[DOCID: f:sr200.110]
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110th Congress
1st Session SENATE Report
110-200
_______________________________________________________________________
Calendar No. 432
MARITIME ADMINISTRATION AUTHORITIES ACT OF 2007
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1778
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
October 19, 2007.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred tenth congress
first session
DANIEL K. INOUYE, Hawaii, Chairman
TED STEVENS, Alaska, Vice-Chairman
JOHN D. ROCKEFELLER IV, West JOHN McCAIN, Arizona
Virginia TRENT LOTT, Mississippi
JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California GORDON H. SMITH, Oregon
BILL NELSON, Florida JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey JIM DEMINT, South Carolina
MARK PRYOR, Arkansas DAVID VITTER, Louisiana
THOMAS CARPER, Delaware JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota
Margaret Cummisky, Staff Director and Chief Counsel
Lila Helms, Deputy Staff Director and Policy Director
Jean Toal Eisen, Senior Advisor and Deputy Policy Director
Christine Kurth, Republican Staff Director and General Counsel
Paul J. Nagle, Republican Chief Counsel
Calendar No. 432
110th Congress Report
SENATE
1st Session 110-200
======================================================================
MARITIME ADMINISTRATION AUTHORITIES ACT OF 2007
_______
October 19, 2007.--Ordered to be printed
_______
Mr. Inouye, from the Committee on Commerce, Science, and
Transportation, submitted the following
REPORT
[To accompany S. 1778]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1778) to authorize certain
activities of the Maritime Administration, and for other
purposes, having considered the same, reports favorably thereon
with amendments and recommends that the bill (as amended) do
pass.
Purpose of the Bill
The bill would clarify the authority of the MARAD to charter
commercial vessels to other Federal agencies; authorize the
MARAD to operate or lease its own vessels directly while
retaining reimbursement for their use; and permit the
chartering of National Defense Reserve Fleet (NDRF) vessels to
state or local governments. It also would require the MARAD to
dispose of all ships designated as ``high priority'' under the
agency's obsolete vessel disposal program within one year of
their designation. ``High priority'' vessels are those that
pose the most significant danger to the environment or have the
highest cost to maintain. The bill would allow the MARAD to
extend the period of time between which Ready Reserve Force
(RRF) vessels must be activated and undergo sea trials from 24
months to 30 months in order to align sea trial requirements
with the Coast Guard requirements for dry-docking. In addition,
the bill would include several technical corrections requested
by the House Law Revision Counsel and the Administration.
Background and Needs
The mission of the MARAD is to promote the development and
maintenance of an adequate, well-balanced U.S. merchant marine,
capable of serving as a naval and military auxiliary in time of
war or national emergency, and sufficient to carry the Nation's
waterborne domestic commerce and a substantial portion of its
waterborne foreign commerce. The MARAD also seeks to ensure
that the United States enjoys adequate shipbuilding and repair
service, efficient ports, effective intermodal water and land
transportation systems, and adequate reserve shipping capacity
in times of national emergency.
To meet its mission, the MARAD administers various U.S.
merchant marine support programs within the Department of
Transportation (DOT). These programs include the Maritime
Security Program (MSP), the Title XI Maritime Loan Guarantee
Program, the Small Shipyard and Maritime Community Assistance
Program, the Deepwater Port Licensing Program, various cargo
preference programs, maintenance of the RRF and the NDRF, and
operation of the United States Merchant Marine Academy (USMMA)
at Kings Point, New York. The MARAD has approximately 754
employees, including RRF and USMMA staff.
The MARAD's operations and training account funds the
administration and staffing of the MARAD programs (other than
the Title XI guaranteed loan program and RRF costs), the USMMA,
State maritime school costs associated with Federal training
ships, training courses for merchant mariners, various
operating programs, and research and development. The MARAD
appropriations do not include funding for cargo preference or
RRF/NDRF maintenance funding. RRF/NDRF maintenance is funded by
the Department of Defense (DOD) and administered by the MARAD.
The MSP provides funded operating agreements to privately
owned, U.S.-flagged, and U.S.-crewed vessels operating in
international trade. This fleet is also available to support
the DOD sustainment in a contingency. Currently, MSP is
authorized through fiscal year 2015 and subject to a separate
annual appropriation.
The purpose of the Title XI Maritime Loan Guarantee Program
is to promote the growth and modernization of the U.S. merchant
marine and U.S. shipyards. The program enables owners of
eligible vessels and eligible shipyards to obtain long-term
financing with attractive terms by using the credit of the
United States Government to guarantee commercial loans.
Summary of Provisions
Several provisions of this bill would give the MARAD
additional vessel chartering authority, including the ability
to charter commercial vessels to other Federal agencies and
State and local governments while obtaining reimbursement for
their use.
The bill would establish a priority system for the disposal
of obsolete government vessels in the agency's Ship Disposal
Program. Vessels that pose a significant risk to the
environment or have high maintenance costs are to be designated
as ``high priority'' and would be required to be disposed of
within one year.
The bill extends from 24 months to 30 months the period of
time during which RRF vessels must be activated and undergo sea
trials. This change allows the MARAD to align the sea trial
requirement with the United States Coast Guard's (USCG)
requirement for vessels to be dry-docked twice every five
years. Aligning this requirement would alleviate the need for
the MARAD to conduct sea trials out of sequence.
The bill would include several technical corrections, which
update the newly codified title 46, United States Code, to
reflect amendments made in P.L. 109-304 and P.L. 109-364.
Additionally, the bill also includes an Administration-
requested technical correction to Section 3509 of the FY 2007
Department of Defense Authorization bill, the Large Passenger
Ship Crew Requirements provision.
Legislative History
The bill was introduced on July 12, 2007. On July 19, 2007,
the Committee considered this bill in an executive session and
ordered S. 1778 to be reported favorably, as amended, by voice
vote. The Committee accepted an amendment offered by Senator
Snowe, which limited the MARAD's vessel chartering authority
under Section 103 to vessels that are U.S.-flagged, and an
amendment offered by Senator Vitter, which requires the
Administrator to develop a comprehensive review process for
traditional and non-traditional applications submitted for the
vessel loan guarantee program and requires the review of a
traditional application not exceed 90 days from the date the
application is submitted.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
August 24, 2007.
Hon. Daniel K. Inouye,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1778, the Maritime
Administration Authorities Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Deborah Reis.
Sincerely,
Peter R. Orszag,
Director.
Enclosure.
S. 1778--Maritime Administration Authorities Act of 2007
Summary: S. 1778 would amend various laws governing the
activities of the Maritime Administration (MARAD) and would
authorize appropriations for the agency for fiscal year 2008.
CBO estimates that appropriation of the amounts authorized by
the legislation for MARAD operations and for the disposal of
obsolete vessels would result in outlays of $112 million in
2008 and $141 million over the 2008-2012 period. Enacting S.
1778 would have no effect on revenues or direct spending.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no cost on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1778 is shown in the following table.
The costs of this legislation fall within budget function 400
(transportation).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending for MARAD Operations and Ship Disposal
Under Current Law:
Budget Authority\1\............................. 132 0 0 0 0 0
Estimated Outlays............................... 129 30 14 0 0 0
Proposed Changes:\2\
Authorization Level............................. 0 141 0 0 0 0
Estimated Outlays............................... 0 112 18 11 0 0
Spending for MARAD Operations and Ship Disposal
Under S. 1778:
Authorization Level\1\.......................... 132 141 0 0 0 0
Estimated Outlays............................... 129 142 32 11 0 0
----------------------------------------------------------------------------------------------------------------
\1\The 2007 level is the amount appropriated for that year.
\2\The authorization levels do not include $62.5 million specifically authorized by the bill for grants to small
shipyards and maritime communities, reimbursements to ship operators for vessel repair and maintenance costs
incurred at domestic shipyards, or the subsidy and administrative costs of maritime loan guarantees because
all of those programs are authorized for 2008 by existing statutes.
Basis of estimate: S. 1778 would authorize the
appropriation of $123 million for MARAD operations and $18
million for the agency's program to dispose of obsolete vessels
in the National Defense Reserve Fleet. The bill also would
authorize $20 million for grants to small shipyards and
maritime communities, $19.5 million for reimbursements to
vessel owners for repairs made in U.S. shipyards, $20 million
for the cost of making maritime loan guarantees, and $3 million
for related administrative costs.
The authorization level shown in the above table includes
the amounts specified by the bill for MARAD operations and ship
disposal. Amounts specified for other programs have been
excluded because those programs are already authorized for
fiscal year 2008 under current law. We estimate that
appropriation of the amounts authorized for operations and ship
disposal would increase outlays by $112 million in 2008 and by
$141 million over the 2008-2012 period. Estimated outlays are
based on historical spending patterns for MARAD activities.
Intergovernmental and private-sector impact: The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no cost on state, local, or
tribal governments.
Estimate prepared by: Federal costs: Deborah Reis; Impact
on state, local, and tribal governments: Elizabeth Cove; Impact
on the private sector: Jacob Kuipers.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
NUMBER OF PERSONS COVERED
This program would not affect the number of people subject to
regulation.
ECONOMIC IMPACT
The bill would not have any additional economic impact on the
Federal government or private sector.
PRIVACY
This program would not impact privacy issues.
PAPERWORK
This program would not create new mandatory paperwork or
reporting requirements.
Section-by-Section Analysis
Section 1. Short Title.
Section 101 would state the short title, the ``Maritime
Administration Authorities Act of 2007.''
Title I--Maritime Administration
Section 101. Authorization of Appropriations.
Section 101 would authorize appropriations for fiscal year
2008 as follows: $122,890,545 for operations and training
expenses; $19,500,000 for paying reimbursement under section
3517 of the Maritime Security Act of 2003; $20,000,000 for
assistance to small shipyards; $18,000,000 for ship disposal;
$20,000,000 for the Title XI loan guarantee program; and
$3,408,000 for implementation costs in connection with several
of the programs.
Section 102. Commercial Vessel Chartering Authority.
Section 102 would clarify the MARAD's ability to charter only
U.S.-flag commercial vessels to other Federal agencies. This
provision would allow the Secretary of Transportation to
acquire or otherwise obtain the use of private vessel assets
and other related property whenever the Secretary deems such
charter to be appropriate.
Section 103. Maritime Administration Vessel Chartering Authority.
Section 103 would authorize the MARAD to operate or lease its
own vessels directly and to obtain reimbursement for the use of
its vessels. This section would add ``vessels'' to the list of
property that may be leased or operated by the Secretary under
section 50303 of title 46, United States Code.
Section 104. Chartering to State and Local Governmental
Instrumentalities.
Section 104 would amend the MARAD's authority to charter
vessels to States, local governments, or U.S. territories. This
would allow the MARAD to respond more immediately to requests
for assistance when deployment is critical for response and
recovery activities.
Section 105. Disposal of Obsolete Government Vessels.
Section 105 would clarify that ship disposal transactions
include both sales and contracts for services. This section
would require the disposal of all deteriorated high priority
ships within one year of their designation. Higher priority
would be given to vessels that pose the most significant
environmental danger or have high maintenance costs.
Section 106. Vessel Transfer Authority.
Section 3504 of the National Defense Authorization Act of
2007, Public Law 109-364, authorized the Secretary ``to
transfer or otherwise make available without reimbursement to
any other department a vessel under the jurisdiction of the
DOT, upon request by the Secretary of the department that
receives the vessel.'' However, there continues to be a
conflict between Section 3504 (49 U.S.C. 301 note) and Section
11(b) of the Merchant Ships Sales Act of 1946 (50 App. U.S.C.
1744(b)), which bars Federal agencies outside of the DOD from
most uses of NDRF vessels. Section 106 would resolve one aspect
of this conflict by allowing NDRF vessels to be available to
other Federal agencies on request to the Secretary of
Transportation with prior consent of the Secretary of Defense.
Section 107. Sea Trials for Ready Reserve Force Vessels.
Section 107 would extend from 24 months to 30 months the
period of time between which RRF vessels must be activated and
undergo sea trials. This change would align the MARAD's
requirement for sea trials with USCG regulations, which require
that vessels must be dry-docked twice in five years. This
change would alleviate the need to conduct out of sequence sea
trials and eliminate unwarranted expenses to the RRF program.
Section 108. Review of Applications for Loans and Guarantees.
This section would require the Administrator to develop a
comprehensive review process for traditional and non-
traditional applications to the vessel loan guarantee program.
The application review process for traditional or routine cases
would be required not to exceed 90 days from the date the
complete application is submitted to the MARAD to the date the
Administrator either approves or denies the application.
Title II--Technical Corrections
Section 201. Statutory Construction.
Section 201 would clarify that the amendments made by title
II of this bill make no substantive change to existing law.
Various provisions of maritime law were codified as part of
title 46, United States Code, by Public Law 109-304, enacted
October 6, 2006. Section 18(a) of that law provided that it was
codifying existing law as in effect on April 30, 2005, and that
any amendments to such law enacted after that date should be
given effect even though not reflected in the text of the newly
codified provisions. This title would update the newly codified
provisions to reflect those amendments. It also would amend
certain of those provisions based on public comments to the
codification bill that were submitted too late to be reflected
in that bill and would make technical corrections to Public Law
109-304 and Public Law 109-364.
Section 202. Personal Injury to or Death of Seamen.
Section 202 would modify the language of section 30104 of
title 46, United States Code, which codified section 20(a) of
the Act of March 4, 1915, as amended by section 33 of the Act
of June 5, 1920 (formerly 46 App. U.S.C. 688(a)) to ensure the
same meaning as former section 20(a), as interpreted by the
courts. The amendment would be made retroactive to the date of
the codification by Public Law 109-304 to ensure that no
inadvertent substantive change was made, temporarily or
otherwise, by that codification.
Section 203. Amendments to Chapter 537 Based on Public Law 109-163.
Section 203 would update chapter 537 of Title 46, United
States Code, relating to ship mortgage loans and guarantees, to
reflect the amendments made by section 3507 of the National
Defense Authorization Act for Fiscal Year 2006 (Public Law 109-
163).
Section 204. Additional Amendments Based on Public Law 109-163.
Section 204 would update various provisions codified in Title
46, United States Code, to reflect the amendments made by
sections 515(g)(2), 3502, 3509, and 3510 of the National
Defense Authorization Act for Fiscal Year 2006 (Public Law 109-
163). It also would add a new section 54101 to title 46, United
States Code, based on section 3506 of that Act.
Section 205. Amendments Based on Public Law 109-171.
Section 205 would update section 60301 of title 46, United
States Code, to reflect the amendments made by section 4001 of
the Deficit Reduction Act of 2005 (Public Law 109-171).
Section 206. Amendments Based on Public Law 109-241.
Section 206 would update various provisions codified in title
46, United States Code, to reflect the amendments made by
sections 303, 307, 308, 310, 901(q), and 902(o) of the Coast
Guard and Maritime Transportation Act of 2006 (Public Law 109-
241).
Section 207. Amendments Based on Public Law 109-364.
Section 207 would update cross references in section
1017(b)(2) of the John Warner National Defense Authorization
Act for Fiscal Year 2007 (Public Law 109-364, 10 U.S.C. 2631
note) to reflect the codification in title 46, United States
Code, of the provisions referenced.
Additionally, this section would update various provisions
codified in title 46, United States Code, to reflect the
amendments made by sections 3505, 3506, 3508, and 3510(a) and
(b) of that Act.
Section 208. Miscellaneous Amendments.
Section 208 would delete the reference to Canton Island in
section 55101(b) of title 46, United States Code, because
Canton Island is no longer a territory or possession of the
United States. It also would amend section 55110 to improve the
heading, and in section 80102, would substitute the words
``salvage'' and ``salvaging'' for ``wreckers'' and
``wrecking''.
Section 209. Application of Sunset Provision to Codified Provision.
This section would ensure that the tax rate in section
53511(f)(2) of title 46, United States Code, is the same as it
would have been under former section 607(h)(6)(A) of the
Merchant Marine Act, 1936. This section would not amend section
53511(f)(2) of title 46, United States Code, directly, in case
of any further amendment to the sunset provision in section 303
of Public Law 108-27.
Section 210. Technical Corrections.
This section would make technical corrections to Public Law
109-304 and to provisions enacted or amended by that law.
Additionally, it would make a technical change to section 8103
(k)(3)(C)(iv) of title 46, United States Code, to clarify
``section'' to mean section 252 of the Immigration and
Nationality Act.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
NATIONAL MARITIME HERITAGE ACT OF 1994
SEC. 6. FUNDING.
[16 U.S.C. 5405]
(a) Availability of funds from sale and scrapping of obsolete
vessels.--
(1) In general.--Notwithstanding any other provision
of law, the amount of funds credited in a fiscal year
to the Vessel Operations Revolving Fund established by
the Act of June 2, 1951 (46 App. U.S.C. 1241a), that is
attributable to the sale of obsolete vessels in the
National Defense Reserve Fleet that are scrapped or
sold under section 508 or 510(i) of the Merchant Marine
Act, 1936 (46 App. U.S.C. 1158 or 1160(i)) shall be
available until expended as follows:
(A) 50 percent shall be available to the
Administrator of the Maritime Administration
for such acquisition, maintenance, repair,
reconditioning, or improvement of vessels in
the National Defense Reserve Fleet as is
authorized under other Federal law.
(B) 25 percent shall be available to the
Administrator of the Maritime Administration
for the payment or reimbursement of expenses
incurred by or on behalf of State maritime
academies or the United States Merchant Marine
Academy for facility and training ship
maintenance, repair, and modernization, and for
the purchase of simulators and fuel.
(C) The remainder shall be available to the
Secretary to carry out the Program, as provided
in subsection (b).
(2) Application.--Paragraph (1) does not apply to
amounts credited to the Vessel Operations Revolving
Fund before July 1, 1994.
(b) Use of amounts for program.--
(1) In general.--Except as provided in paragraph (2),
of amounts available each fiscal year for the Program
under subsection (a)(1)(C)--
(A) \1/2\ shall be used for grants under
section 4(b); and
(B) \1/2\ shall be used for grants under
section 4(c).
(2) Use for interim projects.--Amounts available for
the Program under subsection (a)(1)(C) that are the
proceeds of any of the first 8 obsolete vessels in the
National Defense Reserve Fleet that are sold or
scrapped after July 1, 1994, under section 508 or
510(i) of the Merchant Marine Act, 1936 (46 U.S.C. 1158
or 1160(i)) are available to the Secretary for grants
for interim projects approved under section 4(j) of
this Act.
(3) Administrative expenses.--
(A) In general.--Not more than 15 percent or
$500,000, whichever is less, of the amount
available for the Program under subsection
(a)(1)(C) for a fiscal year may be used for
expenses of administering the Program.
(B) Allocation.--Of the amount available
under subparagraph (A) for a fiscal year--
(i) \1/2\ shall be allocated to the
National Trust for expenses incurred in
administering grants under section
4(b); and
(ii) \1/2\ shall be allocated as
appropriate by the Secretary to the
National Park Service and participating
State Historic Preservation Officers.
(c) Disposals of vessels.--
(1) Requirement.--The Secretary of Transportation
shall dispose (either by sale or purchase of disposal
services) of all vessels described in paragraph (2)--
[(A) by September 30, 2006;]
(A) in accordance with a priority system for
disposing of vessels, as determined by the
Secretary, which shall include provisions
requiring the Maritime Administration to--
(i) dispose of all deteriorated high
priority ships that are available for
disposal, within 12 months of their
designation as such; and
(ii) give priority to the disposition
of those vessels that pose the most
significant danger to the environment
or cost the most to maintain;
(B) in the manner that provides the best
value to the Government, except in any case in
which obtaining the best value would require
towing a vessel and such towing poses a serious
threat to the environment; and
(C) in accordance with the plan of the
Department of Transportation for disposal of
those vessels and requirements under sections
508 and 510(i) of the Merchant Marine Act, 1936
(46 App. U.S.C. 1158, 1160(i)).
(2) Vessels described.--The vessels referred to in
paragraph (1) are the vessels in the National Defense
Reserve Fleet after July 1, 1994, that--
(A) are not assigned to the Ready Reserve
Force component of that fleet; and
(B) are not specifically authorized or
required by statute to be used for a particular
purpose.
(d) Treatment of amounts available.--Amounts available under
this section shall not be considered in any determination of
the amounts available to the Department of the Interior.
[DEFICIT REDUCTION ACT OF 2005
[TITLE IV--TRANSPORTATION PROVISIONS
[SEC. 4001. EXTENSION OF VESSEL TONNAGE DUTIES.
[(a) Extension of Duties.--Section 36 of the Act entitled
``An Act to provide revenue, equalize duties and encourage the
industries of the United States, and for other purposes'',
approved August 5, 1909 (36 Stat. 111; 46 U.S.C. App. 121), is
amended--
[(1) by striking ``9 cents per ton'' and all that
follows through ``2002,'' the first place it appears
and inserting ``4.5 cents per ton, not to exceed in the
aggregate 22.5 cents per ton in any one year, for
fiscal years 2006 through 2010,''; and
[(2) by striking ``27 cents per ton'' and all that
follows through ``2002,'' and inserting ``13.5 cents
per ton, not to exceed 67.5 cents per ton per annum,
for fiscal years 2006 through 2010,''.
[(b) Conforming Amendment.--The Act entitled ``An Act
concerning tonnage duties on vessels entering otherwise than by
sea'', approved March 8, 1910 (36 Stat. 234; 46 U.S.C. App.
132), is amended by striking ``9 cents per ton'' and all that
follows through ``and 2 cents'' and inserting ``4.5 cents per
ton, not to exceed in the aggregate 22.5 cents per ton in any
one year, for fiscal years 2006 through 2010, and 2 cents''.]
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2006
SEC. 515. REDESIGNATION OF THE NAVAL RESERVE AS THE NAVY RESERVE.
(a) Redesignation of Reserve Component.--
(1) Redesignation.-- The reserve component of the
Armed Forces known as the Naval Reserve is redesignated
as the Navy Reserve.
(2) Conforming repeal.--Section 517 of the Ronald W.
Reagan National Defense Authorization Act for Fiscal
Year 2005 (Public Law 108-375; 118 Stat. 1884; 10
U.S.C. 10101 note) is repealed.
(b) Conforming Amendments to Title 10, United States Code.--
(1) Text amendments.--Title 10, United States Code,
is amended by striking ``Naval Reserve'' each place it
appears in the following provisions and inserting
``Navy Reserve'':
(A) Section 513(a).
(B) Section 516.
(C) Section 526(b)(2)(C)(i).
(D) Section 971(a).
(E) Section 5001(a)(1).
(F) Section 5143.
(G) Section 5596(c).
(H) Section 6323(f).
(I) Section 6327.
(J) Section 6330(b).
(K) Section 6331(a)(2).
(L) Section 6336.
(M) Section 6389.
(N) Section 6911(c)(1).
(O) Section 6913(a).
(P) Section 6915.
(Q) Section 6954(b)(3).
(R) Section 6956(a)(2).
(S) Section 6959.
(T) Section 7225.
(U) Section 7226.
(V) Section 7605(1).
(W) Section 7852.
(X) Section 7853.
(Y) Section 7854.
(Z) Section 10101(3).
(AA) Section 10108.
(BB) Section 10172.
(CC) Section 10301(a)(7).
(DD) Section 10303.
(EE) Section 12004(e)(2).
(FF) Section 12005.
(GG) Section 12010.
(HH) Section 12011(a)(2).
(II) Section 12012(a).
(JJ) Section 12103.
(KK) Section 12205.
(LL) Section 12207(b)(2).
(MM) Section 12732.
(NN) Section 12774(b) (other than the first
place it appears).
(OO) Section 14002(b).
(PP) Section 14101(a)(1).
(QQ) Section 14107(d).
(RR) Section 14302(a)(1)(A).
(SS) Section 14313(b).
(TT) Section 14501(a).
(UU) Section 14512(b).
(VV) Section 14705(a).
(WW) Section 16201(d)(1)(B)(ii).
(2) Subsection caption amendments.--Such title is
further amended in sections 971(a) and 5143(a) by
striking ``Naval Reserve'' and inserting ``Navy
Reserve''.
(3) Section heading amendments.--Such title is
further amended as follows:
(A) The heading of section 5143 is amended to
read as follows:
``SEC. 5143. OFFICE OF NAVY RESERVE: APPOINTMENT OF CHIEF''.
(B) The heading of section 6327 is amended to
read as follows: ``Sec. 6327. Officers and
enlisted members of the Navy Reserve and Marine
Corps Reserve: 30 years; 20 years; retired
pay''.
(C) The heading of section 6389 is amended to
read as follows: ``Sec. 6389. Navy Reserve and
Marine Corps Reserve; officers: elimination
from active status; computation of total
commissioned service''.
(D) The heading of section 7225 is amended to
read as follows: ``Sec. 7225. Navy Reserve
flag''.
(E) The heading of section 7226 is amended to
read as follows: ``Sec. 7226. Navy Reserve
yacht pennant''.
(F) The heading of section 10108 is amended
to read as follows: ``Sec. 10108. Navy Reserve:
administration''.
(G) The heading of section 10172 is amended
to read as follows: ``Sec. 10172. Navy Reserve
Force''.
(H) The heading of section 10303 is amended
to read as follows: ``Sec. 10303. Navy Reserve
Policy Board''.
(I) The heading of section 12010 is amended
to read as follows: ``Sec. 12010. Computations
for Navy Reserve and Marine Corps Reserve: rule
when fraction occurs in final result''.
(J) The heading of section 14306 is amended
to read as follows: ``Sec. 14306. Establishment
of promotion zones: Navy Reserve and Marine
Corps Reserve running mate system''.
(4) Tables of sections amendments.--Such title is
further amended as follows:
(A) The item relating to section 5143 in the
table of sections at the beginning of chapter
513 is amended to read as follows: ``5143.
Office of Navy Reserve: appointment of
Chief.''.
(B) The item relating to section 6327 in the
table of sections at the beginning of chapter
571 is amended to read as follows: ``6327.
Officers and enlisted members of the Navy
Reserve and Marine Corps Reserve: 30 years; 20
years; retired pay.''.
(C) The item relating to section 6389 in the
table of sections at the beginning of chapter
573 is amended to read as follows: ``6389. Navy
Reserve and Marine Corps Reserve; officers:
elimination from active status; computation of
total commissioned service.''.
(D) The items relating to sections 7225 and
7226 in the table of sections at the beginning
of chapter 631 are amended to read as follows:
``7225. Navy Reserve flag. ``7226. Navy Reserve
yacht pennant.''.
(E) The item relating to section 10108 in the
table of sections at the beginning of chapter
1003 is amended to read as follows: ``10108.
Navy Reserve: administration.''.
(F) The item relating to section 10172 in the
table of sections at the beginning of chapter
1006 is amended to read as follows: ``10172.
Navy Reserve Force.''.
(G) The item relating to section 10303 in the
table of sections at the beginning of chapter
1009 is amended to read as follows: ``10303.
Navy Reserve Policy Board.''.
(H) The item relating to section 12010 in the
table of sections at the beginning of chapter
1201 is amended to read as follows: ``12010.
Computations for Navy Reserve and Marine Corps
Reserve: rule when fraction occurs in final
result.''.
(I) The item relating to section 14306 in the
table of sections at the beginning of chapter
1405 is amended to read as follows: ``14306.
Establishment of promotion zones: Navy Reserve
and Marine Corps Reserve running mate
system.''.
(c) Conforming Amendment to Title 14, United States Code.--
Section 705 of title 14, United States Code, is amended by
striking ``Naval Reserve'' each place it appears and inserting
``Navy Reserve''.
(d) Conforming Amendments to Title 37, United States Code.--
(1) Text amendments.--Title 37, United States Code,
is amended by striking ``Naval Reserve'' each place it
appears in the following provisions and inserting
``Navy Reserve'':
(A) Section 101(24)(C).
(B) Section 201(d).
(C) Section 205(a)(2)(I).
(D) Section 301c(d).
(E) Section 319(a).
(F) Section 905.
(2) Subsection caption amendment.--Section 301c(d) of
such title is further amended by striking ``Naval
Reserve'' and inserting ``Navy Reserve''.
(e) Conforming Amendments to Title 38, United States Code.--
Title 38, United States Code, is amended by striking ``Naval
Reserve'' each place it appears in the following provisions and
inserting ``Navy Reserve'':
(1) Section 101(27)(B).
(2) Section 3002(6)(C).
(3) Section 3202(1)(C)(iii).
(4) Section 3452(a)(3)(C).
(f) Conforming Amendments to Other Codified Titles.--
(1) Title 5, united states code.--Section 2108(1)(B)
of title 5, United States Code, is amended by striking
``Naval Reserve'' and inserting ``Navy Reserve''.
(2) Title 18, united states code.--Section 2387(b) of
title 18, United States Code, is amended by striking
``Naval Reserve'' and inserting ``Navy Reserve''.
(3) Title 46, united states code.--Title 46, United
States Code, is amended as follows:
(A) Sections 8103(g) and 8302(g) are amended
by striking ``Naval Reserve'' each place it
appears and inserting ``Navy Reserve''.
(B) The heading of section 8103 is amended to
read as follows: ``Sec. 8103. Citizenship and
Navy Reserve requirements''.
(C) The table of sections at the beginning of
chapter 81 is amended by striking the item
relating to section 8103 and inserting the
following new item: ``8103. Citizenship and
Navy Reserve requirements.''.
(g) Conforming Amendments to Other Laws.--
(1) Section 2301(4)(C) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6671(4)(C))
is amended by striking ``Naval Reserve'' and inserting
``Navy Reserve''.
[(2) The Merchant Marine Act, 1936 is amended--
[(A) by striking ``Naval Reserve'' each place
it appears in sections 301(b) (46 U.S.C. App.
1131(b)), 1303 (46 U.S.C. App. 1295b), and 1304
(46 U.S.C. App. 1295c) and inserting ``Navy
Reserve''; and
[(B) by striking ``Naval Reserve'' in
sections 1303(c) and 1304(h) and inserting
``Navy Reserve'':]
(3) The Military Selective Service Act is amended--
(A) in section 6(a)(1) (50 U.S.C. App.
456(a)(1)), by striking ``United States Naval
Reserves'' and inserting ``members of the
United States Navy Reserve''; and
(B) in section 16(i) (50 U.S.C. App. 466(i)),
by striking ``Naval Reserve'' and inserting
``Navy Reserve''.
(h) Other References.--Any reference in any law, regulation,
document, record, or other paper of the United States to the
Naval Reserve, other than a reference to the Naval Reserve
regarding the United States Naval Reserve Retired List, shall
be considered to be a reference to the Navy Reserve.
* * * * * * *
[SEC. 3502. PAYMENTS FOR STATE AND REGIONAL MARITIME ACADEMIES.
[(a) Annual Payment.--Section 1304(d)(1)(C)(ii) of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(d)(1)(C)(ii))
is amended by striking ``$200,000'' and inserting ``$300,000
for fiscal year 2006, $400,000 for fiscal year 2007, and
$500,000 for fiscal year 2008 and each fiscal year
thereafter''.
[(b) School Ship Fuel Payment.--Section 1304(c)(2) of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(c)(2)) is
amended--
[(1) by striking ``The Secretary may pay to any State
maritime academy'' and inserting ``(A) The Secretary
shall, subject to the availability of appropriations,
pay to each State maritime academy''; and
[(2) by adding at the end the following: ``(B) The
amount of the payment to a State maritime academy under
this paragraph shall not exceed--
[``(i) $100,000 for fiscal year 2006;
[``(ii) $200,000 for fiscal year 2007;
and[``(iii) $300,000 for fiscal year 2008 and
each fiscal year thereafter.''.]
* * * * * * *
[SEC. 3506. ASSISTANCE FOR SMALL SHIPYARDS AND MARITIME COMMUNITIES.
[(a) Establishment of Program.--Subject to the availability
of appropriations, the Administrator of the Maritime
Administration shall establish a program to provide assistance
to State and local governments--
[(1) to provide assistance in the form of grants,
loans, and loan guarantees to small shipyards for
capital improvements; and
[(2) for maritime training programs in communities
whose economies are substantially related to the
maritime industry.
[(b) Awards.--In providing assistance under the program, the
Administrator shall--
[(1) take into account--
[(A) the economic circumstances and
conditions of maritime communities; and
[(B) the local, State, and regional economy
in which the communities are located; and
[(2) strongly encourage State, local, and regional
efforts to promote economic development and training
that will enhance the economic viability of and quality
of life in maritime communities.
[(c) Use of Funds.--Assistance provided under this section
may be used--
[(1) to make capital and related improvements in
small shipyards located in or near maritime
communities;
[(2) to encourage, assist in, or provide training for
residents of maritime communities that will enhance the
economic viability of those communities; and
[(3) for such other purposes as the Administrator
determines to be consistent with and supplemental to
such activities.
[(d) Prohibited Uses.--Grants awarded under this section may
not be used to construct buildings or other physical facilities
or to acquire land unless such use is specifically approved by
the Administrator in support of subsection (c)(3).
[(e) Matching Requirements.--
[(1) Federal funding.--Except as provided in
paragraph (2), Federal funds for any eligible project
under this section shall not exceed 75 percent of the
total cost of such project.
[(2) Exceptions.--
[(A) Small projects.--Paragraph (1) shall not
apply to grants under this section for stand
alone projects costing not more than $25,000.
The amount under this subparagraph shall be
indexed to the consumer price index and
modified each fiscal year after the annual
publication of the consumer price index.
[(B) Reduction in matching requirement.--If
the Administrator determines that a proposed
project merits support and cannot be undertaken
without a higher percentage of Federal
financial assistance, the Administrator may
award a grant for such project with a lesser
matching requirement than is described in
paragraph (1).
[(f) Application.--
[(1) In general.--The Administrator shall determine
who, as an eligible applicant, may submit an
application, at such time, in such form, and containing
such information and assurances as the Administrator
may require.
[(2) Minimum standards for payment or
reimbursement.--Each application submitted under
paragraph (1) shall include--
[(A) a comprehensive description of--
[(i) the need for the project;
[(ii) the methodology for
implementing the project; and
[(iii) any existing programs or
arrangements that can be used to
supplement or leverage assistance under
the program.
[(3) Procedural safeguards.--The Administrator, in
consultation with the Office of the Inspector General,
shall issue guidelines to establish appropriate
accounting, reporting, and review procedures to ensure
that--
[(A) grant funds are used for the purposes
for which they were made available;
[(B) grantees have properly accounted for all
expenditures of grant funds; and
[(C) grant funds not used for such purposes
and amounts not obligated or expended are
returned.
[(4) Project approval required.--The Administrator
may not award a grant under this section unless the
Administrator determines that--
[(A) sufficient funding is available to meet
the matching requirements of subsection (e);
[(B) the project will be completed without
unreasonable delay; and
[(C) the recipient has authority to carry out
the proposed project.
[(g) Audits and Examinations.--All grantees under this
section shall maintain such records as the Administrator may
require and make such records available for review and audit by
the Administrator.
[(h) Small Shipyard Defined.--In this section, the term
``small shipyard'' means a shipyard that--
[(1) is a small business concern (within the meaning
of section 3 of the Small Business Act (15 U.S.C. 632);
and
[(2) does not have more than 600 employees.
[(i) Authorization of Appropriations.--There are authorized
to be appropriated to the Administrator of the Maritime
Administration for each of fiscal years 2006 through 2010 to
carry out this section--
[(1) $5,000,000 for training grants; and
[(2) $25,000,000 for capital and related improvement
grants.]
SEC. 3507. TRANSFER OF AUTHORITY FOR TITLE XI NON-FISHING LOAN
GUARANTEE DECISIONS TO MARITIME ADMINISTRATION.
[(a) In General.--Title XI of the Merchant Marine Act, 1936
(46 U.S.C. App. 1271 et seq.), as amended by subsection (d) of
this section, is amended--
[(1) by striking ``Secretary'' each place it appears
and inserting ``Secretary or Administrator'' in--
[(A) section 1101(c), (f), and (g);
[(B) section 1102;
[(C) section 1103(a), (b), (c), (e), (g), and
(h);
[(D) section 1104A, except in--
[(i) subsection (b)(7) and the
undesignated paragraph that follows;
[(ii) paragraphs (1), (2), (3)(B),
and (4) of subsection (d);
[(iii) subsection (e)(2)(F) the
second place it appears;
[(iv) subsection (j); and
[(v) subsection (n)(1) the first
place it appears;
[(E) section 1104B;
[(F) section 1105(a), (b), (c), and (e);
[(G) section 1105(d) the first, second,
third, fifth, and last places it appears; and
[(H) sections 1108, 1109 (except the second
place it appears in subsection (c)), and 1113
(as redesignated by subsection (d) of this
section);
[(2) by striking ``Secretary'' and inserting
``Administrator'' in--
[(A) section 1103(i);
[(B) section 1103(j) the first place it
appears;
[(C) section 1104A(b)(7) each place it
appears but not in the undesignated paragraph
that follows subsection (b)(7);
[(D) section 1104A(d)(1)(A) each place it
appears except the first;
[(E) section 1104A(d)(3) each place it
appears except in subparagraph (B);
[(F) section 1104A(j)(1) the first, fifth,
and seventh places it appears;
[(G) section 1104A(n) each place it appears
except the first;
[(H) section 1110 each place it appears
except the first and fourth places it appears
in subsection (b);
[(I) section 1111(a) and (b)(2) each place it
appears;
[(J) section 1111(b)(4) each place it appears
except the first; and
[(K) section 1112 each place it appears; and
[(3) by striking ``Secretary's'' in sections
1108(g)(1) and 1109(d)(3) and inserting ``Secretary's
or Administrator's''.
[(b) Additional and Conforming Title XI Changes.--
[(1) Section 1101 of the Merchant Marine Act, 1936
(46 U.S.C. App. 1271) is amended--
[(A) by striking ``title,'' and all that
follows in subsection (n) and inserting
``title.''; and
[(B) by adding at the end the following:
``(p) The term `Administrator' means the
Administrator of the Maritime
Administration.''.
[(2) Section 1103(j) of such Act (46 U.S.C. App.
1273(j)) is amended by adding at the end the following:
``The Secretary of Defense shall determine whether a
vessel satisfies paragraphs (1) and (2) by not later
than 30 days after receipt of a request from the
Administrator for such a determination.''.
[(3) Section 1104A(d) of such Act (46 U.S.C. App.
1274(d)) is amended--
[(A) by striking ``Secretary of
Transportation'' in paragraphs (1)(A) and
(3)(B) and inserting ``Administrator'';
[(B) by striking ``the waiver'' in paragraph
(4)(B) and inserting ``if deemed necessary by
the Secretary or Administrator, the waiver'';
[(C) by striking ``the increased'' in
paragraph (4)(B) and inserting ``any
significant increase in''.
[(4) Section 1104A(f) of such Act (46 U.S.C. App.
1273(f)) is amended--
[(A) by striking ``financial structures, or
other risk factors identified by the Secretary
or Administrator.'' in paragraph (2), as
amended by subsection (a) of this section, and
inserting ``or financial structures.'';
[(B) by striking ``financial structures, or
other risk factors identified by the Secretary
or Administrator.'' in paragraph (3), as
amended by subsection (a) of this section, and
inserting ``or financial structures.''; and
[(C) by adding at the end the following:
``(5) A third party independent analysis
conducted under paragraph (2) shall be
performed by a private sector expert in
assessing such risk factors who is selected by
the Administrator.''.
[(5) Section 1104A(j)(2) of such Act (46 U.S.C. App.
1273(j)(2)) is amended by striking ``The Secretary of
Transportation'' and inserting ``The Administrator''.
[(6) Section 1104A(m) of such Act (46 U.S.C. App.
1273(m)) is amended by striking the last sentence and
inserting ``If the Secretary or Administrator has
waived a requirement under section 1104A(d), the loan
agreement shall include requirements for additional
payments, collateral, or equity contributions to meet
such waived requirement upon the occurrence of
verifiable conditions indicating that the obligor's
financial condition enables the obligor to meet the
waived requirement.''.
[(7) Section 1104A(n)(1) of such Act (46 U.S.C. App.
1273(n)(1)) is amended by striking ``The Secretary of
Transportation'' and inserting ``The Administrator''.
[(8) Section 1111 of such Act (46 U.S.C. 1279(f)) is
amended by striking ``Secretary of Transportation''
each place it appears and inserting ``Administrator''.
(c) Conforming Changes in Other Statutes.--
[(1) Section 401(a) of the Ocean Shipping Reform Act
of 1998 (46 U.S.C. App. 1273a(a)) is amended by
striking ``Secretary of Transportation'' and inserting
``Administrator of the Maritime Administration''.
[(2) Section 101 of Public Law 85-469 (46 U.S.C.
1280) is amended by inserting ``or the Administrator of
the Maritime Administration'' after ``Secretary''.
[(3) Section 3527 of the Maritime Security Act of
2003 (46 U.S.C. App. 1280b) is amended by striking
``Secretary of Transportation'' and inserting
``Administrator of the Maritime Administration''.]
(4) Section 3528 of the Maritime Security Act of
2003 (46 U.S.C. App. 1271 note) is repealed.
[(d) Technical Correction of Section Numbering.--Title XI of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1271 et seq.) is
amended by redesignating the second sections 1111 and 1112, as
added by section 303 of the Sustainable Fisheries Act (Public
Law 104-297; 110 Stat. 3616), as sections 1113 and 1114,
respectively.]
* * * * * * *
[SEC. 3509. UNITED STATES MARITIME SERVICE.
[Section 1306(a) of the Maritime Education and Training Act
of 1980 (46 U.S.C. App. 1295e(a)), is amended by inserting
``and to perform functions to assist the United States merchant
marine, as determined necessary by the Secretary,'' after
``United States'' the second place it appears.
[SEC. 3510. AWARDS AND MEDALS.
[Section 5(c) of the Merchant Marine Decorations and Medals
Act (46 U.S.C. App. 2004(c)) is amended by striking ``provide
at cost, or authorize for the manufacture and sale at
reasonable prices by private persons--'' and inserting
``provide--''.]
COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2006
* * * * * * *
[SEC. 303. CERTIFICATION OF VESSEL NATIONALITY IN DRUG SMUGGLING CASES.
[Section 3(c)(2) of the Maritime Drug Law Enforcement Act (46
U.S.C. App. 1903(c)(2)) is amended by striking the last two
sentences and inserting the following: ``The response of a
foreign nation to a claim of registry under subparagraph (A) or
(C) may be made by radio, telephone, or similar oral or
electronic means, and is conclusively proved by certification
of the Secretary of State or the Secretary's designee.''.]
* * * * * * *
[SEC. 307. TRAINING OF CADETS AT UNITED STATES MERCHANT MARINE ACADEMY.
[Section 1303(f) of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1295b(f)) is amended--
[(1) by striking ``and'' at the end of paragraph (2);
[(2) by striking the period at the end of paragraph
(3) and inserting ``; and''; and
[(3) by adding at the end the following: ``(4) on any
other vessel considered by the Secretary to be
necessary or appropriate or in the national
interest.''.]
[SEC. 308. REPORTS FROM MORTGAGEES OF VESSELS.
[Section 12120 of title 46, United States Code, is amended by
striking ``owners, masters, and charterers'' and inserting
``owners, masters, charterers, and mortgagees''.]
* * * * * * *
[SEC. 310. SETTING, RELOCATING, AND RECOVERING ANCHORS.
[Section 12105 of title 46, United States Code, is amended by
adding at the end the following:
[``(c)(1) Only a vessel for which a certificate of
documentation with a registry endorsement is issued may engage
in--
[``(A) the setting, relocation, or recovery
of the anchors or other mooring equipment of a
mobile offshore drilling unit that is located
over the outer Continental Shelf (as defined in
section 2(a) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1331(a))); or
[``(B) the transportation of merchandise or
personnel to or from a point in the United
States from or to a mobile offshore drilling
unit located over the outer Continental Shelf
that is not attached to the seabed.
[``(2) Nothing in paragraph (1) authorizes the
employment in the coastwise trade of a vessel that does
not meet the requirements of section 12106 of this
title.''.]
* * * * * * *
SEC. 901. MISCELLANEOUS TECHNICAL CORRECTIONS.
* * * * * * *
[(q) Acts of Terrorism Report.--Section 905 of the Omnibus
Diplomatic Security and Antiterrorism Act of 1986 (46 U.S.C.
App. 1802; 100 Stat. 890) is amended by striking ``Not later
than February 28, 1987, and annually thereafter, the Secretary
of Transportation shall report'' and inserting ``The Secretary
of the department in which the Coast Guard is operating shall
report annually''.]
* * * * * * *
SEC. 902. CORRECTION OF REFERENCES TO SECRETARY OF TRANSPORTATION AND
DEPARTMENT OF TRANSPORTATION; RELATED MATTERS.
* * * * * * *
[(o) Merchant Marine Act, 1920.--Section 27 of the Merchant
Marine Act, 1920 (46 U.S.C. App. 883) is amended in the matter
following the ninth proviso (pertaining to transportation of a
foreign-flag incineration vessel) by striking ``Satisfactory
inspection shall be certified in writing by the Secretary of
Transportation'' and inserting ``Satisfactory inspection shall
be certified, in writing, by the Secretary of Homeland
Security.''.]
JOHN WARNER NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007
* * * * * * *
SEC. 1017. OBTAINING CARRIAGE BY VESSEL: CRITERION REGARDING OVERHAUL,
REPAIR, AND MAINTENANCE OF VESSELS IN THE UNITED
STATES.
(a) Acquisition Policy.--In order to maintain the national
defense industrial base, the Secretary of Defense shall issue
an acquisition policy that establishes, as a criterion required
to be considered in obtaining carriage by vessel of cargo for
the Department of Defense, the extent to which an offeror of
such carriage had overhaul, repair, and maintenance work for
covered vessels of the offeror performed in shipyards located
in the United States.
(b) Covered Vessels.--A vessel is a covered vessel of an
offeror under this section if the vessel is--
(1) owned, operated, or controlled by the offeror;
and
(2) qualified to engage in the carriage of cargo in
the coastwise or non- contiguous trade under [section
27 of the Merchant Marine Act, 1920 (46 U.S.C. 883),
section 12106 of title 46, United States Code, and
section 2 of the Shipping Act, 1916 (46 U.S.C. App.
802)] sections 12112, 50501, and 55102 of title 46,
United States Code.
(c) Application of Policy.--The acquisition policy shall
include rules providing for application of the policy to
covered vessels as expeditiously as is practicable based on the
nature of carriage obtained, and by no later than June 1, 2007.
(d) Regulations.--
(1) In general.--The Secretary shall prescribe
regulations as necessary to carry out the acquisition
policy and submit such regulations to the Committees on
Armed Services of the Senate and the House of
Representatives, by not later than June 1, 2007.
(2) Interim regulations.--
(A) In general.--The Secretary may prescribe
interim regulations as necessary to carry out
the acquisition policy. For this purpose, the
Secretary is excepted from compliance with the
notice and comment requirements of section 553
of title 5, United States Code.
(B) Submission to congress.--Upon the
issuance of interim regulations under this
paragraph, the Secretary shall submit to the
Committees on Armed Services of the Senate and
the House of Representatives the interim
regulations and a description of the
acquisition policy developed (or being
developed) under subsection (a).
(C) Expiration.--All interim regulations
prescribed under the authority of this
paragraph that are not earlier superseded by
final regulations shall expire no later than
June 1, 2007.
(e) Annual Report.--The Secretary, acting through the United
States Transportation Command, shall annually submit to the
Committees on Armed Services of the Senate and the House of
Representatives a report regarding overhaul, repair, and
maintenance performed on covered vessels of each offeror of
carriage to which the acquisition policy applies.
(f) Definitions.--In this section:
(1) Foreign shipyard.--The term ``foreign shipyard''
means a shipyard that is not located in the United
States.
(2) United states.--The term ``United States''
means--
(A) any State of the United States; and
(B) Guam.
* * * * * * *
[SEC. 3505. UNITED STATES MERCHANT MARINE ACADEMY GRADUATES: SERVICE
REQUIREMENTS.
[(a) Alternate Service.--Section 1303(e) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1295b(e)) is amended by adding
at the end the following:
[``(6)(A) An individual who for the 5-year period
following graduation from the Academy, serves as a
commissioned officer on active duty in an armed force
of the United States or as a commissioned officer of
the National Oceanic and Atmospheric Administration or
the Public Health Service shall be excused from the
requirements of subparagraphs (C), (D), and (E) of
paragraph (1).
[``(B) The Secretary may modify or waive any of the
terms and conditions set forth in paragraph (1) through
the imposition of alternative service requirements.''.
[(b) Application.--Paragraph (6) of section 1303(e) of the
Merchant Marine Act, 1936 (46 U.S.C. App. 1295b(e)), as added
by this section, applies only to an individual who enrolls as a
cadet at the United States Merchant Marine Academy, and signs
an agreement under paragraph (1) of that section, after the
date of the enactment of this Act.
* * * * * * *
[SEC. 3506. UNITED STATES MERCHANT MARINE ACADEMY GRADUATES: SERVICE
OBLIGATION PERFORMANCE REPORTING REQUIREMENT.
[(a) In General.--Section 1303(e) of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295b(e)) is further amended by adding at
the end the following:
[``(7)(A) Subject to any otherwise applicable
restrictions on disclosure in section 552a of title 5,
United States Code, the Secretary of Defense, the
Secretary of the department in which the Coast Guard is
operating, the Administrator of the National Oceanic
and Atmospheric Administration, and the Surgeon General
of the Public Health Service--
[``(i) shall report the status of obligated
service of an individual graduate of the
Academy upon request of the Secretary; and
[``(ii) may, in their discretion, notify the
Secretary of any failure of the graduate to
perform the graduate's duties, either on active
duty or in the Ready Reserve component of their
respective service, or as a commissioned
officer of the National Oceanic and Atmospheric
Administration or the Public Health Service,
respectively.
[``(B) A report or notice under subparagraph (A)
shall identify any graduate determined to have failed
to comply with service obligation requirements and
provide all required information as to why such
graduate failed to comply.
[``(C) Upon receipt of such a report or notice, such
graduate may be considered to be in default of the
graduate's service obligations by the Secretary, and
subject to all remedies the Secretary may have with
respect to such a default.''.
[(b) Application.--The amendment made by this section does
not apply with respect to an agreement entered into under
section 1303(e) of the Merchant Marine Act, 1936 (46 U.S.C.
1295b(e)) before the date of the enactment of this Act.
* * * * * * *
[SEC. 3508. QUALIFYING RESERVE DUTY FOR RECEIPT OF STUDENT INCENTIVE
PAYMENTS.
[Section 1304(g)(2) of title XIII of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295c(g)(2)) is amended to read as
follows:
[``(2) Each agreement entered into under paragraph
(1) shall require the individual to accept enlisted
reserve status in the United States Naval Reserve
(including the Merchant Marine Reserve, United States
Naval Reserve) or the United States Coast Guard Reserve
before receiving any student incentive payments under
this subsection.''.
* * * * * * *
[SEC. 3510. MISCELLANEOUS MARITIME ADMINISTRATION PROVISIONS.
[(a) Technical Correction Regarding War Risk Insurance for
Merchant Marine Vessels.--
[(1) In general.--Section 1208(a) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1288(a)) is amended--
[(A) by striking ``Upon the request of the
Secretary of Transportation, the Secretary of
the Treasury may invest or reinvest all or any
part of the fund in securities of the United
States or in securities guaranteed as to
principal and interest by the United States.'';
and
[(B) by inserting after ``to the credit of
such fund.'' the following: ``Payments of
return premiums, losses, settlements,
judgments, and all liabilities incurred by the
United States under this title shall be made
from such fund through the Fiscal Service of
the Department of the Treasury.''.
[(2) Effective date.--The amendments made by
paragraph (1) shall be effective as if enacted by
section 3502 of the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005 (118 Stat.
2195).
[(b) Right to Use Maritime Administration Decoration.--
Section 8 of the Merchant Marine Decorations and Medals Act (46
U.S.C. App. 2007) is amended by inserting ``or the Secretary of
Transportation,'' after ``Act,''.]
(c) Intermodal Centers.--
(1) In general.--Notwithstanding section
5309(m)(6)(B) of title 49, United States Code, half of
the amounts appropriated or made available under
subsections (b) and (c) of section 5338 of title 49,
United States Code, for capital projects under section
5309(m)(6)(B) of that title for fiscal years 2006
through 2009 shall be made available and used, in
accordance with section 9008(a) of Public Law 109-59,
for an intermodal or marine facility comprising a
component of the Hawaii Port Infrastructure Expansion
Program.
(2) Supplementary funding.--Any amount made available
under paragraph (1) shall be in addition to any amounts
authorized to be appropriated under subsections (b) and
(c) of section 9008 of Public Law 109-59.
(d) Technical Correction.--
(1) Correction.--Section 3509 of the National Defense
Authorization Act for Fiscal Year 2006 (119 Stat. 3557)
is amended by striking ``Maritime Education and
Training Act of 1980'' and inserting ``Merchant Marine
Act, 1936''.
(2) Effective date.--This subsection shall be
effective immediately after section 3509 of the
National Defense Authorization Act for Fiscal Year 2006
(119 Stat. 3557) takes effect.
TITLE 46, UNITED STATES CODE
SHIPPING
SUBTITLE II. VESSELS AND SEAMEN
CHAPTER 81. GENERAL
Sec. 8103. Citizenship and Navy Reserve requirements
(a) Except as otherwise provided in this title, only a
citizen of the United States may serve as master, chief
engineer, radio officer, or officer in charge of a deck watch
or engineering watch on a documented vessel.
(b)(1) Except as otherwise provided in this section, on a
documented vessel--
(A) each unlicensed seaman must be--
(i) a citizen of the United States;
(ii) an alien lawfully admitted to the United
States for permanent residence; or
(iii) a foreign national who is enrolled in
the United States Merchant Marine Academy.
(B) not more than 25 percent of the total number of
unlicensed seamen on the vessel may be aliens lawfully
admitted to the United States for permanent residence.
(2) Paragraph (1) of this subsection does not apply to--
(A) a yacht;
(B) a fishing vessel fishing exclusively for highly
migratory species (as that term is defined in section 3
of the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1802)); and
(C) a fishing vessel fishing outside of the exclusive
economic zone.
(3) The Secretary may waive a citizenship requirement under
this section, other than a requirement that applies to the
master of a documented vessel, with respect to--
(A) an offshore supply vessel or other similarly
engaged vessel of less than 1,600 gross tons as
measured under section 14502 of this title, or an
alternate tonnage measured under section 14302 of this
title as prescribed by the Secretary under section
14104 of this title that operates from a foreign port;
(B) a mobile offshore drilling unit or other vessel
engaged in support of exploration, exploitation, or
production of offshore mineral energy resources
operating beyond the water above the outer Continental
Shelf (as that term is defined in section 2(a) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1331(a));
and
(C) any other vessel if the Secretary determines,
after an investigation, that qualified seamen who are
citizens of the United States are not available.
(c) On each departure of a vessel (except a passenger vessel)
for which a construction or operating differential subsidy has
been granted, all of the seamen of the vessel must be citizens
of the United States.
(d)(1) On each departure of a passenger vessel for which a
construction or operating differential subsidy has been
granted, at least 90 percent of the entire complement
(including licensed individuals) must be citizens of the United
States.
(2) An individual not required by this subsection to be a
citizen of the United States may be engaged only if the
individual has a declaration of intention to become a citizen
of the United States or other evidence of admission to the
United States for permanent residence. An alien may be employed
only in the steward's department of the passenger vessel.
(e) If a documented vessel is deprived for any reason of the
services of an individual (except the master and the radio
officer) when on a foreign voyage and a vacancy consequently
occurs, until the vessel's return to a port at which in the
most expeditious manner a replacement who is a citizen of the
United States can be obtained, an individual not a citizen of
the United States may serve in--
(1) the vacancy; or
(2) a vacancy resulting from the promotion of another
individual to fill the original vacancy.
(f) A person employing an individual in violation of this
section or a regulation prescribed under this section is liable
to the United States Government for a civil penalty of $500 for
each individual so employed.
(g) A deck or engineer officer employed on a vessel on which
an operating differential subsidy is paid, or employed on a
vessel (except a vessel of the Coast Guard or Saint Lawrence
Seaway Development Corporation) owned or operated by the
Department of Transportation or by a corporation organized or
controlled by the Department, if eligible, shall be a member of
the Navy Reserve.
(h) The President may--
(1) suspend any part of this section during a
proclaimed national emergency; and
(2) when the needs of commerce require, suspend as
far and for a period the President considers desirable,
subsection (a) of this section for crews of vessels of
the United States documented for foreign trade.
(i)(1) Except as provided in paragraph (3) of this
subsection, each unlicensed seaman on a fishing, fish
processing, or fish tender vessel that is engaged in the
fisheries in the navigable waters of the United States or the
exclusive economic zone must be--
(A) a citizen of the United States;
(B) an alien lawfully admitted to the United States
for permanent residence;
(C) any other alien allowed to be employed under the
Immigration and Nationality Act (8 U.S.C. 1101 et
seq.); or
(D) an alien allowed to be employed under the
immigration laws of the Commonwealth of the Northern
Mariana Islands if the vessel is permanently stationed
at a port within the Commonwealth and the vessel is
engaged in the fisheries within the exclusive economic
zone surrounding the Commonwealth or another United
States territory or possession.
(2) Not more than 25 percent of the unlicensed seamen on a
vessel subject to paragraph (1) of this subsection may be
aliens referred to in clause (C) of that paragraph.
(3) This subsection does not apply to a fishing vessel
fishing exclusively for highly migratory species (as that term
is defined in section 3 of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1802)).
(j) Riding gang member.--This section does not apply to an
individual who is a riding gang member.
(k) Crew requirements for large passenger vessels.--
(1) Citizenship and nationality.--Each unlicensed
seaman on a large passenger vessel shall be--
(A) a citizen of the United States;
(B) an alien lawfully admitted to the United
States for permanent residence;
(C) an alien allowed to be employed in the
United States under the Immigration and
Nationality Act (8 U.S.C. 1101 et seq.),
including an alien crewman described in section
101(a)(15)(D)(i) of that Act (8 U.S.C.
1101(a)(15)(D)(i)), who meets the requirements
of paragraph (3)(A) of this subsection; or
(D) a foreign national who is enrolled in the
United States Merchant Marine Academy.
(2) Percentage limitation for alien seamen.-- Not
more than 25 percent of the unlicensed seamen on a
vessel described in paragraph (1) of this subsection
may be aliens referred to in subparagraph (B) or (C) of
that paragraph.
(3) Special rules for certain unlicensed seamen.--
(A) Qualifications.--An unlicensed seaman
described in paragraph (1)(C) of this
subsection--
(i) shall have been employed, for a
period of not less than 1 year, on a
passenger vessel under the same common
ownership or control as the vessel
described in paragraph (1) of this
subsection, as certified by the owner
or managing operator of such vessel to
the Secretary;
(ii) shall have no record of material
disciplinary actions during such
employment, as verified in writing by
the owner or managing operator of such
vessel to the Secretary;
(iii) shall have successfully
completed a United States Government
security check of the relevant domestic
and international databases, as
appropriate, or any other national
security-related information or
database;
(iv) shall have successfully
undergone an employer background
check--
(I) for which the owner or
managing operator provides a
signed report to the Secretary
that describes the background
checks undertaken that are
reasonably and legally
available to the owner or
managing operator including
personnel file information
obtained from such seaman and
from databases available to the
public with respect to the
seaman;
(II) that consisted of a
search of all information
reasonably available to the
owner or managing operator in
the seaman's country of
citizenship and any other
country in which the seaman
receives employment referrals,
or resides;
(III) that is kept on the
vessel and available for
inspection by the Secretary;
and
(IV) the information derived
from which is made available to
the Secretary upon request; and
(v) may not be a citizen or temporary
or permanent resident of a country
designated by the United States as a
sponsor of terrorism or any other
country that the Secretary, in
consultation with the Secretary of
State and the heads of other
appropriate United States agencies,
determines to be a security threat to
the United States.
(B) Restrictions.--An unlicensed seaman
described in paragraph (1)(C) of this
subsection--
(i) may be employed only in the
steward's department of the vessel; and
(ii) may not perform watchstanding,
automated engine room duty watch, or
vessel navigation functions.
(C) Status, documentation, and employment.--
An unlicensed seaman described in subparagraph
(C) or (D) of paragraph (1) of this
subsection--
(i) is deemed to meet the nationality
requirements necessary to qualify for a
merchant mariners document
notwithstanding the requirements of
part 12 of title 46, Code of Federal
Regulations;
(ii) is deemed to meet the proof-of-
identity requirements necessary to
qualify for a merchant mariners
document, as prescribed under
regulations promulgated by the
Secretary, if the seaman possesses--
(I) an unexpired passport
issued by the government of the
country of which the seaman is
a citizen or subject; and
(II) an unexpired visa issued
to the seaman, as described in
paragraph (1)(C);
(iii) shall, if eligible, be issued a
merchant mariners document with an
appropriate annotation reflecting the
restrictions of subparagraph (B) of
this paragraph; and
(iv) may be employed for a period of
service on board not to exceed 36
months in the aggregate as a
nonimmigrant crewman described in
section 101(a)(15)(D)(i) of the
Immigration and Nationality Act (8
U.S.C. 1101(a)(15)(D)(i)) on vessels
engaged in domestic voyages
notwithstanding the departure
requirements and time limitations of
such section and section 252 of the
Immigration and Nationality Act (8
U.S.C. 1282) and the regulations and
rules promulgated thereunder.
(4) Merchant mariner's document requirements not
affected.--This subsection shall not be construed to
affect any requirement under Federal law that an
individual must hold a merchant mariner's document.
(5) Definitions.--In this subsection:
(A) Steward's department.--The term
``steward's department'' means the department
that includes entertainment personnel and all
service personnel, including wait staff,
housekeeping staff, and galley workers, as
defined in the vessel security plan approved by
the Secretary pursuant to section 70103(c) of
this title.
(B) Large passenger vessel.--The term ``large
passenger vessel'' means a vessel of more than
70,000 gross tons, as measured under section
14302 of this title, with capacity for at least
2,000 passengers and documented with a
coastwise endorsement under chapter 121 of this
title.
CHAPTER 101. GENERAL
Sec. 10101. Definitions
In this part--
(1) ``master'' means the individual having command of
a vessel.
(2) ``owner'' means the person to whom the vessel
belongs.
(3) ``seaman'' means an individual (except scientific
personnel on an oceanographic research vessel, a
sailing school instructor, or a sailing school student)
engaged or employed in any capacity on board a vessel.
(4) ``fishing vessel'' includes--
(A) a fish tender vessel; or
(B) a fish processing vessel entered into
service before January 1, 1988, and not more
than 1,600 gross tons as measured under section
14502 of this title, or an alternate tonnage
measured under section 14302 of this title as
prescribed by the Secretary under section 14104
of this title or entered into service after
December 31, 1987, and having not more than 16
individuals on board primarily employed in the
preparation of fish or fish products.
CHAPTER 121. DOCUMENTATION OF VESSELS
Sec. 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
requirement.--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 beneficiary 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
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
person chartering a vessel from a trust that qualifies
under paragraph (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.
(d) Activities Involving Mobile Offshore Drilling Units.--
(1) In general.--Only a vessel for which a
certificate of documentation with a registry
endorsement is issued may engage in--
(A) the setting, relocation, or recovery of
the anchors or other mooring equipment of a
mobile offshore drilling unit that is located
over the outer Continental Shelf (as defined in
section 2(a) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1331(a))); or
(B) the transportation of merchandise or
personnel to or from a point in the United
States from or to a mobile offshore drilling
unit located over the outer Continental Shelf
that is not attached to the seabed.
(2) Coastwise trade not authorized.--Nothing in
paragraph (1) authorizes the employment in the
coastwise trade of a vessel that does not meet the
requirements of section 12112 of this title.
* * * * * * *
Sec. 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 ownership 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.--
(1) In general.--Subject to the laws of the United
States regulating the fisheries, a vessel for which a
fishery endorsement 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 executive officer, a majority
of the board of directors, any general
partner, or any person serving in a
management 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 horsepower.--
(1) Application.--This subsection applies to a vessel
that--
(A) is greater than 165 feet in registered
length;
(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 Secretary 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 citizenship 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
subsection shall conform to the extent practicable with
the regulations 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
(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
demonstrate 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 reduction
program.--A vessel purchased by the Secretary of Commerce
through a fishing capacity reduction program under the
Magnuson-Stevens Fishery Conservation and 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 transactions 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 commercial fishing industry, to the
traditional financing arrangements of that industry, and to the
opportunity to form fishery cooperatives.
* * * * * * *
Sec. 12131. Command of documented vessels
(a) In general.--Except as provided in subsection (b), a
documented vessel may be placed under the [commmand] command
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.
* * * * * * *
Sec. 12139. Reports
(a) In general.--To ensure compliance with this chapter and
laws governing the qualifications of vessels to engage in the
coastwise trade and the fisheries, the Secretary may require
owners, masters, [and charterers] charterers, and mortgagees 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
Secretary, 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.
(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.
SUBTITLE III. MARITIME LIABILITY
CHAPTER 301. GENERAL LIABILITY PROVISIONS
Sec. 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.]
(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 bring an action against the
employer. In such an action, the laws of the United States
regulating recovery for personal injury to, or death of, a
railway employee shall apply. Such an action may be maintained
in admiralty or, at the plaintiff's election, as an action at
law, with the right of trial by jury.
(b) Venue.--When the plaintiff elects to maintain an action
at law, venue shall be in the judicial district in which the
employer resides or the employer's principal office is located.
SUBTITLE V. MERCHANT MARINE
PART A. GENERAL
CHAPTER 503. ADMINISTRATIVE
Sec. 50303. Operating property and extending term of notes
(a) General Authority.--The Secretary of Transportation
may--
(1) operate or lease docks, wharves, piers,
vessels, or real property under the Secretary's
[control;] control, except that the prior consent of
the Secretary of Defense for such use shall be required
with respect to any vessel in the Ready Reserve Force
or in the National Defense Reserve Fleet which is
maintained in a retention status for the Department of
Defense; and
(2) make extensions and accept renewals of--
(A) promissory notes and other evidences of
indebtedness on property; and
(B) mortgages and other contracts securing
the property.
(b) Terms of Transactions.--A transaction under subsection
(a) shall be on terms the Secretary considers necessary to
carry out the purposes of this subtitle , but consistent with
sound business practice.
(c) Availability of Amounts.--Amounts received by the
Secretary from a transaction under this section are available
for expenditure by the Secretary as provided in this subtitle.
Sec. 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
possession 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.
(d) Vessel Charters to Other Departments.--On a reimbursable
or non-reimbursable basis, as determined by the Secretary of
Transportation, the Secretary may charter or otherwise make
available a vessel under the jurisdiction of the Secretary to
any other department, upon the request by the Secretary of the
department that receives the vessel. The prior consent of the
Secretary of Defense for such use shall be required with
respect to any vessel in the Ready Reserve Force or in the
National Defense Reserve Fleet which is maintained in a
retention status for the Department of Defense.
CHAPTER 505. OTHER GENERAL PROVISIONS
Sec. 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.]
(a) Definitions.--In this section, the terms ``oceanographic
research vessel'' and ``scientific personnel'' have the meaning
given those terms in section 2101 of this title.
(b) Not Seamen.--Scientific personnel on an oceanographic
research vessel are deemed not to be seamen under part G of
subtitle II, section 30104, or chapter 303 of this title.
(c) Not Engaged in Trade or Commerce.--An oceanographic
research vessel is deemed not to be engaged in trade or
commerce.
Sec. 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] part B, F, or
G of subtitle II, section 30104, or chapter 303 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 commerce.--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
financial 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
PART B. MERCHANT MARINE SERVICE
CHAPTER 513. UNITED STATES MERCHANT MARINE ACADEMY
Sec. 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
agreement to--
(1) complete the course of instruction at the
Academy;
(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] Navy
Reserve (including the Merchant Marine Reserve, [Naval
Reserve] Navy 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 determined 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
subsection.
(b) Failure to complete course of instruction.--
(1) Active duty.--If the Secretary of Transportation
determines 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 provided 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
determines that an individual has failed to fulfill any
part of the agreement described in subsection (a)(2)-
(6), the individual may 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
Secretary of Defense, shall determine in which service
the individual 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 provided 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 commitment
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.
(e) Alternative Service.--
(1) Service as commissioned officer.--An individual
who, for the 5-year period following graduation from
the Academy, serves as a commissioned officer on active
duty in an armed force of the United States or as a
commissioned officer of the National Oceanic and
Atmospheric Administration or the Public Health Service
shall be excused from the requirements of paragraphs
(3) through (5) of subsection (a).
(2) Modification or waiver.--The Secretary may modify
or waive any of the terms and conditions set forth in
subsection (a) through the imposition of alternative
service requirements.
(f) Service Obligation Performance Reporting Requirement.--
(1) In general.--Subject to any otherwise applicable
restrictions on disclosure in section 552a of title 5,
the Secretary of Defense, the Secretary of the
department in which the Coast Guard is operating, the
Administrator of the National Oceanic and Atmospheric
Administration, and the Surgeon General of the Public
Health Service--
(A) shall report the status of obligated
service of an individual graduate of the
Academy upon request of the Secretary; and
(B) may, in their discretion, notify the
Secretary of any failure of the graduate to
perform the graduate's duties, either on active
duty or in the Ready Reserve component of their
respective service, or as a commissioned
officer of the National Oceanic and Atmospheric
Administration or the Public Health Service,
respectively.
(2) Information to be provided.--A report or notice
under paragraph (1) shall identify any graduate
determined to have failed to comply with service
obligation requirements and provide all required
information as to why such graduate failed to comply.
(3) Considered as in default.--Upon receipt of such a
report or notice, such graduate may be considered to be
in default of the graduate's service obligations by the
Secretary, and subject to all remedies the Secretary
may have with respect to such a default.
Sec. 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
educational [organizations.] organizations; and
(4) on any other vessel considered by the Secretary
to be necessary or appropriate or in the national
interest.
* * * * * * *
Sec. 51311. Midshipman status in the [Naval Reserve] Navy 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] Navy Reserve (including the Merchant
Marine Reserve, [Naval Reserve] Navy 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] Navy Reserve (including the Merchant
Marine Reserve, [Naval Reserve] Navy 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] Navy
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.
CHAPTER 515. STATE MARITIME ACADEMY SUPPORT PROGRAM
Sec. 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.
(b) General authority.--Subject to subsection (c), the
Secretary 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.]
(f) Fuel Costs.--
(1) In general.--Subject to the availability of
appropriations, the Secretary shall pay to each State
maritime academy the costs of fuel used by a vessel
provided under this section while used for training.
(2) Maximum amounts.--The amount of the payment to a
State maritime academy under paragraph (1) may not
exceed--
(A) $100,000 for fiscal year 2006;
(B) $200,000 for fiscal year 2007; and
(C) $300,000 for fiscal year 2008 and each
fiscal year thereafter.
(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
maritime academy, except with the express consent of
Congress.
Sec. 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
satisfies 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
payment 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.
(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] $300,000 for fiscal year 2006,
$400,000 for fiscal year 2007, and $500,000 for
fiscal year 2008 and each fiscal year
thereafter for a regional maritime academy.
* * * * * * *
Sec. 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 to
make student incentive payments to the individual. An agreement
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 section
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] Enlisted reserve status.--An
agreement under this section shall require the student to
accept [midshipman and] enlisted reserve status in the [Naval
Reserve] Navy Reserve (including the Merchant Marine Reserve,
[Naval Reserve] Navy Reserve) or the Coast Guard Reserve before
receiving any payments under the agreement.
(d) Agreement requirements.--An agreement under this section
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] Navy
Reserve (including the Merchant Marine Reserve, [Naval
Reserve] Navy 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 determined 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
subsection.
(e) Failure to complete course of instruction.--
(1) Active duty.--If the Secretary of Transportation
determines 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 Secretary 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 provided 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
determines 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
Secretary of Defense, shall determine in which service
the individual 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 provided 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 commitment
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.
* * * * * * *
Sec. 51511. Midshipman status in the [Naval Reserve] Navy 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] Navy Reserve (including the
Merchant Marine Reserve, [Naval Reserve] Navy Reserve).
CHAPTER 517. OTHER SUPPORT FOR MERCHANT MARINE TRAINING
Sec. 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.] of the United States and to perform
functions to assist the United States merchant marine, as
determined necessary by the Secretary.
(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.
CHAPTER 519. MERCHANT MARINE AWARDS
[Sec. 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.]
Sec. 51907. Provision of decorations, medals, and replacements
The Secretary of Transportation may provide--
(1) the decorations and medals authorized by this
chapter and replacements for those decorations and
medals; and
(2) replacements for decorations and medals issued
under a prior law.
Sec. 51908. Prohibition against unauthorized manufacture, sale,
possession, or display of awards
(a) Prohibition.--Except as authorized [under this chapter]
by this chapter or the Secretary of Transportation, 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.
PART C. FINANCIAL ASSISTANCE PROGRAMS
CHAPTER 531. MARITIME SECURITY FLEET
Sec. 53105. Obligations and rights under operating agreements
(a) Operation of vessel.--An operating agreement under this
chapter shall require that, during the period a vessel is
operating under the agreement--
(1) the vessel--
(A) shall be operated exclusively in the
foreign commerce or in mixed foreign commerce
and domestic trade allowed under a registry
endorsement issued under section 12111 of this
title; and
(B) shall not otherwise be operated in the
coastwise trade; and
(2) the vessel shall be documented under chapter 121
of this title.
(b) Annual payments by Secretary.--
(1) In general.--An operating agreement under this
chapter shall require, subject to the availability of
appropriations, that the Secretary make a payment each
fiscal year to the contractor in accordance with
section 53106.
(2) Operating agreement is obligation of united
states government.--An operating agreement under this
chapter constitutes a contractual obligation of the
United States Government to pay the amounts provided
for in the agreement to the extent of actual
appropriations.
(c) Documentation requirement.--Each vessel covered by an
operating agreement (including an agreement terminated under
section 53104(c)(2)) shall remain documented under chapter 121
of this title, until the date the operating agreement would
terminate according to its terms.
(d) National security requirements.--
(1) In general.--A contractor with respect to an
operating agreement (including an agreement terminated
under section 53104(c)(2)) shall continue to be bound
by the provisions of section 53107 until the date the
operating agreement would terminate according to its
terms.
(2) Emergency preparedness agreement.--All terms and
conditions of an Emergency Preparedness Agreement
entered into under section 53107 shall remain in effect
until the date the operating agreement would terminate
according to its terms, except that the terms of such
Emergency Preparedness Agreement may be modified by the
mutual consent of the contractor, the Secretary of
Transportation, and the Secretary of Defense.
(e) Transfer of operating agreements.--
(1) A contractor under an operating agreement may
transfer the agreement (including all rights and
obligations under the agreement) to any person that is
eligible to enter into that operating agreement under
this chapter, if the transfer is approved by the
Secretary and the Secretary of Defense.
(2) Limitation.--The Secretary of Defense may not
approve under paragraph (1) transfer of an operating
agreement to a person that is not a citizen of the
United States under [section 2 of the Shipping Act,
1916 (46 U.S.C. App. 802),] section 50501 of this
title, unless the Secretary of Defense determines that
there is no person who is a citizen under such section
and is interested in obtaining the operating agreement
for a vessel that is otherwise eligible to be included
in the Fleet under section 53102(b) and meets the
requirements of the Department of Defense.
(f) Replacement vessel.--A contractor may replace a vessel
under an operating agreement with another vessel that is
eligible to be included in the Fleet under section 53102(b), if
the Secretary, in conjunction with the Secretary of Defense,
approves replacement of the vessel.
CHAPTER 537. LOANS AND GUARANTEES
Sec. 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 or
Administrator reasonably estimates 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) Administrator.--The term ``Administrator'' means
the Administrator of the Maritime Administration.
[(2)] (3) Construction, reconstruction, and
reconditioning.--The terms ``construction'',
``reconstruction'', and ``reconditioning'' include
designing, inspecting, outfitting, and equipping.
[(3)] (4) 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 or Administrator, 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 reconditioning, using
the original useful life of the vessel,
and from the date of the reconstruction
or reconditioning, using a useful life
of the vessel determined by the
Secretary or Administrator; 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 or Administrator.
[(4)] (5) 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)] (6) Fishery facility.--
(A) In general.--Subject to subparagraph (B),
the term ``fishery facility'' means--
(i) for operations on land--
(I) a structure or
appurtenance thereto designed
for the unloading and receiving
from vessels, the processing,
the holding pending processing,
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 structure 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 structure 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)] (7) 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 principally for commercial use in
the fishing trade or industry is deemed to be a
reference to a fishing vessel.
[(7)] (8) 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
preferred mortgage when filed or recorded under
chapter 313 of this title.
[(8)] (9) 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 or
Administrator 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)] (10) Obligee.--The term ``obligee'' means the
holder of an obligation.
[(10)] (11) Obligor.--The term ``obligor'' means a
party primarily liable for payment of the principal of
or interest on an obligation.
[(11)] (12) 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
electricity 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) Secretary.--The term ``Secretary'' means the
Secretary of Commerce with respect to fishing vessels
and fishery facilities.
[(13)] (14) 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 citizenship 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.
Sec. 53702. General authority
(a) In general.--The Secretary or Administrator, on terms the
Secretary or Administrator 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 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.
Sec. 53703. Application procedures
(a) Time for decision.--
(1) In general.--The Secretary or Administrator 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 or Administrator.
(2) Extension.--On request by an applicant, the
Secretary or Administrator 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 or Administrator.
(b) Certification of review.--The Secretary or Administrator
may not guarantee or make a commitment to guarantee an
obligation under this chapter unless the Secretary or
Administrator 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,
economic, and financial aspects of the loan application, has
been made.
Sec. 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
authorization 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 or
Administrator 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);
(B) determine annually for each risk category
a subsidy rate equivalent to the cost of
obligations in the category, 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 concerning 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 Secretary or Administrator
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 or Administrator 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
Secretary or Administrator may not guarantee
obligations under this chapter after the total
amount available to the Secretary or
Administrator 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;
(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.
* * * * * * *
Sec. 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,
reconstruction, 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
reconditioning 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--
(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 or
Administrator.
(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 obligation 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
construction, reconstruction, reconditioning, or
purchase of a fishery facility.
(7) Financing or refinancing--
(A) the purchase of individual fishing quotas
in accordance with section 303(d)(4) of the
Magnuson-Stevens Fishery Conservation and
Management Act (including the reimbursement of
obligors for expenditures previously made for
such a purchase);
(B) activities that assist in the transition
to reduced fishing capacity; or
(C) technologies or upgrades designed to
improve collection and reporting of fishery-
dependent data, to reduce bycatch, to improve
selectivity or reduce adverse impacts of
fishing gear, or to improve safety.
(b) Non-vessels treated as vessels.--An obligation guaranteed
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 provisions 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.]
(c) Priorities for Certain Vessels.--
(1) Vessels.--In guaranteeing or making a commitment
to guarantee an obligation under this chapter, the
Administrator shall give priority to--
(A) 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
(B) after applying subparagraph (A), a vessel
that is otherwise eligible for a guarantee and
that the Secretary of Defense determines--
(i) is suitable for service as a
naval auxiliary in time of war or
national emergency; and
(ii) meets a shortfall in sealift
capacity or capability.
(2) Time for determination.--The Secretary of Defense
shall determine whether a vessel satisfies paragraph
(1)(B) not later than 30 days after receipt of a
request from the Administrator for such a
determination.
Sec. 53707. Findings related to obligors and operators
(a) Responsible obligor.--The Secretary or Administrator may
not guarantee or make a commitment to guarantee an obligation
under this chapter unless the Secretary or Administrator finds
that the obligor is responsible and has the ability,
experience, financial resources, and other qualifications
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
Transportation] Administrator 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--
(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
Commerce] 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 Secretary or
Administrator shall prescribe regulations concerning
circumstances under which waivers of, or exceptions to,
otherwise applicable regulatory requirements concerning
financial condition can be made. The regulations 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) if the Secretary or Administrator considers
necessary, the waiver shall provide for the imposition
of other requirements on the obligor designed to
compensate for [the increased] any significant increase
in risk associated with the obligor's failure to meet
regulatory requirements applicable to financial
condition.
Sec. 53708. Findings related to economic soundness
(a) By [Secretary of Transportation] Administrator._The
[Secretary of Transportation] Administrator may not guarantee
or make a commitment to guarantee an obligation under this
chapter unless the [Secretary] Administrator finds that the
property or project for which the obligation will be executed
will be economically sound. In making that finding, the
[Secretary] Administrator 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
(6) for inland waterways, the need for technical
improvements, 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
obligation 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 guarantee
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 or Administrator may
make a determination 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 structures, or other risk factors
identified by the Secretary. Any independent analysis conducted
under this subsection shall be performed by a party chosen by
the Secretary.] or financial structures. A third party
independent analysis conducted under this subsection shall be
performed by a private sector expert in assessing such risk
factors who is selected by the Secretary or Administrator.
(e) Additional equity because of increased risks.--
Notwithstanding any other provision of this chapter, the
Secretary or Administrator may make a determination that an
application under this title requires additional equity because
of increased risk factors associated with markets, technology,
[financial structures, or other risk factors identified by the
Secretary.] or financial structures.
Sec. 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 or
Administrator, which determination shall be conclusive)
for the construction, reconstruction, or reconditioning
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
principal amount of an obligation guaranteed under this
chapter may not exceed 75 percent of the actual cost or
depreciated actual cost, as determined by the Secretary
or Administrator, 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 or Administrator;
(B) the vessel is or would have been eligible
for mortgage 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
construction-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-differential 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 or Administrator 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 Secretary
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.
Sec. 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 or Administrator;
(2) provide for interest (exclusive of guarantee fees
and other fees) at a rate not more than the annual rate
on the unpaid principal that the Secretary or
Administrator determines is reasonable, considering the
range of interest rates prevailing in the private
market for similar loans and the risks assumed by the
Secretary or Administrator;
(3) have a maturity date satisfactory to the
Secretary or Administrator, 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 or Administrator; 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 or Administrator, with all
required certificates, including marine
inspection certificates 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 outstanding requirements
and recommendations necessary for class
retention accomplished, unless the Secretary or
Administrator permits a deferment of repairs
necessary to meet these requirements; 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]
Administrator'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
Government against the obligor for payments
under the guarantee will be repossession of the
vessel and assignment of insurance claims; and
(B) the obligor's liability for payments
under the guarantee will be satisfied and
discharged by the surrender of the vessel and
all interest in the vessel to the Government 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]
Administrator 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 assignment of the obligor's
insurance claims to the Government.
(c) Other provisions to protect security interests.--An
obligation guaranteed under this chapter and any related
agreement 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 or
Administrator), liens and releases of liens, payment of taxes,
and other matters that the Secretary or Administrator may
prescribe.
Sec. 53711. Security interest
(a) In general.--The Secretary or Administrator may guarantee
an obligation under this chapter only if the obligor conveys or
agrees to convey to the Secretary or Administrator a security
interest the Secretary or Administrator considers necessary 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 Secretary or Administrator may require
such payments of principal prior to maturity, with respect to
all related obligations, as the Secretary or Administrator
considers necessary to maintain adequate security for the
guarantee.
Sec. 53712. Monitoring financial condition and operations of obligor
(a) In general.--The Secretary or Administrator shall monitor
the financial condition and operations of the obligor on a
regular basis during the term of the guarantee. The Secretary
or Administrator shall document the results of the monitoring
on an annual or quarterly basis depending on the condition of
the obligor. If the Secretary or Administrator determines that
the financial condition of the obligor warrants additional
protections to the Secretary or Administrator, the Secretary or
Administrator shall take appropriate action under subsection
(b). If the Secretary or Administrator determines that the
financial condition of the obligor jeopardizes its continued
ability to perform its responsibilities in connection with the
guarantee of an obligation by the Secretary or Administrator,
the Secretary or Administrator shall make an immediate
determination whether default should take place and whether
further measures described in subsection (b) should be taken to
protect the interests of the Secretary or Administrator while
ensuring that program objectives are met.
(b) Contract provisions to protect Secretary.--The Secretary
or Administrator shall include provisions in a loan agreement
with an obligor that provides additional authority to the
Secretary or Administrator 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 financial condition or the status of the vessel or
shipyard project.] If the Secretary or Administrator has waived
a requirement under section 53707(d) of this title, the loan
agreement shall include requirements for additional payments,
collateral, or equity contributions to meet the waived
requirement upon the occurrence of verifiable conditions
indicating that the obligor's financial condition enables the
obligor to meet the waived requirement.
Sec. 53713. Administrative fees
(a) In general.--The Secretary or Administrator shall charge
and collect from the obligor fees the Secretary or
Administrator considers reasonable for--
(1) investigating an application for a guarantee;
(2) appraising property offered as security for a
guarantee;
(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 or
Administrator 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.
Sec. 53714. Guarantee fees
(a) Regulations.--Subject to this section, the Secretary or
Administrator 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 or Administrator 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 or Administrator
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--
(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 refinancing.
Sec. 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 security for a guarantee under this chapter, the Secretary
or Administrator 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 proceeds 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 or Administrator 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 or Administrator 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 reconditioning 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 agreement, 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 53717 of this title.
The amount shall be credited against amounts due or to
become due from the obligor to the Secretary or
Administrator 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 or Administrator. If the
aggregate actual cost of the vessel has increased since
the Secretary's or Administrator'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 or Administrator, in the aggregate actual
cost of the vessel. This paragraph does not require the
Secretary or Administrator to consent to finance any
increase in actual cost unless the Secretary or
Administrator 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 or Administrator shall, by regulation,
establish a transparent, independent, 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 construction, reconstruction, or reconditioning of
a vessel or vessels before disbursements are made from
the escrow fund. The Secretary or Administrator 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 or Administrator may invest
and reinvest any part of an escrow fund in obligations of the
United States Government 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.
(g) Terms to protect Government.--The escrow agreement shall
contain other terms the Secretary or Administrator considers
necessary to protect fully the interests of the Government.
Sec. 53716. Deposit fund
(a) In general.--There is a deposit fund in the Treasury for
purposes of this section. The Secretary or Administrator, 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 or Administrator 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
or Administrator to be necessary to protect fully the
interests of the Government.
(c) Investment.--The Secretary or Administrator 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 or
Administrator.
(2) Use of income.--Subject to paragraph (3), the
Secretary or Administrator may pay any income earned on
cash of an obligor deposited into the fund in
accordance with the agreement with the obligor under
subsection (b).
(3) Retention against default.--The Secretary or
Administrator 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 or Administrator's
recovery against the obligor in case of a default by
the obligor on an obligation.
Sec. 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]
Administrator._
(1) When not subject to FCRA.--The [Secretary of
Transportation] Administrator 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 liquidating
account as defined in FCRA).
(2) When subject to FCRA.--The [Secretary of
Transportation] Administrator 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].--
(1) When not subject to FCRA.--The Secretary [of
Commerce] 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 obligations 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 Secretary
[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.
Sec. 53718. Annual report to Congress
The [Secretary of Transportation] Administrator 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
guarantees;
(6) a profile of each project approved since the last
report; and
(7) a profile of any defaults since the last report.
* * * * * * *
Sec. 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 or Administrator 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 or Administrator._
(1) In general.--If a demand is made under subsection
(a), the Secretary or Administrator 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.
(2) If no existing default.--The Secretary or
Administrator is not required to make payment under
this subsection if, within the appropriate period under
paragraph (1), the Secretary or Administrator finds
that the obligor was not in default or that the default
was remedied before the demand.
(c) Assumption of rights and obligations before demand.--An
obligee or the obligee's agent may not demand payment under
this section if the Secretary or Administrator, 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 or Administrator's
assumption.
Sec. 53722. Actions by Secretary or Administrator
(a) General authority.--On default under an obligation or
related agreement between the Secretary or Administrator and
the obligor, the Secretary or Administrator, on terms that may
be provided in the obligation or agreement, may--
(1) assume the obligor's rights and duties under the
obligation or agreement, make any payment in default,
and notify the obligee or the obligee's agent of the
default and the Secretary's or Administrator's
assumption; or
(2) notify the obligee or the obligee's agent of the
default.
(b) Demands by obligees.--
(1) Demand.--If the Secretary or Administrator
proceeds under subsection (a)(2), the obligee or the
obligee's agent may demand that the Secretary or
Administrator 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
or Administrator's notice.
(2) Payment.--If a demand is made under paragraph
(1), the Secretary or Administrator 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 or Administrator.
(d) Additional responses.--If there is a default on an
obligation, the Secretary or Administrator 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 appropriate;
(2) minimizes the amount of any loss realized in the
resolution of the guarantee;
(3) ensures adequate competition and fair and
consistent treatment of offerors; and
(4) requires appraisal of assets by an independent
appraiser.
Sec. 53723. Payments by Secretary or Administrator and issuance of
obligations
(a) Cash payment.--Amounts required to be paid by the
Secretary or Administrator under section 53721 or 53722 of this
title shall be paid in cash.
(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 or Administrator may issue obligations to
the Secretary of the Treasury. The Secretary or Administrator,
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 obligations 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 or Administrator
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.
Sec. 53724. Rights to secured property
(a) Acquisition of security rights.--When the Secretary or
Administrator makes a payment on, or assumes, an obligation
under section 53721 or 53722 of this title, the Secretary or
Administrator acquires the rights under the security agreement
with the obligor in the security held by the Secretary or
Administrator to guarantee the obligation.
(b) Use and disposition of secured property.--Notwithstanding
any other law relating to the acquisition, handling, or
disposal of property by the United States Government, the
Secretary or Administrator has the right, in the Secretary's or
Administrator'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 or
Administrator.
Sec. 53725. Actions against obligor
(a) In general.--For a default under a guaranteed obligation
or related agreement, the Secretary or Administrator may take
any action against the obligor or another liable party that the
Secretary or Administrator 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 or Administrator may--
(A) accept a conveyance of title to and
possession of property from the obligor or
another party liable to the Secretary or
Administrator; and
(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 or Administrator 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 or Administrator shall pay the
excess to the obligor.
* * * * * * *
Sec. 53731. Commercial demonstration ocean thermal energy conversion
facilities and plantships
(a) In general.--Under subchapter I of this chapter, the
[Secretary] Administrator 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 expenditures 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 guarantee 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
economic 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
Secretary of Energy, in consultation with the [Secretary,]
Administrator, certifies to the [Secretary] Administrator that,
for the facility or plantship for which the guarantee 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 likelihood 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
appropriated Federal funds, the total principal amount
of that portion of the actual cost or depreciated
actual cost for which the 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 Demonstration Fund shall be operated
in the same manner as the parent account. However--
(A) amounts received by the [Secretary]
Administrator under subchapter I of this
chapter related to guarantees or commitments to
guarantee made under this section shall be
deposited only in the OTEC Demonstration Fund;
and
(B) when obligations issued by the
[Secretary] Administrator under section 53723
of this title related to the OTEC Demonstration
Fund are outstanding, any amount received by
the [Secretary] Administrator 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]
Administrator under section 53723 of this title related
to the OTEC Demonstration Fund.
(4) Liability.--The parent account is not liable for
a guarantee 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] Administrator 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
guaranteed 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).
Sec. 53732. Eligible export vessels
(a) Applicable terms.--The [Secretary] Administrator 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] Administrator
determines are more favorable 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.--
(1) Establishment.--There is an interagency council
to carry out this section.
(2) Composition.--The council is composed of the
following individuals or their designees:
(A) The Secretary of Transportation, who is
the chairman 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
guarantees, 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]
Administrator in establishing terms for loan
guarantees under subsection (a)(2).
(4) Annual report.--Not later than January 31 of each
year, the [Secretary] Administrator shall submit to
Congress a report on activities of the [Secretary]
Administrator 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
[Secretary] Administrator during the preceding
year about applications submitted to the
[Secretary] Administrator during that year for
loan guarantees to construct eligible export
vessels.
(c) Required findings.--
(1) Benefit to shipbuilding industry.--The
[Secretary] Administrator may not guarantee or make a
commitment to guarantee an obligation for an eligible
export vessel unless the [Secretary] Administrator
finds that the construction, reconstruction, or
reconditioning of the vessel will aid in the transition
of United States shipyards to commercial activities or
will preserve shipbuilding assets that would be
essential in time of war or national emergency.
(2) Priority of documented vessels.--The [Secretary]
Administrator may not make a commitment to guarantee an
obligation for an eligible export vessel unless the
[Secretary] Administrator determines that making the
commitment will not result in denial of an economically
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]
Administrator has sole discretion in making the
determination. In making the determination, the
[Secretary] Administrator 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 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]
Administrator 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]
Administrator 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] Administrator
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
of Defense 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] Administrator may
not make a loan guarantee disapproved by the Secretary
of Defense under this subsection.
(f) Expiration of authority.--The [Secretary] Administrator
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.
Sec. 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, automated 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 customers and suppliers.
(2) General shipyard facility.--The term ``general
shipyard facility'' means--
(A) for operations on land--
(i) a structure or appurtenance
thereto designed for the construction,
reconstruction, repair, rehabilitation,
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 appurtenance; 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 drydock, 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] Administrator 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 technology 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
percent of the actual cost of the advanced shipbuilding
technology or modern shipbuilding technology.
(e) Transfer of amounts.--The [Secretary] Administrator 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.
Sec. 53734. Replacement of vessels because of changes in operating
standards
(a) General authority.--Notwithstanding any other provision
of this chapter, the Secretary or Administrator, on terms the
Secretary or Administrator 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 vessels in the trades in
which the applicant operated vessels before the change;
(3) the applicant is presently engaged in
transporting cargoes 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 or Administrator 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 or Administrator 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 construction or reconstruction of the vessel.
The Secretary or Administrator may not establish a
percentage under this paragraph that is to be applied
uniformly to all guarantees or commitments to guarantee
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 or Administrator
shall require by regulation that an applicant under this
section provide adequate security against default.
(e) Guarantee fees.--The Secretary or Administrator 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.
PART D. PROMOTIONAL PROGRAMS
CHAPTER 551. COASTWISE TRADE
Sec. 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); or
[(3) Canton Island until the President declares by
proclamation that the coastwise laws apply to Canton
Island; or]
[(4)] (3) the Virgin Islands until the President
declares by proclamation that the coastwise laws apply
to the Virgin Islands.
* * * * * * *
Sec. 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 corporation wholly owned by citizens
of the United States under section 50501(a)-(c) of this
title.
(2) Standards for incineration equipment.--
Incineration 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 examination 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 current
condition of the hull and superstructure. The Coast
Guard shall allow the substitution of fittings,
material, apparatus, 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.]
Secretary of Homeland Security.
(c) Effective date.--Subsection (a) is not effective until an
appropriate vessel has been built and documented under chapter
121 of this title.
* * * * * * *
Sec. 55110. Transportation of valueless material or 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.
* * * * * * *
PART F. GOVERNMENT-OWNED MERCHANT VESSELS
CHAPTER 575. CONSTRUCTION, CHARTER, AND SALE OF VESSELS
* * * * * * *
Sec. 57533. Vessel chartering authority
The Secretary of Transportation may enter into contracts or
other agreements on behalf of the United States to purchase,
charter, operate, or otherwise acquire the use of any vessels
documented under chapter 121 of this title and any other
related real or personal property. The Secretary is authorized
to use this authority as the Secretary deems appropriate.
SUBTITLE VI. CLEARANCE, TONNAGE TAXES, AND DUTIES
CHAPTER 603. TONNAGE TAXES AND LIGHT MONEY
Sec. 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)]
4.5 cents per ton, not to exceed a total of 22.5 cents per ton
per year, for fiscal years 2006 through 2010, and 2 cents per
ton, not to exceed a total of 10 cents per ton per year, for
each fiscal year thereafter, 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)] 13.5 cents per ton, not to exceed a total of 67.5 cents
per ton per year, for fiscal years 2006 through 2010, and 6
cents per ton, not to exceed a total of 30 cents per ton per
year, for each fiscal year thereafter, 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.
SUBTITLE VII. SECURITY AND DRUG ENFORCEMENT
CHAPTER 703. MARITIME SECURITY
Sec. 70306. Report on terrorist threats
(a) Content.--[Not later than February 28 of each year, the
Secretary shall submit a report] The Secretary shall submit an
annual 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 activities
undertaken under title I of the Maritime Transportation
Security 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
Committee on International Relations and the Committee on
Transportation 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 information in the report shall be
submitted separately as an addendum.
CHAPTER 705. MARITIME DRUG LAW ENFORCEMENT
Sec. 70502. Definitions
(a) Application of other definitions.--The definitions in
section 102 of the Comprehensive Drug Abuse Prevention and
Control Act of 1970 (21 U.S.C. 802) apply to this chapter.
(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 enforcement 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 Secretary of State or the Secretary's
designee.
(d) Vessel without nationality.--
(1) In general.--In this chapter, the term ``vessel
without nationality'' includes--
(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 Secretary of State
or the Secretary's designee.]
(2) Response to claim of registry.--The response of a
foreign nation to a claim of registry under paragraph
(1)(A) or (C) may be made by radio, telephone, or
similar oral or electronic means, and is proved
conclusively by certification of the Secretary of State
or the Secretary's designee.
(e) Claim of nationality or registry.--A claim of nationality
or registry under this section includes only--
(1) possession on board the vessel and production of
documents 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.
MERCHANT SHIP SALES ACT OF 1946
SEC. 11. NATIONAL DEFENSE RESERVE FLEET.
[50 U.S.C. App. 1744]
(a) Fleet components.--The Secretary of Transportation shall
maintain a National Defense Reserve Fleet, including any vessel
assigned by the Secretary to the Ready Reserve Force component
of the fleet, consisting of those vessels owned or acquired by
the United States Government that the Secretary of
Transportation, after consultation with the Secretary of the
Navy, determines are of value for national defense purposes and
that the Secretary of Transportation decides to place and
maintain in the fleet.
(b) Permitted uses.--Except as otherwise provided by law, a
vessel in the fleet may be used--
(1) for an account of an agency of the United States
Government in a period during which vessels may be
requisitioned under section 902 of the Merchant Marine
Act, 1936 (46 App. U.S.C. 1242); or
(2) on the request of the Secretary of Defense, and
in accordance with memoranda of agreement between the
Secretary of Transportation and the Secretary of
Defense, for--
(A) testing for readiness and suitability for
mission performance;
(B) defense sealift functions for which other
sealift assets are not reasonably available;
and
(C) support of the deployment of the United
States armed forces in a military contingency,
for military contingency operations, or for
civil contingency operations upon orders from
the National Command Authority;
(3) for otherwise lawfully permitted storage or
transportation of non-defense-related cargo as directed
by the Secretary of Transportation with the concurrence
of the Secretary of Defense; [or]
(4) for training purposes to the extent authorized by
the Secretary of Transportation with the concurrence of
the Secretary of [Defense.] Defense; or
(5) on a reimbursable basis, for charter to the
government of any State, locality, or Territory of the
United States, except that the prior consent of the
Secretary of Defense for such use shall be required
with respect to any vessel in the Ready Reserve Force
or in the National Defense Reserve Fleet which is
maintained in a retention status for the Department of
Defense.
(c) Ready Reserve Force management.--
(1) Minimum requirements.--To ensure the readiness of
vessels in the Ready Reserve Force component of the
National Defense Reserve Fleet, the Secretary of
Transportation shall, at a minimum--
(A) maintain all of the vessels in a manner
that will enable each vessel to be activated
within a period specified in plans for
mobilization of the vessels;
[(B) activate and conduct sea trials on each
vessel at least once every twenty-four months;]
(B) activate and conduct sea trials on each
vessel at least once every 30 months;
(C) maintain in an enhanced activation status
those vessels that are scheduled to be
activated within 5 days;
(D) locate those vessels that are scheduled
to be activated within 5 days near embarkation
ports specified for those vessels; and
(E) notwithstanding section 2109 of title 46,
United States Code, have each vessel inspected
by the Secretary of the department in which the
Coast Guard is operating to determine if the
vessel meets the safety standards that would
apply under part B of subtitle II of that title
if the vessel were not a public vessel.
(2) Vessel managers.--
(A) Eligibility for contract.--A person,
including a shipyard, is eligible for a
contract for the management of a vessel in the
Ready Reserve Force if the Secretary
determines, at a minimum, that the person has--
(i) experience in the operation of
commercial-type vessels or public
vessels owned by the United States
Government; and
(ii) the management capability
necessary to operate, maintain, and
activate the vessel at a reasonable
price.
(B) Contract requirement.--The Secretary of
Transportation shall include in each contract
for the management of a vessel in the Ready
Reserve Force a requirement that each seaman
who performs services on any vessel covered by
the contract hold the license or merchant
mariner's document that would be required under
chapter 71 or chapter 73 of title 46, United
States Code, for a seaman performing that
service while operating the vessel if the
vessel were not a public vessel.
(d) Applicability of limitations on overhaul, repair, and
maintenance in foreign shipyards.--
(1) Application of limitation.--The provisions of
section 7310 of title 10, United States Code, shall
apply to vessels specified in subsection (b), and to
the Secretary of Transportation with respect to those
vessels, in the same manner as those provisions apply
to vessels specified in subsection (b) of such section,
and to the Secretary of the Navy, respectively.
(2) Covered vessels.--Vessels specified in this
paragraph are vessels maintained by the Secretary of
Transportation in support of the Department of Defense,
including any vessel assigned by the Secretary of
Transportation to the Ready Reserve Force that is owned
by the United States.
(e) Exemption of Fleet from 46 U.S.C. 3703a.--Vessels in the
National Defense Reserve Fleet are exempt from the provisions
of section 3703a of title 46, United States Code.
CHAPTER 541--MISCELLANEOUS
Sec.
54101. Assistance for small shipyards and maritime communities.
Sec. 54101. Assistance for small shipyards and maritime communities
(a) Establishment of Program.--Subject to the availability of
appropriations, the Administrator of the Maritime
Administration shall establish a program to provide assistance
to State and local governments--
(1) to provide assistance in the form of grants,
loans, and loan guarantees to small shipyards for
capital improvements; and
(2) for maritime training programs in communities
whose economies are substantially related to the
maritime industry.
(b) Awards.--In providing assistance under the program, the
Administrator shall--
(1) take into account--
(A) the economic circumstances and conditions
of maritime communities; and
(B) the local, State, and regional economy in
which the communities are located; and
(2) strongly encourage State, local, and regional
efforts to promote economic development and training
that will enhance the economic viability of and quality
of life in maritime communities.
(c) Use of Funds.--Assistance provided under this section may
be used--
(1) to make capital and related improvements in small
shipyards located in or near maritime communities;
(2) to encourage, assist in, or provide training for
residents of maritime communities that will enhance the
economic viability of those communities; and
(3) for such other purposes as the Administrator
determines to be consistent with and supplemental to
such activities.
(d) Prohibited Uses.--Grants awarded under this section may
not be used to construct buildings or other physical facilities
or to acquire land unless such use is specifically approved by
the Administrator in support of subsection (c)(3).
(e) Matching Requirements.--
(1) Federal funding.--Except as provided in paragraph
(2), Federal funds for any eligible project under this
section shall not exceed 75 percent of the total cost
of such project.
(2) Exceptions.--
(A) Small projects.--Paragraph (1) shall not
apply to grants under this section for stand
alone projects costing not more than $25,000.
The amount under this subparagraph shall be
indexed to the consumer price index and
modified each fiscal year after the annual
publication of the consumer price index.
(B) Reduction in matching requirement.--If
the Administrator determines that a proposed
project merits support and cannot be undertaken
without a higher percentage of Federal
financial assistance, the Administrator may
award a grant for such project with a lesser
matching requirement than is described in
paragraph (1).
(f) Application.--
(1) In general.--The Administrator shall determine
who, as an eligible applicant, may submit an
application, at such time, in such form, and containing
such information and assurances as the Administrator
may require.
(2) Minimum standards for payment or reimbursement.--
Each application submitted under paragraph (1) shall
include--
(A) a comprehensive description of--
(i) the need for the project;
(ii) the methodology for implementing
the project; and
(iii) any existing programs or
arrangements that can be used to
supplement or leverage assistance under
the program.
(3) Procedural safeguards.--The Administrator, in
consultation with the Office of the Inspector General,
shall issue guidelines to establish appropriate
accounting, reporting, and review procedures to ensure
that--
(A) grant funds are used for the purposes for
which they were made available;
(B) grantees have properly accounted for all
expenditures of grant funds; and
(C) grant funds not used for such purposes
and amounts not obligated or expended are
returned.
(4) Project approval required.--The Administrator may
not award a grant under this section unless the
Administrator determines that--
(A) sufficient funding is available to meet
the matching requirements of subsection (e);
(B) the project will be completed without
unreasonable delay; and
(C) the recipient has authority to carry out
the proposed project.
(g) Audits and Examinations.--All grantees under this section
shall maintain such records as the Administrator may require
and make such records available for review and audit by the
Administrator.
(h) Small Shipyard Defined.--In this section, the term
``small shipyard'' means a shipyard that--
(1) is a small business concern (within the meaning
of section 3 of the Small Business Act (15 U.S.C.
632)); and
(2) does not have more than 600 employees.
(i) Authorization of Appropriations.--There are authorized to
be appropriated to the Administrator of the Maritime
Administration for each of fiscal years 2006 through 2010 to
carry out this section--
(1) $5,000,000 for training grants; and
(2) $25,000,000 for capital and related improvement
grants.
Public Law 109-304
SEC. 9. SUBTITLE VI OF TITLE 46.
[(a) Redesignation.--Title 46, United States Code, is amended
by redesignating subtitle VI as subtitle VII.]
* * * * * * *
SEC. 15. ADDITIONAL AMENDMENTS TO TITLE 46.
Title 46, United States Code, is amended as follows:
* * * * * * *
(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.] 46 U.S.C. App. 91)'' and substitute
``Secretary of Homeland Security shall withhold or
revoke the clearance required by section 60105 of this
title''.
* * * * * * *
[(21) In section 6101, redesignate the second
subsection (g) and subsection (h) as subsections (h)
and (i), respectively.]
* * * * * * *
(30) In section 31325(b)(3)(B), strike ``section 9 or
37 of the [Shipping Act, 1936] Shipping Act, 1916 (46
App. U.S.C. 808, 835)'' and substitute ``section 56101
or 56102 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
``section 60105 of this title''.
* * * * * * *
SEC. 16. RECREATIONAL BOATING SAFETY TECHNICAL AMENDMENTS.
* * * * * * *
(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''.
[(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''.]
* * * * * * *
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:
* * * * * * *
Act of June 29, 1936
[1111]1113.........................................................1279f
[1112]1114.........................................................1279g
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