Pub.L. 104-24 To direct the Secretary of the Interior to convey a fish hatchery to the State of Iowa. <> ...

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[[Page 3117]]

                      MARITIME SECURITY ACT OF 1996

[[Page 110 STAT. 3118]]

Public Law 104-239
104th Congress

                                 An Act


 
 To amend the Merchant Marine Act, 1936 to revitalize the United States-
     flag merchant marine, and for other purposes. <<NOTE: Oct. 8, 
                         1996 -  [H.R. 1350]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of <<NOTE: Maritime Security Act of 1996. National 
defense.>>  America in Congress assembled,

SECTION 1. <<NOTE: 46 USC app. 1245 note.>>  SHORT TITLE.

    This Act may be cited as the ``Maritime Security Act of 1996''.

SEC. 2. MARITIME SECURITY PROGRAM.

    Title VI of the Merchant Marine Act, 1936 (46 U.S.C. App. 1171 et 
seq.) is amended--
            (1) by striking the title heading and inserting the 
        following:

            ``Title VI--Vessel Operating Assistance Programs

         ``Subtitle A--Operating-Differential Subsidy Program'';

        and

            (2) by adding at the end the following new subtitle:

              ``Subtitle B--Maritime Security Fleet Program

                        ``establishment of fleet

    ``Sec. 651. <<NOTE: 46 USC app. 1187.>>  (a) In General.--The 
Secretary of Transportation shall establish a fleet of active, 
militarily useful, privately-owned vessels to meet national defense and 
other security requirements and maintain a United States presence in 
international commercial shipping. The Fleet shall consist of privately 
owned, United States-flag vessels for which there are in effect 
operating agreements under this subtitle, and shall be known as the 
Maritime Security Fleet.

    ``(b) Vessel Eligibility.--A vessel is eligible to be included in 
the Fleet if the vessel is self-propelled and--
            ``(1)(A) is operated by a person as an ocean common carrier;
            ``(B) whether in commercial service, on charter to the 
        Department of Defense, or in other employment, is either--
                    ``(i) a roll-on/roll-off vessel with a carrying 
                capacity of at least 80,000 square feet or 500 twenty-
                foot equivalent units; or
                    ``(ii) a lighter aboard ship vessel with a barge 
                capacity of at least 75 barges; or
            ``(C) any other type of vessel that is determined by the 
        Secretary to be suitable for use by the United States for

[[Page 110 STAT. 3119]]

        national defense or military purposes in time of war or national 
        emergency;
            ``(2)(A)(i) is a United States-documented vessel; and
            ``(ii) on the date an operating agreement covering the 
        vessel is entered into under this subtitle, is--
                    ``(I) a LASH vessel that is 25 years of age or 
                less; or
                    ``(II) any other type of vessel that is 15 years of 
                age or less;
        except that the Secretary of Transportation may waive the 
        application of clause (ii) if the Secretary, in consultation 
        with the Secretary of Defense, determines that the waiver is in 
        the national interest; or
            ``(B) it is not a United States-documented vessel, but the 
        owner of the vessel has demonstrated an intent to have the 
        vessel documented under chapter 121 of title 46, United States 
        Code, if it is included in the Fleet, and the vessel will be 
        less than 10 years of age on the date of that documentation;
            ``(3) the Secretary of Transportation determines that the 
        vessel is necessary to maintain a United States presence in 
        international commercial shipping or, after consultation with 
        the Secretary of Defense, determines that the vessel is 
        militarily useful for meeting the sealift needs of the United 
        States with respect to national emergencies; and
            ``(4) at the time an operating agreement for the vessel is 
        entered into under this subtitle, the vessel will be eligible 
        for documentation under chapter 121 of title 46, United States 
        Code.

                         ``operating agreements

    ``Sec. 652. <<NOTE: 46 USC app. 1187a.>>  (a) In General.--The 
Secretary of Transportation shall require, as a condition of including 
any vessel in the Fleet, that the owner or operator of the vessel enter 
into an operating agreement with the Secretary under this section. 
Notwithstanding subsection (g), the Secretary may enter into an 
operating agreement for, among other vessels that are eligible to be 
included in the Fleet, any vessel which continues to operate under an 
operating-differential subsidy contract under subtitle A or which is 
under charter to the Department of Defense.

    ``(b) Requirements for Operation.--An operating agreement under this 
section shall require that, during the period a vessel is operating 
under the agreement--
            ``(1) the vessel--
                    ``(A) shall be operated exclusively in the foreign 
                trade or in mixed foreign and domestic trade allowed 
                under a registry endorsement issued under section 12105 
                of title 46, United States Code, and
                    ``(B) shall not otherwise be operated in the 
                coastwise trade; and
            ``(2) the vessel shall be documented under chapter 121 of 
        title 46, United States Code.

    ``(c) Regulatory Relief.--A contractor of a vessel included in an 
operating agreement under this subtitle may operate the vessel in the 
foreign commerce of the United States without restriction, and shall not 
be subject to any requirement under section 801, 808, 809, or 810. 
Participation in the program established

[[Page 110 STAT. 3120]]

by this subtitle shall not subject a contractor to section 805 or to any 
provision of subtitle A.
    ``(d) Effectiveness and Annual Payment Requirements of Operating 
Agreements.--
            ``(1) Effectiveness.--The Secretary of Transportation may 
        enter into an operating agreement under this subtitle for fiscal 
        year 1996. The agreement shall be effective only for 1 fiscal 
        year, but shall be renewable, subject to the availability of 
        appropriations, for each subsequent fiscal year through the end 
        of fiscal year 2005.
            ``(2) Annual payment.--An operating agreement under this 
        subtitle shall require, subject to the availability of 
        appropriations and the other provisions of this section, that 
        the Secretary of Transportation pay each fiscal year to the 
        contractor, for each vessel that is covered by the operating 
        agreement, an amount equal to $2,300,000 for fiscal year 1996 
        and $2,100,000 for each fiscal year thereafter in which the 
        agreement is in effect. The amount shall be paid in equal 
        monthly installments at the end of each month. The amount shall 
        not be reduced except as provided by this section.

    ``(e) Certification Required for Payment.--As a condition of 
receiving payment under this section for a fiscal year for a vessel, the 
contractor for the vessel shall certify, in accordance with regulations 
issued by the Secretary of Transportation, that the vessel has been and 
will be operated in accordance with subsection (b)(1) for
at least 320 days in the fiscal year. Days during which the vessel is 
drydocked, surveyed, inspected, or repaired shall be considered days of 
operation for purposes of this subsection.

    ``(f) Operating Agreement is Obligation of United States 
Government.--An operating agreement under this subtitle constitutes a 
contractual obligation of the United States Government to pay the 
amounts provided for in the agreement to the extent of actual 
appropriations.
    ``(g) Limitations.--The Secretary of Transportation shall not make 
any payment under this subtitle for a vessel with respect to any days 
for which the vessel is--
            ``(1) subject to an operating-differential subsidy contract 
        under subtitle A or under a charter to the United States 
        Government, other than a charter pursuant to section 653;
            ``(2) not operated or maintained in accordance with an 
        operating agreement under this subtitle; or
            ``(3) more than 25 years of age, except that the Secretary 
        may make such payments for a LASH vessel for any day for which 
        the vessel is more than 25 years of age if that vessel--
                    ``(A) is modernized after January 1, 1994,
                    ``(B) is modernized before it is 25 years of age, 
                and
                    ``(C) is not more than 30 years of age.

    ``(h) Payments.--With respect to payments under this subtitle for a 
vessel covered by an operating agreement, the Secretary of 
Transportation--
            ``(1) except as provided in paragraph (2), shall not reduce 
        any payment for the operation of a vessel to carry military or 
        other preference cargoes under section 2631 of title 10, United 
        States Code, the Act of March 26, 1934 (46 U.S.C. App. 1241-1), 
        section 901(a), 901(b), or 901b of this Act, or any other cargo 
        preference law of the United States;

[[Page 110 STAT. 3121]]

            ``(2) shall not make any payment for any day that a vessel 
        is engaged in transporting more than 7,500 tons of civilian bulk 
        preference cargoes pursuant to section 901(a), 901(b), or 901b 
        that is bulk cargo; and
            ``(3) shall make a pro rata reduction in payment for each 
        day less than 320 in a fiscal year that a vessel covered by an 
        operating agreement is not operated in accordance with 
        subsection (b)(1), with days during which the vessel is 
        drydocked or undergoing survey, inspection, or repair considered 
        to be days on which the vessel is operated.

    ``(i) Priority for Awarding Agreements.--Subject to the availability 
of appropriations, the Secretary shall enter into operating agreements 
according to the following priority:
            ``(1) Vessels owned by citizens.--
                    ``(A) Priority.--First, for any vessel that is--
                          ``(i) owned and operated by persons who are 
                      citizens of the United States under section 2 of 
                      the Shipping Act, 1916; or
                          ``(ii) less than 10 years of age and owned and 
                      operated by a corporation that is--
                                    ``(I) eligible to document a vessel 
                                under chapter 121 of title 46, United 
                                States Code; and
                                    ``(II) affiliated with a corporation 
                                operating or managing for the Secretary 
                                of Defense other vessels documented 
                                under that chapter, or chartering other 
                                vessels to the Secretary of Defense.
                    ``(B) Limitation on number of operating 
                agreements.--The total number of operating agreements 
                that may be entered into by a person under the priority 
                in subparagraph (A)--
                          ``(i) for vessels described in subparagraph 
                      (A)(i), may not exceed the sum of--
                                    ``(I) the number of United States-
                                documented vessels the person operated 
                                in the foreign commerce of the United 
                                States (except mixed coastwise and 
                                foreign commerce) on May 17, 1995; and
                                    ``(II) the number of United States-
                                documented vessels the person chartered 
                                to the Secretary of Defense on that 
                                date; and
                          ``(ii) for vessels described in subparagraph 
                      (A)(ii), may not exceed 5 vessels.
                    ``(C) Treatment of related parties.--For purposes of 
                subparagraph (B), a related party with respect to a 
                person shall be treated as the person.
            ``(2) Other vessels owned by citizens and government 
        contractors.--To the extent that amounts are available after 
        applying paragraph (1), any vessel that is owned and operated by 
        a person who is--
                    ``(A) a citizen of the United States under section 2 
                of the Shipping Act, 1916, that has not been awarded an 
                operating agreement under the priority established under 
                paragraph (1); or
                    ``(B)(i) eligible to document a vessel under chapter 
                121 of title 46, United States Code; and
                    ``(ii) affiliated with a corporation operating or 
                managing other United States-documented vessels for the 
                Secretary

[[Page 110 STAT. 3122]]

                of Defense or chartering other vessels to the Secretary 
                of Defense.
            ``(3) Other vessels.--To the extent that amounts are 
        available after applying paragraphs (1) and (2), any other 
        eligible vessel.

    ``(j) Transfer of Operating Agreements.--A contractor under an 
operating agreement may transfer the agreement (including all rights and 
obligations under the agreement) to any person eligible to enter into 
that operating agreement under this subtitle after notification of the 
Secretary in accordance with regulations prescribed by the Secretary, 
unless the transfer is disapproved by the Secretary within 90 days after 
the date of that notification. A person to whom an operating agreement 
is transferred may receive payments from the Secretary under the 
agreement only if each vessel to be covered by the agreement after the 
transfer is an eligible vessel under section 651(b).
    ``(k) Reversion of Unused Authority.--The obligation of the 
Secretary to make payments under an operating agreement under this 
subtitle shall terminate with respect to a vessel if the contractor 
fails to engage in operation of the vessel for which such payment is 
required--
            ``(1) within one year after the effective date of the 
        operating agreement, in the case of a vessel in existence on the 
        effective date of the agreement, or
            ``(2) within 30 months after the effective date of the 
        operating agreement, in the case of a vessel to be constructed 
        after that effective date.

    ``(l) Procedure for Considering Application; Effective Date for 
Certain Vessels.--
            ``(1) Procedures.--No later than 30 days after the date of 
        the enactment of the Maritime Security Act of 1996, the 
        Secretary shall accept applications for enrollment of vessels in 
        the Fleet, and within 90 days after receipt of an application 
        for enrollment of a vessel in the Fleet, the Secretary shall 
        enter into an operating agreement with the applicant or provide 
        in writing the reason for denial of that application.
            ``(2) Effective date.--Unless an earlier date is requested 

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