188 
‘‘(1) IN
GENERAL.—In addition to the requirement under section 
55305 of this title for the transportation of a percentage of gross tonnage 
on commercial vessels of the United States, 25 percent of the gross ton-
nage of agricultural commodities or their products specified in subsection 
(b) shall be transported each calendar year on commercial vessels of the 
United States that— 
‘‘(A) are necessary for national security; and 
‘‘(B) if more than 25 years old, were rebuilt within the last 5 
years and certified by the Secretary of Transportation as having a 
useful life of at least 5 years after that rebuilding. 
‘‘(2) CALENDAR YEAR.—To provide for effective and equitable admin-
istration of the cargo preference laws, the calendar year for the purpose 
of compliance with minimum percentage requirements is the 12-month 
period beginning October 1 of each year. 
‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to export activ-
ity (except inspection or weighing activities, other activities carried out for 
health or safety, or technical assistance provided in the handling of commer-
cial transactions) of the Secretary of Agriculture or the Commodity Credit 
Corporation— 
‘‘(1) carried out under the Agricultural Trade Development and As-
sistance Act of 1954 (7 U.S.C. 1691 et seq.); 
‘‘(2) carried out under section 416 of the Agricultural Act of 1949 (7 
U.S.C. 1431); 
‘‘(3) carried out under the Bill Emerson Humanitarian Trust Act (7 
U.S.C. 1736f–1); 
‘‘(4) under which agricultural commodities or their products are— 
‘‘(A) donated through foreign governments or private or public 
agencies, including intergovernmental organizations; or 
‘‘(B) sold for foreign currencies or for dollars on credit terms of 
more than 10 years; 
‘‘(5) under which agricultural commodities or their products are made 
available for emergency food relief at less than prevailing world market 
prices; 
‘‘(6) under which a cash grant is made directly or through an inter-
mediary to a foreign purchaser to enable the purchaser to obtain United 
States agricultural commodities or their products in an amount greater 
than the difference between the prevailing world market price and the 
United States market price, free along side vessel at a United States 
port; or 
‘‘(7) under which agricultural commodities owned or controlled by or 
under loan from the Corporation are exchanged or bartered for materials,
189 
goods, equipment, or services produced in foreign countries, except export 
activities described in section 55313(5) of this title. 
‘‘(c) ADDITIONAL REQUIREMENTS.— 
‘‘(1) APPLICATION OF SECTION 55305.—The requirement for transpor-
tation on vessels of the United States under subsection (a) is subject to 
the same terms and conditions as provided in section 55305 of this title. 
‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph (3), in 
carrying out this section and section 55305 of this title, the Corporation 
shall take steps necessary and practicable, and consistent with this sec-
tion and section 55305, without detriment to any port range to allocate, 
on the principle of lowest landed cost without regard to the country of 
registry of the vessel, 25 percent of the bagged, processed, or fortified com-
modities provided under title II of the Agricultural Trade Development 
and Assistance Act of 1954 (7 U.S.C. 1721 et seq.). 
‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first there shall 
be calculated the allocation of 100 percent of the quantity to be procured 
on an overall lowest landed cost basis without regard to the country of 
registry of the vessel, and then there shall be allocated to the Great Lakes 
port range any cargoes for which it has the lowest landed cost under that 
calculation. The requirements for transportation on vessels of the United 
States under this section and section 55305 of this title do not apply to 
commodities allocated to the Great Lakes port range under paragraph 
(2). Commodities allocated to the Great Lakes port range under para-
graph (2) may not be reallocated or diverted to another port range to 
meet those requirements to the extent that the total tonnage of commod-
ities to which paragraph (2) applies that is furnished and transported 
from the Great Lakes port range is less than 25 percent of the total an-
nual tonnage of the commodities furnished. 
‘‘(4) AWARDING CONTRACTS.—In awarding a contract for the trans-
portation by vessel of commodities from the Great Lakes port range pur-
suant to an export activity referred to in subsection (b), an agency— 
‘‘(A) shall consider expressions of freight interest for any vessel 
from a vessel operator who meets reasonable requirements for finan-
cial and operational integrity; and 
‘‘(B) may not deny award of the contract to a person based on 
the type of vessel on which the transportation would be provided 
(including on the basis that the transportation would not be pro-
vided on a liner vessel, as that term is used in the Shipping Act 
of 1984, as in effect on November 14, 1995), if the person otherwise 
satisfies reasonable requirements for financial and operational in-
tegrity.
190 
‘‘(5) NONAVAILABILITY OF VESSELS.—A determination of nonavail-
ability of vessels of the United States resulting from the application of 
this subsection may not reduce the gross tonnage of commodities required 
by this section and section 55305 of this title to be transported on vessels 
of the United States. 
‘‘§ 55315. Minimum tonnage 
‘‘(a) DEFINITION.—In this section, the term ‘base period’ means the 5-year 
period running from the sixth through the second prior fiscal years. 
‘‘(b) REQUIREMENT.—For each fiscal year, the minimum quantity of agri-
cultural commodities to be exported under programs subject to section 55314 
of this title is the average of the tonnage exported under those programs dur-
ing the base period, discarding the high and low years. 
‘‘(c) WAIVERS.—The President may waive the minimum quantity for a fis-
cal year under this section if the President determines and reports to Con-
gress, together with reasons, that the quantity cannot be used effectively for 
the purposes of those programs or, based on a certification by the Secretary 
of Agriculture, that the commodities are not available for reasons that include 
the unavailability of funds. 
‘‘§ 55316. Financing the transportation of agricultural com-
modities 
‘‘(a) FINANCING OF INCREASED CHARGES.—The Secretary of Transpor-
tation shall finance any increased ocean freight charges incurred in any fiscal 
year that result from the application of section 55314 of this title. 
‘‘(b) REIMBURSEMENT OF INCREASED CHARGES.— 
‘‘(1) IN GENERAL.—The Secretary of Transportation shall reimburse 
the Secretary of Agriculture and the Commodity Credit Corporation for 
the amount by which, in any fiscal year— 
‘‘(A) the total cost of ocean freight and ocean freight differential 
for which obligations are incurred by the Secretary of Agriculture 
and the Corporation on exports of agricultural commodities and 
their products under the agricultural export programs specified in 
section 55314(b) of this title; exceeds 
‘‘(B) 20 percent of the value of the commodities and their prod-
ucts and the cost of the ocean freight and ocean freight differential 
on which obligations are incurred by the Secretary of Agriculture 
and the Corporation during that fiscal year. 
‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes of this 
subsection, commodities shipped from the inventory of the Corporation 
shall be valued as provided in section 412(d) of the Agricultural Trade 
Development and Assistance Act of 1954 (7 U.S.C. 1736f(d)). 
‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.—
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‘‘(1) ISSUANCE.—To meet the expenses required to be assumed under 
subsections (a) and (b), the Secretary of Transportation shall issue obli-
gations to the Secretary of the Treasury. The Secretary of Transpor-
tation, with the approval of the Secretary of the Treasury, shall prescribe 
the form, denomination, maturity, and other terms (except the interest 
rate) of the obligations. The Secretary of the Treasury shall set the inter-
est rate for the obligations, considering the average market yield on out-
standing marketable obligations of the United States Government of com-
parable maturities during the month before the obligations are issued. 
‘‘(2) PURCHASE.—The Secretary of the Treasury shall purchase the ob-
ligations issued under this subsection. To purchase the obligations, the 
Secretary of the Treasury may use as a public debt transaction the pro-
ceeds from the sale of securities issued under chapter 31 of title 31. The 
purposes for which securities may be issued under that chapter are ex-
tended to include the purchase of obligations under this subsection. A re-
demption or purchase of the obligations by the Secretary of the Treasury 
is a public debt transaction of the Government. 
‘‘(d) SOURCE OF FUNDS FOR REIMBURSEMENT.—Reimbursement of the 
Secretary of Transportation for costs incurred under this section shall be 
made with appropriated funds rather than through cancellation of notes. 
‘‘(e) APPROPRIATIONS.— 
‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized to be ap-
propriated an amount sufficient to reimburse the Secretary of Transpor-
tation for the costs incurred under this section, including administrative 
expenses and the principal and interest due on obligations issued to the 
Secretary of the Treasury. 
‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each fiscal 
year, such amounts as may be necessary are hereby appropriated to pay 
interest and to liquidate debt on obligations issued to the Secretary of 
the Treasury under this section. 
‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Secretary of 
Transportation is unable to obtain the funds necessary to finance the in-
creased ocean freight charges resulting from the requirements of subsections 
(a) and (b) and section 55314(a) of this title, the Secretary shall notify Con-
gress within 10 working days of the discovery of the insufficiency. 
‘‘§ 55317. Termination of subchapter 
‘‘This subchapter terminates 90 days after the date on which a notification 
is made under section 55316(f) of this title, except for shipments of agricul-
tural commodities and their products subject to contracts made before the end 
of that 90-day period, unless within that 90-day period the Secretary of 
Transportation proclaims that funds are available to finance increased freight