I 

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.

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

2 States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the ‘‘Title 46 Codification 

5 Act of 2004’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for this Act is as fol7 lows:

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. 
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Sec. 16. Legislative construction and transitional provisions. 

Sec. 17. Repeals.

1 SEC. 2. TITLE ANALYSIS. 

2 (a) AMENDMENT.—The title analysis of title 46, United States Code, is 

3 amended to read as follows:

‘‘Subtitle Sec. 

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

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

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

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

‘‘V. MERCHANT MARINE .............................................................................. 50101

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

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

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

4 (b) REPEAL.—If this Act is enacted prior to the effective date of section 

5 3531(b) of the Maritime Security Act of 2003 (Public Law 108–136, 117 

6 Stat. 1817), such section 3531(b) is repealed. 

7 SEC. 3. SUBTITLE I OF TITLE 46. 

8 Title 46, United States Code, is amended by inserting after the title anal9 ysis the following:

10 ‘‘Subtitle I—General

‘‘Chapter Sec. 

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

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

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

11 ‘‘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.

12 ‘‘§ 101. Agency 

13 ‘‘In this title, the term ‘agency’ means a department, agency, or instru14 mentality of the United States Government. 

15 ‘‘§ 102. Barge 

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

17 ‘‘§ 103. Boundary Line 

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

19 section 2(b) of the Act of February 19, 1895 (33 U.S.C. 151). 
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1 ‘‘§ 104. Citizen of the United States 

2 ‘‘In this title, the term ‘citizen of the United States’ means an individual 

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

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

5 ‘‘§ 105. Consular officer 

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

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

8 ‘‘§ 106. Documented vessel 

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

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

11 ‘‘§ 107. Exclusive economic zone 

12 ‘‘In this title, the term ‘exclusive economic zone’ means the zone estab13 lished by Presidential Proclamation 5030 of March 10, 1983 (16 U.S.C. 

14 1453 note). 

15 ‘‘§ 108. Fisheries 

16 ‘‘In this title, the term ‘fisheries’ includes processing, storing, trans17 porting (except in foreign commerce), planting, cultivating, catching, taking, 

18 or harvesting fish, shellfish, marine animals, pearls, shells, or marine vege19 tation in the navigable waters of the United States or in the exclusive eco20 nomic zone. 

21 ‘‘§ 109. Foreign commerce or trade 

22 ‘‘(a) IN GENERAL.—In this title, the terms ‘foreign commerce’ and ‘for23 eign trade’ mean commerce or trade between a place in the United States 

24 and a place in a foreign country. 

25 ‘‘(b) CAPITAL CONSTRUCTION FUNDS AND CONSTRUCTION-DIFFEREN26 TIAL SUBSIDIES.—In the context of capital construction funds under chap27 ter 535 of this title, and in the context of construction-differential subsidies 

28 under title V of the Merchant Marine Act, 1936, the terms ‘foreign com29 merce’ and ‘foreign trade’ also include, in the case of liquid and dry bulk 

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

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

32 United States-flag bulk vessels to compete freely with foreign-flag bulk ves33 sels in their operation or competition for charters, subject to regulations 

34 prescribed by the Secretary of Transportation. 

35 ‘‘§ 110. Foreign vessel 

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

37 or operated under the authority of a foreign country. 

38 ‘‘§ 111. Numbered vessel 

39 ‘‘In this title, the term ‘numbered vessel’ means a vessel for which a num40 ber has been issued under chapter 123 of this title. 
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1 ‘‘§ 112. State 

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

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

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

5 of the United States. 

6 ‘‘§ 113. Undocumented 

7 ‘‘In this title, the term ‘undocumented’ means not having and not re8 quired to have a certificate of documentation issued under chapter 121 of 

9 this title. 

10 ‘‘§ 114. United States 

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

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

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

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

15 ‘‘§ 115. Vessel 

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

17 3 of title 1. 

18 ‘‘§ 116. Vessel of the United States 

19 ‘‘In this title, the term ‘vessel of the United States’ means a vessel docu20 mented under chapter 121 of this title, numbered under chapter 123 of this 

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

22 ‘‘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.

23 ‘‘§ 301. General organization 

24 ‘‘(a) ORGANIZATION.—The Federal Maritime Commission is an inde25 pendent establishment of the United States Government. 

26 ‘‘(b) COMMISSIONERS.—

27 ‘‘(1) COMPOSITION.—The Commission is composed of 5 Commis28 sioners, appointed by the President by and with the advice and consent

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

30 the same political party. 

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

32 term beginning one year apart. An individual appointed to fill a va33 cancy is appointed only for the unexpired term of the individual being 

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

35 appointment. When the term of a Commissioner ends, the Commis-
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1 sioner may continue to serve until a successor is appointed and quali2 fied. 

3 ‘‘(3) REMOVAL.—The President may remove a Commissioner for in4 efficiency, neglect of duty, or malfeasance in office. 

5 ‘‘(c) CHAIRMAN.—

6 ‘‘(1) DESIGNATION.—The President shall designate one of the Com7 missioners as Chairman. 

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

9 and administrative officer of the Commission. In carrying out the du10 ties and powers of the Commission (other than under paragraph (3)), 

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

12 and determinations of the Commission. 

13 ‘‘(3) PARTICULAR DUTIES.—

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

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

16 Commission; 

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

18 only after consultation with the other Commissioners; 

19 ‘‘(iii) distribute the business of the Commission among per20 sonnel and organizational units; 

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

22 purposes; and 

23 ‘‘(v) assign Commission personnel, including Commis24 sioners, to perform duties and powers delegated by the Com25 mission under section 304 of this title. 

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

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

28 in the offices of Commissioners other than the Chairman. 

29 ‘‘(4) DELEGATION.—The Chairman may designate officers and em30 ployees under the Chairman’s jurisdiction to perform duties and powers 

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

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

33 recognized. 

34 ‘‘§ 302. Quorum 

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

36 Commission do not impair the power of the Commission to execute its func37 tions. The affirmative vote of a majority of the Commissioners serving on 

38 the Commission is required to dispose of any matter before the Commission. 
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1 ‘‘§ 303. Record of meetings and votes 

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

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

4 or financial transaction of the Commission. 

5 ‘‘§ 304. Delegation of authority 

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

7 order or regulation, may delegate to a division of the Commission, an indi8 vidual Commissioner, an employee board, or an officer or employee of the 

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

10 determining, ordering, certifying, reporting, or otherwise acting on any mat11 ter. This subsection does not affect section 556(b) of title 5. 

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

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

14 the Commission’s own initiative or on the petition of a party to or an inter15 venor in the action, within the time and in the manner prescribed by the 

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

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

18 ‘‘(c) DEEMED ACTION OF COMMISSION.—If the Commission declines re19 view, or if review is not sought, within the time prescribed under subsection 

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

21 action of the Commission. 

22 ‘‘§ 305. Regulations 

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

24 out its duties and powers. 

25 ‘‘§ 306. Annual report 

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

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

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

29 purposes for which all of its expenditures were made, and any recommenda30 tions for legislation. 

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

32 shall include in its annual report to Congress—

33 ‘‘(1) a list of the 20 foreign countries that generated the largest vol34 ume of oceanborne liner cargo for the most recent calendar year in bi35 lateral trade with the United States; 

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

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

38 ‘‘(3) any actions being taken by the Commission to offset those con39 ditions; 

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

41 conditions; and 
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1 ‘‘(5) a list of petitions filed under section 42302(b) of this title that 

2 the Commission rejected and the reasons for each rejection. 

3 ‘‘§ 307. Expenditures 

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

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

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

7 ‘‘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.

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

9 ‘‘(a) ON REQUEST OF SECRETARY OF DEFENSE.—On request of the Sec10 retary of Defense, the head of an agency responsible for the administration 

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

12 laws to the extent the Secretary considers necessary in the interest of na13 tional defense. 

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

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

16 necessary in the interest of national defense, the individual may waive com17 pliance with those laws to the extent, in the manner, and on the terms the 

18 individual prescribes. 

19 ‘‘(c) TERMINATION OF AUTHORITY.—The authority granted by this sec20 tion shall terminate at such time as the Congress by concurrent resolution 

21 or the President may designate. 

22 ‘‘§ 502. Cargo exempt from forfeiture 

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

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

25 master, or crewmember of the vessel; and 

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

27 payment as provided by law. 

28 ‘‘§ 503. Notice of seizure 

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

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

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

32 and the place of residence of the owner or consignee at the time of the sei33 zure. 

34 ‘‘§ 504. Remission of fees and penalties 

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

36 a law or regulation relating to vessels or seamen may be remitted if—
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1 ‘‘(1) application for the remission is made within one year after the 

2 date of the payment or forfeiture; and 

3 ‘‘(2) it is found that the fee, tax, penalty, or forfeiture was improp4 erly or excessively imposed. 

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

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

7 order of the Federal Maritime Commission or the Secretary of Transpor8 tation under subtitle IV or V of this title, for which no penalty is expressly 

9 provided, shall be fined not more than $500. Each day of a continuing viola10 tion is a separate offense.’’.

11 SEC. 4. SUBTITLE II OF TITLE 46. 

12 Chapter 121 of title 46, United States Code, is amended to read as fol13 lows:

14 ‘‘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.
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1 ‘‘SUBCHAPTER I—GENERAL 

2 ‘‘§ 12101. Definition and related terms in other laws 

3 ‘‘(a) DEFINITION.—In this chapter, a vessel is ‘rebuilt’ in the United 

4 States only if the entire rebuilding, including the construction of any major 

5 component of the hull or superstructure, is done in the United States. 

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

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

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

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

10 ‘register’, and ‘registry’ mean a certificate of documentation with a reg11 istry endorsement issued under this chapter. 

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

13 and license’, ‘license for the coastwise (or coasting) trade’, and ‘enroll14 ment and license for the coastwise (or coasting) trade’ mean a certifi15 cate of documentation with a coastwise endorsement issued under this 

16 chapter. 

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

18 not documented. 

19 ‘‘§ 12102. Vessels requiring documentation 

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

21 in the coastwise trade or the fisheries only if the vessel has been issued a 

22 certificate of documentation with an appropriate endorsement under this 

23 chapter. 

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

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

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

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

29 lakes, canals, and inland waters. 

30 ‘‘§ 12103. General eligibility requirements 

31 ‘‘(a) REQUIREMENTS.—Except as otherwise provided, a certificate of doc32 umentation for a vessel may be issued under this chapter only if the vessel 

33 is—

34 ‘‘(1) owned only by citizens of the United States; 

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

36 and 

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

38 ‘‘(b) ENTITIES DEEMED CITIZENS.—For purposes of subsection (a)(1), 

39 the following entities are deemed to be citizens of the United States: 

40 ‘‘(1) An association, trust, joint venture, or other entity if each of 

41 its members is a citizen of the United States. 
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1 ‘‘(2) A partnership if—

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

3 ‘‘(B) the controlling interest in the partnership is owned by citi4 zens of the United States. 

5 ‘‘(3) A corporation if—

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

7 a State; 

8 ‘‘(B) its chief executive officer, by whatever title, and the chair9 man of its board of directors are citizens of the United States; and 

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

11 of the number necessary to constitute a quorum. 

12 ‘‘(4) The United States Government. 

13 ‘‘(5) The government of a State. 

14 ‘‘(c) TEMPORARY CERTIFICATES PRIOR TO MEASUREMENT.—Notwith15 standing subsection (a)(2), the Secretary may provide by regulation for the 

16 issuance of a temporary certificate of documentation for a vessel before it 

17 is measured. 

18 ‘‘§ 12104. Applications for documentation 

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

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

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

22 the information prescribed by the Secretary. 

23 ‘‘(b) APPLICANT’S IDENTIFYING INFORMATION.—The Secretary shall re24 quire the applicant to provide—

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

26 number; or 

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

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

29 ‘‘(B) if the entity does not have a taxpayer identification num30 ber, the social security number of an individual who is a corporate 

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

32 signs the application. 

33 ‘‘§ 12105. Issuance of documentation 

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

35 Secretary, on receipt of a proper application, shall issue a certificate of doc36 umentation or a temporary certificate of documentation for a vessel satis37 fying the requirements of section 12103 of this title. The certificate shall

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

39 owner applies and the vessel is eligible. 

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

41 Secretary may delegate, subject to the supervision and control of the Sec-
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1 retary and under terms prescribed by regulation, to private entities deter2 mined and certified by the Secretary to be qualified, the authority to issue 

3 a temporary certificate of documentation for a recreational vessel eligible 

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

5 subsection is valid for not more than 30 days. 

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

7 documentation shall—

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

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

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

11 ‘‘(d) PROCEDURES TO ENSURE INTEGRITY AND ACCURACY.—The Sec12 retary shall prescribe procedures to ensure the integrity of, and the accuracy 

13 of information contained in, certificates of documentation. 

14 ‘‘§ 12106. Surrender of title and number 

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

16 or required to display numbers under chapter 123 of this title, and any cer17 tificate of title issued by a State for a documented vessel shall be surren18 dered as provided by regulations prescribed by the Secretary. 

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

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

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

22 only if the mortgagee consents. 

23 ‘‘§ 12107. Wrecked vessels 

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

25 it—

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

27 and 

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

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

30 ‘‘(b) APPRAISALS.—The Secretary may appoint a board of three apprais31 ers to determine whether a vessel satisfies subsection (a)(2). The costs of 

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

33 ‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL 

34 DOCUMENTATION 

35 ‘‘§ 12111. Registry endorsement 

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

37 that satisfies the requirements of section 12103 of this title. 

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

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

40 Samoa, Wake, Midway, or Kingman Reef. 

41 ‘‘(c) CERTAIN VESSELS OWNED BY TRUSTS.—
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1 ‘‘(1) NONAPPLICATION OF BENEFICIARY CITIZENSHIP REQUIRE2 MENT.—For the issuance of a certificate of documentation with only 

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

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

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

6 States. 

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

8 ‘‘(A) IN GENERAL.—Subject to subparagraph (B), a trust quali9 fies under this paragraph with respect to a vessel only if—

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

11 ‘‘(ii) the application for documentation of the vessel in12 cludes the affidavit of each trustee stating that the trustee is 

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

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

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

16 result of which the beneficiary or other person would hold 

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

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

19 to matters involving any ownership or operation of the vessel 

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

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

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

23 in directing a trustee for a trust in matters involving any owner24 ship or operation of the vessel that may adversely affect the inter25 ests of the United States or in removing a trustee for a trust with26 out cause, either directly or indirectly through the control of an27 other person, the trust is not qualified under this paragraph un28 less the trust instrument provides that persons who are not citi29 zens of the United States may not hold more than 25 percent of 

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

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

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

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

34 in a trust. 

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

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

37 a citizen of the United States under section 50501 of this title, the ves38 sel is deemed to be owned by a citizen of the United States for pur39 poses of that section and related laws, except subtitle B of title VI of 

40 the Merchant Marine Act, 1936. 
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1 ‘‘§ 12112. Coastwise endorsement 

2 ‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued for a ves3 sel that—

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

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

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

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

8 lawfully condemned as prize; 

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

10 the United States; or 

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

12 title; and 

13 ‘‘(3) otherwise qualifies under the laws of the United States to en14 gage in the coastwise trade. 

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

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

17 is issued may engage in the coastwise trade. 

18 ‘‘§ 12113. Fishery endorsement 

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

20 that—

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

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

23 subsection (c); 

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

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

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

27 1, 2001, for a breach of the laws of the United States; and 

28 ‘‘(5) otherwise qualifies under the laws of the United States to en29 gage in the fisheries. 

30 ‘‘(b) AUTHORIZED ACTIVITY.—

31 ‘‘(1) IN GENERAL.—Subject to the laws of the United States regu32 lating the fisheries, a vessel for which a fishery endorsement is issued 

33 may engage in the fisheries. 

34 ‘‘(2) USE BY PROHIBITED PERSONS.—A fishery endorsement is in35 valid immediately if the vessel for which it is issued is used as a fishing 

36 vessel while it is chartered or leased to an individual who is not a cit37 izen of the United States or to an entity that is not eligible to own 

38 a vessel with a fishery endorsement.

39 ‘‘(c) OWNERSHIP REQUIREMENTS FOR ENTITIES.—

40 ‘‘(1) IN GENERAL.—A vessel owned by an entity is eligible for a fish41 ery endorsement only if at least 75 percent of the interest in the entity, 
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1 at each tier of ownership and in the aggregate, is owned and controlled 

2 by citizens of the United States. 

3 ‘‘(2) DETERMINING 75 PERCENT OWNERSHIP.—In determining 

4 whether the 75 percent ownership requirement of paragraph (1) is sat5 isfied, the Secretary shall apply section 50501(d) of this title, except 

6 that for this purpose the terms ‘control’ or ‘controlled’—

7 ‘‘(A) include the right to—

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

9 ‘‘(ii) limit the actions of or replace the chief executive offi10 cer, a majority of the board of directors, any general partner, 

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

12 or 

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

14 with a fishery endorsement; but 

15 ‘‘(B) do not include the right to simply participate in the activi16 ties under clause (A), or the exercise of rights under loan or mort17 gage covenants by a mortgagee eligible to be a preferred mort18 gagee under section 31322(a) of this title, except that a mortgagee 

19 not eligible to own a vessel with a fishery endorsement may only 

20 operate such a vessel to the extent necessary for the immediate 

21 safety of the vessel or for repairs, drydocking, or berthing changes. 

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

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

24 authority of the Western Pacific Fishery Management Council estab25 lished under section 302(a)(1)(H) of the Magnuson-Stevens Fishery 

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

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

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

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

30 continues to comply with the eligibility requirements for a fishery en31 dorsement under the Federal law that was in effect on October 1, 

32 1998. A fishery endorsement issued pursuant to this paragraph is valid 

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

34 ‘‘(d) REQUIREMENTS BASED ON LENGTH, TONNAGE, OR HORSE35 POWER.—

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

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

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

39 chapter 145 of this title or 1,900 gross registered tons as meas40 ured under chapter 143 of this title; or 
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1 ‘‘(C) has an engine or engines capable of producing a total of 

2 more than 3,000 shaft horsepower. 

3 ‘‘(2) REQUIREMENTS.—A vessel subject to this subsection is not eli4 gible for a fishery endorsement unless—

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

6 and endorsed with a fishery endorsement that was effective on 

7 September 25, 1997; 

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

9 21, 1998; and 

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

11 1998, application is made for a new fishery endorsement within 

12 15 business days of the invalidation; or 

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

14 the regional fishery management council of jurisdiction established 

15 under section 302(a)(1) of the Magnuson-Stevens Fishery Con16 servation and Management Act (16 U.S.C. 1852(a)(1)) has rec17 ommended after October 21, 1998, and the Secretary of Com18 merce has approved, conservation and management measures in 

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

20 277, div. C, title II) (16 U.S.C. 1851 note) to allow the vessel to 

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

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

23 ‘‘(1) IN GENERAL.—The Administrator of the Maritime Administra24 tion shall administer subsections (c) and (d) with respect to vessels 100 

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

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

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

28 to demonstrate compliance with those provisions. 

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

30 conform to the extent practicable with the regulations establishing the 

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

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

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

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

35 certificate of documentation for the vessel and to comply with this sub36 section and subsections (c) and (d), and shall not be required to be no37 tarized. 

38 ‘‘(3) TRANSFER OF OWNERSHIP.—Transfers of ownership and con39 trol of vessels subject to subsection (c) or (d), which are 100 feet or 

40 greater in registered length, shall be rigorously scrutinized for viola41 tions of those provisions, with particular attention given to—
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1 ‘‘(A) leases, charters, mortgages, financing, and similar ar2 rangements; 

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

4 fishery endorsement under subsection (c) or (d), over the manage5 ment, sales, financing, or other operations of an entity; and 

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

7 time of all, or substantially all, of the living marine resources har8 vested by a fishing vessel. 

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

10 establish reasonable and necessary requirements to demonstrate compliance 

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

12 feet in registered length, and shall seek to minimize the administrative bur13 den on individuals who own and operate those vessels. 

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

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

16 fishing capacity reduction program under the Magnuson-Stevens Fishery 

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

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

19 for a fishery endorsement, and any fishery endorsement issued for that ves20 sel is invalid. 

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

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

23 owner does not comply with those provisions. 

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

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

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

27 approval of an implementing agency, identify transactions that do not re28 quire prior agency approval, and to the extent practicable, minimize disrup29 tions to the commercial fishing industry, to the traditional financing ar30 rangements of that industry, and to the opportunity to form fishery co31 operatives. 

32 ‘‘§ 12114. Recreational endorsement 

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

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

35 ‘‘(b) AUTHORIZED ACTIVITY.—A vessel operating under a recreational en36 dorsement may be operated only for pleasure.

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

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

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

40 of Homeland Security. However, a recreational vessel is subject to the re41 quirements for reporting arrivals under section 433 of the Tariff Act of 
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1 1930 (19 U.S.C. 1433), and individuals on the vessel are subject to applica2 ble customs regulations. 

3 ‘‘§ 12115. Temporary endorsement for vessels procured out4 side the United States 

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

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

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

8 States by citizens of the United States. 

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

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

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

12 Samoa, Wake, Midway, or Kingman Reef. 

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

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

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

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

17 6 months the application of a vessel inspection law carried out by the Sec18 retary or regulations prescribed under that law. 

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

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

21 regulations prescribed by the Secretary. 

22 ‘‘§ 12116. Limited endorsements for Guam, American Samoa, 

23 and Northern Mariana Islands 

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

25 (b) may be issued—

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

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

28 Northern Mariana Islands; or 

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

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

31 the Northern Mariana Islands. 

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

33 (a) for a vessel that—

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

35 ‘‘(2) was not built or rebuilt in the United States; 

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

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

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

39 title; and 

40 ‘‘(4) otherwise qualifies under the laws of the United States to en41 gage in the coastwise trade or the fisheries, as the case may be. 
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•HR 4319 IH 

1 ‘‘§ 12117. Oil spill response vessels 

2 ‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued for a ves3 sel that—

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

5 for the ownership requirement otherwise applicable without regard to 

6 this section; 

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

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

9 cooperative; 

10 ‘‘(3) is at least 50 percent owned by individuals who are citizens of 

11 the United States or by entities described in section 12103(b) of this 

12 title; and 

13 ‘‘(4) is to be used only for—

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

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

16 the United States or the exclusive economic zone; or 

17 ‘‘(ii) training exercises to prepare to respond to such a dis18 charge. 

19 ‘‘(b) VESSEL DEEMED OWNED BY CITIZENS.—A vessel satisfying sub20 section (a) is deemed to be owned only by citizens of the United States 

21 under sections 12103(a)(1), 12132, and 50501 of this title. 

22 ‘‘§ 12118. Owners engaged primarily in manufacturing or 

23 mineral industry 

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

25 ‘‘(1) CITIZEN OF THE UNITED STATES.—The term ‘citizen of the 

26 United States’ means a corporation that has filed a certificate under 

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

28 the Secretary, establishing that—

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

30 United States or a State; 

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

32 are individuals who are citizens of the United States; 

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

34 residents of the United States; 

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

36 or mineral industry in the United States; 

37 ‘‘(E) the total book value of the vessels owned by the corpora38 tion is not more than 10 percent of the total book value of the 

39 assets of the corporation; and 
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1 ‘‘(F) the corporation buys or produces in the United States at 

2 least 75 percent of the raw materials used or sold in its oper3 ations. 

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

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

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

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

8 State; and 

9 ‘‘(B) controls at least 50 percent of the voting stock of a cor10 poration qualifying as a citizen of the United States under clause 

11 (1). 

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

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

14 at the times prescribed by the Secretary, establishing that the corpora15 tion—

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

17 State; and 

18 ‘‘(B) has at least 50 percent of its voting stock controlled by 

19 a corporation qualifying as a citizen of the United States under 

20 clause (1) or by the latter corporation’s parent. 

21 ‘‘(b) REQUIREMENTS.—A certificate of documentation and appropriate 

22 endorsement may be issued for a vessel that—

23 ‘‘(1) is owned by a corporation qualifying as a citizen of the United 

24 States under subsection (a)(1); 

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

26 ‘‘(3) if self-propelled, is less than 500 gross tons as measured under 

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

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

29 14104 of this title. 

30 ‘‘(c) EFFECTS OF DOCUMENTATION.—

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

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

33 coastwise trade; and 

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

35 same benefits and are subject to the same requirements and pen36 alties as if the vessel were otherwise documented or exempt from 

37 documentation under this chapter. 

38 ‘‘(2) TRANSPORTATION OF PASSENGERS OR MERCHANDISE.—A ves39 sel documented under this section may transport passengers or mer40 chandise for hire in the coastwise trade only—
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1 ‘‘(A) as a service for a parent or subsidiary of the corporation 

2 owning the vessel; or 

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

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

5 corporation owning the vessel to a carrier that—

6 ‘‘(i) is subject to jurisdiction under subchapter II of chap7 ter 135 of title 49; 

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

9 under section 50501 of this title; and 

10 ‘‘(iii) is not owned or controlled by the corporation owning 

11 the vessel. 

12 ‘‘(d) VALIDITY AND SURRENDER OF CERTIFICATE.—A certificate filed by 

13 a corporation under this section remains valid only as long as the corpora14 tion continues to satisfy the conditions required of the corporation by this 

15 section. When a corporation no longer satisfies those conditions, the cor16 poration loses its status under this section and immediately shall surrender 

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

18 ‘‘(e) PENALTIES.—

19 ‘‘(1) FALSIFYING MATERIAL FACT.—If a corporation knowingly fal20 sifies a material fact in a certificate filed under subsection (a), the ves21 sel (or its value) documented or operated under this section shall be 

22 forfeited. 

23 ‘‘(2) TRANSPORTING MERCHANDISE.—If a vessel transports mer24 chandise for hire in violation of this section, the merchandise shall be 

25 forfeited to the United States Government. 

26 ‘‘(3) TRANSPORTING PASSENGERS.—If a vessel transports pas27 sengers for hire in violation of this section, the vessel is liable for a 

28 penalty of $200 for each passenger so transported. 

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

30 under this subsection may be remitted or mitigated under section 

31 2107(b) of this title. 

32 ‘‘§ 12119. Owners engaged primarily in leasing or financing 

33 transactions 

34 ‘‘(a) IN GENERAL.—A coastwise endorsement may be issued for a vessel 

35 if—

36 ‘‘(1) the vessel satisfies the requirements for a coastwise endorse37 ment, except for the ownership requirement otherwise applicable with38 out regard to this section; 

39 ‘‘(2) the person that owns the vessel, a parent entity of that person, 

40 or a subsidiary of a parent entity of that person, is primarily engaged 

41 in leasing or other financing transactions; 
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1 ‘‘(3) the vessel is under a demise charter to a person that certifies 

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

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

4 ‘‘(4) the demise charter is for a period of at least 3 years or a short5 er period as may be prescribed by the Secretary. 

6 ‘‘(b) FILING OF DEMISE CHARTER.—The demise charter and any amend7 ments to the charter shall be filed with the certificate required by this sec8 tion or within 10 days after filing an amendment to the charter. The char9 ter and amendments shall be made available to the public. 

10 ‘‘(c) CONTINUATION OF ENDORSEMENT AFTER TERMINATION OF CHAR11 TER.—When a charterer terminates a charter required by this section, the 

12 Secretary may continue the coastwise endorsement for not more than 6 

13 months on terms and conditions the Secretary may prescribe. 

14 ‘‘(d) DEEMED OWNED BY CITIZENS.—For purposes of sections 12103 

15 and 50501 of this title, a vessel satisfying the requirements of this section 

16 is deemed to be owned only by citizens of the United States. 

17 ‘‘§ 12120. Liquified gas tankers 

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

19 Secretary may issue a certificate of documentation with a coastwise endorse20 ment for a vessel to transport liquified natural gas or liquified petroleum 

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

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

23 or 

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

25 vessel is placed under a foreign registry and subsequently redocu26 mented under this chapter for operation under this section. 

27 ‘‘§ 12121. Small passenger vessels and uninspected pas28 senger vessels 

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

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

31 that—

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

33 old; or 

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

35 3 years before the certificate requested under subsection (b) would 

36 take effect. 

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

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

39 ‘uninspected passenger vessel’, and ‘passenger for hire’ have the mean40 ing given those terms in section 2101 of this title. 
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•HR 4319 IH 

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

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

3 issue a certificate of documentation with an appropriate endorsement for 

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

5 uninspected passenger vessel in the case of an eligible vessel authorized to 

6 carry no more than 12 passengers for hire if the Secretary of Transpor7 tation, after notice and an opportunity for public comment, determines that 

8 the employment of the vessel in the coastwise trade will not adversely af9 fect—

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

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

12 built in the United States in that business. 

13 ‘‘(c) REVOCATION.—

14 ‘‘(1) FOR FRAUD.—The Secretary shall revoke a certificate or en15 dorsement issued under subsection (b) if the Secretary of Transpor16 tation, after notice and an opportunity for a hearing, determines that 

17 the certificate or endorsement was obtained by fraud. 

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

19 affect—

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

21 section 1001 of title 18; or 

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

23 or endorsement issued under subsection (b). 

24 ‘‘SUBCHAPTER III—MISCELLANEOUS 

25 ‘‘§ 12131. Command of documented vessels 

26 ‘‘A documented vessel (other than a vessel with only a recreational en27 dorsement) may be placed under the command only of a citizen of the 

28 United States. 

29 ‘‘§ 12132. Loss of coastwise trade privileges 

30 ‘‘A vessel having a lawful right to engage in the coastwise trade is perma31 nently prohibited from engaging in the coastwise trade if the vessel is—

32 ‘‘(1)(A) more than 200 gross tons as measured under chapter 143 

33 of this title; and

34 ‘‘(B) sold to a person not a citizen of the United States or docu35 mented under the laws of a foreign country; or 

36 ‘‘(2) rebuilt outside the United States. 

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

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

40 be carried on the vessel unless the vessel is exempt by regulation from car41 rying the certificate. 
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1 ‘‘(b) AVAILABILITY.—The owner or individual in charge of a vessel re2 quired to carry its certificate of documentation shall make the certificate 

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

4 laws or as otherwise required by law or regulation. 

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

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

7 both. 

8 ‘‘§ 12134. Evidentiary uses of documentation 

9 ‘‘A certificate of documentation is—

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

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

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

13 trade; and 

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

15 ownership is in issue. 

16 ‘‘§ 12135. Invalidation of certificates of documentation 

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

18 invalid if the vessel for which it is issued—

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

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

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

24 ‘‘§ 12136. Surrender of certificates of documentation 

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

28 ‘‘(b) CONDITIONS FOR SURRENDER.—

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

31 over 1,000 gross tons. 

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

35 only if the mortgagee consents. 

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

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

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

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

4 under this chapter for purposes of—

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

7 that date; 

8 ‘‘(B) sections 56102 and 56103(a)(2) and chapter 563 of this 

9 title; and 

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

12 subsection. 

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

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

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

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

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

18 in the public interest. 

19 ‘‘§ 12138. List of documented vessels 

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

21 documented vessels and information about those vessels that the Secretary 

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

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

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

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

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

30 vessel. 

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

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

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

35 characteristics of the vessel; 

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

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

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

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

41 in the Federal Register an updated inventory every 6 months. 
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1 ‘‘§ 12139. Reports 

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

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

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

5 vessels to submit reports in any reasonable form and manner the Secretary 

6 may prescribe. 

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

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

9 if a documented vessel is rebuilt outside the United States and the ves10 sel exceeds the tonnage specified in paragraph (2), the owner or master 

11 shall submit a report of the rebuilding to the Secretary. 

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

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

14 title; or 

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

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

17 this title. 

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

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

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

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

22 customs territory of the United States. 

23 ‘‘SUBCHAPTER IV—PENALTIES 

24 ‘‘§ 12151. Penalties 

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

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

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

28 is a separate violation. 

29 ‘‘(b) SEIZURE AND FORFEITURE OF VESSELS.—A vessel and its equip30 ment are liable to seizure by and forfeiture to the Government if—

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

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

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

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

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

36 used for the vessel; 

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

38 revoked under section 12152 of this title; 

39 ‘‘(4) the vessel is employed in a trade without an appropriate en40 dorsement; 
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•HR 4319 IH 

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

2 other than for pleasure; 

3 ‘‘(6) the vessel is a documented vessel (except a vessel with only a 

4 recreational endorsement) and is placed under the command of a per5 son not a citizen of the United States; or 

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

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

8 title. 

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

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

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

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

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

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

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

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

19 endorsement. 

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

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

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

25 vessel under this chapter.’’.

26 SEC. 5. SUBTITLE III OF TITLE 46. 

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

28 States Code, is amended to read as follows:

‘‘Chapter Sec. 

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

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

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

‘‘307. Carriage of Goods by Sea ....................................................................... 30701

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

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

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

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

30 chapter 301 and the lines appearing immediately before and immediately 

31 after chapter 313 indicating that certain chapters are reserved. 

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

33 inserting after the analysis of subtitle III the following:

34 ‘‘CHAPTER 301—GENERAL LIABILITY PROVISIONS

‘‘Sec. 

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

‘‘30102. Liability to passengers. 
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‘‘30103. Liability of master, mate, engineer, and pilot. 

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

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

‘‘30106. Time limit on bringing action.

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

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

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

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

6 or damage is done or consummated on land. 

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

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

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

10 done and consummated on navigable waters. 

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

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

13 States Government for injury or damage done or consummated on land 

14 by a vessel on navigable waters, chapter 309 or 311 of this title, as 

15 appropriate, provides the exclusive remedy. 

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

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

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

20 ‘‘§ 30102. Liability to passengers 

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

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

23 caused by—

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

25 of this title; or 

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

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

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

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

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

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

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

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

35 vessels. 

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

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

38 or, if the seaman dies from the injury, the personal representative of the 
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1 seaman may elect to bring a civil action at law, with the right of trial by 

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

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

4 under this section. 

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

7 is located. 

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

10 countries 

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

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

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

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

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

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

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

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

22 and 

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

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

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

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

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

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

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

32 of—

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

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

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

37 ‘‘§ 30106. Time limit on bringing action 

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

40 3 years after the cause of action arose.
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1 ‘‘CHAPTER 303—DEATH ON THE HIGH SEAS 

‘‘Sec. 

‘‘30301. Short title. 

‘‘30302. Cause of action. 

‘‘30303. Amount and apportionment of recovery. 

‘‘30304. Contributory negligence. 

‘‘30305. Death of plaintiff in pending action. 

‘‘30306. Foreign cause of action. 

‘‘30307. Commercial aviation accidents. 

‘‘30308. Nonapplication. 

2 ‘‘§ 30301. Short title 

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

4 ‘‘§ 30302. Cause of action 

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

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

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

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

10 or dependent relative. 

11 ‘‘§ 30303. Amount and apportionment of recovery 

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

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

15 individuals in proportion to the loss each has sustained. 

16 ‘‘§ 30304. Contributory negligence 

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

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

19 of the decedent and reduce the recovery accordingly. 

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

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

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

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

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

27 chapter. 

28 ‘‘§ 30306. Foreign cause of action 

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

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

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

32 foreign cause of action, without abatement for the amount for which recov33 ery is authorized. 
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1 ‘‘§ 30307. Commercial aviation accidents 

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

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

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

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

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

8 death, but punitive damages are not recoverable. 

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

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

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

12 ‘‘§ 30308. Nonapplication 

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

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

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

17 in the Panama Canal. 

18 ‘‘CHAPTER 305—EXONERATION AND LIMITATION OF 

19 LIABILITY 

‘‘Sec. 

‘‘30501. Definition. 

‘‘30502. Application. 

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

‘‘30504. Loss by fire. 

‘‘30505. General limit of liability. 

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

‘‘30507. Apportionment of losses. 

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

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

‘‘30510. Vicarious liability for medical malpractice. 

‘‘30511. Action by owner for limitation. 

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

20 ‘‘§ 30501. Definition 

21 ‘‘In this chapter, the term ‘owner’ includes a charterer that mans, sup22 plies, and navigates a vessel. 

23 ‘‘§ 30502. Application 

24 ‘‘Except as otherwise provided, this chapter (except section 30503) ap25 plies to seagoing vessels and vessels used on lakes or rivers or in inland 

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

27 ‘‘§ 30503. Declaration of nature and value of goods 

28 ‘‘(a) IN GENERAL.—If a shipper of an item named in subsection (b), con29 tained in a parcel, package, or trunk, loads the item as freight or baggage 

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

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

32 having that information entered on the bill of lading, the owner and master 
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1 of the vessel are not liable as carriers. The owner and master are not liable 

2 beyond the value entered on the bill of lading. 

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

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

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

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

7 small size. 

8 ‘‘§ 30504. Loss by fire 

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

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

11 the design or neglect of the owner. 

12 ‘‘§ 30505. General limit of liability 

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

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

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

16 is limited to the value of the vessel and pending freight. If the vessel has 

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

18 owner is limited to that owner’s proportionate interest in the vessel and 

19 pending freight. 

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

21 wages. 

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

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

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

26 barges, lighters, or nondescript vessels. 

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

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

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

32 injury or death. 

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

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

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

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

37 ‘‘(d) CLAIMS ARISING ON DISTINCT OCCASIONS.—Separate limits of li38 ability apply to claims for personal injury or death arising on distinct occa39 sions. 
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1 ‘‘(e) PRIVITY OR KNOWLEDGE.—In a claim for personal injury or death, 

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

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

4 ‘‘§ 30507. Apportionment of losses 

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

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

7 to their respective losses. 

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

9 time for bringing action 

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

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

13 barges, lighters, or nondescript vessels. 

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

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

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

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

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

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

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

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

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

24 notice is not a bar to recovery if—

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

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

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

29 could not have been given; or 

30 ‘‘(3) the owner of the vessel fails to object to the failure to give no31 tice. 

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

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

35 of—

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

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

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

40 death 

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

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

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

7 the owner’s employees or agents; or 

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

9 trial. 

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

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

12 INJURY.—

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

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

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

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

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

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

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

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

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

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

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

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

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

32 rape. 

33 ‘‘§ 30510. Vicarious liability for medical malpractice 

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

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

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

40 of liability applicable to the doctor, hospital, medical facility, or other health 
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1 care provider in the State of the United States in which the shoreside med2 ical care was provided. 

3 ‘‘§ 30511. Action by owner for limitation 

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

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

7 owner written notice of a claim. 

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

9 shall—

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

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

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

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

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

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

16 claimants—

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

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

19 from time to time as necessary to carry out this chapter. 

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

21 under this section and the owner has complied with subsection (b), all 

22 claims and proceedings against the owner related to the matter in question 

23 shall cease. 

24 ‘‘§ 30512. Liability as master, officer, or seaman not affected 

25 ‘‘This chapter does not affect the liability of an individual as a master, 

26 officer, or seaman, even though the individual is also an owner of the vessel. 

27 ‘‘CHAPTER 307—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. 
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‘‘30732. Definition. 

‘‘30733. Application. 

‘‘30734. Bills of lading. 

‘‘30735. General duties of carrier. 

‘‘30736. Defenses of carrier and vessel. 

‘‘30737. Civil penalty. 

1 ‘‘SUBCHAPTER I—COGSA 

2 ‘‘§ 30701. Short title 

3 ‘‘This subchapter may be cited as the ‘Carriage of Goods by Sea Act’. 

4 ‘‘§ 30702. Definitions 

5 ‘‘In this subchapter: 

6 ‘‘(1) BILL OF LADING.—The term ‘bill of lading’ includes any similar 

7 document of title insofar as it relates to the carriage of goods by sea. 

8 ‘‘(2) CARRIER.—The term ‘carrier’ includes an owner or charterer of 

9 a vessel that makes a contract of carriage with a shipper. 

10 ‘‘(3) CONTRACT OF CARRIAGE.—The term ‘contract of carriage’ 

11 means a contract of carriage evidenced by a bill of lading. 

12 ‘‘(4) GOODS.—The term ‘goods’ includes goods, wares, merchandise, 

13 and articles of every kind, except live animals and cargo that the con14 tract of carriage states will be carried on deck and is carried on deck. 

15 ‘‘§ 30703. Application 

16 ‘‘(a) IN GENERAL.—This subchapter applies to the carriage of goods by 

17 sea in foreign trade under a contract of carriage from the time the goods 

18 are loaded on the vessel to the time they are discharged from the vessel. 

19 ‘‘(b) CHARTER AGREEMENTS.—Unless the parties provide otherwise, this 

20 subchapter does not apply to the carriage of goods under a charter agree21 ment. However, if a bill of lading is issued under a charter agreement—

22 ‘‘(1) the bill of lading shall include the information required by sec23 tion 30706(b)(1)–(3) of this title; and 

24 ‘‘(2) this subchapter applies from the moment the bill of lading regu25 lates the relations between a carrier and a holder of the bill of lading. 

26 ‘‘§ 30704. Freedom of contract and restrictions 

27 ‘‘(a) IN GENERAL.—A shipper and a carrier may make an agreement to 

28 increase any of the carrier’s duties and liabilities under this subchapter by 

29 including the agreement in a bill of lading. 

30 ‘‘(b) BEFORE LOADING AND AFTER DISCHARGE.—A shipper and a car31 rier may make an agreement about the duties and liabilities of the carrier 

32 and the vessel covering the period before the goods are loaded on the vessel 

33 or after they are discharged from the vessel, except that the agreement may 

34 not limit the duties and liabilities imposed on the carrier and the vessel 

35 under subchapter II of this chapter. 

36 ‘‘(c) VOID PROVISION.—A provision in a contract of carriage limiting the 

37 liability of a carrier or vessel for failure to satisfy the requirements of this 
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1 subchapter is void. A benefit of insurance in favor of the carrier, or a simi2 lar clause, is deemed to be a provision limiting the carrier’s liability. 

3 ‘‘§ 30705. General duties of carrier 

4 ‘‘(a) VESSEL.—Before and at the beginning of a voyage, the carrier shall 

5 use due diligence to—

6 ‘‘(1) make the vessel seaworthy; 

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

8 ‘‘(3) make the holds, refrigerating and cooling chambers, and all 

9 other parts of the vessel in which goods are carried fit and safe to re10 ceive, carry, and preserve the goods. 

11 ‘‘(b) GOODS.—The carrier shall properly and carefully load, carry, and 

12 discharge the goods. 

13 ‘‘§ 30706. Bills of lading 

14 ‘‘(a) ISSUANCE.—On receipt of the goods and demand of the shipper, the 

15 carrier or the master or agent of the carrier shall issue the shipper a bill 

16 of lading. 

17 ‘‘(b) CONTENTS.—The bill of lading shall include—

18 ‘‘(1) the marks necessary to identify the goods as provided in writing 

19 by the shipper before the loading begins, if they are stamped or other20 wise shown clearly on the goods (if uncovered) or their covering or con21 tainer in a way that ordinarily should remain legible until the end of 

22 the voyage; 

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

24 in writing by the shipper; 

25 ‘‘(3) the apparent condition of the goods; and 

26 ‘‘(4) a statement that the bill of lading is subject to this subchapter. 

27 ‘‘(c) SUSPECTED INACCURACIES.—The bill of lading is not required to in28 clude a mark, quantity, or weight that the carrier, master, or agent has rea29 sonable ground to suspect is inaccurate or has no reasonable means of 

30 checking. 

31 ‘‘(d) GENERAL AVERAGE.—A bill of lading may include a provision on 

32 general average. 

33 ‘‘(e) PRIMA FACIE EVIDENCE OF RECEIPT.—A bill of lading is prima 

34 facie evidence of receipt by the carrier of the goods described in the bill of 

35 lading. 

36 ‘‘§ 30707. ‘Shipped’ bills of lading 

37 ‘‘If the shipper demands, the carrier, master, or agent shall issue a 

38 ‘shipped’ bill of lading after the goods are loaded on the vessel. If the ship39 per has already received a document of title, the shipper shall surrender the 

40 document in exchange for the ‘shipped’ bill of lading. The carrier, master, 

41 or agent may note on the document at the port of shipment the names of 
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1 the vessels and the dates of shipment, and when so noted, that document 

2 is deemed to be a ‘shipped’ bill of lading. 

3 ‘‘§ 30708. Shipper’s guarantee of statements 

4 ‘‘The shipper is deemed to have guaranteed to the carrier the accuracy 

5 at the time of shipment of the marks, number, quantity, and weight pro6 vided by the shipper. The shipper shall indemnify the carrier against loss, 

7 damages, and expenses arising from inaccuracies in the information. How8 ever, the carrier’s right to indemnity from the shipper does not limit the 

9 carrier’s liability under the contract of carriage to other persons. 

10 ‘‘§ 30709. Limitation on liability when shipper fails to de11 clare nature and value of goods 

12 ‘‘(a) IN GENERAL.—If the nature and value of the goods are not declared 

13 by the shipper before shipment and included in the bill of lading, the carrier 

14 and the vessel are not liable for loss or damage in an amount greater than 

15 $500 (United States currency or an equivalent amount in other currency) 

16 for each package or, if the goods are not shipped in packages, for each cus17 tomary freight unit. A declaration of the nature and value of the goods in 

18 a bill of lading is prima facie evidence of the nature and value. 

19 ‘‘(b) HIGHER LIMIT.—A shipper and a carrier may agree on a higher 

20 limit of liability than provided in subsection (a). However, the carrier is not 

21 liable for more than the amount of damage actually sustained. 

22 ‘‘(c) FRAUD.—If the shipper fraudulently misstates the nature or value 

23 of the goods in the bill of lading, the carrier and the vessel are not liable 

24 for loss or damage. 

25 ‘‘§ 30710. Weight of bulk cargo 

26 ‘‘If under the custom of a trade the weight of bulk cargo included in a 

27 bill of lading is a weight ascertained or accepted by a third party (other 

28 than the carrier and the shipper), and the bill of lading states that the 

29 weight was ascertained or accepted by a third party, then notwithstanding 

30 any other provision of this chapter—

31 ‘‘(1) the shipper is not deemed to have guaranteed to the carrier the 

32 accuracy of the weight; and 

33 ‘‘(2) the bill of lading is not prima facie evidence against the carrier 

34 of receipt of goods of the weight stated in the bill of lading.

35 ‘‘§ 30711. Defenses of carrier and vessel 

36 ‘‘(a) DUE DILIGENCE.—If a carrier has used due diligence as required 

37 by section 30705(a) of this title, the carrier and the vessel are not liable 

38 for loss or damage caused by unseaworthiness. The burden of proving due 

39 diligence is on the carrier or other person claiming exemption from liability 

40 under this subsection. 

41 ‘‘(b) OTHER DEFENSES.—
38

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1 ‘‘(1) IN GENERAL.—A carrier and the vessel are not liable for loss 

2 or damage caused by—

3 ‘‘(A) error in the navigation or management of the vessel; 

4 ‘‘(B) fire, unless caused by the actual fault or privity of the car5 rier; 

6 ‘‘(C) dangers of the sea or other navigable waters; 

7 ‘‘(D) act of God; 

8 ‘‘(E) act of war; 

9 ‘‘(F) act of public enemies; 

10 ‘‘(G) arrest or restraint of princes, rulers, or people, or seizure 

11 under legal process; 

12 ‘‘(H) quarantine restriction; 

13 ‘‘(I) act or omission of the shipper or owner of the goods or 

14 their agent; 

15 ‘‘(J) strike, lockout, stoppage, or restraint of labor not caused 

16 by the carrier; 

17 ‘‘(K) riot or civil commotion; 

18 ‘‘(L) attempt to save life or property at sea; 

19 ‘‘(M) inherent defect, quality, or vice of the goods; 

20 ‘‘(N) insufficiency of packaging; 

21 ‘‘(O) insufficiency of marks; 

22 ‘‘(P) latent defect not discoverable by due diligence; or 

23 ‘‘(Q) any other cause arising without the actual fault or privity 

24 of the carrier and without the fault or neglect of an agent of the 

25 carrier. 

26 ‘‘(2) BURDEN OF PROOF.—The burden of proof is on the person 

27 claiming the benefit of paragraph (1)(Q) to show that neither the ac28 tual fault or privity of the carrier nor the fault or neglect of the car29 rier’s agent contributed to the loss or damage. 

30 ‘‘(c) REASONABLE DEVIATIONS.—A reasonable deviation, including a de31 viation to attempt to save life or property at sea, is not a breach of a con32 tract of carriage or a violation of this subchapter, and a carrier is not liable 

33 for loss or damage caused by the deviation. A deviation to load or unload 

34 passengers or cargo is prima facie unreasonable. 

35 ‘‘§ 30712. Dangerous goods 

36 ‘‘(a) SHIPPED WITHOUT KNOWLEDGE AND CONSENT.—If inflammable, 

37 explosive, or otherwise dangerous goods are shipped without the carrier, 

38 master, or agent knowing the nature of the goods and consenting to the 

39 shipment, the carrier may unload the goods at any place, destroy them, or 

40 make them innocuous any time before discharge of the goods at the port 
39

•HR 4319 IH 

1 of destination, without liability. The shipper is liable for all damages and 

2 expenses arising out of the shipment. 

3 ‘‘(b) SHIPPED WITH KNOWLEDGE AND CONSENT.—If goods described in 

4 subsection (a) are shipped with knowledge and consent of the carrier, mas5 ter, or agent, and the goods become a danger to the vessel or other cargo 

6 on the vessel, the carrier may take any action described in subsection (a) 

7 without liability except for general average, if any. 

8 ‘‘§ 30713. Liability of shipper 

9 ‘‘A shipper is not liable for loss or damage sustained by a carrier or vessel 

10 arising from any cause without the act or fault of the shipper or shipper’s 

11 agent. 

12 ‘‘§ 30714. Loss or damage 

13 ‘‘(a) INSPECTION.—If loss or damage is suspected, the carrier and the 

14 person receiving the goods shall give all reasonable facilities to each other 

15 to inspect and tally the goods. 

16 ‘‘(b) NOTICE.—If loss or damage has occurred, the person entitled to de17 livery of the goods shall give written notice of the general nature of the loss 

18 or damage to the carrier or the carrier’s agent. If the loss or damage is 

19 apparent, the notice shall be given at the port of discharge before or at the 

20 time of taking custody of the goods. If the loss or damage is not apparent, 

21 the notice shall be given within 3 days after taking custody. Notice of the 

22 loss or damage may be written on the receipt by the person taking custody. 

23 However, notice is not required if a joint inspection of the goods is made 

24 at or before the time of taking custody. 

25 ‘‘(c) EFFECT OF FAILURE TO GIVE NOTICE.—Failure to give notice 

26 under this section is prima facie evidence of delivery of the goods as de27 scribed in the bill of lading. However, failure to give notice does not affect 

28 the shipper’s right to bring a civil action for the loss or damage. 

29 ‘‘(d) TIME LIMIT ON BRINGING ACTION.—A civil action under this chap30 ter for loss or damage must be brought within one year after the goods are 

31 delivered or should have been delivered. 

32 ‘‘§ 30715. Special agreement about particular goods 

33 ‘‘(a) APPLICATION.—This section applies only to shipments for which the 

34 character or condition of the goods or the circumstances or terms of the 

35 carriage reasonably justify a special agreement, and not to ordinary com36 mercial shipments made in the ordinary course of trade. 

37 ‘‘(b) AGREEMENT.—A shipper and a carrier may make a special agree38 ment about the carrier’s duties and liabilities applicable to the carriage of 

39 particular goods, including, to the extent not contrary to public policy, the 

40 duty about seaworthiness. 
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1 ‘‘(c) BILL OF LADING PROHIBITED.—A bill of lading may not be issued 

2 for goods carried under an agreement under this section. The agreement 

3 shall be embodied in a receipt which is nonnegotiable and marked as such. 

4 ‘‘§ 30716. Discrimination between competing shippers 

5 ‘‘A common carrier by water may not discriminate between competing 

6 shippers similarly placed in time and circumstances in—

7 ‘‘(1) issuing bills of lading under this subchapter; or 

8 ‘‘(2) increasing any of the carrier’s duties or liabilities as provided 

9 in section 30704(a) of this title. 

10 ‘‘§ 30717. Suspension of subchapter by President 

11 ‘‘(a) AUTHORITY.—The President, by proclamation, may suspend any of 

12 the provisions of this subchapter for any period (including indefinitely) if 

13 the Secretary of Transportation certifies that any of those provisions, or the 

14 laws of a foreign country related to the carriage of goods by sea, prejudice 

15 the United States in competing with foreign countries in foreign trade. 

16 ‘‘(b) RESCISSIONS.—The President, by proclamation, may rescind a sus17 pension under this section. When a suspension is rescinded, the provisions 

18 that were suspended are reinstated and apply to a contract of carriage made 

19 after the suspension is rescinded. 

20 ‘‘(c) EFFECTIVE DATE OF SUSPENSION OR RESCISSION.—A suspension 

21 or rescission under this section is effective on the date specified in the proc22 lamation, but the date shall be at least 10 days after the proclamation is 

23 issued. 

24 ‘‘(d) APPLICABILITY OF OTHER LAW.—Any other provision of law appli25 cable to a suspended provision continues to apply. 

26 ‘‘§ 30718. Other law not affected 

27 ‘‘This subchapter does not affect chapter 801 of title 49. 

28 ‘‘SUBCHAPTER II—HARTER 

29 ‘‘§ 30731. Short title 

30 ‘‘This subchapter may be cited as the ‘Harter Act’. 

31 ‘‘§ 30732. Definition 

32 ‘‘In this subchapter, the term ‘goods’ does not include live animals. 

33 ‘‘§ 30733. Application 

34 ‘‘(a) IN GENERAL.—This subchapter applies to the carriage of goods by 

35 sea under a contract of carriage—

36 ‘‘(1) in foreign trade before the goods are loaded on the vessel and 

37 after they are discharged from the vessel; or 

38 ‘‘(2) not in foreign trade. 

39 ‘‘(b) AGREEMENT TO APPLY SUBCHAPTER I.—A shipper and a carrier 

40 may agree that the carriage of goods by sea not in foreign trade is to be 

41 governed by subchapter I of this chapter rather than by this subchapter. 
41

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1 ‘‘§ 30734. Bills of lading 

2 ‘‘(a) ISSUANCE.—On receipt of the goods and demand of the shipper, the 

3 carrier or the master or agent of the carrier shall issue the shipper a bill 

4 of lading or shipping document. 

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

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

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

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

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

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

11 document is prima facie evidence of receipt by the carrier of the goods de12 scribed in the bill of lading. 

13 ‘‘§ 30735. General duties of carrier 

14 ‘‘(a) VESSEL.—Before and at the beginning of a voyage, the carrier shall 

15 use due diligence to—

16 ‘‘(1) make the vessel seaworthy; and 

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

18 ‘‘(b) GOODS.—The carrier shall properly and carefully load, carry, and 

19 deliver the goods. 

20 ‘‘(c) VOID PROVISION.—A provision in a bill of lading or shipping docu21 ment limiting the liability of a carrier or vessel for failure to carry out the 

22 duties described in this section is void. 

23 ‘‘§ 30736. Defenses of carrier and vessel 

24 ‘‘(a) DUE DILIGENCE.—If a carrier has used due diligence as required 

25 by section 30735(a) of this title, the carrier and the vessel are not liable 

26 for loss or damage caused by an error in the navigation or management of 

27 the vessel. 

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

29 or damage caused by—

30 ‘‘(1) dangers of the sea or other navigable waters; 

31 ‘‘(2) act of God; 

32 ‘‘(3) act of public enemies; 

33 ‘‘(4) seizure under legal process; 

34 ‘‘(5) act or omission of the shipper or owner of the goods or their 

35 agent; 

36 ‘‘(6) inherent defect, quality, or vice of the goods; 

37 ‘‘(7) insufficiency of packaging; 

38 ‘‘(8) attempt to save life or property at sea; or 

39 ‘‘(9) deviation to save life or property at sea. 
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1 ‘‘§ 30737. Civil penalty 

2 ‘‘(a) IN GENERAL.—A carrier, master, or agent of a carrier that commits 

3 any of the following violations is liable for a civil penalty of not more than 

4 $2,000: 

5 ‘‘(1) Refusing to issue on demand a bill of lading or shipping docu6 ment as required by section 30734 of this title. 

7 ‘‘(2) Contracting to limit a duty imposed by section 30735 of this 

8 title or a liability for breach of the duty. 

9 ‘‘(b) LIEN.—The amount of the penalty and costs of the violation are a 

10 lien on the vessel whose owner, master, or agent committed the violation. 

11 ‘‘(c) DISPOSITION OF PENALTY.—Half of the penalty shall be paid to the 

12 person injured by the violation and half to the United States Government. 

13 ‘‘CHAPTER 309—SUITS IN ADMIRALTY AGAINST UNITED 

14 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. 

15 ‘‘§ 30901. Short title 

16 ‘‘This chapter may be cited as the ‘Suits in Admiralty Act’. 

17 ‘‘§ 30902. Definition 

18 ‘‘In this chapter, the term ‘federally-owned corporation’ means a corpora19 tion in which the United States Government owns all the outstanding cap20 ital stock. 

21 ‘‘§ 30903. Waiver of immunity 

22 ‘‘(a) IN GENERAL.—In a case in which, if a vessel were privately owned 

23 or operated, or if cargo were privately owned or possessed, or if a private 

24 person or property were involved, a civil action in admiralty could be main25 tained, a civil action in personam may be brought against the United States 

26 Government or a federally-owned corporation. In a civil action in admiralty 

27 brought by the Government or a federally-owned corporation, an admiralty 

28 claim in personam may be filed or a setoff claimed against the Government 

29 or corporation. 
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1 ‘‘(b) NON-JURY.—A claim against the Government or a federally-owned 

2 corporation under this section shall be tried without a jury. 

3 ‘‘§ 30904. Exclusive remedy 

4 ‘‘If a remedy is provided by this chapter, an action arising out of the 

5 same subject matter may not be brought under any other law against an 

6 officer, employee, or agent of the United States Government or a federally7 owned corporation whose act or omission gave rise to the claim. 

8 ‘‘§ 30905. Period for bringing action 

9 ‘‘A civil action under this chapter must be brought within 2 years after 

10 the cause of action arose. 

11 ‘‘§ 30906. Venue 

12 ‘‘(a) IN GENERAL.—A civil action under this chapter shall be brought in 

13 the district court of the United States for the district in which—

14 ‘‘(1) any plaintiff resides or has its principal place of business; or 

15 ‘‘(2) the vessel or cargo is found. 

16 ‘‘(b) TRANSFER.—On a motion by a party, the court may transfer the 

17 action to any other district court of the United States. 

18 ‘‘§ 30907. Security 

19 ‘‘Neither the United States Government nor a federally-owned corporation 

20 may be required to give a bond or admiralty stipulation in a civil action 

21 under this chapter. 

22 ‘‘§ 30908. Procedure for hearing and determination 

23 ‘‘(a) IN GENERAL.—A civil action under this chapter shall proceed and 

24 be heard and determined according to the principles of law and the rules 

25 of practice applicable in like cases between private parties. 

26 ‘‘(b) IN REM.—

27 ‘‘(1) REQUIREMENTS.—The action may proceed according to the 

28 principles of an action in rem if—

29 ‘‘(A) the plaintiff elects in the complaint; and 

30 ‘‘(B) it appears that an action in rem could have been main31 tained had the vessel or cargo been privately owned and possessed. 

32 ‘‘(2) EFFECT ON RELIEF IN PERSONAM.—An election under para33 graph (1) does not prevent the plaintiff from seeking relief in personam 

34 in the same action.

35 ‘‘§ 30909. Exoneration and limitation 

36 ‘‘In a civil action under this chapter, the United States Government is 

37 entitled to the exemptions from and limitations of liability provided by law 

38 to an owner, charterer, operator, or agent of a vessel. 

39 ‘‘§ 30910. Costs and interest 

40 ‘‘(a) IN GENERAL.—A judgment against the United States Government 

41 or a federally-owned corporation under this chapter may include costs and 
44

•HR 4319 IH 

1 interest at the rate of 4 percent a year until satisfied. Interest shall run 

2 as ordered by the court, except that interest is not allowable for the period 

3 before the action is filed. 

4 ‘‘(b) CONTRACT PROVIDING FOR INTEREST.—Notwithstanding subsection 

5 (a), if the claim is based on a contract providing for interest, interest may 

6 be awarded at the rate and for the period provided in the contract. 

7 ‘‘§ 30911. Arbitration, compromise, or settlement 

8 ‘‘The Secretary of a department of the United States Government, or the 

9 board of trustees of a federally-owned corporation, may arbitrate, com10 promise, or settle a claim authorized by this chapter. 

11 ‘‘§ 30912. Payment of judgment or settlement 

12 ‘‘(a) IN GENERAL.—The proper accounting officer of the United States 

13 Government shall pay a final judgment, arbitration award, or settlement 

14 under this chapter on presentation of an authenticated copy. 

15 ‘‘(b) SOURCE OF PAYMENT.—Payment shall be made from an appropria16 tion or fund available specifically for the purpose. If no appropriation or 

17 fund is specifically available, there is hereby appropriated, out of money in 

18 the Treasury not otherwise appropriated, an amount sufficient to pay the 

19 judgment, award, or settlement. 

20 ‘‘§ 30913. Exemption from arrest or seizure 

21 ‘‘The following are not subject to arrest or seizure by judicial process in 

22 the United States: 

23 ‘‘(1) A vessel owned by, possessed by, or operated by or for the 

24 United States Government or a federally-owned corporation. 

25 ‘‘(2) Cargo owned or possessed by the Government or a federally26 owned corporation. 

27 ‘‘§ 30914. Release of privately owned vessel after seizure 

28 ‘‘If a privately owned vessel not in the possession of the United States 

29 Government or a federally-owned corporation is arrested or attached in a 

30 civil action arising or alleged to have arisen from prior ownership, posses31 sion, or operation by the Government or corporation, the vessel shall be re32 leased without bond or stipulation on a statement by the Government, 

33 through the Attorney General or other authorized law officer, that the Gov34 ernment is interested in the action, desires release of the vessel, and as35 sumes liability for the satisfaction of any judgment obtained by the plaintiff. 

36 After the vessel is released, the action shall proceed against the Government 

37 in accordance with this chapter. 

38 ‘‘§ 30915. Seizures and other proceedings in foreign jurisdic39 tions 

40 ‘‘(a) IN GENERAL.—If a vessel or cargo described in section 30913 or 

41 30914 of this title is arrested, attached, or otherwise seized by judicial proc-
45

•HR 4319 IH 

1 ess in a foreign country, or if an action is brought in a court of a foreign 

2 country against the master of such a vessel for a claim arising from the 

3 ownership, possession, or operation of the vessel, or the ownership, posses4 sion, or carriage of such cargo, the Secretary of State, on request of the 

5 Attorney General or another officer authorized by the Attorney General, 

6 may direct the United States consul residing at or nearest the place at 

7 which the action was brought—

8 ‘‘(1) to claim the vessel or cargo as immune from arrest, attachment, 

9 or other seizure, and to execute an agreement, stipulation, bond, or un10 dertaking, for the United States Government or federally-owned cor11 poration, for the release of the vessel or cargo and the prosecution of 

12 any appeal; or 

13 ‘‘(2) if an action has been brought against the master of such a ves14 sel, to enter the appearance of the Government or corporation and to 

15 pledge the credit of the Government or corporation to the payment of 

16 any judgment and costs in the action. 

17 ‘‘(b) ARRANGING BOND OR STIPULATION.—The Attorney General may—

18 ‘‘(1) arrange with a bank, surety company, or other person, whether 

19 in the United States or a foreign country, to execute a bond or stipula20 tion; and 

21 ‘‘(2) pledge the credit of the Government to secure the bond or stipu22 lation. 

23 ‘‘(c) PAYMENT OF JUDGMENT.—The appropriate accounting officer of the 

24 Government or corporation may pay a judgment in an action described in 

25 subsection (a) on presentation of a copy of the judgment if certified by the 

26 clerk of the court and authenticated by—

27 ‘‘(1) the certificate and seal of the United States consul claiming the 

28 vessel or cargo, or by the consul’s successor; and 

29 ‘‘(2) the certificate of the Secretary as to the official capacity of the 

30 consul. 

31 ‘‘(d) RIGHT TO CLAIM IMMUNITY NOT AFFECTED.—This section does 

32 not affect the right of the Government to claim immunity of a vessel or 

33 cargo from foreign jurisdiction. 

34 ‘‘§ 30916. Recovery by United States Government for salvage 

35 services 

36 ‘‘(a) CIVIL ACTION.—The United States Government, and the crew of a 

37 merchant vessel owned or operated by the Government, or a federally-owned 

38 corporation, may bring a civil action to recover for salvage services provided 

39 by the vessel and crew. 

40 ‘‘(b) DEPOSIT OF AMOUNTS RECOVERED.—Any amount recovered under 

41 this section by the Government for its own benefit, and not for the benefit 
46

•HR 4319 IH 

1 of the crew, shall be deposited in the Treasury to the credit of the depart2 ment of the Government, or the corporation, having control of the posses3 sion or operation of the vessel. 

4 ‘‘§ 30917. Disposition of amounts recovered by United States 

5 Government 

6 ‘‘Amounts recovered in a civil action brought by the United States Gov7 ernment on a claim arising from the ownership, possession, or operation of 

8 a merchant vessel, or the ownership, possession, or carriage of cargo, shall 

9 be deposited in the Treasury to the credit of the department of the Govern10 ment, or the federally-owned corporation, having control of the vessel or 

11 cargo, for reimbursement of the appropriation, insurance fund, or other 

12 fund from which the compensation for which the judgment was recovered 

13 was or will be paid. 

14 ‘‘§ 30918. Reports 

15 ‘‘The Secretary of each department of the United States Government, 

16 and the board of trustees of each federally-owned corporation, shall report 

17 to Congress at each session thereof all arbitration awards and settlements 

18 agreed to under this chapter since the previous session, for which the time 

19 to appeal has expired or been waived.

20 ‘‘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.

21 ‘‘§ 31101. Short title 

22 ‘‘This chapter may be cited as the ‘Public Vessels Act’.

23 ‘‘§ 31102. Waiver of immunity 

24 ‘‘(a) IN GENERAL.—A civil action in personam in admiralty may be 

25 brought, or an impleader filed, against the United States Government for—

26 ‘‘(1) damages caused by a public vessel of the United States; or 

27 ‘‘(2) compensation for towage and salvage services, including con28 tract salvage, rendered to a public vessel of the United States. 

29 ‘‘(b) COUNTERCLAIM OR SETOFF.—If the Government brings a civil ac30 tion in admiralty for damages caused by a privately owned vessel, the owner 

31 of the vessel, or the successor in interest, may file a counterclaim in per-
47

•HR 4319 IH 

1 sonam, or claim a setoff, against the Government for damages arising out 

2 of the same subject matter. 

3 ‘‘§ 31103. Applicable procedure 

4 ‘‘A civil action under this chapter is subject to the provisions of chapter 

5 309 of this title except to the extent inconsistent with this chapter. 

6 ‘‘§ 31104. Venue 

7 ‘‘(a) IN GENERAL.—A civil action under this chapter shall be brought in 

8 the district court of the United States for the district in which the vessel 

9 or cargo is found within the United States. 

10 ‘‘(b) VESSEL OR CARGO OUTSIDE TERRITORIAL WATERS.—If the vessel 

11 or cargo is outside the territorial waters of the United States—

12 ‘‘(1) the action shall be brought in the district court of the United 

13 States for any district in which any plaintiff resides or has an office 

14 for the transaction of business; or 

15 ‘‘(2) if no plaintiff resides or has an office for the transaction of 

16 business in the United States, the action may be brought in the district 

17 court of the United States for any district. 

18 ‘‘§ 31105. Security when counterclaim filed 

19 ‘‘If a counterclaim is filed for a cause of action for which the original 

20 action is filed under this chapter, the respondent to the counterclaim shall 

21 give security in the usual amount and form to respond to the counterclaim, 

22 unless the court for cause shown orders otherwise. The proceedings in the 

23 original action shall be stayed until the security is given. 

24 ‘‘§ 31106. Exoneration and limitation 

25 ‘‘In a civil action under this chapter, the United States Government is 

26 entitled to the exemptions from and limitations of liability provided by law 

27 to an owner, charterer, operator, or agent of a vessel. 

28 ‘‘§ 31107. Interest 

29 ‘‘A judgment in a civil action under this chapter may not include interest 

30 for the period before the judgment is issued unless the claim is based on 

31 a contract providing for interest. 

32 ‘‘§ 31108. Arbitration, compromise, or settlement 

33 ‘‘The Attorney General may arbitrate, compromise, or settle a claim au34 thorized by this chapter if the claim actually has been filed. 

35 ‘‘§ 31109. Payment of judgment or settlement 

36 ‘‘The proper accounting officer of the United States shall pay a final 

37 judgment, arbitration award, or settlement under this chapter on presen38 tation of an authenticated copy. Payment shall be made from any money 

39 in the Treasury appropriated for the purpose. 
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1 ‘‘§ 31110. Subpoenas to officers or members of crew 

2 ‘‘An officer or member of the crew of a public vessel may not be subpoe3 naed in a civil action under this chapter without the consent of—

4 ‘‘(1) the Secretary of the department or the head of the independent 

5 establishment having control of the vessel at the time the cause of ac6 tion arose; or 

7 ‘‘(2) the master or commanding officer of the vessel at the time the 

8 subpoena is issued. 

9 ‘‘§ 31111. Claims by nationals of foreign countries 

10 ‘‘A national of a foreign country may not maintain a civil action under 

11 this chapter unless it appears to the satisfaction of the court in which the 

12 action is brought that the government of that country, in similar cir13 cumstances, allows nationals of the United States to sue in its courts. 

14 ‘‘§ 31112. Lien not recognized or created 

15 ‘‘This chapter may not be construed as recognizing or creating a lien 

16 against a public vessel of the United States. 

17 ‘‘§ 31113. Reports 

18 ‘‘The Attorney General shall report to Congress at each session thereof 

19 all claims settled under this chapter.’’.

20 SEC. 6. SUBTITLE IV OF TITLE 46. 

21 Title 46, United States Code, is amended by inserting after subtitle III 

22 the following:

23 ‘‘Subtitle IV—Regulation of Ocean Shipping 

24 ‘‘PART A—OCEAN SHIPPING

‘‘Chapter Sec. 

‘‘401. General .......................................................................................................... 40101

‘‘403. Agreements .................................................................................................. 40301

‘‘405. Tariffs, Service Contracts, Refunds, and Waivers ........................ 40501

‘‘407. Controlled Carriers .................................................................................. 40701

‘‘409. Ocean Transportation Intermediaries .............................................. 40901

‘‘411. Prohibitions and Penalties .................................................................... 41101

‘‘413. Enforcement ................................................................................................ 41301

25 ‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

‘‘421. Regulations Affecting Shipping in Foreign Trade ....................... 42101

‘‘423. Foreign Shipping Practices .................................................................. 42301

26 ‘‘PART C—MISCELLANEOUS

‘‘441. Evidence of Financial Responsibility for Passenger Transportation.44101

27 ‘‘PART A—OCEAN SHIPPING

28 ‘‘CHAPTER 401—GENERAL

‘‘Sec. 

‘‘40101. Purposes. 

‘‘40102. Definitions. 

‘‘40103. Administrative exemptions. 

‘‘40104. Reports filed with the Commission.
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•HR 4319 IH 

1 ‘‘§ 40101. Purposes 

2 ‘‘The purposes of this part are to—

3 ‘‘(1) establish a nondiscriminatory regulatory process for the com4 mon carriage of goods by water in the foreign commerce of the United 

5 States with a minimum of government intervention and regulatory 

6 costs; 

7 ‘‘(2) provide an efficient and economic transportation system in the 

8 ocean commerce of the United States that is, insofar as possible, in 

9 harmony with, and responsive to, international shipping practices; 

10 ‘‘(3) encourage the development of an economically sound and effi11 cient United States-flag liner fleet capable of meeting national security 

12 needs; and 

13 ‘‘(4) promote the growth and development of United States exports 

14 through competitive and efficient ocean transportation and by placing 

15 a greater reliance on the marketplace. 

16 ‘‘§ 40102. Definitions 

17 ‘‘In this part: 

18 ‘‘(1) AGREEMENT.—The term ‘agreement’—

19 ‘‘(A) means a written or oral understanding, arrangement, or 

20 association, and any modification or cancellation thereof; but 

21 ‘‘(B) does not include a maritime labor agreement. 

22 ‘‘(2) ANTITRUST LAWS.—The term ‘antitrust laws’ means—

23 ‘‘(A) the Sherman Act (15 U.S.C. 1 et seq.); 

24 ‘‘(B) sections 73 and 74 of the Wilson Tariff Act (15 U.S.C. 

25 8, 9); 

26 ‘‘(C) the Clayton Act (15 U.S.C. 12 et seq.); 

27 ‘‘(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a, 13b, 21a); 

28 ‘‘(E) the Federal Trade Commission Act (15 U.S.C. 41 et seq.); 

29 ‘‘(F) the Antitrust Civil Process Act (15 U.S.C. 1311 et seq.); 

30 and 

31 ‘‘(G) Acts supplementary to those Acts.

32 ‘‘(3) ASSESSMENT AGREEMENT.—The term ‘assessment agreement’ 

33 means an agreement, whether part of a collective bargaining agreement 

34 or negotiated separately, to the extent the agreement provides for the 

35 funding of collectively bargained fringe-benefit obligations on other 

36 than a uniform worker-hour basis, regardless of the cargo handled or 

37 type of vessel or equipment used. 

38 ‘‘(4) BULK CARGO.—The term ‘bulk cargo’ means cargo that is load39 ed and carried in bulk without mark or count. 

40 ‘‘(5) CHEMICAL PARCEL-TANKER.—The term ‘chemical parcel-tank41 er’ means a vessel that has—
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•HR 4319 IH 

1 ‘‘(A) a cargo-carrying capability consisting of individual cargo 

2 tanks for bulk chemicals that—

3 ‘‘(i) are a permanent part of the vessel; and 

4 ‘‘(ii) have segregation capability with piping systems to per5 mit simultaneous carriage of several bulk chemical cargoes 

6 with minimum risk of cross-contamination; and 

7 ‘‘(B) a valid certificate of fitness under the International Mari8 time Organization Code for the Construction and Equipment of 

9 Ships Carrying Dangerous Chemicals in Bulk. 

10 ‘‘(6) COMMON CARRIER.—The term ‘common carrier’—

11 ‘‘(A) means a person that—

12 ‘‘(i) holds itself out to the general public to provide trans13 portation by water of passengers or cargo between the United 

14 States and a foreign country for compensation; 

15 ‘‘(ii) assumes responsibility for the transportation from the 

16 port or point of receipt to the port or point of destination; 

17 and 

18 ‘‘(iii) uses, for all or part of that transportation, a vessel 

19 operating on the high seas or the Great Lakes between a port 

20 in the United States and a port in a foreign country; but 

21 ‘‘(B) does not include a carrier engaged in ocean transportation 

22 by ferry boat, ocean tramp, or chemical parcel-tanker, or by vessel 

23 when primarily engaged in the carriage of perishable agricultural 

24 commodities—

25 ‘‘(i) if the carrier and the owner of those commodities are 

26 wholly-owned, directly or indirectly, by a person primarily en27 gaged in the marketing and distribution of those commodities; 

28 and 

29 ‘‘(ii) only with respect to the carriage of those commodities. 

30 ‘‘(7) CONFERENCE.—The term ‘conference’—

31 ‘‘(A) means an association of ocean common carriers permitted, 

32 pursuant to an approved or effective agreement, to engage in con33 certed activity and to use a common tariff; but 

34 ‘‘(B) does not include a joint service, consortium, pooling, sail35 ing, or transshipment agreement. 

36 ‘‘(8) CONTROLLED CARRIER.—The term ‘controlled carrier’ means 

37 an ocean common carrier that is, or whose operating assets are, di38 rectly or indirectly, owned or controlled by a government, with owner39 ship or control by a government being deemed to exist for a carrier 

40 if—
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1 ‘‘(A) a majority of the interest in the carrier is owned or con2 trolled in any manner by that government, an agency of that gov3 ernment, or a public or private person controlled by that govern4 ment; or 

5 ‘‘(B) that government has the right to appoint or disapprove the 

6 appointment of a majority of the directors, the chief operating of7 ficer, or the chief executive officer of the carrier. 

8 ‘‘(9) DEFERRED REBATE.—The term ‘deferred rebate’ means a re9 turn by a common carrier of any freight money to a shipper, where 

10 the return is—

11 ‘‘(A) consideration for the shipper giving any portion of its ship12 ments to that or any other common carrier over a fixed period of 

13 time; 

14 ‘‘(B) deferred beyond the completion of the service for which it 

15 was paid; and 

16 ‘‘(C) made only if the shipper has agreed to make a further 

17 shipment with that or any other common carrier. 

18 ‘‘(10) FOREST PRODUCTS.—The term ‘forest products’ includes lum19 ber in bundles, rough timber, ties, poles, piling, laminated beams, bun20 dled siding, bundled plywood, bundled core stock or veneers, bundled 

21 particle or fiber boards, bundled hardwood, wood pulp in rolls, wood 

22 pulp in unitized bales, and paper and paper board in rolls or in pallet 

23 or skid-sized sheets. 

24 ‘‘(11) INLAND DIVISION.—The term ‘inland division’ means the 

25 amount paid by a common carrier to an inland carrier for the inland 

26 portion of through transportation offered to the public by the common 

27 carrier. 

28 ‘‘(12) INLAND PORTION.—The term ‘inland portion’ means the 

29 charge to the public by a common carrier for the non-ocean portion of 

30 through transportation. 

31 ‘‘(13) LOYALTY CONTRACT.—The term ‘loyalty contract’ means a 

32 contract with an ocean common carrier or agreement providing for—

33 ‘‘(A) a shipper to obtain lower rates by committing all or a fixed 

34 portion of its cargo to that carrier or agreement; and 

35 ‘‘(B) a deferred rebate arrangement. 

36 ‘‘(14) MARINE TERMINAL OPERATOR.—The term ‘marine terminal 

37 operator’ means a person engaged in the United States in the business 

38 of providing wharfage, dock, warehouse, or other terminal facilities in 

39 connection with a common carrier, or in connection with a common car40 rier and a water carrier subject to subchapter II of chapter 135 of title 

41 49. 
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1 ‘‘(15) MARITIME LABOR AGREEMENT.—The term ‘maritime labor 

2 agreement’—

3 ‘‘(A) means—

4 ‘‘(i) a collective bargaining agreement between an employer 

5 subject to this part, or a group of such employers, and a 

6 labor organization representing employees in the maritime or 

7 stevedoring industry; 

8 ‘‘(ii) an agreement preparatory to such a collective bar9 gaining agreement among members of a multi-employer bar10 gaining group; or 

11 ‘‘(iii) an agreement specifically implementing provisions of 

12 such a collective bargaining agreement or providing for the 

13 formation, financing, or administration of a multi-employer 

14 bargaining group; but 

15 ‘‘(B) does not include an assessment agreement. 

16 ‘‘(16) NON-VESSEL-OPERATING COMMON CARRIER.—The term ‘non17 vessel-operating common carrier’ means a common carrier that—

18 ‘‘(A) does not operate the vessels by which the ocean transpor19 tation is provided; and 

20 ‘‘(B) is a shipper in its relationship with an ocean common car21 rier. 

22 ‘‘(17) OCEAN COMMON CARRIER.—The term ‘ocean common carrier’ 

23 means a vessel-operating common carrier. 

24 ‘‘(18) OCEAN FREIGHT FORWARDER.—The term ‘ocean freight for25 warder’ means a person that—

26 ‘‘(A) in the United States, dispatches shipments from the 

27 United States via a common carrier and books or otherwise ar28 ranges space for those shipments on behalf of shippers; and 

29 ‘‘(B) processes the documentation or performs related activities 

30 incident to those shipments.

31 ‘‘(19) OCEAN TRANSPORTATION INTERMEDIARY.—The term ‘ocean 

32 transportation intermediary’ means an ocean freight forwarder or a 

33 non-vessel-operating common carrier. 

34 ‘‘(20) SERVICE CONTRACT.—The term ‘service contract’ means a 

35 written contract, other than a bill of lading or receipt, between one or 

36 more shippers, on the one hand, and an individual ocean common car37 rier or an agreement between or among ocean common carriers, on the 

38 other, in which—

39 ‘‘(A) the shipper or shippers commit to providing a certain vol40 ume or portion of cargo over a fixed time period; and 
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1 ‘‘(B) the ocean common carrier or the agreement commits to a 

2 certain rate or rate schedule and a defined service level, such as 

3 assured space, transit time, port rotation, or similar service fea4 tures. 

5 ‘‘(21) SHIPMENT.—The term ‘shipment’ means all of the cargo car6 ried under the terms of a single bill of lading. 

7 ‘‘(22) SHIPPER.—The term ‘shipper’ means—

8 ‘‘(A) a cargo owner; 

9 ‘‘(B) the person for whose account the ocean transportation of 

10 cargo is provided; 

11 ‘‘(C) the person to whom delivery is to be made; 

12 ‘‘(D) a shippers’ association; or 

13 ‘‘(E) a non-vessel-operating common carrier that accepts re14 sponsibility for payment of all charges applicable under the tariff 

15 or service contract. 

16 ‘‘(23) SHIPPERS’ ASSOCIATION.—The term ‘shippers’ association’ 

17 means a group of shippers that consolidates or distributes freight on 

18 a nonprofit basis for the members of the group to obtain carload, 

19 truckload, or other volume rates or service contracts. 

20 ‘‘(24) THROUGH RATE.—The term ‘through rate’ means the single 

21 amount charged by a common carrier in connection with through trans22 portation. 

23 ‘‘(25) THROUGH TRANSPORTATION.—The term ‘through transpor24 tation’ means continuous transportation between origin and destination 

25 for which a through rate is assessed and which is offered or performed 

26 by one or more carriers, at least one of which is a common carrier, 

27 between a United States port or point and a foreign port or point. 

28 ‘‘§ 40103. Administrative exemptions 

29 ‘‘(a) IN GENERAL.—The Federal Maritime Commission, on application or 

30 its own motion, may by order or regulation exempt for the future any class 

31 of agreements between persons subject to this part or any specified activity 

32 of those persons from any requirement of this part if the Commission finds 

33 that the exemption will not result in substantial reduction in competition 

34 or be detrimental to commerce. The Commission may attach conditions to 

35 an exemption and may, by order, revoke an exemption. 

36 ‘‘(b) OPPORTUNITY FOR HEARING.—An order or regulation of exemption 

37 or revocation of an exemption may be issued only if the Commission has 

38 provided an opportunity for a hearing to interested persons and depart39 ments and agencies of the United States Government. 
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1 ‘‘§ 40104. Reports filed with the Commission 

2 ‘‘(a) IN GENERAL.—The Federal Maritime Commission may require a 

3 common carrier or an officer, receiver, trustee, lessee, agent, or employee 

4 of the carrier to file with the Commission a periodical or special report, an 

5 account, record, rate, or charge, or a memorandum of facts and transactions 

6 related to the business of the carrier. The report, account, record, rate, 

7 charge, or memorandum shall be made under oath if the Commission re8 quires, and shall be filed in the form and within the time prescribed by the 

9 Commission. 

10 ‘‘(b) CONFERENCE MINUTES.—Conference minutes required to be filed 

11 with the Commission under this section may not be released to third parties 

12 or published by the Commission. 

13 ‘‘CHAPTER 403—AGREEMENTS

‘‘Sec. 

‘‘40301. Application. 

‘‘40302. Filing requirements. 

‘‘40303. Content requirements. 

‘‘40304. Commission action. 

‘‘40305. Assessment agreements. 

‘‘40306. Nondisclosure of information. 

‘‘40307. Exemption from antitrust laws.

14 ‘‘§ 40301. Application 

15 ‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—This part applies to an 

16 agreement between or among ocean common carriers to—

17 ‘‘(1) discuss, fix, or regulate transportation rates, including through 

18 rates, cargo space accommodations, and other conditions of service; 

19 ‘‘(2) pool or apportion traffic, revenues, earnings, or losses; 

20 ‘‘(3) allot ports or regulate the number and character of voyages be21 tween ports; 

22 ‘‘(4) regulate the volume or character of cargo or passenger traffic 

23 to be carried; 

24 ‘‘(5) engage in an exclusive, preferential, or cooperative working ar25 rangement between themselves or with a marine terminal operator; 

26 ‘‘(6) control, regulate, or prevent competition in international ocean 

27 transportation; or 

28 ‘‘(7) discuss and agree on any matter related to a service contract. 

29 ‘‘(b) MARINE TERMINAL OPERATOR AGREEMENTS.—This part applies to 

30 an agreement between or among marine terminal operators, or between or 

31 among one or more marine terminal operators and one or more ocean com32 mon carriers, to—

33 ‘‘(1) discuss, fix, or regulate rates or other conditions of service; or 

34 ‘‘(2) engage in exclusive, preferential, or cooperative working ar35 rangements, to the extent the agreement involves ocean transportation 

36 in the foreign commerce of the United States. 
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1 ‘‘(c) ACQUISITIONS.—This part does not apply to an acquisition by any 

2 person, directly or indirectly, of any voting security or assets of any other 

3 person. 

4 ‘‘(d) MARITIME LABOR AGREEMENTS.—This part does not apply to a 

5 maritime labor agreement. However, this subsection does not exempt from 

6 this part any rate, charge, regulation, or practice of a common carrier that 

7 is required to be set forth in a tariff or is an essential term of a service 

8 contract, whether or not the rate, charge, regulation, or practice arises out 

9 of, or is otherwise related to, a maritime labor agreement. 

10 ‘‘(e) ASSESSMENT AGREEMENTS.—This part (except sections 40305 and 

11 40307(a)) does not apply to an assessment agreement. 

12 ‘‘§ 40302. Filing requirements 

13 ‘‘(a) IN GENERAL.—A true copy of every agreement referred to in section 

14 40301(a) or (b) of this title shall be filed with the Federal Maritime Com15 mission. If the agreement is oral, a complete memorandum specifying in de16 tail the substance of the agreement shall be filed. 

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

18 ‘‘(1) an agreement related to transportation to be performed within 

19 or between foreign countries; or 

20 ‘‘(2) an agreement among common carriers to establish, operate, or 

21 maintain a marine terminal in the United States. 

22 ‘‘(c) REGULATIONS.—The Commission may by regulation prescribe the 

23 form and manner in which an agreement shall be filed and any additional 

24 information and documents necessary to evaluate the agreement. 

25 ‘‘§ 40303. Content requirements 

26 ‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—

27 ‘‘(1) RESTRICTIONS.—An ocean common carrier agreement may 

28 not—

29 ‘‘(A) prohibit or restrict a member of the agreement from en30 gaging in negotiations for a service contract with a shipper; 

31 ‘‘(B) require a member of the agreement to disclose a negotia32 tion on a service contract, or the terms of a service contract, other

33 than those terms required to be published under section 40502(d) 

34 of this title; or 

35 ‘‘(C) adopt mandatory rules or requirements affecting the right 

36 of an agreement member to negotiate and enter into a service con37 tract. 

38 ‘‘(2) VOLUNTARY GUIDELINES.—An ocean common carrier agree39 ment may provide authority to adopt voluntary guidelines relating to 

40 the terms and procedures of an agreement member’s service contracts 

41 if the guidelines explicitly state the right of members of the agreement 
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1 not to follow the guidelines. Any guidelines adopted shall be submitted 

2 confidentially to the Federal Maritime Commission. 

3 ‘‘(b) CONFERENCE AGREEMENTS.—Each conference agreement must—

4 ‘‘(1) state its purpose; 

5 ‘‘(2) provide reasonable and equal terms for admission and readmis6 sion to conference membership for any ocean common carrier willing 

7 to serve the particular trade or route; 

8 ‘‘(3) permit any member to withdraw from conference membership 

9 on reasonable notice without penalty; 

10 ‘‘(4) at the request of any member, require an independent neutral 

11 body to police fully the obligations of the conference and its members; 

12 ‘‘(5) prohibit the conference from engaging in conduct prohibited by 

13 section 41105(1) or (3) of this title; 

14 ‘‘(6) provide for a consultation process designed to promote—

15 ‘‘(A) commercial resolution of disputes; and 

16 ‘‘(B) cooperation with shippers in preventing and eliminating 

17 malpractices; 

18 ‘‘(7) establish procedures for promptly and fairly considering re19 quests and complaints of shippers; and 

20 ‘‘(8) provide that—

21 ‘‘(A) any member of the conference may take independent ac22 tion on a rate or service item on not more than 5 days’ notice to 

23 the conference; and 

24 ‘‘(B) except for an exempt commodity not published in the con25 ference tariff, the conference will include the new rate or service 

26 item in its tariff for use by that member, effective no later than 

27 5 days after receipt of the notice, and by any other member that 

28 notifies the conference that it elects to adopt the independent rate 

29 or service item on or after its effective date, in lieu of the existing 

30 conference tariff provision for that rate or service item. 

31 ‘‘(c) INTERCONFERENCE AGREEMENTS.—Each agreement between car32 riers not members of the same conference must provide the right of inde33 pendent action for each carrier. Each agreement between conferences must 

34 provide the right of independent action for each conference. 

35 ‘‘(d) VESSEL SHARING AGREEMENTS.—

36 ‘‘(1) IN GENERAL.—An ocean common carrier that is the owner, op37 erator, or bareboat, time, or slot charterer of a United States-flag liner 

38 vessel documented under section 12103 or 12111(c) of this title may 

39 agree with an ocean common carrier described in paragraph (2) to 

40 which it charters or subcharters the vessel or space on the vessel that 

41 the charterer or subcharterer may not use or make available space on 
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1 the vessel for the carriage of cargo reserved by law for United States2 flag vessels. 

3 ‘‘(2) CHARTERER DESCRIBED.—A charterer or subcharterer referred 

4 to in paragraph (1) is one that is not—

5 ‘‘(A) the owner of a United States-flag liner vessel eligible to 

6 be included in the Maritime Security Fleet Program and enrolled 

7 in an Emergency Preparedness Program under chapter 531 of this 

8 title; or 

9 ‘‘(B) the operator or bareboat charterer of such a vessel for a 

10 period of at least one year. 

11 ‘‘§ 40304. Commission action 

12 ‘‘(a) NOTICE OF FILING.—Within 7 days after an agreement is filed, the 

13 Federal Maritime Commission shall transmit a notice of the filing to the 

14 Federal Register for publication. 

15 ‘‘(b) PRELIMINARY REVIEW AND REJECTION.—After preliminary review, 

16 the Commission shall reject an agreement that it finds does not meet the 

17 requirements of sections 40302 and 40303 of this title. The Commission 

18 shall notify in writing the person filing the agreement of the reason for re19 jection. 

20 ‘‘(c) REVIEW AND EFFECTIVE DATE.—Unless rejected under subsection 

21 (b), an agreement (other than an assessment agreement) is effective—

22 ‘‘(1) on the 45th day after filing, or on the 30th day after notice 

23 of the filing is published in the Federal Register, whichever is later; 

24 or 

25 ‘‘(2) if additional information or documents are requested under sub26 section (d)—

27 ‘‘(A) on the 45th day after the Commission receives all the addi28 tional information and documents; or 

29 ‘‘(B) if the request is not fully complied with, on the 45th day 

30 after the Commission receives the information and documents sub31 mitted and a statement of the reasons for noncompliance with the 

32 request. 

33 ‘‘(d) REQUEST FOR ADDITIONAL INFORMATION.—Before the expiration of 

34 the period specified in subsection (c)(1), the Commission may request from 

35 the person filing the agreement any additional information and documents 

36 the Commission considers necessary to make the determinations required by 

37 this section. 

38 ‘‘(e) MODIFICATION OF REVIEW PERIOD.—

39 ‘‘(1) SHORTENING.—On request of the party filing an agreement, 

40 the Commission may shorten a period specified in subsection (c), but 
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1 not to a date that is less than 14 days after notice of the filing of the 

2 agreement is published in the Federal Register. 

3 ‘‘(2) EXTENSION.—The period specified in subsection (c)(2) may be 

4 extended only by the United States District Court for the District of 

5 Columbia in a civil action brought by the Commission under section 

6 41307(c) of this title. 

7 ‘‘(f) FIXED TERMS.—The Commission may not limit the effectiveness of 

8 an agreement to a fixed term. 

9 ‘‘§ 40305. Assessment agreements 

10 ‘‘(a) FILING REQUIREMENT.—An assessment agreement shall be filed 

11 with the Federal Maritime Commission and is effective on filing. 

12 ‘‘(b) COMPLAINTS.—If a complaint is filed with the Commission within 

13 2 years after the date of an assessment agreement, the Commission shall 

14 disapprove, cancel, or modify the agreement, or an assessment or charge 

15 pursuant to the agreement, that the Commission finds, after notice and op16 portunity for a hearing, to be unjustly discriminatory or unfair as between 

17 carriers, shippers, or ports. The Commission shall issue its final decision in 

18 the proceeding within one year after the date the complaint is filed. 

19 ‘‘(c) ADJUSTMENTS OF ASSESSMENTS AND CHARGES.—To the extent 

20 that the Commission finds under subsection (b) that an assessment or 

21 charge is unjustly discriminatory or unfair as between carriers, shippers, or 

22 ports, the Commission shall adjust the assessment or charge for the period 

23 between the filing of the complaint and the final decision by awarding pro24 spective credits or debits to future assessments and charges. However, if the 

25 complainant has ceased activities subject to the assessment or charge, the 

26 Commission may award reparations. 

27 ‘‘§ 40306. Nondisclosure of information 

28 ‘‘Information and documents (other than an agreement) filed with the 

29 Federal Maritime Commission under this chapter are exempt from disclo30 sure under section 552 of title 5 and may not be made public except as 

31 may be relevant to an administrative or judicial proceeding. This section 

32 does not prevent disclosure to either House of Congress or to a duly author33 ized committee or subcommittee of Congress.

34 ‘‘§ 40307. Exemption from antitrust laws 

35 ‘‘(a) IN GENERAL.—The antitrust laws do not apply to—

36 ‘‘(1) an agreement (including an assessment agreement) that has 

37 been filed and is effective under this chapter; 

38 ‘‘(2) an agreement that is exempt under section 40103 of this title 

39 from any requirement of this part; 
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1 ‘‘(3) an agreement or activity within the scope of this part, whether 

2 permitted under or prohibited by this part, undertaken or entered into 

3 with a reasonable basis to conclude that it is—

4 ‘‘(A) pursuant to an agreement on file with the Federal Mari5 time Commission and in effect when the activity takes place; or 

6 ‘‘(B) exempt under section 40103 of this title from any filing 

7 or publication requirement of this part; 

8 ‘‘(4) an agreement or activity relating to transportation services 

9 within or between foreign countries, whether or not via the United 

10 States, unless the agreement or activity has a direct, substantial, and 

11 reasonably foreseeable effect on the commerce of the United States; 

12 ‘‘(5) an agreement or activity relating to the foreign inland segment 

13 of through transportation that is part of transportation provided in a 

14 United States import or export trade; 

15 ‘‘(6) an agreement or activity to provide wharfage, dock, warehouse, 

16 or other terminal facilities outside the United States; or 

17 ‘‘(7) an agreement, modification, or cancellation approved before 

18 June 18, 1984, by the Commission under section 15 of the Shipping 

19 Act, 1916, or permitted under section 14b of that Act, and any prop20 erly published tariff, rate, fare, or charge, or classification, rule, or reg21 ulation explanatory thereof implementing that agreement, modification, 

22 or cancellation. 

23 ‘‘(b) EXCEPTIONS.—This part does not extend antitrust immunity to—

24 ‘‘(1) an agreement with or among air carriers, rail carriers, motor 

25 carriers, or common carriers by water not subject to this part relating 

26 to transportation within the United States; 

27 ‘‘(2) a discussion or agreement among common carriers subject to 

28 this part relating to the inland divisions (as opposed to the inland por29 tions) of through rates within the United States; 

30 ‘‘(3) an agreement among common carriers subject to this part to 

31 establish, operate, or maintain a marine terminal in the United States; 

32 or 

33 ‘‘(4) a loyalty contract. 

34 ‘‘(c) RETROACTIVE EFFECT OF DETERMINATIONS.—A determination by 

35 an agency or court that results in the denial or removal of the immunity 

36 to the antitrust laws under subsection (a) does not remove or alter the anti37 trust immunity for the period before the determination. 

38 ‘‘(d) RELIEF UNDER CLAYTON ACT.—A person may not recover damages 

39 under section 4 of the Clayton Act (15 U.S.C. 15), or obtain injunctive re40 lief under section 16 of that Act (15 U.S.C. 26), for conduct prohibited by 

41 this part. 
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1 ‘‘CHAPTER 405—TARIFFS, SERVICE CONTRACTS, 

2 REFUNDS, AND WAIVERS

‘‘Sec. 

‘‘40501. General rate and tariff requirements. 

‘‘40502. Service contracts. 

‘‘40503. Refunds and waivers.

3 ‘‘§ 40501. General rate and tariff requirements 

4 ‘‘(a) AUTOMATED TARIFF SYSTEM.—

5 ‘‘(1) IN GENERAL.—Each common carrier and conference shall keep 

6 open to public inspection in an automated tariff system, tariffs showing 

7 all its rates, charges, classifications, rules, and practices between all 

8 points or ports on its own route and on any through transportation 

9 route that has been established. However, a common carrier is not re10 quired to state separately or otherwise reveal in tariffs the inland divi11 sions of a through rate. 

12 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply with respect to 

13 bulk cargo, forest products, recycled metal scrap, new assembled motor 

14 vehicles, waste paper, or paper waste. 

15 ‘‘(b) CONTENTS OF TARIFFS.—A tariff under subsection (a) shall—

16 ‘‘(1) state the places between which cargo will be carried; 

17 ‘‘(2) list each classification of cargo in use; 

18 ‘‘(3) state the level of compensation of any ocean freight forwarder 

19 by a carrier or conference; 

20 ‘‘(4) state separately each terminal or other charge, privilege, or fa21 cility under the control of the carrier or conference and any rules that 

22 in any way change, affect, or determine any part or the total of the 

23 rates or charges; 

24 ‘‘(5) include sample copies of any bill of lading, contract of affreight25 ment, or other document evidencing the transportation agreement; and 

26 ‘‘(6) include copies of any loyalty contract, omitting the shipper’s 

27 name. 

28 ‘‘(c) ELECTRONIC ACCESS.—A tariff under subsection (a) shall be made 

29 available electronically to any person, without time, quantity, or other limi30 tation, through appropriate access from remote locations. A reasonable fee 

31 may be charged for such access, except that no fee may be charged for ac32 cess by a Federal agency. 

33 ‘‘(d) TIME-VOLUME RATES.—A rate contained in a tariff under sub34 section (a) may vary with the volume of cargo offered over a specified period 

35 of time. 

36 ‘‘(e) EFFECTIVE DATES.—

37 ‘‘(1) INCREASES.—A new or initial rate or change in an existing rate 

38 that results in an increased cost to a shipper may not become effective 
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1 earlier than 30 days after publication. However, for good cause, the 

2 Federal Maritime Commission may allow the rate to become effective 

3 sooner. 

4 ‘‘(2) DECREASES.—A change in an existing rate that results in a de5 creased cost to a shipper may become effective on publication. 

6 ‘‘(f) MARINE TERMINAL OPERATOR SCHEDULES.—A marine terminal op7 erator may make available to the public a schedule of rates, regulations, and 

8 practices, including limitations of liability for cargo loss or damage, per9 taining to receiving, delivering, handling, or storing property at its marine 

10 terminal. Any such schedule made available to the public is enforceable by 

11 an appropriate court as an implied contract without proof of actual knowl12 edge of its provisions. 

13 ‘‘(g) REGULATIONS.—

14 ‘‘(1) IN GENERAL.—The Commission shall by regulation prescribe 

15 the requirements for the accessibility and accuracy of automated tariff 

16 systems established under this section. The Commission, after periodic 

17 review, may prohibit the use of any automated tariff system that fails 

18 to meet the requirements established under this section. 

19 ‘‘(2) REMOTE TERMINALS.—The Commission may not require a 

20 common carrier to provide a remote terminal for electronic access 

21 under subsection (c). 

22 ‘‘(3) MARINE TERMINAL OPERATOR SCHEDULES.—The Commission 

23 shall by regulation prescribe the form and manner in which marine ter24 minal operator schedules authorized by this section shall be published. 

25 ‘‘§ 40502. Service contracts 

26 ‘‘(a) IN GENERAL.—An individual ocean common carrier or an agreement 

27 between or among ocean common carriers may enter into a service contract 

28 with one or more shippers subject to the requirements of this part. 

29 ‘‘(b) FILING REQUIREMENTS.—

30 ‘‘(1) IN GENERAL.—Each service contract entered into under this 

31 section by an individual ocean common carrier or an agreement shall 

32 be filed confidentially with the Federal Maritime Commission. 

33 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply to contracts re34 garding bulk cargo, forest products, recycled metal scrap, new assem35 bled motor vehicles, waste paper, or paper waste.

36 ‘‘(c) ESSENTIAL TERMS.—Each service contract shall include—

37 ‘‘(1) the origin and destination port ranges; 

38 ‘‘(2) the origin and destination geographic areas in the case of 

39 through intermodal movements; 

40 ‘‘(3) the commodities involved; 

41 ‘‘(4) the minimum volume or portion; 
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1 ‘‘(5) the line-haul rate; 

2 ‘‘(6) the duration; 

3 ‘‘(7) service commitments; and 

4 ‘‘(8) the liquidated damages for nonperformance, if any. 

5 ‘‘(d) PUBLICATION OF CERTAIN TERMS.—When a service contract is filed 

6 confidentially with the Commission, a concise statement of the essential 

7 terms specified in clauses (1), (3), (4), and (6) of subsection (c) shall be 

8 published and made available to the general public in tariff format. 

9 ‘‘(e) DISCLOSURE OF CERTAIN TERMS.—

10 ‘‘(1) DEFINITIONS.—In this subsection, the terms ‘dock area’ and 

11 ‘within the port area’ have the same meaning and scope as in the appli12 cable collective bargaining agreement between the requesting labor or13 ganization and the carrier. 

14 ‘‘(2) DISCLOSURE.—An ocean common carrier that is a party to or 

15 is otherwise subject to a collective bargaining agreement with a labor 

16 organization shall, in response to a written request by the labor organi17 zation, state whether it is responsible for the following work at a dock 

18 area or within a port area in the United States with respect to cargo 

19 transportation under a service contract: 

20 ‘‘(A) The movement of the shipper’s cargo on a dock area or 

21 within the port area or to or from railroad cars on a dock area 

22 or within the port area. 

23 ‘‘(B) The assignment of intraport carriage of the shipper’s 

24 cargo between areas on a dock or within the port area. 

25 ‘‘(C) The assignment of the carriage of the shipper’s cargo be26 tween a container yard on a dock area or within the port area and 

27 a rail yard adjacent to the container yard. 

28 ‘‘(D) The assignment of container freight station work and con29 tainer maintenance and repair work performed at a dock area or 

30 within the port area. 

31 ‘‘(3) WITHIN REASONABLE TIME.—The common carrier shall provide 

32 the information described in paragraph (2) to the requesting labor or33 ganization within a reasonable period of time. 

34 ‘‘(4) EXISTENCE OF COLLECTIVE BARGAINING AGREEMENT.—This 

35 subsection does not require the disclosure of information by an ocean 

36 common carrier unless there exists an applicable and otherwise lawful 

37 collective bargaining agreement pertaining to that carrier. A disclosure 

38 by an ocean common carrier may not be deemed an admission or an 

39 agreement that any work is covered by a collective bargaining agree40 ment. A dispute about whether any work is covered by a collective bar41 gaining agreement and the responsibility of an ocean common carrier 
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1 under a collective bargaining agreement shall be resolved solely in ac2 cordance with the dispute resolution procedures contained in the collec3 tive bargaining agreement and the National Labor Relations Act (15 

4 U.S.C. 151 et seq.), and without reference to this subsection. 

5 ‘‘(5) EFFECT UNDER OTHER LAWS.—This subsection does not affect 

6 the lawfulness or unlawfulness under this part or any other Federal or 

7 State law of any collective bargaining agreement or element thereof, in8 cluding any element that constitutes an essential term of a service con9 tract. 

10 ‘‘(f) REMEDY FOR BREACH.—Unless the parties agree otherwise, the ex11 clusive remedy for a breach of a service contract is an action in an appro12 priate court. The contract dispute resolution forum may not be controlled 

13 by or in any way affiliated with a controlled carrier or by the government 

14 that owns or controls the carrier. 

15 ‘‘§ 40503. Refunds and waivers 

16 ‘‘The Federal Maritime Commission, on application of a carrier or ship17 per, may permit a common carrier or conference to refund a portion of the 

18 freight charges collected from a shipper, or to waive collection of a portion 

19 of the charges from a shipper, if—

20 ‘‘(1) there is an error in a tariff, a failure to publish a new tariff, 

21 or an error in quoting a tariff, and the refund or waiver will not result 

22 in discrimination among shippers, ports, or carriers; 

23 ‘‘(2) the common carrier or conference, before filing an application 

24 for authority to refund or waive any charges for an error in a tariff 

25 or a failure to publish a tariff, has published a new tariff setting forth 

26 the rate on which the refund or waiver would be based; and 

27 ‘‘(3) the application for the refund or waiver is filed with the Com28 mission within 180 days from the date of shipment. 

29 ‘‘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.

30 ‘‘§ 40701. Rates 

31 ‘‘(a) IN GENERAL.—A controlled carrier may not—

32 ‘‘(1) maintain a rate or charge in a tariff or service contract, or 

33 charge or assess a rate, that is below a just and reasonable level; or 

34 ‘‘(2) establish, maintain, or enforce in a tariff or service contract a 

35 classification, rule, or regulation that results, or is likely to result, in 

36 the carriage or handling of cargo at a rate or charge that is below a 

37 just and reasonable level. 
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1 ‘‘(b) COMMISSION PROHIBITION.—The Federal Maritime Commission, at 

2 any time after notice and opportunity for a hearing, may prohibit the publi3 cation or use of a rate, charge, classification, rule, or regulation that a con4 trolled carrier has failed to demonstrate is just and reasonable. 

5 ‘‘(c) BURDEN OF PROOF.—In a proceeding under this section, the burden 

6 of proof is on the controlled carrier to demonstrate that its rate, charge, 

7 classification, rule, or regulation is just and reasonable. 

8 ‘‘(d) VOIDNESS.—A rate, charge, classification, rule, or regulation that 

9 has been suspended or prohibited by the Commission is void and its use is 

10 unlawful. 

11 ‘‘§ 40702. Rate standards 

12 ‘‘(a) DEFINITION.—In this section, the term ‘constructive costs’ means 

13 the costs of another carrier, other than a controlled carrier, operating simi14 lar vessels and equipment in the same or a similar trade. 

15 ‘‘(b) STANDARDS.—In determining whether a rate, charge, classification, 

16 rule, or regulation of a controlled carrier is just and reasonable, the Federal 

17 Maritime Commission—

18 ‘‘(1) shall take into account whether the rate or charge that has been 

19 published or assessed, or that would result from the pertinent classi20 fication, rule, or regulation, is below a level that is fully compensatory 

21 to the controlled carrier based on the carrier’s actual costs or construc22 tive costs; and 

23 ‘‘(2) may take into account other appropriate factors, including 

24 whether the rate, charge, classification, rule, or regulation is—

25 ‘‘(A) the same as, or similar to, those published or assessed by 

26 other carriers in the same trade; 

27 ‘‘(B) required to ensure movement of particular cargo in the 

28 same trade; or 

29 ‘‘(C) required to maintain acceptable continuity, level, or quality 

30 of common carrier service to or from affected ports. 

31 ‘‘§ 40703. Effective date of rates 

32 ‘‘Notwithstanding section 40501(e) of this title and except for service 

33 contracts, a rate, charge, classification, rule, or regulation of a controlled

34 carrier may not become effective, without special permission of the Federal 

35 Maritime Commission, until the 30th day after publication. 

36 ‘‘§ 40704. Commission review 

37 ‘‘(a) REQUEST FOR JUSTIFICATION.—On request of the Federal Maritime 

38 Commission, a controlled carrier shall file with the Commission, within 20 

39 days of the request, a statement of justification that sufficiently details the 

40 carrier’s need and purpose for an existing or proposed rate, charge, classi-
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1 fication, rule, or regulation and upon which the Commission may reasonably 

2 base a determination of its lawfulness. 

3 ‘‘(b) DETERMINATION.—Within 120 days after receipt of information re4 quested under subsection (a), the Commission shall determine whether the 

5 rate, charge, classification, rule, or regulation may be unjust and unreason6 able. 

7 ‘‘(c) SHOW CAUSE ORDER.—Whenever the Commission is of the opinion 

8 that a rate, charge, classification, rule, or regulation published or assessed 

9 by a controlled carrier may be unjust and unreasonable, the Commission 

10 shall issue an order to the controlled carrier to show cause why the rate, 

11 charge, classification, rule, or regulation should not be prohibited. 

12 ‘‘(d) SUSPENSION PENDING DETERMINATION.—

13 ‘‘(1) NOT YET EFFECTIVE.—Pending a determination of the lawful14 ness of a rate, charge, classification, rule, or regulation in a proceeding 

15 under subsection (c), the Commission may suspend the rate, charge, 

16 classification, rule, or regulation at any time before its effective date. 

17 ‘‘(2) ALREADY EFFECTIVE.—If a rate, charge, classification, rule, or 

18 regulation has already become effective, the Commission, on issuance 

19 of an order to show cause, may suspend the rate, charge, classification, 

20 rule, or regulation on at least 30 days’ notice to the controlled carrier. 

21 ‘‘(3) MAXIMUM SUSPENSION.—A period of suspension under this 

22 subsection may not exceed 180 days. 

23 ‘‘(e) REPLACEMENT DURING SUSPENSION.—Whenever the Commission 

24 has suspended a rate, charge, classification, rule, or regulation under this 

25 section, the controlled carrier may publish a new rate, charge, classification, 

26 rule, or regulation to take effect immediately during the suspension in lieu 

27 of the suspended rate, charge, classification, rule, or regulation. However, 

28 the Commission may reject the new rate, charge, classification, rule, or reg29 ulation if the Commission believes it is unjust and unreasonable. 

30 ‘‘§ 40705. Presidential review of Commission orders 

31 ‘‘(a) TRANSMISSION TO PRESIDENT.—The Federal Maritime Commission 

32 shall transmit to the President, concurrently with publication thereof, each 

33 order of suspension or final order of prohibition issued under section 40704 

34 of this title. 

35 ‘‘(b) PRESIDENTIAL REQUEST AND COMMISSION ACTION.—Within 10 

36 days after receipt or the effective date of a Commission order referred to 

37 in subsection (a), the President, in writing, may request the Commission to 

38 stay the effect of the order if the President finds that the stay is required 

39 for reasons of national defense or foreign policy. The reasons shall be speci40 fied in the request. The Commission shall immediately grant the request by 

41 issuing an order in which the President’s request shall be described. During 
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1 a stay, the President shall, whenever practicable, attempt to resolve the 

2 matter by negotiating with representatives of the applicable foreign govern3 ments. 

4 ‘‘§ 40706. Exceptions 

5 ‘‘This chapter does not apply to—

6 ‘‘(1) a controlled carrier of a foreign country whose vessels are enti7 tled by a treaty of the United States to receive national or most-fa8 vored-nation treatment; or 

9 ‘‘(2) a trade served only by controlled carriers. 

10 ‘‘CHAPTER 409—OCEAN TRANSPORTATION 

11 INTERMEDIARIES

‘‘Sec. 

‘‘40901. License requirement. 

‘‘40902. Financial responsibility. 

‘‘40903. Suspension or revocation of license. 

‘‘40904. Compensation by common carriers.

12 ‘‘§ 40901. License requirement 

13 ‘‘(a) IN GENERAL.—A person in the United States may not act as an 

14 ocean transportation intermediary unless the person holds an ocean trans15 portation intermediary’s license issued by the Federal Maritime Commis16 sion. The Commission shall issue a license to a person that the Commission 

17 determines to be qualified by experience and character to act as an ocean 

18 transportation intermediary. 

19 ‘‘(b) EXCEPTION.—A person whose primary business is the sale of mer20 chandise may forward shipments of the merchandise for its own account 

21 without an ocean transportation intermediary’s license. 

22 ‘‘§ 40902. Financial responsibility 

23 ‘‘(a) IN GENERAL.—A person may not act as an ocean transportation 

24 intermediary unless the person furnishes a bond, proof of insurance, or 

25 other surety—

26 ‘‘(1) in a form and amount determined by the Federal Maritime 

27 Commission to insure financial responsibility; and 

28 ‘‘(2) issued by a surety company found acceptable by the Secretary 

29 of the Treasury. 

30 ‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A bond, insurance, or 

31 other surety obtained under this section—

32 ‘‘(1) shall be available to pay any penalty assessed under section 

33 41109 of this title or any order for reparation issued under section 

34 41305 of this title; 

35 ‘‘(2) may be available to pay any claim against an ocean transpor36 tation intermediary arising from its transportation-related activities—

37 ‘‘(A) with the consent of the insured ocean transportation inter38 mediary and subject to review by the surety company; or 
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1 ‘‘(B) when the claim is deemed valid by the surety company 

2 after the ocean transportation intermediary has failed to respond 

3 to adequate notice to address the validity of the claim; and 

4 ‘‘(3) shall be available to pay any judgment for damages against an 

5 ocean transportation intermediary arising from its transportation-re6 lated activities, if the claimant has first attempted to resolve the claim 

7 under paragraph (2) and the claim has not been resolved within a rea8 sonable period of time. 

9 ‘‘(c) REGULATIONS ON COURT JUDGMENTS.—The Commission shall pre10 scribe regulations for the purpose of protecting the interests of claimants, 

11 ocean transportation intermediaries, and surety companies with respect to 

12 the process of pursuing claims against ocean transportation intermediary 

13 bonds, insurance, or sureties through court judgments. The regulations shall 

14 provide that a judgment for monetary damages may not be enforced except 

15 to the extent that the damages claimed arise from the transportation-related 

16 activities of the insured ocean transportation intermediary, as defined by the 

17 Commission. 

18 ‘‘(d) RESIDENT AGENT.—An ocean transportation intermediary not domi19 ciled in the United States shall designate a resident agent in the United 

20 States for receipt of service of judicial and administrative process, including 

21 subpoenas. 

22 ‘‘§ 40903. Suspension or revocation of license 

23 ‘‘(a) FAILURE TO MAINTAIN QUALIFICATIONS OR TO COMPLY.—The 

24 Federal Maritime Commission, after notice and opportunity for a hearing, 

25 shall suspend or revoke an ocean transportation intermediary’s license if the 

26 Commission finds that the ocean transportation intermediary—

27 ‘‘(1) is not qualified to provide intermediary services; or 

28 ‘‘(2) willfully failed to comply with a provision of this part or with 

29 an order or regulation of the Commission. 

30 ‘‘(b) FAILURE TO MAINTAIN BOND, PROOF OF INSURANCE, OR OTHER

31 SURETY.—The Commission may revoke an ocean transportation

32 intermediary’s license for failure to maintain a bond, proof of insurance, or 

33 other surety as required by section 40902(a) of this title. 

34 ‘‘§ 40904. Compensation by common carriers 

35 ‘‘(a) CERTIFICATION OF LICENSE AND SERVICES.—A common carrier 

36 may compensate an ocean freight forwarder for a shipment dispatched for 

37 others only when the ocean freight forwarder has certified in writing that 

38 it holds an ocean transportation intermediary’s license (if required under 

39 section 40901 of this title) and has—
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1 ‘‘(1) engaged, booked, secured, reserved, or contracted directly with 

2 the carrier or its agent for space aboard a vessel or confirmed the 

3 availability of the space; and 

4 ‘‘(2) prepared and processed the ocean bill of lading, dock receipt, 

5 or other similar document for the shipment. 

6 ‘‘(b) DUAL COMPENSATION.—A common carrier may not pay compensa7 tion for services described in subsection (a) more than once on the same 

8 shipment. 

9 ‘‘(c) BENEFICIAL INTEREST SHIPMENTS.—An ocean transportation inter10 mediary may not receive compensation from a common carrier for a ship11 ment in which the intermediary has a direct or indirect beneficial interest. 

12 A common carrier may not knowingly pay compensation on that shipment. 

13 ‘‘(d) LIMITS ON AUTHORITY OF CONFERENCE OR GROUP.—A conference 

14 or group of two or more ocean common carriers in the foreign commerce 

15 of the United States that is authorized to agree on the level of compensation 

16 paid to an ocean freight forwarder may not—

17 ‘‘(1) deny a member of the conference or group the right, upon no18 tice of not more than 5 days, to take independent action on any level 

19 of compensation paid to an ocean freight forwarder; or 

20 ‘‘(2) agree to limit the payment of compensation to an ocean freight 

21 forwarder to less than 1.25 percent of the aggregate of all rates and 

22 charges applicable under a tariff and assessed against the cargo on 

23 which the services of the ocean freight forwarder are provided. 

24 ‘‘CHAPTER 411—PROHIBITIONS AND PENALTIES

‘‘Sec. 

‘‘41101. Joint ventures and consortiums. 

‘‘41102. General prohibitions. 

‘‘41103. Disclosure of information. 

‘‘41104. Common carriers. 

‘‘41105. Concerted action. 

‘‘41106. Marine terminal operators. 

‘‘41107. Monetary penalties. 

‘‘41108. Additional penalties. 

‘‘41109. Assessment of penalties.

25 ‘‘§ 41101. Joint ventures and consortiums 

26 ‘‘In this chapter, a joint venture or consortium of two or more common 

27 carriers operating as a single entity is deemed to be a single common car28 rier. 

29 ‘‘§ 41102. General prohibitions 

30 ‘‘(a) OBTAINING TRANSPORTATION AT LESS THAN APPLICABLE

31 RATES.—A person may not knowingly and willfully, directly or indirectly, 

32 by means of false billing, false classification, false weighing, false report of 

33 weight, false measurement, or any other unjust or unfair device or means, 

34 obtain or attempt to obtain ocean transportation for property at less than 

35 the rates or charges that would otherwise apply. 
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1 ‘‘(b) OPERATING CONTRARY TO AGREEMENT.—A person may not operate 

2 under an agreement required to be filed under section 40302 or 40305 of 

3 this title if—

4 ‘‘(1) the agreement has not become effective under section 40304 of 

5 this title or has been rejected, disapproved, or canceled; or 

6 ‘‘(2) the operation is not in accordance with the terms of the agree7 ment or any modifications to the agreement made by the Federal Mari8 time Commission. 

9 ‘‘(c) PRACTICES IN HANDLING PROPERTY.—A common carrier, marine 

10 terminal operator, or ocean transportation intermediary may not fail to es11 tablish, observe, and enforce just and reasonable regulations and practices 

12 relating to or connected with receiving, handling, storing, or delivering prop13 erty. 

14 ‘‘§ 41103. Disclosure of information 

15 ‘‘(a) PROHIBITION.—A common carrier, marine terminal operator, or 

16 ocean freight forwarder, either alone or in conjunction with any other per17 son, directly or indirectly, may not knowingly disclose, offer, solicit, or re18 ceive any information concerning the nature, kind, quantity, destination, 

19 consignee, or routing of any property tendered or delivered to a common 

20 carrier, without the consent of the shipper or consignee, if the informa21 tion—

22 ‘‘(1) may be used to the detriment or prejudice of the shipper, the 

23 consignee, or any common carrier; or 

24 ‘‘(2) may improperly disclose its business transaction to a compet25 itor. 

26 ‘‘(b) EXCEPTIONS.—Subsection (a) does not prevent providing the infor27 mation—

28 ‘‘(1) in response to legal process; 

29 ‘‘(2) to the Federal Maritime Commission or an agency of the 

30 United States Government; or 

31 ‘‘(3) to an independent neutral body operating within the scope of 

32 its authority to fulfill the policing obligations of the parties to an agree33 ment effective under this part. 

34 ‘‘(c) DISCLOSURE FOR DETERMINING BREACH OR COMPILING STATIS35 TICS.—An ocean common carrier that is a party to a conference agreement 

36 approved under this part, a receiver, trustee, lessee, agent, or employee of 

37 the carrier, or any other person authorized by the carrier to receive informa38 tion— 

39 ‘‘(1) may give information to the conference or any person or agency 

40 designated by the conference, for the purpose of—
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1 ‘‘(A) determining whether a shipper or consignee has breached 

2 an agreement with the conference or its member lines; 

3 ‘‘(B) determining whether a member of the conference has 

4 breached the conference agreement; or 

5 ‘‘(C) compiling statistics of cargo movement; and 

6 ‘‘(2) may not prevent the conference or its designee from soliciting 

7 or receiving information for any of those purposes. 

8 ‘‘§ 41104. Common carriers 

9 ‘‘A common carrier, either alone or in conjunction with any other person, 

10 directly or indirectly, may not—

11 ‘‘(1) allow a person to obtain transportation for property at less than 

12 the rates or charges established by the carrier in its tariff or service 

13 contract by means of false billing, false classification, false weighing, 

14 false measurement, or any other unjust or unfair device or means; 

15 ‘‘(2) provide service in the liner trade that is—

16 ‘‘(A) not in accordance with the rates, charges, classifications, 

17 rules, and practices contained in a tariff published or a service 

18 contract entered into under chapter 405 of this title, unless ex19 cepted or exempted under section 40103 or 40501(a)(2) of this 

20 title; or 

21 ‘‘(B) under a tariff or service contract that has been suspended 

22 or prohibited by the Federal Maritime Commission under chapter 

23 407 or 423 of this title; 

24 ‘‘(3) retaliate against a shipper by refusing, or threatening to refuse, 

25 cargo space accommodations when available, or resort to other unfair 

26 or unjustly discriminatory methods because the shipper has patronized 

27 another carrier, or has filed a complaint, or for any other reason; 

28 ‘‘(4) for service pursuant to a tariff, engage in any unfair or unjustly 

29 discriminatory practice in the matter of—

30 ‘‘(A) rates or charges; 

31 ‘‘(B) cargo classifications;

32 ‘‘(C) cargo space accommodations or other facilities, with due 

33 regard being given to the proper loading of the vessel and the 

34 available tonnage; 

35 ‘‘(D) loading and landing of freight; or 

36 ‘‘(E) adjustment and settlement of claims; 

37 ‘‘(5) for service pursuant to a service contract, engage in any unfair 

38 or unjustly discriminatory practice in the matter of rates or charges 

39 with respect to any port; 
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1 ‘‘(6) use a vessel in a particular trade for the purpose of excluding, 

2 preventing, or reducing competition by driving another ocean common 

3 carrier out of that trade; 

4 ‘‘(7) offer or pay any deferred rebates; 

5 ‘‘(8) for service pursuant to a tariff, give any undue or unreasonable 

6 preference or advantage or impose any undue or unreasonable prejudice 

7 or disadvantage; 

8 ‘‘(9) for service pursuant to a service contract, give any undue or 

9 unreasonable preference or advantage or impose any undue or unrea10 sonable prejudice or disadvantage with respect to any port; 

11 ‘‘(10) unreasonably refuse to deal or negotiate; 

12 ‘‘(11) knowingly and willfully accept cargo from or transport cargo 

13 for the account of an ocean transportation intermediary that does not 

14 have a tariff as required by section 40501 of this title and a bond, in15 surance, or other surety as required by section 40902 of this title; or 

16 ‘‘(12) knowingly and willfully enter into a service contract with an 

17 ocean transportation intermediary that does not have a tariff as re18 quired by section 40501 of this title and a bond, insurance, or other 

19 surety as required by section 40902 of this title, or with an affiliate 

20 of such an ocean transportation intermediary. 

21 ‘‘§ 41105. Concerted action 

22 ‘‘A conference or group of two or more common carriers may not—

23 ‘‘(1) boycott or take any other concerted action resulting in an un24 reasonable refusal to deal; 

25 ‘‘(2) engage in conduct that unreasonably restricts the use of inter26 modal services or technological innovations; 

27 ‘‘(3) engage in any predatory practice designed to eliminate the par28 ticipation, or deny the entry, in a particular trade of a common carrier 

29 not a member of the conference, a group of common carriers, an ocean 

30 tramp, or a bulk carrier; 

31 ‘‘(4) negotiate with a non-ocean carrier or group of non-ocean car32 riers (such as truck, rail, or air operators) on any matter relating to 

33 rates or services provided to ocean common carriers within the United 

34 States by those non-ocean carriers, unless the negotiations and any re35 sulting agreements are not in violation of the antitrust laws and are 

36 consistent with the purposes of this part, except that this clause does 

37 not prohibit the setting and publishing of a joint through rate by a con38 ference, joint venture, or association of ocean common carriers; 

39 ‘‘(5) deny in the export foreign commerce of the United States com40 pensation to an ocean freight forwarder or limit that compensation to 

41 less than a reasonable amount; 
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1 ‘‘(6) allocate shippers among specific carriers that are parties to the 

2 agreement or prohibit a carrier that is a party to the agreement from 

3 soliciting cargo from a particular shipper, except as—

4 ‘‘(A) authorized by section 40303(d) of this title; 

5 ‘‘(B) required by the law of the United States or the importing 

6 or exporting country; or 

7 ‘‘(C) agreed to by a shipper in a service contract; 

8 ‘‘(7) for service pursuant to a service contract, engage in any un9 justly discriminatory practice in the matter of rates or charges with re10 spect to any locality, port, or person due to the person’s status as a 

11 shippers’ association or ocean transportation intermediary; or 

12 ‘‘(8) for service pursuant to a service contract, give any undue or 

13 unreasonable preference or advantage or impose any undue or unrea14 sonable prejudice or disadvantage with respect to any locality, port, or 

15 person due to the person’s status as a shippers’ association or ocean 

16 transportation intermediary. 

17 ‘‘§ 41106. Marine terminal operators 

18 ‘‘A marine terminal operator may not—

19 ‘‘(1) agree with another marine terminal operator or with a common 

20 carrier to boycott, or unreasonably discriminate in the provision of ter21 minal services to, a common carrier or ocean tramp; 

22 ‘‘(2) give any undue or unreasonable preference or advantage or im23 pose any undue or unreasonable prejudice or disadvantage with respect 

24 to any person; or 

25 ‘‘(3) unreasonably refuse to deal or negotiate. 

26 ‘‘§ 41107. Monetary penalties 

27 ‘‘(a) IN GENERAL.—A person that violates this part or a regulation or 

28 order of the Federal Maritime Commission issued under this part is liable 

29 to the United States Government for a civil penalty. Unless otherwise pro30 vided in this part, the amount of the penalty may not exceed $5,000 for 

31 each violation or, if the violation was willfully and knowingly committed, 

32 $25,000 for each violation. Each day of a continuing violation is a separate 

33 violation. 

34 ‘‘(b) LIEN ON CARRIER’S VESSELS.—The amount of a civil penalty im35 posed on a common carrier under this section constitutes a lien on the ves36 sels operated by the carrier. Any such vessel may be libeled therefore in the 

37 district court of the United States for the district in which it may be found. 

38 ‘‘§ 41108. Additional penalties 

39 ‘‘(a) SUSPENSION OF TARIFFS.—For a violation of section 41104(1), (2), 

40 or (7) of this title, the Federal Maritime Commission may suspend any or 

41 all tariffs of the common carrier, or that common carrier’s right to use any 
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1 or all tariffs of conferences of which it is a member, for a period not to 

2 exceed 12 months. 

3 ‘‘(b) OPERATING UNDER SUSPENDED TARIFF.—A common carrier that 

4 accepts or handles cargo for carriage under a tariff that has been sus5 pended, or after its right to use that tariff has been suspended, is liable 

6 to the United States Government for a civil penalty of not more than 

7 $50,000 for each shipment. 

8 ‘‘(c) FAILURE TO PROVIDE INFORMATION.—

9 ‘‘(1) PENALTIES.—If the Commission finds, after notice and oppor10 tunity for a hearing, that a common carrier has failed to supply infor11 mation ordered to be produced or compelled by subpoena under section 

12 41303 of this title, the Commission may—

13 ‘‘(A) suspend any or all tariffs of the carrier or the carrier’s 

14 right to use any or all tariffs of conferences of which it is a mem15 ber; and 

16 ‘‘(B) request the Secretary of Homeland Security to refuse or 

17 revoke any clearance required for a vessel operated by the carrier, 

18 and when so requested, the Secretary shall refuse or revoke the 

19 clearance. 

20 ‘‘(2) DEFENSE BASED ON FOREIGN LAW.—If, in defense of its fail21 ure to comply with a subpoena or discovery order, a common carrier 

22 alleges that information or documents located in a foreign country can23 not be produced because of the laws of that country, the Commission 

24 shall immediately notify the Secretary of State of the failure to comply 

25 and of the allegation relating to foreign laws. On receiving the notifica26 tion, the Secretary of State shall promptly consult with the government 

27 of the nation within which the information or documents are alleged 

28 to be located for the purpose of assisting the Commission in obtaining 

29 the information or documents. 

30 ‘‘(d) IMPAIRING ACCESS TO FOREIGN TRADE.—If the Commission finds, 

31 after notice and opportunity for a hearing, that the action of a common car32 rier, acting alone or in concert with another person, or a foreign government 

33 has unduly impaired access of a vessel documented under the laws of the

34 United States to ocean trade between foreign ports, the Commission shall 

35 take action that it finds appropriate, including imposing any of the penalties 

36 authorized by this section. The Commission also may take any of the actions 

37 authorized by sections 42304 and 42305 of this title. 

38 ‘‘(e) SUBMISSION OF ORDER TO PRESIDENT.—Before an order under this 

39 section becomes effective, it shall be submitted immediately to the President. 

40 The President, within 10 days after receiving it, may disapprove it if the 
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1 President finds that disapproval is required for reasons of national defense 

2 or foreign policy. 

3 ‘‘§ 41109. Assessment of penalties 

4 ‘‘(a) GENERAL AUTHORITY.—Until a matter is referred to the Attorney 

5 General, the Federal Maritime Commission may, after notice and oppor6 tunity for a hearing, assess a civil penalty provided for in this part. The 

7 Commission may compromise, modify, or remit, with or without conditions, 

8 a civil penalty. 

9 ‘‘(b) FACTORS IN DETERMINING AMOUNT.—In determining the amount 

10 of a civil penalty, the Commission shall take into account the nature, cir11 cumstances, extent, and gravity of the violation committed and, with respect 

12 to the violator, the degree of culpability, history of prior offenses, ability to 

13 pay, and other matters justice may require. 

14 ‘‘(c) EXCEPTION.—A civil penalty may not be imposed for conspiracy to 

15 violate section 41102(a) or 41104(1) or (2) of this title or to defraud the 

16 Commission by concealing such a violation. 

17 ‘‘(d) PROHIBITED BASIS OF PENALTY.—The Commission or a court may 

18 not order a person to pay the difference between the amount billed and 

19 agreed upon in writing with a common carrier or its agent and the amount 

20 set forth in a tariff or service contract by that common carrier for the 

21 transportation service provided. 

22 ‘‘(e) TIME LIMIT.—A proceeding to assess a civil penalty under this sec23 tion must be commenced within 5 years after the date of the violation. 

24 ‘‘(f) REVIEW OF CIVIL PENALTY.—A person against whom a civil penalty 

25 is assessed under this section may obtain review under chapter 158 of title 

26 28. 

27 ‘‘(g) CIVIL ACTIONS TO COLLECT.—If a person does not pay an assess28 ment of a civil penalty after it has become final or after the appropriate 

29 court has entered final judgment in favor of the Commission, the Attorney 

30 General at the request of the Commission may seek to collect the amount 

31 assessed in an appropriate district court of the United States. The court 

32 shall enforce the order of the Commission unless it finds that the order was 

33 not regularly made and duly issued. 

34 ‘‘CHAPTER 413—ENFORCEMENT

‘‘Sec. 

‘‘41301. Complaints. 

‘‘41302. Investigations. 

‘‘41303. Discovery and subpoenas. 

‘‘41304. Hearings and orders. 

‘‘41305. Award of reparations. 

‘‘41306. Injunctive relief sought by complainants. 

‘‘41307. Injunctive relief sought by the Commission. 

‘‘41308. Enforcement of subpoenas and orders. 

‘‘41309. Enforcement of reparation orders.
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1 ‘‘§ 41301. Complaints 

2 ‘‘(a) IN GENERAL.—A person may file with the Federal Maritime Com3 mission a sworn complaint alleging a violation of this part, except section 

4 41307(b)(1). If the complaint is filed within 3 years after the claim accrues, 

5 the complainant may seek reparations for an injury to the complainant 

6 caused by the violation. 

7 ‘‘(b) NOTICE AND RESPONSE.—The Commission shall provide a copy of 

8 the complaint to the person named in the complaint. Within a reasonable 

9 time specified by the Commission, the person shall satisfy the complaint or 

10 answer it in writing. 

11 ‘‘(c) IF COMPLAINT NOT SATISFIED.—If the complaint is not satisfied, 

12 the Commission shall investigate the complaint in an appropriate manner 

13 and make an appropriate order. 

14 ‘‘§ 41302. Investigations 

15 ‘‘(a) IN GENERAL.—The Federal Maritime Commission, on complaint or 

16 its own motion, may investigate any conduct or agreement that the Commis17 sion believes may be in violation of this part. The Commission may by order 

18 disapprove, cancel, or modify any agreement that operates in violation of 

19 this part. 

20 ‘‘(b) EFFECTIVENESS OF AGREEMENT DURING INVESTIGATION.—Unless 

21 an injunction is issued under section 41306 or 41307 of this title, an agree22 ment under investigation by the Commission remains in effect until the 

23 Commission issues its order. 

24 ‘‘(c) DATE FOR DECISION.—Within 10 days after the initiation of a pro25 ceeding under this section or section 41301 of this title, the Commission 

26 shall set a date by which it will issue its final decision. The Commission 

27 by order may extend the date for good cause. 

28 ‘‘(d) SANCTIONS FOR DELAY.—If, within the period for final decision 

29 under subsection (c), the Commission determines that it is unable to issue 

30 a final decision because of undue delay caused by a party to the proceeding, 

31 the Commission may impose sanctions, including issuing a decision adverse 

32 to the delaying party. 

33 ‘‘(e) REPORT.—The Commission shall make a written report of every in34 vestigation under this part in which a hearing was held, stating its conclu35 sions, decisions, findings of fact, and order. The Commission shall provide 

36 a copy of the report to all parties and publish the report for public informa37 tion. A published report is competent evidence in a court of the United 

38 States. 

39 ‘‘§ 41303. Discovery and subpoenas 

40 ‘‘(a) IN GENERAL.—In an investigation or adjudicatory proceeding under 

41 this part—
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1 ‘‘(1) the Federal Maritime Commission may subpoena witnesses and 

2 evidence; and 

3 ‘‘(2) a party may use depositions, written interrogatories, and dis4 covery procedures under regulations prescribed by the Commission 

5 that, to the extent practicable, shall conform to the Federal Rules of 

6 Civil Procedure (28 App. U.S.C.). 

7 ‘‘(b) WITNESS FEES.—Unless otherwise prohibited by law, a witness is 

8 entitled to the same fees and mileage as in the courts of the United States. 

9 ‘‘§ 41304. Hearings and orders 

10 ‘‘(a) OPPORTUNITY FOR HEARING.—The Federal Maritime Commission 

11 shall provide an opportunity for a hearing before issuing an order relating 

12 to a violation of this part or a regulation prescribed under this part. 

13 ‘‘(b) MODIFICATION OF ORDER.—The Commission may reverse, suspend, 

14 or modify any of its orders. 

15 ‘‘(c) REHEARING.—On application of a party to a proceeding, the Com16 mission may grant a rehearing of the same or any matter determined in 

17 the proceeding. Except by order of the Commission, a rehearing does not 

18 operate as a stay of an order. 

19 ‘‘(d) PERIOD OF EFFECTIVENESS.—An order of the Commission remains 

20 in effect for the period specified in the order or until suspended, modified, 

21 or set aside by the Commission or a court of competent jurisdiction. 

22 ‘‘§ 41305. Award of reparations 

23 ‘‘(a) DEFINITION.—In this section, the term ‘actual injury’ includes the 

24 loss of interest at commercial rates compounded from the date of injury. 

25 ‘‘(b) BASIC AMOUNT.—If the complaint was filed within the period speci26 fied in section 41301(a) of this title, the Federal Maritime Commission shall 

27 direct the payment of reparations to the complainant for actual injury 

28 caused by a violation of this part, plus reasonable attorney fees. 

29 ‘‘(c) ADDITIONAL AMOUNTS.—On a showing that the injury was caused 

30 by an activity prohibited by section 41102(b), 41104(3) or (6), or 41105(1) 

31 or (3) of this title, the Commission may order the payment of additional

32 amounts, but the total recovery of a complainant may not exceed twice the 

33 amount of the actual injury. 

34 ‘‘(d) DIFFERENCE BETWEEN RATES.—If the injury was caused by an ac35 tivity prohibited by section 41104(4)(A) or (B) of this title, the amount of 

36 the injury shall be the difference between the rate paid by the injured ship37 per and the most favorable rate paid by another shipper. 

38 ‘‘§ 41306. Injunctive relief sought by complainants 

39 ‘‘(a) IN GENERAL.—After filing a complaint with the Federal Maritime 

40 Commission under section 41301 of this title, the complainant may bring 
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1 a civil action in a district court of the United States to enjoin conduct in 

2 violation of this part. 

3 ‘‘(b) VENUE.—The action must be brought in the judicial district in 

4 which—

5 ‘‘(1) the Commission has brought a civil action against the defendant 

6 under section 41307(a) of this title; or 

7 ‘‘(2) the defendant resides or transacts business, if the Commission 

8 has not brought such an action. 

9 ‘‘(c) REMEDIES BY COURT.—After notice to the defendant, and a showing 

10 that the standards for granting injunctive relief by courts of equity are met, 

11 the court may grant a temporary restraining order or preliminary injunction 

12 for a period not to exceed 10 days after the Commission has issued an order 

13 disposing of the complaint. 

14 ‘‘(d) ATTORNEY FEES.—A defendant prevailing in a civil action under 

15 this section shall be allowed reasonable attorney fees to be assessed and col16 lected as part of the costs of the action. 

17 ‘‘§ 41307. Injunctive relief sought by the Commission 

18 ‘‘(a) GENERAL VIOLATIONS.—In connection with an investigation under 

19 section 41301 or 41302 of this title, the Federal Maritime Commission may 

20 bring a civil action to enjoin conduct in violation of this part. The action 

21 must be brought in the district court of the United States for any judicial 

22 district in which the defendant resides or transacts business. After notice 

23 to the defendant, and a showing that the standards for granting injunctive 

24 relief by courts of equity are met, the court may grant a temporary restrain25 ing order or preliminary injunction for a period not to exceed 10 days after 

26 the Commission has issued an order disposing of the issues under investiga27 tion. 

28 ‘‘(b) REDUCTION IN COMPETITION.—

29 ‘‘(1) ACTION BY COMMISSION.—If, at any time after the filing or ef30 fective date of an agreement under chapter 403 of this title, the Com31 mission determines that the agreement is likely, by a reduction in com32 petition, to produce an unreasonable reduction in transportation service 

33 or an unreasonable increase in transportation cost, the Commission, 

34 after notice to the person filing the agreement, may bring a civil action 

35 in the United States District Court for the District of Columbia to en36 join the operation of the agreement. The Commission’s sole remedy 

37 with respect to an agreement likely to have such an effect is an action 

38 under this subsection. 

39 ‘‘(2) REMEDIES BY COURT.—In an action under this subsection, the 

40 court may issue—
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1 ‘‘(A) a temporary restraining order or a preliminary injunction; 

2 and 

3 ‘‘(B) a permanent injunction after a showing that the agree4 ment is likely to have the effect described in paragraph (1). 

5 ‘‘(3) BURDEN OF PROOF AND THIRD PARTIES.—In an action under 

6 this subsection, the burden of proof is on the Commission. The court 

7 may not allow a third party to intervene. 

8 ‘‘(c) FAILURE TO PROVIDE INFORMATION.—If a person filing an agree9 ment, or an officer, director, partner, agent, or employee of the person, fails 

10 substantially to comply with a request for the submission of additional infor11 mation or documents within the period provided in section 40304(c) of this 

12 title, the Commission may bring a civil action in the United States District 

13 Court for the District of Columbia. At the request of the Commission, the 

14 Court—

15 ‘‘(1) may order compliance; 

16 ‘‘(2) shall extend the period specified in section 40304(c)(2) of this 

17 title until there has been substantial compliance; and 

18 ‘‘(3) may grant other equitable relief that the court decides is appro19 priate. 

20 ‘‘(d) REPRESENTATION.—The Commission may represent itself in a pro21 ceeding under this section in—

22 ‘‘(1) a district court of the United States, on notice to the Attorney 

23 General; and 

24 ‘‘(2) a court of appeals of the United States, with the approval of 

25 the Attorney General. 

26 ‘‘§ 41308. Enforcement of subpoenas and orders 

27 ‘‘(a) CIVIL ACTION.—If a person does not comply with a subpoena or 

28 order of the Federal Maritime Commission, the Attorney General, at the re29 quest of the Commission, or an injured party, may seek enforcement in a 

30 district court of the United States having jurisdiction over the parties. If, 

31 after hearing, the court determines that the subpoena or order was regularly 

32 made and duly issued, the court shall enforce the subpoena or order. 

33 ‘‘(b) TIME LIMIT ON BRINGING ACTIONS.—An action under this section 

34 to enforce an order of the Commission must be brought within 3 years after 

35 the date the order was violated. 

36 ‘‘§ 41309. Enforcement of reparation orders 

37 ‘‘(a) CIVIL ACTION.—If a person does not comply with an order of the 

38 Federal Maritime Commission for the payment of reparation, the person to 

39 whom the award was made may seek enforcement of the order in a district 

40 court of the United States having jurisdiction over the parties. 
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1 ‘‘(b) PARTIES AND SERVICE OF PROCESS.—All parties in whose favor the 

2 Commission has made an award of reparation by a single order may be 

3 joined as plaintiffs, and all other parties in the order may be joined as de4 fendants, in a single action in a judicial district in which any one plaintiff 

5 could maintain an action against any one defendant. Service of process 

6 against a defendant not found in that district may be made in a district 

7 in which any office of that defendant is located or in which any port of call 

8 on a regular route operated by that defendant is located. Judgment may 

9 be entered for any plaintiff against the defendant liable to that plaintiff. 

10 ‘‘(c) NATURE OF REVIEW.—In an action under this section, the findings 

11 and order of the Commission are prima facie evidence of the facts stated 

12 in the findings and order. 

13 ‘‘(d) COSTS AND ATTORNEY FEES.—The plaintiff is not liable for costs 

14 of the action or for costs of any subsequent stage of the proceedings unless 

15 they accrue on the plaintiff’s appeal. A prevailing plaintiff shall be allowed 

16 reasonable attorney fees to be assessed and collected as part of the costs 

17 of the action. 

18 ‘‘(e) TIME LIMIT ON BRINGING ACTIONS.—An action under this section 

19 to enforce an order of the Commission must be brought within 3 years after 

20 the date the order was violated. 

21 ‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES

22 ‘‘CHAPTER 421—REGULATIONS AFFECTING SHIPPING IN 

23 FOREIGN TRADE

‘‘Sec. 

‘‘42101. Regulations of the Commission. 

‘‘42102. Regulations of other agencies. 

‘‘42103. No preference to Government-owned vessels. 

‘‘42104. Information, witnesses, and evidence. 

‘‘42105. Disclosure to public. 

‘‘42106. Other actions to remedy unfavorable conditions. 

‘‘42107. Refusal of clearance and entry. 

‘‘42108. Penalty for operating under suspended tariff or service contract. 

‘‘42109. Consultation with other agencies.

24 ‘‘§ 42101. Regulations of the Commission 

25 ‘‘(a) UNFAVORABLE CONDITIONS.—To further the objectives and policy 

26 set forth in section 50101 of this title, the Federal Maritime Commission

27 shall prescribe regulations affecting shipping in foreign trade, not in conflict 

28 with law, to adjust or meet general or special conditions unfavorable to ship29 ping in foreign trade, whether in a particular trade or on a particular route 

30 or in commerce generally, including intermodal movements, terminal oper31 ations, cargo solicitation, agency services, ocean transportation intermediary 

32 services and operations, and other activities and services integral to trans33 portation systems, and which arise out of or result from laws or regulations 

34 of a foreign country or competitive methods, pricing practices, or practices 
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1 employed by owners, operators, agents, or masters of vessels of a foreign 

2 country. 

3 ‘‘(b) INITIATION OF REGULATION.—A regulation under subsection (a) 

4 may be initiated by the Commission on its own motion or on the petition 

5 of any person, including another component of the United States Govern6 ment. 

7 ‘‘§ 42102. Regulations of other agencies 

8 ‘‘(a) REQUEST TO AGENCY.—To further the objectives and policy set 

9 forth in section 50101 of this title, the Federal Maritime Commission shall 

10 request the head of a department, agency, or instrumentality of the United 

11 States Government to suspend, modify, or annul any existing regulations, 

12 or to make new regulations, affecting shipping in the foreign trade, except 

13 regulations relating to the Public Health Service, the Consular Service, or 

14 the inspection of vessels. 

15 ‘‘(b) PRIOR REVIEW AND APPROVAL.—A department, agency, or instru16 mentality of the Government may not prescribe a regulation affecting ship17 ping in the foreign trade (except a regulation affecting the Public Health 

18 Service, the Consular Service, or the inspection of vessels) until the regula19 tion has been submitted to the Commission for its approval and final action 

20 has been taken by the Commission or the President. 

21 ‘‘(c) SUBMISSION TO PRESIDENT.—If the head of a department, agency, 

22 or instrumentality of the Government refuses to comply with a request 

23 under subsection (a) or objects to a decision of the Commission under sub24 section (b), the Commission or the head of the department, agency, or in25 strumentality may submit the facts to the President. The President may es26 tablish, suspend, modify, or annul the regulation. 

27 ‘‘§ 42103. No preference to Government-owned vessels 

28 ‘‘A regulation may not give a vessel owned by the United States Govern29 ment a preference over a vessel owned by citizens of the United States and 

30 documented under the laws of the United States. 

31 ‘‘§ 42104. Information, witnesses, and evidence 

32 ‘‘(a) ORDER TO SUPPLY INFORMATION.—In carrying out section 42101 

33 of this title, the Federal Maritime Commission may order any person (in34 cluding a common carrier, tramp operator, bulk operator, shipper, shippers’ 

35 association, ocean transportation intermediary, or marine terminal operator, 

36 or an officer, receiver, trustee, lessee, agent, or employee thereof) to file 

37 with the Commission a report, answers to questions, documentary material, 

38 or other information the Commission considers necessary or appropriate. 

39 The Commission may require the response to any such order to be made 

40 under oath. The response shall be provided in the form and within the time 

41 specified by the Commission. 
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1 ‘‘(b) SUBPOENAS AND DISCOVERY.—In carrying out section 42101 of this 

2 title, the Commission may—

3 ‘‘(1) subpoena witnesses and evidence; and 

4 ‘‘(2) authorize a party to use depositions, written interrogatories, 

5 and discovery procedures that, to the extent practicable, conform to the 

6 Federal Rules of Civil Procedure (28 App. U.S.C.). 

7 ‘‘(c) WITNESS FEES.—Unless otherwise prohibited by law, and subject to 

8 funds being appropriated, a witness in a proceeding under section 42101 

9 of this title is entitled to the same fees and mileage as in the courts of the 

10 United States. 

11 ‘‘(d) PENALTIES.—For failure to supply information ordered to be pro12 duced or compelled by subpoena under this section, the Commission may—

13 ‘‘(1) after notice and opportunity for a hearing, suspend tariffs and 

14 service contracts of a common carrier or the common carrier’s right to 

15 use tariffs of conferences and service contracts of agreements of which 

16 it is a member; or 

17 ‘‘(2) assess a civil penalty of not more than $5,000 for each day that 

18 the information is not provided. 

19 ‘‘(e) ENFORCEMENT.—If a person does not comply with an order or sub20 poena of the Commission under this section, the Commission may seek en21 forcement in a district court of the United States having jurisdiction over 

22 the parties. If, after hearing, the court determines that the order or sub23 poena was regularly made and duly issued, the court shall enforce the order 

24 or subpoena. 

25 ‘‘§ 42105. Disclosure to public 

26 ‘‘Notwithstanding any other provision of law, the Federal Maritime Com27 mission may refuse to disclose to the public a response or other information 

28 submitted to it under this chapter. 

29 ‘‘§ 42106. Other actions to remedy unfavorable conditions 

30 ‘‘If the Federal Maritime Commission finds that conditions unfavorable 

31 to shipping in foreign trade as described in section 42101 of this title exist, 

32 the Commission may—

33 ‘‘(1) limit voyages to and from United States ports or the amount 

34 or type of cargo carried; 

35 ‘‘(2) suspend, in whole or in part, tariffs and service contracts for 

36 carriage to or from United States ports, including a common carrier’s 

37 right to use tariffs of conferences and service contracts of agreements 

38 in United States trades of which it is a member for any period the 

39 Commission specifies; 

40 ‘‘(3) suspend, in whole or in part, an ocean common carrier’s right 

41 to operate under any agreement filed with the Commission, including 
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1 any agreement authorizing preferential treatment at terminals, pref2 erential terminal leases, space chartering, or pooling of cargo or rev3 enue with other ocean common carriers; 

4 ‘‘(4) impose a fee not to exceed $1,000,000 per voyage; or 

5 ‘‘(5) take any other action the Commission finds necessary and ap6 propriate to adjust or meet any condition unfavorable to shipping in 

7 the foreign trade of the United States. 

8 ‘‘§ 42107. Refusal of clearance and entry 

9 ‘‘At the request of the Federal Maritime Commission—

10 ‘‘(1) the Secretary of Homeland Security shall—

11 ‘‘(A) refuse the clearance required by section 60105 of this title 

12 to a vessel of a country that is named in a regulation prescribed 

13 by the Commission under section 42101 of this title; and 

14 ‘‘(B) collect any fees imposed by the Commission under section 

15 42106(4) of this title; and 

16 ‘‘(2) the Secretary of the department in which the Coast Guard is 

17 operating shall—

18 ‘‘(A) deny entry, for purposes of oceanborne trade, of a vessel 

19 of a country that is named in a regulation prescribed by the Com20 mission under section 42101 of this title, to a port or place in the 

21 United States or the navigable waters of the United States; or 

22 ‘‘(B) detain the vessel at the port or place in the United States 

23 from which it is about to depart for another port or place in the 

24 United States. 

25 ‘‘§ 42108. Penalty for operating under suspended tariff or 

26 service contract 

27 ‘‘A common carrier that accepts or handles cargo for carriage under a 

28 tariff or service contract that has been suspended under section 42104(d)(1) 

29 or 42106(2) of this title, or after its right to use another tariff or service 

30 contract has been suspended under those provisions, is liable to the United 

31 States Government for a civil penalty of not more than $50,000 for each

32 day that it is found to be operating under a suspended tariff or service con33 tract. 

34 ‘‘§ 42109. Consultation with other agencies 

35 ‘‘The Federal Maritime Commission may consult with, seek the coopera36 tion of, or make recommendations to other appropriate agencies of the 

37 United States Government prior to taking any action under this chapter. 

38 ‘‘CHAPTER 423—FOREIGN SHIPPING PRACTICES

‘‘Sec. 

‘‘42301. Definitions. 

‘‘42302. Investigations. 

‘‘42303. Information requests. 

‘‘42304. Action against foreign carriers. 
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‘‘42305. Refusal of clearance and entry. 

‘‘42306. Submission of determinations to President. 

‘‘42307. Review of regulations and orders.

1 ‘‘§ 42301. Definitions 

2 ‘‘(a) DEFINED IN PART A.—In this chapter, the terms ‘common carrier’, 

3 ‘marine terminal operator’, ‘ocean common carrier’, ‘ocean transportation 

4 intermediary’, ‘shipper’, and ‘shippers’ association’ have the meaning given 

5 those terms in section 40102 of this title. 

6 ‘‘(b) OTHER DEFINITIONS.—In this chapter: 

7 ‘‘(1) FOREIGN CARRIER.—The term ‘foreign carrier’ means an ocean 

8 common carrier a majority of whose vessels are documented under the 

9 laws of a foreign country. 

10 ‘‘(2) MARITIME SERVICES.—The term ‘maritime services’ means 

11 port-to-port transportation of cargo by vessels operated by an ocean 

12 common carrier. 

13 ‘‘(3) MARITIME-RELATED SERVICES.—The term ‘maritime-related 

14 services’ means intermodal operations, terminal operations, cargo solici15 tation, agency services, ocean transportation intermediary services and 

16 operations, and all other activities and services integral to total trans17 portation systems of ocean common carriers and their foreign domiciled 

18 affiliates for themselves and others. 

19 ‘‘(4) UNITED STATES CARRIER.—The term ‘United States carrier’ 

20 means an ocean common carrier operating vessels documented under 

21 the laws of the United States. 

22 ‘‘(5) UNITED STATES OCEANBORNE TRADE.—The term ‘United 

23 States oceanborne trade’ means the carriage of cargo between the 

24 United States and a foreign country, whether directly or indirectly, by 

25 an ocean common carrier. 

26 ‘‘§ 42302. Investigations 

27 ‘‘(a) IN GENERAL.—The Federal Maritime Commission shall investigate 

28 whether any laws, rules, regulations, policies, or practices of a foreign gov29 ernment, or any practices of a foreign carrier or other person providing 

30 maritime or maritime-related services in a foreign country, result in the ex31 istence of conditions that—

32 ‘‘(1) adversely affect the operations of United States carriers in 

33 United States oceanborne trade; and 

34 ‘‘(2) do not exist for foreign carriers of that country in the United 

35 States under the laws of the United States or as a result of acts of 

36 United States carriers or other persons providing maritime or mari37 time-related services in the United States. 

38 ‘‘(b) INITIATION OF INVESTIGATION.—An investigation under subsection 

39 (a) may be initiated by the Commission on its own motion or on the petition 
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1 of any person, including another component of the United States Govern2 ment. 

3 ‘‘(c) TIME FOR DECISION.—The Commission shall complete an investiga4 tion under this section and render a decision within 120 days after it is ini5 tiated. However, the Commission may extend this 120-day period for an ad6 ditional 90 days if the Commission is unable to obtain sufficient information 

7 to determine whether a condition specified in subsection (a) exists. A notice 

8 providing an extension shall state clearly the reasons for the extension. 

9 ‘‘§ 42303. Information requests 

10 ‘‘(a) IN GENERAL.—To further the purposes of section 42302(a) of this 

11 title, the Federal Maritime Commission may order any person (including a 

12 common carrier, shipper, shippers’ association, ocean transportation inter13 mediary, or marine terminal operator, or an officer, receiver, trustee, lessee, 

14 agent or employee thereof) to file with the Commission any periodic or spe15 cial report, answers to questions, documentary material, or other informa16 tion the Commission considers necessary or appropriate. The Commission 

17 may require the response to any such order to be made under oath. The 

18 response shall be provided in the form and within the time specified by the 

19 Commission. 

20 ‘‘(b) SUBPOENAS.—In an investigation under section 42302 of this title, 

21 the Commission may subpoena witnesses and evidence. 

22 ‘‘(c) NONDISCLOSURE.—Notwithstanding any other provision of law, the 

23 Commission may determine that any information submitted to it in response 

24 to a request under this section, or otherwise, shall not be disclosed to the 

25 public. 

26 ‘‘§ 42304. Action against foreign carriers 

27 ‘‘(a) IN GENERAL.—Subject to section 42306 of this title, whenever the 

28 Federal Maritime Commission, after notice and opportunity for comment or 

29 hearing, determines that the conditions specified in section 42302(a) of this 

30 title exist, the Commission shall take such action to offset those conditions 

31 as it considers necessary and appropriate against any foreign carrier that 

32 is a contributing cause, or whose government is a contributing cause, to 

33 those conditions. The action may include—

34 ‘‘(1) limitations on voyages to and from United States ports or on 

35 the amount or type of cargo carried; 

36 ‘‘(2) suspension, in whole or in part, of any or all tariffs and service 

37 contracts, including an ocean common carrier’s right to use any or all 

38 tariffs and service contracts of conferences in United States trades of 

39 which it is a member for any period the Commission specifies; 

40 ‘‘(3) suspension, in whole or in part, of an ocean common carrier’s 

41 right to operate under any agreement filed with the Commission, in-
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1 cluding any agreement authorizing preferential treatment at terminals, 

2 preferential terminal leases, space chartering, or pooling of cargo or 

3 revenue with other ocean common carriers; and 

4 ‘‘(4) a fee not to exceed $1,000,000 per voyage. 

5 ‘‘(b) CONSULTATION.—The Commission may consult with, seek the co6 operation of, or make recommendations to other appropriate agencies of the 

7 United States Government prior to taking any action under subsection (a). 

8 ‘‘§ 42305. Refusal of clearance and entry 

9 ‘‘Subject to section 42306 of this title, whenever the Federal Maritime 

10 Commission determines that the conditions specified in section 42302(a) of 

11 this title exist, then at the request of the Commission—

12 ‘‘(1) the Secretary of Homeland Security shall refuse the clearance 

13 required by section 60105 of this title to a vessel of a foreign carrier 

14 that is identified by the Commission under section 42304 of this title; 

15 and 

16 ‘‘(2) the Secretary of the department in which the Coast Guard is 

17 operating shall—

18 ‘‘(A) deny entry, for purposes of oceanborne trade, of a vessel 

19 of a foreign carrier that is identified by the Commission under sec20 tion 42304 of this title, to a port or place in the United States 

21 or the navigable waters of the United States; or 

22 ‘‘(B) detain the vessel at the port or place in the United States 

23 from which it is about to depart for another port or place in the 

24 United States. 

25 ‘‘§ 42306. Submission of determinations to President 

26 ‘‘Before a determination under section 42304 of this title becomes effec27 tive or a request is made under section 42305 of this title, the determina28 tion shall be submitted immediately to the President. The President, within 

29 10 days after receiving it, may disapprove it in writing, setting forth the

30 reasons for the disapproval, if the President finds that disapproval is re31 quired for reasons of national defense or foreign policy. 

32 ‘‘§ 42307. Review of regulations and orders 

33 ‘‘A regulation or final order of the Federal Maritime Commission under 

34 this chapter is reviewable exclusively in the same forum and in the same 

35 manner as provided in section 2342(3)(B) of title 28. 

36 ‘‘PART C—MISCELLANEOUS

37 ‘‘CHAPTER 441—EVIDENCE OF FINANCIAL 

38 RESPONSIBILITY FOR PASSENGER TRANSPORTATION

‘‘Sec. 

‘‘44101. Application. 

‘‘44102. Financial responsibility to indemnify passengers for nonperformance of transportation. 

‘‘44103. Financial responsibility to pay liability for death or injury. 
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‘‘44104. Civil penalty. 

‘‘44105. Refusal of clearance. 

‘‘44106. Conduct of proceedings.

1 ‘‘§ 44101. Application 

2 ‘‘This chapter applies to a vessel that—

3 ‘‘(1) has berth or stateroom accommodations for at least 50 pas4 sengers; and 

5 ‘‘(2) boards passengers at a port in the United States. 

6 ‘‘§ 44102. Financial responsibility to indemnify passengers 

7 for nonperformance of transportation 

8 ‘‘(a) FILING REQUIREMENT.—A person in the United States may not ar9 range, offer, advertise, or provide transportation on a vessel to which this 

10 chapter applies unless the person has filed with the Federal Maritime Com11 mission evidence of financial responsibility to indemnify passengers for non12 performance of the transportation. 

13 ‘‘(b) SATISFACTORY EVIDENCE.—To satisfy subsection (a), a person must 

14 file—

15 ‘‘(1) information the Commission considers necessary; or 

16 ‘‘(2) a copy of a bond or other security, in such form as the Commis17 sion by regulation may require. 

18 ‘‘(c) AUTHORIZED ISSUER OF BOND.—If a bond is filed, it must be 

19 issued by a bonding company authorized to do business in the United 

20 States. 

21 ‘‘§ 44103. Financial responsibility to pay liability for death 

22 or injury 

23 ‘‘(a) GENERAL REQUIREMENT.—The owner or charterer of a vessel to 

24 which this chapter applies shall establish, under regulations prescribed by 

25 the Federal Maritime Commission, financial responsibility to meet liability 

26 for death or injury to passengers or other individuals on a voyage to or from 

27 a port in the United States. 

28 ‘‘(b) AMOUNTS.—

29 ‘‘(1) IN GENERAL.—The amount of financial responsibility required 

30 under subsection (a) shall be based on the number of passenger accom31 modations as follows: 

32 ‘‘(A) $20,000 for each of the first 500 passenger accommoda33 tions. 

34 ‘‘(B) $15,000 for each additional passenger accommodation be35 tween 501 and 1,000. 

36 ‘‘(C) $10,000 for each additional passenger accommodation be37 tween 1,001 and 1,500. 

38 ‘‘(D) $5,000 for each additional passenger accommodation over 

39 1,500. 
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1 ‘‘(2) MULTIPLE VESSELS.—If the owner or charterer is operating 

2 more than one vessel subject to this chapter, the amount of financial 

3 responsibility shall be based on the number of passenger accommoda4 tions on the vessel with the largest number of passenger accommoda5 tions. 

6 ‘‘(c) AVAILABILITY TO PAY JUDGMENT.—The amount determined under 

7 subsection (b) shall be available to pay a judgment for damages (whether 

8 less than or more than $20,000) for death or injury to a passenger or other 

9 individual on a voyage to or from a port in the United States. 

10 ‘‘(d) MEANS OF ESTABLISHING.—Financial responsibility under this sec11 tion may be established by one or more of the following if acceptable to the 

12 Commission: 

13 ‘‘(1) Insurance. 

14 ‘‘(2) Surety bond issued by a bonding company authorized to do 

15 business in the United States. 

16 ‘‘(3) Qualification as a self-insurer. 

17 ‘‘(4) Other evidence of financial responsibility. 

18 ‘‘§ 44104. Civil penalty 

19 ‘‘A person that violates section 44102 or 44103 of this title is liable to 

20 the United States Government for a civil penalty of not more than $5,000, 

21 plus $200 for each passage sold, to be assessed by the Federal Maritime 

22 Commission. The Commission may remit or mitigate the penalty on terms 

23 the Commission considers proper. 

24 ‘‘§ 44105. Refusal of clearance 

25 ‘‘The Secretary of Homeland Security shall refuse the clearance required 

26 by section 60105 of this title, at the port or place of departure from the 

27 United States, of a vessel that is subject to this chapter and does not have 

28 evidence issued by the Federal Maritime Commission of compliance with 

29 sections 44102 and 44103 of this title. 

30 ‘‘§ 44106. Conduct of proceedings 

31 ‘‘Part A of this subtitle applies to proceedings conducted by the Federal 

32 Maritime Commission under this chapter.’’.

33 SEC. 7. SUBTITLE V OF TITLE 46. 

34 (a) COORDINATION WITH MARITIME SECURITY ACT OF 2003.—

35 (1) IF THIS ACT EFFECTIVE FIRST.—If this Act is enacted before the 

36 amendment made by section 3531(a) of the Maritime Security Act of 

37 2003 (Public Law 108–136, 117 Stat. 1803) becomes effective, such 

38 section 3531(a) is amended by striking ‘‘inserting before subtitle VI the 

39 following new subtitle:’’ and all that follows through the subtitle anal40 ysis which is directed to be inserted by such section, and by sub41 stituting ‘‘inserting before chapter 533 the following new chapter:’’. 
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1 (2) IF THIS ACT EFFECTIVE SECOND.—If this Act is enacted after 

2 the amendment made by section 3531(a) of the Maritime Security Act 

3 of 2003 (Public Law 108–136, 117 Stat. 1803) becomes effective, title 

4 46, United States Code, is amended by striking the heading and anal5 ysis of subtitle V. 

6 (b) HEADING AND SUBTITLE ANALYSIS.—Title 46, United States Code, 

7 is amended by inserting after subtitle IV the following: 

8 ‘‘Subtitle V—Merchant Marine 

9 ‘‘PART A—GENERAL

‘‘Chapter Sec. 

‘‘501. Policy, Studies, and Reports ................................................................. 50101

‘‘503. Administrative ........................................................................................... 50301

‘‘505. Other General Provisions ...................................................................... 50501

10 ‘‘PART B—MERCHANT MARINE SERVICE

‘‘511. General .......................................................................................................... 51101

‘‘513. United States Merchant Marine Academy ...................................... 51301

‘‘515. State Maritime Academy Support Program ................................... 51501

‘‘517. Other Support for Merchant Marine Training .............................. 51701

‘‘519. Merchant Marine Awards ...................................................................... 51901

‘‘521. Miscellaneous ............................................................................................. 52101

11 ‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS

‘‘531. Maritime Security Fleet ......................................................................... 53101

‘‘533. Construction Reserve Funds ................................................................ 53301

‘‘535. Capital Construction Funds ................................................................. 53501

‘‘537. Loans and Guarantees ............................................................................ 53701

‘‘539. War Risk Insurance .................................................................................. 53901

12 ‘‘PART D—PROMOTIONAL PROGRAMS

‘‘551. Coastwise Trade ........................................................................................ 55101

‘‘553. Passenger and Cargo Preferences ...................................................... 55301

‘‘555. Miscellaneous ............................................................................................. 55501

13 ‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES

‘‘561. Restrictions on Transfers ...................................................................... 56101

‘‘563. Emergency Acquisition of Vessels ...................................................... 56301

‘‘565. Essential Vessels Affected by Neutrality Act ................................. 56501

14 ‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

‘‘571. General Authority ..................................................................................... 57101

‘‘573. Vessel Trade-In Program ....................................................................... 57301

‘‘575. Construction, Charter, and Sale of Vessels .................................... 57501

15 ‘‘PART G—RESTRICTIONS AND PENALTIES

‘‘581. Restrictions and Penalties .................................................................... 58101’’.

16 (c) CHAPTERS PRECEDING CHAPTER 531.—Subtitle V of title 46, United 

17 States Code, is amended by inserting after the subtitle analysis the fol18 lowing:

19 ‘‘PART A—GENERAL

20 ‘‘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. 
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‘‘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.

1 ‘‘§ 50101. Objectives and policy 

2 ‘‘(a) OBJECTIVES.—It is necessary for the national defense and the devel3 opment of the domestic and foreign commerce of the United States that the 

4 United States have a merchant marine—

5 ‘‘(1) sufficient to carry the waterborne domestic commerce and a 

6 substantial part of the waterborne export and import foreign commerce 

7 of the United States and to provide shipping service essential for main8 taining the flow of the waterborne domestic and foreign commerce at 

9 all times; 

10 ‘‘(2) capable of serving as a naval and military auxiliary in time of 

11 war or national emergency; 

12 ‘‘(3) owned and operated under United States flag by citizens of the 

13 United States insofar as practicable; 

14 ‘‘(4) composed of the best-equipped, safest, and most suitable types 

15 of vessels, built in the United States and manned with a trained and 

16 efficient citizen personnel; and 

17 ‘‘(5) supplemented by efficient facilities for building and repairing 

18 vessels. 

19 ‘‘(b) POLICY.—It is the policy of the United States Government to en20 courage and aid the development and maintenance of a merchant marine 

21 satisfying the objectives described in subsection (a).

22 ‘‘§ 50102. Survey of merchant marine 

23 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall survey the 

24 merchant marine of the United States to determine whether replacements 

25 and additions are required to carry out the objectives and policy of section 

26 50101 of this title. The Secretary shall study, perfect, and adopt a long27 range program for replacements and additions that will result, as soon as 

28 practicable, in—

29 ‘‘(1) an adequate and well-balanced merchant fleet, including vessels 

30 of all types, that will provide shipping service essential for maintaining 

31 the flow of foreign commerce by vessels designed to be readily and 

32 quickly convertible into transport and supply vessels in a time of na33 tional emergency; 

34 ‘‘(2) ownership and operation of the fleet by citizens of the United 

35 States insofar as practicable; 
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1 ‘‘(3) vessels designed to afford the best and most complete protection 

2 for passengers and crew against fire and all marine perils; and 

3 ‘‘(4) an efficient capacity for building and repairing vessels in the 

4 United States with an adequate number of skilled personnel to provide 

5 an adequate mobilization base. 

6 ‘‘(b) COOPERATION WITH SECRETARY OF NAVY.—In carrying out sub7 section (a)(1), the Secretary of Transportation shall cooperate closely with 

8 the Secretary of the Navy as to national defense requirements. 

9 ‘‘§ 50103. Determinations of essential services 

10 ‘‘(a) ESSENTIAL SERVICES, ROUTES, AND LINES.—

11 ‘‘(1) IN GENERAL.—The Secretary of Transportation shall inves12 tigate, determine, and keep current records of the ocean services, 

13 routes, and lines from ports in the United States, or in the territories 

14 and possessions of the United States, to foreign markets, which the 

15 Secretary determines to be essential for the promotion, development, 

16 expansion, and maintenance of the foreign commerce of the United 

17 States. In making such a determination, the Secretary shall consider 

18 and give due weight to—

19 ‘‘(A) the cost of maintaining each line; 

20 ‘‘(B) the probability that a line cannot be maintained except at 

21 a heavy loss disproportionate to the benefit to foreign trade; 

22 ‘‘(C) the number of voyages and types of vessels that should be 

23 employed in a line; 

24 ‘‘(D) the intangible benefit of maintaining a line to the foreign 

25 commerce of the United States, the national defense, and other 

26 national requirements; and 

27 ‘‘(E) any other facts and conditions a prudent business person 

28 would consider when dealing with the person’s own business. 

29 ‘‘(2) SAINT LAWRENCE SEAWAY.—For purposes of paragraph (1), 

30 the Secretary shall establish services, routes, and lines that reflect the 

31 seasonal closing of the Saint Lawrence Seaway and provide for alter32 nate routing of vessels through a different range of ports during that 

33 closing to maintain continuity of service on a year-round basis. 

34 ‘‘(b) BULK CARGO CARRYING SERVICES.—The Secretary shall inves35 tigate, determine, and keep current records of the bulk cargo carrying serv36 ices that should be provided by United States-flag vessels (whether or not 

37 operating on particular services, routes, or lines) for the promotion, develop38 ment, expansion, and maintenance of the foreign commerce of the United 

39 States and the national defense or other national requirements. 

40 ‘‘(c) TYPES OF VESSELS.—The Secretary shall investigate, determine, 

41 and keep current records of the type, size, speed, method of propulsion, and 
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1 other requirements of the vessels, including express-liner or super-liner ves2 sels, that should be employed in—

3 ‘‘(1) the services, routes, or lines described in subsection (a), and the 

4 frequency and regularity of the voyages of the vessels, with a view to 

5 furnishing adequate, regular, certain, and permanent service; and 

6 ‘‘(2) the bulk cargo carrying services described in subsection (b). 

7 ‘‘§ 50104. Studies of general maritime problems 

8 ‘‘The Secretary of Transportation shall study all maritime problems aris9 ing in carrying out the policy in section 50101 of this title. 

10 ‘‘§ 50105. Studies and cooperation relating to the construc11 tion of vessels 

12 ‘‘(a) RELATIVE COSTS AND NEW DESIGNS.—The Secretary of Transpor13 tation shall investigate, determine, and keep current records of—

14 ‘‘(1) the relative cost of construction of comparable vessels in the 

15 United States and in foreign countries; and 

16 ‘‘(2) new designs, new methods of construction, and new types of 

17 equipment for vessels. 

18 ‘‘(b) RULES, CLASSIFICATIONS, AND RATINGS.—The Secretary shall ex19 amine the rules under which vessels are constructed abroad and in the 

20 United States and the methods of classifying and rating the vessels. 

21 ‘‘(c) COLLABORATION WITH OWNERS AND BUILDERS.—The Secretary 

22 shall collaborate with vessel owners and shipbuilders in developing plans for 

23 the economical construction of vessels and their propelling machinery, of 

24 most modern economical types, giving thorough consideration to all well-rec25 ognized means of propulsion and taking into account the benefits from 

26 standardized production where practicable and desirable. 

27 ‘‘(d) EXPRESS-LINER AND SUPER-LINER VESSELS.—The Secretary shall 

28 study and cooperate with vessel owners in devising means by which there 

29 may be constructed, by or with the aid of the United States Government, 

30 express-liner or super-liner vessels comparable to those of other nations, es31 pecially with a view to their use in a national emergency, and the use of 

32 transoceanic aircraft service in connection with or in lieu of those vessels. 

33 ‘‘§ 50106. Studies on the operation of vessels 

34 ‘‘(a) RELATIVE COSTS.—The Secretary of Transportation shall inves35 tigate, determine, and keep current records of the relative cost of marine 

36 insurance, maintenance, repairs, wages and subsistence of officers and 

37 crews, and all other items of expense, in the operation of comparable vessels 

38 under the laws and regulations of the United States and those of the foreign 

39 countries whose vessels are substantial competitors of American vessels. 
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1 ‘‘(b) SHIPYARDS.—The Secretary shall investigate, determine, and keep 

2 current records of the number, location, and efficiency of shipyards in the 

3 United States. 

4 ‘‘(c) NAVIGATION LAWS.—The Secretary shall examine the navigation 

5 laws and regulations of the United States and make such recommendations 

6 to Congress as the Secretary considers proper for the amendment, improve7 ment, and revision of those laws and for the development of the merchant 

8 marine of the United States. 

9 ‘‘§ 50107. Studies on marine insurance 

10 ‘‘The Secretary of Transportation shall—

11 ‘‘(1) examine into the subject of marine insurance, the number of 

12 companies in the United States, domestic and foreign, engaging in ma13 rine insurance, the extent of the insurance on hulls and cargoes placed 

14 or written in the United States, and the extent of reinsurance of Amer15 ican maritime risks in foreign companies; and 

16 ‘‘(2) ascertain what steps may be necessary to develop an ample ma17 rine insurance system as an aid in the development of the merchant 

18 marine of the United States. 

19 ‘‘§ 50108. Studies on cargo carriage and cargo containers 

20 ‘‘(a) STUDIES.—The Secretary of Transportation shall study—

21 ‘‘(1) the methods of encouraging the development and implementa22 tion of new concepts for the carriage of cargo in the domestic and for23 eign commerce of the United States; and 

24 ‘‘(2) the economic and technological aspects of the use of cargo con25 tainers as a method of carrying out the policy in section 50101 of this 

26 title. 

27 ‘‘(b) RESTRICTION.—In carrying out subsection (a) and the policy in sec28 tion 50101 of this title, the United States Government may not give pref29 erence as between carriers based on the length, height, or width of cargo 

30 containers or the length, height, or width of cargo container cells. This re31 striction applies to all existing container vessels and any container vessel to 

32 be constructed or rebuilt. 

33 ‘‘§ 50109. Miscellaneous studies 

34 ‘‘(a) FOREIGN SUBSIDIES.—The Secretary of Transportation shall inves35 tigate, determine, and keep current records of the extent and character of 

36 the governmental aid and subsidies granted by foreign governments to their 

37 merchant marine. 

38 ‘‘(b) LAWS APPLICABLE TO AIRCRAFT.—The Secretary shall investigate, 

39 determine, and keep current records of the provisions of law relating to 

40 shipping that should be made applicable to aircraft engaged in foreign com-
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1 merce to further the policy in section 50101 of this title, and any appro2 priate legislation in this regard. 

3 ‘‘(c) AID FOR COTTON, COAL, LUMBER, AND CEMENT.—The Secretary 

4 shall investigate, determine, and keep current records of the advisability of 

5 enactment of suitable legislation authorizing the Secretary, in an economic 

6 or commercial emergency, to aid farmers and producers of cotton, coal, lum7 ber, and cement in any section of the United States in the transportation 

8 and landing of their products in any foreign port, which products can be 

9 carried in dry-cargo vessels by reducing rates, by supplying additional ton10 nage to any American operator, or by operation of vessels directly by the 

11 Secretary, until the Secretary considers the special rate reduction and oper12 ation unnecessary for the benefit of those farmers and producers. 

13 ‘‘(d) INTERCOASTAL AND INLAND WATER TRANSPORTATION.—The Sec14 retary shall investigate, determine, and keep current records of intercoastal 

15 and inland water transportation, including their relation to transportation 

16 by land and air. 

17 ‘‘(e) OBSOLETE TONNAGE AND TRAMP SERVICE.—The Secretary shall 

18 make studies and reports to Congress on—

19 ‘‘(1) the scrapping or removal from service of old or obsolete mer20 chant tonnage owned by the United States Government or in use in 

21 the merchant marine; and 

22 ‘‘(2) tramp shipping service and the advisability of citizens of the 

23 United States participating in that service with vessels under United 

24 States registry. 

25 ‘‘(f) MORTGAGE LOANS.—The Secretary shall investigate the legal status 

26 of mortgage loans on vessel property, with a view to the means of improving 

27 the security of those loans and of encouraging investment in American ship28 ping. 

29 ‘‘§ 50110. Securing preference to vessels of the United States 

30 ‘‘(a) POSSIBILITIES OF PROMOTING CARRIAGE.—The Secretary of Trans31 portation shall investigate, determine, and keep current records of the possi32 bilities of promoting the carriage of United States foreign trade in vessels 

33 of the United States. 

34 ‘‘(b) INDUCEMENTS TO IMPORTERS AND EXPORTERS.—The Secretary 

35 shall study and cooperate with vessel owners in devising means by which 

36 the importers and exporters of the United States can be induced to give 

37 preference to vessels of the United States. 

38 ‘‘(c) LIAISON WITH AGENCIES AND ORGANIZATIONS.—The Secretary 

39 shall establish and maintain liaison with such other agencies of the United 

40 States Government, and with such representative trade organizations 

41 throughout the United States, as may be concerned, directly or indirectly, 
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1 with any movement of commodities in the waterborne export and import for2 eign commerce of the United States, for the purpose of securing preference 

3 to vessels of the United States in the shipment of those commodities. 

4 ‘‘§ 50111. Reports to Congress 

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

6 of Transportation shall submit a report to Congress. The report shall in7 clude, with respect to activities of the Secretary under this subtitle, the re8 sults of investigations, a summary of transactions, a statement of all ex9 penditures and receipts, the purposes for which all expenditures were made, 

10 and any recommendations for legislation. 

11 ‘‘(b) ADMINISTERED AND OVERSIGHT FUNDS.—The Secretary, in the re12 port under subsection (a) and in the annual budget estimate for the Mari13 time Administration submitted to Congress, shall state separately the 

14 amount, source, intended use, and nature of any funds (other than funds 

15 appropriated to the Administration or to the Secretary of Transportation 

16 for use by the Administration) administered, or subject to oversight, by the 

17 Administration. 

18 ‘‘(c) ADDITIONAL RECOMMENDATIONS FOR LEGISLATION.—The Sec19 retary, from time to time, shall make recommendations to Congress for leg20 islation the Secretary considers necessary to better achieve the objectives 

21 and policy of section 50101 of this title. 

22 ‘‘§ 50112. National Maritime Enhancement Institutes 

23 ‘‘(a) DESIGNATION.—The Secretary of Transportation may designate Na24 tional Maritime Enhancement Institutes. 

25 ‘‘(b) ACTIVITIES.—Activities undertaken by an institute may include—

26 ‘‘(1) conducting research about methods to improve the performance 

27 of maritime industries; 

28 ‘‘(2) enhancing the competitiveness of domestic maritime industries 

29 in international trade; 

30 ‘‘(3) forecasting trends in maritime trade; 

31 ‘‘(4) assessing technological advancements; 

32 ‘‘(5) developing management initiatives and training; 

33 ‘‘(6) analyzing economic and operational impacts of regulatory poli34 cies and international negotiations or agreements pending before inter35 national bodies; 

36 ‘‘(7) assessing the compatibility of domestic maritime infrastructure 

37 systems with overseas transport systems; 

38 ‘‘(8) fostering innovations in maritime transportation pricing; and 

39 ‘‘(9) improving maritime economics and finance. 
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1 ‘‘(c) APPLICATION FOR DESIGNATION.—An institution seeking designa2 tion as a National Maritime Enhancement Institute shall submit an applica3 tion under regulations prescribed by the Secretary. 

4 ‘‘(d) CRITERIA FOR DESIGNATION.—The Secretary shall designate an in5 stitute under this section on the basis of the following criteria: 

6 ‘‘(1) The demonstrated research and extension resources available to 

7 the applicant for carrying out the activities specified in subsection (b). 

8 ‘‘(2) The ability of the applicant to provide leadership in making na9 tional and regional contributions to the solution of both long-range and 

10 immediate problems of the domestic maritime industry. 

11 ‘‘(3) The existence of an established program of the applicant encom12 passing research and training directed to enhancing maritime indus13 tries. 

14 ‘‘(4) The demonstrated ability of the applicant to assemble and 

15 evaluate pertinent information from national and international sources 

16 and to disseminate results of maritime industry research and edu17 cational programs through a continuing education program. 

18 ‘‘(5) The qualification of the applicant as a nonprofit institution of 

19 higher learning. 

20 ‘‘(e) FINANCIAL AWARDS.—The Secretary may make awards on an equal 

21 matching basis to an institute designated under subsection (a) from 

22 amounts appropriated. The aggregate annual amount of the Federal share 

23 of the awards by the Secretary may not exceed $500,000. 

24 ‘‘(f) UNIVERSITY TRANSPORTATION RESEARCH FUNDS.—The Secretary 

25 may make a grant under section 5505 of title 49 to an institute designated 

26 under subsection (a) for maritime and maritime intermodal research under 

27 that section as if the institute were a university transportation center. In 

28 making a grant, the Secretary, through the Research and Special Programs 

29 Administration, shall advise the Maritime Administration on the availability

30 of funds for the grants and consult with the Administration on making the 

31 grants. 

32 ‘‘§ 50113. Use and performance reports by operators of ves33 sels 

34 ‘‘(a) FILING REQUIREMENT.—The Secretary of Transportation by regula35 tion may require the operator of a vessel in the waterborne foreign com36 merce of the United States to file such report, account, record, or memo37 randum on the use and performance of the vessel as the Secretary considers 

38 desirable to assist in carrying out this subtitle. The report, account, record, 

39 or memorandum shall be signed and verified, and be filed at the times and 

40 in the manner, as provided by regulation. 
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1 ‘‘(b) CIVIL PENALTY.—An operator not filing a report, account, record, 

2 or memorandum required by the Secretary under this section is liable to the 

3 United States Government for a civil penalty of $50 for each day of the 

4 violation. A penalty imposed under this section on the operator of a vessel 

5 constitutes a lien on the vessel involved in the violation, and the vessel may 

6 be libeled therefore in the district court of the United States for the district 

7 in which it may be found. The Secretary may remit or mitigate any penalty 

8 imposed under this section.

9 ‘‘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.

10 ‘‘§ 50301. Vessel Operations Revolving Fund 

11 ‘‘(a) IN GENERAL.—There is a ‘Vessel Operations Revolving Fund’ for 

12 use by the Secretary of Transportation in carrying out duties and powers 

13 related to vessel operations, including charter, operation, maintenance, re14 pair, reconditioning, and improvement of merchant vessels under the juris15 diction of the Secretary. The Fund has a working capital of $20,000,000, 

16 to remain available until expended. 

17 ‘‘(b) RELATIONSHIP TO OTHER LAWS.—Notwithstanding any other law, 

18 rates for shipping services provided under the Fund shall be prescribed by 

19 the Secretary and the Fund shall be credited with receipts from vessel oper20 ations conducted under the Fund. Sections 1(a) and (c), 3(c), and 4 of the 

21 Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294), apply 

22 to those operations and to seamen employed through general agents as em23 ployees of the United States Government. Notwithstanding any other law 

24 on the employment of persons by the Government, the seamen may be em25 ployed in accordance with customary commercial practices in the maritime 

26 industry. 

27 ‘‘(c) ADVANCEMENTS.—With the approval of the Director of the Office 

28 of Management and Budget, the Secretary may advance amounts the Sec29 retary considers necessary, but not more than 2 percent of vessel operating 

30 expenses, from the Fund to the appropriation ‘Salaries and Expenses’ in 

31 carrying out duties and powers related to vessel operations, without regard 

32 to the limitations on amounts stated in that appropriation. 

33 ‘‘(d) TRANSFERS.—The unexpended balances of working funds or of allo34 cation accounts established after January 1, 1951, for the activities pro35 vided for in subsection (a), and receipts received from those activities, may 

36 be transferred to the Fund, which shall be available for the purposes of 

37 those working funds or allocation accounts. 
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1 ‘‘(e) LIMITATION.—

2 ‘‘(1) IN GENERAL.—Amounts made available to the Secretary for 

3 maritime activities by this section or any other law may not be used 

4 to pay for a vessel described in paragraph (2) unless the compensation 

5 to be paid is computed under section 56303 of this title as that section 

6 is interpreted by the Comptroller General. 

7 ‘‘(2) APPLICABLE VESSELS.—Paragraph (1) applies to a vessel—

8 ‘‘(A) the title to which is acquired by the Government by req9 uisition or purchase; 

10 ‘‘(B) the use of which is taken by requisition or agreement; or 

11 ‘‘(C) lost while insured by the Government. 

12 ‘‘(3) NONAPPLICABLE VESSELS.—Paragraph (1) does not apply to a 

13 vessel under a construction-differential subsidy contract. 

14 ‘‘(f) AVAILABILITY FOR ADDITIONAL PURPOSES.—The Fund is available 

15 for—

16 ‘‘(1) necessary expenses incurred in the protection, preservation, 

17 maintenance, acquisition, or use of vessels involved in mortgage fore18 closure or forfeiture proceedings instituted by the Government, includ19 ing payment of prior claims and liens, expenses of sale, or other related 

20 charges; 

21 ‘‘(2) necessary expenses incident to the redelivery and lay-up, in the 

22 United States, of vessels chartered as of June 20, 1956, under agree23 ments not calling for their return to the Government; 

24 ‘‘(3) the activation, repair, and deactivation of merchant vessels 

25 chartered for limited emergency purposes during fiscal year 1957 under 

26 the jurisdiction of the Secretary; and 

27 ‘‘(4) payment of expenses of custody and maintenance of Govern28 ment-owned vessels not in the National Defense Reserve Fleet. 

29 ‘‘(g) EXPENSES AND RECEIPTS RELATED TO CHARTER OPERATIONS.—

30 The Fund is available for expenses incurred in activating, repairing, and de31 activating merchant vessels chartered under the jurisdiction of the Sec32 retary. Receipts from charter operations of Government-owned vessels under 

33 the jurisdiction of the Secretary shall be credited to the Fund. 

34 ‘‘§ 50302. Port development 

35 ‘‘(a) GENERAL REQUIREMENTS.—With the objective of promoting, en36 couraging, and developing ports and transportation facilities in connection 

37 with water commerce over which the Secretary of Transportation has juris38 diction, the Secretary, in cooperation with the Secretary of the Army, 

39 shall—
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1 ‘‘(1) investigate territorial regions and zones tributary to ports, tak2 ing into consideration the economies of transportation by rail, water, 

3 and highway and the natural direction of the flow of commerce; 

4 ‘‘(2) investigate the causes of congestion of commerce at ports and 

5 applicable remedies; 

6 ‘‘(3) investigate the subject of water terminals, including the nec7 essary docks, warehouses, and equipment, to devise and suggest the 

8 types most appropriate for different locations and for the most expedi9 tious and economical transfer or interchange of passengers or property 

10 between water carriers and rail carriers; 

11 ‘‘(4) consult with communities on the appropriate location and plan 

12 of construction of wharves, piers, and water terminals; 

13 ‘‘(5) investigate the practicability and advantages of harbor, river, 

14 and port improvements in connection with foreign and coastwise trade; 

15 and 

16 ‘‘(6) investigate any other matter that may tend to promote and en17 courage the use by vessels of ports adequate to care for the freight that 

18 naturally would pass through those ports. 

19 ‘‘(b) SUBMISSION OF FINDINGS TO SURFACE TRANSPORTATION

20 BOARD.—After an investigation under subsection (a), if the Secretary of 

21 Transportation believes that the rates or practices of a rail carrier subject 

22 to the jurisdiction of the Surface Transportation Board are detrimental to 

23 the objective specified in subsection (a), or that new rates or practices, new 

24 or additional port terminal facilities, or affirmative action by a rail carrier 

25 is necessary to promote that objective, the Secretary may submit findings 

26 to the Board for action the Board considers appropriate under existing law. 

27 ‘‘§ 50303. Operating property and extending term of notes 

28 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may—

29 ‘‘(1) operate or lease docks, wharves, piers, or real property under 

30 the Secretary’s control; and

31 ‘‘(2) make extensions and accept renewals of—

32 ‘‘(A) promissory notes and other evidences of indebtedness on 

33 property; and 

34 ‘‘(B) mortgages and other contracts securing the property. 

35 ‘‘(b) TERMS OF TRANSACTIONS.—A transaction under subsection (a) 

36 shall be on terms the Secretary considers necessary to carry out the pur37 poses of this subtitle, but consistent with sound business practice. 

38 ‘‘(c) AVAILABILITY OF AMOUNTS.—Amounts received by the Secretary 

39 from a transaction under this section are available for expenditure by the 

40 Secretary as provided in this subtitle. 
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1 ‘‘§ 50304. Sale and transfer of property 

2 ‘‘(a) AUTHORITY TO SELL.—The Secretary of Transportation may sell 

3 property (other than vessels transferred under section 4 of the Merchant 

4 Marine Act, 1920 (ch. 250, 41 Stat. 990)) on terms the Secretary considers 

5 appropriate. 

6 ‘‘(b) TRANSFERS FROM MILITARY TO CIVILIAN CONTROL.—When the 

7 President considers it in the interest of the United States, the President 

8 may transfer to the Secretary of Transportation possession and control of 

9 property described in the second paragraph of section 17 of the Merchant 

10 Marine Act, 1920 (ch. 250, 41 Stat. 994), as originally enacted, that is pos11 sessed and controlled by the Secretary of a military department. 

12 ‘‘(c) TRANSFERS FROM CIVILIAN TO MILITARY CONTROL.—When the 

13 President considers it necessary, the President by executive order may 

14 transfer to the Secretary of a military department possession and control 

15 of property described in section 17 of the Merchant Marine Act, 1920 (ch. 

16 250, 41 Stat. 994), as originally enacted, that is possessed and controlled 

17 by the Secretary of Transportation. The President’s order shall state the 

18 need for the transfer and the period of the need. When the President de19 cides that the need has ended, the possession and control shall revert to the 

20 Secretary of Transportation. The property may not be sold except as pro21 vided by law. 

22 ‘‘§ 50305. Appointment of trustee or receiver and operation 

23 of vessels 

24 ‘‘(a) APPOINTMENT OF TRUSTEES AND RECEIVERS.—

25 ‘‘(1) APPOINTMENT OF SECRETARY.—In a proceeding in a court of 

26 the United States in which a trustee or receiver may be appointed for 

27 a corporation operating a vessel of United States registry between the 

28 United States and a foreign country, on which the United States Gov29 ernment holds a mortgage, the court may appoint the Secretary of 

30 Transportation as the sole trustee or receiver (subject to the direction 

31 of the court) if—

32 ‘‘(A) the court finds that the appointment will—

33 ‘‘(i) inure to the advantage of the estate and the parties 

34 in interest; and 

35 ‘‘(ii) tend to carry out the purposes of this subtitle; and 

36 ‘‘(B) the Secretary expressly consents to the appointment. 

37 ‘‘(2) APPOINTMENT OF OTHER PERSON.—The appointment of an38 other person as trustee or receiver without a hearing becomes effective 

39 when ratified by the Secretary, but the Secretary may demand a hear40 ing. 

41 ‘‘(b) OPERATION OF VESSELS.—
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1 ‘‘(1) IN GENERAL.—If the court is unwilling to allow the trustee or 

2 receiver to operate the vessel in foreign commerce without financial aid 

3 from the Government pending termination of the proceeding, and the 

4 Secretary certifies to the court that the continued operation of the ves5 sel is essential to the foreign commerce of the United States and is rea6 sonably calculated to carry out the purposes of this subtitle, the court 

7 may allow the Secretary to operate the vessel, either directly or through 

8 a managing agent or operator employed by the Secretary. The Sec9 retary must agree to comply with terms imposed by the court sufficient 

10 to protect the parties in interest. The Secretary also must agree to pay 

11 all operating losses resulting from the operation. The operation shall 

12 be for the account of the trustee or receiver. 

13 ‘‘(2) PAYMENT OF OPERATING LOSSES AND OTHER AMOUNTS.—The 

14 Secretary has no claim against the corporation, its estate, or its assets 

15 for operating losses paid by the Secretary, but the Secretary may pay 

16 amounts for depreciation the Secretary considers reasonable and other 

17 amounts the court considers just. The payment of operating losses and 

18 the other amounts and compliance with terms imposed by the court 

19 shall be in satisfaction of any claim against the Secretary resulting 

20 from the operation of the vessel. 

21 ‘‘(3) DEEMED OPERATION BY GOVERNMENT.—A vessel operated by 

22 the Secretary under this subsection is deemed to be a vessel operated 

23 by the Government under chapter 309 of this title. 

24 ‘‘§ 50306. Requiring testimony and records in investigations 

25 ‘‘(a) IN GENERAL.—In conducting an investigation that the Secretary of 

26 Transportation considers necessary and proper to carry out this subtitle, the 

27 Secretary may administer oaths, take evidence, and subpoena persons to 

28 testify and produce documents relevant to the matter under investigation. 

29 Persons may be required to attend or produce documents from any place 

30 in the United States at any designated place of hearing. 

31 ‘‘(b) FEES AND MILEAGE.—Persons subpoenaed by the Secretary under 

32 subsection (a) shall be paid the same fees and mileage paid to witnesses in 

33 the courts of the United States. 

34 ‘‘(c) ENFORCEMENT OF SUBPOENAS.—If a person disobeys a subpoena 

35 issued under subsection (a), the Secretary may seek an order enforcing the 

36 subpoena from the district court of the United States for the district in 

37 which the person resides or does business. Process may be served in the ju38 dicial district in which the person resides or is found. The court may issue 

39 an order to obey the subpoena and punish a refusal to obey as a contempt 

40 of court.
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1 ‘‘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.

2 ‘‘§ 50501. Entities deemed citizens of the United States 

3 ‘‘(a) IN GENERAL.—In this subtitle, a corporation, partnership, or asso4 ciation is deemed to be a citizen of the United States only if the controlling 

5 interest is owned by citizens of the United States. However, if the corpora6 tion, partnership, or association is operating a vessel in the coastwise trade, 

7 at least 75 percent of the interest must be owned by citizens of the United 

8 States. 

9 ‘‘(b) ADDITIONAL REQUIREMENTS FOR CORPORATIONS.—In this subtitle, 

10 a corporation is deemed to be a citizen of the United States only if, in addi11 tion to satisfying the requirements in subsection (a)—

12 ‘‘(1) it is incorporated under the laws of the United States or a 

13 State; 

14 ‘‘(2) its chief executive officer, by whatever title, and the chairman 

15 of its board of directors are citizens of the United States; and 

16 ‘‘(3) no more of its directors are noncitizens than a minority of the 

17 number necessary to constitute a quorum. 

18 ‘‘(c) DETERMINATION OF CONTROLLING CORPORATE INTEREST.—The 

19 controlling interest in a corporation is owned by citizens of the United 

20 States under subsection (a) only if—

21 ‘‘(1) title to the majority of the stock in the corporation is vested 

22 in citizens of the United States free from any trust or fiduciary obliga23 tion in favor of a person not a citizen of the United States; 

24 ‘‘(2) the majority of the voting power in the corporation is vested 

25 in citizens of the United States;

26 ‘‘(3) there is no contract or understanding by which the majority of 

27 the voting power in the corporation may be exercised, directly or indi28 rectly, in behalf of a person not a citizen of the United States; and 

29 ‘‘(4) there is no other means by which control of the corporation is 

30 given to or permitted to be exercised by a person not a citizen of the 

31 United States. 

32 ‘‘(d) DETERMINATION OF 75 PERCENT CORPORATE INTEREST.—At least 

33 75 percent of the interest in a corporation is owned by citizens of the 

34 United States under subsection (a) only if—

35 ‘‘(1) title to at least 75 percent of the stock in the corporation is 

36 vested in citizens of the United States free from any trust or fiduciary 

37 obligation in favor of a person not a citizen of the United States; 
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1 ‘‘(2) at least 75 percent of the voting power in the corporation is 

2 vested in citizens of the United States; 

3 ‘‘(3) there is no contract or understanding by which more than 25 

4 percent of the voting power in the corporation may be exercised, di5 rectly or indirectly, in behalf of a person not a citizen of the United 

6 States; and 

7 ‘‘(4) there is no other means by which control of more than 25 per8 cent of an interest in the corporation is given to or permitted to be 

9 exercised by a person not a citizen of the United States. 

10 ‘‘§ 50502. Applicability to receivers, trustees, successors, and 

11 assigns 

12 ‘‘This subtitle applies to receivers, trustees, successors, and assigns of any 

13 person to whom this subtitle applies. 

14 ‘‘§ 50503. Oceanographic research vessels 

15 ‘‘An oceanographic research vessel (as defined in section 2101 of this 

16 title) is deemed not to be engaged in trade or commerce. 

17 ‘‘§ 50504. Sailing school vessels 

18 ‘‘(a) DEFINITIONS.—In this section, the terms ‘sailing school instructor’, 

19 ‘sailing school student’, and ‘sailing school vessel’ have the meaning given 

20 those terms in section 2101 of this title. 

21 ‘‘(b) NOT SEAMEN.—A sailing school student or sailing school instructor 

22 is deemed not to be a seaman under—

23 ‘‘(1) parts B, F, and G of subtitle II of this title; or 

24 ‘‘(2) the maritime law doctrines of maintenance and cure or war25 ranty of seaworthiness. 

26 ‘‘(c) NOT MERCHANT VESSEL OR ENGAGED IN TRADE OR COMMERCE.—

27 A sailing school vessel is deemed not to be—

28 ‘‘(1) a merchant vessel under section 11101(a)–(c) of this title; or 

29 ‘‘(2) a vessel engaged in trade or commerce. 

30 ‘‘(d) EVIDENCE OF FINANCIAL RESPONSIBILITY.—The owner or 

31 charterer of a sailing school vessel shall maintain evidence of financial re32 sponsibility to meet liability for death or injury to sailing school students 

33 and sailing school instructors on a voyage on the vessel. The amount of fi34 nancial responsibility shall be at least $50,000 for each student and instruc35 tor. Financial responsibility under this subsection may be evidenced by in36 surance or other adequate financial resources.

37 ‘‘PART B—MERCHANT MARINE SERVICE

38 ‘‘CHAPTER 511—GENERAL

‘‘Sec. 

‘‘51101. Policy. 

‘‘51102. Definitions. 

‘‘51103. General authority of Secretary of Transportation. 

‘‘51104. General authority of Secretary of the Navy.
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1 ‘‘§ 51101. Policy 

2 ‘‘It is the policy of the United States Government that merchant marine 

3 vessels of the United States should be operated by highly trained and effi4 cient citizens of the United States and that the United States Navy and 

5 the merchant marine of the United States should work closely together to 

6 promote the maximum integration of the total seapower forces of the United 

7 States. 

8 ‘‘§ 51102. Definitions 

9 ‘‘In this part: 

10 ‘‘(1) ACADEMY.—The term ‘Academy’ means the United States Mer11 chant Marine Academy located at Kings Point, New York, and main12 tained under chapter 513 of this title. 

13 ‘‘(2) COST OF EDUCATION PROVIDED.—The term ‘cost of education 

14 provided’ means the financial costs incurred by the United States Gov15 ernment for providing training or financial assistance to students at 

16 the Academy and the State maritime academies, including direct finan17 cial assistance, room, board, classroom academics, and other training 

18 activities. 

19 ‘‘(3) MERCHANT MARINE OFFICER.—The term ‘merchant marine of20 ficer’ means an individual issued a license by the Coast Guard author21 izing service as—

22 ‘‘(A) a master, mate, or pilot on a documented vessel that—

23 ‘‘(i) is of at least 1,000 gross tons as measured under sec24 tion 14502 of this title or an alternate tonnage measured 

25 under section 14302 of this title as prescribed by the Sec26 retary under section 14104 of this title; and 

27 ‘‘(ii) operates on the oceans or the Great Lakes; or 

28 ‘‘(B) an engineer officer on a documented vessel propelled by 

29 machinery of at least 4,000 horsepower. 

30 ‘‘(4) STATE MARITIME ACADEMY.—The term ‘State maritime acad31 emy’ means—

32 ‘‘(A) a State maritime academy or college sponsored by a State 

33 and assisted under chapter 515 of this title; and 

34 ‘‘(B) a regional maritime academy or college sponsored by a 

35 group of States and assisted under chapter 515 of this title. 

36 ‘‘§ 51103. General authority of Secretary of Transportation 

37 ‘‘(a) EDUCATION AND TRAINING.—The Secretary of Transportation may 

38 provide for the education and training of citizens of the United States for 

39 the safe and efficient operation of the merchant marine of the United States 

40 at all times, including operation as a naval and military auxiliary in time 

41 of war or national emergency. 
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1 ‘‘(b) SURPLUS PROPERTY FOR INSTRUCTIONAL PURPOSES.—

2 ‘‘(1) IN GENERAL.—The Secretary may cooperate with and assist the 

3 institutions named in paragraph (2) by making vessels, shipboard 

4 equipment, and other marine equipment, owned by the United States 

5 Government and determined to be excess or surplus, available to those 

6 institutions for instructional purposes, by gift, loan, sale, lease, or char7 ter on terms the Secretary considers appropriate. 

8 ‘‘(2) INSTITUTIONS.—The institutions referred to in paragraph (1) 

9 are—

10 ‘‘(A) the United States Merchant Marine Academy; 

11 ‘‘(B) a State maritime academy; and 

12 ‘‘(C) a nonprofit training institution jointly approved by the 

13 Secretary of Transportation and the Secretary of the department 

14 in which the Coast Guard is operating as offering training courses 

15 that meet Federal regulations for maritime training. 

16 ‘‘(c) ASSISTANCE FROM OTHER AGENCIES.—

17 ‘‘(1) IN GENERAL.—The Secretary of Transportation may secure di18 rectly from an agency, on a reimbursable basis, information, facilities, 

19 and equipment necessary to carry out this part. 

20 ‘‘(2) DETAILING PERSONNEL.—At the request of the Secretary, the 

21 head of an agency (including a military department) may detail, on a 

22 reimbursable basis, personnel from the agency to the Secretary to as23 sist in carrying out this part. 

24 ‘‘(d) ACADEMY PERSONNEL.—To carry out this part, the Secretary 

25 may—

26 ‘‘(1) employ an individual as a professor, lecturer, or instructor at 

27 the Academy, without regard to the provisions of title 5 governing ap28 pointments in the competitive service; and 

29 ‘‘(2) pay the individual without regard to chapter 51 and subchapter 

30 III of chapter 53 of title 5. 

31 ‘‘§ 51104. General authority of Secretary of the Navy 

32 ‘‘The Secretary of the Navy, in cooperation with the Maritime Adminis33 trator and the head of each State maritime academy, shall ensure that—

34 ‘‘(1) the training of future merchant marine officers at the United 

35 States Merchant Marine Academy and at State maritime academies in36 cludes programs for naval science training in the operation of merchant 

37 vessels as a naval and military auxiliary; and 

38 ‘‘(2) naval officer training programs for future officers, insofar as 

39 possible, are maintained at designated maritime academies consistent 

40 with Navy standards and needs. 
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1 ‘‘CHAPTER 513—UNITED STATES MERCHANT MARINE 

2 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.

3 ‘‘§ 51301. Maintenance of the Academy 

4 ‘‘The Secretary of Transportation shall maintain the United States Mer5 chant Marine Academy to provide instruction to individuals to prepare them 

6 for service in the merchant marine of the United States. 

7 ‘‘§ 51302. Nomination and competitive appointment of ca8 dets 

9 ‘‘(a) REQUIREMENTS.—An individual may be nominated for a competitive 

10 appointment as a cadet at the United States Merchant Marine Academy 

11 only if the individual—

12 ‘‘(1) is a citizen or national of the United States; and 

13 ‘‘(2) meets the minimum requirements that the Secretary of Trans14 portation shall establish. 

15 ‘‘(b) NOMINATORS.—Nominations for competitive appointments for the 

16 positions allocated under subsection (c) may be made as follows: 

17 ‘‘(1) A Senator may nominate residents of the State represented by 

18 that Senator. 

19 ‘‘(2) A Member of the House of Representatives may nominate resi20 dents of the State in which the congressional district represented by 

21 that Member is located. 

22 ‘‘(3) A Delegate to the House of Representatives from the District 

23 of Columbia, the Virgin Islands, Guam, or American Samoa may nomi24 nate residents of the jurisdiction represented by that Delegate. 

25 ‘‘(4) The Resident Commissioner to the United States from Puerto 

26 Rico may nominate residents of Puerto Rico. 

27 ‘‘(5) The Governor of the Northern Mariana Islands may nominate 

28 residents of the Northern Mariana Islands. 

29 ‘‘(6) The Panama Canal Commission may nominate—

30 ‘‘(A) residents, or sons or daughters of residents, of an area or 

31 installation in Panama and made available to the United States 

32 under the Panama Canal Treaty of 1977, the agreements relating 
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1 to and implementing that Treaty, signed September 7, 1977, and 

2 the Agreement Between the United States of America and the Re3 public of Panama Concerning Air Traffic Control and Related 

4 Services, concluded January 8, 1979; and 

5 ‘‘(B) sons or daughters of personnel of the United States Gov6 ernment and the Panama Canal Commission residing in Panama. 

7 ‘‘(c) ALLOCATION OF POSITIONS.—Positions for competitive appointments 

8 shall be allocated each year as follows: 

9 ‘‘(1) Positions shall be allocated for residents of each State nomi10 nated by the Members of Congress from that State in proportion to 

11 the representation in Congress from that State. 

12 ‘‘(2) Four positions shall be allocated for residents of the District 

13 of Columbia nominated by the Delegate to the House of Representa14 tives from the District of Columbia. 

15 ‘‘(3) One position each shall be allocated for residents of the Virgin 

16 Islands, Guam, and American Samoa nominated by the Delegates to 

17 the House of Representatives from the Virgin Islands, Guam, and 

18 American Samoa, respectively. 

19 ‘‘(4) One position shall be allocated for a resident of Puerto Rico 

20 nominated by the Resident Commissioner to the United States from 

21 Puerto Rico. 

22 ‘‘(5) One position shall be allocated for a resident of the Northern 

23 Mariana Islands nominated by the Governor of the Northern Mariana 

24 Islands. 

25 ‘‘(6) Two positions shall be allocated for individuals nominated by 

26 the Panama Canal Commission. 

27 ‘‘(d) COMPETITIVE SYSTEM FOR APPOINTMENT.—

28 ‘‘(1) ESTABLISHMENT OF SYSTEM.—The Secretary shall establish a 

29 competitive system for selecting individuals nominated under subsection 

30 (b) to fill the positions allocated under subsection (c). The system must 

31 determine the relative merit of each individual based on competitive ex32 aminations, an assessment of the individual’s academic background, 

33 and other effective indicators of motivation and probability of success34 ful completion of training at the Academy. 

35 ‘‘(2) APPOINTMENTS BY JURISDICTION.—The Secretary shall ap36 point individuals to fill the positions allocated under subsection (c) for 

37 each jurisdiction in the order of merit of the individuals nominated 

38 from that jurisdiction. 

39 ‘‘(3) REMAINING UNFILLED POSITIONS.—If positions remain unfilled 

40 after the appointments are made under paragraph (2), the Secretary 
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1 shall appoint individuals to fill the positions in the order of merit of 

2 the remaining individuals nominated from all jurisdictions. 

3 ‘‘§ 51303. Non-competitive appointments 

4 ‘‘The Secretary of Transportation may appoint each year without com5 petition as cadets at the United States Merchant Marine Academy not more 

6 than 40 qualified individuals with qualities the Secretary considers to be of 

7 special value to the Academy. In making these appointments, the Secretary 

8 shall try to achieve a national demographic balance at the Academy. 

9 ‘‘§ 51304. Additional appointments from particular areas 

10 ‘‘(a) OTHER COUNTRIES IN WESTERN HEMISPHERE.—The President 

11 may appoint individuals from countries in the Western Hemisphere other 

12 than the United States to receive instruction at the United States Merchant 

13 Marine Academy. Not more than 12 individuals may receive instruction 

14 under this subsection at the same time, and not more than 2 individuals 

15 from the same country may receive instruction under this subsection at the 

16 same time. 

17 ‘‘(b) OTHER COUNTRIES GENERALLY.—

18 ‘‘(1) APPOINTMENT.—The Secretary of Transportation, with the ap19 proval of the Secretary of State, may appoint individuals from coun20 tries other than the United States to receive instruction at the Acad21 emy. Not more than 30 individuals may receive instruction under this 

22 subsection at the same time. 

23 ‘‘(2) REIMBURSEMENT.—The Secretary of Transportation shall en24 sure that the country from which an individual comes under this sub25 section will reimburse the Secretary for the cost (as determined by the 

26 Secretary) of the instruction and allowances received by the individual. 

27 ‘‘(c) PANAMA.—

28 ‘‘(1) APPOINTMENT.—The Secretary of Transportation, with the ap29 proval of the Secretary of State, may appoint individuals from Panama 

30 to receive instruction at the Academy. Individuals appointed under this 

31 subsection are in addition to those appointed under any other provision 

32 of this chapter. 

33 ‘‘(2) REIMBURSEMENT.—The Secretary of Transportation shall be 

34 reimbursed for the cost (as determined by the Secretary) of the instruc35 tion and allowances received by an individual appointed under this sub36 section. 

37 ‘‘(d) ALLOWANCES AND REGULATIONS.—Individuals receiving instruction 

38 under this section are entitled to the same allowances and are subject to 

39 the same regulations on admission, attendance, discipline, resignation, dis40 charge, dismissal, and graduation, as cadets at the Academy appointed from 

41 the United States. 
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1 ‘‘§ 51305. Prohibited basis for appointment 

2 ‘‘Preference may not be given to an individual for appointment as a cadet 

3 at the United States Merchant Marine Academy because one or more mem4 bers of the individual’s immediate family are alumni of the Academy. 

5 ‘‘§ 51306. Cadet commitment agreements 

6 ‘‘(a) AGREEMENT REQUIREMENTS.—A citizen of the United States ap7 pointed as a cadet at the United States Merchant Marine Academy must 

8 sign, as a condition of the appointment, an agreement to—

9 ‘‘(1) complete the course of instruction at the Academy; 

10 ‘‘(2) fulfill the requirements for a license as an officer in the mer11 chant marine of the United States before graduation from the Acad12 emy; 

13 ‘‘(3) maintain a valid license as an officer in the merchant marine 

14 of the United States for at least 6 years after graduation from the 

15 Academy, accompanied by the appropriate national and international 

16 endorsements and certification required by the Coast Guard for service 

17 aboard vessels on domestic and international voyages; 

18 ‘‘(4) apply for, and accept if tendered, an appointment as a commis19 sioned officer in the Naval Reserve (including the Merchant Marine Re20 serve, Naval Reserve), the Coast Guard Reserve, or any other reserve 

21 unit of an armed force of the United States, and, if tendered the ap22 pointment, to serve for at least 6 years after graduation from the Acad23 emy; 

24 ‘‘(5) serve the foreign and domestic commerce and the national de25 fense of the United States for at least 5 years after graduation from 

26 the Academy—

27 ‘‘(A) as a merchant marine officer on a documented vessel or 

28 a vessel owned and operated by the United States Government or 

29 by a State; 

30 ‘‘(B) as an employee in a United States maritime-related indus31 try, profession, or marine science (as determined by the Secretary 

32 of Transportation), if the Secretary determines that service under 

33 subclause (A) is not available to the individual; 

34 ‘‘(C) as a commissioned officer on active duty in an armed force 

35 of the United States, as a commissioned officer in the National 

36 Oceanic and Atmospheric Administration, or in other maritime-re37 lated Federal employment which serves the national security inter38 ests of the United States, as determined by the Secretary; or 

39 ‘‘(D) by a combination of the service alternatives referred to in 

40 subclauses (A)–(C); and 

41 ‘‘(6) report to the Secretary on compliance with clauses (1)–(5). 
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1 ‘‘(b) FAILURE TO COMPLETE COURSE OF INSTRUCTION.—

2 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

3 that an individual who has attended the Academy for at least 2 years 

4 has failed to fulfill the part of the agreement described in subsection 

5 (a)(1), the individual may be ordered by the Secretary of Defense to 

6 serve on active duty in one of the armed forces of the United States 

7 for a period of not more than 2 years. In cases of hardship as deter8 mined by the Secretary of Transportation, the Secretary of Transpor9 tation may waive this paragraph in whole or in part. 

10 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

11 unwilling to order an individual to serve on active duty under para12 graph (1), or if the Secretary of Transportation determines that reim13 bursement of the cost of education provided would better serve the in14 terests of the United States, the Secretary of Transportation may re15 cover from the individual the cost of education provided by the Govern16 ment. 

17 ‘‘(c) FAILURE TO CARRY OUT OTHER REQUIREMENTS.—

18 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

19 that an individual has failed to fulfill any part of the agreement de20 scribed in subsection (a)(2)–(6), the individual may be ordered to serve 

21 on active duty for a period of at least 3 years but not more than the 

22 unexpired period (as determined by the Secretary) of the service re23 quired by subsection (a)(5). The Secretary of Transportation, in con24 sultation with the Secretary of Defense, shall determine in which serv25 ice the individual shall serve. In cases of hardship as determined by 

26 the Secretary of Transportation, the Secretary of Transportation may 

27 waive this paragraph in whole or in part. 

28 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

29 unwilling to order an individual to serve on active duty under para30 graph (1), or if the Secretary of Transportation determines that reim31 bursement of the cost of education provided would better serve the in32 terests of the United States, the Secretary of Transportation may re33 cover from the individual the cost of education provided. The Secretary 

34 may reduce the amount to be recovered to reflect partial performance 

35 of service obligations and other factors the Secretary determines merit 

36 a reduction. 

37 ‘‘(d) ACTIONS TO RECOVER COST.—To aid in the recovery of the cost 

38 of education provided by the Government under a commitment agreement 

39 under this section, the Secretary of Transportation may—

40 ‘‘(1) request the Attorney General to bring a civil action against the 

41 individual; and 
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1 ‘‘(2) make use of the Federal debt collection procedures in chapter 

2 176 of title 28 or other applicable administrative remedies. 

3 ‘‘§ 51307. Places of training 

4 ‘‘The Secretary of Transportation may provide for the training of cadets 

5 at the United States Merchant Marine Academy—

6 ‘‘(1) on vessels owned or subsidized by the United States Govern7 ment; 

8 ‘‘(2) on other documented vessels, with the permission of the owner; 

9 and 

10 ‘‘(3) in shipyards or plants and with industrial or educational organi11 zations. 

12 ‘‘§ 51308. Uniforms, textbooks, and transportation allow13 ances 

14 ‘‘The Secretary of Transportation shall provide cadets at the United 

15 States Merchant Marine Academy—

16 ‘‘(1) all required uniforms and textbooks; and 

17 ‘‘(2) allowances for transportation (including reimbursement of trav18 eling expenses) when traveling under orders as a cadet. 

19 ‘‘§ 51309. Academic degree 

20 ‘‘(a) BACHELOR’S DEGREE.—

21 ‘‘(1) IN GENERAL.—The Superintendent of the United States Mer22 chant Marine Academy may confer the degree of bachelor of science 

23 on an individual who—

24 ‘‘(A) has met the conditions prescribed by the Secretary of 

25 Transportation; and 

26 ‘‘(B) if a citizen of the United States, has passed the examina27 tion for a merchant marine officer’s license. 

28 ‘‘(2) EFFECT OF PHYSICAL DISQUALIFICATION.—An individual not 

29 allowed to take the examination for a merchant marine officer’s license 

30 only because of physical disqualification may not be denied a degree for 

31 not taking the examination. 

32 ‘‘(b) MASTER’S DEGREE.—The Superintendent of the Academy may con33 fer a master’s degree on an individual who has met the conditions pre34 scribed by the Secretary. A master’s degree program may be funded 

35 through non-appropriated funds. To maintain the appropriate academic 

36 standards, the program shall be accredited by the appropriate accreditation 

37 body. The Secretary may prescribe regulations necessary to administer such 

38 a program. 

39 ‘‘(c) GRADUATION NOT ENTITLEMENT TO HOLD LICENSE.—Graduation 

40 from the Academy does not entitle an individual to hold a license author41 izing service on a merchant vessel. 
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1 ‘‘§ 51310. Deferment of service obligation under cadet com2 mitment agreements 

3 ‘‘The Secretary of Transportation may defer the service commitment of 

4 an individual under section 51306(a)(5) of this title (as specified in the 

5 cadet commitment agreement) for not more than 2 years if the individual 

6 is engaged in a graduate course of study approved by the Secretary. How7 ever, deferment of service as a commissioned officer on active duty must be 

8 approved by the Secretary of the affected military department (or the Sec9 retary of Commerce, for service with the National Oceanic and Atmospheric 

10 Administration). 

11 ‘‘§ 51311. Midshipman status in the Naval Reserve 

12 ‘‘(a) APPLICATION REQUIREMENT.—Before being appointed as a cadet at 

13 the United States Merchant Marine Academy, a citizen of the United States 

14 must agree to apply for midshipman status in the Naval Reserve (including 

15 the Merchant Marine Reserve, Naval Reserve). 

16 ‘‘(b) APPOINTMENT.—

17 ‘‘(1) IN GENERAL.—A citizen of the United States appointed as a 

18 cadet at the Academy shall be appointed by the Secretary of the Navy 

19 as a midshipman in the Naval Reserve (including the Merchant Marine 

20 Reserve, Naval Reserve). 

21 ‘‘(2) RIGHTS AND PRIVILEGES.—The Secretary of the Navy shall 

22 provide for cadets of the Academy who are midshipmen in the United 

23 States Naval Reserve to be—

24 ‘‘(A) issued an identification card (referred to as a ‘military ID 

25 card’); and 

26 ‘‘(B) entitled to all rights and privileges in accordance with the 

27 same eligibility criteria as apply to other members of the Ready 

28 Reserve of the reserve components of the armed forces. 

29 ‘‘(3) COORDINATION.—The Secretary of the Navy shall carry out 

30 paragraphs (1) and (2) in coordination with the Secretary of Transpor31 tation. 

32 ‘‘§ 51312. Board of Visitors 

33 ‘‘(a) IN GENERAL.—The United States Merchant Marine Academy has 

34 a Board of Visitors that shall visit the Academy annually on a date named 

35 by the Secretary of Transportation and make recommendations to the Sec36 retary on the operation of the Academy. The Board has a term of 2 years 

37 commencing at the beginning of each Congress. 

38 ‘‘(b) APPOINTMENT.—

39 ‘‘(1) IN GENERAL.—The Board is composed of—

40 ‘‘(A) 2 Senators appointed by the chairman of the Committee 

41 on Commerce, Science, and Transportation of the Senate; 
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1 ‘‘(B) 3 Members of the House of Representatives appointed by 

2 the chairman of the Committee on Transportation and Infrastruc3 ture of the House of Representatives; 

4 ‘‘(C) 1 Senator appointed by the Vice President; 

5 ‘‘(D) 2 Members of the House of Representatives appointed by 

6 the Speaker of the House of Representatives; and 

7 ‘‘(E) the chairmen of the Committee on Commerce, Science, and 

8 Transportation of the Senate and the Committee on Transpor9 tation and Infrastructure of the House of Representatives, as ex 

10 officio members. 

11 ‘‘(2) SUBSTITUTE APPOINTMENT.—If an appointed member of the 

12 Board is unable to visit the Academy as provided in subsection (a), an13 other individual may be appointed as a substitute in the manner pro14 vided in paragraph (1). 

15 ‘‘(c) STAFF.—The chairmen of the Committee on Commerce, Science, and 

16 Transportation of the Senate and the Committee on Transportation and In17 frastructure of the House of Representatives may designate staff members 

18 of their committees to serve without reimbursement as staff for the Board. 

19 ‘‘(d) TRAVEL EXPENSES.—When serving away from home or regular 

20 place of business, a member of the Board or a staff member designated 

21 under subsection (c) shall be allowed travel expenses, including per diem in 

22 lieu of subsistence, as authorized by section 5703 of title 5. 

23 ‘‘§ 51313. Advisory Board 

24 ‘‘(a) IN GENERAL.—The United States Merchant Marine Academy has 

25 an Advisory Board that shall visit the Academy at least once during each 

26 academic year to examine the course of instruction and management of the 

27 Academy and to advise the Maritime Administrator and the Superintendent 

28 of the Academy. 

29 ‘‘(b) APPOINTMENT AND TERMS.—The Board is composed of not more 

30 than 7 individuals appointed by the Secretary of Transportation. The indi31 viduals must be distinguished in education and other fields related to the 

32 Academy. Members of the Board are appointed for terms of not more than 

33 3 years and may be reappointed. The Secretary shall designate one of the 

34 members as chairman. 

35 ‘‘(c) TRAVEL EXPENSES.—When serving away from home or regular 

36 place of business, a member of the Board shall be allowed travel expenses, 

37 including per diem in lieu of subsistence, as authorized by section 5703 of 

38 title 5. 

39 ‘‘(d) RELATIONSHIP TO OTHER LAW.—The Federal Advisory Committee 

40 Act (5 App. U.S.C.) does not apply to the Board. 
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1 ‘‘CHAPTER 515—STATE MARITIME ACADEMY SUPPORT 

2 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.

3 ‘‘§ 51501. General support program 

4 ‘‘(a) ASSISTANCE TO STATE MARITIME ACADEMIES.—The Secretary of 

5 Transportation shall cooperate with and assist State maritime academies in 

6 providing instruction to individuals to prepare them for service in the mer7 chant marine of the United States. 

8 ‘‘(b) COURSE DEVELOPMENT.—The Secretary shall provide to each State 

9 maritime academy guidance and assistance in developing courses on the op10 eration and maintenance of new vessels, on equipment, and on innovations 

11 being introduced to the merchant marine of the United States. 

12 ‘‘§ 51502. Detailing of personnel 

13 ‘‘At the request of the Governor of a State, the President may detail, 

14 without reimbursement, personnel of the Navy, the Coast Guard, and the

15 Maritime Service to a State maritime academy to serve as a superintendent, 

16 professor, lecturer, or instructor at the academy. 

17 ‘‘§ 51503. Regional maritime academies 

18 ‘‘The Governors of the States cooperating to sponsor a regional maritime 

19 academy shall designate in writing one of those States to conduct the affairs 

20 of that academy. A regional maritime academy is eligible for assistance from 

21 the United States Government on the same basis as a State maritime acad22 emy sponsored by a single State. 

23 ‘‘§ 51504. Use of training vessels 

24 ‘‘(a) APPLICATIONS TO USE VESSELS.—The Governor of a State spon25 soring a State maritime academy (or the Governor of the State designated 

26 to conduct the affairs of a regional maritime academy) may apply in writing 

27 to the Secretary of Transportation to obtain the use of a training vessel for 

28 the academy. A vessel provided under this section remains the property of 

29 the United States Government. 

30 ‘‘(b) GENERAL AUTHORITY.—Subject to subsection (c), the Secretary 

31 may provide to a State maritime academy, for use as a training vessel, a 

32 suitable vessel under the control of the Secretary or made available to the 
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1 Secretary under subsection (e). If a suitable vessel is not available, the Sec2 retary may build and provide a suitable vessel. 

3 ‘‘(c) APPROVAL REQUIREMENTS.—The Secretary may provide a vessel 

4 under this section only if—

5 ‘‘(1) an application has been made under subsection (a); 

6 ‘‘(2) the State maritime academy satisfies section 51506(a) of this 

7 title; and 

8 ‘‘(3) a suitable port will be available for the safe mooring of the ves9 sel while the academy is using the vessel. 

10 ‘‘(d) PREPARATION AND MAINTENANCE.—A vessel provided under this 

11 section shall be—

12 ‘‘(1) repaired, reconditioned, and equipped (with all apparel, charts, 

13 books, and instruments of navigation) as necessary for use as a train14 ing vessel; and 

15 ‘‘(2) maintained in good repair by the Secretary. 

16 ‘‘(e) AGENCY VESSELS.—An agency may provide to the Secretary, for use 

17 by a State maritime academy, a vessel (including equipment) that—

18 ‘‘(1) is suitable for training purposes; and 

19 ‘‘(2) can be provided without detriment to the service to which the 

20 vessel is assigned. 

21 ‘‘(f) FUEL COSTS.—The Secretary may pay to a State maritime academy 

22 the costs of fuel used by a vessel provided under this section while used for 

23 training. 

24 ‘‘(g) REMOVING VESSELS FROM SERVICE AND VESSEL SHARING.—The 

25 Secretary may not—

26 ‘‘(1) take a vessel, currently in use as a training vessel under this 

27 section, out of service to implement an alternative program (including 

28 vessel sharing) unless the vessel is incapable of being maintained in 

29 good repair as required by subsection (d); or 

30 ‘‘(2) implement a program requiring a State maritime academy to 

31 share its training vessel with another State maritime academy, except 

32 with the express consent of Congress. 

33 ‘‘§ 51505. Annual payments for maintenance and support 

34 ‘‘(a) PAYMENT AGREEMENTS.—The Secretary of Transportation may 

35 make an agreement (effective for not more than 4 years) with the following 

36 academies to provide annual payments to those academies for their mainte37 nance and support: 

38 ‘‘(1) One State maritime academy in each State that satisfies section 

39 51506(a) of this title. 

40 ‘‘(2) Each regional maritime academy that satisfies section 51506(a) 

41 of this title. 
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1 ‘‘(b) PAYMENTS.—

2 ‘‘(1) IN GENERAL.—Subject to paragraph (2), an annual payment to 

3 an academy under subsection (a) shall be at least equal to the amount 

4 given to the academy for its maintenance and support by the State in 

5 which it is located, or, for a regional maritime academy, by all States 

6 cooperating to sponsor the academy. 

7 ‘‘(2) MAXIMUM.—The amount under paragraph (1) may not be more 

8 than $25,000. However, if the academy satisfies section 51506(b) of 

9 this title, the amount shall be—

10 ‘‘(A) $100,000 for a State maritime academy; and 

11 ‘‘(B) $200,000 for a regional maritime academy. 

12 ‘‘§ 51506. Conditions to receiving payments and use of ves13 sels 

14 ‘‘(a) GENERAL CONDITIONS.—As conditions of receiving an annual pay15 ment or the use of a vessel under this chapter, a State maritime academy 

16 must—

17 ‘‘(1) provide courses of instruction on navigation, marine engineering 

18 (including steam and diesel propulsion), the operation and maintenance 

19 of new vessels and equipment, and innovations being introduced to the 

20 merchant marine of the United States; 

21 ‘‘(2) agree in writing to conform to the standards for courses, train22 ing facilities, admissions, and instruction that the Secretary of Trans23 portation may establish after consultation with the superintendents of 

24 State maritime academies; and 

25 ‘‘(3) agree in writing to require, as a condition for graduation, that 

26 each individual who is a citizen of the United States and who is attend27 ing the academy in a merchant marine officer preparation program 

28 pass the examination required for the issuance of a license under sec29 tion 7101 of this title. 

30 ‘‘(b) ADDITIONAL CONDITION TO PAYMENTS OF MORE THAN $25,000.—

31 As a condition of receiving an annual payment of more than $25,000 under 

32 section 51505 of this title, a State maritime academy also must agree to 

33 admit each year a number of citizens of the United States who meet its ad34 mission requirements and reside in a State not supporting that academy. 

35 The Secretary shall determine the number of individuals to be admitted by 

36 each academy under this subsection. The number may not be more than 

37 one-third of the total number of individuals attending the academy at any 

38 time. 

39 ‘‘§ 51507. Places of training 

40 ‘‘The Secretary of Transportation may provide for the training of stu41 dents attending a State maritime academy—
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1 ‘‘(1) on vessels owned or subsidized by the United States Govern2 ment; 

3 ‘‘(2) on other documented vessels, with the permission of the owner; 

4 and 

5 ‘‘(3) in shipyards or plants and with industrial or educational organi6 zations. 

7 ‘‘§ 51508. Allowances for students 

8 ‘‘Under regulations prescribed by the Secretary of Transportation, a stu9 dent at a State maritime academy shall receive from the Secretary allow10 ances for transportation (including reimbursement of traveling expenses) 

11 when traveling under orders to receive training under section 51507 of this 

12 title. 

13 ‘‘§ 51509. Student incentive payment agreements 

14 ‘‘(a) GENERAL AUTHORITY.—If a State maritime academy has an agree15 ment with the Secretary of Transportation under section 51505 of this title, 

16 the Secretary may make an agreement with a student at the academy who 

17 is a citizen of the United States to make student incentive payments to the 

18 individual. An agreement with a student may not be effective for more than 

19 4 academic years. The Secretary shall allocate payments under this section 

20 among the various State maritime academies in an equitable manner. 

21 ‘‘(b) PAYMENTS.—Payments under an agreement under this section shall 

22 be equal to $4,000 each academic year and be paid, as prescribed by the

23 Secretary, while the individual is attending the academy. The payments 

24 shall be used for uniforms, books, and subsistence. 

25 ‘‘(c) MIDSHIPMAN AND ENLISTED RESERVE STATUS.—An agreement 

26 under this section shall require the student to accept midshipman and en27 listed reserve status in the Naval Reserve (including the Merchant Marine 

28 Reserve, Naval Reserve) before receiving any payments under the agree29 ment. 

30 ‘‘(d) AGREEMENT REQUIREMENTS.—An agreement under this section 

31 shall require the student to—

32 ‘‘(1) complete the course of instruction at the academy the individual 

33 is attending; 

34 ‘‘(2) take the examination for a license as an officer in the merchant 

35 marine of the United States before graduation from the academy and 

36 fulfill the requirements for such a license within 3 months after grad37 uation from the academy; 

38 ‘‘(3) maintain a valid license as an officer in the merchant marine 

39 of the United States for at least 6 years after graduation from the 

40 academy, accompanied by the appropriate national and international 
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1 endorsements and certification required by the Coast Guard for service 

2 aboard vessels on domestic and international voyages; 

3 ‘‘(4) accept, if tendered, an appointment as a commissioned officer 

4 in the Naval Reserve (including the Merchant Marine Reserve, Naval 

5 Reserve), the Coast Guard Reserve, or any other reserve unit of an 

6 armed force of the United States, and, if tendered the appointment, to 

7 serve for at least 6 years after graduation from the academy; 

8 ‘‘(5) serve the foreign and domestic commerce and the national de9 fense of the United States for at least 3 years after graduation from 

10 the academy—

11 ‘‘(A) as a merchant marine officer on a documented vessel or 

12 a vessel owned and operated by the United States Government or 

13 by a State; 

14 ‘‘(B) as an employee in a United States maritime-related indus15 try, profession, or marine science (as determined by the Sec16 retary), if the Secretary determines that service under subclause 

17 (A) is not available to the individual; 

18 ‘‘(C) as a commissioned officer on active duty in an armed force 

19 of the United States, as a commissioned officer in the National 

20 Oceanic and Atmospheric Administration, or in other maritime-re21 lated Federal employment which serves the national security inter22 ests of the United States, as determined by the Secretary; or 

23 ‘‘(D) by a combination of the service alternatives referred to in 

24 subclauses (A)–(C); and 

25 ‘‘(6) report to the Secretary on compliance with clauses (1)–(5). 

26 ‘‘(e) FAILURE TO COMPLETE COURSE OF INSTRUCTION.—

27 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

28 that an individual who has accepted the payments described in sub29 section (b) for a minimum of 2 academic years has failed to fulfill the 

30 part of the agreement described in subsection (d)(1), the individual 

31 may be ordered by the Secretary of Defense to serve on active duty 

32 in the armed forces of the United States for a period of not more than 

33 2 years. In cases of hardship as determined by the Secretary of Trans34 portation, the Secretary of Transportation may waive this paragraph 

35 in whole or in part. 

36 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

37 unwilling to order an individual to serve on active duty under para38 graph (1), or if the Secretary of Transportation determines that reim39 bursement of the cost of education provided would better serve the in40 terests of the United States, the Secretary of Transportation may re41 cover from the individual the amount of student incentive payments, 
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1 plus interest and attorney fees. The Secretary may reduce the amount 

2 to be recovered to reflect partial performance of service obligations and 

3 other factors the Secretary determines merit a reduction. 

4 ‘‘(f) FAILURE TO CARRY OUT OTHER REQUIREMENTS.—

5 ‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation determines 

6 that an individual has failed to fulfill any part of the agreement de7 scribed in subsection (d)(2)–(6), the individual may be ordered to serve 

8 on active duty for a period of at least 2 years but not more than the 

9 unexpired period (as determined by the Secretary) of the service re10 quired by subsection (d)(5). The Secretary of Transportation, in con11 sultation with the Secretary of Defense, shall determine in which serv12 ice the individual shall serve. In cases of hardship as determined by 

13 the Secretary of Transportation, the Secretary of Transportation may 

14 waive this paragraph in whole or in part. 

15 ‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is unable or 

16 unwilling to order an individual to serve on active duty under para17 graph (1), or if the Secretary of Transportation determines that reim18 bursement of the cost of education provided would better serve the in19 terests of the United States, the Secretary of Transportation may re20 cover from the individual the amount of student incentive payments, 

21 plus interest and attorney fees. The Secretary may reduce the amount 

22 to be recovered to reflect partial performance of service obligations and 

23 other factors the Secretary determines merit a reduction. 

24 ‘‘(g) ACTIONS TO RECOVER COST.—To aid in the recovery of the cost 

25 of education provided by the Government under a commitment agreement 

26 under this section, the Secretary of Transportation may—

27 ‘‘(1) request the Attorney General to bring a civil action against the 

28 individual; and 

29 ‘‘(2) make use of the Federal debt collection procedures in chapter 

30 176 of title 28 or other applicable administrative remedies. 

31 ‘‘§ 51510. Deferment of service obligation under student in32 centive payment agreements 

33 ‘‘The Secretary of Transportation may defer the service commitment of 

34 an individual under section 51509(d)(5) of this title (as specified in the 

35 agreement under section 51509) for not more than 2 years if the individual 

36 is engaged in a graduate course of study approved by the Secretary. How37 ever, deferment of service as a commissioned officer on active duty must be 

38 approved by the Secretary of the affected military department (or the Sec39 retary of Commerce, for service with the National Oceanic and Atmospheric 

40 Administration). 
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1 ‘‘§ 51511. Midshipman status in the Naval Reserve 

2 ‘‘A citizen of the United States attending a State maritime academy may 

3 be appointed by the Secretary of the Navy as a midshipman in the Naval 

4 Reserve (including the Merchant Marine Reserve, Naval Reserve). 

5 ‘‘CHAPTER 517—OTHER SUPPORT FOR MERCHANT 

6 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.

7 ‘‘§ 51701. United States Maritime Service 

8 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may es9 tablish and maintain a voluntary organization, to be known as the United 

10 States Maritime Service, for the training of citizens of the United States 

11 to serve on merchant vessels of the United States. 

12 ‘‘(b) SPECIFIC AUTHORITY.—The Secretary may—

13 ‘‘(1) determine the number of individuals to be enrolled for training 

14 and reserve purposes in the Service; 

15 ‘‘(2) fix the rates of pay and allowances of the individuals without 

16 regard to chapter 51 or subchapter III of chapter 53 of title 5; 

17 ‘‘(3) prescribe the course of study and the periods of training for the 

18 Service; and

19 ‘‘(4) prescribe the uniform of the Service and the rules on providing 

20 and wearing the uniform. 

21 ‘‘(c) RANKS, GRADES, AND RATINGS.—The ranks, grades, and ratings for 

22 personnel of the Service shall be the same as those prescribed for personnel 

23 of the Coast Guard. 

24 ‘‘(d) MEDALS AND AWARDS.—The Secretary may establish and maintain 

25 a medals and awards program to recognize distinguished service, superior 

26 achievement, professional performance, and other commendable achievement 

27 by personnel of the Service. 

28 ‘‘§ 51702. Civilian nautical schools 

29 ‘‘(a) DEFINITION.—In this section, the term ‘civilian nautical school’ 

30 means a school operated in the United States (except the United States 

31 Merchant Marine Academy, a State maritime academy, or another school 

32 operated by the United States Government) that offers instruction to indi33 viduals quartered on a vessel primarily to train them for service in the mer34 chant marine. 

35 ‘‘(b) INSPECTION.—Each civilian nautical school is subject to inspection 

36 by the Secretary of Transportation. 

37 ‘‘(c) RATING AND CERTIFICATION.—The Secretary may, under regula38 tions the Secretary may prescribe, provide for the rating and certification 
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1 of civilian nautical schools as to the adequacy of their course of instruction, 

2 the competence of their instructors, and the suitability of the equipment 

3 used in their course of instruction. 

4 ‘‘§ 51703. Additional training 

5 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may pro6 vide additional training on maritime subjects to supplement other training 

7 opportunities and make the training available to the personnel of the mer8 chant marine of the United States and individuals preparing for a career 

9 in the merchant marine of the United States. 

10 ‘‘(b) EQUIPMENT, SUPPLIES, AND CONTRACTS.—The Secretary may—

11 ‘‘(1) prepare or buy equipment or supplies required for the additional 

12 training; and 

13 ‘‘(2) without regard to section 3709 of the Revised Statutes (41 

14 U.S.C. 5), make contracts for services the Secretary considers nec15 essary to prepare the equipment and supplies and to supervise and ad16 minister the additional training. 

17 ‘‘§ 51704. Training for maritime oil pollution prevention, re18 sponse, and clean-up 

19 ‘‘(a) ASSISTANCE IN ESTABLISHING PROGRAM.—The Secretary of Trans20 portation shall assist maritime training institutions approved by the Sec21 retary in establishing a training program for maritime oil pollution preven22 tion, response, and clean-up. 

23 ‘‘(b) PROVIDING TRAINING VESSELS.—Subject to subsection (c), the Sec24 retary may provide, with title free of all liens, to maritime training institu25 tions that have a program established under subsection (a), offshore supply 

26 vessels and tug/supply vessels that were built in the United States and are 

27 in the possession of the Maritime Administration because of a default on 

28 a loan guaranteed under chapter 537 of this title. 

29 ‘‘(c) REQUIREMENTS.—In addition to any other requirements the Sec30 retary considers appropriate, the following requirements apply to vessels 

31 provided under this section: 

32 ‘‘(1) The vessel shall be offered to the institution at a location se33 lected by the Secretary. 

34 ‘‘(2) The institution shall use the vessel to train students and appro35 priate maritime industry personnel in oil spill prevention, response, 

36 clean-up, and related skills. 

37 ‘‘(3) The institution shall make the vessel and qualified students 

38 available to appropriate Federal, State, and local oil spill response au39 thorities when there is a maritime oil spill. 
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1 ‘‘(4) The institution may not sell, trade, charter, donate, scrap, or 

2 in any way alter or dispose of the vessel without prior approval of the 

3 Secretary. 

4 ‘‘(5) The institution may not use the vessel in competition with a 

5 privately-owned vessel documented under chapter 121 of this title or 

6 titled under the law of a State, unless necessary to carry out this sec7 tion. 

8 ‘‘(6) When the institution can no longer use the vessel for its train9 ing program, the institution shall return the vessel to the Secretary. 

10 The Secretary shall take possession at the institution and thereafter 

11 may provide the vessel to another institution under this section or dis12 pose of the vessel. 

13 ‘‘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.

14 ‘‘§ 51901. Awards for individual acts or service 

15 ‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation may 

16 award decorations and medals of appropriate design (including ribbons, rib17 bon bars, emblems, rosettes, miniature facsimiles, plaques, citations, or 

18 other suitable devices or insignia) for individual acts or service in the mer19 chant marine of the United States. The design may be similar to the design 

20 of a decoration or medal authorized for members of the armed forces for 

21 similar acts or service. 

22 ‘‘(b) SPECIFIC AUTHORITY.—The Secretary may award—

23 ‘‘(1) a Merchant Marine Distinguished Service Medal to an indi24 vidual for outstanding acts, conduct, or valor beyond the line of duty; 

25 ‘‘(2) a Merchant Marine Meritorious Service Medal to an individual 

26 for meritorious acts, conduct, or valor in the line of duty, but not of 

27 the outstanding character that would warrant the award of the Mer28 chant Marine Distinguished Service Medal; 

29 ‘‘(3) a decoration or medal to an individual for service during a war, 

30 national emergency proclaimed by the President or Congress, or oper31 ations by the armed forces outside the continental United States under 

32 conditions of danger to life and property; and 

33 ‘‘(4) a decoration or medal to an individual for other acts or service 

34 of conspicuous gallantry, intrepidity, and extraordinary heroism under 
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1 conditions of danger to life and property that would warrant a similar 

2 decoration or medal for a member of the armed forces. 

3 ‘‘§ 51902. Gallant Ship Award 

4 ‘‘(a) AWARDS TO VESSELS.—The Secretary of Transportation may award 

5 a Gallant Ship Award and a citation to a vessel (including a foreign vessel) 

6 participating in outstanding or gallant action in a marine disaster or other 

7 emergency to save life or property at sea. The Secretary may award a 

8 plaque to the vessel, and a replica of the plaque may be preserved as a per9 manent historical record. 

10 ‘‘(b) AWARDS TO CREWS.—The Secretary of Transportation may award 

11 an appropriate citation ribbon bar to the master and each individual serv12 ing, at the time of the action, on a vessel issued an award under subsection 

13 (a). 

14 ‘‘(c) CONSULTATION.—The Secretary of Transportation shall consult with 

15 the Secretary of State before awarding an award or citation to a foreign 

16 vessel or its crew under this section. 

17 ‘‘§ 51903. Multiple awards 

18 ‘‘An individual may not be awarded more than one of any type of decora19 tion or medal under this chapter. For each succeeding act or service justi20 fying the same decoration or medal, a suitable device may be awarded to 

21 be worn with the decoration or medal.

22 ‘‘§ 51904. Presentation to representatives 

23 ‘‘If an individual to be issued an award under this chapter is unable to 

24 accept the award personally, the Secretary of Transportation may present 

25 the award to an appropriate representative. 

26 ‘‘§ 51905. Flags and grave markers 

27 ‘‘Except as authorized under another law, the Secretary of Transpor28 tation may issue, at no cost, a flag of the United States and a grave marker 

29 to the family or personal representative of a deceased individual who served 

30 in the merchant marine of the United States in support of the armed forces 

31 of the United States or its allies during a war or national emergency. 

32 ‘‘§ 51906. Special certificates for civilian service to armed 

33 forces 

34 ‘‘(a) GENERAL AUTHORITY.—The Maritime Administrator may issue a 

35 special certificate to an individual, or the personal representative of an indi36 vidual, in recognition of service of that individual in the merchant marine 

37 of the United States, if the service has been determined to be active duty 

38 under section 401 of the GI Bill Improvement Act of 1977 (Public Law 95–

39 202; 38 U.S.C. 106 note). 
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1 ‘‘(b) RELATIONSHIP TO OTHER LAWS.—Issuance of a certificate under 

2 subsection (a) does not entitle an individual to any rights, privileges, or ben3 efits under a law of the United States. 

4 ‘‘§ 51907. Manufacture and sale of awards and replacements 

5 ‘‘The Secretary of Transportation may—

6 ‘‘(1) authorize private persons to manufacture decorations and med7 als authorized under this chapter or a prior law; and 

8 ‘‘(2) provide at cost, or authorize private persons to sell at reason9 able prices, replacements for those decorations and medals. 

10 ‘‘§ 51908. Prohibition against unauthorized manufacture, 

11 sale, possession, or display of awards 

12 ‘‘(a) PROHIBITION.—Except as authorized under this chapter, a person 

13 may not manufacture, sell, possess, or display a decoration or medal pro14 vided for in this chapter. 

15 ‘‘(b) CIVIL PENALTY.—A person violating this section is liable to the 

16 United States Government for a civil penalty of not more than $2,000. 

17 ‘‘CHAPTER 521—MISCELLANEOUS

‘‘Sec. 

‘‘52101. Reemployment rights for certain merchant seamen.

18 ‘‘§ 52101. Reemployment rights for certain merchant seamen 

19 ‘‘(a) IN GENERAL.—An individual who is certified by the Secretary of 

20 Transportation under subsection (c) shall be entitled to reemployment rights 

21 and other benefits substantially equivalent to the rights and benefits pro22 vided for by chapter 43 of title 38 for any member of a reserve component 

23 of the armed forces of the United States who is ordered to active duty. 

24 ‘‘(b) TIME FOR APPLICATION.—An individual may submit an application 

25 for certification under subsection (c) to the Secretary not later than 45 days 

26 after the date the individual completes a period of employment described in 

27 subsection (c)(1)(A) with respect to which the application is submitted. 

28 ‘‘(c) CERTIFICATION DETERMINATION.—Not later than 20 days after the 

29 date the Secretary receives from an individual an application for certifi30 cation under this subsection, the Secretary shall—

31 ‘‘(1) determine whether the individual—

32 ‘‘(A) was employed in the activation or operation of a vessel—

33 ‘‘(i) in the National Defense Reserve Fleet maintained 

34 under section 11 of the Merchant Ship Sales Act of 1946 (50 

35 App. U.S.C. 1744) in a period in which the vessel was in use 

36 or being activated for use under subsection (b) of that sec37 tion; 

38 ‘‘(ii) requisitioned or purchased under chapter 563 of this 

39 title; or 
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1 ‘‘(iii) owned, chartered, or controlled by the United States 

2 Government and used by the Government for a war, armed 

3 conflict, national emergency, or maritime mobilization need 

4 (including for training purposes or testing for readiness and 

5 suitability for mission performance); and 

6 ‘‘(B) during the period of that employment, possessed a valid 

7 license, certificate of registry, or merchant mariner’s document 

8 issued under chapter 71 or 73 of this title; and 

9 ‘‘(2) if the Secretary makes affirmative determinations under para10 graph (1)(A) and (B), certify that individual under this subsection. 

11 ‘‘(d) EQUIVALENCE TO MILITARY SELECTIVE SERVICE ACT CERTIFI12 CATE.—For purposes of reemployment rights and benefits provided by this 

13 section, a certification under subsection (c) shall be considered to be the 

14 equivalent of a certificate described in section 9(a) of the Military Selective 

15 Service Act (50 App. U.S.C. 459(a)).

16 ‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS’’. 

17 (d) CHAPTERS FOLLOWING CHAPTER 531.—Subtitle V of title 46, United 

18 States Code, is amended by adding at the end the following:

19 ‘‘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.

20 ‘‘§ 53301. Definitions 

21 ‘‘(a) IN GENERAL.—In this chapter: 

22 ‘‘(1) CONSTRUCTION CONTRACT.—The term ‘construction contract’ 

23 includes, for a taxpayer constructing a new vessel in a shipyard owned 

24 by that taxpayer, an agreement between the taxpayer and the Secretary 

25 of Transportation for that construction containing provisions the Sec26 retary considers advisable to carry out this chapter. 

27 ‘‘(2) NEW VESSEL.—The term ‘new vessel’ means—

28 ‘‘(A) a vessel—

29 ‘‘(i) constructed in the United States after December 31, 

30 1939, constructed with a construction-differential subsidy 

31 under title V of the Merchant Marine Act, 1936, or con32 structed with financing or a financing guarantee under chap33 ter 537 or 575 of this title; 
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1 ‘‘(ii) documented or agreed with the Secretary to be docu2 mented under the laws of the United States; and 

3 ‘‘(iii)(I) of a type, size, and speed that the Secretary deter4 mines is suitable for use on the high seas or Great Lakes in 

5 carrying out this subtitle, but not less than 2,000 gross tons 

6 or less than 12 knots speed unless the Secretary certifies in 

7 each case that a vessel of lesser tonnage or speed is desirable 

8 for use by the United States Government in case of war or 

9 national emergency; or 

10 ‘‘(II) constructed to replace a vessel bought or requisitioned 

11 by the Government; and 

12 ‘‘(B) a vessel reconstructed or reconditioned for use only on the 

13 Great Lakes, including the Saint Lawrence River and Gulf, if the 

14 Secretary finds that the reconstruction or reconditioning will pro15 mote the objectives of this subtitle. 

16 ‘‘(b) ADDITIONAL TAX-RELATED TERMS.—Other terms used in this 

17 chapter have the same meaning as in chapter 1 of the Internal Revenue 

18 Code of 1986 (26 U.S.C. ch. 1). 

19 ‘‘§ 53302. Authority for construction reserve funds 

20 ‘‘(a) GENERAL AUTHORITY.—An eligible person under section 53303 of 

21 this title may establish a construction reserve fund for the construction, re22 construction, reconditioning, or acquisition of a new vessel or for other pur23 poses authorized by this chapter. 

24 ‘‘(b) APPLICATION OF CERTAIN LAWS AND REGULATIONS.—The fund 

25 shall be established, maintained, expended, and used as provided by this 

26 chapter and regulations prescribed jointly by the Secretary of Transpor27 tation and the Secretary of the Treasury. 

28 ‘‘§ 53303. Persons eligible to establish funds 

29 ‘‘A construction reserve fund may be established by a citizen of the 

30 United States that—

31 ‘‘(1) is operating a vessel in the foreign or domestic commerce of the 

32 United States or in the fisheries; 

33 ‘‘(2) owns, in whole or in part, a vessel being operated in the foreign 

34 or domestic commerce of the United States or in the fisheries; 

35 ‘‘(3) was operating a vessel in the foreign or domestic commerce of 

36 the United States or in the fisheries when it was bought or requi37 sitioned by the United States Government; 

38 ‘‘(4) owned, in whole or in part, a vessel being operated in the for39 eign or domestic commerce of the United States or in the fisheries 

40 when it was bought or requisitioned by the Government; or 
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1 ‘‘(5) had acquired or was having constructed a vessel to operate in 

2 the foreign or domestic commerce of the United States or in the fish3 eries when it was bought or requisitioned by the Government. 

4 ‘‘§ 53304. Vessel ownership 

5 ‘‘In this chapter, a vessel is deemed to be constructed or acquired by a 

6 taxpayer if constructed or acquired by a corporation when the taxpayer 

7 owns at least 95 percent of each class of stock of the corporation. 

8 ‘‘§ 53305. Eligible fund deposits 

9 ‘‘A construction reserve fund may include deposits of—

10 ‘‘(1) the proceeds from the sale of a vessel; 

11 ‘‘(2) indemnities for the loss of a vessel; 

12 ‘‘(3) earnings from the operation of a documented vessel and from 

13 services incident to the operation; and 

14 ‘‘(4) interest or other amounts accrued on deposits in the fund. 

15 ‘‘§ 53306. Recognition of gain for tax purposes 

16 ‘‘(a) DEFINITIONS.—In this section, the terms ‘net proceeds’ and ‘net in17 demnity’ mean the sum of—

18 ‘‘(1) the adjusted basis of the vessel; and 

19 ‘‘(2) the amount of gain the taxpayer would recognize without regard 

20 to this section. 

21 ‘‘(b) RECOGNITION OF GAIN.—In computing net income under the income 

22 or excess profits tax laws of the United States, a taxpayer does not recog23 nize a gain on the sale or the actual or constructive total loss of a vessel 

24 if the taxpayer—

25 ‘‘(1) deposits an amount equal to the net proceeds of the sale or the 

26 net indemnity for the loss in a construction reserve fund within 60 days 

27 after receiving the payment of proceeds or indemnity; and 

28 ‘‘(2) elects under this section not to recognize the gain. 

29 ‘‘(c) WHEN ELECTION MUST BE MADE.—

30 ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the tax31 payer must make the election referred to in subsection (b) in the tax32 payer’s income tax return for the taxable year in which the gain was 

33 realized. 

34 ‘‘(2) RECEIPT AFTER TAXABLE YEAR.—If the vessel is bought or 

35 requisitioned by the United States Government, or is lost, and the tax36 payer receives payment for the vessel or indemnity for the loss from 

37 the Government after the end of the taxable year in which it was 

38 bought, requisitioned, or lost, the taxpayer must make the election re39 ferred to in subsection (b) within 60 days after receiving the payment 

40 or indemnity, on a form prescribed by the Secretary of the Treasury. 
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1 ‘‘(d) EFFECT OF STATUTE OF LIMITATION.—If the taxpayer makes an 

2 election under subsection (c)(2), and computation or recomputation under 

3 this section is otherwise allowable but is prevented by a statute of limitation 

4 on the date the election is made or within 6 months thereafter, the com5 putation or recomputation nevertheless shall be made notwithstanding the 

6 statute if the taxpayer files a claim for the computation or recomputation 

7 within 6 months after the date of making the election. 

8 ‘‘§ 53307. Basis for determining gain or loss and for depre9 ciating new vessels 

10 ‘‘Under the income or excess profits tax laws of the United States, the 

11 basis for determining a gain or loss and for depreciation of a new vessel 

12 constructed, reconstructed, reconditioned, or acquired by the taxpayer, or 

13 for which purchase-money indebtedness is liquidated as provided in section 

14 53310 of this title, with amounts from a construction reserve fund, shall 

15 be reduced by that part of the deposits in the fund expended in the con16 struction, reconstruction, reconditioning, acquisition, or liquidation of pur17 chase-money indebtedness of the new vessel that represents a gain not rec18 ognized for tax purposes under section 53306 of this title. 

19 ‘‘§ 53308. Order and proportions of deposits and with20 drawals 

21 ‘‘In this chapter—

22 ‘‘(1) if the net proceeds of a sale or the net indemnity for a loss is 

23 deposited in more than one deposit, the amount consisting of the gain 

24 shall be deemed to be deposited first; 

25 ‘‘(2) amounts expended, obligated, or otherwise withdrawn shall be 

26 applied against the amounts deposited in the fund in the order of de27 posit; and 

28 ‘‘(3) if a deposit consists in part of a gain not recognized under sec29 tion 53306 of this title, any expenditure, obligation, or withdrawal ap30 plied against that deposit shall be deemed to be a gain in the propor31 tion that the part of the deposit consisting of a gain bears to the total 

32 amount of the deposit. 

33 ‘‘§ 53309. Accumulation of deposits 

34 ‘‘For any taxable year, amounts on deposit in a construction reserve fund 

35 on the last day of the taxable year, for which the requirements of section 

36 53310 of this title have been satisfied (to the extent they apply on the last 

37 day of the taxable year), are deemed to have been retained for the reason38 able needs of the business within the meaning of section 537(a) of the Inter39 nal Revenue Code of 1986 (26 U.S.C. 537(a)). 
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1 ‘‘§ 53310. Obligation of deposits and period for construction 

2 of certain vessels 

3 ‘‘(a) APPLICATION OF SECTIONS 53306 AND 53309.—Sections 53306 and 

4 53309 of this title apply to a deposit in a construction reserve fund only 

5 if, within 3 years after the date of the deposit (and any extension under 

6 subsection (c))—

7 ‘‘(1)(A) a contract is made for the construction or acquisition of a 

8 new vessel or, with the approval of the Secretary of Transportation, for 

9 a part interest in a new vessel or for the reconstruction or recondi10 tioning of a new vessel; 

11 ‘‘(B) the deposit is expended or obligated for expenditure under that 

12 contract; 

13 ‘‘(C) at least 12.5 percent of the construction or contract price of 

14 the vessel is paid or irrevocably committed for payment; and 

15 ‘‘(D) the plans and specifications for the vessel are approved by the 

16 Secretary to the extent the Secretary considers necessary; or 

17 ‘‘(2) the deposit is expended or obligated for expenditure for the liq18 uidation of existing or subsequently incurred purchase-money indebted19 ness to a person not a parent company of, or a company affiliated or 

20 associated with, the mortgagor on a new vessel. 

21 ‘‘(b) ADDITIONAL REQUIREMENTS FOR CERTAIN VESSELS.—In addition 

22 to the requirements of subsection (a)(1), for a vessel not constructed under

23 a construction-differential subsidy contract or not bought from the Sec24 retary of Transportation—

25 ‘‘(1) at least 5 percent of the construction (or, if the contract covers 

26 more than one vessel, at least 5 percent of the construction of the first 

27 vessel) must be completed within 6 months after the date of the con28 struction contract (or within the period of an extension under sub29 section (c)), as estimated by the Secretary and certified by the Sec30 retary to the Secretary of the Treasury; and 

31 ‘‘(2) construction under the contract must be completed with reason32 able dispatch thereafter. 

33 ‘‘(c) EXTENSIONS.—The Secretary of Transportation may grant exten34 sions of the period within which the deposits must be expended or obligated 

35 or within which the construction must have progressed to the extent of 5 

36 percent completion under this section. However, the extensions may not be 

37 for a total of more than 2 years for the expenditure or obligation of deposits 

38 or one year for the progress of construction. 

39 ‘‘§ 53311. Taxation of deposits on failure of conditions 

40 ‘‘A deposited gain, if otherwise taxable income under the law applicable 

41 to the taxable year in which the gain was realized, shall be included in gross 
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1 income for that taxable year, except for purposes of the declared value ex2 cess profits tax and the capital stock tax, if—

3 ‘‘(1) the deposited gain is not expended or obligated within the ap4 propriate period under section 53310 of this title; 

5 ‘‘(2) the deposited gain is withdrawn before the end of that period; 

6 ‘‘(3) the construction related to that deposited gain has not pro7 gressed to the extent of 5 percent of completion within the appropriate 

8 period under section 53310 of this title; or 

9 ‘‘(4) the Secretary of Transportation finds and certifies to the Sec10 retary of the Treasury that, for causes within the control of the tax11 payer, the entire construction related to that deposited gain is not com12 pleted with reasonable dispatch. 

13 ‘‘§ 53312. Assessment and collection of deficiency tax 

14 ‘‘A deficiency in tax for a taxable year resulting from the inclusion of an 

15 amount in gross income as provided by section 53311 of this title, and the 

16 amount to be treated as a deficiency under section 53311 instead of as an 

17 adjustment for the declared value excess profits tax, may be assessed or a 

18 civil action may be brought to collect the deficiency without assessment, at 

19 any time. Interest on a deficiency or amount to be treated as a deficiency 

20 does not begin until the date the deposited gain or part of the deposited 

21 gain in question is required to be included in gross income under section 

22 51111.

23 ‘‘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.

24 ‘‘§ 53501. Definitions 

25 ‘‘In this chapter: 

26 ‘‘(1) AGREEMENT VESSEL.—The term ‘agreement vessel’ means—

27 ‘‘(A) an eligible vessel or a qualified vessel that is subject to an 

28 agreement under this chapter; and 

29 ‘‘(B) a barge or container that is part of the complement of a 

30 vessel described in subclause (A) if provided for in the agreement. 
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1 ‘‘(2) ELIGIBLE VESSEL.—The term ‘eligible vessel’ means—

2 ‘‘(A) a vessel—

3 ‘‘(i) constructed in the United States (and, if recon4 structed, reconstructed in the United States), constructed 

5 outside the United States but documented under the laws of 

6 the United States on April 15, 1970, or constructed outside 

7 the United States for use in the United States foreign trade 

8 pursuant to a contract made before April 15, 1970; 

9 ‘‘(ii) documented under the laws of the United States; and 

10 ‘‘(iii) operated in the foreign or domestic trade of the 

11 United States or in the fisheries of the United States; and 

12 ‘‘(B) a commercial fishing vessel—

13 ‘‘(i) constructed in the United States and, if reconstructed, 

14 reconstructed in the United States; 

15 ‘‘(ii) of at least 2 net tons but less than 5 net tons; 

16 ‘‘(iii) owned by a citizen of the United States; 

17 ‘‘(iv) having its home port in the United States; and 

18 ‘‘(v) operated in the commercial fisheries of the United 

19 States. 

20 ‘‘(3) JOINT REGULATIONS.—The term ‘joint regulations’ means reg21 ulations prescribed jointly by the Secretary and the Secretary of the 

22 Treasury under section 53502(b) of this title. 

23 ‘‘(4) NONCONTIGUOUS TRADE.—The term ‘noncontiguous trade’ 

24 means—

25 ‘‘(A) trade between—

26 ‘‘(i) one of the contiguous 48 States; and 

27 ‘‘(ii) Alaska, Hawaii, Puerto Rico, or an insular territory 

28 or possession of the United States; and 

29 ‘‘(B) trade between—

30 ‘‘(i) a place in Alaska, Hawaii, Puerto Rico, or an insular 

31 territory or possession of the United States; and 

32 ‘‘(ii) another place in Alaska, Hawaii, Puerto Rico, or an 

33 insular territory or possession of the United States. 

34 ‘‘(5) QUALIFIED VESSEL.—The term ‘qualified vessel’ means—

35 ‘‘(A) a vessel—

36 ‘‘(i) constructed in the United States (and, if recon37 structed, reconstructed in the United States), constructed 

38 outside the United States but documented under the laws of 

39 the United States on April 15, 1970, or constructed outside 

40 the United States for use in the United States foreign trade 

41 pursuant to a contract made before April 15, 1970; 
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1 ‘‘(ii) documented under the laws of the United States; and 

2 ‘‘(iii) agreed, between the Secretary and the person main3 taining the capital construction fund established under sec4 tion 53503 of this title, to be operated in the United States 

5 foreign, Great Lakes, or noncontiguous domestic trade or in 

6 the fisheries of the United States; and 

7 ‘‘(B) a commercial fishing vessel—

8 ‘‘(i) constructed in the United States and, if reconstructed, 

9 reconstructed in the United States; 

10 ‘‘(ii) of at least 2 net tons but less than 5 net tons; 

11 ‘‘(iii) owned by a citizen of the United States; 

12 ‘‘(iv) having its home port in the United States; and 

13 ‘‘(v) operated in the commercial fisheries of the United 

14 States. 

15 ‘‘(6) SECRETARY.—The term ‘Secretary’ means—

16 ‘‘(A) the Secretary of Commerce with respect to an eligible ves17 sel or a qualified vessel operated or to be operated in the fisheries 

18 of the United States; and

19 ‘‘(B) the Secretary of Transportation with respect to other ves20 sels. 

21 ‘‘(7) UNITED STATES FOREIGN TRADE.—The term ‘United States 

22 foreign trade’ includes those areas in domestic trade in which a vessel 

23 built with a construction-differential subsidy is allowed to operate 

24 under the first sentence of section 506 of the Merchant Marine Act, 

25 1936. 

26 ‘‘(8) VESSEL.—The term ‘vessel’ includes—

27 ‘‘(A) cargo handling equipment that the Secretary determines is 

28 intended for use primarily on the vessel; and 

29 ‘‘(B) an ocean-going towing vessel, an ocean-going barge, or a 

30 comparable towing vessel or barge operated on the Great Lakes. 

31 ‘‘§ 53502. Regulations 

32 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), the Secretary 

33 shall prescribe regulations to carry out this chapter. 

34 ‘‘(b) TAX LIABILITY.—The Secretary and the Secretary of the Treasury 

35 shall prescribe joint regulations for the determination of tax liability under 

36 this chapter. 

37 ‘‘§ 53503. Establishing a capital construction fund 

38 ‘‘(a) IN GENERAL.—A citizen of the United States owning or leasing an 

39 eligible vessel may make an agreement with the Secretary under this chap40 ter to establish a capital construction fund for the vessel. 
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1 ‘‘(b) ALLOWABLE PURPOSE.—The purpose of the agreement shall be to 

2 provide replacement vessels, additional vessels, or reconstructed vessels, 

3 built in the United States and documented under the laws of the United 

4 States, for operation in the United States foreign, Great Lakes, or non5 contiguous domestic trade or in the fisheries of the United States. 

6 ‘‘§ 53504. Deposits and withdrawals 

7 ‘‘(a) REQUIRED DEPOSITS.—An agreement to establish a capital con8 struction fund shall provide for the deposit in the fund of the amounts 

9 agreed to be appropriate to provide for qualified withdrawals under section 

10 53509 of this title. 

11 ‘‘(b) APPLICABLE REQUIREMENTS.—Deposits in and withdrawals from 

12 the fund are subject to the requirements included in the agreement or pre13 scribed by the Secretary by regulation. However, the Secretary may not re14 quire a person to deposit in the fund for a taxable year more than 50 per15 cent of that portion of the person’s taxable income for that year (as deter16 mined under section 53505(a)(1) of this title) that is attributable to the op17 eration of an agreement vessel. 

18 ‘‘§ 53505. Ceiling on deposits 

19 ‘‘(a) MAXIMUM DEPOSITS.—The amount deposited in a capital construc20 tion fund for a taxable year may not exceed the sum of—

21 ‘‘(1) that portion of the taxable income of the owner or lessee for 

22 the taxable year (computed under chapter 1 of the Internal Revenue 

23 Code of 1986 (26 U.S.C. ch. 1) but without regard to the carryback 

24 of net operating loss or net capital loss or this chapter) that is attrib25 utable to the operation of agreement vessels in the foreign or domestic 

26 trade of the United States or in the fisheries of the United States; 

27 ‘‘(2) the amount allowable as a deduction under section 167 of such 

28 Code (26 U.S.C. 167) for the taxable year for agreement vessels; 

29 ‘‘(3) if the transaction is not taken into account for purposes of 

30 clause (1), the net proceeds (as defined in joint regulations) from the 

31 disposition of an agreement vessel or from insurance or indemnity at32 tributable to an agreement vessel; and 

33 ‘‘(4) the receipts from the investment or reinvestment of amounts 

34 held in the fund. 

35 ‘‘(b) REDUCTIONS FOR LESSEES.—For a lessee, the maximum amount 

36 that may be deposited for an agreement vessel under subsection (a)(2) for 

37 any period shall be reduced by any amount the owner is required or per38 mitted, under the capital construction fund agreement, to deposit for that 

39 period for the vessel under subsection (a)(2). 
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1 ‘‘§ 53506. Investment and fiduciary requirements 

2 ‘‘(a) IN GENERAL.—Amounts in a capital construction fund shall be kept 

3 in the depository specified in the agreement and shall be subject to trustee 

4 and other fiduciary requirements prescribed by the Secretary. Except as 

5 provided in subsection (b), amounts in the fund may be invested only in in6 terest-bearing securities approved by the Secretary. 

7 ‘‘(b) STOCK INVESTMENTS.—

8 ‘‘(1) IN GENERAL.—With the approval of the Secretary, an agreed 

9 percentage (but not more than 60 percent) of the assets of the fund 

10 may be invested in the stock of domestic corporations that—

11 ‘‘(A) is fully listed and registered on an exchange registered 

12 with the Securities and Exchange Commission as a national secu13 rities exchange; and 

14 ‘‘(B) would be acquired by a prudent investor seeking a reason15 able income and the preservation of capital. 

16 ‘‘(2) PREFERRED STOCK.—The preferred stock of a corporation is 

17 deemed to satisfy the requirements of this subsection, even though it 

18 may not be registered and listed because it is nonvoting stock, if the 

19 common stock of the corporation satisfies the requirements and the 

20 preferred stock otherwise would satisfy the requirements. 

21 ‘‘(c) MAINTAINING AGREED PERCENTAGE.—If at any time the fair mar22 ket value of the stock in the fund is more than the agreed percentage of 

23 the assets in the fund, any subsequent investment of amounts deposited in 

24 the fund, and any subsequent withdrawal from the fund, shall be made in 

25 a way that tends to restore the fair market value of the stock to not more 

26 than the agreed percentage. 

27 ‘‘§ 53507. Nontaxation of deposits 

28 ‘‘(a) TAX TREATMENT.—Subject to subsection (b), under the Internal 

29 Revenue Code of 1986 (26 U.S.C. 1 et seq.)—

30 ‘‘(1) taxable income (determined without regard to this chapter and 

31 section 7518 of such Code (26 U.S.C. 7518)) for the taxable year shall 

32 be reduced by the amount deposited for the taxable year out of 

33 amounts referred to in section 53505(a)(1) of this title; 

34 ‘‘(2) a gain from a transaction referred to in section 53505(a)(3) of 

35 this title shall not be taken into account if an amount equal to the net 

36 proceeds (as defined in joint regulations) from the transaction is depos37 ited in the fund; 

38 ‘‘(3) the earnings (including gains and losses) from the investment 

39 and reinvestment of amounts held in the fund shall not be taken into 

40 account; 
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1 ‘‘(4) the earnings and profits of a corporation (within the meaning 

2 of section 316 of such Code (26 U.S.C. 316)) shall be determined with3 out regard to this chapter and section 7518 of such Code (26 U.S.C. 

4 7518); and 

5 ‘‘(5) in applying the tax imposed by section 531 of such Code (26 

6 U.S.C. 531), amounts held in the fund shall not be taken into account. 

7 ‘‘(b) CONDITION.—This section applies to an amount only if the amount 

8 is deposited in the fund under the agreement within the time provided in 

9 joint regulations. 

10 ‘‘§ 53508. Separate accounts within a fund 

11 ‘‘(a) IN GENERAL.—A capital construction fund shall have three ac12 counts: 

13 ‘‘(1) The capital account. 

14 ‘‘(2) The capital gain account. 

15 ‘‘(3) The ordinary income account. 

16 ‘‘(b) CAPITAL ACCOUNT.—The capital account shall consist of—

17 ‘‘(1) amounts referred to in section 53505(a)(2) of this title;

18 ‘‘(2) amounts referred to in section 53505(a)(3) of this title, except 

19 that portion representing a gain not taken into account because of sec20 tion 53507(a)(2) of this title; 

21 ‘‘(3) the percentage applicable under section 243(a)(1) of the Inter22 nal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of any dividend re23 ceived by the fund for which the person maintaining the fund would 

24 be allowed (were it not for section 53507(a)(3) of this title) a deduction 

25 under section 243 of such Code (26 U.S.C. 243); and 

26 ‘‘(4) interest income exempt from taxation under section 103 of such 

27 Code (26 U.S.C. 103). 

28 ‘‘(c) CAPITAL GAIN ACCOUNT.—The capital gain account shall consist 

29 of—

30 ‘‘(1) amounts representing capital gains on assets held for more than 

31 6 months and referred to in section 53505(a)(3) or (4) of this title; 

32 minus 

33 ‘‘(2) amounts representing capital losses on assets held in the fund 

34 for more than 6 months. 

35 ‘‘(d) ORDINARY INCOME ACCOUNT.—The ordinary income account shall 

36 consist of—

37 ‘‘(1) amounts referred to in section 53505(a)(1) of this title; 

38 ‘‘(2)(A) amounts representing capital gains on assets held for not 

39 more than 6 months and referred to in section 53505(a)(3) or (4) of 

40 this title; minus 
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1 ‘‘(B) amounts representing capital losses on assets held in the fund 

2 for not more than 6 months; 

3 ‘‘(3) interest (except tax-exempt interest referred to in subsection 

4 (b)(4)) and other ordinary income (except any dividend referred to in 

5 clause (5)) received on assets held in the fund; 

6 ‘‘(4) ordinary income from a transaction described in section 

7 53505(a)(3) of this title; and 

8 ‘‘(5) that portion of any dividend referred to in subsection (b)(3) not 

9 taken into account under subsection (b)(3). 

10 ‘‘(e) WHEN LOSSES ALLOWED.—Except on termination of a fund, capital 

11 losses referred to in subsection (c) or (d)(2) shall be allowed only as an off12 set to gains referred to in subsection (c) or (d)(2), respectively. 

13 ‘‘§ 53509. Qualified withdrawals 

14 ‘‘(a) IN GENERAL.—Subject to subsection (b), a withdrawal from a cap15 ital construction fund is a qualified withdrawal if it is made under the terms 

16 of the agreement and is for—

17 ‘‘(1) the acquisition, construction, or reconstruction of a qualified 

18 vessel or a barge or container that is part of the complement of a quali19 fied vessel; or 

20 ‘‘(2) the payment of the principal on indebtedness incurred in the 

21 acquisition, construction, or reconstruction of a qualified vessel or a 

22 barge or container that is part of the complement of a qualified vessel. 

23 ‘‘(b) BARGES AND CONTAINERS.—Except as provided in regulations pre24 scribed by the Secretary, subsection (a) applies to a barge or container only 

25 if it is constructed in the United States. 

26 ‘‘(c) TREATMENT AS NONQUALIFIED WITHDRAWAL.—Under joint regula27 tions, if the Secretary determines that a substantial obligation under an 

28 agreement is not being fulfilled, the Secretary, after notice and opportunity 

29 for a hearing to the person maintaining the fund, may treat any amount 

30 in the fund as an amount withdrawn from the fund in a nonqualified with31 drawal. 

32 ‘‘§ 53510. Tax treatment of qualified withdrawals and basis 

33 of property 

34 ‘‘(a) ORDER OF WITHDRAWALS.—A qualified withdrawal from a capital 

35 construction fund shall be treated as made—

36 ‘‘(1) first from the capital account; 

37 ‘‘(2) second from the capital gain account; and 

38 ‘‘(3) third from the ordinary income account. 

39 ‘‘(b) ORDINARY INCOME ACCOUNT WITHDRAWALS.—If a portion of a 

40 qualified withdrawal for a vessel, barge, or container is made from the ordi-
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1 nary income account, the basis of the vessel, barge, or container shall be 

2 reduced by an amount equal to that portion. 

3 ‘‘(c) CAPITAL GAIN ACCOUNT WITHDRAWALS.—If a portion of a qualified 

4 withdrawal for a vessel, barge, or container is made from the capital gain 

5 account, the basis of the vessel, barge, or container shall be reduced by an 

6 amount equal to that portion. 

7 ‘‘(d) WITHDRAWALS TO PAY PRINCIPAL.—If a portion of a qualified 

8 withdrawal to pay the principal on indebtedness is made from the ordinary 

9 income account or the capital gain account, an amount equal to the total 

10 reduction that would be required by subsections (b) and (c) if the with11 drawal were a qualified withdrawal for a purpose described in those sub12 sections shall be applied, in the order provided in joint regulations, to re13 duce the basis of vessels, barges, and containers owned by the person main14 taining the fund. The remaining amount of the withdrawal shall be treated 

15 as a nonqualified withdrawal. 

16 ‘‘(e) GAIN ON PROPERTY WITH REDUCED BASIS.—If property, the basis 

17 of which was reduced under subsection (b), (c), or (d), is disposed of, any 

18 gain realized on the disposition, to the extent it does not exceed the total 

19 reduction in the basis of the property under those subsections, shall be 

20 treated as an amount referred to in section 53511(c)(1) of this title with21 drawn on the date of disposition of the property. Subject to conditions pre22 scribed in joint regulations, this subsection does not apply to a disposition 

23 if there is a redeposit, in an amount determined under joint regulations, 

24 that restores the fund as far as practicable to the position it was in before 

25 the withdrawal. 

26 ‘‘§ 53511. Tax treatment of nonqualified withdrawals 

27 ‘‘(a) IN GENERAL.—Except as provided in section 53513 of this title, a 

28 withdrawal from a fund that is not a qualified withdrawal shall be treated 

29 as a nonqualified withdrawal. 

30 ‘‘(b) ORDER OF WITHDRAWALS.—A nonqualified withdrawal shall be 

31 treated as made—

32 ‘‘(1) first from the ordinary income account; 

33 ‘‘(2) second from the capital gain account; and 

34 ‘‘(3) third from the capital account. 

35 ‘‘(c) TAX TREATMENT.—For purposes of the Internal Revenue Code of 

36 1986 (26 U.S.C. 1 et seq.)—

37 ‘‘(1) a nonqualified withdrawal from the ordinary income account 

38 shall be included in income as an item of ordinary income for the tax39 able year in which the withdrawal is made; 

40 ‘‘(2) a nonqualified withdrawal from the capital gain account shall 

41 be included in income for the taxable year in which the withdrawal is 
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1 made as an item of gain realized during that year from the disposition 

2 of an asset held for more than 6 months; and 

3 ‘‘(3) for the period through the last date prescribed for payment of 

4 tax for the taxable year in which the withdrawal is made—

5 ‘‘(A) no interest shall be payable under section 6601 of such 

6 Code (26 U.S.C. 6601) and no addition to the tax shall be payable 

7 under section 6651 of such Code (26 U.S.C. 6651); 

8 ‘‘(B) interest on the amount of the additional tax attributable 

9 to an amount treated as a nonqualified withdrawal from the ordi10 nary income account or the capital gain account shall be paid at 

11 the rate determined under subsection (d) from the last date pre12 scribed for payment of the tax for the taxable year for which the 

13 amount was deposited in the fund; and 

14 ‘‘(C) no interest shall be payable on amounts treated as with15 drawn on a last-in-first-out basis under section 53512 of this title. 

16 ‘‘(d) INTEREST RATE.—The rate of interest under subsection (c)(3)(B) 

17 for a nonqualified withdrawal made in a taxable year beginning after 1971

18 shall be determined and published jointly by the Secretary and the Secretary 

19 of the Treasury. The rate shall be such that its relationship to 8 percent 

20 is comparable, as determined by the Secretaries under joint regulations, to 

21 the relationship between—

22 ‘‘(1) the money rates and investment yields for the calendar year im23 mediately before the beginning of the taxable year; and 

24 ‘‘(2) the money rates and investment yields for the calendar year 

25 1970. 

26 ‘‘(e) NONQUALIFIED WITHDRAWALS.—

27 ‘‘(1) IN GENERAL.—The following applicable percentage of any 

28 amount that remains in a capital construction fund at the close of the 

29 following specified taxable year following the taxable year for which the 

30 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.

31 ‘‘(2) EARNINGS.—The earnings of a capital construction fund for 

32 any taxable year (except net gains) shall be treated under this sub33 section as an amount deposited for the taxable year. 

34 ‘‘(3) CONTRACT FOR QUALIFIED WITHDRAWAL.—Under paragraph 

35 (1), an amount shall not be treated as remaining in a capital construc36 tion fund at the close of a taxable year to the extent there is a binding 
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1 contract at the close of the taxable year for a qualified withdrawal of 

2 the amount for an identified item for which the withdrawal may be 

3 made. 

4 ‘‘(4) EXCESS EARNINGS.—If the Secretary determines that the bal5 ance in a capital construction fund exceeds the amount appropriate to 

6 meet the vessel construction program objectives of the person that es7 tablished the fund, the amount of the excess shall be treated as a non8 qualified withdrawal under paragraph (1) unless the person develops 

9 appropriate program objectives within 3 years to dissipate the excess. 

10 ‘‘(5) AMOUNTS IN FUND ON JANUARY 1, 1987.—Under this sub11 section, amounts in a capital construction fund on January 1, 1987, 

12 shall be treated as having been deposited in that fund on that date. 

13 ‘‘(f) TAX DETERMINATIONS.—

14 ‘‘(1) IN GENERAL.—For a taxable year for which there is a non15 qualified withdrawal (including an amount treated as a nonqualified 

16 withdrawal under subsection (e)), the tax imposed by chapter 1 of the 

17 Internal Revenue Code of 1986 (26 U.S.C. ch. 1) shall be determined 

18 by—

19 ‘‘(A) excluding the withdrawal from gross income; and 

20 ‘‘(B) increasing the tax imposed by chapter 1 of such Code by 

21 the product of the amount of the withdrawal and the highest tax 

22 rate specified in section 1 (or section 11 for a corporation) of such 

23 Code (26 U.S.C. 1, 11). 

24 ‘‘(2) MAXIMUM TAX RATE.—For that portion of a nonqualified with25 drawal made from the capital gain account during a taxable year to 

26 which section 1(h) or 1201(a) of such Code (26 U.S.C. 1(h), 1201(a)) 

27 applies, the tax rate used under subparagraph (A)(ii) may not exceed 

28 15 percent (or 34 percent for a corporation). 

29 ‘‘(3) TAX BENEFIT RULE.—If any portion of a nonqualified with30 drawal is properly attributable to deposits (except earnings on deposits) 

31 made by the taxpayer in a taxable year that did not reduce the tax32 payer’s liability for tax under chapter 1 of such Code (26 U.S.C. ch. 

33 1) for a taxable year before the taxable year in which the withdrawal 

34 occurs—

35 ‘‘(A) that portion shall not be taken into account under para36 graph (1); and 

37 ‘‘(B) an amount equal to that portion shall be allowed as a de38 duction under section 172 of such Code (26 U.S.C. 172) for the 

39 taxable year in which the withdrawal occurs. 

40 ‘‘(4) COORDINATION WITH DEDUCTION FOR NET OPERATING

41 LOSSES.—A nonqualified withdrawal excluded from gross income under 
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1 paragraph (1) shall be excluded in determining taxable income under 

2 section 172(b)(2) of such Code (26 U.S.C. 172(b)(2)). 

3 ‘‘§ 53512. FIFO and LIFO withdrawals 

4 ‘‘(a) FIFO.—Except as provided in subsection (b), an amount withdrawn 

5 from an account under this chapter shall be treated as withdrawn on a first6 in-first-out basis. 

7 ‘‘(b) LIFO.—An amount withdrawn from an account under this chapter 

8 shall be treated as withdrawn on a last-in-first-out basis if it is—

9 ‘‘(1) a nonqualified withdrawal for research, development, and design 

10 expenses incident to new and advanced vessel design, machinery, and 

11 equipment; or 

12 ‘‘(2) an amount treated as a nonqualified withdrawal under section 

13 53510(d) of this title. 

14 ‘‘§ 53513. Corporate reorganizations and partnership 

15 changes 

16 ‘‘Under joint regulations—

17 ‘‘(1) a transfer of a capital construction fund from one person to an18 other person in a transaction to which section 381 of the Internal Rev19 enue Code of 1986 (26 U.S.C. 381) applies may be treated as if the 

20 transaction is not a nonqualified withdrawal; and 

21 ‘‘(2) a similar rule shall be applied to a continuation of a partnership 

22 (within the meaning of subchapter K of chapter 1 of such Code (26 

23 U.S.C. 701 et seq.)). 

24 ‘‘§ 53514. Relationship of old fund to new fund 

25 ‘‘(a) DEFINITION.—In this section, the term ‘old fund’ means a capital 

26 construction fund maintained before October 21, 1970. 

27 ‘‘(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining an old 

28 fund may elect to continue the old fund, but may not—

29 ‘‘(1) hold amounts in the old fund beyond the expiration date pro30 vided in the agreement under which the old fund is maintained (deter31 mined without regard to an extension or renewal made after April 14, 

32 1970); or 

33 ‘‘(2) maintain simultaneously the old fund and a new fund estab34 lished under this chapter. 

35 ‘‘(c) APPLICATION OF NEW FUND AGREEMENT TO OLD FUND

36 AMOUNTS.—If a person makes an agreement under this chapter to establish 

37 a new fund, the person may agree to extend the agreement to some or all 

38 of the amounts in an old fund. Each item in the old fund to be transferred 

39 shall be transferred in a nontaxable transaction to the appropriate account 

40 in the new fund. For purposes of section 53511(c)(3) of this title, the date 
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1 of the deposit of an item so transferred shall be July 1, 1971, or the date 

2 of the deposit in the old fund, whichever is later. 

3 ‘‘§ 53515. Records and reports 

4 ‘‘A person maintaining a fund under this chapter shall keep records and 

5 make reports as required by the Secretary or the Secretary of the Treasury. 

6 ‘‘§ 53516. Termination of agreement after change in regula7 tions 

8 ‘‘If, after an agreement has been made under this chapter, a change is 

9 made either in the joint regulations or in the regulations prescribed by the 

10 Secretary under this chapter that could have a substantial effect on the 

11 rights or duties of a person maintaining a fund under this chapter, that per12 son may terminate the agreement. 

13 ‘‘§ 53517. Reports 

14 ‘‘(a) IN GENERAL.—Within 120 days after the close of each calendar 

15 year, the Secretary of Transportation and the Secretary of Commerce each 

16 shall provide the Secretary of the Treasury a written report on the capital

17 construction funds under the particular Secretary’s jurisdiction for the cal18 endar year. 

19 ‘‘(b) CONTENTS.—The report shall state the name and taxpayer identi20 fication number of each person—

21 ‘‘(1) establishing a capital construction fund during the calendar 

22 year; 

23 ‘‘(2) maintaining a capital construction fund on the last day of the 

24 calendar year; 

25 ‘‘(3) terminating a capital construction fund during the calendar 

26 year; 

27 ‘‘(4) making a deposit to or withdrawal from a capital construction 

28 fund during the calendar year, and the amount of the deposit or with29 drawal; or 

30 ‘‘(5) having been determined during the calendar year to have failed 

31 to fulfill a substantial obligation under a capital construction fund 

32 agreement to which the person is a party.

33 ‘‘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. 
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‘‘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.

1 ‘‘SUBCHAPTER I—GENERAL 

2 ‘‘§ 53701. Definitions 

3 ‘‘In this chapter: 

4 ‘‘(1) ACTUAL COST.—The term ‘actual cost’ means the sum of—

5 ‘‘(A) all amounts paid by or for the account of the obligor as 

6 of the date on which a determination is made under section 

7 53715(d)(1) of this title; and 

8 ‘‘(B) all amounts that the Secretary reasonably estimates the 

9 obligor will become obligated to pay from time to time thereafter, 

10 for the construction, reconstruction, or reconditioning of the ves11 sel, including guarantee fees that will become payable under sec12 tion 53714 of this title in connection with all obligations issued 

13 for construction, reconstruction, or reconditioning of the vessel or 

14 equipment to be delivered, and all obligations issued for the deliv15 ered vessel or equipment. 

16 ‘‘(2) CONSTRUCTION, RECONSTRUCTION, AND RECONDITIONING.—

17 The terms ‘construction’, ‘reconstruction’, and ‘reconditioning’ include 

18 designing, inspecting, outfitting, and equipping. 

19 ‘‘(3) DEPRECIATED ACTUAL COST.—The term ‘depreciated actual 

20 cost’ of a vessel means—

21 ‘‘(A) if the vessel was not reconstructed or reconditioned, the 

22 actual cost of the vessel depreciated on a straight line basis over 

23 the useful life of the vessel as determined by the Secretary, not 

24 to exceed 25 years from the date of delivery by the builder; or 

25 ‘‘(B) if the vessel was reconstructed or reconditioned, the sum 

26 of—

27 ‘‘(i) the actual cost of the vessel depreciated on a straight 

28 line basis from the date of delivery by the builder to the date 
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1 of the reconstruction or reconditioning, using the original use2 ful life of the vessel, and from the date of the reconstruction 

3 or reconditioning, using a useful life of the vessel determined 

4 by the Secretary; and 

5 ‘‘(ii) any amount paid or obligated to be paid for the recon6 struction or reconditioning, depreciated on a straight line 

7 basis using a useful life of the vessel determined by the Sec8 retary. 

9 ‘‘(4) ELIGIBLE EXPORT VESSEL.—The term ‘eligible export vessel’ 

10 means a vessel that—

11 ‘‘(A) is constructed, reconstructed, or reconditioned in the 

12 United States for use in world-wide trade; and 

13 ‘‘(B) will, on delivery or redelivery, become or remain docu14 mented under the laws of a country other than the United States. 

15 ‘‘(5) FISHERY FACILITY.—

16 ‘‘(A) IN GENERAL.—Subject to paragraph (B), the term ‘fishery 

17 facility’ means—

18 ‘‘(i) for operations on land—

19 ‘‘(I) a structure or appurtenance thereto designed for 

20 the unloading and receiving from vessels, the processing, 

21 the holding pending processing, the distribution after 

22 processing, or the holding pending distribution, of fish 

23 from a fishery; 

24 ‘‘(II) the land necessary for the structure or appur25 tenance; and 

26 ‘‘(III) equipment that is for use with the structure or 

27 appurtenance and that is necessary for performing a 

28 function referred to in clause (I); 

29 ‘‘(ii) for operations not on land, a vessel built in the United 

30 States and used for, equipped to be used for, or of a type nor31 mally used for, the processing of fish; or 

32 ‘‘(iii) for aquaculture, including operations on land or else33 where—

34 ‘‘(I) a structure or appurtenance thereto designed for 

35 aquaculture; 

36 ‘‘(II) the land necessary for the structure or appur37 tenance; 

38 ‘‘(III) equipment that is for use with the structure or 

39 appurtenance and that is necessary for performing a 

40 function referred to in clause (I); and 
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1 ‘‘(IV) a vessel built in the United States and used for, 

2 equipped to be used for, or of a type normally used for, 

3 aquaculture. 

4 ‘‘(B) REQUIRED OWNERSHIP.—Under paragraph (A), the struc5 ture, appurtenance, land, equipment, or vessel must be owned 

6 by—

7 ‘‘(i) an individual who is a citizen of the United States; or 

8 ‘‘(ii) an entity that is a citizen of the United States under 

9 section 50501 of this title and that is at least 75 percent 

10 owned (as determined under that section) by citizens of the 

11 United States. 

12 ‘‘(6) FISHING VESSEL.—The term ‘fishing vessel’ has the meaning 

13 given that term in section 3 of the Magnuson-Stevens Fishery Con14 servation and Management Act (16 U.S.C. 1802), and any reference 

15 in this chapter to a vessel designed principally for commercial use in 

16 the fishing trade or industry is deemed to be a reference to a fishing 

17 vessel. 

18 ‘‘(7) MORTGAGE.—The term ‘mortgage’ includes—

19 ‘‘(A) a preferred mortgage as defined in section 31301 of this 

20 title; and 

21 ‘‘(B) a mortgage on a vessel that will become a preferred mort22 gage when filed or recorded under chapter 313 of this title. 

23 ‘‘(8) OBLIGATION.—The term ‘obligation’ means an instrument of 

24 indebtedness issued for a purpose described in section 53706 of this 

25 title, except—

26 ‘‘(A) an obligation issued by the Secretary under section 53723 

27 of this title; and 

28 ‘‘(B) an obligation eligible for investment of funds under section 

29 53715(f) or 53717 of this title. 

30 ‘‘(9) OBLIGEE.—The term ‘obligee’ means the holder of an obliga31 tion. 

32 ‘‘(10) OBLIGOR.—The term ‘obligor’ means a party primarily liable 

33 for payment of the principal of or interest on an obligation. 

34 ‘‘(11) OCEAN THERMAL ENERGY CONVERSION FACILITY OR

35 PLANTSHIP.—The term ‘ocean thermal energy conversion facility or 

36 plantship’ means an at-sea facility or vessel, whether mobile, floating 

37 unmoored, moored, or standing on the seabed, that uses temperature 

38 differences in ocean water to produce electricity or another form of en39 ergy capable of being used directly to perform work, and includes—
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1 ‘‘(A) equipment installed on the facility or vessel to use the elec2 tricity or other form of energy to produce, process, refine, or man3 ufacture a product; 

4 ‘‘(B) a cable or pipeline used to deliver the electricity, fresh5 water, or product to shore; and 

6 ‘‘(C) other associated equipment and appurtenances of the facil7 ity or vessel to the extent they are located seaward of the high 

8 water mark. 

9 ‘‘(12) SECRETARY.—The term ‘Secretary’ means—

10 ‘‘(A) the Secretary of Commerce with respect to fishing vessels 

11 and fishery facilities; and 

12 ‘‘(B) the Secretary of Transportation with respect to other ves13 sels and general shipyard facilities (as defined in section 53733(a) 

14 of this title).

15 ‘‘(13) VESSEL.—The term ‘vessel’ means any type of vessel, whether 

16 in existence or under construction, including—

17 ‘‘(A) a cargo vessel; 

18 ‘‘(B) a passenger vessel; 

19 ‘‘(C) a combination cargo and passenger vessel; 

20 ‘‘(D) a tanker; 

21 ‘‘(E) a tug or towboat; 

22 ‘‘(F) a barge; 

23 ‘‘(G) a dredge; 

24 ‘‘(H) a floating drydock with a capacity of at least 35,000 lift25 ing tons and a beam of at least 125 feet between the wing walls; 

26 ‘‘(I) an oceanographic research vessel; 

27 ‘‘(J) an instruction vessel; 

28 ‘‘(K) a pollution treatment, abatement, or control vessel; 

29 ‘‘(L) a fishing vessel whose ownership meets the citizenship re30 quirements under section 50501 of this title for documenting ves31 sels to operate in the coastwise trade; and 

32 ‘‘(M) an ocean thermal energy conversion facility or plantship 

33 that is or will be documented under the laws of the United States. 

34 ‘‘§ 53702. General authority 

35 ‘‘(a) IN GENERAL.—The Secretary, on terms the Secretary may pre36 scribe, may guarantee or make a commitment to guarantee the payment of 

37 the principal of and interest on an obligation eligible to be guaranteed under 

38 this chapter. A guarantee or commitment to guarantee shall cover 100 per39 cent of the principal and interest. 

40 ‘‘(b) DIRECT LOANS FOR FISHERIES.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other provision of this 

2 chapter, any obligation involving a fishing vessel, fishery facility, aqua3 culture facility, individual fishing quota, or fishing capacity reduction 

4 program issued under this chapter after October 11, 1996, shall be a 

5 direct loan obligation for which the Secretary shall be the obligee, rath6 er than an obligation issued to an obligee other than the Secretary and 

7 guaranteed by the Secretary. A direct loan obligation under this sub8 section shall be treated in the same manner and to the same extent 

9 as an obligation guaranteed under this chapter except with respect to 

10 provisions of this chapter that by their nature can only be applied to 

11 obligations guaranteed under this chapter. 

12 ‘‘(2) INTEREST RATE.—Notwithstanding any other provision of this 

13 chapter, the annual rate of interest an obligor shall pay on a direct 

14 loan obligation under this subsection is 2 percent plus the additional 

15 percent the Secretary must pay as interest to borrow from the Treas16 ury the funds to make the loan. 

17 ‘‘§ 53703. Application procedures 

18 ‘‘(a) TIME FOR DECISION.—

19 ‘‘(1) IN GENERAL.—The Secretary shall approve or deny an applica20 tion for a loan guarantee under this chapter within 270 days after the 

21 date on which the signed application is received by the Secretary. 

22 ‘‘(2) EXTENSION.—On request by an applicant, the Secretary may 

23 extend the 270-day period in paragraph (1) to a date not later than 

24 2 years after the date on which the signed application was received by 

25 the Secretary. 

26 ‘‘(b) CERTIFICATION OF REVIEW.—The Secretary may not guarantee or 

27 make a commitment to guarantee an obligation under this chapter unless 

28 the Secretary certifies that a full and fair consideration of all the regulatory 

29 requirements, including economic soundness and financial requirements ap30 plicable to the obligor and related parties, and a thorough assessment of the 

31 technical, economic, and financial aspects of the loan application, has been 

32 made. 

33 ‘‘§ 53704. Funding limits 

34 ‘‘(a) GENERAL LIMITATIONS.—The total unpaid principal amount of obli35 gations guaranteed under this chapter and outstanding at one time may not 

36 exceed $12,000,000,000. Of that amount—

37 ‘‘(1) $850,000,000 shall be limited to obligations related to fishing 

38 vessels and fishery facilities; and 

39 ‘‘(2) $3,000,000,000 shall be limited to obligations related to eligible 

40 export vessels. 
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1 ‘‘(b) ADDITIONAL LIMITATIONS.—Additional limitations may not be im2 posed on new commitments to guarantee loans for any fiscal year, except 

3 in amounts established in advance by annual authorization laws. A vessel 

4 eligible for a guarantee under this chapter may not be denied eligibility be5 cause of its type. 

6 ‘‘(c) LIMITS BASED ON RISK FACTORS.—

7 ‘‘(1) DEFINITION.—In this subsection, the term ‘cost’ has the mean8 ing given that term in section 502 of the Federal Credit Reform Act 

9 of 1990 (2 U.S.C. 661a). 

10 ‘‘(2) SYSTEM OF RISK CATEGORIES.—The Secretary shall—

11 ‘‘(A) establish, and update annually, a system of risk categories 

12 for obligations guaranteed under this chapter that categorizes the 

13 relative risk of guarantees based on the risk factors set forth in 

14 paragraph (4); 

15 ‘‘(B) determine annually for each risk category a subsidy rate 

16 equivalent to the cost of obligations in the category, expressed as 

17 a percentage of the amount guaranteed for obligations in the cat18 egory; and 

19 ‘‘(C) ensure that each risk category is comprised of loans that 

20 are relatively homogeneous in cost and share characteristics pre21 dictive of defaults and other costs, given the facts known at the 

22 time of obligation or commitment, using a risk category system 

23 that is based on historical analysis of program data and statistical 

24 evidence concerning the likely costs of defaults or other costs that 

25 are expected to be associated with the loans in the category. 

26 ‘‘(3) USE OF SYSTEM.—

27 ‘‘(A) PLACING OBLIGATION IN CATEGORY.—Before making a 

28 guarantee under this chapter for an obligation, and annually for 

29 projects subject to a guarantee, the Secretary shall apply the risk 

30 factors specified in paragraph (4) to place the obligation in a risk 

31 category established under paragraph (2). 

32 ‘‘(B) REDUCTION OF AVAILABLE AMOUNT.—The Secretary shall 

33 consider the total amount available to the Secretary for making 

34 guarantees under this chapter to be reduced by the amount deter35 mined by multiplying—

36 ‘‘(i) the amount guaranteed under this chapter for an obli37 gation; by 

38 ‘‘(ii) the subsidy rate for the category in which the obliga39 tion is placed under subparagraph (A). 

40 ‘‘(C) ESTIMATED COST.—The estimated cost to the United 

41 States Government of a guarantee under this chapter for an obli-
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1 gation is deemed to be the amount determined under subpara2 graph (B) for the obligation. 

3 ‘‘(D) RESTRICTION ON FURTHER GUARANTEES.—The Secretary 

4 may not guarantee obligations under this chapter after the total 

5 amount available to the Secretary under appropriations laws for 

6 the cost of loan guarantees is considered to be reduced to zero 

7 under subparagraph (B). 

8 ‘‘(4) RISK FACTORS.—The risk factors referred to in this subsection 

9 are—

10 ‘‘(A) if applicable, the country risk for each eligible export vessel 

11 financed or to be financed by an obligation; 

12 ‘‘(B) the period for which an obligation is guaranteed or to be 

13 guaranteed;

14 ‘‘(C) the amount of an obligation guaranteed or to be guaran15 teed in relation to the total cost of the project financed or to be 

16 financed by the obligation; 

17 ‘‘(D) the financial condition of an obligor or applicant for a 

18 guarantee; 

19 ‘‘(E) if applicable, other guarantees related to the project; 

20 ‘‘(F) if applicable, the projected employment of each vessel or 

21 equipment to be financed with an obligation; 

22 ‘‘(G) if applicable, the projected market that will be served by 

23 each vessel or equipment to be financed with an obligation; 

24 ‘‘(H) the collateral provided for a guarantee for an obligation; 

25 ‘‘(I) the management and operating experience of an obligor or 

26 applicant for a guarantee; 

27 ‘‘(J) whether a guarantee under this chapter is or will be in ef28 fect during the construction period of the project; and 

29 ‘‘(K) the concentration risk presented by an unduly large per30 centage of loans outstanding by any one borrower or group of af31 filiated borrowers. 

32 ‘‘§ 53705. Pledge of United States Government 

33 ‘‘(a) FULL FAITH AND CREDIT.—The full faith and credit of the United 

34 States Government is pledged to the payment of a guarantee made under 

35 this chapter, for both principal and interest, including interest (as may be 

36 provided for in the guarantee) accruing between the date of default under 

37 a guaranteed obligation and the date of payment in full of the guarantee. 

38 ‘‘(b) INCONTESTABILITY.—A guarantee or commitment to guarantee 

39 made under this chapter is conclusive evidence of the eligibility of the obli40 gation for the guarantee. The validity of a guarantee or commitment to 

41 guarantee made under this chapter is incontestable. 
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1 ‘‘§ 53706. Eligible purposes of obligations 

2 ‘‘(a) IN GENERAL.—To be eligible for a guarantee under this chapter, an 

3 obligation must aid in any of the following: 

4 ‘‘(1)(A) Financing (including reimbursement of an obligor for ex5 penditures previously made for) the construction, reconstruction, or re6 conditioning of a vessel (including an eligible export vessel) designed 

7 principally for research, or for commercial use—

8 ‘‘(i) in the coastwise or intercoastal trade; 

9 ‘‘(ii) on the Great Lakes, or on bays, sounds, rivers, harbors, 

10 or inland lakes of the United States; 

11 ‘‘(iii) in foreign trade as defined in section 109(b) of this title; 

12 ‘‘(iv) as an ocean thermal energy conversion facility or 

13 plantship; 

14 ‘‘(v) as a floating drydock in the construction, reconstruction, 

15 reconditioning, or repair of vessels; or 

16 ‘‘(vi) as an eligible export vessel in worldwide trade. 

17 ‘‘(B) A guarantee under subparagraph (A) may not be made more 

18 than one year after delivery of the vessel (or redelivery if the vessel was 

19 reconstructed or reconditioned) unless the proceeds of the obligation 

20 are used to finance the construction, reconstruction, or reconditioning 

21 of a vessel or of facilities or equipment related to marine operations. 

22 ‘‘(2) Financing (including reimbursement of an obligor for expendi23 tures previously made for) the construction, reconstruction, recondi24 tioning, or purchase of a vessel owned by citizens of the United States 

25 and designed principally for research, or for commercial use in the fish26 ing industry. 

27 ‘‘(3) Financing the purchase, reconstruction, or reconditioning of a 

28 vessel or fishery facility—

29 ‘‘(A) for which an obligation was guaranteed under this chapter; 

30 and 

31 ‘‘(B) that, under subchapter II of this chapter—

32 ‘‘(i) is a vessel or fishery facility for which an obligation 

33 was accelerated and paid; 

34 ‘‘(ii) was acquired by the Federal Ship Financing Fund or 

35 successor account under section 53717 of this title; or 

36 ‘‘(iii) was sold at foreclosure begun by the Secretary. 

37 ‘‘(4) Financing any part of the repayment to the United States Gov38 ernment of any amount of a construction-differential subsidy paid for 

39 a vessel. 

40 ‘‘(5) Refinancing an existing obligation (regardless of whether guar41 anteed under this chapter) issued for a purpose described in clauses 
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1 (1)–(4), including a short-term obligation incurred to obtain temporary 

2 funds with the intention of refinancing. 

3 ‘‘(6) Financing or refinancing (including reimbursement of an obli4 gor for expenditures previously made for) the construction, reconstruc5 tion, reconditioning, or purchase of a fishery facility. 

6 ‘‘(7) Financing or refinancing (including reimbursement of an obli7 gor for expenditures previously made for) the purchase of an individual 

8 fishing quota in accordance with section 303(d)(4) of the Magnuson9 Stevens Fishery Conservation and Management Act (16 U.S.C. 

10 1853(d)(4)). 

11 ‘‘(b) NON-VESSELS TREATED AS VESSELS.—An obligation guaranteed 

12 under subsection (a)(6) or (7) shall be treated, for purposes of this chapter, 

13 in the same manner and to the same extent as an obligation that aids in 

14 financing the construction, reconstruction, reconditioning, or purchase of a 

15 vessel, except with respect to provisions that by their nature can only be 

16 applied to vessels. 

17 ‘‘(c) PRIORITIES FOR CERTAIN VESSELS.—In guaranteeing or making a 

18 commitment to guarantee an obligation under this chapter, the Secretary 

19 shall give priority to—

20 ‘‘(1) a vessel that is otherwise eligible for a guarantee and is con21 structed with assistance under subtitle D of the Maritime Security Act 

22 of 2003 (46 U.S.C. 53101 note); and 

23 ‘‘(2) after applying clause (1), a vessel that is otherwise eligible for 

24 a guarantee and that the Secretary of Defense determines—

25 ‘‘(A) is suitable for service as a naval auxiliary in time of war 

26 or national emergency; and 

27 ‘‘(B) meets a shortfall in sealift capacity or capability. 

28 ‘‘§ 53707. Findings related to obligors and operators 

29 ‘‘(a) RESPONSIBLE OBLIGOR.—The Secretary may not guarantee or make 

30 a commitment to guarantee an obligation under this chapter unless the Sec31 retary finds that the obligor is responsible and has the ability, experience, 

32 financial resources, and other qualifications necessary for the adequate oper33 ation and maintenance of each vessel that will serve as security for the 

34 guarantee. 

35 ‘‘(b) OPERATORS OF LINER VESSELS.—The Secretary of Transportation 

36 may not guarantee or make a commitment to guarantee a loan for the con37 struction, reconstruction, or reconditioning of a liner vessel under this chap38 ter unless the Chairman of the Federal Maritime Commission certifies that 

39 the operator of the vessel has not been found by the Commission to have 

40 committed, within the previous 5 years—
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1 ‘‘(1) a violation of part A of subtitle IV of this title that involves 

2 unjust or unfair discriminatory treatment or undue or unreasonable 

3 prejudice or disadvantage with respect to a United States shipper, 

4 ocean transportation intermediary, ocean common carrier, or port; or 

5 ‘‘(2) a violation of part B of subtitle IV of this title. 

6 ‘‘(c) OPERATORS OF FISHING VESSELS.—The Secretary of Commerce 

7 may not guarantee or make a commitment to guarantee a loan for the con8 struction, reconstruction, or reconditioning of a fishing vessel under this 

9 chapter if the operator of the vessel has been—

10 ‘‘(1) held liable or liable in rem for a civil penalty under section 1858 

11 of title 16 and not paid the penalty; 

12 ‘‘(2) found guilty of an offense under section 1859 of title 16 and 

13 not paid the assessed fine or served the assessed sentence;

14 ‘‘(3) held liable for a civil or criminal penalty under section 1375 of 

15 title 16 and not paid the assessed fine or served the assessed sentence; 

16 or 

17 ‘‘(4) held liable for a civil penalty by the Coast Guard under this 

18 title or title 33 and not paid the assessed fine. 

19 ‘‘(d) WAIVERS CONCERNING FINANCIAL CONDITION.—The Secretary 

20 shall prescribe regulations concerning circumstances under which waivers of, 

21 or exceptions to, otherwise applicable regulatory requirements concerning fi22 nancial condition can be made. The regulations shall require that—

23 ‘‘(1) the economic soundness requirements in section 53708(a) of 

24 this title are met after the waiver of the financial condition require25 ment; and 

26 ‘‘(2) the waiver shall provide for the imposition of other requirements 

27 on the obligor designed to compensate for the increased risk associated 

28 with the obligor’s failure to meet regulatory requirements applicable to 

29 financial condition. 

30 ‘‘§ 53708. Findings related to economic soundness 

31 ‘‘(a) BY SECRETARY OF TRANSPORTATION.—The Secretary of Transpor32 tation may not guarantee or make a commitment to guarantee an obligation 

33 under this chapter unless the Secretary finds that the property or project 

34 for which the obligation will be executed will be economically sound. In mak35 ing that finding, the Secretary shall consider—

36 ‘‘(1) the need in the particular segment of the maritime industry for 

37 new or additional capacity, including any impact on existing equipment 

38 for which a guarantee under this chapter is in effect; 

39 ‘‘(2) the market potential for employment of the vessel over the life 

40 of the guarantee; 
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1 ‘‘(3) projected revenues and expenses associated with employment of 

2 the vessel; 

3 ‘‘(4) any charter, contract of affreightment, transportation agree4 ment, or similar agreement or undertaking relevant to the employment 

5 of the vessel; 

6 ‘‘(5) other relevant criteria; and 

7 ‘‘(6) for inland waterways, the need for technical improvements, in8 cluding increased fuel efficiency or improved safety. 

9 ‘‘(b) BY SECRETARY OF COMMERCE.—The Secretary of Commerce may 

10 not guarantee or make a commitment to guarantee an obligation under this 

11 chapter unless the Secretary finds, at or prior to the time the commitment 

12 is made or the guarantee becomes effective, that—

13 ‘‘(1) the property or project for which the obligation will be executed 

14 will be economically sound; and 

15 ‘‘(2) for a fishing vessel, the purpose of the financing or refinancing 

16 is consistent with—

17 ‘‘(A) the wise use of the fisheries resources and the develop18 ment, advancement, management, conservation, and protection of 

19 the fisheries resources; or 

20 ‘‘(B) the need for technical improvements, including increased 

21 fuel efficiency or improved safety. 

22 ‘‘(c) USED FISHING VESSELS AND FACILITIES.—The Secretary of Com23 merce may not guarantee or make a commitment to guarantee an obligation 

24 under this chapter for the purchase of a used fishing vessel or used fishery 

25 facility unless the vessel or facility will be—

26 ‘‘(1) reconstructed or reconditioned in the United States and will 

27 contribute to the development of the United States fishing industry; or 

28 ‘‘(2) used—

29 ‘‘(A) in the harvesting of fish from an underused fishery; or 

30 ‘‘(B) for a purpose described in the definition of ‘fishery facility’ 

31 in section 53701 of this title with respect to an underused fishery. 

32 ‘‘(d) INDEPENDENT ANALYSIS.—The Secretary may make a determina33 tion that aspects of an application under this chapter require independent 

34 analysis to be conducted by third party experts due to risk factors associ35 ated with markets, technology, financial structures, or other risk factors 

36 identified by the Secretary. Any independent analysis conducted under this 

37 subsection shall be performed by a party chosen by the Secretary. 

38 ‘‘(e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Notwith39 standing any other provision of this chapter, the Secretary may make a de40 termination that an application under this title requires additional equity 
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1 because of increased risk factors associated with markets, technology, finan2 cial structures, or other risk factors identified by the Secretary. 

3 ‘‘§ 53709. Amount of obligations 

4 ‘‘(a) IN GENERAL.—The principal of an obligation may not be guaranteed 

5 in an amount greater than the amount determined by multiplying the per6 centage applicable under subsection (b) by— 

7 ‘‘(1) the amount paid by or for the account of the obligor (as deter8 mined by the Secretary, which determination shall be conclusive) for 

9 the construction, reconstruction, or reconditioning of the vessel used as 

10 security for the guarantee; or 

11 ‘‘(2) if the obligor creates an escrow fund under section 53715 of 

12 this title, the actual cost of the vessel. 

13 ‘‘(b) LIMITATIONS ON AMOUNT BORROWED.— 

14 ‘‘(1) IN GENERAL.—Except as otherwise provided, the principal 

15 amount of an obligation guaranteed under this chapter may not exceed 

16 75 percent of the actual cost or depreciated actual cost, as determined 

17 by the Secretary, of the vessel used as security for the guarantee. 

18 ‘‘(2) CERTAIN APPROVED VESSELS.—The principal amount may not 

19 exceed 87.5 percent of the actual cost or depreciated actual cost if— 

20 ‘‘(A) the size and speed of the vessel are approved by the Sec21 retary; 

22 ‘‘(B) the vessel is or would have been eligible for mortgage aid 

23 for construction under section 509 of the Merchant Marine Act, 

24 1936, or would have been eligible except that the vessel was built 

25 with a construction-differential subsidy and the subsidy has been 

26 repaid; and 

27 ‘‘(C) the vessel is of a type described in that section for which 

28 the minimum down payment required by that section is 12.5 per29 cent of the cost of the vessel. 

30 ‘‘(3) BARGES.—For a barge constructed without a construction-dif31 ferential subsidy or for which the subsidy has been repaid, the principal 

32 amount may not exceed 87.5 percent of the actual cost or depreciated 

33 actual cost. 

34 ‘‘(4) FISHING VESSELS AND FISHERY FACILITIES.—For a fishing 

35 vessel or fishery facility, the principal amount may not exceed 80 per36 cent of the actual cost or depreciated actual cost. However, debt for 

37 the vessel or facility may not be placed through the Federal Financing 

38 Bank. 

39 ‘‘(5) OTEC.—For an ocean thermal energy conversion facility or 

40 plantship constructed without a construction-differential subsidy, the 
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1 principal amount may not exceed 87.5 percent of the actual cost or de2 preciated actual cost of the facility or plantship. 

3 ‘‘(6) ELIGIBLE EXPORT VESSELS.—For an eligible export vessel, the 

4 principal amount may not exceed 87.5 percent of the actual cost or de5 preciated actual cost. 

6 ‘‘(c) SECURITY INVOLVING MULTIPLE VESSELS.—The principal amount 

7 of an obligation having more than one vessel as security for the guarantee 

8 may not exceed the sum of the principal amounts allowable for all the ves9 sels. 

10 ‘‘(d) PROHIBITION ON UNIFORM PERCENTAGE LIMITATIONS.—The Sec11 retary may not establish a percentage under any provision of subsection (b) 

12 that is to be applied uniformly to all guarantees or commitments to guar13 antee made under that provision. 

14 ‘‘(e) PROHIBITION ON MINIMUM PRINCIPAL AMOUNT.—The Secretary 

15 may not establish, as a condition of eligibility for a guarantee under this 

16 chapter, a minimum principal amount for an obligation covering the recon17 struction or reconditioning of a fishing vessel or fishery facility. For pur18 poses of this chapter, the reconstruction or reconditioning of a fishing vessel 

19 or fishery facility does not include the routine minor repair or maintenance 

20 of the vessel or facility. 

21 ‘‘§ 53710. Contents of obligations 

22 ‘‘(a) IN GENERAL.—An obligation guaranteed under this chapter must— 

23 ‘‘(1) provide for payments by the obligor satisfactory to the Sec24 retary; 

25 ‘‘(2) provide for interest (exclusive of guarantee fees and other fees) 

26 at a rate not more than the annual rate on the unpaid principal that 

27 the Secretary determines is reasonable, considering the range of inter28 est rates prevailing in the private market for similar loans and the 

29 risks assumed by the Secretary; 

30 ‘‘(3) have a maturity date satisfactory to the Secretary, but— 

31 ‘‘(A) not more than 25 years after the date of delivery of the 

32 vessel used as security for the guarantee; or 

33 ‘‘(B) if the vessel has been reconstructed or reconditioned, not 

34 more than the later of— 

35 ‘‘(i) 25 years after the date of delivery of the vessel; or 

36 ‘‘(ii) the remaining years of useful life of the vessel as de37 termined by the Secretary; and 

38 ‘‘(4) provide, or a related agreement must provide, that if the vessel 

39 used as security for the guarantee is a delivered vessel, the vessel shall 

40 be— 
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1 ‘‘(A) in class A–1, American Bureau of Shipping, or meet other 

2 standards acceptable to the Secretary, with all required certifi3 cates, including marine inspection certificates of the Coast Guard 

4 or, in the case of an eligible export vessel, of the appropriate na5 tional flag authorities under a treaty, convention, or other inter6 national agreement to which the United States Government is a 

7 party, and with all outstanding requirements and recommenda8 tions necessary for class retention accomplished, unless the Sec9 retary permits a deferment of repairs necessary to meet these re10 quirements; and 

11 ‘‘(B) well equipped, in good repair, and in every respect sea12 worthy and fit for service. 

13 ‘‘(b) PROVISIONS FOR CERTAIN PASSENGER VESSELS.—

14 ‘‘(1) IN GENERAL.—With the Secretary’s approval, if the vessel used 

15 as security for the guarantee is a passenger vessel having the tonnage, 

16 speed, passenger accommodations, and other characteristics described 

17 in section 503 of the Merchant Marine Act, 1936, an obligation guar18 anteed under this chapter or a related agreement may provide that—

19 ‘‘(A) the only recourse by the Government against the obligor 

20 for payments under the guarantee will be repossession of the ves21 sel and assignment of insurance claims; and 

22 ‘‘(B) the obligor’s liability for payments under the guarantee 

23 will be satisfied and discharged by the surrender of the vessel and 

24 all interest in the vessel to the Government in the condition de25 scribed in paragraph (2). 

26 ‘‘(2) SURRENDER OF VESSEL.—

27 ‘‘(A) IN GENERAL.—On surrender, the vessel must be—

28 ‘‘(i) free and clear of all liens and encumbrances except the 

29 security interest conveyed to the Secretary under this chapter; 

30 ‘‘(ii) in class; and 

31 ‘‘(iii) in as good order and condition (ordinary wear and 

32 tear excepted) as when acquired by the obligor. 

33 ‘‘(B) COVERING DEFICIENCIES BY INSURANCE.—To the extent 

34 covered by insurance, a deficiency related to a requirement in sub35 paragraph (A) may be satisfied by assignment of the obligor’s in36 surance claims to the Government. 

37 ‘‘(c) OTHER PROVISIONS TO PROTECT SECURITY INTERESTS.—An obli38 gation guaranteed under this chapter and any related agreement must con39 tain other provisions for the protection of the security interests of the Gov40 ernment (including acceleration, assumption, and subrogation provisions and 
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1 the issuance of notes by the obligor to the Secretary), liens and releases of 

2 liens, payment of taxes, and other matters that the Secretary may prescribe. 

3 ‘‘§ 53711. Security interest 

4 ‘‘(a) IN GENERAL.—The Secretary may guarantee an obligation under 

5 this chapter only if the obligor conveys or agrees to convey to the Secretary 

6 a security interest the Secretary considers necessary to protect the interest 

7 of the United States Government. 

8 ‘‘(b) MULTIPLE VESSELS AND TYPES OF SECURITY.—The security inter9 est may relate to more than one vessel and may consist of more than one 

10 type of security. If the security interest relates to more than one vessel, the 

11 obligation may have the latest maturity date allowable under section 

12 53710(a)(3) of this title for any of the vessels used as security for the guar13 antee. However, the Secretary may require such payments of principal prior 

14 to maturity, with respect to all related obligations, as the Secretary con15 siders necessary to maintain adequate security for the guarantee. 

16 ‘‘§ 53712. Monitoring financial condition and operations of 

17 obligor 

18 ‘‘(a) IN GENERAL.—The Secretary shall monitor the financial condition 

19 and operations of the obligor on a regular basis during the term of the 

20 guarantee. The Secretary shall document the results of the monitoring on 

21 an annual or quarterly basis depending on the condition of the obligor. If 

22 the Secretary determines that the financial condition of the obligor warrants 

23 additional protections to the Secretary, the Secretary shall take appropriate 

24 action under subsection (b). If the Secretary determines that the financial 

25 condition of the obligor jeopardizes its continued ability to perform its re26 sponsibilities in connection with the guarantee of an obligation by the Sec27 retary, the Secretary shall make an immediate determination whether de28 fault should take place and whether further measures described in sub29 section (b) should be taken to protect the interests of the Secretary while 

30 ensuring that program objectives are met. 

31 ‘‘(b) CONTRACT PROVISIONS TO PROTECT SECRETARY.—The Secretary 

32 shall include provisions in a loan agreement with an obligor that provides 

33 additional authority to the Secretary to take action to limit potential losses 

34 in connection with a defaulted loan or a loan that is in jeopardy due to the 

35 deteriorating financial condition of the obligor. These provisions include re36 quirements for additional collateral or greater equity contributions that are 

37 effective upon the occurrence of verifiable conditions relating to the obligor’s 

38 financial condition or the status of the vessel or shipyard project. 

39 ‘‘§ 53713. Administrative fees 

40 ‘‘(a) IN GENERAL.—The Secretary shall charge and collect from the obli41 gor fees the Secretary considers reasonable for—
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1 ‘‘(1) investigating an application for a guarantee; 

2 ‘‘(2) appraising property offered as security for a guarantee; 

3 ‘‘(3) issuing a commitment; 

4 ‘‘(4) providing services related to an escrow fund under section 

5 53715 of this title; and 

6 ‘‘(5) inspecting property during construction, reconstruction, or re7 conditioning. 

8 ‘‘(b) TOTAL FEE LIMITATION.—The total fees under subsection (a) may 

9 not exceed 0.5 percent of the original principal amount of the obligations 

10 to be guaranteed. 

11 ‘‘(c) FEES FOR INDEPENDENT ANALYSIS.—The Secretary may charge 

12 and collect fees to cover the costs of independent analysis under section 

13 53708(d) of this title. Notwithstanding section 3302 of title 31, any fee col14 lected under this subsection shall—

15 ‘‘(1) be credited as an offsetting collection to the account that fi16 nances the administration of the loan guarantee program; 

17 ‘‘(2) be available for expenditure only to pay the costs of activities 

18 and services for which the fee is imposed; and 

19 ‘‘(3) remain available until expended. 

20 ‘‘§ 53714. Guarantee fees 

21 ‘‘(a) REGULATIONS.—Subject to this section, the Secretary shall prescribe 

22 regulations to assess a fee for guaranteeing an obligation under this chap23 ter. 

24 ‘‘(b) COMPUTATION OF FEE.—

25 ‘‘(1) IN GENERAL.—The amount of the fee for a guarantee under 

26 this chapter shall be equal to the sum of the amounts determined under 

27 paragraph (2) for the years in which the guarantee is in effect. 

28 ‘‘(2) PRESENT VALUE FOR EACH YEAR.—The amount referred to in 

29 paragraph (1) for a year in which the guarantee is in effect is the 

30 present value of the amount calculated under paragraph (3). To deter31 mine the present value, the Secretary shall apply a discount rate deter32 mined by the Secretary of the Treasury, considering current market 

33 yields on outstanding obligations of the United States Government hav34 ing periods to maturity comparable to the period to maturity for the 

35 guaranteed obligation. 

36 ‘‘(3) CALCULATION OF AMOUNT.—The amount referred to in para37 graph (2) shall be calculated by multiplying—

38 ‘‘(A) the estimated average unpaid principal amount of the obli39 gation that will be outstanding during the year (excluding the av40 erage amount, other than interest, on deposit during the year in 

41 an escrow fund under section 53715 of this title); by 
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1 ‘‘(B) the fee rate set under paragraph (4). 

2 ‘‘(4) SETTING FEE RATES.—To set the fee rate referred to in para3 graph (3)(B), the Secretary shall establish a formula that—

4 ‘‘(A) takes into account the security provided for the guaranteed 

5 obligation; and 

6 ‘‘(B) is a sliding scale based on the creditworthiness of the obli7 gor, using—

8 ‘‘(i) the lowest allowable rate under paragraph (5) for the 

9 most creditworthy obligors; and 

10 ‘‘(ii) the highest allowable rate under paragraph (5) for the 

11 least creditworthy obligors. 

12 ‘‘(5) PERMISSIBLE RANGE OF RATES.—The fee rate set under para13 graph (4) shall be—

14 ‘‘(A) for a delivered vessel or equipment, at least 0.5 percent 

15 and not more than 1 percent; and 

16 ‘‘(B) for a vessel to be constructed, reconstructed, or recondi17 tioned or equipment to be delivered, at least 0.25 percent and not 

18 more than 0.5 percent. 

19 ‘‘(c) WHEN FEE COLLECTED.—A fee for the guarantee of an obligation 

20 under this chapter shall be collected not later than the date on which an 

21 amount is first paid on the obligation. 

22 ‘‘(d) FINANCING THE FEE.—A fee paid under this section is eligible to 

23 be financed under this chapter and shall be included in the actual cost of 

24 the obligation guaranteed. 

25 ‘‘(e) NOT REFUNDABLE.—A fee paid under this section is not refundable. 

26 However, an obligor shall receive credit for the amount paid for the remain27 ing term of the obligation if the obligation is refinanced and guaranteed 

28 under this chapter after the refinancing. 

29 ‘‘§ 53715. Escrow fund 

30 ‘‘(a) IN GENERAL.—If the proceeds of an obligation guaranteed under 

31 this chapter are to be used to finance the construction, reconstruction, or 

32 reconditioning of a vessel that will serve as security for a guarantee under 

33 this chapter, the Secretary may accept and hold in escrow, under an escrow 

34 agreement with the obligor, a portion of the proceeds of all obligations guar35 anteed under this chapter whose proceeds are to be so used which is equal 

36 to the sum of—

37 ‘‘(1)(A) the principal amount of all obligations whose proceeds are 

38 to be so used; less 

39 ‘‘(B) the amount determined by multiplying the percentage applica40 ble under section 53709(b) of this title by the amount paid by or for 
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1 the account of the obligor for the construction, reconstruction, or re2 conditioning of the vessel; plus 

3 ‘‘(2) any interest the Secretary may require on the amount described 

4 in clause (1). 

5 ‘‘(b) SECURITY INVOLVING BOTH UNCOMPLETED AND DELIVERED VES6 SELS.—If the security for the guarantee of an obligation relates both to a 

7 vessel to be constructed, reconstructed, or reconditioned and to a delivered 

8 vessel, the principal amount of the obligation shall be prorated for purposes 

9 of subsection (a) under regulations prescribed by the Secretary. 

10 ‘‘(c) DISBURSEMENT BEFORE TERMINATION OF AGREEMENT.—

11 ‘‘(1) PURPOSES.—The Secretary shall disburse amounts in the es12 crow fund, as specified in the escrow agreement, to—

13 ‘‘(A) pay amounts the obligor is obligated to pay for—

14 ‘‘(i) the construction, reconstruction, or reconditioning of a 

15 vessel used as security for the guarantee; and 

16 ‘‘(ii) interest on the obligations; 

17 ‘‘(B) redeem the obligations under a refinancing guaranteed 

18 under this chapter; and 

19 ‘‘(C) pay any excess interest deposits to the obligor at times 

20 provided for in the escrow agreement. 

21 ‘‘(2) MANNER OF PAYMENT.—If a payment becomes due under the 

22 guarantee before the termination of the escrow agreement, the amount 

23 in the escrow fund at the time the payment becomes due, including re24 alized income not yet paid to the obligor, shall be paid into the appro25 priate account under section 53717 of this title. The amount shall be 

26 credited against amounts due or to become due from the obligor to the 

27 Secretary on the guaranteed obligations or, to the extent not so re28 quired, be paid to the obligor. 

29 ‘‘(d) PAYMENTS REQUIRED BEFORE DISBURSEMENT.—

30 ‘‘(1) IN GENERAL.—No disbursement shall be made under subsection 

31 (c) to any person until the total amount paid by or for the account 

32 of the obligor from sources other than the proceeds of the obligation 

33 equals at least 25 percent or 12.5 percent, whichever is applicable 

34 under section 53709(b) of this title, of the aggregate actual cost of the 

35 vessel, as previously approved by the Secretary. If the aggregate actual 

36 cost of the vessel has increased since the Secretary’s initial approval 

37 or if it increases after the first disbursement is permitted under this 

38 subsection, then no further disbursements shall be made under sub39 section (c) until the total amount paid by or for the account of the obli40 gor from sources other than the proceeds of the obligation equals at 

41 least 25 percent or 12.5 percent, as applicable, of the increase, as de-
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1 termined by the Secretary, in the aggregate actual cost of the vessel. 

2 This paragraph does not require the Secretary to consent to finance 

3 any increase in actual cost unless the Secretary determines that such 

4 an increase in the obligation meets all the terms and conditions of this 

5 chapter or other applicable law. 

6 ‘‘(2) DOCUMENTED PROOF OF PROGRESS REQUIREMENT.—The Sec7 retary shall, by regulation, establish a transparent, independent, and 

8 risk-based process for verifying and documenting the progress of 

9 projects under construction before disbursing guaranteed loan funds. 

10 At a minimum, the process shall require documented proof of progress 

11 in connection with the construction, reconstruction, or reconditioning of 

12 a vessel or vessels before disbursements are made from the escrow 

13 fund. The Secretary may require that the obligor provide a certificate

14 from an independent party certifying that the requisite progress in con15 struction, reconstruction, or reconditioning has taken place. 

16 ‘‘(e) DISBURSEMENT ON TERMINATION OF AGREEMENT.—

17 ‘‘(1) IN GENERAL.—If a payment has not become due under the 

18 guarantee before the termination of the escrow agreement, the balance 

19 of the escrow fund at the time of termination shall be disbursed to—

20 ‘‘(A) prepay—

21 ‘‘(i) the principal amount of all obligations whose proceeds 

22 are to be used to finance the construction, reconstruction, or 

23 reconditioning of the vessel used or to be used as security for 

24 the guarantee; less 

25 ‘‘(ii) the amount determined by multiplying the percentage 

26 applicable under section 53709(b) of this title by the actual 

27 cost of the vessel to the extent paid; and 

28 ‘‘(B) pay interest on that prepaid amount of principal. 

29 ‘‘(2) REMAINING BALANCE.—Any remaining balance of the escrow 

30 fund shall be paid to the obligor. 

31 ‘‘(f) INVESTMENT.—The Secretary may invest and reinvest any part of 

32 an escrow fund in obligations of the United States Government with matu33 rities such that the escrow fund will be available as required for purposes 

34 of the escrow agreement. Investment income shall be paid to the obligor 

35 when received. 

36 ‘‘(g) TERMS TO PROTECT GOVERNMENT.—The escrow agreement shall 

37 contain other terms the Secretary considers necessary to protect fully the 

38 interests of the Government. 

39 ‘‘§ 53716. Deposit fund 

40 ‘‘(a) IN GENERAL.—There is a deposit fund in the Treasury for purposes 

41 of this section. The Secretary, in accordance with an agreement under sub-
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1 section (b), may deposit into and hold in the fund cash belonging to an obli2 gor to serve as collateral for a guarantee made under this chapter with re3 spect to the obligor. 

4 ‘‘(b) AGREEMENT.—The Secretary and an obligor shall make a reserve 

5 fund or other collateral account agreement to govern the deposit, with6 drawal, retention, use, and reinvestment of cash of the obligor held in the 

7 fund. The agreement shall contain—

8 ‘‘(1) terms and conditions required by this section; 

9 ‘‘(2) terms that grant to the United States Government a security 

10 interest in all amounts deposited into the fund; and 

11 ‘‘(3) any additional terms considered by the Secretary to be nec12 essary to protect fully the interests of the Government. 

13 ‘‘(c) INVESTMENT.—The Secretary may invest and reinvest any part of 

14 the amounts in the fund in obligations of the Government with maturities 

15 such that amounts in the fund will be available as required for purposes 

16 of the agreement under subsection (b). Cash balances in the fund in excess 

17 of current requirements shall be maintained in a form of uninvested funds, 

18 and the Secretary of the Treasury shall pay interest on these funds. 

19 ‘‘(d) WITHDRAWALS.—

20 ‘‘(1) IN GENERAL.—Cash deposited into the fund may not be with21 drawn without the consent of the Secretary. 

22 ‘‘(2) USE OF INCOME.—Subject to paragraph (3), the Secretary may 

23 pay any income earned on cash of an obligor deposited into the fund 

24 in accordance with the agreement with the obligor under subsection (b). 

25 ‘‘(3) RETENTION AGAINST DEFAULT.—The Secretary may retain and 

26 offset any or all of the cash of an obligor in the fund, and any income 

27 realized thereon, as part of the Secretary’s recovery against the obligor 

28 in case of a default by the obligor on an obligation. 

29 ‘‘§ 53717. Management of funds in the Treasury 

30 ‘‘(a) LOAN GUARANTEES BY SECRETARY OF TRANSPORTATION.—

31 ‘‘(1) WHEN NOT SUBJECT TO ACT.—The Secretary of Transpor32 tation shall account for payments and disbursements involving obliga33 tions guaranteed under this chapter and not subject to the Federal 

34 Credit Reform Act of 1990 (2 U.S.C. 661 et seq.) in an account in 

35 the Treasury entitled the Federal Ship Financing Fund Liquidating 

36 Account. 

37 ‘‘(2) WHEN SUBJECT TO ACT.—The Secretary of Transportation 

38 shall account for payments and disbursements involving obligations 

39 guaranteed under this chapter and subject to such Act in a separate 

40 account in the Treasury entitled the Federal Ship Financing Guaran41 teed Loan Financing Account. 
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1 ‘‘(b) LOAN GUARANTEES BY SECRETARY OF COMMERCE.—

2 ‘‘(1) WHEN NOT SUBJECT TO ACT.—The Secretary of Commerce 

3 shall account for payments and disbursements involving obligations 

4 guaranteed under this chapter and not subject to such Act in a sepa5 rate account in the Treasury established for this purpose. 

6 ‘‘(2) WHEN SUBJECT TO ACT.—The Secretary of Commerce shall ac7 count for payments and disbursements involving obligations guaranteed 

8 under this chapter and subject to such Act in a separate account in 

9 the Treasury of the United States established for this purpose. 

10 ‘‘(c) DIRECT LOANS BY SECRETARY OF COMMERCE.—The Secretary of 

11 Commerce shall account for payments and disbursements involving direct 

12 loans made under this chapter in a separate account in the Treasury estab13 lished for this purpose. 

14 ‘‘§ 53718. Annual report to Congress 

15 ‘‘The Secretary of Transportation shall report to Congress annually on 

16 the loan guarantee program under this chapter. Each report shall include—

17 ‘‘(1) the size, in dollars, of the portfolio of loans guaranteed; 

18 ‘‘(2) the size, in dollars, of projects in the portfolio facing financial 

19 difficulties; 

20 ‘‘(3) the number and type of projects covered; 

21 ‘‘(4) a profile of pending loan applications; 

22 ‘‘(5) the amount of appropriations available for new guarantees; 

23 ‘‘(6) a profile of each project approved since the last report; and 

24 ‘‘(7) a profile of any defaults since the last report. 

25 ‘‘SUBCHAPTER II—DEFAULT PROVISIONS 

26 ‘‘§ 53721. Rights of obligee 

27 ‘‘(a) DEMANDS BY OBLIGEES.—Except as provided in subsection (c), if 

28 an obligor has continued in default for 30 days in the payment of principal 

29 or interest on an obligation guaranteed under this chapter, the obligee may 

30 demand that the Secretary pay the unpaid principal amount of the obliga31 tion and the unpaid interest on the obligation to the date of payment. The 

32 demand must be made within the earlier of—

33 ‘‘(1) a period that may be specified in the guarantee or a related 

34 agreement; or 

35 ‘‘(2) 90 days from the date of the default. 

36 ‘‘(b) PAYMENTS BY SECRETARY.—

37 ‘‘(1) IN GENERAL.—If a demand is made under subsection (a), the 

38 Secretary shall pay to the obligee the unpaid principal amount of the 

39 obligation and the unpaid interest on the obligation to the date of pay40 ment. Payment shall be made within the earlier of—
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1 ‘‘(A) a period that may be specified in the guarantee or a re2 lated agreement; or 

3 ‘‘(B) 30 days from the date of the demand. 

4 ‘‘(2) IF NO EXISTING DEFAULT.—The Secretary is not required to 

5 make payment under this subsection if, within the appropriate period 

6 under paragraph (1), the Secretary finds that the obligor was not in 

7 default or that the default was remedied before the demand. 

8 ‘‘(c) ASSUMPTION OF RIGHTS AND OBLIGATIONS BEFORE DEMAND.—An 

9 obligee may not demand payment under this section if the Secretary, before 

10 the demand and on terms that may be provided in the obligation or a re11 lated agreement, has assumed the obligor’s rights and duties under the obli12 gation and any related agreement and made any payment in default. How13 ever, the guarantee of the obligation remains in effect after the Secretary’s 

14 assumption. 

15 ‘‘§ 53722. Actions by Secretary 

16 ‘‘(a) GENERAL AUTHORITY.—On default under an obligation or related 

17 agreement between the Secretary and the obligor, the Secretary, on terms 

18 that may be provided in the obligation or agreement, may—

19 ‘‘(1) assume the obligor’s rights and duties under the obligation or 

20 agreement, make any payment in default, and notify the obligee of the 

21 default and the Secretary’s assumption; or 

22 ‘‘(2) notify the obligee of the default. 

23 ‘‘(b) DEMANDS BY OBLIGEES.—

24 ‘‘(1) DEMAND.—If the Secretary proceeds under subsection (a)(2), 

25 the obligee may demand that the Secretary pay the unpaid principal 

26 amount of the obligation and the unpaid interest on the obligation. The 

27 demand must be made within the earlier of—

28 ‘‘(A) a period that may be specified in the guarantee or a re29 lated agreement; or 

30 ‘‘(B) 60 days from the date of the Secretary’s notice. 

31 ‘‘(2) PAYMENT.—If a demand is made under paragraph (1), the Sec32 retary shall pay to the obligee the unpaid principal amount of the obli33 gation and the unpaid interest on the obligation to the date of pay34 ment. Payment shall be made within the earlier of—

35 ‘‘(A) a period that may be specified in the guarantee or a re36 lated agreement; or 

37 ‘‘(B) 30 days from the date of the demand. 

38 ‘‘(c) CONTINUED EFFECT OF GUARANTEE.—A guarantee of an obligation 

39 remains in effect after an assumption of the obligation by the Secretary. 

40 ‘‘(d) ADDITIONAL RESPONSES.—If there is a default on an obligation, the 

41 Secretary shall conduct operations under this chapter in a manner that—
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1 ‘‘(1) maximizes the net present value return from the sale or disposi2 tion of assets associated with the obligation, including prompt referral 

3 to the Attorney General for collection as appropriate; 

4 ‘‘(2) minimizes the amount of any loss realized in the resolution of 

5 the guarantee; 

6 ‘‘(3) ensures adequate competition and fair and consistent treatment 

7 of offerors; and 

8 ‘‘(4) requires appraisal of assets by an independent appraiser. 

9 ‘‘§ 53723. Payments by Secretary and issuance of obligations 

10 ‘‘(a) CASH PAYMENT.—Amounts required to be paid by the Secretary 

11 under section 53721 or 53722 of this title shall be paid in cash. 

12 ‘‘(b) ISSUANCE OF OBLIGATIONS.—If amounts in the appropriate account 

13 under section 53717 of this title are not sufficient to make a payment re14 quired under section 53721 or 53722 of this title, the Secretary may issue 

15 obligations to the Secretary of the Treasury. The Secretary, with the ap16 proval of the Secretary of the Treasury, shall prescribe the form, denomina17 tion, maturity, and other terms (except the interest rate) of the obligations. 

18 The Secretary of the Treasury shall set the interest rate for the obligations, 

19 considering the current average market yield on outstanding marketable ob20 ligations of the United States Government of comparable maturities during 

21 the month before the obligations are issued. 

22 ‘‘(c) PURCHASE OF OBLIGATIONS.—The Secretary of the Treasury shall 

23 purchase the obligations issued under this section. To purchase the obliga24 tions, the Secretary of the Treasury may use as a public debt transaction 

25 the proceeds from the sale of securities issued under chapter 31 of title 31. 

26 The purposes for which securities may be issued under that chapter are ex27 tended to include the purchase of obligations under this subsection. The 

28 Secretary of the Treasury may sell obligations purchased under this section. 

29 A redemption, purchase, or sale of the obligations by the Secretary of the 

30 Treasury is a public debt transaction of the Government. 

31 ‘‘(d) DEPOSITS AND REDEMPTIONS.—The Secretary shall deposit 

32 amounts borrowed under this section in the appropriate account under sec33 tion 53717 of this title and make redemptions of the obligations from that 

34 account. 

35 ‘‘§ 53724. Rights to secured property 

36 ‘‘(a) ACQUISITION OF SECURITY RIGHTS.—When the Secretary makes a 

37 payment on, or assumes, an obligation under section 53721 or 53722 of this 

38 title, the Secretary acquires the rights under the security agreement with 

39 the obligor in the security held by the Secretary to guarantee the obligation. 

40 ‘‘(b) USE AND DISPOSITION OF SECURED PROPERTY.—Notwithstanding 

41 any other law on the acquisition, handling, or disposal of property by the 
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1 United States Government, the Secretary may complete, reconstruct, recon2 dition, renovate, repair, maintain, operate, charter, or sell any property ac3 quired under a security agreement with an obligor, or may place a vessel 

4 so acquired in the National Defense Reserve Fleet. The terms of a sale 

5 under this subsection shall be as approved by the Secretary. 

6 ‘‘§ 53725. Actions against obligor 

7 ‘‘(a) IN GENERAL.—For a default under a guaranteed obligation or re8 lated agreement, the Secretary may take any action against the obligor or 

9 another liable party that the Secretary considers necessary to protect the 

10 interests of the United States Government. A civil action may be brought 

11 in the name of the Government or the obligee. The obligee shall make avail12 able to the Government all records and evidence necessary to prosecute the 

13 action. 

14 ‘‘(b) TITLE, POSSESSION, AND PURCHASE.—

15 ‘‘(1) IN GENERAL.—The Secretary may—

16 ‘‘(A) accept a conveyance of title to and possession of property 

17 from the obligor or another party liable to the Secretary; and 

18 ‘‘(B) purchase the property for an amount not greater than the 

19 unpaid principal amount of the obligation and interest thereon. 

20 ‘‘(2) PAYMENT OF EXCESS.—If, through the sale of property, the 

21 Secretary receives an amount of cash greater than the unpaid principal 

22 amount of the obligation, the unpaid interest on the obligation, and the 

23 expenses of collecting those amounts, the Secretary shall pay the excess 

24 to the obligor. 

25 ‘‘SUBCHAPTER III—PARTICULAR PROJECTS 

26 ‘‘§ 53731. Commercial demonstration ocean thermal energy 

27 conversion facilities and plantships 

28 ‘‘(a) IN GENERAL.—Under subchapter I of this chapter, the Secretary 

29 may guarantee or make a commitment to guarantee the payment of the 

30 principal of and interest on an obligation that aids in financing (including 

31 reimbursement of an obligor for expenditures previously made for) the con32 struction, reconstruction, or reconditioning of a commercial demonstration 

33 ocean thermal energy conversion facility or plantship. This section may be 

34 used to guarantee obligations for a total of not more than 5 separate facili35 ties and plantships or a demonstrated 400 megawatt capacity, whichever 

36 comes first. 

37 ‘‘(b) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise pro38 vided in this section, a guarantee or commitment to guarantee under this 

39 section is subject to all the provisions applicable to a guarantee or commit40 ment to guarantee under subchapter I of this chapter. 
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1 ‘‘(c) ECONOMIC SOUNDNESS.—The required determination of economic 

2 soundness under section 53708 of this title applies to a guarantee or com3 mitment to guarantee for that portion of a facility or plantship not to be 

4 supported with appropriated Federal funds. 

5 ‘‘(d) REASONABLENESS OF RISK.—A guarantee or commitment to guar6 antee may not be made under this section unless the Secretary of Energy, 

7 in consultation with the Secretary, certifies to the Secretary that, for the 

8 facility or plantship for which the guarantee or commitment to guarantee 

9 is sought, there is sufficient guarantee of performance and payment to lower 

10 the risk to the United States Government to a reasonable level. In deciding 

11 whether to issue such a certification, the Secretary of Energy shall con12 sider—

13 ‘‘(1) the successful demonstration of the technology to be used in the 

14 facility at a scale sufficient to establish the likelihood of technical and 

15 economic viability in the proposed market; and 

16 ‘‘(2) the need of the United States to develop new and renewable 

17 sources of energy and the benefits to be realized from the construction 

18 and successful operation of the facility or plantship. 

19 ‘‘(e) AMOUNT OF OBLIGATION.—The total principal amount of an obliga20 tion guaranteed under this section may not exceed 87.5 percent of—

21 ‘‘(1) the actual cost or depreciated actual cost of the facility or 

22 plantship; or 

23 ‘‘(2) if the facility or plantship is supported with appropriated Fed24 eral funds, the total principal amount of that portion of the actual cost 

25 or depreciated actual cost for which the obligor is obligated to secure 

26 financing under the agreement between the obligor and the Department 

27 of Energy or other Federal agency. 

28 ‘‘(f) OTEC DEMONSTRATION FUND.—

29 ‘‘(1) IN GENERAL.—There is a special subaccount, known as the 

30 OTEC Demonstration Fund, in the account established under section 

31 53717(a)(1) of this title. 

32 ‘‘(2) USE AND OPERATION.—The OTEC Demonstration Fund shall 

33 be used for obligation guarantees authorized under this section that do 

34 not qualify under subchapter I of this chapter. Except as otherwise 

35 provided in this section, the OTEC Demonstration Fund shall be oper36 ated in the same manner as the parent account. However—

37 ‘‘(A) amounts received by the Secretary under subchapter I of 

38 this chapter related to guarantees or commitments to guarantee 

39 made under this section shall be deposited only in the OTEC 

40 Demonstration Fund; and 
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1 ‘‘(B) when obligations issued by the Secretary under section 

2 53723 of this title related to the OTEC Demonstration Fund are 

3 outstanding, any amount received by the Secretary under sub4 chapter I of this chapter related to ocean thermal energy conver5 sion facilities or plantships shall be deposited in the OTEC Dem6 onstration Fund. 

7 ‘‘(3) TRANSFERS.—Assets in the OTEC Demonstration Fund may 

8 be transferred to the parent account when and to the extent the bal9 ance in the OTEC Demonstration Fund exceeds the total guarantees 

10 or commitments to guarantee made under this section then out11 standing, plus obligations issued by the Secretary under section 53723 

12 of this title related to the OTEC Demonstration Fund. 

13 ‘‘(4) LIABILITY.—The parent account is not liable for a guarantee 

14 or commitment to guarantee made under this section. 

15 ‘‘(5) MAXIMUM UNPAID PRINCIPAL AMOUNT.—The total unpaid prin16 cipal amount of the obligations guaranteed with the backing of the 

17 OTEC Demonstration Fund and outstanding at any one time may not 

18 exceed $1,650,000,000. 

19 ‘‘(g) ISSUANCE AND PAYMENT OF OBLIGATIONS.—Section 53723 of this 

20 title applies to the OTEC Demonstration Fund. However, obligations issued 

21 by the Secretary under that section related to the OTEC Demonstration 

22 Fund shall be payable only from proceeds realized by the OTEC Dem23 onstration Fund. 

24 ‘‘(h) TAXATION OF INTEREST.—Interest on an obligation guaranteed 

25 under this section shall be included in gross income under chapter 1 of the 

26 Internal Revenue Code of 1986 (26 U.S.C. ch. 1). 

27 ‘‘§ 53732. Eligible export vessels 

28 ‘‘(a) APPLICABLE TERMS.—The Secretary may guarantee an obligation 

29 for an eligible export vessel in accordance with—

30 ‘‘(1) the terms applicable under this chapter for vessels documented 

31 under the laws of the United States; or 

32 ‘‘(2) other terms the Secretary determines are more favorable than 

33 those terms and compatible with export credit terms offered by foreign 

34 governments for the sale of vessels built in foreign shipyards. 

35 ‘‘(b) INTERAGENCY COUNCIL.—

36 ‘‘(1) ESTABLISHMENT.—There is an interagency council to carry out 

37 this section. 

38 ‘‘(2) COMPOSITION.—The council is composed of the following indi39 viduals or their designees: 

40 ‘‘(A) The Secretary of Transportation, who is the chairman of 

41 the council. 
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1 ‘‘(B) The Secretary of the Treasury. 

2 ‘‘(C) The Secretary of State. 

3 ‘‘(D) The Assistant to the President for Economic Policy. 

4 ‘‘(E) The United States Trade Representative. 

5 ‘‘(F) The President and Chairman of the Export-Import Bank 

6 of the United States. 

7 ‘‘(3) FUNCTIONS.—The council shall—

8 ‘‘(A) obtain information on shipbuilding loan guarantees, direct 

9 and indirect subsidies, and other favorable treatment of shipyards 

10 provided by foreign governments to shipyards in competition with 

11 United States shipyards; 

12 ‘‘(B) consult regularly with United States shipbuilders to obtain 

13 the essential information about international shipbuilding competi14 tion on which to set terms for loan guarantees under subsection 

15 (a)(2); and 

16 ‘‘(C) provide guidance to the Secretary in establishing terms for 

17 loan guarantees under subsection (a)(2). 

18 ‘‘(4) ANNUAL REPORT.—Not later than January 31 of each year, the 

19 Secretary shall submit to Congress a report on activities of the Sec20 retary under this section during the preceding year. The report shall 

21 include—

22 ‘‘(A) documentation of sources of information about assistance 

23 by governments of other countries to shipyards in those countries; 

24 and 

25 ‘‘(B) a summary of recommendations made to the Secretary 

26 during the preceding year about applications submitted to the Sec27 retary during that year for loan guarantees to construct eligible 

28 export vessels. 

29 ‘‘(c) REQUIRED FINDINGS.—

30 ‘‘(1) BENEFIT TO SHIPBUILDING INDUSTRY.—The Secretary may 

31 not guarantee or make a commitment to guarantee an obligation for 

32 an eligible export vessel unless the Secretary finds that the construc33 tion, reconstruction, or reconditioning of the vessel will aid in the tran34 sition of United States shipyards to commercial activities or will pre35 serve shipbuilding assets that would be essential in time of war or na36 tional emergency. 

37 ‘‘(2) PRIORITY OF DOCUMENTED VESSELS.—The Secretary may not 

38 make a commitment to guarantee an obligation for an eligible export 

39 vessel unless the Secretary determines that making the commitment 

40 will not result in denial of an economically sound application for a com41 mitment to guarantee an obligation for a vessel documented under the 
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1 laws of the United States and operating in the domestic or foreign 

2 commerce of the United States. The Secretary has sole discretion in 

3 making the determination. In making the determination, the Secretary 

4 shall consider—

5 ‘‘(A) the status and economic soundness of pending applications 

6 for commitments to guarantee obligations for vessels documented 

7 under the laws of the United States that are operating or will be 

8 operating in the domestic or foreign commerce of the United 

9 States; and 

10 ‘‘(B) the amount of guarantee authority available.

11 ‘‘(d) RESTRICTION ON TRANSFER OF VESSEL.—The Secretary may not 

12 guarantee or make a commitment to guarantee an obligation for an eligible 

13 export vessel unless the owner of the vessel agrees with the Secretary that 

14 the vessel will not be transferred to a country designated by the Secretary 

15 of Defense as a country whose interests are hostile to the interests of the 

16 United States. 

17 ‘‘(e) REVIEW BY SECRETARY OF DEFENSE.—

18 ‘‘(1) NOTIFICATION.—The Secretary shall promptly notify the Sec19 retary of Defense of the receipt of an application for a loan guarantee 

20 for an eligible export vessel. 

21 ‘‘(2) DISAPPROVAL.—The Secretary of Defense, within 30 days after 

22 receiving the notice, may disapprove the guarantee based on an assess23 ment of the potential use of the vessel in a manner that may harm the 

24 national security interests of the United States. The Secretary may not 

25 disapprove a guarantee solely because of the type of vessel to be con26 structed. 

27 ‘‘(3) DELEGATION.—The authority of the Secretary of Defense to 

28 disapprove a guarantee under this subsection may be delegated only to 

29 a civilian officer of the Department of Defense appointed by the Presi30 dent by and with the advice and consent of the Senate. 

31 ‘‘(4) PROHIBITION.—The Secretary may not make a loan guarantee 

32 disapproved by the Secretary of Defense under this subsection. 

33 ‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary may not issue a com34 mitment to guarantee an obligation for an eligible export vessel under this 

35 chapter after the last date on which such a commitment may be issued 

36 under any treaty or convention entered into after November 30, 1993, that 

37 prohibits guarantee of such an obligation. 

38 ‘‘§ 53733. Shipyard modernization and improvement 

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

40 ‘‘(1) ADVANCED SHIPBUILDING TECHNOLOGY.—The term ‘advanced 

41 shipbuilding technology’ includes—
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1 ‘‘(A) numerically controlled machine tools, robots, automated 

2 process control equipment, computerized flexible manufacturing 

3 systems, associated computer software, and other technology for 

4 improving shipbuilding and related industrial production that ad5 vance the state-of-the-art; and 

6 ‘‘(B) novel techniques and processes designed to improve ship7 building quality, productivity, and practice, and to promote sus8 tainable development, including engineering design, quality assur9 ance, concurrent engineering, continuous process production tech10 nology, energy efficiency, waste minimization, design for 

11 recyclability or parts reuse, inventory management, upgraded 

12 worker skills, and communications with customers and suppliers. 

13 ‘‘(2) GENERAL SHIPYARD FACILITY.—The term ‘general shipyard fa14 cility’ means—

15 ‘‘(A) for operations on land—

16 ‘‘(i) a structure or appurtenance thereto designed for the 

17 construction, reconstruction, repair, rehabilitation, or refur18 bishment of a vessel, including a graving dock, building way, 

19 ship lift, wharf, or pier crane; 

20 ‘‘(ii) the land necessary for the structure or appurtenance; 

21 and 

22 ‘‘(iii) equipment that is for use with the structure or ap23 purtenance and that is necessary for performing a function 

24 referred to in subclause (i); and 

25 ‘‘(B) for operations not on land, a vessel, floating drydock, or 

26 barge built in the United States and used for, equipped to be used 

27 for, or of a type normally used for, performing a function referred 

28 to in subclause (A)(i). 

29 ‘‘(3) MODERN SHIPBUILDING TECHNOLOGY.—The term ‘modern 

30 shipbuilding technology’ means the best available proven technology, 

31 techniques, and processes appropriate to enhancing the productivity of 

32 shipyards. 

33 ‘‘(b) GENERAL AUTHORITY.—Under subchapter I of this chapter, the 

34 Secretary may guarantee or make a commitment to guarantee the payment 

35 of the principal of and interest on an obligation for advanced shipbuilding 

36 technology and modern shipbuilding technology of a general shipyard facility 

37 in the United States. Only a private shipyard is eligible to receive a guar38 antee. 

39 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise pro40 vided in this section, a guarantee or commitment to guarantee under this 
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1 section is subject to all the provisions applicable to a guarantee or commit2 ment to guarantee under subchapter I of this chapter. 

3 ‘‘(d) AMOUNT OF OBLIGATION.—The principal amount of an obligation 

4 guaranteed under this chapter may not exceed 87.5 percent of the actual 

5 cost of the advanced shipbuilding technology or modern shipbuilding tech6 nology. 

7 ‘‘(e) TRANSFER OF AMOUNTS.—The Secretary may accept the transfer 

8 of amounts from a department, agency, or instrumentality of the United 

9 States Government and may use those amounts to cover the cost (as defined 

10 in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 

11 of making guarantees or commitments to guarantee under this section. 

12 ‘‘§ 53734. Replacement of vessels because of changes in oper13 ating standards 

14 ‘‘(a) GENERAL AUTHORITY.—Notwithstanding any other provision of this 

15 chapter, the Secretary, on terms the Secretary may prescribe, may guar16 antee or make a commitment to guarantee the payment of the principal of 

17 and interest on an obligation that aids in financing or refinancing (including 

18 reimbursement of an obligor for expenditures previously made for) a con19 tract for the construction or reconstruction of a vessel if—

20 ‘‘(1) the vessel is designed and to be used for commercial use in 

21 coastwise, intercoastal, or foreign trade; 

22 ‘‘(2) the construction or reconstruction is necessary to replace a ves23 sel that cannot continue to be operated because of a change required 

24 by law in the standards for the operation of vessels, and the applicant 

25 for the guarantee or commitment would not otherwise legally be able 

26 to continue operating vessels in the trades in which the applicant oper27 ated vessels before the change; 

28 ‘‘(3) the applicant is presently engaged in transporting cargoes in 

29 vessels of the type and class that will be constructed or reconstructed 

30 under this section and agrees to employ vessels constructed or recon31 structed under this section as replacements only for vessels made obso32 lete by the change in operating standards; 

33 ‘‘(4) the capacity of the vessels to be constructed or reconstructed 

34 under this section will not increase the cargo carrying capacity of the 

35 vessels being replaced; 

36 ‘‘(5) the Secretary has not determined that the market demand for 

37 the vessel over its useful life will diminish so as to make granting the 

38 guarantee fiduciarily imprudent; 

39 ‘‘(6) the vessel, if to be reconstructed, will have a useful life of at 

40 least 15 years after the reconstruction; and 
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1 ‘‘(7) the Secretary has considered the criteria specified in section 

2 53708(a)(3)–(5) of this title. 

3 ‘‘(b) TERM AND AMOUNT OF OBLIGATION.—

4 ‘‘(1) TERM.—The term of an obligation guaranteed under this sec5 tion may not exceed 25 years. 

6 ‘‘(2) AMOUNT.—The amount of an obligation guaranteed under this 

7 section may not exceed 87.5 percent of the actual cost or depreciated 

8 actual cost to the applicant for the construction or reconstruction of 

9 the vessel. The Secretary may not establish a percentage under this 

10 paragraph that is to be applied uniformly to all guarantees or commit11 ments to guarantee made under this section. 

12 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—

13 ‘‘(1) IN GENERAL.—A guarantee or commitment to guarantee under 

14 this section is also subject to sections 53701, 53702(a), 53704, 53705, 

15 53707(a), 53708(d) and (e), 53709(a), 53710(a)(1), (2), and (4) and 

16 (c), 53711(a), 53713, 53714, 53717, and 53721–53725 of this title. 

17 ‘‘(2) LIABILITY OF CERTAIN ACCOUNTS.—The account under section 

18 53717 of this title is not liable for a guarantee or commitment to guar19 antee made under this section. 

20 ‘‘(d) SECURITY AGAINST DEFAULT.—The Secretary shall require by reg21 ulation that an applicant under this section provide adequate security 

22 against default. 

23 ‘‘(e) GUARANTEE FEES.—The Secretary may establish a fee for the guar24 antee of an obligation under this section that is in addition to the fee estab25 lished under section 53714 of this title. The fee may be—

26 ‘‘(1) an annual fee of not more than an additional 1 percent added 

27 to the fee established under section 53714 of this title; or 

28 ‘‘(2) a fee based on the amount of the obligation versus the percent29 age of the obligor’s fleet being replaced by vessels constructed or recon30 structed under this section. 

31 ‘‘(f) VESSEL REPLACEMENT GUARANTEE FUND.—

32 ‘‘(1) IN GENERAL.—The Secretary may establish a Vessel Replace33 ment Guarantee Fund as a subaccount in the account established 

34 under section 53717(a)(1) of this title. 

35 ‘‘(2) DEPOSITS.—The Secretary shall deposit in the Fund—

36 ‘‘(A) amounts received by the Secretary under subchapter I of 

37 this chapter (except sections 53715 and 53716) related to guaran38 tees or commitments to guarantee made under this section; 

39 ‘‘(B) amounts received by the Secretary under subchapter I of 

40 this chapter (except sections 53715 and 53716) from applicants 

41 under this section when obligations issued by the Secretary under 
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1 section 53723 of this title related to the Fund are outstanding; 

2 and 

3 ‘‘(C) fees collected under subsection (e). 

4 ‘‘(3) DEPOSIT OF ADMINISTRATIVE FEES.—Fees payable under sec5 tion 53713 of this title shall be deposited in the account established 

6 under section 53717(a)(1) of this title and not in the Fund. 

7 ‘‘(4) LIABILITY.—The account established under section 53717(a)(1) 

8 of this title is not liable for a guarantee or commitment to guarantee 

9 made under this section. 

10 ‘‘§ 53735. Fisheries financing and capacity reduction 

11 ‘‘(a) DEFINITION.—In this section, the term ‘program’ means a fishing 

12 capacity reduction program established under section 312 of the Magnuson13 Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a). 

14 ‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee the repay15 ment of debt obligations issued by entities under this section. Debt obliga16 tions to be guaranteed may be issued by any entity that has been approved 

17 by the Secretary and has agreed with the Secretary to conditions the Sec18 retary considers necessary for this section to achieve the objective of the 

19 program and to protect the interest of the United States. 

20 ‘‘(c) REQUIREMENTS OF OBLIGATIONS.—A debt obligation guaranteed 

21 under this section shall—

22 ‘‘(1) be treated in the same manner and to the same extent as other 

23 obligations guaranteed under this chapter, except with respect to provi24 sions of this chapter that by their nature cannot be applied to obliga25 tions guaranteed under this section; 

26 ‘‘(2) have the fishing fees established under the program paid into 

27 a separate subaccount of the fishing capacity reduction fund estab28 lished under this section; 

29 ‘‘(3) not exceed $100,000,000 in an unpaid principal amount out30 standing at any one time for a program; 

31 ‘‘(4) have such maturity (not to exceed 20 years), take such form, 

32 and contain such conditions as the Secretary determines necessary for 

33 the program to which they relate; 

34 ‘‘(5) have as the exclusive source of repayment (subject to the second 

35 sentence of subsection (d)(2)) and as the exclusive payment security, 

36 the fishing fees established under the program; and 

37 ‘‘(6) at the discretion of the Secretary be issued in the public market 

38 or sold to the Federal Financing Bank. 

39 ‘‘(d) FISHING CAPACITY REDUCTION FUND.—

40 ‘‘(1) IN GENERAL.—There is a separate account in the Treasury, 

41 known as the Fishing Capacity Reduction Fund. Within the Fund, at 
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1 least one subaccount shall be established for each program into which 

2 shall be paid all fishing fees established under the program and other 

3 amounts authorized for the program. 

4 ‘‘(2) AVAILABILITY OF AMOUNTS.—Amounts in the Fund shall be 

5 available, without appropriation or fiscal year limitation, to the Sec6 retary to pay the cost of the program, including payments to financial 

7 institutions to pay debt obligations incurred by entities under this sec8 tion. Funds available for this purpose from other amounts available for 

9 the program may also be used to pay those debt obligations. 

10 ‘‘(3) INVESTMENT.—Amounts in the Fund that are not currently 

11 needed for the purpose of this section shall be kept on deposit or in12 vested in obligations of the United States Government. 

13 ‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations the Sec14 retary considers necessary to carry out this section.

15 ‘‘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. 

16 ‘‘§ 53901. Definitions 

17 ‘‘In this chapter: 

18 ‘‘(1) AMERICAN VESSEL.—The term ‘American vessel’ includes—

19 ‘‘(A) a documented vessel with a registry or coastwise endorse20 ment under chapter 121 of this title; 

21 ‘‘(B) an undocumented vessel owned or chartered by or made 

22 available to the United States Government; and 

23 ‘‘(C) a tug, barge, or other watercraft (whether or not docu24 mented) owned by a citizen of the United States and used in es25 sential water transportation or in the fisheries, except only for 

26 sport fishing. 

27 ‘‘(2) CARGO.—The term ‘cargo’ includes a loaded or empty container 

28 on a vessel. 

29 ‘‘(3) TRANSPORTATION IN THE WATERBORNE COMMERCE OF THE

30 UNITED STATES.—The term ‘transportation in the waterborne com31 merce of the United States’ includes the operation of a vessel in the 

32 fisheries, except only for sport fishing. 
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1 ‘‘(4) WAR RISKS.—The term ‘war risks’ includes, to the extent the 

2 Secretary of Transportation determines—

3 ‘‘(A) any part of a loss excluded from marine insurance cov4 erage under a ‘free of capture or seizure’ clause or analogous 

5 clause; and 

6 ‘‘(B) any other loss from a hostile act, including confiscation, 

7 expropriation, nationalization, or deprivation.

8 ‘‘§ 53902. Authority to provide insurance 

9 ‘‘(a) IN GENERAL.—With the approval of the President, and after such 

10 consultation with interested agencies of United States Government as the 

11 President may require, the Secretary of Transportation may provide insur12 ance and reinsurance against loss or damage from war risks as provided by 

13 this chapter whenever it appears to the Secretary that insurance adequate 

14 for the needs of the waterborne commerce of the United States cannot be 

15 obtained on reasonable terms and conditions from companies authorized to 

16 do insurance business in a State of the United States. 

17 ‘‘(b) CONSIDERATION OF RISK.—Insurance or reinsurance under this 

18 chapter shall be based, insofar as practicable, on consideration of the risk 

19 involved. 

20 ‘‘(c) AVAILABILITY OF VESSEL DURING WAR OR NATIONAL EMER21 GENCY.—Insurance or reinsurance for a vessel may be provided under this 

22 chapter only on the condition that the vessel will be available to the Govern23 ment in time of war or national emergency. 

24 ‘‘§ 53903. Insurable interests 

25 ‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur26 ance and reinsurance under this chapter for—

27 ‘‘(1) an American vessel, including a vessel under construction; 

28 ‘‘(2) a foreign vessel—

29 ‘‘(A) owned by a citizen of the United States; or 

30 ‘‘(B) engaged in transportation in the waterborne commerce of 

31 the United States or in such other transportation by water or such 

32 other services as the Secretary considers to be in the interest of 

33 the national defense or national economy of the United States, 

34 when so engaged; 

35 ‘‘(3) cargo—

36 ‘‘(A) shipped or to be shipped on a vessel insurable under this 

37 section, including by express or registered mail; 

38 ‘‘(B) owned by a citizen or resident of the United States; 

39 ‘‘(C) imported to or exported from the United States, or sold 

40 or purchased by a citizen or resident of the United States, under 

41 a contract of sale or purchase the terms of which provide that the 
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1 risk of loss by war risks or the obligation to provide insurance 

2 against war risks is on a citizen or resident of the United States; 

3 or 

4 ‘‘(D) shipped between ports in the United States; 

5 ‘‘(4) disbursements, including advances to masters and general aver6 age disbursements, and freight and passage money of a vessel insurable 

7 under this section; 

8 ‘‘(5) personal effects of an individual on a vessel insurable under this 

9 section; 

10 ‘‘(6) loss of life, injury, or detention by an enemy of the United 

11 States after capture, with respect to an individual on a vessel insurable 

12 under this section; and 

13 ‘‘(7) statutory or contractual obligations or other liabilities of a ves14 sel insurable under this section or of the owner or charterer of such 

15 a vessel, of a nature customarily covered by insurance. 

16 ‘‘(b) CONSIDERATIONS FOR FOREIGN VESSELS.—In determining whether 

17 to provide insurance or reinsurance for a foreign vessel, the Secretary shall 

18 consider the characteristics, employment, and general management of the 

19 vessel by the owner or charterer. 

20 ‘‘(c) NON-WAR RISKS.—Insurance of a risk under subsection (a)(5)–(7), 

21 insofar as it involves a liability related to an individual on the vessel, may 

22 include risks other than war risks to the extent the Secretary considers ad23 visable. 

24 ‘‘§ 53904. Liability insurance for persons involved in war or 

25 defense efforts 

26 ‘‘(a) IN GENERAL.—The Secretary of Transportation may provide insur27 ance under this chapter against legal liability that a person may incur in 

28 providing services or facilities for a vessel if, in the opinion of the Secretary, 

29 the insurance—

30 ‘‘(1) is required in prosecuting a war or for national defense; and 

31 ‘‘(2) cannot be obtained at reasonable rates or on reasonable terms 

32 and conditions from approved companies authorized to do insurance 

33 business in a State of the United States. 

34 ‘‘(b) LIMITATIONS.—Employer liability insurance and worker compensa35 tion insurance against legal liability to employees may not be provided under 

36 this section. 

37 ‘‘§ 53905. Agency insurance 

38 ‘‘(a) IN GENERAL.—With the approval of the President, an agency of the 

39 United States Government may obtain insurance provided for by this chap40 ter from the Secretary of Transportation, except as provided in sections 

41 17302 and 17303 of title 40. 
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1 ‘‘(b) PREMIUM WAIVERS.—With the approval of the President, the Sec2 retary of Transportation may provide insurance under this chapter at the 

3 request of the Secretary of Defense and other agencies the President may 

4 prescribe, without payment of an insurance premium if the Secretary of De5 fense or agency agrees to indemnify the Secretary of Transportation against 

6 loss covered by the insurance. The Secretary of Defense and agencies may 

7 make such an indemnity agreement. 

8 ‘‘(c) PRESIDENTIAL APPROVAL.—The signature of the President (or an 

9 official designated by the President) on the agreement shall be treated as 

10 the approval required by section 53902(a) of this title. 

11 ‘‘§ 53906. Hull insurance valuation 

12 ‘‘(a) STATED VALUATION.—The valuation in a hull insurance policy for 

13 actual or constructive total loss of the insured vessel shall be a stated valu14 ation determined by the Secretary of Transportation. The stated valu15 ation—

16 ‘‘(1) shall exclude national defense features paid for by the United 

17 States Government; and 

18 ‘‘(2) may not exceed the amount that would be payable if the owner19 ship of the vessel had been requisitioned under chapter 563 of this title 

20 at the time the insurance attached under the policy. 

21 ‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the insur22 ance attaches under a policy referred to in subsection (a) or within 60 days 

23 after the Secretary determines the valuation, whichever is later, the insured 

24 may reject the valuation and pay, at the rate provided in the policy, pre25 miums based on the asserted valuation the insured specifies at the time of 

26 rejection. However, the asserted valuation is not binding on the Government 

27 in any subsequent action on the policy. 

28 ‘‘(c) AMOUNT OF CLAIM.—If a vessel is actually or constructively totally 

29 lost and the insured under a policy referred to in subsection (a) has not 

30 rejected the stated valuation determined by the Secretary, the amount of a 

31 claim adjusted, compromised, settled, adjudged, or paid may not exceed the 

32 stated valuation. However, if the insured has rejected the valuation, the in33 sured—

34 ‘‘(1) shall be paid, as a tentative advance only, 75 percent of the 

35 stated valuation; and 

36 ‘‘(2) may bring a civil action against the Government in a court hav37 ing jurisdiction of the claim to recover a valuation equal to the just 

38 compensation the court determines would have been payable if the own39 ership of the vessel had been requisitioned under chapter 563 of this 

40 title at the time the insurance attached under the policy. 
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1 ‘‘(d) ADJUSTING PREMIUMS.—If a court makes a determination as pro2 vided under subsection (c)(2), premiums paid under the policy shall be ad3 justed based on the court’s determination and the rates provided for in the 

4 policy. 

5 ‘‘§ 53907. Reinsurance 

6 ‘‘(a) IN GENERAL.—To the extent the Secretary of Transportation is au7 thorized to provide insurance under this chapter, the Secretary may provide 

8 reinsurance to a company authorized to do insurance business in a State

9 of the United States. The Secretary may obtain reinsurance from such a 

10 company for any insurance provided by the Secretary under this chapter. 

11 ‘‘(b) RATES.—The Secretary may not provide reinsurance at rates less 

12 than, nor obtain reinsurance at rates more than, the rates established by 

13 the Secretary on the same or similar risks or the rates charged by the insur14 ance company for the insurance reinsured, whichever is more advantageous 

15 to the Secretary. However, the Secretary may provide an allowance to the 

16 insurance company for the costs of services and facilities the company pro17 vides, in an amount the Secretary considers reasonable according to good 

18 business practice. The allowance to the company may not include any 

19 amount for soliciting or stimulating insurance business. 

20 ‘‘§ 53908. Additional insurance privately obtained 

21 ‘‘With the approval of the Secretary of Transportation, a person having 

22 an insurable interest in a vessel may obtain insurance on the vessel with 

23 other underwriting agents in addition to the insurance with the Secretary. 

24 The Secretary is not entitled to the benefit of the additional insurance. 

25 ‘‘§ 53909. War risk insurance revolving fund 

26 ‘‘(a) IN GENERAL.—There is a war risk insurance revolving fund in the 

27 Treasury. 

28 ‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts appro29 priated to carry out this chapter and amounts received in carrying out this 

30 chapter. 

31 ‘‘(c) PAYMENTS.—There shall be paid from the fund amounts for return 

32 premiums, losses, settlements, judgments, and all liabilities incurred by the 

33 United States Government under this chapter. 

34 ‘‘(d) INVESTMENT.—On request of the Secretary of Transportation, the 

35 Secretary of the Treasury may invest or reinvest any part of the fund in 

36 securities of the Government or securities whose principal and interest are 

37 guaranteed by the Government. Interest and benefits from the securities 

38 shall be deposited in the fund. 
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1 ‘‘§ 53910. Administrative 

2 ‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying out this 

3 chapter, the Secretary of Transportation may act in accordance with com4 mercial practice in the marine insurance business. 

5 ‘‘(b) REGULATIONS.—The Secretary may prescribe regulations the Sec6 retary considers appropriate to carry out this chapter. 

7 ‘‘(c) POLICIES, RATES, AND ANNUAL FEES.—The Secretary may pre8 scribe and change forms and policies, and fix and change the amounts in9 sured and rates of premium, under this chapter. 

10 ‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an annual 

11 fee in an amount calculated to cover the expenses of processing applications 

12 for insurance, employing underwriting agents, and appointing experts under 

13 this chapter. 

14 ‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may settle 

15 and pay claims, and pay judgments against the United States Government, 

16 related to insurance under this chapter. 

17 ‘‘(f) UNDERWRITING AGENTS.—

18 ‘‘(1) IN GENERAL.—The Secretary may, and when the Secretary 

19 finds it practical to do so shall, employ a domestic company or group 

20 of domestic companies, authorized to do marine insurance business in 

21 a State of the United States, to act as underwriting agent for the Sec22 retary. The services of an underwriting agent may be used in adjusting 

23 claims, but a claim may not be paid until approved by the Secretary. 

24 ‘‘(2) COMPENSATION.—The Secretary may allow the company or 

25 group of companies reasonable compensation for services as the under26 writing agent. The compensation may include an allowance for expenses 

27 reasonably incurred by the agent, but may not include any amount for 

28 soliciting or stimulating business. 

29 ‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in sub30 section (f)(2), the Secretary may not pay an insurance broker or other per31 son acting in a similar intermediary capacity a fee or other consideration 

32 for participating in arranging insurance when the Secretary directly insures 

33 any of the risk. 

34 ‘‘(h) EMPLOYMENT OF MARINE INSURANCE EXPERTS.—The Secretary, 

35 without regard to the laws and regulations on the employment of Federal 

36 employees, may appoint and prescribe the duties of experts in marine insur37 ance as the Secretary considers necessary to carry out this chapter. 

38 ‘‘(i) SERVICES OF OTHER GOVERNMENT AGENCIES.—With the consent of 

39 another Government agency, the Secretary may use information, services, 

40 facilities, officers, and employees of the agency in carrying out this chapter. 
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1 ‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may prescribe by 

2 regulation vessel location reporting requirements for a vessel insured under 

3 this chapter. 

4 ‘‘§ 53911. Civil actions for losses 

5 ‘‘(a) IN GENERAL.—If there is a disagreement about a loss insured under 

6 this chapter, a civil action in admiralty may be brought against the United 

7 States Government in the district court of the United States for the district 

8 in which the plaintiff or the plaintiff’s agent resides. If the plaintiff has no 

9 residence in the United States, the action may be brought in the United 

10 States District Court for the District of Columbia or in the district court 

11 for any district in which the Attorney General agrees to accept service. Any 

12 person who may have an interest in the insurance may be made a party, 

13 either initially or on the motion of either party. 

14 ‘‘(b) EXCLUSIVE REMEDY.—A civil action against the Government under 

15 this section is exclusive of any other action by reason of the same subject 

16 matter against an officer, employee, or agent employed or retained by the 

17 Government under this chapter. 

18 ‘‘(c) PROCEDURE.—A civil action under this section shall be heard and 

19 determined under chapter 309 of this title. 

20 ‘‘(d) TOLLING OF LIMITATIONS PERIOD.—If a claim is filed with the Sec21 retary of Transportation, the running of the limitations period for bringing 

22 a civil action is suspended until the Secretary denies the claim, and for 60 

23 days thereafter. The Secretary is deemed to have denied the claim if the 

24 Secretary does not act on the claim within 6 months after the claim is filed, 

25 unless the Secretary for good cause shown agrees with the claimant on a 

26 different period for the Secretary to act on the claim. 

27 ‘‘(e) INTERPLEADER.—If the Secretary acknowledges the indebtedness of 

28 the Government under the insurance and there is a dispute about the per29 sons entitled to receive payment, the Government may bring a civil action 

30 interpleading those persons. The action shall be brought in the United 

31 States District Court for the District of Columbia or in the district court 

32 for the district in which any of those persons resides. A person not residing 

33 or found in the district may be made a party by service in any reasonable 

34 manner the court directs. If the court is satisfied that unknown persons 

35 might make a claim under the insurance, the court may direct service on 

36 those unknown persons by publication in the Federal Register. Judgment 

37 after service by publication in the Federal Register discharges the Govern38 ment from further liability to all persons. 

39 ‘‘§ 53912. Expiration date 

40 ‘‘The authority of the Secretary of Transportation to provide insurance 

41 and reinsurance under this chapter expires on June 30, 2005.
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1 ‘‘PART D—PROMOTIONAL PROGRAMS

2 ‘‘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. 

3 ‘‘§ 55101. Application of coastwise laws 

4 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), the coastwise 

5 laws apply to the United States, including the island territories and posses6 sions of the United States. 

7 ‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to—

8 ‘‘(1) the Virgin Islands until the President declares by proclamation 

9 that the coastwise laws apply to the Virgin Islands; or 

10 ‘‘(2) American Samoa. 

11 ‘‘§ 55102. Transportation of merchandise 

12 ‘‘(a) DEFINITION.—In this section, the term ‘merchandise’ includes—

13 ‘‘(1) merchandise owned by the United States Government, a State, 

14 or a subdivision of a State; and 

15 ‘‘(2) valueless material. 

16 ‘‘(b) REQUIREMENTS.—Except as otherwise provided in this chapter or 

17 chapter 121 of this title, a vessel may not provide any part of the transpor18 tation of merchandise by water, or by land and water, between points in 

19 the United States to which the coastwise laws apply, either directly or via 

20 a foreign port, unless the vessel has been issued a certificate of documenta21 tion with a coastwise endorsement under chapter 121. 

22 ‘‘(c) PENALTY.—Merchandise transported in violation of subsection (b) is 

23 liable to seizure by and forfeiture to the Government. Alternatively, an 

24 amount equal to the value of the merchandise (as determined by the Sec25 retary of Homeland Security) or the actual cost of the transportation, 

26 whichever is greater, may be recovered from any person transporting the 

27 merchandise or causing the merchandise to be transported. 
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1 ‘‘§ 55103. Transportation of passengers 

2 ‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter or chap3 ter 121 of this title, a foreign vessel may not transport passengers between 

4 ports or places in the United States, either directly or via a foreign port. 

5 ‘‘(b) PENALTY.—The penalty for violating subsection (a) is $200 for each 

6 passenger transported and landed. 

7 ‘‘§ 55104. Transportation of passengers between Puerto Rico 

8 and other ports in the United States 

9 ‘‘(a) DEFINITIONS.—In this section:

10 ‘‘(1) CERTIFICATE.—The term ‘certificate’ means a certificate of fi11 nancial responsibility for indemnification of passengers for nonperform12 ance of transportation issued by the Federal Maritime Commission 

13 under section 44102 of this title. 

14 ‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ means a ves15 sel of similar size, or offering similar service, as any other vessel trans16 porting passengers under subsection (b). 

17 ‘‘(b) EXEMPTION.—Except as otherwise provided in this section, a vessel 

18 not qualified to engage in the coastwise trade may transport passengers be19 tween a port in Puerto Rico and another port in the United States. 

20 ‘‘(c) EXPIRATION OF EXEMPTION.—

21 ‘‘(1) WHEN COASTWISE-QUALIFIED VESSEL OFFERING SERVICE.—On 

22 a showing to the Secretary of the department in which the Coast Guard 

23 is operating, by the vessel owner or charterer, that a United States 

24 passenger vessel qualified to engage in the coastwise trade is offering 

25 or advertising passenger service between a port in Puerto Rico and an26 other port in the United States pursuant to a certificate, the Secretary 

27 shall notify the owner or operator of each vessel transporting pas28 sengers under subsection (b) to terminate that transportation within 

29 270 days after the Secretary’s notification. Except as provided in sub30 section (d), the authority to transport passengers under subsection (b) 

31 expires at the end of that 270-day period. 

32 ‘‘(2) WHEN NON-COASTWISE-QUALIFIED VESSEL OFFERING SERV33 ICE.—On a showing to the Secretary, by the vessel owner or charterer, 

34 that a United States passenger vessel not qualified to engage in the 

35 coastwise trade is offering or advertising passenger service between a 

36 port in Puerto Rico and another port in the United States pursuant 

37 to a certificate, the Secretary shall notify the owner or operator of each 

38 foreign vessel transporting passengers under subsection (b) to termi39 nate that transportation within 270 days after the Secretary’s notifica40 tion. Except as provided in subsection (d), the authority of a foreign 
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1 vessel to transport passengers under subsection (b) expires at the end 

2 of that 270-day period. 

3 ‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising the 

4 service described in subsection (c) has not begun that service within 270 

5 days after the Secretary’s notification, the expiration provided by subsection 

6 (c) is delayed until 90 days after the vessel offering or advertising the serv7 ice begins that service. 

8 ‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that the 

9 service on which an expiration was based is no longer available, the expired 

10 authority to transport passengers is reinstated. 

11 ‘‘§ 55105. Transportation of hazardous waste 

12 ‘‘(a) IN GENERAL.—The transportation of hazardous waste, as defined in 

13 section 1004(5) of the Resource Conservation and Recovery Act of 1976 (42 

14 U.S.C. 6903(5)), from a point in the United States to sea for incineration 

15 is deemed to be transportation of merchandise under section 55102 of this 

16 title. 

17 ‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.—

18 ‘‘(1) IN GENERAL.—Subsection (a) does not apply to transportation 

19 performed by a foreign-flag ocean incineration vessel owned by or 

20 under construction on May 1, 1982, for a corporation wholly owned by 

21 citizens of the United States under section 50501(a)–(c) of this title. 

22 ‘‘(2) STANDARDS FOR INCINERATION EQUIPMENT.—Incineration 

23 equipment on a vessel described in paragraph (1) must meet standards 

24 of the Coast Guard and the Environmental Protection Agency. 

25 ‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall be in26 spected by the Coast Guard, regardless of whether inspected by the flag 

27 nation. The inspection shall be the same as would be required of a ves28 sel of the United States, including drydock inspection and internal ex29 amination of tanks and void spaces. The inspection may be made con30 currently with an inspection by the country of documentation or within 

31 one year after the initial issuance or next scheduled issuance of the 

32 Safety of Life at Sea Safety Construction Certificate. In making the 

33 inspection, the Coast Guard shall refer to the condition of the hull and 

34 superstructure established by the initial foreign certification as the 

35 basis for evaluating the current condition of the hull and super36 structure. The Coast Guard shall allow the substitution of fittings, ma37 terial, apparatus, equipment, and appliances different from those re38 quired for vessels of the United States if satisfied they are equivalent 

39 and at least as effective as those required for vessels of the United 

40 States. A satisfactory inspection under this paragraph shall be certified 
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1 in writing by the Secretary of the department in which the Coast 

2 Guard is operating. 

3 ‘‘(c) EFFECTIVE DATE.—This section is not effective until an appropriate 

4 vessel has been built and documented under chapter 121 of this title. 

5 ‘‘§ 55106. Merchandise transferred between barges 

6 ‘‘(a) IN GENERAL.—On terms and conditions the Secretary of Homeland 

7 Security may prescribe by regulation, the Secretary may suspend the appli8 cation of section 55102 of this title to the transportation of merchandise 

9 that is transferred, when moving in the foreign trade of the United States, 

10 from a barge certified by the owner or operator as designed specifically for 

11 carriage on a vessel and carried regularly on a vessel in foreign trade, to 

12 another such barge owned or leased by the same owner or operator. How13 ever, this subsection does not apply to transportation between the conti14 nental United States and noncontiguous States, territories, or possessions 

15 to which the coastwise laws apply. 

16 ‘‘(b) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section 

17 applies to a foreign vessel only if the Secretary of Homeland Security finds, 

18 based on information from the Secretary of State, that the government of 

19 the country of documentation extends reciprocal privileges to vessels of the 

20 United States. 

21 ‘‘§ 55107. Empty cargo containers and barges 

22 ‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on terms and 

23 conditions the Secretary of Homeland Security may prescribe by regulation, 

24 section 55102 of this title does not apply to the transportation of—

25 ‘‘(1) empty cargo vans, empty lift vans, or empty shipping tanks; 

26 ‘‘(2) equipment for use with cargo vans, lift vans, or shipping tanks; 

27 ‘‘(3) empty barges specifically designed for carriage aboard a vessel 

28 and equipment (except propulsion equipment) for use with those 

29 barges; 

30 ‘‘(4) empty instruments for international traffic exempted from the 

31 customs laws under section 322(a) of the Tariff Act of 1930 (19 

32 U.S.C. 1322(a)); or 

33 ‘‘(5) stevedoring equipment and material. 

34 ‘‘(b) CONDITIONS.—

35 ‘‘(1) CLAUSES (1)–(4).—Clauses (1)–(4) of subsection (a) apply only 

36 if the items named are owned or leased by the owner or operator of 

37 the vessel and transported for use in handling the cargo of that owner 

38 or operator in foreign trade. 

39 ‘‘(2) CLAUSE (5).—Clause (5) of subsection (a) applies only if the 

40 items named are—
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1 ‘‘(A) owned or leased by the owner or operator of the vessel or 

2 by the stevedoring company having the contract for the loading or 

3 unloading of the vessel; and 

4 ‘‘(B) transported without charge for use in the handling of 

5 cargo in foreign trade. 

6 ‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This section 

7 applies to a foreign vessel only if the Secretary of Homeland Security finds, 

8 based on information from the Secretary of State, that the government of 

9 the country of documentation extends reciprocal privileges to vessels of the 

10 United States.

11 ‘‘§ 55108. Platform jackets 

12 ‘‘(a) DEFINITION.—In this section, the term ‘platform jacket’ includes 

13 any type of offshore drilling or production structure or components, includ14 ing platform jackets, tension leg or SPAR platform superstructures (includ15 ing the deck, drilling rig and support utilities, and supporting structure), 

16 hull (including vertical legs and connecting pontoons or vertical cylinder), 

17 tower and base sections of a platform jacket, jacket structures, and deck 

18 modules (known as ‘topsides’) of a hydrocarbon development and production 

19 platform. 

20 ‘‘(b) EXEMPTION.—Section 55102 of this title does not apply to the 

21 transportation of a platform jacket in or on a launch barge between points 

22 in the United States, at one of which there is an installation or other device 

23 described by section 4(a) of the Outer Continental Shelf Lands Act (43 

24 U.S.C. 1333(a)), if—

25 ‘‘(1) the launch barge has a launch capacity of at least 12,000 long 

26 tons, was built not later than June 7, 1988, and is documented under 

27 chapter 121 of this title; and 

28 ‘‘(2) the platform jacket cannot be transported on and launched from 

29 a launch barge of lesser launch capacity that is on the list published 

30 under subsection (c) and is available for the transportation. 

31 ‘‘(c) LIST OF LAUNCH BARGES.—The Secretary of Transportation shall 

32 publish periodically in the Federal Register a current list of launch barges 

33 with a capacity of less than 12,000 long tons that are qualified to engage 

34 in the coastwise trade. For each launch barge, the Secretary shall include 

35 the name, launch capacity, length, beam, depth, and other distinguishing 

36 characteristics, and the name and address of the person to whom inquiries 

37 may be made. 

38 ‘‘§ 55109. Dredging 

39 ‘‘(a) IN GENERAL.—Except as provided in subsection (b), a vessel may 

40 engage in dredging in the navigable waters of the United States only if—

41 ‘‘(1) the vessel—
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1 ‘‘(A) has been issued a certificate of documentation with a 

2 coastwise endorsement under chapter 121 of this title; or 

3 ‘‘(B) is less than 5 net tons and is otherwise qualified to engage 

4 in the coastwise trade; and 

5 ‘‘(2) the owner and charterer, if any, are citizens of the United 

6 States under section 50501 of this title for purposes of engaging in the 

7 coastwise trade. 

8 ‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with a reg9 istry endorsement may engage in the dredging of gold in Alaska. 

10 ‘‘(c) PENALTY.—If a vessel is operated in knowing violation of this sec11 tion, the vessel and its equipment are liable to seizure by and forfeiture to 

12 the United States Government. 

13 ‘‘§ 55110. Transportation of dredged material 

14 ‘‘Section 55102 of this title applies to the transportation of valueless ma15 terial or dredged material, regardless of whether it has commercial value, 

16 from a point in the United States or on the high seas within the exclusive 

17 economic zone, to another point in the United States or on the high seas 

18 within the exclusive economic zone. 

19 ‘‘§ 55111. Towing 

20 ‘‘(a) IN GENERAL.—A vessel may not do any part of any towing de21 scribed in subsection (b) unless the vessel has been issued a certificate of 

22 documentation with a coastwise endorsement under chapter 121 of this title. 

23 This prohibition does not apply to the towing of a vessel in distress. 

24 ‘‘(b) APPLICABLE TOWING.—Subsection (a) applies to the towing of—

25 ‘‘(1) a vessel between ports or places in the United States to which 

26 the coastwise laws apply, either directly or via a foreign port or place; 

27 ‘‘(2) a vessel from point to point within the harbors of ports or 

28 places to which the coastwise laws apply; or 

29 ‘‘(3) a vessel transporting valueless material or dredged material, re30 gardless of whether it has commercial value, from a point in the United 

31 States or on the high seas within the exclusive economic zone, to an32 other point in the United States or on the high seas within the exclu33 sive economic zone. 

34 ‘‘(c) PENALTIES.—

35 ‘‘(1) OWNER AND MASTER.—The owner and master of a vessel tow36 ing another vessel in violation of this section are each liable for a pen37 alty of at least $250 but not more than $1,000. A penalty under this 

38 paragraph constitutes a lien on the vessel. The lien is enforceable in 

39 a district court of the United States for any district in which the vessel 

40 is found. Clearance may not be granted to the vessel until the penalties 

41 have been paid. 
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1 ‘‘(2) VESSEL.—In addition to the penalties under paragraph (1), the 

2 towing vessel is liable for a penalty of $50 per ton based on the ton3 nage of each towed vessel. 

4 ‘‘§ 55112. Vessel escort operations and towing assistance 

5 ‘‘(a) IN GENERAL.—Except in the case of a vessel in distress, only a ves6 sel of the United States may perform the following escort vessel operations 

7 within the navigable waters of the United States: 

8 ‘‘(1) Operations that commence or terminate at a port or place in 

9 the United States. 

10 ‘‘(2) Operations required by United States law or regulation. 

11 ‘‘(3) Operations provided in whole or in part within or through navi12 gation facilities owned, maintained, or operated by the United States 

13 Government or the approaches to those facilities, other than facilities 

14 operated by the St. Lawrence Seaway Development Corporation on the 

15 St. Lawrence River portion of the Seaway. 

16 ‘‘(b) ESCORT VESSELS.—For purposes of this section, an escort vessel 

17 is—

18 ‘‘(1) any vessel that is assigned and dedicated to assist another ves19 sel, whether or not tethered to that vessel, solely as a safety precaution 

20 to assist in controlling the speed or course of the assisted vessel in the 

21 event of a steering or propulsion equipment failure, or any other simi22 lar emergency circumstance, or in restricted waters where additional 

23 assistance in maneuvering the vessel is required to ensure its safe oper24 ation; and 

25 ‘‘(2) in the case of a vessel being towed under section 55111 of this 

26 title, any vessel that is assigned and dedicated to the vessel being towed 

27 in addition to any towing vessel required under that section. 

28 ‘‘(c) RELATIONSHIP TO OTHER LAW.—This section does not affect sec29 tion 55111 of this title. 

30 ‘‘(d) PENALTY.—A person violating this section is liable to the Govern31 ment for a civil penalty of not more than $10,000 for each day during which 

32 the violation occurs. 

33 ‘‘§ 55113. Use of foreign documented oil spill response ves34 sels 

35 ‘‘Notwithstanding any other provision of law, an oil spill response vessel 

36 documented under the laws of a foreign country may operate in waters of 

37 the United States on an emergency and temporary basis, for the purpose 

38 of recovering, transporting, and unloading in a United States port oil dis39 charged as a result of an oil spill in or near those waters, if—

40 ‘‘(1) an adequate number and type of oil spill response vessels docu41 mented under the laws of the United States cannot be engaged to re-
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1 cover oil from an oil spill in or near those waters in a timely manner, 

2 as determined by the Federal On-Scene Coordinator for a discharge or 

3 threat of a discharge of oil; and 

4 ‘‘(2) the foreign country has by its laws accorded to vessels of the 

5 United States the same privileges accorded to vessels of the foreign 

6 country under this section.

7 ‘‘§ 55114. Unloading fish from foreign vessels 

8 ‘‘(a) PROHIBITIONS.—Except as otherwise provided by this section or a 

9 treaty or convention to which the United States Government is a party, a 

10 foreign vessel may not unload, in a port of the United States—

11 ‘‘(1) its catch of fish taken on board on the high seas or fish prod12 ucts processed from that catch of fish; or 

13 ‘‘(2) fish or fish products taken on board that vessel on the high seas 

14 from a vessel engaged in fishing operations or the processing of fish 

15 or fish products. 

16 ‘‘(b) REGULATIONS ON OBTAINING INFORMATION.—The Secretary of 

17 Commerce may prescribe regulations the Secretary considers necessary to 

18 obtain information on the transportation of fish products by vessels of the 

19 United States for foreign fish processing vessels to points in the United 

20 States. 

21 ‘‘(c) VIRGIN ISLANDS EXEMPTION.—A foreign vessel of not more than 50 

22 feet overall in length may unload its catch of fresh fish (whole or with the 

23 heads, viscera, or fins removed, but not frozen, otherwise processed, or fur24 ther advanced) in a port of the Virgin Islands for immediate consumption 

25 in those islands. Fish unloaded under this subsection may be sold or trans26 ferred only for immediate consumption. In the absence of satisfactory evi27 dence that a sale or transfer to an agent, representative, or employee of a 

28 freezer or cannery is for immediate consumption, the sale or transfer is 

29 deemed not to be for immediate consumption. This subsection does not pro30 hibit the freezing, smoking, or other processing of fresh fish by the ultimate 

31 consumer of the fish. 

32 ‘‘(d) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded in the Vir33 gin Islands that are retained, sold, or transferred, except as allowed by sub34 section (c), are liable to seizure by and forfeiture to the Government. A per35 son retaining, selling, transferring, buying, or receiving the fish is liable to 

36 the Government for a civil penalty of not more than $1,000 for each viola37 tion. A penalty or forfeiture under this section may be compromised, modi38 fied, or remitted under section 2107(b) of this title. 
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1 ‘‘§ 55115. Supplies on fish processing vessels 

2 ‘‘Section 55102 of this title does not apply to supplies aboard a United 

3 States documented fish processing vessel that are necessary and used for 

4 processing or assembling fishery products aboard the vessel. 

5 ‘‘§ 55116. Canadian rail lines 

6 ‘‘Section 55102 of this title does not apply to the transportation of mer7 chandise between points in the continental United States, including Alaska, 

8 over through routes in part over Canadian rail lines and connecting water 

9 facilities if the routes have been recognized by the Surface Transportation 

10 Board and rate tariffs for the routes have been filed with the Board. 

11 ‘‘§ 55117. Great Lakes rail route 

12 ‘‘Section 55102 of this title does not apply to the transportation of mer13 chandise loaded on a railroad car or to a motor vehicle with or without a 

14 trailer, and with its passengers or contents when accompanied by the oper15 ator, when the railroad car or motor vehicle is transported in a railroad car 

16 ferry operated between fixed terminals on the Great Lakes as part of a rail 

17 route, if—

18 ‘‘(1) the car ferry is owned by a common carrier by water and oper19 ated as part of a rail route with the approval of the Surface Transpor20 tation Board; 

21 ‘‘(2) the stock of the common carrier by water, or its predecessor, 

22 was owned or controlled by a common carrier by rail prior to June 5, 

23 1920; 

24 ‘‘(3) the stock of the common carrier owning the car ferry is, with 

25 the approval of the Board, now owned or controlled by a common car26 rier by rail; and 

27 ‘‘(4) the car ferry is built in and documented under the laws of the 

28 United States. 

29 ‘‘§ 55118. Foreign railroads whose road enters by ferry, tug30 boat, or towboat 

31 ‘‘A foreign railroad, whose road enters the United States by ferry, tug32 boat, or towboat, may own and operate a vessel not having a coastwise en33 dorsement in connection with the water transportation of the passenger, 

34 freight, express, baggage, and mail cars used by that road, together with 

35 the passengers, freight, express matter, baggage, and mails transported in 

36 those cars. However, the foreign railroad is subject to the same restrictions 

37 imposed by law on a vessel of the United States entering a port of the 

38 United States from the same foreign country. Except as otherwise author39 ized by this chapter, the ferry, tugboat, or towboat may not, under penalty 

40 of forfeiture, be used in the transportation of merchandise between ports 

41 or places in the United States to which the coastwise laws apply. 
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1 ‘‘§ 55119. Yukon River 

2 ‘‘Section 55102 of this title does not apply to the transportation of mer3 chandise on the Yukon River until the Alaska Railroad is completed and the 

4 Secretary of Transportation finds that proper facilities will be available for 

5 transportation by citizens of the United States to properly handle the traf6 fic. 

7 ‘‘§ 55120. Transshipment of imported merchandise intended 

8 for immediate exportation 

9 ‘‘The Secretary of Homeland Security may prescribe regulations for the 

10 transshipment and transportation of merchandise that is imported into the 

11 United States by sea for immediate exportation to a foreign port by sea, 

12 or by a river, the right to ascend or descend which for the purposes of com13 merce is secured by treaty to the citizens of the United States and the sub14 jects of a foreign power.

15 ‘‘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.

16 ‘‘SUBCHAPTER I—GENERAL 

17 ‘‘§ 55301. Priority loading for coal 

18 ‘‘A vessel engaged in the coastwise transportation of coal produced in the 

19 United States, from a port in the United States to another port in the 

20 United States, shall be given priority in loading at any of those ports ahead 

21 of a waiting vessel engaged in the export transportation of coal produced 

22 in the United States. However, if the Secretary of Transportation finds that 

23 it is in the national interest, the Secretary may eliminate this priority load-
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1 ing at any port. The Secretary shall report to Congress within 30 days an 

2 action eliminating priority loading under this section. 

3 ‘‘§ 55302. Transportation of United States Government per4 sonnel 

5 ‘‘(a) IN GENERAL.—An officer or employee of the United States Govern6 ment traveling by sea on official business overseas or to or from a territory 

7 or possession of the United States shall travel and transport personal effects

8 on a vessel documented under the laws of the United Sates if such a vessel 

9 is available, unless the necessity of the mission requires the use of a foreign 

10 vessel. 

11 ‘‘(b) REGULATIONS.—The Administrator of General Services shall pre12 scribe regulations under which agencies may not pay for or reimburse an 

13 officer or employee for travel or transportation expenses incurred on a for14 eign vessel in the absence of satisfactory proof of the necessity of using the 

15 vessel. 

16 ‘‘§ 55303. Motor vehicles owned by United States Govern17 ment personnel 

18 ‘‘Notwithstanding any other law, privately-owned American shipping serv19 ices may be used to transport motor vehicles owned by personnel of the 

20 United States Government whenever transportation of those vehicles at Gov21 ernment expense is otherwise authorized by law. 

22 ‘‘§ 55304. Exports financed by the United States Government 

23 ‘‘It is the sense of Congress that any loans made by an instrumentality 

24 of the United States Government to foster the exporting of agricultural or 

25 other products shall provide that the products may be transported only on 

26 vessels of the United States unless, as to any or all of those products, the 

27 Secretary of Transportation, after investigation, certifies to the instrumen28 tality that vessels of the United States are not available in sufficient num29 ber, in sufficient tonnage capacity, on necessary schedules, or at reasonable 

30 rates. 

31 ‘‘§ 55305. Cargoes procured, furnished, or financed by the 

32 United States Government 

33 ‘‘(a) DEFINITION.—In this section, the term ‘privately-owned United 

34 States-flag commercial vessel’ does not include a vessel that, after Sep35 tember 21, 1961, was built or rebuilt outside the United States or docu36 mented under the laws of a foreign country, until the vessel has been docu37 mented under the laws of the United States for at least 3 years. 

38 ‘‘(b) MINIMUM TONNAGE.—When the United States Government pro39 cures, contracts for, or otherwise obtains for its own account, or furnishes 

40 to or for the account of a foreign country without provision for reimburse41 ment, any equipment, materials, or commodities, within or without the 
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1 United States, or advances funds or credits, or guarantees the convertibility 

2 of foreign currencies in connection with the furnishing of the equipment, 

3 materials, or commodities, the appropriate agencies shall take steps nec4 essary and practicable to ensure that at least 50 percent of the gross ton5 nage of the equipment, materials, or commodities (computed separately for 

6 dry bulk carriers, dry cargo liners, and tankers) which may be transported 

7 on ocean vessels is transported on privately-owned United States-flag com8 mercial vessels, to the extent those vessels are available at fair and reason9 able rates for United States-flag commercial vessels, in a manner that will 

10 ensure a fair and reasonable participation of United States-flag commercial 

11 vessels in those cargoes by geographic areas. 

12 ‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Congress (by 

13 concurrent resolution or otherwise) may waive this section temporarily by—

14 ‘‘(1) declaring the existence of an emergency justifying a waiver; and 

15 ‘‘(2) notifying the appropriate agencies of the waiver. 

16 ‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having responsibility 

17 under this section shall administer its programs with respect to this section 

18 under regulations prescribed by the Secretary of Transportation. The Sec19 retary shall review the administration of those programs and report annu20 ally to Congress on their administration. 

21 ‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF 

22 AGRICULTURAL COMMODITIES 

23 ‘‘§ 55311. Findings and purposes 

24 ‘‘(a) FINDINGS.—Congress finds that—

25 ‘‘(1) a productive and healthy agricultural industry and a strong and 

26 active United States maritime industry are vitally important to the eco27 nomic well-being and security of the United States; 

28 ‘‘(2) both industries must compete in international markets increas29 ingly dominated by foreign trade barriers and the subsidization prac30 tices of foreign governments; and 

31 ‘‘(3) increased agricultural exports and the use of merchant vessels 

32 of the United States contribute positively to the United States balance 

33 of trade and generate employment opportunities in the United States. 

34 ‘‘(b) PURPOSES.—The purposes of this subchapter are to—

35 ‘‘(1) enable the Secretary of Agriculture to plan export programs ef36 fectively, by clarifying the ocean transportation requirements applicable 

37 to those programs; 

38 ‘‘(2) take immediate and positive steps to promote the growth of the 

39 cargo-carrying capacity of the United States merchant marine; 
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1 ‘‘(3) expand international trade in United States agricultural com2 modities and products and develop, maintain, and expand markets for 

3 United States agricultural exports; 

4 ‘‘(4) improve the efficiency of administration of both the commodity 

5 purchasing and selling activities and the ocean transportation activities 

6 associated with export programs sponsored by the Secretary; 

7 ‘‘(5) stimulate and promote the agricultural and maritime industries 

8 of the United States and encourage cooperative efforts by both indus9 tries to address their common problems; and 

10 ‘‘(6) provide for the appropriate disposition of these findings and 

11 purposes. 

12 ‘‘§ 55312. Determining prevailing world market price 

13 ‘‘(a) AGRICULTURAL COMMODITIES AND PRODUCTS.—The prevailing 

14 world market price for agricultural commodities or their products shall be 

15 determined under this subchapter under procedures prescribed by the Sec16 retary of Agriculture. The Secretary shall prescribe the procedures by regu17 lation, with notice and opportunity for public comment under section 553 

18 of title 5. 

19 ‘‘(b) SERVICES AND NON-AGRICULTURAL COMMODITIES AND PROD20 UCTS.—If a determination of the prevailing world market price of any other 

21 type of materials, goods, equipment, or service is required to determine 

22 whether a barter or exchange transaction is subject to section 55314(b)(6) 

23 or (7) of this title, the determination shall be made by the Secretary of Ag24 riculture in consultation with the heads of other appropriate agencies. 

25 ‘‘§ 55313. Exemption of certain agricultural exports from 

26 cargo preference provisions 

27 ‘‘Sections 55304 and 55305 of this title do not apply to export activities 

28 of the Secretary of Agriculture or the Commodity Credit Corporation under 

29 which—

30 ‘‘(1) agricultural commodities or their products acquired by the Cor31 poration are made available to United States exporters, users, proc32 essors, or foreign purchasers for the purpose of developing, maintain33 ing, or expanding export markets for United States agricultural com34 modities or their products at prevailing world market prices; 

35 ‘‘(2) payments are made available to United States exporters, users, 

36 or processors or, except as provided in section 55314 of this title, cash 

37 grants are made available to foreign purchasers, for the purpose de38 scribed in clause (1); 

39 ‘‘(3) commercial credit guarantees are blended with direct credits 

40 from the Corporation to reduce the effective rate of interest on export 

41 sales of United States agricultural commodities or their products; 
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1 ‘‘(4) credit or credit guarantees for not more than 3 years are ex2 tended by the Corporation to finance or guarantee export sales of 

3 United States agricultural commodities or their products; or 

4 ‘‘(5) agricultural commodities or their products owned or controlled 

5 by or under loan from the Corporation are exchanged or bartered for 

6 materials, goods, equipment, or services at least equal in value to the 

7 agricultural commodities or their products for which they are ex8 changed or bartered (determined on the basis of prevailing world mar9 ket prices at the time of the exchange or barter), but this clause does

10 not exempt from the cargo preference provisions referred to in section 

11 55314(b) of this title any requirement otherwise applicable to the mate12 rials, goods, equipment, or services imported under the transaction. 

13 ‘‘§ 55314. Transportation requirements for certain exports 

14 sponsored by the Secretary of Agriculture 

15 ‘‘(a) MINIMUM TONNAGE.—

16 ‘‘(1) IN GENERAL.—In addition to the requirement under section 

17 55305 of this title for the transportation of a percentage of gross ton18 nage on United States-flag vessels, 25 percent of the gross tonnage of 

19 agricultural commodities or their products specified in subsection (b) 

20 shall be transported each calendar year on United States-flag commer21 cial vessels that—

22 ‘‘(A) are necessary for national security; and 

23 ‘‘(B) if more than 25 years old, were rebuilt within the last 5 

24 years and certified by the Secretary of Transportation as having 

25 a useful life of at least 5 years after that rebuilding. 

26 ‘‘(2) CALENDAR YEAR.—To provide for effective and equitable ad27 ministration of the cargo preference laws, the calendar year for the 

28 purpose of compliance with minimum percentage requirements is the 

29 12-month period beginning October 1 of each year. 

30 ‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to export ac31 tivity (except inspection or weighing activities, other activities carried out 

32 for health or safety, or technical assistance provided in the handling of com33 mercial transactions) of the Secretary of Agriculture or the Commodity 

34 Credit Corporation—

35 ‘‘(1) carried out under the Agricultural Trade Development and As36 sistance Act of 1954 (7 U.S.C. 1691 et seq.); 

37 ‘‘(2) carried out under section 416 of the Agricultural Act of 1949 

38 (7 U.S.C. 1431); 

39 ‘‘(3) carried out under the Bill Emerson Humanitarian Trust Act (7 

40 U.S.C. 1736f–1); 

41 ‘‘(4) under which agricultural commodities or their products are—
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1 ‘‘(A) donated through foreign governments or private or public 

2 agencies, including intergovernmental organizations; or 

3 ‘‘(B) sold for foreign currencies or for dollars on credit terms 

4 of more than 10 years; 

5 ‘‘(5) under which agricultural commodities or their products are 

6 made available for emergency food relief at less than prevailing world 

7 market prices; 

8 ‘‘(6) under which a cash grant is made directly or through an inter9 mediary to a foreign purchaser to enable the purchaser to obtain 

10 United States agricultural commodities or their products in an amount 

11 greater than the difference between the prevailing world market price 

12 and the United States market price, free along side vessel at a United 

13 States port; or 

14 ‘‘(7) under which agricultural commodities owned or controlled by or 

15 under loan from the Corporation are exchanged or bartered for mate16 rials, goods, equipment, or services produced in foreign countries, ex17 cept export activities described in section 55313(5) of this title. 

18 ‘‘(c) ADDITIONAL REQUIREMENTS.—

19 ‘‘(1) APPLICATION OF SECTION 55305.—The requirement for United 

20 States-flag transportation under subsection (a) is subject to the same 

21 terms and conditions as provided in section 55305 of this title. 

22 ‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph (3), in 

23 carrying out this section and section 55305 of this title, the Corpora24 tion shall take steps necessary and practicable, and consistent with this 

25 section and section 55305, without detriment to any port range to allo26 cate, on the principle of lowest landed cost without regard to the coun27 try of documentation of the vessel, 25 percent of the bagged, processed, 

28 or fortified commodities provided under title II of the Agricultural 

29 Trade Development and Assistance Act of 1954 (7 U.S.C. 1721 et 

30 seq.). 

31 ‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first there 

32 shall be calculated the allocation of 100 percent of the quantity to be 

33 procured on an overall lowest landed cost basis without regard to the 

34 country of documentation of the vessel, and then there shall be allo35 cated to the Great Lakes port range any cargoes for which it has the 

36 lowest landed cost under that calculation. The requirements for United 

37 States-flag transportation under this section and section 55305 of this 

38 title do not apply to commodities allocated to the Great Lakes port 

39 range under paragraph (2). To the extent that the Great Lakes port 

40 range is used to furnish and transport less than 25 percent of the total 

41 annual tonnage of commodities to which paragraph (2) applies, the 
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1 commodities allocated to the Great Lakes port range under paragraph 

2 (2) may not be reallocated or diverted to another port range to meet 

3 the requirements for United States-flag transportation under this sec4 tion and section 55305 of this title. 

5 ‘‘(4) AWARDING CONTRACTS.—In awarding a contract for the trans6 portation by vessel of commodities from the Great Lakes port range 

7 pursuant to an export activity referred to in subsection (b), an agen8 cy—

9 ‘‘(A) shall consider expressions of freight interest for any vessel 

10 from a vessel operator who meets reasonable requirements for fi11 nancial and operational integrity; and 

12 ‘‘(B) may not deny award of the contract to a person based on 

13 the type of vessel on which the transportation would be provided 

14 (including on the basis that the transportation would not be pro15 vided on a liner vessel, as that term is used in the Shipping Act 

16 of 1984, as in effect on November 14, 1995), if the person other17 wise satisfies reasonable requirements for financial and operational 

18 integrity. 

19 ‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of nonavail20 ability of United States-flag vessels resulting from the application of 

21 this subsection may not reduce the gross tonnage of commodities re22 quired by this section and section 55305 of this title to be transported 

23 on United States-flag vessels. 

24 ‘‘§ 55315. Minimum tonnage 

25 ‘‘(a) DEFINITION.—In this section, the term ‘base period’ means the 5-

26 year period running from the sixth through the second prior fiscal years. 

27 ‘‘(b) REQUIREMENT.—For each fiscal year, the minimum quantity of ag28 ricultural commodities to be exported under programs subject to section 

29 55314 of this title is the average of the tonnage exported under those pro30 grams during the base period, discarding the high and low years. 

31 ‘‘(c) WAIVERS.—The President may waive the minimum quantity for a 

32 fiscal year under this section if the President determines and reports to 

33 Congress, together with reasons, that the quantity cannot be used effectively 

34 for the purposes of those programs or, based on a certification by the Sec35 retary of Agriculture, that the commodities are not available for reasons 

36 that include the unavailability of funds. 

37 ‘‘§ 55316. Financing the transportation of agricultural com38 modities 

39 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall finance any 

40 increased ocean freight charges incurred in a fiscal year because of section 

41 55314 of this title. 
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1 ‘‘(b) AMOUNT OF REIMBURSEMENT.—

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

3 the Secretary of Agriculture and the Commodity Credit Corporation for 

4 the amount by which, in any fiscal year—

5 ‘‘(A) the total cost of ocean freight and ocean freight differen6 tial for which obligations are incurred by the Secretary of Agri7 culture and the Corporation on exports of agricultural commodities

8 and their products under the agricultural export programs speci9 fied in section 55314(b) of this title; exceeds 

10 ‘‘(B) 20 percent of the value of the commodities and their prod11 ucts and the cost of the ocean freight and ocean freight differen12 tial on which obligations are incurred by the Secretary of Agri13 culture and the Corporation during that fiscal year. 

14 ‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—Under this sub15 section, commodities shipped from the inventory of the Corporation 

16 shall be valued as provided in section 412(e) of the Agricultural Trade 

17 Development and Assistance Act of 1954 (7 U.S.C. 1736f(e)). 

18 ‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.—

19 ‘‘(1) ISSUANCE.—To meet the expenses required to be assumed 

20 under subsections (a) and (b), the Secretary of Transportation shall 

21 issue obligations to the Secretary of the Treasury. The Secretary of 

22 Transportation, with the approval of the Secretary of the Treasury, 

23 shall prescribe the form, denomination, maturity, and other terms (ex24 cept the interest rate) of the obligations. The Secretary of the Treasury 

25 shall set the interest rate for the obligations, considering the average 

26 market yield on outstanding marketable obligations of the United 

27 States Government of comparable maturities during the month before 

28 the obligations are issued. 

29 ‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the 

30 obligations issued under this subsection. To purchase the obligations, 

31 the Secretary of the Treasury may use as a public debt transaction the 

32 proceeds from the sale of securities issued under chapter 31 of title 31. 

33 The purposes for which securities may be issued under that chapter are 

34 extended to include the purchase of obligations under this subsection. 

35 A redemption or purchase of the obligations by the Secretary of the 

36 Treasury is a public debt transaction of the Government. 

37 ‘‘(d) REIMBURSEMENT.—Reimbursement of the Secretary of Transpor38 tation for costs incurred under this section shall be made with appropriated 

39 funds rather than through cancellation of notes. 

40 ‘‘(e) APPROPRIATIONS.—
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1 ‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized to be 

2 appropriated an amount sufficient to reimburse the Secretary of Trans3 portation for the costs incurred under this section, including adminis4 trative expenses and the principal and interest due on obligations 

5 issued to the Secretary of the Treasury. 

6 ‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each fiscal 

7 year, such amounts as may be necessary are hereby appropriated to 

8 pay interest and to liquidate debt on obligations issued to the Secretary 

9 of the Treasury under this section. 

10 ‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Secretary 

11 of Transportation is unable to obtain the funds necessary to finance the in12 creased ocean freight charges resulting from the requirements of subsections 

13 (a) and (b) and section 55314(a) of this title, the Secretary shall notify 

14 Congress within 10 working days of the discovery of the insufficiency. 

15 ‘‘§ 55317. Termination of subchapter 

16 ‘‘This subchapter terminates 90 days after the date on which a notifica17 tion is made under section 55316(f) of this title, except for shipments of 

18 agricultural commodities and their products subject to contracts made be19 fore the end of that 90-day period, unless within that 90-day period the Sec20 retary of Transportation proclaims that funds are available to finance in21 creased freight charges resulting from the requirements of sections 

22 55314(a) and 55316(a) and (b) of this title. On the termination of this sub23 chapter under this section—

24 ‘‘(1) this subchapter does not exempt export activities from, or sub25 ject export activities to, the cargo preference laws; and 

26 ‘‘(2) the 50-percent requirement in section 55305 of this title re27 mains in effect. 

28 ‘‘§ 55318. Effect on other law 

29 ‘‘This subchapter does not affect chapter 5 of title 5. 

30 ‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 

31 ‘‘§ 55331. Definitions 

32 ‘‘In this subchapter: 

33 ‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American Great 

34 Lakes vessel’ means a vessel so designated under section 55332 of this 

35 title, but only during the period the designation is in effect. 

36 ‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake Superior, 

37 Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, the Saint Law38 rence River west of Saint Regis, New York, and their connecting and 

39 tributary waters. 

40 ‘‘(3) GREAT LAKES SHIPPING SEASON.—The term ‘Great Lakes 

41 shipping season’ means the period each year during which the Saint 
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1 Lawrence Seaway is open for navigation by vessels, as declared by the 

2 Saint Lawrence Seaway Development Corporation. 

3 ‘‘§ 55332. Designating American Great Lakes vessels 

4 ‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall designate a 

5 vessel as an American Great Lakes vessel if—

6 ‘‘(1) an application for designation is submitted to the Secretary 

7 under regulations prescribed by the Secretary; 

8 ‘‘(2) the vessel is documented under the laws of the United States; 

9 ‘‘(3) the vessel, on the effective date of the designation, is—

10 ‘‘(A) at least 1, but not more than 6, years old; or 

11 ‘‘(B) at least 1, but not more than 11, years old if the Secretary 

12 finds that suitable vessels are not available to provide the type of 

13 service for which the vessel will be used after the designation; 

14 ‘‘(4) the vessel has not previously been designated as an American 

15 Great Lakes vessel; and 

16 ‘‘(5) the owner makes an agreement as provided under subsection 

17 (b). 

18 ‘‘(b) AGREEMENTS.—A vessel may be designated as an American Great 

19 Lakes vessel only if the person that will be the owner of the vessel at the 

20 time of the designation makes an agreement with the Secretary providing 

21 that if the Secretary determines that the vessel is necessary to the defense 

22 of the United States, the United States Government will have an exclusive 

23 right, during the 120-day period following the date of a revocation of the 

24 designation under section 55335 of this title, to purchase the vessel for a 

25 price equal to the greater of—

26 ‘‘(1) the approximate world market value of the vessel; or 

27 ‘‘(2) the cost of the vessel to the owner less a reasonable amount 

28 for depreciation. 

29 ‘‘(c) CERTAIN FOREIGN DOCUMENTATION AND SALE NOT PROHIB30 ITED.—Notwithstanding any other law, if the Government does not exercise 

31 its right of purchase under an agreement under subsection (b), the owner 

32 of the vessel is not prohibited from—

33 ‘‘(1) documenting the vessel under the laws of a foreign country; or 

34 ‘‘(2) selling the vessel to a person not a citizen of the United States. 

35 ‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations estab36 lishing requirements for submitting applications under this section. 

37 ‘‘§ 55333. Exemption from restriction on transporting cer38 tain cargo 

39 ‘‘The 3-year documentation requirement of section 55305(a) of this title 

40 does not apply to a vessel designated as an American Great Lakes vessel 

41 during the period of its designation. 
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1 ‘‘§ 55334. Restrictions on operations 

2 ‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an American 

3 Great Lakes vessel may not be used to—

4 ‘‘(1) engage in trade—

5 ‘‘(A) from a port in the United States that is not located on 

6 the Great Lakes; or 

7 ‘‘(B) between ports in the United States;

8 ‘‘(2) transport bulk cargo (as defined in section 40102 of this title) 

9 that is subject to section 55305 or 55314 of this title or section 2631 

10 of title 10; or 

11 ‘‘(3) provide a service (except ocean freight service) as—

12 ‘‘(A) a contract carrier; or 

13 ‘‘(B) a common carrier on a fixed advertised schedule offering 

14 frequent sailings at regular intervals in the foreign trade of the 

15 United States. 

16 ‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel may be 

17 used for not more than 90 days during any 12-month period to engage in 

18 trade prohibited by subsection (a)(1)(A), except during the Great Lakes 

19 shipping season. 

20 ‘‘§ 55335. Revocations and terminations of designations 

21 ‘‘(a) REVOCATIONS.—After notice and an opportunity for a hearing, the 

22 Secretary of Transportation may revoke a designation of a vessel as an 

23 American Great Lakes vessel if the Secretary finds that—

24 ‘‘(1) the vessel does not meet a requirement for the designation; 

25 ‘‘(2) the vessel has been operated in violation of this subchapter; or 

26 ‘‘(3) the owner or operator of the vessel has violated an agreement 

27 made under section 55332(b) of this title. 

28 ‘‘(b) TERMINATIONS.—On petition and a showing of good cause by the 

29 owner of a vessel, the Secretary may terminate the designation of a vessel 

30 as an American Great Lakes vessel. The Secretary may impose conditions 

31 in a termination order to prevent significant adverse effects on other opera32 tors of United States-flag vessels. 

33 ‘‘§ 55336. Civil penalty 

34 ‘‘After notice and an opportunity for a hearing, the Secretary of Trans35 portation may impose a civil penalty of not more than $1,000,000 on the 

36 owner of an American Great Lakes vessel for any act for which the designa37 tion may be revoked under section 55335 of this title.

38 ‘‘CHAPTER 555—MISCELLANEOUS

‘‘Sec. 

‘‘55501. Mobile trade fairs.
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1 ‘‘§ 55501. Mobile trade fairs 

2 ‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage and pro3 mote the development and use of mobile trade fairs designed to show and 

4 sell the products of United States business and agriculture at foreign ports 

5 and at other commercial centers throughout the world where the operators 

6 of the fairs use, insofar as practicable, vessels and aircraft of the United 

7 States in transporting their exhibits. 

8 ‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Secretary de9 termines that a mobile trade fair provides an economical and effective 

10 means of promoting export sales, the Secretary may provide to the operator 

11 of the fair—

12 ‘‘(1) technical assistance and support; and 

13 ‘‘(2) financial assistance to defray certain expenses incurred outside 

14 the United States, except the cost of transportation on foreign vessels 

15 and aircraft. 

16 ‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section, the 

17 President may use, in addition to amounts appropriated to carry out trade 

18 promotion activities, foreign currencies owned by or owed to the United 

19 States Government.

20 ‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES

21 ‘‘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. 

22 ‘‘§ 56101. Definition 

23 ‘‘In this chapter, the term ‘citizen of the United States’ includes a citizen 

24 of the United States as defined in section 12118 of this title. 

25 ‘‘§ 56102. Approval required to transfer vessel to noncitizen 

26 ‘‘(a) IN GENERAL.—Except as otherwise provided in this section, section 

27 12119 of this title, or section 611 of the Merchant Marine Act, 1936, a per28 son may not, without the approval of the Secretary of Transportation—

29 ‘‘(1) sell, lease, charter, deliver, or in any other manner transfer, or 

30 agree to sell, lease, charter, deliver, or in any other manner transfer, 

31 to a person not a citizen of the United States, an interest in or control 

32 of a documented vessel or a vessel last documented under the laws of 

33 the United States, except a vessel that has been operated only for 

34 pleasure or only as a fishing vessel, fish processing vessel, or fish ten35 der vessel (as defined in section 2101 of this title); or 
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1 ‘‘(2) place under foreign registry, or operate under the authority of 

2 a foreign country, a documented vessel or a vessel last documented 

3 under the laws of the United States. 

4 ‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing with 

5 respect to a vessel to be documented under chapter 121 of this title, the 

6 Secretary may grant approval under subsection (a) before the vessel is docu7 mented. 

8 ‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this subtitle, 

9 the Merchant Marine Act, 1936, or any contract with the Secretary made 

10 under this subtitle or that Act, a person may place a vessel under foreign 

11 registry without the approval of the Secretary if—

12 ‘‘(1)(A) the Secretary determines that at least one replacement ves13 sel of a capacity that is equivalent or greater, as measured by dead14 weight tons, gross tons, or container equivalent units, as appropriate, 

15 is documented under chapter 121 of this title by the owner of the vessel 

16 placed under foreign registry; and 

17 ‘‘(B) the replacement vessel is not more than 10 years old on the 

18 date of that documentation; 

19 ‘‘(2)(A) an application for an operating agreement under subtitle B 

20 of title VI of the Merchant Marine Act, 1936, has been filed for a ves21 sel that is eligible to be included in the Maritime Security Fleet under 

22 section 651(b)(1) of that Act; and 

23 ‘‘(B) the Secretary has not awarded an operating agreement for that 

24 vessel within 90 days after the date of that application; 

25 ‘‘(3) a contract covering the vessel under subtitle A of title VI of the 

26 Merchant Marine Act, 1936, has expired and the vessel was more than 

27 15 years old on the date the contract expired; or 

28 ‘‘(4) an operating agreement covering the vessel under subtitle B of 

29 title VI of the Merchant Marine Act, 1936, has expired. 

30 ‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or trans31 fer of a vessel, or of an interest in or control of a vessel, in violation of 

32 this section is void. 

33 ‘‘(e) PENALTIES.—

34 ‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells, charters, 

35 or transfers a vessel, or an interest in or control of a vessel, in violation 

36 of this section shall be fined under title 18, imprisoned for not more 

37 than 5 years, or both. 

38 ‘‘(2) CIVIL PENALTY.—A person that sells, charters, or transfers a 

39 vessel, or an interest in or control of a vessel, in violation of this sec40 tion is liable to the United States Government for a civil penalty of 

41 not more than $10,000 for each violation. 
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1 ‘‘(3) FORFEITURE.—A documented vessel may be seized by and for2 feited to the Government if, in violation of this section, a person—

3 ‘‘(A) knowingly sells, charters, or transfers the vessel or an in4 terest in or control of the vessel; or 

5 ‘‘(B) places the vessel under foreign registry or operates the 

6 vessel under the authority of a foreign country.

7 ‘‘§ 56103. Additional controls during war or national emer8 gency 

9 ‘‘(a) IN GENERAL.—During war, or a national emergency declared by 

10 Presidential proclamation, a person may not, without the approval of the 

11 Secretary of Transportation—

12 ‘‘(1) place under foreign registry or flag a vessel owned in whole or 

13 in part by a citizen of the United States or a corporation incorporated 

14 under the laws of the United States or of a State; 

15 ‘‘(2) sell, mortgage, lease, charter, deliver, or in any other manner 

16 transfer, or agree to sell, mortgage, lease, charter, deliver, or in any 

17 other manner transfer, to a person not a citizen of the United States—

18 ‘‘(A) a vessel owned as described in clause (1), or an interest 

19 therein; 

20 ‘‘(B) a vessel documented under the laws of the United States, 

21 or an interest therein; or 

22 ‘‘(C) a facility for building or repairing vessels, or an interest 

23 therein; 

24 ‘‘(3) issue, assign, or transfer to a person not a citizen of the United 

25 States an instrument of indebtedness secured by a mortgage of a vessel 

26 to a trustee, by an assignment of an owner’s interest in a vessel under 

27 construction to a trustee, or by a mortgage of a facility for building 

28 or repairing vessels to a trustee, unless the trustee or a substitute 

29 trustee is approved by the Secretary under subsection (b); 

30 ‘‘(4) enter into an agreement or understanding to construct a vessel 

31 in the United States for, or to be delivered to, a person not a citizen 

32 of the United States without expressly stipulating that construction will 

33 not begin until after the war or national emergency has ended; 

34 ‘‘(5) enter into an agreement or understanding whereby there is vest35 ed in, or for the benefit of, a person not a citizen of the United States 

36 the controlling interest in a corporation that is incorporated under the 

37 laws of the United States or a State and that owns a vessel or facility 

38 for building or repairing vessels; or 

39 ‘‘(6) cause or procure a vessel, constructed in whole or in part in 

40 the United States and never cleared for a foreign port, to depart from 
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1 a port of the United States before it has been documented under the 

2 laws of the United States. 

3 ‘‘(b) TRUSTEES.—

4 ‘‘(1) APPROVAL.—The Secretary shall approve a trustee or sub5 stitute trustee under subsection (a)(3) if and only if the trustee is a 

6 bank or trust company that—

7 ‘‘(A) is organized as a corporation, and is doing business, under 

8 the laws of the United States or a State; 

9 ‘‘(B) is authorized under those laws to exercise corporate trust 

10 powers; 

11 ‘‘(C) is a citizen of the United States; 

12 ‘‘(D) is subject to supervision or examination by Federal or 

13 State authority; and 

14 ‘‘(E) has a combined capital and surplus (as set forth in its 

15 most recent published report of condition) of at least $3,000,000. 

16 ‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases to meet 

17 the conditions in paragraph (1), the Secretary shall disapprove the 

18 trustee or substitute trustee. After the disapproval, the restrictions on 

19 transfer or assignment without the Secretary’s approval in subsection 

20 (a)(3) apply. 

21 ‘‘(3) OPERATION OF VESSEL.—During a period when subsection (a) 

22 applies, a trustee referred to in subsection (a)(3), even though ap23 proved as a trustee by the Secretary, may not operate the vessel under 

24 the mortgage or assignment without the Secretary’s approval. 

25 ‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in violation 

26 of this section is void. 

27 ‘‘(d) RECOVERY OF CONSIDERATION.—

28 ‘‘(1) IN GENERAL.—A person that deposited or paid consideration in 

29 connection with a transaction prohibited by this section may recover 

30 the consideration after tender of the vessel, facility, stock, or other se31 curity, or interest therein, to the person entitled to it, or the forfeiture 

32 thereof to the United States Government. 

33 ‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person in 

34 whose interest the consideration was deposited, or to whom it was paid, 

35 entered into the transaction in the belief that the person depositing or 

36 paying the consideration was a citizen of the United States. 

37 ‘‘(e) PENALTIES.—

38 ‘‘(1) CRIMINAL PENALTY.—A person that violates, or attempts or 

39 conspires to violate, this section shall be fined under title 18, impris40 oned for not more than 5 years, or both. 
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1 ‘‘(2) FORFEITURE.—The following shall be forfeited to the Govern2 ment: 

3 ‘‘(A) A vessel, a facility for building or repairing vessels, or an 

4 interest in a vessel or such a facility, that is sold, mortgaged, 

5 leased, chartered, delivered, transferred, or documented, or agreed 

6 to be sold, mortgaged, leased, chartered, delivered, transferred, or 

7 documented, in violation of this section. 

8 ‘‘(B) Stock and other securities sold or transferred, or agreed 

9 to be sold or transferred, in violation of this section. 

10 ‘‘(C) A vessel departing in violation of subsection (a)(6). 

11 ‘‘§ 56104. Conditional approvals 

12 ‘‘(a) IN GENERAL.—In approving an act or transaction under section 

13 56102 or 56103 of this title, the Secretary of Transportation may do so 

14 absolutely or upon conditions the Secretary considers advisable. The Sec15 retary shall state the conditions in the notice of approval. 

16 ‘‘(b) VIOLATIONS.—A violation of a condition of approval is subject to the 

17 same penalties as a violation resulting from an act done without the re18 quired approval. The violation occurs at the time the condition is violated. 

19 ‘‘§ 56105. Penalty for false statements 

20 ‘‘A person that knowingly makes a false statement of a material fact to 

21 the Secretary of Transportation or another officer, employee, or agent of the 

22 Department of Transportation, to obtain the Secretary’s approval under sec23 tion 56102 or 56103 of this title, shall be fined under title 18, imprisoned 

24 for not more than 5 years, or both. 

25 ‘‘§ 56106. Forfeiture procedure 

26 ‘‘(a) IN GENERAL.—A forfeiture under this chapter may be enforced in 

27 the same way as a forfeiture under the laws on the collection of duties. 

28 However, such a forfeiture may be remitted without seizure of the vessel. 

29 ‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter to enforce 

30 a forfeiture, a prior criminal conviction of a person for a violation of this 

31 chapter with respect to the subject matter of the forfeiture is prima facie 

32 evidence of the violation against the person convicted.

33 ‘‘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.

34 ‘‘§ 56301. General authority 

35 ‘‘During a national emergency declared by Presidential proclamation, or 

36 a period for which the President has proclaimed that the security of the na-
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1 tional defense makes it advisable, the Secretary of Transportation may req2 uisition or purchase, or requisition or charter the use of, a vessel owned by 

3 citizens of the United States, a documented vessel, or a vessel under con4 struction in the United States.

5 ‘‘§ 56302. Charter terms 

6 ‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not ownership 

7 under this chapter, the Secretary of Transportation, at the time of requisi8 tion or as soon thereafter as the situation allows, shall offer the person enti9 tled to possession of the vessel a charter containing—

10 ‘‘(1) the terms the Secretary believes should govern the relationship 

11 between the United States Government and the person; and 

12 ‘‘(2) the rate of hire the Secretary considers just compensation for 

13 the use of the vessel and the services required under the charter. 

14 ‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the charter 

15 and rate of hire, the parties shall proceed as provided in section 56304 of 

16 this title. 

17 ‘‘§ 56303. Compensation 

18 ‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of Transpor19 tation shall determine and pay just compensation for a vessel requisitioned 

20 under this chapter. 

21 ‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel may not 

22 be considered enhanced by the circumstances requiring its requisition. Con23 sequential damages arising from the requisition may not be paid. 

24 ‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.—

25 ‘‘(1) IF PAID.—If a construction-differential subsidy has been paid 

26 for the vessel, the value of the vessel at the time of requisition shall 

27 be determined under section 802 of the Merchant Marine Act, 1936. 

28 ‘‘(2) IF NOT PAID.—If a construction-differential subsidy has not 

29 been paid for the vessel, the value of any national defense features pre30 viously paid for by the United States Government shall be excluded. 

31 ‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost or dam32 aged by a risk assumed by the Government under the charter, but a valu33 ation for the vessel or a means of compensation has not been agreed to, 

34 the Secretary shall pay just compensation for the loss or damage, to the 

35 extent the person is not reimbursed through insurance. 

36 ‘‘§ 56304. Disputed compensation 

37 ‘‘If the person entitled to compensation disputes the amount of just com38 pensation determined by the Secretary of Transportation under this chapter, 

39 the Secretary shall pay the person, as a tentative advance, 75 percent of 

40 the amount determined. The person may bring a civil action against the 

41 United States Government to recover just compensation. If the tentative ad-
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1 vance paid under this section is greater than the amount of the court’s 

2 judgment, the person shall refund the difference. 

3 ‘‘§ 56305. Vessel encumbrances 

4 ‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel does 

5 not prevent the requisition of the vessel under this chapter. 

6 ‘‘(b) DEPOSIT IN TREASURY.—

7 ‘‘(1) IN GENERAL.—If an encumbrance exists, the Secretary of 

8 Transportation may deposit part of the compensation or advance of 

9 compensation to be paid under this chapter (but not more than the 

10 total amount of all encumbrances) in a fund in the Treasury. The Sec11 retary shall publish notice of the creation of the fund in the Federal 

12 Register. 

13 ‘‘(2) AVAILABILITY OF AMOUNTS DEPOSITED.—Amounts deposited in 

14 the fund shall be available to pay the compensation or any of the en15 cumbrances (including encumbrances stipulated to in a court of the 

16 United States or a State) existing at the time the vessel was requi17 sitioned. 

18 ‘‘(c) CIVIL ACTION.—

19 ‘‘(1) IN GENERAL.—Within 6 months after publication of notice 

20 under subsection (b), the holder of an encumbrance may bring a civil 

21 action in admiralty, according to the principles of libels in rem, against 

22 the fund. 

23 ‘‘(2) VENUE.—The action must be brought in the district court of 

24 the United States—

25 ‘‘(A) from whose custody the vessel was or may be requisitioned; 

26 or 

27 ‘‘(B) in whose district the vessel was located when it was requi28 sitioned. 

29 ‘‘(3) SERVICE OF PROCESS.—Service of process shall be made on the 

30 appropriate United States Attorney, the Attorney General, and the Sec31 retary, in the manner provided by the Federal Rules of Civil Procedure 

32 (28 App. U.S.C.). Notice of the action shall be given to all interested 

33 persons as ordered by the court. 

34 ‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall proceed and 

35 be determined according to the principles of law and the rules of prac36 tice applicable in like cases between private parties. 

37 ‘‘§ 56306. Use and transfer of vessels 

38 ‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, recon39 dition, reconstruct, operate, or charter for operation, a vessel acquired under 

40 this chapter. 
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1 ‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may transfer the 

2 possession or control of a vessel acquired under this chapter to another de3 partment or agency of the United States Government on terms and condi4 tions approved by the President. The department or agency shall promptly 

5 reimburse the Secretary for expenditures for just compensation, purchase 

6 price, charter hire, repairs, reconditioning, or reconstruction. 

7 ‘‘§ 56307. Return of vessels 

8 ‘‘When a vessel requisitioned for use but not ownership is returned to the 

9 owner, the Secretary of Transportation shall—

10 ‘‘(1) return the vessel in a condition at least as good as when taken, 

11 less ordinary wear and tear; or 

12 ‘‘(2) pay the owner an amount sufficient to recondition the vessel to 

13 that condition, less ordinary wear and tear.

14 ‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY 

15 NEUTRALITY ACT

‘‘Sec. 

‘‘56501. Definition. 

‘‘56502. Adjusting obligations and arranging maintenance. 

‘‘56503. Types of adjustments and arrangements. 

‘‘56504. Changes in adjustments and arrangements.

16 ‘‘§ 56501. Definition 

17 ‘‘In this chapter, the term ‘essential vessel’ means a vessel that is—

18 ‘‘(1)(A) security for a mortgage indebtedness to the United States 

19 Government; or 

20 ‘‘(B) constructed under this subtitle or required by a contract under 

21 this subtitle to be operated on a certain essential foreign trade route; 

22 and 

23 ‘‘(2) necessary in the interests of commerce and national defense to 

24 be maintained in condition for prompt use. 

25 ‘‘§ 56502. Adjusting obligations and arranging maintenance 

26 ‘‘(a) GENERAL AUTHORITY.—On written application, the Secretary of 

27 Transportation may adjust obligations and arrange for maintenance of an 

28 essential vessel as provided in this chapter if the Secretary determines, after 

29 any investigation or proceeding the Secretary considers desirable, that—

30 ‘‘(1) the operation of the vessel in the service, route, or line to which 

31 it is assigned under this subtitle, or in which it otherwise would be op32 erated, is not—

33 ‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 

34 et seq.) or a proclamation issued under that Act; or 

35 ‘‘(B) compatible with maintaining the availability of the vessel 

36 for national defense and commerce; 

37 ‘‘(2) it is not feasible under existing law to employ the vessel in any 

38 other service or operation in foreign or domestic trade (except tem-
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1 porary or emergency operation under section 56503(b)(5) of this title); 

2 and

3 ‘‘(3) the applicant, because of the restrictions of the Neutrality Act 

4 of 1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for na5 tional defense under clause (1), is not earning or will not earn a rea6 sonable return on the capital necessarily employed in its business. 

7 ‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under sub8 section (a) shall continue in effect only as long as the circumstances de9 scribed in subsection (a) continue to exist. 

10 ‘‘§ 56503. Types of adjustments and arrangements 

11 ‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrangement 

12 under this chapter shall include suspension of—

13 ‘‘(1) the requirement to operate the vessel in foreign trade under the 

14 applicable operating-differential or construction-differential subsidy 

15 contract or mortgage or other agreement; and 

16 ‘‘(2) the right to operating-differential subsidy for the vessel. 

17 ‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To the ex18 tent the Secretary of Transportation considers appropriate to carry out the 

19 purposes of this subtitle, an adjustment or arrangement under this chapter 

20 may include any of the following: 

21 ‘‘(1) Lay-up of the vessel by the owner or in the custody of the Sec22 retary, with payment or reimbursement by the Secretary of necessary 

23 and proper expenses (including reasonable overhead and insurance) or 

24 a fixed periodic allowance instead of payment or reimbursement. 

25 ‘‘(2) Postponement, for not more than the total period of the lay26 up, of the maturity date of each installment of the principal of obliga27 tions to the United States Government for the vessel (regardless of 

28 whether the maturity date is during a lay-up period), or rearrangement 

29 of those maturities. 

30 ‘‘(3) Postponement or cancellation of interest accruing on the obliga31 tions during a lay-up period. 

32 ‘‘(4) Extension, for not more than the total period of the lay-up, of 

33 the 20-year life limitation for the vessel and other limitations and pro34 visions of this subtitle based on a 20-year life. 

35 ‘‘(5) Provision for temporary or emergency employment of the vessel 

36 (instead of lay-up) as may be practicable, with such arrangements for 

37 management of the vessel, payment of expenses, and application of the 

38 proceeds of the employment, as the Secretary may approve, with any 

39 period of operation being included as part of the lay-up period. 

40 ‘‘(6) Payment to the Secretary, on termination of the arrangements 

41 with the applicant, of the applicant’s net profits (earned while the ar-
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1 rangements were in effect) in excess of 10 percent a year on the capital 

2 necessarily employed in the applicant’s business, as reimbursement for 

3 obligations postponed or canceled and expenses incurred or paid by the 

4 Secretary under this section. 

5 ‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the appli6 cant represented by a vessel of the applicant laid-up or operated under this 

7 section shall be included in capital necessarily employed in the applicant’s 

8 business. The Secretary may require a vessel laid-up or operated under this 

9 section to be security for reimbursement. 

10 ‘‘§ 56504. Changes in adjustments and arrangements 

11 ‘‘The Secretary of Transportation may change an adjustment or arrange12 ment made under this chapter as the Secretary considers necessary to carry 

13 out this chapter.

14 ‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS

15 ‘‘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.

16 ‘‘§ 57101. Placement of vessels in National Defense Reserve 

17 Fleet 

18 ‘‘(a) IN GENERAL.—Any vessel acquired by the Maritime Administration 

19 shall be placed in the National Defense Reserve Fleet maintained under sec20 tion 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1744). 

21 ‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under sub22 section (a) may not be traded out or sold from the Fleet, except as provided 

23 in section 57102, 57103, or 57104 or chapter 533, 537, 573, or 575 of this 

24 title. 

25 ‘‘§ 57102. Disposition of vessels not worth preserving 

26 ‘‘(a) IN GENERAL.—If the Secretary of Transportation determines that 

27 a vessel owned by the Maritime Administration is of insufficient value for 

28 commercial or military operation to warrant its further preservation, the 

29 Secretary may scrap the vessel or sell the vessel for cash. 

30 ‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection (a) 

31 shall be made on the basis of competitive sealed bids, after an appraisal and 

32 due advertisement. The purchaser does not have to be a citizen of the 

33 United States. The purchaser shall provide a surety bond, with a surety ap34 proved by the Secretary, to ensure that the vessel will not be operated in 
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1 the foreign trade of the United States at any time within 10 years after 

2 the sale, in competition with a vessel owned by a citizen of the United 

3 States and documented under the laws of the United States. 

4 ‘‘§ 57103. Sale of obsolete vessels in National Defense Re5 serve Fleet 

6 ‘‘(a) IN GENERAL.—The Secretary of Transportation may convey the 

7 right, title, and interest of the United States Government in any vessel of 

8 the National Defense Reserve Fleet that has been identified by the Sec9 retary as an obsolete vessel of insufficient value to warrant its further pres10 ervation, if the recipient—

11 ‘‘(1) is a non-profit organization, a State, or a municipal corporation 

12 or political subdivision of a State; 

13 ‘‘(2) agrees not to use, or allow others to use, the vessel for commer14 cial transportation purposes; 

15 ‘‘(3) agrees to make the vessel available to the Government whenever 

16 the Secretary indicates that it is needed by the Government; 

17 ‘‘(4) agrees to hold the Government harmless for any claims arising 

18 from exposure to asbestos, polychlorinated biphenyls, lead paint, or 

19 other hazardous substances after conveyance of the vessel, except for 

20 claims arising from use of the vessel by the Government; 

21 ‘‘(5) has a conveyance plan and a business plan that describes the 

22 intended use of the vessel, each of which has been submitted to and 

23 approved by the Secretary; 

24 ‘‘(6) has provided proof, as determined by the Secretary, of resources 

25 sufficient to accomplish the transfer, necessary repairs and modifica26 tions, and initiation of the intended use of the vessel; and 

27 ‘‘(7) agrees that when the recipient no longer requires the vessel for 

28 use as described in the business plan required under clause (5)—

29 ‘‘(A) the recipient will, at the discretion of the Secretary, re30 convey the vessel to the Government in good condition except for 

31 ordinary wear and tear; or 

32 ‘‘(B) if the Board of Trustees of the recipient has decided to 

33 dissolve the recipient according to the laws of the State in which 

34 the recipient is incorporated, then—

35 ‘‘(i) the recipient shall distribute the vessel, as an asset of 

36 the recipient, to a person that has been determined exempt 

37 from taxation under section 501(c)(3) of the Internal Rev38 enue Code of 1986 (26 U.S.C. 501(c)(3)), or to the Federal 

39 Government or a State or local government for a public pur40 pose; and 
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1 ‘‘(ii) the vessel shall be disposed of by a court of competent 

2 jurisdiction of the county in which the principal office of the

3 recipient is located, for such purposes as the court shall de4 termine, or to such organizations as the court shall determine 

5 are organized exclusively for public purposes. 

6 ‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, additional 

7 equipment from other obsolete vessels of the Fleet may be conveyed to assist 

8 the recipient with maintenance, repairs, or modifications. 

9 ‘‘(c) ADDITIONAL TERMS.—The Secretary may require any additional 

10 terms the Secretary considers appropriate. 

11 ‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this section, 

12 the vessel shall be delivered to the recipient at a time and place to be deter13 mined by the Secretary. The vessel shall be conveyed in an ‘as is’ condition. 

14 ‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel to the 

15 recipient, the Secretary determines that a different disposition of the vessel 

16 would better serve the interests of the Government, the Secretary shall pur17 sue the more favorable disposition of the obsolete vessel and shall not be 

18 liable for any damages that may result from an intended recipient’s reliance 

19 upon a proposed transfer. 

20 ‘‘(f) REVERSION.—The Secretary shall include in any conveyance under 

21 this section terms under which all right, title, and interest conveyed by the 

22 Secretary shall revert to the Government if the Secretary determines the 

23 vessel has been used other than as described in the business plan required 

24 under subsection (a)(5). 

25 ‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels 

26 ‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire suit27 able documented vessels with amounts in the Vessel Operations Revolving 

28 Fund derived from the sale of obsolete vessels in the National Defense Re29 serve Fleet. 

30 ‘‘(b) VALUATION.—The acquired and obsolete vessels shall be valued at 

31 their scrap value in domestic or foreign markets as of the date of the acqui32 sition for or sale from the Fleet. However, the value assigned to those ves33 sels shall be determined on the same basis, with consideration given to the 

34 fair value of the cost of moving the vessel sold from the Fleet to the place 

35 of scrapping. 

36 ‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the lay-up of the 

37 vessel acquired under this section may be paid from amounts in the Fund. 

38 ‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet under 

39 this section may be scrapped in an approved foreign market without obtain40 ing additional separate approval from the Secretary to transfer the vessel 

41 to a person not a citizen of the United States. 
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1 ‘‘§ 57105. Acquisition of vessels for essential services, routes, 

2 or lines 

3 ‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire a ves4 sel, by purchase or otherwise, if—

5 ‘‘(1) the Secretary considers the vessel necessary to establish, main6 tain, improve, or serve as a replacement on an essential service, route, 

7 or line in the foreign commerce of the United States, as determined 

8 under section 50103 of this title; 

9 ‘‘(2) the vessel was constructed in the United States; and 

10 ‘‘(3) the Secretary of the Navy has certified to the Secretary of 

11 Transportation that the vessel is suitable for economical and speedy 

12 conversion into a naval or military auxiliary or otherwise suitable for 

13 use by the United States Government in time of war or national emer14 gency. 

15 ‘‘(b) PRICE.—The price paid for the vessel shall be based on a fair and 

16 reasonable valuation. However, the price may not exceed by more than 5 

17 percent the cost of the vessel to the owner (excluding any construction-dif18 ferential subsidy and the cost of national defense features paid by the Sec19 retary of Transportation) plus the actual cost previously expended for recon20 ditioning, less depreciation based on a 25-year life for a dry-cargo or pas21 senger vessel and a 20-year life for a tanker or other liquid bulk carrier 

22 vessel. 

23 ‘‘(c) DOCUMENTATION.—A vessel acquired under this section that is not 

24 documented under the laws of the United States at the time of acquisition 

25 shall be so documented as soon as practicable. 

26 ‘‘§ 57106. Maintenance, improvement, and operation of ves27 sels 

28 ‘‘(a) IN GENERAL.—The Secretary of Transportation may maintain, re29 pair, recondition, remodel, and improve vessels owned by the United States 

30 Government and in the possession or under the control of the Secretary, to 

31 equip them adequately for competition in the foreign trade of the United 

32 States. The Secretary may operate such a vessel or charter the vessel on 

33 terms and conditions the Secretary considers appropriate to carry out the 

34 purposes of this subtitle. 

35 ‘‘(b) DOCUMENTATION AND RESTRICTIONS ON OPERATION.—A vessel re36 conditioned, remodeled, or improved under subsection (a) shall be docu37 mented under the laws of the United States and remain so documented for 

38 at least 5 years after completion of the reconditioning, remodeling, or im39 provement. During that period, it shall be operated on voyages that are not 

40 exclusively coastwise. 
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1 ‘‘§ 57107. Vessels for other agencies 

2 ‘‘(a) IN GENERAL.—The Secretary of Transportation may construct, re3 construct, repair, equip, and outfit, by contract or otherwise, vessels or 

4 parts thereof, for any other department or agency of the United States Gov5 ernment to the extent the other department or agency is authorized by law 

6 to do so for its own account. 

7 ‘‘(b) EFFECT ON CONTRACT AUTHORIZATION.—An obligation incurred or 

8 expenditure made by the Secretary under this section does not affect any 

9 contract authorization of the Secretary, but instead shall be charged against 

10 the existing appropriation or contract authorization of the department or 

11 agency. 

12 ‘‘§ 57108. Consideration of ballast and equipment in deter13 mining selling price 

14 ‘‘The Maritime Administration may not sell a vessel until its ballast and 

15 equipment have been inventoried and their value considered in determining 

16 the selling price of the vessel. 

17 ‘‘§ 57109. Operation of vessels purchased, chartered, or 

18 leased from Secretary of Transportation 

19 ‘‘Unless otherwise authorized by the Secretary of Transportation, a vessel 

20 purchased, chartered, or leased from the Secretary may be operated only 

21 under a certificate of documentation with a registry or coastwise endorse22 ment. Such a vessel, while employed solely as a merchant vessel, is subject 

23 to the laws, regulations, and liabilities governing merchant vessels, whether 

24 the United States Government has an interest in the vessel as an owner or 

25 holds a mortgage, lien, or other interest.

26 ‘‘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.

27 ‘‘§ 57301. Definitions 

28 ‘‘In this chapter: 

29 ‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel—

30 ‘‘(A) constructed under this subtitle and acquired within 2 years 

31 after the date of completion; or 

32 ‘‘(B) constructed in a domestic shipyard on private account and 

33 not under this subtitle, and documented under the laws of the 

34 United States.
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•HR 4319 IH 

1 ‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means a vessel 

2 that—

3 ‘‘(A) is of at least 1,350 gross tons; 

4 ‘‘(B) the Secretary of Transportation believes should, because of 

5 its age, obsolescence, or other reasons, be replaced in the public 

6 interest; and 

7 ‘‘(C) has been owned by a citizen of the United States for at 

8 least 3 years immediately before its acquisition under this chapter. 

9 ‘‘§ 57302. Authority to acquire vessels 

10 ‘‘To promote the construction of new, safe, and efficient vessels to carry 

11 the domestic and foreign waterborne commerce of the United States, the 

12 Secretary of Transportation may acquire an obsolete vessel in exchange for 

13 an allowance of credit toward the cost of construction or purchase of a new 

14 vessel as provided in this chapter. 

15 ‘‘§ 57303. Utility value and tonnage requirements 

16 ‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be acquired 

17 under this chapter for operation in the domestic or foreign commerce of the 

18 United States may not be substantially less than that of the obsolete vessel 

19 acquired in exchange under this chapter. 

20 ‘‘(b) TONNAGE.—If the Secretary of Transportation finds that the new 

21 vessel will have a utility value at least equal to that of the obsolete vessel, 

22 the new vessel may be of lesser gross tonnage than the obsolete vessel. How23 ever, the gross tonnage of the new vessel must be at least one-third the 

24 gross tonnage of the obsolete vessel. 

25 ‘‘§ 57304. Eligible acquisition dates 

26 ‘‘At the option of the owner, the acquisition of an obsolete vessel under 

27 this chapter shall occur—

28 ‘‘(1) when the owner contracts for the construction or purchase of 

29 a new vessel; or 

30 ‘‘(2) within 5 days of the actual date of delivery of the new vessel 

31 to the owner. 

32 ‘‘§ 57305. Determination of trade-in allowance 

33 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall determine the 

34 trade-in allowance for an obsolete vessel at the time of acquisition of the 

35 vessel. The allowance shall be the fair value of the vessel. In determining 

36 the value, the Secretary shall consider—

37 ‘‘(1) the scrap value of the obsolete vessel in American and foreign 

38 markets; 

39 ‘‘(2) the depreciated value based on a 20-year or 25-year life, which40 ever applies to the obsolete vessel; and 
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1 ‘‘(3) the market value of the obsolete vessel for operation in world 

2 commerce or in the domestic or foreign commerce of the United States. 

3 ‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete vessel 

4 occurs when the owner contracts for the construction of the new vessel, and 

5 the owner uses the obsolete vessel during the period of construction of the 

6 new vessel, the Secretary shall reduce the trade-in allowance by an amount 

7 representing the fair value of that use. The Secretary shall establish the 

8 rate for use of the obsolete vessel when the contract for construction of the 

9 new vessel is made. 

10 ‘‘§ 57306. Payment of trade-in allowance 

11 ‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an obsolete 

12 vessel under this chapter occurs when the owner contracts for the construc13 tion or purchase of the new vessel, the Secretary of Transportation shall 

14 apply the trade-in allowance to the purchase price of the new vessel rather 

15 than paying it to the owner. If the new vessel is constructed under this sub16 title, the Secretary may apply the trade-in allowance to the required cash 

17 payments on terms and conditions the Secretary may prescribe. If the new 

18 vessel is not constructed under this subtitle, the Secretary shall pay the 

19 trade-in allowance to the builder of the vessel for the account of the owner 

20 when the Secretary acquires the obsolete vessel. 

21 ‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the obsolete 

22 vessel occurs when the new vessel is delivered to the owner, the Secretary 

23 shall deposit the trade-in allowance in the owner’s capital construction fund. 

24 ‘‘§ 57307. Recognition of gain for tax purposes 

25 ‘‘The owner of an obsolete vessel does not recognize a gain under the 

26 Federal income tax laws when the vessel is transferred to the Secretary of 

27 Transportation in exchange for a trade-in allowance under this chapter. The 

28 basis of the new vessel acquired with the allowance is the same as the basis 

29 of the obsolete vessel—

30 ‘‘(1) increased by the difference between the cost of the new vessel 

31 and the trade-in allowance of the obsolete vessel; and 

32 ‘‘(2) decreased by the amount of loss recognized on the transfer. 

33 ‘‘§ 57308. Use of vessels at least 25 years old 

34 ‘‘An obsolete vessel acquired under this chapter that is or becomes at 

35 least 25 years old may not be used for commercial operation. However, the 

36 vessel may be used—

37 ‘‘(1) during a period in which vessels may be requisitioned under 

38 chapter 563 of this title; or 

39 ‘‘(2) except as otherwise provided in this subtitle, on trade routes 

40 serving only the foreign trade of the United States.
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1 ‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE 

2 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.

3 ‘‘SUBCHAPTER I—GENERAL 

4 ‘‘§ 57501. Completion of long-range program 

5 ‘‘Whenever the Secretary of Transportation determines that the objectives 

6 and policies declared in sections 50101 and 50102 of this title cannot be 

7 fully realized within a reasonable time under titles V and VI of the Mer8 chant Marine Act, 1936, and the President approves the determination, the 

9 Secretary, in accordance with this chapter, shall complete the long-range 

10 program described in section 50102 of this title. 

11 ‘‘§ 57502. Construction, reconditioning, and remodeling of 

12 vessels 

13 ‘‘(a) IN GENERAL.—The Secretary of Transportation may have new ves14 sels constructed, and have old vessels reconditioned or remodeled, as the 

15 Secretary determines necessary to carry out the objectives of this subtitle. 

16 ‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remodeling of 

17 vessels under subsection (a) shall take place in shipyards in the continental 

18 United States (including Alaska and Hawaii). However, if satisfactory con19 tracts cannot be obtained from private shipbuilders, the Secretary may have 

20 the work done in navy yards. 

21 ‘‘(c) APPLICABILITY OF CONSTRUCTION-DIFFERENTIAL SUBSIDY PROVI22 SIONS.—Contracts for the construction, reconstruction, or reconditioning of 

23 a vessel by a private shipbuilder under this chapter are subject to the provi24 sions of title V of the Merchant Marine Act, 1936, applicable to a contract

25 with a private shipbuilder for the construction of a vessel under title V of 

26 that Act. 
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1 ‘‘§ 57503. Competitive bidding 

2 ‘‘(a) ADVERTISEMENT AND BIDDING.—The Secretary of Transportation 

3 may make a contract with a private shipbuilder for the construction of a 

4 new vessel, or for the reconstruction or reconditioning of an existing vessel, 

5 only after due advertisement and upon sealed competitive bids. 

6 ‘‘(b) OPENING OF BIDS.—Bids required under this section shall be 

7 opened at the time and place stated in the advertisement for bids. All inter8 ested persons, including representatives of the press, shall be permitted to 

9 attend. The results of the bidding shall be publicly announced. 

10 ‘‘§ 57504. Charter or sale of vessels acquired by Department 

11 of Transportation 

12 ‘‘Vessels transferred to or otherwise acquired by the Department of 

13 Transportation in any manner may be chartered or sold by the Secretary 

14 of Transportation as provided in this chapter. 

15 ‘‘§ 57505. Employment of vessels on foreign trade routes 

16 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall arrange for 

17 the employment of the Department of Transportation’s vessels in steamship 

18 lines on such trade routes, exclusively serving the foreign trade of the 

19 United States, as the Secretary determines are essential for the development 

20 and maintenance of the commerce of the United States and the national de21 fense. However, the Secretary shall first determine that those routes are not 

22 being adequately served by existing steamship lines privately owned and op23 erated by citizens of the United States and documented under the laws of 

24 the United States. 

25 ‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Secretary shall 

26 have a policy of encouraging private operation of each essential steamship 

27 line now owned by the United States Government by—

28 ‘‘(1) selling the line to a citizen of the United States; or 

29 ‘‘(2) demising the Secretary’s vessels on bareboat charter to citizens 

30 of the United States who agree to maintain the line in the manner pro31 vided in this chapter. 

32 ‘‘§ 57506. Minimum selling price of vessels 

33 ‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or the Mer34 chant Marine Act, 1936, may not be sold by the Secretary of Transpor35 tation for less than the price specified in this section. 

36 ‘‘(b) OPERATION IN FOREIGN TRADE.—If the vessel is to be operated in 

37 foreign trade, the minimum price is the estimated foreign construction cost 

38 (exclusive of national defense features) determined as of the date the con39 struction contract is executed, less depreciation under subsection (d). 

40 ‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be operated 

41 in domestic trade, the minimum price is the cost of construction in the 
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•HR 4319 IH 

1 United States (exclusive of national defense features), less depreciation 

2 under subsection (d). 

3 ‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and (c) shall be 

4 based on—

5 ‘‘(1) a 25-year life for dry-cargo and passenger vessels; and 

6 ‘‘(2) a 20-year life for tankers and other bulk liquid carrier vessels. 

7 ‘‘SUBCHAPTER II—CHARTERS 

8 ‘‘§ 57511. Demise charters 

9 ‘‘A charter by the Secretary of Transportation under this chapter shall 

10 demise the vessel to the charterer subject to all usual conditions contained 

11 in a bareboat charter. The charter shall be for a term the Secretary con12 siders to be in the best interest of the United States Government and the 

13 merchant marine. 

14 ‘‘§ 57512. Competitive bidding 

15 ‘‘(a) IN GENERAL.—The Secretary of Transportation may charter a ves16 sel of the Department of Transportation to a private operator only on the 

17 basis of competitive sealed bidding. The bids must be submitted in strict 

18 compliance with the terms and conditions of a public advertisement solic19 iting the bids. 

20 ‘‘(b) ADVERTISEMENT FOR BIDS.—An advertisement for bids shall 

21 state—

22 ‘‘(1) the number, type, and tonnage of the vessels being offered for 

23 bareboat charter for operation as a steamship line on a designated 

24 trade route; 

25 ‘‘(2) the minimum number of sailings required; 

26 ‘‘(3) the length of time of the charter; 

27 ‘‘(4) the right of the Secretary to reject all bids; and 

28 ‘‘(5) other information the Secretary considers necessary for the in29 formation of prospective bidders. 

30 ‘‘(c) OPENING OF BIDS.—Bids required under this section shall be 

31 opened at the time and place stated in the advertisement for bids. All inter32 ested persons, including representatives of the press, shall be permitted to 

33 attend. The results of the bidding shall be publicly announced. 

34 ‘‘§ 57513. Minimum bid 

35 ‘‘The Secretary of Transportation shall reject any bid for the charter 

36 under this subchapter of a vessel constructed under this subtitle or the Mer37 chant Marine Act, 1936, if the charter hire offered is lower than the min38 imum charter hire would be if the vessel were chartered under section 

39 57531 of this title. 
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1 ‘‘§ 57514. Qualifications of bidders 

2 ‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter to a bid3 der, the Secretary of Transportation shall consider—

4 ‘‘(1) the bidder’s financial resources, credit standing, and practical 

5 experience in operating vessels; and 

6 ‘‘(2) other factors a prudent business person would consider in enter7 ing into a transaction involving a large capital investment. 

8 ‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a vessel to a 

9 person appearing to lack sufficient capital, credit, and experience to operate 

10 the vessel successfully over the period covered by the charter. 

11 ‘‘§ 57515. Awarding of charters 

12 ‘‘(a) IN GENERAL.—The Secretary of Transportation shall award the 

13 charter to the bidder proposing to pay the highest monthly charter hire. 

14 However, the Secretary may reject the highest or most advantageous or any 

15 other bid if the Secretary considers the charter hire offered too low or deter16 mines that the bidder lacks the qualifications required by section 57514 of 

17 this title. 

18 ‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the highest bid, 

19 the Secretary may—

20 ‘‘(1) award the charter to the next highest bidder; or 

21 ‘‘(2) reject all bids and either readvertise the line or operate the line 

22 until conditions appear more favorable to reoffer the line for private 

23 charter. 

24 ‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason for 

25 rejection shall be stated in writing to the bidder. 

26 ‘‘§ 57516. Operating-differential subsidies 

27 ‘‘If the Secretary of Transportation considers it necessary, the Secretary 

28 may make a contract with a charterer of a vessel owned by the Secretary 

29 for payment of an operating-differential subsidy, on the same terms and 

30 conditions, and subject to the same limitations and restrictions, as otherwise 

31 provided with respect to payment of operating-differential subsidies to oper32 ators of privately-owned vessels. 

33 ‘‘§ 57517. Recovery of excess profits 

34 ‘‘(a) IN GENERAL.—A charter under this chapter shall provide that if, 

35 at the end of a calendar year subsequent to the execution of the charter, 

36 the cumulative net voyage profit (after payment of the charter hire reserved 

37 in the charter and payment of the charterer’s fair and reasonable overhead 

38 expenses applicable to operation of the chartered vessel) exceeds 10 percent 

39 a year of the charterer’s capital necessarily employed in the business of the 

40 chartered vessel, the charterer shall pay to the Secretary of Transportation, 

41 as additional charter hire, half the cumulative net voyage profit in excess
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1 of 10 percent a year. However, any cumulative net voyage profit accounted 

2 for under this subsection is not to be included in the calculation of cumu3 lative net voyage profit in any subsequent year. 

4 ‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall define the 

5 terms ‘net voyage profit’, ‘fair and reasonable overhead expenses’, and ‘cap6 ital necessarily employed’ for this section. Each advertisement for bids and 

7 each charter shall contain these definitions, stating the formula for deter8 mining each of these three amounts. 

9 ‘‘§ 57518. Performance bond 

10 ‘‘The Secretary of Transportation shall require a charterer of a vessel of 

11 the Secretary to deposit with the Secretary an undertaking, with approved 

12 sureties, in such amount as the Secretary may require as security for the 

13 faithful performance of the terms of the charter, including indemnity 

14 against liens on the chartered vessel. 

15 ‘‘§ 57519. Insurance 

16 ‘‘A charter under this chapter shall require the charterer to carry, at the 

17 charterer’s expense, insurance on the chartered vessel covering all marine 

18 and port risks, protection and indemnity risks, and all other hazards and 

19 liabilities, adequate to cover damages claimed against and losses sustained 

20 by the chartered vessel arising during the term of the charter. The insur21 ance shall be in such form, in such amount, and with such companies as 

22 the Secretary of Transportation may require. In accordance with law, any 

23 of the insurance risks may be underwritten by the Secretary. 

24 ‘‘§ 57520. Vessel maintenance 

25 ‘‘(a) IN GENERAL.—A charter under this chapter shall require the 

26 charterer, at the charterer’s expense, to—

27 ‘‘(1) keep the chartered vessel in good repair and efficient operating 

28 condition; and 

29 ‘‘(2) make any repairs required by the Secretary of Transportation. 

30 ‘‘(b) INSPECTION.—The charter shall provide that the Secretary has the 

31 right to inspect the vessel at any time to ascertain its condition. 

32 ‘‘§ 57521. Termination of charter during national emergency 

33 ‘‘A charter under this chapter shall provide that during a national emer34 gency proclaimed by the President or a period for which the President has 

35 proclaimed that the security of the national defense makes it advisable, the 

36 Secretary of Transportation may terminate the charter without cost to the 

37 United States Government on such notice to the charterer as the President 

38 determines. 
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1 ‘‘SUBCHAPTER III—MISCELLANEOUS 

2 ‘‘§ 57531. Construction and charter of vessels for unsuccess3 ful routes 

4 ‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that a trade 

5 route determined to be essential under section 50103 of this title cannot be 

6 successfully developed and maintained and the Secretary’s replacement pro7 gram cannot be achieved under private operation of the trade route by a 

8 citizen of the United States with vessels documented under the laws of the 

9 United States, without further aid by the United States Government in ad10 dition to the financial aid authorized under titles V and VI of the Merchant 

11 Marine Act, 1936, the Secretary, without advertisement or competition, 

12 may—

13 ‘‘(1) have constructed, in private shipyards or in navy yards, vessels 

14 of the types necessary for the trade route; and 

15 ‘‘(2) demise those new vessels or bareboat charter them to the Amer16 ican-flag operator established on the trade route. 

17 ‘‘(b) AMOUNT OF CHARTER HIRE.—

18 ‘‘(1) IN GENERAL.—The annual charter hire under subsection (a) 

19 shall be at least 4 percent of the price (referred to in this section as 

20 the ‘foreign cost’) at which the vessel would be sold if constructed 

21 under title V of the Merchant Marine Act, 1936, plus—

22 ‘‘(A) a percentage of the depreciated foreign cost computed an23 nually determined by the Secretary of the Treasury, taking into 

24 consideration the current average market yield on outstanding 

25 marketable obligations of the Government with remaining periods 

26 to maturity comparable to the term of the charter, adjusted to the 

27 nearest one-eighth percent; and 

28 ‘‘(B) an allowance adequate in the judgment of the Secretary 

29 of Transportation to cover administrative costs. 

30 ‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) shall be 

31 based on—

32 ‘‘(A) a 25-year life for dry-cargo and passenger vessels; and 

33 ‘‘(B) a 20-year life for tankers and other bulk liquid carrier ves34 sels. 

35 ‘‘(c) OPTION TO PURCHASE.—The charter may contain an option to the 

36 charterer to purchase the vessels from the Secretary of Transportation with37 in 5 years after delivery under the charter, on the same terms and condi38 tions as provided in title V of the Merchant Marine Act, 1936, for the pur39 chase of new vessels from the Secretary. However—
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1 ‘‘(1) the purchase price shall be the foreign cost less depreciation to 

2 the date of purchase based on the useful life specified in subsection 

3 (b)(2); 

4 ‘‘(2) the required cash payment payable at the time of the purchase 

5 shall be 25 percent of the purchase price; 

6 ‘‘(3) the charter may provide that any part of the charter hire paid 

7 in excess of the minimum charter hire provided for in this section may 

8 be credited against the cash payment payable at the time of the pur9 chase; 

10 ‘‘(4) the balance of the purchase price shall be paid within the re11 maining years of useful life (as specified in subsection (b)(2)) after the 

12 date of delivery of the vessel under the charter and in approximately 

13 equal annual installments, except that the first installment, which shall 

14 be payable on the next ensuing anniversary date of the delivery under 

15 the charter, shall be a proportionate part of the annual installment; 

16 and 

17 ‘‘(5) interest shall be payable on the unpaid balances from the date 

18 of purchase, at a rate not less than—

19 ‘‘(A) a rate determined by the Secretary of the Treasury, taking 

20 into consideration the current average market yield on outstanding 

21 marketable obligations of the Government with remaining periods 

22 to maturity comparable to the average maturities of the loans, ad23 justed to the nearest one-eighth percent; plus 

24 ‘‘(B) an allowance adequate in the judgment of the Secretary 

25 of Transportation to cover administrative costs. 

26 ‘‘(d) OPERATION OF VESSEL.—

27 ‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for oper28 ation of the vessel exclusively—

29 ‘‘(A) in foreign trade; 

30 ‘‘(B) on a round-the-world voyage; 

31 ‘‘(C) on a round voyage from the west coast of the United 

32 States to a European port that includes an intercoastal port of the 

33 United States; 

34 ‘‘(D) on a round voyage from the Atlantic coast of the United 

35 States to the Orient that includes an intercoastal port of the 

36 United States; or 

37 ‘‘(E) on a voyage in foreign trade on which the vessel may stop 

38 at Hawaii or an island territory or possession of the United 

39 States. 

40 ‘‘(2) DOMESTIC TRADE.—The charter shall provide if the vessel is 

41 operated in domestic trade on any of the services specified in para-
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1 graph (1), the charterer will pay annually to the Secretary of Transportation that proportion of 1 2 ⁄25 of the difference between the domestic 

3 and foreign cost of the vessel as the gross revenue derived from the 

4 domestic trade bears to the gross revenue derived from the entire voy5 ages completed during the preceding year. 

6 ‘‘§ 57532. Operation of experimental vessels 

7 ‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’ means 

8 a vessel owned by the United States Government (including a vessel in the 

9 National Defense Reserve Fleet) that has been constructed, reconditioned, 

10 or remodeled for experimental or testing purposes. 

11 ‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation, for 

12 the purpose of practical development, trial, and testing, may operate an ex13 perimental vessel under a bareboat charter or general agency agreement in 

14 the foreign or domestic trade of the United States or for use for the account 

15 of a department or agency of the Government, without regard to other pro16 visions of this subtitle and other laws related to chartering and general 

17 agency operations. Not more than 10 vessels may be operated and tested 

18 under this section in any one year. 

19 ‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this section 

20 shall be on terms the Secretary considers appropriate to carry out the pur21 poses of this subtitle. A bareboat charter under this section shall be at rea22 sonable rates and include restrictions the Secretary considers appropriate to 

23 protect the public interest, including provisions for recapture of profits 

24 under section 57517 of this title. A charter or general agency agreement 

25 under this section shall be reviewed annually to determine whether condi26 tions exist to justify continuance of the charter or agreement. 

27 ‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel operations of the 

28 Secretary under this section and employed through a general agent in con29 nection with a charter or agreement under this section is entitled to all the 

30 rights and remedies provided in sections 1(a) and (c), 3(c), and 4 of the 

31 Act of March 24, 1943 (50 App. U.S.C. 1291(a), (c), 1293(c), 1294).

32 ‘‘PART G—RESTRICTIONS AND PENALTIES

33 ‘‘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.
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1 ‘‘§ 58101. Operating in domestic intercoastal or coastwise 

2 service 

3 ‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid to a con4 tractor under the operating-differential subsidy program, and a vessel may 

5 not be chartered to a person under chapter 575 of this title, if the con6 tractor or charterer, or a holding company, subsidiary, affiliate, or associate 

7 of the contractor or charterer, or an officer, director, agent, or executive 

8 thereof, directly or indirectly—

9 ‘‘(1) owns, charters, or operates a vessel engaged in the domestic 

10 intercoastal or coastwise service; or 

11 ‘‘(2) owns a pecuniary interest in a person that owns, charters, or 

12 operates a vessel in the domestic intercoastal or coastwise service. 

13 ‘‘(b) WAIVER.—A person may apply to the Secretary of Transportation 

14 for a waiver of subsection (a). Before deciding on the waiver, the Secretary 

15 shall give the applicant and other interested persons an opportunity for a 

16 hearing. The Secretary may not grant the waiver if the Secretary finds it 

17 would—

18 ‘‘(1) result in unfair competition to a person operating exclusively in 

19 the domestic intercoastal or coastwise service; or 

20 ‘‘(2) be prejudicial to the objectives and policy of this subtitle. 

21 ‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall grant 

22 an application under subsection (b) without requiring further proof that the 

23 public interest and convenience will be served and without further pro24 ceedings as to the competition in the route or trade, if the contractor or 

25 other person, or a predecessor in interest, was in bona-fide operation as a 

26 common carrier by water in the domestic intercoastal or coastwise trade in 

27 1935 over the route or in the trade for which the application is made and 

28 has so operated since that time or, if engaged in furnishing seasonal service 

29 only, was in bona-fide operation in 1935 during the season ordinarily cov30 ered by its operation, except in either event as to interruptions of service 

31 over which the applicant or its predecessor in interest had no control. 

32 ‘‘(d) DIVERSION INTO INTERCOASTAL OR COASTWISE OPERATIONS.—If 

33 an application under subsection (b) is approved, a person referred to in this 

34 section may not divert, directly or indirectly, money, property, or any other 

35 thing of value, used in a foreign-trade operation for which a subsidy is paid 

36 by the United States Government, into intercoastal or coastwise operations. 

37 ‘‘§ 58102. Default on payment or maintenance of reserves 

38 ‘‘The Secretary of Transportation may supervise the number and com39 pensation of all officers and employees of a contractor under the operating40 differential subsidy program or a charterer under chapter 575 of this title, 

41 receiving an operating-differential subsidy, if the contractor or charterer—
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1 ‘‘(1) is in default on a mortgage, note, purchase contract, or other 

2 obligation to the Secretary; or 

3 ‘‘(2) has not maintained, in a manner satisfactory to the Secretary, 

4 all of the reserves provided for in this subtitle. 

5 ‘‘§ 58103. Employing another person as managing or oper6 ating agent 

7 ‘‘(a) PROHIBITION.—Except with the written consent of the Secretary of 

8 Transportation, a contractor holding a contract under the operating-dif9 ferential subsidy program or under chapter 575 of this title may not—

10 ‘‘(1) employ another person as the managing or operating agent of 

11 the operator; or 

12 ‘‘(2) charter a vessel, on which an operating-differential subsidy is 

13 to be paid, for operation by another person. 

14 ‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter pro15 hibited by this section is made, the person operating the chartered vessel 

16 is subject to all the provisions of this subtitle and the operating-differential 

17 subsidy program, including limitations of profits and salaries. 

18 ‘‘§ 58104. Willful violation constitutes breach of contract or 

19 charter 

20 ‘‘A willful violation of any provision of sections 58101–58103 of this title 

21 constitutes a breach of the contract or charter. On determining that a viola22 tion has occurred, the Secretary of Transportation may declare the contract 

23 or charter rescinded. 

24 ‘‘§ 58105. Preferences for cargo in which charterer has inter25 est 

26 ‘‘A contractor receiving an operating-differential subsidy, or a charterer 

27 under chapter 575 of this title, may not unjustly discriminate in any man28 ner so as to give preference, directly or indirectly, to cargo in which the con29 tractor or charterer has a direct or indirect ownership, purchase, or vending 

30 interest. 

31 ‘‘§ 58106. Concerted discriminatory activities 

32 ‘‘(a) PROHIBITION.—A contractor receiving an operating-differential sub33 sidy, or a charterer under chapter 575 of this title, may not continue as 

34 a party to or conform to an agreement with another carrier by water, or 

35 engage in a practice in concert with another carrier by water, that is un36 justly discriminatory or unfair to any other citizen of the United States op37 erating a common carrier by water employing only vessels documented 

38 under the laws of the United States on an established trade route from and 

39 to a United States port. 

40 ‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or subsidy of 

41 any kind may be paid, directly or indirectly, out of funds of the United
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1 States Government to a contractor or charterer that has violated subsection 

2 (a). 

3 ‘‘(c) CIVIL ACTION.—A person whose business or property is injured by 

4 a violation of subsection (a) may bring a civil action in the district court 

5 of the United States for the district in which the defendant resides, is 

6 found, or has an agent. If the person prevails, the person shall be award7 ed—

8 ‘‘(1) 3 times the damages; and 

9 ‘‘(2) costs, including reasonable attorney fees. 

10 ‘‘§ 58107. Discrimination at ports by water common carriers 

11 ‘‘(a) PROHIBITION.—A common carrier by water may not, directly or in12 directly, through an agreement, conference, association, understanding, or 

13 otherwise, prevent or attempt to prevent any other common carrier by water 

14 from serving any port described in subsection (b) at the same rates the first 

15 carrier charges at the nearest port already regularly served by it. 

16 ‘‘(b) PORTS.—A port referred to in subsection (a) is one that is—

17 ‘‘(1) designed for the accommodation of ocean-going vessels; 

18 ‘‘(2) located on an improvement project authorized by law or by a 

19 Federal agency; and 

20 ‘‘(3) located within the continental limits of the United States. 

21 ‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not limit the 

22 authority otherwise vested in the Secretary of Transportation and the Fed23 eral Maritime Commission. 

24 ‘‘§ 58108. Charges for transportation subject to subtitle IV of 

25 title 49

26 ‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive for 

27 transportation subject to subtitle IV of title 49 of persons or property, 

28 under any joint rate, fare, or charge, or under any export, import, or other 

29 proportional rate, fare, or charge, that is based in whole or in part on the 

30 fact that the persons or property affected are to be transported to, or have 

31 been transported from, a port in a territory or possession of the United 

32 States or in a foreign country, by a carrier by water in foreign commerce, 

33 any lower rate, fare, or charge than the carrier charges, collects, or receives 

34 for the transportation of persons or similar property for the same distance, 

35 in the same direction, and over the same route, in commerce wholly within 

36 the United States, unless the vessel used for the transportation is or was 

37 at the time of the transportation documented under the laws of the United 

38 States. 

39 ‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of Trans40 portation believes that adequate shipping facilities to or from any port in 

41 a territory or possession of the United States or a foreign country are not 
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1 being provided by vessels documented under the laws of the United States, 

2 the Secretary shall certify this fact to the Surface Transportation Board. 

3 On receiving the certification, the Board may by order suspend the oper4 ation of subsection (a) with respect to the rates, fares, and charges for the 

5 transportation by rail of persons and property transported from or to be 

6 transported to those ports, for such time and under such terms and condi7 tions as the Secretary may specify in the order or in any supplemental 

8 order. 

9 ‘‘(c) TERMINATION OF SUSPENSION.—Whenever the Secretary believes 

10 that adequate shipping facilities are being provided to those ports by vessels 

11 documented under the laws of the United States, and certifies that fact to 

12 the Board, the Board may order the termination of the suspension. 

13 ‘‘§ 58109. Penalties 

14 ‘‘(a) INDIVIDUALS.—An individual convicted of violating section 

15 58101(d), 58103, or 58105 of this title shall be fined under title 18, impris16 oned for at least one year but not more than 5 years, or both. 

17 ‘‘(b) ORGANIZATIONS.—An organization convicted of committing an act 

18 prohibited by this subtitle shall be fined under title 18. 

19 ‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or organiza20 tion convicted of violating a section referred to in subsection (a) is ineligible, 

21 at the discretion of the Secretary of Transportation, to receive any benefit 

22 under the construction-differential subsidy or operating-differential subsidy 

23 programs, or a charter under chapter 575 of this title, for 5 years after 

24 the conviction.’’.

25 SEC. 8. SUBTITLE VI OF TITLE 46. 

26 (a) REDESIGNATION.—Title 46, United States Code, is amended by re27 designating subtitle VI as subtitle VII. 

28 (b) NEW SUBTITLE.—Title 46, United States Code, is amended by insert29 ing after subtitle V the following: 

30 ‘‘Subtitle VI—Clearance, Tonnage Taxes, and 

31 Duties

‘‘Chapter Sec. 

‘‘601. Arrival and Departure Requirements ............................................... 60101

‘‘603. Tonnage Taxes and Light Money ........................................................ 60301

‘‘605. Discriminating Duties and Reciprocal Privileges ........................ 60501

32 ‘‘CHAPTER 601—ARRIVAL AND DEPARTURE 

33 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. 
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‘‘60108. Duty to transport tendered cargo. 

‘‘60109. Duty to transport money and securities of the United States Government. 

1 ‘‘§ 60101. Boarding arriving vessels before inspection 

2 ‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall prescribe 

3 and enforce regulations on the boarding of a vessel arriving at a port of 

4 the United States before the vessel has been inspected and secured. 

5 ‘‘(b) CRIMINAL PENALTY.—A person violating a regulation prescribed 

6 under this section shall be fined under title 18, imprisoned for not more 

7 than 6 months, or both. 

8 ‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be construed as 

9 supplementary to section 2279 of title 18. 

10 ‘‘§ 60102. Production of certificate on entry 

11 ‘‘On entry of a vessel documented under chapter 121 of this title, the 

12 master or other individual in charge of the vessel shall produce the certifi13 cate of documentation to the customs officer at the place where the vessel 

14 is entered. If the certificate is not produced, the vessel is not entitled to 

15 the privileges of a documented vessel. 

16 ‘‘§ 60103. Oath of ownership on entry 

17 ‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United States 

18 from a foreign port, the individual designated under subsection (b) shall 

19 state under oath that—

20 ‘‘(1) the vessel’s certificate of documentation contains the names of 

21 all the owners of the vessel; or 

22 ‘‘(2) part of the ownership has been transferred since the certificate 

23 was issued and, to the best of the individual’s knowledge and belief, 

24 the vessel is still owned only by citizens of the United States. 

25 ‘‘(b) PERSON TO MAKE STATEMENT.—The statement under subsection 

26 (a) shall be made by—

27 ‘‘(1) an owner if one resides at the port of entry; or 

28 ‘‘(2) the master if an owner does not reside at the port of entry. 

29 ‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appropriate 

30 individual does not make the statement required by this section, the vessel 

31 is not entitled to the privileges of a vessel of the United States. 

32 ‘‘§ 60104. Depositing certificates of documentation with con33 sular officers 

34 ‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citizens of the 

35 United States, on a voyage from a port in the United States, arrives at a 

36 foreign port, the master of the vessel shall deposit the vessel’s certificate 

37 of documentation with a consular officer at the foreign port if there is a 

38 consular officer at that port.

39 ‘‘(b) RETURN OF CERTIFICATE.—When the master produces a clearance 

40 from the appropriate officer of the foreign port, the consular officer shall 
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1 return the certificate of documentation to the master if the master has com2 plied with the provisions of law related to the discharge of seamen in a for3 eign country and the payment of fees of consular officers. 

4 ‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel failing 

5 to deposit the certificate of documentation as required by subsection (a) is 

6 liable to the United States Government for a civil penalty of $500. The con7 sular officer shall bring an action to recover the penalty in any court of 

8 competent jurisdiction. The action shall be brought in the name of the con9 sular officer for the benefit of the Government. 

10 ‘‘§ 60105. Clearance of vessels 

11 ‘‘(a) VESSELS OF THE UNITED STATES.—Except as otherwise provided 

12 by law, a vessel of the United States shall obtain clearance from the Sec13 retary of Homeland Security before proceeding from a port or place in the 

14 United States—

15 ‘‘(1) for a foreign port or place; 

16 ‘‘(2) for another port or place in the United States if the vessel has 

17 on board foreign merchandise for which entry has not been made; or 

18 ‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 

19 merchandise while outside the territorial sea. 

20 ‘‘(b) OTHER VESSELS.—Except as otherwise provided by law, a vessel 

21 that is not a vessel of the United States shall obtain clearance from the Sec22 retary before proceeding from a port or place in the United States—

23 ‘‘(1) for a foreign port or place; 

24 ‘‘(2) for another port or place in the United States; or 

25 ‘‘(3) outside the territorial sea to visit a hovering vessel or to receive 

26 or deliver merchandise while outside the territorial sea. 

27 ‘‘(c) REGULATIONS.—The Secretary may by regulation—

28 ‘‘(1) prescribe the manner in which clearance under this section is 

29 to be obtained, including the documents, data, or information which 

30 shall be submitted or transmitted, pursuant to an authorized data 

31 interchange system, to obtain the clearance; 

32 ‘‘(2) permit clearance to be obtained before all requirements for 

33 clearance are complied with, but only if the owner or operator of the 

34 vessel files a bond in an amount set by the Secretary conditioned on 

35 the compliance by the owner or operator with all specified requirements 

36 for clearance within a time period (not exceeding 4 business days) es37 tablished by the Secretary; and 

38 ‘‘(3) permit clearance to be obtained at a place other than a des39 ignated port of entry, under conditions the Secretary may prescribe. 
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1 ‘‘§ 60106. State inspection laws 

2 ‘‘When State law requires a certificate of inspection for goods carried on 

3 a vessel, a vessel transporting the goods may not be cleared until the certifi4 cate is produced. 

5 ‘‘§ 60107. Payment of fees on departing vessel 

6 ‘‘A departing vessel may be cleared only when all legal fees that have ac7 crued on the vessel are paid and proof of payment is presented to the indi8 vidual granting the clearance. 

9 ‘‘§ 60108. Duty to transport tendered cargo 

10 ‘‘Clearance may be refused to a vessel or vehicle transporting cargo des11 tined for a domestic or foreign port when the owner, master, or other indi12 vidual in charge refuses to accept cargo tendered in good condition, with 

13 proper charges, for the same or an intermediate port by a citizen of the 

14 United States. This section does not apply if the vessel or vehicle is already 

15 fully loaded (giving appropriate consideration to its proper loading) or is not 

16 adaptable to transport the tendered cargo. 

17 ‘‘§ 60109. Duty to transport money and securities of the 

18 United States Government 

19 ‘‘Before being given clearance, a vessel owned by a citizen of the United 

20 States and bound on a voyage from a port in the United States to another 

21 port in the United States or in a foreign country, or on a voyage from a 

22 port in a foreign country to a port in the United States, shall receive on 

23 board any bullion, coin, notes, bonds, or other securities of the United 

24 States Government that an agency, consular officer, or other agent of the 

25 Government offers. The vessel shall transport the items securely and deliver 

26 them promptly to the proper authorities or consignees on arriving at the 

27 port of destination. Compensation shall be paid for services provided under 

28 this section that is equal to compensation paid to other carriers in the ordi29 nary transaction of business.

30 ‘‘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.
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1 ‘‘§ 60301. Regular tonnage taxes 

2 ‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents per ton (but 

3 not more than a total of 10 cents per ton per year) at each entry in a port 

4 of the United States of— 

5 ‘‘(1) a vessel entering from a foreign port or place in North America, 

6 Central America, the West Indies Islands, the Bahama Islands, the 

7 Bermuda Islands, or the coast of South America bordering the Carib8 bean Sea; or 

9 ‘‘(2) a vessel returning to the same port or place in the United 

10 States from which it departed, and not entering the United States from 

11 another port or place, except— 

12 ‘‘(A) a vessel of the United States; 

13 ‘‘(B) a recreational vessel (as defined in section 2101 of this 

14 title); or 

15 ‘‘(C) a barge. 

16 ‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents per ton 

17 (but not more than a total of 30 cents per ton per year) on a vessel at each 

18 entry in a port of the United States from a foreign port or place not named 

19 in subsection (a)(1). 

20 ‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—Sub21 section (a) does not apply to a vessel entering other than by sea from a 

22 foreign port or place at which tonnage, lighthouse, or other equivalent taxes 

23 are not imposed on vessels of the United States. 

24 ‘‘§ 60302. Special tonnage taxes 

25 ‘‘(a) ENTRY FROM FOREIGN PORT OR PLACE.—Regardless of whether a 

26 tax is imposed under section 60301 of this title, a tax is imposed on a vessel 

27 at each entry in a port of the United States from a foreign port or place 

28 at the following rates: 

29 ‘‘(1) 30 cents per ton on a vessel built in the United States but 

30 owned in any part by a subject of a foreign country. 

31 ‘‘(2) 50 cents per ton on other vessels not of the United States. 

32 ‘‘(3) 50 cents per ton on a vessel of the United States having an 

33 officer who is not a citizen of the United States. 

34 ‘‘(4) $2 per ton on a foreign vessel entering from a foreign port or 

35 place at which vessels of the United States are not ordinarily allowed 

36 to enter and trade. 

37 ‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROPERTY

38 BETWEEN DISTRICTS.—Regardless of whether a tax is imposed under sec39 tion 60301 of this title, a tax of 50 cents per ton is imposed on a vessel 

40 not of the United States at each entry in one customs district from another 
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1 district when transporting goods loaded in one district to be delivered in an2 other district. 

3 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—The tax of 50 

4 cents per ton under this section does not apply to a vessel that—

5 ‘‘(1) is owned only by citizens of the United States; and 

6 ‘‘(2) after entering a port of the United States, becomes documented 

7 as a vessel of the United States before leaving that port. 

8 ‘‘§ 60303. Light money 

9 ‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be called ‘light 

10 money’, is imposed on a vessel not of the United States at each entry in 

11 a port of the United States. This tax shall be imposed and collected under 

12 the same regulations that apply to tonnage taxes. 

13 ‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.—

14 ‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel owned 

15 only by citizens of the United States if—

16 ‘‘(A) the vessel is carrying a regular document issued by a cus17 tomhouse of the United States proving the vessel to be owned only 

18 by citizens of the United States; and 

19 ‘‘(B) on entry of the vessel from a foreign port, the individual 

20 designated under paragraph (2) states under oath that—

21 ‘‘(i) the document contains the names of all the owners of 

22 the vessel; or 

23 ‘‘(ii) part of the ownership has been transferred since the 

24 document was issued and, to the best of that individual’s 

25 knowledge and belief, the vessel is still owned only by citizens 

26 of the United States. 

27 ‘‘(2) PERSON TO MAKE STATEMENT.—The statement under para28 graph (1)(B) shall be made by—

29 ‘‘(A) an owner if one resides at the port of entry; or 

30 ‘‘(B) the master if an owner does not reside at the port of 

31 entry. 

32 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection 

33 (a) section does not apply to a vessel that—

34 ‘‘(1) is owned only by citizens of the United States; and 

35 ‘‘(2) after entering a port of the United States, becomes documented 

36 as a vessel of the United States before leaving that port. 

37 ‘‘§ 60304. Presidential suspension of tonnage taxes and light 

38 money 

39 ‘‘If the President is satisfied that the government of a foreign country 

40 does not impose discriminating or countervailing duties to the disadvantage 

41 of the United States, the President shall suspend the imposition of special 
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1 tonnage taxes and light money under sections 60302 and 60303 of this title 

2 on vessels of that country. 

3 ‘‘§ 60305. Vessels in distress 

4 ‘‘A vessel is exempt from tonnage taxes and light money when it enters 

5 because it is in distress. 

6 ‘‘§ 60306. Vessels not engaged in trade 

7 ‘‘A vessel is exempt from tonnage taxes and light money when not en8 gaged in trade. 

9 ‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries 

10 ‘‘A vessel with a registry endorsement or a coastwise endorsement, trad11 ing from one port in the United States to another port in the United States 

12 or employed in the bank, whale, or other fisheries, is exempt from tonnage 

13 taxes and light money. 

14 ‘‘§ 60308. Vessels engaged in Great Lakes trade 

15 ‘‘A documented vessel with a registry endorsement, engaged in foreign 

16 trade on the Great Lakes or their tributary or connecting waters in trade 

17 with Canada, does not become subject to tonnage taxes or light money be18 cause of that trade. 

19 ‘‘§ 60309. Passenger vessels making trips between ports of 

20 the United States and foreign ports 

21 ‘‘A passenger vessel making at least 3 trips per week between a port of 

22 the United States and a foreign port is exempt from tonnage taxes and light 

23 money. 

24 ‘‘§ 60310. Vessels making daily trips on interior waters 

25 ‘‘A vessel making regular daily trips between a port of the United States 

26 and a port of Canada only on interior waters not navigable to the ocean 

27 is exempt from tonnage taxes and light money, except on its first clearing 

28 each year. 

29 ‘‘§ 60311. Hospital vessels in time of war 

30 ‘‘In time of war, a hospital vessel is exempt from tonnage taxes, light 

31 money, and pilotage charges in the ports of the United States if the vessel 

32 is one for which the conditions of the international convention for the ex33 emption of hospital ships from taxation in time of war, concluded at The 

34 Hague on December 21, 1904, are satisfied. The President by proclamation 

35 shall name the vessels for which the conditions are satisfied and state when 

36 the exemption begins and ends. 

37 ‘‘§ 60312. Rights under treaties preserved 

38 ‘‘This chapter and chapter 605 of this title do not affect a right or privi39 lege of a foreign country relating to tonnage taxes or other duties on vessels 

40 under a law or treaty of the United States.
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1 ‘‘CHAPTER 605—DISCRIMINATING DUTIES AND 

2 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.

3 ‘‘§ 60501. Vessels allowed to import 

4 ‘‘(a) IN GENERAL.—Except as otherwise provided by treaty, goods may 

5 be imported into the United States from a foreign port or place only in—

6 ‘‘(1) a vessel of the United States; or 

7 ‘‘(2) a foreign vessel owned only by citizens or subjects of the coun8 try—

9 ‘‘(A) in which the goods are grown, produced, or manufactured; 

10 or 

11 ‘‘(B) from which the goods can only be, or most usually are, 

12 first shipped for transportation. 

13 ‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING SIMI14 LAR RESTRICTIONS.—Subsection (a) does not apply to a vessel of a foreign 

15 country that does not maintain a similar restriction against United States 

16 documented vessels. 

17 ‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Subsection 

18 (a) does not apply to a vessel that—

19 ‘‘(1) is owned only by citizens of the United States; and 

20 ‘‘(2) after entering a port of the United States, becomes documented 

21 as a vessel of the United States before leaving that port. 

22 ‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in violation of 

23 this section, the goods and the vessel in which they are imported, along with 

24 its equipment and other cargo, may be seized by and forfeited to the United 

25 States Government. 

26 ‘‘§ 60502. Discriminating duty on goods imported in foreign 

27 vessels or from contiguous countries 

28 ‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent ad valo29 rem (in addition to other duties imposed by law) is imposed on goods—

30 ‘‘(1) imported in a vessel not of the United States unless the ves31 sel—

32 ‘‘(A) is entitled by law or treaty to enter the ports of the United 

33 States on payment of the same duties as are payable on goods im34 ported in a vessel of the United States; or 

35 ‘‘(B)(i) is owned only by citizens of the United States; and
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1 ‘‘(ii) after entering a port of the United States, becomes docu2 mented as a vessel of the United States before leaving that port; 

3 or 

4 ‘‘(2) produced or manufactured in a foreign country not contiguous 

5 to the United States and imported from a country contiguous to the 

6 United States, unless imported in the usual course of strictly retail 

7 trade. 

8 ‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without pay9 ment of the duty required by this section, the goods and the vessel in which 

10 they are imported may be seized by, and forfeited to, the United States Gov11 ernment. 

12 ‘‘§ 60503. Reciprocal suspension of discriminating duties 

13 ‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from the 

14 government of a foreign country that it has suspended, in any part, the im15 position of discriminating duties for any class of vessels owned by citizens 

16 of the United States or goods imported in those vessels, the President may 

17 proclaim a reciprocal suspension of discriminating duties for the same class 

18 of vessels owned by citizens of that country or goods imported in those ves19 sels. 

20 ‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under this sec21 tion takes effect retroactively from the date the President received the proof 

22 from the foreign government, and expires when that government stops 

23 granting the reciprocal suspension. 

24 ‘‘§ 60504. Reciprocal privileges for recreational vessels 

25 ‘‘When the President is satisfied that yachts owned by residents of the 

26 United States and used only for pleasure are allowed to arrive at, depart 

27 from, and cruise in the waters of a foreign port without entering, clearing, 

28 or paying any duties or fees (including cruising license fees), the Secretary 

29 of Homeland Security may allow yachts from that foreign port used only 

30 for pleasure to arrive at and depart from the ports of the United States 

31 and to cruise in the waters of the United States without paying any duties 

32 or fees. However, the Secretary may require foreign yachts to obtain a li33 cense to cruise in the waters of the United States. The license shall be in 

34 the form prescribed by the Secretary and contain limitations about length 

35 of time, direction, place of cruising and action, and other matters the Sec36 retary considers appropriate. The license shall be issued without cost to the 

37 yacht. 

38 ‘‘§ 60505. Retaliatory suspension of commercial privileges 

39 ‘‘(a) GENERAL AUTHORITY.—The President may proclaim a suspension 

40 of commercial privileges to vessels of a foreign country when—
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1 ‘‘(1) vessels of that country have been given the same commercial 

2 privileges in the ports and waters of the United States given to vessels 

3 of the United States (except the privilege of engaging in coastwise com4 merce); and 

5 ‘‘(2) vessels of the United States are denied commercial privileges in 

6 the ports or waters of that country given to vessels of that country. 

7 ‘‘(b) APPLICATION.—A suspension under this section shall apply to the 

8 same commercial privileges denied to vessels of the United States in the 

9 ports or waters of the foreign country, and to the same class of vessels of 

10 that country as the class of vessels of the United States denied the privi11 leges. 

12 ‘‘(c) EFFECTIVE DATE.—The President shall designate the effective date 

13 of the suspension in the proclamation. 

14 ‘‘(d) PENALTIES.—

15 ‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or agent of 

16 a vessel of a foreign country does an act for the vessel in the ports 

17 or waters of the United States in violation of a proclamation issued 

18 under this section, the vessel and the goods on the vessel may be seized 

19 by, and forfeited to, the United States Government. 

20 ‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official of the 

21 Government enforcing this section shall be fined under title 18, impris22 oned for not more than 2 years, or both. 

23 ‘‘§ 60506. Retaliation against British dominions of North 

24 America 

25 ‘‘(a) GENERAL AUTHORITY.—The President by proclamation may pro26 hibit vessels of the British dominions of North America, their masters and 

27 crews, and products of or coming from those dominions, from entering wa28 ters, ports, or places of the United States when the President is satisfied 

29 that—

30 ‘‘(1) fishermen or fishing vessels of the United States in waters, 

31 ports, or places of the British dominions of North America are being 

32 or recently have been—

33 ‘‘(A) denied rights provided by law or treaty; 

34 ‘‘(B) subjected to unreasonable restrictions in the exercise of 

35 those rights; or 

36 ‘‘(C) otherwise harassed; 

37 ‘‘(2) fishermen or fishing vessels of the United States, having a per38 mit under the laws of the United States to dock or trade at a port 

39 or place in the British dominions of North America, are being or re40 cently have been—
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1 ‘‘(A) denied the privilege of entering the port or place in the 

2 same manner and under the same regulations applicable to trading 

3 vessels of the most-favored-nation; 

4 ‘‘(B) prevented from buying supplies allowed to be sold to trad5 ing vessels of the most-favored-nation; or 

6 ‘‘(C) otherwise harassed; or 

7 ‘‘(3) other vessels of the United States or their masters or crews in 

8 waters, ports, or places of the British dominions of North America are 

9 being or recently have been—

10 ‘‘(A) denied privileges given to vessels of the most-favored-na11 tion or their masters or crews; or 

12 ‘‘(B) otherwise harassed. 

13 ‘‘(b) COVERAGE AND EXCEPTIONS.—The President may apply a procla14 mation under this section to any of the subjects named, and may include 

15 exceptions for vessels in distress or need of supplies. The President may 

16 change, revoke, and renew the proclamation. 

17 ‘‘(c) PENALTIES.—A person violating a proclamation issued under this 

18 section shall be fined under title 18, imprisoned for not more than 2 years, 

19 or both. A vessel or goods found in waters, ports, or places of the United 

20 States in violation of the proclamation may be seized by, and forfeited to, 

21 the United States Government. 

22 ‘‘§ 60507. Suspension of free passage through Saint Marys 

23 Falls Canal 

24 ‘‘(a) PURPOSE.—The purpose of this section is to secure reciprocal ad25 vantages for the citizens, ports, and vessels of the United States. 

26 ‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that vessels 

27 of the United States, or passengers or cargo being transported to a port 

28 of the United States, are prohibited from passing through a canal or lock 

29 connected with the navigation of the Saint Lawrence River, the Great 

30 Lakes, or their connecting waterways, or burdened in that passage by tolls 

31 or other means that are unreasonable in view of the free passage through 

32 the Saint Marys Falls Canal allowed to vessels of all countries, the Presi33 dent by proclamation may suspend the right of free passage through the 

34 Saint Marys Falls Canal for vessels owned by subjects of the country impos35 ing the prohibition, tolls, or other burdens and for passengers and cargo 

36 being transported to the ports of that country, even when carried in vessels 

37 of the United States. The suspension shall apply to the extent and for the 

38 time the President considers appropriate. 

39 ‘‘(c) IMPOSITION OF TOLL.—
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1 ‘‘(1) IN GENERAL.—During a suspension under this section, the 

2 President shall impose a toll of not more than $2 per ton on cargo and 

3 not more than $5 on each passenger. 

4 ‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll may not 

5 be imposed on passengers or cargo landed at Ogdensburg, New York, 

6 or any port west of Ogdensburg and south of a line drawn from the 

7 northern boundary of New York through the Saint Lawrence River, the 

8 Great Lakes, and their connecting channels to the northern boundary 

9 of Minnesota. 

10 ‘‘(d) COLLECTION OF TOLL.—

11 ‘‘(1) IN GENERAL.—A toll imposed under this section shall be col12 lected under regulations prescribed by the Secretary of Homeland Secu13 rity. The Secretary may require the master of a vessel to provide a 

14 sworn statement of the amount and kind of cargo, the number of pas15 sengers, and the destination of the passengers and cargo. 

16 ‘‘(2) PROOF OF LANDING.—When applicable, the Secretary also may 

17 require satisfactory proof that the passengers and cargo were landed 

18 at a port described in subsection (c)(2). Until that proof is provided, 

19 the Secretary may assume the passengers and cargo were not landed 

20 at such a port, and the amount of a toll that otherwise would be im21 posed is a lien enforceable against the vessel when found in the waters 

22 of the United States.’’.

23 SEC. 9. SUBTITLE VII OF TITLE 46. 

24 Subtitle VII of title 46, United States Code, as redesignated by section 

25 8(a) of this Act, is amended as follows: 

26 (1) The subtitle heading and analysis are amended to read as fol27 lows: 

28 ‘‘Subtitle VII—Security and Drug Enforcement

‘‘Chapter Sec. 

‘‘701. Port Security ............................................................................................... 70101

‘‘703. Maritime Security ..................................................................................... 70301

‘‘705. Maritime Drug Law Enforcement ...................................................... 70501’’.

29 (2) Add after chapter 701 the following:

30 ‘‘CHAPTER 703—MARITIME SECURITY

‘‘Sec. 

‘‘70301. Definitions. 

‘‘70302. International measures for seaport and vessel security. 

‘‘70303. Security standards at foreign ports. 

‘‘70304. Travel advisories on security at foreign ports. 

‘‘70305. Suspension of passenger services. 

‘‘70306. Report on terrorist threats.

31 ‘‘§ 70301. Definitions 

32 ‘‘In this chapter: 

33 ‘‘(1) COMMON CARRIER.—The term ‘common carrier’ has the mean34 ing given that term in section 40102 of this title. 
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1 ‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ has the 

2 meaning given that term in section 2101 of this title. 

3 ‘‘§ 70302. International measures for seaport and vessel se4 curity 

5 ‘‘Congress encourages the President to continue to seek agreement on 

6 international seaport and vessel security through the International Maritime 

7 Organization. In developing an agreement, each member country of the 

8 International Maritime Organization should consult with appropriate private 

9 sector interests in that country. The agreement would establish seaport and 

10 vessel security measures and could include—

11 ‘‘(1) seaport screening of cargo and baggage similar to that done at 

12 airports; 

13 ‘‘(2) security measures to restrict access to cargo, vessels, and dock14 side property to authorized personnel only; 

15 ‘‘(3) additional security on board vessels; 

16 ‘‘(4) licensing or certification of compliance with appropriate security 

17 standards; and 

18 ‘‘(5) other appropriate measures to prevent unlawful acts against 

19 passengers and crews on vessels. 

20 ‘‘§ 70303. Security standards at foreign ports 

21 ‘‘(a) DEFINITION.—In this section, except when referring to the Secretary 

22 of State, the term ‘Secretary’ means the Secretary of the department in 

23 which the Coast Guard is operating. 

24 ‘‘(b) GENERAL REQUIREMENTS.—The Secretary shall develop and imple25 ment a plan to assess the effectiveness of the security measures maintained 

26 at foreign ports that the Secretary, in consultation with the Secretary of 

27 State, determines pose a high risk of acts of terrorism against passenger 

28 vessels. In carrying out this subsection, the Secretary shall consult with the 

29 Secretary of State about the terrorist threat that exists in each country and 

30 poses a high risk of acts of terrorism against passenger vessels. 

31 ‘‘(c) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—If the 

32 Secretary, after implementing the plan under subsection (b), determines 

33 that a port does not maintain and administer effective security measures, 

34 the Secretary of State (after being informed by the Secretary) shall—

35 ‘‘(1) notify the appropriate government authorities of the country in 

36 which the port is located of the determination; and 

37 ‘‘(2) recommend steps necessary to bring the security measures at 

38 that port up to the standard used by the Secretary in making the as39 sessment under subsection (b). 

40 ‘‘(d) ANTITERRORISM ASSISTANCE.—The President is encouraged to pro41 vide antiterrorism assistance related to maritime security under chapter 8 
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1 of part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2349aa et seq.) 

2 to foreign countries, especially for a port that the Secretary determines 

3 under subsection (c) does not maintain and administer effective security 

4 measures. 

5 ‘‘§ 70304. Travel advisories on security at foreign ports 

6 ‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Secretary of 

7 Transportation that the Secretary has determined that a condition exists 

8 that threatens the safety or security of passengers, passenger vessels, or 

9 crew traveling to or from a foreign port that the Secretary has determined 

10 under section 70303(c) of this title does not maintain and administer effec11 tive security measures, the Secretary of State immediately shall issue a trav12 el advisory for that port. The Secretary of State shall take the necessary 

13 steps to widely publicize the travel advisory. 

14 ‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under subsection (a) 

15 may be lifted only if the Secretary of Transportation, in consultation with 

16 the Secretary of State, has determined that effective security measures are 

17 maintained and administered at the port. 

18 ‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify Con19 gress immediately of any change in the status of a travel advisory issued 

20 under this section. 

21 ‘‘§ 70305. Suspension of passenger services 

22 ‘‘(a) GENERAL AUTHORITY.—Whenever the President determines that a 

23 foreign nation permits the use of territory under its jurisdiction as a base 

24 of operations or training for, or as a sanctuary for, or in any way arms, 

25 aids, or abets, a terrorist or terrorist group that knowingly uses the illegal 

26 seizure of passenger vessels or the threat thereof as an instrument of policy, 

27 the President may suspend the right of any passenger vessel common car28 rier to operate to or from, and the right of any passenger vessel of the 

29 United States to use, a port in that foreign nation for passenger service. 

30 The suspension may be without notice or hearing and for as long as the 

31 President determines is necessary to ensure the security of passenger vessels 

32 against unlawful seizure. 

33 ‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a passenger 

34 vessel of the United States, may not operate in violation of a suspension 

35 under this section. 

36 ‘‘(c) PENALTIES.—

37 ‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in violation 

38 of this section, the Secretary of the department in which the Coast

39 Guard is operating may deny the vessels of that person entry to ports 

40 of the United States. 
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1 ‘‘(2) CIVIL PENALTY.—A person violating this section is liable to the 

2 United States Government for a civil penalty of not more than 

3 $50,000. Each day a vessel uses a prohibited port is a separate viola4 tion. 

5 ‘‘§ 70306. Report on terrorist threats 

6 ‘‘(a) CONTENT.—Not later than February 28 of each year, the Secretary 

7 of Transportation shall submit a report to Congress on the threat from acts 

8 of terrorism to United States ports and vessels operating from those ports. 

9 The Secretary shall include a description of activities undertaken under title 

10 I of the Maritime Transportation Security Act of 2002 (Public Law 107–

11 295, 116 Stat. 2066) and an analysis of the effect of those activities on 

12 port security against acts of terrorism. 

13 ‘‘(b) SUBMISSION.—The report shall be submitted to the Committee on 

14 International Relations and the Committee on Transportation and Infra15 structure of the House of Representatives and the Committee on Foreign 

16 Relations and the Committee on Commerce, Science, and Transportation of 

17 the Senate. Any classified information in the report shall be submitted sepa18 rately as an addendum.

19 ‘‘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. 

20 ‘‘§ 70501. Findings and declarations 

21 ‘‘Congress finds and declares that trafficking in controlled substances 

22 aboard vessels is a serious international problem, is universally condemned, 

23 and presents a specific threat to the security and societal well-being of the 

24 United States. 

25 ‘‘§ 70502. Definitions 

26 ‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in section 

27 102 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 

28 (21 U.S.C. 802) apply to this chapter. 

29 ‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term ‘vessel 

30 of the United States’ means—

31 ‘‘(1) a vessel documented under chapter 121 of this title or num32 bered as provided in chapter 123 of this title; 

33 ‘‘(2) a vessel owned in any part by an individual who is a citizen 

34 of the United States, the United States Government, the government 

35 of a State or political subdivision of a State, or a corporation incor36 porated under the laws of the United States or of a State, unless—
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1 ‘‘(A) the vessel has been granted the nationality of a foreign na2 tion under article 5 of the 1958 Convention on the High Seas; and 

3 ‘‘(B) a claim of nationality or registry for the vessel is made 

4 by the master or individual in charge at the time of the enforce5 ment action by an officer or employee of the United States who 

6 is authorized to enforce applicable provisions of United States law; 

7 and 

8 ‘‘(3) a vessel that was once documented under the laws of the United 

9 States and, in violation of the laws of the United States, was sold to 

10 a person not a citizen of the United States or placed under foreign reg11 istry or a foreign flag, whether or not the vessel has been granted the 

12 nationality of a foreign nation. 

13 ‘‘(c) VESSEL SUBJECT TO THE JURISDICTION OF THE UNITED

14 STATES.—

15 ‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject to the 

16 jurisdiction of the United States’ includes—

17 ‘‘(A) a vessel without nationality; 

18 ‘‘(B) a vessel assimilated to a vessel without nationality under 

19 paragraph (2) of article 6 of the 1958 Convention on the High 

20 Seas; 

21 ‘‘(C) a vessel registered in a foreign nation if the flag nation 

22 has consented or waived objection to the enforcement of United 

23 States law by the United States; 

24 ‘‘(D) a vessel in the customs waters of the United States; 

25 ‘‘(E) a vessel in the territorial waters of a foreign nation if the 

26 nation consents to the enforcement of United States law by the 

27 United States; and 

28 ‘‘(F) a vessel in the contiguous zone of the United States, as 

29 defined in Presidential Proclamation 7219 of September 2, 1999 

30 (43 U.S.C. 1331 note), that—

31 ‘‘(i) is entering the United States; 

32 ‘‘(ii) has departed the United States; or 

33 ‘‘(iii) is a hovering vessel as defined in section 401 of the 

34 Tariff Act of 1930 (19 U.S.C. 1401). 

35 ‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver of ob36 jection by a foreign nation to the enforcement of United States law by 

37 the United States under paragraph (1)(C) or (E)—

38 ‘‘(A) may be obtained by radio, telephone, or similar oral or 

39 electronic means; and 

40 ‘‘(B) is proved conclusively by certification of the Secretary of 

41 State or the Secretary’s designee. 
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1 ‘‘(d) VESSEL WITHOUT NATIONALITY.—

2 ‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without nation3 ality’ includes—

4 ‘‘(A) a vessel aboard which the master or individual in charge 

5 makes a claim of registry that is denied by the flag nation whose 

6 registry is claimed; 

7 ‘‘(B) a vessel aboard which the master or individual in charge 

8 fails, on request of an officer of the United States authorized to 

9 enforce applicable provisions of United States law, to make a claim 

10 of nationality or registry for that vessel; and 

11 ‘‘(C) a vessel aboard which the master or individual in charge 

12 makes a claim of registry and for which the claimed nation of reg13 istry does not affirmatively and unequivocally assert that the ves14 sel is of its nationality. 

15 ‘‘(2) CLAIM OF REGISTRY.—A claim of registry under paragraph 

16 (1)(A) or (C) may be verified or denied by radio, telephone, or similar 

17 oral or electronic means. The denial of such a claim by the claimed flag 

18 nation is proved conclusively by certification of the Secretary of State 

19 or the Secretary’s designee. 

20 ‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nationality or 

21 registry under this section includes only—

22 ‘‘(1) possession on board the vessel and production of documents evi23 dencing the vessel’s nationality as provided in article 5 of the 1958 

24 Convention on the High Seas; 

25 ‘‘(2) flying its flag nation’s ensign or flag; or 

26 ‘‘(3) a verbal claim of nationality or registry by the master or indi27 vidual in charge of the vessel. 

28 ‘‘§ 70503. Manufacture, distribution, or possession of con29 trolled substances on vessels 

30 ‘‘(a) PROHIBITIONS.—An individual may not knowingly or intentionally 

31 manufacture or distribute, or possess with intent to manufacture or dis32 tribute, a controlled substance on board—

33 ‘‘(1) a vessel of the United States or a vessel subject to the jurisdic34 tion of the United States; or 

35 ‘‘(2) any vessel if the individual is a citizen of the United States or 

36 a resident alien of the United States.

37 ‘‘(b) EXTENSION BEYOND TERRITORIAL JURISDICTION.—Subsection (a) 

38 applies even though the act is committed outside the territorial jurisdiction 

39 of the United States. 

40 ‘‘(c) NONAPPLICATION.—
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a) does 

2 not apply to—

3 ‘‘(A) a common or contract carrier or an employee of the carrier 

4 who possesses or distributes a controlled substance in the lawful 

5 and usual course of the carrier’s business; or 

6 ‘‘(B) a public vessel of the United States or an individual on 

7 board the vessel who possesses or distributes a controlled sub8 stance in the lawful course of the individual’s duties. 

9 ‘‘(2) ENTERED IN MANIFEST.—Paragraph (1) applies only if the 

10 controlled substance is part of the cargo entered in the vessel’s mani11 fest and is intended to be imported lawfully into the country of destina12 tion for scientific, medical, or other lawful purposes. 

13 ‘‘(d) BURDEN OF PROOF.—The United States Government is not re14 quired to negative a defense provided by subsection (c) in a complaint, in15 formation, indictment, or other pleading or in a trial or other proceeding. 

16 The burden of going forward with the evidence supporting the defense is 

17 on the person claiming its benefit. 

18 ‘‘§ 70504. Jurisdiction and venue 

19 ‘‘(a) JURISDICTION.—Jurisdiction of the United States with respect to a 

20 vessel subject to this chapter is not an element of an offense. Jurisdictional 

21 issues arising under this chapter are preliminary questions of law to be de22 termined solely by the trial judge. 

23 ‘‘(b) VENUE.—A person violating section 70503 of this title shall be tried 

24 in the district court of the United States for—

25 ‘‘(1) the district at which the person enters the United States; or 

26 ‘‘(2) the District of Columbia. 

27 ‘‘§ 70505. Failure to comply with international law as a de28 fense 

29 ‘‘A person charged with violating section 70503 of this title does not have 

30 standing to raise a claim of failure to comply with international law as a 

31 basis for a defense. A claim of failure to comply with international law in 

32 the enforcement of this chapter may be made only by a foreign nation. A 

33 failure to comply with international law does not divest a court of jurisdic34 tion and is not a defense to a proceeding under this chapter. 

35 ‘‘§ 70506. Penalties 

36 ‘‘(a) VIOLATIONS.—A person violating section 70503 of this title shall be 

37 punished as provided in section 1010 of the Comprehensive Drug Abuse 

38 Prevention and Control Act of 1970 (21 U.S.C. 960). However, if the of39 fense is a second or subsequent offense as provided in section 1012(b) of 

40 that Act (21 U.S.C. 962(b)), the person shall be punished as provided in 

41 section 1012 of that Act (21 U.S.C. 962). 
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1 ‘‘(b) ATTEMPTS AND CONSPIRACIES.—A person attempting or conspiring 

2 to violate section 70503 of this title is subject to the same penalties as pro3 vided for violating section 70503. 

4 ‘‘§ 70507. Forfeitures 

5 ‘‘(a) IN GENERAL.—Property described in section 511(a) of the Com6 prehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 

7 881(a)) that is used or intended for use to commit, or to facilitate the com8 mission of, an offense under section 70503 of this title may be seized and 

9 forfeited in the same manner that similar property may be seized and for10 feited under section 511 of that Act (21 U.S.C. 881). 

11 ‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly rec12 ognized as smuggling tactics may provide prima facie evidence of intent to 

13 use a vessel to commit, or to facilitate the commission of, an offense under 

14 section 70503 of this title, and may support seizure and forfeiture of the 

15 vessel, even in the absence of controlled substances aboard the vessel. The 

16 following indicia, among others, may be considered, in the totality of the 

17 circumstances, to be prima facie evidence that a vessel is intended to be 

18 used to commit, or to facilitate the commission of, such an offense: 

19 ‘‘(1) The construction or adaptation of the vessel in a manner that 

20 facilitates smuggling, including—

21 ‘‘(A) the configuration of the vessel to ride low in the water or 

22 present a low hull profile to avoid being detected visually or by 

23 radar; 

24 ‘‘(B) the presence of any compartment or equipment that is 

25 built or fitted out for smuggling, not including items such as a 

26 safe or lock-box reasonably used for the storage of personal 

27 valuables; 

28 ‘‘(C) the presence of an auxiliary tank not installed in accord29 ance with applicable law or installed in such a manner as to en30 hance the vessel’s smuggling capability; 

31 ‘‘(D) the presence of engines that are excessively over-powered 

32 in relation to the design and size of the vessel; 

33 ‘‘(E) the presence of materials used to reduce or alter the heat 

34 or radar signature of the vessel and avoid detection; 

35 ‘‘(F) the presence of a camouflaging paint scheme, or of mate36 rials used to camouflage the vessel, to avoid detection; or 

37 ‘‘(G) the display of false vessel registration numbers, false indi38 cia of vessel nationality, false vessel name, or false vessel home39 port. 

40 ‘‘(2) The presence or absence of equipment, personnel, or cargo in41 consistent with the type or declared purpose of the vessel. 
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1 ‘‘(3) The presence of excessive fuel, lube oil, food, water, or spare 

2 parts, inconsistent with legitimate vessel operation, inconsistent with 

3 the construction or equipment of the vessel, or inconsistent with the 

4 character of the vessel’s stated purpose. 

5 ‘‘(4) The operation of the vessel without lights during times lights 

6 are required to be displayed under applicable law or regulation and in 

7 a manner of navigation consistent with smuggling tactics used to avoid 

8 detection by law enforcement authorities. 

9 ‘‘(5) The failure of the vessel to stop or respond or heave to when 

10 hailed by government authority, especially where the vessel conducts 

11 evasive maneuvering when hailed. 

12 ‘‘(6) The declaration to government authority of apparently false in13 formation about the vessel, crew, or voyage or the failure to identify 

14 the vessel by name or country of registration when requested to do so 

15 by government authority. 

16 ‘‘(7) The presence of controlled substance residue on the vessel, on 

17 an item aboard the vessel, or on an individual aboard the vessel, of a 

18 quantity or other nature that reasonably indicates manufacturing or 

19 distribution activity. 

20 ‘‘(8) The use of petroleum products or other substances on the vessel 

21 to foil the detection of controlled substance residue. 

22 ‘‘(9) The presence of a controlled substance in the water in the vicin23 ity of the vessel, where given the currents, weather conditions, and 

24 course and speed of the vessel, the quantity or other nature is such 

25 that it reasonably indicates manufacturing or distribution activity.’’.

26 SEC. 10. SUBTITLE VIII OF TITLE 46. 

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

28 following: 

29 ‘‘Subtitle VIII—Miscellaneous

‘‘Chapter Sec. 

‘‘801. Wrecks and Salvage ................................................................................. 80101

‘‘803. Ice and Derelicts ....................................................................................... 80301

‘‘805. Safe Containers for International Cargo ......................................... 80501

30 ‘‘CHAPTER 801—WRECKS AND SALVAGE

‘‘Sec. 

‘‘80101. Vessel stranded on foreign coast. 

‘‘80102. License to salvage on Florida coast. 

‘‘80103. Property on Florida coast to be taken to port of entry.

‘‘80104. Salvaging operations by foreign vessels. 

‘‘80105. Canadian vessels aiding vessels in United States waters. 

‘‘80106. International agreement on derelicts. 

‘‘80107. Salvors of life to share in remuneration.

31 ‘‘§ 80101. Vessel stranded on foreign coast 

32 ‘‘(a) DUTIES OF CONSULAR OFFICER.—When a vessel of the United 

33 States is stranded on a coast of a foreign country, the consular officer in 
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1 that country shall take proper measures, to the extent the laws of that coun2 try allow, to—

3 ‘‘(1) save and secure the vessel and property on the vessel; and 

4 ‘‘(2) prepare an inventory of the property that is saved. 

5 ‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the consular 

6 officer shall deliver the property, with an inventory, to the owner of the 

7 property. 

8 ‘‘(c) LIMITATION ON TAKING POSSESSION.—A consular officer may not 

9 take possession of property under this section when the owner, master, or 

10 consignee is present or able to take possession of the property. 

11 ‘‘§ 80102. License to salvage on Florida coast 

12 ‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in the busi13 ness of salvaging on the coast of Florida, a vessel and its master each must 

14 have a license issued by a judge of the district court of the United States 

15 for a judicial district of Florida. 

16 ‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this section, 

17 the judge must be satisfied, when the license is for—

18 ‘‘(1) a vessel, that the vessel is seaworthy and properly equipped for 

19 the business of saving property shipwrecked and in distress; or 

20 ‘‘(2) a master, that the master is trustworthy and innocent of any 

21 fraud or misconduct related to property shipwrecked or saved on the 

22 coast. 

23 ‘‘§ 80103. Property on Florida coast to be taken to port of 

24 entry 

25 ‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or a key or 

26 shoal, on the coast of Florida and within the jurisdiction of the United 

27 States, shall be brought to a port of entry of the United States. 

28 ‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property de29 scribed in subsection (a) to a foreign port may be seized by, and forfeited 

30 to, the United States Government. A forfeiture under this subsection ac31 crues half to the informer and half to the Government. 

32 ‘‘§ 80104. Salvaging operations by foreign vessels 

33 ‘‘(a) PROHIBITION.—Except as provided in this section or section 80105 

34 of this title, a foreign vessel may not, under penalty of forfeiture, engage 

35 in salvaging operations on the Atlantic or Pacific coast of the United States, 

36 in any portion of the Great Lakes or their connecting or tributary waters, 

37 including any portion of the Saint Lawrence River through which the inter38 national boundary line extends, or in territorial waters of the United States 

39 on the Gulf of Mexico. 

40 ‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary of 

41 Homeland Security may authorize a foreign vessel to engage in salvaging 
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1 operations in a particular locality if, on investigation, the Secretary is satis2 fied that there is not available in that locality a suitable vessel that is—

3 ‘‘(1) owned only by citizens of the United States (including a cor4 poration that is a citizen of the United States under section 12118 of 

5 this title); and 

6 ‘‘(2) documented under chapter 121 of this title or numbered under 

7 chapter 123 of this title. 

8 ‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does not pro9 hibit or restrict assistance to vessels or salvaging operations authorized by 

10 treaty, including—

11 ‘‘(1) article II of the Treaty between the United States and Great 

12 Britain concerning reciprocal rights for United States and Canada in 

13 the conveyance of prisoners and wrecking and salvage, signed at Wash14 ington, May 18, 1908 (35 Stat. 2036); or 

15 ‘‘(2) the Treaty between the United States of America and Mexico 

16 to facilitate assistance to and salvage of vessels in territorial waters, 

17 signed at Mexico City, June 13, 1935 (49 Stat. 3359). 

18 ‘‘§ 80105. Canadian vessels aiding vessels in United States 

19 waters 

20 ‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment may give 

21 aid to Canadian or other vessels and property wrecked, disabled, or in dis22 tress in the waters of the United States contiguous to Canada, including—

23 ‘‘(1) the canal and improvement of the waters between Lake Erie 

24 and Lake Huron; and 

25 ‘‘(2) the Saint Marys River and canal. 

26 ‘‘(b) RECIPROCITY.—This section does not apply after the President pro27 claims that privileges reciprocal to those under subsection (a) have been 

28 withdrawn or rendered inoperative by the Government of Canada. 

29 ‘‘§ 80106. International agreement on derelicts 

30 ‘‘The President may make an international agreement with other govern31 ments interested in the navigation of the North Atlantic Ocean, providing 

32 for the reporting, marking, and removal of dangerous wrecks, derelicts, and 

33 other menaces to navigation outside the coast waters of the countries bor34 dering the North Atlantic Ocean. 

35 ‘‘§ 80107. Salvors of life to share in remuneration 

36 ‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who gave aid 

37 following an accident giving rise to salvage, is entitled to a fair share of 

38 the payment awarded to the salvor for salvaging the vessel or other property 

39 or preventing or minimizing damage to the environment. 
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1 ‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remuneration for 

2 aid or salvage services is not affected by common ownership of the vessels 

3 giving and receiving the aid or salvage services. 

4 ‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover remu5 neration for giving aid or salvage services must be brought within 2 years 

6 after the date the aid or salvage services were given, unless the court in 

7 which the action is brought is satisfied that during that 2-year period there 

8 had not been a reasonable opportunity to seize the aided or salvaged vessel 

9 within the jurisdiction of the court or within the territorial waters of the 

10 country of the plaintiff’s residence or principal place of business. 

11 ‘‘(d) NONAPPLICATION.—This section does not apply to a vessel of war 

12 or a vessel owned by the United States Government appropriated only to 

13 a public service.

14 ‘‘CHAPTER 803—ICE AND DERELICTS

‘‘Sec. 

‘‘80301. International agreements. 

‘‘80302. Patrol services. 

‘‘80303. Speed of vessel in ice region.

15 ‘‘§ 80301. International agreements 

16 ‘‘(a) GENERAL AUTHORITY.—The President may make agreements with 

17 interested maritime countries to—

18 ‘‘(1) maintain in the North Atlantic Ocean a service of ice patrol, 

19 of study and observation of ice and current conditions, and of assist20 ance to vessels and their crews requiring assistance within the limits 

21 of the patrol; 

22 ‘‘(2) maintain a service of study and observation of ice and current 

23 conditions in the waters affecting the set and drift of ice in the North 

24 Atlantic Ocean; and 

25 ‘‘(3) take all practicable steps to ensure the destruction or removal 

26 of derelicts in the northern part of the Atlantic Ocean, east of the line 

27 drawn from Cape Sable to a point in latitude 34 degrees north, lon28 gitude 70 degrees west, if the destruction or removal is necessary. 

29 ‘‘(b) PAYMENT BETWEEN COUNTRIES.—The President may include in an 

30 agreement under subsection (a) a provision for—

31 ‘‘(1) payment to the United States Government by other countries 

32 for their proportionate share of the expense of maintaining the services; 

33 or

34 ‘‘(2) contribution by the Government for its proportionate share if 

35 the agreement provides for another country to maintain the services. 

36 ‘‘§ 80302. Patrol services 

37 ‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made under sec38 tion 80301 of this title provide otherwise, an ice patrol shall be maintained 
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1 during the entire ice season in guarding the southeastern, southern, and 

2 southwestern limits of the region of icebergs in the vicinity of the Grand 

3 Banks of Newfoundland. The patrol shall inform trans-Atlantic and other 

4 passing vessels by radio and other available means of the ice conditions and 

5 the extent of the dangerous region. During the ice season, there shall be 

6 maintained a service of study of ice and current conditions, a service of pro7 viding assistance to vessels and crews requiring assistance, and a service of 

8 removing and destroying derelicts. Any of these services may be maintained 

9 during the remainder of the year as may be advisable. 

10 ‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn any vessel 

11 known to be approaching a dangerous area and recommend safe routes. 

12 ‘‘(c) RECORDING AND REPORTING INCIDENTS.—

13 ‘‘(1) RECORDING.—An ice patrol vessel shall record the name of a 

14 vessel and the facts of the case when the patrol observes or knows that 

15 the vessel—

16 ‘‘(A) is on other than a regular recognized or advertised route 

17 crossing the North Atlantic Ocean; 

18 ‘‘(B) has crossed the fishing banks of Newfoundland north of 

19 latitude 43 degrees north during the fishing season; or 

20 ‘‘(C) has passed through regions known or believed to be endan21 gered by ice when proceeding to and from ports of North America. 

22 ‘‘(2) REPORTING.—The name of the vessel and all pertinent informa23 tion about the incident shall be reported to the government of the coun24 try to which the vessel belongs if that government requests. 

25 ‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard, under 

26 the direction of the Secretary of the department in which the Coast Guard 

27 is operating, shall carry out the services provided for in this section and 

28 shall assign necessary vessels, material, and personnel of the Coast Guard. 

29 On request of such Secretary, the head of an agency may detail personnel, 

30 lend or contribute material or equipment, or otherwise assist in carrying out 

31 the services provided for in this section. 

32 ‘‘(e) ANNUAL REPORT.—The Commandant shall publish an annual report 

33 of the activities of the services provided for in this section. A copy of the 

34 report shall be provided to each interested foreign government and to each 

35 agency assisting in the work. 

36 ‘‘§ 80303. Speed of vessel in ice region 

37 ‘‘(a) REQUIREMENT.—The master of a vessel of the United States, when 

38 ice is reported on or near the vessel’s course, shall proceed at a moderate 

39 speed or change the course of the vessel to go well clear of the danger zone. 

40 ‘‘(b) CIVIL PENALTY.—A master violating this section is liable to the 

41 United States Government for a civil penalty of not more than $500.
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1 ‘‘CHAPTER 805—SAFE CONTAINERS FOR 

2 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. 

3 ‘‘§ 80501. Definitions 

4 ‘‘In this chapter: 

5 ‘‘(1) CONTAINER.—The term ‘container’ has the meaning given that 

6 term in the Convention. 

7 ‘‘(2) CONVENTION.—The term ‘Convention’ means the International 

8 Convention for Safe Containers, and its annexes, done at Geneva, Swit9 zerland, December 2, 1972. 

10 ‘‘(3) INTERNATIONAL TRANSPORT.—The term ‘international trans11 port’ means the transportation of a container between—

12 ‘‘(A) a place in a foreign country and a place in the jurisdiction 

13 of the United States; or 

14 ‘‘(B) two places outside the United States by United States car15 riers. 

16 ‘‘(4) OWNER.—The term ‘owner’ includes the lessee or bailee of a 

17 container if a written lease or bailment provides for the lessee or bailee 

18 to exercise the owner’s responsibility for maintaining and examining 

19 the container. 

20 ‘‘(5) SAFETY APPROVAL PLATE.—The term ‘safety approval plate’ 

21 has the meaning given that term in annex I of the Convention. 

22 ‘‘§ 80502. Application of Convention 

23 ‘‘The Convention applies to an owner of a container used in international 

24 transport if the owner is domiciled or has its principal office in the United 

25 States. 

26 ‘‘§ 80503. General authority of the Secretary 

27 ‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast 

28 Guard is operating shall carry out the Convention and this chapter in the 

29 United States. 

30 ‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations to carry 

31 out this chapter. The regulations shall—

32 ‘‘(1) establish procedures for testing, inspecting, and initially approv33 ing containers and designs for containers, including procedures for at34 taching, invalidating, and removing safety approval plates for con35 tainers; 
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1 ‘‘(2) establish procedures to be followed by the owners of containers 

2 for the periodic examination of containers as provided in the Conven3 tion; and 

4 ‘‘(3) provide a method for developing, collecting, and disseminating 

5 information about container safety and the international transport of 

6 containers. 

7 ‘‘(c) SAFETY APPROVAL PLATES.—If the owner of a container without a 

8 safety approval plate establishes that the container satisfies the standards 

9 of the Convention, the Secretary may authorize a safety approval plate to 

10 be attached to the container. 

11 ‘‘(d) SCHEDULE OF FEES.—The Secretary may prescribe a schedule of 

12 fees for services performed by the Secretary, or by a person delegated au13 thority under section 80506 of this title, for the testing, inspection, and ini14 tial approval of containers and container designs. 

15 ‘‘(e) ENCOURAGING INTERMODAL TRANSPORT.—To the maximum extent 

16 possible, the Secretary shall encourage the development and use of inter17 modal transport, using containers built to facilitate economical, safe, and 

18 expeditious handling of containerized cargo without intermediate reloading 

19 when it is being transported over land, air, and sea areas. 

20 ‘‘§ 80504. Approval and examination 

21 ‘‘(a) DOMICILE AND PRINCIPAL OFFICE IN UNITED STATES.—A con22 tainer owner domiciled and having its principal office in the United States 

23 shall have the container—

24 ‘‘(1) approved initially under procedures prescribed by the Secretary 

25 of the department in which the Coast Guard is operating or by the gov26 ernment of another country that is a party to the Convention; and 

27 ‘‘(2) examined periodically as provided in the Convention under pro28 cedures prescribed by the Secretary. 

29 ‘‘(b) DOMICILE OR PRINCIPAL OFFICE IN UNITED STATES.—A container 

30 owner domiciled or having its principal office in the United States shall have 

31 the container—

32 ‘‘(1) approved initially under procedures prescribed by the Secretary 

33 or by the government of another country that is a party to the Conven34 tion; and 

35 ‘‘(2) examined periodically as provided in the Convention, under pro36 cedures prescribed by the government of the country in which the 

37 owner is domiciled or has its principal office, as long as that country 

38 is a party to the Convention. 

39 ‘‘(c) NEITHER DOMICILE NOR PRINCIPAL OFFICE IN UNITED STATES.—

40 A container owner neither domiciled nor having its principal office in the 

41 United States or another country that is a party to the Convention may 
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1 submit a container for initial approval and periodic examination under pro2 cedures prescribed by the Secretary. 

3 ‘‘§ 80505. Enforcement 

4 ‘‘(a) IN GENERAL.—To enforce the Convention, this chapter, and regula5 tions prescribed under this chapter, the Secretary of the department in 

6 which the Coast Guard is operating may—

7 ‘‘(1) examine, or require to be examined, containers in international 

8 transport; 

9 ‘‘(2) approve designs for containers; 

10 ‘‘(3) inspect and test containers being manufactured; 

11 ‘‘(4) issue a detention order removing or excluding a container from 

12 service until the container owner satisfies the Secretary that the con13 tainer meets the standards of the Convention, if the container—

14 ‘‘(A) does not have a safety approval plate attached to it; or 

15 ‘‘(B) has a safety approval plate attached but there is signifi16 cant evidence that the container is in a condition that creates an 

17 obvious risk to safety; 

18 ‘‘(5) take other appropriate action, including issuing necessary or19 ders, to remove a container from service or restrict its use if the con20 tainer is not in compliance with the Convention, this chapter, or regula21 tions prescribed under this chapter, but does not present an obvious 

22 risk to safety; and 

23 ‘‘(6) allow a container found to be unsafe or without a safety ap24 proval plate to be moved to another location for repair or other disposi25 tion, under restrictions consistent with the intent of the Convention. 

26 ‘‘(b) PAYMENT OF EXPENSES.—

27 ‘‘(1) EXAMINATION.—The owner of a container involved in an action 

28 by the Secretary under this section related to an examination of the 

29 container shall pay or reimburse the Secretary for the expenses arising 

30 from that action, except for the costs of routine examinations of the 

31 container or a safety approval plate. 

32 ‘‘(2) TESTING, INSPECTION, AND INITIAL APPROVAL.—The owner of 

33 a container submitted to the procedure established by the Secretary for 

34 testing, inspection, and initial approval, and the manufacturer of a con35 tainer that submits a design to the procedure established by the Sec36 retary for testing, inspection, and initial approval, shall pay or reim37 burse the Secretary for the expenses arising from the testing, inspec38 tion, or approval. 

39 ‘‘(3) CREDIT TO APPROPRIATION.—Amounts received by the Sec40 retary as reimbursement shall be credited to the appropriation for oper41 ating expenses of the Coast Guard. 
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1 ‘‘(c) PRESUMPTION BASED ON SAFETY APPROVAL PLATE.—A container 

2 bearing a safety approval plate authorized by a country that is a party to 

3 the Convention is presumed to be in a safe condition unless there is signifi4 cant evidence that the container is in a condition that creates an obvious 

5 risk to safety. 

6 ‘‘(d) NOTICE OF ORDERS.—

7 ‘‘(1) IN GENERAL.—When the Secretary issues a detention or other 

8 order under this section, the Secretary promptly shall notify in writ9 ing—

10 ‘‘(A) the owner of the container; 

11 ‘‘(B) the owner’s agent; or 

12 ‘‘(C) if the identity of the owner is not apparent from the con13 tainer or shipping documents, the custodian. 

14 ‘‘(2) INFORMATION TO INCLUDE.—The notification shall identify the 

15 container involved, give the location of the container, and describe the 

16 condition or situation giving rise to the order. 

17 ‘‘(e) DURATION OF ORDERS.—An order issued by the Secretary under 

18 this section remains in effect until—

19 ‘‘(1) the Secretary declares the container to be in compliance with 

20 the standards of the Convention; or 

21 ‘‘(2) the container is removed permanently from service. 

22 ‘‘(f) NOTICE OF DEFECTIVE CONTAINER TO COUNTRY ISSUING SAFETY

23 APPROVAL PLATE.—If the Secretary has reason to believe that a container 

24 bearing a safety approval plate issued by another country was defective at 

25 the time of approval, the Secretary shall notify that country. 

26 ‘‘§ 80506. Delegation of authority 

27 ‘‘(a) IN GENERAL.—The Secretary of the department in which the Coast 

28 Guard is operating may delegate to any person, including a public or private 

29 agency or nonprofit organization, authority to grant initial approval for con30 tainers and designs and to attach safety approval plates. 

31 ‘‘(b) REGULATIONS.—Before making a delegation under this section, the 

32 Secretary shall prescribe regulations establishing—

33 ‘‘(1) criteria to be followed in selecting a person to whom authority 

34 is to be delegated; 

35 ‘‘(2) a detailed description of the duties and powers to be carried out 

36 by the person to whom authority is delegated, including the records the 

37 person shall keep; and 

38 ‘‘(3) the review the Secretary will conduct to decide whether the per39 son is carrying out the delegated duties and powers properly. 
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1 ‘‘(c) INSPECTION OF RECORDS.—A person delegated authority under this 

2 section shall make available to the Secretary for inspection, on request, 

3 records the person is required to keep. 

4 ‘‘(d) PENALTIES AND ORDERS.—A person delegated authority under this 

5 section may not—

6 ‘‘(1) assess or collect, or attempt to assess or collect, a penalty for 

7 violation of the Convention, this chapter, or an order issued by the Sec8 retary under this chapter; or 

9 ‘‘(2) issue or attempt to issue a detention or other order. 

10 ‘‘(e) PUBLICATION.—The Secretary shall publish in the Federal Register 

11 or other appropriate publication—

12 ‘‘(1) the name and address of each person to whom authority is dele13 gated; 

14 ‘‘(2) the duties and powers delegated; and 

15 ‘‘(3) the period of the delegation. 

16 ‘‘(f) REVOCATION.—The Secretary may revoke a delegation of authority 

17 under this section at any time. 

18 ‘‘§ 80507. Employee protection 

19 ‘‘(a) PROHIBITION.—A person may not discharge or discriminate against 

20 an employee because the employee has reported the existence of an unsafe 

21 container or a violation of this chapter or a regulation prescribed under this 

22 chapter. 

23 ‘‘(b) COMPLAINTS.—An employee alleging to be the subject of a violation 

24 of subsection (a) may file a complaint with the Secretary of Labor. The 

25 complaint must be filed within 60 days after the violation. 

26 ‘‘(c) ENFORCEMENT.—The Secretary may investigate the complaint. If 

27 the Secretary finds there has been a violation, the Secretary may bring a 

28 civil action in a district court of the United States. The court has jurisdic29 tion to restrain violations of subsection (a) and order appropriate relief, in30 cluding reinstatement of the employee to the employee’s former position 

31 with back pay.

32 ‘‘(d) NOTICE TO COMPLAINANT.—Within 30 days after receiving a com33 plaint under this section, the Secretary shall notify the complainant of the 

34 Secretary’s intended action on the complaint. 

35 ‘‘§ 80508. Amendments to Convention 

36 ‘‘(a) PROPOSALS BY UNITED STATES GOVERNMENT.—The Secretary of 

37 State, with the concurrence of the Secretary of the department in which the 

38 Coast Guard is operating, may propose amendments to the Convention or 

39 request a conference for amending the Convention as provided in article IX 

40 of the Convention. 
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1 ‘‘(b) PROPOSALS BY OTHER COUNTRIES.—An amendment communicated 

2 to the United States Government under article IX(2) of the Convention may 

3 be accepted for the Government by the President, with the advice and con4 sent of the Senate. The President may declare that the Government does 

5 not accept an amendment. 

6 ‘‘(c) AMENDMENTS TO ANNEXES.—

7 ‘‘(1) IN GENERAL.—The Secretary of State, with the concurrence of 

8 the Secretary of the department in which the Coast Guard is oper9 ating—

10 ‘‘(A) may propose amendments to the annexes to the Conven11 tion; 

12 ‘‘(B) may propose a conference for amending annexes to the 

13 Convention; and 

14 ‘‘(C) shall consider and act on amendments to the annexes to 

15 the Convention adopted by the Maritime Safety Committee of the 

16 International Maritime Organization and communicated to the 

17 Government under article X(2) of the Convention. 

18 ‘‘(2) ACTION FOLLOWING APPROVAL OR OBJECTION.—If a proposed 

19 amendment to an annex is approved by the Government, the amend20 ment shall enter into force as provided in article X of the Convention. 

21 If a proposed amendment is objected to, the Secretary of State prompt22 ly shall communicate the objection as provided in article X(3) of the 

23 Convention. 

24 ‘‘(d) APPOINTMENT OF ARBITRATOR.—The Secretary of State, with the 

25 concurrence of the Secretary of the department in which the Coast Guard 

26 is operating, shall appoint an arbitrator when one is required to resolve a 

27 dispute within the meaning of article XIII of the Convention. 

28 ‘‘§ 80509. Civil penalty 

29 ‘‘(a) IN GENERAL.—An owner, agent, or custodian who has been notified 

30 of an order issued under section 80505 of this title and fails to take reason31 able and prompt action to prevent or stop a container subject to the order 

32 from being moved in violation of the order is liable to the United States 

33 Government for a civil penalty of not more than $5,000 for each container 

34 moved. Each day the container remains in service while the order is in effect 

35 is a separate violation. 

36 ‘‘(b) ASSESSMENT AND COLLECTION.—

37 ‘‘(1) IN GENERAL.—After notice and an opportunity for a hearing, 

38 the Secretary of the department in which the Coast Guard is operating 

39 shall assess and collect any penalty under this section. 

40 ‘‘(2) FACTORS TO CONSIDER.—In determining the amount of the 

41 penalty, the Secretary shall consider the gravity of the violation, the 
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1 hazards involved, and the record of the person charged with respect to 

2 violations of the Convention, this chapter, or regulations prescribed 

3 under this chapter. 

4 ‘‘(3) REMISSION, MITIGATION, OR COMPROMISE.—The Secretary may 

5 remit, mitigate, or compromise a penalty under this section. 

6 ‘‘(4) ENFORCEMENT.—If a person fails to pay a penalty under this 

7 section, the Secretary shall refer the matter to the Attorney General 

8 for collection in an appropriate district court of the United States.’’.

9 SEC. 11. MARITIME ADMINISTRATION. 

10 Section 109 of title 49, United States Code, is amended to read as fol11 lows: 

12 ‘‘§ 109. Maritime Administration 

13 ‘‘(a) ORGANIZATION.—The Maritime Administration is an administration 

14 in the Department of Transportation. 

15 ‘‘(b) MARITIME ADMINISTRATOR.—The head of the Maritime Administra16 tion is the Maritime Administrator, who is appointed by the President by 

17 and with the advice and consent of the Senate. The Administrator shall re18 port directly to the Secretary of Transportation and carry out the duties 

19 prescribed by the Secretary. 

20 ‘‘(c) DEPUTY MARITIME ADMINISTRATOR.—The Maritime Administration 

21 shall have a Deputy Maritime Administrator, who is appointed in the com22 petitive service by the Secretary, after consultation with the Administrator. 

23 The Deputy Administrator shall carry out the duties prescribed by the Ad24 ministrator. The Deputy Administrator shall be Acting Administrator dur25 ing the absence or disability of the Administrator and, unless the Secretary 

26 designates another individual, during a vacancy in the office of Adminis27 trator. 

28 ‘‘(d) DUTIES AND POWERS VESTED IN SECRETARY.—All duties and pow29 ers of the Maritime Administration are vested in the Secretary. 

30 ‘‘(e) REGIONAL OFFICES.—The Maritime Administration shall have re31 gional offices for the Atlantic, Gulf, Great Lakes, and Pacific port ranges, 

32 and may have other regional offices as necessary. The Secretary shall ap33 point a qualified individual as Director of each regional office. The Sec34 retary shall carry out appropriate activities and programs of the Maritime 

35 Administration through the regional offices. 

36 ‘‘(f) INTERAGENCY AND INDUSTRY RELATIONS.—The Secretary shall es37 tablish and maintain liaison with other agencies, and with representative 

38 trade organizations throughout the United States, concerned with the trans39 portation of commodities by water in the export and import foreign com40 merce of the United States, for the purpose of securing preference to vessels 

41 of the United States for the transportation of those commodities. 
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1 ‘‘(g) DETAILING OFFICERS FROM ARMED FORCES.—To assist the Sec2 retary in carrying out duties and powers relating to the Maritime Adminis3 tration, not more than five officers of the armed forces may be detailed to 

4 the Secretary at any one time, in addition to details authorized by any other 

5 law. During the period of a detail, the Secretary shall pay the officer an 

6 amount that, when added to the officer’s pay and allowances as an officer 

7 in the armed forces, makes the officer’s total pay and allowances equal to 

8 the amount that would be paid to an individual performing work the Sec9 retary considers to be of similar importance, difficulty, and responsibility as 

10 that performed by the officer during the detail. 

11 ‘‘(h) CONTRACTS AND AUDITS.—

12 ‘‘(1) CONTRACTS.—In the same manner that a private corporation 

13 may make a contract within the scope of its authority under its char14 ter, the Secretary may make contracts for the United States Govern15 ment and disburse amounts to—

16 ‘‘(A) carry out the Secretary’s duties and powers under this sec17 tion and subtitle V of title 46; and 

18 ‘‘(B) protect, preserve, and improve collateral held by the Sec19 retary to secure indebtedness. 

20 ‘‘(2) AUDITS.—The financial transactions of the Secretary under 

21 paragraph (1) shall be audited by the Comptroller General. The Comp22 troller General shall allow credit for an expenditure shown to be nec23 essary because of the nature of the business activities authorized by 

24 this section or subtitle V of title 46. At least once a year, the Comp25 troller General shall report to Congress any departure by the Secretary 

26 from this section or subtitle V of title 46. 

27 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—

28 ‘‘(1) IN GENERAL.—Except as otherwise provided in this subsection, 

29 there are authorized to be appropriated such amounts as may be nec30 essary to carry out the duties and powers of the Secretary relating to 

31 the Maritime Administration.

32 ‘‘(2) LIMITATIONS.—Only those amounts specifically authorized by 

33 law may be appropriated for the use of the Maritime Administration 

34 for—

35 ‘‘(A) acquisition, construction, or reconstruction of vessels; 

36 ‘‘(B) construction-differential subsidies incident to the construc37 tion, reconstruction, or reconditioning of vessels; 

38 ‘‘(C) costs of national defense features; 

39 ‘‘(D) payments of obligations incurred for operating-differential 

40 subsidies; 
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1 ‘‘(E) expenses necessary for research and development activities, 

2 including reimbursement of the Vessel Operations Revolving Fund 

3 for losses resulting from expenses of experimental vessel oper4 ations; 

5 ‘‘(F) the Vessel Operations Revolving Fund; 

6 ‘‘(G) National Defense Reserve Fleet expenses; 

7 ‘‘(H) expenses necessary to carry out part B of subtitle V of 

8 title 46; and 

9 ‘‘(I) other operations and training expenses related to the devel10 opment of waterborne transportation systems, the use of water11 borne transportation systems, and general administration. 

12 ‘‘(3) TRAINING VESSELS.—Amounts may not be appropriated for the 

13 purchase or construction of training vessels for State maritime acad14 emies unless the Secretary has approved a plan for sharing training 

15 vessels between State maritime academies.’’.

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

17 2003. 

18 (a) AMENDMENTS TO CHAPTER 531.—Chapter 531 of title 46, United 

19 States Code, is amended as follows: 

20 (1) In section 53102—

21 (A) in the headings of paragraphs (1), (2), and (4) of sub22 section (c), strike ‘‘SECTION 2’’ and substitute ‘‘SECTION 50501’’; 

23 (B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and (B), and 

24 (4)(B), strike ‘‘section 2 of the Shipping Act, 1916 (46 U.S.C. 

25 App. 802)’’ and substitute ‘‘section 50501 of this title’’; 

26 (C) in subsection (d), strike ‘‘the first section of Public Law 

27 81–891 (64 Stat. 1120; 46 U.S.C. App. note prec. 3)’’ and sub28 stitute ‘‘section 501 of this title’’; and 

29 (D) in subsection (e)(1)—

30 (i) strike ‘‘a documented vessel (as that term is defined in 

31 section 12101 of this title)’’ and substitute ‘‘documented 

32 under chapter 121 of this title,’’; and 

33 (ii) in clause (B), strike ‘‘a documented vessel (as defined 

34 in that section)’’ and substitute ‘‘documented under chapter 

35 121’’. 

36 (2) In section 53103(c)—

37 (A) in the heading of paragraph (1)(C), strike ‘‘SECTION 2’’ and 

38 substitute ‘‘SECTION 50501’’; 

39 (B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), strike ‘‘section 

40 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and substitute 

41 ‘‘section 50501 of this title’’; 
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1 (C) in paragraph (1)(B), strike ‘‘subparagraphs’’ and substitute 

2 ‘‘subparagraph’’; and 

3 (D) in paragraph (3)(B), strike ‘‘agreement’’ and substitute 

4 ‘‘agreements’’. 

5 (3) In section 53104—

6 (A) in subsection (c)(3)(B)(ii)(I) and (II), strike ‘‘section 2 of 

7 the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and substitute 

8 ‘‘section 50501 of this title’’; 

9 (B) in subsection (e)(2), strike ‘‘section 9 of the Shipping Act, 

10 1916 (46 U.S.C. App. 808)’’ and substitute ‘‘section 56102 of this 

11 title’’; and 

12 (C) in subsection (e)(3), strike ‘‘section 902 of the Merchant 

13 Marine Act, 1936 (46 U.S.C. App. 1242)’’ and ‘‘section 902 of 

14 such Act’’ and substitute ‘‘chapter 563 of this title’’ and ‘‘chapter 

15 563’’, respectively. 

16 (4) In section 53105—

17 (A) in subsection (a)(1)(A), strike ‘‘section 12105’’ and sub18 stitute ‘‘section 12111’’; and 

19 (B) in subsection (f), strike ‘‘approve’’ and substitute ‘‘ap20 proves’’. 

21 (5) In section 53106—

22 (A) in subsection (d)(1), strike ‘‘section 2631 of title 10, United 

23 States Code, the Act of March 26, 1934 (46 U.S.C. App. 1241–

24 1), section 901(a), 901(b), or 901b of the Merchant Marine Act, 

25 1936 (46 U.S.C. App. 1241(a), 1241(b), or 1241f)’’ and sub26 stitute ‘‘section 55302(a), 55304, 55305, or 55314 of this title, 

27 section 2631 of title 10’’; 

28 (B) in subsection (d)(2), strike ‘‘section 901(a), 901(b), or 901b 

29 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a), 

30 1241(b), or 1241f),’’ and substitute ‘‘section 55302(a), 55305, or 

31 55314 of this title’’; and 

32 (C) in subsection (e)(2), strike ‘‘section 2(c) of the Shipping 

33 Act, 1916 (46 U.S.C. App. 802(c))’’ and substitute ‘‘section 

34 50501 of this title, applying the 75 percent ownership requirement 

35 of that section’’. 

36 (6) In section 53107(f)—

37 (A) strike ‘‘section 2631 of title 10, United States Code, the Act 

38 of March 26, 1934 (46 U.S.C. App. 1241–1), section 901(a), 

39 901(b), or 901b of the Merchant Marine Act, 1936 (46 U.S.C. 

40 App. 1241(a), 1241(b), or 1241f)’’ and substitute ‘‘section 
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1 55302(a), 55304, 55305, or 55314 of this title, section 2631 of 

2 title 10’’; and 

3 (B) strike ‘‘section 2631 of title 10, United States Code, the 

4 Act of March 26, 1934 (46 U.S.C. App. 1241–1), and sections 

5 901(a), 901(b), and 901b of the Merchant Marine Act, 1936 (46 

6 U.S.C. App. 1241(a), 1241(b), and 1241b)’’ and substitute ‘‘sec7 tions 55302(a), 55304, 55305, and 55314 of this title and section 

8 2631 of title 10’’; and 

9 (7) In section 53108(b), strike ‘‘section 901(b)(1) of the Merchant 

10 Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))’’ and substitute ‘‘sec11 tion 55305(a) of this title’’. 

12 (b) OTHER CONFORMING AMENDMENTS.— 

13 (1) SECTION 12111.— 

14 (A) AMENDMENT.—Section 12111(c)(3) of title 46, United 

15 States Code, as enacted by this Act, is amended by striking ‘‘sub16 title B of title VI of the Merchant Marine Act, 1936’’ and sub17 stituting ‘‘chapter 531 of this title’’. 

18 (B) REPEAL.—If this Act is enacted before the amendment 

19 made by section 3534(b)(1) of the Maritime Security Act of 2003 

20 (Public Law 108–136, 117 Stat. 1818) becomes effective, such 

21 section 3534(b)(1) is repealed. 

22 (2) SECTION 56102.—Section 56102(c) of title 46, United States 

23 Code, as enacted by this Act, is amended by striking clauses (1)–(4) 

24 and substituting the following: 

25 ‘‘(1)(A) the Secretary, in conjunction with the Secretary of Defense, 

26 determines that at least one replacement vessel of equal or greater mili27 tary capability and of a capacity that is equivalent or greater, as meas28 ured by deadweight tons, gross tons, or container equivalent units, as 

29 appropriate, is documented under chapter 121 of this title by the owner 

30 of the vessel placed under foreign registry; and 

31 ‘‘(B) the replacement vessel is not more than 10 years old on the 

32 date of that documentation; or 

33 ‘‘(2) an operating agreement covering the vessel under chapter 531 

34 of this title has expired.’’. 

35 (c) EFFECTIVE DATES.—(1) The amendments made by subsections (a) 

36 and (b)(2) are effective on the date of enactment of this Act, or the effective 

37 date of subtitle C of the Maritime Security Act of 2003 (Public Law 108– 

38 136, 117 Stat. 1803), whichever is later. 

39 (2) The amendment made by subsection (b)(1)(A) is effective the date of 

40 enactment of this Act, or the effective date of section 3534(b)(1) of the 

41 Maritime Security Act of 2003 (117 Stat. 1818), whichever is later. 
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1 SEC. 13. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS. 

2 (a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46 App. U.S.C. 

3 111, 123) is amended by striking ‘‘or tonnage tax’’. 

4 (b) Section 809(a) of the Merchant Marine Act, 1936 (46 App. U.S.C. 

5 1213(a)), is amended by striking ‘‘and section 211(a)’’.

6 SEC. 14. ADDITIONAL AMENDMENTS TO TITLE 46. 

7 Title 46, United States Code, is amended as follows: 

8 (1) The analysis of subtitle II is amended as follows: 

9 (A) In each chapter item, capitalize the first letter of each word 

10 containing 4 or more letters. 

11 (B) Strike the item for chapter 39. 

12 (C) The item for chapter 45 is amended to read as follows:

‘‘45. Uninspected Commercial Fishing Industry Vessels .................... 4501’’.

13 (2) Section 2101 is amended as follows: 

14 (A) Clauses (2), (3), (3a), (6), (10), (10a), (12), (17b), (36), 

15 (41), (44), (45), and (46) are repealed. 

16 (B) In clause (8a), insert ‘‘Prevention’’ after ‘‘Abuse’’. 

17 (C) In clause (18), strike ‘‘those’’. 

18 (D) In clause (34)—

19 (i) strike ‘‘, except in part H,’’; and 

20 (ii) strike ‘‘head’’ and substitute ‘‘Secretary’’. 

21 (3) In section 2102—

22 (A) in subsection (a)(2), strike ‘‘section 2101(36) and (44)’’ 

23 and substitute ‘‘chapter 1’’; and 

24 (B) in subsection (b), strike ‘‘West’’ and ‘‘East’’ and substitute 

25 ‘‘west’’ and ‘‘east’’, respectively. 

26 (4) In section 2106, strike ‘‘a district court of the United States’’ 

27 and substitute ‘‘the district court of the United States for any district’’. 

28 (5) Section 2108 is repealed. 

29 (6) In section 2110—

30 (A) in subsection (a)(2), strike ‘‘part B of this title’’ and sub31 stitute ‘‘part B of this subtitle’’; 

32 (B) in subsection (b)(2)(A)(iii), strike the period at the end and 

33 substitute ‘‘; and’’; 

34 (C) in subsection (b)(5), strike ‘‘fees’’ and substitute ‘‘fee’’; 

35 (D) In subsection (f), strike ‘‘Secretary of the Treasury shall 

36 deny the clearance required by section 4197 of the Revised Stat37 utes of the United States (46 App. U.S.C. 91)’’ and substitute 

38 ‘‘Secretary of Homeland Security shall deny the clearance required 

39 by section 60105 of this title’’; and 

40 (E) In subsection (j), strike ‘‘state’’ and substitute ‘‘State’’. 
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1 (7) In section 2301, strike ‘‘section’’ and substitute ‘‘sections 2304 

2 and’’. 

3 (8) In section 2304—

4 (A) insert the paragraph designation ‘‘(1)’’ after ‘‘(a)’’; and 

5 (B) insert at the end of subsection (a) the following new para6 graph: 

7 ‘‘(2) Paragraph (1) does not apply to a vessel of war or a vessel owned 

8 by the United States Government appropriated only to a public service.’’. 

9 (9) In section 2306(a)(2), strike ‘‘section 212(A) of the Merchant 

10 Marine Act, 1936 (46 App. U.S.C. 1122a),’’ and substitute ‘‘section 

11 50113 of this title’’. 

12 (10) In section 3205(d), strike ‘‘Secretary of the Treasury shall 

13 withhold or revoke the clearance required by section 4197 of the Re14 vised Statutes (46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of 

15 Homeland Security shall withhold or revoke the clearance required by 

16 section 60105 of this title’’. 

17 (11) In section 3302—

18 (A) in subsection (b), insert a comma after ‘‘fishing vessel’’; 

19 (B) in subsection (j)(2)(B), strike ‘‘section 1304 of the Mer20 chant Marine Act, 1936 (46 App. U.S.C. 1295c)’’ and substitute 

21 ‘‘chapter 515 of this title’’; and 

22 (C) in subsection (l)(1)(C), strike ‘‘Inc..’’ and substitute ‘‘Inc.’’. 

23 (12) In section 3306(d), strike ‘‘section 1302(3) of the Merchant 

24 Marine Act, 1936 (46 App. U.S.C. 1295a(3))’’ and substitute ‘‘section 

25 51102 of this title’’. 

26 (13) In section 3318(f), strike the period after ‘‘felony’’. 

27 (14) In section 3505, strike ‘‘section 3303(a)’’ and substitute ‘‘sec28 tion 3303’’. 

29 (15) In the analysis of chapter 37, the item for section 3719 is 

30 amended to read as follows:

‘‘3719. Reduction of oil spills from single hull non-self-propelled tank vessels.’’.

31 (16) In paragraphs (1)(C), (2), and (3) of section 3703a(c), strike 

32 ‘‘documentation under section 4136 of the Revised Statutes of the 

33 United States (46 App. U.S.C. 14)’’ and substitute ‘‘documentation as 

34 a wrecked vessel under section 12112 of this title’’. 

35 (17) In section 3704, strike ‘‘section 27 of the Merchant Marine Act, 

36 1920 (46 App. U.S.C. 883),’’ and substitute ‘‘chapter 551 of this 

37 title’’. 

38 (18) In section 3718(e)(1), strike ‘‘Secretary of the Treasury’’ and 

39 ‘‘section 4197 of the Revised Statutes of the United States (46 App. 
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1 U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland Security’’ and 

2 ‘‘section 60105 of this title’’, respectively. 

3 (19) In section 4702, strike the subsection ‘‘(a)’’ designation. 

4 (20) In section 4705—

5 (A) strike ‘‘subcontractor not’’ and substitute ‘‘subcontractor 

6 are not’’; 

7 (B) strike ‘‘(a)(1)’’ and substitute ‘‘(a)’’; 

8 (C) strike ‘‘(2) Paragraph (1)’’ and substitute ‘‘(b) Subsection 

9 (a)’’; 

10 (D) strike ‘‘(A)’’ and substitute ‘‘(1)’’; and 

11 (E) strike ‘‘(B)’’ and substitute ‘‘(2)’’. 

12 (21) In section 5113(b), strike ‘‘section 4197 of the Revised Statutes 

13 (46 App. U.S.C. 91)’’ and substitute ‘‘section 60105 of this title’’. 

14 (22) In section 6101, redesignate the second subsection (g) and sub15 section (h) as subsections (h) and (i), respectively. 

16 (23) In section 9307(b)(2)(A), strike ‘‘The’’ and substitute ‘‘the’’. 

17 (24) In section 12503(a), in the matter before clause (1), strike 

18 ‘‘delegee’’ and substitute ‘‘delegate’’. 

19 (25) In section 13102(a), insert ‘‘(26 U.S.C. 9504)’’ after ‘‘Internal 

20 Revenue Code of 1986’’. 

21 (26) In section 14305(a)—

22 (A) in clause (1), strike ‘‘and sections 12106(c) and 12108(c)’’ 

23 and substitute ‘‘of this subtitle and section 12116’’; 

24 (B) in clause (5), strike ‘‘section 4283 of the Revised Statutes 

25 of the United States (46 App. U.S.C. 183)’’ and substitute ‘‘sec26 tion 30506 of this title’’; 

27 (C) in clause (6), strike ‘‘sections 27 and 27A of the Act of 

28 June 5, 1920 (46 App. U.S.C. 883 and 883–1)’’ and substitute 

29 ‘‘sections 12118 and 12132 of this title’’; and 

30 (D) in clause (7), strike ‘‘Act of July 14, 1956 (46 App. U.S.C. 

31 883a)’’ and substitute ‘‘section 12139(b) of this title’’.

32 (27) In section 31306(a), strike ‘‘section 9 or 37 of the Shipping 

33 Act, 1916 (46 App. U.S.C. 808, 835)’’ and substitute ‘‘section 56102 

34 or 56103 of this title’’. 

35 (28) In section 31308, strike ‘‘title XI of the Merchant Marine Act, 

36 1936 (46 App. U.S.C. 1271 et seq.)’’ and substitute ‘‘chapter 537 of 

37 this title’’. 

38 (29) In section 31322—

39 (A) in subsection (a)(4)(A), strike ‘‘section 12102(c)’’ and sub40 stitute ‘‘section 12113(c)’’; 
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1 (B) in subsection (a)(4)(E), strike ‘‘under section 12102(a)’’ 

2 and substitute ‘‘for purposes of documentation under section 

3 12103’’; 

4 (C) in subsection (f)(2), strike ‘‘section 12102(c)’’ and sub5 stitute ‘‘section 12113(c)’’. 

6 (30) In section 31325(b)(3)(B), strike ‘‘section 9 or 37 of the Ship7 ping Act, 1936 (46 App. U.S.C. 808, 835)’’ and substitute ‘‘section 

8 56102 or 56103 of this title’’. 

9 (31) In section 31326(b)—

10 (A) in clause (1), strike ‘‘title XI of the Merchant Marine Act, 

11 1936 (46 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘chapter 537 

12 of this title,’’; and 

13 (B) in clause (2), strike ‘‘title XI of that Act’’ and substitute 

14 ‘‘chapter 537 of this title’’. 

15 (32) In section 31329—

16 (A) in subsection (a)(1), strike ‘‘section 12102’’ and substitute 

17 ‘‘section 12103’’; and 

18 (B) in subsection (b)—

19 (i) in clause (2), strike ‘‘section 902 of the Merchant Ma20 rine Act, 1936 (46 App. U.S.C. 1242)’’ and substitute ‘‘chap21 ter 563 of this title’’; and 

22 (ii) in clause (3), strike ‘‘sale foreign within the terms of 

23 the first proviso of section 27 of the Merchant Marine Act, 

24 1920 (46 App. U.S.C. 883)’’ and substitute ‘‘sale to a person 

25 not a citizen of the United States under section 12132 of this 

26 title’’. 

27 (33) In section 31342(b), strike ‘‘public vessel’’ and substitute ‘‘ves28 sel that is owned, demise chartered, or operated by the United States 

29 Government or a government of a foreign country’’.

30 SEC. 15. CONFORMING AMENDMENTS TO OTHER LAWS. 

31 (a) TITLE 10.—Title 10, United States Code, is amended as follows: 

32 (1) In section 374(b)(4)(A)(iv), strike ‘‘The Maritime Drug Law En33 forcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘Chapter 

34 705 of title 46’’

35 (2) In section 2218(d)(2), strike ‘‘sections 508 and 510 of the Mer36 chant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), shall be de37 posited in the Fund’’ and substitute ‘‘sections 57101–57104 and chap38 ter 573 of title 46’’. 

39 (3) In section 2350b(g)(2), strike ‘‘section 901(b) of the Merchant 

40 Marine Act, 1936 (46 U.S.C. App. 1241(b))’’ and substitute ‘‘section 

41 55305 of title 46’’. 
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1 (4) In section 2645—

2 (A) in subsection (c), strike ‘‘the second sentence of section 

3 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 

4 1288(a))’’ and substitute ‘‘section 53909(b) of title 46’’; 

5 (B) in subsection (h)(1), strike ‘‘title XII of the Merchant Ma6 rine Act, 1936 (46 U.S.C. App. 1281 et seq.),’’ and substitute 

7 ‘‘chapter 539 of title 46’’; and 

8 (C) in subsection (h)(2), strike ‘‘the first sentence of section 

9 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 

10 1288(a))’’ and substitute ‘‘section 53909(a) of title 46’’. 

11 (5) In section 2664(a)(3), strike ‘‘transferred to the Secretary of 

12 Transportation under section 3 of the Maritime Act of 1981 (46 U.S.C. 

13 App. 1602)’’ and substitute ‘‘of the Secretary of Transportation relat14 ing to the Maritime Administration’’. 

15 (6) In section 5985, strike ‘‘section 1304 of the Merchant Marine 

16 Act, 1936 (46 U.S.C. App. 1295c),’’ and substitute ‘‘chapter 515 of 

17 title 46’’. 

18 (7) In section 7721(a), strike ‘‘the Act of March 3, 1925 (commonly 

19 referred to as the ‘Public Vessels Act’) (46 U.S.C. App. 781–790)’’ and 

20 substitute ‘‘chapter 311 of title 46’’. 

21 (b) TITLE 11.—Title 11, United States Code, is amended as follows: 

22 (1) In section 362(b)—

23 (A) in clause (12), strike ‘‘section 207 or title XI of the Mer24 chant Marine Act, 1936’’ and substitute ‘‘chapter 537 of title 46 

25 or section 109(h) of title 49’’; and 

26 (B) in clause (13), strike ‘‘section 207 or title XI of the Mer27 chant Marine Act, 1936’’ and substitute ‘‘chapter 537 of title 46’’. 

28 (2) In section 1110(a)(3)(A)(ii), strike ‘‘documented vessel (as de29 fined in section 30101(1) of title 46)’’ and substitute ‘‘vessel docu30 mented under chapter 121 of title 46’’. 

31 (c) TITLE 14.—Sections 821(b) and 823a(b) of title 14, United States 

32 Code, are each amended by striking clauses (3)–(5) and substituting the fol33 lowing: 

34 ‘‘(3) Section 30101 of title 46 (popularly known as the Admiralty 

35 Extension Act). 

36 ‘‘(4) Chapter 309 of title 46 (known as the Suits in Admiralty Act). 

37 ‘‘(5) Chapter 311 of title 46 (known as the Public Vessels Act).’’. 

38 (d) TITLE 18.—Title 18, United States Code, is amended as follows: 

39 (1) In section 229F(9)(C), strike ‘‘section 3(b) of the Maritime Drug 

40 Enforcement Act, as amended (46 U.S.C., App. sec. 1903(b))’’ and 

41 substitute ‘‘section 70502(b) of title 46, United States Code’’. 
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1 (2) In section 507—

2 (A) in the first paragraph, strike ‘‘recording, registry, or enroll3 ment of any vessel, in the office of any collector of the customs, 

4 or a license to any vessel for carrying on the coasting trade or 

5 fisheries of the United States’’ and substitute ‘‘documentation of 

6 any vessel’’; 

7 (B) in the first paragraph, strike ‘‘collector or other’’; and 

8 (C) in the second paragraph, strike ‘‘license,’’. 

9 (3) In section 924—

10 (A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and (k)(1), strike 

11 ‘‘the Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 

12 et seq.)’’ and substitute ‘‘chapter 705 of title 46’’; and 

13 (B) in subsection (g)(2), strike ‘‘802 et seq.’’ and substitute 

14 ‘‘801 et seq.’’. 

15 (4) In section 929(a)(2), strike ‘‘the Maritime Drug Law Enforce16 ment Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘chapter 705 

17 of title 46’’. 

18 (5) In section 965(a), strike ‘‘section 4197 of the Revised Statutes 

19 of the United States (46 U.S.C. App. 91)’’ and substitute ‘‘section 

20 60105 of title 46’’. 

21 (6) In section 2277(a), strike ‘‘registered, enrolled, or licensed’’ and 

22 substitute ‘‘documented’’. 

23 (7) In section 3142(e) and (f)(1)(C), strike ‘‘the Maritime Drug Law 

24 Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute ‘‘chap25 ter 705 of title 46’’. 

26 (e) INTERNAL REVENUE CODE OF 1986.—The Internal Revenue Code of 

27 1986 (26 U.S.C. 1 et seq.) is amended as follows: 

28 (1) In section 56(c)(2)—

29 (A) strike ‘‘section 607 of the Merchant Marine Act, 1936 (46 

30 U.S.C. 1177)’’ and substitute ‘‘chapter 535 of title 46, United 

31 States Code’’; and 

32 (B) in clauses (A) and (B), strike ‘‘such section 607’’ substitute 

33 ‘‘such chapter 535’’. 

34 (2) In section 140(a)(4), strike ‘‘section 607(d) of the Merchant Ma35 rine Act, 1936 (46 U.S.C. 1177)’’ and substitute ‘‘section 53507 of 

36 title 46, United States Code’’. 

37 (3) In section 543(a)(1)(B), strike ‘‘section 511 or 607 of the Mer38 chant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)’’ and sub39 stitute ‘‘chapter 533 or 535 of title 46, United States Code’’. 
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1 (4) In section 1023(2), strike ‘‘section 511 of the Merchant Marine 

2 Act, 1936, as amended (46 U.S.C. 1161)’’ and substitute ‘‘chapter 533 

3 of title 46, United States Code’’. 

4 (5) In section 1061—

5 (A) in clause (1), strike ‘‘section 510 of the Merchant Marine 

6 Act, 1936, see subsection (e) of that section, as amended August 

7 4, 1939 (46 U.S.C. App. 1160)’’ and substitute ‘‘chapter 573 of 

8 title 46, United States Code, see section 57307 of title 46’’; 

9 (B) in clause (2), strike ‘‘section 511 of such Act, as amended 

10 (46 U.S.C. App. 1161)’’ and substitute ‘‘chapter 533 of title 46, 

11 United States Code’’; and 

12 (C) strike clause (3). 

13 (6) In section 7518—

14 (A) in subsection (a)(1), strike ‘‘section 607 of the Merchant 

15 Marine Act, 1936’’ and substitute ‘‘chapter 535 of title 46 of the 

16 United States Code’’; 

17 (B) in subsections (a)(2) and (c)(1)(A) and (D), strike ‘‘section 

18 607 of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter 

19 535 of title 46, United States Code’’; and 

20 (C) in subsection (g)(3)(C)(iii), strike ‘‘Merchant Marine Act of 

21 1936’’ and substitute ‘‘Merchant Marine Act, 1936,’’. 

22 (f) TITLE 28.—Title 28, United States Code, is amended as follows: 

23 (1) In section 994(h)(1)(B) and (2)(B), strike ‘‘the Maritime Drug 

24 Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute 

25 ‘‘chapter 705 of title 46’’. 

26 (2) In section 1605(d), strike ‘‘the Ship Mortgage Act, 1920 (46 

27 U.S.C. 911 and following)’’ and ‘‘that Act’’ and substitute ‘‘section 

28 31301 of title 46’’ and ‘‘chapter 313 of title 46’’, respectively. 

29 (3) In section 2342(3)—

30 (A) in clause (A), strike ‘‘section 2, 9, 37, or 41 of the Shipping 

31 Act, 1916 (46 U.S.C. App. 802, 803, 808, 835, 839, and 841a)’’ 

32 and substitute ‘‘section 50501, 50502, 56102–56105, or 57109 of 

33 title 46’’; and 

34 (B) strike clause (B) and substitute the following: 

35 ‘‘(B) the Federal Maritime Commission issued pursuant to sec36 tion 305, 41304, 41308, or 41309 or chapter 421 or 441 of title 

37 46;’’. 

38 (4) In section 2680(d), strike ‘‘sections 741–752, 781–790 of Title 

39 46,’’ and substitute ‘‘chapter 309 or 311 of title 46’’. 

40 (g) TITLE 40.—Title 40, United States Code, is amended as follows: 
269 

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1 (1) In section 548, strike ‘‘the Merchant Marine Act, 1936 (46 App. 

2 U.S.C. 1101 et seq.),’’ and substitute ‘‘part F of subtitle V of title 46’’. 

3 (2) In section 3134(b), strike ‘‘the Merchant Marine Act, 1936 (46 

4 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘subtitle V of title 46’’. 

5 (h) TITLE 49.—Title 49, United States Code, is amended as follows: 

6 (1) In section 5122(c)(1), strike ‘‘Secretary of the Treasury’’ and 

7 ‘‘section 4197 of the Revised Statutes of the United States (46 App. 

8 U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland Security’’ and 

9 ‘‘section 60105 of title 46’’, respectively. 

10 (2) In section 5901(3)(B), strike ‘‘section 3 of the Shipping Act of 

11 1984 (46 App. U.S.C. 1702)’’ and substitute ‘‘section 40102 of title 

12 46’’. 

13 SEC. 16. LEGISLATIVE CONSTRUCTION AND TRANSITIONAL PROVI14 SIONS. 

15 (a) IN GENERAL.—The purpose of this Act is to complete the codification 

16 of title 46, United States Code, ‘‘Shipping’’, as positive law, in accordance 

17 with section 285b(1) of title 2, United States Code. 

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

19 encompassed by this Act, the intent is to conform to the understood policy, 

20 intent, and purpose of the Congress in the original enactments, with such 

21 amendments and corrections as will remove ambiguities, contradictions, and 

22 other imperfections both of substance and of form. 

23 (c) CUTOFF DATE.—This Act codifies certain laws enacted as of March 

24 31, 2004. Any law enacted after that date that is inconsistent with this Act, 

25 including any law purporting to amend or repeal a provision that is repealed 

26 by this Act, supersedes this Act to the extent of the inconsistency. 

27 (d) ORIGINAL DATE OF ENACTMENT UNCHANGED.—For purposes of de28 termining whether one provision of law supersedes another based on enact29 ment later in time, the date of enactment of a provision codified by this 

30 Act is deemed to remain unchanged, continuing to be the date of enactment 

31 of the underlying provision that is codified. 

32 (e) REFERENCES IN OTHER PROVISIONS.—A reference to a provision of 

33 law codified by this Act, including a reference in another law or in a rule, 

34 regulation, or order, is deemed to refer to the corresponding provision en35 acted by this Act. 

36 (f) SAVINGS PROVISIONS.— 

37 (1) RULES, REGULATIONS, AND ORDERS.—A rule, regulation, or 

38 order in effect under a provision of law codified by this Act continues 

39 in effect under the corresponding provision enacted by this Act. 

40 (2) ACTIONS TAKEN AND OFFENSES COMMITTED.—An action taken 

41 or an offense committed under a provision of law codified by this Act 
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1 is deemed to have been taken or committed under the corresponding 

2 provision enacted by this Act.

3 SEC. 17. REPEALS. 

4 The following laws are repealed, except with respect to rights and duties 

5 that matured, penalties that were incurred, or proceedings that were begun 

6 before the date of enactment of this Act:

Revised Statutes 

Revised Statutes Section 

United States Code 

Title Section 

2792 ............................................................................ 46 App. 124

4136 ............................................................................ 46 App. 14

4173 ............................................................................ 46 App. 42

4184 ............................................................................ 46 App. 57

4188 ............................................................................ 46 App. 59

4197 ............................................................................ 46 App. 91

4202 ............................................................................ 46 App. 97

4204 ............................................................................ 46 App. 98

4206 ............................................................................ 46 App. 100

4219 ............................................................................ 46 App. 121

4220 ............................................................................ 46 App. 122

4221 ............................................................................ 46 App. 125

4225 ............................................................................ 46 App. 128

4226 ............................................................................ 46 App. 129

4227 ............................................................................ 46 App. 135

4228 ............................................................................ 46 App. 141

4238 ............................................................................ 46 App. 721

4239 ............................................................................ 46 App. 722

4240 ............................................................................ 46 App. 723

4241 ............................................................................ 46 App. 724

4281 ............................................................................ 46 App. 181

4282 ............................................................................ 46 App. 182

4283 ............................................................................ 46 App. 183

4283A .......................................................................... 46 App. 183b 

4283B .......................................................................... 46 App. 183c 

4284 ............................................................................ 46 App. 184

4285 ............................................................................ 46 App. 185

4286 ............................................................................ 46 App. 186

4287 ............................................................................ 46 App. 187

4289 ............................................................................ 46 App. 188

4309 ............................................................................ 46 App. 354

4310 ............................................................................ 46 App. 355

4311 ............................................................................ 46 App. 251

4320 ............................................................................ 46 App. 262

4336 ............................................................................ 46 App. 277

4370 ............................................................................ 46 App. 316

4373 ............................................................................ 46 App. 321

4374 ............................................................................ 46 App. 322

4375 ............................................................................ 46 App. 323

4376 ............................................................................ 46 App. 324

4378 ............................................................................ 46 App. 326

4379 ............................................................................ 46 App. 327

4380 ............................................................................ 46 App. 328

4493 ............................................................................ 46 App. 491

Statutes at Large 

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

1874

Apr. 18 110 ............................................................... 18 31 ................. 336

1878

June 19 324............................................................... 20 175 ............... 725

1884

June 26 121 14......................................................... 23 57 ................. 121

18 ......................................................... 23 57 ................. 189

July 5 221 3 ........................................................... 23 119 ............... 3

8(c) ....................................................... ........ ...................... 9

1886

June 19 421 8 ........................................................... 24 81 ................. 289

9 ........................................................... 2481 ................. 320

17 ......................................................... 2482 ................. 142

1887

Mar. 3 339 ............................................................... 24 475 ............... 143
271

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Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

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 ........................................................... 34204............... 292

1908

Mar. 2496 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. 4153 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
272

•HR 4319 IH 

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

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 § 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
273

•HR 4319 IH 

Statutes at Large—Continued

Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

211 ....................................................... 49 1989 ............. 1121

212 ....................................................... 49 1990 ............. 1122

212(A) .................................................. ........ ...................... 1122a 

212(B) .................................................. ........ ...................... 1122b 

213 ....................................................... 49 1991 ............. 1123

214....................................................... 49 1991 ............. 1124

215 ....................................................... ........ ...................... 1125

302 ....................................................... ........ ...................... 1132

508 ....................................................... 49 2000 ............. 1158

510 ....................................................... ........ ...................... 1160

511 (added by Act Oct. 10, 1940) ....... ........ ...................... 1161

607 ....................................................... 49 2005 ............. 1177

701 ....................................................... 49 2008 ............. 1191

702 ....................................................... 49 2008 ............. 1192

703 ....................................................... 49 2008 ............. 1193

704....................................................... 49 2008 ............. 1194

705 ....................................................... 49 2009 ............. 1195

706 ....................................................... 49 2009 ............. 1196

707 ....................................................... 49 2009 ............. 1197

708 ....................................................... 49 2009 ............. 1198

709 ....................................................... 49 2010 ............. 1199

710 ....................................................... 49 2010 ............. 1200

711 ....................................................... 49 2010 ............. 1201

712 ....................................................... 49 2010 ............. 1202

713 ....................................................... 49 2010 ............. 1203

714....................................................... 49 2011 ............. 1204

715 ....................................................... ........ ...................... 1205

805 ....................................................... 49 2012 ............. 1223

806(b)–(d) ............................................ 49 2014 ............. 1228

808 ....................................................... 49 2015 ............. 1226

809(b) ................................................... ........ ...................... 1213

810 ....................................................... 49 2015 ............. 1227

901 ....................................................... 49 2015 ............. 1241

901a ...................................................... ........ ...................... 1241e 

901b ..................................................... ........ ...................... 1241f 

901c ...................................................... ........ ...................... 1241g 

901d ..................................................... ........ ...................... 1241h 

901e ...................................................... ........ ...................... 1241i 

901f ...................................................... ........ ...................... 1241j 

901g ..................................................... ........ ...................... 1241k 

901h ..................................................... ........ ...................... 1241l 

901i ...................................................... ........ ...................... 1241m 

901j ...................................................... ........ ...................... 1241n 

901k ..................................................... ........ ...................... 1241o 

902 ....................................................... 49 2015 ............. 1242

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
274

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Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

1941

Feb. 6 5 4........................................................... 55 6 ................... 1125a

1947

Mar. 22 20 proviso under heading ‘‘Independent 

Offices’’.

61 18 ................. 1116a

1948

June 19 526 ............................................................... 62 496 ............... 740

June 30 775 101 (last proviso on p. 1199) .............. 62 1199 ............. 864a

1949

June 29 281 1 (proviso) ............................................ 63 349 ............... 864b

1950

Dec. 27 1155 1, 2 ....................................................... 641120 ............. 3 nt prec.

1951

June 2 121 pars. under heading ‘‘Vessel Operations Revolving Fund’’.65 59 ................. 1241a

Nov. 1 664par. under heading ‘‘War-Risk Insurance Revolving Fund’’.65 746 ............... 1288a

1956

June 20 415 101 (par. beginning with ‘‘Vessel operations revolving fund’’).70 319 ............... 1241b, 

1241b nt

July 14600 2 ........................................................... 70 544............... 883a 

3 ........................................................... 70 544 ............... 883b

Aug. 1 846 ............................................................... 70 897 ............... 1241c

1957

June 13 85–52 101 (1st proviso on p. 73) ................... 71 73 ................. 1177a

1958

June 25 85–469 101 (par. under heading ‘‘Federal Ship 

Mortgage Insurance Fund’’).

72 231 ............... 1280

1960

June 12 86–518 9 ........................................................... 74217 ............... 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 1494–361 603 ....................................................... 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 ........................................................... 941159 ............. 1901

2 ........................................................... 941160 ............. 1902

3 ........................................................... 941160 ............. 1903

4........................................................... 94 1160 ............. 1904

Oct. 6 96–382 1 ........................................................... 941525 ............. 763a

Oct. 7 96–387 5 ........................................................... 941546 ............. 1121–1

1981

Aug. 6 97–31 2 ........................................................... 95 151 ............... 1601

3 ........................................................... 95 151 ............... 1602
275

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Public Law Section 

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(46 App. unless otherwise 

specified) 

Volume Page 

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. under heading 

‘‘Ocean Freight Differential’’)].

101 1329, ............

1329–27 .......

1241h nt 

101(a) [title V (4th proviso on p. 

1329-28)].

101 1329, ............

1329–28 .......

1295c–1

1988

May 30 100–3241 ........................................................... 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. 28 101–6241521 ..................................................... 1043665 ............. 1241q 

1522 ..................................................... 1043665 ............. 1241r 

1523 ..................................................... 1043666 ............. 1241s 

1524..................................................... 104 3667 ............. 1241t 

1526 ..................................................... 1043668 ............. 1241u 

1527 ..................................................... 1043668 ............. 1241v

1993

Nov. 30 103–160 1358 ..................................................... 107 1816 ............. 1280a
276

•HR 4319 IH 

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Date Chapter or 

Public Law Section 

Statutes at Large U.S. Code

(46 App. unless otherwise 

specified) 

Volume Page 

1996

Oct. 19 104–324 1117 ..................................................... 110 3973 ............. 46 U.S.C. 

12101 nt 

1120(f) ................................................. 110 3978 ............. 883 nt

1998

Oct. 14105–258 401 ....................................................... 112 1916 ............. 1273a

Oct. 21 105–277 203(b)–(e) ............................................ 112 2681–619 ..... 46 U.S.C. 

12102 nt

Nov. 13 105–383 502–504 ............................................... 112 3445 ............. 46 U.S.C. 

12106 nt

2000

Oct. 30 106–398 1 [§ 3506] ............................................. 1141654, ............

1654A–494 ...

1118 nt

2002

Nov. 25 107–295 403 ....................................................... 116 2114 ............. 46 U.S.C. 

12119 nt 

404 ....................................................... 116 2114 ............. 316a

2003

Nov. 24108–136 3527 ..................................................... 117 1802 ............. 1280b 

Reorganization Plans 

Year Plan No. Section 

Statutes at Large 

Volume Page 

1949 6 ............... ............................................................................. 63 1069

1950 21 ............. 201, 203, 204..................................................... 64 1276

1961 7 ............... 101–105, 201, 301, 302 ..................................... 75 840, 842

Æ