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H.R.1588
National Defense Authorization Act for Fiscal Year 2004 (Enrolled as
Agreed to or Passed by Both House and Senate)
g new subtitle:
`Subtitle V--Merchant Marine
`Chap.
-Sec.
-`531.
-Maritime Security Fleet
-53101
`CHAPTER 531--MARITIME SECURITY FLEET
`53102. Establishment of Maritime Security Fleet.
`53103. Award of operating agreements.
`53104. Effectiveness of operating agreements.
`53105. Obligations and rights under operating agreements.
`53107. National security requirements.
`53108. Regulatory relief.
`53109. Special rule regarding age of participating fleet vessel.
`53111. Authorization of appropriations.
`Sec. 53101. Definitions
`(1) BULK CARGO- The term `bulk cargo' means cargo that is loaded and
carried in bulk without mark or count.
`(2) CONTRACTOR- The term `contractor' means an owner or operator of a
vessel that enters into an operating agreement for the vessel with the
Secretary under section 53103.
`(3) FLEET- The term `Fleet' means the Maritime Security Fleet
established under section 53102(a).
`(4) FOREIGN COMMERCE- The term `foreign commerce'--
`(A) subject to subparagraph (B), means--
`(i) commerce or trade between the United States, its territories or
possessions, or the District of Columbia, and a foreign country;
and
`(ii) commerce or trade between foreign countries; and
`(B) includes, in the case of liquid and dry bulk cargo carrying
services, trading between foreign ports in accordance with normal
commercial bulk shipping practices in such manner as will permit United
States-documented vessels freely to compete with foreign-flag bulk
carrying vessels in their operation or in competing for charters, subject
to rules and regulations promulgated by the Secretary of Transportation
pursuant to this chapter or subtitle D of the Maritime Security Act of
2003.
`(5) LASH VESSEL- The term `LASH vessel' means a lighter aboard ship
vessel.
`(6) PARTICIPATING FLEET VESSEL- The term `participating fleet vessel'
means any vessel that--
`(A) on October 1, 2005--
`(i) meets the requirements of paragraph (1), (2), (3), or (4) of
section 53102(c); and
`(ii) is less than 25 years of age, or less than 30 years of age in
the case of a LASH vessel; and
`(B) on December 31, 2004, is covered by an operating agreement under
subtitle B of title VI of the Merchant Marine Act, 1936 (46 U.S.C. App.
1187 et seq.).
`(7) PERSON- The term `person' includes corporations, partnerships, and
associations existing under or authorized by the laws of the United States,
or any State, Territory, District, or possession thereof, or of any foreign
country.
`(8) PRODUCT TANK VESSEL- The term `product tank vessel' means a double
hulled tank vessel capable of carrying simultaneously more than 2 separated
grades of refined petroleum products.
`(9) SECRETARY- The term `Secretary' means the Secretary of
Transportation.
`(10) TANK VESSEL- The term `tank vessel' has the meaning that term has
under section 2101 of this title.
`(11) UNITED STATES- The term `United States' includes the District of
Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands,
Guam, American Samoa, the Virgin Islands.
`(12) UNITED STATES CITIZEN TRUST- (A) Subject to subparagraph (C), the
term `United States citizen trust' means a trust that is qualified under
this paragraph.
`(B) A trust is qualified under this paragraph with respect to a vessel
only if--
`(i) each of the trustees is a citizen of the United States;
and
`(ii) the application for documentation of the vessel under chapter
121 of this title 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.
`(C) 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.
`(D) This paragraph shall not be considered to prohibit a person who is
not a citizen of the United States from holding more than 25 percent of the
beneficial interest in a trust.
`(13) UNITED STATES-DOCUMENTED VESSEL- The term `United
States-documented vessel' means a vessel documented under chapter 121 of
this title.
`Sec. 53102. Establishment of Maritime Security Fleet
`(a) IN GENERAL- The Secretary of Transportation, in consultation with the
Secretary of Defense, shall establish a fleet of active, commercially viable,
militarily useful, privately owned vessels to meet national defense and other
security requirements and maintain a United States presence in international
commercial shipping. The Fleet shall consist of privately owned, United
States-documented vessels for which there are in effect operating agreements
under this chapter, and shall be known as the Maritime Security Fleet.
`(b) VESSEL ELIGIBILITY- A vessel is eligible to be included in the Fleet
if--
`(1) the vessel meets the requirements of paragraph (1), (2), (3), or
(4) of subsection (c);
`(2) the vessel is operated (or in the case of a vessel to be
constructed, will be operated) in providing transportation in foreign
commerce;
`(3) the vessel is self-propelled and is--
`(A) a roll-on/roll-off vessel with a carrying capacity of at least
80,000 square feet or 500 twenty-foot equivalent units and that is 15
years of age or less on the date the vessel is included in the
Fleet;
`(B) a tank vessel that is constructed in the United States after the
date of the enactment of this chapter;
`(C) a tank vessel that is 10 years of age or less on the date the
vessel is included in the Fleet;
`(D) a LASH vessel that is 25 years of age or less on the date the
vessel is included in the Fleet; or
`(E) any other type of vessel that is 15 years of age or less on the
date the vessel is included in the Fleet;
`(A) determined by the Secretary of Defense to be suitable for use by
the United States for national defense or military purposes in time of war
or national emergency; and
`(B) determined by the Secretary to be commercially viable;
and
`(A) is a United States-documented vessel; or
`(B) is not a United States-documented vessel, but--
`(i) the owner of the vessel has demonstrated an intent to have the
vessel documented under chapter 121 of this title if it is included in
the Fleet; and
`(ii) at the time an operating agreement for the vessel is entered
into under this chapter, the vessel is eligible for documentation under
chapter 121 of this title.
`(c) REQUIREMENTS REGARDING CITIZENSHIP OF OWNERS, CHARTERERS, AND
OPERATORS-
`(1) VESSEL OWNED AND OPERATED BY SECTION 2 CITIZENS- A vessel meets the
requirements of this paragraph if, during the period of an operating
agreement under this chapter that applies to the vessel, the vessel will be
owned and operated by one or more persons that are citizens of the United
States under section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802).
`(2) VESSEL OWNED BY SECTION 2 CITIZEN OR UNITED STATES CITIZEN TRUST,
AND CHARTERED TO DOCUMENTATION CITIZEN- A vessel meets the requirements of
this paragraph if--
`(A) during the period of an operating agreement under this chapter
that applies to the vessel, the vessel will be--
`(i) owned by a person that is a citizen of the United States under
section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802) or that is a
United States citizen trust; and
`(ii) demise chartered to a person--
`(I) that is eligible to document the vessel under chapter 121 of
this title;
`(II) the chairman of the board of directors, chief executive
officer, and a majority of the members of the board of directors of
which are citizens of the United States under section 2 of the
Shipping Act, 1916 (46 U.S.C. App. 802), and are appointed and
subjected to removal only upon approval by the Secretary;
and
`(III) that certifies to the Secretary that there are no treaties,
statutes, regulations, or other laws that would prohibit the
contractor for the vessel from performing its obligations under an
operating agreement under this chapter;
`(B) in the case of a vessel that will be demise chartered to a person
that is owned or controlled by another person that is not a citizen of the
United States under section 2 of the Shipping Act, 1916 (46 U.S.C. App.
802), the other person enters into an agreement with the Secretary not to
influence the operation of the vessel in a manner that will adversely
affect the interests of the United States; and
`(C) the Secretary and the Secretary of Defense notify the Committee
on Armed Services and the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Armed Services of the
House of Representatives that they concur with the certification required
under subparagraph (A)(ii)(III), and have reviewed and agree that there
are no other legal, operational, or other impediments that would prohibit
the contractor for the vessel from performing its obligations under an
operating agreement under this chapter.
`(3) VESSEL OWNED AND OPERATED BY DEFENSE CONTRACTOR- A vessel meets the
requirements of this paragraph if--
`(A) during the period of an operating agreement under this chapter
that applies to the vessel, the vessel will be owned and operated by a
person that--
`(i) is eligible to document a vessel under chapter 121 of this
title;
`(ii) operates or manages other United States-documented vessels for
the Secretary of Defense, or charters other vessels to the Secretary of
Defense;
`(iii) has entered into a special security agreement for purposes of
this paragraph with the Secretary of Defense;
`(iv) makes the certification described in paragraph
(2)(A)(ii)(III); and
`(v) in the case of a vessel described in paragraph (2)(B), enters
into an agreement referred to in that paragraph; and
`(B) the Secretary and the Secretary of Defense notify the Committee
on Armed Services and the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Armed Services of the
House of Representatives that they concur with the certification required
under subparagraph (A)(iv), and have reviewed and agree that there are no
other legal, operational, or other impediments that would prohibit the
contractor for the vessel from performing its obligations under an
operating agreement under this chapter.
`(4) VESSEL OWNED BY DOCUMENTATION CITIZEN AND CHARTERED TO SECTION 2
CITIZEN- A vessel meets the requirements of this paragraph if, during the
period of an operating agreement under this chapter that applies to the
vessel, the vessel will be--
`(A) owned by a person that is eligible to document a vessel under
chapter 121 of this title; and
`(B) demise chartered to a person that is a citizen of the United
States under section 2 of the Shipping Act, 1916 (46 U.S.C. App.
802).
`(d) REQUEST BY SECRETARY OF DEFENSE- The Secretary of Defense shall
request the Secretary of Homeland Security to issue any waiver under the first
section of Public Law 81-891 (64 Stat. 1120; 46 U.S.C. App. note prec. 3) that
is necessary for purposes of this chapter.
`(1) CERTIFICATE OF INSPECTION- A vessel used to provide oceangoing
transportation which the Secretary of the department in which the Coast
Guard is operating determines meets the criteria of subsection (b) of this
section but which, on the date of enactment of the Maritime Security Act of
2003, is not a documented vessel (as that term is defined in section 12101
of this title) shall be eligible for a certificate of inspection if the
Secretary determines that--
`(A) the vessel is classed by and designed in accordance with the
rules of the American Bureau of Shipping, or another classification
society accepted by the Secretary;
`(B) the vessel complies with applicable international agreements and
associated guidelines, as determined by the country in which the vessel
was documented immediately before becoming a documented vessel (as defined
in that section); and
`(C) that country has not been identified by the Secretary as
inadequately enforcing international vessel regulations as to that
vessel.
`(2) CONTINUED ELIGIBILITY FOR CERTIFICATE- Paragraph (1) does not apply
to a vessel after any date on which the vessel fails to comply with the
applicable international agreements and associated guidelines referred to in
paragraph (1)(B).
`(3) Reliance on classification society-
`(A) IN GENERAL- The Secretary may rely on a certification from the
American Bureau of Shipping or, subject to subparagraph (B), another
classification society accepted by the Secretary to establish that a
vessel is in compliance with the requirements of paragraphs (1) and
(2).
`(B) FOREIGN CLASSIFICATION SOCIETY- The Secretary may accept
certification from a foreign classification society under subparagraph (A)
only--
`(i) to the extent that the government of the foreign country in
which the society is headquartered provides access on a reciprocal basis
to the American Bureau of Shipping; and
`(ii) if the foreign classification society has offices and
maintains records in the United States.
`(f) WAIVER OF AGE RESTRICTION- The Secretary of Defense, in conjunction
with the Secretary of Transportation, may waive the application of an age
restriction under subsection (b)(3) if the Secretaries jointly determine that
the waiver--
`(1) is in the national interest;
`(2) is appropriate to allow the maintenance of the economic viability
of the vessel and any associated operating network; and
`(3) is necessary due to the lack of availability of other vessels and
operators that comply with the requirements of this chapter.
`Sec. 53103. Award of operating agreements
`(a) IN GENERAL- The Secretary shall require, as a condition of including
any vessel in the Fleet, that the person that is the owner or operator of the
vessel for purposes of section 53102(c) enter into an operating agreement with
the Secretary under this section.
`(b) PROCEDURE FOR APPLICATIONS-
`(1) ACCEPTANCE OF APPLICATIONS- Beginning no later than 30 days after
the effective date of this chapter, the Secretary shall accept applications
for enrollment of vessels in the Fleet.
`(2) ACTION ON APPLICATIONS- Within 90 days after receipt of an
application for enrollment of a vessel in the Fleet, the Secretary shall
approve the application in conjunction with the Secretary of Defense, and
shall enter into an operating agreement with the applicant, or provide in
writing the reason for denial of that application.
`(3) PARTICIPATING FLEET VESSELS-
`(A) IN GENERAL- The Secretary shall accept an application for an
operating agreement for a participating fleet vessel under the priority
under subsection (c)(1)(B) only from a person that has authority to enter
into an operating agreement for the vessel with respect to the full term
of the operating agreement.
`(B) VESSEL UNDER DEMISE CHARTER- For purposes of subparagraph (A), in
the case of a vessel that is subject to a demise charter that terminates
by its terms on September 30, 2005 (without giving effect to any extension
provided therein for completion of a voyage or to effect the actual
redelivery of the vessel), or that is terminable at will by the owner of
the vessel after such date, only the owner of the vessel shall be treated
as having the authority referred to in paragraph (1).
`(C) VESSEL OWNED BY UNITED STATES CITIZEN TRUST- For purposes of
subparagraph (B), in the case of a vessel owned by a United States citizen
trust, the term `owner of the vessel' includes a beneficial owner of the
vessel with respect to such trust.
`(c) PRIORITY FOR AWARDING AGREEMENTS-
`(1) IN GENERAL- Subject to the availability of appropriations, the
Secretary shall enter into operating agreements according to the following
priority:
`(A) NEW TANK VESSELS- First, for any tank vessel that--
`(i) is constructed in the United States after the effective date of
this chapter;
`(ii) is eligible to be included in the Fleet under section
53102(b); and
`(iii) during the period of an operating agreement under this
chapter that applies to the vessel, will be owned and operated by one or
more persons that are citizens of the United States under section 2 of
the Shipping Act, 1916 (46 U.S.C. App. 802),
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