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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4319 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 4319

     To complete the codification of title 46, United States Code, 
                     ``Shipping'', as positive law.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 2004

    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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Title 46 
Codification Act of 2004''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1.  Short title; table of contents.
Sec. 2.  Title analysis.
Sec. 3.  Subtitle I of title 46.
Sec. 4.  Subtitle II of title 46.
Sec. 5.  Subtitle III of title 46.
Sec. 6.  Subtitle IV of title 46.
Sec. 7.  Subtitle V of title 46.
Sec. 8.  Subtitle VI of title 46.
Sec. 9.  Subtitle VII of title 46.
Sec. 10.  Subtitle VIII of title 46.
Sec. 11.  Maritime Administration.
Sec. 12.  Amendments relating to Maritime Security Act of 2003.
Sec. 13.  Amendments to partially restated provisions.
Sec. 14.  Additional amendments to title 46.
Sec. 15.  Conforming amendments to other laws.
Sec. 16.  Legislative construction and transitional provisions.
Sec. 17.  Repeals.

SEC. 2. TITLE ANALYSIS.

  (a) Amendment.--The title analysis of title 46, United States Code, 
is amended to read as follows:

``Subtitle                                                          Sec.

GENERAL..............................................................101
VESSELS AND SEAMEN..................................................2101
MARITIME LIABILITY.................................................30101
REGULATION OF OCEAN SHIPPING.......................................40101
MERCHANT MARINE....................................................50101
CLEARANCE, TONNAGE TAXES, AND DUTIES...............................60101
SECURITY AND DRUG ENFORCEMENT......................................70101
MISCELLANEOUS...................................................80101''.
  (b) Repeal.--If this Act is enacted prior to the effective date of 
section 3531(b) of the Maritime Security Act of 2003 (Public Law 108-
136, 117 Stat. 1817), such section 3531(b) is repealed.

SEC. 3. SUBTITLE I OF TITLE 46.

  Title 46, United States Code, is amended by inserting after the title 
analysis the following:

                         ``Subtitle I--General

``Chapter                                                           Sec.

Definitions..........................................................101
Federal Maritime Commission..........................................301
Other General Provisions.............................................501

                        ``CHAPTER 1--DEFINITIONS

``Sec.
``101.  Agency.
``102.  Barge.
``103.  Boundary Line.
``104.  Citizen of the United States.
``105.  Consular officer.
``106.  Documented vessel.
``107.  Exclusive economic zone.
``108.  Fisheries.
``109.  Foreign commerce or trade.
``110.  Foreign vessel.
``111.  Numbered vessel.
``112.  State.
``113.  Undocumented.
``114.  United States.
``115.  Vessel.
``116.  Vessel of the United States.
``Sec. 101. Agency
  ``In this title, the term `agency' means a department, agency, or 
instrumentality of the United States Government.
``Sec. 102. Barge
  ``In this title, the term `barge' means a non-self-propelled vessel.
``Sec. 103. Boundary Line
  ``In this title, the term `Boundary Line' means a line established 
under section 2(b) of the Act of February 19, 1895 (33 U.S.C. 151).
``Sec. 104. Citizen of the United States
  ``In this title, the term `citizen of the United States' means an 
individual who is a national of the United States as defined in section 
101(a)(22) of the Immigration and Nationality Act (8 U.S.C. 
1101(a)(22)).
``Sec. 105. Consular officer
  ``In this title, the term `consular officer' means an officer or 
employee of the United States Government designated under regulations 
to issue visas.
``Sec. 106. Documented vessel
  ``In this title, the term `documented vessel' means a vessel for 
which a certificate of documentation has been issued under chapter 121 
of this title.
``Sec. 107. Exclusive economic zone
  ``In this title, the term `exclusive economic zone' means the zone 
established by Presidential Proclamation 5030 of March 10, 1983 (16 
U.S.C. 1453 note).
``Sec. 108. Fisheries
  ``In this title, the term `fisheries' includes processing, storing, 
transporting (except in foreign commerce), planting, cultivating, 
catching, taking, or harvesting fish, shellfish, marine animals, 
pearls, shells, or marine vegetation in the navigable waters of the 
United States or in the exclusive economic zone.
``Sec. 109. Foreign commerce or trade
  ``(a) In General.--In this title, the terms `foreign commerce' and 
`foreign trade' mean commerce or trade between a place in the United 
States and a place in a foreign country.
  ``(b) Capital Construction Funds and Construction-Differential 
Subsidies.--In the context of capital construction funds under chapter 
535 of this title, and in the context of construction-differential 
subsidies under title V of the Merchant Marine Act, 1936, the terms 
`foreign commerce' and `foreign trade' also include, in the case of 
liquid and dry bulk cargo carrying services, trading between foreign 
ports in accordance with normal commercial bulk shipping practices in a 
manner that will permit United States-flag bulk vessels to compete 
freely with foreign-flag bulk vessels in their operation or competition 
for charters, subject to regulations prescribed by the Secretary of 
Transportation.
``Sec. 110. Foreign vessel
  ``In this title, the term `foreign vessel' means a vessel of foreign 
registry or operated under the authority of a foreign country.
``Sec. 111. Numbered vessel
  ``In this title, the term `numbered vessel' means a vessel for which 
a number has been issued under chapter 123 of this title.
``Sec. 112. State
  ``In this title, the term `State' means a State of the United States, 
the District of Columbia, Guam, Puerto Rico, the Virgin Islands, 
American Samoa, the Northern Mariana Islands, and any other territory 
or possession of the United States.
``Sec. 113. Undocumented
  ``In this title, the term `undocumented' means not having and not 
required to have a certificate of documentation issued under chapter 
121 of this title.
``Sec. 114. United States
  ``In this title, the term `United States', when used in a geographic 
sense, means the States of the United States, the District of Columbia, 
Guam, Puerto Rico, the Virgin Islands, American Samoa, the Northern 
Mariana Islands, and any other territory or possession of the United 
States.
``Sec. 115. Vessel
  ``In this title, the term `vessel' has the meaning given that term in 
section 3 of title 1.
``Sec. 116. Vessel of the United States
  ``In this title, the term `vessel of the United States' means a 
vessel documented under chapter 121 of this title, numbered under 
chapter 123 of this title, or titled under the law of a State.

                ``CHAPTER 3--FEDERAL MARITIME COMMISSION

``Sec.
``301.  General organization.
``302.  Quorum.
``303.  Record of meetings and votes.
``304.  Delegation of authority.
``305.  Regulations.
``306.  Annual report.
``307.  Expenditures.
``Sec. 301. General organization
  ``(a) Organization.--The Federal Maritime Commission is an 
independent establishment of the United States Government.
  ``(b) Commissioners.--
          ``(1) Composition.--The Commission is composed of 5 
        Commissioners, appointed by the President by and with the 
        advice and consentof the Senate. Not more than 3 Commissioners 
may be appointed from the same political party.
          ``(2) Terms.--The term of each Commissioner is 5 years, with 
        each term beginning one year apart. An individual appointed to 
        fill a vacancy is appointed only for the unexpired term of the 
        individual being succeeded. A vacancy shall be filled in the 
        same manner as the original appointment. When the term of a 
        Commissioner ends, the Commissioner may continue to serve until 
        a successor is appointed and qualified.
          ``(3) Removal.--The President may remove a Commissioner for 
        inefficiency, neglect of duty, or malfeasance in office.
  ``(c) Chairman.--
          ``(1) Designation.--The President shall designate one of the 
        Commissioners as Chairman.
          ``(2) General authority.--The Chairman is the chief executive 
        and administrative officer of the Commission. In carrying out 
        the duties and powers of the Commission (other than under 
        paragraph (3)), the Chairman is subject to the policies, 
        regulatory decisions, findings, and determinations of the 
        Commission.
          ``(3) Particular duties.--
                  ``(A) In general.--The Chairman shall--
                          ``(i) appoint and supervise officers and 
                        employees of the Commission;
                          ``(ii) appoint the heads of major 
                        organizational units, but only after 
                        consultation with the other Commissioners;
                          ``(iii) distribute the business of the 
                        Commission among personnel and organizational 
                        units;
                          ``(iv) supervise the expenditure of money for 
                        administrative purposes; and
                          ``(v) assign Commission personnel, including 
                        Commissioners, to perform duties and powers 
                        delegated by the Commission under section 304 
                        of this title.
                  ``(B) Nonapplication.--Subparagraph (A) (other than 
                clause (v)) does not apply to personnel employed 
                regularly and full-time in the offices of Commissioners 
                other than the Chairman.
          ``(4) Delegation.--The Chairman may designate officers and 
        employees under the Chairman's jurisdiction to perform duties 
        and powers of the Chairman, subject to the Chairman's 
        supervision and direction.
  ``(d) Seal.--The Commission shall have a seal which shall be 
judicially recognized.
``Sec. 302. Quorum
  ``A vacancy or vacancies in the membership of the Federal Maritime 
Commission do not impair the power of the Commission to execute its 
functions. The affirmative vote of a majority of the Commissioners 
serving on the Commission is required to dispose of any matter before 
the Commission.
``Sec. 303. Record of meetings and votes
  ``The Federal Maritime Commission, through its secretary, shall keep 
a record of its meetings and the votes taken on any action, order, 
contract, or financial transaction of the Commission.
``Sec. 304. Delegation of authority
  ``(a) Delegation.--The Federal Maritime Commission, by published 
order or regulation, may delegate to a division of the Commission, an 
individual Commissioner, an employee board, or an officer or employee 
of the Commission, any of its duties or powers, including those 
relating to hearing, determining, ordering, certifying, reporting, or 
otherwise acting on any matter. This subsection does not affect section 
556(b) of title 5.
  ``(b) Review.--The Commission may review any action taken under a 
delegation of authority under subsection (a). The review may be taken 
on the Commission's own initiative or on the petition of a party to or 
an intervenor in the action, within the time and in the manner 
prescribed by the Commission. The vote of a majority of the Commission, 
less one member, is sufficient to bring an action before the Commission 
for review.
  ``(c) Deemed Action of Commission.--If the Commission declines 
review, or if review is not sought, within the time prescribed under 
subsection (b), the action taken under the delegation of authority is 
deemed to be the action of the Commission.
``Sec. 305. Regulations
  ``The Federal Maritime Commission may prescribe regulations to carry 
out its duties and powers.
``Sec. 306. Annual report
  ``(a) In General.--Not later than April 1 of each year, the Federal 
Maritime Commission shall submit a report to Congress. The report shall 
include the results of its investigations, a summary of its 
transactions, the purposes for which all of its expenditures were made, 
and any recommendations for legislation.
  ``(b) Report on Foreign Laws and Practices.--The Commission shall 
include in its annual report to Congress--
          ``(1) a list of the 20 foreign countries that generated the 
        largest volume of oceanborne liner cargo for the most recent 
        calendar year in bilateral trade with the United States;
          ``(2) an analysis of conditions described in section 42302(a) 
        of this title being investigated or found to exist in foreign 
        countries;
          ``(3) any actions being taken by the Commission to offset 
        those conditions;
          ``(4) any recommendations for additional legislation to 
        offset those conditions; and
          ``(5) a list of petitions filed under section 42302(b) of 
        this title that the Commission rejected and the reasons for 
        each rejection.
``Sec. 307. Expenditures
  ``The Federal Maritime Commission may make such expenditures as are 
necessary in the performance of its functions from funds appropriated 
or otherwise made available to it, which appropriations are authorized.

                 ``CHAPTER 5--OTHER GENERAL PROVISIONS

``Sec.
``501.  Waiver of navigation and vessel-inspection laws.
``502.  Cargo exempt from forfeiture.
``503.  Notice of seizure.
``504.  Remission of fees and penalties.
``505.  Penalty for violating regulation or order.
``Sec. 501. Waiver of navigation and vessel-inspection laws
  ``(a) On Request of Secretary of Defense.--On request of the 
Secretary of Defense, the head of an agency responsible for the 
administration of the navigation or vessel-inspection laws shall waive 
compliance with those laws to the extent the Secretary considers 
necessary in the interest of national defense.
  ``(b) By Head of Agency.--When the head of an agency responsible for 
the administration of the navigation or vessel-inspection laws 
considers it necessary in the interest of national defense, the 
individual may waive compliance with those laws to the extent, in the 
manner, and on the terms the individual prescribes.
  ``(c) Termination of Authority.--The authority granted by this 
section shall terminate at such time as the Congress by concurrent 
resolution or the President may designate.
``Sec. 502. Cargo exempt from forfeiture
  ``Cargo on a vessel is exempt from forfeiture under this title if--
          ``(1) the cargo is owned in good faith by a person not the 
        owner, master, or crewmember of the vessel; and
          ``(2) the customs duties on the cargo have been paid or 
        secured for payment as provided by law.
``Sec. 503. Notice of seizure
  ``When a forfeiture of a vessel or cargo accrues, the official of the 
United States Government required to give notice of the seizure of the 
vessel orcargo shall include in the notice, if they are known to that 
official, the name and the place of residence of the owner or consignee 
at the time of the seizure.
``Sec. 504. Remission of fees and penalties
  ``Any part of a fee, tax, or penalty paid or a forfeiture incurred 
under a law or regulation relating to vessels or seamen may be remitted 
if--
          ``(1) application for the remission is made within one year 
        after the date of the payment or forfeiture; and
          ``(2) it is found that the fee, tax, penalty, or forfeiture 
        was improperly or excessively imposed.
``Sec. 505. Penalty for violating regulation or order
  ``A person convicted of knowingly and willfully violating a 
regulation or order of the Federal Maritime Commission or the Secretary 
of Transportation under subtitle IV or V of this title, for which no 
penalty is expressly provided, shall be fined not more than $500. Each 
day of a continuing violation is a separate offense.''.

SEC. 4. SUBTITLE II OF TITLE 46.

  Chapter 121 of title 46, United States Code, is amended to read as 
follows:

                ``CHAPTER 121--DOCUMENTATION OF VESSELS

                         ``SUBCHAPTER I--GENERAL

``Sec.
``12101.  Definition and related terms in other laws.
``12102.  Vessels requiring documentation.
``12103.  General eligibility requirements.
``12104.  Applications for documentation.
``12105.  Issuance of documentation.
``12106.  Surrender of title and number.
``12107.  Wrecked vessels.

         ``SUBCHAPTER II--ENDORSEMENTS AND SPECIAL DOCUMENTATION

``12111.  Registry endorsement.
``12112.  Coastwise endorsement.
``12113.  Fishery endorsement.
``12114.  Recreational endorsement.
``12115.  Temporary endorsement for vessels procured outside the United 
          States.
``12116.  Limited endorsements for Guam, American Samoa, and Northern 
          Mariana Islands.
``12117.  Oil spill response vessels.
``12118.  Owners engaged primarily in manufacturing or mineral industry.
``12119.  Owners engaged primarily in leasing or financing transactions.
``12120.  Liquified gas tankers.
``12121.  Small passenger vessels and uninspected passenger vessels.

                     ``SUBCHAPTER III--MISCELLANEOUS

``12131.  Command of documented vessels.
``12132.  Loss of coastwise trade privileges.
``12133.  Duty to carry certificate on vessel and allow examination.
``12134.  Evidentiary uses of documentation.
``12135.  Invalidation of certificates of documentation.
``12136.  Surrender of certificates of documentation.
``12137.  Recording of vessels built in the United States.
``12138.  List of documented vessels.
``12139.  Reports.

                       ``SUBCHAPTER IV--PENALTIES

``12151.  Penalties.
``12152.  Denial or revocation of endorsement for non-payment of civil 
          penalty.

                        ``SUBCHAPTER I--GENERAL

``Sec. 12101. Definition and related terms in other laws
  ``(a) Definition.--In this chapter, a vessel is `rebuilt' in the 
United States only if the entire rebuilding, including the construction 
of any major component of the hull or superstructure, is done in the 
United States.
  ``(b) Related Terms in Other Laws.--When the following terms are used 
in a law, regulation, document, ruling, or other official act referring 
to the documentation of a vessel, the following definitions apply:
          ``(1) Registry endorsement.--The terms `certificate of 
        registry', `register', and `registry' mean a certificate of 
        documentation with a registry endorsement issued under this 
        chapter.
          ``(2) Coastwise endorsement.--The terms `license', 
        `enrollment and license', `license for the coastwise (or 
        coasting) trade', and `enrollment and license for the coastwise 
        (or coasting) trade' mean a certificate of documentation with a 
        coastwise endorsement issued under this chapter.
          ``(3) Yacht.--The term `yacht' means a recreational vessel 
        even if not documented.
``Sec. 12102. Vessels requiring documentation
  ``(a) In General.--Except as otherwise provided, a vessel may engage 
in the coastwise trade or the fisheries only if the vessel has been 
issued a certificate of documentation with an appropriate endorsement 
under this chapter.
  ``(b) Vessels Less Than 5 Net Tons.--A vessel of less than 5 net tons 
may engage in a trade without being documented if the vessel otherwise 
satisfies the requirements to engage in the particular trade.
  ``(c) Barges.--A barge qualified to engage in the coastwise trade may 
engage in the coastwise trade, without being documented, on rivers, 
harbors, lakes, canals, and inland waters.
``Sec. 12103. General eligibility requirements
  ``(a) Requirements.--Except as otherwise provided, a certificate of 
documentation for a vessel may be issued under this chapter only if the 
vessel is--
          ``(1) owned only by citizens of the United States;
          ``(2) at least 5 net tons as measured under part J of this 
        subtitle; and
          ``(3) not documented under the laws of a foreign country.
  ``(b) Entities Deemed Citizens.--For purposes of subsection (a)(1), 
the following entities are deemed to be citizens of the United States:
          ``(1) An association, trust, joint venture, or other entity 
        if each of its members is a citizen of the United States.
          ``(2) A partnership if--
                  ``(A) each general partner is a citizen of the United 
                States; and
                  ``(B) the controlling interest in the partnership is 
                owned by citizens of the United States.
          ``(3) A corporation if--
                  ``(A) it is incorporated under the laws of the United 
                States or a State;
                  ``(B) its chief executive officer, by whatever title, 
                and the chairman of its board of directors are citizens 
                of the United States; and
                  ``(C) no more of its directors are noncitizens than a 
                minority of the number necessary to constitute a 
                quorum.
          ``(4) The United States Government.
          ``(5) The government of a State.
  ``(c) Temporary Certificates Prior to Measurement.--Notwithstanding 
subsection (a)(2), the Secretary may provide by regulation for the 
issuance of a temporary certificate of documentation for a vessel 
before it is measured.
``Sec. 12104. Applications for documentation
  ``(a) In General.--An application for a certificate of documentation 
or endorsement under this chapter must be filed by the owner of the 
vessel. The application must be filed in the manner, be in the form, 
and contain the information prescribed by the Secretary.
  ``(b) Applicant's Identifying Information.--The Secretary shall 
require the applicant to provide--
          ``(1) if the applicant is an individual, the individual's 
        social security number; or
          ``(2) if the applicant is an entity--
                  ``(A) the entity's taxpayer identification number; or
                  ``(B) if the entity does not have a taxpayer 
                identification number, the social security number of an 
                individual who is a corporate officer, general partner, 
                or individual trustee of the entity and who signs the 
                application.
``Sec. 12105. Issuance of documentation
  ``(a) In General.--Except as provided in section 12152 of this title, 
the Secretary, on receipt of a proper application, shall issue a 
certificate of documentation or a temporary certificate of 
documentation for a vessel satisfying the requirements of section 12103 
of this title. The certificate shallcontain each endorsement under 
subchapter II of this chapter for which the owner applies and the 
vessel is eligible.
  ``(b) Temporary Certificates for Recreational Vessels.--The Secretary 
may delegate, subject to the supervision and control of the Secretary 
and under terms prescribed by regulation, to private entities 
determined and certified by the Secretary to be qualified, the 
authority to issue a temporary certificate of documentation for a 
recreational vessel eligible under section 12103 of this title. A 
temporary certificate issued under this subsection is valid for not 
more than 30 days.
  ``(c) Information To Be Included in Certificate.--A certificate of 
documentation shall--
          ``(1) identify and describe the vessel;
          ``(2) identify the owner of the vessel; and
          ``(3) contain additional information prescribed by the 
        Secretary.
  ``(d) Procedures To Ensure Integrity and Accuracy.--The Secretary 
shall prescribe procedures to ensure the integrity of, and the accuracy 
of information contained in, certificates of documentation.
``Sec. 12106. Surrender of title and number
  ``(a) In General.--A documented vessel may not be titled by a State 
or required to display numbers under chapter 123 of this title, and any 
certificate of title issued by a State for a documented vessel shall be 
surrendered as provided by regulations prescribed by the Secretary.
  ``(b) Vessels Covered by Preferred Mortgage.--The Secretary may 
approve the surrender under subsection (a) of a certificate of title 
for a vessel covered by a preferred mortgage under section 31322(d) of 
this title only if the mortgagee consents.
``Sec. 12107. Wrecked vessels
  ``(a) Requirements.--A vessel is a wrecked vessel under this chapter 
if it--
          ``(1) was wrecked on a coast of the United States or adjacent 
        waters; and
          ``(2) has undergone repairs in a shipyard in the United 
        States equal to at least 3 times the appraised salvage value of 
        the vessel.
  ``(b) Appraisals.--The Secretary may appoint a board of three 
appraisers to determine whether a vessel satisfies subsection (a)(2). 
The costs of the appraisal shall be paid by the owner of the vessel.

        ``SUBCHAPTER II--ENDORSEMENTS AND SPECIAL DOCUMENTATION

``Sec. 12111. Registry endorsement
  ``(a) Requirements.--A registry endorsement may be issued for a 
vessel that satisfies the requirements of section 12103 of this title.
  ``(b) Authorized Activity.--A vessel for which a registry endorsement 
is issued may engage in foreign trade or trade with Guam, American 
Samoa, Wake, Midway, or Kingman Reef.
  ``(c) Certain Vessels Owned by Trusts.--
          ``(1) Nonapplication of beneficiary citizenship 
        requirement.--For the issuance of a certificate of 
        documentation with only a registry endorsement, the 
        beneficiaries of a trust are not required to be citizens of the 
        United States if the trust qualifies under paragraph (2) and 
        the vessel is subject to a charter to a citizen of the United 
        States.
          ``(2) Requirements for trust to qualify.--
                  ``(A) In general.--Subject to subparagraph (B), a 
                trust qualifies under this paragraph with respect to a 
                vessel only if--
                          ``(i) each trustee is a citizen of the United 
                        States; and
                          ``(ii) the application for documentation of 
                        the vessel includes the affidavit of each 
                        trustee stating that the trustee is not aware 
                        of any reason involving a beneficiary of the 
                        trust that is not a citizen of the United 
                        States, or involving any other person that is 
                        not a citizen of the United States, as a result 
                        of which the beneficiary or other person would 
                        hold more than 25 percent of the aggregate 
                        power to influence or limit the exercise of the 
                        authority of the trustee with respect to 
                        matters involving any ownership or operation of 
                        the vessel that may adversely affect the 
                        interests of the United States.
                  ``(B) Authority of non-citizens.--If any person that 
                is not a citizen of the United States has authority to 
                direct or participate in directing a trustee for a 
                trust in matters involving any ownership or operation 
                of the vessel that may adversely affect the interests 
                of the United States or in removing a trustee for a 
                trust without cause, either directly or indirectly 
                through the control of another person, the trust is not 
                qualified under this paragraph unless the trust 
                instrument provides that persons who are not citizens 
                of the United States may not hold more than 25 percent 
                of the aggregate authority to so direct or remove a 
                trustee.
                  ``(C) Ownership by non-citizens.--Subparagraphs (A) 
                and (B) do not prohibit a person that is not a citizen 
                of the United States from holding more than 25 percent 
                of the beneficial interest in a trust.
          ``(3) Citizenship of person chartering vessel.--If a person 
        chartering a vessel from a trust that qualifies under paragraph 
        (2) is a citizen of the United States under section 50501 of 
        this title, the vessel is deemed to be owned by a citizen of 
        the United States for purposes of that section and related 
        laws, except subtitle B of title VI of the Merchant Marine Act, 
        1936.
``Sec. 12112. Coastwise endorsement
  ``(a) Requirements.--A coastwise endorsement may be issued for a 
vessel that--
          ``(1) satisfies the requirements of section 12103 of this 
        title;
          ``(2)(A) was built in the United States; or
          ``(B) if not built in the United States--
                  ``(i) was captured in war by citizens of the United 
                States and lawfully condemned as prize;
                  ``(ii) was adjudged to be forfeited for a breach of 
                the laws of the United States; or
                  ``(iii) qualifies as a wrecked vessel under section 
                12107 of this title; and
          ``(3) otherwise qualifies under the laws of the United States 
        to engage in the coastwise trade.
  ``(b) Authorized Activity.--Subject to the laws of the United States 
regulating the coastwise trade, a vessel for which a coastwise 
endorsement is issued may engage in the coastwise trade.
``Sec. 12113. Fishery endorsement
  ``(a) Requirements.--A fishery endorsement may be issued for a vessel 
that--
          ``(1) satisfies the requirements of section 12103 of this 
        title and, if owned by an entity, the entity satisfies the 
        ownership requirements in subsection (c);
          ``(2) was built in the United States;
          ``(3) if rebuilt, was rebuilt in the United States;
          ``(4) was not forfeited to the United States Government after 
        July 1, 2001, for a breach of the laws of the United States; 
        and
          ``(5) otherwise qualifies under the laws of the United States 
        to engage in the fisheries.
  ``(b) Authorized Activity.--
          ``(1) In general.--Subject to the laws of the United States 
        regulating the fisheries, a vessel for which a fishery 
        endorsement is issued may engage in the fisheries.
          ``(2) Use by prohibited persons.--A fishery endorsement is 
        invalid immediately if the vessel for which it is issued is 
        used as a fishing vessel while it is chartered or leased to an 
        individual who is not a citizen of the United States or to an 
        entity that is not eligible to own a vessel with a fishery 
        endorsement.
  ``(c) Ownership Requirements for Entities.--
          ``(1) In general.--A vessel owned by an entity is eligible 
        for a fishery endorsement only if at least 75 percent of the 
        interest in the entity, at each tier of ownership and in the 
        aggregate, is owned and controlled by citizens of the United 
        States.
          ``(2) Determining 75 percent ownership.--In determining 
        whether the 75 percent ownership requirement of paragraph (1) 
        is satisfied, the Secretary shall apply section 50501(d) of 
        this title, except that for this purpose the terms `control' or 
        `controlled'--
                  ``(A) include the right to--
                          ``(i) direct the business of the entity;
                          ``(ii) limit the actions of or replace the 
                        chief executive officer, a majority of the 
                        board of directors, any general partner, or any 
                        person serving in a management capacity of the 
                        entity; or
                          ``(iii) direct the transfer, operation, or 
                        manning of a vessel with a fishery endorsement; 
                        but
                  ``(B) do not include the right to simply participate 
                in the activities under clause (A), or the exercise of 
                rights under loan or mortgage covenants by a mortgagee 
                eligible to be a preferred mortgagee under section 
                31322(a) of this title, except that a mortgagee not 
                eligible to own a vessel with a fishery endorsement may 
                only operate such a vessel to the extent necessary for 
                the immediate safety of the vessel or for repairs, 
                drydocking, or berthing changes.
          ``(3) Exceptions.--This subsection does not apply to a vessel 
        when it is engaged in the fisheries in the exclusive economic 
        zone under the authority of the Western Pacific Fishery 
        Management Council established under section 302(a)(1)(H) of 
        the Magnuson-Stevens Fishery Conservation and Management Act 
        (16 U.S.C. 1852(a)(1)(H)) or to a purse seine vessel when it is 
        engaged in tuna fishing in the Pacific Ocean outside the 
        exclusive economic zone or pursuant to the South Pacific 
        Regional Fisheries Treaty, provided that the owner of the 
        vessel continues to comply with the eligibility requirements 
        for a fishery endorsement under the Federal law that was in 
        effect on October 1, 1998. A fishery endorsement issued 
        pursuant to this paragraph is valid for engaging only in the 
        activities described in this paragraph.
  ``(d) Requirements Based on Length, Tonnage, or Horsepower.--
          ``(1) Application.--This subsection applies to a vessel 
        that--
                  ``(A) is greater than 165 feet in registered length;
                  ``(B) is more than 750 gross registered tons as 
                measured under chapter 145 of this title or 1,900 gross 
                registered tons as measured under chapter 143 of this 
                title; or
                  ``(C) has an engine or engines capable of producing a 
                total of more than 3,000 shaft horsepower.
          ``(2) Requirements.--A vessel subject to this subsection is 
        not eligible for a fishery endorsement unless--
                  ``(A)(i) a certificate of documentation was issued 
                for the vessel and endorsed with a fishery endorsement 
                that was effective on September 25, 1997;
                  ``(ii) the vessel is not placed under foreign 
                registry after October 21, 1998; and
                  ``(iii) if the fishery endorsement is invalidated 
                after October 21, 1998, application is made for a new 
                fishery endorsement within 15 business days of the 
                invalidation; or
                  ``(B) the owner of the vessel demonstrates to the 
                Secretary that the regional fishery management council 
                of jurisdiction established under section 302(a)(1) of 
                the Magnuson-Stevens Fishery Conservation and 
                Management Act (16 U.S.C. 1852(a)(1)) has recommended 
                after October 21, 1998, and the Secretary of Commerce 
                has approved, conservation and management measures in 
                accordance with the American Fisheries Act (Public Law 
                105-277, div. C, title II) (16 U.S.C. 1851 note) to 
                allow the vessel to be used in fisheries under the 
                council's authority.
  ``(e) Vessels Measuring 100 Feet or Greater.--
          ``(1) In general.--The Administrator of the Maritime 
        Administration shall administer subsections (c) and (d) with 
        respect to vessels 100 feet or greater in registered length. 
        The owner of each such vessel shall file a statement of 
        citizenship setting forth all relevant facts regarding vessel 
        ownership and control with the Administrator on an annual basis 
        to demonstrate compliance with those provisions.
          ``(2) Regulations.--Regulations to implement this subsection 
        shall conform to the extent practicable with the regulations 
        establishing the form of citizenship affidavit set forth in 
        part 355 of title 46, Code of Federal Regulations, as in effect 
        on September 25, 1997, except that the form of the statement 
        shall be written in a manner to allow the owner of the vessel 
        to satisfy any annual renewal requirements for a certificate of 
        documentation for the vessel and to comply with this subsection 
        and subsections (c) and (d), and shall not be required to be 
        notarized.
          ``(3) Transfer of ownership.--Transfers of ownership and 
        control of vessels subject to subsection (c) or (d), which are 
        100 feet or greater in registered length, shall be rigorously 
        scrutinized for violations of those provisions, with particular 
        attention given to--
                  ``(A) leases, charters, mortgages, financing, and 
                similar arrangements;
                  ``(B) the control of persons not eligible to own a 
                vessel with a fishery endorsement under subsection (c) 
                or (d), over the management, sales, financing, or other 
                operations of an entity; and
                  ``(C) contracts involving the purchase over extended 
                periods of time of all, or substantially all, of the 
                living marine resources harvested by a fishing vessel.
  ``(f) Vessels Measuring Less Than 100 Feet.--The Secretary shall 
establish reasonable and necessary requirements to demonstrate 
compliance with subsections (c) and (d), with respect to vessels 
measuring less than 100 feet in registered length, and shall seek to 
minimize the administrative burden on individuals who own and operate 
those vessels.
  ``(g) Vessels Purchased Through Fishing Capacity Reduction Program.--
A vessel purchased by the Secretary of Commerce through a fishing 
capacity reduction program under the Magnuson-Stevens Fishery 
Conservation Management Act (16 U.S.C. 1801 et seq.) or section 308 of 
the Interjurisdictional Fisheries Act of 1986 (16 U.S.C. 4107) is not 
eligible for a fishery endorsement, and any fishery endorsement issued 
for that vessel is invalid.
  ``(h) Revocation of Endorsements.--The Secretary shall revoke the 
fishery endorsement of any vessel subject to subsection (c) or (d) 
whose owner does not comply with those provisions.
  ``(i) Regulations.--Regulations to implement subsections (c) and (d) 
and sections 12151(c) and 31322(b) of this title shall prohibit 
impermissible transfers of ownership or control, specify any 
transactions that require prior approval of an implementing agency, 
identify transactions that do not require prior agency approval, and to 
the extent practicable, minimize disruptions to the commercial fishing 
industry, to the traditional financing arrangements of that industry, 
and to the opportunity to form fishery cooperatives.
``Sec. 12114. Recreational endorsement
  ``(a) Requirements.--A recreational endorsement may be issued for a 
vessel that satisfies the requirements of section 12103 of this title.
  ``(b) Authorized Activity.--A vessel operating under a recreational 
endorsement may be operated only for pleasure.
  ``(c) Application of Customs Laws.--A vessel for which a recreational 
endorsement is issued may proceed between a port of the United States 
and a port of a foreign country without entering or clearing with the 
Secretary of Homeland Security. However, a recreational vessel is 
subject to the requirements for reporting arrivals under section 433 of 
the Tariff Act of 1930 (19 U.S.C. 1433), and individuals on the vessel 
are subject to applicable customs regulations.
``Sec. 12115. Temporary endorsement for vessels procured outside the 
                    United States
  ``(a) General Authority.--The Secretary and the Secretary of State, 
acting jointly, may provide for the issuance of a certificate of 
documentation with an appropriate endorsement for a vessel procured 
outside the United States by citizens of the United States.
  ``(b) Authorized Activity.--Subject to limitations the Secretary may 
prescribe, a vessel documented under this section may proceed to the 
United States and engage en route in foreign trade or trade with Guam, 
American Samoa, Wake, Midway, or Kingman Reef.
  ``(c) Application of United States Jurisdiction and Laws.--A vessel 
documented under this section is subject to the jurisdiction and laws 
of the United States. However, if the Secretary considers it to be in 
the public interest, the Secretary may suspend for a period of not more 
than 6 months the application of a vessel inspection law carried out by 
the Secretary or regulations prescribed under that law.
  ``(d) Surrender of Certificate.--On the vessel's arrival in the 
United States, the certificate of documentation shall be surrendered as 
provided by regulations prescribed by the Secretary.
``Sec. 12116. Limited endorsements for Guam, American Samoa, and 
                    Northern Mariana Islands
  ``(a) Endorsements.--A vessel satisfying the requirements of 
subsection (b) may be issued--
          ``(1) a coastwise endorsement to engage in the coastwise 
        trade of fisheries products between places in Guam, American 
        Samoa, and the Northern Mariana Islands; or
          ``(2) a fishery endorsement to engage in fishing in the 
        territorial sea and fishery conservation zone adjacent to Guam, 
        American Samoa, and the Northern Mariana Islands.
  ``(b) Requirements.--An endorsement may be issued under subsection 
(a) for a vessel that--
          ``(1) satisfies the requirements of section 12103 of this 
        title;
          ``(2) was not built or rebuilt in the United States;
          ``(3) is less than 200 gross tons as measured under section 
        14502 of this title, or an alternate tonnage as measured under 
        section 14302 of this title as prescribed by the Secretary 
        under section 14104 of this title; and
          ``(4) otherwise qualifies under the laws of the United States 
        to engage in the coastwise trade or the fisheries, as the case 
        may be.
``Sec. 12117. Oil spill response vessels
  ``(a) Requirements.--A coastwise endorsement may be issued for a 
vessel that--
          ``(1) satisfies the requirements for a coastwise endorsement, 
        except for the ownership requirement otherwise applicable 
        without regard to this section;
          ``(2) is owned by a not-for-profit oil spill response 
        cooperative or by members of such a cooperative that dedicate 
        the vessel to use by the cooperative;
          ``(3) is at least 50 percent owned by individuals who are 
        citizens of the United States or by entities described in 
        section 12103(b) of this title; and
          ``(4) is to be used only for--
                  ``(i) deploying equipment, supplies, and personnel to 
                recover, contain, or transport oil discharged into the 
                navigable waters of the United States or the exclusive 
                economic zone; or
                  ``(ii) training exercises to prepare to respond to 
                such a discharge.
  ``(b) Vessel Deemed Owned by Citizens.--A vessel satisfying 
subsection (a) is deemed to be owned only by citizens of the United 
States under sections 12103(a)(1), 12132, and 50501 of this title.
``Sec. 12118. Owners engaged primarily in manufacturing or mineral 
                    industry
  ``(a) Definitions.--In this section:
          ``(1) Citizen of the united states.--The term `citizen of the 
        United States' means a corporation that has filed a certificate 
        under oath with the Secretary, in the form and at the times 
        prescribed by the Secretary, establishing that--
                  ``(A) the corporation is incorporated under the laws 
                of the United States or a State;
                  ``(B) a majority of the officers and directors of the 
                corporation are individuals who are citizens of the 
                United States;
                  ``(C) at least 90 percent of the employees of the 
                corporation are residents of the United States;
                  ``(D) the corporation is engaged primarily in a 
                manufacturing or mineral industry in the United States;
                  ``(E) the total book value of the vessels owned by 
                the corporation is not more than 10 percent of the 
                total book value of the assets of the corporation; and
                  ``(F) the corporation buys or produces in the United 
                States at least 75 percent of the raw materials used or 
                sold in its operations.
          ``(2) Parent.--The term `parent' means a corporation that has 
        filed a certificate under oath with the Secretary, in the form 
        and at the times prescribed by the Secretary, establishing that 
        the corporation--
                  ``(A) is incorporated under the laws of the United 
                States or a State; and
                  ``(B) controls at least 50 percent of the voting 
                stock of a corporation qualifying as a citizen of the 
                United States under clause (1).
          ``(3) Subsidiary.--The term `subsidiary' means a corporation 
        that has filed a certificate under oath with the Secretary, in 
        the form and at the times prescribed by the Secretary, 
        establishing that the corporation--
                  ``(A) is incorporated under the laws of the United 
                States or a State; and
                  ``(B) has at least 50 percent of its voting stock 
                controlled by a corporation qualifying as a citizen of 
                the United States under clause (1) or by the latter 
                corporation's parent.
  ``(b) Requirements.--A certificate of documentation and appropriate 
endorsement may be issued for a vessel that--
          ``(1) is owned by a corporation qualifying as a citizen of 
        the United States under subsection (a)(1);
          ``(2) was built in the United States; and
          ``(3) if self-propelled, is less than 500 gross tons as 
        measured under section 14502 of this title, or an alternate 
        tonnage as measured under section 14302 of this title as 
        prescribed by the Secretary under section 14104 of this title.
  ``(c) Effects of Documentation.--
          ``(1) In general.--Subject to paragraph (2)--
                  ``(A) a vessel documented under this section may 
                engage in the coastwise trade; and
                  ``(B) the vessel and its owner and master are 
                entitled to the same benefits and are subject to the 
                same requirements andpenalties as if the vessel were 
otherwise documented or exempt from documentation under this chapter.
          ``(2) Transportation of passengers or merchandise.--A vessel 
        documented under this section may transport passengers or 
        merchandise for hire in the coastwise trade only--
                  ``(A) as a service for a parent or subsidiary of the 
                corporation owning the vessel; or
                  ``(B) when under a demise or bareboat charter, at 
                prevailing rates for use not in the domestic 
                noncontiguous trades, from the corporation owning the 
                vessel to a carrier that--
                          ``(i) is subject to jurisdiction under 
                        subchapter II of chapter 135 of title 49;
                          ``(ii) otherwise qualifies as a citizen of 
                        the United States under section 50501 of this 
                        title; and
                          ``(iii) is not owned or controlled by the 
                        corporation owning the vessel.
  ``(d) Validity and Surrender of Certificate.--A certificate filed by 
a corporation under this section remains valid only as long as the 
corporation continues to satisfy the conditions required of the 
corporation by this section. When a corporation no longer satisfies 
those conditions, the corporation loses its status under this section 
and immediately shall surrender to the Secretary any documents issued 
to it based on that status.
  ``(e) Penalties.--
          ``(1) Falsifying material fact.--If a corporation knowingly 
        falsifies a material fact in a certificate filed under 
        subsection (a), the vessel (or its value) documented or 
        operated under this section shall be forfeited.
          ``(2) Transporting merchandise.--If a vessel transports 
        merchandise for hire in violation of this section, the 
        merchandise shall be forfeited to the United States Government.
          ``(3) Transporting passengers.--If a vessel transports 
        passengers for hire in violation of this section, the vessel is 
        liable for a penalty of $200 for each passenger so transported.
          ``(4) Remission or mitigation.--A penalty or forfeiture 
        incurred under this subsection may be remitted or mitigated 
        under section 2107(b) of this title.
``Sec. 12119. Owners engaged primarily in leasing or financing 
                    transactions
  ``(a) In General.--A coastwise endorsement may be issued for a vessel 
if--
          ``(1) the vessel satisfies the requirements for a coastwise 
        endorsement, except for the ownership requirement otherwise 
        applicable without regard to this section;
          ``(2) the person that owns the vessel, a parent entity of 
        that person, or a subsidiary of a parent entity of that person, 
        is primarily engaged in leasing or other financing 
        transactions;
          ``(3) the vessel is under a demise charter to a person that 
        certifies to the Secretary that the person is a citizen of the 
        United States under section 50501 of this title for engaging in 
        the coastwise trade; and
          ``(4) the demise charter is for a period of at least 3 years 
        or a shorter period as may be prescribed by the Secretary.
  ``(b) Filing of Demise Charter.--The demise charter and any 
amendments to the charter shall be filed with the certificate required 
by this section or within 10 days after filing an amendment to the 
charter. The charter and amendments shall be made available to the 
public.
  ``(c) Continuation of Endorsement After Termination of Charter.--When 
a charterer terminates a charter required by this section, the 
Secretary may continue the coastwise endorsement for not more than 6 
months on terms and conditions the Secretary may prescribe.
  ``(d) Deemed Owned by Citizens.--For purposes of sections 12103 and 
50501 of this title, a vessel satisfying the requirements of this 
section is deemed to be owned only by citizens of the United States.
``Sec. 12120. Liquified gas tankers
  ``Notwithstanding any agreement with the United States Government, 
the Secretary may issue a certificate of documentation with a coastwise 
endorsement for a vessel to transport liquified natural gas or 
liquified petroleum gas to Puerto Rico from other ports in the United 
States, if the vessel--
          ``(1) is a foreign built vessel that was built before October 
        19, 1996; or
          ``(2) was documented under this chapter before that date, 
        even if the vessel is placed under a foreign registry and 
        subsequently redocumented under this chapter for operation 
        under this section.
``Sec. 12121. Small passenger vessels and uninspected passenger vessels
  ``(a) Definitions.--In this section:
          ``(1) Eligible vessel.--The term `eligible vessel' means a 
        vessel that--
                  ``(A) was not built in the United States and is at 
                least 3 years old; or
                  ``(B) if rebuilt, was rebuilt outside the United 
                States at least 3 years before the certificate 
                requested under subsection (b) would take effect.
          ``(2) Small passenger vessel; uninspected passenger vessel; 
        passenger for hire.--The terms `small passenger vessel', 
        `uninspected passenger vessel', and `passenger for hire' have 
        the meaning given those terms in section 2101 of this title.
  ``(b) Issuance of Certificate and Endorsement.--Notwithstanding 
sections 12112, 12113, 55102, and 55103 of this title, the Secretary 
may issue a certificate of documentation with an appropriate 
endorsement for employment in the coastwise trade as a small passenger 
vessel or an uninspected passenger vessel in the case of an eligible 
vessel authorized to carry no more than 12 passengers for hire if the 
Secretary of Transportation, after notice and an opportunity for public 
comment, determines that the employment of the vessel in the coastwise 
trade will not adversely affect--
          ``(1) United States vessel builders; or
          ``(2) the coastwise trade business of any person that employs 
        vessels built in the United States in that business.
  ``(c) Revocation.--
          ``(1) For fraud.--The Secretary shall revoke a certificate or 
        endorsement issued under subsection (b) if the Secretary of 
        Transportation, after notice and an opportunity for a hearing, 
        determines that the certificate or endorsement was obtained by 
        fraud.
          ``(2) Other provisions not affected.--Paragraph (1) does not 
        affect--
                  ``(A) the criminal prohibition on fraud and false 
                statements in section 1001 of title 18; or
                  ``(B) any other authority of the Secretary to revoke 
                a certificate or endorsement issued under subsection 
                (b).

                    ``SUBCHAPTER III--MISCELLANEOUS

``Sec. 12131. Command of documented vessels
  ``A documented vessel (other than a vessel with only a recreational 
endorsement) may be placed under the command only of a citizen of the 
United States.
``Sec. 12132. Loss of coastwise trade privileges
  ``A vessel having a lawful right to engage in the coastwise trade is 
permanently prohibited from engaging in the coastwise trade if the 
vessel is--
          ``(1)(A) more than 200 gross tons as measured under chapter 
        143 of this title; and
          ``(B) sold to a person not a citizen of the United States or 
        documented under the laws of a foreign country; or
          ``(2) rebuilt outside the United States.
``Sec. 12133. Duty to carry certificate on vessel and allow examination
  ``(a) Duty To Carry.--The certificate of documentation of a vessel 
shall be carried on the vessel unless the vessel is exempt by 
regulation from carrying the certificate.
  ``(b) Availability.--The owner or individual in charge of a vessel 
required to carry its certificate of documentation shall make the 
certificate available for examination at the request of an officer 
enforcing the revenue laws or as otherwise required by law or 
regulation.
  ``(c) Criminal Penalty.--A person willfully violating subsection (b) 
shall be fined under title 18, imprisoned for not more than one year, 
or both.
``Sec. 12134. Evidentiary uses of documentation
  ``A certificate of documentation is--
          ``(1) conclusive evidence of nationality for international 
        purposes, but not in a proceeding conducted under the laws of 
        the United States;
          ``(2) conclusive evidence of qualification to engage in a 
        specified trade; and
          ``(3) not conclusive evidence of ownership in a proceeding in 
        which ownership is in issue.
``Sec. 12135. Invalidation of certificates of documentation
  ``A certificate of documentation or an endorsement on the certificate 
is invalid if the vessel for which it is issued--
          ``(1) no longer meets the requirements of this chapter and 
        regulations prescribed under this chapter applicable to the 
        certificate or endorsement; or
          ``(2) is placed under the command of an individual not a 
        citizen of the United States in violation of section 12131 of 
        this title.
``Sec. 12136. Surrender of certificates of documentation
  ``(a) Surrender.--An invalid certificate of documentation, or a 
certificate with an invalid endorsement, shall be surrendered as 
provided by regulations prescribed by the Secretary.
  ``(b) Conditions for Surrender.--
          ``(1) Vessels over 1,000 tons.--The Secretary may condition 
        approval of the surrender of the certificate of documentation 
        for a vessel over 1,000 gross tons.
          ``(2) Vessels covered by mortgage.--The Secretary may approve 
        the surrender of the certificate of documentation of a vessel 
        covered by a mortgage filed or recorded under section 31321 of 
        this title only if the mortgagee consents.
          ``(3) Notice of lien.--The Secretary may not refuse to 
        approve the surrender of the certificate of documentation for a 
        vessel solely on the basis that a notice of a claim of a lien 
        on the vessel has been recorded under section 31343(a) of this 
        title.
  ``(c) Continued Application of Certain Laws.--
          ``(1) In general.--Notwithstanding subsection (a), until the 
        certificate of documentation is surrendered with the approval 
        of the Secretary, a documented vessel is deemed to continue to 
        be documented under this chapter for purposes of--
                  ``(A) chapter 313 of this title for an instrument 
                filed or recorded before the date of invalidation and 
                an assignment after that date;
                  ``(B) sections 56102 and 56103(a)(2) and chapter 563 
                of this title; and
                  ``(C) any other law of the United States identified 
                by the Secretary by regulation as a law to which the 
                Secretary applies this subsection.
          ``(2) Exception.--This subsection does not apply when a 
        vessel is forfeited or sold by order of a district court of the 
        United States.
``Sec. 12137. Recording of vessels built in the United States
  ``The Secretary may provide for recording and certifying information 
about vessels built in the United States that the Secretary considers 
to be in the public interest.
``Sec. 12138. List of documented vessels
  ``(a) In General.--The Secretary shall publish periodically a list of 
all documented vessels and information about those vessels that the 
Secretary considers pertinent or useful. The list shall contain a 
notation clearly indicating all vessels classed by the American Bureau 
of Shipping.
  ``(b) Vessels for Cable Laying, Maintenance, and Repair.--
          ``(1) In general.--The Secretary of Transportation shall 
        develop, maintain, and periodically update an inventory of 
        vessels that are documented under this chapter, are at least 
        200 feet in length, and have the capability to lay, maintain, 
        or repair a submarine cable, without regard to whether a 
        particular vessel is classed as a cable ship or cable vessel.
          ``(2) Information to be included.--For each vessel listed in 
        the inventory, the Secretary of Transportation shall include in 
        the inventory--
                  ``(A) the name, length, beam, depth, and other 
                distinguishing characteristics of the vessel;
                  ``(B) the abilities and limitations of the vessel 
                with respect to laying, maintaining, and repairing a 
                submarine cable; and
                  ``(C) the name and address of the person to whom 
                inquiries regarding the vessel may be made.
          ``(3) Publication.--The Secretary of Transportation shall 
        publish in the Federal Register an updated inventory every 6 
        months.
``Sec. 12139. Reports
  ``(a) In General.--To ensure compliance with this chapter and laws 
governing the qualifications of vessels to engage in the coastwise 
trade and the fisheries, the Secretary may require owners and masters 
of documented vessels to submit reports in any reasonable form and 
manner the Secretary may prescribe.
  ``(b) Vessels Rebuilt Outside United States.--
          ``(1) In general.--Under regulations prescribed by the 
        Secretary, if a documented vessel is rebuilt outside the United 
        States and the vessel exceeds the tonnage specified in 
        paragraph (2), the owner or master shall submit a report of the 
        rebuilding to the Secretary.
          ``(2) Tonnage.--The tonnage referred to in paragraph (1) is--
                  ``(A) 500 gross tons as measured under section 14502 
                of this title; or
                  ``(B) an alternate tonnage as measured under section 
                14302 of this title as prescribed by the Secretary 
                under section 14104 of this title.
          ``(3) Timing of submission.--If the rebuilding is completed 
        in the United States, the report shall be submitted when the 
        rebuilding is completed. If the rebuilding is completed outside 
        the United States, the report shall be submitted when the 
        vessel first arrives at a port in the customs territory of the 
        United States.

                       ``SUBCHAPTER IV--PENALTIES

``Sec. 12151. Penalties
  ``(a) In General.--A person that violates this chapter or a 
regulation prescribed under this chapter is liable to the United States 
Government for a civil penalty of not more than $10,000. Each day of a 
continuing violation is a separate violation.
  ``(b) Seizure and Forfeiture of Vessels.--A vessel and its equipment 
are liable to seizure by and forfeiture to the Government if--
          ``(1) the owner of the vessel or the representative or agent 
        of the owner knowingly falsifies or conceals a material fact, 
        or knowinglymakes a false statement or representation, about 
the documentation of the vessel or in applying for documentation of the 
vessel;
          ``(2) a certificate of documentation is knowingly and 
        fraudulently used for the vessel;
          ``(3) the vessel is operated after its endorsement has been 
        denied or revoked under section 12152 of this title;
          ``(4) the vessel is employed in a trade without an 
        appropriate endorsement;
          ``(5) the vessel has only a recreational endorsement and is 
        operated other than for pleasure;
          ``(6) the vessel is a documented vessel (except a vessel with 
        only a recreational endorsement) and is placed under the 
        command of a person not a citizen of the United States; or
          ``(7) the vessel is rebuilt outside the United States and a 
        report of the rebuilding is not submitted as required by 
        section 12139(b) of this title.
  ``(c) Engaging in Fishing After Falsifying Eligibility.--In addition 
to other penalties under this section, the owner of a documented vessel 
for which a fishery endorsement has been issued is liable to the 
Government for a civil penalty of not more than $100,000 for each day 
the vessel engages in fishing (as defined in section 3 of the Magnuson-
Stevens Fishery Conservation and Management Act (16 U.S.C. 1802)) 
within the exclusive economic zone, if the owner or the representative 
or agent of the owner knowingly falsified or concealed a material fact, 
or knowingly made a false statement or representation, about the 
eligibility of the vessel under section 12113(c) or (d) of this title 
in applying for or applying to renew the fishery endorsement.
``Sec. 12152. Denial or revocation of endorsement for non-payment of 
                    civil penalty
  ``If the owner of a vessel fails to pay a civil penalty imposed by 
the Secretary, the Secretary may deny the issuance or renewal of an 
endorsement, or revoke the endorsement, on a certificate of 
documentation issued for the vessel under this chapter.''.

SEC. 5. SUBTITLE III OF TITLE 46.

  (a) Subtitle Analysis.--The analysis of subtitle III of title 46, 
United States Code, is amended to read as follows:

``Chapter                                                           Sec.

General Liability Provisions.......................................30101
Death on the High Seas.............................................30301
Exoneration and Limitation of Liability............................30501
Carriage of Goods by Sea...........................................30701
Suits in Admiralty Against United States Government................30901
Suits Involving Public Vessels.....................................31101
Commercial Instruments and Maritime Liens.......................31301''.
  (b) Repeals.--Title 46, United States Code, is amended by striking 
chapter 301 and the lines appearing immediately before and immediately 
after chapter 313 indicating that certain chapters are reserved.
  (c) Chapters 301-311.--Title 46, United States Code, is amended by 
inserting after the analysis of subtitle III the following:

              ``CHAPTER 301--GENERAL LIABILITY PROVISIONS

``Sec.
``30101.  Extension of jurisdiction to cases of damage or injury on 
          land.
``30102.  Liability to passengers.
``30103.  Liability of master, mate, engineer, and pilot.
``30104.  Personal injury to or death of seamen.
``30105.  Restriction on recovery by non-citizens and non-resident 
          aliens for incidents in waters of other countries.
``30106.  Time limit on bringing action.
``Sec. 30101. Extension of jurisdiction to cases of damage or injury on 
                    land
  ``(a) In General.--The admiralty and maritime jurisdiction of the 
United States extends to and includes cases of injury or damage, to 
person or property, caused by a vessel on navigable waters, even though 
the injury or damage is done or consummated on land.
  ``(b) Procedure.--A civil action in a case under subsection (a) may 
be brought in rem or in personam according to the principles of law and 
the rules of practice applicable in cases where the injury or damage 
has been done and consummated on navigable waters.
  ``(c) Actions Against United States.--
          ``(1) Exclusive remedy.--In a civil action against the United 
        States Government for injury or damage done or consummated on 
        land by a vessel on navigable waters, chapter 309 or 311 of 
        this title, as appropriate, provides the exclusive remedy.
          ``(2) Administrative claim.--A civil action described in 
        paragraph (1) may not be brought until the expiration of the 6 
        month period after the claim has been presented in writing to 
        the agency owning or operating the vessel causing the injury or 
        damage.
``Sec. 30102. Liability to passengers
  ``(a) Liability.--The owner and master of a vessel, and the vessel, 
are liable for personal injury to a passenger or damage to a 
passenger's baggage caused by--
          ``(1) a neglect or failure to comply with part B or F of 
        subtitle II of this title; or
          ``(2) a known defect in the steaming apparatus or hull of the 
        vessel.
  ``(b) Not Subject to Limitation.--A liability imposed under this 
section is not subject to limitation under chapter 305 of this title.
``Sec. 30103. Liability of master, mate, engineer, and pilot
  ``A person may bring a civil action against a master, mate, engineer, 
or pilot of a vessel, and recover damages, for personal injury or loss 
caused by the master's, mate's, engineer's, or pilot's--
          ``(1) negligence or willful misconduct; or
          ``(2) neglect or refusal to obey the laws governing the 
        navigation of vessels.
``Sec. 30104. Personal injury to or death of seamen
  ``(a) Cause of Action.--A seaman injured in the course of employment 
or, if the seaman dies from the injury, the personal representative of 
the seaman may elect to bring a civil action at law, with the right of 
trial by jury, against the employer. Laws of the United States 
regulating recovery for personal injury to, or death of, a railway 
employee apply to an action under this section.
  ``(b) Venue.--An action under this section shall be brought in the 
judicial district in which the employer resides or the employer's 
principal office is located.
``Sec. 30105. Restriction on recovery by non-citizens and non-resident 
                    aliens for incidents in waters of other countries
  ``(a) Definition.--In this section, the term `continental shelf' has 
the meaning given that term in article I of the 1958 Convention on the 
Continental Shelf.
  ``(b) Restriction.--Except as provided in subsection (c), a civil 
action for maintenance and cure or for damages for personal injury or 
death may not be brought under a maritime law of the United States if--
          ``(1) the individual suffering the injury or death was not a 
        citizen or permanent resident alien of the United States at the 
        time of the incident giving rise to the action;
          ``(2) the incident occurred in the territorial waters or 
        waters overlaying the continental shelf of a country other than 
        the United States; and
          ``(3) the individual suffering the injury or death was 
        employed at the time of the incident by a person engaged in the 
        exploration, development, or production of offshore mineral or 
        energy resources, including drilling, mapping, surveying, 
        diving, pipelaying, maintaining, repairing, constructing, or 
        transporting supplies, equipment, or personnel, but not 
        including transporting those resources by a vessel constructed 
        or adapted primarily to carry oil in bulk in the cargo spaces.
  ``(c) Nonapplication.--Subsection (b) does not apply if the 
individual bringing the action establishes that a remedy is not 
available under the laws of--
          ``(1) the country asserting jurisdiction over the area in 
        which the incident occurred; or
          ``(2) the country in which the individual suffering the 
        injury or death maintained citizenship or residency at the time 
        of the incident.
``Sec. 30106. Time limit on bringing action
  ``Except as otherwise provided by law, a civil action for damages for 
personal injury or death arising out of a maritime tort must be brought 
within 3 years after the cause of action arose.

                 ``CHAPTER 303--DEATH ON THE HIGH SEAS

``Sec.
``30301.  Short title.
``30302.  Cause of action.
``30303.  Amount and apportionment of recovery.
``30304.  Contributory negligence.
``30305.  Death of plaintiff in pending action.
``30306.  Foreign cause of action.
``30307.  Commercial aviation accidents.
``30308.  Nonapplication.
``Sec. 30301. Short title
  ``This chapter may be cited as the `Death on the High Seas Act'.
``Sec. 30302. Cause of action
  ``When the death of an individual is caused by wrongful act, neglect, 
or default occurring on the high seas beyond a marine league from the 
shore of the United States, the personal representative of the decedent 
may bring a civil action in admiralty against the person or vessel 
responsible. The action shall be for the exclusive benefit of the 
decedent's spouse, parent, child, or dependent relative.
``Sec. 30303. Amount and apportionment of recovery
  ``The recovery in an action under this chapter shall be a fair 
compensation for the pecuniary loss sustained by the individuals for 
whose benefit the action is brought. The court shall apportion the 
recovery among those individuals in proportion to the loss each has 
sustained.
``Sec. 30304. Contributory negligence
  ``In an action under this chapter, contributory negligence of the 
decedent is not a bar to recovery. The court shall consider the degree 
of negligence of the decedent and reduce the recovery accordingly.
``Sec. 30305. Death of plaintiff in pending action
  ``If a civil action in admiralty is pending in a court of the United 
States to recover for personal injury caused by wrongful act, neglect, 
or default described in section 30302 of this title, and the individual 
dies during the action as a result of the wrongful act, neglect, or 
default, the personal representative of the decedent may be substituted 
as the plaintiff and the action may proceed under this chapter for the 
recovery authorized by this chapter.
``Sec. 30306. Foreign cause of action
  ``When a cause of action exists under the law of a foreign country 
for death by wrongful act, neglect, or default on the high seas, a 
civil action in admiralty may be brought in a court of the United 
States based on the foreign cause of action, without abatement for the 
amount for which recovery is authorized.
``Sec. 30307. Commercial aviation accidents
  ``(a) Definition.--In this section, the term `nonpecuniary damages' 
means damages for loss of care, comfort, and companionship.
  ``(b) Beyond 12 Nautical Miles.--In an action under this chapter, if 
the death resulted from a commercial aviation accident occurring on the 
high seas beyond 12 nautical miles from the shore of the United States, 
additional compensation is recoverable for nonpecuniary damages for 
wrongful death, but punitive damages are not recoverable.
  ``(c) Within 12 Nautical Miles.--This chapter does not apply if the 
death resulted from a commercial aviation accident occurring on the 
high seas 12 nautical miles or less from the shore of the United 
States.
``Sec. 30308. Nonapplication
  ``(a) State Law.--This chapter does not affect the law of a State 
regulating the right to recover for death.
  ``(b) Internal Waters.--This chapter does not apply to the Great 
Lakes, waters within the territorial limits of a State, or navigable 
waters in the Panama Canal.

         ``CHAPTER 305--EXONERATION AND LIMITATION OF LIABILITY

``Sec.
``30501.  Definition.
``30502.  Application.
``30503.  Declaration of nature and value of goods.
``30504.  Loss by fire.
``30505.  General limit of liability.
``30506.  Limit of liability for personal injury or death.
``30507.  Apportionment of losses.
``30508.  Provisions requiring notice of claim or limiting time for 
          bringing action.
``30509.  Provisions limiting liability for personal injury or death.
``30510.  Vicarious liability for medical malpractice.
``30511.  Action by owner for limitation.
``30512.  Liability as master, officer, or seaman not affected.
``Sec. 30501. Definition
  ``In this chapter, the term `owner' includes a charterer that mans, 
supplies, and navigates a vessel.
``Sec. 30502. Application
  ``Except as otherwise provided, this chapter (except section 30503) 
applies to seagoing vessels and vessels used on lakes or rivers or in 
inland navigation, including canal boats, barges, and lighters.
``Sec. 30503. Declaration of nature and value of goods
  ``(a) In General.--If a shipper of an item named in subsection (b), 
contained in a parcel, package, or trunk, loads the item as freight or 
baggage on a vessel, without at the time of loading giving to the 
person receiving the item a written notice of the true character and 
value of the item and having that information entered on the bill of 
lading, the owner and master of the vessel are not liable as carriers. 
The owner and master are not liable beyond the value entered on the 
bill of lading.
  ``(b) Items.--The items referred to in subsection (a) are precious 
metals, gold or silver plated articles, precious stones, jewelry, 
trinkets, watches, clocks, glass, china, coins, bills, securities, 
printings, engravings, pictures, stamps, maps, papers, silks, furs, 
lace, and similar items of high value and small size.
``Sec. 30504. Loss by fire
  ``The owner of a vessel is not liable for loss or damage to 
merchandise on the vessel caused by a fire on the vessel unless the 
fire resulted from the design or neglect of the owner.
``Sec. 30505. General limit of liability
  ``(a) In General.--Except as provided in section 30506 of this title, 
the liability of the owner of a vessel for any claim arising from any 
cause, on account of that ownership, without the privity or knowledge 
of the owner is limited to the value of the vessel and pending freight. 
If the vessel has more than one owner, the proportionate share of the 
liability of any one owner is limited to that owner's proportionate 
interest in the vessel and pending freight.
  ``(b) Nonapplication.--This section does not apply to a claim for 
wages.
``Sec. 30506. Limit of liability for personal injury or death
  ``(a) Application.--This section applies only to seagoing vessels, 
but does not apply to pleasure yachts, tugs, towboats, towing vessels, 
tank vessels, fishing vessels, fish tender vessels, canal boats, scows, 
car floats, barges, lighters, or nondescript vessels.
  ``(b) Minimum Liability.--If the amount of the vessel owner's 
liability determined under section 30505 of this title is such that the 
portion available to pay claims for personal injury or death is less 
than $420 times the tonnage of the vessel, that portion shall be 
increased to $420 times the tonnage of the vessel. That portion may be 
used only to pay claims for personal injury or death.
  ``(c) Calculation of Tonnage.--Under subsection (b), the tonnage of a 
self-propelled vessel is the gross tonnage without deduction for 
engineroom, and the tonnage of a sailing vessel is the tonnage for 
documentation. However, space for the use of seamen is excluded.
  ``(d) Claims Arising on Distinct Occasions.--Separate limits of 
liability apply to claims for personal injury or death arising on 
distinct occasions.
  ``(e) Privity or Knowledge.--In a claim for personal injury or death, 
the privity or knowledge of the master or managing agent, at or before 
the beginning of each voyage, is imputed to the owner.
``Sec. 30507. Apportionment of losses
  ``If the amount determined under sections 30505 and 30506 of this 
title is insufficient to pay all claimants, the claimants shall be paid 
in proportion to their respective losses.
``Sec. 30508. Provisions requiring notice of claim or limiting time for 
                    bringing action
  ``(a) Application.--This section applies only to seagoing vessels, 
but does not apply to pleasure yachts, tugs, towboats, towing vessels, 
tank vessels, fishing vessels, fish tender vessels, canal boats, scows, 
car floats, barges, lighters, or nondescript vessels.
  ``(b) Minimum Time Limits.--The owner, master, manager, or agent of a 
vessel transporting passengers or property between ports in the United 
States, or between a port in the United States and a port in a foreign 
country, may not limit by regulation, contract, or otherwise the period 
for--
          ``(1) giving notice of, or filing a claim for, personal 
        injury or death to less than 6 months after the date of the 
        injury or death; or
          ``(2) bringing a civil action for personal injury or death to 
        less than one year after the date of the injury or death.
  ``(c) Effect of Failure To Give Notice.--When notice of a claim for 
personal injury or death is required by a contract, the failure to give 
the notice is not a bar to recovery if--
          ``(1) the court finds that the owner, master, or agent of the 
        vessel had knowledge of the injury or death and the owner has 
        not been prejudiced by the failure;
          ``(2) the court finds there was a satisfactory reason why the 
        notice could not have been given; or
          ``(3) the owner of the vessel fails to object to the failure 
        to give notice.
  ``(d) Tolling of Period To Give Notice.--If a claimant is a minor or 
mental incompetent, or if a claim is for wrongful death, any period 
provided by a contract for giving notice of the claim is tolled until 
the earlier of--
          ``(1) the date a legal representative is appointed for the 
        minor, incompetent, or decedent's estate; or
          ``(2) 3 years after the injury or death.
``Sec. 30509. Provisions limiting liability for personal injury or 
                    death
  ``(a) Prohibition.--
          ``(1) In general.--The owner, master, manager, or agent of a 
        vessel transporting passengers between ports in the United 
        States, or between a port in the United States and a port in a 
        foreign country, may not include in a regulation or contract a 
        provision limiting--
                  ``(A) the liability of the owner, master, or agent 
                for personal injury or death caused by the negligence 
                or fault of the owner or the owner's employees or 
                agents; or
                  ``(B) the right of a claimant for personal injury or 
                death to a trial.
          ``(2) Voidness.--A provision described in paragraph (1) is 
        void.
  ``(b) Emotional Distress, Mental Suffering, and Psychological 
Injury.--
          ``(1) In general.--Subsection (a) does not prohibit a 
        provision in a contract or in ticket conditions of carriage 
        with a passenger that relieves an owner, master, manager, 
        agent, operator, or crewmember of a vessel from liability for 
        infliction of emotional distress, mental suffering, or 
        psychological injury so long as the provision does not limit 
        such liability when the emotional distress, mental suffering, 
        or psychological injury is--
                  ``(A) the result of physical injury to the claimant 
                caused by the negligence or fault of a crewmember or 
                the owner, master, manager, agent, or operator;
                  ``(B) the result of the claimant having been at 
                actual risk of physical injury, and the risk was caused 
                by the negligence or fault of a crewmember or the 
                owner, master, manager, agent, or operator; or
                  ``(C) intentionally inflicted by a crewmember or the 
                owner, master, manager, agent, or operator.
          ``(2) Sexual offenses.--This subsection does not limit the 
        liability of a crewmember or the owner, master, manager, agent, 
        or operator of a vessel in a case involving sexual harassment, 
        sexual assault, or rape.
``Sec. 30510. Vicarious liability for medical malpractice
  ``In a civil action by any person in which the owner or operator of a 
vessel or employer of a crewmember is claimed to have vicarious 
liability for medical malpractice with regard to a crewmember occurring 
at a shoreside facility, and to the extent the damages resulted from 
the conduct of any shoreside doctor, hospital, medical facility, or 
other health care provider, the owner, operator, or employer is 
entitled to rely on any statutory limitations of liability applicable 
to the doctor, hospital, medical facility, or other health care 
provider in the State of the United States in which the shoreside 
medical care was provided.
``Sec. 30511. Action by owner for limitation
  ``(a) In General.--The owner of a vessel may bring a civil action in 
a district court of the United States for limitation of liability under 
this chapter. The action must be brought within 6 months after a 
claimant gives the owner written notice of a claim.
  ``(b) Creation of Fund.--When the action is brought, the owner 
shall--
          ``(1) deposit with the court, for the benefit of claimants--
                  ``(A) an amount equal to the value of the owner's 
                interest in the vessel and pending freight, or approved 
                security; and
                  ``(B) an amount, or approved security, that the court 
                may fix from time to time as necessary to carry out 
                this chapter; or
          ``(2) transfer to a trustee appointed by the court, for the 
        benefit of claimants--
                  ``(A) the owner's interest in the vessel and pending 
                freight; and
                  ``(B) an amount, or approved security, that the court 
                may fix from time to time as necessary to carry out 
                this chapter.
  ``(c) Cessation of Other Actions.--When an action has been brought 
under this section and the owner has complied with subsection (b), all 
claims and proceedings against the owner related to the matter in 
question shall cease.
``Sec. 30512. Liability as master, officer, or seaman not affected
  ``This chapter does not affect the liability of an individual as a 
master, officer, or seaman, even though the individual is also an owner 
of the vessel.

                ``CHAPTER 307--CARRIAGE OF GOODS BY SEA

                          ``SUBCHAPTER I--COGSA

``Sec.
``30701.  Short title.
``30702.  Definitions.
``30703.  Application.
``30704.  Freedom of contract and restrictions.
``30705.  General duties of carrier.
``30706.  Bills of lading.
``30707.  `Shipped' bills of lading.
``30708.  Shipper's guarantee of statements.
``30709.  Limitation on liability when shipper fails to declare nature 
          and value of goods.
``30710.  Weight of bulk cargo.
``30711.  Defenses of carrier and vessel.
``30712.  Dangerous goods.
``30713.  Liability of shipper.
``30714.  Loss or damage.
``30715.  Special agreement about particular goods.
``30716.  Discrimination between competing shippers.
``30717.  Suspension of subchapter by President.
``30718.  Other law not affected.

                         ``SUBCHAPTER II--HARTER

``30731.  Short title.
``30732.  Definition.
``30733.  Application.
``30734.  Bills of lading.
``30735.  General duties of carrier.
``30736.  Defenses of carrier and vessel.
``30737.  Civil penalty.

                         ``SUBCHAPTER I--COGSA

``Sec. 30701. Short title
  ``This subchapter may be cited as the `Carriage of Goods by Sea Act'.
``Sec. 30702. Definitions
  ``In this subchapter:
          ``(1) Bill of lading.--The term `bill of lading' includes any 
        similar document of title insofar as it relates to the carriage 
        of goods by sea.
          ``(2) Carrier.--The term `carrier' includes an owner or 
        charterer of a vessel that makes a contract of carriage with a 
        shipper.
          ``(3) Contract of carriage.--The term `contract of carriage' 
        means a contract of carriage evidenced by a bill of lading.
          ``(4) Goods.--The term `goods' includes goods, wares, 
        merchandise, and articles of every kind, except live animals 
        and cargo that the contract of carriage states will be carried 
        on deck and is carried on deck.
``Sec. 30703. Application
  ``(a) In General.--This subchapter applies to the carriage of goods 
by sea in foreign trade under a contract of carriage from the time the 
goods are loaded on the vessel to the time they are discharged from the 
vessel.
  ``(b) Charter Agreements.--Unless the parties provide otherwise, this 
subchapter does not apply to the carriage of goods under a charter 
agreement. However, if a bill of lading is issued under a charter 
agreement--
          ``(1) the bill of lading shall include the information 
        required by section 30706(b)(1)-(3) of this title; and
          ``(2) this subchapter applies from the moment the bill of 
        lading regulates the relations between a carrier and a holder 
        of the bill of lading.
``Sec. 30704. Freedom of contract and restrictions
  ``(a) In General.--A shipper and a carrier may make an agreement to 
increase any of the carrier's duties and liabilities under this 
subchapter by including the agreement in a bill of lading.
  ``(b) Before Loading and After Discharge.--A shipper and a carrier 
may make an agreement about the duties and liabilities of the carrier 
and the vessel covering the period before the goods are loaded on the 
vessel or after they are discharged from the vessel, except that the 
agreement may not limit the duties and liabilities imposed on the 
carrier and the vessel under subchapter II of this chapter.
  ``(c) Void Provision.--A provision in a contract of carriage limiting 
the liability of a carrier or vessel for failure to satisfy the 
requirements of this subchapter is void. A benefit of insurance in 
favor of the carrier, or a similar clause, is deemed to be a provision 
limiting the carrier's liability.
``Sec. 30705. General duties of carrier
  ``(a) Vessel.--Before and at the beginning of a voyage, the carrier 
shall use due diligence to--
          ``(1) make the vessel seaworthy;
          ``(2) properly man, equip, and supply the vessel; and
          ``(3) make the holds, refrigerating and cooling chambers, and 
        all other parts of the vessel in which goods are carried fit 
        and safe to receive, carry, and preserve the goods.
  ``(b) Goods.--The carrier shall properly and carefully load, carry, 
and discharge the goods.
``Sec. 30706. Bills of lading
  ``(a) Issuance.--On receipt of the goods and demand of the shipper, 
the carrier or the master or agent of the carrier shall issue the 
shipper a bill of lading.
  ``(b) Contents.--The bill of lading shall include--
          ``(1) the marks necessary to identify the goods as provided 
        in writing by the shipper before the loading begins, if they 
        are stamped or otherwise shown clearly on the goods (if 
        uncovered) or their covering or container in a way that 
        ordinarily should remain legible until the end of the voyage;
          ``(2) the number of packages, or the quantity or weight, as 
        provided in writing by the shipper;
          ``(3) the apparent condition of the goods; and
          ``(4) a statement that the bill of lading is subject to this 
        subchapter.
  ``(c) Suspected Inaccuracies.--The bill of lading is not required to 
include a mark, quantity, or weight that the carrier, master, or agent 
has reasonable ground to suspect is inaccurate or has no reasonable 
means of checking.
  ``(d) General Average.--A bill of lading may include a provision on 
general average.
  ``(e) Prima Facie Evidence of Receipt.--A bill of lading is prima 
facie evidence of receipt by the carrier of the goods described in the 
bill of lading.
``Sec. 30707. `Shipped' bills of lading
  ``If the shipper demands, the carrier, master, or agent shall issue a 
`shipped' bill of lading after the goods are loaded on the vessel. If 
the shipper has already received a document of title, the shipper shall 
surrender the document in exchange for the `shipped' bill of lading. 
The carrier, master, or agent may note on the document at the port of 
shipment the names of the vessels and the dates of shipment, and when 
so noted, that document is deemed to be a `shipped' bill of lading.
``Sec. 30708. Shipper's guarantee of statements
  ``The shipper is deemed to have guaranteed to the carrier the 
accuracy at the time of shipment of the marks, number, quantity, and 
weight provided by the shipper. The shipper shall indemnify the carrier 
against loss, damages, and expenses arising from inaccuracies in the 
information. However, the carrier's right to indemnity from the shipper 
does not limit the carrier's liability under the contract of carriage 
to other persons.
``Sec. 30709. Limitation on liability when shipper fails to declare 
                    nature and value of goods
  ``(a) In General.--If the nature and value of the goods are not 
declared by the shipper before shipment and included in the bill of 
lading, the carrier and the vessel are not liable for loss or damage in 
an amount greater than $500 (United States currency or an equivalent 
amount in other currency) for each package or, if the goods are not 
shipped in packages, for each customary freight unit. A declaration of 
the nature and value of the goods in a bill of lading is prima facie 
evidence of the nature and value.
  ``(b) Higher Limit.--A shipper and a carrier may agree on a higher 
limit of liability than provided in subsection (a). However, the 
carrier is not liable for more than the amount of damage actually 
sustained.
  ``(c) Fraud.--If the shipper fraudulently misstates the nature or 
value of the goods in the bill of lading, the carrier and the vessel 
are not liable for loss or damage.
``Sec. 30710. Weight of bulk cargo
  ``If under the custom of a trade the weight of bulk cargo included in 
a bill of lading is a weight ascertained or accepted by a third party 
(other than the carrier and the shipper), and the bill of lading states 
that the weight was ascertained or accepted by a third party, then 
notwithstanding any other provision of this chapter--
          ``(1) the shipper is not deemed to have guaranteed to the 
        carrier the accuracy of the weight; and
          ``(2) the bill of lading is not prima facie evidence against 
        the carrier of receipt of goods of the weight stated in the 
        bill of lading.
``Sec. 30711. Defenses of carrier and vessel
  ``(a) Due Diligence.--If a carrier has used due diligence as required 
by section 30705(a) of this title, the carrier and the vessel are not 
liable for loss or damage caused by unseaworthiness. The burden of 
proving due diligence is on the carrier or other person claiming 
exemption from liability under this subsection.
  ``(b) Other Defenses.--
          ``(1) In general.--A carrier and the vessel are not liable 
        for loss or damage caused by--
                  ``(A) error in the navigation or management of the 
                vessel;
                  ``(B) fire, unless caused by the actual fault or 
                privity of the carrier;
                  ``(C) dangers of the sea or other navigable waters;
                  ``(D) act of God;
                  ``(E) act of war;
                  ``(F) act of public enemies;
                  ``(G) arrest or restraint of princes, rulers, or 
                people, or seizure under legal process;
                  ``(H) quarantine restriction;
                  ``(I) act or omission of the shipper or owner of the 
                goods or their agent;
                  ``(J) strike, lockout, stoppage, or restraint of 
                labor not caused by the carrier;
                  ``(K) riot or civil commotion;
                  ``(L) attempt to save life or property at sea;
                  ``(M) inherent defect, quality, or vice of the goods;
                  ``(N) insufficiency of packaging;
                  ``(O) insufficiency of marks;
                  ``(P) latent defect not discoverable by due 
                diligence; or
                  ``(Q) any other cause arising without the actual 
                fault or privity of the carrier and without the fault 
                or neglect of an agent of the carrier.
          ``(2) Burden of proof.--The burden of proof is on the person 
        claiming the benefit of paragraph (1)(Q) to show that neither 
        the actual fault or privity of the carrier nor the fault or 
        neglect of the carrier's agent contributed to the loss or 
        damage.
  ``(c) Reasonable Deviations.--A reasonable deviation, including a 
deviation to attempt to save life or property at sea, is not a breach 
of a contract of carriage or a violation of this subchapter, and a 
carrier is not liable for loss or damage caused by the deviation. A 
deviation to load or unload passengers or cargo is prima facie 
unreasonable.
``Sec. 30712. Dangerous goods
  ``(a) Shipped Without Knowledge and Consent.--If inflammable, 
explosive, or otherwise dangerous goods are shipped without the 
carrier, master, or agent knowing the nature of the goods and 
consenting to the shipment, the carrier may unload the goods at any 
place, destroy them, or make them innocuous any time before discharge 
of the goods at the port of destination, without liability. The shipper 
is liable for all damages and expenses arising out of the shipment.
  ``(b) Shipped With Knowledge and Consent.--If goods described in 
subsection (a) are shipped with knowledge and consent of the carrier, 
master, or agent, and the goods become a danger to the vessel or other 
cargo on the vessel, the carrier may take any action described in 
subsection (a) without liability except for general average, if any.
``Sec. 30713. Liability of shipper
  ``A shipper is not liable for loss or damage sustained by a carrier 
or vessel arising from any cause without the act or fault of the 
shipper or shipper's agent.
``Sec. 30714. Loss or damage
  ``(a) Inspection.--If loss or damage is suspected, the carrier and 
the person receiving the goods shall give all reasonable facilities to 
each other to inspect and tally the goods.
  ``(b) Notice.--If loss or damage has occurred, the person entitled to 
delivery of the goods shall give written notice of the general nature 
of the loss or damage to the carrier or the carrier's agent. If the 
loss or damage is apparent, the notice shall be given at the port of 
discharge before or at the time of taking custody of the goods. If the 
loss or damage is not apparent, the notice shall be given within 3 days 
after taking custody. Notice of the loss or damage may be written on 
the receipt by the person taking custody. However, notice is not 
required if a joint inspection of the goods is made at or before the 
time of taking custody.
  ``(c) Effect of Failure To Give Notice.--Failure to give notice under 
this section is prima facie evidence of delivery of the goods as 
described in the bill of lading. However, failure to give notice does 
not affect the shipper's right to bring a civil action for the loss or 
damage.
  ``(d) Time Limit on Bringing Action.--A civil action under this 
chapter for loss or damage must be brought within one year after the 
goods are delivered or should have been delivered.
``Sec. 30715. Special agreement about particular goods
  ``(a) Application.--This section applies only to shipments for which 
the character or condition of the goods or the circumstances or terms 
of the carriage reasonably justify a special agreement, and not to 
ordinary commercial shipments made in the ordinary course of trade.
  ``(b) Agreement.--A shipper and a carrier may make a special 
agreement about the carrier's duties and liabilities applicable to the 
carriage of particular goods, including, to the extent not contrary to 
public policy, the duty about seaworthiness.
  ``(c) Bill of Lading Prohibited.--A bill of lading may not be issued 
for goods carried under an agreement under this section. The agreement 
shall be embodied in a receipt which is nonnegotiable and marked as 
such.
``Sec. 30716. Discrimination between competing shippers
  ``A common carrier by water may not discriminate between competing 
shippers similarly placed in time and circumstances in--
          ``(1) issuing bills of lading under this subchapter; or
          ``(2) increasing any of the carrier's duties or liabilities 
        as provided in section 30704(a) of this title.
``Sec. 30717. Suspension of subchapter by President
  ``(a) Authority.--The President, by proclamation, may suspend any of 
the provisions of this subchapter for any period (including 
indefinitely) if the Secretary of Transportation certifies that any of 
those provisions, or the laws of a foreign country related to the 
carriage of goods by sea, prejudice the United States in competing with 
foreign countries in foreign trade.
  ``(b) Rescissions.--The President, by proclamation, may rescind a 
suspension under this section. When a suspension is rescinded, the 
provisions that were suspended are reinstated and apply to a contract 
of carriage made after the suspension is rescinded.
  ``(c) Effective Date of Suspension or Rescission.--A suspension or 
rescission under this section is effective on the date specified in the 
proclamation, but the date shall be at least 10 days after the 
proclamation is issued.
  ``(d) Applicability of Other Law.--Any other provision of law 
applicable to a suspended provision continues to apply.
``Sec. 30718. Other law not affected
  ``This subchapter does not affect chapter 801 of title 49.

                        ``SUBCHAPTER II--HARTER

``Sec. 30731. Short title
  ``This subchapter may be cited as the `Harter Act'.
``Sec. 30732. Definition
  ``In this subchapter, the term `goods' does not include live animals.
``Sec. 30733. Application
  ``(a) In General.--This subchapter applies to the carriage of goods 
by sea under a contract of carriage--
          ``(1) in foreign trade before the goods are loaded on the 
        vessel and after they are discharged from the vessel; or
          ``(2) not in foreign trade.
  ``(b) Agreement To Apply Subchapter I.--A shipper and a carrier may 
agree that the carriage of goods by sea not in foreign trade is to be 
governed by subchapter I of this chapter rather than by this 
subchapter.
``Sec. 30734. Bills of lading
  ``(a) Issuance.--On receipt of the goods and demand of the shipper, 
the carrier or the master or agent of the carrier shall issue the 
shipper a bill of lading or shipping document.
  ``(b) Contents.--The bill of lading or shipping document shall 
include--
          ``(1) the marks necessary to identify the goods;
          ``(2) the number of packages, or the quantity or weight, and 
        whether it is carrier's or shipper's weight; and
          ``(3) the apparent condition of the goods.
  ``(c) Prima Facie Evidence of Receipt.--A bill of lading or shipping 
document is prima facie evidence of receipt by the carrier of the goods 
described in the bill of lading.
``Sec. 30735. General duties of carrier
  ``(a) Vessel.--Before and at the beginning of a voyage, the carrier 
shall use due diligence to--
          ``(1) make the vessel seaworthy; and
          ``(2) properly man, equip, and supply the vessel.
  ``(b) Goods.--The carrier shall properly and carefully load, carry, 
and deliver the goods.
  ``(c) Void Provision.--A provision in a bill of lading or shipping 
document limiting the liability of a carrier or vessel for failure to 
carry out the duties described in this section is void.
``Sec. 30736. Defenses of carrier and vessel
  ``(a) Due Diligence.--If a carrier has used due diligence as required 
by section 30735(a) of this title, the carrier and the vessel are not 
liable for loss or damage caused by an error in the navigation or 
management of the vessel.
  ``(b) Other Defenses.--A carrier and the vessel are not liable for 
loss or damage caused by--
          ``(1) dangers of the sea or other navigable waters;
          ``(2) act of God;
          ``(3) act of public enemies;
          ``(4) seizure under legal process;
          ``(5) act or omission of the shipper or owner of the goods or 
        their agent;
          ``(6) inherent defect, quality, or vice of the goods;
          ``(7) insufficiency of packaging;
          ``(8) attempt to save life or property at sea; or
          ``(9) deviation to save life or property at sea.
``Sec. 30737. Civil penalty
  ``(a) In General.--A carrier, master, or agent of a carrier that 
commits any of the following violations is liable for a civil penalty 
of not more than $2,000:
          ``(1) Refusing to issue on demand a bill of lading or 
        shipping document as required by section 30734 of this title.
          ``(2) Contracting to limit a duty imposed by section 30735 of 
        this title or a liability for breach of the duty.
  ``(b) Lien.--The amount of the penalty and costs of the violation are 
a lien on the vessel whose owner, master, or agent committed the 
violation.
  ``(c) Disposition of Penalty.--Half of the penalty shall be paid to 
the person injured by the violation and half to the United States 
Government.

   ``CHAPTER 309--SUITS IN ADMIRALTY AGAINST UNITED STATES GOVERNMENT

``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 United States Government for salvage services.
``30917.  Disposition of amounts recovered by United States Government.
``30918.  Reports.
``Sec. 30901. Short title
  ``This chapter may be cited as the `Suits in Admiralty Act'.
``Sec. 30902. Definition
  ``In this chapter, the term `federally-owned corporation' means a 
corporation in which the United States Government owns all the 
outstanding capital stock.
``Sec. 30903. Waiver of immunity
  ``(a) In General.--In a case in which, if a vessel were privately 
owned or operated, or if cargo were privately owned or possessed, or if 
a private person or property were involved, a civil action in admiralty 
could be maintained, a civil action in personam may be brought against 
the United States Government or a federally-owned corporation. In a 
civil action in admiralty brought by the Government or a federally-
owned corporation, an admiralty claim in personam may be filed or a 
setoff claimed against the Government or corporation.
  ``(b) Non-Jury.--A claim against the Government or a federally-owned 
corporation under this section shall be tried without a jury.
``Sec. 30904. Exclusive remedy
  ``If a remedy is provided by this chapter, an action arising out of 
the same subject matter may not be brought under any other law against 
an officer, employee, or agent of the United States Government or a 
federally-owned corporation whose act or omission gave rise to the 
claim.
``Sec. 30905. Period for bringing action
  ``A civil action under this chapter must be brought within 2 years 
after the cause of action arose.
``Sec. 30906. Venue
  ``(a) In General.--A civil action under this chapter shall be brought 
in the district court of the United States for the district in which--
          ``(1) any plaintiff resides or has its principal place of 
        business; or
          ``(2) the vessel or cargo is found.
  ``(b) Transfer.--On a motion by a party, the court may transfer the 
action to any other district court of the United States.
``Sec. 30907. Security
  ``Neither the United States Government nor a federally-owned 
corporation may be required to give a bond or admiralty stipulation in 
a civil action under this chapter.
``Sec. 30908. Procedure for hearing and determination
  ``(a) In General.--A civil action under this chapter shall proceed 
and be heard and determined according to the principles of law and the 
rules of practice applicable in like cases between private parties.
  ``(b) In Rem.--
          ``(1) Requirements.--The action may proceed according to the 
        principles of an action in rem if--
                  ``(A) the plaintiff elects in the complaint; and
                  ``(B) it appears that an action in rem could have 
                been maintained had the vessel or cargo been privately 
                owned and possessed.
          ``(2) Effect on relief in personam.--An election under 
        paragraph (1) does not prevent the plaintiff from seeking 
        relief in personam in the same action.
``Sec. 30909. Exoneration and limitation
  ``In a civil action under this chapter, the United States Government 
is entitled to the exemptions from and limitations of liability 
provided by law to an owner, charterer, operator, or agent of a vessel.
``Sec. 30910. Costs and interest
  ``(a) In General.--A judgment against the United States Government or 
a federally-owned corporation under this chapter may include costs and 
interest at the rate of 4 percent a year until satisfied. Interest 
shall run as ordered by the court, except that interest is not 
allowable for the period before the action is filed.
  ``(b) Contract Providing for Interest.--Notwithstanding subsection 
(a), if the claim is based on a contract providing for interest, 
interest may be awarded at the rate and for the period provided in the 
contract.
``Sec. 30911. Arbitration, compromise, or settlement
  ``The Secretary of a department of the United States Government, or 
the board of trustees of a federally-owned corporation, may arbitrate, 
compromise, or settle a claim authorized by this chapter.
``Sec. 30912. Payment of judgment or settlement
  ``(a) In General.--The proper accounting officer of the United States 
Government shall pay a final judgment, arbitration award, or settlement 
under this chapter on presentation of an authenticated copy.
  ``(b) Source of Payment.--Payment shall be made from an appropriation 
or fund available specifically for the purpose. If no appropriation or 
fund is specifically available, there is hereby appropriated, out of 
money in the Treasury not otherwise appropriated, an amount sufficient 
to pay the judgment, award, or settlement.
``Sec. 30913. Exemption from arrest or seizure
  ``The following are not subject to arrest or seizure by judicial 
process in the United States:
          ``(1) A vessel owned by, possessed by, or operated by or for 
        the United States Government or a federally-owned corporation.
          ``(2) Cargo owned or possessed by the Government or a 
        federally-owned corporation.
``Sec. 30914. Release of privately owned vessel after seizure
  ``If a privately owned vessel not in the possession of the United 
States Government or a federally-owned corporation is arrested or 
attached in a civil action arising or alleged to have arisen from prior 
ownership, possession, or operation by the Government or corporation, 
the vessel shall be released without bond or stipulation on a statement 
by the Government, through the Attorney General or other authorized law 
officer, that the Government is interested in the action, desires 
release of the vessel, and assumes liability for the satisfaction of 
any judgment obtained by the plaintiff. After the vessel is released, 
the action shall proceed against the Government in accordance with this 
chapter.
``Sec. 30915. Seizures and other proceedings in foreign jurisdictions
  ``(a) In General.--If a vessel or cargo described in section 30913 or 
30914 of this title is arrested, attached, or otherwise seized by 
judicial process in a foreign country, or if an action is brought in a 
court of a foreign country against the master of such a vessel for a 
claim arising from the ownership, possession, or operation of the 
vessel, or the ownership, possession, or carriage of such cargo, the 
Secretary of State, on request of the Attorney General or another 
officer authorized by the Attorney General, may direct the United 
States consul residing at or nearest the place at which the action was 
brought--
          ``(1) to claim the vessel or cargo as immune from arrest, 
        attachment, or other seizure, and to execute an agreement, 
        stipulation, bond, or undertaking, for the United States 
        Government or federally-owned corporation, for the release of 
        the vessel or cargo and the prosecution of any appeal; or
          ``(2) if an action has been brought against the master of 
        such a vessel, to enter the appearance of the Government or 
        corporation and to pledge the credit of the Government or 
        corporation to the payment of any judgment and costs in the 
        action.
  ``(b) Arranging Bond or Stipulation.--The Attorney General may--
          ``(1) arrange with a bank, surety company, or other person, 
        whether in the United States or a foreign country, to execute a 
        bond or stipulation; and
          ``(2) pledge the credit of the Government to secure the bond 
        or stipulation.
  ``(c) Payment of Judgment.--The appropriate accounting officer of the 
Government or corporation may pay a judgment in an action described in 
subsection (a) on presentation of a copy of the judgment if certified 
by the clerk of the court and authenticated by--
          ``(1) the certificate and seal of the United States consul 
        claiming the vessel or cargo, or by the consul's successor; and
          ``(2) the certificate of the Secretary as to the official 
        capacity of the consul.
  ``(d) Right To Claim Immunity Not Affected.--This section does not 
affect the right of the Government to claim immunity of a vessel or 
cargo from foreign jurisdiction.
``Sec. 30916. Recovery by United States Government for salvage services
  ``(a) Civil Action.--The United States Government, and the crew of a 
merchant vessel owned or operated by the Government, or a federally-
owned corporation, may bring a civil action to recover for salvage 
services provided by the vessel and crew.
  ``(b) Deposit of Amounts Recovered.--Any amount recovered under this 
section by the Government for its own benefit, and not for the benefit 
of the crew, shall be deposited in the Treasury to the credit of the 
department of the Government, or the corporation, having control of the 
possession or operation of the vessel.
``Sec. 30917. Disposition of amounts recovered by United States 
                    Government
  ``Amounts recovered in a civil action brought by the United States 
Government on a claim arising from the ownership, possession, or 
operation of a merchant vessel, or the ownership, possession, or 
carriage of cargo, shall be deposited in the Treasury to the credit of 
the department of the Government, or the federally-owned corporation, 
having control of the vessel or cargo, for reimbursement of the 
appropriation, insurance fund, or other fund from which the 
compensation for which the judgment was recovered was or will be paid.
``Sec. 30918. Reports
  ``The Secretary of each department of the United States Government, 
and the board of trustees of each federally-owned corporation, shall 
report to Congress at each session thereof all arbitration awards and 
settlements agreed to under this chapter since the previous session, 
for which the time to appeal has expired or been waived.

             ``CHAPTER 311--SUITS INVOLVING PUBLIC VESSELS

``Sec.
``31101.  Short title.
``31102.  Waiver of immunity.
``31103.  Applicable procedure.
``31104.  Venue.
``31105.  Security when counterclaim filed.
``31106.  Exoneration and limitation.
``31107.  Interest.
``31108.  Arbitration, compromise, or settlement.
``31109.  Payment of judgment or settlement.
``31110.  Subpoenas to officers or members of crew.
``31111.  Claims by nationals of foreign countries.
``31112.  Lien not recognized or created.
``31113.  Reports.
``Sec. 31101. Short title
  ``This chapter may be cited as the `Public Vessels Act'.
``Sec. 31102. Waiver of immunity
  ``(a) In General.--A civil action in personam in admiralty may be 
brought, or an impleader filed, against the United States Government 
for--
          ``(1) damages caused by a public vessel of the United States; 
        or
          ``(2) compensation for towage and salvage services, including 
        contract salvage, rendered to a public vessel of the United 
        States.
  ``(b) Counterclaim or Setoff.--If the Government brings a civil 
action in admiralty for damages caused by a privately owned vessel, the 
owner of the vessel, or the successor in interest, may file a 
counterclaim in personam, or claim a setoff, against the Government for 
damages arising out of the same subject matter.
``Sec. 31103. Applicable procedure
  ``A civil action under this chapter is subject to the provisions of 
chapter 309 of this title except to the extent inconsistent with this 
chapter.
``Sec. 31104. Venue
  ``(a) In General.--A civil action under this chapter shall be brought 
in the district court of the United States for the district in which 
the vessel or cargo is found within the United States.
  ``(b) Vessel or Cargo Outside Territorial Waters.--If the vessel or 
cargo is outside the territorial waters of the United States--
          ``(1) the action shall be brought in the district court of 
        the United States for any district in which any plaintiff 
        resides or has an office for the transaction of business; or
          ``(2) if no plaintiff resides or has an office for the 
        transaction of business in the United States, the action may be 
        brought in the district court of the United States for any 
        district.
``Sec. 31105. Security when counterclaim filed
  ``If a counterclaim is filed for a cause of action for which the 
original action is filed under this chapter, the respondent to the 
counterclaim shall give security in the usual amount and form to 
respond to the counterclaim, unless the court for cause shown orders 
otherwise. The proceedings in the original action shall be stayed until 
the security is given.
``Sec. 31106. Exoneration and limitation
  ``In a civil action under this chapter, the United States Government 
is entitled to the exemptions from and limitations of liability 
provided by law to an owner, charterer, operator, or agent of a vessel.
``Sec. 31107. Interest
  ``A judgment in a civil action under this chapter may not include 
interest for the period before the judgment is issued unless the claim 
is based on a contract providing for interest.
``Sec. 31108. Arbitration, compromise, or settlement
  ``The Attorney General may arbitrate, compromise, or settle a claim 
authorized by this chapter if the claim actually has been filed.
``Sec. 31109. Payment of judgment or settlement
  ``The proper accounting officer of the United States shall pay a 
final judgment, arbitration award, or settlement under this chapter on 
presentation of an authenticated copy. Payment shall be made from any 
money in the Treasury appropriated for the purpose.
``Sec. 31110. Subpoenas to officers or members of crew
  ``An officer or member of the crew of a public vessel may not be 
subpoenaed in a civil action under this chapter without the consent 
of--
          ``(1) the Secretary of the department or the head of the 
        independent establishment having control of the vessel at the 
        time the cause of action arose; or
          ``(2) the master or commanding officer of the vessel at the 
        time the subpoena is issued.
``Sec. 31111. Claims by nationals of foreign countries
  ``A national of a foreign country may not maintain a civil action 
under this chapter unless it appears to the satisfaction of the court 
in which the action is brought that the government of that country, in 
similar circumstances, allows nationals of the United States to sue in 
its courts.
``Sec. 31112. Lien not recognized or created
  ``This chapter may not be construed as recognizing or creating a lien 
against a public vessel of the United States.
``Sec. 31113. Reports
  ``The Attorney General shall report to Congress at each session 
thereof all claims settled under this chapter.''.

SEC. 6. SUBTITLE IV OF TITLE 46.

  Title 46, United States Code, is amended by inserting after subtitle 
III the following:

              ``Subtitle IV--Regulation of Ocean Shipping

                        ``Part A--Ocean Shipping

``Chapter                                                           Sec.

General............................................................40101
Agreements.........................................................40301
Tariffs, Service Contracts, Refunds, and Waivers...................40501
Controlled Carriers................................................40701
Ocean Transportation Intermediaries................................40901
Prohibitions and Penalties.........................................41101
Enforcement........................................................41301

             ``Part B--Actions To Address Foreign Practices

Regulations Affecting Shipping in Foreign Trade....................42101
Foreign Shipping Practices.........................................42301

                        ``Part C--Miscellaneous

Evidence of Financial Responsibility for Passenger Transportation..44101

                        ``Part A--Ocean Shipping

                         ``CHAPTER 401--GENERAL

``Sec.
``40101.  Purposes.
``40102.  Definitions.
``40103.  Administrative exemptions.
``40104.  Reports filed with the Commission.
``Sec. 40101. Purposes
  ``The purposes of this part are to--
          ``(1) establish a nondiscriminatory regulatory process for 
        the common carriage of goods by water in the foreign commerce 
        of the United States with a minimum of government intervention 
        and regulatory costs;
          ``(2) provide an efficient and economic transportation system 
        in the ocean commerce of the United States that is, insofar as 
        possible, in harmony with, and responsive to, international 
        shipping practices;
          ``(3) encourage the development of an economically sound and 
        efficient United States-flag liner fleet capable of meeting 
        national security needs; and
          ``(4) promote the growth and development of United States 
        exports through competitive and efficient ocean transportation 
        and by placing a greater reliance on the marketplace.
``Sec. 40102. Definitions
  ``In this part:
          ``(1) Agreement.--The term `agreement'--
                  ``(A) means a written or oral understanding, 
                arrangement, or association, and any modification or 
                cancellation thereof; but
                  ``(B) does not include a maritime labor agreement.
          ``(2) Antitrust laws.--The term `antitrust laws' means--
                  ``(A) the Sherman Act (15 U.S.C. 1 et seq.);
                  ``(B) sections 73 and 74 of the Wilson Tariff Act (15 
                U.S.C. 8, 9);
                  ``(C) the Clayton Act (15 U.S.C. 12 et seq.);
                  ``(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a, 
                13b, 21a);
                  ``(E) the Federal Trade Commission Act (15 U.S.C. 41 
                et seq.);
                  ``(F) the Antitrust Civil Process Act (15 U.S.C. 1311 
                et seq.); and
                  ``(G) Acts supplementary to those Acts.
          ``(3) Assessment agreement.--The term `assessment agreement' 
        means an agreement, whether part of a collective bargaining 
        agreement or negotiated separately, to the extent the agreement 
        provides for the funding of collectively bargained fringe-
        benefit obligations on other than a uniform worker-hour basis, 
        regardless of the cargo handled or type of vessel or equipment 
        used.
          ``(4) Bulk cargo.--The term `bulk cargo' means cargo that is 
        loaded and carried in bulk without mark or count.
          ``(5) Chemical parcel-tanker.--The term `chemical parcel-
        tanker' means a vessel that has--
                  ``(A) a cargo-carrying capability consisting of 
                individual cargo tanks for bulk chemicals that--
                          ``(i) are a permanent part of the vessel; and
                          ``(ii) have segregation capability with 
                        piping systems to permit simultaneous carriage 
                        of several bulk chemical cargoes with minimum 
                        risk of cross-contamination; and
                  ``(B) a valid certificate of fitness under the 
                International Maritime Organization Code for the 
                Construction and Equipment of Ships Carrying Dangerous 
                Chemicals in Bulk.
          ``(6) Common carrier.--The term `common carrier'--
                  ``(A) means a person that--
                          ``(i) holds itself out to the general public 
                        to provide transportation by water of 
                        passengers or cargo between the United States 
                        and a foreign country for compensation;
                          ``(ii) assumes responsibility for the 
                        transportation from the port or point of 
                        receipt to the port or point of destination; 
                        and
                          ``(iii) uses, for all or part of that 
                        transportation, a vessel operating on the high 
                        seas or the Great Lakes between a port in the 
                        United States and a port in a foreign country; 
                        but
                  ``(B) does not include a carrier engaged in ocean 
                transportation by ferry boat, ocean tramp, or chemical 
                parcel-tanker, or by vessel when primarily engaged in 
                the carriage of perishable agricultural commodities--
                          ``(i) if the carrier and the owner of those 
                        commodities are wholly-owned, directly or 
                        indirectly, by a person primarily engaged in 
                        the marketing and distribution of those 
                        commodities; and
                          ``(ii) only with respect to the carriage of 
                        those commodities.
          ``(7) Conference.--The term `conference'--
                  ``(A) means an association of ocean common carriers 
                permitted, pursuant to an approved or effective 
                agreement, to engage in concerted activity and to use a 
                common tariff; but
                  ``(B) does not include a joint service, consortium, 
                pooling, sailing, or transshipment agreement.
          ``(8) Controlled carrier.--The term `controlled carrier' 
        means an ocean common carrier that is, or whose operating 
        assets are, directly or indirectly, owned or controlled by a 
        government, with ownership or control by a government being 
        deemed to exist for a carrier if--
                  ``(A) a majority of the interest in the carrier is 
                owned or controlled in any manner by that government, 
                an agency of that government, or a public or private 
                person controlled by that government; or
                  ``(B) that government has the right to appoint or 
                disapprove the appointment of a majority of the 
                directors, the chief operating officer, or the chief 
                executive officer of the carrier.
          ``(9) Deferred rebate.--The term `deferred rebate' means a 
        return by a common carrier of any freight money to a shipper, 
        where the return is--
                  ``(A) consideration for the shipper giving any 
                portion of its shipments to that or any other common 
                carrier over a fixed period of time;
                  ``(B) deferred beyond the completion of the service 
                for which it was paid; and
                  ``(C) made only if the shipper has agreed to make a 
                further shipment with that or any other common carrier.
          ``(10) Forest products.--The term `forest products' includes 
        lumber in bundles, rough timber, ties, poles, piling, laminated 
        beams, bundled siding, bundled plywood, bundled core stock or 
        veneers, bundled particle or fiber boards, bundled hardwood, 
        wood pulp in rolls, wood pulp in unitized bales, and paper and 
        paper board in rolls or in pallet or skid-sized sheets.
          ``(11) Inland division.--The term `inland division' means the 
        amount paid by a common carrier to an inland carrier for the 
        inland portion of through transportation offered to the public 
        by the common carrier.
          ``(12) Inland portion.--The term `inland portion' means the 
        charge to the public by a common carrier for the non-ocean 
        portion of through transportation.
          ``(13) Loyalty contract.--The term `loyalty contract' means a 
        contract with an ocean common carrier or agreement providing 
        for--
                  ``(A) a shipper to obtain lower rates by committing 
                all or a fixed portion of its cargo to that carrier or 
                agreement; and
                  ``(B) a deferred rebate arrangement.
          ``(14) Marine terminal operator.--The term `marine terminal 
        operator' means a person engaged in the United States in the 
        business of providing wharfage, dock, warehouse, or other 
        terminal facilities in connection with a common carrier, or in 
        connection with a common carrier and a water carrier subject to 
        subchapter II of chapter 135 of title 49.
          ``(15) Maritime labor agreement.--The term `maritime labor 
        agreement'--
                  ``(A) means--
                          ``(i) a collective bargaining agreement 
                        between an employer subject to this part, or a 
                        group of such employers, and a labor 
                        organization representing employees in the 
                        maritime or stevedoring industry;
                          ``(ii) an agreement preparatory to such a 
                        collective bargaining agreement among members 
                        of a multi-employer bargaining group; or
                          ``(iii) an agreement specifically 
                        implementing provisions of such a collective 
                        bargaining agreement or providing for the 
                        formation, financing, or administration of a 
                        multi-employer bargaining group; but
                  ``(B) does not include an assessment agreement.
          ``(16) Non-vessel-operating common carrier.--The term `non-
        vessel-operating common carrier' means a common carrier that--
                  ``(A) does not operate the vessels by which the ocean 
                transportation is provided; and
                  ``(B) is a shipper in its relationship with an ocean 
                common carrier.
          ``(17) Ocean common carrier.--The term `ocean common carrier' 
        means a vessel-operating common carrier.
          ``(18) Ocean freight forwarder.--The term `ocean freight 
        forwarder' means a person that--
                  ``(A) in the United States, dispatches shipments from 
                the United States via a common carrier and books or 
                otherwise arranges space for those shipments on behalf 
                of shippers; and
                  ``(B) processes the documentation or performs related 
                activities incident to those shipments.
          ``(19) Ocean transportation intermediary.--The term `ocean 
        transportation intermediary' means an ocean freight forwarder 
        or a non-vessel-operating common carrier.
          ``(20) Service contract.--The term `service contract' means a 
        written contract, other than a bill of lading or receipt, 
        between one or more shippers, on the one hand, and an 
        individual ocean common carrier or an agreement between or 
        among ocean common carriers, on the other, in which--
                  ``(A) the shipper or shippers commit to providing a 
                certain volume or portion of cargo over a fixed time 
                period; and
                  ``(B) the ocean common carrier or the agreement 
                commits to a certain rate or rate schedule and a 
                defined service level, such as assured space, transit 
                time, port rotation, or similar service features.
          ``(21) Shipment.--The term `shipment' means all of the cargo 
        carried under the terms of a single bill of lading.
          ``(22) Shipper.--The term `shipper' means--
                  ``(A) a cargo owner;
                  ``(B) the person for whose account the ocean 
                transportation of cargo is provided;
                  ``(C) the person to whom delivery is to be made;
                  ``(D) a shippers' association; or
                  ``(E) a non-vessel-operating common carrier that 
                accepts responsibility for payment of all charges 
                applicable under the tariff or service contract.
          ``(23) Shippers' association.--The term `shippers' 
        association' means a group of shippers that consolidates or 
        distributes freight on a nonprofit basis for the members of the 
        group to obtain carload, truckload, or other volume rates or 
        service contracts.
          ``(24) Through rate.--The term `through rate' means the 
        single amount charged by a common carrier in connection with 
        through transportation.
          ``(25) Through transportation.--The term `through 
        transportation' means continuous transportation between origin 
        and destination for which a through rate is assessed and which 
        is offered or performed by one or more carriers, at least one 
        of which is a common carrier, between a United States port or 
        point and a foreign port or point.
``Sec. 40103. Administrative exemptions
  ``(a) In General.--The Federal Maritime Commission, on application or 
its own motion, may by order or regulation exempt for the future any 
class of agreements between persons subject to this part or any 
specified activity of those persons from any requirement of this part 
if the Commission finds that the exemption will not result in 
substantial reduction in competition or be detrimental to commerce. The 
Commission may attach conditions to an exemption and may, by order, 
revoke an exemption.
  ``(b) Opportunity for Hearing.--An order or regulation of exemption 
or revocation of an exemption may be issued only if the Commission has 
provided an opportunity for a hearing to interested persons and 
departments and agencies of the United States Government.
``Sec. 40104. Reports filed with the Commission
  ``(a) In General.--The Federal Maritime Commission may require a 
common carrier or an officer, receiver, trustee, lessee, agent, or 
employee of the carrier to file with the Commission a periodical or 
special report, an account, record, rate, or charge, or a memorandum of 
facts and transactions related to the business of the carrier. The 
report, account, record, rate, charge, or memorandum shall be made 
under oath if the Commission requires, and shall be filed in the form 
and within the time prescribed by the Commission.
  ``(b) Conference Minutes.--Conference minutes required to be filed 
with the Commission under this section may not be released to third 
parties or published by the Commission.

                       ``CHAPTER 403--AGREEMENTS

``Sec.
``40301.  Application.
``40302.  Filing requirements.
``40303.  Content requirements.
``40304.  Commission action.
``40305.  Assessment agreements.
``40306.  Nondisclosure of information.
``40307.  Exemption from antitrust laws.
``Sec. 40301. Application
  ``(a) Ocean Common Carrier Agreements.--This part applies to an 
agreement between or among ocean common carriers to--
          ``(1) discuss, fix, or regulate transportation rates, 
        including through rates, cargo space accommodations, and other 
        conditions of service;
          ``(2) pool or apportion traffic, revenues, earnings, or 
        losses;
          ``(3) allot ports or regulate the number and character of 
        voyages between ports;
          ``(4) regulate the volume or character of cargo or passenger 
        traffic to be carried;
          ``(5) engage in an exclusive, preferential, or cooperative 
        working arrangement between themselves or with a marine 
        terminal operator;
          ``(6) control, regulate, or prevent competition in 
        international ocean transportation; or
          ``(7) discuss and agree on any matter related to a service 
        contract.
  ``(b) Marine Terminal Operator Agreements.--This part applies to an 
agreement between or among marine terminal operators, or between or 
among one or more marine terminal operators and one or more ocean 
common carriers, to--
          ``(1) discuss, fix, or regulate rates or other conditions of 
        service; or
          ``(2) engage in exclusive, preferential, or cooperative 
        working arrangements, to the extent the agreement involves 
        ocean transportation in the foreign commerce of the United 
        States.
  ``(c) Acquisitions.--This part does not apply to an acquisition by 
any person, directly or indirectly, of any voting security or assets of 
any other person.
  ``(d) Maritime Labor Agreements.--This part does not apply to a 
maritime labor agreement. However, this subsection does not exempt from 
this part any rate, charge, regulation, or practice of a common carrier 
that is required to be set forth in a tariff or is an essential term of 
a service contract, whether or not the rate, charge, regulation, or 
practice arises out of, or is otherwise related to, a maritime labor 
agreement.
  ``(e) Assessment Agreements.--This part (except sections 40305 and 
40307(a)) does not apply to an assessment agreement.
``Sec. 40302. Filing requirements
  ``(a) In General.--A true copy of every agreement referred to in 
section 40301(a) or (b) of this title shall be filed with the Federal 
Maritime Commission. If the agreement is oral, a complete memorandum 
specifying in detail the substance of the agreement shall be filed.
  ``(b) Exceptions.--Subsection (a) does not apply to--
          ``(1) an agreement related to transportation to be performed 
        within or between foreign countries; or
          ``(2) an agreement among common carriers to establish, 
        operate, or maintain a marine terminal in the United States.
  ``(c) Regulations.--The Commission may by regulation prescribe the 
form and manner in which an agreement shall be filed and any additional 
information and documents necessary to evaluate the agreement.
``Sec. 40303. Content requirements
  ``(a) Ocean Common Carrier Agreements.--
          ``(1) Restrictions.--An ocean common carrier agreement may 
        not--
                  ``(A) prohibit or restrict a member of the agreement 
                from engaging in negotiations for a service contract 
                with a shipper;
                  ``(B) require a member of the agreement to disclose a 
                negotiation on a service contract, or the terms of a 
                service contract, otherthan those terms required to be 
published under section 40502(d) of this title; or
                  ``(C) adopt mandatory rules or requirements affecting 
                the right of an agreement member to negotiate and enter 
                into a service contract.
          ``(2) Voluntary guidelines.--An ocean common carrier 
        agreement may provide authority to adopt voluntary guidelines 
        relating to the terms and procedures of an agreement member's 
        service contracts if the guidelines explicitly state the right 
        of members of the agreement not to follow the guidelines. Any 
        guidelines adopted shall be submitted confidentially to the 
        Federal Maritime Commission.
  ``(b) Conference Agreements.--Each conference agreement must--
          ``(1) state its purpose;
          ``(2) provide reasonable and equal terms for admission and 
        readmission to conference membership for any ocean common 
        carrier willing to serve the particular trade or route;
          ``(3) permit any member to withdraw from conference 
        membership on reasonable notice without penalty;
          ``(4) at the request of any member, require an independent 
        neutral body to police fully the obligations of the conference 
        and its members;
          ``(5) prohibit the conference from engaging in conduct 
        prohibited by section 41105(1) or (3) of this title;
          ``(6) provide for a consultation process designed to 
        promote--
                  ``(A) commercial resolution of disputes; and
                  ``(B) cooperation with shippers in preventing and 
                eliminating malpractices;
          ``(7) establish procedures for promptly and fairly 
        considering requests and complaints of shippers; and
          ``(8) provide that--
                  ``(A) any member of the conference may take 
                independent action on a rate or service item on not 
                more than 5 days' notice to the conference; and
                  ``(B) except for an exempt commodity not published in 
                the conference tariff, the conference will include the 
                new rate or service item in its tariff for use by that 
                member, effective no later than 5 days after receipt of 
                the notice, and by any other member that notifies the 
                conference that it elects to adopt the independent rate 
                or service item on or after its effective date, in lieu 
                of the existing conference tariff provision for that 
                rate or service item.
  ``(c) Interconference Agreements.--Each agreement between carriers 
not members of the same conference must provide the right of 
independent action for each carrier. Each agreement between conferences 
must provide the right of independent action for each conference.
  ``(d) Vessel Sharing Agreements.--
          ``(1) In general.--An ocean common carrier that is the owner, 
        operator, or bareboat, time, or slot charterer of a United 
        States-flag liner vessel documented under section 12103 or 
        12111(c) of this title may agree with an ocean common carrier 
        described in paragraph (2) to which it charters or subcharters 
        the vessel or space on the vessel that the charterer or 
        subcharterer may not use or make available space on the vessel 
        for the carriage of cargo reserved by law for United States-
        flag vessels.
          ``(2) Charterer described.--A charterer or subcharterer 
        referred to in paragraph (1) is one that is not--
                  ``(A) the owner of a United States-flag liner vessel 
                eligible to be included in the Maritime Security Fleet 
                Program and enrolled in an Emergency Preparedness 
                Program under chapter 531 of this title; or
                  ``(B) the operator or bareboat charterer of such a 
                vessel for a period of at least one year.
``Sec. 40304. Commission action
  ``(a) Notice of Filing.--Within 7 days after an agreement is filed, 
the Federal Maritime Commission shall transmit a notice of the filing 
to the Federal Register for publication.
  ``(b) Preliminary Review and Rejection.--After preliminary review, 
the Commission shall reject an agreement that it finds does not meet 
the requirements of sections 40302 and 40303 of this title. The 
Commission shall notify in writing the person filing the agreement of 
the reason for rejection.
  ``(c) Review and Effective Date.--Unless rejected under subsection 
(b), an agreement (other than an assessment agreement) is effective--
          ``(1) on the 45th day after filing, or on the 30th day after 
        notice of the filing is published in the Federal Register, 
        whichever is later; or
          ``(2) if additional information or documents are requested 
        under subsection (d)--
                  ``(A) on the 45th day after the Commission receives 
                all the additional information and documents; or
                  ``(B) if the request is not fully complied with, on 
                the 45th day after the Commission receives the 
                information and documents submitted and a statement of 
                the reasons for noncompliance with the request.
  ``(d) Request for Additional Information.--Before the expiration of 
the period specified in subsection (c)(1), the Commission may request 
from the person filing the agreement any additional information and 
documents the Commission considers necessary to make the determinations 
required by this section.
  ``(e) Modification of Review Period.--
          ``(1) Shortening.--On request of the party filing an 
        agreement, the Commission may shorten a period specified in 
        subsection (c), but not to a date that is less than 14 days 
        after notice of the filing of the agreement is published in the 
        Federal Register.
          ``(2) Extension.--The period specified in subsection (c)(2) 
        may be extended only by the United States District Court for 
        the District of Columbia in a civil action brought by the 
        Commission under section 41307(c) of this title.
  ``(f) Fixed Terms.--The Commission may not limit the effectiveness of 
an agreement to a fixed term.
``Sec. 40305. Assessment agreements
  ``(a) Filing Requirement.--An assessment agreement shall be filed 
with the Federal Maritime Commission and is effective on filing.
  ``(b) Complaints.--If a complaint is filed with the Commission within 
2 years after the date of an assessment agreement, the Commission shall 
disapprove, cancel, or modify the agreement, or an assessment or charge 
pursuant to the agreement, that the Commission finds, after notice and 
opportunity for a hearing, to be unjustly discriminatory or unfair as 
between carriers, shippers, or ports. The Commission shall issue its 
final decision in the proceeding within one year after the date the 
complaint is filed.
  ``(c) Adjustments of Assessments and Charges.--To the extent that the 
Commission finds under subsection (b) that an assessment or charge is 
unjustly discriminatory or unfair as between carriers, shippers, or 
ports, the Commission shall adjust the assessment or charge for the 
period between the filing of the complaint and the final decision by 
awarding prospective credits or debits to future assessments and 
charges. However, if the complainant has ceased activities subject to 
the assessment or charge, the Commission may award reparations.
``Sec. 40306. Nondisclosure of information
  ``Information and documents (other than an agreement) filed with the 
Federal Maritime Commission under this chapter are exempt from 
disclosure under section 552 of title 5 and may not be made public 
except as may be relevant to an administrative or judicial proceeding. 
This section does not prevent disclosure to either House of Congress or 
to a duly authorized committee or subcommittee of Congress.
``Sec. 40307. Exemption from antitrust laws
  ``(a) In General.--The antitrust laws do not apply to--
          ``(1) an agreement (including an assessment agreement) that 
        has been filed and is effective under this chapter;
          ``(2) an agreement that is exempt under section 40103 of this 
        title from any requirement of this part;
          ``(3) an agreement or activity within the scope of this part, 
        whether permitted under or prohibited by this part, undertaken 
        or entered into with a reasonable basis to conclude that it 
        is--
                  ``(A) pursuant to an agreement on file with the 
                Federal Maritime Commission and in effect when the 
                activity takes place; or
                  ``(B) exempt under section 40103 of this title from 
                any filing or publication requirement of this part;
          ``(4) an agreement or activity relating to transportation 
        services within or between foreign countries, whether or not 
        via the United States, unless the agreement or activity has a 
        direct, substantial, and reasonably foreseeable effect on the 
        commerce of the United States;
          ``(5) an agreement or activity relating to the foreign inland 
        segment of through transportation that is part of 
        transportation provided in a United States import or export 
        trade;
          ``(6) an agreement or activity to provide wharfage, dock, 
        warehouse, or other terminal facilities outside the United 
        States; or
          ``(7) an agreement, modification, or cancellation approved 
        before June 18, 1984, by the Commission under section 15 of the 
        Shipping Act, 1916, or permitted under section 14b of that Act, 
        and any properly published tariff, rate, fare, or charge, or 
        classification, rule, or regulation explanatory thereof 
        implementing that agreement, modification, or cancellation.
  ``(b) Exceptions.--This part does not extend antitrust immunity to--
          ``(1) an agreement with or among air carriers, rail carriers, 
        motor carriers, or common carriers by water not subject to this 
        part relating to transportation within the United States;
          ``(2) a discussion or agreement among common carriers subject 
        to this part relating to the inland divisions (as opposed to 
        the inland portions) of through rates within the United States;
          ``(3) an agreement among common carriers subject to this part 
        to establish, operate, or maintain a marine terminal in the 
        United States; or
          ``(4) a loyalty contract.
  ``(c) Retroactive Effect of Determinations.--A determination by an 
agency or court that results in the denial or removal of the immunity 
to the antitrust laws under subsection (a) does not remove or alter the 
antitrust immunity for the period before the determination.
  ``(d) Relief Under Clayton Act.--A person may not recover damages 
under section 4 of the Clayton Act (15 U.S.C. 15), or obtain injunctive 
relief under section 16 of that Act (15 U.S.C. 26), for conduct 
prohibited by this part.

    ``CHAPTER 405--TARIFFS, SERVICE CONTRACTS, REFUNDS, AND WAIVERS

``Sec.
``40501.  General rate and tariff requirements.
``40502.  Service contracts.
``40503.  Refunds and waivers.
``Sec. 40501. General rate and tariff requirements
  ``(a) Automated Tariff System.--
          ``(1) In general.--Each common carrier and conference shall 
        keep open to public inspection in an automated tariff system, 
        tariffs showing all its rates, charges, classifications, rules, 
        and practices between all points or ports on its own route and 
        on any through transportation route that has been established. 
        However, a common carrier is not required to state separately 
        or otherwise reveal in tariffs the inland divisions of a 
        through rate.
          ``(2) Exceptions.--Paragraph (1) does not apply with respect 
        to bulk cargo, forest products, recycled metal scrap, new 
        assembled motor vehicles, waste paper, or paper waste.
  ``(b) Contents of Tariffs.--A tariff under subsection (a) shall--
          ``(1) state the places between which cargo will be carried;
          ``(2) list each classification of cargo in use;
          ``(3) state the level of compensation of any ocean freight 
        forwarder by a carrier or conference;
          ``(4) state separately each terminal or other charge, 
        privilege, or facility under the control of the carrier or 
        conference and any rules that in any way change, affect, or 
        determine any part or the total of the rates or charges;
          ``(5) include sample copies of any bill of lading, contract 
        of affreightment, or other document evidencing the 
        transportation agreement; and
          ``(6) include copies of any loyalty contract, omitting the 
        shipper's name.
  ``(c) Electronic Access.--A tariff under subsection (a) shall be made 
available electronically to any person, without time, quantity, or 
other limitation, through appropriate access from remote locations. A 
reasonable fee may be charged for such access, except that no fee may 
be charged for access by a Federal agency.
  ``(d) Time-Volume Rates.--A rate contained in a tariff under 
subsection (a) may vary with the volume of cargo offered over a 
specified period of time.
  ``(e) Effective Dates.--
          ``(1) Increases.--A new or initial rate or change in an 
        existing rate that results in an increased cost to a shipper 
        may not become effective earlier than 30 days after 
        publication. However, for good cause, the Federal Maritime 
        Commission may allow the rate to become effective sooner.
          ``(2) Decreases.--A change in an existing rate that results 
        in a decreased cost to a shipper may become effective on 
        publication.
  ``(f) Marine Terminal Operator Schedules.--A marine terminal operator 
may make available to the public a schedule of rates, regulations, and 
practices, including limitations of liability for cargo loss or damage, 
pertaining to receiving, delivering, handling, or storing property at 
its marine terminal. Any such schedule made available to the public is 
enforceable by an appropriate court as an implied contract without 
proof of actual knowledge of its provisions.
  ``(g) Regulations.--
          ``(1) In general.--The Commission shall by regulation 
        prescribe the requirements for the accessibility and accuracy 
        of automated tariff systems established under this section. The 
        Commission, after periodic review, may prohibit the use of any 
        automated tariff system that fails to meet the requirements 
        established under this section.
          ``(2) Remote terminals.--The Commission may not require a 
        common carrier to provide a remote terminal for electronic 
        access under subsection (c).
          ``(3) Marine terminal operator schedules.--The Commission 
        shall by regulation prescribe the form and manner in which 
        marine terminal operator schedules authorized by this section 
        shall be published.
``Sec. 40502. Service contracts
  ``(a) In General.--An individual ocean common carrier or an agreement 
between or among ocean common carriers may enter into a service 
contract with one or more shippers subject to the requirements of this 
part.
  ``(b) Filing Requirements.--
          ``(1) In general.--Each service contract entered into under 
        this section by an individual ocean common carrier or an 
        agreement shall be filed confidentially with the Federal 
        Maritime Commission.
          ``(2) Exceptions.--Paragraph (1) does not apply to contracts 
        regarding bulk cargo, forest products, recycled metal scrap, 
        new assembled motor vehicles, waste paper, or paper waste.
  ``(c) Essential Terms.--Each service contract shall include--
          ``(1) the origin and destination port ranges;
          ``(2) the origin and destination geographic areas in the case 
        of through intermodal movements;
          ``(3) the commodities involved;
          ``(4) the minimum volume or portion;
          ``(5) the line-haul rate;
          ``(6) the duration;
          ``(7) service commitments; and
          ``(8) the liquidated damages for nonperformance, if any.
  ``(d) Publication of Certain Terms.--When a service contract is filed 
confidentially with the Commission, a concise statement of the 
essential terms specified in clauses (1), (3), (4), and (6) of 
subsection (c) shall be published and made available to the general 
public in tariff format.
  ``(e) Disclosure of Certain Terms.--
          ``(1) Definitions.--In this subsection, the terms `dock area' 
        and `within the port area' have the same meaning and scope as 
        in the applicable collective bargaining agreement between the 
        requesting labor organization and the carrier.
          ``(2) Disclosure.--An ocean common carrier that is a party to 
        or is otherwise subject to a collective bargaining agreement 
        with a labor organization shall, in response to a written 
        request by the labor organization, state whether it is 
        responsible for the following work at a dock area or within a 
        port area in the United States with respect to cargo 
        transportation under a service contract:
                  ``(A) The movement of the shipper's cargo on a dock 
                area or within the port area or to or from railroad 
                cars on a dock area or within the port area.
                  ``(B) The assignment of intraport carriage of the 
                shipper's cargo between areas on a dock or within the 
                port area.
                  ``(C) The assignment of the carriage of the shipper's 
                cargo between a container yard on a dock area or within 
                the port area and a rail yard adjacent to the container 
                yard.
                  ``(D) The assignment of container freight station 
                work and container maintenance and repair work 
                performed at a dock area or within the port area.
          ``(3) Within reasonable time.--The common carrier shall 
        provide the information described in paragraph (2) to the 
        requesting labor organization within a reasonable period of 
        time.
          ``(4) Existence of collective bargaining agreement.--This 
        subsection does not require the disclosure of information by an 
        ocean common carrier unless there exists an applicable and 
        otherwise lawful collective bargaining agreement pertaining to 
        that carrier. A disclosure by an ocean common carrier may not 
        be deemed an admission or an agreement that any work is covered 
        by a collective bargaining agreement. A dispute about whether 
        any work is covered by a collective bargaining agreement and 
        the responsibility of an ocean common carrier under a 
        collective bargaining agreement shall be resolved solely in 
        accordance with the dispute resolution procedures contained in 
        the collective bargaining agreement and the National Labor 
        Relations Act (15 U.S.C. 151 et seq.), and without reference to 
        this subsection.
          ``(5) Effect under other laws.--This subsection does not 
        affect the lawfulness or unlawfulness under this part or any 
        other Federal or State law of any collective bargaining 
        agreement or element thereof, including any element that 
        constitutes an essential term of a service contract.
  ``(f) Remedy for Breach.--Unless the parties agree otherwise, the 
exclusive remedy for a breach of a service contract is an action in an 
appropriate court. The contract dispute resolution forum may not be 
controlled by or in any way affiliated with a controlled carrier or by 
the government that owns or controls the carrier.
``Sec. 40503. Refunds and waivers
  ``The Federal Maritime Commission, on application of a carrier or 
shipper, may permit a common carrier or conference to refund a portion 
of the freight charges collected from a shipper, or to waive collection 
of a portion of the charges from a shipper, if--
          ``(1) there is an error in a tariff, a failure to publish a 
        new tariff, or an error in quoting a tariff, and the refund or 
        waiver will not result in discrimination among shippers, ports, 
        or carriers;
          ``(2) the common carrier or conference, before filing an 
        application for authority to refund or waive any charges for an 
        error in a tariff or a failure to publish a tariff, has 
        published a new tariff setting forth the rate on which the 
        refund or waiver would be based; and
          ``(3) the application for the refund or waiver is filed with 
        the Commission within 180 days from the date of shipment.

                   ``CHAPTER 407--CONTROLLED CARRIERS

``Sec.
``40701.  Rates.
``40702.  Rate standards.
``40703.  Effective date of rates.
``40704.  Commission review.
``40705.  Presidential review of Commission orders.
``40706.  Exceptions.
``Sec. 40701. Rates
  ``(a) In General.--A controlled carrier may not--
          ``(1) maintain a rate or charge in a tariff or service 
        contract, or charge or assess a rate, that is below a just and 
        reasonable level; or
          ``(2) establish, maintain, or enforce in a tariff or service 
        contract a classification, rule, or regulation that results, or 
        is likely to result, in the carriage or handling of cargo at a 
        rate or charge that is below a just and reasonable level.
  ``(b) Commission Prohibition.--The Federal Maritime Commission, at 
any time after notice and opportunity for a hearing, may prohibit the 
publication or use of a rate, charge, classification, rule, or 
regulation that a controlled carrier has failed to demonstrate is just 
and reasonable.
  ``(c) Burden of Proof.--In a proceeding under this section, the 
burden of proof is on the controlled carrier to demonstrate that its 
rate, charge, classification, rule, or regulation is just and 
reasonable.
  ``(d) Voidness.--A rate, charge, classification, rule, or regulation 
that has been suspended or prohibited by the Commission is void and its 
use is unlawful.
``Sec. 40702. Rate standards
  ``(a) Definition.--In this section, the term `constructive costs' 
means the costs of another carrier, other than a controlled carrier, 
operating similar vessels and equipment in the same or a similar trade.
  ``(b) Standards.--In determining whether a rate, charge, 
classification, rule, or regulation of a controlled carrier is just and 
reasonable, the Federal Maritime Commission--
          ``(1) shall take into account whether the rate or charge that 
        has been published or assessed, or that would result from the 
        pertinent classification, rule, or regulation, is below a level 
        that is fully compensatory to the controlled carrier based on 
        the carrier's actual costs or constructive costs; and
          ``(2) may take into account other appropriate factors, 
        including whether the rate, charge, classification, rule, or 
        regulation is--
                  ``(A) the same as, or similar to, those published or 
                assessed by other carriers in the same trade;
                  ``(B) required to ensure movement of particular cargo 
                in the same trade; or
                  ``(C) required to maintain acceptable continuity, 
                level, or quality of common carrier service to or from 
                affected ports.
``Sec. 40703. Effective date of rates
  ``Notwithstanding section 40501(e) of this title and except for 
service contracts, a rate, charge, classification, rule, or regulation 
of a controlledcarrier may not become effective, without special 
permission of the Federal Maritime Commission, until the 30th day after 
publication.
``Sec. 40704. Commission review
  ``(a) Request for Justification.--On request of the Federal Maritime 
Commission, a controlled carrier shall file with the Commission, within 
20 days of the request, a statement of justification that sufficiently 
details the carrier's need and purpose for an existing or proposed 
rate, charge, classification, rule, or regulation and upon which the 
Commission may reasonably base a determination of its lawfulness.
  ``(b) Determination.--Within 120 days after receipt of information 
requested under subsection (a), the Commission shall determine whether 
the rate, charge, classification, rule, or regulation may be unjust and 
unreasonable.
  ``(c) Show Cause Order.--Whenever the Commission is of the opinion 
that a rate, charge, classification, rule, or regulation published or 
assessed by a controlled carrier may be unjust and unreasonable, the 
Commission shall issue an order to the controlled carrier to show cause 
why the rate, charge, classification, rule, or regulation should not be 
prohibited.
  ``(d) Suspension Pending Determination.--
          ``(1) Not yet effective.--Pending a determination of the 
        lawfulness of a rate, charge, classification, rule, or 
        regulation in a proceeding under subsection (c), the Commission 
        may suspend the rate, charge, classification, rule, or 
        regulation at any time before its effective date.
          ``(2) Already effective.--If a rate, charge, classification, 
        rule, or regulation has already become effective, the 
        Commission, on issuance of an order to show cause, may suspend 
        the rate, charge, classification, rule, or regulation on at 
        least 30 days' notice to the controlled carrier.
          ``(3) Maximum suspension.--A period of suspension under this 
        subsection may not exceed 180 days.
  ``(e) Replacement During Suspension.--Whenever the Commission has 
suspended a rate, charge, classification, rule, or regulation under 
this section, the controlled carrier may publish a new rate, charge, 
classification, rule, or regulation to take effect immediately during 
the suspension in lieu of the suspended rate, charge, classification, 
rule, or regulation. However, the Commission may reject the new rate, 
charge, classification, rule, or regulation if the Commission believes 
it is unjust and unreasonable.
``Sec. 40705. Presidential review of Commission orders
  ``(a) Transmission to President.--The Federal Maritime Commission 
shall transmit to the President, concurrently with publication thereof, 
each order of suspension or final order of prohibition issued under 
section 40704 of this title.
  ``(b) Presidential Request and Commission Action.--Within 10 days 
after receipt or the effective date of a Commission order referred to 
in subsection (a), the President, in writing, may request the 
Commission to stay the effect of the order if the President finds that 
the stay is required for reasons of national defense or foreign policy. 
The reasons shall be specified in the request. The Commission shall 
immediately grant the request by issuing an order in which the 
President's request shall be described. During a stay, the President 
shall, whenever practicable, attempt to resolve the matter by 
negotiating with representatives of the applicable foreign governments.
``Sec. 40706. Exceptions
  ``This chapter does not apply to--
          ``(1) a controlled carrier of a foreign country whose vessels 
        are entitled by a treaty of the United States to receive 
        national or most-favored-nation treatment; or
          ``(2) a trade served only by controlled carriers.

           ``CHAPTER 409--OCEAN TRANSPORTATION INTERMEDIARIES

``Sec.
``40901.  License requirement.
``40902.  Financial responsibility.
``40903.  Suspension or revocation of license.
``40904.  Compensation by common carriers.
``Sec. 40901. License requirement
  ``(a) In General.--A person in the United States may not act as an 
ocean transportation intermediary unless the person holds an ocean 
transportation intermediary's license issued by the Federal Maritime 
Commission. The Commission shall issue a license to a person that the 
Commission determines to be qualified by experience and character to 
act as an ocean transportation intermediary.
  ``(b) Exception.--A person whose primary business is the sale of 
merchandise may forward shipments of the merchandise for its own 
account without an ocean transportation intermediary's license.
``Sec. 40902. Financial responsibility
  ``(a) In General.--A person may not act as an ocean transportation 
intermediary unless the person furnishes a bond, proof of insurance, or 
other surety--
          ``(1) in a form and amount determined by the Federal Maritime 
        Commission to insure financial responsibility; and
          ``(2) issued by a surety company found acceptable by the 
        Secretary of the Treasury.
  ``(b) Scope of Financial Responsibility.--A bond, insurance, or other 
surety obtained under this section--
          ``(1) shall be available to pay any penalty assessed under 
        section 41109 of this title or any order for reparation issued 
        under section 41305 of this title;
          ``(2) may be available to pay any claim against an ocean 
        transportation intermediary arising from its transportation-
        related activities--
                  ``(A) with the consent of the insured ocean 
                transportation intermediary and subject to review by 
                the surety company; or
                  ``(B) when the claim is deemed valid by the surety 
                company after the ocean transportation intermediary has 
                failed to respond to adequate notice to address the 
                validity of the claim; and
          ``(3) shall be available to pay any judgment for damages 
        against an ocean transportation intermediary arising from its 
        transportation-related activities, if the claimant has first 
        attempted to resolve the claim under paragraph (2) and the 
        claim has not been resolved within a reasonable period of time.
  ``(c) Regulations on Court Judgments.--The Commission shall prescribe 
regulations for the purpose of protecting the interests of claimants, 
ocean transportation intermediaries, and surety companies with respect 
to the process of pursuing claims against ocean transportation 
intermediary bonds, insurance, or sureties through court judgments. The 
regulations shall provide that a judgment for monetary damages may not 
be enforced except to the extent that the damages claimed arise from 
the transportation-related activities of the insured ocean 
transportation intermediary, as defined by the Commission.
  ``(d) Resident Agent.--An ocean transportation intermediary not 
domiciled in the United States shall designate a resident agent in the 
United States for receipt of service of judicial and administrative 
process, including subpoenas.
``Sec. 40903. Suspension or revocation of license
  ``(a) Failure To Maintain Qualifications or To Comply.--The Federal 
Maritime Commission, after notice and opportunity for a hearing, shall 
suspend or revoke an ocean transportation intermediary's license if the 
Commission finds that the ocean transportation intermediary--
          ``(1) is not qualified to provide intermediary services; or
          ``(2) willfully failed to comply with a provision of this 
        part or with an order or regulation of the Commission.
  ``(b) Failure To Maintain Bond, Proof of Insurance, or Other 
Surety.--The Commission may revoke an ocean 
transportationintermediary's license for failure to maintain a bond, 
proof of insurance, or other surety as required by section 40902(a) of 
this title.
``Sec. 40904. Compensation by common carriers
  ``(a) Certification of License and Services.--A common carrier may 
compensate an ocean freight forwarder for a shipment dispatched for 
others only when the ocean freight forwarder has certified in writing 
that it holds an ocean transportation intermediary's license (if 
required under section 40901 of this title) and has--
          ``(1) engaged, booked, secured, reserved, or contracted 
        directly with the carrier or its agent for space aboard a 
        vessel or confirmed the availability of the space; and
          ``(2) prepared and processed the ocean bill of lading, dock 
        receipt, or other similar document for the shipment.
  ``(b) Dual Compensation.--A common carrier may not pay compensation 
for services described in subsection (a) more than once on the same 
shipment.
  ``(c) Beneficial Interest Shipments.--An ocean transportation 
intermediary may not receive compensation from a common carrier for a 
shipment in which the intermediary has a direct or indirect beneficial 
interest. A common carrier may not knowingly pay compensation on that 
shipment.
  ``(d) Limits on Authority of Conference or Group.--A conference or 
group of two or more ocean common carriers in the foreign commerce of 
the United States that is authorized to agree on the level of 
compensation paid to an ocean freight forwarder may not--
          ``(1) deny a member of the conference or group the right, 
        upon notice of not more than 5 days, to take independent action 
        on any level of compensation paid to an ocean freight 
        forwarder; or
          ``(2) agree to limit the payment of compensation to an ocean 
        freight forwarder to less than 1.25 percent of the aggregate of 
        all rates and charges applicable under a tariff and assessed 
        against the cargo on which the services of the ocean freight 
        forwarder are provided.

               ``CHAPTER 411--PROHIBITIONS AND PENALTIES

``Sec.
``41101.  Joint ventures and consortiums.
``41102.  General prohibitions.
``41103.  Disclosure of information.
``41104.  Common carriers.
``41105.  Concerted action.
``41106.  Marine terminal operators.
``41107.  Monetary penalties.
``41108.  Additional penalties.
``41109.  Assessment of penalties.
``Sec. 41101. Joint ventures and consortiums
  ``In this chapter, a joint venture or consortium of two or more 
common carriers operating as a single entity is deemed to be a single 
common carrier.
``Sec. 41102. General prohibitions
  ``(a) Obtaining Transportation at Less Than Applicable Rates.--A 
person may not knowingly and willfully, directly or indirectly, by 
means of false billing, false classification, false weighing, false 
report of weight, false measurement, or any other unjust or unfair 
device or means, obtain or attempt to obtain ocean transportation for 
property at less than the rates or charges that would otherwise apply.
  ``(b) Operating Contrary to Agreement.--A person may not operate 
under an agreement required to be filed under section 40302 or 40305 of 
this title if--
          ``(1) the agreement has not become effective under section 
        40304 of this title or has been rejected, disapproved, or 
        canceled; or
          ``(2) the operation is not in accordance with the terms of 
        the agreement or any modifications to the agreement made by the 
        Federal Maritime Commission.
  ``(c) Practices in Handling Property.--A common carrier, marine 
terminal operator, or ocean transportation intermediary may not fail to 
establish, observe, and enforce just and reasonable regulations and 
practices relating to or connected with receiving, handling, storing, 
or delivering property.
``Sec. 41103. Disclosure of information
  ``(a) Prohibition.--A common carrier, marine terminal operator, or 
ocean freight forwarder, either alone or in conjunction with any other 
person, directly or indirectly, may not knowingly disclose, offer, 
solicit, or receive any information concerning the nature, kind, 
quantity, destination, consignee, or routing of any property tendered 
or delivered to a common carrier, without the consent of the shipper or 
consignee, if the information--
          ``(1) may be used to the detriment or prejudice of the 
        shipper, the consignee, or any common carrier; or
          ``(2) may improperly disclose its business transaction to a 
        competitor.
  ``(b) Exceptions.--Subsection (a) does not prevent providing the 
information--
          ``(1) in response to legal process;
          ``(2) to the Federal Maritime Commission or an agency of the 
        United States Government; or
          ``(3) to an independent neutral body operating within the 
        scope of its authority to fulfill the policing obligations of 
        the parties to an agreement effective under this part.
  ``(c) Disclosure for Determining Breach or Compiling Statistics.--An 
ocean common carrier that is a party to a conference agreement approved 
under this part, a receiver, trustee, lessee, agent, or employee of the 
carrier, or any other person authorized by the carrier to receive 
information--
          ``(1) may give information to the conference or any person or 
        agency designated by the conference, for the purpose of--
                  ``(A) determining whether a shipper or consignee has 
                breached an agreement with the conference or its member 
                lines;
                  ``(B) determining whether a member of the conference 
                has breached the conference agreement; or
                  ``(C) compiling statistics of cargo movement; and
          ``(2) may not prevent the conference or its designee from 
        soliciting or receiving information for any of those purposes.
``Sec. 41104. Common carriers
  ``A common carrier, either alone or in conjunction with any other 
person, directly or indirectly, may not--
          ``(1) allow a person to obtain transportation for property at 
        less than the rates or charges established by the carrier in 
        its tariff or service contract by means of false billing, false 
        classification, false weighing, false measurement, or any other 
        unjust or unfair device or means;
          ``(2) provide service in the liner trade that is--
                  ``(A) not in accordance with the rates, charges, 
                classifications, rules, and practices contained in a 
                tariff published or a service contract entered into 
                under chapter 405 of this title, unless excepted or 
                exempted under section 40103 or 40501(a)(2) of this 
                title; or
                  ``(B) under a tariff or service contract that has 
                been suspended or prohibited by the Federal Maritime 
                Commission under chapter 407 or 423 of this title;
          ``(3) retaliate against a shipper by refusing, or threatening 
        to refuse, cargo space accommodations when available, or resort 
        to other unfair or unjustly discriminatory methods because the 
        shipper has patronized another carrier, or has filed a 
        complaint, or for any other reason;
          ``(4) for service pursuant to a tariff, engage in any unfair 
        or unjustly discriminatory practice in the matter of--
                  ``(A) rates or charges;
                  ``(B) cargo classifications;
                  ``(C) cargo space accommodations or other facilities, 
                with due regard being given to the proper loading of 
                the vessel and the available tonnage;
                  ``(D) loading and landing of freight; or
                  ``(E) adjustment and settlement of claims;
          ``(5) for service pursuant to a service contract, engage in 
        any unfair or unjustly discriminatory practice in the matter of 
        rates or charges with respect to any port;
          ``(6) use a vessel in a particular trade for the purpose of 
        excluding, preventing, or reducing competition by driving 
        another ocean common carrier out of that trade;
          ``(7) offer or pay any deferred rebates;
          ``(8) for service pursuant to a tariff, give any undue or 
        unreasonable preference or advantage or impose any undue or 
        unreasonable prejudice or disadvantage;
          ``(9) for service pursuant to a service contract, give any 
        undue or unreasonable preference or advantage or impose any 
        undue or unreasonable prejudice or disadvantage with respect to 
        any port;
          ``(10) unreasonably refuse to deal or negotiate;
          ``(11) knowingly and willfully accept cargo from or transport 
        cargo for the account of an ocean transportation intermediary 
        that does not have a tariff as required by section 40501 of 
        this title and a bond, insurance, or other surety as required 
        by section 40902 of this title; or
          ``(12) knowingly and willfully enter into a service contract 
        with an ocean transportation intermediary that does not have a 
        tariff as required by section 40501 of this title and a bond, 
        insurance, or other surety as required by section 40902 of this 
        title, or with an affiliate of such an ocean transportation 
        intermediary.
``Sec. 41105. Concerted action
  ``A conference or group of two or more common carriers may not--
          ``(1) boycott or take any other concerted action resulting in 
        an unreasonable refusal to deal;
          ``(2) engage in conduct that unreasonably restricts the use 
        of intermodal services or technological innovations;
          ``(3) engage in any predatory practice designed to eliminate 
        the participation, or deny the entry, in a particular trade of 
        a common carrier not a member of the conference, a group of 
        common carriers, an ocean tramp, or a bulk carrier;
          ``(4) negotiate with a non-ocean carrier or group of non-
        ocean carriers (such as truck, rail, or air operators) on any 
        matter relating to rates or services provided to ocean common 
        carriers within the United States by those non-ocean carriers, 
        unless the negotiations and any resulting agreements are not in 
        violation of the antitrust laws and are consistent with the 
        purposes of this part, except that this clause does not 
        prohibit the setting and publishing of a joint through rate by 
        a conference, joint venture, or association of ocean common 
        carriers;
          ``(5) deny in the export foreign commerce of the United 
        States compensation to an ocean freight forwarder or limit that 
        compensation to less than a reasonable amount;
          ``(6) allocate shippers among specific carriers that are 
        parties to the agreement or prohibit a carrier that is a party 
        to the agreement from soliciting cargo from a particular 
        shipper, except as--
                  ``(A) authorized by section 40303(d) of this title;
                  ``(B) required by the law of the United States or the 
                importing or exporting country; or
                  ``(C) agreed to by a shipper in a service contract;
          ``(7) for service pursuant to a service contract, engage in 
        any unjustly discriminatory practice in the matter of rates or 
        charges with respect to any locality, port, or person due to 
        the person's status as a shippers' association or ocean 
        transportation intermediary; or
          ``(8) for service pursuant to a service contract, give any 
        undue or unreasonable preference or advantage or impose any 
        undue or unreasonable prejudice or disadvantage with respect to 
        any locality, port, or person due to the person's status as a 
        shippers' association or ocean transportation intermediary.
``Sec. 41106. Marine terminal operators
  ``A marine terminal operator may not--
          ``(1) agree with another marine terminal operator or with a 
        common carrier to boycott, or unreasonably discriminate in the 
        provision of terminal services to, a common carrier or ocean 
        tramp;
          ``(2) give any undue or unreasonable preference or advantage 
        or impose any undue or unreasonable prejudice or disadvantage 
        with respect to any person; or
          ``(3) unreasonably refuse to deal or negotiate.
``Sec. 41107. Monetary penalties
  ``(a) In General.--A person that violates this part or a regulation 
or order of the Federal Maritime Commission issued under this part is 
liable to the United States Government for a civil penalty. Unless 
otherwise provided in this part, the amount of the penalty may not 
exceed $5,000 for each violation or, if the violation was willfully and 
knowingly committed, $25,000 for each violation. Each day of a 
continuing violation is a separate violation.
  ``(b) Lien on Carrier's Vessels.--The amount of a civil penalty 
imposed on a common carrier under this section constitutes a lien on 
the vessels operated by the carrier. Any such vessel may be libeled 
therefore in the district court of the United States for the district 
in which it may be found.
``Sec. 41108. Additional penalties
  ``(a) Suspension of Tariffs.--For a violation of section 41104(1), 
(2), or (7) of this title, the Federal Maritime Commission may suspend 
any or all tariffs of the common carrier, or that common carrier's 
right to use any or all tariffs of conferences of which it is a member, 
for a period not to exceed 12 months.
  ``(b) Operating Under Suspended Tariff.--A common carrier that 
accepts or handles cargo for carriage under a tariff that has been 
suspended, or after its right to use that tariff has been suspended, is 
liable to the United States Government for a civil penalty of not more 
than $50,000 for each shipment.
  ``(c) Failure To Provide Information.--
          ``(1) Penalties.--If the Commission finds, after notice and 
        opportunity for a hearing, that a common carrier has failed to 
        supply information ordered to be produced or compelled by 
        subpoena under section 41303 of this title, the Commission 
        may--
                  ``(A) suspend any or all tariffs of the carrier or 
                the carrier's right to use any or all tariffs of 
                conferences of which it is a member; and
                  ``(B) request the Secretary of Homeland Security to 
                refuse or revoke any clearance required for a vessel 
                operated by the carrier, and when so requested, the 
                Secretary shall refuse or revoke the clearance.
          ``(2) Defense based on foreign law.--If, in defense of its 
        failure to comply with a subpoena or discovery order, a common 
        carrier alleges that information or documents located in a 
        foreign country cannot be produced because of the laws of that 
        country, the Commission shall immediately notify the Secretary 
        of State of the failure to comply and of the allegation 
        relating to foreign laws. On receiving the notification, the 
        Secretary of State shall promptly consult with the government 
        of the nation within which the information or documents are 
        alleged to be located for the purpose of assisting the 
        Commission in obtaining the information or documents.
  ``(d) Impairing Access to Foreign Trade.--If the Commission finds, 
after notice and opportunity for a hearing, that the action of a common 
carrier, acting alone or in concert with another person, or a foreign 
government has unduly impaired access of a vessel documented under the 
laws of theUnited States to ocean trade between foreign ports, the 
Commission shall take action that it finds appropriate, including 
imposing any of the penalties authorized by this section. The 
Commission also may take any of the actions authorized by sections 
42304 and 42305 of this title.
  ``(e) Submission of Order to President.--Before an order under this 
section becomes effective, it shall be submitted immediately to the 
President. The President, within 10 days after receiving it, may 
disapprove it if the President finds that disapproval is required for 
reasons of national defense or foreign policy.
``Sec. 41109. Assessment of penalties
  ``(a) General Authority.--Until a matter is referred to the Attorney 
General, the Federal Maritime Commission may, after notice and 
opportunity for a hearing, assess a civil penalty provided for in this 
part. The Commission may compromise, modify, or remit, with or without 
conditions, a civil penalty.
  ``(b) Factors in Determining Amount.--In determining the amount of a 
civil penalty, the Commission shall take into account the nature, 
circumstances, extent, and gravity of the violation committed and, with 
respect to the violator, the degree of culpability, history of prior 
offenses, ability to pay, and other matters justice may require.
  ``(c) Exception.--A civil penalty may not be imposed for conspiracy 
to violate section 41102(a) or 41104(1) or (2) of this title or to 
defraud the Commission by concealing such a violation.
  ``(d) Prohibited Basis of Penalty.--The Commission or a court may not 
order a person to pay the difference between the amount billed and 
agreed upon in writing with a common carrier or its agent and the 
amount set forth in a tariff or service contract by that common carrier 
for the transportation service provided.
  ``(e) Time Limit.--A proceeding to assess a civil penalty under this 
section must be commenced within 5 years after the date of the 
violation.
  ``(f) Review of Civil Penalty.--A person against whom a civil penalty 
is assessed under this section may obtain review under chapter 158 of 
title 28.
  ``(g) Civil Actions To Collect.--If a person does not pay an 
assessment of a civil penalty after it has become final or after the 
appropriate court has entered final judgment in favor of the 
Commission, the Attorney General at the request of the Commission may 
seek to collect the amount assessed in an appropriate district court of 
the United States. The court shall enforce the order of the Commission 
unless it finds that the order was not regularly made and duly issued.

                       ``CHAPTER 413--ENFORCEMENT

``Sec.
``41301.  Complaints.
``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.
``Sec. 41301. Complaints
  ``(a) In General.--A person may file with the Federal Maritime 
Commission a sworn complaint alleging a violation of this part, except 
section 41307(b)(1). If the complaint is filed within 3 years after the 
claim accrues, the complainant may seek reparations for an injury to 
the complainant caused by the violation.
  ``(b) Notice and Response.--The Commission shall provide a copy of 
the complaint to the person named in the complaint. Within a reasonable 
time specified by the Commission, the person shall satisfy the 
complaint or answer it in writing.
  ``(c) If Complaint Not Satisfied.--If the complaint is not satisfied, 
the Commission shall investigate the complaint in an appropriate manner 
and make an appropriate order.
``Sec. 41302. Investigations
  ``(a) In General.--The Federal Maritime Commission, on complaint or 
its own motion, may investigate any conduct or agreement that the 
Commission believes may be in violation of this part. The Commission 
may by order disapprove, cancel, or modify any agreement that operates 
in violation of this part.
  ``(b) Effectiveness of Agreement During Investigation.--Unless an 
injunction is issued under section 41306 or 41307 of this title, an 
agreement under investigation by the Commission remains in effect until 
the Commission issues its order.
  ``(c) Date for Decision.--Within 10 days after the initiation of a 
proceeding under this section or section 41301 of this title, the 
Commission shall set a date by which it will issue its final decision. 
The Commission by order may extend the date for good cause.
  ``(d) Sanctions for Delay.--If, within the period for final decision 
under subsection (c), the Commission determines that it is unable to 
issue a final decision because of undue delay caused by a party to the 
proceeding, the Commission may impose sanctions, including issuing a 
decision adverse to the delaying party.
  ``(e) Report.--The Commission shall make a written report of every 
investigation under this part in which a hearing was held, stating its 
conclusions, decisions, findings of fact, and order. The Commission 
shall provide a copy of the report to all parties and publish the 
report for public information. A published report is competent evidence 
in a court of the United States.
``Sec. 41303. Discovery and subpoenas
  ``(a) In General.--In an investigation or adjudicatory proceeding 
under this part--
          ``(1) the Federal Maritime Commission may subpoena witnesses 
        and evidence; and
          ``(2) a party may use depositions, written interrogatories, 
        and discovery procedures under regulations prescribed by the 
        Commission that, to the extent practicable, shall conform to 
        the Federal Rules of Civil Procedure (28 App. U.S.C.).
  ``(b) Witness Fees.--Unless otherwise prohibited by law, a witness is 
entitled to the same fees and mileage as in the courts of the United 
States.
``Sec. 41304. Hearings and orders
  ``(a) Opportunity for Hearing.--The Federal Maritime Commission shall 
provide an opportunity for a hearing before issuing an order relating 
to a violation of this part or a regulation prescribed under this part.
  ``(b) Modification of Order.--The Commission may reverse, suspend, or 
modify any of its orders.
  ``(c) Rehearing.--On application of a party to a proceeding, the 
Commission may grant a rehearing of the same or any matter determined 
in the proceeding. Except by order of the Commission, a rehearing does 
not operate as a stay of an order.
  ``(d) Period of Effectiveness.--An order of the Commission remains in 
effect for the period specified in the order or until suspended, 
modified, or set aside by the Commission or a court of competent 
jurisdiction.
``Sec. 41305. Award of reparations
  ``(a) Definition.--In this section, the term `actual injury' includes 
the loss of interest at commercial rates compounded from the date of 
injury.
  ``(b) Basic Amount.--If the complaint was filed within the period 
specified in section 41301(a) of this title, the Federal Maritime 
Commission shall direct the payment of reparations to the complainant 
for actual injury caused by a violation of this part, plus reasonable 
attorney fees.
  ``(c) Additional Amounts.--On a showing that the injury was caused by 
an activity prohibited by section 41102(b), 41104(3) or (6), or 
41105(1) or (3) of this title, the Commission may order the payment of 
additionalamounts, but the total recovery of a complainant may not 
exceed twice the amount of the actual injury.
  ``(d) Difference Between Rates.--If the injury was caused by an 
activity prohibited by section 41104(4)(A) or (B) of this title, the 
amount of the injury shall be the difference between the rate paid by 
the injured shipper and the most favorable rate paid by another 
shipper.
``Sec. 41306. Injunctive relief sought by complainants
  ``(a) In General.--After filing a complaint with the Federal Maritime 
Commission under section 41301 of this title, the complainant may bring 
a civil action in a district court of the United States to enjoin 
conduct in violation of this part.
  ``(b) Venue.--The action must be brought in the judicial district in 
which--
          ``(1) the Commission has brought a civil action against the 
        defendant under section 41307(a) of this title; or
          ``(2) the defendant resides or transacts business, if the 
        Commission has not brought such an action.
  ``(c) Remedies by Court.--After notice to the defendant, and a 
showing that the standards for granting injunctive relief by courts of 
equity are met, the court may grant a temporary restraining order or 
preliminary injunction for a period not to exceed 10 days after the 
Commission has issued an order disposing of the complaint.
  ``(d) Attorney Fees.--A defendant prevailing in a civil action under 
this section shall be allowed reasonable attorney fees to be assessed 
and collected as part of the costs of the action.
``Sec. 41307. Injunctive relief sought by the Commission
  ``(a) General Violations.--In connection with an investigation under 
section 41301 or 41302 of this title, the Federal Maritime Commission 
may bring a civil action to enjoin conduct in violation of this part. 
The action must be brought in the district court of the United States 
for any judicial district in which the defendant resides or transacts 
business. After notice to the defendant, and a showing that the 
standards for granting injunctive relief by courts of equity are met, 
the court may grant a temporary restraining order or preliminary 
injunction for a period not to exceed 10 days after the Commission has 
issued an order disposing of the issues under investigation.
  ``(b) Reduction in Competition.--
          ``(1) Action by commission.--If, at any time after the filing 
        or effective date of an agreement under chapter 403 of this 
        title, the Commission determines that the agreement is likely, 
        by a reduction in competition, to produce an unreasonable 
        reduction in transportation service or an unreasonable increase 
        in transportation cost, the Commission, after notice to the 
        person filing the agreement, may bring a civil action in the 
        United States District Court for the District of Columbia to 
        enjoin the operation of the agreement. The Commission's sole 
        remedy with respect to an agreement likely to have such an 
        effect is an action under this subsection.
          ``(2) Remedies by court.--In an action under this subsection, 
        the court may issue--
                  ``(A) a temporary restraining order or a preliminary 
                injunction; and
                  ``(B) a permanent injunction after a showing that the 
                agreement is likely to have the effect described in 
                paragraph (1).
          ``(3) Burden of proof and third parties.--In an action under 
        this subsection, the burden of proof is on the Commission. The 
        court may not allow a third party to intervene.
  ``(c) Failure To Provide Information.--If a person filing an 
agreement, or an officer, director, partner, agent, or employee of the 
person, fails substantially to comply with a request for the submission 
of additional information or documents within the period provided in 
section 40304(c) of this title, the Commission may bring a civil action 
in the United States District Court for the District of Columbia. At 
the request of the Commission, the Court--
          ``(1) may order compliance;
          ``(2) shall extend the period specified in section 
        40304(c)(2) of this title until there has been substantial 
        compliance; and
          ``(3) may grant other equitable relief that the court decides 
        is appropriate.
  ``(d) Representation.--The Commission may represent itself in a 
proceeding under this section in--
          ``(1) a district court of the United States, on notice to the 
        Attorney General; and
          ``(2) a court of appeals of the United States, with the 
        approval of the Attorney General.
``Sec. 41308. Enforcement of subpoenas and orders
  ``(a) Civil Action.--If a person does not comply with a subpoena or 
order of the Federal Maritime Commission, the Attorney General, at the 
request of the Commission, or an injured party, may seek enforcement in 
a district court of the United States having jurisdiction over the 
parties. If, after hearing, the court determines that the subpoena or 
order was regularly made and duly issued, the court shall enforce the 
subpoena or order.
  ``(b) Time Limit on Bringing Actions.--An action under this section 
to enforce an order of the Commission must be brought within 3 years 
after the date the order was violated.
``Sec. 41309. Enforcement of reparation orders
  ``(a) Civil Action.--If a person does not comply with an order of the 
Federal Maritime Commission for the payment of reparation, the person 
to whom the award was made may seek enforcement of the order in a 
district court of the United States having jurisdiction over the 
parties.
  ``(b) Parties and Service of Process.--All parties in whose favor the 
Commission has made an award of reparation by a single order may be 
joined as plaintiffs, and all other parties in the order may be joined 
as defendants, in a single action in a judicial district in which any 
one plaintiff could maintain an action against any one defendant. 
Service of process against a defendant not found in that district may 
be made in a district in which any office of that defendant is located 
or in which any port of call on a regular route operated by that 
defendant is located. Judgment may be entered for any plaintiff against 
the defendant liable to that plaintiff.
  ``(c) Nature of Review.--In an action under this section, the 
findings and order of the Commission are prima facie evidence of the 
facts stated in the findings and order.
  ``(d) Costs and Attorney Fees.--The plaintiff is not liable for costs 
of the action or for costs of any subsequent stage of the proceedings 
unless they accrue on the plaintiff's appeal. A prevailing plaintiff 
shall be allowed reasonable attorney fees to be assessed and collected 
as part of the costs of the action.
  ``(e) Time Limit on Bringing Actions.--An action under this section 
to enforce an order of the Commission must be brought within 3 years 
after the date the order was violated.

             ``Part B--Actions To Address Foreign Practices

     ``CHAPTER 421--REGULATIONS AFFECTING SHIPPING IN FOREIGN TRADE

``Sec.
``42101.  Regulations of the Commission.
``42102.  Regulations of other agencies.
``42103.  No preference to Government-owned vessels.
``42104.  Information, witnesses, and evidence.
``42105.  Disclosure to public.
``42106.  Other actions to remedy unfavorable conditions.
``42107.  Refusal of clearance and entry.
``42108.  Penalty for operating under suspended tariff or service 
          contract.
``42109.  Consultation with other agencies.
``Sec. 42101. Regulations of the Commission
  ``(a) Unfavorable Conditions.--To further the objectives and policy 
set forth in section 50101 of this title, the Federal Maritime 
Commissionshall prescribe regulations affecting shipping in foreign 
trade, not in conflict with law, to adjust or meet general or special 
conditions unfavorable to shipping in foreign trade, whether in a 
particular trade or on a particular route or in commerce generally, 
including intermodal movements, terminal operations, cargo 
solicitation, agency services, ocean transportation intermediary 
services and operations, and other activities and services integral to 
transportation systems, and which arise out of or result from laws or 
regulations of a foreign country or competitive methods, pricing 
practices, or practices employed by owners, operators, agents, or 
masters of vessels of a foreign country.
  ``(b) Initiation of Regulation.--A regulation under subsection (a) 
may be initiated by the Commission on its own motion or on the petition 
of any person, including another component of the United States 
Government.
``Sec. 42102. Regulations of other agencies
  ``(a) Request to Agency.--To further the objectives and policy set 
forth in section 50101 of this title, the Federal Maritime Commission 
shall request the head of a department, agency, or instrumentality of 
the United States Government to suspend, modify, or annul any existing 
regulations, or to make new regulations, affecting shipping in the 
foreign trade, except regulations relating to the Public Health 
Service, the Consular Service, or the inspection of vessels.
  ``(b) Prior Review and Approval.--A department, agency, or 
instrumentality of the Government may not prescribe a regulation 
affecting shipping in the foreign trade (except a regulation affecting 
the Public Health Service, the Consular Service, or the inspection of 
vessels) until the regulation has been submitted to the Commission for 
its approval and final action has been taken by the Commission or the 
President.
  ``(c) Submission to President.--If the head of a department, agency, 
or instrumentality of the Government refuses to comply with a request 
under subsection (a) or objects to a decision of the Commission under 
subsection (b), the Commission or the head of the department, agency, 
or instrumentality may submit the facts to the President. The President 
may establish, suspend, modify, or annul the regulation.
``Sec. 42103. No preference to Government-owned vessels
  ``A regulation may not give a vessel owned by the United States 
Government a preference over a vessel owned by citizens of the United 
States and documented under the laws of the United States.
``Sec. 42104. Information, witnesses, and evidence
  ``(a) Order To Supply Information.--In carrying out section 42101 of 
this title, the Federal Maritime Commission may order any person 
(including a common carrier, tramp operator, bulk operator, shipper, 
shippers' association, ocean transportation intermediary, or marine 
terminal operator, or an officer, receiver, trustee, lessee, agent, or 
employee thereof) to file with the Commission a report, answers to 
questions, documentary material, or other information the Commission 
considers necessary or appropriate. The Commission may require the 
response to any such order to be made under oath. The response shall be 
provided in the form and within the time specified by the Commission.
  ``(b) Subpoenas and Discovery.--In carrying out section 42101 of this 
title, the Commission may--
          ``(1) subpoena witnesses and evidence; and
          ``(2) authorize a party to use depositions, written 
        interrogatories, and discovery procedures that, to the extent 
        practicable, conform to the Federal Rules of Civil Procedure 
        (28 App. U.S.C.).
  ``(c) Witness Fees.--Unless otherwise prohibited by law, and subject 
to funds being appropriated, a witness in a proceeding under section 
42101 of this title is entitled to the same fees and mileage as in the 
courts of the United States.
  ``(d) Penalties.--For failure to supply information ordered to be 
produced or compelled by subpoena under this section, the Commission 
may--
          ``(1) after notice and opportunity for a hearing, suspend 
        tariffs and service contracts of a common carrier or the common 
        carrier's right to use tariffs of conferences and service 
        contracts of agreements of which it is a member; or
          ``(2) assess a civil penalty of not more than $5,000 for each 
        day that the information is not provided.
  ``(e) Enforcement.--If a person does not comply with an order or 
subpoena of the Commission under this section, the Commission may seek 
enforcement in a district court of the United States having 
jurisdiction over the parties. If, after hearing, the court determines 
that the order or subpoena was regularly made and duly issued, the 
court shall enforce the order or subpoena.
``Sec. 42105. Disclosure to public
  ``Notwithstanding any other provision of law, the Federal Maritime 
Commission may refuse to disclose to the public a response or other 
information submitted to it under this chapter.
``Sec. 42106. Other actions to remedy unfavorable conditions
  ``If the Federal Maritime Commission finds that conditions 
unfavorable to shipping in foreign trade as described in section 42101 
of this title exist, the Commission may--
          ``(1) limit voyages to and from United States ports or the 
        amount or type of cargo carried;
          ``(2) suspend, in whole or in part, tariffs and service 
        contracts for carriage to or from United States ports, 
        including a common carrier's right to use tariffs of 
        conferences and service contracts of agreements in United 
        States trades of which it is a member for any period the 
        Commission specifies;
          ``(3) suspend, in whole or in part, an ocean common carrier's 
        right to operate under any agreement filed with the Commission, 
        including any agreement authorizing preferential treatment at 
        terminals, preferential terminal leases, space chartering, or 
        pooling of cargo or revenue with other ocean common carriers;
          ``(4) impose a fee not to exceed $1,000,000 per voyage; or
          ``(5) take any other action the Commission finds necessary 
        and appropriate to adjust or meet any condition unfavorable to 
        shipping in the foreign trade of the United States.
``Sec. 42107. Refusal of clearance and entry
  ``At the request of the Federal Maritime Commission--
          ``(1) the Secretary of Homeland Security shall--
                  ``(A) refuse the clearance required by section 60105 
                of this title to a vessel of a country that is named in 
                a regulation prescribed by the Commission under section 
                42101 of this title; and
                  ``(B) collect any fees imposed by the Commission 
                under section 42106(4) of this title; and
          ``(2) the Secretary of the department in which the Coast 
        Guard is operating shall--
                  ``(A) deny entry, for purposes of oceanborne trade, 
                of a vessel of a country that is named in a regulation 
                prescribed by the Commission under section 42101 of 
                this title, to a port or place in the United States or 
                the navigable waters of the United States; or
                  ``(B) detain the vessel at the port or place in the 
                United States from which it is about to depart for 
                another port or place in the United States.
``Sec. 42108. Penalty for operating under suspended tariff or service 
                    contract
  ``A common carrier that accepts or handles cargo for carriage under a 
tariff or service contract that has been suspended under section 
42104(d)(1) or 42106(2) of this title, or after its right to use 
another tariff or service contract has been suspended under those 
provisions, is liable to the United States Government for a civil 
penalty of not more than $50,000 for eachday that it is found to be 
operating under a suspended tariff or service contract.
``Sec. 42109. Consultation with other agencies
  ``The Federal Maritime Commission may consult with, seek the 
cooperation of, or make recommendations to other appropriate agencies 
of the United States Government prior to taking any action under this 
chapter.

               ``CHAPTER 423--FOREIGN SHIPPING PRACTICES

``Sec.
``42301.  Definitions.
``42302.  Investigations.
``42303.  Information requests.
``42304.  Action against foreign carriers.
``42305.  Refusal of clearance and entry.
``42306.  Submission of determinations to President.
``42307.  Review of regulations and orders.
``Sec. 42301. Definitions
  ``(a) Defined in Part A.--In this chapter, the terms `common 
carrier', `marine terminal operator', `ocean common carrier', `ocean 
transportation intermediary', `shipper', and `shippers' association' 
have the meaning given those terms in section 40102 of this title.
  ``(b) Other Definitions.--In this chapter:
          ``(1) Foreign carrier.--The term `foreign carrier' means an 
        ocean common carrier a majority of whose vessels are documented 
        under the laws of a foreign country.
          ``(2) Maritime services.--The term `maritime services' means 
        port-to-port transportation of cargo by vessels operated by an 
        ocean common carrier.
          ``(3) Maritime-related services.--The term `maritime-related 
        services' means intermodal operations, terminal operations, 
        cargo solicitation, agency services, ocean transportation 
        intermediary services and operations, and all other activities 
        and services integral to total transportation systems of ocean 
        common carriers and their foreign domiciled affiliates for 
        themselves and others.
          ``(4) United states carrier.--The term `United States 
        carrier' means an ocean common carrier operating vessels 
        documented under the laws of the United States.
          ``(5) United states oceanborne trade.--The term `United 
        States oceanborne trade' means the carriage of cargo between 
        the United States and a foreign country, whether directly or 
        indirectly, by an ocean common carrier.
``Sec. 42302. Investigations
  ``(a) In General.--The Federal Maritime Commission shall investigate 
whether any laws, rules, regulations, policies, or practices of a 
foreign government, or any practices of a foreign carrier or other 
person providing maritime or maritime-related services in a foreign 
country, result in the existence of conditions that--
          ``(1) adversely affect the operations of United States 
        carriers in United States oceanborne trade; and
          ``(2) do not exist for foreign carriers of that country in 
        the United States under the laws of the United States or as a 
        result of acts of United States carriers or other persons 
        providing maritime or maritime-related services in the United 
        States.
  ``(b) Initiation of Investigation.--An investigation under subsection 
(a) may be initiated by the Commission on its own motion or on the 
petition of any person, including another component of the United 
States Government.
  ``(c) Time for Decision.--The Commission shall complete an 
investigation under this section and render a decision within 120 days 
after it is initiated. However, the Commission may extend this 120-day 
period for an additional 90 days if the Commission is unable to obtain 
sufficient information to determine whether a condition specified in 
subsection (a) exists. A notice providing an extension shall state 
clearly the reasons for the extension.
``Sec. 42303. Information requests
  ``(a) In General.--To further the purposes of section 42302(a) of 
this title, the Federal Maritime Commission may order any person 
(including a common carrier, shipper, shippers' association, ocean 
transportation intermediary, or marine terminal operator, or an 
officer, receiver, trustee, lessee, agent or employee thereof) to file 
with the Commission any periodic or special report, answers to 
questions, documentary material, or other information the Commission 
considers necessary or appropriate. The Commission may require the 
response to any such order to be made under oath. The response shall be 
provided in the form and within the time specified by the Commission.
  ``(b) Subpoenas.--In an investigation under section 42302 of this 
title, the Commission may subpoena witnesses and evidence.
  ``(c) Nondisclosure.--Notwithstanding any other provision of law, the 
Commission may determine that any information submitted to it in 
response to a request under this section, or otherwise, shall not be 
disclosed to the public.
``Sec. 42304. Action against foreign carriers
  ``(a) In General.--Subject to section 42306 of this title, whenever 
the Federal Maritime Commission, after notice and opportunity for 
comment or hearing, determines that the conditions specified in section 
42302(a) of this title exist, the Commission shall take such action to 
offset those conditions as it considers necessary and appropriate 
against any foreign carrier that is a contributing cause, or whose 
government is a contributing cause, to those conditions. The action may 
include--
          ``(1) limitations on voyages to and from United States ports 
        or on the amount or type of cargo carried;
          ``(2) suspension, in whole or in part, of any or all tariffs 
        and service contracts, including an ocean common carrier's 
        right to use any or all tariffs and service contracts of 
        conferences in United States trades of which it is a member for 
        any period the Commission specifies;
          ``(3) suspension, in whole or in part, of an ocean common 
        carrier's right to operate under any agreement filed with the 
        Commission, including any agreement authorizing preferential 
        treatment at terminals, preferential terminal leases, space 
        chartering, or pooling of cargo or revenue with other ocean 
        common carriers; and
          ``(4) a fee not to exceed $1,000,000 per voyage.
  ``(b) Consultation.--The Commission may consult with, seek the 
cooperation of, or make recommendations to other appropriate agencies 
of the United States Government prior to taking any action under 
subsection (a).
``Sec. 42305. Refusal of clearance and entry
  ``Subject to section 42306 of this title, whenever the Federal 
Maritime Commission determines that the conditions specified in section 
42302(a) of this title exist, then at the request of the Commission--
          ``(1) the Secretary of Homeland Security shall refuse the 
        clearance required by section 60105 of this title to a vessel 
        of a foreign carrier that is identified by the Commission under 
        section 42304 of this title; and
          ``(2) the Secretary of the department in which the Coast 
        Guard is operating shall--
                  ``(A) deny entry, for purposes of oceanborne trade, 
                of a vessel of a foreign carrier that is identified by 
                the Commission under section 42304 of this title, to a 
                port or place in the United States or the navigable 
                waters of the United States; or
                  ``(B) detain the vessel at the port or place in the 
                United States from which it is about to depart for 
                another port or place in the United States.
``Sec. 42306. Submission of determinations to President
  ``Before a determination under section 42304 of this title becomes 
effective or a request is made under section 42305 of this title, the 
determination shall be submitted immediately to the President. The 
President, within 10 days after receiving it, may disapprove it in 
writing, setting forth thereasons for the disapproval, if the President 
finds that disapproval is required for reasons of national defense or 
foreign policy.
``Sec. 42307. Review of regulations and orders
  ``A regulation or final order of the Federal Maritime Commission 
under this chapter is reviewable exclusively in the same forum and in 
the same manner as provided in section 2342(3)(B) of title 28.

                        ``Part C--Miscellaneous

   ``CHAPTER 441--EVIDENCE OF FINANCIAL RESPONSIBILITY FOR PASSENGER 
                             TRANSPORTATION

``Sec.
``44101.  Application.
``44102.  Financial responsibility to indemnify passengers for 
          nonperformance of transportation.
``44103.  Financial responsibility to pay liability for death or injury.
``44104.  Civil penalty.
``44105.  Refusal of clearance.
``44106.  Conduct of proceedings.
``Sec. 44101. Application
  ``This chapter applies to a vessel that--
          ``(1) has berth or stateroom accommodations for at least 50 
        passengers; and
          ``(2) boards passengers at a port in the United States.
``Sec. 44102. Financial responsibility to indemnify passengers for 
                    nonperformance of transportation
  ``(a) Filing Requirement.--A person in the United States may not 
arrange, offer, advertise, or provide transportation on a vessel to 
which this chapter applies unless the person has filed with the Federal 
Maritime Commission evidence of financial responsibility to indemnify 
passengers for nonperformance of the transportation.
  ``(b) Satisfactory Evidence.--To satisfy subsection (a), a person 
must file--
          ``(1) information the Commission considers necessary; or
          ``(2) a copy of a bond or other security, in such form as the 
        Commission by regulation may require.
  ``(c) Authorized Issuer of Bond.--If a bond is filed, it must be 
issued by a bonding company authorized to do business in the United 
States.
``Sec. 44103. Financial responsibility to pay liability for death or 
                    injury
  ``(a) General Requirement.--The owner or charterer of a vessel to 
which this chapter applies shall establish, under regulations 
prescribed by the Federal Maritime Commission, financial responsibility 
to meet liability for death or injury to passengers or other 
individuals on a voyage to or from a port in the United States.
  ``(b) Amounts.--
          ``(1) In general.--The amount of financial responsibility 
        required under subsection (a) shall be based on the number of 
        passenger accommodations as follows:
                  ``(A) $20,000 for each of the first 500 passenger 
                accommodations.
                  ``(B) $15,000 for each additional passenger 
                accommodation between 501 and 1,000.
                  ``(C) $10,000 for each additional passenger 
                accommodation between 1,001 and 1,500.
                  ``(D) $5,000 for each additional passenger 
                accommodation over 1,500.
          ``(2) Multiple vessels.--If the owner or charterer is 
        operating more than one vessel subject to this chapter, the 
        amount of financial responsibility shall be based on the number 
        of passenger accommodations on the vessel with the largest 
        number of passenger accommodations.
  ``(c) Availability To Pay Judgment.--The amount determined under 
subsection (b) shall be available to pay a judgment for damages 
(whether less than or more than $20,000) for death or injury to a 
passenger or other individual on a voyage to or from a port in the 
United States.
  ``(d) Means of Establishing.--Financial responsibility under this 
section may be established by one or more of the following if 
acceptable to the Commission:
          ``(1) Insurance.
          ``(2) Surety bond issued by a bonding company authorized to 
        do business in the United States.
          ``(3) Qualification as a self-insurer.
          ``(4) Other evidence of financial responsibility.
``Sec. 44104. Civil penalty
  ``A person that violates section 44102 or 44103 of this title is 
liable to the United States Government for a civil penalty of not more 
than $5,000, plus $200 for each passage sold, to be assessed by the 
Federal Maritime Commission. The Commission may remit or mitigate the 
penalty on terms the Commission considers proper.
``Sec. 44105. Refusal of clearance
  ``The Secretary of Homeland Security shall refuse the clearance 
required by section 60105 of this title, at the port or place of 
departure from the United States, of a vessel that is subject to this 
chapter and does not have evidence issued by the Federal Maritime 
Commission of compliance with sections 44102 and 44103 of this title.
``Sec. 44106. Conduct of proceedings
  ``Part A of this subtitle applies to proceedings conducted by the 
Federal Maritime Commission under this chapter.''.

SEC. 7. SUBTITLE V OF TITLE 46.

  (a) Coordination With Maritime Security Act of 2003.--
          (1) If this act effective first.--If this Act is enacted 
        before the amendment made by section 3531(a) of the Maritime 
        Security Act of 2003 (Public Law 108-136, 117 Stat. 1803) 
        becomes effective, such section 3531(a) is amended by striking 
        ``inserting before subtitle VI the following new subtitle:'' 
        and all that follows through the subtitle analysis which is 
        directed to be inserted by such section, and by substituting 
        ``inserting before chapter 533 the following new chapter:''.
          (2) If this act effective second.--If this Act is enacted 
        after the amendment made by section 3531(a) of the Maritime 
        Security Act of 2003 (Public Law 108-136, 117 Stat. 1803) 
        becomes effective, title 46, United States Code, is amended by 
        striking the heading and analysis of subtitle V.
  (b) Heading and Subtitle Analysis.--Title 46, United States Code, is 
amended by inserting after subtitle IV the following:

                     ``Subtitle V--Merchant Marine

                           ``Part A--General

``Chapter                                                           Sec.

Policy, Studies, and Reports.......................................50101
Administrative.....................................................50301
Other General Provisions...........................................50501

                   ``Part B--Merchant Marine Service

General............................................................51101
United States Merchant Marine Academy..............................51301
State Maritime Academy Support Program.............................51501
Other Support for Merchant Marine Training.........................51701
Merchant Marine Awards.............................................51901
Miscellaneous......................................................52101

                ``Part C--Financial Assistance Programs

Maritime Security Fleet............................................53101
Construction Reserve Funds.........................................53301
Capital Construction Funds.........................................53501
Loans and Guarantees...............................................53701
War Risk Insurance.................................................53901

                     ``Part D--Promotional Programs

Coastwise Trade....................................................55101
Passenger and Cargo Preferences....................................55301
Miscellaneous......................................................55501

           ``Part E--Control of Merchant Marine Capabilities

Restrictions on Transfers..........................................56101
Emergency Acquisition of Vessels...................................56301
Essential Vessels Affected by Neutrality Act.......................56501

              ``Part F--Government-Owned Merchant Vessels

General Authority..................................................57101
Vessel Trade-In Program............................................57301
Construction, Charter, and Sale of Vessels.........................57501

                  ``Part G--Restrictions and Penalties

Restrictions and Penalties......................................58101''.
  (c) Chapters Preceding Chapter 531.--Subtitle V of title 46, United 
States Code, is amended by inserting after the subtitle analysis the 
following:

                           ``Part A--General

              ``CHAPTER 501--POLICY, STUDIES, AND REPORTS

``Sec.
``50101.  Objectives and policy.
``50102.  Survey of merchant marine.
``50103.  Determinations of essential services.
``50104.  Studies of general maritime problems.
``50105.  Studies and cooperation relating to the construction of 
          vessels.
``50106.  Studies on the operation of vessels.
``50107.  Studies on marine insurance.
``50108.  Studies on cargo carriage and cargo containers.
``50109.  Miscellaneous studies.
``50110.  Securing preference to vessels of the United States.
``50111.  Reports to Congress.
``50112.  National Maritime Enhancement Institutes.
``50113.  Use and performance reports by operators of vessels.
``Sec. 50101. Objectives and policy
  ``(a) Objectives.--It is necessary for the national defense and the 
development of the domestic and foreign commerce of the United States 
that the United States have a merchant marine--
          ``(1) sufficient to carry the waterborne domestic commerce 
        and a substantial part of the waterborne export and import 
        foreign commerce of the United States and to provide shipping 
        service essential for maintaining the flow of the waterborne 
        domestic and foreign commerce at all times;
          ``(2) capable of serving as a naval and military auxiliary in 
        time of war or national emergency;
          ``(3) owned and operated under United States flag by citizens 
        of the United States insofar as practicable;
          ``(4) composed of the best-equipped, safest, and most 
        suitable types of vessels, built in the United States and 
        manned with a trained and efficient citizen personnel; and
          ``(5) supplemented by efficient facilities for building and 
        repairing vessels.
  ``(b) Policy.--It is the policy of the United States Government to 
encourage and aid the development and maintenance of a merchant marine 
satisfying the objectives described in subsection (a).
``Sec. 50102. Survey of merchant marine
  ``(a) In General.--The Secretary of Transportation shall survey the 
merchant marine of the United States to determine whether replacements 
and additions are required to carry out the objectives and policy of 
section 50101 of this title. The Secretary shall study, perfect, and 
adopt a long-range program for replacements and additions that will 
result, as soon as practicable, in--
          ``(1) an adequate and well-balanced merchant fleet, including 
        vessels of all types, that will provide shipping service 
        essential for maintaining the flow of foreign commerce by 
        vessels designed to be readily and quickly convertible into 
        transport and supply vessels in a time of national emergency;
          ``(2) ownership and operation of the fleet by citizens of the 
        United States insofar as practicable;
          ``(3) vessels designed to afford the best and most complete 
        protection for passengers and crew against fire and all marine 
        perils; and
          ``(4) an efficient capacity for building and repairing 
        vessels in the United States with an adequate number of skilled 
        personnel to provide an adequate mobilization base.
  ``(b) Cooperation With Secretary of Navy.--In carrying out subsection 
(a)(1), the Secretary of Transportation shall cooperate closely with 
the Secretary of the Navy as to national defense requirements.
``Sec. 50103. Determinations of essential services
  ``(a) Essential Services, Routes, and Lines.--
          ``(1) In general.--The Secretary of Transportation shall 
        investigate, determine, and keep current records of the ocean 
        services, routes, and lines from ports in the United States, or 
        in the territories and possessions of the United States, to 
        foreign markets, which the Secretary determines to be essential 
        for the promotion, development, expansion, and maintenance of 
        the foreign commerce of the United States. In making such a 
        determination, the Secretary shall consider and give due weight 
        to--
                  ``(A) the cost of maintaining each line;
                  ``(B) the probability that a line cannot be 
                maintained except at a heavy loss disproportionate to 
                the benefit to foreign trade;
                  ``(C) the number of voyages and types of vessels that 
                should be employed in a line;
                  ``(D) the intangible benefit of maintaining a line to 
                the foreign commerce of the United States, the national 
                defense, and other national requirements; and
                  ``(E) any other facts and conditions a prudent 
                business person would consider when dealing with the 
                person's own business.
          ``(2) Saint lawrence seaway.--For purposes of paragraph (1), 
        the Secretary shall establish services, routes, and lines that 
        reflect the seasonal closing of the Saint Lawrence Seaway and 
        provide for alternate routing of vessels through a different 
        range of ports during that closing to maintain continuity of 
        service on a year-round basis.
  ``(b) Bulk Cargo Carrying Services.--The Secretary shall investigate, 
determine, and keep current records of the bulk cargo carrying services 
that should be provided by United States-flag vessels (whether or not 
operating on particular services, routes, or lines) for the promotion, 
development, expansion, and maintenance of the foreign commerce of the 
United States and the national defense or other national requirements.
  ``(c) Types of Vessels.--The Secretary shall investigate, determine, 
and keep current records of the type, size, speed, method of 
propulsion, and other requirements of the vessels, including express-
liner or super-liner vessels, that should be employed in--
          ``(1) the services, routes, or lines described in subsection 
        (a), and the frequency and regularity of the voyages of the 
        vessels, with a view to furnishing adequate, regular, certain, 
        and permanent service; and
          ``(2) the bulk cargo carrying services described in 
        subsection (b).
``Sec. 50104. Studies of general maritime problems
  ``The Secretary of Transportation shall study all maritime problems 
arising in carrying out the policy in section 50101 of this title.
``Sec. 50105. Studies and cooperation relating to the construction of 
                    vessels
  ``(a) Relative Costs and New Designs.--The Secretary of 
Transportation shall investigate, determine, and keep current records 
of--
          ``(1) the relative cost of construction of comparable vessels 
        in the United States and in foreign countries; and
          ``(2) new designs, new methods of construction, and new types 
        of equipment for vessels.
  ``(b) Rules, Classifications, and Ratings.--The Secretary shall 
examine the rules under which vessels are constructed abroad and in the 
United States and the methods of classifying and rating the vessels.
  ``(c) Collaboration With Owners and Builders.--The Secretary shall 
collaborate with vessel owners and shipbuilders in developing plans for 
the economical construction of vessels and their propelling machinery, 
of most modern economical types, giving thorough consideration to all 
well-recognized means of propulsion and taking into account the 
benefits from standardized production where practicable and desirable.
  ``(d) Express-Liner and Super-Liner Vessels.--The Secretary shall 
study and cooperate with vessel owners in devising means by which there 
may be constructed, by or with the aid of the United States Government, 
express-liner or super-liner vessels comparable to those of other 
nations, especially with a view to their use in a national emergency, 
and the use of transoceanic aircraft service in connection with or in 
lieu of those vessels.
``Sec. 50106. Studies on the operation of vessels
  ``(a) Relative Costs.--The Secretary of Transportation shall 
investigate, determine, and keep current records of the relative cost 
of marine insurance, maintenance, repairs, wages and subsistence of 
officers and crews, and all other items of expense, in the operation of 
comparable vessels under the laws and regulations of the United States 
and those of the foreign countries whose vessels are substantial 
competitors of American vessels.
  ``(b) Shipyards.--The Secretary shall investigate, determine, and 
keep current records of the number, location, and efficiency of 
shipyards in the United States.
  ``(c) Navigation Laws.--The Secretary shall examine the navigation 
laws and regulations of the United States and make such recommendations 
to Congress as the Secretary considers proper for the amendment, 
improvement, and revision of those laws and for the development of the 
merchant marine of the United States.
``Sec. 50107. Studies on marine insurance
  ``The Secretary of Transportation shall--
          ``(1) examine into the subject of marine insurance, the 
        number of companies in the United States, domestic and foreign, 
        engaging in marine insurance, the extent of the insurance on 
        hulls and cargoes placed or written in the United States, and 
        the extent of reinsurance of American maritime risks in foreign 
        companies; and
          ``(2) ascertain what steps may be necessary to develop an 
        ample marine insurance system as an aid in the development of 
        the merchant marine of the United States.
``Sec. 50108. Studies on cargo carriage and cargo containers
  ``(a) Studies.--The Secretary of Transportation shall study--
          ``(1) the methods of encouraging the development and 
        implementation of new concepts for the carriage of cargo in the 
        domestic and foreign commerce of the United States; and
          ``(2) the economic and technological aspects of the use of 
        cargo containers as a method of carrying out the policy in 
        section 50101 of this title.
  ``(b) Restriction.--In carrying out subsection (a) and the policy in 
section 50101 of this title, the United States Government may not 
givepreference as between carriers based on the length, height, or 
width of cargo containers or the length, height, or width of cargo 
container cells. This restriction applies to all existing container 
vessels and any container vessel to be constructed or rebuilt.
``Sec. 50109. Miscellaneous studies
  ``(a) Foreign Subsidies.--The Secretary of Transportation shall 
investigate, determine, and keep current records of the extent and 
character of the governmental aid and subsidies granted by foreign 
governments to their merchant marine.
  ``(b) Laws Applicable to Aircraft.--The Secretary shall investigate, 
determine, and keep current records of the provisions of law relating 
to shipping that should be made applicable to aircraft engaged in 
foreign commerce to further the policy in section 50101 of this title, 
and any appropriate legislation in this regard.
  ``(c) Aid for Cotton, Coal, Lumber, and Cement.--The Secretary shall 
investigate, determine, and keep current records of the advisability of 
enactment of suitable legislation authorizing the Secretary, in an 
economic or commercial emergency, to aid farmers and producers of 
cotton, coal, lumber, and cement in any section of the United States in 
the transportation and landing of their products in any foreign port, 
which products can be carried in dry-cargo vessels by reducing rates, 
by supplying additional tonnage to any American operator, or by 
operation of vessels directly by the Secretary, until the Secretary 
considers the special rate reduction and operation unnecessary for the 
benefit of those farmers and producers.
  ``(d) Intercoastal and Inland Water Transportation.--The Secretary 
shall investigate, determine, and keep current records of intercoastal 
and inland water transportation, including their relation to 
transportation by land and air.
  ``(e) Obsolete Tonnage and Tramp Service.--The Secretary shall make 
studies and reports to Congress on--
          ``(1) the scrapping or removal from service of old or 
        obsolete merchant tonnage owned by the United States Government 
        or in use in the merchant marine; and
          ``(2) tramp shipping service and the advisability of citizens 
        of the United States participating in that service with vessels 
        under United States registry.
  ``(f) Mortgage Loans.--The Secretary shall investigate the legal 
status of mortgage loans on vessel property, with a view to the means 
of improving the security of those loans and of encouraging investment 
in American shipping.
``Sec. 50110. Securing preference to vessels of the United States
  ``(a) Possibilities of Promoting Carriage.--The Secretary of 
Transportation shall investigate, determine, and keep current records 
of the possibilities of promoting the carriage of United States foreign 
trade in vessels of the United States.
  ``(b) Inducements to Importers and Exporters.--The Secretary shall 
study and cooperate with vessel owners in devising means by which the 
importers and exporters of the United States can be induced to give 
preference to vessels of the United States.
  ``(c) Liaison With Agencies and Organizations.--The Secretary shall 
establish and maintain liaison with such other agencies of the United 
States Government, and with such representative trade organizations 
throughout the United States, as may be concerned, directly or 
indirectly, with any movement of commodities in the waterborne export 
and import foreign commerce of the United States, for the purpose of 
securing preference to vessels of the United States in the shipment of 
those commodities.
``Sec. 50111. Reports to Congress
  ``(a) In General.--Not later than April 1 of each year, the Secretary 
of Transportation shall submit a report to Congress. The report shall 
include, with respect to activities of the Secretary under this 
subtitle, the results of investigations, a summary of transactions, a 
statement of all expenditures and receipts, the purposes for which all 
expenditures were made, and any recommendations for legislation.
  ``(b) Administered and Oversight Funds.--The Secretary, in the report 
under subsection (a) and in the annual budget estimate for the Maritime 
Administration submitted to Congress, shall state separately the 
amount, source, intended use, and nature of any funds (other than funds 
appropriated to the Administration or to the Secretary of 
Transportation for use by the Administration) administered, or subject 
to oversight, by the Administration.
  ``(c) Additional Recommendations for Legislation.--The Secretary, 
from time to time, shall make recommendations to Congress for 
legislation the Secretary considers necessary to better achieve the 
objectives and policy of section 50101 of this title.
``Sec. 50112. National Maritime Enhancement Institutes
  ``(a) Designation.--The Secretary of Transportation may designate 
National Maritime Enhancement Institutes.
  ``(b) Activities.--Activities undertaken by an institute may 
include--
          ``(1) conducting research about methods to improve the 
        performance of maritime industries;
          ``(2) enhancing the competitiveness of domestic maritime 
        industries in international trade;
          ``(3) forecasting trends in maritime trade;
          ``(4) assessing technological advancements;
          ``(5) developing management initiatives and training;
          ``(6) analyzing economic and operational impacts of 
        regulatory policies and international negotiations or 
        agreements pending before international bodies;
          ``(7) assessing the compatibility of domestic maritime 
        infrastructure systems with overseas transport systems;
          ``(8) fostering innovations in maritime transportation 
        pricing; and
          ``(9) improving maritime economics and finance.
  ``(c) Application for Designation.--An institution seeking 
designation as a National Maritime Enhancement Institute shall submit 
an application under regulations prescribed by the Secretary.
  ``(d) Criteria for Designation.--The Secretary shall designate an 
institute under this section on the basis of the following criteria:
          ``(1) The demonstrated research and extension resources 
        available to the applicant for carrying out the activities 
        specified in subsection (b).
          ``(2) The ability of the applicant to provide leadership in 
        making national and regional contributions to the solution of 
        both long-range and immediate problems of the domestic maritime 
        industry.
          ``(3) The existence of an established program of the 
        applicant encompassing research and training directed to 
        enhancing maritime industries.
          ``(4) The demonstrated ability of the applicant to assemble 
        and evaluate pertinent information from national and 
        international sources and to disseminate results of maritime 
        industry research and educational programs through a continuing 
        education program.
          ``(5) The qualification of the applicant as a nonprofit 
        institution of higher learning.
  ``(e) Financial Awards.--The Secretary may make awards on an equal 
matching basis to an institute designated under subsection (a) from 
amounts appropriated. The aggregate annual amount of the Federal share 
of the awards by the Secretary may not exceed $500,000.
  ``(f) University Transportation Research Funds.--The Secretary may 
make a grant under section 5505 of title 49 to an institute designated 
under subsection (a) for maritime and maritime intermodal research 
under that section as if the institute were a university transportation 
center. In making a grant, the Secretary, through the Research and 
Special Programs Administration, shall advise the Maritime 
Administration on the availabilityof funds for the grants and consult 
with the Administration on making the grants.
``Sec. 50113. Use and performance reports by operators of vessels
  ``(a) Filing Requirement.--The Secretary of Transportation by 
regulation may require the operator of a vessel in the waterborne 
foreign commerce of the United States to file such report, account, 
record, or memorandum on the use and performance of the vessel as the 
Secretary considers desirable to assist in carrying out this subtitle. 
The report, account, record, or memorandum shall be signed and 
verified, and be filed at the times and in the manner, as provided by 
regulation.
  ``(b) Civil Penalty.--An operator not filing a report, account, 
record, or memorandum required by the Secretary under this section is 
liable to the United States Government for a civil penalty of $50 for 
each day of the violation. A penalty imposed under this section on the 
operator of a vessel constitutes a lien on the vessel involved in the 
violation, and the vessel may be libeled therefore in the district 
court of the United States for the district in which it may be found. 
The Secretary may remit or mitigate any penalty imposed under this 
section.

                     ``CHAPTER 503--ADMINISTRATIVE

``Sec.
``50301.  Vessel Operations Revolving Fund.
``50302.  Port development.
``50303.  Operating property and extending term of notes.
``50304.  Sale and transfer of property.
``50305.  Appointment of trustee or receiver and operation of vessels.
``50306.  Requiring testimony and records in investigations.
``Sec. 50301. Vessel Operations Revolving Fund
  ``(a) In General.--There is a `Vessel Operations Revolving Fund' for 
use by the Secretary of Transportation in carrying out duties and 
powers related to vessel operations, including charter, operation, 
maintenance, repair, reconditioning, and improvement of merchant 
vessels under the jurisdiction of the Secretary. The Fund has a working 
capital of $20,000,000, to remain available until expended.
  ``(b) Relationship to Other Laws.--Notwithstanding any other law, 
rates for shipping services provided under the Fund shall be prescribed 
by the Secretary and the Fund shall be credited with receipts from 
vessel operations conducted under the Fund. Sections 1(a) and (c), 
3(c), and 4 of the Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 
1293(c), 1294), apply to those operations and to seamen employed 
through general agents as employees of the United States Government. 
Notwithstanding any other law on the employment of persons by the 
Government, the seamen may be employed in accordance with customary 
commercial practices in the maritime industry.
  ``(c) Advancements.--With the approval of the Director of the Office 
of Management and Budget, the Secretary may advance amounts the 
Secretary considers necessary, but not more than 2 percent of vessel 
operating expenses, from the Fund to the appropriation `Salaries and 
Expenses' in carrying out duties and powers related to vessel 
operations, without regard to the limitations on amounts stated in that 
appropriation.
  ``(d) Transfers.--The unexpended balances of working funds or of 
allocation accounts established after January 1, 1951, for the 
activities provided for in subsection (a), and receipts received from 
those activities, may be transferred to the Fund, which shall be 
available for the purposes of those working funds or allocation 
accounts.
  ``(e) Limitation.--
          ``(1) In general.--Amounts made available to the Secretary 
        for maritime activities by this section or any other law may 
        not be used to pay for a vessel described in paragraph (2) 
        unless the compensation to be paid is computed under section 
        56303 of this title as that section is interpreted by the 
        Comptroller General.
          ``(2) Applicable vessels.--Paragraph (1) applies to a 
        vessel--
                  ``(A) the title to which is acquired by the 
                Government by requisition or purchase;
                  ``(B) the use of which is taken by requisition or 
                agreement; or
                  ``(C) lost while insured by the Government.
          ``(3) Nonapplicable vessels.--Paragraph (1) does not apply to 
        a vessel under a construction-differential subsidy contract.
  ``(f) Availability for Additional Purposes.--The Fund is available 
for--
          ``(1) necessary expenses incurred in the protection, 
        preservation, maintenance, acquisition, or use of vessels 
        involved in mortgage foreclosure or forfeiture proceedings 
        instituted by the Government, including payment of prior claims 
        and liens, expenses of sale, or other related charges;
          ``(2) necessary expenses incident to the redelivery and lay-
        up, in the United States, of vessels chartered as of June 20, 
        1956, under agreements not calling for their return to the 
        Government;
          ``(3) the activation, repair, and deactivation of merchant 
        vessels chartered for limited emergency purposes during fiscal 
        year 1957 under the jurisdiction of the Secretary; and
          ``(4) payment of expenses of custody and maintenance of 
        Government-owned vessels not in the National Defense Reserve 
        Fleet.
  ``(g) Expenses and Receipts Related to Charter Operations.--The Fund 
is available for expenses incurred in activating, repairing, and 
deactivating merchant vessels chartered under the jurisdiction of the 
Secretary. Receipts from charter operations of Government-owned vessels 
under the jurisdiction of the Secretary shall be credited to the Fund.
``Sec. 50302. Port development
  ``(a) General Requirements.--With the objective of promoting, 
encouraging, and developing ports and transportation facilities in 
connection with water commerce over which the Secretary of 
Transportation has jurisdiction, the Secretary, in cooperation with the 
Secretary of the Army, shall--
          ``(1) investigate territorial regions and zones tributary to 
        ports, taking into consideration the economies of 
        transportation by rail, water, and highway and the natural 
        direction of the flow of commerce;
          ``(2) investigate the causes of congestion of commerce at 
        ports and applicable remedies;
          ``(3) investigate the subject of water terminals, including 
        the necessary docks, warehouses, and equipment, to devise and 
        suggest the types most appropriate for different locations and 
        for the most expeditious and economical transfer or interchange 
        of passengers or property between water carriers and rail 
        carriers;
          ``(4) consult with communities on the appropriate location 
        and plan of construction of wharves, piers, and water 
        terminals;
          ``(5) investigate the practicability and advantages of 
        harbor, river, and port improvements in connection with foreign 
        and coastwise trade; and
          ``(6) investigate any other matter that may tend to promote 
        and encourage the use by vessels of ports adequate to care for 
        the freight that naturally would pass through those ports.
  ``(b) Submission of Findings to Surface Transportation Board.--After 
an investigation under subsection (a), if the Secretary of 
Transportation believes that the rates or practices of a rail carrier 
subject to the jurisdiction of the Surface Transportation Board are 
detrimental to the objective specified in subsection (a), or that new 
rates or practices, new or additional port terminal facilities, or 
affirmative action by a rail carrier is necessary to promote that 
objective, the Secretary may submit findings to the Board for action 
the Board considers appropriate under existing law.
``Sec. 50303. Operating property and extending term of notes
  ``(a) General Authority.--The Secretary of Transportation may--
          ``(1) operate or lease docks, wharves, piers, or real 
        property under the Secretary's control; and
          ``(2) make extensions and accept renewals of--
                  ``(A) promissory notes and other evidences of 
                indebtedness on property; and
                  ``(B) mortgages and other contracts securing the 
                property.
  ``(b) Terms of Transactions.--A transaction under subsection (a) 
shall be on terms the Secretary considers necessary to carry out the 
purposes of this subtitle, but consistent with sound business practice.
  ``(c) Availability of Amounts.--Amounts received by the Secretary 
from a transaction under this section are available for expenditure by 
the Secretary as provided in this subtitle.
``Sec. 50304. Sale and transfer of property
  ``(a) Authority To Sell.--The Secretary of Transportation may sell 
property (other than vessels transferred under section 4 of the 
Merchant Marine Act, 1920 (ch. 250, 41 Stat. 990)) on terms the 
Secretary considers appropriate.
  ``(b) Transfers From Military to Civilian Control.--When the 
President considers it in the interest of the United States, the 
President may transfer to the Secretary of Transportation possession 
and control of property described in the second paragraph of section 17 
of the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 994), as originally 
enacted, that is possessed and controlled by the Secretary of a 
military department.
  ``(c) Transfers From Civilian to Military Control.--When the 
President considers it necessary, the President by executive order may 
transfer to the Secretary of a military department possession and 
control of property described in section 17 of the Merchant Marine Act, 
1920 (ch. 250, 41 Stat. 994), as originally enacted, that is possessed 
and controlled by the Secretary of Transportation. The President's 
order shall state the need for the transfer and the period of the need. 
When the President decides that the need has ended, the possession and 
control shall revert to the Secretary of Transportation. The property 
may not be sold except as provided by law.
``Sec. 50305. Appointment of trustee or receiver and operation of 
                    vessels
  ``(a) Appointment of Trustees and Receivers.--
          ``(1) Appointment of secretary.--In a proceeding in a court 
        of the United States in which a trustee or receiver may be 
        appointed for a corporation operating a vessel of United States 
        registry between the United States and a foreign country, on 
        which the United States Government holds a mortgage, the court 
        may appoint the Secretary of Transportation as the sole trustee 
        or receiver (subject to the direction of the court) if--
                  ``(A) the court finds that the appointment will--
                          ``(i) inure to the advantage of the estate 
                        and the parties in interest; and
                          ``(ii) tend to carry out the purposes of this 
                        subtitle; and
                  ``(B) the Secretary expressly consents to the 
                appointment.
          ``(2) Appointment of other person.--The appointment of 
        another person as trustee or receiver without a hearing becomes 
        effective when ratified by the Secretary, but the Secretary may 
        demand a hearing.
  ``(b) Operation of Vessels.--
          ``(1) In general.--If the court is unwilling to allow the 
        trustee or receiver to operate the vessel in foreign commerce 
        without financial aid from the Government pending termination 
        of the proceeding, and the Secretary certifies to the court 
        that the continued operation of the vessel is essential to the 
        foreign commerce of the United States and is reasonably 
        calculated to carry out the purposes of this subtitle, the 
        court may allow the Secretary to operate the vessel, either 
        directly or through a managing agent or operator employed by 
        the Secretary. The Secretary must agree to comply with terms 
        imposed by the court sufficient to protect the parties in 
        interest. The Secretary also must agree to pay all operating 
        losses resulting from the operation. The operation shall be for 
        the account of the trustee or receiver.
          ``(2) Payment of operating losses and other amounts.--The 
        Secretary has no claim against the corporation, its estate, or 
        its assets for operating losses paid by the Secretary, but the 
        Secretary may pay amounts for depreciation the Secretary 
        considers reasonable and other amounts the court considers 
        just. The payment of operating losses and the other amounts and 
        compliance with terms imposed by the court shall be in 
        satisfaction of any claim against the Secretary resulting from 
        the operation of the vessel.
          ``(3) Deemed operation by government.--A vessel operated by 
        the Secretary under this subsection is deemed to be a vessel 
        operated by the Government under chapter 309 of this title.
``Sec. 50306. Requiring testimony and records in investigations
  ``(a) In General.--In conducting an investigation that the Secretary 
of Transportation considers necessary and proper to carry out this 
subtitle, the Secretary may administer oaths, take evidence, and 
subpoena persons to testify and produce documents relevant to the 
matter under investigation. Persons may be required to attend or 
produce documents from any place in the United States at any designated 
place of hearing.
  ``(b) Fees and Mileage.--Persons subpoenaed by the Secretary under 
subsection (a) shall be paid the same fees and mileage paid to 
witnesses in the courts of the United States.
  ``(c) Enforcement of Subpoenas.--If a person disobeys a subpoena 
issued under subsection (a), the Secretary may seek an order enforcing 
the subpoena from the district court of the United States for the 
district in which the person resides or does business. Process may be 
served in the judicial district in which the person resides or is 
found. The court may issue an order to obey the subpoena and punish a 
refusal to obey as a contempt of court.

                ``CHAPTER 505--OTHER GENERAL PROVISIONS

``Sec.
``50501.  Entities deemed citizens of the United States.
``50502.  Applicability to receivers, trustees, successors, and assigns.
``50503.  Oceanographic research vessels.
``50504.  Sailing school vessels.
``Sec. 50501. Entities deemed citizens of the United States
  ``(a) In General.--In this subtitle, a corporation, partnership, or 
association is deemed to be a citizen of the United States only if the 
controlling interest is owned by citizens of the United States. 
However, if the corporation, partnership, or association is operating a 
vessel in the coastwise trade, at least 75 percent of the interest must 
be owned by citizens of the United States.
  ``(b) Additional Requirements for Corporations.--In this subtitle, a 
corporation is deemed to be a citizen of the United States only if, in 
addition to satisfying the requirements in subsection (a)--
          ``(1) it is incorporated under the laws of the United States 
        or a State;
          ``(2) its chief executive officer, by whatever title, and the 
        chairman of its board of directors are citizens of the United 
        States; and
          ``(3) no more of its directors are noncitizens than a 
        minority of the number necessary to constitute a quorum.
  ``(c) Determination of Controlling Corporate Interest.--The 
controlling interest in a corporation is owned by citizens of the 
United States under subsection (a) only if--
          ``(1) title to the majority of the stock in the corporation 
        is vested in citizens of the United States free from any trust 
        or fiduciary obligation in favor of a person not a citizen of 
        the United States;
          ``(2) the majority of the voting power in the corporation is 
        vested in citizens of the United States;
          ``(3) there is no contract or understanding by which the 
        majority of the voting power in the corporation may be 
        exercised, directly or indirectly, in behalf of a person not a 
        citizen of the United States; and
          ``(4) there is no other means by which control of the 
        corporation is given to or permitted to be exercised by a 
        person not a citizen of the United States.
  ``(d) Determination of 75 Percent Corporate Interest.--At least 75 
percent of the interest in a corporation is owned by citizens of the 
United States under subsection (a) only if--
          ``(1) title to at least 75 percent of the stock in the 
        corporation is vested in citizens of the United States free 
        from any trust or fiduciary obligation in favor of a person not 
        a citizen of the United States;
          ``(2) at least 75 percent of the voting power in the 
        corporation is vested in citizens of the United States;
          ``(3) there is no contract or understanding by which more 
        than 25 percent of the voting power in the corporation may be 
        exercised, directly or indirectly, in behalf of a person not a 
        citizen of the United States; and
          ``(4) there is no other means by which control of more than 
        25 percent of an interest in the corporation is given to or 
        permitted to be exercised by a person not a citizen of the 
        United States.
``Sec. 50502. Applicability to receivers, trustees, successors, and 
                    assigns
  ``This subtitle applies to receivers, trustees, successors, and 
assigns of any person to whom this subtitle applies.
``Sec. 50503. Oceanographic research vessels
  ``An oceanographic research vessel (as defined in section 2101 of 
this title) is deemed not to be engaged in trade or commerce.
``Sec. 50504. Sailing school vessels
  ``(a) Definitions.--In this section, the terms `sailing school 
instructor', `sailing school student', and `sailing school vessel' have 
the meaning given those terms in section 2101 of this title.
  ``(b) Not Seamen.--A sailing school student or sailing school 
instructor is deemed not to be a seaman under--
          ``(1) parts B, F, and G of subtitle II of this title; or
          ``(2) the maritime law doctrines of maintenance and cure or 
        warranty of seaworthiness.
  ``(c) Not Merchant Vessel or Engaged in Trade or Commerce.--A sailing 
school vessel is deemed not to be--
          ``(1) a merchant vessel under section 11101(a)-(c) of this 
        title; or
          ``(2) a vessel engaged in trade or commerce.
  ``(d) Evidence of Financial Responsibility.--The owner or charterer 
of a sailing school vessel shall maintain evidence of financial 
responsibility to meet liability for death or injury to sailing school 
students and sailing school instructors on a voyage on the vessel. The 
amount of financial responsibility shall be at least $50,000 for each 
student and instructor. Financial responsibility under this subsection 
may be evidenced by insurance or other adequate financial resources.

                   ``Part B--Merchant Marine Service

                         ``CHAPTER 511--GENERAL

``Sec.
``51101.  Policy.
``51102.  Definitions.
``51103.  General authority of Secretary of Transportation.
``51104.  General authority of Secretary of the Navy.
``Sec. 51101. Policy
  ``It is the policy of the United States Government that merchant 
marine vessels of the United States should be operated by highly 
trained and efficient citizens of the United States and that the United 
States Navy and the merchant marine of the United States should work 
closely together to promote the maximum integration of the total 
seapower forces of the United States.
``Sec. 51102. Definitions
  ``In this part:
          ``(1) Academy.--The term `Academy' means the United States 
        Merchant Marine Academy located at Kings Point, New York, and 
        maintained under chapter 513 of this title.
          ``(2) Cost of education provided.--The term `cost of 
        education provided' means the financial costs incurred by the 
        United States Government for providing training or financial 
        assistance to students at the Academy and the State maritime 
        academies, including direct financial assistance, room, board, 
        classroom academics, and other training activities.
          ``(3) Merchant marine officer.--The term `merchant marine 
        officer' means an individual issued a license by the Coast 
        Guard authorizing service as--
                  ``(A) a master, mate, or pilot on a documented vessel 
                that--
                          ``(i) is of at least 1,000 gross tons as 
                        measured under section 14502 of this title or 
                        an alternate tonnage measured under section 
                        14302 of this title as prescribed by the 
                        Secretary under section 14104 of this title; 
                        and
                          ``(ii) operates on the oceans or the Great 
                        Lakes; or
                  ``(B) an engineer officer on a documented vessel 
                propelled by machinery of at least 4,000 horsepower.
          ``(4) State maritime academy.--The term `State maritime 
        academy' means--
                  ``(A) a State maritime academy or college sponsored 
                by a State and assisted under chapter 515 of this 
                title; and
                  ``(B) a regional maritime academy or college 
                sponsored by a group of States and assisted under 
                chapter 515 of this title.
``Sec. 51103. General authority of Secretary of Transportation
  ``(a) Education and Training.--The Secretary of Transportation may 
provide for the education and training of citizens of the United States 
for the safe and efficient operation of the merchant marine of the 
United States at all times, including operation as a naval and military 
auxiliary in time of war or national emergency.
  ``(b) Surplus Property for Instructional Purposes.--
          ``(1) In general.--The Secretary may cooperate with and 
        assist the institutions named in paragraph (2) by making 
        vessels, shipboard equipment, and other marine equipment, owned 
        by the United States Government and determined to be excess or 
        surplus, available to those institutions for instructional 
        purposes, by gift, loan, sale, lease, or charter on terms the 
        Secretary considers appropriate.
          ``(2) Institutions.--The institutions referred to in 
        paragraph (1) are--
                  ``(A) the United States Merchant Marine Academy;
                  ``(B) a State maritime academy; and
                  ``(C) a nonprofit training institution jointly 
                approved by the Secretary of Transportation and the 
                Secretary of the department in which the Coast Guard is 
                operating as offering training courses that meet 
                Federal regulations for maritime training.
  ``(c) Assistance From Other Agencies.--
          ``(1) In general.--The Secretary of Transportation may secure 
        directly from an agency, on a reimbursable basis, information, 
        facilities, and equipment necessary to carry out this part.
          ``(2) Detailing personnel.--At the request of the Secretary, 
        the head of an agency (including a military department) may 
        detail, on a reimbursable basis, personnel from the agency to 
        the Secretary to assist in carrying out this part.
  ``(d) Academy Personnel.--To carry out this part, the Secretary may--
          ``(1) employ an individual as a professor, lecturer, or 
        instructor at the Academy, without regard to the provisions of 
        title 5 governing appointments in the competitive service; and
          ``(2) pay the individual without regard to chapter 51 and 
        subchapter III of chapter 53 of title 5.
``Sec. 51104. General authority of Secretary of the Navy
  ``The Secretary of the Navy, in cooperation with the Maritime 
Administrator and the head of each State maritime academy, shall ensure 
that--
          ``(1) the training of future merchant marine officers at the 
        United States Merchant Marine Academy and at State maritime 
        academies includes programs for naval science training in the 
        operation of merchant vessels as a naval and military 
        auxiliary; and
          ``(2) naval officer training programs for future officers, 
        insofar as possible, are maintained at designated maritime 
        academies consistent with Navy standards and needs.

          ``CHAPTER 513--UNITED STATES MERCHANT MARINE ACADEMY

``Sec.
``51301.  Maintenance of the Academy.
``51302.  Nomination and competitive appointment of cadets.
``51303.  Non-competitive appointments.
``51304.  Additional appointments from particular areas.
``51305.  Prohibited basis for appointment.
``51306.  Cadet commitment agreements.
``51307.  Places of training.
``51308.  Uniforms, textbooks, and transportation allowances.
``51309.  Academic degree.
``51310.  Deferment of service obligation under cadet commitment 
          agreements.
``51311.  Midshipman status in the Naval Reserve.
``51312.  Board of Visitors.
``51313.  Advisory Board.
``Sec. 51301. Maintenance of the Academy
  ``The Secretary of Transportation shall maintain the United States 
Merchant Marine Academy to provide instruction to individuals to 
prepare them for service in the merchant marine of the United States.
``Sec. 51302. Nomination and competitive appointment of cadets
  ``(a) Requirements.--An individual may be nominated for a competitive 
appointment as a cadet at the United States Merchant Marine Academy 
only if the individual--
          ``(1) is a citizen or national of the United States; and
          ``(2) meets the minimum requirements that the Secretary of 
        Transportation shall establish.
  ``(b) Nominators.--Nominations for competitive appointments for the 
positions allocated under subsection (c) may be made as follows:
          ``(1) A Senator may nominate residents of the State 
        represented by that Senator.
          ``(2) A Member of the House of Representatives may nominate 
        residents of the State in which the congressional district 
        represented by that Member is located.
          ``(3) A Delegate to the House of Representatives from the 
        District of Columbia, the Virgin Islands, Guam, or American 
        Samoa may nominate residents of the jurisdiction represented by 
        that Delegate.
          ``(4) The Resident Commissioner to the United States from 
        Puerto Rico may nominate residents of Puerto Rico.
          ``(5) The Governor of the Northern Mariana Islands may 
        nominate residents of the Northern Mariana Islands.
          ``(6) The Panama Canal Commission may nominate--
                  ``(A) residents, or sons or daughters of residents, 
                of an area or installation in Panama and made available 
                to the United States under the Panama Canal Treaty of 
                1977, the agreements relating to and implementing that 
                Treaty, signed September 7, 1977, and the Agreement 
                Between the United States of America and the Republic 
                of Panama Concerning Air Traffic Control and Related 
                Services, concluded January 8, 1979; and
                  ``(B) sons or daughters of personnel of the United 
                States Government and the Panama Canal Commission 
                residing in Panama.
  ``(c) Allocation of Positions.--Positions for competitive 
appointments shall be allocated each year as follows:
          ``(1) Positions shall be allocated for residents of each 
        State nominated by the Members of Congress from that State in 
        proportion to the representation in Congress from that State.
          ``(2) Four positions shall be allocated for residents of the 
        District of Columbia nominated by the Delegate to the House of 
        Representatives from the District of Columbia.
          ``(3) One position each shall be allocated for residents of 
        the Virgin Islands, Guam, and American Samoa nominated by the 
        Delegates to the House of Representatives from the Virgin 
        Islands, Guam, and American Samoa, respectively.
          ``(4) One position shall be allocated for a resident of 
        Puerto Rico nominated by the Resident Commissioner to the 
        United States from Puerto Rico.
          ``(5) One position shall be allocated for a resident of the 
        Northern Mariana Islands nominated by the Governor of the 
        Northern Mariana Islands.
          ``(6) Two positions shall be allocated for individuals 
        nominated by the Panama Canal Commission.
  ``(d) Competitive System for Appointment.--
          ``(1) Establishment of system.--The Secretary shall establish 
        a competitive system for selecting individuals nominated under 
        subsection (b) to fill the positions allocated under subsection 
        (c). The system must determine the relative merit of each 
        individual based on competitive examinations, an assessment of 
        the individual's academic background, and other effective 
        indicators of motivation and probability of successful 
        completion of training at the Academy.
          ``(2) Appointments by jurisdiction.--The Secretary shall 
        appoint individuals to fill the positions allocated under 
        subsection (c) for each jurisdiction in the order of merit of 
        the individuals nominated from that jurisdiction.
          ``(3) Remaining unfilled positions.--If positions remain 
        unfilled after the appointments are made under paragraph (2), 
        the Secretary shall appoint individuals to fill the positions 
        in the order of merit of the remaining individuals nominated 
        from all jurisdictions.
``Sec. 51303. Non-competitive appointments
  ``The Secretary of Transportation may appoint each year without 
competition as cadets at the United States Merchant Marine Academy not 
more than 40 qualified individuals with qualities the Secretary 
considers to be of special value to the Academy. In making these 
appointments, the Secretary shall try to achieve a national demographic 
balance at the Academy.
``Sec. 51304. Additional appointments from particular areas
  ``(a) Other Countries in Western Hemisphere.--The President may 
appoint individuals from countries in the Western Hemisphere other than 
the United States to receive instruction at the United States Merchant 
Marine Academy. Not more than 12 individuals may receive instruction 
under this subsection at the same time, and not more than 2 individuals 
from the same country may receive instruction under this subsection at 
the same time.
  ``(b) Other Countries Generally.--
          ``(1) Appointment.--The Secretary of Transportation, with the 
        approval of the Secretary of State, may appoint individuals 
        from countries other than the United States to receive 
        instruction at the Academy. Not more than 30 individuals may 
        receive instruction under this subsection at the same time.
          ``(2) Reimbursement.--The Secretary of Transportation shall 
        ensure that the country from which an individual comes under 
        thissubsection will reimburse the Secretary for the cost (as 
determined by the Secretary) of the instruction and allowances received 
by the individual.
  ``(c) Panama.--
          ``(1) Appointment.--The Secretary of Transportation, with the 
        approval of the Secretary of State, may appoint individuals 
        from Panama to receive instruction at the Academy. Individuals 
        appointed under this subsection are in addition to those 
        appointed under any other provision of this chapter.
          ``(2) Reimbursement.--The Secretary of Transportation shall 
        be reimbursed for the cost (as determined by the Secretary) of 
        the instruction and allowances received by an individual 
        appointed under this subsection.
  ``(d) Allowances and Regulations.--Individuals receiving instruction 
under this section are entitled to the same allowances and are subject 
to the same regulations on admission, attendance, discipline, 
resignation, discharge, dismissal, and graduation, as cadets at the 
Academy appointed from the United States.
``Sec. 51305. Prohibited basis for appointment
  ``Preference may not be given to an individual for appointment as a 
cadet at the United States Merchant Marine Academy because one or more 
members of the individual's immediate family are alumni of the Academy.
``Sec. 51306. Cadet commitment agreements
  ``(a) Agreement Requirements.--A citizen of the United States 
appointed as a cadet at the United States Merchant Marine Academy must 
sign, as a condition of the appointment, an agreement to--
          ``(1) complete the course of instruction at the Academy;
          ``(2) fulfill the requirements for a license as an officer in 
        the merchant marine of the United States before graduation from 
        the Academy;
          ``(3) maintain a valid license as an officer in the merchant 
        marine of the United States for at least 6 years after 
        graduation from the Academy, accompanied by the appropriate 
        national and international endorsements and certification 
        required by the Coast Guard for service aboard vessels on 
        domestic and international voyages;
          ``(4) apply for, and accept if tendered, an appointment as a 
        commissioned officer in the Naval Reserve (including the 
        Merchant Marine Reserve, Naval Reserve), the Coast Guard 
        Reserve, or any other reserve unit of an armed force of the 
        United States, and, if tendered the appointment, to serve for 
        at least 6 years after graduation from the Academy;
          ``(5) serve the foreign and domestic commerce and the 
        national defense of the United States for at least 5 years 
        after graduation from the Academy--
                  ``(A) as a merchant marine officer on a documented 
                vessel or a vessel owned and operated by the United 
                States Government or by a State;
                  ``(B) as an employee in a United States maritime-
                related industry, profession, or marine science (as 
                determined by the Secretary of Transportation), if the 
                Secretary determines that service under subclause (A) 
                is not available to the individual;
                  ``(C) as a commissioned officer on active duty in an 
                armed force of the United States, as a commissioned 
                officer in the National Oceanic and Atmospheric 
                Administration, or in other maritime-related Federal 
                employment which serves the national security interests 
                of the United States, as determined by the Secretary; 
                or
                  ``(D) by a combination of the service alternatives 
                referred to in subclauses (A)-(C); and
          ``(6) report to the Secretary on compliance with clauses (1)-
        (5).
  ``(b) Failure To Complete Course of Instruction.--
          ``(1) Active duty.--If the Secretary of Transportation 
        determines that an individual who has attended the Academy for 
        at least 2 years has failed to fulfill the part of the 
        agreement described in subsection (a)(1), the individual may be 
        ordered by the Secretary of Defense to serve on active duty in 
        one of the armed forces of the United States for a period of 
        not more than 2 years. In cases of hardship as determined by 
        the Secretary of Transportation, the Secretary of 
        Transportation may waive this paragraph in whole or in part.
          ``(2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on active 
        duty under paragraph (1), or if the Secretary of Transportation 
        determines that reimbursement of the cost of education provided 
        would better serve the interests of the United States, the 
        Secretary of Transportation may recover from the individual the 
        cost of education provided by the Government.
  ``(c) Failure To Carry Out Other Requirements.--
          ``(1) Active duty.--If the Secretary of Transportation 
        determines that an individual has failed to fulfill any part of 
        the agreement described in subsection (a)(2)-(6), the 
        individual may be ordered to serve on active duty for a period 
        of at least 3 years but not more than the unexpired period (as 
        determined by the Secretary) of the service required by 
        subsection (a)(5). The Secretary of Transportation, in 
        consultation with the Secretary of Defense, shall determine in 
        which service the individual shall serve. In cases of hardship 
        as determined by the Secretary of Transportation, the Secretary 
        of Transportation may waive this paragraph in whole or in part.
          ``(2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on active 
        duty under paragraph (1), or if the Secretary of Transportation 
        determines that reimbursement of the cost of education provided 
        would better serve the interests of the United States, the 
        Secretary of Transportation may recover from the individual the 
        cost of education provided. The Secretary may reduce the amount 
        to be recovered to reflect partial performance of service 
        obligations and other factors the Secretary determines merit a 
        reduction.
  ``(d) Actions To Recover Cost.--To aid in the recovery of the cost of 
education provided by the Government under a commitment agreement under 
this section, the Secretary of Transportation may--
          ``(1) request the Attorney General to bring a civil action 
        against the individual; and
          ``(2) make use of the Federal debt collection procedures in 
        chapter 176 of title 28 or other applicable administrative 
        remedies.
``Sec. 51307. Places of training
  ``The Secretary of Transportation may provide for the training of 
cadets at the United States Merchant Marine Academy--
          ``(1) on vessels owned or subsidized by the United States 
        Government;
          ``(2) on other documented vessels, with the permission of the 
        owner; and
          ``(3) in shipyards or plants and with industrial or 
        educational organizations.
``Sec. 51308. Uniforms, textbooks, and transportation allowances
  ``The Secretary of Transportation shall provide cadets at the United 
States Merchant Marine Academy--
          ``(1) all required uniforms and textbooks; and
          ``(2) allowances for transportation (including reimbursement 
        of traveling expenses) when traveling under orders as a cadet.
``Sec. 51309. Academic degree
  ``(a) Bachelor's Degree.--
          ``(1) In general.--The Superintendent of the United States 
        Merchant Marine Academy may confer the degree of bachelor of 
        science on an individual who--
                  ``(A) has met the conditions prescribed by the 
                Secretary of Transportation; and
                  ``(B) if a citizen of the United States, has passed 
                the examination for a merchant marine officer's 
                license.
          ``(2) Effect of physical disqualification.--An individual not 
        allowed to take the examination for a merchant marine officer's 
        license only because of physical disqualification may not be 
        denied a degree for not taking the examination.
  ``(b) Master's Degree.--The Superintendent of the Academy may confer 
a master's degree on an individual who has met the conditions 
prescribed by the Secretary. A master's degree program may be funded 
through non-appropriated funds. To maintain the appropriate academic 
standards, the program shall be accredited by the appropriate 
accreditation body. The Secretary may prescribe regulations necessary 
to administer such a program.
  ``(c) Graduation Not Entitlement To Hold License.--Graduation from 
the Academy does not entitle an individual to hold a license 
authorizing service on a merchant vessel.
``Sec. 51310. Deferment of service obligation under cadet commitment 
                    agreements
  ``The Secretary of Transportation may defer the service commitment of 
an individual under section 51306(a)(5) of this title (as specified in 
the cadet commitment agreement) for not more than 2 years if the 
individual is engaged in a graduate course of study approved by the 
Secretary. However, deferment of service as a commissioned officer on 
active duty must be approved by the Secretary of the affected military 
department (or the Secretary of Commerce, for service with the National 
Oceanic and Atmospheric Administration).
``Sec. 51311. Midshipman status in the Naval Reserve
  ``(a) Application Requirement.--Before being appointed as a cadet at 
the United States Merchant Marine Academy, a citizen of the United 
States must agree to apply for midshipman status in the Naval Reserve 
(including the Merchant Marine Reserve, Naval Reserve).
  ``(b) Appointment.--
          ``(1) In general.--A citizen of the United States appointed 
        as a cadet at the Academy shall be appointed by the Secretary 
        of the Navy as a midshipman in the Naval Reserve (including the 
        Merchant Marine Reserve, Naval Reserve).
          ``(2) Rights and privileges.--The Secretary of the Navy shall 
        provide for cadets of the Academy who are midshipmen in the 
        United States Naval Reserve to be--
                  ``(A) issued an identification card (referred to as a 
                `military ID card'); and
                  ``(B) entitled to all rights and privileges in 
                accordance with the same eligibility criteria as apply 
                to other members of the Ready Reserve of the reserve 
                components of the armed forces.
          ``(3) Coordination.--The Secretary of the Navy shall carry 
        out paragraphs (1) and (2) in coordination with the Secretary 
        of Transportation.
``Sec. 51312. Board of Visitors
  ``(a) In General.--The United States Merchant Marine Academy has a 
Board of Visitors that shall visit the Academy annually on a date named 
by the Secretary of Transportation and make recommendations to the 
Secretary on the operation of the Academy. The Board has a term of 2 
years commencing at the beginning of each Congress.
  ``(b) Appointment.--
          ``(1) In general.--The Board is composed of--
                  ``(A) 2 Senators appointed by the chairman of the 
                Committee on Commerce, Science, and Transportation of 
                the Senate;
                  ``(B) 3 Members of the House of Representatives 
                appointed by the chairman of the Committee on 
                Transportation and Infrastructure of the House of 
                Representatives;
                  ``(C) 1 Senator appointed by the Vice President;
                  ``(D) 2 Members of the House of Representatives 
                appointed by the Speaker of the House of 
                Representatives; and
                  ``(E) the chairmen of the Committee on Commerce, 
                Science, and Transportation of the Senate and the 
                Committee on Transportation and Infrastructure of the 
                House of Representatives, as ex officio members.
          ``(2) Substitute appointment.--If an appointed member of the 
        Board is unable to visit the Academy as provided in subsection 
        (a), another individual may be appointed as a substitute in the 
        manner provided in paragraph (1).
  ``(c) Staff.--The chairmen of the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Transportation and 
Infrastructure of the House of Representatives may designate staff 
members of their committees to serve without reimbursement as staff for 
the Board.
  ``(d) Travel Expenses.--When serving away from home or regular place 
of business, a member of the Board or a staff member designated under 
subsection (c) shall be allowed travel expenses, including per diem in 
lieu of subsistence, as authorized by section 5703 of title 5.
``Sec. 51313. Advisory Board
  ``(a) In General.--The United States Merchant Marine Academy has an 
Advisory Board that shall visit the Academy at least once during each 
academic year to examine the course of instruction and management of 
the Academy and to advise the Maritime Administrator and the 
Superintendent of the Academy.
  ``(b) Appointment and Terms.--The Board is composed of not more than 
7 individuals appointed by the Secretary of Transportation. The 
individuals must be distinguished in education and other fields related 
to the Academy. Members of the Board are appointed for terms of not 
more than 3 years and may be reappointed. The Secretary shall designate 
one of the members as chairman.
  ``(c) Travel Expenses.--When serving away from home or regular place 
of business, a member of the Board shall be allowed travel expenses, 
including per diem in lieu of subsistence, as authorized by section 
5703 of title 5.
  ``(d) Relationship to Other Law.--The Federal Advisory Committee Act 
(5 App. U.S.C.) does not apply to the Board.

         ``CHAPTER 515--STATE MARITIME ACADEMY SUPPORT PROGRAM

``Sec.
``51501.  General support program.
``51502.  Detailing of personnel.
``51503.  Regional maritime academies.
``51504.  Use of training vessels.
``51505.  Annual payments for maintenance and support.
``51506.  Conditions to receiving payments and use of vessels.
``51507.  Places of training.
``51508.  Allowances for students.
``51509.  Student incentive payment agreements.
``51510.  Deferment of service obligation under student incentive 
          payment agreements.
``51511.  Midshipman status in the Naval Reserve.
``Sec. 51501. General support program
  ``(a) Assistance to State Maritime Academies.--The Secretary of 
Transportation shall cooperate with and assist State maritime academies 
in providing instruction to individuals to prepare them for service in 
the merchant marine of the United States.
  ``(b) Course Development.--The Secretary shall provide to each State 
maritime academy guidance and assistance in developing courses on the 
operation and maintenance of new vessels, on equipment, and on 
innovations being introduced to the merchant marine of the United 
States.
``Sec. 51502. Detailing of personnel
  ``At the request of the Governor of a State, the President may 
detail, without reimbursement, personnel of the Navy, the Coast Guard, 
and theMaritime Service to a State maritime academy to serve as a 
superintendent, professor, lecturer, or instructor at the academy.
``Sec. 51503. Regional maritime academies
  ``The Governors of the States cooperating to sponsor a regional 
maritime academy shall designate in writing one of those States to 
conduct the affairs of that academy. A regional maritime academy is 
eligible for assistance from the United States Government on the same 
basis as a State maritime academy sponsored by a single State.
``Sec. 51504. Use of training vessels
  ``(a) Applications To Use Vessels.--The Governor of a State 
sponsoring a State maritime academy (or the Governor of the State 
designated to conduct the affairs of a regional maritime academy) may 
apply in writing to the Secretary of Transportation to obtain the use 
of a training vessel for the academy. A vessel provided under this 
section remains the property of the United States Government.
  ``(b) General Authority.--Subject to subsection (c), the Secretary 
may provide to a State maritime academy, for use as a training vessel, 
a suitable vessel under the control of the Secretary or made available 
to the Secretary under subsection (e). If a suitable vessel is not 
available, the Secretary may build and provide a suitable vessel.
  ``(c) Approval Requirements.--The Secretary may provide a vessel 
under this section only if--
          ``(1) an application has been made under subsection (a);
          ``(2) the State maritime academy satisfies section 51506(a) 
        of this title; and
          ``(3) a suitable port will be available for the safe mooring 
        of the vessel while the academy is using the vessel.
  ``(d) Preparation and Maintenance.--A vessel provided under this 
section shall be--
          ``(1) repaired, reconditioned, and equipped (with all 
        apparel, charts, books, and instruments of navigation) as 
        necessary for use as a training vessel; and
          ``(2) maintained in good repair by the Secretary.
  ``(e) Agency Vessels.--An agency may provide to the Secretary, for 
use by a State maritime academy, a vessel (including equipment) that--
          ``(1) is suitable for training purposes; and
          ``(2) can be provided without detriment to the service to 
        which the vessel is assigned.
  ``(f) Fuel Costs.--The Secretary may pay to a State maritime academy 
the costs of fuel used by a vessel provided under this section while 
used for training.
  ``(g) Removing Vessels From Service and Vessel Sharing.--The 
Secretary may not--
          ``(1) take a vessel, currently in use as a training vessel 
        under this section, out of service to implement an alternative 
        program (including vessel sharing) unless the vessel is 
        incapable of being maintained in good repair as required by 
        subsection (d); or
          ``(2) implement a program requiring a State maritime academy 
        to share its training vessel with another State maritime 
        academy, except with the express consent of Congress.
``Sec. 51505. Annual payments for maintenance and support
  ``(a) Payment Agreements.--The Secretary of Transportation may make 
an agreement (effective for not more than 4 years) with the following 
academies to provide annual payments to those academies for their 
maintenance and support:
          ``(1) One State maritime academy in each State that satisfies 
        section 51506(a) of this title.
          ``(2) Each regional maritime academy that satisfies section 
        51506(a) of this title.
  ``(b) Payments.--
          ``(1) In general.--Subject to paragraph (2), an annual 
        payment to an academy under subsection (a) shall be at least 
        equal to the amount given to the academy for its maintenance 
        and support by the State in which it is located, or, for a 
        regional maritime academy, by all States cooperating to sponsor 
        the academy.
          ``(2) Maximum.--The amount under paragraph (1) may not be 
        more than $25,000. However, if the academy satisfies section 
        51506(b) of this title, the amount shall be--
                  ``(A) $100,000 for a State maritime academy; and
                  ``(B) $200,000 for a regional maritime academy.
``Sec. 51506. Conditions to receiving payments and use of vessels
  ``(a) General Conditions.--As conditions of receiving an annual 
payment or the use of a vessel under this chapter, a State maritime 
academy must--
          ``(1) provide courses of instruction on navigation, marine 
        engineering (including steam and diesel propulsion), the 
        operation and maintenance of new vessels and equipment, and 
        innovations being introduced to the merchant marine of the 
        United States;
          ``(2) agree in writing to conform to the standards for 
        courses, training facilities, admissions, and instruction that 
        the Secretary of Transportation may establish after 
        consultation with the superintendents of State maritime 
        academies; and
          ``(3) agree in writing to require, as a condition for 
        graduation, that each individual who is a citizen of the United 
        States and who is attending the academy in a merchant marine 
        officer preparation program pass the examination required for 
        the issuance of a license under section 7101 of this title.
  ``(b) Additional Condition to Payments of More Than $25,000.--As a 
condition of receiving an annual payment of more than $25,000 under 
section 51505 of this title, a State maritime academy also must agree 
to admit each year a number of citizens of the United States who meet 
its admission requirements and reside in a State not supporting that 
academy. The Secretary shall determine the number of individuals to be 
admitted by each academy under this subsection. The number may not be 
more than one-third of the total number of individuals attending the 
academy at any time.
``Sec. 51507. Places of training
  ``The Secretary of Transportation may provide for the training of 
students attending a State maritime academy--
          ``(1) on vessels owned or subsidized by the United States 
        Government;
          ``(2) on other documented vessels, with the permission of the 
        owner; and
          ``(3) in shipyards or plants and with industrial or 
        educational organizations.
``Sec. 51508. Allowances for students
  ``Under regulations prescribed by the Secretary of Transportation, a 
student at a State maritime academy shall receive from the Secretary 
allowances for transportation (including reimbursement of traveling 
expenses) when traveling under orders to receive training under section 
51507 of this title.
``Sec. 51509. Student incentive payment agreements
  ``(a) General Authority.--If a State maritime academy has an 
agreement with the Secretary of Transportation under section 51505 of 
this title, the Secretary may make an agreement with a student at the 
academy who is a citizen of the United States to make student incentive 
payments to the individual. An agreement with a student may not be 
effective for more than 4 academic years. The Secretary shall allocate 
payments under this section among the various State maritime academies 
in an equitable manner.
  ``(b) Payments.--Payments under an agreement under this section shall 
be equal to $4,000 each academic year and be paid, as prescribed by 
theSecretary, while the individual is attending the academy. The 
payments shall be used for uniforms, books, and subsistence.
  ``(c) Midshipman and Enlisted Reserve Status.--An agreement under 
this section shall require the student to accept midshipman and 
enlisted reserve status in the Naval Reserve (including the Merchant 
Marine Reserve, Naval Reserve) before receiving any payments under the 
agreement.
  ``(d) Agreement Requirements.--An agreement under this section shall 
require the student to--
          ``(1) complete the course of instruction at the academy the 
        individual is attending;
          ``(2) take the examination for a license as an officer in the 
        merchant marine of the United States before graduation from the 
        academy and fulfill the requirements for such a license within 
        3 months after graduation from the academy;
          ``(3) maintain a valid license as an officer in the merchant 
        marine of the United States for at least 6 years after 
        graduation from the academy, accompanied by the appropriate 
        national and international endorsements and certification 
        required by the Coast Guard for service aboard vessels on 
        domestic and international voyages;
          ``(4) accept, if tendered, an appointment as a commissioned 
        officer in the Naval Reserve (including the Merchant Marine 
        Reserve, Naval Reserve), the Coast Guard Reserve, or any other 
        reserve unit of an armed force of the United States, and, if 
        tendered the appointment, to serve for at least 6 years after 
        graduation from the academy;
          ``(5) serve the foreign and domestic commerce and the 
        national defense of the United States for at least 3 years 
        after graduation from the academy--
                  ``(A) as a merchant marine officer on a documented 
                vessel or a vessel owned and operated by the United 
                States Government or by a State;
                  ``(B) as an employee in a United States maritime-
                related industry, profession, or marine science (as 
                determined by the Secretary), if the Secretary 
                determines that service under subclause (A) is not 
                available to the individual;
                  ``(C) as a commissioned officer on active duty in an 
                armed force of the United States, as a commissioned 
                officer in the National Oceanic and Atmospheric 
                Administration, or in other maritime-related Federal 
                employment which serves the national security interests 
                of the United States, as determined by the Secretary; 
                or
                  ``(D) by a combination of the service alternatives 
                referred to in subclauses (A)-(C); and
          ``(6) report to the Secretary on compliance with clauses (1)-
        (5).
  ``(e) Failure To Complete Course of Instruction.--
          ``(1) Active duty.--If the Secretary of Transportation 
        determines that an individual who has accepted the payments 
        described in subsection (b) for a minimum of 2 academic years 
        has failed to fulfill the part of the agreement described in 
        subsection (d)(1), the individual may be ordered by the 
        Secretary of Defense to serve on active duty in the armed 
        forces of the United States for a period of not more than 2 
        years. In cases of hardship as determined by the Secretary of 
        Transportation, the Secretary of Transportation may waive this 
        paragraph in whole or in part.
          ``(2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on active 
        duty under paragraph (1), or if the Secretary of Transportation 
        determines that reimbursement of the cost of education provided 
        would better serve the interests of the United States, the 
        Secretary of Transportation may recover from the individual the 
        amount of student incentive payments, plus interest and 
        attorney fees. The Secretary may reduce the amount to be 
        recovered to reflect partial performance of service obligations 
        and other factors the Secretary determines merit a reduction.
  ``(f) Failure To Carry Out Other Requirements.--
          ``(1) Active duty.--If the Secretary of Transportation 
        determines that an individual has failed to fulfill any part of 
        the agreement described in subsection (d)(2)-(6), the 
        individual may be ordered to serve on active duty for a period 
        of at least 2 years but not more than the unexpired period (as 
        determined by the Secretary) of the service required by 
        subsection (d)(5). The Secretary of Transportation, in 
        consultation with the Secretary of Defense, shall determine in 
        which service the individual shall serve. In cases of hardship 
        as determined by the Secretary of Transportation, the Secretary 
        of Transportation may waive this paragraph in whole or in part.
          ``(2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on active 
        duty under paragraph (1), or if the Secretary of Transportation 
        determines that reimbursement of the cost of education provided 
        would better serve the interests of the United States, the 
        Secretary of Transportation may recover from the individual the 
        amount of student incentive payments, plus interest and 
        attorney fees. The Secretary may reduce the amount to be 
        recovered to reflect partial performance of service obligations 
        and other factors the Secretary determines merit a reduction.
  ``(g) Actions To Recover Cost.--To aid in the recovery of the cost of 
education provided by the Government under a commitment agreement under 
this section, the Secretary of Transportation may--
          ``(1) request the Attorney General to bring a civil action 
        against the individual; and
          ``(2) make use of the Federal debt collection procedures in 
        chapter 176 of title 28 or other applicable administrative 
        remedies.
``Sec. 51510. Deferment of service obligation under student incentive 
                    payment agreements
  ``The Secretary of Transportation may defer the service commitment of 
an individual under section 51509(d)(5) of this title (as specified in 
the agreement under section 51509) for not more than 2 years if the 
individual is engaged in a graduate course of study approved by the 
Secretary. However, deferment of service as a commissioned officer on 
active duty must be approved by the Secretary of the affected military 
department (or the Secretary of Commerce, for service with the National 
Oceanic and Atmospheric Administration).
``Sec. 51511. Midshipman status in the Naval Reserve
  ``A citizen of the United States attending a State maritime academy 
may be appointed by the Secretary of the Navy as a midshipman in the 
Naval Reserve (including the Merchant Marine Reserve, Naval Reserve).

       ``CHAPTER 517--OTHER SUPPORT FOR MERCHANT MARINE TRAINING

``Sec.
``51701.  United States Maritime Service.
``51702.  Civilian nautical schools.
``51703.  Additional training.
``51704.  Training for maritime oil pollution prevention, response, and 
          clean-up.
``Sec. 51701. United States Maritime Service
  ``(a) General Authority.--The Secretary of Transportation may 
establish and maintain a voluntary organization, to be known as the 
United States Maritime Service, for the training of citizens of the 
United States to serve on merchant vessels of the United States.
  ``(b) Specific Authority.--The Secretary may--
          ``(1) determine the number of individuals to be enrolled for 
        training and reserve purposes in the Service;
          ``(2) fix the rates of pay and allowances of the individuals 
        without regard to chapter 51 or subchapter III of chapter 53 of 
        title 5;
          ``(3) prescribe the course of study and the periods of 
        training for the Service; and
          ``(4) prescribe the uniform of the Service and the rules on 
        providing and wearing the uniform.
  ``(c) Ranks, Grades, and Ratings.--The ranks, grades, and ratings for 
personnel of the Service shall be the same as those prescribed for 
personnel of the Coast Guard.
  ``(d) Medals and Awards.--The Secretary may establish and maintain a 
medals and awards program to recognize distinguished service, superior 
achievement, professional performance, and other commendable 
achievement by personnel of the Service.
``Sec. 51702. Civilian nautical schools
  ``(a) Definition.--In this section, the term `civilian nautical 
school' means a school operated in the United States (except the United 
States Merchant Marine Academy, a State maritime academy, or another 
school operated by the United States Government) that offers 
instruction to individuals quartered on a vessel primarily to train 
them for service in the merchant marine.
  ``(b) Inspection.--Each civilian nautical school is subject to 
inspection by the Secretary of Transportation.
  ``(c) Rating and Certification.--The Secretary may, under regulations 
the Secretary may prescribe, provide for the rating and certification 
of civilian nautical schools as to the adequacy of their course of 
instruction, the competence of their instructors, and the suitability 
of the equipment used in their course of instruction.
``Sec. 51703. Additional training
  ``(a) General Authority.--The Secretary of Transportation may provide 
additional training on maritime subjects to supplement other training 
opportunities and make the training available to the personnel of the 
merchant marine of the United States and individuals preparing for a 
career in the merchant marine of the United States.
  ``(b) Equipment, Supplies, and Contracts.--The Secretary may--
          ``(1) prepare or buy equipment or supplies required for the 
        additional training; and
          ``(2) without regard to section 3709 of the Revised Statutes 
        (41 U.S.C. 5), make contracts for services the Secretary 
        considers necessary to prepare the equipment and supplies and 
        to supervise and administer the additional training.
``Sec. 51704. Training for maritime oil pollution prevention, response, 
                    and clean-up
  ``(a) Assistance in Establishing Program.--The Secretary of 
Transportation shall assist maritime training institutions approved by 
the Secretary in establishing a training program for maritime oil 
pollution prevention, response, and clean-up.
  ``(b) Providing Training Vessels.--Subject to subsection (c), the 
Secretary may provide, with title free of all liens, to maritime 
training institutions that have a program established under subsection 
(a), offshore supply vessels and tug/supply vessels that were built in 
the United States and are in the possession of the Maritime 
Administration because of a default on a loan guaranteed under chapter 
537 of this title.
  ``(c) Requirements.--In addition to any other requirements the 
Secretary considers appropriate, the following requirements apply to 
vessels provided under this section:
          ``(1) The vessel shall be offered to the institution at a 
        location selected by the Secretary.
          ``(2) The institution shall use the vessel to train students 
        and appropriate maritime industry personnel in oil spill 
        prevention, response, clean-up, and related skills.
          ``(3) The institution shall make the vessel and qualified 
        students available to appropriate Federal, State, and local oil 
        spill response authorities when there is a maritime oil spill.
          ``(4) The institution may not sell, trade, charter, donate, 
        scrap, or in any way alter or dispose of the vessel without 
        prior approval of the Secretary.
          ``(5) The institution may not use the vessel in competition 
        with a privately-owned vessel documented under chapter 121 of 
        this title or titled under the law of a State, unless necessary 
        to carry out this section.
          ``(6) When the institution can no longer use the vessel for 
        its training program, the institution shall return the vessel 
        to the Secretary. The Secretary shall take possession at the 
        institution and thereafter may provide the vessel to another 
        institution under this section or dispose of the vessel.

                 ``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.
``Sec. 51901. Awards for individual acts or service
  ``(a) General Authority.--The Secretary of Transportation may award 
decorations and medals of appropriate design (including ribbons, ribbon 
bars, emblems, rosettes, miniature facsimiles, plaques, citations, or 
other suitable devices or insignia) for individual acts or service in 
the merchant marine of the United States. The design may be similar to 
the design of a decoration or medal authorized for members of the armed 
forces for similar acts or service.
  ``(b) Specific Authority.--The Secretary may award--
          ``(1) a Merchant Marine Distinguished Service Medal to an 
        individual for outstanding acts, conduct, or valor beyond the 
        line of duty;
          ``(2) a Merchant Marine Meritorious Service Medal to an 
        individual for meritorious acts, conduct, or valor in the line 
        of duty, but not of the outstanding character that would 
        warrant the award of the Merchant Marine Distinguished Service 
        Medal;
          ``(3) a decoration or medal to an individual for service 
        during a war, national emergency proclaimed by the President or 
        Congress, or operations by the armed forces outside the 
        continental United States under conditions of danger to life 
        and property; and
          ``(4) a decoration or medal to an individual for other acts 
        or service of conspicuous gallantry, intrepidity, and 
        extraordinary heroism under conditions of danger to life and 
        property that would warrant a similar decoration or medal for a 
        member of the armed forces.
``Sec. 51902. Gallant Ship Award
  ``(a) Awards to Vessels.--The Secretary of Transportation may award a 
Gallant Ship Award and a citation to a vessel (including a foreign 
vessel) participating in outstanding or gallant action in a marine 
disaster or other emergency to save life or property at sea. The 
Secretary may award a plaque to the vessel, and a replica of the plaque 
may be preserved as a permanent historical record.
  ``(b) Awards to Crews.--The Secretary of Transportation may award an 
appropriate citation ribbon bar to the master and each individual 
serving, at the time of the action, on a vessel issued an award under 
subsection (a).
  ``(c) Consultation.--The Secretary of Transportation shall consult 
with the Secretary of State before awarding an award or citation to a 
foreign vessel or its crew under this section.
``Sec. 51903. Multiple awards
  ``An individual may not be awarded more than one of any type of 
decoration or medal under this chapter. For each succeeding act or 
service justifying the same decoration or medal, a suitable device may 
be awarded to be worn with the decoration or medal.
``Sec. 51904. Presentation to representatives
  ``If an individual to be issued an award under this chapter is unable 
to accept the award personally, the Secretary of Transportation may 
present the award to an appropriate representative.
``Sec. 51905. Flags and grave markers
  ``Except as authorized under another law, the Secretary of 
Transportation may issue, at no cost, a flag of the United States and a 
grave marker to the family or personal representative of a deceased 
individual who served in the merchant marine of the United States in 
support of the armed forces of the United States or its allies during a 
war or national emergency.
``Sec. 51906. Special certificates for civilian service to armed forces
  ``(a) General Authority.--The Maritime Administrator may issue a 
special certificate to an individual, or the personal representative of 
an individual, in recognition of service of that individual in the 
merchant marine of the United States, if the service has been 
determined to be active duty under section 401 of the GI Bill 
Improvement Act of 1977 (Public Law 95-202; 38 U.S.C. 106 note).
  ``(b) Relationship to Other Laws.--Issuance of a certificate under 
subsection (a) does not entitle an individual to any rights, 
privileges, or benefits under a law of the United States.
``Sec. 51907. Manufacture and sale of awards and replacements
  ``The Secretary of Transportation may--
          ``(1) authorize private persons to manufacture decorations 
        and medals authorized under this chapter or a prior law; and
          ``(2) provide at cost, or authorize private persons to sell 
        at reasonable prices, replacements for those decorations and 
        medals.
``Sec. 51908. Prohibition against unauthorized manufacture, sale, 
                    possession, or display of awards
  ``(a) Prohibition.--Except as authorized under this chapter, a person 
may not manufacture, sell, possess, or display a decoration or medal 
provided for in this chapter.
  ``(b) Civil Penalty.--A person violating this section is liable to 
the United States Government for a civil penalty of not more than 
$2,000.

                      ``CHAPTER 521--MISCELLANEOUS

``Sec.
``52101.  Reemployment rights for certain merchant seamen.
``Sec. 52101. Reemployment rights for certain merchant seamen
  ``(a) In General.--An individual who is certified by the Secretary of 
Transportation under subsection (c) shall be entitled to reemployment 
rights and other benefits substantially equivalent to the rights and 
benefits provided for by chapter 43 of title 38 for any member of a 
reserve component of the armed forces of the United States who is 
ordered to active duty.
  ``(b) Time for Application.--An individual may submit an application 
for certification under subsection (c) to the Secretary not later than 
45 days after the date the individual completes a period of employment 
described in subsection (c)(1)(A) with respect to which the application 
is submitted.
  ``(c) Certification Determination.--Not later than 20 days after the 
date the Secretary receives from an individual an application for 
certification under this subsection, the Secretary shall--
          ``(1) determine whether the individual--
                  ``(A) was employed in the activation or operation of 
                a vessel--
                          ``(i) in the National Defense Reserve Fleet 
                        maintained under section 11 of the Merchant 
                        Ship Sales Act of 1946 (50 App. U.S.C. 1744) in 
                        a period in which the vessel was in use or 
                        being activated for use under subsection (b) of 
                        that section;
                          ``(ii) requisitioned or purchased under 
                        chapter 563 of this title; or
                          ``(iii) owned, chartered, or controlled by 
                        the United States Government and used by the 
                        Government for a war, armed conflict, national 
                        emergency, or maritime mobilization need 
                        (including for training purposes or testing for 
                        readiness and suitability for mission 
                        performance); and
                  ``(B) during the period of that employment, possessed 
                a valid license, certificate of registry, or merchant 
                mariner's document issued under chapter 71 or 73 of 
                this title; and
          ``(2) if the Secretary makes affirmative determinations under 
        paragraph (1)(A) and (B), certify that individual under this 
        subsection.
  ``(d) Equivalence to Military Selective Service Act Certificate.--For 
purposes of reemployment rights and benefits provided by this section, 
a certification under subsection (c) shall be considered to be the 
equivalent of a certificate described in section 9(a) of the Military 
Selective Service Act (50 App. U.S.C. 459(a)).

               ``Part C--Financial Assistance Programs''.

  (d) Chapters Following Chapter 531.--Subtitle V of title 46, United 
States Code, is amended by adding at the end the following:

               ``CHAPTER 533--CONSTRUCTION RESERVE FUNDS

``Sec.
``53301.  Definitions.
``53302.  Authority for construction reserve funds.
``53303.  Persons eligible to establish funds.
``53304.  Vessel ownership.
``53305.  Eligible fund deposits.
``53306.  Recognition of gain for tax purposes.
``53307.  Basis for determining gain or loss and for depreciating new 
          vessels.
``53308.  Order and proportions of deposits and withdrawals.
``53309.  Accumulation of deposits.
``53310.  Obligation of deposits and period for construction of certain 
          vessels.
``53311.  Taxation of deposits on failure of conditions.
``53312.  Assessment and collection of deficiency tax.
``Sec. 53301. Definitions
  ``(a) In General.--In this chapter:
          ``(1) Construction contract.--The term `construction 
        contract' includes, for a taxpayer constructing a new vessel in 
        a shipyard owned by that taxpayer, an agreement between the 
        taxpayer and the Secretary of Transportation for that 
        construction containing provisions the Secretary considers 
        advisable to carry out this chapter.
          ``(2) New vessel.--The term `new vessel' means--
                  ``(A) a vessel--
                          ``(i) constructed in the United States after 
                        December 31, 1939, constructed with a 
                        construction-differential subsidy under title V 
                        of the Merchant Marine Act, 1936, or 
                        constructed with financing or a financing 
                        guarantee under chapter 537 or 575 of this 
                        title;
                          ``(ii) documented or agreed with the 
                        Secretary to be documented under the laws of 
                        the United States; and
                          ``(iii)(I) of a type, size, and speed that 
                        the Secretary determines is suitable for use on 
                        the high seas or Great Lakes in carrying out 
                        this subtitle, but not less than 2,000 gross 
                        tons or less than 12 knots speed unless the 
                        Secretary certifies in each case that a vessel 
                        of lesser tonnage or speed is desirable for use 
                        by the United States Government in case of war 
                        or national emergency; or
                          ``(II) constructed to replace a vessel bought 
                        or requisitioned by the Government; and
                  ``(B) a vessel reconstructed or reconditioned for use 
                only on the Great Lakes, including the Saint Lawrence 
                River and Gulf, if the Secretary finds that the 
                reconstruction or reconditioning will promote the 
                objectives of this subtitle.
  ``(b) Additional Tax-Related Terms.--Other terms used in this chapter 
have the same meaning as in chapter 1 of the Internal Revenue Code of 
1986 (26 U.S.C. ch. 1).
``Sec. 53302. Authority for construction reserve funds
  ``(a) General Authority.--An eligible person under section 53303 of 
this title may establish a construction reserve fund for the 
construction,reconstruction, reconditioning, or acquisition of a new 
vessel or for other purposes authorized by this chapter.
  ``(b) Application of Certain Laws and Regulations.--The fund shall be 
established, maintained, expended, and used as provided by this chapter 
and regulations prescribed jointly by the Secretary of Transportation 
and the Secretary of the Treasury.
``Sec. 53303. Persons eligible to establish funds
  ``A construction reserve fund may be established by a citizen of the 
United States that--
          ``(1) is operating a vessel in the foreign or domestic 
        commerce of the United States or in the fisheries;
          ``(2) owns, in whole or in part, a vessel being operated in 
        the foreign or domestic commerce of the United States or in the 
        fisheries;
          ``(3) was operating a vessel in the foreign or domestic 
        commerce of the United States or in the fisheries when it was 
        bought or requisitioned by the United States Government;
          ``(4) owned, in whole or in part, a vessel being operated in 
        the foreign or domestic commerce of the United States or in the 
        fisheries when it was bought or requisitioned by the 
        Government; or
          ``(5) had acquired or was having constructed a vessel to 
        operate in the foreign or domestic commerce of the United 
        States or in the fisheries when it was bought or requisitioned 
        by the Government.
``Sec. 53304. Vessel ownership
  ``In this chapter, a vessel is deemed to be constructed or acquired 
by a taxpayer if constructed or acquired by a corporation when the 
taxpayer owns at least 95 percent of each class of stock of the 
corporation.
``Sec. 53305. Eligible fund deposits
  ``A construction reserve fund may include deposits of--
          ``(1) the proceeds from the sale of a vessel;
          ``(2) indemnities for the loss of a vessel;
          ``(3) earnings from the operation of a documented vessel and 
        from services incident to the operation; and
          ``(4) interest or other amounts accrued on deposits in the 
        fund.
``Sec. 53306. Recognition of gain for tax purposes
  ``(a) Definitions.--In this section, the terms `net proceeds' and 
`net indemnity' mean the sum of--
          ``(1) the adjusted basis of the vessel; and
          ``(2) the amount of gain the taxpayer would recognize without 
        regard to this section.
  ``(b) Recognition of Gain.--In computing net income under the income 
or excess profits tax laws of the United States, a taxpayer does not 
recognize a gain on the sale or the actual or constructive total loss 
of a vessel if the taxpayer--
          ``(1) deposits an amount equal to the net proceeds of the 
        sale or the net indemnity for the loss in a construction 
        reserve fund within 60 days after receiving the payment of 
        proceeds or indemnity; and
          ``(2) elects under this section not to recognize the gain.
  ``(c) When Election Must Be Made.--
          ``(1) In general.--Except as provided in paragraph (2), the 
        taxpayer must make the election referred to in subsection (b) 
        in the taxpayer's income tax return for the taxable year in 
        which the gain was realized.
          ``(2) Receipt after taxable year.--If the vessel is bought or 
        requisitioned by the United States Government, or is lost, and 
        the taxpayer receives payment for the vessel or indemnity for 
        the loss from the Government after the end of the taxable year 
        in which it was bought, requisitioned, or lost, the taxpayer 
        must make the election referred to in subsection (b) within 60 
        days after receiving the payment or indemnity, on a form 
        prescribed by the Secretary of the Treasury.
  ``(d) Effect of Statute of Limitation.--If the taxpayer makes an 
election under subsection (c)(2), and computation or recomputation 
under this section is otherwise allowable but is prevented by a statute 
of limitation on the date the election is made or within 6 months 
thereafter, the computation or recomputation nevertheless shall be made 
notwithstanding the statute if the taxpayer files a claim for the 
computation or recomputation within 6 months after the date of making 
the election.
``Sec. 53307. Basis for determining gain or loss and for depreciating 
                    new vessels
  ``Under the income or excess profits tax laws of the United States, 
the basis for determining a gain or loss and for depreciation of a new 
vessel constructed, reconstructed, reconditioned, or acquired by the 
taxpayer, or for which purchase-money indebtedness is liquidated as 
provided in section 53310 of this title, with amounts from a 
construction reserve fund, shall be reduced by that part of the 
deposits in the fund expended in the construction, reconstruction, 
reconditioning, acquisition, or liquidation of purchase-money 
indebtedness of the new vessel that represents a gain not recognized 
for tax purposes under section 53306 of this title.
``Sec. 53308. Order and proportions of deposits and withdrawals
  ``In this chapter--
          ``(1) if the net proceeds of a sale or the net indemnity for 
        a loss is deposited in more than one deposit, the amount 
        consisting of the gain shall be deemed to be deposited first;
          ``(2) amounts expended, obligated, or otherwise withdrawn 
        shall be applied against the amounts deposited in the fund in 
        the order of deposit; and
          ``(3) if a deposit consists in part of a gain not recognized 
        under section 53306 of this title, any expenditure, obligation, 
        or withdrawal applied against that deposit shall be deemed to 
        be a gain in the proportion that the part of the deposit 
        consisting of a gain bears to the total amount of the deposit.
``Sec. 53309. Accumulation of deposits
  ``For any taxable year, amounts on deposit in a construction reserve 
fund on the last day of the taxable year, for which the requirements of 
section 53310 of this title have been satisfied (to the extent they 
apply on the last day of the taxable year), are deemed to have been 
retained for the reasonable needs of the business within the meaning of 
section 537(a) of the Internal Revenue Code of 1986 (26 U.S.C. 537(a)).
``Sec. 53310. Obligation of deposits and period for construction of 
                    certain vessels
  ``(a) Application of Sections 53306 and 53309.--Sections 53306 and 
53309 of this title apply to a deposit in a construction reserve fund 
only if, within 3 years after the date of the deposit (and any 
extension under subsection (c))--
          ``(1)(A) a contract is made for the construction or 
        acquisition of a new vessel or, with the approval of the 
        Secretary of Transportation, for a part interest in a new 
        vessel or for the reconstruction or reconditioning of a new 
        vessel;
          ``(B) the deposit is expended or obligated for expenditure 
        under that contract;
          ``(C) at least 12.5 percent of the construction or contract 
        price of the vessel is paid or irrevocably committed for 
        payment; and
          ``(D) the plans and specifications for the vessel are 
        approved by the Secretary to the extent the Secretary considers 
        necessary; or
          ``(2) the deposit is expended or obligated for expenditure 
        for the liquidation of existing or subsequently incurred 
        purchase-money indebtedness to a person not a parent company 
        of, or a company affiliated or associated with, the mortgagor 
        on a new vessel.
  ``(b) Additional Requirements for Certain Vessels.--In addition to 
the requirements of subsection (a)(1), for a vessel not constructed 
undera construction-differential subsidy contract or not bought from 
the Secretary of Transportation--
          ``(1) at least 5 percent of the construction (or, if the 
        contract covers more than one vessel, at least 5 percent of the 
        construction of the first vessel) must be completed within 6 
        months after the date of the construction contract (or within 
        the period of an extension under subsection (c)), as estimated 
        by the Secretary and certified by the Secretary to the 
        Secretary of the Treasury; and
          ``(2) construction under the contract must be completed with 
        reasonable dispatch thereafter.
  ``(c) Extensions.--The Secretary of Transportation may grant 
extensions of the period within which the deposits must be expended or 
obligated or within which the construction must have progressed to the 
extent of 5 percent completion under this section. However, the 
extensions may not be for a total of more than 2 years for the 
expenditure or obligation of deposits or one year for the progress of 
construction.
``Sec. 53311. Taxation of deposits on failure of conditions
  ``A deposited gain, if otherwise taxable income under the law 
applicable to the taxable year in which the gain was realized, shall be 
included in gross income for that taxable year, except for purposes of 
the declared value excess profits tax and the capital stock tax, if--
          ``(1) the deposited gain is not expended or obligated within 
        the appropriate period under section 53310 of this title;
          ``(2) the deposited gain is withdrawn before the end of that 
        period;
          ``(3) the construction related to that deposited gain has not 
        progressed to the extent of 5 percent of completion within the 
        appropriate period under section 53310 of this title; or
          ``(4) the Secretary of Transportation finds and certifies to 
        the Secretary of the Treasury that, for causes within the 
        control of the taxpayer, the entire construction related to 
        that deposited gain is not completed with reasonable dispatch.
``Sec. 53312. Assessment and collection of deficiency tax
  ``A deficiency in tax for a taxable year resulting from the inclusion 
of an amount in gross income as provided by section 53311 of this 
title, and the amount to be treated as a deficiency under section 53311 
instead of as an adjustment for the declared value excess profits tax, 
may be assessed or a civil action may be brought to collect the 
deficiency without assessment, at any time. Interest on a deficiency or 
amount to be treated as a deficiency does not begin until the date the 
deposited gain or part of the deposited gain in question is required to 
be included in gross income under section 51111.

               ``CHAPTER 535--CAPITAL CONSTRUCTION FUNDS

``Sec.
``53501.  Definitions.
``53502.  Regulations.
``53503.  Establishing a capital construction fund.
``53504.  Deposits and withdrawals.
``53505.  Ceiling on deposits.
``53506.  Investment and fiduciary requirements.
``53507.  Nontaxation of deposits.
``53508.  Separate accounts within a fund.
``53509.  Qualified withdrawals.
``53510.  Tax treatment of qualified withdrawals and basis of property.
``53511.  Tax treatment of nonqualified withdrawals.
``53512.  FIFO and LIFO withdrawals.
``53513.  Corporate reorganizations and partnership changes.
``53514.  Relationship of old fund to new fund.
``53515.  Records and reports.
``53516.  Termination of agreement after change in regulations.
``53517.  Reports.
``Sec. 53501. Definitions
  ``In this chapter:
          ``(1) Agreement vessel.--The term `agreement vessel' means--
                  ``(A) an eligible vessel or a qualified vessel that 
                is subject to an agreement under this chapter; and
                  ``(B) a barge or container that is part of the 
                complement of a vessel described in subclause (A) if 
                provided for in the agreement.
          ``(2) Eligible vessel.--The term `eligible vessel' means--
                  ``(A) a vessel--
                          ``(i) constructed in the United States (and, 
                        if reconstructed, reconstructed in the United 
                        States), constructed outside the United States 
                        but documented under the laws of the United 
                        States on April 15, 1970, or constructed 
                        outside the United States for use in the United 
                        States foreign trade pursuant to a contract 
                        made before April 15, 1970;
                          ``(ii) documented under the laws of the 
                        United States; and
                          ``(iii) operated in the foreign or domestic 
                        trade of the United States or in the fisheries 
                        of the United States; and
                  ``(B) a commercial fishing vessel--
                          ``(i) constructed in the United States and, 
                        if reconstructed, reconstructed in the United 
                        States;
                          ``(ii) of at least 2 net tons but less than 5 
                        net tons;
                          ``(iii) owned by a citizen of the United 
                        States;
                          ``(iv) having its home port in the United 
                        States; and
                          ``(v) operated in the commercial fisheries of 
                        the United States.
          ``(3) Joint regulations.--The term `joint regulations' means 
        regulations prescribed jointly by the Secretary and the 
        Secretary of the Treasury under section 53502(b) of this title.
          ``(4) Noncontiguous trade.--The term `noncontiguous trade' 
        means--
                  ``(A) trade between--
                          ``(i) one of the contiguous 48 States; and
                          ``(ii) Alaska, Hawaii, Puerto Rico, or an 
                        insular territory or possession of the United 
                        States; and
                  ``(B) trade between--
                          ``(i) a place in Alaska, Hawaii, Puerto Rico, 
                        or an insular territory or possession of the 
                        United States; and
                          ``(ii) another place in Alaska, Hawaii, 
                        Puerto Rico, or an insular territory or 
                        possession of the United States.
          ``(5) Qualified vessel.--The term `qualified vessel' means--
                  ``(A) a vessel--
                          ``(i) constructed in the United States (and, 
                        if reconstructed, reconstructed in the United 
                        States), constructed outside the United States 
                        but documented under the laws of the United 
                        States on April 15, 1970, or constructed 
                        outside the United States for use in the United 
                        States foreign trade pursuant to a contract 
                        made before April 15, 1970;
                          ``(ii) documented under the laws of the 
                        United States; and
                          ``(iii) agreed, between the Secretary and the 
                        person maintaining the capital construction 
                        fund established under section 53503 of this 
                        title, to be operated in the United States 
                        foreign, Great Lakes, or noncontiguous domestic 
                        trade or in the fisheries of the United States; 
                        and
                  ``(B) a commercial fishing vessel--
                          ``(i) constructed in the United States and, 
                        if reconstructed, reconstructed in the United 
                        States;
                          ``(ii) of at least 2 net tons but less than 5 
                        net tons;
                          ``(iii) owned by a citizen of the United 
                        States;
                          ``(iv) having its home port in the United 
                        States; and
                          ``(v) operated in the commercial fisheries of 
                        the United States.
          ``(6) Secretary.--The term `Secretary' means--
                  ``(A) the Secretary of Commerce with respect to an 
                eligible vessel or a qualified vessel operated or to be 
                operated in the fisheries of the United States; and
                  ``(B) the Secretary of Transportation with respect to 
                other vessels.
          ``(7) United states foreign trade.--The term `United States 
        foreign trade' includes those areas in domestic trade in which 
        a vessel built with a construction-differential subsidy is 
        allowed to operate under the first sentence of section 506 of 
        the Merchant Marine Act, 1936.
          ``(8) Vessel.--The term `vessel' includes--
                  ``(A) cargo handling equipment that the Secretary 
                determines is intended for use primarily on the vessel; 
                and
                  ``(B) an ocean-going towing vessel, an ocean-going 
                barge, or a comparable towing vessel or barge operated 
                on the Great Lakes.
``Sec. 53502. Regulations
  ``(a) In General.--Except as provided in subsection (b), the 
Secretary shall prescribe regulations to carry out this chapter.
  ``(b) Tax Liability.--The Secretary and the Secretary of the Treasury 
shall prescribe joint regulations for the determination of tax 
liability under this chapter.
``Sec. 53503. Establishing a capital construction fund
  ``(a) In General.--A citizen of the United States owning or leasing 
an eligible vessel may make an agreement with the Secretary under this 
chapter to establish a capital construction fund for the vessel.
  ``(b) Allowable Purpose.--The purpose of the agreement shall be to 
provide replacement vessels, additional vessels, or reconstructed 
vessels, built in the United States and documented under the laws of 
the United States, for operation in the United States foreign, Great 
Lakes, or noncontiguous domestic trade or in the fisheries of the 
United States.
``Sec. 53504. Deposits and withdrawals
  ``(a) Required Deposits.--An agreement to establish a capital 
construction fund shall provide for the deposit in the fund of the 
amounts agreed to be appropriate to provide for qualified withdrawals 
under section 53509 of this title.
  ``(b) Applicable Requirements.--Deposits in and withdrawals from the 
fund are subject to the requirements included in the agreement or 
prescribed by the Secretary by regulation. However, the Secretary may 
not require a person to deposit in the fund for a taxable year more 
than 50 percent of that portion of the person's taxable income for that 
year (as determined under section 53505(a)(1) of this title) that is 
attributable to the operation of an agreement vessel.
``Sec. 53505. Ceiling on deposits
  ``(a) Maximum Deposits.--The amount deposited in a capital 
construction fund for a taxable year may not exceed the sum of--
          ``(1) that portion of the taxable income of the owner or 
        lessee for the taxable year (computed under chapter 1 of the 
        Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without 
        regard to the carryback of net operating loss or net capital 
        loss or this chapter) that is attributable to the operation of 
        agreement vessels in the foreign or domestic trade of the 
        United States or in the fisheries of the United States;
          ``(2) the amount allowable as a deduction under section 167 
        of such Code (26 U.S.C. 167) for the taxable year for agreement 
        vessels;
          ``(3) if the transaction is not taken into account for 
        purposes of clause (1), the net proceeds (as defined in joint 
        regulations) from the disposition of an agreement vessel or 
        from insurance or indemnity attributable to an agreement 
        vessel; and
          ``(4) the receipts from the investment or reinvestment of 
        amounts held in the fund.
  ``(b) Reductions for Lessees.--For a lessee, the maximum amount that 
may be deposited for an agreement vessel under subsection (a)(2) for 
any period shall be reduced by any amount the owner is required or 
permitted, under the capital construction fund agreement, to deposit 
for that period for the vessel under subsection (a)(2).
``Sec. 53506. Investment and fiduciary requirements
  ``(a) In General.--Amounts in a capital construction fund shall be 
kept in the depository specified in the agreement and shall be subject 
to trustee and other fiduciary requirements prescribed by the 
Secretary. Except as provided in subsection (b), amounts in the fund 
may be invested only in interest-bearing securities approved by the 
Secretary.
  ``(b) Stock Investments.--
          ``(1) In general.--With the approval of the Secretary, an 
        agreed percentage (but not more than 60 percent) of the assets 
        of the fund may be invested in the stock of domestic 
        corporations that--
                  ``(A) is fully listed and registered on an exchange 
                registered with the Securities and Exchange Commission 
                as a national securities exchange; and
                  ``(B) would be acquired by a prudent investor seeking 
                a reasonable income and the preservation of capital.
          ``(2) Preferred stock.--The preferred stock of a corporation 
        is deemed to satisfy the requirements of this subsection, even 
        though it may not be registered and listed because it is 
        nonvoting stock, if the common stock of the corporation 
        satisfies the requirements and the preferred stock otherwise 
        would satisfy the requirements.
  ``(c) Maintaining Agreed Percentage.--If at any time the fair market 
value of the stock in the fund is more than the agreed percentage of 
the assets in the fund, any subsequent investment of amounts deposited 
in the fund, and any subsequent withdrawal from the fund, shall be made 
in a way that tends to restore the fair market value of the stock to 
not more than the agreed percentage.
``Sec. 53507. Nontaxation of deposits
  ``(a) Tax Treatment.--Subject to subsection (b), under the Internal 
Revenue Code of 1986 (26 U.S.C. 1 et seq.)--
          ``(1) taxable income (determined without regard to this 
        chapter and section 7518 of such Code (26 U.S.C. 7518)) for the 
        taxable year shall be reduced by the amount deposited for the 
        taxable year out of amounts referred to in section 53505(a)(1) 
        of this title;
          ``(2) a gain from a transaction referred to in section 
        53505(a)(3) of this title shall not be taken into account if an 
        amount equal to the net proceeds (as defined in joint 
        regulations) from the transaction is deposited in the fund;
          ``(3) the earnings (including gains and losses) from the 
        investment and reinvestment of amounts held in the fund shall 
        not be taken into account;
          ``(4) the earnings and profits of a corporation (within the 
        meaning of section 316 of such Code (26 U.S.C. 316)) shall be 
        determined without regard to this chapter and section 7518 of 
        such Code (26 U.S.C. 7518); and
          ``(5) in applying the tax imposed by section 531 of such Code 
        (26 U.S.C. 531), amounts held in the fund shall not be taken 
        into account.
  ``(b) Condition.--This section applies to an amount only if the 
amount is deposited in the fund under the agreement within the time 
provided in joint regulations.
``Sec. 53508. Separate accounts within a fund
  ``(a) In General.--A capital construction fund shall have three 
accounts:
          ``(1) The capital account.
          ``(2) The capital gain account.
          ``(3) The ordinary income account.
  ``(b) Capital Account.--The capital account shall consist of--
          ``(1) amounts referred to in section 53505(a)(2) of this 
        title;
          ``(2) amounts referred to in section 53505(a)(3) of this 
        title, except that portion representing a gain not taken into 
        account because of section 53507(a)(2) of this title;
          ``(3) the percentage applicable under section 243(a)(1) of 
        the Internal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of any 
        dividend received by the fund for which the person maintaining 
        the fund would be allowed (were it not for section 53507(a)(3) 
        of this title) a deduction under section 243 of such Code (26 
        U.S.C. 243); and
          ``(4) interest income exempt from taxation under section 103 
        of such Code (26 U.S.C. 103).
  ``(c) Capital Gain Account.--The capital gain account shall consist 
of--
          ``(1) amounts representing capital gains on assets held for 
        more than 6 months and referred to in section 53505(a)(3) or 
        (4) of this title; minus
          ``(2) amounts representing capital losses on assets held in 
        the fund for more than 6 months.
  ``(d) Ordinary Income Account.--The ordinary income account shall 
consist of--
          ``(1) amounts referred to in section 53505(a)(1) of this 
        title;
          ``(2)(A) amounts representing capital gains on assets held 
        for not more than 6 months and referred to in section 
        53505(a)(3) or (4) of this title; minus
          ``(B) amounts representing capital losses on assets held in 
        the fund for not more than 6 months;
          ``(3) interest (except tax-exempt interest referred to in 
        subsection (b)(4)) and other ordinary income (except any 
        dividend referred to in clause (5)) received on assets held in 
        the fund;
          ``(4) ordinary income from a transaction described in section 
        53505(a)(3) of this title; and
          ``(5) that portion of any dividend referred to in subsection 
        (b)(3) not taken into account under subsection (b)(3).
  ``(e) When Losses Allowed.--Except on termination of a fund, capital 
losses referred to in subsection (c) or (d)(2) shall be allowed only as 
an offset to gains referred to in subsection (c) or (d)(2), 
respectively.
``Sec. 53509. Qualified withdrawals
  ``(a) In General.--Subject to subsection (b), a withdrawal from a 
capital construction fund is a qualified withdrawal if it is made under 
the terms of the agreement and is for--
          ``(1) the acquisition, construction, or reconstruction of a 
        qualified vessel or a barge or container that is part of the 
        complement of a qualified vessel; or
          ``(2) the payment of the principal on indebtedness incurred 
        in the acquisition, construction, or reconstruction of a 
        qualified vessel or a barge or container that is part of the 
        complement of a qualified vessel.
  ``(b) Barges and Containers.--Except as provided in regulations 
prescribed by the Secretary, subsection (a) applies to a barge or 
container only if it is constructed in the United States.
  ``(c) Treatment as Nonqualified Withdrawal.--Under joint regulations, 
if the Secretary determines that a substantial obligation under an 
agreement is not being fulfilled, the Secretary, after notice and 
opportunity for a hearing to the person maintaining the fund, may treat 
any amount in the fund as an amount withdrawn from the fund in a 
nonqualified withdrawal.
``Sec. 53510. Tax treatment of qualified withdrawals and basis of 
                    property
  ``(a) Order of Withdrawals.--A qualified withdrawal from a capital 
construction fund shall be treated as made--
          ``(1) first from the capital account;
          ``(2) second from the capital gain account; and
          ``(3) third from the ordinary income account.
  ``(b) Ordinary Income Account Withdrawals.--If a portion of a 
qualified withdrawal for a vessel, barge, or container is made from the 
ordinary income account, the basis of the vessel, barge, or container 
shall be reduced by an amount equal to that portion.
  ``(c) Capital Gain Account Withdrawals.--If a portion of a qualified 
withdrawal for a vessel, barge, or container is made from the capital 
gain account, the basis of the vessel, barge, or container shall be 
reduced by an amount equal to that portion.
  ``(d) Withdrawals To Pay Principal.--If a portion of a qualified 
withdrawal to pay the principal on indebtedness is made from the 
ordinary income account or the capital gain account, an amount equal to 
the total reduction that would be required by subsections (b) and (c) 
if the withdrawal were a qualified withdrawal for a purpose described 
in those subsections shall be applied, in the order provided in joint 
regulations, to reduce the basis of vessels, barges, and containers 
owned by the person maintaining the fund. The remaining amount of the 
withdrawal shall be treated as a nonqualified withdrawal.
  ``(e) Gain on Property With Reduced Basis.--If property, the basis of 
which was reduced under subsection (b), (c), or (d), is disposed of, 
any gain realized on the disposition, to the extent it does not exceed 
the total reduction in the basis of the property under those 
subsections, shall be treated as an amount referred to in section 
53511(c)(1) of this title withdrawn on the date of disposition of the 
property. Subject to conditions prescribed in joint regulations, this 
subsection does not apply to a disposition if there is a redeposit, in 
an amount determined under joint regulations, that restores the fund as 
far as practicable to the position it was in before the withdrawal.
``Sec. 53511. Tax treatment of nonqualified withdrawals
  ``(a) In General.--Except as provided in section 53513 of this title, 
a withdrawal from a fund that is not a qualified withdrawal shall be 
treated as a nonqualified withdrawal.
  ``(b) Order of Withdrawals.--A nonqualified withdrawal shall be 
treated as made--
          ``(1) first from the ordinary income account;
          ``(2) second from the capital gain account; and
          ``(3) third from the capital account.
  ``(c) Tax Treatment.--For purposes of the Internal Revenue Code of 
1986 (26 U.S.C. 1 et seq.)--
          ``(1) a nonqualified withdrawal from the ordinary income 
        account shall be included in income as an item of ordinary 
        income for the taxable year in which the withdrawal is made;
          ``(2) a nonqualified withdrawal from the capital gain account 
        shall be included in income for the taxable year in which the 
        withdrawal is made as an item of gain realized during that year 
        from the disposition of an asset held for more than 6 months; 
        and
          ``(3) for the period through the last date prescribed for 
        payment of tax for the taxable year in which the withdrawal is 
        made--
                  ``(A) no interest shall be payable under section 6601 
                of such Code (26 U.S.C. 6601) and no addition to the 
                tax shall be payable under section 6651 of such Code 
                (26 U.S.C. 6651);
                  ``(B) interest on the amount of the additional tax 
                attributable to an amount treated as a nonqualified 
                withdrawal from the ordinary income account or the 
                capital gain account shall be paid at the rate 
                determined under subsection (d) from the last date 
                prescribed for payment of the tax for the taxable year 
                for which the amount was deposited in the fund; and
                  ``(C) no interest shall be payable on amounts treated 
                as withdrawn on a last-in-first-out basis under section 
                53512 of this title.
  ``(d) Interest Rate.--The rate of interest under subsection (c)(3)(B) 
for a nonqualified withdrawal made in a taxable year beginning after 
1971shall be determined and published jointly by the Secretary and the 
Secretary of the Treasury. The rate shall be such that its relationship 
to 8 percent is comparable, as determined by the Secretaries under 
joint regulations, to the relationship between--
          ``(1) the money rates and investment yields for the calendar 
        year immediately before the beginning of the taxable year; and
          ``(2) the money rates and investment yields for the calendar 
        year 1970.
  ``(e) Nonqualified Withdrawals.--
          ``(1) In general.--The following applicable percentage of any 
        amount that remains in a capital construction fund at the close 
        of the following specified taxable year following the taxable 
        year for which the amount was deposited shall be treated as a 
        nonqualified withdrawal:

``If the amount remains in the fund at
                                                          The applicable
  the close of the--
                                                         percentage is--
    ``26th taxable year.......................................

                                                             20 percent 

    ``27th taxable year.......................................

                                                             40 percent 

    ``28th taxable year.......................................

                                                             60 percent 

    ``29th taxable year.......................................

                                                             80 percent 

    ``30th taxable year.......................................

                                                            100 percent.

          ``(2) Earnings.--The earnings of a capital construction fund 
        for any taxable year (except net gains) shall be treated under 
        this subsection as an amount deposited for the taxable year.
          ``(3) Contract for qualified withdrawal.--Under paragraph 
        (1), an amount shall not be treated as remaining in a capital 
        construction fund at the close of a taxable year to the extent 
        there is a binding contract at the close of the taxable year 
        for a qualified withdrawal of the amount for an identified item 
        for which the withdrawal may be made.
          ``(4) Excess earnings.--If the Secretary determines that the 
        balance in a capital construction fund exceeds the amount 
        appropriate to meet the vessel construction program objectives 
        of the person that established the fund, the amount of the 
        excess shall be treated as a nonqualified withdrawal under 
        paragraph (1) unless the person develops appropriate program 
        objectives within 3 years to dissipate the excess.
          ``(5) Amounts in fund on january 1, 1987.--Under this 
        subsection, amounts in a capital construction fund on January 
        1, 1987, shall be treated as having been deposited in that fund 
        on that date.
  ``(f) Tax Determinations.--
          ``(1) In general.--For a taxable year for which there is a 
        nonqualified withdrawal (including an amount treated as a 
        nonqualified withdrawal under subsection (e)), the tax imposed 
        by chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 
        ch. 1) shall be determined by--
                  ``(A) excluding the withdrawal from gross income; and
                  ``(B) increasing the tax imposed by chapter 1 of such 
                Code by the product of the amount of the withdrawal and 
                the highest tax rate specified in section 1 (or section 
                11 for a corporation) of such Code (26 U.S.C. 1, 11).
          ``(2) Maximum tax rate.--For that portion of a nonqualified 
        withdrawal made from the capital gain account during a taxable 
        year to which section 1(h) or 1201(a) of such Code (26 U.S.C. 
        1(h), 1201(a)) applies, the tax rate used under subparagraph 
        (A)(ii) may not exceed 15 percent (or 34 percent for a 
        corporation).
          ``(3) Tax benefit rule.--If any portion of a nonqualified 
        withdrawal is properly attributable to deposits (except 
        earnings on deposits) made by the taxpayer in a taxable year 
        that did not reduce the taxpayer's liability for tax under 
        chapter 1 of such Code (26 U.S.C. ch. 1) for a taxable year 
        before the taxable year in which the withdrawal occurs--
                  ``(A) that portion shall not be taken into account 
                under paragraph (1); and
                  ``(B) an amount equal to that portion shall be 
                allowed as a deduction under section 172 of such Code 
                (26 U.S.C. 172) for the taxable year in which the 
                withdrawal occurs.
          ``(4) Coordination with deduction for net operating losses.--
        A nonqualified withdrawal excluded from gross income under 
        paragraph (1) shall be excluded in determining taxable income 
        under section 172(b)(2) of such Code (26 U.S.C. 172(b)(2)).
``Sec. 53512. FIFO and LIFO withdrawals
  ``(a) FIFO.--Except as provided in subsection (b), an amount 
withdrawn from an account under this chapter shall be treated as 
withdrawn on a first-in-first-out basis.
  ``(b) LIFO.--An amount withdrawn from an account under this chapter 
shall be treated as withdrawn on a last-in-first-out basis if it is--
          ``(1) a nonqualified withdrawal for research, development, 
        and design expenses incident to new and advanced vessel design, 
        machinery, and equipment; or
          ``(2) an amount treated as a nonqualified withdrawal under 
        section 53510(d) of this title.
``Sec. 53513. Corporate reorganizations and partnership changes
  ``Under joint regulations--
          ``(1) a transfer of a capital construction fund from one 
        person to another person in a transaction to which section 381 
        of the Internal Revenue Code of 1986 (26 U.S.C. 381) applies 
        may be treated as if the transaction is not a nonqualified 
        withdrawal; and
          ``(2) a similar rule shall be applied to a continuation of a 
        partnership (within the meaning of subchapter K of chapter 1 of 
        such Code (26 U.S.C. 701 et seq.)).
``Sec. 53514. Relationship of old fund to new fund
  ``(a) Definition.--In this section, the term `old fund' means a 
capital construction fund maintained before October 21, 1970.
  ``(b) Election To Maintain Old Fund.--A person maintaining an old 
fund may elect to continue the old fund, but may not--
          ``(1) hold amounts in the old fund beyond the expiration date 
        provided in the agreement under which the old fund is 
        maintained (determined without regard to an extension or 
        renewal made after April 14, 1970); or
          ``(2) maintain simultaneously the old fund and a new fund 
        established under this chapter.
  ``(c) Application of New Fund Agreement to Old Fund Amounts.--If a 
person makes an agreement under this chapter to establish a new fund, 
the person may agree to extend the agreement to some or all of the 
amounts in an old fund. Each item in the old fund to be transferred 
shall be transferred in a nontaxable transaction to the appropriate 
account in the new fund. For purposes of section 53511(c)(3) of this 
title, the date of the deposit of an item so transferred shall be July 
1, 1971, or the date of the deposit in the old fund, whichever is 
later.
``Sec. 53515. Records and reports
  ``A person maintaining a fund under this chapter shall keep records 
and make reports as required by the Secretary or the Secretary of the 
Treasury.
``Sec. 53516. Termination of agreement after change in regulations
  ``If, after an agreement has been made under this chapter, a change 
is made either in the joint regulations or in the regulations 
prescribed by the Secretary under this chapter that could have a 
substantial effect on the rights or duties of a person maintaining a 
fund under this chapter, that person may terminate the agreement.
``Sec. 53517. Reports
  ``(a) In General.--Within 120 days after the close of each calendar 
year, the Secretary of Transportation and the Secretary of Commerce 
each shall provide the Secretary of the Treasury a written report on 
the capitalconstruction funds under the particular Secretary's 
jurisdiction for the calendar year.
  ``(b) Contents.--The report shall state the name and taxpayer 
identification number of each person--
          ``(1) establishing a capital construction fund during the 
        calendar year;
          ``(2) maintaining a capital construction fund on the last day 
        of the calendar year;
          ``(3) terminating a capital construction fund during the 
        calendar year;
          ``(4) making a deposit to or withdrawal from a capital 
        construction fund during the calendar year, and the amount of 
        the deposit or withdrawal; or
          ``(5) having been determined during the calendar year to have 
        failed to fulfill a substantial obligation under a capital 
        construction fund agreement to which the person is a party.

                  ``CHAPTER 537--LOANS AND GUARANTEES

                         ``SUBCHAPTER I--GENERAL

``Sec.
``53701.  Definitions.
``53702.  General authority.
``53703.  Application procedures.
``53704.  Funding limits.
``53705.  Pledge of United States Government.
``53706.  Eligible purposes of obligations.
``53707.  Findings related to obligors and operators.
``53708.  Findings related to economic soundness.
``53709.  Amount of obligations.
``53710.  Contents of obligations.
``53711.  Security interest.
``53712.  Monitoring financial condition and operations of obligor.
``53713.  Administrative fees.
``53714.  Guarantee fees.
``53715.  Escrow fund.
``53716.  Deposit fund.
``53717.  Management of funds in the Treasury.
``53718.  Annual report to Congress.

                   ``SUBCHAPTER II--DEFAULT PROVISIONS

``53721.  Rights of obligee.
``53722.  Actions by Secretary.
``53723.  Payments by Secretary and issuance of obligations.
``53724.  Rights to secured property.
``53725.  Actions against obligor.

                  ``SUBCHAPTER III--PARTICULAR PROJECTS

``53731.  Commercial demonstration ocean thermal energy conversion 
          facilities and plantships.
``53732.  Eligible export vessels.
``53733.  Shipyard modernization and improvement.
``53734.  Replacement of vessels because of changes in operating 
          standards.
``53735.  Fisheries financing and capacity reduction.

                        ``SUBCHAPTER I--GENERAL

``Sec. 53701. Definitions
  ``In this chapter:
          ``(1) Actual cost.--The term `actual cost' means the sum of--
                  ``(A) all amounts paid by or for the account of the 
                obligor as of the date on which a determination is made 
                under section 53715(d)(1) of this title; and
                  ``(B) all amounts that the Secretary reasonably 
                estimates the obligor will become obligated to pay from 
                time to time thereafter, for the construction, 
                reconstruction, or reconditioning of the vessel, 
                including guarantee fees that will become payable under 
                section 53714 of this title in connection with all 
                obligations issued for construction, reconstruction, or 
                reconditioning of the vessel or equipment to be 
                delivered, and all obligations issued for the delivered 
                vessel or equipment.
          ``(2) Construction, reconstruction, and reconditioning.--The 
        terms `construction', `reconstruction', and `reconditioning' 
        include designing, inspecting, outfitting, and equipping.
          ``(3) Depreciated actual cost.--The term `depreciated actual 
        cost' of a vessel means--
                  ``(A) if the vessel was not reconstructed or 
                reconditioned, the actual cost of the vessel 
                depreciated on a straight line basis over the useful 
                life of the vessel as determined by the Secretary, not 
                to exceed 25 years from the date of delivery by the 
                builder; or
                  ``(B) if the vessel was reconstructed or 
                reconditioned, the sum of--
                          ``(i) the actual cost of the vessel 
                        depreciated on a straight line basis from the 
                        date of delivery by the builder to the date of 
                        the reconstruction or reconditioning, using the 
                        original useful life of the vessel, and from 
                        the date of the reconstruction or 
                        reconditioning, using a useful life of the 
                        vessel determined by the Secretary; and
                          ``(ii) any amount paid or obligated to be 
                        paid for the reconstruction or reconditioning, 
                        depreciated on a straight line basis using a 
                        useful life of the vessel determined by the 
                        Secretary.
          ``(4) Eligible export vessel.--The term `eligible export 
        vessel' means a vessel that--
                  ``(A) is constructed, reconstructed, or reconditioned 
                in the United States for use in world-wide trade; and
                  ``(B) will, on delivery or redelivery, become or 
                remain documented under the laws of a country other 
                than the United States.
          ``(5) Fishery facility.--
                  ``(A) In general.--Subject to paragraph (B), the term 
                `fishery facility' means--
                          ``(i) for operations on land--
                                  ``(I) a structure or appurtenance 
                                thereto designed for the unloading and 
                                receiving from vessels, the processing, 
                                the holding pending processing, the 
                                distribution after processing, or the 
                                holding pending distribution, of fish 
                                from a fishery;
                                  ``(II) the land necessary for the 
                                structure or appurtenance; and
                                  ``(III) equipment that is for use 
                                with the structure or appurtenance and 
                                that is necessary for performing a 
                                function referred to in clause (I);
                          ``(ii) for operations not on land, a vessel 
                        built in the United States and used for, 
                        equipped to be used for, or of a type normally 
                        used for, the processing of fish; or
                          ``(iii) for aquaculture, including operations 
                        on land or elsewhere--
                                  ``(I) a structure or appurtenance 
                                thereto designed for aquaculture;
                                  ``(II) the land necessary for the 
                                structure or appurtenance;
                                  ``(III) equipment that is for use 
                                with the structure or appurtenance and 
                                that is necessary for performing a 
                                function referred to in clause (I); and
                                  ``(IV) a vessel built in the United 
                                States and used for, equipped to be 
                                used for, or of a type normally used 
                                for, aquaculture.
                  ``(B) Required ownership.--Under paragraph (A), the 
                structure, appurtenance, land, equipment, or vessel 
                must be owned by--
                          ``(i) an individual who is a citizen of the 
                        United States; or
                          ``(ii) an entity that is a citizen of the 
                        United States under section 50501 of this title 
                        and that is at least 75 percent owned (as 
                        determined under that section) by citizens of 
                        the United States.
          ``(6) Fishing vessel.--The term `fishing vessel' has the 
        meaning given that term in section 3 of the Magnuson-Stevens 
        Fishery Conservation and Management Act (16 U.S.C. 1802), and 
        any reference in this chapter to a vessel designed principally 
        for commercial use in the fishing trade or industry is deemed 
        to be a reference to a fishing vessel.
          ``(7) Mortgage.--The term `mortgage' includes--
                  ``(A) a preferred mortgage as defined in section 
                31301 of this title; and
                  ``(B) a mortgage on a vessel that will become a 
                preferred mortgage when filed or recorded under chapter 
                313 of this title.
          ``(8) Obligation.--The term `obligation' means an instrument 
        of indebtedness issued for a purpose described in section 53706 
        of this title, except--
                  ``(A) an obligation issued by the Secretary under 
                section 53723 of this title; and
                  ``(B) an obligation eligible for investment of funds 
                under section 53715(f) or 53717 of this title.
          ``(9) Obligee.--The term `obligee' means the holder of an 
        obligation.
          ``(10) Obligor.--The term `obligor' means a party primarily 
        liable for payment of the principal of or interest on an 
        obligation.
          ``(11) Ocean thermal energy conversion facility or 
        plantship.--The term `ocean thermal energy conversion facility 
        or plantship' means an at-sea facility or vessel, whether 
        mobile, floating unmoored, moored, or standing on the seabed, 
        that uses temperature differences in ocean water to produce 
        electricity or another form of energy capable of being used 
        directly to perform work, and includes--
                  ``(A) equipment installed on the facility or vessel 
                to use the electricity or other form of energy to 
                produce, process, refine, or manufacture a product;
                  ``(B) a cable or pipeline used to deliver the 
                electricity, freshwater, or product to shore; and
                  ``(C) other associated equipment and appurtenances of 
                the facility or vessel to the extent they are located 
                seaward of the high water mark.
          ``(12) Secretary.--The term `Secretary' means--
                  ``(A) the Secretary of Commerce with respect to 
                fishing vessels and fishery facilities; and
                  ``(B) the Secretary of Transportation with respect to 
                other vessels and general shipyard facilities (as 
                defined in section 53733(a) of this title).
          ``(13) Vessel.--The term `vessel' means any type of vessel, 
        whether in existence or under construction, including--
                  ``(A) a cargo vessel;
                  ``(B) a passenger vessel;
                  ``(C) a combination cargo and passenger vessel;
                  ``(D) a tanker;
                  ``(E) a tug or towboat;
                  ``(F) a barge;
                  ``(G) a dredge;
                  ``(H) a floating drydock with a capacity of at least 
                35,000 lifting tons and a beam of at least 125 feet 
                between the wing walls;
                  ``(I) an oceanographic research vessel;
                  ``(J) an instruction vessel;
                  ``(K) a pollution treatment, abatement, or control 
                vessel;
                  ``(L) a fishing vessel whose ownership meets the 
                citizenship requirements under section 50501 of this 
                title for documenting vessels to operate in the 
                coastwise trade; and
                  ``(M) an ocean thermal energy conversion facility or 
                plantship that is or will be documented under the laws 
                of the United States.
``Sec. 53702. General authority
  ``(a) In General.--The Secretary, on terms the Secretary may 
prescribe, may guarantee or make a commitment to guarantee the payment 
of the principal of and interest on an obligation eligible to be 
guaranteed under this chapter. A guarantee or commitment to guarantee 
shall cover 100 percent of the principal and interest.
  ``(b) Direct Loans for Fisheries.--
          ``(1) In general.--Notwithstanding any other provision of 
        this chapter, any obligation involving a fishing vessel, 
        fishery facility, aquaculture facility, individual fishing 
        quota, or fishing capacity reduction program issued under this 
        chapter after October 11, 1996, shall be a direct loan 
        obligation for which the Secretary shall be the obligee, rather 
        than an obligation issued to an obligee other than the 
        Secretary and guaranteed by the Secretary. A direct loan 
        obligation under this subsection shall be treated in the same 
        manner and to the same extent as an obligation guaranteed under 
        this chapter except with respect to provisions of this chapter 
        that by their nature can only be applied to obligations 
        guaranteed under this chapter.
          ``(2) Interest rate.--Notwithstanding any other provision of 
        this chapter, the annual rate of interest an obligor shall pay 
        on a direct loan obligation under this subsection is 2 percent 
        plus the additional percent the Secretary must pay as interest 
        to borrow from the Treasury the funds to make the loan.
``Sec. 53703. Application procedures
  ``(a) Time for Decision.--
          ``(1) In general.--The Secretary shall approve or deny an 
        application for a loan guarantee under this chapter within 270 
        days after the date on which the signed application is received 
        by the Secretary.
          ``(2) Extension.--On request by an applicant, the Secretary 
        may extend the 270-day period in paragraph (1) to a date not 
        later than 2 years after the date on which the signed 
        application was received by the Secretary.
  ``(b) Certification of Review.--The Secretary may not guarantee or 
make a commitment to guarantee an obligation under this chapter unless 
the Secretary certifies that a full and fair consideration of all the 
regulatory requirements, including economic soundness and financial 
requirements applicable to the obligor and related parties, and a 
thorough assessment of the technical, economic, and financial aspects 
of the loan application, has been made.
``Sec. 53704. Funding limits
  ``(a) General Limitations.--The total unpaid principal amount of 
obligations guaranteed under this chapter and outstanding at one time 
may not exceed $12,000,000,000. Of that amount--
          ``(1) $850,000,000 shall be limited to obligations related to 
        fishing vessels and fishery facilities; and
          ``(2) $3,000,000,000 shall be limited to obligations related 
        to eligible export vessels.
  ``(b) Additional Limitations.--Additional limitations may not be 
imposed on new commitments to guarantee loans for any fiscal year, 
except in amounts established in advance by annual authorization laws. 
A vessel eligible for a guarantee under this chapter may not be denied 
eligibility because of its type.
  ``(c) Limits Based on Risk Factors.--
          ``(1) Definition.--In this subsection, the term `cost' has 
        the meaning given that term in section 502 of the Federal 
        Credit Reform Act of 1990 (2 U.S.C. 661a).
          ``(2) System of risk categories.--The Secretary shall--
                  ``(A) establish, and update annually, a system of 
                risk categories for obligations guaranteed under this 
                chapter that categorizes the relative risk of 
                guarantees based on the risk factors set forth in 
                paragraph (4);
                  ``(B) determine annually for each risk category a 
                subsidy rate equivalent to the cost of obligations in 
                the category, expressed as a percentage of the amount 
                guaranteed for obligations in the category; and
                  ``(C) ensure that each risk category is comprised of 
                loans that are relatively homogeneous in cost and share 
                characteristics predictive of defaults and other costs, 
                given the facts known at the time of obligation or 
                commitment, using a risk category system that is based 
                on historical analysis of program data and statistical 
                evidence concerning the likely costs of defaults or 
                other costs that are expected to be associated with the 
                loans in the category.
          ``(3) Use of system.--
                  ``(A) Placing obligation in category.--Before making 
                a guarantee under this chapter for an obligation, and 
                annually for projects subject to a guarantee, the 
                Secretary shall apply the risk factors specified in 
                paragraph (4) to place the obligation in a risk 
                category established under paragraph (2).
                  ``(B) Reduction of available amount.--The Secretary 
                shall consider the total amount available to the 
                Secretary for making guarantees under this chapter to 
                be reduced by the amount determined by multiplying--
                          ``(i) the amount guaranteed under this 
                        chapter for an obligation; by
                          ``(ii) the subsidy rate for the category in 
                        which the obligation is placed under 
                        subparagraph (A).
                  ``(C) Estimated cost.--The estimated cost to the 
                United States Government of a guarantee under this 
                chapter for an obligation is deemed to be the amount 
                determined under subparagraph (B) for the obligation.
                  ``(D) Restriction on further guarantees.--The 
                Secretary may not guarantee obligations under this 
                chapter after the total amount available to the 
                Secretary under appropriations laws for the cost of 
                loan guarantees is considered to be reduced to zero 
                under subparagraph (B).
          ``(4) Risk factors.--The risk factors referred to in this 
        subsection are--
                  ``(A) if applicable, the country risk for each 
                eligible export vessel financed or to be financed by an 
                obligation;
                  ``(B) the period for which an obligation is 
                guaranteed or to be guaranteed;
                  ``(C) the amount of an obligation guaranteed or to be 
                guaranteed in relation to the total cost of the project 
                financed or to be financed by the obligation;
                  ``(D) the financial condition of an obligor or 
                applicant for a guarantee;
                  ``(E) if applicable, other guarantees related to the 
                project;
                  ``(F) if applicable, the projected employment of each 
                vessel or equipment to be financed with an obligation;
                  ``(G) if applicable, the projected market that will 
                be served by each vessel or equipment to be financed 
                with an obligation;
                  ``(H) the collateral provided for a guarantee for an 
                obligation;
                  ``(I) the management and operating experience of an 
                obligor or applicant for a guarantee;
                  ``(J) whether a guarantee under this chapter is or 
                will be in effect during the construction period of the 
                project; and
                  ``(K) the concentration risk presented by an unduly 
                large percentage of loans outstanding by any one 
                borrower or group of affiliated borrowers.
``Sec. 53705. Pledge of United States Government
  ``(a) Full Faith and Credit.--The full faith and credit of the United 
States Government is pledged to the payment of a guarantee made under 
this chapter, for both principal and interest, including interest (as 
may be provided for in the guarantee) accruing between the date of 
default under a guaranteed obligation and the date of payment in full 
of the guarantee.
  ``(b) Incontestability.--A guarantee or commitment to guarantee made 
under this chapter is conclusive evidence of the eligibility of the 
obligation for the guarantee. The validity of a guarantee or commitment 
to guarantee made under this chapter is incontestable.
``Sec. 53706. Eligible purposes of obligations
  ``(a) In General.--To be eligible for a guarantee under this chapter, 
an obligation must aid in any of the following:
          ``(1)(A) Financing (including reimbursement of an obligor for 
        expenditures previously made for) the construction, 
        reconstruction, or reconditioning of a vessel (including an 
        eligible export vessel) designed principally for research, or 
        for commercial use--
                  ``(i) in the coastwise or intercoastal trade;
                  ``(ii) on the Great Lakes, or on bays, sounds, 
                rivers, harbors, or inland lakes of the United States;
                  ``(iii) in foreign trade as defined in section 109(b) 
                of this title;
                  ``(iv) as an ocean thermal energy conversion facility 
                or plantship;
                  ``(v) as a floating drydock in the construction, 
                reconstruction, reconditioning, or repair of vessels; 
                or
                  ``(vi) as an eligible export vessel in worldwide 
                trade.
          ``(B) A guarantee under subparagraph (A) may not be made more 
        than one year after delivery of the vessel (or redelivery if 
        the vessel was reconstructed or reconditioned) unless the 
        proceeds of the obligation are used to finance the 
        construction, reconstruction, or reconditioning of a vessel or 
        of facilities or equipment related to marine operations.
          ``(2) Financing (including reimbursement of an obligor for 
        expenditures previously made for) the construction, 
        reconstruction, reconditioning, or purchase of a vessel owned 
        by citizens of the United States and designed principally for 
        research, or for commercial use in the fishing industry.
          ``(3) Financing the purchase, reconstruction, or 
        reconditioning of a vessel or fishery facility--
                  ``(A) for which an obligation was guaranteed under 
                this chapter; and
                  ``(B) that, under subchapter II of this chapter--
                          ``(i) is a vessel or fishery facility for 
                        which an obligation was accelerated and paid;
                          ``(ii) was acquired by the Federal Ship 
                        Financing Fund or successor account under 
                        section 53717 of this title; or
                          ``(iii) was sold at foreclosure begun by the 
                        Secretary.
          ``(4) Financing any part of the repayment to the United 
        States Government of any amount of a construction-differential 
        subsidy paid for a vessel.
          ``(5) Refinancing an existing obligation (regardless of 
        whether guaranteed under this chapter) issued for a purpose 
        described in clauses (1)-(4), including a short-term obligation 
        incurred to obtain temporary funds with the intention of 
        refinancing.
          ``(6) Financing or refinancing (including reimbursement of an 
        obligor for expenditures previously made for) the construction, 
        reconstruction, reconditioning, or purchase of a fishery 
        facility.
          ``(7) Financing or refinancing (including reimbursement of an 
        obligor for expenditures previously made for) the purchase of 
        an individual fishing quota in accordance with section 
        303(d)(4) of the Magnuson-Stevens Fishery Conservation and 
        Management Act (16 U.S.C. 1853(d)(4)).
  ``(b) Non-Vessels Treated as Vessels.--An obligation guaranteed under 
subsection (a)(6) or (7) shall be treated, for purposes of this 
chapter, in the same manner and to the same extent as an obligation 
that aids in financing the construction, reconstruction, 
reconditioning, or purchase of a vessel, except with respect to 
provisions that by their nature can only be applied to vessels.
  ``(c) Priorities for Certain Vessels.--In guaranteeing or making a 
commitment to guarantee an obligation under this chapter, the Secretary 
shall give priority to--
          ``(1) a vessel that is otherwise eligible for a guarantee and 
        is constructed with assistance under subtitle D of the Maritime 
        Security Act of 2003 (46 U.S.C. 53101 note); and
          ``(2) after applying clause (1), a vessel that is otherwise 
        eligible for a guarantee and that the Secretary of Defense 
        determines--
                  ``(A) is suitable for service as a naval auxiliary in 
                time of war or national emergency; and
                  ``(B) meets a shortfall in sealift capacity or 
                capability.
``Sec. 53707. Findings related to obligors and operators
  ``(a) Responsible Obligor.--The Secretary may not guarantee or make a 
commitment to guarantee an obligation under this chapter unless the 
Secretary finds that the obligor is responsible and has the ability, 
experience, financial resources, and other qualifications necessary for 
the adequate operation and maintenance of each vessel that will serve 
as security for the guarantee.
  ``(b) Operators of Liner Vessels.--The Secretary of Transportation 
may not guarantee or make a commitment to guarantee a loan for the 
construction, reconstruction, or reconditioning of a liner vessel under 
this chapter unless the Chairman of the Federal Maritime Commission 
certifies that the operator of the vessel has not been found by the 
Commission to have committed, within the previous 5 years--
          ``(1) a violation of part A of subtitle IV of this title that 
        involves unjust or unfair discriminatory treatment or undue or 
        unreasonable prejudice or disadvantage with respect to a United 
        States shipper, ocean transportation intermediary, ocean common 
        carrier, or port; or
          ``(2) a violation of part B of subtitle IV of this title.
  ``(c) Operators of Fishing Vessels.--The Secretary of Commerce may 
not guarantee or make a commitment to guarantee a loan for the 
construction, reconstruction, or reconditioning of a fishing vessel 
under this chapter if the operator of the vessel has been--
          ``(1) held liable or liable in rem for a civil penalty under 
        section 1858 of title 16 and not paid the penalty;
          ``(2) found guilty of an offense under section 1859 of title 
        16 and not paid the assessed fine or served the assessed 
        sentence;
          ``(3) held liable for a civil or criminal penalty under 
        section 1375 of title 16 and not paid the assessed fine or 
        served the assessed sentence; or
          ``(4) held liable for a civil penalty by the Coast Guard 
        under this title or title 33 and not paid the assessed fine.
  ``(d) Waivers Concerning Financial Condition.--The Secretary shall 
prescribe regulations concerning circumstances under which waivers of, 
or exceptions to, otherwise applicable regulatory requirements 
concerning financial condition can be made. The regulations shall 
require that--
          ``(1) the economic soundness requirements in section 53708(a) 
        of this title are met after the waiver of the financial 
        condition requirement; and
          ``(2) the waiver shall provide for the imposition of other 
        requirements on the obligor designed to compensate for the 
        increased risk associated with the obligor's failure to meet 
        regulatory requirements applicable to financial condition.
``Sec. 53708. Findings related to economic soundness
  ``(a) By Secretary of Transportation.--The Secretary of 
Transportation may not guarantee or make a commitment to guarantee an 
obligation under this chapter unless the Secretary finds that the 
property or project for which the obligation will be executed will be 
economically sound. In making that finding, the Secretary shall 
consider--
          ``(1) the need in the particular segment of the maritime 
        industry for new or additional capacity, including any impact 
        on existing equipment for which a guarantee under this chapter 
        is in effect;
          ``(2) the market potential for employment of the vessel over 
        the life of the guarantee;
          ``(3) projected revenues and expenses associated with 
        employment of the vessel;
          ``(4) any charter, contract of affreightment, transportation 
        agreement, or similar agreement or undertaking relevant to the 
        employment of the vessel;
          ``(5) other relevant criteria; and
          ``(6) for inland waterways, the need for technical 
        improvements, including increased fuel efficiency or improved 
        safety.
  ``(b) By Secretary of Commerce.--The Secretary of Commerce may not 
guarantee or make a commitment to guarantee an obligation under this 
chapter unless the Secretary finds, at or prior to the time the 
commitment is made or the guarantee becomes effective, that--
          ``(1) the property or project for which the obligation will 
        be executed will be economically sound; and
          ``(2) for a fishing vessel, the purpose of the financing or 
        refinancing is consistent with--
                  ``(A) the wise use of the fisheries resources and the 
                development, advancement, management, conservation, and 
                protection of the fisheries resources; or
                  ``(B) the need for technical improvements, including 
                increased fuel efficiency or improved safety.
  ``(c) Used Fishing Vessels and Facilities.--The Secretary of Commerce 
may not guarantee or make a commitment to guarantee an obligation under 
this chapter for the purchase of a used fishing vessel or used fishery 
facility unless the vessel or facility will be--
          ``(1) reconstructed or reconditioned in the United States and 
        will contribute to the development of the United States fishing 
        industry; or
          ``(2) used--
                  ``(A) in the harvesting of fish from an underused 
                fishery; or
                  ``(B) for a purpose described in the definition of 
                `fishery facility' in section 53701 of this title with 
                respect to an underused fishery.
  ``(d) Independent Analysis.--The Secretary may make a determination 
that aspects of an application under this chapter require independent 
analysis to be conducted by third party experts due to risk factors 
associated with markets, technology, financial structures, or other 
risk factors identified by the Secretary. Any independent analysis 
conducted under this subsection shall be performed by a party chosen by 
the Secretary.
  ``(e) Additional Equity Because of Increased Risks.--Notwithstanding 
any other provision of this chapter, the Secretary may make a 
determination that an application under this title requires additional 
equity because of increased risk factors associated with markets, 
technology, financial structures, or other risk factors identified by 
the Secretary.
``Sec. 53709. Amount of obligations
  ``(a) In General.--The principal of an obligation may not be 
guaranteed in an amount greater than the amount determined by 
multiplying the percentage applicable under subsection (b) by--
          ``(1) the amount paid by or for the account of the obligor 
        (as determined by the Secretary, which determination shall be 
        conclusive) for the construction, reconstruction, or 
        reconditioning of the vessel used as security for the 
        guarantee; or
          ``(2) if the obligor creates an escrow fund under section 
        53715 of this title, the actual cost of the vessel.
  ``(b) Limitations on Amount Borrowed.--
          ``(1) In general.--Except as otherwise provided, the 
        principal amount of an obligation guaranteed under this chapter 
        may not exceed 75 percent of the actual cost or depreciated 
        actual cost, as determined by the Secretary, of the vessel used 
        as security for the guarantee.
          ``(2) Certain approved vessels.--The principal amount may not 
        exceed 87.5 percent of the actual cost or depreciated actual 
        cost if--
                  ``(A) the size and speed of the vessel are approved 
                by the Secretary;
                  ``(B) the vessel is or would have been eligible for 
                mortgage aid for construction under section 509 of the 
                Merchant Marine Act, 1936, or would have been eligible 
                except that the vessel was built with a construction-
                differential subsidy and the subsidy has been repaid; 
                and
                  ``(C) the vessel is of a type described in that 
                section for which the minimum down payment required by 
                that section is 12.5 percent of the cost of the vessel.
          ``(3) Barges.--For a barge constructed without a 
        construction-differential subsidy or for which the subsidy has 
        been repaid, the principal amount may not exceed 87.5 percent 
        of the actual cost or depreciated actual cost.
          ``(4) Fishing vessels and fishery facilities.--For a fishing 
        vessel or fishery facility, the principal amount may not exceed 
        80 percent of the actual cost or depreciated actual cost. 
        However, debt for the vessel or facility may not be placed 
        through the Federal Financing Bank.
          ``(5) OTEC.--For an ocean thermal energy conversion facility 
        or plantship constructed without a construction-differential 
        subsidy, the principal amount may not exceed 87.5 percent of 
        the actual cost or depreciated actual cost of the facility or 
        plantship.
          ``(6) Eligible export vessels.--For an eligible export 
        vessel, the principal amount may not exceed 87.5 percent of the 
        actual cost or depreciated actual cost.
  ``(c) Security Involving Multiple Vessels.--The principal amount of 
an obligation having more than one vessel as security for the guarantee 
may not exceed the sum of the principal amounts allowable for all the 
vessels.
  ``(d) Prohibition on Uniform Percentage Limitations.--The Secretary 
may not establish a percentage under any provision of subsection (b) 
that is to be applied uniformly to all guarantees or commitments to 
guarantee made under that provision.
  ``(e) Prohibition on Minimum Principal Amount.--The Secretary may not 
establish, as a condition of eligibility for a guarantee under this 
chapter, a minimum principal amount for an obligation covering 
thereconstruction or reconditioning of a fishing vessel or fishery 
facility. For purposes of this chapter, the reconstruction or 
reconditioning of a fishing vessel or fishery facility does not include 
the routine minor repair or maintenance of the vessel or facility.
``Sec. 53710. Contents of obligations
  ``(a) In General.--An obligation guaranteed under this chapter must--
          ``(1) provide for payments by the obligor satisfactory to the 
        Secretary;
          ``(2) provide for interest (exclusive of guarantee fees and 
        other fees) at a rate not more than the annual rate on the 
        unpaid principal that the Secretary determines is reasonable, 
        considering the range of interest rates prevailing in the 
        private market for similar loans and the risks assumed by the 
        Secretary;
          ``(3) have a maturity date satisfactory to the Secretary, 
        but--
                  ``(A) not more than 25 years after the date of 
                delivery of the vessel used as security for the 
                guarantee; or
                  ``(B) if the vessel has been reconstructed or 
                reconditioned, not more than the later of--
                          ``(i) 25 years after the date of delivery of 
                        the vessel; or
                          ``(ii) the remaining years of useful life of 
                        the vessel as determined by the Secretary; and
          ``(4) provide, or a related agreement must provide, that if 
        the vessel used as security for the guarantee is a delivered 
        vessel, the vessel shall be--
                  ``(A) in class A-1, American Bureau of Shipping, or 
                meet other standards acceptable to the Secretary, with 
                all required certificates, including marine inspection 
                certificates of the Coast Guard or, in the case of an 
                eligible export vessel, of the appropriate national 
                flag authorities under a treaty, convention, or other 
                international agreement to which the United States 
                Government is a party, and with all outstanding 
                requirements and recommendations necessary for class 
                retention accomplished, unless the Secretary permits a 
                deferment of repairs necessary to meet these 
                requirements; and
                  ``(B) well equipped, in good repair, and in every 
                respect seaworthy and fit for service.
  ``(b) Provisions for Certain Passenger Vessels.--
          ``(1) In general.--With the Secretary's approval, if the 
        vessel used as security for the guarantee is a passenger vessel 
        having the tonnage, speed, passenger accommodations, and other 
        characteristics described in section 503 of the Merchant Marine 
        Act, 1936, an obligation guaranteed under this chapter or a 
        related agreement may provide that--
                  ``(A) the only recourse by the Government against the 
                obligor for payments under the guarantee will be 
                repossession of the vessel and assignment of insurance 
                claims; and
                  ``(B) the obligor's liability for payments under the 
                guarantee will be satisfied and discharged by the 
                surrender of the vessel and all interest in the vessel 
                to the Government in the condition described in 
                paragraph (2).
          ``(2) Surrender of vessel.--
                  ``(A) In general.--On surrender, the vessel must be--
                          ``(i) free and clear of all liens and 
                        encumbrances except the security interest 
                        conveyed to the Secretary under this chapter;
                          ``(ii) in class; and
                          ``(iii) in as good order and condition 
                        (ordinary wear and tear excepted) as when 
                        acquired by the obligor.
                  ``(B) Covering deficiencies by insurance.--To the 
                extent covered by insurance, a deficiency related to a 
                requirement in subparagraph (A) may be satisfied by 
                assignment of the obligor's insurance claims to the 
                Government.
  ``(c) Other Provisions To Protect Security Interests.--An obligation 
guaranteed under this chapter and any related agreement must contain 
other provisions for the protection of the security interests of the 
Government (including acceleration, assumption, and subrogation 
provisions and the issuance of notes by the obligor to the Secretary), 
liens and releases of liens, payment of taxes, and other matters that 
the Secretary may prescribe.
``Sec. 53711. Security interest
  ``(a) In General.--The Secretary may guarantee an obligation under 
this chapter only if the obligor conveys or agrees to convey to the 
Secretary a security interest the Secretary considers necessary to 
protect the interest of the United States Government.
  ``(b) Multiple Vessels and Types of Security.--The security interest 
may relate to more than one vessel and may consist of more than one 
type of security. If the security interest relates to more than one 
vessel, the obligation may have the latest maturity date allowable 
under section 53710(a)(3) of this title for any of the vessels used as 
security for the guarantee. However, the Secretary may require such 
payments of principal prior to maturity, with respect to all related 
obligations, as the Secretary considers necessary to maintain adequate 
security for the guarantee.
``Sec. 53712. Monitoring financial condition and operations of obligor
  ``(a) In General.--The Secretary shall monitor the financial 
condition and operations of the obligor on a regular basis during the 
term of the guarantee. The Secretary shall document the results of the 
monitoring on an annual or quarterly basis depending on the condition 
of the obligor. If the Secretary determines that the financial 
condition of the obligor warrants additional protections to the 
Secretary, the Secretary shall take appropriate action under subsection 
(b). If the Secretary determines that the financial condition of the 
obligor jeopardizes its continued ability to perform its 
responsibilities in connection with the guarantee of an obligation by 
the Secretary, the Secretary shall make an immediate determination 
whether default should take place and whether further measures 
described in subsection (b) should be taken to protect the interests of 
the Secretary while ensuring that program objectives are met.
  ``(b) Contract Provisions To Protect Secretary.--The Secretary shall 
include provisions in a loan agreement with an obligor that provides 
additional authority to the Secretary to take action to limit potential 
losses in connection with a defaulted loan or a loan that is in 
jeopardy due to the deteriorating financial condition of the obligor. 
These provisions include requirements for additional collateral or 
greater equity contributions that are effective upon the occurrence of 
verifiable conditions relating to the obligor's financial condition or 
the status of the vessel or shipyard project.
``Sec. 53713. Administrative fees
  ``(a) In General.--The Secretary shall charge and collect from the 
obligor fees the Secretary considers reasonable for--
          ``(1) investigating an application for a guarantee;
          ``(2) appraising property offered as security for a 
        guarantee;
          ``(3) issuing a commitment;
          ``(4) providing services related to an escrow fund under 
        section 53715 of this title; and
          ``(5) inspecting property during construction, 
        reconstruction, or reconditioning.
  ``(b) Total Fee Limitation.--The total fees under subsection (a) may 
not exceed 0.5 percent of the original principal amount of the 
obligations to be guaranteed.
  ``(c) Fees for Independent Analysis.--The Secretary may charge and 
collect fees to cover the costs of independent analysis under section 
53708(d) of this title. Notwithstanding section 3302 of title 31, any 
fee collected under this subsection shall--
          ``(1) be credited as an offsetting collection to the account 
        that finances the administration of the loan guarantee program;
          ``(2) be available for expenditure only to pay the costs of 
        activities and services for which the fee is imposed; and
          ``(3) remain available until expended.
``Sec. 53714. Guarantee fees
  ``(a) Regulations.--Subject to this section, the Secretary shall 
prescribe regulations to assess a fee for guaranteeing an obligation 
under this chapter.
  ``(b) Computation of Fee.--
          ``(1) In general.--The amount of the fee for a guarantee 
        under this chapter shall be equal to the sum of the amounts 
        determined under paragraph (2) for the years in which the 
        guarantee is in effect.
          ``(2) Present value for each year.--The amount referred to in 
        paragraph (1) for a year in which the guarantee is in effect is 
        the present value of the amount calculated under paragraph (3). 
        To determine the present value, the Secretary shall apply a 
        discount rate determined by the Secretary of the Treasury, 
        considering current market yields on outstanding obligations of 
        the United States Government having periods to maturity 
        comparable to the period to maturity for the guaranteed 
        obligation.
          ``(3) Calculation of amount.--The amount referred to in 
        paragraph (2) shall be calculated by multiplying--
                  ``(A) the estimated average unpaid principal amount 
                of the obligation that will be outstanding during the 
                year (excluding the average amount, other than 
                interest, on deposit during the year in an escrow fund 
                under section 53715 of this title); by
                  ``(B) the fee rate set under paragraph (4).
          ``(4) Setting fee rates.--To set the fee rate referred to in 
        paragraph (3)(B), the Secretary shall establish a formula 
        that--
                  ``(A) takes into account the security provided for 
                the guaranteed obligation; and
                  ``(B) is a sliding scale based on the 
                creditworthiness of the obligor, using--
                          ``(i) the lowest allowable rate under 
                        paragraph (5) for the most creditworthy 
                        obligors; and
                          ``(ii) the highest allowable rate under 
                        paragraph (5) for the least creditworthy 
                        obligors.
          ``(5) Permissible range of rates.--The fee rate set under 
        paragraph (4) shall be--
                  ``(A) for a delivered vessel or equipment, at least 
                0.5 percent and not more than 1 percent; and
                  ``(B) for a vessel to be constructed, reconstructed, 
                or reconditioned or equipment to be delivered, at least 
                0.25 percent and not more than 0.5 percent.
  ``(c) When Fee Collected.--A fee for the guarantee of an obligation 
under this chapter shall be collected not later than the date on which 
an amount is first paid on the obligation.
  ``(d) Financing the Fee.--A fee paid under this section is eligible 
to be financed under this chapter and shall be included in the actual 
cost of the obligation guaranteed.
  ``(e) Not Refundable.--A fee paid under this section is not 
refundable. However, an obligor shall receive credit for the amount 
paid for the remaining term of the obligation if the obligation is 
refinanced and guaranteed under this chapter after the refinancing.
``Sec. 53715. Escrow fund
  ``(a) In General.--If the proceeds of an obligation guaranteed under 
this chapter are to be used to finance the construction, 
reconstruction, or reconditioning of a vessel that will serve as 
security for a guarantee under this chapter, the Secretary may accept 
and hold in escrow, under an escrow agreement with the obligor, a 
portion of the proceeds of all obligations guaranteed under this 
chapter whose proceeds are to be so used which is equal to the sum of--
          ``(1)(A) the principal amount of all obligations whose 
        proceeds are to be so used; less
          ``(B) the amount determined by multiplying the percentage 
        applicable under section 53709(b) of this title by the amount 
        paid by or for the account of the obligor for the construction, 
        reconstruction, or reconditioning of the vessel; plus
          ``(2) any interest the Secretary may require on the amount 
        described in clause (1).
  ``(b) Security Involving Both Uncompleted and Delivered Vessels.--If 
the security for the guarantee of an obligation relates both to a 
vessel to be constructed, reconstructed, or reconditioned and to a 
delivered vessel, the principal amount of the obligation shall be 
prorated for purposes of subsection (a) under regulations prescribed by 
the Secretary.
  ``(c) Disbursement Before Termination of Agreement.--
          ``(1) Purposes.--The Secretary shall disburse amounts in the 
        escrow fund, as specified in the escrow agreement, to--
                  ``(A) pay amounts the obligor is obligated to pay 
                for--
                          ``(i) the construction, reconstruction, or 
                        reconditioning of a vessel used as security for 
                        the guarantee; and
                          ``(ii) interest on the obligations;
                  ``(B) redeem the obligations under a refinancing 
                guaranteed under this chapter; and
                  ``(C) pay any excess interest deposits to the obligor 
                at times provided for in the escrow agreement.
          ``(2) Manner of payment.--If a payment becomes due under the 
        guarantee before the termination of the escrow agreement, the 
        amount in the escrow fund at the time the payment becomes due, 
        including realized income not yet paid to the obligor, shall be 
        paid into the appropriate account under section 53717 of this 
        title. The amount shall be credited against amounts due or to 
        become due from the obligor to the Secretary on the guaranteed 
        obligations or, to the extent not so required, be paid to the 
        obligor.
  ``(d) Payments Required Before Disbursement.--
          ``(1) In general.--No disbursement shall be made under 
        subsection (c) to any person until the total amount paid by or 
        for the account of the obligor from sources other than the 
        proceeds of the obligation equals at least 25 percent or 12.5 
        percent, whichever is applicable under section 53709(b) of this 
        title, of the aggregate actual cost of the vessel, as 
        previously approved by the Secretary. If the aggregate actual 
        cost of the vessel has increased since the Secretary's initial 
        approval or if it increases after the first disbursement is 
        permitted under this subsection, then no further disbursements 
        shall be made under subsection (c) until the total amount paid 
        by or for the account of the obligor from sources other than 
        the proceeds of the obligation equals at least 25 percent or 
        12.5 percent, as applicable, of the increase, as determined by 
        the Secretary, in the aggregate actual cost of the vessel. This 
        paragraph does not require the Secretary to consent to finance 
        any increase in actual cost unless the Secretary determines 
        that such an increase in the obligation meets all the terms and 
        conditions of this chapter or other applicable law.
          ``(2) Documented proof of progress requirement.--The 
        Secretary shall, by regulation, establish a transparent, 
        independent, and risk-based process for verifying and 
        documenting the progress of projects under construction before 
        disbursing guaranteed loan funds. At a minimum, the process 
        shall require documented proof of progress in connection with 
        the construction, reconstruction, or reconditioning of a vessel 
        or vessels before disbursements are made from the escrow fund. 
        The Secretary may require that the obligor provide a 
        certificatefrom an independent party certifying that the 
requisite progress in construction, reconstruction, or reconditioning 
has taken place.
  ``(e) Disbursement on Termination of Agreement.--
          ``(1) In general.--If a payment has not become due under the 
        guarantee before the termination of the escrow agreement, the 
        balance of the escrow fund at the time of termination shall be 
        disbursed to--
                  ``(A) prepay--
                          ``(i) the principal amount of all obligations 
                        whose proceeds are to be used to finance the 
                        construction, reconstruction, or reconditioning 
                        of the vessel used or to be used as security 
                        for the guarantee; less
                          ``(ii) the amount determined by multiplying 
                        the percentage applicable under section 
                        53709(b) of this title by the actual cost of 
                        the vessel to the extent paid; and
                  ``(B) pay interest on that prepaid amount of 
                principal.
          ``(2) Remaining balance.--Any remaining balance of the escrow 
        fund shall be paid to the obligor.
  ``(f) Investment.--The Secretary may invest and reinvest any part of 
an escrow fund in obligations of the United States Government with 
maturities such that the escrow fund will be available as required for 
purposes of the escrow agreement. Investment income shall be paid to 
the obligor when received.
  ``(g) Terms To Protect Government.--The escrow agreement shall 
contain other terms the Secretary considers necessary to protect fully 
the interests of the Government.
``Sec. 53716. Deposit fund
  ``(a) In General.--There is a deposit fund in the Treasury for 
purposes of this section. The Secretary, in accordance with an 
agreement under subsection (b), may deposit into and hold in the fund 
cash belonging to an obligor to serve as collateral for a guarantee 
made under this chapter with respect to the obligor.
  ``(b) Agreement.--The Secretary and an obligor shall make a reserve 
fund or other collateral account agreement to govern the deposit, 
withdrawal, retention, use, and reinvestment of cash of the obligor 
held in the fund. The agreement shall contain--
          ``(1) terms and conditions required by this section;
          ``(2) terms that grant to the United States Government a 
        security interest in all amounts deposited into the fund; and
          ``(3) any additional terms considered by the Secretary to be 
        necessary to protect fully the interests of the Government.
  ``(c) Investment.--The Secretary may invest and reinvest any part of 
the amounts in the fund in obligations of the Government with 
maturities such that amounts in the fund will be available as required 
for purposes of the agreement under subsection (b). Cash balances in 
the fund in excess of current requirements shall be maintained in a 
form of uninvested funds, and the Secretary of the Treasury shall pay 
interest on these funds.
  ``(d) Withdrawals.--
          ``(1) In general.--Cash deposited into the fund may not be 
        withdrawn without the consent of the Secretary.
          ``(2) Use of income.--Subject to paragraph (3), the Secretary 
        may pay any income earned on cash of an obligor deposited into 
        the fund in accordance with the agreement with the obligor 
        under subsection (b).
          ``(3) Retention against default.--The Secretary may retain 
        and offset any or all of the cash of an obligor in the fund, 
        and any income realized thereon, as part of the Secretary's 
        recovery against the obligor in case of a default by the 
        obligor on an obligation.
``Sec. 53717. Management of funds in the Treasury
  ``(a) Loan Guarantees by Secretary of Transportation.--
          ``(1) When not subject to act.--The Secretary of 
        Transportation shall account for payments and disbursements 
        involving obligations guaranteed under this chapter and not 
        subject to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 
        et seq.) in an account in the Treasury entitled the Federal 
        Ship Financing Fund Liquidating Account.
          ``(2) When subject to act.--The Secretary of Transportation 
        shall account for payments and disbursements involving 
        obligations guaranteed under this chapter and subject to such 
        Act in a separate account in the Treasury entitled the Federal 
        Ship Financing Guaranteed Loan Financing Account.
  ``(b) Loan Guarantees by Secretary of Commerce.--
          ``(1) When not subject to act.--The Secretary of Commerce 
        shall account for payments and disbursements involving 
        obligations guaranteed under this chapter and not subject to 
        such Act in a separate account in the Treasury established for 
        this purpose.
          ``(2) When subject to act.--The Secretary of Commerce shall 
        account for payments and disbursements involving obligations 
        guaranteed under this chapter and subject to such Act in a 
        separate account in the Treasury of the United States 
        established for this purpose.
  ``(c) Direct Loans by Secretary of Commerce.--The Secretary of 
Commerce shall account for payments and disbursements involving direct 
loans made under this chapter in a separate account in the Treasury 
established for this purpose.
``Sec. 53718. Annual report to Congress
  ``The Secretary of Transportation shall report to Congress annually 
on the loan guarantee program under this chapter. Each report shall 
include--
          ``(1) the size, in dollars, of the portfolio of loans 
        guaranteed;
          ``(2) the size, in dollars, of projects in the portfolio 
        facing financial difficulties;
          ``(3) the number and type of projects covered;
          ``(4) a profile of pending loan applications;
          ``(5) the amount of appropriations available for new 
        guarantees;
          ``(6) a profile of each project approved since the last 
        report; and
          ``(7) a profile of any defaults since the last report.

                  ``SUBCHAPTER II--DEFAULT PROVISIONS

``Sec. 53721. Rights of obligee
  ``(a) Demands by Obligees.--Except as provided in subsection (c), if 
an obligor has continued in default for 30 days in the payment of 
principal or interest on an obligation guaranteed under this chapter, 
the obligee may demand that the Secretary pay the unpaid principal 
amount of the obligation and the unpaid interest on the obligation to 
the date of payment. The demand must be made within the earlier of--
          ``(1) a period that may be specified in the guarantee or a 
        related agreement; or
          ``(2) 90 days from the date of the default.
  ``(b) Payments by Secretary.--
          ``(1) In general.--If a demand is made under subsection (a), 
        the Secretary shall pay to the obligee the unpaid principal 
        amount of the obligation and the unpaid interest on the 
        obligation to the date of payment. Payment shall be made within 
        the earlier of--
                  ``(A) a period that may be specified in the guarantee 
                or a related agreement; or
                  ``(B) 30 days from the date of the demand.
          ``(2) If no existing default.--The Secretary is not required 
        to make payment under this subsection if, within the 
        appropriate period under paragraph (1), the Secretary finds 
        that the obligor was not in default or that the default was 
        remedied before the demand.
  ``(c) Assumption of Rights and Obligations Before Demand.--An obligee 
may not demand payment under this section if the Secretary, before the 
demand and on terms that may be provided in the obligation or a related 
agreement, has assumed the obligor's rights and duties under the 
obligation and any related agreement and made any payment in default. 
However,the guarantee of the obligation remains in effect after the 
Secretary's assumption.
``Sec. 53722. Actions by Secretary
  ``(a) General Authority.--On default under an obligation or related 
agreement between the Secretary and the obligor, the Secretary, on 
terms that may be provided in the obligation or agreement, may--
          ``(1) assume the obligor's rights and duties under the 
        obligation or agreement, make any payment in default, and 
        notify the obligee of the default and the Secretary's 
        assumption; or
          ``(2) notify the obligee of the default.
  ``(b) Demands by Obligees.--
          ``(1) Demand.--If the Secretary proceeds under subsection 
        (a)(2), the obligee may demand that the Secretary pay the 
        unpaid principal amount of the obligation and the unpaid 
        interest on the obligation. The demand must be made within the 
        earlier of--
                  ``(A) a period that may be specified in the guarantee 
                or a related agreement; or
                  ``(B) 60 days from the date of the Secretary's 
                notice.
          ``(2) Payment.--If a demand is made under paragraph (1), the 
        Secretary shall pay to the obligee the unpaid principal amount 
        of the obligation and the unpaid interest on the obligation to 
        the date of payment. Payment shall be made within the earlier 
        of--
                  ``(A) a period that may be specified in the guarantee 
                or a related agreement; or
                  ``(B) 30 days from the date of the demand.
  ``(c) Continued Effect of Guarantee.--A guarantee of an obligation 
remains in effect after an assumption of the obligation by the 
Secretary.
  ``(d) Additional Responses.--If there is a default on an obligation, 
the Secretary shall conduct operations under this chapter in a manner 
that--
          ``(1) maximizes the net present value return from the sale or 
        disposition of assets associated with the obligation, including 
        prompt referral to the Attorney General for collection as 
        appropriate;
          ``(2) minimizes the amount of any loss realized in the 
        resolution of the guarantee;
          ``(3) ensures adequate competition and fair and consistent 
        treatment of offerors; and
          ``(4) requires appraisal of assets by an independent 
        appraiser.
``Sec. 53723. Payments by Secretary and issuance of obligations
  ``(a) Cash Payment.--Amounts required to be paid by the Secretary 
under section 53721 or 53722 of this title shall be paid in cash.
  ``(b) Issuance of Obligations.--If amounts in the appropriate account 
under section 53717 of this title are not sufficient to make a payment 
required under section 53721 or 53722 of this title, the Secretary may 
issue obligations to the Secretary of the Treasury. The Secretary, with 
the approval of the Secretary of the Treasury, shall prescribe the 
form, denomination, maturity, and other terms (except the interest 
rate) of the obligations. The Secretary of the Treasury shall set the 
interest rate for the obligations, considering the current average 
market yield on outstanding marketable obligations of the United States 
Government of comparable maturities during the month before the 
obligations are issued.
  ``(c) Purchase of Obligations.--The Secretary of the Treasury shall 
purchase the obligations issued under this section. To purchase the 
obligations, the Secretary of the Treasury may use as a public debt 
transaction the proceeds from the sale of securities issued under 
chapter 31 of title 31. The purposes for which securities may be issued 
under that chapter are extended to include the purchase of obligations 
under this subsection. The Secretary of the Treasury may sell 
obligations purchased under this section. A redemption, purchase, or 
sale of the obligations by the Secretary of the Treasury is a public 
debt transaction of the Government.
  ``(d) Deposits and Redemptions.--The Secretary shall deposit amounts 
borrowed under this section in the appropriate account under section 
53717 of this title and make redemptions of the obligations from that 
account.
``Sec. 53724. Rights to secured property
  ``(a) Acquisition of Security Rights.--When the Secretary makes a 
payment on, or assumes, an obligation under section 53721 or 53722 of 
this title, the Secretary acquires the rights under the security 
agreement with the obligor in the security held by the Secretary to 
guarantee the obligation.
  ``(b) Use and Disposition of Secured Property.--Notwithstanding any 
other law on the acquisition, handling, or disposal of property by the 
United States Government, the Secretary may complete, reconstruct, 
recondition, renovate, repair, maintain, operate, charter, or sell any 
property acquired under a security agreement with an obligor, or may 
place a vessel so acquired in the National Defense Reserve Fleet. The 
terms of a sale under this subsection shall be as approved by the 
Secretary.
``Sec. 53725. Actions against obligor
  ``(a) In General.--For a default under a guaranteed obligation or 
related agreement, the Secretary may take any action against the 
obligor or another liable party that the Secretary considers necessary 
to protect the interests of the United States Government. A civil 
action may be brought in the name of the Government or the obligee. The 
obligee shall make available to the Government all records and evidence 
necessary to prosecute the action.
  ``(b) Title, Possession, and Purchase.--
          ``(1) In general.--The Secretary may--
                  ``(A) accept a conveyance of title to and possession 
                of property from the obligor or another party liable to 
                the Secretary; and
                  ``(B) purchase the property for an amount not greater 
                than the unpaid principal amount of the obligation and 
                interest thereon.
          ``(2) Payment of excess.--If, through the sale of property, 
        the Secretary receives an amount of cash greater than the 
        unpaid principal amount of the obligation, the unpaid interest 
        on the obligation, and the expenses of collecting those 
        amounts, the Secretary shall pay the excess to the obligor.

                 ``SUBCHAPTER III--PARTICULAR PROJECTS

``Sec. 53731. Commercial demonstration ocean thermal energy conversion 
                    facilities and plantships
  ``(a) In General.--Under subchapter I of this chapter, the Secretary 
may guarantee or make a commitment to guarantee the payment of the 
principal of and interest on an obligation that aids in financing 
(including reimbursement of an obligor for expenditures previously made 
for) the construction, reconstruction, or reconditioning of a 
commercial demonstration ocean thermal energy conversion facility or 
plantship. This section may be used to guarantee obligations for a 
total of not more than 5 separate facilities and plantships or a 
demonstrated 400 megawatt capacity, whichever comes first.
  ``(b) Applicability of Other Provisions.--Except as otherwise 
provided in this section, a guarantee or commitment to guarantee under 
this section is subject to all the provisions applicable to a guarantee 
or commitment to guarantee under subchapter I of this chapter.
  ``(c) Economic Soundness.--The required determination of economic 
soundness under section 53708 of this title applies to a guarantee or 
commitment to guarantee for that portion of a facility or plantship not 
to be supported with appropriated Federal funds.
  ``(d) Reasonableness of Risk.--A guarantee or commitment to guarantee 
may not be made under this section unless the Secretary of Energy, in 
consultation with the Secretary, certifies to the Secretary that, for 
the facility or plantship for which the guarantee or commitment to 
guarantee is sought, there is sufficient guarantee of performance and 
payment to lower the risk to the United States Government to a 
reasonable level. In deciding whether to issue such a certification, 
the Secretary of Energy shall consider--
          ``(1) the successful demonstration of the technology to be 
        used in the facility at a scale sufficient to establish the 
        likelihood of technical and economic viability in the proposed 
        market; and
          ``(2) the need of the United States to develop new and 
        renewable sources of energy and the benefits to be realized 
        from the construction and successful operation of the facility 
        or plantship.
  ``(e) Amount of Obligation.--The total principal amount of an 
obligation guaranteed under this section may not exceed 87.5 percent 
of--
          ``(1) the actual cost or depreciated actual cost of the 
        facility or plantship; or
          ``(2) if the facility or plantship is supported with 
        appropriated Federal funds, the total principal amount of that 
        portion of the actual cost or depreciated actual cost for which 
        the obligor is obligated to secure financing under the 
        agreement between the obligor and the Department of Energy or 
        other Federal agency.
  ``(f) OTEC Demonstration Fund.--
          ``(1) In general.--There is a special subaccount, known as 
        the OTEC Demonstration Fund, in the account established under 
        section 53717(a)(1) of this title.
          ``(2) Use and operation.--The OTEC Demonstration Fund shall 
        be used for obligation guarantees authorized under this section 
        that do not qualify under subchapter I of this chapter. Except 
        as otherwise provided in this section, the OTEC Demonstration 
        Fund shall be operated in the same manner as the parent 
        account. However--
                  ``(A) amounts received by the Secretary under 
                subchapter I of this chapter related to guarantees or 
                commitments to guarantee made under this section shall 
                be deposited only in the OTEC Demonstration Fund; and
                  ``(B) when obligations issued by the Secretary under 
                section 53723 of this title related to the OTEC 
                Demonstration Fund are outstanding, any amount received 
                by the Secretary under subchapter I of this chapter 
                related to ocean thermal energy conversion facilities 
                or plantships shall be deposited in the OTEC 
                Demonstration Fund.
          ``(3) Transfers.--Assets in the OTEC Demonstration Fund may 
        be transferred to the parent account when and to the extent the 
        balance in the OTEC Demonstration Fund exceeds the total 
        guarantees or commitments to guarantee made under this section 
        then outstanding, plus obligations issued by the Secretary 
        under section 53723 of this title related to the OTEC 
        Demonstration Fund.
          ``(4) Liability.--The parent account is not liable for a 
        guarantee or commitment to guarantee made under this section.
          ``(5) Maximum unpaid principal amount.--The total unpaid 
        principal amount of the obligations guaranteed with the backing 
        of the OTEC Demonstration Fund and outstanding at any one time 
        may not exceed $1,650,000,000.
  ``(g) Issuance and Payment of Obligations.--Section 53723 of this 
title applies to the OTEC Demonstration Fund. However, obligations 
issued by the Secretary under that section related to the OTEC 
Demonstration Fund shall be payable only from proceeds realized by the 
OTEC Demonstration Fund.
  ``(h) Taxation of Interest.--Interest on an obligation guaranteed 
under this section shall be included in gross income under chapter 1 of 
the Internal Revenue Code of 1986 (26 U.S.C. ch. 1).
``Sec. 53732. Eligible export vessels
  ``(a) Applicable Terms.--The Secretary may guarantee an obligation 
for an eligible export vessel in accordance with--
          ``(1) the terms applicable under this chapter for vessels 
        documented under the laws of the United States; or
          ``(2) other terms the Secretary determines are more favorable 
        than those terms and compatible with export credit terms 
        offered by foreign governments for the sale of vessels built in 
        foreign shipyards.
  ``(b) Interagency Council.--
          ``(1) Establishment.--There is an interagency council to 
        carry out this section.
          ``(2) Composition.--The council is composed of the following 
        individuals or their designees:
                  ``(A) The Secretary of Transportation, who is the 
                chairman of the council.
                  ``(B) The Secretary of the Treasury.
                  ``(C) The Secretary of State.
                  ``(D) The Assistant to the President for Economic 
                Policy.
                  ``(E) The United States Trade Representative.
                  ``(F) The President and Chairman of the Export-Import 
                Bank of the United States.
          ``(3) Functions.--The council shall--
                  ``(A) obtain information on shipbuilding loan 
                guarantees, direct and indirect subsidies, and other 
                favorable treatment of shipyards provided by foreign 
                governments to shipyards in competition with United 
                States shipyards;
                  ``(B) consult regularly with United States 
                shipbuilders to obtain the essential information about 
                international shipbuilding competition on which to set 
                terms for loan guarantees under subsection (a)(2); and
                  ``(C) provide guidance to the Secretary in 
                establishing terms for loan guarantees under subsection 
                (a)(2).
          ``(4) Annual report.--Not later than January 31 of each year, 
        the Secretary shall submit to Congress a report on activities 
        of the Secretary under this section during the preceding year. 
        The report shall include--
                  ``(A) documentation of sources of information about 
                assistance by governments of other countries to 
                shipyards in those countries; and
                  ``(B) a summary of recommendations made to the 
                Secretary during the preceding year about applications 
                submitted to the Secretary during that year for loan 
                guarantees to construct eligible export vessels.
  ``(c) Required Findings.--
          ``(1) Benefit to shipbuilding industry.--The Secretary may 
        not guarantee or make a commitment to guarantee an obligation 
        for an eligible export vessel unless the Secretary finds that 
        the construction, reconstruction, or reconditioning of the 
        vessel will aid in the transition of United States shipyards to 
        commercial activities or will preserve shipbuilding assets that 
        would be essential in time of war or national emergency.
          ``(2) Priority of documented vessels.--The Secretary may not 
        make a commitment to guarantee an obligation for an eligible 
        export vessel unless the Secretary determines that making the 
        commitment will not result in denial of an economically sound 
        application for a commitment to guarantee an obligation for a 
        vessel documented under the laws of the United States and 
        operating in the domestic or foreign commerce of the United 
        States. The Secretary has sole discretion in making the 
        determination. In making the determination, the Secretary shall 
        consider--
                  ``(A) the status and economic soundness of pending 
                applications for commitments to guarantee obligations 
                for vessels documented under the laws of the United 
                States that are operating or will be operating in the 
                domestic or foreign commerce of the United States; and
                  ``(B) the amount of guarantee authority available.
  ``(d) Restriction on Transfer of Vessel.--The Secretary may not 
guarantee or make a commitment to guarantee an obligation for an 
eligible export vessel unless the owner of the vessel agrees with the 
Secretary that the vessel will not be transferred to a country 
designated by the Secretary of Defense as a country whose interests are 
hostile to the interests of the United States.
  ``(e) Review by Secretary of Defense.--
          ``(1) Notification.--The Secretary shall promptly notify the 
        Secretary of Defense of the receipt of an application for a 
        loan guarantee for an eligible export vessel.
          ``(2) Disapproval.--The Secretary of Defense, within 30 days 
        after receiving the notice, may disapprove the guarantee based 
        on an assessment of the potential use of the vessel in a manner 
        that may harm the national security interests of the United 
        States. The Secretary may not disapprove a guarantee solely 
        because of the type of vessel to be constructed.
          ``(3) Delegation.--The authority of the Secretary of Defense 
        to disapprove a guarantee under this subsection may be 
        delegated only to a civilian officer of the Department of 
        Defense appointed by the President by and with the advice and 
        consent of the Senate.
          ``(4) Prohibition.--The Secretary may not make a loan 
        guarantee disapproved by the Secretary of Defense under this 
        subsection.
  ``(f) Expiration of Authority.--The Secretary may not issue a 
commitment to guarantee an obligation for an eligible export vessel 
under this chapter after the last date on which such a commitment may 
be issued under any treaty or convention entered into after November 
30, 1993, that prohibits guarantee of such an obligation.
``Sec. 53733. Shipyard modernization and improvement
  ``(a) Definitions.--In this section:
          ``(1) Advanced shipbuilding technology.--The term `advanced 
        shipbuilding technology' includes--
                  ``(A) numerically controlled machine tools, robots, 
                automated process control equipment, computerized 
                flexible manufacturing systems, associated computer 
                software, and other technology for improving 
                shipbuilding and related industrial production that 
                advance the state-of-the-art; and
                  ``(B) novel techniques and processes designed to 
                improve shipbuilding quality, productivity, and 
                practice, and to promote sustainable development, 
                including engineering design, quality assurance, 
                concurrent engineering, continuous process production 
                technology, energy efficiency, waste minimization, 
                design for recyclability or parts reuse, inventory 
                management, upgraded worker skills, and communications 
                with customers and suppliers.
          ``(2) General shipyard facility.--The term `general shipyard 
        facility' means--
                  ``(A) for operations on land--
                          ``(i) a structure or appurtenance thereto 
                        designed for the construction, reconstruction, 
                        repair, rehabilitation, or refurbishment of a 
                        vessel, including a graving dock, building way, 
                        ship lift, wharf, or pier crane;
                          ``(ii) the land necessary for the structure 
                        or appurtenance; and
                          ``(iii) equipment that is for use with the 
                        structure or appurtenance and that is necessary 
                        for performing a function referred to in 
                        subclause (i); and
                  ``(B) for operations not on land, a vessel, floating 
                drydock, or barge built in the United States and used 
                for, equipped to be used for, or of a type normally 
                used for, performing a function referred to in 
                subclause (A)(i).
          ``(3) Modern shipbuilding technology.--The term `modern 
        shipbuilding technology' means the best available proven 
        technology, techniques, and processes appropriate to enhancing 
        the productivity of shipyards.
  ``(b) General Authority.--Under subchapter I of this chapter, the 
Secretary may guarantee or make a commitment to guarantee the payment 
of the principal of and interest on an obligation for advanced 
shipbuilding technology and modern shipbuilding technology of a general 
shipyard facility in the United States. Only a private shipyard is 
eligible to receive a guarantee.
  ``(c) Applicability of Other Provisions.--Except as otherwise 
provided in this section, a guarantee or commitment to guarantee under 
this section is subject to all the provisions applicable to a guarantee 
or commitment to guarantee under subchapter I of this chapter.
  ``(d) Amount of Obligation.--The principal amount of an obligation 
guaranteed under this chapter may not exceed 87.5 percent of the actual 
cost of the advanced shipbuilding technology or modern shipbuilding 
technology.
  ``(e) Transfer of Amounts.--The Secretary may accept the transfer of 
amounts from a department, agency, or instrumentality of the United 
States Government and may use those amounts to cover the cost (as 
defined in section 502 of the Federal Credit Reform Act of 1990 (2 
U.S.C. 661a)) of making guarantees or commitments to guarantee under 
this section.
``Sec. 53734. Replacement of vessels because of changes in operating 
                    standards
  ``(a) General Authority.--Notwithstanding any other provision of this 
chapter, the Secretary, on terms the Secretary may prescribe, may 
guarantee or make a commitment to guarantee the payment of the 
principal of and interest on an obligation that aids in financing or 
refinancing (including reimbursement of an obligor for expenditures 
previously made for) a contract for the construction or reconstruction 
of a vessel if--
          ``(1) the vessel is designed and to be used for commercial 
        use in coastwise, intercoastal, or foreign trade;
          ``(2) the construction or reconstruction is necessary to 
        replace a vessel that cannot continue to be operated because of 
        a change required by law in the standards for the operation of 
        vessels, and the applicant for the guarantee or commitment 
        would not otherwise legally be able to continue operating 
        vessels in the trades in which the applicant operated vessels 
        before the change;
          ``(3) the applicant is presently engaged in transporting 
        cargoes in vessels of the type and class that will be 
        constructed or reconstructed under this section and agrees to 
        employ vessels constructed or reconstructed under this section 
        as replacements only for vessels made obsolete by the change in 
        operating standards;
          ``(4) the capacity of the vessels to be constructed or 
        reconstructed under this section will not increase the cargo 
        carrying capacity of the vessels being replaced;
          ``(5) the Secretary has not determined that the market demand 
        for the vessel over its useful life will diminish so as to make 
        granting the guarantee fiduciarily imprudent;
          ``(6) the vessel, if to be reconstructed, will have a useful 
        life of at least 15 years after the reconstruction; and
          ``(7) the Secretary has considered the criteria specified in 
        section 53708(a)(3)-(5) of this title.
  ``(b) Term and Amount of Obligation.--
          ``(1) Term.--The term of an obligation guaranteed under this 
        section may not exceed 25 years.
          ``(2) Amount.--The amount of an obligation guaranteed under 
        this section may not exceed 87.5 percent of the actual cost or 
        depreciated actual cost to the applicant for the construction 
        or reconstruction of the vessel. The Secretary may not 
        establish a percentage under this paragraph that is to be 
        applied uniformly to all guarantees or commitments to guarantee 
        made under this section.
  ``(c) Applicability of Other Provisions.--
          ``(1) In general.--A guarantee or commitment to guarantee 
        under this section is also subject to sections 53701, 53702(a), 
        53704, 53705, 53707(a), 53708(d) and (e), 53709(a), 
        53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714, 
        53717, and 53721-53725 of this title.
          ``(2) Liability of certain accounts.--The account under 
        section 53717 of this title is not liable for a guarantee or 
        commitment to guarantee made under this section.
  ``(d) Security Against Default.--The Secretary shall require by 
regulation that an applicant under this section provide adequate 
security against default.
  ``(e) Guarantee Fees.--The Secretary may establish a fee for the 
guarantee of an obligation under this section that is in addition to 
the fee established under section 53714 of this title. The fee may be--
          ``(1) an annual fee of not more than an additional 1 percent 
        added to the fee established under section 53714 of this title; 
        or
          ``(2) a fee based on the amount of the obligation versus the 
        percentage of the obligor's fleet being replaced by vessels 
        constructed or reconstructed under this section.
  ``(f) Vessel Replacement Guarantee Fund.--
          ``(1) In general.--The Secretary may establish a Vessel 
        Replacement Guarantee Fund as a subaccount in the account 
        established under section 53717(a)(1) of this title.
          ``(2) Deposits.--The Secretary shall deposit in the Fund--
                  ``(A) amounts received by the Secretary under 
                subchapter I of this chapter (except sections 53715 and 
                53716) related to guarantees or commitments to 
                guarantee made under this section;
                  ``(B) amounts received by the Secretary under 
                subchapter I of this chapter (except sections 53715 and 
                53716) from applicants under this section when 
                obligations issued by the Secretary under section 53723 
                of this title related to the Fund are outstanding; and
                  ``(C) fees collected under subsection (e).
          ``(3) Deposit of administrative fees.--Fees payable under 
        section 53713 of this title shall be deposited in the account 
        established under section 53717(a)(1) of this title and not in 
        the Fund.
          ``(4) Liability.--The account established under section 
        53717(a)(1) of this title is not liable for a guarantee or 
        commitment to guarantee made under this section.
``Sec. 53735. Fisheries financing and capacity reduction
  ``(a) Definition.--In this section, the term `program' means a 
fishing capacity reduction program established under section 312 of the 
Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 
1861a).
  ``(b) Guarantee Authority.--The Secretary may guarantee the repayment 
of debt obligations issued by entities under this section. Debt 
obligations to be guaranteed may be issued by any entity that has been 
approved by the Secretary and has agreed with the Secretary to 
conditions the Secretary considers necessary for this section to 
achieve the objective of the program and to protect the interest of the 
United States.
  ``(c) Requirements of Obligations.--A debt obligation guaranteed 
under this section shall--
          ``(1) be treated in the same manner and to the same extent as 
        other obligations guaranteed under this chapter, except with 
        respect to provisions of this chapter that by their nature 
        cannot be applied to obligations guaranteed under this section;
          ``(2) have the fishing fees established under the program 
        paid into a separate subaccount of the fishing capacity 
        reduction fund established under this section;
          ``(3) not exceed $100,000,000 in an unpaid principal amount 
        outstanding at any one time for a program;
          ``(4) have such maturity (not to exceed 20 years), take such 
        form, and contain such conditions as the Secretary determines 
        necessary for the program to which they relate;
          ``(5) have as the exclusive source of repayment (subject to 
        the second sentence of subsection (d)(2)) and as the exclusive 
        payment security, the fishing fees established under the 
        program; and
          ``(6) at the discretion of the Secretary be issued in the 
        public market or sold to the Federal Financing Bank.
  ``(d) Fishing Capacity Reduction Fund.--
          ``(1) In general.--There is a separate account in the 
        Treasury, known as the Fishing Capacity Reduction Fund. Within 
        the Fund, at least one subaccount shall be established for each 
        program into which shall be paid all fishing fees established 
        under the program and other amounts authorized for the program.
          ``(2) Availability of amounts.--Amounts in the Fund shall be 
        available, without appropriation or fiscal year limitation, to 
        the Secretary to pay the cost of the program, including 
        payments to financial institutions to pay debt obligations 
        incurred by entities under this section. Funds available for 
        this purpose from other amounts available for the program may 
        also be used to pay those debt obligations.
          ``(3) Investment.--Amounts in the Fund that are not currently 
        needed for the purpose of this section shall be kept on deposit 
        or invested in obligations of the United States Government.
  ``(e) Regulations.--The Secretary shall prescribe regulations the 
Secretary considers necessary to carry out this section.

                   ``CHAPTER 539--WAR RISK INSURANCE

``Sec.
``53901.  Definitions.
``53902.  Authority to provide insurance.
``53903.  Insurable interests.
``53904.  Liability insurance for persons involved in war or defense 
          efforts.
``53905.  Agency insurance.
``53906.  Hull insurance valuation.
``53907.  Reinsurance.
``53908.  Additional insurance privately obtained.
``53909.  War risk insurance revolving fund.
``53910.  Administrative.
``53911.  Civil actions for losses.
``53912.  Expiration date.
``Sec. 53901. Definitions
  ``In this chapter:
          ``(1) American vessel.--The term `American vessel' includes--
                  ``(A) a documented vessel with a registry or 
                coastwise endorsement under chapter 121 of this title;
                  ``(B) an undocumented vessel owned or chartered by or 
                made available to the United States Government; and
                  ``(C) a tug, barge, or other watercraft (whether or 
                not documented) owned by a citizen of the United States 
                and used in essential water transportation or in the 
                fisheries, except only for sport fishing.
          ``(2) Cargo.--The term `cargo' includes a loaded or empty 
        container on a vessel.
          ``(3) Transportation in the waterborne commerce of the united 
        states.--The term `transportation in the waterborne commerce of 
        the United States' includes the operation of a vessel in the 
        fisheries, except only for sport fishing.
          ``(4) War risks.--The term `war risks' includes, to the 
        extent the Secretary of Transportation determines--
                  ``(A) any part of a loss excluded from marine 
                insurance coverage under a `free of capture or seizure' 
                clause or analogous clause; and
                  ``(B) any other loss from a hostile act, including 
                confiscation, expropriation, nationalization, or 
                deprivation.
``Sec. 53902. Authority to provide insurance
  ``(a) In General.--With the approval of the President, and after such 
consultation with interested agencies of United States Government as 
the President may require, the Secretary of Transportation may provide 
insurance and reinsurance against loss or damage from war risks as 
provided by this chapter whenever it appears to the Secretary that 
insurance adequate for the needs of the waterborne commerce of the 
United States cannot be obtained on reasonable terms and conditions 
from companies authorized to do insurance business in a State of the 
United States.
  ``(b) Consideration of Risk.--Insurance or reinsurance under this 
chapter shall be based, insofar as practicable, on consideration of the 
risk involved.
  ``(c) Availability of Vessel During War or National Emergency.--
Insurance or reinsurance for a vessel may be provided under this 
chapter only on the condition that the vessel will be available to the 
Government in time of war or national emergency.
``Sec. 53903. Insurable interests
  ``(a) In General.--The Secretary of Transportation may provide 
insurance and reinsurance under this chapter for--
          ``(1) an American vessel, including a vessel under 
        construction;
          ``(2) a foreign vessel--
                  ``(A) owned by a citizen of the United States; or
                  ``(B) engaged in transportation in the waterborne 
                commerce of the United States or in such other 
                transportation by water or such other services as the 
                Secretary considers to be in the interest of the 
                national defense or national economy of the United 
                States, when so engaged;
          ``(3) cargo--
                  ``(A) shipped or to be shipped on a vessel insurable 
                under this section, including by express or registered 
                mail;
                  ``(B) owned by a citizen or resident of the United 
                States;
                  ``(C) imported to or exported from the United States, 
                or sold or purchased by a citizen or resident of the 
                United States, under a contract of sale or purchase the 
                terms of which provide that the risk of loss by war 
                risks or the obligation to provide insurance against 
                war risks is on a citizen or resident of the United 
                States; or
                  ``(D) shipped between ports in the United States;
          ``(4) disbursements, including advances to masters and 
        general average disbursements, and freight and passage money of 
        a vessel insurable under this section;
          ``(5) personal effects of an individual on a vessel insurable 
        under this section;
          ``(6) loss of life, injury, or detention by an enemy of the 
        United States after capture, with respect to an individual on a 
        vessel insurable under this section; and
          ``(7) statutory or contractual obligations or other 
        liabilities of a vessel insurable under this section or of the 
        owner or charterer of such a vessel, of a nature customarily 
        covered by insurance.
  ``(b) Considerations for Foreign Vessels.--In determining whether to 
provide insurance or reinsurance for a foreign vessel, the Secretary 
shall consider the characteristics, employment, and general management 
of the vessel by the owner or charterer.
  ``(c) Non-War Risks.--Insurance of a risk under subsection (a)(5)-
(7), insofar as it involves a liability related to an individual on the 
vessel, may include risks other than war risks to the extent the 
Secretary considers advisable.
``Sec. 53904. Liability insurance for persons involved in war or 
                    defense efforts
  ``(a) In General.--The Secretary of Transportation may provide 
insurance under this chapter against legal liability that a person may 
incur in providing services or facilities for a vessel if, in the 
opinion of the Secretary, the insurance--
          ``(1) is required in prosecuting a war or for national 
        defense; and
          ``(2) cannot be obtained at reasonable rates or on reasonable 
        terms and conditions from approved companies authorized to do 
        insurance business in a State of the United States.
  ``(b) Limitations.--Employer liability insurance and worker 
compensation insurance against legal liability to employees may not be 
provided under this section.
``Sec. 53905. Agency insurance
  ``(a) In General.--With the approval of the President, an agency of 
the United States Government may obtain insurance provided for by this 
chapter from the Secretary of Transportation, except as provided in 
sections 17302 and 17303 of title 40.
  ``(b) Premium Waivers.--With the approval of the President, the 
Secretary of Transportation may provide insurance under this chapter at 
the request of the Secretary of Defense and other agencies the 
President may prescribe, without payment of an insurance premium if the 
Secretary of Defense or agency agrees to indemnify the Secretary of 
Transportation against loss covered by the insurance. The Secretary of 
Defense and agencies may make such an indemnity agreement.
  ``(c) Presidential Approval.--The signature of the President (or an 
official designated by the President) on the agreement shall be treated 
as the approval required by section 53902(a) of this title.
``Sec. 53906. Hull insurance valuation
  ``(a) Stated Valuation.--The valuation in a hull insurance policy for 
actual or constructive total loss of the insured vessel shall be a 
stated valuation determined by the Secretary of Transportation. The 
stated valuation--
          ``(1) shall exclude national defense features paid for by the 
        United States Government; and
          ``(2) may not exceed the amount that would be payable if the 
        ownership of the vessel had been requisitioned under chapter 
        563 of this title at the time the insurance attached under the 
        policy.
  ``(b) Rejecting Stated Valuation.--Within 60 days after the insurance 
attaches under a policy referred to in subsection (a) or within 60 days 
after the Secretary determines the valuation, whichever is later, the 
insured may reject the valuation and pay, at the rate provided in the 
policy, premiums based on the asserted valuation the insured specifies 
at the time of rejection. However, the asserted valuation is not 
binding on the Government in any subsequent action on the policy.
  ``(c) Amount of Claim.--If a vessel is actually or constructively 
totally lost and the insured under a policy referred to in subsection 
(a) has not rejected the stated valuation determined by the Secretary, 
the amount of a claim adjusted, compromised, settled, adjudged, or paid 
may not exceed the stated valuation. However, if the insured has 
rejected the valuation, the insured--
          ``(1) shall be paid, as a tentative advance only, 75 percent 
        of the stated valuation; and
          ``(2) may bring a civil action against the Government in a 
        court having jurisdiction of the claim to recover a valuation 
        equal to the just compensation the court determines would have 
        been payable if the ownership of the vessel had been 
        requisitioned under chapter 563 of this title at the time the 
        insurance attached under the policy.
  ``(d) Adjusting Premiums.--If a court makes a determination as 
provided under subsection (c)(2), premiums paid under the policy shall 
be adjusted based on the court's determination and the rates provided 
for in the policy.
``Sec. 53907. Reinsurance
  ``(a) In General.--To the extent the Secretary of Transportation is 
authorized to provide insurance under this chapter, the Secretary may 
provide reinsurance to a company authorized to do insurance business in 
a Stateof the United States. The Secretary may obtain reinsurance from 
such a company for any insurance provided by the Secretary under this 
chapter.
  ``(b) Rates.--The Secretary may not provide reinsurance at rates less 
than, nor obtain reinsurance at rates more than, the rates established 
by the Secretary on the same or similar risks or the rates charged by 
the insurance company for the insurance reinsured, whichever is more 
advantageous to the Secretary. However, the Secretary may provide an 
allowance to the insurance company for the costs of services and 
facilities the company provides, in an amount the Secretary considers 
reasonable according to good business practice. The allowance to the 
company may not include any amount for soliciting or stimulating 
insurance business.
``Sec. 53908. Additional insurance privately obtained
  ``With the approval of the Secretary of Transportation, a person 
having an insurable interest in a vessel may obtain insurance on the 
vessel with other underwriting agents in addition to the insurance with 
the Secretary. The Secretary is not entitled to the benefit of the 
additional insurance.
``Sec. 53909. War risk insurance revolving fund
  ``(a) In General.--There is a war risk insurance revolving fund in 
the Treasury.
  ``(b) Deposits.--There shall be deposited in the fund amounts 
appropriated to carry out this chapter and amounts received in carrying 
out this chapter.
  ``(c) Payments.--There shall be paid from the fund amounts for return 
premiums, losses, settlements, judgments, and all liabilities incurred 
by the United States Government under this chapter.
  ``(d) Investment.--On request of the Secretary of Transportation, the 
Secretary of the Treasury may invest or reinvest any part of the fund 
in securities of the Government or securities whose principal and 
interest are guaranteed by the Government. Interest and benefits from 
the securities shall be deposited in the fund.
``Sec. 53910. Administrative
  ``(a) Accordance With Commercial Practice.--In carrying out this 
chapter, the Secretary of Transportation may act in accordance with 
commercial practice in the marine insurance business.
  ``(b) Regulations.--The Secretary may prescribe regulations the 
Secretary considers appropriate to carry out this chapter.
  ``(c) Policies, Rates, and Annual Fees.--The Secretary may prescribe 
and change forms and policies, and fix and change the amounts insured 
and rates of premium, under this chapter.
  ``(d) Annual Fees.--The Secretary may charge and collect an annual 
fee in an amount calculated to cover the expenses of processing 
applications for insurance, employing underwriting agents, and 
appointing experts under this chapter.
  ``(e) Payment of Claims and Judgments.--The Secretary may settle and 
pay claims, and pay judgments against the United States Government, 
related to insurance under this chapter.
  ``(f) Underwriting Agents.--
          ``(1) In general.--The Secretary may, and when the Secretary 
        finds it practical to do so shall, employ a domestic company or 
        group of domestic companies, authorized to do marine insurance 
        business in a State of the United States, to act as 
        underwriting agent for the Secretary. The services of an 
        underwriting agent may be used in adjusting claims, but a claim 
        may not be paid until approved by the Secretary.
          ``(2) Compensation.--The Secretary may allow the company or 
        group of companies reasonable compensation for services as the 
        underwriting agent. The compensation may include an allowance 
        for expenses reasonably incurred by the agent, but may not 
        include any amount for soliciting or stimulating business.
  ``(g) Fees For Arranging Insurance.--Except as provided in subsection 
(f)(2), the Secretary may not pay an insurance broker or other person 
acting in a similar intermediary capacity a fee or other consideration 
for participating in arranging insurance when the Secretary directly 
insures any of the risk.
  ``(h) Employment of Marine Insurance Experts.--The Secretary, without 
regard to the laws and regulations on the employment of Federal 
employees, may appoint and prescribe the duties of experts in marine 
insurance as the Secretary considers necessary to carry out this 
chapter.
  ``(i) Services of Other Government Agencies.--With the consent of 
another Government agency, the Secretary may use information, services, 
facilities, officers, and employees of the agency in carrying out this 
chapter.
  ``(j) Vessel Location Reporting.--The Secretary may prescribe by 
regulation vessel location reporting requirements for a vessel insured 
under this chapter.
``Sec. 53911. Civil actions for losses
  ``(a) In General.--If there is a disagreement about a loss insured 
under this chapter, a civil action in admiralty may be brought against 
the United States Government in the district court of the United States 
for the district in which the plaintiff or the plaintiff's agent 
resides. If the plaintiff has no residence in the United States, the 
action may be brought in the United States District Court for the 
District of Columbia or in the district court for any district in which 
the Attorney General agrees to accept service. Any person who may have 
an interest in the insurance may be made a party, either initially or 
on the motion of either party.
  ``(b) Exclusive Remedy.--A civil action against the Government under 
this section is exclusive of any other action by reason of the same 
subject matter against an officer, employee, or agent employed or 
retained by the Government under this chapter.
  ``(c) Procedure.--A civil action under this section shall be heard 
and determined under chapter 309 of this title.
  ``(d) Tolling of Limitations Period.--If a claim is filed with the 
Secretary of Transportation, the running of the limitations period for 
bringing a civil action is suspended until the Secretary denies the 
claim, and for 60 days thereafter. The Secretary is deemed to have 
denied the claim if the Secretary does not act on the claim within 6 
months after the claim is filed, unless the Secretary for good cause 
shown agrees with the claimant on a different period for the Secretary 
to act on the claim.
  ``(e) Interpleader.--If the Secretary acknowledges the indebtedness 
of the Government under the insurance and there is a dispute about the 
persons entitled to receive payment, the Government may bring a civil 
action interpleading those persons. The action shall be brought in the 
United States District Court for the District of Columbia or in the 
district court for the district in which any of those persons resides. 
A person not residing or found in the district may be made a party by 
service in any reasonable manner the court directs. If the court is 
satisfied that unknown persons might make a claim under the insurance, 
the court may direct service on those unknown persons by publication in 
the Federal Register. Judgment after service by publication in the 
Federal Register discharges the Government from further liability to 
all persons.
``Sec. 53912. Expiration date
  ``The authority of the Secretary of Transportation to provide 
insurance and reinsurance under this chapter expires on June 30, 2005.

                     ``Part D--Promotional Programs

                     ``CHAPTER 551--COASTWISE TRADE

``Sec.
``55101.  Application of coastwise laws.
``55102.  Transportation of merchandise.
``55103.  Transportation of passengers.
``55104.  Transportation of passengers between Puerto Rico and other 
          ports in the United States.
``55105.  Transportation of hazardous waste.
``55106.  Merchandise transferred between barges.
``55107.  Empty cargo containers and barges.
``55108.  Platform jackets.
``55109.  Dredging.
``55110.  Transportation of dredged material.
``55111.  Towing.
``55112.  Vessel escort operations and towing assistance.
``55113.  Use of foreign documented oil spill response vessels.
``55114.  Unloading fish from foreign vessels.
``55115.  Supplies on fish processing vessels.
``55116.  Canadian rail lines.
``55117.  Great Lakes rail route.
``55118.  Foreign railroads whose road enters by ferry, tugboat, or 
          towboat.
``55119.  Yukon River.
``55120.  Transshipment of imported merchandise intended for immediate 
          exportation.
``Sec. 55101. Application of coastwise laws
  ``(a) In General.--Except as provided in subsection (b), the 
coastwise laws apply to the United States, including the island 
territories and possessions of the United States.
  ``(b) Exceptions.--The coastwise laws do not apply to--
          ``(1) the Virgin Islands until the President declares by 
        proclamation that the coastwise laws apply to the Virgin 
        Islands; or
          ``(2) American Samoa.
``Sec. 55102. Transportation of merchandise
  ``(a) Definition.--In this section, the term `merchandise' includes--
          ``(1) merchandise owned by the United States Government, a 
        State, or a subdivision of a State; and
          ``(2) valueless material.
  ``(b) Requirements.--Except as otherwise provided in this chapter or 
chapter 121 of this title, a vessel may not provide any part of the 
transportation of merchandise by water, or by land and water, between 
points in the United States to which the coastwise laws apply, either 
directly or via a foreign port, unless the vessel has been issued a 
certificate of documentation with a coastwise endorsement under chapter 
121.
  ``(c) Penalty.--Merchandise transported in violation of subsection 
(b) is liable to seizure by and forfeiture to the Government. 
Alternatively, an amount equal to the value of the merchandise (as 
determined by the Secretary of Homeland Security) or the actual cost of 
the transportation, whichever is greater, may be recovered from any 
person transporting the merchandise or causing the merchandise to be 
transported.
``Sec. 55103. Transportation of passengers
  ``(a) In General.--Except as otherwise provided in this chapter or 
chapter 121 of this title, a foreign vessel may not transport 
passengers between ports or places in the United States, either 
directly or via a foreign port.
  ``(b) Penalty.--The penalty for violating subsection (a) is $200 for 
each passenger transported and landed.
``Sec. 55104. Transportation of passengers between Puerto Rico and 
                    other ports in the United States
  ``(a) Definitions.--In this section:
          ``(1) Certificate.--The term `certificate' means a 
        certificate of financial responsibility for indemnification of 
        passengers for nonperformance of transportation issued by the 
        Federal Maritime Commission under section 44102 of this title.
          ``(2) Passenger vessel.--The term `passenger vessel' means a 
        vessel of similar size, or offering similar service, as any 
        other vessel transporting passengers under subsection (b).
  ``(b) Exemption.--Except as otherwise provided in this section, a 
vessel not qualified to engage in the coastwise trade may transport 
passengers between a port in Puerto Rico and another port in the United 
States.
  ``(c) Expiration of Exemption.--
          ``(1) When coastwise-qualified vessel offering service.--On a 
        showing to the Secretary of the department in which the Coast 
        Guard is operating, by the vessel owner or charterer, that a 
        United States passenger vessel qualified to engage in the 
        coastwise trade is offering or advertising passenger service 
        between a port in Puerto Rico and another port in the United 
        States pursuant to a certificate, the Secretary shall notify 
        the owner or operator of each vessel transporting passengers 
        under subsection (b) to terminate that transportation within 
        270 days after the Secretary's notification. Except as provided 
        in subsection (d), the authority to transport passengers under 
        subsection (b) expires at the end of that 270-day period.
          ``(2) When non-coastwise-qualified vessel offering service.--
        On a showing to the Secretary, by the vessel owner or 
        charterer, that a United States passenger vessel not qualified 
        to engage in the coastwise trade is offering or advertising 
        passenger service between a port in Puerto Rico and another 
        port in the United States pursuant to a certificate, the 
        Secretary shall notify the owner or operator of each foreign 
        vessel transporting passengers under subsection (b) to 
        terminate that transportation within 270 days after the 
        Secretary's notification. Except as provided in subsection (d), 
        the authority of a foreign vessel to transport passengers under 
        subsection (b) expires at the end of that 270-day period.
  ``(d) Delaying Expiration.--If the vessel offering or advertising the 
service described in subsection (c) has not begun that service within 
270 days after the Secretary's notification, the expiration provided by 
subsection (c) is delayed until 90 days after the vessel offering or 
advertising the service begins that service.
  ``(e) Reinstatement of Exemption.--If the Secretary finds that the 
service on which an expiration was based is no longer available, the 
expired authority to transport passengers is reinstated.
``Sec. 55105. Transportation of hazardous waste
  ``(a) In General.--The transportation of hazardous waste, as defined 
in section 1004(5) of the Resource Conservation and Recovery Act of 
1976 (42 U.S.C. 6903(5)), from a point in the United States to sea for 
incineration is deemed to be transportation of merchandise under 
section 55102 of this title.
  ``(b) Nonapplication to Certain Foreign Vessels.--
          ``(1) In general.--Subsection (a) does not apply to 
        transportation performed by a foreign-flag ocean incineration 
        vessel owned by or under construction on May 1, 1982, for a 
        corporation wholly owned by citizens of the United States under 
        section 50501(a)-(c) of this title.
          ``(2) Standards for incineration equipment.--Incineration 
        equipment on a vessel described in paragraph (1) must meet 
        standards of the Coast Guard and the Environmental Protection 
        Agency.
          ``(3) Inspection.--A vessel described in paragraph (1) shall 
        be inspected by the Coast Guard, regardless of whether 
        inspected by the flag nation. The inspection shall be the same 
        as would be required of a vessel of the United States, 
        including drydock inspection and internal examination of tanks 
        and void spaces. The inspection may be made concurrently with 
        an inspection by the country of documentation or within one 
        year after the initial issuance or next scheduled issuance of 
        the Safety of Life at Sea Safety Construction Certificate. In 
        making the inspection, the Coast Guard shall refer to the 
        condition of the hull and superstructure established by the 
        initial foreign certification as the basis for evaluating the 
        current condition of the hull and superstructure. The Coast 
        Guard shall allow the substitution of fittings, material, 
        apparatus, equipment, and appliances different from those 
        required for vessels of the United States if satisfied they are 
        equivalent and at least as effective as those required for 
        vessels of the United States. A satisfactory inspection under 
        this paragraph shall be certified in writing by the Secretary 
        of the department in which the Coast Guard is operating.
  ``(c) Effective Date.--This section is not effective until an 
appropriate vessel has been built and documented under chapter 121 of 
this title.
``Sec. 55106. Merchandise transferred between barges
  ``(a) In General.--On terms and conditions the Secretary of Homeland 
Security may prescribe by regulation, the Secretary may suspend the 
application of section 55102 of this title to the transportation of 
merchandise that is transferred, when moving in the foreign trade of 
the United States, from a barge certified by the owner or operator as 
designed specifically for carriage on a vessel and carried regularly on 
a vessel in foreign trade, to another such barge owned or leased by the 
same owner or operator. However, this subsection does not apply to 
transportation between the continental United States and noncontiguous 
States, territories, or possessions to which the coastwise laws apply.
  ``(b) Reciprocity Requirement for Foreign Vessels.--This section 
applies to a foreign vessel only if the Secretary of Homeland Security 
finds, based on information from the Secretary of State, that the 
government of the country of documentation extends reciprocal 
privileges to vessels of the United States.
``Sec. 55107. Empty cargo containers and barges
  ``(a) In General.--Subject to subsections (b) and (c), and on terms 
and conditions the Secretary of Homeland Security may prescribe by 
regulation, section 55102 of this title does not apply to the 
transportation of--
          ``(1) empty cargo vans, empty lift vans, or empty shipping 
        tanks;
          ``(2) equipment for use with cargo vans, lift vans, or 
        shipping tanks;
          ``(3) empty barges specifically designed for carriage aboard 
        a vessel and equipment (except propulsion equipment) for use 
        with those barges;
          ``(4) empty instruments for international traffic exempted 
        from the customs laws under section 322(a) of the Tariff Act of 
        1930 (19 U.S.C. 1322(a)); or
          ``(5) stevedoring equipment and material.
  ``(b) Conditions.--
          ``(1) Clauses (1)-(4).--Clauses (1)-(4) of subsection (a) 
        apply only if the items named are owned or leased by the owner 
        or operator of the vessel and transported for use in handling 
        the cargo of that owner or operator in foreign trade.
          ``(2) Clause (5).--Clause (5) of subsection (a) applies only 
        if the items named are--
                  ``(A) owned or leased by the owner or operator of the 
                vessel or by the stevedoring company having the 
                contract for the loading or unloading of the vessel; 
                and
                  ``(B) transported without charge for use in the 
                handling of cargo in foreign trade.
  ``(c) Reciprocity Requirement for Foreign Vessels.--This section 
applies to a foreign vessel only if the Secretary of Homeland Security 
finds, based on information from the Secretary of State, that the 
government of the country of documentation extends reciprocal 
privileges to vessels of the United States.
``Sec. 55108. Platform jackets
  ``(a) Definition.--In this section, the term `platform jacket' 
includes any type of offshore drilling or production structure or 
components, including platform jackets, tension leg or SPAR platform 
superstructures (including the deck, drilling rig and support 
utilities, and supporting structure), hull (including vertical legs and 
connecting pontoons or vertical cylinder), tower and base sections of a 
platform jacket, jacket structures, and deck modules (known as 
`topsides') of a hydrocarbon development and production platform.
  ``(b) Exemption.--Section 55102 of this title does not apply to the 
transportation of a platform jacket in or on a launch barge between 
points in the United States, at one of which there is an installation 
or other device described by section 4(a) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1333(a)), if--
          ``(1) the launch barge has a launch capacity of at least 
        12,000 long tons, was built not later than June 7, 1988, and is 
        documented under chapter 121 of this title; and
          ``(2) the platform jacket cannot be transported on and 
        launched from a launch barge of lesser launch capacity that is 
        on the list published under subsection (c) and is available for 
        the transportation.
  ``(c) List of Launch Barges.--The Secretary of Transportation shall 
publish periodically in the Federal Register a current list of launch 
barges with a capacity of less than 12,000 long tons that are qualified 
to engage in the coastwise trade. For each launch barge, the Secretary 
shall include the name, launch capacity, length, beam, depth, and other 
distinguishing characteristics, and the name and address of the person 
to whom inquiries may be made.
``Sec. 55109. Dredging
  ``(a) In General.--Except as provided in subsection (b), a vessel may 
engage in dredging in the navigable waters of the United States only 
if--
          ``(1) the vessel--
                  ``(A) has been issued a certificate of documentation 
                with a coastwise endorsement under chapter 121 of this 
                title; or
                  ``(B) is less than 5 net tons and is otherwise 
                qualified to engage in the coastwise trade; and
          ``(2) the owner and charterer, if any, are citizens of the 
        United States under section 50501 of this title for purposes of 
        engaging in the coastwise trade.
  ``(b) Dredging of Gold in Alaska.--A documented vessel with a 
registry endorsement may engage in the dredging of gold in Alaska.
  ``(c) Penalty.--If a vessel is operated in knowing violation of this 
section, the vessel and its equipment are liable to seizure by and 
forfeiture to the United States Government.
``Sec. 55110. Transportation of dredged material
  ``Section 55102 of this title applies to the transportation of 
valueless material or dredged material, regardless of whether it has 
commercial value, from a point in the United States or on the high seas 
within the exclusive economic zone, to another point in the United 
States or on the high seas within the exclusive economic zone.
``Sec. 55111. Towing
  ``(a) In General.--A vessel may not do any part of any towing 
described in subsection (b) unless the vessel has been issued a 
certificate of documentation with a coastwise endorsement under chapter 
121 of this title. This prohibition does not apply to the towing of a 
vessel in distress.
  ``(b) Applicable Towing.--Subsection (a) applies to the towing of--
          ``(1) a vessel between ports or places in the United States 
        to which the coastwise laws apply, either directly or via a 
        foreign port or place;
          ``(2) a vessel from point to point within the harbors of 
        ports or places to which the coastwise laws apply; or
          ``(3) a vessel transporting valueless material or dredged 
        material, regardless of whether it has commercial value, from a 
        point in the United States or on the high seas within the 
        exclusive economic zone, to another point in the United States 
        or on the high seas within the exclusive economic zone.
  ``(c) Penalties.--
          ``(1) Owner and master.--The owner and master of a vessel 
        towing another vessel in violation of this section are each 
        liable for a penalty of at least $250 but not more than $1,000. 
        A penalty under this paragraph constitutes a lien on the 
        vessel. The lien is enforceable in a district court of the 
        United States for any district in which the vessel is found. 
        Clearance may not be granted to the vessel until the penalties 
        have been paid.
          ``(2) Vessel.--In addition to the penalties under paragraph 
        (1), the towing vessel is liable for a penalty of $50 per ton 
        based on the tonnage of each towed vessel.
``Sec. 55112. Vessel escort operations and towing assistance
  ``(a) In General.--Except in the case of a vessel in distress, only a 
vessel of the United States may perform the following escort vessel 
operations within the navigable waters of the United States:
          ``(1) Operations that commence or terminate at a port or 
        place in the United States.
          ``(2) Operations required by United States law or regulation.
          ``(3) Operations provided in whole or in part within or 
        through navigation facilities owned, maintained, or operated by 
        the United States Government or the approaches to those 
        facilities, other than facilities operated by the St. Lawrence 
        Seaway Development Corporation on the St. Lawrence River 
        portion of the Seaway.
  ``(b) Escort Vessels.--For purposes of this section, an escort vessel 
is--
          ``(1) any vessel that is assigned and dedicated to assist 
        another vessel, whether or not tethered to that vessel, solely 
        as a safety precaution to assist in controlling the speed or 
        course of the assisted vessel in the event of a steering or 
        propulsion equipment failure, or any other similar emergency 
        circumstance, or in restricted waters where additional 
        assistance in maneuvering the vessel is required to ensure its 
        safe operation; and
          ``(2) in the case of a vessel being towed under section 55111 
        of this title, any vessel that is assigned and dedicated to the 
        vessel being towed in addition to any towing vessel required 
        under that section.
  ``(c) Relationship to Other Law.--This section does not affect 
section 55111 of this title.
  ``(d) Penalty.--A person violating this section is liable to the 
Government for a civil penalty of not more than $10,000 for each day 
during which the violation occurs.
``Sec. 55113. Use of foreign documented oil spill response vessels
  ``Notwithstanding any other provision of law, an oil spill response 
vessel documented under the laws of a foreign country may operate in 
waters of the United States on an emergency and temporary basis, for 
the purpose of recovering, transporting, and unloading in a United 
States port oil discharged as a result of an oil spill in or near those 
waters, if--
          ``(1) an adequate number and type of oil spill response 
        vessels documented under the laws of the United States cannot 
        be engaged to recover oil from an oil spill in or near those 
        waters in a timely manner, as determined by the Federal On-
        Scene Coordinator for a discharge or threat of a discharge of 
        oil; and
          ``(2) the foreign country has by its laws accorded to vessels 
        of the United States the same privileges accorded to vessels of 
        the foreign country under this section.
``Sec. 55114. Unloading fish from foreign vessels
  ``(a) Prohibitions.--Except as otherwise provided by this section or 
a treaty or convention to which the United States Government is a 
party, a foreign vessel may not unload, in a port of the United 
States--
          ``(1) its catch of fish taken on board on the high seas or 
        fish products processed from that catch of fish; or
          ``(2) fish or fish products taken on board that vessel on the 
        high seas from a vessel engaged in fishing operations or the 
        processing of fish or fish products.
  ``(b) Regulations on Obtaining Information.--The Secretary of 
Commerce may prescribe regulations the Secretary considers necessary to 
obtain information on the transportation of fish products by vessels of 
the United States for foreign fish processing vessels to points in the 
United States.
  ``(c) Virgin Islands Exemption.--A foreign vessel of not more than 50 
feet overall in length may unload its catch of fresh fish (whole or 
with the heads, viscera, or fins removed, but not frozen, otherwise 
processed, or further advanced) in a port of the Virgin Islands for 
immediate consumption in those islands. Fish unloaded under this 
subsection may be sold or transferred only for immediate consumption. 
In the absence of satisfactory evidence that a sale or transfer to an 
agent, representative, or employee of a freezer or cannery is for 
immediate consumption, the sale or transfer is deemed not to be for 
immediate consumption. This subsection does not prohibit the freezing, 
smoking, or other processing of fresh fish by the ultimate consumer of 
the fish.
  ``(d) Seizure, Forfeiture, and Penalty.--Fish unloaded in the Virgin 
Islands that are retained, sold, or transferred, except as allowed by 
subsection (c), are liable to seizure by and forfeiture to the 
Government. A person retaining, selling, transferring, buying, or 
receiving the fish is liable to the Government for a civil penalty of 
not more than $1,000 for each violation. A penalty or forfeiture under 
this section may be compromised, modified, or remitted under section 
2107(b) of this title.
``Sec. 55115. Supplies on fish processing vessels
  ``Section 55102 of this title does not apply to supplies aboard a 
United States documented fish processing vessel that are necessary and 
used for processing or assembling fishery products aboard the vessel.
``Sec. 55116. Canadian rail lines
  ``Section 55102 of this title does not apply to the transportation of 
merchandise between points in the continental United States, including 
Alaska, over through routes in part over Canadian rail lines and 
connecting water facilities if the routes have been recognized by the 
Surface Transportation Board and rate tariffs for the routes have been 
filed with the Board.
``Sec. 55117. Great Lakes rail route
  ``Section 55102 of this title does not apply to the transportation of 
merchandise loaded on a railroad car or to a motor vehicle with or 
without a trailer, and with its passengers or contents when accompanied 
by the operator, when the railroad car or motor vehicle is transported 
in a railroad car ferry operated between fixed terminals on the Great 
Lakes as part of a rail route, if--
          ``(1) the car ferry is owned by a common carrier by water and 
        operated as part of a rail route with the approval of the 
        Surface Transportation Board;
          ``(2) the stock of the common carrier by water, or its 
        predecessor, was owned or controlled by a common carrier by 
        rail prior to June 5, 1920;
          ``(3) the stock of the common carrier owning the car ferry 
        is, with the approval of the Board, now owned or controlled by 
        a common carrier by rail; and
          ``(4) the car ferry is built in and documented under the laws 
        of the United States.
``Sec. 55118. Foreign railroads whose road enters by ferry, tugboat, or 
                    towboat
  ``A foreign railroad, whose road enters the United States by ferry, 
tugboat, or towboat, may own and operate a vessel not having a 
coastwise endorsement in connection with the water transportation of 
the passenger, freight, express, baggage, and mail cars used by that 
road, together with the passengers, freight, express matter, baggage, 
and mails transported in those cars. However, the foreign railroad is 
subject to the same restrictions imposed by law on a vessel of the 
United States entering a port of the United States from the same 
foreign country. Except as otherwise authorized by this chapter, the 
ferry, tugboat, or towboat may not, under penalty of forfeiture, be 
used in the transportation of merchandise between ports or places in 
the United States to which the coastwise laws apply.
``Sec. 55119. Yukon River
  ``Section 55102 of this title does not apply to the transportation of 
merchandise on the Yukon River until the Alaska Railroad is completed 
and the Secretary of Transportation finds that proper facilities will 
be available for transportation by citizens of the United States to 
properly handle the traffic.
``Sec. 55120. Transshipment of imported merchandise intended for 
                    immediate exportation
  ``The Secretary of Homeland Security may prescribe regulations for 
the transshipment and transportation of merchandise that is imported 
into the United States by sea for immediate exportation to a foreign 
port by sea, or by a river, the right to ascend or descend which for 
the purposes of commerce is secured by treaty to the citizens of the 
United States and the subjects of a foreign power.

             ``CHAPTER 553--PASSENGER AND CARGO PREFERENCES

                         ``SUBCHAPTER I--GENERAL

``Sec.
``55301.  Priority loading for coal.
``55302.  Transportation of United States Government personnel.
``55303.  Motor vehicles owned by United States Government personnel.
``55304.  Exports financed by the United States Government.
``55305.  Cargoes procured, furnished, or financed by the United States 
          Government.

   ``SUBCHAPTER II--EXPORT TRANSPORTATION OF AGRICULTURAL COMMODITIES

``55311.  Findings and purposes.
``55312.  Determining prevailing world market price.
``55313.  Exemption of certain agricultural exports from cargo 
          preference provisions.
``55314.  Transportation requirements for certain exports sponsored by 
          the Secretary of Agriculture.
``55315.  Minimum tonnage.
``55316.  Financing the transportation of agricultural commodities.
``55317.  Termination of subchapter.
``55318.  Effect on other law.

             ``SUBCHAPTER III--AMERICAN GREAT LAKES VESSELS

``55331.  Definitions.
``55332.  Designating American Great Lakes vessels.
``55333.  Exemption from restriction on transporting certain cargo.
``55334.  Restrictions on operations.
``55335.  Revocations and terminations of designations.
``55336.  Civil penalty.

                        ``SUBCHAPTER I--GENERAL

``Sec. 55301. Priority loading for coal
  ``A vessel engaged in the coastwise transportation of coal produced 
in the United States, from a port in the United States to another port 
in the United States, shall be given priority in loading at any of 
those ports ahead of a waiting vessel engaged in the export 
transportation of coal produced in the United States. However, if the 
Secretary of Transportation finds that it is in the national interest, 
the Secretary may eliminate this priority loading at any port. The 
Secretary shall report to Congress within 30 days an action eliminating 
priority loading under this section.
``Sec. 55302. Transportation of United States Government personnel
  ``(a) In General.--An officer or employee of the United States 
Government traveling by sea on official business overseas or to or from 
a territory or possession of the United States shall travel and 
transport personal effectson a vessel documented under the laws of the 
United Sates if such a vessel is available, unless the necessity of the 
mission requires the use of a foreign vessel.
  ``(b) Regulations.--The Administrator of General Services shall 
prescribe regulations under which agencies may not pay for or reimburse 
an officer or employee for travel or transportation expenses incurred 
on a foreign vessel in the absence of satisfactory proof of the 
necessity of using the vessel.
``Sec. 55303. Motor vehicles owned by United States Government 
                    personnel
  ``Notwithstanding any other law, privately-owned American shipping 
services may be used to transport motor vehicles owned by personnel of 
the United States Government whenever transportation of those vehicles 
at Government expense is otherwise authorized by law.
``Sec. 55304. Exports financed by the United States Government
  ``It is the sense of Congress that any loans made by an 
instrumentality of the United States Government to foster the exporting 
of agricultural or other products shall provide that the products may 
be transported only on vessels of the United States unless, as to any 
or all of those products, the Secretary of Transportation, after 
investigation, certifies to the instrumentality that vessels of the 
United States are not available in sufficient number, in sufficient 
tonnage capacity, on necessary schedules, or at reasonable rates.
``Sec. 55305. Cargoes procured, furnished, or financed by the United 
                    States Government
  ``(a) Definition.--In this section, the term `privately-owned United 
States-flag commercial vessel' does not include a vessel that, after 
September 21, 1961, was built or rebuilt outside the United States or 
documented under the laws of a foreign country, until the vessel has 
been documented under the laws of the United States for at least 3 
years.
  ``(b) Minimum Tonnage.--When the United States Government procures, 
contracts for, or otherwise obtains for its own account, or furnishes 
to or for the account of a foreign country without provision for 
reimbursement, any equipment, materials, or commodities, within or 
without the United States, or advances funds or credits, or guarantees 
the convertibility of foreign currencies in connection with the 
furnishing of the equipment, materials, or commodities, the appropriate 
agencies shall take steps necessary and practicable to ensure that at 
least 50 percent of the gross tonnage of the equipment, materials, or 
commodities (computed separately for dry bulk carriers, dry cargo 
liners, and tankers) which may be transported on ocean vessels is 
transported on privately-owned United States-flag commercial vessels, 
to the extent those vessels are available at fair and reasonable rates 
for United States-flag commercial vessels, in a manner that will ensure 
a fair and reasonable participation of United States-flag commercial 
vessels in those cargoes by geographic areas.
  ``(c) Waivers.--The President, the Secretary of Defense, or Congress 
(by concurrent resolution or otherwise) may waive this section 
temporarily by--
          ``(1) declaring the existence of an emergency justifying a 
        waiver; and
          ``(2) notifying the appropriate agencies of the waiver.
  ``(d) Programs of Other Agencies.--An agency having responsibility 
under this section shall administer its programs with respect to this 
section under regulations prescribed by the Secretary of 
Transportation. The Secretary shall review the administration of those 
programs and report annually to Congress on their administration.

   ``SUBCHAPTER II--EXPORT TRANSPORTATION OF AGRICULTURAL COMMODITIES

``Sec. 55311. Findings and purposes
  ``(a) Findings.--Congress finds that--
          ``(1) a productive and healthy agricultural industry and a 
        strong and active United States maritime industry are vitally 
        important to the economic well-being and security of the United 
        States;
          ``(2) both industries must compete in international markets 
        increasingly dominated by foreign trade barriers and the 
        subsidization practices of foreign governments; and
          ``(3) increased agricultural exports and the use of merchant 
        vessels of the United States contribute positively to the 
        United States balance of trade and generate employment 
        opportunities in the United States.
  ``(b) Purposes.--The purposes of this subchapter are to--
          ``(1) enable the Secretary of Agriculture to plan export 
        programs effectively, by clarifying the ocean transportation 
        requirements applicable to those programs;
          ``(2) take immediate and positive steps to promote the growth 
        of the cargo-carrying capacity of the United States merchant 
        marine;
          ``(3) expand international trade in United States 
        agricultural commodities and products and develop, maintain, 
        and expand markets for United States agricultural exports;
          ``(4) improve the efficiency of administration of both the 
        commodity purchasing and selling activities and the ocean 
        transportation activities associated with export programs 
        sponsored by the Secretary;
          ``(5) stimulate and promote the agricultural and maritime 
        industries of the United States and encourage cooperative 
        efforts by both industries to address their common problems; 
        and
          ``(6) provide for the appropriate disposition of these 
        findings and purposes.
``Sec. 55312. Determining prevailing world market price
  ``(a) Agricultural Commodities and Products.--The prevailing world 
market price for agricultural commodities or their products shall be 
determined under this subchapter under procedures prescribed by the 
Secretary of Agriculture. The Secretary shall prescribe the procedures 
by regulation, with notice and opportunity for public comment under 
section 553 of title 5.
  ``(b) Services and Non-Agricultural Commodities and Products.--If a 
determination of the prevailing world market price of any other type of 
materials, goods, equipment, or service is required to determine 
whether a barter or exchange transaction is subject to section 
55314(b)(6) or (7) of this title, the determination shall be made by 
the Secretary of Agriculture in consultation with the heads of other 
appropriate agencies.
``Sec. 55313. Exemption of certain agricultural exports from cargo 
                    preference provisions
  ``Sections 55304 and 55305 of this title do not apply to export 
activities of the Secretary of Agriculture or the Commodity Credit 
Corporation under which--
          ``(1) agricultural commodities or their products acquired by 
        the Corporation are made available to United States exporters, 
        users, processors, or foreign purchasers for the purpose of 
        developing, maintaining, or expanding export markets for United 
        States agricultural commodities or their products at prevailing 
        world market prices;
          ``(2) payments are made available to United States exporters, 
        users, or processors or, except as provided in section 55314 of 
        this title, cash grants are made available to foreign 
        purchasers, for the purpose described in clause (1);
          ``(3) commercial credit guarantees are blended with direct 
        credits from the Corporation to reduce the effective rate of 
        interest on export sales of United States agricultural 
        commodities or their products;
          ``(4) credit or credit guarantees for not more than 3 years 
        are extended by the Corporation to finance or guarantee export 
        sales of United States agricultural commodities or their 
        products; or
          ``(5) agricultural commodities or their products owned or 
        controlled by or under loan from the Corporation are exchanged 
        or bartered for materials, goods, equipment, or services at 
        least equal in value to the agricultural commodities or their 
        products for which they are exchanged or bartered (determined 
        on the basis of prevailing world market prices at the time of 
        the exchange or barter), but this clause doesnot exempt from 
the cargo preference provisions referred to in section 55314(b) of this 
title any requirement otherwise applicable to the materials, goods, 
equipment, or services imported under the transaction.
``Sec. 55314. Transportation requirements for certain exports sponsored 
                    by the Secretary of Agriculture
  ``(a) Minimum Tonnage.--
          ``(1) In general.--In addition to the requirement under 
        section 55305 of this title for the transportation of a 
        percentage of gross tonnage on United States-flag vessels, 25 
        percent of the gross tonnage of agricultural commodities or 
        their products specified in subsection (b) shall be transported 
        each calendar year on United States-flag commercial vessels 
        that--
                  ``(A) are necessary for national security; and
                  ``(B) if more than 25 years old, were rebuilt within 
                the last 5 years and certified by the Secretary of 
                Transportation as having a useful life of at least 5 
                years after that rebuilding.
          ``(2) Calendar year.--To provide for effective and equitable 
        administration of the cargo preference laws, the calendar year 
        for the purpose of compliance with minimum percentage 
        requirements is the 12-month period beginning October 1 of each 
        year.
  ``(b) Applicable Export Activity.--This section applies to export 
activity (except inspection or weighing activities, other activities 
carried out for health or safety, or technical assistance provided in 
the handling of commercial transactions) of the Secretary of 
Agriculture or the Commodity Credit Corporation--
          ``(1) carried out under the Agricultural Trade Development 
        and Assistance Act of 1954 (7 U.S.C. 1691 et seq.);
          ``(2) carried out under section 416 of the Agricultural Act 
        of 1949 (7 U.S.C. 1431);
          ``(3) carried out under the Bill Emerson Humanitarian Trust 
        Act (7 U.S.C. 1736f-1);
          ``(4) under which agricultural commodities or their products 
        are--
                  ``(A) donated through foreign governments or private 
                or public agencies, including intergovernmental 
                organizations; or
                  ``(B) sold for foreign currencies or for dollars on 
                credit terms of more than 10 years;
          ``(5) under which agricultural commodities or their products 
        are made available for emergency food relief at less than 
        prevailing world market prices;
          ``(6) under which a cash grant is made directly or through an 
        intermediary to a foreign purchaser to enable the purchaser to 
        obtain United States agricultural commodities or their products 
        in an amount greater than the difference between the prevailing 
        world market price and the United States market price, free 
        along side vessel at a United States port; or
          ``(7) under which agricultural commodities owned or 
        controlled by or under loan from the Corporation are exchanged 
        or bartered for materials, goods, equipment, or services 
        produced in foreign countries, except export activities 
        described in section 55313(5) of this title.
  ``(c) Additional Requirements.--
          ``(1) Application of section 55305.--The requirement for 
        United States-flag transportation under subsection (a) is 
        subject to the same terms and conditions as provided in section 
        55305 of this title.
          ``(2) Allocation of commodities.--Subject to paragraph (3), 
        in carrying out this section and section 55305 of this title, 
        the Corporation shall take steps necessary and practicable, and 
        consistent with this section and section 55305, without 
        detriment to any port range to allocate, on the principle of 
        lowest landed cost without regard to the country of 
        documentation of the vessel, 25 percent of the bagged, 
        processed, or fortified commodities provided under title II of 
        the Agricultural Trade Development and Assistance Act of 1954 
        (7 U.S.C. 1721 et seq.).
          ``(3) Calculations.--In carrying out paragraph (2), first 
        there shall be calculated the allocation of 100 percent of the 
        quantity to be procured on an overall lowest landed cost basis 
        without regard to the country of documentation of the vessel, 
        and then there shall be allocated to the Great Lakes port range 
        any cargoes for which it has the lowest landed cost under that 
        calculation. The requirements for United States-flag 
        transportation under this section and section 55305 of this 
        title do not apply to commodities allocated to the Great Lakes 
        port range under paragraph (2). To the extent that the Great 
        Lakes port range is used to furnish and transport less than 25 
        percent of the total annual tonnage of commodities to which 
        paragraph (2) applies, the commodities allocated to the Great 
        Lakes port range under paragraph (2) may not be reallocated or 
        diverted to another port range to meet the requirements for 
        United States-flag transportation under this section and 
        section 55305 of this title.
          ``(4) Awarding contracts.--In awarding a contract for the 
        transportation by vessel of commodities from the Great Lakes 
        port range pursuant to an export activity referred to in 
        subsection (b), an agency--
                  ``(A) shall consider expressions of freight interest 
                for any vessel from a vessel operator who meets 
                reasonable requirements for financial and operational 
                integrity; and
                  ``(B) may not deny award of the contract to a person 
                based on the type of vessel on which the transportation 
                would be provided (including on the basis that the 
                transportation would not be provided on a liner vessel, 
                as that term is used in the Shipping Act of 1984, as in 
                effect on November 14, 1995), if the person otherwise 
                satisfies reasonable requirements for financial and 
                operational integrity.
          ``(5) Nonavailability of vessels.--A determination of 
        nonavailability of United States-flag vessels resulting from 
        the application of this subsection may not reduce the gross 
        tonnage of commodities required by this section and section 
        55305 of this title to be transported on United States-flag 
        vessels.
``Sec. 55315. Minimum tonnage
  ``(a) Definition.--In this section, the term `base period' means the 
5-year period running from the sixth through the second prior fiscal 
years.
  ``(b) Requirement.--For each fiscal year, the minimum quantity of 
agricultural commodities to be exported under programs subject to 
section 55314 of this title is the average of the tonnage exported 
under those programs during the base period, discarding the high and 
low years.
  ``(c) Waivers.--The President may waive the minimum quantity for a 
fiscal year under this section if the President determines and reports 
to Congress, together with reasons, that the quantity cannot be used 
effectively for the purposes of those programs or, based on a 
certification by the Secretary of Agriculture, that the commodities are 
not available for reasons that include the unavailability of funds.
``Sec. 55316. Financing the transportation of agricultural commodities
  ``(a) In General.--The Secretary of Transportation shall finance any 
increased ocean freight charges incurred in a fiscal year because of 
section 55314 of this title.
  ``(b) Amount of Reimbursement.--
          ``(1) In general.--The Secretary of Transportation shall 
        reimburse the Secretary of Agriculture and the Commodity Credit 
        Corporation for the amount by which, in any fiscal year--
                  ``(A) the total cost of ocean freight and ocean 
                freight differential for which obligations are incurred 
                by the Secretary of Agriculture and the Corporation on 
                exports of agricultural commoditiesand their products 
under the agricultural export programs specified in section 55314(b) of 
this title; exceeds
                  ``(B) 20 percent of the value of the commodities and 
                their products and the cost of the ocean freight and 
                ocean freight differential on which obligations are 
                incurred by the Secretary of Agriculture and the 
                Corporation during that fiscal year.
          ``(2) Commodities shipped from inventory.--Under this 
        subsection, commodities shipped from the inventory of the 
        Corporation shall be valued as provided in section 412(e) of 
        the Agricultural Trade Development and Assistance Act of 1954 
        (7 U.S.C. 1736f(e)).
  ``(c) Issuance and Purchase of Obligations.--
          ``(1) Issuance.--To meet the expenses required to be assumed 
        under subsections (a) and (b), the Secretary of Transportation 
        shall issue obligations to the Secretary of the Treasury. The 
        Secretary of Transportation, with the approval of the Secretary 
        of the Treasury, shall prescribe the form, denomination, 
        maturity, and other terms (except the interest rate) of the 
        obligations. The Secretary of the Treasury shall set the 
        interest rate for the obligations, considering the average 
        market yield on outstanding marketable obligations of the 
        United States Government of comparable maturities during the 
        month before the obligations are issued.
          ``(2) Purchase.--The Secretary of the Treasury shall purchase 
        the obligations issued under this subsection. To purchase the 
        obligations, the Secretary of the Treasury may use as a public 
        debt transaction the proceeds from the sale of securities 
        issued under chapter 31 of title 31. The purposes for which 
        securities may be issued under that chapter are extended to 
        include the purchase of obligations under this subsection. A 
        redemption or purchase of the obligations by the Secretary of 
        the Treasury is a public debt transaction of the Government.
  ``(d) Reimbursement.--Reimbursement of the Secretary of 
Transportation for costs incurred under this section shall be made with 
appropriated funds rather than through cancellation of notes.
  ``(e) Appropriations.--
          ``(1) Authorization.--Each fiscal year, there is authorized 
        to be appropriated an amount sufficient to reimburse the 
        Secretary of Transportation for the costs incurred under this 
        section, including administrative expenses and the principal 
        and interest due on obligations issued to the Secretary of the 
        Treasury.
          ``(2) Appropriation for administrative expenses.--Each fiscal 
        year, such amounts as may be necessary are hereby appropriated 
        to pay interest and to liquidate debt on obligations issued to 
        the Secretary of the Treasury under this section.
  ``(f) Notification to Congress of Insufficiency.--If the Secretary of 
Transportation is unable to obtain the funds necessary to finance the 
increased ocean freight charges resulting from the requirements of 
subsections (a) and (b) and section 55314(a) of this title, the 
Secretary shall notify Congress within 10 working days of the discovery 
of the insufficiency.
``Sec. 55317. Termination of subchapter
  ``This subchapter terminates 90 days after the date on which a 
notification is made under section 55316(f) of this title, except for 
shipments of agricultural commodities and their products subject to 
contracts made before the end of that 90-day period, unless within that 
90-day period the Secretary of Transportation proclaims that funds are 
available to finance increased freight charges resulting from the 
requirements of sections 55314(a) and 55316(a) and (b) of this title. 
On the termination of this subchapter under this section--
          ``(1) this subchapter does not exempt export activities from, 
        or subject export activities to, the cargo preference laws; and
          ``(2) the 50-percent requirement in section 55305 of this 
        title remains in effect.
``Sec. 55318. Effect on other law
  ``This subchapter does not affect chapter 5 of title 5.

             ``SUBCHAPTER III--AMERICAN GREAT LAKES VESSELS

``Sec. 55331. Definitions
  ``In this subchapter:
          ``(1) American great lakes vessel.--The term `American Great 
        Lakes vessel' means a vessel so designated under section 55332 
        of this title, but only during the period the designation is in 
        effect.
          ``(2) Great lakes.--The term `Great Lakes' means Lake 
        Superior, Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, 
        the Saint Lawrence River west of Saint Regis, New York, and 
        their connecting and tributary waters.
          ``(3) Great lakes shipping season.--The term `Great Lakes 
        shipping season' means the period each year during which the 
        Saint Lawrence Seaway is open for navigation by vessels, as 
        declared by the Saint Lawrence Seaway Development Corporation.
``Sec. 55332. Designating American Great Lakes vessels
  ``(a) Designations.--The Secretary of Transportation shall designate 
a vessel as an American Great Lakes vessel if--
          ``(1) an application for designation is submitted to the 
        Secretary under regulations prescribed by the Secretary;
          ``(2) the vessel is documented under the laws of the United 
        States;
          ``(3) the vessel, on the effective date of the designation, 
        is--
                  ``(A) at least 1, but not more than 6, years old; or
                  ``(B) at least 1, but not more than 11, years old if 
                the Secretary finds that suitable vessels are not 
                available to provide the type of service for which the 
                vessel will be used after the designation;
          ``(4) the vessel has not previously been designated as an 
        American Great Lakes vessel; and
          ``(5) the owner makes an agreement as provided under 
        subsection (b).
  ``(b) Agreements.--A vessel may be designated as an American Great 
Lakes vessel only if the person that will be the owner of the vessel at 
the time of the designation makes an agreement with the Secretary 
providing that if the Secretary determines that the vessel is necessary 
to the defense of the United States, the United States Government will 
have an exclusive right, during the 120-day period following the date 
of a revocation of the designation under section 55335 of this title, 
to purchase the vessel for a price equal to the greater of--
          ``(1) the approximate world market value of the vessel; or
          ``(2) the cost of the vessel to the owner less a reasonable 
        amount for depreciation.
  ``(c) Certain Foreign Documentation and Sale Not Prohibited.--
Notwithstanding any other law, if the Government does not exercise its 
right of purchase under an agreement under subsection (b), the owner of 
the vessel is not prohibited from--
          ``(1) documenting the vessel under the laws of a foreign 
        country; or
          ``(2) selling the vessel to a person not a citizen of the 
        United States.
  ``(d) Regulations.--The Secretary shall prescribe regulations 
establishing requirements for submitting applications under this 
section.
``Sec. 55333. Exemption from restriction on transporting certain cargo
  ``The 3-year documentation requirement of section 55305(a) of this 
title does not apply to a vessel designated as an American Great Lakes 
vessel during the period of its designation.
``Sec. 55334. Restrictions on operations
  ``(a) Prohibitions.--Except as provided in subsection (b), an 
American Great Lakes vessel may not be used to--
          ``(1) engage in trade--
                  ``(A) from a port in the United States that is not 
                located on the Great Lakes; or
                  ``(B) between ports in the United States;
          ``(2) transport bulk cargo (as defined in section 40102 of 
        this title) that is subject to section 55305 or 55314 of this 
        title or section 2631 of title 10; or
          ``(3) provide a service (except ocean freight service) as--
                  ``(A) a contract carrier; or
                  ``(B) a common carrier on a fixed advertised schedule 
                offering frequent sailings at regular intervals in the 
                foreign trade of the United States.
  ``(b) Off-Season Exception.--An American Great Lakes vessel may be 
used for not more than 90 days during any 12-month period to engage in 
trade prohibited by subsection (a)(1)(A), except during the Great Lakes 
shipping season.
``Sec. 55335. Revocations and terminations of designations
  ``(a) Revocations.--After notice and an opportunity for a hearing, 
the Secretary of Transportation may revoke a designation of a vessel as 
an American Great Lakes vessel if the Secretary finds that--
          ``(1) the vessel does not meet a requirement for the 
        designation;
          ``(2) the vessel has been operated in violation of this 
        subchapter; or
          ``(3) the owner or operator of the vessel has violated an 
        agreement made under section 55332(b) of this title.
  ``(b) Terminations.--On petition and a showing of good cause by the 
owner of a vessel, the Secretary may terminate the designation of a 
vessel as an American Great Lakes vessel. The Secretary may impose 
conditions in a termination order to prevent significant adverse 
effects on other operators of United States-flag vessels.
``Sec. 55336. Civil penalty
  ``After notice and an opportunity for a hearing, the Secretary of 
Transportation may impose a civil penalty of not more than $1,000,000 
on the owner of an American Great Lakes vessel for any act for which 
the designation may be revoked under section 55335 of this title.

                      ``CHAPTER 555--MISCELLANEOUS

``Sec.
``55501.  Mobile trade fairs.
``Sec. 55501. Mobile trade fairs
  ``(a) In General.--The Secretary of Commerce shall encourage and 
promote the development and use of mobile trade fairs designed to show 
and sell the products of United States business and agriculture at 
foreign ports and at other commercial centers throughout the world 
where the operators of the fairs use, insofar as practicable, vessels 
and aircraft of the United States in transporting their exhibits.
  ``(b) Technical and Financial Assistance.--When the Secretary 
determines that a mobile trade fair provides an economical and 
effective means of promoting export sales, the Secretary may provide to 
the operator of the fair--
          ``(1) technical assistance and support; and
          ``(2) financial assistance to defray certain expenses 
        incurred outside the United States, except the cost of 
        transportation on foreign vessels and aircraft.
  ``(c) Use of Foreign Currencies.--To carry out this section, the 
President may use, in addition to amounts appropriated to carry out 
trade promotion activities, foreign currencies owned by or owed to the 
United States Government.

           ``Part E--Control of Merchant Marine Capabilities

                ``CHAPTER 561--RESTRICTIONS ON TRANSFERS

``Sec.
``56101.  Definition.
``56102.  Approval required to transfer vessel to noncitizen.
``56103.  Additional controls during war or national emergency.
``56104.  Conditional approvals.
``56105.  Penalty for false statements.
``56106.  Forfeiture procedure.
``Sec. 56101. Definition
  ``In this chapter, the term `citizen of the United States' includes a 
citizen of the United States as defined in section 12118 of this title.
``Sec. 56102. Approval required to transfer vessel to noncitizen
  ``(a) In General.--Except as otherwise provided in this section, 
section 12119 of this title, or section 611 of the Merchant Marine Act, 
1936, a person may not, without the approval of the Secretary of 
Transportation--
          ``(1) sell, lease, charter, deliver, or in any other manner 
        transfer, or agree to sell, lease, charter, deliver, or in any 
        other manner transfer, to a person not a citizen of the United 
        States, an interest in or control of a documented vessel or a 
        vessel last documented under the laws of the United States, 
        except a vessel that has been operated only for pleasure or 
        only as a fishing vessel, fish processing vessel, or fish 
        tender vessel (as defined in section 2101 of this title); or
          ``(2) place under foreign registry, or operate under the 
        authority of a foreign country, a documented vessel or a vessel 
        last documented under the laws of the United States.
  ``(b) Approval Before Documentation.--To promote financing with 
respect to a vessel to be documented under chapter 121 of this title, 
the Secretary may grant approval under subsection (a) before the vessel 
is documented.
  ``(c) Exceptions.--Notwithstanding any other provision of this 
subtitle, the Merchant Marine Act, 1936, or any contract with the 
Secretary made under this subtitle or that Act, a person may place a 
vessel under foreign registry without the approval of the Secretary 
if--
          ``(1)(A) the Secretary determines that at least one 
        replacement vessel of a capacity that is equivalent or greater, 
        as measured by deadweight tons, gross tons, or container 
        equivalent units, as appropriate, is documented under chapter 
        121 of this title by the owner of the vessel placed under 
        foreign registry; and
          ``(B) the replacement vessel is not more than 10 years old on 
        the date of that documentation;
          ``(2)(A) an application for an operating agreement under 
        subtitle B of title VI of the Merchant Marine Act, 1936, has 
        been filed for a vessel that is eligible to be included in the 
        Maritime Security Fleet under section 651(b)(1) of that Act; 
        and
          ``(B) the Secretary has not awarded an operating agreement 
        for that vessel within 90 days after the date of that 
        application;
          ``(3) a contract covering the vessel under subtitle A of 
        title VI of the Merchant Marine Act, 1936, has expired and the 
        vessel was more than 15 years old on the date the contract 
        expired; or
          ``(4) an operating agreement covering the vessel under 
        subtitle B of title VI of the Merchant Marine Act, 1936, has 
        expired.
  ``(d) Status of Prohibited Transaction.--A charter, sale, or transfer 
of a vessel, or of an interest in or control of a vessel, in violation 
of this section is void.
  ``(e) Penalties.--
          ``(1) Criminal penalty.--A person that knowingly sells, 
        charters, or transfers a vessel, or an interest in or control 
        of a vessel, in violation of this section shall be fined under 
        title 18, imprisoned for not more than 5 years, or both.
          ``(2) Civil penalty.--A person that sells, charters, or 
        transfers a vessel, or an interest in or control of a vessel, 
        in violation of this section is liable to the United States 
        Government for a civil penalty of not more than $10,000 for 
        each violation.
          ``(3) Forfeiture.--A documented vessel may be seized by and 
        forfeited to the Government if, in violation of this section, a 
        person--
                  ``(A) knowingly sells, charters, or transfers the 
                vessel or an interest in or control of the vessel; or
                  ``(B) places the vessel under foreign registry or 
                operates the vessel under the authority of a foreign 
                country.
``Sec. 56103. Additional controls during war or national emergency
  ``(a) In General.--During war, or a national emergency declared by 
Presidential proclamation, a person may not, without the approval of 
the Secretary of Transportation--
          ``(1) place under foreign registry or flag a vessel owned in 
        whole or in part by a citizen of the United States or a 
        corporation incorporated under the laws of the United States or 
        of a State;
          ``(2) sell, mortgage, lease, charter, deliver, or in any 
        other manner transfer, or agree to sell, mortgage, lease, 
        charter, deliver, or in any other manner transfer, to a person 
        not a citizen of the United States--
                  ``(A) a vessel owned as described in clause (1), or 
                an interest therein;
                  ``(B) a vessel documented under the laws of the 
                United States, or an interest therein; or
                  ``(C) a facility for building or repairing vessels, 
                or an interest therein;
          ``(3) issue, assign, or transfer to a person not a citizen of 
        the United States an instrument of indebtedness secured by a 
        mortgage of a vessel to a trustee, by an assignment of an 
        owner's interest in a vessel under construction to a trustee, 
        or by a mortgage of a facility for building or repairing 
        vessels to a trustee, unless the trustee or a substitute 
        trustee is approved by the Secretary under subsection (b);
          ``(4) enter into an agreement or understanding to construct a 
        vessel in the United States for, or to be delivered to, a 
        person not a citizen of the United States without expressly 
        stipulating that construction will not begin until after the 
        war or national emergency has ended;
          ``(5) enter into an agreement or understanding whereby there 
        is vested in, or for the benefit of, a person not a citizen of 
        the United States the controlling interest in a corporation 
        that is incorporated under the laws of the United States or a 
        State and that owns a vessel or facility for building or 
        repairing vessels; or
          ``(6) cause or procure a vessel, constructed in whole or in 
        part in the United States and never cleared for a foreign port, 
        to depart from a port of the United States before it has been 
        documented under the laws of the United States.
  ``(b) Trustees.--
          ``(1) Approval.--The Secretary shall approve a trustee or 
        substitute trustee under subsection (a)(3) if and only if the 
        trustee is a bank or trust company that--
                  ``(A) is organized as a corporation, and is doing 
                business, under the laws of the United States or a 
                State;
                  ``(B) is authorized under those laws to exercise 
                corporate trust powers;
                  ``(C) is a citizen of the United States;
                  ``(D) is subject to supervision or examination by 
                Federal or State authority; and
                  ``(E) has a combined capital and surplus (as set 
                forth in its most recent published report of condition) 
                of at least $3,000,000.
          ``(2) Disapproval.--If a trustee or substitute trustee ceases 
        to meet the conditions in paragraph (1), the Secretary shall 
        disapprove the trustee or substitute trustee. After the 
        disapproval, the restrictions on transfer or assignment without 
        the Secretary's approval in subsection (a)(3) apply.
          ``(3) Operation of vessel.--During a period when subsection 
        (a) applies, a trustee referred to in subsection (a)(3), even 
        though approved as a trustee by the Secretary, may not operate 
        the vessel under the mortgage or assignment without the 
        Secretary's approval.
  ``(c) Status of Prohibited Transaction.--A transaction in violation 
of this section is void.
  ``(d) Recovery of Consideration.--
          ``(1) In general.--A person that deposited or paid 
        consideration in connection with a transaction prohibited by 
        this section may recover the consideration after tender of the 
        vessel, facility, stock, or other security, or interest 
        therein, to the person entitled to it, or the forfeiture 
        thereof to the United States Government.
          ``(2) Exception.--Paragraph (1) does not apply if the person 
        in whose interest the consideration was deposited, or to whom 
        it was paid, entered into the transaction in the belief that 
        the person depositing or paying the consideration was a citizen 
        of the United States.
  ``(e) Penalties.--
          ``(1) Criminal penalty.--A person that violates, or attempts 
        or conspires to violate, this section shall be fined under 
        title 18, imprisoned for not more than 5 years, or both.
          ``(2) Forfeiture.--The following shall be forfeited to the 
        Government:
                  ``(A) A vessel, a facility for building or repairing 
                vessels, or an interest in a vessel or such a facility, 
                that is sold, mortgaged, leased, chartered, delivered, 
                transferred, or documented, or agreed to be sold, 
                mortgaged, leased, chartered, delivered, transferred, 
                or documented, in violation of this section.
                  ``(B) Stock and other securities sold or transferred, 
                or agreed to be sold or transferred, in violation of 
                this section.
                  ``(C) A vessel departing in violation of subsection 
                (a)(6).
``Sec. 56104. Conditional approvals
  ``(a) In General.--In approving an act or transaction under section 
56102 or 56103 of this title, the Secretary of Transportation may do so 
absolutely or upon conditions the Secretary considers advisable. The 
Secretary shall state the conditions in the notice of approval.
  ``(b) Violations.--A violation of a condition of approval is subject 
to the same penalties as a violation resulting from an act done without 
the required approval. The violation occurs at the time the condition 
is violated.
``Sec. 56105. Penalty for false statements
  ``A person that knowingly makes a false statement of a material fact 
to the Secretary of Transportation or another officer, employee, or 
agent of the Department of Transportation, to obtain the Secretary's 
approval under section 56102 or 56103 of this title, shall be fined 
under title 18, imprisoned for not more than 5 years, or both.
``Sec. 56106. Forfeiture procedure
  ``(a) In General.--A forfeiture under this chapter may be enforced in 
the same way as a forfeiture under the laws on the collection of 
duties. However, such a forfeiture may be remitted without seizure of 
the vessel.
  ``(b) Prior Convictions.--In a proceeding under this chapter to 
enforce a forfeiture, a prior criminal conviction of a person for a 
violation of this chapter with respect to the subject matter of the 
forfeiture is prima facie evidence of the violation against the person 
convicted.

            ``CHAPTER 563--EMERGENCY ACQUISITION OF VESSELS

``Sec.
``56301.  General authority.
``56302.  Charter terms.
``56303.  Compensation.
``56304.  Disputed compensation.
``56305.  Vessel encumbrances.
``56306.  Use and transfer of vessels.
``56307.  Return of vessels.
``Sec. 56301. General authority
  ``During a national emergency declared by Presidential proclamation, 
or a period for which the President has proclaimed that the security of 
the national defense makes it advisable, the Secretary of 
Transportation may requisition or purchase, or requisition or charter 
the use of, a vessel owned by citizens of the United States, a 
documented vessel, or a vessel under construction in the United States.
``Sec. 56302. Charter terms
  ``(a) In General.--If a vessel is requisitioned for use but not 
ownership under this chapter, the Secretary of Transportation, at the 
time of requisition or as soon thereafter as the situation allows, 
shall offer the person entitled to possession of the vessel a charter 
containing--
          ``(1) the terms the Secretary believes should govern the 
        relationship between the United States Government and the 
        person; and
          ``(2) the rate of hire the Secretary considers just 
        compensation for the use of the vessel and the services 
        required under the charter.
  ``(b) Refusal To Accept.--If the person does not accept the charter 
and rate of hire, the parties shall proceed as provided in section 
56304 of this title.
``Sec. 56303. Compensation
  ``(a) In General.--As soon as practicable, the Secretary of 
Transportation shall determine and pay just compensation for a vessel 
requisitioned under this chapter.
  ``(b) Factors Not Affecting Value.--The value of a vessel may not be 
considered enhanced by the circumstances requiring its requisition. 
Consequential damages arising from the requisition may not be paid.
  ``(c) Effect of Construction-Differential Subsidy.--
          ``(1) If paid.--If a construction-differential subsidy has 
        been paid for the vessel, the value of the vessel at the time 
        of requisition shall be determined under section 802 of the 
        Merchant Marine Act, 1936.
          ``(2) If not paid.--If a construction-differential subsidy 
        has not been paid for the vessel, the value of any national 
        defense features previously paid for by the United States 
        Government shall be excluded.
  ``(d) Loss or Damage During Charter.--If a vessel is lost or damaged 
by a risk assumed by the Government under the charter, but a valuation 
for the vessel or a means of compensation has not been agreed to, the 
Secretary shall pay just compensation for the loss or damage, to the 
extent the person is not reimbursed through insurance.
``Sec. 56304. Disputed compensation
  ``If the person entitled to compensation disputes the amount of just 
compensation determined by the Secretary of Transportation under this 
chapter, the Secretary shall pay the person, as a tentative advance, 75 
percent of the amount determined. The person may bring a civil action 
against the United States Government to recover just compensation. If 
the tentative advance paid under this section is greater than the 
amount of the court's judgment, the person shall refund the difference.
``Sec. 56305. Vessel encumbrances
  ``(a) In General.--The existence of an encumbrance on a vessel does 
not prevent the requisition of the vessel under this chapter.
  ``(b) Deposit in Treasury.--
          ``(1) In general.--If an encumbrance exists, the Secretary of 
        Transportation may deposit part of the compensation or advance 
        of compensation to be paid under this chapter (but not more 
        than the total amount of all encumbrances) in a fund in the 
        Treasury. The Secretary shall publish notice of the creation of 
        the fund in the Federal Register.
          ``(2) Availability of amounts deposited.--Amounts deposited 
        in the fund shall be available to pay the compensation or any 
        of the encumbrances (including encumbrances stipulated to in a 
        court of the United States or a State) existing at the time the 
        vessel was requisitioned.
  ``(c) Civil Action.--
          ``(1) In general.--Within 6 months after publication of 
        notice under subsection (b), the holder of an encumbrance may 
        bring a civil action in admiralty, according to the principles 
        of libels in rem, against the fund.
          ``(2) Venue.--The action must be brought in the district 
        court of the United States--
                  ``(A) from whose custody the vessel was or may be 
                requisitioned; or
                  ``(B) in whose district the vessel was located when 
                it was requisitioned.
          ``(3) Service of process.--Service of process shall be made 
        on the appropriate United States Attorney, the Attorney 
        General, and the Secretary, in the manner provided by the 
        Federal Rules of Civil Procedure (28 App. U.S.C.). Notice of 
        the action shall be given to all interested persons as ordered 
        by the court.
          ``(4) As between private parties.--The action shall proceed 
        and be determined according to the principles of law and the 
        rules of practice applicable in like cases between private 
        parties.
``Sec. 56306. Use and transfer of vessels
  ``(a) In General.--The Secretary of Transportation may repair, 
recondition, reconstruct, operate, or charter for operation, a vessel 
acquired under this chapter.
  ``(b) Transfer to Other Agencies.--The Secretary may transfer the 
possession or control of a vessel acquired under this chapter to 
another department or agency of the United States Government on terms 
and conditions approved by the President. The department or agency 
shall promptly reimburse the Secretary for expenditures for just 
compensation, purchase price, charter hire, repairs, reconditioning, or 
reconstruction.
``Sec. 56307. Return of vessels
  ``When a vessel requisitioned for use but not ownership is returned 
to the owner, the Secretary of Transportation shall--
          ``(1) return the vessel in a condition at least as good as 
        when taken, less ordinary wear and tear; or
          ``(2) pay the owner an amount sufficient to recondition the 
        vessel to that condition, less ordinary wear and tear.

      ``CHAPTER 565--ESSENTIAL VESSELS AFFECTED BY NEUTRALITY ACT

``Sec.
``56501.  Definition.
``56502.  Adjusting obligations and arranging maintenance.
``56503.  Types of adjustments and arrangements.
``56504.  Changes in adjustments and arrangements.
``Sec. 56501. Definition
  ``In this chapter, the term `essential vessel' means a vessel that 
is--
          ``(1)(A) security for a mortgage indebtedness to the United 
        States Government; or
          ``(B) constructed under this subtitle or required by a 
        contract under this subtitle to be operated on a certain 
        essential foreign trade route; and
          ``(2) necessary in the interests of commerce and national 
        defense to be maintained in condition for prompt use.
``Sec. 56502. Adjusting obligations and arranging maintenance
  ``(a) General Authority.--On written application, the Secretary of 
Transportation may adjust obligations and arrange for maintenance of an 
essential vessel as provided in this chapter if the Secretary 
determines, after any investigation or proceeding the Secretary 
considers desirable, that--
          ``(1) the operation of the vessel in the service, route, or 
        line to which it is assigned under this subtitle, or in which 
        it otherwise would be operated, is not--
                  ``(A) lawful under the Neutrality Act of 1939 (22 
                U.S.C. 441 et seq.) or a proclamation issued under that 
                Act; or
                  ``(B) compatible with maintaining the availability of 
                the vessel for national defense and commerce;
          ``(2) it is not feasible under existing law to employ the 
        vessel in any other service or operation in foreign or domestic 
        trade (except temporary or emergency operation under section 
        56503(b)(5) of this title); and
          ``(3) the applicant, because of the restrictions of the 
        Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or the 
        withdrawal of vessels for national defense under clause (1), is 
        not earning or will not earn a reasonable return on the capital 
        necessarily employed in its business.
  ``(b) Effective Period.--Adjustments and arrangements under 
subsection (a) shall continue in effect only as long as the 
circumstances described in subsection (a) continue to exist.
``Sec. 56503. Types of adjustments and arrangements
  ``(a) Suspension Requirements.--An adjustment or arrangement under 
this chapter shall include suspension of--
          ``(1) the requirement to operate the vessel in foreign trade 
        under the applicable operating-differential or construction-
        differential subsidy contract or mortgage or other agreement; 
        and
          ``(2) the right to operating-differential subsidy for the 
        vessel.
  ``(b) Discretionary Adjustments and Arrangements.--To the extent the 
Secretary of Transportation considers appropriate to carry out the 
purposes of this subtitle, an adjustment or arrangement under this 
chapter may include any of the following:
          ``(1) Lay-up of the vessel by the owner or in the custody of 
        the Secretary, with payment or reimbursement by the Secretary 
        of necessary and proper expenses (including reasonable overhead 
        and insurance) or a fixed periodic allowance instead of payment 
        or reimbursement.
          ``(2) Postponement, for not more than the total period of the 
        lay-up, of the maturity date of each installment of the 
        principal of obligations to the United States Government for 
        the vessel (regardless of whether the maturity date is during a 
        lay-up period), or rearrangement of those maturities.
          ``(3) Postponement or cancellation of interest accruing on 
        the obligations during a lay-up period.
          ``(4) Extension, for not more than the total period of the 
        lay-up, of the 20-year life limitation for the vessel and other 
        limitations and provisions of this subtitle based on a 20-year 
        life.
          ``(5) Provision for temporary or emergency employment of the 
        vessel (instead of lay-up) as may be practicable, with such 
        arrangements for management of the vessel, payment of expenses, 
        and application of the proceeds of the employment, as the 
        Secretary may approve, with any period of operation being 
        included as part of the lay-up period.
          ``(6) Payment to the Secretary, on termination of the 
        arrangements with the applicant, of the applicant's net profits 
        (earned while the arrangements were in effect) in excess of 10 
        percent a year on the capital necessarily employed in the 
        applicant's business, as reimbursement for obligations 
        postponed or canceled and expenses incurred or paid by the 
        Secretary under this section.
  ``(c) Laid-Up Vessels.--Under subsection (b)(6), capital of the 
applicant represented by a vessel of the applicant laid-up or operated 
under this section shall be included in capital necessarily employed in 
the applicant's business. The Secretary may require a vessel laid-up or 
operated under this section to be security for reimbursement.
``Sec. 56504. Changes in adjustments and arrangements
  ``The Secretary of Transportation may change an adjustment or 
arrangement made under this chapter as the Secretary considers 
necessary to carry out this chapter.

              ``Part F--Government-Owned Merchant Vessels

                    ``CHAPTER 571--GENERAL AUTHORITY

``Sec.
``57101.  Placement of vessels in National Defense Reserve Fleet.
``57102.  Disposition of vessels not worth preserving.
``57103.  Sale of obsolete vessels in National Defense Reserve Fleet.
``57104.  Acquisition of vessels from sale of obsolete vessels.
``57105.  Acquisition of vessels for essential services, routes, or 
          lines.
``57106.  Maintenance, improvement, and operation of vessels.
``57107.  Vessels for other agencies.
``57108.  Consideration of ballast and equipment in determining selling 
          price.
``57109.  Operation of vessels purchased, chartered, or leased from 
          Secretary of Transportation.
``Sec. 57101. Placement of vessels in National Defense Reserve Fleet
  ``(a) In General.--Any vessel acquired by the Maritime Administration 
shall be placed in the National Defense Reserve Fleet maintained under 
section 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 
1744).
  ``(b) Removal From Fleet.--A vessel placed in the Fleet under 
subsection (a) may not be traded out or sold from the Fleet, except as 
provided in section 57102, 57103, or 57104 or chapter 533, 537, 573, or 
575 of this title.
``Sec. 57102. Disposition of vessels not worth preserving
  ``(a) In General.--If the Secretary of Transportation determines that 
a vessel owned by the Maritime Administration is of insufficient value 
for commercial or military operation to warrant its further 
preservation, the Secretary may scrap the vessel or sell the vessel for 
cash.
  ``(b) Selling Procedure.--The sale of a vessel under subsection (a) 
shall be made on the basis of competitive sealed bids, after an 
appraisal and due advertisement. The purchaser does not have to be a 
citizen of the United States. The purchaser shall provide a surety 
bond, with a surety approved by the Secretary, to ensure that the 
vessel will not be operated in the foreign trade of the United States 
at any time within 10 years after the sale, in competition with a 
vessel owned by a citizen of the United States and documented under the 
laws of the United States.
``Sec. 57103. Sale of obsolete vessels in National Defense Reserve 
                    Fleet
  ``(a) In General.--The Secretary of Transportation may convey the 
right, title, and interest of the United States Government in any 
vessel of the National Defense Reserve Fleet that has been identified 
by the Secretary as an obsolete vessel of insufficient value to warrant 
its further preservation, if the recipient--
          ``(1) is a non-profit organization, a State, or a municipal 
        corporation or political subdivision of a State;
          ``(2) agrees not to use, or allow others to use, the vessel 
        for commercial transportation purposes;
          ``(3) agrees to make the vessel available to the Government 
        whenever the Secretary indicates that it is needed by the 
        Government;
          ``(4) agrees to hold the Government harmless for any claims 
        arising from exposure to asbestos, polychlorinated biphenyls, 
        lead paint, or other hazardous substances after conveyance of 
        the vessel, except for claims arising from use of the vessel by 
        the Government;
          ``(5) has a conveyance plan and a business plan that 
        describes the intended use of the vessel, each of which has 
        been submitted to and approved by the Secretary;
          ``(6) has provided proof, as determined by the Secretary, of 
        resources sufficient to accomplish the transfer, necessary 
        repairs and modifications, and initiation of the intended use 
        of the vessel; and
          ``(7) agrees that when the recipient no longer requires the 
        vessel for use as described in the business plan required under 
        clause (5)--
                  ``(A) the recipient will, at the discretion of the 
                Secretary, reconvey the vessel to the Government in 
                good condition except for ordinary wear and tear; or
                  ``(B) if the Board of Trustees of the recipient has 
                decided to dissolve the recipient according to the laws 
                of the State in which the recipient is incorporated, 
                then--
                          ``(i) the recipient shall distribute the 
                        vessel, as an asset of the recipient, to a 
                        person that has been determined exempt from 
                        taxation under section 501(c)(3) of the 
                        Internal Revenue Code of 1986 (26 U.S.C. 
                        501(c)(3)), or to the Federal Government or a 
                        State or local government for a public purpose; 
                        and
                          ``(ii) the vessel shall be disposed of by a 
                        court of competent jurisdiction of the county 
                        in which the principal office of therecipient 
is located, for such purposes as the court shall determine, or to such 
organizations as the court shall determine are organized exclusively 
for public purposes.
  ``(b) Other Equipment.--At the Secretary's discretion, additional 
equipment from other obsolete vessels of the Fleet may be conveyed to 
assist the recipient with maintenance, repairs, or modifications.
  ``(c) Additional Terms.--The Secretary may require any additional 
terms the Secretary considers appropriate.
  ``(d) Delivery of Vessel.--If conveyance is made under this section, 
the vessel shall be delivered to the recipient at a time and place to 
be determined by the Secretary. The vessel shall be conveyed in an `as 
is' condition.
  ``(e) Limitations.--If at any time prior to delivery of the vessel to 
the recipient, the Secretary determines that a different disposition of 
the vessel would better serve the interests of the Government, the 
Secretary shall pursue the more favorable disposition of the obsolete 
vessel and shall not be liable for any damages that may result from an 
intended recipient's reliance upon a proposed transfer.
  ``(f) Reversion.--The Secretary shall include in any conveyance under 
this section terms under which all right, title, and interest conveyed 
by the Secretary shall revert to the Government if the Secretary 
determines the vessel has been used other than as described in the 
business plan required under subsection (a)(5).
``Sec. 57104. Acquisition of vessels from sale of obsolete vessels
  ``(a) In General.--The Secretary of Transportation may acquire 
suitable documented vessels with amounts in the Vessel Operations 
Revolving Fund derived from the sale of obsolete vessels in the 
National Defense Reserve Fleet.
  ``(b) Valuation.--The acquired and obsolete vessels shall be valued 
at their scrap value in domestic or foreign markets as of the date of 
the acquisition for or sale from the Fleet. However, the value assigned 
to those vessels shall be determined on the same basis, with 
consideration given to the fair value of the cost of moving the vessel 
sold from the Fleet to the place of scrapping.
  ``(c) Costs Incident to Lay-Up.--Costs incident to the lay-up of the 
vessel acquired under this section may be paid from amounts in the 
Fund.
  ``(d) Transfers to Non-Citizens.--A vessel sold from the Fleet under 
this section may be scrapped in an approved foreign market without 
obtaining additional separate approval from the Secretary to transfer 
the vessel to a person not a citizen of the United States.
``Sec. 57105. Acquisition of vessels for essential services, routes, or 
                    lines
  ``(a) In General.--The Secretary of Transportation may acquire a 
vessel, by purchase or otherwise, if--
          ``(1) the Secretary considers the vessel necessary to 
        establish, maintain, improve, or serve as a replacement on an 
        essential service, route, or line in the foreign commerce of 
        the United States, as determined under section 50103 of this 
        title;
          ``(2) the vessel was constructed in the United States; and
          ``(3) the Secretary of the Navy has certified to the 
        Secretary of Transportation that the vessel is suitable for 
        economical and speedy conversion into a naval or military 
        auxiliary or otherwise suitable for use by the United States 
        Government in time of war or national emergency.
  ``(b) Price.--The price paid for the vessel shall be based on a fair 
and reasonable valuation. However, the price may not exceed by more 
than 5 percent the cost of the vessel to the owner (excluding any 
construction-differential subsidy and the cost of national defense 
features paid by the Secretary of Transportation) plus the actual cost 
previously expended for reconditioning, less depreciation based on a 
25-year life for a dry-cargo or passenger vessel and a 20-year life for 
a tanker or other liquid bulk carrier vessel.
  ``(c) Documentation.--A vessel acquired under this section that is 
not documented under the laws of the United States at the time of 
acquisition shall be so documented as soon as practicable.
``Sec. 57106. Maintenance, improvement, and operation of vessels
  ``(a) In General.--The Secretary of Transportation may maintain, 
repair, recondition, remodel, and improve vessels owned by the United 
States Government and in the possession or under the control of the 
Secretary, to equip them adequately for competition in the foreign 
trade of the United States. The Secretary may operate such a vessel or 
charter the vessel on terms and conditions the Secretary considers 
appropriate to carry out the purposes of this subtitle.
  ``(b) Documentation and Restrictions on Operation.--A vessel 
reconditioned, remodeled, or improved under subsection (a) shall be 
documented under the laws of the United States and remain so documented 
for at least 5 years after completion of the reconditioning, 
remodeling, or improvement. During that period, it shall be operated on 
voyages that are not exclusively coastwise.
``Sec. 57107. Vessels for other agencies
  ``(a) In General.--The Secretary of Transportation may construct, 
reconstruct, repair, equip, and outfit, by contract or otherwise, 
vessels or parts thereof, for any other department or agency of the 
United States Government to the extent the other department or agency 
is authorized by law to do so for its own account.
  ``(b) Effect on Contract Authorization.--An obligation incurred or 
expenditure made by the Secretary under this section does not affect 
any contract authorization of the Secretary, but instead shall be 
charged against the existing appropriation or contract authorization of 
the department or agency.
``Sec. 57108. Consideration of ballast and equipment in determining 
                    selling price
  ``The Maritime Administration may not sell a vessel until its ballast 
and equipment have been inventoried and their value considered in 
determining the selling price of the vessel.
``Sec. 57109. Operation of vessels purchased, chartered, or leased from 
                    Secretary of Transportation
  ``Unless otherwise authorized by the Secretary of Transportation, a 
vessel purchased, chartered, or leased from the Secretary may be 
operated only under a certificate of documentation with a registry or 
coastwise endorsement. Such a vessel, while employed solely as a 
merchant vessel, is subject to the laws, regulations, and liabilities 
governing merchant vessels, whether the United States Government has an 
interest in the vessel as an owner or holds a mortgage, lien, or other 
interest.

                 ``CHAPTER 573--VESSEL TRADE-IN PROGRAM

``Sec.
``57301.  Definitions.
``57302.  Authority to acquire vessels.
``57303.  Utility value and tonnage requirements.
``57304.  Eligible acquisition dates.
``57305.  Determination of trade-in allowance.
``57306.  Payment of trade-in allowance.
``57307.  Recognition of gain for tax purposes.
``57308.  Use of vessels at least 25 years old.
``Sec. 57301. Definitions
  ``In this chapter:
          ``(1) New vessel.--The term `new vessel' means a vessel--
                  ``(A) constructed under this subtitle and acquired 
                within 2 years after the date of completion; or
                  ``(B) constructed in a domestic shipyard on private 
                account and not under this subtitle, and documented 
                under the laws of the United States.
          ``(2) Obsolete vessel.--The term `obsolete vessel' means a 
        vessel that--
                  ``(A) is of at least 1,350 gross tons;
                  ``(B) the Secretary of Transportation believes 
                should, because of its age, obsolescence, or other 
                reasons, be replaced in the public interest; and
                  ``(C) has been owned by a citizen of the United 
                States for at least 3 years immediately before its 
                acquisition under this chapter.
``Sec. 57302. Authority to acquire vessels
  ``To promote the construction of new, safe, and efficient vessels to 
carry the domestic and foreign waterborne commerce of the United 
States, the Secretary of Transportation may acquire an obsolete vessel 
in exchange for an allowance of credit toward the cost of construction 
or purchase of a new vessel as provided in this chapter.
``Sec. 57303. Utility value and tonnage requirements
  ``(a) Utility Value.--The utility value of a new vessel to be 
acquired under this chapter for operation in the domestic or foreign 
commerce of the United States may not be substantially less than that 
of the obsolete vessel acquired in exchange under this chapter.
  ``(b) Tonnage.--If the Secretary of Transportation finds that the new 
vessel will have a utility value at least equal to that of the obsolete 
vessel, the new vessel may be of lesser gross tonnage than the obsolete 
vessel. However, the gross tonnage of the new vessel must be at least 
one-third the gross tonnage of the obsolete vessel.
``Sec. 57304. Eligible acquisition dates
  ``At the option of the owner, the acquisition of an obsolete vessel 
under this chapter shall occur--
          ``(1) when the owner contracts for the construction or 
        purchase of a new vessel; or
          ``(2) within 5 days of the actual date of delivery of the new 
        vessel to the owner.
``Sec. 57305. Determination of trade-in allowance
  ``(a) In General.--The Secretary of Transportation shall determine 
the trade-in allowance for an obsolete vessel at the time of 
acquisition of the vessel. The allowance shall be the fair value of the 
vessel. In determining the value, the Secretary shall consider--
          ``(1) the scrap value of the obsolete vessel in American and 
        foreign markets;
          ``(2) the depreciated value based on a 20-year or 25-year 
        life, whichever applies to the obsolete vessel; and
          ``(3) the market value of the obsolete vessel for operation 
        in world commerce or in the domestic or foreign commerce of the 
        United States.
  ``(b) Use of Obsolete Vessels.--If acquisition of the obsolete vessel 
occurs when the owner contracts for the construction of the new vessel, 
and the owner uses the obsolete vessel during the period of 
construction of the new vessel, the Secretary shall reduce the trade-in 
allowance by an amount representing the fair value of that use. The 
Secretary shall establish the rate for use of the obsolete vessel when 
the contract for construction of the new vessel is made.
``Sec. 57306. Payment of trade-in allowance
  ``(a) Acquisition at Time of Contract.--If acquisition of an obsolete 
vessel under this chapter occurs when the owner contracts for the 
construction or purchase of the new vessel, the Secretary of 
Transportation shall apply the trade-in allowance to the purchase price 
of the new vessel rather than paying it to the owner. If the new vessel 
is constructed under this subtitle, the Secretary may apply the trade-
in allowance to the required cash payments on terms and conditions the 
Secretary may prescribe. If the new vessel is not constructed under 
this subtitle, the Secretary shall pay the trade-in allowance to the 
builder of the vessel for the account of the owner when the Secretary 
acquires the obsolete vessel.
  ``(b) Acquisition at Time of Delivery.--If acquisition of the 
obsolete vessel occurs when the new vessel is delivered to the owner, 
the Secretary shall deposit the trade-in allowance in the owner's 
capital construction fund.
``Sec. 57307. Recognition of gain for tax purposes
  ``The owner of an obsolete vessel does not recognize a gain under the 
Federal income tax laws when the vessel is transferred to the Secretary 
of Transportation in exchange for a trade-in allowance under this 
chapter. The basis of the new vessel acquired with the allowance is the 
same as the basis of the obsolete vessel--
          ``(1) increased by the difference between the cost of the new 
        vessel and the trade-in allowance of the obsolete vessel; and
          ``(2) decreased by the amount of loss recognized on the 
        transfer.
``Sec. 57308. Use of vessels at least 25 years old
  ``An obsolete vessel acquired under this chapter that is or becomes 
at least 25 years old may not be used for commercial operation. 
However, the vessel may be used--
          ``(1) during a period in which vessels may be requisitioned 
        under chapter 563 of this title; or
          ``(2) except as otherwise provided in this subtitle, on trade 
        routes serving only the foreign trade of the United States.

       ``CHAPTER 575--CONSTRUCTION, CHARTER, AND SALE OF VESSELS

                         ``SUBCHAPTER I--GENERAL

``Sec.
``57501.  Completion of long-range program.
``57502.  Construction, reconditioning, and remodeling of vessels.
``57503.  Competitive bidding.
``57504.  Charter or sale of vessels acquired by Department of 
          Transportation.
``57505.  Employment of vessels on foreign trade routes.
``57506.  Minimum selling price of vessels.

                        ``SUBCHAPTER II--CHARTERS

``57511.  Demise charters.
``57512.  Competitive bidding.
``57513.  Minimum bid.
``57514.  Qualifications of bidders.
``57515.  Awarding of charters.
``57516.  Operating-differential subsidies.
``57517.  Recovery of excess profits.
``57518.  Performance bond.
``57519.  Insurance.
``57520.  Vessel maintenance.
``57521.  Termination of charter during national emergency.

                     ``SUBCHAPTER III--MISCELLANEOUS

``57531.  Construction and charter of vessels for unsuccessful routes.
``57532.  Operation of experimental vessels.

                        ``SUBCHAPTER I--GENERAL

``Sec. 57501. Completion of long-range program
  ``Whenever the Secretary of Transportation determines that the 
objectives and policies declared in sections 50101 and 50102 of this 
title cannot be fully realized within a reasonable time under titles V 
and VI of the Merchant Marine Act, 1936, and the President approves the 
determination, the Secretary, in accordance with this chapter, shall 
complete the long-range program described in section 50102 of this 
title.
``Sec. 57502. Construction, reconditioning, and remodeling of vessels
  ``(a) In General.--The Secretary of Transportation may have new 
vessels constructed, and have old vessels reconditioned or remodeled, 
as the Secretary determines necessary to carry out the objectives of 
this subtitle.
  ``(b) Place of Work.--Construction, reconditioning, and remodeling of 
vessels under subsection (a) shall take place in shipyards in the 
continental United States (including Alaska and Hawaii). However, if 
satisfactory contracts cannot be obtained from private shipbuilders, 
the Secretary may have the work done in navy yards.
  ``(c) Applicability of Construction-Differential Subsidy 
Provisions.--Contracts for the construction, reconstruction, or 
reconditioning of a vessel by a private shipbuilder under this chapter 
are subject to the provisions of title V of the Merchant Marine Act, 
1936, applicable to a contractwith a private shipbuilder for the 
construction of a vessel under title V of that Act.
``Sec. 57503. Competitive bidding
  ``(a) Advertisement and Bidding.--The Secretary of Transportation may 
make a contract with a private shipbuilder for the construction of a 
new vessel, or for the reconstruction or reconditioning of an existing 
vessel, only after due advertisement and upon sealed competitive bids.
  ``(b) Opening of Bids.--Bids required under this section shall be 
opened at the time and place stated in the advertisement for bids. All 
interested persons, including representatives of the press, shall be 
permitted to attend. The results of the bidding shall be publicly 
announced.
``Sec. 57504. Charter or sale of vessels acquired by Department of 
                    Transportation
  ``Vessels transferred to or otherwise acquired by the Department of 
Transportation in any manner may be chartered or sold by the Secretary 
of Transportation as provided in this chapter.
``Sec. 57505. Employment of vessels on foreign trade routes
  ``(a) In General.--The Secretary of Transportation shall arrange for 
the employment of the Department of Transportation's vessels in 
steamship lines on such trade routes, exclusively serving the foreign 
trade of the United States, as the Secretary determines are essential 
for the development and maintenance of the commerce of the United 
States and the national defense. However, the Secretary shall first 
determine that those routes are not being adequately served by existing 
steamship lines privately owned and operated by citizens of the United 
States and documented under the laws of the United States.
  ``(b) Policy To Encourage Private Operation.--The Secretary shall 
have a policy of encouraging private operation of each essential 
steamship line now owned by the United States Government by--
          ``(1) selling the line to a citizen of the United States; or
          ``(2) demising the Secretary's vessels on bareboat charter to 
        citizens of the United States who agree to maintain the line in 
        the manner provided in this chapter.
``Sec. 57506. Minimum selling price of vessels
  ``(a) In General.--A vessel constructed under this subtitle or the 
Merchant Marine Act, 1936, may not be sold by the Secretary of 
Transportation for less than the price specified in this section.
  ``(b) Operation in Foreign Trade.--If the vessel is to be operated in 
foreign trade, the minimum price is the estimated foreign construction 
cost (exclusive of national defense features) determined as of the date 
the construction contract is executed, less depreciation under 
subsection (d).
  ``(c) Operation in Domestic Trade.--If the vessel is to be operated 
in domestic trade, the minimum price is the cost of construction in the 
United States (exclusive of national defense features), less 
depreciation under subsection (d).
  ``(d) Depreciation.--Depreciation under subsections (b) and (c) shall 
be based on--
          ``(1) a 25-year life for dry-cargo and passenger vessels; and
          ``(2) a 20-year life for tankers and other bulk liquid 
        carrier vessels.

                       ``SUBCHAPTER II--CHARTERS

``Sec. 57511. Demise charters
  ``A charter by the Secretary of Transportation under this chapter 
shall demise the vessel to the charterer subject to all usual 
conditions contained in a bareboat charter. The charter shall be for a 
term the Secretary considers to be in the best interest of the United 
States Government and the merchant marine.
``Sec. 57512. Competitive bidding
  ``(a) In General.--The Secretary of Transportation may charter a 
vessel of the Department of Transportation to a private operator only 
on the basis of competitive sealed bidding. The bids must be submitted 
in strict compliance with the terms and conditions of a public 
advertisement soliciting the bids.
  ``(b) Advertisement for Bids.--An advertisement for bids shall 
state--
          ``(1) the number, type, and tonnage of the vessels being 
        offered for bareboat charter for operation as a steamship line 
        on a designated trade route;
          ``(2) the minimum number of sailings required;
          ``(3) the length of time of the charter;
          ``(4) the right of the Secretary to reject all bids; and
          ``(5) other information the Secretary considers necessary for 
        the information of prospective bidders.
  ``(c) Opening of Bids.--Bids required under this section shall be 
opened at the time and place stated in the advertisement for bids. All 
interested persons, including representatives of the press, shall be 
permitted to attend. The results of the bidding shall be publicly 
announced.
``Sec. 57513. Minimum bid
  ``The Secretary of Transportation shall reject any bid for the 
charter under this subchapter of a vessel constructed under this 
subtitle or the Merchant Marine Act, 1936, if the charter hire offered 
is lower than the minimum charter hire would be if the vessel were 
chartered under section 57531 of this title.
``Sec. 57514. Qualifications of bidders
  ``(a) Considerations.--In deciding whether to award a charter to a 
bidder, the Secretary of Transportation shall consider--
          ``(1) the bidder's financial resources, credit standing, and 
        practical experience in operating vessels; and
          ``(2) other factors a prudent business person would consider 
        in entering into a transaction involving a large capital 
        investment.
  ``(b) Disqualifications.--The Secretary may not charter a vessel to a 
person appearing to lack sufficient capital, credit, and experience to 
operate the vessel successfully over the period covered by the charter.
``Sec. 57515. Awarding of charters
  ``(a) In General.--The Secretary of Transportation shall award the 
charter to the bidder proposing to pay the highest monthly charter 
hire. However, the Secretary may reject the highest or most 
advantageous or any other bid if the Secretary considers the charter 
hire offered too low or determines that the bidder lacks the 
qualifications required by section 57514 of this title.
  ``(b) Highest Bid Rejected.--If the Secretary rejects the highest 
bid, the Secretary may--
          ``(1) award the charter to the next highest bidder; or
          ``(2) reject all bids and either readvertise the line or 
        operate the line until conditions appear more favorable to 
        reoffer the line for private charter.
  ``(c) Reason for Rejection.--On request of a bidder, the reason for 
rejection shall be stated in writing to the bidder.
``Sec. 57516. Operating-differential subsidies
  ``If the Secretary of Transportation considers it necessary, the 
Secretary may make a contract with a charterer of a vessel owned by the 
Secretary for payment of an operating-differential subsidy, on the same 
terms and conditions, and subject to the same limitations and 
restrictions, as otherwise provided with respect to payment of 
operating-differential subsidies to operators of privately-owned 
vessels.
``Sec. 57517. Recovery of excess profits
  ``(a) In General.--A charter under this chapter shall provide that 
if, at the end of a calendar year subsequent to the execution of the 
charter, the cumulative net voyage profit (after payment of the charter 
hire reserved in the charter and payment of the charterer's fair and 
reasonable overhead expenses applicable to operation of the chartered 
vessel) exceeds 10 percent a year of the charterer's capital 
necessarily employed in the business of the chartered vessel, the 
charterer shall pay to the Secretary of Transportation, as additional 
charter hire, half the cumulative net voyage profit in excessof 10 
percent a year. However, any cumulative net voyage profit accounted for 
under this subsection is not to be included in the calculation of 
cumulative net voyage profit in any subsequent year.
  ``(b) Terms To Be Defined and Used.--The Secretary shall define the 
terms `net voyage profit', `fair and reasonable overhead expenses', and 
`capital necessarily employed' for this section. Each advertisement for 
bids and each charter shall contain these definitions, stating the 
formula for determining each of these three amounts.
``Sec. 57518. Performance bond
  ``The Secretary of Transportation shall require a charterer of a 
vessel of the Secretary to deposit with the Secretary an undertaking, 
with approved sureties, in such amount as the Secretary may require as 
security for the faithful performance of the terms of the charter, 
including indemnity against liens on the chartered vessel.
``Sec. 57519. Insurance
  ``A charter under this chapter shall require the charterer to carry, 
at the charterer's expense, insurance on the chartered vessel covering 
all marine and port risks, protection and indemnity risks, and all 
other hazards and liabilities, adequate to cover damages claimed 
against and losses sustained by the chartered vessel arising during the 
term of the charter. The insurance shall be in such form, in such 
amount, and with such companies as the Secretary of Transportation may 
require. In accordance with law, any of the insurance risks may be 
underwritten by the Secretary.
``Sec. 57520. Vessel maintenance
  ``(a) In General.--A charter under this chapter shall require the 
charterer, at the charterer's expense, to--
          ``(1) keep the chartered vessel in good repair and efficient 
        operating condition; and
          ``(2) make any repairs required by the Secretary of 
        Transportation.
  ``(b) Inspection.--The charter shall provide that the Secretary has 
the right to inspect the vessel at any time to ascertain its condition.
``Sec. 57521. Termination of charter during national emergency
  ``A charter under this chapter shall provide that during a national 
emergency proclaimed by the President or a period for which the 
President has proclaimed that the security of the national defense 
makes it advisable, the Secretary of Transportation may terminate the 
charter without cost to the United States Government on such notice to 
the charterer as the President determines.

                    ``SUBCHAPTER III--MISCELLANEOUS

``Sec. 57531. Construction and charter of vessels for unsuccessful 
                    routes
  ``(a) In General.--If the Secretary of Transportation finds that a 
trade route determined to be essential under section 50103 of this 
title cannot be successfully developed and maintained and the 
Secretary's replacement program cannot be achieved under private 
operation of the trade route by a citizen of the United States with 
vessels documented under the laws of the United States, without further 
aid by the United States Government in addition to the financial aid 
authorized under titles V and VI of the Merchant Marine Act, 1936, the 
Secretary, without advertisement or competition, may--
          ``(1) have constructed, in private shipyards or in navy 
        yards, vessels of the types necessary for the trade route; and
          ``(2) demise those new vessels or bareboat charter them to 
        the American-flag operator established on the trade route.
  ``(b) Amount of Charter Hire.--
          ``(1) In general.--The annual charter hire under subsection 
        (a) shall be at least 4 percent of the price (referred to in 
        this section as the `foreign cost') at which the vessel would 
        be sold if constructed under title V of the Merchant Marine 
        Act, 1936, plus--
                  ``(A) a percentage of the depreciated foreign cost 
                computed annually determined by the Secretary of the 
                Treasury, taking into consideration the current average 
                market yield on outstanding marketable obligations of 
                the Government with remaining periods to maturity 
                comparable to the term of the charter, adjusted to the 
                nearest one-eighth percent; and
                  ``(B) an allowance adequate in the judgment of the 
                Secretary of Transportation to cover administrative 
                costs.
          ``(2) Depreciation.--Depreciation under paragraph (1)(A) 
        shall be based on--
                  ``(A) a 25-year life for dry-cargo and passenger 
                vessels; and
                  ``(B) a 20-year life for tankers and other bulk 
                liquid carrier vessels.
  ``(c) Option To Purchase.--The charter may contain an option to the 
charterer to purchase the vessels from the Secretary of Transportation 
within 5 years after delivery under the charter, on the same terms and 
conditions as provided in title V of the Merchant Marine Act, 1936, for 
the purchase of new vessels from the Secretary. However--
          ``(1) the purchase price shall be the foreign cost less 
        depreciation to the date of purchase based on the useful life 
        specified in subsection (b)(2);
          ``(2) the required cash payment payable at the time of the 
        purchase shall be 25 percent of the purchase price;
          ``(3) the charter may provide that any part of the charter 
        hire paid in excess of the minimum charter hire provided for in 
        this section may be credited against the cash payment payable 
        at the time of the purchase;
          ``(4) the balance of the purchase price shall be paid within 
        the remaining years of useful life (as specified in subsection 
        (b)(2)) after the date of delivery of the vessel under the 
        charter and in approximately equal annual installments, except 
        that the first installment, which shall be payable on the next 
        ensuing anniversary date of the delivery under the charter, 
        shall be a proportionate part of the annual installment; and
          ``(5) interest shall be payable on the unpaid balances from 
        the date of purchase, at a rate not less than--
                  ``(A) a rate determined by the Secretary of the 
                Treasury, taking into consideration the current average 
                market yield on outstanding marketable obligations of 
                the Government with remaining periods to maturity 
                comparable to the average maturities of the loans, 
                adjusted to the nearest one-eighth percent; plus
                  ``(B) an allowance adequate in the judgment of the 
                Secretary of Transportation to cover administrative 
                costs.
  ``(d) Operation of Vessel.--
          ``(1) Permissible voyages.--The charter shall provide for 
        operation of the vessel exclusively--
                  ``(A) in foreign trade;
                  ``(B) on a round-the-world voyage;
                  ``(C) on a round voyage from the west coast of the 
                United States to a European port that includes an 
                intercoastal port of the United States;
                  ``(D) on a round voyage from the Atlantic coast of 
                the United States to the Orient that includes an 
                intercoastal port of the United States; or
                  ``(E) on a voyage in foreign trade on which the 
                vessel may stop at Hawaii or an island territory or 
                possession of the United States.
          ``(2) Domestic trade.--The charter shall provide if the 
        vessel is operated in domestic trade on any of the services 
        specified inparagraph (1), the charterer will pay annually to 
the Secretary of Transportation that proportion of \1/25\ of the 
difference between the domestic and foreign cost of the vessel as the 
gross revenue derived from the domestic trade bears to the gross 
revenue derived from the entire voyages completed during the preceding 
year.
``Sec. 57532. Operation of experimental vessels
  ``(a) Definition.--In this section, the term `experimental vessel' 
means a vessel owned by the United States Government (including a 
vessel in the National Defense Reserve Fleet) that has been 
constructed, reconditioned, or remodeled for experimental or testing 
purposes.
  ``(b) Authority To Operate.--The Secretary of Transportation, for the 
purpose of practical development, trial, and testing, may operate an 
experimental vessel under a bareboat charter or general agency 
agreement in the foreign or domestic trade of the United States or for 
use for the account of a department or agency of the Government, 
without regard to other provisions of this subtitle and other laws 
related to chartering and general agency operations. Not more than 10 
vessels may be operated and tested under this section in any one year.
  ``(c) Terms of Operation.--Operation of a vessel under this section 
shall be on terms the Secretary considers appropriate to carry out the 
purposes of this subtitle. A bareboat charter under this section shall 
be at reasonable rates and include restrictions the Secretary considers 
appropriate to protect the public interest, including provisions for 
recapture of profits under section 57517 of this title. A charter or 
general agency agreement under this section shall be reviewed annually 
to determine whether conditions exist to justify continuance of the 
charter or agreement.
  ``(d) Rights of Seamen.--A seaman engaged in vessel operations of the 
Secretary under this section and employed through a general agent in 
connection with a charter or agreement under this section is entitled 
to all the rights and remedies provided in sections 1(a) and (c), 3(c), 
and 4 of the Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 
1293(c), 1294).

                  ``Part G--Restrictions and Penalties

               ``CHAPTER 581--RESTRICTIONS AND PENALTIES

``Sec.
``58101.  Operating in domestic intercoastal or coastwise service.
``58102.  Default on payment or maintenance of reserves.
``58103.  Employing another person as managing or operating agent.
``58104.  Willful violation constitutes breach of contract or charter.
``58105.  Preferences for cargo in which charterer has interest.
``58106.  Concerted discriminatory activities.
``58107.  Discrimination at ports by water common carriers.
``58108.  Charges for transportation subject to subtitle IV of title 49.
``58109.  Penalties.
``Sec. 58101. Operating in domestic intercoastal or coastwise service
  ``(a) Prohibition.--A subsidy may not be awarded or paid to a 
contractor under the operating-differential subsidy program, and a 
vessel may not be chartered to a person under chapter 575 of this 
title, if the contractor or charterer, or a holding company, 
subsidiary, affiliate, or associate of the contractor or charterer, or 
an officer, director, agent, or executive thereof, directly or 
indirectly--
          ``(1) owns, charters, or operates a vessel engaged in the 
        domestic intercoastal or coastwise service; or
          ``(2) owns a pecuniary interest in a person that owns, 
        charters, or operates a vessel in the domestic intercoastal or 
        coastwise service.
  ``(b) Waiver.--A person may apply to the Secretary of Transportation 
for a waiver of subsection (a). Before deciding on the waiver, the 
Secretary shall give the applicant and other interested persons an 
opportunity for a hearing. The Secretary may not grant the waiver if 
the Secretary finds it would--
          ``(1) result in unfair competition to a person operating 
        exclusively in the domestic intercoastal or coastwise service; 
        or
          ``(2) be prejudicial to the objectives and policy of this 
        subtitle.
  ``(c) Continuous Operation Since 1935.--The Secretary shall grant an 
application under subsection (b) without requiring further proof that 
the public interest and convenience will be served and without further 
proceedings as to the competition in the route or trade, if the 
contractor or other person, or a predecessor in interest, was in bona-
fide operation as a common carrier by water in the domestic 
intercoastal or coastwise trade in 1935 over the route or in the trade 
for which the application is made and has so operated since that time 
or, if engaged in furnishing seasonal service only, was in bona-fide 
operation in 1935 during the season ordinarily covered by its 
operation, except in either event as to interruptions of service over 
which the applicant or its predecessor in interest had no control.
  ``(d) Diversion Into Intercoastal or Coastwise Operations.--If an 
application under subsection (b) is approved, a person referred to in 
this section may not divert, directly or indirectly, money, property, 
or any other thing of value, used in a foreign-trade operation for 
which a subsidy is paid by the United States Government, into 
intercoastal or coastwise operations.
``Sec. 58102. Default on payment or maintenance of reserves
  ``The Secretary of Transportation may supervise the number and 
compensation of all officers and employees of a contractor under the 
operating-differential subsidy program or a charterer under chapter 575 
of this title, receiving an operating-differential subsidy, if the 
contractor or charterer--
          ``(1) is in default on a mortgage, note, purchase contract, 
        or other obligation to the Secretary; or
          ``(2) has not maintained, in a manner satisfactory to the 
        Secretary, all of the reserves provided for in this subtitle.
``Sec. 58103. Employing another person as managing or operating agent
  ``(a) Prohibition.--Except with the written consent of the Secretary 
of Transportation, a contractor holding a contract under the operating-
differential subsidy program or under chapter 575 of this title may 
not--
          ``(1) employ another person as the managing or operating 
        agent of the operator; or
          ``(2) charter a vessel, on which an operating-differential 
        subsidy is to be paid, for operation by another person.
  ``(b) Applicability of Provisions to Charterer.--If a charter 
prohibited by this section is made, the person operating the chartered 
vessel is subject to all the provisions of this subtitle and the 
operating-differential subsidy program, including limitations of 
profits and salaries.
``Sec. 58104. Willful violation constitutes breach of contract or 
                    charter
  ``A willful violation of any provision of sections 58101-58103 of 
this title constitutes a breach of the contract or charter. On 
determining that a violation has occurred, the Secretary of 
Transportation may declare the contract or charter rescinded.
``Sec. 58105. Preferences for cargo in which charterer has interest
  ``A contractor receiving an operating-differential subsidy, or a 
charterer under chapter 575 of this title, may not unjustly 
discriminate in any manner so as to give preference, directly or 
indirectly, to cargo in which the contractor or charterer has a direct 
or indirect ownership, purchase, or vending interest.
``Sec. 58106. Concerted discriminatory activities
  ``(a) Prohibition.--A contractor receiving an operating-differential 
subsidy, or a charterer under chapter 575 of this title, may not 
continue as a party to or conform to an agreement with another carrier 
by water, or engage in a practice in concert with another carrier by 
water, that is unjustly discriminatory or unfair to any other citizen 
of the United States operating a common carrier by water employing only 
vessels documented under the laws of the United States on an 
established trade route from and to a United States port.
  ``(b) Government Payment Prohibited.--No payment or subsidy of any 
kind may be paid, directly or indirectly, out of funds of the 
UnitedStates Government to a contractor or charterer that has violated 
subsection (a).
  ``(c) Civil Action.--A person whose business or property is injured 
by a violation of subsection (a) may bring a civil action in the 
district court of the United States for the district in which the 
defendant resides, is found, or has an agent. If the person prevails, 
the person shall be awarded--
          ``(1) 3 times the damages; and
          ``(2) costs, including reasonable attorney fees.
``Sec. 58107. Discrimination at ports by water common carriers
  ``(a) Prohibition.--A common carrier by water may not, directly or 
indirectly, through an agreement, conference, association, 
understanding, or otherwise, prevent or attempt to prevent any other 
common carrier by water from serving any port described in subsection 
(b) at the same rates the first carrier charges at the nearest port 
already regularly served by it.
  ``(b) Ports.--A port referred to in subsection (a) is one that is--
          ``(1) designed for the accommodation of ocean-going vessels;
          ``(2) located on an improvement project authorized by law or 
        by a Federal agency; and
          ``(3) located within the continental limits of the United 
        States.
  ``(c) Other Authority Not Limited.--This section does not limit the 
authority otherwise vested in the Secretary of Transportation and the 
Federal Maritime Commission.
``Sec. 58108. Charges for transportation subject to subtitle IV of 
                    title 49
  ``(a) Prohibition.--A carrier may not charge, collect, or receive for 
transportation subject to subtitle IV of title 49 of persons or 
property, under any joint rate, fare, or charge, or under any export, 
import, or other proportional rate, fare, or charge, that is based in 
whole or in part on the fact that the persons or property affected are 
to be transported to, or have been transported from, a port in a 
territory or possession of the United States or in a foreign country, 
by a carrier by water in foreign commerce, any lower rate, fare, or 
charge than the carrier charges, collects, or receives for the 
transportation of persons or similar property for the same distance, in 
the same direction, and over the same route, in commerce wholly within 
the United States, unless the vessel used for the transportation is or 
was at the time of the transportation documented under the laws of the 
United States.
  ``(b) Suspension of Prohibition.--Whenever the Secretary of 
Transportation believes that adequate shipping facilities to or from 
any port in a territory or possession of the United States or a foreign 
country are not being provided by vessels documented under the laws of 
the United States, the Secretary shall certify this fact to the Surface 
Transportation Board. On receiving the certification, the Board may by 
order suspend the operation of subsection (a) with respect to the 
rates, fares, and charges for the transportation by rail of persons and 
property transported from or to be transported to those ports, for such 
time and under such terms and conditions as the Secretary may specify 
in the order or in any supplemental order.
  ``(c) Termination of Suspension.--Whenever the Secretary believes 
that adequate shipping facilities are being provided to those ports by 
vessels documented under the laws of the United States, and certifies 
that fact to the Board, the Board may order the termination of the 
suspension.
``Sec. 58109. Penalties
  ``(a) Individuals.--An individual convicted of violating section 
58101(d), 58103, or 58105 of this title shall be fined under title 18, 
imprisoned for at least one year but not more than 5 years, or both.
  ``(b) Organizations.--An organization convicted of committing an act 
prohibited by this subtitle shall be fined under title 18.
  ``(c) Ineligibility To Receive Benefits.--An individual or 
organization convicted of violating a section referred to in subsection 
(a) is ineligible, at the discretion of the Secretary of 
Transportation, to receive any benefit under the construction-
differential subsidy or operating-differential subsidy programs, or a 
charter under chapter 575 of this title, for 5 years after the 
conviction.''.

SEC. 8. SUBTITLE VI OF TITLE 46.

  (a) Redesignation.--Title 46, United States Code, is amended by 
redesignating subtitle VI as subtitle VII.
  (b) New Subtitle.--Title 46, United States Code, is amended by 
inserting after subtitle V the following:

          ``Subtitle VI--Clearance, Tonnage Taxes, and Duties

``Chapter                                                           Sec.

Arrival and Departure Requirements.................................60101
Tonnage Taxes and Light Money......................................60301
Discriminating Duties and Reciprocal Privileges....................60501

           ``CHAPTER 601--ARRIVAL AND DEPARTURE REQUIREMENTS

``Sec.
``60101.  Boarding arriving vessels before inspection.
``60102.  Production of certificate on entry.
``60103.  Oath of ownership on entry.
``60104.  Depositing certificates of documentation with consular 
          officers.
``60105.  Clearance of vessels.
``60106.  State inspection laws.
``60107.  Payment of fees on departing vessel.
``60108.  Duty to transport tendered cargo.
``60109.  Duty to transport money and securities of the United States 
          Government.
``Sec. 60101. Boarding arriving vessels before inspection
  ``(a) Regulations.--The Secretary of Homeland Security shall 
prescribe and enforce regulations on the boarding of a vessel arriving 
at a port of the United States before the vessel has been inspected and 
secured.
  ``(b) Criminal Penalty.--A person violating a regulation prescribed 
under this section shall be fined under title 18, imprisoned for not 
more than 6 months, or both.
  ``(c) Relationship to Other law.--This section shall be construed as 
supplementary to section 2279 of title 18.
``Sec. 60102. Production of certificate on entry
  ``On entry of a vessel documented under chapter 121 of this title, 
the master or other individual in charge of the vessel shall produce 
the certificate of documentation to the customs officer at the place 
where the vessel is entered. If the certificate is not produced, the 
vessel is not entitled to the privileges of a documented vessel.
``Sec. 60103. Oath of ownership on entry
  ``(a) Required Statement.--On entry of a vessel of the United States 
from a foreign port, the individual designated under subsection (b) 
shall state under oath that--
          ``(1) the vessel's certificate of documentation contains the 
        names of all the owners of the vessel; or
          ``(2) part of the ownership has been transferred since the 
        certificate was issued and, to the best of the individual's 
        knowledge and belief, the vessel is still owned only by 
        citizens of the United States.
  ``(b) Person To Make Statement.--The statement under subsection (a) 
shall be made by--
          ``(1) an owner if one resides at the port of entry; or
          ``(2) the master if an owner does not reside at the port of 
        entry.
  ``(c) Consequence of Not Making Statement.--If the appropriate 
individual does not make the statement required by this section, the 
vessel is not entitled to the privileges of a vessel of the United 
States.
``Sec. 60104. Depositing certificates of documentation with consular 
                    officers
  ``(a) Requirement of Master.--When a vessel owned by citizens of the 
United States, on a voyage from a port in the United States, arrives at 
a foreign port, the master of the vessel shall deposit the vessel's 
certificate of documentation with a consular officer at the foreign 
port if there is a consular officer at that port.
  ``(b) Return of Certificate.--When the master produces a clearance 
from the appropriate officer of the foreign port, the consular officer 
shall return the certificate of documentation to the master if the 
master has complied with the provisions of law related to the discharge 
of seamen in a foreign country and the payment of fees of consular 
officers.
  ``(c) Civil Penalty and Collection.--The master of a vessel failing 
to deposit the certificate of documentation as required by subsection 
(a) is liable to the United States Government for a civil penalty of 
$500. The consular officer shall bring an action to recover the penalty 
in any court of competent jurisdiction. The action shall be brought in 
the name of the consular officer for the benefit of the Government.
``Sec. 60105. Clearance of vessels
  ``(a) Vessels of the United States.--Except as otherwise provided by 
law, a vessel of the United States shall obtain clearance from the 
Secretary of Homeland Security before proceeding from a port or place 
in the United States--
          ``(1) for a foreign port or place;
          ``(2) for another port or place in the United States if the 
        vessel has on board foreign merchandise for which entry has not 
        been made; or
          ``(3) outside the territorial sea to visit a hovering vessel 
        or to receive merchandise while outside the territorial sea.
  ``(b) Other Vessels.--Except as otherwise provided by law, a vessel 
that is not a vessel of the United States shall obtain clearance from 
the Secretary before proceeding from a port or place in the United 
States--
          ``(1) for a foreign port or place;
          ``(2) for another port or place in the United States; or
          ``(3) outside the territorial sea to visit a hovering vessel 
        or to receive or deliver merchandise while outside the 
        territorial sea.
  ``(c) Regulations.--The Secretary may by regulation--
          ``(1) prescribe the manner in which clearance under this 
        section is to be obtained, including the documents, data, or 
        information which shall be submitted or transmitted, pursuant 
        to an authorized data interchange system, to obtain the 
        clearance;
          ``(2) permit clearance to be obtained before all requirements 
        for clearance are complied with, but only if the owner or 
        operator of the vessel files a bond in an amount set by the 
        Secretary conditioned on the compliance by the owner or 
        operator with all specified requirements for clearance within a 
        time period (not exceeding 4 business days) established by the 
        Secretary; and
          ``(3) permit clearance to be obtained at a place other than a 
        designated port of entry, under conditions the Secretary may 
        prescribe.
``Sec. 60106. State inspection laws
  ``When State law requires a certificate of inspection for goods 
carried on a vessel, a vessel transporting the goods may not be cleared 
until the certificate is produced.
``Sec. 60107. Payment of fees on departing vessel
  ``A departing vessel may be cleared only when all legal fees that 
have accrued on the vessel are paid and proof of payment is presented 
to the individual granting the clearance.
``Sec. 60108. Duty to transport tendered cargo
  ``Clearance may be refused to a vessel or vehicle transporting cargo 
destined for a domestic or foreign port when the owner, master, or 
other individual in charge refuses to accept cargo tendered in good 
condition, with proper charges, for the same or an intermediate port by 
a citizen of the United States. This section does not apply if the 
vessel or vehicle is already fully loaded (giving appropriate 
consideration to its proper loading) or is not adaptable to transport 
the tendered cargo.
``Sec. 60109. Duty to transport money and securities of the United 
                    States Government
  ``Before being given clearance, a vessel owned by a citizen of the 
United States and bound on a voyage from a port in the United States to 
another port in the United States or in a foreign country, or on a 
voyage from a port in a foreign country to a port in the United States, 
shall receive on board any bullion, coin, notes, bonds, or other 
securities of the United States Government that an agency, consular 
officer, or other agent of the Government offers. The vessel shall 
transport the items securely and deliver them promptly to the proper 
authorities or consignees on arriving at the port of destination. 
Compensation shall be paid for services provided under this section 
that is equal to compensation paid to other carriers in the ordinary 
transaction of business.

              ``CHAPTER 603--TONNAGE TAXES AND LIGHT MONEY

``Sec.
``60301.  Regular tonnage taxes.
``60302.  Special tonnage taxes.
``60303.  Light money.
``60304.  Presidential suspension of tonnage taxes and light money.
``60305.  Vessels in distress.
``60306.  Vessels not engaged in trade.
``60307.  Vessels engaged in coastwise trade or the fisheries.
``60308.  Vessels engaged in Great Lakes trade.
``60309.  Passenger vessels making trips between ports of the United 
          States and foreign ports.
``60310.  Vessels making daily trips on interior waters.
``60311.  Hospital vessels in time of war.
``60312.  Rights under treaties preserved.
``Sec. 60301. Regular tonnage taxes
  ``(a) Lower Rate.--A tax is imposed at the rate of 2 cents per ton 
(but not more than a total of 10 cents per ton per year) at each entry 
in a port of the United States of--
          ``(1) a vessel entering from a foreign port or place in North 
        America, Central America, the West Indies Islands, the Bahama 
        Islands, the Bermuda Islands, or the coast of South America 
        bordering the Caribbean Sea; or
          ``(2) a vessel returning to the same port or place in the 
        United States from which it departed, and not entering the 
        United States from another port or place, except--
                  ``(A) a vessel of the United States;
                  ``(B) a recreational vessel (as defined in section 
                2101 of this title); or
                  ``(C) a barge.
  ``(b) Higher Rate.--A tax is imposed at the rate of 6 cents per ton 
(but not more than a total of 30 cents per ton per year) on a vessel at 
each entry in a port of the United States from a foreign port or place 
not named in subsection (a)(1).
  ``(c) Exception for Vessels Entering Other Than by Sea.--Subsection 
(a) does not apply to a vessel entering other than by sea from a 
foreign port or place at which tonnage, lighthouse, or other equivalent 
taxes are not imposed on vessels of the United States.
``Sec. 60302. Special tonnage taxes
  ``(a) Entry From Foreign Port or Place.--Regardless of whether a tax 
is imposed under section 60301 of this title, a tax is imposed on a 
vessel at each entry in a port of the United States from a foreign port 
or place at the following rates:
          ``(1) 30 cents per ton on a vessel built in the United States 
        but owned in any part by a subject of a foreign country.
          ``(2) 50 cents per ton on other vessels not of the United 
        States.
          ``(3) 50 cents per ton on a vessel of the United States 
        having an officer who is not a citizen of the United States.
          ``(4) $2 per ton on a foreign vessel entering from a foreign 
        port or place at which vessels of the United States are not 
        ordinarily allowed to enter and trade.
  ``(b) Vessels Not of the United States Transporting Property Between 
Districts.--Regardless of whether a tax is imposed under section 60301 
of this title, a tax of 50 cents per ton is imposed on a vessel not of 
the United States at each entry in one customs district from 
anotherdistrict when transporting goods loaded in one district to be 
delivered in another district.
  ``(c) Exception for Vessels Becoming Documented.--The tax of 50 cents 
per ton under this section does not apply to a vessel that--
          ``(1) is owned only by citizens of the United States; and
          ``(2) after entering a port of the United States, becomes 
        documented as a vessel of the United States before leaving that 
        port.
``Sec. 60303. Light money
  ``(a) Imposition of Tax.--A tax of 50 cents per ton, to be called 
`light money', is imposed on a vessel not of the United States at each 
entry in a port of the United States. This tax shall be imposed and 
collected under the same regulations that apply to tonnage taxes.
  ``(b) Exception for Vessels Owned by Citizens.--
          ``(1) In general.--Subsection (a) does not apply to a vessel 
        owned only by citizens of the United States if--
                  ``(A) the vessel is carrying a regular document 
                issued by a customhouse of the United States proving 
                the vessel to be owned only by citizens of the United 
                States; and
                  ``(B) on entry of the vessel from a foreign port, the 
                individual designated under paragraph (2) states under 
                oath that--
                          ``(i) the document contains the names of all 
                        the owners of the vessel; or
                          ``(ii) part of the ownership has been 
                        transferred since the document was issued and, 
                        to the best of that individual's knowledge and 
                        belief, the vessel is still owned only by 
                        citizens of the United States.
          ``(2) Person to make statement.--The statement under 
        paragraph (1)(B) shall be made by--
                  ``(A) an owner if one resides at the port of entry; 
                or
                  ``(B) the master if an owner does not reside at the 
                port of entry.
  ``(c) Exception for Vessels Becoming Documented.--Subsection (a) 
section does not apply to a vessel that--
          ``(1) is owned only by citizens of the United States; and
          ``(2) after entering a port of the United States, becomes 
        documented as a vessel of the United States before leaving that 
        port.
``Sec. 60304. Presidential suspension of tonnage taxes and light money
  ``If the President is satisfied that the government of a foreign 
country does not impose discriminating or countervailing duties to the 
disadvantage of the United States, the President shall suspend the 
imposition of special tonnage taxes and light money under sections 
60302 and 60303 of this title on vessels of that country.
``Sec. 60305. Vessels in distress
  ``A vessel is exempt from tonnage taxes and light money when it 
enters because it is in distress.
``Sec. 60306. Vessels not engaged in trade
  ``A vessel is exempt from tonnage taxes and light money when not 
engaged in trade.
``Sec. 60307. Vessels engaged in coastwise trade or the fisheries
  ``A vessel with a registry endorsement or a coastwise endorsement, 
trading from one port in the United States to another port in the 
United States or employed in the bank, whale, or other fisheries, is 
exempt from tonnage taxes and light money.
``Sec. 60308. Vessels engaged in Great Lakes trade
  ``A documented vessel with a registry endorsement, engaged in foreign 
trade on the Great Lakes or their tributary or connecting waters in 
trade with Canada, does not become subject to tonnage taxes or light 
money because of that trade.
``Sec. 60309. Passenger vessels making trips between ports of the 
                    United States and foreign ports
  ``A passenger vessel making at least 3 trips per week between a port 
of the United States and a foreign port is exempt from tonnage taxes 
and light money.
``Sec. 60310. Vessels making daily trips on interior waters
  ``A vessel making regular daily trips between a port of the United 
States and a port of Canada only on interior waters not navigable to 
the ocean is exempt from tonnage taxes and light money, except on its 
first clearing each year.
``Sec. 60311. Hospital vessels in time of war
  ``In time of war, a hospital vessel is exempt from tonnage taxes, 
light money, and pilotage charges in the ports of the United States if 
the vessel is one for which the conditions of the international 
convention for the exemption of hospital ships from taxation in time of 
war, concluded at The Hague on December 21, 1904, are satisfied. The 
President by proclamation shall name the vessels for which the 
conditions are satisfied and state when the exemption begins and ends.
``Sec. 60312. Rights under treaties preserved
  ``This chapter and chapter 605 of this title do not affect a right or 
privilege of a foreign country relating to tonnage taxes or other 
duties on vessels under a law or treaty of the United States.

     ``CHAPTER 605--DISCRIMINATING DUTIES AND RECIPROCAL PRIVILEGES

``Sec.
``60501.  Vessels allowed to import.
``60502.  Discriminating duty on goods imported in foreign vessels or 
          from contiguous countries.
``60503.  Reciprocal suspension of discriminating duties.
``60504.  Reciprocal privileges for recreational vessels.
``60505.  Retaliatory suspension of commercial privileges.
``60506.  Retaliation against British dominions of North America.
``60507.  Suspension of free passage through Saint Marys Falls Canal.
``Sec. 60501. Vessels allowed to import
  ``(a) In General.--Except as otherwise provided by treaty, goods may 
be imported into the United States from a foreign port or place only 
in--
          ``(1) a vessel of the United States; or
          ``(2) a foreign vessel owned only by citizens or subjects of 
        the country--
                  ``(A) in which the goods are grown, produced, or 
                manufactured; or
                  ``(B) from which the goods can only be, or most 
                usually are, first shipped for transportation.
  ``(b) Exception for Vessels of Countries Not Maintaining Similar 
Restrictions.--Subsection (a) does not apply to a vessel of a foreign 
country that does not maintain a similar restriction against United 
States documented vessels.
  ``(c) Exception for Vessels Becoming Documented.--Subsection (a) does 
not apply to a vessel that--
          ``(1) is owned only by citizens of the United States; and
          ``(2) after entering a port of the United States, becomes 
        documented as a vessel of the United States before leaving that 
        port.
  ``(d) Seizure and Forfeiture.--If goods are imported in violation of 
this section, the goods and the vessel in which they are imported, 
along with its equipment and other cargo, may be seized by and 
forfeited to the United States Government.
``Sec. 60502. Discriminating duty on goods imported in foreign vessels 
                    or from contiguous countries
  ``(a) Imposition of Duty.--A discriminating duty of 10 percent ad 
valorem (in addition to other duties imposed by law) is imposed on 
goods--
          ``(1) imported in a vessel not of the United States unless 
        the vessel--
                  ``(A) is entitled by law or treaty to enter the ports 
                of the United States on payment of the same duties as 
                are payable on goods imported in a vessel of the United 
                States; or
                  ``(B)(i) is owned only by citizens of the United 
                States; and
                  ``(ii) after entering a port of the United States, 
                becomes documented as a vessel of the United States 
                before leaving that port; or
          ``(2) produced or manufactured in a foreign country not 
        contiguous to the United States and imported from a country 
        contiguous to the United States, unless imported in the usual 
        course of strictly retail trade.
  ``(b) Seizure and Forfeiture.--If goods are imported without payment 
of the duty required by this section, the goods and the vessel in which 
they are imported may be seized by, and forfeited to, the United States 
Government.
``Sec. 60503. Reciprocal suspension of discriminating duties
  ``(a) General Authority.--On receiving satisfactory proof from the 
government of a foreign country that it has suspended, in any part, the 
imposition of discriminating duties for any class of vessels owned by 
citizens of the United States or goods imported in those vessels, the 
President may proclaim a reciprocal suspension of discriminating duties 
for the same class of vessels owned by citizens of that country or 
goods imported in those vessels.
  ``(b) Effective and Expiration Dates.--A suspension under this 
section takes effect retroactively from the date the President received 
the proof from the foreign government, and expires when that government 
stops granting the reciprocal suspension.
``Sec. 60504. Reciprocal privileges for recreational vessels
  ``When the President is satisfied that yachts owned by residents of 
the United States and used only for pleasure are allowed to arrive at, 
depart from, and cruise in the waters of a foreign port without 
entering, clearing, or paying any duties or fees (including cruising 
license fees), the Secretary of Homeland Security may allow yachts from 
that foreign port used only for pleasure to arrive at and depart from 
the ports of the United States and to cruise in the waters of the 
United States without paying any duties or fees. However, the Secretary 
may require foreign yachts to obtain a license to cruise in the waters 
of the United States. The license shall be in the form prescribed by 
the Secretary and contain limitations about length of time, direction, 
place of cruising and action, and other matters the Secretary considers 
appropriate. The license shall be issued without cost to the yacht.
``Sec. 60505. Retaliatory suspension of commercial privileges
  ``(a) General Authority.--The President may proclaim a suspension of 
commercial privileges to vessels of a foreign country when--
          ``(1) vessels of that country have been given the same 
        commercial privileges in the ports and waters of the United 
        States given to vessels of the United States (except the 
        privilege of engaging in coastwise commerce); and
          ``(2) vessels of the United States are denied commercial 
        privileges in the ports or waters of that country given to 
        vessels of that country.
  ``(b) Application.--A suspension under this section shall apply to 
the same commercial privileges denied to vessels of the United States 
in the ports or waters of the foreign country, and to the same class of 
vessels of that country as the class of vessels of the United States 
denied the privileges.
  ``(c) Effective Date.--The President shall designate the effective 
date of the suspension in the proclamation.
  ``(d) Penalties.--
          ``(1) Seizure and forfeiture.--If the master, officer, or 
        agent of a vessel of a foreign country does an act for the 
        vessel in the ports or waters of the United States in violation 
        of a proclamation issued under this section, the vessel and the 
        goods on the vessel may be seized by, and forfeited to, the 
        United States Government.
          ``(2) Fine or imprisonment.--A person opposing an official of 
        the Government enforcing this section shall be fined under 
        title 18, imprisoned for not more than 2 years, or both.
``Sec. 60506. Retaliation against British dominions of North America
  ``(a) General Authority.--The President by proclamation may prohibit 
vessels of the British dominions of North America, their masters and 
crews, and products of or coming from those dominions, from entering 
waters, ports, or places of the United States when the President is 
satisfied that--
          ``(1) fishermen or fishing vessels of the United States in 
        waters, ports, or places of the British dominions of North 
        America are being or recently have been--
                  ``(A) denied rights provided by law or treaty;
                  ``(B) subjected to unreasonable restrictions in the 
                exercise of those rights; or
                  ``(C) otherwise harassed;
          ``(2) fishermen or fishing vessels of the United States, 
        having a permit under the laws of the United States to dock or 
        trade at a port or place in the British dominions of North 
        America, are being or recently have been--
                  ``(A) denied the privilege of entering the port or 
                place in the same manner and under the same regulations 
                applicable to trading vessels of the most-favored-
                nation;
                  ``(B) prevented from buying supplies allowed to be 
                sold to trading vessels of the most-favored-nation; or
                  ``(C) otherwise harassed; or
          ``(3) other vessels of the United States or their masters or 
        crews in waters, ports, or places of the British dominions of 
        North America are being or recently have been--
                  ``(A) denied privileges given to vessels of the most-
                favored-nation or their masters or crews; or
                  ``(B) otherwise harassed.
  ``(b) Coverage and Exceptions.--The President may apply a 
proclamation under this section to any of the subjects named, and may 
include exceptions for vessels in distress or need of supplies. The 
President may change, revoke, and renew the proclamation.
  ``(c) Penalties.--A person violating a proclamation issued under this 
section shall be fined under title 18, imprisoned for not more than 2 
years, or both. A vessel or goods found in waters, ports, or places of 
the United States in violation of the proclamation may be seized by, 
and forfeited to, the United States Government.
``Sec. 60507. Suspension of free passage through Saint Marys Falls 
                    Canal
  ``(a) Purpose.--The purpose of this section is to secure reciprocal 
advantages for the citizens, ports, and vessels of the United States.
  ``(b) General Authority.--When the President is satisfied that 
vessels of the United States, or passengers or cargo being transported 
to a port of the United States, are prohibited from passing through a 
canal or lock connected with the navigation of the Saint Lawrence 
River, the Great Lakes, or their connecting waterways, or burdened in 
that passage by tolls or other means that are unreasonable in view of 
the free passage through the Saint Marys Falls Canal allowed to vessels 
of all countries, the President by proclamation may suspend the right 
of free passage through the Saint Marys Falls Canal for vessels owned 
by subjects of the country imposing the prohibition, tolls, or other 
burdens and for passengers and cargo being transported to the ports of 
that country, even when carried in vessels of the United States. The 
suspension shall apply to the extent and for the time the President 
considers appropriate.
  ``(c) Imposition of Toll.--
          ``(1) In general.--During a suspension under this section, 
        the President shall impose a toll of not more than $2 per ton 
        on cargo and not more than $5 on each passenger.
          ``(2) Exceptions.--Notwithstanding paragraph (1), a toll may 
        not be imposed on passengers or cargo landed at Ogdensburg, New 
        York, or any port west of Ogdensburg and south of a line drawn 
        from the northern boundary of New York through the Saint 
        Lawrence River, the Great Lakes, and their connecting channels 
        to the northern boundary of Minnesota.
  ``(d) Collection of Toll.--
          ``(1) In general.--A toll imposed under this section shall be 
        collected under regulations prescribed by the Secretary of 
        Homeland Security. The Secretary may require the master of a 
        vessel to provide a sworn statement of the amount and kind of 
        cargo, the number of passengers, and the destination of the 
        passengers and cargo.
          ``(2) Proof of landing.--When applicable, the Secretary also 
        may require satisfactory proof that the passengers and cargo 
        were landed at a port described in subsection (c)(2). Until 
        that proof is provided, the Secretary may assume the passengers 
        and cargo were not landed at such a port, and the amount of a 
        toll that otherwise would be imposed is a lien enforceable 
        against the vessel when found in the waters of the United 
        States.''.

SEC. 9. SUBTITLE VII OF TITLE 46.

  Subtitle VII of title 46, United States Code, as redesignated by 
section 8(a) of this Act, is amended as follows:
          (1) The subtitle heading and analysis are amended to read as 
        follows:

             ``Subtitle VII--Security and Drug Enforcement

``Chapter                                                           Sec.

Port Security......................................................70101
Maritime Security..................................................70301
Maritime Drug Law Enforcement...................................70501''.
          (2) Add after chapter 701 the following:

                    ``CHAPTER 703--MARITIME SECURITY

``Sec.
``70301.  Definitions.
``70302.  International measures for seaport and vessel security.
``70303.  Security standards at foreign ports.
``70304.  Travel advisories on security at foreign ports.
``70305.  Suspension of passenger services.
``70306.  Report on terrorist threats.
``Sec. 70301. Definitions
  ``In this chapter:
          ``(1) Common carrier.--The term `common carrier' has the 
        meaning given that term in section 40102 of this title.
          ``(2) Passenger vessel.--The term `passenger vessel' has the 
        meaning given that term in section 2101 of this title.
``Sec. 70302. International measures for seaport and vessel security
  ``Congress encourages the President to continue to seek agreement on 
international seaport and vessel security through the International 
Maritime Organization. In developing an agreement, each member country 
of the International Maritime Organization should consult with 
appropriate private sector interests in that country. The agreement 
would establish seaport and vessel security measures and could 
include--
          ``(1) seaport screening of cargo and baggage similar to that 
        done at airports;
          ``(2) security measures to restrict access to cargo, vessels, 
        and dockside property to authorized personnel only;
          ``(3) additional security on board vessels;
          ``(4) licensing or certification of compliance with 
        appropriate security standards; and
          ``(5) other appropriate measures to prevent unlawful acts 
        against passengers and crews on vessels.
``Sec. 70303. Security standards at foreign ports
  ``(a) Definition.--In this section, except when referring to the 
Secretary of State, the term `Secretary' means the Secretary of the 
department in which the Coast Guard is operating.
  ``(b) General Requirements.--The Secretary shall develop and 
implement a plan to assess the effectiveness of the security measures 
maintained at foreign ports that the Secretary, in consultation with 
the Secretary of State, determines pose a high risk of acts of 
terrorism against passenger vessels. In carrying out this subsection, 
the Secretary shall consult with the Secretary of State about the 
terrorist threat that exists in each country and poses a high risk of 
acts of terrorism against passenger vessels.
  ``(c) Notice and Recommendations to Other Countries.--If the 
Secretary, after implementing the plan under subsection (b), determines 
that a port does not maintain and administer effective security 
measures, the Secretary of State (after being informed by the 
Secretary) shall--
          ``(1) notify the appropriate government authorities of the 
        country in which the port is located of the determination; and
          ``(2) recommend steps necessary to bring the security 
        measures at that port up to the standard used by the Secretary 
        in making the assessment under subsection (b).
  ``(d) Antiterrorism Assistance.--The President is encouraged to 
provide antiterrorism assistance related to maritime security under 
chapter 8 of part II of the Foreign Assistance Act of 1961 (22 U.S.C. 
2349aa et seq.) to foreign countries, especially for a port that the 
Secretary determines under subsection (c) does not maintain and 
administer effective security measures.
``Sec. 70304. Travel advisories on security at foreign ports
  ``(a) General Requirements.--On being notified by the Secretary of 
Transportation that the Secretary has determined that a condition 
exists that threatens the safety or security of passengers, passenger 
vessels, or crew traveling to or from a foreign port that the Secretary 
has determined under section 70303(c) of this title does not maintain 
and administer effective security measures, the Secretary of State 
immediately shall issue a travel advisory for that port. The Secretary 
of State shall take the necessary steps to widely publicize the travel 
advisory.
  ``(b) Lifting Advisories.--A travel advisory issued under subsection 
(a) may be lifted only if the Secretary of Transportation, in 
consultation with the Secretary of State, has determined that effective 
security measures are maintained and administered at the port.
  ``(c) Notice to Congress.--The Secretary of State shall notify 
Congress immediately of any change in the status of a travel advisory 
issued under this section.
``Sec. 70305. Suspension of passenger services
  ``(a) General Authority.--Whenever the President determines that a 
foreign nation permits the use of territory under its jurisdiction as a 
base of operations or training for, or as a sanctuary for, or in any 
way arms, aids, or abets, a terrorist or terrorist group that knowingly 
uses the illegal seizure of passenger vessels or the threat thereof as 
an instrument of policy, the President may suspend the right of any 
passenger vessel common carrier to operate to or from, and the right of 
any passenger vessel of the United States to use, a port in that 
foreign nation for passenger service. The suspension may be without 
notice or hearing and for as long as the President determines is 
necessary to ensure the security of passenger vessels against unlawful 
seizure.
  ``(b) Prohibition.--A passenger vessel common carrier, or a passenger 
vessel of the United States, may not operate in violation of a 
suspension under this section.
  ``(c) Penalties.--
          ``(1) Denial of entry.--If a person operates a vessel in 
        violation of this section, the Secretary of the department in 
        which the CoastGuard is operating may deny the vessels of that 
person entry to ports of the United States.
          ``(2) Civil penalty.--A person violating this section is 
        liable to the United States Government for a civil penalty of 
        not more than $50,000. Each day a vessel uses a prohibited port 
        is a separate violation.
``Sec. 70306. Report on terrorist threats
  ``(a) Content.--Not later than February 28 of each year, the 
Secretary of Transportation shall submit a report to Congress on the 
threat from acts of terrorism to United States ports and vessels 
operating from those ports. The Secretary shall include a description 
of activities undertaken under title I of the Maritime Transportation 
Security Act of 2002 (Public Law 107-295, 116 Stat. 2066) and an 
analysis of the effect of those activities on port security against 
acts of terrorism.
  ``(b) Submission.--The report shall be submitted to the Committee on 
International Relations and the Committee on Transportation and 
Infrastructure of the House of Representatives and the Committee on 
Foreign Relations and the Committee on Commerce, Science, and 
Transportation of the Senate. Any classified information in the report 
shall be submitted separately as an addendum.

              ``CHAPTER 705--MARITIME DRUG LAW ENFORCEMENT

``Sec.
``70501.  Findings and declarations.
``70502.  Definitions.
``70503.  Manufacture, distribution, or possession of controlled 
          substances on vessels.
``70504.  Jurisdiction and venue.
``70505.  Failure to comply with international law as a defense.
``70506.  Penalties.
``70507.  Forfeitures.
``Sec. 70501. Findings and declarations
  ``Congress finds and declares that trafficking in controlled 
substances aboard vessels is a serious international problem, is 
universally condemned, and presents a specific threat to the security 
and societal well-being of the United States.
``Sec. 70502. Definitions
  ``(a) Application of Other Definitions.--The definitions in section 
102 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 
(21 U.S.C. 802) apply to this chapter.
  ``(b) Vessel of the United States.--In this chapter, the term `vessel 
of the United States' means--
          ``(1) a vessel documented under chapter 121 of this title or 
        numbered as provided in chapter 123 of this title;
          ``(2) a vessel owned in any part by an individual who is a 
        citizen of the United States, the United States Government, the 
        government of a State or political subdivision of a State, or a 
        corporation incorporated under the laws of the United States or 
        of a State, unless--
                  ``(A) the vessel has been granted the nationality of 
                a foreign nation under article 5 of the 1958 Convention 
                on the High Seas; and
                  ``(B) a claim of nationality or registry for the 
                vessel is made by the master or individual in charge at 
                the time of the enforcement action by an officer or 
                employee of the United States who is authorized to 
                enforce applicable provisions of United States law; and
          ``(3) a vessel that was once documented under the laws of the 
        United States and, in violation of the laws of the United 
        States, was sold to a person not a citizen of the United States 
        or placed under foreign registry or a foreign flag, whether or 
        not the vessel has been granted the nationality of a foreign 
        nation.
  ``(c) Vessel Subject to the Jurisdiction of the United States.--
          ``(1) In general.--In this chapter, the term `vessel subject 
        to the jurisdiction of the United States' includes--
                  ``(A) a vessel without nationality;
                  ``(B) a vessel assimilated to a vessel without 
                nationality under paragraph (2) of article 6 of the 
                1958 Convention on the High Seas;
                  ``(C) a vessel registered in a foreign nation if the 
                flag nation has consented or waived objection to the 
                enforcement of United States law by the United States;
                  ``(D) a vessel in the customs waters of the United 
                States;
                  ``(E) a vessel in the territorial waters of a foreign 
                nation if the nation consents to the enforcement of 
                United States law by the United States; and
                  ``(F) a vessel in the contiguous zone of the United 
                States, as defined in Presidential Proclamation 7219 of 
                September 2, 1999 (43 U.S.C. 1331 note), that--
                          ``(i) is entering the United States;
                          ``(ii) has departed the United States; or
                          ``(iii) is a hovering vessel as defined in 
                        section 401 of the Tariff Act of 1930 (19 
                        U.S.C. 1401).
          ``(2) Consent or waiver of objection.--Consent or waiver of 
        objection by a foreign nation to the enforcement of United 
        States law by the United States under paragraph (1)(C) or (E)--
                  ``(A) may be obtained by radio, telephone, or similar 
                oral or electronic means; and
                  ``(B) is proved conclusively by certification of the 
                Secretary of State or the Secretary's designee.
  ``(d) Vessel Without Nationality.--
          ``(1) In general.--In this chapter, the term `vessel without 
        nationality' includes--
                  ``(A) a vessel aboard which the master or individual 
                in charge makes a claim of registry that is denied by 
                the flag nation whose registry is claimed;
                  ``(B) a vessel aboard which the master or individual 
                in charge fails, on request of an officer of the United 
                States authorized to enforce applicable provisions of 
                United States law, to make a claim of nationality or 
                registry for that vessel; and
                  ``(C) a vessel aboard which the master or individual 
                in charge makes a claim of registry and for which the 
                claimed nation of registry does not affirmatively and 
                unequivocally assert that the vessel is of its 
                nationality.
          ``(2) Claim of registry.--A claim of registry under paragraph 
        (1)(A) or (C) may be verified or denied by radio, telephone, or 
        similar oral or electronic means. The denial of such a claim by 
        the claimed flag nation is proved conclusively by certification 
        of the Secretary of State or the Secretary's designee.
  ``(e) Claim of Nationality or Registry.--A claim of nationality or 
registry under this section includes only--
          ``(1) possession on board the vessel and production of 
        documents evidencing the vessel's nationality as provided in 
        article 5 of the 1958 Convention on the High Seas;
          ``(2) flying its flag nation's ensign or flag; or
          ``(3) a verbal claim of nationality or registry by the master 
        or individual in charge of the vessel.
``Sec. 70503. Manufacture, distribution, or possession of controlled 
                    substances on vessels
  ``(a) Prohibitions.--An individual may not knowingly or intentionally 
manufacture or distribute, or possess with intent to manufacture or 
distribute, a controlled substance on board--
          ``(1) a vessel of the United States or a vessel subject to 
        the jurisdiction of the United States; or
          ``(2) any vessel if the individual is a citizen of the United 
        States or a resident alien of the United States.
  ``(b) Extension Beyond Territorial Jurisdiction.--Subsection (a) 
applies even though the act is committed outside the territorial 
jurisdiction of the United States.
  ``(c) Nonapplication.--
          ``(1) In general.--Subject to paragraph (2), subsection (a) 
        does not apply to--
                  ``(A) a common or contract carrier or an employee of 
                the carrier who possesses or distributes a controlled 
                substance in the lawful and usual course of the 
                carrier's business; or
                  ``(B) a public vessel of the United States or an 
                individual on board the vessel who possesses or 
                distributes a controlled substance in the lawful course 
                of the individual's duties.
          ``(2) Entered in manifest.--Paragraph (1) applies only if the 
        controlled substance is part of the cargo entered in the 
        vessel's manifest and is intended to be imported lawfully into 
        the country of destination for scientific, medical, or other 
        lawful purposes.
  ``(d) Burden of Proof.--The United States Government is not required 
to negative a defense provided by subsection (c) in a complaint, 
information, indictment, or other pleading or in a trial or other 
proceeding. The burden of going forward with the evidence supporting 
the defense is on the person claiming its benefit.
``Sec. 70504. Jurisdiction and venue
  ``(a) Jurisdiction.--Jurisdiction of the United States with respect 
to a vessel subject to this chapter is not an element of an offense. 
Jurisdictional issues arising under this chapter are preliminary 
questions of law to be determined solely by the trial judge.
  ``(b) Venue.--A person violating section 70503 of this title shall be 
tried in the district court of the United States for--
          ``(1) the district at which the person enters the United 
        States; or
          ``(2) the District of Columbia.
``Sec. 70505. Failure to comply with international law as a defense
  ``A person charged with violating section 70503 of this title does 
not have standing to raise a claim of failure to comply with 
international law as a basis for a defense. A claim of failure to 
comply with international law in the enforcement of this chapter may be 
made only by a foreign nation. A failure to comply with international 
law does not divest a court of jurisdiction and is not a defense to a 
proceeding under this chapter.
``Sec. 70506. Penalties
  ``(a) Violations.--A person violating section 70503 of this title 
shall be punished as provided in section 1010 of the Comprehensive Drug 
Abuse Prevention and Control Act of 1970 (21 U.S.C. 960). However, if 
the offense is a second or subsequent offense as provided in section 
1012(b) of that Act (21 U.S.C. 962(b)), the person shall be punished as 
provided in section 1012 of that Act (21 U.S.C. 962).
  ``(b) Attempts and Conspiracies.--A person attempting or conspiring 
to violate section 70503 of this title is subject to the same penalties 
as provided for violating section 70503.
``Sec. 70507. Forfeitures
  ``(a) In General.--Property described in section 511(a) of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 
881(a)) that is used or intended for use to commit, or to facilitate 
the commission of, an offense under section 70503 of this title may be 
seized and forfeited in the same manner that similar property may be 
seized and forfeited under section 511 of that Act (21 U.S.C. 881).
  ``(b) Prima Facie Evidence of Violation.--Practices commonly 
recognized as smuggling tactics may provide prima facie evidence of 
intent to use a vessel to commit, or to facilitate the commission of, 
an offense under section 70503 of this title, and may support seizure 
and forfeiture of the vessel, even in the absence of controlled 
substances aboard the vessel. The following indicia, among others, may 
be considered, in the totality of the circumstances, to be prima facie 
evidence that a vessel is intended to be used to commit, or to 
facilitate the commission of, such an offense:
          ``(1) The construction or adaptation of the vessel in a 
        manner that facilitates smuggling, including--
                  ``(A) the configuration of the vessel to ride low in 
                the water or present a low hull profile to avoid being 
                detected visually or by radar;
                  ``(B) the presence of any compartment or equipment 
                that is built or fitted out for smuggling, not 
                including items such as a safe or lock-box reasonably 
                used for the storage of personal valuables;
                  ``(C) the presence of an auxiliary tank not installed 
                in accordance with applicable law or installed in such 
                a manner as to enhance the vessel's smuggling 
                capability;
                  ``(D) the presence of engines that are excessively 
                over-powered in relation to the design and size of the 
                vessel;
                  ``(E) the presence of materials used to reduce or 
                alter the heat or radar signature of the vessel and 
                avoid detection;
                  ``(F) the presence of a camouflaging paint scheme, or 
                of materials used to camouflage the vessel, to avoid 
                detection; or
                  ``(G) the display of false vessel registration 
                numbers, false indicia of vessel nationality, false 
                vessel name, or false vessel homeport.
          ``(2) The presence or absence of equipment, personnel, or 
        cargo inconsistent with the type or declared purpose of the 
        vessel.
          ``(3) The presence of excessive fuel, lube oil, food, water, 
        or spare parts, inconsistent with legitimate vessel operation, 
        inconsistent with the construction or equipment of the vessel, 
        or inconsistent with the character of the vessel's stated 
        purpose.
          ``(4) The operation of the vessel without lights during times 
        lights are required to be displayed under applicable law or 
        regulation and in a manner of navigation consistent with 
        smuggling tactics used to avoid detection by law enforcement 
        authorities.
          ``(5) The failure of the vessel to stop or respond or heave 
        to when hailed by government authority, especially where the 
        vessel conducts evasive maneuvering when hailed.
          ``(6) The declaration to government authority of apparently 
        false information about the vessel, crew, or voyage or the 
        failure to identify the vessel by name or country of 
        registration when requested to do so by government authority.
          ``(7) The presence of controlled substance residue on the 
        vessel, on an item aboard the vessel, or on an individual 
        aboard the vessel, of a quantity or other nature that 
        reasonably indicates manufacturing or distribution activity.
          ``(8) The use of petroleum products or other substances on 
        the vessel to foil the detection of controlled substance 
        residue.
          ``(9) The presence of a controlled substance in the water in 
        the vicinity of the vessel, where given the currents, weather 
        conditions, and course and speed of the vessel, the quantity or 
        other nature is such that it reasonably indicates manufacturing 
        or distribution activity.''.

SEC. 10. SUBTITLE VIII OF TITLE 46.

  Title 46, United States Code, is amended by adding after subtitle VII 
the following:

                     ``Subtitle VIII--Miscellaneous

``Chapter                                                           Sec.

Wrecks and Salvage.................................................80101
Ice and Derelicts..................................................80301
Safe Containers for International Cargo............................80501

                   ``CHAPTER 801--WRECKS AND SALVAGE

``Sec.
``80101.  Vessel stranded on foreign coast.
``80102.  License to salvage on Florida coast.
``80103.  Property on Florida coast to be taken to port of entry.
``80104.  Salvaging operations by foreign vessels.
``80105.  Canadian vessels aiding vessels in United States waters.
``80106.  International agreement on derelicts.
``80107.  Salvors of life to share in remuneration.
``Sec. 80101. Vessel stranded on foreign coast
  ``(a) Duties of Consular Officer.--When a vessel of the United States 
is stranded on a coast of a foreign country, the consular officer in 
that country shall take proper measures, to the extent the laws of that 
country allow, to--
          ``(1) save and secure the vessel and property on the vessel; 
        and
          ``(2) prepare an inventory of the property that is saved.
  ``(b) Delivery to Owner.--After deducting the expenses, the consular 
officer shall deliver the property, with an inventory, to the owner of 
the property.
  ``(c) Limitation on Taking Possession.--A consular officer may not 
take possession of property under this section when the owner, master, 
or consignee is present or able to take possession of the property.
``Sec. 80102. License to salvage on Florida coast
  ``(a) Licensing Requirements.--To be regularly employed in the 
business of salvaging on the coast of Florida, a vessel and its master 
each must have a license issued by a judge of the district court of the 
United States for a judicial district of Florida.
  ``(b) Judicial Findings.--Before issuing a license under this 
section, the judge must be satisfied, when the license is for--
          ``(1) a vessel, that the vessel is seaworthy and properly 
        equipped for the business of saving property shipwrecked and in 
        distress; or
          ``(2) a master, that the master is trustworthy and innocent 
        of any fraud or misconduct related to property shipwrecked or 
        saved on the coast.
``Sec. 80103. Property on Florida coast to be taken to port of entry
  ``(a) In General.--Property taken from a wreck, the sea, or a key or 
shoal, on the coast of Florida and within the jurisdiction of the 
United States, shall be brought to a port of entry of the United 
States.
  ``(b) Seizure and Forfeiture.--A vessel transporting property 
described in subsection (a) to a foreign port may be seized by, and 
forfeited to, the United States Government. A forfeiture under this 
subsection accrues half to the informer and half to the Government.
``Sec. 80104. Salvaging operations by foreign vessels
  ``(a) Prohibition.--Except as provided in this section or section 
80105 of this title, a foreign vessel may not, under penalty of 
forfeiture, engage in salvaging operations on the Atlantic or Pacific 
coast of the United States, in any portion of the Great Lakes or their 
connecting or tributary waters, including any portion of the Saint 
Lawrence River through which the international boundary line extends, 
or in territorial waters of the United States on the Gulf of Mexico.
  ``(b) When Suitable Vessel Not Available.--The Secretary of Homeland 
Security may authorize a foreign vessel to engage in salvaging 
operations in a particular locality if, on investigation, the Secretary 
is satisfied that there is not available in that locality a suitable 
vessel that is--
          ``(1) owned only by citizens of the United States (including 
        a corporation that is a citizen of the United States under 
        section 12118 of this title); and
          ``(2) documented under chapter 121 of this title or numbered 
        under chapter 123 of this title.
  ``(c) Operations Authorized by Treaty.--This section does not 
prohibit or restrict assistance to vessels or salvaging operations 
authorized by treaty, including--
          ``(1) article II of the Treaty between the United States and 
        Great Britain concerning reciprocal rights for United States 
        and Canada in the conveyance of prisoners and wrecking and 
        salvage, signed at Washington, May 18, 1908 (35 Stat. 2036); or
          ``(2) the Treaty between the United States of America and 
        Mexico to facilitate assistance to and salvage of vessels in 
        territorial waters, signed at Mexico City, June 13, 1935 (49 
        Stat. 3359).
``Sec. 80105. Canadian vessels aiding vessels in United States waters
  ``(a) In General.--Canadian vessels and wrecking equipment may give 
aid to Canadian or other vessels and property wrecked, disabled, or in 
distress in the waters of the United States contiguous to Canada, 
including--
          ``(1) the canal and improvement of the waters between Lake 
        Erie and Lake Huron; and
          ``(2) the Saint Marys River and canal.
  ``(b) Reciprocity.--This section does not apply after the President 
proclaims that privileges reciprocal to those under subsection (a) have 
been withdrawn or rendered inoperative by the Government of Canada.
``Sec. 80106. International agreement on derelicts
  ``The President may make an international agreement with other 
governments interested in the navigation of the North Atlantic Ocean, 
providing for the reporting, marking, and removal of dangerous wrecks, 
derelicts, and other menaces to navigation outside the coast waters of 
the countries bordering the North Atlantic Ocean.
``Sec. 80107. Salvors of life to share in remuneration
  ``(a) Entitlement of Salvors.--A salvor of human life, who gave aid 
following an accident giving rise to salvage, is entitled to a fair 
share of the payment awarded to the salvor for salvaging the vessel or 
other property or preventing or minimizing damage to the environment.
  ``(b) Common Ownership of Vessels.--The right to remuneration for aid 
or salvage services is not affected by common ownership of the vessels 
giving and receiving the aid or salvage services.
  ``(c) Time Limit on Bringing Actions.--A civil action to recover 
remuneration for giving aid or salvage services must be brought within 
2 years after the date the aid or salvage services were given, unless 
the court in which the action is brought is satisfied that during that 
2-year period there had not been a reasonable opportunity to seize the 
aided or salvaged vessel within the jurisdiction of the court or within 
the territorial waters of the country of the plaintiff's residence or 
principal place of business.
  ``(d) Nonapplication.--This section does not apply to a vessel of war 
or a vessel owned by the United States Government appropriated only to 
a public service.

                    ``CHAPTER 803--ICE AND DERELICTS

``Sec.
``80301.  International agreements.
``80302.  Patrol services.
``80303.  Speed of vessel in ice region.
``Sec. 80301. International agreements
  ``(a) General Authority.--The President may make agreements with 
interested maritime countries to--
          ``(1) maintain in the North Atlantic Ocean a service of ice 
        patrol, of study and observation of ice and current conditions, 
        and of assistance to vessels and their crews requiring 
        assistance within the limits of the patrol;
          ``(2) maintain a service of study and observation of ice and 
        current conditions in the waters affecting the set and drift of 
        ice in the North Atlantic Ocean; and
          ``(3) take all practicable steps to ensure the destruction or 
        removal of derelicts in the northern part of the Atlantic 
        Ocean, east of the line drawn from Cape Sable to a point in 
        latitude 34 degrees north, longitude 70 degrees west, if the 
        destruction or removal is necessary.
  ``(b) Payment Between Countries.--The President may include in an 
agreement under subsection (a) a provision for--
          ``(1) payment to the United States Government by other 
        countries for their proportionate share of the expense of 
        maintaining the services; or
          ``(2) contribution by the Government for its proportionate 
        share if the agreement provides for another country to maintain 
        the services.
``Sec. 80302. Patrol services
  ``(a) General Requirements.--Unless the agreements made under section 
80301 of this title provide otherwise, an ice patrol shall be 
maintained during the entire ice season in guarding the southeastern, 
southern, and southwestern limits of the region of icebergs in the 
vicinity of the Grand Banks of Newfoundland. The patrol shall inform 
trans-Atlantic and other passing vessels by radio and other available 
means of the ice conditions and the extent of the dangerous region. 
During the ice season, there shall be maintained a service of study of 
ice and current conditions, a service of providing assistance to 
vessels and crews requiring assistance, and a service of removing and 
destroying derelicts. Any of these services may be maintained during 
the remainder of the year as may be advisable.
  ``(b) Warnings to Vessels.--An ice patrol vessel shall warn any 
vessel known to be approaching a dangerous area and recommend safe 
routes.
  ``(c) Recording and Reporting Incidents.--
          ``(1) Recording.--An ice patrol vessel shall record the name 
        of a vessel and the facts of the case when the patrol observes 
        or knows that the vessel--
                  ``(A) is on other than a regular recognized or 
                advertised route crossing the North Atlantic Ocean;
                  ``(B) has crossed the fishing banks of Newfoundland 
                north of latitude 43 degrees north during the fishing 
                season; or
                  ``(C) has passed through regions known or believed to 
                be endangered by ice when proceeding to and from ports 
                of North America.
          ``(2) Reporting.--The name of the vessel and all pertinent 
        information about the incident shall be reported to the 
        government of the country to which the vessel belongs if that 
        government requests.
  ``(d) Administration.--The Commandant of the Coast Guard, under the 
direction of the Secretary of the department in which the Coast Guard 
is operating, shall carry out the services provided for in this section 
and shall assign necessary vessels, material, and personnel of the 
Coast Guard. On request of such Secretary, the head of an agency may 
detail personnel, lend or contribute material or equipment, or 
otherwise assist in carrying out the services provided for in this 
section.
  ``(e) Annual Report.--The Commandant shall publish an annual report 
of the activities of the services provided for in this section. A copy 
of the report shall be provided to each interested foreign government 
and to each agency assisting in the work.
``Sec. 80303. Speed of vessel in ice region
  ``(a) Requirement.--The master of a vessel of the United States, when 
ice is reported on or near the vessel's course, shall proceed at a 
moderate speed or change the course of the vessel to go well clear of 
the danger zone.
  ``(b) Civil Penalty.--A master violating this section is liable to 
the United States Government for a civil penalty of not more than $500.

         ``CHAPTER 805--SAFE CONTAINERS FOR INTERNATIONAL CARGO

``Sec.
``80501.  Definitions.
``80502.  Application of Convention.
``80503.  General authority of the Secretary.
``80504.  Approval and examination.
``80505.  Enforcement.
``80506.  Delegation of authority.
``80507.  Employee protection.
``80508.  Amendments to Convention.
``80509.  Civil penalty.
``Sec. 80501. Definitions
  ``In this chapter:
          ``(1) Container.--The term `container' has the meaning given 
        that term in the Convention.
          ``(2) Convention.--The term `Convention' means the 
        International Convention for Safe Containers, and its annexes, 
        done at Geneva, Switzerland, December 2, 1972.
          ``(3) International transport.--The term `international 
        transport' means the transportation of a container between--
                  ``(A) a place in a foreign country and a place in the 
                jurisdiction of the United States; or
                  ``(B) two places outside the United States by United 
                States carriers.
          ``(4) Owner.--The term `owner' includes the lessee or bailee 
        of a container if a written lease or bailment provides for the 
        lessee or bailee to exercise the owner's responsibility for 
        maintaining and examining the container.
          ``(5) Safety approval plate.--The term `safety approval 
        plate' has the meaning given that term in annex I of the 
        Convention.
``Sec. 80502. Application of Convention
  ``The Convention applies to an owner of a container used in 
international transport if the owner is domiciled or has its principal 
office in the United States.
``Sec. 80503. General authority of the Secretary
  ``(a) In General.--The Secretary of the department in which the Coast 
Guard is operating shall carry out the Convention and this chapter in 
the United States.
  ``(b) Regulations.--The Secretary shall prescribe regulations to 
carry out this chapter. The regulations shall--
          ``(1) establish procedures for testing, inspecting, and 
        initially approving containers and designs for containers, 
        including procedures for attaching, invalidating, and removing 
        safety approval plates for containers;
          ``(2) establish procedures to be followed by the owners of 
        containers for the periodic examination of containers as 
        provided in the Convention; and
          ``(3) provide a method for developing, collecting, and 
        disseminating information about container safety and the 
        international transport of containers.
  ``(c) Safety Approval Plates.--If the owner of a container without a 
safety approval plate establishes that the container satisfies the 
standards of the Convention, the Secretary may authorize a safety 
approval plate to be attached to the container.
  ``(d) Schedule of Fees.--The Secretary may prescribe a schedule of 
fees for services performed by the Secretary, or by a person delegated 
authority under section 80506 of this title, for the testing, 
inspection, and initial approval of containers and container designs.
  ``(e) Encouraging Intermodal Transport.--To the maximum extent 
possible, the Secretary shall encourage the development and use of 
intermodal transport, using containers built to facilitate economical, 
safe, and expeditious handling of containerized cargo without 
intermediate reloading when it is being transported over land, air, and 
sea areas.
``Sec. 80504. Approval and examination
  ``(a) Domicile and Principal Office in United States.--A container 
owner domiciled and having its principal office in the United States 
shall have the container--
          ``(1) approved initially under procedures prescribed by the 
        Secretary of the department in which the Coast Guard is 
        operating or by the government of another country that is a 
        party to the Convention; and
          ``(2) examined periodically as provided in the Convention 
        under procedures prescribed by the Secretary.
  ``(b) Domicile or Principal Office in United States.--A container 
owner domiciled or having its principal office in the United States 
shall have the container--
          ``(1) approved initially under procedures prescribed by the 
        Secretary or by the government of another country that is a 
        party to the Convention; and
          ``(2) examined periodically as provided in the Convention, 
        under procedures prescribed by the government of the country in 
        which the owner is domiciled or has its principal office, as 
        long as that country is a party to the Convention.
  ``(c) Neither Domicile Nor Principal Office in United States.--A 
container owner neither domiciled nor having its principal office in 
the United States or another country that is a party to the Convention 
may submit a container for initial approval and periodic examination 
under procedures prescribed by the Secretary.
``Sec. 80505. Enforcement
  ``(a) In General.--To enforce the Convention, this chapter, and 
regulations prescribed under this chapter, the Secretary of the 
department in which the Coast Guard is operating may--
          ``(1) examine, or require to be examined, containers in 
        international transport;
          ``(2) approve designs for containers;
          ``(3) inspect and test containers being manufactured;
          ``(4) issue a detention order removing or excluding a 
        container from service until the container owner satisfies the 
        Secretary that the container meets the standards of the 
        Convention, if the container--
                  ``(A) does not have a safety approval plate attached 
                to it; or
                  ``(B) has a safety approval plate attached but there 
                is significant evidence that the container is in a 
                condition that creates an obvious risk to safety;
          ``(5) take other appropriate action, including issuing 
        necessary orders, to remove a container from service or 
        restrict its use if the container is not in compliance with the 
        Convention, this chapter, or regulations prescribed under this 
        chapter, but does not present an obvious risk to safety; and
          ``(6) allow a container found to be unsafe or without a 
        safety approval plate to be moved to another location for 
        repair or other disposition, under restrictions consistent with 
        the intent of the Convention.
  ``(b) Payment of Expenses.--
          ``(1) Examination.--The owner of a container involved in an 
        action by the Secretary under this section related to an 
        examination of the container shall pay or reimburse the 
        Secretary for the expenses arising from that action, except for 
        the costs of routine examinations of the container or a safety 
        approval plate.
          ``(2) Testing, inspection, and initial approval.--The owner 
        of a container submitted to the procedure established by the 
        Secretary for testing, inspection, and initial approval, and 
        the manufacturer of a container that submits a design to the 
        procedure established by the Secretary for testing, inspection, 
        and initial approval, shall pay or reimburse the Secretary for 
        the expenses arising from the testing, inspection, or approval.
          ``(3) Credit to appropriation.--Amounts received by the 
        Secretary as reimbursement shall be credited to the 
        appropriation for operating expenses of the Coast Guard.
  ``(c) Presumption Based on Safety Approval Plate.--A container 
bearing a safety approval plate authorized by a country that is a party 
to the Convention is presumed to be in a safe condition unless there is 
significant evidence that the container is in a condition that creates 
an obvious risk to safety.
  ``(d) Notice of Orders.--
          ``(1) In general.--When the Secretary issues a detention or 
        other order under this section, the Secretary promptly shall 
        notify in writing--
                  ``(A) the owner of the container;
                  ``(B) the owner's agent; or
                  ``(C) if the identity of the owner is not apparent 
                from the container or shipping documents, the 
                custodian.
          ``(2) Information to include.--The notification shall 
        identify the container involved, give the location of the 
        container, and describe the condition or situation giving rise 
        to the order.
  ``(e) Duration of Orders.--An order issued by the Secretary under 
this section remains in effect until--
          ``(1) the Secretary declares the container to be in 
        compliance with the standards of the Convention; or
          ``(2) the container is removed permanently from service.
  ``(f) Notice of Defective Container to Country Issuing Safety 
Approval Plate.--If the Secretary has reason to believe that a 
container bearing a safety approval plate issued by another country was 
defective at the time of approval, the Secretary shall notify that 
country.
``Sec. 80506. Delegation of authority
  ``(a) In General.--The Secretary of the department in which the Coast 
Guard is operating may delegate to any person, including a public or 
private agency or nonprofit organization, authority to grant initial 
approval for containers and designs and to attach safety approval 
plates.
  ``(b) Regulations.--Before making a delegation under this section, 
the Secretary shall prescribe regulations establishing--
          ``(1) criteria to be followed in selecting a person to whom 
        authority is to be delegated;
          ``(2) a detailed description of the duties and powers to be 
        carried out by the person to whom authority is delegated, 
        including the records the person shall keep; and
          ``(3) the review the Secretary will conduct to decide whether 
        the person is carrying out the delegated duties and powers 
        properly.
  ``(c) Inspection of Records.--A person delegated authority under this 
section shall make available to the Secretary for inspection, on 
request, records the person is required to keep.
  ``(d) Penalties and Orders.--A person delegated authority under this 
section may not--
          ``(1) assess or collect, or attempt to assess or collect, a 
        penalty for violation of the Convention, this chapter, or an 
        order issued by the Secretary under this chapter; or
          ``(2) issue or attempt to issue a detention or other order.
  ``(e) Publication.--The Secretary shall publish in the Federal 
Register or other appropriate publication--
          ``(1) the name and address of each person to whom authority 
        is delegated;
          ``(2) the duties and powers delegated; and
          ``(3) the period of the delegation.
  ``(f) Revocation.--The Secretary may revoke a delegation of authority 
under this section at any time.
``Sec. 80507. Employee protection
  ``(a) Prohibition.--A person may not discharge or discriminate 
against an employee because the employee has reported the existence of 
an unsafe container or a violation of this chapter or a regulation 
prescribed under this chapter.
  ``(b) Complaints.--An employee alleging to be the subject of a 
violation of subsection (a) may file a complaint with the Secretary of 
Labor. The complaint must be filed within 60 days after the violation.
  ``(c) Enforcement.--The Secretary may investigate the complaint. If 
the Secretary finds there has been a violation, the Secretary may bring 
a civil action in a district court of the United States. The court has 
jurisdiction to restrain violations of subsection (a) and order 
appropriate relief, including reinstatement of the employee to the 
employee's former position with back pay.
  ``(d) Notice to Complainant.--Within 30 days after receiving a 
complaint under this section, the Secretary shall notify the 
complainant of the Secretary's intended action on the complaint.
``Sec. 80508. Amendments to Convention
  ``(a) Proposals by United States Government.--The Secretary of State, 
with the concurrence of the Secretary of the department in which the 
Coast Guard is operating, may propose amendments to the Convention or 
request a conference for amending the Convention as provided in article 
IX of the Convention.
  ``(b) Proposals by Other Countries.--An amendment communicated to the 
United States Government under article IX(2) of the Convention may be 
accepted for the Government by the President, with the advice and 
consent of the Senate. The President may declare that the Government 
does not accept an amendment.
  ``(c) Amendments to Annexes.--
          ``(1) In general.--The Secretary of State, with the 
        concurrence of the Secretary of the department in which the 
        Coast Guard is operating--
                  ``(A) may propose amendments to the annexes to the 
                Convention;
                  ``(B) may propose a conference for amending annexes 
                to the Convention; and
                  ``(C) shall consider and act on amendments to the 
                annexes to the Convention adopted by the Maritime 
                Safety Committee of the International Maritime 
                Organization and communicated to the Government under 
                article X(2) of the Convention.
          ``(2) Action following approval or objection.--If a proposed 
        amendment to an annex is approved by the Government, the 
        amendment shall enter into force as provided in article X of 
        the Convention. If a proposed amendment is objected to, the 
        Secretary of State promptly shall communicate the objection as 
        provided in article X(3) of the Convention.
  ``(d) Appointment of Arbitrator.--The Secretary of State, with the 
concurrence of the Secretary of the department in which the Coast Guard 
is operating, shall appoint an arbitrator when one is required to 
resolve a dispute within the meaning of article XIII of the Convention.
``Sec. 80509. Civil penalty
  ``(a) In General.--An owner, agent, or custodian who has been 
notified of an order issued under section 80505 of this title and fails 
to take reasonable and prompt action to prevent or stop a container 
subject to the order from being moved in violation of the order is 
liable to the United States Government for a civil penalty of not more 
than $5,000 for each container moved. Each day the container remains in 
service while the order is in effect is a separate violation.
  ``(b) Assessment and Collection.--
          ``(1) In general.--After notice and an opportunity for a 
        hearing, the Secretary of the department in which the Coast 
        Guard is operating shall assess and collect any penalty under 
        this section.
          ``(2) Factors to consider.--In determining the amount of the 
        penalty, the Secretary shall consider the gravity of the 
        violation, the hazards involved, and the record of the person 
        charged with respect to violations of the Convention, this 
        chapter, or regulations prescribed under this chapter.
          ``(3) Remission, mitigation, or compromise.--The Secretary 
        may remit, mitigate, or compromise a penalty under this 
        section.
          ``(4) Enforcement.--If a person fails to pay a penalty under 
        this section, the Secretary shall refer the matter to the 
        Attorney General for collection in an appropriate district 
        court of the United States.''.

SEC. 11. MARITIME ADMINISTRATION.

  Section 109 of title 49, United States Code, is amended to read as 
follows:
``Sec. 109. Maritime Administration
  ``(a) Organization.--The Maritime Administration is an administration 
in the Department of Transportation.
  ``(b) Maritime Administrator.--The head of the Maritime 
Administration is the Maritime Administrator, who is appointed by the 
President by and with the advice and consent of the Senate. The 
Administrator shall report directly to the Secretary of Transportation 
and carry out the duties prescribed by the Secretary.
  ``(c) Deputy Maritime Administrator.--The Maritime Administration 
shall have a Deputy Maritime Administrator, who is appointed in the 
competitive service by the Secretary, after consultation with the 
Administrator. The Deputy Administrator shall carry out the duties 
prescribed by the Administrator. The Deputy Administrator shall be 
Acting Administrator during the absence or disability of the 
Administrator and, unless the Secretary designates another individual, 
during a vacancy in the office of Administrator.
  ``(d) Duties and Powers Vested in Secretary.--All duties and powers 
of the Maritime Administration are vested in the Secretary.
  ``(e) Regional Offices.--The Maritime Administration shall have 
regional offices for the Atlantic, Gulf, Great Lakes, and Pacific port 
ranges, and may have other regional offices as necessary. The Secretary 
shall appoint a qualified individual as Director of each regional 
office. The Secretary shall carry out appropriate activities and 
programs of the Maritime Administration through the regional offices.
  ``(f) Interagency and Industry Relations.--The Secretary shall 
establish and maintain liaison with other agencies, and with 
representative trade organizations throughout the United States, 
concerned with the transportation of commodities by water in the export 
and import foreign commerce of the United States, for the purpose of 
securing preference to vessels of the United States for the 
transportation of those commodities.
  ``(g) Detailing Officers From Armed Forces.--To assist the Secretary 
in carrying out duties and powers relating to the Maritime 
Administration, not more than five officers of the armed forces may be 
detailed to the Secretary at any one time, in addition to details 
authorized by any other law. During the period of a detail, the 
Secretary shall pay the officer an amount that, when added to the 
officer's pay and allowances as an officer in the armed forces, makes 
the officer's total pay and allowances equal to the amount that would 
be paid to an individual performing work the Secretary considers to be 
of similar importance, difficulty, and responsibility as that performed 
by the officer during the detail.
  ``(h) Contracts and Audits.--
          ``(1) Contracts.--In the same manner that a private 
        corporation may make a contract within the scope of its 
        authority under its charter, the Secretary may make contracts 
        for the United States Government and disburse amounts to--
                  ``(A) carry out the Secretary's duties and powers 
                under this section and subtitle V of title 46; and
                  ``(B) protect, preserve, and improve collateral held 
                by the Secretary to secure indebtedness.
          ``(2) Audits.--The financial transactions of the Secretary 
        under paragraph (1) shall be audited by the Comptroller 
        General. The Comptroller General shall allow credit for an 
        expenditure shown to be necessary because of the nature of the 
        business activities authorized by this section or subtitle V of 
        title 46. At least once a year, the Comptroller General shall 
        report to Congress any departure by the Secretary from this 
        section or subtitle V of title 46.
  ``(i) Authorization of Appropriations.--
          ``(1) In general.--Except as otherwise provided in this 
        subsection, there are authorized to be appropriated such 
        amounts as may be necessary to carry out the duties and powers 
        of the Secretary relating to the Maritime Administration.
          ``(2) Limitations.--Only those amounts specifically 
        authorized by law may be appropriated for the use of the 
        Maritime Administration for--
                  ``(A) acquisition, construction, or reconstruction of 
                vessels;
                  ``(B) construction-differential subsidies incident to 
                the construction, reconstruction, or reconditioning of 
                vessels;
                  ``(C) costs of national defense features;
                  ``(D) payments of obligations incurred for operating-
                differential subsidies;
                  ``(E) expenses necessary for research and development 
                activities, including reimbursement of the Vessel 
                Operations Revolving Fund for losses resulting from 
                expenses of experimental vessel operations;
                  ``(F) the Vessel Operations Revolving Fund;
                  ``(G) National Defense Reserve Fleet expenses;
                  ``(H) expenses necessary to carry out part B of 
                subtitle V of title 46; and
                  ``(I) other operations and training expenses related 
                to the development of waterborne transportation 
                systems, the use of waterborne transportation systems, 
                and general administration.
          ``(3) Training Vessels.--Amounts may not be appropriated for 
        the purchase or construction of training vessels for State 
        maritime academies unless the Secretary has approved a plan for 
        sharing training vessels between State maritime academies.''.

SEC. 12. AMENDMENTS RELATING TO MARITIME SECURITY ACT OF 2003.

  (a) Amendments to Chapter 531.--Chapter 531 of title 46, United 
States Code, is amended as follows:
          (1) In section 53102--
                  (A) in the headings of paragraphs (1), (2), and (4) 
                of subsection (c), strike ``section 2'' and substitute 
                ``section 50501'';
                  (B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and 
                (B), and (4)(B), strike ``section 2 of the Shipping 
                Act, 1916 (46 U.S.C. App. 802)'' and substitute 
                ``section 50501 of this title'';
                  (C) in subsection (d), strike ``the first section of 
                Public Law 81-891 (64 Stat. 1120; 46 U.S.C. App. note 
                prec. 3)'' and substitute ``section 501 of this 
                title''; and
                  (D) in subsection (e)(1)--
                          (i) strike ``a documented vessel (as that 
                        term is defined in section 12101 of this 
                        title)'' and substitute ``documented under 
                        chapter 121 of this title,''; and
                          (ii) in clause (B), strike ``a documented 
                        vessel (as defined in that section)'' and 
                        substitute ``documented under chapter 121''.
          (2) In section 53103(c)--
                  (A) in the heading of paragraph (1)(C), strike 
                ``section 2'' and substitute ``section 50501'';
                  (B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), 
                strike ``section 2 of the Shipping Act, 1916 (46 U.S.C. 
                App. 802)'' and substitute ``section 50501 of this 
                title'';
                  (C) in paragraph (1)(B), strike ``subparagraphs'' and 
                substitute ``subparagraph''; and
                  (D) in paragraph (3)(B), strike ``agreement'' and 
                substitute ``agreements''.
          (3) In section 53104--
                  (A) in subsection (c)(3)(B)(ii)(I) and (II), strike 
                ``section 2 of the Shipping Act, 1916 (46 U.S.C. App. 
                802)'' and substitute ``section 50501 of this title'';
                  (B) in subsection (e)(2), strike ``section 9 of the 
                Shipping Act, 1916 (46 U.S.C. App. 808)'' and 
                substitute ``section 56102 of this title''; and
                  (C) in subsection (e)(3), strike ``section 902 of the 
                Merchant Marine Act, 1936 (46 U.S.C. App. 1242)'' and 
                ``section 902 of such Act'' and substitute ``chapter 
                563 of this title'' and ``chapter 563'', respectively.
          (4) In section 53105--
                  (A) in subsection (a)(1)(A), strike ``section 12105'' 
                and substitute ``section 12111''; and
                  (B) in subsection (f), strike ``approve'' and 
                substitute ``approves''.
          (5) In section 53106--
                  (A) in subsection (d)(1), strike ``section 2631 of 
                title 10, United States Code, the Act of March 26, 1934 
                (46 U.S.C. App. 1241-1), section 901(a), 901(b), or 
                901b of the Merchant Marine Act, 1936 (46 U.S.C. App. 
                1241(a), 1241(b), or 1241f)'' and substitute ``section 
                55302(a), 55304, 55305, or 55314 of this title, section 
                2631 of title 10'';
                  (B) in subsection (d)(2), strike ``section 901(a), 
                901(b), or 901b of the Merchant Marine Act, 1936 (46 
                U.S.C. App. 1241(a), 1241(b), or 1241f),'' and 
                substitute ``section 55302(a), 55305, or 55314 of this 
                title''; and
                  (C) in subsection (e)(2), strike ``section 2(c) of 
                the Shipping Act, 1916 (46 U.S.C. App. 802(c))'' and 
                substitute ``section 50501 of this title, applying the 
                75 percent ownership requirement of that section''.
          (6) In section 53107(f)--
                  (A) strike ``section 2631 of title 10, United States 
                Code, the Act of March 26, 1934 (46 U.S.C. App. 1241-
                1), section 901(a), 901(b), or 901b of the Merchant 
                Marine Act, 1936 (46 U.S.C. App. 1241(a), 1241(b), or 
                1241f)'' and substitute ``section 55302(a), 55304, 
                55305, or 55314 of this title, section 2631 of title 
                10''; and
                  (B) strike ``section 2631 of title 10, United States 
                Code, the Act of March 26, 1934 (46 U.S.C. App. 1241-
                1), and sections 901(a), 901(b), and 901b of the 
                Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a), 
                1241(b), and 1241b)'' and substitute ``sections 
                55302(a), 55304, 55305, and 55314 of this title and 
                section 2631 of title 10''; and
          (7) In section 53108(b), strike ``section 901(b)(1) of the 
        Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))'' and 
        substitute ``section 55305(a) of this title''.
  (b) Other Conforming Amendments.--
          (1) Section 12111.--
                  (A) Amendment.--Section 12111(c)(3) of title 46, 
                United States Code, as enacted by this Act, is amended 
                by striking ``subtitle B of title VI of the Merchant 
                Marine Act, 1936'' and substituting ``chapter 531 of 
                this title''.
                  (B) Repeal.--If this Act is enacted before the 
                amendment made by section 3534(b)(1) of the Maritime 
                Security Act of 2003 (Public Law 108-136, 117 Stat. 
                1818) becomes effective, such section 3534(b)(1) is 
                repealed.
          (2) Section 56102.--Section 56102(c) of title 46, United 
        States Code, as enacted by this Act, is amended by striking 
        clauses (1)-(4) and substituting the following:
          ``(1)(A) the Secretary, in conjunction with the Secretary of 
        Defense, determines that at least one replacement vessel of 
        equal or greater military capability and of a capacity that is 
        equivalent or greater, as measured by deadweight tons, gross 
        tons, or container equivalent units, as appropriate, is 
        documented under chapter 121 of this title by the owner of the 
        vessel placed under foreign registry; and
          ``(B) the replacement vessel is not more than 10 years old on 
        the date of that documentation; or
          ``(2) an operating agreement covering the vessel under 
        chapter 531 of this title has expired.''.
  (c) Effective Dates.--(1) The amendments made by subsections (a) and 
(b)(2) are effective on the date of enactment of this Act, or the 
effective date of subtitle C of the Maritime Security Act of 2003 
(Public Law 108-136, 117 Stat. 1803), whichever is later.
  (2) The amendment made by subsection (b)(1)(A) is effective the date 
of enactment of this Act, or the effective date of section 3534(b)(1) 
of the Maritime Security Act of 2003 (117 Stat. 1818), whichever is 
later.

SEC. 13. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS.

  (a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46 App. 
U.S.C. 111, 123) is amended by striking ``or tonnage tax''.
  (b) Section 809(a) of the Merchant Marine Act, 1936 (46 App. U.S.C. 
1213(a)), is amended by striking ``and section 211(a)''.

SEC. 14. ADDITIONAL AMENDMENTS TO TITLE 46.

  Title 46, United States Code, is amended as follows:
          (1) The analysis of subtitle II is amended as follows:
                  (A) In each chapter item, capitalize the first letter 
                of each word containing 4 or more letters.
                  (B) Strike the item for chapter 39.
                  (C) The item for chapter 45 is amended to read as 
                follows:

Uninspected Commercial Fishing Industry Vessels..................4501''.
          (2) Section 2101 is amended as follows:
                  (A) Clauses (2), (3), (3a), (6), (10), (10a), (12), 
                (17b), (36), (41), (44), (45), and (46) are repealed.
                  (B) In clause (8a), insert ``Prevention'' after 
                ``Abuse''.
                  (C) In clause (18), strike ``those''.
                  (D) In clause (34)--
                          (i) strike ``, except in part H,''; and
                          (ii) strike ``head'' and substitute 
                        ``Secretary''.
          (3) In section 2102--
                  (A) in subsection (a)(2), strike ``section 2101(36) 
                and (44)'' and substitute ``chapter 1''; and
                  (B) in subsection (b), strike ``West'' and ``East'' 
                and substitute ``west'' and ``east'', respectively.
          (4) In section 2106, strike ``a district court of the United 
        States'' and substitute ``the district court of the United 
        States for any district''.
          (5) Section 2108 is repealed.
          (6) In section 2110--
                  (A) in subsection (a)(2), strike ``part B of this 
                title'' and substitute ``part B of this subtitle'';
                  (B) in subsection (b)(2)(A)(iii), strike the period 
                at the end and substitute ``; and'';
                  (C) in subsection (b)(5), strike ``fees'' and 
                substitute ``fee'';
                  (D) In subsection (f), strike ``Secretary of the 
                Treasury shall deny the clearance required by section 
                4197 of the Revised Statutes of the United States (46 
                App. U.S.C. 91)'' and substitute ``Secretary of 
                Homeland Security shall deny the clearance required by 
                section 60105 of this title''; and
                  (E) In subsection (j), strike ``state'' and 
                substitute ``State''.
          (7) In section 2301, strike ``section'' and substitute 
        ``sections 2304 and''.
          (8) In section 2304--
                  (A) insert the paragraph designation ``(1)'' after 
                ``(a)''; and
                  (B) insert at the end of subsection (a) the following 
                new paragraph:
  ``(2) Paragraph (1) does not apply to a vessel of war or a vessel 
owned by the United States Government appropriated only to a public 
service.''.
          (9) In section 2306(a)(2), strike ``section 212(A) of the 
        Merchant Marine Act, 1936 (46 App. U.S.C. 1122a),'' and 
        substitute ``section 50113 of this title''.
          (10) In section 3205(d), strike ``Secretary of the Treasury 
        shall withhold or revoke the clearance required by section 4197 
        of the Revised Statutes (46 App. U.S.C. 91)'' and substitute 
        ``Secretary of Homeland Security shall withhold or revoke the 
        clearance required by section 60105 of this title''.
          (11) In section 3302--
                  (A) in subsection (b), insert a comma after ``fishing 
                vessel'';
                  (B) in subsection (j)(2)(B), strike ``section 1304 of 
                the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c)'' 
                and substitute ``chapter 515 of this title''; and
                  (C) in subsection (l)(1)(C), strike ``Inc..'' and 
                substitute ``Inc.''.
          (12) In section 3306(d), strike ``section 1302(3) of the 
        Merchant Marine Act, 1936 (46 App. U.S.C. 1295a(3))'' and 
        substitute ``section 51102 of this title''.
          (13) In section 3318(f), strike the period after ``felony''.
          (14) In section 3505, strike ``section 3303(a)'' and 
        substitute ``section 3303''.
          (15) In the analysis of chapter 37, the item for section 3719 
        is amended to read as follows:

``3719. Reduction of oil spills from single hull non-self-propelled tank 
          vessels.''.
          (16) In paragraphs (1)(C), (2), and (3) of section 3703a(c), 
        strike ``documentation under section 4136 of the Revised 
        Statutes of the United States (46 App. U.S.C. 14)'' and 
        substitute ``documentation as a wrecked vessel under section 
        12112 of this title''.
          (17) In section 3704, strike ``section 27 of the Merchant 
        Marine Act, 1920 (46 App. U.S.C. 883),'' and substitute 
        ``chapter 551 of this title''.
          (18) In section 3718(e)(1), strike ``Secretary of the 
        Treasury'' and ``section 4197 of the Revised Statutes of the 
        United States (46 App. U.S.C. 91)'' and substitute ``Secretary 
        of Homeland Security'' and ``section 60105 of this title'', 
        respectively.
          (19) In section 4702, strike the subsection ``(a)'' 
        designation.
          (20) In section 4705--
                  (A) strike ``subcontractor not'' and substitute 
                ``subcontractor are not'';
                  (B) strike ``(a)(1)'' and substitute ``(a)'';
                  (C) strike ``(2) Paragraph (1)'' and substitute ``(b) 
                Subsection (a)'';
                  (D) strike ``(A)'' and substitute ``(1)''; and
                  (E) strike ``(B)'' and substitute ``(2)''.
          (21) In section 5113(b), strike ``section 4197 of the Revised 
        Statutes (46 App. U.S.C. 91)'' and substitute ``section 60105 
        of this title''.
          (22) In section 6101, redesignate the second subsection (g) 
        and subsection (h) as subsections (h) and (i), respectively.
          (23) In section 9307(b)(2)(A), strike ``The'' and substitute 
        ``the''.
          (24) In section 12503(a), in the matter before clause (1), 
        strike ``delegee'' and substitute ``delegate''.
          (25) In section 13102(a), insert ``(26 U.S.C. 9504)'' after 
        ``Internal Revenue Code of 1986''.
          (26) In section 14305(a)--
                  (A) in clause (1), strike ``and sections 12106(c) and 
                12108(c)'' and substitute ``of this subtitle and 
                section 12116'';
                  (B) in clause (5), strike ``section 4283 of the 
                Revised Statutes of the United States (46 App. U.S.C. 
                183)'' and substitute ``section 30506 of this title'';
                  (C) in clause (6), strike ``sections 27 and 27A of 
                the Act of June 5, 1920 (46 App. U.S.C. 883 and 883-
                1)'' and substitute ``sections 12118 and 12132 of this 
                title''; and
                  (D) in clause (7), strike ``Act of July 14, 1956 (46 
                App. U.S.C. 883a)'' and substitute ``section 12139(b) 
                of this title''.
          (27) In section 31306(a), strike ``section 9 or 37 of the 
        Shipping Act, 1916 (46 App. U.S.C. 808, 835)'' and substitute 
        ``section 56102 or 56103 of this title''.
          (28) In section 31308, strike ``title XI of the Merchant 
        Marine Act, 1936 (46 App. U.S.C. 1271 et seq.)'' and substitute 
        ``chapter 537 of this title''.
          (29) In section 31322--
                  (A) in subsection (a)(4)(A), strike ``section 
                12102(c)'' and substitute ``section 12113(c)'';
                  (B) in subsection (a)(4)(E), strike ``under section 
                12102(a)'' and substitute ``for purposes of 
                documentation under section 12103'';
                  (C) in subsection (f)(2), strike ``section 12102(c)'' 
                and substitute ``section 12113(c)''.
          (30) In section 31325(b)(3)(B), strike ``section 9 or 37 of 
        the Shipping Act, 1936 (46 App. U.S.C. 808, 835)'' and 
        substitute ``section 56102 or 56103 of this title''.
          (31) In section 31326(b)--
                  (A) in clause (1), strike ``title XI of the Merchant 
                Marine Act, 1936 (46 App. U.S.C. 1101 et seq.)'' and 
                substitute ``chapter 537 of this title,''; and
                  (B) in clause (2), strike ``title XI of that Act'' 
                and substitute ``chapter 537 of this title''.
          (32) In section 31329--
                  (A) in subsection (a)(1), strike ``section 12102'' 
                and substitute ``section 12103''; and
                  (B) in subsection (b)--
                          (i) in clause (2), strike ``section 902 of 
                        the Merchant Marine Act, 1936 (46 App. U.S.C. 
                        1242)'' and substitute ``chapter 563 of this 
                        title''; and
                          (ii) in clause (3), strike ``sale foreign 
                        within the terms of the first proviso of 
                        section 27 of the Merchant Marine Act, 1920 (46 
                        App. U.S.C. 883)'' and substitute ``sale to a 
                        person not a citizen of the United States under 
                        section 12132 of this title''.
          (33) In section 31342(b), strike ``public vessel'' and 
        substitute ``vessel that is owned, demise chartered, or 
        operated by the United States Government or a government of a 
        foreign country''.

SEC. 15. CONFORMING AMENDMENTS TO OTHER LAWS.

  (a) Title 10.--Title 10, United States Code, is amended as follows:
          (1) In section 374(b)(4)(A)(iv), strike ``The Maritime Drug 
        Law Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
        substitute ``Chapter 705 of title 46''
          (2) In section 2218(d)(2), strike ``sections 508 and 510 of 
        the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), 
        shall be deposited in the Fund'' and substitute ``sections 
        57101-57104 and chapter 573 of title 46''.
          (3) In section 2350b(g)(2), strike ``section 901(b) of the 
        Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b))'' and 
        substitute ``section 55305 of title 46''.
          (4) In section 2645--
                  (A) in subsection (c), strike ``the second sentence 
                of section 1208(a) of the Merchant Marine Act, 1936 (46 
                U.S.C. App. 1288(a))'' and substitute ``section 
                53909(b) of title 46'';
                  (B) in subsection (h)(1), strike ``title XII of the 
                Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et 
                seq.),'' and substitute ``chapter 539 of title 46''; 
                and
                  (C) in subsection (h)(2), strike ``the first sentence 
                of section 1208(a) of the Merchant Marine Act, 1936 (46 
                U.S.C. App. 1288(a))'' and substitute ``section 
                53909(a) of title 46''.
          (5) In section 2664(a)(3), strike ``transferred to the 
        Secretary of Transportation under section 3 of the Maritime Act 
        of 1981 (46 U.S.C. App. 1602)'' and substitute ``of the 
        Secretary of Transportation relating to the Maritime 
        Administration''.
          (6) In section 5985, strike ``section 1304 of the Merchant 
        Marine Act, 1936 (46 U.S.C. App. 1295c),'' and substitute 
        ``chapter 515 of title 46''.
          (7) In section 7721(a), strike ``the Act of March 3, 1925 
        (commonly referred to as the `Public Vessels Act') (46 U.S.C. 
        App. 781-790)'' and substitute ``chapter 311 of title 46''.
  (b) Title 11.--Title 11, United States Code, is amended as follows:
          (1) In section 362(b)--
                  (A) in clause (12), strike ``section 207 or title XI 
                of the Merchant Marine Act, 1936'' and substitute 
                ``chapter 537 of title 46 or section 109(h) of title 
                49''; and
                  (B) in clause (13), strike ``section 207 or title XI 
                of the Merchant Marine Act, 1936'' and substitute 
                ``chapter 537 of title 46''.
          (2) In section 1110(a)(3)(A)(ii), strike ``documented vessel 
        (as defined in section 30101(1) of title 46)'' and substitute 
        ``vessel documented under chapter 121 of title 46''.
  (c) Title 14.--Sections 821(b) and 823a(b) of title 14, United States 
Code, are each amended by striking clauses (3)-(5) and substituting the 
following:
          ``(3) Section 30101 of title 46 (popularly known as the 
        Admiralty Extension Act).
          ``(4) Chapter 309 of title 46 (known as the Suits in 
        Admiralty Act).
          ``(5) Chapter 311 of title 46 (known as the Public Vessels 
        Act).''.
  (d) Title 18.--Title 18, United States Code, is amended as follows:
          (1) In section 229F(9)(C), strike ``section 3(b) of the 
        Maritime Drug Enforcement Act, as amended (46 U.S.C., App. sec. 
        1903(b))'' and substitute ``section 70502(b) of title 46, 
        United States Code''.
          (2) In section 507--
                  (A) in the first paragraph, strike ``recording, 
                registry, or enrollment of any vessel, in the office of 
                any collector of the customs, or a license to any 
                vessel for carrying on the coasting trade or fisheries 
                of the United States'' and substitute ``documentation 
                of any vessel'';
                  (B) in the first paragraph, strike ``collector or 
                other''; and
                  (C) in the second paragraph, strike ``license,''.
          (3) In section 924--
                  (A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and 
                (k)(1), strike ``the Maritime Drug Law Enforcement Act 
                (46 U.S.C. App. 1901 et seq.)'' and substitute 
                ``chapter 705 of title 46''; and
                  (B) in subsection (g)(2), strike ``802 et seq.'' and 
                substitute ``801 et seq.''.
          (4) In section 929(a)(2), strike ``the Maritime Drug Law 
        Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and substitute 
        ``chapter 705 of title 46''.
          (5) In section 965(a), strike ``section 4197 of the Revised 
        Statutes of the United States (46 U.S.C. App. 91)'' and 
        substitute ``section 60105 of title 46''.
          (6) In section 2277(a), strike ``registered, enrolled, or 
        licensed'' and substitute ``documented''.
          (7) In section 3142(e) and (f)(1)(C), strike ``the Maritime 
        Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
        substitute ``chapter 705 of title 46''.
  (e) Internal Revenue Code of 1986.--The Internal Revenue Code of 1986 
(26 U.S.C. 1 et seq.) is amended as follows:
          (1) In section 56(c)(2)--
                  (A) strike ``section 607 of the Merchant Marine Act, 
                1936 (46 U.S.C. 1177)'' and substitute ``chapter 535 of 
                title 46, United States Code''; and
                  (B) in clauses (A) and (B), strike ``such section 
                607'' substitute ``such chapter 535''.
          (2) In section 140(a)(4), strike ``section 607(d) of the 
        Merchant Marine Act, 1936 (46 U.S.C. 1177)'' and substitute 
        ``section 53507 of title 46, United States Code''.
          (3) In section 543(a)(1)(B), strike ``section 511 or 607 of 
        the Merchant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)'' 
        and substitute ``chapter 533 or 535 of title 46, United States 
        Code''.
          (4) In section 1023(2), strike ``section 511 of the Merchant 
        Marine Act, 1936, as amended (46 U.S.C. 1161)'' and substitute 
        ``chapter 533 of title 46, United States Code''.
          (5) In section 1061--
                  (A) in clause (1), strike ``section 510 of the 
                Merchant Marine Act, 1936, see subsection (e) of that 
                section, as amended August 4, 1939 (46 U.S.C. App. 
                1160)'' and substitute ``chapter 573 of title 46, 
                United States Code, see section 57307 of title 46'';
                  (B) in clause (2), strike ``section 511 of such Act, 
                as amended (46 U.S.C. App. 1161)'' and substitute 
                ``chapter 533 of title 46, United States Code''; and
                  (C) strike clause (3).
          (6) In section 7518--
                  (A) in subsection (a)(1), strike ``section 607 of the 
                Merchant Marine Act, 1936'' and substitute ``chapter 
                535 of title 46 of the United States Code'';
                  (B) in subsections (a)(2) and (c)(1)(A) and (D), 
                strike ``section 607 of the Merchant Marine Act, 1936'' 
                and substitute ``chapter 535 of title 46, United States 
                Code''; and
                  (C) in subsection (g)(3)(C)(iii), strike ``Merchant 
                Marine Act of 1936'' and substitute ``Merchant Marine 
                Act, 1936,''.
  (f) Title 28.--Title 28, United States Code, is amended as follows:
          (1) In section 994(h)(1)(B) and (2)(B), strike ``the Maritime 
        Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)'' and 
        substitute ``chapter 705 of title 46''.
          (2) In section 1605(d), strike ``the Ship Mortgage Act, 1920 
        (46 U.S.C. 911 and following)'' and ``that Act'' and substitute 
        ``section 31301 of title 46'' and ``chapter 313 of title 46'', 
        respectively.
          (3) In section 2342(3)--
                  (A) in clause (A), strike ``section 2, 9, 37, or 41 
                of the Shipping Act, 1916 (46 U.S.C. App. 802, 803, 
                808, 835, 839, and 841a)'' and substitute ``section 
                50501, 50502, 56102-56105, or 57109 of title 46''; and
                  (B) strike clause (B) and substitute the following:
                  ``(B) the Federal Maritime Commission issued pursuant 
                to section 305, 41304, 41308, or 41309 or chapter 421 
                or 441 of title 46;''.
          (4) In section 2680(d), strike ``sections 741-752, 781-790 of 
        Title 46,'' and substitute ``chapter 309 or 311 of title 46''.
  (g) Title 40.--Title 40, United States Code, is amended as follows:
          (1) In section 548, strike ``the Merchant Marine Act, 1936 
        (46 App. U.S.C. 1101 et seq.),'' and substitute ``part F of 
        subtitle V of title 46''.
          (2) In section 3134(b), strike ``the Merchant Marine Act, 
        1936 (46 App. U.S.C. 1101 et seq.)'' and substitute ``subtitle 
        V of title 46''.
  (h) Title 49.--Title 49, United States Code, is amended as follows:
          (1) In section 5122(c)(1), strike ``Secretary of the 
        Treasury'' and ``section 4197 of the Revised Statutes of the 
        United States (46 App. U.S.C. 91)'' and substitute ``Secretary 
        of Homeland Security'' and ``section 60105 of title 46'', 
        respectively.
          (2) In section 5901(3)(B), strike ``section 3 of the Shipping 
        Act of 1984 (46 App. U.S.C. 1702)'' and substitute ``section 
        40102 of title 46''.

SEC. 16. LEGISLATIVE CONSTRUCTION AND TRANSITIONAL PROVISIONS.

  (a) In General.--The purpose of this Act is to complete the 
codification of title 46, United States Code, ``Shipping'', as positive 
law, in accordance with section 285b(1) of title 2, United States Code.
  (b) Conformity With Original Intent.--In the codification of laws 
encompassed by this Act, the intent is to conform to the understood 
policy, intent, and purpose of the Congress in the original enactments, 
with such amendments and corrections as will remove ambiguities, 
contradictions, and other imperfections both of substance and of form.
  (c) Cutoff Date.--This Act codifies certain laws enacted as of March 
31, 2004. Any law enacted after that date that is inconsistent with 
this Act, including any law purporting to amend or repeal a provision 
that is repealed by this Act, supersedes this Act to the extent of the 
inconsistency.
  (d) Original Date of Enactment Unchanged.--For purposes of 
determining whether one provision of law supersedes another based on 
enactment later in time, the date of enactment of a provision codified 
by thisAct is deemed to remain unchanged, continuing to be the date of 
enactment of the underlying provision that is codified.
  (e) References in Other Provisions.--A reference to a provision of 
law codified by this Act, including a reference in another law or in a 
rule, regulation, or order, is deemed to refer to the corresponding 
provision enacted by this Act.
  (f) Savings Provisions.--
          (1) Rules, regulations, and orders.--A rule, regulation, or 
        order in effect under a provision of law codified by this Act 
        continues in effect under the corresponding provision enacted 
        by this Act.
          (2) Actions taken and offenses committed.--An action taken or 
        an offense committed under a provision of law codified by this 
        Act is deemed to have been taken or committed under the 
        corresponding provision enacted by this Act.

SEC. 17. REPEALS.

  The following laws are repealed, except with respect to rights and 
duties that matured, penalties that were incurred, or proceedings that 
were begun before the date of enactment of this Act:

                                                Revised Statutes
----------------------------------------------------------------------------------------------------------------
                                                                               United States Code
                   Revised Statutes Section                    -------------------------------------------------
                                                                         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
----------------------------------------------------------------------------------------------------------------
                                                                          Statutes at Large       U.S. Code (46
                                 Chapter or                          --------------------------    App. unless
             Date                Public Law           Section                                       otherwise
                                                                      Volume        Page           specified)
----------------------------------------------------------------------------------------------------------------
             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
                                ............  7.....................      27  446.............  195
 
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.....................      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
                                ............  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
Apr. 16                         229           words before Sec. 1...      49  1207............  1300
                                ............  1.....................      49  1208............  1301
                                ............  2.....................      49  1208............  1302
                                ............  3.....................      49  1208............  1303
                                ............  4.....................      49  1210............  1304
                                ............  5.....................      49  1211............  1305
                                ............  6.....................      49  1211............  1306
                                ............  7.....................      49  1212............  1307
                                ............  8.....................      49  1212............  1308
                                ............  9.....................      49  1212............  1309
                                ............  11....................      49  1212............  1310
                                ............  12....................      49  1212............  1311
                                ............  13....................      49  1212............  1312
                                ............  14....................      49  1213............  1313
                                ............  15....................      49  1213............  1314
                                ............  16....................      49  1213............  1315
 
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.  ......  ................  1161
                                               10, 1940).
                                ............  607...................      49  2005............  1177
                                ............  701...................      49  2008............  1191
                                ............  702...................      49  2008............  1192
                                ............  703...................      49  2008............  1193
                                ............  704...................      49  2008............  1194
                                ............  705...................      49  2009............  1195
                                ............  706...................      49  2009............  1196
                                ............  707...................      49  2009............  1197
                                ............  708...................      49  2009............  1198
                                ............  709...................      49  2010............  1199
                                ............  710...................      49  2010............  1200
                                ............  711...................      49  2010............  1201
                                ............  712...................      49  2010............  1202
                                ............  713...................      49  2010............  1203
                                ............  714...................      49  2011............  1204
                                ............  715...................  ......  ................  1205
                                ............  805...................      49  2012............  1223
                                ............  806(b)-(d)............      49  2014............  1228
                                ............  808...................      49  2015............  1226
                                ............  809(b)................  ......  ................  1213
                                ............  810...................      49  2015............  1227
                                ............  901...................      49  2015............  1241
                                ............  901a..................  ......  ................  1241e
                                ............  901b..................  ......  ................  1241f
                                ............  901c..................  ......  ................  1241g
                                ............  901d..................  ......  ................  1241h
                                ............  901e..................  ......  ................  1241i
                                ............  901f..................  ......  ................  1241j
                                ............  901g..................  ......  ................  1241k
                                ............  901h..................  ......  ................  1241l
                                ............  901i..................  ......  ................  1241m
                                ............  901j..................  ......  ................  1241n
                                ............  901k..................  ......  ................  1241o
                                ............  902...................      49  2015............  1242
                                ............  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       61  18..............  1116a
                                               ``Independent
                                               Offices''.
 
             1948
June 19                         526           ......................      62  496.............  740
 
June 30                         775           101 (last proviso on        62  1199............  864a
                                               p. 1199).
 
             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         65  59..............  1241a
                                               ``Vessel Operations
                                               Revolving Fund''.
 
Nov. 1                          664           par. under heading          65  746.............  1288a
                                               ``War-Risk Insurance
                                               Revolving Fund''.
 
             1956
June 20                         415           101 (par. beginning         70  319.............  1241b,
                                               with ``Vessel                                    1241b nt
                                               operations revolving
                                               fund'').
 
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.      71  73..............  1177a
                                               73).
 
             1958
June 25                         85-469        101 (par. under             72  231.............  1280
                                               heading ``Federal
                                               Ship Mortgage
                                               Insurance Fund'').
 
             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
                                ............  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.      101  1329,...........  1241h nt
                                               under heading ``Ocean          1329-27.........
                                               Freight
                                               Differential'')].
                                ............  101(a) [title V (4th       101  1329,...........  1295c-1
                                               proviso on p. 1329-            1329-28.........
                                               28)].
 
             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
 
June 7                          100-329       1(b)..................     102  588.............  883 nt
 
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 [Sec. 3506].........     114  1654,...........  1118 nt
                                                                              1654A-494.......
 
             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
----------------------------------------------------------------------------------------------------------------

                                              Reorganization Plans
----------------------------------------------------------------------------------------------------------------
                                                                                     Statutes at Large
   Year              Plan No.                        Section             ---------------------------------------
                                                                            Volume               Page
----------------------------------------------------------------------------------------------------------------
     1949  6..........................  ................................         63  1069
     1950  21.........................  201, 203, 204...................         64  1276
     1961  7..........................  101-105, 201, 301, 302..........         75  840, 842
----------------------------------------------------------------------------------------------------------------

                                 <all>
```