[House Report 110-437]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-437
======================================================================
UPDATE AND IMPROVE THE CODIFICATION OF TITLE 46, UNITED STATES CODE
_______
November 8, 2007.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Conyers, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 3387]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 3387) to update and improve the codification of
title 46, United States Code, having considered the same,
reports favorably thereon with amendments and recommends that
the bill as amended do pass.
CONTENTS
Page
The Amendments............................................. 1
Purpose and Summary........................................ 2
Background and Need for the Legislation.................... 2
Hearings................................................... 3
Committee Consideration.................................... 3
Committee Votes............................................ 3
Committee Oversight Findings............................... 3
New Budget Authority and Tax Expenditures.................. 3
Congressional Budget Office Cost Estimate.................. 3
Performance Goals and Objectives........................... 4
Constitutional Authority Statement......................... 4
Advisory on Earmarks....................................... 4
Section-by-Section Analysis................................ 4
Changes in Existing Law Made by the Bill, as Reported...... 6
The Amendments
The amendments are as follows:
Page 2, line 2, strike ``(a) In General.--''.
Page 2, strike lines 13 and 14.
Page 2, strike line 16 through page 3, line 13 and insert
the following:
(a) Amendment.--Section 30104 of title 46, United States Code, is
amended by--
(1) striking ``(a) Cause of Action.--''; and
(2) striking subsection (b).
Page 3, line 14, strike ``(c)'' and insert ``(b)''.
Page 11, line 18, insert ``such'' before ``section''.
Page 12, after line 2, insert the following:
(D) Subsection (h)(1) of such section 54101 is amended by
striking ``632)'' and inserting ``632))''.
Page 12, line 3, strike ``(D)'' and insert ``(E)''.
Page 17, line 25, strike ``subparagraph (A)'' and insert
``paragraph (1)''.
Page 21, line 11, strike ``App. U.S.C.'' and insert
``U.S.C. App.''.
Page 21, line 14, strike ``App. U.S.C.'' and insert
``U.S.C. App.''.
Page 22, after line 3, insert the following:
(d) Large Passenger Vessel Crew Requirements.--Section
8103(k)(3)(C)(iv) of title 46, United States Code, is amended by
inserting ``and section 252 of the Immigration and Nationality Act (8
U.S.C. 1282)'' after ``of such section''.
Purpose and Summary
The purpose of H.R. 3387 is to update and improve the
codification of title 46, United States Code. It was prepared
by the Law Revision Counsel of the House of Representatives in
accordance with 2 U.S.C. 285b.
Background and Need for the Legislation
On October 6, 2006, Congress enacted Public Law 109-304,
which was an Act to complete the codification of title 46,
United States Code, ``Shipping'', as positive law. As with all
codification laws, that law restated and replaced existing law
as in effect on a particular date, in this case April 30, 2005.
It also provided that any amendments after that date to the
provisions being replaced shall be given superseding effect.
See section 18(a) of Public Law 109-304 (120 Stat. 1709).
After that so-called ``cutoff date'', Congress amended
certain of the provisions being replaced. Thus, those
amendments do not appear in the newly codified version of those
provisions. This bill updates the newly codified version to
reflect those subsequent amendments. It also makes certain
improvements based on public comments that were submitted too
late to be reflected in Public Law 109-304 and makes technical
corrections to that law.
Except for the changes reflecting post-codification
enactments to the laws codified in title 46, the provisions of
this bill are not intended to make any substantive changes to
the laws now codified in that title. Like the codification
itself, these changes are intended to restate the law without
substantive change, including applicable case law interpreting
the earlier, pre-codification provisions. In a few instances,
changes herein respond to comments, received too late to be
incorporated into the codification, recommending clarifications
to more clearly reflect the prior law.
Hearings
No hearings were held on H.R. 3387.
Committee Consideration
On October 10, 2007, the Committee met in open session and
ordered the bill H.R. 3387 favorably reported with amendments,
by a voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee notes that there
were no recorded votes during the Committee consideration of
H.R. 3387.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 3387, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 22, 2007
Honorable John Conyers Jr.
Chairman
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
The Congressional Budget Office has prepared the enclosed
cost estimate for H.R. 3387, a bill to update and improve the
codification of title 46, United States Code.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Deborah Reis,
who can be reached at 226-2860.
Sincerely,
Peter R. Orszag
Enclosure
cc: Honorable Lamar S. Smith
Ranking Member
H.R. 3387--A bill to update and improve the codification of title 46,
United States Code
As ordered reported by the House Committee on the Judiciary on
October 10, 2007
H.R. 3387 would update and amend the codification of title
46, United States Code, and would make technical changes to
various shipping laws enforced by the Maritime Administration
and the U.S. Coast Guard. CBO estimates that enacting this
legislation would result in no cost to the federal government
and would not affect direct spending or revenues.
H.R. 3387 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no cost on state, local, or tribal governments.
On August 24, 2007, CBO transmitted a cost estimate for S.
1778, the Maritime Administration Authorities Act of 2007, as
ordered reported by the Senate Committee on Commerce, Science,
and Transportation on July 19, 2007. The provisions of H.R.
3387 are nearly identical to those of title II of S. 1778, and
CBO's estimate of the costs of both versions is the same.
The CBO staff contact for this estimate is Deborah Reis,
who can be reached at 226-2860. This estimate was approved by
Theresa Gullo, Deputy Assistant Director for Budget Analysis.
Performance Goals and Objectives
In compliance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
bill, H.R. 3387, updates and improves the codification of title
46, United States Code.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 3387 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
Section-by-Section Analysis
SECTION 1--TABLE OF CONTENTS
Section 1 provides a table of contents.
SECTION 2--PURPOSE
Section 2 provides a statement of purpose.
SECTION 3--PERSONAL INJURY TO OR DEATH OF SEAMEN
Section 3 repeals the venue provision for legal actions
based on the injury or death of a seaman in the course of
employment, now found in subsection (b) of 46 U.S.C 30104, as
codified by Public Law 109-304. Section 30104 was intended as a
codification without substantive change of section 20(a) of the
Act of March 4, 1915, as amended by section 33 of the Act of
June 5, 1920 (former 46 U.S.C. App. 688(a)), commonly known as
the Jones Act. This subsection is being repealed to make
clearer that the prior law regarding venue, including the
holding of Pure Oil Co. v. Suarez, 384 U.S. 202 (1966) and
cases following it, remains in effect, so that the action may
be brought wherever the seaman's employer does business.
Because the codified provision could be read to be inconsistent
with that holding, the Committee believes it should be
repealed, retroactive to the date of codification, to ensure
that the codification has not inadvertently resulted, even
temporarily, in a substantive change.
Subsection (a) of codified section 30104 is left unchanged.
Similar language in the earlier, pre-codification statute was
interpreted to provide that seamen and their survivors not only
could elect to bring an action at law, with right of trial by
jury, but also retained an option to proceed in admiralty.
E.g., Panama R.R. Co. v. Johnson, 264 U.S. 375 (1924). This
interpretation, like other case law interpreting the earlier
provision, remains applicable to the codified provision.
Because the codified provision, like the earlier statute, is
not inconsistent with this interpretation, the Committee
believes it unnecessary to make any further clarification.
SECTION 4--AMENDMENTS TO CHAPTER 537 BASED ON PUBLIC LAW 109-163
Section 4 updates chapter 537 of title 46, United States
Code, relating to ship mortgage loans and guarantees, to
reflect the amendments made by section 3507 of the National
Defense Authorization Act for Fiscal Year 2006 (Public Law 109-
163).
SECTION 5--ADDITIONAL AMENDMENTS BASED ON PUBLIC LAW 109-163
Section 5 updates various provisions codified in title 46,
United States Code, to reflect the amendments made by sections
515(g)(2), 3502, 3509, and 3510 of the National Defense
Authorization Act for Fiscal Year 2006 (Public Law 109-163). It
also adds a new section 54101 to title 46 based on section 3506
of that Act.
SECTION 6--AMENDMENTS BASED ON PUBLIC LAW 109-171
Section 6 updates section 60301 of title 46, United States
Code, to reflect the amendments made by section 4001 of the
Deficit Reduction Act of 2005 (Public Law 109-171).
SECTION 7--AMENDMENTS BASED ON PUBLIC LAW 109-241
Section 7 updates various provisions codified in title 46,
United States Code, to reflect the amendments made by sections
303, 307, 308, 310, 901(q), and 902(o) of the Coast Guard and
Maritime Transportation Act of 2006 (Public Law 109-241).
SECTION 8--AMENDMENTS BASED ON PUBLIC LAW 109-364
Section 8 updates cross references in section 1017(b)(2) of
the John Warner National Defense Authorization Act for Fiscal
Year 2007 (Public Law 109-364, 10 U.S.C. 2631 note) to reflect
the codification in title 46, United States Code, of the
provisions referenced.
This section also updates various provisions codified in
title 46, United States Code, to reflect the amendments made by
sections 3505, 3506, 3508, and 3510(a) and (b) of that Act.
SECTION 9--MISCELLANEOUS AMENDMENTS
Subsection (a) deletes the reference to Canton Island in
section 55101(b) of title 46, United States Code, because
Canton Island is no longer a territory or possession of the
United States.
Subsection (b) amends section 55110 of title 46, United
States Code, to improve the heading.
SECTION 10--APPLICATION OF SUNSET PROVISION TO CODIFIED PROVISION
Section 301(a)(2)(E) of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (Public Law 108-27) amended the
second sentence of section 607(h)(6)(A) of the Merchant Marine
Act, 1936 (former 46 U.S.C. App. 1177(h)(6)(A)), by striking
``20 percent'' and inserting ``15 percent''. However, section
303 of that amending law provided that the amendment shall not
apply to taxable years beginning after December 31, 2008, and
that the Internal Revenue Code of 1986 shall be applied to such
years as if the amendment had never been enacted. The second
sentence of section 607(h)(6)(A) of the Merchant Marine Act,
1936, was codified in section 53511(f)(2) of title 46, United
States Code. The purpose of this section is to ensure that the
tax rate in section 53511(f)(2) is the same as it would have
been under former section 607(h)(6)(A). This section does not
amend section 53511(f)(2) directly in case of any further
amendment to section 303 of Public Law 108-27.
SECTION 11--TECHNICAL CORRECTIONS
Subsections (a) to (c) make technical corrections to Public
Law 109-304 and to provisions enacted or amended by that law.
Subsection (d) amends section 8103(k)(3)(C)(iv) of title
46, United States Code, to clarify that the provision applies
notwithstanding the section added to the cross reference.
Changes in Existing Law Made by the Bill, as Reported
As required by clause 3(e) of rule XIII of the Rules of the
House of Representatives, changes in existing law proposed by
the bill are shown below. Existing law to be stricken is shown
in strikeout, new law to be inserted is shown in italic, and
existing law in which no change is proposed is shown in roman.
Title 46, United States Code
* * *
Subtitle II--Vessels and Seamen
* * *
Part A--General Provisions
* * *
CHAPTER 21--GENERAL
Sec.
2108. Refund of penalties.
* * *
Part F--Manning of Vessels
* * *
CHAPTER 81--GENERAL
* * *
Sec. 8103. Citizenship and Navy Reserve requirements
* * *
(k) Crew Requirements for Large Passenger Vessels.--
* * *
(3) Special rules for certain licensed seamen.--
* * *
(C) Status, documentation, and employment.--
An unlicensed seaman described in subparagraph
(C) or (D) of paragraph (1) of this
subsection--
* * *
(iv) may be employed for a period of
service on board not to exceed 36
months in the aggregate as a
nonimmigrant crewman described in
section 101(a)(15)(D)(i) of the
Immigration and Nationality Act (8
U.S.C. 1101(a)(15)(D)(i)) on vessels
engaged in domestic voyages
notwithstanding the departure
requirements and time limitations of
such section and section 252 of the
Immigration and Nationality Act (8
U.S.C. 1282) and the regulations and
rules promulgated thereunder.
* * *
Part H--Identification of Vessels
* * *
CHAPTER 121--DOCUMENTATION OF VESSELS
* * *
Sec. 12111. Registry endorsement
* * *
(d) Activities Involving Mobile Offshore Drilling Units.--
(1) In general.--Only a vessel for which a
certificate of documentation with a registry
endorsement is issued may engage in--
(A) the setting, relocation, or recovery of
the anchors or other mooring equipment of a
mobile offshore drilling unit that is located
over the outer Continental Shelf (as defined in
section 2(a) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1331(a))); or
(B) the transportation of merchandise or
personnel to or from a point in the United
States from or to a mobile offshore drilling
unit located over the outer Continental Shelf
that is not attached to the seabed.
(2) Coastwise trade not authorized.--Nothing in
paragraph (1) authorizes the employment in the
coastwise trade of a vessel that does not meet the
requirements of section 12112 of this title.
* * *
Sec. 12113. Fishery endorsement
* * *
(g) Vessels Purchased Through Fishing Capacity Reduction
Program.--A vessel purchased by the Secretary of Commerce
through a fishing capacity reduction program under the
Magnuson-Stevens Fishery Conservation and Management Act (16
U.S.C. 1801 et seq.) or section 308 of the Interjurisdictional
Fisheries Act of 1986 (16 U.S.C. 4107) is not eligible for a
fishery endorsement, and any fishery endorsement issued for
that vessel is invalid.
* * *
Sec. 12131. Command of documented vessels
(a) In General.--Except as provided in subsection (b), a
documented vessel may be placed under the commmand command only
of a citizen of the United States.
* * *
Sec. 12139. Reports
(a) In General.--To ensure compliance with this chapter and
laws governing the qualifications of vessels to engage in the
coastwise trade and the fisheries, the Secretary may require
owners, masters, and charterers charterers, and mortgagees of
documented vessels to submit reports in any reasonable form and
manner the Secretary may prescribe.
* * *
Subtitle III--Maritime Liability
* * *
CHAPTER 301--GENERAL LIABILITY PROVISIONS
* * *
Sec. 30104. Personal injury to or death of seamen
(a) Cause of Action.-- A seaman injured in the course of
employment or, if the seaman dies from the injury, the personal
representative of the seaman may elect to bring a civil action
at law, with the right of trial by jury, against the employer.
Laws of the United States regulating recovery for personal
injury to, or death of, a railway employee apply to an action
under this section.
(b) Venue.--An action under this section shall be brought in
the judicial district in which the employer resides or the
employer's principal office is located.
* * *
Subtitle V--Merchant Marine
* * *
Part C--Financial Assistance Programs
Maritime Security Fleet............................................53101
Construction Reserve Funds.........................................53301
Capital Construction Funds.........................................53501
Loans and Guarantees...............................................53701
War Risk Insurance.................................................53901
Miscellaneous......................................................54101
* * *
Part B--Merchant Marine Service
* * *
CHAPTER 513--UNITED STATES MERCHANT MARINE ACADEMY
Sec.
51311. Midshipman status in the Naval Navy Reserve.
* * *
Sec. 51306. Cadet commitment agreements
(a) Agreement Requirements.--A citizen of the United States
appointed as a cadet at the United States Merchant Marine
Academy must sign, as a condition of the appointment, an
agreement to--
* * *
(4) apply for, and accept if tendered, an appointment
as a commissioned officer in the Naval Navy Reserve
(including the Merchant Marine Reserve, Naval Navy
Reserve), the Coast Guard Reserve, or any other reserve
unit of an armed force of the United States, and, if
tendered the appointment, to serve for at least 6 years
after graduation from the Academy;
* * *
(e) Alternate Service.--
(1) Service as commissioned officer.--An individual
who, for the 5-year period following graduation from
the Academy, serves as a commissioned officer on active
duty in an armed force of the United States or as a
commissioned officer of the National Oceanic and
Atmospheric Administration or the Public Health Service
shall be excused from the requirements of subsection
(a)(3)-(5).
(2) Modification or waiver.--The Secretary may modify
or waive any of the terms and conditions set forth in
subsection (a) through the imposition of alternative
service requirements.
(f) Service Obligation Performance Reporting Requirement.--
(1) In general.--Subject to any otherwise applicable
restrictions on disclosure in section 552a of title 5,
the Secretary of Defense, the Secretary of the
department in which the Coast Guard is operating, the
Administrator of the National Oceanic and Atmospheric
Administration, and the Surgeon General of the Public
Health Service--
(A) shall report the status of obligated
service of an individual graduate of the
Academy upon request of the Secretary; and
(B) may, in their discretion, notify the
Secretary of any failure of the graduate to
perform the graduate's duties, either on active
duty or in the Ready Reserve component of their
respective service, or as a commissioned
officer of the National Oceanic and Atmospheric
Administration or the Public Health Service,
respectively.
(2) Information to be provided.--A report or notice
under paragraph (1) shall identify any graduate
determined to have failed to comply with service
obligation requirements and provide all required
information as to why such graduate failed to comply.
(3) Considered as in default.--Upon receipt of such a
report or notice, such graduate may be considered to be
in default of the graduate's service obligations by the
Secretary, and subject to all remedies the Secretary
may have with respect to such a default.
* * *
Sec. 51307. Places of training
The Secretary of Transportation may provide for the training
of cadets at the United States Merchant Marine Academy--
(1) on vessels owned or subsidized by the United
States Government;
(2) on other documented vessels, with the permission
of the owner; and
(3) in shipyards or plants and with industrial or
educational organizations. ; and
(4) on any other vessel considered by the Secretary
to be necessary or appropriate or in the national
interest.
* * *
Sec. 51311. Midshipman status in the Naval Navy Reserve
(a) Application Requirement.--Before being appointed as a
cadet at the United States Merchant Marine Academy, a citizen
of the United States must agree to apply for midshipman status
in the Naval Navy Reserve (including the Merchant Marine
Reserve, Naval Navy Reserve).
(b) Appointment.--
(1) In general.--A citizen of the United States
appointed as a cadet at the Academy shall be appointed
by the Secretary of the Navy as a midshipman in the
Naval Navy Reserve (including the Merchant Marine
Reserve, Naval Navy Reserve).
(2) Rights and privileges.--The Secretary of the Navy
shall provide for cadets of the Academy who are
midshipmen in the United States Naval Navy Reserve to
be--
* * *
CHAPTER 515--STATE MARITIME ACADEMY SUPPORT PROGRAM
Sec.
51511. Midshipman status in the Naval Navy Reserve.
* * *
Sec. 51504. Use of training vessels
* * *
(f) Fuel Costs.--The Secretary may pay to a State maritime
academy the costs of fuel used by a vessel provided under this
section while used for training.
(f) Fuel Costs.--
(1) In general.--Subject to the availability of
appropriations, the Secretary shall pay to each State
maritime academy the costs of fuel used by a vessel
provided under this section while used for training.
(2) Maximum amounts.--The amount of the payment to a
State maritime academy under paragraph (1) may not
exceed--
(A) $100,000 for fiscal year 2006;
(B) $200,000 for fiscal year 2007; and
(C) $300,000 for fiscal year 2008 and each
fiscal year thereafter.
* * *
Sec. 51505. Annual payments for maintenance and support
* * *
(b) Payments.--
* * *
(2) Maximum.--The amount under paragraph (1) may not
be more than $25,000. However, if the academy satisfies
section 51506(b) of this title, the amount shall be--
(A) $100,000 for a State maritime academy;
and
(B) $200,000 $300,000 for fiscal year 2006,
$400,000 for fiscal year 2007, and $500,000 for
fiscal year 2008 and each fiscal year
thereafter for a regional maritime academy.
* * *
Sec. 51509. Student incentive payment agreements
* * *
(c) Midshipman and Enlisted Reserve Status.--An agreement
under this section shall require the student to accept
midshipman and enlisted reserve status in the Naval Navy
Reserve (including the Merchant Marine Reserve, Naval Navy
Reserve) or the Coast Guard Reserve before receiving any
payments under the agreement.
(d) Agreement Requirements.--An agreement under this section
shall require the student to--
* * *
(4) accept, if tendered, an appointment as a
commissioned officer in the Naval Navy Reserve
(including the Merchant Marine Reserve, Naval Navy
Reserve), the Coast Guard Reserve, or any other reserve
unit of an armed force of the United States, and, if
tendered the appointment, to serve for at least 6 years
after graduation from the academy;
* * *
Sec. 51511. Midshipman status in the Naval Navy Reserve
A citizen of the United States attending a State maritime
academy may be appointed by the Secretary of the Navy as a
midshipman in the Naval Navy Reserve (including the Merchant
Marine Reserve, Naval Navy Reserve).
* * *
CHAPTER 517--OTHER SUPPORT FOR MERCHANT MARINE TRAINING
* * *
Sec. 51701. United States Maritime Service
(a) General Authority.--The Secretary of Transportation may
establish and maintain a voluntary organization, to be known as
the United States Maritime Service, for the training of
citizens of the United States to serve on merchant vessels of
the United States and to perform functions to assist the United
States merchant marine, as determined necessary by the
Secretary.
* * *
CHAPTER 519--MERCHANT MARINE AWARDS
Sec.
51907. Manufacture and sale of awards and replacements.
51907. Provision of decorations, medals, and replacements.
* * *
Sec. 51907. Manufacture and sale of awards and replacements
The Secretary of Transportation may--
(1) authorize private persons to manufacture
decorations and medals authorized under this chapter or
a prior law; and
(2) provide at cost, or authorize private persons to
sell at reasonable prices, replacements for those
decorations and medals.
51907. Provision of decorations, medals, and replacements
The Secretary of Transportation may provide--
(1) the decorations and medals authorized by this
chapter and replacements for those decorations and
medals; and
(2) replacements for decorations and medals issued
under a prior law.
Sec. 51908. Prohibition against unauthorized manufacture, sale,
possession, or display of awards
(a) Prohibition.--Except as authorized under this chapter by
this chapter or the Secretary of Transportation, a person may
not manufacture, sell, possess, or display a decoration or
medal provided for in this chapter.
* * *
Part C--Financial Assistance Programs
* * *
CHAPTER 531--MARITIME SECURITY FLEET
* * *
Sec. 53105. Obligations and rights under operating agreements
* * *
(e) Transfer of Operating Agreements.--
* * *
(2) Limitation.--The Secretary of Defense may not
approve under paragraph (1) transfer of an operating
agreement to a person that is not a citizen of the
United States under section 2 of the Shipping Act, 1916
(46 U.S.C. App. 802), section 50501 of this title
unless the Secretary of Defense determines that there
is no person who is a citizen of the United States
under such section and is interested in obtaining the
operating agreement for a vessel that is otherwise
eligible to be included in the Fleet under section
53102(b) and meets the requirements of the Department
of Defense.
* * *
CHAPTER 537--LOANS AND GUARANTEES
SUBCHAPTER I--GENERAL
Sec.
53701. Definitions.
53702. General authority.
53703. Application procedures.
53704. Funding limits.
53705. Pledge of United States Government.
53706. Eligible purposes of obligations.
53707. Findings related to obligors and operators.
53708. Findings related to economic soundness.
53709. Amount of obligations.
53710. Contents of obligations.
53711. Security interest.
53712. Monitoring financial condition and operations of obligor.
53713. Administrative fees.
53714. Guarantee fees.
53715. Escrow fund.
53716. Deposit fund.
53717. Management of funds in the Treasury.
53718. Annual report to Congress.
SUBCHAPTER II--DEFAULT PROVISIONS
53721. Rights of obligee.
53722. Actions by Secretary or Administrator.
53723. Payments by Secretary or Administrator and issuance of
obligations.
53724. Rights to secured property.
53725. Actions against obligor.
SUBCHAPTER III--PARTICULAR PROJECTS
53731. Commercial demonstration ocean thermal energy conversion
facilities and plantships.
53732. Eligible export vessels.
53733. Shipyard modernization and improvement.
53734. Replacement of vessels because of changes in operating
standards.
53735. Fisheries financing and capacity reduction.
SUBCHAPTER I--GENERAL
Sec. 53701. Definitions
In this chapter:
(1) Actual cost.--The term ``actual cost'' means the
sum of--
(A) all amounts paid by or for the account of
the obligor as of the date on which a
determination is made under section 53715(d)(1)
of this title; and
(B) all amounts that the Secretary or
Administrator reasonably estimates the obligor
will become obligated to pay from time to time
thereafter, for the construction,
reconstruction, or reconditioning of the
vessel, including guarantee fees that will
become payable under section 53714 of this
title in connection with all obligations issued
for construction, reconstruction, or
reconditioning of the vessel or equipment to be
delivered, and all obligations issued for the
delivered vessel or equipment.
(2) Administrator.--The term ``Administrator'' means
the Administrator of the Maritime Administration.
(2) (3) Construction, reconstruction, and
reconditioning.--The terms ``construction'',
``reconstruction'', and ``reconditioning'' include
designing, inspecting, outfitting, and equipping.
(3) (4) Depreciated actual cost.--The term
``depreciated actual cost'' of a vessel means--
(A) if the vessel was not reconstructed or
reconditioned, the actual cost of the vessel
depreciated on a straight line basis over the
useful life of the vessel as determined by the
Secretary or Administrator, not to exceed 25
years from the date of delivery by the builder;
or
(B) if the vessel was reconstructed or
reconditioned, the sum of--
(i) the actual cost of the vessel
depreciated on a straight line basis
from the date of delivery by the
builder to the date of the
reconstruction or reconditioning, using
the original useful life of the vessel,
and from the date of the reconstruction
or reconditioning, using a useful life
of the vessel determined by the
Secretary or Administrator; and
(ii) any amount paid or obligated to
be paid for the reconstruction or
reconditioning, depreciated on a
straight line basis using a useful life
of the vessel determined by the
Secretary or Administrator.
(4) (5) Eligible export vessel.--The term ``eligible
export vessel'' means a vessel that--
(A) is constructed, reconstructed, or
reconditioned in the United States for use in
world-wide trade; and
(B) will, on delivery or redelivery, become
or remain documented under the laws of a
country other than the United States.
(5) (6) Fishery facility.--
(A) In general.--Subject to subparagraph (B),
the term ``fishery facility'' means--
(i) for operations on land--
(I) a structure or
appurtenance thereto designed
for the unloading and receiving
from vessels, the processing,
the holding pending processing,
the distribution after
processing, or the holding
pending distribution, of fish
from a fishery;
(II) the land necessary for
the structure or appurtenance;
and
(III) equipment that is for
use with the structure or
appurtenance and that is
necessary for performing a
function referred to in
subclause (I);
(ii) for operations not on land, a
vessel built in the United States and
used for, equipped to be used for, or
of a type normally used for, the
processing of fish; or
(iii) for aquaculture, including
operations on land or elsewhere--
(I) a structure or
appurtenance thereto designed
for aquaculture;
(II) the land necessary for
the structure or appurtenance;
(III) equipment that is for
use with the structure or
appurtenance and that is
necessary for performing a
function referred to in
subclause (I); and
(IV) a vessel built in the
United States and used for,
equipped to be used for, or of
a type normally used for,
aquaculture.
(B) Required ownership.--Under subparagraph
(A), the structure, appurtenance, land,
equipment, or vessel must be owned by--
(i) an individual who is a citizen of
the United States; or
(ii) an entity that is a citizen of
the United States under section 50501
of this title and that is at least 75
percent owned (as determined under that
section) by citizens of the United
States.
(6) (7) Fishing vessel.--The term ``fishing vessel''
has the meaning given that term in section 3 of the
Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1802), and any reference in this chapter
to a vessel designed principally for commercial use in
the fishing trade or industry is deemed to be a
reference to a fishing vessel.
(7) (8) Mortgage.--The term ``mortgage'' includes--
(A) a preferred mortgage as defined in
section 31301 of this title; and
(B) a mortgage on a vessel that will become a
preferred mortgage when filed or recorded under
chapter 313 of this title.
(8) (9) Obligation.--The term ``obligation'' means an
instrument of indebtedness issued for a purpose
described in section 53706 of this title, except--
(A) an obligation issued by the Secretary or
Administrator under section 53723 of this
title; and
(B) an obligation eligible for investment of
funds under section 53715(f) or 53717 of this
title.
(9) (10) Obligee.--The term ``obligee'' means the
holder of an obligation.
(10) (11) Obligor.--The term ``obligor'' means a
party primarily liable for payment of the principal of
or interest on an obligation.
(11) (12) Ocean thermal energy conversion facility or
plantship.--The term ``ocean thermal energy conversion
facility or plantship'' means an at-sea facility or
vessel, whether mobile, floating unmoored, moored, or
standing on the seabed, that uses temperature
differences in ocean water to produce electricity or
another form of energy capable of being used directly
to perform work, and includes--
(A) equipment installed on the facility or
vessel to use the electricity or other form of
energy to produce, process, refine, or
manufacture a product;
(B) a cable or pipeline used to deliver the
electricity, freshwater, or product to shore;
and
(C) other associated equipment and
appurtenances of the facility or vessel to the
extent they are located seaward of the high
water mark.
(12) (13) Secretary.--The term ``Secretary'' means--
(A) the Secretary of Commerce with respect to
fishing vessels and fishery facilities; and
(B) the Secretary of Transportation with
respect to other vessels and general shipyard
facilities (as defined in section 53733(a) of
this title).
(13) Secretary.--The term ``Secretary'' means the
Secretary of Commerce with respect to fishing vessels
and fishery facilities.
(13) (14) Vessel.--The term ``vessel'' means any type
of vessel, whether in existence or under construction,
including--
(A) a cargo vessel;
(B) a passenger vessel;
(C) a combination cargo and passenger vessel;
(D) a tanker;
(E) a tug or towboat;
(F) a barge;
(G) a dredge;
(H) a floating drydock with a capacity of at
least 35,000 lifting tons and a beam of at
least 125 feet between the wing walls;
(I) an oceanographic research vessel;
(J) an instruction vessel;
(K) a pollution treatment, abatement, or
control vessel;
(L) a fishing vessel whose ownership meets
the citizenship requirements under section
50501 of this title for documenting vessels to
operate in the coastwise trade; and
(M) an ocean thermal energy conversion
facility or plantship that is or will be
documented under the laws of the United States.
Sec. 53702. General authority
(a) In General.--The Secretary or Administrator, on terms the
Secretary or Administrator may prescribe, may guarantee or make
a commitment to guarantee the payment of the principal of and
interest on an obligation eligible to be guaranteed under this
chapter. A guarantee or commitment to guarantee shall cover 100
percent of the principal and interest.
(b) Direct Loans for Fisheries.--
(1) In general.--Notwithstanding any other provision
of this chapter, any obligation involving a fishing
vessel, fishery facility, aquaculture facility,
individual fishing quota, or fishing capacity reduction
program issued under this chapter after October 11,
1996, shall be a direct loan obligation for which the
Secretary shall be the obligee, rather than an
obligation issued to an obligee other than the
Secretary and guaranteed by the Secretary. A direct
loan obligation under this subsection shall be treated
in the same manner and to the same extent as an
obligation guaranteed under this chapter except with
respect to provisions of this chapter that by their
nature can only be applied to obligations guaranteed
under this chapter.
(2) Interest rate.--Notwithstanding any other
provision of this chapter, the annual rate of interest
an obligor shall pay on a direct loan obligation under
this subsection is 2 percent plus the additional
percent the Secretary must pay as interest to borrow
from the Treasury the funds to make the loan.
Sec. 53703. Application procedures
(a) Time for Decision.--
(1) In general.--The Secretary or Administrator shall
approve or deny an application for a loan guarantee
under this chapter within 270 days after the date on
which the signed application is received by the
Secretary or Administrator.
(2) Extension.--On request by an applicant, the
Secretary or Administrator may extend the 270-day
period in paragraph (1) to a date not later than 2
years after the date on which the signed application
was received by the Secretary or Administrator.
(b) Certification of Review.--The Secretary or Administrator
may not guarantee or make a commitment to guarantee an
obligation under this chapter unless the Secretary or
Administrator certifies that a full and fair consideration of
all the regulatory requirements, including economic soundness
and financial requirements applicable to the obligor and
related parties, and a thorough assessment of the technical,
economic, and financial aspects of the loan application, has
been made.
Sec. 53704. Funding limits
(a) General Limitations.--The total unpaid principal amount
of obligations guaranteed under this chapter and outstanding at
one time may not exceed $12,000,000,000. Of that amount--
(1) $850,000,000 shall be limited to obligations
related to fishing vessels and fishery facilities; and
(2) $3,000,000,000 shall be limited to obligations
related to eligible export vessels.
(b) Additional Limitations.--Additional limitations may not
be imposed on new commitments to guarantee loans for any fiscal
year, except in amounts established in advance by annual
authorization laws. A vessel eligible for a guarantee under
this chapter may not be denied eligibility because of its type.
(c) Limits Based on Risk Factors.--
(1) Definition.--In this subsection, the term
``cost'' has the meaning given that term in section 502
of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a).
(2) System of risk categories.--The Secretary or
Administrator shall--
(A) establish, and update annually, a system
of risk categories for obligations guaranteed
under this chapter that categorizes the
relative risk of guarantees based on the risk
factors set forth in paragraph (4);
(B) determine annually for each risk category
a subsidy rate equivalent to the cost of
obligations in the category, expressed as a
percentage of the amount guaranteed for
obligations in the category; and
(C) ensure that each risk category is
comprised of loans that are relatively
homogeneous in cost and share characteristics
predictive of defaults and other costs, given
the facts known at the time of obligation or
commitment, using a risk category system that
is based on historical analysis of program data
and statistical evidence concerning the likely
costs of defaults or other costs that are
expected to be associated with the loans in the
category.
(3) Use of system.--
(A) Placing obligation in category.--Before
making a guarantee under this chapter for an
obligation, and annually for projects subject
to a guarantee, the Secretary or Administrator
shall apply the risk factors specified in
paragraph (4) to place the obligation in a risk
category established under paragraph (2).
(B) Reduction of available amount.--The
Secretary or Administrator shall consider the
total amount available to the Secretary or
Administrator for making guarantees under this
chapter to be reduced by the amount determined
by multiplying--
(i) the amount guaranteed under this
chapter for an obligation; by
(ii) the subsidy rate for the
category in which the obligation is
placed under subparagraph (A).
(C) Estimated cost.--The estimated cost to
the United States Government of a guarantee
under this chapter for an obligation is deemed
to be the amount determined under subparagraph
(B) for the obligation.
(D) Restriction on further guarantees.--The
Secretary or Administrator may not guarantee
obligations under this chapter after the total
amount available to the Secretary or
Administrator under appropriations laws for the
cost of loan guarantees is considered to be
reduced to zero under subparagraph (B).
(4) Risk factors.--The risk factors referred to in
this subsection are--
(A) if applicable, the country risk for each
eligible export vessel financed or to be
financed by an obligation;
(B) the period for which an obligation is
guaranteed or to be guaranteed;
(C) the amount of an obligation guaranteed or
to be guaranteed in relation to the total cost
of the project financed or to be financed by
the obligation;
(D) the financial condition of an obligor or
applicant for a guarantee;
(E) if applicable, other guarantees related
to the project;
(F) if applicable, the projected employment
of each vessel or equipment to be financed with
an obligation;
(G) if applicable, the projected market that
will be served by each vessel or equipment to
be financed with an obligation;
(H) the collateral provided for a guarantee
for an obligation;
(I) the management and operating experience
of an obligor or applicant for a guarantee;
(J) whether a guarantee under this chapter is
or will be in effect during the construction
period of the project; and
(K) the concentration risk presented by an
unduly large percentage of loans outstanding by
any one borrower or group of affiliated
borrowers.
Sec. 53705. Pledge of United States Government
(a) Full Faith and Credit.--The full faith and credit of the
United States Government is pledged to the payment of a
guarantee made under this chapter, for both principal and
interest, including interest (as may be provided for in the
guarantee) accruing between the date of default under a
guaranteed obligation and the date of payment in full of the
guarantee.
(b) Incontestability.--A guarantee or commitment to guarantee
made under this chapter is conclusive evidence of the
eligibility of the obligation for the guarantee. The validity
of a guarantee or commitment to guarantee made under this
chapter is incontestable.
Sec. 53706. Eligible purposes of obligations
(a) In General.--To be eligible for a guarantee under this
chapter, an obligation must aid in any of the following:
(1)(A) Financing (including reimbursement of an
obligor for expenditures previously made for) the
construction, reconstruction, or reconditioning of a
vessel (including an eligible export vessel) designed
principally for research, or for commercial use--
(i) in the coastwise or intercoastal trade;
(ii) on the Great Lakes, or on bays, sounds,
rivers, harbors, or inland lakes of the United
States;
(iii) in foreign trade as defined in section
109(b) of this title;
(iv) as an ocean thermal energy conversion
facility or plantship;
(v) as a floating drydock in the
construction, reconstruction, reconditioning,
or repair of vessels; or
(vi) as an eligible export vessel in
worldwide trade.
(B) A guarantee under subparagraph (A) may not be
made more than one year after delivery of the vessel
(or redelivery if the vessel was reconstructed or
reconditioned) unless the proceeds of the obligation
are used to finance the construction, reconstruction,
or reconditioning of a vessel or of facilities or
equipment related to marine operations.
(2) Financing (including reimbursement of an obligor
for expenditures previously made for) the construction,
reconstruction, reconditioning, or purchase of a vessel
owned by citizens of the United States and designed
principally for research, or for commercial use in the
fishing industry.
(3) Financing the purchase, reconstruction, or
reconditioning of a vessel or fishery facility--
(A) for which an obligation was guaranteed
under this chapter; and
(B) that, under subchapter II of this
chapter--
(i) is a vessel or fishery facility
for which an obligation was accelerated
and paid;
(ii) was acquired by the Federal Ship
Financing Fund or successor account
under section 53717 of this title; or
(iii) was sold at foreclosure begun
or intervened in by the Secretary or
Administrator.
(4) Financing any part of the repayment to the United
States Government of any amount of a construction-
differential subsidy paid for a vessel.
(5) Refinancing an existing obligation (regardless of
whether guaranteed under this chapter) issued for a
purpose described in paragraphs (1)-(4), including a
short-term obligation incurred to obtain temporary
funds with the intention of refinancing.
(6) Financing or refinancing (including reimbursement
of an obligor for expenditures previously made for) the
construction, reconstruction, reconditioning, or
purchase of a fishery facility.
(7) Financing or refinancing (including reimbursement
of an obligor for expenditures previously made for) the
purchase of an individual fishing quota in accordance
with section 303(d)(4) of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1853(d)(4)).
(b) Non-Vessels Treated as Vessels.--An obligation guaranteed
under subsection (a)(6) or (7) shall be treated, for purposes
of this chapter, in the same manner and to the same extent as
an obligation that aids in financing the construction,
reconstruction, reconditioning, or purchase of a vessel, except
with respect to provisions that by their nature can only be
applied to vessels.
(c) Priorities for Certain Vessels.--In guaranteeing or
making a commitment to guarantee an obligation under this
chapter, the Secretary shall give priority to--
(1) a vessel that is otherwise eligible for a
guarantee and is constructed with assistance under
subtitle D of the Maritime Security Act of 2003 (46
U.S.C. 53101 note); and
(2) after applying paragraph (1), a vessel that is
otherwise eligible for a guarantee and that the
Secretary of Defense determines--
(A) is suitable for service as a naval
auxiliary in time of war or national emergency;
and
(B) meets a shortfall in sealift capacity or
capability.
(c) Priorities for Certain Vessels.--
(1) Vessels.--In guaranteeing or making a commitment
to guarantee an obligation under this chapter, the
Administrator shall give priority to--
(A) a vessel that is otherwise eligible for a
guarantee and is constructed with assistance
under subtitle D of the Maritime Security Act
of 2003 (46 U.S.C. 53101 note); and
(B) after applying subparagraph (A), a vessel
that is otherwise eligible for a guarantee and
that the Secretary of Defense determines--
(i) is suitable for service as a
naval auxiliary in time of war or
national emergency; and
(ii) meets a shortfall in sealift
capacity or capability.
(2) Time for determination.--The Secretary of Defense
shall determine whether a vessel satisfies paragraph
(1)(B) not later than 30 days after receipt of a
request from the Administrator for such a
determination.
Sec. 53707. Findings related to obligors and operators
(a) Responsible Obligor.--The Secretary or Administrator may
not guarantee or make a commitment to guarantee an obligation
under this chapter unless the Secretary or Administrator finds
that the obligor is responsible and has the ability,
experience, financial resources, and other qualifications
necessary for the adequate operation and maintenance of each
vessel that will serve as security for the guarantee.
(b) Operators of Liner Vessels.--The Secretary of
Transportation Administrator may not guarantee or make a
commitment to guarantee a loan for the construction,
reconstruction, or reconditioning of a liner vessel under this
chapter unless the Chairman of the Federal Maritime Commission
certifies that the operator of the vessel has not been found by
the Commission to have committed, within the previous 5 years--
(1) a violation of part A of subtitle IV of this
title that involves unjust or unfair discriminatory
treatment or undue or unreasonable prejudice or
disadvantage with respect to a United States shipper,
ocean transportation intermediary, ocean common
carrier, or port; or
(2) a violation of part B of subtitle IV of this
title.
(c) Operators of Fishing Vessels.--The Secretary of Commerce
may not guarantee or make a commitment to guarantee a loan for
the construction, reconstruction, or reconditioning of a
fishing vessel under this chapter if the operator of the vessel
has been--
(1) held liable, or the vessel has been held liable
in rem, for a civil penalty under section 308 of the
Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1858) and the operator has not paid the
penalty;
(2) found guilty of an offense under section 309 of
the Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. 1859) and not paid the
assessed fine or served the assessed sentence;
(3) held liable for a civil or criminal penalty under
section 105 of the Marine Mammal Protection Act of 1972
(16 U.S.C. 1375) and not paid the assessed fine or
served the assessed sentence; or
(4) held liable for a civil penalty by the Coast
Guard under this title or title 33 and not paid the
assessed fine.
(d) Waivers Concerning Financial Condition.--The Secretary or
Administrator shall prescribe regulations concerning
circumstances under which waivers of, or exceptions to,
otherwise applicable regulatory requirements concerning
financial condition can be made. The regulations shall require
that--
(1) the economic soundness requirements in section
53708(a) of this title are met after the waiver of the
financial condition requirement; and
(2) if the Secretary or Administrator considers
necessary, the waiver shall provide for the imposition
of other requirements on the obligor designed to
compensate for the increased any significant increase
in risk associated with the obligor's failure to meet
regulatory requirements applicable to financial
condition.
Sec. 53708. Findings related to economic soundness
(a) By Secretary of Transportation Administrator.--The
Secretary of Transportation Administrator may not guarantee or
make a commitment to guarantee an obligation under this chapter
unless the Secretary Administrator finds that the property or
project for which the obligation will be executed will be
economically sound. In making that finding, the Secretary
Administrator shall consider--
(1) the need in the particular segment of the
maritime industry for new or additional capacity,
including any impact on existing equipment for which a
guarantee under this chapter is in effect;
(2) the market potential for employment of the vessel
over the life of the guarantee;
(3) projected revenues and expenses associated with
employment of the vessel;
(4) any charter, contract of affreightment,
transportation agreement, or similar agreement or
undertaking relevant to the employment of the vessel;
(5) other relevant criteria; and
(6) for inland waterways, the need for technical
improvements, including increased fuel efficiency or
improved safety.
(b) By Secretary of Commerce.--The Secretary of Commerce may
not guarantee or make a commitment to guarantee an obligation
under this chapter unless the Secretary finds, at or prior to
the time the commitment is made or the guarantee becomes
effective, that--
(1) the property or project for which the obligation
will be executed will be economically sound; and
(2) for a fishing vessel, the purpose of the
financing or refinancing is consistent with--
(A) the wise use of the fisheries resources
and the development, advancement, management,
conservation, and protection of the fisheries
resources; or
(B) the need for technical improvements,
including increased fuel efficiency or improved
safety.
(c) Used Fishing Vessels and Facilities.--The Secretary of
Commerce may not guarantee or make a commitment to guarantee an
obligation under this chapter for the purchase of a used
fishing vessel or used fishery facility unless the vessel or
facility will be--
(1) reconstructed or reconditioned in the United
States and will contribute to the development of the
United States fishing industry; or
(2) used--
(A) in the harvesting of fish from an
underused fishery; or
(B) for a purpose described in the definition
of ``fishery facility'' in section 53701 of
this title with respect to an underused
fishery.
(d) Independent Analysis.--The Secretary or Administrator may
make a determination that aspects of an application under this
chapter require independent analysis to be conducted by third
party experts due to risk factors associated with markets,
technology, financial structures, or other risk factors
identified by the Secretary. Any independent analysis conducted
under this subsection shall be performed by a party chosen by
the Secretary. or financial structures. A third party
independent analysis conducted under this subsection shall be
performed by a private sector expert in assessing such risk
factors who is selected by the Secretary or Administrator.
(e) Additional Equity Because of Increased Risks.--
Notwithstanding any other provision of this chapter, the
Secretary or Administrator may make a determination that an
application under this title requires additional equity because
of increased risk factors associated with markets, technology,
financial structures, or other risk factors identified by the
Secretary or financial structures.
Sec. 53709. Amount of obligations
(a) In General.--The principal of an obligation may not be
guaranteed in an amount greater than the amount determined by
multiplying the percentage applicable under subsection (b) by--
(1) the amount paid by or for the account of the
obligor (as determined by the Secretary or
Administrator, which determination shall be conclusive)
for the construction, reconstruction, or reconditioning
of the vessel used as security for the guarantee; or
(2) if the obligor creates an escrow fund under
section 53715 of this title, the actual cost of the
vessel.
(b) Limitations on Amount Borrowed.--
(1) In general.--Except as otherwise provided, the
principal amount of an obligation guaranteed under this
chapter may not exceed 75 percent of the actual cost or
depreciated actual cost, as determined by the Secretary
or Administrator, of the vessel used as security for
the guarantee.
(2) Certain approved vessels.--The principal amount
may not exceed 87.5 percent of the actual cost or
depreciated actual cost if--
(A) the size and speed of the vessel are
approved by the Secretary or Administrator;
(B) the vessel is or would have been eligible
for mortgage aid for construction under section
509 of the Merchant Marine Act, 1936, or would
have been eligible except that the vessel was
built with a construction-differential subsidy
and the subsidy has been repaid; and
(C) the vessel is of a type described in that
section for which the minimum down payment
required by that section is 12.5 percent of the
cost of the vessel.
(3) Barges.--For a barge constructed without a
construction-differential subsidy or for which the
subsidy has been repaid, the principal amount may not
exceed 87.5 percent of the actual cost or depreciated
actual cost.
(4) Fishing vessels and fishery facilities.--For a
fishing vessel or fishery facility, the principal
amount may not exceed 80 percent of the actual cost or
depreciated actual cost. However, debt for the vessel
or facility may not be placed through the Federal
Financing Bank.
(5) OTEC.--For an ocean thermal energy conversion
facility or plantship constructed without a
construction-differential subsidy, the principal amount
may not exceed 87.5 percent of the actual cost or
depreciated actual cost of the facility or plantship.
(6) Eligible export vessels.--For an eligible export
vessel, the principal amount may not exceed 87.5
percent of the actual cost or depreciated actual cost.
(c) Security Involving Multiple Vessels.--The principal
amount of an obligation having more than one vessel as security
for the guarantee may not exceed the sum of the principal
amounts allowable for all the vessels.
(d) Prohibition on Uniform Percentage Limitations.--The
Secretary or Administrator may not establish a percentage under
any provision of subsection (b) that is to be applied uniformly
to all guarantees or commitments to guarantee made under that
provision.
(e) Prohibition on Minimum Principal Amount.--The Secretary
may not establish, as a condition of eligibility for a
guarantee under this chapter, a minimum principal amount for an
obligation covering the reconstruction or reconditioning of a
fishing vessel or fishery facility. For purposes of this
chapter, the reconstruction or reconditioning of a fishing
vessel or fishery facility does not include the routine minor
repair or maintenance of the vessel or facility.
Sec. 53710. Contents of obligations
(a) In General.--An obligation guaranteed under this chapter
must--
(1) provide for payments by the obligor satisfactory
to the Secretary or Administrator;
(2) provide for interest (exclusive of guarantee fees
and other fees) at a rate not more than the annual rate
on the unpaid principal that the Secretary or
Administrator determines is reasonable, considering the
range of interest rates prevailing in the private
market for similar loans and the risks assumed by the
Secretary or Administrator;
(3) have a maturity date satisfactory to the
Secretary or Administrator, but--
(A) not more than 25 years after the date of
delivery of the vessel used as security for the
guarantee; or
(B) if the vessel has been reconstructed or
reconditioned, not more than the later of--
(i) 25 years after the date of
delivery of the vessel; or
(ii) the remaining years of useful
life of the vessel as determined by the
Secretary or Administrator; and
(4) provide, or a related agreement must provide,
that if the vessel used as security for the guarantee
is a delivered vessel, the vessel shall be--
(A) in class A-1, American Bureau of
Shipping, or meet other standards acceptable to
the Secretary or Administrator, with all
required certificates, including marine
inspection certificates of the Coast Guard or,
in the case of an eligible export vessel, of
the appropriate foreign authorities under a
treaty, convention, or other international
agreement to which the United States is a
party, and with all outstanding requirements
and recommendations necessary for class
retention accomplished, unless the Secretary or
Administrator permits a deferment of repairs
necessary to meet these requirements; and
(B) well equipped, in good repair, and in
every respect seaworthy and fit for service.
(b) Provisions for Certain Passenger Vessels.--
(1) In general.--With the Secretary's Administrator's
approval, if the vessel used as security for the
guarantee is a passenger vessel having the tonnage,
speed, passenger accommodations, and other
characteristics described in section 503 of the
Merchant Marine Act, 1936, an obligation guaranteed
under this chapter or a related agreement may provide
that--
(A) the only recourse by the United States
Government against the obligor for payments
under the guarantee will be repossession of the
vessel and assignment of insurance claims; and
(B) the obligor's liability for payments
under the guarantee will be satisfied and
discharged by the surrender of the vessel and
all interest in the vessel to the Government in
the condition described in paragraph (2).
(2) Surrender of vessel.--
(A) In general.--On surrender, the vessel
must be--
(i) free and clear of all liens and
encumbrances except the security
interest conveyed to the Secretary
Administrator under this chapter;
(ii) in class; and
(iii) in as good order and condition
(ordinary wear and tear excepted) as
when acquired by the obligor.
(B) Covering deficiencies by insurance.--To
the extent covered by insurance, a deficiency
related to a requirement in subparagraph (A)
may be satisfied by assignment of the obligor's
insurance claims to the Government.
(c) Other Provisions To Protect Security Interests.--An
obligation guaranteed under this chapter and any related
agreement must contain other provisions for the protection of
the security interests of the Government (including
acceleration, assumption, and subrogation provisions and the
issuance of notes by the obligor to the Secretary or
Administrator), liens and releases of liens, payment of taxes,
and other matters that the Secretary or Administrator may
prescribe.
Sec. 53711. Security interest
(a) In General.--The Secretary or Administrator may guarantee
an obligation under this chapter only if the obligor conveys or
agrees to convey to the Secretary or Administrator a security
interest the Secretary or Administrator considers necessary to
protect the interest of the United States Government.
(b) Multiple Vessels and Types of Security.--The security
interest may relate to more than one vessel and may consist of
more than one type of security. If the security interest
relates to more than one vessel, the obligation may have the
latest maturity date allowable under section 53710(a)(3) of
this title for any of the vessels used as security for the
guarantee. However, the Secretary or Administrator may require
such payments of principal prior to maturity, with respect to
all related obligations, as the Secretary or Administrator
considers necessary to maintain adequate security for the
guarantee.
Sec. 53712. Monitoring financial condition and operations of obligor
(a) In General.--The Secretary or Administrator shall monitor
the financial condition and operations of the obligor on a
regular basis during the term of the guarantee. The Secretary
or Administrator shall document the results of the monitoring
on an annual or quarterly basis depending on the condition of
the obligor. If the Secretary or Administrator determines that
the financial condition of the obligor warrants additional
protections to the Secretary or Administrator, the Secretary or
Administrator shall take appropriate action under subsection
(b). If the Secretary or Administrator determines that the
financial condition of the obligor jeopardizes its continued
ability to perform its responsibilities in connection with the
guarantee of an obligation by the Secretary or Administrator,
the Secretary or Administrator shall make an immediate
determination whether default should take place and whether
further measures described in subsection (b) should be taken to
protect the interests of the Secretary or Administrator while
ensuring that program objectives are met.
(b) Contract Provisions To Protect Secretary or
Administrator.--The Secretary or Administrator shall include
provisions in a loan agreement with an obligor that provides
additional authority to the Secretary or Administrator to take
action to limit potential losses in connection with a defaulted
loan or a loan that is in jeopardy due to the deteriorating
financial condition of the obligor. These provisions include
requirements for additional collateral or greater equity
contributions that are effective upon the occurrence of
verifiable conditions relating to the obligor's financial
condition or the status of the vessel or shipyard project. If
the Secretary or Administrator has waived a requirement under
section 53707(d) of this title, the loan agreement shall
include requirements for additional payments, collateral, or
equity contributions to meet the waived requirement upon the
occurrence of verifiable conditions indicating that the
obligor's financial condition enables the obligor to meet the
waived requirement.
Sec. 53713. Administrative fees
(a) In General.--The Secretary or Administrator shall charge
and collect from the obligor fees the Secretary or
Administrator considers reasonable for--
(1) investigating an application for a guarantee;
(2) appraising property offered as security for a
guarantee;
(3) issuing a commitment;
(4) providing services related to an escrow fund
under section 53715 of this title; and
(5) inspecting property during construction,
reconstruction, or reconditioning.
(b) Total Fee Limitation.--The total fees under subsection
(a) may not exceed 0.5 percent of the original principal amount
of the obligations to be guaranteed.
(c) Fees for Independent Analysis.--The Secretary or
Administrator may charge and collect fees to cover the costs of
independent analysis under section 53708(d) of this title.
Notwithstanding section 3302 of title 31, any fee collected
under this subsection shall--
(1) be credited as an offsetting collection to the
account that finances the administration of the loan
guarantee program;
(2) be available for expenditure only to pay the
costs of activities and services for which the fee is
imposed; and
(3) remain available until expended.
Sec. 53714. Guarantee fees
(a) Regulations.--Subject to this section, the Secretary or
Administrator shall prescribe regulations to assess a fee for
guaranteeing an obligation under this chapter.
(b) Computation of Fee.--
(1) In general.--The amount of the fee for a
guarantee under this chapter shall be equal to the sum
of the amounts determined under paragraph (2) for the
years in which the guarantee is in effect.
(2) Present value for each year.--The amount referred
to in paragraph (1) for a year in which the guarantee
is in effect is the present value of the amount
calculated under paragraph (3). To determine the
present value, the Secretary or Administrator shall
apply a discount rate determined by the Secretary of
the Treasury, considering current market yields on
outstanding obligations of the United States Government
having periods to maturity comparable to the period to
maturity for the guaranteed obligation.
(3) Calculation of amount.--The amount referred to in
paragraph (2) shall be calculated by multiplying--
(A) the estimated average unpaid principal
amount of the obligation that will be
outstanding during the year (excluding the
average amount, other than interest, on deposit
during the year in an escrow fund under section
53715 of this title); by
(B) the fee rate set under paragraph (4).
(4) Setting fee rates.--To set the fee rate referred
to in paragraph (3)(B), the Secretary or Administrator
shall establish a formula that--
(A) takes into account the security provided
for the guaranteed obligation; and
(B) is a sliding scale based on the
creditworthiness of the obligor, using--
(i) the lowest allowable rate under
paragraph (5) for the most creditworthy
obligors; and
(ii) the highest allowable rate under
paragraph (5) for the least
creditworthy obligors.
(5) Permissible range of rates.--The fee rate set
under paragraph (4) shall be--
(A) for a delivered vessel or equipment, at
least 0.5 percent and not more than 1 percent;
and
(B) for a vessel to be constructed,
reconstructed, or reconditioned or equipment to
be delivered, at least 0.25 percent and not
more than 0.5 percent.
(c) When Fee Collected.--A fee for the guarantee of an
obligation under this chapter shall be collected not later than
the date on which an amount is first paid on the obligation.
(d) Financing the Fee.--A fee paid under this section is
eligible to be financed under this chapter and shall be
included in the actual cost of the obligation guaranteed.
(e) Not Refundable.--A fee paid under this section is not
refundable. However, an obligor shall receive credit for the
amount paid for the remaining term of the obligation if the
obligation is refinanced and guaranteed under this chapter
after the refinancing.
Sec. 53715. Escrow fund
(a) In General.--If the proceeds of an obligation guaranteed
under this chapter are to be used to finance the construction,
reconstruction, or reconditioning of a vessel that will serve
as security for a guarantee under this chapter, the Secretary
or Administrator may accept and hold in escrow, under an escrow
agreement with the obligor, a portion of the proceeds of all
obligations guaranteed under this chapter whose proceeds are to
be so used which is equal to--
(1) the excess of--
(A) the principal amount of all obligations
whose proceeds are to be so used; over
(B) 75 percent or 87.5 percent, whichever is
applicable under section 53709(b) of this
title, of the amount paid by or for the account
of the obligor for the construction,
reconstruction, or reconditioning of the
vessel; plus
(2) any interest the Secretary or Administrator may
require on the amount described in paragraph (1).
(b) Security Involving Both Uncompleted and Delivered
Vessels.--If the security for the guarantee of an obligation
relates both to a vessel to be constructed, reconstructed, or
reconditioned and to a delivered vessel, the principal amount
of the obligation shall be prorated for purposes of subsection
(a) under regulations prescribed by the Secretary or
Administrator.
(c) Disbursement Before Termination of Agreement.--
(1) Purposes.--The Secretary or Administrator shall
disburse amounts in the escrow fund, as specified in
the escrow agreement, to--
(A) pay amounts the obligor is obligated to
pay for--
(i) the construction, reconstruction,
or reconditioning of a vessel used as
security for the guarantee; and
(ii) interest on the obligations;
(B) redeem the obligations under a
refinancing guaranteed under this chapter; and
(C) pay any excess interest deposits to the
obligor at times provided for in the escrow
agreement.
(2) Manner of payment.--If a payment becomes due
under the guarantee before the termination of the
escrow agreement, the amount in the escrow fund at the
time the payment becomes due, including realized income
not yet paid to the obligor, shall be paid into the
appropriate account under section 53717 of this title.
The amount shall be credited against amounts due or to
become due from the obligor to the Secretary or
Administrator on the guaranteed obligations or, to the
extent not so required, be paid to the obligor.
(d) Payments Required Before Disbursement.--
(1) In general.--No disbursement shall be made under
subsection (c) to any person until the total amount
paid by or for the account of the obligor from sources
other than the proceeds of the obligation equals at
least 25 percent or 12.5 percent, whichever is
applicable under section 53709(b) of this title, of the
aggregate actual cost of the vessel, as previously
approved by the Secretary or Administrator. If the
aggregate actual cost of the vessel has increased since
the Secretary's or Administrator's initial approval or
if it increases after the first disbursement is
permitted under this subsection, then no further
disbursements shall be made under subsection (c) until
the total amount paid by or for the account of the
obligor from sources other than the proceeds of the
obligation equals at least 25 percent or 12.5 percent,
as applicable, of the increase, as determined by the
Secretary or Administrator, in the aggregate actual
cost of the vessel. This paragraph does not require the
Secretary or Administrator to consent to finance any
increase in actual cost unless the Secretary or
Administrator determines that such an increase in the
obligation meets all the terms and conditions of this
chapter or other applicable law.
(2) Documented proof of progress requirement.--The
Secretary or Administrator shall, by regulation,
establish a transparent, independent, and risk-based
process for verifying and documenting the progress of
projects under construction before disbursing
guaranteed loan funds. At a minimum, the process shall
require documented proof of progress in connection with
the construction, reconstruction, or reconditioning of
a vessel or vessels before disbursements are made from
the escrow fund. The Secretary or Administrator may
require that the obligor provide a certificate from an
independent party certifying that the requisite
progress in construction, reconstruction, or
reconditioning has taken place.
(e) Disbursement on Termination of Agreement.--
(1) In general.--If a payment has not become due
under the guarantee before the termination of the
escrow agreement, the balance of the escrow fund at the
time of termination shall be disbursed to--
(A) prepay the excess of--
(i) the principal amount of all
obligations whose proceeds are to be
used to finance the construction,
reconstruction, or reconditioning of
the vessel used or to be used as
security for the guarantee; over
(ii) 75 percent or 87.5 percent,
whichever is applicable under section
53709(b) of this title, of the actual
cost of the vessel to the extent paid;
and
(B) pay interest on that prepaid amount of
principal.
(2) Remaining balance.--Any remaining balance of the
escrow fund shall be paid to the obligor.
(f) Investment.--The Secretary or Administrator may invest
and reinvest any part of an escrow fund in obligations of the
United States Government with maturities such that the escrow
fund will be available as required for purposes of the escrow
agreement. Investment income shall be paid to the obligor when
received.
(g) Terms To Protect Government.--The escrow agreement shall
contain other terms the Secretary or Administrator considers
necessary to protect fully the interests of the Government.
Sec. 53716. Deposit fund
(a) In General.--There is a deposit fund in the Treasury for
purposes of this section. The Secretary or Administrator, in
accordance with an agreement under subsection (b), may deposit
into and hold in the fund cash belonging to an obligor to serve
as collateral for a guarantee made under this chapter with
respect to the obligor.
(b) Agreement.--The Secretary or Administrator and an obligor
shall make a reserve fund or other collateral account agreement
to govern the deposit, withdrawal, retention, use, and
reinvestment of cash of the obligor held in the fund. The
agreement shall contain--
(1) terms and conditions required by this section;
(2) terms that grant to the United States Government
a security interest in all amounts deposited into the
fund; and
(3) any additional terms considered by the Secretary
or Administrator to be necessary to protect fully the
interests of the Government.
(c) Investment.--The Secretary or Administrator may invest
and reinvest any part of the amounts in the fund in obligations
of the Government with maturities such that amounts in the fund
will be available as required for purposes of the agreement
under subsection (b). Cash balances in the fund in excess of
current requirements shall be maintained in a form of
uninvested funds, and the Secretary of the Treasury shall pay
interest on these funds.
(d) Withdrawals.--
(1) In general.--Cash deposited into the fund may not
be withdrawn without the consent of the Secretary or
Administrator.
(2) Use of income.--Subject to paragraph (3), the
Secretary or Administrator may pay any income earned on
cash of an obligor deposited into the fund in
accordance with the agreement with the obligor under
subsection (b).
(3) Retention against default.--The Secretary or
Administrator may retain and offset any or all of the
cash of an obligor in the fund, and any income realized
thereon, as part of the Secretary's or Administrator's
recovery against the obligor in case of a default by
the obligor on an obligation.
Sec. 53717. Management of funds in the Treasury
(a) Definition.--In this section, the term ``FCRA'' means the
Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
(b) Loan Guarantees by Secretary of Transportation
Administrator.--
(1) When not subject to fcra.--The Secretary of
Transportation Administrator shall account for payments
and disbursements involving obligations guaranteed
under this chapter and not subject to FCRA in an
account in the Treasury entitled the Federal Ship
Financing Fund Liquidating Account (a liquidating
account as defined in FCRA).
(2) When subject to fcra.--The Secretary of
Transportation Administrator shall account for payments
and disbursements involving obligations guaranteed
under this chapter and subject to FCRA in a separate
account in the Treasury entitled the Federal Ship
Financing Guaranteed Loan Financing Account (a
financing account as defined in FCRA).
(c) Loan Guarantees by Secretary of Commerce.--
(1) When not subject to fcra.--The Secretary of
Commerce shall account for payments and disbursements
involving obligations guaranteed under this chapter and
not subject to FCRA in a separate account in the
Treasury established for this purpose.
(2) When subject to fcra.--The Secretary of Commerce
shall account for payments and disbursements involving
obligations guaranteed under this chapter and subject
to FCRA in a separate account in the Treasury
established for this purpose.
(d) Direct Loans by Secretary of Commerce.--The Secretary of
Commerce shall account for payments and disbursements involving
direct loans made under this chapter in a separate account in
the Treasury established for this purpose.
Sec. 53718. Annual report to Congress
The Secretary of Transportation Administrator shall report to
Congress annually on the loan guarantee program under this
chapter. Each report shall include--
(1) the size, in dollars, of the portfolio of loans
guaranteed;
(2) the size, in dollars, of projects in the
portfolio facing financial difficulties;
(3) the number and type of projects covered;
(4) a profile of pending loan applications;
(5) the amount of appropriations available for new
guarantees;
(6) a profile of each project approved since the last
report; and
(7) a profile of any defaults since the last report.
SUBCHAPTER II--DEFAULT PROVISIONS
Sec. 53721. Rights of obligee
(a) Demands by Obligees.--Except as provided in subsection
(c), if an obligor has continued in default for 30 days in the
payment of principal or interest on an obligation guaranteed
under this chapter, the obligee or the obligee's agent may
demand that the Secretary or Administrator pay the unpaid
principal amount of the obligation and the unpaid interest on
the obligation to the date of payment. The demand must be made
within the earlier of--
(1) a period that may be specified in the guarantee
or a related agreement; or
(2) 90 days from the date of the default.
(b) Payments by Secretary or Administrator.--
(1) In general.--If a demand is made under subsection
(a), the Secretary or Administrator shall pay to the
obligee or the obligee's agent the unpaid principal
amount of the obligation and the unpaid interest on the
obligation to the date of payment. Payment shall be
made within the earlier of--
(A) a period that may be specified in the
guarantee or a related agreement; or
(B) 30 days from the date of the demand.
(2) If no existing default.--The Secretary or
Administrator is not required to make payment under
this subsection if, within the appropriate period under
paragraph (1), the Secretary or Administrator finds
that the obligor was not in default or that the default
was remedied before the demand.
(c) Assumption of Rights and Obligations Before Demand.--An
obligee or the obligee's agent may not demand payment under
this section if the Secretary or Administrator, before the
demand and on terms that may be provided in the obligation or a
related agreement, has assumed the obligor's rights and duties
under the obligation and any related agreement and made any
payment in default. However, the guarantee of the obligation
remains in effect after the Secretary's or Administrator's
assumption.
Sec. 53722. Actions by Secretary or Administrator
(a) General Authority.--On default under an obligation or
related agreement between the Secretary or Administrator and
the obligor, the Secretary or Administrator, on terms that may
be provided in the obligation or agreement, may--
(1) assume the obligor's rights and duties under the
obligation or agreement, make any payment in default,
and notify the obligee or the obligee's agent of the
default and the Secretary's or Administrator's
assumption; or
(2) notify the obligee or the obligee's agent of the
default.
(b) Demands by Obligees.--
(1) Demand.--If the Secretary or Administrator
proceeds under subsection (a)(2), the obligee or the
obligee's agent may demand that the Secretary or
Administrator pay the unpaid principal amount of the
obligation and the unpaid interest on the obligation.
The demand must be made within the earlier of--
(A) a period that may be specified in the
guarantee or a related agreement; or
(B) 60 days from the date of the Secretary's
or Administrator's notice.
(2) Payment.--If a demand is made under paragraph
(1), the Secretary or Administrator shall pay to the
obligee or the obligee's agent the unpaid principal
amount of the obligation and the unpaid interest on the
obligation to the date of payment. Payment shall be
made within the earlier of--
(A) a period that may be specified in the
guarantee or a related agreement; or
(B) 30 days from the date of the demand.
(c) Continued Effect of Guarantee.--A guarantee of an
obligation remains in effect after an assumption of the
obligation by the Secretary or Administrator.
(d) Additional Responses.--If there is a default on an
obligation, the Secretary or Administrator shall conduct
operations under this chapter in a manner that--
(1) maximizes the net present value return from the
sale or disposition of assets associated with the
obligation, including prompt referral to the Attorney
General for collection as appropriate;
(2) minimizes the amount of any loss realized in the
resolution of the guarantee;
(3) ensures adequate competition and fair and
consistent treatment of offerors; and
(4) requires appraisal of assets by an independent
appraiser.
Sec. 53723. Payments by Secretary or Administrator and issuance of
obligations
(a) Cash Payment.--Amounts required to be paid by the
Secretary or Administrator under section 53721 or 53722 of this
title shall be paid in cash.
(b) Issuance of Obligations.--If amounts in the appropriate
account under section 53717 of this title are not sufficient to
make a payment required under section 53721 or 53722 of this
title, the Secretary or Administrator may issue obligations to
the Secretary of the Treasury. The Secretary or Administrator,
with the approval of the Secretary of the Treasury, shall
prescribe the form, denomination, maturity, and other terms
(except the interest rate) of the obligations. The Secretary of
the Treasury shall set the interest rate for the obligations,
considering the current average market yield on outstanding
marketable obligations of the United States Government of
comparable maturities during the month before the obligations
are issued.
(c) Purchase of Obligations.--The Secretary of the Treasury
shall purchase the obligations issued under this section. To
purchase the obligations, the Secretary of the Treasury may use
as a public debt transaction the proceeds from the sale of
securities issued under chapter 31 of title 31. The purposes
for which securities may be issued under that chapter are
extended to include the purchase of obligations under this
subsection. The Secretary of the Treasury may sell obligations
purchased under this section. A redemption, purchase, or sale
of the obligations by the Secretary of the Treasury is a public
debt transaction of the Government.
(d) Deposits and Redemptions.--The Secretary or Administrator
shall deposit amounts borrowed under this section in the
appropriate account under section 53717 of this title and make
redemptions of the obligations from that account.
Sec. 53724. Rights to secured property
(a) Acquisition of Security Rights.--When the Secretary or
Administrator makes a payment on, or assumes, an obligation
under section 53721 or 53722 of this title, the Secretary or
Administrator acquires the rights under the security agreement
with the obligor in the security held by the Secretary or
Administrator to guarantee the obligation.
(b) Use and Disposition of Secured Property.--Notwithstanding
any other law relating to the acquisition, handling, or
disposal of property by the United States Government, the
Secretary or Administrator has the right, in the Secretary's or
Administrator's discretion, to complete, reconstruct,
recondition, renovate, repair, maintain, operate, charter, or
sell any property acquired under a security agreement with an
obligor, or to place a vessel so acquired in the National
Defense Reserve Fleet. The terms of a sale under this
subsection shall be as approved by the Secretary or
Administrator.
Sec. 53725. Actions against obligor
(a) In General.--For a default under a guaranteed obligation
or related agreement, the Secretary or Administrator may take
any action against the obligor or another liable party that the
Secretary or Administrator considers necessary to protect the
interests of the United States Government. A civil action may
be brought in the name of the United States or the obligee. The
obligee shall make available to the Government all records and
evidence necessary to prosecute the action.
(b) Title, Possession, and Purchase.--
(1) In general.--The Secretary or Administrator may--
(A) accept a conveyance of title to and
possession of property from the obligor or
another party liable to the Secretary or
Administrator; and
(B) purchase the property for an amount not
greater than the unpaid principal amount of the
obligation and interest thereon.
(2) Payment of excess.--If, through the sale of
property, the Secretary or Administrator receives an
amount of cash greater than the unpaid principal amount
of the obligation, the unpaid interest on the
obligation, and the expenses of collecting those
amounts, the Secretary or Administrator shall pay the
excess to the obligor.
SUBCHAPTER III--PARTICULAR PROJECTS
Sec. 53731. Commercial demonstration ocean thermal energy conversion
facilities and plantships
(a) In General.--Under subchapter I of this chapter, the
Secretary Administrator may guarantee or make a commitment to
guarantee the payment of the principal of and interest on an
obligation that aids in financing (including reimbursement of
an obligor for expenditures previously made for) the
construction, reconstruction, or reconditioning of a commercial
demonstration ocean thermal energy conversion facility or
plantship. This section may be used to guarantee obligations
for a total of not more than 5 separate facilities and
plantships or a demonstrated 400 megawatt capacity, whichever
comes first.
(b) Applicability of Other Provisions.--Except as otherwise
provided in this section, a guarantee or commitment to
guarantee under this section is subject to all the provisions
applicable to a guarantee or commitment to guarantee under
subchapter I of this chapter.
(c) Economic Soundness.--The required determination of
economic soundness under section 53708 of this title applies to
a guarantee or commitment to guarantee for that portion of a
facility or plantship not to be supported with appropriated
Federal funds.
(d) Reasonableness of Risk.--A guarantee or commitment to
guarantee may not be made under this section unless the
Secretary of Energy, in consultation with the Secretary
Administrator, certifies to the Secretary Administrator that,
for the facility or plantship for which the guarantee or
commitment to guarantee is sought, there is sufficient
guarantee of performance and payment to lower the risk to the
United States Government to a reasonable level. In deciding
whether to issue such a certification, the Secretary of Energy
shall consider--
(1) the successful demonstration of the technology to
be used in the facility at a scale sufficient to
establish the likelihood of technical and economic
viability in the proposed market; and
(2) the need of the United States to develop new and
renewable sources of energy and the benefits to be
realized from the construction and successful operation
of the facility or plantship.
(e) Amount of Obligation.--The total principal amount of an
obligation guaranteed under this section may not exceed 87.5
percent of--
(1) the actual cost or depreciated actual cost of the
facility or plantship; or
(2) if the facility or plantship is supported with
appropriated Federal funds, the total principal amount
of that portion of the actual cost or depreciated
actual cost for which the obligor is obligated to
secure financing under the agreement between the
obligor and the Department of Energy or other Federal
agency.
(f) OTEC Demonstration Fund.--
(1) In general.--There is a special subaccount, known
as the OTEC Demonstration Fund, in the account
established under section 53717(b)(1) of this title.
(2) Use and operation.--The OTEC Demonstration Fund
shall be used for obligation guarantees authorized
under this section that do not qualify under subchapter
I of this chapter. Except as otherwise provided in this
section, the OTEC Demonstration Fund shall be operated
in the same manner as the parent account. However--
(A) amounts received by the Secretary
Administrator under subchapter I of this
chapter related to guarantees or commitments to
guarantee made under this section shall be
deposited only in the OTEC Demonstration Fund;
and
(B) when obligations issued by the Secretary
Administrator under section 53723 of this title
related to the OTEC Demonstration Fund are
outstanding, any amount received by the
Secretary Administrator under subchapter I of
this chapter related to ocean thermal energy
conversion facilities or plantships shall be
deposited in the OTEC Demonstration Fund.
(3) Transfers.--Assets in the OTEC Demonstration Fund
may be transferred to the parent account when and to
the extent the balance in the OTEC Demonstration Fund
exceeds the total guarantees or commitments to
guarantee made under this section then outstanding,
plus obligations issued by the Secretary Administrator
under section 53723 of this title related to the OTEC
Demonstration Fund.
(4) Liability.--The parent account is not liable for
a guarantee or commitment to guarantee made under this
section.
(5) Maximum unpaid principal amount.--The total
unpaid principal amount of the obligations guaranteed
with the backing of the OTEC Demonstration Fund and
outstanding at any one time may not exceed
$1,650,000,000.
(g) Issuance and Payment of Obligations.--Section 53723 of
this title applies to the OTEC Demonstration Fund. However,
obligations issued by the Secretary Administrator under that
section related to the OTEC Demonstration Fund shall be payable
only from proceeds realized by the OTEC Demonstration Fund.
(h) Taxation of Interest.--Interest on an obligation
guaranteed under this section shall be included in gross income
under chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C.
ch. 1).
Sec. 53732. Eligible export vessels
(a) Applicable Terms.--The Secretary Administrator may
guarantee an obligation for an eligible export vessel in
accordance with--
(1) the terms applicable under this chapter for
vessels documented under the laws of the United States;
or
(2) other terms the Secretary Administrator
determines are more favorable than those terms and
compatible with export credit terms offered by foreign
governments for the sale of vessels built in foreign
shipyards.
(b) Interagency Council.--
(1) Establishment.--There is an interagency council
to carry out this section.
(2) Composition.--The council is composed of the
following individuals or their designees:
(A) The Secretary of Transportation
Administrator, who is the chairman of the
council.
(B) The Secretary of the Treasury.
(C) The Secretary of State.
(D) The Assistant to the President for
Economic Policy.
(E) The United States Trade Representative.
(F) The President and Chairman of the Export-
Import Bank of the United States.
(3) Functions.--The council shall--
(A) obtain information on shipbuilding loan
guarantees, direct and indirect subsidies, and
other favorable treatment of shipyards provided
by foreign governments to shipyards in
competition with United States shipyards;
(B) consult regularly with United States
shipbuilders to obtain the essential
information about international shipbuilding
competition on which to set terms for loan
guarantees under subsection (a)(2); and
(C) provide guidance to the Secretary
Administrator in establishing terms for loan
guarantees under subsection (a)(2).
(4) Annual report.--Not later than January 31 of each
year, the Secretary Administrator shall submit to
Congress a report on activities of the Secretary
Administrator under this section during the preceding
year. The report shall include--
(A) documentation of sources of information
about assistance by governments of other
countries to shipyards in those countries; and
(B) a summary of recommendations made to the
Secretary Administrator during the preceding
year about applications submitted to the
Secretary Administrator during that year for
loan guarantees to construct eligible export
vessels.
(c) Required Findings.--
(1) Benefit to shipbuilding industry.--The Secretary
Administrator may not guarantee or make a commitment to
guarantee an obligation for an eligible export vessel
unless the Secretary Administrator finds that the
construction, reconstruction, or reconditioning of the
vessel will aid in the transition of United States
shipyards to commercial activities or will preserve
shipbuilding assets that would be essential in time of
war or national emergency.
(2) Priority of documented vessels.--The Secretary
Administrator may not make a commitment to guarantee an
obligation for an eligible export vessel unless the
Secretary Administrator determines that making the
commitment will not result in denial of an economically
sound application for a commitment to guarantee an
obligation for a vessel documented under the laws of
the United States and operating in the domestic or
foreign commerce of the United States. The Secretary
Administrator has sole discretion in making the
determination. In making the determination, the
Secretary Administrator shall consider--
(A) the status and economic soundness of
pending applications for commitments to
guarantee obligations for vessels documented
under the laws of the United States that are
operating or will be operating in the domestic
or foreign commerce of the United States; and
(B) the amount of guarantee authority
available.
(d) Restriction on Transfer of Vessel.--The Secretary
Administrator may not guarantee or make a commitment to
guarantee an obligation for an eligible export vessel unless
the owner of the vessel agrees with the Secretary Administrator
that the vessel will not be transferred to a country designated
by the Secretary of Defense as a country whose interests are
hostile to the interests of the United States.
(e) Review by Secretary of Defense.--
(1) Notification.--The Secretary Administrator shall
promptly notify the Secretary of Defense of the receipt
of an application for a loan guarantee for an eligible
export vessel.
(2) Disapproval.--The Secretary of Defense, within 30
days after receiving the notice, may disapprove the
guarantee based on an assessment of the potential use
of the vessel in a manner that may harm the national
security interests of the United States. The Secretary
of Defense may not disapprove a guarantee solely
because of the type of vessel to be constructed.
(3) Delegation.--The authority of the Secretary of
Defense to disapprove a guarantee under this subsection
may be delegated only to a civilian officer of the
Department of Defense appointed by the President by and
with the advice and consent of the Senate.
(4) Prohibition.--The Secretary Administrator may not
make a loan guarantee disapproved by the Secretary of
Defense under this subsection.
(f) Expiration of Authority.--The Secretary Administrator may
not issue a commitment to guarantee an obligation for an
eligible export vessel under this chapter after the last date
on which such a commitment may be issued under any treaty or
convention entered into after November 30, 1993, that prohibits
guarantee of such an obligation.
Sec. 53733. Shipyard modernization and improvement
(a) Definitions.--In this section:
(1) Advanced shipbuilding technology.--The term
``advanced shipbuilding technology'' includes--
(A) numerically controlled machine tools,
robots, automated process control equipment,
computerized flexible manufacturing systems,
associated computer software, and other
technology for improving shipbuilding and
related industrial production that advance the
state-of-the-art; and
(B) novel techniques and processes designed
to improve shipbuilding quality, productivity,
and practice, and to promote sustainable
development, including engineering design,
quality assurance, concurrent engineering,
continuous process production technology,
energy efficiency, waste minimization, design
for recyclability or parts reuse, inventory
management, upgraded worker skills, and
communications with customers and suppliers.
(2) General shipyard facility.--The term ``general
shipyard facility'' means--
(A) for operations on land--
(i) a structure or appurtenance
thereto designed for the construction,
reconstruction, repair, rehabilitation,
or refurbishment of a vessel, including
a graving dock, building way, ship
lift, wharf, or pier crane;
(ii) the land necessary for the
structure or appurtenance; and
(iii) equipment that is for use with
the structure or appurtenance and that
is necessary for performing a function
referred to in clause (i); and
(B) for operations not on land, a vessel,
floating drydock, or barge built in the United
States and used for, equipped to be used for,
or of a type normally used for, performing a
function referred to in subparagraph (A)(i).
(3) Modern shipbuilding technology.--The term
``modern shipbuilding technology'' means the best
available proven technology, techniques, and processes
appropriate to enhancing the productivity of shipyards.
(b) General Authority.--Under subchapter I of this chapter,
the Secretary Administrator may guarantee or make a commitment
to guarantee the payment of the principal of and interest on an
obligation for advanced shipbuilding technology and modern
shipbuilding technology of a general shipyard facility in the
United States. Only a private shipyard is eligible to receive a
guarantee.
(c) Applicability of Other Provisions.--Except as otherwise
provided in this section, a guarantee or commitment to
guarantee under this section is subject to all the provisions
applicable to a guarantee or commitment to guarantee under
subchapter I of this chapter.
(d) Amount of Obligation.--The principal amount of an
obligation guaranteed under this chapter may not exceed 87.5
percent of the actual cost of the advanced shipbuilding
technology or modern shipbuilding technology.
(e) Transfer of Amounts.--The Secretary Administrator may
accept the transfer of amounts from a department, agency, or
instrumentality of the United States Government and may use
those amounts to cover the cost (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of
making guarantees or commitments to guarantee under this
section.
Sec. 53734. Replacement of vessels because of changes in operating
standards
(a) General Authority.--Notwithstanding any other provision
of this chapter, the Secretary or Administrator, on terms the
Secretary or Administrator may prescribe, may guarantee or make
a commitment to guarantee the payment of the principal of and
interest on an obligation that aids in financing or refinancing
(including reimbursement of an obligor for expenditures
previously made for) a contract for the construction or
reconstruction of a vessel if--
(1) the vessel is designed and to be used for
commercial use in coastwise, intercoastal, or foreign
trade;
(2) the construction or reconstruction is necessary
to replace a vessel that cannot continue to be operated
because of a change required by law in the standards
for the operation of vessels, and the applicant for the
guarantee or commitment would not otherwise legally be
able to continue operating vessels in the trades in
which the applicant operated vessels before the change;
(3) the applicant is presently engaged in
transporting cargoes in vessels of the type and class
that will be constructed or reconstructed under this
section and agrees to employ vessels constructed or
reconstructed under this section as replacements only
for vessels made obsolete by the change in operating
standards;
(4) the capacity of the vessels to be constructed or
reconstructed under this section will not increase the
cargo carrying capacity of the vessels being replaced;
(5) the Secretary or Administrator has not determined
that the market demand for the vessel over its useful
life will diminish so as to make granting the guarantee
fiduciarily imprudent;
(6) the vessel, if to be reconstructed, will have a
useful life of at least 15 years after the
reconstruction; and
(7) the Secretary or Administrator has considered the
criteria specified in section 53708(a)(3)-(5) of this
title.
(b) Term and Amount of Obligation.--
(1) Term.--The term of an obligation guaranteed under
this section may not exceed 25 years.
(2) Amount.--The amount of an obligation guaranteed
under this section may not exceed 87.5 percent of the
actual cost or depreciated actual cost to the applicant
for the construction or reconstruction of the vessel.
The Secretary or Administrator may not establish a
percentage under this paragraph that is to be applied
uniformly to all guarantees or commitments to guarantee
made under this section.
(c) Applicability of Other Provisions.--A guarantee or
commitment to guarantee under this section is also subject to
sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) and
(e), 53709(a), 53710(a)(1), (2), and (4) and (c), 53711(a),
53713, 53714, 53717, and 53721-53725 of this title.
(d) Security Against Default.--The Secretary or Administrator
shall require by regulation that an applicant under this
section provide adequate security against default.
(e) Guarantee Fees.--The Secretary or Administrator may
establish a fee for the guarantee of an obligation under this
section that is in addition to the fee established under
section 53714 of this title. The fee may be--
(1) an annual fee of not more than an additional 1
percent added to the fee established under section
53714 of this title; or
(2) a fee based on the amount of the obligation
versus the percentage of the obligor's fleet being
replaced by vessels constructed or reconstructed under
this section.
Sec. 53735. Fisheries financing and capacity reduction
(a) Definition.--In this section, the term ``program'' means
a fishing capacity reduction program established under section
312 of the Magnuson-Stevens Fishery Conservation and Management
Act (16 U.S.C. 1861a).
(b) Guarantee Authority.--The Secretary may guarantee the
repayment of debt obligations issued by entities under this
section. Debt obligations to be guaranteed may be issued by any
entity that has been approved by the Secretary and has agreed
with the Secretary to conditions the Secretary considers
necessary for this section to achieve the objective of the
program and to protect the interest of the United States.
(c) Requirements of Obligations.--A 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
chapter, except with respect to provisions of this
chapter that by their nature cannot be applied to
obligations guaranteed under this section;
(2) have the fishing fees established under the
program paid into a separate subaccount of the fishing
capacity reduction fund established under this section;
(3) not exceed $100,000,000 in an unpaid principal
amount outstanding at any one time for a program;
(4) have such maturity (not to exceed 20 years), take
such form, and contain such conditions as the Secretary
determines necessary for the program to which they
relate;
(5) have as the exclusive source of repayment
(subject to the second sentence of subsection (d)(2))
and as the exclusive payment security, the fishing fees
established under the program; and
(6) at the discretion of the Secretary be issued in
the public market or sold to the Federal Financing
Bank.
(d) Fishing Capacity Reduction Fund.--
(1) In general.--There is a separate account in the
Treasury, known as the Fishing Capacity Reduction Fund.
Within the Fund, at least one subaccount shall be
established for each program into which shall be paid
all fishing fees established under the program and
other amounts authorized for the program.
(2) Availability of amounts.--Amounts in the Fund
shall be available, without appropriation or fiscal
year limitation, to the Secretary to pay the cost of
the program, including payments to financial
institutions to pay debt obligations incurred by
entities under this section. Funds available for this
purpose from other amounts available for the program
may also be used to pay those debt obligations.
(3) Investment.--Amounts in the Fund that are not
currently needed for the purpose of this section shall
be kept on deposit or invested in obligations of the
United States Government.
(e) Regulations.--The Secretary shall prescribe regulations
the Secretary considers necessary to carry out this section.
* * *
CHAPTER 541--MISCELLANEOUS
Sec.
54101. Assistance for small shipyards and maritime communities.
54101. Assistance for small shipyards and maritime communities
(a) Establishment of Program.--Subject to the availability of
appropriations, the Administrator of the Maritime
Administration shall establish a program to provide assistance
to State and local governments--
(1) to provide assistance in the form of grants,
loans, and loan guarantees to small shipyards for
capital improvements; and
(2) for maritime training programs in communities
whose economies are substantially related to the
maritime industry.
(b) Awards.--In providing assistance under the program, the
Administrator shall--
(1) take into account--
(A) the economic circumstances and conditions
of maritime communities; and
(B) the local, State, and regional economy in
which the communities are located; and
(2) strongly encourage State, local, and regional
efforts to promote economic development and training
that will enhance the economic viability of and quality
of life in maritime communities.
(c) Use of Funds.--Assistance provided under this section may
be used--
(1) to make capital and related improvements in small
shipyards located in or near maritime communities;
(2) to encourage, assist in, or provide training for
residents of maritime communities that will enhance the
economic viability of those communities; and
(3) for such other purposes as the Administrator
determines to be consistent with and supplemental to
such activities.
(d) Prohibited Uses.--Grants awarded under this section may
not be used to construct buildings or other physical facilities
or to acquire land unless such use is specifically approved by
the Administrator in support of subsection (c)(3).
(e) Matching Requirements.--
(1) Federal funding.--Except as provided in paragraph
(2), Federal funds for any eligible project under this
section shall not exceed 75 percent of the total cost
of such project.
(2) Exceptions.--
(A) Small projects.--Paragraph (1) shall not
apply to grants under this section for stand
alone projects costing not more than $25,000.
The amount under this subparagraph shall be
indexed to the consumer price index and
modified each fiscal year after the annual
publication of the consumer price index.
(B) Reduction in matching requirement.--If
the Administrator determines that a proposed
project merits support and cannot be undertaken
without a higher percentage of Federal
financial assistance, the Administrator may
award a grant for such project with a lesser
matching requirement than is described in
paragraph (1).
(f) Application.--
(1) In general.--The Administrator shall determine
who, as an eligible applicant, may submit an
application, at such time, in such form, and containing
such information and assurances as the Administrator
may require.
(2) Minimum standards for payment or reimbursement.--
Each application submitted under paragraph (1) shall
include--
(A) a comprehensive description of--
(i) the need for the project;
(ii) the methodology for implementing
the project; and
(iii) any existing programs or
arrangements that can be used to
supplement or leverage assistance under
the program.
(3) Procedural safeguards.--The Administrator, in
consultation with the Office of the Inspector General,
shall issue guidelines to establish appropriate
accounting, reporting, and review procedures to ensure
that--
(A) grant funds are used for the purposes for
which they were made available;
(B) grantees have properly accounted for all
expenditures of grant funds; and
(C) grant funds not used for such purposes
and amounts not obligated or expended are
returned.
(4) Project approval required.--The Administrator may
not award a grant under this section unless the
Administrator determines that--
(A) sufficient funding is available to meet
the matching requirements of subsection (e);
(B) the project will be completed without
unreasonable delay; and
(C) the recipient has authority to carry out
the proposed project.
(g) Audits and Examinations.--All grantees under this section
shall maintain such records as the Administrator may require
and make such records available for review and audit by the
Administrator.
(h) Small Shipyard Defined.--In this section, the term
``small shipyard'' means a shipyard that--
(1) is a small business concern (within the meaning
of section 3 of the Small Business Act (15 U.S.C.
632)); and
(2) does not have more than 600 employees.
(i) Authorization of Appropriations.--There are authorized to
be appropriated to the Administrator of the Maritime
Administration for each of fiscal years 2006 through 2010 to
carry out this section--
(1) $5,000,000 for training grants; and
(2) $25,000,000 for capital and related improvement
grants.
Part D--Promotional Programs
CHAPTER 551--COASTWISE TRADE
Sec.
55110. Transportation of valueless material or dredged material.
* * *
Sec. 55101. Application of coastwise laws
(a) In General.--Except as provided in subsection (b), the
coastwise laws apply to the United States, including the island
territories and possessions of the United States.
(b) Exceptions.--The coastwise laws do not apply to--
(1) American Samoa;
(2) the Northern Mariana Islands, except as provided
in section 502(b) of the Covenant To Establish a
Commonwealth of the Northern Mariana Islands in
Political Union With the United States of America (48
U.S.C. 1801 note); or
(3) Canton Island until the President declares by
proclamation that the coastwise laws apply to Canton
Island; or
(4) (3) the Virgin Islands until the President
declares by proclamation that the coastwise laws apply
to the Virgin Islands.
* * *
Sec. 55105. Transportation of hazardous waste
* * *
(b) Nonapplication to Certain Foreign Vessels.--
* * *
(3) Inspection.--A vessel described in paragraph (1)
shall be inspected by the Coast Guard, regardless of
whether inspected by the nation in which it is
registered. The inspection shall be the same as would
be required of a vessel of the United States, including
drydock inspection and internal examination of tanks
and void spaces. The inspection may be made
concurrently with an inspection by that nation or
within one year after the initial issuance or next
scheduled issuance of the Safety of Life at Sea Safety
Construction Certificate. In making the inspection, the
Coast Guard shall refer to the condition of the hull
and superstructure established by the initial foreign
certification as the basis for evaluating the current
condition of the hull and superstructure. The Coast
Guard shall allow the substitution of fittings,
material, apparatus, equipment, and appliances
different from those required for vessels of the United
States if satisfied they are equivalent and at least as
effective as those required for vessels of the United
States. A satisfactory inspection under this paragraph
shall be certified in writing by the Secretary of the
department in which the Coast Guard is operating
Secretary of Homeland Security.
* * *
Sec. 55110. Transportation of valueless material or dredged material
* * *
Subtitle VI--Clearance, Tonnage Taxes, and Duties
* * *
CHAPTER 603--TONNAGE TAXES AND LIGHT MONEY
* * *
Sec. 60301. Regular tonnage taxes
(a) Lower Rate.--A tax is imposed at the rate of 2 cents per
ton (but not more than a total of 10 cents per ton per year)
4.5 cents per ton, not to exceed a total of 22.5 cents per ton
per year, for fiscal years 2006 through 2010, and 2 cents per
ton, not to exceed a total of 10 cents per ton per year, for
each fiscal year thereafter, at each entry in a port of the
United States of--
* * *
(b) Higher Rate.--A tax is imposed at the rate of 6 cents per
ton (but not more than a total of 30 cents per ton per year)
13.5 cents per ton, not to exceed a total of 67.5 cents per ton
per year, for fiscal years 2006 through 2010, and 6 cents per
ton, not to exceed a total of 30 cents per ton per year, for
each fiscal year thereafter, on a vessel at each entry in a
port of the United States from a foreign port or place not
named in subsection (a)(1).
* * *
Subtitle VII--Security and Drug Enforcement
* * *
CHAPTER 703--MARITIME SECURITY
* * *
Sec. 70306. Report on terrorist threats
(a) Content.--Not later than February 28 of each year, the
Secretary shall submit a report The Secretary shall submit an
annual report to Congress on the threat from acts of terrorism
to United States ports and vessels operating from those ports.
The Secretary shall include a description of activities
undertaken under title I of the Maritime Transportation
Security Act of 2002 (Public Law 107-295, 116 Stat. 2066) and
an analysis of the effect of those activities on port security
against acts of terrorism.
* * *
CHAPTER 705--MARITIME DRUG LAW ENFORCEMENT
* * *
Sec. 70502. Definitions
* * *
(d) Vessel Without Nationality.--
* * *
(2) Verification or denial.--A claim of registry
under paragraph (1)(A) or (C) may be verified or denied
by radio, telephone, or similar oral or electronic
means. The denial of such a claim is proved
conclusively by certification of the Secretary of State
or the Secretary's designee.
(2) Response to claim of registry.--The response of a
foreign nation to a claim of registry under paragraph
(1)(A) or (C) may be made by radio, telephone, or
similar oral or electronic means, and is proved
conclusively by certification of the Secretary of State
or the Secretary's designee.
* * *
Public Law 109-304
SEC. 9. SUBTITLE VI OF TITLE 46.
* * *
(a) Redesignation.--Title 46, United States Code, is amended
by redesignating subtitle VI as subtitle VII.
* * *
SEC. 15. ADDITIONAL AMENDMENTS TO TITLE 46.
* * *
Title 46, United States Code, is amended as follows:
* * *
(10) In section 3205(d), strike ``Secretary of the
Treasury shall withhold or revoke the clearance
required by section 4197 of the Revised Statutes (46
App. U.S.C. 46 U.S.C. App. 91)'' and substitute
``Secretary of Homeland Security shall withhold or
revoke the clearance required by section 60105 of this
title''.
* * *
(21) In section 6101, redesignate the second
subsection (g) and subsection (h) as subsections (h)
and (i), respectively.
* * *
(30) In section 31325(b)(3)(B), strike ``section 9 or
37 of the Shipping Act, 1936 1916 (46 App. U.S.C. 808,
835)'' and substitute ``section 56101 or 56102 of this
title''.
* * *
(33)(A) Sections 70118 and 70119, as added by section
801(a) of the Coast Guard and Maritime Transportation
Act of 2004 (Public Law 108-293, 118 Stat. 1078), are
redesignated as sections 70117 and 70118, respectively,
and moved to appear immediately after section 70116 of
title 46, United States Code.
(B) Sections 70117 and 70118, as added by section
802(a)(2) of such Act, are redesignated as sections
70120 and 70121, respectively, and moved to appear
immediately after section 70119 of title 46, United
States Code.
(C) In section 70120(a) (as redesignated by
subparagraph (B)), strike ``section 70120'' and
substitute ``section 70119''.
(D) In section 70121(a) (as redesignated by
subparagraph (B))--
(i) strike ``section 70120'' and substitute
``section 70119''; and
* * *
SEC. 16. RECREATIONAL BOATING SAFETY TECHNICAL AMENDMENTS.
* * *
(c) Cross References.--
* * *
(2) Section 9504(c) of the Internal Revenue Code of
1986 (26 U.S.C. 9504(c)) is amended by striking
``section 13106'' and substituting ``section 13107''.
* * *
SEC. 19. REPEALS.
* * *
Statutes at Large
----------------------------------------------------------------------------------------------------------------
Statutes at Large U.S. Code (46
Chapter or -------------------------- App. unless
Date Public Law Section otherwise
Volume Page specified)
----------------------------------------------------------------------------------------------------------------
1936
June 29 858 1111 1113............. ...... ................ 1279f
............ 1112 1114............. ...... ................ 1279g
----------------------------------------------------------------------------------------------------------------
* * *
National Defense Authorization Act for Fiscal Year 2006 (Public Law
109-163)
SEC. 515. REDESIGNATION OF THE NAVAL RESERVE AS THE NAVY RESERVE.
(g) Conforming Amendments to Other Laws.--
* * *
(2) The Merchant Marine Act, 1936 is amended--
(A) by striking ``Naval Reserve'' each place
it appears in sections 301(b) (46 U.S.C. App.
1131(b)), 1303 (46 U.S.C. App. 1295b), and 1304
(46 U.S.C. App. 1295c) and inserting ``Navy
Reserve''; and
(B) by striking ``Naval Reserve'' in sections
1303(c) and 1304(h) and inserting ``Navy
Reserve'':
* * *
SEC. 3502. PAYMENTS FOR STATE AND REGIONAL MARITIME ACADEMIES.
(a) Annual Payment.--Section 1304(d)(1)(C)(ii) of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(d)(1)(C)(ii))
is amended by striking ``$200,000'' and inserting ``$300,000
for fiscal year 2006, $400,000 for fiscal year 2007, and
$500,000 for fiscal year 2008 and each fiscal year
thereafter''.
(b) School Ship Fuel Payment.--Section 1304(c)(2) of the
Merchant Marine Act, 1936 (46 App. U.S.C. 1295c(c)(2)) is
amended--
(1) by striking ``The Secretary may pay to any State
maritime academy'' and inserting ``(A) The Secretary
shall, subject to the availability of appropriations,
pay to each State maritime academy''; and
(2) by adding at the end the following:
``(B) The amount of the payment to a State
maritime academy under this paragraph shall not
exceed--
``(i) $100,000 for fiscal year 2006;
``(ii) $200,000 for fiscal year 2007;
and
``(iii) $300,000 for fiscal year 2008
and each fiscal year thereafter.''.
* * *
SEC. 3507. TRANSFER OF AUTHORITY FOR TITLE XI NON-FISHING LOAN
GUARANTEE DECISIONS TO MARITIME ADMINISTRATION.
(a) In General.--Title XI of the Merchant Marine Act, 1936
(46 U.S.C. App. 1271 et seq.), as amended by subsection (d) of
this section, is amended--
(1) by striking ``Secretary'' each place it appears
and inserting ``Secretary or Administrator'' in--
(A) section 1101(c), (f), and (g);
(B) section 1102;
(C) section 1103(a), (b), (c), (e), (g), and
(h);
(D) section 1104A, except in--
(i) subsection (b)(7) and the
undesignated paragraph that follows;
(ii) paragraphs (1), (2), (3)(B), and
(4) of subsection (d);
(iii) subsection (e)(2)(F) the second
place it appears;
(iv) subsection (j); and
(v) subsection (n)(1) the first place
it appears;
(E) section 1104B;
(F) section 1105(a), (b), (c), and (e);
(G) section 1105(d) the first, second, third,
fifth, and last places it appears; and
(H) sections 1108, 1109 (except the second
place it appears in subsection (c)), and 1113
(as redesignated by subsection (d) of this
section);
(2) by striking ``Secretary'' and inserting
``Administrator'' in--
(A) section 1103(i);
(B) section 1103(j) the first place it
appears;
(C) section 1104A(b)(7) each place it appears
but not in the undesignated paragraph that
follows subsection (b)(7);
(D) section 1104A(d)(1)(A) each place it
appears except the first;
(E) section 1104A(d)(3) each place it appears
except in subparagraph (B);
(F) section 1104A(j)(1) the first, fifth, and
seventh places it appears;
(G) section 1104A(n) each place it appears
except the first;
(H) section 1110 each place it appears except
the first and fourth places it appears in
subsection (b);
(I) section 1111(a) and (b)(2) each place it
appears;
(J) section 1111(b)(4) each place it appears
except the first; and
(K) section 1112 each place it appears; and
(3) by striking ``Secretary's'' in sections
1108(g)(1) and 1109(d)(3) and inserting ``Secretary's
or Administrator's''.
(b) Additional and Conforming Title XI Changes.--
(1) Section 1101 of the Merchant Marine Act, 1936 (46
U.S.C. App. 1271) is amended--
(A) by striking ``title,'' and all that
follows in subsection (n) and inserting
``title.''; and
(B) by adding at the end the following:
``(p) The term `Administrator' means the Administrator of the
Maritime Administration.''.
(2) Section 1103(j) of such Act (46 U.S.C. App.
1273(j)) is amended by adding at the end the following:
``The Secretary of Defense shall determine whether a vessel
satisfies paragraphs (1) and (2) by not later than 30 days
after receipt of a request from the Administrator for such a
determination.''.
(3) Section 1104A(d) of such Act (46 U.S.C. App.
1274(d)) is amended--
(A) by striking ``Secretary of
Transportation'' in paragraphs (1)(A) and
(3)(B) and inserting ``Administrator'';
(B) by striking ``the waiver'' in paragraph
(4)(B) and inserting ``if deemed necessary by
the Secretary or Administrator, the waiver'';
(C) by striking ``the increased'' in
paragraph (4)(B) and inserting ``any
significant increase in''.
(4) Section 1104A(f) of such Act (46 U.S.C. App.
1273(f)) is amended--
(A) by striking ``financial structures, or
other risk factors identified by the Secretary
or Administrator.'' in paragraph (2), as
amended by subsection (a) of this section, and
inserting ``or financial structures.'';
(B) by striking ``financial structures, or
other risk factors identified by the Secretary
or Administrator.'' in paragraph (3), as
amended by subsection (a) of this section, and
inserting ``or financial structures.''; and
(C) by adding at the end the following:
``(5) A third party independent analysis conducted
under paragraph (2) shall be performed by a private
sector expert in assessing such risk factors who is
selected by the Administrator.''.
(5) Section 1104A(j)(2) of such Act (46 U.S.C. App.
1273(j)(2)) is amended by striking ``The Secretary of
Transportation'' and inserting ``The Administrator''.
(6) Section 1104A(m) of such Act (46 U.S.C. App.
1273(m)) is amended by striking the last sentence and
inserting ``If the Secretary or Administrator has
waived a requirement under section 1104A(d), the loan
agreement shall include requirements for additional
payments, collateral, or equity contributions to meet
such waived requirement upon the occurrence of
verifiable conditions indicating that the obligor's
financial condition enables the obligor to meet the
waived requirement.''.
(7) Section 1104A(n)(1) of such Act (46 U.S.C. App.
1273(n)(1)) is amended by striking ``The Secretary of
Transportation'' and inserting ``The Administrator''.
(8) Section 1111 of such Act (46 U.S.C. 1279(f)) is
amended by striking ``Secretary of Transportation''
each place it appears and inserting ``Administrator''.
(c) Conforming Changes in Other Statutes.--
(1) Section 401(a) of the Ocean Shipping Reform Act
of 1998 (46 U.S.C. App. 1273a(a)) is amended by
striking ``Secretary of Transportation'' and inserting
``Administrator of the Maritime Administration''.
(2) Section 101 of Public Law 85-469 (46 U.S.C. 1280)
is amended by inserting ``or the Administrator of the
Maritime Administration'' after ``Secretary''.
(3) Section 3527 of the Maritime Security Act of 2003
(46 U.S.C. App. 1280b) is amended by striking
``Secretary of Transportation'' and inserting
``Administrator of the Maritime Administration''.
(4) Section 3528 of the Maritime Security Act of 2003
(46 U.S.C. App. 1271 note) is repealed.
(d) Technical Correction of Section Numbering.--Title XI of
the Merchant Marine Act, 1936 (46 U.S.C. App. 1271 et seq.) is
amended by redesignating the second sections 1111 and 1112, as
added by section 303 of the Sustainable Fisheries Act (Public
Law 104-297; 110 Stat. 3616), as sections 1113 and 1114,
respectively.
* * *
SEC. 3509. UNITED STATES MARITIME SERVICE.
Section 1306(a) of the Maritime Education and Training Act of
1980 (46 U.S.C. App. 1295e(a)), is amended by inserting ``and
to perform functions to assist the United States merchant
marine, as determined necessary by the Secretary,'' after
``United States'' the second place it appears.
SEC. 3510. AWARDS AND MEDALS.
Section 5(c) of the Merchant Marine Decorations and Medals
Act (46 U.S.C. App. 2004(c)) is amended by striking ``provide
at cost, or authorize for the manufacture and sale at
reasonable prices by private persons--'' and inserting
``provide--''.
* * *
Deficit Reduction Act of 2005 (Public Law 109-171)
SEC. 4001. EXTENSION OF VESSEL TONNAGE DUTIES.
(a) Extension of Duties.--Section 36 of the Act entitled ``An
Act to provide revenue, equalize duties and encourage the
industries of the United States, and for other purposes'',
approved August 5, 1909 (36 Stat. 111; 46 U.S.C. App. 121), is
amended--
(1) by striking ``9 cents per ton'' and all that
follows through ``2002,'' the first place it appears
and inserting ``4.5 cents per ton, not to exceed in the
aggregate 22.5 cents per ton in any one year, for
fiscal years 2006 through 2010,''; and
(2) by striking ``27 cents per ton'' and all that
follows through ``2002,'' and inserting ``13.5 cents
per ton, not to exceed 67.5 cents per ton per annum,
for fiscal years 2006 through 2010,''.
(b) Conforming Amendment.--The Act entitled ``An Act
concerning tonnage duties on vessels entering otherwise than by
sea'', approved March 8, 1910 (36 Stat. 234; 46 U.S.C. App.
132), is amended by striking ``9 cents per ton'' and all that
follows through ``and 2 cents'' and inserting ``4.5 cents per
ton, not to exceed in the aggregate 22.5 cents per ton in any
one year, for fiscal years 2006 through 2010, and 2 cents''.
* * *
Coast Guard and Maritime Transportation Act of 2006 (Public Law 109-
241)
SEC. 303. CERTIFICATION OF VESSEL NATIONALITY IN DRUG SMUGGLING CASES.
Section 3(c)(2) of the Maritime Drug Law Enforcement Act (46
U.S.C. App. 1903(c)(2)) is amended by striking the last two
sentences and inserting the following: ``The response of a
foreign nation to a claim of registry under subparagraph (A) or
(C) may be made by radio, telephone, or similar oral or
electronic means, and is conclusively proved by certification
of the Secretary of State or the Secretary's designee.''.
* * *
SEC. 307. TRAINING OF CADETS AT UNITED STATES MERCHANT MARINE ACADEMY.
Section 1303(f) of the Merchant Marine Act, 1936 (46 App.
U.S.C. 1295b(f)) is amended--
(1) by striking ``and'' at the end of paragraph (2);
(2) by striking the period at the end of paragraph
(3) and inserting ``; and''; and
(3) by adding at the end the following:
``(4) on any other vessel considered by the Secretary
to be necessary or appropriate or in the national
interest.''.
SEC. 308. REPORTS FROM MORTGAGEES OF VESSELS.
Section 12120 of title 46, United States Code, is amended by
striking ``owners, masters, and charterers'' and inserting
``owners, masters, charterers, and mortgagees''.
* * *
SEC. 310. SETTING, RELOCATING, AND RECOVERING ANCHORS.
Section 12105 of title 46, United States Code, is amended by
adding at the end the following:
``(c)(1) Only a vessel for which a certificate of
documentation with a registry endorsement is issued may engage
in--
``(A) the setting, relocation, or recovery of the
anchors or other mooring equipment of a mobile offshore
drilling unit that is located over the outer
Continental Shelf (as defined in section 2(a) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1331(a)));
or
``(B) the transportation of merchandise or personnel
to or from a point in the United States from or to a
mobile offshore drilling unit located over the outer
Continental Shelf that is not attached to the seabed.
``(2) Nothing in paragraph (1) authorizes the employment in
the coastwise trade of a vessel that does not meet the
requirements of section 12106 of this title.''.
* * *
SEC. 901. MISCELLANEOUS TECHNICAL CORRECTIONS.
* * *
(q) Acts of Terrorism Report.--Section 905 of the Omnibus
Diplomatic Security and Antiterrorism Act of 1986 (46 U.S.C.
App. 1802; 100 Stat. 890) is amended by striking ``Not later
than February 28, 1987, and annually thereafter, the Secretary
of Transportation shall report'' and inserting ``The Secretary
of the department in which the Coast Guard is operating shall
report annually''.
* * *
SEC. 902. CORRECTION OF REFERENCES TO SECRETARY OF TRANSPORTATION AND
DEPARTMENT OF TRANSPORTATION; RELATED MATTERS.
* * *
(o) Merchant Marine Act, 1920.--Section 27 of the Merchant
Marine Act, 1920 (46 U.S.C. App. 883) is amended in the matter
following the ninth proviso (pertaining to transportation of a
foreign-flag incineration vessel) by striking ``Satisfactory
inspection shall be certified in writing by the Secretary of
Transportation'' and inserting ``Satisfactory inspection shall
be certified, in writing, by the Secretary of Homeland
Security.''.
* * *
John Warner National Defense Authorization Act for Fiscal Year 2007
(Public Law 109-364)
SEC. 1017. OBTAINING CARRIAGE BY VESSEL; CRITERION REGARDING OVERHAUL,
REPAIR, AND MANTENANCE OF VESSELS IN THE UNITED
STATES
* * *
(b) Covered Vessels.--A vessel is a covered vessel of an
offeror under this section if the vessel is--
(1) owned, operated, or controlled by the offeror;
and
(2) qualified to engage in the carriage of cargo in
the coastwise or non-contiguous trade under section 27
of the Merchant Marine Act, 1920 (46 U.S.C. 883),
section 12106 of title 46, United States Code, and
section 2 of the Shipping Act, 1916 (46 U.S.C. App.
802) sections 12112, 50501, and 55102 of title 46,
United States Code.
* * *
SEC. 3505. UNITED STATES MERCHANT MARINE ACADEMY GRADUATES: SERVICE
REQUIREMENTS.
(a) Alternate Service.--Section 1303(e) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1295b(e)) is amended by adding
at the end the following:
``(6)(A) An individual who for the 5-year period
following graduation from the Academy, serves as a
commissioned officer on active duty in an armed force
of the United States or as a commissioned officer of
the National Oceanic and Atmospheric Administration or
the Public Health Service shall be excused from the
requirements of subparagraphs (C), (D), and (E) of
paragraph (1).
``(B) The Secretary may modify or waive any of the
terms and conditions set forth in paragraph (1) through
the imposition of alternative service requirements.''.
(b) Application.--Paragraph (6) of section 1303(e) of the
Merchant Marine Act, 1936 (46 U.S.C. App. 1295b(e)), as added
by this section, applies only to an individual who enrolls as a
cadet at the United States Merchant Marine Academy, and signs
an agreement under paragraph (1) of that section, after the
date of the enactment of this Act.
SEC. 3506. UNITED STATES MERCHANT MARINE ACADEMY GRADUATES: SERVICE
OBLIGATION PERFORMANCE REPORTING REQUIREMENT.
(a) In General.--Section 1303(e) of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295b(e)) is further amended by adding at
the end the following:
``(7)(A) Subject to any otherwise applicable
restrictions on disclosure in section 552a of title 5,
United States Code, the Secretary of Defense, the
Secretary of the department in which the Coast Guard is
operating, the Administrator of the National Oceanic
and Atmospheric Administration, and the Surgeon General
of the Public Health Service--
``(i) shall report the status of obligated
service of an individual graduate of the
Academy upon request of the Secretary; and
``(ii) may, in their discretion, notify the
Secretary of any failure of the graduate to
perform the graduate's duties, either on active
duty or in the Ready Reserve component of their
respective service, or as a commissioned
officer of the National Oceanic and Atmospheric
Administration or the Public Health Service,
respectively.
``(B) A report or notice under subparagraph (A) shall
identify any graduate determined to have failed to
comply with service obligation requirements and provide
all required information as to why such graduate failed
to comply.
``(C) Upon receipt of such a report or notice, such
graduate may be considered to be in default of the
graduate's service obligations by the Secretary, and
subject to all remedies the Secretary may have with
respect to such a default.''.
(b) Application.--The amendment made by this section does not
apply with respect to an agreement entered into under section
1303(e) of the Merchant Marine Act, 1936 (46 U.S.C. 1295b(e))
before the date of the enactment of this Act.
* * *
SEC. 3508. QUALIFYING RESERVE DUTY FOR RECEIPT OF STUDENT INCENTIVE
PAYMENTS.
Section 1304(g)(2) of title XIII of the Merchant Marine Act,
1936 (46 U.S.C. App. 1295c(g)(2)) is amended to read as
follows:
``(2) Each agreement entered into under paragraph (1)
shall require the individual to accept enlisted reserve
status in the United States Naval Reserve (including
the Merchant Marine Reserve, United States Naval
Reserve) or the United States Coast Guard Reserve
before receiving any student incentive payments under
this subsection.''.
* * *
SEC. 3510. MISCELLANEOUS MARITIME ADMINISTRATION PROVISIONS.
(a) Technical Correction Regarding War Risk Insurance for
Merchant Marine Vessels.--
(1) In general.--Section 1208(a) of the Merchant
Marine Act, 1936 (46 U.S.C. App. 1288(a)) is amended--
(A) by striking ``Upon the request of the
Secretary of Transportation, the Secretary of
the Treasury may invest or reinvest all or any
part of the fund in securities of the United
States or in securities guaranteed as to
principal and interest by the United States.'';
and
(B) by inserting after ``to the credit of
such fund.'' the following: ``Payments of
return premiums, losses, settlements,
judgments, and all liabilities incurred by the
United States under this title shall be made
from such fund through the Fiscal Service of
the Department of the Treasury.''.
(2) Effective date.--The amendments made by paragraph
(1) shall be effective as if enacted by section 3502 of
the Ronald W. Reagan National Defense Authorization Act
for Fiscal Year 2005 (118 Stat. 2195).
(b) Right to Use Maritime Administration Decoration.--Section
8 of the Merchant Marine Decorations and Medals Act (46 U.S.C.
App. 2007) is amended by inserting ``or the Secretary of
Transportation,'' after ``Act,''.