‘‘(i) assumed the responsibility for op-
eration of a vessel to which this chapter
applies from the owner; and
‘‘(ii) agreed to assume with respect to
the vessel responsibility for complying with
all the requirements of this chapter and
the regulations prescribed under this chap-
ter.
‘‘(3) ‘vessel engaged on a foreign voyage’ means
a vessel to which this chapter applies—
‘‘(A) arriving at a place under the jurisdic-
tion of the United States from a place in a for-
eign country;
‘‘(B) making a voyage between places out-
side the United States; or
‘‘(C) departing from a place under the ju-
risdiction of the United States for a place in a
foreign country.
‘‘§ 3202. Application
‘‘(a) MANDATORY APPLICATION.—This chapter ap-
plies to the following vessels engaged on a foreign voyage:
‘‘(1) Beginning July 1, 1998—
‘‘(A) a vessel transporting more than 12
passengers described in section 2101(21)(A) of
this title; and
‘‘(B) a tanker, bulk freight vessel, or high-
speed freight vessel, of at least 500 gross tons.
‘‘(2) Beginning July 1, 2002, a freight vessel
and a mobile offshore drilling unit of at least 500
gross tons.
‘‘(b) VOLUNTARY APPLICATION.—This chapter ap-
plies to a vessel not described in subsection (a) of this
section if the owner of the vessel requests the Secretary
to apply this chapter to the vessel.
‘‘(c) EXCEPTION.—Except as provided in subsection
(b) of this section, this chapter does not apply to—
‘‘(1) a barge;
‘‘(2) a recreational vessel not engaged in com-
mercial service;
‘‘(3) a fishing vessel;
‘‘(4) a vessel operating on the Great Lakes or
its tributary and connecting waters; or
‘‘(5) a public vessel.
‘‘§ 3203. Safety management system
‘‘(a) IN GENERAL.—The Secretary shall prescribe
regulations which establish a safety management system
for responsible persons and vessels to which this chapter
applies, including—
‘‘(1) a safety and environmental protection
policy;
‘‘(2) instructions and procedures to ensure safe
operation of those vessels and protection of the envi-
ronment in compliance with international and
United States law;
‘‘(3) defined levels of authority and lines of
communications between, and among, personnel on
shore and on the vessel;
‘‘(4) procedures for reporting accidents and
nonconformities with this chapter;
‘‘(5) procedures for preparing for and respond-
ing to emergency situations; and
‘‘(6) procedures for internal audits and man-
agement reviews of the system.
‘‘(b) COMPLIANCE WITH CODE.—Regulations pre-
scribed under this section shall be consistent with the
International Safety Management Code with respect to
vessels engaged on a foreign voyage.
‘‘§ 3204. Implementation of safety management sys-
tem
‘‘(a) SAFETY MANAGEMENT PLAN.—Each respon-
sible person shall establish and submit to the Secretary
for approval a safety management plan describing how
that person and vessels of the person to which this chapter
applies will comply with the regulations prescribed under
section 3203(a) of this title.
‘‘(b) APPROVAL.—Upon receipt of a safety manage-
ment plan submitted under subsection (a), the Secretary
shall review the plan and approve it if the Secretary deter-
mines that it is consistent with and will assist in imple-
menting the safety management system established under
section 3203.
‘‘(c) PROHIBITION ON VESSEL OPERATION.—A ves-
sel to which this chapter applies under section 3202(a)
may not be operated without having on board a Safety
Management Certificate and a copy of a Document of
Compliance issued for the vessel under section 3205 of
this title.
‘‘§ 3205. Certification
‘‘(a) ISSUANCE OF CERTIFICATE AND DOCUMENT.—
After verifying that the responsible person for a vessel to
which this chapter applies and the vessel comply with the
applicable requirements under this chapter, the Secretary
shall issue for the vessel, on request of the responsible per-
son, a Safety Management Certificate and a Document of
Compliance.
‘‘(b) MAINTENANCE OF CERTIFICATE AND DOCU-
MENT.—A Safety Management Certificate and a Docu-
ment of Compliance issued for a vessel under this section
shall be maintained by the responsible person for the ves-
sel as required by the Secretary.
‘‘(c) VERIFICATION OF COMPLIANCE.—The Secretary
shall—
‘‘(1) periodically review whether a responsible
person having a safety management plan approved
under section 3204(b) and each vessel to which the
plan applies is complying with the plan; and
‘‘(2) revoke the Secretary’s approval of the plan
and each Safety Management Certificate and Docu-
ment of Compliance issued to the person for a vessel
to which the plan applies, if the Secretary deter-
mines that the person or a vessel to which the plan
applies has not complied with the plan.
‘‘(d) ENFORCEMENT.—At the request of the Sec-
retary, the Secretary of the Treasury shall withhold or re-
voke the clearance required by section 4197 of the Revised
Statutes (46 App. U.S.C. 91) of a vessel that is subject
to this chapter under section 3202(a) of this title or to
the International Safety Management Code, if the vessel
does not have on board a Safety Management Certificate
and a copy of a Document of Compliance for the vessel.
Clearance may be granted on filing a bond or other surety
satisfactory to the Secretary.’’.
(b) CLERICAL AMENDMENT.—The table of chapters
at the beginning of subtitle II of title 46, United States
Code, is amended by inserting after the item relating to
chapter 31 the following:
‘‘32. Management of vessels ........................................................... 3201’’.
(c) STUDY.—
(1) STUDY.—The Secretary of the department
in which the Coast Guard is operating shall conduct,
in cooperation with the owners, charterers, and man-
aging operators of vessels documented under chapter
121 of title 46, United States Code, and other inter-
ested persons, a study of the methods that may be
used to implement and enforce the International
Management Code for the Safe Operation of Ships
and for Pollution Prevention under chapter IX of
the Annex to the International Convention for the
Safety of Life at Sea, 1974.
(2) REPORT.—The Secretary shall submit to
the Congress a report of the results of the study re-
quired under paragraph (1) before the earlier of—
(A) the date that final regulations are pre-
scribed under section 3203 of title 46, United
States Code (as enacted by subsection (a); or
(B) the date that is 1 year after the date
of enactment of this Act.
SEC. 703. USE OF REPORTS, DOCUMENTS, RECORDS, AND
EXAMINATIONS OF OTHER PERSONS.
(a) REPORTS, DOCUMENTS, AND RECORDS.—Chap-
ter 31 of title 46, United States Code, is amended by add-
ing the following new section:
‘‘§ 3103. Use of reports, documents, and records
‘‘The Secretary may rely, as evidence of compliance
with this subtitle, on—
‘‘(1) reports, documents, and records of other
persons who have been determined by the Secretary
to be reliable; and
‘‘(2) other methods the Secretary has deter-
mined to be reliable.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 31 of title 46, United States Code, is amended
by adding at the end the following:
‘‘3103. Use of reports, documents, and records.’’.
(c) EXAMINATIONS.—Section 3308 of title 46, United
States Code, is amended by inserting ‘‘or have examined’’
after ‘‘examine’’.
SEC. 704. EQUIPMENT APPROVAL.
(a) IN GENERAL.—Section 3306(b) of title 46,
United States Code, is amended to read as follows:
‘‘(b)(1) Equipment and material subject to regulation
under this section may not be used on any vessel without
prior approval of the Secretary.
agencies, shall work with foreign governments to have
those governments approve the use of the same equipment
and materials on vessels documented under the laws of
those countries that the Secretary requires on United
States documented vessels.
(c) TECHNICAL AMENDMENT.—Section 3306(a)(4)
of title 46, United States Code, is amended by striking
‘‘clauses (1)–(3)’’ and inserting ‘‘paragraphs (1), (2), and
(3)’’.
SEC. 705. FREQUENCY OF INSPECTION.
(a) FREQUENCY OF INSPECTION, GENERALLY.—Sec-
tion 3307 of title 46, United States Code, is amended—
(1) in paragraph (1)—
(A) by striking ‘‘nautical school vessel’’
and inserting ‘‘, nautical school vessel, and
small passenger vessel allowed to carry more
than 12 passengers on a foreign voyage’’; and
(B) by adding ‘‘and’’ after the semicolon
at the end;
(2) by striking paragraph (2) and redesignating
paragraph (3) as paragraph (2); and
(3) in paragraph (2) (as so redesignated), by
striking ‘‘2 years’’ and inserting ‘‘5 years’’.
(b) CONFORMING AMENDMENT.—Section 3710(b) of
title 46, United States Code, is amended by striking ‘‘24
months’’ and inserting ‘‘5 years’’.
SEC. 706. CERTIFICATE OF INSPECTION.
Section 3309(c) of title 46, United States Code, is
amended by striking ‘‘(but not more than 60 days)’’.
SEC. 707. DELEGATION OF AUTHORITY OF SECRETARY TO
CLASSIFICATION SOCIETIES.
(a) AUTHORITY TO DELEGATE.—Section 3316 of
title 46, United States Code, is amended—
(1) by striking subsections (a) and (d);
(2) by redesignating subsections (b) and (c) as
subsections (a) and (b), respectively; and
(3) in subsection (b), as so redesignated, by—
(A) redesignating paragraph (2) as para-
graph (3); and
(B) striking so much of the subsection as
precedes paragraph (3), as so redesignated, and
inserting the following:
‘‘(b)(1) The Secretary may delegate to the American
Bureau of Shipping or another classification society recog-
nized by the Secretary as meeting acceptable standards
for such a society, for a vessel documented or to be docu-
mented under chapter 121 of this title, the authority to—
‘‘(A) review and approve plans required for is-
suing a certificate of inspection required by this
part;
‘‘(B) conduct inspections and examinations; and
‘‘(C) issue a certificate of inspection required by
this part and other related documents.
‘‘(2) The Secretary may make a delegation under
paragraph (1) to a foreign classification society only—
‘‘(A) to the extent that the government of the
foreign country in which the society is headquartered
delegates authority and provides access to the Amer-
ican Bureau of Shipping to inspect, certify, and pro-
vide related services to vessels documented in that
country; and
‘‘(B) if the foreign classification society has of-
fices and maintains records in the United States.’’.
(b) CONFORMING AMENDMENTS.—(1) The heading
for section 3316 of title 46, United States Code, is amend-
ed to read as follows:
‘‘§ 3316. Classification societies’’.
(2) The table of sections for chapter 33 of title 46,
United States Code, is amended by striking the item relat-
ing to section 3316 and inserting the following:
‘‘3316. Classification societies.’’.
SEC. 708. STUDY OF MARINE CASUALTY REPORTING RE-
QUIREMENTS.
The Coast Guard shall, within 9 months after the ef-
fective date of this title, conduct a study of current regu-
latory requirements regarding the reporting of marine cas-
ualties under section 6101 of title 46, United States Code,
to determine whether—
(1) marine casualties should be classified ac-
cording to the seriousness of nonfatal casualties;
(2) further regulations pertaining to the neces-
sity for alcohol and drug testing for each classifica-
tion need to be proposed;
(3) the regulations may exclude certain non-se-
rious casualties from the requirement that drug or
alcohol testing be performed; and
(4) the reporting of certain marine casualties
that may be classified as minor may be done on a
quarterly basis.
TITLE VIII—UNITED STATES
CRUISE VESSEL DEVELOPMENT
SEC. 801. SHORT TITLE.
This title may be cited as the ‘‘United States Cruise
Vessel Development Act’’.
SEC. 802. PURPOSE.
The purpose of this title is to promote construction
and operation of United States flag cruise vessels in the
United States.
SEC. 803. COASTWISE TRANSPORTATION OF PASSENGERS.
Section 8 of the Act entitled ‘‘An Act to abolish cer-
tain fees for official services to American vessels, and to
amend the laws relating to shipping commissioners, sea-
men, and owners of vessels, and for other purposes’’, ap-
proved June 19, 1886 (46 App. U.S.C. 289), is amended
to read as follows:
‘‘SEC. 8. COASTWISE TRANSPORTATION OF PASSENGERS.
‘‘(a) IN GENERAL.—Except as otherwise provided by
law, a vessel may transport passengers in coastwise trade
only if—
‘‘(1) the vessel is owned by a person that is—
‘‘(A) an individual who is a citizen of the
United States; or
‘‘(B) a corporation, partnership, or asso-
ciation that is a citizen of the United States
under section 2(a) of the Shipping Act, 1916;
‘‘(2) the vessel meets the requirements of sec-
tion 27 of the Merchant Marine Act, 1920; and
‘‘(3) for a vessel that is at least 5 net tons, the
vessel is issued a certificate of documentation under
chapter 121 of title 46, United States Code, with a
coastwise endorsement.
‘‘(b) EXCEPTION
FOR
VESSEL
UNDER
DEMISE
CHARTER.—
‘‘(1) IN GENERAL.—Subsection (a)(1) does not
apply to a cruise vessel operating under a demise
charter that—
‘‘(A) has a term of at least 18 months; and
‘‘(B) is to a person described in subsection
(a)(1).
‘‘(2) EXTENSION
OF
PERIOD
FOR
OPER-
ATION.—A cruise vessel authorized to operate in
coastwise trade under paragraph (1) based on a de-
mise charter described in paragraph (1) may operate
in that coastwise trade during a period following the
termination of the charter of not more than 6
months, if the operation—
‘‘(A) is approved by the Secretary; and
‘‘(B) in accordance with such terms as
may be prescribed by the Secretary for that ap-
proval.
‘‘(c) EXCEPTION FOR VESSEL TO BE REFLAGGED.—
‘‘(1) EXCEPTION.—Subsection (a)(2) and sec-
tion 12106(a)(2)(A) of title 46, United States Code,
do not apply to a cruise vessel if—
‘‘(A) the vessel—
‘‘(i) is not documented under chapter
121 of title 46, United States Code, on the
date of enactment of the United States
Cruise Vessel Development Act; and
‘‘(ii) is not less than 5 years old and
not more than 15 years old on the first
date that the vessel is documented under
that chapter after that date of enactment;
and
‘‘(B) the owner or charterer of the vessel
has entered into a contract for the construction
in the United States of another cruise vessel
that has a total berth or stateroom capacity
that is at least 80 percent of the capacity of the
cruise vessel.
‘‘(2) TERMINATION OF AUTHORITY TO OPER-
ATE.—Paragraph (1) does not apply to a vessel after
the date that is 18 months after the date on which
a certificate of documentation with a coastwise en-
dorsement is first issued for the vessel after the date
of enactment of the United States Cruise Vessel De-
velopment Act if, before the end of that 18-month
period, the keel of another vessel has not been laid,
or another vessel is not at a similar stage of con-
struction, under a contract required for the vessel
under paragraph (1)(B).
‘‘(3) EXTENSION OF PERIOD BEFORE TERMI-
NATION.—The Secretary of Transportation may ex-
tend the period under paragraph (2) for not more
than 6 months for good cause shown.
‘‘(d) LIMITATION ON OPERATIONS.—A person (in-
cluding a related person with respect to that person) that
owns or charters a cruise vessel operating in coastwise
trade under subsection (b) or (c) under a coastwise en-
dorsement may not operate any vessel between—
‘‘(1) any 2 ports served by another cruise vessel
that transports passengers in coastwise trade under
subsection (a) on the date the Secretary issues the
coastwise endorsement; or
‘‘(2) the islands of Hawaii.
‘‘(e) PENALTIES.—
‘‘(1) CIVIL
PENALTY.—A person operating a
vessel in violation of this section is liable to the
United States Government for a civil penalty of
$1,000 for each passenger transported in violation of
this section.
‘‘(2) FORFEITURE.—A vessel operated in know-
ing violation of this section, and its equipment, are
liable to seizure by and forfeiture to the United
States Government.
‘‘(3) 
DISQUALIFICATION
FROM
COASTWISE
TRADE.—A person that is required to enter into a
construction contract under subsection (c)(1)(B)
with respect to a cruise vessel (including any related
person with respect to that person) may not own or
operate any vessel in coastwise trade after the period
applicable under subsection (c)(2) with respect to
the cruise vessel, if before the end of that period a
keel is not laid and a similar stage of construction
is not reached under such a contract.
‘‘(f) DEFINITIONS.—In this section—
‘‘(1) the term ‘coastwise trade’ includes trans-
portation of a passenger between points in the
United States, either directly or by way of a foreign
port;
‘‘(2) the term ‘cruise vessel’ means a vessel
that—
‘‘(A) is at least 10,000 gross tons (as
measured under chapter 143 of title 46, United
States Code);
‘‘(B) has berth or stateroom accommoda-
tions for at least 200 passengers; and
‘‘(C) is not a ferry; and
‘‘(3) the term ‘related person’ means, with re-
spect to a person—
‘‘(A) a holding company, subsidiary, affili-
ate, or association of the person; and
‘‘(B) an officer, director, or agent of the
person or of an entity referred to in subpara-
graph (A).’’.
SEC. 804. CONSTRUCTION STANDARDS.
Section 3309 of title 46, United States Code, is
amended by adding at the end the following:
‘‘(d)(1) A vessel described in paragraph (3) is deemed
to comply with parts B and C of this subtitle.
‘‘(2) The Secretary shall issue a certificate of inspec-
tion under subsection (a) to a vessel described in para-
graph (3).
‘‘(3) A vessel is described in this paragraph if—
‘‘(A) it meets the standards and conditions for
the issuance of a control verification certificate to a
foreign vessel embarking passengers in the United
States;
‘‘(B) a coastwise endorsement is issued for the
vessel under section 12106 of this title after the date
of enactment of the United States Cruise Vessel De-
velopment Act; and
‘‘(C) the vessel is authorized to engage in coast-
wise trade by reason of section 8(c) of the Act enti-
tled ‘An Act to abolish certain fees for official serv-
ices to American vessels, and to amend the laws re-
lating to shipping commissioners, seamen, and own-
ers of vessels, and for other purposes’, approved of
June 19, 1886.’’.
SEC. 805. CITIZENSHIP FOR PURPOSES OF DOCUMENTA-
TION.
Section 2 of the Shipping Act, 1916 (46 App. U.S.C.
802), is amended—
(1) in subsection (a) by inserting ‘‘other than
primarily in the transport of passengers,’’ after ‘‘the
coastwise trade’’; and
(2) by adding at the end the following:
‘‘(e) For purposes of determining citizenship under
subsection (a) with respect to operation of a vessel pri-
marily in the transport of passengers in coastwise trade,
the controlling interest in a partnership or association that
owns the vessel shall not be deemed to be owned by citi-
zens of the United States unless a majority interest in the
partnership or association is owned by citizens of the
United States free from any trust or fiduciary obligation
in favor of any person that is not a citizen of the United
States.’’.