I
103D CONGRESS
2D SESSION
H. R. 4003
To authorize appropriations for fiscal year 1995 for certain maritime pro-
grams of the Department of Transportation, to amend the Merchant
Marine Act, 1936, as amended, to revitalize the United States-flag
merchant marine, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 10, 1994
Mr. STUDDS (for himself, Mr. FIELDS of Texas, Mr. LIPINSKI, and Mr. MAN-
TON) (all by request) introduced the following bill; which was referred to
the Committee on Merchant Marine and Fisheries
A BILL
To authorize appropriations for fiscal year 1995 for certain
maritime programs of the Department of Transportation,
to amend the Merchant Marine Act, 1936, as amended,
to revitalize the United States-flag merchant marine, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—MARITIME ADMINISTRATION
AUTHORIZATION OF APPROPRIATIONS
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Maritime Administra-
tion Authorization Act for Fiscal Year 1995’’.
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SEC. 102. AUTHORIZATION OF APPROPRIATIONS FOR FIS-
CAL YEAR 1995.
Funds are authorized to be appropriated without fis-
cal year limitation, as Appropriations Acts may provide
for the use of the Department of Transportation, for the
fiscal year ending September 30, 1995, as follows:
(1) For payment of obligations incurred for op-
erating-differential 
subsidy, 
not 
to 
exceed
$214,356,000.
(2) For expenses necessary for operations and
training activities, not to exceed $77,000,000, in-
cluding reception and representation expenses asso-
ciated with graduation functions at the Merchant
Marine Academy at Kings Point, New York.
(3) For expenses necessary to acquire and
maintain the Ready Reserve Force surge shipping
and resupply capability in an advanced state of read-
iness, and for related programs, not to exceed
$250,000,000.
(4) For the costs, as defined in section 502 of
the Federal Credit Reform Act of 1990, of guaran-
teed loans authorized by title XI of the Merchant
Marine Act, 1936, as amended (46 App. U.S.C.
1271, et seq.), $50,000,000. In addition, for admin-
istrative expenses related to loan guarantee commit-
ments under title XI of the Merchant Marine Act,
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1936, as amended (46 App. U.S.C. 1271, et seq.),
$4,000,000.
SEC. 103. MERCHANT SHIP SALES ACT OF 1946 AMEND-
MENT.
Section 11 of the Act of March 8, 1946 (50 App.
U.S.C. 1744, is amended as follows:
(1) By striking ‘‘Secretary of the Navy,’’ in
subsection (b)(2) and inserting ‘‘Secretary of
Defense,’’.
(2) By striking subsection (c) and redesignating
subsection (d) as subsection (c).
SEC. 104. SUBMISSION OF REPORT ON CONDITION OF PUB-
LIC PORTS.
Section 308(c) of title 49, United States Code, is
amended by inserting ‘‘even-numbered’’ between ‘‘each’’
and ‘‘year’’.
TITLE II—AMENDMENTS TO THE
MERCHANT MARINE ACT, 1936
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Maritime Security and
Trade Act of 1994’’.
SEC. 202. MARITIME SECURITY PROGRAM.
(a) Title VI of the Merchant Marine Act, 1936, as
amended (46 App. U.S.C. 1171 et seq.), is amended by
deleting the heading of title VI, ‘‘Operating-Differential
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Subsidy’’ and inserting a new heading and subheading as
follows:
‘‘TITLE 
VI—OPERATING-DIFFERENTIAL
SUBSIDY AND MARITIME SECURITY
PROGRAM.
‘‘Subpart A—Operating-Differential Subsidy’’.
(b) Section 605(b) (46 App, U.S.C. 1175(b)) is
amended to read as follows:
‘‘(b) No operating-differential subsidy shall be paid
for the operation of a vessel that is more than twenty-
five years of age, unless the Secretary of Transportation
has determined, before the enactment of the Maritime Se-
curity and Trade Act of 1994, that it is in the public inter-
est to grant such financial aid for the operation of such
vessel.’’.
(c) Title VI of the Merchant Marine Act, 1936, as
amended (46 App. U.S.C. 1171 et seq.) is amended by
adding a new section 616 following section 615, to read
as follows:
‘‘SEC. 616. (a)(1) The Secretary of Transportation
may authorize a contractor operating a liner vessel and
receiving an operating-differential subsidy under subpart
A of this title to construct, reconstruct, or acquire a liner
vessel of over five thousand deadweight tons worldwide to
replace a vessel that would reach the end of its
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subsidizable life prior to the expiration of the contractor’s
operating-differential subsidy contract. The replacement
vessel shall be documented under chapter 121 of subtitle
II of title 46, United States Code.
‘‘(2) A replacement liner vessel shall not be eligible
for operating-differential subsidy pursuant to subpart A
of this title, and shall be limited to payments in the
amounts set forth in subpart B of the title until the exist-
ing contract pursuant to subpart A terminates according
to its terms.
‘‘(b)(1) The Secretary of Transportation may author-
ize a contractor operating a bulk cargo vessel and receiv-
ing operating-differential subsidy under subpart A of this
title to construct, reconstruct, or acquire a bulk cargo ves-
sel of over five thousand deadweight tons worldwide to re-
place a vessel that would reach the end of its subsidizable
life prior to the expiration of the contractor’s operating-
differential subsidy contract. The replacement vessel shall
be documented under chapter 121 of subtitle II of title
46, United States Code.
‘‘(2) A replacement bulk cargo vessel shall continue
to receive an operating-differential subsidy under an exist-
ing contract pursuant to subpart A of this title until the
existing contract terminates according to its terms.
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‘‘(c) Liner vessels and bulk cargo vessels constructed
pursuant to subsections (a) and (b) of this section shall
be deemed to have been built in a domestic shipyard for
the purposes of section 610 of this Act: Provided, That
the provisions of section 607 of this Act shall not apply
to vessels constructed, reconstructed, or acquired pursuant
to subsections (a) and (b) of this section.
‘‘(d) Any existing foreign-built liner vessel that is ac-
quired pursuant to subsection (a) of this section and docu-
mented under chapter 121 of subtitle II of title 46, United
States Code, shall be less than five years of age at the
time of such documentation.
‘‘(e) Any existing foreign-built bulk cargo vessel that
is acquired pursuant to subsection (b) of this section and
documented under chapter 121 of subtitle of title 46,
United States Code, shall be less than five years of age
at the time of such documentation.
‘‘(f) No authority granted by the Secretary of Trans-
portation to construct, reconstruct, or acquire vessels pur-
suant to subsections (a) and (b) of this section may be
sold, assigned, conveyed, leased or otherwise transferred
to any other party, without the written consent of the Sec-
retary of Transportation pursuant to section 608 of this
title.
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‘‘(g) any repair or alteration necessary to bring a ves-
sel, which is constructed, reconstructed, or acquired pur-
suant to subsections (a) and (b) of this section, into com-
pliance with parts B and C of subtitle II of title 46, United
States Code, or any regulations prescribed under those
Parts, shall be performed in a privately owned shipyard
in the United States.’’.
(d) Title VI of the Merchant Marine Act, 1936, as
amended (46 App. U.S.C. 1171 et seq.) is amended by
adding a new section 617 following the new section 616,
to read as follows:
‘‘SEC. 617. (a) After the date of enactment of the
Maritime Security and Trade Act of 1994, the Secretary
of Transportation shall not enter into any new contract
for an operating-differential subsidy under subpart A of
this title.
‘‘(b) Notwithstanding any other provision of this Act,
any operating-differential subsidy contract in effect under
title VI on the day before the date of enactment of the
Maritime Security and Trade Act of 1994—
‘‘(1) shall continue in effect and terminate as
set forth in the contract, unless voluntarily termi-
nated at an earlier date by the persons (other than
the United States Government) that are parties to
the contract; and
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‘‘(2) may not be renewed or extended.
‘‘(c) After the date of enactment of the Maritime Se-
curity and Trade Act of 1994, an owner or operator of
a vessel covered by an operating-differential subsidy con-
tract under subpart A of this title may operate such vessel
in the foreign commerce of the United States without re-
striction, notwithstanding any other provision of this Act.
‘‘(d) With respect to a liner vessel—
‘‘(1) whose operator receives operating-differen-
tial subsidy pursuant to a contract under this title,
which is in force on October 1, 1993, and if the Sec-
retary approves the replacement of such vessel with
a comparable vessel, or
‘‘(2) covered by an operating agreement under
subpart B of this title, and if the Secretary approves
the replacement of such vessel with a comparable
vessel for inclusion in the fleet established under
subpart B of title VI,
such vessel may be transferred and registered under the
flag of an effective United States-controlled foreign flag,
notwithstanding any other provision of law: Provided,
That the vessel is available to be requisitioned by the Sec-
retary of Transportation pursuant to section 902 of this
Act (46 App. U.S.C. 1242).’’.
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(e) Title VI of the Merchant Marine Act, 1936, as
amended (46 App. U.S.C. 1171 et seq.) is amended by
adding a new subpart B to read as follows:
‘‘Subpart B—Maritime Security Program
‘‘SEC 650. ESTABLISHMENT OF FLEET.
‘‘(a) The Secretary of Transportation shall encourage
the establishment of a fleet of active, militarily useful, pri-
vately-owned liner vessels to maintain an American pres-
ence in international commercial shipping and meet na-
tional defense and other security requirements. The fleet
shall consist of privately-owned, United States-flag liner
vessels for which there are in effect operating agreements
under this subpart.
‘‘(b) A liner vessel may not be included in the fleet
unless—
‘‘(1) it is operated by an ‘ocean common car-
rier’ as defined in section 3 of the Shipping Act of
1984 (46 App. U.S.C. 1702);
‘‘(2) it is a vessel that is fifteen years of age
or less on the date an operating agreement is en-
tered into under section 651, unless the Secretary of
Transportation, in consultation with the Secretary of
Defense, determines that it is in the national inter-
est to waive this requirement;
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‘‘(3) it is a vessel that is less than five years
of age at the time it is documented under chapter
121 of subtitle II of title 46, United States Code, if
it is foreign-built;
‘‘(4) the Secretary of Transportation, after con-
sultation with the Secretary of Defense, determines
that the vessel is necessary to maintain a United
States presence in international commercial shipping
or determines that the vessel is militarily useful for
meeting the sealift needs of the United States with
respect to national emergencies; and
‘‘(5) the owner or operator of the vessel is a cit-
izen of the United States as set forth in section 651.
‘‘SEC. 651. OPERATING AGREEMENTS.
‘‘(a) The Secretary of Transportation shall require,
as a condition of including any vessel in the fleet, that
the owner or operator of the vessel enter into an operating
agreement with the Secretary of Transportation pursuant
to this section.
‘‘(b) An operating agreement pursuant to this section
shall require that, during the period of the agreement—
‘‘(1) each vessel covered by the operating agree-
ment—
‘‘(A) shall be operated exclusively in the
foreign trade, and
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‘‘(B) shall not be operated in the coastwise
trade of the United States or in mixed domestic
and foreign trade; and
‘‘(2) the owner or operator of a vessel covered
by the operating agreement shall have the vessel
documented under chapter 121 of subtitle II of title
46, United States Code, and shall maintain that
documentation.
‘‘(c) An owner or operator of a vessel covered by an
operating agreement under this subpart may operate this
vessel in the foreign commerce of the United States with-
out restriction.
‘‘(d)(1) The Secretary of Transportation is author-
ized to enter into operating agreements, provided that the
total does not exceed $1,000,000,000 for the fiscal years
1995 through 2004.
‘‘(2) An operating agreement pursuant to this section
shall provide that the Secretary of Transportation pay to
the owner or operator of each liner vessel that is included
in the operating agreement, an amount per vessel per year
that does not exceed $2,500,000, for fiscal years 1995
through 1997, and does not exceed $2,000,000, for fiscal
years 1998 through 2004. The amount per year paid to
the owner or operator of a liner vessel under an operating
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agreement pursuant to this section shall be paid at the
end of each month in equal installments.
‘‘(3) An amount of $1,000,000,000 is appropriated
to carry out this section.
‘‘(e) In order to qualify for the annual payments
under this section, the owner or operator shall certify an-
nually, pursuant to regulations issued by the Secretary,
that each vessel covered by an operating agreement was
operated in a trade required by section 651(b)(1) for at
least three hundred twenty days in a fiscal year, including
days during which the liner vessel is drydocked, surveyed,
inspected, or repaired.
‘‘(f) Without regard to an operating agreement in ef-
fect with an owner or operator of a liner vessel under this
section, the Secretary of Transportation shall not make
any payment under this section for a vessel with respect
to any period in which the vessel is—
‘‘(1) subject to an operating-differential subsidy
contract under subpart A of title VI of this Act;
‘‘(2) not operated or maintained in accordance
with an operating agreement under this subpart; or
‘‘(3) more than twenty-five years of age.
‘‘(g) With respect to payments under this section for
a vessel covered by an operating agreement, the Secretary
of Transportation—
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‘‘(1) shall not reduce any payment for the oper-
ation of a vessel to carry military or other preference
cargoes under—
‘‘(A) section 2631 of title 10, United
States Code; or
‘‘(B) section 1241–1 of title 46, Appendix,
United States Code;
‘‘(2) shall not make any payment for each day
that a vessel is engaged in transporting more than
five thousand tons of civilian bulk preference cargoes
pursuant to sections 901(a), 901(b), or 901b of this
Act; and
‘‘(3) shall reduce any payment for each day
that a vessel is engaged in transporting less than
five thousand tons of civilian bulk preference cargoes
pursuant to sections 901(a), 901(b), or 901b of this
Act, by an amount which bears the same ratio to the
amount otherwise payable as revenue for the car-
riage of preference cargo bears to the gross revenue
derived from the entire voyage.
‘‘(h) The Secretary of Transportation shall enter into
operating agreements in the following order of priority:
‘‘(1) Liner vessel or vessels owned or operated
by a person that is a citizen of the United States
under section 2 of the Shipping Act, 1916; and then
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‘‘(2) Liner vessel or vessels owned or operated
by a person that is eligible to document a vessel
under chapter 121 of subtitle II of title 46, United
States Code.
‘‘(i) No authority granted by the Secretary of Trans-
portation to an owner or operator of a vessel covered by
an operating agreement under this subpart may be sold,
assigned, conveyed, leased or otherwise transferred to any
other party, without the written consent of the Secretary
of Transportation pursuant to the provisions of section
608 of this title.
‘‘(j) Any authority granted by the Secretary of Trans-
portation to an owner or operator of a vessel covered by
an operating agreement under this subpart shall be used
by the holder of the operating agreement within one year
from the date such authority is granted for existing vessels
and within two years from the date such authority is
granted for newly constructed vessels, or the authority
shall revert to the Secretary of Transportation for such
disposition as determined appropriate.
‘‘(k) An operating agreement entered into by the Sec-
retary of Transportation under this subpart shall be effec-
tive for a period of not more than ten years, and, under
any condition, terminate not later than September 30,
2004.
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‘‘(l) An operating agreement entered into by the Sec-
retary of Transportation under this subpart shall require
the owner or operator of a vessel covered by an operating
agreement under this subpart to enroll in an Emergency
Preparedness Program, pursuant to the requirements of
section 652, under such terms and conditions as the Sec-
retary may prescribe.
‘‘SEC. 652. NATIONAL SECURITY REQUIREMENTS.
‘‘(a) On a request of the President, acting through
the Secretary of Transportation in consultation with the
Secretary of Defense, during time of war or national emer-
gency or when decided by the President to be necessary
in the national interest, acting through the Secretary of
Transportation in consultation with the Secretary of De-
fense, an owner or operator of a vessel covered by an oper-
ating agreement under this subpart shall make available
commercial transportation resources pursuant to an
Emergency Preparedness Program established by the Sec-
retary of Transportation in consultation with the Sec-
retary of Defense.
‘‘(b) The commercial transportation resources to be
made available shall include ships, capacity, intermodal
systems or equipment, terminal facilities, and intermodal
and management services, or any portion of these re-
sources, as the Secretary may determine to be necessary.
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‘‘(c) The Secretary of Transportation shall not reduce
the amount of equal monthly installment payments under
section 651 to an owner or operator who makes commer-
cial transportation resources available pursuant to an
Emergency Preparedness Program under this section.
‘‘(d) An owner or operator who makes a vessel avail-
able pursuant to this section shall be permitted to employ
a foreign-flag vessel in the foreign commerce of the United
States, without receiving additional compensation, as a re-
placement for a vessel covered by an operating agreement,
until a vessel used is redelivered.
‘‘SEC. 653. DOMESTIC NONCONTIGUOUS TRADE RESTRIC-
TIONS.
‘‘(a) PROHIBITION.—
‘‘(1) IN GENERAL.—Except as provided in this
section, an owner or operator may not receive any
payment under this subpart—
‘‘(A) if the owner or operator or a related
party with respect to the owner or operator, di-
rectly or indirectly owns, charters, or operates
a vessel engaged in the transportation of cargo
in a noncontiguous trade other than in accord-
ance with a waiver under subsection (b), (c), or
(d); or
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‘‘(B) if the owner or operator is authorized
to operate a vessel in noncontiguous trade
under such a waiver, and there is a—
‘‘(i) material change in the domestic
ports served by the owner or operator from
the ports permitted to be served under the
waiver;
‘‘(ii) material increase in the annual
number or the frequency of sailings by the
owner or operator from the number or fre-
quency permitted under the waiver; or
‘‘(iii) material increase in the annual
volume of cargo carried or annual capacity
utilized by the owner or operator from the
annual volume of cargo or annual capacity
permitted under the waiver.
‘‘(2) LIMITATIONS
ON
PROHIBITION.—Para-
graph (1) applies to an owner or operator only in
the years specified for payments under the operating
agreement entered into by the owner or operator.
‘‘(b) GENERAL WAIVER AUTHORITY.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (c), the Secretary may waive, in writing, the
application of subsection (a) to an owner or operator
pursuant to an application submitted in accordance
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with this subsection, unless the Secretary finds
that—
‘‘(A) the waiver would result in unfair
competition to any person that operates vessels
as a carrier of cargo in a service exclusively in
the noncontiguous trade for which the waiver is
applied;
‘‘(B) subject to paragraph (6), existing
service in that noncontiguous trade is adequate;
or
‘‘(C) the waiver will result in prejudice to
the objects or policy of this title or Act.
‘‘(2) TERMS OF WAIVER.—Any waiver granted
by the Secretary under this subsection shall state—
‘‘(A) the domestic ports permitted to be
served,
‘‘(B) the annual number or frequency of
sailings that may be provided, and
‘‘(C)(i) the annual volume of cargo per-
mitted,
‘‘(ii) for containerized or trailer service, the
annual forty-foot equivalent unit shipboard con-
tainer and trailer or vehicle or general cargo ca-
pacity permitted, or
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‘‘(iii) for tug and barge service, the annual
barge house cubic foot capacity and the annual
barge deck general cargo capacity, or forty-foot
equivalent units container, trailer, or vehicle ca-
pacity, permitted.
‘‘(3) APPLICATIONS FOR WAIVERS.—An appli-
cation for a waiver under this subsection may be
submitted by an owner or operator and shall de-
scribe, as applicable, the nature and scope of—
‘‘(A) the service proposed to be conducted
in a noncontiguous trade under the waiver; or
‘‘(B) any proposed material change or in-
crease in a service in a noncontiguous trade
permitted under a previous waiver.
‘‘(4) ACTION ON APPLICATION AND HEARING.—
‘‘(A) NOTICE AND PROCEEDING.—Within
thirty days after receipt of an application for a
waiver under this subsection, the Secretary
shall—
‘‘(i) publish a notice of the applica-
tion;
‘‘(ii) begin a proceeding on the appli-
cation section 554 of title 5, United States
Code, to receive—
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‘‘(I) evidence of the nature,
quantity, and quality of the existing
service in the noncontiguous trade for
which the waiver is applied;
‘‘(II) a description of the pro-
posed service or proposed material
change or increase in a previously per-
mitted service;
‘‘(III) the projected effect of the
proposed service or proposed material
change or increase in existing service;
and
‘‘(IV) recommendations on condi-
tions that should be contained in any
waiver for the proposed service or ma-
terial change or increase.
‘‘(B) INTERVENTION.—An applicant for a
waiver under this subsection, and any person
that operates cargo vessels in the noncontiguous
trade for which a wavier is applied and that has
any interest in the application, may intervene in
the proceedings on the application.
‘‘(C) HEARING.—Before deciding whether
to grant a waiver under this subsection, the
Secretary shall hold a public hearing in an ex-
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including Anchorage and Whittier, except
occasional deviations to discharge inciden-
tal quantities of cargo) with an annual ca-
pacity allocated to the service in each di-
rection of 100 per centum of the total ca-
pacity of its vessels employed in the service
on July 1, 1992; and
‘‘(v) unscheduled, contract carrier tug
and barge service between points in Alaska
south of the Arctic Circle not served by the
common carrier service permitted under
clause (iii) and points in the contiguous
forty-eight States, with an annual capacity
allocated to that service not exceeding 100
per centum of the total capacity of the
equipment that was dedicated to service
south of the Arctic Circle on July 1, 1992,
and actually utilized in that service in the
two-year period preceding that date.
‘‘(D) ANNUALIZATION.—Capacity other-
wise required by this paragraph to be permitted
under a waiver under this subsection shall be
annualized if not a seasonal service.
‘‘(E) ADJUSTMENTS.—
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‘‘(i) Each written waiver granted by
the Secretary under this subsection shall
contain a statement that the annual capac-
ity permitted under this waiver in any di-
rection shall increase for a calendar year
by the percentage of increase during the
preceding calendar year in the real gross
product of the State or territory to which
goods are transported in the noncontiguous
trade covered by the waiver, or its equiva-
lent economic measure as determined by
the Secretary if the real gross product is
not available, and that the increase shall
not be considered to be a material change
or increase for purposes of subsection
(a)(1)(B).
‘‘(ii) The increase in permitted capac-
ity under clause (i) in the noncontiguous
trade with Alaska shall be allowed only to
the extent the operator actually uses that
increased capacity to carry cargo in the
permitted service in the calendar year im-
mediately following the preceding increase
in gross product. However, if an operator
operating exclusively containerized vessels
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in trade on July 1, 1992, carries an aver-
age load factor of at least 90 per centum
of permitted capacity (including the capac-
ity, if any, both authorized and used under
the previous sentence) during nine months
of any one calendar year, than in the next
following calendar year and thereafter, the
requirement that additional capacity must
be used in the immediately following year
does not apply.
‘‘(F) SERVICE LEVELS NOT INCREASED BY
TERMINATION
OF
AGREEMENT.—The termi-
nation of an operating agreement under subpart
B of this title shall not be considered to in-
crease a level of service specified in subpara-
graph (A), (B), or (C) if the contractor under
the agreement enters into another operating
agreement after that termination.
‘‘(3) APPLICATIONS
FOR
WAIVERS.—For a
waiver under this subsection a contractor shall sub-
mit to the Secretary an application certifying the
facts required to be found under paragraph (1) (A)
or (B), as applicable.
‘‘(4) ACTION ON APPLICATION.—
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‘‘(A) NOTICE.—The Secretary shall pub-
lish a notice of receipt of an application for a
waiver under this subsection within thirty days
after receiving the application.
‘‘(B) HEARING
PROHIBITED.—The Sec-
retary may not conduct a hearing on an appli-
cation for a waiver under this subsection.
‘‘(C) SUBMISSION
OF
COMMENTS.—The
Secretary shall give every person operating a
cargo vessel in a noncontiguous domestic trade
for which a waiver is applied for under this sub-
section and who has any interest in the applica-
tion a reasonable opportunity to submit com-
ments on the application and on the description
of the service that would be permitted by any
waiver that is granted by the Secretary under
the application.
‘‘(5) DECISION
ON
APPLICATION.—Subject to
the time required for publication of notice and for
receipt and evaluation of comments by the Sec-
retary, an application for a waiver under this sub-
section submitted at the same time the applicant ap-
plies for inclusion of a vessel in the fleet established
under this subpart shall be granted in accordance
with the level of service determined by the Secretary
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under this subsection by not later than the date on
which the Secretary offers to the applicant an oper-
ating agreement with respect to that vessel.
‘‘(6) CHANGE OR INCREASE IN SERVICE.—Any
material change or increase in a service that is sub-
ject to a waiver under this subsection is not author-
ized except to the extent the change or increase is
permitted by a waiver under subsection (b).
‘‘(d) EMERGENCY WAIVER.—Notwithstanding any
other provision of this section, the Secretary may, without
hearing, temporarily waive the application of subsection
(a)(1)(B) if the Secretary finds that a material change or
increase is essential in order to respond adequately to (1)
an environmental or natural disaster or emergency, or (2)
another emergency declared by the President. Any waiver
shall be for a period of not to exceed forty-five days, except
that a waiver may be renewed for thirty-day periods if the
Secretary finds that adequate capacity continues to be
otherwise unavailable.
‘‘(e) ANNUAL REPORT ON WAIVERS.—Each waiver
under this section shall require the person who is granted
the waiver to submit to the Secretary each year an annual
report setting forth for the service authorized by the waiv-
er—
‘‘(1) the ports served during the year;
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‘‘(2) the number of frequency of sailings per-
formed during the year; and
‘‘(3) the volume of cargo carried or, for contain-
erized or trailer service, the annual forty-foot equiva-
lent unit shipboard container, trailer, or vehicle ca-
pacity utilized during the year, or for tug and barge
service, the annual barge house and barge deck ca-
pacity utilized during the year.
‘‘(f) DEFINITIONS.—In this section—
‘‘(1) the term ‘noncontiguous trade’ means
trade between—
‘‘(A) a point in the contiguous forty-eight
States; and
‘‘(B) a point in Alaska, Hawaii, or Puerto
Rico, other than a point in Alaska north of the
Arctic Circle; and
‘‘(2) the term ‘related party’ means—
‘‘(A) a holding company, subsidiary, affili-
ate, or associate of a owner or operator who is
a party to an operating agreement under this
subpart; and
‘‘(B) an officer, director, agency, or other
executive of a contractor or of a person referred
to in subparagraph (A).
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‘‘SEC. 654. DEFINITIONS.
‘‘For the purposes of subpart B of this title:
‘‘(1) The term ‘citizen of the United States’
means a person that is a citizen of the United States
under section 651 of this subpart.
‘‘(2) The term ‘operating agreement’ means an
operating agreement that takes effect under section
651 of this subpart and covers one or more ves-
sels.’’.
(f) EFFECTIVE DATE.—The amendments made by
subsections (a) through (e) of this section shall be effective
beginning on the date which is one hundred twenty days
after the date of enactment of the Maritime Security and
Trade Act of 1994.
SEC. 203. TONNAGE FEES.
(a) INCREASE OF DUTIES.—Section 36 of the Act of
August 5, 1909 (46 App. U.S.C. 121) is amended in the
second paragraph by—
(1) inserting after ‘‘1998,’’ the first place it ap-
pears ‘‘and a supplemental duty of 15 cents per ton,
not to exceed in the aggregate 75 cents per ton in
any one year, for fiscal years 1995 through 2004,’’;
and
(2) inserting after ‘‘1998,’’ the second place it
appears, ‘‘and a supplemental duty of 44 cents per
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ton, not to exceed $2.20 per ton in any one year, for
fiscal years 1995 through 2004.’’.
(b) OFFSETTING RECEIPTS.—The increased tonnage
fees collected as a result of the amendments made by sub-
section (a) shall be deposited in the general fund of the
Treasury as offsetting receipts of the department in which
the Coast Guard is operating and ascribed to Coast Guard
activities.
SEC. 204. USE OF FOREIGN-FLAG VESSELS.
Section 804 of Title VIII of the Merchant Marine
Act, 1936, as amended (46 App. U.S.C. 1222), is
amended by adding a new subsection (f) as follows:
‘‘(f) The provisions of subsection (a) of this section
shall not preclude an owner or operator receiving operat-
ing assistance under subpart A or subpart B of title VI,
or any holding company, subsidiary, affiliate or associate
of such owner or operator, or any officer, director, agency,
or executive thereof from—
‘‘(1) owning, chartering, or operating any for-
eign-flag vessel that is operated as a feeder vessel
for a United States-flag service under an operating
agreement pursuant to subpart B of title VI;
‘‘(2) owning, chartering, or operating any for-
eign-flag vessel in line haul service between the
United States and foreign ports: Provided, That the
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foreign-flag vessel was operated by that owner or op-
erator on the date of enactment of this Act; or that
the owner or operator, with respect to each addi-
tional foreign-flag vessel, has first applied to have
that vessel added to the existing operating agree-
ment, and the Secretary denies the application: And
provided further, That any foreign-flag vessel in line
haul service between the United States and foreign
ports is (a) registered under the flag of an effective
United States-controlled foreign flag, and (b) avail-
able to be requisitioned by the Secretary of Trans-
portation pursuant to section 902 of this Act;
‘‘(3) owning, chartering, or operating foreign-
flag liner vessels that are operated exclusively in for-
eign-to-foreign service and not in the foreign com-
merce of the United States;
‘‘(4) owning, chartering, or operating foreign-
flag bulk cargo vessels that are operated in both for-
eign-to-foreign service and the foreign commerce of
the United States;
‘‘(5) chartering or operating foreign-flag vessels
that are operated solely as replacement vessels for
United States-flag vessels that are made available to
the Secretary of Defense pursuant to section 652 of
subpart B of title VI; or
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‘‘(6) entering into space charter agreements
with foreign-flag carriers or acting as agent or
broker for a foreign-flag vessel or vessels.’’.
SEC. 205.
DEFINITION OF PRIVATELY OWNED UNITED
STATES-FLAG COMMERCIAL VESSELS.
The third sentence of section 901(b)(1) of title IX
of the Merchant Marine Act, 1936, as amended (46 App.
U.S.C. 1241(b)(1)) is deleted in its entirety and the fol-
lowing is inserted in lieu thereof: ‘‘For purposes of this
section, the term ‘privately owned United States-flag com-
mercial vessels’ shall be deemed to include (1) any pri-
vately owned United States flag commercial vessel con-
structed in the United States, (2) any privately owned
liner vessel constructed, reconstructed, or acquired outside
the United States that is documented pursuant to chapter
121 of title 46, United States Code and is less than five
years of age on the date of such documentation, and (3)
any bulk cargo vessel constructed in or delivered by a ship-
yard outside the United States after January 1, 1993. The
term ‘privately owned United States-flag commercial ves-
sels’ shall also be deemed to include any liner or bulk
cargo vessel that so qualified pursuant to section 615 of
title VI or section 901(b)(1) of title IX of this Act, prior
to enactment of the Maritime Security and Trade Act of
1994. The term ‘privately owned United States-flag com-
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mercial vessels’ shall not be deemed to include any liquid
bulk cargo vessel that does not meet the requirements of
section 3703a of title 46, United States Code.’’.
SEC. 206.
USE OF FOREIGN-FLAG FEEDER VESSELS IN
CARRIAGE OF PREFERENCE CARGOES.
The provisions of law set forth in 46 App. U.S.C.
1241(b)(1), 1241–1, and 1241f, requiring use of United
States-flag vessels shall, with respect to liner vessels, be
deemed fulfilled, as to the total of any shipment other than
that of the Department of Defense covered by 10 U.S.C.
2631, if the actual ocean transportation of each shipment
for which the United States-flag carrier has issued its own
through bill-of-lading between the original port of lading
and the port of final discharge, consists of transportation
of the cargo by a combination of United States-and for-
eign-flag vessels: Provided, That, measured by distance,
the United States-flag line haul portion of each voyage is
greater than the foreign-flag feeder portion of each voyage
pursuant to regulations issued by the Secretary of Trans-
portation.
SEC. 207.
LIMITATION ON RESTRICTIONS.
Notwithstanding any other provision of law or con-
tract, all restrictions and requirements set forth in 46
App. U.S.C. 1153, 1156, and 1212, applicable to a vessel
constructed, reconstructed or reconditioned with the aid
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of construction-differential subsidy shall terminate: (1) for
a liner or dry bulk cargo vessel, upon the expiration of
the twenty-five-year period beginning on the date of origi-
nal delivery of the vessel from the shipyard, and (2) for
a liquid bulk cargo vessel, upon the expiration of the twen-
ty-year period beginning on the date of original delivery
of the vessel from the shipyard.
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