I

103D CONGRESS

1ST SESSION H. R. 2151

To amend the Merchant Marine Act, 1936, to establish the Maritime Security

Fleet program, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 19, 1993

Mr. STUDDS (for himself, Mr. LIPINSKI, Mr. FIELDS of Texas, Mr. BATEMAN,

Mr. YOUNG of Alaska, Mr. HUGHES, Mr. HUTTO, Mr. TAUZIN, Mr.

ORTIZ, Mr. MANTON, Mr. PICKETT, Mrs. UNSOELD, Mr. REED, Mr.

LANCASTER, Mr. ANDREWS of Maine, Ms. FURSE, Ms. SCHENK, Mr.

GENE GREEN of Texas, Mr. HASTINGS, Mr. BARLOW, Mr. THOMPSON of

Mississippi, Mr. ACKERMAN, Mr. KING, and Mrs. BENTLEY) introduced

the following bill; which was referred to the Committee on Merchant Marine and Fisheries

A BILL

To amend the Merchant Marine Act, 1936, to establish the

Maritime Security Fleet program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Maritime Security and

5 Competitiveness Act of 1993’’.
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1 SEC. 2. PURPOSE OF THE MERCHANT MARINE ACT, 1936.

2 Section 101 of the Merchant Marine Act, 1936 (46

3 App. U.S.C. 1101) is amended to read as follows:

4 ‘‘SEC. 101. FOSTERING DEVELOPMENT AND MAINTENANCE

5 OF MERCHANT MARINE.

6 ‘‘The Secretary of Transportation shall carry out this

7 Act in a manner that ensures the existence of an operating

8 fleet of United States documented vessels that is—

9 ‘‘(1) sufficient to carry the domestic water10 borne commerce of the United States and a substan11 tial portion of the water-borne export and import

12 foreign commerce of the United States and to pro13 vide shipping service essential for maintaining the

14 flow of such domestic and foreign water-borne com15 merce at all times;

16 ‘‘(2) adequate to serve as a naval auxiliary in

17 time of war or national emergency;

18 ‘‘(3) owned and operated by citizens of the

19 United States, to the extent practicable;

20 ‘‘(4) composed of the best-equipped, safest, and

21 most modern vessels;

22 ‘‘(5) manned with the best trained and efficient

23 personnel who are citizens of the United States; and

24 ‘‘(6) supplemented by modern and efficient

25 United States facilities for shipbuilding and ship re26 pair.’’.
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1 SEC. 3. MARITIME SECURITY FLEET PROGRAM.

2 (a) ESTABLISHMENT OF PROGRAM.—The Merchant

3 Marine Act, 1936 (46 App. U.S.C. 1101 et seq.) is amend4 ed by inserting after title III the following new title:

5 ‘‘TITLE IV—MARITIME SECURITY

6 FLEET PROGRAM

7 ‘‘SEC. 401. ESTABLISHMENT OF MARITIME SECURITY

8 FLEET.

9 ‘‘The Secretary of Transportation shall establish a

10 fleet of active commercial vessels to enhance sealift capa11 bilities and maintain a presence in international commer12 cial shipping of United States documented vessels. The

13 fleet shall be known as the ‘Maritime Security Fleet’.

14 ‘‘SEC. 402. COMPOSITION OF FLEET.

15 ‘‘The Fleet shall consist of privately owned United

16 States documented vessels for which there are in effect

17 operating agreements.

18 ‘‘SEC. 403. VESSELS ELIGIBLE FOR ENROLLMENT IN FLEET.

19 ‘‘(a) IN GENERAL.—A vessel is eligible to be enrolled

20 in the Fleet if the Secretary decides, in accordance with

21 this section, that it is eligible. The Secretary may decide

22 whether a vessel is eligible to be enrolled in the Fleet only

23 pursuant to an eligibility decision application submitted to

24 the Secretary by the owner or operator of the vessel. The

25 Secretary shall make such a decision by not later than

26 90 days after the date of submittal of an eligibility deci-
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1 sion application for the vessel by the owner or operator

2 of the vessel.

3 ‘‘(b) VESSEL ELIGIBILITY AND LISTING.—The Sec4 retary shall decide that a vessel is eligible to be enrolled

5 in the Fleet if—

6 ‘‘(1) the person that will be the contractor with

7 respect to an operating agreement for the vessel

8 agrees to enter into an operating agreement with the

9 Secretary for the vessel under section 404;

10 ‘‘(2) the vessel is not built in a foreign sub11 sidized shipyard under a contract entered into on or

12 after May 19, 1993;

13 ‘‘(3) the person that will be a contractor with

14 respect to an operating agreement for the vessel is

15 a citizen of the United States;

16 ‘‘(4)(A) the vessel is a United States docu17 mented vessel on May 19, 1993;

18 ‘‘(B) the vessel is—

19 ‘‘(i) a United States documented vessel

20 after May 19, 1993; and

21 ‘‘(ii) not more than 10 years of age on the

22 date of that documentation; or

23 ‘‘(C) if the vessel is not in existence on that

24 date—
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1 ‘‘(i) the person that will be the contractor

2 with respect to an operating agreement for the

3 vessel has entered into a binding contract with

4 a shipyard for the delivery of a vessel that the

5 Secretary decides will otherwise be eligible

6 under this subsection; and

7 ‘‘(ii) an operating agreement for the vessel

8 is entered into by not later than 30 months

9 after the date of submittal of the application;

10 and

11 ‘‘(5) the vessel is self-propelled and is—

12 ‘‘(A) a container vessel with a capacity of

13 at least 750 Twenty-foot Equivalent Units;

14 ‘‘(B) a roll-on/roll-off vessel with a carry15 ing capacity of at least 10,000 square feet or

16 500 Twenty-foot Equivalent Units;

17 ‘‘(C) a LASH vessel with a barge capacity

18 of at least 75 barges;

19 ‘‘(D) a vessel subject to a contract under

20 title VI on May 19, 1993; or

21 ‘‘(E) any other type of vessel that is suit22 able for use by the United States for national

23 defense or military purposes in time of war or

24 national emergency.

25 ‘‘(c) NOTICE OF NONELIGIBILITY DECISION.—
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1 ‘‘(1) DETERMINATION.—The Secretary shall

2 make determinations under subsection (b) for each

3 vessel for which an eligibility decision application is

4 submitted under this section.

5 ‘‘(2) WRITTEN EXPLANATION.—The Secretary

6 shall provide to the person that submits an eligibility

7 application for a vessel a written explanation of any

8 decision that the vessel is not eligible for enrollment

9 in the Fleet.

10 ‘‘(d) LIST OF ELIGIBLE VESSELS.—

11 ‘‘(1) IN GENERAL.—The Secretary shall main12 tain a list of vessels that the Secretary decides in ac13 cordance with this section are eligible to be enrolled

14 in the Fleet.

15 ‘‘(2) REMOVAL OF VESSELS FROM LIST.—The

16 Secretary shall remove a vessel from the list main17 tained under this subsection, and the vessel shall not

18 be an eligible vessel for purposes of this title—

19 ‘‘(A) at any time that the conditions for

20 eligibility under subsection (b) are not fulfilled

21 for the vessel; or

22 ‘‘(B) if the status of the person who sub23 mitted an eligibility decision application for the

24 vessel, as owner or operator of the vessel,

25 changes and after that change—
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1 ‘‘(i) the owner or operator of the ves2 sel fails to submit a new eligibility decision

3 application for the vessel; or

4 ‘‘(ii) such an application is not ap5 proved by the Secretary.

6 ‘‘SEC. 404. OPERATING AGREEMENTS, GENERALLY.

7 ‘‘(a) REQUIREMENT FOR ENROLLMENT OF VES8 SELS.—A vessel may be enrolled in the Fleet only if it

9 is an eligible vessel for which the owner or operator of

10 the vessel applies for and enters into an operating agree11 ment with the Secretary under this section.

12 ‘‘(b) PRIORITY FOR AWARDING AGREEMENTS.—The

13 Secretary shall enter into operating agreements according

14 to the following priority:

15 ‘‘(1) VESSELS UNDER ODS CONTRACTS.—For

16 operating agreements that are effective before Sep17 tember 30, 2000, any vessel that is or will be owned

18 or operated by a person that—

19 ‘‘(A) is a party to an operating-differential

20 subsidy contract entered into under title VI;

21 and

22 ‘‘(B) is or will be operating that vessel

23 under that contract;
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1 if the authority to operate the vessel under the con2 tract is terminated under an agreement with the

3 Secretary.

4 ‘‘(2) OTHER VESSELS OWNED BY CITIZENS.—

5 To the extent that amounts are available after ap6 plying paragraph (1), any vessel that is—

7 ‘‘(A) owned and operated by a person that

8 is a citizen of the United States under section

9 2 of the Shipping Act, 1916; and

10 ‘‘(B) on the list maintained under section

11 403(d).

12 ‘‘(3) OTHER VESSELS.—To the extent that

13 amounts are available after applying paragraphs (1)

14 and (2), any vessel that is—

15 ‘‘(A) owned and operated by a person that

16 is eligible to document a vessel under chapter

17 121 of title 46, United States Code; and

18 ‘‘(B) on the list maintained under section

19 403(d).

20 ‘‘(c) PROHIBITION ON ENTERING AGREEMENTS.—

21 The Secretary may not enter into an operating agreement

22 for a fiscal year only to the extent that annual appropria23 tions laws place a limit on the total amount of operating

24 agreements that the Secretary may enter into and obligate

25 during that fiscal year.
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1 ‘‘(d) PROHIBITION ON VESSEL COVERAGE.—A vessel

2 may not be covered by an operating agreement if the vessel

3 is covered by an operation-differential subsidy contract

4 under title VI.

5 ‘‘(e) TIME LIMIT FOR DECISION ON ENTERING OP6 ERATING AGREEMENT.—To the extent that the Secretary

7 is not restricted from entering into contracts under sub8 section (c), the Secretary shall enter an operating agree9 ment for a vessel within 90 days after making the decision

10 that the vessel is eligible to be enrolled in the Fleet under

11 section 403(a).

12 ‘‘(f) EFFECTIVE DATE OF OPERATING AGREE13 MENT.—Except as provided in section 3(b) of the Mari14 time Security and Competitiveness Act of 1993, the effec15 tive date of an operating agreement may not be later than

16 the later of—

17 ‘‘(1) 30 days after the date the agreement is

18 entered; or

19 ‘‘(2) the date the vessel covered by the agree20 ment enters into the trade required under section

21 405(a)(1)(A).

22 ‘‘(g) EXPIRATION OF OFFERS FOR AGREEMENTS.—

23 Unless extended by the Secretary, an offer by the Sec24 retary to enter into an operating agreement under this

25 section expires 120 days after the date of the offer.
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1 ‘‘(h) LENGTH OF AGREEMENTS.—An operating

2 agreement is effective for 10 years from the effective date

3 of the agreement.

4 ‘‘(i) TERMINATION OF AGREEMENT FOR FAILURE TO

5 PLACE VESSEL.—An operating agreement entered into by

6 the Secretary pursuant to subsection (b)(1), and the rights

7 under that agreement, are terminated at the end of the

8 90-day period beginning on the date the agreement is en9 tered into unless a vessel from the list maintained under

10 section 403(d) is covered by the agreement before the end

11 of that period.

12 ‘‘(j) REPAYMENT REQUIREMENTS.—

13 ‘‘(1) NONCOMPLIANCE.—A contractor that fails

14 to comply with the terms of an operating agreement

15 shall be liable to the United States Government for

16 all amounts received by the contractor as payments

17 for the vessel under this title with respect to the pe18 riod of that noncompliance.

19 ‘‘(2) FAILURE TO OPERATE REPLACEMENT VES20 SEL.—A contractor under an operating agreement

21 that covers a vessel that is 25 or more years of age

22 and that fails to replace the vessel as provided in

23 section 405(a)(3) (A) or (B) shall be liable to the

24 United States Government for all amounts received

25 by the contractor as payments for the vessel under
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1 this title with respect to periods after the date the

2 vessel becomes 25 years of age.

3 ‘‘(k) BINDING OBLIGATION OF GOVERNMENT.—An

4 operating agreement constitutes a contractual obligation

5 of the United States Government to pay the amounts pro6 vided for under that agreement.

7 ‘‘SEC. 405. TERMS OF OPERATING AGREEMENTS.

8 ‘‘(a) OPERATING AGREEMENT REQUIREMENTS.—An

9 operating agreement shall, during the effective period of

10 the agreement, provide the following:

11 ‘‘(1) OPERATION AND DOCUMENTATION.—The

12 vessel covered by the operating agreement—

13 ‘‘(A) shall be operated in the foreign trade

14 or domestic trade allowed under a registry en15 dorsement for the vessel issued under section

16 12105 of title 46, United States Code;

17 ‘‘(B) may not be operated in the coastwise

18 trade of the United States or in mixed coast19 wise and foreign trade, except for coastwise

20 trade allowed under a registry endorsement is21 sued for the vessel under section 12105 of title

22 46, United States Code; and

23 ‘‘(C) shall be documented under chapter

24 121 of title 46, United States Code.
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1 ‘‘(2) ANNUAL PAYMENTS.—The Secretary shall

2 pay the contractor, in accordance with this sub3 section, the following amounts for each fiscal year in

4 which the vessel is operated in accordance with the

5 agreement:

6 ‘‘(A) For fiscal year 1996, $2,300,000.

7 ‘‘(B) For each fiscal year after fiscal year

8 1996, $2,100,000.

9 ‘‘(3) TERMINATION BASED ON AGE OF VES10 SEL.—The operating agreement shall terminate on

11 the date the vessel covered by the agreement is 25

12 years of age, unless—

13 ‘‘(A) the contractor agrees to acquire a re14 placement for the vessel from among vessels on

15 the list maintained under section 403(d); and

16 ‘‘(B)(i) in the case of a vessel to be re17 placed with a new vessel, the contractor enters

18 into a binding contract with a shipyard for the

19 delivery, by not later than 30 months after the

20 later of the date the operating agreement is en21 tered into or the date the vessel subject to the

22 operating agreement is 25 years of age, of the

23 replacement vessel; or

24 ‘‘(ii) in the case of a vessel to be replaced

25 with an existing vessel, the contractor acquires
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1 the replacement vessel from among vessels on

2 the list maintained under section 403(d), by not

3 later than 12 months after the later of the date

4 the operating agreement is entered into or the

5 date the vessel subject to the operating agree6 ment is 25 years of age.

7 ‘‘(4) AVAILABILITY OF VESSEL.—

8 ‘‘(A) IN GENERAL.—On a request of the

9 President during time of war or national emer10 gency or when considered by the President, act11 ing through the Secretary in consultation with

12 the Secretary of Defense, to be necessary in the

13 interest of national security, and subject to sub14 paragraph (B), the contractor as soon as prac15 ticable shall, as specified by the Secretary—

16 ‘‘(i) make the vessel covered by the

17 agreement available to the Secretary under

18 a time charter; or

19 ‘‘(ii) provide space on the vessel cov20 ered by the agreement to the Secretary on

21 a guaranteed basis.

22 ‘‘(B) CONDITION FOR CHARTER.—The

23 Secretary shall allow a contractor to comply

24 with this paragraph by providing space on a

25 vessel under subparagraph (A)(ii) unless the
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1 Secretary determines that it is necessary in the

2 interest of national security that the contractor

3 make the vessel available under a time charter.

4 ‘‘(5) DELIVERY OF VESSEL.—The contractor

5 shall deliver a vessel to the Secretary pursuant to a

6 time charter under paragraph (4)(A)(i), as specified

7 in the request for the vessel—

8 ‘‘(A) at the first port in the United States

9 the vessel is scheduled to call after the date of

10 receipt of the request;

11 ‘‘(B) at the port in the United States to

12 which the vessel is nearest on the date of re13 ceipt of the request; or

14 ‘‘(C) in any other reasonable manner au15 thorized by the agreement and specified in the

16 request.

17 ‘‘(6) DELIVERY COSTS.—The Secretary shall re18 imburse the contractor for costs incurred by the con19 tractor in delivering the vessel covered by the agree20 ment to the Secretary in accordance with the agree21 ment.

22 ‘‘(7) COMPENSATION.—The Secretary shall pay

23 the contractor, as provided in the operating agree24 ment, reasonable compensation at reasonable com25 mercial rates for the period of time the vessel is
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1 chartered or the contractor provides space on the

2 vessel under paragraph (4).

3 ‘‘(8) REQUIRED OPERATION.—

4 ‘‘(A) IN GENERAL.—A vessel covered by

5 the operating agreement shall be operated in

6 the trade required under paragraph (1) for at

7 least 320 days in a fiscal year, including days

8 during which the vessel is dry-docked, surveyed,

9 inspected, or repaired.

10 ‘‘(B) REDUCTION IN PAYMENTS.—If a ves11 sel operates in the trade required under para12 graph (1) for less than the time required under

13 subparagraph (A), the payments required under

14 paragraph (2) shall be reduced on a pro-rata

15 basis to reflect the lesser time in that operation.

16 ‘‘(9) SUBSTITUTION OF VESSELS AUTHOR17 IZED.—The contractor may substitute for the vessel

18 covered by the agreement another vessel on the list

19 maintained under section 403(d).

20 ‘‘(10) TERMINATION FOR FAILURE TO OPERATE

21 OR SUBSTITUTE.—The operating agreement is ter22 minated if—

23 ‘‘(A) the vessel covered by the agreement is

24 not operated under an operating agreement for

25 one year; and
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1 ‘‘(B) a substitute for that vessel is not op2 erated under the agreement during that year.

3 ‘‘(b) PAYMENTS.—

4 ‘‘(1) IN GENERAL.—The amount required to be

5 paid by the Secretary each year to a contractor

6 under an operating agreement pursuant to sub7 section (a)(2)—

8 ‘‘(A) shall be paid at a pro rated amount

9 at the beginning of each month in equal install10 ments; and

11 ‘‘(B) except as provided in paragraph (2),

12 may not be reduced by reason of operation of

13 the vessel covered by the agreement to carry ci14 vilian or military preference cargoes under—

15 ‘‘(i) section 901(a), 901(b), or 901b;

16 ‘‘(ii) section 2631 of title 10, United

17 States Code; or

18 ‘‘(iii) the Act of March 26, 1934 (48

19 Stat. 500).

20 ‘‘(2) REDUCTION FOR PREFERENCE CARGO.—A

21 contractor with respect to a vessel may not receive

22 any payment under this title for any day in which

23 the vessel is engaged in transporting more than

24 5,000 tons of preference cargo described in para-
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1 graph (1)(B) that is bulk cargo (as defined in sec2 tion 3 of the Shipping Act of 1984).

3 ‘‘(c) REDELIVERY OF VESSELS.—The Secretary

4 shall, upon the termination of the need for which a vessel

5 is delivered under an operating agreement, return the ves6 sel to the contractor—

7 ‘‘(1) at a place that is mutually agreed upon by

8 the Secretary of Defense and the contractor; and

9 ‘‘(2) in the condition in which it was delivered

10 to the Secretary, excluding normal wear and tear.

11 ‘‘(d) TRANSFER OF OPERATING AGREEMENTS.—A

12 contractor under an operating agreement may transfer the

13 agreement (including all rights under the agreement) to

14 any other person that is a citizen of the United States,

15 after notification of the Secretary in accordance with regu16 lations prescribed by the Secretary. A person to whom an

17 agreement is transferred may receive payments from the

18 Secretary under the agreement only if the vessel to be cov19 ered by the agreement after the transfer is on the list

20 maintained under section 403(d).

21 ‘‘SEC. 406. NONCONTIGUOUS TRADE RESTRICTIONS.

22 ‘‘(a) PROHIBITION.—

23 ‘‘(1) IN GENERAL.—Except as provided in this

24 section, a contractor may not receive any payment

25 under this title if—
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1 ‘‘(A) the contractor or a related party with

2 respect to the contractor, directly or indirectly

3 owns, charters, or operates a vessel engaged in

4 the transportation of cargo in noncontiguous

5 trade, other than in accordance with a waiver

6 under subsection (b) or (c); or

7 ‘‘(B) for noncontiguous trade for which

8 there is a waiver under subsection (b) or (c),

9 there is a—

10 ‘‘(i) material change in the domestic

11 ports served from the ports permitted to be

12 served under the waiver;

13 ‘‘(ii) material increase in the annual

14 number or the frequency of sailings from

15 the number or frequency permitted under

16 the waiver; or

17 ‘‘(iii) material increase in the annual

18 volume of cargo carried or annual capacity

19 utilized from the annual volume of cargo

20 or annual capacity permitted under the

21 waiver.

22 ‘‘(2) LIMITATIONS ON PROHIBITION.—Para23 graph (1) applies to a contractor only in the years

24 specified for payments under the operating agree25 ment entered into by the contractor.
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1 ‘‘(b) GENERAL WAIVER AUTHORITY.—

2 ‘‘(1) IN GENERAL.—Except as provided in sub3 section (c), the Secretary shall waive, in writing, the

4 application of subsection (a) to a contractor pursu5 ant to an application submitted in accordance with

6 this subsection, unless the Secretary finds that—

7 ‘‘(A) the waiver would result in unfair

8 competition to any person that operates vessels

9 as a carrier of cargo in a service exclusively in

10 the noncontiguous trade for which the waiver is

11 applied;

12 ‘‘(B) existing service in that noncontiguous

13 trade is adequate; or

14 ‘‘(C) the waiver will result in prejudice to

15 the objects or policy of this title or Act.

16 ‘‘(2) TERMS OF WAIVER.—Any waiver granted

17 by the Secretary under this subsection shall state—

18 ‘‘(A) the domestic ports permitted to be

19 served;

20 ‘‘(B) the annual number or frequency of

21 sailings that may be provided; and

22 ‘‘(C)(i) the annual volume of cargo per23 mitted,

24 ‘‘(ii) for containerized or trailer service, the

25 annual 40-foot equivalent unit shipboard con-
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1 tainer and trailer or vehicle or general cargo ca2 pacity permitted, or

3 ‘‘(iii) for tug and barge service, the annual

4 barge house cubic foot capacity and the annual

5 barge deck general cargo capacity, or 40-foot

6 equivalent unit container, trailer, or vehicle ca7 pacity, permitted.

8 ‘‘(3) APPLICATIONS FOR WAIVERS.—An appli9 cation for a waiver under this subsection may be

10 submitted by a contractor and shall describe, as ap11 plicable, the nature and scope of—

12 ‘‘(A) the service proposed to be conducted

13 in a noncontiguous trade under the waiver; or

14 ‘‘(B) any proposed material change or in15 crease in a service in a noncontiguous trade

16 permitted under an existing waiver.

17 ‘‘(4) ACTION ON APPLICATION AND HEARING.—

18 ‘‘(A) NOTICE AND PROCEEDING.—Within

19 30 days after receipt of an application for a

20 waiver under this subsection, the Secretary

21 shall—

22 ‘‘(i) publish a notice of the applica23 tion; and
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1 ‘‘(ii) begin a proceeding on the appli2 cation under section 554 of title 5, United

3 States Code, to receive—

4 ‘‘(I) evidence of the nature,

5 quantity, and quality of the existing

6 service in the noncontiguous trade for

7 which the waiver is applied;

8 ‘‘(II) a description of the pro9 posed service or proposed material

10 change or increase in a previously per11 mitted service;

12 ‘‘(III) the projected effect of the

13 proposed service or proposed material

14 change or increase in existing service;

15 and

16 ‘‘(IV) recommendations on condi17 tions that should be contained in any

18 waiver for the proposed service or ma19 terial change or increase.

20 ‘‘(B) INTERVENTION.—An applicant for a

21 waiver under this subsection, and any person

22 that operates cargo vessels in the noncontiguous

23 trade for which a waiver is applied and that has

24 any interest in the application, may intervene in

25 the proceedings on the application.
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1 ‘‘(C) HEARING.—Before deciding whether

2 to grant a waiver under this subsection, the

3 Secretary shall hold a public hearing in an ex4 peditious manner, reasonable notice of which

5 shall be published.

6 ‘‘(5) DECISION.—The Secretary shall complete

7 all proceedings and hearings on an application under

8 this subsection and issue a decision on the record

9 within 90 days after receipt of the final briefs sub10 mitted for the record.

11 ‘‘(c) EXISTING NONCONTIGUOUS TRADE OPERA12 TORS.—

13 ‘‘(1) IN GENERAL.—The Secretary shall waive

14 the application of subsection (a) to a contractor pur15 suant to an application submitted in accordance with

16 this subsection if the Secretary finds that the con17 tractor, or a related party or predecessor in interest

18 with respect to the contractor—

19 ‘‘(A) engaged in bona fide operation of a

20 vessel as a carrier of cargo by water—

21 ‘‘(i) in a noncontiguous trade on July

22 1, 1992; or

23 ‘‘(ii) in furnishing seasonal service in

24 a season ordinarily covered by its oper-
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1 ation, during the 12 calendar months pre2 ceding July 1, 1992; and

3 ‘‘(B) has operated in that service since

4 that time, except for interruptions of service re5 sulting from Operation Desert Storm or over

6 which the contractor (or related party or prede7 cessor in interest) had no control.

8 ‘‘(2) TERMS OF WAIVER.—

9 ‘‘(A) IN GENERAL.—Except as otherwise

10 provided in this paragraph, the level of service

11 permitted under a waiver under this subsection

12 shall be the level of service provided by the ap13 plicant (or related party or predecessor in inter14 est) in the relevant noncontiguous trade during,

15 for year-round service, the 6 calendar months

16 preceding July 1, 1992, or for seasonal service,

17 the 12 calendar months preceding July 1, 1992,

18 determined by—

19 ‘‘(i) the domestic ports called;

20 ‘‘(ii) the number of sailings actually

21 made, except as to interruptions in the

22 service in the noncontiguous trade result23 ing from Operation Desert Storm or over

24 which the applicant (or related party or
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1 predecessor in interest) had no control;

2 and

3 ‘‘(iii) the volume of cargo carried or,

4 for containerized or trailer service, the 40-

5 foot equivalent unit shipboard container,

6 trailer, or vehicle or general cargo capacity

7 employed, or, for tug and barge service,

8 the barge house cubic foot capacity and

9 barge deck general cargo capacity or 40-

10 foot equivalent unit container, trailer, or

11 vehicle capacity, employed.

12 ‘‘(B) CERTAIN CONTAINERIZED VES13 SELS.—If an applicant under this subsection

14 was offering service as an operator of container15 ized vessels in noncontiguous trades with Ha16 waii, Puerto Rico, and Alaska on July 1, 1992,

17 a waiver under this subsection shall permit the

18 applicant to conduct—

19 ‘‘(i) 104 sailings each year from the

20 West Coast of the United States to Hawaii

21 with an annual capacity allocated to the

22 service of 75 percent of the total capacity

23 of the vessels employed in the service on

24 July 1, 1992;
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1 ‘‘(ii) 156 sailings each year in each di2 rection between the East Coast or Gulf

3 Coast of the United States and Puerto

4 Rico with an annual capacity allocated to

5 the service of 75 percent of the total ca6 pacity of its vessels employed in the service

7 on July 1, 1992; and

8 ‘‘(iii) 103 sailings each year in each

9 direction between Washington and Alaska

10 with an annual capacity allocated to the

11 service in each direction of 100 percent of

12 the total capacity of its vessels employed in

13 the service on July 1, 1992.

14 ‘‘(C) CERTAIN TUGS AND BARGES.—If an

15 applicant under this subsection was offering

16 service as an operator of tugs and barges in

17 noncontiguous trades with Hawaii, Puerto Rico,

18 and Alaska on July 1, 1992, a waiver under

19 this subsection shall permit the applicant to

20 conduct—

21 ‘‘(i) 17 sailings each year in each di22 rection between ports in Washington, Or23 egon, and Northern California and ports in

24 Hawaii with an annual barge house cubic

25 foot capacity and annual barge deck 40-
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1 foot equivalent unit container capacity in

2 each direction of 100 percent of the total

3 of the capacity of its vessels employed in

4 the service during the 6 calendar months

5 preceding July 1, 1992, annualized;

6 ‘‘(ii) 253 sailings each year in each di7 rection between the East Coast or Gulf

8 Coast of the United States and Puerto

9 Rico with an annual 40-foot equivalent

10 unit container or trailer capacity equal to

11 100 percent of the capacity of its barges

12 employed in the service on July 1, 1992;

13 ‘‘(iii) 37 regularly scheduled tandem

14 tow rail barge sailings and 10 additional

15 single tow sailings each year in each direc16 tion between Washington and the Alaskan

17 port range between and including Anchor18 age and Whittier with an annual capacity

19 allocated to the service in each direction of

20 100 percent of the total rail car capacity of

21 its vessels employed in the service on July

22 1, 1992;

23 ‘‘(iv) 8 regularly scheduled single tow

24 sailings each year in each direction be25 tween Washington and points in Alaska
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1 (not including the port range between and

2 including Anchorage and Whittier, except

3 occasional deviations to discharge inciden4 tal quantities of cargo) with an annual ca5 pacity allocated to the service in each di6 rection of 100 percent of the total capacity

7 of its vessels employed in the service on

8 July 1, 1992; and

9 ‘‘(v) unscheduled, contract carrier tug

10 and barge service between points in Alaska

11 not served by the common carrier service

12 permitted under clause (iii) or (iv) and

13 points in Washington, with an annual ca14 pacity allocated to that service not exceed15 ing 100 percent of the highest total capac16 ity of the equipment that was employed in

17 that service in any year after 1979.

18 ‘‘(D) ANNUALIZATION.—Capacity other19 wise required by this paragraph to be permitted

20 under a waiver under this subsection shall be

21 annualized if not a seasonal service.

22 ‘‘(E) ADJUSTMENTS.—

23 ‘‘(i) IN GENERAL.—The annual capac24 ity permitted under a waiver under this

25 subsection shall be adjusted for each cal-
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1 endar year to reflect changes in the total

2 volume of trade on the noncontiguous

3 trade route for which the waiver is issued.

4 Such an adjustment may not be considered

5 to be a material change or increase in serv6 ice under the waiver for purposes sub7 section (b)(3)(B).

8 ‘‘(ii) LIMITATION.—An increase in ca9 pacity under this subparagraph shall apply

10 only to the extent the contractor actually

11 uses the increased capacity to carry cargo

12 in the permitted service in the calendar

13 year immediately following the preceding

14 increase in gross product. However, if a

15 contractor operating exclusively container16 ized vessels in that trade on July 1, 1992,

17 carries an average load factor of at least

18 90 percent of permitted capacity (including

19 the capacity, if any, both authorized and

20 used under the previous sentence) during 9

21 months of any one calendar year, then in

22 the next following calendar year and there23 after, the requirement that additional ca24 pacity shall be used in the immediately fol25 lowing year does not apply.
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1 ‘‘(3) APPLICATIONS FOR WAIVERS.—For a

2 waiver under this subsection a contractor shall sub3 mit to the Secretary an application certifying the

4 facts required to be found under paragraph (1) (A)

5 or (B), as applicable.

6 ‘‘(4) ACTION ON APPLICATION.—

7 ‘‘(A) NOTICE.—The Secretary shall pub8 lish a notice of receipt of an application for a

9 waiver under this subsection within 30 days

10 after receiving the application.

11 ‘‘(B) HEARING PROHIBITED.—The Sec12 retary may not conduct a hearing on an appli13 cation for a waiver under this subsection.

14 ‘‘(C) SUBMISSION OF COMMENTS.—The

15 Secretary shall give every person operating a

16 cargo vessel in a noncontiguous trade for which

17 a waiver is applied for under this subsection

18 and who has any interest in the application a

19 reasonable opportunity to submit comments on

20 the application and on the description of the

21 service that would be permitted by any waiver

22 that is granted by the Secretary under the ap23 plication.

24 ‘‘(5) DECISION ON APPLICATION.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), the Secretary shall complete

3 all proceedings on an application under this

4 subsection and issue a decision on the record

5 within 180 days after receipt of the application.

6 ‘‘(B) EXPEDITED CONSIDERATION.—Sub7 ject to the time required for publication of no8 tice and for receipt and evaluation of comments

9 by the Secretary, an application for a waiver

10 under this subsection submitted at the same

11 time the applicant applies for inclusion of a ves12 sel in the Fleet shall be granted in accordance

13 with the level of service determined by the Sec14 retary under this subsection by not later than

15 the date on which the Secretary offers to the

16 applicant an operating agreement with respect

17 to that vessel.

18 ‘‘(6) CHANGE OR INCREASE IN SERVICE.—Any

19 material change or increase in a service that is sub20 ject to a waiver under this subsection is not author21 ize except to the extent the change or increase is

22 permitted by a waiver under subsection (b).

23 ‘‘(d) ANNUAL REPORT ON WAIVERS.—Each waiver

24 under this section shall require the person who is granted

25 the waiver to submit to the Secretary each year an annual
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1 report setting forth for the service authorized by the waiv2 er—

3 ‘‘(1) the ports served during the year;

4 ‘‘(2) the number or frequency of sailings per5 formed during the year; and

6 ‘‘(3) the volume of cargo carried or, for contain7 erized or trailer service, the annual 40-foot equiva8 lent unit shipboard container, trailer, or vehicle ca9 pacity utilized during the year, or for tug and barge

10 service, the annual barge house and barge deck ca11 pacity utilized during the year.

12 ‘‘(e) DEFINITIONS.—In this section—

13 ‘‘(1) the term ‘noncontiguous trade’ means

14 trade between—

15 ‘‘(A) the contiguous 48 States; and

16 ‘‘(B) Alaska, Hawaii, or Puerto Rico; and

17 ‘‘(2) the term ‘related party’ means—

18 ‘‘(A) a holding company, subsidiary, affili19 ate, or associate of a contractor; and

20 ‘‘(B) an officer, director, agency, or other

21 executive of a contractor or of a person referred

22 to in subparagraph (A).
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1 ‘‘SEC. 407. FUNDING FOR CONTINGENCY RETAINER FLEET

2 OPERATING AGREEMENTS.

3 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There

4 are authorized to be appropriated to the Secretary any

5 amounts necessary to liquidate obligations under operat6 ing agreements.

7 ‘‘(b) TRANSFER OF BALANCES FROM OPERATING8 DIFFERENTIAL SUBSIDY PROGRAM.—Any amounts other9 wise available for operating differential subsidy contracts

10 under title VI that are no longer required for those con11 tracts are available, until expended, for operating agree12 ments.

13 ‘‘SEC. 408. DEFINITIONS.

14 ‘‘In this title:

15 ‘‘(1) CONTRACTOR.—The term ‘contractor’

16 means an owner or operator of a vessel that enters

17 into an operating agreement for the vessel with the

18 Secretary.

19 ‘‘(2) ELIGIBILITY DECISION APPLICATION.—

20 The term ‘eligibility decision application’ means an

21 application for a decision by the Secretary under

22 section 403 that a vessel is eligible to be enrolled in

23 the Fleet.

24 ‘‘(3) ELIGIBLE VESSEL.—The term ‘eligible ves25 sel’ means a vessel that the Secretary decides under

26 section 403 is eligible to be enrolled in the Fleet.
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1 ‘‘(4) FLEET.—The term ‘Fleet’ means the Con2 tingency Retainer Fleet established under section

3 402.

4 ‘‘(5) FLEET OPERATOR.—The term ‘Fleet Op5 erator’ means a person that is a party to an operat6 ing agreement with the Secretary in effect under

7 this title.

8 ‘‘(6) OPERATING AGREEMENT.—The term ‘op9 erating agreement’ means an operating agreement

10 entered into by the Secretary under section 404.

11 ‘‘(7) SECRETARY.—The term ‘Secretary’ means

12 the Secretary of Transportation.

13 ‘‘(8) UNITED STATES DOCUMENTED VESSEL.—

14 The term ‘United States documented vessel’ means

15 a vessel that is documented under chapter 121 of

16 title 46, United States Code.’’.

17 (b) LIMITATION ON ENTERING AND EFFECTIVENESS

18 OF AGREEMENTS.—The Secretary of Transportation may

19 not enter into an operating agreement under title IV of

20 the Merchant Marine Act, 1936, as amended by this Act,

21 before October 1, 1994. Any operating agreement entered

22 into under that title between October 1, 1994, and Sep23 tember 30, 1995, may not be effective until October 1,

24 1995.
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1 (c) LIMITATION ON PAYMENTS.—Notwithstanding

2 section 405(a)(2) of the Merchant Marine Act, 1936, as

3 amended by this Act, or the terms of any operating agree4 ment (as that term is used in that section), the United

5 States Government is not obligated to pay, and the Sec6 retary of Transportation may not pay, any amount pursu7 ant to that section for any day in which a vessel that is

8 covered by an operating agreement is under a charter to

9 the United States Government that was entered into be10 fore the date of the enactment of this Act.

11 (d) LIMITATION ON OPERATING AGREEMENTS FOR

12 VESSELS CONSTRUCTED UNDER EXISTING FOREIGN

13 CONSTRUCTION CONTRACTS.—

14 (1) LIMITATION.—The Secretary of Transpor15 tation may decide that a vessel described in para16 graph (2) is eligible for an operating agreement

17 under title IV of the Merchant Marine Act, 1936, as

18 amended by this Act, only if—

19 (A) the contract under which the vessel is

20 constructed is, on and after May 19, 1993,

21 binding on the person that submits an eligibility

22 application under that title for the vessel;

23 (B) construction of the vessel is begun be24 fore January 1, 1994; and
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1 (C) the vessel is a United States docu2 mented vessel (as that term is defined in that

3 title) before November 19, 1995.

4 (2) VESSEL DESCRIBED.—A vessel referred to

5 in paragraph (1) is a vessel—

6 (A) that is constructed in a foreign country

7 under a contract that is entered into before

8 May 19, 1993; and

9 (B) the construction of which is not com10 pleted before that date.

11 SEC. 4. OPERATING-DIFFERENTIAL SUBSIDY CONTRACTS.

12 (a) PROHIBITION ON NEW CONTRACTS.—Section

13 601 of the Merchant Marine Act, 1936 (46 App. U.S.C.

14 1171) is amended by adding at the end the following:

15 ‘‘(c) After the effective date of this subsection, the

16 Secretary of Transportation may not enter into any new

17 contract under this title.’’.

18 (b) TERMINATION OF EXISTING CONTRACTS.—Not19 withstanding any other provision of this Act, any contract

20 in effect under title VI of the Merchant Marine Act, 1936

21 (46 App. U.S.C. 1171 et seq.), on the day before the date

22 of enactment of this Act shall continue in effect under its

23 terms and terminate as set forth in the contract, unless

24 voluntarily terminated on an earlier date by the persons
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1 (other than the United States Government) that are par2 ties to the contract.

3 (c) EXEMPTION OF BULK CARGO ODS VESSELS

4 FROM OPERATING RESTRICTIONS.—Section 506 of the

5 Merchant Marine Act, 1936 (46 App. U.S.C. 1156) is

6 amended—

7 (1) by inserting ‘‘(a)’’ after ‘‘SEC. 506.’’; and

8 (2) by adding at the end the following new sub9 section:

10 ‘‘(b) This section does not apply to any liquid or dry

11 bulk cargo vessel for which operating-differential subsidy

12 is required to be paid under a contract under title VI that

13 is in force on the effective date of this subsection, effective

14 upon the termination date of the contract (as set forth

15 in the contract as in effect on the effective date of this

16 subsection).’’.

17 (d) RESTRICTIONS ON OPERATIONS OF ODS VES18 SELS.—Title VI of the Merchant Marine Act, 1936 (46

19 App. U.S.C. 1171 et seq.), as amended by this Act, is fur20 ther amended by adding at the end the following:

21 ‘‘SEC. 616. LIMITATION ON APPLICATION OF RESTRICTIONS

22 ON OPERATIONS.

23 ‘‘Sections 605(c), 804, and 805, this section, and the

24 essential service requirements in section 601(a) and

25 603(a), do not apply to a contractor if—
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1 ‘‘(1) the contractor submits an eligibility deci2 sion application to the Secretary under title IV for

3 all of the vessels operated by the contractor under

4 an operating-differential subsidy contract; and

5 ‘‘(2) all of those vessels for which operating

6 agreements are offered by the Secretary under title

7 IV are enrolled in the Maritime Security Fleet.’’.

8 (e) TERMINATION OF OPERATING DIFFERENTIAL

9 SUBSIDY FOR OLDER VESSELS.—Section 605(b) of the

10 Merchant Marine Act, 1936 (46 App. U.S.C. 1175(b)), is

11 amended by adding the following new sentence at the end

12 of the subsection: ‘‘After May 19, 1993, the Secretary of

13 Transportation may not enter any new formal order under

14 this subsection.’’.

15 SEC. 5. DEFINITIONS APPLICABLE TO MERCHANT MARINE

16 ACT, 1936.

17 Section 905 of the Merchant Marine Act, 1936 (46

18 App. U.S.C. 1244), is amended—

19 (1) by striking subsection (a) and inserting the

20 following:

21 ‘‘(a) Each of the terms ‘foreign commerce’ and ‘for22 eign trade’ mean—

23 ‘‘(1) trade between the United States and a for24 eign country; or

25 ‘‘(2) trade between foreign ports.’’;
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1 (2) by striking subsection (c) and inserting the

2 following:

3 ‘‘(c) The term ‘citizen of the United States’ means

4 a person eligible to own a documented vessel under chap5 ter 121 of title 46, United States Code.’’, and

6 (3) by adding at the end the following:

7 ‘‘(h) The term ‘foreign subsidized shipyard’ means a

8 shipyard that—

9 ‘‘(1) receives or benefits from, directly or indi10 rectly, a shipyard subsidy for the construction of

11 vessels; and

12 ‘‘(2) is located in a foreign country that has not

13 signed a trade agreement with the United States

14 that provides for the elimination of subsidies for

15 that shipyard.

16 ‘‘(i) The term ‘subsidy’ includes any of the following:

17 ‘‘(A) Officially supported export credits and de18 velopment assistance.

19 ‘‘(B) Direct official operating support to the

20 commercial shipbuilding and repair industry, or to a

21 related entity that favors the operation of shipbuild22 ing and repair, including—

23 ‘‘(i) grants;

24 ‘‘(ii) loans and loan guarantees other than

25 those available on the commercial market;
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1 ‘‘(iii) forgiveness of debt;

2 ‘‘(iv) equity infusions on terms inconsistent

3 with commercially reasonable investment prac4 tices;

5 ‘‘(v) preferential provision of goods and

6 services; and

7 ‘‘(vi) public sector ownership of commercial

8 shipyards on terms inconsistent with commer9 cially reasonable investment practices.

10 ‘‘(C) Direct official support for investment in

11 the commercial shipbuilding and repair industry, or

12 to a related entity that favors the operation of ship13 building and repair, including the kinds of support

14 listed in clauses (i) through (v) of subparagraph (B),

15 and any restructuring support, except public support

16 for social purposes directly and effectively linked to

17 shipyard closures.

18 ‘‘(D) Assistance in the form of grants, pref19 erential loans, preferential tax treatment, or other20 wise, that benefits or is directly related to shipbuild21 ing and repair for purposes of research and develop22 ment that is not equally open to domestic and for23 eign enterprises.

24 ‘‘(E) Tax policies and practices that favor the

25 shipbuilding and repair industry, directly or indi-
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1 rectly, such as tax credits, deductions, exemptions

2 and preferences, including accelerated depreciation,

3 if the benefits are not generally available to persons

4 or firms not engaged in shipbuilding or repair.

5 ‘‘(F) Any official regulation or practice that au6 thorizes or encourages persons or firms engaged in

7 shipbuilding or repair to enter into anticompetitive

8 arrangements.

9 ‘‘(G) Any indirect support directly related, in

10 law or in fact, to shipbuilding and repair at national

11 yards, including any public assistance favoring ship12 owners with an indirect effect on shipbuilding or re13 pair activities, and any assistance provided to suppli14 ers of significant inputs to shipbuilding, which re15 sults in benefits to domestic shipbuilders.

16 ‘‘(H) Any export subsidy identified in the Illus17 trative List of Export Subsidies in the Annex to the

18 Agreement on Interpretation and Application of Ar19 ticles VI, XVI, and XXIII of the General Agreement

20 on Tariffs and Trade or any other export subsidy

21 that may be prohibited as a result of the Uruguay

22 Round of trade negotiations.’’.
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1 SEC. 6. GOVERNMENT-IMPELLED CARGOES.

2 (a) VESSELS ELIGIBLE FOR CARGOES.—Section

3 901(b) of the Merchant Marine Act, 1936 (46 App. U.S.C.

4 1241(b)) is amended—

5 (1) in paragraph (1), by striking ‘‘For purposes

6 of this section, the term ‘privately owned United

7 States-flag commercial vessels’ ’’ and all that follows

8 through the end of the paragraph and inserting a

9 period; and

10 (2) by adding at the end the following new

11 paragraph:

12 ‘‘(3) In this section and section 901b, the term ‘pri13 vately owned United States-flag commercial vessel’ means

14 a privately owned vessel that is documented under chapter

15 121 of title 46, United States Code, that—

16 ‘‘(A) was built in the United States;

17 ‘‘(B) was documented under chapter 121 of

18 title 46, United States Code, before May 19, 1993;

19 ‘‘(C) does not transport under section 901b or

20 this section on any voyage more than 5,000 tons of

21 bulk cargo (as defined in section 3 of the Shipping

22 Act of 1984), and—

23 ‘‘(i) was built in a foreign shipyard under

24 a contract entered into before May 19, 1993; or

25 ‘‘(ii) is built under a contract entered into

26 after that date, in a foreign shipyard that on
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1 the date the contract is entered is not a foreign

2 subsidized shipyard;

3 ‘‘(D)(i) is built under a contract entered into

4 after May 19, 1993, in a foreign shipyard that on

5 the date the contract was entered is not a foreign

6 subsidized shipyard; and

7 ‘‘(ii) has not been documented in a foreign

8 country before it is documented under chapter 121

9 of title 46, United States Code; or

10 ‘‘(E) has been documented under chapter 121

11 of title 46, United States Code, for at least 3 con12 secutive years, and—

13 ‘‘(i) was built in a foreign shipyard under

14 a contract entered into before May 19, 1993; or

15 ‘‘(ii) is built under a contract entered into

16 after that date, in a foreign shipyard that on

17 the date the contract was entered is not a for18 eign subsidized shipyard.’’.

19 (b) CLERICAL AMENDMENT.—Section 901b of the

20 Merchant Marine Act, 1936 (46 App. U.S.C. 1241f) is

21 amended by adding at the end the following:

22 ‘‘(f) For the definition of the term ‘privately owned

23 United States-flag commercial vessel’, see section

24 901(b)(3).’’.
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1 SEC. 7. VESSEL FINANCING.

2 (a) ELIMINATION OF MORTGAGEE RESTRICTIONS.—

3 Section 31322(a) of title 46, United States Code, is

4 amended to read as follows:

5 ‘‘(a) A preferred mortgage is a mortgage, whenever

6 made, that—

7 ‘‘(1) includes the whole of the vessel;

8 ‘‘(2) is filed in substantial compliance with sec9 tion 31321 of this title; and

10 ‘‘(3)(A) covers a documented vessel; or

11 ‘‘(B) covers a vessel for which an application

12 for documentation is filed that is in substantial com13 pliance with the requirements of chapter 121 of this

14 title and the regulations prescribed under that chap15 ter.’’.

16 (b) ELIMINATION OF TRUSTEE RESTRICTIONS.—

17 (1) REPEAL.—Section 31328 of title 46, United

18 States Code, is repealed.

19 (2) CONFORMING AMENDMENT.—Section

20 31330(b) of title 46, United States Code, is amend21 ed in paragraphs (1), (2), and (3) by striking

22 ‘‘31328 or’’ each place it appears.

23 (c) REMOVAL OF MORTGAGE RESTRICTIONS.—Sec24 tion 9 of the Shipping Act, 1916 (46 App. U.S.C. 808),

25 as amended by this Act, is further amended—

26 (1) in subsection (c)—
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1 (A) by striking ‘‘and sections

2 31322(a)(1)(D) and 31328 of title 46, United

3 States Code,’’; and

4 (B) in paragraph (1) by striking ‘‘mort5 gage,’’ each place it appears; and

6 (2) in subsection (d)—

7 (A) in paragraph (1) by striking ‘‘transfer,

8 or mortgage’’ and inserting ‘‘or transfer’’;

9 (B) in paragraph (2) by striking ‘‘trans10 fers, or mortgages’’ and inserting ‘‘or trans11 fers’’;

12 (C) in paragraph (3)(B) by striking

13 ‘‘transfers, or mortgages’’ and inserting ‘‘or

14 transfers’’; and

15 (D) in paragraph (4) by striking ‘‘trans16 fers, or mortgages’’ and inserting ‘‘or trans17 fers’’;

18 SEC. 8. PLACEMENT OF VESSELS UNDER FOREIGN REG19 ISTRY.

20 (a) IN GENERAL.—Section 9 of the Shipping Act,

21 1916 (46 App. U.S.C. 808), as amended by this Act, is

22 further amended by adding at the end the following:

23 ‘‘(e) Notwithstanding subsection (c)(2), the Merchant

24 Marine Act, 1936, or any contract entered into with the

25 Secretary under that Act, the Secretary of Transportation
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1 shall allow a documented vessel to be placed under a for2 eign registry if at least one replacement vessel of a capac3 ity that is equivalent or greater, as measured by dead4 weight tons, gross tons, or container equivalent units, as

5 appropriate, is documented under chapter 121 of title 46,

6 United States Code, by the owner of the vessel placed

7 under foreign registry.’’.

8 (b) APPLICATION.—The amendment made by sub9 section (a) applies to vessels that are placed under foreign

10 registry after the date of enactment of this Act and re11 placement vessels documented in the United States after

12 that date.

13 SEC. 9. EFFECTIVE DATE.

14 The amendments made by this Act are effective on

15 the date which is 120 days after the date of enactment

16 of this Act.

17 SEC. 10. REGULATIONS.

18 (a) IN GENERAL.—The Secretary of Transportation

19 shall prescribe regulations as necessary to carry out this

20 Act.

21 (b) INTERIM REGULATIONS.—The Secretary of

22 Transportation may prescribe interim regulations nec23 essary to carry out this Act and for accepting eligibility

24 decision applications under section 403 of the Merchant

25 Marine Act, 1936, as amended by this Act. For this pur-
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1 pose, the Secretary of Transportation is excepted from

2 compliance with the notice and comment requirements of

3 section 553 of title 5, United States Code. All regulations

4 prescribed under the authority of this subsection that are

5 not earlier superseded by final rules shall expire 270 days

6 after the date of enactment of this Act.

7 SEC. 11. EXPANSION OF STANDING FOR MARITIME UNIONS.

8 Section 301 of the Merchant Marine Act, 1936 (46

9 App. U.S.C. 1131) is amended by adding at the end the

10 following:

11 ‘‘(c) STANDING FOR MARITIME UNION REPRESENTA12 TIVES.—The duly-elected representative of any organiza13 tion that is certified by the Secretary of Labor as the prop14 er collective bargaining agency for officers or crew em15 ployed on any type of United States documented vessel

16 is an interested party in, and has standing to challenge,

17 any proposed or final order, action, or rule of the Sec18 retary of Transportation under this Act.’’.

19 SEC. 12. STUDY.

20 (a) IN GENERAL.—After providing public notice and

21 opportunity for comment, the Secretary of Transportation

22 shall conduct a study of—

23 (1) the impact of this Act on the international

24 competitiveness of United States documented vessels

25 and whether this Act has had a favorable or unfa-
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1 vorable impact on the ability of United States docu2 mented vessels to compete successfully with foreign3 flag vessels;

4 (2) whether continuation of the Maritime Secu5 rity Fleet program established by this Act would as6 sist the international competitiveness of United

7 States documented vessels;

8 (3) whether the Maritime Security Fleet pro9 gram should be continued, modified, or discontinued;

10 (4) alternatives that are or should be available

11 to operators of United States documented vessels if

12 the Maritime Security Fleet program is discon13 tinued; and

14 (5) any other issues related to promoting the

15 international competitiveness of United States docu16 mented vessels that the Secretary considers appro17 priate.

18 (b) REPORT.—The Secretary of Transportation shall

19 submit to the Congress a report on the findings and con20 clusions of the study required by subsection (a) by not

21 later than 4 years after the date of enactment of this Act,

22 which shall include such recommendations as the Sec23 retary considers appropriate.

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