(1) The United States-flag merchant fleet,
which is the primary means of transporting vital
military and critical raw material cargo in the event
of national emergencies, the United States shipyard
industry, which designs and constructs all Navy ves-
sels and is a mobilization base in the event of na-
tional emergency, and domestic producers of marine
equipment, which are essential to the construction of
commercial and naval vessels, serve essential na-
tional security functions.
(2) The United States shipbuilding industry is
encumbered in the international ship construction
market by significant subsidies and anticompetitive
practices that impede the ability of United States
firms to compete on a fair and equitable basis.
(3) The United States shipbuilding industry en-
counters costs of production due to regulatory meas-
ures required by the United States that exceed the
standards imposed internationally.
(4) The United States-flag merchant fleet has
dwindled in size to the point that United States-flag
vessels now carry less than 4 percent of the ocean
borne trade of the United States.
(5) The United States shipyard industry cur-
rently has no orders for new construction of large
commercial vessels, several major shipyards are ex-
periencing severe financial conditions, and the indus-
try is laying-off thousands of employees.
(6) Skilled labor to crew the United States mer-
chant marine and to construct new vessels is at a
precariously low level.
(7) The United States-flag merchant fleet, the
United States shipyard industry, and the domestic
marine equipment suppliers, have decreased in size
to the point that the bulk sealift capability and ves-
sel construction and repair mobilization capacity of
the United States are dangerously inadequate.
(8) The United States shipbuilding industry, by
effectively transitioning from defense production to
global competitiveness, has the potential to become
an exporter of ships, thereby providing jobs, paying
taxes, and earning foreign exchange.
(9) The most equitable and cost-effective means
of promoting the United States-flag merchant fleet
and the United States shipyard industry is to re-
serve a certain portion of cargo imports for United
States-flag merchant vessels designed and built in
the United States.
(b) PURPOSE AND POLICY.—It is the purpose and
policy of the Congress in this Act—
(1) to take immediate and positive steps to pro-
mote the orderly and rapid re-growth of the United
States-flag merchant fleet to transport at least 30
percent of certain imports of the United States on
United States-flag vessels by January 1, 2000, to
ensure viable merchant marine and shipbuilding in-
dustries;
(2) to assist and cooperate with the importers
of designated commodities so that they will be able
to ship their imported goods in United States-flag
vessels in a commercially practicable manner;
(3) to encourage the design and construction by
the United States shipyard industry of new, efficient
merchant vessels;
(4) to require the maintenance and repair of
United States-flag vessels in United States shipyards
unless there is an emergency on a voyage;
(5) to eliminate foreign subsidies and anti-
competitive practices and make the United States
merchant marine and shipbuilding industries inter-
nationally competitive by the turn of the century;
(6) to preserve existing and create additional
essential skilled employment in the merchant marine
and shipbuilding industries and their supplier indus-
tries;
(7) to complement and support existing efforts
to preserve viable and healthy merchant marine and
shipbuilding industries for the benefit of the econ-
omy of the United States, the balance of payments
of the United States, and the national defense; and
(8) to preclude the monopolization of the ship-
ping industry by foreign-flag vessels.
SEC. 3. UNITED STATES-FLAG TRANSPORT OF CERTAIN IM-
PORTED CARGOES REQUIRED.
Section 901 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1241) is amended by adding at the end the
following new subsection:
‘‘(d) UNITED STATES-FLAG TRANSPORT OF CERTAIN
IMPORTED CARGOES REQUIRED.—
‘‘(1) UNITED
STATES-FLAG
TRANSPORT
RE-
QUIRED.—The Secretary shall issue regulations
that—
‘‘(A) ensure that of the total amount of oil
in bulk that is imported each year and that is
transported on seagoing vessels in the course of
that importation, and of the total amount of
motor vehicles that is imported each year that
is so transported, not less than the percentage
applicable under paragraph (2) is so trans-
ported only on vessels that are documented
under the laws of the United States and other-
wise are eligible vessels; and
‘‘(B) require that of the total amount of
each type of covered cargo that a person im-
ports in a year, not less than the percentage ap-
plicable for that year under paragraph (2) shall
be complying covered cargoes.
‘‘(2) MINIMUM PERCENTAGE APPLICABLE.—
‘‘(A) OIL IN BULK.—Except as otherwise
provided in this subsection, the percentage ap-
plicable under this paragraph to importation of
oil in bulk is as follows:
‘‘(i) In the case of oil in bulk trans-
ported in the course of that importation on
seagoing vessels of 200,000 deadweight
tons or greater—
‘‘(I) before 1997, 4 percent;
‘‘(II) in 1997, 8 percent;
‘‘(III) in 1998, 12 percent;
‘‘(IV) in 1999, 16 percent;
‘‘(V) in 2000, 20 percent;
‘‘(VI) in 2001, 25 percent; and
‘‘(VII) in each year after 2001,
30 percent.
‘‘(ii) In the case of oil in bulk trans-
ported in the course of that importation on
seagoing vessels of less than 200,000 dead-
weight tons—
‘‘(I) before 1998, 10 percent;
‘‘(II) in 1998, 15 percent;
‘‘(III) in 1999, 20 percent;
‘‘(IV) in 2000, 25 percent; and
‘‘(V) in each year after 2000, 30
percent.
‘‘(B) MOTOR VEHICLES.—Except as other-
wise provided in this paragraph or paragraph
(6), the percentage applicable under this para-
graph to importation of motor vehicles is—
‘‘(i) before 1995, 4 percent;
‘‘(ii) in 1995, 5 percent;
‘‘(iii) in 1996, 10 percent;
‘‘(iv) in 1997, 20 percent;
‘‘(v) in 1998, 30 percent;
‘‘(vi) in 1999, 40 percent; and
‘‘(vii) in each year after 1999, 50 per-
cent.
‘‘(C) REDUCTION
OF
PERCENTAGE
FOR
LACK OF AVAILABLE ELIGIBLE VESSELS.—
‘‘(i) IN
GENERAL.—The Secretary
may reduce a percentage otherwise applica-
ble in a year for a covered cargo under
subparagraph (A) or (B), if—
‘‘(I) the Secretary determines
that the number of eligible vessels (in-
cluding eligible vessels on order and
scheduled to be ready for commercial
service) that are available at fair and
reasonable rates to transport the
amount of the covered cargo expected
to be imported in that year is not ade-
quate to enable importers of the cov-
ered cargo to comply with the percent-
age otherwise applicable; and
‘‘(II) the percentage, as reduced,
will ensure, in the manner most equi-
table and commercially practicable for
all importers, the use of all eligible
vessels that the Secretary determines
are available to provide that trans-
port.
‘‘(ii) TERMINATION OF REDUCTION.—
Any reduction of a percentage under this
subparagraph shall not apply after the
number of eligible vessels that are available
at fair and reasonable rates to transport a
covered cargo is adequate to enable import-
ers of the covered cargo to comply with the
percentage otherwise applicable under sub-
paragraph (A) or (B).
‘‘(iii) DETERMINATION OF AVAILABLE
VESSELS REQUIRED.—Each year the Sec-
retary shall determine the number of eligi-
ble vessels that are available at fair and
reasonable rates to transport each type of
covered cargo.
‘‘(D) REDUCTION
OF
PERCENTAGE
FOR
NATIONAL
EMERGENCY.—The President may
reduce a percentage otherwise applicable in a
year under subparagraph (A) or (B), if the
President—
‘‘(i) determines that an emergency ex-
ists justifying the reduction to protect the
national interests of the United States;
and
‘‘(ii) issues a statement in writing of
the reasons for that determination.
‘‘(3) EXEMPTIONS.—The requirements under
this subsection shall not apply to—
‘‘(A) importation of oil in bulk by a person
in any year in which the total amount of oil in
bulk imported by the person—
‘‘(i) does not exceed an average daily
amount of 30,000 barrels per day, and
‘‘(ii) does not exceed the number of
barrels used by the person in that year; or
‘‘(B) importation of motor vehicles by a
person in any year in which the total number
of motor vehicles imported by the person does
not exceed a de minimis number of motor vehi-
cles determined by the Secretary that would not
have an impact on the implementation of this
subsection.
‘‘(4) TREATMENT OF RELATED PERSONS.—In
determining for purposes of paragraph (1) the
amount of a covered cargo imported by a person, the
Secretary shall include covered cargo that is im-
ported by any other person who controls, is con-
trolled by, or is under common control with, the per-
son with respect to whom the determination is made.
‘‘(5) ISSUANCE OF CREDITS AND USE IN LIEU
OF COMPLIANCE.—
‘‘(A) ESTABLISHMENT
OF
SYSTEM.—The
Secretary shall establish in regulations under
paragraph (1) a system under which—
‘‘(i) the Secretary shall issue credits
to a person for amounts of a complying
covered cargo that are imported by the
person in a year in excess of the applicable
percentage for the complying covered cargo
for the year under paragraph (2) and of
any amount the person is required to re-
port under paragraph 9(C);
‘‘(ii) those credits may be transferred
to another person; and
‘‘(iii) a person may redeem any of
those credits held by the person in lieu of
complying in that year with paragraphs
(1)(B) and (9)(C).
‘‘(B) IMPORTER
CERTIFICATION.—Each
person that imports a covered cargo in any year
after 1993 shall submit to the Secretary, before
the end of January of the following year, a
sworn statement certifying—
‘‘(i) the amount of each type of cov-
ered cargo that was imported by the per-
percentages otherwise applicable in the year
under paragraph (2).
‘‘(C) ASSURING PARTICIPATION OF EXIST-
ING ELIGIBLE VESSELS.—The Secretary shall
reduce applicable percentages pursuant to sub-
paragraph (B) in a manner that will reasonably
ensure that each eligible vessel constructed
under a contract entered into after the date of
the enactment of the Maritime Revitalization
Act of 1994 and before the date of the deter-
mination under subparagraph (A)(ii) pursuant
to which the reduction is made, will have the
opportunity to participate in the transportation
of covered cargoes for the lesser of the eco-
nomic life of the vessel or the 20-year period
beginning on the date of the completion of con-
struction of the vessel.
‘‘(D) 
REINSTATEMENT
OF
REQUIRE-
MENTS.—Notwithstanding any determination
by the Secretary under subparagraph (A)(ii)
that subsidies have been eliminated, if the Sec-
retary, in consultation with the United States
Trade Representative and the heads of other
Federal agencies, finds at any time that any of
the subsidies have been resumed, then—
‘‘(i) the Secretary shall reinstate the
requirements of this subsection; and
‘‘(ii) any reductions in percentages
otherwise applicable under paragraph (2)
that were made pursuant to the determina-
tion under subparagraph (A)(ii) of this
paragraph shall not apply.
‘‘(7) VESSEL FINANCING.—If the Secretary de-
termines that inadequate commercial financing ex-
ists to construct new vessels of a design appropriate
to meet the requirements of this subsection, the Sec-
retary may guarantee that financing under title XI.
‘‘(8) IMPLEMENTATION, GENERALLY.—
‘‘(A) ENSURING FAIR PARTICIPATION.—In
implementing this subsection, the Secretary
shall ensure fair and reasonable participation
by appropriate types and sizes of eligible ves-
sels, in the transportation of complying covered
cargoes from all geographic areas in which the
cargoes originate.
‘‘(B) ACTIONS BY OTHER AGENCIES.—The
head of each agency and each instrumentality
of the United States Government, and the offi-
cers and employees of those agencies and in-
strumentalities, shall take all appropriate ac-
tions to comply with, implement, and enforce
the requirements of this subsection.
‘‘(9) PENALTIES.—
‘‘(A) IMPOSITION
OF
CIVIL
PENALTY.—
Any person who is determined by the Secretary,
on the record after an opportunity for a hearing
in accordance with section 554 of title 5,
United States Code, to have violated this sub-
section or any regulation issued under this sub-
section, shall be liable to the United States for
a civil penalty assessed by the Secretary by
written notice, in an amount determined under
subparagraph (B).
‘‘(B) AMOUNT
OF
CIVIL
PENALTY.—The
amount of a civil penalty under subparagraph
(A) shall be the equal to—
‘‘(i) the amount of the economic bene-
fit the Secretary determines the person de-
rived from the activity constituting the vio-
lation; plus
‘‘(ii) 10 percent of that amount.
‘‘(C) INCREASE IN REQUIRED IMPORTS OF
COMPLYING COVERED CARGO.—If the Secretary
determines under this paragraph that the
amount of a type of complying covered cargo
that a person imported in a year was less than
the amount of that type of complying covered
cargo the person was required to import that
year under this subsection, the Secretary shall
require the person to—
‘‘(i) import in the year following the
year in which the determination is made
an amount of that type of complying cov-
ered cargo that is equal to the shortfall, in
addition to any amount of that type of
complying covered cargo the person is re-
quired to import to comply with this sub-
section; or
‘‘(ii) redeem credits equivalent to that
amount under the system established
under paragraph (5)(A).
‘‘(10) EFFICIENCY
REPORT.—The Secretary
shall report to the Congress in 1997 on—
‘‘(A) the progress made by the United
States shipbuilding and merchant marine indus-
tries in increasing the efficiency of the con-
struction and operation of documented vessels
and thereby achieving international competitive-
ness by 2001, through improvements in the cost
of—
‘‘(i) construction, including design;
‘‘(ii) equipment and materials; and
‘‘(iii) operations, including labor;
‘‘(B) the subsidies and anticompetitive
measures of foreign countries in their shipbuild-
ing and merchant marine industries; and
‘‘(C) the costs imposed on the shipbuilding
and merchant marine industries of the United
States due to regulatory measures of the
United States.
‘‘(11) ANNUAL
REPORT.—the Secretary shall
review, evaluate, and report annually to the Con-
gress and the President on the implementation of
this subsection, together with recommendations con-
cerning the requirements of this subsection.
‘‘(12) REGULATIONS.—
‘‘(A) ISSUANCE.—The Secretary of Trans-
portation shall issue regulations implementing
this subsection by not later than 6 months after
the date of the enactment of the Merchant Ma-
rine Revitalization Act of 1994.
‘‘(B) VESSEL AVAILABILITY AND RATES.—
Regulations issued under this paragraph shall
include regulations that establish a methodology
for determining the availability of United
States-flag vessels and that establish fair and
reasonable rates for those vessels. In promul-
gating those regulations, the Secretary shall
seek to develop a methodology which accounts
for variations in charter and vessel types, voy-
age lengths, and other characteristics which
may require special consideration (including
cost variations over time) and which affords
vessel operators a reasonable profit calculated
to promote continued acquisition of new vessels
from United States shipyards. The Secretary
shall publish on a regular and frequent basis
the rates developed under this section.
‘‘(13) DEFINITIONS.—In this subsection:
‘‘(A) COMPLYING COVERED CARGO.—The
term ‘complying covered cargo’ means a covered
cargo that is transported by seagoing vessel in
the course of importation (including transpor-
tation directly to the United States from the
original point of production, or indirectly from
that point through any intermediate point) only
on an eligible vessel.
‘‘(B) COVERED
CARGO.—The term ‘cov-
ered cargo’ means oil in bulk or a motor vehicle
that is—
‘‘(i) imported after the date of the en-
actment of the Maritime Revitalization Act
of 1994; and
‘‘(ii) transported in the course of that
importation (including transportation di-
rectly to the United States from the origi-
nal point of production, or indirectly from
that point through any intermediate point)
on a seagoing vessel;
‘‘(C) ELIGIBLE VESSEL.—The term ‘eligi-
ble vessel’ means a vessel—
‘‘(i) that is a documented vessel (as
that term is defined in section 2101 of title
46, United States Code);
‘‘(ii) that is a seagoing vessel designed
to transport oil in bulk or motor vehicles;
‘‘(iii) that is built in the United
States;
‘‘(iv) that is constructed from compo-
nents (including the hull, superstructure,
equipment, and materials) from domestic
sources, except that this clause does not
apply—
‘‘(I) with respect to any compo-
nent that is not available from 2 or