To complete the codification of title 46, United States Code, "Shipping", as positive law.
PL 109-304 (H.R.1442), enacted 10/06/2006

120 STAT. 1485
PUBLIC LAW 109–304—OCT. 6, 2006
Public Law 109–304
109th Congress
An Act
To complete the codification of title 46, United States Code, ‘‘Shipping’’, as positive
law.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec.
1.
Table of contents.
Sec.
2.
Purpose; conformity with original intent.
Sec.
3.
Title analysis.
Sec.
4.
Subtitle I of title 46.
Sec.
5.
Subtitle II of title 46.
Sec.
6.
Subtitle III of title 46.
Sec.
7.
Subtitle IV of title 46.
Sec.
8.
Subtitle V of title 46.
Sec.
9.
Subtitle VI of title 46.
Sec.
10.
Subtitle VII of title 46.
Sec.
11.
Subtitle VIII of title 46.
Sec.
12.
Maritime Administration.
Sec.
13.
Amendments relating to Maritime Security Act of 2003.
Sec.
14.
Amendments to partially restated provisions.
Sec.
15.
Additional amendments to title 46.
Sec.
16.
Recreational boating safety technical amendments.
Sec.
17.
Conforming amendments to other laws.
Sec.
18.
Transitional and savings provisions.
Sec.
19.
Repeals.
SEC. 2. PURPOSE; CONFORMITY WITH ORIGINAL INTENT.
(a) PURPOSE.—The purpose of this Act is to complete the codi-
fication of title 46, United States Code, ‘‘Shipping’’, as positive
law, by reorganizing and restating the laws currently in the
appendix to title 46.
(b) CONFORMITY WITH ORIGINAL INTENT.—In the codification
of laws by this Act, the intent is to conform to the understood
policy, intent, and purpose of the Congress in the original enact-
ments, with such amendments and corrections as will remove
ambiguities, contradictions, and other imperfections, in accordance
with section 205(c)(1) of House Resolution No. 988, 93d Congress,
as enacted into law by Public Law 93–554 (2 U.S.C. 285b(1)).
SEC. 3. TITLE ANALYSIS.
The title analysis of title 46, United States Code, is amended
to read as follows:
‘‘Subtitle
Sec.
‘‘I. GENERAL ................................................................................................
101
‘‘II. VESSELS AND SEAMEN ...................................................................... 2101
‘‘III. MARITIME LIABILITY .........................................................................
30101
‘‘IV. REGULATION OF OCEAN SHIPPING ..............................................
40101
‘‘V. MERCHANT MARINE ...........................................................................
50101
46 USC note
prec. 101.
Oct. 6, 2006
[H.R. 1442]
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120 STAT. 1486
PUBLIC LAW 109–304—OCT. 6, 2006
‘‘VI. CLEARANCE, TONNAGE TAXES, AND DUTIES ...........................
60101
‘‘VII. SECURITY AND DRUG ENFORCEMENT ........................................
70101
‘‘VIII. MISCELLANEOUS ..................................................................................
80101’’.
SEC. 4. SUBTITLE I OF TITLE 46.
Title 46, United States Code, is amended by inserting after
the title analysis the following:
‘‘Subtitle I—General
‘‘Chapter
Sec.
‘‘1.
Definitions .................................................................................................
101
‘‘3.
Federal Maritime Commission ............................................................
301
‘‘5.
Other General Provisions .....................................................................
501
‘‘CHAPTER 1—DEFINITIONS
‘‘Sec.
‘‘101.
Agency.
‘‘102.
Barge.
‘‘103.
Boundary Line.
‘‘104.
Citizen of the United States.
‘‘105.
Consular officer.
‘‘106.
Documented vessel.
‘‘107.
Exclusive economic zone.
‘‘108.
Fisheries.
‘‘109.
Foreign commerce or trade.
‘‘110.
Foreign vessel.
‘‘111.
Numbered vessel.
‘‘112.
State.
‘‘113.
Undocumented.
‘‘114.
United States.
‘‘115.
Vessel.
‘‘116.
Vessel of the United States.
‘‘§ 101. Agency
‘‘In this title, the term ‘agency’ means a department, agency,
or instrumentality of the United States Government.
‘‘§ 102. Barge
‘‘In this title, the term ‘barge’ means a non-self-propelled vessel.
‘‘§ 103. Boundary Line
‘‘In this title, the term ‘Boundary Line’ means a line established
under section 2(b) of the Act of February 19, 1895 (33 U.S.C.
151).
‘‘§ 104. Citizen of the United States
‘‘In this title, the term ‘citizen of the United States’, when
used in reference to a natural person, means an individual who
is a national of the United States as defined in section 101(a)(22)
of the Immigration and Nationality Act (8 U.S.C. 1101(a)(22)).
‘‘§ 105. Consular officer
‘‘In this title, the term ‘consular officer’ means an officer or
employee of the United States Government designated under regula-
tions to issue visas.
‘‘§ 106. Documented vessel
‘‘In this title, the term ‘documented vessel’ means a vessel
for which a certificate of documentation has been issued under
chapter 121 of this title.
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PUBLIC LAW 109–304—OCT. 6, 2006
‘‘§ 107. Exclusive economic zone
‘‘In this title, the term ‘exclusive economic zone’ means the
zone established by Presidential Proclamation 5030 of March 10,
1983 (16 U.S.C. 1453 note).
‘‘§ 108. Fisheries
‘‘In this title, the term ‘fisheries’ includes processing, storing,
transporting (except in foreign commerce), planting, cultivating,
catching, taking, or harvesting fish, shellfish, marine animals,
pearls, shells, or marine vegetation in the navigable waters of
the United States or in the exclusive economic zone.
‘‘§ 109. Foreign commerce or trade
‘‘(a) IN GENERAL.—In this title, the terms ‘foreign commerce’
and ‘foreign trade’ mean commerce or trade between a place in
the United States and a place in a foreign country.
‘‘(b) CAPITAL CONSTRUCTION FUNDS
AND CONSTRUCTION-DIF-
FERENTIAL SUBSIDIES.—In the context of capital construction funds
under chapter 535 of this title, and in the context of construction-
differential subsidies under title V of the Merchant Marine Act,
1936, the terms ‘foreign commerce’ and ‘foreign trade’ also include,
in the case of liquid and dry bulk cargo carrying services, trading
between foreign ports in accordance with normal commercial bulk
shipping practices in a manner that will permit bulk vessels of
the United States to compete freely with foreign bulk vessels in
their operation or competition for charters, subject to regulations
prescribed by the Secretary of Transportation.
‘‘§ 110. Foreign vessel
‘‘In this title, the term ‘foreign vessel’ means a vessel of foreign
registry or operated under the authority of a foreign country.
‘‘§ 111. Numbered vessel
‘‘In this title, the term ‘numbered vessel’ means a vessel for
which a number has been issued under chapter 123 of this title.
‘‘§ 112. State
‘‘In this title, the term ‘State’ means a State of the United
States, the District of Columbia, Guam, Puerto Rico, the Virgin
Islands, American Samoa, the Northern Mariana Islands, and any
other territory or possession of the United States.
‘‘§ 113. Undocumented
‘‘In this title, the term ‘undocumented’ means not having and
not required to have a certificate of documentation issued under
chapter 121 of this title.
‘‘§ 114. United States
‘‘In this title, the term ‘United States’, when used in a
geographic sense, means the States of the United States, the District
of Columbia, Guam, Puerto Rico, the Virgin Islands, American
Samoa, the Northern Mariana Islands, and any other territory
or possession of the United States.
‘‘§ 115. Vessel
‘‘In this title, the term ‘vessel’ has the meaning given that
term in section 3 of title 1.
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120 STAT. 1488
PUBLIC LAW 109–304—OCT. 6, 2006
‘‘§ 116. Vessel of the United States
‘‘In this title, the term ‘vessel of the United States’ means
a vessel documented under chapter 121 of this title (or exempt
from documentation under section 12102(c) of this title), numbered
under chapter 123 of this title, or titled under the law of a State.
‘‘CHAPTER 3—FEDERAL MARITIME COMMISSION
‘‘Sec.
‘‘301.
General organization.
‘‘302.
Quorum.
‘‘303.
Record of meetings and votes.
‘‘304.
Delegation of authority.
‘‘305.
Regulations.
‘‘306.
Annual report.
‘‘307.
Expenditures.
‘‘§ 301. General organization
‘‘(a) ORGANIZATION.—The Federal Maritime Commission is an
independent establishment of the United States Government.
‘‘(b) COMMISSIONERS.—
‘‘(1) COMPOSITION.—The Commission is composed of 5
Commissioners, appointed by the President by and with the
advice and consent of the Senate. Not more than 3 Commis-
sioners may be appointed from the same political party.
‘‘(2) TERMS.—The term of each Commissioner is 5 years,
with each term beginning one year apart. An individual
appointed to fill a vacancy is appointed only for the unexpired
term of the individual being succeeded. A vacancy shall be
filled in the same manner as the original appointment. When
the term of a Commissioner ends, the Commissioner may con-
tinue to serve until a successor is appointed and qualified.
‘‘(3) REMOVAL.—The President may remove a Commissioner
for inefficiency, neglect of duty, or malfeasance in office.
‘‘(c) CHAIRMAN.—
‘‘(1) DESIGNATION.—The President shall designate one of
the Commissioners as Chairman.
‘‘(2) GENERAL
AUTHORITY.—The Chairman is the chief
executive and administrative officer of the Commission. In car-
rying out the duties and powers of the Commission (other
than under paragraph (3)), the Chairman is subject to the
policies, regulatory decisions, findings, and determinations of
the Commission.
‘‘(3) PARTICULAR DUTIES.—
‘‘(A) IN GENERAL.—The Chairman shall—
‘‘(i) appoint and supervise officers and employees
of the Commission;
‘‘(ii) appoint the heads of major organizational
units, but only after consultation with the other
Commissioners;
‘‘(iii) distribute the business of the Commission
among personnel and organizational units;
‘‘(iv) supervise the expenditure of money for
administrative purposes; and
‘‘(v) 
assign 
Commission 
personnel, 
including
Commissioners, to perform duties and powers dele-
gated by the Commission under section 304 of this
title.
President.
President.
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‘‘(B) NONAPPLICATION.—Subparagraph (A) (other than
clause (v)) does not apply to personnel employed regularly
and full-time in the offices of Commissioners other than
the Chairman.
‘‘(4) DELEGATION.—The Chairman may designate officers
and employees under the Chairman’s jurisdiction to perform
duties and powers of the Chairman, subject to the Chairman’s
supervision and direction.
‘‘(d) SEAL.—The Commission shall have a seal which shall
be judicially recognized.
‘‘§ 302. Quorum
‘‘A vacancy or vacancies in the membership of the Federal
Maritime Commission do not impair the power of the Commission
to execute its functions. The affirmative vote of a majority of the
Commissioners serving on the Commission is required to dispose
of any matter before the Commission.
‘‘§ 303. Record of meetings and votes
‘‘The Federal Maritime Commission, through its secretary, shall
keep a record of its meetings and the votes taken on any action,
order, contract, or financial transaction of the Commission.
‘‘§ 304. Delegation of authority
‘‘(a) DELEGATION.—The Federal Maritime Commission, by pub-
lished order or regulation, may delegate to a division of the Commis-
sion, an individual Commissioner, an employee board, or an officer
or employee of the Commission, any of its duties or powers,
including those relating to hearing, determining, ordering, certi-
fying, reporting, or otherwise acting on any matter. This subsection
does not affect section 556(b) of title 5.
‘‘(b) REVIEW.—The Commission may review any action taken
under a delegation of authority under subsection (a). The review
may be taken on the Commission’s own initiative or on the petition
of a party to or an intervenor in the action, within the time and
in the manner prescribed by the Commission. The vote of a majority
of the Commission, less one member, is sufficient to bring an
action before the Commission for review.
‘‘(c) DEEMED
ACTION
OF
COMMISSION.—If the Commission
declines review, or if review is not sought, within the time pre-
scribed under subsection (b), the action taken under the delegation
of authority is deemed to be the action of the Commission.
‘‘§ 305. Regulations
‘‘The Federal Maritime Commission may prescribe regulations
to carry out its duties and powers.
‘‘§ 306. Annual report
‘‘(a) IN GENERAL.—Not later than April 1 of each year, the
Federal Maritime Commission shall submit a report to Congress.
The report shall include the results of its investigations, a summary
of its transactions, the purposes for which all of its expenditures
were made, and any recommendations for legislation.
‘‘(b) REPORT ON FOREIGN LAWS AND PRACTICES.—The Commis-
sion shall include in its annual report to Congress—
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‘‘(1) a list of the 20 foreign countries that generated the
largest volume of oceanborne liner cargo for the most recent
calendar year in bilateral trade with the United States;
‘‘(2) an analysis of conditions described in section 42302(a)
of this title being investigated or found to exist in foreign
countries;
‘‘(3) any actions being taken by the Commission to offset
those conditions;
‘‘(4) any recommendations for additional legislation to offset
those conditions; and
‘‘(5) a list of petitions filed under section 42302(b) of this
title that the Commission rejected and the reasons for each
rejection.
‘‘§ 307. Expenditures
‘‘The Federal Maritime Commission may make such expendi-
tures as are necessary in the performance of its functions from
funds appropriated or otherwise made available to it, which appro-
priations are authorized.
‘‘CHAPTER 5—OTHER GENERAL PROVISIONS
‘‘Sec.
‘‘501.
Waiver of navigation and vessel-inspection laws.
‘‘502.
Cargo exempt from forfeiture.
‘‘503.
Notice of seizure.
‘‘504.
Remission of fees and penalties.
‘‘505.
Penalty for violating regulation or order.
‘‘§ 501. Waiver of navigation and vessel-inspection laws
‘‘(a) ON REQUEST OF SECRETARY OF DEFENSE.—On request of
the Secretary of Defense, the head of an agency responsible for
the administration of the navigation or vessel-inspection laws shall
waive compliance with those laws to the extent the Secretary con-
siders necessary in the interest of national defense.
‘‘(b) BY HEAD OF AGENCY.—When the head of an agency respon-
sible for the administration of the navigation or vessel-inspection
laws considers it necessary in the interest of national defense,
the individual may waive compliance with those laws to the extent,
in the manner, and on the terms the individual prescribes.
‘‘(c) TERMINATION OF AUTHORITY.—The authority granted by
this section shall terminate at such time as the Congress by concur-
rent resolution or the President may designate.
‘‘§ 502. Cargo exempt from forfeiture
‘‘Cargo on a vessel is exempt from forfeiture under this title
if—
‘‘(1) the cargo is owned in good faith by a person not
the owner, master, or crewmember of the vessel; and
‘‘(2) the customs duties on the cargo have been paid or
secured for payment as provided by law.
‘‘§ 503. Notice of seizure
‘‘When a forfeiture of a vessel or cargo accrues, the official
of the United States Government required to give notice of the
seizure of the vessel or cargo shall include in the notice, if they
are known to that official, the name and the place of residence
of the owner or consignee at the time of the seizure.
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‘‘§ 504. Remission of fees and penalties
‘‘Any part of a fee, tax, or penalty paid or a forfeiture incurred
under a law or regulation relating to vessels or seamen may be
remitted if—
‘‘(1) application for the remission is made within one year
after the date of the payment or forfeiture; and
‘‘(2) it is found that the fee, tax, penalty, or forfeiture
was improperly or excessively imposed.
‘‘§ 505. Penalty for violating regulation or order
‘‘A person convicted of knowingly and willfully violating a regu-
lation or order of the Federal Maritime Commission or the Secretary
of Transportation under subtitle IV or V of this title, for which
no penalty is expressly provided, shall be fined not more than
$500. Each day of a continuing violation is a separate offense.’’.
SEC. 5. SUBTITLE II OF TITLE 46.
Chapter 121 of title 46, United States Code, is amended to
read as follows:
‘‘CHAPTER 121—DOCUMENTATION OF VESSELS
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘12101.
Definitions.
‘‘12102.
Vessels requiring documentation.
‘‘12103.
General eligibility requirements.
‘‘12104.
Applications for documentation.
‘‘12105.
Issuance of documentation.
‘‘12106.
Surrender of title and number.
‘‘12107.
Wrecked vessels.
‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL DOCUMENTATION
‘‘12111.
Registry endorsement.
‘‘12112.
Coastwise endorsement.
‘‘12113.
Fishery endorsement.
‘‘12114.
Recreational endorsement.
‘‘12115.
Temporary endorsement for vessels procured outside the United States.
‘‘12116.
Limited endorsements for Guam, American Samoa, and Northern Mariana
Islands.
‘‘12117.
Oil spill response vessels.
‘‘12118.
Owners engaged primarily in manufacturing or mineral industry.
‘‘12119.
Owners engaged primarily in leasing or financing transactions.
‘‘12120.
Liquified gas tankers.
‘‘12121.
Small passenger vessels and uninspected passenger vessels.
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘12131.
Command of documented vessels.
‘‘12132.
Loss of coastwise trade privileges.
‘‘12133.
Duty to carry certificate on vessel and allow examination.
‘‘12134.
Evidentiary uses of documentation.
‘‘12135.
Invalidation of certificates of documentation.
‘‘12136.
Surrender of certificates of documentation.
‘‘12137.
Recording of vessels built in the United States.
‘‘12138.
List of documented vessels.
‘‘12139.
Reports.
‘‘SUBCHAPTER IV—PENALTIES
‘‘12151.
Penalties.
‘‘12152.
Denial or revocation of endorsement for non-payment of civil penalty.
‘‘SUBCHAPTER I—GENERAL
‘‘§ 12101. Definitions
‘‘(a) REBUILT IN THE UNITED STATES.—In this chapter, a vessel
is deemed to have been rebuilt in the United States only if the
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entire rebuilding, including the construction of any major component
of the hull or superstructure, was done in the United States.
‘‘(b) RELATED TERMS
IN OTHER LAWS.—When the following
terms are used in a law, regulation, document, ruling, or other
official act referring to the documentation of a vessel, the following
definitions apply:
‘‘(1) REGISTRY ENDORSEMENT.—The terms ‘certificate of reg-
istry’, ‘register’, and ‘registry’ mean a certificate of documenta-
tion with a registry endorsement issued under this chapter.
‘‘(2) COASTWISE ENDORSEMENT.—The terms ‘license’, ‘enroll-
ment and license’, ‘license for the coastwise (or coasting) trade’,
and ‘enrollment and license for the coastwise (or coasting) trade’
mean a certificate of documentation with a coastwise endorse-
ment issued under this chapter.
‘‘(3) YACHT.—The term ‘yacht’ means a recreational vessel
even if not documented.
‘‘§ 12102. Vessels requiring documentation
‘‘(a) IN GENERAL.—Except as otherwise provided, a vessel may
engage in a trade only if the vessel has been issued a certificate
of documentation with an endorsement for that trade under this
chapter.
‘‘(b) VESSELS LESS THAN 5 NET TONS.—A vessel of less than
5 net tons may engage in a trade without being documented if
the vessel otherwise satisfies the requirements to engage in the
particular trade.
‘‘(c) BARGES.—A barge qualified to engage in the coastwise
trade may engage in the coastwise trade, without being documented,
on rivers, harbors, lakes (except the Great Lakes), canals, and
inland waters.
‘‘§ 12103. General eligibility requirements
‘‘(a) IN GENERAL.—Except as otherwise provided, a certificate
of documentation for a vessel may be issued under this chapter
only if the vessel is—
‘‘(1) wholly owned by one or more individuals or entities
described in subsection (b);
‘‘(2) at least 5 net tons as measured under part J of this
subtitle; and
‘‘(3) not documented under the laws of a foreign country.
‘‘(b) ELIGIBLE OWNERS.—For purposes of subsection (a)(1), the
following are eligible owners:
‘‘(1) An individual who is a citizen of the United States.
‘‘(2) An association, trust, joint venture, or other entity
if—
‘‘(A) each of its members is a citizen of the United
States; and
‘‘(B) it is capable of holding title to a vessel under
the laws of the United States or a State.
‘‘(3) A partnership if—
‘‘(A) each general partner is a citizen of the United
States; and
‘‘(B) the controlling interest in the partnership is owned
by citizens of the United States.
‘‘(4) A corporation if—
‘‘(A) it is incorporated under the laws of the United
States or a State;
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‘‘(B) its chief executive officer, by whatever title, and
the chairman of its board of directors are citizens of the
United States; and
‘‘(C) no more of its directors are noncitizens than a
minority of the number necessary to constitute a quorum.
‘‘(5) The United States Government.
‘‘(6) The government of a State.
‘‘(c) TEMPORARY CERTIFICATES PRIOR TO MEASUREMENT.—Not-
withstanding subsection (a)(2), the Secretary may issue a temporary
certificate of documentation for a vessel before it is measured.
‘‘§ 12104. Applications for documentation
‘‘(a) IN GENERAL.—An application for a certificate of documenta-
tion or endorsement under this chapter must be filed by the owner
of the vessel. The application must be filed in the manner, be
in the form, and contain the information prescribed by the Sec-
retary.
‘‘(b) APPLICANT’S IDENTIFYING INFORMATION.—The Secretary
shall require the applicant to provide—
‘‘(1) if the applicant is an individual, the individual’s social
security number; or
‘‘(2) if the applicant is an entity—
‘‘(A) the entity’s taxpayer identification number; or
‘‘(B) if the entity does not have a taxpayer identification
number, the social security number of an individual who
is a corporate officer, general partner, or individual trustee
of the entity and who signs the application.
‘‘§ 12105. Issuance of documentation
‘‘(a) IN GENERAL.—Except as provided in section 12152 of this
title, the Secretary, on receipt of a proper application, shall issue
a certificate of documentation or a temporary certificate of docu-
mentation for a vessel satisfying the requirements of section 12103
of this title. The certificate shall contain each endorsement under
subchapter II of this chapter for which the owner applies and
the vessel is eligible.
‘‘(b) TEMPORARY CERTIFICATES FOR RECREATIONAL VESSELS.—
The Secretary may delegate, subject to the supervision and control
of the Secretary and under terms prescribed by regulation, to pri-
vate entities determined and certified by the Secretary to be quali-
fied, the authority to issue a temporary certificate of documentation
for a recreational vessel eligible under section 12103 of this title.
A temporary certificate issued under this subsection is valid for
not more than 30 days.
‘‘(c) INFORMATION TO BE INCLUDED IN CERTIFICATE.—A certifi-
cate of documentation shall—
‘‘(1) identify and describe the vessel;
‘‘(2) identify the owner of the vessel; and
‘‘(3) contain additional information prescribed by the Sec-
retary.
‘‘(d) PROCEDURES TO ENSURE INTEGRITY AND ACCURACY.—The
Secretary shall prescribe procedures to ensure the integrity of,
and the accuracy of information contained in, certificates of docu-
mentation.
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‘‘§ 12106. Surrender of title and number
‘‘(a) IN GENERAL.—A documented vessel may not be titled by
a State or required to display numbers under chapter 123 of this
title, and any certificate of title issued by a State for a documented
vessel shall be surrendered as provided by regulations prescribed
by the Secretary.
‘‘(b) VESSELS COVERED BY PREFERRED MORTGAGE.—The Sec-
retary may approve the surrender under subsection (a) of a certifi-
cate of title for a vessel covered by a preferred mortgage under
section 31322(d) of this title only if the mortgagee consents.
‘‘§ 12107. Wrecked vessels
‘‘(a) REQUIREMENTS.—A vessel is a wrecked vessel under this
chapter if it—
‘‘(1) was wrecked on a coast of the United States or adjacent
waters; and
‘‘(2) has undergone repairs in a shipyard in the United
States equal to at least 3 times the appraised salvage value
of the vessel.
‘‘(b) APPRAISALS.—The Secretary may appoint a board of three
appraisers to determine whether a vessel satisfies subsection (a)(2).
The costs of the appraisal shall be paid by the owner of the vessel.
‘‘SUBCHAPTER II—ENDORSEMENTS AND SPECIAL
DOCUMENTATION
‘‘§ 12111. Registry endorsement
‘‘(a) REQUIREMENTS.—A registry endorsement may be issued
for a vessel that satisfies the requirements of section 12103 of
this title.
‘‘(b) AUTHORIZED ACTIVITY.—A vessel for which a registry
endorsement is issued may engage in foreign trade or trade with
Guam, American Samoa, Wake, Midway, or Kingman Reef.
‘‘(c) CERTAIN VESSELS OWNED BY TRUSTS.—
‘‘(1) NONAPPLICATION OF BENEFICIARY CITIZENSHIP REQUIRE-
MENT.—For the issuance of a certificate of documentation with
only a registry endorsement, the beneficiaries of a trust are
not required to be citizens of the United States if the trust
qualifies under paragraph (2) and the vessel is subject to a
charter to a citizen of the United States.
‘‘(2) REQUIREMENTS FOR TRUST TO QUALIFY.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), a trust
qualifies under this paragraph with respect to a vessel
only if—
‘‘(i) each trustee is a citizen of the United States;
and
‘‘(ii) the application for documentation of the vessel
includes the affidavit of each trustee stating that the
trustee is not aware of any reason involving a bene-
ficiary of the trust that is not a citizen of the United
States, or involving any other person that is not a
citizen of the United States, as a result of which the
beneficiary or other person would hold more than 25
percent of the aggregate power to influence or limit
the exercise of the authority of the trustee with respect
to matters involving any ownership or operation of
Regulations.
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the vessel that may adversely affect the interests of
the United States.
‘‘(B) AUTHORITY OF NON-CITIZENS.—If any person that
is not a citizen of the United States has authority to
direct or participate in directing a trustee for a trust in
matters involving any ownership or operation of the vessel
that may adversely affect the interests of the United States
or in removing a trustee for a trust without cause, either
directly or indirectly through the control of another person,
the trust is not qualified under this paragraph unless the
trust instrument provides that persons who are not citizens
of the United States may not hold more than 25 percent
of the aggregate authority to so direct or remove a trustee.
‘‘(C) OWNERSHIP BY NON-CITIZENS.—Subparagraphs (A)
and (B) do not prohibit a person that is not a citizen
of the United States from holding more than 25 percent
of the beneficial interest in a trust.
‘‘(3) CITIZENSHIP OF PERSON CHARTERING VESSEL.—If a per-
son chartering a vessel from a trust that qualifies under para-
graph (2) is a citizen of the United States under section 50501
of this title, the vessel is deemed to be owned by a citizen
of the United States for purposes of that section and related
laws, except chapter 531 of this title.
‘‘§ 12112. Coastwise endorsement
‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued
for a vessel that—
‘‘(1) satisfies the requirements of section 12103 of this
title;
‘‘(2)(A) was built in the United States; or
‘‘(B) if not built in the United States—
‘‘(i) was captured in war by citizens of the United
States and lawfully condemned as prize;
‘‘(ii) was adjudged to be forfeited for a breach of the
laws of the United States; or
‘‘(iii) qualifies as a wrecked vessel under section 12107
of this title; and
‘‘(3) otherwise qualifies under the laws of the United States
to engage in the coastwise trade.
‘‘(b) AUTHORIZED ACTIVITY.—Subject to the laws of the United
States regulating the coastwise trade, a vessel for which a coastwise
endorsement is issued may engage in the coastwise trade.
‘‘§ 12113. Fishery endorsement
‘‘(a) REQUIREMENTS.—A fishery endorsement may be issued
for a vessel that—
‘‘(1) satisfies the requirements of section 12103 of this
title and, if owned by an entity, the entity satisfies the owner-
ship requirements in subsection (c);
‘‘(2) was built in the United States;
‘‘(3) if rebuilt, was rebuilt in the United States;
‘‘(4) was not forfeited to the United States Government
after July 1, 2001, for a breach of the laws of the United
States; and
‘‘(5) otherwise qualifies under the laws of the United States
to engage in the fisheries.
‘‘(b) AUTHORIZED ACTIVITY.—
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‘‘(1) IN GENERAL.—Subject to the laws of the United States
regulating the fisheries, a vessel for which a fishery endorse-
ment is issued may engage in the fisheries.
‘‘(2) USE BY PROHIBITED PERSONS.—A fishery endorsement
is invalid immediately if the vessel for which it is issued is
used as a fishing vessel while it is chartered or leased to
an individual who is not a citizen of the United States or
to an entity that is not eligible to own a vessel with a fishery
endorsement.
‘‘(c) OWNERSHIP REQUIREMENTS FOR ENTITIES.—
‘‘(1) IN GENERAL.—A vessel owned by an entity is eligible
for a fishery endorsement only if at least 75 percent of the
interest in the entity, at each tier of ownership and in the
aggregate, is owned and controlled by citizens of the United
States.
‘‘(2) DETERMINING 75 PERCENT INTEREST.—In determining
whether at least 75 percent of the interest in the entity is
owned and controlled by citizens of the United States under
paragraph (1), the Secretary shall apply section 50501(d) of
this title, except that for this purpose the terms ‘control’ or
‘controlled’—
‘‘(A) include the right to—
‘‘(i) direct the business of the entity;
‘‘(ii) limit the actions of or replace the chief execu-
tive officer, a majority of the board of directors, any
general partner, or any person serving in a manage-
ment capacity of the entity; or
‘‘(iii) direct the transfer, operation, or manning
of a vessel with a fishery endorsement; but
‘‘(B) do not include the right to simply participate
in the activities under subparagraph (A), or the exercise
of rights under loan or mortgage covenants by a mortgagee
eligible to be a preferred mortgagee under section 31322(a)
of this title, except that a mortgagee not eligible to own
a vessel with a fishery endorsement may only operate
such a vessel to the extent necessary for the immediate
safety of the vessel or for repairs, drydocking, or berthing
changes.
‘‘(3) EXCEPTIONS.—This subsection does not apply to a
vessel when it is engaged in the fisheries in the exclusive
economic zone under the authority of the Western Pacific
Fishery 
Management 
Council 
established 
under 
section
302(a)(1)(H) of the Magnuson-Stevens Fishery Conservation
and Management Act (16 U.S.C. 1852(a)(1)(H)) or to a purse
seine vessel when it is engaged in tuna fishing in the Pacific
Ocean outside the exclusive economic zone or pursuant to the
South Pacific Regional Fisheries Treaty, provided that the
owner of the vessel continues to comply with the eligibility
requirements for a fishery endorsement under the Federal law
that was in effect on October 1, 1998. A fishery endorsement
issued pursuant to this paragraph is valid for engaging only
in the activities described in this paragraph.
‘‘(d) REQUIREMENTS BASED ON LENGTH, TONNAGE, OR HORSE-
POWER.—
‘‘(1) APPLICATION.—This subsection applies to a vessel
that—
‘‘(A) is greater than 165 feet in registered length;
Applicability.
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‘‘(B) is more than 750 gross registered tons as measured
under chapter 145 of this title or 1,900 gross registered
tons as measured under chapter 143 of this title; or
‘‘(C) has an engine or engines capable of producing
a total of more than 3,000 shaft horsepower.
‘‘(2) REQUIREMENTS.—A vessel subject to this subsection
is not eligible for a fishery endorsement unless—
‘‘(A)(i) a certificate of documentation was issued for
the vessel and endorsed with a fishery endorsement that
was effective on September 25, 1997;
‘‘(ii) the vessel is not placed under foreign registry
after October 21, 1998; and
‘‘(iii) if the fishery endorsement is invalidated after
October 21, 1998, application is made for a new fishery
endorsement within 15 business days of the invalidation;
or
‘‘(B) the owner of the vessel demonstrates to the Sec-
retary that the regional fishery management council of
jurisdiction established under section 302(a)(1) of the
Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1852(a)(1)) has recommended after October
21, 1998, and the Secretary of Commerce has approved,
conservation and management measures in accordance
with the American Fisheries Act (Public Law 105–277,
div. C, title II) (16 U.S.C. 1851 note) to allow the vessel
to be used in fisheries under the council’s authority.
‘‘(e) VESSELS MEASURING 100 FEET OR GREATER.—
‘‘(1) IN
GENERAL.—The Administrator of the Maritime
Administration shall administer subsections (c) and (d) with
respect to vessels 100 feet or greater in registered length.
The owner of each such vessel shall file a statement of citizen-
ship setting forth all relevant facts regarding vessel ownership
and control with the Administrator on an annual basis to
demonstrate compliance with those provisions.
‘‘(2) REGULATIONS.—Regulations to implement this sub-
section shall conform to the extent practicable with the regula-
tions establishing the form of citizenship affidavit set forth
in part 355 of title 46, Code of Federal Regulations, as in
effect on September 25, 1997, except that the form of the
statement shall be written in a manner to allow the owner
of the vessel to satisfy any annual renewal requirements for
a certificate of documentation for the vessel and to comply
with this subsection and subsections (c) and (d), and shall
not be required to be notarized.
‘‘(3) TRANSFER OF OWNERSHIP.—Transfers of ownership and
control of vessels subject to subsection (c) or (d), which are
100 feet or greater in registered length, shall be rigorously
scrutinized for violations of those provisions, with particular
attention given to—
‘‘(A) leases, charters, mortgages, financing, and similar
arrangements;
‘‘(B) the control of persons not eligible to own a vessel
with a fishery endorsement under subsection (c) or (d),
over the management, sales, financing, or other operations
of an entity; and
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‘‘(C) contracts involving the purchase over extended
periods of time of all, or substantially all, of the living
marine resources harvested by a fishing vessel.
‘‘(f) VESSELS MEASURING LESS THAN 100 FEET.—The Secretary
shall establish reasonable and necessary requirements to dem-
onstrate compliance with subsections (c) and (d), with respect to
vessels measuring less than 100 feet in registered length, and
shall seek to minimize the administrative burden on individuals
who own and operate those vessels.
‘‘(g) VESSELS PURCHASED THROUGH FISHING CAPACITY REDUC-
TION PROGRAM.—A vessel purchased by the Secretary of Commerce
through a fishing capacity reduction program under the Magnuson-
Stevens Fishery Conservation Management Act (16 U.S.C. 1801
et seq.) or section 308 of the Interjurisdictional Fisheries Act of
1986 (16 U.S.C. 4107) is not eligible for a fishery endorsement,
and any fishery endorsement issued for that vessel is invalid.
‘‘(h) REVOCATION
OF
ENDORSEMENTS.—The Secretary shall
revoke the fishery endorsement of any vessel subject to subsection
(c) or (d) whose owner does not comply with those provisions.
‘‘(i) REGULATIONS.—Regulations to implement subsections (c)
and (d) and sections 12151(c) and 31322(b) of this title shall prohibit
impermissible transfers of ownership or control, specify any trans-
actions that require prior approval of an implementing agency,
identify transactions that do not require prior agency approval,
and to the extent practicable, minimize disruptions to the commer-
cial fishing industry, to the traditional financing arrangements
of that industry, and to the opportunity to form fishery cooperatives.
‘‘§ 12114. Recreational endorsement
‘‘(a) REQUIREMENTS.—A recreational endorsement may be
issued for a vessel that satisfies the requirements of section 12103
of this title.
‘‘(b) AUTHORIZED ACTIVITY.—A vessel operating under a rec-
reational endorsement may be operated only for pleasure.
‘‘(c) APPLICATION OF CUSTOMS LAWS.—A vessel for which a
recreational endorsement is issued may proceed between a port
of the United States and a port of a foreign country without entering
or clearing with the Secretary of Homeland Security. However,
a recreational vessel is subject to the requirements for reporting
arrivals under section 433 of the Tariff Act of 1930 (19 U.S.C.
1433), and individuals on the vessel are subject to applicable cus-
toms regulations.
‘‘§ 12115. Temporary endorsement for vessels procured out-
side the United States
‘‘(a) GENERAL AUTHORITY.—The Secretary and the Secretary
of State, acting jointly, may provide for the issuance of a certificate
of documentation with an appropriate endorsement for a vessel
procured outside the United States and meeting the ownership
requirements of section 12103 of this title.
‘‘(b) AUTHORIZED ACTIVITY.—Subject to limitations the Sec-
retary may prescribe, a vessel documented under this section may
proceed to the United States and engage en route in foreign trade
or trade with Guam, American Samoa, Wake, Midway, or Kingman
Reef.
‘‘(c) APPLICATION OF UNITED STATES JURISDICTION AND LAWS.—
A vessel documented under this section is subject to the jurisdiction
Requirements.
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and laws of the United States. However, if the Secretary considers
it to be in the public interest, the Secretary may suspend for
a period of not more than 6 months the application of a vessel
inspection law carried out by the Secretary or regulations prescribed
under that law.
‘‘(d) SURRENDER OF CERTIFICATE.—On the vessel’s arrival in
the United States, the certificate of documentation shall be surren-
dered as provided by regulations prescribed by the Secretary.
‘‘§ 12116. Limited endorsements for Guam, American Samoa,
and Northern Mariana Islands
‘‘(a) ENDORSEMENTS.—A vessel satisfying the requirements of
subsection (b) may be issued—
‘‘(1) a coastwise endorsement to engage in the coastwise
trade of fisheries products between places in Guam, American
Samoa, and the Northern Mariana Islands; or
‘‘(2) a fishery endorsement to engage in fishing in the
territorial sea and fishery conservation zone adjacent to Guam,
American Samoa, and the Northern Mariana Islands.
‘‘(b) REQUIREMENTS.—An endorsement may be issued under
subsection (a) for a vessel that—
‘‘(1) satisfies the requirements of section 12103 of this
title;
‘‘(2) was not built in the United States, except that for
an endorsement under subsection (a)(2), the vessel must not
have been built or rebuilt in the United States;
‘‘(3) is less than 200 gross tons as measured under section
14502 of this title, or an alternate tonnage as measured under
section 14302 of this title as prescribed by the Secretary under
section 14104 of this title; and
‘‘(4) otherwise qualifies under the laws of the United States
to engage in the coastwise trade or the fisheries, as the case
may be.
‘‘§ 12117. Oil spill response vessels
‘‘(a) REQUIREMENTS.—A coastwise endorsement may be issued
for a vessel that—
‘‘(1) satisfies the requirements for a coastwise endorsement,
except for the ownership requirement otherwise applicable
without regard to this section;
‘‘(2) is owned by a not-for-profit oil spill response coopera-
tive or by members of such a cooperative that dedicate the
vessel to use by the cooperative;
‘‘(3) is at least 50 percent owned by individuals or entities
described in section 12103(b) of this title; and
‘‘(4) is to be used only for—
‘‘(i) deploying equipment, supplies, and personnel to
recover, contain, or transport oil discharged into the navi-
gable waters of the United States or the exclusive economic
zone; or
‘‘(ii) training exercises to prepare to respond to such
a discharge.
‘‘(b) DEEMED OWNED BY CITIZENS.—A vessel satisfying sub-
section (a) is deemed to be owned only by citizens of the United
States under sections 12103, 12132, and 50501 of this title.
Regulations.
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‘‘§ 12118. Owners engaged primarily in manufacturing or
mineral industry
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) BOWATERS CORPORATION.—The term ‘Bowaters corpora-
tion’ means a corporation that has filed a certificate under
oath with the Secretary, in the form and at the times prescribed
by the Secretary, establishing that—
‘‘(A) the corporation is incorporated under the laws
of the United States or a State;
‘‘(B) a majority of the officers and directors of the
corporation are individuals who are citizens of the United
States;
‘‘(C) at least 90 percent of the employees of the corpora-
tion are residents of the United States;
‘‘(D) the corporation is engaged primarily in a manufac-
turing or mineral industry in the United States;
‘‘(E) the total book value of the vessels owned by the
corporation is not more than 10 percent of the total book
value of the assets of the corporation; and
‘‘(F) the corporation buys or produces in the United
States at least 75 percent of the raw materials used or
sold in its operations.
‘‘(2) PARENT.—The term ‘parent’ means a corporation that
has filed a certificate under oath with the Secretary, in the
form and at the times prescribed by the Secretary, establishing
that the corporation—
‘‘(A) is incorporated under the laws of the United States
or a State; and
‘‘(B) controls, directly or indirectly, at least 50 percent
of the voting stock of a Bowaters corporation.
‘‘(3) SUBSIDIARY.—The term ‘subsidiary’ means a corpora-
tion that has filed a certificate under oath with the Secretary,
in the form and at the times prescribed by the Secretary,
establishing that the corporation—
‘‘(A) is incorporated under the laws of the United States
or a State; and
‘‘(B) has at least 50 percent of its voting stock con-
trolled, directly or indirectly, by a Bowaters corporation
or its parent.
‘‘(b) DEEMED CITIZEN.—A Bowaters corporation is deemed to
be a citizen of the United States for purposes of chapters 121,
551, and 561 and section 80104 of this title.
‘‘(c) ISSUANCE OF DOCUMENTATION.—A certificate of documenta-
tion and appropriate endorsement may be issued for a vessel that—
‘‘(1) is owned by a Bowaters corporation;
‘‘(2) was built in the United States; and
‘‘(3)(A) is self-propelled and less than 500 gross tons as
measured under section 14502 of this title, or an alternate
tonnage as measured under section 14302 of this title as pre-
scribed by the Secretary under section 14104 of this title;
or
‘‘(B) is not self-propelled.
‘‘(d) EFFECTS OF DOCUMENTATION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2)—
‘‘(A) a vessel documented under this section may
engage in the coastwise trade; and
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‘‘(B) the vessel and its owner and master are entitled
to the same benefits and are subject to the same require-
ments and penalties as if the vessel were otherwise docu-
mented or exempt from documentation under this chapter.
‘‘(2) TRANSPORTATION OF PASSENGERS OR MERCHANDISE.—
A vessel documented under this section may transport pas-
sengers or merchandise for hire in the coastwise trade only—
‘‘(A) as a service for a parent or subsidiary of the
corporation owning the vessel; or
‘‘(B) when under a demise or bareboat charter, at pre-
vailing rates for use not in the domestic noncontiguous
trades, from the corporation owning the vessel to a carrier
that—
‘‘(i) is subject to jurisdiction under subchapter II
of chapter 135 of title 49;
‘‘(ii) otherwise qualifies as a citizen of the United
States under section 50501 of this title; and
‘‘(iii) is not owned or controlled, directly or
indirectly, by the corporation owning the vessel.
‘‘(e) VALIDITY OF CORPORATE CERTIFICATE.—A certificate filed
by a corporation under this section remains valid only as long
as the corporation continues to satisfy the conditions required of
the corporation by this section. When a corporation no longer satis-
fies those conditions, the corporation loses its status under this
section and immediately shall surrender to the Secretary any docu-
ments issued to it based on that status.
‘‘(f) PENALTIES.—
‘‘(1) FALSIFYING MATERIAL FACT.—If a corporation know-
ingly falsifies a material fact in a certificate filed under sub-
section (a), the vessel (or its value) documented or operated
under this section shall be forfeited.
‘‘(2) TRANSPORTING MERCHANDISE.—If a vessel transports
merchandise for hire in violation of this section, the merchan-
dise shall be forfeited to the United States Government.
‘‘(3) TRANSPORTING
PASSENGERS.—If a vessel transports
passengers for hire in violation of this section, the vessel is
liable for a penalty of $200 for each passenger so transported.
‘‘(4) REMISSION
OR
MITIGATION.—A penalty or forfeiture
incurred under this subsection may be remitted or mitigated
under section 2107(b) of this title.
‘‘§ 12119. Owners engaged primarily in leasing or financing
transactions
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) AFFILIATE.—The term ‘affiliate’ means, with respect
to any person, any other person that is—
‘‘(i) directly or indirectly controlled by, under common
control with, or controlling that person; or
‘‘(ii) named as being part of the same consolidated
group in any report or other document submitted to the
United States Securities and Exchange Commission or the
Internal Revenue Service.
‘‘(2) CARGO.—The term ‘cargo’ does not include cargo to
which title is held for non-commercial reasons and primarily
for the purpose of evading the requirements of subsection (c)(3).
‘‘(3) OIL.—The term ‘oil’ has the meaning given that term
in section 2101(20) of this title.
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‘‘(4) PASSIVE INVESTMENT.—The term ‘passive investment’
means an investment in which neither the investor nor any
affiliate of the investor is involved in, or has the power to
be involved in, the formulation, determination, or direction
of any activity or function concerning the management, use,
or operation of the asset that is the subject of the investment.
‘‘(5) QUALIFIED PROPRIETARY CARGO.—The term ‘qualified
proprietary cargo’ means—
‘‘(A) oil, petroleum products, petrochemicals, or lique-
fied natural gas cargo that is beneficially owned by the
person that submits to the Secretary an application or
annual certification under subsection (c)(3), or by an affil-
iate of that person, immediately before, during, or imme-
diately after the cargo is carried in coastwise trade on
a vessel owned by that person;
‘‘(B) oil, petroleum products, petrochemicals, or lique-
fied natural gas cargo not beneficially owned by the person
that submits to the Secretary an application or an annual
certification under subsection (c)(3), or by an affiliate of
that person, but which is carried in coastwise trade by
a vessel owned by that person and which is part of an
arrangement in which vessels owned by that person and
at least one other person are operated collectively as one
fleet, to the extent that an equal amount of oil, petroleum
products, petrochemicals, or liquefied natural gas cargo
beneficially owned by that person, or by an affiliate of
that person, is carried in coastwise trade on one or more
other vessels, not owned by that person, or by an affiliate
of that person, if the other vessel or vessels are also part
of the same arrangement;
‘‘(C) in the case of a towing vessel associated with
a non-self-propelled tank vessel where both vessels function
as a single self-propelled vessel, oil, petroleum products,
petrochemicals, or liquefied natural gas cargo that is bene-
ficially owned by the person that owns both the towing
vessel and the non-self-propelled tank vessel, or any United
States affiliate of that person, immediately before, during,
or immediately after the cargo is carried in coastwise trade
on either of those vessels; or
‘‘(D) any oil, petroleum products, petrochemicals, or
liquefied natural gas cargo carried on any vessel that is
either a self-propelled tank vessel having a length of at
least 210 meters or a tank vessel that is a liquefied natural
gas carrier that—
‘‘(i) was delivered by the builder of the vessel to
the owner of the vessel after December 31, 1999; and
‘‘(ii) was purchased by a person for the purpose,
and with the reasonable expectation, of transporting
on the vessel liquefied natural gas or unrefined petro-
leum beneficially owned by the owner of the vessel,
or an affiliate of the owner, from Alaska to the conti-
nental United States.
‘‘(6) UNITED STATES AFFILIATE.—The term ‘United States
affiliate’ means, with respect to any person, an affiliate the
principal place of business of which is located in the United
States.
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‘‘(b) REQUIREMENTS.—A coastwise endorsement may be issued
for a vessel if—
‘‘(1) the vessel satisfies the requirements for a coastwise
endorsement, except for the ownership requirement otherwise
applicable without regard to this section;
‘‘(2) the person that owns the vessel (or, if the vessel
is owned by a trust or similar arrangement, the beneficiary
of the trust or similar arrangement) meets the requirements
of subsection (c);
‘‘(3) the vessel is under a demise charter to a person that
certifies to the Secretary that the person is a citizen of the
United States under section 50501 of this title for engaging
in the coastwise trade; and
‘‘(4) the demise charter is for a period of at least 3 years
or a shorter period as may be prescribed by the Secretary.
‘‘(c) OWNERSHIP CERTIFICATION.—
‘‘(1) IN
GENERAL.—A person meets the requirements of
this subsection if the person transmits to the Secretary each
year the certification required by paragraph (2) or (3) with
respect to a vessel.
‘‘(2) INVESTMENT CERTIFICATION.—To meet the certification
requirement of this paragraph, a person shall certify that it—
‘‘(A) is a leasing company, bank, or financial institution;
‘‘(B) owns, or holds the beneficial interest in, the vessel
solely as a passive investment;
‘‘(C) does not operate any vessel for hire and is not
an affiliate of any person that operates any vessel for
hire; and
‘‘(D) is independent from, and not an affiliate of, any
charterer of the vessel or any other person that has the
right, directly or indirectly, to control or direct the move-
ment or use of the vessel.
‘‘(3) CERTAIN TANK VESSELS.—
‘‘(A) IN GENERAL.—To meet the certification require-
ment of this paragraph, a person shall certify that—
‘‘(i) the aggregate book value of the vessels owned
by the person and United States affiliates of the person
does not exceed 10 percent of the aggregate book value
of all assets owned by the person and its United States
affiliates;
‘‘(ii) not more than 10 percent of the aggregate
revenues of the person and its United States affiliates
is derived from the ownership, operation, or manage-
ment of vessels;
‘‘(iii) at least 70 percent of the aggregate tonnage
of all cargo carried by all vessels owned by the person
and its United States affiliates and documented with
a coastwise endorsement is qualified proprietary cargo;
‘‘(iv) any cargo other than qualified proprietary
cargo carried by all vessels owned by the person and
its United States affiliates and documented with a
coastwise endorsement consists of oil, petroleum prod-
ucts, petrochemicals, or liquified natural gas;
‘‘(v) no vessel owned by the person or any of its
United States affiliates and documented with a coast-
wise endorsement carries molten sulphur; and
Certification.
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‘‘(vi) the person owned one or more vessels docu-
mented under this section as of August 9, 2004.
‘‘(B) APPLICATION ONLY TO CERTAIN VESSELS.—A person
may make a certification under this paragraph only with
respect to—
‘‘(i) a tank vessel having a tonnage of at least
6,000 gross tons, as measured under section 14502
of this title (or an alternative tonnage measured under
section 14302 of this title as prescribed by the Sec-
retary under section 14104 of this title); or
‘‘(ii) a towing vessel associated with a non-self-
propelled tank vessel that meets the requirements of
clause (i), where both vessels function as a single self-
propelled vessel.
‘‘(d) FILING OF DEMISE CHARTER.—The demise charter and any
amendments to the charter shall be filed with the certification
required by subsection (b)(3) or within 10 days after filing an
amendment to the charter. The charter and amendments shall
be made available to the public.
‘‘(e) CONTINUATION OF ENDORSEMENT AFTER TERMINATION OF
CHARTER.—When a charter required by subsection (b)(3) is termi-
nated for default by the charterer, the Secretary may continue
the coastwise endorsement for not more than 6 months on terms
and conditions the Secretary may prescribe.
‘‘(f) DEEMED OWNED
BY CITIZENS.—A vessel satisfying the
requirements of this section is deemed to be owned only by citizens
of the United States under sections 12103 and 50501 of this title.
‘‘§ 12120. Liquified gas tankers
‘‘Notwithstanding any agreement with the United States
Government, the Secretary may issue a certificate of documentation
with a coastwise endorsement for a vessel to transport liquified
natural gas or liquified petroleum gas to Puerto Rico from other
ports in the United States, if the vessel—
‘‘(1) is a foreign built vessel that was built before October
19, 1996; or
‘‘(2) was documented under this chapter before that date,
even if the vessel is placed under a foreign registry and subse-
quently redocumented under this chapter for operation under
this section.
‘‘§ 12121. Small passenger vessels and uninspected passenger
vessels
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ELIGIBLE
VESSEL.—The term ‘eligible vessel’ means
a vessel that—
‘‘(A) was not built in the United States and is at
least 3 years old; or
‘‘(B) if rebuilt, was rebuilt outside the United States
at least 3 years before the certificate requested under sub-
section (b) would take effect.
‘‘(2) SMALL PASSENGER VESSEL; UNINSPECTED PASSENGER
VESSEL; PASSENGER
FOR
HIRE.—The terms ‘small passenger
vessel’, ‘uninspected passenger vessel’, and ‘passenger for hire’
have the meaning given those terms in section 2101 of this
title.
Public
information.
Deadline.
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‘‘(b) ISSUANCE OF CERTIFICATE AND ENDORSEMENT.—Notwith-
standing sections 12112, 12113, 55102, and 55103 of this title,
the Secretary may issue a certificate of documentation with an
appropriate endorsement for employment in the coastwise trade
as a small passenger vessel or an uninspected passenger vessel
in the case of an eligible vessel authorized to carry no more than
12 passengers for hire if the Secretary of Transportation, after
notice and an opportunity for public comment, determines that
the employment of the vessel in the coastwise trade will not
adversely affect—
‘‘(1) United States vessel builders; or
‘‘(2) the coastwise trade business of any person that employs
vessels built in the United States in that business.
‘‘(c) REVOCATION.—
‘‘(1) FOR FRAUD.—The Secretary shall revoke a certificate
or endorsement issued under subsection (b) if the Secretary
of Transportation, after notice and an opportunity for a hearing,
determines that the certificate or endorsement was obtained
by fraud.
‘‘(2) OTHER PROVISIONS NOT AFFECTED.—Paragraph (1) does
not affect—
‘‘(A) the criminal prohibition on fraud and false state-
ments in section 1001 of title 18; or
‘‘(B) any other authority of the Secretary to revoke
a certificate or endorsement issued under subsection (b).
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘§ 12131. Command of documented vessels
‘‘(a) IN GENERAL.—Except as provided in subsection (b), a docu-
mented vessel may be placed under the commmand only of a citizen
of the United States.
‘‘(b) EXCEPTIONS.—Subsection (a) does not apply to—
‘‘(1) a vessel with only a recreational endorsement; or
‘‘(2) an unmanned barge operating outside of the territorial
waters of the United States.
‘‘§ 12132. Loss of coastwise trade privileges
‘‘(a) SOLD FOREIGN OR PLACED UNDER FOREIGN REGISTRY.—
A vessel of more than 200 gross tons (as measured under chapter
143 of this title), eligible to engage in the coastwise trade, and
later sold foreign in whole or in part or placed under foreign
registry may not thereafter engage in the coastwise trade.
‘‘(b) REBUILT OUTSIDE THE UNITED STATES.—A vessel eligible
to engage in the coastwise trade and later rebuilt outside the
United States may not thereafter engage in the coastwise trade.
‘‘§ 12133. Duty to carry certificate on vessel and allow exam-
ination
‘‘(a) DUTY TO CARRY.—The certificate of documentation of a
vessel shall be carried on the vessel unless the vessel is exempt
by regulation from carrying the certificate.
‘‘(b) AVAILABILITY.—The owner or individual in charge of a
vessel required to carry its certificate of documentation shall make
the certificate available for examination at the request of an officer
enforcing the revenue laws or as otherwise required by law or
regulation.
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‘‘(c) CRIMINAL PENALTY.—A person willfully violating subsection
(b) shall be fined under title 18, imprisoned for not more than
one year, or both.
‘‘§ 12134. Evidentiary uses of documentation
‘‘A certificate of documentation is—
‘‘(1) conclusive evidence of nationality for international pur-
poses, but not in a proceeding conducted under the laws of
the United States;
‘‘(2) conclusive evidence of qualification to engage in a
specified trade; and
‘‘(3) not conclusive evidence of ownership in a proceeding
in which ownership is in issue.
‘‘§ 12135. Invalidation of certificates of documentation
‘‘A certificate of documentation or an endorsement on the certifi-
cate is invalid if the vessel for which it is issued—
‘‘(1) no longer meets the requirements of this chapter and
regulations prescribed under this chapter applicable to the
certificate or endorsement; or
‘‘(2) is placed under the command of an individual not
a citizen of the United States in violation of section 12131
of this title.
‘‘§ 12136. Surrender of certificates of documentation
‘‘(a) SURRENDER.—An invalid certificate of documentation, or
a certificate with an invalid endorsement, shall be surrendered
as provided by regulations prescribed by the Secretary.
‘‘(b) CONDITIONS FOR SURRENDER.—
‘‘(1) VESSELS OVER 1,000 TONS.—The Secretary may condi-
tion approval of the surrender of the certificate of documenta-
tion for a vessel over 1,000 gross tons.
‘‘(2) VESSELS COVERED BY MORTGAGE.—The Secretary may
approve the surrender of the certificate of documentation of
a vessel covered by a mortgage filed or recorded under section
31321 of this title only if the mortgagee consents.
‘‘(3) NOTICE OF LIEN.—The Secretary may not refuse to
approve the surrender of the certificate of documentation for
a vessel solely on the basis that a notice of a claim of a
lien on the vessel has been recorded under section 31343(a)
of this title.
‘‘(c) CONTINUED APPLICATION OF CERTAIN LAWS.—
‘‘(1) IN
GENERAL.—Notwithstanding subsection (a), until
the certificate of documentation is surrendered with the
approval of the Secretary, a documented vessel is deemed to
continue to be documented under this chapter for purposes
of—
‘‘(A) chapter 313 of this title for an instrument filed
or recorded before the date of invalidation and an assign-
ment after that date;
‘‘(B) sections 56101 and 56102(a)(2) and chapter 563
of this title; and
‘‘(C) any other law of the United States identified by
the Secretary by regulation as a law to which the Secretary
applies this subsection.
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‘‘(2) EXCEPTION.—This subsection does not apply when a
vessel is forfeited or sold by order of a district court of the
United States.
‘‘§ 12137. Recording of vessels built in the United States
‘‘The Secretary may provide for recording and certifying
information about vessels built in the United States that the Sec-
retary considers to be in the public interest.
‘‘§ 12138. List of documented vessels
‘‘(a) IN GENERAL.—The Secretary shall publish periodically a
list of all documented vessels and information about those vessels
that the Secretary considers pertinent or useful. The list shall
contain a notation clearly indicating all vessels classed by the
American Bureau of Shipping.
‘‘(b) VESSELS FOR CABLE LAYING, MAINTENANCE, AND REPAIR.—
‘‘(1) IN GENERAL.—The Secretary of Transportation shall
develop, maintain, and periodically update an inventory of ves-
sels that are documented under this chapter, are at least 200
feet in length, and have the capability to lay, maintain, or
repair a submarine cable, without regard to whether a par-
ticular vessel is classed as a cable ship or cable vessel.
‘‘(2) INFORMATION TO BE INCLUDED.—For each vessel listed
in the inventory, the Secretary of Transportation shall include
in the inventory—
‘‘(A) the name, length, beam, depth, and other distin-
guishing characteristics of the vessel;
‘‘(B) the abilities and limitations of the vessel with
respect to laying, maintaining, and repairing a submarine
cable; and
‘‘(C) the name and address of the person to whom
inquiries regarding the vessel may be made.
‘‘(3) PUBLICATION.—The Secretary of Transportation shall
publish in the Federal Register an updated inventory every
6 months.
‘‘§ 12139. Reports
‘‘(a) IN GENERAL.—To ensure compliance with this chapter and
laws governing the qualifications of vessels to engage in the coast-
wise trade and the fisheries, the Secretary may require owners,
masters, and charterers of documented vessels to submit reports
in any reasonable form and manner the Secretary may prescribe.
‘‘(b) VESSELS REBUILT OUTSIDE UNITED STATES.—
‘‘(1) IN GENERAL.—Under regulations prescribed by the Sec-
retary, if a vessel exceeding the tonnage specified in paragraph
(2) and documented or last documented under the laws of
the United States is rebuilt outside the United States, the
owner or master shall submit a report of the rebuilding to
the Secretary.
‘‘(2) TONNAGE.—The tonnage referred to in paragraph (1)
is—
‘‘(A) 500 gross tons as measured under section 14502
of this title; or
‘‘(B) an alternate tonnage as measured under section
14302 of this title as prescribed by the Secretary under
section 14104 of this title.
Regulations.
Federal Register,
publication.
Publication.
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‘‘(3) TIMING OF SUBMISSION.—If the rebuilding is completed
in the United States, the report shall be submitted when the
rebuilding is completed. If the rebuilding is completed outside
the United States, the report shall be submitted when the
vessel first arrives at a port in the customs territory of the
United States.
‘‘SUBCHAPTER IV—PENALTIES
‘‘§ 12151. Penalties
‘‘(a) IN GENERAL.—A person that violates this chapter or a
regulation prescribed under this chapter is liable to the United
States Government for a civil penalty of not more than $10,000.
Each day of a continuing violation is a separate violation.
‘‘(b) SEIZURE AND FORFEITURE OF VESSELS.—A vessel and its
equipment are liable to seizure by and forfeiture to the Government
if—
‘‘(1) the owner of the vessel or the representative or agent
of the owner knowingly falsifies or conceals a material fact,
or knowingly makes a false statement or representation, about
the documentation of the vessel or in applying for documenta-
tion of the vessel;
‘‘(2) a certificate of documentation is knowingly and fraudu-
lently used for the vessel;
‘‘(3) the vessel is operated after its endorsement has been
denied or revoked under section 12152 of this title;
‘‘(4) the vessel is employed in a trade without an appro-
priate endorsement;
‘‘(5) the vessel has only a recreational endorsement and
is operated other than for pleasure;
‘‘(6) the vessel is a documented vessel and is placed under
the command of a person not a citizen of the United States,
except as authorized by section 12131(b) of this title; or
‘‘(7) the vessel is rebuilt outside the United States and
a report of the rebuilding is not submitted as required by
section 12139(b) of this title.
‘‘(c) ENGAGING
IN FISHING AFTER FALSIFYING ELIGIBILITY.—
In addition to other penalties under this section, the owner of
a documented vessel for which a fishery endorsement has been
issued is liable to the Government for a civil penalty of not more
than $100,000 for each day the vessel engages in fishing (as defined
in section 3 of the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1802)) within the exclusive economic
zone, if the owner or the representative or agent of the owner
knowingly falsified or concealed a material fact, or knowingly made
a false statement or representation, about the eligibility of the
vessel under section 12113(c) or (d) of this title in applying for
or applying to renew the fishery endorsement.
‘‘§ 12152. Denial or revocation of endorsement for non-pay-
ment of civil penalty
‘‘If the owner of a vessel fails to pay a civil penalty imposed
by the Secretary, the Secretary may deny the issuance or renewal
of an endorsement, or revoke the endorsement, on a certificate
of documentation issued for the vessel under this chapter.’’.
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PUBLIC LAW 109–304—OCT. 6, 2006
SEC. 6. SUBTITLE III OF TITLE 46.
(a) SUBTITLE ANALYSIS.—The analysis of subtitle III of title
46, United States Code, is amended to read as follows:
‘‘Chapter
Sec.
‘‘301. General Liability Provisions ...............................................................30101
‘‘303. Death on the High Seas .........................................................................30301
‘‘305. Exoneration and Limitation of Liability ..........................................30501
‘‘307. Liability of Water Carriers ...................................................................30701
‘‘309. Suits in Admiralty Against the United States .................................30901
‘‘311. Suits Involving Public Vessels ............................................................31101
‘‘313. Commercial Instruments and Maritime Liens ................................31301’’.
(b) REPEALS.—Title 46, United States Code, is amended by
striking chapter 301 and the lines appearing immediately before
and immediately after chapter 313 indicating that certain chapters
are reserved.
(c) CHAPTERS
301–311.—Title 46, United States Code, is
amended by inserting after the analysis of subtitle III the following:
‘‘CHAPTER 301—GENERAL LIABILITY PROVISIONS
‘‘Sec.
‘‘30101.
Extension of jurisdiction to cases of damage or injury on land.
‘‘30102.
Liability to passengers.
‘‘30103.
Liability of master, mate, engineer, and pilot.
‘‘30104.
Personal injury to or death of seamen.
‘‘30105.
Restriction on recovery by non-citizens and non-resident aliens for inci-
dents in waters of other countries.
‘‘30106.
Time limit on bringing maritime action for personal injury or death.
‘‘§ 30101. Extension of jurisdiction to cases of damage or
injury on land
‘‘(a) IN GENERAL.—The admiralty and maritime jurisdiction
of the United States extends to and includes cases of injury or
damage, to person or property, caused by a vessel on navigable
waters, even though the injury or damage is done or consummated
on land.
‘‘(b) PROCEDURE.—A civil action in a case under subsection
(a) may be brought in rem or in personam according to the principles
of law and the rules of practice applicable in cases where the
injury or damage has been done and consummated on navigable
waters.
‘‘(c) ACTIONS AGAINST UNITED STATES.—
‘‘(1) EXCLUSIVE
REMEDY.—In a civil action against the
United States for injury or damage done or consummated on
land by a vessel on navigable waters, chapter 309 or 311
of this title, as appropriate, provides the exclusive remedy.
‘‘(2) ADMINISTRATIVE CLAIM.—A civil action described in
paragraph (1) may not be brought until the expiration of the
6-month period after the claim has been presented in writing
to the agency owning or operating the vessel causing the injury
or damage.
‘‘§ 30102. Liability to passengers
‘‘(a) LIABILITY.—The owner and master of a vessel, and the
vessel, are liable for personal injury to a passenger or damage
to a passenger’s baggage caused by—
‘‘(1) a neglect or failure to comply with part B or F of
subtitle II of this title; or
‘‘(2) a known defect in the steaming apparatus or hull
of the vessel.
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‘‘(b) NOT SUBJECT TO LIMITATION.—A liability imposed under
this section is not subject to limitation under chapter 305 of this
title.
‘‘§ 30103. Liability of master, mate, engineer, and pilot
‘‘A person may bring a civil action against a master, mate,
engineer, or pilot of a vessel, and recover damages, for personal
injury or loss caused by the master’s, mate’s, engineer’s, or pilot’s—
‘‘(1) negligence or willful misconduct; or
‘‘(2) neglect or refusal to obey the laws governing the
navigation of vessels.
‘‘§ 30104. Personal injury to or death of seamen
‘‘(a) CAUSE OF ACTION.—A seaman injured in the course of
employment or, if the seaman dies from the injury, the personal
representative of the seaman may elect to bring a civil action
at law, with the right of trial by jury, against the employer. Laws
of the United States regulating recovery for personal injury to,
or death of, a railway employee apply to an action under this
section.
‘‘(b) VENUE.—An action under this section shall be brought
in the judicial district in which the employer resides or the
employer’s principal office is located.
‘‘§ 30105. Restriction on recovery by non-citizens and non-
resident aliens for incidents in waters of other
countries
‘‘(a) DEFINITION.—In this section, the term ‘continental shelf ’
has the meaning given that term in article I of the 1958 Convention
on the Continental Shelf.
‘‘(b) RESTRICTION.—Except as provided in subsection (c), a civil
action for maintenance and cure or for damages for personal injury
or death may not be brought under a maritime law of the United
States if—
‘‘(1) the individual suffering the injury or death was not
a citizen or permanent resident alien of the United States
at the time of the incident giving rise to the action;
‘‘(2) the incident occurred in the territorial waters or waters
overlaying the continental shelf of a country other than the
United States; and
‘‘(3) the individual suffering the injury or death was
employed at the time of the incident by a person engaged
in the exploration, development, or production of offshore min-
eral or energy resources, including drilling, mapping, surveying,
diving, pipelaying, maintaining, repairing, constructing, or
transporting supplies, equipment, or personnel, but not
including transporting those resources by a vessel constructed
or adapted primarily to carry oil in bulk in the cargo spaces.
‘‘(c) NONAPPLICATION.—Subsection (b) does not apply if the indi-
vidual bringing the action establishes that a remedy is not available
under the laws of—
‘‘(1) the country asserting jurisdiction over the area in
which the incident occurred; or
‘‘(2) the country in which the individual suffering the injury
or death maintained citizenship or residency at the time of
the incident.
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‘‘§ 30106. Time limit on bringing maritime action for personal
injury or death
‘‘Except as otherwise provided by law, a civil action for damages
for personal injury or death arising out of a maritime tort must
be brought within 3 years after the cause of action arose.
‘‘CHAPTER 303—DEATH ON THE HIGH SEAS
‘‘Sec.
‘‘30301.
Short title.
‘‘30302.
Cause of action.
‘‘30303.
Amount and apportionment of recovery.
‘‘30304.
Contributory negligence.
‘‘30305.
Death of plaintiff in pending action.
‘‘30306.
Foreign cause of action.
‘‘30307.
Commercial aviation accidents.
‘‘30308.
Nonapplication.
‘‘§ 30301. Short title
‘‘This chapter may be cited as the ‘Death on the High Seas
Act’.
‘‘§ 30302. Cause of action
‘‘When the death of an individual is caused by wrongful act,
neglect, or default occurring on the high seas beyond 3 nautical
miles from the shore of the United States, the personal representa-
tive of the decedent may bring a civil action in admiralty against
the person or vessel responsible. The action shall be for the exclusive
benefit of the decedent’s spouse, parent, child, or dependent relative.
‘‘§ 30303. Amount and apportionment of recovery
‘‘The recovery in an action under this chapter shall be a fair
compensation for the pecuniary loss sustained by the individuals
for whose benefit the action is brought. The court shall apportion
the recovery among those individuals in proportion to the loss
each has sustained.
‘‘§ 30304. Contributory negligence
‘‘In an action under this chapter, contributory negligence of
the decedent is not a bar to recovery. The court shall consider
the degree of negligence of the decedent and reduce the recovery
accordingly.
‘‘§ 30305. Death of plaintiff in pending action
‘‘If a civil action in admiralty is pending in a court of the
United States to recover for personal injury caused by wrongful
act, neglect, or default described in section 30302 of this title,
and the individual dies during the action as a result of the wrongful
act, neglect, or default, the personal representative of the decedent
may be substituted as the plaintiff and the action may proceed
under this chapter for the recovery authorized by this chapter.
‘‘§ 30306. Foreign cause of action
‘‘When a cause of action exists under the law of a foreign
country for death by wrongful act, neglect, or default on the high
seas, a civil action in admiralty may be brought in a court of
the United States based on the foreign cause of action, without
abatement of the amount for which recovery is authorized.
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‘‘§ 30307. Commercial aviation accidents
‘‘(a) DEFINITION.—In this section, the term ‘nonpecuniary dam-
ages’ means damages for loss of care, comfort, and companionship.
‘‘(b) BEYOND 12 NAUTICAL MILES.—In an action under this
chapter, if the death resulted from a commercial aviation accident
occurring on the high seas beyond 12 nautical miles from the
shore of the United States, additional compensation is recoverable
for nonpecuniary damages, but punitive damages are not recover-
able.
‘‘(c) WITHIN 12 NAUTICAL MILES.—This chapter does not apply
if the death resulted from a commercial aviation accident occurring
on the high seas 12 nautical miles or less from the shore of the
United States.
‘‘§ 30308. Nonapplication
‘‘(a) STATE LAW.—This chapter does not affect the law of a
State regulating the right to recover for death.
‘‘(b) INTERNAL WATERS.—This chapter does not apply to the
Great Lakes or waters within the territorial limits of a State.
‘‘CHAPTER 305—EXONERATION AND LIMITATION OF
LIABILITY
‘‘Sec.
‘‘30501.
Definition.
‘‘30502.
Application.
‘‘30503.
Declaration of nature and value of goods.
‘‘30504.
Loss by fire.
‘‘30505.
General limit of liability.
‘‘30506.
Limit of liability for personal injury or death.
‘‘30507.
Apportionment of losses.
‘‘30508.
Provisions requiring notice of claim or limiting time for bringing action.
‘‘30509.
Provisions limiting liability for personal injury or death.
‘‘30510.
Vicarious liability for medical malpractice with regard to crew.
‘‘30511.
Action by owner for limitation.
‘‘30512.
Liability as master, officer, or seaman not affected.
‘‘§ 30501. Definition
‘‘In this chapter, the term ‘owner’ includes a charterer that
mans, supplies, and navigates a vessel at the charterer’s own
expense or by the charterer’s own procurement.
‘‘§ 30502. Application
‘‘Except as otherwise provided, this chapter (except section
30503) applies to seagoing vessels and vessels used on lakes or
rivers or in inland navigation, including canal boats, barges, and
lighters.
‘‘§ 30503. Declaration of nature and value of goods
‘‘(a) IN GENERAL.—If a shipper of an item named in subsection
(b), contained in a parcel, package, or trunk, loads the item as
freight or baggage on a vessel, without at the time of loading
giving to the person receiving the item a written notice of the
true character and value of the item and having that information
entered on the bill of lading, the owner and master of the vessel
are not liable as carriers. The owner and master are not liable
beyond the value entered on the bill of lading.
‘‘(b) ITEMS.—The items referred to in subsection (a) are precious
metals, gold or silver plated articles, precious stones, jewelry, trin-
kets, watches, clocks, glass, china, coins, bills, securities, printings,
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engravings, pictures, stamps, maps, papers, silks, furs, lace, and
similar items of high value and small size.
‘‘§ 30504. Loss by fire
‘‘The owner of a vessel is not liable for loss or damage to
merchandise on the vessel caused by a fire on the vessel unless
the fire resulted from the design or neglect of the owner.
‘‘§ 30505. General limit of liability
‘‘(a) IN GENERAL.—Except as provided in section 30506 of this
title, the liability of the owner of a vessel for any claim, debt,
or liability described in subsection (b) shall not exceed the value
of the vessel and pending freight. If the vessel has more than
one owner, the proportionate share of the liability of any one owner
shall not exceed that owner’s proportionate interest in the vessel
and pending freight.
‘‘(b) CLAIMS
SUBJECT
TO
LIMITATION.—Unless otherwise
excluded by law, claims, debts, and liabilities subject to limitation
under subsection (a) are those arising from any embezzlement,
loss, or destruction of any property, goods, or merchandise shipped
or put on board the vessel, any loss, damage, or injury by collision,
or any act, matter, or thing, loss, damage, or forfeiture, done,
occasioned, or incurred, without the privity or knowledge of the
owner.
‘‘(c) WAGES.—Subsection (a) does not apply to a claim for wages.
‘‘§ 30506. Limit of liability for personal injury or death
‘‘(a) APPLICATION.—This section applies only to seagoing vessels,
but does not apply to pleasure yachts, tugs, towboats, towing ves-
sels, tank vessels, fishing vessels, fish tender vessels, canal boats,
scows, car floats, barges, lighters, or nondescript vessels.
‘‘(b) MINIMUM LIABILITY.—If the amount of the vessel owner’s
liability determined under section 30505 of this title is insufficient
to pay all losses in full, and the portion available to pay claims
for personal injury or death is less than $420 times the tonnage
of the vessel, that portion shall be increased to $420 times the
tonnage of the vessel. That portion may be used only to pay claims
for personal injury or death.
‘‘(c) CALCULATION OF TONNAGE.—Under subsection (b), the ton-
nage of a self-propelled vessel is the gross tonnage without deduc-
tion for engine room, and the tonnage of a sailing vessel is the
tonnage for documentation. However, space for the use of seamen
is excluded.
‘‘(d) CLAIMS ARISING ON DISTINCT OCCASIONS.—Separate limits
of liability apply to claims for personal injury or death arising
on distinct occasions.
‘‘(e) PRIVITY OR KNOWLEDGE.—In a claim for personal injury
or death, the privity or knowledge of the master or the owner’s
superintendent or managing agent, at or before the beginning of
each voyage, is imputed to the owner.
‘‘§ 30507. Apportionment of losses
‘‘If the amounts determined under sections 30505 and 30506
of this title are insufficient to pay all claims—
‘‘(1) all claimants shall be paid in proportion to their respec-
tive losses out of the amount determined under section 30505
of this title; and
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‘‘(2) personal injury and death claimants, if any, shall be
paid an additional amount in proportion to their respective
losses out of the additional amount determined under section
30506(b) of this title.
‘‘§ 30508. Provisions requiring notice of claim or limiting
time for bringing action
‘‘(a) APPLICATION.—This section applies only to seagoing vessels,
but does not apply to pleasure yachts, tugs, towboats, towing ves-
sels, tank vessels, fishing vessels, fish tender vessels, canal boats,
scows, car floats, barges, lighters, or nondescript vessels.
‘‘(b) MINIMUM TIME LIMITS.—The owner, master, manager, or
agent of a vessel transporting passengers or property between ports
in the United States, or between a port in the United States
and a port in a foreign country, may not limit by regulation,
contract, or otherwise the period for—
‘‘(1) giving notice of, or filing a claim for, personal injury
or death to less than 6 months after the date of the injury
or death; or
‘‘(2) bringing a civil action for personal injury or death
to less than one year after the date of the injury or death.
‘‘(c) EFFECT
OF FAILURE TO GIVE NOTICE.—When notice of
a claim for personal injury or death is required by a contract,
the failure to give the notice is not a bar to recovery if—
‘‘(1) the court finds that the owner, master, or agent of
the vessel had knowledge of the injury or death and the owner
has not been prejudiced by the failure;
‘‘(2) the court finds there was a satisfactory reason why
the notice could not have been given; or
‘‘(3) the owner of the vessel fails to object to the failure
to give the notice.
‘‘(d) TOLLING OF PERIOD TO GIVE NOTICE.—If a claimant is
a minor or mental incompetent, or if a claim is for wrongful death,
any period provided by a contract for giving notice of the claim
is tolled until the earlier of—
‘‘(1) the date a legal representative is appointed for the
minor, incompetent, or decedent’s estate; or
‘‘(2) 3 years after the injury or death.
‘‘§ 30509. Provisions limiting liability for personal injury or
death
‘‘(a) PROHIBITION.—
‘‘(1) IN GENERAL.—The owner, master, manager, or agent
of a vessel transporting passengers between ports in the United
States, or between a port in the United States and a port
in a foreign country, may not include in a regulation or contract
a provision limiting—
‘‘(A) the liability of the owner, master, or agent for
personal injury or death caused by the negligence or fault
of the owner or the owner’s employees or agents; or
‘‘(B) the right of a claimant for personal injury or
death to a trial by court of competent jurisdiction.
‘‘(2) VOIDNESS.—A provision described in paragraph (1) is
void.
‘‘(b) EMOTIONAL DISTRESS, MENTAL SUFFERING, AND PSYCHO-
LOGICAL INJURY.—
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‘‘(1) IN GENERAL.—Subsection (a) does not prohibit a provi-
sion in a contract or in ticket conditions of carriage with a
passenger that relieves an owner, master, manager, agent,
operator, or crewmember of a vessel from liability for infliction
of emotional distress, mental suffering, or psychological injury
so long as the provision does not limit such liability when
the emotional distress, mental suffering, or psychological injury
is—
‘‘(A) the result of physical injury to the claimant caused
by the negligence or fault of a crewmember or the owner,
master, manager, agent, or operator;
‘‘(B) the result of the claimant having been at actual
risk of physical injury, and the risk was caused by the
negligence or fault of a crewmember or the owner, master,
manager, agent, or operator; or
‘‘(C) intentionally inflicted by a crewmember or the
owner, master, manager, agent, or operator.
‘‘(2) SEXUAL OFFENSES.—This subsection does not limit the
liability of a crewmember or the owner, master, manager, agent,
or operator of a vessel in a case involving sexual harassment,
sexual assault, or rape.
‘‘§ 30510. Vicarious liability for medical malpractice with
regard to crew
‘‘In a civil action by any person in which the owner or operator
of a vessel or employer of a crewmember is claimed to have vicarious
liability for medical malpractice with regard to a crewmember occur-
ring at a shoreside facility, and to the extent the damages resulted
from the conduct of any shoreside doctor, hospital, medical facility,
or other health care provider, the owner, operator, or employer
is entitled to rely on any statutory limitations of liability applicable
to the doctor, hospital, medical facility, or other health care provider
in the State of the United States in which the shoreside medical
care was provided.
‘‘§ 30511. Action by owner for limitation
‘‘(a) IN GENERAL.—The owner of a vessel may bring a civil
action in a district court of the United States for limitation of
liability under this chapter. The action must be brought within
6 months after a claimant gives the owner written notice of a
claim.
‘‘(b) CREATION OF FUND.—When the action is brought, the owner
(at the owner’s option) shall—
‘‘(1) deposit with the court, for the benefit of claimants—
‘‘(A) an amount equal to the value of the owner’s
interest in the vessel and pending freight, or approved
security; and
‘‘(B) an amount, or approved security, that the court
may fix from time to time as necessary to carry out this
chapter; or
‘‘(2) transfer to a trustee appointed by the court, for the
benefit of claimants—
‘‘(A) the owner’s interest in the vessel and pending
freight; and
‘‘(B) an amount, or approved security, that the court
may fix from time to time as necessary to carry out this
chapter.
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‘‘(c) CESSATION OF OTHER ACTIONS.—When an action has been
brought under this section and the owner has complied with sub-
section (b), all claims and proceedings against the owner related
to the matter in question shall cease.
‘‘§ 30512. Liability as master, officer, or seaman not affected
‘‘This chapter does not affect the liability of an individual
as a master, officer, or seaman, even though the individual is
also an owner of the vessel.
‘‘CHAPTER 307—LIABILITY OF WATER CARRIERS
‘‘Sec.
‘‘30701.
Definition.
‘‘30702.
Application.
‘‘30703.
Bills of lading.
‘‘30704.
Loading, stowage, custody, care, and delivery.
‘‘30705.
Seaworthiness.
‘‘30706.
Defenses.
‘‘30707.
Criminal penalty.
‘‘§ 30701. Definition
‘‘In this chapter, the term ‘carrier’ means the owner, manager,
charterer, agent, or master of a vessel.
‘‘§ 30702. Application
‘‘(a) IN GENERAL.—Except as otherwise provided, this chapter
applies to a carrier engaged in the carriage of goods to or from
any port in the United States.
‘‘(b) LIVE ANIMALS.—Sections 30703 and 30704 of this title
do not apply to the carriage of live animals.
‘‘§ 30703. Bills of lading
‘‘(a) ISSUANCE.—On demand of a shipper, the carrier shall issue
a bill of lading or shipping document.
‘‘(b) CONTENTS.—The bill of lading or shipping document shall
include a statement of—
‘‘(1) the marks necessary to identify the goods;
‘‘(2) the number of packages, or the quantity or weight,
and whether it is carrier’s or shipper’s weight; and
‘‘(3) the apparent condition of the goods.
‘‘(c) PRIMA FACIE EVIDENCE OF RECEIPT.—A bill of lading or
shipping document issued under this section is prima facie evidence
of receipt of the goods described.
‘‘§ 30704. Loading, stowage, custody, care, and delivery
‘‘A carrier may not insert in a bill of lading or shipping docu-
ment a provision avoiding its liability for loss or damage arising
from negligence or fault in loading, stowage, custody, care, or proper
delivery. Any such provision is void.
‘‘§ 30705. Seaworthiness
‘‘(a) PROHIBITION.—A carrier may not insert in a bill of lading
or shipping document a provision lessening or avoiding its obligation
to exercise due diligence to—
‘‘(1) make the vessel seaworthy; and
‘‘(2) properly man, equip, and supply the vessel.
‘‘(b) VOIDNESS.—A provision described in subsection (a) is void.
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‘‘§ 30706. Defenses
‘‘(a) DUE DILIGENCE.—If a carrier has exercised due diligence
to make the vessel in all respects seaworthy and to properly man,
equip, and supply the vessel, the carrier and the vessel are not
liable for loss or damage arising from an error in the navigation
or management of the vessel.
‘‘(b) OTHER DEFENSES.—A carrier and the vessel are not liable
for loss or damage arising from—
‘‘(1) dangers of the sea or other navigable waters;
‘‘(2) acts of God;
‘‘(3) public enemies;
‘‘(4) seizure under legal process;
‘‘(5) inherent defect, quality, or vice of the goods;
‘‘(6) insufficiency of package;
‘‘(7) act or omission of the shipper or owner of the goods
or their agent; or
‘‘(8) saving or attempting to save life or property at sea,
including a deviation in rendering such a service.
‘‘§ 30707. Criminal penalty
‘‘(a) IN GENERAL.—A carrier that violates this chapter shall
be fined under title 18.
‘‘(b) LIEN.—The amount of the fine and costs for the violation
constitute a lien on the vessel engaged in the carriage. A civil
action in rem to enforce the lien may be brought in the district
court of the United States for any district in which the vessel
is found.
‘‘(c) DISPOSITION OF FINE.—Half of the fine shall go to the
person injured by the violation and half to the United States
Government.
‘‘CHAPTER 309—SUITS IN ADMIRALTY AGAINST THE
UNITED STATES
‘‘Sec.
‘‘30901.
Short title.
‘‘30902.
Definition.
‘‘30903.
Waiver of immunity.
‘‘30904.
Exclusive remedy.
‘‘30905.
Period for bringing action.
‘‘30906.
Venue.
‘‘30907.
Procedure for hearing and determination.
‘‘30908.
Exemption from arrest or seizure.
‘‘30909.
Security.
‘‘30910.
Exoneration and limitation.
‘‘30911.
Costs and interest.
‘‘30912.
Arbitration, compromise, or settlement.
‘‘30913.
Payment of judgment or settlement.
‘‘30914.
Release of privately owned vessel after arrest or attachment.
‘‘30915.
Seizures and other proceedings in foreign jurisdictions.
‘‘30916.
Recovery by the United States for salvage services.
‘‘30917.
Disposition of amounts recovered by the United States.
‘‘30918.
Reports.
‘‘§ 30901. Short title
‘‘This chapter may be cited as the ‘Suits in Admiralty Act’.
‘‘§ 30902. Definition
‘‘In this chapter, the term ‘federally-owned corporation’ means
a corporation in which the United States owns all the outstanding
capital stock.
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‘‘§ 30903. Waiver of immunity
‘‘(a) IN GENERAL.—In a case in which, if a vessel were privately
owned or operated, or if cargo were privately owned or possessed,
or if a private person or property were involved, a civil action
in admiralty could be maintained, a civil action in admiralty in
personam may be brought against the United States or a federally-
owned corporation. In a civil action in admiralty brought by the
United States or a federally-owned corporation, an admiralty claim
in personam may be filed or a setoff claimed against the United
States or corporation.
‘‘(b) NON-JURY.—A claim against the United States or a feder-
ally-owned corporation under this section shall be tried without
a jury.
‘‘§ 30904. Exclusive remedy
‘‘If a remedy is provided by this chapter, it shall be exclusive
of any other action arising out of the same subject matter against
the officer, employee, or agent of the United States or the federally-
owned corporation whose act or omission gave rise to the claim.
‘‘§ 30905. Period for bringing action
‘‘A civil action under this chapter must be brought within
2 years after the cause of action arose.
‘‘§ 30906. Venue
‘‘(a) IN GENERAL.—A civil action under this chapter shall be
brought in the district court of the United States for the district
in which—
‘‘(1) any plaintiff resides or has its principal place of busi-
ness; or
‘‘(2) the vessel or cargo is found.
‘‘(b) TRANSFER.—On a motion by a party, the court may transfer
the action to any other district court of the United States.
‘‘§ 30907. Procedure for hearing and determination
‘‘(a) IN GENERAL.—A civil action under this chapter shall pro-
ceed and be heard and determined according to the principles
of law and the rules of practice applicable in like cases between
private parties.
‘‘(b) IN REM.—
‘‘(1) REQUIREMENTS.—The action may proceed according
to the principles of an action in rem if—
‘‘(A) the plaintiff elects in the complaint; and
‘‘(B) it appears that an action in rem could have been
maintained had the vessel or cargo been privately owned
and possessed.
‘‘(2) EFFECT ON RELIEF IN PERSONAM.—An election under
paragraph (1) does not prevent the plaintiff from seeking relief
in personam in the same action.
‘‘§ 30908. Exemption from arrest or seizure
‘‘The following are not subject to arrest or seizure by judicial
process in the United States:
‘‘(1) A vessel owned by, possessed by, or operated by or
for the United States or a federally-owned corporation.
‘‘(2) Cargo owned or possessed by the United States or
a federally-owned corporation.
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‘‘§ 30909. Security
‘‘Neither the United States nor a federally-owned corporation
may be required to give a bond or admiralty stipulation in a
civil action under this chapter.
‘‘§ 30910. Exoneration and limitation
‘‘The United States is entitled to the exemptions from and
limitations of liability provided by law to an owner, charterer,
operator, or agent of a vessel.
‘‘§ 30911. Costs and interest
‘‘(a) IN GENERAL.—A judgment against the United States or
a federally-owned corporation under this chapter may include costs
and interest at the rate of 4 percent per year until satisfied. Interest
shall run as ordered by the court, except that interest is not allow-
able for the period before the action is filed.
‘‘(b) CONTRACT PROVIDING
FOR INTEREST.—Notwithstanding
subsection (a), if the claim is based on a contract providing for
interest, interest may be awarded at the rate and for the period
provided in the contract.
‘‘§ 30912. Arbitration, compromise, or settlement
‘‘The Secretary of a department of the United States Govern-
ment, or the board of trustees of a federally-owned corporation,
may arbitrate, compromise, or settle a claim under this chapter.
‘‘§ 30913. Payment of judgment or settlement
‘‘(a) IN GENERAL.—The proper accounting officer of the United
States shall pay a final judgment, arbitration award, or settlement
under this chapter on presentation of an authenticated copy.
‘‘(b) SOURCE OF PAYMENT.—Payment shall be made from an
appropriation or fund available specifically for the purpose. If no
appropriation or fund is specifically available, there is hereby appro-
priated, out of money in the Treasury not otherwise appropriated,
an amount sufficient to pay the judgment, award, or settlement.
‘‘§ 30914. Release of privately owned vessel after arrest or
attachment
‘‘If a privately owned vessel not in the possession of the United
States or a federally-owned corporation is arrested or attached
in a civil action arising or alleged to have arisen from prior owner-
ship, possession, or operation by the United States or corporation,
the vessel shall be released without bond or stipulation on a state-
ment by the United States, through the Attorney General or other
authorized law officer, that the United States is interested in the
action, desires release of the vessel, and assumes liability for the
satisfaction of any judgment obtained by the plaintiff. After the
vessel is released, the action shall proceed against the United
States in accordance with this chapter.
‘‘§ 30915. Seizures and other proceedings in foreign jurisdic-
tions
‘‘(a) IN GENERAL.—If a vessel or cargo described in section
30908 or 30914 of this title is arrested, attached, or otherwise
seized by judicial process in a foreign country, or if an action
is brought in a court of a foreign country against the master
of such a vessel for a claim arising from the ownership, possession,
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or operation of the vessel, or the ownership, possession, or carriage
of such cargo, the Secretary of State, on request of the Attorney
General or another officer authorized by the Attorney General,
may direct the United States consul residing at or nearest the
place at which the action was brought—
‘‘(1) to claim the vessel or cargo as immune from arrest,
attachment, or other seizure, and to execute an agreement,
stipulation, bond, or undertaking, for the United States or
federally-owned corporation, for the release of the vessel or
cargo and the prosecution of any appeal; or
‘‘(2) if an action has been brought against the master
of such a vessel, to enter the appearance of the United States
or corporation and to pledge the credit of the United States
or corporation to the payment of any judgment and costs in
the action.
‘‘(b) ARRANGING BOND OR STIPULATION.—The Attorney General
may—
‘‘(1) arrange with a bank, surety company, or other person,
whether in the United States or a foreign country, to execute
a bond or stipulation; and
‘‘(2) pledge the credit of the United States to secure the
bond or stipulation.
‘‘(c) PAYMENT
OF
JUDGMENT.—The appropriate accounting
officer of the United States or corporation may pay a judgment
in an action described in subsection (a) on presentation of a copy
of the judgment if certified by the clerk of the court and authenti-
cated by—
‘‘(1) the certificate and seal of the United States consul
claiming the vessel or cargo, or by the consul’s successor; and
‘‘(2) the certificate of the Secretary as to the official capacity
of the consul.
‘‘(d) RIGHT TO CLAIM IMMUNITY NOT AFFECTED.—This section
does not affect the right of the United States to claim immunity
of a vessel or cargo from foreign jurisdiction.
‘‘§ 30916. Recovery by the United States for salvage services
‘‘(a) CIVIL ACTION.—The United States, and the crew of a mer-
chant vessel owned or operated by the United States, or a federally-
owned corporation, may bring a civil action to recover for salvage
services provided by the vessel and crew.
‘‘(b) DEPOSIT OF AMOUNTS RECOVERED.—Any amount recovered
under this section by the United States for its own benefit, and
not for the benefit of the crew, shall be deposited in the Treasury
to the credit of the department of the United States Government,
or the corporation, having control of the possession or operation
of the vessel.
‘‘§ 30917. Disposition of amounts recovered by the United
States
‘‘Amounts recovered in a civil action brought by the United
States on a claim arising from the ownership, possession, or oper-
ation of a merchant vessel, or the ownership, possession, or carriage
of cargo, shall be deposited in the Treasury to the credit of the
department of the United States Government, or the federally-
owned corporation, having control of the vessel or cargo, for
reimbursement of the appropriation, insurance fund, or other fund
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from which the compensation for which the judgment was recovered
was or will be paid.
‘‘§ 30918. Reports
‘‘The Secretary of each department of the United States Govern-
ment, and the board of trustees of each federally-owned corporation,
shall report to Congress at each session thereof all arbitration
awards and settlements agreed to under this chapter since the
previous session, for which the time to appeal has expired or been
waived.
‘‘CHAPTER 311—SUITS INVOLVING PUBLIC VESSELS
‘‘Sec.
‘‘31101.
Short title.
‘‘31102.
Waiver of immunity.
‘‘31103.
Applicable procedure.
‘‘31104.
Venue.
‘‘31105.
Security when counterclaim filed.
‘‘31106.
Exoneration and limitation.
‘‘31107.
Interest.
‘‘31108.
Arbitration, compromise, or settlement.
‘‘31109.
Payment of judgment or settlement.
‘‘31110.
Subpoenas to officers or members of crew.
‘‘31111.
Claims by nationals of foreign countries.
‘‘31112.
Lien not recognized or created.
‘‘31113.
Reports.
‘‘§ 31101. Short title
‘‘This chapter may be cited as the ‘Public Vessels Act’.
‘‘§ 31102. Waiver of immunity
‘‘(a) IN GENERAL.—A civil action in personam in admiralty
may be brought, or an impleader filed, against the United States
for—
‘‘(1) damages caused by a public vessel of the United States;
or
‘‘(2) compensation for towage and salvage services,
including contract salvage, rendered to a public vessel of the
United States.
‘‘(b) COUNTERCLAIM OR SETOFF.—If the United States brings
a civil action in admiralty for damages caused by a privately owned
vessel, the owner of the vessel, or the successor in interest, may
file a counterclaim in personam, or claim a setoff, against the
United States for damages arising out of the same subject matter.
‘‘§ 31103. Applicable procedure
‘‘A civil action under this chapter is subject to the provisions
of chapter 309 of this title except to the extent inconsistent with
this chapter.
‘‘§ 31104. Venue
‘‘(a) IN GENERAL.—A civil action under this chapter shall be
brought in the district court of the United States for the district
in which the vessel or cargo is found within the United States.
‘‘(b) VESSEL OR CARGO OUTSIDE TERRITORIAL WATERS.—If the
vessel or cargo is outside the territorial waters of the United
States—
‘‘(1) the action shall be brought in the district court of
the United States for any district in which any plaintiff resides
or has an office for the transaction of business; or
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‘‘(2) if no plaintiff resides or has an office for the transaction
of business in the United States, the action may be brought
in the district court of the United States for any district.
‘‘§ 31105. Security when counterclaim filed
‘‘If a counterclaim is filed for a cause of action for which
the original action is filed under this chapter, the respondent to
the counterclaim shall give security in the usual amount and form
to respond to the counterclaim, unless the court for cause shown
orders otherwise. The proceedings in the original action shall be
stayed until the security is given.
‘‘§ 31106. Exoneration and limitation
‘‘The United States is entitled to the exemptions from and
limitations of liability provided by law to an owner, charterer,
operator, or agent of a vessel.
‘‘§ 31107. Interest
‘‘A judgment in a civil action under this chapter may not
include interest for the period before the judgment is issued unless
the claim is based on a contract providing for interest.
‘‘§ 31108. Arbitration, compromise, or settlement
‘‘The Attorney General may arbitrate, compromise, or settle
a claim under this chapter if a civil action based on the claim
has been commenced.
‘‘§ 31109. Payment of judgment or settlement
‘‘The proper accounting officer of the United States shall pay
a final judgment, arbitration award, or settlement under this
chapter on presentation of an authenticated copy. Payment shall
be made from any money in the Treasury appropriated for the
purpose.
‘‘§ 31110. Subpoenas to officers or members of crew
‘‘An officer or member of the crew of a public vessel may
not be subpoenaed in a civil action under this chapter without
the consent of—
‘‘(1) the Secretary of the department or the head of the
independent establishment having control of the vessel at the
time the cause of action arose; or
‘‘(2) the master or commanding officer of the vessel at
the time the subpoena is issued.
‘‘§ 31111. Claims by nationals of foreign countries
‘‘A national of a foreign country may not maintain a civil
action under this chapter unless it appears to the satisfaction
of the court in which the action is brought that the government
of that country, in similar circumstances, allows nationals of the
United States to sue in its courts.
‘‘§ 31112. Lien not recognized or created
‘‘This chapter shall not be construed as recognizing the exist-
ence of or as creating a lien against a public vessel of the United
States.
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‘‘§ 31113. Reports
‘‘The Attorney General shall report to Congress at each session
thereof all claims settled under this chapter.’’.
SEC. 7. SUBTITLE IV OF TITLE 46.
Title 46, United States Code, is amended by inserting after
subtitle III the following:
‘‘Subtitle IV—Regulation of Ocean Shipping
‘‘PART A—OCEAN SHIPPING
‘‘Chapter
Sec.
‘‘401. General .....................................................................................................
40101
‘‘403. Agreements ..............................................................................................
40301
‘‘405. Tariffs, Service Contracts, Refunds, and Waivers ..........................
40501
‘‘407. Controlled Carriers ...............................................................................
40701
‘‘409. Ocean Transportation Intermediaries ..............................................
40901
‘‘411. Prohibitions and Penalties ..................................................................
41101
‘‘413. Enforcement ............................................................................................
41301
‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES
‘‘421. Regulations Affecting Shipping in Foreign Trade .........................
42101
‘‘423. Foreign Shipping Practices .................................................................
42301
‘‘PART C—MISCELLANEOUS
‘‘441. Evidence of Financial Responsibility for Passenger Transpor-
tation.
44101
‘‘PART A—OCEAN SHIPPING
‘‘CHAPTER 401—GENERAL
‘‘Sec.
‘‘40101.
Purposes.
‘‘40102.
Definitions.
‘‘40103.
Administrative exemptions.
‘‘40104.
Reports filed with the Commission.
‘‘§ 40101. Purposes
‘‘The purposes of this part are to—
‘‘(1) establish a nondiscriminatory regulatory process for
the common carriage of goods by water in the foreign commerce
of the United States with a minimum of government interven-
tion and regulatory costs;
‘‘(2) provide an efficient and economic transportation
system in the ocean commerce of the United States that is,
insofar as possible, in harmony with, and responsive to, inter-
national shipping practices;
‘‘(3) encourage the development of an economically sound
and efficient liner fleet of vessels of the United States capable
of meeting national security needs; and
‘‘(4) promote the growth and development of United States
exports through competitive and efficient ocean transportation
and by placing a greater reliance on the marketplace.
‘‘§ 40102. Definitions
‘‘In this part:
‘‘(1) AGREEMENT.—The term ‘agreement’—
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‘‘(A) means a written or oral understanding, arrange-
ment, or association, and any modification or cancellation
thereof; but
‘‘(B) does not include a maritime labor agreement.
‘‘(2) ANTITRUST LAWS.—The term ‘antitrust laws’ means—
‘‘(A) the Sherman Act (15 U.S.C. 1 et seq.);
‘‘(B) sections 73 and 74 of the Wilson Tariff Act (15
U.S.C. 8, 9);
‘‘(C) the Clayton Act (15 U.S.C. 12 et seq.);
‘‘(D) the Act of June 19, 1936 (15 U.S.C. 13, 13a,
13b, 21a);
‘‘(E) the Federal Trade Commission Act (15 U.S.C.
41 et seq.);
‘‘(F) the Antitrust Civil Process Act (15 U.S.C. 1311
et seq.); and
‘‘(G) Acts supplementary to those Acts.
‘‘(3) ASSESSMENT
AGREEMENT.—The term ‘assessment
agreement’ means an agreement, whether part of a collective
bargaining agreement or negotiated separately, to the extent
the agreement provides for the funding of collectively bargained
fringe-benefit obligations on other than a uniform worker-hour
basis, regardless of the cargo handled or type of vessel or
equipment used.
‘‘(4) BULK CARGO.—The term ‘bulk cargo’ means cargo that
is loaded and carried in bulk without mark or count.
‘‘(5) CHEMICAL PARCEL-TANKER.—The term ‘chemical parcel-
tanker’ means a vessel that has—
‘‘(A) a cargo-carrying capability consisting of individual
cargo tanks for bulk chemicals that—
‘‘(i) are a permanent part of the vessel; and
‘‘(ii) have segregation capability with piping sys-
tems to permit simultaneous carriage of several bulk
chemical cargoes with minimum risk of cross-contami-
nation; and
‘‘(B) a valid certificate of fitness under the Inter-
national Maritime Organization Code for the Construction
and Equipment of Ships Carrying Dangerous Chemicals
in Bulk.
‘‘(6) COMMON CARRIER.—The term ‘common carrier’—
‘‘(A) means a person that—
‘‘(i) holds itself out to the general public to provide
transportation by water of passengers or cargo between
the United States and a foreign country for compensa-
tion;
‘‘(ii) assumes responsibility for the transportation
from the port or point of receipt to the port or point
of destination; and
‘‘(iii) uses, for all or part of that transportation,
a vessel operating on the high seas or the Great Lakes
between a port in the United States and a port in
a foreign country; but
‘‘(B) does not include a carrier engaged in ocean
transportation by ferry boat, ocean tramp, or chemical
parcel-tanker, or by vessel when primarily engaged in the
carriage of perishable agricultural commodities—
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‘‘(i) if the carrier and the owner of those commod-
ities are wholly-owned, directly or indirectly, by a per-
son primarily engaged in the marketing and distribu-
tion of those commodities; and
‘‘(ii) only with respect to the carriage of those
commodities.
‘‘(7) CONFERENCE.—The term ‘conference’—
‘‘(A) means an association of ocean common carriers
permitted, pursuant to an approved or effective agreement,
to engage in concerted activity and to use a common tariff;
but
‘‘(B) does not include a joint service, consortium,
pooling, sailing, or transshipment agreement.
‘‘(8) CONTROLLED CARRIER.—The term ‘controlled carrier’
means an ocean common carrier that is, or whose operating
assets are, directly or indirectly, owned or controlled by a
government, with ownership or control by a government being
deemed to exist for a carrier if—
‘‘(A) a majority of the interest in the carrier is owned
or controlled in any manner by that government, an agency
of that government, or a public or private person controlled
by that government; or
‘‘(B) that government has the right to appoint or dis-
approve the appointment of a majority of the directors,
the chief operating officer, or the chief executive officer
of the carrier.
‘‘(9) DEFERRED REBATE.—The term ‘deferred rebate’ means
a return by a common carrier of any freight money to a shipper,
where the return is—
‘‘(A) consideration for the shipper giving all or any
portion of its shipments to that or any other common
carrier over a fixed period of time;
‘‘(B) deferred beyond the completion of the service for
which it was paid; and
‘‘(C) made only if the shipper has agreed to make
a further shipment with that or any other common carrier.
‘‘(10) FOREST
PRODUCTS.—The term ‘forest products’
includes lumber in bundles, rough timber, ties, poles, piling,
laminated beams, bundled siding, bundled plywood, bundled
core stock or veneers, bundled particle or fiber boards, bundled
hardwood, wood pulp in rolls, wood pulp in unitized bales,
and paper and paper board in rolls or in pallet or skid-sized
sheets.
‘‘(11) INLAND DIVISION.—The term ‘inland division’ means
the amount paid by a common carrier to an inland carrier
for the inland portion of through transportation offered to the
public by the common carrier.
‘‘(12) INLAND PORTION.—The term ‘inland portion’ means
the charge to the public by a common carrier for the non-
ocean portion of through transportation.
‘‘(13) LOYALTY
CONTRACT.—The term ‘loyalty contract’
means a contract with an ocean common carrier or agreement
providing for—
‘‘(A) a shipper to obtain lower rates by committing
all or a fixed portion of its cargo to that carrier or agree-
ment; and
‘‘(B) a deferred rebate arrangement.
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‘‘(14) MARINE TERMINAL OPERATOR.—The term ‘marine ter-
minal operator’ means a person engaged in the United States
in the business of providing wharfage, dock, warehouse, or
other terminal facilities in connection with a common carrier,
or in connection with a common carrier and a water carrier
subject to subchapter II of chapter 135 of title 49.
‘‘(15) MARITIME LABOR AGREEMENT.—The term ‘maritime
labor agreement’—
‘‘(A) means—
‘‘(i) a collective bargaining agreement between an
employer subject to this part, or a group of such
employers, and a labor organization representing
employees in the maritime or stevedoring industry;
‘‘(ii) an agreement preparatory to such a collective
bargaining agreement among members of a multi-
employer bargaining group; or
‘‘(iii) an agreement specifically implementing provi-
sions of such a collective bargaining agreement or pro-
viding for the formation, financing, or administration
of a multi-employer bargaining group; but
‘‘(B) does not include an assessment agreement.
‘‘(16) NON-VESSEL-OPERATING COMMON CARRIER.—The term
‘non-vessel-operating common carrier’ means a common carrier
that—
‘‘(A) does not operate the vessels by which the ocean
transportation is provided; and
‘‘(B) is a shipper in its relationship with an ocean
common carrier.
‘‘(17) OCEAN COMMON CARRIER.—The term ‘ocean common
carrier’ means a vessel-operating common carrier.
‘‘(18) OCEAN FREIGHT FORWARDER.—The term ‘ocean freight
forwarder’ means a person that—
‘‘(A) in the United States, dispatches shipments from
the United States via a common carrier and books or
otherwise arranges space for those shipments on behalf
of shippers; and
‘‘(B) processes the documentation or performs related
activities incident to those shipments.
‘‘(19) OCEAN
TRANSPORTATION
INTERMEDIARY.—The term
‘ocean transportation intermediary’ means an ocean freight for-
warder or a non-vessel-operating common carrier.
‘‘(20) SERVICE
CONTRACT.—The term ‘service contract’
means a written contract, other than a bill of lading or receipt,
between one or more shippers, on the one hand, and an indi-
vidual ocean common carrier or an agreement between or
among ocean common carriers, on the other, in which—
‘‘(A) the shipper or shippers commit to providing a
certain volume or portion of cargo over a fixed time period;
and
‘‘(B) the ocean common carrier or the agreement com-
mits to a certain rate or rate schedule and a defined service
level, such as assured space, transit time, port rotation,
or similar service features.
‘‘(21) SHIPMENT.—The term ‘shipment’ means all of the
cargo carried under the terms of a single bill of lading.
‘‘(22) SHIPPER.—The term ‘shipper’ means—
‘‘(A) a cargo owner;
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‘‘(B) the person for whose account the ocean transpor-
tation of cargo is provided;
‘‘(C) the person to whom delivery is to be made;
‘‘(D) a shippers’ association; or
‘‘(E) a non-vessel-operating common carrier that
accepts responsibility for payment of all charges applicable
under the tariff or service contract.
‘‘(23) SHIPPERS’ ASSOCIATION.—The term ‘shippers’ associa-
tion’ means a group of shippers that consolidates or distributes
freight on a nonprofit basis for the members of the group
to obtain carload, truckload, or other volume rates or service
contracts.
‘‘(24) THROUGH RATE.—The term ‘through rate’ means the
single amount charged by a common carrier in connection with
through transportation.
‘‘(25) THROUGH
TRANSPORTATION.—The term ‘through
transportation’ means continuous transportation between origin
and destination for which a through rate is assessed and which
is offered or performed by one or more carriers, at least one
of which is a common carrier, between a United States port
or point and a foreign port or point.
‘‘§ 40103. Administrative exemptions
‘‘(a) IN
GENERAL.—The Federal Maritime Commission, on
application or its own motion, may by order or regulation exempt
for the future any class of agreements between persons subject
to this part or any specified activity of those persons from any
requirement of this part if the Commission finds that the exemption
will not result in substantial reduction in competition or be detri-
mental to commerce. The Commission may attach conditions to
an exemption and may, by order, revoke an exemption.
‘‘(b) OPPORTUNITY FOR HEARING.—An order or regulation of
exemption or revocation of an exemption may be issued only if
the Commission has provided an opportunity for a hearing to
interested persons and departments and agencies of the United
States Government.
‘‘§ 40104. Reports filed with the Commission
‘‘(a) IN GENERAL.—The Federal Maritime Commission may
require a common carrier or an officer, receiver, trustee, lessee,
agent, or employee of the carrier to file with the Commission
a periodical or special report, an account, record, rate, or charge,
or a memorandum of facts and transactions related to the business
of the carrier. The report, account, record, rate, charge, or memo-
randum shall be made under oath if the Commission requires,
and shall be filed in the form and within the time prescribed
by the Commission.
‘‘(b) CONFERENCE MINUTES.—Conference minutes required to
be filed with the Commission under this section may not be released
to third parties or published by the Commission.
‘‘CHAPTER 403—AGREEMENTS
‘‘Sec.
‘‘40301.
Application.
‘‘40302.
Filing requirements.
‘‘40303.
Content requirements.
‘‘40304.
Commission action.
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‘‘40305.
Assessment agreements.
‘‘40306.
Nondisclosure of information.
‘‘40307.
Exemption from antitrust laws.
‘‘§ 40301. Application
‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—This part applies
to an agreement between or among ocean common carriers to—
‘‘(1) discuss, fix, or regulate transportation rates, including
through rates, cargo space accommodations, and other condi-
tions of service;
‘‘(2) pool or apportion traffic, revenues, earnings, or losses;
‘‘(3) allot ports or regulate the number and character of
voyages between ports;
‘‘(4) regulate the volume or character of cargo or passenger
traffic to be carried;
‘‘(5) engage in an exclusive, preferential, or cooperative
working arrangement between themselves or with a marine
terminal operator;
‘‘(6) control, regulate, or prevent competition in inter-
national ocean transportation; or
‘‘(7) discuss and agree on any matter related to a service
contract.
‘‘(b) MARINE TERMINAL OPERATOR AGREEMENTS.—This part
applies to an agreement between or among marine terminal opera-
tors, or between or among one or more marine terminal operators
and one or more ocean common carriers, to—
‘‘(1) discuss, fix, or regulate rates or other conditions of
service; or
‘‘(2) engage in exclusive, preferential, or cooperative
working arrangements, to the extent the agreement involves
ocean transportation in the foreign commerce of the United
States.
‘‘(c) ACQUISITIONS.—This part does not apply to an acquisition
by any person, directly or indirectly, of any voting security or
assets of any other person.
‘‘(d) MARITIME LABOR AGREEMENTS.—This part does not apply
to a maritime labor agreement. However, this subsection does not
exempt from this part any rate, charge, regulation, or practice
of a common carrier that is required to be set forth in a tariff
or is an essential term of a service contract, whether or not the
rate, charge, regulation, or practice arises out of, or is otherwise
related to, a maritime labor agreement.
‘‘(e) ASSESSMENT
AGREEMENTS.—This part (except sections
40305 and 40307(a)) does not apply to an assessment agreement.
‘‘§ 40302. Filing requirements
‘‘(a) IN GENERAL.—A true copy of every agreement referred
to in section 40301(a) or (b) of this title shall be filed with the
Federal Maritime Commission. If the agreement is oral, a complete
memorandum specifying in detail the substance of the agreement
shall be filed.
‘‘(b) EXCEPTIONS.—Subsection (a) does not apply to—
‘‘(1) an agreement related to transportation to be performed
within or between foreign countries; or
‘‘(2) an agreement among common carriers to establish,
operate, or maintain a marine terminal in the United States.
‘‘(c) REGULATIONS.—The Commission may by regulation pre-
scribe the form and manner in which an agreement shall be filed
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and any additional information and documents necessary to
evaluate the agreement.
‘‘§ 40303. Content requirements
‘‘(a) OCEAN COMMON CARRIER AGREEMENTS.—
‘‘(1) RESTRICTIONS.—An ocean common carrier agreement
may not—
‘‘(A) prohibit or restrict a member of the agreement
from engaging in negotiations for a service contract with
a shipper;
‘‘(B) require a member of the agreement to disclose
a negotiation on a service contract, or the terms of a
service contract, other than those terms required to be
published under section 40502(d) of this title; or
‘‘(C) adopt mandatory rules or requirements affecting
the right of an agreement member to negotiate and enter
into a service contract.
‘‘(2) VOLUNTARY
GUIDELINES.—An ocean common carrier
agreement may provide authority to adopt voluntary guidelines
relating to the terms and procedures of an agreement member’s
service contracts if the guidelines explicitly state the right
of members of the agreement not to follow the guidelines.
Any guidelines adopted shall be submitted confidentially to
the Federal Maritime Commission.
‘‘(b) CONFERENCE AGREEMENTS.—Each conference agreement
must—
‘‘(1) state its purpose;
‘‘(2) provide reasonable and equal terms for admission and
readmission to conference membership for any ocean common
carrier willing to serve the particular trade or route;
‘‘(3) permit any member to withdraw from conference mem-
bership on reasonable notice without penalty;
‘‘(4) at the request of any member, require an independent
neutral body to police fully the obligations of the conference
and its members;
‘‘(5) prohibit the conference from engaging in conduct
prohibited by section 41105(1) or (3) of this title;
‘‘(6) provide for a consultation process designed to pro-
mote—
‘‘(A) commercial resolution of disputes; and
‘‘(B) cooperation with shippers in preventing and elimi-
nating malpractices;
‘‘(7) establish procedures for promptly and fairly consid-
ering requests and complaints of shippers; and
‘‘(8) provide that—
‘‘(A) any member of the conference may take inde-
pendent action on a rate or service item on not more
than 5 days’ notice to the conference; and
‘‘(B) except for an exempt commodity not published
in the conference tariff, the conference will include the
new rate or service item in its tariff for use by that member,
effective no later than 5 days after receipt of the notice,
and by any other member that notifies the conference that
it elects to adopt the independent rate or service item
on or after its effective date, in lieu of the existing con-
ference tariff provision for that rate or service item.
Deadline.
Confidential
information.
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‘‘(c) INTERCONFERENCE AGREEMENTS.—Each agreement between
carriers not members of the same conference must provide the
right of independent action for each carrier. Each agreement
between conferences must provide the right of independent action
for each conference.
‘‘(d) VESSEL SHARING AGREEMENTS.—
‘‘(1) IN GENERAL.—An ocean common carrier that is the
owner, operator, or bareboat, time, or slot charterer of a liner
vessel documented under section 12103 or 12111(c) of this
title may agree with an ocean common carrier described in
paragraph (2) to which it charters or subcharters the vessel
or space on the vessel that the charterer or subcharterer may
not use or make available space on the vessel for the carriage
of cargo reserved by law for vessels of the United States.
‘‘(2) CARRIER
DESCRIBED.—An ocean common carrier
described in this paragraph is one that is not the owner, oper-
ator, or bareboat charterer for at least one year of liner vessels
of the United States that are eligible to be included in the
Maritime Security Fleet Program and are enrolled in an Emer-
gency Preparedness Program under chapter 531 of this title.
‘‘§ 40304. Commission action
‘‘(a) NOTICE OF FILING.—Within 7 days after an agreement
is filed, the Federal Maritime Commission shall transmit a notice
of the filing to the Federal Register for publication.
‘‘(b) PRELIMINARY REVIEW AND REJECTION.—After preliminary
review, the Commission shall reject an agreement that it finds
does not meet the requirements of sections 40302 and 40303 of
this title. The Commission shall notify in writing the person filing
the agreement of the reason for rejection.
‘‘(c) REVIEW AND EFFECTIVE DATE.—Unless rejected under sub-
section (b), an agreement (other than an assessment agreement)
is effective—
‘‘(1) on the 45th day after filing, or on the 30th day after
notice of the filing is published in the Federal Register, which-
ever is later; or
‘‘(2) if additional information or documents are requested
under subsection (d)—
‘‘(A) on the 45th day after the Commission receives
all the additional information and documents; or
‘‘(B) if the request is not fully complied with, on the
45th day after the Commission receives the information
and documents submitted and a statement of the reasons
for noncompliance with the request.
‘‘(d) REQUEST
FOR
ADDITIONAL
INFORMATION.—Before the
expiration of the period specified in subsection (c)(1), the Commis-
sion may request from the person filing the agreement any addi-
tional information and documents the Commission considers nec-
essary to make the determinations required by this section.
‘‘(e) MODIFICATION OF REVIEW PERIOD.—
‘‘(1) SHORTENING.—On request of the party filing an agree-
ment, the Commission may shorten a period specified in sub-
section (c), but not to a date that is less than 14 days after
notice of the filing of the agreement is published in the Federal
Register.
‘‘(2) EXTENSION.—The period specified in subsection (c)(2)
may be extended only by the United States District Court
Notification.
Federal Register,
publication.
Deadline.
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for the District of Columbia in a civil action brought by the
Commission under section 41307(c) of this title.
‘‘(f) FIXED TERMS.—The Commission may not limit the effective-
ness of an agreement to a fixed term.
‘‘§ 40305. Assessment agreements
‘‘(a) FILING REQUIREMENT.—An assessment agreement shall be
filed with the Federal Maritime Commission and is effective on
filing.
‘‘(b) COMPLAINTS.—If a complaint is filed with the Commission
within 2 years after the date of an assessment agreement, the
Commission shall disapprove, cancel, or modify the agreement,
or an assessment or charge pursuant to the agreement, that the
Commission finds, after notice and opportunity for a hearing, to
be unjustly discriminatory or unfair as between carriers, shippers,
or ports. The Commission shall issue its final decision in the pro-
ceeding within one year after the date the complaint is filed.
‘‘(c) ADJUSTMENTS
OF ASSESSMENTS
AND CHARGES.—To the
extent that the Commission finds under subsection (b) that an
assessment or charge is unjustly discriminatory or unfair as
between carriers, shippers, or ports, the Commission shall adjust
the assessment or charge for the period between the filing of the
complaint and the final decision by awarding prospective credits
or debits to future assessments and charges. However, if the
complainant has ceased activities subject to the assessment or
charge, the Commission may award reparations.
‘‘§ 40306. Nondisclosure of information
‘‘Information and documents (other than an agreement) filed
with the Federal Maritime Commission under this chapter are
exempt from disclosure under section 552 of title 5 and may not
be made public except as may be relevant to an administrative
or judicial proceeding. This section does not prevent disclosure
to either House of Congress or to a duly authorized committee
or subcommittee of Congress.
‘‘§ 40307. Exemption from antitrust laws
‘‘(a) IN GENERAL.—The antitrust laws do not apply to—
‘‘(1) an agreement (including an assessment agreement)
that has been filed and is effective under this chapter;
‘‘(2) an agreement that is exempt under section 40103
of this title from any requirement of this part;
‘‘(3) an agreement or activity within the scope of this part,
whether permitted under or prohibited by this part, undertaken
or entered into with a reasonable basis to conclude that it
is—
‘‘(A) pursuant to an agreement on file with the Federal
Maritime Commission and in effect when the activity takes
place; or
‘‘(B) exempt under section 40103 of this title from
any filing or publication requirement of this part;
‘‘(4) an agreement or activity relating to transportation
services within or between foreign countries, whether or not
via the United States, unless the agreement or activity has
a direct, substantial, and reasonably foreseeable effect on the
commerce of the United States;
Deadline.
Notification.
Hearing.
Effective date.
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‘‘(5) an agreement or activity relating to the foreign inland
segment of through transportation that is part of transportation
provided in a United States import or export trade;
‘‘(6) an agreement or activity to provide wharfage, dock,
warehouse, or other terminal facilities outside the United
States; or
‘‘(7) an agreement, modification, or cancellation approved
before June 18, 1984, by the Commission under section 15
of the Shipping Act, 1916, or permitted under section 14b
of that Act, and any properly published tariff, rate, fare, or
charge, or classification, rule, or regulation explanatory thereof
implementing that agreement, modification, or cancellation.
‘‘(b) EXCEPTIONS.—This part does not extend antitrust immu-
nity to—
‘‘(1) an agreement with or among air carriers, rail carriers,
motor carriers, or common carriers by water not subject to
this part relating to transportation within the United States;
‘‘(2) a discussion or agreement among common carriers
subject to this part relating to the inland divisions (as opposed
to the inland portions) of through rates within the United
States;
‘‘(3) an agreement among common carriers subject to this
part to establish, operate, or maintain a marine terminal in
the United States; or
‘‘(4) a loyalty contract.
‘‘(c) RETROACTIVE EFFECT OF DETERMINATIONS.—A determina-
tion by an agency or court that results in the denial or removal
of the immunity to the antitrust laws under subsection (a) does
not remove or alter the antitrust immunity for the period before
the determination.
‘‘(d) RELIEF UNDER CLAYTON ACT.—A person may not recover
damages under section 4 of the Clayton Act (15 U.S.C. 15), or
obtain injunctive relief under section 16 of that Act (15 U.S.C.
26), for conduct prohibited by this part.
‘‘CHAPTER 405—TARIFFS, SERVICE CONTRACTS,
REFUNDS, AND WAIVERS
‘‘Sec.
‘‘40501.
General rate and tariff requirements.
‘‘40502.
Service contracts.
‘‘40503.
Refunds and waivers.
‘‘§ 40501. General rate and tariff requirements
‘‘(a) AUTOMATED TARIFF SYSTEM.—
‘‘(1) IN
GENERAL.—Each common carrier and conference
shall keep open to public inspection in an automated tariff
system, tariffs showing all its rates, charges, classifications,
rules, and practices between all points or ports on its own
route and on any through transportation route that has been
established. However, a common carrier is not required to
state separately or otherwise reveal in tariffs the inland divi-
sions of a through rate.
‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply with
respect to bulk cargo, forest products, recycled metal scrap,
new assembled motor vehicles, waste paper, or paper waste.
‘‘(b) CONTENTS
OF TARIFFS.—A tariff under subsection (a)
shall—
Public
information.
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‘‘(1) state the places between which cargo will be carried;
‘‘(2) list each classification of cargo in use;
‘‘(3) state the level of compensation, if any, of any ocean
freight forwarder by a carrier or conference;
‘‘(4) state separately each terminal or other charge, privi-
lege, or facility under the control of the carrier or conference
and any rules that in any way change, affect, or determine
any part or the total of the rates or charges;
‘‘(5) include sample copies of any bill of lading, contract
of affreightment, or other document evidencing the transpor-
tation agreement; and
‘‘(6) include copies of any loyalty contract, omitting the
shipper’s name.
‘‘(c) ELECTRONIC ACCESS.—A tariff under subsection (a) shall
be made available electronically to any person, without time,
quantity, or other limitation, through appropriate access from
remote locations. A reasonable fee may be charged for such access,
except that no fee may be charged for access by a Federal agency.
‘‘(d) TIME-VOLUME RATES.—A rate contained in a tariff under
subsection (a) may vary with the volume of cargo offered over
a specified period of time.
‘‘(e) EFFECTIVE DATES.—
‘‘(1) INCREASES.—A new or initial rate or change in an
existing rate that results in an increased cost to a shipper
may not become effective earlier than 30 days after publication.
However, for good cause, the Federal Maritime Commission
may allow the rate to become effective sooner.
‘‘(2) DECREASES.—A change in an existing rate that results
in a decreased cost to a shipper may become effective on
publication.
‘‘(f) MARINE TERMINAL OPERATOR SCHEDULES.—A marine ter-
minal operator may make available to the public a schedule of
rates, regulations, and practices, including limitations of liability
for cargo loss or damage, pertaining to receiving, delivering, han-
dling, or storing property at its marine terminal. Any such schedule
made available to the public is enforceable by an appropriate court
as an implied contract without proof of actual knowledge of its
provisions.
‘‘(g) REGULATIONS.—
‘‘(1) IN GENERAL.—The Commission shall by regulation pre-
scribe the requirements for the accessibility and accuracy of
automated tariff systems established under this section. The
Commission, after periodic review, may prohibit the use of
any automated tariff system that fails to meet the requirements
established under this section.
‘‘(2) REMOTE TERMINALS.—The Commission may not require
a common carrier to provide a remote terminal for electronic
access under subsection (c).
‘‘(3) 
MARINE
TERMINAL
OPERATOR
SCHEDULES.—The
Commission shall by regulation prescribe the form and manner
in which marine terminal operator schedules authorized by
this section shall be published.
‘‘§ 40502. Service contracts
‘‘(a) IN GENERAL.—An individual ocean common carrier or an
agreement between or among ocean common carriers may enter
Public
information.
Contracts.
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into a service contract with one or more shippers subject to the
requirements of this part.
‘‘(b) FILING REQUIREMENTS.—
‘‘(1) IN GENERAL.—Each service contract entered into under
this section by an individual ocean common carrier or an agree-
ment shall be filed confidentially with the Federal Maritime
Commission.
‘‘(2) EXCEPTIONS.—Paragraph (1) does not apply to con-
tracts regarding bulk cargo, forest products, recycled metal
scrap, new assembled motor vehicles, waste paper, or paper
waste.
‘‘(c) ESSENTIAL TERMS.—Each service contract shall include—
‘‘(1) the origin and destination port ranges;
‘‘(2) the origin and destination geographic areas in the
case of through intermodal movements;
‘‘(3) the commodities involved;
‘‘(4) the minimum volume or portion;
‘‘(5) the line-haul rate;
‘‘(6) the duration;
‘‘(7) service commitments; and
‘‘(8) the liquidated damages for nonperformance, if any.
‘‘(d) PUBLICATION OF CERTAIN TERMS.—When a service contract
is filed confidentially with the Commission, a concise statement
of the essential terms specified in paragraphs (1), (3), (4), and
(6) of subsection (c) shall be published and made available to
the general public in tariff format.
‘‘(e) DISCLOSURE OF CERTAIN TERMS.—
‘‘(1) DEFINITIONS.—In this subsection, the terms ‘dock area’
and ‘within the port area’ have the same meaning and scope
as in the applicable collective bargaining agreement between
the requesting labor organization and the carrier.
‘‘(2) DISCLOSURE.—An ocean common carrier that is a party
to or is otherwise subject to a collective bargaining agreement
with a labor organization shall, in response to a written request
by the labor organization, state whether it is responsible for
the following work at a dock area or within a port area in
the United States with respect to cargo transportation under
a service contract:
‘‘(A) The movement of the shipper’s cargo on a dock
area or within the port area or to or from railroad cars
on a dock area or within the port area.
‘‘(B) The assignment of intraport carriage of the ship-
per’s cargo between areas on a dock or within the port
area.
‘‘(C) The assignment of the carriage of the shipper’s
cargo between a container yard on a dock area or within
the port area and a rail yard adjacent to the container
yard.
‘‘(D) The assignment of container freight station work
and container maintenance and repair work performed at
a dock area or within the port area.
‘‘(3) WITHIN REASONABLE TIME.—The common carrier shall
provide the information described in paragraph (2) to the
requesting labor organization within a reasonable period of
time.
‘‘(4) EXISTENCE OF COLLECTIVE BARGAINING AGREEMENT.—
This subsection does not require the disclosure of information
Confidential
information.
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by an ocean common carrier unless there exists an applicable
and otherwise lawful collective bargaining agreement per-
taining to that carrier. A disclosure by an ocean common carrier
may not be deemed an admission or an agreement that any
work is covered by a collective bargaining agreement. A dispute
about whether any work is covered by a collective bargaining
agreement and the responsibility of an ocean common carrier
under a collective bargaining agreement shall be resolved solely
in accordance with the dispute resolution procedures contained
in the collective bargaining agreement and the National Labor
Relations Act (29 U.S.C. 151 et seq.), and without reference
to this subsection.
‘‘(5) EFFECT UNDER OTHER LAWS.—This subsection does not
affect the lawfulness or unlawfulness under this part or any
other Federal or State law of any collective bargaining agree-
ment or element thereof, including any element that constitutes
an essential term of a service contract.
‘‘(f) REMEDY FOR BREACH.—Unless the parties agree otherwise,
the exclusive remedy for a breach of a service contract is an action
in an appropriate court. The contract dispute resolution forum
may not be controlled by or in any way affiliated with a controlled
carrier or by the government that owns or controls the carrier.
‘‘§ 40503. Refunds and waivers
‘‘The Federal Maritime Commission, on application of a carrier
or shipper, may permit a common carrier or conference to refund
a portion of the freight charges collected from a shipper, or to
waive collection of a portion of the charges from a shipper, if—
‘‘(1) there is an error in a tariff, a failure to publish a
new tariff, or an error in quoting a tariff, and the refund
or waiver will not result in discrimination among shippers,
ports, or carriers;
‘‘(2) the common carrier or conference, before filing an
application for authority to refund or waive any charges for
an error in a tariff or a failure to publish a tariff, has published
a new tariff setting forth the rate on which the refund or
waiver would be based; and
‘‘(3) the application for the refund or waiver is filed with
the Commission within 180 days from the date of shipment.
‘‘CHAPTER 407—CONTROLLED CARRIERS
‘‘Sec.
‘‘40701.
Rates.
‘‘40702.
Rate standards.
‘‘40703.
Effective date of rates.
‘‘40704.
Commission review.
‘‘40705.
Presidential review of Commission orders.
‘‘40706.
Exceptions.
‘‘§ 40701. Rates
‘‘(a) IN GENERAL.—A controlled carrier may not—
‘‘(1) maintain a rate or charge in a tariff or service contract,
or charge or assess a rate, that is below a just and reasonable
level; or
‘‘(2) establish, maintain, or enforce in a tariff or service
contract a classification, rule, or regulation that results, or
is likely to result, in the carriage or handling of cargo at
a rate or charge that is below a just and reasonable level.
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‘‘(b) COMMISSION PROHIBITION.—The Federal Maritime Commis-
sion, at any time after notice and opportunity for a hearing, may
prohibit the publication or use of a rate, charge, classification,
rule, or regulation that a controlled carrier has failed to demonstrate
is just and reasonable.
‘‘(c) BURDEN OF PROOF.—In a proceeding under this section,
the burden of proof is on the controlled carrier to demonstrate
that its rate, charge, classification, rule, or regulation is just and
reasonable.
‘‘(d) VOIDNESS.—A rate, charge, classification, rule, or regulation
that has been suspended or prohibited by the Commission is void
and its use is unlawful.
‘‘§ 40702. Rate standards
‘‘(a) DEFINITION.—In this section, the term ‘constructive costs’
means the costs of another carrier, other than a controlled carrier,
operating similar vessels and equipment in the same or a similar
trade.
‘‘(b) STANDARDS.—In determining whether a rate, charge, classi-
fication, rule, or regulation of a controlled carrier is just and reason-
able, the Federal Maritime Commission—
‘‘(1) shall take into account whether the rate or charge
that has been published or assessed, or that would result from
the pertinent classification, rule, or regulation, is below a level
that is fully compensatory to the controlled carrier based on
the carrier’s actual costs or constructive costs; and
‘‘(2) may take into account other appropriate factors,
including whether the rate, charge, classification, rule, or regu-
lation is—
‘‘(A) the same as, or similar to, those published or
assessed by other carriers in the same trade;
‘‘(B) required to ensure movement of particular cargo
in the same trade; or
‘‘(C) required to maintain acceptable continuity, level,
or quality of common carrier service to or from affected
ports.
‘‘§ 40703. Effective date of rates
‘‘Notwithstanding section 40501(e) of this title and except for
service contracts, a rate, charge, classification, rule, or regulation
of a controlled carrier may not become effective, without special
permission of the Federal Maritime Commission, until the 30th
day after publication.
‘‘§ 40704. Commission review
‘‘(a) REQUEST FOR JUSTIFICATION.—On request of the Federal
Maritime Commission, a controlled carrier shall file with the
Commission, within 20 days of the request, a statement of justifica-
tion that sufficiently details the carrier’s need and purpose for
an existing or proposed rate, charge, classification, rule, or regula-
tion and upon which the Commission may reasonably base a deter-
mination of its lawfulness.
‘‘(b) DETERMINATION.—Within 120 days after receipt of informa-
tion requested under subsection (a), the Commission shall determine
whether the rate, charge, classification, rule, or regulation may
be unjust and unreasonable.
Deadline.
Deadline.
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‘‘(c) SHOW CAUSE ORDER.—Whenever the Commission is of the
opinion that a rate, charge, classification, rule, or regulation pub-
lished or assessed by a controlled carrier may be unjust and
unreasonable, the Commission shall issue an order to the controlled
carrier to show cause why the rate, charge, classification, rule,
or regulation should not be prohibited.
‘‘(d) SUSPENSION PENDING DETERMINATION.—
‘‘(1) NOT YET EFFECTIVE.—Pending a determination of the
lawfulness of a rate, charge, classification, rule, or regulation
in a proceeding under subsection (c), the Commission may
suspend the rate, charge, classification, rule, or regulation at
any time before its effective date.
‘‘(2) ALREADY EFFECTIVE.—If a rate, charge, classification,
rule, or regulation has already become effective, the Commis-
sion, on issuance of an order to show cause, may suspend
the rate, charge, classification, rule, or regulation on at least
30 days’ notice to the controlled carrier.
‘‘(3) MAXIMUM SUSPENSION.—A period of suspension under
this subsection may not exceed 180 days.
‘‘(e) 
REPLACEMENT
DURING
SUSPENSION.—Whenever 
the
Commission has suspended a rate, charge, classification, rule, or
regulation under this section, the controlled carrier may publish
a new rate, charge, classification, rule, or regulation to take effect
immediately during the suspension in lieu of the suspended rate,
charge, classification, rule, or regulation. However, the Commission
may reject the new rate, charge, classification, rule, or regulation
if the Commission believes it is unjust and unreasonable.
‘‘§ 40705. Presidential review of Commission orders
‘‘(a) TRANSMISSION
TO
PRESIDENT.—The Federal Maritime
Commission shall transmit to the President, concurrently with
publication thereof, each order of suspension or final order of
prohibition issued under section 40704 of this title.
‘‘(b) PRESIDENTIAL REQUEST AND COMMISSION ACTION.—Within
10 days after receipt or the effective date of a Commission order
referred to in subsection (a), the President, in writing, may request
the Commission to stay the effect of the order if the President
finds that the stay is required for reasons of national defense
or foreign policy. The reasons shall be specified in the request.
The Commission shall immediately grant the request by issuing
an order in which the President’s request shall be described. During
a stay, the President shall, whenever practicable, attempt to resolve
the matter by negotiating with representatives of the applicable
foreign governments.
‘‘§ 40706. Exceptions
‘‘This chapter does not apply to—
‘‘(1) a controlled carrier of a foreign country whose vessels
are entitled by a treaty of the United States to receive national
or most-favored-nation treatment; or
‘‘(2) a trade served only by controlled carriers.
‘‘CHAPTER 409—OCEAN TRANSPORTATION
INTERMEDIARIES
‘‘Sec.
‘‘40901.
License requirement.
‘‘40902.
Financial responsibility.
Deadline.
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‘‘40903.
Suspension or revocation of license.
‘‘40904.
Compensation by common carriers.
‘‘§ 40901. License requirement
‘‘(a) IN GENERAL.—A person in the United States may not
act as an ocean transportation intermediary unless the person
holds an ocean transportation intermediary’s license issued by the
Federal Maritime Commission. The Commission shall issue a
license to a person that the Commission determines to be qualified
by experience and character to act as an ocean transportation
intermediary.
‘‘(b) EXCEPTION.—A person whose primary business is the sale
of merchandise may forward shipments of the merchandise for
its own account without an ocean transportation intermediary’s
license.
‘‘§ 40902. Financial responsibility
‘‘(a) IN GENERAL.—A person may not act as an ocean transpor-
tation intermediary unless the person furnishes a bond, proof of
insurance, or other surety—
‘‘(1) in a form and amount determined by the Federal
Maritime Commission to insure financial responsibility; and
‘‘(2) issued by a surety company found acceptable by the
Secretary of the Treasury.
‘‘(b) SCOPE OF FINANCIAL RESPONSIBILITY.—A bond, insurance,
or other surety obtained under this section—
‘‘(1) shall be available to pay any penalty assessed under
section 41109 of this title or any order for reparation issued
under section 41305 of this title;
‘‘(2) may be available to pay any claim against an ocean
transportation intermediary arising from its transportation-
related activities—
‘‘(A) with the consent of the insured ocean transpor-
tation intermediary and subject to review by the surety
company; or
‘‘(B) when the claim is deemed valid by the surety
company after the ocean transportation intermediary has
failed to respond to adequate notice to address the validity
of the claim; and
‘‘(3) shall be available to pay any judgment for damages
against an ocean transportation intermediary arising from its
transportation-related activities, if the claimant has first
attempted to resolve the claim under paragraph (2) and the
claim has not been resolved within a reasonable period of
time.
‘‘(c) REGULATIONS
ON COURT JUDGMENTS.—The Commission
shall prescribe regulations for the purpose of protecting the interests
of claimants, ocean transportation intermediaries, and surety
companies with respect to the process of pursuing claims against
ocean transportation intermediary bonds, insurance, or sureties
through court judgments. The regulations shall provide that a judg-
ment for monetary damages may not be enforced except to the
extent that the damages claimed arise from the transportation-
related activities of the insured ocean transportation intermediary,
as defined by the Commission.
‘‘(d) RESIDENT AGENT.—An ocean transportation intermediary
not domiciled in the United States shall designate a resident agent
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in the United States for receipt of service of judicial and administra-
tive process, including subpoenas.
‘‘§ 40903. Suspension or revocation of license
‘‘(a) FAILURE TO MAINTAIN QUALIFICATIONS OR TO COMPLY.—
The Federal Maritime Commission, after notice and opportunity
for a hearing, shall suspend or revoke an ocean transportation
intermediary’s license if the Commission finds that the ocean
transportation intermediary—
‘‘(1) is not qualified to provide intermediary services; or
‘‘(2) willfully failed to comply with a provision of this part
or with an order or regulation of the Commission.
‘‘(b) FAILURE TO MAINTAIN BOND, PROOF OF INSURANCE, OR
OTHER SURETY.—The Commission may revoke an ocean transpor-
tation intermediary’s license for failure to maintain a bond, proof
of insurance, or other surety as required by section 40902(a) of
this title.
‘‘§ 40904. Compensation by common carriers
‘‘(a) CERTIFICATION OF LICENSE AND SERVICES.—A common car-
rier may compensate an ocean freight forwarder for a shipment
dispatched for others only when the ocean freight forwarder has
certified in writing that it holds an ocean transportation
intermediary’s license (if required under section 40901 of this title)
and has—
‘‘(1) engaged, booked, secured, reserved, or contracted
directly with the carrier or its agent for space aboard a vessel
or confirmed the availability of the space; and
‘‘(2) prepared and processed the ocean bill of lading, dock
receipt, or other similar document for the shipment.
‘‘(b) DUAL COMPENSATION.—A common carrier may not pay
compensation for services described in subsection (a) more than
once on the same shipment.
‘‘(c) BENEFICIAL INTEREST SHIPMENTS.—An ocean freight for-
warder may not receive compensation from a common carrier for
a shipment in which the ocean freight forwarder has a direct
or indirect beneficial interest. A common carrier may not knowingly
pay compensation on that shipment.
‘‘(d) LIMITS ON AUTHORITY OF CONFERENCE OR GROUP.—A con-
ference or group of two or more ocean common carriers in the
foreign commerce of the United States that is authorized to agree
on the level of compensation paid to an ocean freight forwarder
may not—
‘‘(1) deny a member of the conference or group the right,
upon notice of not more than 5 days, to take independent
action on any level of compensation paid to an ocean freight
forwarder; or
‘‘(2) agree to limit the payment of compensation to an
ocean freight forwarder to less than 1.25 percent of the aggre-
gate of all rates and charges applicable under a tariff and
assessed against the cargo on which the services of the ocean
freight forwarder are provided.
‘‘CHAPTER 411—PROHIBITIONS AND PENALTIES
‘‘Sec.
‘‘41101.
Joint ventures and consortiums.
‘‘41102.
General prohibitions.
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‘‘41103.
Disclosure of information.
‘‘41104.
Common carriers.
‘‘41105.
Concerted action.
‘‘41106.
Marine terminal operators.
‘‘41107.
Monetary penalties.
‘‘41108.
Additional penalties.
‘‘41109.
Assessment of penalties.
‘‘§ 41101. Joint ventures and consortiums
‘‘In this chapter, a joint venture or consortium of two or more
common carriers operating as a single entity is deemed to be a
single common carrier.
‘‘§ 41102. General prohibitions
‘‘(a) OBTAINING TRANSPORTATION AT LESS THAN APPLICABLE
RATES.—A person may not knowingly and willfully, directly or
indirectly, by means of false billing, false classification, false
weighing, false report of weight, false measurement, or any other
unjust or unfair device or means, obtain or attempt to obtain
ocean transportation for property at less than the rates or charges
that would otherwise apply.
‘‘(b) OPERATING CONTRARY TO AGREEMENT.—A person may not
operate under an agreement required to be filed under section
40302 or 40305 of this title if—
‘‘(1) the agreement has not become effective under section
40304 of this title or has been rejected, disapproved, or canceled;
or
‘‘(2) the operation is not in accordance with the terms
of the agreement or any modifications to the agreement made
by the Federal Maritime Commission.
‘‘(c) PRACTICES IN HANDLING PROPERTY.—A common carrier,
marine terminal operator, or ocean transportation intermediary
may not fail to establish, observe, and enforce just and reasonable
regulations and practices relating to or connected with receiving,
handling, storing, or delivering property.
‘‘§ 41103. Disclosure of information
‘‘(a) PROHIBITION.—A common carrier, marine terminal oper-
ator, or ocean freight forwarder, either alone or in conjunction
with any other person, directly or indirectly, may not knowingly
disclose, offer, solicit, or receive any information concerning the
nature, kind, quantity, destination, consignee, or routing of any
property tendered or delivered to a common carrier, without the
consent of the shipper or consignee, if the information—
‘‘(1) may be used to the detriment or prejudice of the
shipper, the consignee, or any common carrier; or
‘‘(2) may improperly disclose its business transaction to
a competitor.
‘‘(b) EXCEPTIONS.—Subsection (a) does not prevent providing
the information—
‘‘(1) in response to legal process;
‘‘(2) to the Federal Maritime Commission or an agency
of the United States Government; or
‘‘(3) to an independent neutral body operating within the
scope of its authority to fulfill the policing obligations of the
parties to an agreement effective under this part.
‘‘(c) DISCLOSURE
FOR DETERMINING BREACH
OR COMPILING
STATISTICS.—An ocean common carrier that is a party to a con-
ference agreement approved under this part, a receiver, trustee,
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lessee, agent, or employee of the carrier, or any other person author-
ized by the carrier to receive information—
‘‘(1) may give information to the conference or any person
or agency designated by the conference, for the purpose of—
‘‘(A) determining whether a shipper or consignee has
breached an agreement with the conference or its member
lines;
‘‘(B) determining whether a member of the conference
has breached the conference agreement; or
‘‘(C) compiling statistics of cargo movement; and
‘‘(2) may not prevent the conference or its designee from
soliciting or receiving information for any of those purposes.
‘‘§ 41104. Common carriers
‘‘A common carrier, either alone or in conjunction with any
other person, directly or indirectly, may not—
‘‘(1) allow a person to obtain transportation for property
at less than the rates or charges established by the carrier
in its tariff or service contract by means of false billing, false
classification, false weighing, false measurement, or any other
unjust or unfair device or means;
‘‘(2) provide service in the liner trade that is—
‘‘(A) not in accordance with the rates, charges, classi-
fications, rules, and practices contained in a tariff published
or a service contract entered into under chapter 405 of
this title, unless excepted or exempted under section 40103
or 40501(a)(2) of this title; or
‘‘(B) under a tariff or service contract that has been
suspended or prohibited by the Federal Maritime Commis-
sion under chapter 407 or 423 of this title;
‘‘(3) retaliate against a shipper by refusing, or threatening
to refuse, cargo space accommodations when available, or resort
to other unfair or unjustly discriminatory methods because
the shipper has patronized another carrier, or has filed a com-
plaint, or for any other reason;
‘‘(4) for service pursuant to a tariff, engage in any unfair
or unjustly discriminatory practice in the matter of—
‘‘(A) rates or charges;
‘‘(B) cargo classifications;
‘‘(C) cargo space accommodations or other facilities,
with due regard being given to the proper loading of the
vessel and the available tonnage;
‘‘(D) loading and landing of freight; or
‘‘(E) adjustment and settlement of claims;
‘‘(5) for service pursuant to a service contract, engage in
any unfair or unjustly discriminatory practice in the matter
of rates or charges with respect to any port;
‘‘(6) use a vessel in a particular trade for the purpose
of excluding, preventing, or reducing competition by driving
another ocean common carrier out of that trade;
‘‘(7) offer or pay any deferred rebates;
‘‘(8) for service pursuant to a tariff, give any undue or
unreasonable preference or advantage or impose any undue
or unreasonable prejudice or disadvantage;
‘‘(9) for service pursuant to a service contract, give any
undue or unreasonable preference or advantage or impose any
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undue or unreasonable prejudice or disadvantage with respect
to any port;
‘‘(10) unreasonably refuse to deal or negotiate;
‘‘(11) knowingly and willfully accept cargo from or transport
cargo for the account of an ocean transportation intermediary
that does not have a tariff as required by section 40501 of
this title and a bond, insurance, or other surety as required
by section 40902 of this title; or
‘‘(12) knowingly and willfully enter into a service contract
with an ocean transportation intermediary that does not have
a tariff as required by section 40501 of this title and a bond,
insurance, or other surety as required by section 40902 of
this title, or with an affiliate of such an ocean transportation
intermediary.
‘‘§ 41105. Concerted action
‘‘A conference or group of two or more common carriers may
not—
‘‘(1) boycott or take any other concerted action resulting
in an unreasonable refusal to deal;
‘‘(2) engage in conduct that unreasonably restricts the use
of intermodal services or technological innovations;
‘‘(3) engage in any predatory practice designed to eliminate
the participation, or deny the entry, in a particular trade of
a common carrier not a member of the conference, a group
of common carriers, an ocean tramp, or a bulk carrier;
‘‘(4) negotiate with a non-ocean carrier or group of non-
ocean carriers (such as truck, rail, or air operators) on any
matter relating to rates or services provided to ocean common
carriers within the United States by those non-ocean carriers,
unless the negotiations and any resulting agreements are not
in violation of the antitrust laws and are consistent with the
purposes of this part, except that this paragraph does not
prohibit the setting and publishing of a joint through rate
by a conference, joint venture, or association of ocean common
carriers;
‘‘(5) deny in the export foreign commerce of the United
States compensation to an ocean freight forwarder or limit
that compensation to less than a reasonable amount;
‘‘(6) allocate shippers among specific carriers that are par-
ties to the agreement or prohibit a carrier that is a party
to the agreement from soliciting cargo from a particular shipper,
except as—
‘‘(A) authorized by section 40303(d) of this title;
‘‘(B) required by the law of the United States or the
importing or exporting country; or
‘‘(C) agreed to by a shipper in a service contract;
‘‘(7) for service pursuant to a service contract, engage in
any unjustly discriminatory practice in the matter of rates
or charges with respect to any locality, port, or person due
to the person’s status as a shippers’ association or ocean
transportation intermediary; or
‘‘(8) for service pursuant to a service contract, give any
undue or unreasonable preference or advantage or impose any
undue or unreasonable prejudice or disadvantage with respect
to any locality, port, or person due to the person’s status as
a shippers’ association or ocean transportation intermediary.
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‘‘§ 41106. Marine terminal operators
‘‘A marine terminal operator may not—
‘‘(1) agree with another marine terminal operator or with
a common carrier to boycott, or unreasonably discriminate in
the provision of terminal services to, a common carrier or
ocean tramp;
‘‘(2) give any undue or unreasonable preference or advan-
tage or impose any undue or unreasonable prejudice or dis-
advantage with respect to any person; or
‘‘(3) unreasonably refuse to deal or negotiate.
‘‘§ 41107. Monetary penalties
‘‘(a) IN GENERAL.—A person that violates this part or a regula-
tion or order of the Federal Maritime Commission issued under
this part is liable to the United States Government for a civil
penalty. Unless otherwise provided in this part, the amount of
the penalty may not exceed $5,000 for each violation or, if the
violation was willfully and knowingly committed, $25,000 for each
violation. Each day of a continuing violation is a separate violation.
‘‘(b) LIEN ON CARRIER’S VESSELS.—The amount of a civil penalty
imposed on a common carrier under this section constitutes a lien
on the vessels operated by the carrier. Any such vessel is subject
to an action in rem to enforce the lien in the district court of
the United States for the district in which it is found.
‘‘§ 41108. Additional penalties
‘‘(a) SUSPENSION
OF
TARIFFS.—For a violation of section
41104(1), (2), or (7) of this title, the Federal Maritime Commission
may suspend any or all tariffs of the common carrier, or that
common carrier’s right to use any or all tariffs of conferences
of which it is a member, for a period not to exceed 12 months.
‘‘(b) OPERATING UNDER SUSPENDED TARIFF.—A common carrier
that accepts or handles cargo for carriage under a tariff that has
been suspended, or after its right to use that tariff has been sus-
pended, is liable to the United States Government for a civil penalty
of not more than $50,000 for each shipment.
‘‘(c) FAILURE TO PROVIDE INFORMATION.—
‘‘(1) PENALTIES.—If the Commission finds, after notice and
opportunity for a hearing, that a common carrier has failed
to supply information ordered to be produced or compelled
by subpoena under section 41303 of this title, the Commission
may—
‘‘(A) suspend any or all tariffs of the carrier or the
carrier’s right to use any or all tariffs of conferences of
which it is a member; and
‘‘(B) request the Secretary of Homeland Security to
refuse or revoke any clearance required for a vessel oper-
ated by the carrier, and when so requested, the Secretary
shall refuse or revoke the clearance.
‘‘(2) DEFENSE BASED ON FOREIGN LAW.—If, in defense of
its failure to comply with a subpoena or discovery order, a
common carrier alleges that information or documents located
in a foreign country cannot be produced because of the laws
of that country, the Commission shall immediately notify the
Secretary of State of the failure to comply and of the allegation
relating to foreign laws. On receiving the notification, the Sec-
retary of State shall promptly consult with the government
Foreign relations.
Notification.
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of the nation within which the information or documents are
alleged to be located for the purpose of assisting the Commis-
sion in obtaining the information or documents.
‘‘(d) IMPAIRING ACCESS TO FOREIGN TRADE.—If the Commission
finds, after notice and opportunity for a hearing, that the action
of a common carrier, acting alone or in concert with another person,
or a foreign government has unduly impaired access of a vessel
documented under the laws of the United States to ocean trade
between foreign ports, the Commission shall take action that it
finds appropriate, including imposing any of the penalties author-
ized by this section. The Commission also may take any of the
actions authorized by sections 42304 and 42305 of this title.
‘‘(e) SUBMISSION OF ORDER TO PRESIDENT.—Before an order
under this section becomes effective, it shall be submitted imme-
diately to the President. The President, within 10 days after
receiving it, may disapprove it if the President finds that dis-
approval is required for reasons of national defense or foreign
policy.
‘‘§ 41109. Assessment of penalties
‘‘(a) GENERAL AUTHORITY.—Until a matter is referred to the
Attorney General, the Federal Maritime Commission may, after
notice and opportunity for a hearing, assess a civil penalty provided
for in this part. The Commission may compromise, modify, or remit,
with or without conditions, a civil penalty.
‘‘(b) FACTORS IN DETERMINING AMOUNT.—In determining the
amount of a civil penalty, the Commission shall take into account
the nature, circumstances, extent, and gravity of the violation com-
mitted and, with respect to the violator, the degree of culpability,
history of prior offenses, ability to pay, and other matters justice
may require.
‘‘(c) EXCEPTION.—A civil penalty may not be imposed for con-
spiracy to violate section 41102(a) or 41104(1) or (2) of this title
or to defraud the Commission by concealing such a violation.
‘‘(d) PROHIBITED BASIS
OF PENALTY.—The Commission or a
court may not order a person to pay the difference between the
amount billed and agreed upon in writing with a common carrier
or its agent and the amount set forth in a tariff or service contract
by that common carrier for the transportation service provided.
‘‘(e) TIME LIMIT.—A proceeding to assess a civil penalty under
this section must be commenced within 5 years after the date
of the violation.
‘‘(f) REVIEW
OF CIVIL PENALTY.—A person against whom a
civil penalty is assessed under this section may obtain review
under chapter 158 of title 28.
‘‘(g) CIVIL ACTIONS TO COLLECT.—If a person does not pay
an assessment of a civil penalty after it has become final or after
the appropriate court has entered final judgment in favor of the
Commission, the Attorney General at the request of the Commission
may seek to collect the amount assessed in an appropriate district
court of the United States. The court shall enforce the order of
the Commission unless it finds that the order was not regularly
made and duly issued.
‘‘CHAPTER 413—ENFORCEMENT
‘‘Sec.
‘‘41301.
Complaints.
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‘‘41302.
Investigations.
‘‘41303.
Discovery and subpoenas.
‘‘41304.
Hearings and orders.
‘‘41305.
Award of reparations.
‘‘41306.
Injunctive relief sought by complainants.
‘‘41307.
Injunctive relief sought by the Commission.
‘‘41308.
Enforcement of subpoenas and orders.
‘‘41309.
Enforcement of reparation orders.
‘‘§ 41301. Complaints
‘‘(a) IN GENERAL.—A person may file with the Federal Maritime
Commission a sworn complaint alleging a violation of this part,
except section 41307(b)(1). If the complaint is filed within 3 years
after the claim accrues, the complainant may seek reparations
for an injury to the complainant caused by the violation.
‘‘(b) NOTICE AND RESPONSE.—The Commission shall provide
a copy of the complaint to the person named in the complaint.
Within a reasonable time specified by the Commission, the person
shall satisfy the complaint or answer it in writing.
‘‘(c) IF COMPLAINT NOT SATISFIED.—If the complaint is not
satisfied, the Commission shall investigate the complaint in an
appropriate manner and make an appropriate order.
‘‘§ 41302. Investigations
‘‘(a) IN GENERAL.—The Federal Maritime Commission, on com-
plaint or its own motion, may investigate any conduct or agreement
that the Commission believes may be in violation of this part.
The Commission may by order disapprove, cancel, or modify any
agreement that operates in violation of this part.
‘‘(b) EFFECTIVENESS OF AGREEMENT DURING INVESTIGATION.—
Unless an injunction is issued under section 41306 or 41307 of
this title, an agreement under investigation by the Commission
remains in effect until the Commission issues its order.
‘‘(c) DATE FOR DECISION.—Within 10 days after the initiation
of a proceeding under this section or section 41301 of this title,
the Commission shall set a date by which it will issue its final
decision. The Commission by order may extend the date for good
cause.
‘‘(d) SANCTIONS
FOR DELAY.—If, within the period for final
decision under subsection (c), the Commission determines that it
is unable to issue a final decision because of undue delay caused
by a party to the proceeding, the Commission may impose sanctions,
including issuing a decision adverse to the delaying party.
‘‘(e) REPORT.—The Commission shall make a written report
of every investigation under this part in which a hearing was
held, stating its conclusions, decisions, findings of fact, and order.
The Commission shall provide a copy of the report to all parties
and publish the report for public information. A published report
is competent evidence in a court of the United States.
‘‘§ 41303. Discovery and subpoenas
‘‘(a) IN GENERAL.—In an investigation or adjudicatory pro-
ceeding under this part—
‘‘(1) the Federal Maritime Commission may subpoena wit-
nesses and evidence; and
‘‘(2) a party may use depositions, written interrogatories,
and discovery procedures under regulations prescribed by the
Commission that, to the extent practicable, shall conform to
the Federal Rules of Civil Procedure (28 App. U.S.C.).
Public
information.
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‘‘(b) WITNESS FEES.—Unless otherwise prohibited by law, a
witness is entitled to the same fees and mileage as in the courts
of the United States.
‘‘§ 41304. Hearings and orders
‘‘(a) OPPORTUNITY
FOR
HEARING.—The Federal Maritime
Commission shall provide an opportunity for a hearing before
issuing an order relating to a violation of this part or a regulation
prescribed under this part.
‘‘(b) MODIFICATION OF ORDER.—The Commission may reverse,
suspend, or modify any of its orders.
‘‘(c) REHEARING.—On application of a party to a proceeding,
the Commission may grant a rehearing of the same or any matter
determined in the proceeding. Except by order of the Commission,
a rehearing does not operate as a stay of an order.
‘‘(d) PERIOD OF EFFECTIVENESS.—An order of the Commission
remains in effect for the period specified in the order or until
suspended, modified, or set aside by the Commission or a court
of competent jurisdiction.
‘‘§ 41305. Award of reparations
‘‘(a) DEFINITION.—In this section, the term ‘actual injury’
includes the loss of interest at commercial rates compounded from
the date of injury.
‘‘(b) BASIC AMOUNT.—If the complaint was filed within the
period specified in section 41301(a) of this title, the Federal Mari-
time Commission shall direct the payment of reparations to the
complainant for actual injury caused by a violation of this part,
plus reasonable attorney fees.
‘‘(c) ADDITIONAL AMOUNTS.—On a showing that the injury was
caused by an activity prohibited by section 41102(b), 41104(3) or
(6), or 41105(1) or (3) of this title, the Commission may order
the payment of additional amounts, but the total recovery of a
complainant may not exceed twice the amount of the actual injury.
‘‘(d) DIFFERENCE BETWEEN RATES.—If the injury was caused
by an activity prohibited by section 41104(4)(A) or (B) of this title,
the amount of the injury shall be the difference between the rate
paid by the injured shipper and the most favorable rate paid by
another shipper.
‘‘§ 41306. Injunctive relief sought by complainants
‘‘(a) IN GENERAL.—After filing a complaint with the Federal
Maritime Commission under section 41301 of this title, the
complainant may bring a civil action in a district court of the
United States to enjoin conduct in violation of this part.
‘‘(b) VENUE.—The action must be brought in the judicial district
in which—
‘‘(1) the Commission has brought a civil action against
the defendant under section 41307(a) of this title; or
‘‘(2) the defendant resides or transacts business, if the
Commission has not brought such an action.
‘‘(c) REMEDIES BY COURT.—After notice to the defendant, and
a showing that the standards for granting injunctive relief by courts
of equity are met, the court may grant a temporary restraining
order or preliminary injunction for a period not to exceed 10 days
after the Commission has issued an order disposing of the com-
plaint.
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‘‘(d) ATTORNEY FEES.—A defendant prevailing in a civil action
under this section shall be allowed reasonable attorney fees to
be assessed and collected as part of the costs of the action.
‘‘§ 41307. Injunctive relief sought by the Commission
‘‘(a) GENERAL VIOLATIONS.—In connection with an investigation
under section 41301 or 41302 of this title, the Federal Maritime
Commission may bring a civil action to enjoin conduct in violation
of this part. The action must be brought in the district court
of the United States for any judicial district in which the defendant
resides or transacts business. After notice to the defendant, and
a showing that the standards for granting injunctive relief by courts
of equity are met, the court may grant a temporary restraining
order or preliminary injunction for a period not to exceed 10 days
after the Commission has issued an order disposing of the issues
under investigation.
‘‘(b) REDUCTION IN COMPETITION.—
‘‘(1) ACTION
BY
COMMISSION.—If, at any time after the
filing or effective date of an agreement under chapter 403
of this title, the Commission determines that the agreement
is likely, by a reduction in competition, to produce an unreason-
able reduction in transportation service or an unreasonable
increase in transportation cost, the Commission, after notice
to the person filing the agreement, may bring a civil action
in the United States District Court for the District of Columbia
to enjoin the operation of the agreement. The Commission’s
sole remedy with respect to an agreement likely to have such
an effect is an action under this subsection.
‘‘(2) REMEDIES BY COURT.—In an action under this sub-
section, the court may issue—
‘‘(A) a temporary restraining order or a preliminary
injunction; and
‘‘(B) a permanent injunction after a showing that the
agreement is likely to have the effect described in para-
graph (1).
‘‘(3) BURDEN OF PROOF AND THIRD PARTIES.—In an action
under this subsection, the burden of proof is on the Commission.
The court may not allow a third party to intervene.
‘‘(c) FAILURE TO PROVIDE INFORMATION.—If a person filing an
agreement, or an officer, director, partner, agent, or employee of
the person, fails substantially to comply with a request for the
submission of additional information or documents within the period
provided in section 40304(c) of this title, the Commission may
bring a civil action in the United States District Court for the
District of Columbia. At the request of the Commission, the Court—
‘‘(1) may order compliance;
‘‘(2) shall extend the period specified in section 40304(c)(2)
of this title until there has been substantial compliance; and
‘‘(3) may grant other equitable relief that the court decides
is appropriate.
‘‘(d) REPRESENTATION.—The Commission may represent itself
in a proceeding under this section in—
‘‘(1) a district court of the United States, on notice to
the Attorney General; and
‘‘(2) a court of appeals of the United States, with the
approval of the Attorney General.
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‘‘§ 41308. Enforcement of subpoenas and orders
‘‘(a) CIVIL ACTION.—If a person does not comply with a subpoena
or order of the Federal Maritime Commission, the Attorney General,
at the request of the Commission, or an injured party, may seek
enforcement in a district court of the United States having jurisdic-
tion over the parties. If, after hearing, the court determines that
the subpoena or order was regularly made and duly issued, the
court shall enforce the subpoena or order.
‘‘(b) TIME LIMIT ON BRINGING ACTIONS.—An action under this
section to enforce an order of the Commission must be brought
within 3 years after the date the order was violated.
‘‘§ 41309. Enforcement of reparation orders
‘‘(a) CIVIL ACTION.—If a person does not comply with an order
of the Federal Maritime Commission for the payment of reparation,
the person to whom the award was made may seek enforcement
of the order in a district court of the United States having jurisdic-
tion over the parties.
‘‘(b) PARTIES AND SERVICE OF PROCESS.—All parties in whose
favor the Commission has made an award of reparation by a single
order may be joined as plaintiffs, and all other parties in the
order may be joined as defendants, in a single action in a judicial
district in which any one plaintiff could maintain an action against
any one defendant. Service of process against a defendant not
found in that district may be made in a district in which any
office of that defendant is located or in which any port of call
on a regular route operated by that defendant is located. Judgment
may be entered for any plaintiff against the defendant liable to
that plaintiff.
‘‘(c) NATURE OF REVIEW.—In an action under this section, the
findings and order of the Commission are prima facie evidence
of the facts stated in the findings and order.
‘‘(d) COSTS AND ATTORNEY FEES.—The plaintiff is not liable
for costs of the action or for costs of any subsequent stage of
the proceedings unless they accrue on the plaintiff’s appeal. A
prevailing plaintiff shall be allowed reasonable attorney fees to
be assessed and collected as part of the costs of the action.
‘‘(e) TIME LIMIT ON BRINGING ACTIONS.—An action under this
section to enforce an order of the Commission must be brought
within 3 years after the date the order was violated.
‘‘PART B—ACTIONS TO ADDRESS FOREIGN PRACTICES
‘‘CHAPTER 421—REGULATIONS AFFECTING SHIPPING IN
FOREIGN TRADE
‘‘Sec.
‘‘42101.
Regulations of the Commission.
‘‘42102.
Regulations of other agencies.
‘‘42103.
No preference to Government-owned vessels.
‘‘42104.
Information, witnesses, and evidence.
‘‘42105.
Disclosure to public.
‘‘42106.
Other actions to remedy unfavorable conditions.
‘‘42107.
Refusal of clearance and entry.
‘‘42108.
Penalty for operating under suspended tariff or service contract.
‘‘42109.
Consultation with other agencies.
‘‘§ 42101. Regulations of the Commission
‘‘(a) UNFAVORABLE CONDITIONS.—To further the objectives and
policy set forth in section 50101 of this title, the Federal Maritime
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Commission shall prescribe regulations affecting shipping in foreign
trade, not in conflict with law, to adjust or meet general or special
conditions unfavorable to shipping in foreign trade, whether in
a particular trade or on a particular route or in commerce generally,
including intermodal movements, terminal operations, cargo solici-
tation, agency services, ocean transportation intermediary services
and operations, and other activities and services integral to
transportation systems, and which arise out of or result from laws
or regulations of a foreign country or competitive methods, pricing
practices, or other practices employed by owners, operators, agents,
or masters of vessels of a foreign country.
‘‘(b) INITIATION OF REGULATION.—A regulation under subsection
(a) may be initiated by the Commission on its own motion or
on the petition of any person, including another component of
the United States Government.
‘‘§ 42102. Regulations of other agencies
‘‘(a) REQUEST TO AGENCY.—To further the objectives and policy
set forth in section 50101 of this title, the Federal Maritime
Commission shall request the head of a department, agency, or
instrumentality of the United States Government to suspend,
modify, or annul any existing regulations, or to make new regula-
tions, affecting shipping in the foreign trade, except regulations
relating to the Public Health Service, the Consular Service, or
the inspection of vessels.
‘‘(b) PRIOR REVIEW AND APPROVAL.—A department, agency, or
instrumentality of the Government may not prescribe a regulation
affecting shipping in the foreign trade (except a regulation affecting
the Public Health Service, the Consular Service, or the inspection
of vessels) until the regulation has been submitted to the Commis-
sion for its approval and final action has been taken by the Commis-
sion or the President.
‘‘(c) SUBMISSION TO PRESIDENT.—If the head of a department,
agency, or instrumentality of the Government refuses to comply
with a request under subsection (a) or objects to a decision of
the Commission under subsection (b), the Commission or the head
of the department, agency, or instrumentality may submit the facts
to the President. The President may establish, suspend, modify,
or annul the regulation.
‘‘§ 42103. No preference to Government-owned vessels
‘‘A regulation may not give a vessel owned by the United
States Government a preference over a vessel owned by citizens
of the United States and documented under the laws of the United
States.
‘‘§ 42104. Information, witnesses, and evidence
‘‘(a) ORDER TO SUPPLY INFORMATION.—In carrying out section
42101 of this title, the Federal Maritime Commission may order
any person (including a common carrier, tramp operator, bulk oper-
ator, shipper, shippers’ association, ocean transportation inter-
mediary, or marine terminal operator, or an officer, receiver,
trustee, lessee, agent, or employee thereof) to file with the Commis-
sion a report, answers to questions, documentary material, or other
information the Commission considers necessary or appropriate.
The Commission may require the response to any such order to
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be made under oath. The response shall be provided in the form
and within the time specified by the Commission.
‘‘(b) SUBPOENAS AND DISCOVERY.—In carrying out section 42101
of this title, the Commission may—
‘‘(1) subpoena witnesses and evidence; and
‘‘(2) authorize a party to use depositions, written interrog-
atories, and discovery procedures that, to the extent practicable,
conform to the Federal Rules of Civil Procedure (28 App.
U.S.C.).
‘‘(c) WITNESS FEES.—Unless otherwise prohibited by law, and
subject to funds being appropriated, a witness in a proceeding
under section 42101 of this title is entitled to the same fees and
mileage as in the courts of the United States.
‘‘(d) PENALTIES.—For failure to supply information ordered to
be produced or compelled by subpoena under this section, the
Commission may—
‘‘(1) after notice and opportunity for a hearing, suspend
tariffs and service contracts of a common carrier or the common
carrier’s right to use tariffs of conferences and service contracts
of agreements of which it is a member; or
‘‘(2) assess a civil penalty of not more than $5,000 for
each day that the information is not provided.
‘‘(e) ENFORCEMENT.—If a person does not comply with an order
or subpoena of the Commission under this section, the Commission
may seek enforcement in a district court of the United States
having jurisdiction over the parties. If, after hearing, the court
determines that the order or subpoena was regularly made and
duly issued, the court shall enforce the order or subpoena.
‘‘§ 42105. Disclosure to public
‘‘Notwithstanding any other provision of law, the Federal Mari-
time Commission may refuse to disclose to the public a response
or other information submitted to it under this chapter.
‘‘§ 42106. Other actions to remedy unfavorable conditions
‘‘If the Federal Maritime Commission finds that conditions
unfavorable to shipping in foreign trade as described in section
42101 of this title exist, the Commission may—
‘‘(1) limit voyages to and from United States ports or the
amount or type of cargo carried;
‘‘(2) suspend, in whole or in part, tariffs and service con-
tracts for carriage to or from United States ports, including
a common carrier’s right to use tariffs of conferences and service
contracts of agreements in United States trades of which it
is a member for any period the Commission specifies;
‘‘(3) suspend, in whole or in part, an ocean common carrier’s
right to operate under any agreement filed with the Commis-
sion, including any agreement authorizing preferential treat-
ment at terminals, preferential terminal leases, space char-
tering, or pooling of cargo or revenue with other ocean common
carriers;
‘‘(4) impose a fee not to exceed $1,000,000 per voyage;
or
‘‘(5) take any other action the Commission finds necessary
and appropriate to adjust or meet any condition unfavorable
to shipping in the foreign trade of the United States.
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‘‘§ 42107. Refusal of clearance and entry
‘‘At the request of the Federal Maritime Commission—
‘‘(1) the Secretary of Homeland Security shall—
‘‘(A) refuse the clearance required by section 60105
of this title to a vessel of a country that is named in
a regulation prescribed by the Commission under section
42101 of this title; and
‘‘(B) collect any fees imposed by the Commission under
section 42106(4) of this title; and
‘‘(2) the Secretary of the department in which the Coast
Guard is operating shall—
‘‘(A) deny entry, for purposes of oceanborne trade, of
a vessel of a country that is named in a regulation pre-
scribed by the Commission under section 42101 of this
title, to a port or place in the United States or the navigable
waters of the United States; or
‘‘(B) detain the vessel at the port or place in the United
States from which it is about to depart for another port
or place in the United States.
‘‘§ 42108. Penalty for operating under suspended tariff or
service contract
‘‘A common carrier that accepts or handles cargo for carriage
under a tariff or service contract that has been suspended under
section 42104(d)(1) or 42106(2) of this title, or after its right to
use another tariff or service contract has been suspended under
those provisions, is liable to the United States Government for
a civil penalty of not more than $50,000 for each day that it
is found to be operating under a suspended tariff or service contract.
‘‘§ 42109. Consultation with other agencies
‘‘The Federal Maritime Commission may consult with, seek
the cooperation of, or make recommendations to other appropriate
agencies of the United States Government prior to taking any
action under this chapter.
‘‘CHAPTER 423—FOREIGN SHIPPING PRACTICES
‘‘Sec.
‘‘42301.
Definitions.
‘‘42302.
Investigations.
‘‘42303.
Information requests.
‘‘42304.
Action against foreign carriers.
‘‘42305.
Refusal of clearance and entry.
‘‘42306.
Submission of determinations to President.
‘‘42307.
Review of regulations and orders.
‘‘§ 42301. Definitions
‘‘(a) DEFINED IN PART A.—In this chapter, the terms ‘common
carrier’, ‘marine terminal operator’, ‘ocean common carrier’, ‘ocean
transportation intermediary’, ‘shipper’, and ‘shippers’ association’
have the meaning given those terms in section 40102 of this title.
‘‘(b) OTHER DEFINITIONS.—In this chapter:
‘‘(1) FOREIGN CARRIER.—The term ‘foreign carrier’ means
an ocean common carrier a majority of whose vessels are docu-
mented under the laws of a foreign country.
‘‘(2) MARITIME
SERVICES.—The term ‘maritime services’
means port-to-port transportation of cargo by vessels operated
by an ocean common carrier.
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‘‘(3) MARITIME-RELATED
SERVICES.—The term ‘maritime-
related services’ means intermodal operations, terminal oper-
ations, cargo solicitation, agency services, ocean transportation
intermediary services and operations, and all other activities
and services integral to total transportation systems of ocean
common carriers and their foreign domiciled affiliates for them-
selves and others.
‘‘(4) UNITED STATES CARRIER.—The term ‘United States car-
rier’ means an ocean common carrier operating vessels docu-
mented under the laws of the United States.
‘‘(5) UNITED STATES OCEANBORNE TRADE.—The term ‘United
States oceanborne trade’ means the carriage of cargo between
the United States and a foreign country, whether directly or
indirectly, by an ocean common carrier.
‘‘§ 42302. Investigations
‘‘(a) IN GENERAL.—The Federal Maritime Commission shall
investigate whether any laws, rules, regulations, policies, or prac-
tices of a foreign government, or any practices of a foreign carrier
or other person providing maritime or maritime-related services
in a foreign country, result in the existence of conditions that—
‘‘(1) adversely affect the operations of United States carriers
in United States oceanborne trade; and
‘‘(2) do not exist for foreign carriers of that country in
the United States under the laws of the United States or
as a result of acts of United States carriers or other persons
providing maritime or maritime-related services in the United
States.
‘‘(b) INITIATION OF INVESTIGATION.—An investigation under sub-
section (a) may be initiated by the Commission on its own motion
or on the petition of any person, including another component
of the United States Government.
‘‘(c) TIME FOR DECISION.—The Commission shall complete an
investigation under this section and render a decision within 120
days after it is initiated. However, the Commission may extend
this 120-day period for an additional 90 days if the Commission
is unable to obtain sufficient information to determine whether
a condition specified in subsection (a) exists. A notice providing
an extension shall state clearly the reasons for the extension.
‘‘§ 42303. Information requests
‘‘(a) IN GENERAL.—To further the purposes of section 42302(a)
of this title, the Federal Maritime Commission may order any
person (including a common carrier, shipper, shippers’ association,
ocean transportation intermediary, or marine terminal operator,
or an officer, receiver, trustee, lessee, agent or employee thereof)
to file with the Commission any periodic or special report, answers
to questions, documentary material, or other information the
Commission considers necessary or appropriate. The Commission
may require the response to any such order to be made under
oath. The response shall be provided in the form and within the
time specified by the Commission.
‘‘(b) SUBPOENAS.—In an investigation under section 42302 of
this title, the Commission may subpoena witnesses and evidence.
‘‘(c) NONDISCLOSURE.—Notwithstanding any other provision of
law, the Commission may determine that any information submitted
Notification.
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to it in response to a request under this section, or otherwise,
shall not be disclosed to the public.
‘‘§ 42304. Action against foreign carriers
‘‘(a) IN GENERAL.—Subject to section 42306 of this title, when-
ever the Federal Maritime Commission, after notice and opportunity
for comment or hearing, determines that the conditions specified
in section 42302(a) of this title exist, the Commission shall take
such action to offset those conditions as it considers necessary
and appropriate against any foreign carrier that is a contributing
cause, or whose government is a contributing cause, to those condi-
tions. The action may include—
‘‘(1) limitations on voyages to and from United States ports
or on the amount or type of cargo carried;
‘‘(2) suspension, in whole or in part, of any or all tariffs
and service contracts, including an ocean common carrier’s
right to use any or all tariffs and service contracts of con-
ferences in United States trades of which it is a member for
any period the Commission specifies;
‘‘(3) suspension, in whole or in part, of an ocean common
carrier’s right to operate under any agreement filed with the
Commission, including any agreement authorizing preferential
treatment at terminals, preferential terminal leases, space char-
tering, or pooling of cargo or revenue with other ocean common
carriers; and
‘‘(4) a fee not to exceed $1,000,000 per voyage.
‘‘(b) CONSULTATION.—The Commission may consult with, seek
the cooperation of, or make recommendations to other appropriate
agencies of the United States Government prior to taking any
action under subsection (a).
‘‘§ 42305. Refusal of clearance and entry
‘‘Subject to section 42306 of this title, whenever the Federal
Maritime Commission determines that the conditions specified in
section 42302(a) of this title exist, then at the request of the
Commission—
‘‘(1) the Secretary of Homeland Security shall refuse the
clearance required by section 60105 of this title to a vessel
of a foreign carrier that is identified by the Commission under
section 42304 of this title; and
‘‘(2) the Secretary of the department in which the Coast
Guard is operating shall—
‘‘(A) deny entry, for purposes of oceanborne trade, of
a vessel of a foreign carrier that is identified by the
Commission under section 42304 of this title, to a port
or place in the United States or the navigable waters
of the United States; or
‘‘(B) detain the vessel at the port or place in the United
States from which it is about to depart for another port
or place in the United States.
‘‘§ 42306. Submission of determinations to President
‘‘Before a determination under section 42304 of this title
becomes effective or a request is made under section 42305 of
this title, the determination shall be submitted immediately to
the President. The President, within 10 days after receiving it,
may disapprove it in writing, setting forth the reasons for the
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disapproval, if the President finds that disapproval is required
for reasons of national defense or foreign policy.
‘‘§ 42307. Review of regulations and orders
‘‘A regulation or final order of the Federal Maritime Commis-
sion under this chapter is reviewable exclusively in the same forum
and in the same manner as provided in section 2342(3)(B) of title
28.
‘‘PART C—MISCELLANEOUS
‘‘CHAPTER 441—EVIDENCE OF FINANCIAL
RESPONSIBILITY FOR PASSENGER TRANSPORTATION
‘‘Sec.
‘‘44101.
Application.
‘‘44102.
Financial responsibility to indemnify passengers for nonperformance of
transportation.
‘‘44103.
Financial responsibility to pay liability for death or injury.
‘‘44104.
Civil penalty.
‘‘44105.
Refusal of clearance.
‘‘44106.
Conduct of proceedings.
‘‘§ 44101. Application
‘‘This chapter applies to a vessel that—
‘‘(1) has berth or stateroom accommodations for at least
50 passengers; and
‘‘(2) boards passengers at a port in the United States.
‘‘§ 44102. Financial responsibility to indemnify passengers
for nonperformance of transportation
‘‘(a) FILING REQUIREMENT.—A person in the United States may
not arrange, offer, advertise, or provide transportation on a vessel
to which this chapter applies unless the person has filed with
the Federal Maritime Commission evidence of financial responsi-
bility to indemnify passengers for nonperformance of the transpor-
tation.
‘‘(b) SATISFACTORY EVIDENCE.—To satisfy subsection (a), a per-
son must file—
‘‘(1) information the Commission considers necessary; or
‘‘(2) a copy of a bond or other security, in such form as
the Commission by regulation may require.
‘‘(c) AUTHORIZED ISSUER OF BOND.—If a bond is filed, it must
be issued by a bonding company authorized to do business in
the United States.
‘‘§ 44103. Financial responsibility to pay liability for death
or injury
‘‘(a) GENERAL REQUIREMENT.—The owner or charterer of a
vessel to which this chapter applies shall establish, under regula-
tions prescribed by the Federal Maritime Commission, financial
responsibility to meet liability for death or injury to passengers
or other individuals on a voyage to or from a port in the United
States.
‘‘(b) AMOUNTS.—
‘‘(1) IN GENERAL.—The amount of financial responsibility
required under subsection (a) shall be based on the number
of passenger accommodations as follows:
‘‘(A) $20,000 for each of the first 500 passenger accom-
modations.
Regulations.
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‘‘(B) $15,000 for each additional passenger accommoda-
tion between 501 and 1,000.
‘‘(C) $10,000 for each additional passenger accommoda-
tion between 1,001 and 1,500.
‘‘(D) $5,000 for each additional passenger accommoda-
tion over 1,500.
‘‘(2) MULTIPLE VESSELS.—If the owner or charterer is oper-
ating more than one vessel subject to this chapter, the amount
of financial responsibility shall be based on the number of
passenger accommodations on the vessel with the largest
number of passenger accommodations.
‘‘(c) AVAILABILITY TO PAY JUDGMENT.—The amount determined
under subsection (b) shall be available to pay a judgment for dam-
ages (whether less than or more than $20,000) for death or injury
to a passenger or other individual on a voyage to or from a port
in the United States.
‘‘(d) MEANS OF ESTABLISHING.—Financial responsibility under
this section may be established by one or more of the following
if acceptable to the Commission:
‘‘(1) Insurance.
‘‘(2) Surety bond issued by a bonding company authorized
to do business in the United States.
‘‘(3) Qualification as a self-insurer.
‘‘(4) Other evidence of financial responsibility.
‘‘§ 44104. Civil penalty
‘‘A person that violates section 44102 or 44103 of this title
is liable to the United States Government for a civil penalty of
not more than $5,000, plus $200 for each passage sold, to be
assessed by the Federal Maritime Commission. The Commission
may remit or mitigate the penalty on terms the Commission con-
siders proper.
‘‘§ 44105. Refusal of clearance
‘‘The Secretary of Homeland Security shall refuse the clearance
required by section 60105 of this title, at the port or place of
departure from the United States, of a vessel that is subject to
this chapter and does not have evidence issued by the Federal
Maritime Commission of compliance with sections 44102 and 44103
of this title.
‘‘§ 44106. Conduct of proceedings
‘‘Part A of this subtitle applies to proceedings conducted by
the Federal Maritime Commission under this chapter.’’.
SEC. 8. SUBTITLE V OF TITLE 46.
(a) SUBTITLE ANALYSIS.—The analysis of subtitle V of title
46, United States Code, is amended to read as follows:
‘‘PART A—GENERAL
‘‘Chapter
Sec.
‘‘501. Policy, Studies, and Reports ................................................................
50101
‘‘503. Administrative ........................................................................................
50301
‘‘505. Other General Provisions .....................................................................
50501
‘‘PART B—MERCHANT MARINE SERVICE
‘‘511. General .....................................................................................................
51101
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‘‘513. United States Merchant Marine Academy .......................................
51301
‘‘515. State Maritime Academy Support Program ....................................
51501
‘‘517. Other Support for Merchant Marine Training ................................
51701
‘‘519. Merchant Marine Awards .....................................................................
51901
‘‘521. Miscellaneous ..........................................................................................
52101
‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS
‘‘531. Maritime Security Fleet ........................................................................
53101
‘‘533. Construction Reserve Funds ...............................................................
53301
‘‘535. Capital Construction Funds ................................................................
53501
‘‘537. Loans and Guarantees ..........................................................................
53701
‘‘539. War Risk Insurance ...............................................................................
53901
‘‘PART D—PROMOTIONAL PROGRAMS
‘‘551. Coastwise Trade .....................................................................................
55101
‘‘553. Passenger and Cargo Preferences .....................................................
55301
‘‘555. Miscellaneous ..........................................................................................
55501
‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES
‘‘561. Restrictions on Transfers .....................................................................
56101
‘‘563. Emergency Acquisition of Vessels ......................................................
56301
‘‘565. Essential Vessels Affected by Neutrality Act ...................................
56501
‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS
‘‘571. General Authority ..................................................................................
57101
‘‘573. Vessel Trade-In Program ......................................................................
57301
‘‘575. Construction, Charter, and Sale of Vessels ......................................
57501
‘‘PART G—RESTRICTIONS AND PENALTIES
‘‘581. Restrictions and Penalties ...................................................................58101’’.
(b) CHAPTERS PRECEDING CHAPTER 531.—Subtitle V of title
46, United States Code, is amended by inserting after the subtitle
analysis the following:
‘‘PART A—GENERAL
‘‘CHAPTER 501—POLICY, STUDIES, AND REPORTS
‘‘Sec.
‘‘50101.
Objectives and policy.
‘‘50102.
Survey of merchant marine.
‘‘50103.
Determinations of essential services.
‘‘50104.
Studies of general maritime problems.
‘‘50105.
Studies and cooperation relating to the construction of vessels.
‘‘50106.
Studies on the operation of vessels.
‘‘50107.
Studies on marine insurance.
‘‘50108.
Studies on cargo carriage and cargo containers.
‘‘50109.
Miscellaneous studies.
‘‘50110.
Securing preference to vessels of the United States.
‘‘50111.
Reports to Congress.
‘‘50112.
National Maritime Enhancement Institutes.
‘‘50113.
Use and performance reports by operators of vessels.
‘‘§ 50101. Objectives and policy
‘‘(a) OBJECTIVES.—It is necessary for the national defense and
the development of the domestic and foreign commerce of the United
States that the United States have a merchant marine—
‘‘(1) sufficient to carry the waterborne domestic commerce
and a substantial part of the waterborne export and import
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foreign commerce of the United States and to provide shipping
service essential for maintaining the flow of the waterborne
domestic and foreign commerce at all times;
‘‘(2) capable of serving as a naval and military auxiliary
in time of war or national emergency;
‘‘(3) owned and operated as vessels of the United States
by citizens of the United States;
‘‘(4) composed of the best-equipped, safest, and most suit-
able types of vessels and manned with a trained and efficient
citizen personnel; and
‘‘(5) supplemented by efficient facilities for building and
repairing vessels.
‘‘(b) POLICY.—It is the policy of the United States to encourage
and aid the development and maintenance of a merchant marine
satisfying the objectives described in subsection (a).
‘‘§ 50102. Survey of merchant marine
‘‘(a) IN GENERAL.—The Secretary of Transportation shall survey
the merchant marine of the United States to determine whether
replacements and additions are required to carry out the objectives
and policy of section 50101 of this title. The Secretary shall study,
perfect, and adopt a long-range program for replacements and addi-
tions that will result, as soon as practicable, in—
‘‘(1) an adequate and well-balanced merchant fleet,
including vessels of all types, that will provide shipping service
essential for maintaining the flow of foreign commerce by ves-
sels designed to be readily and quickly convertible into trans-
port and supply vessels in a time of national emergency;
‘‘(2) ownership and operation of the fleet by citizens of
the United States insofar as practicable;
‘‘(3) vessels designed to afford the best and most complete
protection for passengers and crew against fire and all marine
perils; and
‘‘(4) an efficient capacity for building and repairing vessels
in the United States with an adequate number of skilled per-
sonnel to provide an adequate mobilization base.
‘‘(b) COOPERATION WITH SECRETARY OF NAVY.—In carrying out
subsection (a)(1), the Secretary of Transportation shall cooperate
closely with the Secretary of the Navy as to national defense
requirements.
‘‘§ 50103. Determinations of essential services
‘‘(a) ESSENTIAL SERVICES, ROUTES, AND LINES.—
‘‘(1) IN GENERAL.—The Secretary of Transportation shall
investigate, determine, and keep current records of the ocean
services, routes, and lines from ports in the United States,
or in the territories and possessions of the United States,
to foreign markets, which the Secretary determines to be essen-
tial for the promotion, development, expansion, and mainte-
nance of the foreign commerce of the United States. In making
such a determination, the Secretary shall consider and give
due weight to—
‘‘(A) the cost of maintaining each line;
‘‘(B) the probability that a line cannot be maintained
except at a heavy loss disproportionate to the benefit to
foreign trade;
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‘‘(C) the number of voyages and types of vessels that
should be employed in a line;
‘‘(D) the intangible benefit of maintaining a line to
the foreign commerce of the United States, the national
defense, and other national requirements; and
‘‘(E) any other facts and conditions a prudent business
person would consider when dealing with the person’s own
business.
‘‘(2) SAINT LAWRENCE SEAWAY.—For purposes of paragraph
(1), the Secretary shall establish services, routes, and lines
that reflect the seasonal closing of the Saint Lawrence Seaway
and provide for alternate routing of vessels through a different
range of ports during that closing to maintain continuity of
service on a year-round basis.
‘‘(b) BULK CARGO CARRYING SERVICES.—The Secretary shall
investigate, determine, and keep current records of the bulk cargo
carrying services that should be provided by vessels of the United
States (whether or not operating on particular services, routes,
or lines) for the promotion, development, expansion, and mainte-
nance of the foreign commerce of the United States and the national
defense or other national requirements.
‘‘(c) TYPES OF VESSELS.—The Secretary shall investigate, deter-
mine, and keep current records of the type, size, speed, method
of propulsion, and other requirements of the vessels, including
express-liner or super-liner vessels, that should be employed in—
‘‘(1) the services, routes, or lines described in subsection
(a), and the frequency and regularity of the voyages of the
vessels, with a view to furnishing adequate, regular, certain,
and permanent service; and
‘‘(2) the bulk cargo carrying services described in subsection
(b).
‘‘§ 50104. Studies of general maritime problems
‘‘The Secretary of Transportation shall study all maritime prob-
lems arising in carrying out the policy in section 50101 of this
title.
‘‘§ 50105. Studies and cooperation relating to the construc-
tion of vessels
‘‘(a) RELATIVE COSTS
AND NEW DESIGNS.—The Secretary of
Transportation shall investigate, determine, and keep current
records of—
‘‘(1) the relative cost of construction of comparable vessels
in the United States and in foreign countries; and
‘‘(2) new designs, new methods of construction, and new
types of equipment for vessels.
‘‘(b) RULES, CLASSIFICATIONS, AND RATINGS.—The Secretary
shall examine the rules under which vessels are constructed abroad
and in the United States and the methods of classifying and rating
the vessels.
‘‘(c) COLLABORATION WITH OWNERS AND BUILDERS.—The Sec-
retary shall collaborate with vessel owners and shipbuilders in
developing plans for the economical construction of vessels and
their propelling machinery, of most modern economical types, giving
thorough consideration to all well-recognized means of propulsion
and taking into account the benefits from standardized production
where practicable and desirable.
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‘‘(d) EXPRESS-LINER AND SUPER-LINER VESSELS.—The Secretary
shall study and cooperate with vessel owners in devising means
by which there may be constructed, by or with the aid of the
United States Government, express-liner or super-liner vessels com-
parable to those of other nations, especially with a view to their
use in a national emergency, and the use of transoceanic aircraft
service in connection with or in lieu of those vessels.
‘‘§ 50106. Studies on the operation of vessels
‘‘(a) RELATIVE COSTS.—The Secretary of Transportation shall
investigate, determine, and keep current records of the relative
cost of marine insurance, maintenance, repairs, wages and subsist-
ence of officers and crews, and all other items of expense, in the
operation of comparable vessels under the laws and regulations
of the United States and those of the foreign countries whose
vessels are substantial competitors of American vessels.
‘‘(b) SHIPYARDS.—The Secretary shall investigate, determine,
and keep current records of the number, location, and efficiency
of shipyards in the United States.
‘‘(c) NAVIGATION
LAWS.—The Secretary shall examine the
navigation laws and regulations of the United States and make
such recommendations to Congress as the Secretary considers
proper for the amendment, improvement, and revision of those
laws and for the development of the merchant marine of the United
States.
‘‘§ 50107. Studies on marine insurance
‘‘The Secretary of Transportation shall—
‘‘(1) examine into the subject of marine insurance, the
number of companies in the United States, domestic and for-
eign, engaging in marine insurance, the extent of the insurance
on hulls and cargoes placed or written in the United States,
and the extent of reinsurance of American maritime risks in
foreign companies; and
‘‘(2) ascertain what steps may be necessary to develop
an ample marine insurance system as an aid in the development
of the merchant marine of the United States.
‘‘§ 50108. Studies on cargo carriage and cargo containers
‘‘(a) STUDIES.—The Secretary of Transportation shall study—
‘‘(1) the methods of encouraging the development and
implementation of new concepts for the carriage of cargo in
the domestic and foreign commerce of the United States; and
‘‘(2) the economic and technological aspects of the use of
cargo containers as a method of carrying out the policy in
section 50101 of this title.
‘‘(b) RESTRICTION.—In carrying out subsection (a) and the policy
in section 50101 of this title, the United States Government may
not give preference as between carriers based on the length, height,
or width of cargo containers or the length, height, or width of
cargo container cells. This restriction applies to all existing con-
tainer vessels and any container vessel to be constructed or rebuilt.
‘‘§ 50109. Miscellaneous studies
‘‘(a) FOREIGN SUBSIDIES.—The Secretary of Transportation shall
investigate, determine, and keep current records of the extent and
Records.
Records.
Records.
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character of the governmental aid and subsidies granted by foreign
governments to their merchant marine.
‘‘(b) LAWS APPLICABLE TO AIRCRAFT.—The Secretary shall inves-
tigate, determine, and keep current records of the provisions of
law relating to shipping that should be made applicable to aircraft
engaged in foreign commerce to further the policy in section 50101
of this title, and any appropriate legislation in this regard.
‘‘(c) AID FOR COTTON, COAL, LUMBER, AND CEMENT.—The Sec-
retary shall investigate, determine, and keep current records of
the advisability of enactment of suitable legislation authorizing
the Secretary, in an economic or commercial emergency, to aid
farmers and producers of cotton, coal, lumber, and cement in any
section of the United States in the transportation and landing
of their products in any foreign port, which products can be carried
in dry-cargo vessels by reducing rates, by supplying additional
tonnage to any American operator, or by operation of vessels directly
by the Secretary, until the Secretary considers the special rate
reduction and operation unnecessary for the benefit of those farmers
and producers.
‘‘(d) INTERCOASTAL AND INLAND WATER TRANSPORTATION.—The
Secretary shall investigate, determine, and keep current records
of intercoastal and inland water transportation, including their
relation to transportation by land and air.
‘‘(e) OBSOLETE TONNAGE AND TRAMP SERVICE.—The Secretary
shall make studies and reports to Congress on—
‘‘(1) the scrapping or removal from service of old or obsolete
merchant tonnage owned by the United States Government
or in use in the merchant marine; and
‘‘(2) tramp shipping service and the advisability of citizens
of the United States participating in that service with vessels
under United States registry.
‘‘(f) MORTGAGE LOANS.—The Secretary shall investigate the
legal status of mortgage loans on vessel property, with a view
to the means of improving the security of those loans and of encour-
aging investment in American shipping.
‘‘§ 50110. Securing preference to vessels of the United States
‘‘(a) POSSIBILITIES
OF PROMOTING CARRIAGE.—The Secretary
of Transportation shall investigate, determine, and keep current
records of the possibilities of promoting the carriage of United
States foreign trade in vessels of the United States.
‘‘(b) INDUCEMENTS TO IMPORTERS AND EXPORTERS.—The Sec-
retary shall study and cooperate with vessel owners in devising
means by which the importers and exporters of the United States
can be induced to give preference to vessels of the United States.
‘‘(c) LIAISON WITH AGENCIES AND ORGANIZATIONS.—The Sec-
retary shall establish and maintain liaison with such other agencies
of the United States Government, and with such representative
trade organizations throughout the United States, as may be con-
cerned, directly or indirectly, with any movement of commodities
in the waterborne export and import foreign commerce of the United
States, for the purpose of securing preference to vessels of the
United States in the shipment of those commodities.
‘‘§ 50111. Reports to Congress
‘‘(a) IN GENERAL.—Not later than April 1 of each year, the
Secretary of Transportation shall submit a report to Congress.
Records.
Reports.
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The report shall include, with respect to activities of the Secretary
under this subtitle, the results of investigations, a summary of
transactions, a statement of all expenditures and receipts, the pur-
poses for which all expenditures were made, and any recommenda-
tions for legislation.
‘‘(b) ADMINISTERED AND OVERSIGHT FUNDS.—The Secretary, in
the report under subsection (a) and in the annual budget estimate
for the Maritime Administration submitted to Congress, shall state
separately the amount, source, intended use, and nature of any
funds (other than funds appropriated to the Administration or
to the Secretary of Transportation for use by the Administration)
administered, or subject to oversight, by the Administration.
‘‘(c) ADDITIONAL RECOMMENDATIONS
FOR LEGISLATION.—The
Secretary, from time to time, shall make recommendations to Con-
gress for legislation the Secretary considers necessary to better
achieve the objectives and policy of section 50101 of this title.
‘‘§ 50112. National Maritime Enhancement Institutes
‘‘(a) DESIGNATION.—The Secretary of Transportation may des-
ignate National Maritime Enhancement Institutes.
‘‘(b) ACTIVITIES.—Activities undertaken by an institute may
include—
‘‘(1) conducting research about methods to improve the
performance of maritime industries;
‘‘(2) enhancing the competitiveness of domestic maritime
industries in international trade;
‘‘(3) forecasting trends in maritime trade;
‘‘(4) assessing technological advancements;
‘‘(5) developing management initiatives and training;
‘‘(6) analyzing economic and operational impacts of regu-
latory policies and international negotiations or agreements
pending before international bodies;
‘‘(7) assessing the compatibility of domestic maritime infra-
structure systems with overseas transport systems;
‘‘(8) fostering innovations in maritime transportation
pricing; and
‘‘(9) improving maritime economics and finance.
‘‘(c) APPLICATION
FOR DESIGNATION.—An institution seeking
designation as a National Maritime Enhancement Institute shall
submit an application under regulations prescribed by the Sec-
retary.
‘‘(d) CRITERIA FOR DESIGNATION.—The Secretary shall designate
an institute under this section on the basis of the following criteria:
‘‘(1) The demonstrated research and extension resources
available to the applicant for carrying out the activities specified
in subsection (b).
‘‘(2) The ability of the applicant to provide leadership in
making national and regional contributions to the solution of
both long-range and immediate problems of the domestic mari-
time industry.
‘‘(3) The existence of an established program of the
applicant encompassing research and training directed to
enhancing maritime industries.
‘‘(4) The demonstrated ability of the applicant to assemble
and evaluate pertinent information from national and inter-
national sources and to disseminate results of maritime
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industry research and educational programs through a con-
tinuing education program.
‘‘(5) The qualification of the applicant as a nonprofit institu-
tion of higher learning.
‘‘(e) FINANCIAL AWARDS.—The Secretary may make awards on
an equal matching basis to an institute designated under subsection
(a) from amounts appropriated. The aggregate annual amount of
the Federal share of the awards by the Secretary may not exceed
$500,000.
‘‘(f) UNIVERSITY TRANSPORTATION RESEARCH FUNDS.—The Sec-
retary may make a grant under section 5505 of title 49 to an
institute designated under subsection (a) for maritime and maritime
intermodal research under that section as if the institute were
a university transportation center. In making a grant, the Secretary,
through the Research and Innovative Technology Administration,
shall advise the Maritime Administration on the availability of
funds for the grants and consult with the Administration on making
the grants.
‘‘§ 50113. Use and performance reports by operators of ves-
sels
‘‘(a) FILING REQUIREMENT.—The Secretary of Transportation
by regulation may require the operator of a vessel in the waterborne
foreign commerce of the United States to file such report, account,
record, or memorandum on the use and performance of the vessel
as the Secretary considers desirable to assist in carrying out this
subtitle. The report, account, record, or memorandum shall be
signed and verified, and be filed at the times and in the manner,
as provided by regulation.
‘‘(b) CIVIL PENALTY.—An operator not filing a report, account,
record, or memorandum required by the Secretary under this section
is liable to the United States Government for a civil penalty of
$50 for each day of the violation. A penalty imposed under this
section on the operator of a vessel constitutes a lien on the vessel
involved in the violation. A civil action in rem to enforce the
lien may be brought in the district court of the United States
for any district in which the vessel is found. The Secretary may
remit or mitigate any penalty imposed under this section.
‘‘CHAPTER 503—ADMINISTRATIVE
‘‘Sec.
‘‘50301.
Vessel Operations Revolving Fund.
‘‘50302.
Port development.
‘‘50303.
Operating property and extending term of notes.
‘‘50304.
Sale and transfer of property.
‘‘50305.
Appointment of trustee or receiver and operation of vessels.
‘‘50306.
Requiring testimony and records in investigations.
‘‘§ 50301. Vessel Operations Revolving Fund
‘‘(a) IN GENERAL.—There is a ‘Vessel Operations Revolving
Fund’ for use by the Secretary of Transportation in carrying out
duties and powers related to vessel operations, including charter,
operation, maintenance, repair, reconditioning, and improvement
of merchant vessels under the jurisdiction of the Secretary. The
Fund has a working capital of $20,000,000, to remain available
until expended.
‘‘(b) RELATIONSHIP
TO OTHER LAWS.—Notwithstanding any
other law, rates for shipping services provided under the Fund
Rates.
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shall be prescribed by the Secretary and the Fund shall be credited
with receipts from vessel operations conducted under the Fund.
Sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943
(50 App. U.S.C. 1291(a), (c), 1293(c), 1294), apply to those operations
and to seamen employed through general agents as employees
of the United States Government. Notwithstanding any other law
on the employment of persons by the Government, the seamen
may be employed in accordance with customary commercial prac-
tices in the maritime industry.
‘‘(c) ADVANCEMENTS.—With the approval of the Director of the
Office of Management and Budget, the Secretary may advance
amounts the Secretary considers necessary, but not more than
2 percent of vessel operating expenses, from the Fund to the appro-
priation ‘Salaries and Expenses’ in carrying out duties and powers
related to vessel operations, without regard to the limitations on
amounts stated in that appropriation.
‘‘(d) TRANSFERS.—The unexpended balances of working funds
or of allocation accounts established after January 1, 1951, for
the activities provided for in subsection (a), and receipts received
from those activities, may be transferred to the Fund, which shall
be available for the purposes of those working funds or allocation
accounts.
‘‘(e) LIMITATION.—
‘‘(1) IN GENERAL.—Amounts made available to the Secretary
for maritime activities by this section or any other law may
not be used to pay for a vessel described in paragraph (2)
unless the compensation to be paid is computed under section
56303 of this title as that section is interpreted by the Comp-
troller General.
‘‘(2) APPLICABLE
VESSELS.—Paragraph (1) applies to a
vessel—
‘‘(A) the title to which is acquired by the Government
by requisition or purchase;
‘‘(B) the use of which is taken by requisition or agree-
ment; or
‘‘(C) lost while insured by the Government.
‘‘(3) NONAPPLICABLE
VESSELS.—Paragraph (1) does not
apply to a vessel under a construction-differential subsidy con-
tract.
‘‘(f) AVAILABILITY
FOR ADDITIONAL PURPOSES.—The Fund is
available for—
‘‘(1) necessary expenses incurred in the protection,
preservation, maintenance, acquisition, or use of vessels
involved in mortgage foreclosure or forfeiture proceedings
instituted by the Government, including payment of prior
claims and liens, expenses of sale, or other related charges;
‘‘(2) necessary expenses incident to the redelivery and lay-
up, in the United States, of vessels chartered as of June 20,
1956, under agreements not calling for their return to the
Government;
‘‘(3) the activation, repair, and deactivation of merchant
vessels chartered for limited emergency purposes during fiscal
year 1957 under the jurisdiction of the Secretary; and
‘‘(4) payment of expenses of custody and maintenance of
Government-owned vessels not in the National Defense Reserve
Fleet.
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‘‘(g) EXPENSES
AND RECEIPTS RELATED
TO CHARTER OPER-
ATIONS.—The Fund is available for expenses incurred in activating,
repairing, and deactivating merchant vessels chartered under the
jurisdiction of the Secretary. Receipts from charter operations of
Government-owned vessels under the jurisdiction of the Secretary
shall be credited to the Fund.
‘‘§ 50302. Port development
‘‘(a) GENERAL REQUIREMENTS.—With the objective of promoting,
encouraging, and developing ports and transportation facilities in
connection with water commerce over which the Secretary of
Transportation has jurisdiction, the Secretary, in cooperation with
the Secretary of the Army, shall—
‘‘(1) investigate territorial regions and zones tributary to
ports, taking into consideration the economies of transportation
by rail, water, and highway and the natural direction of the
flow of commerce;
‘‘(2) investigate the causes of congestion of commerce at
ports and applicable remedies;
‘‘(3) investigate the subject of water terminals, including
the necessary docks, warehouses, and equipment, to devise
and suggest the types most appropriate for different locations
and for the most expeditious and economical transfer or inter-
change of passengers or property between water carriers and
rail carriers;
‘‘(4) consult with communities on the appropriate location
and plan of construction of wharves, piers, and water terminals;
‘‘(5) investigate the practicability and advantages of harbor,
river, and port improvements in connection with foreign and
coastwise trade; and
‘‘(6) investigate any other matter that may tend to promote
and encourage the use by vessels of ports adequate to care
for the freight that naturally would pass through those ports.
‘‘(b) SUBMISSION
OF FINDINGS
TO SURFACE TRANSPORTATION
BOARD.—After an investigation under subsection (a), if the Sec-
retary of Transportation believes that the rates or practices of
a rail carrier subject to the jurisdiction of the Surface Transpor-
tation Board are detrimental to the objective specified in subsection
(a), or that new rates or practices, new or additional port terminal
facilities, or affirmative action by a rail carrier is necessary to
promote that objective, the Secretary may submit findings to the
Board for action the Board considers appropriate under existing
law.
‘‘§ 50303. Operating property and extending term of notes
‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation
may—
‘‘(1) operate or lease docks, wharves, piers, or real property
under the Secretary’s control; and
‘‘(2) make extensions and accept renewals of—
‘‘(A) promissory notes and other evidences of indebted-
ness on property; and
‘‘(B) mortgages and other contracts securing the prop-
erty.
‘‘(b) TERMS OF TRANSACTIONS.—A transaction under subsection
(a) shall be on terms the Secretary considers necessary to carry
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out the purposes of this subtitle, but consistent with sound business
practice.
‘‘(c) AVAILABILITY OF AMOUNTS.—Amounts received by the Sec-
retary from a transaction under this section are available for
expenditure by the Secretary as provided in this subtitle.
‘‘§ 50304. Sale and transfer of property
‘‘(a) AUTHORITY TO SELL.—The Secretary of Transportation may
sell property (other than vessels transferred under section 4 of
the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 990)) on terms
the Secretary considers appropriate.
‘‘(b) TRANSFERS FROM MILITARY TO CIVILIAN CONTROL.—When
the President considers it in the interest of the United States,
the President may transfer to the Secretary of Transportation
possession and control of property described in the second paragraph
of section 17 of the Merchant Marine Act, 1920 (ch. 250, 41 Stat.
994), as originally enacted, that is possessed and controlled by
the Secretary of a military department.
‘‘(c) TRANSFERS FROM CIVILIAN TO MILITARY CONTROL.—When
the President considers it necessary, the President by executive
order may transfer to the Secretary of a military department posses-
sion and control of property described in section 17 of the Merchant
Marine Act, 1920 (ch. 250, 41 Stat. 994), as originally enacted,
that is possessed and controlled by the Secretary of Transportation.
The President’s order shall state the need for the transfer and
the period of the need. When the President decides that the need
has ended, the possession and control shall revert to the Secretary
of Transportation. The property may not be sold except as provided
by law.
‘‘§ 50305. Appointment of trustee or receiver and operation
of vessels
‘‘(a) APPOINTMENT OF TRUSTEES AND RECEIVERS.—
‘‘(1) APPOINTMENT OF SECRETARY.—In a proceeding in a
court of the United States in which a trustee or receiver may
be appointed for a corporation operating a vessel of United
States registry between the United States and a foreign
country, on which the United States Government holds a mort-
gage, the court may appoint the Secretary of Transportation
as the sole trustee or receiver (subject to the direction of the
court) if—
‘‘(A) the court finds that the appointment will—
‘‘(i) inure to the advantage of the estate and the
parties in interest; and
‘‘(ii) tend to carry out the purposes of this subtitle;
and
‘‘(B) the Secretary expressly consents to the appoint-
ment.
‘‘(2) APPOINTMENT
OF
OTHER
PERSON.—The appointment
of another person as trustee or receiver without a hearing
becomes effective when ratified by the Secretary, but the Sec-
retary may demand a hearing.
‘‘(b) OPERATION OF VESSELS.—
‘‘(1) IN GENERAL.—If the court is unwilling to allow the
trustee or receiver to operate the vessel in foreign commerce
without financial aid from the Government pending termination
of the proceeding, and the Secretary certifies to the court that
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the continued operation of the vessel is essential to the foreign
commerce of the United States and is reasonably calculated
to carry out the purposes of this subtitle, the court may allow
the Secretary to operate the vessel, either directly or through
a managing agent or operator employed by the Secretary. The
Secretary must agree to comply with terms imposed by the
court sufficient to protect the parties in interest. The Secretary
also must agree to pay all operating losses resulting from
the operation. The operation shall be for the account of the
trustee or receiver.
‘‘(2) PAYMENT OF OPERATING LOSSES AND OTHER AMOUNTS.—
The Secretary has no claim against the corporation, its estate,
or its assets for operating losses paid by the Secretary, but
the Secretary may pay amounts for depreciation the Secretary
considers reasonable and other amounts the court considers
just. The payment of operating losses and the other amounts
and compliance with terms imposed by the court shall be in
satisfaction of any claim against the Secretary resulting from
the operation of the vessel.
‘‘(3) DEEMED OPERATION BY GOVERNMENT.—A vessel oper-
ated by the Secretary under this subsection is deemed to be
a vessel operated by the United States under chapter 309
of this title.
‘‘§ 50306. Requiring testimony and records in investigations
‘‘(a) IN GENERAL.—In conducting an investigation that the Sec-
retary of Transportation considers necessary and proper to carry
out this subtitle, the Secretary may administer oaths, take evidence,
and subpoena persons to testify and produce documents relevant
to the matter under investigation. Persons may be required to
attend or produce documents from any place in the United States
at any designated place of hearing.
‘‘(b) FEES AND MILEAGE.—Persons subpoenaed by the Secretary
under subsection (a) shall be paid the same fees and mileage
paid to witnesses in the courts of the United States.
‘‘(c) ENFORCEMENT OF SUBPOENAS.—If a person disobeys a sub-
poena issued under subsection (a), the Secretary may seek an
order enforcing the subpoena from the district court of the United
States for the district in which the person resides or does business.
Process may be served in the judicial district in which the person
resides or is found. The court may issue an order to obey the
subpoena and punish a refusal to obey as a contempt of court.
‘‘CHAPTER 505—OTHER GENERAL PROVISIONS
‘‘Sec.
‘‘50501.
Entities deemed citizens of the United States.
‘‘50502.
Applicability to receivers, trustees, successors, and assigns.
‘‘50503.
Oceanographic research vessels.
‘‘50504.
Sailing school vessels.
‘‘§ 50501. Entities deemed citizens of the United States
‘‘(a) IN GENERAL.—In this subtitle, a corporation, partnership,
or association is deemed to be a citizen of the United States only
if the controlling interest is owned by citizens of the United States.
However, if the corporation, partnership, or association is operating
a vessel in the coastwise trade, at least 75 percent of the interest
must be owned by citizens of the United States.
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‘‘(b) ADDITIONAL REQUIREMENTS FOR CORPORATIONS.—In this
subtitle, a corporation is deemed to be a citizen of the United
States only if, in addition to satisfying the requirements in sub-
section (a)—
‘‘(1) it is incorporated under the laws of the United States
or a State;
‘‘(2) its chief executive officer, by whatever title, and the
chairman of its board of directors are citizens of the United
States; and
‘‘(3) no more of its directors are noncitizens than a minority
of the number necessary to constitute a quorum.
‘‘(c) DETERMINATION OF CONTROLLING CORPORATE INTEREST.—
The controlling interest in a corporation is owned by citizens of
the United States under subsection (a) only if—
‘‘(1) title to the majority of the stock in the corporation
is vested in citizens of the United States free from any trust
or fiduciary obligation in favor of a person not a citizen of
the United States;
‘‘(2) the majority of the voting power in the corporation
is vested in citizens of the United States;
‘‘(3) there is no contract or understanding by which the
majority of the voting power in the corporation may be exer-
cised, directly or indirectly, in behalf of a person not a citizen
of the United States; and
‘‘(4) there is no other means by which control of the corpora-
tion is given to or permitted to be exercised by a person not
a citizen of the United States.
‘‘(d) DETERMINATION OF 75 PERCENT CORPORATE INTEREST.—
At least 75 percent of the interest in a corporation is owned by
citizens of the United States under subsection (a) only if—
‘‘(1) title to at least 75 percent of the stock in the corpora-
tion is vested in citizens of the United States free from any
trust or fiduciary obligation in favor of a person not a citizen
of the United States;
‘‘(2) at least 75 percent of the voting power in the corpora-
tion is vested in citizens of the United States;
‘‘(3) there is no contract or understanding by which more
than 25 percent of the voting power in the corporation may
be exercised, directly or indirectly, in behalf of a person not
a citizen of the United States; and
‘‘(4) there is no other means by which control of more
than 25 percent of any interest in the corporation is given
to or permitted to be exercised by a person not a citizen of
the United States.
‘‘§ 50502. Applicability to receivers, trustees, successors, and
assigns
‘‘This subtitle applies to receivers, trustees, successors, and
assigns of any person to whom this subtitle applies.
‘‘§ 50503. Oceanographic research vessels
‘‘An oceanographic research vessel (as defined in section 2101
of this title) is deemed not to be engaged in trade or commerce.
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‘‘§ 50504. Sailing school vessels
‘‘(a) DEFINITIONS.—In this section, the terms ‘sailing school
instructor’, ‘sailing school student’, and ‘sailing school vessel’ have
the meaning given those terms in section 2101 of this title.
‘‘(b) NOT SEAMEN.—A sailing school student or sailing school
instructor is deemed not to be a seaman under—
‘‘(1) parts B, F, and G of subtitle II of this title; or
‘‘(2) the maritime law doctrines of maintenance and cure
or warranty of seaworthiness.
‘‘(c) NOT MERCHANT VESSEL OR ENGAGED IN TRADE OR COM-
MERCE.—A sailing school vessel is deemed not to be—
‘‘(1) a merchant vessel under section 11101(a)–(c) of this
title; or
‘‘(2) a vessel engaged in trade or commerce.
‘‘(d) EVIDENCE OF FINANCIAL RESPONSIBILITY.—The owner or
charterer of a sailing school vessel shall maintain evidence of finan-
cial responsibility to meet liability for death or injury to sailing
school students and sailing school instructors on a voyage on the
vessel. The amount of financial responsibility shall be at least
$50,000 for each student and instructor. Financial responsibility
under this subsection may be evidenced by insurance or other
adequate financial resources.
‘‘PART B—MERCHANT MARINE SERVICE
‘‘CHAPTER 511—GENERAL
‘‘Sec.
‘‘51101.
Policy.
‘‘51102.
Definitions.
‘‘51103.
General authority of Secretary of Transportation.
‘‘51104.
General authority of Secretary of the Navy.
‘‘§ 51101. Policy
‘‘It is the policy of the United States that merchant marine
vessels of the United States should be operated by highly trained
and efficient citizens of the United States and that the United
States Navy and the merchant marine of the United States should
work closely together to promote the maximum integration of the
total seapower forces of the United States.
‘‘§ 51102. Definitions
‘‘In this part:
‘‘(1) ACADEMY.—The term ‘Academy’ means the United
States Merchant Marine Academy located at Kings Point, New
York, and maintained under chapter 513 of this title.
‘‘(2) COST OF EDUCATION PROVIDED.—The term ‘cost of edu-
cation provided’ means the financial costs incurred by the
United States Government for providing training or financial
assistance to students at the Academy and the State maritime
academies, including direct financial assistance, room, board,
classroom academics, and other training activities.
‘‘(3) MERCHANT
MARINE
OFFICER.—The term ‘merchant
marine officer’ means an individual issued a license by the
Coast Guard authorizing service as—
‘‘(A) a master, mate, or pilot on a documented vessel
that—
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‘‘(i) is of at least 1,000 gross tons as measured
under section 14502 of this title or an alternate tonnage
measured under section 14302 of this title as pre-
scribed by the Secretary under section 14104 of this
title; and
‘‘(ii) operates on the oceans or the Great Lakes;
or
‘‘(B) an engineer officer on a documented vessel pro-
pelled by machinery of at least 4,000 horsepower.
‘‘(4) STATE MARITIME ACADEMY.—The term ‘State maritime
academy’ means—
‘‘(A) a State maritime academy or college sponsored
by a State and assisted under chapter 515 of this title;
and
‘‘(B) a regional maritime academy or college sponsored
by a group of States and assisted under chapter 515 of
this title.
‘‘§ 51103. General authority of Secretary of Transportation
‘‘(a) EDUCATION AND TRAINING.—The Secretary of Transpor-
tation may provide for the education and training of citizens of
the United States for the safe and efficient operation of the mer-
chant marine of the United States at all times, including operation
as a naval and military auxiliary in time of war or national emer-
gency.
‘‘(b) SURPLUS PROPERTY FOR INSTRUCTIONAL PURPOSES.—
‘‘(1) IN GENERAL.—The Secretary may cooperate with and
assist the institutions named in paragraph (2) by making ves-
sels, shipboard equipment, and other marine equipment, owned
by the United States Government and determined to be excess
or surplus, available to those institutions for instructional pur-
poses, by gift, loan, sale, lease, or charter on terms the Secretary
considers appropriate.
‘‘(2) INSTITUTIONS.—The institutions referred to in para-
graph (1) are—
‘‘(A) the United States Merchant Marine Academy;
‘‘(B) a State maritime academy; and
‘‘(C) a nonprofit training institution jointly approved
by the Secretary of Transportation and the Secretary of
the department in which the Coast Guard is operating
as offering training courses that meet Federal regulations
for maritime training.
‘‘(c) ASSISTANCE FROM OTHER AGENCIES.—
‘‘(1) IN GENERAL.—The Secretary of Transportation may
secure directly from an agency, on a reimbursable basis,
information, facilities, and equipment necessary to carry out
this part.
‘‘(2) DETAILING
PERSONNEL.—At the request of the Sec-
retary, the head of an agency (including a military department)
may detail, on a reimbursable basis, personnel from the agency
to the Secretary to assist in carrying out this part.
‘‘(d) ACADEMY PERSONNEL.—To carry out this part, the Sec-
retary may—
‘‘(1) employ an individual as a professor, lecturer, or
instructor at the Academy, without regard to the provisions
of title 5 governing appointments in the competitive service;
and
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‘‘(2) pay the individual without regard to chapter 51 and
subchapter III of chapter 53 of title 5.
‘‘§ 51104. General authority of Secretary of the Navy
‘‘The Secretary of the Navy, in cooperation with the Maritime
Administrator and the head of each State maritime academy, shall
ensure that—
‘‘(1) the training of future merchant marine officers at
the United States Merchant Marine Academy and at State
maritime academies includes programs for naval science
training in the operation of merchant vessels as a naval and
military auxiliary; and
‘‘(2) naval officer training programs for future officers,
insofar as possible, are maintained at designated maritime
academies consistent with Navy standards and needs.
‘‘CHAPTER 513—UNITED STATES MERCHANT MARINE
ACADEMY
‘‘Sec.
‘‘51301.
Maintenance of the Academy.
‘‘51302.
Nomination and competitive appointment of cadets.
‘‘51303.
Non-competitive appointments.
‘‘51304.
Additional appointments from particular areas.
‘‘51305.
Prohibited basis for appointment.
‘‘51306.
Cadet commitment agreements.
‘‘51307.
Places of training.
‘‘51308.
Uniforms, textbooks, and transportation allowances.
‘‘51309.
Academic degree.
‘‘51310.
Deferment of service obligation under cadet commitment agreements.
‘‘51311.
Midshipman status in the Naval Reserve.
‘‘51312.
Board of Visitors.
‘‘51313.
Advisory Board.
‘‘51314.
Limitation on charges and fees for attendance.
‘‘§ 51301. Maintenance of the Academy
‘‘The Secretary of Transportation shall maintain the United
States Merchant Marine Academy to provide instruction to individ-
uals to prepare them for service in the merchant marine of the
United States.
‘‘§ 51302. Nomination and competitive appointment of cadets
‘‘(a) REQUIREMENTS.—An individual may be nominated for a
competitive appointment as a cadet at the United States Merchant
Marine Academy only if the individual—
‘‘(1) is a citizen or national of the United States; and
‘‘(2) meets the minimum requirements that the Secretary
of Transportation shall establish.
‘‘(b) NOMINATORS.—Nominations for competitive appointments
for the positions allocated under subsection (c) may be made as
follows:
‘‘(1) A Senator may nominate residents of the State rep-
resented by that Senator.
‘‘(2) A Member of the House of Representatives may nomi-
nate residents of the State in which the congressional district
represented by that Member is located.
‘‘(3) A Delegate to the House of Representatives from the
District of Columbia, the Virgin Islands, Guam, or American
Samoa may nominate residents of the jurisdiction represented
by that Delegate.
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‘‘(4) The Resident Commissioner to the United States from
Puerto Rico may nominate residents of Puerto Rico.
‘‘(5) The Governor of the Northern Mariana Islands may
nominate residents of the Northern Mariana Islands.
‘‘(6) The Panama Canal Commission may nominate—
‘‘(A) residents, or sons or daughters of residents, of
an area or installation in Panama and made available
to the United States under the Panama Canal Treaty of
1977, the agreements relating to and implementing that
Treaty, signed September 7, 1977, and the Agreement
Between the United States of America and the Republic
of Panama Concerning Air Traffic Control and Related
Services, concluded January 8, 1979; and
‘‘(B) sons or daughters of personnel of the United States
Government and the Panama Canal Commission residing
in Panama.
‘‘(c) ALLOCATION
OF
POSITIONS.—Positions for competitive
appointments shall be allocated each year as follows:
‘‘(1) Positions shall be allocated for residents of each State
nominated by the Members of Congress from that State in
proportion to the representation in Congress from that State.
‘‘(2) Four positions shall be allocated for residents of the
District of Columbia nominated by the Delegate to the House
of Representatives from the District of Columbia.
‘‘(3) One position each shall be allocated for residents of
the Virgin Islands, Guam, and American Samoa nominated
by the Delegates to the House of Representatives from the
Virgin Islands, Guam, and American Samoa, respectively.
‘‘(4) One position shall be allocated for a resident of Puerto
Rico nominated by the Resident Commissioner to the United
States from Puerto Rico.
‘‘(5) One position shall be allocated for a resident of the
Northern Mariana Islands nominated by the Governor of the
Northern Mariana Islands.
‘‘(6) Two positions shall be allocated for individuals nomi-
nated by the Panama Canal Commission.
‘‘(d) COMPETITIVE SYSTEM FOR APPOINTMENT.—
‘‘(1) ESTABLISHMENT
OF
SYSTEM.—The Secretary shall
establish a competitive system for selecting individuals nomi-
nated under subsection (b) to fill the positions allocated under
subsection (c). The system must determine the relative merit
of each individual based on competitive examinations, an
assessment of the individual’s academic background, and other
effective indicators of motivation and probability of successful
completion of training at the Academy.
‘‘(2) APPOINTMENTS BY JURISDICTION.—The Secretary shall
appoint individuals to fill the positions allocated under sub-
section (c) for each jurisdiction in the order of merit of the
individuals nominated from that jurisdiction.
‘‘(3) REMAINING UNFILLED POSITIONS.—If positions remain
unfilled after the appointments are made under paragraph
(2), the Secretary shall appoint individuals to fill the positions
in the order of merit of the remaining individuals nominated
from all jurisdictions.
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‘‘§ 51303. Non-competitive appointments
‘‘The Secretary of Transportation may appoint each year with-
out competition as cadets at the United States Merchant Marine
Academy not more than 40 qualified individuals with qualities
the Secretary considers to be of special value to the Academy.
In making these appointments, the Secretary shall try to achieve
a national demographic balance at the Academy.
‘‘§ 51304. Additional appointments from particular areas
‘‘(a) OTHER COUNTRIES IN WESTERN HEMISPHERE.—The Presi-
dent may appoint individuals from countries in the Western Hemi-
sphere other than the United States to receive instruction at the
United States Merchant Marine Academy. Not more than 12
individuals may receive instruction under this subsection at the
same time, and not more than 2 individuals from the same country
may receive instruction under this subsection at the same time.
‘‘(b) OTHER COUNTRIES GENERALLY.—
‘‘(1) APPOINTMENT.—The Secretary of Transportation, with
the approval of the Secretary of State, may appoint individuals
from countries other than the United States to receive instruc-
tion at the Academy. Not more than 30 individuals may receive
instruction under this subsection at the same time.
‘‘(2) REIMBURSEMENT.—The Secretary of Transportation
shall ensure that the country from which an individual comes
under this subsection will reimburse the Secretary for the
cost (as determined by the Secretary) of the instruction and
allowances received by the individual.
‘‘(c) PANAMA.—
‘‘(1) APPOINTMENT.—The Secretary of Transportation, with
the approval of the Secretary of State, may appoint individuals
from Panama to receive instruction at the Academy. Individuals
appointed under this subsection are in addition to those
appointed under any other provision of this chapter.
‘‘(2) REIMBURSEMENT.—The Secretary of Transportation
shall be reimbursed for the cost (as determined by the Sec-
retary) of the instruction and allowances received by an indi-
vidual appointed under this subsection.
‘‘(d) ALLOWANCES
AND REGULATIONS.—Individuals receiving
instruction under this section are entitled to the same allowances
and are subject to the same regulations on admission, attendance,
discipline, resignation, discharge, dismissal, and graduation, as
cadets at the Academy appointed from the United States.
‘‘§ 51305. Prohibited basis for appointment
‘‘Preference may not be given to an individual for appointment
as a cadet at the United States Merchant Marine Academy because
one or more members of the individual’s immediate family are
alumni of the Academy.
‘‘§ 51306. Cadet commitment agreements
‘‘(a) AGREEMENT REQUIREMENTS.—A citizen of the United States
appointed as a cadet at the United States Merchant Marine
Academy must sign, as a condition of the appointment, an agree-
ment to—
‘‘(1) complete the course of instruction at the Academy;
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‘‘(2) fulfill the requirements for a license as an officer
in the merchant marine of the United States before graduation
from the Academy;
‘‘(3) maintain a valid license as an officer in the merchant
marine of the United States for at least 6 years after graduation
from the Academy, accompanied by the appropriate national
and international endorsements and certification required by
the Coast Guard for service aboard vessels on domestic and
international voyages;
‘‘(4) apply for, and accept if tendered, an appointment as
a commissioned officer in the Naval Reserve (including the
Merchant Marine Reserve, Naval Reserve), the Coast Guard
Reserve, or any other reserve unit of an armed force of the
United States, and, if tendered the appointment, to serve for
at least 6 years after graduation from the Academy;
‘‘(5) serve the foreign and domestic commerce and the
national defense of the United States for at least 5 years
after graduation from the Academy—
‘‘(A) as a merchant marine officer on a documented
vessel or a vessel owned and operated by the United States
Government or by a State;
‘‘(B) as an employee in a United States maritime-
related industry, profession, or marine science (as deter-
mined by the Secretary of Transportation), if the Secretary
determines that service under subparagraph (A) is not
available to the individual;
‘‘(C) as a commissioned officer on active duty in an
armed force of the United States, as a commissioned officer
in the National Oceanic and Atmospheric Administration,
or in other maritime-related Federal employment which
serves the national security interests of the United States,
as determined by the Secretary; or
‘‘(D) by a combination of the service alternatives
referred to in subparagraphs (A)–(C); and
‘‘(6) report to the Secretary on compliance with this sub-
section.
‘‘(b) FAILURE TO COMPLETE COURSE OF INSTRUCTION.—
‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation deter-
mines that an individual who has attended the Academy for
at least 2 years has failed to fulfill the part of the agreement
described in subsection (a)(1), the individual may be ordered
by the Secretary of Defense to serve on active duty in one
of the armed forces of the United States for a period of not
more than 2 years. In cases of hardship as determined by
the Secretary of Transportation, the Secretary of Transportation
may waive this paragraph in whole or in part.
‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is
unable or unwilling to order an individual to serve on active
duty under paragraph (1), or if the Secretary of Transportation
determines that reimbursement of the cost of education pro-
vided would better serve the interests of the United States,
the Secretary of Transportation may recover from the individual
the cost of education provided by the Government.
‘‘(c) FAILURE TO CARRY OUT OTHER REQUIREMENTS.—
‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation deter-
mines that an individual has failed to fulfill any part of the
agreement described in subsection (a)(2)–(6), the individual may
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be ordered to serve on active duty for a period of at least
3 years but not more than the unexpired period (as determined
by the Secretary) of the service required by subsection (a)(5).
The Secretary of Transportation, in consultation with the Sec-
retary of Defense, shall determine in which service the indi-
vidual shall serve. In cases of hardship as determined by the
Secretary of Transportation, the Secretary of Transportation
may waive this paragraph in whole or in part.
‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is
unable or unwilling to order an individual to serve on active
duty under paragraph (1), or if the Secretary of Transportation
determines that reimbursement of the cost of education pro-
vided would better serve the interests of the United States,
the Secretary of Transportation may recover from the individual
the cost of education provided. The Secretary may reduce the
amount to be recovered to reflect partial performance of service
obligations and other factors the Secretary determines merit
a reduction.
‘‘(d) ACTIONS TO RECOVER COST.—To aid in the recovery of
the cost of education provided by the Government under a commit-
ment agreement under this section, the Secretary of Transportation
may—
‘‘(1) request the Attorney General to bring a civil action
against the individual; and
‘‘(2) make use of the Federal debt collection procedures
in chapter 176 of title 28 or other applicable administrative
remedies.
‘‘§ 51307. Places of training
‘‘The Secretary of Transportation may provide for the training
of cadets at the United States Merchant Marine Academy—
‘‘(1) on vessels owned or subsidized by the United States
Government;
‘‘(2) on other documented vessels, with the permission of
the owner; and
‘‘(3) in shipyards or plants and with industrial or edu-
cational organizations.
‘‘§ 51308. Uniforms, textbooks, and transportation allow-
ances
‘‘The Secretary of Transportation shall provide cadets at the
United States Merchant Marine Academy—
‘‘(1) all required uniforms and textbooks; and
‘‘(2) allowances for transportation (including reimburse-
ment of traveling expenses) when traveling under orders as
a cadet.
‘‘§ 51309. Academic degree
‘‘(a) BACHELOR’S DEGREE.—
‘‘(1) IN GENERAL.—The Superintendent of the United States
Merchant Marine Academy may confer the degree of bachelor
of science on an individual who—
‘‘(A) has met the conditions prescribed by the Secretary
of Transportation; and
‘‘(B) if a citizen of the United States, has passed the
examination for a merchant marine officer’s license.
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‘‘(2) EFFECT OF PHYSICAL DISQUALIFICATION.—An individual
not allowed to take the examination for a merchant marine
officer’s license only because of physical disqualification may
not be denied a degree for not taking the examination.
‘‘(b) MASTER’S DEGREE.—The Superintendent of the Academy
may confer a master’s degree on an individual who has met the
conditions prescribed by the Secretary. A master’s degree program
may be funded through non-appropriated funds. To maintain the
appropriate academic standards, the program shall be accredited
by the appropriate accreditation body. The Secretary may prescribe
regulations necessary to administer such a program.
‘‘(c) GRADUATION
NOT
ENTITLEMENT
TO
HOLD
LICENSE.—
Graduation from the Academy does not entitle an individual to
hold a license authorizing service on a merchant vessel.
‘‘§ 51310. Deferment 
of 
service 
obligation 
under 
cadet
commitment agreements
‘‘The Secretary of Transportation may defer the service commit-
ment of an individual under section 51306(a)(5) of this title (as
specified in the cadet commitment agreement) for not more than
2 years if the individual is engaged in a graduate course of study
approved by the Secretary. However, deferment of service as a
commissioned officer under section 51306(a)(5) must be approved
by the Secretary of the military department that has jurisdiction
over the service or by the Secretary of Commerce for service with
the National Oceanic and Atmospheric Administration.
‘‘§ 51311. Midshipman status in the Naval Reserve
‘‘(a) APPLICATION REQUIREMENT.—Before being appointed as
a cadet at the United States Merchant Marine Academy, a citizen
of the United States must agree to apply for midshipman status
in the Naval Reserve (including the Merchant Marine Reserve,
Naval Reserve).
‘‘(b) APPOINTMENT.—
‘‘(1) IN GENERAL.—A citizen of the United States appointed
as a cadet at the Academy shall be appointed by the Secretary
of the Navy as a midshipman in the Naval Reserve (including
the Merchant Marine Reserve, Naval Reserve).
‘‘(2) RIGHTS AND PRIVILEGES.—The Secretary of the Navy
shall provide for cadets of the Academy who are midshipmen
in the United States Naval Reserve to be—
‘‘(A) issued an identification card (referred to as a
‘military ID card’); and
‘‘(B) entitled to all rights and privileges in accordance
with the same eligibility criteria as apply to other members
of the Ready Reserve of the reserve components of the
armed forces.
‘‘(3) COORDINATION.—The Secretary of the Navy shall carry
out paragraphs (1) and (2) in coordination with the Secretary
of Transportation.
‘‘§ 51312. Board of Visitors
‘‘(a) IN GENERAL.—A Board of Visitors to the United States
Merchant Marine Academy shall be established, for a term of 2
years commencing at the beginning of each Congress, to visit the
Academy annually on a date determined by the Secretary of
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Transportation and to make recommendations on the operation
of the Academy.
‘‘(b) APPOINTMENT.—
‘‘(1) IN GENERAL.—The Board shall be composed of—
‘‘(A) 2 Senators appointed by the chairman of the Com-
mittee on Commerce, Science, and Transportation of the
Senate;
‘‘(B) 3 Members of the House of Representatives
appointed by the chairman of the Committee on Armed
Services of the House of Representatives;
‘‘(C) 1 Senator appointed by the Vice President;
‘‘(D) 2 Members of the House of Representatives
appointed by the Speaker of the House of Representatives;
and
‘‘(E) the chairmen of the Committee on Commerce,
Science, and Transportation of the Senate and the Com-
mittee on Armed Services of the House of Representatives,
as ex officio members.
‘‘(2) SUBSTITUTE APPOINTMENT.—If an appointed member
of the Board is unable to visit the Academy as provided in
subsection (a), another individual may be appointed as a sub-
stitute in the manner provided in paragraph (1).
‘‘(c) STAFF.—The chairmen of the Committee on Commerce,
Science, and Transportation of the Senate and the Committee on
Armed Services of the House of Representatives may designate
staff members of their committees to serve without reimbursement
as staff for the Board.
‘‘(d) TRAVEL EXPENSES.—When serving away from home or
regular place of business, a member of the Board or a staff member
designated under subsection (c) shall be allowed travel expenses,
including per diem in lieu of subsistence, as authorized by section
5703 of title 5.
‘‘§ 51313. Advisory Board
‘‘(a) IN GENERAL.—An Advisory Board to the United States
Merchant Marine Academy shall be established to visit the Academy
at least once during each academic year, for the purpose of exam-
ining the course of instruction and management of the Academy
and advising the Maritime Administrator and the Superintendent
of the Academy.
‘‘(b) APPOINTMENT AND TERMS.—The Board shall be composed
of not more than 7 individuals appointed by the Secretary of
Transportation. The individuals must be distinguished in education
and other fields related to the Academy. Members of the Board
shall be appointed for terms of not more than 3 years and may
be reappointed. The Secretary shall designate one of the members
as chairman.
‘‘(c) TRAVEL EXPENSES.—When serving away from home or reg-
ular place of business, a member of the Board shall be allowed
travel expenses, including per diem in lieu of subsistence, as author-
ized by section 5703 of title 5.
‘‘(d) RELATIONSHIP TO OTHER LAW.—The Federal Advisory Com-
mittee Act (5 App. U.S.C.) does not apply to the Board.
‘‘§ 51314. Limitation on charges and fees for attendance
‘‘(a) PROHIBITION.—Except as provided in subsection (b), no
charge or fee for tuition, room, or board for attendance at the
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United States Merchant Marine Academy may be imposed unless
the charge or fee is specifically authorized by a law enacted after
October 5, 1994.
‘‘(b) EXCEPTION.—The prohibition specified in subsection (a)
does not apply with respect to any item or service provided to
cadets for which a charge or fee is imposed as of October 5, 1994.
The Secretary of Transportation shall notify Congress of any change
made by the Academy in the amount of a charge or fee authorized
under this subsection.
‘‘CHAPTER 515—STATE MARITIME ACADEMY SUPPORT
PROGRAM
‘‘Sec.
‘‘51501.
General support program.
‘‘51502.
Detailing of personnel.
‘‘51503.
Regional maritime academies.
‘‘51504.
Use of training vessels.
‘‘51505.
Annual payments for maintenance and support.
‘‘51506.
Conditions to receiving payments and use of vessels.
‘‘51507.
Places of training.
‘‘51508.
Allowances for students.
‘‘51509.
Student incentive payment agreements.
‘‘51510.
Deferment of service obligation under student incentive payment agree-
ments.
‘‘51511.
Midshipman status in the Naval Reserve.
‘‘§ 51501. General support program
‘‘(a) ASSISTANCE
TO STATE MARITIME ACADEMIES.—The Sec-
retary of Transportation shall cooperate with and assist State mari-
time academies in providing instruction to individuals to prepare
them for service in the merchant marine of the United States.
‘‘(b) COURSE DEVELOPMENT.—The Secretary shall provide to
each State maritime academy guidance and assistance in developing
courses on the operation and maintenance of new vessels, on equip-
ment, and on innovations being introduced to the merchant marine
of the United States.
‘‘§ 51502. Detailing of personnel
‘‘At the request of the Governor of a State, the President
may detail, without reimbursement, personnel of the Navy, the
Coast Guard, and the Maritime Service to a State maritime
academy to serve as a superintendent, professor, lecturer, or
instructor at the academy.
‘‘§ 51503. Regional maritime academies
‘‘The Governors of the States cooperating to sponsor a regional
maritime academy shall designate in writing one of those States
to conduct the affairs of that academy. A regional maritime academy
is eligible for assistance from the United States Government on
the same basis as a State maritime academy sponsored by a single
State.
‘‘§ 51504. Use of training vessels
‘‘(a) APPLICATIONS TO USE VESSELS.—The Governor of a State
sponsoring a State maritime academy (or the Governor of the State
designated to conduct the affairs of a regional maritime academy)
may apply in writing to the Secretary of Transportation to obtain
the use of a training vessel for the academy. A vessel provided
under this section remains the property of the United States
Government.
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‘‘(b) GENERAL AUTHORITY.—Subject to subsection (c), the Sec-
retary may provide to a State maritime academy, for use as a
training vessel, a suitable vessel under the control of the Secretary
or made available to the Secretary under subsection (e). If a suitable
vessel is not available, the Secretary may build and provide a
suitable vessel.
‘‘(c) APPROVAL REQUIREMENTS.—The Secretary may provide a
vessel under this section only if—
‘‘(1) an application has been made under subsection (a);
‘‘(2) the State maritime academy satisfies section 51506(a)
of this title; and
‘‘(3) a suitable port will be available for the safe mooring
of the vessel while the academy is using the vessel.
‘‘(d) PREPARATION AND MAINTENANCE.—A vessel provided under
this section shall be—
‘‘(1) repaired, reconditioned, and equipped (with all apparel,
charts, books, and instruments of navigation) as necessary for
use as a training vessel; and
‘‘(2) maintained in good repair by the Secretary.
‘‘(e) AGENCY VESSELS.—An agency may provide to the Secretary,
for use by a State maritime academy, a vessel (including equipment)
that—
‘‘(1) is suitable for training purposes; and
‘‘(2) can be provided without detriment to the service to
which the vessel is assigned.
‘‘(f) FUEL COSTS.—The Secretary may pay to a State maritime
academy the costs of fuel used by a vessel provided under this
section while used for training.
‘‘(g) REMOVING VESSELS FROM SERVICE AND VESSEL SHARING.—
The Secretary may not—
‘‘(1) take a vessel, currently in use as a training vessel
under this section, out of service to implement an alternative
program (including vessel sharing) unless the vessel is
incapable of being maintained in good repair as required by
subsection (d); or
‘‘(2) implement a program requiring a State maritime
academy to share its training vessel with another State mari-
time academy, except with the express consent of Congress.
‘‘§ 51505. Annual payments for maintenance and support
‘‘(a) PAYMENT AGREEMENTS.—The Secretary of Transportation
may make an agreement (effective for not more than 4 years)
with the following academies to provide annual payments to those
academies for their maintenance and support:
‘‘(1) One State maritime academy in each State that satis-
fies section 51506(a) of this title.
‘‘(2) Each regional maritime academy that satisfies section
51506(a) of this title.
‘‘(b) PAYMENTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), an annual pay-
ment to an academy under subsection (a) shall be at least
equal to the amount given to the academy for its maintenance
and support by the State in which it is located, or, for a
regional maritime academy, by all States cooperating to sponsor
the academy.
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‘‘(2) MAXIMUM.—The amount under paragraph (1) may not
be more than $25,000. However, if the academy satisfies section
51506(b) of this title, the amount shall be—
‘‘(A) $100,000 for a State maritime academy; and
‘‘(B) $200,000 for a regional maritime academy.
‘‘§ 51506. Conditions to receiving payments and use of vessels
‘‘(a) GENERAL
CONDITIONS.—As conditions of receiving an
annual payment or the use of a vessel under this chapter, a State
maritime academy must—
‘‘(1) provide courses of instruction on navigation, marine
engineering (including steam and diesel propulsion), the oper-
ation and maintenance of new vessels and equipment, and
innovations being introduced to the merchant marine of the
United States;
‘‘(2) agree in writing to conform to the standards for
courses, training facilities, admissions, and instruction that
the Secretary of Transportation may establish after consultation
with the superintendents of State maritime academies; and
‘‘(3) agree in writing to require, as a condition for gradua-
tion, that each individual who is a citizen of the United States
and who is attending the academy in a merchant marine officer
preparation program pass the examination required for the
issuance of a license under section 7101 of this title.
‘‘(b) ADDITIONAL CONDITION
TO PAYMENTS
OF MORE THAN
$25,000.—As a condition of receiving an annual payment of more
than $25,000 under section 51505 of this title, a State maritime
academy also must agree to admit each year a number of citizens
of the United States who meet its admission requirements and
reside in a State not supporting that academy. The Secretary shall
determine the number of individuals to be admitted by each
academy under this subsection. The number may not be more
than one-third of the total number of individuals attending the
academy at any time.
‘‘§ 51507. Places of training
‘‘The Secretary of Transportation may provide for the training
of students attending a State maritime academy—
‘‘(1) on vessels owned or subsidized by the United States
Government;
‘‘(2) on other documented vessels, with the permission of
the owner; and
‘‘(3) in shipyards or plants and with industrial or edu-
cational organizations.
‘‘§ 51508. Allowances for students
‘‘Under regulations prescribed by the Secretary of Transpor-
tation, a student at a State maritime academy shall receive from
the Secretary allowances for transportation (including reimburse-
ment of traveling expenses) when traveling under orders to receive
training under section 51507 of this title.
‘‘§ 51509. Student incentive payment agreements
‘‘(a) GENERAL AUTHORITY.—If a State maritime academy has
an agreement with the Secretary of Transportation under section
51505 of this title, the Secretary may make an agreement with
a student at the academy who is a citizen of the United States
Regulations.
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to make student incentive payments to the individual. An agree-
ment with a student may not be effective for more than 4 academic
years. The Secretary shall allocate payments under this section
among the various State maritime academies in an equitable
manner.
‘‘(b) PAYMENTS.—Payments under an agreement under this sec-
tion shall be equal to $4,000 each academic year and be paid,
as prescribed by the Secretary, while the individual is attending
the academy. The payments shall be used for uniforms, books,
and subsistence.
‘‘(c) MIDSHIPMAN AND ENLISTED RESERVE STATUS.—An agree-
ment under this section shall require the student to accept mid-
shipman and enlisted reserve status in the Naval Reserve (including
the Merchant Marine Reserve, Naval Reserve) before receiving any
payments under the agreement.
‘‘(d) AGREEMENT REQUIREMENTS.—An agreement under this sec-
tion shall require the student to—
‘‘(1) complete the course of instruction at the academy
the individual is attending;
‘‘(2) take the examination for a license as an officer in
the merchant marine of the United States before graduation
from the academy and fulfill the requirements for such a license
within 3 months after graduation from the academy;
‘‘(3) maintain a valid license as an officer in the merchant
marine of the United States for at least 6 years after graduation
from the academy, accompanied by the appropriate national
and international endorsements and certification required by
the Coast Guard for service aboard vessels on domestic and
international voyages;
‘‘(4) accept, if tendered, an appointment as a commissioned
officer in the Naval Reserve (including the Merchant Marine
Reserve, Naval Reserve), the Coast Guard Reserve, or any
other reserve unit of an armed force of the United States,
and, if tendered the appointment, to serve for at least 6 years
after graduation from the academy;
‘‘(5) serve the foreign and domestic commerce and the
national defense of the United States for at least 3 years
after graduation from the academy—
‘‘(A) as a merchant marine officer on a documented
vessel or a vessel owned and operated by the United States
Government or by a State;
‘‘(B) as an employee in a United States maritime-
related industry, profession, or marine science (as deter-
mined by the Secretary), if the Secretary determines that
service under subparagraph (A) is not available to the
individual;
‘‘(C) as a commissioned officer on active duty in an
armed force of the United States, as a commissioned officer
in the National Oceanic and Atmospheric Administration,
or in other maritime-related Federal employment which
serves the national security interests of the United States,
as determined by the Secretary; or
‘‘(D) by a combination of the service alternatives
referred to in subparagraphs (A)–(C); and
‘‘(6) report to the Secretary on compliance with this sub-
section.
‘‘(e) FAILURE TO COMPLETE COURSE OF INSTRUCTION.—
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‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation deter-
mines that an individual who has accepted the payments
described in subsection (b) for a minimum of 2 academic years
has failed to fulfill the part of the agreement described in
subsection (d)(1), the individual may be ordered by the Sec-
retary of Defense to serve on active duty in the armed forces
of the United States for a period of not more than 2 years.
In cases of hardship as determined by the Secretary of
Transportation, the Secretary of Transportation may waive this
paragraph in whole or in part.
‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is
unable or unwilling to order an individual to serve on active
duty under paragraph (1), or if the Secretary of Transportation
determines that reimbursement of the cost of education pro-
vided would better serve the interests of the United States,
the Secretary of Transportation may recover from the individual
the amount of student incentive payments, plus interest and
attorney fees. The Secretary may reduce the amount to be
recovered to reflect partial performance of service obligations
and other factors the Secretary determines merit a reduction.
‘‘(f) FAILURE TO CARRY OUT OTHER REQUIREMENTS.—
‘‘(1) ACTIVE DUTY.—If the Secretary of Transportation deter-
mines that an individual has failed to fulfill any part of the
agreement described in subsection (d)(2)–(6), the individual may
be ordered to serve on active duty for a period of at least
2 years but not more than the unexpired period (as determined
by the Secretary) of the service required by subsection (d)(5).
The Secretary of Transportation, in consultation with the Sec-
retary of Defense, shall determine in which service the indi-
vidual shall serve. In cases of hardship as determined by the
Secretary of Transportation, the Secretary of Transportation
may waive this paragraph in whole or in part.
‘‘(2) RECOVERY OF COST.—If the Secretary of Defense is
unable or unwilling to order an individual to serve on active
duty under paragraph (1), or if the Secretary of Transportation
determines that reimbursement of the cost of education pro-
vided would better serve the interests of the United States,
the Secretary of Transportation may recover from the individual
the amount of student incentive payments, plus interest and
attorney fees. The Secretary may reduce the amount to be
recovered to reflect partial performance of service obligations
and other factors the Secretary determines merit a reduction.
‘‘(g) ACTIONS TO RECOVER COST.—To aid in the recovery of
the cost of education provided by the Government under a commit-
ment agreement under this section, the Secretary of Transportation
may—
‘‘(1) request the Attorney General to bring a civil action
against the individual; and
‘‘(2) make use of the Federal debt collection procedures
in chapter 176 of title 28 or other applicable administrative
remedies.
‘‘§ 51510. Deferment of service obligation under student
incentive payment agreements
‘‘The Secretary of Transportation may defer the service commit-
ment of an individual under section 51509(d)(5) of this title (as
specified in the agreement under section 51509) for not more than
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2 years if the individual is engaged in a graduate course of study
approved by the Secretary. However, deferment of service as a
commissioned officer on active duty must be approved by the Sec-
retary of the affected military department (or the Secretary of
Commerce, for service with the National Oceanic and Atmospheric
Administration).
‘‘§ 51511. Midshipman status in the Naval Reserve
‘‘A citizen of the United States attending a State maritime
academy may be appointed by the Secretary of the Navy as a
midshipman in the Naval Reserve (including the Merchant Marine
Reserve, Naval Reserve).
‘‘CHAPTER 517—OTHER SUPPORT FOR MERCHANT
MARINE TRAINING
‘‘Sec.
‘‘51701.
United States Maritime Service.
‘‘51702.
Civilian nautical schools.
‘‘51703.
Additional training.
‘‘51704.
Training for maritime oil pollution prevention, response, and clean-up.
‘‘§ 51701. United States Maritime Service
‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation
may establish and maintain a voluntary organization, to be known
as the United States Maritime Service, for the training of citizens
of the United States to serve on merchant vessels of the United
States.
‘‘(b) SPECIFIC AUTHORITY.—The Secretary may—
‘‘(1) determine the number of individuals to be enrolled
for training and reserve purposes in the Service;
‘‘(2) fix the rates of pay and allowances of the individuals
without regard to chapter 51 or subchapter III of chapter 53
of title 5;
‘‘(3) prescribe the course of study and the periods of training
for the Service; and
‘‘(4) prescribe the uniform of the Service and the rules
on providing and wearing the uniform.
‘‘(c) RANKS, GRADES, AND RATINGS.—The ranks, grades, and
ratings for personnel of the Service shall be the same as those
prescribed for personnel of the Coast Guard.
‘‘(d) MEDALS AND AWARDS.—The Secretary may establish and
maintain a medals and awards program to recognize distinguished
service, superior achievement, professional performance, and other
commendable achievement by personnel of the Service.
‘‘§ 51702. Civilian nautical schools
‘‘(a) DEFINITION.—In this section, the term ‘civilian nautical
school’ means a school operated in the United States (except the
United States Merchant Marine Academy, a State maritime
academy, or another school operated by the United States Govern-
ment) that offers instruction to individuals quartered on a vessel
primarily to train them for service in the merchant marine.
‘‘(b) INSPECTION.—Each civilian nautical school is subject to
inspection by the Secretary of Transportation.
‘‘(c) RATING AND CERTIFICATION.—The Secretary may, under
regulations the Secretary may prescribe, provide for the rating
and certification of civilian nautical schools as to the adequacy
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of their course of instruction, the competence of their instructors,
and the suitability of the equipment used in their course of instruc-
tion.
‘‘§ 51703. Additional training
‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation
may provide additional training on maritime subjects to supplement
other training opportunities and make the training available to
the personnel of the merchant marine of the United States and
individuals preparing for a career in the merchant marine of the
United States.
‘‘(b) EQUIPMENT, SUPPLIES, AND CONTRACTS.—The Secretary
may—
‘‘(1) prepare or buy equipment or supplies required for
the additional training; and
‘‘(2) without regard to section 3709 of the Revised Statutes
(41 U.S.C. 5), make contracts for services the Secretary con-
siders necessary to prepare the equipment and supplies and
to supervise and administer the additional training.
‘‘§ 51704. Training for maritime oil pollution prevention,
response, and clean-up
‘‘(a) ASSISTANCE
IN ESTABLISHING PROGRAM.—The Secretary
of Transportation shall assist maritime training institutions
approved by the Secretary in establishing a training program for
maritime oil pollution prevention, response, and clean-up.
‘‘(b) PROVIDING TRAINING VESSELS.—Subject to subsection (c),
the Secretary may provide, with title free of all liens, to maritime
training institutions that have a program established under sub-
section (a), offshore supply vessels and tug/supply vessels that
were built in the United States and are in the possession of the
Maritime Administration because of a default on a loan guaranteed
under chapter 537 of this title.
‘‘(c) REQUIREMENTS.—In addition to any other requirements
the Secretary considers appropriate, the following requirements
apply to vessels provided under this section:
‘‘(1) The vessel shall be offered to the institution at a
location selected by the Secretary.
‘‘(2) The institution shall use the vessel to train students
and appropriate maritime industry personnel in oil spill preven-
tion, response, clean-up, and related skills.
‘‘(3) The institution shall make the vessel and qualified
students available to appropriate Federal, State, and local oil
spill response authorities when there is a maritime oil spill.
‘‘(4) The institution may not sell, trade, charter, donate,
scrap, or in any way alter or dispose of the vessel without
prior approval of the Secretary.
‘‘(5) The institution may not use the vessel in competition
with a privately-owned vessel documented under chapter 121
of this title or titled under the law of a State, unless necessary
to carry out this section.
‘‘(6) When the institution can no longer use the vessel
for its training program, the institution shall return the vessel
to the Secretary. The Secretary shall take possession at the
institution and thereafter may provide the vessel to another
institution under this section or dispose of the vessel.
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‘‘CHAPTER 519—MERCHANT MARINE AWARDS
‘‘Sec.
‘‘51901.
Awards for individual acts or service.
‘‘51902.
Gallant Ship Award.
‘‘51903.
Multiple awards.
‘‘51904.
Presentation to representatives.
‘‘51905.
Flags and grave markers.
‘‘51906.
Special certificates for civilian service to armed forces.
‘‘51907.
Manufacture and sale of awards and replacements.
‘‘51908.
Prohibition against unauthorized manufacture, sale, possession, or display
of awards.
‘‘§ 51901. Awards for individual acts or service
‘‘(a) GENERAL AUTHORITY.—The Secretary of Transportation
may award decorations and medals of appropriate design (including
ribbons, ribbon bars, emblems, rosettes, miniature facsimiles,
plaques, citations, or other suitable devices or insignia) for indi-
vidual acts or service in the merchant marine of the United States.
The design may be similar to the design of a decoration or medal
authorized for members of the armed forces for similar acts or
service.
‘‘(b) SPECIFIC AUTHORITY.—The Secretary may award—
‘‘(1) a Merchant Marine Distinguished Service Medal to
an individual for outstanding acts, conduct, or valor beyond
the line of duty;
‘‘(2) a Merchant Marine Meritorious Service Medal to an
individual for meritorious acts, conduct, or valor in the line
of duty, but not of the outstanding character that would warrant
the award of the Merchant Marine Distinguished Service
Medal;
‘‘(3) a decoration or medal to an individual for service
during a war, national emergency proclaimed by the President
or Congress, or operations by the armed forces outside the
continental United States under conditions of danger to life
and property; and
‘‘(4) a decoration or medal to an individual for other acts
or service of conspicuous gallantry, intrepidity, and extraor-
dinary heroism under conditions of danger to life and property
that would warrant a similar decoration or medal for a member
of the armed forces.
‘‘§ 51902. Gallant Ship Award
‘‘(a) AWARDS
TO VESSELS.—The Secretary of Transportation
may award a Gallant Ship Award and a citation to a vessel
(including a foreign vessel) participating in outstanding or gallant
action in a marine disaster or other emergency to save life or
property at sea. The Secretary may award a plaque to the vessel,
and a replica of the plaque may be preserved as a permanent
historical record.
‘‘(b) AWARDS TO CREWS.—The Secretary of Transportation may
award an appropriate citation ribbon bar to the master and each
individual serving, at the time of the action, on a vessel issued
an award under subsection (a).
‘‘(c) CONSULTATION.—The Secretary of Transportation shall con-
sult with the Secretary of State before awarding an award or
citation to a foreign vessel or its crew under this section.
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‘‘§ 51903. Multiple awards
‘‘An individual may not be awarded more than one of any
type of decoration or medal under this chapter. For each succeeding
act or service justifying the same decoration or medal, a suitable
device may be awarded to be worn with the decoration or medal.
‘‘§ 51904. Presentation to representatives
‘‘If an individual to be issued an award under this chapter
is unable to accept the award personally, the Secretary of Transpor-
tation may present the award to an appropriate representative.
‘‘§ 51905. Flags and grave markers
‘‘Except as authorized under another law, the Secretary of
Transportation may issue, at no cost, a flag of the United States
and a grave marker to the family or personal representative of
a deceased individual who served in the merchant marine of the
United States in support of the armed forces of the United States
or its allies during a war or national emergency.
‘‘§ 51906. Special certificates for civilian service to armed
forces
‘‘(a) GENERAL AUTHORITY.—The Maritime Administrator may
issue a special certificate to an individual, or the personal represent-
ative of an individual, in recognition of service of that individual
in the merchant marine of the United States, if the service has
been determined to be active duty under section 401 of the GI
Bill Improvement Act of 1977 (Public Law 95–202; 38 U.S.C. 106
note).
‘‘(b) RELATIONSHIP TO OTHER LAWS.—Issuance of a certificate
under subsection (a) does not entitle an individual to any rights,
privileges, or benefits under a law of the United States.
‘‘§ 51907. Manufacture and sale of awards and replacements
‘‘The Secretary of Transportation may—
‘‘(1) authorize private persons to manufacture decorations
and medals authorized under this chapter or a prior law; and
‘‘(2) provide at cost, or authorize private persons to sell
at reasonable prices, replacements for those decorations and
medals.
‘‘§ 51908. Prohibition against unauthorized manufacture,
sale, possession, or display of awards
‘‘(a) PROHIBITION.—Except as authorized under this chapter,
a person may not manufacture, sell, possess, or display a decoration
or medal provided for in this chapter.
‘‘(b) CIVIL PENALTY.—A person violating this section is liable
to the United States Government for a civil penalty of not more
than $2,000.
‘‘CHAPTER 521—MISCELLANEOUS
‘‘Sec.
‘‘52101.
Reemployment rights for certain merchant seamen.
‘‘§ 52101. Reemployment rights for certain merchant seamen
‘‘(a) IN GENERAL.—An individual who is certified by the Sec-
retary of Transportation under subsection (c) shall be entitled to
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reemployment rights and other benefits substantially equivalent
to the rights and benefits provided for by chapter 43 of title 38
for any member of a reserve component of the armed forces of
the United States who is ordered to active duty.
‘‘(b) TIME
FOR APPLICATION.—An individual may submit an
application for certification under subsection (c) to the Secretary
not later than 45 days after the date the individual completes
a period of employment described in subsection (c)(1)(A) with respect
to which the application is submitted.
‘‘(c) CERTIFICATION DETERMINATION.—Not later than 20 days
after the date the Secretary receives from an individual an applica-
tion for certification under this subsection, the Secretary shall—
‘‘(1) determine whether the individual—
‘‘(A) was employed in the activation or operation of
a vessel—
‘‘(i) in the National Defense Reserve Fleet main-
tained under section 11 of the Merchant Ship Sales
Act of 1946 (50 App. U.S.C. 1744) in a period in which
the vessel was in use or being activated for use under
subsection (b) of that section;
‘‘(ii) requisitioned or purchased under chapter 563
of this title; or
‘‘(iii) owned, chartered, or controlled by the United
States Government and used by the Government for
a war, armed conflict, national emergency, or maritime
mobilization need (including for training purposes or
testing for readiness and suitability for mission
performance); and
‘‘(B) during the period of that employment, possessed
a valid license, certificate of registry, or merchant mariner’s
document issued under chapter 71 or 73 of this title; and
‘‘(2) if the Secretary makes affirmative determinations
under subparagraphs (A) and (B) of paragraph (1), certify that
individual under this subsection.
‘‘(d) EQUIVALENCE TO MILITARY SELECTIVE SERVICE ACT CER-
TIFICATE.—For purposes of reemployment rights and benefits pro-
vided by this section, a certification under subsection (c) shall
be considered to be the equivalent of a certificate described in
section 9(a) of the Military Selective Service Act (50 App. U.S.C.
459(a)).
‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS’’.
(c) CHAPTERS FOLLOWING CHAPTER 531.—Subtitle V of title
46, United States Code, is amended by adding at the end the
following:
‘‘CHAPTER 533—CONSTRUCTION RESERVE FUNDS
‘‘Sec.
‘‘53301.
Definitions.
‘‘53302.
Authority for construction reserve funds.
‘‘53303.
Persons eligible to establish funds.
‘‘53304.
Vessel ownership.
‘‘53305.
Eligible fund deposits.
‘‘53306.
Recognition of gain for tax purposes.
‘‘53307.
Basis for determining gain or loss and for depreciating new vessels.
‘‘53308.
Order and proportions of deposits and withdrawals.
‘‘53309.
Accumulation of deposits.
‘‘53310.
Obligation of deposits and period for construction of certain vessels.
Deadline.
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‘‘53311.
Taxation of deposits on failure of conditions.
‘‘53312.
Assessment and collection of deficiency tax.
‘‘§ 53301. Definitions
‘‘(a) IN GENERAL.—In this chapter:
‘‘(1) CONSTRUCTION CONTRACT.—The term ‘construction con-
tract’ includes, for a taxpayer constructing a new vessel in
a shipyard owned by that taxpayer, an agreement between
the taxpayer and the Secretary of Transportation for that
construction containing provisions the Secretary considers
advisable to carry out this chapter.
‘‘(2) NEW VESSEL.—The term ‘new vessel’ means—
‘‘(A) a vessel—
‘‘(i) constructed in the United States after
December 31, 1939, constructed with a construction-
differential subsidy under title V of the Merchant
Marine Act, 1936, or constructed with financing or
a financing guarantee under chapter 537 or 575 of
this title;
‘‘(ii) documented or agreed with the Secretary to
be documented under the laws of the United States;
and
‘‘(iii)(I) of a type, size, and speed that the Secretary
determines is suitable for use on the high seas or
Great Lakes in carrying out this subtitle, but not less
than 2,000 gross tons or less than 12 knots speed
unless the Secretary certifies in each case that a vessel
of lesser tonnage or speed is desirable for use by the
United States Government in case of war or national
emergency; or
‘‘(II) constructed to replace a vessel bought or
requisitioned by the Government; and
‘‘(B) a vessel reconstructed or reconditioned for use
only on the Great Lakes, including the Saint Lawrence
River and Gulf, if the Secretary finds that the reconstruc-
tion or reconditioning will promote the objectives of this
subtitle.
‘‘(b) ADDITIONAL TAX-RELATED TERMS.—Other terms used in
this chapter have the same meaning as in chapter 1 of the Internal
Revenue Code of 1986 (26 U.S.C. ch. 1).
‘‘§ 53302. Authority for construction reserve funds
‘‘(a) GENERAL AUTHORITY.—An eligible person under section
53303 of this title may establish a construction reserve fund for
the construction, reconstruction, reconditioning, or acquisition of
a new vessel or for other purposes authorized by this chapter.
‘‘(b) APPLICATION OF CERTAIN LAWS AND REGULATIONS.—The
fund shall be established, maintained, expended, and used as pro-
vided by this chapter and regulations prescribed jointly by the
Secretary of Transportation and the Secretary of the Treasury.
‘‘§ 53303. Persons eligible to establish funds
‘‘A construction reserve fund may be established by a citizen
of the United States that—
‘‘(1) is operating a vessel in the foreign or domestic com-
merce of the United States or in the fisheries;
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‘‘(2) owns, in whole or in part, a vessel being operated
in the foreign or domestic commerce of the United States or
in the fisheries;
‘‘(3) was operating a vessel in the foreign or domestic
commerce of the United States or in the fisheries when it
was bought or requisitioned by the United States Government;
‘‘(4) owned, in whole or in part, a vessel being operated
in the foreign or domestic commerce of the United States or
in the fisheries when it was bought or requisitioned by the
Government; or
‘‘(5) had acquired or was having constructed a vessel to
operate in the foreign or domestic commerce of the United
States or in the fisheries when it was bought or requisitioned
by the Government.
‘‘§ 53304. Vessel ownership
‘‘In this chapter, a vessel is deemed to be constructed or
acquired by a taxpayer if constructed or acquired by a corporation
when the taxpayer owns at least 95 percent of each class of stock
of the corporation.
‘‘§ 53305. Eligible fund deposits
‘‘A construction reserve fund may include deposits of—
‘‘(1) the proceeds from the sale of a vessel;
‘‘(2) indemnities for the loss of a vessel;
‘‘(3) earnings from the operation of a documented vessel
and from services incident to the operation; and
‘‘(4) interest or other amounts accrued on deposits in the
fund.
‘‘§ 53306. Recognition of gain for tax purposes
‘‘(a) DEFINITIONS.—In this section, the terms ‘net proceeds’ and
‘net indemnity’ mean the sum of—
‘‘(1) the adjusted basis of the vessel; and
‘‘(2) the amount of gain the taxpayer would recognize with-
out regard to this section.
‘‘(b) RECOGNITION OF GAIN.—In computing net income under
the income or excess profits tax laws of the United States, a tax-
payer does not recognize a gain on the sale or the actual or construc-
tive total loss of a vessel if the taxpayer—
‘‘(1) deposits an amount equal to the net proceeds of the
sale or the net indemnity for the loss in a construction reserve
fund within 60 days after receiving the payment of proceeds
or indemnity; and
‘‘(2) elects under this section not to recognize the gain.
‘‘(c) WHEN ELECTION MUST BE MADE.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the taxpayer must make the election referred to in subsection
(b) in the taxpayer’s income tax return for the taxable year
in which the gain was realized.
‘‘(2) RECEIPT AFTER TAXABLE YEAR.—If the vessel is bought
or requisitioned by the United States Government, or is lost,
and the taxpayer receives payment for the vessel or indemnity
for the loss from the Government after the end of the taxable
year in which it was bought, requisitioned, or lost, the taxpayer
must make the election referred to in subsection (b) within
Deadline.
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60 days after receiving the payment or indemnity, on a form
prescribed by the Secretary of the Treasury.
‘‘(d) EFFECT OF STATUTE OF LIMITATION.—If the taxpayer makes
an election under subsection (c)(2), and computation or recomputa-
tion under this section is otherwise allowable but is prevented
by a statute of limitation on the date the election is made or
within 6 months thereafter, the computation or recomputation
nevertheless shall be made notwithstanding the statute if the tax-
payer files a claim for the computation or recomputation within
6 months after the date of making the election.
‘‘§ 53307. Basis for determining gain or loss and for depre-
ciating new vessels
‘‘Under the income or excess profits tax laws of the United
States, the basis for determining a gain or loss and for depreciation
of a new vessel constructed, reconstructed, reconditioned, or
acquired by the taxpayer, or for which purchase-money indebtedness
is liquidated as provided in section 53310 of this title, with amounts
from a construction reserve fund, shall be reduced by that part
of the deposits in the fund expended in the construction, reconstruc-
tion, reconditioning, acquisition, or liquidation of purchase-money
indebtedness of the new vessel that represents a gain not recognized
for tax purposes under section 53306 of this title.
‘‘§ 53308. Order and proportions of deposits and withdrawals
‘‘In this chapter—
‘‘(1) if the net proceeds of a sale or the net indemnity
for a loss is deposited in more than one deposit, the amount
consisting of the gain shall be deemed to be deposited first;
‘‘(2) amounts expended, obligated, or otherwise withdrawn
shall be applied against the amounts deposited in the fund
in the order of deposit; and
‘‘(3) if a deposit consists in part of a gain not recognized
under section 53306 of this title, any expenditure, obligation,
or withdrawal applied against that deposit shall be deemed
to be a gain in the proportion that the part of the deposit
consisting of a gain bears to the total amount of the deposit.
‘‘§ 53309. Accumulation of deposits
‘‘For any taxable year, amounts on deposit in a construction
reserve fund on the last day of the taxable year, for which the
requirements of section 53310 of this title have been satisfied (to
the extent they apply on the last day of the taxable year), are
deemed to have been retained for the reasonable needs of the
business within the meaning of section 537(a) of the Internal Rev-
enue Code of 1986 (26 U.S.C. 537(a)).
‘‘§ 53310. Obligation of deposits and period for construction
of certain vessels
‘‘(a) APPLICATION
OF SECTIONS 53306 AND 53309.—Sections
53306 and 53309 of this title apply to a deposit in a construction
reserve fund only if, within 3 years after the date of the deposit
(and any extension under subsection (c))—
‘‘(1)(A) a contract is made for the construction or acquisition
of a new vessel or, with the approval of the Secretary of
Transportation, for a part interest in a new vessel or for the
reconstruction or reconditioning of a new vessel;
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‘‘(B) the deposit is expended or obligated for expenditure
under that contract;
‘‘(C) at least 12.5 percent of the construction or contract
price of the vessel is paid or irrevocably committed for payment;
and
‘‘(D) the plans and specifications for the vessel are approved
by the Secretary to the extent the Secretary considers nec-
essary; or
‘‘(2) the deposit is expended or obligated for expenditure
for the liquidation of existing or subsequently incurred pur-
chase-money indebtedness to a person not a parent company
of, or a company affiliated or associated with, the mortgagor
on a new vessel.
‘‘(b) ADDITIONAL REQUIREMENTS
FOR CERTAIN VESSELS.—In
addition to the requirements of subsection (a)(1), for a vessel not
constructed under a construction-differential subsidy contract or
not bought from the Secretary of Transportation—
‘‘(1) at least 5 percent of the construction (or, if the contract
covers more than one vessel, at least 5 percent of the construc-
tion of the first vessel) must be completed within 6 months
after the date of the construction contract (or within the period
of an extension under subsection (c)), as estimated by the
Secretary and certified by the Secretary to the Secretary of
the Treasury; and
‘‘(2) construction under the contract must be completed
with reasonable dispatch thereafter.
‘‘(c) EXTENSIONS.—The Secretary of Transportation may grant
extensions of the period within which the deposits must be expended
or obligated or within which the construction must have progressed
to the extent of 5 percent completion under this section. However,
the extensions may not be for a total of more than 2 years for
the expenditure or obligation of deposits or one year for the progress
of construction.
‘‘§ 53311. Taxation of deposits on failure of conditions
‘‘A deposited gain, if otherwise taxable income under the law
applicable to the taxable year in which the gain was realized,
shall be included in gross income for that taxable year, except
for purposes of the declared value excess profits tax and the capital
stock tax, if—
‘‘(1) the deposited gain is not expended or obligated within
the appropriate period under section 53310 of this title;
‘‘(2) the deposited gain is withdrawn before the end of
that period;
‘‘(3) the construction related to that deposited gain has
not progressed to the extent of 5 percent of completion within
the appropriate period under section 53310 of this title; or
‘‘(4) the Secretary of Transportation finds and certifies to
the Secretary of the Treasury that, for causes within the control
of the taxpayer, the entire construction related to that deposited
gain is not completed with reasonable dispatch.
‘‘§ 53312. Assessment and collection of deficiency tax
‘‘Notwithstanding any other provision of law, a deficiency in
tax for a taxable year resulting from the inclusion of an amount
in gross income as provided by section 53311 of this title, and
the amount to be treated as a deficiency under section 53311
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instead of as an adjustment for the declared value excess profits
tax, may be assessed or a civil action may be brought to collect
the deficiency without assessment, at any time. Interest on a defi-
ciency or amount to be treated as a deficiency does not begin
until the date the deposited gain or part of the deposited gain
in question is required to be included in gross income under section
51111.
‘‘CHAPTER 535—CAPITAL CONSTRUCTION FUNDS
‘‘Sec.
‘‘53501.
Definitions.
‘‘53502.
Regulations.
‘‘53503.
Establishing a capital construction fund.
‘‘53504.
Deposits and withdrawals.
‘‘53505.
Ceiling on deposits.
‘‘53506.
Investment and fiduciary requirements.
‘‘53507.
Nontaxation of deposits.
‘‘53508.
Separate accounts within a fund.
‘‘53509.
Qualified withdrawals.
‘‘53510.
Tax treatment of qualified withdrawals and basis of property.
‘‘53511.
Tax treatment of nonqualified withdrawals.
‘‘53512.
FIFO and LIFO withdrawals.
‘‘53513.
Corporate reorganizations and partnership changes.
‘‘53514.
Relationship of old fund to new fund.
‘‘53515.
Records and reports.
‘‘53516.
Termination of agreement after change in regulations.
‘‘53517.
Reports.
‘‘§ 53501. Definitions
‘‘In this chapter:
‘‘(1) AGREEMENT
VESSEL.—The term ‘agreement vessel’
means—
‘‘(A) an eligible vessel or a qualified vessel that is
subject to an agreement under this chapter; and
‘‘(B) a barge or container that is part of the complement
of a vessel described in subparagraph (A) if provided for
in the agreement.
‘‘(2) ELIGIBLE VESSEL.—The term ‘eligible vessel’ means—
‘‘(A) a vessel—
‘‘(i) constructed in the United States (and, if
reconstructed, reconstructed in the United States), con-
structed outside the United States but documented
under the laws of the United States on April 15, 1970,
or constructed outside the United States for use in
the United States foreign trade pursuant to a contract
made before April 15, 1970;
‘‘(ii) documented under the laws of the United
States; and
‘‘(iii) operated in the foreign or domestic trade
of the United States or in the fisheries of the United
States; and
‘‘(B) a commercial fishing vessel—
‘‘(i) constructed in the United States and, if
reconstructed, reconstructed in the United States;
‘‘(ii) of at least 2 net tons but less than 5 net
tons;
‘‘(iii) owned by a citizen of the United States;
‘‘(iv) having its home port in the United States;
and
‘‘(v) operated in the commercial fisheries of the
United States.
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‘‘(3) JOINT
REGULATIONS.—The term ‘joint regulations’
means regulations prescribed jointly by the Secretary and the
Secretary of the Treasury under section 53502(b) of this title.
‘‘(4) NONCONTIGUOUS
TRADE.—The term ‘noncontiguous
trade’ means—
‘‘(A) trade between—
‘‘(i) one of the contiguous 48 States; and
‘‘(ii) Alaska, Hawaii, Puerto Rico, or an insular
territory or possession of the United States; and
‘‘(B) trade between—
‘‘(i) a place in Alaska, Hawaii, Puerto Rico, or
an insular territory or possession of the United States;
and
‘‘(ii) another place in Alaska, Hawaii, Puerto Rico,
or an insular territory or possession of the United
States.
‘‘(5) 
QUALIFIED
VESSEL.—The 
term 
‘qualified 
vessel’
means—
‘‘(A) a vessel—
‘‘(i) constructed in the United States (and, if
reconstructed, reconstructed in the United States), con-
structed outside the United States but documented
under the laws of the United States on April 15, 1970,
or constructed outside the United States for use in
the United States foreign trade pursuant to a contract
made before April 15, 1970;
‘‘(ii) documented under the laws of the United
States; and
‘‘(iii) agreed, between the Secretary and the person
maintaining the capital construction fund established
under section 53503 of this title, to be operated in
the United States foreign, Great Lakes, or noncontig-
uous domestic trade or in the fisheries of the United
States; and
‘‘(B) a commercial fishing vessel—
‘‘(i) constructed in the United States and, if
reconstructed, reconstructed in the United States;
‘‘(ii) of at least 2 net tons but less than 5 net
tons;
‘‘(iii) owned by a citizen of the United States;
‘‘(iv) having its home port in the United States;
and
‘‘(v) operated in the commercial fisheries of the
United States.
‘‘(6) SECRETARY.—The term ‘Secretary’ means—
‘‘(A) the Secretary of Commerce with respect to an
eligible vessel or a qualified vessel operated or to be oper-
ated in the fisheries of the United States; and
‘‘(B) the Secretary of Transportation with respect to
other vessels.
‘‘(7) UNITED
STATES
FOREIGN
TRADE.—The term ‘United
States foreign trade’ includes those areas in domestic trade
in which a vessel built with a construction-differential subsidy
is allowed to operate under the first sentence of section 506
of the Merchant Marine Act, 1936.
‘‘(8) VESSEL.—The term ‘vessel’ includes—
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‘‘(A) cargo handling equipment that the Secretary
determines is intended for use primarily on the vessel;
and
‘‘(B) an ocean-going towing vessel, an ocean-going
barge, or a comparable towing vessel or barge operated
on the Great Lakes.
‘‘§ 53502. Regulations
‘‘(a) IN GENERAL.—Except as provided in subsection (b), the
Secretary shall prescribe regulations to carry out this chapter.
‘‘(b) TAX LIABILITY.—The Secretary and the Secretary of the
Treasury shall prescribe joint regulations for the determination
of tax liability under this chapter.
‘‘§ 53503. Establishing a capital construction fund
‘‘(a) IN GENERAL.—A citizen of the United States owning or
leasing an eligible vessel may make an agreement with the Sec-
retary under this chapter to establish a capital construction fund
for the vessel.
‘‘(b) ALLOWABLE PURPOSE.—The purpose of the agreement shall
be 
to 
provide 
replacement 
vessels, 
additional 
vessels, 
or
reconstructed vessels, built in the United States and documented
under the laws of the United States, for operation in the United
States foreign, Great Lakes, or noncontiguous domestic trade or
in the fisheries of the United States.
‘‘§ 53504. Deposits and withdrawals
‘‘(a) REQUIRED DEPOSITS.—An agreement to establish a capital
construction fund shall provide for the deposit in the fund of the
amounts agreed to be appropriate to provide for qualified with-
drawals under section 53509 of this title.
‘‘(b) APPLICABLE REQUIREMENTS.—Deposits in and withdrawals
from the fund are subject to the requirements included in the
agreement or prescribed by the Secretary by regulation. However,
the Secretary may not require a person to deposit in the fund
for a taxable year more than 50 percent of that portion of the
person’s taxable income for that year (as determined under section
53505(a)(1) of this title) that is attributable to the operation of
an agreement vessel.
‘‘§ 53505. Ceiling on deposits
‘‘(a) MAXIMUM DEPOSITS.—The amount deposited in a capital
construction fund for a taxable year may not exceed the sum of—
‘‘(1) that portion of the taxable income of the owner or
lessee for the taxable year (computed under chapter 1 of the
Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without
regard to the carryback of net operating loss or net capital
loss or this chapter) that is attributable to the operation of
agreement vessels in the foreign or domestic trade of the United
States or in the fisheries of the United States;
‘‘(2) the amount allowable as a deduction under section
167 of such Code (26 U.S.C. 167) for the taxable year for
agreement vessels;
‘‘(3) if the transaction is not taken into account for purposes
of paragraph (1), the net proceeds (as defined in joint regula-
tions) from the disposition of an agreement vessel or from
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insurance or indemnity attributable to an agreement vessel;
and
‘‘(4) the receipts from the investment or reinvestment of
amounts held in the fund.
‘‘(b) REDUCTIONS FOR LESSEES.—For a lessee, the maximum
amount that may be deposited for an agreement vessel under sub-
section (a)(2) for any period shall be reduced by any amount the
owner is required or permitted, under the capital construction fund
agreement, to deposit for that period for the vessel under subsection
(a)(2).
‘‘§ 53506. Investment and fiduciary requirements
‘‘(a) IN GENERAL.—Amounts in a capital construction fund shall
be kept in the depository specified in the agreement and shall
be subject to trustee and other fiduciary requirements prescribed
by the Secretary. Except as provided in subsection (b), amounts
in the fund may be invested only in interest-bearing securities
approved by the Secretary.
‘‘(b) STOCK INVESTMENTS.—
‘‘(1) IN GENERAL.—With the approval of the Secretary, an
agreed percentage (but not more than 60 percent) of the assets
of the fund may be invested in the stock of domestic corpora-
tions that—
‘‘(A) is fully listed and registered on an exchange reg-
istered with the Securities and Exchange Commission as
a national securities exchange; and
‘‘(B) would be acquired by a prudent investor seeking
a reasonable income and the preservation of capital.
‘‘(2) PREFERRED STOCK.—The preferred stock of a corpora-
tion is deemed to satisfy the requirements of this subsection,
even though it may not be registered and listed because it
is nonvoting stock, if the common stock of the corporation
satisfies the requirements and the preferred stock otherwise
would satisfy the requirements.
‘‘(c) MAINTAINING AGREED PERCENTAGE.—If at any time the
fair market value of the stock in the fund is more than the agreed
percentage of the assets in the fund, any subsequent investment
of amounts deposited in the fund, and any subsequent withdrawal
from the fund, shall be made in a way that tends to restore the
fair market value of the stock to not more than the agreed percent-
age.
‘‘§ 53507. Nontaxation of deposits
‘‘(a) TAX TREATMENT.—Subject to subsection (b), under the
Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)—
‘‘(1) taxable income (determined without regard to this
chapter and section 7518 of such Code (26 U.S.C. 7518)) for
the taxable year shall be reduced by the amount deposited
for the taxable year out of amounts referred to in section
53505(a)(1) of this title;
‘‘(2) a gain from a transaction referred to in section
53505(a)(3) of this title shall not be taken into account if
an amount equal to the net proceeds (as defined in joint regula-
tions) from the transaction is deposited in the fund;
‘‘(3) the earnings (including gains and losses) from the
investment and reinvestment of amounts held in the fund shall
not be taken into account;
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‘‘(4) the earnings and profits of a corporation (within the
meaning of section 316 of such Code (26 U.S.C. 316)) shall
be determined without regard to this chapter and section 7518
of such Code (26 U.S.C. 7518); and
‘‘(5) in applying the tax imposed by section 531 of such
Code (26 U.S.C. 531), amounts held in the fund shall not
be taken into account.
‘‘(b) CONDITION.—This section applies to an amount only if
the amount is deposited in the fund under the agreement within
the time provided in joint regulations.
‘‘§ 53508. Separate accounts within a fund
‘‘(a) IN GENERAL.—A capital construction fund shall have three
accounts:
‘‘(1) The capital account.
‘‘(2) The capital gain account.
‘‘(3) The ordinary income account.
‘‘(b) CAPITAL ACCOUNT.—The capital account shall consist of—
‘‘(1) amounts referred to in section 53505(a)(2) of this title;
‘‘(2) amounts referred to in section 53505(a)(3) of this title,
except that portion representing a gain not taken into account
because of section 53507(a)(2) of this title;
‘‘(3) the percentage applicable under section 243(a)(1) of
the Internal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of
any dividend received by the fund for which the person
maintaining the fund would be allowed (were it not for section
53507(a)(3) of this title) a deduction under section 243 of such
Code (26 U.S.C. 243); and
‘‘(4) interest income exempt from taxation under section
103 of such Code (26 U.S.C. 103).
‘‘(c) CAPITAL GAIN ACCOUNT.—The capital gain account shall
consist of—
‘‘(1) amounts representing capital gains on assets held for
more than 6 months and referred to in section 53505(a)(3)
or (4) of this title; minus
‘‘(2) amounts representing capital losses on assets held
in the fund for more than 6 months.
‘‘(d) ORDINARY INCOME ACCOUNT.—The ordinary income account
shall consist of—
‘‘(1) amounts referred to in section 53505(a)(1) of this title;
‘‘(2)(A) amounts representing capital gains on assets held
for not more than 6 months and referred to in section
53505(a)(3) or (4) of this title; minus
‘‘(B) amounts representing capital losses on assets held
in the fund for not more than 6 months;
‘‘(3) interest (except tax-exempt interest referred to in sub-
section (b)(4)) and other ordinary income (except any dividend
referred to in paragraph (5)) received on assets held in the
fund;
‘‘(4) ordinary income from a transaction described in section
53505(a)(3) of this title; and
‘‘(5) that portion of any dividend referred to in subsection
(b)(3) not taken into account under subsection (b)(3).
‘‘(e) WHEN LOSSES ALLOWED.—Except on termination of a fund,
capital losses referred to in subsection (c) or (d)(2) shall be allowed
only as an offset to gains referred to in subsection (c) or (d)(2),
respectively.
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‘‘§ 53509. Qualified withdrawals
‘‘(a) IN GENERAL.—Subject to subsection (b), a withdrawal from
a capital construction fund is a qualified withdrawal if it is made
under the terms of the agreement and is for—
‘‘(1) the acquisition, construction, or reconstruction of a
qualified vessel or a barge or container that is part of the
complement of a qualified vessel; or
‘‘(2) the payment of the principal on indebtedness incurred
in the acquisition, construction, or reconstruction of a qualified
vessel or a barge or container that is part of the complement
of a qualified vessel.
‘‘(b) BARGES AND CONTAINERS.—Except as provided in regula-
tions prescribed by the Secretary, subsection (a) applies to a barge
or container only if it is constructed in the United States.
‘‘(c) TREATMENT AS NONQUALIFIED WITHDRAWAL.—Under joint
regulations, if the Secretary determines that a substantial obliga-
tion under an agreement is not being fulfilled, the Secretary, after
notice and opportunity for a hearing to the person maintaining
the fund, may treat any amount in the fund as an amount with-
drawn from the fund in a nonqualified withdrawal.
‘‘§ 53510. Tax treatment of qualified withdrawals and basis
of property
‘‘(a) ORDER OF WITHDRAWALS.—A qualified withdrawal from
a capital construction fund shall be treated as made—
‘‘(1) first from the capital account;
‘‘(2) second from the capital gain account; and
‘‘(3) third from the ordinary income account.
‘‘(b) ORDINARY INCOME ACCOUNT WITHDRAWALS.—If a portion
of a qualified withdrawal for a vessel, barge, or container is made
from the ordinary income account, the basis of the vessel, barge,
or container shall be reduced by an amount equal to that portion.
‘‘(c) CAPITAL GAIN ACCOUNT WITHDRAWALS.—If a portion of
a qualified withdrawal for a vessel, barge, or container is made
from the capital gain account, the basis of the vessel, barge, or
container shall be reduced by an amount equal to that portion.
‘‘(d) WITHDRAWALS TO PAY PRINCIPAL.—If a portion of a quali-
fied withdrawal to pay the principal on indebtedness is made from
the ordinary income account or the capital gain account, an amount
equal to the total reduction that would be required by subsections
(b) and (c) if the withdrawal were a qualified withdrawal for a
purpose described in those subsections shall be applied, in the
order provided in joint regulations, to reduce the basis of vessels,
barges, and containers owned by the person maintaining the fund.
The remaining amount of the withdrawal shall be treated as a
nonqualified withdrawal.
‘‘(e) GAIN ON PROPERTY WITH REDUCED BASIS.—If property,
the basis of which was reduced under subsection (b), (c), or (d),
is disposed of, any gain realized on the disposition, to the extent
it does not exceed the total reduction in the basis of the property
under those subsections, shall be treated as an amount referred
to in section 53511(c)(1) of this title withdrawn on the date of
disposition of the property. Subject to conditions prescribed in joint
regulations, this subsection does not apply to a disposition if there
is a redeposit, in an amount determined under joint regulations,
that restores the fund as far as practicable to the position it was
in before the withdrawal.
Regulations.
Regulations.
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‘‘§ 53511. Tax treatment of nonqualified withdrawals
‘‘(a) IN GENERAL.—Except as provided in section 53513 of this
title, a withdrawal from a fund that is not a qualified withdrawal
shall be treated as a nonqualified withdrawal.
‘‘(b) ORDER OF WITHDRAWALS.—A nonqualified withdrawal shall
be treated as made—
‘‘(1) first from the ordinary income account;
‘‘(2) second from the capital gain account; and
‘‘(3) third from the capital account.
‘‘(c) TAX TREATMENT.—For purposes of the Internal Revenue
Code of 1986 (26 U.S.C. 1 et seq.)—
‘‘(1) a nonqualified withdrawal from the ordinary income
account shall be included in income as an item of ordinary
income for the taxable year in which the withdrawal is made;
‘‘(2) a nonqualified withdrawal from the capital gain
account shall be included in income for the taxable year in
which the withdrawal is made as an item of gain realized
during that year from the disposition of an asset held for
more than 6 months; and
‘‘(3) for the period through the last date prescribed for
payment of tax for the taxable year in which the withdrawal
is made—
‘‘(A) no interest shall be payable under section 6601
of such Code (26 U.S.C. 6601) and no addition to the
tax shall be payable under section 6651 of such Code (26
U.S.C. 6651);
‘‘(B) interest on the amount of the additional tax attrib-
utable to an amount treated as a nonqualified withdrawal
from the ordinary income account or the capital gain
account shall be paid at the rate determined under sub-
section (d) from the last date prescribed for payment of
the tax for the taxable year for which the amount was
deposited in the fund; and
‘‘(C) no interest shall be payable on amounts treated
as withdrawn on a last-in-first-out basis under section
53512 of this title.
‘‘(d) INTEREST RATE.—The rate of interest under subsection
(c)(3)(B) for a nonqualified withdrawal made in a taxable year
beginning after 1971 shall be determined and published jointly
by the Secretary and the Secretary of the Treasury. The rate
shall be such that its relationship to 8 percent is comparable,
as determined by the Secretaries under joint regulations, to the
relationship between—
‘‘(1) the money rates and investment yields for the calendar
year immediately before the beginning of the taxable year;
and
‘‘(2) the money rates and investment yields for the calendar
year 1970.
‘‘(e) NONQUALIFIED WITHDRAWALS.—
‘‘(1) IN GENERAL.—The following applicable percentage of
any amount that remains in a capital construction fund at
the close of the following specified taxable year following the
taxable year for which the amount was deposited shall be
treated as a nonqualified withdrawal:
Regulations.
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‘‘If the amount remains in the fund at
The
applicable
the close of the—
percentage
is—
‘‘26th taxable year ............................................................................
20 percent
‘‘27th taxable year ............................................................................
40 percent
‘‘28th taxable year ............................................................................
60 percent
‘‘29th taxable year ............................................................................
80 percent
‘‘30th taxable year ............................................................................
100 percent.
‘‘(2) EARNINGS.—The earnings of a capital construction fund
for any taxable year (except net gains) shall be treated under
this subsection as an amount deposited for the taxable year.
‘‘(3) CONTRACT FOR QUALIFIED WITHDRAWAL.—Under para-
graph (1), an amount shall not be treated as remaining in
a capital construction fund at the close of a taxable year to
the extent there is a binding contract at the close of the taxable
year for a qualified withdrawal of the amount for an identified
item for which the withdrawal may be made.
‘‘(4) EXCESS EARNINGS.—If the Secretary determines that
the balance in a capital construction fund exceeds the amount
appropriate to meet the vessel construction program objectives
of the person that established the fund, the amount of the
excess shall be treated as a nonqualified withdrawal under
paragraph (1) unless the person develops appropriate program
objectives within 3 years to dissipate the excess.
‘‘(5) AMOUNTS IN FUND ON JANUARY 1, 1987.—Under this
subsection, amounts in a capital construction fund on January
1, 1987, shall be treated as having been deposited in that
fund on that date.
‘‘(f) TAX DETERMINATIONS.—
‘‘(1) IN GENERAL.—For a taxable year for which there is
a nonqualified withdrawal (including an amount treated as
a nonqualified withdrawal under subsection (e)), the tax
imposed by chapter 1 of the Internal Revenue Code of 1986
(26 U.S.C. ch. 1) shall be determined by—
‘‘(A) excluding the withdrawal from gross income; and
‘‘(B) increasing the tax imposed by chapter 1 of such
Code by the product of the amount of the withdrawal
and the highest tax rate specified in section 1 (or section
11 for a corporation) of such Code (26 U.S.C. 1, 11).
‘‘(2) MAXIMUM TAX RATE.—For that portion of a nonqualified
withdrawal made from the capital gain account during a taxable
year to which section 1(h) or 1201(a) of such Code (26 U.S.C.
1(h), 1201(a)) applies, the tax rate used under paragraph (1)(B)
may not exceed 15 percent (or 34 percent for a corporation).
‘‘(3) TAX BENEFIT RULE.—If any portion of a nonqualified
withdrawal is properly attributable to deposits (except earnings
on deposits) made by the taxpayer in a taxable year that
did not reduce the taxpayer’s liability for tax under chapter
1 of such Code (26 U.S.C. ch. 1) for a taxable year before
the taxable year in which the withdrawal occurs—
‘‘(A) that portion shall not be taken into account under
paragraph (1); and
‘‘(B) an amount equal to that portion shall be allowed
as a deduction under section 172 of such Code (26 U.S.C.
172) for the taxable year in which the withdrawal occurs.
‘‘(4) COORDINATION WITH DEDUCTION FOR NET OPERATING
LOSSES.—A nonqualified withdrawal excluded from gross
income under paragraph (1) shall be excluded in determining
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taxable income under section 172(b)(2) of such Code (26 U.S.C.
172(b)(2)).
‘‘§ 53512. FIFO and LIFO withdrawals
‘‘(a) FIFO.—Except as provided in subsection (b), an amount
withdrawn from an account under this chapter shall be treated
as withdrawn on a first-in-first-out basis.
‘‘(b) LIFO.—An amount withdrawn from an account under this
chapter shall be treated as withdrawn on a last-in-first-out basis
if it is—
‘‘(1) a nonqualified withdrawal for research, development,
and design expenses incident to new and advanced vessel
design, machinery, and equipment; or
‘‘(2) an amount treated as a nonqualified withdrawal under
section 53510(d) of this title.
‘‘§ 53513. Corporate 
reorganizations 
and 
partnership
changes
‘‘Under joint regulations—
‘‘(1) a transfer of a capital construction fund from one
person to another person in a transaction to which section
381 of the Internal Revenue Code of 1986 (26 U.S.C. 381)
applies may be treated as if the transaction is not a nonqualified
withdrawal; and
‘‘(2) a similar rule shall be applied to a continuation of
a partnership (within the meaning of subchapter K of chapter
1 of such Code (26 U.S.C. 701 et seq.)).
‘‘§ 53514. Relationship of old fund to new fund
‘‘(a) DEFINITION.—In this section, the term ‘old fund’ means
a capital construction fund maintained before October 21, 1970.
‘‘(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining
an old fund may elect to continue the old fund, but may not—
‘‘(1) hold amounts in the old fund beyond the expiration
date provided in the agreement under which the old fund
is maintained (determined without regard to an extension or
renewal made after April 14, 1970); or
‘‘(2) maintain simultaneously the old fund and a new fund
established under this chapter.
‘‘(c) APPLICATION
OF NEW FUND AGREEMENT
TO OLD FUND
AMOUNTS.—If a person makes an agreement under this chapter
to establish a new fund, the person may agree to extend the agree-
ment to some or all of the amounts in an old fund. Each item
in the old fund to be transferred shall be transferred in a nontaxable
transaction to the appropriate account in the new fund. For pur-
poses of section 53511(c)(3) of this title, the date of the deposit
of an item so transferred shall be July 1, 1971, or the date of
the deposit in the old fund, whichever is later.
‘‘§ 53515. Records and reports
‘‘A person maintaining a fund under this chapter shall keep
records and make reports as required by the Secretary or the
Secretary of the Treasury.
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‘‘§ 53516. Termination of agreement after change in regula-
tions
‘‘If, after an agreement has been made under this chapter,
a change is made either in the joint regulations or in the regulations
prescribed by the Secretary under this chapter that could have
a substantial effect on the rights or duties of a person maintaining
a fund under this chapter, that person may terminate the agree-
ment.
‘‘§ 53517. Reports
‘‘(a) IN GENERAL.—Within 120 days after the close of each
calendar year, the Secretary of Transportation and the Secretary
of Commerce each shall provide the Secretary of the Treasury
a written report on the capital construction funds under the par-
ticular Secretary’s jurisdiction for the calendar year.
‘‘(b) CONTENTS.—The report shall state the name and taxpayer
identification number of each person—
‘‘(1) establishing a capital construction fund during the
calendar year;
‘‘(2) maintaining a capital construction fund on the last
day of the calendar year;
‘‘(3) terminating a capital construction fund during the
calendar year;
‘‘(4) making a deposit to or withdrawal from a capital
construction fund during the calendar year, and the amount
of the deposit or withdrawal; or
‘‘(5) having been determined during the calendar year to
have failed to fulfill a substantial obligation under a capital
construction fund agreement to which the person is a party.
‘‘CHAPTER 537—LOANS AND GUARANTEES
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘53701.
Definitions.
‘‘53702.
General authority.
‘‘53703.
Application procedures.
‘‘53704.
Funding limits.
‘‘53705.
Pledge of United States Government.
‘‘53706.
Eligible purposes of obligations.
‘‘53707.
Findings related to obligors and operators.
‘‘53708.
Findings related to economic soundness.
‘‘53709.
Amount of obligations.
‘‘53710.
Contents of obligations.
‘‘53711.
Security interest.
‘‘53712.
Monitoring financial condition and operations of obligor.
‘‘53713.
Administrative fees.
‘‘53714.
Guarantee fees.
‘‘53715.
Escrow fund.
‘‘53716.
Deposit fund.
‘‘53717.
Management of funds in the Treasury.
‘‘53718.
Annual report to Congress.
‘‘SUBCHAPTER II—DEFAULT PROVISIONS
‘‘53721.
Rights of obligee.
‘‘53722.
Actions by Secretary.
‘‘53723.
Payments by Secretary and issuance of obligations.
‘‘53724.
Rights to secured property.
‘‘53725.
Actions against obligor.
‘‘SUBCHAPTER III—PARTICULAR PROJECTS
‘‘53731.
Commercial demonstration ocean thermal energy conversion facilities and
plantships.
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‘‘53732.
Eligible export vessels.
‘‘53733.
Shipyard modernization and improvement.
‘‘53734.
Replacement of vessels because of changes in operating standards.
‘‘53735.
Fisheries financing and capacity reduction.
‘‘SUBCHAPTER I—GENERAL
‘‘§ 53701. Definitions
‘‘In this chapter:
‘‘(1) ACTUAL COST.—The term ‘actual cost’ means the sum
of—
‘‘(A) all amounts paid by or for the account of the
obligor as of the date on which a determination is made
under section 53715(d)(1) of this title; and
‘‘(B) all amounts that the Secretary reasonably esti-
mates the obligor will become obligated to pay from time
to time thereafter, for the construction, reconstruction, or
reconditioning of the vessel, including guarantee fees that
will become payable under section 53714 of this title in
connection with all obligations issued for construction,
reconstruction, or reconditioning of the vessel or equipment
to be delivered, and all obligations issued for the delivered
vessel or equipment.
‘‘(2) 
CONSTRUCTION, 
RECONSTRUCTION, 
AND
RECONDI-
TIONING.—The 
terms 
‘construction’, 
‘reconstruction’, 
and
‘reconditioning’ include designing, inspecting, outfitting, and
equipping.
‘‘(3) DEPRECIATED
ACTUAL
COST.—The term ‘depreciated
actual cost’ of a vessel means—
‘‘(A) 
if 
the 
vessel 
was 
not 
reconstructed 
or
reconditioned, the actual cost of the vessel depreciated
on a straight line basis over the useful life of the vessel
as determined by the Secretary, not to exceed 25 years
from the date of delivery by the builder; or
‘‘(B) if the vessel was reconstructed or reconditioned,
the sum of—
‘‘(i) the actual cost of the vessel depreciated on
a straight line basis from the date of delivery by the
builder to the date of the reconstruction or recondi-
tioning, using the original useful life of the vessel,
and from the date of the reconstruction or recondi-
tioning, using a useful life of the vessel determined
by the Secretary; and
‘‘(ii) any amount paid or obligated to be paid for
the reconstruction or reconditioning, depreciated on
a straight line basis using a useful life of the vessel
determined by the Secretary.
‘‘(4) ELIGIBLE EXPORT VESSEL.—The term ‘eligible export
vessel’ means a vessel that—
‘‘(A) is constructed, reconstructed, or reconditioned in
the United States for use in world-wide trade; and
‘‘(B) will, on delivery or redelivery, become or remain
documented under the laws of a country other than the
United States.
‘‘(5) FISHERY FACILITY.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
term ‘fishery facility’ means—
‘‘(i) for operations on land—
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‘‘(I) a structure or appurtenance thereto
designed for the unloading and receiving from ves-
sels, the processing, the holding pending proc-
essing, the distribution after processing, or the
holding pending distribution, of fish from a fishery;
‘‘(II) the land necessary for the structure or
appurtenance; and
‘‘(III) equipment that is for use with the struc-
ture or appurtenance and that is necessary for
performing a function referred to in subclause (I);
‘‘(ii) for operations not on land, a vessel built in
the United States and used for, equipped to be used
for, or of a type normally used for, the processing
of fish; or
‘‘(iii) for aquaculture, including operations on land
or elsewhere—
‘‘(I) a structure or appurtenance thereto
designed for aquaculture;
‘‘(II) the land necessary for the structure or
appurtenance;
‘‘(III) equipment that is for use with the struc-
ture or appurtenance and that is necessary for
performing a function referred to in subclause (I);
and
‘‘(IV) a vessel built in the United States and
used for, equipped to be used for, or of a type
normally used for, aquaculture.
‘‘(B) REQUIRED OWNERSHIP.—Under subparagraph (A),
the structure, appurtenance, land, equipment, or vessel
must be owned by—
‘‘(i) an individual who is a citizen of the United
States; or
‘‘(ii) an entity that is a citizen of the United States
under section 50501 of this title and that is at least
75 percent owned (as determined under that section)
by citizens of the United States.
‘‘(6) FISHING VESSEL.—The term ‘fishing vessel’ has the
meaning given that term in section 3 of the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. 1802),
and any reference in this chapter to a vessel designed prin-
cipally for commercial use in the fishing trade or industry
is deemed to be a reference to a fishing vessel.
‘‘(7) MORTGAGE.—The term ‘mortgage’ includes—
‘‘(A) a preferred mortgage as defined in section 31301
of this title; and
‘‘(B) a mortgage on a vessel that will become a pre-
ferred mortgage when filed or recorded under chapter 313
of this title.
‘‘(8) 
OBLIGATION.—The 
term 
‘obligation’ 
means 
an
instrument of indebtedness issued for a purpose described in
section 53706 of this title, except—
‘‘(A) an obligation issued by the Secretary under section
53723 of this title; and
‘‘(B) an obligation eligible for investment of funds under
section 53715(f) or 53717 of this title.
‘‘(9) OBLIGEE.—The term ‘obligee’ means the holder of an
obligation.
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‘‘(10) OBLIGOR.—The term ‘obligor’ means a party primarily
liable for payment of the principal of or interest on an obliga-
tion.
‘‘(11) OCEAN
THERMAL
ENERGY
CONVERSION
FACILITY
OR
PLANTSHIP.—The term ‘ocean thermal energy conversion facility
or plantship’ means an at-sea facility or vessel, whether mobile,
floating unmoored, moored, or standing on the seabed, that
uses temperature differences in ocean water to produce elec-
tricity or another form of energy capable of being used directly
to perform work, and includes—
‘‘(A) equipment installed on the facility or vessel to
use the electricity or other form of energy to produce,
process, refine, or manufacture a product;
‘‘(B) a cable or pipeline used to deliver the electricity,
freshwater, or product to shore; and
‘‘(C) other associated equipment and appurtenances
of the facility or vessel to the extent they are located
seaward of the high water mark.
‘‘(12) SECRETARY.—The term ‘Secretary’ means—
‘‘(A) the Secretary of Commerce with respect to fishing
vessels and fishery facilities; and
‘‘(B) the Secretary of Transportation with respect to
other vessels and general shipyard facilities (as defined
in section 53733(a) of this title).
‘‘(13) VESSEL.—The term ‘vessel’ means any type of vessel,
whether in existence or under construction, including—
‘‘(A) a cargo vessel;
‘‘(B) a passenger vessel;
‘‘(C) a combination cargo and passenger vessel;
‘‘(D) a tanker;
‘‘(E) a tug or towboat;
‘‘(F) a barge;
‘‘(G) a dredge;
‘‘(H) a floating drydock with a capacity of at least
35,000 lifting tons and a beam of at least 125 feet between
the wing walls;
‘‘(I) an oceanographic research vessel;
‘‘(J) an instruction vessel;
‘‘(K) a pollution treatment, abatement, or control
vessel;
‘‘(L) a fishing vessel whose ownership meets the citizen-
ship requirements under section 50501 of this title for
documenting vessels to operate in the coastwise trade; and
‘‘(M) an ocean thermal energy conversion facility or
plantship that is or will be documented under the laws
of the United States.
‘‘§ 53702. General authority
‘‘(a) IN GENERAL.—The Secretary, on terms the Secretary may
prescribe, may guarantee or make a commitment to guarantee
the payment of the principal of and interest on an obligation eligible
to be guaranteed under this chapter. A guarantee or commitment
to guarantee shall cover 100 percent of the principal and interest.
‘‘(b) DIRECT LOANS FOR FISHERIES.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
this chapter, any obligation involving a fishing vessel, fishery
facility, aquaculture facility, individual fishing quota, or fishing
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capacity reduction program issued under this chapter after
October 11, 1996, shall be a direct loan obligation for which
the Secretary shall be the obligee, rather than an obligation
issued to an obligee other than the Secretary and guaranteed
by the Secretary. A direct loan obligation under this subsection
shall be treated in the same manner and to the same extent
as an obligation guaranteed under this chapter except with
respect to provisions of this chapter that by their nature can
only be applied to obligations guaranteed under this chapter.
‘‘(2) INTEREST RATE.—Notwithstanding any other provision
of this chapter, the annual rate of interest an obligor shall
pay on a direct loan obligation under this subsection is 2
percent plus the additional percent the Secretary must pay
as interest to borrow from the Treasury the funds to make
the loan.
‘‘§ 53703. Application procedures
‘‘(a) TIME FOR DECISION.—
‘‘(1) IN
GENERAL.—The Secretary shall approve or deny
an application for a loan guarantee under this chapter within
270 days after the date on which the signed application is
received by the Secretary.
‘‘(2) EXTENSION.—On request by an applicant, the Secretary
may extend the 270-day period in paragraph (1) to a date
not later than 2 years after the date on which the signed
application was received by the Secretary.
‘‘(b) CERTIFICATION OF REVIEW.—The Secretary may not guar-
antee or make a commitment to guarantee an obligation under
this chapter unless the Secretary certifies that a full and fair
consideration of all the regulatory requirements, including economic
soundness and financial requirements applicable to the obligor and
related parties, and a thorough assessment of the technical, eco-
nomic, and financial aspects of the loan application, has been made.
‘‘§ 53704. Funding limits
‘‘(a) GENERAL LIMITATIONS.—The total unpaid principal amount
of obligations guaranteed under this chapter and outstanding at
one time may not exceed $12,000,000,000. Of that amount—
‘‘(1) $850,000,000 shall be limited to obligations related
to fishing vessels and fishery facilities; and
‘‘(2) $3,000,000,000 shall be limited to obligations related
to eligible export vessels.
‘‘(b) ADDITIONAL LIMITATIONS.—Additional limitations may not
be imposed on new commitments to guarantee loans for any fiscal
year, except in amounts established in advance by annual authoriza-
tion laws. A vessel eligible for a guarantee under this chapter
may not be denied eligibility because of its type.
‘‘(c) LIMITS BASED ON RISK FACTORS.—
‘‘(1) DEFINITION.—In this subsection, the term ‘cost’ has
the meaning given that term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
‘‘(2) SYSTEM OF RISK CATEGORIES.—The Secretary shall—
‘‘(A) establish, and update annually, a system of risk
categories for obligations guaranteed under this chapter
that categorizes the relative risk of guarantees based on
the risk factors set forth in paragraph (4);
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‘‘(B) determine annually for each risk category a sub-
sidy rate equivalent to the cost of obligations in the cat-
egory, expressed as a percentage of the amount guaranteed
for obligations in the category; and
‘‘(C) ensure that each risk category is comprised of
loans that are relatively homogeneous in cost and share
characteristics predictive of defaults and other costs, given
the facts known at the time of obligation or commitment,
using a risk category system that is based on historical
analysis of program data and statistical evidence con-
cerning the likely costs of defaults or other costs that
are expected to be associated with the loans in the category.
‘‘(3) USE OF SYSTEM.—
‘‘(A) 
PLACING
OBLIGATION
IN
CATEGORY.—Before
making a guarantee under this chapter for an obligation,
and annually for projects subject to a guarantee, the Sec-
retary shall apply the risk factors specified in paragraph
(4) to place the obligation in a risk category established
under paragraph (2).
‘‘(B) REDUCTION OF AVAILABLE AMOUNT.—The Secretary
shall consider the total amount available to the Secretary
for making guarantees under this chapter to be reduced
by the amount determined by multiplying—
‘‘(i) the amount guaranteed under this chapter for
an obligation; by
‘‘(ii) the subsidy rate for the category in which
the obligation is placed under subparagraph (A).
‘‘(C) ESTIMATED
COST.—The estimated cost to the
United States Government of a guarantee under this
chapter for an obligation is deemed to be the amount
determined under subparagraph (B) for the obligation.
‘‘(D) RESTRICTION ON FURTHER GUARANTEES.—The Sec-
retary may not guarantee obligations under this chapter
after the total amount available to the Secretary under
appropriations laws for the cost of loan guarantees is
considered to be reduced to zero under subparagraph (B).
‘‘(4) RISK FACTORS.—The risk factors referred to in this
subsection are—
‘‘(A) if applicable, the country risk for each eligible
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 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, other guarantees related to the
project;
‘‘(F) if applicable, the projected employment of each
vessel or equipment to be financed with an obligation;
‘‘(G) if applicable, the projected market that will be
served by each vessel or equipment to be financed with
an obligation;
‘‘(H) the collateral provided for a guarantee for an
obligation;
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‘‘(I) the management and operating experience of an
obligor or applicant for a guarantee;
‘‘(J) whether a guarantee under this chapter is or will
be in effect during the construction period of the project;
and
‘‘(K) the concentration risk presented by an unduly
large percentage of loans outstanding by any one borrower
or group of affiliated borrowers.
‘‘§ 53705. Pledge of United States Government
‘‘(a) FULL FAITH
AND CREDIT.—The full faith and credit of
the United States Government is pledged to the payment of a
guarantee made under this chapter, for both principal and interest,
including interest (as may be provided for in the guarantee) accruing
between the date of default under a guaranteed obligation and
the date of payment in full of the guarantee.
‘‘(b) INCONTESTABILITY.—A guarantee or commitment to guar-
antee made under this chapter is conclusive evidence of the eligi-
bility of the obligation for the guarantee. The validity of a guarantee
or commitment to guarantee made under this chapter is incontest-
able.
‘‘§ 53706. Eligible purposes of obligations
‘‘(a) IN GENERAL.—To be eligible for a guarantee under this
chapter, an obligation must aid in any of the following:
‘‘(1)(A) Financing (including reimbursement of an obligor
for expenditures previously made for) the construction,
reconstruction, or reconditioning of a vessel (including an
eligible export vessel) designed principally for research, or for
commercial use—
‘‘(i) in the coastwise or intercoastal trade;
‘‘(ii) on the Great Lakes, or on bays, sounds, rivers,
harbors, or inland lakes of the United States;
‘‘(iii) in foreign trade as defined in section 109(b) of
this title;
‘‘(iv) as an ocean thermal energy conversion facility
or plantship;
‘‘(v) as a floating drydock in the construction,
reconstruction, reconditioning, or repair of vessels; or
‘‘(vi) as an eligible export vessel in worldwide trade.
‘‘(B) A guarantee under subparagraph (A) may not be made
more than one year after delivery of the vessel (or redelivery
if the vessel was reconstructed or reconditioned) unless the
proceeds of the obligation are used to finance the construction,
reconstruction, or reconditioning of a vessel or of facilities or
equipment related to marine operations.
‘‘(2) Financing (including reimbursement of an obligor for
expenditures previously made for) the construction, reconstruc-
tion, reconditioning, or purchase of a vessel owned by citizens
of the United States and designed principally for research,
or for commercial use in the fishing industry.
‘‘(3) Financing the purchase, reconstruction, or recondi-
tioning of a vessel or fishery facility—
‘‘(A) for which an obligation was guaranteed under
this chapter; and
‘‘(B) that, under subchapter II of this chapter—
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‘‘(i) is a vessel or fishery facility for which an
obligation was accelerated and paid;
‘‘(ii) was acquired by the Federal Ship Financing
Fund or successor account under section 53717 of this
title; or
‘‘(iii) was sold at foreclosure begun or intervened
in by the Secretary.
‘‘(4) Financing any part of the repayment to the United
States Government of any amount of a construction-differential
subsidy paid for a vessel.
‘‘(5) Refinancing an existing obligation (regardless of
whether guaranteed under this chapter) issued for a purpose
described in paragraphs (1)–(4), including a short-term obliga-
tion incurred to obtain temporary funds with the intention
of refinancing.
‘‘(6) Financing or refinancing (including reimbursement of
an obligor for expenditures previously made for) the construc-
tion, reconstruction, reconditioning, or purchase of a fishery
facility.
‘‘(7) Financing or refinancing (including reimbursement of
an obligor for expenditures previously made for) the purchase
of an individual fishing quota in accordance with section
303(d)(4) of the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1853(d)(4)).
‘‘(b) NON-VESSELS TREATED AS VESSELS.—An obligation guaran-
teed under subsection (a)(6) or (7) shall be treated, for purposes
of this chapter, in the same manner and to the same extent as
an obligation that aids in financing the construction, reconstruction,
reconditioning, or purchase of a vessel, except with respect to provi-
sions that by their nature can only be applied to vessels.
‘‘(c) PRIORITIES
FOR CERTAIN VESSELS.—In guaranteeing or
making a commitment to guarantee an obligation under this
chapter, the Secretary shall give priority to—
‘‘(1) a vessel that is otherwise eligible for a guarantee
and is constructed with assistance under subtitle D of the
Maritime Security Act of 2003 (46 U.S.C. 53101 note); and
‘‘(2) after applying paragraph (1), a vessel that is otherwise
eligible for a guarantee and that the Secretary of Defense
determines—
‘‘(A) is suitable for service as a naval auxiliary in
time of war or national emergency; and
‘‘(B) meets a shortfall in sealift capacity or capability.
‘‘§ 53707. Findings related to obligors and operators
‘‘(a) RESPONSIBLE OBLIGOR.—The Secretary may not guarantee
or make a commitment to guarantee an obligation under this
chapter unless the Secretary finds that the obligor is responsible
and has the ability, experience, financial resources, and other quali-
fications necessary for the adequate operation and maintenance
of each vessel that will serve as security for the guarantee.
‘‘(b) OPERATORS OF LINER VESSELS.—The Secretary of Transpor-
tation may not guarantee or make a commitment to guarantee
a loan for the construction, reconstruction, or reconditioning of
a liner vessel under this chapter unless the Chairman of the Federal
Maritime Commission certifies that the operator of the vessel has
not been found by the Commission to have committed, within the
previous 5 years—
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‘‘(1) a violation of part A of subtitle IV of this title that
involves unjust or unfair discriminatory treatment or undue
or unreasonable prejudice or disadvantage with respect to a
United States shipper, ocean transportation intermediary,
ocean common carrier, or port; or
‘‘(2) a violation of part B of subtitle IV of this title.
‘‘(c) OPERATORS OF FISHING VESSELS.—The Secretary of Com-
merce may not guarantee or make a commitment to guarantee
a loan for the construction, reconstruction, or reconditioning of
a fishing vessel under this chapter if the operator of the vessel
has been—
‘‘(1) held liable, or the vessel has been held liable in rem,
for a civil penalty under section 308 of the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. 1858)
and the operator has not paid the penalty;
‘‘(2) found guilty of an offense under section 309 of the
Magnuson-Stevens Fishery Conservation and Management Act
(16 U.S.C. 1859) and not paid the assessed fine or served
the assessed sentence;
‘‘(3) held liable for a civil or criminal penalty under section
105 of the Marine Mammal Protection Act of 1972 (16 U.S.C.
1375) and not paid the assessed fine or served the assessed
sentence; or
‘‘(4) held liable for a civil penalty by the Coast Guard
under this title or title 33 and not paid the assessed fine.
‘‘(d) WAIVERS CONCERNING FINANCIAL CONDITION.—The Sec-
retary shall prescribe regulations concerning circumstances under
which waivers of, or exceptions to, otherwise applicable regulatory
requirements concerning financial condition can be made. The regu-
lations shall require that—
‘‘(1) the economic soundness requirements in section
53708(a) of this title are met after the waiver of the financial
condition requirement; and
‘‘(2) the waiver shall provide for the imposition of other
requirements on the obligor designed to compensate for the
increased risk associated with the obligor’s failure to meet
regulatory requirements applicable to financial condition.
‘‘§ 53708. Findings related to economic soundness
‘‘(a) BY SECRETARY
OF TRANSPORTATION.—The Secretary of
Transportation may not guarantee or make a commitment to guar-
antee an obligation under this chapter unless the Secretary finds
that the property or project for which the obligation will be executed
will be economically sound. In making that finding, the Secretary
shall consider—
‘‘(1) the need in the particular segment of the maritime
industry for new or additional capacity, including any impact
on existing equipment for which a guarantee under this chapter
is in effect;
‘‘(2) the market potential for employment of the vessel
over the life of the guarantee;
‘‘(3) projected revenues and expenses associated with
employment of the vessel;
‘‘(4) any charter, contract of affreightment, transportation
agreement, or similar agreement or undertaking relevant to
the employment of the vessel;
‘‘(5) other relevant criteria; and
Regulations.
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‘‘(6) for inland waterways, the need for technical improve-
ments, including increased fuel efficiency or improved safety.
‘‘(b) BY SECRETARY OF COMMERCE.—The Secretary of Commerce
may not guarantee or make a commitment to guarantee an obliga-
tion under this chapter unless the Secretary finds, at or prior
to the time the commitment is made or the guarantee becomes
effective, that—
‘‘(1) the property or project for which the obligation will
be executed will be economically sound; and
‘‘(2) for a fishing vessel, the purpose of the financing or
refinancing is consistent with—
‘‘(A) the wise use of the fisheries resources and the
development, advancement, management, conservation,
and protection of the fisheries resources; or
‘‘(B) the need for technical improvements, including
increased fuel efficiency or improved safety.
‘‘(c) USED FISHING VESSELS
AND FACILITIES.—The Secretary
of Commerce may not guarantee or make a commitment to guar-
antee an obligation under this chapter for the purchase of a used
fishing vessel or used fishery facility unless the vessel or facility
will be—
‘‘(1) reconstructed or reconditioned in the United States
and will contribute to the development of the United States
fishing industry; or
‘‘(2) used—
‘‘(A) in the harvesting of fish from an underused
fishery; or
‘‘(B) for a purpose described in the definition of ‘fishery
facility’ in section 53701 of this title with respect to an
underused fishery.
‘‘(d) INDEPENDENT ANALYSIS.—The Secretary may make a deter-
mination that aspects of an application under this chapter require
independent analysis to be conducted by third party experts due
to risk factors associated with markets, technology, financial struc-
tures, or other risk factors identified by the Secretary. Any inde-
pendent analysis conducted under this subsection shall be per-
formed by a party chosen by the Secretary.
‘‘(e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Not-
withstanding any other provision of this chapter, the Secretary
may make a determination that an application under this title
requires additional equity because of increased risk factors associ-
ated with markets, technology, financial structures, or other risk
factors identified by the Secretary.
‘‘§ 53709. Amount of obligations
‘‘(a) IN GENERAL.—The principal of an obligation may not be
guaranteed in an amount greater than the amount determined
by multiplying the percentage applicable under subsection (b) by—
‘‘(1) the amount paid by or for the account of the obligor
(as determined by the Secretary, which determination shall
be conclusive) for the construction, reconstruction, or recondi-
tioning of the vessel used as security for the guarantee; or
‘‘(2) if the obligor creates an escrow fund under section
53715 of this title, the actual cost of the vessel.
‘‘(b) LIMITATIONS ON AMOUNT BORROWED.—
‘‘(1) IN GENERAL.—Except as otherwise provided, the prin-
cipal amount of an obligation guaranteed under this chapter
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may not exceed 75 percent of the actual cost or depreciated
actual cost, as determined by the Secretary, of the vessel used
as security for the guarantee.
‘‘(2) CERTAIN APPROVED VESSELS.—The principal amount
may not exceed 87.5 percent of the actual cost or depreciated
actual cost if—
‘‘(A) the size and speed of the vessel are approved
by the Secretary;
‘‘(B) the vessel is or would have been eligible for mort-
gage aid for construction under section 509 of the Merchant
Marine Act, 1936, or would have been eligible except that
the vessel was built with a construction-differential subsidy
and the subsidy has been repaid; and
‘‘(C) the vessel is of a type described in that section
for which the minimum down payment required by that
section is 12.5 percent of the cost of the vessel.
‘‘(3) BARGES.—For a barge constructed without a construc-
tion-differential subsidy or for which the subsidy has been
repaid, the principal amount may not exceed 87.5 percent of
the actual cost or depreciated actual cost.
‘‘(4) FISHING
VESSELS
AND
FISHERY
FACILITIES.—For a
fishing vessel or fishery facility, the principal amount may
not exceed 80 percent of the actual cost or depreciated actual
cost. However, debt for the vessel or facility may not be placed
through the Federal Financing Bank.
‘‘(5) OTEC.—For an ocean thermal energy conversion
facility or plantship constructed without a construction-differen-
tial subsidy, the principal amount may not exceed 87.5 percent
of the actual cost or depreciated actual cost of the facility
or plantship.
‘‘(6) ELIGIBLE
EXPORT
VESSELS.—For an eligible export
vessel, the principal amount may not exceed 87.5 percent of
the actual cost or depreciated actual cost.
‘‘(c) SECURITY INVOLVING MULTIPLE VESSELS.—The principal
amount of an obligation having more than one vessel as security
for the guarantee may not exceed the sum of the principal amounts
allowable for all the vessels.
‘‘(d) PROHIBITION ON UNIFORM PERCENTAGE LIMITATIONS.—The
Secretary may not establish a percentage under any provision of
subsection (b) that is to be applied uniformly to all guarantees
or commitments to guarantee made under that provision.
‘‘(e) PROHIBITION ON MINIMUM PRINCIPAL AMOUNT.—The Sec-
retary may not establish, as a condition of eligibility for a guarantee
under this chapter, a minimum principal amount for an obligation
covering the reconstruction or reconditioning of a fishing vessel
or fishery facility. For purposes of this chapter, the reconstruction
or reconditioning of a fishing vessel or fishery facility does not
include the routine minor repair or maintenance of the vessel
or facility.
‘‘§ 53710. Contents of obligations
‘‘(a) IN GENERAL.—An obligation guaranteed under this chapter
must—
‘‘(1) provide for payments by the obligor satisfactory to
the Secretary;
‘‘(2) provide for interest (exclusive of guarantee fees and
other fees) at a rate not more than the annual rate on the
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unpaid principal that the Secretary determines is reasonable,
considering the range of interest rates prevailing in the private
market for similar loans and the risks assumed by the Sec-
retary;
‘‘(3) have a maturity date satisfactory to the Secretary,
but—
‘‘(A) not more than 25 years after the date of delivery
of the vessel used as security for the guarantee; or
‘‘(B) 
if 
the 
vessel 
has 
been 
reconstructed 
or
reconditioned, not more than the later of—
‘‘(i) 25 years after the date of delivery of the vessel;
or
‘‘(ii) the remaining years of useful life of the vessel
as determined by the Secretary; and
‘‘(4) provide, or a related agreement must provide, that
if the vessel used as security for the guarantee is a delivered
vessel, the vessel shall be—
‘‘(A) in class A–1, American Bureau of Shipping, or
meet other standards acceptable to the Secretary, with
all required certificates, including marine inspection certifi-
cates of the Coast Guard or, in the case of an eligible
export vessel, of the appropriate foreign authorities under
a treaty, convention, or other international agreement to
which the United States is a party, and with all out-
standing requirements and recommendations necessary for
class retention accomplished, unless the Secretary permits
a deferment of repairs necessary to meet these require-
ments; and
‘‘(B) well equipped, in good repair, and in every respect
seaworthy and fit for service.
‘‘(b) PROVISIONS FOR CERTAIN PASSENGER VESSELS.—
‘‘(1) IN GENERAL.—With the Secretary’s approval, if the
vessel used as security for the guarantee is a passenger vessel
having the tonnage, speed, passenger accommodations, and
other characteristics described in section 503 of the Merchant
Marine Act, 1936, an obligation guaranteed under this chapter
or a related agreement may provide that—
‘‘(A) the only recourse by the United States Govern-
ment against the obligor for payments under the guarantee
will be repossession of the vessel and assignment of insur-
ance claims; and
‘‘(B) the obligor’s liability for payments under the guar-
antee will be satisfied and discharged by the surrender
of the vessel and all interest in the vessel to the Govern-
ment in the condition described in paragraph (2).
‘‘(2) SURRENDER OF VESSEL.—
‘‘(A) IN GENERAL.—On surrender, the vessel must be—
‘‘(i) free and clear of all liens and encumbrances
except the security interest conveyed to the Secretary
under this chapter;
‘‘(ii) in class; and
‘‘(iii) in as good order and condition (ordinary wear
and tear excepted) as when acquired by the obligor.
‘‘(B) COVERING DEFICIENCIES BY INSURANCE.—To the
extent covered by insurance, a deficiency related to a
requirement in subparagraph (A) may be satisfied by
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120 STAT. 1612
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assignment of the obligor’s insurance claims to the Govern-
ment.
‘‘(c) OTHER PROVISIONS TO PROTECT SECURITY INTERESTS.—
An obligation guaranteed under this chapter and any related agree-
ment must contain other provisions for the protection of the security
interests of the Government (including acceleration, assumption,
and subrogation provisions and the issuance of notes by the obligor
to the Secretary), liens and releases of liens, payment of taxes,
and other matters that the Secretary may prescribe.
‘‘§ 53711. Security interest
‘‘(a) IN GENERAL.—The Secretary may guarantee an obligation
under this chapter only if the obligor conveys or agrees to convey
to the Secretary a security interest the Secretary considers nec-
essary to protect the interest of the United States Government.
‘‘(b) MULTIPLE VESSELS AND TYPES OF SECURITY.—The security
interest may relate to more than one vessel and may consist of
more than one type of security. If the security interest relates
to more than one vessel, the obligation may have the latest maturity
date allowable under section 53710(a)(3) of this title for any of
the vessels used as security for the guarantee. However, the Sec-
retary may require such payments of principal prior to maturity,
with respect to all related obligations, as the Secretary considers
necessary to maintain adequate security for the guarantee.
‘‘§ 53712. Monitoring financial condition and operations of
obligor
‘‘(a) IN GENERAL.—The Secretary shall monitor the financial
condition and operations of the obligor on a regular basis during
the term of the guarantee. The Secretary shall document the results
of the monitoring on an annual or quarterly basis depending on
the condition of the obligor. If the Secretary determines that the
financial condition of the obligor warrants additional protections
to the Secretary, the Secretary shall take appropriate action under
subsection (b). If the Secretary determines that the financial condi-
tion of the obligor jeopardizes its continued ability to perform its
responsibilities in connection with the guarantee of an obligation
by the Secretary, the Secretary shall make an immediate determina-
tion whether default should take place and whether further meas-
ures described in subsection (b) should be taken to protect the
interests of the Secretary while ensuring that program objectives
are met.
‘‘(b) CONTRACT PROVISIONS TO PROTECT SECRETARY.—The Sec-
retary shall include provisions in a loan agreement with an obligor
that provides additional authority to the Secretary to take action
to limit potential losses in connection with a defaulted loan or
a loan that is in jeopardy due to the deteriorating financial condition
of the obligor. These provisions include requirements for additional
collateral or greater equity contributions that are effective upon
the occurrence of verifiable conditions relating to the obligor’s finan-
cial condition or the status of the vessel or shipyard project.
‘‘§ 53713. Administrative fees
‘‘(a) IN GENERAL.—The Secretary shall charge and collect from
the obligor fees the Secretary considers reasonable for—
‘‘(1) investigating an application for a guarantee;
‘‘(2) appraising property offered as security for a guarantee;
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‘‘(3) issuing a commitment;
‘‘(4) providing services related to an escrow fund under
section 53715 of this title; and
‘‘(5) inspecting property during construction, reconstruction,
or reconditioning.
‘‘(b) TOTAL FEE LIMITATION.—The total fees under subsection
(a) may not exceed 0.5 percent of the original principal amount
of the obligations to be guaranteed.
‘‘(c) FEES
FOR INDEPENDENT ANALYSIS.—The Secretary may
charge and collect fees to cover the costs of independent analysis
under section 53708(d) of this title. Notwithstanding section 3302
of title 31, any fee collected under this subsection shall—
‘‘(1) be credited as an offsetting collection to the account
that finances the administration of the loan guarantee program;
‘‘(2) be available for expenditure only to pay the costs
of activities and services for which the fee is imposed; and
‘‘(3) remain available until expended.
‘‘§ 53714. Guarantee fees
‘‘(a) REGULATIONS.—Subject to this section, the Secretary shall
prescribe regulations to assess a fee for guaranteeing an obligation
under this chapter.
‘‘(b) COMPUTATION OF FEE.—
‘‘(1) IN GENERAL.—The amount of the fee for a guarantee
under this chapter shall be equal to the sum of the amounts
determined under paragraph (2) for the years in which the
guarantee is in effect.
‘‘(2) PRESENT VALUE FOR EACH YEAR.—The amount referred
to in paragraph (1) for a year in which the guarantee is in
effect is the present value of the amount calculated under
paragraph (3). To determine the present value, the Secretary
shall apply a discount rate determined by the Secretary of
the Treasury, considering current market yields on outstanding
obligations of the United States Government having periods
to maturity comparable to the period to maturity for the
guaranteed obligation.
‘‘(3) CALCULATION OF AMOUNT.—The amount referred to
in paragraph (2) shall be calculated by multiplying—
‘‘(A) the estimated average unpaid principal amount
of the obligation that will be outstanding during the year
(excluding the average amount, other than interest, on
deposit during the year in an escrow fund under section
53715 of this title); by
‘‘(B) the fee rate set under paragraph (4).
‘‘(4) SETTING FEE RATES.—To set the fee rate referred to
in paragraph (3)(B), the Secretary shall establish a formula
that—
‘‘(A) takes into account the security provided for the
guaranteed obligation; and
‘‘(B) is a sliding scale based on the creditworthiness
of the obligor, using—
‘‘(i) the lowest allowable rate under paragraph (5)
for the most creditworthy obligors; and
‘‘(ii) the highest allowable rate under paragraph
(5) for the least creditworthy obligors.
‘‘(5) PERMISSIBLE RANGE OF RATES.—The fee rate set under
paragraph (4) shall be—
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‘‘(A) for a delivered vessel or equipment, at least 0.5
percent and not more than 1 percent; and
‘‘(B) for a vessel to be constructed, reconstructed, or
reconditioned or equipment to be delivered, at least 0.25
percent and not more than 0.5 percent.
‘‘(c) WHEN FEE COLLECTED.—A fee for the guarantee of an
obligation under this chapter shall be collected not later than the
date on which an amount is first paid on the obligation.
‘‘(d) FINANCING THE FEE.—A fee paid under this section is
eligible to be financed under this chapter and shall be included
in the actual cost of the obligation guaranteed.
‘‘(e) NOT REFUNDABLE.—A fee paid under this section is not
refundable. However, an obligor shall receive credit for the amount
paid for the remaining term of the obligation if the obligation
is refinanced and guaranteed under this chapter after the refi-
nancing.
‘‘§ 53715. Escrow fund
‘‘(a) IN GENERAL.—If the proceeds of an obligation guaranteed
under this chapter are to be used to finance the construction,
reconstruction, or reconditioning of a vessel that will serve as secu-
rity for a guarantee under this chapter, the Secretary may accept
and hold in escrow, under an escrow agreement with the obligor,
a portion of the proceeds of all obligations guaranteed under this
chapter whose proceeds are to be so used which is equal to—
‘‘(1) the excess of—
‘‘(A) the principal amount of all obligations whose pro-
ceeds are to be so used; over
‘‘(B) 75 percent or 87.5 percent, whichever is applicable
under section 53709(b) of this title, of the amount paid
by or for the account of the obligor for the construction,
reconstruction, or reconditioning of the vessel; plus
‘‘(2) any interest the Secretary may require on the amount
described in paragraph (1).
‘‘(b) SECURITY INVOLVING BOTH UNCOMPLETED AND DELIVERED
VESSELS.—If the security for the guarantee of an obligation relates
both to a vessel to be constructed, reconstructed, or reconditioned
and to a delivered vessel, the principal amount of the obligation
shall be prorated for purposes of subsection (a) under regulations
prescribed by the Secretary.
‘‘(c) DISBURSEMENT BEFORE TERMINATION OF AGREEMENT.—
‘‘(1) PURPOSES.—The Secretary shall disburse amounts in
the escrow fund, as specified in the escrow agreement, to—
‘‘(A) pay amounts the obligor is obligated to pay for—
‘‘(i) the construction, reconstruction, or recondi-
tioning of a vessel used as security for the guarantee;
and
‘‘(ii) interest on the obligations;
‘‘(B) redeem the obligations under a refinancing
guaranteed under this chapter; and
‘‘(C) pay any excess interest deposits to the obligor
at times provided for in the escrow agreement.
‘‘(2) MANNER
OF
PAYMENT.—If a payment becomes due
under the guarantee before the termination of the escrow agree-
ment, the amount in the escrow fund at the time the payment
becomes due, including realized income not yet paid to the
obligor, shall be paid into the appropriate account under section
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53717 of this title. The amount shall be credited against
amounts due or to become due from the obligor to the Secretary
on the guaranteed obligations or, to the extent not so required,
be paid to the obligor.
‘‘(d) PAYMENTS REQUIRED BEFORE DISBURSEMENT.—
‘‘(1) IN GENERAL.—No disbursement shall be made under
subsection (c) to any person until the total amount paid by
or for the account of the obligor from sources other than the
proceeds of the obligation equals at least 25 percent or 12.5
percent, whichever is applicable under section 53709(b) of this
title, of the aggregate actual cost of the vessel, as previously
approved by the Secretary. If the aggregate actual cost of
the vessel has increased since the Secretary’s initial approval
or if it increases after the first disbursement is permitted
under this subsection, then no further disbursements shall
be made under subsection (c) until the total amount paid by
or for the account of the obligor from sources other than the
proceeds of the obligation equals at least 25 percent or 12.5
percent, as applicable, of the increase, as determined by the
Secretary, in the aggregate actual cost of the vessel. This para-
graph does not require the Secretary to consent to finance
any increase in actual cost unless the Secretary determines
that such an increase in the obligation meets all the terms
and conditions of this chapter or other applicable law.
‘‘(2) DOCUMENTED PROOF OF PROGRESS REQUIREMENT.—The
Secretary shall, by regulation, establish a transparent, inde-
pendent, and risk-based process for verifying and documenting
the progress of projects under construction before disbursing
guaranteed loan funds. At a minimum, the process shall require
documented proof of progress in connection with the construc-
tion, reconstruction, or reconditioning of a vessel or vessels
before disbursements are made from the escrow fund. The
Secretary may require that the obligor provide a certificate
from an independent party certifying that the requisite progress
in construction, reconstruction, or reconditioning has taken
place.
‘‘(e) DISBURSEMENT ON TERMINATION OF AGREEMENT.—
‘‘(1) IN GENERAL.—If a payment has not become due under
the guarantee before the termination of the escrow agreement,
the balance of the escrow fund at the time of termination
shall be disbursed to—
‘‘(A) prepay the excess of—
‘‘(i) the principal amount of all obligations whose
proceeds are to be used to finance the construction,
reconstruction, or reconditioning of the vessel used or
to be used as security for the guarantee; over
‘‘(ii) 75 percent or 87.5 percent, whichever is
applicable under section 53709(b) of this title, of the
actual cost of the vessel to the extent paid; and
‘‘(B) pay interest on that prepaid amount of principal.
‘‘(2) REMAINING BALANCE.—Any remaining balance of the
escrow fund shall be paid to the obligor.
‘‘(f) INVESTMENT.—The Secretary may invest and reinvest any
part of an escrow fund in obligations of the United States Govern-
ment with maturities such that the escrow fund will be available
as required for purposes of the escrow agreement. Investment
income shall be paid to the obligor when received.
Regulations.
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‘‘(g) TERMS TO PROTECT GOVERNMENT.—The escrow agreement
shall contain other terms the Secretary considers necessary to pro-
tect fully the interests of the Government.
‘‘§ 53716. Deposit fund
‘‘(a) IN GENERAL.—There is a deposit fund in the Treasury
for purposes of this section. The Secretary, in accordance with
an agreement under subsection (b), may deposit into and hold
in the fund cash belonging to an obligor to serve as collateral
for a guarantee made under this chapter with respect to the obligor.
‘‘(b) AGREEMENT.—The Secretary and an obligor shall make
a reserve fund or other collateral account agreement to govern
the deposit, withdrawal, retention, use, and reinvestment of cash
of the obligor held in the fund. The agreement shall contain—
‘‘(1) terms and conditions required by this section;
‘‘(2) terms that grant to the United States Government
a security interest in all amounts deposited into the fund;
and
‘‘(3) any additional terms considered by the Secretary to
be necessary to protect fully the interests of the Government.
‘‘(c) INVESTMENT.—The Secretary may invest and reinvest any
part of the amounts in the fund in obligations of the Government
with maturities such that amounts in the fund will be available
as required for purposes of the agreement under subsection (b).
Cash balances in the fund in excess of current requirements shall
be maintained in a form of uninvested funds, and the Secretary
of the Treasury shall pay interest on these funds.
‘‘(d) WITHDRAWALS.—
‘‘(1) IN GENERAL.—Cash deposited into the fund may not
be withdrawn without the consent of the Secretary.
‘‘(2) USE OF INCOME.—Subject to paragraph (3), the Sec-
retary may pay any income earned on cash of an obligor depos-
ited into the fund in accordance with the agreement with the
obligor under subsection (b).
‘‘(3) RETENTION
AGAINST
DEFAULT.—The Secretary may
retain and offset any or all of the cash of an obligor in the
fund, and any income realized thereon, as part of the Secretary’s
recovery against the obligor in case of a default by the obligor
on an obligation.
‘‘§ 53717. Management of funds in the Treasury
‘‘(a) DEFINITION.—In this section, the term ‘FCRA’ means the
Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
‘‘(b) LOAN GUARANTEES BY SECRETARY OF TRANSPORTATION.—
‘‘(1) WHEN
NOT
SUBJECT
TO
FCRA.—The Secretary of
Transportation shall account for payments and disbursements
involving obligations guaranteed under this chapter and not
subject to FCRA in an account in the Treasury entitled the
Federal Ship Financing Fund Liquidating Account (a liqui-
dating account as defined in FCRA).
‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Transpor-
tation shall account for payments and disbursements involving
obligations guaranteed under this chapter and subject to FCRA
in a separate account in the Treasury entitled the Federal
Ship Financing Guaranteed Loan Financing Account (a
financing account as defined in FCRA).
‘‘(c) LOAN GUARANTEES BY SECRETARY OF COMMERCE.—
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‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of Com-
merce shall account for payments and disbursements involving
obligations guaranteed under this chapter and not subject to
FCRA in a separate account in the Treasury established for
this purpose.
‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Commerce
shall account for payments and disbursements involving obliga-
tions guaranteed under this chapter and subject to FCRA in
a separate account in the Treasury established for this purpose.
‘‘(d) DIRECT LOANS BY SECRETARY OF COMMERCE.—The Sec-
retary of Commerce shall account for payments and disbursements
involving direct loans made under this chapter in a separate account
in the Treasury established for this purpose.
‘‘§ 53718. Annual report to Congress
‘‘The Secretary of Transportation shall report to Congress
annually on the loan guarantee program under this chapter. Each
report shall include—
‘‘(1) the size, in dollars, of the portfolio of loans guaranteed;
‘‘(2) the size, in dollars, of projects in the portfolio facing
financial difficulties;
‘‘(3) the number and type of projects covered;
‘‘(4) a profile of pending loan applications;
‘‘(5) the amount of appropriations available for new guaran-
tees;
‘‘(6) a profile of each project approved since the last report;
and
‘‘(7) a profile of any defaults since the last report.
‘‘SUBCHAPTER II—DEFAULT PROVISIONS
‘‘§ 53721. Rights of obligee
‘‘(a) DEMANDS BY OBLIGEES.—Except as provided in subsection
(c), if an obligor has continued in default for 30 days in the payment
of principal or interest on an obligation guaranteed under this
chapter, the obligee or the obligee’s agent may demand that the
Secretary pay the unpaid principal amount of the obligation and
the unpaid interest on the obligation to the date of payment. The
demand must be made within the earlier of—
‘‘(1) a period that may be specified in the guarantee or
a related agreement; or
‘‘(2) 90 days from the date of the default.
‘‘(b) PAYMENTS BY SECRETARY.—
‘‘(1) IN GENERAL.—If a demand is made under subsection
(a), the Secretary shall pay to the obligee or the obligee’s
agent the unpaid principal amount of the obligation and the
unpaid interest on the obligation to the date of payment. Pay-
ment shall be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee
or a related agreement; or
‘‘(B) 30 days from the date of the demand.
‘‘(2) IF
NO
EXISTING
DEFAULT.—The Secretary is not
required to make payment under this subsection if, within
the appropriate period under paragraph (1), the Secretary finds
that the obligor was not in default or that the default was
remedied before the demand.
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120 STAT. 1618
PUBLIC LAW 109–304—OCT. 6, 2006
‘‘(c) ASSUMPTION
OF
RIGHTS
AND
OBLIGATIONS
BEFORE
DEMAND.—An obligee or the obligee’s agent may not demand pay-
ment under this section if the Secretary, before the demand and
on terms that may be provided in the obligation or a related
agreement, has assumed the obligor’s rights and duties under the
obligation and any related agreement and made any payment in
default. However, the guarantee of the obligation remains in effect
after the Secretary’s assumption.
‘‘§ 53722. Actions by Secretary
‘‘(a) GENERAL AUTHORITY.—On default under an obligation or
related agreement between the Secretary and the obligor, the Sec-
retary, on terms that may be provided in the obligation or agree-
ment, may—
‘‘(1) assume the obligor’s rights and duties under the obliga-
tion or agreement, make any payment in default, and notify
the obligee or the obligee’s agent of the default and the Sec-
retary’s assumption; or
‘‘(2) notify the obligee or the obligee’s agent of the default.
‘‘(b) DEMANDS BY OBLIGEES.—
‘‘(1) DEMAND.—If the Secretary proceeds under subsection
(a)(2), the obligee or the obligee’s agent may demand that
the Secretary pay the unpaid principal amount of the obligation
and the unpaid interest on the obligation. The demand must
be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee
or a related agreement; or
‘‘(B) 60 days from the date of the Secretary’s notice.
‘‘(2) PAYMENT.—If a demand is made under paragraph (1),
the Secretary shall pay to the obligee or the obligee’s agent
the unpaid principal amount of the obligation and the unpaid
interest on the obligation to the date of payment. Payment
shall be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee
or a related agreement; or
‘‘(B) 30 days from the date of the demand.
‘‘(c) CONTINUED EFFECT OF GUARANTEE.—A guarantee of an
obligation remains in effect after an assumption of the obligation
by the Secretary.
‘‘(d) ADDITIONAL RESPONSES.—If there is a default on an obliga-
tion, the Secretary shall conduct operations under this chapter
in a manner that—
‘‘(1) maximizes the net present value return from the sale
or disposition of assets associated with the obligation, including
prompt referral to the Attorney General for collection as appro-
priate;
‘‘(2) minimizes the amount of any loss realized in the resolu-
tion of the guarantee;
‘‘(3) ensures adequate competition and fair and consistent
treatment of offerors; and
‘‘(4) requires appraisal of assets by an independent
appraiser.
‘‘§ 53723. Payments by Secretary and issuance of obligations
‘‘(a) CASH PAYMENT.—Amounts required to be paid by the Sec-
retary under section 53721 or 53722 of this title shall be paid
in cash.
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‘‘(b) ISSUANCE OF OBLIGATIONS.—If amounts in the appropriate
account under section 53717 of this title are not sufficient to make
a payment required under section 53721 or 53722 of this title,
the Secretary may issue obligations to the Secretary of the Treasury.
The Secretary, with the approval of the Secretary of the Treasury,
shall prescribe the form, denomination, maturity, and other terms
(except the interest rate) of the obligations. The Secretary of the
Treasury shall set the interest rate for the obligations, considering
the current average market yield on outstanding marketable obliga-
tions of the United States Government of comparable maturities
during the month before the obligations are issued.
‘‘(c) PURCHASE OF OBLIGATIONS.—The Secretary of the Treasury
shall purchase the obligations issued under this section. To purchase
the obligations, the Secretary of the Treasury may use as a public
debt transaction the proceeds from the sale of securities issued
under chapter 31 of title 31. The purposes for which securities
may be issued under that chapter are extended to include the
purchase of obligations under this subsection. The Secretary of
the Treasury may sell obligations purchased under this section.
A redemption, purchase, or sale of the obligations by the Secretary
of the Treasury is a public debt transaction of the Government.
‘‘(d) DEPOSITS AND REDEMPTIONS.—The Secretary shall deposit
amounts borrowed under this section in the appropriate account
under section 53717 of this title and make redemptions of the
obligations from that account.
‘‘§ 53724. Rights to secured property
‘‘(a) ACQUISITION OF SECURITY RIGHTS.—When the Secretary
makes a payment on, or assumes, an obligation under section
53721 or 53722 of this title, the Secretary acquires the rights
under the security agreement with the obligor in the security held
by the Secretary to guarantee the obligation.
‘‘(b) USE AND DISPOSITION OF SECURED PROPERTY.—Notwith-
standing any other law relating to the acquisition, handling, or
disposal of property by the United States Government, the Secretary
has the right, in the Secretary’s discretion, to complete, reconstruct,
recondition, renovate, repair, maintain, operate, charter, or sell
any property acquired under a security agreement with an obligor,
or to place a vessel so acquired in the National Defense Reserve
Fleet. The terms of a sale under this subsection shall be as approved
by the Secretary.
‘‘§ 53725. Actions against obligor
‘‘(a) IN GENERAL.—For a default under a guaranteed obligation
or related agreement, the Secretary may take any action against
the obligor or another liable party that the Secretary considers
necessary to protect the interests of the United States Government.
A civil action may be brought in the name of the United States
or the obligee. The obligee shall make available to the Government
all records and evidence necessary to prosecute the action.
‘‘(b) TITLE, POSSESSION, AND PURCHASE.—
‘‘(1) IN GENERAL.—The Secretary may—
‘‘(A) accept a conveyance of title to and possession
of property from the obligor or another party liable to
the Secretary; and
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‘‘(B) purchase the property for an amount not greater
than the unpaid principal amount of the obligation and
interest thereon.
‘‘(2) PAYMENT OF EXCESS.—If, through the sale of property,
the Secretary receives an amount of cash greater than the
unpaid principal amount of the obligation, the unpaid interest
on the obligation, and the expenses of collecting those amounts,
the Secretary shall pay the excess to the obligor.
‘‘SUBCHAPTER III—PARTICULAR PROJECTS
‘‘§ 53731. Commercial demonstration ocean thermal energy
conversion facilities and plantships
‘‘(a) IN GENERAL.—Under subchapter I of this chapter, the
Secretary may guarantee or make a commitment to guarantee
the payment of the principal of and interest on an obligation that
aids in financing (including reimbursement of an obligor for expendi-
tures previously made for) the construction, reconstruction, or
reconditioning of a commercial demonstration ocean thermal energy
conversion facility or plantship. This section may be used to guar-
antee obligations for a total of not more than 5 separate facilities
and plantships or a demonstrated 400 megawatt capacity, whichever
comes first.
‘‘(b) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise
provided in this section, a guarantee or commitment to guarantee
under this section is subject to all the provisions applicable to
a guarantee or commitment to guarantee under subchapter I of
this chapter.
‘‘(c) ECONOMIC SOUNDNESS.—The required determination of eco-
nomic soundness under section 53708 of this title applies to a
guarantee or commitment to guarantee for that portion of a facility
or plantship not to be supported with appropriated Federal funds.
‘‘(d) REASONABLENESS OF RISK.—A guarantee or commitment
to guarantee may not be made under this section unless the Sec-
retary of Energy, in consultation with the Secretary, certifies to
the Secretary that, for the facility or plantship for which the guar-
antee or commitment to guarantee is sought, there is sufficient
guarantee of performance and payment to lower the risk to the
United States Government to a reasonable level. In deciding
whether to issue such a certification, the Secretary of Energy shall
consider—
‘‘(1) the successful demonstration of the technology to be
used in the facility at a scale sufficient to establish the likeli-
hood of technical and economic viability in the proposed market;
and
‘‘(2) the need of the United States to develop new and
renewable sources of energy and the benefits to be realized
from the construction and successful operation of the facility
or plantship.
‘‘(e) AMOUNT OF OBLIGATION.—The total principal amount of
an obligation guaranteed under this section may not exceed 87.5
percent of—
‘‘(1) the actual cost or depreciated actual cost of the facility
or plantship; or
‘‘(2) if the facility or plantship is supported with appro-
priated Federal funds, the total principal amount of that portion
of the actual cost or depreciated actual cost for which the
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obligor is obligated to secure financing under the agreement
between the obligor and the Department of Energy or other
Federal agency.
‘‘(f) OTEC DEMONSTRATION FUND.—
‘‘(1) IN GENERAL.—There is a special subaccount, known
as the OTEC Demonstration Fund, in the account established
under section 53717(b)(1) of this title.
‘‘(2) USE AND OPERATION.—The OTEC Demonstration Fund
shall be used for obligation guarantees authorized under this
section that do not qualify under subchapter I of this chapter.
Except as otherwise provided in this section, the OTEC Dem-
onstration Fund shall be operated in the same manner as
the parent account. However—
‘‘(A) amounts received by the Secretary under sub-
chapter I of this chapter related to guarantees or commit-
ments to guarantee made under this section shall be depos-
ited only in the OTEC Demonstration Fund; and
‘‘(B) when obligations issued by the Secretary under
section 53723 of this title related to the OTEC Demonstra-
tion Fund are outstanding, any amount received by the
Secretary under subchapter I of this chapter related to
ocean thermal energy conversion facilities or plantships
shall be deposited in the OTEC Demonstration Fund.
‘‘(3) TRANSFERS.—Assets in the OTEC Demonstration Fund
may be transferred to the parent account when and to the
extent the balance in the OTEC Demonstration Fund exceeds
the total guarantees or commitments to guarantee made under
this section then outstanding, plus obligations issued by the
Secretary under section 53723 of this title related to the OTEC
Demonstration Fund.
‘‘(4) LIABILITY.—The parent account is not liable for a guar-
antee or commitment to guarantee made under this section.
‘‘(5) MAXIMUM
UNPAID
PRINCIPAL
AMOUNT.—The total
unpaid principal amount of the obligations guaranteed with
the backing of the OTEC Demonstration Fund and outstanding
at any one time may not exceed $1,650,000,000.
‘‘(g) ISSUANCE AND PAYMENT OF OBLIGATIONS.—Section 53723
of this title applies to the OTEC Demonstration Fund. However,
obligations issued by the Secretary under that section related to
the OTEC Demonstration Fund shall be payable only from proceeds
realized by the OTEC Demonstration Fund.
‘‘(h) TAXATION OF INTEREST.—Interest on an obligation guaran-
teed under this section shall be included in gross income under
chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. ch.
1).
‘‘§ 53732. Eligible export vessels
‘‘(a) APPLICABLE TERMS.—The Secretary may guarantee an
obligation for an eligible export vessel in accordance with—
‘‘(1) the terms applicable under this chapter for vessels
documented under the laws of the United States; or
‘‘(2) other terms the Secretary determines are more favor-
able than those terms and compatible with export credit terms
offered by foreign governments for the sale of vessels built
in foreign shipyards.
‘‘(b) INTERAGENCY COUNCIL.—
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‘‘(1) ESTABLISHMENT.—There is an interagency council to
carry out this section.
‘‘(2) COMPOSITION.—The council is composed of the fol-
lowing individuals or their designees:
‘‘(A) The Secretary of Transportation, who is the chair-
man of the council.
‘‘(B) The Secretary of the Treasury.
‘‘(C) The Secretary of State.
‘‘(D) The Assistant to the President for Economic Policy.
‘‘(E) The United States Trade Representative.
‘‘(F) The President and Chairman of the Export-Import
Bank of the United States.
‘‘(3) FUNCTIONS.—The council shall—
‘‘(A) obtain information on shipbuilding loan guaran-
tees, direct and indirect subsidies, and other favorable
treatment of shipyards provided by foreign governments
to shipyards in competition with United States shipyards;
‘‘(B) consult regularly with United States shipbuilders
to obtain the essential information about international
shipbuilding competition on which to set terms for loan
guarantees under subsection (a)(2); and
‘‘(C) provide guidance to the Secretary in establishing
terms for loan guarantees under subsection (a)(2).
‘‘(4) ANNUAL REPORT.—Not later than January 31 of each
year, the Secretary shall submit to Congress a report on activi-
ties of the Secretary under this section during the preceding
year. The report shall include—
‘‘(A) documentation of sources of information about
assistance by governments of other countries to shipyards
in those countries; and
‘‘(B) a summary of recommendations made to the Sec-
retary during the preceding year about applications sub-
mitted to the Secretary during that year for loan guaran-
tees to construct eligible export vessels.
‘‘(c) REQUIRED FINDINGS.—
‘‘(1) BENEFIT TO SHIPBUILDING INDUSTRY.—The Secretary
may not guarantee or make a commitment to guarantee an
obligation for an eligible export vessel unless the Secretary
finds that the construction, reconstruction, or reconditioning
of the vessel will aid in the transition of United States ship-
yards to commercial activities or will preserve shipbuilding
assets that would be essential in time of war or national emer-
gency.
‘‘(2) PRIORITY
OF
DOCUMENTED
VESSELS.—The Secretary
may not make a commitment to guarantee an obligation for
an eligible export vessel unless the Secretary determines that
making the commitment will not result in denial of an economi-
cally sound application for a commitment to guarantee an
obligation for a vessel documented under the laws of the United
States and operating in the domestic or foreign commerce of
the United States. The Secretary has sole discretion in making
the determination. In making the determination, the Secretary
shall consider—
‘‘(A) the status and economic soundness of pending
applications for commitments to guarantee obligations for
vessels documented under the laws of the United States
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that are operating or will be operating in the domestic
or foreign commerce of the United States; and
‘‘(B) the amount of guarantee authority available.
‘‘(d) RESTRICTION ON TRANSFER OF VESSEL.—The Secretary may
not guarantee or make a commitment to guarantee an obligation
for an eligible export vessel unless the owner of the vessel agrees
with the Secretary that the vessel will not be transferred to a
country designated by the Secretary of Defense as a country whose
interests are hostile to the interests of the United States.
‘‘(e) REVIEW BY SECRETARY OF DEFENSE.—
‘‘(1) NOTIFICATION.—The Secretary shall promptly notify
the Secretary of Defense of the receipt of an application for
a loan guarantee for an eligible export vessel.
‘‘(2) DISAPPROVAL.—The Secretary of Defense, within 30
days after receiving the notice, may disapprove the guarantee
based on an assessment of the potential use of the vessel
in a manner that may harm the national security interests
of the United States. The Secretary may not disapprove a
guarantee solely because of the type of vessel to be constructed.
‘‘(3) DELEGATION.—The authority of the Secretary of
Defense to disapprove a guarantee under this subsection may
be delegated only to a civilian officer of the Department of
Defense appointed by the President by and with the advice
and consent of the Senate.
‘‘(4) PROHIBITION.—The Secretary may not make a loan
guarantee disapproved by the Secretary of Defense under this
subsection.
‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary may not issue
a commitment to guarantee an obligation for an eligible export
vessel under this chapter after the last date on which such a
commitment may be issued under any treaty or convention entered
into after November 30, 1993, that prohibits guarantee of such
an obligation.
‘‘§ 53733. Shipyard modernization and improvement
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ADVANCED
SHIPBUILDING
TECHNOLOGY.—The term
‘advanced shipbuilding technology’ includes—
‘‘(A) numerically controlled machine tools, robots, auto-
mated process control equipment, computerized flexible
manufacturing systems, associated computer software, and
other technology for improving shipbuilding and related
industrial production that advance the state-of-the-art; and
‘‘(B) novel techniques and processes designed to
improve shipbuilding quality, productivity, and practice,
and 
to 
promote 
sustainable 
development, 
including
engineering 
design, 
quality 
assurance, 
concurrent
engineering, continuous process production technology,
energy 
efficiency, 
waste 
minimization, 
design 
for
recyclability or parts reuse, inventory management,
upgraded worker skills, and communications with cus-
tomers and suppliers.
‘‘(2) GENERAL SHIPYARD FACILITY.—The term ‘general ship-
yard facility’ means—
‘‘(A) for operations on land—
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‘‘(i) a structure or appurtenance thereto designed
for the construction, reconstruction, repair, rehabilita-
tion, or refurbishment of a vessel, including a graving
dock, building way, ship lift, wharf, or pier crane;
‘‘(ii) the land necessary for the structure or appur-
tenance; and
‘‘(iii) equipment that is for use with the structure
or appurtenance and that is necessary for performing
a function referred to in clause (i); and
‘‘(B) for operations not on land, a vessel, floating dry-
dock, or barge built in the United States and used for,
equipped to be used for, or of a type normally used for,
performing a function referred to in subparagraph (A)(i).
‘‘(3) 
MODERN
SHIPBUILDING
TECHNOLOGY.—The 
term
‘modern shipbuilding technology’ means the best available
proven technology, techniques, and processes appropriate to
enhancing the productivity of shipyards.
‘‘(b) GENERAL AUTHORITY.—Under subchapter I of this chapter,
the Secretary may guarantee or make a commitment to guarantee
the payment of the principal of and interest on an obligation for
advanced shipbuilding technology and modern shipbuilding tech-
nology of a general shipyard facility in the United States. Only
a private shipyard is eligible to receive a guarantee.
‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise
provided in this section, a guarantee or commitment to guarantee
under this section is subject to all the provisions applicable to
a guarantee or commitment to guarantee under subchapter I of
this chapter.
‘‘(d) AMOUNT
OF OBLIGATION.—The principal amount of an
obligation guaranteed under this chapter may not exceed 87.5 per-
cent of the actual cost of the advanced shipbuilding technology
or modern shipbuilding technology.
‘‘(e) TRANSFER OF AMOUNTS.—The Secretary may accept the
transfer of amounts from a department, agency, or instrumentality
of the United States Government and may use those amounts
to cover the cost (as defined in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a)) of making guarantees or
commitments to guarantee under this section.
‘‘§ 53734. Replacement of vessels because of changes in oper-
ating standards
‘‘(a) GENERAL AUTHORITY.—Notwithstanding any other provi-
sion of this chapter, the Secretary, on terms the Secretary may
prescribe, may guarantee or make a commitment to guarantee
the payment of the principal of and interest on an obligation that
aids in financing or refinancing (including reimbursement of an
obligor for expenditures previously made for) a contract for the
construction or reconstruction of a vessel if—
‘‘(1) the vessel is designed and to be used for commercial
use in coastwise, intercoastal, or foreign trade;
‘‘(2) the construction or reconstruction is necessary to
replace a vessel that cannot continue to be operated because
of a change required by law in the standards for the operation
of vessels, and the applicant for the guarantee or commitment
would not otherwise legally be able to continue operating ves-
sels in the trades in which the applicant operated vessels
before the change;
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‘‘(3) the applicant is presently engaged in transporting car-
goes in vessels of the type and class that will be constructed
or reconstructed under this section and agrees to employ vessels
constructed or reconstructed under this section as replacements
only for vessels made obsolete by the change in operating
standards;
‘‘(4) the capacity of the vessels to be constructed or
reconstructed under this section will not increase the cargo
carrying capacity of the vessels being replaced;
‘‘(5) the Secretary has not determined that the market
demand for the vessel over its useful life will diminish so
as to make granting the guarantee fiduciarily imprudent;
‘‘(6) the vessel, if to be reconstructed, will have a useful
life of at least 15 years after the reconstruction; and
‘‘(7) the Secretary has considered the criteria specified in
section 53708(a)(3)–(5) of this title.
‘‘(b) TERM AND AMOUNT OF OBLIGATION.—
‘‘(1) TERM.—The term of an obligation guaranteed under
this section may not exceed 25 years.
‘‘(2) AMOUNT.—The amount of an obligation guaranteed
under this section may not exceed 87.5 percent of the actual
cost or depreciated actual cost to the applicant for the construc-
tion or reconstruction of the vessel. The Secretary may not
establish a percentage under this paragraph that is to be
applied uniformly to all guarantees or commitments to guar-
antee made under this section.
‘‘(c) APPLICABILITY
OF OTHER PROVISIONS.—A guarantee or
commitment to guarantee under this section is also subject to
sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) and (e),
53709(a), 53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714,
53717, and 53721–53725 of this title.
‘‘(d) SECURITY AGAINST DEFAULT.—The Secretary shall require
by regulation that an applicant under this section provide adequate
security against default.
‘‘(e) GUARANTEE FEES.—The Secretary may establish a fee for
the guarantee of an obligation under this section that is in addition
to the fee established under section 53714 of this title. The fee
may be—
‘‘(1) an annual fee of not more than an additional 1 percent
added to the fee established under section 53714 of this title;
or
‘‘(2) a fee based on the amount of the obligation versus
the percentage of the obligor’s fleet being replaced by vessels
constructed or reconstructed under this section.
‘‘§ 53735. Fisheries financing and capacity reduction
‘‘(a) DEFINITION.—In this section, the term ‘program’ means
a fishing capacity reduction program established under section 312
of the Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1861a).
‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee
the repayment of debt obligations issued by entities under this
section. Debt obligations to be guaranteed may be issued by any
entity that has been approved by the Secretary and has agreed
with the Secretary to conditions the Secretary considers necessary
for this section to achieve the objective of the program and to
protect the interest of the United States.
Regulations.
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‘‘(c) REQUIREMENTS OF OBLIGATIONS.—A debt obligation guaran-
teed under this section shall—
‘‘(1) be treated in the same manner and to the same extent
as other obligations guaranteed under this chapter, except with
respect to provisions of this chapter that by their nature cannot
be applied to obligations guaranteed under this section;
‘‘(2) have the fishing fees established under the program
paid into a separate subaccount of the fishing capacity reduction
fund established under this section;
‘‘(3) not exceed $100,000,000 in an unpaid principal amount
outstanding at any one time for a program;
‘‘(4) have such maturity (not to exceed 20 years), take
such form, and contain such conditions as the Secretary deter-
mines necessary for the program to which they relate;
‘‘(5) have as the exclusive source of repayment (subject
to the second sentence of subsection (d)(2)) and as the exclusive
payment security, the fishing fees established under the pro-
gram; and
‘‘(6) at the discretion of the Secretary be issued in the
public market or sold to the Federal Financing Bank.
‘‘(d) FISHING CAPACITY REDUCTION FUND.—
‘‘(1) IN
GENERAL.—There is a separate account in the
Treasury, known as the Fishing Capacity Reduction Fund.
Within the Fund, at least one subaccount shall be established
for each program into which shall be paid all fishing fees
established under the program and other amounts authorized
for the program.
‘‘(2) AVAILABILITY OF AMOUNTS.—Amounts in the Fund shall
be available, without appropriation or fiscal year limitation,
to the Secretary to pay the cost of the program, including
payments to financial institutions to pay debt obligations
incurred by entities under this section. Funds available for
this purpose from other amounts available for the program
may also be used to pay those debt obligations.
‘‘(3) INVESTMENT.—Amounts in the Fund that are not cur-
rently needed for the purpose of this section shall be kept
on deposit or invested in obligations of the United States
Government.
‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations
the Secretary considers necessary to carry out this section.
‘‘CHAPTER 539—WAR RISK INSURANCE
‘‘Sec.
‘‘53901.
Definitions.
‘‘53902.
Authority to provide insurance.
‘‘53903.
Insurable interests.
‘‘53904.
Liability insurance for persons involved in war or defense efforts.
‘‘53905.
Agency insurance.
‘‘53906.
Hull insurance valuation.
‘‘53907.
Reinsurance.
‘‘53908.
Additional insurance privately obtained.
‘‘53909.
War risk insurance revolving fund.
‘‘53910.
Administrative.
‘‘53911.
Civil actions for losses.
‘‘53912.
Expiration date.
‘‘§ 53901. Definitions
‘‘In this chapter:
‘‘(1) AMERICAN
VESSEL.—The term ‘American vessel’
includes—
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‘‘(A) a documented vessel with a registry or coastwise
endorsement under chapter 121 of this title;
‘‘(B) an undocumented vessel owned or chartered by
or made available to the United States Government; and
‘‘(C) a tug, barge, or other watercraft (whether or not
documented) owned by a citizen of the United States and
used in essential water transportation or in the fisheries,
except only for sport fishing.
‘‘(2) CARGO.—The term ‘cargo’ includes a loaded or empty
container on a vessel.
‘‘(3) TRANSPORTATION IN THE WATERBORNE COMMERCE OF
THE UNITED STATES.—The term ‘transportation in the water-
borne commerce of the United States’ includes the operation
of a vessel in the fisheries, except only for sport fishing.
‘‘(4) WAR
RISKS.—The term ‘war risks’ includes, to the
extent the Secretary of Transportation determines—
‘‘(A) any part of a loss excluded from marine insurance
coverage under a ‘free of capture or seizure’ clause or
analogous clause; and
‘‘(B) any other loss from a hostile act, including confis-
cation, expropriation, nationalization, or deprivation.
‘‘§ 53902. Authority to provide insurance
‘‘(a) IN GENERAL.—With the approval of the President, and
after such consultation with interested agencies of United States
Government as the President may require, the Secretary of
Transportation may provide insurance and reinsurance against loss
or damage from war risks as provided by this chapter whenever
it appears to the Secretary that insurance adequate for the needs
of the waterborne commerce of the United States cannot be obtained
on reasonable terms and conditions from companies authorized
to do insurance business in a State of the United States.
‘‘(b) CONSIDERATION OF RISK.—Insurance or reinsurance under
this chapter shall be based, insofar as practicable, on consideration
of the risk involved.
‘‘(c) AVAILABILITY OF VESSEL DURING WAR OR NATIONAL EMER-
GENCY.—Insurance or reinsurance for a vessel may be provided
under this chapter only on the condition that the vessel will be
available to the Government in time of war or national emergency.
‘‘§ 53903. Insurable interests
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide
insurance and reinsurance under this chapter for—
‘‘(1) an American vessel, including a vessel under construc-
tion;
‘‘(2) a foreign vessel—
‘‘(A) owned by a citizen of the United States; or
‘‘(B) engaged in transportation in the waterborne com-
merce of the United States or in such other transportation
by water or such other services as the Secretary considers
to be in the interest of the national defense or national
economy of the United States, when so engaged;
‘‘(3) cargo—
‘‘(A) shipped or to be shipped on a vessel insurable
under this section, including by express or registered mail;
‘‘(B) owned by a citizen or resident of the United States;
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‘‘(C) imported to or exported from the United States,
or sold or purchased by a citizen or resident of the United
States, under a contract of sale or purchase the terms
of which provide that the risk of loss by war risks or
the obligation to provide insurance against war risks is
on a citizen or resident of the United States; or
‘‘(D) shipped between ports in the United States;
‘‘(4) disbursements, including advances to masters and gen-
eral average disbursements, and freight and passage money
of a vessel insurable under this section;
‘‘(5) personal effects of an individual on a vessel insurable
under this section;
‘‘(6) loss of life, injury, or detention by an enemy of the
United States after capture, with respect to an individual on
a vessel insurable under this section; and
‘‘(7) statutory or contractual obligations or other liabilities
of a vessel insurable under this section or of the owner or
charterer of such a vessel, of a nature customarily covered
by insurance.
‘‘(b) CONSIDERATIONS FOR FOREIGN VESSELS.—In determining
whether to provide insurance or reinsurance for a foreign vessel,
the Secretary shall consider the characteristics, employment, and
general management of the vessel by the owner or charterer.
‘‘(c) NON-WAR RISKS.—Insurance of a risk under subsection
(a)(5)–(7), insofar as it involves a liability related to an individual
on the vessel, may include risks other than war risks to the extent
the Secretary considers advisable.
‘‘§ 53904. Liability insurance for persons involved in war or
defense efforts
‘‘(a) IN GENERAL.—The Secretary of Transportation may provide
insurance under this chapter against legal liability that a person
may incur in providing services or facilities for a vessel if, in
the opinion of the Secretary, the insurance—
‘‘(1) is required in prosecuting a war or for national defense;
and
‘‘(2) cannot be obtained at reasonable rates or on reasonable
terms and conditions from approved companies authorized to
do insurance business in a State of the United States.
‘‘(b) LIMITATIONS.—Employer liability insurance and worker
compensation insurance against legal liability to employees may
not be provided under this section.
‘‘§ 53905. Agency insurance
‘‘(a) IN GENERAL.—With the approval of the President, an
agency of the United States Government may obtain insurance
provided for by this chapter from the Secretary of Transportation,
except as provided in sections 17302 and 17303 of title 40.
‘‘(b) PREMIUM WAIVERS.—With the approval of the President,
the Secretary of Transportation may provide insurance under this
chapter at the request of the Secretary of Defense and other agen-
cies the President may prescribe, without payment of an insurance
premium if the Secretary of Defense or agency agrees to indemnify
the Secretary of Transportation against loss covered by the insur-
ance. The Secretary of Defense and agencies may make such an
indemnity agreement.
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‘‘(c) PRESIDENTIAL APPROVAL.—The signature of the President
(or an official designated by the President) on the agreement shall
be treated as the approval required by section 53902(a) of this
title.
‘‘§ 53906. Hull insurance valuation
‘‘(a) STATED VALUATION.—The valuation in a hull insurance
policy for actual or constructive total loss of the insured vessel
shall be a stated valuation determined by the Secretary of Transpor-
tation. The stated valuation—
‘‘(1) shall exclude national defense features paid for by
the United States Government; and
‘‘(2) may not exceed the amount that would be payable
if the ownership of the vessel had been requisitioned under
chapter 563 of this title at the time the insurance attached
under the policy.
‘‘(b) REJECTING STATED VALUATION.—Within 60 days after the
insurance attaches under a policy referred to in subsection (a)
or within 60 days after the Secretary determines the valuation,
whichever is later, the insured may reject the valuation and pay,
at the rate provided in the policy, premiums based on the asserted
valuation the insured specifies at the time of rejection. However,
the asserted valuation is not binding on the Government in any
subsequent action on the policy.
‘‘(c) AMOUNT OF CLAIM.—If a vessel is actually or constructively
totally lost and the insured under a policy referred to in subsection
(a) has not rejected the stated valuation determined by the Sec-
retary, the amount of a claim adjusted, compromised, settled,
adjudged, or paid may not exceed the stated valuation. However,
if the insured has rejected the valuation, the insured—
‘‘(1) shall be paid, as a tentative advance only, 75 percent
of the stated valuation; and
‘‘(2) may bring a civil action against the United States
in a court having jurisdiction of the claim to recover a valuation
equal to the just compensation the court determines would
have been payable if the ownership of the vessel had been
requisitioned under chapter 563 of this title at the time the
insurance attached under the policy.
‘‘(d) ADJUSTING PREMIUMS.—If a court makes a determination
as provided under subsection (c)(2), premiums paid under the policy
shall be adjusted based on the court’s determination and the rates
provided for in the policy.
‘‘§ 53907. Reinsurance
‘‘(a) IN GENERAL.—To the extent the Secretary of Transpor-
tation is authorized to provide insurance under this chapter, the
Secretary may provide reinsurance to a company authorized to
do insurance business in a State of the United States. The Secretary
may obtain reinsurance from such a company for any insurance
provided by the Secretary under this chapter.
‘‘(b) RATES.—The Secretary may not provide reinsurance at
rates less than, nor obtain reinsurance at rates more than, the
rates established by the Secretary on the same or similar risks
or the rates charged by the insurance company for the insurance
reinsured, whichever is more advantageous to the Secretary. How-
ever, the Secretary may provide an allowance to the insurance
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company for the costs of services and facilities the company pro-
vides, in an amount the Secretary considers reasonable according
to good business practice. The allowance to the company may not
include any amount for soliciting or stimulating insurance business.
‘‘§ 53908. Additional insurance privately obtained
‘‘With the approval of the Secretary of Transportation, a person
having an insurable interest in a vessel may obtain insurance
on the vessel with other underwriting agents in addition to the
insurance with the Secretary. The Secretary is not entitled to the
benefit of the additional insurance.
‘‘§ 53909. War risk insurance revolving fund
‘‘(a) IN GENERAL.—There is a war risk insurance revolving
fund in the Treasury.
‘‘(b) DEPOSITS.—There shall be deposited in the fund amounts
appropriated to carry out this chapter and amounts received in
carrying out this chapter.
‘‘(c) PAYMENTS.—There shall be paid from the fund amounts
for return premiums, losses, settlements, judgments, and all liabil-
ities incurred by the United States Government under this chapter.
‘‘(d) INVESTMENT.—The Secretary of Transportation may
request the Secretary of the Treasury to invest such portion of
the fund as is not, in the judgment of the Secretary of Transpor-
tation, required to meet the current needs of the fund. These
investments shall be made by the Secretary of the Treasury in
public debt securities of the Government, with maturities suitable
to the needs of the fund, and bearing interest rates determined
by the Secretary of the Treasury, taking into consideration current
market yields on outstanding marketable obligations of the Govern-
ment of comparable maturity. Interest and benefits from the securi-
ties shall be deposited in the fund.
‘‘§ 53910. Administrative
‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying
out this chapter, the Secretary of Transportation may act in accord-
ance with commercial practice in the marine insurance business.
‘‘(b) REGULATIONS.—The Secretary may prescribe regulations
the Secretary considers appropriate to carry out this chapter.
‘‘(c) POLICIES, RATES, AND ANNUAL FEES.—The Secretary may
prescribe and change forms and policies, and fix and change the
amounts insured and rates of premium, under this chapter.
‘‘(d) ANNUAL FEES.—The Secretary may charge and collect an
annual fee in an amount calculated to cover the expenses of proc-
essing applications for insurance, employing underwriting agents,
and appointing experts under this chapter.
‘‘(e) PAYMENT OF CLAIMS AND JUDGMENTS.—The Secretary may
settle and pay claims, and pay judgments against the United States,
related to insurance under this chapter.
‘‘(f) UNDERWRITING AGENTS.—
‘‘(1) IN GENERAL.—The Secretary may, and when the Sec-
retary finds it practical to do so shall, employ a domestic
company or group of domestic companies, authorized to do
marine insurance business in a State of the United States,
to act as underwriting agent for the Secretary. The services
of an underwriting agent may be used in adjusting claims,
but a claim may not be paid until approved by the Secretary.
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‘‘(2) COMPENSATION.—The Secretary may allow the com-
pany or group of companies reasonable compensation for serv-
ices as the underwriting agent. The compensation may include
an allowance for expenses reasonably incurred by the agent,
but may not include any amount for soliciting or stimulating
business.
‘‘(g) FEES FOR ARRANGING INSURANCE.—Except as provided in
subsection (f)(2), the Secretary may not pay an insurance broker
or other person acting in a similar intermediary capacity a fee
or other consideration for participating in arranging insurance when
the Secretary directly insures any of the risk.
‘‘(h) EMPLOYMENT OF MARINE INSURANCE EXPERTS.—The Sec-
retary, without regard to the laws and regulations on the employ-
ment of Federal employees, may appoint and prescribe the duties
of experts in marine insurance as the Secretary considers necessary
to carry out this chapter.
‘‘(i) SERVICES
OF OTHER GOVERNMENT AGENCIES.—With the
consent of another agency of the United States Government, the
Secretary may use information, services, facilities, officers, and
employees of the agency in carrying out this chapter.
‘‘(j) VESSEL LOCATION REPORTING.—The Secretary may pre-
scribe by regulation vessel location reporting requirements for a
vessel insured under this chapter.
‘‘§ 53911. Civil actions for losses
‘‘(a) IN GENERAL.—If there is a disagreement about a loss
insured under this chapter, a civil action in admiralty may be
brought against the United States in the district court of the United
States for the district in which the plaintiff or the plaintiff’s agent
resides. If the plaintiff has no residence in the United States,
the action may be brought in the United States District Court
for the District of Columbia or in the district court for any district
in which the Attorney General agrees to accept service. Any person
who may have an interest in the insurance may be made a party,
either initially or on the motion of either party.
‘‘(b) EXCLUSIVE REMEDY.—A civil action against the United
States under this section is exclusive of any other action by reason
of the same subject matter against an officer, employee, or agent
employed or retained by the Government under this chapter.
‘‘(c) PROCEDURE.—A civil action under this section shall be
heard and determined under chapter 309 of this title.
‘‘(d) TOLLING OF LIMITATIONS PERIOD.—If a claim is filed with
the Secretary of Transportation, the running of the limitations
period for bringing a civil action is suspended until the Secretary
denies the claim, and for 60 days thereafter. The Secretary is
deemed to have denied the claim if the Secretary does not act
on the claim within 6 months after the claim is filed, unless the
Secretary for good cause shown agrees with the claimant on a
different period for the Secretary to act on the claim.
‘‘(e) INTERPLEADER.—If the Secretary acknowledges the indebt-
edness of the Government under the insurance and there is a
dispute about the persons entitled to receive payment, the Govern-
ment may bring a civil action interpleading those persons. The
action shall be brought in the United States District Court for
the District of Columbia or in the district court for the district
in which any of those persons resides. A person not residing or
found in the district may be made a party by service in any
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reasonable manner the court directs. If the court is satisfied that
unknown persons might make a claim under the insurance, the
court may direct service on those unknown persons by publication
in the Federal Register. Judgment after service by publication in
the Federal Register discharges the Government from further
liability to all persons.
‘‘§ 53912. Expiration date
‘‘The authority of the Secretary of Transportation to provide
insurance and reinsurance under this chapter expires on December
31, 2010.
‘‘PART D—PROMOTIONAL PROGRAMS
‘‘CHAPTER 551—COASTWISE TRADE
‘‘Sec.
‘‘55101.
Application of coastwise laws.
‘‘55102.
Transportation of merchandise.
‘‘55103.
Transportation of passengers.
‘‘55104.
Transportation of passengers between Puerto Rico and other ports in the
United States.
‘‘55105.
Transportation of hazardous waste.
‘‘55106.
Merchandise transferred between barges.
‘‘55107.
Empty cargo containers and barges.
‘‘55108.
Platform jackets.
‘‘55109.
Dredging.
‘‘55110.
Transportation of dredged material.
‘‘55111.
Towing.
‘‘55112.
Vessel escort operations and towing assistance.
‘‘55113.
Use of foreign documented oil spill response vessels.
‘‘55114.
Unloading fish from foreign vessels.
‘‘55115.
Supplies on fish processing vessels.
‘‘55116.
Canadian rail lines.
‘‘55117.
Great Lakes rail route.
‘‘55118.
Foreign railroads whose road enters by ferry, tugboat, or towboat.
‘‘55119.
Yukon River.
‘‘55120.
Transshipment of imported merchandise intended for immediate expor-
tation.
‘‘55121.
Transportation of merchandise and passengers on Canadian vessels.
‘‘§ 55101. Application of coastwise laws
‘‘(a) IN GENERAL.—Except as provided in subsection (b), the
coastwise laws apply to the United States, including the island
territories and possessions of the United States.
‘‘(b) EXCEPTIONS.—The coastwise laws do not apply to—
‘‘(1) American Samoa;
‘‘(2) the Northern Mariana Islands, except as provided in
section 502(b) of the Covenant To Establish a Commonwealth
of the Northern Mariana Islands in Political Union With the
United States of America (48 U.S.C. 1801 note);
‘‘(3) Canton Island until the President declares by
proclamation that the coastwise laws apply to Canton Island;
or
‘‘(4) the Virgin Islands until the President declares by
proclamation that the coastwise laws apply to the Virgin
Islands.
‘‘§ 55102. Transportation of merchandise
‘‘(a) DEFINITION.—In this section, the term ‘merchandise’
includes—
‘‘(1) merchandise owned by the United States Government,
a State, or a subdivision of a State; and
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‘‘(2) valueless material.
‘‘(b) REQUIREMENTS.—Except as otherwise provided in this
chapter or chapter 121 of this title, a vessel may not provide
any part of the transportation of merchandise by water, or by
land and water, between points in the United States to which
the coastwise laws apply, either directly or via a foreign port,
unless the vessel—
‘‘(1) is wholly owned by citizens of the United States for
purposes of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with
a coastwise endorsement under chapter 121 or is exempt from
documentation but would otherwise be eligible for such a certifi-
cate and endorsement.
‘‘(c) PENALTY.—Merchandise transported in violation of sub-
section (b) is liable to seizure by and forfeiture to the Government.
Alternatively, an amount equal to the value of the merchandise
(as determined by the Secretary of Homeland Security) or the
actual cost of the transportation, whichever is greater, may be
recovered from any person transporting the merchandise or causing
the merchandise to be transported.
‘‘§ 55103. Transportation of passengers
‘‘(a) IN GENERAL.—Except as otherwise provided in this chapter
or chapter 121 of this title, a vessel may not transport passengers
between ports or places in the United States to which the coastwise
laws apply, either directly or via a foreign port, unless the vessel—
‘‘(1) is wholly owned by citizens of the United States for
purposes of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with
a coastwise endorsement under chapter 121 or is exempt from
documentation but would otherwise be eligible for such a certifi-
cate and endorsement.
‘‘(b) PENALTY.—The penalty for violating subsection (a) is $300
for each passenger transported and landed.
‘‘§ 55104. Transportation of passengers between Puerto Rico
and other ports in the United States
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) CERTIFICATE.—The term ‘certificate’ means a certificate
of financial responsibility for indemnification of passengers for
nonperformance of transportation issued by the Federal Mari-
time Commission under section 44102 of this title.
‘‘(2) PASSENGER
VESSEL.—The term ‘passenger vessel’
means a vessel of similar size, or offering similar service, as
any other vessel transporting passengers under subsection (b).
‘‘(b) EXEMPTION.—Except as otherwise provided in this section,
a vessel not qualified to engage in the coastwise trade may transport
passengers between a port in Puerto Rico and another port in
the United States.
‘‘(c) EXPIRATION OF EXEMPTION.—
‘‘(1) 
WHEN
COASTWISE-QUALIFIED
VESSEL
OFFERING
SERVICE.—On a showing to the Secretary of the department
in which the Coast Guard is operating, by the vessel owner
or charterer, that a United States passenger vessel qualified
to engage in the coastwise trade is offering or advertising
passenger service between a port in Puerto Rico and another
port in the United States pursuant to a certificate, the Secretary
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shall notify the owner or operator of each vessel transporting
passengers under subsection (b) to terminate that transpor-
tation within 270 days after the Secretary’s notification. Except
as provided in subsection (d), the authority to transport pas-
sengers under subsection (b) expires at the end of that 270-
day period.
‘‘(2) WHEN
NON-COASTWISE-QUALIFIED
VESSEL
OFFERING
SERVICE.—On a showing to the Secretary, by the vessel owner
or charterer, that a United States passenger vessel not qualified
to engage in the coastwise trade is offering or advertising
passenger service between a port in Puerto Rico and another
port in the United States pursuant to a certificate, the Secretary
shall notify the owner or operator of each foreign vessel trans-
porting passengers under subsection (b) to terminate that
transportation within 270 days after the Secretary’s notifica-
tion. Except as provided in subsection (d), the authority of
a foreign vessel to transport passengers under subsection (b)
expires at the end of that 270-day period.
‘‘(d) DELAYING EXPIRATION.—If the vessel offering or advertising
the service described in subsection (c) has not begun that service
within 270 days after the Secretary’s notification, the expiration
provided by subsection (c) is delayed until 90 days after the vessel
offering or advertising the service begins that service.
‘‘(e) REINSTATEMENT OF EXEMPTION.—If the Secretary finds that
the service on which an expiration was based is no longer available,
the expired authority to transport passengers is reinstated.
‘‘§ 55105. Transportation of hazardous waste
‘‘(a) IN GENERAL.—The transportation of hazardous waste, as
defined in section 1004(5) of the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. 6903(5)), from a point in the
United States to sea for incineration is deemed to be transportation
of merchandise under section 55102 of this title.
‘‘(b) NONAPPLICATION TO CERTAIN FOREIGN VESSELS.—
‘‘(1) IN
GENERAL.—Subsection (a) does not apply to
transportation performed by a foreign ocean incineration vessel
owned by or under construction on May 1, 1982, for a corpora-
tion wholly owned by citizens of the United States under section
50501(a)–(c) of this title.
‘‘(2) STANDARDS
FOR
INCINERATION
EQUIPMENT.—Inciner-
ation equipment on a vessel described in paragraph (1) must
meet standards of the Coast Guard and the Environmental
Protection Agency.
‘‘(3) INSPECTION.—A vessel described in paragraph (1) shall
be inspected by the Coast Guard, regardless of whether
inspected by the nation in which it is registered. The inspection
shall be the same as would be required of a vessel of the
United States, including drydock inspection and internal exam-
ination of tanks and void spaces. The inspection may be made
concurrently with an inspection by that nation or within one
year after the initial issuance or next scheduled issuance of
the Safety of Life at Sea Safety Construction Certificate. In
making the inspection, the Coast Guard shall refer to the
condition of the hull and superstructure established by the
initial foreign certification as the basis for evaluating the cur-
rent condition of the hull and superstructure. The Coast Guard
shall allow the substitution of fittings, material, apparatus,
Notification.
Deadline.
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equipment, and appliances different from those required for
vessels of the United States if satisfied they are equivalent
and at least as effective as those required for vessels of the
United States. A satisfactory inspection under this paragraph
shall be certified in writing by the Secretary of the department
in which the Coast Guard is operating.
‘‘(c) EFFECTIVE DATE.—Subsection (a) is not effective until an
appropriate vessel has been built and documented under chapter
121 of this title.
‘‘§ 55106. Merchandise transferred between barges
‘‘(a) IN GENERAL.—On terms and conditions the Secretary of
Homeland Security may prescribe by regulation, the Secretary may
suspend the application of section 55102 of this title to the transpor-
tation of merchandise that is transferred, when moving in the
foreign trade of the United States, from a barge certified by the
owner or operator as designed specifically for carriage on a vessel
and carried regularly on a vessel in foreign trade, to another such
barge owned or leased by the same owner or operator. However,
this subsection does not apply to transportation between the conti-
nental United States and noncontiguous States, territories, or
possessions to which the coastwise laws apply.
‘‘(b) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This
section applies to a vessel of foreign registry only if the Secretary
of Homeland Security finds, based on information from the Sec-
retary of State, that the government of the nation of registry extends
reciprocal privileges to vessels of the United States.
‘‘§ 55107. Empty cargo containers and barges
‘‘(a) IN GENERAL.—Subject to subsections (b) and (c), and on
terms and conditions the Secretary of Homeland Security may
prescribe by regulation, section 55102 of this title does not apply
to the transportation of—
‘‘(1) empty cargo vans, empty lift vans, or empty shipping
tanks;
‘‘(2) equipment for use with cargo vans, lift vans, or ship-
ping tanks;
‘‘(3) empty barges specifically designed for carriage aboard
a vessel and equipment (except propulsion equipment) for use
with those barges;
‘‘(4) empty instruments for international traffic exempted
from the customs laws under section 322(a) of the Tariff Act
of 1930 (19 U.S.C. 1322(a)); or
‘‘(5) stevedoring equipment and material.
‘‘(b) CONDITIONS.—
‘‘(1) PARAGRAPHS (1)–(4).—Paragraphs (1)–(4) of subsection
(a) apply only if the items named are owned or leased by
the owner or operator of the vessel and transported for its
use in handling its cargo in foreign trade.
‘‘(2) PARAGRAPH (5).—Paragraph (5) of subsection (a) applies
only if the items named are—
‘‘(A) owned or leased by the owner or operator of the
vessel or by the stevedoring company having the contract
for the loading or unloading of the vessel; and
‘‘(B) transported without charge for use in the handling
of cargo in foreign trade.
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‘‘(c) RECIPROCITY REQUIREMENT FOR FOREIGN VESSELS.—This
section applies to a vessel of foreign registry only if the Secretary
of Homeland Security finds, based on information from the Sec-
retary of State, that the government of the nation of registry extends
reciprocal privileges to vessels of the United States.
‘‘§ 55108. Platform jackets
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) COASTWISE QUALIFIED VESSEL.—The term ‘coastwise
qualified vessel’ means a vessel that has been issued a certifi-
cate of documentation with a coastwise endorsement under
chapter 121 of this title.
‘‘(2) PLATFORM JACKET.—The term ‘platform jacket’ refers
to a single physical component and includes any type of offshore
exploration, development, or production structure or component
thereof, including—
‘‘(A) platform jackets;
‘‘(B) tension leg or SPAR platform superstructures
(including the deck, drilling rig and support utilities, and
supporting structure);
‘‘(C) hull (including vertical legs and connecting pon-
toons or vertical cylinder);
‘‘(D) tower and base sections of a platform jacket;
‘‘(E) jacket structures; and
‘‘(F) deck modules (known as ‘topsides’).
‘‘(b) AUTHORIZED TRANSPORTATION.—Section 55102 of this title
does not apply to the transportation of a platform jacket in or
on a non-coastwise qualified launch barge between two points in
the United States, at one of which there is an installation or
other device within the meaning of section 4(a) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1333(a)), if—
‘‘(1) the launch barge was built before December 31, 2000,
and has a launch capacity of at least 12,000 long tons; and
‘‘(2) the Secretary of Transportation makes a determination,
in accordance with procedures established under subsection
(c), that a suitable coastwise qualified vessel is not available
for use in the transportation and, if needed, launch or installa-
tion of a platform jacket.
‘‘(c) PROCEDURES TO MAXIMIZE USE OF COASTWISE QUALIFIED
VESSELS.—The Secretary of Transportation shall adopt procedures
implementing this section that are reasonably designed to provide
timely information so as to maximize the use of coastwise qualified
vessels. The procedures shall, among other things, establish that
for purposes of this section, a coastwise qualified vessel shall be
deemed to be not available only if—
‘‘(1) on application by an owner or operator for the use
of a non-coastwise qualified launch barge for transportation
of a platform jacket under this section (which application shall
include all relevant information, including engineering details
and timing requirements), the Secretary promptly publishes
a notice in the Federal Register—
‘‘(A) describing the project and the platform jacket
involved;
‘‘(B) advising that all relevant information reasonably
needed to assess the transportation requirements for the
platform jacket will be made available to interested parties
on request; and
Notification.
Federal Register,
publication.
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‘‘(C) requesting that information on the availability
of coastwise qualified vessels be submitted within 30 days
after publication of that notice; and
‘‘(2)(A) no information is submitted to the Secretary within
that 30 day period; or
‘‘(B) the owner or operator of a coastwise qualified vessel
submits information to the Secretary asserting that the owner
or operator has a suitable coastwise qualified vessel available
for the transportation, but the Secretary determines, within
90 days after the notice is first published, that the coastwise
qualified vessel is not suitable or reasonably available for the
transportation.
‘‘§ 55109. Dredging
‘‘(a) IN GENERAL.—Except as provided in subsection (b), a vessel
may engage in dredging in the navigable waters of the United
States only if—
‘‘(1) the vessel is wholly owned by citizens of the United
States for purposes of engaging in the coastwise trade;
‘‘(2) the charterer, if any, is a citizen of the United States
for purposes of engaging in the coastwise trade; and
‘‘(3) the vessel has been issued a certificate of documenta-
tion with a coastwise endorsement under chapter 121 of this
title or is exempt from documentation but would otherwise
be eligible for such a certificate and endorsement.
‘‘(b) DREDGING OF GOLD IN ALASKA.—A documented vessel with
a registry endorsement may engage in the dredging of gold in
Alaska.
‘‘(c) PENALTY.—If a vessel is operated in knowing violation
of this section, the vessel and its equipment are liable to seizure
by and forfeiture to the United States Government.
‘‘§ 55110. Transportation of dredged material
‘‘Section 55102 of this title applies to the transportation of
valueless material or dredged material, regardless of whether it
has commercial value, from a point in the United States or on
the high seas within the exclusive economic zone, to another point
in the United States or on the high seas within the exclusive
economic zone.
‘‘§ 55111. Towing
‘‘(a) IN GENERAL.—Except when towing a vessel in distress,
a vessel may not do any part of any towing described in subsection
(b) unless the towing vessel—
‘‘(1) is wholly owned by citizens of the United States for
purposes of engaging in the coastwise trade; and
‘‘(2) has been issued a certificate of documentation with
a coastwise endorsement under chapter 121 of this title or
is exempt from documentation but would otherwise be eligible
for such a certificate and endorsement.
‘‘(b) APPLICABLE TOWING.—Subsection (a) applies to the towing
of—
‘‘(1) a vessel between ports or places in the United States
to which the coastwise laws apply, either directly or via a
foreign port or place;
‘‘(2) a vessel from point to point within the harbors of
ports or places to which the coastwise laws apply; or
Deadline.
Deadline.
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‘‘(3) a vessel transporting valueless material or dredged
material, regardless of whether it has commercial value, from
a point in the United States or on the high seas within the
exclusive economic zone, to another point in the United States
or on the high seas within the exclusive economic zone.
‘‘(c) PENALTIES.—
‘‘(1) OWNER
AND
MASTER.—The owner and master of a
vessel towing another vessel in violation of this section are
each liable for a penalty of at least $350 but not more than
$1,100. A penalty under this paragraph constitutes a lien on
the vessel. The lien is enforceable in a district court of the
United States for any district in which the vessel is found.
Clearance may not be granted to the vessel until the penalties
have been paid.
‘‘(2) VESSEL.—In addition to the penalties under paragraph
(1), the towing vessel is liable for a penalty of $60 per ton
based on the tonnage of each towed vessel.
‘‘§ 55112. Vessel escort operations and towing assistance
‘‘(a) IN GENERAL.—Except in the case of a vessel in distress,
only a vessel of the United States may perform the following escort
vessel operations within the navigable waters of the United States:
‘‘(1) Operations that commence or terminate at a port or
place in the United States.
‘‘(2) Operations required by United States law or regulation.
‘‘(3) Operations provided in whole or in part within or
through navigation facilities owned, maintained, or operated
by the United States Government or the approaches to those
facilities, other than facilities operated by the St. Lawrence
Seaway Development Corporation on the St. Lawrence River
portion of the Seaway.
‘‘(b) ESCORT VESSELS.—For purposes of this section, an escort
vessel is—
‘‘(1) any vessel that is assigned and dedicated to assist
another vessel, whether or not tethered to that vessel, solely
as a safety precaution to assist in controlling the speed or
course of the assisted vessel in the event of a steering or
propulsion equipment failure, or any other similar emergency
circumstance, or in restricted waters where additional assist-
ance in maneuvering the vessel is required to ensure its safe
operation; and
‘‘(2) in the case of a vessel being towed under section
55111 of this title, any vessel that is assigned and dedicated
to the vessel being towed in addition to any towing vessel
required under that section.
‘‘(c) RELATIONSHIP TO OTHER LAW.—This section does not affect
section 55111 of this title.
‘‘(d) PENALTY.—A person violating this section is liable to the
Government for a civil penalty of not more than $10,000 for each
day during which the violation occurs.
‘‘§ 55113. Use of foreign documented oil spill response vessels
‘‘Notwithstanding any other provision of law, an oil spill
response vessel documented under the laws of a foreign country
may operate in waters of the United States on an emergency
and temporary basis, for the purpose of recovering, transporting,
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and unloading in a United States port oil discharged as a result
of an oil spill in or near those waters, if—
‘‘(1) an adequate number and type of oil spill response
vessels documented under the laws of the United States cannot
be engaged to recover oil from an oil spill in or near those
waters in a timely manner, as determined by the Federal
On-Scene Coordinator for a discharge or threat of a discharge
of oil; and
‘‘(2) the foreign country has by its laws accorded to vessels
of the United States the same privileges accorded to vessels
of the foreign country under this section.
‘‘§ 55114. Unloading fish from foreign vessels
‘‘(a) PROHIBITIONS.—Except as otherwise provided by this sec-
tion or a treaty or convention to which the United States is a
party, a foreign vessel may not unload, in a port of the United
States—
‘‘(1) its catch of fish taken on board on the high seas
or fish products processed from that catch of fish; or
‘‘(2) fish or fish products taken on board that vessel on
the high seas from a vessel engaged in fishing operations or
the processing of fish or fish products.
‘‘(b) REGULATIONS ON OBTAINING INFORMATION.—The Secretary
of Commerce may prescribe regulations the Secretary considers
necessary to obtain information on the transportation of fish prod-
ucts by vessels of the United States for foreign fish processing
vessels to points in the United States.
‘‘(c) VIRGIN ISLANDS.—
‘‘(1) IN GENERAL.—A foreign vessel of not more than 50
feet overall in length may unload its catch of fresh fish (whole
or with the heads, viscera, or fins removed, but not frozen,
otherwise processed, or further advanced) in a port of the
Virgin Islands for immediate consumption in those islands.
Fish unloaded under this paragraph may be sold or transferred
only for immediate consumption. In the absence of satisfactory
evidence that a sale or transfer to an agent, representative,
or employee of a freezer or cannery is for immediate consump-
tion, the sale or transfer is deemed not to be for immediate
consumption. This paragraph does not prohibit the freezing,
smoking, or other processing of fresh fish by the ultimate
consumer of the fish.
‘‘(2) SEIZURE, FORFEITURE, AND PENALTY.—Fish unloaded
in the Virgin Islands that are retained, sold, or transferred,
except as allowed by paragraph (1), are liable to seizure by
and forfeiture to the United States Government. A person
retaining, selling, transferring, buying, or receiving the fish
is liable to the Government for a civil penalty of not more
than $1,000 for each violation. A penalty or forfeiture under
this paragraph may be compromised, modified, or remitted
under section 2107(b) of this title.
‘‘(d) NORTHERN MARIANA ISLANDS.—Subsection (a) does not
apply to the Northern Mariana Islands.
Virgin Islands.
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‘‘§ 55115. Supplies on fish processing vessels
‘‘Section 55102 of this title does not apply to supplies aboard
a United States documented fish processing vessel that are nec-
essary and used for processing or assembling fishery products
aboard such a vessel.
‘‘§ 55116. Canadian rail lines
‘‘Section 55102 of this title does not apply to the transportation
of merchandise between points in the continental United States,
including Alaska, over through routes in part over Canadian rail
lines and connecting water facilities if the routes are recognized
by the Surface Transportation Board and rate tariffs for the routes
have been filed with the Board.
‘‘§ 55117. Great Lakes rail route
‘‘Section 55102 of this title does not apply to the transportation
of merchandise loaded on a railroad car or to a motor vehicle
with or without a trailer, and with its passengers or contents
when accompanied by the operator, when the railroad car or motor
vehicle is transported in a railroad car ferry operated between
fixed terminals on the Great Lakes as part of a rail route, if—
‘‘(1) the car ferry is owned by a common carrier by water
and operated as part of a rail route with the approval of
the Surface Transportation Board;
‘‘(2) the stock of the common carrier by water, or its prede-
cessor, was owned or controlled by a common carrier by rail
prior to June 5, 1920;
‘‘(3) the stock of the common carrier owning the car ferry
is, with the approval of the Board, now owned or controlled
by a common carrier by rail; and
‘‘(4) the car ferry is built in and documented under the
laws of the United States.
‘‘§ 55118. Foreign railroads whose road enters by ferry, tug-
boat, or towboat
‘‘A foreign railroad, whose road enters the United States by
ferry, tugboat, or towboat, may own and operate a vessel not having
a coastwise endorsement in connection with the water transpor-
tation of the passenger, freight, express, baggage, and mail cars
used by that road, together with the passengers, freight, express
matter, baggage, and mails transported in those cars. However,
the foreign railroad is subject to the same restrictions imposed
by law on a vessel of the United States entering a port of the
United States from the same foreign country. Except as otherwise
authorized by this chapter, the ferry, tugboat, or towboat may
not, under penalty of forfeiture, be used in the transportation of
merchandise between ports or places in the United States to which
the coastwise laws apply.
‘‘§ 55119. Yukon River
‘‘Section 55102 of this title does not apply to the transportation
of merchandise on the Yukon River until the Alaska Railroad is
completed and the Secretary of Transportation finds that proper
facilities will be available for transportation by citizens of the
United States to properly handle the traffic.
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‘‘§ 55120. Transshipment of imported merchandise intended
for immediate exportation
‘‘The Secretary of Homeland Security may prescribe regulations
for the transshipment and transportation of merchandise that is
imported into the United States by sea for immediate exportation
to a foreign port by sea, or by a river, the right to ascend or
descend which for the purposes of commerce is secured by treaty
to the citizens of the United States and the subjects of a foreign
power.
‘‘§ 55121. Transportation of merchandise and passengers on
Canadian vessels
‘‘(a) BETWEEN ROCHESTER AND ALEXANDRIA BAY.—Until pas-
senger service is established by vessels of the United States between
the port of Rochester, New York, and the port of Alexandria Bay,
New York, the Secretary of Homeland Security may issue annually
permits to Canadian passenger vessels to transport passengers
between those ports. Canadian vessels holding such a permit are
not subject to section 55103 of this title.
‘‘(b) WITHIN ALASKA OR BETWEEN ALASKA AND OTHER POINTS
IN
THE UNITED STATES.—Until the Secretary of Transportation
determines that service by vessels of the United States is available
to provide the transportation described in paragraph (1) or (2),
sections 55102 and 55103 of this title do not apply to the transpor-
tation on Canadian vessels of—
‘‘(1) passengers between ports in southeastern Alaska; or
‘‘(2) passengers or merchandise between Hyder, Alaska,
and other points in southeastern Alaska or in the United States
outside Alaska.
‘‘CHAPTER 553—PASSENGER AND CARGO PREFERENCES
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘55301.
Priority loading for coal.
‘‘55302.
Transportation of United States Government personnel.
‘‘55303.
Motor vehicles owned by United States Government personnel.
‘‘55304.
Exports financed by the United States Government.
‘‘55305.
Cargoes procured, furnished, or financed by the United States Govern-
ment.
‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF AGRICULTURAL
COMMODITIES
‘‘55311.
Findings and purposes.
‘‘55312.
Determining prevailing world market price.
‘‘55313.
Exemption of certain agricultural exports from cargo preference provisions.
‘‘55314.
Transportation requirements for certain exports sponsored by the Sec-
retary of Agriculture.
‘‘55315.
Minimum tonnage.
‘‘55316.
Financing the transportation of agricultural commodities.
‘‘55317.
Termination of subchapter.
‘‘55318.
Effect on other law.
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS
‘‘55331.
Definitions.
‘‘55332.
Designating American Great Lakes vessels.
‘‘55333.
Exemption from restriction on transporting certain cargo.
‘‘55334.
Restrictions on operations.
‘‘55335.
Revocations and terminations of designations.
‘‘55336.
Civil penalty.
New York.
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‘‘SUBCHAPTER I—GENERAL
‘‘§ 55301. Priority loading for coal
‘‘A vessel engaged in the coastwise transportation of coal pro-
duced in the United States, from a port in the United States
to another port in the United States, shall be given priority in
loading at any of those ports ahead of a waiting vessel engaged
in the export transportation of coal produced in the United States.
However, if the Secretary of Transportation finds that it is in
the national interest, the Secretary may eliminate this priority
loading at any port. The Secretary shall report to Congress within
30 days an action eliminating priority loading under this section.
‘‘§ 55302. Transportation of United States Government per-
sonnel
‘‘(a) IN GENERAL.—An officer or employee of the United States
Government traveling by sea on official business overseas or to
or from a territory or possession of the United States shall travel
and transport personal effects on a vessel documented under the
laws of the United Sates if such a vessel is available, unless the
necessity of the mission requires the use of a foreign vessel.
‘‘(b) REGULATIONS.—The Administrator of General Services
shall prescribe regulations under which agencies may not pay for
or reimburse an officer or employee for travel or transportation
expenses incurred on a foreign vessel in the absence of satisfactory
proof of the necessity of using the vessel.
‘‘§ 55303. Motor vehicles owned by United States Govern-
ment personnel
‘‘Notwithstanding any other law, privately-owned American
shipping services may be used to transport motor vehicles owned
by personnel of the United States Government whenever transpor-
tation of those vehicles at Government expense is otherwise author-
ized by law.
‘‘§ 55304. Exports financed by the United States Government
‘‘It is the sense of Congress that any loans made by an
instrumentality of the United States Government to foster the
exporting of agricultural or other products shall provide that the
products may be transported only on vessels of the United States
unless, as to any or all of those products, the Secretary of Transpor-
tation, after investigation, certifies to the instrumentality that ves-
sels of the United States are not available in sufficient number,
in sufficient tonnage capacity, on necessary schedules, or at reason-
able rates.
‘‘§ 55305. Cargoes procured, furnished, or financed by the
United States Government
‘‘(a) DEFINITION.—In this section, the term ‘privately-owned
commercial vessel of the United States’ does not include a vessel
that, after September 21, 1961, was built or rebuilt outside the
United States or documented under the laws of a foreign country,
until the vessel has been documented under the laws of the United
States for at least 3 years.
‘‘(b) MINIMUM TONNAGE.—When the United States Government
procures, contracts for, or otherwise obtains for its own account,
or furnishes to or for the account of a foreign country without
Reports.
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provision for reimbursement, any equipment, materials, or commod-
ities, within or without the United States, or advances funds or
credits, or guarantees the convertibility of foreign currencies in
connection with the furnishing of the equipment, materials, or
commodities, the appropriate agencies shall take steps necessary
and practicable to ensure that at least 50 percent of the gross
tonnage of the equipment, materials, or commodities (computed
separately for dry bulk carriers, dry cargo liners, and tankers)
which may be transported on ocean vessels is transported on pri-
vately-owned commercial vessels of the United States, to the extent
those vessels are available at fair and reasonable rates for commer-
cial vessels of the United States, in a manner that will ensure
a fair and reasonable participation of commercial vessels of the
United States in those cargoes by geographic areas.
‘‘(c) WAIVERS.—The President, the Secretary of Defense, or Con-
gress (by concurrent resolution or otherwise) may waive this section
temporarily by—
‘‘(1) declaring the existence of an emergency justifying a
waiver; and
‘‘(2) notifying the appropriate agencies of the waiver.
‘‘(d) PROGRAMS OF OTHER AGENCIES.—An agency having respon-
sibility under this section shall administer its programs with respect
to this section under regulations prescribed by the Secretary of
Transportation. The Secretary shall review the administration of
those programs and report annually to Congress on their adminis-
tration.
‘‘SUBCHAPTER II—EXPORT TRANSPORTATION OF
AGRICULTURAL COMMODITIES
‘‘§ 55311. Findings and purposes
‘‘(a) FINDINGS.—Congress finds that—
‘‘(1) a productive and healthy agricultural industry and
a strong and active United States maritime industry are vitally
important to the economic well-being and security of the United
States;
‘‘(2) both industries must compete in international markets
increasingly dominated by foreign trade barriers and the sub-
sidization practices of foreign governments; and
‘‘(3) increased agricultural exports and the use of merchant
vessels of the United States contribute positively to the United
States balance of trade and generate employment opportunities
in the United States.
‘‘(b) PURPOSES.—The purposes of this subchapter are to—
‘‘(1) enable the Secretary of Agriculture to plan export
programs effectively, by clarifying the ocean transportation
requirements applicable to those programs;
‘‘(2) take immediate and positive steps to promote the
growth of the cargo-carrying capacity of the United States
merchant marine;
‘‘(3) expand international trade in United States agricul-
tural commodities and products and develop, maintain, and
expand markets for United States agricultural exports;
‘‘(4) improve the efficiency of administration of both the
commodity purchasing and selling activities and the ocean
transportation activities associated with export programs spon-
sored by the Secretary;
Reports.
Regulations.
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‘‘(5) stimulate and promote the agricultural and maritime
industries of the United States and encourage cooperative
efforts by both industries to address their common problems;
and
‘‘(6) provide for the appropriate disposition of these findings
and purposes.
‘‘§ 55312. Determining prevailing world market price
‘‘(a) AGRICULTURAL COMMODITIES
AND PRODUCTS.—The pre-
vailing world market price for agricultural commodities or their
products shall be determined under this subchapter under proce-
dures prescribed by the Secretary of Agriculture. The Secretary
shall prescribe the procedures by regulation, with notice and oppor-
tunity for public comment under section 553 of title 5.
‘‘(b) SERVICES
AND
NON-AGRICULTURAL
COMMODITIES
AND
PRODUCTS.—If a determination of the prevailing world market price
of any other type of materials, goods, equipment, or service is
required to determine whether a barter or exchange transaction
is subject to section 55314(b)(6) or (7) of this title, the determination
shall be made by the Secretary of Agriculture in consultation with
the heads of other appropriate agencies.
‘‘§ 55313. Exemption of certain agricultural exports from
cargo preference provisions
‘‘Sections 55304 and 55305 of this title do not apply to export
activities of the Secretary of Agriculture or the Commodity Credit
Corporation under which—
‘‘(1) agricultural commodities or their products acquired
by the Corporation are made available to United States
exporters, users, processors, or foreign purchasers for the pur-
pose of developing, maintaining, or expanding export markets
for United States agricultural commodities or their products
at prevailing world market prices;
‘‘(2) payments are made available to United States
exporters, users, or processors or, except as provided in section
55314 of this title, cash grants are made available to foreign
purchasers, for the purpose described in paragraph (1);
‘‘(3) commercial credit guarantees are blended with direct
credits from the Corporation to reduce the effective rate of
interest on export sales of United States agricultural commod-
ities or their products;
‘‘(4) credit or credit guarantees for not more than 3 years
are extended by the Corporation to finance or guarantee export
sales of United States agricultural commodities or their prod-
ucts; or
‘‘(5) agricultural commodities or their products owned or
controlled by or under loan from the Corporation are exchanged
or bartered for materials, goods, equipment, or services at least
equal in value to the agricultural commodities or their products
for which they are exchanged or bartered (determined on the
basis of prevailing world market prices at the time of the
exchange or barter), but this paragraph does not exempt from
the cargo preference provisions referred to in section 55314(b)
of this title any requirement otherwise applicable to the mate-
rials, goods, equipment, or services imported under the trans-
action.
Regulations.
Notification.
Public comment.
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‘‘§ 55314. Transportation requirements for certain exports
sponsored by the Secretary of Agriculture
‘‘(a) MINIMUM TONNAGE.—
‘‘(1) IN GENERAL.—In addition to the requirement under
section 55305 of this title for the transportation of a percentage
of gross tonnage on commercial vessels of the United States,
25 percent of the gross tonnage of agricultural commodities
or their products specified in subsection (b) shall be transported
each calendar year on commercial vessels of the United States
that—
‘‘(A) are necessary for national security; and
‘‘(B) if more than 25 years old, were rebuilt within
the last 5 years and certified by the Secretary of Transpor-
tation as having a useful life of at least 5 years after
that rebuilding.
‘‘(2) CALENDAR YEAR.—To provide for effective and equitable
administration of the cargo preference laws, the calendar year
for the purpose of compliance with minimum percentage
requirements is the 12-month period beginning October 1 of
each year.
‘‘(b) APPLICABLE EXPORT ACTIVITY.—This section applies to
export activity (except inspection or weighing activities, other activi-
ties carried out for health or safety, or technical assistance provided
in the handling of commercial transactions) of the Secretary of
Agriculture or the Commodity Credit Corporation—
‘‘(1) carried out under the Agricultural Trade Development
and Assistance Act of 1954 (7 U.S.C. 1691 et seq.);
‘‘(2) carried out under section 416 of the Agricultural Act
of 1949 (7 U.S.C. 1431);
‘‘(3) carried out under the Bill Emerson Humanitarian
Trust Act (7 U.S.C. 1736f–1);
‘‘(4) under which agricultural commodities or their products
are—
‘‘(A) donated through foreign governments or private
or public agencies, including intergovernmental organiza-
tions; or
‘‘(B) sold for foreign currencies or for dollars on credit
terms of more than 10 years;
‘‘(5) under which agricultural commodities or their products
are made available for emergency food relief at less than pre-
vailing world market prices;
‘‘(6) under which a cash grant is made directly or through
an intermediary to a foreign purchaser to enable the purchaser
to obtain United States agricultural commodities or their prod-
ucts in an amount greater than the difference between the
prevailing world market price and the United States market
price, free along side vessel at a United States port; or
‘‘(7) under which agricultural commodities owned or con-
trolled by or under loan from the Corporation are exchanged
or bartered for materials, goods, equipment, or services pro-
duced in foreign countries, except export activities described
in section 55313(5) of this title.
‘‘(c) ADDITIONAL REQUIREMENTS.—
‘‘(1) APPLICATION OF SECTION 55305.—The requirement for
transportation on vessels of the United States under subsection
(a) is subject to the same terms and conditions as provided
in section 55305 of this title.
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‘‘(2) ALLOCATION OF COMMODITIES.—Subject to paragraph
(3), in carrying out this section and section 55305 of this title,
the Corporation shall take steps necessary and practicable,
and consistent with this section and section 55305, without
detriment to any port range to allocate, on the principle of
lowest landed cost without regard to the country of registry
of the vessel, 25 percent of the bagged, processed, or fortified
commodities provided under title II of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1721 et
seq.).
‘‘(3) CALCULATIONS.—In carrying out paragraph (2), first
there shall be calculated the allocation of 100 percent of the
quantity to be procured on an overall lowest landed cost basis
without regard to the country of registry of the vessel, and
then 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 transportation on vessels
of the United States under this section and section 55305
of this title do not apply to commodities allocated to the Great
Lakes port range under paragraph (2). Commodities allocated
to the Great Lakes port range under paragraph (2) may not
be reallocated or diverted to another port range to meet those
requirements to the extent that the total tonnage of commod-
ities to which paragraph (2) applies that is furnished and
transported from the Great Lakes port range is less than 25
percent of the total annual tonnage of the commodities fur-
nished.
‘‘(4) AWARDING
CONTRACTS.—In awarding a contract for
the transportation by vessel of commodities from the Great
Lakes port range pursuant to an export activity referred to
in subsection (b), an agency—
‘‘(A) shall consider expressions of freight interest for
any vessel from a vessel operator who meets reasonable
requirements for financial and operational integrity; and
‘‘(B) 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 transpor-
tation would not be provided on a liner vessel, as that
term is used in the Shipping Act of 1984, as in effect
on November 14, 1995), if the person otherwise satisfies
reasonable requirements for financial and operational
integrity.
‘‘(5) NONAVAILABILITY
OF
VESSELS.—A determination of
nonavailability of vessels of the United States resulting from
the application of this subsection may not reduce the gross
tonnage of commodities required by this section and section
55305 of this title to be transported on vessels of the United
States.
‘‘§ 55315. Minimum tonnage
‘‘(a) DEFINITION.—In this section, the term ‘base period’ means
the 5-year period running from the sixth through the second prior
fiscal years.
‘‘(b) REQUIREMENT.—For each fiscal year, the minimum
quantity of agricultural commodities to be exported under programs
subject to section 55314 of this title is the average of the tonnage
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exported under those programs during the base period, discarding
the high and low years.
‘‘(c) WAIVERS.—The President may waive the minimum quantity
for a fiscal year under this section if the President determines
and reports to Congress, together with reasons, that the quantity
cannot be used effectively for the purposes of those programs or,
based on a certification by the Secretary of Agriculture, that the
commodities are not available for reasons that include the unavail-
ability of funds.
‘‘§ 55316. Financing 
the 
transportation 
of 
agricultural
commodities
‘‘(a) FINANCING
OF INCREASED CHARGES.—The Secretary of
Transportation shall finance any increased ocean freight charges
incurred in any fiscal year that result from the application of
section 55314 of this title.
‘‘(b) REIMBURSEMENT OF INCREASED CHARGES.—
‘‘(1) IN GENERAL.—The Secretary of Transportation shall
reimburse the Secretary of Agriculture and the Commodity
Credit Corporation for the amount by which, in any fiscal
year—
‘‘(A) the total cost of ocean freight and ocean freight
differential for which obligations are incurred by the Sec-
retary of Agriculture and the Corporation on exports of
agricultural commodities and their products under the agri-
cultural export programs specified in section 55314(b) of
this title; exceeds
‘‘(B) 20 percent of the value of the commodities and
their products and the cost of the ocean freight and ocean
freight differential on which obligations are incurred by
the Secretary of Agriculture and the Corporation during
that fiscal year.
‘‘(2) COMMODITIES SHIPPED FROM INVENTORY.—For purposes
of this subsection, commodities shipped from the inventory
of the Corporation shall be valued as provided in section 412(d)
of the Agricultural Trade Development and Assistance Act of
1954 (7 U.S.C. 1736f(d)).
‘‘(c) ISSUANCE AND PURCHASE OF OBLIGATIONS.—
‘‘(1) ISSUANCE.—To meet the expenses required to be
assumed under subsections (a) and (b), the Secretary of
Transportation shall issue obligations to the Secretary of the
Treasury. The Secretary of Transportation, with the approval
of the Secretary of the Treasury, shall prescribe the form,
denomination, maturity, and other terms (except the interest
rate) of the obligations. The Secretary of the Treasury shall
set the interest rate for the obligations, considering the average
market yield on outstanding marketable obligations of the
United States Government of comparable maturities during
the month before the obligations are issued.
‘‘(2) PURCHASE.—The Secretary of the Treasury shall pur-
chase the obligations issued under this subsection. To purchase
the obligations, the Secretary of the Treasury may use as
a public debt transaction the proceeds from the sale of securities
issued under chapter 31 of title 31. The purposes for which
securities may be issued under that chapter are extended to
include the purchase of obligations under this subsection. A
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redemption or purchase of the obligations by the Secretary
of the Treasury is a public debt transaction of the Government.
‘‘(d) SOURCE OF FUNDS FOR REIMBURSEMENT.—Reimbursement
of the Secretary of Transportation for costs incurred under this
section shall be made with appropriated funds rather than through
cancellation of notes.
‘‘(e) APPROPRIATIONS.—
‘‘(1) AUTHORIZATION.—Each fiscal year, there is authorized
to be appropriated an amount sufficient to reimburse the Sec-
retary of Transportation for the costs incurred under this sec-
tion, including administrative expenses and the principal and
interest due on obligations issued to the Secretary of the
Treasury.
‘‘(2) APPROPRIATION FOR ADMINISTRATIVE EXPENSES.—Each
fiscal year, such amounts as may be necessary are hereby
appropriated to pay interest and to liquidate debt on obligations
issued to the Secretary of the Treasury under this section.
‘‘(f) NOTIFICATION TO CONGRESS OF INSUFFICIENCY.—If the Sec-
retary of Transportation is unable to obtain the funds necessary
to finance the increased ocean freight charges resulting from the
requirements of subsections (a) and (b) and section 55314(a) of
this title, the Secretary shall notify Congress within 10 working
days of the discovery of the insufficiency.
‘‘§ 55317. Termination of subchapter
‘‘This subchapter terminates 90 days after the date on which
a notification is made under section 55316(f) of this title, except
for shipments of agricultural commodities and their products subject
to contracts made before the end of that 90-day period, unless
within that 90-day period the Secretary of Transportation proclaims
that funds are available to finance increased freight charges
resulting from the requirements of sections 55314(a) and 55316(a)
and (b) of this title. On the termination of this subchapter under
this section—
‘‘(1) this subchapter does not exempt export activities from,
or subject export activities to, the cargo preference laws; and
‘‘(2) the 50-percent requirement in section 55305 of this
title remains in effect.
‘‘§ 55318. Effect on other law
‘‘This subchapter does not affect chapter 5 of title 5.
‘‘SUBCHAPTER III—AMERICAN GREAT LAKES VESSELS
‘‘§ 55331. Definitions
‘‘In this subchapter:
‘‘(1) AMERICAN GREAT LAKES VESSEL.—The term ‘American
Great Lakes vessel’ means a vessel so designated under section
55332 of this title, but only during the period the designation
is in effect.
‘‘(2) GREAT LAKES.—The term ‘Great Lakes’ means Lake
Superior, Lake Michigan, Lake Huron, Lake Erie, Lake Ontario,
the Saint Lawrence River west of Saint Regis, New York,
and their connecting and tributary waters.
‘‘(3) GREAT
LAKES
SHIPPING
SEASON.—The term ‘Great
Lakes shipping season’ means the period each year during
which the Saint Lawrence Seaway is open for navigation by
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vessels, as declared by the Saint Lawrence Seaway Develop-
ment Corporation.
‘‘§ 55332. Designating American Great Lakes vessels
‘‘(a) DESIGNATIONS.—The Secretary of Transportation shall des-
ignate a vessel as an American Great Lakes vessel if—
‘‘(1) an application for designation is submitted to the Sec-
retary under regulations prescribed by the Secretary;
‘‘(2) the vessel is documented under the laws of the United
States;
‘‘(3) the vessel, on the effective date of the designation,
is—
‘‘(A) at least 1, but not more than 6, years old; or
‘‘(B) at least 1, but not more than 11, years old if
the Secretary finds that suitable vessels are not available
to provide the type of service for which the vessel will
be used after the designation;
‘‘(4) the vessel has not previously been designated as an
American Great Lakes vessel; and
‘‘(5) the owner makes an agreement as provided under
subsection (b).
‘‘(b) AGREEMENTS.—A vessel may be designated as an American
Great Lakes vessel only if the person that will be the owner of
the vessel at the time of the designation makes an agreement
with the Secretary providing that if the Secretary determines that
the vessel is necessary to the defense of the United States, the
United States Government will have an exclusive right, during
the 120-day period following the date of a revocation of the designa-
tion under section 55335 of this title, to purchase the vessel for
a price equal to the greater of—
‘‘(1) the approximate world market value of the vessel;
or
‘‘(2) the cost of the vessel to the owner less a reasonable
amount for depreciation.
‘‘(c) CERTAIN FOREIGN DOCUMENTATION AND SALE NOT PROHIB-
ITED.—Notwithstanding any other law, if the Government does
not exercise its right of purchase under an agreement under sub-
section (b), the owner of the vessel is not prohibited from—
‘‘(1) documenting the vessel under the laws of a foreign
country; or
‘‘(2) selling the vessel to a person not a citizen of the
United States.
‘‘(d) REGULATIONS.—The Secretary shall prescribe regulations
establishing requirements for submitting applications under this
section.
‘‘§ 55333. Exemption from restriction on transporting certain
cargo
‘‘The 3-year documentation requirement of section 55305(a) of
this title does not apply to a vessel designated as an American
Great Lakes vessel during the period of its designation.
‘‘§ 55334. Restrictions on operations
‘‘(a) PROHIBITIONS.—Except as provided in subsection (b), an
American Great Lakes vessel may not be used to—
‘‘(1) engage in trade—
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‘‘(A) from a port in the United States that is not
located on the Great Lakes; or
‘‘(B) between ports in the United States;
‘‘(2) transport bulk cargo (as defined in section 40102 of
this title) that is subject to section 55305 or 55314 of this
title or section 2631 of title 10; or
‘‘(3) provide a service (except ocean freight service) as—
‘‘(A) a contract carrier; or
‘‘(B) a common carrier on a fixed advertised schedule
offering frequent sailings at regular intervals in the foreign
trade of the United States.
‘‘(b) OFF-SEASON EXCEPTION.—An American Great Lakes vessel
may be used for not more than 90 days during any 12-month
period to engage in trade prohibited by subsection (a)(1)(A), except
during the Great Lakes shipping season.
‘‘§ 55335. Revocations and terminations of designations
‘‘(a) REVOCATIONS.—After notice and an opportunity for a
hearing, the Secretary of Transportation may revoke a designation
of a vessel as an American Great Lakes vessel if the Secretary
finds that—
‘‘(1) the vessel does not meet a requirement for the designa-
tion;
‘‘(2) the vessel has been operated in violation of this sub-
chapter; or
‘‘(3) the owner or operator of the vessel has violated an
agreement made under section 55332(b) of this title.
‘‘(b) TERMINATIONS.—On petition and a showing of good cause
by the owner of a vessel, the Secretary may terminate the designa-
tion of a vessel as an American Great Lakes vessel. The Secretary
may impose conditions in a termination order to prevent significant
adverse effects on other operators of vessels of the United States.
‘‘§ 55336. Civil penalty
‘‘After notice and an opportunity for a hearing, the Secretary
of Transportation may impose a civil penalty of not more than
$1,000,000 on the owner of an American Great Lakes vessel for
any act for which the designation may be revoked under section
55335 of this title.
‘‘CHAPTER 555—MISCELLANEOUS
‘‘Sec.
‘‘55501.
Mobile trade fairs.
‘‘§ 55501. Mobile trade fairs
‘‘(a) IN GENERAL.—The Secretary of Commerce shall encourage
and promote the development and use of mobile trade fairs designed
to show and sell the products of United States business and agri-
culture at foreign ports and at other commercial centers throughout
the world where the operators of the fairs use, insofar as practicable,
vessels and aircraft of the United States in transporting their
exhibits.
‘‘(b) TECHNICAL AND FINANCIAL ASSISTANCE.—When the Sec-
retary determines that a mobile trade fair provides an economical
and effective means of promoting export sales, the Secretary may
provide to the operator of the fair—
‘‘(1) technical assistance and support; and
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‘‘(2) financial assistance to defray certain expenses incurred
outside the United States, except the cost of transportation
on foreign vessels and aircraft.
‘‘(c) USE OF FOREIGN CURRENCIES.—To carry out this section,
the President may use, in addition to amounts appropriated to
carry out trade promotion activities, foreign currencies owned by
or owed to the United States Government.
‘‘PART E—CONTROL OF MERCHANT MARINE CAPABILITIES
‘‘CHAPTER 561—RESTRICTIONS ON TRANSFERS
‘‘Sec.
‘‘56101.
Approval required to transfer vessel to noncitizen.
‘‘56102.
Additional controls during war or national emergency.
‘‘56103.
Conditional approvals.
‘‘56104.
Penalty for false statements.
‘‘56105.
Forfeiture procedure.
‘‘§ 56101. Approval required to transfer vessel to noncitizen
‘‘(a) RESTRICTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise provided in this
section, section 12119 of this title, or section 611 of the Mer-
chant Marine Act, 1936, a person may not, without the approval
of the Secretary of Transportation—
‘‘(A) sell, lease, charter, deliver, or in any other manner
transfer, or agree to sell, lease, charter, deliver, or in
any other manner transfer, to a person not a citizen of
the United States, an interest in or control of—
‘‘(i) a documented vessel owned by a citizen of
the United States; or
‘‘(ii) a vessel last documented under the laws of
the United States; or
‘‘(B) place under foreign registry, or operate under
the authority of a foreign country, a documented vessel
or a vessel last documented under the laws of the United
States.
‘‘(2) EXCEPTIONS.—Paragraph (1)(A) does not apply to a
vessel that has been operated only for pleasure or only as
a fishing vessel, fish processing vessel, or fish tender vessel
(as defined in section 2101 of this title).
‘‘(b) APPROVAL BEFORE DOCUMENTATION.—To promote financing
with respect to a vessel to be documented under chapter 121 of
this title, the Secretary may grant approval under subsection (a)
before the vessel is documented.
‘‘(c) EXCEPTIONS.—Notwithstanding any other provision of this
subtitle, the Merchant Marine Act, 1936, or any contract with
the Secretary made under this subtitle or that Act, a person may
place a vessel under foreign registry without the approval of the
Secretary if—
‘‘(1)(A) the Secretary, in conjunction with the Secretary
of Defense, determines that at least one replacement vessel
of equal or greater military capability and of a capacity that
is equivalent or greater, as measured by deadweight tons, gross
tons, or container equivalent units, as appropriate, is docu-
mented under chapter 121 of this title by the owner of the
vessel placed under foreign registry; and
‘‘(B) the replacement vessel is not more than 10 years
old on the date of that documentation; or
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‘‘(2) an operating agreement covering the vessel under
chapter 531 of this title has expired.
‘‘(d) STATUS OF PROHIBITED TRANSACTION.—A charter, sale, or
transfer of a vessel, or of an interest in or control of a vessel,
in violation of this section is void.
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL PENALTY.—A person that knowingly sells,
charters, or transfers a vessel, or an interest in or control
of a vessel, in violation of this section shall be fined under
title 18, imprisoned for not more than 5 years, or both.
‘‘(2) CIVIL PENALTY.—A person that sells, charters, or trans-
fers a vessel, or an interest in or control of a vessel, in violation
of this section is liable to the United States Government for
a civil penalty of not more than $10,000 for each violation.
‘‘(3) FORFEITURE.—A documented vessel may be seized by
and forfeited to the Government if, in violation of this section,
a person—
‘‘(A) knowingly sells, charters, or transfers the vessel
or an interest in or control of the vessel; or
‘‘(B) places the vessel under foreign registry or operates
the vessel under the authority of a foreign country.
‘‘§ 56102. Additional controls during war or national emer-
gency
‘‘(a) IN
GENERAL.—During war, or a national emergency
declared by Presidential proclamation, a person may not, without
the approval of the Secretary of Transportation—
‘‘(1) place under foreign registry a vessel owned in whole
or in part by a citizen of the United States or a corporation
incorporated under the laws of the United States or of a State;
‘‘(2) sell, mortgage, lease, charter, deliver, or in any other
manner transfer, or agree to sell, mortgage, lease, charter,
deliver, or in any other manner transfer, to a person not a
citizen of the United States—
‘‘(A) a vessel owned as described in paragraph (1),
or an interest therein;
‘‘(B) a vessel documented under the laws of the United
States, or an interest therein; or
‘‘(C) a facility for building or repairing vessels, or an
interest therein;
‘‘(3) issue, assign, or transfer to a person not a citizen
of the United States an instrument of indebtedness secured
by a mortgage of a vessel to a trustee, by an assignment
of an owner’s interest in a vessel under construction to a
trustee, or by a mortgage of a facility for building or repairing
vessels to a trustee, unless the trustee or a substitute trustee
is approved by the Secretary under subsection (b);
‘‘(4) enter into an agreement or understanding to construct
a vessel in the United States for, or to be delivered to, a
person not a citizen of the United States without expressly
stipulating that construction will not begin until after the war
or national emergency has ended;
‘‘(5) enter into an agreement or understanding whereby
there is vested in, or for the benefit of, a person not a citizen
of the United States the controlling interest in a corporation
that is incorporated under the laws of the United States or
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a State and that owns a vessel or facility for building or
repairing vessels; or
‘‘(6) cause or procure a vessel, constructed in whole or
in part in the United States and never cleared for a foreign
port, to depart from a port of the United States before it
has been documented under the laws of the United States.
‘‘(b) TRUSTEES.—
‘‘(1) APPROVAL.—The Secretary shall approve a trustee or
substitute trustee under subsection (a)(3) if and only if the
trustee is a bank or trust company that—
‘‘(A) is organized as a corporation, and is doing busi-
ness, under the laws of the United States or a State;
‘‘(B) is authorized under those laws to exercise cor-
porate trust powers;
‘‘(C) is a citizen of the United States;
‘‘(D) is subject to supervision or examination by Federal
or State authority; and
‘‘(E) has a combined capital and surplus (as set forth
in its most recent published report of condition) of at least
$3,000,000.
‘‘(2) DISAPPROVAL.—If a trustee or substitute trustee ceases
to meet the conditions in paragraph (1), the Secretary shall
disapprove the trustee or substitute trustee. After the dis-
approval, the restrictions on transfer or assignment without
the Secretary’s approval in subsection (a)(3) apply.
‘‘(3) OPERATION OF VESSEL.—During a period when sub-
section (a) applies, a trustee referred to in subsection (a)(3),
even though approved as a trustee by the Secretary, may not
operate the vessel under the mortgage or assignment without
the Secretary’s approval.
‘‘(c) STATUS OF PROHIBITED TRANSACTION.—A transaction in
violation of this section is void.
‘‘(d) RECOVERY OF CONSIDERATION.—
‘‘(1) IN GENERAL.—A person that deposited or paid consider-
ation in connection with a transaction prohibited by this section
may recover the consideration after tender of the vessel, facility,
stock, or other security, or interest therein, to the person enti-
tled to it, or the forfeiture thereof to the United States Govern-
ment.
‘‘(2) EXCEPTION.—Paragraph (1) does not apply if the person
in whose interest the consideration was deposited, or to whom
it was paid, entered into the transaction in the belief that
the person depositing or paying the consideration was a citizen
of the United States.
‘‘(e) PENALTIES.—
‘‘(1) CRIMINAL
PENALTY.—A person that violates, or
attempts or conspires to violate, this section shall be fined
under title 18, imprisoned for not more than 5 years, or both.
‘‘(2) FORFEITURE.—The following shall be forfeited to the
Government:
‘‘(A) A vessel, a facility for building or repairing vessels,
or an interest in a vessel or such a facility, that is sold,
mortgaged, leased, chartered, delivered, transferred, or
documented, or agreed to be sold, mortgaged, leased, char-
tered, delivered, transferred, or documented, in violation
of this section.
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‘‘(B) Stock and other securities sold or transferred,
or agreed to be sold or transferred, in violation of this
section.
‘‘(C) A vessel departing in violation of subsection (a)(6).
‘‘§ 56103. Conditional approvals
‘‘(a) IN GENERAL.—In approving an act or transaction under
section 56101 or 56102 of this title, the Secretary of Transportation
may do so absolutely or upon conditions the Secretary considers
advisable. The Secretary shall state the conditions in the notice
of approval.
‘‘(b) VIOLATIONS.—A violation of a condition of approval is sub-
ject to the same penalties as a violation resulting from an act
done without the required approval. The violation occurs at the
time the condition is violated.
‘‘§ 56104. Penalty for false statements
‘‘A person that knowingly makes a false statement of a material
fact to the Secretary of Transportation or another officer, employee,
or agent of the Department of Transportation, to obtain the Sec-
retary’s approval under section 56101 or 56102 of this title, shall
be fined under title 18, imprisoned for not more than 5 years,
or both.
‘‘§ 56105. Forfeiture procedure
‘‘(a) IN GENERAL.—A forfeiture under this chapter may be
enforced in the same way as a forfeiture under the laws on the
collection of duties. However, such a forfeiture may be remitted
without seizure of the vessel.
‘‘(b) PRIOR CONVICTIONS.—In a proceeding under this chapter
to enforce a forfeiture, a prior criminal conviction of a person
for a violation of this chapter with respect to the subject matter
of the forfeiture is prima facie evidence of the violation against
the person convicted.
‘‘CHAPTER 563—EMERGENCY ACQUISITION OF VESSELS
‘‘Sec.
‘‘56301.
General authority.
‘‘56302.
Charter terms.
‘‘56303.
Compensation.
‘‘56304.
Disputed compensation.
‘‘56305.
Vessel encumbrances.
‘‘56306.
Use and transfer of vessels.
‘‘56307.
Return of vessels.
‘‘§ 56301. General authority
‘‘During a national emergency declared by Presidential
proclamation, or a period for which the President has proclaimed
that the security of the national defense makes it advisable, the
Secretary of Transportation may requisition or purchase, or requisi-
tion or charter the use of, a vessel owned by citizens of the United
States, a documented vessel, or a vessel under construction in
the United States.
‘‘§ 56302. Charter terms
‘‘(a) IN GENERAL.—If a vessel is requisitioned for use but not
ownership under this chapter, the Secretary of Transportation,
at the time of requisition or as soon thereafter as the situation
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allows, shall offer the person entitled to possession of the vessel
a charter containing—
‘‘(1) the terms the Secretary believes should govern the
relationship between the United States Government and the
person; and
‘‘(2) the rate of hire the Secretary considers just compensa-
tion for the use of the vessel and the services required under
the charter.
‘‘(b) REFUSAL TO ACCEPT.—If the person does not accept the
charter and rate of hire, the parties shall proceed as provided
in section 56304 of this title.
‘‘§ 56303. Compensation
‘‘(a) IN GENERAL.—As soon as practicable, the Secretary of
Transportation shall determine and pay just compensation for a
vessel requisitioned under this chapter.
‘‘(b) FACTORS NOT AFFECTING VALUE.—The value of a vessel
may not be considered enhanced by the circumstances requiring
its requisition. Consequential damages arising from the requisition
may not be paid.
‘‘(c) EFFECT OF CONSTRUCTION-DIFFERENTIAL SUBSIDY.—
‘‘(1) IF PAID.—If a construction-differential subsidy has been
paid for the vessel, the value of the vessel at the time of
requisition shall be determined under section 802 of the Mer-
chant Marine Act, 1936.
‘‘(2) IF NOT PAID.—If a construction-differential subsidy has
not been paid for the vessel, the value of any national defense
features previously paid for by the United States Government
shall be excluded.
‘‘(d) LOSS OR DAMAGE DURING CHARTER.—If a vessel is lost
or damaged by a risk assumed by the Government under the
charter, but a valuation for the vessel or a means of compensation
has not been agreed to, the Secretary shall pay just compensation
for the loss or damage, to the extent the person is not reimbursed
through insurance.
‘‘§ 56304. Disputed compensation
‘‘If the person entitled to compensation disputes the amount
of just compensation determined by the Secretary of Transportation
under this chapter, the Secretary shall pay the person, as a ten-
tative advance, 75 percent of the amount determined. The person
may bring a civil action against the United States to recover just
compensation. If the tentative advance paid under this section
is greater than the amount of the court’s judgment, the person
shall refund the difference.
‘‘§ 56305. Vessel encumbrances
‘‘(a) IN GENERAL.—The existence of an encumbrance on a vessel
does not prevent the requisition of the vessel under this chapter.
‘‘(b) DEPOSIT IN TREASURY.—
‘‘(1) IN GENERAL.—If an encumbrance exists, the Secretary
of Transportation may deposit part of the compensation or
advance of compensation to be paid under this chapter (but
not more than the total amount of all encumbrances) in a
fund in the Treasury. The Secretary shall publish notice of
the creation of the fund in the Federal Register.
Notification.
Federal Register,
publication.
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‘‘(2) AVAILABILITY
OF
AMOUNTS
DEPOSITED.—Amounts
deposited in the fund shall be available to pay the compensation
or any of the encumbrances (including encumbrances stipulated
to in a court of the United States or a State) existing at
the time the vessel was requisitioned.
‘‘(c) CIVIL ACTION.—
‘‘(1) IN GENERAL.—Within 6 months after publication of
notice under subsection (b), the holder of an encumbrance may
bring a civil action in admiralty, according to the principles
of libels in rem, against the fund.
‘‘(2) VENUE.—The action must be brought in the district
court of the United States—
‘‘(A) from whose custody the vessel was or may be
requisitioned; or
‘‘(B) in whose district the vessel was located when
it was requisitioned.
‘‘(3) SERVICE OF PROCESS.—Service of process shall be made
on the appropriate United States Attorney, the Attorney Gen-
eral, and the Secretary, in the manner provided by the Federal
Rules of Civil Procedure (28 App. U.S.C.). Notice of the action
shall be given to all interested persons as ordered by the
court.
‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall pro-
ceed and be determined according to the principles of law
and the rules of practice applicable in like cases between private
parties.
‘‘§ 56306. Use and transfer of vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may repair,
recondition, reconstruct, operate, or charter for operation, a vessel
acquired under this chapter.
‘‘(b) TRANSFER
TO
OTHER
AGENCIES.—The Secretary may
transfer the possession or control of a vessel acquired under this
chapter to another department or agency of the United States
Government on terms and conditions approved by the President.
The department or agency shall promptly reimburse the Secretary
for expenditures for just compensation, purchase price, charter hire,
repairs, reconditioning, or reconstruction.
‘‘§ 56307. Return of vessels
‘‘When a vessel requisitioned for use but not ownership is
returned to the owner, the Secretary of Transportation shall—
‘‘(1) return the vessel in a condition at least as good as
when taken, less ordinary wear and tear; or
‘‘(2) pay the owner an amount sufficient to recondition
the vessel to that condition, less ordinary wear and tear.
‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY
NEUTRALITY ACT
‘‘Sec.
‘‘56501.
Definition.
‘‘56502.
Adjusting obligations and arranging maintenance.
‘‘56503.
Types of adjustments and arrangements.
‘‘56504.
Changes in adjustments and arrangements.
‘‘§ 56501. Definition
‘‘In this chapter, the term ‘essential vessel’ means a vessel
that is—
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‘‘(1)(A) security for a mortgage indebtedness to the United
States Government; or
‘‘(B) constructed under this subtitle or required by a con-
tract under this subtitle to be operated on a certain essential
foreign trade route; and
‘‘(2) necessary in the interests of commerce and national
defense to be maintained in condition for prompt use.
‘‘§ 56502. Adjusting obligations and arranging maintenance
‘‘(a) GENERAL AUTHORITY.—On written application, the Sec-
retary of Transportation may adjust obligations and arrange for
maintenance of an essential vessel as provided in this chapter
if the Secretary determines, after any investigation or proceeding
the Secretary considers desirable, that—
‘‘(1) the operation of the vessel in the service, route, or
line to which it is assigned under this subtitle, or in which
it otherwise would be operated, is not—
‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C.
441 et seq.) or a proclamation issued under that Act; or
‘‘(B) compatible with maintaining the availability of
the vessel for national defense and commerce;
‘‘(2) it is not feasible under existing law to employ the
vessel in any other service or operation in foreign or domestic
trade (except temporary or emergency operation under section
56503(b)(5) of this title); and
‘‘(3) the applicant, because of the restrictions of the Neu-
trality Act of 1939 (22 U.S.C. 441 et seq.) or the withdrawal
of vessels for national defense under paragraph (1), is not
earning or will not earn a reasonable return on the capital
necessarily employed in its business.
‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under
subsection (a) shall continue in effect only as long as the cir-
cumstances described in subsection (a) continue to exist.
‘‘§ 56503. Types of adjustments and arrangements
‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrange-
ment under this chapter shall include suspension of—
‘‘(1) the requirement to operate the vessel in foreign trade
under the applicable operating-differential or construction-dif-
ferential subsidy contract or mortgage or other agreement; and
‘‘(2) the right to operating-differential subsidy for the vessel.
‘‘(b) DISCRETIONARY ADJUSTMENTS
AND ARRANGEMENTS.—To
the extent the Secretary of Transportation considers appropriate
to carry out the purposes of this subtitle, an adjustment or arrange-
ment under this chapter may include any of the following:
‘‘(1) Lay-up of the vessel by the owner or in the custody
of the Secretary, with payment or reimbursement by the Sec-
retary of necessary and proper expenses (including reasonable
overhead and insurance) or a fixed periodic allowance instead
of payment or reimbursement.
‘‘(2) Postponement, for not more than the total period of
the lay-up, of the maturity date of each installment of the
principal of obligations to the United States Government for
the vessel (regardless of whether the maturity date is during
a lay-up period), or rearrangement of those maturities.
‘‘(3) Postponement or cancellation of interest accruing on
the obligations during a lay-up period.
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‘‘(4) Extension, for not more than the total period of the
lay-up, of the 20-year life limitation for the vessel and other
limitations and provisions of this subtitle based on a 20-year
life.
‘‘(5) Provision for temporary or emergency employment of
the vessel (instead of lay-up) as may be practicable, with such
arrangements for management of the vessel, payment of
expenses, and application of the proceeds of the employment,
as the Secretary may approve, with any period of operation
being included as part of the lay-up period.
‘‘(6) Payment to the Secretary, on termination of the
arrangements with the applicant, of the applicant’s net profits
(earned while the arrangements were in effect) in excess of
10 percent a year on the capital necessarily employed in the
applicant’s business, as reimbursement for obligations post-
poned or canceled and expenses incurred or paid by the Sec-
retary under this section.
‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the
applicant represented by a vessel of the applicant laid-up or oper-
ated under this section shall be included in capital necessarily
employed in the applicant’s business. The Secretary may require
a vessel laid-up or operated under this section to be security for
reimbursement.
‘‘§ 56504. Changes in adjustments and arrangements
‘‘The Secretary of Transportation may change an adjustment
or arrangement made under this chapter as the Secretary considers
necessary to carry out this chapter.
‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS
‘‘CHAPTER 571—GENERAL AUTHORITY
‘‘Sec.
‘‘57101.
Placement of vessels in National Defense Reserve Fleet.
‘‘57102.
Disposition of vessels not worth preserving.
‘‘57103.
Sale of obsolete vessels in National Defense Reserve Fleet.
‘‘57104.
Acquisition of vessels from sale of obsolete vessels.
‘‘57105.
Acquisition of vessels for essential services, routes, or lines.
‘‘57106.
Maintenance, improvement, and operation of vessels.
‘‘57107.
Vessels for other agencies.
‘‘57108.
Consideration of ballast and equipment in determining selling price.
‘‘57109.
Operation of vessels purchased, chartered, or leased from Secretary of
Transportation.
‘‘§ 57101. Placement of vessels in National Defense Reserve
Fleet
‘‘(a) IN
GENERAL.—Any vessel acquired by the Maritime
Administration shall be placed in the National Defense Reserve
Fleet maintained under section 11 of the Merchant Ship Sales
Act of 1946 (50 App. U.S.C. 1744).
‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under
subsection (a) may not be traded out or sold from the Fleet, except
as provided in section 57102, 57103, or 57104 or chapter 533,
537, 573, or 575 of this title.
‘‘§ 57102. Disposition of vessels not worth preserving
‘‘(a) IN GENERAL.—If the Secretary of Transportation deter-
mines that a vessel owned by the Maritime Administration is of
insufficient value for commercial or military operation to warrant
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its further preservation, the Secretary may scrap the vessel or
sell the vessel for cash.
‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection
(a) shall be made on the basis of competitive sealed bids, after
an appraisal and due advertisement. The purchaser does not have
to be a citizen of the United States. The purchaser shall provide
a surety bond, with a surety approved by the Secretary, to ensure
that the vessel will not be operated in the foreign trade of the
United States at any time within 10 years after the sale, in competi-
tion with a vessel owned by a citizen of the United States and
documented under the laws of the United States.
‘‘§ 57103. Sale of obsolete vessels in National Defense Reserve
Fleet
‘‘(a) IN GENERAL.—The Secretary of Transportation may convey
the right, title, and interest of the United States Government in
any vessel of the National Defense Reserve Fleet that has been
identified by the Secretary as an obsolete vessel of insufficient
value to warrant its further preservation, if the recipient—
‘‘(1) is a non-profit organization, a State, or a municipal
corporation or political subdivision of a State;
‘‘(2) agrees not to use, or allow others to use, the vessel
for commercial transportation purposes;
‘‘(3) agrees to make the vessel available to the Government
whenever the Secretary indicates that it is needed by the
Government;
‘‘(4) agrees to hold the Government harmless for any claims
arising from exposure to asbestos, polychlorinated biphenyls,
lead paint, or other hazardous substances after conveyance
of the vessel, except for claims arising from use of the vessel
by the Government;
‘‘(5) has a conveyance plan and a business plan that
describes the intended use of the vessel, each of which has
been submitted to and approved by the Secretary;
‘‘(6) has provided proof, as determined by the Secretary,
of resources sufficient to accomplish the transfer, necessary
repairs and modifications, and initiation of the intended use
of the vessel; and
‘‘(7) agrees that when the recipient no longer requires the
vessel for use as described in the business plan required under
paragraph (5)—
‘‘(A) the recipient will, at the discretion of the Sec-
retary, reconvey the vessel to the Government in good
condition except for ordinary wear and tear; or
‘‘(B) if the Board of Trustees of the recipient has
decided to dissolve the recipient according to the laws
of the State in which the recipient is incorporated, then—
‘‘(i) the recipient shall distribute the vessel, as
an asset of the recipient, to a person that has been
determined exempt from taxation under section
501(c)(3) of the Internal Revenue Code of 1986 (26
U.S.C. 501(c)(3)), or to the Federal Government or
a State or local government for a public purpose; and
‘‘(ii) the vessel shall be disposed of by a court
of competent jurisdiction of the county in which the
principal office of the recipient is located, for such
purposes as the court shall determine, or to such
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organizations as the court shall determine are orga-
nized exclusively for public purposes.
‘‘(b) OTHER EQUIPMENT.—At the Secretary’s discretion, addi-
tional equipment from other obsolete vessels of the Fleet may
be conveyed to assist the recipient with maintenance, repairs, or
modifications.
‘‘(c) ADDITIONAL TERMS.—The Secretary may require any addi-
tional terms the Secretary considers appropriate.
‘‘(d) DELIVERY OF VESSEL.—If conveyance is made under this
section, the vessel shall be delivered to the recipient at a time
and place to be determined by the Secretary. The vessel shall
be conveyed in an ‘as is’ condition.
‘‘(e) LIMITATIONS.—If at any time prior to delivery of the vessel
to the recipient, the Secretary determines that a different disposi-
tion of the vessel would better serve the interests of the Govern-
ment, the Secretary shall pursue the more favorable disposition
of the obsolete vessel and shall not be liable for any damages
that may result from an intended recipient’s reliance upon a pro-
posed transfer.
‘‘(f) REVERSION.—The Secretary shall include in any conveyance
under this section terms under which all right, title, and interest
conveyed by the Secretary shall revert to the Government if the
Secretary determines the vessel has been used other than as
described in the business plan required under subsection (a)(5).
‘‘§ 57104. Acquisition of vessels from sale of obsolete vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire
suitable documented vessels with amounts in the Vessel Operations
Revolving Fund derived from the sale of obsolete vessels in the
National Defense Reserve Fleet.
‘‘(b) VALUATION.—The acquired and obsolete vessels shall be
valued at their scrap value in domestic or foreign markets as
of the date of the acquisition for or sale from the Fleet. However,
the value assigned to those vessels shall be determined on the
same basis, with consideration given to the fair value of the cost
of moving the vessel sold from the Fleet to the place of scrapping.
‘‘(c) COSTS INCIDENT TO LAY-UP.—Costs incident to the lay-
up of the vessel acquired under this section may be paid from
amounts in the Fund.
‘‘(d) TRANSFERS TO NON-CITIZENS.—A vessel sold from the Fleet
under this section may be scrapped in an approved foreign market
without obtaining additional separate approval from the Secretary
to transfer the vessel to a person not a citizen of the United
States.
‘‘§ 57105. Acquisition of vessels for essential services, routes,
or lines
‘‘(a) IN GENERAL.—The Secretary of Transportation may acquire
a vessel, by purchase or otherwise, if—
‘‘(1) the Secretary considers the vessel necessary to estab-
lish, maintain, improve, or serve as a replacement on an essen-
tial service, route, or line in the foreign commerce of the United
States, as determined under section 50103 of this title;
‘‘(2) the vessel was constructed in the United States; and
‘‘(3) the Secretary of the Navy has certified to the Secretary
of Transportation that the vessel is suitable for economical
and speedy conversion into a naval or military auxiliary or
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otherwise suitable for use by the United States Government
in time of war or national emergency.
‘‘(b) PRICE.—The price paid for the vessel shall be based on
a fair and reasonable valuation. However, the price may not exceed
by more than 5 percent the cost of the vessel to the owner (excluding
any construction-differential subsidy and the cost of national
defense features paid by the Secretary of Transportation) plus the
actual cost previously expended for reconditioning, less depreciation
based on a 25-year life for a dry-cargo or passenger vessel and
a 20-year life for a tanker or other liquid bulk carrier vessel.
‘‘(c) DOCUMENTATION.—A vessel acquired under this section
that is not documented under the laws of the United States at
the time of acquisition shall be so documented as soon as prac-
ticable.
‘‘§ 57106. Maintenance, improvement, and operation of ves-
sels
‘‘(a) IN GENERAL.—The Secretary of Transportation may main-
tain, repair, recondition, remodel, and improve vessels owned by
the United States Government and in the possession or under
the control of the Secretary, to equip them adequately for competi-
tion in the foreign trade of the United States. The Secretary may
operate such a vessel or charter the vessel on terms and conditions
the Secretary considers appropriate to carry out the purposes of
this subtitle.
‘‘(b) DOCUMENTATION
AND RESTRICTIONS
ON OPERATION.—A
vessel reconditioned, remodeled, or improved under subsection (a)
shall be documented under the laws of the United States and
remain so documented for at least 5 years after completion of
the reconditioning, remodeling, or improvement. During that period,
it shall be operated on voyages that are not exclusively coastwise.
‘‘§ 57107. Vessels for other agencies
‘‘(a) IN GENERAL.—The Secretary of Transportation may con-
struct, reconstruct, repair, equip, and outfit, by contract or other-
wise, vessels or parts thereof, for any other department or agency
of the United States Government to the extent the other department
or agency is authorized by law to do so for its own account.
‘‘(b) EFFECT
ON
CONTRACT
AUTHORIZATION.—An obligation
incurred or expenditure made by the Secretary under this section
does not affect any contract authorization of the Secretary, but
instead shall be charged against the existing appropriation or con-
tract authorization of the department or agency.
‘‘§ 57108. Consideration of ballast and equipment in deter-
mining selling price
‘‘The Maritime Administration may not sell a vessel until its
ballast and equipment have been inventoried and their value consid-
ered in determining the selling price of the vessel.
‘‘§ 57109. Operation of vessels purchased, chartered, or
leased from Secretary of Transportation
‘‘Unless otherwise authorized by the Secretary of Transpor-
tation, a vessel purchased, chartered, or leased from the Secretary
may be operated only under a certificate of documentation with
a registry or coastwise endorsement. Such a vessel, while employed
solely as a merchant vessel, is subject to the laws, regulations,
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and liabilities governing merchant vessels, whether the United
States Government has an interest in the vessel as an owner
or holds a mortgage, lien, or other interest.
‘‘CHAPTER 573—VESSEL TRADE-IN PROGRAM
‘‘Sec.
‘‘57301.
Definitions.
‘‘57302.
Authority to acquire vessels.
‘‘57303.
Utility value and tonnage requirements.
‘‘57304.
Eligible acquisition dates.
‘‘57305.
Determination of trade-in allowance.
‘‘57306.
Payment of trade-in allowance.
‘‘57307.
Recognition of gain for tax purposes.
‘‘57308.
Use of vessels at least 25 years old.
‘‘§ 57301. Definitions
‘‘In this chapter:
‘‘(1) NEW VESSEL.—The term ‘new vessel’ means a vessel—
‘‘(A) constructed under this subtitle and acquired
within 2 years after the date of completion; or
‘‘(B) constructed in a domestic shipyard on private
account and not under this subtitle, and documented under
the laws of the United States.
‘‘(2) OBSOLETE VESSEL.—The term ‘obsolete vessel’ means
a vessel that—
‘‘(A) is of at least 1,350 gross tons;
‘‘(B) the Secretary of Transportation believes should,
because of its age, obsolescence, or other reasons, be
replaced in the public interest; and
‘‘(C) has been owned by a citizen of the United States
for at least 3 years immediately before its acquisition under
this chapter.
‘‘§ 57302. Authority to acquire vessels
‘‘To promote the construction of new, safe, and efficient vessels
to carry the domestic and foreign waterborne commerce of the
United States, the Secretary of Transportation may acquire an
obsolete vessel in exchange for an allowance of credit toward the
cost of construction or purchase of a new vessel as provided in
this chapter.
‘‘§ 57303. Utility value and tonnage requirements
‘‘(a) UTILITY VALUE.—The utility value of a new vessel to be
acquired under this chapter for operation in the domestic or foreign
commerce of the United States may not be substantially less than
that of the obsolete vessel acquired in exchange under this chapter.
‘‘(b) TONNAGE.—If the Secretary of Transportation finds that
the new vessel will have a utility value at least equal to that
of the obsolete vessel, the new vessel may be of lesser gross tonnage
than the obsolete vessel. However, the gross tonnage of the new
vessel must be at least one-third the gross tonnage of the obsolete
vessel.
‘‘§ 57304. Eligible acquisition dates
‘‘At the option of the owner, the acquisition of an obsolete
vessel under this chapter shall occur—
‘‘(1) when the owner contracts for the construction or pur-
chase of a new vessel; or
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‘‘(2) within 5 days of the actual date of delivery of the
new vessel to the owner.
‘‘§ 57305. Determination of trade-in allowance
‘‘(a) IN GENERAL.—The Secretary of Transportation shall deter-
mine the trade-in allowance for an obsolete vessel at the time
of acquisition of the vessel. The allowance shall be the fair value
of the vessel. In determining the value, the Secretary shall con-
sider—
‘‘(1) the scrap value of the obsolete vessel in American
and foreign markets;
‘‘(2) the depreciated value based on a 20-year or 25-year
life, whichever applies to the obsolete vessel; and
‘‘(3) the market value of the obsolete vessel for operation
in world commerce or in the domestic or foreign commerce
of the United States.
‘‘(b) USE OF OBSOLETE VESSELS.—If acquisition of the obsolete
vessel occurs when the owner contracts for the construction of
the new vessel, and the owner uses the obsolete vessel during
the period of construction of the new vessel, the Secretary shall
reduce the trade-in allowance by an amount representing the fair
value of that use. The Secretary shall establish the rate for use
of the obsolete vessel when the contract for construction of the
new vessel is made.
‘‘§ 57306. Payment of trade-in allowance
‘‘(a) ACQUISITION AT TIME OF CONTRACT.—If acquisition of an
obsolete vessel under this chapter occurs when the owner contracts
for the construction or purchase of the new vessel, the Secretary
of Transportation shall apply the trade-in allowance to the purchase
price of the new vessel rather than paying it to the owner. If
the new vessel is constructed under this subtitle, the Secretary
may apply the trade-in allowance to the required cash payments
on terms and conditions the Secretary may prescribe. If the new
vessel is not constructed under this subtitle, the Secretary shall
pay the trade-in allowance to the builder of the vessel for the
account of the owner when the Secretary acquires the obsolete
vessel.
‘‘(b) ACQUISITION AT TIME OF DELIVERY.—If acquisition of the
obsolete vessel occurs when the new vessel is delivered to the
owner, the Secretary shall deposit the trade-in allowance in the
owner’s capital construction fund.
‘‘§ 57307. Recognition of gain for tax purposes
‘‘The owner of an obsolete vessel does not recognize a gain
under the Federal income tax laws when the vessel is transferred
to the Secretary of Transportation in exchange for a trade-in allow-
ance under this chapter. The basis of the new vessel acquired
with the allowance is the same as the basis of the obsolete vessel—
‘‘(1) increased by the difference between the cost of the
new vessel and the trade-in allowance of the obsolete vessel;
and
‘‘(2) decreased by the amount of loss recognized on the
transfer.
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‘‘§ 57308. Use of vessels at least 25 years old
‘‘An obsolete vessel acquired under this chapter that is or
becomes at least 25 years old may not be used for commercial
operation. However, the vessel may be used—
‘‘(1) during a period in which vessels may be requisitioned
under chapter 563 of this title; or
‘‘(2) except as otherwise provided in this subtitle, on trade
routes serving only the foreign trade of the United States.
‘‘CHAPTER 575—CONSTRUCTION, CHARTER, AND SALE
OF VESSELS
‘‘SUBCHAPTER I—GENERAL
‘‘Sec.
‘‘57501.
Completion of long-range program.
‘‘57502.
Construction, reconditioning, and remodeling of vessels.
‘‘57503.
Competitive bidding.
‘‘57504.
Charter or sale of vessels acquired by Department of Transportation.
‘‘57505.
Employment of vessels on foreign trade routes.
‘‘57506.
Minimum selling price of vessels.
‘‘SUBCHAPTER II—CHARTERS
‘‘57511.
Demise charters.
‘‘57512.
Competitive bidding.
‘‘57513.
Minimum bid.
‘‘57514.
Qualifications of bidders.
‘‘57515.
Awarding of charters.
‘‘57516.
Operating-differential subsidies.
‘‘57517.
Recovery of excess profits.
‘‘57518.
Performance bond.
‘‘57519.
Insurance.
‘‘57520.
Vessel maintenance.
‘‘57521.
Termination of charter during national emergency.
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘57531.
Construction and charter of vessels for unsuccessful routes.
‘‘57532.
Operation of experimental vessels.
‘‘SUBCHAPTER I—GENERAL
‘‘§ 57501. Completion of long-range program
‘‘Whenever the Secretary of Transportation determines that
the objectives and policies declared in sections 50101 and 50102
of this title cannot be fully realized within a reasonable time under
titles V and VI of the Merchant Marine Act, 1936, and the President
approves the determination, the Secretary, in accordance with this
chapter, shall complete the long-range program described in section
50102 of this title.
‘‘§ 57502. Construction, reconditioning, and remodeling of
vessels
‘‘(a) IN GENERAL.—The Secretary of Transportation may have
new vessels constructed, and have old vessels reconditioned or
remodeled, as the Secretary determines necessary to carry out
the objectives of this subtitle.
‘‘(b) PLACE OF WORK.—Construction, reconditioning, and remod-
eling of vessels under subsection (a) shall take place in shipyards
in the continental United States (including Alaska and Hawaii).
However, if satisfactory contracts cannot be obtained from private
shipbuilders, the Secretary may have the work done in navy yards.
‘‘(c) APPLICABILITY
OF CONSTRUCTION-DIFFERENTIAL SUBSIDY
PROVISIONS.—Contracts for the construction, reconstruction, or
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reconditioning of a vessel by a private shipbuilder under this
chapter are subject to the provisions of title V of the Merchant
Marine Act, 1936, applicable to a contract with a private shipbuilder
for the construction of a vessel under title V of that Act.
‘‘§ 57503. Competitive bidding
‘‘(a) ADVERTISEMENT AND BIDDING.—The Secretary of Transpor-
tation may make a contract with a private shipbuilder for the
construction of a new vessel, or for the reconstruction or recondi-
tioning of an existing vessel, only after due advertisement and
upon sealed competitive bids.
‘‘(b) OPENING OF BIDS.—Bids required under this section shall
be opened at the time and place stated in the advertisement for
bids. All interested persons, including representatives of the press,
shall be permitted to attend. The results of the bidding shall be
publicly announced.
‘‘§ 57504. Charter or sale of vessels acquired by Department
of Transportation
‘‘Vessels transferred to or otherwise acquired by the Depart-
ment of Transportation in any manner may be chartered or sold
by the Secretary of Transportation as provided in this chapter.
‘‘§ 57505. Employment of vessels on foreign trade routes
‘‘(a) IN
GENERAL.—The Secretary of Transportation shall
arrange for the employment of the Department of Transportation’s
vessels in steamship lines on such trade routes, exclusively serving
the foreign trade of the United States, as the Secretary determines
are essential for the development and maintenance of the commerce
of the United States and the national defense. However, the Sec-
retary shall first determine that those routes are not being ade-
quately served by existing steamship lines privately owned and
operated by citizens of the United States and documented under
the laws of the United States.
‘‘(b) POLICY TO ENCOURAGE PRIVATE OPERATION.—The Sec-
retary shall have a policy of encouraging private operation of each
essential steamship line now owned by the United States Govern-
ment by—
‘‘(1) selling the line to a citizen of the United States; or
‘‘(2) demising the Secretary’s vessels on bareboat charter
to citizens of the United States who agree to maintain the
line in the manner provided in this chapter.
‘‘§ 57506. Minimum selling price of vessels
‘‘(a) IN GENERAL.—A vessel constructed under this subtitle or
the Merchant Marine Act, 1936, may not be sold by the Secretary
of Transportation for less than the price specified in this section.
‘‘(b) OPERATION
IN FOREIGN TRADE.—If the vessel is to be
operated in foreign trade, the minimum price is the estimated
foreign construction cost (exclusive of national defense features)
determined as of the date the construction contract is executed,
less depreciation under subsection (d).
‘‘(c) OPERATION IN DOMESTIC TRADE.—If the vessel is to be
operated in domestic trade, the minimum price is the cost of
construction in the United States (exclusive of national defense
features), less depreciation under subsection (d).
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‘‘(d) DEPRECIATION.—Depreciation under subsections (b) and
(c) shall be based on—
‘‘(1) a 25-year life for dry-cargo and passenger vessels;
and
‘‘(2) a 20-year life for tankers and other bulk liquid carrier
vessels.
‘‘SUBCHAPTER II—CHARTERS
‘‘§ 57511. Demise charters
‘‘A charter by the Secretary of Transportation under this
chapter shall demise the vessel to the charterer subject to all
usual conditions contained in a bareboat charter. The charter shall
be for a term the Secretary considers to be in the best interest
of the United States Government and the merchant marine.
‘‘§ 57512. Competitive bidding
‘‘(a) IN GENERAL.—The Secretary of Transportation may charter
a vessel of the Department of Transportation to a private operator
only on the basis of competitive sealed bidding. The bids must
be submitted in strict compliance with the terms and conditions
of a public advertisement soliciting the bids.
‘‘(b) ADVERTISEMENT FOR BIDS.—An advertisement for bids shall
state—
‘‘(1) the number, type, and tonnage of the vessels being
offered for bareboat charter for operation as a steamship line
on a designated trade route;
‘‘(2) the minimum number of sailings required;
‘‘(3) the length of time of the charter;
‘‘(4) the right of the Secretary to reject all bids; and
‘‘(5) other information the Secretary considers necessary
for the information of prospective bidders.
‘‘(c) OPENING OF BIDS.—Bids required under this section shall
be opened at the time and place stated in the advertisement for
bids. All interested persons, including representatives of the press,
shall be permitted to attend. The results of the bidding shall be
publicly announced.
‘‘§ 57513. Minimum bid
‘‘The Secretary of Transportation shall reject any bid for the
charter under this subchapter of a vessel constructed under this
subtitle or the Merchant Marine Act, 1936, if the charter hire
offered is lower than the minimum charter hire would be if the
vessel were chartered under section 57531 of this title.
‘‘§ 57514. Qualifications of bidders
‘‘(a) CONSIDERATIONS.—In deciding whether to award a charter
to a bidder, the Secretary of Transportation shall consider—
‘‘(1) the bidder’s financial resources, credit standing, and
practical experience in operating vessels; and
‘‘(2) other factors a prudent business person would consider
in entering into a transaction involving a large capital invest-
ment.
‘‘(b) DISQUALIFICATIONS.—The Secretary may not charter a
vessel to a person appearing to lack sufficient capital, credit, and
experience to operate the vessel successfully over the period covered
by the charter.
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‘‘§ 57515. Awarding of charters
‘‘(a) IN GENERAL.—The Secretary of Transportation shall award
the charter to the bidder proposing to pay the highest monthly
charter hire. However, the Secretary may reject the highest or
most advantageous or any other bid if the Secretary considers
the charter hire offered too low or determines that the bidder
lacks the qualifications required by section 57514 of this title.
‘‘(b) HIGHEST BID REJECTED.—If the Secretary rejects the
highest bid, the Secretary may—
‘‘(1) award the charter to the next highest bidder; or
‘‘(2) reject all bids and either readvertise the line or operate
the line until conditions appear more favorable to reoffer the
line for private charter.
‘‘(c) REASON FOR REJECTION.—On request of a bidder, the reason
for rejection shall be stated in writing to the bidder.
‘‘§ 57516. Operating-differential subsidies
‘‘If the Secretary of Transportation considers it necessary, the
Secretary may make a contract with a charterer of a vessel owned
by the Secretary for payment of an operating-differential subsidy,
on the same terms and conditions, and subject to the same limita-
tions and restrictions, as otherwise provided with respect to pay-
ment of operating-differential subsidies to operators of privately-
owned vessels.
‘‘§ 57517. Recovery of excess profits
‘‘(a) IN GENERAL.—A charter under this chapter shall provide
that if, at the end of a calendar year subsequent to the execution
of the charter, the cumulative net voyage profit (after payment
of the charter hire reserved in the charter and payment of the
charterer’s fair and reasonable overhead expenses applicable to
operation of the chartered vessel) exceeds 10 percent a year of
the charterer’s capital necessarily employed in the business of the
chartered vessel, the charterer shall pay to the Secretary of
Transportation, as additional charter hire, half the cumulative net
voyage profit in excess of 10 percent a year. However, any cumu-
lative net voyage profit accounted for under this subsection is
not to be included in the calculation of cumulative net voyage
profit in any subsequent year.
‘‘(b) TERMS TO BE DEFINED AND USED.—The Secretary shall
define the terms ‘net voyage profit’, ‘fair and reasonable overhead
expenses’, and ‘capital necessarily employed’ for this section. Each
advertisement for bids and each charter shall contain these defini-
tions, stating the formula for determining each of these three
amounts.
‘‘§ 57518. Performance bond
‘‘The Secretary of Transportation shall require a charterer of
a vessel of the Secretary to deposit with the Secretary an under-
taking, with approved sureties, in such amount as the Secretary
may require as security for the faithful performance of the terms
of the charter, including indemnity against liens on the chartered
vessel.
‘‘§ 57519. Insurance
‘‘A charter under this chapter shall require the charterer to
carry, at the charterer’s expense, insurance on the chartered vessel
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covering all marine and port risks, protection and indemnity risks,
and all other hazards and liabilities, adequate to cover damages
claimed against and losses sustained by the chartered vessel arising
during the term of the charter. The insurance shall be in such
form, in such amount, and with such companies as the Secretary
of Transportation may require. In accordance with law, any of
the insurance risks may be underwritten by the Secretary.
‘‘§ 57520. Vessel maintenance
‘‘(a) IN GENERAL.—A charter under this chapter shall require
the charterer, at the charterer’s expense, to—
‘‘(1) keep the chartered vessel in good repair and efficient
operating condition; and
‘‘(2) make any repairs required by the Secretary of
Transportation.
‘‘(b) INSPECTION.—The charter shall provide that the Secretary
has the right to inspect the vessel at any time to ascertain its
condition.
‘‘§ 57521. Termination of charter during national emergency
‘‘A charter under this chapter shall provide that during a
national emergency proclaimed by the President or a period for
which the President has proclaimed that the security of the national
defense makes it advisable, the Secretary of Transportation may
terminate the charter without cost to the United States Government
on such notice to the charterer as the President determines.
‘‘SUBCHAPTER III—MISCELLANEOUS
‘‘§ 57531. Construction and charter of vessels for unsuccess-
ful routes
‘‘(a) IN GENERAL.—If the Secretary of Transportation finds that
a trade route determined to be essential under section 50103 of
this title cannot be successfully developed and maintained and
the Secretary’s replacement program cannot be achieved under
private operation of the trade route by a citizen of the United
States with vessels documented under chapter 121 of this title,
without further aid by the United States Government in addition
to the financial aid authorized under titles V and VI of the Merchant
Marine Act, 1936, the Secretary, without advertisement or competi-
tion, may—
‘‘(1) have constructed, in private shipyards or in navy yards,
vessels of the types necessary for the trade route; and
‘‘(2) demise charter those new vessels to the operator of
vessels of the United States established on the trade route.
‘‘(b) AMOUNT OF CHARTER HIRE.—
‘‘(1) IN
GENERAL.—The annual charter hire under sub-
section (a) shall be at least 4 percent of the price (referred
to in this section as the ‘foreign cost’) at which the vessel
would be sold if constructed under title V of the Merchant
Marine Act, 1936, plus—
‘‘(A) a percentage of the depreciated foreign cost com-
puted annually determined by the Secretary of the
Treasury, taking into consideration the current average
market yield on outstanding marketable obligations of the
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Government with remaining periods to maturity com-
parable to the term of the charter, adjusted to the nearest
one-eighth percent; and
‘‘(B) an allowance adequate in the judgment of the
Secretary of Transportation to cover administrative costs.
‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A)
shall be based on—
‘‘(A) a 25-year life for dry-cargo and passenger vessels;
and
‘‘(B) a 20-year life for tankers and other bulk liquid
carrier vessels.
‘‘(c) OPTION TO PURCHASE.—The charter may contain an option
to the charterer to purchase the vessels from the Secretary of
Transportation within 5 years after delivery under the charter,
on the same terms and conditions as provided in title V of the
Merchant Marine Act, 1936, for the purchase of new vessels from
the Secretary. However—
‘‘(1) the purchase price shall be the foreign cost less depre-
ciation to the date of purchase based on the useful life specified
in subsection (b)(2);
‘‘(2) the required cash payment payable at the time of
the purchase shall be 25 percent of the purchase price;
‘‘(3) the charter may provide that any part of the charter
hire paid in excess of the minimum charter hire provided for
in this section may be credited against the cash payment pay-
able at the time of the purchase;
‘‘(4) the balance of the purchase price shall be paid within
the remaining years of useful life (as specified in subsection
(b)(2)) after the date of delivery of the vessel under the charter
and in approximately equal annual installments, except that
the first installment, which shall be payable on the next ensuing
anniversary date of the delivery under the charter, shall be
a proportionate part of the annual installment; and
‘‘(5) interest shall be payable on the unpaid balances from
the date of purchase, at a rate not less than—
‘‘(A) a rate determined by the Secretary of the
Treasury, taking into consideration the current average
market yield on outstanding marketable obligations of the
Government with remaining periods to maturity com-
parable to the average maturities of the loans, adjusted
to the nearest one-eighth percent; plus
‘‘(B) an allowance adequate in the judgment of the
Secretary of Transportation to cover administrative costs.
‘‘(d) OPERATION OF VESSEL.—
‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for
operation of the vessel exclusively—
‘‘(A) in foreign trade;
‘‘(B) on a round-the-world voyage;
‘‘(C) on a round voyage from the west coast of the
United States to a European port that includes an inter-
coastal port of the United States;
‘‘(D) on a round voyage from the Atlantic coast of
the United States to the Orient that includes an inter-
coastal port of the United States; or
‘‘(E) on a voyage in foreign trade on which the vessel
may stop at Hawaii or an island territory or possession
of the United States.
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‘‘(2) DOMESTIC TRADE.—The charter shall provide if the
vessel is operated in domestic trade on any of the services
specified in paragraph (1), the charterer will pay annually
to the Secretary of Transportation that proportion of 1⁄25 of
the difference between the domestic and foreign cost of the
vessel as the gross revenue derived from the domestic trade
bears to the gross revenue derived from the entire voyages
completed during the preceding year.
‘‘§ 57532. Operation of experimental vessels
‘‘(a) DEFINITION.—In this section, the term ‘experimental vessel’
means a vessel owned by the United States Government (including
a vessel in the National Defense Reserve Fleet) that has been
constructed, reconditioned, or remodeled for experimental or testing
purposes.
‘‘(b) AUTHORITY TO OPERATE.—The Secretary of Transportation,
for the purpose of practical development, trial, and testing, may
operate an experimental vessel under a bareboat charter or general
agency agreement in the foreign or domestic trade of the United
States or for use for the account of a department or agency of
the Government, without regard to other provisions of this subtitle
and other laws related to chartering and general agency operations.
Not more than 10 vessels may be operated and tested under this
section in any one year.
‘‘(c) TERMS OF OPERATION.—Operation of a vessel under this
section shall be on terms the Secretary considers appropriate to
carry out the purposes of this subtitle. A bareboat charter under
this section shall be at reasonable rates and include restrictions
the Secretary considers appropriate to protect the public interest,
including provisions for recapture of profits under section 57517
of this title. A charter or general agency agreement under this
section shall be reviewed annually to determine whether conditions
exist to justify continuance of the charter or agreement.
‘‘(d) RIGHTS OF SEAMEN.—A seaman engaged in vessel oper-
ations of the Secretary under this section and employed through
a general agent in connection with a charter or agreement under
this section is entitled to all the rights and remedies provided
in sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943
(50 App. U.S.C. 1291(a), (c), 1293(c), 1294).
‘‘PART G—RESTRICTIONS AND PENALTIES
‘‘CHAPTER 581—RESTRICTIONS AND PENALTIES
‘‘Sec.
‘‘58101.
Operating in domestic intercoastal or coastwise service.
‘‘58102.
Default on payment or maintenance of reserves.
‘‘58103.
Employing another person as managing or operating agent.
‘‘58104.
Willful violation constitutes breach of contract or charter.
‘‘58105.
Preferences for cargo in which charterer has interest.
‘‘58106.
Concerted discriminatory activities.
‘‘58107.
Discrimination at ports by water common carriers.
‘‘58108.
Charges for transportation subject to subtitle IV of title 49.
‘‘58109.
Penalties.
‘‘§ 58101. Operating in domestic intercoastal or coastwise
service
‘‘(a) PROHIBITION.—A subsidy may not be awarded or paid
to a contractor under the operating-differential subsidy program,
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and a vessel may not be chartered to a person under chapter
575 of this title, if the contractor or charterer, or a holding company,
subsidiary, affiliate, or associate of the contractor or charterer,
or an officer, director, agent, or executive thereof, directly or
indirectly—
‘‘(1) owns, charters, or operates a vessel engaged in the
domestic intercoastal or coastwise service; or
‘‘(2) owns a pecuniary interest in a person that owns,
charters, or operates a vessel in the domestic intercoastal or
coastwise service.
‘‘(b) WAIVER.—A person may apply to the Secretary of Transpor-
tation for a waiver of subsection (a). Before deciding on the waiver,
the Secretary shall give the applicant and other interested persons
an opportunity for a hearing. The Secretary may not grant the
waiver if the Secretary finds it would—
‘‘(1) result in unfair competition to a person operating
exclusively in the domestic intercoastal or coastwise service;
or
‘‘(2) be prejudicial to the objectives and policy of this sub-
title.
‘‘(c) CONTINUOUS OPERATION SINCE 1935.—The Secretary shall
grant an application under subsection (b) without requiring further
proof that the public interest and convenience will be served and
without further proceedings as to the competition in the route
or trade, if the contractor or other person, or a predecessor in
interest, was in bona-fide operation as a common carrier by water
in the domestic intercoastal or coastwise trade in 1935 over the
route or in the trade for which the application is made and has
so operated since that time or, if engaged in furnishing seasonal
service only, was in bona-fide operation in 1935 during the season
ordinarily covered by its operation, except in either event as to
interruptions of service over which the applicant or its predecessor
in interest had no control.
‘‘(d) DIVERSION
INTO
INTERCOASTAL
OR
COASTWISE
OPER-
ATIONS.—If an application under subsection (b) is approved, a person
referred to in this section may not divert, directly or indirectly,
money, property, or any other thing of value, used in a foreign-
trade operation for which a subsidy is paid by the United States
Government, into intercoastal or coastwise operations.
‘‘§ 58102. Default on payment or maintenance of reserves
‘‘The Secretary of Transportation may supervise the number
and compensation of all officers and employees of a contractor
under the operating-differential subsidy program or a charterer
under chapter 575 of this title, receiving an operating-differential
subsidy, if the contractor or charterer—
‘‘(1) is in default on a mortgage, note, purchase contract,
or other obligation to the Secretary; or
‘‘(2) has not maintained, in a manner satisfactory to the
Secretary, all of the reserves provided for in this subtitle.
‘‘§ 58103. Employing another person as managing or oper-
ating agent
‘‘(a) PROHIBITION.—Except with the written consent of the Sec-
retary of Transportation, a contractor holding a contract under
the operating-differential subsidy program or under chapter 575
of this title may not—
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‘‘(1) employ another person as the managing or operating
agent of the operator; or
‘‘(2) charter a vessel, on which an operating-differential
subsidy is to be paid, for operation by another person.
‘‘(b) APPLICABILITY OF PROVISIONS TO CHARTERER.—If a charter
prohibited by this section is made, the person operating the char-
tered vessel is subject to all the provisions of this subtitle and
the operating-differential subsidy program, including limitations
of profits and salaries.
‘‘§ 58104. Willful violation constitutes breach of contract or
charter
‘‘A willful violation of any provision of sections 58101–58103
of this title constitutes a breach of the contract or charter. On
determining that a violation has occurred, the Secretary of
Transportation may declare the contract or charter rescinded.
‘‘§ 58105. Preferences for cargo in which charterer has
interest
‘‘A contractor receiving an operating-differential subsidy, or
a charterer under chapter 575 of this title, may not unjustly
discriminate in any manner so as to give preference, directly or
indirectly, to cargo in which the contractor or charterer has a
direct or indirect ownership, purchase, or vending interest.
‘‘§ 58106. Concerted discriminatory activities
‘‘(a) PROHIBITION.—A contractor receiving an operating-differen-
tial subsidy, or a charterer under chapter 575 of this title, may
not continue as a party to or conform to an agreement with another
carrier by water, or engage in a practice in concert with another
carrier by water, that is unjustly discriminatory or unfair to any
other citizen of the United States operating a common carrier
by water employing only vessels documented under the laws of
the United States on an established trade route from and to a
United States port.
‘‘(b) GOVERNMENT PAYMENT PROHIBITED.—No payment or sub-
sidy of any kind may be paid, directly or indirectly, out of funds
of the United States Government to a contractor or charterer that
has violated subsection (a).
‘‘(c) CIVIL ACTION.—A person whose business or property is
injured by a violation of subsection (a) may bring a civil action
in the district court of the United States for the district in which
the defendant resides, is found, or has an agent. If the person
prevails, the person shall be awarded—
‘‘(1) 3 times the damages; and
‘‘(2) costs, including reasonable attorney fees.
‘‘§ 58107. Discrimination at ports by water common carriers
‘‘(a) PROHIBITION.—A common carrier by water may not, directly
or indirectly, through an agreement, conference, association, under-
standing, or otherwise, prevent or attempt to prevent any other
common carrier by water from serving any port described in sub-
section (b) at the same rates the first carrier charges at the nearest
port already regularly served by it.
‘‘(b) PORTS.—A port referred to in subsection (a) is one that
is—
‘‘(1) designed for the accommodation of ocean-going vessels;
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‘‘(2) located on an improvement project authorized by law
or by a Federal agency; and
‘‘(3) located within the continental limits of the United
States.
‘‘(c) OTHER AUTHORITY NOT LIMITED.—This section does not
limit the authority otherwise vested in the Secretary of Transpor-
tation and the Federal Maritime Commission.
‘‘§ 58108. Charges for transportation subject to subtitle IV
of title 49
‘‘(a) PROHIBITION.—A carrier may not charge, collect, or receive
for transportation subject to subtitle IV of title 49 of persons or
property, under any joint rate, fare, or charge, or under any export,
import, or other proportional rate, fare, or charge, that is based
in whole or in part on the fact that the persons or property affected
are to be transported to, or have been transported from, a port
in a territory or possession of the United States or in a foreign
country, by a carrier by water in foreign commerce, any lower
rate, fare, or charge than the carrier charges, collects, or receives
for the transportation of persons or similar property for the same
distance, in the same direction, and over the same route, in com-
merce wholly within the United States, unless the vessel used
for the transportation is or was at the time of the transportation
documented under the laws of the United States.
‘‘(b) SUSPENSION OF PROHIBITION.—Whenever the Secretary of
Transportation believes that adequate shipping facilities to or from
any port in a territory or possession of the United States or a
foreign country are not being provided by vessels documented under
the laws of the United States, the Secretary shall certify this
fact to the Surface Transportation Board. On receiving the certifi-
cation, the Board may by order suspend the operation of subsection
(a) with respect to the rates, fares, and charges for the transpor-
tation by rail of persons and property transported from or to be
transported to those ports, for such time and under such terms
and conditions as the Secretary may specify in the order or in
any supplemental order.
‘‘(c) TERMINATION
OF SUSPENSION.—Whenever the Secretary
believes that adequate shipping facilities are being provided to
those ports by vessels documented under the laws of the United
States, and certifies that fact to the Board, the Board may order
the termination of the suspension.
‘‘§ 58109. Penalties
‘‘(a) INDIVIDUALS.—An individual convicted of violating section
58101(d), 58103, or 58105 of this title shall be fined under title
18, imprisoned for at least one year but not more than 5 years,
or both.
‘‘(b) ORGANIZATIONS.—An organization convicted of committing
an act prohibited by this subtitle shall be fined under title 18.
‘‘(c) INELIGIBILITY TO RECEIVE BENEFITS.—An individual or
organization convicted of violating a section referred to in subsection
(a) is ineligible, at the discretion of the Secretary of Transportation,
to receive any benefit under the construction-differential subsidy
or operating-differential subsidy programs, or a charter under
chapter 575 of this title, for 5 years after the conviction.’’.
Certification.
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SEC. 9. SUBTITLE VI OF TITLE 46.
(a) REDESIGNATION.—Title 46, United States Code, is amended
by redesignating subtitle VI as subtitle VII.
(b) NEW SUBTITLE.—Title 46, United States Code, is amended
by inserting after subtitle V the following:
‘‘Subtitle VI—Clearance, Tonnage Taxes, and
Duties
‘‘Chapter
Sec.
‘‘601. Arrival and Departure Requirements ...............................................
60101
‘‘603. Tonnage Taxes and Light Money ........................................................
60301
‘‘605. Discriminating Duties and Reciprocal Privileges ..........................
60501
‘‘CHAPTER 601—ARRIVAL AND DEPARTURE
REQUIREMENTS
‘‘Sec.
‘‘60101.
Boarding arriving vessels before inspection.
‘‘60102.
Production of certificate on entry.
‘‘60103.
Oath of ownership on entry.
‘‘60104.
Depositing certificates of documentation with consular officers.
‘‘60105.
Clearance of vessels.
‘‘60106.
State inspection laws.
‘‘60107.
Payment of fees on departing vessel.
‘‘60108.
Duty to transport tendered cargo.
‘‘60109.
Duty to transport money and securities of the United States Government.
‘‘§ 60101. Boarding arriving vessels before inspection
‘‘(a) REGULATIONS.—The Secretary of Homeland Security shall
prescribe and enforce regulations on the boarding of a vessel
arriving at a port of the United States before the vessel has been
inspected and secured.
‘‘(b) CRIMINAL PENALTY.—A person violating a regulation pre-
scribed under this section shall be fined under title 18, imprisoned
for not more than 6 months, or both.
‘‘(c) RELATIONSHIP TO OTHER LAW.—This section shall be con-
strued as supplementary to section 2279 of title 18.
‘‘§ 60102. Production of certificate on entry
‘‘On entry of a vessel documented under chapter 121 of this
title, the master or other individual in charge of the vessel shall
produce the certificate of documentation to the customs officer at
the place where the vessel is entered. If the certificate is not
produced, the vessel is not entitled to the privileges of a documented
vessel.
‘‘§ 60103. Oath of ownership on entry
‘‘(a) REQUIRED STATEMENT.—On entry of a vessel of the United
States from a foreign port, the individual designated under sub-
section (b) shall state under oath that—
‘‘(1) the vessel’s certificate of documentation contains the
names of all the owners of the vessel; or
‘‘(2) part of the ownership has been transferred since the
certificate was issued and, to the best of the individual’s knowl-
edge and belief, the vessel is still owned only by citizens of
the United States.
‘‘(b) PERSON TO MAKE STATEMENT.—The statement under sub-
section (a) shall be made by—
‘‘(1) an owner if one resides at the port of entry; or
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‘‘(2) the master if an owner does not reside at the port
of entry.
‘‘(c) CONSEQUENCE OF NOT MAKING STATEMENT.—If the appro-
priate individual does not make the statement required by this
section, the vessel is not entitled to the privileges of a vessel
of the United States.
‘‘§ 60104. Depositing certificates of documentation with con-
sular officers
‘‘(a) REQUIREMENT OF MASTER.—When a vessel owned by citi-
zens of the United States, on a voyage from a port in the United
States, arrives at a foreign port, the master of the vessel shall
deposit the vessel’s certificate of documentation with a consular
officer at the foreign port if there is a consular officer at that
port.
‘‘(b) RETURN OF CERTIFICATE.—When the master produces a
clearance from the appropriate officer of the foreign port, the con-
sular officer shall return the certificate of documentation to the
master if the master has complied with the provisions of law related
to the discharge of seamen in a foreign country and the payment
of fees of consular officers.
‘‘(c) CIVIL PENALTY AND COLLECTION.—The master of a vessel
failing to deposit the certificate of documentation as required by
subsection (a) is liable to the United States Government for a
civil penalty of $500. The consular officer shall bring an action
to recover the penalty in any court of competent jurisdiction. The
action shall be brought in the name of the consular officer for
the benefit of the United States.
‘‘§ 60105. Clearance of vessels
‘‘(a) VESSELS
OF
THE UNITED STATES.—Except as otherwise
provided by law, a vessel of the United States shall obtain clearance
from the Secretary of Homeland Security before proceeding from
a port or place in the United States—
‘‘(1) for a foreign port or place;
‘‘(2) for another port or place in the United States if the
vessel has on board foreign merchandise for which entry has
not been made; or
‘‘(3) outside the territorial sea to visit a hovering vessel
or to receive merchandise while outside the territorial sea.
‘‘(b) OTHER VESSELS.—Except as otherwise provided by law,
a vessel that is not a vessel of the United States shall obtain
clearance from the Secretary before proceeding from a port or
place in the United States—
‘‘(1) for a foreign port or place;
‘‘(2) for another port or place in the United States; or
‘‘(3) outside the territorial sea to visit a hovering vessel
or to receive or deliver merchandise while outside the territorial
sea.
‘‘(c) REGULATIONS.—The Secretary may by regulation—
‘‘(1) prescribe the manner in which clearance under this
section is to be obtained, including the documents, data, or
information which shall be submitted or transmitted, pursuant
to an authorized data interchange system, to obtain the clear-
ance;
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‘‘(2) permit clearance to be obtained before all requirements
for clearance are complied with, but only if the owner or oper-
ator of the vessel files a bond in an amount set by the Secretary
conditioned on the compliance by the owner or operator with
all specified requirements for clearance within a time period
(not exceeding 4 business days) established by the Secretary;
and
‘‘(3) permit clearance to be obtained at a place other than
a designated port of entry, under conditions the Secretary may
prescribe.
‘‘§ 60106. State inspection laws
‘‘When State law requires a certificate of inspection for goods
carried on a vessel, a vessel transporting the goods may not be
cleared until the certificate is produced.
‘‘§ 60107. Payment of fees on departing vessel
‘‘A departing vessel may be cleared only when all legal fees
that have accrued on the vessel are paid and proof of payment
is presented to the individual granting the clearance.
‘‘§ 60108. Duty to transport tendered cargo
‘‘Clearance may be refused to a vessel or vehicle transporting
cargo destined for a domestic or foreign port when the owner,
master, or other individual in charge refuses to accept cargo ten-
dered in good condition, with proper charges, for the same or
an intermediate port by a citizen of the United States. This section
does not apply if the vessel or vehicle is already fully loaded
(giving appropriate consideration to its proper loading) or is not
adaptable to transport the tendered cargo.
‘‘§ 60109. Duty to transport money and securities of the
United States Government
‘‘Before being given clearance, a vessel owned by a citizen
of the United States and bound on a voyage from a port in the
United States to another port in the United States or in a foreign
country, or on a voyage from a port in a foreign country to a
port in the United States, shall receive on board any bullion, coin,
notes, bonds, or other securities of the United States Government
that an agency, consular officer, or other agent of the Government
offers. The vessel shall transport the items securely and deliver
them promptly to the proper authorities or consignees on arriving
at the port of destination. Compensation shall be paid for services
provided under this section that is equal to compensation paid
to other carriers in the ordinary transaction of business.
‘‘CHAPTER 603—TONNAGE TAXES AND LIGHT MONEY
‘‘Sec.
‘‘60301.
Regular tonnage taxes.
‘‘60302.
Special tonnage taxes.
‘‘60303.
Light money.
‘‘60304.
Presidential suspension of tonnage taxes and light money.
‘‘60305.
Vessels in distress.
‘‘60306.
Vessels not engaged in trade.
‘‘60307.
Vessels engaged in coastwise trade or the fisheries.
‘‘60308.
Vessels engaged in Great Lakes trade.
‘‘60309.
Passenger vessels making trips between ports of the United States and
foreign ports.
‘‘60310.
Vessels making daily trips on interior waters.
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‘‘60311.
Hospital vessels in time of war.
‘‘60312.
Rights under treaties preserved.
‘‘§ 60301. Regular tonnage taxes
‘‘(a) LOWER RATE.—A tax is imposed at the rate of 2 cents
per ton (but not more than a total of 10 cents per ton per year)
at each entry in a port of the United States of—
‘‘(1) a vessel entering from a foreign port or place in North
America, Central America, the West Indies Islands, the Bahama
Islands, the Bermuda Islands, or the coast of South America
bordering the Caribbean Sea; or
‘‘(2) a vessel returning to the same port or place in the
United States from which it departed, and not entering the
United States from another port or place, except—
‘‘(A) a vessel of the United States;
‘‘(B) a recreational vessel (as defined in section 2101
of this title); or
‘‘(C) a barge.
‘‘(b) HIGHER RATE.—A tax is imposed at the rate of 6 cents
per ton (but not more than a total of 30 cents per ton per year)
on a vessel at each entry in a port of the United States from
a foreign port or place not named in subsection (a)(1).
‘‘(c) EXCEPTION FOR VESSELS ENTERING OTHER THAN BY SEA.—
Subsection (a) does not apply to a vessel entering other than by
sea from a foreign port or place at which tonnage, lighthouse,
or other equivalent taxes are not imposed on vessels of the United
States.
‘‘§ 60302. Special tonnage taxes
‘‘(a) ENTRY FROM FOREIGN PORT
OR PLACE.—Regardless of
whether a tax is imposed under section 60301 of this title, a
tax is imposed on a vessel at each entry in a port of the United
States from a foreign port or place at the following rates:
‘‘(1) 30 cents per ton on a vessel built in the United States
but owned in any part by a subject of a foreign country.
‘‘(2) 50 cents per ton on other vessels not of the United
States.
‘‘(3) 50 cents per ton on a vessel of the United States
having an officer who is not a citizen of the United States.
‘‘(4) $2 per ton on a foreign vessel entering from a foreign
port or place at which vessels of the United States are not
ordinarily allowed to enter and trade.
‘‘(b) VESSELS NOT OF THE UNITED STATES TRANSPORTING PROP-
ERTY BETWEEN DISTRICTS.—Regardless of whether a tax is imposed
under section 60301 of this title, a tax of 50 cents per ton is
imposed on a vessel not of the United States at each entry in
one customs district from another district when transporting goods
loaded in one district to be delivered in another district.
‘‘(c) EXCEPTION
FOR VESSELS BECOMING DOCUMENTED.—The
tax of 50 cents per ton under this section does not apply to a
vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes
documented as a vessel of the United States before leaving
that port.
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‘‘§ 60303. Light money
‘‘(a) IMPOSITION OF TAX.—A tax of 50 cents per ton, to be
called ‘light money’, is imposed on a vessel not of the United
States at each entry in a port of the United States. This tax
shall be imposed and collected under the same regulations that
apply to tonnage taxes.
‘‘(b) EXCEPTION FOR VESSELS OWNED BY CITIZENS.—
‘‘(1) IN GENERAL.—Subsection (a) does not apply to a vessel
owned only by citizens of the United States if—
‘‘(A) the vessel is carrying a regular document issued
by a customhouse of the United States proving the vessel
to be owned only by citizens of the United States; and
‘‘(B) on entry of the vessel from a foreign port, the
individual designated under paragraph (2) states under
oath that—
‘‘(i) the document contains the names of all the
owners of the vessel; or
‘‘(ii) part of the ownership has been transferred
since the document was issued and, to the best of
that individual’s knowledge and belief, the vessel is
still owned only by citizens of the United States.
‘‘(2) PERSON TO MAKE STATEMENT.—The statement under
paragraph (1)(B) shall be made by—
‘‘(A) an owner if one resides at the port of entry;
or
‘‘(B) the master if an owner does not reside at the
port of entry.
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Sub-
section (a) section does not apply to a vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes
documented as a vessel of the United States before leaving
that port.
‘‘§ 60304. Presidential suspension of tonnage taxes and light
money
‘‘If the President is satisfied that the government of a foreign
country does not impose discriminating or countervailing duties
to the disadvantage of the United States, the President shall sus-
pend the imposition of special tonnage taxes and light money under
sections 60302 and 60303 of this title on vessels of that country.
‘‘§ 60305. Vessels in distress
‘‘A vessel is exempt from tonnage taxes and light money when
it enters because it is in distress.
‘‘§ 60306. Vessels not engaged in trade
‘‘A vessel is exempt from tonnage taxes and light money when
not engaged in trade.
‘‘§ 60307. Vessels engaged in coastwise trade or the fisheries
‘‘A vessel with a registry endorsement or a coastwise endorse-
ment, trading from one port in the United States to another port
in the United States or employed in the bank, whale, or other
fisheries, is exempt from tonnage taxes and light money.
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‘‘§ 60308. Vessels engaged in Great Lakes trade
‘‘A documented vessel with a registry endorsement, engaged
in foreign trade on the Great Lakes or their tributary or connecting
waters in trade with Canada, does not become subject to tonnage
taxes or light money because of that trade.
‘‘§ 60309. Passenger vessels making trips between ports of
the United States and foreign ports
‘‘A passenger vessel making at least 3 trips per week between
a port of the United States and a foreign port is exempt from
tonnage taxes and light money.
‘‘§ 60310. Vessels making daily trips on interior waters
‘‘A vessel making regular daily trips between a port of the
United States and a port of Canada only on interior waters not
navigable to the ocean is exempt from tonnage taxes and light
money, except on its first clearing each year.
‘‘§ 60311. Hospital vessels in time of war
‘‘In time of war, a hospital vessel is exempt from tonnage
taxes, light money, and pilotage charges in the ports of the United
States if the vessel is one for which the conditions of the inter-
national convention for the exemption of hospital ships from tax-
ation in time of war, concluded at The Hague on December 21,
1904, are satisfied. The President by proclamation shall name the
vessels for which the conditions are satisfied and state when the
exemption begins and ends.
‘‘§ 60312. Rights under treaties preserved
‘‘This chapter and chapter 605 of this title do not affect a
right or privilege of a foreign country relating to tonnage taxes
or other duties on vessels under a law or treaty of the United
States.
‘‘CHAPTER 605—DISCRIMINATING DUTIES AND
RECIPROCAL PRIVILEGES
‘‘Sec.
‘‘60501.
Vessels allowed to import.
‘‘60502.
Discriminating duty on goods imported in foreign vessels or from contig-
uous countries.
‘‘60503.
Reciprocal suspension of discriminating duties.
‘‘60504.
Reciprocal privileges for recreational vessels.
‘‘60505.
Retaliatory suspension of commercial privileges.
‘‘60506.
Retaliation against British dominions of North America.
‘‘60507.
Suspension of free passage through Saint Marys Falls Canal.
‘‘§ 60501. Vessels allowed to import
‘‘(a) IN GENERAL.—Except as otherwise provided by treaty,
goods may be imported into the United States from a foreign
port or place only in—
‘‘(1) a vessel of the United States; or
‘‘(2) a foreign vessel owned only by citizens or subjects
of the country—
‘‘(A) in which the goods are grown, produced, or manu-
factured; or
‘‘(B) from which the goods can only be, or most usually
are, first shipped for transportation.
President.
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PUBLIC LAW 109–304—OCT. 6, 2006
‘‘(b) EXCEPTION FOR VESSELS OF COUNTRIES NOT MAINTAINING
SIMILAR RESTRICTIONS.—Subsection (a) does not apply to a vessel
of a foreign country that does not maintain a similar restriction
against United States documented vessels.
‘‘(c) EXCEPTION FOR VESSELS BECOMING DOCUMENTED.—Sub-
section (a) does not apply to a vessel that—
‘‘(1) is owned only by citizens of the United States; and
‘‘(2) after entering a port of the United States, becomes
documented as a vessel of the United States before leaving
that port.
‘‘(d) SEIZURE AND FORFEITURE.—If goods are imported in viola-
tion of this section, the goods and the vessel in which they are
imported, along with its equipment and other cargo, may be seized
by and forfeited to the United States Government.
‘‘§ 60502. Discriminating duty on goods imported in foreign
vessels or from contiguous countries
‘‘(a) IMPOSITION OF DUTY.—A discriminating duty of 10 percent
ad valorem (in addition to other duties imposed by law) is imposed
on goods—
‘‘(1) imported in a vessel not of the United States unless
the vessel—
‘‘(A) is entitled by law or treaty to enter the ports
of the United States on payment of the same duties as
are payable on goods imported in a vessel of the United
States; or
‘‘(B)(i) is owned only by citizens of the United States;
and
‘‘(ii) after entering a port of the United States, becomes
documented as a vessel of the United States before leaving
that port; or
‘‘(2) produced or manufactured in a foreign country not
contiguous to the United States and imported from a country
contiguous to the United States, unless imported in the usual
course of strictly retail trade.
‘‘(b) SEIZURE AND FORFEITURE.—If goods are imported without
payment of the duty required by this section, the goods and the
vessel in which they are imported may be seized by, and forfeited
to, the United States Government.
‘‘§ 60503. Reciprocal suspension of discriminating duties
‘‘(a) GENERAL AUTHORITY.—On receiving satisfactory proof from
the government of a foreign country that it has suspended, in
any part, the imposition of discriminating duties for any class
of vessels owned by citizens of the United States or goods imported
in those vessels, the President may proclaim a reciprocal suspension
of discriminating duties for the same class of vessels owned by
citizens of that country or goods imported in those vessels.
‘‘(b) EFFECTIVE AND EXPIRATION DATES.—A suspension under
this section takes effect retroactively from the date the President
received the proof from the foreign government, and expires when
that government stops granting the reciprocal suspension.
‘‘§ 60504. Reciprocal privileges for recreational vessels
‘‘When the President is satisfied that yachts owned by residents
of the United States and used only for pleasure are allowed to
arrive at, depart from, and cruise in the waters of a foreign port
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without entering, clearing, or paying any duties or fees (including
cruising license fees), the Secretary of Homeland Security may
allow yachts from that foreign port used only for pleasure to arrive
at and depart from the ports of the United States and to cruise
in the waters of the United States without paying any duties
or fees. However, the Secretary may require foreign yachts to obtain
a license to cruise in the waters of the United States. The license
shall be in the form prescribed by the Secretary and contain limita-
tions about length of time, direction, place of cruising and action,
and other matters the Secretary considers appropriate. The license
shall be issued without cost to the yacht.
‘‘§ 60505. Retaliatory suspension of commercial privileges
‘‘(a) GENERAL AUTHORITY.—The President may proclaim a
suspension of commercial privileges to vessels of a foreign country
when—
‘‘(1) vessels of that country have been given the same
commercial privileges in the ports and waters of the United
States given to vessels of the United States (except the privilege
of engaging in coastwise commerce); and
‘‘(2) vessels of the United States are denied commercial
privileges in the ports or waters of that country given to vessels
of that country.
‘‘(b) APPLICATION.—A suspension under this section shall apply
to the same commercial privileges denied to vessels of the United
States in the ports or waters of the foreign country, and to the
same class of vessels of that country as the class of vessels of
the United States denied the privileges.
‘‘(c) EFFECTIVE DATE.—The President shall designate the effec-
tive date of the suspension in the proclamation.
‘‘(d) PENALTIES.—
‘‘(1) SEIZURE AND FORFEITURE.—If the master, officer, or
agent of a vessel of a foreign country does an act for the
vessel in the ports or waters of the United States in violation
of a proclamation issued under this section, the vessel and
the goods on the vessel may be seized by, and forfeited to,
the United States Government.
‘‘(2) FINE OR IMPRISONMENT.—A person opposing an official
of the Government enforcing this section shall be fined under
title 18, imprisoned for not more than 2 years, or both.
‘‘§ 60506. Retaliation against British dominions of North
America
‘‘(a) GENERAL AUTHORITY.—The President by proclamation may
prohibit vessels of the British dominions of North America, their
masters and crews, and products of or coming from those dominions,
from entering waters, ports, or places of the United States when
the President is satisfied that—
‘‘(1) fishermen or fishing vessels of the United States in
waters, ports, or places of the British dominions of North
America are being or recently have been—
‘‘(A) denied rights provided by law or treaty;
‘‘(B) subjected to unreasonable restrictions in the exer-
cise of those rights; or
‘‘(C) otherwise harassed;
‘‘(2) fishermen or fishing vessels of the United States,
having a permit under the laws of the United States to dock
President.
Licensing.
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or trade at a port or place in the British dominions of North
America, are being or recently have been—
‘‘(A) denied the privilege of entering the port or place
in the same manner and under the same regulations
applicable to trading vessels of the most-favored-nation;
‘‘(B) prevented from buying supplies allowed to be sold
to trading vessels of the most-favored-nation; or
‘‘(C) otherwise harassed; or
‘‘(3) other vessels of the United States or their masters
or crews in waters, ports, or places of the British dominions
of North America are being or recently have been—
‘‘(A) denied privileges given to vessels of the most-
favored-nation or their masters or crews; or
‘‘(B) otherwise harassed.
‘‘(b) COVERAGE
AND EXCEPTIONS.—The President may apply
a proclamation under this section to any of the subjects named,
and may include exceptions for vessels in distress or need of sup-
plies. The President may change, revoke, and renew the proclama-
tion.
‘‘(c) PENALTIES.—A person violating a proclamation issued
under this section shall be fined under title 18, imprisoned for
not more than 2 years, or both. A vessel or goods found in waters,
ports, or places of the United States in violation of the proclamation
may be seized by, and forfeited to, the United States Government.
‘‘§ 60507. Suspension of free passage through Saint Marys
Falls Canal
‘‘(a) PURPOSE.—The purpose of this section is to secure recip-
rocal advantages for the citizens, ports, and vessels of the United
States.
‘‘(b) GENERAL AUTHORITY.—When the President is satisfied that
vessels of the United States, or passengers or cargo being trans-
ported to a port of the United States, are prohibited from passing
through a canal or lock connected with the navigation of the Saint
Lawrence River, the Great Lakes, or their connecting waterways,
or burdened in that passage by tolls or other means that are
unreasonable in view of the free passage through the Saint Marys
Falls Canal allowed to vessels of all countries, the President by
proclamation may suspend the right of free passage through the
Saint Marys Falls Canal for vessels owned by subjects of the country
imposing the prohibition, tolls, or other burdens and for passengers
and cargo being transported to the ports of that country, even
when carried in vessels of the United States. The suspension shall
apply to the extent and for the time the President considers appro-
priate.
‘‘(c) IMPOSITION OF TOLL.—
‘‘(1) IN GENERAL.—During a suspension under this section,
the President shall impose a toll of not more than $2 per
ton on cargo and not more than $5 on each passenger.
‘‘(2) EXCEPTIONS.—Notwithstanding paragraph (1), a toll
may not be imposed on passengers or cargo landed at
Ogdensburg, New York, or any port west of Ogdensburg and
south of a line drawn from the northern boundary of New
York through the Saint Lawrence River, the Great Lakes, and
their connecting channels to the northern boundary of Min-
nesota.
‘‘(d) COLLECTION OF TOLL.—
President.
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‘‘(1) IN GENERAL.—A toll imposed under this section shall
be collected under regulations prescribed by the Secretary of
Homeland Security. The Secretary may require the master
of a vessel to provide a sworn statement of the amount and
kind of cargo, the number of passengers, and the destination
of the passengers and cargo.
‘‘(2) PROOF OF LANDING.—When applicable, the Secretary
also may require satisfactory proof that the passengers and
cargo were landed at a port described in subsection (c)(2).
Until that proof is provided, the Secretary may assume the
passengers and cargo were not landed at such a port, and
the amount of a toll that otherwise would be imposed is a
lien enforceable against the vessel when found in the waters
of the United States.’’.
SEC. 10. SUBTITLE VII OF TITLE 46.
Subtitle VII of title 46, United States Code, as redesignated
by section 9(a) of this Act, is amended as follows:
(1) The subtitle heading and analysis are amended to read
as follows:
‘‘Subtitle VII—Security and Drug Enforcement
‘‘Chapter
Sec.
‘‘701. Port Security ...........................................................................................70101
‘‘703. Maritime Security ..................................................................................70301
‘‘705. Maritime Drug Law Enforcement ......................................................70501’’.
(2) Add after chapter 701 the following:
‘‘CHAPTER 703—MARITIME SECURITY
‘‘Sec.
‘‘70301.
Definitions.
‘‘70302.
International measures for seaport and vessel security.
‘‘70303.
Security standards at foreign ports.
‘‘70304.
Travel advisories on security at foreign ports.
‘‘70305.
Suspension of passenger services.
‘‘70306.
Report on terrorist threats.
‘‘§ 70301. Definitions
‘‘In this chapter:
‘‘(1) COMMON
CARRIER.—The term ‘common carrier’ has
the meaning given that term in section 40102 of this title.
‘‘(2) PASSENGER VESSEL.—The term ‘passenger vessel’ has
the meaning given that term in section 2101 of this title.
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary
of the department in which the Coast Guard is operating.
‘‘§ 70302. International measures for seaport and vessel secu-
rity
‘‘Congress encourages the President to continue to seek agree-
ment on international seaport and vessel security through the Inter-
national Maritime Organization. In developing an agreement, each
member country of the International Maritime Organization should
consult with appropriate private sector interests in that country.
The agreement would establish seaport and vessel security meas-
ures and could include—
‘‘(1) seaport screening of cargo and baggage similar to that
done at airports;
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‘‘(2) security measures to restrict access to cargo, vessels,
and dockside property to authorized personnel only;
‘‘(3) additional security on board vessels;
‘‘(4) licensing or certification of compliance with appropriate
security standards; and
‘‘(5) other appropriate measures to prevent unlawful acts
against passengers and crews on vessels.
‘‘§ 70303. Security standards at foreign ports
‘‘(a) GENERAL REQUIREMENTS.—The Secretary shall develop and
implement a plan to assess the effectiveness of the security meas-
ures maintained at foreign ports that the Secretary, in consultation
with the Secretary of State, determines pose a high risk of acts
of terrorism against passenger vessels. In carrying out this sub-
section, the Secretary shall consult with the Secretary of State
about the terrorist threat that exists in each country and poses
a high risk of acts of terrorism against passenger vessels.
‘‘(b) NOTICE AND RECOMMENDATIONS TO OTHER COUNTRIES.—
If the Secretary, after implementing the plan under subsection
(a), determines that a port does not maintain and administer effec-
tive security measures, the Secretary of State (after being informed
by the Secretary) shall—
‘‘(1) notify the appropriate government authorities of the
country in which the port is located of the determination;
and
‘‘(2) recommend steps necessary to bring the security meas-
ures at that port up to the standard used by the Secretary
in making the assessment under subsection (a).
‘‘(c) ANTITERRORISM ASSISTANCE.—The President is encouraged
to provide antiterrorism assistance related to maritime security
under chapter 8 of part II of the Foreign Assistance Act of 1961
(22 U.S.C. 2349aa et seq.) to foreign countries, especially for a
port that the Secretary determines under subsection (b) does not
maintain and administer effective security measures.
‘‘§ 70304. Travel advisories on security at foreign ports
‘‘(a) GENERAL REQUIREMENTS.—On being notified by the Sec-
retary that the Secretary has determined that a condition exists
that threatens the safety or security of passengers, passenger ves-
sels, or crew traveling to or from a foreign port that the Secretary
has determined under section 70303(b) of this title does not main-
tain and administer effective security measures, the Secretary of
State immediately shall issue a travel advisory for that port. The
Secretary of State shall take the necessary steps to widely publicize
the travel advisory.
‘‘(b) LIFTING ADVISORIES.—A travel advisory issued under sub-
section (a) may be lifted only if the Secretary, in consultation
with the Secretary of State, has determined that effective security
measures are maintained and administered at the port.
‘‘(c) NOTICE TO CONGRESS.—The Secretary of State shall notify
Congress immediately of any change in the status of a travel
advisory issued under this section.
‘‘§ 70305. Suspension of passenger services
‘‘(a) GENERAL AUTHORITY.—Whenever the President determines
that a foreign nation permits the use of territory under its jurisdic-
tion as a base of operations or training for, or as a sanctuary
Notification.
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for, or in any way arms, aids, or abets, a terrorist or terrorist
group that knowingly uses the illegal seizure of passenger vessels
or the threat thereof as an instrument of policy, the President
may suspend the right of any passenger vessel common carrier
to operate to or from, and the right of any passenger vessel of
the United States to use, a port in that foreign nation for passenger
service. The suspension may be without notice or hearing and
for as long as the President determines is necessary to ensure
the security of passenger vessels against unlawful seizure.
‘‘(b) PROHIBITION.—A passenger vessel common carrier, or a
passenger vessel of the United States, may not operate in violation
of a suspension under this section.
‘‘(c) PENALTIES.—
‘‘(1) DENIAL OF ENTRY.—If a person operates a vessel in
violation of this section, the Secretary may deny the vessels
of that person entry to ports of the United States.
‘‘(2) CIVIL PENALTY.—A person violating this section is liable
to the United States Government for a civil penalty of not
more than $50,000. Each day a vessel uses a prohibited port
is a separate violation.
‘‘§ 70306. Report on terrorist threats
‘‘(a) CONTENT.—Not later than February 28 of each year, the
Secretary shall submit a report to Congress on the threat from
acts of terrorism to United States ports and vessels operating
from those ports. The Secretary shall include a description of activi-
ties undertaken under title I of the Maritime Transportation Secu-
rity Act of 2002 (Public Law 107–295, 116 Stat. 2066) and an
analysis of the effect of those activities on port security against
acts of terrorism.
‘‘(b) SUBMISSION.—The report shall be submitted to the Com-
mittee on International Relations and the Committee on Transpor-
tation and Infrastructure of the House of Representatives and the
Committee on Foreign Relations and the Committee on Commerce,
Science, and Transportation of the Senate. Any classified informa-
tion in the report shall be submitted separately as an addendum.
‘‘CHAPTER 705—MARITIME DRUG LAW ENFORCEMENT
‘‘Sec.
‘‘70501.
Findings and declarations.
‘‘70502.
Definitions.
‘‘70503.
Manufacture, distribution, or possession of controlled substances on ves-
sels.
‘‘70504.
Jurisdiction and venue.
‘‘70505.
Failure to comply with international law as a defense.
‘‘70506.
Penalties.
‘‘70507.
Forfeitures.
‘‘§ 70501. Findings and declarations
‘‘Congress finds and declares that trafficking in controlled sub-
stances aboard vessels is a serious international problem, is univer-
sally condemned, and presents a specific threat to the security
and societal well-being of the United States.
‘‘§ 70502. Definitions
‘‘(a) APPLICATION OF OTHER DEFINITIONS.—The definitions in
section 102 of the Comprehensive Drug Abuse Prevention and Con-
trol Act of 1970 (21 U.S.C. 802) apply to this chapter.
Confidential
information.
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‘‘(b) VESSEL OF THE UNITED STATES.—In this chapter, the term
‘vessel of the United States’ means—
‘‘(1) a vessel documented under chapter 121 of this title
or numbered as provided in chapter 123 of this title;
‘‘(2) a vessel owned in any part by an individual who
is a citizen of the United States, the United States Government,
the government of a State or political subdivision of a State,
or a corporation incorporated under the laws of the United
States or of a State, unless—
‘‘(A) the vessel has been granted the nationality of
a foreign nation under article 5 of the 1958 Convention
on the High Seas; and
‘‘(B) a claim of nationality or registry for the vessel
is made by the master or individual in charge at the
time of the enforcement action by an officer or employee
of the United States who is authorized to enforce applicable
provisions of United States law; and
‘‘(3) a vessel that was once documented under the laws
of the United States and, in violation of the laws of the United
States, was sold to a person not a citizen of the United States,
placed under foreign registry, or operated under the authority
of a foreign nation, whether or not the vessel has been granted
the nationality of a foreign nation.
‘‘(c) VESSEL SUBJECT
TO
THE JURISDICTION
OF
THE UNITED
STATES.—
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel subject
to the jurisdiction of the United States’ includes—
‘‘(A) a vessel without nationality;
‘‘(B) a vessel assimilated to a vessel without nationality
under paragraph (2) of article 6 of the 1958 Convention
on the High Seas;
‘‘(C) a vessel registered in a foreign nation if that
nation has consented or waived objection to the enforce-
ment of United States law by the United States;
‘‘(D) a vessel in the customs waters of the United
States;
‘‘(E) a vessel in the territorial waters of a foreign
nation if the nation consents to the enforcement of United
States law by the United States; and
‘‘(F) a vessel in the contiguous zone of the United
States, as defined in Presidential Proclamation 7219 of
September 2, 1999 (43 U.S.C. 1331 note), that—
‘‘(i) is entering the United States;
‘‘(ii) has departed the United States; or
‘‘(iii) is a hovering vessel as defined in section
401 of the Tariff Act of 1930 (19 U.S.C. 1401).
‘‘(2) CONSENT OR WAIVER OF OBJECTION.—Consent or waiver
of objection by a foreign nation to the enforcement of United
States law by the United States under paragraph (1)(C) or
(E)—
‘‘(A) may be obtained by radio, telephone, or similar
oral or electronic means; and
‘‘(B) is proved conclusively by certification of the Sec-
retary of State or the Secretary’s designee.
‘‘(d) VESSEL WITHOUT NATIONALITY.—
‘‘(1) IN GENERAL.—In this chapter, the term ‘vessel without
nationality’ includes—
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‘‘(A) a vessel aboard which the master or individual
in charge makes a claim of registry that is denied by
the nation whose registry is claimed;
‘‘(B) a vessel aboard which the master or individual
in charge fails, on request of an officer of the United
States authorized to enforce applicable provisions of United
States law, to make a claim of nationality or registry for
that vessel; and
‘‘(C) a vessel aboard which the master or individual
in charge makes a claim of registry and for which the
claimed nation of registry does not affirmatively and
unequivocally assert that the vessel is of its nationality.
‘‘(2) VERIFICATION OR DENIAL.—A claim of registry under
paragraph (1)(A) or (C) may be verified or denied by radio,
telephone, or similar oral or electronic means. The denial of
such a claim is proved conclusively by certification of the Sec-
retary of State or the Secretary’s designee.
‘‘(e) CLAIM OF NATIONALITY OR REGISTRY.—A claim of nation-
ality or registry under this section includes only—
‘‘(1) possession on board the vessel and production of docu-
ments evidencing the vessel’s nationality as provided in article
5 of the 1958 Convention on the High Seas;
‘‘(2) flying its nation’s ensign or flag; or
‘‘(3) a verbal claim of nationality or registry by the master
or individual in charge of the vessel.
‘‘§ 70503. Manufacture, distribution, or possession of con-
trolled substances on vessels
‘‘(a) PROHIBITIONS.—An individual may not knowingly or inten-
tionally manufacture or distribute, or possess with intent to manu-
facture or distribute, a controlled substance on board—
‘‘(1) a vessel of the United States or a vessel subject to
the jurisdiction of the United States; or
‘‘(2) any vessel if the individual is a citizen of the United
States or a resident alien of the United States.
‘‘(b) EXTENSION
BEYOND
TERRITORIAL
JURISDICTION.—Sub-
section (a) applies even though the act is committed outside the
territorial jurisdiction of the United States.
‘‘(c) NONAPPLICATION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), subsection (a)
does not apply to—
‘‘(A) a common or contract carrier or an employee of
the carrier who possesses or distributes a controlled sub-
stance in the lawful and usual course of the carrier’s busi-
ness; or
‘‘(B) a public vessel of the United States or an indi-
vidual on board the vessel who possesses or distributes
a controlled substance in the lawful course of the individ-
ual’s duties.
‘‘(2) ENTERED
IN
MANIFEST.—Paragraph (1) applies only
if the controlled substance is part of the cargo entered in
the vessel’s manifest and is intended to be imported lawfully
into the country of destination for scientific, medical, or other
lawful purposes.
‘‘(d) BURDEN
OF PROOF.—The United States Government is
not required to negative a defense provided by subsection (c) in
a complaint, information, indictment, or other pleading or in a
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trial or other proceeding. The burden of going forward with the
evidence supporting the defense is on the person claiming its ben-
efit.
‘‘§ 70504. Jurisdiction and venue
‘‘(a) JURISDICTION.—Jurisdiction of the United States with
respect to a vessel subject to this chapter is not an element of
an offense. Jurisdictional issues arising under this chapter are
preliminary questions of law to be determined solely by the trial
judge.
‘‘(b) VENUE.—A person violating section 70503 of this title shall
be tried in the district court of the United States for—
‘‘(1) the district at which the person enters the United
States; or
‘‘(2) the District of Columbia.
‘‘§ 70505. Failure to comply with international law as a
defense
‘‘A person charged with violating section 70503 of this title
does not have standing to raise a claim of failure to comply with
international law as a basis for a defense. A claim of failure to
comply with international law in the enforcement of this chapter
may be made only by a foreign nation. A failure to comply with
international law does not divest a court of jurisdiction and is
not a defense to a proceeding under this chapter.
‘‘§ 70506. Penalties
‘‘(a) VIOLATIONS.—A person violating section 70503 of this title
shall be punished as provided in section 1010 of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 960).
However, if the offense is a second or subsequent offense as provided
in section 1012(b) of that Act (21 U.S.C. 962(b)), the person shall
be punished as provided in section 1012 of that Act (21 U.S.C.
962).
‘‘(b) ATTEMPTS
AND CONSPIRACIES.—A person attempting or
conspiring to violate section 70503 of this title is subject to the
same penalties as provided for violating section 70503.
‘‘§ 70507. Forfeitures
‘‘(a) IN GENERAL.—Property described in section 511(a) of the
Comprehensive Drug Abuse Prevention and Control Act of 1970
(21 U.S.C. 881(a)) that is used or intended for use to commit,
or to facilitate the commission of, an offense under section 70503
of this title may be seized and forfeited in the same manner that
similar property may be seized and forfeited under section 511
of that Act (21 U.S.C. 881).
‘‘(b) PRIMA FACIE EVIDENCE OF VIOLATION.—Practices commonly
recognized as smuggling tactics may provide prima facie evidence
of intent to use a vessel to commit, or to facilitate the commission
of, an offense under section 70503 of this title, and may support
seizure and forfeiture of the vessel, even in the absence of controlled
substances aboard the vessel. The following indicia, among others,
may be considered, in the totality of the circumstances, to be prima
facie evidence that a vessel is intended to be used to commit,
or to facilitate the commission of, such an offense:
‘‘(1) The construction or adaptation of the vessel in a
manner that facilitates smuggling, including—
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‘‘(A) the configuration of the vessel to ride low in the
water or present a low hull profile to avoid being detected
visually or by radar;
‘‘(B) the presence of any compartment or equipment
that is built or fitted out for smuggling, not including
items such as a safe or lock-box reasonably used for the
storage of personal valuables;
‘‘(C) the presence of an auxiliary tank not installed
in accordance with applicable law or installed in such a
manner as to enhance the vessel’s smuggling capability;
‘‘(D) the presence of engines that are excessively over-
powered in relation to the design and size of the vessel;
‘‘(E) the presence of materials used to reduce or alter
the heat or radar signature of the vessel and avoid detec-
tion;
‘‘(F) the presence of a camouflaging paint scheme, or
of materials used to camouflage the vessel, to avoid detec-
tion; or
‘‘(G) the display of false vessel registration numbers,
false indicia of vessel nationality, false vessel name, or
false vessel homeport.
‘‘(2) The presence or absence of equipment, personnel, or
cargo inconsistent with the type or declared purpose of the
vessel.
‘‘(3) The presence of excessive fuel, lube oil, food, water,
or spare parts, inconsistent with legitimate vessel operation,
inconsistent with the construction or equipment of the vessel,
or inconsistent with the character of the vessel’s stated purpose.
‘‘(4) The operation of the vessel without lights during times
lights are required to be displayed under applicable law or
regulation and in a manner of navigation consistent with smug-
gling tactics used to avoid detection by law enforcement authori-
ties.
‘‘(5) The failure of the vessel to stop or respond or heave
to when hailed by government authority, especially where the
vessel conducts evasive maneuvering when hailed.
‘‘(6) The declaration to government authority of apparently
false information about the vessel, crew, or voyage or the failure
to identify the vessel by name or country of registration when
requested to do so by government authority.
‘‘(7) The presence of controlled substance residue on the
vessel, on an item aboard the vessel, or on an individual aboard
the vessel, of a quantity or other nature that reasonably
indicates manufacturing or distribution activity.
‘‘(8) The use of petroleum products or other substances
on the vessel to foil the detection of controlled substance res-
idue.
‘‘(9) The presence of a controlled substance in the water
in the vicinity of the vessel, where given the currents, weather
conditions, and course and speed of the vessel, the quantity
or other nature is such that it reasonably indicates manufac-
turing or distribution activity.’’.
SEC. 11. SUBTITLE VIII OF TITLE 46.
Title 46, United States Code, is amended by adding after sub-
title VII the following:
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‘‘Subtitle VIII—Miscellaneous
‘‘Chapter
Sec.
‘‘801. Wrecks and Salvage ...............................................................................
80101
‘‘803. Ice and Derelicts .....................................................................................
80301
‘‘805. Safe Containers for International Cargo ..........................................
80501
‘‘CHAPTER 801—WRECKS AND SALVAGE
‘‘Sec.
‘‘80101.
Vessel stranded on foreign coast.
‘‘80102.
License to salvage on Florida coast.
‘‘80103.
Property on Florida coast to be taken to port of entry.
‘‘80104.
Salvaging operations by foreign vessels.
‘‘80105.
Canadian vessels aiding vessels in United States waters.
‘‘80106.
International agreement on derelicts.
‘‘80107.
Salvors of life to share in remuneration.
‘‘§ 80101. Vessel stranded on foreign coast
‘‘(a) DUTIES
OF CONSULAR OFFICER.—When a vessel of the
United States is stranded on a coast of a foreign country, the
consular officer in that country shall take proper measures, to
the extent the laws of that country allow, to—
‘‘(1) save and secure the vessel and property on the vessel;
and
‘‘(2) prepare an inventory of the property that is saved.
‘‘(b) DELIVERY TO OWNER.—After deducting the expenses, the
consular officer shall deliver the property, with an inventory, to
the owner of the property.
‘‘(c) LIMITATION
ON TAKING POSSESSION.—A consular officer
may not take possession of property under this section when the
owner, master, or consignee is present or able to take possession
of the property.
‘‘§ 80102. License to salvage on Florida coast
‘‘(a) LICENSING REQUIREMENTS.—To be regularly employed in
the business of salvaging on the coast of Florida, a vessel and
its master each must have a license issued by a judge of the
district court of the United States for a judicial district of Florida.
‘‘(b) JUDICIAL FINDINGS.—Before issuing a license under this
section, the judge must be satisfied, when the license is for—
‘‘(1) a vessel, that the vessel is seaworthy and properly
equipped for the business of saving property shipwrecked and
in distress; or
‘‘(2) a master, that the master is trustworthy and innocent
of any fraud or misconduct related to property shipwrecked
or saved on the coast.
‘‘§ 80103. Property on Florida coast to be taken to port of
entry
‘‘(a) IN GENERAL.—Property taken from a wreck, the sea, or
a key or shoal, on the coast of Florida and within the jurisdiction
of the United States, shall be brought to a port of entry of the
United States.
‘‘(b) SEIZURE AND FORFEITURE.—A vessel transporting property
described in subsection (a) to a foreign port may be seized by,
and forfeited to, the United States Government. A forfeiture under
this subsection accrues half to the informer and half to the Govern-
ment.
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‘‘§ 80104. Salvaging operations by foreign vessels
‘‘(a) PROHIBITION.—Except as provided in this section or section
80105 of this title, a foreign vessel may not, under penalty of
forfeiture, engage in salvaging operations on the Atlantic or Pacific
coast of the United States, in any portion of the Great Lakes
or their connecting or tributary waters, including any portion of
the Saint Lawrence River through which the international boundary
line extends, or in territorial waters of the United States on the
Gulf of Mexico.
‘‘(b) WHEN SUITABLE VESSEL NOT AVAILABLE.—The Secretary
of Homeland Security may authorize a foreign vessel to engage
in salvaging operations in a particular locality if, on investigation,
the Secretary is satisfied that there is not available in that locality
a suitable vessel that is—
‘‘(1) owned only by citizens of the United States (including
a Bowaters corporation under section 12118 of this title); and
‘‘(2) documented under chapter 121 of this title or numbered
under chapter 123 of this title.
‘‘(c) OPERATIONS AUTHORIZED BY TREATY.—This section does
not prohibit or restrict assistance to vessels or salvaging operations
authorized by treaty, including—
‘‘(1) article II of the Treaty between the United States
and Great Britain concerning reciprocal rights for United States
and Canada in the conveyance of prisoners and wrecking and
salvage, signed at Washington, May 18, 1908 (35 Stat. 2036);
or
‘‘(2) the Treaty between the United States of America and
Mexico to facilitate assistance to and salvage of vessels in
territorial waters, signed at Mexico City, June 13, 1935 (49
Stat. 3359).
‘‘§ 80105. Canadian vessels aiding vessels in United States
waters
‘‘(a) IN GENERAL.—Canadian vessels and wrecking equipment
may give aid to Canadian or other vessels and property wrecked,
disabled, or in distress in the waters of the United States contiguous
to Canada, including—
‘‘(1) the canal and improvement of the waters between
Lake Erie and Lake Huron; and
‘‘(2) the Saint Marys River and canal.
‘‘(b) RECIPROCITY.—This section does not apply after the Presi-
dent proclaims that privileges reciprocal to those under subsection
(a) have been withdrawn or rendered inoperative by the Government
of Canada.
‘‘§ 80106. International agreement on derelicts
‘‘The President may make an international agreement with
other governments interested in the navigation of the North Atlantic
Ocean, providing for the reporting, marking, and removal of dan-
gerous wrecks, derelicts, and other menaces to navigation outside
the coast waters of the countries bordering the North Atlantic
Ocean.
‘‘§ 80107. Salvors of life to share in remuneration
‘‘(a) ENTITLEMENT OF SALVORS.—A salvor of human life, who
gave aid following an accident giving rise to salvage, is entitled
to a fair share of the payment awarded to the salvor for salvaging
Mexico.
Great Britain.
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the vessel or other property or preventing or minimizing damage
to the environment.
‘‘(b) COMMON OWNERSHIP OF VESSELS.—The right to remunera-
tion for aid or salvage services is not affected by common ownership
of the vessels giving and receiving the aid or salvage services.
‘‘(c) TIME LIMIT ON BRINGING ACTIONS.—A civil action to recover
remuneration for giving aid or salvage services must be brought
within 2 years after the date the aid or salvage services were
given, unless the court in which the action is brought is satisfied
that during that 2-year period there had not been a reasonable
opportunity to seize the aided or salvaged vessel within the jurisdic-
tion of the court or within the territorial waters of the country
of the plaintiff’s residence or principal place of business.
‘‘(d) NONAPPLICATION.—This section does not apply to a vessel
of war or a vessel owned by the United States Government appro-
priated only to a public service.
‘‘CHAPTER 803—ICE AND DERELICTS
‘‘Sec.
‘‘80301.
International agreements.
‘‘80302.
Patrol services.
‘‘80303.
Speed of vessel in ice region.
‘‘§ 80301. International agreements
‘‘(a) GENERAL AUTHORITY.—The President may make agree-
ments with interested maritime countries to—
‘‘(1) maintain in the North Atlantic Ocean a service of
ice patrol, of study and observation of ice and current condi-
tions, and of assistance to vessels and their crews requiring
assistance within the limits of the patrol;
‘‘(2) maintain a service of study and observation of ice
and current conditions in the waters affecting the set and
drift of ice in the North Atlantic Ocean; and
‘‘(3) take all practicable steps to ensure the destruction
or removal of derelicts in the northern part of the Atlantic
Ocean, east of the line drawn from Cape Sable to a point
in latitude 34 degrees north, longitude 70 degrees west, if
the destruction or removal is necessary.
‘‘(b) PAYMENT
BETWEEN
COUNTRIES.—The President may
include in an agreement under subsection (a) a provision for—
‘‘(1) payment to the United States Government by other
countries for their proportionate share of the expense of
maintaining the services; or
‘‘(2) contribution by the Government for its proportionate
share if the agreement provides for another country to maintain
the services.
‘‘§ 80302. Patrol services
‘‘(a) GENERAL REQUIREMENTS.—Unless the agreements made
under section 80301 of this title provide otherwise, an ice patrol
shall be maintained during the entire ice season in guarding the
southeastern, southern, and southwestern limits of the region of
icebergs in the vicinity of the Grand Banks of Newfoundland. The
patrol shall inform trans-Atlantic and other passing vessels by
radio and other available means of the ice conditions and the
extent of the dangerous region. During the ice season, there shall
be maintained a service of study of ice and current conditions,
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a service of providing assistance to vessels and crews requiring
assistance, and a service of removing and destroying derelicts.
Any of these services may be maintained during the remainder
of the year as may be advisable.
‘‘(b) WARNINGS TO VESSELS.—An ice patrol vessel shall warn
any vessel known to be approaching a dangerous area and rec-
ommend safe routes.
‘‘(c) RECORDING AND REPORTING INCIDENTS.—
‘‘(1) RECORDING.—An ice patrol vessel shall record the name
of a vessel and the facts of the case when the patrol observes
or knows that the vessel—
‘‘(A) is on other than a regular recognized or advertised
route crossing the North Atlantic Ocean;
‘‘(B) has crossed the fishing banks of Newfoundland
north of latitude 43 degrees north during the fishing sea-
son; or
‘‘(C) has passed through regions known or believed
to be endangered by ice when proceeding to and from
ports of North America.
‘‘(2) REPORTING.—The name of the vessel and all pertinent
information about the incident shall be reported to the govern-
ment of the country to which the vessel belongs if that govern-
ment requests.
‘‘(d) ADMINISTRATION.—The Commandant of the Coast Guard,
under the direction of the Secretary of the department in which
the Coast Guard is operating, shall carry out the services provided
for in this section and shall assign necessary vessels, material,
and personnel of the Coast Guard. On request of such Secretary,
the head of an agency may detail personnel, lend or contribute
material or equipment, or otherwise assist in carrying out the
services provided for in this section.
‘‘(e) ANNUAL REPORT.—The Commandant shall publish an
annual report of the activities of the services provided for in this
section. A copy of the report shall be provided to each interested
foreign government and to each agency assisting in the work.
‘‘§ 80303. Speed of vessel in ice region
‘‘(a) REQUIREMENT.—The master of a vessel of the United
States, when ice is reported on or near the vessel’s course, shall
proceed at a moderate speed or change the course of the vessel
to go well clear of the danger zone.
‘‘(b) CIVIL PENALTY.—A master violating this section is liable
to the United States Government for a civil penalty of not more
than $500.
‘‘CHAPTER 805—SAFE CONTAINERS FOR
INTERNATIONAL CARGO
‘‘Sec.
‘‘80501.
Definitions.
‘‘80502.
Application of Convention.
‘‘80503.
General authority of the Secretary.
‘‘80504.
Approval and examination.
‘‘80505.
Enforcement.
‘‘80506.
Delegation of authority.
‘‘80507.
Employee protection.
‘‘80508.
Amendments to Convention.
‘‘80509.
Civil penalty.
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‘‘§ 80501. Definitions
‘‘In this chapter:
‘‘(1) CONTAINER.—The term ‘container’ has the meaning
given that term in the Convention.
‘‘(2) CONVENTION.—The term ‘Convention’ means the Inter-
national Convention for Safe Containers, and its annexes, done
at Geneva, Switzerland, December 2, 1972.
‘‘(3) INTERNATIONAL TRANSPORT.—The term ‘international
transport’ means the transportation of a container between—
‘‘(A) a place in a foreign country and a place in the
jurisdiction of the United States; or
‘‘(B) two places outside the United States by United
States carriers.
‘‘(4) OWNER.—The term ‘owner’ includes the lessee or bailee
of a container if a written lease or bailment provides for the
lessee or bailee to exercise the owner’s responsibility for
maintaining and examining the container.
‘‘(5) SAFETY APPROVAL PLATE.—The term ‘safety approval
plate’ has the meaning given that term in annex I of the
Convention.
‘‘§ 80502. Application of Convention
‘‘The Convention applies to an owner of a container used in
international transport if the owner is domiciled or has its principal
office in the United States.
‘‘§ 80503. General authority of the Secretary
‘‘(a) IN GENERAL.—The Secretary of the department in which
the Coast Guard is operating shall carry out the Convention and
this chapter in the United States.
‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations
to carry out this chapter. The regulations shall—
‘‘(1) establish procedures for testing, inspecting, and ini-
tially approving containers and designs for containers, including
procedures for attaching, invalidating, and removing safety
approval plates for containers;
‘‘(2) establish procedures to be followed by the owners of
containers for the periodic examination of containers as pro-
vided in the Convention; and
‘‘(3) provide a method for developing, collecting, and
disseminating information about container safety and the inter-
national transport of containers.
‘‘(c) SAFETY APPROVAL PLATES.—If the owner of a container
without a safety approval plate establishes that the container satis-
fies the standards of the Convention, the Secretary may authorize
a safety approval plate to be attached to the container.
‘‘(d) SCHEDULE
OF FEES.—The Secretary may prescribe a
schedule of fees for services performed by the Secretary, or by
a person delegated authority under section 80506 of this title,
for the testing, inspection, and initial approval of containers and
container designs.
‘‘(e) ENCOURAGING INTERMODAL TRANSPORT.—To the maximum
extent possible, the Secretary shall encourage the development
and use of intermodal transport, using containers built to facilitate
economical, safe, and expeditious handling of containerized cargo
without intermediate reloading when it is being transported over
land, air, and sea areas.
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‘‘§ 80504. Approval and examination
‘‘(a) DOMICILE
AND PRINCIPAL OFFICE
IN UNITED STATES.—
A container owner domiciled and having its principal office in
the United States shall have the container—
‘‘(1) approved initially under procedures prescribed by the
Secretary of the department in which the Coast Guard is oper-
ating or by the government of another country that is a party
to the Convention; and
‘‘(2) examined periodically as provided in the Convention
under procedures prescribed by the Secretary.
‘‘(b) DOMICILE
OR PRINCIPAL OFFICE
IN UNITED STATES.—A
container owner domiciled or having its principal office in the
United States shall have the container—
‘‘(1) approved initially under procedures prescribed by the
Secretary or by the government of another country that is
a party to the Convention; and
‘‘(2) examined periodically as provided in the Convention,
under procedures prescribed by the government of the country
in which the owner is domiciled or has its principal office,
as long as that country is a party to the Convention.
‘‘(c) NEITHER DOMICILE NOR PRINCIPAL OFFICE
IN UNITED
STATES.—A container owner neither domiciled nor having its prin-
cipal office in the United States or another country that is a
party to the Convention may submit a container for initial approval
and periodic examination under procedures prescribed by the Sec-
retary.
‘‘§ 80505. Enforcement
‘‘(a) IN GENERAL.—To enforce the Convention, this chapter,
and regulations prescribed under this chapter, the Secretary of
the department in which the Coast Guard is operating may—
‘‘(1) examine, or require to be examined, containers in
international transport;
‘‘(2) approve designs for containers;
‘‘(3) inspect and test containers being manufactured;
‘‘(4) issue a detention order removing or excluding a con-
tainer from service until the container owner satisfies the Sec-
retary that the container meets the standards of the Conven-
tion, if the container—
‘‘(A) does not have a safety approval plate attached
to it; or
‘‘(B) has a safety approval plate attached but there
is significant evidence that the container is in a condition
that creates an obvious risk to safety;
‘‘(5) take other appropriate action, including issuing nec-
essary orders, to remove a container from service or restrict
its use if the container is not in compliance with the Convention,
this chapter, or regulations prescribed under this chapter, but
does not present an obvious risk to safety; and
‘‘(6) allow a container found to be unsafe or without a
safety approval plate to be moved to another location for repair
or other disposition, under restrictions consistent with the
intent of the Convention.
‘‘(b) PAYMENT OF EXPENSES.—
‘‘(1) EXAMINATION.—The owner of a container involved in
an action by the Secretary under this section related to an
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examination of the container shall pay or reimburse the Sec-
retary for the expenses arising from that action, except for
the costs of routine examinations of the container or a safety
approval plate.
‘‘(2) TESTING, INSPECTION, AND
INITIAL
APPROVAL.—The
owner of a container submitted to the procedure established
by the Secretary for testing, inspection, and initial approval,
and the manufacturer of a container that submits a design
to the procedure established by the Secretary for testing, inspec-
tion, and initial approval, shall pay or reimburse the Secretary
for the expenses arising from the testing, inspection, or
approval.
‘‘(3) CREDIT TO APPROPRIATION.—Amounts received by the
Secretary as reimbursement shall be credited to the appropria-
tion for operating expenses of the Coast Guard.
‘‘(c) PRESUMPTION BASED ON SAFETY APPROVAL PLATE.—A con-
tainer bearing a safety approval plate authorized by a country
that is a party to the Convention is presumed to be in a safe
condition unless there is significant evidence that the container
is in a condition that creates an obvious risk to safety.
‘‘(d) NOTICE OF ORDERS.—
‘‘(1) IN GENERAL.—When the Secretary issues a detention
or other order under this section, the Secretary promptly shall
notify in writing—
‘‘(A) the owner of the container;
‘‘(B) the owner’s agent; or
‘‘(C) if the identity of the owner is not apparent from
the container or shipping documents, the custodian.
‘‘(2) INFORMATION TO INCLUDE.—The notification shall iden-
tify the container involved, give the location of the container,
and describe the condition or situation giving rise to the order.
‘‘(e) DURATION OF ORDERS.—An order issued by the Secretary
under this section remains in effect until—
‘‘(1) the Secretary declares the container to be in compliance
with the standards of the Convention; or
‘‘(2) the container is removed permanently from service.
‘‘(f) NOTICE OF DEFECTIVE CONTAINER TO COUNTRY ISSUING
SAFETY APPROVAL PLATE.—If the Secretary has reason to believe
that a container bearing a safety approval plate issued by another
country was defective at the time of approval, the Secretary shall
notify that country.
‘‘§ 80506. Delegation of authority
‘‘(a) IN GENERAL.—The Secretary of the department in which
the Coast Guard is operating may delegate to any person, including
a public or private agency or nonprofit organization, authority to
grant initial approval for containers and designs and to attach
safety approval plates.
‘‘(b) REGULATIONS.—Before making a delegation under this sec-
tion, the Secretary shall prescribe regulations establishing—
‘‘(1) criteria to be followed in selecting a person to whom
authority is to be delegated;
‘‘(2) a detailed description of the duties and powers to
be carried out by the person to whom authority is delegated,
including the records the person shall keep; and
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‘‘(3) the review the Secretary will conduct to decide whether
the person is carrying out the delegated duties and powers
properly.
‘‘(c) INSPECTION OF RECORDS.—A person delegated authority
under this section shall make available to the Secretary for inspec-
tion, on request, records the person is required to keep.
‘‘(d) PENALTIES
AND ORDERS.—A person delegated authority
under this section may not—
‘‘(1) assess or collect, or attempt to assess or collect, a
penalty for violation of the Convention, this chapter, or an
order issued by the Secretary under this chapter; or
‘‘(2) issue or attempt to issue a detention or other order.
‘‘(e) PUBLICATION.—The Secretary shall publish in the Federal
Register or other appropriate publication—
‘‘(1) the name and address of each person to whom authority
is delegated;
‘‘(2) the duties and powers delegated; and
‘‘(3) the period of the delegation.
‘‘(f) REVOCATION.—The Secretary may revoke a delegation of
authority under this section at any time.
‘‘§ 80507. Employee protection
‘‘(a) PROHIBITION.—A person may not discharge or discriminate
against an employee because the employee has reported the exist-
ence of an unsafe container or a violation of this chapter or a
regulation prescribed under this chapter.
‘‘(b) COMPLAINTS.—An employee alleging to have been dis-
charged or discriminated against in violation of subsection (a) may
file a complaint with the Secretary of Labor. The complaint must
be filed within 60 days after the violation.
‘‘(c) ENFORCEMENT.—The Secretary of Labor may investigate
the complaint. If the Secretary of Labor finds there has been a
violation, the Secretary of Labor may bring a civil action in an
appropriate district court of the United States. The court has juris-
diction to restrain violations of subsection (a) and order appropriate
relief, including reinstatement of the employee to the employee’s
former position with back pay.
‘‘(d) NOTICE TO COMPLAINANT.—Within 30 days after receiving
a complaint under this section, the Secretary of Labor shall notify
the complainant of the intended action on the complaint.
‘‘§ 80508. Amendments to Convention
‘‘(a) PROPOSALS BY UNITED STATES.—The Secretary of State,
with the concurrence of the Secretary of the department in which
the Coast Guard is operating, may propose amendments to the
Convention or request a conference for amending the Convention
as provided in article IX of the Convention.
‘‘(b) PROPOSALS BY OTHER COUNTRIES.—An amendment commu-
nicated to the United States under article IX(2) of the Convention
may be accepted for the United States by the President, with
the advice and consent of the Senate. The President may declare
that the United States does not accept an amendment.
‘‘(c) AMENDMENTS TO ANNEXES.—
‘‘(1) IN GENERAL.—The Secretary of State, with the concur-
rence of the Secretary of the department in which the Coast
Guard is operating—
Deadline.
Deadline.
Federal Register,
publication.
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‘‘(A) may propose amendments to the annexes to the
Convention;
‘‘(B) may propose a conference for amending annexes
to the Convention; and
‘‘(C) shall consider and act on amendments to the
annexes to the Convention adopted by the Maritime Safety
Committee of the International Maritime Organization and
communicated to the United States under article X(2) of
the Convention.
‘‘(2) ACTION FOLLOWING APPROVAL OR OBJECTION.—If a pro-
posed amendment to an annex is approved by the United States,
the amendment shall enter into force as provided in article
X of the Convention. If a proposed amendment is objected
to, the Secretary of State promptly shall communicate the
objection as provided in article X(3) of the Convention.
‘‘(d) APPOINTMENT
OF ARBITRATOR.—The Secretary of State,
with the concurrence of the Secretary of the department in which
the Coast Guard is operating, shall appoint an arbitrator when
one is required to resolve a dispute within the meaning of article
XIII of the Convention.
‘‘§ 80509. Civil penalty
‘‘(a) IN GENERAL.—An owner, agent, or custodian who has been
notified of an order issued under section 80505 of this title and
fails to take reasonable and prompt action to prevent or stop a
container subject to the order from being moved in violation of
the order is liable to the United States Government for a civil
penalty of not more than $5,000 for each container moved. Each
day the container remains in service while the order is in effect
is a separate violation.
‘‘(b) ASSESSMENT AND COLLECTION.—
‘‘(1) IN GENERAL.—After notice and an opportunity for a
hearing, the Secretary of the department in which the Coast
Guard is operating shall assess and collect any penalty under
this section.
‘‘(2) FACTORS TO CONSIDER.—In determining the amount
of the penalty, the Secretary shall consider the gravity of the
violation, the hazards involved, and the record of the person
charged with respect to violations of the Convention, this
chapter, or regulations prescribed under this chapter.
‘‘(3) REMISSION, MITIGATION, OR
COMPROMISE.—The Sec-
retary may remit, mitigate, or compromise a penalty under
this section.
‘‘(4) ENFORCEMENT.—If a person fails to pay a penalty
under this section, the Secretary shall refer the matter to
the Attorney General for collection in an appropriate district
court of the United States.’’.
SEC. 12. MARITIME ADMINISTRATION.
Section 109 of title 49, United States Code, is amended to
read as follows:
‘‘§ 109. Maritime Administration
‘‘(a) ORGANIZATION.—The Maritime Administration is an
administration in the Department of Transportation.
‘‘(b) MARITIME ADMINISTRATOR.—The head of the Maritime
Administration is the Maritime Administrator, who is appointed
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by the President by and with the advice and consent of the Senate.
The Administrator shall report directly to the Secretary of Transpor-
tation and carry out the duties prescribed by the Secretary.
‘‘(c) 
DEPUTY
MARITIME
ADMINISTRATOR.—The 
Maritime
Administration shall have a Deputy Maritime Administrator, who
is appointed in the competitive service by the Secretary, after
consultation with the Administrator. The Deputy Administrator
shall carry out the duties prescribed by the Administrator. The
Deputy Administrator shall be Acting Administrator during the
absence or disability of the Administrator and, unless the Secretary
designates another individual, during a vacancy in the office of
Administrator.
‘‘(d) DUTIES AND POWERS VESTED IN SECRETARY.—All duties
and powers of the Maritime Administration are vested in the Sec-
retary.
‘‘(e) REGIONAL OFFICES.—The Maritime Administration shall
have regional offices for the Atlantic, Gulf, Great Lakes, and Pacific
port ranges, and may have other regional offices as necessary.
The Secretary shall appoint a qualified individual as Director of
each regional office. The Secretary shall carry out appropriate activi-
ties and programs of the Maritime Administration through the
regional offices.
‘‘(f) INTERAGENCY
AND INDUSTRY RELATIONS.—The Secretary
shall establish and maintain liaison with other agencies, and with
representative trade organizations throughout the United States,
concerned with the transportation of commodities by water in the
export and import foreign commerce of the United States, for the
purpose of securing preference to vessels of the United States
for the transportation of those commodities.
‘‘(g) DETAILING OFFICERS FROM ARMED FORCES.—To assist the
Secretary in carrying out duties and powers relating to the Maritime
Administration, not more than five officers of the armed forces
may be detailed to the Secretary at any one time, in addition
to details authorized by any other law. During the period of a
detail, the Secretary shall pay the officer an amount that, when
added to the officer’s pay and allowances as an officer in the
armed forces, makes the officer’s total pay and allowances equal
to the amount that would be paid to an individual performing
work the Secretary considers to be of similar importance, difficulty,
and responsibility as that performed by the officer during the detail.
‘‘(h) CONTRACTS AND AUDITS.—
‘‘(1) CONTRACTS.—In the same manner that a private cor-
poration may make a contract within the scope of its authority
under its charter, the Secretary may make contracts for the
United States Government and disburse amounts to—
‘‘(A) carry out the Secretary’s duties and powers under
this section and subtitle V of title 46; and
‘‘(B) protect, preserve, and improve collateral held by
the Secretary to secure indebtedness.
‘‘(2) AUDITS.—The financial transactions of the Secretary
under paragraph (1) shall be audited by the Comptroller Gen-
eral. The Comptroller General shall allow credit for an expendi-
ture shown to be necessary because of the nature of the business
activities authorized by this section or subtitle V of title 46.
At least once a year, the Comptroller General shall report
to Congress any departure by the Secretary from this section
or subtitle V of title 46.
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‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—Except as otherwise provided in this
subsection, there are authorized to be appropriated such
amounts as may be necessary to carry out the duties and
powers of the Secretary relating to the Maritime Administra-
tion.
‘‘(2) LIMITATIONS.—Only those amounts specifically author-
ized by law may be appropriated for the use of the Maritime
Administration for—
‘‘(A) acquisition, construction, or reconstruction of ves-
sels;
‘‘(B) construction-differential subsidies incident to the
construction, reconstruction, or reconditioning of vessels;
‘‘(C) costs of national defense features;
‘‘(D) payments of obligations incurred for operating-
differential subsidies;
‘‘(E) expenses necessary for research and development
activities, including reimbursement of the Vessel Oper-
ations Revolving Fund for losses resulting from expenses
of experimental vessel operations;
‘‘(F) the Vessel Operations Revolving Fund;
‘‘(G) National Defense Reserve Fleet expenses;
‘‘(H) expenses necessary to carry out part B of subtitle
V of title 46; and
‘‘(I) other operations and training expenses related to
the development of waterborne transportation systems, the
use of waterborne transportation systems, and general
administration.
‘‘(3) TRAINING VESSELS.—Amounts may not be appropriated
for the purchase or construction of training vessels for State
maritime academies unless the Secretary has approved a plan
for sharing training vessels between State maritime acad-
emies.’’.
SEC. 13. AMENDMENTS RELATING TO MARITIME SECURITY ACT OF
2003.
(a) AMENDMENTS TO CHAPTER 531.—Chapter 531 of title 46,
United States Code, is amended as follows:
(1) In section 53102—
(A) in the headings of paragraphs (1), (2), and (4)
of subsection (c), strike ‘‘SECTION 2’’ and substitute ‘‘SECTION
50501’’;
(B) in subsection (c)(1), (2)(A)(i) and (ii)(II) and (B),
and (4)(B), strike ‘‘section 2 of the Shipping Act, 1916
(46 U.S.C. App. 802)’’ and substitute ‘‘section 50501 of
this title’’;
(C) in subsection (d), strike ‘‘the first section of Public
Law 81–891 (64 Stat. 1120; 46 U.S.C. App. note prec.
3)’’ and substitute ‘‘section 501 of this title’’; and
(D) in subsection (e)(1)—
(i) strike ‘‘a documented vessel (as that term is
defined in section 12101 of this title)’’ and substitute
‘‘documented under chapter 121 of this title,’’; and
(ii) in subparagraph (B), strike ‘‘a documented
vessel (as defined in that section)’’ and substitute
‘‘documented under chapter 121’’.
(2) In section 53103(c)—
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(A) in the heading of paragraph (1)(C), strike ‘‘SECTION
2’’ and substitute ‘‘SECTION 50501’’;
(B) in paragraphs (1)(A)(iii) and (C)(i) and (ii), strike
‘‘section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’
and substitute ‘‘section 50501 of this title’’;
(C) in paragraph (1)(B), strike ‘‘subparagraphs’’ and
substitute ‘‘subparagraph’’; and
(D) in paragraph (3)(B), strike ‘‘agreement’’ and sub-
stitute ‘‘agreements’’.
(3) In section 53104—
(A) in subsection (c)(3)(B)(ii)(I) and (II), strike ‘‘section
2 of the Shipping Act, 1916 (46 U.S.C. App. 802)’’ and
substitute ‘‘section 50501 of this title’’;
(B) in subsection (e)(2), strike ‘‘section 9 of the Shipping
Act, 1916 (46 U.S.C. App. 808)’’ and substitute ‘‘section
56101 of this title’’; and
(C) in subsection (e)(3), strike ‘‘section 902 of the Mer-
chant Marine Act, 1936 (46 U.S.C. App. 1242)’’ and ‘‘section
902 of such Act’’ and substitute ‘‘chapter 563 of this title’’
and ‘‘chapter 563’’, respectively.
(4) In section 53105—
(A) in subsection (a)(1)(A), strike ‘‘section 12105’’ and
substitute ‘‘section 12111’’; and
(B) in subsection (f), strike ‘‘approve’’ and substitute
‘‘approves’’.
(5) In section 53106—
(A) in subsection (d)(1), strike ‘‘section 2631 of title
10, United States Code, the Act of March 26, 1934 (46
U.S.C. App. 1241–1), section 901(a), 901(b), or 901b of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(a),
1241(b), or 1241f)’’ and substitute ‘‘section 55302(a), 55304,
55305, or 55314 of this title, section 2631 of title 10’’;
(B) in subsection (d)(2), strike ‘‘section 901(a), 901(b),
or 901b of the Merchant Marine Act, 1936 (46 U.S.C.
App. 1241(a), 1241(b), or 1241f),’’ and substitute ‘‘section
55302(a), 55305, or 55314 of this title’’; and
(C) in subsection (e)(2), strike ‘‘section 2(c) of the Ship-
ping Act, 1916 (46 U.S.C. App. 802(c))’’ and substitute
‘‘section 50501 of this title, applying the 75 percent owner-
ship requirement of that section’’.
(6) In section 53107(f)—
(A) strike ‘‘section 2631 of title 10, United States Code,
the Act of March 26, 1934 (46 U.S.C. App. 1241–1), section
901(a), 901(b), or 901b of the Merchant Marine Act, 1936
(46 U.S.C. App. 1241(a), 1241(b), or 1241f)’’ and substitute
‘‘section 55302(a), 55304, 55305, or 55314 of this title,
section 2631 of title 10’’; and
(B) strike ‘‘section 2631 of title 10, United States Code,
the Act of March 26, 1934 (46 U.S.C. App. 1241–1), and
sections 901(a), 901(b), and 901b of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1241(a), 1241(b), and 1241b)’’
and substitute ‘‘sections 55302(a), 55304, 55305, and 55314
of this title and section 2631 of title 10’’.
(7) In section 53108(b), strike ‘‘section 901(b)(1) of the
Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))’’ and
substitute ‘‘section 55305(a) of this title’’.
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(b) OTHER CONFORMING PROVISIONS.—If this Act is enacted
prior to October 1, 2005, then—
(1) until that date, the reference in section 12111(c)(3)
of title 46, United States Code, as enacted by this Act, to
‘‘chapter 531 of this title’’ is deemed instead to be a reference
to ‘‘subtitle B of title VI of the Merchant Marine Act, 1936’’;
and
(2) section 3534(b)(1) of the Maritime Security Act of 2003
(Public Law 108–136, 117 Stat. 1818) is repealed.
SEC. 14. AMENDMENTS TO PARTIALLY RESTATED PROVISIONS.
(a) Section 2793 of the Revised Statutes (19 U.S.C. 288, 46
App. U.S.C. 111, 123) is amended by striking ‘‘or tonnage tax’’.
(b) Section 809(a) of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1213(a)), is amended by striking ‘‘and section 211(a)’’.
SEC. 15. ADDITIONAL AMENDMENTS TO TITLE 46.
Title 46, United States Code, is amended as follows:
(1) The analysis of subtitle II is amended as follows:
(A) In each chapter item, capitalize the first letter
of each word containing 4 or more letters.
(B) Strike the item for chapter 39.
(C) The item for chapter 45 is amended to read as
follows:
‘‘45.
Uninspected Commercial Fishing Industry Vessels ...................... 4501’’.
(2) Section 2101 is amended as follows:
(A) Paragraphs (2), (3), (3a), (6), (10), (10a), (12), (17b),
(36), (41), (44), (45), and (46) are repealed.
(B) In paragraph (8a), insert ‘‘Prevention’’ after
‘‘Abuse’’.
(C) In paragraph (18), strike ‘‘those’’.
(D) In paragraph (34)—
(i) strike ‘‘, except in part H,’’; and
(ii) strike ‘‘head’’ and substitute ‘‘Secretary’’.
(3) In section 2102(b), strike ‘‘West’’ and ‘‘East’’ and sub-
stitute ‘‘west’’ and ‘‘east’’, respectively.
(4) In section 2106, strike ‘‘a district court of the United
States’’ and substitute ‘‘the district court of the United States
for any district’’.
(5) Section 2108 is repealed.
(6) In section 2110—
(A) in subsection (a)(2), strike ‘‘part B of this title’’
and substitute ‘‘part B of this subtitle’’;
(B) in subsection (b)(2)(A)(iii), strike the period at the
end and substitute ‘‘; and’’;
(C) in subsection (b)(5), strike ‘‘fees’’ and substitute
‘‘fee’’;
(D) In subsection (f), strike ‘‘Secretary of the Treasury
shall deny the clearance required by section 4197 of the
Revised Statutes of the United States (46 App. U.S.C.
91)’’ and substitute ‘‘Secretary of Homeland Security shall
deny the clearance required by section 60105 of this title’’;
and
(E) In subsection (j), strike ‘‘state’’ and substitute
‘‘State’’.
(7) In section 2301, strike ‘‘section’’ and substitute ‘‘sections
2304 and’’.
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(8) In section 2304—
(A) insert the paragraph designation ‘‘(1)’’ after ‘‘(a)’’;
and
(B) insert at the end of subsection (a) the following
new paragraph:
‘‘(2) Paragraph (1) does not apply to a vessel of war or a
vessel owned by the United States Government appropriated only
to a public service.’’.
(9) In section 2306(a)(2), strike ‘‘section 212(A) of the Mer-
chant Marine Act, 1936 (46 App. U.S.C. 1122a),’’ and substitute
‘‘section 50113 of this title’’.
(10) In section 3205(d), strike ‘‘Secretary of the Treasury
shall withhold or revoke the clearance required by section 4197
of the Revised Statutes (46 App. U.S.C. 91)’’ and substitute
‘‘Secretary of Homeland Security shall withhold or revoke the
clearance required by section 60105 of this title’’.
(11) In section 3302—
(A) in subsection (b), insert a comma after ‘‘fishing
vessel’’;
(B) in subsection (j)(2)(B), strike ‘‘section 1304 of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1295c)’’ and
substitute ‘‘chapter 515 of this title’’; and
(C) in subsection (l)(1)(C), strike ‘‘Inc..’’ and substitute
‘‘Inc.’’.
(12) In section 3306(d), strike ‘‘section 1302(3) of the Mer-
chant Marine Act, 1936 (46 App. U.S.C. 1295a(3))’’ and sub-
stitute ‘‘section 51102 of this title’’.
(13) In section 3318(f), strike the period after ‘‘felony’’.
(14) In the analysis of chapter 37, the item for section
3719 is amended to read as follows:
‘‘3719. Reduction of oil spills from single hull non-self-propelled tank vessels.’’.
(15) In paragraphs (1)(C), (2), and (3) of section 3703a(c),
strike ‘‘documentation under section 4136 of the Revised Stat-
utes of the United States (46 App. U.S.C. 14)’’ and substitute
‘‘documentation as a wrecked vessel under section 12112 of
this title’’.
(16) In section 3704, strike ‘‘section 27 of the Merchant
Marine Act, 1920 (46 App. U.S.C. 883),’’ and substitute ‘‘chapter
551 of this title’’.
(17) In section 3718(e)(1), strike ‘‘Secretary of the Treasury’’
and ‘‘section 4197 of the Revised Statutes of the United States
(46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland
Security’’ and ‘‘section 60105 of this title’’, respectively.
(18) In section 4702, strike the subsection ‘‘(a)’’ designation.
(19) In section 4705—
(A) strike ‘‘subcontractor not’’ and substitute ‘‘subcon-
tractor are not’’;
(B) strike ‘‘(a)(1)’’ and substitute ‘‘(a)’’;
(C) strike ‘‘(2) Paragraph (1)’’ and substitute ‘‘(b) Sub-
section (a)’’;
(D) strike ‘‘(A)’’ and substitute ‘‘(1)’’; and
(E) strike ‘‘(B)’’ and substitute ‘‘(2)’’.
(20) In section 5113(b), strike ‘‘section 4197 of the Revised
Statutes (46 App. U.S.C. 91)’’ and substitute ‘‘section 60105
of this title’’.
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(21) In section 6101, redesignate the second subsection
(g) and subsection (h) as subsections (h) and (i), respectively.
(22) In section 8103(a), strike ‘‘Only’’ and substitute ‘‘Except
as otherwise provided in this title, only’’.
(23) In section 9307(b)(2)(A), strike ‘‘The’’ and substitute
‘‘the’’.
(24) In section 12503(a), in the matter before paragraph
(1), strike ‘‘delegee’’ and substitute ‘‘delegate’’.
(25) In section 13102(a), insert ‘‘(26 U.S.C. 9504)’’ after
‘‘Internal Revenue Code of 1986’’.
(26) In section 14305(a)—
(A) in paragraph (1), strike ‘‘and sections 12106(c) and
12108(c)’’ and substitute ‘‘of this subtitle and section
12116’’;
(B) in paragraph (5), strike ‘‘section 4283 of the Revised
Statutes of the United States (46 App. U.S.C. 183)’’ and
substitute ‘‘section 30506 of this title’’;
(C) in paragraph (6), strike ‘‘sections 27 and 27A of
the Act of June 5, 1920 (46 App. U.S.C. 883 and 883–
1)’’ and substitute ‘‘sections 12118 and 12132 of this title’’;
and
(D) in paragraph (7), strike ‘‘Act of July 14, 1956 (46
App. U.S.C. 883a)’’ and substitute ‘‘section 12139(b) of this
title’’.
(27) In section 31306(a), strike ‘‘section 9 or 37 of the
Shipping Act, 1916 (46 App. U.S.C. 808, 835)’’ and substitute
‘‘section 56102 or 56103 of this title’’.
(28) In section 31308, strike ‘‘title XI of the Merchant
Marine Act, 1936 (46 App. U.S.C. 1271 et seq.)’’ and substitute
‘‘chapter 537 of this title’’.
(29) In section 31322—
(A) in subsection (a)(4)(A), strike ‘‘section 12102(c)’’
and substitute ‘‘section 12113(c)’’;
(B) in subsection (a)(4)(E), strike ‘‘under section
12102(a)’’ and substitute ‘‘for purposes of documentation
under section 12103’’; and
(C) in subsection (f)(2), strike ‘‘section 12102(c)’’ and
substitute ‘‘section 12113(c)’’.
(30) In section 31325(b)(3)(B), strike ‘‘section 9 or 37 of
the Shipping Act, 1936 (46 App. U.S.C. 808, 835)’’ and sub-
stitute ‘‘section 56101 or 56102 of this title’’.
(31) In section 31326(b)—
(A) in paragraph (1), strike ‘‘title XI of the Merchant
Marine Act, 1936 (46 App. U.S.C. 1101 et seq.)’’ and sub-
stitute ‘‘chapter 537 of this title,’’; and
(B) in paragraph (2), strike ‘‘title XI of that Act’’ and
substitute ‘‘chapter 537 of this title’’.
(32) In section 31329—
(A) in subsection (a)(1), strike ‘‘section 12102’’ and sub-
stitute ‘‘section 12103’’; and
(B) in subsection (b)—
(i) in paragraph (2), strike ‘‘section 902 of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1242)’’
and substitute ‘‘chapter 563 of this title’’; and
(ii) in paragraph (3), strike ‘‘sale foreign within
the terms of the first proviso of section 27 of the
Merchant Marine Act, 1920 (46 App. U.S.C. 883)’’ and
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substitute ‘‘sale to a person not a citizen of the United
States under section 12132 of this title’’.
(33)(A) Sections 70118 and 70119, as added by section
801(a) of the Coast Guard and Maritime Transportation Act
of 2004 (Public Law 108–293, 118 Stat. 1078), are redesignated
as sections 70117 and 70118, respectively, and moved to appear
immediately after section 70116 of title 46, United States Code.
(B) Sections 70117 and 70118, as added by section 802(a)(2)
of such Act, are redesignated as sections 70120 and 70121,
respectively, and moved to appear immediately after section
70119 of title 46, United States Code.
(C) In section 70120(a) (as redesignated by subparagraph
(B)), strike ‘‘section 70120’’ and substitute ‘‘section 70119’’.
(D) In section 70121(a) (as redesignated by subparagraph
(B))—
(i) strike ‘‘section 70120’’ and substitute ‘‘section
70119’’; and
(ii) strike ‘‘section 4197 of the Revised Statutes of
the United States (46 U.S.C. App. 91)’’ and substitute ‘‘sec-
tion 60105 of this title’’.
(E) In the analysis of chapter 701, strike the items relating
to sections 70117–70119 and substitute the following:
‘‘70117.
Firearms, arrests, and seizure of property.
‘‘70118.
Enforcement by State and local officers.
‘‘70119.
Civil penalty.
‘‘70120.
In rem liability for civil penalties and certain costs.
‘‘70121.
Withholding of clearance.’’.
SEC. 16. RECREATIONAL BOATING SAFETY TECHNICAL AMENDMENTS.
(a) SECTION 2102.—Section 2102 of title 46, United States Code,
is amended by—
(1) striking subsection (a); and
(2) striking the subsection (b) designation.
(b) CHAPTER 131.—Chapter 131 of title 46, United States Code,
is amended as follows:
(1) Redesignate sections 13101 to 13106 as sections 13102
to 13107.
(2) Insert as the first section the following:
‘‘§ 13101. Definitions
‘‘In this chapter:
‘‘(1) ELIGIBLE STATE.—The term ‘eligible State’ means a
State that has a State recreational boating safety program
accepted by the Secretary.
‘‘(2) STATE RECREATIONAL BOATING SAFETY PROGRAM.—The
term ‘State recreational boating safety program’ means edu-
cation, assistance, and enforcement activities conducted for
maritime casualty prevention, reduction, and reporting for rec-
reational boating.’’.
(3) In the chapter analysis, redesignate items 13101 to
13106 as items 13102 to 13107 and insert as the first item
the following:
‘‘13101.
Definitions.’’.
(c) CROSS REFERENCES.—
(1) Section 4 of the Dingell-Johnson Sport Fish Restoration
Act (16 U.S.C. 777c) is amended by striking ‘‘13106’’ wherever
appearing and substituting ‘‘13107’’.
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(2) Section 9504(c) of the Internal Revenue Code of 1986
(26 U.S.C. 9504(c)) is amended by striking ‘‘section 13106’’
and substituting ‘‘section 13107’’.
(3) Section 13102(c) of title 46, United States Code, as
redesignated by subsection (b), is amended by striking ‘‘section
13103’’ and substituting ‘‘section 13104’’.
(4) Section 13103(c) of title 46, United States Code, as
redesignated by subsection (b), is amended by striking ‘‘section
13106’’ and substituting ‘‘section 13107’’.
(5) Section 13107(a)(1) of title 46, United States Code,
as redesignated by subsection (b), is amended by striking ‘‘sec-
tion 13103’’ and substituting ‘‘section 13104’’.
(6) Section 13108(a) of title 46, United States Code, is
amended by—
(A) striking ‘‘section 13103’’ and substituting ‘‘section
13104’’; and
(B) striking ‘‘section 13105’’ and substituting ‘‘section
13106’’.
(7) Section 31322(d)(1)(A) of title 46, United States Code,
is amended by striking ‘‘section 13106(b)(8)’’ and substituting
‘‘section 13107(b)(8)’’.
SEC. 17. CONFORMING AMENDMENTS TO OTHER LAWS.
(a) TITLE 10.—Title 10, United States Code, is amended as
follows:
(1) In section 374(b)(4)(A)(iv), strike ‘‘The Maritime Drug
Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and sub-
stitute ‘‘Chapter 705 of title 46’’.
(2) In section 2218(d)(2), strike ‘‘sections 508 and 510 of
the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 1160),
shall be deposited in the Fund’’ and substitute ‘‘sections 57101–
57104 and chapter 573 of title 46’’.
(3) In section 2350b(g)(2), strike ‘‘section 901(b) of the Mer-
chant Marine Act, 1936 (46 U.S.C. App. 1241(b))’’ and substitute
‘‘section 55305 of title 46’’.
(4) In section 2645—
(A) in subsection (c), strike ‘‘the second sentence of
section 1208(a) of the Merchant Marine Act, 1936 (46
U.S.C. App. 1288(a))’’ and substitute ‘‘section 53909(b) of
title 46’’;
(B) in subsection (h)(1), strike ‘‘title XII of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1281 et seq.),’’ and sub-
stitute ‘‘chapter 539 of title 46’’; and
(C) in subsection (h)(2), strike ‘‘the first sentence of
section 1208(a) of the Merchant Marine Act, 1936 (46
U.S.C. App. 1288(a))’’ and substitute ‘‘section 53909(a) of
title 46’’.
(5) In section 5985, strike ‘‘section 1304 of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1295c),’’ and substitute
‘‘chapter 515 of title 46’’.
(6) In section 7721(a), strike ‘‘the Act of March 3, 1925
(commonly referred to as the ‘Public Vessels Act’) (46 U.S.C.
App. 781–790)’’ and substitute ‘‘chapter 311 of title 46’’.
(b) TITLE 11.—Title 11, United States Code, is amended as
follows:
(1) In section 362(b)—
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(A) in paragraph (12), strike ‘‘section 207 or title XI
of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter
537 of title 46 or section 109(h) of title 49’’; and
(B) in paragraph (13), strike ‘‘section 207 or title XI
of the Merchant Marine Act, 1936’’ and substitute ‘‘chapter
537 of title 46’’.
(2) In section 1110(a)(3)(A)(ii), strike ‘‘documented vessel
(as defined in section 30101(1) of title 46)’’ and substitute
‘‘vessel documented under chapter 121 of title 46’’.
(c) TITLE 14.—Sections 821(b) and 823a(b) of title 14, United
States Code, are each amended by striking paragraphs (3)–(5) and
substituting the following:
‘‘(3) Section 30101 of title 46 (popularly known as the
Admiralty Extension Act).
‘‘(4) Chapter 309 of title 46 (known as the Suits in
Admiralty Act).
‘‘(5) Chapter 311 of title 46 (known as the Public Vessels
Act).’’.
(d) TITLE 18.—Title 18, United States Code, is amended as
follows:
(1) In section 229F(9)(C), strike ‘‘section 3(b) of the Mari-
time Drug Enforcement Act, as amended (46 U.S.C., App. sec.
1903(b))’’ and substitute ‘‘section 70502(b) of title 46, United
States Code’’.
(2) In section 507—
(A) in the first paragraph, strike ‘‘recording, registry,
or enrollment of any vessel, in the office of any collector
of the customs, or a license to any vessel for carrying
on the coasting trade or fisheries of the United States’’
and substitute ‘‘documentation of any vessel’’;
(B) in the first paragraph, strike ‘‘collector or other’’;
and
(C) in the second paragraph, strike ‘‘license,’’.
(3) In section 924—
(A) in subsections (c)(2), (e)(2)(A)(i), (g)(2), and (k)(1),
strike ‘‘the Maritime Drug Law Enforcement Act (46 U.S.C.
App. 1901 et seq.)’’ and substitute ‘‘chapter 705 of title
46’’; and
(B) in subsection (g)(2), strike ‘‘802 et seq.’’ and sub-
stitute ‘‘801 et seq.’’.
(4) In section 929(a)(2), strike ‘‘the Maritime Drug Law
Enforcement Act (46 U.S.C. App. 1901 et seq.)’’ and substitute
‘‘chapter 705 of title 46’’.
(5) In section 965(a), strike ‘‘section 4197 of the Revised
Statutes of the United States (46 U.S.C. App. 91)’’ and sub-
stitute ‘‘section 60105 of title 46’’.
(6) In section 2277(a), strike ‘‘registered, enrolled, or
licensed’’ and substitute ‘‘documented’’.
(7) In section 3142(e) and (f)(1)(C), strike ‘‘the Maritime
Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’
and substitute ‘‘chapter 705 of title 46’’.
(e) INTERNAL REVENUE CODE OF 1986.—The Internal Revenue
Code of 1986 (26 U.S.C. 1 et seq.) is amended as follows:
(1) In section 56(c)(2)—
(A) strike ‘‘section 607 of the Merchant Marine Act,
1936 (46 U.S.C. 1177)’’ and substitute ‘‘chapter 535 of title
46, United States Code’’; and
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(B) in subparagraphs (A) and (B), strike ‘‘such section
607’’ substitute ‘‘such chapter 535’’.
(2) In section 140(a)(4), strike ‘‘section 607(d) of the Mer-
chant Marine Act, 1936 (46 U.S.C. 1177)’’ and substitute ‘‘sec-
tion 53507 of title 46, United States Code’’.
(3) In section 543(a)(1)(B), strike ‘‘section 511 or 607 of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)’’
and substitute ‘‘chapter 533 or 535 of title 46, United States
Code’’.
(4) In section 1023(2), strike ‘‘section 511 of the Merchant
Marine Act, 1936, as amended (46 U.S.C. 1161)’’ and substitute
‘‘chapter 533 of title 46, United States Code’’.
(5) In section 1061—
(A) in paragraph (1), strike ‘‘section 510 of the Mer-
chant Marine Act, 1936, see subsection (e) of that section,
as amended August 4, 1939 (46 U.S.C. App. 1160)’’ and
substitute ‘‘chapter 573 of title 46, United States Code,
see section 57307 of title 46’’;
(B) in paragraph (2), strike ‘‘section 511 of such Act,
as amended (46 U.S.C. App. 1161)’’ and substitute ‘‘chapter
533 of title 46, United States Code’’; and
(C) strike paragraph (3).
(6) In section 7518—
(A) in subsection (a)(1), strike ‘‘section 607 of the Mer-
chant Marine Act, 1936’’ and substitute ‘‘chapter 535 of
title 46 of the United States Code’’;
(B) in subsections (a)(2) and (c)(1)(A) and (D), strike
‘‘section 607 of the Merchant Marine Act, 1936’’ and sub-
stitute ‘‘chapter 535 of title 46, United States Code’’; and
(C) in subsection (g)(3)(C)(iii), strike ‘‘Merchant Marine
Act of 1936’’ and substitute ‘‘Merchant Marine Act, 1936,’’.
(f) TITLE 28.—Title 28, United States Code, is amended as
follows:
(1) In section 994(h)(1)(B) and (2)(B), strike ‘‘the Maritime
Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.)’’
and substitute ‘‘chapter 705 of title 46’’.
(2) In section 1605(d), strike ‘‘the Ship Mortgage Act, 1920
(46 U.S.C. 911 and following)’’ and ‘‘that Act’’ and substitute
‘‘section 31301 of title 46’’ and ‘‘chapter 313 of title 46’’, respec-
tively.
(3) In section 2342(3)—
(A) in subparagraph (A), strike ‘‘section 2, 9, 37, or
41 of the Shipping Act, 1916 (46 U.S.C. App. 802, 803,
808, 835, 839, and 841a)’’ and substitute ‘‘section 50501,
50502, 56101–56104, or 57109 of title 46’’; and
(B) strike subparagraph (B) and substitute the fol-
lowing:
‘‘(B) the Federal Maritime Commission issued pursuant
to section 305, 41304, 41308, or 41309 or chapter 421
or 441 of title 46;’’.
(4) In section 2680(d), strike ‘‘sections 741–752, 781–790
of Title 46,’’ and substitute ‘‘chapter 309 or 311 of title 46’’.
(g) TITLE 40.—Title 40, United States Code, is amended as
follows:
(1) In section 548, strike ‘‘the Merchant Marine Act, 1936
(46 App. U.S.C. 1101 et seq.),’’ and substitute ‘‘part F of subtitle
V of title 46’’.
26 USC 140.
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(2) In section 3134(b), strike ‘‘the Merchant Marine Act,
1936 (46 App. U.S.C. 1101 et seq.)’’ and substitute ‘‘subtitle
V of title 46’’.
(3) In section 3313(a)—
(A) in the matter before paragraph (1), strike ‘‘Except
for the authority contained in section 3305(b) of this title,
the’’ and substitute ‘‘The’’; and
(B) in paragraph (1), strike ‘‘shall’’ and substitute
‘‘shall, except for the authority contained in section 3305(b)
of this title,’’.
(h) TITLE 49.—Title 49, United States Code, is amended as
follows:
(1) In section 5122(c)(1), strike ‘‘Secretary of the Treasury’’
and ‘‘section 4197 of the Revised Statutes of the United States
(46 App. U.S.C. 91)’’ and substitute ‘‘Secretary of Homeland
Security’’ and ‘‘section 60105 of title 46’’, respectively.
(2) In section 5901(3)(B), strike ‘‘section 3 of the Shipping
Act of 1984 (46 App. U.S.C. 1702)’’ and substitute ‘‘section
40102 of title 46’’.
(i) MISCELLANEOUS.—Section 5501(a) of the Oceans Act of 1992
(Public Law 102–587, 106 Stat. 5084) is amended by adding the
following:
‘‘(3) The exceptions provided by paragraph (2) shall apply under
section 55109 of title 46, United States Code, to the same extent
as under former section 1 of the Act of May 28, 1906, as amended
by paragraph (1).’’.
SEC. 18. TRANSITIONAL AND SAVINGS PROVISIONS.
(a) CUTOFF DATE.—This Act replaces certain provisions enacted
on or before April 30, 2005. If a law enacted after that date amends
or repeals a provision replaced by this Act, that law is deemed
to amend or repeal, as the case may be, the corresponding provision
enacted by this Act. If a law enacted after that date is otherwise
inconsistent with this Act, it supersedes this Act to the extent
of the inconsistency.
(b) ORIGINAL DATE OF ENACTMENT UNCHANGED.—For purposes
of determining whether one provision supersedes another based
on enactment later in time, the date of enactment of a provision
enacted by this Act is deemed to be the date of enactment of
the provision it replaced.
(c) REFERENCES TO PROVISIONS REPLACED.—A reference to a
provision replaced by this Act is deemed to refer to the cor-
responding provision enacted by this Act.
(d) LAWS GOVERNING APPLICABILITY OF PRIOR AMENDMENTS.—
This Act does not affect any law governing the applicability of
an amendment to a provision replaced by this Act, notwithstanding
the repeal by this Act of the provision that was amended. To
the extent that any such law governed the applicability of a provi-
sion replaced by this Act, that law governs the applicability of
the corresponding provision enacted by this Act.
(e) 
REGULATIONS, 
ORDERS, 
AND
OTHER
ADMINISTRATIVE
ACTIONS.—A regulation, order, or other administrative action in
effect under a provision replaced by this Act continues in effect
under the corresponding provision enacted by this Act.
(f) ACTIONS TAKEN
AND OFFENSES COMMITTED.—An action
taken or an offense committed under a provision replaced by this
46 USC note
prec. 101.
46 USC
app. 292 note.
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Act is deemed to have been taken or committed under the cor-
responding provision enacted by this Act.
SEC. 19. REPEALS.
The following provisions are repealed, except with respect to
rights and duties that matured, penalties that were incurred, or
proceedings that were begun before the date of enactment of this
Act:
Revised Statutes
Revised Statutes Section
United States Code
Title
Section
2792 .................................................................
46 App.
124
4136 .................................................................
46 App.
14
4173 .................................................................
46 App.
42
4184 .................................................................
46 App.
57
4188 .................................................................
46 App.
59
4197 .................................................................
46 App.
91
4202 .................................................................
46 App.
97
4204 .................................................................
46 App.
98
4206 .................................................................
46 App.
100
4219 .................................................................
46 App.
121
4220 .................................................................
46 App.
122
4221 .................................................................
46 App.
125
4225 .................................................................
46 App.
128
4226 .................................................................
46 App.
129
4227 .................................................................
46 App.
135
4228 .................................................................
46 App.
141
4238 .................................................................
46 App.
721
4239 .................................................................
46 App.
722
4240 .................................................................
46 App.
723
4241 .................................................................
46 App.
724
4281 .................................................................
46 App.
181
4282 .................................................................
46 App.
182
4283 .................................................................
46 App.
183
4283A ...............................................................
46 App.
183b
4283B ...............................................................
46 App.
183c
4284 .................................................................
46 App.
184
4285 .................................................................
46 App.
185
4286 .................................................................
46 App.
186
4287 .................................................................
46 App.
187
4289 .................................................................
46 App.
188
4309 .................................................................
46 App.
354
4310 .................................................................
46 App.
355
4311 .................................................................
46 App.
251
4320 .................................................................
46 App.
262
4336 .................................................................
46 App.
277
4370 .................................................................
46 App.
316
4373 .................................................................
46 App.
321
4374 .................................................................
46 App.
322
4375 .................................................................
46 App.
323
4376 .................................................................
46 App.
324
4378 .................................................................
46 App.
326
4379 .................................................................
46 App.
327
4380 .................................................................
46 App.
328
4493 .................................................................
46 App.
491
Statutes at Large
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
1874
Apr. 18
110
..........................................................
18
31 ................
336
1878
June 19
324
..........................................................
20
175 ..............
725
1884
June 26
121
14 .....................................................
23
57 ................
121
46 USC note
prec. 101.
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PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
18 .....................................................
23
57 ................
189
July 5
221
3 .......................................................
23
119 ..............
3
8(c) ...................................................
........
.....................
9
1886
June 19
421
8 .......................................................
24
81 ................
289
9 .......................................................
24
81 ................
320
17 .....................................................
24
82 ................
142
1887
Mar. 3
339
..........................................................
24
475 ..............
143
1892
July 26
248
1 .......................................................
27
267 ..............
144
2 .......................................................
27
268 ..............
145
1893
Feb. 13
105
1 .......................................................
27
445 ..............
190
2 .......................................................
27
445 ..............
191
3 .......................................................
27
445 ..............
192
4 .......................................................
27
445 ..............
193
5 .......................................................
27
446 ..............
194
6 .......................................................
27
446 ..............
196
7 .......................................................
27
446 ..............
195
8 .......................................................
27
446 ..............
190 nt
Oct. 31
No. 13
..........................................................
28
13 ................
726
1898
Feb. 17
26
1 .......................................................
30
248 ..............
290
3 .......................................................
30
248 ..............
291
1900
Mar. 31
120
1–3 ...................................................
31
58 ................
163
1906
May 28
2566
1 (except as may be applicable
under section 5501(a)(2) of Pub.
L. 102–587).
34
204 ..............
292
1908
Mar. 24
96
1 .......................................................
35
46 ................
133
2 .......................................................
35
46 ................
134
May 28
212
5 .......................................................
35
425 ..............
104
1909
Aug. 5
6
36 .....................................................
36
111 ..............
121
1910
Mar. 8
86
..........................................................
36
234 ..............
132
1912
Aug. 1
268
1 .......................................................
37
242 ..............
727
3 .......................................................
37
242 ..............
729
4 .......................................................
37
242 ..............
730
5 .......................................................
37
242 ..............
731
1913
Oct. 3
16
IV(J)(1)–(3) ......................................
38
195 ..............
19 U.S.C.
128, 130,
131;
46 App. 146
1915
Mar. 4
153
20 .....................................................
38
1185 ............
688
171
..........................................................
38
1193 ............
19 U.S.C.
128, 131;
46 App. 121,
128, 146
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PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
1916
Sept. 7
451
1 .......................................................
39
728 ..............
801
2(a)–(c) .............................................
39
729 ..............
802
2(d) ...................................................
39
729 ..............
803
9 .......................................................
39
730 ..............
808
12 .....................................................
39
732 ..............
811
34 .....................................................
39
738 ..............
833
36 .....................................................
39
738 ..............
834
37 .....................................................
........
.....................
835
38 .....................................................
........
.....................
836
39 .....................................................
........
.....................
837
41 .....................................................
........
.....................
839
46 .....................................................
........
.....................
842
1920
Mar. 9
95
1 .......................................................
41
525 ..............
741
2 .......................................................
41
525 ..............
742
3 .......................................................
41
526 ..............
743
4 .......................................................
41
526 ..............
744
5 .......................................................
41
526 ..............
745, 745 nt
6 .......................................................
41
527 ..............
746
7 .......................................................
41
527 ..............
747
8 .......................................................
41
527 ..............
748
9 .......................................................
41
527 ..............
749
10 .....................................................
41
528 ..............
750
11 .....................................................
41
528 ..............
751
12 .....................................................
41
528 ..............
752
Mar. 30
111
1 .......................................................
41
537 ..............
761
2 .......................................................
41
537 ..............
762
4 .......................................................
41
537 ..............
764
5 .......................................................
41
537 ..............
765
6 .......................................................
41
537 ..............
766
7 .......................................................
41
538 ..............
767
8 .......................................................
41
538 ..............
768
June 5
250
1 .......................................................
41
988 ..............
861
6 .......................................................
41
991 ..............
865
7 .......................................................
41
991 ..............
866
8 .......................................................
41
992 ..............
867
9 .......................................................
41
992 ..............
868
10 .....................................................
41
992 ..............
869
12 .....................................................
41
993 ..............
871
13 .....................................................
41
993 ..............
872
17 .....................................................
41
994 ..............
875
19 .....................................................
41
995 ..............
876
21 .....................................................
41
997 ..............
877
27 .....................................................
41
999 ..............
883
27A ...................................................
........
.....................
883–1
28 .....................................................
41
999 ..............
884
36 .....................................................
41
1007 ............
887
37 .....................................................
41
1008 ............
888
39 .....................................................
41
1008 ............
889
1925
Mar. 3
428
1 .......................................................
43
1112 ............
781
2 .......................................................
43
1112 ............
782
3 .......................................................
43
1112 ............
783
4 .......................................................
43
1112 ............
784
5 .......................................................
43
1113 ............
785
6 .......................................................
43
1113 ............
786
7 .......................................................
43
1113 ............
787
8 .......................................................
43
1113 ............
788
9 .......................................................
43
1113 ............
789
10 .....................................................
43
1113 ............
790
1928
May 22
675
1 .......................................................
45
689 ..............
891
202 ...................................................
45
690 ..............
891b
203 ...................................................
45
690 ..............
891c
703 ...................................................
45
698 ..............
891u
704 ...................................................
45
698 ..............
891v
705 ...................................................
45
698 ..............
891w
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PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
706 ...................................................
45
698 ..............
891x
1932
June 30
314
306 ...................................................
47
408 ..............
804a
315
..........................................................
47
420 ..............
743a, 745
1934
Mar. 26
90
..........................................................
48
500 ..............
1241–1
June 14
523
..........................................................
48
963 ..............
48 U.S.C.
1664
1936
June 25
807
1 .......................................................
49
1922 ............
738
2 .......................................................
49
1922 ............
738a
4 .......................................................
49
1923 ............
738c
June 29
858
101 ...................................................
49
1985 ............
1101
201 ...................................................
49
1985 ............
1111
202 ...................................................
49
1986 ............
1112
204 ...................................................
49
1987 ............
1114
205 ...................................................
49
1987 ............
1115
206 ...................................................
49
1987 ............
1116
207 ...................................................
49
1988 ............
1117
208 ...................................................
49
1988 ............
1118
209 ...................................................
49
1988 ............
1119
210 ...................................................
49
1989 ............
1120
211 ...................................................
49
1989 ............
1121
212 ...................................................
49
1990 ............
1122
212(A) ..............................................
........
.....................
1122a
212(B) ..............................................
........
.....................
1122b
213 ...................................................
49
1991 ............
1123
214 ...................................................
49
1991 ............
1124
215 ...................................................
........
.....................
1125
302 ...................................................
........
.....................
1132
508 ...................................................
49
2000 ............
1158
510 ...................................................
........
.....................
1160
511 (added by Act Oct. 10, 1940) ..
........
.....................
1161
607 ...................................................
49
2005 ............
1177
701 ...................................................
49
2008 ............
1191
702 ...................................................
49
2008 ............
1192
703 ...................................................
49
2008 ............
1193
704 ...................................................
49
2008 ............
1194
705 ...................................................
49
2009 ............
1195
706 ...................................................
49
2009 ............
1196
707 ...................................................
49
2009 ............
1197
708 ...................................................
49
2009 ............
1198
709 ...................................................
49
2010 ............
1199
710 ...................................................
49
2010 ............
1200
711 ...................................................
49
2010 ............
1201
712 ...................................................
49
2010 ............
1202
713 ...................................................
49
2010 ............
1203
714 ...................................................
49
2011 ............
1204
715 ...................................................
........
.....................
1205
805 ...................................................
49
2012 ............
1223
806(b)–(d) ........................................
49
2014 ............
1228
808 ...................................................
49
2015 ............
1226
809(b) ...............................................
........
.....................
1213
810 ...................................................
49
2015 ............
1227
901 ...................................................
49
2015 ............
1241
901a .................................................
........
.....................
1241e
901b .................................................
........
.....................
1241f
901c ..................................................
........
.....................
1241g
901d .................................................
........
.....................
1241h
901e .................................................
........
.....................
1241i
901f ..................................................
........
.....................
1241j
901g .................................................
........
.....................
1241k
901h .................................................
........
.....................
1241l
901i ..................................................
........
.....................
1241m
901j ..................................................
........
.....................
1241n
901k .................................................
........
.....................
1241o
902 ...................................................
49
2015 ............
1242
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PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
905 ...................................................
49
2016 ............
1244
906 (1st sentence) ...........................
49
2016 ............
1245
908 ...................................................
........
.....................
1247
1101 .................................................
........
.....................
1271
1102 .................................................
........
.....................
1272
1103 .................................................
........
.....................
1273
1104A ...............................................
........
.....................
1274
1104B ...............................................
........
.....................
1274a
1105 .................................................
........
.....................
1275
1108 .................................................
........
.....................
1279a
1109 .................................................
........
.....................
1279b
1110 .................................................
........
.....................
1279c
1111 .................................................
........
.....................
1279d
1111 .................................................
........
.....................
1279f
1112 .................................................
........
.....................
1279e
1112 .................................................
........
.....................
1279g
1201 .................................................
........
.....................
1281
1202 .................................................
........
.....................
1282
1203 .................................................
........
.....................
1283
1204 .................................................
........
.....................
1284
1205 .................................................
........
.....................
1285
1206 .................................................
........
.....................
1286
1207 .................................................
........
.....................
1287
1208 .................................................
........
.....................
1288
1209 .................................................
........
.....................
1289
1210 .................................................
........
.....................
1290
1211 .................................................
........
.....................
1291
1212 .................................................
........
.....................
1292
1213 .................................................
........
.....................
1293
1214 .................................................
........
.....................
1294
1301 .................................................
........
.....................
1295
1302 .................................................
........
.....................
1295a
1303 .................................................
........
.....................
1295b
1304 .................................................
........
.....................
1295c
1305 .................................................
........
.....................
1295d
1306 .................................................
........
.....................
1295e
1307 .................................................
........
.....................
1295f
1308 .................................................
........
.....................
1295g
1938
Apr. 26
174
..........................................................
52
223 ..............
289a
June 25
681
1st proviso on p. 1119 ....................
52
1119 ............
1111a
1940
June 29
442
..........................................................
54
684 ..............
1242a
1941
Feb. 6
5
4 .......................................................
55
6 ..................
1125a
1947
Mar. 22
20
proviso 
under 
heading 
‘‘Inde-
pendent Offices’’.
61
18 ................
1116a
1948
June 19
526
..........................................................
62
496 ..............
740
June 30
775
101 (last proviso on p. 1199) ..........
62
1199 ............
864a
1949
June 29
281
1 (proviso) ........................................
63
349 ..............
864b
1950
Dec. 27
1155
1, 2 ...................................................
64
1120 ............
3 nt prec.
1951
June 2
121
pars. under heading ‘‘Vessel Oper-
ations Revolving Fund’’.
65
59 ................
1241a
Nov. 1
664
par. under heading ‘‘War-Risk In-
surance Revolving Fund’’.
65
746 ..............
1288a
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PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
1956
June 20
415
101 (par. beginning with ‘‘Vessel
operations revolving fund’’).
70
319 ..............
1241b,
1241b nt
July 14
600
2 .......................................................
70
544 ..............
883a
3 .......................................................
70
544 ..............
883b
Aug. 1
846
..........................................................
70
897 ..............
1241c
1957
June 13
85–52
101 (1st proviso on p. 73) ...............
71
73 ................
1177a
1958
June 25
85–469
101 (par. under heading ‘‘Federal
Ship 
Mortgage 
Insurance
Fund’’).
72
231 ..............
1280
1960
June 12
86–518
9 .......................................................
74
217 ..............
1125 nt
1961
June 30
87–77
..........................................................
75
196 ..............
289b
Sept. 13
87–220
2 .......................................................
75
493 ..............
251a
3 .......................................................
75
493 ..............
251b
1965
June 30
89–56
..........................................................
79
195 ..............
1111 nt
July 30
89–99
1 .......................................................
79
424 ..............
441
3 .......................................................
79
424 ..............
443
4 .......................................................
79
424 ..............
444
1966
Nov. 6
89–777
2 .......................................................
80
1356 ............
817d
3 .......................................................
80
1357 ............
817e
1976
July 14
94–361
603 ...................................................
90
929 ..............
1126–1
Oct. 4
94–455
807 ...................................................
90
1606 ............
1177–1
1977
Dec. 13
95–208
1 .......................................................
91
1475 ............
1501 nt
2 .......................................................
91
1475 ............
1501
3 .......................................................
91
1476 ............
1502
4 .......................................................
91
1476 ............
1503
5 .......................................................
91
1477 ............
1504
6 .......................................................
91
1478 ............
1505
7 .......................................................
91
1479 ............
1506
8 .......................................................
91
1479 ............
1507
1980
Sept. 15
96–350
1 .......................................................
94
1159 ............
1901
2 .......................................................
94
1160 ............
1902
3 .......................................................
94
1160 ............
1903
4 .......................................................
94
1160 ............
1904
Oct. 6
96–382
1 .......................................................
94
1525 ............
763a
Oct. 7
96–387
5 .......................................................
94
1546 ............
1121–1
1981
Aug. 6
97–31
2 .......................................................
95
151 ..............
1601
3 .......................................................
95
151 ..............
1602
4 .......................................................
95
151 ..............
1603
5 .......................................................
95
151 ..............
1604
6 .......................................................
95
151 ..............
1605
8 .......................................................
95
152 ..............
1607
9 .......................................................
95
152 ..............
1608
1982
Oct. 15
97–322
201 ...................................................
96
1588 ............
446 nt
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Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
204 ...................................................
96
1589 ............
446
205 ...................................................
96
1589 ............
446a
206 ...................................................
96
1590 ............
446b
207 ...................................................
96
1590 ............
446c
1984
Mar. 20
98–237
1 .......................................................
98
67 ................
1701 nt
2 .......................................................
98
67 ................
1701
3 .......................................................
98
67 ................
1702
4 .......................................................
98
70 ................
1703
5 .......................................................
98
70 ................
1704
6 .......................................................
98
72 ................
1705
7 .......................................................
98
73 ................
1706
8 .......................................................
98
74 ................
1707
9 .......................................................
98
76 ................
1708
10 .....................................................
98
77 ................
1709
11 .....................................................
98
80 ................
1710
12 .....................................................
98
81 ................
1711
13 .....................................................
98
82 ................
1712
14 .....................................................
98
83 ................
1713
15 .....................................................
98
84 ................
1714
16 .....................................................
98
84 ................
1715
17 .....................................................
98
84 ................
1716
19 .....................................................
98
87 ................
1718
20(e) .................................................
98
90 ................
1719
Oct. 5
98–454
302 ...................................................
98
1734 ............
808a
Oct. 30
98–563
..........................................................
98
2916 ............
289c
1985
Dec. 23
99–198
1141 .................................................
99
1490 ............
1241d
1143 .................................................
99
1496 ............
1241p
1986
Aug. 27
99–399
902 ...................................................
100
889 ..............
1801
905 ...................................................
100
890 ..............
1802
907 ...................................................
100
891 ..............
1803
908 ...................................................
100
891 ..............
1804
909 ...................................................
100
892 ..............
1805
910 ...................................................
100
892 ..............
1806
911 ...................................................
100
892 ..............
1807
912 ...................................................
100
892 ..............
1808
913 ...................................................
100
892 ..............
1809
1987
Dec. 22
100–202
101(a) [title V (par. under heading
‘‘Ocean Freight Differential’’)].
101
1329, ...........
1329–27 ......
1241h nt
101(a) [title V (4th proviso on p.
1329-28)].
101
1329, ...........
1329–28 ......
1295c–1
1988
May 30
100–324
1 .......................................................
102
576 ..............
2001 nt
2 .......................................................
102
576 ..............
2001
3 .......................................................
102
576 ..............
2002
4 .......................................................
102
576 ..............
2003
5 .......................................................
102
576 ..............
2004
6 .......................................................
102
577 ..............
2005
7 .......................................................
102
577 ..............
2006
8 .......................................................
102
577 ..............
2007
Aug. 23
100–418
10002 ...............................................
102
1570 ............
1710a
1989
Oct. 13
101–115
4 .......................................................
103
692 ..............
1295c nt
8 .......................................................
103
694 ..............
1121–2
1990
Nov. 28
101–624
1521 .................................................
104
3665 ............
1241q
1522 .................................................
104
3665 ............
1241r
1523 .................................................
104
3666 ............
1241s
1524 .................................................
104
3667 ............
1241t
1526 .................................................
104
3668 ............
1241u
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120 STAT. 1717
PUBLIC LAW 109–304—OCT. 6, 2006
Statutes at Large—Continued
Date
Chapter or
Public Law
Section
Statutes at Large
U.S. Code
(46 App. un-
less other-
wise speci-
fied)
Vol-
ume
Page
1527 .................................................
104
3668 ............
1241v
1993
Nov. 30
103–160
1358 .................................................
107
1816 ............
1280a
1996
Oct. 19
104–324
1117 .................................................
110
3973 ............
46 U.S.C.
12101 nt
1120(f) ..............................................
110
3978 ............
883 nt
1998
Oct. 14
105–258
401 ...................................................
112
1916 ............
1273a
Oct. 21
105–277
203(b)–(e) .........................................
112
2681–619 ....
46 U.S.C.
12102 nt
Nov. 13
105–383
502–504 ...........................................
112
3445 ............
46 U.S.C.
12106 nt
2000
Oct. 30
106–398
1 [§ 3506] .........................................
114
1654, ...........
1654A–494
1118 nt
2002
Nov. 25
107–295
403 ...................................................
116
2114 ............
46 U.S.C.
12119 nt
404 ...................................................
116
2114 ............
316a
2003
Nov. 24
108–136
3527 .................................................
117
1802 ............
1280b
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120 STAT. 1718
PUBLIC LAW 109–304—OCT. 6, 2006
LEGISLATIVE HISTORY—H.R. 1442:
HOUSE REPORTS: No. 109–170 (Comm. on the Judiciary).
CONGRESSIONAL RECORD:
Vol. 151 (2005): Nov. 16, considered and passed House.
Vol. 152 (2006): Sept. 13, considered and passed Senate.
Reorganization Plans
Year
Plan No.
Section
Statutes at Large
Volume
Page
1949
6 ..............
.......................................................................
63
1069
1950
21 ............
201, 203, 204 ...............................................
64
1276
1961
7 ..............
101–105, 201, 301, 302 ...............................
75
840, 842
Approved October 6, 2006.
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