‘‘(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
‘‘(F) public sector ownership of commercial
shipyards on terms inconsistent with commer-
cially reasonable investment practices.
‘‘(3) Direct official support for investment in
the commercial shipbuilding and repair industry, or
to a related entity that favors the operation of ship-
building and repair, including the kinds of support
listed in clauses (i) through (v) of subparagraph (B),
and any restructuring support, except public support
for social purposes directly and effectively linked to
shipyard closures.
‘‘(4) Assistance in the form of grants, pref-
erential loans, preferential tax treatment, or other-
wise, that benefits or is directly related to shipbuild-
ing and repair for purposes of research and develop-
ment that is not equally open to domestic and for-
eign enterprises.
‘‘(5) Tax policies and practices that favor the
shipbuilding and repair industry, directly or indi-
rectly, such as tax credits, deductions, exemptions
and preferences, including accelerated depreciation,
if the benefits are not generally available to persons
or firms not engaged in shipbuilding or repair.
‘‘(6) Any official regulation or practice that au-
thorizes or encourages persons or firms engaged in