H. R. 1442—161
‘‘§ 55314. Transportation requirements for certain exports 
sponsored by the Secretary of Agriculture 
‘‘(a) MINIMUM TONNAGE.—
‘‘(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 tonnage 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 Transpor-
tation as having a useful life of at least 5 years after 
that rebuilding. 
‘‘(2) CALENDAR YEAR.—To provide for effective and equitable 
administration 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 activity (except inspection or weighing activities, other activi-
ties carried out for health or safety, or technical assistance provided 
in the handling of commercial transactions) of the Secretary of 
Agriculture or the Commodity Credit Corporation—
‘‘(1) carried out under the Agricultural Trade Development 
and Assistance 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 organiza-
tions; 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 pre-
vailing world market prices; 
‘‘(6) under which a cash grant is made directly or through 
an intermediary to a foreign purchaser to enable the purchaser 
to obtain United States agricultural commodities or their prod-
ucts 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 con-
trolled by or under loan from the Corporation are exchanged 
or bartered for materials, goods, equipment, or services pro-
duced 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 
transportation 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.
H. R. 1442—162
‘‘(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 section 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 
commodities 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 paragraph (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 annual tonnage of the commodities fur-
nished. 
‘‘(4) AWARDING
CONTRACTS.—In awarding a contract for 
the transportation by vessel of commodities from the Great 
Lakes port range pursuant 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 financial 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 transpor-
tation would not be provided 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 
integrity. 
‘‘(5) NONAVAILABILITY
OF
VESSELS.—A determination of 
nonavailability 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 agricultural commodities to be exported under programs 
subject to section 55314 of this title is the average of the tonnage
H. R. 1442—163
exported under those programs during the base period, discarding 
the high and low years. 
‘‘(c) WAIVERS.—The President may waive the minimum quantity 
for a fiscal year under this section if the President determines 
and reports to Congress, 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 unavail-
ability of funds. 
‘‘§ 55316. Financing 
the 
transportation 
of 
agricultural 
commodities 
‘‘(a) FINANCING
OF INCREASED CHARGES.—The Secretary of 
Transportation 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 Sec-
retary of Agriculture and the Corporation on exports of 
agricultural commodities and their products under the agri-
cultural export programs specified in section 55314(b) of 
this title; exceeds 
‘‘(B) 20 percent of the value of the commodities and 
their products 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.—
‘‘(1) ISSUANCE.—To meet the expenses required to be 
assumed under subsections (a) and (b), the Secretary of 
Transportation shall issue obligations to the Secretary of the 
Treasury. The Secretary of Transportation, 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 interest rate for the obligations, considering the average 
market yield on outstanding marketable obligations of the 
United States Government of comparable maturities during 
the month before the obligations are issued. 
‘‘(2) PURCHASE.—The Secretary of the Treasury shall pur-
chase the obligations issued under this subsection. To purchase 
the obligations, the Secretary of the Treasury may use as 
a public debt transaction the proceeds from the sale of securities 
issued under chapter 31 of title 31. The purposes for which 
securities may be issued under that chapter are extended to 
include the purchase of obligations under this subsection. A
H. R. 1442—164
redemption 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 appropriated an amount sufficient to reimburse the Sec-
retary of Transportation for the costs incurred under this sec-
tion, 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 Sec-
retary of Transportation is unable to obtain the funds necessary 
to finance the increased ocean freight charges resulting from the 
requirements of subsections (a) and (b) and section 55314(a) of 
this title, the Secretary shall notify Congress 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 agricultural 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 charges 
resulting from the requirements of sections 55314(a) and 55316(a) 
and (b) of this title. On the termination of this subchapter under 
this section—
‘‘(1) this subchapter does not exempt export activities from, 
or subject export activities to, the cargo preference laws; and 
‘‘(2) the 50-percent requirement in section 55305 of this 
title remains in effect. 
‘‘§ 55318. Effect on other law 
‘‘This subchapter does not affect chapter 5 of title 5. 
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS 
‘‘§ 55331. Definitions 
‘‘In this subchapter: 
‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American 
Great Lakes vessel’ means a vessel so designated under section 
55332 of this title, but only during the period the designation 
is in effect. 
‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake 
Superior, Lake Michigan, Lake Huron, Lake Erie, Lake Ontario, 
the Saint Lawrence River west of Saint Regis, New York, 
and their connecting and tributary waters. 
‘‘(3) GREAT
LAKES
SHIPPING
SEASON.—The term ‘Great 
Lakes shipping season’ means the period each year during 
which the Saint Lawrence Seaway is open for navigation by
H. R. 1442—165
vessels, as declared by the Saint Lawrence Seaway Develop-
ment Corporation. 
‘‘§ 55332. Designating American Great Lakes vessels 
‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall des-
ignate a vessel as an American Great Lakes vessel if—
‘‘(1) an application for designation is submitted to the Sec-
retary under regulations prescribed by the Secretary; 
‘‘(2) the vessel is documented under the laws of the United 
States; 
‘‘(3) the vessel, on the effective date of the designation, 
is—
‘‘(A) at least 1, but not more than 6, years old; or 
‘‘(B) at least 1, but not more than 11, years old if 
the Secretary finds that suitable vessels are not available 
to provide the type of service for which the vessel will 
be used after the designation; 
‘‘(4) the vessel has not previously been designated as an 
American Great Lakes vessel; and 
‘‘(5) the owner makes an agreement as provided under 
subsection (b). 
‘‘(b) AGREEMENTS.—A vessel may be designated as an American 
Great Lakes vessel only if the person that will be the owner of 
the vessel at the time of the designation makes an agreement 
with the Secretary providing that if the Secretary determines that 
the vessel is necessary to the defense of the United States, the 
United States Government will have an exclusive right, during 
the 120-day period following the date of a revocation of the designa-
tion under section 55335 of this title, to purchase the vessel for 
a price equal to the greater of—
‘‘(1) the approximate world market value of the vessel; 
or 
‘‘(2) the cost of the vessel to the owner less a reasonable 
amount for depreciation. 
‘‘(c) CERTAIN FOREIGN DOCUMENTATION AND SALE NOT PROHIB-
ITED.—Notwithstanding any other law, if the Government does 
not exercise its right of purchase under an agreement under sub-
section (b), the owner of the vessel is not prohibited from—
‘‘(1) documenting the vessel under the laws of a foreign 
country; or 
‘‘(2) selling the vessel to a person not a citizen of the 
United States. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations 
establishing requirements for submitting applications under this 
section. 
‘‘§ 55333. Exemption from restriction on transporting certain 
cargo 
‘‘The 3-year documentation requirement of section 55305(a) of 
this title does not apply to a vessel designated as an American 
Great Lakes vessel during the period of its designation. 
‘‘§ 55334. Restrictions on operations 
‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an 
American Great Lakes vessel may not be used to—
‘‘(1) engage in trade—
H. R. 1442—166
‘‘(A) from a port in the United States that is not 
located on the Great Lakes; or 
‘‘(B) between ports in the United States; 
‘‘(2) transport bulk cargo (as defined in section 40102 of 
this title) that is subject to section 55305 or 55314 of this 
title or section 2631 of title 10; or 
‘‘(3) provide a service (except ocean freight service) as—
‘‘(A) a contract carrier; or 
‘‘(B) a common carrier on a fixed advertised schedule 
offering frequent sailings at regular intervals in the foreign 
trade of the United States. 
‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel 
may be used for not more than 90 days during any 12-month 
period to engage in trade prohibited by subsection (a)(1)(A), except 
during the Great Lakes shipping season. 
‘‘§ 55335. Revocations and terminations of designations 
‘‘(a) REVOCATIONS.—After notice and an opportunity for a 
hearing, the Secretary of Transportation may revoke a designation 
of a vessel as an American Great Lakes vessel if the Secretary 
finds that—
‘‘(1) the vessel does not meet a requirement for the designa-
tion; 
‘‘(2) the vessel has been operated in violation of this sub-
chapter; or 
‘‘(3) the owner or operator of the vessel has violated an 
agreement made under section 55332(b) of this title. 
‘‘(b) TERMINATIONS.—On petition and a showing of good cause 
by the owner of a vessel, the Secretary may terminate the designa-
tion of a vessel as an American Great Lakes vessel. The Secretary 
may impose conditions in a termination order to prevent significant 
adverse effects on other operators of vessels of the United States. 
‘‘§ 55336. Civil penalty 
‘‘After notice and an opportunity for a hearing, the Secretary 
of Transportation may impose a civil penalty of not more than 
$1,000,000 on the owner of an American Great Lakes vessel for 
any act for which the designation may be revoked under section 
55335 of this title.
‘‘CHAPTER 555—MISCELLANEOUS
‘‘Sec. 
‘‘55501.
Mobile trade fairs.
‘‘§ 55501. Mobile trade fairs 
‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage 
and promote the development and use of mobile trade fairs designed 
to show and sell the products of United States business and agri-
culture at foreign ports and at other commercial centers throughout 
the world where the operators of the fairs use, insofar as practicable, 
vessels and aircraft of the United States in transporting their 
exhibits. 
‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Sec-
retary determines that a mobile trade fair provides an economical 
and effective means of promoting export sales, the Secretary may 
provide to the operator of the fair—
‘‘(1) technical assistance and support; and
H. R. 1442—167
‘‘(2) financial assistance to defray certain expenses incurred 
outside the United States, except the cost of transportation 
on foreign vessels and aircraft. 
‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section, 
the President may use, in addition to amounts appropriated to 
carry out trade promotion activities, foreign currencies owned by 
or owed to the United States Government.
‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES 
‘‘CHAPTER 561—RESTRICTIONS ON TRANSFERS
‘‘Sec. 
‘‘56101.
Approval required to transfer vessel to noncitizen. 
‘‘56102.
Additional controls during war or national emergency. 
‘‘56103.
Conditional approvals. 
‘‘56104.
Penalty for false statements. 
‘‘56105.
Forfeiture procedure.
‘‘§ 56101. Approval required to transfer vessel to noncitizen 
‘‘(a) RESTRICTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise provided in this 
section, section 12119 of this title, or section 611 of the Mer-
chant Marine Act, 1936, a person may not, without the approval 
of the Secretary of Transportation—
‘‘(A) sell, lease, charter, deliver, or in any other manner 
transfer, or agree to sell, lease, charter, deliver, or in 
any other manner transfer, to a person not a citizen of 
the United States, an interest in or control of—
‘‘(i) a documented vessel owned by a citizen of 
the United States; or 
‘‘(ii) a vessel last documented under the laws of 
the United States; or 
‘‘(B) place under foreign registry, or operate under 
the authority of a foreign country, a documented vessel 
or a vessel last documented under the laws of the United 
States. 
‘‘(2) EXCEPTIONS.—Paragraph (1)(A) does not apply to a 
vessel that has been operated only for pleasure or only as 
a fishing vessel, fish processing vessel, or fish tender vessel 
(as defined in section 2101 of this title). 
‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing 
with respect to a vessel to be documented under chapter 121 of 
this title, the Secretary may grant approval under subsection (a) 
before the vessel is documented. 
‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this 
subtitle, the Merchant Marine Act, 1936, or any contract with 
the Secretary made under this subtitle or that Act, a person may 
place a vessel under foreign registry without the approval of the 
Secretary if—
‘‘(1)(A) the Secretary, in conjunction with the Secretary 
of Defense, determines that at least one replacement vessel 
of equal or greater military capability and of a capacity that 
is equivalent or greater, as measured by deadweight tons, gross 
tons, or container equivalent units, as appropriate, is docu-
mented under chapter 121 of this title by the owner of the 
vessel placed under foreign registry; and 
‘‘(B) the replacement vessel is not more than 10 years 
old on the date of that documentation; or
H. R. 1442—168
‘‘(2) an operating agreement covering the vessel under 
chapter 531 of this title has expired. 
‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or 
transfer of a vessel, or of an interest in or control of a vessel, 
in violation of this section is void. 
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells, 
charters, or transfers a vessel, or an interest in or control 
of a vessel, in violation of this section shall be fined under 
title 18, imprisoned for not more than 5 years, or both. 
‘‘(2) CIVIL PENALTY.—A person that sells, charters, or trans-
fers a vessel, or an interest in or control of a vessel, in violation 
of this section is liable to the United States Government for 
a civil penalty of not more than $10,000 for each violation. 
‘‘(3) FORFEITURE.—A documented vessel may be seized by 
and forfeited to the Government if, in violation of this section, 
a person—
‘‘(A) knowingly sells, charters, or transfers the vessel 
or an interest in or control of the vessel; or 
‘‘(B) places the vessel under foreign registry or operates 
the vessel under the authority of a foreign country. 
‘‘§ 56102. Additional controls during war or national emer-
gency 
‘‘(a) IN
GENERAL.—During war, or a national emergency 
declared by Presidential proclamation, a person may not, without 
the approval of the Secretary of Transportation—
‘‘(1) place under foreign registry a vessel owned in whole 
or in part by a citizen of the United States or a corporation 
incorporated under the laws of the United States or of a State; 
‘‘(2) sell, mortgage, lease, charter, deliver, or in any other 
manner transfer, or agree to sell, mortgage, lease, charter, 
deliver, or in any other manner transfer, to a person not a 
citizen of the United States—
‘‘(A) a vessel owned as described in paragraph (1), 
or an interest therein; 
‘‘(B) a vessel documented under the laws of the United 
States, or an interest therein; or 
‘‘(C) a facility for building or repairing vessels, or an 
interest therein; 
‘‘(3) issue, assign, or transfer to a person not a citizen 
of the United States an instrument of indebtedness secured 
by a mortgage of a vessel to a trustee, by an assignment 
of an owner’s interest in a vessel under construction to a 
trustee, or by a mortgage of a facility for building or repairing 
vessels to a trustee, unless the trustee or a substitute trustee 
is approved by the Secretary under subsection (b); 
‘‘(4) enter into an agreement or understanding to construct 
a vessel in the United States for, or to be delivered to, a 
person not a citizen of the United States without expressly 
stipulating that construction will not begin until after the war 
or national emergency has ended; 
‘‘(5) enter into an agreement or understanding whereby 
there is vested in, or for the benefit of, a person not a citizen 
of the United States the controlling interest in a corporation 
that is incorporated under the laws of the United States or
H. R. 1442—169
a State and that owns a vessel or facility for building or 
repairing vessels; or 
‘‘(6) cause or procure a vessel, constructed in whole or 
in part in the United States and never cleared for a foreign 
port, to depart from a port of the United States before it 
has been documented under the laws of the United States. 
‘‘(b) TRUSTEES.—
‘‘(1) APPROVAL.—The Secretary shall approve a trustee or 
substitute trustee under subsection (a)(3) if and only if the 
trustee is a bank or trust company that—
‘‘(A) is organized as a corporation, and is doing busi-
ness, under the laws of the United States or a State; 
‘‘(B) is authorized under those laws to exercise cor-
porate trust powers; 
‘‘(C) is a citizen of the United States; 
‘‘(D) is subject to supervision or examination by Federal 
or State authority; and 
‘‘(E) has a combined capital and surplus (as set forth 
in its most recent published report of condition) of at least 
$3,000,000. 
‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases 
to meet the conditions in paragraph (1), the Secretary shall 
disapprove the trustee or substitute trustee. After the dis-
approval, the restrictions on transfer or assignment without 
the Secretary’s approval in subsection (a)(3) apply. 
‘‘(3) OPERATION OF VESSEL.—During a period when sub-
section (a) applies, a trustee referred to in subsection (a)(3), 
even though approved as a trustee by the Secretary, may not 
operate the vessel under the mortgage or assignment without 
the Secretary’s approval. 
‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in 
violation of this section is void. 
‘‘(d) RECOVERY OF CONSIDERATION.—
‘‘(1) IN GENERAL.—A person that deposited or paid consider-
ation in connection with a transaction prohibited by this section 
may recover the consideration after tender of the vessel, facility, 
stock, or other security, or interest therein, to the person enti-
tled to it, or the forfeiture thereof to the United States Govern-
ment. 
‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person 
in whose interest the consideration was deposited, or to whom 
it was paid, entered into the transaction in the belief that 
the person depositing or paying the consideration was a citizen 
of the United States. 
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL
PENALTY.—A person that violates, or 
attempts or conspires to violate, this section shall be fined 
under title 18, imprisoned for not more than 5 years, or both. 
‘‘(2) FORFEITURE.—The following shall be forfeited to the 
Government: 
‘‘(A) A vessel, a facility for building or repairing vessels, 
or an interest in a vessel or such a facility, that is sold, 
mortgaged, leased, chartered, delivered, transferred, or 
documented, or agreed to be sold, mortgaged, leased, char-
tered, delivered, transferred, or documented, in violation 
of this section.
H. R. 1442—170
‘‘(B) Stock and other securities sold or transferred, 
or agreed to be sold or transferred, in violation of this 
section. 
‘‘(C) A vessel departing in violation of subsection (a)(6). 
‘‘§ 56103. Conditional approvals 
‘‘(a) IN GENERAL.—In approving an act or transaction under 
section 56101 or 56102 of this title, the Secretary of Transportation 
may do so absolutely or upon conditions the Secretary considers 
advisable. The Secretary shall state the conditions in the notice 
of approval. 
‘‘(b) VIOLATIONS.—A violation of a condition of approval is sub-
ject to the same penalties as a violation resulting from an act 
done without the required approval. The violation occurs at the 
time the condition is violated. 
‘‘§ 56104. Penalty for false statements 
‘‘A person that knowingly makes a false statement of a material 
fact to the Secretary of Transportation or another officer, employee, 
or agent of the Department of Transportation, to obtain the Sec-
retary’s approval under section 56101 or 56102 of this title, shall 
be fined under title 18, imprisoned for not more than 5 years, 
or both. 
‘‘§ 56105. Forfeiture procedure 
‘‘(a) IN GENERAL.—A forfeiture under this chapter may be 
enforced in the same way as a forfeiture under the laws on the 
collection of duties. However, such a forfeiture may be remitted 
without seizure of the vessel. 
‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter 
to enforce a forfeiture, a prior criminal conviction of a person 
for a violation of this chapter with respect to the subject matter 
of the forfeiture is prima facie evidence of the violation against 
the person convicted.
‘‘CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS
‘‘Sec. 
‘‘56301.
General authority. 
‘‘56302.
Charter terms. 
‘‘56303.
Compensation. 
‘‘56304.
Disputed compensation. 
‘‘56305.
Vessel encumbrances. 
‘‘56306.
Use and transfer of vessels. 
‘‘56307.
Return of vessels.
‘‘§ 56301. General authority 
‘‘During a national emergency declared by Presidential 
proclamation, or a period for which the President has proclaimed 
that the security of the national defense makes it advisable, the 
Secretary of Transportation may requisition or purchase, or requisi-
tion or charter the use of, a vessel owned by citizens of the United 
States, a documented vessel, or a vessel under construction in 
the United States. 
‘‘§ 56302. Charter terms 
‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not 
ownership under this chapter, the Secretary of Transportation, 
at the time of requisition or as soon thereafter as the situation
H. R. 1442—171
allows, shall offer the person entitled to possession of the vessel 
a charter containing—
‘‘(1) the terms the Secretary believes should govern the 
relationship between the United States Government and the 
person; and 
‘‘(2) the rate of hire the Secretary considers just compensa-
tion for the use of the vessel and the services required under 
the charter. 
‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the 
charter and rate of hire, the parties shall proceed as provided 
in section 56304 of this title. 
‘‘§ 56303. Compensation 
‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of 
Transportation shall determine and pay just compensation for a 
vessel requisitioned under this chapter. 
‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel 
may not be considered enhanced by the circumstances requiring 
its requisition. Consequential damages arising from the requisition 
may not be paid. 
‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.—
‘‘(1) IF PAID.—If a construction-differential subsidy has been 
paid for the vessel, the value of the vessel at the time of 
requisition shall be determined under section 802 of the Mer-
chant Marine Act, 1936. 
‘‘(2) IF NOT PAID.—If a construction-differential subsidy has 
not been paid for the vessel, the value of any national defense 
features previously paid for by the United States Government 
shall be excluded. 
‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost 
or damaged by a risk assumed by the Government under the 
charter, but a valuation for the vessel or a means of compensation 
has not been agreed to, the Secretary shall pay just compensation 
for the loss or damage, to the extent the person is not reimbursed 
through insurance. 
‘‘§ 56304. Disputed compensation 
‘‘If the person entitled to compensation disputes the amount 
of just compensation determined by the Secretary of Transportation 
under this chapter, the Secretary shall pay the person, as a ten-
tative advance, 75 percent of the amount determined. The person 
may bring a civil action against the United States to recover just 
compensation. If the tentative advance paid under this section 
is greater than the amount of the court’s judgment, the person 
shall refund the difference. 
‘‘§ 56305. Vessel encumbrances 
‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel 
does not prevent the requisition of the vessel under this chapter. 
‘‘(b) DEPOSIT IN TREASURY.—
‘‘(1) IN GENERAL.—If an encumbrance exists, the Secretary 
of Transportation may deposit part of the compensation or 
advance of compensation to be paid under this chapter (but 
not more than the total amount of all encumbrances) in a 
fund in the Treasury. The Secretary shall publish notice of 
the creation of the fund in the Federal Register.
H. R. 1442—172
‘‘(2) AVAILABILITY
OF
AMOUNTS
DEPOSITED.—Amounts 
deposited in the fund shall be available to pay the compensation 
or any of the encumbrances (including encumbrances stipulated 
to in a court of the United States or a State) existing at 
the time the vessel was requisitioned. 
‘‘(c) CIVIL ACTION.—
‘‘(1) IN GENERAL.—Within 6 months after publication of 
notice under subsection (b), the holder of an encumbrance may 
bring a civil action in admiralty, according to the principles 
of libels in rem, against the fund. 
‘‘(2) VENUE.—The action must be brought in the district 
court of the United States—
‘‘(A) from whose custody the vessel was or may be 
requisitioned; or 
‘‘(B) in whose district the vessel was located when 
it was requisitioned. 
‘‘(3) SERVICE OF PROCESS.—Service of process shall be made 
on the appropriate United States Attorney, the Attorney Gen-
eral, and the Secretary, in the manner provided by the Federal 
Rules of Civil Procedure (28 App. U.S.C.). Notice of the action 
shall be given to all interested persons as ordered by the 
court. 
‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall pro-
ceed and be determined according to the principles of law 
and the rules of practice applicable in like cases between private 
parties. 
‘‘§ 56306. Use and transfer of vessels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, 
recondition, reconstruct, operate, or charter for operation, a vessel 
acquired under this chapter. 
‘‘(b) TRANSFER
TO
OTHER
AGENCIES.—The Secretary may 
transfer the possession or control of a vessel acquired under this 
chapter to another department or agency of the United States 
Government on terms and conditions approved by the President. 
The department or agency shall promptly reimburse the Secretary 
for expenditures for just compensation, purchase price, charter hire, 
repairs, reconditioning, or reconstruction. 
‘‘§ 56307. Return of vessels 
‘‘When a vessel requisitioned for use but not ownership is 
returned to the owner, the Secretary of Transportation shall—
‘‘(1) return the vessel in a condition at least as good as 
when taken, less ordinary wear and tear; or 
‘‘(2) pay the owner an amount sufficient to recondition 
the vessel to that condition, less ordinary wear and tear.
‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY 
NEUTRALITY ACT
‘‘Sec. 
‘‘56501.
Definition. 
‘‘56502.
Adjusting obligations and arranging maintenance. 
‘‘56503.
Types of adjustments and arrangements. 
‘‘56504.
Changes in adjustments and arrangements.
‘‘§ 56501. Definition 
‘‘In this chapter, the term ‘essential vessel’ means a vessel 
that is—
H. R. 1442—173
‘‘(1)(A) security for a mortgage indebtedness to the United 
States Government; or 
‘‘(B) constructed under this subtitle or required by a con-
tract under this subtitle to be operated on a certain essential 
foreign trade route; and 
‘‘(2) necessary in the interests of commerce and national 
defense to be maintained in condition for prompt use. 
‘‘§ 56502. Adjusting obligations and arranging maintenance 
‘‘(a) GENERAL AUTHORITY.—On written application, the Sec-
retary of Transportation may adjust obligations and arrange for 
maintenance of an essential vessel as provided in this chapter 
if the Secretary determines, after any investigation or proceeding 
the Secretary considers desirable, that—
‘‘(1) the operation of the vessel in the service, route, or 
line to which it is assigned under this subtitle, or in which 
it otherwise would be operated, is not—
‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 
441 et seq.) or a proclamation issued under that Act; or 
‘‘(B) compatible with maintaining the availability of 
the vessel for national defense and commerce; 
‘‘(2) it is not feasible under existing law to employ the 
vessel in any other service or operation in foreign or domestic 
trade (except temporary or emergency operation under section 
56503(b)(5) of this title); and 
‘‘(3) the applicant, because of the restrictions of the Neu-
trality Act of 1939 (22 U.S.C. 441 et seq.) or the withdrawal 
of vessels for national defense under paragraph (1), is not 
earning or will not earn a reasonable return on the capital 
necessarily employed in its business. 
‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under 
subsection (a) shall continue in effect only as long as the cir-
cumstances described in subsection (a) continue to exist. 
‘‘§ 56503. Types of adjustments and arrangements 
‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrange-
ment under this chapter shall include suspension of—
‘‘(1) the requirement to operate the vessel in foreign trade 
under the applicable operating-differential or construction-dif-
ferential subsidy contract or mortgage or other agreement; and 
‘‘(2) the right to operating-differential subsidy for the vessel. 
‘‘(b) DISCRETIONARY ADJUSTMENTS
AND ARRANGEMENTS.—To 
the extent the Secretary of Transportation considers appropriate 
to carry out the purposes of this subtitle, an adjustment or arrange-
ment under this chapter may include any of the following: 
‘‘(1) Lay-up of the vessel by the owner or in the custody 
of the Secretary, with payment or reimbursement by the Sec-
retary of necessary and proper expenses (including reasonable 
overhead and insurance) or a fixed periodic allowance instead 
of payment or reimbursement. 
‘‘(2) Postponement, for not more than the total period of 
the lay-up, of the maturity date of each installment of the 
principal of obligations to the United States Government for 
the vessel (regardless of whether the maturity date is during 
a lay-up period), or rearrangement of those maturities. 
‘‘(3) Postponement or cancellation of interest accruing on 
the obligations during a lay-up period.
H. R. 1442—174
‘‘(4) Extension, for not more than the total period of the 
lay-up, of the 20-year life limitation for the vessel and other 
limitations and provisions of this subtitle based on a 20-year 
life. 
‘‘(5) Provision for temporary or emergency employment of 
the vessel (instead of lay-up) as may be practicable, with such 
arrangements for management of the vessel, payment of 
expenses, and application of the proceeds of the employment, 
as the Secretary may approve, with any period of operation 
being included as part of the lay-up period. 
‘‘(6) Payment to the Secretary, on termination of the 
arrangements with the applicant, of the applicant’s net profits 
(earned while the arrangements were in effect) in excess of 
10 percent a year on the capital necessarily employed in the 
applicant’s business, as reimbursement for obligations post-
poned or canceled and expenses incurred or paid by the Sec-
retary under this section. 
‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the 
applicant represented by a vessel of the applicant laid-up or oper-
ated under this section shall be included in capital necessarily 
employed in the applicant’s business. The Secretary may require 
a vessel laid-up or operated under this section to be security for 
reimbursement. 
‘‘§ 56504. Changes in adjustments and arrangements 
‘‘The Secretary of Transportation may change an adjustment 
or arrangement made under this chapter as the Secretary considers 
necessary to carry out this chapter.
‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS 
‘‘CHAPTER 571—GENERAL AUTHORITY
‘‘Sec. 
‘‘57101.
Placement of vessels in National Defense Reserve Fleet. 
‘‘57102.
Disposition of vessels not worth preserving. 
‘‘57103.
Sale of obsolete vessels in National Defense Reserve Fleet. 
‘‘57104.
Acquisition of vessels from sale of obsolete vessels. 
‘‘57105.
Acquisition of vessels for essential services, routes, or lines. 
‘‘57106.
Maintenance, improvement, and operation of vessels. 
‘‘57107.
Vessels for other agencies. 
‘‘57108.
Consideration of ballast and equipment in determining selling price. 
‘‘57109.
Operation of vessels purchased, chartered, or leased from Secretary of 
Transportation.
‘‘§ 57101. Placement of vessels in National Defense Reserve 
Fleet 
‘‘(a) IN
GENERAL.—Any vessel acquired by the Maritime 
Administration shall be placed in the National Defense Reserve 
Fleet maintained under section 11 of the Merchant Ship Sales 
Act of 1946 (50 App. U.S.C. 1744). 
‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under 
subsection (a) may not be traded out or sold from the Fleet, except 
as provided in section 57102, 57103, or 57104 or chapter 533, 
537, 573, or 575 of this title. 
‘‘§ 57102. Disposition of vessels not worth preserving 
‘‘(a) IN GENERAL.—If the Secretary of Transportation deter-
mines that a vessel owned by the Maritime Administration is of 
insufficient value for commercial or military operation to warrant