H. R. 1588—425
the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a), 1241(b),
or 1241f), or any other cargo preference law of the United States—
‘‘(1) a contractor may operate or employ in foreign com-
merce a foreign-flag vessel or foreign-flag vessel capacity as
a temporary replacement for a United States-documented vessel
or United States-documented vessel capacity that is activated
by the Secretary of Defense under an Emergency Preparedness
Agreement or under a primary Department of Defense-approved
sealift readiness program; and
‘‘(2) such replacement vessel or vessel capacity shall be
eligible during the replacement period to transport preference
cargoes subject to section 2631 of title 10, United States Code,
the Act of March 26, 1934 (46 U.S.C. App. 1241–1), and sections
901(a), 901(b), and 901b of the Merchant Marine Act, 1936
(46 U.S.C. App. 1241(a), 1241(b), and 1241b) to the same extent
as the eligibility of the vessel or vessel capacity replaced.
‘‘(g) REDELIVERY AND LIABILITY OF UNITED STATES FOR DAM-
AGES.—
‘‘(1) IN GENERAL.—All commercial transportation resources
activated under an Emergency Preparedness Agreement shall,
upon termination of the period of activation, be redelivered
to the contractor in the same good order and condition as
when received, less ordinary wear and tear, or the Secretary
of Defense shall fully compensate the contractor for any nec-
essary repair or replacement.
‘‘(2) LIMITATION ON LIABILITY OF U.S.—Except as may be
expressly agreed to in an Emergency Preparedness Agreement,
or as otherwise provided by law, the Government shall not
be liable for disruption of a contractor’s commercial business
or other consequential damages to a contractor arising from
activation of commercial transportation resources under an
Emergency Preparedness Agreement.
‘‘§ 53108. Regulatory relief
‘‘(a) OPERATION IN FOREIGN COMMERCE.—A contractor for a
vessel included in an operating agreement under this chapter may
operate the vessel in the foreign commerce of the United States
without restriction.
‘‘(b) OTHER RESTRICTIONS.—The restrictions of section 901(b)(1)
of the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1)) con-
cerning the building, rebuilding, or documentation of a vessel in
a foreign country shall not apply to a vessel for any day the
operator of that vessel is receiving payments for operation of that
vessel under an operating agreement under this chapter.
‘‘(c) TELECOMMUNICATIONS
EQUIPMENT.—The telecommuni-
cations and other electronic equipment on an existing vessel that
is redocumented under the laws of the United States for operation
under an operating agreement under this chapter shall be deemed
to satisfy all Federal Communications Commission equipment cer-
tification requirements, if—
‘‘(1) such equipment complies with all applicable inter-
national agreements and associated guidelines as determined
by the country in which the vessel was documented immediately
before becoming documented under the laws of the United
States;
H. R. 1588—426
‘‘(2) that country has not been identified by the Secretary
as inadequately enforcing international regulations as to that
vessel; and
‘‘(3) at the end of its useful life, such equipment will be
replaced with equipment that meets Federal Communications
Commission equipment certification standards.
‘‘§ 53109. Special rule regarding age of participating fleet
vessel
‘‘Any age restriction under section 53102(b)(3) or 53106(c)(3)
shall not apply to a participating fleet vessel during the 30-month
period beginning on the date the vessel begins operating under
an operating agreement under this title, if the Secretary determines
that the contractor for the vessel has entered into an arrangement
to obtain and operate under the operating agreement for the partici-
pating fleet vessel a replacement vessel that, upon commencement
of such operation, will be eligible to be included in the Fleet under
section 53102(b).
‘‘§ 53110. Regulations
‘‘The Secretary and the Secretary of Defense may each prescribe
rules as necessary to carry out their respective responsibilities
under this chapter.
‘‘§ 53111. Authorization of appropriations
‘‘There are authorized to be appropriated for payments under
section 53106, to remain available until expended—
‘‘(1) $156,000,000 for each of fiscal years 2006, 2007, and
2008;
‘‘(2) $174,000,000 for each of fiscal years 2009, 2010, and
2011; and
‘‘(3) $186,000,000 for each fiscal year thereafter through
fiscal year 2015.’’.
(b) CONFORMING AMENDMENT.—The table of subtitles at the
beginning of title 46, United States Code, is amended by inserting
before the item relating to chapter VI the following:
‘‘V. MERCHANT MARINE ...................................................................................53101’’.
SEC. 3532. RELATED AMENDMENTS TO EXISTING LAW.
(a) AMENDMENT TO SHIPPING ACT, 1916.—Section 9 of the Ship-
ping Act, 1916 (46 U.S.C. App. 808) is amended—
(1) by redesignating subsection (e), as added by section
1136(b) of Public Law 104–324 (110 Stat. 3987), as subsection
(f); and
(2) by amending subsection (e), as added by section 6
of Public Law 104–239 (110 Stat. 3132), to read as follows:
‘‘(e) Notwithstanding subsection (c)(2), the Merchant Marine
Act, 1936, or any contract entered into with the Secretary of
Transportation under that Act, a vessel may be placed under a
foreign registry, without 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 title 46, United States Code,
H. R. 1588—427
by the owner of the vessel placed under the foreign registry;
and
‘‘(B) the replacement vessel is not more than 10 years
of age on the date of that documentation; or
‘‘(2) an operating agreement covering the vessel under
chapter 531 of title 46, United States Code, has expired.’’.
(b) MERCHANT MARINE ACT, 1936.—Section 512 of the Merchant
Marine Act, 1936 (46 U.S.C. 1162) is amended—
(1) by striking ‘‘Notwithstanding’’ and inserting ‘‘(a) Except
as provided in subsection (b), notwithstanding’’; and
(2) by adding at the end the following:
‘‘(b)(1) Except as provided in paragraph (2), the restrictions
and requirements of section 506 shall terminate upon the expiration
of the 20-year period beginning on the date of the original delivery
of the vessel from the shipyard for operation of a vessel in any
domestic trade in which it has operated at any time since 1996.
‘‘(2) Paragraph (1) shall not affect any requirement to make
payments under section 506.’’.
SEC. 3533. INTERIM RULES.
The Secretary of Transportation and the Secretary of Defense
may each prescribe interim rules necessary to carry out their respec-
tive responsibilities under this subtitle and the amendments made
by this subtitle. For this purpose, the Secretaries are excepted
from compliance with the notice and comment requirements of
section 553 of title 5, United States Code. All interim rules pre-
scribed under the authority of this section that are not earlier
superseded by final rules shall expire no later than 270 days after
the effective date of this subtitle.
SEC. 3534. REPEALS AND CONFORMING AMENDMENTS.
(a) REPEALS.—The following provisions are repealed:
(1) Subtitle B of title VI of the Merchant Marine Act,
1936 (46 U.S.C. App. 1187 et seq.).
(2) Section 804 of the Merchant Marine Act, 1936 (46
U.S.C. App. 1222).
(b) CONFORMING AMENDMENTS.—
(1) Section 12102(d)(4) of title 46, United States Code,
is amended by inserting ‘‘or chapter 531 of title 46, United
States Code’’ after ‘‘Merchant Marine Act, 1936’’.
(2) Section 1137 of Public Law 104–324 (46 U.S.C. App.
1187 note) is amended by striking ‘‘section 651(b) of the Mer-
chant Marine Act, 1936’’ and inserting ‘‘section 53102(b) of
title 46, United States Code’’.
SEC. 3535. GAO STUDY OF ADJUSTMENT OF OPERATING AGREEMENT
PAYMENT CRITERIA.
(a) IN GENERAL.—The Comptroller General of the United States
shall conduct a study of the potential impact of amending section
53106 of title 46, United States Code, as amended by this Act—
(1) to increase or decrease the 7,500 ton limitation;
(2) to apply the limitation to bagged cargo as well as
bulk cargo; and
(3) to so modify the tonnage limitation and apply it to
bagged cargo as well as bulk cargo.
(b) MATTERS TO BE ADDRESSED.—
H. R. 1588—428
(1) SPECIFIC IMPACTS.—As part of the study required by
subsection (a), the Comptroller General shall address, in par-
ticular, the impact of such amendments on—
(A) the Maritime Security Fleet established under
chapter 531 of title 46, United States Code, as amended
by this Act;
(B) the civilian bulk cargo preference program under
section 901(a), 901(b), or 901b of such Act (46 U.S.C. App.
1241(a), 1241(b), and 1241f); and
(C) operations of vessels under sections 901a through
901k of such Act (46 U.S.C. App. 1241e through 1241o,
the Food for Peace Act of 1966 (7 U.S.C. 1707a(b)(8)),
or any other statute in pari materia.
(2) CERTAIN ASPECTS.—In carrying out paragraph (1), the
Comptroller General shall consider, among other matters—
(A) increased or decreased costs to the overall cargo
preference program, including transportation costs (for both
land and water transportation);
(B) effects on ports;
(C) the number of shipments that would be affected;
(D) increased or decreased administrative and compli-
ance burdens for carriers and Federal agencies; and
(E) increases or decreases in the number of United
States-flag operators participating in the cargo preference
program.
(3) BALANCING BENEFITS.—In the study, the Comptroller
General shall also address whether and how such amendments
could result in achieving an appropriate balance of benefits
between participants in the Maritime Security Fleet program
and participants in the cargo preference program.
(c) REPORT.—The Comptroller General shall transmit a report
of the study, including findings, conclusions, and recommendations
(including legislative recommendations, if any), to the Committee
on Armed Services of the House of Representatives and the Com-
mittee on Armed Services and the Committee on Commerce,
Science, and Transportation of the Senate within 9 months after
the date of the enactment of this Act.
(d) AUTHORITY.—In order to conduct the study required by
subsection (a), the Comptroller General, or any of the Comptroller
General’s duly authorized representatives, shall have access to any
books, accounts, documents, papers, and records that relate to the
information required to complete the study of owners or operators
of vessels—
(1) under operating agreements under subtitle B of title
VI of the Merchant Marine Act, 1936 (46 U.S.C. App. 651
et seq.) or chapter 531 of title 46, United States Code, as
amended by this Act; and
(2) that accept bulk cargo subject to the cargo preference
laws of the United States.
SEC. 3536. DEFINITIONS.
In this subtitle, the definitions set forth in section 53101 of
title 46, United States Code, as amended by this Act, shall apply.
SEC. 3537. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided in subsections (b) and
(c), this subtitle shall take effect October 1, 2004.