[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1262 Reported in Senate (RS)]
Calendar No. 361
108th CONGRESS
1st Session
S. 1262
[Report No. 108-184]
To authorize appropriations for fiscal years 2004, 2005, and 2006 for
certain maritime programs of the Department of Transportation, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 13, 2003
Mr. McCain introduced the following bill; which was read twice and
referred to the Committee on Commerce, Science, and Transportation
November 3, 2003
Reported by Mr. McCain, with amendments and an amendment to the title
[Omit the part struck through and insert the part printed in italic]
_______________________________________________________________________
A BILL
To authorize appropriations for fiscal years 2004, 2005, and 2006 for
certain maritime programs of the Department of Transportation, 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 Administration
Authorization Act of 2003''.
TITLE I--MARAD REAUTHORIZATION
<DELETED>SEC. 2. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS 2004,
2005, AND 2006.</DELETED>
SEC. 101. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS 2004, 2005,
2006, 2007, AND 2008.
There are authorized to be appropriated to the Secretary of
Transportation for the Maritime Administration--
(1) for expenses necessary for operations and training
activities, not to exceed $104,400,000 for the fiscal year
ending September 30, 2004, $106,000,000 for the fiscal year
ending September 2005, and $109,000,000 for the fiscal year
ending <DELETED>2006; </DELETED>September 30, 2006,
$111,000,000 for the fiscal year ending September 30, 2007, and
$113,000,000 for the fiscal year ending September 30, 2008;
<DELETED> (2) for administrative expenses related to loan
guarantee commitments under title XI of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1271 et seq.), $4,498,000 for each of
fiscal years 2004, 2005, 2006, 2007, and 2008; and</DELETED>
(2) for expenses under the loan guarantee program
authorized by title XI of the Merchant Marine Act, 1936 (46
U.S.C. App. 1271 et. seq.), $56,000,000 for each of fiscal
years 2004, 2005, 2006, 2007, and 2008 of which--
(A) $50,000,000 shall be for the cost (as defined
in section 502(5) of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a(5))) of loan guarantees under the
program; and
(B) $6,000,000 shall be for administrative expenses
related to loan guarantee commitments under the
program; and
(3) for ship disposal, $11,422,000 for each of fiscal years
2004, 2005, and <DELETED>2006. </DELETED>2006, and $12,000,000
for each of fiscal years 2007 and 2008.
<DELETED>SEC. 3. CONVEYANCE OF OBSOLETE VESSELS UNDER TITLE V, MERCHANT
MARINE ACT, 1936.</DELETED>
SEC. 102. CONVEYANCE OF OBSOLETE VESSELS UNDER TITLE V, MERCHANT MARINE
ACT, 1936.
Section 508 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1158)
is amended--
(1) by inserting ``(a) Authority To Scrap or Sell Obsolete
Vessels.--'' before ``If''; and
(2) by adding at the end the following:
2 ``(b) Authority To Convey Vessels.--
``(1) In general.--Notwithstanding section 510(j) of this
Act, the Secretary of Transportation may convey the right,
title, and interest of the United States Government in any
vessel of the National Defense Reserve Fleet that has been
identified by the Secretary as an obsolete vessel of
insufficient value to warrant its further preservation, if--
``(A) the recipient is a non-profit organization, a
State, Commonwealth, or possession of the United States
or any municipal corporation or political subdivision
thereof, or the District of Columbia;
``(B) the recipient agrees not to use, or allow
others to use, the vessel for commercial transportation
purposes;
``(C) the recipient agrees to make the vessel
available to the Government whenever the Secretary
indicates that it is needed by the Government;
``(D) the recipient agrees to hold the Government
harmless for any claims arising from exposure to
asbestos, polychlorinated biphenyls, lead paint, or
other hazardous substances after conveyance of the
vessel, except for claims arising from use of the
vessel by the Government;
``(E) the recipient has a conveyance plan and a
business plan, each of which have been submitted to and
approved by the Secretary; and
``(F) the recipient has provided proof, as
determined by the Secretary, of resources sufficient to
accomplish the transfer, necessary repairs and
modifications, and initiation of the intended use of
the vessel.
``(2) Other equipment.--At the Secretary's discretion,
additional equipment from other obsolete vessels of the
National Defense Reserve Fleet may be conveyed to assist the
recipient with maintenance, repairs, or modifications.
``(3) Additional terms.--The Secretary may require any
additional terms the Secretary considers appropriate.
``(4) Delivery of vessel.--If conveyance is made under this
subsection the vessel shall be delivered to the recipient at a
time and place to be determined by the Secretary. The vessel
shall be conveyed in an `as is' condition.
``(5) Limitations.--If at any time prior to delivery of the
vessel to the recipient, the Secretary determines that a
different disposition of a vessel would better serve the
interests of the Government, the Secretary shall pursue the more
favorable disposition of the obsolete vessel and shall not be liable
for any damages that may result from an intended recipient's reliance
upon a proposed transfer.''.
<DELETED>SEC. 4. CARGO PREFERENCE UNDER TITLE IX.</DELETED>
<DELETED> (a) Construction of U.S.-Flag Tank Ships.--Section
901(b)(1) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1241(b)(1))
is amended by striking ``three years:'' and all that follows and
inserting ``3 years. Notwithstanding the preceding sentence, the term
`privately owned United States-flag commercial vessel' shall include a
United States documented self-propelled tank vessel when the owner of
such a vessel has notified the Maritime Administration in writing of
the existence of an executed contract between the owner and a United
States shipyard for the construction of 2 or more self-propelled,
double hulled tank vessels to be documented under the laws of the
United States, each to be capable of carrying more than 2 types of
refined petroleum products. The preceding sentence shall apply to such
a privately owned United States-flag commercial vessel for a 3-year
period commencing on the date the contract is executed for construction
of the vessels and shall continue to apply to the vessel throughout the
3-year period so long as the vessel remains documented under the laws
of the United States.''.</DELETED>
<DELETED> (b) Conforming Cargo Preference Year to Federal Fiscal
Year.--Section 901b(c)(2) of the Merchant Marine Act, 1936 (46 U.S.C
App. 1241f(c)(2)) is amended by striking ``1986.'' and inserting
``1986, the 18-month period beginning April 1, 2002, and the 12-month
period beginning October 1, 2003, and each year
thereafter.''.</DELETED>
SEC. 103. CARGO PREFERENCE.
Section 901b(c)(2) of the Merchant Marine Act, 1936 (46 U.S.C App.
1241f(c)(2)) is amended by striking ``1986.'' and inserting ``1986, the
18-month period beginning April 1, 2002, and the 12-month period
beginning October 1, 2003, and each year thereafter.''.
<DELETED>SEC. 5. EQUITY PAYMENTS BY OBLIGOR FOR DISBURSEMENT PRIOR TO
TERMINATION OF ESCROW AGREEMENT UNDER TITLE XI.</DELETED>
SEC. 104. EQUITY PAYMENTS BY OBLIGOR FOR DISBURSEMENT PRIOR TO
TERMINATION OF ESCROW AGREEMENT UNDER TITLE XI.
(a) In General.--Section 1108 of the Merchant Marine Act, 1936 (46
U.S.C. App. 1279a) is amended by adding at the end the following:
``(g) Payments Required Before Disbursement.--
``(1) In general.--No disbursement shall be made under
subsection (b) to any person until the total amount paid by or
for the account of the obligor from sources other than the
proceeds of the obligation equals at least 25 per centum or
12\1/2\ per centum, whichever is applicable under section
1104A, of the actual cost of the vessel. The Secretary shall
establish a system of controls, including automated controls,
to ensure that no loan funds are disbursed to a shipowner or
shipyard owner before the shipowner or shipyard owner meets the
requirement of the preceding sentence.
``(2) Documented proof of progress requirement.--The
Secretary shall, by regulation, establish a transparent,
independent, and risk-based process for verifying and
documenting the progress of projects under construction before
disbursing guaranteed loan funds. At a minimum, the process
shall require documented proof of progress in connection with
the construction, reconstruction, or reconditioning of a vessel
or vessels before disbursements are made from the escrow fund.
The <DELETED>regulations shall </DELETED>Secretary may require
that the obligor provide a certificate from an independent
party certifying that the requisite progress in construction,
reconstruction, or reconditioning has taken place.''.
(b) Definition of Actual Cost.--Section 1101(f) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1271(f)) is amended to read as
follows:
``(f) Actual Cost Defined.--The term `actual cost' means the sum
of--
``(1) all amounts paid by or for the account of the obligor
as of the date on which a determination is made under section
1108(g)(1); and
``(2) all amounts that the Secretary reasonably estimates
that the obligor will become obligated to pay from time to time
thereafter, for the construction, reconstruction, or
reconditioning of the vessel, including guarantee fees that
will become payable under section 1104A(e) in connection with
all obligations issued for construction, reconstruction, or
reconditioning of the vessel or equipment to be delivered, and
all obligations issued for the delivered vessel or
equipment.''.
<DELETED>SEC. 6. WAIVERS OF PROGRAM REQUIREMENTS UNDER TITLE
XI.</DELETED>
SEC. 105. WAIVERS OF PROGRAM REQUIREMENTS UNDER TITLE XI.
Section 1104A(d) of the Merchant Marine Act, 1936 (46 U.S.C. App.
1274(d)) is amended by redesignating paragraph (4) as paragraph (5),
and inserting after paragraph (3) the following:
``(4) The Secretary shall promulgate regulations concerning
circumstances under which waivers of or exceptions to otherwise
applicable regulatory requirements concerning financial
condition can be made. The regulations shall require that--
<DELETED> ``(A) a waiver of otherwise applicable
regulatory requirements be made only with the
documented concurrence of program offices with
expertise in economic, technical, and financial aspects
of the review process;</DELETED>
``<DELETED>(B) </DELETED>(A) the economic soundness
requirements set forth in paragraph (1)(A) of this
subsection are met after the waiver of the financial
condition requirement; and
``<DELETED>(C) </DELETED>(B) the wavier shall
provide for the imposition of other requirements on the
obligor designed to compensate for the increased risk
associated with the obligor's failure to meet
regulatory requirements applicable to financial
condition.''.
<DELETED>SEC. 7. PROJECT MONITORING UNDER TITLE XI.</DELETED>
SEC. 106. PROJECT MONITORING UNDER TITLE XI.
(a) Project Monitoring.--Section 1104A of the Merchant Marine Act,
1936 (46 U.S.C. App. 1274) is amended by adding at the end the
following:
``(k) Monitoring.-- The Secretary shall monitor the financial
conditions and operations of the obligor on a regular basis during the
term of the guarantee. The Secretary shall document the results of the
monitoring on <DELETED>a quarterly or monthly </DELETED>an annual or
quarterly basis depending upon the condition of the obligor. If the
Secretary determines that the financial condition of the obligor
warrants additional protections to the Secretary, then the Secretary
shall take appropriate action under subsection (m) of this section. If
the Secretary determines that the financial condition of the obligor
jeopardizes its continued ability to perform its responsibilities in
connection with the guarantee of obligations by the Secretary, the
Secretary shall make an immediate determination whether default should
take place and whether further measures described in subsection (m)
should be taken to protect the interests of the Secretary while
insuring that program objectives are met.''.
(b) Separation of Duties and Other Requirements.--Section 1104A of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1274), as amended by
subsection (a), is further amended by adding at the end the following:
``(l) Review of Applications.--No commitment to guarantee, or
guarantee of, an obligation shall be made by the Secretary unless the
Secretary certifies that a full and fair consideration of all the
regulatory requirements, including economic soundness and financial
requirements applicable to obligors and related parties, <DELETED>has
been made through a documented independent assessment conducted by
offices with expertise in technical, economic, and financial aspects of
the loan application process. </DELETED>and a thorough assessment of
the technical, economic, and financial aspects of the loan application
has been made.
``(m) Agreement With Obligor.--The Secretary shall include
provisions in loan agreements with obligors that provide additional
authority to the Secretary to take action to limit potential losses in
connection with defaulted loans or loans that are in jeopardy due to
the deteriorating financial condition of obligors. Provisions that the
Secretary shall include in loan agreements include requirements for
additional collateral or greater equity contributions that are
effective upon the occurrence of verifiable conditions relating to the
obligors financial condition or the status of the vessel or shipyard
project.''.
<DELETED>SEC. 8. DEFAULTS UNDER TITLE XI.</DELETED>
SEC. 107. DEFAULTS UNDER TITLE XI.
<DELETED>(a) Actions To Be Taken in Event of Default.--
</DELETED>Section 1105 of the Merchant Marine Act, 1936 (46 U.S.C. App.
1275) is amended by adding at the end the following:
``(f) Default Response.--In the event of default on a obligation,
the Secretary shall conduct operations under this title in a manner
which--
``(1) maximizes the net present value return from the sale
or disposition of assets associated with the obligation;
``(2) minimizes the amount of any loss realized in the
resolution of the guarantee;
``(3) ensures adequate competition and fair and consistent
treatment of offerors; and
``(4) requires appraisal of assets by an independent
appraiser.''.
<DELETED> (b) Restrictions.--</DELETED>
<DELETED> (1) Section 1104A(d)(1)(A)(i) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1274 (d)(1)(A)(i)) is amended
by striking ``equipment for which a guarantee under this title
is in effect;'' and inserting ``equipment;''.</DELETED>
<DELETED> (2) Section 1104A(d)(1)(A) of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1274 (d)(1)(A)) is amended--
</DELETED>
<DELETED> (A) by striking ``and'' after the
semicolon in clause (v);</DELETED>
<DELETED> (B) by striking ``safety.'' in clause (vi)
and inserting ``safety; and''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(vii) the past performance of
the shipyard doing the construction on
commercial projects, including cost-over-runs
and on-time performance.''.</DELETED>
<DELETED>SEC. 9. 270-DAY DECISION PERIOD.</DELETED>
<DELETED> Section 1104A of the Merchant Marine Act, 1936 (46 U.S.C.
App. 1274), as amended by section 7, is amended by adding at the end
the following:</DELETED>
<DELETED> ``(n) 270-Day Decision.--The Secretary of Transportation
shall approve or deny an application for a loan guarantee under this
title within 270 days after the date on which the signed application is
received by the Secretary.''.</DELETED>
SEC. 108. DECISION PERIOD.
Section 1104A of the Merchant Marine Act, 1936 (46 U.S.C. App.
1274), as amended by section 106, is amended by adding at the end the
following:
``(n) Decision Period.--
``(1) In general.--The Secretary of Transportation shall
approve or deny an application for a loan guarantee under this
title within 270 days after the date on which the signed
application is received by the Secretary.
``(2) Extension.--Upon request by an applicant, the
Secretary may extend the 270-day period in paragraph (1) to a
date not later than 2 years after the date on which the signed
application for the loan guarantee was received by the
Secretary.''.
<DELETED>SEC. 10. LOAN GUARANTEES UNDER TITLE XI.</DELETED>
SEC. 109. LOAN GUARANTEES UNDER TITLE XI.
Section 1104A of the Merchant Marine Act, 1936 (46 U.S.C. App.
1274) is amended--
(1) by adding at the end of subsection (d)(1) the
following:
``(C) The Secretary may make a determination that
aspects of an application under this title require
independent analysis to be conducted by third party
experts due to risk factors associated with markets,
technology, financial structures, or other risk factors
identified by the Secretary. Any independent analysis
conducted pursuant to this provision shall be performed
by a party chosen by the Secretary.
``(D) Notwithstanding any other provision of this
title, the Secretary may make a determination that an
application under this title requires additional equity
because of increased risk factors associated with
markets, technology, financial structures, or other
risk factors identified by the Secretary.
<DELETED> ``(E) In determining whether to approve an
application under this title, the Secretary may
consider a proposed shipyard's past performance on
commercial projects including cost increases, quality
of work, and ability to meet work and delivery
schedules. After consideration of these factors the
Secretary may impose additional requirements on a
shipyard, require additional security, or disapprove an
application.</DELETED>
``<DELETED>(F) </DELETED>(E) The Secretary may
charge and collect fees to cover the costs of
independent analysis under subparagraph (C).
Notwithstanding section 3302 of title 31, United
States Code, any fee collected under this subparagraph shall--
``(i) be credit as an offesetting
collection to the account that finances the
administration of the loan guarantee program;
``(ii) shall be available for expenditure
only to pay the costs of activities and
services for which the fee is imposed; and
``(iii) shall remain available until
expended.''; and
(2) by striking ``(including for obtaining independent
analysis under subsection (d)(4)),'' in subsection (f).
<DELETED>SEC. 11. ANNUAL REPORT ON TITLE XI PROGRAM.</DELETED>
SEC. 110. ANNUAL REPORT ON TITLE XI PROGRAM.
The Secretary of Transportation shall report to Congress annually
on the loan guarantee program under title XI of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1271 et seq.). The reports shall include--
(1) the size, in dollars, of the portfolio of loans
guaranteed;
(2) the size, in dollars, of projects in the portfolio
facing financial difficulties;
(3) the number and type of projects covered;
(4) a profile of pending loan applications;
(5) the amount of appropriations available for new
guarantees;
(6) a profile of each project approved since the last
report; and
(7) a profile of any defaults since the last report.
<DELETED>SEC. 12. REVIEW OF TITLE XI LOAN GUARANTEE PROGRAM.</DELETED>
SEC. 111. REVIEW OF TITLE XI LOAN GUARANTEE PROGRAM.
(a) In General.--The Secretary of Transportation shall conduct a
comprehensive assessment of the human capital and other resource needs
in connection with the title XI loan guarantee program under the
Merchant Marine Act, 1936 (46 U.S.C. App. 1271 et seq.). In connection
with this assessment, the Secretary shall develop an organizational
framework for the program offices that insures that a clear separation
of duties is established among the loan application, project
monitoring, and default management functions.
(b) Program Enhancements.--
<DELETED>(1) Section 1103(h)(1) of the Merchant Marine Act,
1936 (46 U.S.C. App. 1273(h)(1)) is amended--
</DELETED> (1) Section 1103(h) of the Merchant Marine Act,
1936 (46 U.S.C. App. 1273(h) is amended--
(A) by striking ``(h)(1) The Secretary shall--''
and inserting the following:
``(h) Risk Factor Determinations.--
``(1) The Secretary shall--'';
(B) by moving the left margin of each paragraph,
subparagraph, and clause to the right by 2 ems;
<DELETED>(A) </DELETED>(C) by striking
``subsection'' in subparagraph (A) and inserting
``subsection, and update annually,'';
<DELETED>(B) </DELETED>(D) by inserting
``annually'' before ``determine'' in subparagraph (B);
<DELETED>(C) </DELETED>(E) by striking ``and''
after the semicolon in subparagraph (A);
<DELETED>(D) </DELETED>(F) by striking
``category.'' in subparagraph (B) and inserting
``category; and''; and
<DELETED>(E) </DELETED>(G) by adding at the end the
following:
``(C) ensure that each risk category is comprised
of loans that are relatively homogenous in cost and
share characteristics predictive of defaults and other
costs, given the facts known at the time of obligation
or committment, using a risk category system that is
based on historical analysis of program data and
statistical evidence concerning the likely costs of
defaults or other costs that expected to be associated
with the loans in the category.''.
(2) Section 1103(h)(2)(A) of that Act (46 U.S.C. App.
1273(h)(2)(A)) is amended by inserting ``and annually for
projects subject to a guarantee,'' after ``obligation,''.
(3) Section 1103(h)(3) of that Act (46 U.S.C. App.
1273(h)(3)) is amended by adding at the end the following:
``(K) A risk factor for concentration risk
reflecting the risk presented by an unduly large
percentage of loans outstanding by any 1 borrower or
group of affiliated borrowers.''.
(c) Report.--The Secretary shall report to the Senate Committee on
Commerce, Science, and Transportation and the House of Representatives
Committee on Armed Services on the results of the development of an
organizational framework under subsection (a) by January 2, 2004.
<DELETED> (d) Funding.--It is the sense of the Congress that no
further appropriations should be made for purposes of extending loan
guarantees under the title XI loan guarantee program of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1271 et seq.) until the Secretary of
Transportation has developed sufficient internal controls and resource
allocation to ensure that the loan guarantee program is efficiently and
effectively fulfilling the purposes for which it was established and
has updated default and recovery assumptions used in estimating the
credit subsidy costs of the program to more accurately reflect the
actual costs associated with the program.</DELETED>
<DELETED>SEC. 13. WAR RISK INSURANCE.</DELETED>
SEC. 112. WAR RISK INSURANCE.
(a) International Agreements.--Section 1205 of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1285) is amended by adding at the end the
following:
``(c) Insuring International Operations.--The Secretary of
Transportation is authorized, upon the request of the Secretary of
Defense or any other agency, with the approval of the President, to
make payments on behalf of the United States with regard to an
international sharing of risk agreement or any lesser obligation on the
part of the United States for vessels supporting operations of the
North Atlantic Treaty Organization or similar international
organization or alliance in which the United States is involved,
regardless of registration or ownership, and without regard to whether
the vessels are under contract with a department or agency of the
United States. In order to segregate moneys received and disbursed in
connection with an agreement authorized under this subsection, the
Secretary of Transportation shall establish a subaccount within the
insurance fund established under section 1208 of this Act.
``(d) Receipt of Contributions.--
``(1) In general.--Notwithstanding the provisions of
section 3302(b) of title 31, United States Code, if the
international agreements referenced in subsection (c) of this
section provide for the sharing of risks involved in mutual or
joint operations, contributions for losses incurred by the fund
subaccount or financed pursuant to section 1208 that are
received from foreign entities, may be deposited in the fund
subaccount.
``(2) Indemnity agreement.--Such risk sharing agreements
shall not affect the requirement that the Secretary of Defense
or a head of a department, agency, or instrumentality
designated by the President make an indemnity agreement with
the Secretary of Transportation under subsection (b) for a
waiver of premium on insurance obtained by a department, agency
or instrumentality of the United States Government.
``(3) Crediting of contributory payments.--If the Secretary
of Defense, or a designated head of a department, agency or
instrumentality, has made a payment to the Secretary of
Transportation on account of a loss, pursuant to an
indemnification agreement under subsection (b), and the
Secretary of Transportation subsequently receives from an
entity a contributory payment on account of the same loss,
pursuant to a risk sharing agreement referred to in paragraph
(1), the amount of the contribution shall be deemed to be a
credit in favor of the indemnifying department, agency, or
instrumentality against any amount that such department,
agency, or instrumentality owes or may owe to the Secretary of
Transportation under a subsequent indemnification agreement.''.
(b) Permanent Budgetary Resource.--Section 1208 of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1288) is amended by adding at the end
the following:
``(c) Authorization of Appropriations.--To the extent that the fund
balance is insufficient to fund current obligations arising under this
chapter, there are authorized to be appropriated to the Secretary of
Transportation such sums as may be necessary to pay such
obligations.''.
(c) Clerical Amendment.--The section heading for section 1205 of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1285) is amended to read
as follows:
``SEC. 1205. INSURANCE ON PROPERTY OF GOVERNMENT DEPARTMENTS, AGENCIES
AND INTERNATIONAL ORGANIZATIONS.''.
<DELETED>SEC. 14. MARITIME EDUCATION AND TRAINING.</DELETED>
SEC. 113. MARITIME EDUCATION AND TRAINING.
(a) Cost of Education Defined.--Section 1302 of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1295a) is amended--
(1) by striking ``and'' after the semicolon in paragraph
(3);
(2) by striking ``States.'' in paragraph (4)(B) and
inserting ``States; and''; and
(3) by adding at the end the following:
``(5) the term `cost of education provided' means the
financial costs incurred by the Federal Government for
providing training or financial assistance to students at the
United States Merchant Marine Academy and the State maritime
academies, including direct financial assistance, room, board,
classroom academics, and other training activities.''.
(b) Commitment Agreements.--Section 1303(e) of the Merchant Marine
Act, 1936 (46 U.S.C. App. 1295b(e)) is amended--
(1) by striking ``Academy, unless the individual is
separated <DELETED>from </DELETED>by the'' in paragraph (1)(A);
(2) by striking paragraph (1)(C) and inserting the
following:
``(C) to maintain a valid license as an officer in the
merchant marine of the United States for at least 6 years
following the date of graduation from the Academy of such
individual, accompanied by the appropriate national and
international endorsements and certification as required by the
United States Coast Guard for service aboard vessels on
domestic and international voyages;'';
(3) by striking paragraph (1)(E)(iii) and inserting the
following:
``(iii) as a commissioned officer on active duty in
an armed force of the United States, as a commissioned
officer in the National Oceanic and Atmospheric
Administration, or other maritime-related employment
with the Federal Government which serves the national
security interests of the United States, as determined
by the Secretary; or'';
(4) by striking paragraph (2) and inserting the following:
``(2)(A) If the Secretary determines that any individual who has
attended the Academy for not less than 2 years has failed to fulfill
the part of the agreement required by paragraph (1)(A), such individual
may be ordered by the Secretary of Defense to active duty in one of the
armed forces of the United States to serve for a period of time not to
exceed 2 years. In cases of hardship as determined by the Secretary,
the Secretary may waive this provision in whole or in part.
``(B) If the Secretary of the Navy is unable or unwilling
to order an individual to active duty under subparagraph (A),
or if the Secretary of Transportation determines that
reimbursement of the cost of education provided would better
serve the interests of the United States, the Secretary may
recover from the individual the cost of education provided by
the Federal Government.'';
(5) by striking paragraph (3) and inserting the following:
``(3)(A) If the Secretary determines that an individual has failed
to fulfill any part of the agreement required by paragraph (1), as
described in subparagraphs (1)(B), (C), (D), (E), or (F), such
individual may be ordered to active duty to serve a period of time not
less than 3 years and not more than the unexpired portion, as
determined by the Secretary, of the service required by paragraph
(1)(E). The Secretary, in consultation with the Secretary of Defense,
shall determine in which service the individual shall be ordered to
active duty to serve such period of time. In cases of hardship, as
determined by the Secretary, the Secretary may waive this provision in
whole or in part.
``(B) If the Secretary of Defense is unable or unwilling to order
an individual to active duty under subparagraph (A), or if the
Secretary of Transportation determines that reimbursement of the cost
of education provided would better serve the interests of the United
States, the Secretary may recover from the individual the cost of
education provided in an amount proportionate to the unfulfilled
portion of the service obligation as determined by the Secretary. In
cases of hardship the Secretary may waive this provision in whole or in
part.''; and
(6) by redesignating paragraph (4) as paragraph (5) and
inserting after paragraph (3) the following:
``(4) To aid in the recovery of the cost of education provided by
the Federal Government pursuant to a commitment agreement under this
section, the Secretary may request the Attorney General to begin court
proceedings, or the Secretary may make use of the Federal debt
collection procedures in chapter 176 of title 28, United States Code,
or other applicable administrative remedies.''.
(c) Degrees Awarded.--Section 1303(g) of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295b(g)) is amended to read as follows:
``(g) Degrees Awarded.--
``(1) Bachelor's degree.--The Superintendent of the Academy
may confer the degree of bachelor of science upon any
individual who has met the conditions prescribed by the
Secretary and who, if a citizen of the United States, has
passed the examination for a merchant marine officer's license.
No individual may be denied a degree under this subsection
because the individual is not permitted to take such
examination solely because of physical disqualification.
``(2) Master's degree.--The Superintendent of the Academy
may confer a master's degree upon any individual who has met
the conditions prescribed by the Secretary. Any master's degree
program may be funded through non-appropriated funds. In order
to maintain the appropriate academic standards, the program
shall be accredited by the appropriate accreditation body. The
Secretary may make regulations necessary to administer such a
program.''.
(d) Student Incentive Payments.--Section 1304(g) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1295c(g)) is amended--
(1) by striking ``$3,000'' in paragraph (1) and inserting
``$4,000'';
(2) in paragraph (3)(A) by striking ``attending, unless the
individual is separated by such academy;'' and inserting
``attending;'';
(3) by striking paragraph (3)(C) and inserting the
following:
``(C) to maintain a valid license as an officer in the
merchant marine of the United States for at least 6 years
following the date of graduation from such State maritime
academy of such individual, accompanied by the appropriate
national and international endorsements and certification as
required by the United States Coast Guard for service aboard
vessels on domestic and international voyages;'';
(4) by striking paragraph (3)(E)(iii) and inserting the
following:
``(iii) as a commissioned officer on active duty in
an armed force of the United States, as a commissioned
officer in the National Oceanic and Atmospheric
Administration, or in other maritime-related employment
with the Federal Government which serves the national
security interests of the United States, as determined
by the Secretary; or'';
(5) by striking paragraph (4) and inserting the following:
``(4)(A) If the Secretary determines that an individual who has
accepted the payment described in paragraph (1) for a minimum of 2
academic years has failed to fulfill the part of the agreement required
by paragraph (1) and described in paragraph (3)(A), such individual may
be ordered by the Secretary of the Navy to active duty in the United
States Navy to serve for a period of time not to exceed 2 years. In
cases of hardship, as determined by the Secretary, the Secretary may
waive this provision in whole or in part.
``(B) If the Secretary of the Navy is unable or unwilling to order
an individual to active duty under subparagraph (A), or if the
Secretary of Transportation determines that reimbursement of the cost
of education provided would better serve the interests of the United
States, the Secretary may recover from the individual the cost of
education provided by the Federal Government.'';
(6) by striking paragraph (5) and inserting the following:
``(5)(A) If the Secretary determines that an individual has failed
to fulfill any part of the agreement required by paragraph (1), as
described in paragraphs (3)(B), (C), (D), (E), or (F), such individual
may be ordered to active duty to serve a period of time not less than 2
years and not more than the unexpired portion, as determined by the
Secretary, of the service required by paragraph (3)(E). The Secretary,
in consultation with the Secretary of Defense, shall determine in which
service the individual shall be ordered to active duty to serve such
period of time. In cases of hardship, as determined by the Secretary,
the Secretary may waive this provision in whole or in part.
``(B) If the Secretary of Defense is unable or unwilling to order
an individual to active duty under subparagraph (A), or if the
Secretary of Transportation determines that reimbursement of the cost
of education provided would better serve the interests of the United
States, the Secretary may recover from the individual the cost of
education provided in an amount proportionate to the unfulfilled
portion of the service obligation as determined by the Secretary. In
cases of hardship the Secretary may waive this provision in whole or in
part.''; and
(7) by redesignating paragraphs (6) and (7) as paragraphs
(7) and (8), respectively, and inserting after paragraph (5)
the following:
``(6) To aid in the recovery of the cost of education provided by
the Federal Government pursuant to a commitment agreement under this
section, the Secretary may request the Attorney General to begin court
proceedings, or the Secretary may make use of the Federal debt
collection procedures in chapter 176 of title 28, United States Code,
or other applicable administrative remedies.''.
(e) Awards and Medals.--Section 1306 of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295e) is amended by adding at the end the
following:
``(d) Awards and Medals.--The Secretary may establish and maintain
a medals and awards program to recognize distinguished service,
superior achievement, professional performance, and other commendable
achievement by personnel of the United States Maritime Service.''.
<DELETED>SEC. 15. PROHIBITION AGAINST CARRYING GOVERNMENT IMPELLED
CARGOES FOR VESSELS WITH SUBSTANDARD SECURITY
MEASURES.</DELETED>
SEC. 114. PROHIBITION AGAINST CARRYING GOVERNMENT IMPELLED CARGOES FOR
VESSELS WITH SUBSTANDARD SECURITY MEASURES.
Section 2302(e)(1) of title 46, United States Code, is amended--
(1) by inserting ``including violations for substandard
security measures,'' in subparagraph (A) after ``party,''; and
(2) by inserting ``including violations for substandard
security measures,'' in subparagraph (B) after ``party,''.
<DELETED>SEC. 16. AUTHORITY TO CONVEY OBSOLETE VESSELS TO U.S.
TERRITORIES AND FOREIGN COUNTRIES FOR REEFING.</DELETED>
SEC. 115. AUTHORITY TO CONVEY OBSOLETE VESSELS TO U.S. TERRITORIES AND
FOREIGN COUNTRIES FOR REEFING.
(a) Section 3 of the Act entitled ``An Act to authorize
appropriations for the fiscal year 1973 for certain maritime programs
of the Department of Commerce, and for related purposes.'' (16 U.S.C.
1220), Title 16, United States Code, is amended to read as follows:
``SEC. 3. PREPARATION OF VESSELS FOR USE AS ARTIFICIAL REEFS.
``(a) Guidance.--
``(1) In general.--Not later than September 30, 2003, the
Administrator of the Environmental Protection Agency and the
Secretary of Transportation, acting through the Maritime
Administration, shall jointly develop guidance recommending
environmental best management practices to be used in the
preparation of vessels for use as artificial reefs. Before
issuing the guidance, the Administrator and the Secretary shall
consult with interested Federal and State agencies.
``(2) Requirements.--The guidance shall--
``(A) recommend environmental best management
practices for the preparation of vessels that would
ensure that the use of vessels so prepared as
artificial reefs would be environmentally beneficial;
``(B) promote the nationally consistent use of such
practices; and
``(C) provide a basis for estimating the costs
associated with the preparation of vessels for use as
artificial reefs.
``(3) Use by federal agencies.--The guidance shall serve as
national guidance for Federal agencies preparing vessels for
use as artificial reefs.
``(4) Report.--The Secretary of Transportation shall submit
to Congress a report on the environmental best management
practices developed under paragraph (1) through the existing
ship disposal reporting requirements in section 3502 of the
Floyd D. Spence National Defense Authorization Act for Fiscal
Year 2001 (16 U.S.C. 5405 note). The report shall describe such
practices, and may include such other matters as the Secretary
considers appropriate.
``(b) Application Required.--
``(1) In general.--A State, commonwealth, possession of the
United States or foreign government may apply for any vessel of
the National Defense Reserve Fleet that has been identified by
the Secretary as an obsolete vessel of insufficient value to
warrant its further preservation in such a manner and form as
the Secretary shall prescribe. At a minimum, the application
shall state--
``(A) the location at which the applicant proposes
to sink the vessel or vessels;
``(B) the environmental goals to be achieved by the
use of the vessel or vessels; and
``(C) that the applicant agrees to hold the
Government harmless for any claims arising from
exposure to asbestos, polychlorinated biphenyls, lead
paint, or other hazardous substances after conveyance
of the vessel, except for claims arising from use of
the vessel by the Government.
``(2) States.--
``(A) Additional documentation required.--A State,
commonwealth, or possession of the United States shall
also provide to the Secretary and the Administrator in
its application documentation that the proposed use of
the particular vessel or vessels requested will comply
with all applicable water quality standards and will
benefit the environment in the vicinity of the proposed
reef, taking into account the guidance issued under
subsection (a) and other appropriate environmental
considerations.
``(B) EPA certification.--Before any vessel may be
used as an artificial reef, the State, commonwealth, or
possession of the United States shall demonstrate to
the Environmental Protection Agency, and that Agency
shall determine in writing, that the use of the vessel
as an artificial reef at the proposed location will be
environmentally beneficial.
``(3) Foreign governments.--A foreign government shall also
provide to the Secretary and the Administrator in its
application--
``(A) documentation of--
``(i) how the proposed use of the vessel or
vessels will benefit the environment; and
``(ii) remediation that the vessel will
undergo prior to use as an artificial reef; and
``(B) certification that such remediation shall
take into account the guidance issued under subsection
(a).
``(4) Determination of environmental benefit.--No obsolete
vessel shall be conveyed unless the Maritime Administration and
the Environmental Protection Agency jointly determine, in
writing, that the proposed remediation measures will ensure
that use of the vessel as an artificial reef will be
environmentally beneficial. The contract conveying the vessel
or vessels from Maritime Administration to the foreign
government shall require the use of the remediation measures
determined by Maritime Administration and the Environmental
Protection Agency to ensure that use of the vessel or vessels
as an artificial reef will be environmentally beneficial.
``(c) Application With Other Law.--Nothing in this section shall be
construed as affecting in any manner the application of any other
provision of law, including laws relating to the conveyance of obsolete
vessels, their distribution in commerce, or their use as artificial
reefs.''.
<DELETED>SEC. 17. MAINTENANCE OF CURRENT SAINT LAWRENCE SEAWAY
DEVELOPMENT CORPORATION SAFETY
RESPONSIBILITIES.</DELETED>
SEC. 116. MAINTENANCE OF CURRENT SAINT LAWRENCE SEAWAY DEVELOPMENT
CORPORATION SAFETY RESPONSIBILITIES.
Section 3(2) of the Ports and Waterways Safety Act (33 U.S.C.
1222(2)) is amended by striking ``operating.'' and inserting
``operating, except that `Secretary' means the Secretary of
Transportation with respect to the applicability of this Act to the
Saint Lawrence Seaway.''.
<DELETED>SEC. 18. USE OF INSURANCE PROCEEDS FOR REPAIRS AT UNITED
STATES MERCHANT MARINE ACADEMY.</DELETED>
SEC. 117. USE OF INSURANCE PROCEEDS FOR REPAIRS AT UNITED STATES
MERCHANT MARINE ACADEMY.
Notwithstanding section 3302 of title 31, United States Code, the
Maritime Administration may deposit into its operations and training
account (account number 69X1750) and use, for purposes otherwise
authorized by law and in addition to amounts otherwise appropriated,
the amount received by the Maritime Administration as insurance
proceeds as a result of the fire that occurred on December 16, 1996, at
the United States Merchant Marine Academy, Fitch Building.
<DELETED>SEC. 19. AVAILABILITY TO THE VESSEL OPERATIONS REVOLVING FUND
OF FUNDS FROM LAWSUITS AND SETTLEMENTS.</DELETED>
SEC. 118. AVAILABILITY TO THE VESSEL OPERATIONS REVOLVING FUND OF FUNDS
FROM LAWSUITS AND SETTLEMENTS.
The Vessel Operations Revolving Fund, created by the Third
Supplemental Appropriations Act, 1951 (65 Stat. 59), shall, after the
date of enactment of this Act, be credited with amounts received by the
United States from final judgments and dispute settlements that arise
from the operation of vessels in the National Defense Reserve Fleet,
including the Ready Reserve Force. Funds credited to the Fund under
this section shall be available until expended.
SEC. 119. ELIGIBILITY OF TANK VESSELS FOR THE MARITIME SECURITY
PROGRAM.
Section 652(o) of the Merchant Marine Act, 1936 (46 U.S.C. App
1187a(o)) is amended by adding at the end the following:
``(5) Limitations.--With respect to the eligibility of a
tank vessel that was not built in the United States--
``(A) the Secretary may award an operating
agreement for such vessel if--
``(i) a binding contract for construction
in the United States of a replacement vessel to
be operated under the operating agreement is
executed prior to the award of such operating
agreement; and
``(ii) the replacement vessel is eligible
to be included in the fleet under this section;
and
``(B) no payment under this subtitle may be made
for an existing tank vessel for which an operating
agreement is awarded under this paragraph after the
earlier of--
``(i) the date that is 4 years after the
award of the operating agreement for such tank
vessel; or
``(ii) the date of delivery of the
replacement tank vessel.''.
SEC. 120. CORRECTION OF 2002 COASTWISE TRADE AUTHORIZATION PROVISION.
Section 213(b) of the Maritime Policy Improvement Act of 2002 is
amended by striking ``transport and launch'' and inserting ``transport
or launch''.
TITLE II--MARITIME SECURITY FLEET PROGRAM
SEC. 201. SHORT TITLE.
This title may be cited as the ``Maritime Security Fleet Program
Reauthorization Act of 2003''.
SEC. 202. AMENDMENT OF MERCHANT MARINE ACT, 1936.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or a
repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1101 et seq.).
SEC. 203. CHANGES TO MARITIME SECURITY FLEET ESTABLISHMENT PROVISIONS.
Section 651 (46 U.S.C. App. 1187) is amended--
(1) by striking ``Transportation'' in subsection (a) and
inserting ``Transportation, in consultation with the Secretary
of Defense,'';
(2) by inserting ``commercially viable,'' after ``active,''
in subsection (a);
(3) by inserting ``(including a tank vessel)'' after
``vessel'' the first place it appears in the text of subsection
(b);
(4) by striking ``as an ocean common carrier;'' in
subsection (b)(1)(A) and inserting ``in oceangoing
transportation;'';
(5) by striking subparagraph (B) of subsection (b)(1) and
inserting the following:
``(B) is in commercial service, on charter to the
Department of Defense, or in other employment;'';
(6) by striking ``is determined by the Secretary to be'' in
subsection (b)(1)(C) and inserting ``the Secretary, in
conjunction with the Secretary of Defense, has determined to be
commercially viable and'';
(7) by striking so much of subsection (b)(2) as precedes
subparagraph (B) and inserting the following:
``(2)(A)(i) is a United States-documented vessel; and
``(ii) on the date an operating agreement covering the
vessel is entered into under this subtitle is 15 years of age
or less;
except that the Secretary of Transportation may waive the
application of clause (ii) if the Secretary, in conjunction
with the Secretary of Defense, determines that the waiver--
``(I) is in the national interest;
``(II) is appropriate to allow the maintenance of
the economic viability of the vessel and any associated
operating network;
``(III) is necessary due to the availability of
appropriate vessels that meet the operations and
commercial requirements; and
``(IV) is consistent with such other factors as the
Secretaries consider appropriate; or'';
(8) by striking ``or, after consultation'' in subsection
(b)(3) and inserting ``and, in conjunction'';
(9) by striking ``and'' after the semicolon in subsection
(b)(3);
(10) by striking ``Code.'' in subsection (b)(4) and
inserting ``Code; and'';
(11) by adding at the end of subsection (b) the following:
``(5) meets the requirements of paragraph (1), (2), (3), or
(4) of subsection (c).''; and
(12) by adding at the end the following:
``(c) Requirements Regarding Citizenship of Owners and
Charterers.--
``(1) Vessel owned and operated by section 2 citizens.--A
vessel meets the requirements of this paragraph if, during the
period of an operating agreement under this subtitle that
applies to the vessel, the vessel will be owned and operated by
a person that is a citizen of the United States under section 2
of the Shipping Act, 1916 (46 U.S.C. App. 802).
``(2) Vessel owned by documentation citizen and chartered
to section 2 citizen.--A vessel meets the requirements of this
paragraph if, during the period of an operating agreement under
this subtitle that applies to the vessel, the vessel will be--
``(A) owned by a person that is eligible to
document a vessel under chapter 121 of title 46, United
States Code; and
``(B) demise chartered to a person that is a
citizen of the United States under section 2 of the
Shipping Act, 1916 (46 U.S.C. App. 802).
``(3) Vessel owned and operated by defense contractor.--A
vessel meets the requirements of this paragraph if--
``(A) during the period of an operating agreement
under this subtitle that applies to the vessel, the
vessel will be owned and operated by a person that--
``(i) is eligible to document a vessel
under chapter 121 of title 46, United States
Code;
``(ii) operates or manages other United
States-documented vessels for the Secretary of
Defense, or charters other vessels to the
Secretary of Defense;
``(iii) has entered into a special security
agreement for purposes of this paragraph with
the Secretary of Defense;
``(iv) makes the certification described in
paragraph (4)(A)(ii)(III); and
``(v) in the case of a vessel described in
paragraph (2)(B), enters into an agreement
referred to in that paragraph; and
``(B) the Secretary and the Secretary of Defense
certify to the House Armed Services Committee and the
Senate Commerce, Science and Transportation Committee
that they concur with the certification, and have
reviewed and agree that there are no other legal,
operational, or other impediments that would prohibit
the contractor for the vessel from performing its
obligations under an operating agreement under this
subtitle.
``(4) Vessel owned by section 2 citizen and chartered to
documentation citizen.--A vessel meets the requirements of this
paragraph if--
``(A) during the period of an operating agreement
under this subtitle that applies to the vessel, the
vessel will be--
``(i) owned by a person that is a citizen
of the United States under section 2 of the
Shipping Act, 1916 (46 U.S.C. App. 802); and
``(ii) demise chartered to a person--
``(I) that is eligible to document
the vessel under chapter 121 of title
46, United States Code;
``(II) the chairman of the board of
directors, chief executive officer, and
a majority of the members of the board
of directors of which are United States
citizens, are appointed and subjected
to removal only upon approval by the
Secretary;
``(III) that certifies that there
are no treaties, statutes, regulations,
or other laws that would prohibit the
contractor for the vessel from
performing its obligations under an
operating agreement under this
subtitle; and
``(IV) the Secretary and the
Secretary of Defense certify to the
House Armed Services Committee and the
Senate Commerce, Science, and
Transportation Committee that they
concur with the certification, and have
reviewed and agree that there are no
other legal, operational, or other
impediments that would prohibit the
contractor for the vessel from
performing its obligations under an
operating agreement under this
subtitle; and
``(B) in the case of a vessel that will be
chartered to a person that is owned or controlled by
another person that is not a citizen of the United
States under section 2 of the Shipping Act, 1916 (46
U.S.C. App. 802), the other person enters into an
agreement with the Secretary not to influence the
operation of the vessel in a manner that will adversely
affect the interests of the United States.
``(d) Deemed Ownership.--Notwithstanding section 12102(d)(4) of
title 46, United States Code, in the case of a vessel that is owned by
a trust and that is demise chartered to a person meeting the
requirements of subsection (c)(4), the vessel is deemed, for purposes
of the eligibility requirements of this section, to be owned and
operated by a person that is a citizen of the United States under
section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802) if the trust
meets the requirements of paragraph (2) of section 12102(d) of title
46, United States Code, as qualified by paragraph (4) of that section.
``(e) Vessel Standards.--
``(1) Certificate of inspection.--A vessel used to provide
oceangoing transportation which the Secretary of the department
in which the Coast Guard is operating determines meets the
criteria of subsection (b) of this section but which, on the
date of enactment of the Maritime Security Fleet Program
Reauthorization Act of 2003, is not a documented vessel (as
that term is defined in section 12101 of title 46, United
States Code) shall be eligible for a certificate of inspection
if the Secretary determines that--
``(A) the vessel is classed by and designed in
accordance with the rules of the American Bureau of
Shipping, or another classification society accepted by
the Secretary;
``(B) the vessel complies with applicable
international agreements and associated guidelines, as
determined by the country in which the vessel was
documented immediately before becoming a documented
vessel (as defined in that section); and
``(C) that country has not been identified by the
Secretary as inadequately enforcing international
vessel regulations as to that vessel.
``(2) Continued eligibility for certificate.--Paragraph (1)
does not apply to a vessel after any date on which the vessel
fails to comply with the applicable international agreements
and associated guidelines referred to in paragraph (1)(B).
``(3) Reliance on classification society.--
``(A) In general.--The Secretary may rely on a
certification from the American Bureau of Shipping or,
subject to subparagraph (B), another classification
society accepted by the Secretary to establish that a
vessel is in compliance with the requirements of
paragraphs (1) and (2).
``(B) Foreign classification society.--The
Secretary may accept certification from a foreign
classification society under subparagraph (A) only--
``(i) to the extent that the government of
the foreign country in which the society is
headquartered provides access on a reciprocal
basis to the American Bureau of Shipping; and
``(ii) if the foreign classification
society has offices and maintains records in
the United States.''.
SEC. 204. CHANGES TO OPERATING AGREEMENTS REQUIREMENTS.
(a) In General.--Section 652 (46 U.S.C. App. 1187a) is amended--
(1) by striking ``which continues to operate under an
operating differential subsidy contract under subtitle A or''
in subsection (a);
(2) by striking ``trade'' the first place it appears in
subsection (b)(1)(A) and inserting ``trade, as that term is
defined in section 905(a) of this Act (without regard to `in
the context of section 607 of this Act concerning capital
construction funds and except that in the context of title V of
this Act concerning construction-differential subsidy,'),'';
(3) by resetting the text of subsection (c) following
``Relief.--'' as a new paragraph indented 2 ems from the left
margin and inserting ``(1) In general.--'' before ``A
contractor'';
(4) by adding at the end of subsection (c) the following:
``(2) Telecommunications equipment.--The telecommunications
and other electronic equipment on an existing vessel that is
redocumented under the laws of the United States for operation
under an operating agreement under this subtitle shall be
deemed to satisfy all Federal Communications Commission
equipment certification requirements, if--
``(A) such equipment complies with all applicable
international agreements and associated guidelines as
determined by the country in which the vessel was documented
immediately before becoming documented under the laws of the
United States;
``(B) that country has not been identified by the Secretary
as inadequately enforcing international regulations as to that
vessel; and
``(C) at the end of its useful life, such equipment will be
replaced with equipment that meets Federal Communications
Commission equipment certification standards.'';
(5) by striking ``2005.'' in subsection (d)(1) and
inserting ``2015.'';
(6) by striking ``1996 and'' in subsection (d)(2) and
inserting ``1996,'';
(7) by inserting ``for each of fiscal years 1997 through
2005, and $3,100,000'' in subsection (d)(2) after
``$2,100,000'';
(8) by striking ``subject to an operating differential
subsidy contract under subtitle A or'' in subsection (g)(1);
(9) by striking paragraph (3) of subsection (g) and
inserting the following:
``(3) beyond its economic life, as determined by the
Secretary.'';
(10) by striking ``7,500'' in subsection (h)(2) and
inserting ``2,500'';
(11) by inserting ``or bagged'' after ``bulk'' each place
it appears in subsection (h)(2);
(12) by striking ``cargo; and'' in subsection (h)(2) and
inserting ``cargo unless the vessel is owned and operated by
persons that are citizens of the United States under section 2
of the Shipping Act, 1916 (46 U.S.C. App. 802); and'';
(13) by redesignating subsections (j) through (p) as
subsections (l) through (r), respectively, and inserting after
subsection (i) the following:
``(j) Awarding New Agreements.--Subject to the availability of
appropriations and without regard to subsection (i), the Secretary of
Transportation shall enter into operating agreements according to a
priority determined by the applicant's record of owning and operating
vessels in accordance with section 2 of the Shipping Act, 1916 (46
U.S.C. App. 802) under the United States flag and its capability to
provide a sufficient level of military utility to the United States, as
determined jointly by the Secretary of Transportation and the Secretary
of Defense, based on the type and number of vessels, and non-vessel
assets the applicant offers to the program.
``(k) Reissuance of Operating Agreements.--Subject to the
availability of appropriations the Secretary of Transportation, in
conjunction with the Secretary of Defense, may reissue operating
agreements for participating fleet vessels. If the Secretary fails to
reissue an operating agreement, or if the Secretary does not receive an
application for reissuance of an operating agreement for a
participating fleet vessel, the operating agreement will be awarded
subject to subsection (j).'';
(14) by striking ``Secretary within'' in subsection (l), as
redesignated, and inserting ``Secretary and the Secretary of
Defense within'';
(15) by inserting ``(1)'' in subsection (m), as
redesignated, after ``authority.--'' and redesignating
paragraphs (1) and (2) as subparagraphs (A) and (B),
respectively;
(16) by adding at the end of subsection (m), as
redesignated, the following:
``(2) If the Secretary of Transportation makes a determination that
the requirements set forth in this section are not fulfilled while an
operating agreement is in effect, the Secretary may terminate the
agreement and the Secretary shall be free to enter into an operating
agreement with another party capable of fulfilling the requirements for
an operating agreement under this subtitle.'';
(17) by redesignating subsections (n) through (r), as
redesignated, as subsections (o) through (s), respectively, and
inserting after subsection (m), as redesignated, the following:
``(n) Replacement Vessel.--The Secretary shall require the
replacement of any participating fleet vessel that does not meet the
requirements of section 651(b), and the Secretary, in conjunction with
the Secretary of Defense, may approve the replacement of any
participating vessel if the replacement vessel is eligible under
section 651(b).''; and
(18) by adding at the end of subsection (o), as
redesignated, the following:
``(3) Procedures for new awards.--No later than 60 days after the
date of issuance of interim final rules (or, if earlier, 60 days after
the date of issuance of the a final rule under section 657), the
Secretary shall accept applications for enrollment of 13 additional
vessels in the Fleet, and within 90 days after receipt of an
application for enrollment of a vessel in the Fleet, the Secretary
shall enter into an operating agreement with the applicant or provide
in writing the reason for denial of that application.
``(4) Procedures for reissuance of operating agreements.--Not later
than 60 days after the date of issuance of interim final rules (or, if
earlier, 60 days after the date of issuance of the a final rule under
section 657), the Secretary shall accept applications, from any person
that is eligible to enter into an operating agreement for a
participating fleet vessel as of October 1, 2005, for the reissuance of
an operating agreement for a participating fleet vessel. Within 90 days
after receipt of an application for such a reissuance, the Secretary
shall enter into an agreement with the applicant, or provide in writing
a reason for the denial.
``(5) Limitation.--The Secretary may not award operating agreements
under this subtitle that require payments under this section for more
than 60 vessels in any fiscal year.''.
``(6) Effective date.--The effective date for an operating
agreement under paragraph (3) or (4) shall be October 1, 2005, except
for a vessel which is, on the date of entry into an operating
agreement, on charter to the United States Government, other than a
charter under section 653, the effective date shall be the expiration
or termination date of the Government charter covering the vessel, or
any earlier date the vessel is withdrawn from that contract or charter.
(b) Conforming Amendments.--Section 653 (46 U.S.C. App. 1187b) is
amended--
(1) by striking ``Secretary'' in subsection (b) and
inserting ``Secretary, in conjunction with the Secretary of
Defense,''; and
(2) by striking ``Transportation'' in subsection (c)(1) and
inserting ``Transportation, in conjunction with the Secretary
of Defense,''.
SEC. 205. PARTICIPATING FLEET VESSEL DEFINED.
Section 654 (46 U.S.C. App. 1187c) is amended by adding at the end
the following:
``(7) Participating fleet vessel.--The term `participating
fleet vessel' means--
``(A) any vessel that is owned or demise chartered
and that--
``(i) on October 1, 2005--
``(I) will meet the requirements of
paragraph (1), (2), (3), or (4) of
section 651(c); and
``(II) will be less than 25 years
of age, or less than 30 years of age in
the case of a LASH vessel; and
``(ii) on April 30, 2005, is covered by an
operating agreement under subtitle B of title
VI of the Merchant Marine Act, 1936 (46 U.S.C.
App. 1187 et seq.); or
``(B) any vessel that--
``(i) is a replacement for a vessel
described in subparagraph (A);
``(ii) is controlled by the person that
controls such replaced vessel;
``(iii) is eligible to be included in the
Fleet under section 651(b); and
``(iv) is approved by the Secretary and the
Secretary of Defense.''.
SEC. 206. AUTHORIZATION OF APPROPRIATIONS.
Section 655 (46 U.S.C. App. 1187d) is amended--
(1) by striking ``1996 and'' and inserting ``1996,'';
(2) by striking ``$100,000,000, for each fiscal year
thereafter through fiscal year 2005.'' and inserting
``$100,000,000 for each of fiscal years 1997 through 2005, and
such sums as may be necessary, not to exceed $186,000,000, for
each fiscal year thereafter through fiscal year 2015.''.
SEC. 207. NONCONTIGUOUS DOMESTIC TRADE.
Section 656 (46 U.S.C. App. 1187e) is amended to read as follows:
``SEC. 656. NONCONTIGUOUS DOMESTIC TRADES.
``(a) In General.--Except as otherwise provided in this section, no
contractor or related party shall receive payments pursuant to this
part during a period when it participates in a noncontiguous domestic
trade, except upon written permission of the Secretary of
Transportation that is granted after a hearing on the record under
section 554 of title 5, United States Code, and that states the
capacity that may be offered in that trade. The Secretary may grant
such written permission pursuant to written application of such
contractor or related party unless the Secretary finds that--
``(1) existing service in that trade is adequate; or
``(2) the service sought to be provided by the contractor
or related party--
``(A) would result in unfair competition to any
other person operating vessels in such noncontiguous
domestic trade, or
``(B) would be contrary to the objects and policy
of this Act.
``(b) Grandfather.--
``(1) Subsection (a) shall not apply to provision by a
contractor of service within the level of service provided by
that contractor as of the date of enactment of the Maritime
Security Fleet Program Reauthorization Act of 2003, adjusted
for increases in the real gross product of the State or
Commonwealth served since that date.
``(2) Subsection (a) shall not apply to operation by a
contractor of a self-propelled tank vessel in a noncontiguous
domestic trade, or to ownership by a contractor of an interest
in a self-propelled tank vessel that operates in a
noncontiguous domestic trade.
``(c) Definitions.--In this section:
``(1) Participates in a noncontiguous domestic trade.--The
term `participates in a noncontiguous domestic trade' means
directly or indirectly owns, charters, or operates a vessel
engaged in transportation of cargo between a point in the
contiguous 48 states and a point in Alaska, Hawaii, or Puerto
Rico.
``(2) Related party.--The term `related party' means--
``(A) a holding company, subsidiary, affiliate, or
associate of a contractor who is a party to an
operating agreement under this part; and
``(B) an officer, director, agent, or other
executive of a contractor or of a person referred to in
subparagraph (A).''.
SEC. 208. REGULATIONS.
Subtitle B of title VI of the Merchant Marine Act, 1936 (46 U.S.C.
App. 1187 et seq.) is amended by adding at the end the following:
``SEC. 657. REGULATIONS.
``(a) In General.--The Secretary of Transportation, in consultation
with the Secretary of Defense, may prescribe rules as necessary to
carry out this subtitle and the amendments made by this subtitle.
``(b) Interim Rules.--The Secretary of Transportation, in
consultation with the Secretary of Defense, may prescribe interim rules
necessary to carry out this subtitle. For this purpose the Secretary is
excepted from compliance with the notice and comment requirements of
section 553 of title 5, United States Code. All interim rules
prescribed under the authority of this subsection that are not
superseded by final rules shall expire no later than 270 days after the
date of enactment of the Maritime Security Fleet Program
Reauthorization Act of 2003.''.
TITLE III--NATIONAL DEFENSE TANK VESSEL CONSTRUCTION ASSISTANCE
SEC. 301. NATIONAL DEFENSE.
(a) In General.--Title V of the Merchant Marine Act, 1936 (46
U.S.C. App. 1151 et seq.) is amended by inserting at the end the
following new subtitle:
``Subtitle B--National Defense Tank Vessel Construction Assistance
``SEC. 521. NATIONAL DEFENSE TANK VESSEL CONSTRUCTION PROGRAM.
``The Secretary of Transportation shall establish a program for the
provision of financial assistance for the construction in the United
States of a fleet of up to 5 privately owned product tank vessels--
``(1) to be operated in commercial service in foreign
commerce; and
``(2) to be available for national defense purposes in time
of war or national emergency pursuant to an Emergency
Preparedness Plan approved by the Secretary of Defense pursuant
to section 523(e) of this subtitle.
``SEC. 522. APPLICATION PROCEDURE.
``(a) Request for Proposals.--Within 90 days after the date of the
enactment of this subtitle, and on an as-needed basis thereafter, the
Secretary of Transportation, in consultation with the Secretary of
Defense, shall publish in the Federal Register a request for
competitive proposals for the construction of new product tank vessels
necessary to meet the commercial and national security needs of the
United States and to be built with assistance under this subtitle.
``(b) Qualification.--Any citizen of the United States or any
shipyard in the United States may submit a proposal to the Secretary of
Transportation for purposes of constructing a product tank vessel with
assistance under this subtitle.
``(c) Requirement.--The Secretary of Transportation, with the
concurrence of the Secretary of Defense, may enter into an agreement
with the submitter of a proposal for assistance under this subtitle if
the Secretary of Transportation determines that--
``(1) the plans and specifications call for construction of
a new product tank vessel of not less than 35,000 deadweight
tons and not greater than 60,000 deadweight tons, that--
``(A) will meet the requirements of foreign
commerce;
``(B) is capable of carrying militarily useful
petroleum products, and will be suitable for national
defense or military purposes in time of war, national
emergency, or other military contingency; and
``(C) will meet the construction standards
necessary to be documented under the laws of the United
States;
``(2) the shipyard in which the vessel will be constructed
has the necessary capacity and expertise to successfully
construct the proposed number and type of product tank vessels
in a reasonable period of time as determined by the Secretary
of Transportation, taking into consideration the recent prior
commercial shipbuilding history of the proposed shipyard in
delivering a vessel or series of vessels on time and in
accordance with the contract price and specifications; and
``(3) the person proposed to be the operator of the
proposed vessel possesses the ability, experience, financial
resources, and any other qualifications determined to be
necessary by the Secretary for the operation and maintenance of
the vessel.
``(d) Priority.--The Secretary of Transportation--
``(1) subject to paragraph (2), shall give priority
consideration to a proposal submitted by a person that is a
citizen of the United States under section 2 of the Shipping
Act, 1916 (46 U.S.C. App. 802); and
``(2) may give priority to consideration of proposals that
provide the best value to the Government, taking into
consideration--
``(A) the costs of vessel construction; and
``(B) the commercial and national security needs of
the United States.
``SEC. 523. AWARD OF ASSISTANCE.
``(a) In General.--If after review of a proposal, the Secretary of
Transportation determines that the proposal fulfills the requirements
under this subtitle, the Secretary may enter into a contract with the
proposed purchaser and the proposed shipyard for the construction of a
product tank vessel with assistance under this subtitle.
``(b) Amount of Assistance.--The contract shall provide that the
Secretary of Transportation shall pay, subject to the availability of
appropriations, up to 75 percent of the actual construction cost of the
vessel, but in no case more than $50,000,000 per vessel.
``(c) Construction in United States.--A contract under this section
shall require that construction of a vessel with assistance under this
subtitle shall be performed in a shipyard in the United States.
``(d) Documentation of Vessel.--
``(1) Contract requirement.--A contract under this section
shall require that, upon delivery of a vessel constructed with
assistance under the contract, the vessel shall be documented
under chapter 121 of title 46, United States Code, with a
registry endorsement only.
``(2) Restriction on coastwise endorsement.--A vessel
constructed with assistance under this subtitle shall not be
eligible for a certificate of documentation with a coastwise
endorsement.
``(3) Authority to reflag not applicable.--Section 9(g) of
the Shipping Act, 1916, (46 U.S.C. App. 808(g)) shall not apply
to a vessel constructed with assistance under this subtitle.
``(e) Emergency Preparedness Agreement.--
``(1) In general.--A contract under this section shall
require that the person who will be the operator of a vessel
constructed with assistance under the contract shall enter into
an Emergency Preparedness Agreement for the vessel under
section 653.
``(2) Treatment as contractor.--For purposes of the
application, under paragraph (1), of section 653 to a vessel
constructed with assistance under this subtitle, the term
`contractor' as used in section 653 means the person who will
be the operator of a vessel constructed with assistance under
this subtitle.
``(f) Additional Terms.--The Secretary of Transportation shall
incorporate in the contract the requirements set forth in this
subtitle, and may incorporate in the contract any additional terms the
Secretary considers necessary.''.
(b) Priority for Title XI Assistance.--Section 1103 of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1273) is amended by adding at the end
the following:
``(i) Priority.--In guaranteeing and entering commitments to
guarantee under this section, the Secretary shall give priority to
guarantees and commitments for vessels that are otherwise eligible for
a guarantee under this section and that are constructed with assistance
under subtitle B of title V of this Act.''.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out subtitle B of title V of the
Merchant Marine Act, 1936, as added by subsection (a), a total of
$250,000,000 for fiscal years beginning after fiscal year 2004.
(d) Conforming Amendment.--Title V of the Merchant Marine Act, 1936
is amended by inserting before section 501, the following:
``Subtitle A--General Subsidy for New Vessel Construction''.
Amend the title so as to read ``A bill to authorize
appropriations for fiscal years 2004 through 2008 for certain
maritime programs of the Department of Transportation, and for
other purposes.''.
Calendar No. 361
108th CONGRESS
1st Session
S. 1262
[Report No. 108-184]
_______________________________________________________________________
A BILL
To authorize appropriations for fiscal years 2004, 2005, and 2006 for
certain maritime programs of the Department of Transportation, and for
other purposes.
_______________________________________________________________________
November 3, 2003
Reported with amendments and an amendment to the title