[Senate Report 109-183]
[From the U.S. Government Publishing Office]
109th Congress Report
SENATE
1st Session 109-183
_______________________________________________________________________
Calendar No. 295
MARITIME ADMINISTRATION ENHANCEMENT ACT OF 2005
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 2029
November 17, 2005.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred ninth congress
first session
TED STEVENS, Alaska, Chairman
DANIEL K. INOUYE, Hawaii, Co-Chairman
JOHN McCAIN, Arizona JOHN D. ROCKEFELLER IV, West
CONRAD BURNS, Montana Virginia
TRENT LOTT, Mississippi JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas BYRON L. DORGAN, North Dakota
OLYMPIA J. SNOWE, Maine BARBARA BOXER, California
GORDON H. SMITH, Oregon BILL NELSON, Florida
JOHN ENSIGN, Nevada MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire E. BENJAMIN NELSON, Nebraska
JIM DeMINT, South Carolina MARK PRYOR, Arkansas
DAVID VITTER, Louisiana
Lisa Sutherland, Staff Director
Christine Drager Kurth, Deputy Staff Director
David Russell, Chief Counsel
Margaret Cummisky, Democratic Staff Director and Chief Counsel
Samuel Whitehorn, Democratic Deputy Staff Director and General Counsel
Calendar No. 295
109th Congress Report
SENATE
1st Session 109-183
======================================================================
MARITIME ADMINISTRATION ENHANCEMENT ACT OF 2005
_______
November 17, 2005.--Ordered to be printed
_______
Mr. Stevens, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 2029]
The Committee on Commerce, Science, and Transportation
reports favorably an original bill (S. 2029) to amend and
enhance certain maritime programs of the Department of
Transportation, and for other purposes, and recommends that the
bill do pass.
Purpose of the Bill
The Maritime Administration Enhancement Act would streamline
the process of covering the costs of vessel maintenance,
repairs, and replacements; enhance the requirements for cadets
entering the Merchant Marine Academy; authorize the Secretary
of Transportation to permit training upon certain vessels; and
grant the Maritime Administration (MARAD) greater flexibility
in disposing of obsolete vessels from the National Defense
Reserve Fleet (NDRF).
In addition, the bill would grant MARAD the authority to
retain certain deepwater port license application fees as well
as funds collected through its Coastwise administrative waiver
process. It would permit greater promotion of the merchant
marine through the utilization of the U.S. Maritime Service at
maritime-related functions beyond that of training and
education, and authorize the Secretary to award, free of
charge, medals for commendable achievements in the U.S.
Merchant Marine. Furthermore, the bill would authorize duty-
free treatment of emergency war materials imported for use by
MARAD.
The bill includes provisions designed to clarify
Congressional reforms to the MARAD Title XI maritime loan
guarantee program. The bill also designates MARAD as the lead
Federal agency to administer Federal funds for port and
intermodal improvements in the State of Hawaii. Finally, the
legislation would authorize a maritime training and shipyard
capital grant program administered by MARAD.
Background and Needs
The mission of MARAD is to promote the development and
maintenance of an adequate, well-balanced United States
merchant marine, sufficient to carry the Nation's domestic
waterborne commerce and a substantial portion of its waterborne
foreign commerce, and capable of serving as a naval and
military auxiliary in time of war or national emergency. MARAD
also seeks to ensure that the United States enjoys adequate
shipbuilding and repair service, efficient ports, effective
intermodal water and land transportation systems, and reserve
shipping capacity in times of national emergency.
To meet its mission, MARAD administers various U.S. merchant
marine support programs within the Department of Transportation
(DOT). These programs include the Maritime Security Program
(MSP), Title XI maritime loan guarantee program, various cargo
preference programs, maintenance of the Ready Reserve Force
(RRF), often used in domestic disaster relief efforts, and the
National Defense Reserve Force (NDRF), and operation of the
U.S. Merchant Marine Academy (USMMA) at Kings Point, NY. MARAD
has approximately 825 employees, including RRF and USMMA staff.
The MSP funds operating agreements to the privately owned,
United States-flag, and United States-crewed liner fleet in
international trade. This fleet also is available to support
the Department of Defense (DOD) sustainment in a contingency.
Currently, MSP is authorized through fiscal year 2015 and
subject to a separate annual appropriation.
The purpose of the Title XI ship loan guarantee program is to
promote the growth and modernization of the U.S. merchant
marine and U.S. shipyards. The program enables owners of
eligible vessels and eligible shipyards to obtain long-term
financing with attractive terms backed by the full faith and
credit of the United States government to guarantee commercial
loans.
In November of 2003, Congress enacted reforms to the program
under P.L.108-136, the National Defense Authorization Act of
2003, which authorized the Secretary to require an independent
analysis to be conducted by third party experts if the
Secretary determines that risk factors associated with markets,
technology, financial structures, or other factors need such
analysis prior to making a determination on a loan guarantee
application. The Secretary's authority to conduct an
independent risk analysis of projects was not intended to be
used in routine cases nor where MARAD already has sufficient
expertise to fully assess the risk of approving a loan
guarantee application. The Committee is concerned the
department is not administering the program consistent with
P.L. 108-136 and is instead subjecting routine financial
transactions to duplicative bureaucratic reviews by both MARAD
and the newly established DOT Credit Council. In addition, the
Committee is concerned with the proposed regulations issued
June 8, 2005, Docket No. 2005-21380, as they appear to be
contradictory to the sustainability of the program.
The Committee is concerned the financial analysis and market
assessment functions, key MARAD roles, are being taken away by
DOT, thereby eroding MARAD's fundamental expertise in the
intricacies of shipbuilding and shipyard modernization. The
Committee expects that the Title XI program remain exclusively
within MARAD to streamline the application process and avoid
the needless duplication of assessing, evaluating and
determining the financial solvency and potential market
performance of project applications.
MARAD's operations and training account funds the
administration and staffing of MARAD programs (other than the
Title XI guaranteed loan program and RRF costs), the USMMA,
State maritime school costs associated with Federal training
ships, training courses for merchant mariners, various
operating programs, and research and development. The USMMA
educates young men and women to become officers in the American
merchant marine.
The Global Maritime and Transportation School (GMATS) is a
private, tuition-funded graduate school housed at the USMMA,
which offers advanced mariner training and logistics and supply
chain management courses. The primary mission of the USMMA
GMATS is to offer leading edge education and training programs
that will benefit maritime and transportation professionals
from government agencies, the military, and private industry.
Funds to operate GMATS are generated through tuition, meal, and
lodging fees. It is not an appropriated instrumentality of the
DOT. The current process through which some applicants are
accepted is cumbersome and this legislation reduces that burden
and clarifies GMATS's role.
Summary of Provisions
The bill would allow MARAD to use a portion of the hire paid
for the operation of the National Defense Reserve Fleet (NDRF)
and proceeds recovered from vessel accident litigation and
arbitration to be placed in a reserve fund to cover the costs
of vessel maintenance, repairs, and replacements. The bill
would authorize MARAD to retain fees from administrative
waivers and deepwater port license applications up to a
specific amount to pay for administrative costs.
The legislation would require students entering the Merchant
Marine Academy to meet the physical and mental standards
required by the Department of Defense (DOD). MARAD has reported
that some students fail to meet current standards set by MARAD,
thereby avoiding certain commitments upon graduation, including
entering Reserve units of the Armed Forces. In addition, the
bill would allow the Armed Services to certify annually
graduates' mandatory military service commitment and permits
Academy cadets to train on foreign flag vessels when in the
interest of national security. Subject to appropriations, the
bill increases the authorized payments for cadets enrolled in
State Regional Maritime Academies to $500,000 dollars by fiscal
year 2008 and increases the amount State Maritime Academies may
receive for reimbursement of ship fuel costs.
This bill would grant MARAD the ability to purchase emergency
war materials for RRF repairs without being subject to ad
valorem duties while under operational authority DOD. MARAD is
granted the flexibility to decide on the timing of ship and
title transfers to U.S. territories and States. Finally, the
bill would establish a grant program to assist small shipyard
capital improvements and establish technical training programs
for small communities largely served by the maritime industry.
Payments for State and Regional Maritime Academies
The measure also would clarify the roles of the Maritime
Administrator and DOD in the loan guarantee process overseen by
MARAD, and streamlines the cumbersome application review
process. The bill would require an independent analysis of each
loan guarantee be conducted by private sector maritime finance
or operations experts. In addition, it requires adequate
staffing and expertise to properly manage the program.
Legislative History
The original committee bill was ordered reported to the
Senate by voice vote on July 21, 2005 in the presence of a
quorum.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
November 15, 2005.
Hon. Ted Stevens,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for the Maritime
Administration Enhancement Act of 2005.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Deborah Reis.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
Maritime Administration Enhancement Act of 2005
Summary: The Maritime Administration Enhancement Act would
amend various laws governing the activities of the Maritime
Administration (MARAD), authorize appropriations for a new
program to assist small shipyards and maritime communities, and
increase support for state maritime academies. Assuming
appropriation of the authorized or necessary amounts,
implementing the bill would result in discretionary spending
totaling $104 million over the 2006-2010 period, CBO estimates.
In addition, several provisions of the bill would allow
MARAD to spend, without further appropriation action, certain
collections from regulatory fees and legal damages. CBO
estimates that enacting these provisions would increase direct
spending by about $5 million over the 2006-2010 period and by
$10 million over the 2006-2015 period.
Finally, the bill would exempt MARAD from paying ad valorem
taxes on certain materials and repairs for vessels operated as
part of the National Defense Reserve Fleet (NDRF) under wartime
conditions, thereby reducing federal revenues by an estimated
$1 million over the 2006-2010 period and by $2 million over the
2006-2015 period. (The costs of NDRF operations would be
reduced by similar amounts, assuming a corresponding reduction
in future appropriations.)
The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA); any costs to state and local governments would be
incurred voluntarily.
Estimated cost to the Federal Government: The estimated
budgetary effects of the legislation are summarized in the
following table. The costs of this legislation fall within
budget function 400 (transportation).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2006 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Additional MARAD Spending for State Maritime Academies:
Estimated Authorization Level.................................. 1 2 4 4 4
Estimated Outlays.............................................. 1 2 4 4 4
Small Shipyard and Maritime Community Grants:
Authorization Level............................................ 30 30 30 30 30
Estimated Outlays.............................................. 3 12 20 25 30
Reduced Spending for Ad Valorem Duties on Foreign Materials and
Repairs:
Estimated Authorization Level.................................. * * * * *
Estimated Outlays.............................................. * * * * *
Total Additional MARAD Spending:
Estimated Authorization Level.................................. 31 32 34 34 34
Estimated Outlays.............................................. 4 14 24 29 34
CHANGES IN DIRECT SPENDING
Estimated Budget Authority......................................... 1 1 1 1 1
Estimated Outlays.................................................. 1 1 1 1 1
CHANGES IN REVENUES \1\
Estimated Revenues from Ad Valorem Duties.......................... * * * * *
----------------------------------------------------------------------------------------------------------------
\1\ Enacting the bill would also change the classification of about $1 million a year in revenues by directing
that those collections be recorded in the budget as an offset to spending. Following scorekeeping rule 13,
such reclassifications in legislation are not counted for purposes of Congressional scorekeeping.
Note.--* = between -$500,000 and $500,000.
Basis of estimate
Spending subject to appropriation
For this estimate, CBO assumes that the amounts authorized
or estimated to be necessary will be appropriated for each
year. Estimated outlays are based on historical spending
patterns for existing or similar programs.
Section 112 would expand financial assistance to state
maritime academies, subject to the availability of
appropriations. Specifically, this section would increase
annual direct payments to the six academies from the existing
statutory level of $200,000 each to $300,000 in 2006, $400,000
in 2007, and $500,000 for each year thereafter. This section
also would direct MARAD to pay up to $100,000 in 2006, $200,000
in 2007, and $300,000 a year thereafter for the costs of fuel
to operate state training vessels. CBO estimates that providing
the higher annual payments to state academies and reimbursing
them for fuel costs would require additional appropriations
that would grow to $4 million annually by 2008. (MARAD received
$1.2 million for direct payments to state maritime academies in
fiscal year 2005. No amounts were appropriated for that year
for fuel reimbursements. MARAD's full-year appropriation for
2006 has not yet been enacted.)
Section 114 would authorize the appropriation of $30
million for each of fiscal years 2006-2010 for a new program to
support small shipyards and maritime communities. Under this
program, MARAD would pay state and local governments to make
grants, loans, and loan guarantees to small shipyards for
capital improvements and to establish maritime training
programs in communities whose economies are linked to the
maritime industry. Assuming appropriation of the authorized
amounts, CBO estimates that implementing this program would
cost MARAD about $3 million in 2006 and $90 million over the
2006-2010 period. We estimate that the remaining $60 million
authorized by the bill would be spent after 2010.
Other provisions of the bill would have no significant
effect on the federal budget.
Direct spending
The legislation would provide about $1 million of new
budget authority for MARAD each year by allowing the agency to
spend without further appropriation certain amounts that are
currently deposited in the U.S. Treasury as revenues. Section
109 would allow MARAD to spend payments for damages received
for accidents that involve vessels that it owns or manages.
Based on recent judgments and settlements for damages collected
as a result of such incidents, CBO estimates that this new
authority would increase direct spending by an average of
$500,000 a year. Also, sections 107 and 108 would authorize the
agency to spend up to a total of $500,000 a year from certain
administrative and regulatory fees, thereby increasing annual
direct spending by a like amount.
The bill also would change the budgetary classification of
those administrative and regulatory fees. Such collections are
currently considered revenues but under the legislation would
become offsetting receipts (an offset to direct spending). The
resulting decrease in revenues and corresponding decrease in
outlays are not counted for purposes of Congressional
consideration, however, pursuant to scorekeeping rule 13, which
states that reclassifications are not counted for purposes of
enforcing the budget resolution (see House Report 105-217, the
conference report on the Balanced Budget Act of 1997, page
1011).
Revenues
Section 106 would exempt MARAD from paying ad valorem
duties on certain materials imported from foreign countries and
on repairs made in foreign ports for vessels operated as part
of the NDRF during wartime. CBO estimates that this provision
would reduce revenues by less than $500,000 in 2006, by $1
million over the 2006-2010 period, and by $2 million through
2015. This provision also would result in like reductions in
discretionary spending, assuming that MARAD's annual
appropriations would be adjusted to reflect the savings in NDRF
operating costs.
By changing the budgetary classification of certain
administrative and regulatory fees from revenues to offsetting
receipts, enacting the bill would reduce revenues by about
$500,000 a year over the 2006-2015 period. But, as noted above,
such reclassifications are not counted for Congressional
scorekeeping purposes.
Intergovernmental and private-sector impact: The
legislation contains no intergovernmental or private-sector
mandates as defined in UMRA. The bill would increase the
authorization of appropriations for maritime academies in six
states and establish a new grant program to assist state and
local governments in supporting small shipyards and maritime
communities within their states. Any costs to state and local
governments for participating in those programs would be
incurred voluntarily.
Estimate prepared by: Federal Spending: Deborah Reis.
Federal Revenue: Emily Schlect. Impact on State, Local, and
Tribal Governments: Sarah Puro. Impact on the Private Sector:
Craig Cammarata.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
NUMBER OF PERSONS COVERED
This program would not affect the number of people subject to
regulation.
ECONOMIC IMPACT
The bill would authorize the establishment of a $25 million
grant program designed to assist small shipyards with capital
improvement needs, and a $5 million grant program to provide
maritime training. The grants in the program are designed to
have a positive economic impact on United States maritime
industry by subsidizing the needed capital improvements in
communities largely served by that industry and by provided
much needed training.
PRIVACY
This program would not impact privacy issues.
PAPERWORK
This program would not create new mandatory paperwork or
reporting requirements.
Section-by-Section Analysis
Section 1. Short title
Section 1 states the short title of the legislation, the
``Maritime Administration Enhancement Act of 2005''.
Section 101. United States Maritime Service
This section would permit the Commandant of the United States
Maritime Service (USMS) or the Maritime Administrator to
utilize the USMS for maritime related functions beyond that of
training and education that are determined to be necessary for
the promotion of the U.S. merchant marine. For instance, the
amendment would permit the use of members of the USMS to
further the visibility and understanding of the U.S. merchant
marine, and allow members of the USMS to serve as liaisons
within the DOT and to the public.
Section 102. War risk insurance
This is a technical correction to section 3502(b) of P.L.
108-375, the National Defense Authorization Act for Fiscal Year
2005.
Section 103. Maritime education and training
This section would require students entering the Merchant
Marine Academy to meet the same physical and mental standards
required by the DOD. Any cadet not meeting such standards could
be expelled. This change is necessary to ensure that students
admitted to the Academy are capable of fulfilling the
requirements of their commitment agreements upon graduation. If
students do not meet these DOD standards, they are not eligible
to obtain a Merchant Marine license or to accept an appointment
in a reserve unit of the armed forces of the United States, two
key commitment agreement service requirements.
Current law requires Academy graduates to become commissioned
officers on active duty in an armed force of the United States
or to become commissioned officers in the reserves of the armed
forces for at least 6 years following graduation. The Privacy
Act currently prevents MARAD from readily verifying with the
DOD that graduates are serving their commitment to the armed
forces. This section would require the DOD, the U.S. Coast
Guard, and the National Oceanic and Atmospheric Administration
(NOAA) to certify annually to MARAD that Academy graduates have
remained on active duty or in ready reserve status, thus
confirming the fulfillment of a graduates service commitment
agreement. This provision would provide a mechanism for MARAD
to recover tuition from graduates who fail to perform their
duties and that are found in noncompliance with their
commitment agreement and enable MARAD
In addition, this section would authorize Academy cadets to
train on foreign flag vessels if it is in the interest of
national security. For example, cadets would be permitted to
train on vessels involved in unique trades that involve
sensitive security interests of the United States such as
Liquefied Natural Gas (LNG) vessels that are not documented in
the United States. This is not intended to authorize the
training of cadets on foreign flag vessels that do not pose a
significant security interest to the nation.
Further, this section would clarify the role of the Global
Maritime and Transportation School (GMATS) located on the
campus of Kings Point as a non-appropriated fund
instrumentality (NAFI) operating under the jurisdiction of the
Department of Transportation.
Section 104. Authority to dispose of obsolete government vessels
Public Law 108-136 authorized the Secretary to convey to U.S.
territories and foreign governments obsolete vessels for use as
artificial reefs; however, it did not provide MARAD with the
discretion to decide when to transfer the ship and title(s)
fleetside at the NDRF. This section would provide MARAD the
flexibility to make vessel and title transfer decisions that
not only encourage States to request the ships for use as
reefs, but also that are in the best interests of the
government.
Section 105. Awards and medals
This section would provide the Administrator the discretion
to award medals at no cost to the recipient. Currently, MARAD
may only provide such medals and decorations at cost, or
authorize for the manufacture and sale at reasonable prices by
private persons.
Section 106. Elimination of tariffs on certain national defense
activities
This measure would grant MARAD the ability to purchase
emergency war materials for RRF repairs without being subject
to ad valorem duties while under operational authority of the
Department of Defense in a war zone. MARAD provides support for
the deployment of military forces worldwide using the NDRF and
RRF, which is part of the NDRF, and is a key element of the
Navy's Strategic Sealift Program. Currently, there are 59 RRF
vessels in a high state of readiness, and the availability of
these ships is essential to the deployment of DOD forces and
equipment, as part of the Navy's Military Sealift Command
(MSC). The RRF fleet has been activated to support the current
efforts in Afghanistan and the Persian Gulf.
Currently, 24 of the vessels are foreign constructed and
another 35, while not foreign built, are equipped with foreign-
made items. To maintain the vessels in a constant state of
readiness, MARAD must regularly import foreign-made spare
parts, repair parts, equipment and supplies. The imports
necessary to maintain the fleet incur customs duties. Since
MARAD vessels are maintained for the operational control of
MSC, and are required for rapid deployment during national
emergencies, the supplies and equipment needed to maintain the
vessels should be accorded the same type of duty-free exemption
for emergency war materials that is extended to DOD.
These vessels are U.S.-documented, thus any repairs or repair
parts received abroad are subject to an ad valorem tax of 50
percent of the cost of the repairs received abroad. Although
the ad valorem tax is intended to serve as an incentive for
vessel operators to repair their vessels in United States
shipyards, unintended consequences arise when applied to
government owned vessels that are deployed overseas for
extended periods of time and are engaged in national security
functions. Therefore, streamlining this process in this
instance is appropriate and necessary, providing DOD maximum
flexibility for vessels under its control operating in a war
zone to obtain ship repairs.
Section 107. Availability of funds from application fees for deepwater
ports
This section would allow MARAD to retain fees assessed
pursuant to applications for licenses for ownership,
construction, and operation of deepwater ports, up to $450,000
per fiscal year.
Section 108. Availability of funds from administrative waivers of
coastwise trade laws for eligible vessels
This section would authorize MARAD to retain funds routinely
collected through the agency's program for the Administrative
Waiver of Coastwise Trade Laws for Eligible Vessels, up to
$50,000 per fiscal year.
Section 109. Amendments to the Vessel Operations Revolving Fund (VORF)
The VORF was created in 1951 to carry out vessel operating
functions under the jurisdiction of Secretary of
Transportation, including the charter, operation, maintenance,
repair, reconditioning and betterment of merchant vessels. At
present, such functions come at the expense of the operating
repairs and maintenance budgeted for other NDRF vessels. In
addition, all recoveries from litigation are deposited into the
Treasury after payment to the Department of Justice for the
costs of litigation. This section would allow MARAD to use a
portion of the hire paid for the operation of the NDRF vessels
and proceeds recovered from vessel accident litigation and
arbitration. Funds would be placed in a reserve fund to cover
the costs of vessel maintenance, repairs, and replacements.
Section 110. Right to use Maritime Administration decoration
This section would authorize the Secretary to sanction the
use, manufacture, sale, possession, or display of a decoration
or medal, such as the merchant marine seal. Currently no such
authority exists, thus the use of the merchant seal is severely
limited. This provision would permit the Secretary, through the
Maritime Administrator, to authorize the use of maritime
emblems for purposes and events he deems meritorious, such as
commemorative ceremonies or events.
Section 111. Hawaii port infrastructure expansion program
This section would designate MARAD as the lead Federal agency
to administer Federal funds for port and intermodal
improvements in Hawaii.
Section 112. Payments for State and regional maritime academies
This section would increase the amount of assistance provided
to the 6 State maritime academies which are located in Maine,
Massachusetts, New York, Michigan, Texas, and California. These
6 schools currently receive limited Federal support, yet a
substantial number of their graduates hold Federal licenses and
support our increasing mariner requirements in both the
commercial and military sectors. Current law provides for a
payment from MARAD of $200,000 dollars annually for cadet
training and facilities support. That amount has not been
raised since 1989. This section would increase the
authorization level of Federal support to $300,000 dollars for
fiscal year 2006, $400,000 dollars in fiscal year 2007, and
$500,000 in fiscal year 2008, and for each fiscal year
thereafter, subject to the availability of appropriations. This
section would also require MARAD to provide modest payments to
the aforementioned State maritime academies for the increasing
cost of fuel used for the operation of the academies' training
ships.
Section 113. Reduction of report burden
This section would eliminate a report required every 6 months
pertaining to the progress of ship scrapping.
Section 114. Assistance for small shipyards and maritime communities
This provision would establish a grant program to assist
small shipyards to make capital improvements and improve
maritime training programs for small communities largely served
by the maritime industry.
Section 201. Redesignation of duplicate numbered sections
This is a technical correction designed to correct
duplicative section numbers.
Section 202. Transfer of authority to MARAD
This section would clarify the roles of the Maritime
Administrator and the Department of Defense in the loan
guarantee process overseen by MARAD and streamline the
cumbersome application process. It would require independent
analyses of the loan guarantees be conducted by private sector
maritime finance or operations experts based on the
determination of the Maritime Administrator that a particular
set of circumstances relating to risk exists. Further, the
provision would require MARAD to maintain adequate staffing and
expertise in the agency to properly manage the program.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
FLOYD D. SPENCE NATIONAL DEFENSE AUTHORIZATION ACT OF FISCAL YEAR 2001
SEC. 3502. SCRAPPING OF NATIONAL DEFENSE RESERVE FLEET VESSELS.
[Pub. L. 106-398 App.; 114 Stat. 1654A-492]
(a) Extension of Scrapping Authority Under National Maritime
Heritage Act of 1994.--Section 6(c)(1) of the National Maritime
Heritage Act of 1994 (16 U.S.C. 5405(c)(1)) is amended--
(1) in subparagraph (A) by striking ``2001'' and
inserting ``2006''; and
(2) by striking subparagraph (B) and inserting the
following:
``(B) in the manner that provides the best
value to the Government, except in any case in
which obtaining the best value would require
towing a vessel and such towing poses a serious
threat to the environment; and''.
(b) Selection of Scrapping Facilities.--The Secretary of
Transportation may scrap obsolete vessels pursuant to section
6(c)(1) of the National Maritime Heritage Act of 1994 (16
U.S.C. 5405(c)(1)) through qualified scrapping facilities,
using the most expeditious scrapping methodology and location
practicable. Scrapping facilities shall be selected under that
section on a best value basis consistent with the Federal
Acquisition Regulation, as in effect on the date of the
enactment of this Act, without any predisposition toward
foreign or domestic facilities taking into consideration, among
other things, the ability of facilities to scrap vessels--
(1) at least cost to the Government;
(2) in a timely manner;
(3) giving consideration to worker safety and the
environment; and
(4) in a manner that minimizes the geographic
distance that a vessel must be towed when towing a
vessel poses a serious threat to the environment.
[(c) Limitation on Scrapping Before Program.--
[(1) In general.--Until the report required by
subsection (d)(1) is transmitted to the congressional
committees referred to in that subsection, the
Secretary may not proceed with the scrapping of any
vessel in the National Defense Reserve Fleet except the
following:
[(A) DONNER.
[(B) EXPORT COMMERCE.
[(C) BUILDER.
[(D) ALBERT E. WATTS.
[(E) WAYNE VICTORY.
[(F) MORMACDAWN.
[(G) MORMACMOON.
[(H) SANTA ELENA.
[(I) SANTA ISABEL.
[(J) SANTA CRUZ.
[(K) PROTECTOR.
[(L) LAUDERDALE.
[(N) PVT. FRED C. MURPHY.
[(M) BEAUJOLAIS.
[(O) MEACHAM.
[(P) NEACO.
[(Q) WABASH.
[(R) NEMASKET.
[(S) MIRFAK.
[(T) GEN. ALEX M. PATCH.
[(U) ARTHUR M. HUDDELL.
[(V) WASHINGTON.
[(W) SUFFOLK COUNTY.
[(X) CRANDALL.
[(Y) CRILLEY.
[(Z) RIGEL.
[(AA) VEGA.
[(BB) COMPASS ISLAND.
[(CC) EXPORT CHALLENGER.
[(DD) PRESERVER.
[(EE) MARINE FIDDLER.
[(FF) WOOD COUNTY.
[(GG) CATAWBA VICTORY.
[(HH) GEN. NELSON M. WALKER.
[(II) LORAIN COUNTY.
[(JJ) LYNCH.
[(KK) MISSION SANTA YNEZ.
[(LL) CALOOSAHATCHEE.
[(MM) CANISTEO.
[(2) Prioritization.--The Secretary shall exercise
discretion to prioritize for scrapping those vessels
identified in paragraph (1) that pose the most
immediate threat to the environment.
[(d)] (c) Scrapping Program for Obsolete National Defense
Reserve Fleet Vessels.--
(1) Development of program; report.--The Secretary of
Transportation, in consultation with the Secretary of
the Navy and the Administrator of the Environmental
Protection Agency, shall within 6 months after the date
of the enactment of this Act--
(A) develop a program for the scrapping of
obsolete National Defense Reserve Fleet
vessels; and
(B) submit a report on the program to the
Committee on Transportation and Infrastructure
and the Committee on Resources of the House of
Representatives, the Committee on Commerce,
Science, and Transportation of the Senate, and
the Committees on Armed Services of the House
of Representatives and the Senate.
(2) Contents of report.--The report shall include
information concerning the initial determination of
scrapping capacity, both domestically and abroad,
appropriate proposed regulations to implement the
program, funding and staffing requirements, milestone
dates for the disposal of each obsolete vessel, and
longterm cost estimates for the program.
(3) Alternatives.--In developing the program, the
Secretary of Transportation, in consultation with the
Secretary of the Navy and the Administrator of the
Environmental Protection Agency, shall consider all
alternatives and available information, including--
(A) alternative scrapping sites;
(B) vessel donations;
(C) sinking of vessels in deep water;
(D) sinking vessels for development of
artificial reefs;
(E) sales of vessels before they become
obsolete;
(F) results from the Navy Ship Disposal
Program under section 8124 of the Department of
Defense Appropriations Act, 1999; and
(G) the Report of the Department of Defense's
Interagency Panel on Ship Scrapping issued in
April 1998.
[(e) Report.--Not later than 1 year after the date of the
enactment of this Act, and every 6 months thereafter, the
Secretary of Transportation, in coordination with the Secretary
of the Navy, shall report to the Committee on Transportation
and Infrastructure and the Committee on Resources of the House
of Representatives, the Committee on Commerce, Science, and
Transportation of the Senate, and the Committees on Armed
Services of the House of Representatives and the Senate on the
progress of the vessel scrapping program developed under
subsection (d)(1) and on the progress of any other scrapping of
obsolete Government-owned vessels.]
[(f)] (d) Presidential Recommendation.--The President shall
transmit with the report required by [subsection (d)(1)]
subsection (c)(1) a recommendation on--
(1) whether it is necessary to amend the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.) or any
other environmental statute or regulatory requirements
relevant to the disposal of vessels described in
section 6(c)(2) of the National Maritime Heritage Act
of 1994 (16 U.S.C. 5405(c)(2)) by September 30, 2006;
and
(2) any proposed changes to those requirements to
carry out such disposals.
PUBLIC LAW 92-402
SEC. 4. TRANSFER OF TITLE; TERMS AND CONDITIONS.
[16 U.S.C. 1220a]
If, after consideration of such comments and views as are
received pursuant to section 3(c), the Secretary finds that the
use of obsolete ships proposed by a State will not violate any
Federal law, contribute to degradation of the marine
environment, create undue interference with commercial fishing
or navigation, and is not frivolous, he may transfer without
consideration to the State all right, title, and interest of
the United States in and to any obsolete ships which are
available for transfer under this Act if--
(1) the State gives to the Secretary such assurances
as he deems necessary that such ships will be utilized
and maintained only for the purposes stated in the
application and, when sunk, will be charted and marked
as a hazard to navigation;
(2) the State agrees to secure any licenses or
permits which may be required under the provisions of
any other applicable Federal law;
(3) the State agrees to such other terms and
conditions as the Secretary shall require in order to
protect the marine environment and other interests of
the United States; and
[(4) the transfer would be at no cost to the
Government (except for any financial assistance
provided under section 7) with the State taking
delivery of such obsolete ships at fleetside of the
National Defense Reserve Fleet in an ``as is--where
is'' condition.]
(4) the transfer would be at no cost to the
government (except for any financial assistance
provided under section 1220(c)(1) of this title) with
the State taking delivery of such obsolete ships and
titles in an ``as-is--where-is'' condition at such
place and time designated as may be determined by the
Secretary of Transportation.
TARIFF ACT OF 1930
SEC. 466. EQUIPMENT AND REPAIRS OF VESSELS.
[19 U.S.C. 1466]
(a) Vessels Subject to Duty; Penalties.--The equipments, or
any part thereof, including boats, purchased for, or the repair
parts or materials to be used, or the expenses of repairs made
in a foreign country upon a vessel documented under the laws of
the United States to engage in the foreign or coasting trade,
or a vessel intended to be employed in such trade, shall, on
the first arrival of such vessel in any port of the United
States, be liable to entry and the payment of an ad valorem
duty of 50 per centum on the cost thereof in such foreign
country. If the owner or master willfully or knowingly neglects
or fails to report, make entry, and pay duties as herein
required, or if he makes any false statement in respect of such
purchases or repairs without reasonable cause to believe the
truth of such statements, or aids or procures the making of any
false statement as to any matter material thereto without
reasonable cause to believe the truth of such statement, such
vessel, or a monetary amount up to the value thereof as
determined by the Secretary, to be recovered from the owner,
shall be subject to seizure and forfeiture[.] For the purposes
of this section, compensation paid to members of the regular
crew of such vessel in connection with the installation of any
such equipments or any part thereof, or the making of repairs,
in a foreign country, shall not be included in the cost of such
equipment or part thereof, or of such repairs.
(b) Notice.--If the appropriate customs officer has
reasonable cause to believe a violation has occurred and
determines that further proceedings are warranted, he shall
issue to the person concerned a written notice of his intention
to issue a penalty claim. Such notice shall--
(1) describe the circumstances of the alleged
violation;
(2) specify all laws and regulations allegedly
violated;
(3) disclose all the material facts which establish
the alleged violation;
(4) state the estimated loss of lawful duties, if
any, and taking into account all of the circumstances,
the amount of the proposed penalty; and
(5) inform such person that he shall have a
reasonable opportunity to make representations, both
oral and written, as to why such penalty claim should
not be issued.
(c) Violation.--After considering representations, if any,
made by the person concerned pursuant to the notice issued
under subsection (b), the appropriate customs officer shall
determine whether any violation of subsection (a), as alleged
in the notice, has occurred. If such officer determines that
there was no violation, he shall promptly notify, in writing,
the person to whom the notice was sent. If such officer
determines that there was a violation, he shall issue a written
penalty claim to such person. The written penalty claim shall
specify all changes in the information provided under
paragraphs (1) through (4) of subsection (b).
(d) Remission for Necessary Repairs.--If the owner or master
of such vessel furnishes good and sufficient evidence that--
(1) such vessel, while in the regular course of her
voyage, was compelled, by stress of weather or other
casualty, to put into such foreign port and purchase
such equipments, or make such repairs, to secure the
safety and seaworthiness of the vessel to enable her to
reach her port of destination;
(2) such equipments or parts thereof or repair parts
or materials, were manufactured or produced in the
United States, and the labor necessary to install such
equipments or to make such repairs was performed by
residents of the United States, or by members of the
regular crew of such vessel; or
(3) such equipments, or parts thereof, or materials,
or labor, were used as dunnage for cargo, or for the
packing or shoring thereof, or in the erection of
temporary bulkheads or other similar devices for the
control of bulk cargo, or in the preparation (without
permanent repair or alteration) of tanks for the
carriage of liquid cargo; then the Secretary of the
Treasury is authorized to remit or refund such duties,
and such vessel shall not be liable to forfeiture, and
no license or enrollment and license, or renewal of
either, shall hereafter be issued to any such vessel
until the collector to whom application is made for the
same shall be satisfied, from the oath of the owner or
master, that all such equipments or parts thereof or
materials and repairs made within the year immediately
preceding such application have been duly accounted for
under the provisions of this section, and the duties
accruing thereon duly paid; and if such owner or master
shall refuse to take such oath, or take it falsely, the
vessel shall be seized and forfeited.
(e) Vessels used Primarily for Purposes Other Than
Transporting Passengers or Property.--
(1) In the case of any vessel referred to in
subsection (a) that arrives in a port of the United
States two years or more after its last departure from
a port in the United States, the duties imposed by this
section shall apply only with respect to--
(A) fish nets and netting, and
(B) other equipments and parts thereof,
repair parts and materials purchased, or
repairs made, during the first six months after
the last departure of such vessel from a port
of the United States.
(2) If such vessel is designed and used primarily for
transporting passengers or property, paragraph (1)
shall not apply if the vessel departed from the United
States for the sole purpose of obtaining such
equipments, parts, materials, or repairs.
(f) Civil Aircraft Exception.--The duty imposed under
subsection (a) shall not apply to the cost of equipments, or
any part thereof, purchased, of repair parts or materials used,
or of repairs made in a foreign country with respect to a
United States civil aircraft, within the meaning of general
note 3(c)(iv) of the Harmonized Tariff Schedule of the United
States.
(g) National Defense Reserve Fleet Exception.--
(1) In general.--The duty imposed under subsection
(a) shall not apply to the cost of equipment, or any
part thereof purchased, of repair parts or materials
used, or expenses of repairs made in a foreign country
for any vessel operated as part of the National Defense
Reserve Fleet when the vessel is under the
jurisdictional control of the Department of Defense if
equivalent equipment, parts, repair parts, or materials
made in the United States, or repairs made in the
United States were determined by the Secretary of
Transportation not to be reasonably available.
(2) Report on determinations.--The Secretary of
Transportation shall transmit a report to the Senate
Committee on Commerce, Science, and Transportation and
the House of Representatives Committee on Armed
Services setting forth the circumstances under which
any such determination was made by the Secretary.
[(g)] (h) Fish Net and Netting Purchases and Repairs.--The
duty imposed by subsection (a) shall not apply to entries on
and after October 1, 1979, and before January 1, 1982, of--
(1) tuna purse seine nets and netting which are
equipments or parts thereof,
(2) repair parts for such nets and netting, or
materials used in repairing such nets and netting, or
(3) the expenses of repairs of such nets and netting,
for any United States documented tuna purse seine
vessel of greater than 500 tons carrying capacity or
any United States tuna purse seine vessel required to
carry a certificate of inclusion under the general
permit issued to the American Tunaboat Association
pursuant to section 104 of the Marine Mammal Protection
Act of 1972.
[(h)] (i) Foreign Repair of Vessels.--The duty imposed by
subsection (a) of this section shall not apply to--
(1) the cost of any equipment, or any part of
equipment, purchased for, or the repair parts or
materials to be used, or the expense of repairs made in
a foreign country with respect to, LASH (Lighter Aboard
Ship) barges documented under the laws of the United
States and utilized as cargo containers;
(2) the cost of spare repair parts or materials
(other than nets or nettings) which the owner or master
of the vessel certifies are intended for use aboard a
cargo vessel, documented under the laws of the United
States and engaged in the foreign or coasting trade,
for installation or use on such vessel, as needed, in
the United States, at sea, or in a foreign country, but
only if duty is paid under appropriate commodity
classifications of the Harmonized Tariff Schedule of
the United States upon first entry into the United
States of each such spare part purchased in, or
imported from, a foreign country;
(3) the cost of spare parts necessarily installed
before the first entry into the United States, but only
if duty is paid under appropriate commodity
classifications of the Harmonized Tariff Schedule of
the United States upon first entry into the United
States of each such spare part purchased in, or
imported from, a foreign country; or
(4) the cost of equipment, repair parts, and
materials that are installed on a vessel documented
under the laws of the United States and engaged in the
foreign or coasting trade, if the installation is done
by members of the regular crew of such vessel while the
vessel is on the high seas. Declaration and entry shall
not be required with respect to the installation,
equipment, parts, and materials described in paragraph
(4).
* * * * * * *
[Insert A, attached as page ----A]
MERCHANT MARINE ACT, 1936
Title XI--Federal Ship Financing Guarantee Program
SEC. 1101. DEFINITIONS.
[46 U.S.C. App. 1271]
As used in this title--
(a) The term ``mortgage'' includes--
(1) a preferred mortgage as defined in section 31301
of title 46, United States Code; and
(2) a mortgage on a vessel that will become a
preferred mortgage when filed or recorded under chapter
313 of title 46, United States Code.
(b) The term ``vessel'' includes all types, whether in
existence or under construction, of passenger cargo and
combination passenger cargo carrying vessels, tankers, tugs,
towboats, barges, dredges and ocean thermal energy conversion
facilities or plantships which are or will be documented under
the laws of the United States, fishing vessels whose ownership
will meet the citizenship requirements for documenting vessels
in the coastwise trade within the meaning of section 2 of the
Shipping Act, 1916, as amended, floating drydocks which have a
capacity of thirty-five thousand or more lifting tons and a
beam of one hundred and twenty-five feet or more between the
wing walls and oceanographic research or instruction or
pollution treatment, abatement or control vessels;
(c) The term ``obligation'' shall mean any note, bond,
debenture, or other evidence of indebtedness (exclusive of
notes or other obligations issued by the [Secretary] Secretary
or Administrator pursuant to subsection (d) of section 1105 of
this title and obligations eligible for investment of funds
under section 1102 and subsection (d) of section 1108 of this
title), issued for one of the purposes specified in subsection
(a) of section 1104 of this title;
(d) The term ``obligor'' shall mean any party primarily
liable for payment of the principal of or interest on any
obligation;
(e) The term ``obligee'' shall mean the holder of an
obligation;
(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] Secretary or
Administrator 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.
(g) The term ``depreciated actual cost'' of a vessel means
the actual cost of the vessel depreciated on a straightline
basis over the useful life of the vessel as determined by the
[Secretary] Secretary or Administrator, not to exceed twenty-
five years from the date the vessel was delivered by the
shipbuilder, or, if the vessel has been reconstructed or
reconditioned, the actual cost of the vessel depreciated on a
straightline basis from the date the vessel was delivered by
the shipbuilder to the date of such reconstruction or
reconditioning on the basis of the original useful life of the
vessel and from the date of such reconstruction or
reconditioning on a straightline basis and on the basis of a
useful life of the vessel determined by the [Secretary]
Secretary or Administrator, plus all amounts paid or obligated
to be paid for the reconstruction or reconditioning depreciated
on a straightline basis on the basis of a useful life of the
vessel determined by the [Secretary] Secretary or
Administrator;
(h) The terms ``construction'', ``reconstruction'', or
``reconditioning'' shall include, but shall not be limited to,
designing, inspecting, outfitting, and equipping;
(i) The term ``ocean thermal energy conversion facility or
plantship'' means any at-sea facility or vessel, whether
mobile, floating unmoored, moored, or standing on the seabed,
which uses temperature differences in ocean water to produce
electricity or another form of energy capable of being used
directly to perform work, and includes any equipment installed
on such facility or vessel to use such electricity or other
form of energy to produce, process, refine, or manufacture a
product, and any cable or pipeline used to deliver such
electricity, freshwater, or product to shore, and all other
associated equipment and appurtenances of such facility or
vessel, to the extent they are located seaward of the highwater
mark;
(j) The term ``citizen of the Northern Mariana Islands''
means--
(1) an individual who qualifies as such under section
8 of the Schedule on Transitional Matters attached to
the Constitution of the Northern Mariana Islands; or
(2) a corporation, partnership, association, or other
entity formed under the laws of the Northern Mariana
Islands, not less than 75 percent of the interest in
which is owned by individuals referred to in paragraph
(1) or citizens or nationals of the United States, in
cases in which ``owned'' is used in the same sense as
in section 2 of the Shipping Act, 1916 (46 U.S.C. 802);
(k) The term ``fishery facility'' means--
(1) for operations on land--
(A) any structure or appurtenance thereto
designed for the unloading and receiving from
vessels, the processing, the holding pending
processing, the distribution after processing,
or the holding pending distribution, of fish
from one or more fisheries,
(B) the land necessary for any such structure
or appurtenance described in subparagraph (A),
and
(C) equipment which is for use in connection
with any such structure or appurtenance and
which is necessary for the performance of any
function referred to in subparagraph (A);
(2) for operations other than on land, any vessel
built in the United States used for, equipped to be
used for, or of a type which is normally used for, the
processing of fish; or
(3) for aquaculture, including operations on land or
elsewhere--
(A) any structure or appurtenance thereto
designed for aquaculture;
(B) the land necessary for any such structure
or appurtenance described in subparagraph (A);
(C) equipment which is for use in connection
with any such structure or appurtenance and
which is necessary for the performance of any
function referred to in subparagraph (A); and
(D) any vessel built in the United States
used for, equipped to be used for, or of a type
which is normally used for aquaculture; but
only if such structure, appurtenance, land,
equipment, or vessel is owned by an individual
who is a citizen or national of the United
States or a citizen of the Northern Mariana
Islands or by a corporation, partnership,
association, or other entity that is a citizen
of the United States within the meaning of
section 2 of the Shipping Act, 1916 (46 U.S.C.
802), and for purposes of applying such section
2 with respect to this section--
(i) the term ``State'' as used
therein includes any State, the
District of Columbia, the Commonwealth
of Puerto Rico, American Samoa, the
Virgin Islands of the United States,
Guam, the Northern Mariana Islands, or
any other Commonwealth, territory, or
possession of the United States; and
(ii) citizens of the United States
must own not less than 75 percent of
the interest in the entity and
nationals of the United States or
citizens of the Northern Mariana
Islands shall be treated as citizens of
the United States in meeting such
ownership requirement;
(l) The term ``fishing vessel'' has the meaning given such
term by section 3(11) of the Magnuson-Stevens Fishery
Conservation and Management Act of 1976 (16 U.S.C. 1802(11));
and any reference in this title to a vessel designed
principally for commercial use in the fishing trade or industry
shall be treated as a reference to a fishing vessel;
(m) The term ``United States'' when used in a geographical
context with respect to fishing vessels or fishery facilities
includes all States referred to in subsection (k)(i).
(n) The term ``Secretary'' means the Secretary of Commerce
with respect to fishing vessels and fishing facilities as
provided by this [title, and the Secretary of Transportation
with respect to all other vessels and general shipyard
facilities (as defined in section 1112(d)(3)).] title.
(o) The term ``eligible export vessel'' means a vessel
constructed, reconstructed, or reconditioned in the United
States for use in world-wide trade which will, upon delivery or
redelivery, be placed under or continued to be documented under
the laws of a country other than the United States.
(p) The term ``Administrator'' means the Administrator of
the Maritime Administration.
SEC. 1102. FEDERAL SHIP FINANCING FUND.
[46 U.S.C. App. 1272]
There is hereby created a Federal Ship Financing Fund
(hereinafter referred to as the Fund) which shall be used by
the [Secretary] Secretary or Administrator as a revolving fund
for the purpose of carrying out the provisions of this title,
and there shall be allocated to such Fund the sum of $1,000,000
out of funds made available to the [Secretary] Secretary or
Administrator under the appropriation authorized by Section
1107 (46 U.S.C.). Moneys in the Fund shall be deposited in the
Treasury of the United States to the credit of the Fund or
invested in bonds or other obligations of, or guaranteed as to
principal and interest by, the United States.
SEC. 1103. AUTHORIZATION OF SECRETARY TO GUARANTEE OBLIGATIONS.
[46 U.S.C. App. 1273].
(a) Principal and Interest.--The [Secretary] Secretary or
Administrator is authorized to guarantee, and to enter into
commitments to guarantee, the payment of the interest on, and
the unpaid balance of the principal of, any obligation which is
eligible to be guaranteed under this title. A guarantee, or
commitment to guarantee, made by the [Secretary] Secretary or
Administrator under this title shall cover 100 percent of the
amount of the principal and interest of the obligation.
(b) Security Interest.--No obligation shall be guaranteed
under this title unless the obligor conveys or agrees to convey
to the [Secretary] Secretary or Administrator such security
interest, which may include a mortgage or mortgages on a vessel
or vessels, as the [Secretary] Secretary or Administrator may
reasonably require to protect the interests of the United
States.
(c) Amount of Guarantee; Percentage Limitation; Determination
of Actual Cost of Vessel.--The [Secretary] Secretary or
Administrator shall not guarantee the principal of obligations
in an amount in excess of 75 per centum, or 87 \1/2\ per
centum, whichever is applicable under section 1104 of this
title, of the amount, as determined by the [Secretary]
Secretary or Administrator which determination shall be
conclusive, paid by or for the account of the obligor for the
construction, reconstruction, or reconditioning of a vessel or
vessels with respect to which a security interest has been
conveyed to the [Secretary] Secretary or Administrator, unless
the obligor creates an escrow fund as authorized by section
1108 of this title, in which case the [Secretary] Secretary or
Administrator may guarantee 75 per centum or 87\1/2\ per
centum, whichever is applicable under section 1104 of this
title, of the actual cost of such vessel or vessels.
(d) Pledge of United States.--The full faith and credit of
the United States is pledged to the payment of all guarantees
made under this title with respect to both principal and
interest, including interest, as may be provided for in the
guarantee, accruing between the date of default under a
guaranteed obligation and the payment in full of the guarantee.
(e) Proof of Obligations.--Any guarantee, or commitment to
guarantee, made by the [Secretary] Secretary or Administrator
under this title shall be conclusive evidence of the
eligibility of the obligations for such guarantee, and the
validity of any guarantee, or commitment to guarantee, so made
shall be incontestable. Notwithstanding an assumption of an
obligation by the [Secretary] Secretary or Administrator under
section 1105(a) or (b) of this Act, the validity of the
guarantee of an obligation made by the [Secretary] Secretary or
Administrator under this title is unaffected and the guarantee
remains in full force and effect.
(f) Limitation on Outstanding Amount.--The aggregate unpaid
principal amount of the obligations guaranteed under this
section and outstanding at any one time shall not exceed
$12,000,000,000, of which (1) $850,000,000 shall be limited to
obligations pertaining to guarantees of obligations for fishing
vessels and fishery facilities made under this title, and (2)
$3,000,000,000 shall be limited to obligations pertaining to
guarantees of obligations for eligible export vessels. No
additional limitations may be imposed on new commitments to
guarantee loans for any fiscal year, except in such amounts as
established in advance in annual authorization Acts. No vessel
eligible for guarantees under this title shall be denied
eligibility because of its type.
(g) Loan Guarantees for Export Vessels; Finding Required;
Termination of Authority.--
(1) The [Secretary] Secretary or Administrator may
not issue a commitment to guarantee obligations for an
eligible export vessel unless, after considering--
(A) the status of pending applications for
commitments to guarantee obligations for
vessels documented under the laws of the United
States and operating or to be operated in the
domestic or foreign commerce of the United
States,
(B) the economic soundness of the
applications referred to in subparagraph (A),
and
(C) the amount of guarantee authority
available, the [Secretary] Secretary or
Administrator determines, in the sole
discretion of the [Secretary] Secretary or
Administrator, that the issuance of a
commitment to guarantee obligations for an
eligible export vessel will not result in the
denial of an economically sound application to
issue a commitment to guarantee obligations for
vessels documented under the laws of the United
States operating in the domestic or foreign
commerce of the United States.
(2) The [Secretary] Secretary or Administrator may
not issue commitments to guarantee obligations for
eligible export vessels under this section after the
later of--
(A) the 5th anniversary of the date on which
the [Secretary] Secretary or Administrator
publishes final regulations setting forth the
application procedures for the issuance of
commitments to guarantee obligations for
eligible export vessels,
(B) the last day of any 5-year period in
which funding and guarantee authority for
obligations for eligible export vessels have
been continuously available, or
(C) the last date on which those commitments
may be issued under any treaty or convention
entered into after the date of the enactment of
the National Shipbuilding and Shipyard
Conversion Act of 1993 that prohibits guarantee
of those obligations.
(h)(1) The [Secretary] Secretary or Administrator shall--
(A) establish in accordance with this subsection, and
update annually, a system of risk categories for
obligations guaranteed under this title, that
categorizes the relative risk of guarantees made under
this title with respect to the risk factors set forth
in paragraph (3);
(B) annually determine for each of the risk
categories a subsidy rate equivalent to the cost of
obligations in the category, expressed as a percentage
of the amount guaranteed under this title for
obligations in the category; and
(C) ensure that each risk category is comprised of
loans that are relatively homogeneous in cost and share
characteristics predictive of defaults and other costs,
given the facts known at the time of obligation or
commitment, using a risk category system that is based
on historical analysis of program data and statistical
evidence concerning the likely costs of defaults or
other costs that expected to be associated with the
loans in the category.
(2)(A) Before making a guarantee under this section for an
obligation, and annually for projects subject to a guarantee,
the [Secretary] Secretary or Administrator shall apply the risk
factors set forth in paragraph (3) to place the obligation in a
risk category established under paragraph (1)(A).
(B) The [Secretary] Secretary or Administrator shall consider
the aggregate amount available to the [Secretary] Secretary or
Administrator for making guarantees under this title to be
reduced by the amount determined by multiplying--
(i) the amount guaranteed under this title for an
obligation, by
(ii) the subsidy rate for the category in which the
obligation is placed under subparagraph (A) of this
paragraph.
(C) The estimated cost to the Government of a guarantee made
by the [Secretary] Secretary or Administrator under this title
for an obligation is deemed to be the amount determined under
subparagraph (B) for the obligation.
(D) The [Secretary] Secretary or Administrator may not
guarantee obligations under this title after the aggregate
amount available to the [Secretary] Secretary or Administrator
under appropriations Acts for the cost of loan guarantees is
required by subparagraph (B) to be considered reduced to zero.
(3) The risk factors referred to in paragraphs (1) and (2)
are the following:
(A) If applicable, the country risk for each eligible
export vessel financed or to be financed by an
obligation.
(B) The period for which an obligation is guaranteed
or to be guaranteed.
(C) The amount of an obligation, which is guaranteed
or to be guaranteed, in relation to the total cost of
the project financed or to be financed by the
obligation.
(D) The financial condition of an obligor or
applicant for a guarantee.
(E) If applicable, any guarantee related to the
project, other than the guarantee under this title for
which the risk factor is applied.
(F) If applicable, the projected employment of each
vessel or equipment to be financed with an obligation.
(G) If applicable, the projected market that will be
served by each vessel or equipment to be financed with
an obligation.
(H) The collateral provided for a guarantee for an
obligation.
(I) The management and operating experience of an
obligor or applicant for a guarantee.
(J) Whether a guarantee under this title is or will
be in effect during the construction period of the
project.
(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.
(4) In this subsection, the term ``cost'' has the meaning
given that term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a).
(i) Priority for National Defense Tank Vessels.--In
guaranteeing and entering commitments to guarantee under this
section, the [Secretary] Administrator 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 D of the Maritime
Security Act of 2003.
(j) Priority for Other Vessels Suitable for Service as a
Naval Auxiliary.--[In guaranteeing and entering commitments to
guarantee under this section,] If the Secretary or
Administrator seeks a priority for a commitment to guarantee
under this section, the [Secretary] Administrator shall, after
applying subsection (i), give priority to a guarantee or
commitment for a vessel that is otherwise eligible for a
guarantee under this section and that the Secretary of Defense
determines--
(1) is suitable for service as a naval auxiliary in
time of war or national emergency; and
(2) meets a shortfall in sealift capacity or
capability.
SEC. 1104A. ELIGIBILITY FOR GUARANTEE.
[46 U.S.C. App. 1274]
(a) Purpose of Obligations.--Pursuant to the authority
granted under section 1103(a), the [Secretary] Secretary or
Administrator upon such terms as he shall prescribe, may
guarantee or make a commitment to guarantee, payment of the
principal of and interest on an obligation which aids in--
(1) financing, including reimbursement of an obligor
for expenditures previously made for, construction,
reconstruction, or reconditioning of a vessel
(including an eligible export vessel), which is
designed principally for research, or for commercial
use (A) in the coastwise or intercoastal trade; (B) on
the Great Lakes, or on bays, sounds, rivers, harbors,
or inland lakes of the United States; (C) in foreign
trade as defined in section 905 of this Act for
purposes of title V of this Act; or (D) as an ocean
thermal energy conversion facility or plantship; (E)
with respect to floating drydocks in the construction,
reconstruction, reconditioning, or repair of vessels;
or (F) with respect to an eligible export vessel, in
world-wide trade; Provided, however, That no guarantee
shall be entered into pursuant to this paragraph (a)(1)
later than one year after delivery, or redelivery in
the case of reconstruction or reconditioning of any
such vessel unless the proceeds of the obligation are
used to finance the construction, reconstruction, or
reconditioning of a vessel or vessels, or facilities or
equipment pertaining to marine operations;
(2) financing, including reimbursement of an obligor
for expenditures previously made for, construction,
reconstruction, reconditioning, or purchase of a vessel
or vessels owned by citizens or nationals of the United
States or citizens of the Northern Mariana Islands
which are designed principally for research, or for
commercial use in the fishing trade or industry;
(3) financing the purchase, reconstruction, or
reconditioning of vessels or fishery facilities for
which obligations were guaranteed under this title
that, under the provisions of section 1105:
(A) are vessels or fishery facilities for
which obligations were accelerated and paid;
(B) were acquired by the Fund; or
(C) were sold at foreclosure instituted by
the [Secretary] Secretary or Administrator;
(4) financing, in whole or in part, the repayment to
the United States of any amount of construction-
differential subsidy paid with respect to a vessel
pursuant to title V of this Act, as amended;
(5) refinancing existing obligations issued for one
of the purposes specified in (1), (2), (3), or (4)
whether or not guaranteed under this title, including,
but not limited to, short-term obligations incurred for
the purpose of obtaining temporary funds with the view
to refinancing from time to time;
(6) financing or refinancing, including, but not
limited to, the reimbursement of obligors for
expenditures previously made for, the construction,
reconstruction, reconditioning, or purchase of fishery
facilities; or
(7) financing or refinancing, including, but not
limited to, the reimbursement of obligors for
expenditures previously made, for the purchase of
individual fishing quotas in accordance with section
303(d)(4) of the Magnuson-Stevens Fishery Conservation
and Management Act (16 U.S.C. 1853(d)(4)).
Any obligation guaranteed under paragraphs (6) and (7) shall be
treated, for purposes of this title, in the same manner and to
the same extent as an obligation guaranteed under this title
which aids in the construction, reconstruction, reconditioning,
or purchase of a vessel; except with respect to provisions of
this title that by their nature can only be applied to vessels.
(b) Contents of Obligations.--Obligations guaranteed under
this title--
(1) shall have an obligor approved by the [Secretary]
Secretary or Administrator as responsible and
possessing the ability, experience, financial
resources, and other qualifications necessary to the
adequate operation and maintenance of the vessel or
vessels which serve as security for the guarantee of
the [Secretary] Secretary or Administrator;
(2) subject to the provisions of subsection (c)(1)
and subsection (i), shall be in an aggregate principal
amount which does not exceed 75 per centum of the
actual cost or depreciated actual cost, as determined
by the [Secretary] Secretary or Administrator, of the
vessel which is used as security for the guarantee of
the [Secretary] Secretary or Administrator: Provided,
however, That in the case of a vessel, the size and
speed of which are approved by the [Secretary]
Secretary or Administrator, and which is or would have
been eligible for mortgage aid for construction under
section 509 of this Act (or would have been eligible
for mortgage aid under section 509 of this Act except
that the vessel was built with the aid of construction-
differential subsidy and said subsidy has been repaid)
and in respect of which the minimum downpayment by the
mortgagor required by that section would be or would
have been 12\1/2\ per centum of the cost of such
vessel, such obligations may be in an amount which does
not exceed 87\1/2\ per centum of such actual cost or
depreciated actual cost: Provided, further, That the
obligations which relate to a barge which is
constructed without the aid of construction-
differential subsidy, or, if so subsidized, on which
said subsidy has been repaid, may be in an aggregate
principal amount which does not exceed 87\1/2\ per
centum of the actual cost or depreciated actual cost
thereof: Provided further, That in the case of a
fishing vessel or fishery facility, the obligation
shall be in an aggregate principal amount not to exceed
80 percent of the actual cost or depreciated actual
cost of the fishing vessel or fishery facility, except
that no debt may be placed under this proviso through
the Federal Financing Bank: Provided further, That in
the case of an ocean thermal energy conversion facility
or plantship which is constructed without the aid of
construction-differential subsidy, such obligations may
be in an aggregate principal amount which does not
exceed 87\1/2\ percent of the actual cost or
depreciated actual cost of the facility or plantship:
Provided further, That in the case of an eligible
export vessel, such obligations may be in an aggregate
principal amount which does not exceed 87\1/2\ of the
actual cost or depreciated actual cost of the eligible
export vessel;
(3) shall have maturity dates satisfactory to the
[Secretary] Secretary or Administrator but, subject to
the provisions of paragraph (2) of subsection (c) of
this section, not to exceed twenty-five years from the
date of the delivery of the vessel which serves as
security for the guarantee of the [Secretary] Secretary
or Administrator or, if the vessel has been
reconstructed or reconditioned, not to exceed the later
of (i) twenty-five years from the date of delivery of
the vessel and (ii) the remaining years of the useful
life of the vessel as determined by the [Secretary]
Secretary or Administrator;
(4) shall provide for payments by the obligor
satisfactory to the [Secretary] Secretary or
Administrator;
(5) shall bear interest (exclusive of charges for the
guarantee and service charges, if any) at rates not to
exceed such per centum per annum on the unpaid
principal as the [Secretary] Secretary or Administrator
determines to be reasonable, taking into account the
range of interest rates prevailing in the private
market for similar loans and the risks assumed by the
[Secretary] Secretary or Administrator;
(6) shall provide, or a related agreement shall
provide, that if the vessel used as security for the
guarantee of the [Secretary] Secretary or Administrator
is a delivered vessel, the vessel shall be in class A-
1, American Bureau of Shipping, or shall meet such
other standards as may be acceptable to the [Secretary]
Secretary or Administrator, with all required
certificates, including but not limited to, marine
inspection certificates of the United States Coast
Guard or, in the case of an eligible export vessel, of
the appropriate national flag authorities under a
treaty, convention, or other international agreement to
which the United States is a party, with all
outstanding requirements and recommendations necessary
for retention of class accomplished, unless the
[Secretary] Secretary or Administrator permits a
deferment of such repairs, and shall be tight, stanch,
strong, and well and sufficiently tackled, appareled,
furnished, and equipped, and in every respect seaworthy
and in good running condition and repair, and in all
respects fit for service; and
(7) may provide, or a related agreement may provide,
if the vessel used as security for the guarantee of the
[Secretary] Administrator is a passenger vessel having
the tonnage, speed, passenger accommodations and other
characteristics set forth in title V of this Act, as
amended, and if the Secretary approves, that the sole
recourse against the obligor by the United States for
any payments under the guarantee shall be limited to
repossession of the vessel and the assignment of
insurance claims and that the liability of the obligor
for any payments of principal and interest under the
guarantee shall be satisfied and discharged by the
surrender of the vessel and all right, title, and
interest therein to the United States: Provided, That
the vessel upon surrender shall be (i) free and clear
of all liens and encumbrances whatsoever except the
security interest conveyed to the [Secretary]
Administrator under this title, (ii) in class, and
(iii) in as good order and condition, ordinary wear and
tear excepted, as when acquired by the obligor, except
that any deficiencies with respect to freedom from
encumbrances, condition and class may, to the extent
covered by valid policies of insurance, be satisfied by
the assignment to the [Secretary] Administrator of
claims of the obligor under such policies.
The Secretary may not establish, as a condition of
eligibility for guarantee under this title, a minimum principal
amount for an obligation covering the reconstruction or
reconditioning of a fishing vessel or fishery facility. For
purposes of this title, the reconstruction or reconditioning of
a fishing vessel or fishery facility does not include the
routine minor repair or maintenance of the vessel or facility.
(c) Security.--(1) The security for the guarantee of an
obligation by the [Secretary] Secretary or Administrator under
this title may relate to more than one vessel and may consist
of any combination of types of security. The aggregate
principal amount of obligations which have more than one vessel
as security for the guarantee of the [Secretary] Secretary or
Administrator under this title may equal, but not exceed, the
sum of the principal amount of obligations permissible with
respect to each vessel.
(2) If the security for the guarantee of an obligation by the
[Secretary] Secretary or Administrator under this title relates
to more than one vessel, such obligation may have the latest
maturity date permissible under subsection (b) of this section
with respect to any of such vessels: Provided, That the
[Secretary] Secretary or Administrator may require such
payments of principal, prior to maturity, with respect to all
related obligations as he deems necessary in order to maintain
adequate security for his guarantee.
(d) Restrictions.--(1)(A) No commitment to guarantee, or
guarantee of, an obligation shall be made by the [Secretary of
Transportation] Administrator unless the [Secretary]
Administrator finds that the property or project with respect
to which the obligation will be executed will be economically
sound. In making that determination, the [Secretary]
Administrator shall consider--
(i) the need in the particular segment of the
maritime industry for new or additional capacity,
including any impact on existing equipment for which a
guarantee under this title is in effect;
(ii) the market potential for the employment of the
vessel over the life of the guarantee;
(iii) projected revenues and expenses associated with
employment of the vessel;
(iv) any charters, contracts of affreightment,
transportation agreements, or similar agreements or
undertakings relevant to the employment of the vessel;
(v) other relevant criteria; and
(vi) for inland waterways, the need for technical
improvements, including but not limited to increased
fuel efficiency, or improved safety.
(B) No commitment to guarantee, or guarantee of, and
obligation shall be made by the Secretary of Commerce unless
the Secretary finds, at or prior to the time such commitment is
made or guarantee becomes effective, that the property or
project with respect to which the obligation will be executed
will be, in the Secretary's opinion, economically sound and in
the case of fishing vessels, that the purpose of the financing
or refinancing is consistent with the wise use of the fisheries
resources and with the development, advancement, management,
conservation, and protection of the fisheries resources, or
with the need for technical improvements including but not
limited to increased fuel efficiency or improved safety.
(2) No commitment to guarantee, or guarantee of an obligation
may be made by the Secretary under this title for the purchase
of a used fishing vessel or used fishery facility unless--
(A) the vessel or facility will be reconstructed or
reconditioned in the United States and will contribute
to the development of the United States fishing
industry; or
(B) the vessel or facility will be used in the
harvesting of fish from, or for a purpose described in
section 1101(k) with respect to, an underutilized
fishery.
(3) No commitment to guarantee, or guarantee of an obligation
may be made by the [Secretary] Administrator under this title
for the construction, reconstruction, or reconditioning of an
eligible export vessel unless--
(A) the [Secretary] Administrator finds that the
construction, reconstruction, or reconditioning of that
vessel will aid in the transition of United States
shipyards to commercial activities or will preserve
shipbuilding assets that would be essential in time of
war or national emergency, and
(B) the owner of the vessel agrees with the
[Secretary of Transportation] Administrator that the
vessel shall not be transferred to any country
designated by the Secretary of Defense as a country
whose interests are hostile to the interests of the
United States.
(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--
(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
(B) [the waiver] if deemed necessary by the Secretary
or Administrator, the waiver shall provide for the
imposition of other requirements on the obligor
designed to compensate for [the increased] any
significant increase in risk associated with the
obligor's failure to meet regulatory requirements
applicable to financial condition.
(e) Guarantee Fees.--(1) Except as otherwise provided in this
subsection, the [Secretary] Secretary or Administrator shall
prescribe regulations to assess in accordance with this
subsection a fee for the guarantee of an obligation under this
title.
(2)(A) The amount of a fee under this subsection for a
guarantee is equal to the sum determined by adding the amounts
determined under subparagraph (B) for the years in which the
guarantee is in effect.
(B) The amount referred to in subparagraph (A) for a year is
the present value (determined by applying the discount rate
determined under subparagraph (F)) of the amount determined by
multiplying--
(i) the estimated average unpaid principal amount of
the obligation that will be outstanding during the year
(determined in accordance with subparagraph (E)), by
(ii) the fee rate established under subparagraph (C)
for the obligation for each year.
(C) The fee rate referred to in subparagraph (B)(ii) for an
obligation shall be--
(i) in the case of an obligation for a delivered
vessel or equipment, not less than one-half of 1
percent and not more than 1 percent, determined by the
[Secretary] Secretary or Administrator for the
obligation under the formula established under
subparagraph (D); or
(ii) in the case of an obligation for a vessel to be
constructed, reconstructed, or reconditioned, or of
equipment to be delivered, not less than one-quarter of
1 percent and not more than one-half of 1 percent,
determined by the [Secretary] Secretary or
Administrator for the obligation under the formula
established under subparagraph (D).
(D) The [Secretary] Secretary or Administrator shall
establish a formula for determining the fee rate for an
obligation for purposes of subparagraph (C), that--
(i) is a sliding scale based on the creditworthiness
of the obligor;
(ii) takes into account the security provided for a
guarantee under this title for the obligation; and
(iii) uses--
(I) in the case of the most creditworthy
obligors, the lowest rate authorized under
subparagraph (C)(i) or (ii), as applicable; and
(II) in the case of the least creditworthy
obligors, the highest rate authorized under
subparagraph (C)(i) or (ii), as applicable.
(E) For purposes of subparagraph (B)(i), the estimated
average unpaid principal amount does not include the average
amount (except interest) on deposit in a year in the escrow
fund under section 1108.
(F) For purposes of determining present value under
subparagraph (B) for an obligation, the [Secretary] Secretary
or Administrator shall apply a discount rate determined by the
Secretary of the Treasury taking into consideration current
market yields on outstanding obligations of the United States
having periods to maturity comparable to the period to maturity
for the obligation with respect to which the determination of
present value is made.
(3) A fee under this subsection shall be assessed and
collected not later than the date on which amounts are first
paid under an obligation with respect to which the fee is
assessed.
(4) A fee paid under this subsection is not refundable.
However, an obligor shall receive credit for the amount paid
for the remaining term of the guaranteed obligation if the
obligation is refinanced and guaranteed under this title after
such refinancing.
(5) A fee paid under subsection (e) shall be included in the
amount of the actual cost of the obligation guaranteed under
this title and is eligible to be financed under this title.
(f) Investigation of Applications.--(1) The [Secretary]
Secretary or Administrator shall charge and collect from the
obligor such amounts as he may deem reasonable for the
investigation of applications for a guarantee, for the
appraisal of properties offered as security for a guarantee,
for the issuance of commitments, for services in connection
with the escrow fund authorized by section 1108 and for the
inspection of such properties during construction,
reconstruction, or reconditioning: Provided, That such charges
shall not aggregate more than one-half of 1 per centum of the
original principal amount of the obligations to be guaranteed.
(2) The [Secretary] Secretary or Administrator 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] or financial structures. Any
independent analysis conducted pursuant to this provision shall
be performed by a party chosen by the [Secretary] Secretary or
Administrator. The Secretary or Administrator shall not
establish by rule, regulation, or procedure any requirement for
independent analysis that is, or is intended to be, applied
uniformly to loan guarantee applications without regard to such
risk factors.
(3) Notwithstanding any other provision of this title, the
[Secretary] Secretary or Administrator may make a determination
that an application under this title requires additional equity
because of increased risk factors associated with markets,
technology, [financial structures, or other risk factors
identified by the Secretary.] or financial structures.
(4) The [Secretary] Secretary or Administrator may charge and
collect fees to cover the costs of independent analysis under
paragraph (2). Notwithstanding section 3302 of title 31, United
States Code, any fee collected under this paragraph shall--
(A) be credit as an offsetting collection to the
account that finances the administration of the loan
guarantee program;
(B) shall be available for expenditure only to pay
the costs of activities and services for which the fee
is imposed; and
(C) shall remain available until expended.
(5) A third party independent analysis conducted under
paragraph (2) shall be performed by a private sector expert in
assessing such risk factors who is selected by the
Administrator. No Federal funds shall be expended to conduct
any review of any application under this title, or any
modification of an existing loan guarantee, by any party that
is not an expert in maritime finance or operations.
(g) Disposition of Moneys.--All moneys received by the
[Secretary] Secretary or Administrator under the provisions of
sections 1101-1107 of this title shall be deposited in the
Fund.
(h) Additional Requirements.--Obligations guaranteed under
this title and agreements relating thereto shall contain such
other provisions with respect to the protection of the security
interests of the United States (including acceleration,
assumptions, and subrogation provisions and the issuance of
notes by the obligor to the [Secretary] Secretary or
Administrator), liens and releases of liens, payments of taxes,
and such other matters as the [Secretary] Secretary or
Administrator may, in his discretion, prescribe.
(i) Limitation on Establishment of Percentage.--The
[Secretary] Secretary or Administrator may not, with respect
to--
(1) the general 75 percent or less limitation in
subsection (b)(2);
(2) the 87\1/2\ percent or less limitation in the
1st, 2nd, 4th, or 5th proviso to subsection (b)(2) or
section 1112(b); or
(3) the 80 percent or less limitation in the 3rd
proviso to such subsection; establish by rule,
regulation, or procedure any percentage within any such
limitation that is, or is intended to be, applied
uniformly to all guarantees or commitments to guarantee
made under this section that are subject to the
limitation.
(j) Procedure Upon Receiving Loan Guarantee Application.--(1)
Upon receiving an application for a loan guarantee for an
eligible export vessel, the [Secretary] Administrator shall
promptly provide to the Secretary of Defense notice of the
receipt of the application. During the 30-day period beginning
on the date on which the Secretary of Defense receives such
notice, the Secretary of Defense may disapprove the loan
guarantee based on the assessment of the [Secretary]
Administrator of the potential use of the vessel in a manner
that may cause harm to United States national security
interests. The Secretary of Defense may not disapprove a loan
guarantee under this section solely on the basis of the type of
vessel to be constructed with the loan guarantee. The authority
of the [Secretary] Administrator to disapprove a loan guarantee
under this section may not be delegated to any official other
than a civilian officer of the Department of Defense appointed
by the President, by and with the advice and consent of the
Senate.
(2) [The Secretary of Transportation] The Administrator may
not make a loan guarantee disapproved by the Secretary of
Defense under paragraph (1).
(k) Monitoring.--The [Secretary] Secretary or Administrator
shall monitor the financial conditions and operations of the
obligor on a regular basis during the term of the guarantee.
The [Secretary] Secretary or Administrator shall document the
results of the monitoring on an annual or quarterly basis
depending upon the condition of the obligor. If the [Secretary]
Secretary or Administrator determines that the financial
condition of the obligor warrants additional protections to the
[Secretary] Secretary or Administrator, then the [Secretary]
Secretary or Administrator shall take appropriate action under
subsection (m) of this section. If the [Secretary] Secretary or
Administrator determines that the financial condition of the
obligor jeopardizes its continued ability to perform its
responsibilities in connection with the guarantee of
obligations by the [Secretary] Secretary or Administrator, the
[Secretary] Secretary or Administrator 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] Secretary or
Administrator while insuring that program objectives are met.
(l) Review of Applications.--No commitment to guarantee, or
guarantee of, an obligation shall be made by the [Secretary]
Secretary or Administrator unless the [Secretary] Secretary or
Administrator certifies that a full and fair consideration of
all the regulatory requirements, including economic soundness
and financial requirements applicable to obligors and related
parties, and a thorough assessment of the technical, economic,
and financial aspects of the loan application has been made.
The Administrator shall retain in the Maritime Administration
adequate resources with sufficient expertise to perform the
functions prescribed by this title so that no assistance from
the Department of Transportation or any other Federal agency is
required to carry out this title.
(m) Agreement With Obligor.--The [Secretary] Secretary or
Administrator shall include provisions in loan agreements with
obligors that provide additional authority to the [Secretary]
Secretary or Administrator 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.] If the Secretary or Administrator has waived a
requirement under section 1104A(d), the loan agreement shall
include requirements for additional payments, collateral, or
equity contributions to meet such waived requirement upon the
occurrence of verifiable conditions indicating that the
obligor's financial condition enables the obligor to meet the
waived requirement.
(n) Decision Period.--(1) In general.--[The Secretary of
Transportation] The Administrator 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] Administrator.
(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.
SEC. 1104B. FINANCING CONTRACT FOR CONSTRUCTION OR RECONSTRUCTION OF
COMMERCIAL VESSEL; VESSEL REPLACEMENT GUARANTEE
FUND.
[46 U.S.C. App. 1274a]
(a) Notwithstanding the provisions of this title, except as
provided in subsection (d) of this section, the [Secretary]
Secretary or Administrator, upon the terms the [Secretary]
Secretary or Administrator may prescribe, may guarantee or make
a commitment to guarantee, payment of the principal of and
interest on an obligation which aids in financing and
refinancing, including reimbursement to an obligor for
expenditures previously made, of a contract for construction or
reconstruction of a vessel or vessels which are designed and to
be employed for commercial use in the coastwise or intercoastal
trade or in foreign trade as defined in section 905 of this Act
if--
(1) the construction or reconstruction by an
applicant is made necessary to replace vessels the
continued operation of which is denied by virtue of the
imposition of a statutorily mandated change in
standards for the operation of vessels, and where, as a
matter of law, the applicant would otherwise be denied
the right to continue operating vessels in the trades
in which the applicant operated prior to the taking
effect of the statutory or regulatory change;
(2) the applicant is presently engaged in
transporting cargoes in vessels of the type and class
that will be constructed or reconstructed under this
section, and agrees to employ vessels constructed or
reconstructed under this section as replacements only
for vessels made obsolete by changes in operating
standards imposed by statute;
(3) the capacity of the vessels to be constructed or
reconstructed under this title will not increase the
cargo carrying capacity of the vessels being replaced;
(4) the [Secretary] Secretary or Administrator has
not made a determination that the market demand for the
vessel over its useful life will diminish so as to make
the granting of the guarantee fiduciarily imprudent;
and
(5) the [Secretary] Secretary or Administrator has
considered the provisions of section
1104A(d)(1)(A)(iii), (iv), and (v) of this title.
(b) For the purposes of this section--
(1) the maximum term for obligations guaranteed under
this program may not exceed 25 years;
(2) obligations guaranteed may not exceed 87\1/2\
percent of the actual cost or depreciated actual cost
to the applicant for the construction or reconstruction
of the vessel; and
(3) reconstruction cost obligations may not be
guaranteed unless the vessel after reconstruction will
have a useful life of at least 15 years. The
[Secretary] Secretary or Administrator may not by rule,
regulation, or procedure establish any percentage
within the 87\1/2\ percent or less limitation in
paragraph (2) that is, or is intended to be, applied
uniformly to all guarantees or commitments to guarantee
made under this section.
(c)(1) The [Secretary] Secretary or Administrator shall by
rule require that the applicant provide adequate security
against default. The [Secretary] Secretary or Administrator
may, in addition to any fees assessed under section 1104A(e),
establish a Vessel Replacement Guarantee Fund into which shall
be paid by obligors under this section--
(A) annual fees which may be an additional amount on
the loan guarantee fee in section 1104A(e) not to
exceed an additional 1 percent; or
(B) fees based on the amount of the obligation versus
the percentage of the obligor's fleet being replaced by
vessels constructed or reconstructed under this
section.
(2) The Vessel Replacement Guarantee Fund shall be a
subaccount in the Federal Ship Financing Fund, and shall--
(A) be the depository for all moneys received by the
[Secretary] Secretary or Administrator under sections
1101 through 1107 of this title with respect to
guarantee or commitments to guarantee made under this
section;
(B) not include investigation fees payable under
section 1104A(f) which shall be paid to the Federal
Ship Financing Fund; and
(C) be the depository, whenever there shall be
outstanding any notes or obligations issued by the
[Secretary] Secretary or Administrator under section
1105(d) with respect to the Vessel Replacement
Guarantee Fund, for all moneys received by the
[Secretary] Secretary or Administrator under sections
1101 through 1107 from applicants under this section.
(d) The program created by this section shall, in addition to
the requirements of this section, be subject to the provisions
of sections 1101 through 1103; 1104A(b)(1), (4), (5), (6);
1104A(e); 1104A(f); 1104A(h); and 1105 through 1107; except
that the Federal Ship Financing Fund is not liable for any
guarantees or commitments to guarantee issued under this
section.
SEC. 1105. DEFAULTS.
[46 U.S.C. App. 1275]
(a) Rights of Obligee.--In the event of a default, which has
continued for thirty days, in any payment by the obligor of
principal or interest due under an obligation guaranteed under
this title, the obligee or his agent shall have the right to
demand (unless the [Secretary] Secretary or Administrator
shall, upon such terms as may be provided in the obligation or
related agreements, prior to that demand, have assumed the
obligor's rights and duties under the obligation and agreements
and shall have made any payments in default) at or before the
expiration of such period as may be specified in the guarantee
or related agreements, but not later than ninety days from the
date of such default, payment by the [Secretary] Secretary or
Administrator of the unpaid principal amount of said obligation
and of the unpaid interest thereon to the date of payment.
Within such period as may be specified in the guarantee or
related agreements, but not later than thirty days from the
date of such demand, the [Secretary] Secretary or Administrator
shall promptly pay to the obligee or his agent the unpaid
principal amount of said obligation and unpaid interest thereon
to the date of payment: Provided, That the [Secretary]
Secretary or Administrator shall not be required to make such
payment if prior to the expiration of said period he shall find
that there was no default by the obligor in the payment of
principal or interest or that such default has been remedied
prior to any such demand.
(b) Notice of Default.--In the event of a default under a
mortgage, loan agreement, or other security agreement between
the obligor and the [Secretary] Secretary or Administrator, the
[Secretary] Secretary or Administrator may upon such terms as
may be provided in the obligation or related agreement, either:
(1) assume the obligor's rights and duties under the
agreement, make any payment in default, and notify the
obligee or the obligee's agent of the default and the
assumption by the [Secretary] Secretary or
Administrator; or
(2) notify the obligee or the obligee's agent of the
default, and the obligee or the obligee's agent shall
have the right to demand at or before the expiration of
such period as may be specified in the guarantee or
related agreements, but not later than 60 days from the
date of such notice, payment by the [Secretary]
Secretary or Administrator of the unpaid principal
amount of said obligation and of the unpaid interest
thereon. Within such period as may be specified in the
guarantee or related agreements, but not later than 30
days from the date of such demand, the [Secretary]
Secretary or Administrator shall promptly pay to the
obligee or the obligee's agent the unpaid principal
amount of said obligation and unpaid interest thereon
to the date of payment.
(c) [Secretary] Secretary or Administrator To Complete, Sell
or Operate Property.--In the event of any payment or assumption
by the [Secretary] Secretary or Administrator under subsection
(a) or (b) of this section, the [Secretary] Secretary or
Administrator shall have all rights in any security held by him
relating to his guarantee of such obligations as are conferred
upon him under any security agreement with the obligor.
Notwithstanding any other provision of law relating to the
acquisition, handling, or disposal of property by the United
States, the [Secretary] Secretary or Administrator shall have
the right, in his discretion, to complete, recondition,
reconstruct, renovate, repair, maintain, operate, charter, or
sell any property acquired by him pursuant to a security
agreement with the obligor or may place a vessel in the
national defense reserve. The terms of the sale shall be as
approved by the [Secretary] Secretary or Administrator.
(d) Cash Payments; Issuance of Notes of Obligations.--Any
amount required to be paid by the [Secretary] Secretary or
Administrator pursuant to subsection (a) or (b) of this
section, shall be paid in cash. If at any time the moneys in
the Fund authorized by section 1102 of this Act are not
sufficient to pay any amount the [Secretary] Secretary or
Administrator is required to pay by subsection (a) or (b) of
this section, the [Secretary] Secretary or Administrator is
authorized to issue to the Secretary of the Treasury notes or
other obligations in such forms and denominations, bearing such
maturities, and subject to such terms and conditions as may be
prescribed by the [Secretary] Secretary or Administrator, with
the approval of the Secretary of the Treasury. Such notes or
other obligations shall bear interest at a rate determined by
the Secretary of the Treasury, taking into consideration the
current average market yield on outstanding marketable
obligations of the United States of comparable maturities
during the month preceding the issuance of such notes or other
obligations. The Secretary of the Treasury is authorized and
directed to purchase any notes and other obligations to be
issued hereunder and for such purpose he is authorized to use
as a public debt transaction the proceeds from the sale of any
securities issued under the Second Liberty Bond Act, as
amended, and the purposes for which securities may be issued
under such Act, as amended, are extended to include any
purchases of such notes and obligations. The Secretary of the
Treasury may at any time sell any of the notes or other
obligations acquired by him under this section. All
redemptions, purchases, and sales by the Secretary of the
Treasury of such notes or other obligations shall be treated as
public debt transactions of the United States. Funds borrowed
under this section shall be deposited in the Fund and
redemptions of such notes and obligations shall be made by the
[Secretary] Secretary or Administrator from such Fund.
(e) Actions Against Obligor.--In the event of a default under
any guaranteed obligation or any related agreement, the
[Secretary] Secretary or Administrator shall take such action
against the obligor or any other parties liable thereunder
that, in his discretion, may be required to protect the
interests of the United States. Any suit may be brought in the
name of the United States or in the name of the obligee and the
obligee shall make available to the United States all records
and evidence necessary to prosecute any such suit. The
[Secretary] Secretary or Administrator shall have the right, in
his discretion, to accept a conveyance of title to and
possession of property from the obligor or other parties liable
to the [Secretary] Secretary or Administrator, and may purchase
the property for an amount not greater than the unpaid
principal amount of such obligation and interest thereon. In
the event that the [Secretary] Secretary or Administrator shall
receive through the sale of property an amount of cash in
excess of the unpaid principal amount of the obligation and
unpaid interest on the obligation and the expenses of
collection of those amounts, the [Secretary] Secretary or
Administrator shall pay the excess to the obligor.
(f) Default Response.--In the event of default on an
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, including prompt referral to the Attorney
General for collection as appropriate;
(2) minimizes the amount of any loss realized in the
resolution of the guarantee;
(3) ensures adequate competition and fair and
consistent treatment of offerors; and
(4) requires appraisal of assets by an independent
appraiser.
* * * * * * *
SEC. 1108. ESCROW FUND.
[46 U.S.C. App. 1279a]
(a) Creation.--If the proceeds of an obligation guaranteed
under this title are to be used to finance the construction,
reconstruction, or reconditioning of a vessel or vessels which
will serve as security for the guarantee of the, the
[Secretary] Secretary or Administrator is authorized to accept
and hold, in escrow under an escrow agreement with the obligor,
a portion of the proceeds of all obligations guaranteed under
this title whose proceeds are to be so used which is equal to:
(i) the excess of the principal amount of all
obligations whose proceeds are to be so used over 75
per centum, or 87\1/2\ per centum, whichever is
applicable under section 1104 of this title, paid by or
for the account of the obligor for the construction,
reconstruction, or reconditioning of the vessel or
vessels;
(ii) with such interest thereon, if any, as the
[Secretary] Secretary or Administrator may require:
Provided, That in the event the security for the
guarantee of an obligation by the [Secretary] Secretary
or Administrator relates both to a vessel or vessels to
be constructed, reconstructed or reconditioned and to a
delivered vessel or vessels, the principal amount of
such obligation shall be prorated for purposes of this
subsection (a) under regulations prescribed by the
[Secretary] Secretary or Administrator.
(b) Disbursement Prior to Termination of Escrow Agreement.--
The [Secretary] Secretary or Administrator shall, as specified
in the escrow agreement, disburse the escrow fund to pay
amounts the obligor is obligated to pay as interest on such
obligations or for the construction, reconstruction, or
reconditioning of the vessel or vessels used as security for
the guarantee of the [Secretary] Secretary or Administrator
under this title, to redeem such obligations in connection with
a refinancing under paragraph (4) of subsection (a) of section
1104 or to pay to the obligor at such times as may be provided
for in the escrow agreement any excess interest deposits,
except that if payments become due under the guarantee prior to
the termination of the escrow agreement, all amounts in the
escrow fund at the time such payments become due (including
realized income which has not yet been paid to the obligor)
shall be paid into the Fund and (i) be credited against any
amounts due or to become due to the [Secretary] Secretary or
Administrator from the obligor with respect to the guaranteed
obligations and (ii) to the extent not so required, be paid to
the obligor.
(c) Disbursement Upon Termination of Escrow Agreement.--If
payments under the guarantee have not become due prior to the
termination of the escrow agreement, any balance of the escrow
fund at the time of such termination shall be disbursed to
prepay the excess of the principal of all obligations whose
proceeds are to be used to finance the construction,
reconstruction, or reconditioning of the vessel or vessels
which serve or will serve as security for such guarantee over
75 per centum or 87\1/2\ per centum, whichever is applicable
under section 1104 of this title, of the actual cost of such
vessel or vessels to the extent paid, and to pay interest on
such prepaid amount of principal, and the remainder of such
balance of the escrow fund shall be paid to the obligor.
(d) Investment of Fund.--The [Secretary] Secretary or
Administrator may invest and reinvest all or any part of the
escrow fund in obligations of the United States with such
maturities that the escrow fund will be available as required
for purposes of the escrow agreement.
(e) Payment of Income.--Any income realized on the escrow
fund shall, upon receipt, be paid to the obligor.
(f) Terms of Escrow Agreement.--The escrow agreement shall
contain such other terms as the [Secretary] Secretary or
Administrator may consider necessary to protect fully the
interests of the United States.
(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 percent or 12\1/2\ percent, whichever is
applicable under section 1104A, of the aggregate actual cost of
the vessel, as previously approved by the [Secretary] Secretary
or Administrator. If the aggregate actual cost of the vessel
has increased since the [Secretary's] Secretary's or
Administrator's initial approval or if it increases after the
first disbursement is permitted under this subsection, then no
further disbursements shall be made under subsection (b) until
the total amount paid by or for the account of the obligor from
sources other than the proceeds of the obligation equals at
least 25 percent or 12\1/2\ percent, as applicable, of the
increase, as determined by the [Secretary] Secretary or
Administrator, in the aggregate actual cost of the vessel.
Nothing in this paragraph shall require the [Secretary]
Secretary or Administrator to consent to finance any increase
in actual cost unless the [Secretary] Secretary or
Administrator determines that such an increase in the
obligation meets all the terms and conditions of this title or
other applicable law.
(2) Documented Proof of Progress Requirement.--The
[Secretary] Secretary or Administrator shall, by regulation,
establish a transparent, independent, and risk-based process
for verifying and documenting the progress of projects under
construction before disbursing guaranteed loan funds. At a
minimum, the process shall require documented proof of progress
in connection with the construction, reconstruction, or
reconditioning of a vessel or vessels before disbursements are
made from the escrow fund. The [Secretary] Secretary or
Administrator may require that the obligor provide a
certificate from an independent party certifying that the
requisite progress in construction, reconstruction, or
reconditioning has taken place.
SEC. 1109. DEPOSIT FUND.
[46 U.S.C. App. 1279b.]
(a) Establishment of Deposit Fund.--There is established in
the Treasury a deposit fund for purposes of this section. The
[Secretary] Secretary or Administrator may, in accordance with
an agreement under subsection (b), deposit into and hold in the
deposit fund cash belonging to an obligor to serve as
collateral for a guarantee under this title made with respect
to the obligor.
(b) Agreement.--(1) In General.--The [Secretary] Secretary or
Administrator and an obligor shall enter into a reserve fund or
other collateral account agreement to govern the deposit,
withdrawal, retention, use, and reinvestment of cash of the
obligor held in the deposit fund established by subsection (a).
(2) Terms.--The agreement shall contain such terms and
conditions as are required under this section and such
additional terms as are considered by the [Secretary] Secretary
or Administrator to be necessary to protect fully the interests
of the United States.
(3) Security Interest of United States.--The agreement shall
include terms that grant to the United States a security
interest in all amounts deposited into the deposit fund.
(c) Investment.--The may invest and reinvest any part of the
amounts in the deposit fund established by subsection (a) in
obligations of the United States with such maturities as ensure
that amounts in the deposit fund will be available as required
for purposes of agreements under subsection (b). Cash balances
of the deposit fund in excess of current requirements shall be
maintained in a form of uninvested funds and the Secretary of
the Treasury shall pay interest on these funds.
(d) Withdrawals.--(1) In General.--The cash deposited into
the deposit fund established by subsection (a) may not be
withdrawn without the consent of the [Secretary] Secretary or
Administrator.
(2) Use of Income.--Subject to paragraph (3), the [Secretary]
Secretary or Administrator may pay any income earned on cash of
an obligor deposited into the deposit fund in accordance with
the terms of the agreement with the obligor under subsection
(b).
(3) Retention Against Default.--The [Secretary] Secretary or
Administrator may retain and offset any or all of the cash of
an obligor in the deposit fund, and any income realized
thereon, as part of the [Secretary's] Secretary's or
Administrator's recovery against the obligor in case of a
default by the obligor on an obligation.
SEC. 1110. OCEAN THERMAL ENERGY CONVERSION DEMONSTRATION FACILITIES AND
PLANTSHIPS.
[46 U.S.C. App. 1279c]
(a) Financing of Construction, Reconstruction, or
Reconditioning.--Pursuant to the authority granted under
section 1103(a) of this title, the [Secretary] Administrator,
upon such terms as he shall prescribe, may guarantee or make a
commitment to guarantee, payment of the principal of and
interest on an obligation which aids in financing, including
reimbursement of an obligor for expenditures previously made
for, construction, reconstruction, or reconditioning of a
commercial demonstration ocean thermal energy conversion
facility or plantship. Guarantees or commitments to guarantee
under this subsection shall be subject to all the provisos,
requirements, regulations, and procedures which apply to
guarantees or commitments to guarantee made pursuant to section
1104(a)(1) of this title, except that--
(1) no guarantees or commitments to guarantee may be
made by the [Secretary] Administrator under this
subsection before October 1, 1981;
(2) the provisions of subsection (d) of section 1104
of this title shall apply to guarantees or commitments
to guarantee for that portion of a commercial
demonstration ocean thermal energy conversion facility
or plantship not to be supported with appropriated
Federal funds;
(3) guarantees or commitments to guarantee made
pursuant to this section may be in an aggregate
principal amount which does not exceed 87\1/2\ percent
of the actual cost or depreciated actual cost of the
commercial demonstration ocean thermal energy
conversion facility or plantship: Provided, That, if
the commercial demonstration ocean thermal energy
conversion facility or plantship is supported with
appropriated Federal funds, such guarantees or
commitments to guarantee may not exceed 87\1/2\ percent
of the aggregate principal amount of that portion of
the actual cost or depreciated actual cost for which
the obligor has an obligation to secure financing in
accordance with the terms of the agreement between the
obligor and the Department of Energy or other Federal
agency; and
(4) the provisions of this section may be used to
guarantee obligations for a total of not more than 5
separate commercial demonstration ocean thermal energy
conversion facilities and plantships or a demonstrated
400 megawatt capacity, whichever comes first.
(b) Certification of Reasonableness of Risk.--A guarantee or
commitment to guarantee shall not be made under this section
unless the Secretary of Energy, in consultation with the
[Secretary] Administrator, certifies to the [Secretary]
Administrator that, for the ocean thermal energy conversion
facility or plantship for which the guarantee or commitment to
guarantee is sought, there is sufficient guarantee of
performance and payment to lower the risk to the Federal
Government to a level which is reasonable. The Secretary of
Energy must base his considerations on the following:
(1) the successful demonstration of the technology to
be used in such facility at a scale sufficient to
establish the likelihood of technical and economic
viability in the proposed market; and
(2) the need of the United States to develop new and
renewable sources of energy and the benefits to be
realized from the construction and successful operation
of such facility or plantship.
(c) OTEC Demonstration Fund.--A special subaccount in the
Federal Ship Financing Fund, to be known as the OTEC
Demonstration Fund, shall be established on October 1, 1981.
The OTEC Demonstration Fund shall be used for obligation
guarantees authorized under this section which do not qualify
under other sections of this title. Except as specified
otherwise in this section, the operation of the OTEC
Demonstration Fund shall be identical with that of the parent
Federal Ship Financing Fund: except that, notwithstanding the
provisions of section 1104(g), (1) all moneys received by the
[Secretary] Administrator pursuant to sections 1101 through
1107 of this title with respect to guarantees or commitments to
guarantee made pursuant to this section shall be deposited only
in the OTEC Demonstration Fund, and (2) whenever there shall be
outstanding any notes or other obligations issued by the
[Secretary] Administrator pursuant to section 1105(d) of this
title with respect to the OTEC Demonstration Fund, all moneys
received by the [Secretary] Administrator pursuant to sections
1101 through 1107 of this title with respect to ocean thermal
energy conversional facilities or plantships shall be deposited
in the OTEC Demonstration Fund. Assets in the OTEC
Demonstration Fund may at any time be transferred to the parent
fund whenever and to the extent that the balance thereof
exceeds the total guarantees or commitments to guarantee made
pursuant to this section then outstanding, plus any notes or
other obligations issued by the [Secretary] Administrator
pursuant to section 1105(d) of this title with respect to the
OTEC Demonstration Fund. The Federal Ship Financing Fund shall
not be liable for any guarantees or commitments to guarantee
issued pursuant to this section. The aggregate unpaid principal
amount of the obligations guaranteed with the backing of the
OTEC Demonstration Fund and outstanding at any one time shall
not exceed $1,650,000,000.
(d) Notes and Obligations.--The provisions of section 1105(d)
of this title shall apply specifically to the OTEC
Demonstration Fund as well as to the Fund: Provided, however,
That any notes or obligations issued by the [Secretary]
Administrator pursuant to section 1105(d) of this title with
respect to the OTEC Demonstration Fund shall be payable solely
from proceeds realized by the OTEC Demonstration Fund.
(e) Taxability of Interest.--The interest on any obligation
guaranteed under this section shall be included in gross income
for purposes of chapter 1 of the Internal Revenue Code of 1954.
SEC. 1111. AUTHORITY FOR [SECRETARY OF TRANSPORTATION] ADMINISTRATOR
TO MAKE LOAN GUARANTEES.
[46 U.S.C. App. 1279d]
(a) Authority To Guarantee Obligations for Eligible Export
Vessels.--The [Secretary] Administrator may guarantee
obligations for eligible export vessels--
(1) in accordance with the terms and conditions of
this title applicable to loan guarantees in the case of
vessels documented under the laws of the United States;
or
(2) in accordance with such other terms as the
[Secretary] Administrator determines to be more
favorable than the terms otherwise provided in this
title and to be compatible with export credit terms
offered by foreign governments for the sale of vessels
built in foreign shipyards.
(b) Interagency Council.--(1) Establishment; Composition.--
There is hereby established an interagency council for the
purposes of this section. The council shall be composed of the
[Secretary of Transportation] Administrator, who shall be
chairman of the Council, the Secretary of the Treasury, the
Secretary of State, the Assistant to the President for Economic
Policy, the United States Trade Representative, and the
President and Chairman of the United States Export-Import Bank,
or their designees.
(2) Purpose of the Council.--The council shall--
(A) obtain information on shipbuilding loan
guarantees, on direct and indirect subsidies, and on
other favorable treatment of shipyards provided by
foreign governments to shipyards in competition with
United States shipyards; and
(B) provide guidance to the [Secretary] Administrator
in establishing terms for loan guarantees for eligible
export vessels under subsection (a)(2).
(3) Consultation with U.S. Shipbuilders.--The council shall
consult regularly with United States shipbuilders to obtain the
essential information concerning international shipbuilding
competition on which to set terms and conditions for loan
guarantees under subsection (a)(2).
(4) Annual Report.--Not later than January 31 of each year
(beginning in 1995), the [Secretary of Transportation]
Administrator shall submit to Congress a report on the
activities of the [Secretary] Administrator under this section
during the preceding year. Each report shall include
documentation of sources of information on assistance provided
by the governments of other nations to shipyards in those
nations and a summary of recommendations made to the
[Secretary] Administrator during the preceding year regarding
applications submitted to the [Secretary] Administrator during
that year for loan guarantees under this title for construction
of eligible export vessels.
SEC. 1112. LOAN GUARANTEES FOR SHIPYARD MODERNIZATION AND IMPROVEMENT.
[46 U.S.C. App. 1279e]
(a) The Secretary, under section 1103(a) and subject to the
terms the Secretary shall prescribe, may guarantee or make a
commitment to guarantee the payment of the principal of, and
the interest on, an obligation for advanced shipbuilding
technology and modern shipbuilding technology of a general
shipyard facility located in the United States.
(b) Guarantees or commitments to guarantee under this section
are subject to the extent applicable to all the laws,
requirements, regulations, and procedures that apply to
guarantees or commitments to guarantee made under this title,
except that guarantees or commitments to guarantee made under
this section may be in the aggregate principal amount that does
not exceed 87\1/2\ percent of the actual cost of the advanced
shipbuilding technology or modern shipbuilding technology.
(c) The Secretary may accept the transfer of funds from any
other department, agency, or instrumentality of the United
States Government and may use those funds to cover the cost (as
defined in section 502 of the Federal Credit Reform Act of
1990) of making guarantees or commitments to guarantee loans
entered into under this section.
(d) For purposes of this section:
(1) The term ``advanced shipbuilding technology''
includes--
(A) numerically controlled machine tools,
robots, automated process control equipment,
computerized flexible manufacturing systems,
associated computer software, and other
technology for improving shipbuilding and
related industrial production which advance the
state- of-the-art; and
(B) novel techniques and processes designed
to improve shipbuilding quality, productivity,
and practice, and to promote sustainable
development, including engineering design,
quality assurance, concurrent engineering,
continuous process production technology,
energy efficiency, waste minimization, design
for recyclability or parts reuse, inventory
management, upgraded worker skills, and
communications with customers and suppliers.
(2) The term ``modern shipbuilding technology'' means
the best available proven technology, techniques, and
processes appropriate to enhancing the productivity of
shipyards.
(3) The term ``general shipyard facility'' means--
(A) for operations on land--
(i) any structure or appurtenance
thereto designed for the construction,
repair, rehabilitation, refurbishment
or rebuilding of any vessel (as defined
in title 1, United States Code) and
including graving docks, building ways,
ship lifts, wharves, and pier cranes;
(ii) the land necessary for any
structure or appurtenance described in
clause (i); and
(iii) equipment that is for the use
in connection with any structure or
appurtenance and that is necessary for
the performance of any function
referred to in subparagraph (A);
(B) for operations other than on land, any
vessel, floating drydock or barge built in the
United States and used for, equipped to be used
for, or of a type that is normally used for
activities referred to in subparagraph (A)(i)
of this paragraph.
SEC. [1111.] 1113. DEBT OBLIGATIONS GUARANTEED BY SECRETARY; FISHING
CAPACITY REDUCTION FUND.
[46 U.S.C. 1279f]
(a) The [Secretary] Secretary or Administrator is authorized
to guarantee the repayment of debt obligations issued by
entities under this section. Debt obligations to be guaranteed
may be issued by any entity that has been approved by the
[Secretary] Secretary or Administrator and has agreed with the
[Secretary] Secretary or Administrator to such conditions as
the [Secretary] Secretary or Administrator deems necessary for
this section to achieve the objective of the program and to
protect the interest of the United States.
(b) Any debt obligation guaranteed under this section shall--
(1) be treated in the same manner and to the same
extent as other obligations guaranteed under this
title, except with respect to provisions of this title
that by their nature cannot be applied to obligations
guaranteed under this section;
(2) have the fishing fees established under the
program paid into a separate subaccount of the fishing
capacity reduction fund established under this section;
(3) not exceed $100,000,000 in an unpaid principal
amount outstanding at any one time for a program;
(4) have such maturity (not to exceed 20 years), take
such form, and contain such conditions as the
[Secretary] Secretary or Administrator determines
necessary for the program to which they relate;
(5) have as the exclusive source of repayment
(subject to the proviso in subsection (c)(2)) and as
the exclusive payment security, the fishing fees
established under the program; and
(6) at the discretion of the [Secretary] Secretary or
Administrator be issued in the public market or sold to
the Federal Financing Bank.
(c)(1) There is established in the Treasury of the United
States a separate account which shall be known as the fishing
capacity reduction fund (referred to in this section as the
``fund''). Within the fund, at least one subaccount shall be
established for each program into which shall be paid all
fishing fees established under the program and other amounts
authorized for the program.
(2) Amounts in the fund shall be available, without
appropriation or fiscal year limitation, to the [Secretary]
Secretary or Administrator to pay the cost of the program,
including payments to financial institutions to pay debt
obligations incurred by entities under this section: Provided,
That funds available for this purpose from other amounts
available for the program may also be used to pay such debt
obligations.
(3) Sums in the fund that are not currently needed for the
purpose of this section shall be kept on deposit or invested in
obligations of the United States.
(d) The [Secretary] Secretary or Administrator is authorized
and directed to issue such regulations as the [Secretary]
Secretary or Administrator deems necessary to carry out this
section.
(e) For the purposes of this section, the term ``program''
means a fishing capacity reduction program established under
section 312 of the Magnuson-Stevens Fishery Conservation and
Management Act.
SEC. [1112.] 1114. DIRECT LOAN OBLIGATIONS; ANNUAL RATE OF INTEREST.
[46 U.S.C. 1279g]
(a) Notwithstanding any other provision of this title, all
obligations involving any fishing vessel, fishery facility,
aquaculture facility, individual fishing quota, or fishing
capacity reduction program issued under this title after the
date of enactment of the Sustainable Fisheries Act shall be
direct loan obligations, for which the Secretary shall be the
obligee, rather than obligations issued to obligees other than
the Secretary and guaranteed by the Secretary. All direct loan
obligations under this section shall be treated in the same
manner and to the same extent as obligations guaranteed under
this title except with respect to provisions of this title
which by their nature can only be applied to obligations
guaranteed under this title.
(b) Notwithstanding any other provisions of this title, the
annual rate of interest which obligors shall pay on direct loan
obligations under this section shall be fixed at two percent of
the principal amount of such obligations outstanding plus such
additional percent as the Secretary shall be obligated to pay
as the interest cost of borrowing from the United States
Treasury the funds with which to make such direct loans.
MERCHANT MARINE ACT, 1936
Title XII--War Risk Insurance
* * * * * * *
SEC. 1208. INSURANCE FUND; INVESTMENTS; APPROPRIATIONS.
[46 U.S.C. 1288]
(a) The Secretary shall create an insurance fund in the
Treasury to enable him to carry out the provisions of this
title. Moneys appropriated by Congress to carry out the
provisions of this title and all moneys received from premiums,
salvage, or other recoveries and all receipts in connection
with this title shall be deposited in the Treasury to the
credit of such fund. The Secretary of Transportation may
request the Secretary of the Treasury to invest such portion of
the Fund as is not, in the judgment of the Secretary of
Transportation, required to meet the current needs of the fund.
Such investments shall be made by the Secretary of the Treasury
in public debt securities of the United States, with maturities
suitable to the needs of the fund, and bearing interest rates
determined by the Secretary of the Treasury, taking into
consideration current market yields on outstanding marketable
obligations of the United States of comparable maturity. [Upon
the request of the Secretary of Transportation, the Secretary
of the Treasury may invest or reinvest all or any part of the
fund in securities of the United States or in securities
guaranteed as to principal and interest by the United States.]
The Secretary of Transportation may request the Secretary of
the Treasury to invest such portion of the fund as is not, in
the judgment of the Secretary of Transportation, required to
meet the current needs of the fund. Such investments shall be
made by the Secretary of the Treasury in public debt securities
of the United States, with maturities suitable to the need of
the fund, and bearing interest rates determined by the
Secretary of the Treasury, taking into consideration current
market yields on outstanding marketable obligations of the
United States of comparable maturity. The interest and benefits
accruing from such securities shall be deposited to the credit
of the fund.
(b) Such sums as shall be necessary to carry out the
provisions of this title are authorized to be appropriated to
such fund.
* * * * * * *
SEC. 1295. CONGRESSIONAL DECLARATION OF POLICY.
[46 U.S.C. App. 1295]
It is the policy of the United States that merchant marine
vessels of the United States should be operated by highly
trained and efficient citizens of the United States and that
the United States Navy and the merchant marine of the United
States should work closely together to promote the maximum
integration of the total seapower forces of the United States.
In furtherance of this policy--
(1) the Secretary of Transportation is authorized to
take the steps necessary to provide for the education
and training of citizens of the United States who are
capable of providing for the safe and efficient
operation of the merchant marine of the United States
at all times and as a naval and military auxiliary in
time of war or national emergency; and
(2) the Secretary of Navy, in cooperation with the
Maritime Administrator and the head of each State
maritime academy, shall assure that the training of
future merchant marine officers at the United States
Merchant Marine Academy and at the State maritime
academies includes programs for naval science training
in the operation of merchant marine vessels as a naval
and military auxiliary and that naval officer training
programs for the training of future officers, insofar
as possible, be maintained at designated maritime
academies consistent with United States Navy standards
and needs.
MERCHANT MARINE ACT, 1936
SEC. 1303. MAINTENANCE OF ACADEMY.
[46 U.S.C. App. 1295b]
(a) Duty of Secretary.--The Secretary shall maintain the
Academy for providing instruction to individuals to prepare
them for service in the merchant marine of the United States.
(b) Nomination and Appointment of Cadets; Designation and
Licensing of Individuals From the Trust Territory of the
Pacific Islands, Western Hemisphere Nations and Nations Other
Than the United States.--
(1) Each Senator and Member of the House of
Representatives, the Panama Canal Commission, the
Governor of the Northern Mariana Islands, and the
Delegate from American Samoa. may nominate for
appointment as a cadet at the Academy any individual
who is--
(A) a citizen of the United States or a
national of the United States; and
(B) a resident of the State represented by
such Senator if the individual is nominated by
a Senator, a resident of the State in which the
congressional district represented by such
Member of the House of Representatives is
located if the individual is nominated by a
Member of the House of Representatives (or a
resident of Guam, the Virgin Islands, the
District of Columbia, the Commonwealth of
Puerto Rico, or American Samoa if the
individual is nominated by a Member of the
House of Representatives representing such
area), a resident of the area or installation
described in paragraph (3)(A)(ii), or a son or
daughter of the personnel described in such
paragraph, if the individual is nominated by
the Panama Canal Commission, or a resident of
the Northern Mariana Islands if the individual
is nominated by the Governor of the Northern
Mariana Islands.
(2)(A) The Secretary shall establish minimum
requirements for the individuals nominated pursuant to
paragraph (1) and shall establish a system of
competition for the selection of individuals qualified
for appointment as cadets at the Academy.
(B) Such system of competition shall determine the
relative merit of appointing each such individual to
the Academy through the use of competitive
examinations, an assessment of the academic background
of the individual, and such other factors as are
considered effective indicators of motivation and the
probability of successful completion of training at the
Academy.
(C) Notwithstanding any other provision of law, an
individual appointed as a cadet may not be admitted to
the Academy as a student, unless at the time of the
taking of the official oath upon entry into the
Merchant Marine Academy, that individual satisfies the
physical and mental requirements of the Department of
Defense to be appointed or enlisted as a Midshipman,
United States Naval Reserve. Following admission to the
Academy, notwithstanding any other provision of law,
such individual may continue as a student only if that
individual continues to satisfy the physical and mental
standards set forth in this subparagraph unless the
Secretary of Transportation waives the standards.
(3)(A) Qualified individuals nominated pursuant to
paragraph (1) shall be selected each year for
appointment as cadets at the Academy to fill positions
allocated as follows:
(i) Positions shall be allocated each year
for individuals who are residents of each State
and are nominated by the Members of the
Congress from such State in proportion to the
representation in Congress from that State.
(ii) Two positions shall be allocated each
year for individuals nominated by the Panama
Canal Commission who are sons or daughters of
residents of any area or installation located
in the Republic of Panama which is made
available to the United States pursuant to the
Panama Canal Treaty of 1977, the agreements
relating to and implementing that Treaty,
signed September 7, 1977, and the Agreement
Between the United States of America and the
Republic of Panama Concerning Air Traffic
Control and Related Services, concluded January
8, 1979, and sons or daughters of personnel of
the United States Government and the Panama
Canal Commission residing in the Republic of
Panama, nominated by the Panama Canal
Commission.
(iii) One position shall be allocated each
year for an individual who is a resident of
Guam and is nominated by the Delegate to the
House of Representatives from Guam.
(iv) One position shall be allocated each
year for an individual who is a resident of the
Virgin Islands and is nominated by the Delegate
to the House of Representatives from the Virgin
Islands.
(v) One position shall be allocated each year
for an individual who is a resident of the
Northern Mariana Islands and is nominated by
the Governor of the Northern Mariana Islands.
(vi) One position shall be allocated each
year for an individual who is a resident of
American Samoa and is nominated by the Delegate
to the House of Representatives from American
Samoa.
(vii) Four positions shall be allocated each
year for individuals who are residents of the
District of Columbia and are nominated by the
Delegate to the House of Representatives from
the District of Columbia.
(viii) One position shall be allocated each
year for an individual who is a resident of the
Commonwealth of Puerto Rico and is nominated by
the Resident Commissioner to the United States
from Puerto Rico.
(B) The Secretary shall make appointments of
qualified individuals to fill the positions allocated
pursuant to subparagraph (A) (from among the
individuals nominated pursuant to paragraph (1)) in the
order of merit determined pursuant to paragraph (2)(B)
among residents of each State, Guam, the Virgin
Islands, the Northern Mariana Islands, American Samoa,
the District of Columbia, and the Commonwealth of
Puerto Rico and among individuals nominated by the
Panama Canal Commission.
(C) If positions are not filled after the
appointments are made pursuant to subparagraph (B), the
Secretary shall make appointments of qualified
individuals to fill such positions from among all
individuals nominated pursuant to paragraph (1) in the
order of merit determined pursuant to paragraph (2)(B)
among all such individuals.
(D) In addition, the Secretary may each year appoint
without competition as cadets at the Academy not more
than 40 qualified individuals possessing qualities
deemed to be of special value to the Academy. In making
such appointments the Secretary shall attempt to
achieve a national demographic balance at the Academy.
(E) No preference shall be granted in selecting
individuals for appointment as cadets at the Academy
because one or more members of the immediate family of
any such individual are alumni of the Academy.
(F) Any citizen of the United States selected for
appointment pursuant to this paragraph must agree to
apply for midshipman status in the United States Naval
Reserve (including the Merchant Marine Reserve, United
States Naval Reserve) before being appointed as a cadet
at the Academy.
(G) For purposes of this paragraph, the term
``State'' means the several States.
(4)(A) In addition to paragraph (3), the Secretary
may permit, upon designation by the Secretary of the
Interior, individuals from the Trust Territory of the
Pacific Islands to receive instruction at the Academy.
(B) Not more than 4 individuals may receive
instruction under this paragraph at any one time.
(C) Any individual receiving instruction under the
authority of this paragraph shall receive the same
allowances and shall be subject to the same rules and
regulations governing admission, attendance,
discipline, resignation, discharge, dismissal, and
graduation as cadets at the Academy appointed from the
United States, subject to such exceptions as shall be
jointly agreed upon by the Secretary and the Secretary
of the Interior.
(5)(A) In addition to paragraphs (3) and (4), the
President may designate individuals from nations
located in the Western Hemisphere other than the United
States to receive instruction at the Academy.
(B) Not more than 12 individuals may receive
instruction under this paragraph at any one time, and
not more than 2 individuals receiving instruction under
this paragraph at any one time may be from the same
nation.
(C) Any individual receiving instruction under this
subparagraph is entitled to the same allowances and
shall be subject to the same rules and regulations
governing admission, attendance, discipline,
resignation, discharge, dismissal, and graduation as
cadets at the Academy appointed from the United States.
(6)(A) In addition to paragraphs (3), (4), and (5),
the Secretary may permit, upon approval of the
Secretary of State, individuals from nations other than
the United States to receive instruction at the
Academy.
(B) Not more than 30 individuals may receive
instruction under this paragraph at any one time.
(C) The Secretary shall insure that each nation from
which an individual comes to receive instruction under
this paragraph shall reimburse the Secretary for the
cost of such instruction (including the same allowances
as received by cadets at the Academy appointed from the
United States) as determined by the Secretary.
(D) Any individual receiving instruction at the
Academy under this paragraph shall be subject to the
same rules and regulations governing admission,
attendance, discipline, resignation, discharge,
dismissal, and graduation as cadets at the Academy
appointed from the United States.
(7)(A) The Secretary may permit, upon approval of the
Secretary of State, additional individuals from the
Republic of Panama to receive instruction at the
Academy, in addition to those individuals appointed
under paragraphs (3), (4), (5), and (6) of this
subsection.
(B) The Secretary shall be reimbursed for the cost of
that instruction (including the same allowances as
received by cadets at the Academy appointed from the
United States) as determined by the Secretary.
(C) An individual receiving instructions at the
Academy under this paragraph shall be subject to the
same rules and regulations governing admission,
attendance, discipline, resignation, discharge,
dismissal, and graduation as cadets at the Academy
appointed from the United States.
(8) An individual appointed as a cadet under
paragraph (3), or receiving instruction under paragraph
(4), (5), (6), or (7) of this subsection is not
entitled to hold a license authorizing service on a
merchant marine vessel of the United States solely by
reason of graduation from the Academy.
(c) Appointment of Cadet as Midshipman in the United States
Naval Reserve.--
(1) Any citizen of the United States who is appointed
as a cadet at the Academy shall be appointed by the
Secretary of the Navy as a midshipman in the United
States Naval Reserve (including the Merchant Marine
Reserve, United States Naval Reserve).
(2) The Secretary of the Navy shall provide for
cadets of the Academy who are midshipmen in the United
States Naval Reserve to be issued an identification
card (referred to as a ``military ID card'') and to be
entitled to all rights and privileges in accordance
with the same eligibility criteria as apply to other
members of the Ready Reserve of the reserve components
of the Armed Forces.
(3) The Secretary of the Navy shall carry out
paragraphs (1) and (2) in coordination with the
Secretary.
(d) Uniforms, Textbooks, and Transportation Allowances.--The
Secretary shall provide to any cadet at the Academy all
required uniforms and textbooks and allowances for
transportation (including reimbursement of traveling expenses)
while traveling under orders as a cadet of the Academy.
(e) Commitment Agreements.--
(1) Each individual appointed as a cadet at the
Academy after the date occurring 6 months after the
effective date of the Maritime Education and Training
Act of 1980, who is a citizen of the United States,
shall as a condition of appointment to the Academy sign
an agreement committing such individual--
(A) to complete the course of instruction at
the Academy;
(B) to fulfill the requirements for a license
as an officer in the merchant marine of the
United States on or before the date of
graduation from the Academy of such individual;
(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;
[(D) to apply for an appointment as, to
accept if tendered an appointment as, and to
serve as a commissioned officer in the United
States Naval Reserve (including the Merchant
Marine Reserve, United States Naval Reserve),
the United States Coast Guard Reserve, or any
other Reserve unit of an armed force of the
United States, for at least 6 years following
the date of graduation from the Academy of such
individual;]
(D) to apply for an appointment as, to accept
if tendered an appointment as, and to serve and
perform all required duties and comply with all
requirements as, a commissioned officer in
Ready Reserve status in the United States Naval
Reserve (including the Merchant Marine Reserve
and the United States Naval Reserve), any other
Reserve component of an armed force of the
United States, or any other equivalent, as
determined by the Secretary;
(E) to serve the foreign and domestic
commerce and the national defense of the United
States for at least 5 years following the date
of graduation from the Academy--
(i) as a merchant marine officer
serving on vessels documented under the
laws of the United States or on vessels
owned and operated by the United States
or by any State or territory of the
United States;
(ii) as an employee in a United
States maritime-related industry,
profession, or marine science (as
determined by the Secretary), if the
Secretary determines that service under
clause (i) is not available to such
individual;
(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
(iv) by combining the services
specified in clauses (i), (ii), and
(iii); and (F) to report to the
Secretary on the compliance by the
individual to this paragraph.
(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 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 by the Federal
Government.
(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 paragraph
(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 and may reduce the
amount to be recovered from such individual to reflect
partial performance of service obligations and such
other factors as the Secretary determines merit such a
reduction.
(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, and 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.
(5) The Secretary may defer the service commitment of
any individual pursuant to subparagraph (E) of
paragraph (1) (as specified in the agreement required
by such paragraph) for a period of not more than 2
years if such individual is engaged in a graduate
course of study approved by the Secretary, except that
any deferment of service as a commissioned officer
pursuant to paragraph (1)(E) must be approved by the
Secretary of the military department (including the
Secretary of Commerce with respect to the National
Oceanic and Atmospheric Administration) which has
jurisdiction over such service.
(6)(A) In order to meet the requirements of paragraph (1)(D),
a graduate of the Academy shall perform all directed training
and obey all orders and directions required by the relevant
Reserve Component and remain qualified in Ready Reserve
classification for a period of not less than 6 years, as
required by the regulations of the applicable armed service
unless such compliance is waived by the Secretary of Defense or
the Secretary of the Department in which the United States
Coast Guard is operating.
(B) Notwithstanding section 552a of title 5, United States
Code, the Secretary of Defense or the Secretary of the
Department in which the Coast Guard is operating, and the
Administrator of the National Oceanic and Atmospheric
Administration--
(i) shall report the status of obligated service of
an individual graduate upon request of the Maritime
Administration; and
(ii) may, in their discretion, notify the Maritime
Administration of the default in performance of an
graduate in the performance of the graduate's duties,
either on active duty or in the Ready Reserve Component
of their respective service, or as a commissioned
officer of the National Oceanic and Atmospheric
Administration.
(C) A report or notice under subparagraph (B) shall identify
the graduate determined to have been defaulted and provide all
required information as to why such graduate has been
defaulted. Upon receipt of such a report or notice, such
graduate may be considered to be in default of the graduate's
service obligations by the Maritime Administration, and be
subject to all remedies the Maritime Administration may have
with respect to such a default.
(6) An individual who serves as a commissioned officer on
active duty in an armed force of the United States or in the
National Oceanic and Atmospheric Administration for the 5 years
immediately following graduation from the Academy shall be
excused from the requirements of subparagraphs (1)(C), (1)(D),
and (1)(E).
(7) The Secretary may modify or waive any of the terms and
conditions set forth in paragraph (1) through the imposition of
alternative service requirements.
(f) Places of Training.--The Secretary may provide for the
training of cadets at the Academy--
(1) on vessels owned or subsidized by the United
States;
(2) on other vessels documented under the laws of the
United States if the owner of any such vessel
cooperates in such use; [and]
(3) in shipyards or plants and with any industrial or
educational [organizations.] organizations; and
(4) on such other vessels as the Secretary determines
to be valuable for the education of cadets at the
Academy or in the interest of national security.
(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.
(h) Board of Visitors.--
(1) A Board of Visitors to the Academy shall be
established, for a term of two years commencing at the
beginning of each Congress, to visit the Academy
annually on a date determined by the Secretary and to
make recommendations on the operation of the Academy.
(2) The Board shall be composed of--
(A) 2 Senators appointed by the chairman of
the Commerce, Science, and Transportation
Committee of the Senate;
(B) 3 Members of the House of Representatives
appointed by the chairman of the Merchant
Marine and Fisheries Committee of the House of
Representatives;
(C) 1 Senator appointed by the Vice
President;
(D) 2 Members of the House of Representatives
appointed by the Speaker of the House of
Representatives; and
(E) the chairman of the Commerce, Science,
and Transportation Committee of the Senate and
the chairman of the Merchant Marine and
Fisheries Committee of the House of
Representatives, as ex officio members.
(3) Whenever a member of the Board is unable to
attend the annual meeting provided in paragraph (1),
another individual may be appointed in the manner
provided by paragraph (2) as a substitute for such
member.
(4) The chairmen of the Commerce, Science, and
Transportation Committee of the Senate and the Merchant
Marine and Fisheries Committee of the House of
Representatives may designate staff members of such
committees to serve without reimbursement as staff for
the Board.
(5) While away from their homes or regular places of
business in the performance of services for the Board,
members of the Board and any staff members designated
under paragraph (4) shall be allowed travel expenses,
including per diem in lieu of subsistence, in the same
manner as persons employed intermittently in the
Government service are allowed expenses under section
5703 of title 5, United States Code.
(i) Advisory Board.--
(1) An Advisory Board to the Academy shall be
established to visit the Academy at least once during
each academic year, for the purpose of examining the
course of instruction and management of the Academy and
advising the Maritime Administrator and the
Superintendent of the Academy.
(2) The Advisory Board shall be composed of not more
than 7 persons of distinction in education and other
fields relating to the Academy who shall be appointed
by the Secretary for terms not to exceed 3 years and
may be reappointed.
(3) The Secretary shall appoint a chairman from among
the members of the Advisory Board.
(4) While away from their homes or regular places of
business in the performance of service for the Advisory
Board, members of the Advisory Board shall be allowed
travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed
expenses under section 5703 of title 5, United States
Code.
(5) The Federal Advisory Committee Act (5 U.S.C. App.
1 et seq.) shall not apply to the Advisory Board
established pursuant to this subsection.
(j) Limitation on Charges and Fees for Attendance.--
(1) Except as provided in paragraph (2), no charge or
fee for tuition, room, or board for attendance at the
Academy may be imposed unless the charge or fee is
specifically authorized by a law enacted after October
5, 1994.
(2) The prohibition specified in paragraph (1) does
not apply with respect to any item or service provided
to cadets for which a charge or fee is imposed as of
October 5, 1994. The Secretary of Transportation shall
notify Congress of any change made by the Academy in
the amount of a charge or fee authorized under this
paragraph.
Title XIII--Maritime Education and Training
* * * * * * *
SEC. 1304. STATE MARITIME ACADEMIES.
[46 U.S.C. App. 1295c]
(a) Cooperation and Assistance.--The Secretary shall
cooperate with and assist any State maritime academy in
providing instruction to individuals to prepare them for
service in the merchant marine of the United States.
(b) Regional Maritime Academies.--The Governors of all States
or territories of the United States, or both, cooperating to
sponsor a regional maritime academy shall designate in writing
one State or territory of the United States, from among the
sponsoring States or territories, or both, to conduct the
affairs of such regional maritime academy. Any regional
maritime academy shall be eligible for assistance from the
Federal Government on the same basis as any State maritime
academy sponsored by a single State or territory of the United
States.
(c) Training Vessels.--
(1)(A) The Secretary may furnish for training
purposes any suitable vessel under the control of the
Secretary or provided under subparagraph (B), or
construct and furnish a suitable vessel if such a
vessel is not available, to any State maritime academy
meeting the requirements of subsection (f)(1). Any such
vessel--
(i) shall be repaired, reconditioned, and
equipped (including supplying all apparel,
charts, books, and instruments of navigation)
as necessary for use as a training ship;
(ii) shall be furnished to such State
maritime academy only after application for
such vessel is made in writing by the Governor
of the State or territory sponsoring such State
maritime academy or, with respect to a regional
maritime academy the Governor of the State or
territory designated pursuant to subsection
(b);
(iii) shall be furnished to such State
maritime academy only if a suitable port for
the safe mooring of such vessel is available
while it is being used by such academy;
(iv) shall be maintained in good repair by
the Secretary; and
(v) shall remain the property of the United
States.
(B) Any department or agency of the United States may
provide to the Secretary to be furnished to any State
maritime academy any vessel (including equipment) which
is suitable for the purposes of this paragraph and
which can be provided without detriment to the service
to which such vessel is assigned.
(2) [The Secretary may pay to any State maritime
academy] (A) The Secretary shall, subject to the
availability of appropriations, pay to each State
maritime academy the amount of the costs of all fuel
consumed by any vessel furnished under paragraph (1)
while such vessel is being used for training purposes
by such academy.
(B) The amount of the payment to a State maritime
academy under this paragraph shall not exceed--
(i) $100,000 for fiscal year 2006;
(ii) $200,000 for fiscal year 2007; and
(iii) $300,000 for fiscal year 2008 and each
fiscal year thereafter.
(3)(A) The Secretary may provide for the training of
individuals attending a State maritime academy--
(i) on vessels owned or subsidized by the
United States;
(ii) on other vessels documented under the
laws of the United States if the owner of any
such vessel cooperates in such use; and
(iii) in shipyards or plants and with any
industrial or educational organizations.
(B) While traveling under orders for purposes of
receiving training under this paragraph, any individual
who is attending a State maritime academy shall receive
from the Secretary allowances for transportation
(including reimbursement of traveling expenses) in
accordance with any regulations promulgated by the
Secretary.
(d) Annual Payments.--
(1)(A) The Secretary may enter into an agreement,
which shall be effective for not more than 4 years,
with one State maritime academy (not including regional
maritime academies) located in each State or territory
of the United States which meets the requirements of
subsection (f)(1), and with each regional maritime
academy which meets the requirements of subsection
(f)(1), to make annual payments to each such academy
for the maintenance and support of such academy.
(B) Subject to subparagraph (C), the annual payment
to such State maritime academy shall be at least equal
to the amount given to the academy for its maintenance
and support by the State in which it is located, and to
such regional maritime academy shall be at least equal
to the amount given the academy by all States and
territories cooperating to sponsor the academy.
(C) The amount under subparagraph (B) may not be more
than $25,000, except that the amount shall be--
(i) $100,000 to such State maritime academy
if the academy meets the condition set forth in
subsection (f)(2); or
(ii) [$200,000] subject to the availability
of appropriations, $300,000 for fiscal year
2006, $400,000 for fiscal year 2007, and
$500,000 for fiscal year 2008 and each fiscal
year thereafter to such regional maritime
academy if the academy meets the condition set
forth in subsection (f)(2).
(2) The Secretary shall provide to each State
maritime academy guidance and assistance in developing
courses on the operation and maintenance of new
vessels, on equipment, and on innovations being
introduced to the merchant marine of the United States.
(e) Detailing of Personnel.--Upon the request of the Governor
of any State or territory, the President may detail, without
reimbursement, any of the personnel of the United States Navy,
the United States Coast Guard, or the United States Maritime
Service to any State maritime academy to serve as
superintendents, professors, lecturers, or instructors at such
academy.
(f) Conditions To Receiving Payments or Use of Vessels.--
(1) As a condition to receiving any payment or the
use of any vessel under this section, any State
maritime academy shall--
(A) provide courses of instruction on
navigation, marine engineering (including steam
and diesel propulsion), the operation and
maintenance of new vessels and equipment, and
innovations being introduced to the merchant
marine of the United States;
(B) agree in writing to conform to such
standards for courses, training facilities,
admissions, and instruction as are established
by the Secretary after consultation with the
superintendents of the State maritime
academies; and
(C) agree in writing to require, as a
condition for graduation, that each individual
who is a citizen of the United States and who
is attending the academy in a merchant marine
officer preparation program shall pass the
examination administered by the Coast Guard
required for issuance of a license under
section 7101 of title 46, United States Code.
(2) As a condition to receiving an annual payment of
any amount in excess of $25,000 under subsection (d), a
State maritime academy shall agree to admit to such
academy each year a number of individuals who meet the
admission requirements of such academy and who are
citizens of the United States residing in States and
territories of the United States other than the States
or territories, or both, supporting such academy. The
Secretary shall determine the number of individuals
under this paragraph for each State maritime academy so
that such number does not exceed one-third of the total
number of individuals attending such academy at any
time.
(g) Student Incentive Payment Agreements.--
(1) The Secretary may enter into an agreement, which
shall be effective for not more than 4 academic years,
with any individual, who is a citizen of the United
States and is attending a State maritime academy which
entered into an agreement with the Secretary under
subsection (d)(1), to make student incentive payments
to such individual, which payments shall be in amounts
equaling $4,000 for each academic year and which
payments shall be--
(A) allocated among the various State
maritime academies in a fair and equitable
manner;
(B) used to assist the individual in paying
the cost of uniforms, books, and subsistence;
and
(C) paid by the Secretary as the Secretary
shall prescribe while the individual is
attending the academy.
(2) Each agreement entered into under paragraph (1)
shall require the individual to accept midshipman and
enlisted reserve status in the United States Naval
Reserve (including the Merchant Marine Reserve, United
States Naval Reserve) before receiving any student
incentive payments under this subsection.
(3) Each agreement entered into under paragraph (1)
shall obligate the individual receiving student
incentive payments under the agreement--
(A) to complete the course of instruction at
the State maritime academy which the individual
is attending;
(B) to take the examination for a license as
an officer in the merchant marine of the United
States on or before the date of graduation from
such State maritime academy of such individual
and to fulfill the requirements for such
license not later than 3 months after such
graduation date;
(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;
(D) to accept if tendered an appointment as,
and to serve as a commissioned officer in the
United States Naval Reserve (including the
Merchant Marine Reserve, United States Naval
Reserve), the United States Coast Guard
Reserve, or any other reserve unit of an armed
force of the United States, for at least 6
years following the date of graduation from
such State maritime academy of such individual;
(E) to serve the foreign and domestic
commerce and the national defense of the United
States for at least 3 years following the date
of graduation from the Academy--
(i) as a merchant marine officer
serving on vessels documented under the
laws of the United States or on vessels
owned and operated by the United States
or by any State or territory of the
United States;
(ii) as an employee in a United
States maritime-related industry,
profession, or marine science (as
determined by the Secretary), if the
Secretary determines that service under
clause (i) is not available to such
individual;
(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
(iv) by combining the services
specified in clauses (i), (ii), and
(iii); and
(F) to report to the Secretary on the
compliance by the individual to this paragraph.
(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 Defense to active duty in
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 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--
(i) subject to clause (ii), may recover from
the individual the amount of student incentive
payments, plus interest and attorneys fees; and
(ii) may reduce the amount to be
recovered from such individual to
reflect partial performance of service
obligations and such other factors as
the Secretary determines merit such
reduction.
(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 paragraph
(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--
(i) subject to clause (ii), may recover from
the individual the amount of student incentive
payments, plus interest and attorneys fees; and
(ii) may reduce the amount to be
recovered from such individual to
reflect partial performance of service
obligations and such other factors as
the Secretary determines merit such
reduction.
(6) To aid in the recovery of student incentive
payments plus interest and attorneys fees the Secretary
may request the Attorney General to begin court
proceedings, and the Secretary may make use of the
Federal debt collection procedures in chapter 176 of
title 28, United States Code, and other applicable
administrative remedies.
(7) The Secretary may defer the service commitment of
any individual pursuant to subparagraph (E) of
paragraph (3) (as specified in the agreement required
by such paragraph) for a period of not more than 2
years if such individual is engaged in a graduate
course of study approved by the Secretary, except that
any deferment of service as a commissioned officer
pursuant to subparagraph (E) of such paragraph must be
approved by the Secretary of the military department
(including the Secretary of Commerce with respect to
the National Oceanic and Atmospheric Administration)
which has jurisdiction over such service.
(8) This subsection shall apply only to individuals
first entering a State maritime academy after the date
occurring 6 months after the effective date of the
Maritime Education and Training Act of 1980.
(h) Appointment of Cadet as Midshipman in United States Naval
Reserve.--Any citizen of the United States attending a State
maritime academy may be appointed by the Secretary of the Navy
as a midshipman in the United States Naval Reserve (including
the Merchant Marine Reserve, United States Naval Reserve).
PUBLIC LAW 97-31; ACT OF JUNE 2, 1951
[SEC. 801. VESSEL OPERATIONS REVOLVING FUND; ESTABLISHMENT; USES;
LIMITATIONS.
[46 U.S.C. App. 1241a]
[For working capital for the ``Vessel Operations Revolving
Fund'', which is hereby created for the purpose of carrying out
vessel operating functions of the Secretary of Transportation,
including charter, operation, maintenance, repair,
reconditioning, and betterment of merchant vessels under the
jurisdiction of the Secretary of Transportation, $20,000,000,
to remain available until expended.
[Notwithstanding any other provision of law, rates for
shipping services rendered under said Fund shall be prescribed
by the Secretary of Transportation and the Fund shall be
credited with all receipts from vessel operating activities
conducted thereunder: Provided, That the provisions of sections
1(a), 1(c), 3(c) and 4 of Public Law 17, Seventy-eighth
Congress (57 Stat. 45), as amended, shall be applicable in
connection with such operations and to seamen employed through
general agents as employees of the United States, who may be
employed in accordance with customary commercial practices in
the maritime industry, notwithstanding the provisions of any
law applicable in terms to the employment of persons by the
United States: Provided further, That such sums as may be
determined to be necessary by the Secretary of Transportation,
with the approval of the Bureau of the Budget, but not
exceeding 2 per centum of vessel operating expenses, may be
advanced from this Fund to the appropriation ``Salaries and
expenses'' for the purposes of that appropriation in connection
with vessel operating functions, but without regard to the
limitations on amounts as stated therein: Provided further,
That notwithstanding any other provisions of law, the
unexpended balances of any working funds or of allocation
accounts established, subsequent to January 1, 1951, for the
activities provided for under this appropriation, together with
receipts heretofore and hereafter received from such
activities, may be transferred to and consolidated with this
Fund, which shall be available for the purposes of such working
funds or allocation accounts.
[No money made available to the Department of Transportation,
for Maritime Activities, by this or any other Act shall be used
in payment for a vessel the title to which is acquired by the
Government either by requisition or purchase, or the use of
which is taken either by requisition or agreement, or which is
insured by the Government and lost while so insured, unless the
price or hire to be paid therefor, (except in cases where
section 802 of the Merchant Marine Act, 1936, as amended, is
applicable) is computed in accordance with subsection 902(a) of
said Act, as that subsection is interpreted by the General
Accounting Office.]
SEC. 801. VESSEL OPERATIONS REVOLVING FUND.
(a) In General.--There is established in the Treasury, for
the purposes set forth in subsection (b), a Vessel Operations
Revolving Fund which shall be available without appropriation
to the Secretary of Transportation. All amounts in the Fund
shall be available for the purposes of the Fund,
notwithstanding any other provision of law, and shall remain
available until expended.
(b) Uses.--Amounts in the Fund shall be available for--
(1) all expenses and charges relating to the
maintenance, repair, and operation of vessels under the
jurisdiction of the Secretary;
(2) all expenses and charges relating to the
maintenance, repair, and operation of the facilities
necessary to preserve and maintain such vessels;
(3) payment of all costs of, and indirect costs that
are reasonably related to, contracting, procurement,
inspection, storage, management, distribution, and
accountability of vessels under the jurisdiction of the
Secretary and such property, facilities, and
nonpersonal services as the Secretary deems necessary
for the operation and maintenance of such vessels;
(4) expenses incurred in activating, repairing, and
deactivating vessels under the jurisdiction of the
Secretary;
(5) the acquisition of such vessels for the National
Defense Reserve Fleet as both the Secretary and the
Secretary of Navy deem necessary;
(6) necessary expenses incurred in the protection,
preservation, maintenance, acquisition, or use of
vessels of the National Defense Reserve Fleet involved
in mortgage foreclosure or forfeiture proceedings
instituted by the United States Government, including
payment of prior claims and liens, expenses of sale,
and other related charges; and
(7) costs and expenses incurred to repair damages to
Government property under the jurisdiction or control
of the Secretary that is used in connection with the
National Defense Reserve Fleet.
(c) Credits to the Fund.--
(1) In general.--Notwithstanding any other provision
of law, there shall be credited to and retained by the
Fund--
(A) all amounts received in connection with
vessel operations for vessels under the
jurisdiction of the Secretary; except that
there shall be no surcharge on charter hire or
similar collection in connection with vessel
operations for the purpose of the reserve
described in subsection (c)(2); and
(B) any reimbursements, advances, setoffs,
refunds, or recoveries arising out of or
relating to the operation and maintenance of
vessels of the National Defense Reserve Fleet
under the jurisdiction of the Secretary,
including any recoveries from litigation,
arbitration, or otherwise.
(2) Reserve.--There shall be established and retained
in the Fund from litigation and arbitration recoveries
a reserve, not to exceed $30,000,000 at any one time,
for use as a reserve for unscheduled repairs and other
necessary expenses in connection with casualties to
vessels in the National Reserve Fleet.
(d) Laws Relating to Seamen.--Subject to the provisions of
sections 1(a) and (c), 3(c), and 4 of the Act of March 24, 1943
(50 U.S.C. App. 1291(a) and (c), 1293(c), 1294), seamen
employed on vessels in the custody of the Secretary and
operated through the Secretary's ship managers or general
agents may be so employed by such ship managers or agents in
accordance with customary commercial practices in the maritime
industry without regard to any of the laws on employment of
persons by the United States.
(e) Advancements.--With the approval of the Director of the
Office of Management and Budget, the Secretary may advance
amounts the Secretary considers necessary from the Fund to the
Maritime Administration Operations and Training appropriation
account for purposes of carrying out duties and powers related
to the maintenance, repair, and operation of vessels under the
jurisdiction of the Secretary, without regard to the
limitations on amounts stated in the Operations and Training
appropriation.
(f) Limitations.--
(1) In general.--Amounts made available to the
Secretary for purposes of this section or any other law
may not be used to pay for a vessel described in
paragraph (2) unless the compensation to be paid is
computed under section 56303 of title 46, United States
Code, as that section is interpreted by the Comptroller
General.
(2) Applicable vessels.--Paragraph (1) applies to a
vessel--
(A) the title to which is acquired by the
Government by requisition or purchase;
(B) the use of which is taken by requisition
or agreement; or
(C) that is lost while insured by the
Government.
(3) Nonapplicable vessels.--Paragraph (1) does not
apply to a vessel under a construction-differential
subsidy contract.
MARITIME SECURITY ACT OF 2003
[SEC. 3528. REVIEW OF PROGRAM.
[46 U.S.C. App. 1271 note]
[(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.--]
[AMENDMENTS EXECUTED UPON ENACTMENT OF MARITIME SECURITY ACT OF 2003]
[(c) Report.The Secretary shall report to the Committee on
Armed Services and the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Armed
Services of the House of Representatives on the results of the
development of an organizational framework under subsection (a)
by January 2, 2004.]
OCEAN SHIPPING REFORM ACT OF 1998
SEC. 401. CERTAIN LOAN GUARANTEES AND COMMITMENTS.
[46 U.S.C. App. 1273a]
(a) The [Secretary of Transportation] Administrator of the
Maritime Administration may not issue a guarantee or commitment
to guarantee a loan for the construction, reconstruction, or
reconditioning of a liner vessel under the authority of title
XI of the Merchant Marine Act, 1936 (46 U.S.C. App. 1271 et
seq.) after the date of enactment of this Act unless the
Chairman of the Federal Maritime Commission certifies that the
operator of such vessel--
(1) has not been found by the Commission to have
violated section 19 of the Merchant Marine Act, 1920
(46 U.S.C. App. 876), or the Foreign Shipping Practices
Act of 1988 (46 U.S.C. App. 1701a), within the previous
5 years; and
(2) has not been found by the Commission to have
committed a violation of the Shipping Act of 1984 (46
U.S.C. App. 1701 et seq.), which involves unjust or
unfair discriminatory treatment or undue or
unreasonable prejudice or disadvantage with respect to
a United States shipper, ocean transportation
intermediary, ocean common carrier, or port within the
previous 5 years.
(b) The Secretary of Commerce may not issue a guarantee or a
commitment to guarantee a loan for the construction,
reconstruction, or reconditioning of a fishing vessel under the
authority of Title XI of the Merchant Marine Act, 1936 (46
U.S.C. App. 1271 et seq.) if the fishing vessel operator has
been--
(1) held liable or liable in rem for a civil penalty
pursuant to section 308 of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1858) and
not paid the penalty;
(2) found guilty of an offense pursuant to section
309 of the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1859) and not paid the
assessed fine or served the assessed sentence;
(3) held liable for a civil or criminal penalty
pursuant to section 105 of the Marine Mammal Protection
Act of 1972 (16 U.S.C. 1375) and not paid the assessed
fine or served the assessed sentence; or
(4) held liable for a civil penalty by the Coast
Guard pursuant to title 33 or 46, United States Code,
and not paid the assessed fine.
PUBLIC LAW 85-469
SEC. 101. ADVANCES TO FUND.
[46 U.S.C. App. 1280]
The Secretary or the Administrator of the Maritime
Administration is authorized to advance to this account from
the ``Vessel operations revolving fund'' (46 U. S. C. 1241a),
such amounts as may be required for the payment, pursuant to
section 1105 of the Merchant Marine Act, 1936, as amended (46
U. S. C. 1275), of unpaid principal amounts of defaulted
mortgages and loans and of unpaid interest thereon: Provided,
That such advances shall be repaid to the ``Vessel operations
revolving fund'' as soon as practicable consistent with the
status of this account: Provided further, That the total
advances outstanding at any one time shall not exceed
$10,000,000.
MARITIME SECURITY ACT OF 2003
SEC. 3527. ANNUAL REPORT ON PROGRAM.
[46 U.S.C. App. 1280b]
The [Secretary of Transportation] Administrator of the
Maritime Administration 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.
MARITIME EDUCATION AND TRAINING ACT OF 1980
SEC. 1306. UNITED STATES MARITIME SERVICE.
[46 U.S.C. App. 1295e]
(a) Establishment and Maintenance.--The Secretary may
establish and maintain a voluntary organization for the
training of citizens of the United States to serve on merchant
marine vessels of the United States and to perform functions to
assist the United States merchant marine, as determined
necessary by the Secretary, to be known as the United States
Maritime Service.
(b) Enrollment; Compensation; Course of Study and Periods of
Training; Uniforms.--The Secretary may determine the number of
individuals to be enrolled for training and reserve purposes in
such service, to fix the rates of pay and allowances of such
individuals without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of title 5, United States Code
(relating to classification and General Schedule pay rates), to
prescribe the course of study and the periods of training in
such service, and to prescribe the uniform of such service and
the rules governing the wearing and furnishing of such uniform.
(c) Ranks, Grades, and Ratings Same as for United States
Coast Guard.--The ranks, grades, and ratings for personnel of
the United States Maritime Service shall be the same as are
then prescribed for the personnel of the United States Coast
Guard.
(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.
* * * * * * *
SEC. 1309. OPERATION OF THE GLOBAL MARITIME AND TRANSPORTATION SCHOOL.
(a) Operation as Nonappropriated Fund Instrumentality.--After
the date of enactment of the Maritime Administration
Enhancement Act of 2005, the Global Maritime and Transportation
School shall continue to operate as a nonappropriated fund
instrumentality of the United States under the jurisdiction of
the Department of Transportation, Maritime Administration.
(b) Activities.--
(1) In general.--Under the general supervision of the
Department of Transportation, Maritime Administration,
GMATS shall develop, administer, and provide
educational, training, and professional development
activities, including educational activities, for
Federal agencies, Federal employees, nonprofit
organizations, other entities, and members of the
general public, as well as carry out such other
projects and activities that may be authorized by the
Superintendent.
(2) Training services.--The training services and
educational activities provided by GMATS shall be
available to the Armed Forces of the United States and
Commissioned Officers of the National Oceanic and
Atmospheric Administration, Federal and State agencies,
Federal and State employees, nonprofit organizations,
private companies or organizations, and private
individuals of the United States or foreign countries
friendly to the United States.
(3) Federal requests for services.--Requests for
training or other services from the Armed Forces of the
United States or other agencies of the United States
may be made pursuant to the provisions of section 1535
of title 31, United States Code.
(c) Fees and Donations.--
(1) Collection of fees.--GMATS may charge and retain
fair and reasonable fees for the activities provided.
(2) Acceptance and making of donations.--
(A) GMATS may accept, use, hold, dispose, and
administer gifts, bequests, and devises of
money, securities, and other real or personal
property made for the benefit of, or in
connection with GMATS.
(B) GMATS shall not accept a donation from a
person that is actively engaged in a
procurement activity with GMATS or has an
interest that may be substantially affected by
the performance or nonperformance of an
official duty of a member of the Board or an
employee of GMATS.
(C) GMATS is authorized to make gifts to the
Department of Transportation and the Secretary
is authorized to accept gifts from GMATS for
any purpose.
(3) Not federal funds.--Fees collected under
paragraph (1) and amounts received under paragraph (2)
shall not be considered to be Federal funds and shall
not be required to be deposited in the Treasury of the
United States. GMATS shall not be funded by
appropriated funds.
(d) Use of USMMA Faculty and Staff.--
(1) Payment.--GMATS may provide payment to United
States Merchant Marine Academy faculty and staff for
teaching and other services for GMATS, but only to the
extent that the provision of such teaching or services
does not interfere or conflict with the official duties
of the faculty and staff and are approved by the
Superintendent.
(2) Contracting authority.--The Academy may enter
into contracts with GMATS to provide faculty and staff
of the Academy for teaching and other services and, to
the extent of the actual costs incurred by the Academy
under said contracts, credit such funds received under
such contracts to the Academy's appropriations,
notwithstanding those provisions of law relating to the
deposit of miscellaneous receipts into the Treasury.
(e) General Administration.--
(1) Authority of superintendent.--The Superintendent
is responsible for the overall supervision and
administration of GMATS and the determination of its
policies. In implementing this responsibility, the
Superintendent shall appoint members to the Board and
shall designate one member as the Senior Managing
Director and may designate other Managing Directors as
necessary.
(2) Authority of the board.--The Superintendent may
delegate to the Board the Superintendent's
responsibility to advise and oversee the supervision
and administration of GMATS. The Board may consist of
both United States Merchant Marine Academy employees
and non-Academy employees, as determined by the
Superintendent. The Board shall be subject to
regulation by the Secretary and shall report to the
Superintendent.
(3) Authority of the senior managing director.--The
Superintendent may delegate to the Senior Managing
Director of GMATS the authority to manage, administer,
and operate GMATS.
(4) Duties of the managing directors.--The Senior
Managing Director shall be responsible, subject to the
supervision and direction of the Board and the
Superintendent, for carrying out the functions of
GMATS. All other Managing Directors shall be
responsible, subject to the supervision and direction
of the Senior Managing Director, for carrying out the
functions of GMATS.
(5) Borrowing and investment authority.--The Board,
with the approval of the Superintendent, may authorize
the Senior Managing Director--
(A) to borrow money on the credit of GMATS;
and
(B) to invest funds held in excess of the
current operating requirements of GMATS for
purposes of maintaining a reasonable reserve.
(6) Liability.--The Managing Directors and the other
members of the Board shall not be held personally
liable for any loss or damage that may accrue to GMATS
as the result of any act performed within the scope of
their duties under this section.
(f) Employees.--Employees of GMATS are employees of a
nonappropriated fund instrumentality of the United States.
(g) Not a Federal Agency.--The GMATS shall not be considered
a Federal agency for purposes of--
(1) the Federal Advisory Committee Act (5 U.S.C. );
or
(2) sections 552 and 552a of title 5, United States
Code.
(h) Acquisition and Disposal of Property.--In order to carry
out the activities of GMATS, GMATS may--
(1) acquire goods, services, and real property by
lease, purchase. or otherwise;
(2) maintain, enlarge, or remodel any such property;
(3) have sole control of any such personal or real
property; and
(4) dispose of real and personal property without
regard to the Federal Property and Administrative
Services Act of 1949 (40 U.S.C. 101 et seq.).
(i) Contract Authority.--GMATS may enter into contracts and
leases without regard to the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 101 et seq.) or
any other law that prescribes procedures for the procurement of
property or service by an executive agency.
(j) Use of Department Facilities and Resources.--GMATS may
use the facilities and resources of the Department of
Transportation, with the approval of the Superintendent, but
only if any costs incurred by the Department that are
attributable solely to GMATS operations and all costs incurred
by GMATS arising out of such operations are paid using funds of
GMATS or the Department of Transportation receives other
consideration for paying for such costs. Any reimbursement may
be retained by the United States Merchant Marine Academy and
credited to the charged appropriations account.
(k) Audits of Records.--The financial records of GMATS shall
be made available to the Department of Transportation Inspector
General, upon request, for purposes of conducting an audit.
(l) Definitions.--In this section:
(1) GMATS.--The term ``GMATS'' means the Global
Maritime and Transportation School at the United States
Merchant Marine Academy, a nonappropriated fund
instrumentality of the Maritime Administration of the
United States Department of Transportation.
(2) Board.--The term ``Board'' means the GMATS Board
of Directors.
(3) Director.--The term ``Director'' means a member
of the GMATS Board.
(4) Managing director.--The term ``Managing
Director'' means a member of the Board who is an
employee of GMATS with operational responsibility for
the organization, but not a Federal employee.
(5) Senior managing director.--The term ``Senior
Managing Director'' means the Managing Director
designated the ``Senior Managing Director'' by the
Superintendent, as set forth in subsection (e) of this
section.
(6) Secretary.--The term ``Secretary'' means the
Secretary of Transportation.
(7) Superintendent.--The term ``Superintendent''
means the Superintendent of the United States Merchant
Marine Academy at Kings Point, New York, operated by
the Maritime Administration, United States Department
of Transportation or, in the absence of the
Superintendent, the Superintendent's authorized
designee or such other person as the Secretary may
designate.
MERCHANT MARINE DECORATIONS AND MEDALS ACT
SEC. 5. INDIVIDUAL NOT TO RECEIVE MORE THAN ONE OF ANY TYPE OF
DECORATION; ACCEPTANCE BY PERSONAL REPRESENTATIVE;
REPLACEMENTS.
[46 U.S.C. App. 2004]
(a) The Secretary of Transportation may not award more than
one of any type of decoration or medal to an individual. For
each succeeding act or service justifying the same decoration
or medal, a suitable device may be awarded to be worn with the
decoration or medal.
(b) When an individual scheduled to receive a decoration or
medal under this Act is unable to accept it, the Secretary may
make the award to an appropriate personal representative.
(c) The Secretary may [provide at cost, or authorize for the
manufacture and sale at reasonable prices by private persons--]
provide--
(1) the decorations and medals authorized under
section 2 of this Act and replacements for those
decorations and medals; and
(2) replacements for decorations and medals issued
under a prior law.
(d) Decorations and medals authorized under section 2 of this
Act may be of similar design as are authorized for members of
the Armed Forces of the United States for similar acts or
service.
* * * * * * *
SEC. 8. EXCLUSIVENESS OF RIGHT TO DECORATION OR MEDAL; CIVIL PENALTY
FOR VIOLATION.
[46 U.S.C. App. 2007]
Except as authorized by this Act or by the Secretary of
Transportation, a person may not manufacture, sell, possess, or
display a decoration or medal provided for in this Act. A
person violating this section is liable to the United States
Government for a civil penalty of $2,000.