§1187e. Noncontiguous domestic trades
(a) In general
(1) Except as otherwise provided in this section, no contractor or related party shall receive payments pursuant to this part during a period when it participates in a noncontiguous domestic trade, except upon written permission of the Secretary of Transportation. Such written permission shall also be required for any material change in the number or frequency of sailings, the capacity offered, or the domestic ports called by a contractor or related party in a noncontiguous domestic trade. The Secretary may grant such written permission pursuant to written application of such contractor or related party unless the Secretary finds that-
(A) existing service in that trade is adequate; or
(B) the service sought to be provided by the contractor or related party-
(i) would result in unfair competition to any other person operating vessels in such noncontiguous domestic trade, or
(ii) would be contrary to the objects and policy of this chapter.
(2) For purposes of this subsection, "written permission of the Secretary" means permission which states the capacity offered, the number and frequency of sailings, and the domestic ports called, and which is granted following-
(A) written application containing the information required by paragraph (e)(1) by a person seeking such written permission, notice of which application shall be published in the Federal Register within 15 days of filing of such application with the Secretary;
(B) holding of a hearing on the application under section 554 of title 5 in which every person, firm or corporation having any interest in the application shall be permitted to intervene and be heard; and
(C) final decision on the application by the Secretary within 120 days following conclusion of such hearing.
(b) Exceptions
(1) Subsection (a) of this section shall not apply in any way to provision by a contractor of service within the level of service provided by that contractor as of the date established by subsection (c) of this section or to provision of service permitted by subsection (d) of this section.
(2) Subsection (a) of this section shall not apply to operation by a contractor of a self-propelled tank vessel in a noncontiguous domestic trade, or to ownership by a contractor of an interest in a self-propelled tank vessel that operates in a noncontiguous domestic trade.
(c) Date of level of service
The date referred to in subsection (b) of this section shall be August 9, 1995: Provided however, That with respect to tug and barge service to Alaska the date referred to in subsection (b) of this section shall be July 1, 1992.
(d) Increase in real gross product of noncontiguous State or Commonwealth
A contractor may provide service in a trade in addition to the level of service provided as of the applicable date established by subsection (c) of this section in proportion to the annual increase in real gross product of the noncontiguous State or Commonwealth served since the applicable date established by subsection (c) of this section.
(e) Application
(1) A person applying for award of an agreement under this part shall include with the application a description of the level of service provided by that person in each noncontiguous domestic trade served as of the date applicable under subsection (c) of this section. The application also shall include, for each such noncontiguous domestic trade: a list of vessels operated by that person in such trade, their container carrying capacity expressed in twenty-foot equivalent units (TEUs) or other carrying capacity, the itinerary for each such vessel, and such other information as the Secretary may require by regulation. Such description and information shall be made available to the public. Within 15 days of the date of an application for an agreement by a person seeking to provide service pursuant to subsections (b) and (c) of this section, the Secretary shall cause to be published in the Federal Register notice of such description, along with a request for public comment thereon. Comments on such description shall be submitted to the Secretary within 30 days of publication in the Federal Register. Within 15 days after receipt of comments, the Secretary shall issue a determination in writing either accepting, in whole or part, or rejecting use of the applicant's description to establish the level of service provided as of the date applicable under subsection (c) of this section: Provided, That notwithstanding the provisions of this subsection, processing of the application for an award of an agreement shall not be suspended or delayed during the time in which comments may be submitted with respect to the determination or during the time prior to issuance by the Secretary of the required determination: Provided further, That if the Secretary does not make the determination required by this paragraph within the time provided by this paragraph, the description of the level of service provided by the applicant shall be deemed to be the level of service provided as of the applicable date until such time as the Secretary makes the determination.
(2) No contractor shall implement the authority granted in subsection (d) of this section except as follows:
(A) An application shall be filed with the Secretary which shall state the increase in capacity sought to be offered, a description of the means by which such additional capacity would be provided, the basis for applicant's position that such increase in capacity would be in proportion to or less than the increase in real gross product of the relevant noncontiguous State or Commonwealth since the applicable date established by subsection (c) of this section, and such information as the Secretary may require so that the Secretary may accurately determine such increase in real gross product of the relevant noncontiguous State or Commonwealth.
(B) Such increase in capacity sought by applicant and such information shall be made available to the public.
(C) Within 15 days of the date of an application pursuant to this paragraph the Secretary shall cause to be published in the Federal Register notice of such application, along with a request for public comment thereon.
(D) Comments on such application shall be submitted to the Secretary within 30 days of publication in the Federal Register.
(E) Within 15 days after receipt of comments, the Secretary shall issue a determination in writing either accepting, in whole or part, or rejecting, the increase in capacity sought by the applicant as being in proportion to or less than the increase in real gross product of the relevant noncontiguous State or Commonwealth since the applicable date established by subsection (c) of this section: Provided, That, notwithstanding the provisions of this section, if the Secretary does not make the determination required by this paragraph within the time provided by this paragraph, the increase in capacity sought by applicant shall be permitted as being in proportion to or less than such increase in real gross product until such time as the Secretary makes the determination.
(f) Denial of payments
With respect to provision by a contractor of service in a noncontiguous domestic trade not authorized by this section, the Secretary shall deny payments under the operating agreement with respect to the period of provision of such service but shall deny payments only in part if the extent of provision of such unauthorized service was de minimis or not material.
(g) Temporary service
Notwithstanding any other provision of this part, the Secretary may issue temporary permission for any United States citizen, as that term is defined in sections 802 and 803 of this Appendix, to provide service to a noncontiguous State or Commonwealth upon the request of the Governor of such noncontiguous State or Commonwealth, in circumstances where an Act of God, a declaration of war or national emergency, or any other condition occurs that prevents ocean transportation service to such noncontiguous State or Commonwealth from being provided by persons currently providing such service. Such temporary permission shall expire 90 days from date of grant, unless extended by the Secretary upon written request of the Governor of such State or Commonwealth.
(h) Definitions
As used in this section:
(1) The term "level of service provided by a contractor" in a trade as of a date means-
(A) with respect to service other than service described in (B), the total annual capacity provided by the contractor in that trade for the 12 calendar months preceding that date: Provided, That, with respect to unscheduled, contract carrier tug and barge service between points in Alaska south of the Arctic Circle and points in the contiguous 48 States, the level of service provided by a contractor shall include 100 percent of the capacity of the equipment dedicated to such service on the date specified in subsection (c) of this section and actually utilized in that service in the two-year period preceding that date, excluding service to points between Anchorage, Alaska and Whittier, Alaska, served by common carrier service unless such unscheduled service is only for carriage of oil or pursuant to a contract with the United States military: Provided further, That, with respect to scheduled barge service between the contiguous 48 States and Puerto Rico, such total annual capacity shall be deemed as such total annual capacity plus the annual capacity of two additional barges, each capable of carrying 185 trailers and 100 automobiles; and
(B) with respect to service provided by container vessels, the overall capacity equal to the sum of-
(i) 100 percent of the capacity of vessels operated by or for the contractor on that date, with the vessels' configuration and frequency of sailing in effect on that date, and which participate solely in that noncontiguous domestic trade; and
(ii) 75 percent of the capacity of vessels operated by or for the contractor on that date, with the vessels' configuration and frequency of sailing in effect on that date, and which participate in that noncontiguous domestic trade and in another trade, provided that the term does not include any restriction on frequency, or number of sailings, or on ports called within such overall capacity.
(2) The level of service set forth in paragraph (1) shall be described with the specificity required by subsection (e)(1) of this section and shall be the level of service in a trade with respect to the applicable date established by subsection (c) of this section only if the service is not abandoned thereafter, except for interruptions due to military contingency or other events beyond the contractor's control.
(3) The term "participates in a noncontiguous domestic trade" means directly or indirectly owns, charters, or operates a vessel engaged in transportation of cargo between a point in the contiguous 48 states and a point in Alaska, Hawaii, or Puerto Rico, other than a point in Alaska north of the Arctic Circle.
(4) The term "related party" means-
(A) a holding company, subsidiary, affiliate, or associate of a contractor who is a party to an operating agreement under this part; and
(B) an officer, director, agent, or other executive of a contractor or of a person referred to in subparagraph (A).
(June 29, 1936, ch. 858, title VI, §656, as added
Amendments
1997-Subsec. (b).