of such payment to be published in the Federal Reg-
ister as soon as possible; or
(2) with respect to a particular contractor
under the operating-differential subsidy program
under subtitle A of that title, the date that contrac-
tor enters into a contract with the Secretary under
the Maritime Security Program established by sub-
title B of that title.
SEC. 6. AMENDMENT TO SHIPPING ACT, 1916.
Section 9 of the Shipping Act, 1916 (46 App. U.S.C.
808) is 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 of Transportation 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) an application for an operating agree-
ment under subtitle B of title VI of the Merchant
Marine Act, 1936 has been filed with respect to a
vessel which is eligible to be included in the Mari-
time Security Fleet under section 651(b)(1) of that
Act; and
‘‘(B) the Secretary has not awarded an operat-
ing agreement with respect to that vessel within 90
days after the date of that application;
‘‘(3) a contract covering the vessel under sub-
title A of title VI of the Merchant Marine Act, 1936
has expired, and that vessel is more than 15 years
of age on the date the contract expires; or
‘‘(4) an operating agreement covering the vessel
under subtitle B of title VI of the Merchant Marine
Act, 1936 has expired.’’.
SEC. 7. CONSTRUCTION DIFFERENTIAL SUBSIDY RESTRIC-
TIONS.
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 new section:
‘‘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. 8. REGULATIONS.
(a) IN GENERAL.—The Secretary of Transportation
may prescribe rules as necessary to carry out this Act and
the amendments made by this Act.
(b) INTERIM RULES.—The Secretary of Transpor-
tation may prescribe interim rules necessary to carry out
this Act and the amendments made by this Act. For this
purpose, the Secretary of Transportation is excepted from
compliance with the notice and comment requirements of
section 553 of title 5, United States Code. All rules pre-
scribed under the authority of this subsection that are not
earlier superseded by final rules shall expire no later than
270 day after the date of enactment of this Act.
SEC. 9. MERCHANT SHIP SALES ACT OF 1946 AMENDMENT.
Section 11 of the Merchant Ship Sales Act of 1946
(50 App. U.S.C. 1744) is amended as follows:
(1) In subsection (b)(2) by striking ‘‘Secretary
of the Navy,’’ and inserting ‘‘Secretary of Defense,’’.
(2) By striking subsection (c) and redesignating
subsection (d) as subsection (c).
SEC. 10. REEMPLOYMENT RIGHTS FOR CERTAIN MER-
CHANT SEAMEN.
(a) IN GENERAL.—Title III of the Merchant Marine
Act, 1936 (46 App. U.S.C. 1131) is amended by inserting
after section 301 the following new section:
‘‘SEC. 302. (a) An individual who is certified by the
Secretary of Transportation under subsection (c) shall be
entitled to reemployment rights and other benefits sub-
stantially equivalent to the rights and benefits provided
for by chapter 43 of title 38, United States Code, for any
member of a Reserve component of the Armed Forces of
the United States who is ordered to active duty.
‘‘(b) An individual may submit an application for cer-
tification under subsection (c) to the Secretary of Trans-
portation not later than 45 days after the date the individ-
ual completes a period of employment described in sub-
section (c)(1)(A) with respect to which the application is
submitted.
‘‘(c) Not later than 20 days after the date the Sec-
retary of Transportation receives from an individual an
application for certification under this subsection, the Sec-
retary shall—
‘‘(1) determine whether or not the individual—
‘‘(A) was employed in the activation or op-
eration of a vessel—
‘‘(i) in the National Defense Reserve
Fleet maintained under section 11 of the
Merchant Ship Sales Act of 1946, in a pe-
riod in which that vessel was in use or
being activated for use under subsection
(b) of that section;
‘‘(ii) that is requisitioned or pur-
chased under section 902 of this Act; or
‘‘(iii) that is owned, chartered, or con-
trolled by the United States and used by
the United States for a war, armed con-
flict, national emergency, or maritime mo-
bilization need (including for training pur-
poses or testing for readiness and suit-
ability for mission performance); and
‘‘(B) during the period of that employ-
ment, possessed a valid license, certificate of
registry, or merchant mariner’s document is-
sued under chapter 71 or chapter 73 (as appli-
cable) of title 46, United States Code; and
‘‘(2) if the Secretary makes affirmative deter-
minations under paragraph (1)(A) and (B), certify
that individual under this subsection.
‘‘(d) For purposes of reemployment rights and bene-
fits provided by this section, a certification under sub-
section (c) shall be considered to be the equivalent of a
certificate referred to in paragraph (1) of section 4301(a)
of title 38, United States Code.’’.
(b) APPLICATION.—The amendment made by sub-
section (a) shall apply to employment described in section
302(c)(1)(A) of the Merchant Marine Act, 1936, as
amended by subsection (a), occurring after the date of en-
actment of this Act.
(c) REGULATION.—Not later than 120 days after the
date of the enactment of this Act, the Secretary of Trans-
portation shall issue regulations implementing this section.
SEC. 11. TITLE XI LOAN GUARANTEES.
Title XI of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1271 et seq.) is amended—
(1) in section 1101(b), by striking ‘‘owned by
citizens of the United States’’;
(2) in section 1104B(a), in the material preced-
ing paragraph (1), by striking ‘‘owned by citizens of
the United States’’; and
(3) in section 1110(a), by striking ‘‘owned by
citizens of the United States’’.
SEC. 12. EXTENSION OF WAR RISK INSURANCE AUTHORITY.
Section 1214 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1294) is amended by striking ‘‘June 30,
1995’’ and inserting ‘‘June 30, 2000’’.
SEC. 13. VESSEL LOAN GUARANTEE PROGRAM.
(a) RISK FACTOR DETERMINATIONS.—Section 1103
of the Merchant Marine Act, 1936 (46 App. U.S.C. 1273)
is amended by adding at the end the following new sub-
section:
‘‘(h)(1) The Secretary shall—
‘‘(A) establish in accordance with this sub-
section a system of risk categories for obligations
guaranteed under this title, that categorizes the rel-
ative risk of guarantees made under this title with
respect to the risk factors set forth in paragraph
(3); and
‘‘(B) determine for each of the risk categories
a subsidy rate equivalent to the cost of obligations
in the category, expressed as a percentage of the
amount guaranteed under this title for obligations in
the category.
‘‘(2)(A) Before making a guarantee under this sec-
tion for an obligation, the Secretary shall apply the risk
factors set forth in paragraph (3) to place the obligation
in a risk category established under paragraph (1)(A).
‘‘(B) The Secretary shall consider the aggregate
amount available to the Secretary for making guarantees
under this title to be reduced by the amount determined
by multiplying—
‘‘(i) the amount guaranteed under this title for
an obligation, by
‘‘(ii) the subsidy rate for the category in which
the obligation is placed under subparagraph (A) of
this paragraph.
‘‘(C) The estimated cost to the Government of a
guarantee made by the Secretary under this title for an
obligation is deemed to be the amount determined under
subparagraph (B) for the obligation.
‘‘(D) The Secretary may not guarantee obligations
under this title after the aggregate amount available to
the Secretary under appropriations Acts for the cost of
loan guarantees is required by subparagraph (B) to be
considered reduced to zero.
‘‘(3) The risk factors referred to in paragraphs (1)
and (2) are the following:
‘‘(A) If applicable, the country risk for each eli-
gible export vessel financed or to be financed by an
obligation.
‘‘(B) The period for which an obligation is
guaranteed or to be guaranteed.
‘‘(C) The amount of an obligation, which is
guaranteed or to be guaranteed, in relation to the
total cost of the project financed or to be financed
by the obligation.
‘‘(D) The financial condition of an obligor or
applicant for a guarantee.
‘‘(E) If applicable, any guarantee related to the
project, other than the guarantee under this title for
which the risk factor is applied.
‘‘(F) If applicable, the projected employment of
each vessel or equipment to be financed with an obli-
gation.
‘‘(G) If applicable, the projected market that
will be served by each vessel or equipment to be fi-
nanced with an obligation.
‘‘(H) The collateral provided for a guarantee
for an obligation.
‘‘(I) The management and operating experience
of an obligor or applicant for a guarantee.
‘‘(J) Whether a guarantee under this title is or
will be in effect during the construction period of the
project.
‘‘(4) In this subsection, the term ‘cost’ has the mean-
ing given that term in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a).’’.
(b) APPLICATION.—Subsection (h)(2) of section 1103
of the Merchant Marine Act, 1936 (46 App. U.S.C. 1273),
as amended by subsection (a) of this section, shall apply
to guarantees that the Secretary of Transportation makes
or commits to make with any amounts that are unobli-
gated on or after the date of enactment of this Act.
(c) GUARANTEE FEES.—Section 1104A(e) of title XI
of the Merchant Marine Act, 1936 (46 App. U.S.C.
1274(e)) is amended to read as follows:
‘‘(e)(1) Except as otherwise provided in this sub-
section, the Secretary shall prescribe regulations to assess
in accordance with this subsection a fee for the guarantee
of an obligation under this title.
‘‘(2)(A) The amount of a fee under this subsection
for a guarantee is equal to the sum determined by adding
the amounts determined under subparagraph (B) for the
years in which the guarantee is in effect.
‘‘(B) The amount referred to in subparagraph (A) for
a year is the present value (determined by applying the
discount rate determined under subparagraph (F)) of the
amount determined by multiplying—
‘‘(i) the estimated average unpaid principal
amount of the obligation that will be outstanding
during the year (determined in accordance with sub-
paragraph (E)), by
‘‘(ii) the fee rate established under subpara-
graph (C) for the obligation for each year.
‘‘(C) The fee rate referred to in subparagraph (B)(ii)
for an obligation shall be—
‘‘(i) in the case of an obligation for a delivered
vessel or equipment, not less than one-half of 1 per-
cent and not more than 1 percent, determined by
the Secretary for the obligation under the formula
established under subparagraph (D); or
‘‘(ii) in the case of an obligation for a vessel to
be constructed, reconstructed, or reconditioned, or of
equipment to be delivered, not less than one-quarter
of 1 percent and not more than one-half of 1 per-
cent, determined by the Secretary for the obligation
under the formula established under subparagraph
(D).
‘‘(D) The Secretary shall establish a formula for de-
termining the fee rate for an obligation for purposes of
subparagraph (C), that—
‘‘(i) is a sliding scale based on the creditworthi-
ness of the obligor;
‘‘(ii) takes into account the security provided
for a guarantee under this title for the obligation;
and
‘‘(iii) uses—
‘‘(I) in the case of the most creditworthy
obligors, the lowest rate authorized under sub-
paragraph (C)(i) or (ii), as applicable; and
‘‘(II) in the case of the least creditworthy
obligors, the highest rate authorized under sub-
paragraph (C)(i) or (ii), as applicable.
‘‘(E) For purposes of subparagraph (B)(i), the esti-
mated average unpaid principal amount does not include
the average amount (except interest) on deposit in a year
in the escrow fund under section 1108.
‘‘(F) For purposes of determining present value
under subparagraph (B) for an obligation, the Secretary
shall apply a discount rate determined by the Secretary
of the Treasury taking into consideration current market
yields on outstanding obligations of the United States hav-
ing periods to maturity comparable to the period to matu-
rity for the obligation with respect to which the determina-
tion of present value is made.
‘‘(3) A fee under this subsection shall be assessed and
collected not later than the date on which amounts are
first paid under an obligation with respect to which the
fee is assessed.
‘‘(4) A fee paid under this subsection is not refund-
able. However, an obligor shall receive credit for the
amount paid for the remaining term of the guaranteed ob-
ligation if the obligation is refinanced and guaranteed
under this title after such refinancing.
‘‘(5) A fee paid under subsection (e) shall be included
in the amount of the actual cost of the obligation guaran-
teed under this title and is eligible to be financed under
this title.’’.
SEC. 14. MARITIME POLICY REPORT.
(a) REPORT.—The Secretary of Transportation shall
transmit to the Congress a report setting forth the De-
partment of Transportation’s policies for the 5-year period
beginning October 1, 1995, with respect to—
(1) fostering and maintaining a United States
merchant marine capable of meeting economic and
national security requirements;
(2) improving the vitality and competitiveness
of the United States merchant marine and the mari-
time industrial base, including ship repairers, ship-
builders, ship manning, ship operators, and ship
suppliers;
(3) reversing the precipitous decrease in the
number of ships in the United States-flag fleet and
the Nation’s shipyard and repair capability;
(4) stabilizing and eventually increasing the
number of mariners available to crew United States
merchant vessels;
(5) achieving adequate manning of merchant
vessels for national security needs during a mobiliza-
tion;
(6) ensuring that sufficient civil maritime re-
sources will be available to meet defense deployment
and essential economic requirements in support of
our national security strategy;
(7) ensuring that the United States maintains
the capability to respond unilaterally to security
threats in geographic areas not covered by alliance
commitments and otherwise meets sealift require-
ments in the event of crisis or war;
(8) ensuring that international agreements and
practices do not place United States maritime indus-
tries at an unfair competitive disadvantage in world
markets;
(9) ensuring that Federal agencies promote,
through efficient application of laws and regulations,
the readiness of the United States merchant marine
and supporting industries; and
(10) any other relevant maritime policies.
(b) DATE OF TRANSMITTAL.—The report required
under subsection (a) shall be transmitted along with the
President’s budget submission, under section 1105 of title
31, United States Code, for fiscal year 1997.
SEC. 15. RELIEF FROM U.S. DOCUMENTATION REQUIRE-
MENT FOR 3 VESSELS.
(a) IN GENERAL.—Notwithstanding any other law or
any agreement with the United States Government, a ves-
sel described in subsection (b) may be sold to a person
that is not a citizen of the United States and transferred
to or placed under a foreign registry.
(b) VESSELS DESCRIBED.—The vessels referred to in
subsection (a) are the following:
(1) RAINBOW HOPE (United States official
number 622178).
(2) IOWA TRADER (United States official
number 642934).
(3) KANSAS TRADER (United States official
number 634621).
SEC. 16. VESSEL REPAIR AND MAINTENANCE PILOT PRO-
GRAM.
(a) IN GENERAL.—The Secretary of Transportation
shall conduct a pilot program to evaluate the feasibility
of using renewable contracts for the maintenance and re-
pair of outported vessels in the Ready Reserve Force to
enhance the readiness of those vessels. Under the pilot
program, the Secretary, subject to the availability of ap-
propriations and with 6 months after the date of the en-
actment of this Act, shall award 9 contracts for this pur-
pose.
(b) USE
OF
VARIOUS
CONTRACTING
ARRANGE-
MENTS.—In conducting a pilot program under this sec-
tion, the Secretary of Transportation shall use contracting
arrangements similar to those used by the Department of
Defense for procuring maintenance and repair of its ves-
sels.
(c) CONTRACT REQUIREMENTS.—Each contract with
a shipyard under this section shall—
(1) subject to subsection (d), provide for the
procurement from the shipyard of all repair and
maintenance (including activation, deactivation, and
drydocking) for 1 vessel in the Ready Reserve Force
that is outported in the geographical vicinity of the
shipyard;
(2) be effective for 1 fiscal year; and
(3) be renewable, subject to the availability of
appropriations, for each subsequent fiscal year
through fiscal year 1998.
(d) LIMITATION OF WORK UNDER CONTRACTS.—A
contract under this section may not provide for the pro-
curement of operation or manning for a vessel that may
be procured under another contract for the vessel to which
section 11(d)(2) of the Merchant Ship Sales Act of 1946
(50 U.S.C. App. 1774(d)(2)) applies.
(e) GEOGRAPHIC
DISTRIBUTION.—The Secretary
shall seek to distribute contract awards under this section
to shipyards located throughout the United States.
(f) REPORTS.—The Secretary shall submit to the
Congress—
(1) an interim report on the effectiveness of
each contract under this section in providing for eco-
nomic and efficient repair and maintenance of the
vessel included in the contract, no later than 20
months after the date of the enactment of this Act;
and
(2) a final report on that effectiveness no later
than 6 months after the termination of all contracts
awarded pursuant to this section.
SEC. 17. STREAMLINING OF CARGO ALLOCATION PROCE-
DURES.
(a) AMENDMENTS.—Section 901b(c)(3) of the Mer-
chant Marine Act, 1936 (46 App. U.S.C. 1241f(c)(3)) is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘and consistent with those
sections,’’ and inserting ‘‘and, subject to sub-
paragraph (B) of this paragraph, consistent
with those sections,’’; and
(B) by striking ‘‘50 percent’’ and inserting
‘‘25 percent’’; and
(2) by striking subparagraph (B) and inserting
the following new subparagraphs:
‘‘(B) In carrying out this paragraph, there shall first
be calculated the allocation of 100 percent of the quantity
to be procured on an overall lowest landed cost basis with-
out regard to the country of documentation of the vessel
and 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 United States-flag
transportation under section 901(b) and this section shall
not apply to commodities allocated under subparagraph
(A) to the Great Lakes port range, and commodities allo-
cated under subparagraph (A) to that port range may not
be reallocated or diverted to another port range to meet
those requirements to the extent that the total tonnage
of commodities to which subparagraph (A) applies that is
furnished and transported from the Great Lakes port
range is less than 25 percent of the total annual tonnage
of such commodities furnished.
‘‘(C) In awarding any contract for the transportation
by vessel of commodities from the Great Lakes port range
pursuant to an export activity referred to in subsection
(b), each agency or instrumentality—
‘‘(i) shall consider expressions of freight inter-
est for any vessel from a vessel operator who meets
reasonable requirements for financial and oper-
ational integrity; and
‘‘(ii) 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 transportation would not be provided
on a liner vessel (as that term is used in the Ship-
ping Act of 1984, as in effect on November 14,
1995)), if the person otherwise satisfies reasonable
requirements for financial and operational integ-
rity.’’.
(b) CONFORMING AMENDMENTS.—(1) Paragraph (4)
of section 901b(c) of that Act is repealed.
(2) Paragraph (5) of that section is redesignated as
paragraph (4).
Passed the House of Representatives December 6,
1995.
Attest:
ROBIN H. CARLE,
Clerk.
HR 1350 PCS——2
HR 1350 PCS——3
HR 1350 PCS——4
HR 1350 PCS——5