the Secretary approves the replacement of such vessel
with a comparable vessel, or
‘‘(B) the vessel is covered by an operating agree-
ment under subtitle B, and the Secretary approves the
replacement of such vessel with a comparable vessel
for inclusion in the Maritime Security Fleet estab-
lished under subtitle B.
‘‘(2) Any such vessel may be requisitioned by the Sec-
retary of Transportation pursuant to section 902.’’.
SEC. 4. DOMESTIC OPERATIONS.
Section 805(a) of the Merchant Marine Act, 1936 (46
App. U.S.C. 1223(a)) is amended by striking ‘‘1935’’ each
place it appears and inserting ‘‘1995’’.
SEC. 5. USE OF FOREIGN-FLAG VESSELS.
(a) IN GENERAL.—Section 804 of the Merchant Ma-
rine Act, 1936 (46 App. U.S.C. 1222) is amended by adding
at the end the following new subsection:
‘‘(f) The provisions of subsection (a) shall not preclude
a contractor receiving assistance under subtitle A or B of
title VI, or any holding company, subsidiary, or affiliate
of the contractor, or any officer, director, agent, or executive
thereof, from—
‘‘(1) owning, chartering, or operating any for-
eign-flag vessel on a voyage or a segment of a voyage
that does not call at a port in the United States;
‘‘(2) owning, chartering, or operating any for-
eign-flag vessel in line haul service between the Unit-
ed States and foreign ports if—
‘‘(A) the foreign-flag vessel was operated by,
or is a replacement for a foreign-flag vessel oper-
ated by, such owner or operator, or any holding
company, subsidiary, affiliate, or associate of
such owner or operator, on the date of enactment
of the Maritime Security Act of 1995;
‘‘(B) the owner or operator, with respect to
each additional foreign-flag vessel, other than a
time chartered vessel, has first applied to have
that vessel covered by an operating agreement
under subtitle B of title VI, and the Secretary
has not awarded an operating agreement with
respect to that vessel within 90 days after the fil-
ing of the application; or
‘‘(C) the vessel has been placed under for-
eign documentation pursuant to section 9 of the
Shipping Act, 1916 (46 App. U.S.C. 808), except
that any foreign-flag vessel, other than a time
chartered vessel, a replacement vessel under sec-
tion 653(d), or a vessel operated by the owner or
operator on the date of enactment of the Mari-
time Security Act of 1995, in line haul service
between the United States and foreign ports is
registered under the flag of an effective United
States-controlled foreign flag, and available to be
requisitioned by the Secretary of Transportation
pursuant to section 902 of this Act;
‘‘(3) owning, chartering, or operating foreign-
flag bulk cargo vessels that are operated in foreign-to-
foreign service or the foreign commerce of the United
States;
‘‘(4) chartering or operating foreign-flag vessels
that are operated solely as replacement vessels for
United States-flag vessels or vessel capacity that are
made available to the Secretary of Defense pursuant
to section 653 of this Act; or
‘‘(5) entering into time or space charter or other
cooperative agreements with respect to foreign-flag
vessels or acting as agent or broker for a foreign-flag
vessel or vessels.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to a contractor under subtitle B of
title VI of the Merchant Marine Act, 1936, as amended by
this Act, upon enactment of this Act, and shall apply to
a contractor under subtitle A of title VI of that Act, upon
the earlier of—
(1) the date that a payment is made, under the
Maritime Security Program under subtitle B of that
title to a contractor under subtitle B of that title who
is not party to an operating-differential subsidy con-
tract under subtitle A of that title, with the Secretary
of Transportation to cause notice of the date of such
payment to be published in the Federal Register as
soon as possible; or
(2) with respect to a particular contractor under
the operating-differential subsidy program under sub-
title A of that title, the date that contractor enters
into a contract with the Secretary under the Mari-
time Security Program established by subtitle 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 equivalent
or greater, as measured by deadweight tons, gross
tons, or container equivalent units, as appropriate, 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 Ma-
rine Act, 1936 has been filed with respect to a vessel
which is eligible to be included in the Maritime Secu-
rity 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 subtitle
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 subpart 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, recon-
structed, or reconditioned with the aid of construction-dif-
ferential subsidy shall terminate upon the expiration of the
25-year period beginning on the date of the original deliv-
ery 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.
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