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110th Congress 
 1st Session                     SENATE                          Report
                                                                110-200
_______________________________________________________________________

                                     

                                                       Calendar No. 432

            MARITIME ADMINISTRATION AUTHORITIES ACT OF 2007

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1778



                                     

                October 19, 2007.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred tenth congress
                             first session

                   DANIEL K. INOUYE, Hawaii, Chairman
                   TED STEVENS, Alaska, Vice-Chairman
JOHN D. ROCKEFELLER IV, West         JOHN McCAIN, Arizona
    Virginia                         TRENT LOTT, Mississippi
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DEMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS CARPER, Delaware              JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota
          Margaret Cummisky, Staff Director and Chief Counsel
         Lila Helms, Deputy Staff Director and Policy Director
       Jean Toal Eisen, Senior Advisor and Deputy Policy Director
     Christine Kurth, Republican Staff Director and General Counsel
                Paul J. Nagle, Republican Chief Counsel


                                                       Calendar No. 432
110th Congress                                                   Report
                                 SENATE
 1st Session                                                    110-200

======================================================================



 
            MARITIME ADMINISTRATION AUTHORITIES ACT OF 2007

                                _______
                                

                October 19, 2007.--Ordered to be printed

                                _______
                                

       Mr. Inouye, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                                 REPORT

                         [To accompany S. 1778]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1778) to authorize certain 
activities of the Maritime Administration, and for other 
purposes, having considered the same, reports favorably thereon 
with amendments and recommends that the bill (as amended) do 
pass.

                          Purpose of the Bill

  The bill would clarify the authority of the MARAD to charter 
commercial vessels to other Federal agencies; authorize the 
MARAD to operate or lease its own vessels directly while 
retaining reimbursement for their use; and permit the 
chartering of National Defense Reserve Fleet (NDRF) vessels to 
state or local governments. It also would require the MARAD to 
dispose of all ships designated as ``high priority'' under the 
agency's obsolete vessel disposal program within one year of 
their designation. ``High priority'' vessels are those that 
pose the most significant danger to the environment or have the 
highest cost to maintain. The bill would allow the MARAD to 
extend the period of time between which Ready Reserve Force 
(RRF) vessels must be activated and undergo sea trials from 24 
months to 30 months in order to align sea trial requirements 
with the Coast Guard requirements for dry-docking. In addition, 
the bill would include several technical corrections requested 
by the House Law Revision Counsel and the Administration.

                          Background and Needs

  The mission of the MARAD is to promote the development and 
maintenance of an adequate, well-balanced U.S. merchant marine, 
capable of serving as a naval and military auxiliary in time of 
war or national emergency, and sufficient to carry the Nation's 
waterborne domestic commerce and a substantial portion of its 
waterborne foreign commerce. The MARAD also seeks to ensure 
that the United States enjoys adequate shipbuilding and repair 
service, efficient ports, effective intermodal water and land 
transportation systems, and adequate reserve shipping capacity 
in times of national emergency.
  To meet its mission, the MARAD administers various U.S. 
merchant marine support programs within the Department of 
Transportation (DOT). These programs include the Maritime 
Security Program (MSP), the Title XI Maritime Loan Guarantee 
Program, the Small Shipyard and Maritime Community Assistance 
Program, the Deepwater Port Licensing Program, various cargo 
preference programs, maintenance of the RRF and the NDRF, and 
operation of the United States Merchant Marine Academy (USMMA) 
at Kings Point, New York. The MARAD has approximately 754 
employees, including RRF and USMMA staff.
  The MARAD's operations and training account funds the 
administration and staffing of the MARAD programs (other than 
the Title XI guaranteed loan program and RRF costs), the USMMA, 
State maritime school costs associated with Federal training 
ships, training courses for merchant mariners, various 
operating programs, and research and development. The MARAD 
appropriations do not include funding for cargo preference or 
RRF/NDRF maintenance funding. RRF/NDRF maintenance is funded by 
the Department of Defense (DOD) and administered by the MARAD.
  The MSP provides funded operating agreements to privately 
owned, U.S.-flagged, and U.S.-crewed vessels operating in 
international trade. This fleet is also available to support 
the DOD sustainment in a contingency. Currently, MSP is 
authorized through fiscal year 2015 and subject to a separate 
annual appropriation.
  The purpose of the Title XI Maritime Loan Guarantee Program 
is to promote the growth and modernization of the U.S. merchant 
marine and U.S. shipyards. The program enables owners of 
eligible vessels and eligible shipyards to obtain long-term 
financing with attractive terms by using the credit of the 
United States Government to guarantee commercial loans.

                         Summary of Provisions

  Several provisions of this bill would give the MARAD 
additional vessel chartering authority, including the ability 
to charter commercial vessels to other Federal agencies and 
State and local governments while obtaining reimbursement for 
their use.
  The bill would establish a priority system for the disposal 
of obsolete government vessels in the agency's Ship Disposal 
Program. Vessels that pose a significant risk to the 
environment or have high maintenance costs are to be designated 
as ``high priority'' and would be required to be disposed of 
within one year.
  The bill extends from 24 months to 30 months the period of 
time during which RRF vessels must be activated and undergo sea 
trials. This change allows the MARAD to align the sea trial 
requirement with the United States Coast Guard's (USCG) 
requirement for vessels to be dry-docked twice every five 
years. Aligning this requirement would alleviate the need for 
the MARAD to conduct sea trials out of sequence.
  The bill would include several technical corrections, which 
update the newly codified title 46, United States Code, to 
reflect amendments made in P.L. 109-304 and P.L. 109-364. 
Additionally, the bill also includes an Administration-
requested technical correction to Section 3509 of the FY 2007 
Department of Defense Authorization bill, the Large Passenger 
Ship Crew Requirements provision.

                          Legislative History

  The bill was introduced on July 12, 2007. On July 19, 2007, 
the Committee considered this bill in an executive session and 
ordered S. 1778 to be reported favorably, as amended, by voice 
vote. The Committee accepted an amendment offered by Senator 
Snowe, which limited the MARAD's vessel chartering authority 
under Section 103 to vessels that are U.S.-flagged, and an 
amendment offered by Senator Vitter, which requires the 
Administrator to develop a comprehensive review process for 
traditional and non-traditional applications submitted for the 
vessel loan guarantee program and requires the review of a 
traditional application not exceed 90 days from the date the 
application is submitted.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                                   August 24, 2007.
Hon. Daniel K. Inouye,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1778, the Maritime 
Administration Authorities Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.
S. 1778--Maritime Administration Authorities Act of 2007
    Summary: S. 1778 would amend various laws governing the 
activities of the Maritime Administration (MARAD) and would 
authorize appropriations for the agency for fiscal year 2008. 
CBO estimates that appropriation of the amounts authorized by 
the legislation for MARAD operations and for the disposal of 
obsolete vessels would result in outlays of $112 million in 
2008 and $141 million over the 2008-2012 period. Enacting S. 
1778 would have no effect on revenues or direct spending.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no cost on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1778 is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        2007      2008      2009      2010      2011      2012
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending for MARAD Operations and Ship Disposal
 Under Current Law:
    Budget Authority\1\.............................       132         0         0         0         0         0
    Estimated Outlays...............................       129        30        14         0         0         0
Proposed Changes:\2\
    Authorization Level.............................         0       141         0         0         0         0
    Estimated Outlays...............................         0       112        18        11         0         0
Spending for MARAD Operations and Ship Disposal
 Under S. 1778:
    Authorization Level\1\..........................       132       141         0         0         0         0
    Estimated Outlays...............................       129       142        32        11         0         0
----------------------------------------------------------------------------------------------------------------
\1\The 2007 level is the amount appropriated for that year.
\2\The authorization levels do not include $62.5 million specifically authorized by the bill for grants to small
  shipyards and maritime communities, reimbursements to ship operators for vessel repair and maintenance costs
  incurred at domestic shipyards, or the subsidy and administrative costs of maritime loan guarantees because
  all of those programs are authorized for 2008 by existing statutes.

    Basis of estimate: S. 1778 would authorize the 
appropriation of $123 million for MARAD operations and $18 
million for the agency's program to dispose of obsolete vessels 
in the National Defense Reserve Fleet. The bill also would 
authorize $20 million for grants to small shipyards and 
maritime communities, $19.5 million for reimbursements to 
vessel owners for repairs made in U.S. shipyards, $20 million 
for the cost of making maritime loan guarantees, and $3 million 
for related administrative costs.
    The authorization level shown in the above table includes 
the amounts specified by the bill for MARAD operations and ship 
disposal. Amounts specified for other programs have been 
excluded because those programs are already authorized for 
fiscal year 2008 under current law. We estimate that 
appropriation of the amounts authorized for operations and ship 
disposal would increase outlays by $112 million in 2008 and by 
$141 million over the 2008-2012 period. Estimated outlays are 
based on historical spending patterns for MARAD activities.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no cost on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Deborah Reis; Impact 
on state, local, and tribal governments: Elizabeth Cove; Impact 
on the private sector: Jacob Kuipers.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  This program would not affect the number of people subject to 
regulation.

                            ECONOMIC IMPACT

  The bill would not have any additional economic impact on the 
Federal government or private sector.

                                PRIVACY

  This program would not impact privacy issues.

                               PAPERWORK

  This program would not create new mandatory paperwork or 
reporting requirements.

                      Section-by-Section Analysis

Section 1. Short Title.
  Section 101 would state the short title, the ``Maritime 
Administration Authorities Act of 2007.''

                    Title I--Maritime Administration

Section 101. Authorization of Appropriations.
  Section 101 would authorize appropriations for fiscal year 
2008 as follows: $122,890,545 for operations and training 
expenses; $19,500,000 for paying reimbursement under section 
3517 of the Maritime Security Act of 2003; $20,000,000 for 
assistance to small shipyards; $18,000,000 for ship disposal; 
$20,000,000 for the Title XI loan guarantee program; and 
$3,408,000 for implementation costs in connection with several 
of the programs.
Section 102. Commercial Vessel Chartering Authority.
  Section 102 would clarify the MARAD's ability to charter only 
U.S.-flag commercial vessels to other Federal agencies. This 
provision would allow the Secretary of Transportation to 
acquire or otherwise obtain the use of private vessel assets 
and other related property whenever the Secretary deems such 
charter to be appropriate.
Section 103. Maritime Administration Vessel Chartering Authority.
  Section 103 would authorize the MARAD to operate or lease its 
own vessels directly and to obtain reimbursement for the use of 
its vessels. This section would add ``vessels'' to the list of 
property that may be leased or operated by the Secretary under 
section 50303 of title 46, United States Code.
Section 104. Chartering to State and Local Governmental 
        Instrumentalities.
  Section 104 would amend the MARAD's authority to charter 
vessels to States, local governments, or U.S. territories. This 
would allow the MARAD to respond more immediately to requests 
for assistance when deployment is critical for response and 
recovery activities.
Section 105. Disposal of Obsolete Government Vessels.
  Section 105 would clarify that ship disposal transactions 
include both sales and contracts for services. This section 
would require the disposal of all deteriorated high priority 
ships within one year of their designation. Higher priority 
would be given to vessels that pose the most significant 
environmental danger or have high maintenance costs.
Section 106. Vessel Transfer Authority.
  Section 3504 of the National Defense Authorization Act of 
2007, Public Law 109-364, authorized the Secretary ``to 
transfer or otherwise make available without reimbursement to 
any other department a vessel under the jurisdiction of the 
DOT, upon request by the Secretary of the department that 
receives the vessel.'' However, there continues to be a 
conflict between Section 3504 (49 U.S.C. 301 note) and Section 
11(b) of the Merchant Ships Sales Act of 1946 (50 App. U.S.C. 
1744(b)), which bars Federal agencies outside of the DOD from 
most uses of NDRF vessels. Section 106 would resolve one aspect 
of this conflict by allowing NDRF vessels to be available to 
other Federal agencies on request to the Secretary of 
Transportation with prior consent of the Secretary of Defense.
Section 107. Sea Trials for Ready Reserve Force Vessels.
  Section 107 would extend from 24 months to 30 months the 
period of time between which RRF vessels must be activated and 
undergo sea trials. This change would align the MARAD's 
requirement for sea trials with USCG regulations, which require 
that vessels must be dry-docked twice in five years. This 
change would alleviate the need to conduct out of sequence sea 
trials and eliminate unwarranted expenses to the RRF program.
Section 108. Review of Applications for Loans and Guarantees.
  This section would require the Administrator to develop a 
comprehensive review process for traditional and non-
traditional applications to the vessel loan guarantee program. 
The application review process for traditional or routine cases 
would be required not to exceed 90 days from the date the 
complete application is submitted to the MARAD to the date the 
Administrator either approves or denies the application.

                    Title II--Technical Corrections

Section 201. Statutory Construction.
  Section 201 would clarify that the amendments made by title 
II of this bill make no substantive change to existing law. 
Various provisions of maritime law were codified as part of 
title 46, United States Code, by Public Law 109-304, enacted 
October 6, 2006. Section 18(a) of that law provided that it was 
codifying existing law as in effect on April 30, 2005, and that 
any amendments to such law enacted after that date should be 
given effect even though not reflected in the text of the newly 
codified provisions. This title would update the newly codified 
provisions to reflect those amendments. It also would amend 
certain of those provisions based on public comments to the 
codification bill that were submitted too late to be reflected 
in that bill and would make technical corrections to Public Law 
109-304 and Public Law 109-364.
Section 202. Personal Injury to or Death of Seamen.
  Section 202 would modify the language of section 30104 of 
title 46, United States Code, which codified section 20(a) of 
the Act of March 4, 1915, as amended by section 33 of the Act 
of June 5, 1920 (formerly 46 App. U.S.C. 688(a)) to ensure the 
same meaning as former section 20(a), as interpreted by the 
courts. The amendment would be made retroactive to the date of 
the codification by Public Law 109-304 to ensure that no 
inadvertent substantive change was made, temporarily or 
otherwise, by that codification.
Section 203. Amendments to Chapter 537 Based on Public Law 109-163.
  Section 203 would update 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 204. Additional Amendments Based on Public Law 109-163.
  Section 204 would update 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 would add a new section 54101 to title 46, United 
States Code, based on section 3506 of that Act.
Section 205. Amendments Based on Public Law 109-171.
  Section 205 would update 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 206. Amendments Based on Public Law 109-241.
  Section 206 would update 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 207. Amendments Based on Public Law 109-364.
  Section 207 would update 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.
  Additionally, this section would update 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 208. Miscellaneous Amendments.
  Section 208 would delete 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. It also would amend section 55110 to improve the 
heading, and in section 80102, would substitute the words 
``salvage'' and ``salvaging'' for ``wreckers'' and 
``wrecking''.
Section 209. Application of Sunset Provision to Codified Provision.
  This section would ensure that the tax rate in section 
53511(f)(2) of title 46, United States Code, is the same as it 
would have been under former section 607(h)(6)(A) of the 
Merchant Marine Act, 1936. This section would not amend section 
53511(f)(2) of title 46, United States Code, directly, in case 
of any further amendment to the sunset provision in section 303 
of Public Law 108-27.
Section 210. Technical Corrections.
  This section would make technical corrections to Public Law 
109-304 and to provisions enacted or amended by that law. 
Additionally, it would make a technical change to section 8103 
(k)(3)(C)(iv) of title 46, United States Code, to clarify 
``section'' to mean section 252 of the Immigration and 
Nationality Act.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                 NATIONAL MARITIME HERITAGE ACT OF 1994

SEC. 6. FUNDING.

                            [16 U.S.C. 5405]

  (a) Availability of funds from sale and scrapping of obsolete 
vessels.--
          (1) In general.--Notwithstanding any other provision 
        of law, the amount of funds credited in a fiscal year 
        to the Vessel Operations Revolving Fund established by 
        the Act of June 2, 1951 (46 App. U.S.C. 1241a), that is 
        attributable to the sale of obsolete vessels in the 
        National Defense Reserve Fleet that are scrapped or 
        sold under section 508 or 510(i) of the Merchant Marine 
        Act, 1936 (46 App. U.S.C. 1158 or 1160(i)) shall be 
        available until expended as follows:
                  (A) 50 percent shall be available to the 
                Administrator of the Maritime Administration 
                for such acquisition, maintenance, repair, 
                reconditioning, or improvement of vessels in 
                the National Defense Reserve Fleet as is 
                authorized under other Federal law.
                  (B) 25 percent shall be available to the 
                Administrator of the Maritime Administration 
                for the payment or reimbursement of expenses 
                incurred by or on behalf of State maritime 
                academies or the United States Merchant Marine 
                Academy for facility and training ship 
                maintenance, repair, and modernization, and for 
                the purchase of simulators and fuel.
                  (C) The remainder shall be available to the 
                Secretary to carry out the Program, as provided 
                in subsection (b).
          (2) Application.--Paragraph (1) does not apply to 
        amounts credited to the Vessel Operations Revolving 
        Fund before July 1, 1994.
  (b) Use of amounts for program.--
          (1) In general.--Except as provided in paragraph (2), 
        of amounts available each fiscal year for the Program 
        under subsection (a)(1)(C)--
                  (A) \1/2\ shall be used for grants under 
                section 4(b); and
                  (B) \1/2\ shall be used for grants under 
                section 4(c).
          (2) Use for interim projects.--Amounts available for 
        the Program under subsection (a)(1)(C) that are the 
        proceeds of any of the first 8 obsolete vessels in the 
        National Defense Reserve Fleet that are sold or 
        scrapped after July 1, 1994, under section 508 or 
        510(i) of the Merchant Marine Act, 1936 (46 U.S.C. 1158 
        or 1160(i)) are available to the Secretary for grants 
        for interim projects approved under section 4(j) of 
        this Act.
          (3) Administrative expenses.--
                  (A) In general.--Not more than 15 percent or 
                $500,000, whichever is less, of the amount 
                available for the Program under subsection 
                (a)(1)(C) for a fiscal year may be used for 
                expenses of administering the Program.
                  (B) Allocation.--Of the amount available 
                under subparagraph (A) for a fiscal year--
                          (i) \1/2\ shall be allocated to the 
                        National Trust for expenses incurred in 
                        administering grants under section 
                        4(b); and
                          (ii) \1/2\ shall be allocated as 
                        appropriate by the Secretary to the 
                        National Park Service and participating 
                        State Historic Preservation Officers.
  (c) Disposals of vessels.--
          (1) Requirement.--The Secretary of Transportation 
        shall dispose (either by sale or purchase of disposal 
        services) of all vessels described in paragraph (2)--
                  [(A) by September 30, 2006;]
                  (A) in accordance with a priority system for 
                disposing of vessels, as determined by the 
                Secretary, which shall include provisions 
                requiring the Maritime Administration to--
                          (i) dispose of all deteriorated high 
                        priority ships that are available for 
                        disposal, within 12 months of their 
                        designation as such; and
                          (ii) give priority to the disposition 
                        of those vessels that pose the most 
                        significant danger to the environment 
                        or cost the most to maintain;
                  (B) in the manner that provides the best 
                value to the Government, except in any case in 
                which obtaining the best value would require 
                towing a vessel and such towing poses a serious 
                threat to the environment; and
                  (C) in accordance with the plan of the 
                Department of Transportation for disposal of 
                those vessels and requirements under sections 
                508 and 510(i) of the Merchant Marine Act, 1936 
                (46 App. U.S.C. 1158, 1160(i)).
          (2) Vessels described.--The vessels referred to in 
        paragraph (1) are the vessels in the National Defense 
        Reserve Fleet after July 1, 1994, that--
                  (A) are not assigned to the Ready Reserve 
                Force component of that fleet; and
                  (B) are not specifically authorized or 
                required by statute to be used for a particular 
                purpose.
  (d) Treatment of amounts available.--Amounts available under 
this section shall not be considered in any determination of 
the amounts available to the Department of the Interior.

                     [DEFICIT REDUCTION ACT OF 2005

                  [TITLE IV--TRANSPORTATION PROVISIONS

[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''.]

        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2006

SEC. 515. REDESIGNATION OF THE NAVAL RESERVE AS THE NAVY RESERVE.

  (a) Redesignation of Reserve Component.--
          (1) Redesignation.-- The reserve component of the 
        Armed Forces known as the Naval Reserve is redesignated 
        as the Navy Reserve.
          (2) Conforming repeal.--Section 517 of the Ronald W. 
        Reagan National Defense Authorization Act for Fiscal 
        Year 2005 (Public Law 108-375; 118 Stat. 1884; 10 
        U.S.C. 10101 note) is repealed.
  (b) Conforming Amendments to Title 10, United States Code.--
          (1) Text amendments.--Title 10, United States Code, 
        is amended by striking ``Naval Reserve'' each place it 
        appears in the following provisions and inserting 
        ``Navy Reserve'':
                  (A) Section 513(a).
                  (B) Section 516.
                  (C) Section 526(b)(2)(C)(i).
                  (D) Section 971(a).
                  (E) Section 5001(a)(1).
                  (F) Section 5143.
                  (G) Section 5596(c).
                  (H) Section 6323(f).
                  (I) Section 6327.
                  (J) Section 6330(b).
                  (K) Section 6331(a)(2).
                  (L) Section 6336.
                  (M) Section 6389.
                  (N) Section 6911(c)(1).
                  (O) Section 6913(a).
                  (P) Section 6915.
                  (Q) Section 6954(b)(3).
                  (R) Section 6956(a)(2).
                  (S) Section 6959.
                  (T) Section 7225.
                  (U) Section 7226.
                  (V) Section 7605(1).
                  (W) Section 7852.
                  (X) Section 7853.
                  (Y) Section 7854.
                  (Z) Section 10101(3).
                  (AA) Section 10108.
                  (BB) Section 10172.
                  (CC) Section 10301(a)(7).
                  (DD) Section 10303.
                  (EE) Section 12004(e)(2).
                  (FF) Section 12005.
                  (GG) Section 12010.
                  (HH) Section 12011(a)(2).
                  (II) Section 12012(a).
                  (JJ) Section 12103.
                  (KK) Section 12205.
                  (LL) Section 12207(b)(2).
                  (MM) Section 12732.
                  (NN) Section 12774(b) (other than the first 
                place it appears).
                  (OO) Section 14002(b).
                  (PP) Section 14101(a)(1).
                  (QQ) Section 14107(d).
                  (RR) Section 14302(a)(1)(A).
                  (SS) Section 14313(b).
                  (TT) Section 14501(a).
                  (UU) Section 14512(b).
                  (VV) Section 14705(a).
                  (WW) Section 16201(d)(1)(B)(ii).
          (2) Subsection caption amendments.--Such title is 
        further amended in sections 971(a) and 5143(a) by 
        striking ``Naval Reserve'' and inserting ``Navy 
        Reserve''.
          (3) Section heading amendments.--Such title is 
        further amended as follows:
                  (A) The heading of section 5143 is amended to 
                read as follows:

``SEC. 5143. OFFICE OF NAVY RESERVE: APPOINTMENT OF CHIEF''.

                  (B) The heading of section 6327 is amended to 
                read as follows: ``Sec. 6327. Officers and 
                enlisted members of the Navy Reserve and Marine 
                Corps Reserve: 30 years; 20 years; retired 
                pay''.
                  (C) The heading of section 6389 is amended to 
                read as follows: ``Sec. 6389. Navy Reserve and 
                Marine Corps Reserve; officers: elimination 
                from active status; computation of total 
                commissioned service''.
                  (D) The heading of section 7225 is amended to 
                read as follows: ``Sec. 7225. Navy Reserve 
                flag''.
                  (E) The heading of section 7226 is amended to 
                read as follows: ``Sec. 7226. Navy Reserve 
                yacht pennant''.
                  (F) The heading of section 10108 is amended 
                to read as follows: ``Sec. 10108. Navy Reserve: 
                administration''.
                  (G) The heading of section 10172 is amended 
                to read as follows: ``Sec. 10172. Navy Reserve 
                Force''.
                  (H) The heading of section 10303 is amended 
                to read as follows: ``Sec. 10303. Navy Reserve 
                Policy Board''.
                  (I) The heading of section 12010 is amended 
                to read as follows: ``Sec. 12010. Computations 
                for Navy Reserve and Marine Corps Reserve: rule 
                when fraction occurs in final result''.
                  (J) The heading of section 14306 is amended 
                to read as follows: ``Sec. 14306. Establishment 
                of promotion zones: Navy Reserve and Marine 
                Corps Reserve running mate system''.
          (4) Tables of sections amendments.--Such title is 
        further amended as follows:
                  (A) The item relating to section 5143 in the 
                table of sections at the beginning of chapter 
                513 is amended to read as follows: ``5143. 
                Office of Navy Reserve: appointment of 
                Chief.''.
                  (B) The item relating to section 6327 in the 
                table of sections at the beginning of chapter 
                571 is amended to read as follows: ``6327. 
                Officers and enlisted members of the Navy 
                Reserve and Marine Corps Reserve: 30 years; 20 
                years; retired pay.''.
                  (C) The item relating to section 6389 in the 
                table of sections at the beginning of chapter 
                573 is amended to read as follows: ``6389. Navy 
                Reserve and Marine Corps Reserve; officers: 
                elimination from active status; computation of 
                total commissioned service.''.
                  (D) The items relating to sections 7225 and 
                7226 in the table of sections at the beginning 
                of chapter 631 are amended to read as follows: 
                ``7225. Navy Reserve flag. ``7226. Navy Reserve 
                yacht pennant.''.
                  (E) The item relating to section 10108 in the 
                table of sections at the beginning of chapter 
                1003 is amended to read as follows: ``10108. 
                Navy Reserve: administration.''.
                  (F) The item relating to section 10172 in the 
                table of sections at the beginning of chapter 
                1006 is amended to read as follows: ``10172. 
                Navy Reserve Force.''.
                  (G) The item relating to section 10303 in the 
                table of sections at the beginning of chapter 
                1009 is amended to read as follows: ``10303. 
                Navy Reserve Policy Board.''.
                  (H) The item relating to section 12010 in the 
                table of sections at the beginning of chapter 
                1201 is amended to read as follows: ``12010. 
                Computations for Navy Reserve and Marine Corps 
                Reserve: rule when fraction occurs in final 
                result.''.
                  (I) The item relating to section 14306 in the 
                table of sections at the beginning of chapter 
                1405 is amended to read as follows: ``14306. 
                Establishment of promotion zones: Navy Reserve 
                and Marine Corps Reserve running mate 
                system.''.
  (c) Conforming Amendment to Title 14, United States Code.--
Section 705 of title 14, United States Code, is amended by 
striking ``Naval Reserve'' each place it appears and inserting 
``Navy Reserve''.
  (d) Conforming Amendments to Title 37, United States Code.--
          (1) Text amendments.--Title 37, United States Code, 
        is amended by striking ``Naval Reserve'' each place it 
        appears in the following provisions and inserting 
        ``Navy Reserve'':
                  (A) Section 101(24)(C).
                  (B) Section 201(d).
                  (C) Section 205(a)(2)(I).
                  (D) Section 301c(d).
                  (E) Section 319(a).
                  (F) Section 905.
          (2) Subsection caption amendment.--Section 301c(d) of 
        such title is further amended by striking ``Naval 
        Reserve'' and inserting ``Navy Reserve''.
  (e) Conforming Amendments to Title 38, United States Code.--
Title 38, United States Code, is amended by striking ``Naval 
Reserve'' each place it appears in the following provisions and 
inserting ``Navy Reserve'':
          (1) Section 101(27)(B).
          (2) Section 3002(6)(C).
          (3) Section 3202(1)(C)(iii).
          (4) Section 3452(a)(3)(C).
  (f) Conforming Amendments to Other Codified Titles.--
          (1) Title 5, united states code.--Section 2108(1)(B) 
        of title 5, United States Code, is amended by striking 
        ``Naval Reserve'' and inserting ``Navy Reserve''.
          (2) Title 18, united states code.--Section 2387(b) of 
        title 18, United States Code, is amended by striking 
        ``Naval Reserve'' and inserting ``Navy Reserve''.
          (3) Title 46, united states code.--Title 46, United 
        States Code, is amended as follows:
                  (A) Sections 8103(g) and 8302(g) are amended 
                by striking ``Naval Reserve'' each place it 
                appears and inserting ``Navy Reserve''.
                  (B) The heading of section 8103 is amended to 
                read as follows: ``Sec. 8103. Citizenship and 
                Navy Reserve requirements''.
                  (C) The table of sections at the beginning of 
                chapter 81 is amended by striking the item 
                relating to section 8103 and inserting the 
                following new item: ``8103. Citizenship and 
                Navy Reserve requirements.''.
  (g) Conforming Amendments to Other Laws.--
          (1) Section 2301(4)(C) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6671(4)(C)) 
        is amended by striking ``Naval Reserve'' and inserting 
        ``Navy Reserve''.
          [(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'':]
          (3) The Military Selective Service Act is amended--
                  (A) in section 6(a)(1) (50 U.S.C. App. 
                456(a)(1)), by striking ``United States Naval 
                Reserves'' and inserting ``members of the 
                United States Navy Reserve''; and
                  (B) in section 16(i) (50 U.S.C. App. 466(i)), 
                by striking ``Naval Reserve'' and inserting 
                ``Navy Reserve''.
  (h) Other References.--Any reference in any law, regulation, 
document, record, or other paper of the United States to the 
Naval Reserve, other than a reference to the Naval Reserve 
regarding the United States Naval Reserve Retired List, shall 
be considered to be a reference to the 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. 3506. 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.]

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--''.]

COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2006

           *       *       *       *       *       *       *


[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

           *       *       *       *       *       *       *


SEC. 1017. OBTAINING CARRIAGE BY VESSEL: CRITERION REGARDING OVERHAUL, 
                    REPAIR, AND MAINTENANCE OF VESSELS IN THE UNITED 
                    STATES.

  (a) Acquisition Policy.--In order to maintain the national 
defense industrial base, the Secretary of Defense shall issue 
an acquisition policy that establishes, as a criterion required 
to be considered in obtaining carriage by vessel of cargo for 
the Department of Defense, the extent to which an offeror of 
such carriage had overhaul, repair, and maintenance work for 
covered vessels of the offeror performed in shipyards located 
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.
  (c) Application of Policy.--The acquisition policy shall 
include rules providing for application of the policy to 
covered vessels as expeditiously as is practicable based on the 
nature of carriage obtained, and by no later than June 1, 2007.
  (d) Regulations.--
          (1) In general.--The Secretary shall prescribe 
        regulations as necessary to carry out the acquisition 
        policy and submit such regulations to the Committees on 
        Armed Services of the Senate and the House of 
        Representatives, by not later than June 1, 2007.
          (2) Interim regulations.--
                  (A) In general.--The Secretary may prescribe 
                interim regulations as necessary to carry out 
                the acquisition policy. For this purpose, the 
                Secretary is excepted from compliance with the 
                notice and comment requirements of section 553 
                of title 5, United States Code.
                  (B) Submission to congress.--Upon the 
                issuance of interim regulations under this 
                paragraph, the Secretary shall submit to the 
                Committees on Armed Services of the Senate and 
                the House of Representatives the interim 
                regulations and a description of the 
                acquisition policy developed (or being 
                developed) under subsection (a).
                  (C) Expiration.--All interim regulations 
                prescribed under the authority of this 
                paragraph that are not earlier superseded by 
                final regulations shall expire no later than 
                June 1, 2007.
  (e) Annual Report.--The Secretary, acting through the United 
States Transportation Command, shall annually submit to the 
Committees on Armed Services of the Senate and the House of 
Representatives a report regarding overhaul, repair, and 
maintenance performed on covered vessels of each offeror of 
carriage to which the acquisition policy applies.
  (f) Definitions.--In this section:
          (1) Foreign shipyard.--The term ``foreign shipyard'' 
        means a shipyard that is not located in the United 
        States.
          (2) United states.--The term ``United States'' 
        means--
                  (A) any State of the United States; and
                  (B) Guam.

           *       *       *       *       *       *       *


[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,''.]
  (c) Intermodal Centers.--
          (1) In general.--Notwithstanding section 
        5309(m)(6)(B) of title 49, United States Code, half of 
        the amounts appropriated or made available under 
        subsections (b) and (c) of section 5338 of title 49, 
        United States Code, for capital projects under section 
        5309(m)(6)(B) of that title for fiscal years 2006 
        through 2009 shall be made available and used, in 
        accordance with section 9008(a) of Public Law 109-59, 
        for an intermodal or marine facility comprising a 
        component of the Hawaii Port Infrastructure Expansion 
        Program.
          (2) Supplementary funding.--Any amount made available 
        under paragraph (1) shall be in addition to any amounts 
        authorized to be appropriated under subsections (b) and 
        (c) of section 9008 of Public Law 109-59.
  (d) Technical Correction.--
          (1) Correction.--Section 3509 of the National Defense 
        Authorization Act for Fiscal Year 2006 (119 Stat. 3557) 
        is amended by striking ``Maritime Education and 
        Training Act of 1980'' and inserting ``Merchant Marine 
        Act, 1936''.
          (2) Effective date.--This subsection shall be 
        effective immediately after section 3509 of the 
        National Defense Authorization Act for Fiscal Year 2006 
        (119 Stat. 3557) takes effect.

                      TITLE 46, UNITED STATES CODE

                                SHIPPING

                    SUBTITLE II. VESSELS AND SEAMEN

                          CHAPTER 81. GENERAL

Sec. 8103. Citizenship and Navy Reserve requirements

  (a) Except as otherwise provided in this title, only a 
citizen of the United States may serve as master, chief 
engineer, radio officer, or officer in charge of a deck watch 
or engineering watch on a documented vessel.
  (b)(1) Except as otherwise provided in this section, on a 
documented vessel--
          (A) each unlicensed seaman must be--
                  (i) a citizen of the United States;
                  (ii) an alien lawfully admitted to the United 
                States for permanent residence; or
                  (iii) a foreign national who is enrolled in 
                the United States Merchant Marine Academy.
          (B) not more than 25 percent of the total number of 
        unlicensed seamen on the vessel may be aliens lawfully 
        admitted to the United States for permanent residence.
  (2) Paragraph (1) of this subsection does not apply to--
          (A) a yacht;
          (B) a fishing vessel fishing exclusively for highly 
        migratory species (as that term is defined in section 3 
        of the Magnuson-Stevens Fishery Conservation and 
        Management Act (16 U.S.C. 1802)); and
          (C) a fishing vessel fishing outside of the exclusive 
        economic zone.
  (3) The Secretary may waive a citizenship requirement under 
this section, other than a requirement that applies to the 
master of a documented vessel, with respect to--
          (A) an offshore supply vessel or other similarly 
        engaged vessel of less than 1,600 gross tons as 
        measured under section 14502 of this title, or an 
        alternate tonnage measured under section 14302 of this 
        title as prescribed by the Secretary under section 
        14104 of this title that operates from a foreign port;
          (B) a mobile offshore drilling unit or other vessel 
        engaged in support of exploration, exploitation, or 
        production of offshore mineral energy resources 
        operating beyond the water above the outer Continental 
        Shelf (as that term is defined in section 2(a) of the 
        Outer Continental Shelf Lands Act (43 U.S.C. 1331(a)); 
        and
          (C) any other vessel if the Secretary determines, 
        after an investigation, that qualified seamen who are 
        citizens of the United States are not available.
  (c) On each departure of a vessel (except a passenger vessel) 
for which a construction or operating differential subsidy has 
been granted, all of the seamen of the vessel must be citizens 
of the United States.
  (d)(1) On each departure of a passenger vessel for which a 
construction or operating differential subsidy has been 
granted, at least 90 percent of the entire complement 
(including licensed individuals) must be citizens of the United 
States.
  (2) An individual not required by this subsection to be a 
citizen of the United States may be engaged only if the 
individual has a declaration of intention to become a citizen 
of the United States or other evidence of admission to the 
United States for permanent residence. An alien may be employed 
only in the steward's department of the passenger vessel.
  (e) If a documented vessel is deprived for any reason of the 
services of an individual (except the master and the radio 
officer) when on a foreign voyage and a vacancy consequently 
occurs, until the vessel's return to a port at which in the 
most expeditious manner a replacement who is a citizen of the 
United States can be obtained, an individual not a citizen of 
the United States may serve in--
          (1) the vacancy; or
          (2) a vacancy resulting from the promotion of another 
        individual to fill the original vacancy.
  (f) A person employing an individual in violation of this 
section or a regulation prescribed under this section is liable 
to the United States Government for a civil penalty of $500 for 
each individual so employed.
  (g) A deck or engineer officer employed on a vessel on which 
an operating differential subsidy is paid, or employed on a 
vessel (except a vessel of the Coast Guard or Saint Lawrence 
Seaway Development Corporation) owned or operated by the 
Department of Transportation or by a corporation organized or 
controlled by the Department, if eligible, shall be a member of 
the Navy Reserve.
  (h) The President may--
          (1) suspend any part of this section during a 
        proclaimed national emergency; and
          (2) when the needs of commerce require, suspend as 
        far and for a period the President considers desirable, 
        subsection (a) of this section for crews of vessels of 
        the United States documented for foreign trade.
  (i)(1) Except as provided in paragraph (3) of this 
subsection, each unlicensed seaman on a fishing, fish 
processing, or fish tender vessel that is engaged in the 
fisheries in the navigable waters of the United States or the 
exclusive economic zone must be--
          (A) a citizen of the United States;
          (B) an alien lawfully admitted to the United States 
        for permanent residence;
          (C) any other alien allowed to be employed under the 
        Immigration and Nationality Act (8 U.S.C. 1101 et 
        seq.); or
          (D) an alien allowed to be employed under the 
        immigration laws of the Commonwealth of the Northern 
        Mariana Islands if the vessel is permanently stationed 
        at a port within the Commonwealth and the vessel is 
        engaged in the fisheries within the exclusive economic 
        zone surrounding the Commonwealth or another United 
        States territory or possession.
  (2) Not more than 25 percent of the unlicensed seamen on a 
vessel subject to paragraph (1) of this subsection may be 
aliens referred to in clause (C) of that paragraph.
  (3) This subsection does not apply to a fishing vessel 
fishing exclusively for highly migratory species (as that term 
is defined in section 3 of the Magnuson-Stevens Fishery 
Conservation and Management Act (16 U.S.C. 1802)).
  (j) Riding gang member.--This section does not apply to an 
individual who is a riding gang member.
  (k) Crew requirements for large passenger vessels.--
          (1) Citizenship and nationality.--Each unlicensed 
        seaman on a large passenger vessel shall be--
                  (A) a citizen of the United States;
                  (B) an alien lawfully admitted to the United 
                States for permanent residence;
                  (C) an alien allowed to be employed in the 
                United States under the Immigration and 
                Nationality Act (8 U.S.C. 1101 et seq.), 
                including an alien crewman described in section 
                101(a)(15)(D)(i) of that Act (8 U.S.C. 
                1101(a)(15)(D)(i)), who meets the requirements 
                of paragraph (3)(A) of this subsection; or
                  (D) a foreign national who is enrolled in the 
                United States Merchant Marine Academy.
          (2) Percentage limitation for alien seamen.-- Not 
        more than 25 percent of the unlicensed seamen on a 
        vessel described in paragraph (1) of this subsection 
        may be aliens referred to in subparagraph (B) or (C) of 
        that paragraph.
          (3) Special rules for certain unlicensed seamen.--
                  (A) Qualifications.--An unlicensed seaman 
                described in paragraph (1)(C) of this 
                subsection--
                          (i) shall have been employed, for a 
                        period of not less than 1 year, on a 
                        passenger vessel under the same common 
                        ownership or control as the vessel 
                        described in paragraph (1) of this 
                        subsection, as certified by the owner 
                        or managing operator of such vessel to 
                        the Secretary;
                          (ii) shall have no record of material 
                        disciplinary actions during such 
                        employment, as verified in writing by 
                        the owner or managing operator of such 
                        vessel to the Secretary;
                          (iii) shall have successfully 
                        completed a United States Government 
                        security check of the relevant domestic 
                        and international databases, as 
                        appropriate, or any other national 
                        security-related information or 
                        database;
                          (iv) shall have successfully 
                        undergone an employer background 
                        check--
                                  (I) for which the owner or 
                                managing operator provides a 
                                signed report to the Secretary 
                                that describes the background 
                                checks undertaken that are 
                                reasonably and legally 
                                available to the owner or 
                                managing operator including 
                                personnel file information 
                                obtained from such seaman and 
                                from databases available to the 
                                public with respect to the 
                                seaman;
                                  (II) that consisted of a 
                                search of all information 
                                reasonably available to the 
                                owner or managing operator in 
                                the seaman's country of 
                                citizenship and any other 
                                country in which the seaman 
                                receives employment referrals, 
                                or resides;
                                  (III) that is kept on the 
                                vessel and available for 
                                inspection by the Secretary; 
                                and
                                  (IV) the information derived 
                                from which is made available to 
                                the Secretary upon request; and
                          (v) may not be a citizen or temporary 
                        or permanent resident of a country 
                        designated by the United States as a 
                        sponsor of terrorism or any other 
                        country that the Secretary, in 
                        consultation with the Secretary of 
                        State and the heads of other 
                        appropriate United States agencies, 
                        determines to be a security threat to 
                        the United States.
                  (B) Restrictions.--An unlicensed seaman 
                described in paragraph (1)(C) of this 
                subsection--
                          (i) may be employed only in the 
                        steward's department of the vessel; and
                          (ii) may not perform watchstanding, 
                        automated engine room duty watch, or 
                        vessel navigation functions.
                  (C) Status, documentation, and employment.--
                An unlicensed seaman described in subparagraph 
                (C) or (D) of paragraph (1) of this 
                subsection--
                          (i) is deemed to meet the nationality 
                        requirements necessary to qualify for a 
                        merchant mariners document 
                        notwithstanding the requirements of 
                        part 12 of title 46, Code of Federal 
                        Regulations;
                          (ii) is deemed to meet the proof-of-
                        identity requirements necessary to 
                        qualify for a merchant mariners 
                        document, as prescribed under 
                        regulations promulgated by the 
                        Secretary, if the seaman possesses--
                                  (I) an unexpired passport 
                                issued by the government of the 
                                country of which the seaman is 
                                a citizen or subject; and
                                  (II) an unexpired visa issued 
                                to the seaman, as described in 
                                paragraph (1)(C);
                          (iii) shall, if eligible, be issued a 
                        merchant mariners document with an 
                        appropriate annotation reflecting the 
                        restrictions of subparagraph (B) of 
                        this paragraph; and
                          (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.
          (4) Merchant mariner's document requirements not 
        affected.--This subsection shall not be construed to 
        affect any requirement under Federal law that an 
        individual must hold a merchant mariner's document.
          (5) Definitions.--In this subsection:
                  (A) Steward's department.--The term 
                ``steward's department'' means the department 
                that includes entertainment personnel and all 
                service personnel, including wait staff, 
                housekeeping staff, and galley workers, as 
                defined in the vessel security plan approved by 
                the Secretary pursuant to section 70103(c) of 
                this title.
                  (B) Large passenger vessel.--The term ``large 
                passenger vessel'' means a vessel of more than 
                70,000 gross tons, as measured under section 
                14302 of this title, with capacity for at least 
                2,000 passengers and documented with a 
                coastwise endorsement under chapter 121 of this 
                title.

                          CHAPTER 101. GENERAL

Sec. 10101. Definitions

  In this part--
          (1) ``master'' means the individual having command of 
        a vessel.
          (2) ``owner'' means the person to whom the vessel 
        belongs.
          (3) ``seaman'' means an individual (except scientific 
        personnel on an oceanographic research vessel, a 
        sailing school instructor, or a sailing school student) 
        engaged or employed in any capacity on board a vessel.
          (4) ``fishing vessel'' includes--
                  (A) a fish tender vessel; or
                  (B) a fish processing vessel entered into 
                service before January 1, 1988, and not more 
                than 1,600 gross tons as measured under section 
                14502 of this title, or an alternate tonnage 
                measured under section 14302 of this title as 
                prescribed by the Secretary under section 14104 
                of this title or entered into service after 
                December 31, 1987, and having not more than 16 
                individuals on board primarily employed in the 
                preparation of fish or fish products.

                 CHAPTER 121. DOCUMENTATION OF VESSELS

Sec. 12111. Registry endorsement

  (a) Requirements.--A registry endorsement may be issued for a 
vessel that satisfies the requirements of section 12103 of this 
title.
  (b) Authorized activity.--A vessel for which a registry 
endorsement is issued may engage in foreign trade or trade with 
Guam, American Samoa, Wake, Midway, or Kingman Reef.
  (c) Certain vessels owned by trusts.--
          (1) Nonapplication of beneficiary citizenship 
        requirement.--For the issuance of a certificate of 
        documentation with only a registry endorsement, the 
        beneficiaries of a trust are not required to be 
        citizens of the United States if the trust qualifies 
        under paragraph (2) and the vessel is subject to a 
        charter to a citizen of the United States.
          (2) Requirements for trust to qualify.--
                  (A) In general.--Subject to subparagraph (B), 
                a trust qualifies under this paragraph with 
                respect to a vessel only if--
                          (i) each trustee is a citizen of the 
                        United States; and
                          (ii) the application for 
                        documentation of the vessel includes 
                        the affidavit of each trustee stating 
                        that the trustee is not aware of any 
                        reason involving a beneficiary of the 
                        trust that is not a citizen of the 
                        United States, or involving any other 
                        person that is not a citizen of the 
                        United States, as a result of which the 
                        beneficiary or other person would hold 
                        more than 25 percent of the aggregate 
                        power to influence or limit the 
                        exercise of the authority of the 
                        trustee with respect to matters 
                        involving any ownership or operation of 
                        the vessel that may adversely affect 
                        the interests of the United States.
                  (B) Authority of non-citizens.--If any person 
                that is not a citizen of the United States has 
                authority to direct or participate in directing 
                a trustee for a trust in matters involving any 
                ownership or operation of the vessel that may 
                adversely affect the interests of the United 
                States or in removing a trustee for a trust 
                without cause, either directly or indirectly 
                through the control of another person, the 
                trust is not qualified under this paragraph 
                unless the trust instrument provides that 
                persons who are not citizens of the United 
                States may not hold more than 25 percent of the 
                aggregate authority to so direct or remove a 
                trustee.
                  (C) Ownership by non-citizens.--Subparagraphs 
                (A) and (B) do not prohibit a person that is 
                not a citizen of the United States from holding 
                more than 25 percent of the beneficial interest 
                in a trust.
          (3) Citizenship of person chartering vessel.--If a 
        person chartering a vessel from a trust that qualifies 
        under paragraph (2) is a citizen of the United States 
        under section 50501 of this title, the vessel is deemed 
        to be owned by a citizen of the United States for 
        purposes of that section and related laws, except 
        chapter 531 of this title.
  (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

  (a) Requirements.--A fishery endorsement may be issued for a 
vessel that--
          (1) satisfies the requirements of section 12103 of 
        this title and, if owned by an entity, the entity 
        satisfies the ownership requirements in subsection (c);
          (2) was built in the United States;
          (3) if rebuilt, was rebuilt in the United States;
          (4) was not forfeited to the United States Government 
        after July 1, 2001, for a breach of the laws of the 
        United States; and
          (5) otherwise qualifies under the laws of the United 
        States to engage in the fisheries.
  (b) Authorized activity.--
          (1) In general.--Subject to the laws of the United 
        States regulating the fisheries, a vessel for which a 
        fishery endorsement is issued may engage in the 
        fisheries.
          (2) Use by prohibited persons.--A fishery endorsement 
        is invalid immediately if the vessel for which it is 
        issued is used as a fishing vessel while it is 
        chartered or leased to an individual who is not a 
        citizen of the United States or to an entity that is 
        not eligible to own a vessel with a fishery 
        endorsement.
  (c) Ownership requirements for entities.--
          (1) In general.--A vessel owned by an entity is 
        eligible for a fishery endorsement only if at least 75 
        percent of the interest in the entity, at each tier of 
        ownership and in the aggregate, is owned and controlled 
        by citizens of the United States.
          (2) Determining 75 percent interest.--In determining 
        whether at least 75 percent of the interest in the 
        entity is owned and controlled by citizens of the 
        United States under paragraph (1), the Secretary shall 
        apply section 50501(d) of this title, except that for 
        this purpose the terms ``control'' or ``controlled''--
                  (A) include the right to--
                          (i) direct the business of the 
                        entity;
                          (ii) limit the actions of or replace 
                        the chief executive officer, a majority 
                        of the board of directors, any general 
                        partner, or any person serving in a 
                        management capacity of the entity; or
                          (iii) direct the transfer, operation, 
                        or manning of a vessel with a fishery 
                        endorsement; but
                  (B) do not include the right to simply 
                participate in the activities under 
                subparagraph (A), or the exercise of rights 
                under loan or mortgage covenants by a mortgagee 
                eligible to be a preferred mortgagee under 
                section 31322(a) of this title, except that a 
                mortgagee not eligible to own a vessel with a 
                fishery endorsement may only operate such a 
                vessel to the extent necessary for the 
                immediate safety of the vessel or for repairs, 
                drydocking, or berthing changes.
          (3) Exceptions.--This subsection does not apply to a 
        vessel when it is engaged in the fisheries in the 
        exclusive economic zone under the authority of the 
        Western Pacific Fishery Management Council established 
        under section 302(a)(1)(H) of the Magnuson-Stevens 
        Fishery Conservation and Management Act (16 U.S.C. 
        1852(a)(1)(H)) or to a purse seine vessel when it is 
        engaged in tuna fishing in the Pacific Ocean outside 
        the exclusive economic zone or pursuant to the South 
        Pacific Regional Fisheries Treaty, provided that the 
        owner of the vessel continues to comply with the 
        eligibility requirements for a fishery endorsement 
        under the Federal law that was in effect on October 1, 
        1998. A fishery endorsement issued pursuant to this 
        paragraph is valid for engaging only in the activities 
        described in this paragraph.
  (d) Requirements based on length, tonnage, or horsepower.--
          (1) Application.--This subsection applies to a vessel 
        that--
                  (A) is greater than 165 feet in registered 
                length;
                  (B) is more than 750 gross registered tons as 
                measured under chapter 145 of this title or 
                1,900 gross registered tons as measured under 
                chapter 143 of this title; or
                  (C) has an engine or engines capable of 
                producing a total of more than 3,000 shaft 
                horsepower.
          (2) Requirements.--A vessel subject to this 
        subsection is not eligible for a fishery endorsement 
        unless--
                  (A) (i) a certificate of documentation was 
                issued for the vessel and endorsed with a 
                fishery endorsement that was effective on 
                September 25, 1997;
                  (ii) the vessel is not placed under foreign 
                registry after October 21, 1998; and
                  (iii) if the fishery endorsement is 
                invalidated after October 21, 1998, application 
                is made for a new fishery endorsement within 15 
                business days of the invalidation; or
                  (B) the owner of the vessel demonstrates to 
                the Secretary that the regional fishery 
                management council of jurisdiction established 
                under section 302(a)(1) of the Magnuson-Stevens 
                Fishery Conservation and Management Act (16 
                U.S.C. 1852(a)(1)) has recommended after 
                October 21, 1998, and the Secretary of Commerce 
                has approved, conservation and management 
                measures in accordance with the American 
                Fisheries Act (Public Law 105-277, div. C, 
                title II) (16 U.S.C. 1851 note) to allow the 
                vessel to be used in fisheries under the 
                council's authority.
  (e) Vessels measuring 100 feet or greater.--
          (1) In general.--The Administrator of the Maritime 
        Administration shall administer subsections (c) and (d) 
        with respect to vessels 100 feet or greater in 
        registered length. The owner of each such vessel shall 
        file a statement of citizenship setting forth all 
        relevant facts regarding vessel ownership and control 
        with the Administrator on an annual basis to 
        demonstrate compliance with those provisions.
          (2) Regulations.--Regulations to implement this 
        subsection shall conform to the extent practicable with 
        the regulations establishing the form of citizenship 
        affidavit set forth in part 355 of title 46, Code of 
        Federal Regulations, as in effect on September 25, 
        1997, except that the form of the statement shall be 
        written in a manner to allow the owner of the vessel to 
        satisfy any annual renewal requirements for a 
        certificate of documentation for the vessel and to 
        comply with this subsection and subsections (c) and 
        (d), and shall not be required to be notarized.
          (3) Transfer of ownership.--Transfers of ownership 
        and control of vessels subject to subsection (c) or 
        (d), which are 100 feet or greater in registered 
        length, shall be rigorously scrutinized for violations 
        of those provisions, with particular attention given 
        to--
                  (A) leases, charters, mortgages, financing, 
                and similar arrangements;
                  (B) the control of persons not eligible to 
                own a vessel with a fishery endorsement under 
                subsection (c) or (d), over the management, 
                sales, financing, or other operations of an 
                entity; and
                  (C) contracts involving the purchase over 
                extended periods of time of all, or 
                substantially all, of the living marine 
                resources harvested by a fishing vessel.
  (f) Vessels measuring less than 100 feet.--The Secretary 
shall establish reasonable and necessary requirements to 
demonstrate compliance with subsections (c) and (d), with 
respect to vessels measuring less than 100 feet in registered 
length, and shall seek to minimize the administrative burden on 
individuals who own and operate those vessels.
  (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.
  (h) Revocation of endorsements.--The Secretary shall revoke 
the fishery endorsement of any vessel subject to subsection (c) 
or (d) whose owner does not comply with those provisions.
  (i) Regulations.--Regulations to implement subsections (c) 
and (d) and sections 12151(c) and 31322(b) of this title shall 
prohibit impermissible transfers of ownership or control, 
specify any transactions that require prior approval of an 
implementing agency, identify transactions that do not require 
prior agency approval, and to the extent practicable, minimize 
disruptions to the commercial fishing industry, to the 
traditional financing arrangements of that industry, and to the 
opportunity to form fishery cooperatives.

           *       *       *       *       *       *       *


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.
  (b) Exceptions.--Subsection (a) does not apply to--
          (1) a vessel with only a recreational endorsement; or
          (2) an unmanned barge operating outside of the 
        territorial waters 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.
  (b) Vessels rebuilt outside United States.--
          (1) In general.--Under regulations prescribed by the 
        Secretary, if a vessel exceeding the tonnage specified 
        in paragraph (2) and documented or last documented 
        under the laws of the United States is rebuilt outside 
        the United States, the owner or master shall submit a 
        report of the rebuilding to the Secretary.
          (2) Tonnage.--The tonnage referred to in paragraph 
        (1) is--
                  (A) 500 gross tons as measured under section 
                14502 of this title; or
                  (B) an alternate tonnage as measured under 
                section 14302 of this title as prescribed by 
                the Secretary under section 14104 of this 
                title.
          (3) Timing of submission.--If the rebuilding is 
        completed in the United States, the report shall be 
        submitted when the rebuilding is completed. If the 
        rebuilding is completed outside the United States, the 
        report shall be submitted when the vessel first arrives 
        at a port in the customs territory of the United 
        States.

                    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.]
  (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 bring an action against the 
employer. In such an action, the laws of the United States 
regulating recovery for personal injury to, or death of, a 
railway employee shall apply. Such an action may be maintained 
in admiralty or, at the plaintiff's election, as an action at 
law, with the right of trial by jury.
  (b) Venue.--When the plaintiff elects to maintain an action 
at law, venue shall be in the judicial district in which the 
employer resides or the employer's principal office is located.

                      SUBTITLE V. MERCHANT MARINE

                            PART A. GENERAL

                      CHAPTER 503. ADMINISTRATIVE

Sec. 50303. Operating property and extending term of notes

    (a) General Authority.--The Secretary of Transportation 
may--
            (1) operate or lease docks, wharves, piers, 
        vessels, or real property under the Secretary's 
        [control;] control, except that the prior consent of 
        the Secretary of Defense for such use shall be required 
        with respect to any vessel in the Ready Reserve Force 
        or in the National Defense Reserve Fleet which is 
        maintained in a retention status for the Department of 
        Defense; and
            (2) make extensions and accept renewals of--
                    (A) promissory notes and other evidences of 
                indebtedness on property; and
                    (B) mortgages and other contracts securing 
                the property.
    (b) Terms of Transactions.--A transaction under subsection 
(a) shall be on terms the Secretary considers necessary to 
carry out the purposes of this subtitle , but consistent with 
sound business practice.
    (c) Availability of Amounts.--Amounts received by the 
Secretary from a transaction under this section are available 
for expenditure by the Secretary as provided in this subtitle.

Sec. 50304. Sale and transfer of property

  (a) Authority to sell.--The Secretary of Transportation may 
sell property (other than vessels transferred under section 4 
of the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 990)) on 
terms the Secretary considers appropriate.
  (b) Transfers from military to civilian control.--When the 
President considers it in the interest of the United States, 
the President may transfer to the Secretary of Transportation 
possession and control of property described in the second 
paragraph of section 17 of the Merchant Marine Act, 1920 (ch. 
250, 41 Stat. 994), as originally enacted, that is possessed 
and controlled by the Secretary of a military department.
  (c) Transfers from civilian to military control.--When the 
President considers it necessary, the President by executive 
order may transfer to the Secretary of a military department 
possession and control of property described in section 17 of 
the Merchant Marine Act, 1920 (ch. 250, 41 Stat. 994), as 
originally enacted, that is possessed and controlled by the 
Secretary of Transportation. The President's order shall state 
the need for the transfer and the period of the need. When the 
President decides that the need has ended, the possession and 
control shall revert to the Secretary of Transportation. The 
property may not be sold except as provided by law.
  (d) Vessel Charters to Other Departments.--On a reimbursable 
or non-reimbursable basis, as determined by the Secretary of 
Transportation, the Secretary may charter or otherwise make 
available a vessel under the jurisdiction of the Secretary to 
any other department, upon the request by the Secretary of the 
department that receives the vessel. The prior consent of the 
Secretary of Defense for such use shall be required with 
respect to any vessel in the Ready Reserve Force or in the 
National Defense Reserve Fleet which is maintained in a 
retention status for the Department of Defense.

                 CHAPTER 505. OTHER GENERAL PROVISIONS

Sec. 50503. Oceanographic research vessels

  [An oceanographic research vessel (as defined in section 2101 
of this title) is deemed not to be engaged in trade or 
commerce.]
  (a) Definitions.--In this section, the terms ``oceanographic 
research vessel'' and ``scientific personnel'' have the meaning 
given those terms in section 2101 of this title.
  (b) Not Seamen.--Scientific personnel on an oceanographic 
research vessel are deemed not to be seamen under part G of 
subtitle II, section 30104, or chapter 303 of this title.
  (c) Not Engaged in Trade or Commerce.--An oceanographic 
research vessel is deemed not to be engaged in trade or 
commerce.

Sec. 50504. Sailing school vessels

  (a) Definitions.--In this section, the terms ``sailing school 
instructor'', ``sailing school student'', and ``sailing school 
vessel'' have the meaning given those terms in section 2101 of 
this title.
  (b) Not seamen.--A sailing school student or sailing school 
instructor is deemed not to be a seaman under--
          (1) [parts B, F, and G of subtitle II] part B, F, or 
        G of subtitle II, section 30104, or chapter 303 of this 
        title; or
          (2) the maritime law doctrines of maintenance and 
        cure or warranty of seaworthiness.
  (c) Not merchant vessel or engaged in trade or commerce.--A 
sailing school vessel is deemed not to be--
          (1) a merchant vessel under section 11101(a)-(c) of 
        this title; or
          (2) a vessel engaged in trade or commerce.
  (d) Evidence of financial responsibility.--The owner or 
charterer of a sailing school vessel shall maintain evidence of 
financial responsibility to meet liability for death or injury 
to sailing school students and sailing school instructors on a 
voyage on the vessel. The amount of financial responsibility 
shall be at least $50,000 for each student and instructor. 
Financial responsibility under this subsection may be evidenced 
by insurance

                    PART B. MERCHANT MARINE SERVICE

           CHAPTER 513. UNITED STATES MERCHANT MARINE ACADEMY

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--
          (1) complete the course of instruction at the 
        Academy;
          (2) fulfill the requirements for a license as an 
        officer in the merchant marine of the United States 
        before graduation from the Academy;
          (3) maintain a valid license as an officer in the 
        merchant marine of the United States for at least 6 
        years after graduation from the Academy, accompanied by 
        the appropriate national and international endorsements 
        and certification required by the Coast Guard for 
        service aboard vessels on domestic and international 
        voyages;
          (4) apply for, and accept if tendered, an appointment 
        as a commissioned officer in the [Naval Reserve] Navy 
        Reserve (including the Merchant Marine Reserve, [Naval 
        Reserve] 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;
          (5) serve the foreign and domestic commerce and the 
        national defense of the United States for at least 5 
        years after graduation from the Academy--
                  (A) as a merchant marine officer on a 
                documented vessel or a vessel owned and 
                operated by the United States Government or by 
                a State;
                  (B) as an employee in a United States 
                maritime-related industry, profession, or 
                marine science (as determined by the Secretary 
                of Transportation), if the Secretary determines 
                that service under subparagraph (A) is not 
                available to the individual;
                  (C) as a commissioned officer on active duty 
                in an armed force of the United States, as a 
                commissioned officer in the National Oceanic 
                and Atmospheric Administration, or in other 
                maritime-related Federal employment which 
                serves the national security interests of the 
                United States, as determined by the Secretary; 
                or
                  (D) by a combination of the service 
                alternatives referred to in subparagraphs (A)-
                (C); and
          (6) report to the Secretary on compliance with this 
        subsection.
  (b) Failure to complete course of instruction.--
          (1) Active duty.--If the Secretary of Transportation 
        determines that an individual who has attended the 
        Academy for at least 2 years has failed to fulfill the 
        part of the agreement described in subsection (a)(1), 
        the individual may be ordered by the Secretary of 
        Defense to serve on active duty in one of the armed 
        forces of the United States for a period of not more 
        than 2 years. In cases of hardship as determined by the 
        Secretary of Transportation, the Secretary of 
        Transportation may waive this paragraph in whole or in 
        part.
          (2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on 
        active duty under paragraph (1), or if the Secretary of 
        Transportation determines that reimbursement of the 
        cost of education provided would better serve the 
        interests of the United States, the Secretary of 
        Transportation may recover from the individual the cost 
        of education provided by the Government.
  (c) Failure to carry out other requirements.--
          (1) Active duty.--If the Secretary of Transportation 
        determines that an individual has failed to fulfill any 
        part of the agreement described in subsection (a)(2)-
        (6), the individual may be ordered to serve on active 
        duty for a period of at least 3 years but not more than 
        the unexpired period (as determined by the Secretary) 
        of the service required by subsection (a)(5). The 
        Secretary of Transportation, in consultation with the 
        Secretary of Defense, shall determine in which service 
        the individual shall serve. In cases of hardship as 
        determined by the Secretary of Transportation, the 
        Secretary of Transportation may waive this paragraph in 
        whole or in part.
          (2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on 
        active duty under paragraph (1), or if the Secretary of 
        Transportation determines that reimbursement of the 
        cost of education provided would better serve the 
        interests of the United States, the Secretary of 
        Transportation may recover from the individual the cost 
        of education provided. The Secretary may reduce the 
        amount to be recovered to reflect partial performance 
        of service obligations and other factors the Secretary 
        determines merit a reduction.
  (d) Actions to recover cost.--To aid in the recovery of the 
cost of education provided by the Government under a commitment 
agreement under this section, the Secretary of Transportation 
may--
          (1) request the Attorney General to bring a civil 
        action against the individual; and
          (2) make use of the Federal debt collection 
        procedures in chapter 176 of title 28 or other 
        applicable administrative remedies.
  (e) Alternative 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 paragraphs 
        (3) through (5) of subsection (a).
          (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.] 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 Reserve] 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 Reserve] Navy Reserve (including the Merchant 
Marine Reserve, [Naval Reserve] 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 Reserve] Navy Reserve (including the Merchant 
        Marine Reserve, [Naval Reserve] 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 Reserve] Navy 
        Reserve to be--
                  (A) issued an identification card (referred 
                to as a ``military ID card''); and
                  (B) entitled to all rights and privileges in 
                accordance with the same eligibility criteria 
                as apply to other members of the Ready Reserve 
                of the reserve components of the armed forces.
          (3) Coordination.--The Secretary of the Navy shall 
        carry out paragraphs (1) and (2) in coordination with 
        the Secretary of Transportation.

          CHAPTER 515. STATE MARITIME ACADEMY SUPPORT PROGRAM

Sec. 51504. Use of training vessels

  (a) Applications to use vessels.--The Governor of a State 
sponsoring a State maritime academy (or the Governor of the 
State designated to conduct the affairs of a regional maritime 
academy) may apply in writing to the Secretary of 
Transportation to obtain the use of a training vessel for the 
academy. A vessel provided under this section remains the 
property of the United States Government.
  (b) General authority.--Subject to subsection (c), the 
Secretary may provide to a State maritime academy, for use as a 
training vessel, a suitable vessel under the control of the 
Secretary or made available to the Secretary under subsection 
(e). If a suitable vessel is not available, the Secretary may 
build and provide a suitable vessel.
  (c) Approval requirements.--The Secretary may provide a 
vessel under this section only if--
          (1) an application has been made under subsection 
        (a);
          (2) the State maritime academy satisfies section 
        51506(a) of this title; and
          (3) a suitable port will be available for the safe 
        mooring of the vessel while the academy is using the 
        vessel.
  (d) Preparation and maintenance.--A vessel provided under 
this section shall be--
          (1) repaired, reconditioned, and equipped (with all 
        apparel, charts, books, and instruments of navigation) 
        as necessary for use as a training vessel; and
          (2) maintained in good repair by the Secretary.
  (e) Agency vessels.--An agency may provide to the Secretary, 
for use by a State maritime academy, a vessel (including 
equipment) that--
          (1) is suitable for training purposes; and
          (2) can be provided without detriment to the service 
        to which the vessel is assigned.
  [(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.
  (g) Removing vessels from service and vessel sharing.--The 
Secretary may not--
          (1) take a vessel, currently in use as a training 
        vessel under this section, out of service to implement 
        an alternative program (including vessel sharing) 
        unless the vessel is incapable of being maintained in 
        good repair as required by subsection (d); or
          (2) implement a program requiring a State maritime 
        academy to share its training vessel with another State 
        maritime academy, except with the express consent of 
        Congress.

Sec. 51505. Annual payments for maintenance and support

  (a) Payment agreements.--The Secretary of Transportation may 
make an agreement (effective for not more than 4 years) with 
the following academies to provide annual payments to those 
academies for their maintenance and support:
          (1) One State maritime academy in each State that 
        satisfies section 51506(a) of this title.
          (2) Each regional maritime academy that satisfies 
        section 51506(a) of this title.
  (b) Payments.--
          (1) In general.--Subject to paragraph (2), an annual 
        payment to an academy under subsection (a) shall be at 
        least equal to the amount given to the academy for its 
        maintenance and support by the State in which it is 
        located, or, for a regional maritime academy, by all 
        States cooperating to sponsor the academy.
          (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

  (a) General authority.--If a State maritime academy has an 
agreement with the Secretary of Transportation under section 
51505 of this title, the Secretary may make an agreement with a 
student at the academy who is a citizen of the United States to 
make student incentive payments to the individual. An agreement 
with a student may not be effective for more than 4 academic 
years. The Secretary shall allocate payments under this section 
among the various State maritime academies in an equitable 
manner.
  (b) Payments.--Payments under an agreement under this section 
shall be equal to $4,000 each academic year and be paid, as 
prescribed by the Secretary, while the individual is attending 
the academy. The payments shall be used for uniforms, books, 
and subsistence.
  (c) [Midshipman and enlisted] Enlisted reserve status.--An 
agreement under this section shall require the student to 
accept [midshipman and] enlisted reserve status in the [Naval 
Reserve] Navy Reserve (including the Merchant Marine Reserve, 
[Naval Reserve] 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--
          (1) complete the course of instruction at the academy 
        the individual is attending;
          (2) take the examination for a license as an officer 
        in the merchant marine of the United States before 
        graduation from the academy and fulfill the 
        requirements for such a license within 3 months after 
        graduation from the academy;
          (3) maintain a valid license as an officer in the 
        merchant marine of the United States for at least 6 
        years after graduation from the academy, accompanied by 
        the appropriate national and international endorsements 
        and certification required by the Coast Guard for 
        service aboard vessels on domestic and international 
        voyages;
          (4) accept, if tendered, an appointment as a 
        commissioned officer in the [Naval Reserve] Navy 
        Reserve (including the Merchant Marine Reserve, [Naval 
        Reserve] 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;
          (5) serve the foreign and domestic commerce and the 
        national defense of the United States for at least 3 
        years after graduation from the academy--
                  (A) as a merchant marine officer on a 
                documented vessel or a vessel owned and 
                operated by the United States Government or by 
                a State;
                  (B) as an employee in a United States 
                maritime-related industry, profession, or 
                marine science (as determined by the 
                Secretary), if the Secretary determines that 
                service under subparagraph (A) is not available 
                to the individual;
                  (C) as a commissioned officer on active duty 
                in an armed force of the United States, as a 
                commissioned officer in the National Oceanic 
                and Atmospheric Administration, or in other 
                maritime-related Federal employment which 
                serves the national security interests of the 
                United States, as determined by the Secretary; 
                or
                  (D) by a combination of the service 
                alternatives referred to in subparagraphs (A)-
                (C); and
          (6) report to the Secretary on compliance with this 
        subsection.
  (e) Failure to complete course of instruction.--
          (1) Active duty.--If the Secretary of Transportation 
        determines that an individual who has accepted the 
        payments described in subsection (b) for a minimum of 2 
        academic years has failed to fulfill the part of the 
        agreement described in subsection (d)(1), the 
        individual may be ordered by the Secretary of Defense 
        to serve on active duty in the armed forces of the 
        United States for a period of not more than 2 years. In 
        cases of hardship as determined by the Secretary of 
        Transportation, the Secretary of Transportation may 
        waive this paragraph in whole or in part.
          (2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on 
        active duty under paragraph (1), or if the Secretary of 
        Transportation determines that reimbursement of the 
        cost of education provided would better serve the 
        interests of the United States, the Secretary of 
        Transportation may recover from the individual the 
        amount of student incentive payments, plus interest and 
        attorney fees. The Secretary may reduce the amount to 
        be recovered to reflect partial performance of service 
        obligations and other factors the Secretary determines 
        merit a reduction.
  (f) Failure to carry out other requirements.--
          (1) Active duty.--If the Secretary of Transportation 
        determines that an individual has failed to fulfill any 
        part of the agreement described in subsection (d)(2)-
        (6), the individual may be ordered to serve on active 
        duty for a period of at least 2 years but not more than 
        the unexpired period (as determined by the Secretary) 
        of the service required by subsection (d)(5). The 
        Secretary of Transportation, in consultation with the 
        Secretary of Defense, shall determine in which service 
        the individual shall serve. In cases of hardship as 
        determined by the Secretary of Transportation, the 
        Secretary of Transportation may waive this paragraph in 
        whole or in part.
          (2) Recovery of cost.--If the Secretary of Defense is 
        unable or unwilling to order an individual to serve on 
        active duty under paragraph (1), or if the Secretary of 
        Transportation determines that reimbursement of the 
        cost of education provided would better serve the 
        interests of the United States, the Secretary of 
        Transportation may recover from the individual the 
        amount of student incentive payments, plus interest and 
        attorney fees. The Secretary may reduce the amount to 
        be recovered to reflect partial performance of service 
        obligations and other factors the Secretary determines 
        merit a reduction.
  (g) Actions to recover cost.--To aid in the recovery of the 
cost of education provided by the Government under a commitment 
agreement under this section, the Secretary of Transportation 
may--
          (1) request the Attorney General to bring a civil 
        action against the individual; and
          (2) make use of the Federal debt collection 
        procedures in chapter 176 of title 28 or other 
        applicable administrative remedies.

           *       *       *       *       *       *       *


Sec. 51511. Midshipman status in the [Naval Reserve] 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 Reserve] Navy Reserve (including the 
Merchant Marine Reserve, [Naval Reserve] 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.] of the United States and to perform 
functions to assist the United States merchant marine, as 
determined necessary by the Secretary.
  (b) Specific authority.--The Secretary may--
          (1) determine the number of individuals to be 
        enrolled for training and reserve purposes in the 
        Service;
          (2) fix the rates of pay and allowances of the 
        individuals without regard to chapter 51 or subchapter 
        III of chapter 53 of title 5;
          (3) prescribe the course of study and the periods of 
        training for the Service; and
          (4) prescribe the uniform of the Service and the 
        rules on providing and wearing the uniform.
  (c) Ranks, grades, and ratings.--The ranks, grades, and 
ratings for personnel of the Service shall be the same as those 
prescribed for personnel of the Coast Guard.
  (d) Medals and awards.--The Secretary may establish and 
maintain a medals and awards program to recognize distinguished 
service, superior achievement, professional performance, and 
other commendable achievement by personnel of the Service.

                  CHAPTER 519. MERCHANT MARINE AWARDS

[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.]

Sec. 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.
  (b) Civil penalty.--A person violating this section is liable 
to the United States Government for a civil penalty of not more 
than $2,000.

                 PART C. FINANCIAL ASSISTANCE PROGRAMS

                  CHAPTER 531. MARITIME SECURITY FLEET

Sec. 53105. Obligations and rights under operating agreements

  (a) Operation of vessel.--An operating agreement under this 
chapter shall require that, during the period a vessel is 
operating under the agreement--
          (1) the vessel--
                  (A) shall be operated exclusively in the 
                foreign commerce or in mixed foreign commerce 
                and domestic trade allowed under a registry 
                endorsement issued under section 12111 of this 
                title; and
                  (B) shall not otherwise be operated in the 
                coastwise trade; and
          (2) the vessel shall be documented under chapter 121 
        of this title.
  (b) Annual payments by Secretary.--
          (1) In general.--An operating agreement under this 
        chapter shall require, subject to the availability of 
        appropriations, that the Secretary make a payment each 
        fiscal year to the contractor in accordance with 
        section 53106.
          (2) Operating agreement is obligation of united 
        states government.--An operating agreement under this 
        chapter constitutes a contractual obligation of the 
        United States Government to pay the amounts provided 
        for in the agreement to the extent of actual 
        appropriations.
  (c) Documentation requirement.--Each vessel covered by an 
operating agreement (including an agreement terminated under 
section 53104(c)(2)) shall remain documented under chapter 121 
of this title, until the date the operating agreement would 
terminate according to its terms.
  (d) National security requirements.--
          (1) In general.--A contractor with respect to an 
        operating agreement (including an agreement terminated 
        under section 53104(c)(2)) shall continue to be bound 
        by the provisions of section 53107 until the date the 
        operating agreement would terminate according to its 
        terms.
          (2) Emergency preparedness agreement.--All terms and 
        conditions of an Emergency Preparedness Agreement 
        entered into under section 53107 shall remain in effect 
        until the date the operating agreement would terminate 
        according to its terms, except that the terms of such 
        Emergency Preparedness Agreement may be modified by the 
        mutual consent of the contractor, the Secretary of 
        Transportation, and the Secretary of Defense.
  (e) Transfer of operating agreements.--
          (1) A contractor under an operating agreement may 
        transfer the agreement (including all rights and 
        obligations under the agreement) to any person that is 
        eligible to enter into that operating agreement under 
        this chapter, if the transfer is approved by the 
        Secretary and the Secretary of Defense.
          (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 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.
  (f) Replacement vessel.--A contractor may replace a vessel 
under an operating agreement with another vessel that is 
eligible to be included in the Fleet under section 53102(b), if 
the Secretary, in conjunction with the Secretary of Defense, 
approves replacement of the vessel.

                   CHAPTER 537. LOANS AND GUARANTEES

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) 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 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. 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--
                  (A) the purchase of individual fishing quotas 
                in accordance with section 303(d)(4) of the 
                Magnuson-Stevens Fishery Conservation and 
                Management Act (including the reimbursement of 
                obligors for expenditures previously made for 
                such a purchase);
                  (B) activities that assist in the transition 
                to reduced fishing capacity; or
                  (C) technologies or upgrades designed to 
                improve collection and reporting of fishery-
                dependent data, to reduce bycatch, to improve 
                selectivity or reduce adverse impacts of 
                fishing gear, or to improve safety.
  (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.--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.
  (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.

           *       *       *       *       *       *       *


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 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.

           *       *       *       *       *       *       *


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, 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.

                      PART D. PROMOTIONAL PROGRAMS

                      CHAPTER 551. COASTWISE TRADE

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

  (a) In general.--The transportation of hazardous waste, as 
defined in section 1004(5) of the Resource Conservation and 
Recovery Act of 1976 (42 U.S.C. 6903(5)), from a point in the 
United States to sea for incineration is deemed to be 
transportation of merchandise under section 55102 of this 
title.
  (b) Nonapplication to certain foreign vessels.--
          (1) In general.--Subsection (a) does not apply to 
        transportation performed by a foreign ocean 
        incineration vessel owned by or under construction on 
        May 1, 1982, for a corporation wholly owned by citizens 
        of the United States under section 50501(a)-(c) of this 
        title.
          (2) Standards for incineration equipment.--
        Incineration equipment on a vessel described in 
        paragraph (1) must meet standards of the Coast Guard 
        and the Environmental Protection Agency.
          (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.
  (c) Effective date.--Subsection (a) is not effective until an 
appropriate vessel has been built and documented under chapter 
121 of this title.

           *       *       *       *       *       *       *


Sec. 55110. Transportation of valueless material or dredged material

  Section 55102 of this title applies to the transportation of 
valueless material or dredged material, regardless of whether 
it has commercial value, from a point in the United States or 
on the high seas within the exclusive economic zone, to another 
point in the United States or on the high seas within the 
exclusive economic zone.

           *       *       *       *       *       *       *


               PART F. GOVERNMENT-OWNED MERCHANT VESSELS

CHAPTER 575. CONSTRUCTION, CHARTER, AND SALE OF VESSELS

           *       *       *       *       *       *       *


Sec. 57533. Vessel chartering authority

  The Secretary of Transportation may enter into contracts or 
other agreements on behalf of the United States to purchase, 
charter, operate, or otherwise acquire the use of any vessels 
documented under chapter 121 of this title and any other 
related real or personal property. The Secretary is authorized 
to use this authority as the Secretary deems appropriate.

           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--
          (1) a vessel entering from a foreign port or place in 
        North America, Central America, the West Indies 
        Islands, the Bahama Islands, the Bermuda Islands, or 
        the coast of South America bordering the Caribbean Sea; 
        or
          (2) a vessel returning to the same port or place in 
        the United States from which it departed, and not 
        entering the United States from another port or place, 
        except--
                  (A) a vessel of the United States;
                  (B) a recreational vessel (as defined in 
                section 2101 of this title); or
                  (C) a barge.
  (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).
  (c) Exception for vessels entering other than by sea.--
Subsection (a) does not apply to a vessel entering other than 
by sea from a foreign port or place at which tonnage, 
lighthouse, or other equivalent taxes are not imposed on 
vessels of the United States.

              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.
  (b) Submission.--The report shall be submitted to the 
Committee on International Relations and the Committee on 
Transportation and Infrastructure of the House of 
Representatives and the Committee on Foreign Relations and the 
Committee on Commerce, Science, and Transportation of the 
Senate. Any classified information in the report shall be 
submitted separately as an addendum.

               CHAPTER 705. MARITIME DRUG LAW ENFORCEMENT

Sec. 70502. Definitions

  (a) Application of other definitions.--The definitions in 
section 102 of the Comprehensive Drug Abuse Prevention and 
Control Act of 1970 (21 U.S.C. 802) apply to this chapter.
  (b) Vessel of the United States.--In this chapter, the term 
``vessel of the United States'' means--
          (1) a vessel documented under chapter 121 of this 
        title or numbered as provided in chapter 123 of this 
        title;
          (2) a vessel owned in any part by an individual who 
        is a citizen of the United States, the United States 
        Government, the government of a State or political 
        subdivision of a State, or a corporation incorporated 
        under the laws of the United States or of a State, 
        unless--
                  (A) the vessel has been granted the 
                nationality of a foreign nation under article 5 
                of the 1958 Convention on the High Seas; and
                  (B) a claim of nationality or registry for 
                the vessel is made by the master or individual 
                in charge at the time of the enforcement action 
                by an officer or employee of the United States 
                who is authorized to enforce applicable 
                provisions of United States law; and
          (3) a vessel that was once documented under the laws 
        of the United States and, in violation of the laws of 
        the United States, was sold to a person not a citizen 
        of the United States, placed under foreign registry, or 
        operated under the authority of a foreign nation, 
        whether or not the vessel has been granted the 
        nationality of a foreign nation.
  (c) Vessel subject to the jurisdiction of the United 
States.--
          (1) In general.--In this chapter, the term ``vessel 
        subject to the jurisdiction of the United States'' 
        includes--
                  (A) a vessel without nationality;
                  (B) a vessel assimilated to a vessel without 
                nationality under paragraph (2) of article 6 of 
                the 1958 Convention on the High Seas;
                  (C) a vessel registered in a foreign nation 
                if that nation has consented or waived 
                objection to the enforcement of United States 
                law by the United States;
                  (D) a vessel in the customs waters of the 
                United States;
                  (E) a vessel in the territorial waters of a 
                foreign nation if the nation consents to the 
                enforcement of United States law by the United 
                States; and
                  (F) a vessel in the contiguous zone of the 
                United States, as defined in Presidential 
                Proclamation 7219 of September 2, 1999 (43 
                U.S.C. 1331 note), that--
                          (i) is entering the United States;
                          (ii) has departed the United States; 
                        or
                          (iii) is a hovering vessel as defined 
                        in section 401 of the Tariff Act of 
                        1930 (19 U.S.C. 1401).
          (2) Consent or waiver of objection.--Consent or 
        waiver of objection by a foreign nation to the 
        enforcement of United States law by the United States 
        under paragraph (1)(C) or (E)--
                  (A) may be obtained by radio, telephone, or 
                similar oral or electronic means; and
                  (B) is proved conclusively by certification 
                of the Secretary of State or the Secretary's 
                designee.
  (d) Vessel without nationality.--
          (1) In general.--In this chapter, the term ``vessel 
        without nationality'' includes--
                  (A) a vessel aboard which the master or 
                individual in charge makes a claim of registry 
                that is denied by the nation whose registry is 
                claimed;
                  (B) a vessel aboard which the master or 
                individual in charge fails, on request of an 
                officer of the United States authorized to 
                enforce applicable provisions of United States 
                law, to make a claim of nationality or registry 
                for that vessel; and
                  (C) a vessel aboard which the master or 
                individual in charge makes a claim of registry 
                and for which the claimed nation of registry 
                does not affirmatively and unequivocally assert 
                that the vessel is of its 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.
  (e) Claim of nationality or registry.--A claim of nationality 
or registry under this section includes only--
          (1) possession on board the vessel and production of 
        documents evidencing the vessel's nationality as 
        provided in article 5 of the 1958 Convention on the 
        High Seas;
          (2) flying its nation's ensign or flag; or
          (3) a verbal claim of nationality or registry by the 
        master or individual in charge of the vessel.

                    MERCHANT SHIP SALES ACT OF 1946

SEC. 11. NATIONAL DEFENSE RESERVE FLEET.

                         [50 U.S.C. App. 1744]

  (a) Fleet components.--The Secretary of Transportation shall 
maintain a National Defense Reserve Fleet, including any vessel 
assigned by the Secretary to the Ready Reserve Force component 
of the fleet, consisting of those vessels owned or acquired by 
the United States Government that the Secretary of 
Transportation, after consultation with the Secretary of the 
Navy, determines are of value for national defense purposes and 
that the Secretary of Transportation decides to place and 
maintain in the fleet.
  (b) Permitted uses.--Except as otherwise provided by law, a 
vessel in the fleet may be used--
          (1) for an account of an agency of the United States 
        Government in a period during which vessels may be 
        requisitioned under section 902 of the Merchant Marine 
        Act, 1936 (46 App. U.S.C. 1242); or
          (2) on the request of the Secretary of Defense, and 
        in accordance with memoranda of agreement between the 
        Secretary of Transportation and the Secretary of 
        Defense, for--
                  (A) testing for readiness and suitability for 
                mission performance;
                  (B) defense sealift functions for which other 
                sealift assets are not reasonably available; 
                and
                  (C) support of the deployment of the United 
                States armed forces in a military contingency, 
                for military contingency operations, or for 
                civil contingency operations upon orders from 
                the National Command Authority;
          (3) for otherwise lawfully permitted storage or 
        transportation of non-defense-related cargo as directed 
        by the Secretary of Transportation with the concurrence 
        of the Secretary of Defense; [or]
          (4) for training purposes to the extent authorized by 
        the Secretary of Transportation with the concurrence of 
        the Secretary of [Defense.] Defense; or
          (5) on a reimbursable basis, for charter to the 
        government of any State, locality, or Territory of the 
        United States, except that the prior consent of the 
        Secretary of Defense for such use shall be required 
        with respect to any vessel in the Ready Reserve Force 
        or in the National Defense Reserve Fleet which is 
        maintained in a retention status for the Department of 
        Defense.
  (c) Ready Reserve Force management.--
          (1) Minimum requirements.--To ensure the readiness of 
        vessels in the Ready Reserve Force component of the 
        National Defense Reserve Fleet, the Secretary of 
        Transportation shall, at a minimum--
                  (A) maintain all of the vessels in a manner 
                that will enable each vessel to be activated 
                within a period specified in plans for 
                mobilization of the vessels;
                  [(B) activate and conduct sea trials on each 
                vessel at least once every twenty-four months;]
                  (B) activate and conduct sea trials on each 
                vessel at least once every 30 months;
                  (C) maintain in an enhanced activation status 
                those vessels that are scheduled to be 
                activated within 5 days;
                  (D) locate those vessels that are scheduled 
                to be activated within 5 days near embarkation 
                ports specified for those vessels; and
                  (E) notwithstanding section 2109 of title 46, 
                United States Code, have each vessel inspected 
                by the Secretary of the department in which the 
                Coast Guard is operating to determine if the 
                vessel meets the safety standards that would 
                apply under part B of subtitle II of that title 
                if the vessel were not a public vessel.
          (2) Vessel managers.--
                  (A) Eligibility for contract.--A person, 
                including a shipyard, is eligible for a 
                contract for the management of a vessel in the 
                Ready Reserve Force if the Secretary 
                determines, at a minimum, that the person has--
                          (i) experience in the operation of 
                        commercial-type vessels or public 
                        vessels owned by the United States 
                        Government; and
                          (ii) the management capability 
                        necessary to operate, maintain, and 
                        activate the vessel at a reasonable 
                        price.
                  (B) Contract requirement.--The Secretary of 
                Transportation shall include in each contract 
                for the management of a vessel in the Ready 
                Reserve Force a requirement that each seaman 
                who performs services on any vessel covered by 
                the contract hold the license or merchant 
                mariner's document that would be required under 
                chapter 71 or chapter 73 of title 46, United 
                States Code, for a seaman performing that 
                service while operating the vessel if the 
                vessel were not a public vessel.
  (d) Applicability of limitations on overhaul, repair, and 
maintenance in foreign shipyards.--
          (1) Application of limitation.--The provisions of 
        section 7310 of title 10, United States Code, shall 
        apply to vessels specified in subsection (b), and to 
        the Secretary of Transportation with respect to those 
        vessels, in the same manner as those provisions apply 
        to vessels specified in subsection (b) of such section, 
        and to the Secretary of the Navy, respectively.
          (2) Covered vessels.--Vessels specified in this 
        paragraph are vessels maintained by the Secretary of 
        Transportation in support of the Department of Defense, 
        including any vessel assigned by the Secretary of 
        Transportation to the Ready Reserve Force that is owned 
        by the United States.
  (e) Exemption of Fleet from 46 U.S.C. 3703a.--Vessels in the 
National Defense Reserve Fleet are exempt from the provisions 
of section 3703a of title 46, United States Code.

                       CHAPTER 541--MISCELLANEOUS

Sec.
54101. Assistance for small shipyards and maritime communities.

Sec. 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.

                           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] Shipping Act, 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]
                          (ii) strike ``section 4197 of the 
                        Revised Statutes of the United States 
                        (46 U.S.C. App. 91)'' and substitute 
                        ``section 60105 of this title''.

           *       *       *       *       *       *       *


SEC. 16. RECREATIONAL BOATING SAFETY TECHNICAL AMENDMENTS.

           *       *       *       *       *       *       *


  (c) Cross References.--
          (1) Section 4 of the Dingell-Johnson Sport Fish 
        Restoration Act (16 U.S.C. 777c) is amended by striking 
        ``13106'' wherever appearing and substituting 
        ``13107''.
          [(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.

  The following provisions are repealed, except with respect to 
rights and duties that matured, penalties that were incurred, 
or proceedings that were begun before the date of enactment of 
this Act:

           *       *       *       *       *       *       *

Act of June 29, 1936
[1111]1113.........................................................1279f
[1112]1114.........................................................1279g