, and 55103 of this title, the Secretary may 

39 issue a certificate of documentation with an appropriate endorsement for 

40 employment in the coastwise trade as a small passenger vessel or an 

41 uninspected passenger vessel in the case of an eligible vessel authorized to 
25 

•HR 1442 IH 

1 carry no more than 12 passengers for hire if the Secretary of Transpor2 tation, after notice and an opportunity for public comment, determines that 

3 the employment of the vessel in the coastwise trade will not adversely af4 fect— 

5 ‘‘(1) United States vessel builders; or 

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

7 built in the United States in that business. 

8 ‘‘(c) REVOCATION.— 

9 ‘‘(1) FOR FRAUD.—The Secretary shall revoke a certificate or en10 dorsement issued under subsection (b) if the Secretary of Transpor11 tation, after notice and an opportunity for a hearing, determines that 

12 the certificate or endorsement was obtained by fraud. 

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

14 affect— 

15 ‘‘(A) the criminal prohibition on fraud and false statements in 

16 section 1001 of title 18; or 

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

18 or endorsement issued under subsection (b). 

19 ‘‘SUBCHAPTER III—MISCELLANEOUS 

20 ‘‘§ 12131. Command of documented vessels 

21 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), a documented 

22 vessel may be placed under the commmand only of a citizen of the United 

23 States. 

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

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

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

27 of the United States. 

28 ‘‘§ 12132. Loss of coastwise trade privileges 

29 ‘‘(a) SOLD FOREIGN OR PLACED UNDER FOREIGN REGISTRY.—A vessel 

30 of more than 200 gross tons (as measured under chapter 143 of this title), 

31 eligible to engage in the coastwise trade, and later sold foreign in whole or 

32 in part or placed under foreign registry may not thereafter engage in the 

33 coastwise trade. 

34 ‘‘(b) REBUILT OUTSIDE THE UNITED STATES.—A vessel eligible to en35 gage in the coastwise trade and later rebuilt outside the United States may 

36 not thereafter engage in the coastwise trade. 

37 ‘‘§ 12133. Duty to carry certificate on vessel and allow exam38 ination 

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

40 be carried on the vessel unless the vessel is exempt by regulation from car41 rying the certificate. 
26 

•HR 1442 IH 

1 ‘‘(b) AVAILABILITY.—The owner or individual in charge of a vessel re2 quired to carry its certificate of documentation shall make the certificate 

3 available for examination at the request of an officer enforcing the revenue 

4 laws or as otherwise required by law or regulation. 

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

6 shall be fined under title 18, imprisoned for not more than one year, or 

7 both. 

8 ‘‘§ 12134. Evidentiary uses of documentation 

9 ‘‘A certificate of documentation is— 

10 ‘‘(1) conclusive evidence of nationality for international purposes, but 

11 not in a proceeding conducted under the laws of the United States; 

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

13 trade; and 

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

15 ownership is in issue. 

16 ‘‘§ 12135. Invalidation of certificates of documentation 

17 ‘‘A certificate of documentation or an endorsement on the certificate is 

18 invalid if the vessel for which it is issued— 

19 ‘‘(1) no longer meets the requirements of this chapter and regula20 tions prescribed under this chapter applicable to the certificate or en21 dorsement; or 

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

23 the United States in violation of section 12131 of this title. 

24 ‘‘§ 12136. Surrender of certificates of documentation 

25 ‘‘(a) SURRENDER.—An invalid certificate of documentation, or a certifi26 cate with an invalid endorsement, shall be surrendered as provided by regu27 lations prescribed by the Secretary. 

28 ‘‘(b) CONDITIONS FOR SURRENDER.— 

29 ‘‘(1) VESSELS OVER 1,000 TONS.—The Secretary may condition ap30 proval of the surrender of the certificate of documentation for a vessel 

31 over 1,000 gross tons. 

32 ‘‘(2) VESSELS COVERED BY MORTGAGE.—The Secretary may ap33 prove the surrender of the certificate of documentation of a vessel cov34 ered by a mortgage filed or recorded under section 31321 of this title 

35 only if the mortgagee consents. 

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

37 the surrender of the certificate of documentation for a vessel solely on 

38 the basis that a notice of a claim of a lien on the vessel has been re39 corded under section 31343(a) of this title. 

40 ‘‘(c) CONTINUED APPLICATION OF CERTAIN LAWS.— 
27 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—Notwithstanding subsection (a), until the certifi2 cate of documentation is surrendered with the approval of the Sec3 retary, a documented vessel is deemed to continue to be documented 

4 under this chapter for purposes of— 

5 ‘‘(A) chapter 313 of this title for an instrument filed or re6 corded before the date of invalidation and an assignment after 

7 that date; 

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

9 title; and 

10 ‘‘(C) any other law of the United States identified by the Sec11 retary by regulation as a law to which the Secretary applies this 

12 subsection. 

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

14 forfeited or sold by order of a district court of the United States. 

15 ‘‘§ 12137. Recording of vessels built in the United States 

16 ‘‘The Secretary may provide for recording and certifying information 

17 about vessels built in the United States that the Secretary considers to be 

18 in the public interest. 

19 ‘‘§ 12138. List of documented vessels 

20 ‘‘(a) IN GENERAL.—The Secretary shall publish periodically a list of all 

21 documented vessels and information about those vessels that the Secretary 

22 considers pertinent or useful. The list shall contain a notation clearly indi23 cating all vessels classed by the American Bureau of Shipping. 

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

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

26 maintain, and periodically update an inventory of vessels that are docu27 mented under this chapter, are at least 200 feet in length, and have 

28 the capability to lay, maintain, or repair a submarine cable, without re29 gard to whether a particular vessel is classed as a cable ship or cable 

30 vessel. 

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

32 inventory, the Secretary of Transportation shall include in the inven33 tory— 

34 ‘‘(A) the name, length, beam, depth, and other distinguishing 

35 characteristics of the vessel; 

36 ‘‘(B) the abilities and limitations of the vessel with respect to 

37 laying, maintaining, and repairing a submarine cable; and 

38 ‘‘(C) the name and address of the person to whom inquiries re39 garding the vessel may be made. 

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

41 in the Federal Register an updated inventory every 6 months. 
28 

•HR 1442 IH 

1 ‘‘§ 12139. Reports 

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

3 governing the qualifications of vessels to engage in the coastwise trade and 

4 the fisheries, the Secretary may require owners, masters, and charterers of 

5 documented vessels to submit reports in any reasonable form and manner 

6 the Secretary may prescribe. 

7 ‘‘(b) VESSELS REBUILT OUTSIDE UNITED STATES.— 

8 ‘‘(1) IN GENERAL.—Under regulations prescribed by the Secretary, 

9 if a vessel exceeding the tonnage specified in paragraph (2) and docu10 mented or last documented under the laws of the United States is re11 built outside the United States, the owner or master shall submit a re12 port of the rebuilding to the Secretary. 

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

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

15 title; or 

16 ‘‘(B) an alternate tonnage as measured under section 14302 of 

17 this title as prescribed by the Secretary under section 14104 of 

18 this title. 

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

20 United States, the report shall be submitted when the rebuilding is 

21 completed. If the rebuilding is completed outside the United States, the 

22 report shall be submitted when the vessel first arrives at a port in the 

23 customs territory of the United States. 

24 ‘‘SUBCHAPTER IV—PENALTIES 

25 ‘‘§ 12151. Penalties 

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

27 prescribed under this chapter is liable to the United States Government for 

28 a civil penalty of not more than $10,000. Each day of a continuing violation 

29 is a separate violation. 

30 ‘‘(b) SEIZURE AND FORFEITURE OF VESSELS.—A vessel and its equip31 ment are liable to seizure by and forfeiture to the Government if— 

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

33 owner knowingly falsifies or conceals a material fact, or knowingly 

34 makes a false statement or representation, about the documentation of 

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

36 ‘‘(2) a certificate of documentation is knowingly and fraudulently 

37 used for the vessel; 

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

39 revoked under section 12152 of this title; 

40 ‘‘(4) the vessel is employed in a trade without an appropriate en41 dorsement; 
29 

•HR 1442 IH 

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

2 other than for pleasure; 

3 ‘‘(6) the vessel is a documented vessel and is placed under the com4 mand of a person not a citizen of the United States, except as author5 ized by section 12131(b) of this title; or 

6 ‘‘(7) the vessel is rebuilt outside the United States and a report of 

7 the rebuilding is not submitted as required by section 12139(b) of this 

8 title. 

9 ‘‘(c) ENGAGING IN FISHING AFTER FALSIFYING ELIGIBILITY.—In addi10 tion to other penalties under this section, the owner of a documented vessel 

11 for which a fishery endorsement has been issued is liable to the Government 

12 for a civil penalty of not more than $100,000 for each day the vessel en13 gages in fishing (as defined in section 3 of the Magnuson-Stevens Fishery 

14 Conservation and Management Act (16 U.S.C. 1802)) within the exclusive 

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

16 knowingly falsified or concealed a material fact, or knowingly made a false 

17 statement or representation, about the eligibility of the vessel under section 

18 12113(c) or (d) of this title in applying for or applying to renew the fishery 

19 endorsement. 

20 ‘‘§ 12152. Denial or revocation of endorsement for non-pay21 ment of civil penalty 

22 ‘‘If the owner of a vessel fails to pay a civil penalty imposed by the Sec23 retary, the Secretary may deny the issuance or renewal of an endorsement, 

24 or revoke the endorsement, on a certificate of documentation issued for the 

25 vessel under this chapter.’’. 

26 SEC. 6. SUBTITLE III OF TITLE 46. 

27 (a) SUBTITLE ANALYSIS.—The analysis of subtitle III of title 46, United 

28 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’’. 

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

30 chapter 301 and the lines appearing immediately before and immediately 

31 after chapter 313 indicating that certain chapters are reserved. 

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

33 inserting after the analysis of subtitle III the following: 

34 ‘‘CHAPTER 301—GENERAL LIABILITY PROVISIONS 

‘‘Sec. 

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

‘‘30102. Liability to passengers. 
30 

•HR 1442 IH 

‘‘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 action. 

1 ‘‘§ 30101. Extension of jurisdiction to cases of damage or in2 jury on land 

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

4 United States extends to and includes cases of injury or damage, to person 

5 or property, caused by a vessel on navigable waters, even though the injury 

6 or damage is done or consummated on land. 

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

8 brought in rem or in personam according to the principles of law and the 

9 rules of practice applicable in cases where the injury or damage has been 

10 done and consummated on navigable waters. 

11 ‘‘(c) ACTIONS AGAINST UNITED STATES.— 

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

13 States for injury or damage done or consummated on land by a vessel 

14 on navigable waters, chapter 309 or 311 of this title, as appropriate, 

15 provides the exclusive remedy. 

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

17 (1) may not be brought until the expiration of the 6-month period after 

18 the claim has been presented in writing to the agency owning or oper19 ating the vessel causing the injury or damage. 

20 ‘‘§ 30102. Liability to passengers 

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

22 liable for personal injury to a passenger or damage to a passenger’s baggage 

23 caused by— 

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

25 of this title; or 

26 ‘‘(2) a known defect in the steaming apparatus or hull of the vessel. 

27 ‘‘(b) NOT SUBJECT TO LIMITATION.—A liability imposed under this sec28 tion is not subject to limitation under chapter 305 of this title. 

29 ‘‘§ 30103. Liability of master, mate, engineer, and pilot 

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

31 pilot of a vessel, and recover damages, for personal injury or loss caused 

32 by the master’s, mate’s, engineer’s, or pilot’s— 

33 ‘‘(1) negligence or willful misconduct; or 

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

35 vessels. 

36 ‘‘§ 30104. Personal injury to or death of seamen 

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

38 or, if the seaman dies from the injury, the personal representative of the 
31 

•HR 1442 IH 

1 seaman may elect to bring a civil action at law, with the right of trial by 

2 jury, against the employer. Laws of the United States regulating recovery 

3 for personal injury to, or death of, a railway employee apply to an action 

4 under this section. 

5 ‘‘(b) VENUE.—An action under this section shall be brought in the judi6 cial district in which the employer resides or the employer’s principal office 

7 is located. 

8 ‘‘§ 30105. Restriction on recovery by non-citizens and non9 resident aliens for incidents in waters of other 

10 countries 

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

12 meaning given that term in article I of the 1958 Convention on the Conti13 nental Shelf. 

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

15 for maintenance and cure or for damages for personal injury or death may 

16 not be brought under a maritime law of the United States if— 

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

18 or permanent resident alien of the United States at the time of the in19 cident giving rise to the action; 

20 ‘‘(2) the incident occurred in the territorial waters or waters over21 laying the continental shelf of a country other than the United States; 

22 and 

23 ‘‘(3) the individual suffering the injury or death was employed at the 

24 time of the incident by a person engaged in the exploration, develop25 ment, or production of offshore mineral or energy resources, including 

26 drilling, mapping, surveying, diving, pipelaying, maintaining, repairing, 

27 constructing, or transporting supplies, equipment, or personnel, but not 

28 including transporting those resources by a vessel constructed or adapt29 ed primarily to carry oil in bulk in the cargo spaces. 

30 ‘‘(c) NONAPPLICATION.—Subsection (b) does not apply if the individual 

31 bringing the action establishes that a remedy is not available under the laws 

32 of— 

33 ‘‘(1) the country asserting jurisdiction over the area in which the in34 cident occurred; or 

35 ‘‘(2) the country in which the individual suffering the injury or death 

36 maintained citizenship or residency at the time of the incident. 

37 ‘‘§ 30106. Time limit on bringing action 

38 ‘‘Except as otherwise provided by law, a civil action for damages for per39 sonal injury or death arising out of a maritime tort must be brought within 

40 3 years after the cause of action arose. 
32 

•HR 1442 IH 

1 ‘‘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. 

2 ‘‘§ 30301. Short title 

3 ‘‘This chapter may be cited as the ‘Death on the High Seas Act’. 

4 ‘‘§ 30302. Cause of action 

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

6 default occurring on the high seas beyond a marine league from the shore 

7 of the United States, the personal representative of the decedent may bring 

8 a civil action in admiralty against the person or vessel responsible. The ac9 tion shall be for the exclusive benefit of the decedent’s spouse, parent, child, 

10 or dependent relative. 

11 ‘‘§ 30303. Amount and apportionment of recovery 

12 ‘‘The recovery in an action under this chapter shall be a fair compensa13 tion for the pecuniary loss sustained by the individuals for whose benefit 

14 the action is brought. The court shall apportion the recovery among those 

15 individuals in proportion to the loss each has sustained. 

16 ‘‘§ 30304. Contributory negligence 

17 ‘‘In an action under this chapter, contributory negligence of the decedent 

18 is not a bar to recovery. The court shall consider the degree of negligence 

19 of the decedent and reduce the recovery accordingly. 

20 ‘‘§ 30305. Death of plaintiff in pending action 

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

22 to recover for personal injury caused by wrongful act, neglect, or default 

23 described in section 30302 of this title, and the individual dies during the 

24 action as a result of the wrongful act, neglect, or default, the personal rep25 resentative of the decedent may be substituted as the plaintiff and the ac26 tion may proceed under this chapter for the recovery authorized by this 

27 chapter. 

28 ‘‘§ 30306. Foreign cause of action 

29 ‘‘When a cause of action exists under the law of a foreign country for 

30 death by wrongful act, neglect, or default on the high seas, a civil action 

31 in admiralty may be brought in a court of the United States based on the 

32 foreign cause of action, without abatement for the amount for which recov33 ery is authorized. 
33 

•HR 1442 IH 

1 ‘‘§ 30307. Commercial aviation accidents 

2 ‘‘(a) DEFINITION.—In this section, the term ‘nonpecuniary damages’ 

3 means damages for loss of care, comfort, and companionship. 

4 ‘‘(b) BEYOND 12 NAUTICAL MILES.—In an action under this chapter, if 

5 the death resulted from a commercial aviation accident occurring on the 

6 high seas beyond 12 nautical miles from the shore of the United States, ad7 ditional compensation is recoverable for nonpecuniary damages for wrongful 

8 death, but punitive damages are not recoverable. 

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

10 death resulted from a commercial aviation accident occurring on the high 

11 seas 12 nautical miles or less from the shore of the United States. 

12 ‘‘§ 30308. Nonapplication 

13 ‘‘(a) STATE LAW.—This chapter does not affect the law of a State regu14 lating the right to recover for death. 

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

16 Lakes, waters within the territorial limits of a State, or navigable waters 

17 in the Panama Canal. 

18 ‘‘CHAPTER 305—EXONERATION AND LIMITATION OF 

19 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. 

‘‘30511. Action by owner for limitation. 

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

20 ‘‘§ 30501. Definition 

21 ‘‘In this chapter, the term ‘owner’ includes a charterer that mans, sup22 plies, and navigates a vessel at the charterer’s own expense or by the 

23 charterer’s own procurement. 

24 ‘‘§ 30502. Application 

25 ‘‘Except as otherwise provided, this chapter (except section 30503) ap26 plies to seagoing vessels and vessels used on lakes or rivers or in inland 

27 navigation, including canal boats, barges, and lighters. 

28 ‘‘§ 30503. Declaration of nature and value of goods 

29 ‘‘(a) IN GENERAL.—If a shipper of an item named in subsection (b), con30 tained in a parcel, package, or trunk, loads the item as freight or baggage 

31 on a vessel, without at the time of loading giving to the person receiving 

32 the item a written notice of the true character and value of the item and 

33 having that information entered on the bill of lading, the owner and master 
34 

•HR 1442 IH 

1 of the vessel are not liable as carriers. The owner and master are not liable 

2 beyond the value entered on the bill of lading. 

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

4 gold or silver plated articles, precious stones, jewelry, trinkets, watches, 

5 clocks, glass, china, coins, bills, securities, printings, engravings, pictures, 

6 stamps, maps, papers, silks, furs, lace, and similar items of high value and 

7 small size. 

8 ‘‘§ 30504. Loss by fire 

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

10 on the vessel caused by a fire on the vessel unless the fire resulted from 

11 the design or neglect of the owner. 

12 ‘‘§ 30505. General limit of liability 

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

14 liability of the owner of a vessel for any claim arising from any cause, on 

15 account of that ownership, without the privity or knowledge of the owner 

16 shall not exceed the value of the vessel and pending freight. If the vessel 

17 has more than one owner, the proportionate share of the liability of any one 

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

19 pending freight. 

20 ‘‘(b) NONAPPLICATION.—This section does not apply to a claim for 

21 wages. 

22 ‘‘§ 30506. Limit of liability for personal injury or death 

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

24 does not apply to pleasure yachts, tugs, towboats, towing vessels, tank ves25 sels, fishing vessels, fish tender vessels, canal boats, scows, car floats, 

26 barges, lighters, or nondescript vessels. 

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

28 determined under section 30505 of this title is such that the portion avail29 able to pay claims for personal injury or death is less than $420 times the 

30 tonnage of the vessel, that portion shall be increased to $420 times the ton31 nage of the vessel. That portion may be used only to pay claims for personal 

32 injury or death. 

33 ‘‘(c) CALCULATION OF TONNAGE.—Under subsection (b), the tonnage of 

34 a self-propelled vessel is the gross tonnage without deduction for engine 

35 room, and the tonnage of a sailing vessel is the tonnage for documentation. 

36 However, space for the use of seamen is excluded. 

37 ‘‘(d) CLAIMS ARISING ON DISTINCT OCCASIONS.—Separate limits of li38 ability apply to claims for personal injury or death arising on distinct occa39 sions. 
35 

•HR 1442 IH 

1 ‘‘(e) PRIVITY OR KNOWLEDGE.—In a claim for personal injury or death, 

2 the privity or knowledge of the master or managing agent, at or before the 

3 beginning of each voyage, is imputed to the owner. 

4 ‘‘§ 30507. Apportionment of losses 

5 ‘‘If the amount determined under sections 30505 and 30506 of this title 

6 is insufficient to pay all claimants, the claimants shall be paid in proportion 

7 to their respective losses. 

8 ‘‘§ 30508. Provisions requiring notice of claim or limiting 

9 time for bringing action 

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

11 does not apply to pleasure yachts, tugs, towboats, towing vessels, tank ves12 sels, fishing vessels, fish tender vessels, canal boats, scows, car floats, 

13 barges, lighters, or nondescript vessels. 

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

15 a vessel transporting passengers or property between ports in the United 

16 States, or between a port in the United States and a port in a foreign coun17 try, may not limit by regulation, contract, or otherwise the period for— 

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

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

20 ‘‘(2) bringing a civil action for personal injury or death to less than 

21 one year after the date of the injury or death. 

22 ‘‘(c) EFFECT OF FAILURE TO GIVE NOTICE.—When notice of a claim for 

23 personal injury or death is required by a contract, the failure to give the 

24 notice is not a bar to recovery if— 

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

26 had knowledge of the injury or death and the owner has not been prej27 udiced by the failure; 

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

29 could not have been given; or 

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

31 notice. 

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

33 or mental incompetent, or if a claim is for wrongful death, any period pro34 vided by a contract for giving notice of the claim is tolled until the earlier 

35 of— 

36 ‘‘(1) the date a legal representative is appointed for the minor, in37 competent, or decedent’s estate; or 

38 ‘‘(2) 3 years after the injury or death. 

39 ‘‘§ 30509. Provisions limiting liability for personal injury or 

40 death 

41 ‘‘(a) PROHIBITION.— 
36 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—The owner, master, manager, or agent of a ves2 sel transporting passengers between ports in the United States, or be3 tween a port in the United States and a port in a foreign country, may 

4 not include in a regulation or contract a provision limiting— 

5 ‘‘(A) the liability of the owner, master, or agent for personal in6 jury or death caused by the negligence or fault of the owner or 

7 the owner’s employees or agents; or 

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

9 trial. 

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

11 ‘‘(b) EMOTIONAL DISTRESS, MENTAL SUFFERING, AND PSYCHOLOGICAL

12 INJURY.— 

13 ‘‘(1) IN GENERAL.—Subsection (a) does not prohibit a provision in 

14 a contract or in ticket conditions of carriage with a passenger that re15 lieves an owner, master, manager, agent, operator, or crewmember of 

16 a vessel from liability for infliction of emotional distress, mental suf17 fering, or psychological injury so long as the provision does not limit 

18 such liability when the emotional distress, mental suffering, or psycho19 logical injury is— 

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

21 negligence or fault of a crewmember or the owner, master, man22 ager, agent, or operator; 

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

24 physical injury, and the risk was caused by the negligence or fault 

25 of a crewmember or the owner, master, manager, agent, or oper26 ator; or 

27 ‘‘(C) intentionally inflicted by a crewmember or the owner, mas28 ter, manager, agent, or operator. 

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

30 of a crewmember or the owner, master, manager, agent, or operator 

31 of a vessel in a case involving sexual harassment, sexual assault, or 

32 rape. 

33 ‘‘§ 30510. Vicarious liability for medical malpractice 

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

35 or employer of a crewmember is claimed to have vicarious liability for med36 ical malpractice with regard to a crewmember occurring at a shoreside facil37 ity, and to the extent the damages resulted from the conduct of any shore38 side doctor, hospital, medical facility, or other health care provider, the 

39 owner, operator, or employer is entitled to rely on any statutory limitations 

40 of liability applicable to the doctor, hospital, medical facility, or other health 
37 

•HR 1442 IH 

1 care provider in the State of the United States in which the shoreside med2 ical care was provided. 

3 ‘‘§ 30511. Action by owner for limitation 

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

5 district court of the United States for limitation of liability under this chap6 ter. The action must be brought within 6 months after a claimant gives the 

7 owner written notice of a claim. 

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

9 shall— 

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

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

12 the vessel and pending freight, or approved security; and 

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

14 from time to time as necessary to carry out this chapter; or 

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

16 claimants— 

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

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

19 from time to time as necessary to carry out this chapter. 

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

21 under this section and the owner has complied with subsection (b), all 

22 claims and proceedings against the owner related to the matter in question 

23 shall cease. 

24 ‘‘§ 30512. Liability as master, officer, or seaman not affected 

25 ‘‘This chapter does not affect the liability of an individual as a master, 

26 officer, or seaman, even though the individual is also an owner of the vessel. 

27 ‘‘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. Civil penalty. 

28 ‘‘§ 30701. Definition 

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

30 agent, or master of a vessel. 

31 ‘‘§ 30702. Application 

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

33 a carrier engaged in the carriage of goods to or from any port in the United 

34 States. 

35 ‘‘(b) RELATION TO COGSA.—The relationship between this chapter and 

36 the Carriage of Goods By Sea Act shall be the same as the relationship that 
38 

•HR 1442 IH 

1 existed between the Act of February 13, 1893 (ch. 105, 27 Stat. 445) (com2 monly known as the Harter Act) and the Carriage of Goods By Sea Act, 

3 prior to the repeal of the Harter Act. 

4 ‘‘(c) LIVE ANIMALS.—Sections 30703 and 30704 of this title do not 

5 apply to the carriage of live animals. 

6 ‘‘§ 30703. Bills of lading 

7 ‘‘(a) ISSUANCE.—A carrier shall issue to a shipper a bill of lading or 

8 shipping document. 

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

10 a statement of— 

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

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

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

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

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

16 document issued under this section is prima facie evidence of receipt of the 

17 goods described. 

18 ‘‘§ 30704. Loading, stowage, custody, care, and delivery 

19 ‘‘A carrier may not insert in a bill of lading or shipping document a pro20 vision relieving the carrier from liability for loss or damage arising from im21 proper loading, stowage, custody, care, or delivery. Any such provision is 

22 void. 

23 ‘‘§ 30705. Seaworthiness 

24 ‘‘(a) PROHIBITION.—A carrier may not insert in a bill of lading or ship25 ping document a provision lessening or avoiding its obligation to exercise 

26 due diligence to— 

27 ‘‘(1) make the vessel seaworthy; and 

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

29 ‘‘(b) VOIDNESS.—A provision described in subsection (a) is void. 

30 ‘‘§ 30706. Defenses 

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

32 the vessel in all respects seaworthy and to properly man, equip, and supply 

33 the vessel, the carrier and the vessel are not liable for loss or damage aris34 ing from an error in the navigation or management of the vessel. 

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

36 or damage arising from— 

37 ‘‘(1) dangers of the sea or other navigable waters; 

38 ‘‘(2) acts of God; 

39 ‘‘(3) public enemies; 

40 ‘‘(4) seizure under legal process; 

41 ‘‘(5) inherent defect, quality, or vice of the goods; 
39 

•HR 1442 IH 

1 ‘‘(6) insufficiency of package; 

2 ‘‘(7) act or omission of the shipper or owner of the goods or their 

3 agent; or 

4 ‘‘(8) saving or attempting to save life or property at sea, including 

5 a deviation in rendering such a service. 

6 ‘‘§ 30707. Civil penalty 

7 ‘‘(a) IN GENERAL.—A carrier that violates this chapter is liable for a civil 

8 penalty of not more than $2,000. 

9 ‘‘(b) LIEN.—The amount of the penalty and costs for the violation con10 stitute a lien on the vessel engaged in the carriage. A civil action in rem 

11 to enforce the lien may be brought in the district court of the United States 

12 for any district in which the vessel is found. 

13 ‘‘(c) DISPOSITION OF PENALTY.—Half of the penalty shall be paid to the 

14 person injured by the violation and half to the United States Government. 

15 ‘‘CHAPTER 309—SUITS IN ADMIRALTY AGAINST THE 

16 UNITED STATES 

‘‘Sec. 

‘‘30901. Short title. 

‘‘30902. Definition. 

‘‘30903. Waiver of immunity. 

‘‘30904. Exclusive remedy. 

‘‘30905. Period for bringing action. 

‘‘30906. Venue. 

‘‘30907. Security. 

‘‘30908. Procedure for hearing and determination. 

‘‘30909. Exoneration and limitation. 

‘‘30910. Costs and interest. 

‘‘30911. Arbitration, compromise, or settlement. 

‘‘30912. Payment of judgment or settlement. 

‘‘30913. Exemption from arrest or seizure. 

‘‘30914. Release of privately owned vessel after seizure. 

‘‘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. 

17 ‘‘§ 30901. Short title 

18 ‘‘This chapter may be cited as the ‘Suits in Admiralty Act’. 

19 ‘‘§ 30902. Definition 

20 ‘‘In this chapter, the term ‘federally-owned corporation’ means a corpora21 tion in which the United States owns all the outstanding capital stock. 

22 ‘‘§ 30903. Waiver of immunity 

23 ‘‘(a) IN GENERAL.—In a case in which, if a vessel were privately owned 

24 or operated, or if cargo were privately owned or possessed, or if a private 

25 person or property were involved, a civil action in admiralty could be main26 tained, a civil action in personam may be brought against the United States 

27 or a federally-owned corporation. In a civil action in admiralty brought by 

28 the United States or a federally-owned corporation, an admiralty claim in 
40 

•HR 1442 IH 

1 personam may be filed or a setoff claimed against the United States or cor2 poration. 

3 ‘‘(b) NON-JURY.—A claim against the United States or a federally-owned 

4 corporation under this section shall be tried without a jury. 

5 ‘‘§ 30904. Exclusive remedy 

6 ‘‘If a remedy is provided by this chapter, it shall be exclusive of any other 

7 action arising out of the same subject matter against the officer, employee, 

8 or agent of the United States or the federally-owned corporation whose act 

9 or omission gave rise to the claim. 

10 ‘‘§ 30905. Period for bringing action 

11 ‘‘A civil action under this chapter must be brought within 2 years after 

12 the cause of action arose. 

13 ‘‘§ 30906. Venue 

14 ‘‘(a) IN GENERAL.—A civil action under this chapter shall be brought in 

15 the district court of the United States for the district in which— 

16 ‘‘(1) any plaintiff resides or has its principal place of business; or 

17 ‘‘(2) the vessel or cargo is found. 

18 ‘‘(b) TRANSFER.—On a motion by a party, the court may transfer the 

19 action to any other district court of the United States. 

20 ‘‘§ 30907. Security 

21 ‘‘Neither the United States nor a federally-owned corporation may be re22 quired to give a bond or admiralty stipulation in a civil action under this 

23 chapter. 

24 ‘‘§ 30908. Procedure for hearing and determination 

25 ‘‘(a) IN GENERAL.—A civil action under this chapter shall proceed and 

26 be heard and determined according to the principles of law and the rules 

27 of practice applicable in like cases between private parties. 

28 ‘‘(b) IN REM.— 

29 ‘‘(1) REQUIREMENTS.—The action may proceed according to the 

30 principles of an action in rem if— 

31 ‘‘(A) the plaintiff elects in the complaint; and 

32 ‘‘(B) it appears that an action in rem could have been main33 tained had the vessel or cargo been privately owned and possessed. 

34 ‘‘(2) EFFECT ON RELIEF IN PERSONAM.—An election under para35 graph (1) does not prevent the plaintiff from seeking relief in personam 

36 in the same action. 

37 ‘‘§ 30909. Exoneration and limitation 

38 ‘‘The United States is entitled to the exemptions from and limitations of 

39 liability provided by law to an owner, charterer, operator, or agent of a ves40 sel. 
41 

•HR 1442 IH 

1 ‘‘§ 30910. Costs and interest 

2 ‘‘(a) IN GENERAL.—A judgment against the United States or a federally3 owned corporation under this chapter may include costs and interest at the 

4 rate of 4 percent per year until satisfied. Interest shall run as ordered by 

5 the court, except that interest is not allowable for the period before the ac6 tion is filed. 

7 ‘‘(b) CONTRACT PROVIDING FOR INTEREST.—Notwithstanding subsection 

8 (a), if the claim is based on a contract providing for interest, interest may 

9 be awarded at the rate and for the period provided in the contract. 

10 ‘‘§ 30911. Arbitration, compromise, or settlement 

11 ‘‘The Secretary of a department of the United States Government, or the 

12 board of trustees of a federally-owned corporation, may arbitrate, com13 promise, or settle a claim authorized by this chapter. 

14 ‘‘§ 30912. Payment of judgment or settlement 

15 ‘‘(a) IN GENERAL.—The proper accounting officer of the United States 

16 shall pay a final judgment, arbitration award, or settlement under this chap17 ter on presentation of an authenticated copy. 

18 ‘‘(b) SOURCE OF PAYMENT.—Payment shall be made from an appropria19 tion or fund available specifically for the purpose. If no appropriation or 

20 fund is specifically available, there is hereby appropriated, out of money in 

21 the Treasury not otherwise appropriated, an amount sufficient to pay the 

22 judgment, award, or settlement. 

23 ‘‘§ 30913. Exemption from arrest or seizure 

24 ‘‘The following are not subject to arrest or seizure by judicial process in 

25 the United States: 

26 ‘‘(1) A vessel owned by, possessed by, or operated by or for the 

27 United States or a federally-owned corporation. 

28 ‘‘(2) Cargo owned or possessed by the United States or a federally29 owned corporation. 

30 ‘‘§ 30914. Release of privately owned vessel after seizure 

31 ‘‘If a privately owned vessel not in the possession of the United States 

32 or a federally-owned corporation is arrested or attached in a civil action 

33 arising or alleged to have arisen from prior ownership, possession, or oper34 ation by the United States or corporation, the vessel shall be released with35 out bond or stipulation on a statement by the United States, through the 

36 Attorney General or other authorized law officer, that the United States is 

37 interested in the action, desires release of the vessel, and assumes liability 

38 for the satisfaction of any judgment obtained by the plaintiff. After the ves39 sel is released, the action shall proceed against the United States in accord40 ance with this chapter. 
42 

•HR 1442 IH 

1 ‘‘§ 30915. Seizures and other proceedings in foreign jurisdic2 tions 

3 ‘‘(a) IN GENERAL.—If a vessel or cargo described in section 30913 or 

4 30914 of this title is arrested, attached, or otherwise seized by judicial proc5 ess in a foreign country, or if an action is brought in a court of a foreign 

6 country against the master of such a vessel for a claim arising from the 

7 ownership, possession, or operation of the vessel, or the ownership, posses8 sion, or carriage of such cargo, the Secretary of State, on request of the 

9 Attorney General or another officer authorized by the Attorney General, 

10 may direct the United States consul residing at or nearest the place at 

11 which the action was brought— 

12 ‘‘(1) to claim the vessel or cargo as immune from arrest, attachment, 

13 or other seizure, and to execute an agreement, stipulation, bond, or un14 dertaking, for the United States or federally-owned corporation, for the 

15 release of the vessel or cargo and the prosecution of any appeal; or 

16 ‘‘(2) if an action has been brought against the master of such a ves17 sel, to enter the appearance of the United States or corporation and 

18 to pledge the credit of the United States or corporation to the payment 

19 of any judgment and costs in the action. 

20 ‘‘(b) ARRANGING BOND OR STIPULATION.—The Attorney General may— 

21 ‘‘(1) arrange with a bank, surety company, or other person, whether 

22 in the United States or a foreign country, to execute a bond or stipula23 tion; and 

24 ‘‘(2) pledge the credit of the United States to secure the bond or 

25 stipulation. 

26 ‘‘(c) PAYMENT OF JUDGMENT.—The appropriate accounting officer of the 

27 United States or corporation may pay a judgment in an action described 

28 in subsection (a) on presentation of a copy of the judgment if certified by 

29 the clerk of the court and authenticated by— 

30 ‘‘(1) the certificate and seal of the United States consul claiming the 

31 vessel or cargo, or by the consul’s successor; and 

32 ‘‘(2) the certificate of the Secretary as to the official capacity of the 

33 consul. 

34 ‘‘(d) RIGHT TO CLAIM IMMUNITY NOT AFFECTED.—This section does 

35 not affect the right of the United States to claim immunity of a vessel or 

36 cargo from foreign jurisdiction. 

37 ‘‘§ 30916. Recovery by the United States for salvage services 

38 ‘‘(a) CIVIL ACTION.—The United States, and the crew of a merchant ves39 sel owned or operated by the United States, or a federally-owned corpora40 tion, may bring a civil action to recover for salvage services provided by the 

41 vessel and crew. 
43 

•HR 1442 IH 

1 ‘‘(b) DEPOSIT OF AMOUNTS RECOVERED.—Any amount recovered under 

2 this section by the United States for its own benefit, and not for the benefit 

3 of the crew, shall be deposited in the Treasury to the credit of the depart4 ment of the United States Government, or the corporation, having control 

5 of the possession or operation of the vessel. 

6 ‘‘§ 30917. Disposition of amounts recovered by the United 

7 States 

8 ‘‘Amounts recovered in a civil action brought by the United States on a 

9 claim arising from the ownership, possession, or operation of a merchant 

10 vessel, or the ownership, possession, or carriage of cargo, shall be deposited 

11 in the Treasury to the credit of the department of the United States Gov12 ernment, or the federally-owned corporation, having control of the vessel or 

13 cargo, for reimbursement of the appropriation, insurance fund, or other 

14 fund from which the compensation for which the judgment was recovered 

15 was or will be paid. 

16 ‘‘§ 30918. Reports 

17 ‘‘The Secretary of each department of the United States Government, 

18 and the board of trustees of each federally-owned corporation, shall report 

19 to Congress at each session thereof all arbitration awards and settlements 

20 agreed to under this chapter since the previous session, for which the time 

21 to appeal has expired or been waived. 

22 ‘‘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. 

23 ‘‘§ 31101. Short title 

24 ‘‘This chapter may be cited as the ‘Public Vessels Act’. 

25 ‘‘§ 31102. Waiver of immunity 

26 ‘‘(a) IN GENERAL.—A civil action in personam in admiralty may be 

27 brought, or an impleader filed, against the United States for— 

28 ‘‘(1) damages caused by a public vessel of the United States; or 

29 ‘‘(2) compensation for towage and salvage services, including con30 tract salvage, rendered to a public vessel of the United States. 

31 ‘‘(b) COUNTERCLAIM OR SETOFF.—If the United States brings a civil ac32 tion in admiralty for damages caused by a privately owned vessel, the owner 
44 

•HR 1442 IH 

1 of the vessel, or the successor in interest, may file a counterclaim in per2 sonam, or claim a setoff, against the United States for damages arising out 

3 of the same subject matter. 

4 ‘‘§ 31103. Applicable procedure 

5 ‘‘A civil action under this chapter is subject to the provisions of chapter 

6 309 of this title except to the extent inconsistent with this chapter. 

7 ‘‘§ 31104. Venue 

8 ‘‘(a) IN GENERAL.—A civil action under this chapter shall be brought in 

9 the district court of the United States for the district in which the vessel 

10 or cargo is found within the United States. 

11 ‘‘(b) VESSEL OR CARGO OUTSIDE TERRITORIAL WATERS.—If the vessel 

12 or cargo is outside the territorial waters of the United States— 

13 ‘‘(1) the action shall be brought in the district court of the United 

14 States for any district in which any plaintiff resides or has an office 

15 for the transaction of business; or 

16 ‘‘(2) if no plaintiff resides or has an office for the transaction of 

17 business in the United States, the action may be brought in the district 

18 court of the United States for any district. 

19 ‘‘§ 31105. Security when counterclaim filed 

20 ‘‘If a counterclaim is filed for a cause of action for which the original 

21 action is filed under this chapter, the respondent to the counterclaim shall 

22 give security in the usual amount and form to respond to the counterclaim, 

23 unless the court for cause shown orders otherwise. The proceedings in the 

24 original action shall be stayed until the security is given. 

25 ‘‘§ 31106. Exoneration and limitation 

26 ‘‘The United States is entitled to the exemptions from and limitations of 

27 liability provided by law to an owner, charterer, operator, or agent of a ves28 sel. 

29 ‘‘§ 31107. Interest 

30 ‘‘A judgment in a civil action under this chapter may not include interest 

31 for the period before the judgment is issued unless the claim is based on 

32 a contract providing for interest. 

33 ‘‘§ 31108. Arbitration, compromise, or settlement 

34 ‘‘The Attorney General may arbitrate, compromise, or settle a claim au35 thorized by this chapter if the claim actually has been filed. 

36 ‘‘§ 31109. Payment of judgment or settlement 

37 ‘‘The proper accounting officer of the United States shall pay a final 

38 judgment, arbitration award, or settlement under this chapter on presen39 tation of an authenticated copy. Payment shall be made from any money 

40 in the Treasury appropriated for the purpose. 
45 

•HR 1442 IH 

1 ‘‘§ 31110. Subpoenas to officers or members of crew 

2 ‘‘An officer or member of the crew of a public vessel may not be subpoe3 naed in a civil action under this chapter without the consent of— 

4 ‘‘(1) the Secretary of the department or the head of the independent 

5 establishment having control of the vessel at the time the cause of ac6 tion arose; or 

7 ‘‘(2) the master or commanding officer of the vessel at the time the 

8 subpoena is issued. 

9 ‘‘§ 31111. Claims by nationals of foreign countries 

10 ‘‘A national of a foreign country may not maintain a civil action under 

11 this chapter unless it appears to the satisfaction of the court in which the 

12 action is brought that the government of that country, in similar cir13 cumstances, allows nationals of the United States to sue in its courts. 

14 ‘‘§ 31112. Lien not recognized or created 

15 ‘‘This chapter shall not be construed as recognizing the existence of or 

16 as creating a lien against a public vessel of the United States. 

17 ‘‘§ 31113. Reports 

18 ‘‘The Attorney General shall report to Congress at each session thereof 

19 all claims settled under this chapter.’’. 

20 SEC. 7. SUBTITLE IV OF TITLE 46. 

21 Title 46, United States Code, is amended by inserting after subtitle III 

22 the following: 

23 ‘‘Subtitle IV—Regulation of Ocean Shipping 

24 ‘‘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 

25 ‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

‘‘421. Regulations Affecting Shipping in Foreign Trade ....................... 42101 

‘‘423. Foreign Shipping Practices .................................................................. 42301 

26 ‘‘PART C—MISCELLANEOUS

‘‘441. Evidence of Financial Responsibility for Passenger Transportation.44101 

27 ‘‘PART A—OCEAN SHIPPING

28 ‘‘CHAPTER 401—GENERAL 

‘‘Sec. 

‘‘40101. Purposes. 

‘‘40102. Definitions. 

‘‘40103. Administrative exemptions. 

‘‘40104. Reports filed with the Commission. 
46 

•HR 1442 IH 

1 ‘‘§ 40101. Purposes 

2 ‘‘The purposes of this part are to— 

3 ‘‘(1) establish a nondiscriminatory regulatory process for the com4 mon carriage of goods by water in the foreign commerce of the United 

5 States with a minimum of government intervention and regulatory 

6 costs; 

7 ‘‘(2) provide an efficient and economic transportation system in the 

8 ocean commerce of the United States that is, insofar as possible, in 

9 harmony with, and responsive to, international shipping practices; 

10 ‘‘(3) encourage the development of an economically sound and effi11 cient liner fleet of United States documented vessels capable of meeting 

12 national security needs; and 

13 ‘‘(4) promote the growth and development of United States exports 

14 through competitive and efficient ocean transportation and by placing 

15 a greater reliance on the marketplace. 

16 ‘‘§ 40102. Definitions 

17 ‘‘In this part: 

18 ‘‘(1) AGREEMENT.—The term ‘agreement’— 

19 ‘‘(A) means a written or oral understanding, arrangement, or 

20 association, and any modification or cancellation thereof; but 

21 ‘‘(B) does not include a maritime labor agreement. 

22 ‘‘(2) ANTITRUST LAWS.—The term ‘antitrust laws’ means— 

23 ‘‘(A) the Sherman Act (15 U.S.C. 1 et seq.); 

24 ‘‘(B) sections 73 and 74 of the Wilson Tariff Act (15 U.S.C. 

25 8, 9); 

26 ‘‘(C) the Clayton Act (15 U.S.C. 12 et seq.); 

27 ‘‘(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a, 13b, 21a); 

28 ‘‘(E) the Federal Trade Commission Act (15 U.S.C. 41 et seq.); 

29 ‘‘(F) the Antitrust Civil Process Act (15 U.S.C. 1311 et seq.); 

30 and 

31 ‘‘(G) Acts supplementary to those Acts. 

32 ‘‘(3) ASSESSMENT AGREEMENT.—The term ‘assessment agreement’ 

33 means an agreement, whether part of a collective bargaining agreement 

34 or negotiated separately, to the extent the agreement provides for the 

35 funding of collectively bargained fringe-benefit obligations on other 

36 than a uniform worker-hour basis, regardless of the cargo handled or 

37 type of vessel or equipment used. 

38 ‘‘(4) BULK CARGO.—The term ‘bulk cargo’ means cargo that is load39 ed and carried in bulk without mark or count. 

40 ‘‘(5) CHEMICAL PARCEL-TANKER.—The term ‘chemical parcel-tank41 er’ means a vessel that has— 
47 

•HR 1442 IH 

1 ‘‘(A) a cargo-carrying capability consisting of individual cargo 

2 tanks for bulk chemicals that— 

3 ‘‘(i) are a permanent part of the vessel; and 

4 ‘‘(ii) have segregation capability with piping systems to per5 mit simultaneous carriage of several bulk chemical cargoes 

6 with minimum risk of cross-contamination; and 

7 ‘‘(B) a valid certificate of fitness under the International Mari8 time Organization Code for the Construction and Equipment of 

9 Ships Carrying Dangerous Chemicals in Bulk. 

10 ‘‘(6) COMMON CARRIER.—The term ‘common carrier’— 

11 ‘‘(A) means a person that— 

12 ‘‘(i) holds itself out to the general public to provide trans13 portation by water of passengers or cargo between the United 

14 States and a foreign country for compensation; 

15 ‘‘(ii) assumes responsibility for the transportation from the 

16 port or point of receipt to the port or point of destination; 

17 and 

18 ‘‘(iii) uses, for all or part of that transportation, a vessel 

19 operating on the high seas or the Great Lakes between a port 

20 in the United States and a port in a foreign country; but 

21 ‘‘(B) does not include a carrier engaged in ocean transportation 

22 by ferry boat, ocean tramp, or chemical parcel-tanker, or by vessel 

23 when primarily engaged in the carriage of perishable agricultural 

24 commodities— 

25 ‘‘(i) if the carrier and the owner of those commodities are 

26 wholly-owned, directly or indirectly, by a person primarily en27 gaged in the marketing and distribution of those commodities; 

28 and 

29 ‘‘(ii) only with respect to the carriage of those commodities. 

30 ‘‘(7) CONFERENCE.—The term ‘conference’— 

31 ‘‘(A) means an association of ocean common carriers permitted, 

32 pursuant to an approved or effective agreement, to engage in con33 certed activity and to use a common tariff; but 

34 ‘‘(B) does not include a joint service, consortium, pooling, sail35 ing, or transshipment agreement. 

36 ‘‘(8) CONTROLLED CARRIER.—The term ‘controlled carrier’ means 

37 an ocean common carrier that is, or whose operating assets are, di38 rectly or indirectly, owned or controlled by a government, with owner39 ship or control by a government being deemed to exist for a carrier 

40 if— 
48 

•HR 1442 IH 

1 ‘‘(A) a majority of the interest in the carrier is owned or con2 trolled in any manner by that government, an agency of that gov3 ernment, or a public or private person controlled by that govern4 ment; or 

5 ‘‘(B) that government has the right to appoint or disapprove the 

6 appointment of a majority of the directors, the chief operating of7 ficer, or the chief executive officer of the carrier. 

8 ‘‘(9) DEFERRED REBATE.—The term ‘deferred rebate’ means a re9 turn by a common carrier of any freight money to a shipper, where 

10 the return is— 

11 ‘‘(A) consideration for the shipper giving all or any portion of 

12 its shipments to that or any other common carrier over a fixed pe13 riod of time; 

14 ‘‘(B) deferred beyond the completion of the service for which it 

15 was paid; and 

16 ‘‘(C) made only if the shipper has agreed to make a further 

17 shipment with that or any other common carrier. 

18 ‘‘(10) FOREST PRODUCTS.—The term ‘forest products’ includes lum19 ber in bundles, rough timber, ties, poles, piling, laminated beams, bun20 dled siding, bundled plywood, bundled core stock or veneers, bundled 

21 particle or fiber boards, bundled hardwood, wood pulp in rolls, wood 

22 pulp in unitized bales, and paper and paper board in rolls or in pallet 

23 or skid-sized sheets. 

24 ‘‘(11) INLAND DIVISION.—The term ‘inland division’ means the 

25 amount paid by a common carrier to an inland carrier for the inland 

26 portion of through transportation offered to the public by the common 

27 carrier. 

28 ‘‘(12) INLAND PORTION.—The term ‘inland portion’ means the 

29 charge to the public by a common carrier for the non-ocean portion of 

30 through transportation. 

31 ‘‘(13) LOYALTY CONTRACT.—The term ‘loyalty contract’ means a 

32 contract with an ocean common carrier or agreement providing for— 

33 ‘‘(A) a shipper to obtain lower rates by committing all or a fixed 

34 portion of its cargo to that carrier or agreement; and 

35 ‘‘(B) a deferred rebate arrangement. 

36 ‘‘(14) MARINE TERMINAL OPERATOR.—The term ‘marine terminal 

37 operator’ means a person engaged in the United States in the business 

38 of providing wharfage, dock, warehouse, or other terminal facilities in 

39 connection with a common carrier, or in connection with a common car40 rier and a water carrier subject to subchapter II of chapter 135 of title 

41 49. 
49 

•HR 1442 IH 

1 ‘‘(15) MARITIME LABOR AGREEMENT.—The term ‘maritime labor 

2 agreement’— 

3 ‘‘(A) means— 

4 ‘‘(i) a collective bargaining agreement between an employer 

5 subject to this part, or a group of such employers, and a 

6 labor organization representing employees in the maritime or 

7 stevedoring industry; 

8 ‘‘(ii) an agreement preparatory to such a collective bar9 gaining agreement among members of a multi-employer bar10 gaining group; or 

11 ‘‘(iii) an agreement specifically implementing provisions of 

12 such a collective bargaining agreement or providing for the 

13 formation, financing, or administration of a multi-employer 

14 bargaining group; but 

15 ‘‘(B) does not include an assessment agreement. 

16 ‘‘(16) NON-VESSEL-OPERATING COMMON CARRIER.—The term ‘non17 vessel-operating common carrier’ means a common carrier that— 

18 ‘‘(A) does not operate the vessels by which the ocean transpor19 tation is provided; and 

20 ‘‘(B) is a shipper in its relationship with an ocean common car21 rier. 

22 ‘‘(17) OCEAN COMMON CARRIER.—The term ‘ocean common carrier’ 

23 means a vessel-operating common carrier. 

24 ‘‘(18) OCEAN FREIGHT FORWARDER.—The term ‘ocean freight for25 warder’ means a person that— 

26 ‘‘(A) in the United States, dispatches shipments from the 

27 United States via a common carrier and books or otherwise ar28 ranges space for those shipments on behalf of shippers; and 

29 ‘‘(B) processes the documentation or performs related activities 

30 incident to those shipments. 

31 ‘‘(19) OCEAN TRANSPORTATION INTERMEDIARY.—The term ‘ocean 

32 transportation intermediary’ means an ocean freight forwarder or a 

33 non-vessel-operating common carrier. 

34 ‘‘(20) SERVICE CONTRACT.—The term ‘service contract’ means a 

35 written contract, other than a bill of lading or receipt, between one or 

36 more shippers, on the one hand, and an individual ocean common car37 rier or an agreement between or among ocean common carriers, on the 

38 other, in which— 

39 ‘‘(A) the shipper or shippers commit to providing a certain vol40 ume or portion of cargo over a fixed time period; and 
50 

•HR 1442 IH 

1 ‘‘(B) the ocean common carrier or the agreement commits to a 

2 certain rate or rate schedule and a defined service level, such as 

3 assured space, transit time, port rotation, or similar service fea4 tures. 

5 ‘‘(21) SHIPMENT.—The term ‘shipment’ means all of the cargo car6 ried under the terms of a single bill of lading. 

7 ‘‘(22) SHIPPER.—The term ‘shipper’ means— 

8 ‘‘(A) a cargo owner; 

9 ‘‘(B) the person for whose account the ocean transportation of 

10 cargo is provided; 

11 ‘‘(C) the person to whom delivery is to be made; 

12 ‘‘(D) a shippers’ association; or 

13 ‘‘(E) a non-vessel-operating common carrier that accepts re14 sponsibility for payment of all charges applicable under the tariff 

15 or service contract. 

16 ‘‘(23) SHIPPERS’ ASSOCIATION.—The term ‘shippers’ association’ 

17 means a group of shippers that consolidates or distributes freight on 

18 a nonprofit basis for the members of the group to obtain carload, 

19 truckload, or other volume rates or service contracts. 

20 ‘‘(24) THROUGH RATE.—The term ‘through rate’ means the single 

21 amount charged by a common carrier in connection with through trans22 portation. 

23 ‘‘(25) THROUGH TRANSPORTATION.—The term ‘through transpor24 tation’ means continuous transportation between origin and destination 

25 for which a through rate is assessed and which is offered or performed 

26 by one or more carriers, at least one of which is a common carrier, 

27 between a United States port or point and a foreign port or point. 

28 ‘‘§ 40103. Administrative exemptions 

29 ‘‘(a) IN GENERAL.—The Federal Maritime Commission, on application or 

30 its own motion, may by order or regulation exempt for the future any class 

31 of agreements between persons subject to this part or any specified activity 

32 of those persons from any requirement of this part if the Commission finds 

33 that the exemption will not result in substantial reduction in competition 

34 or be detrimental to commerce. The Commission may attach conditions to 

35 an exemption and may, by order, revoke an exemption. 

36 ‘‘(b) OPPORTUNITY FOR HEARING.—An order or regulation of exemption 

37 or revocation of an exemption may be issued only if the Commission has 

38 provided an opportunity for a hearing to interested persons and depart39 ments and agencies of the United States Government. 
51 

•HR 1442 IH 

1 ‘‘§ 40104. Reports filed with the Commission 

2 ‘‘(a) IN GENERAL.—The Federal Maritime Commission may require a 

3 common carrier or an officer, receiver, trustee, lessee, agent, or employee 

4 of the carrier to file with the Commission a periodical or special report, an 

5 account, record, rate, or charge, or a memorandum of facts and transactions 

6 related to the business of the carrier. The report, account, record, rate, 

7 charge, or memorandum shall be made under oath if the Commission re8 quires, and shall be filed in the form and within the time prescribed by the 

9 Commission. 

10 ‘‘(b) CONFERENCE MINUTES.—Conference minutes required to be filed 

11 with the Commission under this section may not be released to third parties 

12 or published by the Commission. 

13 ‘‘CHAPTER 403—AGREEMENTS 

‘‘Sec. 

‘‘40301. Application. 

‘‘40302. Filing requirements. 

‘‘40303. Content requirements. 

‘‘40304. Commission action. 

‘‘40305. Assessment agreements. 

‘‘40306. Nondisclosure of information. 

‘‘40307. Exemption from antitrust laws. 

14 ‘‘§ 40301. Application 

15 ‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—This part applies to an 

16 agreement between or among ocean common carriers to— 

17 ‘‘(1) discuss, fix, or regulate transportation rates, including through 

18 rates, cargo space accommodations, and other conditions of service; 

19 ‘‘(2) pool or apportion traffic, revenues, earnings, or losses; 

20 ‘‘(3) allot ports or regulate the number and character of voyages be21 tween ports; 

22 ‘‘(4) regulate the volume or character of cargo or passenger traffic 

23 to be carried; 

24 ‘‘(5) engage in an exclusive, preferential, or cooperative working ar25 rangement between themselves or with a marine terminal operator; 

26 ‘‘(6) control, regulate, or prevent competition in international ocean 

27 transportation; or 

28 ‘‘(7) discuss and agree on any matter related to a service contract. 

29 ‘‘(b) MARINE TERMINAL OPERATOR AGREEMENTS.—This part applies to 

30 an agreement between or among marine terminal operators, or between or 

31 among one or more marine terminal operators and one or more ocean com32 mon carriers, to— 

33 ‘‘(1) discuss, fix, or regulate rates or other conditions of service; or 

34 ‘‘(2) engage in exclusive, preferential, or cooperative working ar35 rangements, to the extent the agreement involves ocean transportation 

36 in the foreign commerce of the United States. 
52 

•HR 1442 IH 

1 ‘‘(c) ACQUISITIONS.—This part does not apply to an acquisition by any 

2 person, directly or indirectly, of any voting security or assets of any other 

3 person. 

4 ‘‘(d) MARITIME LABOR AGREEMENTS.—This part does not apply to a 

5 maritime labor agreement. However, this subsection does not exempt from 

6 this part any rate, charge, regulation, or practice of a common carrier that 

7 is required to be set forth in a tariff or is an essential term of a service 

8 contract, whether or not the rate, charge, regulation, or practice arises out 

9 of, or is otherwise related to, a maritime labor agreement. 

10 ‘‘(e) ASSESSMENT AGREEMENTS.—This part (except sections 40305 and 

11 40307(a)) does not apply to an assessment agreement. 

12 ‘‘§ 40302. Filing requirements 

13 ‘‘(a) IN GENERAL.—A true copy of every agreement referred to in section 

14 40301(a) or (b) of this title shall be filed with the Federal Maritime Com15 mission. If the agreement is oral, a complete memorandum specifying in de16 tail the substance of the agreement shall be filed. 

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

18 ‘‘(1) an agreement related to transportation to be performed within 

19 or between foreign countries; or 

20 ‘‘(2) an agreement among common carriers to establish, operate, or 

21 maintain a marine terminal in the United States. 

22 ‘‘(c) REGULATIONS.—The Commission may by regulation prescribe the 

23 form and manner in which an agreement shall be filed and any additional 

24 information and documents necessary to evaluate the agreement. 

25 ‘‘§ 40303. Content requirements 

26 ‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.— 

27 ‘‘(1) RESTRICTIONS.—An ocean common carrier agreement may 

28 not— 

29 ‘‘(A) prohibit or restrict a member of the agreement from en30 gaging in negotiations for a service contract with a shipper; 

31 ‘‘(B) require a member of the agreement to disclose a negotia32 tion on a service contract, or the terms of a service contract, other 

33 than those terms required to be published under section 40502(d) 

34 of this title; or 

35 ‘‘(C) adopt mandatory rules or requirements affecting the right 

36 of an agreement member to negotiate and enter into a service con37 tract. 

38 ‘‘(2) VOLUNTARY GUIDELINES.—An ocean common carrier agree39 ment may provide authority to adopt voluntary guidelines relating to 

40 the terms and procedures of an agreement member’s service contracts 

41 if the guidelines explicitly state the right of members of the agreement 
53 

•HR 1442 IH 

1 not to follow the guidelines. Any guidelines adopted shall be submitted 

2 confidentially to the Federal Maritime Commission. 

3 ‘‘(b) CONFERENCE AGREEMENTS.—Each conference agreement must— 

4 ‘‘(1) state its purpose; 

5 ‘‘(2) provide reasonable and equal terms for admission and readmis6 sion to conference membership for any ocean common carrier willing 

7 to serve the particular trade or route; 

8 ‘‘(3) permit any member to withdraw from conference membership 

9 on reasonable notice without penalty; 

10 ‘‘(4) at the request of any member, require an independent neutral 

11 body to police fully the obligations of the conference and its members; 

12 ‘‘(5) prohibit the conference from engaging in conduct prohibited by 

13 section 41105(1) or (3) of this title; 

14 ‘‘(6) provide for a consultation process designed to promote— 

15 ‘‘(A) commercial resolution of disputes; and 

16 ‘‘(B) cooperation with shippers in preventing and eliminating 

17 malpractices; 

18 ‘‘(7) establish procedures for promptly and fairly considering re19 quests and complaints of shippers; and 

20 ‘‘(8) provide that— 

21 ‘‘(A) any member of the conference may take independent ac22 tion on a rate or service item on not more than 5 days’ notice to 

23 the conference; and 

24 ‘‘(B) except for an exempt commodity not published in the con25 ference tariff, the conference will include the new rate or service 

26 item in its tariff for use by that member, effective no later than 

27 5 days after receipt of the notice, and by any other member that 

28 notifies the conference that it elects to adopt the independent rate 

29 or service item on or after its effective date, in lieu of the existing 

30 conference tariff provision for that rate or service item. 

31 ‘‘(c) INTERCONFERENCE AGREEMENTS.—Each agreement between car32 riers not members of the same conference must provide the right of inde33 pendent action for each carrier. Each agreement between conferences must 

34 provide the right of independent action for each conference. 

35 ‘‘(d) VESSEL SHARING AGREEMENTS.— 

36 ‘‘(1) IN GENERAL.—An ocean common carrier that is the owner, op37 erator, or bareboat, time, or slot charterer of a liner vessel documented 

38 under section 12103 or 12111(c) of this title may agree with an ocean 

39 common carrier described in paragraph (2) to which it charters or sub40 charters the vessel or space on the vessel that the charterer or 
54 

•HR 1442 IH 

1 subcharterer may not use or make available space on the vessel for the 

2 carriage of cargo reserved by law for United States documented vessels. 

3 ‘‘(2) CARRIER DESCRIBED.—An ocean common carrier described in 

4 this paragraph is one that is not the owner, operator, or bareboat 

5 charterer for at least one year of United States documented liner ves6 sels that are eligible to be included in the Maritime Security Fleet Pro7 gram and are enrolled in an Emergency Preparedness Program under 

8 chapter 531 of this title. 

9 ‘‘§ 40304. Commission action 

10 ‘‘(a) NOTICE OF FILING.—Within 7 days after an agreement is filed, the 

11 Federal Maritime Commission shall transmit a notice of the filing to the 

12 Federal Register for publication. 

13 ‘‘(b) PRELIMINARY REVIEW AND REJECTION.—After preliminary review, 

14 the Commission shall reject an agreement that it finds does not meet the 

15 requirements of sections 40302 and 40303 of this title. The Commission 

16 shall notify in writing the person filing the agreement of the reason for re17 jection. 

18 ‘‘(c) REVIEW AND EFFECTIVE DATE.—Unless rejected under subsection 

19 (b), an agreement (other than an assessment agreement) is effective— 

20 ‘‘(1) on the 45th day after filing, or on the 30th day after notice 

21 of the filing is published in the Federal Register, whichever is later; 

22 or 

23 ‘‘(2) if additional information or documents are requested under sub24 section (d)— 

25 ‘‘(A) on the 45th day after the Commission receives all the addi26 tional information and documents; or 

27 ‘‘(B) if the request is not fully complied with, on the 45th day 

28 after the Commission receives the information and documents sub29 mitted and a statement of the reasons for noncompliance with the 

30 request. 

31 ‘‘(d) REQUEST FOR ADDITIONAL INFORMATION.—Before the expiration of 

32 the period specified in subsection (c)(1), the Commission may request from 

33 the person filing the agreement any additional information and documents 

34 the Commission considers necessary to make the determinations required by 

35 this section. 

36 ‘‘(e) MODIFICATION OF REVIEW PERIOD.— 

37 ‘‘(1) SHORTENING.—On request of the party filing an agreement, 

38 the Commission may shorten a period specified in subsection (c), but 

39 not to a date that is less than 14 days after notice of the filing of the 

40 agreement is published in the Federal Register. 
55 

•HR 1442 IH 

1 ‘‘(2) EXTENSION.—The period specified in subsection (c)(2) may be 

2 extended only by the United States District Court for the District of 

3 Columbia in a civil action brought by the Commission under section 

4 41307(c) of this title. 

5 ‘‘(f) FIXED TERMS.—The Commission may not limit the effectiveness of 

6 an agreement to a fixed term. 

7 ‘‘§ 40305. Assessment agreements 

8 ‘‘(a) FILING REQUIREMENT.—An assessment agreement shall be filed 

9 with the Federal Maritime Commission and is effective on filing. 

10 ‘‘(b) COMPLAINTS.—If a complaint is filed with the Commission within 

11 2 years after the date of an assessment agreement, the Commission shall 

12 disapprove, cancel, or modify the agreement, or an assessment or charge 

13 pursuant to the agreement, that the Commission finds, after notice and op14 portunity for a hearing, to be unjustly discriminatory or unfair as between 

15 carriers, shippers, or ports. The Commission shall issue its final decision in 

16 the proceeding within one year after the date the complaint is filed. 

17 ‘‘(c) ADJUSTMENTS OF ASSESSMENTS AND CHARGES.—To the extent 

18 that the Commission finds under subsection (b) that an assessment or 

19 charge is unjustly discriminatory or unfair as between carriers, shippers, or 

20 ports, the Commission shall adjust the assessment or charge for the period 

21 between the filing of the complaint and the final decision by awarding pro22 spective credits or debits to future assessments and charges. However, if the 

23 complainant has ceased activities subject to the assessment or charge, the 

24 Commission may award reparations. 

25 ‘‘§ 40306. Nondisclosure of information 

26 ‘‘Information and documents (other than an agreement) filed with the 

27 Federal Maritime Commission under this chapter are exempt from disclo28 sure under section 552 of title 5 and may not be made public except as 

29 may be relevant to an administrative or judicial proceeding. This section 

30 does not prevent disclosure to either House of Congress or to a duly author31 ized committee or subcommittee of Congress. 

32 ‘‘§ 40307. Exemption from antitrust laws 

33 ‘‘(a) IN GENERAL.—The antitrust laws do not apply to— 

34 ‘‘(1) an agreement (including an assessment agreement) that has 

35 been filed and is effective under this chapter; 

36 ‘‘(2) an agreement that is exempt under section 40103 of this title 

37 from any requirement of this part; 

38 ‘‘(3) an agreement or activity within the scope of this part, whether 

39 permitted under or prohibited by this part, undertaken or entered into 

40 with a reasonable basis to conclude that it is— 
56 

•HR 1442 IH 

1 ‘‘(A) pursuant to an agreement on file with the Federal Mari2 time Commission and in effect when the activity takes place; or 

3 ‘‘(B) exempt under section 40103 of this title from any filing 

4 or publication requirement of this part; 

5 ‘‘(4) an agreement or activity relating to transportation services 

6 within or between foreign countries, whether or not via the United 

7 States, unless the agreement or activity has a direct, substantial, and 

8 reasonably foreseeable effect on the commerce of the United States; 

9 ‘‘(5) an agreement or activity relating to the foreign inland segment 

10 of through transportation that is part of transportation provided in a 

11 United States import or export trade; 

12 ‘‘(6) an agreement or activity to provide wharfage, dock, warehouse, 

13 or other terminal facilities outside the United States; or 

14 ‘‘(7) an agreement, modification, or cancellation approved before 

15 June 18, 1984, by the Commission under section 15 of the Shipping 

16 Act, 1916, or permitted under section 14b of that Act, and any prop17 erly published tariff, rate, fare, or charge, or classification, rule, or reg18 ulation explanatory thereof implementing that agreement, modification, 

19 or cancellation. 

20 ‘‘(b) EXCEPTIONS.—This part does not extend antitrust immunity to— 

21 ‘‘(1) an agreement with or among air carriers, rail carriers, motor 

22 carriers, or common carriers by water not subject to this part relating 

23 to transportation within the United States; 

24 ‘‘(2) a discussion or agreement among common carriers subject to 

25 this part relating to the inland divisions (as opposed to the inland por26 tions) of through rates within the United States; 

27 ‘‘(3) an agreement among common carriers subject to this part to 

28 establish, operate, or maintain a marine terminal in the United States; 

29 or 

30 ‘‘(4) a loyalty contract. 

31 ‘‘(c) RETROACTIVE EFFECT OF DETERMINATIONS.—A determination by 

32 an agency or court that results in the denial or removal of the immunity 

33 to the antitrust laws under subsection (a) does not remove or alter the anti34 trust immunity for the period before the determination. 

35 ‘‘(d) RELIEF UNDER CLAYTON ACT.—A person may not recover damages 

36 under section 4 of the Clayton Act (15 U.S.C. 15), or obtain injunctive re37 lief under section 16 of that Act (15 U.S.C. 26), for conduct prohibited by 

38 this part. 

39 ‘‘CHAPTER 405—TARIFFS, SERVICE CONTRACTS, 

40 REFUNDS, AND WAIVERS 

‘‘Sec. 

‘‘40501. General rate and tariff requirements. 
57 

•HR 1442 IH 

‘‘40502. Service contracts. 

‘‘40503. Refunds and waivers. 

1 ‘‘§ 40501. General rate and tariff requirements 

2 ‘‘(a) AUTOMATED TARIFF SYSTEM.— 

3 ‘‘(1) IN GENERAL.—Each common carrier and conference shall keep 

4 open to public inspection in an automated tariff system, tariffs showing 

5 all its rates, charges, classifications, rules, and practices between all 

6 points or ports on its own route and on any through transportation 

7 route that has been established. However, a common carrier is not re8 quired to state separately or otherwise reveal in tariffs the inland divi9 sions of a through rate. 

10 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply with respect to 

11 bulk cargo, forest products, recycled metal scrap, new assembled motor 

12 vehicles, waste paper, or paper waste. 

13 ‘‘(b) CONTENTS OF TARIFFS.—A tariff under subsection (a) shall— 

14 ‘‘(1) state the places between which cargo will be carried; 

15 ‘‘(2) list each classification of cargo in use; 

16 ‘‘(3) state the level of compensation, if any, of any ocean freight for17 warder by a carrier or conference; 

18 ‘‘(4) state separately each terminal or other charge, privilege, or fa19 cility under the control of the carrier or conference and any rules that 

20 in any way change, affect, or determine any part or the total of the 

21 rates or charges; 

22 ‘‘(5) include sample copies of any bill of lading, contract of affreight23 ment, or other document evidencing the transportation agreement; and 

24 ‘‘(6) include copies of any loyalty contract, omitting the shipper’s 

25 name. 

26 ‘‘(c) ELECTRONIC ACCESS.—A tariff under subsection (a) shall be made 

27 available electronically to any person, without time, quantity, or other limi28 tation, through appropriate access from remote locations. A reasonable fee 

29 may be charged for such access, except that no fee may be charged for ac30 cess by a Federal agency. 

31 ‘‘(d) TIME-VOLUME RATES.—A rate contained in a tariff under sub32 section (a) may vary with the volume of cargo offered over a specified period 

33 of time. 

34 ‘‘(e) EFFECTIVE DATES.— 

35 ‘‘(1) INCREASES.—A new or initial rate or change in an existing rate 

36 that results in an increased cost to a shipper may not become effective 

37 earlier than 30 days after publication. However, for good cause, the 

38 Federal Maritime Commission may allow the rate to become effective 

39 sooner. 
58 

•HR 1442 IH 

1 ‘‘(2) DECREASES.—A change in an existing rate that results in a de2 creased cost to a shipper may become effective on publication. 

3 ‘‘(f) MARINE TERMINAL OPERATOR SCHEDULES.—A marine terminal op4 erator may make available to the public a schedule of rates, regulations, and 

5 practices, including limitations of liability for cargo loss or damage, per6 taining to receiving, delivering, handling, or storing property at its marine 

7 terminal. Any such schedule made available to the public is enforceable by 

8 an appropriate court as an implied contract without proof of actual knowl9 edge of its provisions. 

10 ‘‘(g) REGULATIONS.— 

11 ‘‘(1) IN GENERAL.—The Commission shall by regulation prescribe 

12 the requirements for the accessibility and accuracy of automated tariff 

13 systems established under this section. The Commission, after periodic 

14 review, may prohibit the use of any automated tariff system that fails 

15 to meet the requirements established under this section. 

16 ‘‘(2) REMOTE TERMINALS.—The Commission may not require a 

17 common carrier to provide a remote terminal for electronic access 

18 under subsection (c). 

19 ‘‘(3) MARINE TERMINAL OPERATOR SCHEDULES.—The Commission 

20 shall by regulation prescribe the form and manner in which marine ter21 minal operator schedules authorized by this section shall be published. 

22 ‘‘§ 40502. Service contracts 

23 ‘‘(a) IN GENERAL.—An individual ocean common carrier or an agreement 

24 between or among ocean common carriers may enter into a service contract 

25 with one or more shippers subject to the requirements of this part. 

26 ‘‘(b) FILING REQUIREMENTS.— 

27 ‘‘(1) IN GENERAL.—Each service contract entered into under this 

28 section by an individual ocean common carrier or an agreement shall 

29 be filed confidentially with the Federal Maritime Commission. 

30 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply to contracts re31 garding bulk cargo, forest products, recycled metal scrap, new assem32 bled motor vehicles, waste paper, or paper waste. 

33 ‘‘(c) ESSENTIAL TERMS.—Each service contract shall include— 

34 ‘‘(1) the origin and destination port ranges; 

35 ‘‘(2) the origin and destination geographic areas in the case of 

36 through intermodal movements; 

37 ‘‘(3) the commodities involved; 

38 ‘‘(4) the minimum volume or portion; 

39 ‘‘(5) the line-haul rate; 

40 ‘‘(6) the duration; 

41 ‘‘(7) service commitments; and 
59 

•HR 1442 IH 

1 ‘‘(8) the liquidated damages for nonperformance, if any. 

2 ‘‘(d) PUBLICATION OF CERTAIN TERMS.—When a service contract is filed 

3 confidentially with the Commission, a concise statement of the essential 

4 terms specified in paragraphs (1), (3), (4), and (6) of subsection (c) shall 

5 be published and made available to the general public in tariff format. 

6 ‘‘(e) DISCLOSURE OF CERTAIN TERMS.— 

7 ‘‘(1) DEFINITIONS.—In this subsection, the terms ‘dock area’ and 

8 ‘within the port area’ have the same meaning and scope as in the appli9 cable collective bargaining agreement between the requesting labor or10 ganization and the carrier. 

11 ‘‘(2) DISCLOSURE.—An ocean common carrier that is a party to or 

12 is otherwise subject to a collective bargaining agreement with a labor 

13 organization shall, in response to a written request by the labor organi14 zation, state whether it is responsible for the following work at a dock 

15 area or within a port area in the United States with respect to cargo 

16 transportation under a service contract: 

17 ‘‘(A) The movement of the shipper’s cargo on a dock area or 

18 within the port area or to or from railroad cars on a dock area 

19 or within the port area. 

20 ‘‘(B) The assignment of intraport carriage of the shipper’s 

21 cargo between areas on a dock or within the port area. 

22 ‘‘(C) The assignment of the carriage of the shipper’s cargo be23 tween a container yard on a dock area or within the port area and 

24 a rail yard adjacent to the container yard. 

25 ‘‘(D) The assignment of container freight station work and con26 tainer maintenance and repair work performed at a dock area or 

27 within the port area. 

28 ‘‘(3) WITHIN REASONABLE TIME.—The common carrier shall provide 

29 the information described in paragraph (2) to the requesting labor or30 ganization within a reasonable period of time. 

31 ‘‘(4) EXISTENCE OF COLLECTIVE BARGAINING AGREEMENT.—This 

32 subsection does not require the disclosure of information by an ocean 

33 common carrier unless there exists an applicable and otherwise lawful 

34 collective bargaining agreement pertaining to that carrier. A disclosure 

35 by an ocean common carrier may not be deemed an admission or an 

36 agreement that any work is covered by a collective bargaining agree37 ment. A dispute about whether any work is covered by a collective bar38 gaining agreement and the responsibility of an ocean common carrier 

39 under a collective bargaining agreement shall be resolved solely in ac40 cordance with the dispute resolution procedures contained in the collec-
60 

•HR 1442 IH 

1 tive bargaining agreement and the National Labor Relations Act (29 

2 U.S.C. 151 et seq.), and without reference to this subsection. 

3 ‘‘(5) EFFECT UNDER OTHER LAWS.—This subsection does not affect 

4 the lawfulness or unlawfulness under this part or any other Federal or 

5 State law of any collective bargaining agreement or element thereof, in6 cluding any element that constitutes an essential term of a service con7 tract. 

8 ‘‘(f) REMEDY FOR BREACH.—Unless the parties agree otherwise, the ex9 clusive remedy for a breach of a service contract is an action in an appro10 priate court. The contract dispute resolution forum may not be controlled 

11 by or in any way affiliated with a controlled carrier or by the government 

12 that owns or controls the carrier. 

13 ‘‘§ 40503. Refunds and waivers 

14 ‘‘The Federal Maritime Commission, on application of a carrier or ship15 per, may permit a common carrier or conference to refund a portion of the 

16 freight charges collected from a shipper, or to waive collection of a portion 

17 of the charges from a shipper, if— 

18 ‘‘(1) there is an error in a tariff, a failure to publish a new tariff, 

19 or an error in quoting a tariff, and the refund or waiver will not result 

20 in discrimination among shippers, ports, or carriers; 

21 ‘‘(2) the common carrier or conference, before filing an application 

22 for authority to refund or waive any charges for an error in a tariff 

23 or a failure to publish a tariff, has published a new tariff setting forth 

24 the rate on which the refund or waiver would be based; and 

25 ‘‘(3) the application for the refund or waiver is filed with the Com26 mission within 180 days from the date of shipment. 

27 ‘‘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. 

28 ‘‘§ 40701. Rates 

29 ‘‘(a) IN GENERAL.—A controlled carrier may not— 

30 ‘‘(1) maintain a rate or charge in a tariff or service contract, or 

31 charge or assess a rate, that is below a just and reasonable level; or 

32 ‘‘(2) establish, maintain, or enforce in a tariff or service contract a 

33 classification, rule, or regulation that results, or is likely to result, in 

34 the carriage or handling of cargo at a rate or charge that is below a 

35 just and reasonable level. 

36 ‘‘(b) COMMISSION PROHIBITION.—The Federal Maritime Commission, at 

37 any time after notice and opportunity for a hearing, may prohibit the publi-
61 

•HR 1442 IH 

1 cation or use of a rate, charge, classification, rule, or regulation that a con2 trolled carrier has failed to demonstrate is just and reasonable. 

3 ‘‘(c) BURDEN OF PROOF.—In a proceeding under this section, the burden 

4 of proof is on the controlled carrier to demonstrate that its rate, charge, 

5 classification, rule, or regulation is just and reasonable. 

6 ‘‘(d) VOIDNESS.—A rate, charge, classification, rule, or regulation that 

7 has been suspended or prohibited by the Commission is void and its use is 

8 unlawful. 

9 ‘‘§ 40702. Rate standards 

10 ‘‘(a) DEFINITION.—In this section, the term ‘constructive costs’ means 

11 the costs of another carrier, other than a controlled carrier, operating simi12 lar vessels and equipment in the same or a similar trade. 

13 ‘‘(b) STANDARDS.—In determining whether a rate, charge, classification, 

14 rule, or regulation of a controlled carrier is just and reasonable, the Federal 

15 Maritime Commission— 

16 ‘‘(1) shall take into account whether the rate or charge that has been 

17 published or assessed, or that would result from the pertinent classi18 fication, rule, or regulation, is below a level that is fully compensatory 

19 to the controlled carrier based on the carrier’s actual costs or construc20 tive costs; and 

21 ‘‘(2) may take into account other appropriate factors, including 

22 whether the rate, charge, classification, rule, or regulation is— 

23 ‘‘(A) the same as, or similar to, those published or assessed by 

24 other carriers in the same trade; 

25 ‘‘(B) required to ensure movement of particular cargo in the 

26 same trade; or 

27 ‘‘(C) required to maintain acceptable continuity, level, or quality 

28 of common carrier service to or from affected ports. 

29 ‘‘§ 40703. Effective date of rates 

30 ‘‘Notwithstanding section 40501(e) of this title and except for service 

31 contracts, a rate, charge, classification, rule, or regulation of a controlled 

32 carrier may not become effective, without special permission of the Federal 

33 Maritime Commission, until the 30th day after publication. 

34 ‘‘§ 40704. Commission review 

35 ‘‘(a) REQUEST FOR JUSTIFICATION.—On request of the Federal Maritime 

36 Commission, a controlled carrier shall file with the Commission, within 20 

37 days of the request, a statement of justification that sufficiently details the 

38 carrier’s need and purpose for an existing or proposed rate, charge, classi39 fication, rule, or regulation and upon which the Commission may reasonably 

40 base a determination of its lawfulness. 
62 

•HR 1442 IH 

1 ‘‘(b) DETERMINATION.—Within 120 days after receipt of information re2 quested under subsection (a), the Commission shall determine whether the 

3 rate, charge, classification, rule, or regulation may be unjust and unreason4 able. 

5 ‘‘(c) SHOW CAUSE ORDER.—Whenever the Commission is of the opinion 

6 that a rate, charge, classification, rule, or regulation published or assessed 

7 by a controlled carrier may be unjust and unreasonable, the Commission 

8 shall issue an order to the controlled carrier to show cause why the rate, 

9 charge, classification, rule, or regulation should not be prohibited. 

10 ‘‘(d) SUSPENSION PENDING DETERMINATION.— 

11 ‘‘(1) NOT YET EFFECTIVE.—Pending a determination of the lawful12 ness of a rate, charge, classification, rule, or regulation in a proceeding 

13 under subsection (c), the Commission may suspend the rate, charge, 

14 classification, rule, or regulation at any time before its effective date. 

15 ‘‘(2) ALREADY EFFECTIVE.—If a rate, charge, classification, rule, or 

16 regulation has already become effective, the Commission, on issuance 

17 of an order to show cause, may suspend the rate, charge, classification, 

18 rule, or regulation on at least 30 days’ notice to the controlled carrier. 

19 ‘‘(3) MAXIMUM SUSPENSION.—A period of suspension under this 

20 subsection may not exceed 180 days. 

21 ‘‘(e) REPLACEMENT DURING SUSPENSION.—Whenever the Commission 

22 has suspended a rate, charge, classification, rule, or regulation under this 

23 section, the controlled carrier may publish a new rate, charge, classification, 

24 rule, or regulation to take effect immediately during the suspension in lieu 

25 of the suspended rate, charge, classification, rule, or regulation. However, 

26 the Commission may reject the new rate, charge, classification, rule, or reg27 ulation if the Commission believes it is unjust and unreasonable. 

28 ‘‘§ 40705. Presidential review of Commission orders 

29 ‘‘(a) TRANSMISSION TO PRESIDENT.—The Federal Maritime Commission 

30 shall transmit to the President, concurrently with publication thereof, each 

31 order of suspension or final order of prohibition issued under section 40704 

32 of this title. 

33 ‘‘(b) PRESIDENTIAL REQUEST AND COMMISSION ACTION.—Within 10 

34 days after receipt or the effective date of a Commission order referred to 

35 in subsection (a), the President, in writing, may request the Commission to 

36 stay the effect of the order if the President finds that the stay is required 

37 for reasons of national defense or foreign policy. The reasons shall be speci38 fied in the request. The Commission shall immediately grant the request by 

39 issuing an order in which the President’s request shall be described. During 

40 a stay, the President shall, whenever practicable, attempt to resolve the 
63 

•HR 1442 IH 

1 matter by negotiating with representatives of the applicable foreign govern2 ments. 

3 ‘‘§ 40706. Exceptions 

4 ‘‘This chapter does not apply to— 

5 ‘‘(1) a controlled carrier of a foreign country whose vessels are enti6 tled by a treaty of the United States to receive national or most-fa7 vored-nation treatment; or 

8 ‘‘(2) a trade served only by controlled carriers. 

9 ‘‘CHAPTER 409—OCEAN TRANSPORTATION 

10 INTERMEDIARIES 

‘‘Sec. 

‘‘40901. License requirement. 

‘‘40902. Financial responsibility. 

‘‘40903. Suspension or revocation of license. 

‘‘40904. Compensation by common carriers. 

11 ‘‘§ 40901. License requirement 

12 ‘‘(a) IN GENERAL.—A person in the United States may not act as an 

13 ocean transportation intermediary unless the person holds an ocean trans14 portation intermediary’s license issued by the Federal Maritime Commis15 sion. The Commission shall issue a license to a person that the Commission 

16 determines to be qualified by experience and character to act as an ocean 

17 transportation intermediary. 

18 ‘‘(b) EXCEPTION.—A person whose primary business is the sale of mer19 chandise may forward shipments of the merchandise for its own account 

20 without an ocean transportation intermediary’s license. 

21 ‘‘§ 40902. Financial responsibility 

22 ‘‘(a) IN GENERAL.—A person may not act as an ocean transportation 

23 intermediary unless the person furnishes a bond, proof of insurance, or 

24 other surety— 

25 ‘‘(1) in a form and amount determined by the Federal Maritime 

26 Commission to insure financial responsibility; and 

27 ‘‘(2) issued by a surety company found acceptable by the Secretary 

28 of the Treasury. 

29 ‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A bond, insurance, or 

30 other surety obtained under this section— 

31 ‘‘(1) shall be available to pay any penalty assessed under section 

32 41109 of this title or any order for reparation issued under section 

33 41305 of this title; 

34 ‘‘(2) may be available to pay any claim against an ocean transpor35 tation intermediary arising from its transportation-related activities— 

36 ‘‘(A) with the consent of the insured ocean transportation inter37 mediary and subject to review by the surety company; or 
64 

•HR 1442 IH 

1 ‘‘(B) when the claim is deemed valid by the surety company 

2 after the ocean transportation intermediary has failed to respond 

3 to adequate notice to address the validity of the claim; and 

4 ‘‘(3) shall be available to pay any judgment for damages against an 

5 ocean transportation intermediary arising from its transportation-re6 lated activities, if the claimant has first attempted to resolve the claim 

7 under paragraph (2) and the claim has not been resolved within a rea8 sonable period of time. 

9 ‘‘(c) REGULATIONS ON COURT JUDGMENTS.—The Commission shall pre10 scribe regulations for the purpose of protecting the interests of claimants, 

11 ocean transportation intermediaries, and surety companies with respect to 

12 the process of pursuing claims against ocean transportation intermediary 

13 bonds, insurance, or sureties through court judgments. The regulations shall 

14 provide that a judgment for monetary damages may not be enforced except 

15 to the extent that the damages claimed arise from the transportation-related 

16 activities of the insured ocean transportation intermediary, as defined by the 

17 Commission. 

18 ‘‘(d) RESIDENT AGENT.—An ocean transportation intermediary not domi19 ciled in the United States shall designate a resident agent in the United 

20 States for receipt of service of judicial and administrative process, including 

21 subpoenas. 

22 ‘‘§ 40903. Suspension or revocation of license 

23 ‘‘(a) FAILURE TO MAINTAIN QUALIFICATIONS OR TO COMPLY.—The 

24 Federal Maritime Commission, after notice and opportunity for a hearing, 

25 shall suspend or revoke an ocean transportation intermediary’s license if the 

26 Commission finds that the ocean transportation intermediary— 

27 ‘‘(1) is not qualified to provide intermediary services; or 

28 ‘‘(2) willfully failed to comply with a provision of this part or with 

29 an order or regulation of the Commission. 

30 ‘‘(b) FAILURE TO MAINTAIN BOND, PROOF OF INSURANCE, OR OTHER

31 SURETY.—The Commission may revoke an ocean transportation 

32 intermediary’s license for failure to maintain a bond, proof of insurance, or 

33 other surety as required by section 40902(a) of this title. 

34 ‘‘§ 40904. Compensation by common carriers 

35 ‘‘(a) CERTIFICATION OF LICENSE AND SERVICES.—A common carrier 

36 may compensate an ocean freight forwarder for a shipment dispatched for 

37 others only when the ocean freight forwarder has certified in writing that 

38 it holds an ocean transportation intermediary’s license (if required under 

39 section 40901 of this title) and has— 
65 

•HR 1442 IH 

1 ‘‘(1) engaged, booked, secured, reserved, or contracted directly with 

2 the carrier or its agent for space aboard a vessel or confirmed the 

3 availability of the space; and 

4 ‘‘(2) prepared and processed the ocean bill of lading, dock receipt, 

5 or other similar document for the shipment. 

6 ‘‘(b) DUAL COMPENSATION.—A common carrier may not pay compensa7 tion for services described in subsection (a) more than once on the same 

8 shipment. 

9 ‘‘(c) BENEFICIAL INTEREST SHIPMENTS.—An ocean freight forwarder 

10 may not receive compensation from a common carrier for a shipment in 

11 which the ocean freight forwarder has a direct or indirect beneficial interest. 

12 A common carrier may not knowingly pay compensation on that shipment. 

13 ‘‘(d) LIMITS ON AUTHORITY OF CONFERENCE OR GROUP.—A conference 

14 or group of two or more ocean common carriers in the foreign commerce 

15 of the United States that is authorized to agree on the level of compensation 

16 paid to an ocean freight forwarder may not— 

17 ‘‘(1) deny a member of the conference or group the right, upon no18 tice of not more than 5 days, to take independent action on any level 

19 of compensation paid to an ocean freight forwarder; or 

20 ‘‘(2) agree to limit the payment of compensation to an ocean freight 

21 forwarder to less than 1.25 percent of the aggregate of all rates and 

22 charges applicable under a tariff and assessed against the cargo on 

23 which the services of the ocean freight forwarder are provided. 

24 ‘‘CHAPTER 411—PROHIBITIONS AND PENALTIES 

‘‘Sec. 

‘‘41101. Joint ventures and consortiums. 

‘‘41102. General prohibitions. 

‘‘41103. Disclosure of information. 

‘‘41104. Common carriers. 

‘‘41105. Concerted action. 

‘‘41106. Marine terminal operators. 

‘‘41107. Monetary penalties. 

‘‘41108. Additional penalties. 

‘‘41109. Assessment of penalties. 

25 ‘‘§ 41101. Joint ventures and consortiums 

26 ‘‘In this chapter, a joint venture or consortium of two or more common 

27 carriers operating as a single entity is deemed to be a single common car28 rier. 

29 ‘‘§ 41102. General prohibitions 

30 ‘‘(a) OBTAINING TRANSPORTATION AT LESS THAN APPLICABLE

31 RATES.—A person may not knowingly and willfully, directly or indirectly, 

32 by means of false billing, false classification, false weighing, false report of 

33 weight, false measurement, or any other unjust or unfair device or means, 

34 obtain or attempt to obtain ocean transportation for property at less than 

35 the rates or charges that would otherwise apply. 
66 

•HR 1442 IH 

1 ‘‘(b) OPERATING CONTRARY TO AGREEMENT.—A person may not operate 

2 under an agreement required to be filed under section 40302 or 40305 of 

3 this title if— 

4 ‘‘(1) the agreement has not become effective under section 40304 of 

5 this title or has been rejected, disapproved, or canceled; or 

6 ‘‘(2) the operation is not in accordance with the terms of the agree7 ment or any modifications to the agreement made by the Federal Mari8 time Commission. 

9 ‘‘(c) PRACTICES IN HANDLING PROPERTY.—A common carrier, marine 

10 terminal operator, or ocean transportation intermediary may not fail to es11 tablish, observe, and enforce just and reasonable regulations and practices 

12 relating to or connected with receiving, handling, storing, or delivering prop13 erty. 

14 ‘‘§ 41103. Disclosure of information 

15 ‘‘(a) PROHIBITION.—A common carrier, marine terminal operator, or 

16 ocean freight forwarder, either alone or in conjunction with any other per17 son, directly or indirectly, may not knowingly disclose, offer, solicit, or re18 ceive any information concerning the nature, kind, quantity, destination, 

19 consignee, or routing of any property tendered or delivered to a common 

20 carrier, without the consent of the shipper or consignee, if the informa21 tion— 

22 ‘‘(1) may be used to the detriment or prejudice of the shipper, the 

23 consignee, or any common carrier; or 

24 ‘‘(2) may improperly disclose its business transaction to a compet25 itor. 

26 ‘‘(b) EXCEPTIONS.—Subsection (a) does not prevent providing the infor27 mation— 

28 ‘‘(1) in response to legal process; 

29 ‘‘(2) to the Federal Maritime Commission or an agency of the 

30 United States Government; or 

31 ‘‘(3) to an independent neutral body operating within the scope of 

32 its authority to fulfill the policing obligations of the parties to an agree33 ment effective under this part. 

34 ‘‘(c) DISCLOSURE FOR DETERMINING BREACH OR COMPILING STATIS35 TICS.—An ocean common carrier that is a party to a conference agreement 

36 approved under this part, a receiver, trustee, lessee, agent, or employee of 

37 the carrier, or any other person authorized by the carrier to receive informa38 tion— 

39 ‘‘(1) may give information to the conference or any person or agency 

40 designated by the conference, for the purpose of— 
67 

•HR 1442 IH 

1 ‘‘(A) determining whether a shipper or consignee has breached 

2 an agreement with the conference or its member lines; 

3 ‘‘(B) determining whether a member of the conference has 

4 breached the conference agreement; or 

5 ‘‘(C) compiling statistics of cargo movement; and 

6 ‘‘(2) may not prevent the conference or its designee from soliciting 

7 or receiving information for any of those purposes. 

8 ‘‘§ 41104. Common carriers 

9 ‘‘A common carrier, either alone or in conjunction with any other person, 

10 directly or indirectly, may not— 

11 ‘‘(1) allow a person to obtain transportation for property at less than 

12 the rates or charges established by the carrier in its tariff or service 

13 contract by means of false billing, false classification, false weighing, 

14 false measurement, or any other unjust or unfair device or means; 

15 ‘‘(2) provide service in the liner trade that is— 

16 ‘‘(A) not in accordance with the rates, charges, classifications, 

17 rules, and practices contained in a tariff published or a service 

18 contract entered into under chapter 405 of this title, unless ex19 cepted or exempted under section 40103 or 40501(a)(2) of this 

20 title; or 

21 ‘‘(B) under a tariff or service contract that has been suspended 

22 or prohibited by the Federal Maritime Commission under chapter 

23 407 or 423 of this title; 

24 ‘‘(3) retaliate against a shipper by refusing, or threatening to refuse, 

25 cargo space accommodations when available, or resort to other unfair 

26 or unjustly discriminatory methods because the shipper has patronized 

27 another carrier, or has filed a complaint, or for any other reason; 

28 ‘‘(4) for service pursuant to a tariff, engage in any unfair or unjustly 

29 discriminatory practice in the matter of— 

30 ‘‘(A) rates or charges; 

31 ‘‘(B) cargo classifications; 

32 ‘‘(C) cargo space accommodations or other facilities, with due 

33 regard being given to the proper loading of the vessel and the 

34 available tonnage; 

35 ‘‘(D) loading and landing of freight; or 

36 ‘‘(E) adjustment and settlement of claims; 

37 ‘‘(5) for service pursuant to a service contract, engage in any unfair 

38 or unjustly discriminatory practice in the matter of rates or charges 

39 with respect to any port; 
68 

•HR 1442 IH 

1 ‘‘(6) use a vessel in a particular trade for the purpose of excluding, 

2 preventing, or reducing competition by driving another ocean common 

3 carrier out of that trade; 

4 ‘‘(7) offer or pay any deferred rebates; 

5 ‘‘(8) for service pursuant to a tariff, give any undue or unreasonable 

6 preference or advantage or impose any undue or unreasonable prejudice 

7 or disadvantage; 

8 ‘‘(9) for service pursuant to a service contract, give any undue or 

9 unreasonable preference or advantage or impose any undue or unrea10 sonable prejudice or disadvantage with respect to any port; 

11 ‘‘(10) unreasonably refuse to deal or negotiate; 

12 ‘‘(11) knowingly and willfully accept cargo from or transport cargo 

13 for the account of an ocean transportation intermediary that does not 

14 have a tariff as required by section 40501 of this title and a bond, in15 surance, or other surety as required by section 40902 of this title; or 

16 ‘‘(12) knowingly and willfully enter into a service contract with an 

17 ocean transportation intermediary that does not have a tariff as re18 quired by section 40501 of this title and a bond, insurance, or other 

19 surety as required by section 40902 of this title, or with an affiliate 

20 of such an ocean transportation intermediary. 

21 ‘‘§ 41105. Concerted action 

22 ‘‘A conference or group of two or more common carriers may not— 

23 ‘‘(1) boycott or take any other concerted action resulting in an un24 reasonable refusal to deal; 

25 ‘‘(2) engage in conduct that unreasonably restricts the use of inter26 modal services or technological innovations; 

27 ‘‘(3) engage in any predatory practice designed to eliminate the par28 ticipation, or deny the entry, in a particular trade of a common carrier 

29 not a member of the conference, a group of common carriers, an ocean 

30 tramp, or a bulk carrier; 

31 ‘‘(4) negotiate with a non-ocean carrier or group of non-ocean car32 riers (such as truck, rail, or air operators) on any matter relating to 

33 rates or services provided to ocean common carriers within the United 

34 States by those non-ocean carriers, unless the negotiations and any re35 sulting agreements are not in violation of the antitrust laws and are 

36 consistent with the purposes of this part, except that this paragraph 

37 does not prohibit the setting and publishing of a joint through rate by 

38 a conference, joint venture, or association of ocean common carriers; 

39 ‘‘(5) deny in the export foreign commerce of the United States com40 pensation to an ocean freight forwarder or limit that compensation to 

41 less than a reasonable amount; 
69 

•HR 1442 IH 

1 ‘‘(6) allocate shippers among specific carriers that are parties to the 

2 agreement or prohibit a carrier that is a party to the agreement from 

3 soliciting cargo from a particular shipper, except as— 

4 ‘‘(A) authorized by section 40303(d) of this title; 

5 ‘‘(B) required by the law of the United States or the importing 

6 or exporting country; or 

7 ‘‘(C) agreed to by a shipper in a service contract; 

8 ‘‘(7) for service pursuant to a service contract, engage in any un9 justly discriminatory practice in the matter of rates or charges with re10 spect to any locality, port, or person due to the person’s status as a 

11 shippers’ association or ocean transportation intermediary; or 

12 ‘‘(8) for service pursuant to a service contract, give any undue or 

13 unreasonable preference or advantage or impose any undue or unrea14 sonable prejudice or disadvantage with respect to any locality, port, or 

15 person due to the person’s status as a shippers’ association or ocean 

16 transportation intermediary. 

17 ‘‘§ 41106. Marine terminal operators 

18 ‘‘A marine terminal operator may not— 

19 ‘‘(1) agree with another marine terminal operator or with a common 

20 carrier to boycott, or unreasonably discriminate in the provision of ter21 minal services to, a common carrier or ocean tramp; 

22 ‘‘(2) give any undue or unreasonable preference or advantage or im23 pose any undue or unreasonable prejudice or disadvantage with respect 

24 to any person; or 

25 ‘‘(3) unreasonably refuse to deal or negotiate. 

26 ‘‘§ 41107. Monetary penalties 

27 ‘‘(a) IN GENERAL.—A person that violates this part or a regulation or 

28 order of the Federal Maritime Commission issued under this part is liable 

29 to the United States Government for a civil penalty. Unless otherwise pro30 vided in this part, the amount of the penalty may not exceed $5,000 for 

31 each violation or, if the violation was willfully and knowingly committed, 

32 $25,000 for each violation. Each day of a continuing violation is a separate 

33 violation. 

34 ‘‘(b) LIEN ON CARRIER’S VESSELS.—The amount of a civil penalty im35 posed on a common carrier under this section constitutes a lien on the ves36 sels operated by the carrier. Any such vessel is subject to an action in rem 

37 to enforce the lien in the district court of the United States for the district 

38 in which it is found. 

39 ‘‘§ 41108. Additional penalties 

40 ‘‘(a) SUSPENSION OF TARIFFS.—For a violation of section 41104(1), (2), 

41 or (7) of this title, the Federal Maritime Commission may suspend any or 
70 

•HR 1442 IH 

1 all tariffs of the common carrier, or that common carrier’s right to use any 

2 or all tariffs of conferences of which it is a member, for a period not to 

3 exceed 12 months. 

4 ‘‘(b) OPERATING UNDER SUSPENDED TARIFF.—A common carrier that 

5 accepts or handles cargo for carriage under a tariff that has been sus6 pended, or after its right to use that tariff has been suspended, is liable 

7 to the United States Government for a civil penalty of not more than 

8 $50,000 for each shipment. 

9 ‘‘(c) FAILURE TO PROVIDE INFORMATION.— 

10 ‘‘(1) PENALTIES.—If the Commission finds, after notice and oppor11 tunity for a hearing, that a common carrier has failed to supply infor12 mation ordered to be produced or compelled by subpoena under section 

13 41303 of this title, the Commission may— 

14 ‘‘(A) suspend any or all tariffs of the carrier or the carrier’s 

15 right to use any or all tariffs of conferences of which it is a mem16 ber; and 

17 ‘‘(B) request the Secretary of Homeland Security to refuse or 

18 revoke any clearance required for a vessel operated by the carrier, 

19 and when so requested, the Secretary shall refuse or revoke the 

20 clearance. 

21 ‘‘(2) DEFENSE BASED ON FOREIGN LAW.—If, in defense of its fail22 ure to comply with a subpoena or discovery order, a common carrier 

23 alleges that information or documents located in a foreign country can24 not be produced because of the laws of that country, the Commission 

25 shall immediately notify the Secretary of State of the failure to comply 

26 and of the allegation relating to foreign laws. On receiving the notifica27 tion, the Secretary of State shall promptly consult with the government 

28 of the nation within which the information or documents are alleged 

29 to be located for the purpose of assisting the Commission in obtaining 

30 the information or documents. 

31 ‘‘(d) IMPAIRING ACCESS TO FOREIGN TRADE.—If the Commission finds, 

32 after notice and opportunity for a hearing, that the action of a common car33 rier, acting alone or in concert with another person, or a foreign government 

34 has unduly impaired access of a vessel documented under the laws of the 

35 United States to ocean trade between foreign ports, the Commission shall 

36 take action that it finds appropriate, including imposing any of the penalties 

37 authorized by this section. The Commission also may take any of the actions 

38 authorized by sections 42304 and 42305 of this title. 

39 ‘‘(e) SUBMISSION OF ORDER TO PRESIDENT.—Before an order under this 

40 section becomes effective, it shall be submitted immediately to the President. 

41 The President, within 10 days after receiving it, may disapprove it if the 
71 

•HR 1442 IH 

1 President finds that disapproval is required for reasons of national defense 

2 or foreign policy. 

3 ‘‘§ 41109. Assessment of penalties 

4 ‘‘(a) GENERAL AUTHORITY.—Until a matter is referred to the Attorney 

5 General, the Federal Maritime Commission may, after notice and oppor6 tunity for a hearing, assess a civil penalty provided for in this part. The 

7 Commission may compromise, modify, or remit, with or without conditions, 

8 a civil penalty. 

9 ‘‘(b) FACTORS IN DETERMINING AMOUNT.—In determining the amount 

10 of a civil penalty, the Commission shall take into account the nature, cir11 cumstances, extent, and gravity of the violation committed and, with respect 

12 to the violator, the degree of culpability, history of prior offenses, ability to 

13 pay, and other matters justice may require. 

14 ‘‘(c) EXCEPTION.—A civil penalty may not be imposed for conspiracy to 

15 violate section 41102(a) or 41104(1) or (2) of this title or to defraud the 

16 Commission by concealing such a violation. 

17 ‘‘(d) PROHIBITED BASIS OF PENALTY.—The Commission or a court may 

18 not order a person to pay the difference between the amount billed and 

19 agreed upon in writing with a common carrier or its agent and the amount 

20 set forth in a tariff or service contract by that common carrier for the 

21 transportation service provided. 

22 ‘‘(e) TIME LIMIT.—A proceeding to assess a civil penalty under this sec23 tion must be commenced within 5 years after the date of the violation. 

24 ‘‘(f) REVIEW OF CIVIL PENALTY.—A person against whom a civil penalty 

25 is assessed under this section may obtain review under chapter 158 of title 

26 28. 

27 ‘‘(g) CIVIL ACTIONS TO COLLECT.—If a person does not pay an assess28 ment of a civil penalty after it has become final or after the appropriate 

29 court has entered final judgment in favor of the Commission, the Attorney 

30 General at the request of the Commission may seek to collect the amount 

31 assessed in an appropriate district court of the United States. The court 

32 shall enforce the order of the Commission unless it finds that the order was 

33 not regularly made and duly issued. 

34 ‘‘CHAPTER 413—ENFORCEMENT 

‘‘Sec. 

‘‘41301. Complaints. 

‘‘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. 
72 

•HR 1442 IH 

1 ‘‘§ 41301. Complaints 

2 ‘‘(a) IN GENERAL.—A person may file with the Federal Maritime Com3 mission a sworn complaint alleging a violation of this part, except section 

4 41307(b)(1). If the complaint is filed within 3 years after the claim accrues, 

5 the complainant may seek reparations for an injury to the complainant 

6 caused by the violation. 

7 ‘‘(b) NOTICE AND RESPONSE.—The Commission shall provide a copy of 

8 the complaint to the person named in the complaint. Within a reasonable 

9 time specified by the Commission, the person shall satisfy the complaint or 

10 answer it in writing. 

11 ‘‘(c) IF COMPLAINT NOT SATISFIED.—If the complaint is not satisfied, 

12 the Commission shall investigate the complaint in an appropriate manner 

13 and make an appropriate order. 

14 ‘‘§ 41302. Investigations 

15 ‘‘(a) IN GENERAL.—The Federal Maritime Commission, on complaint or 

16 its own motion, may investigate any conduct or agreement that the Commis17 sion believes may be in violation of this part. The Commission may by order 

18 disapprove, cancel, or modify any agreement that operates in violation of 

19 this part. 

20 ‘‘(b) EFFECTIVENESS OF AGREEMENT DURING INVESTIGATION.—Unless 

21 an injunction is issued under section 41306 or 41307 of this title, an agree22 ment under investigation by the Commission remains in effect until the 

23 Commission issues its order. 

24 ‘‘(c) DATE FOR DECISION.—Within 10 days after the initiation of a pro25 ceeding under this section or section 41301 of this title, the Commission 

26 shall set a date by which it will issue its final decision. The Commission 

27 by order may extend the date for good cause. 

28 ‘‘(d) SANCTIONS FOR DELAY.—If, within the period for final decision 

29 under subsection (c), the Commission determines that it is unable to issue 

30 a final decision because of undue delay caused by a party to the proceeding, 

31 the Commission may impose sanctions, including issuing a decision adverse 

32 to the delaying party. 

33 ‘‘(e) REPORT.—The Commission shall make a written report of every in34 vestigation under this part in which a hearing was held, stating its conclu35 sions, decisions, findings of fact, and order. The Commission shall provide 

36 a copy of the report to all parties and publish the report for public informa37 tion. A published report is competent evidence in a court of the United 

38 States. 

39 ‘‘§ 41303. Discovery and subpoenas 

40 ‘‘(a) IN GENERAL.—In an investigation or adjudicatory proceeding under 

41 this part— 
73 

•HR 1442 IH 

1 ‘‘(1) the Federal Maritime Commission may subpoena witnesses and 

2 evidence; and 

3 ‘‘(2) a party may use depositions, written interrogatories, and dis4 covery procedures under regulations prescribed by the Commission 

5 that, to the extent practicable, shall conform to the Federal Rules of 

6 Civil Procedure (28 App. U.S.C.). 

7 ‘‘(b) WITNESS FEES.—Unless otherwise prohibited by law, a witness is 

8 entitled to the same fees and mileage as in the courts of the United States. 

9 ‘‘§ 41304. Hearings and orders 

10 ‘‘(a) OPPORTUNITY FOR HEARING.—The Federal Maritime Commission 

11 shall provide an opportunity for a hearing before issuing an order relating 

12 to a violation of this part or a regulation prescribed under this part. 

13 ‘‘(b) MODIFICATION OF ORDER.—The Commission may reverse, suspend, 

14 or modify any of its orders. 

15 ‘‘(c) REHEARING.—On application of a party to a proceeding, the Com16 mission may grant a rehearing of the same or any matter determined in 

17 the proceeding. Except by order of the Commission, a rehearing does not 

18 operate as a stay of an order. 

19 ‘‘(d) PERIOD OF EFFECTIVENESS.—An order of the Commission remains 

20 in effect for the period specified in the order or until suspended, modified, 

21 or set aside by the Commission or a court of competent jurisdiction. 

22 ‘‘§ 41305. Award of reparations 

23 ‘‘(a) DEFINITION.—In this section, the term ‘actual injury’ includes the 

24 loss of interest at commercial rates compounded from the date of injury. 

25 ‘‘(b) BASIC AMOUNT.—If the complaint was filed within the period speci26 fied in section 41301(a) of this title, the Federal Maritime Commission shall 

27 direct the payment of reparations to the complainant for actual injury 

28 caused by a violation of this part, plus reasonable attorney fees. 

29 ‘‘(c) ADDITIONAL AMOUNTS.—On a showing that the injury was caused 

30 by an activity prohibited by section 41102(b), 41104(3) or (6), or 41105(1) 

31 or (3) of this title, the Commission may order the payment of additional 

32 amounts, but the total recovery of a complainant may not exceed twice the 

33 amount of the actual injury. 

34 ‘‘(d) DIFFERENCE BETWEEN RATES.—If the injury was caused by an ac35 tivity prohibited by section 41104(4)(A) or (B) of this title, the amount of 

36 the injury shall be the difference between the rate paid by the injured ship37 per and the most favorable rate paid by another shipper. 

38 ‘‘§ 41306. Injunctive relief sought by complainants 

39 ‘‘(a) IN GENERAL.—After filing a complaint with the Federal Maritime 

40 Commission under section 41301 of this title, the complainant may bring 
74 

•HR 1442 IH 

1 a civil action in a district court of the United States to enjoin conduct in 

2 violation of this part. 

3 ‘‘(b) VENUE.—The action must be brought in the judicial district in 

4 which— 

5 ‘‘(1) the Commission has brought a civil action against the defendant 

6 under section 41307(a) of this title; or 

7 ‘‘(2) the defendant resides or transacts business, if the Commission 

8 has not brought such an action. 

9 ‘‘(c) REMEDIES BY COURT.—After notice to the defendant, and a showing 

10 that the standards for granting injunctive relief by courts of equity are met, 

11 the court may grant a temporary restraining order or preliminary injunction 

12 for a period not to exceed 10 days after the Commission has issued an order 

13 disposing of the complaint. 

14 ‘‘(d) ATTORNEY FEES.—A defendant prevailing in a civil action under 

15 this section shall be allowed reasonable attorney fees to be assessed and col16 lected as part of the costs of the action. 

17 ‘‘§ 41307. Injunctive relief sought by the Commission 

18 ‘‘(a) GENERAL VIOLATIONS.—In connection with an investigation under 

19 section 41301 or 41302 of this title, the Federal Maritime Commission may 

20 bring a civil action to enjoin conduct in violation of this part. The action 

21 must be brought in the district court of the United States for any judicial 

22 district in which the defendant resides or transacts business. After notice 

23 to the defendant, and a showing that the standards for granting injunctive 

24 relief by courts of equity are met, the court may grant a temporary restrain25 ing order or preliminary injunction for a period not to exceed 10 days after 

26 the Commission has issued an order disposing of the issues under investiga27 tion. 

28 ‘‘(b) REDUCTION IN COMPETITION.— 

29 ‘‘(1) ACTION BY COMMISSION.—If, at any time after the filing or ef30 fective date of an agreement under chapter 403 of this title, the Com31 mission determines that the agreement is likely, by a reduction in com32 petition, to produce an unreasonable reduction in transportation service 

33 or an unreasonable increase in transportation cost, the Commission, 

34 after notice to the person filing the agreement, may bring a civil action 

35 in the United States District Court for the District of Columbia to en36 join the operation of the agreement. The Commission’s sole remedy 

37 with respect to an agreement likely to have such an effect is an action 

38 under this subsection. 

39 ‘‘(2) REMEDIES BY COURT.—In an action under this subsection, the 

40 court may issue— 
75 

•HR 1442 IH 

1 ‘‘(A) a temporary restraining order or a preliminary injunction; 

2 and 

3 ‘‘(B) a permanent injunction after a showing that the agree4 ment is likely to have the effect described in paragraph (1). 

5 ‘‘(3) BURDEN OF PROOF AND THIRD PARTIES.—In an action under 

6 this subsection, the burden of proof is on the Commission. The court 

7 may not allow a third party to intervene. 

8 ‘‘(c) FAILURE TO PROVIDE INFORMATION.—If a person filing an agree9 ment, or an officer, director, partner, agent, or employee of the person, fails 

10 substantially to comply with a request for the submission of additional infor11 mation or documents within the period provided in section 40304(c) of this 

12 title, the Commission may bring a civil action in the United States District 

13 Court for the District of Columbia. At the request of the Commission, the 

14 Court— 

15 ‘‘(1) may order compliance; 

16 ‘‘(2) shall extend the period specified in section 40304(c)(2) of this 

17 title until there has been substantial compliance; and 

18 ‘‘(3) may grant other equitable relief that the court decides is appro19 priate. 

20 ‘‘(d) REPRESENTATION.—The Commission may represent itself in a pro21 ceeding under this section in— 

22 ‘‘(1) a district court of the United States, on notice to the Attorney 

23 General; and 

24 ‘‘(2) a court of appeals of the United States, with the approval of 

25 the Attorney General. 

26 ‘‘§ 41308. Enforcement of subpoenas and orders 

27 ‘‘(a) CIVIL ACTION.—If a person does not comply with a subpoena or 

28 order of the Federal Maritime Commission, the Attorney General, at the re29 quest of the Commission, or an injured party, may seek enforcement in a 

30 district court of the United States having jurisdiction over the parties. If, 

31 after hearing, the court determines that the subpoena or order was regularly 

32 made and duly issued, the court shall enforce the subpoena or order. 

33 ‘‘(b) TIME LIMIT ON BRINGING ACTIONS.—An action under this section 

34 to enforce an order of the Commission must be brought within 3 years after 

35 the date the order was violated. 

36 ‘‘§ 41309. Enforcement of reparation orders 

37 ‘‘(a) CIVIL ACTION.—If a person does not comply with an order of the 

38 Federal Maritime Commission for the payment of reparation, the person to 

39 whom the award was made may seek enforcement of the order in a district 

40 court of the United States having jurisdiction over the parties. 
76 

•HR 1442 IH 

1 ‘‘(b) PARTIES AND SERVICE OF PROCESS.—All parties in whose favor the 

2 Commission has made an award of reparation by a single order may be 

3 joined as plaintiffs, and all other parties in the order may be joined as de4 fendants, in a single action in a judicial district in which any one plaintiff 

5 could maintain an action against any one defendant. Service of process 

6 against a defendant not found in that district may be made in a district 

7 in which any office of that defendant is located or in which any port of call 

8 on a regular route operated by that defendant is located. Judgment may 

9 be entered for any plaintiff against the defendant liable to that plaintiff. 

10 ‘‘(c) NATURE OF REVIEW.—In an action under this section, the findings 

11 and order of the Commission are prima facie evidence of the facts stated 

12 in the findings and order. 

13 ‘‘(d) COSTS AND ATTORNEY FEES.—The plaintiff is not liable for costs 

14 of the action or for costs of any subsequent stage of the proceedings unless 

15 they accrue on the plaintiff’s appeal. A prevailing plaintiff shall be allowed 

16 reasonable attorney fees to be assessed and collected as part of the costs 

17 of the action. 

18 ‘‘(e) TIME LIMIT ON BRINGING ACTIONS.—An action under this section 

19 to enforce an order of the Commission must be brought within 3 years after 

20 the date the order was violated. 

21 ‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

22 ‘‘CHAPTER 421—REGULATIONS AFFECTING SHIPPING IN 

23 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. 

24 ‘‘§ 42101. Regulations of the Commission 

25 ‘‘(a) UNFAVORABLE CONDITIONS.—To further the objectives and policy 

26 set forth in section 50101 of this title, the Federal Maritime Commission 

27 shall prescribe regulations affecting shipping in foreign trade, not in conflict 

28 with law, to adjust or meet general or special conditions unfavorable to ship29 ping in foreign trade, whether in a particular trade or on a particular route 

30 or in commerce generally, including intermodal movements, terminal oper31 ations, cargo solicitation, agency services, ocean transportation intermediary 

32 services and operations, and other activities and services integral to trans33 portation systems, and which arise out of or result from laws or regulations 

34 of a foreign country or competitive methods, pricing practices, or other 
77 

•HR 1442 IH 

1 practices employed by owners, operators, agents, or masters of vessels of a 

2 foreign country. 

3 ‘‘(b) INITIATION OF REGULATION.—A regulation under subsection (a) 

4 may be initiated by the Commission on its own motion or on the petition 

5 of any person, including another component of the United States Govern6 ment. 

7 ‘‘§ 42102. Regulations of other agencies 

8 ‘‘(a) REQUEST TO AGENCY.—To further the objectives and policy set 

9 forth in section 50101 of this title, the Federal Maritime Commission shall 

10 request the head of a department, agency, or instrumentality of the United 

11 States Government to suspend, modify, or annul any existing regulations, 

12 or to make new regulations, affecting shipping in the foreign trade, except 

13 regulations relating to the Public Health Service, the Consular Service, or 

14 the inspection of vessels. 

15 ‘‘(b) PRIOR REVIEW AND APPROVAL.—A department, agency, or instru16 mentality of the Government may not prescribe a regulation affecting ship17 ping in the foreign trade (except a regulation affecting the Public Health 

18 Service, the Consular Service, or the inspection of vessels) until the regula19 tion has been submitted to the Commission for its approval and final action 

20 has been taken by the Commission or the President. 

21 ‘‘(c) SUBMISSION TO PRESIDENT.—If the head of a department, agency, 

22 or instrumentality of the Government refuses to comply with a request 

23 under subsection (a) or objects to a decision of the Commission under sub24 section (b), the Commission or the head of the department, agency, or in25 strumentality may submit the facts to the President. The President may es26 tablish, suspend, modify, or annul the regulation. 

27 ‘‘§ 42103. No preference to Government-owned vessels 

28 ‘‘A regulation may not give a vessel owned by the United States Govern29 ment a preference over a vessel owned by citizens of the United States and 

30 documented under the laws of the United States. 

31 ‘‘§ 42104. Information, witnesses, and evidence 

32 ‘‘(a) ORDER TO SUPPLY INFORMATION.—In carrying out section 42101 

33 of this title, the Federal Maritime Commission may order any person (in34 cluding a common carrier, tramp operator, bulk operator, shipper, shippers’ 

35 association, ocean transportation intermediary, or marine terminal operator, 

36 or an officer, receiver, trustee, lessee, agent, or employee thereof) to file 

37 with the Commission a report, answers to questions, documentary material, 

38 or other information the Commission considers necessary or appropriate. 

39 The Commission may require the response to any such order to be made 

40 under oath. The response shall be provided in the form and within the time 

41 specified by the Commission. 
78 

•HR 1442 IH 

1 ‘‘(b) SUBPOENAS AND DISCOVERY.—In carrying out section 42101 of this 

2 title, the Commission may— 

3 ‘‘(1) subpoena witnesses and evidence; and 

4 ‘‘(2) authorize a party to use depositions, written interrogatories, 

5 and discovery procedures that, to the extent practicable, conform to the 

6 Federal Rules of Civil Procedure (28 App. U.S.C.). 

7 ‘‘(c) WITNESS FEES.—Unless otherwise prohibited by law, and subject to 

8 funds being appropriated, a witness in a proceeding under section 42101 

9 of this title is entitled to the same fees and mileage as in the courts of the 

10 United States. 

11 ‘‘(d) PENALTIES.—For failure to supply information ordered to be pro12 duced or compelled by subpoena under this section, the Commission may— 

13 ‘‘(1) after notice and opportunity for a hearing, suspend tariffs and 

14 service contracts of a common carrier or the common carrier’s right to 

15 use tariffs of conferences and service contracts of agreements of which 

16 it is a member; or 

17 ‘‘(2) assess a civil penalty of not more than $5,000 for each day that 

18 the information is not provided. 

19 ‘‘(e) ENFORCEMENT.—If a person does not comply with an order or sub20 poena of the Commission under this section, the Commission may seek en21 forcement in a district court of the United States having jurisdiction over 

22 the parties. If, after hearing, the court determines that the order or sub23 poena was regularly made and duly issued, the court shall enforce the order 

24 or subpoena. 

25 ‘‘§ 42105. Disclosure to public 

26 ‘‘Notwithstanding any other provision of law, the Federal Maritime Com27 mission may refuse to disclose to the public a response or other information 

28 submitted to it under this chapter. 

29 ‘‘§ 42106. Other actions to remedy unfavorable conditions 

30 ‘‘If the Federal Maritime Commission finds that conditions unfavorable 

31 to shipping in foreign trade as described in section 42101 of this title exist, 

32 the Commission may— 

33 ‘‘(1) limit voyages to and from United States ports or the amount 

34 or type of cargo carried; 

35 ‘‘(2) suspend, in whole or in part, tariffs and service contracts for 

36 carriage to or from United States ports, including a common carrier’s 

37 right to use tariffs of conferences and service contracts of agreements 

38 in United States trades of which it is a member for any period the 

39 Commission specifies; 

40 ‘‘(3) suspend, in whole or in part, an ocean common carrier’s right 

41 to operate under any agreement filed with the Commission, including 
79 

•HR 1442 IH 

1 any agreement authorizing preferential treatment at terminals, pref2 erential terminal leases, space chartering, or pooling of cargo or rev3 enue with other ocean common carriers; 

4 ‘‘(4) impose a fee not to exceed $1,000,000 per voyage; or 

5 ‘‘(5) take any other action the Commission finds necessary and ap6 propriate to adjust or meet any condition unfavorable to shipping in 

7 the foreign trade of the United States. 

8 ‘‘§ 42107. Refusal of clearance and entry 

9 ‘‘At the request of the Federal Maritime Commission— 

10 ‘‘(1) the Secretary of Homeland Security shall— 

11 ‘‘(A) refuse the clearance required by section 60105 of this title 

12 to a vessel of a country that is named in a regulation prescribed 

13 by the Commission under section 42101 of this title; and 

14 ‘‘(B) collect any fees imposed by the Commission under section 

15 42106(4) of this title; and 

16 ‘‘(2) the Secretary of the department in which the Coast Guard is 

17 operating shall— 

18 ‘‘(A) deny entry, for purposes of oceanborne trade, of a vessel 

19 of a country that is named in a regulation prescribed by the Com20 mission under section 42101 of this title, to a port or place in the 

21 United States or the navigable waters of the United States; or 

22 ‘‘(B) detain the vessel at the port or place in the United States 

23 from which it is about to depart for another port or place in the 

24 United States. 

25 ‘‘§ 42108. Penalty for operating under suspended tariff or 

26 service contract 

27 ‘‘A common carrier that accepts or handles cargo for carriage under a 

28 tariff or service contract that has been suspended under section 42104(d)(1) 

29 or 42106(2) of this title, or after its right to use another tariff or service 

30 contract has been suspended under those provisions, is liable to the United 

31 States Government for a civil penalty of not more than $50,000 for each 

32 day that it is found to be operating under a suspended tariff or service con33 tract. 

34 ‘‘§ 42109. Consultation with other agencies 

35 ‘‘The Federal Maritime Commission may consult with, seek the coopera36 tion of, or make recommendations to other appropriate agencies of the 

37 United States Government prior to taking any action under this chapter. 

38 ‘‘CHAPTER 423—FOREIGN SHIPPING PRACTICES 

‘‘Sec. 

‘‘42301. Definitions. 

‘‘42302. Investigations. 

‘‘42303. Information requests. 

‘‘42304. Action against foreign carriers. 
80 

•HR 1442 IH 

‘‘42305. Refusal of clearance and entry. 

‘‘42306. Submission of determinations to President. 

‘‘42307. Review of regulations and orders. 

1 ‘‘§ 42301. Definitions 

2 ‘‘(a) DEFINED IN PART A.—In this chapter, the terms ‘common carrier’, 

3 ‘marine terminal operator’, ‘ocean common carrier’, ‘ocean transportation 

4 intermediary’, ‘shipper’, and ‘shippers’ association’ have the meaning given 

5 those terms in section 40102 of this title. 

6 ‘‘(b) OTHER DEFINITIONS.—In this chapter: 

7 ‘‘(1) FOREIGN CARRIER.—The term ‘foreign carrier’ means an ocean 

8 common carrier a majority of whose vessels are documented under the 

9 laws of a foreign country. 

10 ‘‘(2) MARITIME SERVICES.—The term ‘maritime services’ means 

11 port-to-port transportation of cargo by vessels operated by an ocean 

12 common carrier. 

13 ‘‘(3) MARITIME-RELATED SERVICES.—The term ‘maritime-related 

14 services’ means intermodal operations, terminal operations, cargo solici15 tation, agency services, ocean transportation intermediary services and 

16 operations, and all other activities and services integral to total trans17 portation systems of ocean common carriers and their foreign domiciled 

18 affiliates for themselves and others. 

19 ‘‘(4) UNITED STATES CARRIER.—The term ‘United States carrier’ 

20 means an ocean common carrier operating vessels documented under 

21 the laws of the United States. 

22 ‘‘(5) UNITED STATES OCEANBORNE TRADE.—The term ‘United 

23 States oceanborne trade’ means the carriage of cargo between the 

24 United States and a foreign country, whether directly or indirectly, by 

25 an ocean common carrier. 

26 ‘‘§ 42302. Investigations 

27 ‘‘(a) IN GENERAL.—The Federal Maritime Commission shall investigate 

28 whether any laws, rules, regulations, policies, or practices of a foreign gov29 ernment, or any practices of a foreign carrier or other person providing 

30 maritime or maritime-related services in a foreign country, result in the ex31 istence of conditions that— 

32 ‘‘(1) adversely affect the operations of United States carriers in 

33 United States oceanborne trade; and 

34 ‘‘(2) do not exist for foreign carriers of that country in the United 

35 States under the laws of the United States or as a result of acts of 

36 United States carriers or other persons providing maritime or mari37 time-related services in the United States. 

38 ‘‘(b) INITIATION OF INVESTIGATION.—An investigation under subsection 

39 (a) may be initiated by the Commission on its own motion or on the petition 
81 

•HR 1442 IH 

1 of any person, including another component of the United States Govern2 ment. 

3 ‘‘(c) TIME FOR DECISION.—The Commission shall complete an investiga4 tion under this section and render a decision within 120 days after it is ini5 tiated. However, the Commission may extend this 120-day period for an ad6 ditional 90 days if the Commission is unable to obtain sufficient information 

7 to determine whether a condition specified in subsection (a) exists. A notice 

8 providing an extension shall state clearly the reasons for the extension. 

9 ‘‘§ 42303. Information requests 

10 ‘‘(a) IN GENERAL.—To further the purposes of section 42302(a) of this 

11 title, the Federal Maritime Commission may order any person (including a 

12 common carrier, shipper, shippers’ association, ocean transportation inter13 mediary, or marine terminal operator, or an officer, receiver, trustee, lessee, 

14 agent or employee thereof) to file with the Commission any periodic or spe15 cial report, answers to questions, documentary material, or other informa16 tion the Commission considers necessary or appropriate. The Commission 

17 may require the response to any such order to be made under oath. The 

18 response shall be provided in the form and within the time specified by the 

19 Commission. 

20 ‘‘(b) SUBPOENAS.—In an investigation under section 42302 of this title, 

21 the Commission may subpoena witnesses and evidence. 

22 ‘‘(c) NONDISCLOSURE.—Notwithstanding any other provision of law, the 

23 Commission may determine that any information submitted to it in response 

24 to a request under this section, or otherwise, shall not be disclosed to the 

25 public. 

26 ‘‘§ 42304. Action against foreign carriers 

27 ‘‘(a) IN GENERAL.—Subject to section 42306 of this title, whenever the 

28 Federal Maritime Commission, after notice and opportunity for comment or 

29 hearing, determines that the conditions specified in section 42302(a) of this 

30 title exist, the Commission shall take such action to offset those conditions 

31 as it considers necessary and appropriate against any foreign carrier that 

32 is a contributing cause, or whose government is a contributing cause, to 

33 those conditions. The action may include— 

34 ‘‘(1) limitations on voyages to and from United States ports or on 

35 the amount or type of cargo carried; 

36 ‘‘(2) suspension, in whole or in part, of any or all tariffs and service 

37 contracts, including an ocean common carrier’s right to use any or all 

38 tariffs and service contracts of conferences in United States trades of 

39 which it is a member for any period the Commission specifies; 

40 ‘‘(3) suspension, in whole or in part, of an ocean common carrier’s 

41 right to operate under any agreement filed with the Commission, in-
82 

•HR 1442 IH 

1 cluding any agreement authorizing preferential treatment at terminals, 

2 preferential terminal leases, space chartering, or pooling of cargo or 

3 revenue with other ocean common carriers; and 

4 ‘‘(4) a fee not to exceed $1,000,000 per voyage. 

5 ‘‘(b) CONSULTATION.—The Commission may consult with, seek the co6 operation of, or make recommendations to other appropriate agencies of the 

7 United States Government prior to taking any action under subsection (a). 

8 ‘‘§ 42305. Refusal of clearance and entry 

9 ‘‘Subject to section 42306 of this title, whenever the Federal Maritime 

10 Commission determines that the conditions specified in section 42302(a) of 

11 this title exist, then at the request of the Commission— 

12 ‘‘(1) the Secretary of Homeland Security shall refuse the clearance 

13 required by section 60105 of this title to a vessel of a foreign carrier 

14 that is identified by the Commission under section 42304 of this title; 

15 and 

16 ‘‘(2) the Secretary of the department in which the Coast Guard is 

17 operating shall— 

18 ‘‘(A) deny entry, for purposes of oceanborne trade, of a vessel 

19 of a foreign carrier that is identified by the Commission under sec20 tion 42304 of this title, to a port or place in the United States 

21 or the navigable waters of the United States; or 

22 ‘‘(B) detain the vessel at the port or place in the United States 

23 from which it is about to depart for another port or place in the 

24 United States. 

25 ‘‘§ 42306. Submission of determinations to President 

26 ‘‘Before a determination under section 42304 of this title becomes effec27 tive or a request is made under section 42305 of this title, the determina28 tion shall be submitted immediately to the President. The President, within 

29 10 days after receiving it, may disapprove it in writing, setting forth the 

30 reasons for the disapproval, if the President finds that disapproval is re31 quired for reasons of national defense or foreign policy. 

32 ‘‘§ 42307. Review of regulations and orders 

33 ‘‘A regulation or final order of the Federal Maritime Commission under 

34 this chapter is reviewable exclusively in the same forum and in the same 

35 manner as provided in section 2342(3)(B) of title 28. 

36 ‘‘PART C—MISCELLANEOUS

37 ‘‘CHAPTER 441—EVIDENCE OF FINANCIAL 

38 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. 
83 

•HR 1442 IH 

‘‘44104. Civil penalty. 

‘‘44105. Refusal of clearance. 

‘‘44106. Conduct of proceedings. 

1 ‘‘§ 44101. Application 

2 ‘‘This chapter applies to a vessel that— 

3 ‘‘(1) has berth or stateroom accommodations for at least 50 pas4 sengers; and 

5 ‘‘(2) boards passengers at a port in the United States. 

6 ‘‘§ 44102. Financial responsibility to indemnify passengers 

7 for nonperformance of transportation 

8 ‘‘(a) FILING REQUIREMENT.—A person in the United States may not ar9 range, offer, advertise, or provide transportation on a vessel to which this 

10 chapter applies unless the person has filed with the Federal Maritime Com11 mission evidence of financial responsibility to indemnify passengers for non12 performance of the transportation. 

13 ‘‘(b) SATISFACTORY EVIDENCE.—To satisfy subsection (a), a person must 

14 file— 

15 ‘‘(1) information the Commission considers necessary; or 

16 ‘‘(2) a copy of a bond or other security, in such form as the Commis17 sion by regulation may require. 

18 ‘‘(c) AUTHORIZED ISSUER OF BOND.—If a bond is filed, it must be 

19 issued by a bonding company authorized to do business in the United 

20 States. 

21 ‘‘§ 44103. Financial responsibility to pay liability for death 

22 or injury 

23 ‘‘(a) GENERAL REQUIREMENT.—The owner or charterer of a vessel to 

24 which this chapter applies shall establish, under regulations prescribed by 

25 the Federal Maritime Commission, financial responsibility to meet liability 

26 for death or injury to passengers or other individuals on a voyage to or from 

27 a port in the United States. 

28 ‘‘(b) AMOUNTS.— 

29 ‘‘(1) IN GENERAL.—The amount of financial responsibility required 

30 under subsection (a) shall be based on the number of passenger accom31 modations as follows: 

32 ‘‘(A) $20,000 for each of the first 500 passenger accommoda33 tions. 

34 ‘‘(B) $15,000 for each additional passenger accommodation be35 tween 501 and 1,000. 

36 ‘‘(C) $10,000 for each additional passenger accommodation be37 tween 1,001 and 1,500. 

38 ‘‘(D) $5,000 for each additional passenger accommodation over 

39 1,500. 
84 

•HR 1442 IH 

1 ‘‘(2) MULTIPLE VESSELS.—If the owner or charterer is operating 

2 more than one vessel subject to this chapter, the amount of financial 

3 responsibility shall be based on the number of passenger accommoda4 tions on the vessel with the largest number of passenger accommoda5 tions. 

6 ‘‘(c) AVAILABILITY TO PAY JUDGMENT.—The amount determined under 

7 subsection (b) shall be available to pay a judgment for damages (whether 

8 less than or more than $20,000) for death or injury to a passenger or other 

9 individual on a voyage to or from a port in the United States. 

10 ‘‘(d) MEANS OF ESTABLISHING.—Financial responsibility under this sec11 tion may be established by one or more of the following if acceptable to the 

12 Commission: 

13 ‘‘(1) Insurance. 

14 ‘‘(2) Surety bond issued by a bonding company authorized to do 

15 business in the United States. 

16 ‘‘(3) Qualification as a self-insurer. 

17 ‘‘(4) Other evidence of financial responsibility. 

18 ‘‘§ 44104. Civil penalty 

19 ‘‘A person that violates section 44102 or 44103 of this title is liable to 

20 the United States Government for a civil penalty of not more than $5,000, 

21 plus $200 for each passage sold, to be assessed by the Federal Maritime 

22 Commission. The Commission may remit or mitigate the penalty on terms 

23 the Commission considers proper. 

24 ‘‘§ 44105. Refusal of clearance 

25 ‘‘The Secretary of Homeland Security shall refuse the clearance required 

26 by section 60105 of this title, at the port or place of departure from the 

27 United States, of a vessel that is subject to this chapter and does not have 

28 evidence issued by the Federal Maritime Commission of compliance with 

29 sections 44102 and 44103 of this title. 

30 ‘‘§ 44106. Conduct of proceedings 

31 ‘‘Part A of this subtitle applies to proceedings conducted by the Federal 

32 Maritime Commission under this chapter.’’. 

33 SEC. 8. SUBTITLE V OF TITLE 46. 

34 (a) SUBTITLE ANALYSIS.—The analysis of subtitle V of title 46, United 

35 States Code, is amended to read as follows: 

36 ‘‘PART A—GENERAL

‘‘Chapter Sec. 

‘‘501. Policy, Studies, and Reports ................................................................. 50101 

‘‘503. Administrative ........................................................................................... 50301 

‘‘505. Other General Provisions ...................................................................... 50501 

37 ‘‘PART B—MERCHANT MARINE SERVICE

‘‘511. General .......................................................................................................... 51101 

‘‘513. United States Merchant Marine Academy ...................................... 51301 
85 

•HR 1442 IH 

‘‘515. State Maritime Academy Support Program ................................... 51501 

‘‘517. Other Support for Merchant Marine Training .............................. 51701 

‘‘519. Merchant Marine Awards ...................................................................... 51901 

‘‘521. Miscellaneous ............................................................................................. 52101 

1 ‘‘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 

2 ‘‘PART D—PROMOTIONAL PROGRAMS

‘‘551. Coastwise Trade ........................................................................................ 55101 

‘‘553. Passenger and Cargo Preferences ...................................................... 55301 

‘‘555. Miscellaneous ............................................................................................. 55501 

3 ‘‘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 

4 ‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

‘‘571. General Authority ..................................................................................... 57101 

‘‘573. Vessel Trade-In Program ....................................................................... 57301 

‘‘575. Construction, Charter, and Sale of Vessels .................................... 57501 

5 ‘‘PART G—RESTRICTIONS AND PENALTIES

‘‘581. Restrictions and Penalties .................................................................... 58101’’. 

6 (b) CHAPTERS PRECEDING CHAPTER 531.—Subtitle V of title 46, United 

7 States Code, is amended by inserting after the subtitle analysis the fol8 lowing: 

9 ‘‘PART A—GENERAL

10 ‘‘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. 

11 ‘‘§ 50101. Objectives and policy 

12 ‘‘(a) OBJECTIVES.—It is necessary for the national defense and the devel13 opment of the domestic and foreign commerce of the United States that the 

14 United States have a merchant marine— 

15 ‘‘(1) sufficient to carry the waterborne domestic commerce and a 

16 substantial part of the waterborne export and import foreign commerce 

17 of the United States and to provide shipping service essential for main-
86 

•HR 1442 IH 

1 taining the flow of the waterborne domestic and foreign commerce at 

2 all times; 

3 ‘‘(2) capable of serving as a naval and military auxiliary in time of 

4 war or national emergency; 

5 ‘‘(3) owned and operated by citizens of the United States; 

6 ‘‘(4) composed of the best-equipped, safest, and most suitable types 

7 of vessels, built in the United States, documented under chapter 121 

8 of this title, and manned with a trained and efficient citizen personnel; 

9 and 

10 ‘‘(5) supplemented by efficient facilities for building and repairing 

11 vessels. 

12 ‘‘(b) POLICY.—It is the policy of the United States to encourage and aid 

13 the development and maintenance of a merchant marine satisfying the ob14 jectives described in subsection (a). 

15 ‘‘§ 50102. Survey of merchant marine 

16 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall survey the 

17 merchant marine of the United States to determine whether replacements 

18 and additions are required to carry out the objectives and policy of section 

19 50101 of this title. The Secretary shall study, perfect, and adopt a long20 range program for replacements and additions that will result, as soon as 

21 practicable, in— 

22 ‘‘(1) an adequate and well-balanced merchant fleet, including vessels 

23 of all types, that will provide shipping service essential for maintaining 

24 the flow of foreign commerce by vessels designed to be readily and 

25 quickly convertible into transport and supply vessels in a time of na26 tional emergency; 

27 ‘‘(2) ownership and operation of the fleet by citizens of the United 

28 States insofar as practicable; 

29 ‘‘(3) vessels designed to afford the best and most complete protection 

30 for passengers and crew against fire and all marine perils; and 

31 ‘‘(4) an efficient capacity for building and repairing vessels in the 

32 United States with an adequate number of skilled personnel to provide 

33 an adequate mobilization base. 

34 ‘‘(b) COOPERATION WITH SECRETARY OF NAVY.—In carrying out sub35 section (a)(1), the Secretary of Transportation shall cooperate closely with 

36 the Secretary of the Navy as to national defense requirements. 

37 ‘‘§ 50103. Determinations of essential services 

38 ‘‘(a) ESSENTIAL SERVICES, ROUTES, AND LINES.— 

39 ‘‘(1) IN GENERAL.—The Secretary of Transportation shall inves40 tigate, determine, and keep current records of the ocean services, 

41 routes, and lines from ports in the United States, or in the territories 
87 

•HR 1442 IH 

1 and possessions of the United States, to foreign markets, which the 

2 Secretary determines to be essential for the promotion, development, 

3 expansion, and maintenance of the foreign commerce of the United 

4 States. In making such a determination, the Secretary shall consider 

5 and give due weight to— 

6 ‘‘(A) the cost of maintaining each line; 

7 ‘‘(B) the probability that a line cannot be maintained except at 

8 a heavy loss disproportionate to the benefit to foreign trade; 

9 ‘‘(C) the number of voyages and types of vessels that should be 

10 employed in a line; 

11 ‘‘(D) the intangible benefit of maintaining a line to the foreign 

12 commerce of the United States, the national defense, and other 

13 national requirements; and 

14 ‘‘(E) any other facts and conditions a prudent business person 

15 would consider when dealing with the person’s own business. 

16 ‘‘(2) SAINT LAWRENCE SEAWAY.—For purposes of paragraph (1), 

17 the Secretary shall establish services, routes, and lines that reflect the 

18 seasonal closing of the Saint Lawrence Seaway and provide for alter19 nate routing of vessels through a different range of ports during that 

20 closing to maintain continuity of service on a year-round basis. 

21 ‘‘(b) BULK CARGO CARRYING SERVICES.—The Secretary shall inves22 tigate, determine, and keep current records of the bulk cargo carrying serv23 ices that should be provided by United States documented vessels (whether 

24 or not operating on particular services, routes, or lines) for the promotion, 

25 development, expansion, and maintenance of the foreign commerce of the 

26 United States and the national defense or other national requirements. 

27 ‘‘(c) TYPES OF VESSELS.—The Secretary shall investigate, determine, 

28 and keep current records of the type, size, speed, method of propulsion, and 

29 other requirements of the vessels, including express-liner or super-liner ves30 sels, that should be employed in— 

31 ‘‘(1) the services, routes, or lines described in subsection (a), and the 

32 frequency and regularity of the voyages of the vessels, with a view to 

33 furnishing adequate, regular, certain, and permanent service; and 

34 ‘‘(2) the bulk cargo carrying services described in subsection (b). 

35 ‘‘§ 50104. Studies of general maritime problems 

36 ‘‘The Secretary of Transportation shall study all maritime problems aris37 ing in carrying out the policy in section 50101 of this title. 

38 ‘‘§ 50105. Studies and cooperation relating to the construc39 tion of vessels 

40 ‘‘(a) RELATIVE COSTS AND NEW DESIGNS.—The Secretary of Transpor41 tation shall investigate, determine, and keep current records of— 
88 

•HR 1442 IH 

1 ‘‘(1) the relative cost of construction of comparable vessels in the 

2 United States and in foreign countries; and 

3 ‘‘(2) new designs, new methods of construction, and new types of 

4 equipment for vessels. 

5 ‘‘(b) RULES, CLASSIFICATIONS, AND RATINGS.—The Secretary shall ex6 amine the rules under which vessels are constructed abroad and in the 

7 United States and the methods of classifying and rating the vessels. 

8 ‘‘(c) COLLABORATION WITH OWNERS AND BUILDERS.—The Secretary 

9 shall collaborate with vessel owners and shipbuilders in developing plans for 

10 the economical construction of vessels and their propelling machinery, of 

11 most modern economical types, giving thorough consideration to all well-rec12 ognized means of propulsion and taking into account the benefits from 

13 standardized production where practicable and desirable. 

14 ‘‘(d) EXPRESS-LINER AND SUPER-LINER VESSELS.—The Secretary shall 

15 study and cooperate with vessel owners in devising means by which there 

16 may be constructed, by or with the aid of the United States Government, 

17 express-liner or super-liner vessels comparable to those of other nations, es18 pecially with a view to their use in a national emergency, and the use of 

19 transoceanic aircraft service in connection with or in lieu of those vessels. 

20 ‘‘§ 50106. Studies on the operation of vessels 

21 ‘‘(a) RELATIVE COSTS.—The Secretary of Transportation shall inves22 tigate, determine, and keep current records of the relative cost of marine 

23 insurance, maintenance, repairs, wages and subsistence of officers and 

24 crews, and all other items of expense, in the operation of comparable vessels 

25 under the laws and regulations of the United States and those of the foreign 

26 countries whose vessels are substantial competitors of American vessels. 

27 ‘‘(b) SHIPYARDS.—The Secretary shall investigate, determine, and keep 

28 current records of the number, location, and efficiency of shipyards in the 

29 United States. 

30 ‘‘(c) NAVIGATION LAWS.—The Secretary shall examine the navigation 

31 laws and regulations of the United States and make such recommendations 

32 to Congress as the Secretary considers proper for the amendment, improve33 ment, and revision of those laws and for the development of the merchant 

34 marine of the United States. 

35 ‘‘§ 50107. Studies on marine insurance 

36 ‘‘The Secretary of Transportation shall— 

37 ‘‘(1) examine into the subject of marine insurance, the number of 

38 companies in the United States, domestic and foreign, engaging in ma39 rine insurance, the extent of the insurance on hulls and cargoes placed 

40 or written in the United States, and the extent of reinsurance of Amer41 ican maritime risks in foreign companies; and 
89 

•HR 1442 IH 

1 ‘‘(2) ascertain what steps may be necessary to develop an ample ma2 rine insurance system as an aid in the development of the merchant 

3 marine of the United States. 

4 ‘‘§ 50108. Studies on cargo carriage and cargo containers 

5 ‘‘(a) STUDIES.—The Secretary of Transportation shall study— 

6 ‘‘(1) the methods of encouraging the development and implementa7 tion of new concepts for the carriage of cargo in the domestic and for8 eign commerce of the United States; and 

9 ‘‘(2) the economic and technological aspects of the use of cargo con10 tainers as a method of carrying out the policy in section 50101 of this 

11 title. 

12 ‘‘(b) RESTRICTION.—In carrying out subsection (a) and the policy in sec13 tion 50101 of this title, the United States Government may not give pref14 erence as between carriers based on the length, height, or width of cargo 

15 containers or the length, height, or width of cargo container cells. This re16 striction applies to all existing container vessels and any container vessel to 

17 be constructed or rebuilt. 

18 ‘‘§ 50109. Miscellaneous studies 

19 ‘‘(a) FOREIGN SUBSIDIES.—The Secretary of Transportation shall inves20 tigate, determine, and keep current records of the extent and character of 

21 the governmental aid and subsidies granted by foreign governments to their 

22 merchant marine. 

23 ‘‘(b) LAWS APPLICABLE TO AIRCRAFT.—The Secretary shall investigate, 

24 determine, and keep current records of the provisions of law relating to 

25 shipping that should be made applicable to aircraft engaged in foreign com26 merce to further the policy in section 50101 of this title, and any appro27 priate legislation in this regard. 

28 ‘‘(c) AID FOR COTTON, COAL, LUMBER, AND CEMENT.—The Secretary 

29 shall investigate, determine, and keep current records of the advisability of 

30 enactment of suitable legislation authorizing the Secretary, in an economic 

31 or commercial emergency, to aid farmers and producers of cotton, coal, lum32 ber, and cement in any section of the United States in the transportation 

33 and landing of their products in any foreign port, which products can be 

34 carried in dry-cargo vessels by reducing rates, by supplying additional ton35 nage to any American operator, or by operation of vessels directly by the 

36 Secretary, until the Secretary considers the special rate reduction and oper37 ation unnecessary for the benefit of those farmers and producers. 

38 ‘‘(d) INTERCOASTAL AND INLAND WATER TRANSPORTATION.—The Sec39 retary shall investigate, determine, and keep current records of intercoastal 

40 and inland water transportation, including their relation to transportation 

41 by land and air. 
90 

•HR 1442 IH 

1 ‘‘(e) OBSOLETE TONNAGE AND TRAMP SERVICE.—The Secretary shall 

2 make studies and reports to Congress on— 

3 ‘‘(1) the scrapping or removal from service of old or obsolete mer4 chant tonnage owned by the United States Government or in use in 

5 the merchant marine; and 

6 ‘‘(2) tramp shipping service and the advisability of citizens of the 

7 United States participating in that service with vessels under United 

8 States registry. 

9 ‘‘(f) MORTGAGE LOANS.—The Secretary shall investigate the legal status 

10 of mortgage loans on vessel property, with a view to the means of improving 

11 the security of those loans and of encouraging investment in American ship12 ping. 

13 ‘‘§ 50110. Securing preference to vessels of the United States 

14 ‘‘(a) POSSIBILITIES OF PROMOTING CARRIAGE.—The Secretary of Trans15 portation shall investigate, determine, and keep current records of the possi16 bilities of promoting the carriage of United States foreign trade in vessels 

17 of the United States. 

18 ‘‘(b) INDUCEMENTS TO IMPORTERS AND EXPORTERS.—The Secretary 

19 shall study and cooperate with vessel owners in devising means by which 

20 the importers and exporters of the United States can be induced to give 

21 preference to vessels of the United States. 

22 ‘‘(c) LIAISON WITH AGENCIES AND ORGANIZATIONS.—The Secretary 

23 shall establish and maintain liaison with such other agencies of the United 

24 States Government, and with such representative trade organizations 

25 throughout the United States, as may be concerned, directly or indirectly, 

26 with any movement of commodities in the waterborne export and import for27 eign commerce of the United States, for the purpose of securing preference 

28 to vessels of the United States in the shipment of those commodities. 

29 ‘‘§ 50111. Reports to Congress 

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

31 of Transportation shall submit a report to Congress. The report shall in32 clude, with respect to activities of the Secretary under this subtitle, the re33 sults of investigations, a summary of transactions, a statement of all ex34 penditures and receipts, the purposes for which all expenditures were made, 

35 and any recommendations for legislation. 

36 ‘‘(b) ADMINISTERED AND OVERSIGHT FUNDS.—The Secretary, in the re37 port under subsection (a) and in the annual budget estimate for the Mari38 time Administration submitted to Congress, shall state separately the 

39 amount, source, intended use, and nature of any funds (other than funds 

40 appropriated to the Administration or to the Secretary of Transportation 
91 

•HR 1442 IH 

1 for use by the Administration) administered, or subject to oversight, by the 

2 Administration. 

3 ‘‘(c) ADDITIONAL RECOMMENDATIONS FOR LEGISLATION.—The Sec4 retary, from time to time, shall make recommendations to Congress for leg5 islation the Secretary considers necessary to better achieve the objectives 

6 and policy of section 50101 of this title. 

7 ‘‘§ 50112. National Maritime Enhancement Institutes 

8 ‘‘(a) DESIGNATION.—The Secretary of Transportation may designate Na9 tional Maritime Enhancement Institutes. 

10 ‘‘(b) ACTIVITIES.—Activities undertaken by an institute may include— 

11 ‘‘(1) conducting research about methods to improve the performance 

12 of maritime industries; 

13 ‘‘(2) enhancing the competitiveness of domestic maritime industries 

14 in international trade; 

15 ‘‘(3) forecasting trends in maritime trade; 

16 ‘‘(4) assessing technological advancements; 

17 ‘‘(5) developing management initiatives and training; 

18 ‘‘(6) analyzing economic and operational impacts of regulatory poli19 cies and international negotiations or agreements pending before inter20 national bodies; 

21 ‘‘(7) assessing the compatibility of domestic maritime infrastructure 

22 systems with overseas transport systems; 

23 ‘‘(8) fostering innovations in maritime transportation pricing; and 

24 ‘‘(9) improving maritime economics and finance. 

25 ‘‘(c) APPLICATION FOR DESIGNATION.—An institution seeking designa26 tion as a National Maritime Enhancement Institute shall submit an applica27 tion under regulations prescribed by the Secretary. 

28 ‘‘(d) CRITERIA FOR DESIGNATION.—The Secretary shall designate an in29 stitute under this section on the basis of the following criteria: 

30 ‘‘(1) The demonstrated research and extension resources available to 

31 the applicant for carrying out the activities specified in subsection (b). 

32 ‘‘(2) The ability of the applicant to provide leadership in making na33 tional and regional contributions to the solution of both long-range and 

34 immediate problems of the domestic maritime industry. 

35 ‘‘(3) The existence of an established program of the applicant encom36 passing research and training directed to enhancing maritime indus37 tries. 

38 ‘‘(4) The demonstrated ability of the applicant to assemble and 

39 evaluate pertinent information from national and international sources 

40 and to disseminate results of maritime industry research and edu41 cational programs through a continuing education program. 
92 

•HR 1442 IH 

1 ‘‘(5) The qualification of the applicant as a nonprofit institution of 

2 higher learning. 

3 ‘‘(e) FINANCIAL AWARDS.—The Secretary may make awards on an equal 

4 matching basis to an institute designated under subsection (a) from 

5 amounts appropriated. The aggregate annual amount of the Federal share 

6 of the awards by the Secretary may not exceed $500,000. 

7 ‘‘(f) UNIVERSITY TRANSPORTATION RESEARCH FUNDS.—The Secretary 

8 may make a grant under section 5505 of title 49 to an institute designated 

9 under subsection (a) for maritime and maritime intermodal research under 

10 that section as if the institute were a university transportation center. In 

11 making a grant, the Secretary, through the Research and Innovative Tech12 nology Administration, shall advise the Maritime Administration on the 

13 availability of funds for the grants and consult with the Administration on 

14 making the grants. 

15 ‘‘§ 50113. Use and performance reports by operators of ves16 sels 

17 ‘‘(a) FILING REQUIREMENT.—The Secretary of Transportation by regula18 tion may require the operator of a vessel in the waterborne foreign com19 merce of the United States to file such report, account, record, or memo20 randum on the use and performance of the vessel as the Secretary considers 

21 desirable to assist in carrying out this subtitle. The report, account, record, 

22 or memorandum shall be signed and verified, and be filed at the times and 

23 in the manner, as provided by regulation. 

24 ‘‘(b) CIVIL PENALTY.—An operator not filing a report, account, record, 

25 or memorandum required by the Secretary under this section is liable to the 

26 United States Government for a civil penalty of $50 for each day of the 

27 violation. A penalty imposed under this section on the operator of a vessel 

28 constitutes a lien on the vessel involved in the violation. A civil action in 

29 rem to enforce the lien may be brought in the district court of the United 

30 States for any district in which the vessel is found. The Secretary may remit 

31 or mitigate any penalty imposed under this section. 

32 ‘‘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. 

33 ‘‘§ 50301. Vessel Operations Revolving Fund 

34 ‘‘(a) IN GENERAL.—There is a ‘Vessel Operations Revolving Fund’ for 

35 use by the Secretary of Transportation in carrying out duties and powers 

36 related to vessel operations, including charter, operation, maintenance, re37 pair, reconditioning, and improvement of merchant vessels under the juris-
93 

•HR 1442 IH 

1 diction of the Secretary. The Fund has a working capital of $20,000,000, 

2 to remain available until expended. 

3 ‘‘(b) RELATIONSHIP TO OTHER LAWS.—Notwithstanding any other law, 

4 rates for shipping services provided under the Fund shall be prescribed by 

5 the Secretary and the Fund shall be credited with receipts from vessel oper6 ations conducted under the Fund. Sections 1(a) and (c), 3(c), and 4 of the 

7 Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294), apply 

8 to those operations and to seamen employed through general agents as em9 ployees of the United States Government. Notwithstanding any other law 

10 on the employment of persons by the Government, the seamen may be em11 ployed in accordance with customary commercial practices in the maritime 

12 industry. 

13 ‘‘(c) ADVANCEMENTS.—With the approval of the Director of the Office 

14 of Management and Budget, the Secretary may advance amounts the Sec15 retary considers necessary, but not more than 2 percent of vessel operating 

16 expenses, from the Fund to the appropriation ‘Salaries and Expenses’ in 

17 carrying out duties and powers related to vessel operations, without regard 

18 to the limitations on amounts stated in that appropriation. 

19 ‘‘(d) TRANSFERS.—The unexpended balances of working funds or of allo20 cation accounts established after January 1, 1951, for the activities pro21 vided for in subsection (a), and receipts received from those activities, may 

22 be transferred to the Fund, which shall be available for the purposes of 

23 those working funds or allocation accounts. 

24 ‘‘(e) LIMITATION.— 

25 ‘‘(1) IN GENERAL.—Amounts made available to the Secretary for 

26 maritime activities by this section or any other law may not be used 

27 to pay for a vessel described in paragraph (2) unless the compensation 

28 to be paid is computed under section 56303 of this title as that section 

29 is interpreted by the Comptroller General. 

30 ‘‘(2) APPLICABLE VESSELS.—Paragraph (1) applies to a vessel— 

31 ‘‘(A) the title to which is acquired by the Government by req32 uisition or purchase; 

33 ‘‘(B) the use of which is taken by requisition or agreement; or 

34 ‘‘(C) lost while insured by the Government. 

35 ‘‘(3) NONAPPLICABLE VESSELS.—Paragraph (1) does not apply to a 

36 vessel under a construction-differential subsidy contract. 

37 ‘‘(f) AVAILABILITY FOR ADDITIONAL PURPOSES.—The Fund is available 

38 for— 

39 ‘‘(1) necessary expenses incurred in the protection, preservation, 

40 maintenance, acquisition, or use of vessels involved in mortgage fore41 closure or forfeiture proceedings instituted by the Government, includ-
94 

•HR 1442 IH 

1 ing payment of prior claims and liens, expenses of sale, or other related 

2 charges; 

3 ‘‘(2) necessary expenses incident to the redelivery and lay-up, in the 

4 United States, of vessels chartered as of June 20, 1956, under agree5 ments not calling for their return to the Government; 

6 ‘‘(3) the activation, repair, and deactivation of merchant vessels 

7 chartered for limited emergency purposes during fiscal year 1957 under 

8 the jurisdiction of the Secretary; and 

9 ‘‘(4) payment of expenses of custody and maintenance of Govern10 ment-owned vessels not in the National Defense Reserve Fleet. 

11 ‘‘(g) EXPENSES AND RECEIPTS RELATED TO CHARTER OPERATIONS.— 

12 The Fund is available for expenses incurred in activating, repairing, and de13 activating merchant vessels chartered under the jurisdiction of the Sec14 retary. Receipts from charter operations of Government-owned vessels under 

15 the jurisdiction of the Secretary shall be credited to the Fund. 

16 ‘‘§ 50302. Port development 

17 ‘‘(a) GENERAL REQUIREMENTS.—With the objective of promoting, en18 couraging, and developing ports and transportation facilities in connection 

19 with water commerce over which the Secretary of Transportation has juris20 diction, the Secretary, in cooperation with the Secretary of the Army, 

21 shall— 

22 ‘‘(1) investigate territorial regions and zones tributary to ports, tak23 ing into consideration the economies of transportation by rail, water, 

24 and highway and the natural direction of the flow of commerce; 

25 ‘‘(2) investigate the causes of congestion of commerce at ports and 

26 applicable remedies; 

27 ‘‘(3) investigate the subject of water terminals, including the nec28 essary docks, warehouses, and equipment, to devise and suggest the 

29 types most appropriate for different locations and for the most expedi30 tious and economical transfer or interchange of passengers or property 

31 between water carriers and rail carriers; 

32 ‘‘(4) consult with communities on the appropriate location and plan 

33 of construction of wharves, piers, and water terminals; 

34 ‘‘(5) investigate the practicability and advantages of harbor, river, 

35 and port improvements in connection with foreign and coastwise trade; 

36 and 

37 ‘‘(6) investigate any other matter that may tend to promote and en38 courage the use by vessels of ports adequate to care for the freight that 

39 naturally would pass through those ports. 

40 ‘‘(b) SUBMISSION OF FINDINGS TO SURFACE TRANSPORTATION

41 BOARD.—After an investigation under subsection (a), if the Secretary of 
95 

•HR 1442 IH 

1 Transportation believes that the rates or practices of a rail carrier subject 

2 to the jurisdiction of the Surface Transportation Board are detrimental to 

3 the objective specified in subsection (a), or that new rates or practices, new 

4 or additional port terminal facilities, or affirmative action by a rail carrier 

5 is necessary to promote that objective, the Secretary may submit findings 

6 to the Board for action the Board considers appropriate under existing law. 

7 ‘‘§ 50303. Operating property and extending term of notes 

8 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may— 

9 ‘‘(1) operate or lease docks, wharves, piers, or real property under 

10 the Secretary’s control; and 

11 ‘‘(2) make extensions and accept renewals of— 

12 ‘‘(A) promissory notes and other evidences of indebtedness on 

13 property; and 

14 ‘‘(B) mortgages and other contracts securing the property. 

15 ‘‘(b) TERMS OF TRANSACTIONS.—A transaction under subsection (a) 

16 shall be on terms the Secretary considers necessary to carry out the pur17 poses of this subtitle, but consistent with sound business practice. 

18 ‘‘(c) AVAILABILITY OF AMOUNTS.—Amounts received by the Secretary 

19 from a transaction under this section are available for expenditure by the 

20 Secretary as provided in this subtitle. 

21 ‘‘§ 50304. Sale and transfer of property 

22 ‘‘(a) AUTHORITY TO SELL.—The Secretary of Transportation may sell 

23 property (other than vessels transferred under section 4 of the Merchant 

24 Marine Act, 1920 (ch. 250, 41 Stat. 990)) on terms the Secretary considers 

25 appropriate. 

26 ‘‘(b) TRANSFERS FROM MILITARY TO CIVILIAN CONTROL.—When the 

27 President considers it in the interest of the United States, the President 

28 may transfer to the Secretary of Transportation possession and control of 

29 property described in the second paragraph of section 17 of the Merchant 

30 Marine Act, 1920 (ch. 250, 41 Stat. 994), as originally enacted, that is pos31 sessed and controlled by the Secretary of a military department. 

32 ‘‘(c) TRANSFERS FROM CIVILIAN TO MILITARY CONTROL.—When the 

33 President considers it necessary, the President by executive order may 

34 transfer to the Secretary of a military department possession and control 

35 of property described in section 17 of the Merchant Marine Act, 1920 (ch. 

36 250, 41 Stat. 994), as originally enacted, that is possessed and controlled 

37 by the Secretary of Transportation. The President’s order shall state the 

38 need for the transfer and the period of the need. When the President de39 cides that the need has ended, the possession and control shall revert to the 

40 Secretary of Transportation. The property may not be sold except as pro41 vided by law. 
96 

•HR 1442 IH 

1 ‘‘§ 50305. Appointment of trustee or receiver and operation 

2 of vessels 

3 ‘‘(a) APPOINTMENT OF TRUSTEES AND RECEIVERS.— 

4 ‘‘(1) APPOINTMENT OF SECRETARY.—In a proceeding in a court of 

5 the United States in which a trustee or receiver may be appointed for 

6 a corporation operating a vessel of United States registry between the 

7 United States and a foreign country, on which the United States Gov8 ernment holds a mortgage, the court may appoint the Secretary of 

9 Transportation as the sole trustee or receiver (subject to the direction 

10 of the court) if— 

11 ‘‘(A) the court finds that the appointment will— 

12 ‘‘(i) inure to the advantage of the estate and the parties 

13 in interest; and 

14 ‘‘(ii) tend to carry out the purposes of this subtitle; and 

15 ‘‘(B) the Secretary expressly consents to the appointment. 

16 ‘‘(2) APPOINTMENT OF OTHER PERSON.—The appointment of an17 other person as trustee or receiver without a hearing becomes effective 

18 when ratified by the Secretary, but the Secretary may demand a hear19 ing. 

20 ‘‘(b) OPERATION OF VESSELS.— 

21 ‘‘(1) IN GENERAL.—If the court is unwilling to allow the trustee or 

22 receiver to operate the vessel in foreign commerce without financial aid 

23 from the Government pending termination of the proceeding, and the 

24 Secretary certifies to the court that the continued operation of the ves25 sel is essential to the foreign commerce of the United States and is rea26 sonably calculated to carry out the purposes of this subtitle, the court 

27 may allow the Secretary to operate the vessel, either directly or through 

28 a managing agent or operator employed by the Secretary. The Sec29 retary must agree to comply with terms imposed by the court sufficient 

30 to protect the parties in interest. The Secretary also must agree to pay 

31 all operating losses resulting from the operation. The operation shall 

32 be for the account of the trustee or receiver. 

33 ‘‘(2) PAYMENT OF OPERATING LOSSES AND OTHER AMOUNTS.—The 

34 Secretary has no claim against the corporation, its estate, or its assets 

35 for operating losses paid by the Secretary, but the Secretary may pay 

36 amounts for depreciation the Secretary considers reasonable and other 

37 amounts the court considers just. The payment of operating losses and 

38 the other amounts and compliance with terms imposed by the court 

39 shall be in satisfaction of any claim against the Secretary resulting 

40 from the operation of the vessel. 
97 

•HR 1442 IH 

1 ‘‘(3) DEEMED OPERATION BY GOVERNMENT.—A vessel operated by 

2 the Secretary under this subsection is deemed to be a vessel operated 

3 by the United States under chapter 309 of this title. 

4 ‘‘§ 50306. Requiring testimony and records in investigations 

5 ‘‘(a) IN GENERAL.—In conducting an investigation that the Secretary of 

6 Transportation considers necessary and proper to carry out this subtitle, the 

7 Secretary may administer oaths, take evidence, and subpoena persons to 

8 testify and produce documents relevant to the matter under investigation. 

9 Persons may be required to attend or produce documents from any place 

10 in the United States at any designated place of hearing. 

11 ‘‘(b) FEES AND MILEAGE.—Persons subpoenaed by the Secretary under 

12 subsection (a) shall be paid the same fees and mileage paid to witnesses in 

13 the courts of the United States. 

14 ‘‘(c) ENFORCEMENT OF SUBPOENAS.—If a person disobeys a subpoena 

15 issued under subsection (a), the Secretary may seek an order enforcing the 

16 subpoena from the district court of the United States for the district in 

17 which the person resides or does business. Process may be served in the ju18 dicial district in which the person resides or is found. The court may issue 

19 an order to obey the subpoena and punish a refusal to obey as a contempt 

20 of court. 

21 ‘‘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. 

22 ‘‘§ 50501. Entities deemed citizens of the United States 

23 ‘‘(a) IN GENERAL.—In this subtitle, a corporation, partnership, or asso24 ciation is deemed to be a citizen of the United States only if the controlling 

25 interest is owned by citizens of the United States. However, if the corpora26 tion, partnership, or association is operating a vessel in the coastwise trade, 

27 at least 75 percent of the interest must be owned by citizens of the United 

28 States. 

29 ‘‘(b) ADDITIONAL REQUIREMENTS FOR CORPORATIONS.—In this subtitle, 

30 a corporation is deemed to be a citizen of the United States only if, in addi31 tion to satisfying the requirements in subsection (a)— 

32 ‘‘(1) it is incorporated under the laws of the United States or a 

33 State; 

34 ‘‘(2) its chief executive officer, by whatever title, and the chairman 

35 of its board of directors are citizens of the United States; and 

36 ‘‘(3) no more of its directors are noncitizens than a minority of the 

37 number necessary to constitute a quorum. 
98 

•HR 1442 IH 

1 ‘‘(c) DETERMINATION OF CONTROLLING CORPORATE INTEREST.—The 

2 controlling interest in a corporation is owned by citizens of the United 

3 States under subsection (a) only if— 

4 ‘‘(1) title to the majority of the stock in the corporation is vested 

5 in citizens of the United States free from any trust or fiduciary obliga6 tion in favor of a person not a citizen of the United States; 

7 ‘‘(2) the majority of the voting power in the corporation is vested 

8 in citizens of the United States; 

9 ‘‘(3) there is no contract or understanding by which the majority of 

10 the voting power in the corporation may be exercised, directly or indi11 rectly, in behalf of a person not a citizen of the United States; and 

12 ‘‘(4) there is no other means by which control of the corporation is 

13 given to or permitted to be exercised by a person not a citizen of the 

14 United States. 

15 ‘‘(d) DETERMINATION OF 75 PERCENT CORPORATE INTEREST.—At least 

16 75 percent of the interest in a corporation is owned by citizens of the 

17 United States under subsection (a) only if— 

18 ‘‘(1) title to at least 75 percent of the stock in the corporation is 

19 vested in citizens of the United States free from any trust or fiduciary 

20 obligation in favor of a person not a citizen of the United States; 

21 ‘‘(2) at least 75 percent of the voting power in the corporation is 

22 vested in citizens of the United States; 

23 ‘‘(3) there is no contract or understanding by which more than 25 

24 percent of the voting power in the corporation may be exercised, di25 rectly or indirectly, in behalf of a person not a citizen of the United 

26 States; and 

27 ‘‘(4) there is no other means by which control of more than 25 per28 cent of any interest in the corporation is given to or permitted to be 

29 exercised by a person not a citizen of the United States. 

30 ‘‘§ 50502. Applicability to receivers, trustees, successors, and 

31 assigns 

32 ‘‘This subtitle applies to receivers, trustees, successors, and assigns of any 

33 person to whom this subtitle applies. 

34 ‘‘§ 50503. Oceanographic research vessels 

35 ‘‘An oceanographic research vessel (as defined in section 2101 of this 

36 title) is deemed not to be engaged in trade or commerce. 

37 ‘‘§ 50504. Sailing school vessels 

38 ‘‘(a) DEFINITIONS.—In this section, the terms ‘sailing school instructor’, 

39 ‘sailing school student’, and ‘sailing school vessel’ have the meaning given 

40 those terms in section 2101 of this title. 
99 

•HR 1442 IH 

1 ‘‘(b) NOT SEAMEN.—A sailing school student or sailing school instructor 

2 is deemed not to be a seaman under— 

3 ‘‘(1) parts B, F, and G of subtitle II of this title; or 

4 ‘‘(2) the maritime law doctrines of maintenance and cure or war5 ranty of seaworthiness. 

6 ‘‘(c) NOT MERCHANT VESSEL OR ENGAGED IN TRADE OR COMMERCE.— 

7 A sailing school vessel is deemed not to be— 

8 ‘‘(1) a merchant vessel under section 11101(a)–(c) of this title; or 

9 ‘‘(2) a vessel engaged in trade or commerce. 

10 ‘‘(d) EVIDENCE OF FINANCIAL RESPONSIBILITY.—The owner or 

11 charterer of a sailing school vessel shall maintain evidence of financial re12 sponsibility to meet liability for death or injury to sailing school students 

13 and sailing school instructors on a voyage on the vessel. The amount of fi14 nancial responsibility shall be at least $50,000 for each student and instruc15 tor. Financial responsibility under this subsection may be evidenced by in16 surance or other adequate financial resources. 

17 ‘‘PART B—MERCHANT MARINE SERVICE

18 ‘‘CHAPTER 511—GENERAL 

‘‘Sec. 

‘‘51101. Policy. 

‘‘51102. Definitions. 

‘‘51103. General authority of Secretary of Transportation. 

‘‘51104. General authority of Secretary of the Navy. 

19 ‘‘§ 51101. Policy 

20 ‘‘It is the policy of the United States that merchant marine vessels of the 

21 United States should be operated by highly trained and efficient citizens of 

22 the United States and that the United States Navy and the merchant ma23 rine of the United States should work closely together to promote the max24 imum integration of the total seapower forces of the United States. 

25 ‘‘§ 51102. Definitions 

26 ‘‘In this part: 

27 ‘‘(1) ACADEMY.—The term ‘Academy’ means the United States Mer28 chant Marine Academy located at Kings Point, New York, and main29 tained under chapter 513 of this title. 

30 ‘‘(2) COST OF EDUCATION PROVIDED.—The term ‘cost of education 

31 provided’ means the financial costs incurred by the United States Gov32 ernment for providing training or financial assistance to students at 

33 the Academy and the State maritime academies, including direct finan34 cial assistance, room, board, classroom academics, and other training 

35 activities. 

36 ‘‘(3) MERCHANT MARINE OFFICER.—The term ‘merchant marine of37 ficer’ means an individual issued a license by the Coast Guard author38 izing service as— 
100 

•HR 1442 IH 

1 ‘‘(A) a master, mate, or pilot on a documented vessel that— 

2 ‘‘(i) is of at least 1,000 gross tons as measured under sec3 tion 14502 of this title or an alternate tonnage measured 

4 under section 14302 of this title as prescribed by the Sec5 retary under section 14104 of this title; and 

6 ‘‘(ii) operates on the oceans or the Great Lakes; or 

7 ‘‘(B) an engineer officer on a documented vessel propelled by 

8 machinery of at least 4,000 horsepower. 

9 ‘‘(4) STATE MARITIME ACADEMY.—The term ‘State maritime acad10 emy’ means— 

11 ‘‘(A) a State maritime academy or college sponsored by a State 

12 and assisted under chapter 515 of this title; and 

13 ‘‘(B) a regional maritime academy or college sponsored by a 

14 group of States and assisted under chapter 515 of this title. 

15 ‘‘§ 51103. General authority of Secretary of Transportation 

16 ‘‘(a) EDUCATION AND TRAINING.—The Secretary of Transportation may 

17 provide for the education and training of citizens of the United States for 

18 the safe and efficient operation of the merchant marine of the United States 

19 at all times, including operation as a naval and military auxiliary in time 

20 of war or national emergency. 

21 ‘‘(b) SURPLUS PROPERTY FOR INSTRUCTIONAL PURPOSES.— 

22 ‘‘(1) IN GENERAL.—The Secretary may cooperate with and assist the 

23 institutions named in paragraph (2) by making vessels, shipboard 

24 equipment, and other marine equipment, owned by the United States 

25 Government and determined to be excess or surplus, available to those 

26 institutions for instructional purposes, by gift, loan, sale, lease, or char27 ter on terms the Secretary considers appropriate. 

28 ‘‘(2) INSTITUTIONS.—The institutions referred to in paragraph (1) 

29 are— 

30 ‘‘(A) the United States Merchant Marine Academy; 

31 ‘‘(B) a State maritime academy; and 

32 ‘‘(C) a nonprofit training institution jointly approved by the 

33 Secretary of Transportation and the Secretary of the department 

34 in which the Coast Guard is operating as offering training courses 

35 that meet Federal regulations for maritime training. 

36 ‘‘(c) ASSISTANCE FROM OTHER AGENCIES.— 

37 ‘‘(1) IN GENERAL.—The Secretary of Transportation may secure di38 rectly from an agency, on a reimbursable basis, information, facilities, 

39 and equipment necessary to carry out this part. 

40 ‘‘(2) DETAILING PERSONNEL.—At the request of the Secretary, the 

41 head of an agency (including a military department) may detail, on a 
101 

•HR 1442 IH 

1 reimbursable basis, personnel from the agency to the Secretary to as2 sist in carrying out this part. 

3 ‘‘(d) ACADEMY PERSONNEL.—To carry out this part, the Secretary 

4 may— 

5 ‘‘(1) employ an individual as a professor, lecturer, or instructor at 

6 the Academy, without regard to the provisions of title 5 governing ap7 pointments in the competitive service; and 

8 ‘‘(2) pay the individual without regard to chapter 51 and subchapter 

9 III of chapter 53 of title 5. 

10 ‘‘§ 51104. General authority of Secretary of the Navy 

11 ‘‘The Secretary of the Navy, in cooperation with the Maritime Adminis12 trator and the head of each State maritime academy, shall ensure that— 

13 ‘‘(1) the training of future merchant marine officers at the United 

14 States Merchant Marine Academy and at State maritime academies in15 cludes programs for naval science training in the operation of merchant 

16 vessels as a naval and military auxiliary; and 

17 ‘‘(2) naval officer training programs for future officers, insofar as 

18 possible, are maintained at designated maritime academies consistent 

19 with Navy standards and needs. 

20 ‘‘CHAPTER 513—UNITED STATES MERCHANT MARINE 

21 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. 

22 ‘‘§ 51301. Maintenance of the Academy 

23 ‘‘The Secretary of Transportation shall maintain the United States Mer24 chant Marine Academy to provide instruction to individuals to prepare them 

25 for service in the merchant marine of the United States. 

26 ‘‘§ 51302. Nomination and competitive appointment of ca27 dets 

28 ‘‘(a) REQUIREMENTS.—An individual may be nominated for a competitive 

29 appointment as a cadet at the United States Merchant Marine Academy 

30 only if the individual— 

31 ‘‘(1) is a citizen or national of the United States; and 
102 

•HR 1442 IH 

1 ‘‘(2) meets the minimum requirements that the Secretary of Trans2 portation shall establish. 

3 ‘‘(b) NOMINATORS.—Nominations for competitive appointments for the 

4 positions allocated under subsection (c) may be made as follows: 

5 ‘‘(1) A Senator may nominate residents of the State represented by 

6 that Senator. 

7 ‘‘(2) A Member of the House of Representatives may nominate resi8 dents of the State in which the congressional district represented by 

9 that Member is located. 

10 ‘‘(3) A Delegate to the House of Representatives from the District 

11 of Columbia, the Virgin Islands, Guam, or American Samoa may nomi12 nate residents of the jurisdiction represented by that Delegate. 

13 ‘‘(4) The Resident Commissioner to the United States from Puerto 

14 Rico may nominate residents of Puerto Rico. 

15 ‘‘(5) The Governor of the Northern Mariana Islands may nominate 

16 residents of the Northern Mariana Islands. 

17 ‘‘(6) The Panama Canal Commission may nominate— 

18 ‘‘(A) residents, or sons or daughters of residents, of an area or 

19 installation in Panama and made available to the United States 

20 under the Panama Canal Treaty of 1977, the agreements relating 

21 to and implementing that Treaty, signed September 7, 1977, and 

22 the Agreement Between the United States of America and the Re23 public of Panama Concerning Air Traffic Control and Related 

24 Services, concluded January 8, 1979; and 

25 ‘‘(B) sons or daughters of personnel of the United States Gov26 ernment and the Panama Canal Commission residing in Panama. 

27 ‘‘(c) ALLOCATION OF POSITIONS.—Positions for competitive appointments 

28 shall be allocated each year as follows: 

29 ‘‘(1) Positions shall be allocated for residents of each State nomi30 nated by the Members of Congress from that State in proportion to 

31 the representation in Congress from that State. 

32 ‘‘(2) Four positions shall be allocated for residents of the District 

33 of Columbia nominated by the Delegate to the House of Representa34 tives from the District of Columbia. 

35 ‘‘(3) One position each shall be allocated for residents of the Virgin 

36 Islands, Guam, and American Samoa nominated by the Delegates to 

37 the House of Representatives from the Virgin Islands, Guam, and 

38 American Samoa, respectively. 

39 ‘‘(4) One position shall be allocated for a resident of Puerto Rico 

40 nominated by the Resident Commissioner to the United States from 

41 Puerto Rico. 
103 

•HR 1442 IH 

1 ‘‘(5) One position shall be allocated for a resident of the Northern 

2 Mariana Islands nominated by the Governor of the Northern Mariana 

3 Islands. 

4 ‘‘(6) Two positions shall be allocated for individuals nominated by 

5 the Panama Canal Commission. 

6 ‘‘(d) COMPETITIVE SYSTEM FOR APPOINTMENT.— 

7 ‘‘(1) ESTABLISHMENT OF SYSTEM.—The Secretary shall establish a 

8 competitive system for selecting individuals nominated under subsection 

9 (b) to fill the positions allocated under subsection (c). The system must 

10 determine the relative merit of each individual based on competitive ex11 aminations, an assessment of the individual’s academic background, 

12 and other effective indicators of motivation and probability of success13 ful completion of training at the Academy. 

14 ‘‘(2) APPOINTMENTS BY JURISDICTION.—The Secretary shall ap15 point individuals to fill the positions allocated under subsection (c) for 

16 each jurisdiction in the order of merit of the individuals nominated 

17 from that jurisdiction. 

18 ‘‘(3) REMAINING UNFILLED POSITIONS.—If positions remain unfilled 

19 after the appointments are made under paragraph (2), the Secretary 

20 shall appoint individuals to fill the positions in the order of merit of 

21 the remaining individuals nominated from all jurisdictions. 

22 ‘‘§ 51303. Non-competitive appointments 

23 ‘‘The Secretary of Transportation may appoint each year without com24 petition as cadets at the United States Merchant Marine Academy not more 

25 than 40 qualified individuals with qualities the Secretary considers to be of 

26 special value to the Academy. In making these appointments, the Secretary 

27 shall try to achieve a national demographic balance at the Academy. 

28 ‘‘§ 51304. Additional appointments from particular areas 

29 ‘‘(a) OTHER COUNTRIES IN WESTERN HEMISPHERE.—The President 

30 may appoint individuals from countries in the Western Hemisphere other 

31 than the United States to receive instruction at the United States Merchant 

32 Marine Academy. Not more than 12 individuals may receive instruction 

33 under this subsection at the same time, and not more than 2 individuals 

34 from the same country may receive instruction under this subsection at the 

35 same time. 

36 ‘‘(b) OTHER COUNTRIES GENERALLY.— 

37 ‘‘(1) APPOINTMENT.—The Secretary of Transportation, with the ap38 proval of the Secretary of State, may appoint individuals from coun39 tries other than the United States to receive instruction at the Acad40 emy. Not more than 30 individuals may receive instruction under this 

41 subsection at the same time. 
104 

•HR 1442 IH 

1 ‘‘(2) REIMBURSEMENT.—The Secretary of Transportation shall en2 sure that the country from which an individual comes under this sub3 section will reimburse the Secretary for the cost (as determined by the 

4 Secretary) of the instruction and allowances received by the individual. 

5 ‘‘(c) PANAMA.— 

6 ‘‘(1) APPOINTMENT.—The Secretary of Transportation, with the ap7 proval of the Secretary of State, may appoint individuals from Panama 

8 to receive instruction at the Academy. Individuals appointed under this 

9 subsection are in addition to those appointed under any other provision 

10 of this chapter. 

11 ‘‘(2) REIMBURSEMENT.—The Secretary of Transportation shall be 

12 reimbursed for the cost (as determined by the Secretary) of the instruc13 tion and allowances received by an individual appointed under this sub14 section. 

15 ‘‘(d) ALLOWANCES AND REGULATIONS.—Individuals receiving instruction 

16 under this section are entitled to the same allowances and are subject to 

17 the same regulations on admission, attendance, discipline, resignation, dis18 charge, dismissal, and graduation, as cadets at the Academy appointed from 

19 the United States. 

20 ‘‘§ 51305. Prohibited basis for appointment 

21 ‘‘Preference may not be given to an individual for appointment as a cadet 

22 at the United States Merchant Marine Academy because one or more mem23 bers of the individual’s immediate family are alumni of the Academy. 

24 ‘‘§ 51306. Cadet commitment agreements 

25 ‘‘(a) AGREEMENT REQUIREMENTS.—A citizen of the United States ap26 pointed as a cadet at the United States Merchant Marine Academy must 

27 sign, as a condition of the appointment, an agreement to— 

28 ‘‘(1) complete the course of instruction at the Academy; 

29 ‘‘(2) fulfill the requirements for a license as an officer in the mer30 chant marine of the United States before graduation from the Acad31 emy; 

32 ‘‘(3) maintain a valid license as an officer in the merchant marine 

33 of the United States for at least 6 years after graduation from the 

34 Academy, accompanied by the appropriate national and international 

35 endorsements and certification required by the Coast Guard for service 

36 aboard vessels on domestic and international voyages; 

37 ‘‘(4) apply for, and accept if tendered, an appointment as a commis38 sioned officer in the Naval Reserve (including the Merchant Marine Re39 serve, Naval Reserve), the Coast Guard Reserve, or any other reserve 

40 unit of an armed force of the United States, and, if tendered the ap-
105 

•HR 1442 IH 

1 pointment, to serve for at least 6 years after graduation from the Acad2 emy; 

3 ‘‘(5) serve the foreign and domestic commerce and the national de4 fense of the United States for at least 5 years after graduation from 

5 the Academy— 

6 ‘‘(A) as a merchant marine officer on a documented vessel or 

7 a vessel owned and operated by the United States Government or 

8 by a State; 

9 ‘‘(B) as an employee in a United States maritime-related indus10 try, profession, or marine science (as determined by the Secretary 

11 of Transportation), if the Secretary determines that service under 

12 subparagraph (A) is not available to the individual; 

13 ‘‘(C) as a commissioned officer on active duty in an armed force 

14 of the United States, as a commissioned officer in the National 

15 Oceanic and Atmospheric Administration, or in other maritime-re16 lated Federal employment which serves the national security inter17 ests of the United States, as determined by the Secretary; or 

18 ‘‘(D) by a combination of the service alternatives referred to in 

19 subparagraphs (A)–(C); and 

20 ‘‘(6) report to the Secretary on compliance with this subsection. 

21 ‘‘(b) FAILURE TO COMPLETE COURSE OF INSTRUCTION.— 

22 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

23 that an individual who has attended the Academy for at least 2 years 

24 has failed to fulfill the part of the agreement described in subsection 

25 (a)(1), the individual may be ordered by the Secretary of Defense to 

26 serve on active duty in one of the armed forces of the United States 

27 for a period of not more than 2 years. In cases of hardship as deter28 mined by the Secretary of Transportation, the Secretary of Transpor29 tation may waive this paragraph in whole or in part. 

30 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

31 unwilling to order an individual to serve on active duty under para32 graph (1), or if the Secretary of Transportation determines that reim33 bursement of the cost of education provided would better serve the in34 terests of the United States, the Secretary of Transportation may re35 cover from the individual the cost of education provided by the Govern36 ment. 

37 ‘‘(c) FAILURE TO CARRY OUT OTHER REQUIREMENTS.— 

38 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

39 that an individual has failed to fulfill any part of the agreement de40 scribed in subsection (a)(2)–(6), the individual may be ordered to serve 

41 on active duty for a period of at least 3 years but not more than the 
106 

•HR 1442 IH 

1 unexpired period (as determined by the Secretary) of the service re2 quired by subsection (a)(5). The Secretary of Transportation, in con3 sultation with the Secretary of Defense, shall determine in which serv4 ice the individual shall serve. In cases of hardship as determined by 

5 the Secretary of Transportation, the Secretary of Transportation may 

6 waive this paragraph in whole or in part. 

7 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

8 unwilling to order an individual to serve on active duty under para9 graph (1), or if the Secretary of Transportation determines that reim10 bursement of the cost of education provided would better serve the in11 terests of the United States, the Secretary of Transportation may re12 cover from the individual the cost of education provided. The Secretary 

13 may reduce the amount to be recovered to reflect partial performance 

14 of service obligations and other factors the Secretary determines merit 

15 a reduction. 

16 ‘‘(d) ACTIONS TO RECOVER COST.—To aid in the recovery of the cost 

17 of education provided by the Government under a commitment agreement 

18 under this section, the Secretary of Transportation may— 

19 ‘‘(1) request the Attorney General to bring a civil action against the 

20 individual; and 

21 ‘‘(2) make use of the Federal debt collection procedures in chapter 

22 176 of title 28 or other applicable administrative remedies. 

23 ‘‘§ 51307. Places of training 

24 ‘‘The Secretary of Transportation may provide for the training of cadets 

25 at the United States Merchant Marine Academy— 

26 ‘‘(1) on vessels owned or subsidized by the United States Govern27 ment; 

28 ‘‘(2) on other documented vessels, with the permission of the owner; 

29 and 

30 ‘‘(3) in shipyards or plants and with industrial or educational organi31 zations. 

32 ‘‘§ 51308. Uniforms, textbooks, and transportation allow33 ances 

34 ‘‘The Secretary of Transportation shall provide cadets at the United 

35 States Merchant Marine Academy— 

36 ‘‘(1) all required uniforms and textbooks; and 

37 ‘‘(2) allowances for transportation (including reimbursement of trav38 eling expenses) when traveling under orders as a cadet. 

39 ‘‘§ 51309. Academic degree 

40 ‘‘(a) BACHELOR’S DEGREE.— 
107 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—The Superintendent of the United States Mer2 chant Marine Academy may confer the degree of bachelor of science 

3 on an individual who— 

4 ‘‘(A) has met the conditions prescribed by the Secretary of 

5 Transportation; and 

6 ‘‘(B) if a citizen of the United States, has passed the examina7 tion for a merchant marine officer’s license. 

8 ‘‘(2) EFFECT OF PHYSICAL DISQUALIFICATION.—An individual not 

9 allowed to take the examination for a merchant marine officer’s license 

10 only because of physical disqualification may not be denied a degree for 

11 not taking the examination. 

12 ‘‘(b) MASTER’S DEGREE.—The Superintendent of the Academy may con13 fer a master’s degree on an individual who has met the conditions pre14 scribed by the Secretary. A master’s degree program may be funded 

15 through non-appropriated funds. To maintain the appropriate academic 

16 standards, the program shall be accredited by the appropriate accreditation 

17 body. The Secretary may prescribe regulations necessary to administer such 

18 a program. 

19 ‘‘(c) GRADUATION NOT ENTITLEMENT TO HOLD LICENSE.—Graduation 

20 from the Academy does not entitle an individual to hold a license author21 izing service on a merchant vessel. 

22 ‘‘§ 51310. Deferment of service obligation under cadet com23 mitment agreements 

24 ‘‘The Secretary of Transportation may defer the service commitment of 

25 an individual under section 51306(a)(5) of this title (as specified in the 

26 cadet commitment agreement) for not more than 2 years if the individual 

27 is engaged in a graduate course of study approved by the Secretary. How28 ever, deferment of service as a commissioned officer under section 

29 51306(a)(5) must be approved by the Secretary of the military department 

30 that has jurisdiction over the service or by the Secretary of Commerce for 

31 service with the National Oceanic and Atmospheric Administration. 

32 ‘‘§ 51311. Midshipman status in the Naval Reserve 

33 ‘‘(a) APPLICATION REQUIREMENT.—Before being appointed as a cadet at 

34 the United States Merchant Marine Academy, a citizen of the United States 

35 must agree to apply for midshipman status in the Naval Reserve (including 

36 the Merchant Marine Reserve, Naval Reserve). 

37 ‘‘(b) APPOINTMENT.— 

38 ‘‘(1) IN GENERAL.—A citizen of the United States appointed as a 

39 cadet at the Academy shall be appointed by the Secretary of the Navy 

40 as a midshipman in the Naval Reserve (including the Merchant Marine 

41 Reserve, Naval Reserve). 
108 

•HR 1442 IH 

1 ‘‘(2) RIGHTS AND PRIVILEGES.—The Secretary of the Navy shall 

2 provide for cadets of the Academy who are midshipmen in the United 

3 States Naval Reserve to be— 

4 ‘‘(A) issued an identification card (referred to as a ‘military ID 

5 card’); and 

6 ‘‘(B) entitled to all rights and privileges in accordance with the 

7 same eligibility criteria as apply to other members of the Ready 

8 Reserve of the reserve components of the armed forces. 

9 ‘‘(3) COORDINATION.—The Secretary of the Navy shall carry out 

10 paragraphs (1) and (2) in coordination with the Secretary of Transpor11 tation. 

12 ‘‘§ 51312. Board of Visitors 

13 ‘‘(a) IN GENERAL.—A Board of Visitors to the United States Merchant 

14 Marine Academy shall be established, for a term of 2 years commencing at 

15 the beginning of each Congress, to visit the Academy annually on a date 

16 determined by the Secretary of Transportation and to make recommenda17 tions on the operation of the Academy. 

18 ‘‘(b) APPOINTMENT.— 

19 ‘‘(1) IN GENERAL.—The Board shall be composed of— 

20 ‘‘(A) 2 Senators appointed by the chairman of the Committee 

21 on Commerce, Science, and Transportation of the Senate; 

22 ‘‘(B) 3 Members of the House of Representatives appointed by 

23 the chairman of the Committee on Armed Services of the House 

24 of Representatives; 

25 ‘‘(C) 1 Senator appointed by the Vice President; 

26 ‘‘(D) 2 Members of the House of Representatives appointed by 

27 the Speaker of the House of Representatives; and 

28 ‘‘(E) the chairmen of the Committee on Commerce, Science, and 

29 Transportation of the Senate and the Committee on Armed Serv30 ices of the House of Representatives, as ex officio members. 

31 ‘‘(2) SUBSTITUTE APPOINTMENT.—If an appointed member of the 

32 Board is unable to visit the Academy as provided in subsection (a), an33 other individual may be appointed as a substitute in the manner pro34 vided in paragraph (1). 

35 ‘‘(c) STAFF.—The chairmen of the Committee on Commerce, Science, and 

36 Transportation of the Senate and the Committee on Armed Services of the 

37 House of Representatives may designate staff members of their committees 

38 to serve without reimbursement as staff for the Board. 

39 ‘‘(d) TRAVEL EXPENSES.—When serving away from home or regular 

40 place of business, a member of the Board or a staff member designated 
109 

•HR 1442 IH 

1 under subsection (c) shall be allowed travel expenses, including per diem in 

2 lieu of subsistence, as authorized by section 5703 of title 5. 

3 ‘‘§ 51313. Advisory Board 

4 ‘‘(a) IN GENERAL.—An Advisory Board to the United States Merchant 

5 Marine Academy shall be established to visit the Academy at least once dur6 ing each academic year, for the purpose of examining the course of instruc7 tion and management of the Academy and advising the Maritime Adminis8 trator and the Superintendent of the Academy. 

9 ‘‘(b) APPOINTMENT AND TERMS.—The Board shall be composed of not 

10 more than 7 individuals appointed by the Secretary of Transportation. The 

11 individuals must be distinguished in education and other fields related to 

12 the Academy. Members of the Board shall be appointed for terms of not 

13 more than 3 years and may be reappointed. The Secretary shall designate 

14 one of the members as chairman. 

15 ‘‘(c) TRAVEL EXPENSES.—When serving away from home or regular 

16 place of business, a member of the Board shall be allowed travel expenses, 

17 including per diem in lieu of subsistence, as authorized by section 5703 of 

18 title 5. 

19 ‘‘(d) RELATIONSHIP TO OTHER LAW.—The Federal Advisory Committee 

20 Act (5 App. U.S.C.) does not apply to the Board. 

21 ‘‘§ 51314. Limitation on charges and fees for attendance 

22 ‘‘(a) PROHIBITION.—Except as provided in subsection (b), no charge or 

23 fee for tuition, room, or board for attendance at the United States Merchant 

24 Marine Academy may be imposed unless the charge or fee is specifically au25 thorized by a law enacted after October 5, 1994. 

26 ‘‘(b) EXCEPTION.—The prohibition specified in subsection (a) does not 

27 apply with respect to any item or service provided to cadets for which a 

28 charge or fee is imposed as of October 5, 1994. The Secretary of Transpor29 tation shall notify Congress of any change made by the Academy in the 

30 amount of a charge or fee authorized under this subsection. 

31 ‘‘CHAPTER 515—STATE MARITIME ACADEMY SUPPORT 

32 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. 
110 

•HR 1442 IH 

1 ‘‘§ 51501. General support program 

2 ‘‘(a) ASSISTANCE TO STATE MARITIME ACADEMIES.—The Secretary of 

3 Transportation shall cooperate with and assist State maritime academies in 

4 providing instruction to individuals to prepare them for service in the mer5 chant marine of the United States. 

6 ‘‘(b) COURSE DEVELOPMENT.—The Secretary shall provide to each State 

7 maritime academy guidance and assistance in developing courses on the op8 eration and maintenance of new vessels, on equipment, and on innovations 

9 being introduced to the merchant marine of the United States. 

10 ‘‘§ 51502. Detailing of personnel 

11 ‘‘At the request of the Governor of a State, the President may detail, 

12 without reimbursement, personnel of the Navy, the Coast Guard, and the 

13 Maritime Service to a State maritime academy to serve as a superintendent, 

14 professor, lecturer, or instructor at the academy. 

15 ‘‘§ 51503. Regional maritime academies 

16 ‘‘The Governors of the States cooperating to sponsor a regional maritime 

17 academy shall designate in writing one of those States to conduct the affairs 

18 of that academy. A regional maritime academy is eligible for assistance from 

19 the United States Government on the same basis as a State maritime acad20 emy sponsored by a single State. 

21 ‘‘§ 51504. Use of training vessels 

22 ‘‘(a) APPLICATIONS TO USE VESSELS.—The Governor of a State spon23 soring a State maritime academy (or the Governor of the State designated 

24 to conduct the affairs of a regional maritime academy) may apply in writing 

25 to the Secretary of Transportation to obtain the use of a training vessel for 

26 the academy. A vessel provided under this section remains the property of 

27 the United States Government. 

28 ‘‘(b) GENERAL AUTHORITY.—Subject to subsection (c), the Secretary 

29 may provide to a State maritime academy, for use as a training vessel, a 

30 suitable vessel under the control of the Secretary or made available to the 

31 Secretary under subsection (e). If a suitable vessel is not available, the Sec32 retary may build and provide a suitable vessel. 

33 ‘‘(c) APPROVAL REQUIREMENTS.—The Secretary may provide a vessel 

34 under this section only if— 

35 ‘‘(1) an application has been made under subsection (a); 

36 ‘‘(2) the State maritime academy satisfies section 51506(a) of this 

37 title; and 

38 ‘‘(3) a suitable port will be available for the safe mooring of the ves39 sel while the academy is using the vessel. 

40 ‘‘(d) PREPARATION AND MAINTENANCE.—A vessel provided under this 

41 section shall be— 
111 

•HR 1442 IH 

1 ‘‘(1) repaired, reconditioned, and equipped (with all apparel, charts, 

2 books, and instruments of navigation) as necessary for use as a train3 ing vessel; and 

4 ‘‘(2) maintained in good repair by the Secretary. 

5 ‘‘(e) AGENCY VESSELS.—An agency may provide to the Secretary, for use 

6 by a State maritime academy, a vessel (including equipment) that— 

7 ‘‘(1) is suitable for training purposes; and 

8 ‘‘(2) can be provided without detriment to the service to which the 

9 vessel is assigned. 

10 ‘‘(f) FUEL COSTS.—The Secretary may pay to a State maritime academy 

11 the costs of fuel used by a vessel provided under this section while used for 

12 training. 

13 ‘‘(g) REMOVING VESSELS FROM SERVICE AND VESSEL SHARING.—The 

14 Secretary may not— 

15 ‘‘(1) take a vessel, currently in use as a training vessel under this 

16 section, out of service to implement an alternative program (including 

17 vessel sharing) unless the vessel is incapable of being maintained in 

18 good repair as required by subsection (d); or 

19 ‘‘(2) implement a program requiring a State maritime academy to 

20 share its training vessel with another State maritime academy, except 

21 with the express consent of Congress. 

22 ‘‘§ 51505. Annual payments for maintenance and support 

23 ‘‘(a) PAYMENT AGREEMENTS.—The Secretary of Transportation may 

24 make an agreement (effective for not more than 4 years) with the following 

25 academies to provide annual payments to those academies for their mainte26 nance and support: 

27 ‘‘(1) One State maritime academy in each State that satisfies section 

28 51506(a) of this title. 

29 ‘‘(2) Each regional maritime academy that satisfies section 51506(a) 

30 of this title. 

31 ‘‘(b) PAYMENTS.— 

32 ‘‘(1) IN GENERAL.—Subject to paragraph (2), an annual payment to 

33 an academy under subsection (a) shall be at least equal to the amount 

34 given to the academy for its maintenance and support by the State in 

35 which it is located, or, for a regional maritime academy, by all States 

36 cooperating to sponsor the academy. 

37 ‘‘(2) MAXIMUM.—The amount under paragraph (1) may not be more 

38 than $25,000. However, if the academy satisfies section 51506(b) of 

39 this title, the amount shall be— 

40 ‘‘(A) $100,000 for a State maritime academy; and 

41 ‘‘(B) $200,000 for a regional maritime academy. 
112 

•HR 1442 IH 

1 ‘‘§ 51506. Conditions to receiving payments and use of ves2 sels 

3 ‘‘(a) GENERAL CONDITIONS.—As conditions of receiving an annual pay4 ment or the use of a vessel under this chapter, a State maritime academy 

5 must— 

6 ‘‘(1) provide courses of instruction on navigation, marine engineering 

7 (including steam and diesel propulsion), the operation and maintenance 

8 of new vessels and equipment, and innovations being introduced to the 

9 merchant marine of the United States; 

10 ‘‘(2) agree in writing to conform to the standards for courses, train11 ing facilities, admissions, and instruction that the Secretary of Trans12 portation may establish after consultation with the superintendents of 

13 State maritime academies; and 

14 ‘‘(3) agree in writing to require, as a condition for graduation, that 

15 each individual who is a citizen of the United States and who is attend16 ing the academy in a merchant marine officer preparation program 

17 pass the examination required for the issuance of a license under sec18 tion 7101 of this title. 

19 ‘‘(b) ADDITIONAL CONDITION TO PAYMENTS OF MORE THAN $25,000.— 

20 As a condition of receiving an annual payment of more than $25,000 under 

21 section 51505 of this title, a State maritime academy also must agree to 

22 admit each year a number of citizens of the United States who meet its ad23 mission requirements and reside in a State not supporting that academy. 

24 The Secretary shall determine the number of individuals to be admitted by 

25 each academy under this subsection. The number may not be more than 

26 one-third of the total number of individuals attending the academy at any 

27 time. 

28 ‘‘§ 51507. Places of training 

29 ‘‘The Secretary of Transportation may provide for the training of stu30 dents attending a State maritime academy— 

31 ‘‘(1) on vessels owned or subsidized by the United States Govern32 ment; 

33 ‘‘(2) on other documented vessels, with the permission of the owner; 

34 and 

35 ‘‘(3) in shipyards or plants and with industrial or educational organi36 zations. 

37 ‘‘§ 51508. Allowances for students 

38 ‘‘Under regulations prescribed by the Secretary of Transportation, a stu39 dent at a State maritime academy shall receive from the Secretary allow40 ances for transportation (including reimbursement of traveling expenses) 
113 

•HR 1442 IH 

1 when traveling under orders to receive training under section 51507 of this 

2 title. 

3 ‘‘§ 51509. Student incentive payment agreements 

4 ‘‘(a) GENERAL AUTHORITY.—If a State maritime academy has an agree5 ment with the Secretary of Transportation under section 51505 of this title, 

6 the Secretary may make an agreement with a student at the academy who 

7 is a citizen of the United States to make student incentive payments to the 

8 individual. An agreement with a student may not be effective for more than 

9 4 academic years. The Secretary shall allocate payments under this section 

10 among the various State maritime academies in an equitable manner. 

11 ‘‘(b) PAYMENTS.—Payments under an agreement under this section shall 

12 be equal to $4,000 each academic year and be paid, as prescribed by the 

13 Secretary, while the individual is attending the academy. The payments 

14 shall be used for uniforms, books, and subsistence. 

15 ‘‘(c) MIDSHIPMAN AND ENLISTED RESERVE STATUS.—An agreement 

16 under this section shall require the student to accept midshipman and en17 listed reserve status in the Naval Reserve (including the Merchant Marine 

18 Reserve, Naval Reserve) before receiving any payments under the agree19 ment. 

20 ‘‘(d) AGREEMENT REQUIREMENTS.—An agreement under this section 

21 shall require the student to— 

22 ‘‘(1) complete the course of instruction at the academy the individual 

23 is attending; 

24 ‘‘(2) take the examination for a license as an officer in the merchant 

25 marine of the United States before graduation from the academy and 

26 fulfill the requirements for such a license within 3 months after grad27 uation from the academy; 

28 ‘‘(3) maintain a valid license as an officer in the merchant marine 

29 of the United States for at least 6 years after graduation from the 

30 academy, accompanied by the appropriate national and international 

31 endorsements and certification required by the Coast Guard for service 

32 aboard vessels on domestic and international voyages; 

33 ‘‘(4) accept, if tendered, an appointment as a commissioned officer 

34 in the Naval Reserve (including the Merchant Marine Reserve, Naval 

35 Reserve), the Coast Guard Reserve, or any other reserve unit of an 

36 armed force of the United States, and, if tendered the appointment, to 

37 serve for at least 6 years after graduation from the academy; 

38 ‘‘(5) serve the foreign and domestic commerce and the national de39 fense of the United States for at least 3 years after graduation from 

40 the academy— 
114 

•HR 1442 IH 

1 ‘‘(A) as a merchant marine officer on a documented vessel or 

2 a vessel owned and operated by the United States Government or 

3 by a State; 

4 ‘‘(B) as an employee in a United States maritime-related indus5 try, profession, or marine science (as determined by the Sec6 retary), if the Secretary determines that service under subpara7 graph (A) is not available to the individual; 

8 ‘‘(C) as a commissioned officer on active duty in an armed force 

9 of the United States, as a commissioned officer in the National 

10 Oceanic and Atmospheric Administration, or in other maritime-re11 lated Federal employment which serves the national security inter12 ests of the United States, as determined by the Secretary; or 

13 ‘‘(D) by a combination of the service alternatives referred to in 

14 subparagraphs (A)–(C); and 

15 ‘‘(6) report to the Secretary on compliance with this subsection. 

16 ‘‘(e) FAILURE TO COMPLETE COURSE OF INSTRUCTION.— 

17 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

18 that an individual who has accepted the payments described in sub19 section (b) for a minimum of 2 academic years has failed to fulfill the 

20 part of the agreement described in subsection (d)(1), the individual 

21 may be ordered by the Secretary of Defense to serve on active duty 

22 in the armed forces of the United States for a period of not more than 

23 2 years. In cases of hardship as determined by the Secretary of Trans24 portation, the Secretary of Transportation may waive this paragraph 

25 in whole or in part. 

26 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

27 unwilling to order an individual to serve on active duty under para28 graph (1), or if the Secretary of Transportation determines that reim29 bursement of the cost of education provided would better serve the in30 terests of the United States, the Secretary of Transportation may re31 cover from the individual the amount of student incentive payments, 

32 plus interest and attorney fees. The Secretary may reduce the amount 

33 to be recovered to reflect partial performance of service obligations and 

34 other factors the Secretary determines merit a reduction. 

35 ‘‘(f) FAILURE TO CARRY OUT OTHER REQUIREMENTS.— 

36 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

37 that an individual has failed to fulfill any part of the agreement de38 scribed in subsection (d)(2)–(6), the individual may be ordered to serve 

39 on active duty for a period of at least 2 years but not more than the 

40 unexpired period (as determined by the Secretary) of the service re41 quired by subsection (d)(5). The Secretary of Transportation, in con-
115 

•HR 1442 IH 

1 sultation with the Secretary of Defense, shall determine in which serv2 ice the individual shall serve. In cases of hardship as determined by 

3 the Secretary of Transportation, the Secretary of Transportation may 

4 waive this paragraph in whole or in part. 

5 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

6 unwilling to order an individual to serve on active duty under para7 graph (1), or if the Secretary of Transportation determines that reim8 bursement of the cost of education provided would better serve the in9 terests of the United States, the Secretary of Transportation may re10 cover from the individual the amount of student incentive payments, 

11 plus interest and attorney fees. The Secretary may reduce the amount 

12 to be recovered to reflect partial performance of service obligations and 

13 other factors the Secretary determines merit a reduction. 

14 ‘‘(g) ACTIONS TO RECOVER COST.—To aid in the recovery of the cost 

15 of education provided by the Government under a commitment agreement 

16 under this section, the Secretary of Transportation may— 

17 ‘‘(1) request the Attorney General to bring a civil action against the 

18 individual; and 

19 ‘‘(2) make use of the Federal debt collection procedures in chapter 

20 176 of title 28 or other applicable administrative remedies. 

21 ‘‘§ 51510. Deferment of service obligation under student in22 centive payment agreements 

23 ‘‘The Secretary of Transportation may defer the service commitment of 

24 an individual under section 51509(d)(5) of this title (as specified in the 

25 agreement under section 51509) for not more than 2 years if the individual 

26 is engaged in a graduate course of study approved by the Secretary. How27 ever, deferment of service as a commissioned officer on active duty must be 

28 approved by the Secretary of the affected military department (or the Sec29 retary of Commerce, for service with the National Oceanic and Atmospheric 

30 Administration). 

31 ‘‘§ 51511. Midshipman status in the Naval Reserve 

32 ‘‘A citizen of the United States attending a State maritime academy may 

33 be appointed by the Secretary of the Navy as a midshipman in the Naval 

34 Reserve (including the Merchant Marine Reserve, Naval Reserve). 

35 ‘‘CHAPTER 517—OTHER SUPPORT FOR MERCHANT 

36 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. 
116 

•HR 1442 IH 

1 ‘‘§ 51701. United States Maritime Service 

2 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may es3 tablish and maintain a voluntary organization, to be known as the United 

4 States Maritime Service, for the training of citizens of the United States 

5 to serve on merchant vessels of the United States. 

6 ‘‘(b) SPECIFIC AUTHORITY.—The Secretary may— 

7 ‘‘(1) determine the number of individuals to be enrolled for training 

8 and reserve purposes in the Service; 

9 ‘‘(2) fix the rates of pay and allowances of the individuals without 

10 regard to chapter 51 or subchapter III of chapter 53 of title 5; 

11 ‘‘(3) prescribe the course of study and the periods of training for the 

12 Service; and 

13 ‘‘(4) prescribe the uniform of the Service and the rules on providing 

14 and wearing the uniform. 

15 ‘‘(c) RANKS, GRADES, AND RATINGS.—The ranks, grades, and ratings for 

16 personnel of the Service shall be the same as those prescribed for personnel 

17 of the Coast Guard. 

18 ‘‘(d) MEDALS AND AWARDS.—The Secretary may establish and maintain 

19 a medals and awards program to recognize distinguished service, superior 

20 achievement, professional performance, and other commendable achievement 

21 by personnel of the Service. 

22 ‘‘§ 51702. Civilian nautical schools 

23 ‘‘(a) DEFINITION.—In this section, the term ‘civilian nautical school’ 

24 means a school operated in the United States (except the United States 

25 Merchant Marine Academy, a State maritime academy, or another school 

26 operated by the United States Government) that offers instruction to indi27 viduals quartered on a vessel primarily to train them for service in the mer28 chant marine. 

29 ‘‘(b) INSPECTION.—Each civilian nautical school is subject to inspection 

30 by the Secretary of Transportation. 

31 ‘‘(c) RATING AND CERTIFICATION.—The Secretary may, under regula32 tions the Secretary may prescribe, provide for the rating and certification 

33 of civilian nautical schools as to the adequacy of their course of instruction, 

34 the competence of their instructors, and the suitability of the equipment 

35 used in their course of instruction. 

36 ‘‘§ 51703. Additional training 

37 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may pro38 vide additional training on maritime subjects to supplement other training 

39 opportunities and make the training available to the personnel of the mer40 chant marine of the United States and individuals preparing for a career 

41 in the merchant marine of the United States. 
117 

•HR 1442 IH 

1 ‘‘(b) EQUIPMENT, SUPPLIES, AND CONTRACTS.—The Secretary may— 

2 ‘‘(1) prepare or buy equipment or supplies required for the additional 

3 training; and 

4 ‘‘(2) without regard to section 3709 of the Revised Statutes (41 

5 U.S.C. 5), make contracts for services the Secretary considers nec6 essary to prepare the equipment and supplies and to supervise and ad7 minister the additional training. 

8 ‘‘§ 51704. Training for maritime oil pollution prevention, re9 sponse, and clean-up 

10 ‘‘(a) ASSISTANCE IN ESTABLISHING PROGRAM.—The Secretary of Trans11 portation shall assist maritime training institutions approved by the Sec12 retary in establishing a training program for maritime oil pollution preven13 tion, response, and clean-up. 

14 ‘‘(b) PROVIDING TRAINING VESSELS.—Subject to subsection (c), the Sec15 retary may provide, with title free of all liens, to maritime training institu16 tions that have a program established under subsection (a), offshore supply 

17 vessels and tug/supply vessels that were built in the United States and are 

18 in the possession of the Maritime Administration because of a default on 

19 a loan guaranteed under chapter 537 of this title. 

20 ‘‘(c) REQUIREMENTS.—In addition to any other requirements the Sec21 retary considers appropriate, the following requirements apply to vessels 

22 provided under this section: 

23 ‘‘(1) The vessel shall be offered to the institution at a location se24 lected by the Secretary. 

25 ‘‘(2) The institution shall use the vessel to train students and appro26 priate maritime industry personnel in oil spill prevention, response, 

27 clean-up, and related skills. 

28 ‘‘(3) The institution shall make the vessel and qualified students 

29 available to appropriate Federal, State, and local oil spill response au30 thorities when there is a maritime oil spill. 

31 ‘‘(4) The institution may not sell, trade, charter, donate, scrap, or 

32 in any way alter or dispose of the vessel without prior approval of the 

33 Secretary. 

34 ‘‘(5) The institution may not use the vessel in competition with a 

35 privately-owned vessel documented under chapter 121 of this title or 

36 titled under the law of a State, unless necessary to carry out this sec37 tion. 

38 ‘‘(6) When the institution can no longer use the vessel for its train39 ing program, the institution shall return the vessel to the Secretary. 

40 The Secretary shall take possession at the institution and thereafter 
118 

•HR 1442 IH 

1 may provide the vessel to another institution under this section or dis2 pose of the vessel. 

3 ‘‘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. 

4 ‘‘§ 51901. Awards for individual acts or service 

5 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may 

6 award decorations and medals of appropriate design (including ribbons, rib7 bon bars, emblems, rosettes, miniature facsimiles, plaques, citations, or 

8 other suitable devices or insignia) for individual acts or service in the mer9 chant marine of the United States. The design may be similar to the design 

10 of a decoration or medal authorized for members of the armed forces for 

11 similar acts or service. 

12 ‘‘(b) SPECIFIC AUTHORITY.—The Secretary may award— 

13 ‘‘(1) a Merchant Marine Distinguished Service Medal to an indi14 vidual for outstanding acts, conduct, or valor beyond the line of duty; 

15 ‘‘(2) a Merchant Marine Meritorious Service Medal to an individual 

16 for meritorious acts, conduct, or valor in the line of duty, but not of 

17 the outstanding character that would warrant the award of the Mer18 chant Marine Distinguished Service Medal; 

19 ‘‘(3) a decoration or medal to an individual for service during a war, 

20 national emergency proclaimed by the President or Congress, or oper21 ations by the armed forces outside the continental United States under 

22 conditions of danger to life and property; and 

23 ‘‘(4) a decoration or medal to an individual for other acts or service 

24 of conspicuous gallantry, intrepidity, and extraordinary heroism under 

25 conditions of danger to life and property that would warrant a similar 

26 decoration or medal for a member of the armed forces. 

27 ‘‘§ 51902. Gallant Ship Award 

28 ‘‘(a) AWARDS TO VESSELS.—The Secretary of Transportation may award 

29 a Gallant Ship Award and a citation to a vessel (including a foreign vessel) 

30 participating in outstanding or gallant action in a marine disaster or other 

31 emergency to save life or property at sea. The Secretary may award a 

32 plaque to the vessel, and a replica of the plaque may be preserved as a per33 manent historical record. 

34 ‘‘(b) AWARDS TO CREWS.—The Secretary of Transportation may award 

35 an appropriate citation ribbon bar to the master and each individual serv-
119 

•HR 1442 IH 

1 ing, at the time of the action, on a vessel issued an award under subsection 

2 (a). 

3 ‘‘(c) CONSULTATION.—The Secretary of Transportation shall consult with 

4 the Secretary of State before awarding an award or citation to a foreign 

5 vessel or its crew under this section. 

6 ‘‘§ 51903. Multiple awards 

7 ‘‘An individual may not be awarded more than one of any type of decora8 tion or medal under this chapter. For each succeeding act or service justi9 fying the same decoration or medal, a suitable device may be awarded to 

10 be worn with the decoration or medal. 

11 ‘‘§ 51904. Presentation to representatives 

12 ‘‘If an individual to be issued an award under this chapter is unable to 

13 accept the award personally, the Secretary of Transportation may present 

14 the award to an appropriate representative. 

15 ‘‘§ 51905. Flags and grave markers 

16 ‘‘Except as authorized under another law, the Secretary of Transpor17 tation may issue, at no cost, a flag of the United States and a grave marker 

18 to the family or personal representative of a deceased individual who served 

19 in the merchant marine of the United States in support of the armed forces 

20 of the United States or its allies during a war or national emergency. 

21 ‘‘§ 51906. Special certificates for civilian service to armed 

22 forces 

23 ‘‘(a) GENERAL AUTHORITY.—The Maritime Administrator may issue a 

24 special certificate to an individual, or the personal representative of an indi25 vidual, in recognition of service of that individual in the merchant marine 

26 of the United States, if the service has been determined to be active duty 

27 under section 401 of the GI Bill Improvement Act of 1977 (Public Law 95– 

28 202; 38 U.S.C. 106 note). 

29 ‘‘(b) RELATIONSHIP TO OTHER LAWS.—Issuance of a certificate under 

30 subsection (a) does not entitle an individual to any rights, privileges, or ben31 efits under a law of the United States. 

32 ‘‘§ 51907. Manufacture and sale of awards and replacements 

33 ‘‘The Secretary of Transportation may— 

34 ‘‘(1) authorize private persons to manufacture decorations and med35 als authorized under this chapter or a prior law; and 

36 ‘‘(2) provide at cost, or authorize private persons to sell at reason37 able prices, replacements for those decorations and medals. 
120 

•HR 1442 IH 

1 ‘‘§ 51908. Prohibition against unauthorized manufacture, 

2 sale, possession, or display of awards 

3 ‘‘(a) PROHIBITION.—Except as authorized under this chapter, a person 

4 may not manufacture, sell, possess, or display a decoration or medal pro5 vided for in this chapter. 

6 ‘‘(b) CIVIL PENALTY.—A person violating this section is liable to the 

7 United States Government for a civil penalty of not more than $2,000. 

8 ‘‘CHAPTER 521—MISCELLANEOUS 

‘‘Sec. 

‘‘52101. Reemployment rights for certain merchant seamen. 

9 ‘‘§ 52101. Reemployment rights for certain merchant seamen 

10 ‘‘(a) IN GENERAL.—An individual who is certified by the Secretary of 

11 Transportation under subsection (c) shall be entitled to reemployment rights 

12 and other benefits substantially equivalent to the rights and benefits pro13 vided for by chapter 43 of title 38 for any member of a reserve component 

14 of the armed forces of the United States who is ordered to active duty. 

15 ‘‘(b) TIME FOR APPLICATION.—An individual may submit an application 

16 for certification under subsection (c) to the Secretary not later than 45 days 

17 after the date the individual completes a period of employment described in 

18 subsection (c)(1)(A) with respect to which the application is submitted. 

19 ‘‘(c) CERTIFICATION DETERMINATION.—Not later than 20 days after the 

20 date the Secretary receives from an individual an application for certifi21 cation under this subsection, the Secretary shall— 

22 ‘‘(1) determine whether the individual— 

23 ‘‘(A) was employed in the activation or operation of a vessel— 

24 ‘‘(i) in the National Defense Reserve Fleet maintained 

25 under section 11 of the Merchant Ship Sales Act of 1946 (50 

26 App. U.S.C. 1744) in a period in which the vessel was in use 

27 or being activated for use under subsection (b) of that sec28 tion; 

29 ‘‘(ii) requisitioned or purchased under chapter 563 of this 

30 title; or 

31 ‘‘(iii) owned, chartered, or controlled by the United States 

32 Government and used by the Government for a war, armed 

33 conflict, national emergency, or maritime mobilization need 

34 (including for training purposes or testing for readiness and 

35 suitability for mission performance); and 

36 ‘‘(B) during the period of that employment, possessed a valid 

37 license, certificate of registry, or merchant mariner’s document 

38 issued under chapter 71 or 73 of this title; and 
121 

•HR 1442 IH 

1 ‘‘(2) if the Secretary makes affirmative determinations under sub2 paragraphs (A) and (B) of paragraph (1), certify that individual under 

3 this subsection. 

4 ‘‘(d) EQUIVALENCE TO MILITARY SELECTIVE SERVICE ACT CERTIFI5 CATE.—For purposes of reemployment rights and benefits provided by this 

6 section, a certification under subsection (c) shall be considered to be the 

7 equivalent of a certificate described in section 9(a) of the Military Selective 

8 Service Act (50 App. U.S.C. 459(a)). 

9 ‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS’’. 

10 (c) CHAPTERS FOLLOWING CHAPTER 531.—Subtitle V of title 46, United 

11 States Code, is amended by adding at the end the following: 

12 ‘‘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. 

‘‘53311. Taxation of deposits on failure of conditions. 

‘‘53312. Assessment and collection of deficiency tax. 

13 ‘‘§ 53301. Definitions 

14 ‘‘(a) IN GENERAL.—In this chapter: 

15 ‘‘(1) CONSTRUCTION CONTRACT.—The term ‘construction contract’ 

16 includes, for a taxpayer constructing a new vessel in a shipyard owned 

17 by that taxpayer, an agreement between the taxpayer and the Secretary 

18 of Transportation for that construction containing provisions the Sec19 retary considers advisable to carry out this chapter. 

20 ‘‘(2) NEW VESSEL.—The term ‘new vessel’ means— 

21 ‘‘(A) a vessel— 

22 ‘‘(i) constructed in the United States after December 31, 

23 1939, constructed with a construction-differential subsidy 

24 under title V of the Merchant Marine Act, 1936, or con25 structed with financing or a financing guarantee under chap26 ter 537 or 575 of this title; 

27 ‘‘(ii) documented or agreed with the Secretary to be docu28 mented under the laws of the United States; and 

29 ‘‘(iii)(I) of a type, size, and speed that the Secretary deter30 mines is suitable for use on the high seas or Great Lakes in 

31 carrying out this subtitle, but not less than 2,000 gross tons 

32 or less than 12 knots speed unless the Secretary certifies in 

33 each case that a vessel of lesser tonnage or speed is desirable 
122 

•HR 1442 IH 

1 for use by the United States Government in case of war or 

2 national emergency; or 

3 ‘‘(II) constructed to replace a vessel bought or requisitioned 

4 by the Government; and 

5 ‘‘(B) a vessel reconstructed or reconditioned for use only on the 

6 Great Lakes, including the Saint Lawrence River and Gulf, if the 

7 Secretary finds that the reconstruction or reconditioning will pro8 mote the objectives of this subtitle. 

9 ‘‘(b) ADDITIONAL TAX-RELATED TERMS.—Other terms used in this 

10 chapter have the same meaning as in chapter 1 of the Internal Revenue 

11 Code of 1986 (26 U.S.C. ch. 1). 

12 ‘‘§ 53302. Authority for construction reserve funds 

13 ‘‘(a) GENERAL AUTHORITY.—An eligible person under section 53303 of 

14 this title may establish a construction reserve fund for the construction, re15 construction, reconditioning, or acquisition of a new vessel or for other pur16 poses authorized by this chapter. 

17 ‘‘(b) APPLICATION OF CERTAIN LAWS AND REGULATIONS.—The fund 

18 shall be established, maintained, expended, and used as provided by this 

19 chapter and regulations prescribed jointly by the Secretary of Transpor20 tation and the Secretary of the Treasury. 

21 ‘‘§ 53303. Persons eligible to establish funds 

22 ‘‘A construction reserve fund may be established by a citizen of the 

23 United States that— 

24 ‘‘(1) is operating a vessel in the foreign or domestic commerce of the 

25 United States or in the fisheries; 

26 ‘‘(2) owns, in whole or in part, a vessel being operated in the foreign 

27 or domestic commerce of the United States or in the fisheries; 

28 ‘‘(3) was operating a vessel in the foreign or domestic commerce of 

29 the United States or in the fisheries when it was bought or requi30 sitioned by the United States Government; 

31 ‘‘(4) owned, in whole or in part, a vessel being operated in the for32 eign or domestic commerce of the United States or in the fisheries 

33 when it was bought or requisitioned by the Government; or 

34 ‘‘(5) had acquired or was having constructed a vessel to operate in 

35 the foreign or domestic commerce of the United States or in the fish36 eries when it was bought or requisitioned by the Government. 

37 ‘‘§ 53304. Vessel ownership 

38 ‘‘In this chapter, a vessel is deemed to be constructed or acquired by a 

39 taxpayer if constructed or acquired by a corporation when the taxpayer 

40 owns at least 95 percent of each class of stock of the corporation. 
123 

•HR 1442 IH 

1 ‘‘§ 53305. Eligible fund deposits 

2 ‘‘A construction reserve fund may include deposits of— 

3 ‘‘(1) the proceeds from the sale of a vessel; 

4 ‘‘(2) indemnities for the loss of a vessel; 

5 ‘‘(3) earnings from the operation of a documented vessel and from 

6 services incident to the operation; and 

7 ‘‘(4) interest or other amounts accrued on deposits in the fund. 

8 ‘‘§ 53306. Recognition of gain for tax purposes 

9 ‘‘(a) DEFINITIONS.—In this section, the terms ‘net proceeds’ and ‘net in10 demnity’ mean the sum of— 

11 ‘‘(1) the adjusted basis of the vessel; and 

12 ‘‘(2) the amount of gain the taxpayer would recognize without regard 

13 to this section. 

14 ‘‘(b) RECOGNITION OF GAIN.—In computing net income under the income 

15 or excess profits tax laws of the United States, a taxpayer does not recog16 nize a gain on the sale or the actual or constructive total loss of a vessel 

17 if the taxpayer— 

18 ‘‘(1) deposits an amount equal to the net proceeds of the sale or the 

19 net indemnity for the loss in a construction reserve fund within 60 days 

20 after receiving the payment of proceeds or indemnity; and 

21 ‘‘(2) elects under this section not to recognize the gain. 

22 ‘‘(c) WHEN ELECTION MUST BE MADE.— 

23 ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the tax24 payer must make the election referred to in subsection (b) in the tax25 payer’s income tax return for the taxable year in which the gain was 

26 realized. 

27 ‘‘(2) RECEIPT AFTER TAXABLE YEAR.—If the vessel is bought or 

28 requisitioned by the United States Government, or is lost, and the tax29 payer receives payment for the vessel or indemnity for the loss from 

30 the Government after the end of the taxable year in which it was 

31 bought, requisitioned, or lost, the taxpayer must make the election re32 ferred to in subsection (b) within 60 days after receiving the payment 

33 or indemnity, on a form prescribed by the Secretary of the Treasury. 

34 ‘‘(d) EFFECT OF STATUTE OF LIMITATION.—If the taxpayer makes an 

35 election under subsection (c)(2), and computation or recomputation under 

36 this section is otherwise allowable but is prevented by a statute of limitation 

37 on the date the election is made or within 6 months thereafter, the com38 putation or recomputation nevertheless shall be made notwithstanding the 

39 statute if the taxpayer files a claim for the computation or recomputation 

40 within 6 months after the date of making the election. 
124 

•HR 1442 IH 

1 ‘‘§ 53307. Basis for determining gain or loss and for depre2 ciating new vessels 

3 ‘‘Under the income or excess profits tax laws of the United States, the 

4 basis for determining a gain or loss and for depreciation of a new vessel 

5 constructed, reconstructed, reconditioned, or acquired by the taxpayer, or 

6 for which purchase-money indebtedness is liquidated as provided in section 

7 53310 of this title, with amounts from a construction reserve fund, shall 

8 be reduced by that part of the deposits in the fund expended in the con9 struction, reconstruction, reconditioning, acquisition, or liquidation of pur10 chase-money indebtedness of the new vessel that represents a gain not rec11 ognized for tax purposes under section 53306 of this title. 

12 ‘‘§ 53308. Order and proportions of deposits and with13 drawals 

14 ‘‘In this chapter— 

15 ‘‘(1) if the net proceeds of a sale or the net indemnity for a loss is 

16 deposited in more than one deposit, the amount consisting of the gain 

17 shall be deemed to be deposited first; 

18 ‘‘(2) amounts expended, obligated, or otherwise withdrawn shall be 

19 applied against the amounts deposited in the fund in the order of de20 posit; and 

21 ‘‘(3) if a deposit consists in part of a gain not recognized under sec22 tion 53306 of this title, any expenditure, obligation, or withdrawal ap23 plied against that deposit shall be deemed to be a gain in the propor24 tion that the part of the deposit consisting of a gain bears to the total 

25 amount of the deposit. 

26 ‘‘§ 53309. Accumulation of deposits 

27 ‘‘For any taxable year, amounts on deposit in a construction reserve fund 

28 on the last day of the taxable year, for which the requirements of section 

29 53310 of this title have been satisfied (to the extent they apply on the last 

30 day of the taxable year), are deemed to have been retained for the reason31 able needs of the business within the meaning of section 537(a) of the Inter32 nal Revenue Code of 1986 (26 U.S.C. 537(a)). 

33 ‘‘§ 53310. Obligation of deposits and period for construction 

34 of certain vessels 

35 ‘‘(a) APPLICATION OF SECTIONS 53306 AND 53309.—Sections 53306 and 

36 53309 of this title apply to a deposit in a construction reserve fund only 

37 if, within 3 years after the date of the deposit (and any extension under 

38 subsection (c))— 

39 ‘‘(1)(A) a contract is made for the construction or acquisition of a 

40 new vessel or, with the approval of the Secretary of Transportation, for 
125 

•HR 1442 IH 

1 a part interest in a new vessel or for the reconstruction or recondi2 tioning of a new vessel; 

3 ‘‘(B) the deposit is expended or obligated for expenditure under that 

4 contract; 

5 ‘‘(C) at least 12.5 percent of the construction or contract price of 

6 the vessel is paid or irrevocably committed for payment; and 

7 ‘‘(D) the plans and specifications for the vessel are approved by the 

8 Secretary to the extent the Secretary considers necessary; or 

9 ‘‘(2) the deposit is expended or obligated for expenditure for the liq10 uidation of existing or subsequently incurred purchase-money indebted11 ness to a person not a parent company of, or a company affiliated or 

12 associated with, the mortgagor on a new vessel. 

13 ‘‘(b) ADDITIONAL REQUIREMENTS FOR CERTAIN VESSELS.—In addition 

14 to the requirements of subsection (a)(1), for a vessel not constructed under 

15 a construction-differential subsidy contract or not bought from the Sec16 retary of Transportation— 

17 ‘‘(1) at least 5 percent of the construction (or, if the contract covers 

18 more than one vessel, at least 5 percent of the construction of the first 

19 vessel) must be completed within 6 months after the date of the con20 struction contract (or within the period of an extension under sub21 section (c)), as estimated by the Secretary and certified by the Sec22 retary to the Secretary of the Treasury; and 

23 ‘‘(2) construction under the contract must be completed with reason24 able dispatch thereafter. 

25 ‘‘(c) EXTENSIONS.—The Secretary of Transportation may grant exten26 sions of the period within which the deposits must be expended or obligated 

27 or within which the construction must have progressed to the extent of 5 

28 percent completion under this section. However, the extensions may not be 

29 for a total of more than 2 years for the expenditure or obligation of deposits 

30 or one year for the progress of construction. 

31 ‘‘§ 53311. Taxation of deposits on failure of conditions 

32 ‘‘A deposited gain, if otherwise taxable income under the law applicable 

33 to the taxable year in which the gain was realized, shall be included in gross 

34 income for that taxable year, except for purposes of the declared value ex35 cess profits tax and the capital stock tax, if— 

36 ‘‘(1) the deposited gain is not expended or obligated within the ap37 propriate period under section 53310 of this title; 

38 ‘‘(2) the deposited gain is withdrawn before the end of that period; 

39 ‘‘(3) the construction related to that deposited gain has not pro40 gressed to the extent of 5 percent of completion within the appropriate 

41 period under section 53310 of this title; or 
126 

•HR 1442 IH 

1 ‘‘(4) the Secretary of Transportation finds and certifies to the Sec2 retary of the Treasury that, for causes within the control of the tax3 payer, the entire construction related to that deposited gain is not com4 pleted with reasonable dispatch. 

5 ‘‘§ 53312. Assessment and collection of deficiency tax 

6 ‘‘Notwithstanding any other provision of law, a deficiency in tax for a tax7 able year resulting from the inclusion of an amount in gross income as pro8 vided by section 53311 of this title, and the amount to be treated as a defi9 ciency under section 53311 instead of as an adjustment for the declared 

10 value excess profits tax, may be assessed or a civil action may be brought 

11 to collect the deficiency without assessment, at any time. Interest on a defi12 ciency or amount to be treated as a deficiency does not begin until the date 

13 the deposited gain or part of the deposited gain in question is required to 

14 be included in gross income under section 51111. 

15 ‘‘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. 

16 ‘‘§ 53501. Definitions 

17 ‘‘In this chapter: 

18 ‘‘(1) AGREEMENT VESSEL.—The term ‘agreement vessel’ means— 

19 ‘‘(A) an eligible vessel or a qualified vessel that is subject to an 

20 agreement under this chapter; and 

21 ‘‘(B) a barge or container that is part of the complement of a 

22 vessel described in subparagraph (A) if provided for in the agree23 ment. 

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

25 ‘‘(A) a vessel— 

26 ‘‘(i) constructed in the United States (and, if recon27 structed, reconstructed in the United States), constructed 

28 outside the United States but documented under the laws of 

29 the United States on April 15, 1970, or constructed outside 
127 

•HR 1442 IH 

1 the United States for use in the United States foreign trade 

2 pursuant to a contract made before April 15, 1970; 

3 ‘‘(ii) documented under the laws of the United States; and 

4 ‘‘(iii) operated in the foreign or domestic trade of the 

5 United States or in the fisheries of the United States; and 

6 ‘‘(B) a commercial fishing vessel— 

7 ‘‘(i) constructed in the United States and, if reconstructed, 

8 reconstructed in the United States; 

9 ‘‘(ii) of at least 2 net tons but less than 5 net tons; 

10 ‘‘(iii) owned by a citizen of the United States; 

11 ‘‘(iv) having its home port in the United States; and 

12 ‘‘(v) operated in the commercial fisheries of the United 

13 States. 

14 ‘‘(3) JOINT REGULATIONS.—The term ‘joint regulations’ means reg15 ulations prescribed jointly by the Secretary and the Secretary of the 

16 Treasury under section 53502(b) of this title. 

17 ‘‘(4) NONCONTIGUOUS TRADE.—The term ‘noncontiguous trade’ 

18 means— 

19 ‘‘(A) trade between— 

20 ‘‘(i) one of the contiguous 48 States; and 

21 ‘‘(ii) Alaska, Hawaii, Puerto Rico, or an insular territory 

22 or possession of the United States; and 

23 ‘‘(B) trade between— 

24 ‘‘(i) a place in Alaska, Hawaii, Puerto Rico, or an insular 

25 territory or possession of the United States; and 

26 ‘‘(ii) another place in Alaska, Hawaii, Puerto Rico, or an 

27 insular territory or possession of the United States. 

28 ‘‘(5) QUALIFIED VESSEL.—The term ‘qualified vessel’ means— 

29 ‘‘(A) a vessel— 

30 ‘‘(i) constructed in the United States (and, if recon31 structed, reconstructed in the United States), constructed 

32 outside the United States but documented under the laws of 

33 the United States on April 15, 1970, or constructed outside 

34 the United States for use in the United States foreign trade 

35 pursuant to a contract made before April 15, 1970; 

36 ‘‘(ii) documented under the laws of the United States; and 

37 ‘‘(iii) agreed, between the Secretary and the person main38 taining the capital construction fund established under sec39 tion 53503 of this title, to be operated in the United States 

40 foreign, Great Lakes, or noncontiguous domestic trade or in 

41 the fisheries of the United States; and 
128 

•HR 1442 IH 

1 ‘‘(B) a commercial fishing vessel— 

2 ‘‘(i) constructed in the United States and, if reconstructed, 

3 reconstructed in the United States; 

4 ‘‘(ii) of at least 2 net tons but less than 5 net tons; 

5 ‘‘(iii) owned by a citizen of the United States; 

6 ‘‘(iv) having its home port in the United States; and 

7 ‘‘(v) operated in the commercial fisheries of the United 

8 States. 

9 ‘‘(6) SECRETARY.—The term ‘Secretary’ means— 

10 ‘‘(A) the Secretary of Commerce with respect to an eligible ves11 sel or a qualified vessel operated or to be operated in the fisheries 

12 of the United States; and 

13 ‘‘(B) the Secretary of Transportation with respect to other ves14 sels. 

15 ‘‘(7) UNITED STATES FOREIGN TRADE.—The term ‘United States 

16 foreign trade’ includes those areas in domestic trade in which a vessel 

17 built with a construction-differential subsidy is allowed to operate 

18 under the first sentence of section 506 of the Merchant Marine Act, 

19 1936. 

20 ‘‘(8) VESSEL.—The term ‘vessel’ includes— 

21 ‘‘(A) cargo handling equipment that the Secretary determines is 

22 intended for use primarily on the vessel; and 

23 ‘‘(B) an ocean-going towing vessel, an ocean-going barge, or a 

24 comparable towing vessel or barge operated on the Great Lakes. 

25 ‘‘§ 53502. Regulations 

26 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), the Secretary 

27 shall prescribe regulations to carry out this chapter. 

28 ‘‘(b) TAX LIABILITY.—The Secretary and the Secretary of the Treasury 

29 shall prescribe joint regulations for the determination of tax liability under 

30 this chapter. 

31 ‘‘§ 53503. Establishing a capital construction fund 

32 ‘‘(a) IN GENERAL.—A citizen of the United States owning or leasing an 

33 eligible vessel may make an agreement with the Secretary under this chap34 ter to establish a capital construction fund for the vessel. 

35 ‘‘(b) ALLOWABLE PURPOSE.—The purpose of the agreement shall be to 

36 provide replacement vessels, additional vessels, or reconstructed vessels, 

37 built in the United States and documented under the laws of the United 

38 States, for operation in the United States foreign, Great Lakes, or non39 contiguous domestic trade or in the fisheries of the United States. 
129 

•HR 1442 IH 

1 ‘‘§ 53504. Deposits and withdrawals 

2 ‘‘(a) REQUIRED DEPOSITS.—An agreement to establish a capital con3 struction fund shall provide for the deposit in the fund of the amounts 

4 agreed to be appropriate to provide for qualified withdrawals under section 

5 53509 of this title. 

6 ‘‘(b) APPLICABLE REQUIREMENTS.—Deposits in and withdrawals from 

7 the fund are subject to the requirements included in the agreement or pre8 scribed by the Secretary by regulation. However, the Secretary may not re9 quire a person to deposit in the fund for a taxable year more than 50 per10 cent of that portion of the person’s taxable income for that year (as deter11 mined under section 53505(a)(1) of this title) that is attributable to the op12 eration of an agreement vessel. 

13 ‘‘§ 53505. Ceiling on deposits 

14 ‘‘(a) MAXIMUM DEPOSITS.—The amount deposited in a capital construc15 tion fund for a taxable year may not exceed the sum of— 

16 ‘‘(1) that portion of the taxable income of the owner or lessee for 

17 the taxable year (computed under chapter 1 of the Internal Revenue 

18 Code of 1986 (26 U.S.C. ch. 1) but without regard to the carryback 

19 of net operating loss or net capital loss or this chapter) that is attrib20 utable to the operation of agreement vessels in the foreign or domestic 

21 trade of the United States or in the fisheries of the United States; 

22 ‘‘(2) the amount allowable as a deduction under section 167 of such 

23 Code (26 U.S.C. 167) for the taxable year for agreement vessels; 

24 ‘‘(3) if the transaction is not taken into account for purposes of 

25 paragraph (1), the net proceeds (as defined in joint regulations) from 

26 the disposition of an agreement vessel or from insurance or indemnity 

27 attributable to an agreement vessel; and 

28 ‘‘(4) the receipts from the investment or reinvestment of amounts 

29 held in the fund. 

30 ‘‘(b) REDUCTIONS FOR LESSEES.—For a lessee, the maximum amount 

31 that may be deposited for an agreement vessel under subsection (a)(2) for 

32 any period shall be reduced by any amount the owner is required or per33 mitted, under the capital construction fund agreement, to deposit for that 

34 period for the vessel under subsection (a)(2). 

35 ‘‘§ 53506. Investment and fiduciary requirements 

36 ‘‘(a) IN GENERAL.—Amounts in a capital construction fund shall be kept 

37 in the depository specified in the agreement and shall be subject to trustee 

38 and other fiduciary requirements prescribed by the Secretary. Except as 

39 provided in subsection (b), amounts in the fund may be invested only in in40 terest-bearing securities approved by the Secretary. 

41 ‘‘(b) STOCK INVESTMENTS.— 
130 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—With the approval of the Secretary, an agreed 

2 percentage (but not more than 60 percent) of the assets of the fund 

3 may be invested in the stock of domestic corporations that— 

4 ‘‘(A) is fully listed and registered on an exchange registered 

5 with the Securities and Exchange Commission as a national secu6 rities exchange; and 

7 ‘‘(B) would be acquired by a prudent investor seeking a reason8 able income and the preservation of capital. 

9 ‘‘(2) PREFERRED STOCK.—The preferred stock of a corporation is 

10 deemed to satisfy the requirements of this subsection, even though it 

11 may not be registered and listed because it is nonvoting stock, if the 

12 common stock of the corporation satisfies the requirements and the 

13 preferred stock otherwise would satisfy the requirements. 

14 ‘‘(c) MAINTAINING AGREED PERCENTAGE.—If at any time the fair mar15 ket value of the stock in the fund is more than the agreed percentage of 

16 the assets in the fund, any subsequent investment of amounts deposited in 

17 the fund, and any subsequent withdrawal from the fund, shall be made in 

18 a way that tends to restore the fair market value of the stock to not more 

19 than the agreed percentage. 

20 ‘‘§ 53507. Nontaxation of deposits 

21 ‘‘(a) TAX TREATMENT.—Subject to subsection (b), under the Internal 

22 Revenue Code of 1986 (26 U.S.C. 1 et seq.)— 

23 ‘‘(1) taxable income (determined without regard to this chapter and 

24 section 7518 of such Code (26 U.S.C. 7518)) for the taxable year shall 

25 be reduced by the amount deposited for the taxable year out of 

26 amounts referred to in section 53505(a)(1) of this title; 

27 ‘‘(2) a gain from a transaction referred to in section 53505(a)(3) of 

28 this title shall not be taken into account if an amount equal to the net 

29 proceeds (as defined in joint regulations) from the transaction is depos30 ited in the fund; 

31 ‘‘(3) the earnings (including gains and losses) from the investment 

32 and reinvestment of amounts held in the fund shall not be taken into 

33 account; 

34 ‘‘(4) the earnings and profits of a corporation (within the meaning 

35 of section 316 of such Code (26 U.S.C. 316)) shall be determined with36 out regard to this chapter and section 7518 of such Code (26 U.S.C. 

37 7518); and 

38 ‘‘(5) in applying the tax imposed by section 531 of such Code (26 

39 U.S.C. 531), amounts held in the fund shall not be taken into account. 
131 

•HR 1442 IH 

1 ‘‘(b) CONDITION.—This section applies to an amount only if the amount 

2 is deposited in the fund under the agreement within the time provided in 

3 joint regulations. 

4 ‘‘§ 53508. Separate accounts within a fund 

5 ‘‘(a) IN GENERAL.—A capital construction fund shall have three ac6 counts: 

7 ‘‘(1) The capital account. 

8 ‘‘(2) The capital gain account. 

9 ‘‘(3) The ordinary income account. 

10 ‘‘(b) CAPITAL ACCOUNT.—The capital account shall consist of— 

11 ‘‘(1) amounts referred to in section 53505(a)(2) of this title; 

12 ‘‘(2) amounts referred to in section 53505(a)(3) of this title, except 

13 that portion representing a gain not taken into account because of sec14 tion 53507(a)(2) of this title; 

15 ‘‘(3) the percentage applicable under section 243(a)(1) of the Inter16 nal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of any dividend re17 ceived by the fund for which the person maintaining the fund would 

18 be allowed (were it not for section 53507(a)(3) of this title) a deduction 

19 under section 243 of such Code (26 U.S.C. 243); and 

20 ‘‘(4) interest income exempt from taxation under section 103 of such 

21 Code (26 U.S.C. 103). 

22 ‘‘(c) CAPITAL GAIN ACCOUNT.—The capital gain account shall consist 

23 of— 

24 ‘‘(1) amounts representing capital gains on assets held for more than 

25 6 months and referred to in section 53505(a)(3) or (4) of this title; 

26 minus 

27 ‘‘(2) amounts representing capital losses on assets held in the fund 

28 for more than 6 months. 

29 ‘‘(d) ORDINARY INCOME ACCOUNT.—The ordinary income account shall 

30 consist of— 

31 ‘‘(1) amounts referred to in section 53505(a)(1) of this title; 

32 ‘‘(2)(A) amounts representing capital gains on assets held for not 

33 more than 6 months and referred to in section 53505(a)(3) or (4) of 

34 this title; minus 

35 ‘‘(B) amounts representing capital losses on assets held in the fund 

36 for not more than 6 months; 

37 ‘‘(3) interest (except tax-exempt interest referred to in subsection 

38 (b)(4)) and other ordinary income (except any dividend referred to in 

39 paragraph (5)) received on assets held in the fund; 

40 ‘‘(4) ordinary income from a transaction described in section 

41 53505(a)(3) of this title; and 
132 

•HR 1442 IH 

1 ‘‘(5) that portion of any dividend referred to in subsection (b)(3) not 

2 taken into account under subsection (b)(3). 

3 ‘‘(e) WHEN LOSSES ALLOWED.—Except on termination of a fund, capital 

4 losses referred to in subsection (c) or (d)(2) shall be allowed only as an off5 set to gains referred to in subsection (c) or (d)(2), respectively. 

6 ‘‘§ 53509. Qualified withdrawals 

7 ‘‘(a) IN GENERAL.—Subject to subsection (b), a withdrawal from a cap8 ital construction fund is a qualified withdrawal if it is made under the terms 

9 of the agreement and is for— 

10 ‘‘(1) the acquisition, construction, or reconstruction of a qualified 

11 vessel or a barge or container that is part of the complement of a quali12 fied vessel; or 

13 ‘‘(2) the payment of the principal on indebtedness incurred in the 

14 acquisition, construction, or reconstruction of a qualified vessel or a 

15 barge or container that is part of the complement of a qualified vessel. 

16 ‘‘(b) BARGES AND CONTAINERS.—Except as provided in regulations pre17 scribed by the Secretary, subsection (a) applies to a barge or container only 

18 if it is constructed in the United States. 

19 ‘‘(c) TREATMENT AS NONQUALIFIED WITHDRAWAL.—Under joint regula20 tions, if the Secretary determines that a substantial obligation under an 

21 agreement is not being fulfilled, the Secretary, after notice and opportunity 

22 for a hearing to the person maintaining the fund, may treat any amount 

23 in the fund as an amount withdrawn from the fund in a nonqualified with24 drawal. 

25 ‘‘§ 53510. Tax treatment of qualified withdrawals and basis 

26 of property 

27 ‘‘(a) ORDER OF WITHDRAWALS.—A qualified withdrawal from a capital 

28 construction fund shall be treated as made— 

29 ‘‘(1) first from the capital account; 

30 ‘‘(2) second from the capital gain account; and 

31 ‘‘(3) third from the ordinary income account. 

32 ‘‘(b) ORDINARY INCOME ACCOUNT WITHDRAWALS.—If a portion of a 

33 qualified withdrawal for a vessel, barge, or container is made from the ordi34 nary income account, the basis of the vessel, barge, or container shall be 

35 reduced by an amount equal to that portion. 

36 ‘‘(c) CAPITAL GAIN ACCOUNT WITHDRAWALS.—If a portion of a qualified 

37 withdrawal for a vessel, barge, or container is made from the capital gain 

38 account, the basis of the vessel, barge, or container shall be reduced by an 

39 amount equal to that portion. 

40 ‘‘(d) WITHDRAWALS TO PAY PRINCIPAL.—If a portion of a qualified 

41 withdrawal to pay the principal on indebtedness is made from the ordinary 
133 

•HR 1442 IH 

1 income account or the capital gain account, an amount equal to the total 

2 reduction that would be required by subsections (b) and (c) if the with3 drawal were a qualified withdrawal for a purpose described in those sub4 sections shall be applied, in the order provided in joint regulations, to re5 duce the basis of vessels, barges, and containers owned by the person main6 taining the fund. The remaining amount of the withdrawal shall be treated 

7 as a nonqualified withdrawal. 

8 ‘‘(e) GAIN ON PROPERTY WITH REDUCED BASIS.—If property, the basis 

9 of which was reduced under subsection (b), (c), or (d), is disposed of, any 

10 gain realized on the disposition, to the extent it does not exceed the total 

11 reduction in the basis of the property under those subsections, shall be 

12 treated as an amount referred to in section 53511(c)(1) of this title with13 drawn on the date of disposition of the property. Subject to conditions pre14 scribed in joint regulations, this subsection does not apply to a disposition 

15 if there is a redeposit, in an amount determined under joint regulations, 

16 that restores the fund as far as practicable to the position it was in before 

17 the withdrawal. 

18 ‘‘§ 53511. Tax treatment of nonqualified withdrawals 

19 ‘‘(a) IN GENERAL.—Except as provided in section 53513 of this title, a 

20 withdrawal from a fund that is not a qualified withdrawal shall be treated 

21 as a nonqualified withdrawal. 

22 ‘‘(b) ORDER OF WITHDRAWALS.—A nonqualified withdrawal shall be 

23 treated as made— 

24 ‘‘(1) first from the ordinary income account; 

25 ‘‘(2) second from the capital gain account; and 

26 ‘‘(3) third from the capital account. 

27 ‘‘(c) TAX TREATMENT.—For purposes of the Internal Revenue Code of 

28 1986 (26 U.S.C. 1 et seq.)— 

29 ‘‘(1) a nonqualified withdrawal from the ordinary income account 

30 shall be included in income as an item of ordinary income for the tax31 able year in which the withdrawal is made; 

32 ‘‘(2) a nonqualified withdrawal from the capital gain account shall 

33 be included in income for the taxable year in which the withdrawal is 

34 made as an item of gain realized during that year from the disposition 

35 of an asset held for more than 6 months; and 

36 ‘‘(3) for the period through the last date prescribed for payment of 

37 tax for the taxable year in which the withdrawal is made— 

38 ‘‘(A) no interest shall be payable under section 6601 of such 

39 Code (26 U.S.C. 6601) and no addition to the tax shall be payable 

40 under section 6651 of such Code (26 U.S.C. 6651); 
134 

•HR 1442 IH 

1 ‘‘(B) interest on the amount of the additional tax attributable 

2 to an amount treated as a nonqualified withdrawal from the ordi3 nary income account or the capital gain account shall be paid at 

4 the rate determined under subsection (d) from the last date pre5 scribed for payment of the tax for the taxable year for which the 

6 amount was deposited in the fund; and 

7 ‘‘(C) no interest shall be payable on amounts treated as with8 drawn on a last-in-first-out basis under section 53512 of this title. 

9 ‘‘(d) INTEREST RATE.—The rate of interest under subsection (c)(3)(B) 

10 for a nonqualified withdrawal made in a taxable year beginning after 1971 

11 shall be determined and published jointly by the Secretary and the Secretary 

12 of the Treasury. The rate shall be such that its relationship to 8 percent 

13 is comparable, as determined by the Secretaries under joint regulations, to 

14 the relationship between— 

15 ‘‘(1) the money rates and investment yields for the calendar year im16 mediately before the beginning of the taxable year; and 

17 ‘‘(2) the money rates and investment yields for the calendar year 

18 1970. 

19 ‘‘(e) NONQUALIFIED WITHDRAWALS.— 

20 ‘‘(1) IN GENERAL.—The following applicable percentage of any 

21 amount that remains in a capital construction fund at the close of the 

22 following specified taxable year following the taxable year for which the 

23 amount was deposited shall be treated as a nonqualified withdrawal: 

‘‘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. 

24 ‘‘(2) EARNINGS.—The earnings of a capital construction fund for 

25 any taxable year (except net gains) shall be treated under this sub26 section as an amount deposited for the taxable year. 

27 ‘‘(3) CONTRACT FOR QUALIFIED WITHDRAWAL.—Under paragraph 

28 (1), an amount shall not be treated as remaining in a capital construc29 tion fund at the close of a taxable year to the extent there is a binding 

30 contract at the close of the taxable year for a qualified withdrawal of 

31 the amount for an identified item for which the withdrawal may be 

32 made. 

33 ‘‘(4) EXCESS EARNINGS.—If the Secretary determines that the bal34 ance in a capital construction fund exceeds the amount appropriate to 

35 meet the vessel construction program objectives of the person that es36 tablished the fund, the amount of the excess shall be treated as a non-
135 

•HR 1442 IH 

1 qualified withdrawal under paragraph (1) unless the person develops 

2 appropriate program objectives within 3 years to dissipate the excess. 

3 ‘‘(5) AMOUNTS IN FUND ON JANUARY 1, 1987.—Under this sub4 section, amounts in a capital construction fund on January 1, 1987, 

5 shall be treated as having been deposited in that fund on that date. 

6 ‘‘(f) TAX DETERMINATIONS.— 

7 ‘‘(1) IN GENERAL.—For a taxable year for which there is a non8 qualified withdrawal (including an amount treated as a nonqualified 

9 withdrawal under subsection (e)), the tax imposed by chapter 1 of the 

10 Internal Revenue Code of 1986 (26 U.S.C. ch. 1) shall be determined 

11 by— 

12 ‘‘(A) excluding the withdrawal from gross income; and 

13 ‘‘(B) increasing the tax imposed by chapter 1 of such Code by 

14 the product of the amount of the withdrawal and the highest tax 

15 rate specified in section 1 (or section 11 for a corporation) of such 

16 Code (26 U.S.C. 1, 11). 

17 ‘‘(2) MAXIMUM TAX RATE.—For that portion of a nonqualified with18 drawal made from the capital gain account during a taxable year to 

19 which section 1(h) or 1201(a) of such Code (26 U.S.C. 1(h), 1201(a)) 

20 applies, the tax rate used under paragraph (1)(B) may not exceed 15 

21 percent (or 34 percent for a corporation). 

22 ‘‘(3) TAX BENEFIT RULE.—If any portion of a nonqualified with23 drawal is properly attributable to deposits (except earnings on deposits) 

24 made by the taxpayer in a taxable year that did not reduce the tax25 payer’s liability for tax under chapter 1 of such Code (26 U.S.C. ch. 

26 1) for a taxable year before the taxable year in which the withdrawal 

27 occurs— 

28 ‘‘(A) that portion shall not be taken into account under para29 graph (1); and 

30 ‘‘(B) an amount equal to that portion shall be allowed as a de31 duction under section 172 of such Code (26 U.S.C. 172) for the 

32 taxable year in which the withdrawal occurs. 

33 ‘‘(4) COORDINATION WITH DEDUCTION FOR NET OPERATING

34 LOSSES.—A nonqualified withdrawal excluded from gross income under 

35 paragraph (1) shall be excluded in determining taxable income under 

36 section 172(b)(2) of such Code (26 U.S.C. 172(b)(2)). 

37 ‘‘§ 53512. FIFO and LIFO withdrawals 

38 ‘‘(a) FIFO.—Except as provided in subsection (b), an amount withdrawn 

39 from an account under this chapter shall be treated as withdrawn on a first40 in-first-out basis. 
136 

•HR 1442 IH 

1 ‘‘(b) LIFO.—An amount withdrawn from an account under this chapter 

2 shall be treated as withdrawn on a last-in-first-out basis if it is— 

3 ‘‘(1) a nonqualified withdrawal for research, development, and design 

4 expenses incident to new and advanced vessel design, machinery, and 

5 equipment; or 

6 ‘‘(2) an amount treated as a nonqualified withdrawal under section 

7 53510(d) of this title. 

8 ‘‘§ 53513. Corporate reorganizations and partnership 

9 changes 

10 ‘‘Under joint regulations— 

11 ‘‘(1) a transfer of a capital construction fund from one person to an12 other person in a transaction to which section 381 of the Internal Rev13 enue Code of 1986 (26 U.S.C. 381) applies may be treated as if the 

14 transaction is not a nonqualified withdrawal; and 

15 ‘‘(2) a similar rule shall be applied to a continuation of a partnership 

16 (within the meaning of subchapter K of chapter 1 of such Code (26 

17 U.S.C. 701 et seq.)). 

18 ‘‘§ 53514. Relationship of old fund to new fund 

19 ‘‘(a) DEFINITION.—In this section, the term ‘old fund’ means a capital 

20 construction fund maintained before October 21, 1970. 

21 ‘‘(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining an old 

22 fund may elect to continue the old fund, but may not— 

23 ‘‘(1) hold amounts in the old fund beyond the expiration date pro24 vided in the agreement under which the old fund is maintained (deter25 mined without regard to an extension or renewal made after April 14, 

26 1970); or 

27 ‘‘(2) maintain simultaneously the old fund and a new fund estab28 lished under this chapter. 

29 ‘‘(c) APPLICATION OF NEW FUND AGREEMENT TO OLD FUND

30 AMOUNTS.—If a person makes an agreement under this chapter to establish 

31 a new fund, the person may agree to extend the agreement to some or all 

32 of the amounts in an old fund. Each item in the old fund to be transferred 

33 shall be transferred in a nontaxable transaction to the appropriate account 

34 in the new fund. For purposes of section 53511(c)(3) of this title, the date 

35 of the deposit of an item so transferred shall be July 1, 1971, or the date 

36 of the deposit in the old fund, whichever is later. 

37 ‘‘§ 53515. Records and reports 

38 ‘‘A person maintaining a fund under this chapter shall keep records and 

39 make reports as required by the Secretary or the Secretary of the Treasury. 
137 

•HR 1442 IH 

1 ‘‘§ 53516. Termination of agreement after change in regula2 tions 

3 ‘‘If, after an agreement has been made under this chapter, a change is 

4 made either in the joint regulations or in the regulations prescribed by the 

5 Secretary under this chapter that could have a substantial effect on the 

6 rights or duties of a person maintaining a fund under this chapter, that per7 son may terminate the agreement. 

8 ‘‘§ 53517. Reports 

9 ‘‘(a) IN GENERAL.—Within 120 days after the close of each calendar 

10 year, the Secretary of Transportation and the Secretary of Commerce each 

11 shall provide the Secretary of the Treasury a written report on the capital 

12 construction funds under the particular Secretary’s jurisdiction for the cal13 endar year. 

14 ‘‘(b) CONTENTS.—The report shall state the name and taxpayer identi15 fication number of each person— 

16 ‘‘(1) establishing a capital construction fund during the calendar 

17 year; 

18 ‘‘(2) maintaining a capital construction fund on the last day of the 

19 calendar year; 

20 ‘‘(3) terminating a capital construction fund during the calendar 

21 year; 

22 ‘‘(4) making a deposit to or withdrawal from a capital construction 

23 fund during the calendar year, and the amount of the deposit or with24 drawal; or 

25 ‘‘(5) having been determined during the calendar year to have failed 

26 to fulfill a substantial obligation under a capital construction fund 

27 agreement to which the person is a party. 

28 ‘‘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. 
138 

•HR 1442 IH 

‘‘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. 

‘‘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. 

1 ‘‘SUBCHAPTER I—GENERAL 

2 ‘‘§ 53701. Definitions 

3 ‘‘In this chapter: 

4 ‘‘(1) ACTUAL COST.—The term ‘actual cost’ means the sum of— 

5 ‘‘(A) all amounts paid by or for the account of the obligor as 

6 of the date on which a determination is made under section 

7 53715(d)(1) of this title; and 

8 ‘‘(B) all amounts that the Secretary reasonably estimates the 

9 obligor will become obligated to pay from time to time thereafter, 

10 for the construction, reconstruction, or reconditioning of the ves11 sel, including guarantee fees that will become payable under sec12 tion 53714 of this title in connection with all obligations issued 

13 for construction, reconstruction, or reconditioning of the vessel or 

14 equipment to be delivered, and all obligations issued for the deliv15 ered vessel or equipment. 

16 ‘‘(2) CONSTRUCTION, RECONSTRUCTION, AND RECONDITIONING.— 

17 The terms ‘construction’, ‘reconstruction’, and ‘reconditioning’ include 

18 designing, inspecting, outfitting, and equipping. 

19 ‘‘(3) DEPRECIATED ACTUAL COST.—The term ‘depreciated actual 

20 cost’ of a vessel means— 

21 ‘‘(A) if the vessel was not reconstructed or reconditioned, the 

22 actual cost of the vessel depreciated on a straight line basis over 

23 the useful life of the vessel as determined by the Secretary, not 

24 to exceed 25 years from the date of delivery by the builder; or 

25 ‘‘(B) if the vessel was reconstructed or reconditioned, the sum 

26 of— 

27 ‘‘(i) the actual cost of the vessel depreciated on a straight 

28 line basis from the date of delivery by the builder to the date 

29 of the reconstruction or reconditioning, using the original use30 ful life of the vessel, and from the date of the reconstruction 

31 or reconditioning, using a useful life of the vessel determined 

32 by the Secretary; and 
139 

•HR 1442 IH 

1 ‘‘(ii) any amount paid or obligated to be paid for the recon2 struction or reconditioning, depreciated on a straight line 

3 basis using a useful life of the vessel determined by the Sec4 retary. 

5 ‘‘(4) ELIGIBLE EXPORT VESSEL.—The term ‘eligible export vessel’ 

6 means a vessel that— 

7 ‘‘(A) is constructed, reconstructed, or reconditioned in the 

8 United States for use in world-wide trade; and 

9 ‘‘(B) will, on delivery or redelivery, become or remain docu10 mented under the laws of a country other than the United States. 

11 ‘‘(5) FISHERY FACILITY.— 

12 ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the term 

13 ‘fishery facility’ means— 

14 ‘‘(i) for operations on land— 

15 ‘‘(I) a structure or appurtenance thereto designed for 

16 the unloading and receiving from vessels, the processing, 

17 the holding pending processing, the distribution after 

18 processing, or the holding pending distribution, of fish 

19 from a fishery; 

20 ‘‘(II) the land necessary for the structure or appur21 tenance; and 

22 ‘‘(III) equipment that is for use with the structure or 

23 appurtenance and that is necessary for performing a 

24 function referred to in subclause (I); 

25 ‘‘(ii) for operations not on land, a vessel built in the United 

26 States and used for, equipped to be used for, or of a type nor27 mally used for, the processing of fish; or 

28 ‘‘(iii) for aquaculture, including operations on land or else29 where— 

30 ‘‘(I) a structure or appurtenance thereto designed for 

31 aquaculture; 

32 ‘‘(II) the land necessary for the structure or appur33 tenance; 

34 ‘‘(III) equipment that is for use with the structure or 

35 appurtenance and that is necessary for performing a 

36 function referred to in subclause (I); and 

37 ‘‘(IV) a vessel built in the United States and used for, 

38 equipped to be used for, or of a type normally used for, 

39 aquaculture. 
140 

•HR 1442 IH 

1 ‘‘(B) REQUIRED OWNERSHIP.—Under subparagraph (A), the 

2 structure, appurtenance, land, equipment, or vessel must be owned 

3 by— 

4 ‘‘(i) an individual who is a citizen of the United States; or 

5 ‘‘(ii) an entity that is a citizen of the United States under 

6 section 50501 of this title and that is at least 75 percent 

7 owned (as determined under that section) by citizens of the 

8 United States. 

9 ‘‘(6) FISHING VESSEL.—The term ‘fishing vessel’ has the meaning 

10 given that term in section 3 of the Magnuson-Stevens Fishery Con11 servation and Management Act (16 U.S.C. 1802), and any reference 

12 in this chapter to a vessel designed principally for commercial use in 

13 the fishing trade or industry is deemed to be a reference to a fishing 

14 vessel. 

15 ‘‘(7) MORTGAGE.—The term ‘mortgage’ includes— 

16 ‘‘(A) a preferred mortgage as defined in section 31301 of this 

17 title; and 

18 ‘‘(B) a mortgage on a vessel that will become a preferred mort19 gage when filed or recorded under chapter 313 of this title. 

20 ‘‘(8) OBLIGATION.—The term ‘obligation’ means an instrument of 

21 indebtedness issued for a purpose described in section 53706 of this 

22 title, except— 

23 ‘‘(A) an obligation issued by the Secretary under section 53723 

24 of this title; and 

25 ‘‘(B) an obligation eligible for investment of funds under section 

26 53715(f) or 53717 of this title. 

27 ‘‘(9) OBLIGEE.—The term ‘obligee’ means the holder of an obliga28 tion. 

29 ‘‘(10) OBLIGOR.—The term ‘obligor’ means a party primarily liable 

30 for payment of the principal of or interest on an obligation. 

31 ‘‘(11) OCEAN THERMAL ENERGY CONVERSION FACILITY OR

32 PLANTSHIP.—The term ‘ocean thermal energy conversion facility or 

33 plantship’ means an at-sea facility or vessel, whether mobile, floating 

34 unmoored, moored, or standing on the seabed, that uses temperature 

35 differences in ocean water to produce electricity or another form of en36 ergy capable of being used directly to perform work, and includes— 

37 ‘‘(A) equipment installed on the facility or vessel to use the elec38 tricity or other form of energy to produce, process, refine, or man39 ufacture a product; 

40 ‘‘(B) a cable or pipeline used to deliver the electricity, fresh41 water, or product to shore; and 
141 

•HR 1442 IH 

1 ‘‘(C) other associated equipment and appurtenances of the facil2 ity or vessel to the extent they are located seaward of the high 

3 water mark. 

4 ‘‘(12) SECRETARY.—The term ‘Secretary’ means— 

5 ‘‘(A) the Secretary of Commerce with respect to fishing vessels 

6 and fishery facilities; and 

7 ‘‘(B) the Secretary of Transportation with respect to other ves8 sels and general shipyard facilities (as defined in section 53733(a) 

9 of this title). 

10 ‘‘(13) VESSEL.—The term ‘vessel’ means any type of vessel, whether 

11 in existence or under construction, including— 

12 ‘‘(A) a cargo vessel; 

13 ‘‘(B) a passenger vessel; 

14 ‘‘(C) a combination cargo and passenger vessel; 

15 ‘‘(D) a tanker; 

16 ‘‘(E) a tug or towboat; 

17 ‘‘(F) a barge; 

18 ‘‘(G) a dredge; 

19 ‘‘(H) a floating drydock with a capacity of at least 35,000 lift20 ing tons and a beam of at least 125 feet between the wing walls; 

21 ‘‘(I) an oceanographic research vessel; 

22 ‘‘(J) an instruction vessel; 

23 ‘‘(K) a pollution treatment, abatement, or control vessel; 

24 ‘‘(L) a fishing vessel whose ownership meets the citizenship re25 quirements under section 50501 of this title for documenting ves26 sels to operate in the coastwise trade; and 

27 ‘‘(M) an ocean thermal energy conversion facility or plantship 

28 that is or will be documented under the laws of the United States. 

29 ‘‘§ 53702. General authority 

30 ‘‘(a) IN GENERAL.—The Secretary, on terms the Secretary may pre31 scribe, may guarantee or make a commitment to guarantee the payment of 

32 the principal of and interest on an obligation eligible to be guaranteed under 

33 this chapter. A guarantee or commitment to guarantee shall cover 100 per34 cent of the principal and interest. 

35 ‘‘(b) DIRECT LOANS FOR FISHERIES.— 

36 ‘‘(1) IN GENERAL.—Notwithstanding any other provision of this 

37 chapter, any obligation involving a fishing vessel, fishery facility, aqua38 culture facility, individual fishing quota, or fishing capacity reduction 

39 program issued under this chapter after October 11, 1996, shall be a 

40 direct loan obligation for which the Secretary shall be the obligee, rath41 er than an obligation issued to an obligee other than the Secretary and 
142 

•HR 1442 IH 

1 guaranteed by the Secretary. A direct loan obligation under this sub2 section shall be treated in the same manner and to the same extent 

3 as an obligation guaranteed under this chapter except with respect to 

4 provisions of this chapter that by their nature can only be applied to 

5 obligations guaranteed under this chapter. 

6 ‘‘(2) INTEREST RATE.—Notwithstanding any other provision of this 

7 chapter, the annual rate of interest an obligor shall pay on a direct 

8 loan obligation under this subsection is 2 percent plus the additional 

9 percent the Secretary must pay as interest to borrow from the Treas10 ury the funds to make the loan. 

11 ‘‘§ 53703. Application procedures 

12 ‘‘(a) TIME FOR DECISION.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall approve or deny an applica14 tion for a loan guarantee under this chapter within 270 days after the 

15 date on which the signed application is received by the Secretary. 

16 ‘‘(2) EXTENSION.—On request by an applicant, the Secretary may 

17 extend the 270-day period in paragraph (1) to a date not later than 

18 2 years after the date on which the signed application was received by 

19 the Secretary. 

20 ‘‘(b) CERTIFICATION OF REVIEW.—The Secretary may not guarantee or 

21 make a commitment to guarantee an obligation under this chapter unless 

22 the Secretary certifies that a full and fair consideration of all the regulatory 

23 requirements, including economic soundness and financial requirements ap24 plicable to the obligor and related parties, and a thorough assessment of the 

25 technical, economic, and financial aspects of the loan application, has been 

26 made. 

27 ‘‘§ 53704. Funding limits 

28 ‘‘(a) GENERAL LIMITATIONS.—The total unpaid principal amount of obli29 gations guaranteed under this chapter and outstanding at one time may not 

30 exceed $12,000,000,000. Of that amount— 

31 ‘‘(1) $850,000,000 shall be limited to obligations related to fishing 

32 vessels and fishery facilities; and 

33 ‘‘(2) $3,000,000,000 shall be limited to obligations related to eligible 

34 export vessels. 

35 ‘‘(b) ADDITIONAL LIMITATIONS.—Additional limitations may not be im36 posed on new commitments to guarantee loans for any fiscal year, except 

37 in amounts established in advance by annual authorization laws. A vessel 

38 eligible for a guarantee under this chapter may not be denied eligibility be39 cause of its type. 

40 ‘‘(c) LIMITS BASED ON RISK FACTORS.— 
143 

•HR 1442 IH 

1 ‘‘(1) DEFINITION.—In this subsection, the term ‘cost’ has the mean2 ing given that term in section 502 of the Federal Credit Reform Act 

3 of 1990 (2 U.S.C. 661a). 

4 ‘‘(2) SYSTEM OF RISK CATEGORIES.—The Secretary shall— 

5 ‘‘(A) establish, and update annually, a system of risk categories 

6 for obligations guaranteed under this chapter that categorizes the 

7 relative risk of guarantees based on the risk factors set forth in 

8 paragraph (4); 

9 ‘‘(B) determine annually for each risk category a subsidy rate 

10 equivalent to the cost of obligations in the category, expressed as 

11 a percentage of the amount guaranteed for obligations in the cat12 egory; and 

13 ‘‘(C) ensure that each risk category is comprised of loans that 

14 are relatively homogeneous in cost and share characteristics pre15 dictive of defaults and other costs, given the facts known at the 

16 time of obligation or commitment, using a risk category system 

17 that is based on historical analysis of program data and statistical 

18 evidence concerning the likely costs of defaults or other costs that 

19 are expected to be associated with the loans in the category. 

20 ‘‘(3) USE OF SYSTEM.— 

21 ‘‘(A) PLACING OBLIGATION IN CATEGORY.—Before making a 

22 guarantee under this chapter for an obligation, and annually for 

23 projects subject to a guarantee, the Secretary shall apply the risk 

24 factors specified in paragraph (4) to place the obligation in a risk 

25 category established under paragraph (2). 

26 ‘‘(B) REDUCTION OF AVAILABLE AMOUNT.—The Secretary shall 

27 consider the total amount available to the Secretary for making 

28 guarantees under this chapter to be reduced by the amount deter29 mined by multiplying— 

30 ‘‘(i) the amount guaranteed under this chapter for an obli31 gation; by 

32 ‘‘(ii) the subsidy rate for the category in which the obliga33 tion is placed under subparagraph (A). 

34 ‘‘(C) ESTIMATED COST.—The estimated cost to the United 

35 States Government of a guarantee under this chapter for an obli36 gation is deemed to be the amount determined under subpara37 graph (B) for the obligation. 

38 ‘‘(D) RESTRICTION ON FURTHER GUARANTEES.—The Secretary 

39 may not guarantee obligations under this chapter after the total 

40 amount available to the Secretary under appropriations laws for 
144 

•HR 1442 IH 

1 the cost of loan guarantees is considered to be reduced to zero 

2 under subparagraph (B). 

3 ‘‘(4) RISK FACTORS.—The risk factors referred to in this subsection 

4 are— 

5 ‘‘(A) if applicable, the country risk for each eligible export vessel 

6 financed or to be financed by an obligation; 

7 ‘‘(B) the period for which an obligation is guaranteed or to be 

8 guaranteed; 

9 ‘‘(C) the amount of an obligation guaranteed or to be guaran10 teed in relation to the total cost of the project financed or to be 

11 financed by the obligation; 

12 ‘‘(D) the financial condition of an obligor or applicant for a 

13 guarantee; 

14 ‘‘(E) if applicable, other guarantees related to the project; 

15 ‘‘(F) if applicable, the projected employment of each vessel or 

16 equipment to be financed with an obligation; 

17 ‘‘(G) if applicable, the projected market that will be served by 

18 each vessel or equipment to be financed with an obligation; 

19 ‘‘(H) the collateral provided for a guarantee for an obligation; 

20 ‘‘(I) the management and operating experience of an obligor or 

21 applicant for a guarantee; 

22 ‘‘(J) whether a guarantee under this chapter is or will be in ef23 fect during the construction period of the project; and 

24 ‘‘(K) the concentration risk presented by an unduly large per25 centage of loans outstanding by any one borrower or group of af26 filiated borrowers. 

27 ‘‘§ 53705. Pledge of United States Government 

28 ‘‘(a) FULL FAITH AND CREDIT.—The full faith and credit of the United 

29 States Government is pledged to the payment of a guarantee made under 

30 this chapter, for both principal and interest, including interest (as may be 

31 provided for in the guarantee) accruing between the date of default under 

32 a guaranteed obligation and the date of payment in full of the guarantee. 

33 ‘‘(b) INCONTESTABILITY.—A guarantee or commitment to guarantee 

34 made under this chapter is conclusive evidence of the eligibility of the obli35 gation for the guarantee. The validity of a guarantee or commitment to 

36 guarantee made under this chapter is incontestable. 

37 ‘‘§ 53706. Eligible purposes of obligations 

38 ‘‘(a) IN GENERAL.—To be eligible for a guarantee under this chapter, an 

39 obligation must aid in any of the following: 

40 ‘‘(1)(A) Financing (including reimbursement of an obligor for ex41 penditures previously made for) the construction, reconstruction, or re-
145 

•HR 1442 IH 

1 conditioning of a vessel (including an eligible export vessel) designed 

2 principally for research, or for commercial use— 

3 ‘‘(i) in the coastwise or intercoastal trade; 

4 ‘‘(ii) on the Great Lakes, or on bays, sounds, rivers, harbors, 

5 or inland lakes of the United States; 

6 ‘‘(iii) in foreign trade as defined in section 109(b) of this title; 

7 ‘‘(iv) as an ocean thermal energy conversion facility or 

8 plantship; 

9 ‘‘(v) as a floating drydock in the construction, reconstruction, 

10 reconditioning, or repair of vessels; or 

11 ‘‘(vi) as an eligible export vessel in worldwide trade. 

12 ‘‘(B) A guarantee under subparagraph (A) may not be made more 

13 than one year after delivery of the vessel (or redelivery if the vessel was 

14 reconstructed or reconditioned) unless the proceeds of the obligation 

15 are used to finance the construction, reconstruction, or reconditioning 

16 of a vessel or of facilities or equipment related to marine operations. 

17 ‘‘(2) Financing (including reimbursement of an obligor for expendi18 tures previously made for) the construction, reconstruction, recondi19 tioning, or purchase of a vessel owned by citizens of the United States 

20 and designed principally for research, or for commercial use in the fish21 ing industry. 

22 ‘‘(3) Financing the purchase, reconstruction, or reconditioning of a 

23 vessel or fishery facility— 

24 ‘‘(A) for which an obligation was guaranteed under this chapter; 

25 and 

26 ‘‘(B) that, under subchapter II of this chapter— 

27 ‘‘(i) is a vessel or fishery facility for which an obligation 

28 was accelerated and paid; 

29 ‘‘(ii) was acquired by the Federal Ship Financing Fund or 

30 successor account under section 53717 of this title; or 

31 ‘‘(iii) was sold at foreclosure begun by the Secretary. 

32 ‘‘(4) Financing any part of the repayment to the United States Gov33 ernment of any amount of a construction-differential subsidy paid for 

34 a vessel. 

35 ‘‘(5) Refinancing an existing obligation (regardless of whether guar36 anteed under this chapter) issued for a purpose described in para37 graphs (1)–(4), including a short-term obligation incurred to obtain 

38 temporary funds with the intention of refinancing. 

39 ‘‘(6) Financing or refinancing (including reimbursement of an obli40 gor for expenditures previously made for) the construction, reconstruc41 tion, reconditioning, or purchase of a fishery facility. 
146 

•HR 1442 IH 

1 ‘‘(7) Financing or refinancing (including reimbursement of an obli2 gor for expenditures previously made for) the purchase of an individual 

3 fishing quota in accordance with section 303(d)(4) of the Magnuson4 Stevens Fishery Conservation and Management Act (16 U.S.C. 

5 1853(d)(4)). 

6 ‘‘(b) NON-VESSELS TREATED AS VESSELS.—An obligation guaranteed 

7 under subsection (a)(6) or (7) shall be treated, for purposes of this chapter, 

8 in the same manner and to the same extent as an obligation that aids in 

9 financing the construction, reconstruction, reconditioning, or purchase of a 

10 vessel, except with respect to provisions that by their nature can only be 

11 applied to vessels. 

12 ‘‘(c) PRIORITIES FOR CERTAIN VESSELS.—In guaranteeing or making a 

13 commitment to guarantee an obligation under this chapter, the Secretary 

14 shall give priority to— 

15 ‘‘(1) a vessel that is otherwise eligible for a guarantee and is con16 structed with assistance under subtitle D of the Maritime Security Act 

17 of 2003 (46 U.S.C. 53101 note); and 

18 ‘‘(2) after applying paragraph (1), a vessel that is otherwise eligible 

19 for a guarantee and that the Secretary of Defense determines— 

20 ‘‘(A) is suitable for service as a naval auxiliary in time of war 

21 or national emergency; and 

22 ‘‘(B) meets a shortfall in sealift capacity or capability. 

23 ‘‘§ 53707. Findings related to obligors and operators 

24 ‘‘(a) RESPONSIBLE OBLIGOR.—The Secretary may not guarantee or make 

25 a commitment to guarantee an obligation under this chapter unless the Sec26 retary finds that the obligor is responsible and has the ability, experience, 

27 financial resources, and other qualifications necessary for the adequate oper28 ation and maintenance of each vessel that will serve as security for the 

29 guarantee. 

30 ‘‘(b) OPERATORS OF LINER VESSELS.—The Secretary of Transportation 

31 may not guarantee or make a commitment to guarantee a loan for the con32 struction, reconstruction, or reconditioning of a liner vessel under this chap33 ter unless the Chairman of the Federal Maritime Commission certifies that 

34 the operator of the vessel has not been found by the Commission to have 

35 committed, within the previous 5 years— 

36 ‘‘(1) a violation of part A of subtitle IV of this title that involves 

37 unjust or unfair discriminatory treatment or undue or unreasonable 

38 prejudice or disadvantage with respect to a United States shipper, 

39 ocean transportation intermediary, ocean common carrier, or port; or 

40 ‘‘(2) a violation of part B of subtitle IV of this title. 
147 

•HR 1442 IH 

1 ‘‘(c) OPERATORS OF FISHING VESSELS.—The Secretary of Commerce 

2 may not guarantee or make a commitment to guarantee a loan for the con3 struction, reconstruction, or reconditioning of a fishing vessel under this 

4 chapter if the operator of the vessel has been— 

5 ‘‘(1) held liable or liable in rem for a civil penalty under section 1858 

6 of title 16 and not paid the penalty; 

7 ‘‘(2) found guilty of an offense under section 1859 of title 16 and 

8 not paid the assessed fine or served the assessed sentence; 

9 ‘‘(3) held liable for a civil or criminal penalty under section 1375 of 

10 title 16 and not paid the assessed fine or served the assessed sentence; 

11 or 

12 ‘‘(4) held liable for a civil penalty by the Coast Guard under this 

13 title or title 33 and not paid the assessed fine. 

14 ‘‘(d) WAIVERS CONCERNING FINANCIAL CONDITION.—The Secretary 

15 shall prescribe regulations concerning circumstances under which waivers of, 

16 or exceptions to, otherwise applicable regulatory requirements concerning fi17 nancial condition can be made. The regulations shall require that— 

18 ‘‘(1) the economic soundness requirements in section 53708(a) of 

19 this title are met after the waiver of the financial condition require20 ment; and 

21 ‘‘(2) the waiver shall provide for the imposition of other requirements 

22 on the obligor designed to compensate for the increased risk associated 

23 with the obligor’s failure to meet regulatory requirements applicable to 

24 financial condition. 

25 ‘‘§ 53708. Findings related to economic soundness 

26 ‘‘(a) BY SECRETARY OF TRANSPORTATION.—The Secretary of Transpor27 tation may not guarantee or make a commitment to guarantee an obligation 

28 under this chapter unless the Secretary finds that the property or project 

29 for which the obligation will be executed will be economically sound. In mak30 ing that finding, the Secretary shall consider— 

31 ‘‘(1) the need in the particular segment of the maritime industry for 

32 new or additional capacity, including any impact on existing equipment 

33 for which a guarantee under this chapter is in effect; 

34 ‘‘(2) the market potential for employment of the vessel over the life 

35 of the guarantee; 

36 ‘‘(3) projected revenues and expenses associated with employment of 

37 the vessel; 

38 ‘‘(4) any charter, contract of affreightment, transportation agree39 ment, or similar agreement or undertaking relevant to the employment 

40 of the vessel; 

41 ‘‘(5) other relevant criteria; and 
148 

•HR 1442 IH 

1 ‘‘(6) for inland waterways, the need for technical improvements, in2 cluding increased fuel efficiency or improved safety. 

3 ‘‘(b) BY SECRETARY OF COMMERCE.—The Secretary of Commerce may 

4 not guarantee or make a commitment to guarantee an obligation under this 

5 chapter unless the Secretary finds, at or prior to the time the commitment 

6 is made or the guarantee becomes effective, that— 

7 ‘‘(1) the property or project for which the obligation will be executed 

8 will be economically sound; and 

9 ‘‘(2) for a fishing vessel, the purpose of the financing or refinancing 

10 is consistent with— 

11 ‘‘(A) the wise use of the fisheries resources and the develop12 ment, advancement, management, conservation, and protection of 

13 the fisheries resources; or 

14 ‘‘(B) the need for technical improvements, including increased 

15 fuel efficiency or improved safety. 

16 ‘‘(c) USED FISHING VESSELS AND FACILITIES.—The Secretary of Com17 merce may not guarantee or make a commitment to guarantee an obligation 

18 under this chapter for the purchase of a used fishing vessel or used fishery 

19 facility unless the vessel or facility will be— 

20 ‘‘(1) reconstructed or reconditioned in the United States and will 

21 contribute to the development of the United States fishing industry; or 

22 ‘‘(2) used— 

23 ‘‘(A) in the harvesting of fish from an underused fishery; or 

24 ‘‘(B) for a purpose described in the definition of ‘fishery facility’ 

25 in section 53701 of this title with respect to an underused fishery. 

26 ‘‘(d) INDEPENDENT ANALYSIS.—The Secretary may make a determina27 tion that aspects of an application under this chapter require independent 

28 analysis to be conducted by third party experts due to risk factors associ29 ated with markets, technology, financial structures, or other risk factors 

30 identified by the Secretary. Any independent analysis conducted under this 

31 subsection shall be performed by a party chosen by the Secretary. 

32 ‘‘(e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Notwith33 standing any other provision of this chapter, the Secretary may make a de34 termination that an application under this title requires additional equity 

35 because of increased risk factors associated with markets, technology, finan36 cial structures, or other risk factors identified by the Secretary. 

37 ‘‘§ 53709. Amount of obligations 

38 ‘‘(a) IN GENERAL.—The principal of an obligation may not be guaranteed 

39 in an amount greater than the amount determined by multiplying the per40 centage applicable under subsection (b) by— 
149 

•HR 1442 IH 

1 ‘‘(1) the amount paid by or for the account of the obligor (as deter2 mined by the Secretary, which determination shall be conclusive) for 

3 the construction, reconstruction, or reconditioning of the vessel used as 

4 security for the guarantee; or 

5 ‘‘(2) if the obligor creates an escrow fund under section 53715 of 

6 this title, the actual cost of the vessel. 

7 ‘‘(b) LIMITATIONS ON AMOUNT BORROWED.— 

8 ‘‘(1) IN GENERAL.—Except as otherwise provided, the principal 

9 amount of an obligation guaranteed under this chapter may not exceed 

10 75 percent of the actual cost or depreciated actual cost, as determined 

11 by the Secretary, of the vessel used as security for the guarantee. 

12 ‘‘(2) CERTAIN APPROVED VESSELS.—The principal amount may not 

13 exceed 87.5 percent of the actual cost or depreciated actual cost if— 

14 ‘‘(A) the size and speed of the vessel are approved by the Sec15 retary; 

16 ‘‘(B) the vessel is or would have been eligible for mortgage aid 

17 for construction under section 509 of the Merchant Marine Act, 

18 1936, or would have been eligible except that the vessel was built 

19 with a construction-differential subsidy and the subsidy has been 

20 repaid; and 

21 ‘‘(C) the vessel is of a type described in that section for which 

22 the minimum down payment required by that section is 12.5 per23 cent of the cost of the vessel. 

24 ‘‘(3) BARGES.—For a barge constructed without a construction-dif25 ferential subsidy or for which the subsidy has been repaid, the principal 

26 amount may not exceed 87.5 percent of the actual cost or depreciated 

27 actual cost. 

28 ‘‘(4) FISHING VESSELS AND FISHERY FACILITIES.—For a fishing 

29 vessel or fishery facility, the principal amount may not exceed 80 per30 cent of the actual cost or depreciated actual cost. However, debt for 

31 the vessel or facility may not be placed through the Federal Financing 

32 Bank. 

33 ‘‘(5) OTEC.—For an ocean thermal energy conversion facility or 

34 plantship constructed without a construction-differential subsidy, the 

35 principal amount may not exceed 87.5 percent of the actual cost or de36 preciated actual cost of the facility or plantship. 

37 ‘‘(6) ELIGIBLE EXPORT VESSELS.—For an eligible export vessel, the 

38 principal amount may not exceed 87.5 percent of the actual cost or de39 preciated actual cost. 

40 ‘‘(c) SECURITY INVOLVING MULTIPLE VESSELS.—The principal amount 

41 of an obligation having more than one vessel as security for the guarantee 
150 

•HR 1442 IH 

1 may not exceed the sum of the principal amounts allowable for all the ves2 sels. 

3 ‘‘(d) PROHIBITION ON UNIFORM PERCENTAGE LIMITATIONS.—The Sec4 retary may not establish a percentage under any provision of subsection (b) 

5 that is to be applied uniformly to all guarantees or commitments to guar6 antee made under that provision. 

7 ‘‘(e) PROHIBITION ON MINIMUM PRINCIPAL AMOUNT.—The Secretary 

8 may not establish, as a condition of eligibility for a guarantee under this 

9 chapter, a minimum principal amount for an obligation covering the recon10 struction or reconditioning of a fishing vessel or fishery facility. For pur11 poses of this chapter, the reconstruction or reconditioning of a fishing vessel 

12 or fishery facility does not include the routine minor repair or maintenance 

13 of the vessel or facility. 

14 ‘‘§ 53710. Contents of obligations 

15 ‘‘(a) IN GENERAL.—An obligation guaranteed under this chapter must— 

16 ‘‘(1) provide for payments by the obligor satisfactory to the Sec17 retary; 

18 ‘‘(2) provide for interest (exclusive of guarantee fees and other fees) 

19 at a rate not more than the annual rate on the unpaid principal that 

20 the Secretary determines is reasonable, considering the range of inter21 est rates prevailing in the private market for similar loans and the 

22 risks assumed by the Secretary; 

23 ‘‘(3) have a maturity date satisfactory to the Secretary, but— 

24 ‘‘(A) not more than 25 years after the date of delivery of the 

25 vessel used as security for the guarantee; or 

26 ‘‘(B) if the vessel has been reconstructed or reconditioned, not 

27 more than the later of— 

28 ‘‘(i) 25 years after the date of delivery of the vessel; or 

29 ‘‘(ii) the remaining years of useful life of the vessel as de30 termined by the Secretary; and 

31 ‘‘(4) provide, or a related agreement must provide, that if the vessel 

32 used as security for the guarantee is a delivered vessel, the vessel shall 

33 be— 

34 ‘‘(A) in class A–1, American Bureau of Shipping, or meet other 

35 standards acceptable to the Secretary, with all required certifi36 cates, including marine inspection certificates of the Coast Guard 

37 or, in the case of an eligible export vessel, of the appropriate for38 eign authorities under a treaty, convention, or other international 

39 agreement to which the United States is a party, and with all out40 standing requirements and recommendations necessary for class 
151 

•HR 1442 IH 

1 retention accomplished, unless the Secretary permits a deferment 

2 of repairs necessary to meet these requirements; and 

3 ‘‘(B) well equipped, in good repair, and in every respect sea4 worthy and fit for service. 

5 ‘‘(b) PROVISIONS FOR CERTAIN PASSENGER VESSELS.— 

6 ‘‘(1) IN GENERAL.—With the Secretary’s approval, if the vessel used 

7 as security for the guarantee is a passenger vessel having the tonnage, 

8 speed, passenger accommodations, and other characteristics described 

9 in section 503 of the Merchant Marine Act, 1936, an obligation guar10 anteed under this chapter or a related agreement may provide that— 

11 ‘‘(A) the only recourse by the United States Government 

12 against the obligor for payments under the guarantee will be re13 possession of the vessel and assignment of insurance claims; and 

14 ‘‘(B) the obligor’s liability for payments under the guarantee 

15 will be satisfied and discharged by the surrender of the vessel and 

16 all interest in the vessel to the Government in the condition de17 scribed in paragraph (2). 

18 ‘‘(2) SURRENDER OF VESSEL.— 

19 ‘‘(A) IN GENERAL.—On surrender, the vessel must be— 

20 ‘‘(i) free and clear of all liens and encumbrances except the 

21 security interest conveyed to the Secretary under this chapter; 

22 ‘‘(ii) in class; and 

23 ‘‘(iii) in as good order and condition (ordinary wear and 

24 tear excepted) as when acquired by the obligor. 

25 ‘‘(B) COVERING DEFICIENCIES BY INSURANCE.—To the extent 

26 covered by insurance, a deficiency related to a requirement in sub27 paragraph (A) may be satisfied by assignment of the obligor’s in28 surance claims to the Government. 

29 ‘‘(c) OTHER PROVISIONS TO PROTECT SECURITY INTERESTS.—An obli30 gation guaranteed under this chapter and any related agreement must con31 tain other provisions for the protection of the security interests of the Gov32 ernment (including acceleration, assumption, and subrogation provisions and 

33 the issuance of notes by the obligor to the Secretary), liens and releases of 

34 liens, payment of taxes, and other matters that the Secretary may prescribe. 

35 ‘‘§ 53711. Security interest 

36 ‘‘(a) IN GENERAL.—The Secretary may guarantee an obligation under 

37 this chapter only if the obligor conveys or agrees to convey to the Secretary 

38 a security interest the Secretary considers necessary to protect the interest 

39 of the United States Government. 

40 ‘‘(b) MULTIPLE VESSELS AND TYPES OF SECURITY.—The security inter41 est may relate to more than one vessel and may consist of more than one 
152 

•HR 1442 IH 

1 type of security. If the security interest relates to more than one vessel, the 

2 obligation may have the latest maturity date allowable under section 

3 53710(a)(3) of this title for any of the vessels used as security for the guar4 antee. However, the Secretary may require such payments of principal prior 

5 to maturity, with respect to all related obligations, as the Secretary con6 siders necessary to maintain adequate security for the guarantee. 

7 ‘‘§ 53712. Monitoring financial condition and operations of 

8 obligor 

9 ‘‘(a) IN GENERAL.—The Secretary shall monitor the financial condition 

10 and operations of the obligor on a regular basis during the term of the 

11 guarantee. The Secretary shall document the results of the monitoring on 

12 an annual or quarterly basis depending on the condition of the obligor. If 

13 the Secretary determines that the financial condition of the obligor warrants 

14 additional protections to the Secretary, the Secretary shall take appropriate 

15 action under subsection (b). If the Secretary determines that the financial 

16 condition of the obligor jeopardizes its continued ability to perform its re17 sponsibilities in connection with the guarantee of an obligation by the Sec18 retary, the Secretary shall make an immediate determination whether de19 fault should take place and whether further measures described in sub20 section (b) should be taken to protect the interests of the Secretary while 

21 ensuring that program objectives are met. 

22 ‘‘(b) CONTRACT PROVISIONS TO PROTECT SECRETARY.—The Secretary 

23 shall include provisions in a loan agreement with an obligor that provides 

24 additional authority to the Secretary to take action to limit potential losses 

25 in connection with a defaulted loan or a loan that is in jeopardy due to the 

26 deteriorating financial condition of the obligor. These provisions include re27 quirements for additional collateral or greater equity contributions that are 

28 effective upon the occurrence of verifiable conditions relating to the obligor’s 

29 financial condition or the status of the vessel or shipyard project. 

30 ‘‘§ 53713. Administrative fees 

31 ‘‘(a) IN GENERAL.—The Secretary shall charge and collect from the obli32 gor fees the Secretary considers reasonable for— 

33 ‘‘(1) investigating an application for a guarantee; 

34 ‘‘(2) appraising property offered as security for a guarantee; 

35 ‘‘(3) issuing a commitment; 

36 ‘‘(4) providing services related to an escrow fund under section 

37 53715 of this title; and 

38 ‘‘(5) inspecting property during construction, reconstruction, or re39 conditioning. 
153 

•HR 1442 IH 

1 ‘‘(b) TOTAL FEE LIMITATION.—The total fees under subsection (a) may 

2 not exceed 0.5 percent of the original principal amount of the obligations 

3 to be guaranteed. 

4 ‘‘(c) FEES FOR INDEPENDENT ANALYSIS.—The Secretary may charge 

5 and collect fees to cover the costs of independent analysis under section 

6 53708(d) of this title. Notwithstanding section 3302 of title 31, any fee col7 lected under this subsection shall— 

8 ‘‘(1) be credited as an offsetting collection to the account that fi9 nances the administration of the loan guarantee program; 

10 ‘‘(2) be available for expenditure only to pay the costs of activities 

11 and services for which the fee is imposed; and 

12 ‘‘(3) remain available until expended. 

13 ‘‘§ 53714. Guarantee fees 

14 ‘‘(a) REGULATIONS.—Subject to this section, the Secretary shall prescribe 

15 regulations to assess a fee for guaranteeing an obligation under this chap16 ter. 

17 ‘‘(b) COMPUTATION OF FEE.— 

18 ‘‘(1) IN GENERAL.—The amount of the fee for a guarantee under 

19 this chapter shall be equal to the sum of the amounts determined under 

20 paragraph (2) for the years in which the guarantee is in effect. 

21 ‘‘(2) PRESENT VALUE FOR EACH YEAR.—The amount referred to in 

22 paragraph (1) for a year in which the guarantee is in effect is the 

23 present value of the amount calculated under paragraph (3). To deter24 mine the present value, the Secretary shall apply a discount rate deter25 mined by the Secretary of the Treasury, considering current market 

26 yields on outstanding obligations of the United States Government hav27 ing periods to maturity comparable to the period to maturity for the 

28 guaranteed obligation. 

29 ‘‘(3) CALCULATION OF AMOUNT.—The amount referred to in para30 graph (2) shall be calculated by multiplying— 

31 ‘‘(A) the estimated average unpaid principal amount of the obli32 gation that will be outstanding during the year (excluding the av33 erage amount, other than interest, on deposit during the year in 

34 an escrow fund under section 53715 of this title); by 

35 ‘‘(B) the fee rate set under paragraph (4). 

36 ‘‘(4) SETTING FEE RATES.—To set the fee rate referred to in para37 graph (3)(B), the Secretary shall establish a formula that— 

38 ‘‘(A) takes into account the security provided for the guaranteed 

39 obligation; and 

40 ‘‘(B) is a sliding scale based on the creditworthiness of the obli41 gor, using— 
154 

•HR 1442 IH 

1 ‘‘(i) the lowest allowable rate under paragraph (5) for the 

2 most creditworthy obligors; and 

3 ‘‘(ii) the highest allowable rate under paragraph (5) for the 

4 least creditworthy obligors. 

5 ‘‘(5) PERMISSIBLE RANGE OF RATES.—The fee rate set under para6 graph (4) shall be— 

7 ‘‘(A) for a delivered vessel or equipment, at least 0.5 percent 

8 and not more than 1 percent; and 

9 ‘‘(B) for a vessel to be constructed, reconstructed, or recondi10 tioned or equipment to be delivered, at least 0.25 percent and not 

11 more than 0.5 percent. 

12 ‘‘(c) WHEN FEE COLLECTED.—A fee for the guarantee of an obligation 

13 under this chapter shall be collected not later than the date on which an 

14 amount is first paid on the obligation. 

15 ‘‘(d) FINANCING THE FEE.—A fee paid under this section is eligible to 

16 be financed under this chapter and shall be included in the actual cost of 

17 the obligation guaranteed. 

18 ‘‘(e) NOT REFUNDABLE.—A fee paid under this section is not refundable. 

19 However, an obligor shall receive credit for the amount paid for the remain20 ing term of the obligation if the obligation is refinanced and guaranteed 

21 under this chapter after the refinancing. 

22 ‘‘§ 53715. Escrow fund 

23 ‘‘(a) IN GENERAL.—If the proceeds of an obligation guaranteed under 

24 this chapter are to be used to finance the construction, reconstruction, or 

25 reconditioning of a vessel that will serve as security for a guarantee under 

26 this chapter, the Secretary may accept and hold in escrow, under an escrow 

27 agreement with the obligor, a portion of the proceeds of all obligations guar28 anteed under this chapter whose proceeds are to be so used which is equal 

29 to— 

30 ‘‘(1) the excess of— 

31 ‘‘(A) the principal amount of all obligations whose proceeds are 

32 to be so used; over 

33 ‘‘(B) 75 percent or 87.5 percent, whichever is applicable under 

34 section 53709(b) of this title, of the amount paid by or for the 

35 account of the obligor for the construction, reconstruction, or re36 conditioning of the vessel; plus 

37 ‘‘(2) any interest the Secretary may require on the amount described 

38 in paragraph (1). 

39 ‘‘(b) SECURITY INVOLVING BOTH UNCOMPLETED AND DELIVERED VES40 SELS.—If the security for the guarantee of an obligation relates both to a 

41 vessel to be constructed, reconstructed, or reconditioned and to a delivered 
155 

•HR 1442 IH 

1 vessel, the principal amount of the obligation shall be prorated for purposes 

2 of subsection (a) under regulations prescribed by the Secretary. 

3 ‘‘(c) DISBURSEMENT BEFORE TERMINATION OF AGREEMENT.— 

4 ‘‘(1) PURPOSES.—The Secretary shall disburse amounts in the es5 crow fund, as specified in the escrow agreement, to— 

6 ‘‘(A) pay amounts the obligor is obligated to pay for— 

7 ‘‘(i) the construction, reconstruction, or reconditioning of a 

8 vessel used as security for the guarantee; and 

9 ‘‘(ii) interest on the obligations; 

10 ‘‘(B) redeem the obligations under a refinancing guaranteed 

11 under this chapter; and 

12 ‘‘(C) pay any excess interest deposits to the obligor at times 

13 provided for in the escrow agreement. 

14 ‘‘(2) MANNER OF PAYMENT.—If a payment becomes due under the 

15 guarantee before the termination of the escrow agreement, the amount 

16 in the escrow fund at the time the payment becomes due, including re17 alized income not yet paid to the obligor, shall be paid into the appro18 priate account under section 53717 of this title. The amount shall be 

19 credited against amounts due or to become due from the obligor to the 

20 Secretary on the guaranteed obligations or, to the extent not so re21 quired, be paid to the obligor. 

22 ‘‘(d) PAYMENTS REQUIRED BEFORE DISBURSEMENT.— 

23 ‘‘(1) IN GENERAL.—No disbursement shall be made under subsection 

24 (c) to any person until the total amount paid by or for the account 

25 of the obligor from sources other than the proceeds of the obligation 

26 equals at least 25 percent or 12.5 percent, whichever is applicable 

27 under section 53709(b) of this title, of the aggregate actual cost of the 

28 vessel, as previously approved by the Secretary. If the aggregate actual 

29 cost of the vessel has increased since the Secretary’s initial approval 

30 or if it increases after the first disbursement is permitted under this 

31 subsection, then no further disbursements shall be made under sub32 section (c) until the total amount paid by or for the account of the obli33 gor from sources other than the proceeds of the obligation equals at 

34 least 25 percent or 12.5 percent, as applicable, of the increase, as de35 termined by the Secretary, in the aggregate actual cost of the vessel. 

36 This paragraph does not require the Secretary to consent to finance 

37 any increase in actual cost unless the Secretary determines that such 

38 an increase in the obligation meets all the terms and conditions of this 

39 chapter or other applicable law. 

40 ‘‘(2) DOCUMENTED PROOF OF PROGRESS REQUIREMENT.—The Sec41 retary shall, by regulation, establish a transparent, independent, and 
156 

•HR 1442 IH 

1 risk-based process for verifying and documenting the progress of 

2 projects under construction before disbursing guaranteed loan funds. 

3 At a minimum, the process shall require documented proof of progress 

4 in connection with the construction, reconstruction, or reconditioning of 

5 a vessel or vessels before disbursements are made from the escrow 

6 fund. The Secretary may require that the obligor provide a certificate 

7 from an independent party certifying that the requisite progress in con8 struction, reconstruction, or reconditioning has taken place. 

9 ‘‘(e) DISBURSEMENT ON TERMINATION OF AGREEMENT.— 

10 ‘‘(1) IN GENERAL.—If a payment has not become due under the 

11 guarantee before the termination of the escrow agreement, the balance 

12 of the escrow fund at the time of termination shall be disbursed to— 

13 ‘‘(A) prepay the excess of— 

14 ‘‘(i) the principal amount of all obligations whose proceeds 

15 are to be used to finance the construction, reconstruction, or 

16 reconditioning of the vessel used or to be used as security for 

17 the guarantee; over 

18 ‘‘(ii) 75 percent or 87.5 percent, whichever is applicable 

19 under section 53709(b) of this title, of the actual cost of the 

20 vessel to the extent paid; and 

21 ‘‘(B) pay interest on that prepaid amount of principal. 

22 ‘‘(2) REMAINING BALANCE.—Any remaining balance of the escrow 

23 fund shall be paid to the obligor. 

24 ‘‘(f) INVESTMENT.—The Secretary may invest and reinvest any part of 

25 an escrow fund in obligations of the United States Government with matu26 rities such that the escrow fund will be available as required for purposes 

27 of the escrow agreement. Investment income shall be paid to the obligor 

28 when received. 

29 ‘‘(g) TERMS TO PROTECT GOVERNMENT.—The escrow agreement shall 

30 contain other terms the Secretary considers necessary to protect fully the 

31 interests of the Government. 

32 ‘‘§ 53716. Deposit fund 

33 ‘‘(a) IN GENERAL.—There is a deposit fund in the Treasury for purposes 

34 of this section. The Secretary, in accordance with an agreement under sub35 section (b), may deposit into and hold in the fund cash belonging to an obli36 gor to serve as collateral for a guarantee made under this chapter with re37 spect to the obligor. 

38 ‘‘(b) AGREEMENT.—The Secretary and an obligor shall make a reserve 

39 fund or other collateral account agreement to govern the deposit, with40 drawal, retention, use, and reinvestment of cash of the obligor held in the 

41 fund. The agreement shall contain— 
157 

•HR 1442 IH 

1 ‘‘(1) terms and conditions required by this section; 

2 ‘‘(2) terms that grant to the United States Government a security 

3 interest in all amounts deposited into the fund; and 

4 ‘‘(3) any additional terms considered by the Secretary to be nec5 essary to protect fully the interests of the Government. 

6 ‘‘(c) INVESTMENT.—The Secretary may invest and reinvest any part of 

7 the amounts in the fund in obligations of the Government with maturities 

8 such that amounts in the fund will be available as required for purposes 

9 of the agreement under subsection (b). Cash balances in the fund in excess 

10 of current requirements shall be maintained in a form of uninvested funds, 

11 and the Secretary of the Treasury shall pay interest on these funds. 

12 ‘‘(d) WITHDRAWALS.— 

13 ‘‘(1) IN GENERAL.—Cash deposited into the fund may not be with14 drawn without the consent of the Secretary. 

15 ‘‘(2) USE OF INCOME.—Subject to paragraph (3), the Secretary may 

16 pay any income earned on cash of an obligor deposited into the fund 

17 in accordance with the agreement with the obligor under subsection (b). 

18 ‘‘(3) RETENTION AGAINST DEFAULT.—The Secretary may retain and 

19 offset any or all of the cash of an obligor in the fund, and any income 

20 realized thereon, as part of the Secretary’s recovery against the obligor 

21 in case of a default by the obligor on an obligation. 

22 ‘‘§ 53717. Management of funds in the Treasury 

23 ‘‘(a) DEFINITION.—In this section, the term ‘FCRA’ means the Federal 

24 Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 

25 ‘‘(b) LOAN GUARANTEES BY SECRETARY OF TRANSPORTATION.— 

26 ‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of Transpor27 tation shall account for payments and disbursements involving obliga28 tions guaranteed under this chapter and not subject to FCRA in an 

29 account in the Treasury entitled the Federal Ship Financing Fund Liq30 uidating Account (a liquidating account as defined in FCRA). 

31 ‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Transportation 

32 shall account for payments and disbursements involving obligations 

33 guaranteed under this chapter and subject to FCRA in a separate ac34 count in the Treasury entitled the Federal Ship Financing Guaranteed 

35 Loan Financing Account (a financing account as defined in FCRA). 

36 ‘‘(c) LOAN GUARANTEES BY SECRETARY OF COMMERCE.— 

37 ‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of Commerce 

38 shall account for payments and disbursements involving obligations 

39 guaranteed under this chapter and not subject to FCRA in a separate 

40 account in the Treasury established for this purpose. 
158 

•HR 1442 IH 

1 ‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Commerce shall 

2 account for payments and disbursements involving obligations guaran3 teed under this chapter and subject to FCRA in a separate account in 

4 the Treasury established for this purpose. 

5 ‘‘(d) DIRECT LOANS BY SECRETARY OF COMMERCE.—The Secretary of 

6 Commerce shall account for payments and disbursements involving direct 

7 loans made under this chapter in a separate account in the Treasury estab8 lished for this purpose. 

9 ‘‘§ 53718. Annual report to Congress 

10 ‘‘The Secretary of Transportation shall report to Congress annually on 

11 the loan guarantee program under this chapter. Each report shall include— 

12 ‘‘(1) the size, in dollars, of the portfolio of loans guaranteed; 

13 ‘‘(2) the size, in dollars, of projects in the portfolio facing financial 

14 difficulties; 

15 ‘‘(3) the number and type of projects covered; 

16 ‘‘(4) a profile of pending loan applications; 

17 ‘‘(5) the amount of appropriations available for new guarantees; 

18 ‘‘(6) a profile of each project approved since the last report; and 

19 ‘‘(7) a profile of any defaults since the last report. 

20 ‘‘SUBCHAPTER II—DEFAULT PROVISIONS 

21 ‘‘§ 53721. Rights of obligee 

22 ‘‘(a) DEMANDS BY OBLIGEES.—Except as provided in subsection (c), if 

23 an obligor has continued in default for 30 days in the payment of principal 

24 or interest on an obligation guaranteed under this chapter, the obligee or 

25 the obligee’s agent may demand that the Secretary pay the unpaid principal 

26 amount of the obligation and the unpaid interest on the obligation to the 

27 date of payment. The demand must be made within the earlier of— 

28 ‘‘(1) a period that may be specified in the guarantee or a related 

29 agreement; or 

30 ‘‘(2) 90 days from the date of the default. 

31 ‘‘(b) PAYMENTS BY SECRETARY.— 

32 ‘‘(1) IN GENERAL.—If a demand is made under subsection (a), the 

33 Secretary shall pay to the obligee or the obligee’s agent the unpaid 

34 principal amount of the obligation and the unpaid interest on the obli35 gation to the date of payment. Payment shall be made within the ear36 lier of— 

37 ‘‘(A) a period that may be specified in the guarantee or a re38 lated agreement; or 

39 ‘‘(B) 30 days from the date of the demand. 

40 ‘‘(2) IF NO EXISTING DEFAULT.—The Secretary is not required to 

41 make payment under this subsection if, within the appropriate period 
159 

•HR 1442 IH 

1 under paragraph (1), the Secretary finds that the obligor was not in 

2 default or that the default was remedied before the demand. 

3 ‘‘(c) ASSUMPTION OF RIGHTS AND OBLIGATIONS BEFORE DEMAND.—An 

4 obligee or the obligee’s agent may not demand payment under this section 

5 if the Secretary, before the demand and on terms that may be provided in 

6 the obligation or a related agreement, has assumed the obligor’s rights and 

7 duties under the obligation and any related agreement and made any pay8 ment in default. However, the guarantee of the obligation remains in effect 

9 after the Secretary’s assumption. 

10 ‘‘§ 53722. Actions by Secretary 

11 ‘‘(a) GENERAL AUTHORITY.—On default under an obligation or related 

12 agreement between the Secretary and the obligor, the Secretary, on terms 

13 that may be provided in the obligation or agreement, may— 

14 ‘‘(1) assume the obligor’s rights and duties under the obligation or 

15 agreement, make any payment in default, and notify the obligee or the 

16 obligee’s agent of the default and the Secretary’s assumption; or 

17 ‘‘(2) notify the obligee or the obligee’s agent of the default. 

18 ‘‘(b) DEMANDS BY OBLIGEES.— 

19 ‘‘(1) DEMAND.—If the Secretary proceeds under subsection (a)(2), 

20 the obligee or the obligee’s agent may demand that the Secretary pay 

21 the unpaid principal amount of the obligation and the unpaid interest 

22 on the obligation. The demand must be made within the earlier of— 

23 ‘‘(A) a period that may be specified in the guarantee or a re24 lated agreement; or 

25 ‘‘(B) 60 days from the date of the Secretary’s notice. 

26 ‘‘(2) PAYMENT.—If a demand is made under paragraph (1), the Sec27 retary shall pay to the obligee or the obligee’s agent the unpaid prin28 cipal amount of the obligation and the unpaid interest on the obligation 

29 to the date of payment. Payment shall be made within the earlier of— 

30 ‘‘(A) a period that may be specified in the guarantee or a re31 lated agreement; or 

32 ‘‘(B) 30 days from the date of the demand. 

33 ‘‘(c) CONTINUED EFFECT OF GUARANTEE.—A guarantee of an obligation 

34 remains in effect after an assumption of the obligation by the Secretary. 

35 ‘‘(d) ADDITIONAL RESPONSES.—If there is a default on an obligation, the 

36 Secretary shall conduct operations under this chapter in a manner that— 

37 ‘‘(1) maximizes the net present value return from the sale or disposi38 tion of assets associated with the obligation, including prompt referral 

39 to the Attorney General for collection as appropriate; 

40 ‘‘(2) minimizes the amount of any loss realized in the resolution of 

41 the guarantee; 
160 

•HR 1442 IH 

1 ‘‘(3) ensures adequate competition and fair and consistent treatment 

2 of offerors; and 

3 ‘‘(4) requires appraisal of assets by an independent appraiser. 

4 ‘‘§ 53723. Payments by Secretary and issuance of obligations 

5 ‘‘(a) CASH PAYMENT.—Amounts required to be paid by the Secretary 

6 under section 53721 or 53722 of this title shall be paid in cash. 

7 ‘‘(b) ISSUANCE OF OBLIGATIONS.—If amounts in the appropriate account 

8 under section 53717 of this title are not sufficient to make a payment re9 quired under section 53721 or 53722 of this title, the Secretary may issue 

10 obligations to the Secretary of the Treasury. The Secretary, with the ap11 proval of the Secretary of the Treasury, shall prescribe the form, denomina12 tion, maturity, and other terms (except the interest rate) of the obligations. 

13 The Secretary of the Treasury shall set the interest rate for the obligations, 

14 considering the current average market yield on outstanding marketable ob15 ligations of the United States Government of comparable maturities during 

16 the month before the obligations are issued. 

17 ‘‘(c) PURCHASE OF OBLIGATIONS.—The Secretary of the Treasury shall 

18 purchase the obligations issued under this section. To purchase the obliga19 tions, the Secretary of the Treasury may use as a public debt transaction 

20 the proceeds from the sale of securities issued under chapter 31 of title 31. 

21 The purposes for which securities may be issued under that chapter are ex22 tended to include the purchase of obligations under this subsection. The 

23 Secretary of the Treasury may sell obligations purchased under this section. 

24 A redemption, purchase, or sale of the obligations by the Secretary of the 

25 Treasury is a public debt transaction of the Government. 

26 ‘‘(d) DEPOSITS AND REDEMPTIONS.—The Secretary shall deposit 

27 amounts borrowed under this section in the appropriate account under sec28 tion 53717 of this title and make redemptions of the obligations from that 

29 account. 

30 ‘‘§ 53724. Rights to secured property 

31 ‘‘(a) ACQUISITION OF SECURITY RIGHTS.—When the Secretary makes a 

32 payment on, or assumes, an obligation under section 53721 or 53722 of this 

33 title, the Secretary acquires the rights under the security agreement with 

34 the obligor in the security held by the Secretary to guarantee the obligation. 

35 ‘‘(b) USE AND DISPOSITION OF SECURED PROPERTY.—Notwithstanding 

36 any other law relating to the acquisition, handling, or disposal of property 

37 by the United States Government, the Secretary has the right, in the Sec38 retary’s discretion, to complete, reconstruct, recondition, renovate, repair, 

39 maintain, operate, charter, or sell any property acquired under a security 

40 agreement with an obligor, or to place a vessel so acquired in the National 
161 

•HR 1442 IH 

1 Defense Reserve Fleet. The terms of a sale under this subsection shall be 

2 as approved by the Secretary. 

3 ‘‘§ 53725. Actions against obligor 

4 ‘‘(a) IN GENERAL.—For a default under a guaranteed obligation or re5 lated agreement, the Secretary may take any action against the obligor or 

6 another liable party that the Secretary considers necessary to protect the 

7 interests of the United States Government. A civil action may be brought 

8 in the name of the United States or the obligee. The obligee shall make 

9 available to the Government all records and evidence necessary to prosecute 

10 the action. 

11 ‘‘(b) TITLE, POSSESSION, AND PURCHASE.— 

12 ‘‘(1) IN GENERAL.—The Secretary may— 

13 ‘‘(A) accept a conveyance of title to and possession of property 

14 from the obligor or another party liable to the Secretary; and 

15 ‘‘(B) purchase the property for an amount not greater than the 

16 unpaid principal amount of the obligation and interest thereon. 

17 ‘‘(2) PAYMENT OF EXCESS.—If, through the sale of property, the 

18 Secretary receives an amount of cash greater than the unpaid principal 

19 amount of the obligation, the unpaid interest on the obligation, and the 

20 expenses of collecting those amounts, the Secretary shall pay the excess 

21 to the obligor. 

22 ‘‘SUBCHAPTER III—PARTICULAR PROJECTS 

23 ‘‘§ 53731. Commercial demonstration ocean thermal energy 

24 conversion facilities and plantships 

25 ‘‘(a) IN GENERAL.—Under subchapter I of this chapter, the Secretary 

26 may guarantee or make a commitment to guarantee the payment of the 

27 principal of and interest on an obligation that aids in financing (including 

28 reimbursement of an obligor for expenditures previously made for) the con29 struction, reconstruction, or reconditioning of a commercial demonstration 

30 ocean thermal energy conversion facility or plantship. This section may be 

31 used to guarantee obligations for a total of not more than 5 separate facili32 ties and plantships or a demonstrated 400 megawatt capacity, whichever 

33 comes first. 

34 ‘‘(b) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise pro35 vided in this section, a guarantee or commitment to guarantee under this 

36 section is subject to all the provisions applicable to a guarantee or commit37 ment to guarantee under subchapter I of this chapter. 

38 ‘‘(c) ECONOMIC SOUNDNESS.—The required determination of economic 

39 soundness under section 53708 of this title applies to a guarantee or com40 mitment to guarantee for that portion of a facility or plantship not to be 

41 supported with appropriated Federal funds. 
162 

•HR 1442 IH 

1 ‘‘(d) REASONABLENESS OF RISK.—A guarantee or commitment to guar2 antee may not be made under this section unless the Secretary of Energy, 

3 in consultation with the Secretary, certifies to the Secretary that, for the 

4 facility or plantship for which the guarantee or commitment to guarantee 

5 is sought, there is sufficient guarantee of performance and payment to lower 

6 the risk to the United States Government to a reasonable level. In deciding 

7 whether to issue such a certification, the Secretary of Energy shall con8 sider— 

9 ‘‘(1) the successful demonstration of the technology to be used in the 

10 facility at a scale sufficient to establish the likelihood of technical and 

11 economic viability in the proposed market; and 

12 ‘‘(2) the need of the United States to develop new and renewable 

13 sources of energy and the benefits to be realized from the construction 

14 and successful operation of the facility or plantship. 

15 ‘‘(e) AMOUNT OF OBLIGATION.—The total principal amount of an obliga16 tion guaranteed under this section may not exceed 87.5 percent of— 

17 ‘‘(1) the actual cost or depreciated actual cost of the facility or 

18 plantship; or 

19 ‘‘(2) if the facility or plantship is supported with appropriated Fed20 eral funds, the total principal amount of that portion of the actual cost 

21 or depreciated actual cost for which the obligor is obligated to secure 

22 financing under the agreement between the obligor and the Department 

23 of Energy or other Federal agency. 

24 ‘‘(f) OTEC DEMONSTRATION FUND.— 

25 ‘‘(1) IN GENERAL.—There is a special subaccount, known as the 

26 OTEC Demonstration Fund, in the account established under section 

27 53717(b)(1) of this title. 

28 ‘‘(2) USE AND OPERATION.—The OTEC Demonstration Fund shall 

29 be used for obligation guarantees authorized under this section that do 

30 not qualify under subchapter I of this chapter. Except as otherwise 

31 provided in this section, the OTEC Demonstration Fund shall be oper32 ated in the same manner as the parent account. However— 

33 ‘‘(A) amounts received by the Secretary under subchapter I of 

34 this chapter related to guarantees or commitments to guarantee 

35 made under this section shall be deposited only in the OTEC 

36 Demonstration Fund; and 

37 ‘‘(B) when obligations issued by the Secretary under section 

38 53723 of this title related to the OTEC Demonstration Fund are 

39 outstanding, any amount received by the Secretary under sub40 chapter I of this chapter related to ocean thermal energy conver-
163 

•HR 1442 IH 

1 sion facilities or plantships shall be deposited in the OTEC Dem2 onstration Fund. 

3 ‘‘(3) TRANSFERS.—Assets in the OTEC Demonstration Fund may 

4 be transferred to the parent account when and to the extent the bal5 ance in the OTEC Demonstration Fund exceeds the total guarantees 

6 or commitments to guarantee made under this section then out7 standing, plus obligations issued by the Secretary under section 53723 

8 of this title related to the OTEC Demonstration Fund. 

9 ‘‘(4) LIABILITY.—The parent account is not liable for a guarantee 

10 or commitment to guarantee made under this section. 

11 ‘‘(5) MAXIMUM UNPAID PRINCIPAL AMOUNT.—The total unpaid prin12 cipal amount of the obligations guaranteed with the backing of the 

13 OTEC Demonstration Fund and outstanding at any one time may not 

14 exceed $1,650,000,000. 

15 ‘‘(g) ISSUANCE AND PAYMENT OF OBLIGATIONS.—Section 53723 of this 

16 title applies to the OTEC Demonstration Fund. However, obligations issued 

17 by the Secretary under that section related to the OTEC Demonstration 

18 Fund shall be payable only from proceeds realized by the OTEC Dem19 onstration Fund. 

20 ‘‘(h) TAXATION OF INTEREST.—Interest on an obligation guaranteed 

21 under this section shall be included in gross income under chapter 1 of the 

22 Internal Revenue Code of 1986 (26 U.S.C. ch. 1). 

23 ‘‘§ 53732. Eligible export vessels 

24 ‘‘(a) APPLICABLE TERMS.—The Secretary may guarantee an obligation 

25 for an eligible export vessel in accordance with— 

26 ‘‘(1) the terms applicable under this chapter for vessels documented 

27 under the laws of the United States; or 

28 ‘‘(2) other terms the Secretary determines are more favorable than 

29 those terms and compatible with export credit terms offered by foreign 

30 governments for the sale of vessels built in foreign shipyards. 

31 ‘‘(b) INTERAGENCY COUNCIL.— 

32 ‘‘(1) ESTABLISHMENT.—There is an interagency council to carry out 

33 this section. 

34 ‘‘(2) COMPOSITION.—The council is composed of the following indi35 viduals or their designees: 

36 ‘‘(A) The Secretary of Transportation, who is the chairman of 

37 the council. 

38 ‘‘(B) The Secretary of the Treasury. 

39 ‘‘(C) The Secretary of State. 

40 ‘‘(D) The Assistant to the President for Economic Policy. 

41 ‘‘(E) The United States Trade Representative. 
164 

•HR 1442 IH 

1 ‘‘(F) The President and Chairman of the Export-Import Bank 

2 of the United States. 

3 ‘‘(3) FUNCTIONS.—The council shall— 

4 ‘‘(A) obtain information on shipbuilding loan guarantees, direct 

5 and indirect subsidies, and other favorable treatment of shipyards 

6 provided by foreign governments to shipyards in competition with 

7 United States shipyards; 

8 ‘‘(B) consult regularly with United States shipbuilders to obtain 

9 the essential information about international shipbuilding competi10 tion on which to set terms for loan guarantees under subsection 

11 (a)(2); and 

12 ‘‘(C) provide guidance to the Secretary in establishing terms for 

13 loan guarantees under subsection (a)(2). 

14 ‘‘(4) ANNUAL REPORT.—Not later than January 31 of each year, the 

15 Secretary shall submit to Congress a report on activities of the Sec16 retary under this section during the preceding year. The report shall 

17 include— 

18 ‘‘(A) documentation of sources of information about assistance 

19 by governments of other countries to shipyards in those countries; 

20 and 

21 ‘‘(B) a summary of recommendations made to the Secretary 

22 during the preceding year about applications submitted to the Sec23 retary during that year for loan guarantees to construct eligible 

24 export vessels. 

25 ‘‘(c) REQUIRED FINDINGS.— 

26 ‘‘(1) BENEFIT TO SHIPBUILDING INDUSTRY.—The Secretary may 

27 not guarantee or make a commitment to guarantee an obligation for 

28 an eligible export vessel unless the Secretary finds that the construc29 tion, reconstruction, or reconditioning of the vessel will aid in the tran30 sition of United States shipyards to commercial activities or will pre31 serve shipbuilding assets that would be essential in time of war or na32 tional emergency. 

33 ‘‘(2) PRIORITY OF DOCUMENTED VESSELS.—The Secretary may not 

34 make a commitment to guarantee an obligation for an eligible export 

35 vessel unless the Secretary determines that making the commitment 

36 will not result in denial of an economically sound application for a com37 mitment to guarantee an obligation for a vessel documented under the 

38 laws of the United States and operating in the domestic or foreign 

39 commerce of the United States. The Secretary has sole discretion in 

40 making the determination. In making the determination, the Secretary 

41 shall consider— 
165 

•HR 1442 IH 

1 ‘‘(A) the status and economic soundness of pending applications 

2 for commitments to guarantee obligations for vessels documented 

3 under the laws of the United States that are operating or will be 

4 operating in the domestic or foreign commerce of the United 

5 States; and 

6 ‘‘(B) the amount of guarantee authority available. 

7 ‘‘(d) RESTRICTION ON TRANSFER OF VESSEL.—The Secretary may not 

8 guarantee or make a commitment to guarantee an obligation for an eligible 

9 export vessel unless the owner of the vessel agrees with the Secretary that 

10 the vessel will not be transferred to a country designated by the Secretary 

11 of Defense as a country whose interests are hostile to the interests of the 

12 United States. 

13 ‘‘(e) REVIEW BY SECRETARY OF DEFENSE.— 

14 ‘‘(1) NOTIFICATION.—The Secretary shall promptly notify the Sec15 retary of Defense of the receipt of an application for a loan guarantee 

16 for an eligible export vessel. 

17 ‘‘(2) DISAPPROVAL.—The Secretary of Defense, within 30 days after 

18 receiving the notice, may disapprove the guarantee based on an assess19 ment of the potential use of the vessel in a manner that may harm the 

20 national security interests of the United States. The Secretary may not 

21 disapprove a guarantee solely because of the type of vessel to be con22 structed. 

23 ‘‘(3) DELEGATION.—The authority of the Secretary of Defense to 

24 disapprove a guarantee under this subsection may be delegated only to 

25 a civilian officer of the Department of Defense appointed by the Presi26 dent by and with the advice and consent of the Senate. 

27 ‘‘(4) PROHIBITION.—The Secretary may not make a loan guarantee 

28 disapproved by the Secretary of Defense under this subsection. 

29 ‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary may not issue a com30 mitment to guarantee an obligation for an eligible export vessel under this 

31 chapter after the last date on which such a commitment may be issued 

32 under any treaty or convention entered into after November 30, 1993, that 

33 prohibits guarantee of such an obligation. 

34 ‘‘§ 53733. Shipyard modernization and improvement 

35 ‘‘(a) DEFINITIONS.—In this section: 

36 ‘‘(1) ADVANCED SHIPBUILDING TECHNOLOGY.—The term ‘advanced 

37 shipbuilding technology’ includes— 

38 ‘‘(A) numerically controlled machine tools, robots, automated 

39 process control equipment, computerized flexible manufacturing 

40 systems, associated computer software, and other technology for 
166 

•HR 1442 IH 

1 improving shipbuilding and related industrial production that ad2 vance the state-of-the-art; and 

3 ‘‘(B) novel techniques and processes designed to improve ship4 building quality, productivity, and practice, and to promote sus5 tainable development, including engineering design, quality assur6 ance, concurrent engineering, continuous process production tech7 nology, energy efficiency, waste minimization, design for 

8 recyclability or parts reuse, inventory management, upgraded 

9 worker skills, and communications with customers and suppliers. 

10 ‘‘(2) GENERAL SHIPYARD FACILITY.—The term ‘general shipyard fa11 cility’ means— 

12 ‘‘(A) for operations on land— 

13 ‘‘(i) a structure or appurtenance thereto designed for the 

14 construction, reconstruction, repair, rehabilitation, or refur15 bishment of a vessel, including a graving dock, building way, 

16 ship lift, wharf, or pier crane; 

17 ‘‘(ii) the land necessary for the structure or appurtenance; 

18 and 

19 ‘‘(iii) equipment that is for use with the structure or ap20 purtenance and that is necessary for performing a function 

21 referred to in clause (i); and 

22 ‘‘(B) for operations not on land, a vessel, floating drydock, or 

23 barge built in the United States and used for, equipped to be used 

24 for, or of a type normally used for, performing a function referred 

25 to in subparagraph (A)(i). 

26 ‘‘(3) MODERN SHIPBUILDING TECHNOLOGY.—The term ‘modern 

27 shipbuilding technology’ means the best available proven technology, 

28 techniques, and processes appropriate to enhancing the productivity of 

29 shipyards. 

30 ‘‘(b) GENERAL AUTHORITY.—Under subchapter I of this chapter, the 

31 Secretary may guarantee or make a commitment to guarantee the payment 

32 of the principal of and interest on an obligation for advanced shipbuilding 

33 technology and modern shipbuilding technology of a general shipyard facility 

34 in the United States. Only a private shipyard is eligible to receive a guar35 antee. 

36 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise pro37 vided in this section, a guarantee or commitment to guarantee under this 

38 section is subject to all the provisions applicable to a guarantee or commit39 ment to guarantee under subchapter I of this chapter. 

40 ‘‘(d) AMOUNT OF OBLIGATION.—The principal amount of an obligation 

41 guaranteed under this chapter may not exceed 87.5 percent of the actual 
167 

•HR 1442 IH 

1 cost of the advanced shipbuilding technology or modern shipbuilding tech2 nology. 

3 ‘‘(e) TRANSFER OF AMOUNTS.—The Secretary may accept the transfer 

4 of amounts from a department, agency, or instrumentality of the United 

5 States Government and may use those amounts to cover the cost (as defined 

6 in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 

7 of making guarantees or commitments to guarantee under this section. 

8 ‘‘§ 53734. Replacement of vessels because of changes in oper9 ating standards 

10 ‘‘(a) GENERAL AUTHORITY.—Notwithstanding any other provision of this 

11 chapter, the Secretary, on terms the Secretary may prescribe, may guar12 antee or make a commitment to guarantee the payment of the principal of 

13 and interest on an obligation that aids in financing or refinancing (including 

14 reimbursement of an obligor for expenditures previously made for) a con15 tract for the construction or reconstruction of a vessel if— 

16 ‘‘(1) the vessel is designed and to be used for commercial use in 

17 coastwise, intercoastal, or foreign trade; 

18 ‘‘(2) the construction or reconstruction is necessary to replace a ves19 sel that cannot continue to be operated because of a change required 

20 by law in the standards for the operation of vessels, and the applicant 

21 for the guarantee or commitment would not otherwise legally be able 

22 to continue operating vessels in the trades in which the applicant oper23 ated vessels before the change; 

24 ‘‘(3) the applicant is presently engaged in transporting cargoes in 

25 vessels of the type and class that will be constructed or reconstructed 

26 under this section and agrees to employ vessels constructed or recon27 structed under this section as replacements only for vessels made obso28 lete by the change in operating standards; 

29 ‘‘(4) the capacity of the vessels to be constructed or reconstructed 

30 under this section will not increase the cargo carrying capacity of the 

31 vessels being replaced; 

32 ‘‘(5) the Secretary has not determined that the market demand for 

33 the vessel over its useful life will diminish so as to make granting the 

34 guarantee fiduciarily imprudent; 

35 ‘‘(6) the vessel, if to be reconstructed, will have a useful life of at 

36 least 15 years after the reconstruction; and 

37 ‘‘(7) the Secretary has considered the criteria specified in section 

38 53708(a)(3)–(5) of this title. 

39 ‘‘(b) TERM AND AMOUNT OF OBLIGATION.— 

40 ‘‘(1) TERM.—The term of an obligation guaranteed under this sec41 tion may not exceed 25 years. 
168 

•HR 1442 IH 

1 ‘‘(2) AMOUNT.—The amount of an obligation guaranteed under this 

2 section may not exceed 87.5 percent of the actual cost or depreciated 

3 actual cost to the applicant for the construction or reconstruction of 

4 the vessel. The Secretary may not establish a percentage under this 

5 paragraph that is to be applied uniformly to all guarantees or commit6 ments to guarantee made under this section. 

7 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—A guarantee or commit8 ment to guarantee under this section is also subject to sections 53701, 

9 53702(a), 53704, 53705, 53707(a), 53708(d) and (e), 53709(a), 

10 53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714, 53717, and 

11 53721–53725 of this title. 

12 ‘‘(d) SECURITY AGAINST DEFAULT.—The Secretary shall require by reg13 ulation that an applicant under this section provide adequate security 

14 against default. 

15 ‘‘(e) GUARANTEE FEES.—The Secretary may establish a fee for the guar16 antee of an obligation under this section that is in addition to the fee estab17 lished under section 53714 of this title. The fee may be— 

18 ‘‘(1) an annual fee of not more than an additional 1 percent added 

19 to the fee established under section 53714 of this title; or 

20 ‘‘(2) a fee based on the amount of the obligation versus the percent21 age of the obligor’s fleet being replaced by vessels constructed or recon22 structed under this section. 

23 ‘‘§ 53735. Fisheries financing and capacity reduction 

24 ‘‘(a) DEFINITION.—In this section, the term ‘program’ means a fishing 

25 capacity reduction program established under section 312 of the Magnuson26 Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a). 

27 ‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee the repay28 ment of debt obligations issued by entities under this section. Debt obliga29 tions to be guaranteed may be issued by any entity that has been approved 

30 by the Secretary and has agreed with the Secretary to conditions the Sec31 retary considers necessary for this section to achieve the objective of the 

32 program and to protect the interest of the United States. 

33 ‘‘(c) REQUIREMENTS OF OBLIGATIONS.—A debt obligation guaranteed 

34 under this section shall— 

35 ‘‘(1) be treated in the same manner and to the same extent as other 

36 obligations guaranteed under this chapter, except with respect to provi37 sions of this chapter that by their nature cannot be applied to obliga38 tions guaranteed under this section; 

39 ‘‘(2) have the fishing fees established under the program paid into 

40 a separate subaccount of the fishing capacity reduction fund estab41 lished under this section; 
169 

•HR 1442 IH 

1 ‘‘(3) not exceed $100,000,000 in an unpaid principal amount out2 standing at any one time for a program; 

3 ‘‘(4) have such maturity (not to exceed 20 years), take such form, 

4 and contain such conditions as the Secretary determines necessary for 

5 the program to which they relate; 

6 ‘‘(5) have as the exclusive source of repayment (subject to the second 

7 sentence of subsection (d)(2)) and as the exclusive payment security, 

8 the fishing fees established under the program; and 

9 ‘‘(6) at the discretion of the Secretary be issued in the public market 

10 or sold to the Federal Financing Bank. 

11 ‘‘(d) FISHING CAPACITY REDUCTION FUND.— 

12 ‘‘(1) IN GENERAL.—There is a separate account in the Treasury, 

13 known as the Fishing Capacity Reduction Fund. Within the Fund, at 

14 least one subaccount shall be established for each program into which 

15 shall be paid all fishing fees established under the program and other 

16 amounts authorized for the program. 

17 ‘‘(2) AVAILABILITY OF AMOUNTS.—Amounts in the Fund shall be 

18 available, without appropriation or fiscal year limitation, to the Sec19 retary to pay the cost of the program, including payments to financial 

20 institutions to pay debt obligations incurred by entities under this sec21 tion. Funds available for this purpose from other amounts available for 

22 the program may also be used to pay those debt obligations. 

23 ‘‘(3) INVESTMENT.—Amounts in the Fund that are not currently 

24 needed for the purpose of this section shall be kept on deposit or in25 vested in obligations of the United States Government. 

26 ‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations the Sec27 retary considers necessary to carry out this section. 

28 ‘‘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. 

29 ‘‘§ 53901. Definitions 

30 ‘‘In this chapter: 

31 ‘‘(1) AMERICAN VESSEL.—The term ‘American vessel’ includes— 

32 ‘‘(A) a documented vessel with a registry or coastwise endorse33 ment under chapter 121 of this title; 
170 

•HR 1442 IH 

1 ‘‘(B) an undocumented vessel owned or chartered by or made 

2 available to the United States Government; and 

3 ‘‘(C) a tug, barge, or other watercraft (whether or not docu4 mented) owned by a citizen of the United States and used in es5 sential water transportation or in the fisheries, except only for 

6 sport fishing. 

7 ‘‘(2) CARGO.—The term ‘cargo’ includes a loaded or empty container 

8 on a vessel. 

9 ‘‘(3) TRANSPORTATION IN THE WATERBORNE COMMERCE OF THE

10 UNITED STATES.—The term ‘transportation in the waterborne com11 merce of the United States’ includes the operation of a vessel in the 

12 fisheries, except only for sport fishing. 

13 ‘‘(4) WAR RISKS.—The term ‘war risks’ includes, to the extent the 

14 Secretary of Transportation determines— 

15 ‘‘(A) any part of a loss excluded from marine insurance cov16 erage under a ‘free of capture or seizure’ clause or analogous 

17 clause; and 

18 ‘‘(B) any other loss from a hostile act, including confiscation, 

19 expropriation, nationalization, or deprivation. 

20 ‘‘§ 53902. Authority to provide insurance 

21 ‘‘(a) IN GENERAL.—With the approval of the President, and after such 

22 consultation with interested agencies of United States Government as the 

23 President may require, the Secretary of Transportation may provide insur24 ance and reinsurance against loss or damage from war risks as provided by 

25 this chapter whenever it appears to the Secretary that insurance adequate 

26 for the needs of the waterborne commerce of the United States cannot be 

27 obtained on reasonable terms and conditions from companies authorized to 

28 do insurance business in a State of the United States. 

29 ‘‘(b) CONSIDERATION OF RISK.—Insurance or reinsurance under this 

30 chapter shall be based, insofar as practicable, on consideration of the risk 

31 involved. 

32 ‘‘(c) AVAILABILITY OF VESSEL DURING WAR OR NATIONAL EMER33 GENCY.—Insurance or reinsurance for a vessel may be provided under this 

34 chapter only on the condition that the vessel will be available to the Govern35 ment in time of war or national emergency. 

36 ‘‘§ 53903. Insurable interests 

37 ‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur38 ance and reinsurance under this chapter for— 

39 ‘‘(1) an American vessel, including a vessel under construction; 

40 ‘‘(2) a foreign vessel— 

41 ‘‘(A) owned by a citizen of the United States; or 
171 

•HR 1442 IH 

1 ‘‘(B) engaged in transportation in the waterborne commerce of 

2 the United States or in such other transportation by water or such 

3 other services as the Secretary considers to be in the interest of 

4 the national defense or national economy of the United States, 

5 when so engaged; 

6 ‘‘(3) cargo— 

7 ‘‘(A) shipped or to be shipped on a vessel insurable under this 

8 section, including by express or registered mail; 

9 ‘‘(B) owned by a citizen or resident of the United States; 

10 ‘‘(C) imported to or exported from the United States, or sold 

11 or purchased by a citizen or resident of the United States, under 

12 a contract of sale or purchase the terms of which provide that the 

13 risk of loss by war risks or the obligation to provide insurance 

14 against war risks is on a citizen or resident of the United States; 

15 or 

16 ‘‘(D) shipped between ports in the United States; 

17 ‘‘(4) disbursements, including advances to masters and general aver18 age disbursements, and freight and passage money of a vessel insurable 

19 under this section; 

20 ‘‘(5) personal effects of an individual on a vessel insurable under this 

21 section; 

22 ‘‘(6) loss of life, injury, or detention by an enemy of the United 

23 States after capture, with respect to an individual on a vessel insurable 

24 under this section; and 

25 ‘‘(7) statutory or contractual obligations or other liabilities of a ves26 sel insurable under this section or of the owner or charterer of such 

27 a vessel, of a nature customarily covered by insurance. 

28 ‘‘(b) CONSIDERATIONS FOR FOREIGN VESSELS.—In determining whether 

29 to provide insurance or reinsurance for a foreign vessel, the Secretary shall 

30 consider the characteristics, employment, and general management of the 

31 vessel by the owner or charterer. 

32 ‘‘(c) NON-WAR RISKS.—Insurance of a risk under subsection (a)(5)–(7), 

33 insofar as it involves a liability related to an individual on the vessel, may 

34 include risks other than war risks to the extent the Secretary considers ad35 visable. 

36 ‘‘§ 53904. Liability insurance for persons involved in war or 

37 defense efforts 

38 ‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur39 ance under this chapter against legal liability that a person may incur in 

40 providing services or facilities for a vessel if, in the opinion of the Secretary, 

41 the insurance— 
172 

•HR 1442 IH 

1 ‘‘(1) is required in prosecuting a war or for national defense; and 

2 ‘‘(2) cannot be obtained at reasonable rates or on reasonable terms 

3 and conditions from approved companies authorized to do insurance 

4 business in a State of the United States. 

5 ‘‘(b) LIMITATIONS.—Employer liability insurance and worker compensa6 tion insurance against legal liability to employees may not be provided under 

7 this section. 

8 ‘‘§ 53905. Agency insurance 

9 ‘‘(a) IN GENERAL.—With the approval of the President, an agency of the 

10 United States Government may obtain insurance provided for by this chap11 ter from the Secretary of Transportation, except as provided in sections 

12 17302 and 17303 of title 40. 

13 ‘‘(b) PREMIUM WAIVERS.—With the approval of the President, the Sec14 retary of Transportation may provide insurance under this chapter at the 

15 request of the Secretary of Defense and other agencies the President may 

16 prescribe, without payment of an insurance premium if the Secretary of De17 fense or agency agrees to indemnify the Secretary of Transportation against 

18 loss covered by the insurance. The Secretary of Defense and agencies may 

19 make such an indemnity agreement. 

20 ‘‘(c) PRESIDENTIAL APPROVAL.—The signature of the President (or an 

21 official designated by the President) on the agreement shall be treated as 

22 the approval required by section 53902(a) of this title. 

23 ‘‘§ 53906. Hull insurance valuation 

24 ‘‘(a) STATED VALUATION.—The valuation in a hull insurance policy for 

25 actual or constructive total loss of the insured vessel shall be a stated valu26 ation determined by the Secretary of Transportation. The stated valu27 ation— 

28 ‘‘(1) shall exclude national defense features paid for by the United 

29 States Government; and 

30 ‘‘(2) may not exceed the amount that would be payable if the owner31 ship of the vessel had been requisitioned under chapter 563 of this title 

32 at the time the insurance attached under the policy. 

33 ‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the insur34 ance attaches under a policy referred to in subsection (a) or within 60 days 

35 after the Secretary determines the valuation, whichever is later, the insured 

36 may reject the valuation and pay, at the rate provided in the policy, pre37 miums based on the asserted valuation the insured specifies at the time of 

38 rejection. However, the asserted valuation is not binding on the Government 

39 in any subsequent action on the policy. 

40 ‘‘(c) AMOUNT OF CLAIM.—If a vessel is actually or constructively totally 

41 lost and the insured under a policy referred to in subsection (a) has not 
173 

•HR 1442 IH 

1 rejected the stated valuation determined by the Secretary, the amount of a 

2 claim adjusted, compromised, settled, adjudged, or paid may not exceed the 

3 stated valuation. However, if the insured has rejected the valuation, the in4 sured— 

5 ‘‘(1) shall be paid, as a tentative advance only, 75 percent of the 

6 stated valuation; and 

7 ‘‘(2) may bring a civil action against the United States in a court 

8 having jurisdiction of the claim to recover a valuation equal to the just 

9 compensation the court determines would have been payable if the own10 ership of the vessel had been requisitioned under chapter 563 of this 

11 title at the time the insurance attached under the policy. 

12 ‘‘(d) ADJUSTING PREMIUMS.—If a court makes a determination as pro13 vided under subsection (c)(2), premiums paid under the policy shall be ad14 justed based on the court’s determination and the rates provided for in the 

15 policy. 

16 ‘‘§ 53907. Reinsurance 

17 ‘‘(a) IN GENERAL.—To the extent the Secretary of Transportation is au18 thorized to provide insurance under this chapter, the Secretary may provide 

19 reinsurance to a company authorized to do insurance business in a State 

20 of the United States. The Secretary may obtain reinsurance from such a 

21 company for any insurance provided by the Secretary under this chapter. 

22 ‘‘(b) RATES.—The Secretary may not provide reinsurance at rates less 

23 than, nor obtain reinsurance at rates more than, the rates established by 

24 the Secretary on the same or similar risks or the rates charged by the insur25 ance company for the insurance reinsured, whichever is more advantageous 

26 to the Secretary. However, the Secretary may provide an allowance to the 

27 insurance company for the costs of services and facilities the company pro28 vides, in an amount the Secretary considers reasonable according to good 

29 business practice. The allowance to the company may not include any 

30 amount for soliciting or stimulating insurance business. 

31 ‘‘§ 53908. Additional insurance privately obtained 

32 ‘‘With the approval of the Secretary of Transportation, a person having 

33 an insurable interest in a vessel may obtain insurance on the vessel with 

34 other underwriting agents in addition to the insurance with the Secretary. 

35 The Secretary is not entitled to the benefit of the additional insurance. 

36 ‘‘§ 53909. War risk insurance revolving fund 

37 ‘‘(a) IN GENERAL.—There is a war risk insurance revolving fund in the 

38 Treasury. 

39 ‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts appro40 priated to carry out this chapter and amounts received in carrying out this 

41 chapter. 
174 

•HR 1442 IH 

1 ‘‘(c) PAYMENTS.—There shall be paid from the fund amounts for return 

2 premiums, losses, settlements, judgments, and all liabilities incurred by the 

3 United States Government under this chapter. 

4 ‘‘(d) INVESTMENT.—The Secretary of Transportation may request the 

5 Secretary of the Treasury to invest such portion of the fund as is not, in 

6 the judgment of the Secretary of Transportation, required to meet the cur7 rent needs of the fund. These investments shall be made by the Secretary 

8 of the Treasury in public debt securities of the Government, with maturities 

9 suitable to the needs of the fund, and bearing interest rates determined by 

10 the Secretary of the Treasury, taking into consideration current market 

11 yields on outstanding marketable obligations of the Government of com12 parable maturity. Interest and benefits from the securities shall be deposited 

13 in the fund. 

14 ‘‘§ 53910. Administrative 

15 ‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying out this 

16 chapter, the Secretary of Transportation may act in accordance with com17 mercial practice in the marine insurance business. 

18 ‘‘(b) REGULATIONS.—The Secretary may prescribe regulations the Sec19 retary considers appropriate to carry out this chapter. 

20 ‘‘(c) POLICIES, RATES, AND ANNUAL FEES.—The Secretary may pre21 scribe and change forms and policies, and fix and change the amounts in22 sured and rates of premium, under this chapter. 

23 ‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an annual 

24 fee in an amount calculated to cover the expenses of processing applications 

25 for insurance, employing underwriting agents, and appointing experts under 

26 this chapter. 

27 ‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may settle 

28 and pay claims, and pay judgments against the United States, related to 

29 insurance under this chapter. 

30 ‘‘(f) UNDERWRITING AGENTS.— 

31 ‘‘(1) IN GENERAL.—The Secretary may, and when the Secretary 

32 finds it practical to do so shall, employ a domestic company or group 

33 of domestic companies, authorized to do marine insurance business in 

34 a State of the United States, to act as underwriting agent for the Sec35 retary. The services of an underwriting agent may be used in adjusting 

36 claims, but a claim may not be paid until approved by the Secretary. 

37 ‘‘(2) COMPENSATION.—The Secretary may allow the company or 

38 group of companies reasonable compensation for services as the under39 writing agent. The compensation may include an allowance for expenses 

40 reasonably incurred by the agent, but may not include any amount for 

41 soliciting or stimulating business. 
175 

•HR 1442 IH 

1 ‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in sub2 section (f)(2), the Secretary may not pay an insurance broker or other per3 son acting in a similar intermediary capacity a fee or other consideration 

4 for participating in arranging insurance when the Secretary directly insures 

5 any of the risk. 

6 ‘‘(h) EMPLOYMENT OF MARINE INSURANCE EXPERTS.—The Secretary, 

7 without regard to the laws and regulations on the employment of Federal 

8 employees, may appoint and prescribe the duties of experts in marine insur9 ance as the Secretary considers necessary to carry out this chapter. 

10 ‘‘(i) SERVICES OF OTHER GOVERNMENT AGENCIES.—With the consent of 

11 another agency of the United States Government, the Secretary may use in12 formation, services, facilities, officers, and employees of the agency in car13 rying out this chapter. 

14 ‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may prescribe by 

15 regulation vessel location reporting requirements for a vessel insured under 

16 this chapter. 

17 ‘‘§ 53911. Civil actions for losses 

18 ‘‘(a) IN GENERAL.—If there is a disagreement about a loss insured under 

19 this chapter, a civil action in admiralty may be brought against the United 

20 States in the district court of the United States for the district in which 

21 the plaintiff or the plaintiff’s agent resides. If the plaintiff has no residence 

22 in the United States, the action may be brought in the United States Dis23 trict Court for the District of Columbia or in the district court for any dis24 trict in which the Attorney General agrees to accept service. Any person 

25 who may have an interest in the insurance may be made a party, either ini26 tially or on the motion of either party. 

27 ‘‘(b) EXCLUSIVE REMEDY.—A civil action against the United States 

28 under this section is exclusive of any other action by reason of the same 

29 subject matter against an officer, employee, or agent employed or retained 

30 by the Government under this chapter. 

31 ‘‘(c) PROCEDURE.—A civil action under this section shall be heard and 

32 determined under chapter 309 of this title. 

33 ‘‘(d) TOLLING OF LIMITATIONS PERIOD.—If a claim is filed with the Sec34 retary of Transportation, the running of the limitations period for bringing 

35 a civil action is suspended until the Secretary denies the claim, and for 60 

36 days thereafter. The Secretary is deemed to have denied the claim if the 

37 Secretary does not act on the claim within 6 months after the claim is filed, 

38 unless the Secretary for good cause shown agrees with the claimant on a 

39 different period for the Secretary to act on the claim. 

40 ‘‘(e) INTERPLEADER.—If the Secretary acknowledges the indebtedness of 

41 the Government under the insurance and there is a dispute about the per-
176 

•HR 1442 IH 

1 sons entitled to receive payment, the Government may bring a civil action 

2 interpleading those persons. The action shall be brought in the United 

3 States District Court for the District of Columbia or in the district court 

4 for the district in which any of those persons resides. A person not residing 

5 or found in the district may be made a party by service in any reasonable 

6 manner the court directs. If the court is satisfied that unknown persons 

7 might make a claim under the insurance, the court may direct service on 

8 those unknown persons by publication in the Federal Register. Judgment 

9 after service by publication in the Federal Register discharges the Govern10 ment from further liability to all persons. 

11 ‘‘§ 53912. Expiration date 

12 ‘‘The authority of the Secretary of Transportation to provide insurance 

13 and reinsurance under this chapter expires on December 31, 2010. 

14 ‘‘PART D—PROMOTIONAL PROGRAMS

15 ‘‘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. 

16 ‘‘§ 55101. Application of coastwise laws 

17 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), the coastwise 

18 laws apply to the United States, including the island territories and posses19 sions of the United States. 

20 ‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to— 

21 ‘‘(1) the Virgin Islands until the President declares by proclamation 

22 that the coastwise laws apply to the Virgin Islands; or 

23 ‘‘(2) American Samoa. 

24 ‘‘§ 55102. Transportation of merchandise 

25 ‘‘(a) DEFINITION.—In this section, the term ‘merchandise’ includes— 

26 ‘‘(1) merchandise owned by the United States Government, a State, 

27 or a subdivision of a State; and 
177 

•HR 1442 IH 

1 ‘‘(2) valueless material. 

2 ‘‘(b) REQUIREMENTS.—Except as otherwise provided in this chapter or 

3 chapter 121 of this title, a vessel may not provide any part of the transpor4 tation of merchandise by water, or by land and water, between points in 

5 the United States to which the coastwise laws apply, either directly or via 

6 a foreign port, unless the vessel— 

7 ‘‘(1) is wholly owned by citizens of the United States for purposes 

8 of engaging in the coastwise trade; and 

9 ‘‘(2) has been issued a certificate of documentation with a coastwise 

10 endorsement under chapter 121 or is exempt from documentation but 

11 would otherwise be eligible for such a certificate and endorsement. 

12 ‘‘(c) PENALTY.—Merchandise transported in violation of subsection (b) is 

13 liable to seizure by and forfeiture to the Government. Alternatively, an 

14 amount equal to the value of the merchandise (as determined by the Sec15 retary of Homeland Security) or the actual cost of the transportation, 

16 whichever is greater, may be recovered from any person transporting the 

17 merchandise or causing the merchandise to be transported. 

18 ‘‘§ 55103. Transportation of passengers 

19 ‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter or chap20 ter 121 of this title, a vessel may not transport passengers between ports 

21 or places in the United States, either directly or via a foreign port, unless 

22 the vessel— 

23 ‘‘(1) is wholly owned by citizens of the United States for purposes 

24 of engaging in the coastwise trade; and 

25 ‘‘(2) has been issued a certificate of documentation with a coastwise 

26 endorsement under chapter 121 or is exempt from documentation but 

27 would otherwise be eligible for such a certificate and endorsement. 

28 ‘‘(b) PENALTY.—The penalty for violating subsection (a) is $300 for each 

29 passenger transported and landed. 

30 ‘‘§ 55104. Transportation of passengers between Puerto Rico 

31 and other ports in the United States 

32 ‘‘(a) DEFINITIONS.—In this section: 

33 ‘‘(1) CERTIFICATE.—The term ‘certificate’ means a certificate of fi34 nancial responsibility for indemnification of passengers for nonperform35 ance of transportation issued by the Federal Maritime Commission 

36 under section 44102 of this title. 

37 ‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ means a ves38 sel of similar size, or offering similar service, as any other vessel trans39 porting passengers under subsection (b). 
178 

•HR 1442 IH 

1 ‘‘(b) EXEMPTION.—Except as otherwise provided in this section, a vessel 

2 not qualified to engage in the coastwise trade may transport passengers be3 tween a port in Puerto Rico and another port in the United States. 

4 ‘‘(c) EXPIRATION OF EXEMPTION.— 

5 ‘‘(1) WHEN COASTWISE-QUALIFIED VESSEL OFFERING SERVICE.—On 

6 a showing to the Secretary of the department in which the Coast Guard 

7 is operating, by the vessel owner or charterer, that a United States 

8 passenger vessel qualified to engage in the coastwise trade is offering 

9 or advertising passenger service between a port in Puerto Rico and an10 other port in the United States pursuant to a certificate, the Secretary 

11 shall notify the owner or operator of each vessel transporting pas12 sengers under subsection (b) to terminate that transportation within 

13 270 days after the Secretary’s notification. Except as provided in sub14 section (d), the authority to transport passengers under subsection (b) 

15 expires at the end of that 270-day period. 

16 ‘‘(2) WHEN NON-COASTWISE-QUALIFIED VESSEL OFFERING SERV17 ICE.—On a showing to the Secretary, by the vessel owner or charterer, 

18 that a United States passenger vessel not qualified to engage in the 

19 coastwise trade is offering or advertising passenger service between a 

20 port in Puerto Rico and another port in the United States pursuant 

21 to a certificate, the Secretary shall notify the owner or operator of each 

22 foreign vessel transporting passengers under subsection (b) to termi23 nate that transportation within 270 days after the Secretary’s notifica24 tion. Except as provided in subsection (d), the authority of a foreign 

25 vessel to transport passengers under subsection (b) expires at the end 

26 of that 270-day period. 

27 ‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising the 

28 service described in subsection (c) has not begun that service within 270 

29 days after the Secretary’s notification, the expiration provided by subsection 

30 (c) is delayed until 90 days after the vessel offering or advertising the serv31 ice begins that service. 

32 ‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that the 

33 service on which an expiration was based is no longer available, the expired 

34 authority to transport passengers is reinstated. 

35 ‘‘§ 55105. Transportation of hazardous waste 

36 ‘‘(a) IN GENERAL.—The transportation of hazardous waste, as defined in 

37 section 1004(5) of the Resource Conservation and Recovery Act of 1976 (42 

38 U.S.C. 6903(5)), from a point in the United States to sea for incineration 

39 is deemed to be transportation of merchandise under section 55102 of this 

40 title. 

41 ‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.— 
179 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—Subsection (a) does not apply to transportation 

2 performed by a foreign ocean incineration vessel owned by or under 

3 construction on May 1, 1982, for a corporation wholly owned by citi4 zens of the United States under section 50501(a)–(c) of this title. 

5 ‘‘(2) STANDARDS FOR INCINERATION EQUIPMENT.—Incineration 

6 equipment on a vessel described in paragraph (1) must meet standards 

7 of the Coast Guard and the Environmental Protection Agency. 

8 ‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall be in9 spected by the Coast Guard, regardless of whether inspected by the na10 tion in which it is registered. The inspection shall be the same as would 

11 be required of a documented vessel, including drydock inspection and 

12 internal examination of tanks and void spaces. The inspection may be 

13 made concurrently with an inspection by that nation or within one year 

14 after the initial issuance or next scheduled issuance of the Safety of 

15 Life at Sea Safety Construction Certificate. In making the inspection, 

16 the Coast Guard shall refer to the condition of the hull and super17 structure established by the initial foreign certification as the basis for 

18 evaluating the current condition of the hull and superstructure. The 

19 Coast Guard shall allow the substitution of fittings, material, appa20 ratus, equipment, and appliances different from those required for doc21 umented vessels if satisfied they are equivalent and at least as effective 

22 as those required for documented vessels. A satisfactory inspection 

23 under this paragraph shall be certified in writing by the Secretary of 

24 the department in which the Coast Guard is operating. 

25 ‘‘(c) EFFECTIVE DATE.—Subsection (a) is not effective until an appro26 priate vessel has been built and documented under chapter 121 of this title. 

27 ‘‘§ 55106. Merchandise transferred between barges 

28 ‘‘(a) IN GENERAL.—On terms and conditions the Secretary of Homeland 

29 Security may prescribe by regulation, the Secretary may suspend the appli30 cation of section 55102 of this title to the transportation of merchandise 

31 that is transferred, when moving in the foreign trade of the United States, 

32 from a barge certified by the owner or operator as designed specifically for 

33 carriage on a vessel and carried regularly on a vessel in foreign trade, to 

34 another such barge owned or leased by the same owner or operator. How35 ever, this subsection does not apply to transportation between the conti36 nental United States and noncontiguous States, territories, or possessions 

37 to which the coastwise laws apply. 

38 ‘‘(b) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section 

39 applies to a vessel of foreign registry only if the Secretary of Homeland Se40 curity finds, based on information from the Secretary of State, that the gov-
180 

•HR 1442 IH 

1 ernment of the nation of registry extends reciprocal privileges to vessels of 

2 the United States. 

3 ‘‘§ 55107. Empty cargo containers and barges 

4 ‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on terms and 

5 conditions the Secretary of Homeland Security may prescribe by regulation, 

6 section 55102 of this title does not apply to the transportation of— 

7 ‘‘(1) empty cargo vans, empty lift vans, or empty shipping tanks; 

8 ‘‘(2) equipment for use with cargo vans, lift vans, or shipping tanks; 

9 ‘‘(3) empty barges specifically designed for carriage aboard a vessel 

10 and equipment (except propulsion equipment) for use with those 

11 barges; 

12 ‘‘(4) empty instruments for international traffic exempted from the 

13 customs laws under section 322(a) of the Tariff Act of 1930 (19 

14 U.S.C. 1322(a)); or 

15 ‘‘(5) stevedoring equipment and material. 

16 ‘‘(b) CONDITIONS.— 

17 ‘‘(1) PARAGRAPHS (1)–(4).—Paragraphs (1)–(4) of subsection (a) 

18 apply only if the items named are owned or leased by the owner or op19 erator of the vessel and transported for its use in handling its cargo 

20 in foreign trade. 

21 ‘‘(2) PARAGRAPH (5).—Paragraph (5) of subsection (a) applies only 

22 if the items named are— 

23 ‘‘(A) owned or leased by the owner or operator of the vessel or 

24 by the stevedoring company having the contract for the loading or 

25 unloading of the vessel; and 

26 ‘‘(B) transported without charge for use in the handling of 

27 cargo in foreign trade. 

28 ‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section 

29 applies to a vessel of foreign registry only if the Secretary of Homeland Se30 curity finds, based on information from the Secretary of State, that the gov31 ernment of the nation of registry extends reciprocal privileges to vessels of 

32 the United States. 

33 ‘‘§ 55108. Platform jackets 

34 ‘‘(a) DEFINITIONS.—In this section: 

35 ‘‘(1) COASTWISE QUALIFIED VESSEL.—The term ‘coastwise qualified 

36 vessel’ means a vessel that has been issued a certificate of documenta37 tion with a coastwise endorsement under chapter 121 of this title. 

38 ‘‘(2) PLATFORM JACKET.—The term ‘platform jacket’ refers to a 

39 single physical component and includes any type of offshore explo40 ration, development, or production structure or component thereof, in41 cluding— 
181 

•HR 1442 IH 

1 ‘‘(A) platform jackets; 

2 ‘‘(B) tension leg or SPAR platform superstructures (including 

3 the deck, drilling rig and support utilities, and supporting struc4 ture); 

5 ‘‘(C) hull (including vertical legs and connecting pontoons or 

6 vertical cylinder); 

7 ‘‘(D) tower and base sections of a platform jacket; 

8 ‘‘(E) jacket structures; and 

9 ‘‘(F) deck modules (known as ‘topsides’). 

10 ‘‘(b) AUTHORIZED TRANSPORTATION.—Section 55102 of this title does 

11 not apply to the transportation of a platform jacket in or on a non-coastwise 

12 qualified launch barge between two points in the United States, at one of 

13 which there is an installation or other device within the meaning of section 

14 4(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)), if— 

15 ‘‘(1) the launch barge was built before December 31, 2000, and has 

16 a launch capacity of at least 12,000 long tons; and 

17 ‘‘(2) the Secretary of Transportation makes a determination, in ac18 cordance with procedures established under subsection (c), that a suit19 able coastwise qualified vessel is not available for use in the transpor20 tation and, if needed, launch or installation of a platform jacket. 

21 ‘‘(c) PROCEDURES TO MAXIMIZE USE OF COASTWISE QUALIFIED VES22 SELS.—The Secretary of Transportation shall adopt procedures imple23 menting this section that are reasonably designed to provide timely informa24 tion so as to maximize the use of coastwise qualified vessels. The procedures 

25 shall, among other things, establish that for purposes of this section, a 

26 coastwise qualified vessel shall be deemed to be not available only if— 

27 ‘‘(1) on application by an owner or operator for the use of a non28 coastwise qualified launch barge for transportation of a platform jacket 

29 under this section (which application shall include all relevant informa30 tion, including engineering details and timing requirements), the Sec31 retary promptly publishes a notice in the Federal Register— 

32 ‘‘(A) describing the project and the platform jacket involved; 

33 ‘‘(B) advising that all relevant information reasonably needed to 

34 assess the transportation requirements for the platform jacket will 

35 be made available to interested parties on request; and 

36 ‘‘(C) requesting that information on the availability of coastwise 

37 qualified vessels be submitted within 30 days after publication of 

38 that notice; and 

39 ‘‘(2)(A) no information is submitted to the Secretary within that 30 

40 day period; or 
182 

•HR 1442 IH 

1 ‘‘(B) the owner or operator of a coastwise qualified vessel submits 

2 information to the Secretary asserting that the owner or operator has 

3 a suitable coastwise qualified vessel available for the transportation, but 

4 the Secretary determines, within 90 days after the notice is first pub5 lished, that the coastwise qualified vessel is not suitable or reasonably 

6 available for the transportation. 

7 ‘‘§ 55109. Dredging 

8 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), a vessel may 

9 engage in dredging in the navigable waters of the United States only if— 

10 ‘‘(1) the vessel is wholly owned by citizens of the United States for 

11 purposes of engaging in the coastwise trade; 

12 ‘‘(2) the charterer, if any, is a citizen of the United States for pur13 poses of engaging in the coastwise trade; and 

14 ‘‘(3) the vessel has been issued a certificate of documentation with 

15 a coastwise endorsement under chapter 121 of this title or is exempt 

16 from documentation but would otherwise be eligible for such a certifi17 cate and endorsement. 

18 ‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with a reg19 istry endorsement may engage in the dredging of gold in Alaska. 

20 ‘‘(c) PENALTY.—If a vessel is operated in knowing violation of this sec21 tion, the vessel and its equipment are liable to seizure by and forfeiture to 

22 the United States Government. 

23 ‘‘§ 55110. Transportation of dredged material 

24 ‘‘Section 55102 of this title applies to the transportation of valueless ma25 terial or dredged material, regardless of whether it has commercial value, 

26 from a point in the United States or on the high seas within the exclusive 

27 economic zone, to another point in the United States or on the high seas 

28 within the exclusive economic zone. 

29 ‘‘§ 55111. Towing 

30 ‘‘(a) IN GENERAL.—Except when towing a vessel in distress, a vessel may 

31 not do any part of any towing described in subsection (b) unless the towing 

32 vessel— 

33 ‘‘(1) is wholly owned by citizens of the United States for purposes 

34 of engaging in the coastwise trade; and 

35 ‘‘(2) has been issued a certificate of documentation with a coastwise 

36 endorsement under chapter 121 of this title or is exempt from docu37 mentation but would otherwise be eligible for such a certificate and en38 dorsement. 

39 ‘‘(b) APPLICABLE TOWING.—Subsection (a) applies to the towing of— 

40 ‘‘(1) a vessel between ports or places in the United States to which 

41 the coastwise laws apply, either directly or via a foreign port or place; 
183 

•HR 1442 IH 

1 ‘‘(2) a vessel from point to point within the harbors of ports or 

2 places to which the coastwise laws apply; or 

3 ‘‘(3) a vessel transporting valueless material or dredged material, re4 gardless of whether it has commercial value, from a point in the United 

5 States or on the high seas within the exclusive economic zone, to an6 other point in the United States or on the high seas within the exclu7 sive economic zone. 

8 ‘‘(c) PENALTIES.— 

9 ‘‘(1) OWNER AND MASTER.—The owner and master of a vessel tow10 ing another vessel in violation of this section are each liable for a pen11 alty of at least $350 but not more than $1,100. A penalty under this 

12 paragraph constitutes a lien on the vessel. The lien is enforceable in 

13 a district court of the United States for any district in which the vessel 

14 is found. Clearance may not be granted to the vessel until the penalties 

15 have been paid. 

16 ‘‘(2) VESSEL.—In addition to the penalties under paragraph (1), the 

17 towing vessel is liable for a penalty of $60 per ton based on the ton18 nage of each towed vessel. 

19 ‘‘§ 55112. Vessel escort operations and towing assistance 

20 ‘‘(a) IN GENERAL.—Except in the case of a vessel in distress, only a ves21 sel of the United States may perform the following escort vessel operations 

22 within the navigable waters of the United States: 

23 ‘‘(1) Operations that commence or terminate at a port or place in 

24 the United States. 

25 ‘‘(2) Operations required by United States law or regulation. 

26 ‘‘(3) Operations provided in whole or in part within or through navi27 gation facilities owned, maintained, or operated by the United States 

28 Government or the approaches to those facilities, other than facilities 

29 operated by the St. Lawrence Seaway Development Corporation on the 

30 St. Lawrence River portion of the Seaway. 

31 ‘‘(b) ESCORT VESSELS.—For purposes of this section, an escort vessel 

32 is— 

33 ‘‘(1) any vessel that is assigned and dedicated to assist another ves34 sel, whether or not tethered to that vessel, solely as a safety precaution 

35 to assist in controlling the speed or course of the assisted vessel in the 

36 event of a steering or propulsion equipment failure, or any other simi37 lar emergency circumstance, or in restricted waters where additional 

38 assistance in maneuvering the vessel is required to ensure its safe oper39 ation; and 
184 

•HR 1442 IH 

1 ‘‘(2) in the case of a vessel being towed under section 55111 of this 

2 title, any vessel that is assigned and dedicated to the vessel being towed 

3 in addition to any towing vessel required under that section. 

4 ‘‘(c) RELATIONSHIP TO OTHER LAW.—This section does not affect sec5 tion 55111 of this title. 

6 ‘‘(d) PENALTY.—A person violating this section is liable to the Govern7 ment for a civil penalty of not more than $10,000 for each day during which 

8 the violation occurs. 

9 ‘‘§ 55113. Use of foreign documented oil spill response ves10 sels 

11 ‘‘Notwithstanding any other provision of law, an oil spill response vessel 

12 documented under the laws of a foreign country may operate in waters of 

13 the United States on an emergency and temporary basis, for the purpose 

14 of recovering, transporting, and unloading in a United States port oil dis15 charged as a result of an oil spill in or near those waters, if— 

16 ‘‘(1) an adequate number and type of oil spill response vessels docu17 mented under the laws of the United States cannot be engaged to re18 cover oil from an oil spill in or near those waters in a timely manner, 

19 as determined by the Federal On-Scene Coordinator for a discharge or 

20 threat of a discharge of oil; and 

21 ‘‘(2) the foreign country has by its laws accorded to vessels of the 

22 United States the same privileges accorded to vessels of the foreign 

23 country under this section. 

24 ‘‘§ 55114. Unloading fish from foreign vessels 

25 ‘‘(a) PROHIBITIONS.—Except as otherwise provided by this section or a 

26 treaty or convention to which the United States is a party, a foreign vessel 

27 may not unload, in a port of the United States— 

28 ‘‘(1) its catch of fish taken on board on the high seas or fish prod29 ucts processed from that catch of fish; or 

30 ‘‘(2) fish or fish products taken on board that vessel on the high seas 

31 from a vessel engaged in fishing operations or the processing of fish 

32 or fish products. 

33 ‘‘(b) REGULATIONS ON OBTAINING INFORMATION.—The Secretary of 

34 Commerce may prescribe regulations the Secretary considers necessary to 

35 obtain information on the transportation of fish products by vessels of the 

36 United States for foreign fish processing vessels to points in the United 

37 States. 

38 ‘‘(c) VIRGIN ISLANDS EXEMPTION.—A foreign vessel of not more than 50 

39 feet overall in length may unload its catch of fresh fish (whole or with the 

40 heads, viscera, or fins removed, but not frozen, otherwise processed, or fur41 ther advanced) in a port of the Virgin Islands for immediate consumption 
185 

•HR 1442 IH 

1 in those islands. Fish unloaded under this subsection may be sold or trans2 ferred only for immediate consumption. In the absence of satisfactory evi3 dence that a sale or transfer to an agent, representative, or employee of a 

4 freezer or cannery is for immediate consumption, the sale or transfer is 

5 deemed not to be for immediate consumption. This subsection does not pro6 hibit the freezing, smoking, or other processing of fresh fish by the ultimate 

7 consumer of the fish. 

8 ‘‘(d) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded in the Vir9 gin Islands that are retained, sold, or transferred, except as allowed by sub10 section (c), are liable to seizure by and forfeiture to the United States Gov11 ernment. A person retaining, selling, transferring, buying, or receiving the 

12 fish is liable to the Government for a civil penalty of not more than $1,000 

13 for each violation. A penalty or forfeiture under this section may be com14 promised, modified, or remitted under section 2107(b) of this title. 

15 ‘‘§ 55115. Supplies on fish processing vessels 

16 ‘‘Section 55102 of this title does not apply to supplies aboard a United 

17 States documented fish processing vessel that are necessary and used for 

18 processing or assembling fishery products aboard such a vessel. 

19 ‘‘§ 55116. Canadian rail lines 

20 ‘‘Section 55102 of this title does not apply to the transportation of mer21 chandise between points in the continental United States, including Alaska, 

22 over through routes in part over Canadian rail lines and connecting water 

23 facilities if the routes are recognized by the Surface Transportation Board 

24 and rate tariffs for the routes have been filed with the Board. 

25 ‘‘§ 55117. Great Lakes rail route 

26 ‘‘Section 55102 of this title does not apply to the transportation of mer27 chandise loaded on a railroad car or to a motor vehicle with or without a 

28 trailer, and with its passengers or contents when accompanied by the oper29 ator, when the railroad car or motor vehicle is transported in a railroad car 

30 ferry operated between fixed terminals on the Great Lakes as part of a rail 

31 route, if— 

32 ‘‘(1) the car ferry is owned by a common carrier by water and oper33 ated as part of a rail route with the approval of the Surface Transpor34 tation Board; 

35 ‘‘(2) the stock of the common carrier by water, or its predecessor, 

36 was owned or controlled by a common carrier by rail prior to June 5, 

37 1920; 

38 ‘‘(3) the stock of the common carrier owning the car ferry is, with 

39 the approval of the Board, now owned or controlled by a common car40 rier by rail; and 
186 

•HR 1442 IH 

1 ‘‘(4) the car ferry is built in and documented under the laws of the 

2 United States. 

3 ‘‘§ 55118. Foreign railroads whose road enters by ferry, tug4 boat, or towboat 

5 ‘‘A foreign railroad, whose road enters the United States by ferry, tug6 boat, or towboat, may own and operate a vessel not having a coastwise en7 dorsement in connection with the water transportation of the passenger, 

8 freight, express, baggage, and mail cars used by that road, together with 

9 the passengers, freight, express matter, baggage, and mails transported in 

10 those cars. However, the foreign railroad is subject to the same restrictions 

11 imposed by law on a vessel of the United States entering a port of the 

12 United States from the same foreign country. Except as otherwise author13 ized by this chapter, the ferry, tugboat, or towboat may not, under penalty 

14 of forfeiture, be used in the transportation of merchandise between ports 

15 or places in the United States to which the coastwise laws apply. 

16 ‘‘§ 55119. Yukon River 

17 ‘‘Section 55102 of this title does not apply to the transportation of mer18 chandise on the Yukon River until the Alaska Railroad is completed and the 

19 Secretary of Transportation finds that proper facilities will be available for 

20 transportation by citizens of the United States to properly handle the traf21 fic. 

22 ‘‘§ 55120. Transshipment of imported merchandise intended 

23 for immediate exportation 

24 ‘‘The Secretary of Homeland Security may prescribe regulations for the 

25 transshipment and transportation of merchandise that is imported into the 

26 United States by sea for immediate exportation to a foreign port by sea, 

27 or by a river, the right to ascend or descend which for the purposes of com28 merce is secured by treaty to the citizens of the United States and the sub29 jects of a foreign power. 

30 ‘‘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. 
187 

•HR 1442 IH 

‘‘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. 

1 ‘‘SUBCHAPTER I—GENERAL 

2 ‘‘§ 55301. Priority loading for coal 

3 ‘‘A vessel engaged in the coastwise transportation of coal produced in the 

4 United States, from a port in the United States to another port in the 

5 United States, shall be given priority in loading at any of those ports ahead 

6 of a waiting vessel engaged in the export transportation of coal produced 

7 in the United States. However, if the Secretary of Transportation finds that 

8 it is in the national interest, the Secretary may eliminate this priority load9 ing at any port. The Secretary shall report to Congress within 30 days an 

10 action eliminating priority loading under this section. 

11 ‘‘§ 55302. Transportation of United States Government per12 sonnel 

13 ‘‘(a) IN GENERAL.—An officer or employee of the United States Govern14 ment traveling by sea on official business overseas or to or from a territory 

15 or possession of the United States shall travel and transport personal effects 

16 on a vessel documented under the laws of the United Sates if such a vessel 

17 is available, unless the necessity of the mission requires the use of a foreign 

18 vessel. 

19 ‘‘(b) REGULATIONS.—The Administrator of General Services shall pre20 scribe regulations under which agencies may not pay for or reimburse an 

21 officer or employee for travel or transportation expenses incurred on a for22 eign vessel in the absence of satisfactory proof of the necessity of using the 

23 vessel. 

24 ‘‘§ 55303. Motor vehicles owned by United States Govern25 ment personnel 

26 ‘‘Notwithstanding any other law, privately-owned American shipping serv27 ices may be used to transport motor vehicles owned by personnel of the 

28 United States Government whenever transportation of those vehicles at Gov29 ernment expense is otherwise authorized by law. 

30 ‘‘§ 55304. Exports financed by the United States Government 

31 ‘‘It is the sense of Congress that any loans made by an instrumentality 

32 of the United States Government to foster the exporting of agricultural or 

33 other products shall provide that the products may be transported only on 

34 vessels of the United States unless, as to any or all of those products, the 

35 Secretary of Transportation, after investigation, certifies to the instrumen36 tality that vessels of the United States are not available in sufficient num-
188 

•HR 1442 IH 

1 ber, in sufficient tonnage capacity, on necessary schedules, or at reasonable 

2 rates. 

3 ‘‘§ 55305. Cargoes procured, furnished, or financed by the 

4 United States Government 

5 ‘‘(a) DEFINITION.—In this section, the term ‘privately-owned United 

6 States documented commercial vessel’ does not include a vessel that, after 

7 September 21, 1961, was built or rebuilt outside the United States or docu8 mented under the laws of a foreign country, until the vessel has been docu9 mented under the laws of the United States for at least 3 years. 

10 ‘‘(b) MINIMUM TONNAGE.—When the United States Government pro11 cures, contracts for, or otherwise obtains for its own account, or furnishes 

12 to or for the account of a foreign country without provision for reimburse13 ment, any equipment, materials, or commodities, within or without the 

14 United States, or advances funds or credits, or guarantees the convertibility 

15 of foreign currencies in connection with the furnishing of the equipment, 

16 materials, or commodities, the appropriate agencies shall take steps nec17 essary and practicable to ensure that at least 50 percent of the gross ton18 nage of the equipment, materials, or commodities (computed separately for 

19 dry bulk carriers, dry cargo liners, and tankers) which may be transported 

20 on ocean vessels is transported on privately-owned United States docu21 mented commercial vessels, to the extent those vessels are available at fair 

22 and reasonable rates for United States documented commercial vessels, in 

23 a manner that will ensure a fair and reasonable participation of United 

24 States documented commercial vessels in those cargoes by geographic areas. 

25 ‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Congress (by 

26 concurrent resolution or otherwise) may waive this section temporarily by— 

27 ‘‘(1) declaring the existence of an emergency justifying a waiver; and 

28 ‘‘(2) notifying the appropriate agencies of the waiver. 

29 ‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having responsibility 

30 under this section shall administer its programs with respect to this section 

31 under regulations prescribed by the Secretary of Transportation. The Sec32 retary shall review the administration of those programs and report annu33 ally to Congress on their administration. 

34 ‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF 

35 AGRICULTURAL COMMODITIES 

36 ‘‘§ 55311. Findings and purposes 

37 ‘‘(a) FINDINGS.—Congress finds that— 

38 ‘‘(1) a productive and healthy agricultural industry and a strong and 

39 active United States maritime industry are vitally important to the eco40 nomic well-being and security of the United States; 
189 

•HR 1442 IH 

1 ‘‘(2) both industries must compete in international markets increas2 ingly dominated by foreign trade barriers and the subsidization prac3 tices of foreign governments; and 

4 ‘‘(3) increased agricultural exports and the use of merchant vessels 

5 of the United States contribute positively to the United States balance 

6 of trade and generate employment opportunities in the United States. 

7 ‘‘(b) PURPOSES.—The purposes of this subchapter are to— 

8 ‘‘(1) enable the Secretary of Agriculture to plan export programs ef9 fectively, by clarifying the ocean transportation requirements applicable 

10 to those programs; 

11 ‘‘(2) take immediate and positive steps to promote the growth of the 

12 cargo-carrying capacity of the United States merchant marine; 

13 ‘‘(3) expand international trade in United States agricultural com14 modities and products and develop, maintain, and expand markets for 

15 United States agricultural exports; 

16 ‘‘(4) improve the efficiency of administration of both the commodity 

17 purchasing and selling activities and the ocean transportation activities 

18 associated with export programs sponsored by the Secretary; 

19 ‘‘(5) stimulate and promote the agricultural and maritime industries 

20 of the United States and encourage cooperative efforts by both indus21 tries to address their common problems; and 

22 ‘‘(6) provide for the appropriate disposition of these findings and 

23 purposes. 

24 ‘‘§ 55312. Determining prevailing world market price 

25 ‘‘(a) AGRICULTURAL COMMODITIES AND PRODUCTS.—The prevailing 

26 world market price for agricultural commodities or their products shall be 

27 determined under this subchapter under procedures prescribed by the Sec28 retary of Agriculture. The Secretary shall prescribe the procedures by regu29 lation, with notice and opportunity for public comment under section 553 

30 of title 5. 

31 ‘‘(b) SERVICES AND NON-AGRICULTURAL COMMODITIES AND PROD32 UCTS.—If a determination of the prevailing world market price of any other 

33 type of materials, goods, equipment, or service is required to determine 

34 whether a barter or exchange transaction is subject to section 55314(b)(6) 

35 or (7) of this title, the determination shall be made by the Secretary of Ag36 riculture in consultation with the heads of other appropriate agencies. 

37 ‘‘§ 55313. Exemption of certain agricultural exports from 

38 cargo preference provisions 

39 ‘‘Sections 55304 and 55305 of this title do not apply to export activities 

40 of the Secretary of Agriculture or the Commodity Credit Corporation under 

41 which— 
190 

•HR 1442 IH 

1 ‘‘(1) agricultural commodities or their products acquired by the Cor2 poration are made available to United States exporters, users, proc3 essors, or foreign purchasers for the purpose of developing, maintain4 ing, or expanding export markets for United States agricultural com5 modities or their products at prevailing world market prices; 

6 ‘‘(2) payments are made available to United States exporters, users, 

7 or processors or, except as provided in section 55314 of this title, cash 

8 grants are made available to foreign purchasers, for the purpose de9 scribed in paragraph (1); 

10 ‘‘(3) commercial credit guarantees are blended with direct credits 

11 from the Corporation to reduce the effective rate of interest on export 

12 sales of United States agricultural commodities or their products; 

13 ‘‘(4) credit or credit guarantees for not more than 3 years are ex14 tended by the Corporation to finance or guarantee export sales of 

15 United States agricultural commodities or their products; or 

16 ‘‘(5) agricultural commodities or their products owned or controlled 

17 by or under loan from the Corporation are exchanged or bartered for 

18 materials, goods, equipment, or services at least equal in value to the 

19 agricultural commodities or their products for which they are ex20 changed or bartered (determined on the basis of prevailing world mar21 ket prices at the time of the exchange or barter), but this paragraph 

22 does not exempt from the cargo preference provisions referred to in 

23 section 55314(b) of this title any requirement otherwise applicable to 

24 the materials, goods, equipment, or services imported under the trans25 action. 

26 ‘‘§ 55314. Transportation requirements for certain exports 

27 sponsored by the Secretary of Agriculture 

28 ‘‘(a) MINIMUM TONNAGE.— 

29 ‘‘(1) IN GENERAL.—In addition to the requirement under section 

30 55305 of this title for the transportation of a percentage of gross ton31 nage on United States documented commercial vessels, 25 percent of 

32 the gross tonnage of agricultural commodities or their products speci33 fied in subsection (b) shall be transported each calendar year on United 

34 States documented commercial vessels that— 

35 ‘‘(A) are necessary for national security; and 

36 ‘‘(B) if more than 25 years old, were rebuilt within the last 5 

37 years and certified by the Secretary of Transportation as having 

38 a useful life of at least 5 years after that rebuilding. 

39 ‘‘(2) CALENDAR YEAR.—To provide for effective and equitable ad40 ministration of the cargo preference laws, the calendar year for the 
191 

•HR 1442 IH 

1 purpose of compliance with minimum percentage requirements is the 

2 12-month period beginning October 1 of each year. 

3 ‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to export ac4 tivity (except inspection or weighing activities, other activities carried out 

5 for health or safety, or technical assistance provided in the handling of com6 mercial transactions) of the Secretary of Agriculture or the Commodity 

7 Credit Corporation— 

8 ‘‘(1) carried out under the Agricultural Trade Development and As9 sistance Act of 1954 (7 U.S.C. 1691 et seq.); 

10 ‘‘(2) carried out under section 416 of the Agricultural Act of 1949 

11 (7 U.S.C. 1431); 

12 ‘‘(3) carried out under the Bill Emerson Humanitarian Trust Act (7 

13 U.S.C. 1736f–1); 

14 ‘‘(4) under which agricultural commodities or their products are— 

15 ‘‘(A) donated through foreign governments or private or public 

16 agencies, including intergovernmental organizations; or 

17 ‘‘(B) sold for foreign currencies or for dollars on credit terms 

18 of more than 10 years; 

19 ‘‘(5) under which agricultural commodities or their products are 

20 made available for emergency food relief at less than prevailing world 

21 market prices; 

22 ‘‘(6) under which a cash grant is made directly or through an inter23 mediary to a foreign purchaser to enable the purchaser to obtain 

24 United States agricultural commodities or their products in an amount 

25 greater than the difference between the prevailing world market price 

26 and the United States market price, free along side vessel at a United 

27 States port; or 

28 ‘‘(7) under which agricultural commodities owned or controlled by or 

29 under loan from the Corporation are exchanged or bartered for mate30 rials, goods, equipment, or services produced in foreign countries, ex31 cept export activities described in section 55313(5) of this title. 

32 ‘‘(c) ADDITIONAL REQUIREMENTS.— 

33 ‘‘(1) APPLICATION OF SECTION 55305.—The requirement for trans34 portation on United States documented vessels under subsection (a) is 

35 subject to the same terms and conditions as provided in section 55305 

36 of this title. 

37 ‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph (3), in 

38 carrying out this section and section 55305 of this title, the Corpora39 tion shall take steps necessary and practicable, and consistent with this 

40 section and section 55305, without detriment to any port range to allo41 cate, on the principle of lowest landed cost without regard to the coun-
192 

•HR 1442 IH 

1 try of registry of the vessel, 25 percent of the bagged, processed, or 

2 fortified commodities provided under title II of the Agricultural Trade 

3 Development and Assistance Act of 1954 (7 U.S.C. 1721 et seq.). 

4 ‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first there 

5 shall be calculated the allocation of 100 percent of the quantity to be 

6 procured on an overall lowest landed cost basis without regard to the 

7 country of registry of the vessel, and then there shall be allocated to 

8 the Great Lakes port range any cargoes for which it has the lowest 

9 landed cost under that calculation. The requirements for transportation 

10 on United States documented vessels under this section and section 

11 55305 of this title do not apply to commodities allocated to the Great 

12 Lakes port range under paragraph (2). To the extent that the Great 

13 Lakes port range is used to furnish and transport less than 25 percent 

14 of the total annual tonnage of commodities to which paragraph (2) ap15 plies, the commodities allocated to the Great Lakes port range under 

16 paragraph (2) may not be reallocated or diverted to another port range 

17 to meet the requirements for transportation on United States docu18 mented vessels under this section and section 55305 of this title. 

19 ‘‘(4) AWARDING CONTRACTS.—In awarding a contract for the trans20 portation by vessel of commodities from the Great Lakes port range 

21 pursuant to an export activity referred to in subsection (b), an agen22 cy— 

23 ‘‘(A) shall consider expressions of freight interest for any vessel 

24 from a vessel operator who meets reasonable requirements for fi25 nancial and operational integrity; and 

26 ‘‘(B) may not deny award of the contract to a person based on 

27 the type of vessel on which the transportation would be provided 

28 (including on the basis that the transportation would not be pro29 vided on a liner vessel, as that term is used in the Shipping Act 

30 of 1984, as in effect on November 14, 1995), if the person other31 wise satisfies reasonable requirements for financial and operational 

32 integrity. 

33 ‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of nonavail34 ability of United States documented vessels resulting from the applica35 tion of this subsection may not reduce the gross tonnage of commod36 ities required by this section and section 55305 of this title to be trans37 ported on United States documented vessels. 

38 ‘‘§ 55315. Minimum tonnage 

39 ‘‘(a) DEFINITION.—In this section, the term ‘base period’ means the 5- 

40 year period running from the sixth through the second prior fiscal years. 
193 

•HR 1442 IH 

1 ‘‘(b) REQUIREMENT.—For each fiscal year, the minimum quantity of ag2 ricultural commodities to be exported under programs subject to section 

3 55314 of this title is the average of the tonnage exported under those pro4 grams during the base period, discarding the high and low years. 

5 ‘‘(c) WAIVERS.—The President may waive the minimum quantity for a 

6 fiscal year under this section if the President determines and reports to 

7 Congress, together with reasons, that the quantity cannot be used effectively 

8 for the purposes of those programs or, based on a certification by the Sec9 retary of Agriculture, that the commodities are not available for reasons 

10 that include the unavailability of funds. 

11 ‘‘§ 55316. Financing the transportation of agricultural com12 modities 

13 ‘‘(a) FINANCING OF INCREASED CHARGES.—The Secretary of Transpor14 tation shall finance any increased ocean freight charges incurred in any fis15 cal year that result from the application of section 55314 of this title. 

16 ‘‘(b) REIMBURSEMENT OF INCREASED CHARGES.— 

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

18 the Secretary of Agriculture and the Commodity Credit Corporation for 

19 the amount by which, in any fiscal year— 

20 ‘‘(A) the total cost of ocean freight and ocean freight differen21 tial for which obligations are incurred by the Secretary of Agri22 culture and the Corporation on exports of agricultural commodities 

23 and their products under the agricultural export programs speci24 fied in section 55314(b) of this title; exceeds 

25 ‘‘(B) 20 percent of the value of the commodities and their prod26 ucts and the cost of the ocean freight and ocean freight differen27 tial on which obligations are incurred by the Secretary of Agri28 culture and the Corporation during that fiscal year. 

29 ‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes of 

30 this subsection, commodities shipped from the inventory of the Cor31 poration shall be valued as provided in section 412(d) of the Agricul32 tural Trade Development and Assistance Act of 1954 (7 U.S.C. 

33 1736f(d)). 

34 ‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.— 

35 ‘‘(1) ISSUANCE.—To meet the expenses required to be assumed 

36 under subsections (a) and (b), the Secretary of Transportation shall 

37 issue obligations to the Secretary of the Treasury. The Secretary of 

38 Transportation, with the approval of the Secretary of the Treasury, 

39 shall prescribe the form, denomination, maturity, and other terms (ex40 cept the interest rate) of the obligations. The Secretary of the Treasury 

41 shall set the interest rate for the obligations, considering the average 
194 

•HR 1442 IH 

1 market yield on outstanding marketable obligations of the United 

2 States Government of comparable maturities during the month before 

3 the obligations are issued. 

4 ‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the 

5 obligations issued under this subsection. To purchase the obligations, 

6 the Secretary of the Treasury may use as a public debt transaction the 

7 proceeds from the sale of securities issued under chapter 31 of title 31. 

8 The purposes for which securities may be issued under that chapter are 

9 extended to include the purchase of obligations under this subsection. 

10 A redemption or purchase of the obligations by the Secretary of the 

11 Treasury is a public debt transaction of the Government. 

12 ‘‘(d) SOURCE OF FUNDS FOR REIMBURSEMENT.—Reimbursement of the 

13 Secretary of Transportation for costs incurred under this section shall be 

14 made with appropriated funds rather than through cancellation of notes. 

15 ‘‘(e) APPROPRIATIONS.— 

16 ‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized to be 

17 appropriated an amount sufficient to reimburse the Secretary of Trans18 portation for the costs incurred under this section, including adminis19 trative expenses and the principal and interest due on obligations 

20 issued to the Secretary of the Treasury. 

21 ‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each fiscal 

22 year, such amounts as may be necessary are hereby appropriated to 

23 pay interest and to liquidate debt on obligations issued to the Secretary 

24 of the Treasury under this section. 

25 ‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Secretary 

26 of Transportation is unable to obtain the funds necessary to finance the in27 creased ocean freight charges resulting from the requirements of subsections 

28 (a) and (b) and section 55314(a) of this title, the Secretary shall notify 

29 Congress within 10 working days of the discovery of the insufficiency. 

30 ‘‘§ 55317. Termination of subchapter 

31 ‘‘This subchapter terminates 90 days after the date on which a notifica32 tion is made under section 55316(f) of this title, except for shipments of 

33 agricultural commodities and their products subject to contracts made be34 fore the end of that 90-day period, unless within that 90-day period the Sec35 retary of Transportation proclaims that funds are available to finance in36 creased freight charges resulting from the requirements of sections 

37 55314(a) and 55316(a) and (b) of this title. On the termination of this sub38 chapter under this section— 

39 ‘‘(1) this subchapter does not exempt export activities from, or sub40 ject export activities to, the cargo preference laws; and 
195 

•HR 1442 IH 

1 ‘‘(2) the 50-percent requirement in section 55305 of this title re2 mains in effect. 

3 ‘‘§ 55318. Effect on other law 

4 ‘‘This subchapter does not affect chapter 5 of title 5. 

5 ‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 

6 ‘‘§ 55331. Definitions 

7 ‘‘In this subchapter: 

8 ‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American Great 

9 Lakes vessel’ means a vessel so designated under section 55332 of this 

10 title, but only during the period the designation is in effect. 

11 ‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake Superior, 

12 Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, the Saint Law13 rence River west of Saint Regis, New York, and their connecting and 

14 tributary waters. 

15 ‘‘(3) GREAT LAKES SHIPPING SEASON.—The term ‘Great Lakes 

16 shipping season’ means the period each year during which the Saint 

17 Lawrence Seaway is open for navigation by vessels, as declared by the 

18 Saint Lawrence Seaway Development Corporation. 

19 ‘‘§ 55332. Designating American Great Lakes vessels 

20 ‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall designate a 

21 vessel as an American Great Lakes vessel if— 

22 ‘‘(1) an application for designation is submitted to the Secretary 

23 under regulations prescribed by the Secretary; 

24 ‘‘(2) the vessel is documented under the laws of the United States; 

25 ‘‘(3) the vessel, on the effective date of the designation, is— 

26 ‘‘(A) at least 1, but not more than 6, years old; or 

27 ‘‘(B) at least 1, but not more than 11, years old if the Secretary 

28 finds that suitable vessels are not available to provide the type of 

29 service for which the vessel will be used after the designation; 

30 ‘‘(4) the vessel has not previously been designated as an American 

31 Great Lakes vessel; and 

32 ‘‘(5) the owner makes an agreement as provided under subsection 

33 (b). 

34 ‘‘(b) AGREEMENTS.—A vessel may be designated as an American Great 

35 Lakes vessel only if the person that will be the owner of the vessel at the 

36 time of the designation makes an agreement with the Secretary providing 

37 that if the Secretary determines that the vessel is necessary to the defense 

38 of the United States, the United States Government will have an exclusive 

39 right, during the 120-day period following the date of a revocation of the 

40 designation under section 55335 of this title, to purchase the vessel for a 

41 price equal to the greater of— 
196 

•HR 1442 IH 

1 ‘‘(1) the approximate world market value of the vessel; or 

2 ‘‘(2) the cost of the vessel to the owner less a reasonable amount 

3 for depreciation. 

4 ‘‘(c) CERTAIN FOREIGN DOCUMENTATION AND SALE NOT PROHIB5 ITED.—Notwithstanding any other law, if the Government does not exercise 

6 its right of purchase under an agreement under subsection (b), the owner 

7 of the vessel is not prohibited from— 

8 ‘‘(1) documenting the vessel under the laws of a foreign country; or 

9 ‘‘(2) selling the vessel to a person not a citizen of the United States. 

10 ‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations estab11 lishing requirements for submitting applications under this section. 

12 ‘‘§ 55333. Exemption from restriction on transporting cer13 tain cargo 

14 ‘‘The 3-year documentation requirement of section 55305(a) of this title 

15 does not apply to a vessel designated as an American Great Lakes vessel 

16 during the period of its designation. 

17 ‘‘§ 55334. Restrictions on operations 

18 ‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an American 

19 Great Lakes vessel may not be used to— 

20 ‘‘(1) engage in trade— 

21 ‘‘(A) from a port in the United States that is not located on 

22 the Great Lakes; or 

23 ‘‘(B) between ports in the United States; 

24 ‘‘(2) transport bulk cargo (as defined in section 40102 of this title) 

25 that is subject to section 55305 or 55314 of this title or section 2631 

26 of title 10; or 

27 ‘‘(3) provide a service (except ocean freight service) as— 

28 ‘‘(A) a contract carrier; or 

29 ‘‘(B) a common carrier on a fixed advertised schedule offering 

30 frequent sailings at regular intervals in the foreign trade of the 

31 United States. 

32 ‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel may be 

33 used for not more than 90 days during any 12-month period to engage in 

34 trade prohibited by subsection (a)(1)(A), except during the Great Lakes 

35 shipping season. 

36 ‘‘§ 55335. Revocations and terminations of designations 

37 ‘‘(a) REVOCATIONS.—After notice and an opportunity for a hearing, the 

38 Secretary of Transportation may revoke a designation of a vessel as an 

39 American Great Lakes vessel if the Secretary finds that— 

40 ‘‘(1) the vessel does not meet a requirement for the designation; 

41 ‘‘(2) the vessel has been operated in violation of this subchapter; or 
197 

•HR 1442 IH 

1 ‘‘(3) the owner or operator of the vessel has violated an agreement 

2 made under section 55332(b) of this title. 

3 ‘‘(b) TERMINATIONS.—On petition and a showing of good cause by the 

4 owner of a vessel, the Secretary may terminate the designation of a vessel 

5 as an American Great Lakes vessel. The Secretary may impose conditions 

6 in a termination order to prevent significant adverse effects on other opera7 tors of United States documented vessels. 

8 ‘‘§ 55336. Civil penalty 

9 ‘‘After notice and an opportunity for a hearing, the Secretary of Trans10 portation may impose a civil penalty of not more than $1,000,000 on the 

11 owner of an American Great Lakes vessel for any act for which the designa12 tion may be revoked under section 55335 of this title. 

13 ‘‘CHAPTER 555—MISCELLANEOUS 

‘‘Sec. 

‘‘55501. Mobile trade fairs. 

14 ‘‘§ 55501. Mobile trade fairs 

15 ‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage and pro16 mote the development and use of mobile trade fairs designed to show and 

17 sell the products of United States business and agriculture at foreign ports 

18 and at other commercial centers throughout the world where the operators 

19 of the fairs use, insofar as practicable, vessels and aircraft of the United 

20 States in transporting their exhibits. 

21 ‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Secretary de22 termines that a mobile trade fair provides an economical and effective 

23 means of promoting export sales, the Secretary may provide to the operator 

24 of the fair— 

25 ‘‘(1) technical assistance and support; and 

26 ‘‘(2) financial assistance to defray certain expenses incurred outside 

27 the United States, except the cost of transportation on foreign vessels 

28 and aircraft. 

29 ‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section, the 

30 President may use, in addition to amounts appropriated to carry out trade 

31 promotion activities, foreign currencies owned by or owed to the United 

32 States Government. 

33 ‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES

34 ‘‘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. 

35 ‘‘§ 56101. Approval required to transfer vessel to noncitizen 

36 ‘‘(a) RESTRICTIONS.— 
198 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—Except as otherwise provided in this section, 

2 section 12119 of this title, or section 611 of the Merchant Marine Act, 

3 1936, a person may not, without the approval of the Secretary of 

4 Transportation— 

5 ‘‘(A) sell, lease, charter, deliver, or in any other manner trans6 fer, or agree to sell, lease, charter, deliver, or in any other manner 

7 transfer, to a person not a citizen of the United States, an interest 

8 in or control of— 

9 ‘‘(i) a documented vessel owned by a citizen of the United 

10 States; or 

11 ‘‘(ii) a vessel last documented under the laws of the United 

12 States; or 

13 ‘‘(B) place under foreign registry, or operate under the author14 ity of a foreign country, a documented vessel or a vessel last docu15 mented under the laws of the United States. 

16 ‘‘(2) EXCEPTIONS.—Paragraph (1)(A) does not apply to a vessel 

17 that has been operated only for pleasure or only as a fishing vessel, 

18 fish processing vessel, or fish tender vessel (as defined in section 2101 

19 of this title). 

20 ‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing with 

21 respect to a vessel to be documented under chapter 121 of this title, the 

22 Secretary may grant approval under subsection (a) before the vessel is docu23 mented. 

24 ‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this subtitle, 

25 the Merchant Marine Act, 1936, or any contract with the Secretary made 

26 under this subtitle or that Act, a person may place a vessel under foreign 

27 registry without the approval of the Secretary if— 

28 ‘‘(1)(A) the Secretary, in conjunction with the Secretary of Defense, 

29 determines that at least one replacement vessel of equal or greater mili30 tary capability and of a capacity that is equivalent or greater, as meas31 ured by deadweight tons, gross tons, or container equivalent units, as 

32 appropriate, is documented under chapter 121 of this title by the owner 

33 of the vessel placed under foreign registry; and 

34 ‘‘(B) the replacement vessel is not more than 10 years old on the 

35 date of that documentation; or 

36 ‘‘(2) an operating agreement covering the vessel under chapter 531 

37 of this title has expired. 

38 ‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or trans39 fer of a vessel, or of an interest in or control of a vessel, in violation of 

40 this section is void. 

41 ‘‘(e) PENALTIES.— 
199 

•HR 1442 IH 

1 ‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells, charters, 

2 or transfers a vessel, or an interest in or control of a vessel, in violation 

3 of this section shall be fined under title 18, imprisoned for not more 

4 than 5 years, or both. 

5 ‘‘(2) CIVIL PENALTY.—A person that sells, charters, or transfers a 

6 vessel, or an interest in or control of a vessel, in violation of this sec7 tion is liable to the United States Government for a civil penalty of 

8 not more than $10,000 for each violation. 

9 ‘‘(3) FORFEITURE.—A documented vessel may be seized by and for10 feited to the Government if, in violation of this section, a person— 

11 ‘‘(A) knowingly sells, charters, or transfers the vessel or an in12 terest in or control of the vessel; or 

13 ‘‘(B) places the vessel under foreign registry or operates the 

14 vessel under the authority of a foreign country. 

15 ‘‘§ 56102. Additional controls during war or national emer16 gency 

17 ‘‘(a) IN GENERAL.—During war, or a national emergency declared by 

18 Presidential proclamation, a person may not, without the approval of the 

19 Secretary of Transportation— 

20 ‘‘(1) place under foreign registry a vessel owned in whole or in part 

21 by a citizen of the United States or a corporation incorporated under 

22 the laws of the United States or of a State; 

23 ‘‘(2) sell, mortgage, lease, charter, deliver, or in any other manner 

24 transfer, or agree to sell, mortgage, lease, charter, deliver, or in any 

25 other manner transfer, to a person not a citizen of the United States— 

26 ‘‘(A) a vessel owned as described in paragraph (1), or an inter27 est therein; 

28 ‘‘(B) a vessel documented under the laws of the United States, 

29 or an interest therein; or 

30 ‘‘(C) a facility for building or repairing vessels, or an interest 

31 therein; 

32 ‘‘(3) issue, assign, or transfer to a person not a citizen of the United 

33 States an instrument of indebtedness secured by a mortgage of a vessel 

34 to a trustee, by an assignment of an owner’s interest in a vessel under 

35 construction to a trustee, or by a mortgage of a facility for building 

36 or repairing vessels to a trustee, unless the trustee or a substitute 

37 trustee is approved by the Secretary under subsection (b); 

38 ‘‘(4) enter into an agreement or understanding to construct a vessel 

39 in the United States for, or to be delivered to, a person not a citizen 

40 of the United States without expressly stipulating that construction will 

41 not begin until after the war or national emergency has ended; 
200 

•HR 1442 IH 

1 ‘‘(5) enter into an agreement or understanding whereby there is vest2 ed in, or for the benefit of, a person not a citizen of the United States 

3 the controlling interest in a corporation that is incorporated under the 

4 laws of the United States or a State and that owns a vessel or facility 

5 for building or repairing vessels; or 

6 ‘‘(6) cause or procure a vessel, constructed in whole or in part in 

7 the United States and never cleared for a foreign port, to depart from 

8 a port of the United States before it has been documented under the 

9 laws of the United States. 

10 ‘‘(b) TRUSTEES.— 

11 ‘‘(1) APPROVAL.—The Secretary shall approve a trustee or sub12 stitute trustee under subsection (a)(3) if and only if the trustee is a 

13 bank or trust company that— 

14 ‘‘(A) is organized as a corporation, and is doing business, under 

15 the laws of the United States or a State; 

16 ‘‘(B) is authorized under those laws to exercise corporate trust 

17 powers; 

18 ‘‘(C) is a citizen of the United States; 

19 ‘‘(D) is subject to supervision or examination by Federal or 

20 State authority; and 

21 ‘‘(E) has a combined capital and surplus (as set forth in its 

22 most recent published report of condition) of at least $3,000,000. 

23 ‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases to meet 

24 the conditions in paragraph (1), the Secretary shall disapprove the 

25 trustee or substitute trustee. After the disapproval, the restrictions on 

26 transfer or assignment without the Secretary’s approval in subsection 

27 (a)(3) apply. 

28 ‘‘(3) OPERATION OF VESSEL.—During a period when subsection (a) 

29 applies, a trustee referred to in subsection (a)(3), even though ap30 proved as a trustee by the Secretary, may not operate the vessel under 

31 the mortgage or assignment without the Secretary’s approval. 

32 ‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in violation 

33 of this section is void. 

34 ‘‘(d) RECOVERY OF CONSIDERATION.— 

35 ‘‘(1) IN GENERAL.—A person that deposited or paid consideration in 

36 connection with a transaction prohibited by this section may recover 

37 the consideration after tender of the vessel, facility, stock, or other se38 curity, or interest therein, to the person entitled to it, or the forfeiture 

39 thereof to the United States Government. 

40 ‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person in 

41 whose interest the consideration was deposited, or to whom it was paid, 
201 

•HR 1442 IH 

1 entered into the transaction in the belief that the person depositing or 

2 paying the consideration was a citizen of the United States. 

3 ‘‘(e) PENALTIES.— 

4 ‘‘(1) CRIMINAL PENALTY.—A person that violates, or attempts or 

5 conspires to violate, this section shall be fined under title 18, impris6 oned for not more than 5 years, or both. 

7 ‘‘(2) FORFEITURE.—The following shall be forfeited to the Govern8 ment: 

9 ‘‘(A) A vessel, a facility for building or repairing vessels, or an 

10 interest in a vessel or such a facility, that is sold, mortgaged, 

11 leased, chartered, delivered, transferred, or documented, or agreed 

12 to be sold, mortgaged, leased, chartered, delivered, transferred, or 

13 documented, in violation of this section. 

14 ‘‘(B) Stock and other securities sold or transferred, or agreed 

15 to be sold or transferred, in violation of this section. 

16 ‘‘(C) A vessel departing in violation of subsection (a)(6). 

17 ‘‘§ 56103. Conditional approvals 

18 ‘‘(a) IN GENERAL.—In approving an act or transaction under section 

19 56101 or 56102 of this title, the Secretary of Transportation may do so 

20 absolutely or upon conditions the Secretary considers advisable. The Sec21 retary shall state the conditions in the notice of approval. 

22 ‘‘(b) VIOLATIONS.—A violation of a condition of approval is subject to the 

23 same penalties as a violation resulting from an act done without the re24 quired approval. The violation occurs at the time the condition is violated. 

25 ‘‘§ 56104. Penalty for false statements 

26 ‘‘A person that knowingly makes a false statement of a material fact to 

27 the Secretary of Transportation or another officer, employee, or agent of the 

28 Department of Transportation, to obtain the Secretary’s approval under sec29 tion 56101 or 56102 of this title, shall be fined under title 18, imprisoned 

30 for not more than 5 years, or both. 

31 ‘‘§ 56105. Forfeiture procedure 

32 ‘‘(a) IN GENERAL.—A forfeiture under this chapter may be enforced in 

33 the same way as a forfeiture under the laws on the collection of duties. 

34 However, such a forfeiture may be remitted without seizure of the vessel. 

35 ‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter to enforce 

36 a forfeiture, a prior criminal conviction of a person for a violation of this 

37 chapter with respect to the subject matter of the forfeiture is prima facie 

38 evidence of the violation against the person convicted. 

39 ‘‘CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS 

‘‘Sec. 

‘‘56301. General authority. 

‘‘56302. Charter terms. 
202 

•HR 1442 IH 

‘‘56303. Compensation. 

‘‘56304. Disputed compensation. 

‘‘56305. Vessel encumbrances. 

‘‘56306. Use and transfer of vessels. 

‘‘56307. Return of vessels. 

1 ‘‘§ 56301. General authority 

2 ‘‘During a national emergency declared by Presidential proclamation, or 

3 a period for which the President has proclaimed that the security of the na4 tional defense makes it advisable, the Secretary of Transportation may req5 uisition or purchase, or requisition or charter the use of, a vessel owned by 

6 citizens of the United States, a documented vessel, or a vessel under con7 struction in the United States. 

8 ‘‘§ 56302. Charter terms 

9 ‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not ownership 

10 under this chapter, the Secretary of Transportation, at the time of requisi11 tion or as soon thereafter as the situation allows, shall offer the person enti12 tled to possession of the vessel a charter containing— 

13 ‘‘(1) the terms the Secretary believes should govern the relationship 

14 between the United States Government and the person; and 

15 ‘‘(2) the rate of hire the Secretary considers just compensation for 

16 the use of the vessel and the services required under the charter. 

17 ‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the charter 

18 and rate of hire, the parties shall proceed as provided in section 56304 of 

19 this title. 

20 ‘‘§ 56303. Compensation 

21 ‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of Transpor22 tation shall determine and pay just compensation for a vessel requisitioned 

23 under this chapter. 

24 ‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel may not 

25 be considered enhanced by the circumstances requiring its requisition. Con26 sequential damages arising from the requisition may not be paid. 

27 ‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.— 

28 ‘‘(1) IF PAID.—If a construction-differential subsidy has been paid 

29 for the vessel, the value of the vessel at the time of requisition shall 

30 be determined under section 802 of the Merchant Marine Act, 1936. 

31 ‘‘(2) IF NOT PAID.—If a construction-differential subsidy has not 

32 been paid for the vessel, the value of any national defense features pre33 viously paid for by the United States Government shall be excluded. 

34 ‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost or dam35 aged by a risk assumed by the Government under the charter, but a valu36 ation for the vessel or a means of compensation has not been agreed to, 

37 the Secretary shall pay just compensation for the loss or damage, to the 

38 extent the person is not reimbursed through insurance. 
203 

•HR 1442 IH 

1 ‘‘§ 56304. Disputed compensation 

2 ‘‘If the person entitled to compensation disputes the amount of just com3 pensation determined by the Secretary of Transportation under this chapter, 

4 the Secretary shall pay the person, as a tentative advance, 75 percent of 

5 the amount determined. The person may bring a civil action against the 

6 United States to recover just compensation. If the tentative advance paid 

7 under this section is greater than the amount of the court’s judgment, the 

8 person shall refund the difference. 

9 ‘‘§ 56305. Vessel encumbrances 

10 ‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel does 

11 not prevent the requisition of the vessel under this chapter. 

12 ‘‘(b) DEPOSIT IN TREASURY.— 

13 ‘‘(1) IN GENERAL.—If an encumbrance exists, the Secretary of 

14 Transportation may deposit part of the compensation or advance of 

15 compensation to be paid under this chapter (but not more than the 

16 total amount of all encumbrances) in a fund in the Treasury. The Sec17 retary shall publish notice of the creation of the fund in the Federal 

18 Register. 

19 ‘‘(2) AVAILABILITY OF AMOUNTS DEPOSITED.—Amounts deposited in 

20 the fund shall be available to pay the compensation or any of the en21 cumbrances (including encumbrances stipulated to in a court of the 

22 United States or a State) existing at the time the vessel was requi23 sitioned. 

24 ‘‘(c) CIVIL ACTION.— 

25 ‘‘(1) IN GENERAL.—Within 6 months after publication of notice 

26 under subsection (b), the holder of an encumbrance may bring a civil 

27 action in admiralty, according to the principles of libels in rem, against 

28 the fund. 

29 ‘‘(2) VENUE.—The action must be brought in the district court of 

30 the United States— 

31 ‘‘(A) from whose custody the vessel was or may be requisitioned; 

32 or 

33 ‘‘(B) in whose district the vessel was located when it was requi34 sitioned. 

35 ‘‘(3) SERVICE OF PROCESS.—Service of process shall be made on the 

36 appropriate United States Attorney, the Attorney General, and the Sec37 retary, in the manner provided by the Federal Rules of Civil Procedure 

38 (28 App. U.S.C.). Notice of the action shall be given to all interested 

39 persons as ordered by the court. 
204 

•HR 1442 IH 

1 ‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall proceed and 

2 be determined according to the principles of law and the rules of prac3 tice applicable in like cases between private parties. 

4 ‘‘§ 56306. Use and transfer of vessels 

5 ‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, recon6 dition, reconstruct, operate, or charter for operation, a vessel acquired under 

7 this chapter. 

8 ‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may transfer the 

9 possession or control of a vessel acquired under this chapter to another de10 partment or agency of the United States Government on terms and condi11 tions approved by the President. The department or agency shall promptly 

12 reimburse the Secretary for expenditures for just compensation, purchase 

13 price, charter hire, repairs, reconditioning, or reconstruction. 

14 ‘‘§ 56307. Return of vessels 

15 ‘‘When a vessel requisitioned for use but not ownership is returned to the 

16 owner, the Secretary of Transportation shall— 

17 ‘‘(1) return the vessel in a condition at least as good as when taken, 

18 less ordinary wear and tear; or 

19 ‘‘(2) pay the owner an amount sufficient to recondition the vessel to 

20 that condition, less ordinary wear and tear. 

21 ‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY 

22 NEUTRALITY ACT 

‘‘Sec. 

‘‘56501. Definition. 

‘‘56502. Adjusting obligations and arranging maintenance. 

‘‘56503. Types of adjustments and arrangements. 

‘‘56504. Changes in adjustments and arrangements. 

23 ‘‘§ 56501. Definition 

24 ‘‘In this chapter, the term ‘essential vessel’ means a vessel that is— 

25 ‘‘(1)(A) security for a mortgage indebtedness to the United States 

26 Government; or 

27 ‘‘(B) constructed under this subtitle or required by a contract under 

28 this subtitle to be operated on a certain essential foreign trade route; 

29 and 

30 ‘‘(2) necessary in the interests of commerce and national defense to 

31 be maintained in condition for prompt use. 

32 ‘‘§ 56502. Adjusting obligations and arranging maintenance 

33 ‘‘(a) GENERAL AUTHORITY.—On written application, the Secretary of 

34 Transportation may adjust obligations and arrange for maintenance of an 

35 essential vessel as provided in this chapter if the Secretary determines, after 

36 any investigation or proceeding the Secretary considers desirable, that— 
205 

•HR 1442 IH 

1 ‘‘(1) the operation of the vessel in the service, route, or line to which 

2 it is assigned under this subtitle, or in which it otherwise would be op3 erated, is not— 

4 ‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 

5 et seq.) or a proclamation issued under that Act; or 

6 ‘‘(B) compatible with maintaining the availability of the vessel 

7 for national defense and commerce; 

8 ‘‘(2) it is not feasible under existing law to employ the vessel in any 

9 other service or operation in foreign or domestic trade (except tem10 porary or emergency operation under section 56503(b)(5) of this title); 

11 and 

12 ‘‘(3) the applicant, because of the restrictions of the Neutrality Act 

13 of 1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for na14 tional defense under paragraph (1), is not earning or will not earn a 

15 reasonable return on the capital necessarily employed in its business. 

16 ‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under sub17 section (a) shall continue in effect only as long as the circumstances de18 scribed in subsection (a) continue to exist. 

19 ‘‘§ 56503. Types of adjustments and arrangements 

20 ‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrangement 

21 under this chapter shall include suspension of— 

22 ‘‘(1) the requirement to operate the vessel in foreign trade under the 

23 applicable operating-differential or construction-differential subsidy 

24 contract or mortgage or other agreement; and 

25 ‘‘(2) the right to operating-differential subsidy for the vessel. 

26 ‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To the ex27 tent the Secretary of Transportation considers appropriate to carry out the 

28 purposes of this subtitle, an adjustment or arrangement under this chapter 

29 may include any of the following: 

30 ‘‘(1) Lay-up of the vessel by the owner or in the custody of the Sec31 retary, with payment or reimbursement by the Secretary of necessary 

32 and proper expenses (including reasonable overhead and insurance) or 

33 a fixed periodic allowance instead of payment or reimbursement. 

34 ‘‘(2) Postponement, for not more than the total period of the lay35 up, of the maturity date of each installment of the principal of obliga36 tions to the United States Government for the vessel (regardless of 

37 whether the maturity date is during a lay-up period), or rearrangement 

38 of those maturities. 

39 ‘‘(3) Postponement or cancellation of interest accruing on the obliga40 tions during a lay-up period. 
206 

•HR 1442 IH 

1 ‘‘(4) Extension, for not more than the total period of the lay-up, of 

2 the 20-year life limitation for the vessel and other limitations and pro3 visions of this subtitle based on a 20-year life. 

4 ‘‘(5) Provision for temporary or emergency employment of the vessel 

5 (instead of lay-up) as may be practicable, with such arrangements for 

6 management of the vessel, payment of expenses, and application of the 

7 proceeds of the employment, as the Secretary may approve, with any 

8 period of operation being included as part of the lay-up period. 

9 ‘‘(6) Payment to the Secretary, on termination of the arrangements 

10 with the applicant, of the applicant’s net profits (earned while the ar11 rangements were in effect) in excess of 10 percent a year on the capital 

12 necessarily employed in the applicant’s business, as reimbursement for 

13 obligations postponed or canceled and expenses incurred or paid by the 

14 Secretary under this section. 

15 ‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the appli16 cant represented by a vessel of the applicant laid-up or operated under this 

17 section shall be included in capital necessarily employed in the applicant’s 

18 business. The Secretary may require a vessel laid-up or operated under this 

19 section to be security for reimbursement. 

20 ‘‘§ 56504. Changes in adjustments and arrangements 

21 ‘‘The Secretary of Transportation may change an adjustment or arrange22 ment made under this chapter as the Secretary considers necessary to carry 

23 out this chapter. 

24 ‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

25 ‘‘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. 

26 ‘‘§ 57101. Placement of vessels in National Defense Reserve 

27 Fleet 

28 ‘‘(a) IN GENERAL.—Any vessel acquired by the Maritime Administration 

29 shall be placed in the National Defense Reserve Fleet maintained under sec30 tion 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1744). 

31 ‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under sub32 section (a) may not be traded out or sold from the Fleet, except as provided 

33 in section 57102, 57103, or 57104 or chapter 533, 537, 573, or 575 of this 

34 title. 
207 

•HR 1442 IH 

1 ‘‘§ 57102. Disposition of vessels not worth preserving 

2 ‘‘(a) IN GENERAL.—If the Secretary of Transportation determines that 

3 a vessel owned by the Maritime Administration is of insufficient value for 

4 commercial or military operation to warrant its further preservation, the 

5 Secretary may scrap the vessel or sell the vessel for cash. 

6 ‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection (a) 

7 shall be made on the basis of competitive sealed bids, after an appraisal and 

8 due advertisement. The purchaser does not have to be a citizen of the 

9 United States. The purchaser shall provide a surety bond, with a surety ap10 proved by the Secretary, to ensure that the vessel will not be operated in 

11 the foreign trade of the United States at any time within 10 years after 

12 the sale, in competition with a vessel owned by a citizen of the United 

13 States and documented under the laws of the United States. 

14 ‘‘§ 57103. Sale of obsolete vessels in National Defense Re15 serve Fleet 

16 ‘‘(a) IN GENERAL.—The Secretary of Transportation may convey the 

17 right, title, and interest of the United States Government in any vessel of 

18 the National Defense Reserve Fleet that has been identified by the Sec19 retary as an obsolete vessel of insufficient value to warrant its further pres20 ervation, if the recipient— 

21 ‘‘(1) is a non-profit organization, a State, or a municipal corporation 

22 or political subdivision of a State; 

23 ‘‘(2) agrees not to use, or allow others to use, the vessel for commer24 cial transportation purposes; 

25 ‘‘(3) agrees to make the vessel available to the Government whenever 

26 the Secretary indicates that it is needed by the Government; 

27 ‘‘(4) agrees to hold the Government harmless for any claims arising 

28 from exposure to asbestos, polychlorinated biphenyls, lead paint, or 

29 other hazardous substances after conveyance of the vessel, except for 

30 claims arising from use of the vessel by the Government; 

31 ‘‘(5) has a conveyance plan and a business plan that describes the 

32 intended use of the vessel, each of which has been submitted to and 

33 approved by the Secretary; 

34 ‘‘(6) has provided proof, as determined by the Secretary, of resources 

35 sufficient to accomplish the transfer, necessary repairs and modifica36 tions, and initiation of the intended use of the vessel; and 

37 ‘‘(7) agrees that when the recipient no longer requires the vessel for 

38 use as described in the business plan required under paragraph (5)— 

39 ‘‘(A) the recipient will, at the discretion of the Secretary, re40 convey the vessel to the Government in good condition except for 

41 ordinary wear and tear; or 
208 

•HR 1442 IH 

1 ‘‘(B) if the Board of Trustees of the recipient has decided to 

2 dissolve the recipient according to the laws of the State in which 

3 the recipient is incorporated, then— 

4 ‘‘(i) the recipient shall distribute the vessel, as an asset of 

5 the recipient, to a person that has been determined exempt 

6 from taxation under section 501(c)(3) of the Internal Rev7 enue Code of 1986 (26 U.S.C. 501(c)(3)), or to the Federal 

8 Government or a State or local government for a public pur9 pose; and 

10 ‘‘(ii) the vessel shall be disposed of by a court of competent 

11 jurisdiction of the county in which the principal office of the 

12 recipient is located, for such purposes as the court shall de13 termine, or to such organizations as the court shall determine 

14 are organized exclusively for public purposes. 

15 ‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, additional 

16 equipment from other obsolete vessels of the Fleet may be conveyed to assist 

17 the recipient with maintenance, repairs, or modifications. 

18 ‘‘(c) ADDITIONAL TERMS.—The Secretary may require any additional 

19 terms the Secretary considers appropriate. 

20 ‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this section, 

21 the vessel shall be delivered to the recipient at a time and place to be deter22 mined by the Secretary. The vessel shall be conveyed in an ‘as is’ condition. 

23 ‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel to the 

24 recipient, the Secretary determines that a different disposition of the vessel 

25 would better serve the interests of the Government, the Secretary shall pur26 sue the more favorable disposition of the obsolete vessel and shall not be 

27 liable for any damages that may result from an intended recipient’s reliance 

28 upon a proposed transfer. 

29 ‘‘(f) REVERSION.—The Secretary shall include in any conveyance under 

30 this section terms under which all right, title, and interest conveyed by the 

31 Secretary shall revert to the Government if the Secretary determines the 

32 vessel has been used other than as described in the business plan required 

33 under subsection (a)(5). 

34 ‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels 

35 ‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire suit36 able documented vessels with amounts in the Vessel Operations Revolving 

37 Fund derived from the sale of obsolete vessels in the National Defense Re38 serve Fleet. 

39 ‘‘(b) VALUATION.—The acquired and obsolete vessels shall be valued at 

40 their scrap value in domestic or foreign markets as of the date of the acqui41 sition for or sale from the Fleet. However, the value assigned to those ves-
209 

•HR 1442 IH 

1 sels shall be determined on the same basis, with consideration given to the 

2 fair value of the cost of moving the vessel sold from the Fleet to the place 

3 of scrapping. 

4 ‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the lay-up of the 

5 vessel acquired under this section may be paid from amounts in the Fund. 

6 ‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet under 

7 this section may be scrapped in an approved foreign market without obtain8 ing additional separate approval from the Secretary to transfer the vessel 

9 to a person not a citizen of the United States. 

10 ‘‘§ 57105. Acquisition of vessels for essential services, routes, 

11 or lines 

12 ‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire a ves13 sel, by purchase or otherwise, if— 

14 ‘‘(1) the Secretary considers the vessel necessary to establish, main15 tain, improve, or serve as a replacement on an essential service, route, 

16 or line in the foreign commerce of the United States, as determined 

17 under section 50103 of this title; 

18 ‘‘(2) the vessel was constructed in the United States; and 

19 ‘‘(3) the Secretary of the Navy has certified to the Secretary of 

20 Transportation that the vessel is suitable for economical and speedy 

21 conversion into a naval or military auxiliary or otherwise suitable for 

22 use by the United States Government in time of war or national emer23 gency. 

24 ‘‘(b) PRICE.—The price paid for the vessel shall be based on a fair and 

25 reasonable valuation. However, the price may not exceed by more than 5 

26 percent the cost of the vessel to the owner (excluding any construction-dif27 ferential subsidy and the cost of national defense features paid by the Sec28 retary of Transportation) plus the actual cost previously expended for recon29 ditioning, less depreciation based on a 25-year life for a dry-cargo or pas30 senger vessel and a 20-year life for a tanker or other liquid bulk carrier 

31 vessel. 

32 ‘‘(c) DOCUMENTATION.—A vessel acquired under this section that is not 

33 documented under the laws of the United States at the time of acquisition 

34 shall be so documented as soon as practicable. 

35 ‘‘§ 57106. Maintenance, improvement, and operation of ves36 sels 

37 ‘‘(a) IN GENERAL.—The Secretary of Transportation may maintain, re38 pair, recondition, remodel, and improve vessels owned by the United States 

39 Government and in the possession or under the control of the Secretary, to 

40 equip them adequately for competition in the foreign trade of the United 

41 States. The Secretary may operate such a vessel or charter the vessel on 
210 

•HR 1442 IH 

1 terms and conditions the Secretary considers appropriate to carry out the 

2 purposes of this subtitle. 

3 ‘‘(b) DOCUMENTATION AND RESTRICTIONS ON OPERATION.—A vessel re4 conditioned, remodeled, or improved under subsection (a) shall be docu5 mented under the laws of the United States and remain so documented for 

6 at least 5 years after completion of the reconditioning, remodeling, or im7 provement. During that period, it shall be operated on voyages that are not 

8 exclusively coastwise. 

9 ‘‘§ 57107. Vessels for other agencies 

10 ‘‘(a) IN GENERAL.—The Secretary of Transportation may construct, re11 construct, repair, equip, and outfit, by contract or otherwise, vessels or 

12 parts thereof, for any other department or agency of the United States Gov13 ernment to the extent the other department or agency is authorized by law 

14 to do so for its own account. 

15 ‘‘(b) EFFECT ON CONTRACT AUTHORIZATION.—An obligation incurred or 

16 expenditure made by the Secretary under this section does not affect any 

17 contract authorization of the Secretary, but instead shall be charged against 

18 the existing appropriation or contract authorization of the department or 

19 agency. 

20 ‘‘§ 57108. Consideration of ballast and equipment in deter21 mining selling price 

22 ‘‘The Maritime Administration may not sell a vessel until its ballast and 

23 equipment have been inventoried and their value considered in determining 

24 the selling price of the vessel. 

25 ‘‘§ 57109. Operation of vessels purchased, chartered, or 

26 leased from Secretary of Transportation 

27 ‘‘Unless otherwise authorized by the Secretary of Transportation, a vessel 

28 purchased, chartered, or leased from the Secretary may be operated only 

29 under a certificate of documentation with a registry or coastwise endorse30 ment. Such a vessel, while employed solely as a merchant vessel, is subject 

31 to the laws, regulations, and liabilities governing merchant vessels, whether 

32 the United States Government has an interest in the vessel as an owner or 

33 holds a mortgage, lien, or other interest. 

34 ‘‘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. 
211 

•HR 1442 IH 

1 ‘‘§ 57301. Definitions 

2 ‘‘In this chapter: 

3 ‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel— 

4 ‘‘(A) constructed under this subtitle and acquired within 2 years 

5 after the date of completion; or 

6 ‘‘(B) constructed in a domestic shipyard on private account and 

7 not under this subtitle, and documented under the laws of the 

8 United States. 

9 ‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means a vessel 

10 that— 

11 ‘‘(A) is of at least 1,350 gross tons; 

12 ‘‘(B) the Secretary of Transportation believes should, because of 

13 its age, obsolescence, or other reasons, be replaced in the public 

14 interest; and 

15 ‘‘(C) has been owned by a citizen of the United States for at 

16 least 3 years immediately before its acquisition under this chapter. 

17 ‘‘§ 57302. Authority to acquire vessels 

18 ‘‘To promote the construction of new, safe, and efficient vessels to carry 

19 the domestic and foreign waterborne commerce of the United States, the 

20 Secretary of Transportation may acquire an obsolete vessel in exchange for 

21 an allowance of credit toward the cost of construction or purchase of a new 

22 vessel as provided in this chapter. 

23 ‘‘§ 57303. Utility value and tonnage requirements 

24 ‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be acquired 

25 under this chapter for operation in the domestic or foreign commerce of the 

26 United States may not be substantially less than that of the obsolete vessel 

27 acquired in exchange under this chapter. 

28 ‘‘(b) TONNAGE.—If the Secretary of Transportation finds that the new 

29 vessel will have a utility value at least equal to that of the obsolete vessel, 

30 the new vessel may be of lesser gross tonnage than the obsolete vessel. How31 ever, the gross tonnage of the new vessel must be at least one-third the 

32 gross tonnage of the obsolete vessel. 

33 ‘‘§ 57304. Eligible acquisition dates 

34 ‘‘At the option of the owner, the acquisition of an obsolete vessel under 

35 this chapter shall occur— 

36 ‘‘(1) when the owner contracts for the construction or purchase of 

37 a new vessel; or 

38 ‘‘(2) within 5 days of the actual date of delivery of the new vessel 

39 to the owner. 
212 

•HR 1442 IH 

1 ‘‘§ 57305. Determination of trade-in allowance 

2 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall determine the 

3 trade-in allowance for an obsolete vessel at the time of acquisition of the 

4 vessel. The allowance shall be the fair value of the vessel. In determining 

5 the value, the Secretary shall consider— 

6 ‘‘(1) the scrap value of the obsolete vessel in American and foreign 

7 markets; 

8 ‘‘(2) the depreciated value based on a 20-year or 25-year life, which9 ever applies to the obsolete vessel; and 

10 ‘‘(3) the market value of the obsolete vessel for operation in world 

11 commerce or in the domestic or foreign commerce of the United States. 

12 ‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete vessel 

13 occurs when the owner contracts for the construction of the new vessel, and 

14 the owner uses the obsolete vessel during the period of construction of the 

15 new vessel, the Secretary shall reduce the trade-in allowance by an amount 

16 representing the fair value of that use. The Secretary shall establish the 

17 rate for use of the obsolete vessel when the contract for construction of the 

18 new vessel is made. 

19 ‘‘§ 57306. Payment of trade-in allowance 

20 ‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an obsolete 

21 vessel under this chapter occurs when the owner contracts for the construc22 tion or purchase of the new vessel, the Secretary of Transportation shall 

23 apply the trade-in allowance to the purchase price of the new vessel rather 

24 than paying it to the owner. If the new vessel is constructed under this sub25 title, the Secretary may apply the trade-in allowance to the required cash 

26 payments on terms and conditions the Secretary may prescribe. If the new 

27 vessel is not constructed under this subtitle, the Secretary shall pay the 

28 trade-in allowance to the builder of the vessel for the account of the owner 

29 when the Secretary acquires the obsolete vessel. 

30 ‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the obsolete 

31 vessel occurs when the new vessel is delivered to the owner, the Secretary 

32 shall deposit the trade-in allowance in the owner’s capital construction fund. 

33 ‘‘§ 57307. Recognition of gain for tax purposes 

34 ‘‘The owner of an obsolete vessel does not recognize a gain under the 

35 Federal income tax laws when the vessel is transferred to the Secretary of 

36 Transportation in exchange for a trade-in allowance under this chapter. The 

37 basis of the new vessel acquired with the allowance is the same as the basis 

38 of the obsolete vessel— 

39 ‘‘(1) increased by the difference between the cost of the new vessel 

40 and the trade-in allowance of the obsolete vessel; and 

41 ‘‘(2) decreased by the amount of loss recognized on the transfer. 
213 

•HR 1442 IH 

1 ‘‘§ 57308. Use of vessels at least 25 years old 

2 ‘‘An obsolete vessel acquired under this chapter that is or becomes at 

3 least 25 years old may not be used for commercial operation. However, the 

4 vessel may be used— 

5 ‘‘(1) during a period in which vessels may be requisitioned under 

6 chapter 563 of this title; or 

7 ‘‘(2) except as otherwise provided in this subtitle, on trade routes 

8 serving only the foreign trade of the United States. 

9 ‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE 

10 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. 

11 ‘‘SUBCHAPTER I—GENERAL 

12 ‘‘§ 57501. Completion of long-range program 

13 ‘‘Whenever the Secretary of Transportation determines that the objectives 

14 and policies declared in sections 50101 and 50102 of this title cannot be 

15 fully realized within a reasonable time under titles V and VI of the Mer16 chant Marine Act, 1936, and the President approves the determination, the 

17 Secretary, in accordance with this chapter, shall complete the long-range 

18 program described in section 50102 of this title. 

19 ‘‘§ 57502. Construction, reconditioning, and remodeling of 

20 vessels 

21 ‘‘(a) IN GENERAL.—The Secretary of Transportation may have new ves22 sels constructed, and have old vessels reconditioned or remodeled, as the 

23 Secretary determines necessary to carry out the objectives of this subtitle. 

24 ‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remodeling of 

25 vessels under subsection (a) shall take place in shipyards in the continental 

26 United States (including Alaska and Hawaii). However, if satisfactory con-
214 

•HR 1442 IH 

1 tracts cannot be obtained from private shipbuilders, the Secretary may have 

2 the work done in navy yards. 

3 ‘‘(c) APPLICABILITY OF CONSTRUCTION-DIFFERENTIAL SUBSIDY PROVI4 SIONS.—Contracts for the construction, reconstruction, or reconditioning of 

5 a vessel by a private shipbuilder under this chapter are subject to the provi6 sions of title V of the Merchant Marine Act, 1936, applicable to a contract 

7 with a private shipbuilder for the construction of a vessel under title V of 

8 that Act. 

9 ‘‘§ 57503. Competitive bidding 

10 ‘‘(a) ADVERTISEMENT AND BIDDING.—The Secretary of Transportation 

11 may make a contract with a private shipbuilder for the construction of a 

12 new vessel, or for the reconstruction or reconditioning of an existing vessel, 

13 only after due advertisement and upon sealed competitive bids. 

14 ‘‘(b) OPENING OF BIDS.—Bids required under this section shall be 

15 opened at the time and place stated in the advertisement for bids. All inter16 ested persons, including representatives of the press, shall be permitted to 

17 attend. The results of the bidding shall be publicly announced. 

18 ‘‘§ 57504. Charter or sale of vessels acquired by Department 

19 of Transportation 

20 ‘‘Vessels transferred to or otherwise acquired by the Department of 

21 Transportation in any manner may be chartered or sold by the Secretary 

22 of Transportation as provided in this chapter. 

23 ‘‘§ 57505. Employment of vessels on foreign trade routes 

24 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall arrange for 

25 the employment of the Department of Transportation’s vessels in steamship 

26 lines on such trade routes, exclusively serving the foreign trade of the 

27 United States, as the Secretary determines are essential for the development 

28 and maintenance of the commerce of the United States and the national de29 fense. However, the Secretary shall first determine that those routes are not 

30 being adequately served by existing steamship lines privately owned and op31 erated by citizens of the United States and documented under the laws of 

32 the United States. 

33 ‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Secretary shall 

34 have a policy of encouraging private operation of each essential steamship 

35 line now owned by the United States Government by— 

36 ‘‘(1) selling the line to a citizen of the United States; or 

37 ‘‘(2) demising the Secretary’s vessels on bareboat charter to citizens 

38 of the United States who agree to maintain the line in the manner pro39 vided in this chapter. 
215 

•HR 1442 IH 

1 ‘‘§ 57506. Minimum selling price of vessels 

2 ‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or the Mer3 chant Marine Act, 1936, may not be sold by the Secretary of Transpor4 tation for less than the price specified in this section. 

5 ‘‘(b) OPERATION IN FOREIGN TRADE.—If the vessel is to be operated in 

6 foreign trade, the minimum price is the estimated foreign construction cost 

7 (exclusive of national defense features) determined as of the date the con8 struction contract is executed, less depreciation under subsection (d). 

9 ‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be operated 

10 in domestic trade, the minimum price is the cost of construction in the 

11 United States (exclusive of national defense features), less depreciation 

12 under subsection (d). 

13 ‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and (c) shall be 

14 based on— 

15 ‘‘(1) a 25-year life for dry-cargo and passenger vessels; and 

16 ‘‘(2) a 20-year life for tankers and other bulk liquid carrier vessels. 

17 ‘‘SUBCHAPTER II—CHARTERS 

18 ‘‘§ 57511. Demise charters 

19 ‘‘A charter by the Secretary of Transportation under this chapter shall 

20 demise the vessel to the charterer subject to all usual conditions contained 

21 in a bareboat charter. The charter shall be for a term the Secretary con22 siders to be in the best interest of the United States Government and the 

23 merchant marine. 

24 ‘‘§ 57512. Competitive bidding 

25 ‘‘(a) IN GENERAL.—The Secretary of Transportation may charter a ves26 sel of the Department of Transportation to a private operator only on the 

27 basis of competitive sealed bidding. The bids must be submitted in strict 

28 compliance with the terms and conditions of a public advertisement solic29 iting the bids. 

30 ‘‘(b) ADVERTISEMENT FOR BIDS.—An advertisement for bids shall 

31 state— 

32 ‘‘(1) the number, type, and tonnage of the vessels being offered for 

33 bareboat charter for operation as a steamship line on a designated 

34 trade route; 

35 ‘‘(2) the minimum number of sailings required; 

36 ‘‘(3) the length of time of the charter; 

37 ‘‘(4) the right of the Secretary to reject all bids; and 

38 ‘‘(5) other information the Secretary considers necessary for the in39 formation of prospective bidders. 

40 ‘‘(c) OPENING OF BIDS.—Bids required under this section shall be 

41 opened at the time and place stated in the advertisement for bids. All inter-
216 

•HR 1442 IH 

1 ested persons, including representatives of the press, shall be permitted to 

2 attend. The results of the bidding shall be publicly announced. 

3 ‘‘§ 57513. Minimum bid 

4 ‘‘The Secretary of Transportation shall reject any bid for the charter 

5 under this subchapter of a vessel constructed under this subtitle or the Mer6 chant Marine Act, 1936, if the charter hire offered is lower than the min7 imum charter hire would be if the vessel were chartered under section 

8 57531 of this title. 

9 ‘‘§ 57514. Qualifications of bidders 

10 ‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter to a bid11 der, the Secretary of Transportation shall consider— 

12 ‘‘(1) the bidder’s financial resources, credit standing, and practical 

13 experience in operating vessels; and 

14 ‘‘(2) other factors a prudent business person would consider in enter15 ing into a transaction involving a large capital investment. 

16 ‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a vessel to a 

17 person appearing to lack sufficient capital, credit, and experience to operate 

18 the vessel successfully over the period covered by the charter. 

19 ‘‘§ 57515. Awarding of charters 

20 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall award the 

21 charter to the bidder proposing to pay the highest monthly charter hire. 

22 However, the Secretary may reject the highest or most advantageous or any 

23 other bid if the Secretary considers the charter hire offered too low or deter24 mines that the bidder lacks the qualifications required by section 57514 of 

25 this title. 

26 ‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the highest bid, 

27 the Secretary may— 

28 ‘‘(1) award the charter to the next highest bidder; or 

29 ‘‘(2) reject all bids and either readvertise the line or operate the line 

30 until conditions appear more favorable to reoffer the line for private 

31 charter. 

32 ‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason for 

33 rejection shall be stated in writing to the bidder. 

34 ‘‘§ 57516. Operating-differential subsidies 

35 ‘‘If the Secretary of Transportation considers it necessary, the Secretary 

36 may make a contract with a charterer of a vessel owned by the Secretary 

37 for payment of an operating-differential subsidy, on the same terms and 

38 conditions, and subject to the same limitations and restrictions, as otherwise 

39 provided with respect to payment of operating-differential subsidies to oper40 ators of privately-owned vessels. 
217 

•HR 1442 IH 

1 ‘‘§ 57517. Recovery of excess profits 

2 ‘‘(a) IN GENERAL.—A charter under this chapter shall provide that if, 

3 at the end of a calendar year subsequent to the execution of the charter, 

4 the cumulative net voyage profit (after payment of the charter hire reserved 

5 in the charter and payment of the charterer’s fair and reasonable overhead 

6 expenses applicable to operation of the chartered vessel) exceeds 10 percent 

7 a year of the charterer’s capital necessarily employed in the business of the 

8 chartered vessel, the charterer shall pay to the Secretary of Transportation, 

9 as additional charter hire, half the cumulative net voyage profit in excess 

10 of 10 percent a year. However, any cumulative net voyage profit accounted 

11 for under this subsection is not to be included in the calculation of cumu12 lative net voyage profit in any subsequent year. 

13 ‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall define the 

14 terms ‘net voyage profit’, ‘fair and reasonable overhead expenses’, and ‘cap15 ital necessarily employed’ for this section. Each advertisement for bids and 

16 each charter shall contain these definitions, stating the formula for deter17 mining each of these three amounts. 

18 ‘‘§ 57518. Performance bond 

19 ‘‘The Secretary of Transportation shall require a charterer of a vessel of 

20 the Secretary to deposit with the Secretary an undertaking, with approved 

21 sureties, in such amount as the Secretary may require as security for the 

22 faithful performance of the terms of the charter, including indemnity 

23 against liens on the chartered vessel. 

24 ‘‘§ 57519. Insurance 

25 ‘‘A charter under this chapter shall require the charterer to carry, at the 

26 charterer’s expense, insurance on the chartered vessel covering all marine 

27 and port risks, protection and indemnity risks, and all other hazards and 

28 liabilities, adequate to cover damages claimed against and losses sustained 

29 by the chartered vessel arising during the term of the charter. The insur30 ance shall be in such form, in such amount, and with such companies as 

31 the Secretary of Transportation may require. In accordance with law, any 

32 of the insurance risks may be underwritten by the Secretary. 

33 ‘‘§ 57520. Vessel maintenance 

34 ‘‘(a) IN GENERAL.—A charter under this chapter shall require the 

35 charterer, at the charterer’s expense, to— 

36 ‘‘(1) keep the chartered vessel in good repair and efficient operating 

37 condition; and 

38 ‘‘(2) make any repairs required by the Secretary of Transportation. 

39 ‘‘(b) INSPECTION.—The charter shall provide that the Secretary has the 

40 right to inspect the vessel at any time to ascertain its condition. 
218 

•HR 1442 IH 

1 ‘‘§ 57521. Termination of charter during national emergency 

2 ‘‘A charter under this chapter shall provide that during a national emer3 gency proclaimed by the President or a period for which the President has 

4 proclaimed that the security of the national defense makes it advisable, the 

5 Secretary of Transportation may terminate the charter without cost to the 

6 United States Government on such notice to the charterer as the President 

7 determines. 

8 ‘‘SUBCHAPTER III—MISCELLANEOUS 

9 ‘‘§ 57531. Construction and charter of vessels for unsuccess10 ful routes 

11 ‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that a trade 

12 route determined to be essential under section 50103 of this title cannot be 

13 successfully developed and maintained and the Secretary’s replacement pro14 gram cannot be achieved under private operation of the trade route by a 

15 citizen of the United States with vessels documented under chapter 121 of 

16 this title, without further aid by the United States Government in addition 

17 to the financial aid authorized under titles V and VI of the Merchant Ma18 rine Act, 1936, the Secretary, without advertisement or competition, may— 

19 ‘‘(1) have constructed, in private shipyards or in navy yards, vessels 

20 of the types necessary for the trade route; and 

21 ‘‘(2) demise charter those new vessels to the operator of United 

22 States documented vessels established on the trade route. 

23 ‘‘(b) AMOUNT OF CHARTER HIRE.— 

24 ‘‘(1) IN GENERAL.—The annual charter hire under subsection (a) 

25 shall be at least 4 percent of the price (referred to in this section as 

26 the ‘foreign cost’) at which the vessel would be sold if constructed 

27 under title V of the Merchant Marine Act, 1936, plus— 

28 ‘‘(A) a percentage of the depreciated foreign cost computed an29 nually determined by the Secretary of the Treasury, taking into 

30 consideration the current average market yield on outstanding 

31 marketable obligations of the Government with remaining periods 

32 to maturity comparable to the term of the charter, adjusted to the 

33 nearest one-eighth percent; and 

34 ‘‘(B) an allowance adequate in the judgment of the Secretary 

35 of Transportation to cover administrative costs. 

36 ‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) shall be 

37 based on— 

38 ‘‘(A) a 25-year life for dry-cargo and passenger vessels; and 

39 ‘‘(B) a 20-year life for tankers and other bulk liquid carrier ves40 sels. 
219 

•HR 1442 IH 

1 ‘‘(c) OPTION TO PURCHASE.—The charter may contain an option to the 

2 charterer to purchase the vessels from the Secretary of Transportation with3 in 5 years after delivery under the charter, on the same terms and condi4 tions as provided in title V of the Merchant Marine Act, 1936, for the pur5 chase of new vessels from the Secretary. However— 

6 ‘‘(1) the purchase price shall be the foreign cost less depreciation to 

7 the date of purchase based on the useful life specified in subsection 

8 (b)(2); 

9 ‘‘(2) the required cash payment payable at the time of the purchase 

10 shall be 25 percent of the purchase price; 

11 ‘‘(3) the charter may provide that any part of the charter hire paid 

12 in excess of the minimum charter hire provided for in this section may 

13 be credited against the cash payment payable at the time of the pur14 chase; 

15 ‘‘(4) the balance of the purchase price shall be paid within the re16 maining years of useful life (as specified in subsection (b)(2)) after the 

17 date of delivery of the vessel under the charter and in approximately 

18 equal annual installments, except that the first installment, which shall 

19 be payable on the next ensuing anniversary date of the delivery under 

20 the charter, shall be a proportionate part of the annual installment; 

21 and 

22 ‘‘(5) interest shall be payable on the unpaid balances from the date 

23 of purchase, at a rate not less than— 

24 ‘‘(A) a rate determined by the Secretary of the Treasury, taking 

25 into consideration the current average market yield on outstanding 

26 marketable obligations of the Government with remaining periods 

27 to maturity comparable to the average maturities of the loans, ad28 justed to the nearest one-eighth percent; plus 

29 ‘‘(B) an allowance adequate in the judgment of the Secretary 

30 of Transportation to cover administrative costs. 

31 ‘‘(d) OPERATION OF VESSEL.— 

32 ‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for oper33 ation of the vessel exclusively— 

34 ‘‘(A) in foreign trade; 

35 ‘‘(B) on a round-the-world voyage; 

36 ‘‘(C) on a round voyage from the west coast of the United 

37 States to a European port that includes an intercoastal port of the 

38 United States; 

39 ‘‘(D) on a round voyage from the Atlantic coast of the United 

40 States to the Orient that includes an intercoastal port of the 

41 United States; or 
220 

•HR 1442 IH 

1 ‘‘(E) on a voyage in foreign trade on which the vessel may stop 

2 at Hawaii or an island territory or possession of the United 

3 States. 

4 ‘‘(2) DOMESTIC TRADE.—The charter shall provide if the vessel is 

5 operated in domestic trade on any of the services specified in para6 graph (1), the charterer will pay annually to the Secretary of Transportation that proportion of 1 7 ⁄25 of the difference between the domestic 

8 and foreign cost of the vessel as the gross revenue derived from the 

9 domestic trade bears to the gross revenue derived from the entire voy10 ages completed during the preceding year. 

11 ‘‘§ 57532. Operation of experimental vessels 

12 ‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’ means 

13 a vessel owned by the United States Government (including a vessel in the 

14 National Defense Reserve Fleet) that has been constructed, reconditioned, 

15 or remodeled for experimental or testing purposes. 

16 ‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation, for 

17 the purpose of practical development, trial, and testing, may operate an ex18 perimental vessel under a bareboat charter or general agency agreement in 

19 the foreign or domestic trade of the United States or for use for the account 

20 of a department or agency of the Government, without regard to other pro21 visions of this subtitle and other laws related to chartering and general 

22 agency operations. Not more than 10 vessels may be operated and tested 

23 under this section in any one year. 

24 ‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this section 

25 shall be on terms the Secretary considers appropriate to carry out the pur26 poses of this subtitle. A bareboat charter under this section shall be at rea27 sonable rates and include restrictions the Secretary considers appropriate to 

28 protect the public interest, including provisions for recapture of profits 

29 under section 57517 of this title. A charter or general agency agreement 

30 under this section shall be reviewed annually to determine whether condi31 tions exist to justify continuance of the charter or agreement. 

32 ‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel operations of the 

33 Secretary under this section and employed through a general agent in con34 nection with a charter or agreement under this section is entitled to all the 

35 rights and remedies provided in sections 1(a) and (c), 3(c), and 4 of the 

36 Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294). 

37 ‘‘PART G—RESTRICTIONS AND PENALTIES

38 ‘‘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. 
221 

•HR 1442 IH 

‘‘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. 

1 ‘‘§ 58101. Operating in domestic intercoastal or coastwise 

2 service 

3 ‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid to a con4 tractor under the operating-differential subsidy program, and a vessel may 

5 not be chartered to a person under chapter 575 of this title, if the con6 tractor or charterer, or a holding company, subsidiary, affiliate, or associate 

7 of the contractor or charterer, or an officer, director, agent, or executive 

8 thereof, directly or indirectly— 

9 ‘‘(1) owns, charters, or operates a vessel engaged in the domestic 

10 intercoastal or coastwise service; or 

11 ‘‘(2) owns a pecuniary interest in a person that owns, charters, or 

12 operates a vessel in the domestic intercoastal or coastwise service. 

13 ‘‘(b) WAIVER.—A person may apply to the Secretary of Transportation 

14 for a waiver of subsection (a). Before deciding on the waiver, the Secretary 

15 shall give the applicant and other interested persons an opportunity for a 

16 hearing. The Secretary may not grant the waiver if the Secretary finds it 

17 would— 

18 ‘‘(1) result in unfair competition to a person operating exclusively in 

19 the domestic intercoastal or coastwise service; or 

20 ‘‘(2) be prejudicial to the objectives and policy of this subtitle. 

21 ‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall grant 

22 an application under subsection (b) without requiring further proof that the 

23 public interest and convenience will be served and without further pro24 ceedings as to the competition in the route or trade, if the contractor or 

25 other person, or a predecessor in interest, was in bona-fide operation as a 

26 common carrier by water in the domestic intercoastal or coastwise trade in 

27 1935 over the route or in the trade for which the application is made and 

28 has so operated since that time or, if engaged in furnishing seasonal service 

29 only, was in bona-fide operation in 1935 during the season ordinarily cov30 ered by its operation, except in either event as to interruptions of service 

31 over which the applicant or its predecessor in interest had no control. 

32 ‘‘(d) DIVERSION INTO INTERCOASTAL OR COASTWISE OPERATIONS.—If 

33 an application under subsection (b) is approved, a person referred to in this 

34 section may not divert, directly or indirectly, money, property, or any other 

35 thing of value, used in a foreign-trade operation for which a subsidy is paid 

36 by the United States Government, into intercoastal or coastwise operations. 
222 

•HR 1442 IH 

1 ‘‘§ 58102. Default on payment or maintenance of reserves 

2 ‘‘The Secretary of Transportation may supervise the number and com3 pensation of all officers and employees of a contractor under the operating4 differential subsidy program or a charterer under chapter 575 of this title, 

5 receiving an operating-differential subsidy, if the contractor or charterer— 

6 ‘‘(1) is in default on a mortgage, note, purchase contract, or other 

7 obligation to the Secretary; or 

8 ‘‘(2) has not maintained, in a manner satisfactory to the Secretary, 

9 all of the reserves provided for in this subtitle. 

10 ‘‘§ 58103. Employing another person as managing or oper11 ating agent 

12 ‘‘(a) PROHIBITION.—Except with the written consent of the Secretary of 

13 Transportation, a contractor holding a contract under the operating-dif14 ferential subsidy program or under chapter 575 of this title may not— 

15 ‘‘(1) employ another person as the managing or operating agent of 

16 the operator; or 

17 ‘‘(2) charter a vessel, on which an operating-differential subsidy is 

18 to be paid, for operation by another person. 

19 ‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter pro20 hibited by this section is made, the person operating the chartered vessel 

21 is subject to all the provisions of this subtitle and the operating-differential 

22 subsidy program, including limitations of profits and salaries. 

23 ‘‘§ 58104. Willful violation constitutes breach of contract or 

24 charter 

25 ‘‘A willful violation of any provision of sections 58101–58103 of this title 

26 constitutes a breach of the contract or charter. On determining that a viola27 tion has occurred, the Secretary of Transportation may declare the contract 

28 or charter rescinded. 

29 ‘‘§ 58105. Preferences for cargo in which charterer has inter30 est 

31 ‘‘A contractor receiving an operating-differential subsidy, or a charterer 

32 under chapter 575 of this title, may not unjustly discriminate in any man33 ner so as to give preference, directly or indirectly, to cargo in which the con34 tractor or charterer has a direct or indirect ownership, purchase, or vending 

35 interest. 

36 ‘‘§ 58106. Concerted discriminatory activities 

37 ‘‘(a) PROHIBITION.—A contractor receiving an operating-differential sub38 sidy, or a charterer under chapter 575 of this title, may not continue as 

39 a party to or conform to an agreement with another carrier by water, or 

40 engage in a practice in concert with another carrier by water, that is un41 justly discriminatory or unfair to any other citizen of the United States op-
223 

•HR 1442 IH 

1 erating a common carrier by water employing only vessels documented 

2 under the laws of the United States on an established trade route from and 

3 to a United States port. 

4 ‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or subsidy of 

5 any kind may be paid, directly or indirectly, out of funds of the United 

6 States Government to a contractor or charterer that has violated subsection 

7 (a). 

8 ‘‘(c) CIVIL ACTION.—A person whose business or property is injured by 

9 a violation of subsection (a) may bring a civil action in the district court 

10 of the United States for the district in which the defendant resides, is 

11 found, or has an agent. If the person prevails, the person shall be award12 ed— 

13 ‘‘(1) 3 times the damages; and 

14 ‘‘(2) costs, including reasonable attorney fees. 

15 ‘‘§ 58107. Discrimination at ports by water common carriers 

16 ‘‘(a) PROHIBITION.—A common carrier by water may not, directly or in17 directly, through an agreement, conference, association, understanding, or 

18 otherwise, prevent or attempt to prevent any other common carrier by water 

19 from serving any port described in subsection (b) at the same rates the first 

20 carrier charges at the nearest port already regularly served by it. 

21 ‘‘(b) PORTS.—A port referred to in subsection (a) is one that is— 

22 ‘‘(1) designed for the accommodation of ocean-going vessels; 

23 ‘‘(2) located on an improvement project authorized by law or by a 

24 Federal agency; and 

25 ‘‘(3) located within the continental limits of the United States. 

26 ‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not limit the 

27 authority otherwise vested in the Secretary of Transportation and the Fed28 eral Maritime Commission. 

29 ‘‘§ 58108. Charges for transportation subject to subtitle IV of 

30 title 49 

31 ‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive for 

32 transportation subject to subtitle IV of title 49 of persons or property, 

33 under any joint rate, fare, or charge, or under any export, import, or other 

34 proportional rate, fare, or charge, that is based in whole or in part on the 

35 fact that the persons or property affected are to be transported to, or have 

36 been transported from, a port in a territory or possession of the United 

37 States or in a foreign country, by a carrier by water in foreign commerce, 

38 any lower rate, fare, or charge than the carrier charges, collects, or receives 

39 for the transportation of persons or similar property for the same distance, 

40 in the same direction, and over the same route, in commerce wholly within 

41 the United States, unless the vessel used for the transportation is or was 
224 

•HR 1442 IH 

1 at the time of the transportation documented under the laws of the United 

2 States. 

3 ‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of Trans4 portation believes that adequate shipping facilities to or from any port in 

5 a territory or possession of the United States or a foreign country are not 

6 being provided by vessels documented under the laws of the United States, 

7 the Secretary shall certify this fact to the Surface Transportation Board. 

8 On receiving the certification, the Board may by order suspend the oper9 ation of subsection (a) with respect to the rates, fares, and charges for the 

10 transportation by rail of persons and property transported from or to be 

11 transported to those ports, for such time and under such terms and condi12 tions as the Secretary may specify in the order or in any supplemental 

13 order. 

14 ‘‘(c) TERMINATION OF SUSPENSION.—Whenever the Secretary believes 

15 that adequate shipping facilities are being provided to those ports by vessels 

16 documented under the laws of the United States, and certifies that fact to 

17 the Board, the Board may order the termination of the suspension. 

18 ‘‘§ 58109. Penalties 

19 ‘‘(a) INDIVIDUALS.—An individual convicted of violating section 

20 58101(d), 58103, or 58105 of this title shall be fined under title 18, impris21 oned for at least one year but not more than 5 years, or both. 

22 ‘‘(b) ORGANIZATIONS.—An organization convicted of committing an act 

23 prohibited by this subtitle shall be fined under title 18. 

24 ‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or organiza25 tion convicted of violating a section referred to in subsection (a) is ineligible, 

26 at the discretion of the Secretary of Transportation, to receive any benefit 

27 under the construction-differential subsidy or operating-differential subsidy 

28 programs, or a charter under chapter 575 of this title, for 5 years after 

29 the conviction.’’. 

30 SEC. 9. SUBTITLE VI OF TITLE 46. 

31 (a) REDESIGNATION.—Title 46, United States Code, is amended by re32 designating subtitle VI as subtitle VII. 

33 (b) NEW SUBTITLE.—Title 46, United States Code, is amended by insert34 ing after subtitle V the following: 

35 ‘‘Subtitle VI—Clearance, Tonnage Taxes, and 

36 Duties 

‘‘Chapter Sec. 

‘‘601. Arrival and Departure Requirements ............................................... 60101 

‘‘603. Tonnage Taxes and Light Money ........................................................ 60301 

‘‘605. Discriminating Duties and Reciprocal Privileges ........................ 60501 
225 

•HR 1442 IH 

1 ‘‘CHAPTER 601—ARRIVAL AND DEPARTURE 

2 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. 

3 ‘‘§ 60101. Boarding arriving vessels before inspection 

4 ‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall prescribe 

5 and enforce regulations on the boarding of a vessel arriving at a port of 

6 the United States before the vessel has been inspected and secured. 

7 ‘‘(b) CRIMINAL PENALTY.—A person violating a regulation prescribed 

8 under this section shall be fined under title 18, imprisoned for not more 

9 than 6 months, or both. 

10 ‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be construed as 

11 supplementary to section 2279 of title 18. 

12 ‘‘§ 60102. Production of certificate on entry 

13 ‘‘On entry of a vessel documented under chapter 121 of this title, the 

14 master or other individual in charge of the vessel shall produce the certifi15 cate of documentation to the customs officer at the place where the vessel 

16 is entered. If the certificate is not produced, the vessel is not entitled to 

17 the privileges of a documented vessel. 

18 ‘‘§ 60103. Oath of ownership on entry 

19 ‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United States 

20 from a foreign port, the individual designated under subsection (b) shall 

21 state under oath that— 

22 ‘‘(1) the vessel’s certificate of documentation contains the names of 

23 all the owners of the vessel; or 

24 ‘‘(2) part of the ownership has been transferred since the certificate 

25 was issued and, to the best of the individual’s knowledge and belief, 

26 the vessel is still owned only by citizens of the United States. 

27 ‘‘(b) PERSON TO MAKE STATEMENT.—The statement under subsection 

28 (a) shall be made by— 

29 ‘‘(1) an owner if one resides at the port of entry; or 

30 ‘‘(2) the master if an owner does not reside at the port of entry. 

31 ‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appropriate 

32 individual does not make the statement required by this section, the vessel 

33 is not entitled to the privileges of a vessel of the United States. 
226 

•HR 1442 IH 

1 ‘‘§ 60104. Depositing certificates of documentation with con2 sular officers 

3 ‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citizens of the 

4 United States, on a voyage from a port in the United States, arrives at a 

5 foreign port, the master of the vessel shall deposit the vessel’s certificate 

6 of documentation with a consular officer at the foreign port if there is a 

7 consular officer at that port. 

8 ‘‘(b) RETURN OF CERTIFICATE.—When the master produces a clearance 

9 from the appropriate officer of the foreign port, the consular officer shall 

10 return the certificate of documentation to the master if the master has com11 plied with the provisions of law related to the discharge of seamen in a for12 eign country and the payment of fees of consular officers. 

13 ‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel failing 

14 to deposit the certificate of documentation as required by subsection (a) is 

15 liable to the United States Government for a civil penalty of $500. The con16 sular officer shall bring an action to recover the penalty in any court of 

17 competent jurisdiction. The action shall be brought in the name of the con18 sular officer for the benefit of the United States. 

19 ‘‘§ 60105. Clearance of vessels 

20 ‘‘(a) VESSELS OF THE UNITED STATES.—Except as otherwise provided 

21 by law, a vessel of the United States shall obtain clearance from the Sec22 retary of Homeland Security before proceeding from a port or place in the 

23 United States— 

24 ‘‘(1) for a foreign port or place; 

25 ‘‘(2) for another port or place in the United States if the vessel has 

26 on board foreign merchandise for which entry has not been made; or 

27 ‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 

28 merchandise while outside the territorial sea. 

29 ‘‘(b) OTHER VESSELS.—Except as otherwise provided by law, a vessel 

30 that is not a vessel of the United States shall obtain clearance from the Sec31 retary before proceeding from a port or place in the United States— 

32 ‘‘(1) for a foreign port or place; 

33 ‘‘(2) for another port or place in the United States; or 

34 ‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 

35 or deliver merchandise while outside the territorial sea. 

36 ‘‘(c) REGULATIONS.—The Secretary may by regulation— 

37 ‘‘(1) prescribe the manner in which clearance under this section is 

38 to be obtained, including the documents, data, or information which 

39 shall be submitted or transmitted, pursuant to an authorized data 

40 interchange system, to obtain the clearance; 
227 

•HR 1442 IH 

1 ‘‘(2) permit clearance to be obtained before all requirements for 

2 clearance are complied with, but only if the owner or operator of the 

3 vessel files a bond in an amount set by the Secretary conditioned on 

4 the compliance by the owner or operator with all specified requirements 

5 for clearance within a time period (not exceeding 4 business days) es6 tablished by the Secretary; and 

7 ‘‘(3) permit clearance to be obtained at a place other than a des8 ignated port of entry, under conditions the Secretary may prescribe. 

9 ‘‘§ 60106. State inspection laws 

10 ‘‘When State law requires a certificate of inspection for goods carried on 

11 a vessel, a vessel transporting the goods may not be cleared until the certifi12 cate is produced. 

13 ‘‘§ 60107. Payment of fees on departing vessel 

14 ‘‘A departing vessel may be cleared only when all legal fees that have ac15 crued on the vessel are paid and proof of payment is presented to the indi16 vidual granting the clearance. 

17 ‘‘§ 60108. Duty to transport tendered cargo 

18 ‘‘Clearance may be refused to a vessel or vehicle transporting cargo des19 tined for a domestic or foreign port when the owner, master, or other indi20 vidual in charge refuses to accept cargo tendered in good condition, with 

21 proper charges, for the same or an intermediate port by a citizen of the 

22 United States. This section does not apply if the vessel or vehicle is already 

23 fully loaded (giving appropriate consideration to its proper loading) or is not 

24 adaptable to transport the tendered cargo. 

25 ‘‘§ 60109. Duty to transport money and securities of the 

26 United States Government 

27 ‘‘Before being given clearance, a vessel owned by a citizen of the United 

28 States and bound on a voyage from a port in the United States to another 

29 port in the United States or in a foreign country, or on a voyage from a 

30 port in a foreign country to a port in the United States, shall receive on 

31 board any bullion, coin, notes, bonds, or other securities of the United 

32 States Government that an agency, consular officer, or other agent of the 

33 Government offers. The vessel shall transport the items securely and deliver 

34 them promptly to the proper authorities or consignees on arriving at the 

35 port of destination. Compensation shall be paid for services provided under 

36 this section that is equal to compensation paid to other carriers in the ordi37 nary transaction of business. 

38 ‘‘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. 
228 

•HR 1442 IH 

‘‘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. 

‘‘60311. Hospital vessels in time of war. 

‘‘60312. Rights under treaties preserved. 

1 ‘‘§ 60301. Regular tonnage taxes 

2 ‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents per ton (but 

3 not more than a total of 10 cents per ton per year) at each entry in a port 

4 of the United States of— 

5 ‘‘(1) a vessel entering from a foreign port or place in North America, 

6 Central America, the West Indies Islands, the Bahama Islands, the 

7 Bermuda Islands, or the coast of South America bordering the Carib8 bean Sea; or 

9 ‘‘(2) a vessel returning to the same port or place in the United 

10 States from which it departed, and not entering the United States from 

11 another port or place, except— 

12 ‘‘(A) a vessel of the United States; 

13 ‘‘(B) a recreational vessel (as defined in section 2101 of this 

14 title); or 

15 ‘‘(C) a barge. 

16 ‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents per ton 

17 (but not more than a total of 30 cents per ton per year) on a vessel at each 

18 entry in a port of the United States from a foreign port or place not named 

19 in subsection (a)(1). 

20 ‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—Sub21 section (a) does not apply to a vessel entering other than by sea from a 

22 foreign port or place at which tonnage, lighthouse, or other equivalent taxes 

23 are not imposed on vessels of the United States. 

24 ‘‘§ 60302. Special tonnage taxes 

25 ‘‘(a) ENTRY FROM FOREIGN PORT OR PLACE.—Regardless of whether a 

26 tax is imposed under section 60301 of this title, a tax is imposed on a vessel 

27 at each entry in a port of the United States from a foreign port or place 

28 at the following rates: 

29 ‘‘(1) 30 cents per ton on a vessel built in the United States but 

30 owned in any part by a subject of a foreign country. 

31 ‘‘(2) 50 cents per ton on other vessels not of the United States. 

32 ‘‘(3) 50 cents per ton on a vessel of the United States having an 

33 officer who is not a citizen of the United States. 

34 ‘‘(4) $2 per ton on a foreign vessel entering from a foreign port or 

35 place at which vessels of the United States are not ordinarily allowed 

36 to enter and trade. 
229 

•HR 1442 IH 

1 ‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROPERTY

2 BETWEEN DISTRICTS.—Regardless of whether a tax is imposed under sec3 tion 60301 of this title, a tax of 50 cents per ton is imposed on a vessel 

4 not of the United States at each entry in one customs district from another 

5 district when transporting goods loaded in one district to be delivered in an6 other district. 

7 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—The tax of 50 

8 cents per ton under this section does not apply to a vessel that— 

9 ‘‘(1) is owned only by citizens of the United States; and 

10 ‘‘(2) after entering a port of the United States, becomes documented 

11 as a vessel of the United States before leaving that port. 

12 ‘‘§ 60303. Light money 

13 ‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be called ‘light 

14 money’, is imposed on a vessel not of the United States at each entry in 

15 a port of the United States. This tax shall be imposed and collected under 

16 the same regulations that apply to tonnage taxes. 

17 ‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.— 

18 ‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel owned 

19 only by citizens of the United States if— 

20 ‘‘(A) the vessel is carrying a regular document issued by a cus21 tomhouse of the United States proving the vessel to be owned only 

22 by citizens of the United States; and 

23 ‘‘(B) on entry of the vessel from a foreign port, the individual 

24 designated under paragraph (2) states under oath that— 

25 ‘‘(i) the document contains the names of all the owners of 

26 the vessel; or 

27 ‘‘(ii) part of the ownership has been transferred since the 

28 document was issued and, to the best of that individual’s 

29 knowledge and belief, the vessel is still owned only by citizens 

30 of the United States. 

31 ‘‘(2) PERSON TO MAKE STATEMENT.—The statement under para32 graph (1)(B) shall be made by— 

33 ‘‘(A) an owner if one resides at the port of entry; or 

34 ‘‘(B) the master if an owner does not reside at the port of 

35 entry. 

36 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection 

37 (a) section does not apply to a vessel that— 

38 ‘‘(1) is owned only by citizens of the United States; and 

39 ‘‘(2) after entering a port of the United States, becomes documented 

40 as a vessel of the United States before leaving that port. 
230 

•HR 1442 IH 

1 ‘‘§ 60304. Presidential suspension of tonnage taxes and light 

2 money 

3 ‘‘If the President is satisfied that the government of a foreign country 

4 does not impose discriminating or countervailing duties to the disadvantage 

5 of the United States, the President shall suspend the imposition of special 

6 tonnage taxes and light money under sections 60302 and 60303 of this title 

7 on vessels of that country. 

8 ‘‘§ 60305. Vessels in distress 

9 ‘‘A vessel is exempt from tonnage taxes and light money when it enters 

10 because it is in distress. 

11 ‘‘§ 60306. Vessels not engaged in trade 

12 ‘‘A vessel is exempt from tonnage taxes and light money when not en13 gaged in trade. 

14 ‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries 

15 ‘‘A vessel with a registry endorsement or a coastwise endorsement, trad16 ing from one port in the United States to another port in the United States 

17 or employed in the bank, whale, or other fisheries, is exempt from tonnage 

18 taxes and light money. 

19 ‘‘§ 60308. Vessels engaged in Great Lakes trade 

20 ‘‘A documented vessel with a registry endorsement, engaged in foreign 

21 trade on the Great Lakes or their tributary or connecting waters in trade 

22 with Canada, does not become subject to tonnage taxes or light money be23 cause of that trade. 

24 ‘‘§ 60309. Passenger vessels making trips between ports of 

25 the United States and foreign ports 

26 ‘‘A passenger vessel making at least 3 trips per week between a port of 

27 the United States and a foreign port is exempt from tonnage taxes and light 

28 money. 

29 ‘‘§ 60310. Vessels making daily trips on interior waters 

30 ‘‘A vessel making regular daily trips between a port of the United States 

31 and a port of Canada only on interior waters not navigable to the ocean 

32 is exempt from tonnage taxes and light money, except on its first clearing 

33 each year. 

34 ‘‘§ 60311. Hospital vessels in time of war 

35 ‘‘In time of war, a hospital vessel is exempt from tonnage taxes, light 

36 money, and pilotage charges in the ports of the United States if the vessel 

37 is one for which the conditions of the international convention for the ex38 emption of hospital ships from taxation in time of war, concluded at The 

39 Hague on December 21, 1904, are satisfied. The President by proclamation 

40 shall name the vessels for which the conditions are satisfied and state when 

41 the exemption begins and ends. 
231 

•HR 1442 IH 

1 ‘‘§ 60312. Rights under treaties preserved 

2 ‘‘This chapter and chapter 605 of this title do not affect a right or privi3 lege of a foreign country relating to tonnage taxes or other duties on vessels 

4 under a law or treaty of the United States. 

5 ‘‘CHAPTER 605—DISCRIMINATING DUTIES AND 

6 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. 

7 ‘‘§ 60501. Vessels allowed to import 

8 ‘‘(a) IN GENERAL.—Except as otherwise provided by treaty, goods may 

9 be imported into the United States from a foreign port or place only in— 

10 ‘‘(1) a vessel of the United States; or 

11 ‘‘(2) a foreign vessel owned only by citizens or subjects of the coun12 try— 

13 ‘‘(A) in which the goods are grown, produced, or manufactured; 

14 or 

15 ‘‘(B) from which the goods can only be, or most usually are, 

16 first shipped for transportation. 

17 ‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING SIMI18 LAR RESTRICTIONS.—Subsection (a) does not apply to a vessel of a foreign 

19 country that does not maintain a similar restriction against United States 

20 documented vessels. 

21 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection 

22 (a) does not apply to a vessel that— 

23 ‘‘(1) is owned only by citizens of the United States; and 

24 ‘‘(2) after entering a port of the United States, becomes documented 

25 as a vessel of the United States before leaving that port. 

26 ‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in violation of 

27 this section, the goods and the vessel in which they are imported, along with 

28 its equipment and other cargo, may be seized by and forfeited to the United 

29 States Government. 

30 ‘‘§ 60502. Discriminating duty on goods imported in foreign 

31 vessels or from contiguous countries 

32 ‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent ad valo33 rem (in addition to other duties imposed by law) is imposed on goods— 

34 ‘‘(1) imported in a vessel not of the United States unless the ves35 sel— 
232 

•HR 1442 IH 

1 ‘‘(A) is entitled by law or treaty to enter the ports of the United 

2 States on payment of the same duties as are payable on goods im3 ported in a vessel of the United States; or 

4 ‘‘(B)(i) is owned only by citizens of the United States; and 

5 ‘‘(ii) after entering a port of the United States, becomes docu6 mented as a vessel of the United States before leaving that port; 

7 or 

8 ‘‘(2) produced or manufactured in a foreign country not contiguous 

9 to the United States and imported from a country contiguous to the 

10 United States, unless imported in the usual course of strictly retail 

11 trade. 

12 ‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without pay13 ment of the duty required by this section, the goods and the vessel in which 

14 they are imported may be seized by, and forfeited to, the United States Gov15 ernment. 

16 ‘‘§ 60503. Reciprocal suspension of discriminating duties 

17 ‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from the 

18 government of a foreign country that it has suspended, in any part, the im19 position of discriminating duties for any class of vessels owned by citizens 

20 of the United States or goods imported in those vessels, the President may 

21 proclaim a reciprocal suspension of discriminating duties for the same class 

22 of vessels owned by citizens of that country or goods imported in those ves23 sels. 

24 ‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under this sec25 tion takes effect retroactively from the date the President received the proof 

26 from the foreign government, and expires when that government stops 

27 granting the reciprocal suspension. 

28 ‘‘§ 60504. Reciprocal privileges for recreational vessels 

29 ‘‘When the President is satisfied that yachts owned by residents of the 

30 United States and used only for pleasure are allowed to arrive at, depart 

31 from, and cruise in the waters of a foreign port without entering, clearing, 

32 or paying any duties or fees (including cruising license fees), the Secretary 

33 of Homeland Security may allow yachts from that foreign port used only 

34 for pleasure to arrive at and depart from the ports of the United States 

35 and to cruise in the waters of the United States without paying any duties 

36 or fees. However, the Secretary may require foreign yachts to obtain a li37 cense to cruise in the waters of the United States. The license shall be in 

38 the form prescribed by the Secretary and contain limitations about length 

39 of time, direction, place of cruising and action, and other matters the Sec40 retary considers appropriate. The license shall be issued without cost to the 

41 yacht. 
233 

•HR 1442 IH 

1 ‘‘§ 60505. Retaliatory suspension of commercial privileges 

2 ‘‘(a) GENERAL AUTHORITY.—The President may proclaim a suspension 

3 of commercial privileges to vessels of a foreign country when— 

4 ‘‘(1) vessels of that country have been given the same commercial 

5 privileges in the ports and waters of the United States given to vessels 

6 of the United States (except the privilege of engaging in coastwise com7 merce); and 

8 ‘‘(2) vessels of the United States are denied commercial privileges in 

9 the ports or waters of that country given to vessels of that country. 

10 ‘‘(b) APPLICATION.—A suspension under this section shall apply to the 

11 same commercial privileges denied to vessels of the United States in the 

12 ports or waters of the foreign country, and to the same class of vessels of 

13 that country as the class of vessels of the United States denied the privi14 leges. 

15 ‘‘(c) EFFECTIVE DATE.—The President shall designate the effective date 

16 of the suspension in the proclamation. 

17 ‘‘(d) PENALTIES.— 

18 ‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or agent of 

19 a vessel of a foreign country does an act for the vessel in the ports 

20 or waters of the United States in violation of a proclamation issued 

21 under this section, the vessel and the goods on the vessel may be seized 

22 by, and forfeited to, the United States Government. 

23 ‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official of the 

24 Government enforcing this section shall be fined under title 18, impris25 oned for not more than 2 years, or both. 

26 ‘‘§ 60506. Retaliation against British dominions of North 

27 America 

28 ‘‘(a) GENERAL AUTHORITY.—The President by proclamation may pro29 hibit vessels of the British dominions of North America, their masters and 

30 crews, and products of or coming from those dominions, from entering wa31 ters, ports, or places of the United States when the President is satisfied 

32 that— 

33 ‘‘(1) fishermen or fishing vessels of the United States in waters, 

34 ports, or places of the British dominions of North America are being 

35 or recently have been— 

36 ‘‘(A) denied rights provided by law or treaty; 

37 ‘‘(B) subjected to unreasonable restrictions in the exercise of 

38 those rights; or 

39 ‘‘(C) otherwise harassed; 

40 ‘‘(2) fishermen or fishing vessels of the United States, having a per41 mit under the laws of the United States to dock or trade at a port 
234 

•HR 1442 IH 

1 or place in the British dominions of North America, are being or re2 cently have been— 

3 ‘‘(A) denied the privilege of entering the port or place in the 

4 same manner and under the same regulations applicable to trading 

5 vessels of the most-favored-nation; 

6 ‘‘(B) prevented from buying supplies allowed to be sold to trad7 ing vessels of the most-favored-nation; or 

8 ‘‘(C) otherwise harassed; or 

9 ‘‘(3) other vessels of the United States or their masters or crews in 

10 waters, ports, or places of the British dominions of North America are 

11 being or recently have been— 

12 ‘‘(A) denied privileges given to vessels of the most-favored-na13 tion or their masters or crews; or 

14 ‘‘(B) otherwise harassed. 

15 ‘‘(b) COVERAGE AND EXCEPTIONS.—The President may apply a procla16 mation under this section to any of the subjects named, and may include 

17 exceptions for vessels in distress or need of supplies. The President may 

18 change, revoke, and renew the proclamation. 

19 ‘‘(c) PENALTIES.—A person violating a proclamation issued under this 

20 section shall be fined under title 18, imprisoned for not more than 2 years, 

21 or both. A vessel or goods found in waters, ports, or places of the United 

22 States in violation of the proclamation may be seized by, and forfeited to, 

23 the United States Government. 

24 ‘‘§ 60507. Suspension of free passage through Saint Marys 

25 Falls Canal 

26 ‘‘(a) PURPOSE.—The purpose of this section is to secure reciprocal ad27 vantages for the citizens, ports, and vessels of the United States. 

28 ‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that vessels 

29 of the United States, or passengers or cargo being transported to a port 

30 of the United States, are prohibited from passing through a canal or lock 

31 connected with the navigation of the Saint Lawrence River, the Great 

32 Lakes, or their connecting waterways, or burdened in that passage by tolls 

33 or other means that are unreasonable in view of the free passage through 

34 the Saint Marys Falls Canal allowed to vessels of all countries, the Presi35 dent by proclamation may suspend the right of free passage through the 

36 Saint Marys Falls Canal for vessels owned by subjects of the country impos37 ing the prohibition, tolls, or other burdens and for passengers and cargo 

38 being transported to the ports of that country, even when carried in vessels 

39 of the United States. The suspension shall apply to the extent and for the 

40 time the President considers appropriate. 

41 ‘‘(c) IMPOSITION OF TOLL.— 
235 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—During a suspension under this section, the 

2 President shall impose a toll of not more than $2 per ton on cargo and 

3 not more than $5 on each passenger. 

4 ‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll may not 

5 be imposed on passengers or cargo landed at Ogdensburg, New York, 

6 or any port west of Ogdensburg and south of a line drawn from the 

7 northern boundary of New York through the Saint Lawrence River, the 

8 Great Lakes, and their connecting channels to the northern boundary 

9 of Minnesota. 

10 ‘‘(d) COLLECTION OF TOLL.— 

11 ‘‘(1) IN GENERAL.—A toll imposed under this section shall be col12 lected under regulations prescribed by the Secretary of Homeland Secu13 rity. The Secretary may require the master of a vessel to provide a 

14 sworn statement of the amount and kind of cargo, the number of pas15 sengers, and the destination of the passengers and cargo. 

16 ‘‘(2) PROOF OF LANDING.—When applicable, the Secretary also may 

17 require satisfactory proof that the passengers and cargo were landed 

18 at a port described in subsection (c)(2). Until that proof is provided, 

19 the Secretary may assume the passengers and cargo were not landed 

20 at such a port, and the amount of a toll that otherwise would be im21 posed is a lien enforceable against the vessel when found in the waters 

22 of the United States.’’. 

23 SEC. 10. SUBTITLE VII OF TITLE 46. 

24 Subtitle VII of title 46, United States Code, as redesignated by section 

25 9(a) of this Act, is amended as follows: 

26 (1) The subtitle heading and analysis are amended to read as fol27 lows: 

28 ‘‘Subtitle VII—Security and Drug Enforcement 

‘‘Chapter Sec.

‘‘701. Port Security ............................................................................................... 70101

‘‘703. Maritime Security ..................................................................................... 70301

‘‘705. Maritime Drug Law Enforcement ...................................................... 70501’’. 

29 (2) Add after chapter 701 the following: 

30 ‘‘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. 

31 ‘‘§ 70301. Definitions 

32 ‘‘In this chapter: 

33 ‘‘(1) COMMON CARRIER.—The term ‘common carrier’ has the mean34 ing given that term in section 40102 of this title. 
236 

•HR 1442 IH 

1 ‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ has the 

2 meaning given that term in section 2101 of this title. 

3 ‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary of the 

4 department in which the Coast Guard is operating. 

5 ‘‘§ 70302. International measures for seaport and vessel se6 curity 

7 ‘‘Congress encourages the President to continue to seek agreement on 

8 international seaport and vessel security through the International Maritime 

9 Organization. In developing an agreement, each member country of the 

10 International Maritime Organization should consult with appropriate private 

11 sector interests in that country. The agreement would establish seaport and 

12 vessel security measures and could include— 

13 ‘‘(1) seaport screening of cargo and baggage similar to that done at 

14 airports; 

15 ‘‘(2) security measures to restrict access to cargo, vessels, and dock16 side property to authorized personnel only; 

17 ‘‘(3) additional security on board vessels; 

18 ‘‘(4) licensing or certification of compliance with appropriate security 

19 standards; and 

20 ‘‘(5) other appropriate measures to prevent unlawful acts against 

21 passengers and crews on vessels. 

22 ‘‘§ 70303. Security standards at foreign ports 

23 ‘‘(a) GENERAL REQUIREMENTS.—The Secretary shall develop and imple24 ment a plan to assess the effectiveness of the security measures maintained 

25 at foreign ports that the Secretary, in consultation with the Secretary of 

26 State, determines pose a high risk of acts of terrorism against passenger 

27 vessels. In carrying out this subsection, the Secretary shall consult with the 

28 Secretary of State about the terrorist threat that exists in each country and 

29 poses a high risk of acts of terrorism against passenger vessels. 

30 ‘‘(b) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—If the 

31 Secretary, after implementing the plan under subsection (a), determines 

32 that a port does not maintain and administer effective security measures, 

33 the Secretary of State (after being informed by the Secretary) shall— 

34 ‘‘(1) notify the appropriate government authorities of the country in 

35 which the port is located of the determination; and 

36 ‘‘(2) recommend steps necessary to bring the security measures at 

37 that port up to the standard used by the Secretary in making the as38 sessment under subsection (a). 

39 ‘‘(c) ANTITERRORISM ASSISTANCE.—The President is encouraged to pro40 vide antiterrorism assistance related to maritime security under chapter 8 

41 of part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2349aa et seq.) 
237 

•HR 1442 IH 

1 to foreign countries, especially for a port that the Secretary determines 

2 under subsection (b) does not maintain and administer effective security 

3 measures. 

4 ‘‘§ 70304. Travel advisories on security at foreign ports 

5 ‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Secretary that 

6 the Secretary has determined that a condition exists that threatens the safe7 ty or security of passengers, passenger vessels, or crew traveling to or from 

8 a foreign port that the Secretary has determined under section 70303(b) of 

9 this title does not maintain and administer effective security measures, the 

10 Secretary of State immediately shall issue a travel advisory for that port. 

11 The Secretary of State shall take the necessary steps to widely publicize the 

12 travel advisory. 

13 ‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under subsection (a) 

14 may be lifted only if the Secretary, in consultation with the Secretary of 

15 State, has determined that effective security measures are maintained and 

16 administered at the port. 

17 ‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify Con18 gress immediately of any change in the status of a travel advisory issued 

19 under this section. 

20 ‘‘§ 70305. Suspension of passenger services 

21 ‘‘(a) GENERAL AUTHORITY.—Whenever the President determines that a 

22 foreign nation permits the use of territory under its jurisdiction as a base 

23 of operations or training for, or as a sanctuary for, or in any way arms, 

24 aids, or abets, a terrorist or terrorist group that knowingly uses the illegal 

25 seizure of passenger vessels or the threat thereof as an instrument of policy, 

26 the President may suspend the right of any passenger vessel common car27 rier to operate to or from, and the right of any passenger vessel of the 

28 United States to use, a port in that foreign nation for passenger service. 

29 The suspension may be without notice or hearing and for as long as the 

30 President determines is necessary to ensure the security of passenger vessels 

31 against unlawful seizure. 

32 ‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a passenger 

33 vessel of the United States, may not operate in violation of a suspension 

34 under this section. 

35 ‘‘(c) PENALTIES.— 

36 ‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in violation 

37 of this section, the Secretary may deny the vessels of that person entry 

38 to ports of the United States. 

39 ‘‘(2) CIVIL PENALTY.—A person violating this section is liable to the 

40 United States Government for a civil penalty of not more than 
238 

•HR 1442 IH 

1 $50,000. Each day a vessel uses a prohibited port is a separate viola2 tion. 

3 ‘‘§ 70306. Report on terrorist threats 

4 ‘‘(a) CONTENT.—Not later than February 28 of each year, the Secretary 

5 shall submit a report to Congress on the threat from acts of terrorism to 

6 United States ports and vessels operating from those ports. The Secretary 

7 shall include a description of activities undertaken under title I of the Mari8 time Transportation Security Act of 2002 (Public Law 107–295, 116 Stat. 

9 2066) and an analysis of the effect of those activities on port security 

10 against acts of terrorism. 

11 ‘‘(b) SUBMISSION.—The report shall be submitted to the Committee on 

12 International Relations and the Committee on Transportation and Infra13 structure of the House of Representatives and the Committee on Foreign 

14 Relations and the Committee on Commerce, Science, and Transportation of 

15 the Senate. Any classified information in the report shall be submitted sepa16 rately as an addendum. 

17 ‘‘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. 

18 ‘‘§ 70501. Findings and declarations 

19 ‘‘Congress finds and declares that trafficking in controlled substances 

20 aboard vessels is a serious international problem, is universally condemned, 

21 and presents a specific threat to the security and societal well-being of the 

22 United States. 

23 ‘‘§ 70502. Definitions 

24 ‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in section 

25 102 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 

26 (21 U.S.C. 802) apply to this chapter. 

27 ‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term ‘vessel 

28 of the United States’ means— 

29 ‘‘(1) a vessel documented under chapter 121 of this title or num30 bered as provided in chapter 123 of this title; 

31 ‘‘(2) a vessel owned in any part by an individual who is a citizen 

32 of the United States, the United States Government, the government 

33 of a State or political subdivision of a State, or a corporation incor34 porated under the laws of the United States or of a State, unless— 

35 ‘‘(A) the vessel has been granted the nationality of a foreign na36 tion under article 5 of the 1958 Convention on the High Seas; and 
239 

•HR 1442 IH 

1 ‘‘(B) a claim of nationality or registry for the vessel is made 

2 by the master or individual in charge at the time of the enforce3 ment action by an officer or employee of the United States who 

4 is authorized to enforce applicable provisions of United States law; 

5 and 

6 ‘‘(3) a vessel that was once documented under the laws of the United 

7 States and, in violation of the laws of the United States, was sold to 

8 a person not a citizen of the United States, placed under foreign reg9 istry, or operated under the authority of a foreign nation, whether or 

10 not the vessel has been granted the nationality of a foreign nation. 

11 ‘‘(c) VESSEL SUBJECT TO THE JURISDICTION OF THE UNITED

12 STATES.— 

13 ‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject to the 

14 jurisdiction of the United States’ includes— 

15 ‘‘(A) a vessel without nationality; 

16 ‘‘(B) a vessel assimilated to a vessel without nationality under 

17 paragraph (2) of article 6 of the 1958 Convention on the High 

18 Seas; 

19 ‘‘(C) a vessel registered in a foreign nation if that nation has 

20 consented or waived objection to the enforcement of United States 

21 law by the United States; 

22 ‘‘(D) a vessel in the customs waters of the United States; 

23 ‘‘(E) a vessel in the territorial waters of a foreign nation if the 

24 nation consents to the enforcement of United States law by the 

25 United States; and 

26 ‘‘(F) a vessel in the contiguous zone of the United States, as 

27 defined in Presidential Proclamation 7219 of September 2, 1999 

28 (43 U.S.C. 1331 note), that— 

29 ‘‘(i) is entering the United States; 

30 ‘‘(ii) has departed the United States; or 

31 ‘‘(iii) is a hovering vessel as defined in section 401 of the 

32 Tariff Act of 1930 (19 U.S.C. 1401). 

33 ‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver of ob34 jection by a foreign nation to the enforcement of United States law by 

35 the United States under paragraph (1)(C) or (E)— 

36 ‘‘(A) may be obtained by radio, telephone, or similar oral or 

37 electronic means; and 

38 ‘‘(B) is proved conclusively by certification of the Secretary of 

39 State or the Secretary’s designee. 

40 ‘‘(d) VESSEL WITHOUT NATIONALITY.— 
240 

•HR 1442 IH 

1 ‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without nation2 ality’ includes— 

3 ‘‘(A) a vessel aboard which the master or individual in charge 

4 makes a claim of registry that is denied by the nation whose reg5 istry is claimed; 

6 ‘‘(B) a vessel aboard which the master or individual in charge 

7 fails, on request of an officer of the United States authorized to 

8 enforce applicable provisions of United States law, to make a claim 

9 of nationality or registry for that vessel; and 

10 ‘‘(C) a vessel aboard which the master or individual in charge 

11 makes a claim of registry and for which the claimed nation of reg12 istry does not affirmatively and unequivocally assert that the ves13 sel is of its nationality. 

14 ‘‘(2) VERIFICATION OR DENIAL.—A claim of registry under para15 graph (1)(A) or (C) may be verified or denied by radio, telephone, or 

16 similar oral or electronic means. The denial of such a claim is proved 

17 conclusively by certification of the Secretary of State or the Secretary’s 

18 designee. 

19 ‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nationality or 

20 registry under this section includes only— 

21 ‘‘(1) possession on board the vessel and production of documents evi22 dencing the vessel’s nationality as provided in article 5 of the 1958 

23 Convention on the High Seas; 

24 ‘‘(2) flying its nation’s ensign or flag; or 

25 ‘‘(3) a verbal claim of nationality or registry by the master or indi26 vidual in charge of the vessel. 

27 ‘‘§ 70503. Manufacture, distribution, or possession of con28 trolled substances on vessels 

29 ‘‘(a) PROHIBITIONS.—An individual may not knowingly or intentionally 

30 manufacture or distribute, or possess with intent to manufacture or dis31 tribute, a controlled substance on board— 

32 ‘‘(1) a vessel of the United States or a vessel subject to the jurisdic33 tion of the United States; or 

34 ‘‘(2) any vessel if the individual is a citizen of the United States or 

35 a resident alien of the United States. 

36 ‘‘(b) EXTENSION BEYOND TERRITORIAL JURISDICTION.—Subsection (a) 

37 applies even though the act is committed outside the territorial jurisdiction 

38 of the United States. 

39 ‘‘(c) NONAPPLICATION.— 

40 ‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a) does 

41 not apply to— 
241 

•HR 1442 IH 

1 ‘‘(A) a common or contract carrier or an employee of the carrier 

2 who possesses or distributes a controlled substance in the lawful 

3 and usual course of the carrier’s business; or 

4 ‘‘(B) a public vessel of the United States or an individual on 

5 board the vessel who possesses or distributes a controlled sub6 stance in the lawful course of the individual’s duties. 

7 ‘‘(2) ENTERED IN MANIFEST.—Paragraph (1) applies only if the 

8 controlled substance is part of the cargo entered in the vessel’s mani9 fest and is intended to be imported lawfully into the country of destina10 tion for scientific, medical, or other lawful purposes. 

11 ‘‘(d) BURDEN OF PROOF.—The United States Government is not re12 quired to negative a defense provided by subsection (c) in a complaint, in13 formation, indictment, or other pleading or in a trial or other proceeding. 

14 The burden of going forward with the evidence supporting the defense is 

15 on the person claiming its benefit. 

16 ‘‘§ 70504. Jurisdiction and venue 

17 ‘‘(a) JURISDICTION.—Jurisdiction of the United States with respect to a 

18 vessel subject to this chapter is not an element of an offense. Jurisdictional 

19 issues arising under this chapter are preliminary questions of law to be de20 termined solely by the trial judge. 

21 ‘‘(b) VENUE.—A person violating section 70503 of this title shall be tried 

22 in the district court of the United States for— 

23 ‘‘(1) the district at which the person enters the United States; or 

24 ‘‘(2) the District of Columbia. 

25 ‘‘§ 70505. Failure to comply with international law as a de26 fense 

27 ‘‘A person charged with violating section 70503 of this title does not have 

28 standing to raise a claim of failure to comply with international law as a 

29 basis for a defense. A claim of failure to comply with international law in 

30 the enforcement of this chapter may be made only by a foreign nation. A 

31 failure to comply with international law does not divest a court of jurisdic32 tion and is not a defense to a proceeding under this chapter. 

33 ‘‘§ 70506. Penalties 

34 ‘‘(a) VIOLATIONS.—A person violating section 70503 of this title shall be 

35 punished as provided in section 1010 of the Comprehensive Drug Abuse 

36 Prevention and Control Act of 1970 (21 U.S.C. 960). However, if the of37 fense is a second or subsequent offense as provided in section 1012(b) of 

38 that Act (21 U.S.C. 962(b)), the person shall be punished as provided in 

39 section 1012 of that Act (21 U.S.C. 962). 
242 

•HR 1442 IH 

1 ‘‘(b) ATTEMPTS AND CONSPIRACIES.—A person attempting or conspiring 

2 to violate section 70503 of this title is subject to the same penalties as pro3 vided for violating section 70503. 

4 ‘‘§ 70507. Forfeitures 

5 ‘‘(a) IN GENERAL.—Property described in section 511(a) of the Com6 prehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 

7 881(a)) that is used or intended for use to commit, or to facilitate the com8 mission of, an offense under section 70503 of this title may be seized and 

9 forfeited in the same manner that similar property may be seized and for10 feited under section 511 of that Act (21 U.S.C. 881). 

11 ‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly rec12 ognized as smuggling tactics may provide prima facie evidence of intent to 

13 use a vessel to commit, or to facilitate the commission of, an offense under 

14 section 70503 of this title, and may support seizure and forfeiture of the 

15 vessel, even in the absence of controlled substances aboard the vessel. The 

16 following indicia, among others, may be considered, in the totality of the 

17 circumstances, to be prima facie evidence that a vessel is intended to be 

18 used to commit, or to facilitate the commission of, such an offense: 

19 ‘‘(1) The construction or adaptation of the vessel in a manner that 

20 facilitates smuggling, including— 

21 ‘‘(A) the configuration of the vessel to ride low in the water or 

22 present a low hull profile to avoid being detected visually or by 

23 radar; 

24 ‘‘(B) the presence of any compartment or equipment that is 

25 built or fitted out for smuggling, not including items such as a 

26 safe or lock-box reasonably used for the storage of personal 

27 valuables; 

28 ‘‘(C) the presence of an auxiliary tank not installed in accord29 ance with applicable law or installed in such a manner as to en30 hance the vessel’s smuggling capability; 

31 ‘‘(D) the presence of engines that are excessively over-powered 

32 in relation to the design and size of the vessel; 

33 ‘‘(E) the presence of materials used to reduce or alter the heat 

34 or radar signature of the vessel and avoid detection; 

35 ‘‘(F) the presence of a camouflaging paint scheme, or of mate36 rials used to camouflage the vessel, to avoid detection; or 

37 ‘‘(G) the display of false vessel registration numbers, false indi38 cia of vessel nationality, false vessel name, or false vessel home39 port. 

40 ‘‘(2) The presence or absence of equipment, personnel, or cargo in41 consistent with the type or declared purpose of the vessel. 
243 

•HR 1442 IH 

1 ‘‘(3) The presence of excessive fuel, lube oil, food, water, or spare 

2 parts, inconsistent with legitimate vessel operation, inconsistent with 

3 the construction or equipment of the vessel, or inconsistent with the 

4 character of the vessel’s stated purpose. 

5 ‘‘(4) The operation of the vessel without lights during times lights 

6 are required to be displayed under applicable law or regulation and in 

7 a manner of navigation consistent with smuggling tactics used to avoid 

8 detection by law enforcement authorities. 

9 ‘‘(5) The failure of the vessel to stop or respond or heave to when 

10 hailed by government authority, especially where the vessel conducts 

11 evasive maneuvering when hailed. 

12 ‘‘(6) The declaration to government authority of apparently false in13 formation about the vessel, crew, or voyage or the failure to identify 

14 the vessel by name or country of registration when requested to do so 

15 by government authority. 

16 ‘‘(7) The presence of controlled substance residue on the vessel, on 

17 an item aboard the vessel, or on an individual aboard the vessel, of a 

18 quantity or other nature that reasonably indicates manufacturing or 

19 distribution activity. 

20 ‘‘(8) The use of petroleum products or other substances on the vessel 

21 to foil the detection of controlled substance residue. 

22 ‘‘(9) The presence of a controlled substance in the water in the vicin23 ity of the vessel, where given the currents, weather conditions, and 

24 course and speed of the vessel, the quantity or other nature is such 

25 that it reasonably indicates manufacturing or distribution activity.’’. 

26 SEC. 11. SUBTITLE VIII OF TITLE 46. 

27 Title 46, United States Code, is amended by adding after subtitle VII the 

28 following: 

29 ‘‘Subtitle VIII—Miscellaneous 

‘‘Chapter Sec. 

‘‘801. Wrecks and Salvage ................................................................................. 80101 

‘‘803. Ice and Derelicts ....................................................................................... 80301 

‘‘805. Safe Containers for International Cargo ......................................... 80501 

30 ‘‘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. 

31 ‘‘§ 80101. Vessel stranded on foreign coast 

32 ‘‘(a) DUTIES OF CONSULAR OFFICER.—When a vessel of the United 

33 States is stranded on a coast of a foreign country, the consular officer in 
244 

•HR 1442 IH 

1 that country shall take proper measures, to the extent the laws of that coun2 try allow, to— 

3 ‘‘(1) save and secure the vessel and property on the vessel; and 

4 ‘‘(2) prepare an inventory of the property that is saved. 

5 ‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the consular 

6 officer shall deliver the property, with an inventory, to the owner of the 

7 property. 

8 ‘‘(c) LIMITATION ON TAKING POSSESSION.—A consular officer may not 

9 take possession of property under this section when the owner, master, or 

10 consignee is present or able to take possession of the property. 

11 ‘‘§ 80102. License to salvage on Florida coast 

12 ‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in the busi13 ness of salvaging on the coast of Florida, a vessel and its master each must 

14 have a license issued by a judge of the district court of the United States 

15 for a judicial district of Florida. 

16 ‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this section, 

17 the judge must be satisfied, when the license is for— 

18 ‘‘(1) a vessel, that the vessel is seaworthy and properly equipped for 

19 the business of saving property shipwrecked and in distress; or 

20 ‘‘(2) a master, that the master is trustworthy and innocent of any 

21 fraud or misconduct related to property shipwrecked or saved on the 

22 coast. 

23 ‘‘§ 80103. Property on Florida coast to be taken to port of 

24 entry 

25 ‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or a key or 

26 shoal, on the coast of Florida and within the jurisdiction of the United 

27 States, shall be brought to a port of entry of the United States. 

28 ‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property de29 scribed in subsection (a) to a foreign port may be seized by, and forfeited 

30 to, the United States Government. A forfeiture under this subsection ac31 crues half to the informer and half to the Government. 

32 ‘‘§ 80104. Salvaging operations by foreign vessels 

33 ‘‘(a) PROHIBITION.—Except as provided in this section or section 80105 

34 of this title, a foreign vessel may not, under penalty of forfeiture, engage 

35 in salvaging operations on the Atlantic or Pacific coast of the United States, 

36 in any portion of the Great Lakes or their connecting or tributary waters, 

37 including any portion of the Saint Lawrence River through which the inter38 national boundary line extends, or in territorial waters of the United States 

39 on the Gulf of Mexico. 

40 ‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary of 

41 Homeland Security may authorize a foreign vessel to engage in salvaging 
245 

•HR 1442 IH 

1 operations in a particular locality if, on investigation, the Secretary is satis2 fied that there is not available in that locality a suitable vessel that is— 

3 ‘‘(1) owned only by citizens of the United States (including a 

4 Bowaters corporation under section 12118 of this title); and 

5 ‘‘(2) documented under chapter 121 of this title or numbered under 

6 chapter 123 of this title. 

7 ‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does not pro8 hibit or restrict assistance to vessels or salvaging operations authorized by 

9 treaty, including— 

10 ‘‘(1) article II of the Treaty between the United States and Great 

11 Britain concerning reciprocal rights for United States and Canada in 

12 the conveyance of prisoners and wrecking and salvage, signed at Wash13 ington, May 18, 1908 (35 Stat. 2036); or 

14 ‘‘(2) the Treaty between the United States of America and Mexico 

15 to facilitate assistance to and salvage of vessels in territorial waters, 

16 signed at Mexico City, June 13, 1935 (49 Stat. 3359). 

17 ‘‘§ 80105. Canadian vessels aiding vessels in United States 

18 waters 

19 ‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment may give 

20 aid to Canadian or other vessels and property wrecked, disabled, or in dis21 tress in the waters of the United States contiguous to Canada, including— 

22 ‘‘(1) the canal and improvement of the waters between Lake Erie 

23 and Lake Huron; and 

24 ‘‘(2) the Saint Marys River and canal. 

25 ‘‘(b) RECIPROCITY.—This section does not apply after the President pro26 claims that privileges reciprocal to those under subsection (a) have been 

27 withdrawn or rendered inoperative by the Government of Canada. 

28 ‘‘§ 80106. International agreement on derelicts 

29 ‘‘The President may make an international agreement with other govern30 ments interested in the navigation of the North Atlantic Ocean, providing 

31 for the reporting, marking, and removal of dangerous wrecks, derelicts, and 

32 other menaces to navigation outside the coast waters of the countries bor33 dering the North Atlantic Ocean. 

34 ‘‘§ 80107. Salvors of life to share in remuneration 

35 ‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who gave aid 

36 following an accident giving rise to salvage, is entitled to a fair share of 

37 the payment awarded to the salvor for salvaging the vessel or other property 

38 or preventing or minimizing damage to the environment. 

39 ‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remuneration for 

40 aid or salvage services is not affected by common ownership of the vessels 

41 giving and receiving the aid or salvage services. 
246 

•HR 1442 IH 

1 ‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover remu2 neration for giving aid or salvage services must be brought within 2 years 

3 after the date the aid or salvage services were given, unless the court in 

4 which the action is brought is satisfied that during that 2-year period there 

5 had not been a reasonable opportunity to seize the aided or salvaged vessel 

6 within the jurisdiction of the court or within the territorial waters of the 

7 country of the plaintiff’s residence or principal place of business. 

8 ‘‘(d) NONAPPLICATION.—This section does not apply to a vessel of war 

9 or a vessel owned by the United States Government appropriated only to 

10 a public service. 

11 ‘‘CHAPTER 803—ICE AND DERELICTS 

‘‘Sec. 

‘‘80301. International agreements. 

‘‘80302. Patrol services. 

‘‘80303. Speed of vessel in ice region. 

12 ‘‘§ 80301. International agreements 

13 ‘‘(a) GENERAL AUTHORITY.—The President may make agreements with 

14 interested maritime countries to— 

15 ‘‘(1) maintain in the North Atlantic Ocean a service of ice patrol, 

16 of study and observation of ice and current conditions, and of assist17 ance to vessels and their crews requiring assistance within the limits 

18 of the patrol; 

19 ‘‘(2) maintain a service of study and observation of ice and current 

20 conditions in the waters affecting the set and drift of ice in the North 

21 Atlantic Ocean; and 

22 ‘‘(3) take all practicable steps to ensure the destruction or removal 

23 of derelicts in the northern part of the Atlantic Ocean, east of the line 

24 drawn from Cape Sable to a point in latitude 34 degrees north, lon25 gitude 70 degrees west, if the destruction or removal is necessary. 

26 ‘‘(b) PAYMENT BETWEEN COUNTRIES.—The President may include in an 

27 agreement under subsection (a) a provision for— 

28 ‘‘(1) payment to the United States Government by other countries 

29 for their proportionate share of the expense of maintaining the services; 

30 or 

31 ‘‘(2) contribution by the Government for its proportionate share if 

32 the agreement provides for another country to maintain the services. 

33 ‘‘§ 80302. Patrol services 

34 ‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made under sec35 tion 80301 of this title provide otherwise, an ice patrol shall be maintained 

36 during the entire ice season in guarding the southeastern, southern, and 

37 southwestern limits of the region of icebergs in the vicinity of the Grand 

38 Banks of Newfoundland. The patrol shall inform trans-Atlantic and other 
247 

•HR 1442 IH 

1 passing vessels by radio and other available means of the ice conditions and 

2 the extent of the dangerous region. During the ice season, there shall be 

3 maintained a service of study of ice and current conditions, a service of pro4 viding assistance to vessels and crews requiring assistance, and a service of 

5 removing and destroying derelicts. Any of these services may be maintained 

6 during the remainder of the year as may be advisable. 

7 ‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn any vessel 

8 known to be approaching a dangerous area and recommend safe routes. 

9 ‘‘(c) RECORDING AND REPORTING INCIDENTS.— 

10 ‘‘(1) RECORDING.—An ice patrol vessel shall record the name of a 

11 vessel and the facts of the case when the patrol observes or knows that 

12 the vessel— 

13 ‘‘(A) is on other than a regular recognized or advertised route 

14 crossing the North Atlantic Ocean; 

15 ‘‘(B) has crossed the fishing banks of Newfoundland north of 

16 latitude 43 degrees north during the fishing season; or 

17 ‘‘(C) has passed through regions known or believed to be endan18 gered by ice when proceeding to and from ports of North America. 

19 ‘‘(2) REPORTING.—The name of the vessel and all pertinent informa20 tion about the incident shall be reported to the government of the coun21 try to which the vessel belongs if that government requests. 

22 ‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard, under 

23 the direction of the Secretary of the department in which the Coast Guard 

24 is operating, shall carry out the services provided for in this section and 

25 shall assign necessary vessels, material, and personnel of the Coast Guard. 

26 On request of such Secretary, the head of an agency may detail personnel, 

27 lend or contribute material or equipment, or otherwise assist in carrying out 

28 the services provided for in this section. 

29 ‘‘(e) ANNUAL REPORT.—The Commandant shall publish an annual report 

30 of the activities of the services provided for in this section. A copy of the 

31 report shall be provided to each interested foreign government and to each 

32 agency assisting in the work. 

33 ‘‘§ 80303. Speed of vessel in ice region 

34 ‘‘(a) REQUIREMENT.—The master of a vessel of the United States, when 

35 ice is reported on or near the vessel’s course, shall proceed at a moderate 

36 speed or change the course of the vessel to go well clear of the danger zone. 

37 ‘‘(b) CIVIL PENALTY.—A master violating this section is liable to the 

38 United States Government for a civil penalty of not more than $500. 

39 ‘‘CHAPTER 805—SAFE CONTAINERS FOR 

40 INTERNATIONAL CARGO 

‘‘Sec. 

‘‘80501. Definitions. 
248 

•HR 1442 IH 

‘‘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. 

1 ‘‘§ 80501. Definitions 

2 ‘‘In this chapter: 

3 ‘‘(1) CONTAINER.—The term ‘container’ has the meaning given that 

4 term in the Convention. 

5 ‘‘(2) CONVENTION.—The term ‘Convention’ means the International 

6 Convention for Safe Containers, and its annexes, done at Geneva, Swit7 zerland, December 2, 1972. 

8 ‘‘(3) INTERNATIONAL TRANSPORT.—The term ‘international trans9 port’ means the transportation of a container between— 

10 ‘‘(A) a place in a foreign country and a place in the jurisdiction 

11 of the United States; or 

12 ‘‘(B) two places outside the United States by United States car13 riers. 

14 ‘‘(4) OWNER.—The term ‘owner’ includes the lessee or bailee of a 

15 container if a written lease or bailment provides for the lessee or bailee 

16 to exercise the owner’s responsibility for maintaining and examining 

17 the container. 

18 ‘‘(5) SAFETY APPROVAL PLATE.—The term ‘safety approval plate’ 

19 has the meaning given that term in annex I of the Convention. 

20 ‘‘§ 80502. Application of Convention 

21 ‘‘The Convention applies to an owner of a container used in international 

22 transport if the owner is domiciled or has its principal office in the United 

23 States. 

24 ‘‘§ 80503. General authority of the Secretary 

25 ‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast 

26 Guard is operating shall carry out the Convention and this chapter in the 

27 United States. 

28 ‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations to carry 

29 out this chapter. The regulations shall— 

30 ‘‘(1) establish procedures for testing, inspecting, and initially approv31 ing containers and designs for containers, including procedures for at32 taching, invalidating, and removing safety approval plates for con33 tainers; 

34 ‘‘(2) establish procedures to be followed by the owners of containers 

35 for the periodic examination of containers as provided in the Conven36 tion; and 
249 

•HR 1442 IH 

1 ‘‘(3) provide a method for developing, collecting, and disseminating 

2 information about container safety and the international transport of 

3 containers. 

4 ‘‘(c) SAFETY APPROVAL PLATES.—If the owner of a container without a 

5 safety approval plate establishes that the container satisfies the standards 

6 of the Convention, the Secretary may authorize a safety approval plate to 

7 be attached to the container. 

8 ‘‘(d) SCHEDULE OF FEES.—The Secretary may prescribe a schedule of 

9 fees for services performed by the Secretary, or by a person delegated au10 thority under section 80506 of this title, for the testing, inspection, and ini11 tial approval of containers and container designs. 

12 ‘‘(e) ENCOURAGING INTERMODAL TRANSPORT.—To the maximum extent 

13 possible, the Secretary shall encourage the development and use of inter14 modal transport, using containers built to facilitate economical, safe, and 

15 expeditious handling of containerized cargo without intermediate reloading 

16 when it is being transported over land, air, and sea areas. 

17 ‘‘§ 80504. Approval and examination 

18 ‘‘(a) DOMICILE AND PRINCIPAL OFFICE IN UNITED STATES.—A con19 tainer owner domiciled and having its principal office in the United States 

20 shall have the container— 

21 ‘‘(1) approved initially under procedures prescribed by the Secretary 

22 of the department in which the Coast Guard is operating or by the gov23 ernment of another country that is a party to the Convention; and 

24 ‘‘(2) examined periodically as provided in the Convention under pro25 cedures prescribed by the Secretary. 

26 ‘‘(b) DOMICILE OR PRINCIPAL OFFICE IN UNITED STATES.—A container 

27 owner domiciled or having its principal office in the United States shall have 

28 the container— 

29 ‘‘(1) approved initially under procedures prescribed by the Secretary 

30 or by the government of another country that is a party to the Conven31 tion; and 

32 ‘‘(2) examined periodically as provided in the Convention, under pro33 cedures prescribed by the government of the country in which the 

34 owner is domiciled or has its principal office, as long as that country 

35 is a party to the Convention. 

36 ‘‘(c) NEITHER DOMICILE NOR PRINCIPAL OFFICE IN UNITED STATES.— 

37 A container owner neither domiciled nor having its principal office in the 

38 United States or another country that is a party to the Convention may 

39 submit a container for initial approval and periodic examination under pro40 cedures prescribed by the Secretary. 
250 

•HR 1442 IH 

1 ‘‘§ 80505. Enforcement 

2 ‘‘(a) IN GENERAL.—To enforce the Convention, this chapter, and regula3 tions prescribed under this chapter, the Secretary of the department in 

4 which the Coast Guard is operating may— 

5 ‘‘(1) examine, or require to be examined, containers in international 

6 transport; 

7 ‘‘(2) approve designs for containers; 

8 ‘‘(3) inspect and test containers being manufactured; 

9 ‘‘(4) issue a detention order removing or excluding a container from 

10 service until the container owner satisfies the Secretary that the con11 tainer meets the standards of the Convention, if the container— 

12 ‘‘(A) does not have a safety approval plate attached to it; or 

13 ‘‘(B) has a safety approval plate attached but there is signifi14 cant evidence that the container is in a condition that creates an 

15 obvious risk to safety; 

16 ‘‘(5) take other appropriate action, including issuing necessary or17 ders, to remove a container from service or restrict its use if the con18 tainer is not in compliance with the Convention, this chapter, or regula19 tions prescribed under this chapter, but does not present an obvious 

20 risk to safety; and 

21 ‘‘(6) allow a container found to be unsafe or without a safety ap22 proval plate to be moved to another location for repair or other disposi23 tion, under restrictions consistent with the intent of the Convention. 

24 ‘‘(b) PAYMENT OF EXPENSES.— 

25 ‘‘(1) EXAMINATION.—The owner of a container involved in an action 

26 by the Secretary under this section related to an examination of the 

27 container shall pay or reimburse the Secretary for the expenses arising 

28 from that action, except for the costs of routine examinations of the 

29 container or a safety approval plate. 

30 ‘‘(2) TESTING, INSPECTION, AND INITIAL APPROVAL.—The owner of 

31 a container submitted to the procedure established by the Secretary for 

32 testing, inspection, and initial approval, and the manufacturer of a con33 tainer that submits a design to the procedure established by the Sec34 retary for testing, inspection, and initial approval, shall pay or reim35 burse the Secretary for the expenses arising from the testing, inspec36 tion, or approval. 

37 ‘‘(3) CREDIT TO APPROPRIATION.—Amounts received by the Sec38 retary as reimbursement shall be credited to the appropriation for oper39 ating expenses of the Coast Guard. 

40 ‘‘(c) PRESUMPTION BASED ON SAFETY APPROVAL PLATE.—A container 

41 bearing a safety approval plate authorized by a country that is a party to 
251 

•HR 1442 IH 

1 the Convention is presumed to be in a safe condition unless there is signifi2 cant evidence that the container is in a condition that creates an obvious 

3 risk to safety. 

4 ‘‘(d) NOTICE OF ORDERS.— 

5 ‘‘(1) IN GENERAL.—When the Secretary issues a detention or other 

6 order under this section, the Secretary promptly shall notify in writ7 ing— 

8 ‘‘(A) the owner of the container; 

9 ‘‘(B) the owner’s agent; or 

10 ‘‘(C) if the identity of the owner is not apparent from the con11 tainer or shipping documents, the custodian. 

12 ‘‘(2) INFORMATION TO INCLUDE.—The notification shall identify the 

13 container involved, give the location of the container, and describe the 

14 condition or situation giving rise to the order. 

15 ‘‘(e) DURATION OF ORDERS.—An order issued by the Secretary under 

16 this section remains in effect until— 

17 ‘‘(1) the Secretary declares the container to be in compliance with 

18 the standards of the Convention; or 

19 ‘‘(2) the container is removed permanently from service. 

20 ‘‘(f) NOTICE OF DEFECTIVE CONTAINER TO COUNTRY ISSUING SAFETY

21 APPROVAL PLATE.—If the Secretary has reason to believe that a container 

22 bearing a safety approval plate issued by another country was defective at 

23 the time of approval, the Secretary shall notify that country. 

24 ‘‘§ 80506. Delegation of authority 

25 ‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast 

26 Guard is operating may delegate to any person, including a public or private 

27 agency or nonprofit organization, authority to grant initial approval for con28 tainers and designs and to attach safety approval plates. 

29 ‘‘(b) REGULATIONS.—Before making a delegation under this section, the 

30 Secretary shall prescribe regulations establishing— 

31 ‘‘(1) criteria to be followed in selecting a person to whom authority 

32 is to be delegated; 

33 ‘‘(2) a detailed description of the duties and powers to be carried out 

34 by the person to whom authority is delegated, including the records the 

35 person shall keep; and 

36 ‘‘(3) the review the Secretary will conduct to decide whether the per37 son is carrying out the delegated duties and powers properly. 

38 ‘‘(c) INSPECTION OF RECORDS.—A person delegated authority under this 

39 section shall make available to the Secretary for inspection, on request, 

40 records the person is required to keep. 
252 

•HR 1442 IH 

1 ‘‘(d) PENALTIES AND ORDERS.—A person delegated authority under this 

2 section may not— 

3 ‘‘(1) assess or collect, or attempt to assess or collect, a penalty for 

4 violation of the Convention, this chapter, or an order issued by the Sec5 retary under this chapter; or 

6 ‘‘(2) issue or attempt to issue a detention or other order. 

7 ‘‘(e) PUBLICATION.—The Secretary shall publish in the Federal Register 

8 or other appropriate publication— 

9 ‘‘(1) the name and address of each person to whom authority is dele10 gated; 

11 ‘‘(2) the duties and powers delegated; and 

12 ‘‘(3) the period of the delegation. 

13 ‘‘(f) REVOCATION.—The Secretary may revoke a delegation of authority 

14 under this section at any time. 

15 ‘‘§ 80507. Employee protection 

16 ‘‘(a) PROHIBITION.—A person may not discharge or discriminate against 

17 an employee because the employee has reported the existence of an unsafe 

18 container or a violation of this chapter or a regulation prescribed under this 

19 chapter. 

20 ‘‘(b) COMPLAINTS.—An employee alleging to have been discharged or dis21 criminated against in violation of subsection (a) may file a complaint with 

22 the Secretary of Labor. The complaint must be filed within 60 days after 

23 the violation. 

24 ‘‘(c) ENFORCEMENT.—The Secretary of Labor may investigate the com25 plaint. If the Secretary of Labor finds there has been a violation, the Sec26 retary of Labor may bring a civil action in an appropriate district court of 

27 the United States. The court has jurisdiction to restrain violations of sub28 section (a) and order appropriate relief, including reinstatement of the em29 ployee to the employee’s former position with back pay. 

30 ‘‘(d) NOTICE TO COMPLAINANT.—Within 30 days after receiving a com31 plaint under this section, the Secretary of Labor shall notify the complain32 ant of the intended action on the complaint. 

33 ‘‘§ 80508. Amendments to Convention 

34 ‘‘(a) PROPOSALS BY UNITED STATES.—The Secretary of State, with the 

35 concurrence of the Secretary of the department in which the Coast Guard 

36 is operating, may propose amendments to the Convention or request a con37 ference for amending the Convention as provided in article IX of the Con38 vention. 

39 ‘‘(b) PROPOSALS BY OTHER COUNTRIES.—An amendment communicated 

40 to the United States under article IX(2) of the Convention may be accepted 

41 for the United States by the President, with the advice and consent of the 
253 

•HR 1442 IH 

1 Senate. The President may declare that the United States does not accept 

2 an amendment. 

3 ‘‘(c) AMENDMENTS TO ANNEXES.— 

4 ‘‘(1) IN GENERAL.—The Secretary of State, with the concurrence of 

5 the Secretary of the department in which the Coast Guard is oper6 ating— 

7 ‘‘(A) may propose amendments to the annexes to the Conven8 tion; 

9 ‘‘(B) may propose a conference for amending annexes to the 

10 Convention; and 

11 ‘‘(C) shall consider and act on amendments to the annexes to 

12 the Convention adopted by the Maritime Safety Committee of the 

13 International Maritime Organization and communicated to the 

14 United States under article X(2) of the Convention. 

15 ‘‘(2) ACTION FOLLOWING APPROVAL OR OBJECTION.—If a proposed 

16 amendment to an annex is approved by the United States, the amend17 ment shall enter into force as provided in article X of the Convention. 

18 If a proposed amendment is objected to, the Secretary of State prompt19 ly shall communicate the objection as provided in article X(3) of the 

20 Convention. 

21 ‘‘(d) APPOINTMENT OF ARBITRATOR.—The Secretary of State, with the 

22 concurrence of the Secretary of the department in which the Coast Guard 

23 is operating, shall appoint an arbitrator when one is required to resolve a 

24 dispute within the meaning of article XIII of the Convention. 

25 ‘‘§ 80509. Civil penalty 

26 ‘‘(a) IN GENERAL.—An owner, agent, or custodian who has been notified 

27 of an order issued under section 80505 of this title and fails to take reason28 able and prompt action to prevent or stop a container subject to the order 

29 from being moved in violation of the order is liable to the United States 

30 Government for a civil penalty of not more than $5,000 for each container 

31 moved. Each day the container remains in service while the order is in effect 

32 is a separate violation. 

33 ‘‘(b) ASSESSMENT AND COLLECTION.— 

34 ‘‘(1) IN GENERAL.—After notice and an opportunity for a hearing, 

35 the Secretary of the department in which the Coast Guard is operating 

36 shall assess and collect any penalty under this section. 

37 ‘‘(2) FACTORS TO CONSIDER.—In determining the amount of the 

38 penalty, the Secretary shall consider the gravity of the violation, the 

39 hazards involved, and the record of the person charged with respect to 

40 violations of the Convention, this chapter, or regulations prescribed 

41 under this chapter. 
254 

•HR 1442 IH 

1 ‘‘(3) REMISSION, MITIGATION, OR COMPROMISE.—The Secretary may 

2 remit, mitigate, or compromise a penalty under this section. 

3 ‘‘(4) ENFORCEMENT.—If a person fails to pay a penalty under this 

4 section, the Secretary shall refer the matter to the Attorney General 

5 for collection in an appropriate district court of the United States.’’. 

6 SEC. 12. MARITIME ADMINISTRATION. 

7 Section 109 of title 49, United States Code, is amended to read as fol8 lows: 

9 ‘‘§ 109. Maritime Administration 

10 ‘‘(a) ORGANIZATION.—The Maritime Administration is an administration 

11 in the Department of Transportation. 

12 ‘‘(b) MARITIME ADMINISTRATOR.—The head of the Maritime Administra13 tion is the Maritime Administrator, who is appointed by the President by 

14 and with the advice and consent of the Senate. The Administrator shall re15 port directly to the Secretary of Transportation and carry out the duties 

16 prescribed by the Secretary. 

17 ‘‘(c) DEPUTY MARITIME ADMINISTRATOR.—The Maritime Administration 

18 shall have a Deputy Maritime Administrator, who is appointed in the com19 petitive service by the Secretary, after consultation with the Administrator. 

20 The Deputy Administrator shall carry out the duties prescribed by the Ad21 ministrator. The Deputy Administrator shall be Acting Administrator dur22 ing the absence or disability of the Administrator and, unless the Secretary 

23 designates another individual, during a vacancy in the office of Adminis24 trator. 

25 ‘‘(d) DUTIES AND POWERS VESTED IN SECRETARY.—All duties and pow26 ers of the Maritime Administration are vested in the Secretary. 

27 ‘‘(e) REGIONAL OFFICES.—The Maritime Administration shall have re28 gional offices for the Atlantic, Gulf, Great Lakes, and Pacific port ranges, 

29 and may have other regional offices as necessary. The Secretary shall ap30 point a qualified individual as Director of each regional office. The Sec31 retary shall carry out appropriate activities and programs of the Maritime 

32 Administration through the regional offices. 

33 ‘‘(f) INTERAGENCY AND INDUSTRY RELATIONS.—The Secretary shall es34 tablish and maintain liaison with other agencies, and with representative 

35 trade organizations throughout the United States, concerned with the trans36 portation of commodities by water in the export and import foreign com37 merce of the United States, for the purpose of securing preference to vessels 

38 of the United States for the transportation of those commodities. 

39 ‘‘(g) DETAILING OFFICERS FROM ARMED FORCES.—To assist the Sec40 retary in carrying out duties and powers relating to the Maritime Adminis41 tration, not more than five officers of the armed forces may be detailed to 
255 

•HR 1442 IH 

1 the Secretary at any one time, in addition to details authorized by any other 

2 law. During the period of a detail, the Secretary shall pay the officer an 

3 amount that, when added to the officer’s pay and allowances as an officer 

4 in the armed forces, makes the officer’s total pay and allowances equal to 

5 the amount that would be paid to an individual performing work the Sec6 retary considers to be of similar importance, difficulty, and responsibility as 

7 that performed by the officer during the detail. 

8 ‘‘(h) CONTRACTS AND AUDITS.— 

9 ‘‘(1) CONTRACTS.—In the same manner that a private corporation 

10 may make a contract within the scope of its authority under its char11 ter, the Secretary may make contracts for the United States Govern12 ment and disburse amounts to— 

13 ‘‘(A) carry out the Secretary’s duties and powers under this sec14 tion and subtitle V of title 46; and 

15 ‘‘(B) protect, preserve, and improve collateral held by the Sec16 retary to secure indebtedness. 

17 ‘‘(2) AUDITS.—The financial transactions of the Secretary under 

18 paragraph (1) shall be audited by the Comptroller General. The Comp19 troller General shall allow credit for an expenditure shown to be nec20 essary because of the nature of the business activities authorized by 

21 this section or subtitle V of title 46. At least once a year, the Comp22 troller General shall report to Congress any departure by the Secretary 

23 from this section or subtitle V of title 46. 

24 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.— 

25 ‘‘(1) IN GENERAL.—Except as otherwise provided in this subsection, 

26 there are authorized to be appropriated such amounts as may be nec27 essary to carry out the duties and powers of the Secretary relating to 

28 the Maritime Administration. 

29 ‘‘(2) LIMITATIONS.—Only those amounts specifically authorized by 

30 law may be appropriated for the use of the Maritime Administration 

31 for— 

32 ‘‘(A) acquisition, construction, or reconstruction of vessels; 

33 ‘‘(B) construction-differential subsidies incident to the construc34 tion, reconstruction, or reconditioning of vessels; 

35 ‘‘(C) costs of national defense features; 

36 ‘‘(D) payments of obligations incurred for operating-differential 

37 subsidies; 

38 ‘‘(E) expenses necessary for research and development activities, 

39 including reimbursement of the Vessel Operations Revolving Fund 

40 for losses resulting from expenses of experimental vessel oper41 ations; 
256 

•HR 1442 IH 

1 ‘‘(F) the Vessel Operations Revolving Fund; 

2 ‘‘(G) National Defense Reserve Fleet expenses; 

3 ‘‘(H) expenses necessary to carry out part B of subtitle V of 

4 title 46; and 

5 ‘‘(I) other operations and training expenses related to the devel6 opment of waterborne transportation systems, the use of water7 borne transportation systems, and general administration. 

8 ‘‘(3) TRAINING VESSELS.—Amounts may not be appropriated for the 

9 purchase or construction of training vessels for State maritime acad10 emies unless the Secretary has approved a plan for sharing training 

11 vessels between State maritime academies.’’. 

12 SEC. 13. AMENDMENTS RELATING TO MARITIME SECURITY ACT OF 

13 2003. 

14 (a) AMENDMENTS TO CHAPTER 531.—Chapter 531 of title 46, United 

15 States Code, is amended as follows: 

16 (1) In section 53102— 

17 (A) in the headings of paragraphs (1), (2), and (4) of sub18 section (c), strike ‘‘SECTION 2’’ and substitute ‘‘SECTION 50501’’; 

19 (B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and (B), and 

20 (4)(B), strike ‘‘section 2 of the Shipping Act, 1916 (46 U.S.C. 

21 App. 802)’’ and substitute ‘‘section 50501 of this title’’; 

22 (C) in subsection (d), strike ‘‘the first section of Public Law 

23 81–891 (64 Stat. 1120; 46 U.S.C. App. note prec. 3)’’ and sub24 stitute ‘‘section 501 of this title’’; and 

25 (D) in subsection (e)(1)— 

26 (i) strike ‘‘a documented vessel (as that term is defined in 

27 section 12101 of this title)’’ and substitute ‘‘documented 

28 under chapter 121 of this title,’’; and 

29 (ii) in subparagraph (B), strike ‘‘a documented vessel (as 

30 defined in that section)’’ and substitute ‘‘documented under 

31 chapter 121’’. 

32 (2) In section 53103(c)— 

33 (A) in the heading of paragraph (1)(C), strike ‘‘SECTION 2’’ and 

34 substitute ‘‘SECTION 50501’’; 

35 (B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), strike ‘‘section 

36 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and substitute 

37 ‘‘section 50501 of this title’’; 

38 (C) in paragraph (1)(B), strike ‘‘subparagraphs’’ and substitute 

39 ‘‘subparagraph’’; and 

40 (D) in paragraph (3)(B), strike ‘‘agreement’’ and substitute 

41 ‘‘agreements’’. 
257 

•HR 1442 IH 

1 (3) In section 53104— 

2 (A) in subsection (c)(3)(B)(ii)(I) and (II), strike ‘‘section 2 of 

3 the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and substitute 

4 ‘‘section 50501 of this title’’; 

5 (B) in subsection (e)(2), strike ‘‘section 9 of the Shipping Act, 

6 1916 (46 U.S.C. App. 808)’’ and substitute ‘‘section 56101 of this 

7 title’’; and 

8 (C) in subsection (e)(3), strike ‘‘section 902 of the Merchant 

9 Marine Act, 1936 (46 U.S.C. App. 1242)’’ and ‘‘section 902 of 

10 such Act’’ and substitute ‘‘chapter 563 of this title’’ and ‘‘chapter 

11 563’’, respectively. 

12 (4) In section 53105— 

13 (A) in subsection (a)(1)(A), strike ‘‘section 12105’’ and sub14 stitute ‘‘section 12111’’; and 

15 (B) in subsection (f), strike ‘‘approve’’ and substitute ‘‘ap16 proves’’. 

17 (5) In section 53106— 

18 (A) in subsection (d)(1), strike ‘‘section 2631 of title 10, United 

19 States Code, the Act of March 26, 1934 (46 U.S.C. App. 1241– 

20 1), section 901(a), 901(b), or 901b of the Merchant Marine Act, 

21 1936 (46 U.S.C. App. 1241(a), 1241(b), or 1241f)’’ and sub22 stitute ‘‘section 55302(a), 55304, 55305, or 55314 of this title, 

23 section 2631 of title 10’’; 

24 (B) in subsection (d)(2), strike ‘‘section 901(a), 901(b), or 901b 

25 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a), 

26 1241(b), or 1241f),’’ and substitute ‘‘section 55302(a), 55305, or 

27 55314 of this title’’; and 

28 (C) in subsection (e)(2), strike ‘‘section 2(c) of the Shipping 

29 Act, 1916 (46 U.S.C. App. 802(c))’’ and substitute ‘‘section 

30 50501 of this title, applying the 75 percent ownership requirement 

31 of that section’’. 

32 (6) In section 53107(f)— 

33 (A) strike ‘‘section 2631 of title 10, United States Code, the Act 

34 of March 26, 1934 (46 U.S.C. App. 1241–1), section 901(a), 

35 901(b), or 901b of the Merchant Marine Act, 1936 (46 U.S.C. 

36 App. 1241(a), 1241(b), or 1241f)’’ and substitute ‘‘section 

37 55302(a), 55304, 55305, or 55314 of this title, section 2631 of 

38 title 10’’; and 

39 (B) strike ‘‘section 2631 of title 10, United States Code, the 

40 Act of March 26, 1934 (46 U.S.C. App. 1241–1), and sections 

41 901(a), 901(b), and 901b of the Merchant Marine Act, 1936 (46 
258 

•HR 1442 IH 

1 U.S.C. App. 1241(a), 1241(b), and 1241b)’’ and substitute ‘‘sec2 tions 55302(a), 55304, 55305, and 55314 of this title and section 

3 2631 of title 10’’. 

4 (7) In section 53108(b), strike ‘‘section 901(b)(1) of the Merchant 

5 Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))’’ and substitute ‘‘sec6 tion 55305(a) of this title’’. 

7 (b) OTHER CONFORMING PROVISIONS.—If this Act is enacted prior to 

8 October 1, 2005, then— 

9 (1) until that date, the reference in section 12111(c)(3) of title 46, 

10 United States Code, as enacted by this Act, to ‘‘chapter 531 of this 

11 title’’ is deemed instead to be a reference to ‘‘subtitle B of title VI of 

12 the Merchant Marine Act, 1936’’; and 

13 (2) section 3534(b)(1) of the Maritime Security Act of 2003 (Public 

14 Law 108–136, 117 Stat. 1818) is repealed. 

15 SEC. 14. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS. 

16 (a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46 App. U.S.C. 

17 111, 123) is amended by striking ‘‘or tonnage tax’’. 

18 (b) Section 809(a) of the Merchant Marine Act, 1936 (46 App. U.S.C. 

19 1213(a)), is amended by striking ‘‘and section 211(a)’’. 

20 SEC. 15. ADDITIONAL AMENDMENTS TO TITLE 46. 

21 Title 46, United States Code, is amended as follows: 

22 (1) The analysis of subtitle II is amended as follows: 

23 (A) In each chapter item, capitalize the first letter of each word 

24 containing 4 or more letters. 

25 (B) Strike the item for chapter 39. 

26 (C) The item for chapter 45 is amended to read as follows: 

‘‘45. Uninspected Commercial Fishing Industry Vessels .................... 4501’’. 

27 (2) Section 2101 is amended as follows: 

28 (A) Paragraphs (2), (3), (3a), (6), (10), (10a), (12), (17b), 

29 (36), (41), (44), (45), and (46) are repealed. 

30 (B) In paragraph (8a), insert ‘‘Prevention’’ after ‘‘Abuse’’. 

31 (C) In paragraph (18), strike ‘‘those’’. 

32 (D) In paragraph (34)— 

33 (i) strike ‘‘, except in part H,’’; and 

34 (ii) strike ‘‘head’’ and substitute ‘‘Secretary’’. 

35 (3) In section 2102— 

36 (A) in subsection (a)(2), strike ‘‘section 2101(36) and (44)’’ 

37 and substitute ‘‘chapter 1’’; and 

38 (B) in subsection (b), strike ‘‘West’’ and ‘‘East’’ and substitute 

39 ‘‘west’’ and ‘‘east’’, respectively. 
259 

•HR 1442 IH 

1 (4) In section 2106, strike ‘‘a district court of the United States’’ 

2 and substitute ‘‘the district court of the United States for any district’’. 

3 (5) Section 2108 is repealed. 

4 (6) In section 2110— 

5 (A) in subsection (a)(2), strike ‘‘part B of this title’’ and sub6 stitute ‘‘part B of this subtitle’’; 

7 (B) in subsection (b)(2)(A)(iii), strike the period at the end and 

8 substitute ‘‘; and’’; 

9 (C) in subsection (b)(5), strike ‘‘fees’’ and substitute ‘‘fee’’; 

10 (D) In subsection (f), strike ‘‘Secretary of the Treasury shall 

11 deny the clearance required by section 4197 of the Revised Stat12 utes of the United States (46 App. U.S.C. 91)’’ and substitute 

13 ‘‘Secretary of Homeland Security shall deny the clearance required 

14 by section 60105 of this title’’; and 

15 (E) In subsection (j), strike ‘‘state’’ and substitute ‘‘State’’. 

16 (7) In section 2301, strike ‘‘section’’ and substitute ‘‘sections 2304 

17 and’’. 

18 (8) In section 2304— 

19 (A) insert the paragraph designation ‘‘(1)’’ after ‘‘(a)’’; and 

20 (B) insert at the end of subsection (a) the following new para21 graph: 

22 ‘‘(2) Paragraph (1) does not apply to a vessel of war or a vessel owned 

23 by the United States Government appropriated only to a public service.’’. 

24 (9) In section 2306(a)(2), strike ‘‘section 212(A) of the Merchant 

25 Marine Act, 1936 (46 App. U.S.C. 1122a),’’ and substitute ‘‘section 

26 50113 of this title’’. 

27 (10) In section 3205(d), strike ‘‘Secretary of the Treasury shall 

28 withhold or revoke the clearance required by section 4197 of the Re29 vised Statutes (46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of 

30 Homeland Security shall withhold or revoke the clearance required by 

31 section 60105 of this title’’. 

32 (11) In section 3302— 

33 (A) in subsection (b), insert a comma after ‘‘fishing vessel’’; 

34 (B) in subsection (j)(2)(B), strike ‘‘section 1304 of the Mer35 chant Marine Act, 1936 (46 App. U.S.C. 1295c)’’ and substitute 

36 ‘‘chapter 515 of this title’’; and 

37 (C) in subsection (l)(1)(C), strike ‘‘Inc..’’ and substitute ‘‘Inc.’’. 

38 (12) In section 3306(d), strike ‘‘section 1302(3) of the Merchant 

39 Marine Act, 1936 (46 App. U.S.C. 1295a(3))’’ and substitute ‘‘section 

40 51102 of this title’’. 

41 (13) In section 3318(f), strike the period after ‘‘felony’’. 
260 

•HR 1442 IH 

1 (14) In the analysis of chapter 37, the item for section 3719 is 

2 amended to read as follows: 

‘‘3719. Reduction of oil spills from single hull non-self-propelled tank vessels.’’. 

3 (15) In paragraphs (1)(C), (2), and (3) of section 3703a(c), strike 

4 ‘‘documentation under section 4136 of the Revised Statutes of the 

5 United States (46 App. U.S.C. 14)’’ and substitute ‘‘documentation as 

6 a wrecked vessel under section 12112 of this title’’. 

7 (16) In section 3704, strike ‘‘section 27 of the Merchant Marine Act, 

8 1920 (46 App. U.S.C. 883),’’ and substitute ‘‘chapter 551 of this 

9 title’’. 

10 (17) In section 3718(e)(1), strike ‘‘Secretary of the Treasury’’ and 

11 ‘‘section 4197 of the Revised Statutes of the United States (46 App. 

12 U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland Security’’ and 

13 ‘‘section 60105 of this title’’, respectively. 

14 (18) In section 4702, strike the subsection ‘‘(a)’’ designation. 

15 (19) In section 4705— 

16 (A) strike ‘‘subcontractor not’’ and substitute ‘‘subcontractor 

17 are not’’; 

18 (B) strike ‘‘(a)(1)’’ and substitute ‘‘(a)’’; 

19 (C) strike ‘‘(2) Paragraph (1)’’ and substitute ‘‘(b) Subsection 

20 (a)’’; 

21 (D) strike ‘‘(A)’’ and substitute ‘‘(1)’’; and 

22 (E) strike ‘‘(B)’’ and substitute ‘‘(2)’’. 

23 (20) In section 5113(b), strike ‘‘section 4197 of the Revised Statutes 

24 (46 App. U.S.C. 91)’’ and substitute ‘‘section 60105 of this title’’. 

25 (21) In section 6101, redesignate the second subsection (g) and sub26 section (h) as subsections (h) and (i), respectively. 

27 (22) In section 8103(a), strike ‘‘Only’’ and substitute ‘‘Except as 

28 otherwise provided in this title, only’’. 

29 (23) In section 9307(b)(2)(A), strike ‘‘The’’ and substitute ‘‘the’’. 

30 (24) In section 12503(a), in the matter before paragraph (1), strike 

31 ‘‘delegee’’ and substitute ‘‘delegate’’. 

32 (25) In section 13102(a), insert ‘‘(26 U.S.C. 9504)’’ after ‘‘Internal 

33 Revenue Code of 1986’’. 

34 (26) In section 14305(a)— 

35 (A) in paragraph (1), strike ‘‘and sections 12106(c) and 

36 12108(c)’’ and substitute ‘‘of this subtitle and section 12116’’; 

37 (B) in paragraph (5), strike ‘‘section 4283 of the Revised Stat38 utes of the United States (46 App. U.S.C. 183)’’ and substitute 

39 ‘‘section 30506 of this title’’; 
261 

•HR 1442 IH 

1 (C) in paragraph (6), strike ‘‘sections 27 and 27A of the Act 

2 of June 5, 1920 (46 App. U.S.C. 883 and 883–1)’’ and substitute 

3 ‘‘sections 12118 and 12132 of this title’’; and 

4 (D) in paragraph (7), strike ‘‘Act of July 14, 1956 (46 App. 

5 U.S.C. 883a)’’ and substitute ‘‘section 12139(b) of this title’’. 

6 (27) In section 31306(a), strike ‘‘section 9 or 37 of the Shipping 

7 Act, 1916 (46 App. U.S.C. 808, 835)’’ and substitute ‘‘section 56102 

8 or 56103 of this title’’. 

9 (28) In section 31308, strike ‘‘title XI of the Merchant Marine Act, 

10 1936 (46 App. U.S.C. 1271 et seq.)’’ and substitute ‘‘chapter 537 of 

11 this title’’. 

12 (29) In section 31322— 

13 (A) in subsection (a)(4)(A), strike ‘‘section 12102(c)’’ and sub14 stitute ‘‘section 12113(c)’’; 

15 (B) in subsection (a)(4)(E), strike ‘‘under section 12102(a)’’ 

16 and substitute ‘‘for purposes of documentation under section 

17 12103’’; and 

18 (C) in subsection (f)(2), strike ‘‘section 12102(c)’’ and sub19 stitute ‘‘section 12113(c)’’. 

20 (30) In section 31325(b)(3)(B), strike ‘‘section 9 or 37 of the Ship21 ping Act, 1936 (46 App. U.S.C. 808, 835)’’ and substitute ‘‘section 

22 56101 or 56102 of this title’’. 

23 (31) In section 31326(b)— 

24 (A) in paragraph (1), strike ‘‘title XI of the Merchant Marine 

25 Act, 1936 (46 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘chapter 

26 537 of this title,’’; and 

27 (B) in paragraph (2), strike ‘‘title XI of that Act’’ and sub28 stitute ‘‘chapter 537 of this title’’. 

29 (32) In section 31329— 

30 (A) in subsection (a)(1), strike ‘‘section 12102’’ and substitute 

31 ‘‘section 12103’’; and 

32 (B) in subsection (b)— 

33 (i) in paragraph (2), strike ‘‘section 902 of the Merchant 

34 Marine Act, 1936 (46 App. U.S.C. 1242)’’ and substitute 

35 ‘‘chapter 563 of this title’’; and 

36 (ii) in paragraph (3), strike ‘‘sale foreign within the terms 

37 of the first proviso of section 27 of the Merchant Marine Act, 

38 1920 (46 App. U.S.C. 883)’’ and substitute ‘‘sale to a person 

39 not a citizen of the United States under section 12132 of this 

40 title’’. 
262 

•HR 1442 IH 

1 (33)(A) Sections 70118 and 70119, as added by section 801(a) of 

2 the Coast Guard and Maritime Transportation Act of 2004 (Public 

3 Law 108–293, 118 Stat. 1078), are redesignated as sections 70117 

4 and 70118, respectively, and moved to appear immediately after section 

5 70116 of title 46, United States Code. 

6 (B) Sections 70117 and 70118, as added by section 802(a)(2) of 

7 such Act, are redesignated as sections 70120 and 70121, respectively, 

8 and moved to appear immediately after section 70119 of title 46, 

9 United States Code. 

10 (C) In section 70120(a) (as redesignated by subparagraph (B)), 

11 strike ‘‘section 70120’’ and substitute ‘‘section 70119’’. 

12 (D) In section 70121(a) (as redesignated by subparagraph (B))— 

13 (i) strike ‘‘section 70120’’ and substitute ‘‘section 70119’’; and 

14 (ii) strike ‘‘section 4197 of the Revised Statutes of the United 

15 States (46 U.S.C. App. 91)’’ and substitute ‘‘section 60105 of this 

16 title’’. 

17 (E) In the analysis of chapter 701, strike the items relating to sec18 tions 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.’’. 

19 SEC. 16. CONFORMING AMENDMENTS TO OTHER LAWS. 

20 (a) TITLE 10.—Title 10, United States Code, is amended as follows: 

21 (1) In section 374(b)(4)(A)(iv), strike ‘‘The Maritime Drug Law En22 forcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘Chapter 

23 705 of title 46’’. 

24 (2) In section 2218(d)(2), strike ‘‘sections 508 and 510 of the Mer25 chant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), shall be de26 posited in the Fund’’ and substitute ‘‘sections 57101–57104 and chap27 ter 573 of title 46’’. 

28 (3) In section 2350b(g)(2), strike ‘‘section 901(b) of the Merchant 

29 Marine Act, 1936 (46 U.S.C. App. 1241(b))’’ and substitute ‘‘section 

30 55305 of title 46’’. 

31 (4) In section 2645— 

32 (A) in subsection (c), strike ‘‘the second sentence of section 

33 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 

34 1288(a))’’ and substitute ‘‘section 53909(b) of title 46’’; 

35 (B) in subsection (h)(1), strike ‘‘title XII of the Merchant Ma36 rine Act, 1936 (46 U.S.C. App. 1281 et seq.),’’ and substitute 

37 ‘‘chapter 539 of title 46’’; and 
263 

•HR 1442 IH 

1 (C) in subsection (h)(2), strike ‘‘the first sentence of section 

2 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 

3 1288(a))’’ and substitute ‘‘section 53909(a) of title 46’’. 

4 (5) In section 5985, strike ‘‘section 1304 of the Merchant Marine 

5 Act, 1936 (46 U.S.C. App. 1295c),’’ and substitute ‘‘chapter 515 of 

6 title 46’’. 

7 (6) In section 7721(a), strike ‘‘the Act of March 3, 1925 (commonly 

8 referred to as the ‘Public Vessels Act’) (46 U.S.C. App. 781–790)’’ and 

9 substitute ‘‘chapter 311 of title 46’’. 

10 (b) TITLE 11.—Title 11, United States Code, is amended as follows: 

11 (1) In section 362(b)— 

12 (A) in paragraph (12), strike ‘‘section 207 or title XI of the 

13 Merchant Marine Act, 1936’’ and substitute ‘‘chapter 537 of title 

14 46 or section 109(h) of title 49’’; and 

15 (B) in paragraph (13), strike ‘‘section 207 or title XI of the 

16 Merchant Marine Act, 1936’’ and substitute ‘‘chapter 537 of title 

17 46’’. 

18 (2) In section 1110(a)(3)(A)(ii), strike ‘‘documented vessel (as de19 fined in section 30101(1) of title 46)’’ and substitute ‘‘vessel docu20 mented under chapter 121 of title 46’’. 

21 (c) TITLE 14.—Sections 821(b) and 823a(b) of title 14, United States 

22 Code, are each amended by striking paragraphs (3)–(5) and substituting the 

23 following: 

24 ‘‘(3) Section 30101 of title 46 (popularly known as the Admiralty 

25 Extension Act). 

26 ‘‘(4) Chapter 309 of title 46 (known as the Suits in Admiralty Act). 

27 ‘‘(5) Chapter 311 of title 46 (known as the Public Vessels Act).’’. 

28 (d) TITLE 18.—Title 18, United States Code, is amended as follows: 

29 (1) In section 229F(9)(C), strike ‘‘section 3(b) of the Maritime Drug 

30 Enforcement Act, as amended (46 U.S.C., App. sec. 1903(b))’’ and 

31 substitute ‘‘section 70502(b) of title 46, United States Code’’. 

32 (2) In section 507— 

33 (A) in the first paragraph, strike ‘‘recording, registry, or enroll34 ment of any vessel, in the office of any collector of the customs, 

35 or a license to any vessel for carrying on the coasting trade or 

36 fisheries of the United States’’ and substitute ‘‘documentation of 

37 any vessel’’; 

38 (B) in the first paragraph, strike ‘‘collector or other’’; and 

39 (C) in the second paragraph, strike ‘‘license,’’. 

40 (3) In section 924— 
264 

•HR 1442 IH 

1 (A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and (k)(1), strike 

2 ‘‘the Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 

3 et seq.)’’ and substitute ‘‘chapter 705 of title 46’’; and 

4 (B) in subsection (g)(2), strike ‘‘802 et seq.’’ and substitute 

5 ‘‘801 et seq.’’. 

6 (4) In section 929(a)(2), strike ‘‘the Maritime Drug Law Enforce7 ment Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘chapter 705 

8 of title 46’’. 

9 (5) In section 965(a), strike ‘‘section 4197 of the Revised Statutes 

10 of the United States (46 U.S.C. App. 91)’’ and substitute ‘‘section 

11 60105 of title 46’’. 

12 (6) In section 2277(a), strike ‘‘registered, enrolled, or licensed’’ and 

13 substitute ‘‘documented’’. 

14 (7) In section 3142(e) and (f)(1)(C), strike ‘‘the Maritime Drug Law 

15 Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘chap16 ter 705 of title 46’’. 

17 (e) INTERNAL REVENUE CODE OF 1986.—The Internal Revenue Code of 

18 1986 (26 U.S.C. 1 et seq.) is amended as follows: 

19 (1) In section 56(c)(2)— 

20 (A) strike ‘‘section 607 of the Merchant Marine Act, 1936 (46 

21 U.S.C. 1177)’’ and substitute ‘‘chapter 535 of title 46, United 

22 States Code’’; and 

23 (B) in subparagraphs (A) and (B), strike ‘‘such section 607’’ 

24 substitute ‘‘such chapter 535’’. 

25 (2) In section 140(a)(4), strike ‘‘section 607(d) of the Merchant Ma26 rine Act, 1936 (46 U.S.C. 1177)’’ and substitute ‘‘section 53507 of 

27 title 46, United States Code’’. 

28 (3) In section 543(a)(1)(B), strike ‘‘section 511 or 607 of the Mer29 chant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)’’ and sub30 stitute ‘‘chapter 533 or 535 of title 46, United States Code’’. 

31 (4) In section 1023(2), strike ‘‘section 511 of the Merchant Marine 

32 Act, 1936, as amended (46 U.S.C. 1161)’’ and substitute ‘‘chapter 533 

33 of title 46, United States Code’’. 

34 (5) In section 1061— 

35 (A) in paragraph (1), strike ‘‘section 510 of the Merchant Ma36 rine Act, 1936, see subsection (e) of that section, as amended Au37 gust 4, 1939 (46 U.S.C. App. 1160)’’ and substitute ‘‘chapter 573 

38 of title 46, United States Code, see section 57307 of title 46’’; 

39 (B) in paragraph (2), strike ‘‘section 511 of such Act, as 

40 amended (46 U.S.C. App. 1161)’’ and substitute ‘‘chapter 533 of 

41 title 46, United States Code’’; and 
265 

•HR 1442 IH 

1 (C) strike paragraph (3). 

2 (6) In section 7518— 

3 (A) in subsection (a)(1), strike ‘‘section 607 of the Merchant 

4 Marine Act, 1936’’ and substitute ‘‘chapter 535 of title 46 of the 

5 United States Code’’; 

6 (B) in subsections (a)(2) and (c)(1)(A) and (D), strike ‘‘section 

7 607 of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 

8 535 of title 46, United States Code’’; and 

9 (C) in subsection (g)(3)(C)(iii), strike ‘‘Merchant Marine Act of 

10 1936’’ and substitute ‘‘Merchant Marine Act, 1936,’’. 

11 (f) TITLE 28.—Title 28, United States Code, is amended as follows: 

12 (1) In section 994(h)(1)(B) and (2)(B), strike ‘‘the Maritime Drug 

13 Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute 

14 ‘‘chapter 705 of title 46’’. 

15 (2) In section 1605(d), strike ‘‘the Ship Mortgage Act, 1920 (46 

16 U.S.C. 911 and following)’’ and ‘‘that Act’’ and substitute ‘‘section 

17 31301 of title 46’’ and ‘‘chapter 313 of title 46’’, respectively. 

18 (3) In section 2342(3)— 

19 (A) in subparagraph (A), strike ‘‘section 2, 9, 37, or 41 of the 

20 Shipping Act, 1916 (46 U.S.C. App. 802, 803, 808, 835, 839, and 

21 841a)’’ and substitute ‘‘section 50501, 50502, 56101–56104, or 

22 57109 of title 46’’; and 

23 (B) strike subparagraph (B) and substitute the following: 

24 ‘‘(B) the Federal Maritime Commission issued pursuant to sec25 tion 305, 41304, 41308, or 41309 or chapter 421 or 441 of title 

26 46;’’. 

27 (4) In section 2680(d), strike ‘‘sections 741–752, 781–790 of Title 

28 46,’’ and substitute ‘‘chapter 309 or 311 of title 46’’. 

29 (g) TITLE 40.—Title 40, United States Code, is amended as follows: 

30 (1) In section 548, strike ‘‘the Merchant Marine Act, 1936 (46 App. 

31 U.S.C. 1101 et seq.),’’ and substitute ‘‘part F of subtitle V of title 46’’. 

32 (2) In section 3134(b), strike ‘‘the Merchant Marine Act, 1936 (46 

33 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘subtitle V of title 46’’. 

34 (h) TITLE 49.—Title 49, United States Code, is amended as follows: 

35 (1) In section 5122(c)(1), strike ‘‘Secretary of the Treasury’’ and 

36 ‘‘section 4197 of the Revised Statutes of the United States (46 App. 

37 U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland Security’’ and 

38 ‘‘section 60105 of title 46’’, respectively. 

39 (2) In section 5901(3)(B), strike ‘‘section 3 of the Shipping Act of 

40 1984 (46 App. U.S.C. 1702)’’ and substitute ‘‘section 40102 of title 

41 46’’. 
266 

•HR 1442 IH 

1 (i) MISCELLANEOUS.—Section 5501(a) of the Oceans Act of 1992 (Public 

2 Law 102–587, 106 Stat. 5084) is amended by adding the following: 

3 ‘‘(3) The exceptions provided by paragraph (2) shall apply under section 

4 55109 of title 46, United States Code, to the same extent as under former 

5 section 1 of the Act of May 28, 1906, as amended by paragraph (1).’’ 

6 SEC. 17. TRANSITIONAL AND SAVINGS PROVISIONS. 

7 (a) CUTOFF DATE.—This Act replaces certain provisions of law enacted 

8 on or before February 28, 2005. If a law enacted after that date amends 

9 or repeals a provision replaced by this Act, that law is deemed to amend 

10 or repeal, as the case may be, the corresponding provision enacted by this 

11 Act. If a law enacted after that date is otherwise inconsistent with this Act, 

12 it supersedes this Act to the extent of the inconsistency. 

13 (b) ORIGINAL DATE OF ENACTMENT UNCHANGED.—For purposes of de14 termining whether one provision of law supersedes another based on enact15 ment later in time, the date of enactment of a provision enacted by this Act 

16 is deemed to be the date of enactment of the provision it replaced. 

17 (c) REFERENCES TO PROVISIONS REPLACED.—A reference to a provision 

18 of law replaced by this Act, including a reference in another law or in a 

19 regulation, order, or other administrative action, is deemed to refer to the 

20 corresponding provision enacted by this Act. 

21 (d) LAWS GOVERNING APPLICABILITY OF PRIOR AMENDMENTS.—This 

22 Act does not affect any law governing the applicability of an amendment 

23 to a provision of law replaced by this Act, notwithstanding the repeal by 

24 this Act of the provision that was amended. To the extent that any such 

25 law governed the applicability of a provision replaced by this Act, that law 

26 governs the applicability of the corresponding provision enacted by this Act. 

27 (e) REGULATIONS, ORDERS, AND OTHER ADMINISTRATIVE ACTIONS.—A 

28 regulation, order, or other administrative action in effect under a provision 

29 of law replaced by this Act continues in effect under the corresponding pro30 vision enacted by this Act. 

31 (f) ACTIONS TAKEN AND OFFENSES COMMITTED.—An action taken or an 

32 offense committed under a provision of law replaced by this Act is deemed 

33 to have been taken or committed under the corresponding provision enacted 

34 by this Act. 

35 SEC. 18. REPEALS. 

36 The following laws are repealed, except with respect to rights and duties 

37 that matured, penalties that were incurred, or proceedings that were begun 

38 before the date of enactment of this Act: 
267 

•HR 1442 IH 

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 

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 
268 

•HR 1442 IH 

Statutes at Large—Continued 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code 

(46 App. unless otherwise 

specified) 

Volume Page 

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 

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 
269 

•HR 1442 IH 

Statutes at Large—Continued 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code 

(46 App. unless otherwise 

specified) 

Volume Page 

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 

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 28 523 ............................................................... 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 
270 

•HR 1442 IH 

Statutes at Large—Continued 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code 

(46 App. unless otherwise 

specified) 

Volume Page 

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 

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 

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 
271 

•HR 1442 IH 

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 

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 

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 
272 

•HR 1442 IH 

Statutes at Large—Continued 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code 

(46 App. unless otherwise 

specified) 

Volume Page 

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 

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 
273 

•HR 1442 IH 

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 

Æ