‘‘SEC. 408. FUNDING FOR OPERATING AGREEMENTS.
‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—For en-
tering into operating agreements under this title there are
authorized 
to 
be 
appropriated 
to 
the 
Secretary
$1,200,000,000 for fiscal year 1995. Amounts appro-
priated under this subsection shall remain available until
expended.
‘‘(b) TRANSFER OF BALANCES FROM OPERATING
DIFFERENTIAL SUBSIDY PROGRAM.—Any amounts other-
wise available for operating differential subsidy contracts
under title VI that are no longer required for those con-
tracts are available, until expended, for operating agree-
ments.
‘‘SEC. 409. DEFINITIONS.
‘‘In this title:
‘‘(1) 
CONTRACTOR.—The 
term 
‘contractor’
means an owner or operator of a vessel that enters
into an operating agreement for the vessel with the
Secretary.
‘‘(2) ELIGIBILITY
DECISION
APPLICATION.—
The term ‘eligibility decision application’ means an
application for a decision by the Secretary under
section 403 that a vessel is eligible to be enrolled in
the Fleet.
‘‘(3) ELIGIBLE VESSEL.—The term ‘eligible ves-
sel’ means a vessel that the Secretary decides under
section 403 is eligible to be enrolled in the Fleet.
‘‘(4) FLEET.—The term ‘Fleet’ means the Mar-
itime Security Fleet established under section 402.
‘‘(5) OPERATING AGREEMENT.—The term ‘op-
erating agreement’ means an operating agreement
entered into by the Secretary under section 404.
‘‘(6) RELATED
PARTY.—The term ‘related
party’ means, with respect to a contractor or other
person—
‘‘(A) a holding company, subsidiary, affili-
ate, or association of the person; and
‘‘(B) an officer, director, other executive,
or agent of the person or of an entity referred
to in paragraph (1).
‘‘(7) SECRETARY.—The term ‘Secretary’ means
the Secretary of Transportation.
‘‘(8) UNITED STATES DOCUMENTED VESSEL.—
The term ‘United States documented vessel’ means
a vessel that is documented under chapter 121 of
title 46, United States Code.’’.
SEC. 4. OPERATING-DIFFERENTIAL SUBSIDY CONTRACTS.
(a) TERMINATION OF EXISTING CONTRACTS.—Not-
withstanding any other provision of this Act, any contract
in effect under title VI of the Merchant Marine Act, 1936
(46 App. U.S.C. 1171 et seq.), on the day before the date
of enactment of this Act shall continue in effect under its
terms and terminate as set forth in the contract, unless
voluntarily terminated on an earlier date by the persons
(other than the United States Government) that are par-
ties to the contract.
(b) AGE ACCELERATION OF BULK CARGO ODS VES-
SELS.—Section 506 of the Merchant Marine Act, 1936
(46 App. U.S.C. 1156) is amended—
(1) by inserting ‘‘(a)’’ after ‘‘SEC. 506.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) For purposes of this section, any liquid or dry
bulk cargo vessel for which operating-differential subsidy
is required to be paid under a contract under title VI that
is in force on May 19, 1993, shall, effective upon the ter-
mination date of the contract (as set forth in the contract
as in effect on May 19, 1993, be deemed to have reached
the age of 20 years.’’.
(c) RESTRICTIONS ON OPERATIONS OF ODS VES-
SELS.—Title VI of the Merchant Marine Act, 1936 (46
App. U.S.C. 1171 et seq.), as amended by this Act, is fur-
ther amended by adding at the end the following:
‘‘SEC. 616. LIMITATION ON APPLICATION OF RESTRICTIONS
ON OPERATIONS.
‘‘(a) Sections 605(c) and 804, this section, and the
essential service requirements in section 601(a) and
603(a), do not apply to a contractor if—
‘‘(1) the contractor submits an eligibility deci-
sion application to the Secretary under title IV for
all of the vessels operated by the contractor under
an operating-differential subsidy contract; and
‘‘(2) all of those vessels for which operating
agreements are offered by the Secretary under title
IV are enrolled in the Maritime Security Fleet.
‘‘(b)(1) With respect to the operations of a contractor
receiving operating-differential subsidy for liner vessels on
a particular trade route, as defined in that contractor’s
contract in effect on January 1, 1993, that operator shall
not be subject to the restrictions of either section 605(c)
or section 804 with respect to operations on that trade
route, commencing at such time as—
‘‘(A) that operator transfers 50 percent or more
of its vessels that were operating on that trade route
as of January 1, 1993, from the operating-differen-
tial subsidy program to the Maritime Security Fleet
program under title IV; or
‘‘(B) that operator is the only contractor receiv-
ing operating-differential subsidy with respect to
that trade route, and all other United States-flag
liner operators operating a vessel on that trade route
are operating on that trade route only vessels for
which there are in effect operating agreements under
title IV.
‘‘(2) With respect to any contractor receiving operat-
ing-differential subsidy for liner vessels on Maritime Ad-
ministration Essential Trade Route 1, 2, or 8, that opera-
tor shall not be subject to the restrictions of either section
605(c) or section 804 with respect to operations on any
of those trade routes, commencing at such time as pay-
ments begin to accrue on behalf of another United States-
flag operator that is a party to an operating agreement
under title IV which provides liner service on Maritime
Administration Essential Trade Route 2.’’.
(d) ELIMINATION
OF
TRADE
ROUTE
RESTRIC-
TIONS.—Section 809(a) of the Merchant Marine Act,
1936 (46 U.S.C. 1213(a)) is amended by adding at the
end the following: ‘‘This subsection shall not apply to con-
tracts under title IV or funds for such contracts.’’.
SEC. 5. ELIMINATION OF CONSTRUCTION DIFFERENTIAL
SUBSIDY RESTRICTIONS.
Title V of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1151 et seq.), is amended by adding at the end
the following:
‘‘SEC. 512. LIMITATION ON RESTRICTIONS.
‘‘Notwithstanding any other provision of law or con-
tract, all restrictions and requirements under sections
503, 506, and 802 applicable to a liner vessel constructed,
reconstructed, or reconditioned with the aid of construc-
tion-differential subsidy shall terminate upon the expira-
tion of the 25-year period beginning on the date of the
original delivery of the vessel from the shipyard.’’.
SEC. 6. DEFINITIONS APPLICABLE TO MERCHANT MARINE
ACT, 1936.
Section 905 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1244), is amended—
(1) by striking subsection (a) and inserting the
following:
‘‘(a) Each of the terms ‘foreign commerce’ and ‘for-
eign trade’ mean—
‘‘(1) trade between the United States and a for-
eign country; or
‘‘(2) trade between foreign ports.’’;
(2) by striking subsection (c) and inserting the
following:
‘‘(c) The term ‘citizen of the United States’ means
a person eligible to own a documented vessel under chap-
ter 121 of title 46, United States Code.’’, and
(3) by adding at the end the following:
‘‘(h) The term ‘foreign subsidized shipyard’ means a
shipyard that—
‘‘(1) receives or benefits from, directly or indi-
rectly, a shipyard subsidy for the construction of
vessels; and
‘‘(2) is located in a foreign country that has not
signed a trade agreement with the United States
that provides for the elimination of subsidies for
that shipyard.
‘‘(i) The term ‘subsidy’ includes any of the following:
‘‘(1) Officially supported export credits and de-
velopment assistance.
‘‘(2) Direct official operating support to the
commercial shipbuilding and repair industry, or to a
related entity that favors the operation of shipbuild-
ing and repair, including—
‘‘(A) grants;
‘‘(B) loans and loan guarantees other than
those available on the commercial market;
‘‘(C) forgiveness of debt;
‘‘(D) equity infusions on terms inconsistent
with commercially reasonable investment prac-
tices;
‘‘(E) preferential provision of goods and
services; and
shipbuilding or repair to enter into anticompetitive
arrangements.
‘‘(7) Any indirect support directly related, in
law or in fact, to shipbuilding and repair at national
yards, including any public assistance favoring ship-
owners with an indirect effect on shipbuilding or re-
pair activities, and any assistance provided to suppli-
ers of significant inputs to shipbuilding, which re-
sults in benefits to domestic shipbuilders.
‘‘(8) Any export subsidy identified in the Illus-
trative List of Export Subsidies in the Annex to the
Agreement on Interpretation and Application of Ar-
ticles VI, XVI, and XXIII of the General Agreement
on Tariffs and Trade or any other export subsidy
that may be prohibited as a result of the Uruguay
Round of trade negotiations.’’.
SEC. 7. GOVERNMENT-IMPELLED CARGOES.
(a) VESSELS
ELIGIBLE
FOR
CARGOES.—Section
901(b) of the Merchant Marine Act, 1936 (46 App. U.S.C.
1241(b)) is amended—
(1) in paragraph (1), by striking ‘‘For purposes
of this section, the term ‘privately owned United
States-flag commercial vessels’ ’’ and all that follows
through the end of the paragraph; and
(2) by adding at the end the following new
paragraphs:
‘‘(3) In this section and section 901b, the term ‘pri-
vately owned United States-flag commercial vessel’ means
a privately owned vessel that is documented under chapter
121 of title 46, United States Code, that—
‘‘(A) was built in the United States;
‘‘(B) was documented under chapter 121 of
title 46, United States Code, before May 19, 1993;
‘‘(C) does not transport under section 901b or
this section on any voyage more than 12,000 tons of
bulk cargo (as defined in section 3 of the Shipping
Act of 1984), and—
‘‘(i) was built in a foreign shipyard under
a contract entered into on or before May 19,
1993;
‘‘(ii) is built under a contract entered into
after that date, in a foreign shipyard that on
the date the contract is entered is not a foreign
subsidized shipyard; or
‘‘(iii) is subject to an operating agreement
under title IV;
‘‘(D)(i) is built under a contract entered into
after May 19, 1993, in a foreign shipyard that on
the date the contract was entered is not a foreign
subsidized shipyard; and
‘‘(ii) has not been documented in a foreign
country before it is documented under chapter 121
of title 46, United States Code; or
‘‘(E) has been documented under chapter 121
of title 46, United States Code, for at least 3 con-
secutive years, did not transport any equipment, ma-
terials, or commodities during that period under this
section or section 901b, and—
‘‘(i) was built in a foreign shipyard under
a contract entered into before May 19, 1993; or
‘‘(ii) is built under a contract entered into
after that date, in a foreign shipyard that on
the date the contract was entered is not a for-
eign subsidized shipyard.
‘‘(4) In paragraph (3), the term ‘built’ includes re-
built.’’.
(b) CLERICAL AMENDMENT.—Section 901b of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1241f) is
amended by adding at the end the following:
‘‘(f) For the definition of the term ‘privately owned
United States-flag commercial vessel’, see section
901(b)(3).’’.
SEC. 8. VESSEL FINANCING.
(a) ELIMINATION OF MORTGAGEE RESTRICTIONS.—
Section 31322(a) of title 46, United States Code, is
amended to read as follows:
‘‘(a) A preferred mortgage is a mortgage, whenever
made, that—
‘‘(1) includes the whole of the vessel;
‘‘(2) is filed in substantial compliance with sec-
tion 31321 of this title; and
‘‘(3)(A) covers a documented vessel; or
‘‘(B) covers a vessel for which an application
for documentation is filed that is in substantial com-
pliance with the requirements of chapter 121 of this
title and the regulations prescribed under that chap-
ter.’’.
(b) ELIMINATION OF TRUSTEE RESTRICTIONS.—
(1) REPEAL.—Section 31328 of title 46, United
States Code, is repealed.
(2) 
CONFORMING
AMENDMENT.—Section
31330(b) of title 46, United States Code, is amend-
ed in paragraphs (1), (2), and (3) by striking
‘‘31328 or’’ each place it appears.
(c) REMOVAL OF MORTGAGE RESTRICTIONS.—Sec-
tion 9 of the Shipping Act, 1916 (46 App. U.S.C. 808),
as amended by this Act, is further amended—
(1) in subsection (c)—
(A) by striking ‘‘31328’’ and inserting
‘‘12106(e)’’; and
(B) in paragraph (1) by striking ‘‘mort-
gage,’’ each place it appears; and
(2) in subsection (d)—
(A) in paragraph (1) by striking ‘‘transfer,
or mortgage’’ and inserting ‘‘or transfer’’;
(B) in paragraph (2) by striking ‘‘trans-
fers, or mortgages’’ and inserting ‘‘or trans-
fers’’;
(C) in paragraph (3)(B) by striking
‘‘transfers, or mortgages’’ and inserting ‘‘or
transfers’’; and
(D) in paragraph (4) by striking ‘‘trans-
fers, or mortgages’’ and inserting ‘‘or trans-
fers’’.
(d) LEASE FINANCING.—Section 12106 of title 46,
United States Code, is amended by adding at the end the
following new subsections:
‘‘(e)(1) A certificate of documentation for a vessel
may be endorsed with a coastwise endorsement if—
‘‘(A) the vessel is eligible for documentation
under section 12102;
‘‘(B) the vessel is otherwise qualified under this
section to be employed in the coastwise trade;
‘‘(C) the person that owns the vessel, or any
other person that owns or controls the person that
owns the vessel, is primarily engaged in leasing or
other financing transactions;
‘‘(D) the vessel is under a demise charter to a
person qualifying as a citizen of the United States
for engaging in the coastwise trade under section 2
of the Shipping Act, 1916; and
‘‘(E) the demise charter is for—
‘‘(i) a period of at least 3 years; or
‘‘(ii) such shorter period as may be pre-
scribed by the Secretary.
‘‘(2) On termination of a demise charter required
under paragraph (1)(D), the coastwise endorsement may
be continued for a period not to exceed 6 months on any
terms and conditions that the Secretary of Transportation
may prescribe.
‘‘(f) For purposes of the first proviso of section 27
of the Merchant Marine Act, 1920, section 2 of the Ship-
ping Act, 1916, and section 12102(a), a vessel meeting
the criteria of subsection (d) or (e) is deemed to be owned
exclusively by citizens of the United States.’’.
SEC. 9. PLACEMENT OF VESSELS UNDER FOREIGN REG-
ISTRY.
(a) IN GENERAL.—Section 9 of the Shipping Act,
1916 (46 App. U.S.C. 808), as amended by this Act, is
further amended by adding at the end the following:
‘‘(e) Notwithstanding subsection (c)(2), the Merchant
Marine Act, 1936, or any contract entered into with the
Secretary under that Act, a vessel may be placed under
a foreign registry, without approval of the Secretary, if—
‘‘(1)(A) the Secretary determines that at least
one replacement vessel of a capacity that is equiva-
lent or greater, as measured by deadweight tons,
gross tons, or container equivalent units, as appro-
priate, is documented under chapter 121 of title 46,
United States Code, 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;
‘‘(2)(A) the owner of the vessel has applied for
an operating agreement under title IV of the Mer-
chant Marine Act, 1936; and
‘‘(B) the Secretary, due to the unavailability of
funds, has not awarded that owner an operating
agreement within 60 days after the date of that ap-
plication; or
‘‘(3)(A) before the expiration of an operating
agreement entered into under title IV of the Mer-
chant Marine Act, 1936, the owner has applied for
a new operating agreement; and
‘‘(B) the Secretary, due to the unavailability of
funds, has not awarded the owner an operating
agreement before the later of—
‘‘(i) 60 days after the application for a new
operating agreement; or
‘‘(ii) the date of expiration of the operating
agreement.
‘‘(f) The Secretary shall give notice and an oppor-
tunity for a hearing for all approvals applied for under
subsection (c)(2) for oceangoing merchant vessels that are
of at least 3,000 gross tons.’’.
(b) APPLICATION.—The amendment made by sub-
section (a) applies to vessels that are placed under foreign
registry after the date of enactment of this Act and re-
placement vessels documented in the United States after
that date.
(c) COURT SALES OF VESSELS.—Section 31329 of
title 46, United States Code, is amended to read as fol-
lows:
‘‘§ 31329. Court sales of documented vessels
‘‘When a documented vessel is sold by order of a dis-
trict court to a mortgagee not eligible to own a docu-
mented vessel—
‘‘(1) that sale is not a sale foreign within the
terms of the first proviso of section 27 of the Mer-
chant Marine Act, 1920 (46 App. U.S.C. 883); and
‘‘(2) unless the vessel is transferred to a foreign
registry, the vessel may be operated only with the
approval of the Secretary of Transportation.’’.
SEC. 10. SERIES CONSTRUCTION ASSISTANCE.
The Merchant Marine Act, 1936 (46 App. U.S.C.
1101 et seq.) is amended by adding at the end the follow-
ing:
‘‘TITLE XIV—SERIES
CONSTRUCTION ASSISTANCE
‘‘SEC. 1401. PAYMENT OF ASSISTANCE AUTHORIZED.
‘‘(a) IN GENERAL.—The Secretary of Transportation
(hereinafter in this title referred to as the ‘Secretary’)
may, subject to the availability of appropriations, pay as-
sistance in accordance with this title to the owner of a
shipyard that is located in the United States for the con-
struction (including outfitting and equipping) of any com-
mercial vessel that is one of a series of vessels for which
payment of assistance under this section to the owner is
approved by the Secretary under section 1402.
‘‘(b) AMOUNT OF ASSISTANCE.—The total amount of
assistance paid under this section with respect to a vessel
shall be equal to the series transition payment determined
for the vessel under section 1403(a).
‘‘SEC. 1402. APPROVAL OF ASSISTANCE FOR CONSTRUC-
TION OF SERIES OF VESSELS.
‘‘(a) APPROVAL OF ASSISTANCE.—
‘‘(1) IN GENERAL.—The Secretary may approve
payment of assistance under section 1401 for con-
struction of a series of vessels in a shipyard if—
‘‘(A) the owner of the shipyard submits an
application for that assistance in accordance
with section 1405;
‘‘(B) the Secretary makes the determina-
tions described in subsection (b); and
‘‘(C) the Secretary determines that pay-
ment of the assistance will contribute to main-
taining national vessel construction capabilities
that are essential in time of war or national
emergency.
‘‘(2) LIMITATION.—The Secretary may not ap-
prove assistance under this section for a series of
vessels if the series transition payment determined
under section 1403(a) for any vessel in the series is
greater than 50 percent of the estimate of the cost
of constructing the vessel determined by the Sec-
retary under section 1403(b)(2).
‘‘(b) DETERMINATIONS BY SECRETARY.—The Sec-
retary may not approve assistance for construction of a
series of vessels in a shipyard unless the Secretary has
determined the following:
‘‘(1) VESSEL
REQUIREMENTS.—The vessels
are—
‘‘(A) commercial vessels of at least 10,000
gross tons; and
‘‘(B) commercially marketable on the inter-
national market.
‘‘(2) SHIPYARD REQUIREMENTS.—The shipyard
in which the vessels will be constructed—
‘‘(A) is located in the United States; and
‘‘(B) upon completion of construction of
the vessels, will be capable of constructing addi-
tional vessels of the same type as those in the
series for a price that is competitive in the
international market.
‘‘(3) APPLICANT
REQUIREMENTS.—The appli-
cant for the assistance—
‘‘(A) has the ability, financial resources,
and other qualifications necessary for construc-
tion of the vessels;
‘‘(B) has entered into a contract for the
construction of each of the first 2 vessels to be
constructed in the series, which may include a
contract for a vessel that will be constructed
without assistance under this title; and
‘‘(C) is the owner of the shipyard in which
the vessels will be constructed.
‘‘(4) CONTRACT REQUIREMENTS.—Each of the
contracts required under paragraph (3)(B) are bind-
ing obligations on the applicant and all other parties
to the contracts, except that such a contract may be
contingent on—
‘‘(A) the approval of assistance under this
title for construction of a vessel under the con-
tract; and
‘‘(B) the making of a guarantee or com-
mitment to guarantee obligations under title XI
for construction under the contract.
‘‘(5) PURCHASER REQUIREMENTS.—Each per-
son that is a purchaser of a vessel under a contract
required under paragraph (3)(B)—
‘‘(A) has the ability, financial resources,
and other qualifications necessary to own and
operate the vessel in commercial service; and
‘‘(B) is a party to the contract.
‘‘(6) SERIES TRANSITION PAYMENT.—The se-
ries transition payment under section 1403 for each
vessel in the series.
‘‘(c) PRIORITY FOR CERTAIN SERIES OF VESSELS.—
In approving assistance under this title, the Secretary may
give priority to a series of vessels—
‘‘(1) if a smaller number of vessels in the series
are required to be constructed with assistance before
construction of that type of vessel becomes cost ef-
fective;
‘‘(2) for which the total of the series transition
payments determined under section 1403 for all ves-
sels in the series is less than that total for other se-
ries of vessels for which applications are submitted
for assistance under this title;
‘‘(3) that will be constructed in a shipyard with
respect to which assistance under this title has not
been provided; or
‘‘(4) that would contribute to the preservation
of a shipyard that would be essential in a time of
war or national emergency.
‘‘SEC. 1403. DETERMINATION OF SERIES TRANSITION PAY-
MENTS.
‘‘(a) IN GENERAL.—The Secretary shall determine
the series transition payment for each vessel in a series
of vessels for which an application for assistance under
this title is received by the Secretary.
‘‘(b) AMOUNT OF SERIES TRANSITION PAYMENT.—
The series transition payment for a vessel under sub-
section (a) is equal to the difference of—
‘‘(1) the estimated cost of completing construc-
tion of the vessel, as included in the application for
assistance submitted under section 1405; minus
‘‘(2) a reasonable estimate of the cost of con-
structing the vessel under similar plans and speci-
fications in a foreign shipyard that is considered by
the Secretary to be a fair and representative exam-
ple for purposes of determining the payment.
‘‘SEC. 1404. SERIES CONSTRUCTION AGREEMENT.
‘‘(a) IN GENERAL.—
‘‘(1) IN
GENERAL.—The Secretary shall, for
each series of vessels for which assistance is ap-
proved under section 1402, enter into a series con-
struction agreement with the owner of the shipyard
in which the series of vessels will be constructed,
under which the Secretary is required to pay the
owner assistance in accordance with a schedule es-
tablished under paragraph (2).
‘‘(2) SCHEDULE
FOR
PAYMENTS.—An agree-
ment under this subsection shall establish a schedule
for the payment of assistance under the agreement,
that is based on the construction schedule for vessels
for which the assistance is paid.
‘‘(3) 
TERMINATION
OF
AGREEMENT.—An
agreement under this subsection shall authorize the
Secretary to terminate the agreement if—
‘‘(A) a contract required under section
1402(b)(3)(B) is terminated by the purchaser
of the vessel under the contract, and the owner
of the shipyard does not enter into a new con-
tract for construction of the vessel within a pe-
riod which shall be specified in the agreement;
or
‘‘(B) the owner of the shipyard fails to
enter into contracts for construction of all ves-
sels in the series of vessels to which the agree-
ment applies, within a period which shall be
specified in the agreement.
‘‘(4) CONTINUING
EFFECT
OF
AGREEMENT
WITH
RESPECT
TO
VESSELS
COVERED
BY
CON-
TRACTS.—The termination of a series construction
agreement under paragraph (3) shall not affect the
effectiveness of the agreement with respect to vessels
for which a construction contract is in effect on the
date of termination.
‘‘(b) BINDING
OBLIGATION
OF
THE
UNITED
STATES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a requirement that the Secretary make
payments under a series construction agreement
under subsection (a) shall constitute a binding obli-
gation of the United States.
‘‘(2) TERMINATION
OF
OBLIGATION.—If the
Secretary terminates a series construction agreement
pursuant to subsection (a)(3), the obligation of the
United States under paragraph (1) to make pay-
ments under the agreement shall terminate with re-
spect to vessels for which no construction contract is
in effect on the date of termination of the agree-
ment.
‘‘(3) 
CONTINUING
AVAILABILITY
OF
AMOUNTS.—Amounts to be used to liquidate an obli-
gation under paragraph (1) that terminates under
paragraph (2) shall remain available to the Sec-
retary for the payment of assistance under this title.
‘‘SEC. 1405. APPLICATIONS FOR ASSISTANCE.
‘‘(a) SUBMITTAL.—A person desiring assistance
under this title shall, in accordance with this section, sub-
mit an application to the Secretary.
‘‘(b) CONTENTS OF APPLICATION.—An application
for assistance under this title with respect to a series of
vessels shall include the following:
‘‘(1) A detailed description of the type of ves-
sels included in the series, including plans and speci-
fications for the vessels.
‘‘(2) Detailed estimates of the cost of complet-
ing construction of each of the vessels in the series,
including such estimates from subcontractors for the
construction as may be required by the Secretary.
‘‘(3) Copies of the contracts required under sec-
tion 1402(b)(3)(B).
‘‘(4) Other information required by the Sec-
retary to fulfill the requirements of this title.
‘‘(c) REGULATIONS.—The Secretary shall issue regu-
lations setting forth the procedures for submitting an ap-
plication for assistance under this title.
‘‘SEC. 1406. RESTRICTION ON VESSEL OPERATIONS.
‘‘A vessel for which assistance is paid under this
title—
‘‘(1) may be operated only in foreign trade or
domestic trade authorized under a registry endorse-
ment for the vessel issued under section 12105 of
title 46, United States Code; and
‘‘(2) may not be operated in the coastwise trade
of the United States (including mixed coastwise and
foreign trade), except coastwise trade authorized
under a registry endorsement for the vessel issued
under section 12105 of title 46, United States Code.
‘‘SEC. 1407. VESSEL DESIGN AWARDS.
‘‘The Secretary, subject to the availability of appro-
priations, may make an award to a United States shipyard
on an equal matching basis for the cost of vessel designs
and document and bid preparation for vessels described
in section 403(b)(4).’’.
SEC. 11. EFFECTIVE DATE.
The amendments made by this Act are effective on
the date which is 120 days after the date of enactment
of this Act.
SEC. 12. REGULATIONS.
(a) IN GENERAL.—The Secretary of Transportation
shall prescribe regulations as necessary to carry out this
Act.
(b) INTERIM
REGULATIONS.—The Secretary of
Transportation may prescribe interim regulations nec-
essary to carry out this Act and for accepting eligibility
decision applications under section 403 of the Merchant
Marine Act, 1936, as amended by this Act. For this pur-
pose, the Secretary of Transportation is excepted from
compliance with the notice and comment requirements of
section 553 of title 5, United States Code. All regulations
prescribed under the authority of this subsection that are
not earlier superseded by final rules shall expire 270 days
after the date of enactment of this Act.
SEC. 13. EXPANSION OF STANDING FOR MARITIME UNIONS.
Section 301 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1131) is amended by adding at the end the
following:
‘‘(c) STANDING FOR MARITIME UNION REPRESENTA-
TIVES.—The duly-elected representative of any organiza-
tion that is certified by the Secretary of Labor as the prop-
er collective bargaining agency for officers or crew em-
ployed on any type of United States documented vessel
is an interested party in, and has standing to challenge,
any proposed or final order, action, or rule of the Sec-
retary of Transportation under this Act or section 9(c)(2)
of the Shipping Act, 1916.’’.
SEC. 14. STUDY.
(a) IN GENERAL.—After providing public notice and
opportunity for comment, the Secretary of Transportation
shall conduct a study of—
(1) the impact of this Act on the international
competitiveness of United States documented vessels
and whether this Act has had a favorable or unfa-
vorable impact on the ability of United States docu-
mented vessels to compete successfully with foreign-
flag vessels;
(2) whether continuation of the Maritime Secu-
rity Fleet program established by this Act would as-
sist the international competitiveness of United
States documented vessels;
(3) whether the Maritime Security Fleet pro-
gram should be continued, modified, or discontinued;
(4) alternatives that are or should be available
to operators of United States documented vessels if
the Maritime Security Fleet program is discon-
tinued; and
(5) any other issues related to promoting the
international competitiveness of United States docu-
mented vessels that the Secretary considers appro-
priate.
(b) REPORT.—The Secretary of Transportation shall
submit to the Congress a report on the findings and con-
clusions of the study required by subsection (a) by not
later than 4 years after the date of enactment of this Act,
which shall include such recommendations as the Sec-
retary considers appropriate.
SEC. 15. CARGO PREFERENCE ADMINISTRATIVE REFORM.
(a) FINDINGS.—The Congress finds and declares
that—
(1) the Congress continues to support the cargo
preference program as an important element of sup-
port for the United States-flag merchant marine be-
cause the United States merchant marine is critical
to the economic and national security of the United
States;
(2) reserving a small portion of Government
cargo for United States-flag vessels encourages com-
petition among United States-flag vessels; and
(3) administering the cargo preference program
in a centralized, commercially based manner reduces
costs of the program.
(b) ADMINISTRATIVE REFORM.—Section 901 of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1241) is
amended by adding at the end the following new sub-
sections:
‘‘(d) A privately owned United States-flag commercial
vessel transporting any equipment, materials, or commod-
ities under this section or section 901b shall be engaged
under terms no less favorable than the most favorable
terms offered to any foreign-flag vessel transporting
equipment, materials, or commodities under this section
or section 901b.
‘‘(e) A contract for the ocean transportation of any
equipment, materials, or commodities under this section
or section 901b, to the extent the Secretary of Transpor-
tation, in consultation with the heads of other appropriate
agencies, determines necessary to further the purposes of
this section and section 901b, shall be based on contracts
used for commercial shipments.
‘‘(f) The Secretary of Transportation shall partici-
pate in negotiations relating to agreements with recipient
countries for equipment, materials, or commodities subject
to this section or section 901b to the extent the Secretary,
in consultation with the heads of other appropriate agen-
cies, considers to be necessary to ensure agreement provi-
sions relating to or affecting the transportation of such
equipment, materials, or commodities permit fair and rea-
sonable transportation services to be provided.
‘‘(g) No later than 180 days after the date of the
enactment of the Maritime Security and Competitiveness
Act of 1993, the heads of appropriate Federal agencies,
or their representatives, shall transmit to the Secretary
of Transportation recommendations relating to the meth-
odology used by the Secretary of Transportation to deter-
mine whether rates for United States-flag vessels are fair
and reasonable in compliance with section 901(b) and will
achieve the policy objectives of this Act.’’.
(c) Within 90 days after the date of enactment of
this Act, the Secretary of Transportation shall take ac-
tions to ensure and maintain a significant increase of gov-
ernment-impelled cargo through Great Lakes ports,
through administrative waivers and action and through an
exemption of cargo preference requirements.
SEC. 16. WAGES FOR WHICH PREFERRED MARITIME LIEN
MAY BE ESTABLISHED.
(a) IN GENERAL.—Section 31301(5)(D) of title 46,
United States Code, is amended by inserting before the
semicolon the following: ‘‘(including any payment de-
scribed in paragraph (5), (6), (7), (8), or (9) of section
302(c) of the Labor Management Relations Act, 1947 for
any individual as a member of the crew of the vessel, that
is due from and unpaid by an owner or managing operator
of the vessel)’’.
(b) INCURRING OBLIGATIONS BEFORE EXECUTING
PREFERRED MORTGAGES.—Section 31323(b)(2) of title
46, United States Code, is amended by inserting before
the semicolon the following: ‘‘(including any payment de-
scribed in paragraph (5), (6), (7), (8), or (9) of section
302(c) of the Labor Management Relations Act, 1947 for
any member of the crew of the vessel)’’.
(c) MASTER’S LIEN FOR WAGES.—Section 11112 of
title 46, United States Code, is amended by inserting after
‘‘wages’’ the following: ‘‘(including any payment described
in paragraph (5), (6), (7), (8), or (9) of section 302(c)
of the Labor Management Relations Act, 1947 for an indi-
vidual as master of the vessel, that is due from and unpaid
by an owner or managing operator of the vessel)’’.
(d) APPLICATION.—The amendments made by sub-
sections (a), (b), and (c) shall apply with respect to pay-
ments that first become due on or after the date of the
enactment of this Act.
SEC. 17. COMPLIANCE WITH BUY AMERICAN ACT.
No funds appropriated pursuant to this Act may be
expended by an entity unless the entity agrees that in ex-
pending the assistance the entity will comply with sections
2 through 4 of the Act of March 3, 1933 (41 U.S.C. 10a–
10c, popularly known as the ‘‘Buy American Act’’).
SEC. 18. SENSE OF CONGRESS; REQUIREMENT REGARDING
NOTICE.
(a) PURCHASE
OF AMERICAN-MADE EQUIPMENT
AND PRODUCTS.—In the case of any equipment or prod-
ucts that may be authorized to be purchased with financial
assistance provided under this Act, it is the sense of the
Congress that entities receiving such assistance should, in
expending the assistance, purchase only American-made
equipment and products.