[Congressional Bills 103th Congress] [From the U.S. Government Publishing Office] [H.R. 4003 Referred in Senate (RFS)] 103d CONGRESS 2d Session H.R. 4003 _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES August 3 (legislative day, July 20), 1994 Received; read twice and referred to the Committee on Commerce, Science, and Transportation _______________________________________________________________________ AN ACT To authorize appropriations for fiscal year 1995 for certain maritime programs of the Department of Transportation, to amend the Merchant Marine Act, 1936, as amended, to revitalize the United States-flag merchant marine, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Maritime Security and Competitiveness Act of 1994''. TITLE I--MARITIME SECURITY AND COMPETITIVENESS SEC. 101. PURPOSE OF THE MERCHANT MARINE ACT, 1936. Section 101 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1101) is amended to read as follows: ``SEC. 101. FOSTERING DEVELOPMENT AND MAINTENANCE OF MERCHANT MARINE. ``The Secretary of Transportation shall carry out this Act in a manner that ensures the existence of an operating fleet of United States documented vessels that is-- ``(1) sufficient to carry the domestic water-borne commerce of the United States and a substantial portion of the water- borne export and import foreign commerce of the United States and to provide shipping service essential for maintaining the flow of such domestic and foreign water-borne commerce at all times; ``(2) adequate to serve as a naval auxiliary in time of war or national emergency; ``(3) owned and operated by citizens of the United States, to the extent practicable; ``(4) composed of the best-equipped, safest, and most modern vessels; ``(5) manned with the best trained and efficient personnel who are citizens of the United States; and ``(6) supplemented by modern and efficient United States facilities for shipbuilding and ship repair.''. SEC. 102. MARITIME SECURITY FLEET PROGRAM. (a) The Merchant Marine Act, 1936 (46 App. U.S.C. 1101 et seq.) is amended by inserting after title III the following new title: ``TITLE IV--MARITIME SECURITY FLEET PROGRAM ``SEC. 401. ESTABLISHMENT OF MARITIME SECURITY FLEET. ``The Secretary of Transportation shall establish a fleet of active commercial vessels to enhance sealift capabilities and maintain a presence in international commercial shipping of United States documented vessels. The fleet shall be known as the `Maritime Security Fleet'. ``SEC. 402. COMPOSITION OF FLEET. ``The Fleet shall consist of privately owned United States documented vessels for which there are in effect operating agreements. ``SEC. 403. VESSELS ELIGIBLE FOR ENROLLMENT IN FLEET. ``(a) In General.--A vessel is eligible to be enrolled in the Fleet if the Secretary decides, in accordance with this section, that it is eligible. The Secretary may decide whether a vessel is eligible to be enrolled in the Fleet only pursuant to an eligibility decision application submitted to the Secretary by the owner or operator of the vessel. The Secretary shall make such a decision by not later than 90 days after the date of submittal of an eligibility decision application for the vessel by the owner or operator of the vessel. ``(b) Vessel Eligibility, Generally.--Except as provided in subsection (c), the Secretary shall decide that a vessel is eligible to be enrolled in the Fleet if-- ``(1) the person that will be the contractor with respect to an operating agreement for the vessel agrees to enter into an operating agreement with the Secretary for the vessel under section 404; ``(2) the person that will be a contractor with respect to an operating agreement for the vessel is a citizen of the United States; ``(3)(A) the vessel is a United States documented vessel on May 19, 1993; ``(B) the vessel is-- ``(i) in existence on May 19, 1993; ``(ii) a United States documented vessel after May 19, 1993; and ``(iii) not more than 10 years of age on the date of that documentation; ``(C) the vessel is built and, if rebuilt, rebuilt in a United States shipyard; ``(D) the vessel is built in a shipyard that is not a foreign subsidized shipyard under a contract entered into before May 19, 1993; ``(E)(i) the vessel is built in a foreign shipyard under a contract entered into on or before May 19, 1993; and ``(ii) the owner has contracted to build another vessel for enrollment in the Fleet in a United States shipyard that will be delivered within 30 months after the effective date of an operating agreement for the vessel referred to in clause (i), or the Secretary finds and certifies in writing that a United States shipyard cannot sell a vessel to the owner at the world price due to the unavailability of series transition payments under title XIV to build that vessel; or ``(F)(i) the vessel is built under a contract entered into after May 19, 1993; ``(ii) the proposed owner of the vessel solicited nationwide bids for at least 6 months to build the vessel in a United States shipyard; ``(iii) the Secretary finds and certifies in writing that a United States shipyard cannot sell a vessel to the proposed owner at the world price due to the unavailability of series transition payments under title XIV to build that vessel; ``(iv) the vessel is delivered from the foreign shipyard within 30 months after the Secretary's certification under clause (iii); and ``(v) the vessel is substantially the same type and design as the vessel described in the solicitation made under clause (ii); and ``(4) the vessel is self-propelled and is-- ``(A) a container vessel with a capacity of at least 750 Twenty-foot Equivalent Units; ``(B) a roll-on/roll-off vessel with a carrying capacity of at least 80,000 square feet or 500 Twenty- foot Equivalent Units; ``(C) a LASH vessel with a barge capacity of at least 75 barges; ``(D) a vessel subject to a contract under title VI on May 19, 1993; or ``(E) any other type of vessel that is determined by the Secretary to be suitable for use by the United States for national defense or military purposes in time of war or national emergency. ``(c) Determinations of Eligibility.-- ``(1) Determinations required.--The Secretary shall make determinations under subsection (b) for each vessel for which an eligibility decision application is submitted under this section. ``(2) Determination regarding certification.--The Secretary shall-- ``(A) make the finding and certification under paragraph (3)(E)(ii) for a vessel, or determine not to, by not later than 60 days after the date of receipt of an eligibility decision application for the vessel; and ``(B) make the finding and certification under paragraph (3)(F)(iii) for a vessel, or determine not to, by not later than 60 days after the closing date of the solicitation pursuant to paragraph (3)(F)(ii) for the vessel. ``(3) Written explanation.--The Secretary shall provide to the person that submits an eligibility application for a vessel a written explanation of any decision that the vessel is not eligible for enrollment in the Fleet. ``(d) List of Eligible Vessels.-- ``(1) In general.--The Secretary shall maintain a list of vessels that the Secretary decides in accordance with this section are eligible to be enrolled in the Fleet. ``(2) Removal of vessels from list.--The Secretary shall remove a vessel from the list maintained under this subsection, and the vessel shall not be an eligible vessel for purposes of this title-- ``(A) at any time that the conditions for eligibility under subsection (b) are not fulfilled for the vessel; ``(B) if the status of the person who submitted an eligibility decision application for the vessel, as owner or operator of the vessel, changes and after that change-- ``(i) the owner or operator of the vessel fails to submit a new eligibility decision application for the vessel; or ``(ii) such an application is not approved by the Secretary; or ``(C) if the vessel carries as cargo any item that-- ``(i) is sold or shipped to the United States; ``(ii) is not made in the United States; and ``(iii) the owner or operator of the vessel knows has had fruadulently affixed to it a label bearing a `Made in America' inscription, or any inscription with the same meaning. ``SEC. 404. OPERATING AGREEMENTS, GENERALLY. ``(a) Requirement for Enrollment of Vessels.--A vessel may be enrolled in the Fleet only if it is an eligible vessel for which the owner or operator of the vessel applies for and enters into an operating agreement with the Secretary under this section. ``(b) Priority for Awarding Agreements.--Subject to the availability of appropriations, the Secretary shall enter into operating agreements according to the following priority: ``(1) Vessels owned by citizens.-- ``(A) Priority.--First, for any vessel that is-- ``(i) owned and operated by persons who are citizens of the United States under section 2 of the Shipping Act, 1916; or ``(ii) less than 5 years of age and owned and operated by a corporation that is-- ``(I) eligible to document a vessel under chapter 121 of title 46, United States Code; and ``(II) affiliated with a corporation operating or managing other United States documented vessels for the Secretary of Defense or chartering other vessels to the Secretary of Defense. ``(B) Limitation on number of operating agreements.--The total number of operating agreements that may be entered into by a person under the priority in subparagraph (A)-- ``(i) for vessels described in subparagraph (A)(i), may not exceed the sum of-- ``(I) the number of United States documented vessels the person operated in the foreign commerce of the United States (except mixed coastwise and foreign commerce) on January 1, 1993; and ``(II) the number of United States documented vessels the person chartered to the Secretary of Defense on that date; and ``(ii) for vessels described in subparagraph (A)(ii), may not exceed 4 vessels. ``(C) Treatment of related parties.--For purposes of subparagraph (B), a related party with respect to a person shall be treated as the person. ``(2) Other vessels owned by citizens and government contractors.--To the extent that amounts are available after applying paragraph (1), any vessel that is-- ``(A) owned and operated by-- ``(i) citizens of the United States under section 2 of the Shipping Act, 1916, that have not been awarded an operating agreement under the priority established under paragraph (1); or ``(ii)(I) eligible to document a vessel under chapter 121 of title 46, United States Code; and ``(II) affiliated with a corporation operating or managing other United States documented vessels for the Secretary of Defense or chartering other vessels to the Secretary of Defense; and ``(B) on the list maintained under section 403(d). ``(3) Other vessels.--To the extent that amounts are available after applying paragraphs (1) and (2), any vessel that is-- ``(A) owned and operated by a person that is eligible to document a vessel under chapter 121 of title 46, United States Code; and ``(B) on the list maintained under section 403(d). ``(c) Award of Agreements.-- ``(1) In general.--The Secretary shall award operating agreements within each priority under subsection (b) (1), (2), and (3) under regulations prescribed by the Secretary. ``(2) Number of agreements awarded.--Regulations under paragraph (1) shall provide that if appropriated amounts are not sufficient for operating agreements for all vessels within a priority under subsection (b) (1), (2), or (3), the Secretary shall award to each person submitting a request a number of operating agreements that bears approximately the same ratio to the total number of vessels in the priority, as the amount of appropriations available for operating agreements for vessels in the priority bears to the amount of appropriations necessary for operating agreements for all vessels in the priority. ``(3) Treatment of related parties.--For purposes of paragraph (2), a related party with respect to a person shall be treated as the person. ``(d) Time Limit for Decision on Entering Operating Agreement.--The Secretary shall enter an operating agreement for a vessel within 90 days after making the decision that the vessel is eligible to be enrolled in the Fleet under section 403(a). ``(e) Effective Date of Operating Agreement.--The effective date of an operating agreement may not be later than the later of-- ``(1) the date the vessel covered by the agreement enters into the trade required under section 405(a)(1)(A); ``(2) the date the vessel covered by the agreement is withdrawn from an operating differential subsidy contract under title VI; ``(3) the date of termination of an operating differential subsidy contract under title VI that applies to the vessel; or ``(4) the date of the expiration or termination of a charter of the vessel to the United States Government that was entered into before the date of the enactment of the Maritime Security and Competitiveness Act of 1993. ``(f) Expiration of Offers for Agreements.--Unless extended by the Secretary, an offer by the Secretary to enter into an operating agreement under this section expires 120 days after the date the offer is made. ``(g) Length of Agreements.--An operating agreement is effective for 10 years from the effective date of the agreement. ``(h) Repayment Requirements.-- ``(1) Noncompliance.--A contractor that fails to comply with the terms of an operating agreement shall be liable to the United States Government for all amounts received by the contractor as payments for the vessel under this title with respect to the period of that noncompliance, and for interest on those amounts determined under paragraph (3). ``(2) Failure to operate replacement vessel.--A contractor under an operating agreement that covers a vessel that is 25 or more years of age and that fails to replace the vessel as provided in section 405(a)(3) (A) or (B) shall be liable to the United States Government for all amounts received by the contractor as payments for the vessel under this title with respect to periods after the date the vessel becomes 25 years of age, and for interest on those amounts determined under paragraph (3). ``(3) Determination of interest.--Interest under paragraphs (1) and (2) shall be at an annual rate equal to 125 percent of the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for auctions of 3 month United States Treasury bills settled during the quarter preceding the date of the failure to comply or the failure to replace, respectively. ``(i) Prohibition on Agreements for Certain Vessels.--The Secretary may not enter into an operating agreement for a vessel that is owned or operated by a person that was a contractor for the vessel under an operating agreement terminated under section 405(a)(10), before the end of the term of the agreement that was terminated. ``(j) Binding Obligation of Government.--An operating agreement constitutes a contractual obligation of the United States Government to pay the amounts provided for under that agreement. ``SEC. 405. TERMS OF OPERATING AGREEMENTS. ``(a) Operating Agreement Requirements.--An operating agreement shall, during the effective period of the agreement, provide the following: ``(1) Operation and documentation.--The vessel covered by the operating agreement-- ``(A) shall be operated in the foreign trade or domestic trade allowed under a registry endorsement for the vessel issued under section 12105 of title 46, United States Code; ``(B) may not be operated in the coastwise trade of the United States or in mixed coastwise and foreign trade, except for coastwise trade allowed under a registry endorsement issued for the vessel under section 12105 of title 46, United States Code; and ``(C) shall be documented under chapter 121 of title 46, United States Code. ``(2) Annual payments.-- ``(A) In general.--The Secretary shall pay the contractor, in accordance with this subsection, the following amounts for each fiscal year in which the vessel is operated in accordance with the agreement: ``(i) For fiscal year 1994, $2,300,000. ``(ii) For each fiscal year thereafter, $2,100,000. ``(B) Limitation.--The Secretary shall not pay any amount pursuant to this paragraph for any day in which the vessel is-- ``(i) under a charter to the United States Government that was entered into before the date of the enactment of the Maritime Security and Competitiveness Act of 1993; or ``(ii) covered by an operating differential subsidy contract under title VI. ``(3) Termination based on age of vessel.-- ``(A) In general.--Except as provided in subparagraph (B), the operating agreement shall terminate on the later of-- ``(i) the date the vessel covered by the agreement is 25 years of age, or ``(ii) the date the vessel covered by the agreement is 30 years of age, in the case of an agreement that covers a vessel that is repowered in a United States shipyard after the effective date of the operating agreement and before the vessel is 25 years of age. ``(B) Exception.--The operating agreement shall not terminate under subparagraph (A) if the contractor agrees to acquire a replacement for the vessel from among vessels on the list maintained under section 403(d), and-- ``(i) in the case of a vessel to be replaced with a new vessel, the contractor enters into a binding contract with a shipyard that requires the shipyard to deliver the replacement vessel by not later than 30 months after the later of the date the operating agreement is entered into or the date the operating agreement would otherwise terminate under subparagraph (A); or ``(ii) in the case of a vessel to be replaced with an existing vessel, the contractor acquires the replacement vessel from among vessels on the list maintained under section 403(d), by not later than 12 months after the later of the date the operating agreement is entered into or the date the operating agreement would otherwise expire under subparagraph (A). ``(4) Availability of vessel.-- ``(A) In general.--On a request of the President during time of war or national emergency or when considered by the President, acting through the Secretary in consultation with the Secretary of Defense, to be necessary in the interest of national security, and subject to subparagraph (B), the contractor as soon as practicable shall, as specified by the Secretary-- ``(i) make the vessel covered by the agreement available to the Secretary under a time charter; or ``(ii) provide space on the vessel covered by the agreement to the Secretary on a guaranteed basis. ``(B) Condition for charter.--The Secretary shall allow a contractor to comply with this paragraph by providing space on a vessel under subparagraph (A)(ii) unless the Secretary determines that it is necessary in the interest of national security that the contractor make the vessel available under a time charter. ``(5) Delivery of vessel.--The contractor shall deliver a vessel to the Secretary pursuant to a time charter under paragraph (4)(A)(i), as specified in the request for the vessel-- ``(A) at the first port in the United States the vessel is scheduled to call after the date of receipt of the request; ``(B) at the port in the United States to which the vessel is nearest on the date of receipt of the request; or ``(C) in any other reasonable manner authorized by the agreement and specified in the request. ``(6) Delivery costs.--In addition to amounts paid under paragraph (2), the Secretary shall reimburse the contractor for costs incurred by the contractor in delivering the vessel covered by the agreement to the Secretary in accordance with the agreement. ``(7) Compensation.--In addition to amounts paid under paragraph (2), the Secretary shall pay the contractor, as provided in the operating agreement, reasonable compensation at reasonable commercial rates for the period of time the vessel is chartered or the contractor provides space on the vessel under paragraph (4). ``(8) Required operation.-- ``(A) In general.--A vessel covered by the operating agreement shall be operated in the trade required under paragraph (1), and under conditions eligible for payment under this title, for at least 320 days in a fiscal year, including days during which the vessel is dry-docked, surveyed, inspected, or repaired. ``(B) Reduction in payments.--If a vessel operates in the trade required under paragraph (1), and under conditions eligible for payment under this title, for less than the time required under subparagraph (A), the payments required under paragraph (2) shall be reduced on a pro-rata basis to reflect the lesser time in that operation. ``(9) Substitution of vessels authorized.--The contractor may substitute for the vessel covered by the agreement another vessel on the list maintained under section 403(d). ``(10) Other termination.--The operating agreement shall terminate if-- ``(A) in the case of a vessel that transports less than 12,000 tons of bulk cargo under the agreement-- ``(i) the vessel covered by the agreement is not operated under an operating agreement for one year; and ``(ii) a substitute for that vessel is not operated under the agreement during that year; or ``(B) the contractor notifies the Secretary that the contractor intends to terminate the agreement, by not later than 60 days before the effective date of the termination. ``(b) Payments.-- ``(1) In general.--The amount required to be paid by the Secretary each year to a contractor under an operating agreement pursuant to subsection (a)(2)-- ``(A) shall be paid at a pro rated amount at the beginning of each month in equal installments; and ``(B) except as provided in paragraph (2), may not be reduced by reason of operation of the vessel covered by the agreement to carry civilian or military preference cargoes under-- ``(i) section 901(a), 901(b), or 901b; ``(ii) section 2631 of title 10, United States Code; or ``(iii) the Act of March 26, 1934 (48 Stat. 500). ``(2) Reduction for preference cargo.--A contractor with respect to a vessel may not receive any payment under this title for any day in which the vessel is engaged in transporting more than 12,000 tons of preference cargo described in paragraph (1)(B) that is bulk cargo (as defined in section 3 of the Shipping Act of 1984). ``(c) Redelivery of Vessels.--The Secretary shall, upon the termination of the need for which a vessel is delivered under subsection (a)(4), return the vessel to the contractor-- ``(1) at a place that is mutually agreed upon by the Secretary of Defense and the contractor; and ``(2) in the condition in which it was delivered to the Secretary, excluding normal wear and tear. ``(d) Transfer of Operating Agreements.--A contractor under an operating agreement may transfer the agreement (including all rights and obligations under the agreement) to any other person that is a citizen of the United States, after notification of the Secretary in accordance with regulations prescribed by the Secretary, unless the transfer is disapproved by the Secretary within 90 days after the date of that notification. A transfer shall not be effective before the end of that 90-day period. A person to whom an agreement is transferred may receive payments from the Secretary under the agreement only if the vessel to be covered by the agreement after the transfer is on the list maintained under section 403(d). ``SEC. 406. NONCONTIGUOUS TRADE RESTRICTIONS. ``(a) Prohibition.-- ``(1) In general.--Except as provided in this section, a contractor may not receive any payment under this title-- ``(A) if the contractor or a related party with respect to the contractor, directly or indirectly owns, charters, or operates a vessel engaged in the transportation of cargo in noncontiguous trade other than in accordance with a waiver under subsection (b), (c), or (d); or ``(B) if the contractor is authorized to operate a vessel in noncontiguous trade under such a waiver, and there is a-- ``(i) material change in the domestic ports served by the contractor from the ports permitted to be served under the waiver; ``(ii) material increase in the annual number or the frequency of sailings by the contractor from the number or frequency permitted under the waiver; or ``(iii) material increase in the annual volume of cargo carried or annual capacity utilized by the contractor from the annual volume of cargo or annual capacity permitted under the waiver. ``(2) Limitations on prohibition.--Paragraph (1) applies to a contractor only in the years specified for payments under the operating agreement entered into by the contractor. ``(b) General Waiver Authority.-- ``(1) In general.--Except as provided in subsection (c), the Secretary may waive, in writing, the application of subsection (a) to a contractor pursuant to an application submitted in accordance with this subsection, unless the Secretary finds that-- ``(A) the waiver would result in unfair competition to any person that operates vessels as a carrier of cargo in a service exclusively in the noncontiguous trade for which the waiver is applied; ``(B) subject to paragraph (6), existing service in that noncontiguous trade is adequate; or ``(C) the waiver will result in prejudice to the objects or policy of this title or Act. ``(2) Terms of waiver.--Any waiver granted by the Secretary under this subsection shall state-- ``(A) the domestic ports permitted to be served; ``(B) the annual number or frequency of sailings that may be provided; and ``(C)(i) the annual volume of cargo permitted, ``(ii) for containerized or trailer service, the annual 40-foot equivalent unit shipboard container and trailer or vehicle or general cargo capacity permitted, or ``(iii) for tug and barge service, the annual barge house cubic foot capacity and the annual barge deck general cargo capacity, or 40-foot equivalent unit container, trailer, or vehicle capacity, permitted. ``(3) Applications for waivers.--An application for a waiver under this subsection may be submitted by a contractor and shall describe, as applicable, the nature and scope of-- ``(A) the service proposed to be conducted in a noncontiguous trade under the waiver; or ``(B) any proposed material change or increase in a service in a noncontiguous trade permitted under a previous waiver. ``(4) Action on application and hearing.-- ``(A) Notice and proceeding.--Within 30 days after receipt of an application for a waiver under this subsection, the Secretary shall-- ``(i) publish a notice of the application; and ``(ii) begin a proceeding on the application under section 554 of title 5, United States Code, to receive-- ``(I) evidence of the nature, quantity, and quality of the existing service in the noncontiguous trade for which the waiver is applied; ``(II) a description of the proposed service or proposed material change or increase in a previously permitted service; ``(III) the projected effect of the proposed service or proposed material change or increase in existing service; and ``(IV) recommendations on conditions that should be contained in any waiver for the proposed service or material change or increase. ``(B) Intervention.--An applicant for a waiver under this subsection, and any person that operates cargo vessels in the noncontiguous trade for which a waiver is applied and that has any interest in the application, may intervene in the proceedings on the application. ``(C) Hearing.--Before deciding whether to grant a waiver under this subsection, the Secretary shall hold a public hearing in an expeditious manner, reasonable notice of which shall be published. ``(5) Decision.--The Secretary shall complete all proceedings and hearings on an application under this subsection and issue a decision on the record within 90 days after receipt of the final briefs submitted for the record. ``(6) Limitation on consideration of certain existing service.-- ``(A) Limitation.--In determining whether to grant a waiver under this subsection for noncontiguous trade with Hawaii, the Secretary shall not consider the criterion set forth in paragraph (1)(B) if a qualified operator-- ``(i) is a contractor, and ``(ii) operates 4 or more vessels in foreign commerce in competition with another contractor. ``(B) Qualified operator.--In this paragraph, the term `qualified operator' means a person that on July 1, 1992, offered service as an operator of containerized vessels, trailer vessels, or combination container and trailer vessels in noncontiguous trade with Hawaii and the Johnston Islands (including a related party with respect to the person). ``(c) Waivers for Existing Noncontiguous Trade Operators.-- ``(1) In general.--The Secretary shall waive the application of subsection (a) to a contractor pursuant to an application submitted in accordance with this subsection if the Secretary finds that the contractor, or a related party or predecessor in interest with respect to the contractor-- ``(A) engaged in bona fide operation of a vessel as a carrier of cargo by water-- ``(i) in a noncontiguous trade on July 1, 1992; or ``(ii) in furnishing seasonal service in a season ordinarily covered by its operation, during the 12 calendar months preceding July 1, 1992; and ``(B) has operated in that service since that time, except for interruptions of service resulting from military contingency or over which the contractor (or related party or predecessor in interest) had no control. ``(2) Terms of waiver.-- ``(A) In general.--Except as otherwise provided in this paragraph, the level of service permitted under a waiver under this subsection shall be the level of service provided by the applicant (or related party or predecessor in interest) in the relevant noncontiguous trade during, for year-round service, the 6 calendar months preceding July 1, 1992, or for seasonal service, the 12 calendar months preceding July 1, 1992, determined by-- ``(i) the domestic ports called; ``(ii) the number of sailings actually made, except as to interruptions in the service in the noncontiguous trade resulting from military contingency or over which the applicant (or related party or predecessor in interest) had no control; and ``(iii) the volume of cargo carried or, for containerized or trailer service, the 40-foot equivalent unit shipboard container, trailer, or vehicle or general cargo capacity employed, or, for tug and barge service, the barge house cubic foot capacity and barge deck general cargo capacity or 40-foot equivalent unit container, trailer, or vehicle capacity, employed. ``(B) Certain containerized vessels.--If an applicant under this subsection was offering service as an operator of containerized vessels in noncontiguous trades with Hawaii, Puerto Rico, and Alaska on July 1, 1992, a waiver under this subsection for the applicant shall permit a level of service consisting of-- ``(i) 104 sailings each year from the West Coast of the United States to Hawaii with an annual capacity allocated to the service of 75 percent of the total capacity of the vessels employed in the service on July 1, 1992; ``(ii) 156 sailings each year in each direction between the East Coast or Gulf Coast of the United States and Puerto Rico with an annual capacity allocated to the service of 75 percent of the total capacity of its vessels employed in the service on the date of the enactment of the Maritime Security and Competitiveness Act of 1993; and ``(iii) 103 sailings each year in each direction between Washington and Alaska with an annual capacity allocated to the service in each direction of 100 percent of the total capacity of its vessels employed in the service on July 1, 1992. ``(C) Certain tugs and barges.--If an applicant under this subsection was offering service as an operator of tugs and barges in noncontiguous trades with Hawaii, Puerto Rico, and Alaska on July 1, 1992, a waiver under this subsection for the applicant shall permit a level of service consisting of-- ``(i) 17 sailings each year in each direction between ports in Washington, Oregon, and Northern California and ports in Hawaii with an annual barge house cubic foot capacity and annual barge deck 40-foot equivalent unit container capacity in each direction of 100 percent of the total of the capacity of its vessels employed in the service during the 6 calendar months preceding July 1, 1992, annualized; ``(ii) 253 sailings each year in each direction between the East Coast or Gulf Coast of the United States and Puerto Rico with an annual 40-foot equivalent unit container or trailer capacity equal to 100 percent of the capacity of its barges employed in the service on the date of the enactment of the Maritime Security and Competitiveness Act of 1993; ``(iii) 37 regularly scheduled tandem tow rail barge sailings and 10 additional single tow rail barge sailings each year in each direction between Washington and the Alaskan port range between and including Anchorage and Whittier with an annual capacity allocated to the service in each direction of 100 percent of the total rail car capacity of its vessels employed in the service on July 1, 1992; ``(iv) 8 regularly scheduled single tow sailings each year in each direction between Washington and points in Alaska (not including the port range between and including Anchorage and Whittier, except occasional deviations to discharge incidental quantities of cargo) with an annual capacity allocated to the service in each direction of 100 percent of the total capacity of its vessels employed in the service on July 1, 1992; and ``(v) unscheduled, contract carrier tug and barge service between points in Alaska south of the Arctic Circle not served by the common carrier service permitted under clause (iii) and points in the contiguous 48 States, with an annual capacity allocated to that service not exceeding 100 percent of the total capacity of the equipment that was dedicated to service south of the Arctic Circle on July 1, 1992, and actually utilized in that service in the 2-year period preceding that date. ``(D) Annualization.--Capacity otherwise required by this paragraph to be permitted under a waiver under this subsection shall be annualized if not a seasonal service. ``(E) Adjustments.-- ``(i) Each written waiver granted by the Secretary under this subsection shall contain a statement that the annual capacity permitted under this waiver in any direction shall increase for a calendar year by the percentage of increase during the preceding calendar year in the real gross product of the State or territory to which goods are transported in the noncontiguous trade covered by the waiver, or its equivalent economic measure as determined by the Secretary if the real gross product is not available, and that the increase shall not be considered to be a material change or increase for purposes of subsection (a)(1)(B). ``(ii) The increase in permitted capacity under clause (i) in the noncontiguous trade with Alaska shall be allowed only to the extent the operator actually uses that increased capacity to carry cargo in the permitted service in the calendar year immediately following the preceding increase in gross product. However, if an operator operating exclusively containerized vessels in that trade on July 1, 1992, carries an average loan factor of at least 90 percent of permitted capacity (including the capacity, if any, both authorized and used under the previous sentence) during 9 months of any one calendar year, than in the next following calendar year and thereafter, the requirement that additional capacity must be used in the immediately following year does not apply. ``(F) Service levels not increased by termination of agreement.--The termination of an operating agreement under section 405(a)(10) shall not be considered to increase a level of service specified in subparagraph (A), (B), or (C) if the contractor under the agreement enters into another operating agreement after that termination. ``(3) Applications for waivers.--For a waiver under this subsection a contractor shall submit to the Secretary an application certifying the facts required to be found under paragraph (1) (A) or (B), as applicable. ``(4) Action on application.-- ``(A) Notice.--The Secretary shall publish a notice of receipt of an application for a waiver under this subsection within 30 days after receiving the application. ``(B) Hearing prohibited.--The Secretary may not conduct a hearing on an application for a waiver under this subsection. ``(C) Submission of comments.--The Secretary shall give every person operating a cargo vessel in a noncontiguous trade for which a waiver is applied for under this subsection and who has any interest in the application a reasonable opportunity to submit comments on the application and on the description of the service that would be permitted by any waiver that is granted by the Secretary under the application. ``(5) Decision on application.--Subject to the time required for publication of notice and for receipt and evaluation of comments by the Secretary, an application for a waiver under this subsection submitted at the same time the applicant applies for inclusion of a vessel in the Fleet shall be granted in accordance with the level of service determined by the Secretary under this subsection by not later than the date on which the Secretary offers to the applicant an operating agreement with respect to that vessel. ``(6) Change or increase in service.--Any material change or increase in a service that is subject to a waiver under this subsection is not authorized except to the extent the change or increase is permitted by a waiver under subsection (b). ``(d) Emergency Waiver.--Notwithstanding any other provision of this section, the Secretary may, without hearing, temporarily waive the application of subsection (a)(1)(B) if the Secretary finds that a material change or increase is essential in order to respond adequately to (1) an environmental or natural disaster or emergency, or (2) another emergency declared by the President. Any waiver shall be for a period of not to exceed 45 days, except that a waiver may be renewed for 30-day periods if the Secretary finds that adequate capacity continues to be otherwise unavailable. ``(e) Annual Report on Waivers.--Each waiver under this section shall require the person who is granted the waiver to submit to the Secretary each year an annual report setting forth for the service authorized by the waiver-- ``(1) the ports served during the year; ``(2) the number or frequency of sailings performed during the year; and ``(3) the volume of cargo carried or, for containerized or trailer service, the annual 40-foot equivalent unit shipboard container, trailer, or vehicle capacity utilized during the year, or for tug and barge service, the annual barge house and barge deck capacity utilized during the year. ``(f) Definitions.--In this section-- ``(1) the term `noncontiguous trade' means trade between-- ``(A) a point in the contiguous 48 States; and ``(B) a point in Alaska, Hawaii, or Puerto Rico, other than a point in Alaska north of the Arctic Circle; and ``(2) the term `related party' means-- ``(A) a holding company, subsidiary, affiliate, or associate of a contractor; and ``(B) an officer, director, agency, or other executive of a contractor or of a person referred to in subparagraph (A). ``SEC. 407. OPERATING COMPETING FOREIGN VESSELS. ``(a) In General.--Except as provided in this section, a contractor (including a related party with respect to a contractor) may not own, charter, or operate a foreign vessel in competition with a United States documented vessel. ``(b) Exception.--Subsection (a) does not apply to a foreign vessel if-- ``(1)(A) the contractor has applied for an operating agreement for a vessel to be operated in the same service as the foreign vessel; and ``(B) the Secretary, due to the unavailability of funds, does not award an operating agreement to that contractor for a United States documented vessel for that service within 60 days after that application is submitted; ``(2) the Secretary, after notice and an opportunity for a hearing, under special circumstances, and for good cause shown, waives subsection (a) for the contractor for a specified period of time; or ``(3) the foreign vessel was operated by that contractor on August 5, 1993. ``SEC. 408. FUNDING FOR OPERATING AGREEMENTS. ``(a) Authorization of Appropriations.--For entering into operating agreements under this title there are authorized to be appropriated to the Secretary $1,200,000,000 for fiscal year 1995. Amounts appropriated under this subsection shall remain available until expended. ``(b) Transfer of Balances From Operating Differential Subsidy Program.--Any amounts otherwise available for operating differential subsidy contracts under title VI that are no longer required for those contracts are available, until expended, for operating agreements. ``SEC. 409. DEFINITIONS. ``In this title: ``(1) Contractor.--The term `contractor' means an owner or operator of a vessel that enters into an operating agreement for the vessel with the Secretary. ``(2) Eligibility decision application.--The term `eligibility decision application' means an application for a decision by the Secretary under section 403 that a vessel is eligible to be enrolled in the Fleet. ``(3) Eligible vessel.--The term `eligible vessel' means a vessel that the Secretary decides under section 403 is eligible to be enrolled in the Fleet. ``(4) Fleet.--The term `Fleet' means the Maritime Security Fleet established under section 402. ``(5) Operating agreement.--The term `operating agreement' means an operating agreement entered into by the Secretary under section 404. ``(6) Related party.--The term `related party' means, with respect to a contractor or other person-- ``(A) a holding company, subsidiary, affiliate, or association of the person; and ``(B) an officer, director, other executive, or agent of the person or of an entity referred to in paragraph (1). ``(7) Secretary.--The term `Secretary' means the Secretary of Transportation. ``(8) United states documented vessel.--The term `United States documented vessel' means a vessel that is documented under chapter 121 of title 46, United States Code.''. SEC. 103. OPERATING-DIFFERENTIAL SUBSIDY CONTRACTS. (a) Termination of Existing Contracts.--Notwithstanding any other provision of this Act, any contract in effect under title VI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1171 et seq.), on the day before the date of enactment of this Act shall continue in effect under its terms and terminate as set forth in the contract, unless voluntarily terminated on an earlier date by the persons (other than the United States Government) that are parties to the contract. (b) Age Acceleration of Bulk Cargo ODS Vessels.--Section 506 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1156) is amended-- (1) by inserting ``(a)'' after ``Sec. 506.''; and (2) by adding at the end the following new subsection: ``(b) For purposes of this section, any liquid or dry bulk cargo vessel for which operating-differential subsidy is required to be paid under a contract under title VI that is in force on May 19, 1993, shall, effective upon the termination date of the contract (as set forth in the contract as in effect on May 19, 1993, be deemed to have reached the age of 20 years.''. (c) Restrictions on Operations of ODS Vessels.--Title VI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1171 et seq.), as amended by this Act, is further amended by adding at the end the following: ``SEC. 616. LIMITATION ON APPLICATION OF RESTRICTIONS ON OPERATIONS. ``(a) Sections 605(c) and 804, this section, and the essential service requirements in section 601(a) and 603(a), do not apply to a contractor if-- ``(1) the contractor submits an eligibility decision application to the Secretary under title IV for all of the vessels operated by the contractor under an operating- differential subsidy contract; and ``(2) all of those vessels for which operating agreements are offered by the Secretary under title IV are enrolled in the Maritime Security Fleet. ``(b)(1) With respect to the operations of a contractor receiving operating-differential subsidy for liner vessels on a particular trade route, as defined in that contractor's contract in effect on January 1, 1993, that operator shall not be subject to the restrictions of either section 605(c) or section 804 with respect to operations on that trade route, commencing at such time as-- ``(A) that operator transfers 50 percent or more of its vessels that were operating on that trade route as of January 1, 1993, from the operating-differential subsidy program to the Maritime Security Fleet program under title IV; or ``(B) that operator is the only contractor receiving operating-differential subsidy with respect to that trade route, and all other United States-flag liner operators operating a vessel on that trade route are operating on that trade route only vessels for which there are in effect operating agreements under title IV. ``(2) With respect to any contractor receiving operating- differential subsidy for liner vessels on Maritime Administration Essential Trade Route 1, 2, or 8, that operator shall not be subject to the restrictions of either section 605(c) or section 804 with respect to operations on any of those trade routes, commencing at such time as payments begin to accrue on behalf of another United States-flag operator that is a party to an operating agreement under title IV which provides liner service on Maritime Administration Essential Trade Route 2.''. (d) Elimination of Trade Route Restrictions.--Section 809(a) of the Merchant Marine Act, 1936 (46 U.S.C. 1213(a)) is amended by adding at the end the following: ``This subsection shall not apply to contracts under title IV or funds for such contracts.''. SEC. 104. ELIMINATION OF CONSTRUCTION DIFFERENTIAL SUBSIDY RESTRICTIONS. Title V of the Merchant Marine Act, 1936 (46 App. U.S.C. 1151 et seq.), is amended by adding at the end the following: ``SEC. 512. LIMITATION ON RESTRICTIONS. ``Notwithstanding any other provision of law or contract, all restrictions and requirements under sections 503, 506, and 802 applicable to a liner vessel constructed, reconstructed, or reconditioned with the aid of construction-differential subsidy shall terminate upon the expiration of the 25-year period beginning on the date of the original delivery of the vessel from the shipyard.''. SEC. 105. DEFINITIONS APPLICABLE TO MERCHANT MARINE ACT, 1936. Section 905 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1244), is amended-- (1) by striking subsection (a) and inserting the following: ``(a) Each of the terms `foreign commerce' and `foreign trade' mean-- ``(1) trade between the United States and a foreign country; or ``(2) trade between foreign ports.''; (2) by striking subsection (c) and inserting the following: ``(c) The term `citizen of the United States' means a person eligible to own a documented vessel under chapter 121 of title 46, United States Code.'', and (3) by adding at the end the following: ``(h) The term `foreign subsidized shipyard' means a shipyard that-- ``(1) receives or benefits from, directly or indirectly, a shipyard subsidy for the construction of vessels; and ``(2) is located in a foreign country that has not signed a trade agreement with the United States that provides for the elimination of subsidies for that shipyard. ``(i) The term `subsidy' includes any of the following: ``(1) Officially supported export credits and development assistance. ``(2) Direct official operating support to the commercial shipbuilding and repair industry, or to a related entity that favors the operation of shipbuilding and repair, including-- ``(A) grants; ``(B) loans and loan guarantees other than those available on the commercial market; ``(C) forgiveness of debt; ``(D) equity infusions on terms inconsistent with commercially reasonable investment practices; ``(E) preferential provision of goods and services; and ``(F) public sector ownership of commercial shipyards on terms inconsistent with commercially reasonable investment practices. ``(3) Direct official support for investment in the commercial shipbuilding and repair industry, or to a related entity that favors the operation of shipbuilding and repair, including the kinds of support listed in clauses (i) through (v) of subparagraph (B), and any restructuring support, except public support for social purposes directly and effectively linked to shipyard closures. ``(4) Assistance in the form of grants, preferential loans, preferential tax treatment, or otherwise, that benefits or is directly related to shipbuilding and repair for purposes of research and development that is not equally open to domestic and foreign enterprises. ``(5) Tax policies and practices that favor the shipbuilding and repair industry, directly or indirectly, such as tax credits, deductions, exemptions and preferences, including accelerated depreciation, if the benefits are not generally available to persons or firms not engaged in shipbuilding or repair. ``(6) Any official regulation or practice that authorizes or encourages persons or firms engaged in shipbuilding or repair to enter into anticompetitive arrangements. ``(7) Any indirect support directly related, in law or in fact, to shipbuilding and repair at national yards, including any public assistance favoring shipowners with an indirect effect on shipbuilding or repair activities, and any assistance provided to suppliers of significant inputs to shipbuilding, which results in benefits to domestic shipbuilders. ``(8) Any export subsidy identified in the Illustrative List of Export Subsidies in the Annex to the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade or any other export subsidy that may be prohibited as a result of the Uruguay Round of trade negotiations.''. SEC. 106. GOVERNMENT-IMPELLED CARGOES. (a) Vessels Eligible for Cargoes.--Section 901(b) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1241(b)) is amended-- (1) in paragraph (1), by striking ``For purposes of this section, the term `privately owned United States-flag commercial vessels''' and all that follows through the end of the paragraph; and (2) by adding at the end the following new paragraphs: ``(3) In this section and section 901b, the term `privately owned United States-flag commercial vessel' means a privately owned vessel that is documented under chapter 121 of title 46, United States Code, that-- ``(A) was built in the United States; ``(B) was documented under chapter 121 of title 46, United States Code, before May 19, 1993; ``(C) does not transport under section 901b or this section on any voyage more than 12,000 tons of bulk cargo (as defined in section 3 of the Shipping Act of 1984), and-- ``(i) was built in a foreign shipyard under a contract entered into on or before May 19, 1993; ``(ii) is built under a contract entered into after that date, in a foreign shipyard that on the date the contract is entered is not a foreign subsidized shipyard; or ``(iii) is subject to an operating agreement under title IV; ``(D)(i) is built under a contract entered into after May 19, 1993, in a foreign shipyard that on the date the contract was entered is not a foreign subsidized shipyard; and ``(ii) has not been documented in a foreign country before it is documented under chapter 121 of title 46, United States Code; or ``(E) has been documented under chapter 121 of title 46, United States Code, for at least 3 consecutive years, did not transport any equipment, materials, or commodities during that period under this section or section 901b, and-- ``(i) was built in a foreign shipyard under a contract entered into before May 19, 1993; or ``(ii) is built under a contract entered into after that date, in a foreign shipyard that on the date the contract was entered is not a foreign subsidized shipyard. ``(4) In paragraph (3), the term `built' includes rebuilt.''. (b) Clerical Amendment.--Section 901b of the Merchant Marine Act, 1936 (46 App. U.S.C. 1241f) is amended by adding at the end the following: ``(f) For the definition of the term `privately owned United States-flag commercial vessel', see section 901(b)(3).''. SEC. 107. VESSEL FINANCING. (a) Elimination of Mortgagee Restrictions.--Section 31322(a) of title 46, United States Code, is amended to read as follows: ``(a) A preferred mortgage is a mortgage, whenever made, that-- ``(1) includes the whole of the vessel; ``(2) is filed in substantial compliance with section 31321 of this title; and ``(3)(A) covers a documented vessel; or ``(B) covers a vessel for which an application for documentation is filed that is in substantial compliance with the requirements of chapter 121 of this title and the regulations prescribed under that chapter.''. (b) Elimination of Trustee Restrictions.-- (1) Repeal.--Section 31328 of title 46, United States Code, is repealed. (2) Conforming amendment.--Section 31330(b) of title 46, United States Code, is amended in paragraphs (1), (2), and (3) by striking ``31328 or'' each place it appears. (c) Removal of Mortgage Restrictions.--Section 9 of the Shipping Act, 1916 (46 App. U.S.C. 808), as amended by this Act, is further amended-- (1) in subsection (c)-- (A) by striking ``31328'' and inserting ``12106(e)''; and (B) in paragraph (1) by striking ``mortgage,'' each place it appears; and (2) in subsection (d)-- (A) in paragraph (1) by striking ``transfer, or mortgage'' and inserting ``or transfer''; (B) in paragraph (2) by striking ``transfers, or mortgages'' and inserting ``or transfers''; (C) in paragraph (3)(B) by striking ``transfers, or mortgages'' and inserting ``or transfers''; and (D) in paragraph (4) by striking ``transfers, or mortgages'' and inserting ``or transfers''. (d) Lease Financing.--Section 12106 of title 46, United States Code, is amended by adding at the end the following new subsections: ``(e)(1) A certificate of documentation for a vessel may be endorsed with a coastwise endorsement if-- ``(A) the vessel is eligible for documentation under section 12102; ``(B) the vessel is otherwise qualified under this section to be employed in the coastwise trade; ``(C) the person that owns the vessel, or any other person that owns or controls the person that owns the vessel, is primarily engaged in leasing or other financing transactions; ``(D) the vessel is under a demise charter to a person qualifying as a citizen of the United States for engaging in the coastwise trade under section 2 of the Shipping Act, 1916; and ``(E) the demise charter is for-- ``(i) a period of at least 3 years; or ``(ii) such shorter period as may be prescribed by the Secretary. ``(2) On termination of a demise charter required under paragraph (1)(D), the coastwise endorsement may be continued for a period not to exceed 6 months on any terms and conditions that the Secretary of Transportation may prescribe. ``(f) For purposes of the first proviso of section 27 of the Merchant Marine Act, 1920, section 2 of the Shipping Act, 1916, and section 12102(a), a vessel meeting the criteria of subsection (d) or (e) is deemed to be owned exclusively by citizens of the United States.''. SEC. 108. PLACEMENT OF VESSELS UNDER FOREIGN REGISTRY. (a) In General.--Section 9 of the Shipping Act, 1916 (46 App. U.S.C. 808), as amended by this Act, is further amended by adding at the end the following: ``(e) Notwithstanding subsection (c)(2), the Merchant Marine Act, 1936, or any contract entered into with the Secretary under that Act, a vessel may be placed under a foreign registry, without approval of the Secretary, if-- ``(1)(A) the Secretary determines that at least one replacement vessel of a capacity that is equivalent or greater, as measured by deadweight tons, gross tons, or container equivalent units, as appropriate, is documented under chapter 121 of title 46, United States Code, by the owner of the vessel placed under the foreign registry; and ``(B) the replacement vessel is not more than 10 years of age on the date of that documentation; ``(2)(A) the owner of the vessel has applied for an operating agreement under title IV of the Merchant Marine Act, 1936; and ``(B) the Secretary, due to the unavailability of funds, has not awarded that owner an operating agreement within 60 days after the date of that application; or ``(3)(A) before the expiration of an operating agreement entered into under title IV of the Merchant Marine Act, 1936, the owner has applied for a new operating agreement; and ``(B) the Secretary, due to the unavailability of funds, has not awarded the owner an operating agreement before the later of-- ``(i) 60 days after the application for a new operating agreement; or ``(ii) the date of expiration of the operating agreement. ``(f) The Secretary shall give notice and an opportunity for a hearing for all approvals applied for under subsection (c)(2) for oceangoing merchant vessels that are of at least 3,000 gross tons.''. (b) Application.--The amendment made by subsection (a) applies to vessels that are placed under foreign registry after the date of enactment of this Act and replacement vessels documented in the United States after that date. (c) Court Sales of Vessels.--Section 31329 of title 46, United States Code, is amended to read as follows: ``Sec. 31329. Court sales of documented vessels ``When a documented vessel is sold by order of a district court to a mortgagee not eligible to own a documented vessel-- ``(1) that sale is not a sale foreign within the terms of the first proviso of section 27 of the Merchant Marine Act, 1920 (46 App. U.S.C. 883); and ``(2) unless the vessel is transferred to a foreign registry, the vessel may be operated only with the approval of the Secretary of Transportation.''. SEC. 109. SERIES CONSTRUCTION ASSISTANCE. The Merchant Marine Act, 1936 (46 App. U.S.C. 1101 et seq.) is amended by adding at the end the following: ``TITLE XIV--SERIES CONSTRUCTION ASSISTANCE ``SEC. 1401. PAYMENT OF ASSISTANCE AUTHORIZED. ``(a) In General.--The Secretary of Transportation (hereinafter in this title referred to as the `Secretary') may, subject to the availability of appropriations, pay assistance in accordance with this title to the owner of a shipyard that is located in the United States for the construction (including outfitting and equipping) of any commercial vessel that is one of a series of vessels for which payment of assistance under this section to the owner is approved by the Secretary under section 1402. ``(b) Amount of Assistance.--The total amount of assistance paid under this section with respect to a vessel shall be equal to the series transition payment determined for the vessel under section 1403(a). ``SEC. 1402. APPROVAL OF ASSISTANCE FOR CONSTRUCTION OF SERIES OF VESSELS. ``(a) Approval of Assistance.-- ``(1) In general.--The Secretary may approve payment of assistance under section 1401 for construction of a series of vessels in a shipyard if-- ``(A) the owner of the shipyard submits an application for that assistance in accordance with section 1405; ``(B) the Secretary makes the determinations described in subsection (b); and ``(C) the Secretary determines that payment of the assistance will contribute to maintaining national vessel construction capabilities that are essential in time of war or national emergency. ``(2) Limitation.--The Secretary may not approve assistance under this section for a series of vessels if the series transition payment determined under section 1403(a) for any vessel in the series is greater than 50 percent of the estimate of the cost of constructing the vessel determined by the Secretary under section 1403(b)(2). ``(b) Determinations by Secretary.--The Secretary may not approve assistance for construction of a series of vessels in a shipyard unless the Secretary has determined the following: ``(1) Vessel requirements.--The vessels are-- ``(A) commercial vessels of at least 10,000 gross tons; and ``(B) commercially marketable on the international market. ``(2) Shipyard requirements.--The shipyard in which the vessels will be constructed-- ``(A) is located in the United States; and ``(B) upon completion of construction of the vessels, will be capable of constructing additional vessels of the same type as those in the series for a price that is competitive in the international market. ``(3) Applicant requirements.--The applicant for the assistance-- ``(A) has the ability, financial resources, and other qualifications necessary for construction of the vessels; ``(B) has entered into a contract for the construction of each of the first 2 vessels to be constructed in the series, which may include a contract for a vessel that will be constructed without assistance under this title; and ``(C) is the owner of the shipyard in which the vessels will be constructed. ``(4) Contract requirements.--Each of the contracts required under paragraph (3)(B) are binding obligations on the applicant and all other parties to the contracts, except that such a contract may be contingent on-- ``(A) the approval of assistance under this title for construction of a vessel under the contract; and ``(B) the making of a guarantee or commitment to guarantee obligations under title XI for construction under the contract. ``(5) Purchaser requirements.--Each person that is a purchaser of a vessel under a contract required under paragraph (3)(B)-- ``(A) has the ability, financial resources, and other qualifications necessary to own and operate the vessel in commercial service; and ``(B) is a party to the contract. ``(6) Series transition payment.--The series transition payment under section 1403 for each vessel in the series. ``(c) Priority for Certain Series of Vessels.--In approving assistance under this title, the Secretary may give priority to a series of vessels-- ``(1) if a smaller number of vessels in the series are required to be constructed with assistance before construction of that type of vessel becomes cost effective; ``(2) for which the total of the series transition payments determined under section 1403 for all vessels in the series is less than that total for other series of vessels for which applications are submitted for assistance under this title; ``(3) that will be constructed in a shipyard with respect to which assistance under this title has not been provided; or ``(4) that would contribute to the preservation of a shipyard that would be essential in a time of war or national emergency. ``SEC. 1403. DETERMINATION OF SERIES TRANSITION PAYMENTS. ``(a) In General.--The Secretary shall determine the series transition payment for each vessel in a series of vessels for which an application for assistance under this title is received by the Secretary. ``(b) Amount of Series Transition Payment.--The series transition payment for a vessel under subsection (a) is equal to the difference of-- ``(1) the estimated cost of completing construction of the vessel, as included in the application for assistance submitted under section 1405; minus ``(2) a reasonable estimate of the cost of constructing the vessel under similar plans and specifications in a foreign shipyard that is considered by the Secretary to be a fair and representative example for purposes of determining the payment. ``SEC. 1404. SERIES CONSTRUCTION AGREEMENT. ``(a) In General.-- ``(1) In general.--The Secretary shall, for each series of vessels for which assistance is approved under section 1402, enter into a series construction agreement with the owner of the shipyard in which the series of vessels will be constructed, under which the Secretary is required to pay the owner assistance in accordance with a schedule established under paragraph (2). ``(2) Schedule for payments.--An agreement under this subsection shall establish a schedule for the payment of assistance under the agreement, that is based on the construction schedule for vessels for which the assistance is paid. ``(3) Termination of agreement.--An agreement under this subsection shall authorize the Secretary to terminate the agreement if-- ``(A) a contract required under section 1402(b)(3)(B) is terminated by the purchaser of the vessel under the contract, and the owner of the shipyard does not enter into a new contract for construction of the vessel within a period which shall be specified in the agreement; or ``(B) the owner of the shipyard fails to enter into contracts for construction of all vessels in the series of vessels to which the agreement applies, within a period which shall be specified in the agreement. ``(4) Continuing effect of agreement with respect to vessels covered by contracts.--The termination of a series construction agreement under paragraph (3) shall not affect the effectiveness of the agreement with respect to vessels for which a construction contract is in effect on the date of termination. ``(b) Binding Obligation of the United States.-- ``(1) In general.--Except as provided in paragraph (2), a requirement that the Secretary make payments under a series construction agreement under subsection (a) shall constitute a binding obligation of the United States. ``(2) Termination of obligation.--If the Secretary terminates a series construction agreement pursuant to subsection (a)(3), the obligation of the United States under paragraph (1) to make payments under the agreement shall terminate with respect to vessels for which no construction contract is in effect on the date of termination of the agreement. ``(3) Continuing availability of amounts.--Amounts to be used to liquidate an obligation under paragraph (1) that terminates under paragraph (2) shall remain available to the Secretary for the payment of assistance under this title. ``SEC. 1405. APPLICATIONS FOR ASSISTANCE. ``(a) Submittal.--A person desiring assistance under this title shall, in accordance with this section, submit an application to the Secretary. ``(b) Contents of Application.--An application for assistance under this title with respect to a series of vessels shall include the following: ``(1) A detailed description of the type of vessels included in the series, including plans and specifications for the vessels. ``(2) Detailed estimates of the cost of completing construction of each of the vessels in the series, including such estimates from subcontractors for the construction as may be required by the Secretary. ``(3) Copies of the contracts required under section 1402(b)(3)(B). ``(4) Other information required by the Secretary to fulfill the requirements of this title. ``(c) Regulations.--The Secretary shall issue regulations setting forth the procedures for submitting an application for assistance under this title. ``SEC. 1406. RESTRICTION ON VESSEL OPERATIONS. ``A vessel for which assistance is paid under this title-- ``(1) may be operated only in foreign trade or domestic trade authorized under a registry endorsement for the vessel issued under section 12105 of title 46, United States Code; and ``(2) may not be operated in the coastwise trade of the United States (including mixed coastwise and foreign trade), except coastwise trade authorized under a registry endorsement for the vessel issued under section 12105 of title 46, United States Code. ``SEC. 1407. VESSEL DESIGN AWARDS. ``The Secretary, subject to the availability of appropriations, may make an award to a United States shipyard on an equal matching basis for the cost of vessel designs and document and bid preparation for vessels described in section 403(b)(4).''. SEC. 110. EFFECTIVE DATE. The amendments made by this Act are effective on the date which is 120 days after the date of enactment of this Act. SEC. 111. REGULATIONS. (a) In General.--The Secretary of Transportation shall prescribe regulations as necessary to carry out this Act. (b) Interim Regulations.--The Secretary of Transportation may prescribe interim regulations necessary to carry out this Act and for accepting eligibility decision applications under section 403 of the Merchant Marine Act, 1936, as amended by this Act. For this purpose, the Secretary of Transportation is excepted from compliance with the notice and comment requirements of section 553 of title 5, United States Code. All regulations prescribed under the authority of this subsection that are not earlier superseded by final rules shall expire 270 days after the date of enactment of this Act. SEC. 112. EXPANSION OF STANDING FOR MARITIME UNIONS. Section 301 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1131) is amended by adding at the end the following: ``(c) Standing for Maritime Union Representatives.--The duly- elected representative of any organization that is certified by the Secretary of Labor as the proper collective bargaining agency for officers or crew employed on any type of United States documented vessel is an interested party in, and has standing to challenge, any proposed or final order, action, or rule of the Secretary of Transportation under this Act or section 9(c)(2) of the Shipping Act, 1916.''. SEC. 113. STUDY. (a) In General.--After providing public notice and opportunity for comment, the Secretary of Transportation shall conduct a study of-- (1) the impact of this Act on the international competitiveness of United States documented vessels and whether this Act has had a favorable or unfavorable impact on the ability of United States documented vessels to compete successfully with foreign-flag vessels; (2) whether continuation of the Maritime Security Fleet program established by this Act would assist the international competitiveness of United States documented vessels; (3) whether the Maritime Security Fleet program should be continued, modified, or discontinued; (4) alternatives that are or should be available to operators of United States documented vessels if the Maritime Security Fleet program is discontinued; and (5) any other issues related to promoting the international competitiveness of United States documented vessels that the Secretary considers appropriate. (b) Report.--The Secretary of Transportation shall submit to the Congress a report on the findings and conclusions of the study required by subsection (a) by not later than 4 years after the date of enactment of this Act, which shall include such recommendations as the Secretary considers appropriate. SEC. 114. CARGO PREFERENCE ADMINISTRATIVE REFORM. (a) Findings.--The Congress finds and declares that-- (1) the Congress continues to support the cargo preference program as an important element of support for the United States-flag merchant marine because the United States merchant marine is critical to the economic and national security of the United States; (2) reserving a small portion of Government cargo for United States-flag vessels encourages competition among United States-flag vessels; and (3) administering the cargo preference program in a centralized, commercially based manner reduces costs of the program. (b) Administrative Reform.--Section 901 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1241) is amended by adding at the end the following new subsections: ``(d) A privately owned United States-flag commercial vessel transporting any equipment, materials, or commodities under this section or section 901b shall be engaged under terms no less favorable than the most favorable terms offered to any foreign-flag vessel transporting equipment, materials, or commodities under this section or section 901b. ``(e) A contract for the ocean transportation of any equipment, materials, or commodities under this section or section 901b, to the extent the Secretary of Transportation, in consultation with the heads of other appropriate agencies, determines necessary to further the purposes of this section and section 901b, shall be based on contracts used for commercial shipments. ``(f) The Secretary of Transportation shall participate in negotiations relating to agreements with recipient countries for equipment, materials, or commodities subject to this section or section 901b to the extent the Secretary, in consultation with the heads of other appropriate agencies, considers to be necessary to ensure agreement provisions relating to or affecting the transportation of such equipment, materials, or commodities permit fair and reasonable transportation services to be provided. ``(g) No later than 180 days after the date of the enactment of the Maritime Security and Competitiveness Act of 1993, the heads of appropriate Federal agencies, or their representatives, shall transmit to the Secretary of Transportation recommendations relating to the methodology used by the Secretary of Transportation to determine whether rates for United States-flag vessels are fair and reasonable in compliance with section 901(b) and will achieve the policy objectives of this Act.''. (c) Within 90 days after the date of enactment of this Act, the Secretary of Transportation shall take actions to ensure and maintain a significant increase of government-impelled cargo through Great Lakes ports, through administrative waivers and action and through an exemption of cargo preference requirements. SEC. 115. WAGES FOR WHICH PREFERRED MARITIME LIEN MAY BE ESTABLISHED. (a) In General.--Section 31301(5)(D) of title 46, United States Code, is amended by inserting before the semicolon the following: ``(including any payment described in paragraph (5), (6), (7), (8), or (9) of section 302(c) of the Labor Management Relations Act, 1947 for any individual as a member of the crew of the vessel, that is due from and unpaid by an owner or managing operator of the vessel)''. (b) Incurring Obligations Before Executing Preferred Mortgages.-- Section 31323(b)(2) of title 46, United States Code, is amended by inserting before the semicolon the following: ``(including any payment described in paragraph (5), (6), (7), (8), or (9) of section 302(c) of the Labor Management Relations Act, 1947 for any member of the crew of the vessel)''. (c) Master's Lien for Wages.--Section 11112 of title 46, United States Code, is amended by inserting after ``wages'' the following: ``(including any payment described in paragraph (5), (6), (7), (8), or (9) of section 302(c) of the Labor Management Relations Act, 1947 for an individual as master of the vessel, that is due from and unpaid by an owner or managing operator of the vessel)''. (d) Application.--The amendments made by subsections (a), (b), and (c) shall apply with respect to payments that first become due on or after the date of the enactment of this Act. SEC. 116. COMPLIANCE WITH BUY AMERICAN ACT. No funds appropriated pursuant to this Act may be expended by an entity unless the entity agrees that in expending the assistance the entity will comply with sections 2 through 4 of the Act of March 3, 1933 (41 U.S.C. 10a-10c, popularly known as the ``Buy American Act''). SEC. 117. SENSE OF CONGRESS; REQUIREMENT REGARDING NOTICE. (a) Purchase of American-Made Equipment and Products.--In the case of any equipment or products that may be authorized to be purchased with financial assistance provided under this Act, it is the sense of the Congress that entities receiving such assistance should, in expending the assistance, purchase only American-made equipment and products. (b) Notice To Recipients of Assistance.--In providing financial assistance under this Act, the head of each Federal agency shall provide to each recipient of the assistance a notice describing the statement made in subsection (a) by the Congress. TITLE II--MARITIME ADMINISTRATION SEC. 201. SHORT TITLE. This title may be cited as the ``Maritime Administration Authorization Act for Fiscal Year 1995''. SEC. 202. AUTHORIZATIONS FOR THE MARITIME ADMINISTRATION. (a) Authorizations.--For fiscal year 1995, there are authorized to be appropriated to the Secretary of Transportation for use for the Maritime Administration the following amounts: (1) Any amounts necessary to liquidate obligations under operating-differential subsidy contracts for the fiscal year 1995 portion of the total contract authority. (2) $43,076,000 for expenses related to manpower, education, and training, including-- (A) $30,701,000 for maritime training at the United States Merchant Marine Academy at Kings Point, New York; (B) $10,525,000 for assistance to the State maritime academies (including reimbursement of fuel costs associated with the operation of training vessels), of which $1,200,000 may be used for training simulators for the State maritime academies; and (C) $1,850,000 for manpower and additional training. (3) $35,124,000 for operating programs, including-- (A) $20,866,000 for general administration; (B) $9,216,000 for development and use of water transportation systems; (C) $3,627,000 for research, technology, and analysis; and (D) $1,415,000 for national security support capabilities. (4)(A) $248,800,000 for the National Defense Reserve Fleet (including the Ready Reserve Force component of that fleet), including-- (i) $228,448,000 for maintenance and operations in support of the Ready Reserve Force; (ii) $6,352,000 for maintenance and operations in support of the National Defense Reserve Fleet; (iii) $4,000,000 for facilities; and (iv) $10,000,000 to repair and convert the vessel T-AGS 39 MAURY for use as a training vessel at the California Maritime Academy. (B) As a condition of making any payment from amounts appropriated under subparagraph (A)(iv), the Secretary shall require that the California Maritime Academy agree to make the T-AGS 39 MAURY available to the Ready Reserve Force of the National Defense Reserve Fleet upon request by the Secretary and the Secretary of Defense. (5) $4,000,000 to pay administrative costs related to new loan guarantee commitments under title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.), relating to Federal ship mortgage insurance. (6) $200,000,000 for costs (as that term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of new loan guarantee commitments under title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.). (b) Use of Proceeds of Sales.--Notwithstanding any other provision of law and subject to the availability of appropriations, the Secretary of Transportation may use proceeds derived from the sale or disposal of National Defense Reserve Fleet vessels, that are currently collected and retained by the Maritime Administration, as follows: (1) For facility and ship maintenance, modernization and repair, acquisition of equipment, training simulators, and fuel costs necessary to maintain training at the United States Merchant Marine Academy and the State maritime academies. (2) The Secretary shall pay from those proceeds $4,000,000 to the California Maritime Academy to repair and convert the vessel T-AGS 39 MAURY for use as a training vessel at the Academy. (3) The Secretary shall pay from those proceeds up to $50,000 to the Great Lakes Maritime Academy for operation of the training vessel of the Academy. SEC. 203. REIMBURSEMENT OF CERTAIN FEES BY STATE MARITIME ACADEMIES. (a) Condition of Assistance.--Section 1304(d) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295(d)) is amended by adding at the end the following: ``(3)(A) Subject to subparagraph (B), an agreement under this subsection shall require a State maritime academy to reimburse each qualified individual for any fee or charge for which the individual is liable to the United States for-- ``(i) the issuance of an entry level license under chapter 71 of title 46, United States Code; ``(ii) the first issuance of a merchant mariner's document under chapter 73 of that title; ``(iii) an evaluation or examination for such a license or merchant mariner's document conducted before the end of the period described in subparagraph (D)(ii); or ``(iv) an application for such a license, merchant mariner's document, evaluation, or examination. ``(B) A State maritime academy shall reimburse qualified individuals under subparagraph (A) to the extent amounts are available under subparagraph (C). ``(C) In addition to annual payments under paragraph (1)(A) and subject to the availability of appropriations, the Secretary shall pay annually to each State maritime academy that enters into an agreement under paragraph (1) amounts to reimburse qualified individuals under subparagraph (A). ``(D) In this paragraph, the term `qualified individual' means an individual who-- ``(i) is attending or is a graduate of a State maritime academy; ``(ii) fulfills the requirements for a license or merchant mariner's document described in subparagraph (A) not later than 3 months after the date the individual graduates from a State maritime academy; and ``(iii) is liable for a fee or charge described in subparagraph (A).''. (b) Effective Date.--The amendment made by subsection (a) is effective October 1, 1994. (c) Amendment of Existing Agreements.--As soon as practicable after the date of the enactment of this Act, the Secretary of Transportation shall amend agreements under section 1304(d) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(d)) pursuant to the amendment made by subsection (a). (d) Additional Appropriations Authorized.--In addition to amounts authorized to be appropriated in section 102 for assistance to State maritime academies, there is authorized to be appropriated $300,000 for fiscal year 1995 to reimburse qualified individuals pursuant to the amendment made by subsection (a). SEC. 204. TERMINATION OF CONDITION FOR STATE MARITIME ACADEMY ASSISTANCE. (a) In General.--Section 1304(f)(1) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(f)(1)) is amended to read as if section 3 of the Act of October 13, 1989 (Public Law 101-115; 103 Stat. 692), had not been enacted. (b) Effective Date.--The amendment made by subsection (a) shall be effective October 13, 1989. (c) Clerical Amendments.-- (1) Section 3 of the Act of October 13, 1989 (Public Law 101-115; 103 Stat. 692), is repealed. (2) Section 706 of the Federal Maritime Commission Authorization Act of 1990 (46 App. U.S.C. 1295c note) is repealed. SEC. 205. MAINTENANCE CONTRACTS FOR NATIONAL DEFENSE RESERVE FLEET VESSELS. The Secretary of Transportation may enter into a contract for the maintenance of the National Defense Reserve Fleet, including the Ready Reserve Force, only for-- (1) the repair, activation, operation, berthing, towing, or lay-up of a vessel; (2) a vessel used by a State maritime academy; or (3) obtaining maintenance technical services when-- (A) the technical expertise required for that service is beyond the capabilities of the Fleet staff or when the Fleet has insufficient personnel resources to adequately maintain the Fleet; and (B) the contract does not result in reducing employment at the Fleet site. SEC. 206. MAINTENANCE OF READY RESERVE FORCE VESSELS IN REDUCED OPERATING STATUS. The Secretary shall, during fiscal year 1995, maintain in a reduced operating status-- (1) at least 29 vessels in the Ready Reserve Force component of the National Defense Reserve Fleet, or (2) a lesser number of those vessels that the Secretary determines to be practicable based on the appropriations available for that fiscal year for maintenance of vessels in that force. SEC. 207. VESSEL REPAIR AND MAINTENANCE PILOT PROGRAM. (a) In General.--The Secretary of Transportation shall conduct a pilot program to evaluate the feasibility of using long-term contracts for the maintenance and repair of outported vessels in the Ready Reserve Force to enhance the readiness of those vessels. Under the pilot program, the Secretary, subject to the availability of appropriations and within 6 months after the date of the enactment of this Act, shall award 9 contracts for this purpose. (b) Use of Various Contracting Arrangements.--In conducting a pilot program under this section, the Secretary of Transportation shall use contracting arrangements similar to those used by the Department of Defense for procuring maintenance and repair of its vessels. (c) Contract Requirements.--Each contract with a shipyard under this section shall-- (1) subject to subsection (d), provide for the procurement from the shipyard of all repair and maintenance (including activation, deactivation, and drydocking) for 1 vessel in the Ready Reserve Force that is outported in the geographical vicinity of the shipyard; and (2) be effective for 3 years. (d) Limitation of Work Under Contracts.--A contract under this section may not provide for the procurement of operation or manning for a vessel that may be procured under another contract for the vessel to which section 11(d)(2) of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1774(d)(2)) applies. (e) Geographic Distribution.--The Secretary shall seek to distribute contract awards under this section to shipyards located throughout the United States. (f) Reports.--The Secretary shall submit to the Congress-- (1) an interim report on the effectiveness of each contract under this section in providing for economic and efficient repair and maintenance of the vessel covered by the contract, no later than 20 months after the date of the enactment of this Act; and (2) a final report on that effectiveness no later than 6 months after the termination of all contracts awarded pursuant to this section. SEC. 208. AMENDMENTS RELATING TO COAST GUARD MARITIME ACADEMY RESERVE TRAINING PROGRAM. (a) Naval Reserve Status.--Section 1304(g)(2) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(g)(2)) is amended by inserting before the period the following: ``, unless the individual participates in the Coast Guard Maritime Academy Reserve Training Program''. (b) Reserve Service Obligation.--Section 1304(g)(3)(D) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(g)(3)(D)) is amended by-- (1) inserting ``(i)'' after ``commissioned officer''; (2) inserting ``(except as provided in clause (ii))'' after ``the United States Coast Guard Reserve''; and (3) inserting before the semicolon at the end the following: ``; or (ii) in the United States Coast Guard Reserve for such period following that date of graduation as may be established by the Secretary of the department in which the Coast Guard is operating, in the case of an individual that participates in the Coast Guard Maritime Academy Reserve Training Program''. (c) Penalties for Failure To Fulfill Incentive Payment Agreement.-- Section 1304(g) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(g)) is amended-- (1) in paragraph (4) by inserting ``, except as provided in paragraph (8),'' after ``such individual may''; (2) in paragraph (5) by inserting ``, except as provided in paragraph (8),'' after ``such individual may''; and (3) by adding at the end the following: ``(8)(A) Paragraphs (4) and (5) shall not apply to a failure to fulfill a part of an agreement, by an individual who-- ``(i) is enlisted in the United States Coast Guard Reserve; and ``(ii) participates in the Coast Guard Maritime Academy Reserve Training Program. ``(B) If the Secretary determines that an individual described in subparagraph (A) has failed to fulfill any part of the agreement (required by paragraph (1)) described in paragraph (3), the individual may be ordered to active duty in the Coast Guard to serve for a period of time determined by the Commandant of the Coast Guard, not to exceed 2 years. In cases of hardship as determined by the Secretary, the Secretary may waive this subparagraph.''. (d) Coast Guard Maritime Academy Reserve Training Program Defined.--Section 1304(g) of the Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(g)), as amended by this section, is further amended by adding at the end the following: ``(9) In this subsection, the term `Coast Guard Maritime Academy Reserve Training Program' means that program established by the Commandant of the Coast Guard, as in effect on the date of the enactment of the Maritime Administration Authorization Act for Fiscal Year 1995.''. SEC. 209. MERCHANT SHIP SALES ACT OF 1946 AMENDMENT. Section 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1744) is amended as follows: (1) In subsection (b)(2) by striking ``Secretary of the Navy,'' and inserting ``Secretary of Defense,''. (2) By striking subsection (c) and redesignating subsection (d) as subsection (c). SEC. 210. REEMPLOYMENT RIGHTS FOR CERTAIN MERCHANT SEAMEN. (a) In General.--Title III of the Merchant Marine Act, 1936 (46 App. U.S.C. 1131) is amended by inserting after section 301 the following new section: ``Sec. 302. (a) An individual who is certified by the Secretary of Transportation under subsection (c) shall be entitled to reemployment rights and other benefits substantially equivalent to the rights and benefits provided for by chapter 43 of title 38, United States Code, for any member of a Reserve component of the Armed Forces of the United States who is ordered to active duty. ``(b) An individual may submit an application for certification under subsection (c) to the Secretary of Transportation not later than 45 days after the date the individual completes a period of employment described in subsection (c)(1)(A) with respect to which the application is submitted. ``(c) Not later than 20 days after the date the Secretary of Transportation receives from an individual an application for certification under this subsection, the Secretary shall-- ``(1) determine whether or not the individual-- ``(A) was employed in the activation or operation of a vessel-- ``(i) in the National Defense Reserve Fleet maintained under section 11 of the Merchant Ship Sales Act of 1946, in a period in which that vessel was in use or being activated for use under subsection (b) of that section; ``(ii) that is requisitioned or purchased under section 902 of this Act; or ``(iii) that is owned, chartered, or controlled by the United States and used by the United States for a war, armed conflict, national emergency, or maritime mobilization need (including for training purposes or testing for readiness and suitability for mission performance); and ``(B) during the period of that employment, possessed a valid license, certificate of registry, or merchant mariner's document issued under chapter 71 or chapter 73 (as applicable) of title 46, United States Code; and ``(2) if the Secretary makes affirmative determinations under paragraph (1) (A) and (B), certify that individual under this subsection. ``(d) For purposes of reemployment rights and benefits provided by this section, a certification under subsection (c) shall be considered to be the equivalent of a certificate referred to in paragraph (1) of section 4301(a) of title 38, United States Code.''. (b) Application.--The amendment made by subsection (a) shall apply to employment described in section 302(c)(1)(A) of the Merchant Marine Act, 1936, as amended by subsection (a), occurring after August 2, 1990. (c) Employment Ending Before Enactment.--Notwithstanding subsection (b) of section 302 of the Merchant Marine Act, 1936, as amended by this Act, an individual who, in the period beginning August 2, 1990, and ending on the date of the enactment of this Act, completed a period of employment described in subsection (c)(1)(A) of that section may submit an application for certification under subsection (c) of that section with respect to that employment not later than 45 days after the date of the enactment of this Act. (d) Regulation.--Not later than 120 days after the date of the enactment of this Act, the Secretary of Transportation shall issue regulations implementing this section. SEC. 211. PILOT PROGRAM ON SEALIFT TRAINING. The Secretary of Transportation shall establish, subject to the availability of appropriations in addition to the amount authorized to be appropriated under section 102(a)(2), a 3-year period pilot program for Sealift Training at the Massachusetts Maritime Academy. SEC. 212. MASSACHUSETTS CENTER FOR MARINE ENVIRONMENTAL PROTECTION. The Secretary of Transportation shall pay, subject to the availability of appropriations in addition to the amount authorized to be appropriated under section 102, $242,000 to the Massachusetts Maritime Academy for assistance to the Massachusetts Center for Marine Environmental Protection. SEC. 213. REPORT ON SEALIFT MANPOWER MOBILIZATION PROGRAM. Not later than 6 months after the date of the enactment of this Act, the Secretary of Transportation shall submit a report to the Congress on-- (1) the feasibility of conducting on Ready Reserve Force vessels a program to familiarize civilian merchant mariners with the operation of those vessels, for the purpose of facilitating national defense mobilizations involving those vessels; and (2) the ability of the Coast Guard to track the availability of qualified civilian merchant mariners for service on those vessels during those mobilizations. SEC. 214. VESSEL DOCUMENTATION. Notwithstanding section 12108 of title 46, United States Code, the Secretary of Transportation may issue a certificate of documentation with appropriate endorsement for employment in the fisheries for the vessel ABORIGINAL (United States official number 942118). SEC. 215. MARITIME POLICY REPORT. (a) Report.--The Secretary of Transportation shall transmit to the Congress a report setting forth the Department of Transportation's policies for the 5-year period beginning October 1, 1994, with respect to-- (1) fostering and maintaining a United States merchant marine capable of meeting economic and national security requirements; (2) improving the vitality and competitiveness of the United States merchant marine and the maritime industrial base, including ship repairers, shipbuilders, ship manning, ship operators, and ship suppliers; (3) reversing the precipitous decrease in the number of ships in the United States-flag fleet and the Nation's shipyard and repair capability; (4) stabilizing and eventually increasing the number of mariners available to crew United States merchant vessels; (5) achieving adequate manning of merchant vessels for national security needs during a mobilization; (6) ensuring that sufficient civil maritime resources will be available to meet defense deployment and essential economic requirements in support of our national security strategy; (7) ensuring that the United States maintains the capability to respond unilaterally to security threats in geographic areas not covered by alliance commitments and otherwise meets sealift requirements in the event of crisis or war; (8) ensuring that international agreements and practices do not place United States maritime industries at an unfair competitive disadvantage in world markets; (9) ensuring that Federal agencies promote, through efficient application of laws and regulations, the readiness of the United States merchant marine and supporting industries; and (10) any other relevant maritime policies. (b) Date of Transmittal.--The report required under subsection (a) shall be transmitted along with the President's budget submission, pursuant to section 1105 of title 31, United States Code, for fiscal year 1996. SEC. 216. TITLE XI LOAN GUARANTEES. Title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.) is amended-- (1) in section 1101(b), by striking ``owned by citizens of the United States''; (2) in section 1104B(a), in the material preceding paragraph (1), by striking ``owned by citizens of the United States''; and (3) in section 1110(a), by striking ``owned by citizens of the United States''. SEC. 217. STUDY OF FEASIBILITY OF SHIP REPAIR DIFFERENTIAL ASSISTANCE PROGRAM. (a) Study.--The Secretary of Transportation shall conduct a study of the feasibility of establishing a program of financial assistance to qualified ship repair yards, to make those yards more competitive in international ship repair markets by paying to those yards the difference between the cost of repairing vessels in those yards and the cost of repairing vessels in foreign ship repair yards. (b) Report.--The Secretary of Transportation shall submit to the Congress by not later than 1 year after the date of the enactment of this Act a report on the findings and recommendations of the study required by subsection (a). (c) Qualified Ship Repair Yard Defined.--For purposes of this section, the term ``qualified ship repair yard'' has the meaning given that term in section 118(d). SEC. 218. QUALIFIED SHIP REPAIR YARD MODERNIZATION ASSISTANCE. (a) Grant Authority.--The Secretary of Transportation may use available amounts to make grants to qualified ship repair yards to pay 75 percent of the cost of acquiring advanced ship repair technology and modern ship repair technology. (b) Condition of Assistance.--As a condition of receiving a grant under this section, the Secretary shall require that a qualified ship repair yard provide, in cash contributions, 25 percent of the costs incurred in acquiring advanced ship repair technology and modern ship repair technology with the grant. (c) Priority.--In making grants under this section, the Secretary shall give priority to qualified ship repair yards for which assistance under this section will permit the performance of ship repairs more efficiently and in a manner that is more competitive with foreign ship repair yards. (d) Definitions.--For purposes of this section: (1) Advanced ship repair technology.--The term ``advanced ship repair technology'' includes-- (A) numerically controlled machine tools, robots, automated process control equipment, computerized flexible manufacturing systems, associated computer software, and other technology for improving ship repair and related industrial production which advance the state-of-the-art; and (B) novel techniques and processes designed to improve ship repair 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) Modern ship repair technology.--The term ``modern ship repair technology'' means the best available proven technology, techniques, and processes appropriate to enhancing the productivity of ship repair yards. (3) Qualified ship repair yard defined.--The term ``qualified ship repair yard'' means a shipyard located in the United States that meets the eligibility qualification requirements for obtaining and retaining a Master Ship Repair Agreement with the United States Navy. (e) Authorization of Appropriations.--For grants under this section there are authorized to be appropriated to the Secretary of Transportation $17,500,000 for fiscal year 1995, to remain available until expended. SEC. 219. GREAT LAKES ENDORSEMENTS. (a) Repeal of Great Lakes Endorsement.-- (1) Section 12107 of title 46, United States Code, is repealed. (2) The analysis at the beginning of chapter 121 of title 46, United States Code, is amended by striking the item relating to section 12107. (3) Section 12101(b)(3) of title 46, United States Code, is repealed. (b) Conforming Amendment.--Section 4370(a) of the Revised Statutes of the United States (46 App. U.S.C. 316(a)) is amended by striking ``or 12107''. (c) Additional Conforming Amendments.-- (1) Section 2793 of the Revised Statutes of the United States (46 App. U.S.C. 111, 123) is amended-- (A) by striking ``coastwise, Great Lakes endorsement'' and all that follows through ``foreign ports,'' and inserting ``registry endorsement, engaged in foreign trade on the Great Lakes or their tributary or connecting waters in trade with Canada,''; and (B) by striking ``, as if from or to foreign ports''. (2) The Act of March 8, 1910 (46 App. U.S.C. 132; 32 Stat. 234, chapter 86), is amended by striking ``shall be exempt'' and all that follows through the end of the section and inserting ``shall be exempt from section 36(a) of the Act of August 5, 1909 (36 Stat. 111).''. (d) Effective Date.--The amendments made by this section shall take effect October 1, 1994. TITLE III--TONNAGE DUTIES SEC. 301. FINDINGS AND PURPOSES. (a) Findings.--The Congress finds the following: (1) The Coast Guard-- (A) will spend over $400,000,000 in fiscal year 1995 conducting search and rescue operations far into the Atlantic and Pacific Oceans and the Gulf of Mexico to protect life and property on United States and foreign-flag vessels; (B) inspects vessels of all nations to ensure their compliance with international treaties and conventions; (C) will spend over $470,000,000 in fiscal year 1995 providing navigational aids to vessels from around the world through the operation of-- (i) LORAN, OMEGA, and the Differential Global Positioning System; and (ii) over 46,000 lighthouses, buoys, daybeacons, fog signals, radar reflectors and Vessel Traffic Service systems; and (D) will spend over $86,000,0000 in fiscal year 1995 providing icebreaking services for vessels from all nations. (2) It is reasonable for vessel owners of all nations that benefit from these services, including owners of United States- flag vessels, to pay tonnage duties to help offset the cost of providing these services. (b) Purpose.--The purpose of this title is to increase the tonnage duties imposed on vessels entering the United States to help offset the cost of providing Coast Guard services to those vessels. SEC. 302. INCREASE IN TONNAGE DUTIES. (a) Increased Duties.--Section 36 of the Act of August 5, 1909 (46 App. U.S.C. 121, 36 Stat. 111), is amended-- (1) by designating the first paragraph as subsection (a) and amending it to read as follows: ``(a) Tonnage Duty Imposed on Certain Entries.-- ``(1) Duty imposed.--There is imposed on a vessel making an entry described in paragraph (2) before fiscal year 2005 a duty of 38 cents per ton, except that for any vessel the duty under this paragraph shall not apply with respect to more than 25 entries by the vessel in any 12-month period. ``(2) Entry described.--An entry referred to in subparagraph (A) is any of the following: ``(A) Formal entry from foreign port or place.--A formal entry in any port of the United States from any foreign port or place, other than an entry by a vessel that is in distress or is not engaged in trade. ``(B) Other entry.--An entry by a vessel that departs a United States port or place and returns to the same port or place without being entered in the United States from another port or place, other than-- ``(i) an entry by a vessel of the United States, a recreational vessel, or a barge (as those terms are defined in section 2101 of title 46, United States Code); and ``(ii) an entry by a vessel that is in distress or is not engaged in trade. ``(3) Offsetting receipts of coast guard.--Amounts received by the United States as duty imposed under this subsection shall be deposited in the general fund of the Treasury as offsetting receipts of the department in which the Coast Guard is operating and ascribed to Coast Guard activities.''; and (2) by designating the remainder of the section as subsection (b). (b) Effective Date.--The amendments made by subsection (a) shall take effect October 1, 1994. SEC. 303. CONTRACT AUTHORITY. (a) Requirement To Enter Agreements.--The Secretary of Transportation shall expeditiously enter into agreements under the Maritime Security and Competitiveness Act of 1993. However, the Secretary of Transportation may not obligate more than $1,350,000,000 in total contracts under the Maritime Security and Competitiveness Act of 1993 or this Act between October 1, 1994, and September 30, 2004. (b) Limitation on Outlays.--The Secretary of Transportation shall not enter into any agreements under the Maritime Security and Competitiveness Act of 1993 or this Act that would result in total payments under such agreements for any fiscal year in excess of the limitations in the following table. In the case of The limitation fiscal year: (in millions) is: 1995....................................... $105 1996....................................... $105 1997....................................... $105 1998....................................... $105 1999....................................... $155 2000....................................... $155 2001....................................... $155 2002....................................... $155 2003....................................... $155 2004....................................... $155. (c) Limitation on Application.--Subsections (a) and (b) do not apply to the extent additional amounts are provided by appropriation laws. SEC. 304. AUTHORIZATION OF ADDITIONAL APPROPRIATIONS. In addition to amounts otherwise available, there are authorized to be appropriated to the Secretary of Transportation such amounts as may be necessary for entering into and making payments under agreements under the Maritime Security and Competitiveness Act of 1993. SEC. 305. CONTINUING AVAILABILITY. Amounts available or authorized to be appropriated under this title shall remain available until expended. SEC. 306. PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS. (a) Sense of Congress.--It is the sense of the Congress that, to the greatest extent practicable, all equipment and products purchased with funds made available in this Act should be American-made. (b) Notice Requirement.--In providing financial assistance to, or entering into any contract with, any entity using funds made available in this Act, the head of each Federal agency, to the greatest extent practicable, shall provide to such entity a notice describing the statement made in subsection (a) by the Congress. Passed the House of Representatives August 2, 1994. Attest: DONNALD K. ANDERSON, Clerk. HR 4003 RFS----2 HR 4003 RFS----3 HR 4003 RFS----4 HR 4003 RFS----5 HR 4003 RFS----6 HR 4003 RFS----7 HR 4003 RFS----8